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.
Are marketers really going soft?
Al Ries argues the famous Apple campaign was a failure and too soft.
I don’t usually respond to articles in the trades, nor do I get into ranting, but I must say that Mr. Al Ries’s latest Ad Age column offers some pretty weak arguments in favor of hard sell vs soft sell.
For starters he confuses taglines with marketing. Taglines are simply expressions of a brand’s behaviors and beliefs. Ideally they sum up everything a company does and makes with a line that describes the product (The Ultimate Driving Machine), promises an outcome (Red Bull gives you wings), shares a compelling belief system (Real Beauty) or offers encouragement (Just do it.). But if the brands mentioned above prove anything, it’s that a brand’s behavior – products, service, accessibility, and inclusiveness – not its tagline that really matters.
Secondly, in an attempt to support his argument, he completely distorts one of the most brilliantly crafted marketing efforts of the last 20 years. Apple’s Think Different campaign. Ries argues the campaign was an utter failure, claiming its emotional appeal offered little motivation to buy products compared to A thousand songs in your pocket, the line that launched iPod five years later.
What Ries neglects to mention, of course, is that Steve Jobs launched Think Different right after returning to a company whose diminished stock price, demoralized work force, sorry product offerings and empty pipeline didn’t leave very many options.
But Apple did have a loyal community of believers who wanted the company to succeed. And Think Different gave them hope. The campaign was never designed to sell products. It was created to inspire the base, the market and the company’s employees. Which, of course, it did. When iPod emerged, it came from a company that once again stood for something worth believing in. One could probably argue that Think Different inspired the likes of iPod in the first place.
We live in an age when consumers are more media savvy than ever. They know when they’re being sold to. And they choose to consumer a company’s advertising just as they decide whether or not to buy its products.
The argument we should be having isn’t whether a tagline is emotional or feature driven. It’s whether or not a brand has a vision, the determination and resources to make products that deliver on that vision, and an advertising campaign that inspires people to take notice, play a role and care.
Sorry Al, but someone had to call you out.
Can competing panelists make panels less boring?
Mike Proulx, Margot Bloomstein, Drake Pusey, me and Eric Leist
More often than not, panel presentations disappoint. The panelists haven’t prepared. The moderator can’t maintain control. The answers come off as too repetitive. But last night I participated in a different kind of panel. A competitive faceoff in which panelists competed to remain on stage and the audience decided who offered the most useful content.
Boston University’s Digital Media Club and Maurice Rahmey drew big crowd to hear four of us – Hill Holliday’s chief digital strategist Mike Proulx, Arnold’s digital platform director Drake Pusey, content strategist Margot Bloomstein, and me – attempt to avoid elimination by offering better answers than our rivals.
There were three rounds. The first had five questions, the second four, and the third three. The first two sets of questions were shared with the participants in advance. The last three came from the audience.
Moderator Eric Leist served up the initial query to one person in particular, but after that it was a bit of a free for all as there were only three minutes allotted to the panel for each question. There was a clock staring us in the face. We knew how much time we’d used and how much time remained. To be fair the moderator did let anyone who got shut out of a topic give a 30-second response. But the format forced us to be opinionated, concise and even disagreeable. More importantly it called for us to avoid repeating earlier answers.
After each round the audience texted who they wanted to hear more from and the last place contestant exited the stage.
This is how to do a panel. If you’ve never organized one this way, give it a try. If you typically avoid doing these kinds of appearances, re-consider if you get offered this format. It’s fast, fun, intense and actually gets your pulse rate up.
On a different note, it was also impressive to see the questions that students came up with. I’ve listed some below along with a very condensed version of my answers. I did not win, though I made it to the final faceoff where Mike Proulx kicked my ass with his knowledge of social TV.
First Round: Trending Topics (three minutes per question)
Two current digital media headlines are discussed. Panelists give detailed arguments and can offer rebuttals as well.
Q: Will brands flock to integrate iPhone Passbook and pave the way for mainstream mobile commerce?
A: Brands don’t flock to anything, at least not initially. Most marketers and retailers, despite the so-called instant success of Sephora, will wait until they see what consumers do. Brands like scale as we all know. As for paving the way to mainstream mobile commerce? That’s more likely to come from the credit card companies. It’s important to remember that technology comes first. Early adopter consumers come second. Brands and marketers are always the last to the party.
Q: Are second and third screen experiences affecting the way voters make decisions during political campaigns? Why or why not?
A: Not really. They are essential for access to content, they serve as a distribution channel and leverage social sharing of ads, videos, and candidates’ faux pas. But the technology alone is not affecting decisions. It may have played a bigger role last time around in the way Obama connected with younger, more digitally savvy voters, but less so this year.
