The interactive dimension of the Web continues to deepen and broaden.  Social media, professional communities, user-generated content, games, widgets, video — all attest to richer levels of audience engagement. How do publishers make the most of this heightened interactivity? 

Some publishers are already telling some rather sophisticated engagement stories and realizing great returns on their investment in audience insight. But first let’s take a step back and recognize the imperative to understand audience engagement and frame it in a way that resonates with marketers.

 

Engagement Is A Story, Not A Metric

 

We still need to be clear by what we mean by engagement. Previously, I alluded to the excellent distinctions offered by Gary Angel and Eric Peterson among three types of engagement: visitor, audience and brand. Essentially, visitor engagement has to do with understanding what users are doing on your site; audience, how you can use that intelligence to enable advertisers to succeed; and brand, how customers develop a relationship with a specific brand.  So when we hear someone speak of engagement, it is very useful to know which mode they are in.  For our purposes, we are speaking of audience engagement, which has obvious reference points with visitor (analytics) and brand (conversion and ROI metrics) engagement.

 

Audience engagement is a story, not a metric. We cannot look at a single metric or even a set of metrics and help advertisers know how to best advertise on our sites.  Metrics play an undeniably central role in getting your site on a media plan. Advertisers look for reach and composition at various metrics that you supply in a spreadsheet. Once you are on the plan, though, it is your understanding of your audience that can really enable an advertiser to get the greatest return on investment, and for you to realize highly profitable revenues.

 

But don’t get me wrong; metrics are indispensable to the story. The key: metrics can help you understand your own site engagement story. So let me return to the Peterson Model. Eric Peterson has understood that engagement is not a simple metric, such as duration or page views. What can such a metric tell you about what your audience is doing on your site and why your site is valuable to them? And by extension, what can you tell advertisers about how they can succeed, based on the fact that your average user spends four or 40 minutes on your site? Instead, the Peterson Model looks at indices, which give the metrics context.

 

For example, you can look at a community site and score interactivity, instead of page views.  Doesn’t a widget on Facebook that becomes highly viral lend itself to an engagement story that clicks and page views don’t capture? Instead the Peterson Model may bring the following indices into the story:

 

·        Downloads: how many people downloaded a widget, called, for example, the “Parking Wars Game”?

·        Interactivity: how many times the audience accessed the widget?

·        Duration: time spent on the game, in comparison with other widgets, perhaps?

·        Feedback: How many comments were posted?

 

These kinds of metrics can then become the plot lines of a compelling engagement story. But what would that story look like?

 

Here, you would need the widget metrics. But you would also need some intelligence. You need to understand your audience well enough to move from metrics to indices to a story that connects with another type of engagement — the one that matters the most to marketers: the brand engagement story. Some key points to keep in mind:

 

1.      What is the epiphany of your story?

 

Your audience engagement story needs to accomplish one thing: It needs to result in a big “Aha!” that shows your marketing or agency partner how to succeed with your audience.  Essentially, it has to culminate in actionable insights for your advertisers. Examples of these can include:

·        A clearer idea of the competitive landscape

·        The awareness, interest, and consideration levels for your clients’ products

·        The kinds of activities on your site that map to the sales and marketing funnel (Awareness, Interest, Consideration, Purchase decision)

·        The types of interactive ad units that succeed at key user moments

·        Where and when it is most effective to offer sponsored tools, widgets, downloadable documentation

 

2.      What is the Plot?

 

A compelling story is more than just a record of events. The plot enables the author to shape a story to emphasize what is significant and connected to the main point or climax of the tale. In the same way, metrics alone can never tell your engagement story. Intelligence and understanding need to guide the framework of those metrics.  A metric might tell the Democratic National Committee that the number of visitors to the election pages of CNN during the Republican Convention was slightly lower than during the Democratic Convention. A compelling story might be that the audience for the Republicans doubled among independent women voters and that a high percentage of them appeared via a search for “Sarah Palin.”

 

3.      Bring your Characters to life

 

Who is your audience? How can you bring some dimension to what makes them tick, what they care about, and why they are important?  I would advise taking a couple of related approaches to gathering these essential insights:

·        Visit Quantcast and look at the kinds of information that “Quantified” sites can offer about who visits their sites. In my consulting work with the company, I know that Web publishers are enabling advertisers to understand better the demographics, business and lifestyle profiles of their audiences. See the wealth of audience info under Bloomberg’s Quantified Profile, for example.

·        Take Avinash Kaushik’s simple advice and ask your visitors in an unobtrusive pop up survey some basic questions about what they are doing on your site and how your site is helping them accomplish their goals.

·        Talk to them. There are many great ways to identify representative visitors who can offer you a gold mine of intelligence about your site, your clients’ brands, and the best ways for your advertiser to win their minds and hearts.

 

Which companies that are telling “Audience Engagement” stories that connect the dots between the “Visitor Engagement” on their own site and the “Brand Engagement” goals of the advertiser on their own site? I’d love to hear from you on that. Meanwhile, I do have a stellar case study to share — next time on MediaPost.  Till then, stay engaged.

While the online advertising industry struggles, one sector is purposely restraining its growth.

Online video advertising could be a $20 billion juggernaut virtually overnight. The television networks just need to be willing to eat their own young.

And it has nothing to do with ad formats.

Our industry has this perverse need to “innovate” even when the best solution already exists. We have all suffered through countless arguments about pre-rolls versus post-rolls, the correct length of ads, and how to integrate interactivity into ads.

These arguments overlook the simplest fact of video advertising: the current format works. 15-, 30-, and 60-second interruptive commercials are just fine. Hulu proved this when it sold out six months of interruptive commercials in advance. Advertisers are comfortable buying this format, and users are willing to watch them. In fact, this ad model works even better online, because viewers can’t fast-forward their TiVo or flip the channel. While format innovation might yield some incremental gain, it won’t move the needle in the grand scheme of things.

TV is the most engaging and memorable advertising format available. Quant geeks waste breath arguing about the lack of measurement in offline ads, while ignoring the human aspect of advertising. Great brands tell a story, and that story is much easier to tell with TV ads than banner ads.

Two Markets Disguised as One
The real reason these format arguments happen is that all online video is mistakenly lumped into a single industry, when in fact it is two industries, driven by very different dynamics.

Short-form, mostly amateur video is one market, and long-form professional content is the other. And the lion’s share of revenue will come from long-form.

Google’s YouTube, the 800-pound gorilla in short-form, may be gobbling up all the impressions, but it’s barely making a whisper in the revenue department. Its struggle highlights two fundamental problems with short-form video:

First, the tolerance for interruptive ads on short-form is much lower. Being forced to see a 30-second ad to watch a two-minute video is too high a price to pay for your time.

Second, analysts estimate that only 3% of YouTube’s views can be monetized due to copyright concerns, whereas professional content sites like Hulu can monetize 100% of their views.

While short-form struggles, long-form video sites have artificially constrained their growth in two key ways:

The Fear of Real-Time Broadcast
Current audience measurement tools foolishly split online video into a separate category. Television stations are not going to risk simulcasting new shows online and offline if it will damage their Nielsen ratings.

