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The Second Internet

by loukerner on January 25, 2012

While I thoroughly enjoyed my time as a Wall Street analyst, compliance issues hampered my ability to blog on SecondShares.  Now that I’m back angel investing, I look forward to sharing thoughts and analysis on the social and mobile companies I refer to as “Second Internet” companies.  Just as first internet companies disrupted the offline leaders (e.g. Amazon v Walmart), Second Internet companies that are BORN social, will disrupt incumbent firs internet leaders.  I first outlined my thesis in the only real deep thought piece I wrote “The Second Internet“, I have continued to evolve the thesis in a deck I also call “The Second Internet“.  While the deck is meant to be given live (which I love doing, as it’s such a fun dynamic topic to discuss), a lot of value can be derived by reviewing the slides.   Enjoy the deck, share it, and I look forward to future posts.

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Guest post by Chris Cunningham, co-founder & CEO appssavvy

The emergence of social media has dramatically changed consumer behavior. People now spend more time online performing social activities than they do on email, content portals and instant messaging combined. Despite this profound behavioral shift, online ad inventory and delivery has gone largely unchanged, while opportunities to engage key audiences at key moments remain untapped.

New research from appssavvy, Social Activity Index – Measuring the Effectiveness of Social Advertising,” reveals the power of delivering brand messages against social activity and underscores its evolution as one of the most effective forms of digital marketing to drive brand engagement.

SOCIAL ACTIVITY ADVERTISING DEFINED

Social activity advertising includes online advertising channels that serve ad impressions against events rather than content. This enables brands to deliver contextually relevant ads based on what people are doing rather than what they’re viewing. This new segment of display advertising delivers brand messages within activities or events in social games, apps or websites, which include sending a virtual gift, playing a branded level within a game, completing a poll or quiz, entering a photo contest, to name a few. Upon completion of a brand-enabled activity, a social ad is delivered. These ads combine brand messaging through video and interactive media with social calls to action such as sharing, following, or Like-ing.

KEY FINDINGS

Key Finding 1: Social activity advertising rivals the effectiveness of paid search, outperforms standard display ads by 11 times, and more than doubles the performance of rich media.


Drivers of Performance

Social activity ads perform at high levels for two reasons. First, social activity advertising places brands and ads within highly interactive, social content that typically enjoys a loyal and engaged audience, allowing marketers to leverage naturally occuring activity to drive significant engagement with their brands.

Second, social activity ads offer a wider variety of calls to action vs. other online ad formats, including clicks to URLs, video views, sharing to Facebook, tweeting, etc

 

Key Finding 2: Within social activity advertising, social games deliver the highest performance, outperforming all other ad formats (including paid search).

Drivers of Performance

The strong performance of gaming advertising is driven by its exceptionally high activity rate and uniquely engaged audience – games enjoy audiences that play for hours per week while completing several activities per minute. Additionally, ads incorporated into gift giving, virtual good use and the completion of in-game missions or quests enable brands to integrate and become associated with daily events that enrich the everyday life of the gaming audience.

BEST PRACTICES

The most successful social activity ad units immerse themselves within the flow of activities that occur naturally within a website, game or app.  Branded calls to action should mirror functionality and styling throughout the website, game or app, and can serve to enrich, rather than disrupt, the user experience.

 

Additionally, social activity ads are most effective when the activities inherently involve a high level of interaction. Apps and websites that drive the creation of shareable content or encourage self-expression through activites like interactive contest entries provide advertisers the best opportunity to foster brand engagement.

CONCLUSION

Social activity advertising gives brands access to previously untapped ad inventory and provides a new way to engage with consumers at a time when they are actively involved with relevant activities. These lean-forward events allow context and intent to be captured before ads are delivered, and have paved the way for a new segment of display advertising that significantly outperforms other display media, including rich media and video, and indexes alongside search. As the Internet continues to evolve and time spent online continues its shift towards social media and games, social activity advertising will become an increasingly powerful way to reach and impact online audiences.


 

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Guest Post by Matt Monahan, Epic Social Director

 

 

Long before the Social Web was invented, email marketers and search marketers were building scalable, sustainable businesses by understanding two simple principles; their customer’s life-time value (LTV) and their customer’s acquisition cost.  The customer LTV principle has not evaporated along with the many industries disrupted by the Social Web, but it needs to be re-embraced to ultimately define an acceptable acquisition cost for fans, followers and owned audiences on the Social Web.  Measuring LTV can be like peeling an onion if you don’t know how to slice the data. Below are a few measurement tips we give marketers:

 

  1. Measure sales through tweets and status updates:  Use URL shortening services to track click volume and conversions from your posts on Facebook, Twitter and anywhere else you can freely communicate with your customers.  Each click generated through an owned audience channel, like a Fan Page, is a click you didn’t have to pay for elsewhere.