Buy or Sell: A rapid-fire segment in which panelists are asked to “buy” or “sell” (be for or against) three different concepts (this time in terms of what audience needs to do to be better equipped for job market).
Concept 1: The interest graph is more useful to marketers than the social graph.
A: Yes. It’s always better to market to a consumer who’s raised his or her hand and expressed interest. The trick is to learn to leverage Pinterest, Springpad and other platforms to both identify those interests and to inspire their expression.
Concept 2: Web 2.0 sites have shifted from banner ads to platform native advertising. In the future, all content networks will adopt some form of native advertising. (Sponsored Tweets, Stories on Buzzfeed, Facebook Sponsored Stories, etc.)
A: We all know that old-fashioned banner ads don’t work. But when is the future? All content networks? They should. And inevitably they will. But it will take some time, simply because of how inventory is sold and the legacy systems, processes and habits already in place. Students, however, should know how to conceive and execute native advertising ideas. It will make them more valuable to forward thinking employers.
Second Round: Controversial Topics (2 minutes per question)
Q: Should marketers care about pay-to-play (ie non-ad revenue supported) social networks like APP.NET?
A: Certainly not yet. Though there is an underlying message. Social users don’t want ads and or a platform beholden to advertisers. Paid platforms may not take off, but smart marketers on the other platforms should take note enough to make sure their content and engagement is useful and welcome, not intrusive and self-serving.
Q: What non-payment mobile trend/tech is having the biggest impact on the retail industry for marketers?
A: Images, Instagram and in-store innovations similar to what Burberry is doing in Dubai and London.
Q: The web has broken down the barriers between PR, advertising, and in-house marketers. Who is the ideal person to create content on behalf of a brand?
A: PR people are best equipped. Marketers are used to multiple layers between themselves and their consumers. Advertising practitioners know how to make messages. PR professionals, at least those who’ve learned social protocols, understand one-to-one and real-time engagement.
Q: At TechCrunch Disrupt, Mark Zuckerberg stated that mobile ads are more effective and will be more akin to television than the web. Is there a non-annoying future for mobile advertising?
A: Yes. We just don’t know what it looks like yet.
Third Round: Questions from the Audience
Even these were quite good and challenging. One was on Facebook suggesting it would launch “wants,” and the potential impact on making it a better, more effective paid medium. (It’s a response to the interest graph.) A second was on the biggest disruptive challenge to agencies. (The need to compete with Silicon Valley for talent.) And the third, which killed me, was about Shazam and social TV. (I attempted to change the subject to the SuperPAC app.) But the audience was too smart to fall for that.
Got better answers to any of the questions? Please leave them below. Been on a panel like this? Please share your reactions. And thanks for stopping by.
Photo: Heather Goldin, Daily Free Press
Beck and McSweeney’s show us how to market in the age of collaboration
Want to hear Beck’s newest composition? You’ll have to perform it yourself.
Let’s start with a simple premise. In an day when we can all create, publish and distribute content the best ideas are those that inspire creation, publishing and distribution. Uniqlo got us to tweet about its products. Nike gave us a digital megaphone to rally cancer victims. Old Spice made us part of a real time campaign. Intel and Google let us customize digital content and attach our name to it.
But Beck’s new initiative – releasing not a new album but simply the sheet music for 20 new songs — may be the most interesting approach yet. The first time we hear the music is when we play it ourselves. Or listen to a friend’s interpretation. Or click on one of what are sure to be hundreds of YouTube videos created by Beck fans and wannabe’s. Or hear the featured interpretation’s on the website of McSweeney’s, the innovative publisher (founded by Dave Eggers, another brilliant pioneer of cool stuff like 826 Valencia and spinoffs) that will co-produce the Beck Hansen Song Reader, due out in December 2012.
Beck has essentially composed the music, the marketing campaign and the viral trigger with a few pieces of paper and a totally original creative idea. I suppose you could argue that none of this is new. Before vinyl and radio all music was released this way. But it’s a different idea entirely in the new hyper connected digital age.
Just today I was invited to speak at BMA of NYC in September at their event Transformations: Now and Next. The session contrasts the opinion of the data geeks, who argue that social, mobile and big data will reduce the importance of creativity, with the creative community, which claims all the new technologies are leading to a creative renaissance and entirely new ways of telling stories.
Sadly, I have a conflict. But I know my answer to the question “Creativity: Renaissance or Retreat?” It’s the same as Beck’s and Dave Eggers. The real future of creativity may not be who tells the story, or even the stories themselves. Instead it just might be the novel processes and experiences we invent to inspire the creation and telling of those stories.
For more on Beck’s new project, check out this great post from Ideasicle founder and Forbes blogger Will Burns.