As a result, video sites add an artificial delay, making them a destination for outdated content. You cannot arrange to meet friends to watch the latest “90210″ episode if you don’t know when the CW is going to get around to adding it online. For regular shows, this is a problem; for sports, it is a non-starter.

Until rating systems properly recognize online viewing, online video will not become a real-time broadcast medium and usage patterns will suffer.

The Library Effect
Today, Hulu is a great place to see that show you missed last week, but offers little more.

If Hulu were to offer every episode ever made, instead of the five most recent episodes, the usage patterns would change instantly. This may seem obvious, but the effect is not.

There are millions of fans that religiously watch, TiVo, and buy the DVD sets for their favorite shows. If Hulu became a reliable source for the entire collection of episodes, the market for television shows on DVD would tank.

While a Historical Video Library is hugely appealing to users, creating one would require content creators to intentionally cannibalize their DVD sales. Until DVD sales fall off a cliff naturally, or an illegal alternative emerges that accelerates the process, the Historical Video Library will be just a pipe dream.

These two self-imposed constraints leave the online video market sitting in the no-man’s land of random entertainment: too old to be a broadcast medium, and too incomplete to be a Historical Library.

If only the rest of the online advertising industry had such high-class problems.

On a recent flight from Phoenix to attend Ad:Tech Chicago, I was sitting near a young boy and his father. As we accelerated down the runway, the boy beamed with anticipation for the moment we would leave the ground. As we lifted off and began our rapid ascent, he gazed out the window and proclaimed to his father, “Look dad, the earth is tilting.” From his perspective, it seemed perfectly logical to conclude that the earth must be tilting since he was still sitting in his seat and the horizon was no longer flat. While my perspective in that airplane led me to a different assessment of our situation, I understood the alternate view from the four-year-old boy sitting across the aisle from me.

Individual perspective can cause two people who observe the exact same thing to interpret it differently. Such was the case in a recent Online Publishing Insider column I wrote about Facebook. In that column I referred to Facebook as a publisher. From my perspective, working for an ad network, there are two very broad categories for companies that conduct business on the Internet: advertisers and publishers. From that vantage point, Facebook falls into the publisher bucket. That perspective, however, was not shared by one of the column’s readers. In his comment posted to the Online Publishing Insider blog, he wrote, “They [Facebook] are a content aggregator or a repository of their user’s content,” inferring that they were not a publisher. I apparently lost all credibility in his eyes when referring to Facebook as a publisher since the company clearly doesn’t publish any of its own content.

Unsure of the validity of my perspective, I went to Ad:Tech seeking out some additional opinions. In one of the sessions I attended, Liz Ross, CEO and Global Chief Marketing Officer at Tribal DDB, made a comment that caught my attention. She said that one of her agency’s clients, Pepsi, produces so much online content that it would consider itself an online publisher. While that may be a stretch, even for me, it was clear that the traditional definition of an online publisher might need to be expanded.

While at the conference I also had the opportunity to speak with Shiv Singh, vice president of social media & global strategic initiatives for Avenue A | Razorfish. I asked him for his definition of a publisher, and his response was sufficiently broad as well. Singh said that a publisher is, “Anyone who has an audience and accepts advertising.” He added that he believes that more traditional publishers are going to start looking like the Facebooks and MySpaces of the online world as they integrate social network features that will create blurring from both directions (social networks and traditional publishers).

If you agree with his definition, then an individual blogger could potentially be a publisher as well. With advertising widgets like lemonade and blog-centric ad networks, bloggers that can attract an audience can also monetize their content.

Is the earth tilting or is the plane ascending? Is a publisher defined as a media site that produces and publishes its own content, or could a publisher be just an individual blogger? It all depends on your perspective. What’s yours?

It's happening in front of our eyes.  Paid ad placements, inside the garden walls protecting traditional media values, are poisoning the grounds where Henry Luce and our publishing forefathers first drew "the line" separating church from state.  Today's media-buying demand for a "big idea" required to earn a media commitment, combined with a softer and more competitive environment, all driven by a sales force that has no idea who Henry Luce is, have publishers doing things not done before. 

The New York Times magazine recently selling its cover to an advertiser is a symbolic symptom of this self-inflicted disease.  The shock wasn't the cover being sold, but rather, that a traditional magazine publisher veered onto tracks laid by dot-com publishers over this past decade.

Print publishers are guided by ASME guidelines designed to protect the integrity of their product and the interest of their readers so there is zero confusion between what is edit and what is advertising.  Dot-com publishers are guided by their creative abilities to cross this line.

Case in point: UGO.com.  This entertainment network of sites bought by Hearst a year ago is notoriously creative at blurring the line.  In one example, they sold an ad campaign to the breakfast chain Denny's.  A co-branded Leaderboard ran on the site with a visual of a grand slam breakfast covered with copy that reads "Movies: Part of a Balanced Breakfast."  When you click on the ad, you land inside the site's editorial channel dedicated to "Film & TV" and a custom section reviewing the top movie breakfast scenes.  There is no mention this section was driven by advertising.  Check please line crossed.

Case in point; Yahoo.com.  This portal knows no boundaries when it comes to promoting the interests of an advertiser at the expense of editorial integrity.  The examples are many and the most blatant one I encountered came back when the movie "Me, You and Dupree" first opened.  Highlighted on the home page that opening Friday was a "feature story" with a picture of Owen Wilson and a headline that read "How to Evict a Freeloader" followed by a subheadline that read, "A married couple is besieged by a real life Dupree." What are the chances of this news story breaking the same day a movie about a freeloader who won't leave opened?  Pass the popcorn, hold the credibility, line abolished.

Case in point: Newsweek.com.  This example can make the case maybe it's OK to blur the lines if the interests of the advertiser and the reader are met simultaneously.  For the last nine months or so, a Rolex watch face has been affixed to the home page of this newsweekly's web site.  The watch not only tells the user what time it is, but what if they wish to know what time it is in Denver or Dubai, they can click on an arrow and the watch face changes to the exact time in those time zones. 

When I worked at Newsweek, there was no Newsweek.com and the editor was Maynard Parker — a world-class person who wore traditional media values the way older men proudly wear after-shave cologne.  If Maynard were alive today, I wonder what he would do if a salesperson sold Rolex a fixed position on the cover of his magazine.

My own firsthand experience crossing the line was at IGN.com.  We cut a multi-year, multi-million-dollar deal with a single retailer, to be featured on every page view the site generated, to give our readers the chance to order games online.  It didn't matter that this retailer was notorious for being the last to stock the most popular games or did not offer the lowest prices.  They wrote a check and we wrote off providing choices on where to buy games when on our site.  Game over. (Note:  IGN now provides a price comparison engine).

Online is famous for its ability to track and report the actions of its users, but what we can't track is the erosion of our credibilility.  This happens over time and inside the collective minds of those we are meant to serve.  Isn't it time buyers stop pretending requests for this kind of "creative" integration serve everyone's interests?  Isn't it time we institute and uphold firm ASME guidelines for online publishers, and publicly punish those sites that ignore them?  Isn't it time we take a look at what we are ignoring before we have nothing left to look at?

