Rants from the corner office: SocialVibe's Voluntary Ads Aim To Make The Interne...

Rants from the corner office: SocialVibe's Voluntary Ads Aim To Make The Interne...: Guest posting by Fast Company's Greg Ferenstein: SocialVibe has ambitious plans to make much of the Internet completely free, from FarmV...

SocialVibe's Voluntary Ads Aim To Make The Internet Free

Guest posting by Fast Company's Greg Ferenstein:

SocialVibe has ambitious plans to make much of the Internet completely free, from FarmVille credits and Internet Wi-Fi, to unlimited Pandora streaming. Their method is to offer users an otherwise paid service in exchange for lengthy, interactive advertisements. Consumers appreciate the brand for saving them cash, the brands finally get enough attention to display informative and creative ads, and service providers rake in more users for premium services.

Thanks to extraordinarily high engagement rates, with the average users spending 63 seconds on an ad and 10-40% sharing it with their social network friends, SocialVibe has lassoed high-profile clients, from global brands and A-list celebrities, to presidential campaigns. "I love SocialVibe," says Pepsi's head of Digital Marketing, Shiv Sighn.

Ads and Results

"On the Internet, people have been really effective at completely ignoring banners," says SocialVibe CEO and former President of EMI Jay Samit (who, incidentally, personally negotiated iTunes' original music deal with Steve Jobs). Even gatekeeping strategies, like Hulu's video ads, are easily maneuvered by savvy multi-taskers. "Here's the flaw with Hulu," he argues, "There's no proof you were there moment-by-moment."

He continues, "you push the button, you go make yourself a mocha frappuccino, and then you come back, and then you get to watch your show."

SocialVibe's trick is to appear at the moment when users would otherwise be asked to shell out cash: A Zynga character needs energy, Pandora's free listening quota has been reached, or a user needs to connect at an airport.

SocialVibe ads exploit the pleasant surprise of a third option to wedge in a longer, more interactive ad. As an example, for Disney's Cars, users were offered virtual currency inside Zynga's popular CityVille game, for completing an ad that asked them to select a favorite character, displayed a tailored video, and then asked them to share their experience with friends over Twitter and Facebook.

Results from KN Dimestore's third-party return-on-investment evaluation of the Carsengagement are impressive: 7% more users who had played the engagement said that they had seen the movie in a follow-up survey two weeks later (32% of exposed users vs. 25% unexposed). SocialVibe's engagement was even influential enough to push 3% more users into theaters who had previously said that they had no intention of seeing the movie. Given that few people see a family film alone, and that many of the users shared their enthusiasm with Facebook friends, the actually return on investment is likely higher than 7%, which is why advertisers are willing to spend enough money per ad to make premium services free.

The impression-hungry 2012 political campaigns have already gotten wind of SocialVibe's success and have begun experimenting in key battleground states. On average, users spend over a minute with each political ad, a whopping 85% complete the entire engagement, and 65% click through to the candidate's website or issue page.

A Model for the Post-Scarcity Economy

"Many websites, many of the small content sites are absolutely dying because their business plan was based on a [cost per impression] rate that was unsustainable in a world of unlimited capacity," says Samit.

Advertising in the previous century, he contends, was based on a world of few television channels and limited magazine pages; the flood of Internet content washed away the scarcity model propping up high advertising rates, threatening the financial viability of many media industries, from news outlets to television (like Hulu). SocialVibe's innovation is to leverage an abundance of information to create hyper-targeted ads, encourage sharing with social good and personalized content, and give freedom to consumers.

For starters, SocialVibe ads only appear when users are naturally interrupted by the service itself. "We're not interrupting your day," says Samit. "You're at a point where you can either take out your credit card or you can stop listening to music; we give you a third option."

As a result, SocialVibe makes brands look like heroes, swooping down in the nick of time to save users from spending their hard-earned money. "They think beyond the world of disruptive advertising," says Singh, whereby the consumer can "appreciate the role that we're playing." In other words, Pepsi gets kudos for giving users free services.

The alternative has been, thus far, to come up with flashy, attention-seeking ads that come between the user and their information. "Let's pretend for a second that [flashy ads] did get them to click so you could get paid, does that really ingratiate you to the brand, by annoying your customer?" Samit asks, in an exasperated rant.

