The promise of internet advertising was that it could provide much more targeted audiences with far better, precision results.
It turns out the truth is different, with Bloomberg citing Heineken US who did a detailed analysis of their advertising returns to find, as the company’s Brand Director Ron Amram says, “giving money to the mob.”
While that news is bad, although not altogether surprising, for the digital media industry there’s even an even worse revelation from Heineken.
Digital’s return on investment was around 2 to 1, a $2 increase in revenue for every $1 of ad spending, compared with at least 6 to 1 for TV. The most startling finding: Only 20 percent of the campaign’s “ad impressions”—ads that appear on a computer or smartphone screen—were even seen by actual people.
That major brands are television is three times more effective than digital puts online advertisers in a bad position, although social media gurus have long argued companies can’t measure return on investment from their efforts.
Ultimately though the Bloomberg story shows we need a new model, applying broadcast advertising conventions to online services isn’t working. We’re still waiting for a new David Sarnoff to come along.
So after five years about posting about food, travel, tech, fashion or reverse cycle widgets you’ve being listed by Forbes Magazine as one of the most influential voices in the field.
Now every morning in your inbox is another pitch from an agency offering you freebies and access in return for posting about their clients products, some are great while others are strange.
Welcome to the world of Influencer Programs, a strange hybrid bought about by rise of social media and the collapse of printed news. As overwhelmed salaried journalists at established media outlets have less time to deal with hundreds of PR people desperately trying to get their attention, those with decent social media followings start to look attractive.
The influencer theory
A key part of the PRs strategy in engaging with social media outlets are the influencer programs, where the agencies trawl Instagram, Facebook, Twitter and the other services to find those with large followings and then try to induce them into promoting their clients’ products.
These influencer programs are not anything new, while today we associate them with Kim Kardashian and Will.I.Am, in the 18th Century Josiah Wedgwood publicised his sales to the royal courts of Europe to generate sales for his earthenware and a hundred years later Mark Twain endorsed cigars in journals across America.
So congratulations on being the modern Mark Twain, now you have to decide if you want to play with Fat Fee Media and be part of their influencer programs.
The land of the free
Most of the time the initial approach from the nice folks at Fat Fee will try to get you to work for free in exchange for a shiny laptop, a free feed or even an overseas trip to The World Reverse Cycle Widgets conference.
That might work for you, if you have a full time job and the food blog or fashion Instagram feed is a hobby then this exactly what the influencer programs were originally designed around although there might be some quirks there
Should the blog be a business, or you take the distinctly unfashionable attitude that your time as a creative content creator is actually worth something that Fat Fee Media should pay for, then things get messy.
People die of exposure
The first response for payment from the nice folk at Fat Fee Media is that working with their client will be wonderful exposure for you.
In some respects this is probably true, however the reason Fat Fee Media has come to you is because their clients need exposure more than you do. Just the fact you’ve been listed as an ‘influencer’ shows you have credibility on the interwebs.
One of the traps many of us with consulting businesses on the side is the belief that doing a favour for BigCorp will open future paid opportunities. Sadly, the truth is somewhat different.
Pay the writer
“It’s the amateurs who make it tough for the professionals” says Harlen Ellison in his wonderful Pay The Writer rant. “By what logic do you call me and ask me to work for nothing.”
Ellison’s point is well made and those working for free are marked down as amateurs by the large agencies. Be under no illusion, when the paid consulting, speaking or writing gigs become available, the folks giving away stuff for free on the influencer programs won’t be getting them.
While Samsung’s behaviour was extreme, it’s by no means unusual. It’s common in these programs’ agreements to have ‘exclusivity’ or ‘no disparagement’ clauses.
The exclusivity clauses are particularly pernicious because they limit the scope of your writing and could even lock you out of future paid work in the industry you cover.
Controlling the copy
Another weird, but common, part of the PR control freakery in influencer programs is the determination to vet everything so only Nice Things are said about their clients.
This never ends well as the agency and its client spend the next six weeks rewriting your work. Inevitably the results look like something published in the Ministry of Public Works house newsletter.
Even if your blog or Instagram feed is just a hobby resist any request from agencies to pre-vet your copy. If they insist, send them your advertising rate card and tell them to hire a copywriter.
You can’t say bad things
The ‘non-disparagement’ clauses are equally pernicious. One of the curiosities of the social media world is that corporates are horribly risk averse.
As a consequence they don’t want the possibility of bloggers or the Twitterati saying nasty things about them and the non-disparagement clause becomes part of almost any agreement.
These clauses are usually far ranging, not only do they stipulate a blogger can’t say something less than glowing in a post but they also restrict any social media commentary on that business.
A recent agreement I was presented on behalf of one of the world’s biggest banks required me to say I wouldn’t say anything nasty about them. This is a curious way of shutting people up but one can’t blame them if it can be done cheaply for the cost of a meal or conference invite.
Happy shiny people
Ultimately the social media and digital media worlds are about happy and shiny. Given they are largely controlled by large corporations, this isn’t surprising and much of the attitude that you shouldn’t say bad things online comes down to how food, fashion and travel bloggers have regurgitated nice things rather than been genuine critics.
To be fair to the new breed of online writers, the dumbing down of travel and food writing was well underway in the mainstream media before the arrival of the internet. One could argue that mastheads devaluing their brand with puff pieces was one of the reasons alternative online media, particularly in food blogging, became so successful so fast.
A broken model
In truth, the whole social media engagement industry is broken, it depends on poor measurements and old school marketers applying 1960s Mad Men broadcasting methods to an industry that’s diffuse and diverse.