When I was leading a media sales team a few years back, I had a conversation with a senior ad exec at Microsoft who had a reputation for being “all about the numbers.” We were talking about what separated the very best publishers from all the rest, and he said that in the end it’s all about the results — and how well you deliver what you say you are going to deliver. But, he added, you can never underestimate the influence of salespeople who really act as partners and show that they care at least as much about the customer as they do for the company they represent.

The wisdom of that remark is one that my experience tells me everyone believes but few live by.  It is the exceptional salespeople, I find, who know what problems their customers are trying to fix and what is personally important to an individual client. When salespeople really know and deliver to the objective results and subjective needs of a customer, magnificent things always happen.

The  “Advertiser Intelligence Report,” Advertiser Perceptions’ semiannual survey of nearly two thousand marketers and ad agency decision-makers, makes this point emphatically. (Disclosure: I am currently doing consulting work for Advertiser Perceptions).  In the most recent report, “Results” are the most important criteria in the selection of online media brands. This is followed by audience “Reach,” “Composition” and “Engagement.”  “Results” includes a wide array of metrics, but here are the criteria that top the list:

1.    Number of impressions (54% rated it as extremely important)
2.    Conversion rates (54%)
3.    ROI (53%)
4.    Number of visitors (50%)
5.    Number of page views (48%)

Well worth noting: Only a quarter of the respondents, viewed “impact on sales,” “time spent on the website” and “click through rates” as being “very important.”   Knowing, for example, that the typical ad decision-maker values page views as far more important than duration on a site, might reshape a discussion of audience engagement. Understanding that ROI is “very important” to more than double the decision-makers than sales impact, should lead to a conversation that clearly identifies what ROI means. And while we know that click-through rates are not mission-critical these days to most advertisers, on the other hand, this metric is important to a quarter of them. Know thy buyer!

With the emphasis on these numbers, what is the role of the salesperson representing a site? Is it possible that online marketers just need a spreadsheet or an online calculator in order to make their decisions?

Hardly. Year in and year out, the Advertiser Intelligence Report shows the pivotal role of the sales team in providing advanced skills to advertising decision-influencers.  Of the 30 or so criteria in their evaluation of salespeople, note that media decision-makers are primarily looking for salespeople who know and understand the advertiser first and then work as collaborators in delivering solutions to their problems:

1.    Understands advertiser needs and priorities
2.    Knows the media brands they represent
3.    Knows the advertiser brand and products
4.    Responsiveness
5.    Respects our time
6.    Problem solver

Advertising decision-makers who give high grades to an online sales team also expect to do business with the online brand in the months ahead. Objective results and sales expertise therefore are closely connected to advertising decisions.

So the moral is that, to win the minds of top advertising decision-makers, online publishers absolutely need to provide the objective results. But equally important, salespeople must build collaborative relationships that demonstrate extraordinary understanding and problem-solving skills.  When a sales team can do this consistently, they will win the hearts of the customer as well as their minds.

The online advertising industry is ground zero for industry analysts who make ridiculous predictions to attract attention.

Worse, it is a vicious cycle.

The bigger the prediction, the more likely it is to be quoted by venture capitalists, reporters, industry pundits, and CEOs of start-ups looking to raise funding. The more you get quoted, the more reports you sell. So analysts are incentivized to produce ambitious, if fictitious, numbers.

Invariably, financial bubbles get created because people ignore fundamentals and start using questionable math to justify their own logic.

The rest of us sit below the ether trying to make sense of it all, while being told “we don’t get it.”

Maybe.

Or maybe every time a new business model gets created in the media industry, people make up a whole set of useless new metrics to measure it that never seem to track back to revenue. Or profit. Or common sense.

The mobile advertising market is the most absurd of them all. Forrester Research predicted the mobile advertising market will be less than $1 billion in 2012.

Then things got crazy.

 In September 2007, the Kelsey Group estimated that U.S. mobile advertising would grow from $33.2 million to $1.4 billion in 2012. Then Strategy Analytics predicted the global market would grow to $14.4 billion in 2011. Not to be outdone, eMarketer estimated that the US market will be $6.5 billion by 2012, and $19 billion globally. Finally, ABI Research threw down the trump card and declared that mobile advertising would be a $19 billion global business a full year earlier, in 2011.

What a difference a year makes. Those same firms are now revising their online advertising forecasts down. Predicting huge growth, and then announcing a market change and revising the estimates down is a waste of time. It would be much faster to just predict more realistic growth in the first place. Except then you might not be able to sell a second report.

If the paid professionals have a 700% spread on forecasts only three years away, what hope do the rest of us have to accurately forecast a market?

The key to rising above the noise is to ignore often-touted, but meaningless statistics. Here are three rules for assessing a market:

1.    Value is NOT a function of cost. The fact that social networking inventory, for example, is cheaper than other advertising options does not inherently make it a good value. Value is measured as cost versus return. Perhaps it is cheaper because it does not perform as well. Many articles have been written about advertisers getting negative ROI from social networking despite $0.15 CPMs.

Social networking can be a great value, or an awful value, but cost has nothing to do with it. When you measure value, you need to demand a quantifiable ROI measurement.

Ultimately, a marketing channel will be measured by the ROI it can deliver. Advertisers will measure the profit they can generate, versus the money spent, and the amount of risk taken.

2.    The success of an industry is not measured in venture capital. Slide may have raised money at a high valuation, but so did Kozmo.com, PointCast, Flooz, Boo.com and countless others. Like any other industry, not all investors are smart, and even the smart ones make stupid decisions every once in a while.

A flood of venture capital into an industry should be a warning flag, not a sign of prosperity. Hot markets get over-funded, leaving a sea of second-tier companies floating around aimlessly. Online video and social networking generated huge returns for a few winners, but left an army of also-rans behind to die.

A venture capital investment should be taken for what it is: one person’s opinion. An opinion that statistically is wrong 70-90% of the time.

3.    Understand the “how.” All too often, these forecasts are made without understanding how the market is going to achieve the outsized growth. In the case of mobile advertising, analysts have layered assumption on top of assumption to get to their number. In doing so, they ignore one of the most basic rules of scientific experimentation: You can change only one variable at a time.

To arrive at a forecast, analysts must estimate the rate of mobile Internet adoption, consumers’ willingness to tolerate advertising on the phone, advertisers’ willingness to shift large percentages of their spend to an unproven channel, and publishers’ ability to develop new advertising formats that will effectively leverage the channel.

Any time you have this many variables, proceed with caution. If no one can explain the “how,” run.

Only two things about advertising forecasts make financial sense: Analysts are trying to sell research reports, and CEOs are trying to sell venture capitalists.

And neither makes a compelling argument.

The Internet Corporation for Assigned Names and Numbers (ICANN) announced June 26 that it had given preliminary approval to a recommendation to introduce a whole range of new Internet domain names, which would pave the way for a seismic increase in online real estate.

Talk about the Internet being like the Wild, Wild West. Along with the extraordinary expansion of domain name choices and opportunities would come HUGE potential for search engine marketing.

Currently, there is a limited range of 21 top-level domains (TLDs) from which to choose, such as .com, .org, .info and .uk. According to ICANN, this decision will allow applicants for new names to select the most marketable domains, making them perfect for attracting their target customers.