While users may be reluctant to spam their network with advertisements, SocialVibe's engagements typically include two elements that are more socially acceptable to share over Facebook and Twitter: individual expression and social good.

Many ads provide elementary ways to remix videos, interact with characters, or promote a cause. For the Kea Soul (pictured below), users splice their own music video together from a simple video editing engagement, and are encouraged to share their critter-filled creation with friends (play with the ad here).

Like expression, sharing philanthropic causes with friends is more socially acceptable; SocialVibe ads often gives users the option of giving to charity, as opposed to, say, buying more virtual seeds for FarmVille.

Indeed, originally, SocialVibe was exclusively a charitable marketing brand, but found that a for-profit model could dramatically increase their user base, and, ultimately, the slice of users giving to charity (like other brands we've profiled). The charitable bent has been a nice boost for Pepsi, whose Refresh campaign has bet big on social good advertising (try Pepsi's engagement here, or check out the fully gallery of social good ads here).

More than just cheap services

Samit, who has been at the helm of many digital watersheds, from negotiating with Steve Jobs over iTunes, to having the original leader in college social networks, animalhouse.com, is optimistic that user attention will be a valuable enough currency to pay for more than just entertainment. "Your mortgage is digital, your health insurance is digital, your credit card bill is digital," he predicts, and "all of these things can be whittled down with a virtual currency and a value exchange."

Rants from the corner office: The Quest for the Living Room: Are Marketers Tilti...

Rants from the corner office: The Quest for the Living Room: Are Marketers Tilti...: When Steve Jobs passed away this month, he left one major technological goal unfilled: the quest to own the living room, and more notably, t...

The Quest for the Living Room: Are Marketers Tilting At Windmills?

When Steve Jobs passed away this month, he left one major technological goal unfilled: the quest to own the living room, and more notably, the $100 billion of advertising residing there. In reality, the range of devices he introduced to the world, coupled with the community created by social media, have forever changed the media landscape. Yet today most media dollars are still flowing to this mythic place, the living room.

Historically, more media has been consumed sitting in front of the television than any other device. Controlling this screen has been the goal of major technology, consumer electronic and telecommunications companies. When Apple announced iTV in 2006, the company joined a host of major corporations determined to conquer the 21st century living room. It took aim at Sony, Samsung, Time Warner and Comcast, and has recently warily eyeballed new entrants Hulu and Netflix. But while Apple and others continue in their attempt to stake out their turf in front of the sofa, each will soon realize that they are in fact, tilting at windmills—mostly thanks to Mr. Jobs.

With the release of the revamped Apple TV last year, Jobs again took the forefront of this illusive quest, as determined as Don Quixote, to reach the unreachable. Microsoft, longing to once again dominate a market --the way it did during the era of the personal computer-- is surely the Sancho Panza of this journey, a sidekick during Apple's domineering journey.

Years before Jobs entered the consumer electronics space, Microsoft sought to have its operating system dominate the television set of the "future." Microsoft first entered the living room with Ultimate TV way back in 2000 – a year before Apple's first iPod was announced. Ultimate TV offered consumers a DVR and supporting online services, including 14 days of programming and the ability to record 35 hours of programming. Microsoft's reach was then thwarted when Echostar acquired DIRECTV, and Ultimate TV lost its distribution. As a result of the Echostar development, cable and satellite providers wrote big checks to Hollywood and pushed back hard for control, but Microsoft remained undaunted.

As yet another way to plant a flag in the living room, Microsoft then entered the gaming system market with Xbox. Its strategy was simple: the best gaming system, Xbox, would be hooked up to the best television, Ultimate TV, within the home. This approach proved to be very effective and with the introduction of Xbox Live in 2002, and consumers could now download games, pay for subscriptions and purchase music and movies. With 23 million users, clearly owning the living room was within reach for Microsoft.

But something unexpected happened while the tech titans valiantly fought for control of the couch.

Like the ferocious giants of La Mancha, today's "living room" became nothing more than an illusion. "Everything is artifice or illusion," Quixote exclaimed, and no exception is made for the the 21st century living room. Families are no longer gathered around one, singular TV, sharing in a passive experience. Video is now consumed all the time—and everywhere. iPads in bed, iPhones on the go and DVRs delivering programming to sets throughout the household are more the norm than Homer, Marge, Bart, Lisa and Maggie gathered together on the couch. With 64% of Generation Y consuming content on multiple screens at the same time, where one consumes media has been replaced with how one consumes media.

