Move beyond banners to monetize social media: ThinkMobile panel
NEW YORK - When dealing with mobile social media, marketers need to move beyond traditional ad units such as banners, according to a panel at MediaBistro's ThinkMobile conference.
Social media communication has become a major part of consumers' lives, and the mobile device has become a terminal to the social media networks online as well as a breeding ground for unique mobile offers. The user-generated aspect of social media networks has been a challenge to monetization, and CPMs have remained low as social media marketing continues to be difficult to justify and track.
"Clearly many people have a much more linear mindset when it comes to mobile, focusing on the click-through rates of banner ads and traditional ways to measure ROI, and place little value to understanding how to enter into real communication and dialogue with consumers," said Justin Siegal, cofounder/CEO of MocoSpace, Boston.
"Mobile marketing is less about CTR and more about mindshare and engagement," he said. "There's more upside for all of us to go beyond the banner."
Marketers need to shift their goals from brand awareness, propensity to buy, CTR, CPM and CPA to number of transactions and "cost per relevant audience," according to the panel.
A cost-per-relevant-audience metric would involve analyzing social media flows to measure getting the most relevant messages to the most relevant audience.
Moderator Alan Moore, founder of SMLXL, showed the following slide, summing up his view of the current state of mobile marketing:
"Do companies really understand:
1. the concept of the networked mobile society?
2. that data and the commercial intelligence that falls out of the refined social data delivers?
3. the insight of what mobile social media communications provides?
4. what motives human beings to share?
5. that traditional advertising inventory is dead on the mobile platform?
6. ergo -- what is the currency of communication in a social mobile media ecology?"
Each panelist was encouraged to chime in on those topics.
MocoSpace is a mobile social network with 6 million members and 2 billion page views per month.
"Our currency is authenticity, and decisions in the networked world are driven by peer groups, word of mouth, what actual consumers are saying about things," Mr. Siegal said. "In a networked society, with the Internet and mobile phones, more people are connected than ever before, most via mobile phones, and it's much harder to pull one over on people.
"If you don't do things the right way, the damage to the brand could be massive as it spreads like wildfire throughout the network," he said.
Mr. Siegal, commenting on factors holding mobile back, compared the Internet to mobile, saying that you can get domain name from GoDaddy and have a Web site up and running for less than $100 in less than 24 hours.
Whereas, if a company wants to launch an SMS campaign, it usually takes two or three months to get its own short code deployed, the company might have to spend tens of thousands of dollars, plus engineering costs and getting approved by the carriers, with which the company must share at least 50 percent of the revenue.
He also lamented the difficulty of mobile transactions in the current fragmented mobile ecosystem.
Many panelists struck a familiar chord: mobile marketers need to get creative and move beyond the banner ads in order to monetize social networks -- both mobile and PC-based -- without alienating consumers.
Buzzd is a location-sensitive city guide for mobile devices. The company is also trying to move beyond banner ads.
"People are transposing ads that might run on the Web to mobile without increasing the relevancy intrinsic to mobile devices by doing things like adding location tags to their inventory," said Nihal Mehta, CEO of buzzd, New York. "CPMs are so low on mobile, and that's not optimizing what the mobile medium is for."
In fact, Mr. Mehta said that mobile CPMs are down 90 percent from what they were at this time last year.
"To run a business in this space, you have to think about other ways other than banner ads to monetize, such as contextual advertising, ads inside actual content that are extremely relevant and add value for end users," Mr. Mehta said. "Certain transactions can be linked to those activities, for example buy movie tickets or book a restaurant table.
"The more relevant advertising is, the higher price you'll get for it," he said. "It's amazing how few publishers are taking advantage of the tools we have today -- let's get more specific and granular in mobile."
For example, Facebook lists friends' birthdays, and next to each date they place a ?buy them a gift' icon. Facebook has generating more than $10 million selling virtual gifts without promoting the product offering, relying on word of mouth.
"Engagement is so key, so instead of traditional banner ads, let's think ?How can we really engage the consumer so they want to transact on these platforms, which are driven by relationships?'" Mr. Mehta said. "In social media, there are lots of advertising models that have yet to evolve, but we know it's not going to be banner ads.
"We're still trying to figure this out, but the best models for engagement must be scalable and relevant so that it's not going to piss off end users," he said. "Mobile is not just another channel, it's become part of every channel."
Mobile social gaming company Cellufun offers branded games that incorporate brands' messages deeply into the game content. The company follows a virtual goods strategy.
"Social media is about finding connections to other people using the device that's on them all the time, and we think monetization strategies should be more geared towards virtual goods," said Arthur Goikhman, cofounder/COO of Cellufun Inc., New York. "Publishers and brands need bring to consumers to the services they want to have on mobile.
"Consumers learned to ignore banner ads on the PC, so they can learn to ignore them in one more place," he said. "Brands need to find things people are looking to interact with on their phone."
By 2015, 5 billion people will have a mobile phone, according to the panel, so there will be increasing opportunities for mobile marketers going forward.
Butterball let Cellufun mobile gamers buy and cook virtual Butterball turkeys on their handsets. People texted in to get recipes from Butterball.
"There are opportunities for brands to reach people via mobile in a way they've never been able to before," Mr. Mehta said. "People are pretty good at filtering ads, so you have to give them a different type of experience.
"Some mobile campaigns can be measured in transactional numbers or how many people sign up for text alerts, but you have to deliver ROI to brands," he said. "The potential of using the mobile device to close transactions is enormous, but it's not something the industry has delivered on -- it's needed like oxygen in the mobile ecosystem."