So businesses will now be able to apply for generic strings like .brandname or .yournamehere. ICANN even reports that there are already interested consortiums wanting to establish city-based TLDs like .nyc, .berlin and .paris.

At first glance, this seems to make perfect sense. But my hope is that it doesn’t spiral out of control, becoming a field day for cybersquatters that register, traffic in or use domain names in bad faith, intending to profit from the goodwill of someone else’s trademark.

That would create a huge nightmare for established brands like Amazon.com, which would need to procure a laundry list of domains — everything from books.amazon and music.amazon to amazon.books and amazon.music — to prevent cybersquatters from wrongfully registering and profiting from its name.

It should be noted, however, that ICANN will not be selling the new TLDs for some time. The recommendation must first receive final approval early next year, followed by a limited period in which any established entity can submit an application for evaluation.

Search Engines and the Domainrush
If and when it does happen, look for an immediate impact on search engine marketing. Search engines love keyword-enriched domain names, since finding exact keywords in domains proves to be an extremely strong indicator of a Web site’s relevance to a search query.

By combining a newly acquired generic domain name with a very good search engine optimization (SEO) strategy, a small company could find itself ranking among extremely competitive search terms and among Fortune 1000 companies. Of course, Web sites need quality inbound links to rank high on Google, but a great domain name can go a long way.

Keyword-enriched domain names and URL paths (there is a difference) are usually what it takes to achieve a top-10 organic ranking. Take, for example, AllFreshSeafood.com (ranking No. 4 on Google for “fresh seafood”); BreakingNews.com (No. 6 on Yahoo for latest breaking news”) and BagelBoss.com (No. 4 on Google for “bagels”). I’m sure you get the point.

Still, non-keyword-enriched domain names can be optimized by adding keyword-enriched page names. For example, StorageDeluxe.com sits atop Google for “Brooklyn storage” and the URL path is www.storagedeluxe.com/locations_brooklyn.asp; a Google search for “used Acura parts” returns www.uneedapart.com/used-acura-parts.php as No. 1; and a search on Yahoo for “cardio exercises” yields www.lucilleroberts.com/cardio-exercies on the first page of the search results.

Now that we’ve established that a keyword-enriched domain name can be extraordinarily valuable, just think about owing a domain like .insurance — you could have auto.insurance, life.insurance, health.insurance, business.insurance, etc. Beyond the obvious and tremendous SEO benefit, imagine what this will do to build brands.

I am curious to see if those who register new generic TLDs will use them to dominate their niche or resell domains. Only time will tell.

ICANN reports that there will be a six-figure charge for registering these new domains. That is chump change for major domains — and even those that want to be

It’s tough going right now for many publishers. You can feel the stress and anxiety levels rising when you look at revenue numbers not being met. And the numbers are everything — so what can you do to get better, faster, than your competitors?

Start with your numbers. Not your sales revenue numbers, or sales call volume, but your quotas. If the annual goal is out of realistic reach as you roll into August, you need to look at how this goal was arrived at, rather than the failures of those paid to reach it. It is easy to assign blame to the sales force when quotas are missed, but they only own 50% of the problem. You create quotas through feel and intuition — and when this number is cooked up incorrectly, it can poison your entire company.

The misconception is to set your revenue bar high enough so when it’s missed you can still meet your internal business plan. This approach is based on achieving success through failure. If the annual team quota is set with this approach in mind, but without accounting for a market downturn in spending, the gap between booked revenue and the goal becomes much larger than internally anticipated. In these cases, the material impact of extreme failure can derail an entire company — all because the goal was never achievable in the first place.

If you are asked to run a race you can’t win, at some point, maybe as early as mid-August, you stop running hard. A finish line has to be in sight in order to maintain positive sales momentum, momentum that drives the morale of your entire company. Salespeople with annual quotas out of reach at this point in the year will feel the weight of failure on their shoulders. Many will look to cover their tracks or for another job. And before you know it, the exertion of energy towards things other than growing your revenue seeps into other areas of your company. All because the finish line we all crave to cross, cannot feasibly be met.

A downward market dramatically increases competition, so you need to earn your wins left to win in 2008. To do so, you need to maximize the efforts of a sales force, and moving the finish line closer will make that happen — more so than leaving it be. It may take more work, more calculations and more internal communication, but I would suggest altering the current commission plan, and dispensing new goals that can be reached, even if only a few manage to do so.

And do so with humility. Own 50% of the issue and offer back a solution your sales team will buy into. Then watch them run harder and faster for the remainder of this challenging year. Your company will finish better and stronger than if you did nothing at all.

If you've ever had the inclination to reflect on deep philosophical questions, or possibly just suffered through intense boredom or insomnia — all very similar pursuits — you may have pondered the age-old question, "If a tree falls in the forest and no one is around to hear it, does it make a sound?" Or perhaps you prefer the more modern version of the question once posed by the late George Carlin, "If a man speaks in the forest and there is no woman there to hear it, is he still wrong?" (I assume his question was rhetorical.)

During a recent marketing luncheon I attended, I began considering the implications of this question when applied to social media. One of the panelists speaking at the luncheon was the communications manager from a large consumer brand. He talked about the increasing importance of keeping a pulse on his brand across the social media landscape, yet admitted that he had absolutely no idea how to actually track anything relating to social media.

Using this example, you could revise the "tree in the forest" question to go something like this, "If someone makes a reference to your Web site through a social media platform, and you don't know that it exists, does it still make an impact?" OK, so I'm no George Carlin, but work with me here.

If you are interested in keeping a pulse on your company's online reputation, the answer to that question is probably yes. The impact of social media content, whether it is a blog post, a bookmark on digg, a Twitter comment or an online consumer review, is clearly growing in significance for both the consumer and for those of us whose job it is to "own" our company's brand.

That still leaves the question that perplexed the communications manager on the marketing panel. Is there a method to accurately measure social media buzz?

There are some simple semi-automated solutions like setting up a Google alert or an application from Yahoo that I recently discovered called "Pipes." A Yahoo member took the time to create a "Social Media Firehose" pipe that tracks content across social media sites. I did a search on my company, AdOn Network, and came across material I'd been previously unaware of: blog posts, press releases and even a video on YouTube of an interview I did at Ad:Tech earlier this year (after watching it, I decided I really need to stick to the written word).

While solutions like these help provide a social media snapshot, there are also companies that offer ongoing social media tracking and analysis services that can delve much deeper into actually understanding and managing your company's online reputation across sites featuring user-generated content.

A few of the companies that I have come across that offer this type of in-depth analysis include:

·    Networked Insights: Features a solution called "Insight Platform" that delivers real-time customer intelligence from social media sites.

·    Prime Visibility: Its  "Prime Buzz" service calculates your social media "buzz metric" that provides a quantifiable number to gauge the positive or negative buzz about your company across social media sites (Full disclosure: Prime Visibility is owned by the same parent company as AdOn Network)

·    Techrigy: Offers a solution called "SM2," a software solution designed specifically for PR and marketing agencies to monitor and measure social media.

With the resources available to track and analyze your brand across social media sites, the real answer to the impact question posed earlier is that you don't have an excuse for not knowing what is being written about your Web site or brand anymore.

What, if any, services are you using to track the social media buzz relating to your Web site and your brand?

