So this is how Tumblr and Yahoo will make money

A week ago the pundits were quick to suggest that Yahoo’s purchase of Tumblr was little more than a Hail Mary. How can a company dependent on a dying model (display advertising) and an aging user base stay relevant in the age of social media?

Buy a company that his millions of users but not an inkling of an idea how to make money.

Put that way it sounds like a sure recipe for an obituary of some kind a year or two out. So was this a mistake? Or does Yahoo know something we don’t know yet?

What Yahoo did acquire was a younger, hipper audience. Tumblr indexes at 237 for 18—24 year olds and only a notch below that for users up to 34.  But despite the appeal of that demographic, Tumblr has failed to sell or deliver effective native advertising. And the other option, blasting users with uninvited display ads has to be ruled out, as it will likely make the site too uncool to hold onto the users Yahoo covets in the first place.

On this week’s The Beancast, host Bob Knorpp, Mitch Joel, Brian Morrissey, Steve Wax, and I discussed a number of topics including the recent Yahoo Tumblr acquisition. We wondered if the real strategy was to leverage Tumblr’s voluminous porn. We hypothesized that Tumblr could become a YouTube of printed and visual content. We hoped that eventually the creative community would figure out how to make native advertising that’s either useful or entertaining.  Just in time to save Yahoo’s investment.

(None of us really knew what we’re talking about or we’d be running Yahoo or creating Tumblrs, but this is social media so we’re all allowed to pontificate. Mitch Joel may have been the closest to right when he reminded everyone that $1.2 billion is cheap if it simply buys Yahoo some relevance with a younger market.)

But here’s how Tumblr and Yahoo will make money. They won’t be saved by ad agencies, or creatives or some form of native advertising. It will be with algorithms and data and search software. Possibly from a company called Swoop.

In a total coincidence, the night after Mr. Knorpp asked me how Yahoo would make money with it’s newest toy, I found myself on a 50-mile road ride with the CEO of Swoop, serial entrepreneur Ron Elwell.

His new startup extends advertisers’ search campaigns by leveraging the content that a search ultimately leads a consumer to. So if you were looking for cake recipes, found a page that offered one, and were skimming through the recipe, Swoop knows that a.) you were searching for that recipe and  b. how to match advertising with the content on that page in a very user-friendly and unobtrusive way.

Swoop relies on what it calls “hints,” essentially asking you if, at that moment, you are interested in an ad or offer about, say, cake mix, or sugar or milk. Only if you say “yes,” do you see an ad. Better yet, that ad gets customized based on what your search terms have been, so its relevance is increased.

Yes this is one of many new programs and platforms attempting to make advertising more timely and contextual. But what makes it interesting and suggests real potential is that it actually respects the user and offers him or her a choice.

What does something like this mean for Yahoo and Tumblr?  First and foremost, suddenly all content becomes more valuable. If you, as an advertiser, know that an interest in certain terms, whether searched or discovered in content that readers care about, leads to traffic and sales, you have more relevant places to offer your “hints.” And, of course, given that Yahoo is now sitting on a ton of new, fresh daily content that it already knows people seek out, it has something useful to offer advertisers.

This won’t happen overnight. Right now Swoop is still in the process of evaluating the content against which its technology works best. And much of the content on Tumblr is, of course, visual. But it is likely that the solution, or part of it, will come from new ways to create contextual advertising that accurately knows what a user or reader wants, not simply assuming that a like or a follow means she wants to be pummeled with so-called native ads in her stream.

Of course, platforms like this, assuming they are successful, will benefit any content creator or popular destination. But at least it gives Yahoo a fighting chance and a way to leverage traffic, popularity, and its young readers without fucking up what does seem to work for Tumblr users.

In fact, Yahoo might even be able to make more money off of its porn.

Finally, Springpad has embeddable notebooks

I’ve been a fan of Springpad since they first launched. Enough so to join its board and also to fill in as interim CMO for six months in 2012. I can’t say I was a very good CMO – not a master of growth hacking, which is what startups really need in their marketing mix – but I did push for one feature. Embeddable notebooks.

Everything that Springpad is about – filtering the web, acting on your “springs,”  saving, preserving and presenting content in a form that keeps it persistent rather than lost in the stream – is exemplified when notebooks become embeddable. Now you can post them anywhere, share them on platforms other than Springpad, allow your notebooks to travel across the web.

And if you’re a blogger, publisher, media company – and who isn’t these days – it gets even better. Springpad gives you a means of curating, organizing and sharing content in a more productive way than ever. Letting your readers access it, re-Spring it, copy an entire notebook, or more easily navigate to the original source.

If you are a user already, embeds are possible simply by hitting the share button inside a notebook, then grabbing the embed code. Just like a YouTube video. Give it try. Create, curate, publish, distribute.

It will be a great new feature. Love to hear what you think.

