social media, advertising, and why Donna Bogatin needs a clue

I just delicious’d this NYT article about MS partnering with Facebook to sell ads. This struck me:

“It’s basically a consolation prize,’’ [e.g. not MySpace] Phil Leigh, president of Inside Digital Media, a market research firm specializing in digital media, said of the deal.But Facebook is also a legitimate test bed, a place where Microsoft can test new technology in a commercial context,’’ he said.

“What we’ll see is Microsoft attempt to do some fairly leading-edge type of things, involving banner ads, animation and interactivity,’’ he added. “Whatever technology they develop and use effectively in Facebook, they’ll be able to use it elsewhere.’’

I kind of actually like this idea, although it reminds me of some hearsay about TagWorld, a crappy MySpace clone stuffed full of low-budget Flash applets (sorry if you luv TagWorld 4-eva, I’m not a fan). According to my source, the SNS stuff on TagWorld is just a red herring. Really, they’re developing B2B apps that they test out using their large (1 mil or so), engaged user audience. They let the teens slam on the apps for a while, get feedback, etc., and then repackage them and sell them to enterprise customers.

What both of these deals show is that what users actually do on social networking sites is totally, totally, totally irrelevant to social networking companies. Facebook could care less what its users are actually doing, as long as they’re on the site (eyeballs) and staying on the site (sticky time). I’m sure there are plenty of great UI, dev, and product planners at all these companies working on cool features that they actually think will do some good (or something). But it’s just like television shows. The content is totally irrelevant– it could be Six Feet Under or it could be Are You Hot?– as long as an audience can be delivered to an advertiser.

Social media like YouTube and MySpace are great for advertisers because they’re cheap ad buys and give them the ability to experiment with wacky things and see what sticks. Stuff like the Suzanne Vega concert in Second Life maybe reaches 200 people directly, but it gets tons of PR and gives Vega a relevance to a younger audience she hasn’t had since the DNA remix of “Tom’s Diner”. Making a viral video or some stupid wallpaper generator costs nothing compared to physical, RW creative (a bus ad, a magazine buy) and allows for a lot more edge and sass than can be shown on, say, VH1.

Oh, and my least favorite ZDNet writer, Donna Bogatin, uses this news as an opportunity to write another squawky column about why Web 2.0 sites should handle all their own advertising. I find this really curious. Does she think that Coca-Cola or Ford should do all their advertising in-house? Facebook isn’t an advertising company. MySpace isn’t a search company. Why shouldn’t they outsource stuff outside their core competency?! This seems like basic business sense to me.

But this is the same writer who thinks Web 2.0 users (who, again, are providing content AND personal information to for-profit companies for free) are greedy and selfish. Her reasoning is that by prioritizing user experience over plastering advertising on every surface of every site, Web 2.0 sites are indulging their users too much. I can’t emphasize enough how much I disagree with this statement.

1. If you plaster your site with advertising and fuck up the UE, you will lose your users to another site unless your content is so compelling that they can’t find it elsewhere. Right now, there are very few sites that are that compelling.

2. The ONLY REASON Web2.0 sites EXIST is because users give them content FOR FREE.

3. The only reason Web 2.0 sites CAN sell advertising is because users give them personal information that they can use to generate demographic profiles for ad buys.

4. The only reasons sites get traction from day one is because they have a good user experience. Turning around and changing that as soon as you get a user base is sleazy and shows how little you care about your customers.

Like it or not, we are in an era where users expect a greater degree of interaction with companies. I could write an entire book about this, but suffice to say that the companies that will survive the shakedown are those with positive relationships with their users (or cable/cellphone companies with monopolies). If you treat your users like disposable cattle, they will disappear (hello, FRIENDSTER). Although a user base of dippy edge case technocrat fans isn’t enough to sustain an entire company, it’s much much much much better than an angry, organized mob of former users who aim to take your company down (exhibit two: TextAmerica), which often happens when you prioritize a quick cash grab over sustaining a user base over time.

In summary: Donna Bogatin needs to chill out, calm down, and stop blaming the users for poor business model decisions by companies that she doesn’t even work at (although as I said, I don’t think this Facebook/MS deal is a bad move). She could definitely use an HCI or CMC class as well. But what do you expect from a former investment banker?

I apologize for misspelling her name in the first draft of this article.

Technorati Tags: myspace, facebook, interactive advertising, web2.0, microsoft