Predatory to consider social media as a marketing platform?
Ted McConnell is a manager in P&G Corporation. Recently, He delivered some interesting thoughts on marketing issues based on social media tools:
1 ‘Who said this is media?’
He went on to apply a similar standard to the broader world of consumer-generated media. “I think when we call it ‘consumer-generated media,’ we’re being predatory,” he said. “Who said this is media? Media is something you can buy and sell. Media contains inventory. Media contains blank spaces. Consumers weren’t trying to generate media. They were trying to talk to somebody. So it just seems a bit arrogant. … We hijack their own conversations, their own thoughts and feelings, and try to monetize it.” While it’s not a company policy, but rather a personal preference, Mr. McConnell said, “I really don’t want to buy any more banner ads on Facebook.” That’s not to say he believes P&G should end all involvement with Facebook. He cited Facebook applications as a potentially valuable vehicle for advertisers, one in which they can create an environment that’s favorable for their brands and consumers alike.
2 Uncomfortable about targeting
But while he appreciates the power of targeting afforded by Facebook, Mr. McConnell said, it also makes him uncomfortable.He said a subordinate of his did an experiment in which he set out to use Facebook to find a 22- to 27-year-old female P&G employee living in Cincinnati “who likes sex and Cocoa Puffs — that was literally the target ID he asked for Facebook to find.” And he found such a person. “So the targeting is fantastic,” Mr. McConnell said. “You can do really amazing things. But I’m not so sure I want to be targeted like that. … I don’t think everything every consumer says to someone else and writes down is somehow monetizable by the media industry.”
3 Inventory explosion
More broadly, Mr. McConnell said he believes marketer dollars will continue to flow online, but that won’t necessarily be a boon to online publishers, because online display inventory continues to grow faster than the dollars going after it. He cited research by Morgan Stanley showing cost-per-thousand rates on banner ads falling from $3 to $1 on average during this decade. And despite rapid growth of internet audiences in markets such as Brazil and China, he said, advertisers are able to pay CPMs of about 5 cents because of the even more rapid explosion of inventory there. “Fragmentation thwarts artificial scarcity,” he said, noting that CPMs for rich media have held up somewhat better. Search CPMs are growing largely because of Google’s quality-scoring system, he said. Despite the growth of online classified-advertising alternatives, Mr. McConnell said, classified revenue for offline publishers continues to dwarf online classified spending, leaving plenty of remaining revenue for newspapers and room for growth for online alternatives. But the divergence of fortune for pay-per-click and other performance-based models vs. CPM-based models will only intensify as the economy worsens, Mr. McConnell predicted. “‘Spray and pray’ is a little harder to do when you’re under economic pressure,” he said. “So performance-based advertising will gain share over CPM.”
Here is the link to the original article: http://adage.com/digital/article?article_id=132606
Maybe Ted intrigues questions we fail to ask in the first place: who got you the right to use the user-generated content in the social platform? Is it necessary to commercialize all social media platforms?
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ashleyb
It sounds like his central point is really that display advertising is on the way out, and that a new model (performance-based) needs to replace it. But to get to the next model of successful advertising, it seems advertisers will have to employ the very kind of targeting that Mr. McConnell finds distasteful.
I think his initial statement — “who said this is media?” — makes sense on first reading. But the fact is that the customers who are talking to each other on websites and forums, are often doing so in public, on media spaces that are owned and hosted by companies. The forums they’re using as vehicles for conversation *do* contain inventory and blank spaces for ads. Whether or not consumers intend to create “media” when they initiate conversations, they should have a basic understanding of the space in which they are playing.
Nov 28th, 2008
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