Yankee Stadium last week hosted the All-Star game because this year will be the last before a new ballpark replaces it. The extraordinary “Home Run Derby” event and the All-Star Game itself was an ongoing homage to great Yankee Stadium moments, along with much debate over the pros and cons of razing the “Cathedral of Baseball.” To me this raises issues analogous to Web site design, usability and advertising sales. But first let me refer to a tipping point in the relationship between usability and sales — in baseball.

The new wave of user-friendly baseball park design began with Baltimore’s Camden Yards. Ballparks began to appear that emphasize arresting vistas of magnificent cityscapes, promenade areas for stretching your legs and milling about, a wide variety of foods, and ease of access to, from and within the ballpark. Every city that has adopted this very customizable local model has made its local fans very happy — Baltimore, Cleveland, Denver, Phoenix, Houston, Seattle, and so on — and the extraordinary usability has paid off in revenues. Ticket sales, concession revenues, and branded merchandise in every one of these cities have produced a grand slam of revenue growth.

It is worth noting that the Baltimore Orioles, which began the revolution, was not the first team to be presented with a retro-modern stadium design. The Chicago White Sox rejected what was the Camden Yards blueprint. They chose instead to build a replica of Comiskey Park, which, like Yankee Stadium, was an ancient big ballpark design. While Comiskey was a venerable stadium, the new ballpark’s disappointing revenue performance proved that fans didn’t seem to feel that strongly about the brand cachet that the owners believed it carried.

Online publishers often fall into the same trap as the Chicago White Sox. Failing to pay attention to what users want to accomplish or their experience on the site, they assume that their existing design is good enough. The Baltimore Orioles, though, listened to the customer research that told the creative designers what fans hated and what they would want to see in a new ballpark. Online publishers who pay attention to their visitors’ goals, their navigation, and their visual experience are akin to the new wave of ballpark designs. And like the new parks, usability-oriented design will always pay off in revenue, as visitors will return more often, do more on the site, and encourage others to do the same.

If you know the Peterson Model of online audience engagement, the importance of usability becomes abundantly clear. Looking at click depth, loyalty, interactivity, recency, duration, and subscriptions are, as I have argued in a previous column (http://www.mediapost.com/blogs/metrics_insider/?p=32), the best way of measuring engagement on your site. Usability becomes the road to a transforming Camden Yards user experience:

• Click Depth: Do users know your wonderful content is there in the first place? Do they know how to easily find it?
• Loyalty: Does the overall experience generate a strong desire to return often?
• Interactivity: What makes your users passionate enough to generate content, post comments, forward content to friends or colleagues?

And so on.

Online usability testing involves a commitment to a path of listening to your audience. If you have never conducted usability research before, I heartily recommend starting with the wisdom of Jakob Nielsen or Steve Krug. They both agree in many areas — most importantly, on the need to do one-on-one sessions with a relatively small sample of representative users. An accomplished usability pro can often tell you all you need to know to move toward optimal design after 5-8 of these one-on-one usability sessions. I recommend too the ongoing use of online research surveys. ForeSee Results, for example, has developed a usability research product that enables publishers to set up ongoing surveys that illuminate usability roadblocks and point toward design solutions.

Wise online publishers commit a budget to ongoing usability. They know that they will see a more loyal visitor base, expanded engagement, and higher revenues. You will see a measurable difference in click depth, loyalty, interactivity, etc. These online publishers will learn about the relationship between audience research and accelerated sales. In other words, they will know the secret of Camden Yards.

Being "connected" sucks. It is highly overrated and getting old fast.

I am tired of people using their BlackBerries in meetings. I am really tired of getting useless social networking updates on people I barely know ("Bob is playing with his dog."). Most of all, I am tired of this self-righteous, misguided notion that wearing a Bluetooth hands-free dongle in your ear somehow makes you important.

I don't care about Bob, or his dog. I also don't care about the boring conversations of Bluetooth-wearing loud talkers. Collectively, we need to get rid of technology as fashion accessory and demand a little peace and quiet.

We have become an ADHD nation. The constant fragmentation of our already short attention span is a really dangerous trend. Not only does it reduce the quality of meetings and conversations, it also creates serious challenges for marketers.

In a brilliant article in Forbes titled "Can You Hear Me Now?" Sherry Turkle of MIT compellingly argued that this new era of hyper-connectedness is just a façade. While we have increasingly more means of instant communication, we are building less meaningful relationships.

We have become a nation that is a mile wide and an inch deep. We use social networking to get updates on people without having to take the time to actually talk to them. We send text messages in place of conversations. Worse, we are often already in a conversation when we send them. And don't get me started on Twitter.
If our society continues to divide its attention into ever-smaller chunks, the marketing industry is in for a rude awakening.

It is not hard to imagine that 10 years from now, all video will be delivered over the Web. Most magazines and newspapers will as well. Consumers will sit behind a fat broadband pipe getting email, instant messages, social networking updates, and text messages while simultaneously consuming Web sites or video. Good luck getting their attention.

While this trend may be impossible to reverse, the solution for marketers is to steer into the skid. Marketing that appears next to content will get ignored. Marketing is going to have to become deeply integrated into the communication platforms.

Most publishers are woefully unprepared for this change. The majority of content Web sites today lack even a basic Application Programming Interface (API) that would allow an advertiser to integrate simple widgets. It is critical that publishers expose APIs to enable advertisers to modify your user interface (within set limitations, obviously), and create widgets or full interactive applications that can run on your Web sites.

Deep integrations will enable publishers and advertisers to work more closely together than they have in the past to capture unprecedented consumer attention — and, more importantly, unprecedented revenue.

Instead of Fandango paying for TV commercials that consumers skip past with their DVR, they could integrate a widget into movie content sites that enables users to get notifications of upcoming movies, buy tickets, and invite their friends. They could be part of the conversation, not stuck in the corner drinking punch and watching everyone else dance.

Why would anyone pay to reach 100% of consumers watching a TV show, when only a small percentage is paying attention? Advertisers that use traditional advertising are increasingly throwing money away.

The attention span problem is already visible in younger generations, who were raised with broadband and multitasking as the norm. It has gotten so bad that college admissions officers are receiving admission application essays with text messaging abbreviations ('I g2g 2 Harvard, I'd do gr8!').

As I become more conscious of my own technology-driven ADHD, I have started to seek changes. Five years ago, I developed an idea I called "real time." Consciously spending a block of time just focused on the moment. Every year since, I have taken a vacation in a location that had no cell phone reception, no Internet access, and often, no running water.

In a few days I am leaving for two weeks in Kenya and Tanzania to climb the Lemosho Route up Mt. Kilimanjaro and then go on safari in the Ngorongoro Crater. I won't have a laptop, cell phone, or Internet access, but I guarantee I will have a lot of meaningful conversations.

Are you tired of always being connected? Let me know in the comments section below.

One highlight of this past holiday weekend for me, was watching a four-and-a-half-hour sporting event that took nine hours to complete. It was an epic sports experience a tennis fan could spend an entire column defending as a worthy consideration for one of the greatest sports dramas of all time.