One skill is no longer enough

TourBus, created by Sam Mullins, an art director at Mullen

Should a copywriter know how to launch and execute a social media campaign? Is it necessary for an art director to be able to program a Maker Bot? Do you think a planner needs enough knowledge of Final Cut Pro to edit her own videos?

A few years ago the answer to all of these questions might have been no. But that may not be the case anymore. In a recent book called Mash Up, Ian Sanders, marketer, author, FT columnist argues that it’s no longer enough develop a single skill. Ian’s premise is that you’ll find a more fulfilling job, enjoy a competitive edge and make more money if you develop or leverage multiple skills.

Forward thinking companies want multi-skilled people

But in the long run, you may have no choice. At innovative companies, diversity is the new expertise. IDEO doesn’t have constrained job descriptions. They expect you to design your career and contributions in the same way they solve problems for clients. At Google’s Creative Labs, which has grabbed some of the ad industry’s top creative talent, Strategy Director Ben Malbon seeks “people fluent in one language, but literate in many.” The same is true at Mullen. In the long run, an art director who can invent and launch a new app might be more valuable than one who can only art direct.

In some cases there are new positions emerging that in and of themselves call for multiple skills. Five years ago creative technologist, social media strategist and experience designer were non-existent roles in most agencies. Chances are that over time, these newer jobs will become even more prevalent, or at least offer greater opportunity.

You may already be that T-Shaped multi-skilled person. If you’re not, here are some simple things you might want to do.

1. Learn more about technology and what you can do with it.

Everything from emerging social platforms to HTML5 to the accelerometer in your mobile phone. The more you become aware of their potential, the more problems you can solve and the more opportunities you can create.

2. Make something yourself.

These days if you can think it you can create it. With resources that include Apple’s software developer kits, 3-D printers, cheap hosting on Amazon and the distribution power of the Internet, you (or your employer) don’t need a lot of money to invent an app or even a platform. Mullen art director Sam Mullins, just launched this. TourBus.

3. Partner with people who do what you don’t.

I had a student last semester who conceived a platform to help students change their housing. He had no idea how to build it, but decided to find some other students who did. Six months later BU Room Swap was up and running.

4. Change where you sit

I’m constantly surprised what a difference this can make. If you are surrounded by people who do exactly what you do all day long you lose out on the serendipitous collisions that open your mind to different ways of problem solving.

Multi-skilled does not mean generalist

However, being-multi-skilled is not shorthand for lacking a deep talent in at least one area. Simply being a generalist won’t get you hired. At least until the typical agency staffing plan gets reinvented. Most plans don’t include generalist or multi-skilled as a job description. They list all the usual positions, from account management to studio artist. A client agrees to pay for a certain number of FTE’s and that determines who gets hired and put on the business. And at the end of the day writers still have to write, designers have to design, and animators have to animate. The objective is to master your craft and learn enough about the other roles and functions that can make you better at yours.

Share your thoughts. Working somewhere that welcomes or demands multi-skilled contributions? Or frustrated in a company that still compartmentalizes people?

Five reasons why most brands can’t do social at scale

Recently there is a lot of talk about doing social at scale. In fact, Sprinklr, the well-regarded social media management system, just asked me to join the esteemed Mitch Joel, Joe Jaffe, Chris Brogan, and Jason Falls in answering the question, “How does the enterprise do social at scale?”

My first answer is they can’t. It’s not possible. Why? Because most enterprises aren’t social. They may do social. They may use social. But that doesn’t mean they are social. Big difference. Sure, plenty of brands have shown us some version of success. American Express enables existing communities (small business), supports customers and businesses via Foursquare, and attempts to market on Facebook with Link, Like, Love. Axe took the web by storm for at least two days with their realtime, Twitter inspired videos. Best Buy launched Twitter-based support with TwelpForce. Burberry has perhaps done the best job, transforming itself into a media content company in order to create truly social experiences for its customers. And, of course, early social pioneer Dell turned its customer service over to its customers.

But to get to scale — and by that I presume we mean extending social engagement and interaction across borders, divisions and product lines, effectively serving multiple communities in realtime, and harnessing social data to inform future programs and products — it might take more than Sprinklr’s very intelligent “Must Haves,” six suggestions for what enterprises need to be doing.

Here’s why it won’t happen for most enterprises and brands.

Too many companies practice old media tactics in the new media environments

Just the expressions “Follow us on Twitter,” and “Like us on Facebook” suggest that what companies really want is to have you opt-in as an audience. No different than tuning into a broadcast network to receive cleverly disguised sales pitches. How many media properties and brands, for example, do you see that serve up nothing more than information about themselves, hoping that it might be of interest? There is still a lot of pushing.

They start with themselves not their community

Granted this is marketing, but it appears that most efforts are fueled by answering, “What do we want them to do?” rather than “What can we do for them?” The future of marketing is service and added value through utility. Done well over time that will lead to the conclusion that a company serves me and therefore deserves my business. See this old Nordstrom’s story.