Proof of this changing landscape can be found in who is cord-cutting, who is time-shifting, and who is demanding unbundled programming. Social media has also further impacted the shifting dynamics of content consumption, allowing friends to share the viewing experience with each other and their broader communities. Television programming is the number one topic on Twitter, and dozens of start-ups in the social space are linking second screen experiences. People no longer need to sit on the same couch to enjoy a show together. Moreover, the social aspects pioneered by music services such will soon expand to video and further enable advertisers to engage directly with viewers sharing video content. The majority of marketers, though, continue to cling to the living room to reach consumers despite innovation across every possible screen in the home.

So while broadcasters and cable networks cite increased demand at this year's Upfronts as proof that nothing has changed in the living room, I believe Steve Jobs recognized Quixote's wisdom that "facts are the enemy of truth." Jobs forged forward, pushed the front lines and created experiences for both consumers and advertisers that have forever changed the landscape of the battlefield. "Every man is the son of his own works" wrote Cervantes; as fitting a description of Steve Jobs quest as that of any knight.

What’s Your Zero-Waste Ad Strategy in a Down Market?

The contracting global economy is wreaking havoc with business-as-usual ideas about advertising. Brands are slashing 2012 budgets and as far as I’m concerned, this is a good thing: with another recession brewing, the ad business needs a good, strong cup of coffee. We now have the wake-up call we’ve needed: the industry must let go of the cost-per-impression model. The money that’s left in those slashed ad budgets needs to get spent on advertising with real and accountable results. When markets go south, the CFO is the mouth that is heard.  And CFOs want to see efficient ROI—in other words, more results with less spend.

Efficiency, however, is not what brands and companies are getting in a cost-per-impression environment. Impressions are not accountability, nor do provide measurements of gains in sales, market share or profits.

Marketers have the ability to reach audiences the size of the Super Bowl everyday online – yet impressions, which are nothing more than the measure of the opportunity to click on an ad, still prevail. Banner blindness is an accepted truth in online advertising: even on the off-chance that a banner ad is noticed, it’s probably because it’s distracting and annoying enough to momentarily divert attention. People go online for a reason, and ads that intrude on their primary pursuit –reading an article, playing a game or checking their social news feed – are hardly going to compel them to stop what they’re doing and enjoyably pay attention.

The answer for marketers is investment in “zero-waste advertising” – that is, solutions that deliver a consumer's active attention and eliminate paying for wasted, ethereal impressions.

With zero-waste advertising, advertisers only pay when someone has willingly initiated a brand experience—also known across the industry as cost-per-engagement. To implement zero-waste advertising, measure and exchange value on a 1:1 ratio to assure that the brand, the consumer and the publisher are all accounted for in the advertising experience. Demand a measured return based on real engagement with real people. Engage the exact audience you want to reach, based on the criteria your brand needs to succeed.

Marketers should take a cue from leading brands that are finding new ways to power cost-effective digital campaigns in social environments—especially those who are contributing to the expected 14% rise in digital spending for 2012 (despite a decrease of 3-6% in overall ad spend).

For example, the measurable success that Bing, Best Buy and Intuit have achieved with zero-waste, value exchange-based advertising across social media has allowed them to pioneer new ways to interact with consumers, and in turn, expand their marketing budgets. Social media’s greatest appeal is its ability to convert customers into advocates and generate millions of dollars in earned media. This is a zero-waste approach – with a multiplier that even television can’t deliver.

The feature film industry has also embraced these ideas for non-traditional yet highly efficient marketing – a smart move, since the industry needs to pay for skyrocketing production budgets.

According to a recent KN Dimestore study that included one of the major studios, 32% of people who completed a value-exchange engagement with social media gaming giant Zynga went on to buy movie tickets – and in most cases, more than one. That translates to a 64% conversion from engagemement with the movie trailer to ticket purchase. Zero-waste, case in point.

While Wall Street’s roller coaster ride is shaking C-level thinking, brand evangelists need to seize the moment, rise out of the digital budget ghetto and prove that the era of zero-waste marketing has arrived. In advertising, playing it safe during a weak economy can be the most dangerous thing to do.