Live drama unfolds, intoxicating those who tune in to watch. There is never a guarantee the intensity level will smash through the roof, so when that happens, the buzz can be heard for days afterwards. And that’s what the sports fan is addicted to — the buzz of seeing and feeling the drama as it unfolds live, versus hearing about it afterwards.

Nothing can kill this drama quicker than knowing the outcome ahead of time — and NBC got away with murder last week, with ESPN an accomplice. In doing so, both networks left fingerprints indicating they fail to understand — or worse, choose to ignore — how the consumption habits of their viewers have changed.

The Wimbledon Men’s Semifinals were being televised on both networks last Friday. ESPN started its coverage in the morning with Nadal versus Schuettler. NBC followed with a noon (EST) broadcast of the Federer-Safin match-up.

As the Nadal match reached midway through the third set, I received a text from my nephew that Federer was up 3-0. How is this possible, I wondered. They would never start the match before the Nadal match finished. I quickly switched over to NBC — and sure enough, Federer was off to a quick lead, and the grey skies Nadal had been playing under were now bright blue. As my feeling of being duped began to sink in, Ted Robinson of NBC reminded viewers to log on to www.wimbledon.org for live scores highlights and analysis.

I (like other tennis fans) tuned in believing these semifinal matches were live — and NBC actually reminded us to log on to find out both had already ended! I would love to know how many people changed the channel once they followed Ted Robinson’s directions. I would also love to know why NBC (& ESPN) still think tape-delayed coverage, in today’s media world dominated by instant access and digital video recorders, is the right approach.

The answer, of course, will be “eyeballs.” By showing it on a tape delay, NBC can count on more households tuning in from the West Coast, which helps meet the rating goal ad rates are based upon. We talk a lot about delivering “engagement,” but in this case, buyers bought nothing but numbers for their clients who appeared during Friday’s matches.

Never mind that both matches could have been broadcast live at reasonable hours and those on the West Coast would have watched it live or used DVRs to do so. Never mind that we are no longer living in the 1970s, when access to results overseas was almost impossible to come by relative to how easily they’re found today. Never mind that the words “taped” and “delay” are no longer warranted in the lexicon of today’s media environment. What killed me, as a tennis fan, was how little mercy NBC and ESPN showed for the potential drama we tuned in for to unfold.

It just makes me wonder who’s at the meeting when these kinds of decisions are made at traditional media companies — and when those who understand today’s media landscape will be allowed in the room.

I am admittedly late to the party with regard to the social media explosion. The MySpace and Facebook revolution hit about 20 years too late for me to become immersed in profile pages and virtual friends during my high school and college years. Nevertheless, working in this industry continuously pushes us to stay current, so I took the plunge and created my own Facebook page several months ago.

Feeling emboldened by my newfound hipness, I began to explore the site to find out for myself what makes a publisher like Facebook such a desirable destination for marketers, aside from the obvious reason that their target demographic might be there. After clicking around aimlessly, adding a handful of applications to my page and ignoring countless friend invitations and pokes, I decided to talk to someone who actually had some expertise in this area: Chris Johnson, CEO of Terralever.

Terralever is an interactive agency based in Tempe, Ariz., and was one of the first companies invited to participate in Facebook's F8 launch in 2007. Over the past year, it has developed Facebook applications for clients including Nike, BMW and Red Bull.

I asked Chris about the criteria for marketers wanting to develop a Facebook application. He broke it down to three simple questions:

 

1.     Why would someone want to install your application?

2.     Why would someone want to share your application with a friend?

3.     Why would someone want to use your application one week from now and one month from now?

 

He pointed out that while the initial focus for success focused on the number of application installs, the true key to gauging success lies in engagement metrics. Those metrics go beyond the number of installs to how many people are actively using a marketer's application over an extended period. The value proposition for marketers centers on engagement.

 

While this concept is clearly not startling news, it only answers half of the equation about the long-term sustainability of social network sites as viable brand marketing vehicles. The ability to create an application and place it on Facebook, gaining free access to a target audience that can be engaged in a meaningful way, provides clear benefits for a brand. It creates loyalty, awareness and, ultimately, revenue opportunities. However, the monetary value for Facebook appears questionable.

Behind the impressive database of registered members and their vaunted social graph, millions of yet-to-be-monetized page views and a ginormous valuation, sites like Facebook and mySpace still lack one key element: profitability.

 While the free form, unedited nature of social content is not a deterrent for some advertisers, mainstream brands are still somewhat hesitant to jump on board. That, in turn, has created a substantial hurdle to attracting significant advertising dollars to the site.

Still, there is no shortage of companies trying to develop strategies to monetize social media platforms; a number of niche ad networks are developing new social media strategies to draw advertisers into the space. One of the most prominent, Visa, made its recent announcement of a new marketing initiative to provide small businesses a total of $2 million for advertising on Facebook.

Will such efforts ultimately be enough to turn the red ink black for Facebook and other social networks? If the answer is no, the free ride for brands looking to connect with their consumers on Facebook through fan pages and engaging applications may turn out to be a short ride.

What are your thoughts? Will advertisers overcome their fear of UGC? Can Facebook turn the corner and monetize its wildly successful platform? How long will the free rides last for brands launching third-party apps? Will Facebook still be the destination of choice for this Internet-immersed generation by the time I allow my 9-year-old daughter to access social networks sites (when she is 20)?

I am admittedly late to the party with regard to the social media explosion. The MySpace and Facebook revolution hit about 20 years too late for me to become immersed in profile pages and virtual friends during my high school and college years. Nevertheless, working in this industry continuously pushes us to stay current, so I took the plunge and created my own Facebook page several months ago.

Feeling emboldened by my newfound hipness, I began to explore the site to find out for myself what makes a publisher like Facebook such a desirable destination for marketers, aside from the obvious reason that their target demographic might be there. After clicking around aimlessly, adding a handful of applications to my page and ignoring countless friend invitations and pokes, I decided to talk to someone who actually had some expertise in this area: Chris Johnson, CEO of Terralever.

Terralever is an interactive agency based in Tempe, Ariz., and was one of the first companies invited to participate in Facebook's F8 launch in 2007. Over the past year, it has developed Facebook applications for clients including Nike, BMW and Red Bull.

I asked Chris about the criteria for marketers wanting to develop a Facebook application. He broke it down to three simple questions:

 

1.     Why would someone want to install your application?

2.     Why would someone want to share your application with a friend?

3.     Why would someone want to use your application one week from now and one month from now?

 

He pointed out that while the initial focus for success focused on the number of application installs, the true key to gauging success lies in engagement metrics. Those metrics go beyond the number of installs to how many people are actively using a marketer's application over an extended period. The value proposition for marketers centers on engagement.

 

While this concept is clearly not startling news, it only answers half of the equation about the long-term sustainability of social network sites as viable brand marketing vehicles. The ability to create an application and place it on Facebook, gaining free access to a target audience that can be engaged in a meaningful way, provides clear benefits for a brand. It creates loyalty, awareness and, ultimately, revenue opportunities. However, the monetary value for Facebook appears questionable.

Behind the impressive database of registered members and their vaunted social graph, millions of yet-to-be-monetized page views and a ginormous valuation, sites like Facebook and mySpace still lack one key element: profitability.