The people who execute social media remain isolated

For a lot of companies, social strategy and execution is treated as a function, performed by the social media or PR organization or maybe the service department. But until social is integrated throughout an entire organization, used for everything from consumer research to product testing, crowdsourcing, real time response and access it will be near impossible to scale for the simple reason social behavior won’t be practiced on the community’s terms. Listening and measuring is great. But one-to-one real-time connections should be the ultimate objective.

Thinking remains short term

Advertising taught us to think in campaigns. Run a campaign, see immediate results.  You can do social media that way, for sure. To launch a product, open a store, generate buzz, leverage a cultural event. But until marketers and those who approve the budgets for resources, technology and training recognize that social is also a long term investment, scale will be a challenge.

Most companies use social, but it doesn’t mean they are social

You can have a Facebook page, multiple Twitter accounts, even a state-of-the-art command center that monitors the conversation.  That is using social. Being social, however, has less to do with platform presence and more to do with a philosophy that results in transparency, participation by the constituents who might be affected by a decision, a senior management team that sets an example, and a willingness to give up some control.

This is hard. Despite what we’ve seen happen to Nestle, Bank of America, Netflix and the Gap, a lot of companies can’t change their DNA and muscle memory when it comes to marketing.

The desire to scale social without making the commitment to being social reminds me of all the brands that want to be like Apple. They covet Apple-esque advertising, Apple-like design, and Apple fan loyalty. But they fail to understand that the culture of simplicity making all of that possible isn’t an execution (ads, product, store) it’s a deep-rooted culture that drives every decision the company makes along with those it chooses not to make. (Read Insanely Simple and you’ll understand that story.)

I also believe it’s easier to be social than to be Apple. Many companies will inevitably get there. But I fear they’ll have the platforms, multi-channel management, corporate governance and analytics in place before they’ve changed the most important obstacle. Their way of thinking.

Why it was smart of Havas to buy Victors and Spoils

Victors & Spoils has had no problem attracting clients

When Victors & Spoils was first launched two-and-a-half years ago, the company had more detractors than fans. (Note, I was among the latter.) Much of the industry dismissed the idea that the model could ever replace the traditional agency/client relationships. The more vocal members of the creative community found all kinds of reasons to condemn the new company. The talent wouldn’t be as good. The whole idea of crowd sourcing would undermine the value of the creative person. The best people wouldn’t submit to this kind of process and platform.

Co-founder/CEO John Winsor and I had numerous conversations about why the critics were wrong. Great ideas can come from anywhere. Plenty of people would welcome the chance to have their ideas considered. (After all, how many of us encounter a daily dose of rejection already?) Clients had tired of paying for overhead and some of the excesses of the advertising industry.  And since agencies could only sell the talent they had on staff, by definition they were limited in the number of ideas they could generate to solve a problem.

Clearly, John and his partners were a step ahead of the critics. From day one the agency met with success.  Thousands of creatives from all over the world joined the community.  And the agency’s pitch resonated with lots of clients. Dish, Discovery Channel, GAP, General Mills, Harley Davidson, Virgin America, Levi’s and a host of other brand name advertisers signed on.

And why not?  They could get a slew of ideas — curated, filtered and on strategy — for a lot less money than they would pay in a typical retainer relationship.

From the very beginning I thought this was the perfect acquisition for a holding company. Think about it. Holding companies serve large global clients. They make the claim — sometimes actually true — that they can harness the collective the resources of multiple sister agencies to serve a client’s total needs. Yet they really don’t have a model, infrastructure or software platform for doing so. Ask anyone who has participated in a cross agency (there’s a more disparaging word for it) shoot out and they’ll tell you it’s among the more miserable experiences in which you could ever participate. In many cases it wastes time and resources. And for the individuals encouraged (if not forced) to participate it often results in nothing more than demoralization.

But with Victors & Spoils platform — the community, the software, the process — it could be so much more efficient. A holding company can tap into an existing community, create a new one, invite more people to participate with less time and effort, and effectively manage and evaluate more submissions. Add some incentives or gaming dynamics, make it easier for people to throw in ideas, and it’s likely that participants might even welcome the opportunity to help the company cause. Perhaps more importantly, clients might have a genuine reason to believe that multiple agencies could work together on their behalf.

Until now, most ad agencies have been threatened by Victors & Spoils. They’re perceived to undermine the value of individual creatives, diminish the role and impact of the creative director who hires and guides them, and convey to clients that there might be a better idea outside the walls of the agency.

But if, in the end, our job is to solve big problems, deliver the best and most effective idea, and leave no stone unturned in determining it, maybe we should all acknowledge that community, software, and yes, crowdsourcing techniques, are the way to go. Maybe not always, but certainly sometimes. Add to that the fact that we really only have two choices — resist progress or embrace it — and we have even more reason to welcome the innovation that V&S has pioneered over the last two years.

John Winsor, Claudia Batten and Evan Fry had the vision and the courage to try and change how ad agencies work. Looks like the big holding companies — at least one of them – is starting to believe they’re onto something.