 

  1. Offer a native point of sale: If you are selling products online, why don’t you have your store available on your Fan page?  Anytime a user has to click out, you have lost some.

 

  1. Survey your customers after they have purchased: Use a service like KissInsights to survey customers after they have made a purchase.  Ask them if they are on Facebook, and if the are a Fan of your business.  There is a lot you can learn about where to be spending your marketing dollars based on where your customers are coming from and what they think of your product.

 

  1. Start measuring and attributing value the less obvious metrics:

 

Every time you post an update to your Facebook Fan page, your customers are being reminded you exist.  Those impressions and the imprint you have left on the mind of your audience in not valueless; start to think about how much impressions, likes, retweets, video views and comments mean to your brand, start to measure how much attention you are creating, and start to realize that the cost avoidance created through your owned audience is worth something.

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by loukerner on March 15, 2011

Click Here For PDF Version of Twism 3-14-11

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Adgregate launched in mid-2010, to help retailers sell on Facebook. Today, Adgregate has over 50 clients among the top Intenet 500 retailers.

Retailers pay Adgregate a startup fee, as a percentage of the transactions consummated. Many retailers have accumulated large numbers of fans on Facebook.

While Fanpages are an important part of any companies Facebook/social media presence, a holistic approach also includes having a retail presence within the Facebook environment which enables direct monetization of the fan base on Facebook.com. By enabling brands to build a storefront within Facebook itself, Adgregate can increase conversion and customer engagement. Transactions can occur on the retailer’s Fanpage, as well as in the News Feed.

Payments are made with credit cards, as opposed to Facebook credits, which to date have only been used to buy virtual goods. Adgregate has established close relationships with Semantic, MacAfee and other security providers to ensure that the entire transaction is completely secure and integrates well with a company’s eCommerce backend. This facilitates scalability.

Underwood believes that Facebook sees Adgregate as adding utility to the Facebook ecosystem. Underwood believes that if Facebook were to enable the use of Facebook Credits for social commerce, while also lowering the current 30% fee charged for virtual goods transactions, eCommerce on the Facebook platform would take off.

Adgregate is analogous to GSI Commerce, which enables retailers to build a retail presence on the web by building web sites (i.e. customizing GSI’s front-end) and handling fulfillment and payments (the back-end). GSI has yet to offer solutions for retailers on Facebook. Underwood believes GSI will try to enter the Facebook retailing space, but he feels that this transition will be challenging as it is outside of GSI’s core focus. The rapidly changing Facebook ecosystem presents challenge, and Underwood feels that the pace of change creates even greater difficulty for companies with legacy infrastructures and more rigid processes.

Underwood said that many retailers are eager to experiment within the new vertical. Freed from the constraints of benchmarks and targets that they are used to managing to, companies are more willing to test on Facebook than they are to try new things on their own more established websites.

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Click Here For PDF.

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Lou Kerner on Bloomberg: Facebook and Google continue to grow more “interdependent”

February 13, 2011

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Zynga’s Cityville Is Aggregating A Giant Metropolis, Becomes The First Game on Facebook To Pass 100 Million MAUs

January 20, 2011

Share Zynga’s CityVille surged past 100mm Monthly Active Users (MAUs) on January 13, just 41 days after its release, becoming the first game in Facebook history to break that milestone. Cityville become the biggest game in Facebook history on January 1, by surpassing the 83.7 million mark set by Zynga’s Farmville on March 11, 2010.  [...]

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Wedbush to present “Wall Street’s View on Social Media” at a special breakfast event in Palo Alto on Jan. 28th

January 20, 2011

Share Is Facebook really now worth an estimated $70B? Is Twitter worth $4B? What happens to Google in this new world order? Is this all just a bubble waiting to burst or are we at a transformational crossroads providing significant wealth creation opportunities for investors, entrepreneurs, and MBA’s who choose the right start-up to join? [...]

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VC Funding of Social Media Companies Soars to $819 Million in the Fourth Quarter

January 10, 2011

Share In a comprehensive review of the thousands of VC transactions in 2010, we attempted to identify each investment that was made in a company we considered to be a Social Media focused company.  We then looked at each of those Social Media companies, and tried to identify each company that was, or will be, [...]

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