 While the free form, unedited nature of social content is not a deterrent for some advertisers, mainstream brands are still somewhat hesitant to jump on board. That, in turn, has created a substantial hurdle to attracting significant advertising dollars to the site.

Still, there is no shortage of companies trying to develop strategies to monetize social media platforms; a number of niche ad networks are developing new social media strategies to draw advertisers into the space. One of the most prominent, Visa, made its recent announcement of a new marketing initiative to provide small businesses a total of $2 million for advertising on Facebook.

Will such efforts ultimately be enough to turn the red ink black for Facebook and other social networks? If the answer is no, the free ride for brands looking to connect with their consumers on Facebook through fan pages and engaging applications may turn out to be a short ride.

What are your thoughts? Will advertisers overcome their fear of UGC? Can Facebook turn the corner and monetize its wildly successful platform? How long will the free rides last for brands launching third-party apps? Will Facebook still be the destination of choice for this Internet-immersed generation by the time I allow my 9-year-old daughter to access social networks sites (when she is 20)?

My two cents is worth less than yours is some areas, and just as much in others. I can prove it. I dumped my brand new air conditioner out the window while installing it. Thankfully, I was smart enough to attempt this installation in the back of my apartment, two floors up and over a courtyard that hasn’t courted anyone in years. As the machine fell to the ground, it caught the back of the air conditioner protruding from the window of the apartment below me, busting that one too.

This lapse in any measurable form of intelligence will be costly — and now I am going to give you my two cents on ad networks — so take it for what it’s worth, and don’t throw me out the window because my professional opinion differs from yours.

I first called attention to my concerns about these publishing tapeworms over two years ago in a column titled “Just Say No to Ad Networks.” At the time, I wasn’t quite sure anyone was reading this column, so the volume of responses caught me off guard. Far more supported my assertions, but the few opposed reacted with professional venom, so I knew I had struck a nerve.

Since that column, and coming off the OMMA Publish conference last week here in New York, I have had the opportunity to get to know a few more of these ad network folks, and they are collectively really nice and super-smart. They appear to have the capacity to design and install a central air conditioning system — so installing a window unit would not faze them. Their technological and mathematical approach to selling display advertising is a fantastic display of their collective brainpower. And yet the more I learn about the ad network business, the surer I am of the destructive impact using these companies has on your publishing business.

One unresolved issue is channel conflict. This is an emotional issue for publishers, and the ad networks try to diffuse it with an upfront “get to know you meeting” in which you can list the accounts “off limits” prior to engaging them to sell the inventory your own salespeople are commissioned to sell (please save the splitting-hairs argument that ad networks sell “remnant inventory” and a publisher’s direct sales staff sells “premium inventory,” as if these impressions are not generated from the same site).

The reality is that channel conflict will always occur For starters, your account list is dynamic; you are constantly adding to your pipeline, so stating what is off limits upfront or even on an ongoing basis won’t eliminate the issue. Secondly, salespeople are driven to bring in money they get a piece of — and if they sniff something they can eat, checking with a manager before they take their first bite is not going to happen as often as it’s supposed to in this relationship. And once a salesperson sinks his teeth into an account, getting it back is not worth the trouble — even if it means getting slapped on the wrist or handling a hostile email from your publishing “partner.”

But the fundamental problem caused by sales channel conflict, that makes me feel working with ad networks makes no sense (if you have your own sales staff) regardless of the monthly revenue this relationship delivers, is pricing.

Channel conflict is seen as a physical concern. “I don’t want my sales guy bumping into your sales guy at the same client” is the corny example given to describe the issue — but it goes much deeper than that. You have to look at this issue from the ground of the shoes your own salespeople and sales managers walk on.

Downward pricing pressure does not come from buyers. It comes from your own sellers and is applied against their managers. Your sellers are the ones who feverishly explain “this deal” cannot get done unless you lower your CPM “this time.” And they know you have already agreed to prices below the floor you established for them, for the inventory sold by a salesperson at the ad networks you engaged. This gives your own salespeople the leverage they need to push their manager to look the other way “this time” — which happens time and time again. Erosion is a slow and steady process that is easily missed when you choose to look away.

Can this marriage be saved? That was the question posed at the OMMA conference. Here is a solution. Single-site publishers who want to engage an ad network to complement their own sales staff should first know exactly what their average CPM is for the inventory sold by their own sellers (not to be confused with the effective CPM for the inventory generated). Once you know this average, tell the ad networks to have at it, but to sell your impressions not a penny lower than this average. Channel conflict may not go away, but your prices will remain more consistent.

If you are familiar at all with “Monty Python” movies, or know someone who is–and that person incessantly repeats their favorite quotes in their worst British accent–you’ve heard the line, “I’m not dead yet.”

Attending OMMA Video and OMMA Publish earlier this week, there was a great deal of discussion focused on which old or existing technologies, methods and media platforms aren’t quite dead yet–to borrow from “Monty Python.”

Brian Wieser, SVP of MAGNA Global, began his keynote presentation at OMMA Publish by pointing out that traditional media never died, as had been predicted with the onset of the digital revolution. Brand advertisers are still focused on reach and frequency, and traditional media is still an effective channel for that.

To expand on that theme, we heard other panelists suggest that brand advertising on the Web isn’t dead, either. When Internet advertising came onto the scene, it offered the holy grail (in keeping with the “Monty Python” theme) of one-to-one, measurable targeted advertising. It could redefine advertising and marketing as we know it, and be the death of the old media-based brand advertising model focused on reach and frequency.

While the technological advantages offered through online advertising are a marketer’s dream, the focus for most big brand advertisers is still branding, not direct response. As Jarvis Coffin, CEO of Burst Media, points out, the biggest irony is that Internet advertising will restore brand advertising–not destroy it. (Why? Need a clearer explanation?) Coffin asserts that brand advertising should still be viewed as performance advertising, and is the “most efficient form of large advertisers’ budgets.”

Jonathan Miller, founding partner of investment firm Velocity Interactive Group, and AOL’s chairman-CEO from 2002-06, took a decidedly different stance in regard to video advertising. It would have been interesting to put Miller and Coffin on the same panel and have them defend their contrasting viewpoints–or battle it out in a medieval swordfight.

Also among the “not dead”: ad networks. As large publishers like ESPN and others have decided to sever ties with ad networks, some have wondered whether that was an ominous sign of their demise as publishers gain the upper hand and control their own inventory.

In two separate panels devoted to different aspects of the ad network/publisher relationship, there was plenty of healthy debate surrounding the validity of ad networks.

Ed Montes, EVP and managing director of Havas Digital, argues that ad networks are not commoditizing online advertising as panel moderator Wenda Harris Millard, Co-CEO of Martha Stewart Living Omnimedia, asserted at a recent conference. Although it is bought and sold in large quantities, Montes says its true value can be found in targeting at the granular level, which creates premium pricing opportunities and is not a bulk commodity like pork bellies.

Following the debate, Millard was willing to concede that ad networks had value in the marketplace and were somewhere between a swine (pork bellies) and a pearl, although she had not coined a term for that yet. A swirl, perhaps?