Hawk is particularly scathing about Google’s prospects of being trusted again by developers and the marketplace. “By quitting early, Google lost what little goodwill they might have to seed something in the future,” he says. “Who will ever take Google serious with social again?”
Google Plus’ decline though signals something far more serious for the company however – it may well have missed some of the most serious shifts in its marketplace.
The SoLoMo opportunity
Four years ago when the service was launched with great fanfare SoLoMo was one of the key buzzwords and it was understandable for Google to want a slice of it. Unfortunately the company found that even an business as big as Google can’t force change by management diktat.
SoLoMo – Social, Local and Mobile – were seen as the big market growth areas and Google’s footprint in all of those spaces was poor. Although Google Places was leading the local search market at the time.
Google+ was intended to solve at least the social problem with the added advantage of overlaying personal information onto the already comprehensive ‘knowledge graph’ it’s gathered on users.
Four years later it’s clear Google Plus is a failure and much of that is due to the project being driven from the top down. From its launch the project was about meeting management imperatives and it’s notable in the company’s announcements about the service how little mention users get.
Google’s price of failure
The problem now for Google is they have wasted four years on the failed product at a time when Facebook have become the dominant social media platform and have successfully adapted the service to the mobile world.
Even in Local search, Facebook are making strong inroads into local business advertising, an area Google had the advantage by tying together maps and local search but lost because of inaction and bureaucracy.
A costly distraction
The Google+ distraction means the company has missed the entire SoLoMo opportunity and squandered the one area where they had a massive head start.
Google now face a future where their key advantage is stranded on the desktop without serious integration into social media. At the same time their ambitions to run a payments service seems stalled as well.
Whether Google+ turns out to be as strategic a mistake for the search engine giant as Windows Vista was for Microsoft remains to be seen but the similarity between the two companies stuck with declining desktop based business models in a world of mobile consumers is striking.
At the time of its IPO in February 2012, Facebook claimed to have 845 million active monthly users. Eighteen months later at the time of their stock market float, Twitter boasted a more modest 232 million.
This week Facebook reported 1.19 billion monthly active users while Twitter still languishes at 300 million, a number that disappointed the market and saw the smaller company’s shares drop 11% after their quarterly earnings announcement.
Even more worrying for Twitter, and competing networks like Google, is Facebook’s success in mobile services with 874 million people accessing the service through their smartphones every day last quarter.
So successful is Facebook in engaging roaming users that some pundits are predicting the company’s Instagram product may well overtake both Twitter and Google in mobile advertising revenues over the next few years.
More concerning for Twitter is the company is still not profitable – of the business’ $957 million gross profit, an astonishing $854 million was eaten up in administration and sales costs which indicates their overheads are in need of some dramatic pruning.
What is clear that Facebook and Twitter have very different user behaviour and, as a consequence, the revenue models are not the same. Twitter is never going to be Facebook.
So the question for Twitter is what does it want to be? Certainly the current quest to drive up revenues seems doomed. Perhaps it’s time to accept the company is a smaller operation and start to plan accordingly.
New York Times writer Nick Bilton delves into Twitter’s search for a new CEO and comes up with a left of field conclusion – the company doesn’t actually know what it is.
Twitter has certainly been casting around to define itself, particularly after its stock market listing that saw it valued at over twenty billion dollars.
Bilton flags one reason why management is so uncertain about their company’s identity, that it’s directors don’t use the service themselves.
As I see it, the problems at Twitter come down to a lack of leadership and a micromanaging board.
And the churn is constant: many of its founders, chief executives, numerous product directors and other top brass have been fired or pushed out. Three of the eight positions on the current board belong to Mr. Dorsey and the former chief executives. About half of the board barely tweets.
The lack of social media credibility on the board raises another issue about how much direct industry expertise should a company’s directors have. While it’s almost certainly not desirable to have insiders dominate a board certainly some, if not the majority, of directors should have some experience in the industries the company operates in.
For Twitter though they desperately need to define the business and what its valuation really is. Even more pressing is to show how the platform differs from Facebook as the confusion of investors, users and advertisers isn’t helping.
Ultimately as Bilton suggests the direction of a business is determined by the board, it’s time Twitter found at least a few directors who at least use social media, if not have some understanding and experience in the business.
Five years ago I did a presentation describing how a website was essential for every business’ online strategy.
The Business Cornerstone was delivered at the time where many advisers proclaiming Google Places and Facebook as adequate for building an internet presence.
Over time, the importance of having your own domain and website has been proved as different platforms have messed users around with changing terms, arbitrary rulings and often simply closing down services.
For those who’ve published pieces on Medium that the service is not a publishing platform would have come as a surprise given the company has spent the last 18 months encouraging people to contribute to their site.
That Medium is pivoting into something else – a Facebook, an Instagram or a Google Plus – shouldn’t be surprising but once again it illustrates the interests of this services are not necessarily the same as yours and when they conflict it’s your interests that will come off second best.
While platforms like Medium, Facebook and LinkedIn are useful for distributing your message, the best long term online presence you can have is your own website. It’s a lesson those who rely on free third party services keep having to learn.
Paul Wallbank regularly joins Tony Delroy on ABC Nightlife on to discuss how technology affects your business and life.
Along with covering the tech topics of the day listeners are welcome to call, text or message in with their thoughts and questions about technology, change and what it means to their families, work and communities.
If you missed the May program, it’s now available on our Soundcloud account.