Pre-roll Video Advertising is also still among the land of the living, despite the desire by some in the industry to find a suitable, less invasive replacement to monetize video. As the industry continues to innovate, finding new and better ways to generate advertising revenue around the fast-growing inventory of online video content, pre-roll is still king despite its negative reputation. The bottom line is that it generates the majority of the ad revenue in this space and is relatively easy to sell because marketers can repurpose existing content they created for television.

As it turns out, being un-dead isn’t such a bad thing, especially when you work for an ad network like I do. Just remember: “Always look on the bright side of life.“

Editor’s Note: We liked yesterday’s Online Publishing Insider by David Koretz so much, we had already published it a month ago. OK, it was a mistake — although, as before, the column generated a number of comments on the OPI blog. Below is the story David actually sent us for his June contribution.

Every time an ad guy uses the absurd example of your mobile phone displaying a coupon when you walk by a Starbucks, an angel loses its wings.

This is one of those incredibly stupid ideas that only sound good when you ignore all the details. The mobile advertising industry needs to grow up, get realistic about how to drive revenue, and damn it, pick a better example.

Every time I hear someone use this example, I can see a new dot.com bubble forming around them.

Let me count the ways this Starbucks coupon example is inane:

First, consumers are not going to tolerate advertising on a phone service they are paying nearly $100 a month for. Neither are business users. The demographics of users that will deal with ads skew much lower on the value scale for advertisers. Even the users that will accept some advertising are not going to want to be bombarded, so there are further limitations on type and frequency of advertising, reducing the potential of mobile advertising.

Second, the technology is not there yet. The penetration of phones that have a sufficiently sized screen, 2.5G or higher Internet access, and GPS is south of 10%. Plus, the buyers of these phones are either business users or high-end consumers, so they are the least likely to tolerate advertising. It is going to take several years for penetration of smartphones to reach the segments that will accept ads.

Third, if your phone pushes ads at Starbucks, what happens when you walk by the plastic surgery center? I can only assume that having your telephone recommend “enhancement surgery” would make an awkward first date even more awkward. The reality is that America, for the most part, is a driving nation. Nobody wants ads delivered at 60 miles per hour. Furthermore, in the few walking cities this country has (i.e. New York, Boston, San Francisco), there is an extremely high density of stores. If your phone rings when you walk past each store that wants to advertise to you, it will drive you crazy. This means the user needs to be able to choose which ads they would like delivered.

If the user chooses which ads they want, they are no longer ads.

Fourth, advertisers are not going to spend money for customers they are going to get anyway. When I’m standing outside a Starbucks, you don’t have to convince me to go inside. Long ago, we as Americans somehow managed to convince ourselves that spending $5 on coffee with syrup and an Italian name was a practical decision. A 50-cent coupon is not going to sway the average purchaser.

More importantly, because even enhanced GPS technology is not precise enough to detect whether you are near a Starbucks or in a Starbucks, Starbucks will be offering coupons to customers already standing in line.

Why on earth would Starbucks want to pay absurdly high mobile advertising CPMs to offer a discount to a customer that was ready to pay full price?

The future of mobile advertising is not about ads or coupons when you walk by, it’s about micro services.

Micro services are simple, fast workflows that let users accomplish things quickly. Ideally, these services leverage stored data or knowledge about you to make them even faster and simpler. For example, your mobile phone could detect your location, show you five restaurants for lunch nearest where you are standing, and let you make reservations. It already knows your name and credit card, so you would not even have to enter any data.

Here are some other examples of micro services:

· Instantly view movie show times and buy tickets at the theaters closest to you.

· Upgrade to business class, or change flights. If there are open business class seats four hours before the flight, why not offer them to travelers at a reduced cost to maximize revenue?

· Automatically upload all my photos to an online photo service where they can be backed up, printed, or enhanced.

Asking advertisers to pay $20 CPMs for a tiny ad on a 2″ screen is a huge stretch. Instead, micro services enable advertisers to pay on a CPA model and eliminate risk. Well executed, they would not be perceived as advertising, so you could reach premium consumers and business users.

If you are in the mobile advertising business and insist on using a Starbucks example, here is a much better one: an app that stores your favorite Starbucks drinks, and enables you to order them with one click when you are five minutes away so you don’t have to wait in line. This would help make Starbucks even more of an impulse buy, while avoiding discounting.

When is the mobile advertising industry going to realize the devil is in the details?

Today's social networking executives seem hell-bent on making history repeat itself.

MySpace, Google, Facebook and others are trying to "out-open" each other by giving third-party developers access to their users, their platform, and their data.  They are even coming together to join groups like OpenSocial to simplify data portability between platforms.

The primary impact is an increasing amount of traffic being consumed in third-party widgets, rather than on the social network itself. Third-party application developers are building increasingly sophisticated apps that cause users to spend more time in the widget, and are even building their own advertising networks to monetize those users.

While opening your network may be popular in the media, it could have devastating results.

This problem is not just limited to social networking. The real fight is over the Web operating system, which is increasingly shifting from the desktop to the Web. More and more, your files, photos, and applications are being delivered from the cloud. The cloud is giving users unprecedented access to data from any location or device. This is the greatest shift in computing in the last 30 years.

The fight over the Web operating system will be a war of monumental proportions. All of the major players will be vying not only to own your data, but more importantly, to own the connections between you and your friends and colleagues.

The current strategy these companies are using is to open up more and more access to user data and the social graph.

This is a race to the bottom.

Facebook is the hottest thing right now. So was MySpace up until last year, when the fairy dust wore off. So were Friendster, AOL, and PointCast. When the next hot thing comes along, Facebook could bleed users at lightning speed. Ironically, they will have made it easier for customers to leave.

Closed networks help you retain users. There is a reason AIM is still the leading IM client, Microsoft still dominates the desktop OS, and cell phone companies don't bleed users even when the service sucks.

If you find yourself in the rare position of having acquired hundreds of millions of users, you should hang on to them for dear life. Opening your network only makes sense in areas that are not strategic.

I can already anticipate the hate mail from people that preach that openness is the key to future success, but 400 years of business wisdom don't agree.

How open is the iPod or iTunes? How open is Google's search algorithm? Exactly.

Today's social networks are fighting for the wrong prize. These companies are so focused on their competitors and the press that they are ignoring what is really important — how are they going to make money from the platform itself?

The evidence is mounting that we are much further away from an ad model for Web-based applications like social networking than previously thought. Sergey Brin announced on a recent Google earnings call that the company has not yet found the killer application to monetize social networking. At many social networks, inventory is going unsold even at absurdly low CPMs.

As social networks continue to fumble around with new approaches to monetization, they risk alienating the very user base they fought so hard to acquire.

While the chest-thumping about openness is going on in the press, the real struggle behind the scenes is around how to retain and monetize users in an open world.

Social networks need to make changes to survive. They need to develop new ad models that enhance the user experience.  Banner ads are simply not going to cut it, and users will continue to tune out the ads. They also need to own an ad platform that monetizes both the platform itself and the widgets that run on it, so they make money regardless of where the page views end up. Finally, they need to figure out which areas will be strategic to retaining users, and keep those closed at all costs. Opening up a network only makes sense for the losers, not the winners.

Unfortunately, these networks may have already opened a door they can no longer close.