Money is flowing into all things social. We just witnessed Facebook, one of the largest IPOs in history, laser focused on the social experience. I spent the last decade of my life building tools at Titan to make games more social. Titan acquired Xfire from Viacom because we saw a massive opportunity to make that tool more social with tournaments. One day, the light bulb went off … the best ads will be social.
The best ads have two common threads – emotion and distribution. On one side, the ad creates an emotional response of laughter, fear or sex. On the other side, they travel easily through the social web by way of share button.
Social Ads Require More Effort
On a recent shareholders call, Larry Page claimed that Google sold (on an annualized basis) $5 billion worth of display ads in 2011. Clearly, some advertisers seem to disagree that banner ads are dead. It is fair to say that they are not dead per se, just brutally ineffective.
Countless studies have been performed with eye-tracking devices that demonstrate users’ eyes naturally avoiding banner ads. When is the last time you clicked on a banner ad? Exactly.
It is a $5 billion dollar business because it is easy to use. An advertiser opens up a Google AdSense or Facebook Ad account, and within a few seconds they can upload a banner for the world to see – or not. Today, an effective banner advertisement has a 2% CTR. Fifteen years ago, banner ads are rumoured to have experienced more than a 50% conversion rate. Advertising mediums always have seemed to hit a point of saturation and begin to decline.
Brands, particularly small businesses that account for half of Google’s revenue, are finding a hard time matching the viral rockstar status of an Old Spice ad. Those short, funny commercials are expensive to produce and rarely come out looking professional.
The good news is that advertising and the tools we own are being reinvented. Nearly every brand owner having a smartphone with high-resolution HD cameras and applications like Viddy to make those shots look more entertaining. Brands are realising that starting to play with new customer engagement techniques is not that hard.
Social Ads Are Worth Every Headache
In the old paradigm, a brand hires a graphic designer to produce a graphic or flashy takeover banner. The ads are split tested and the one with the higher clickthrough rate is the one that gobbles up most of the budget. In this new advertising paradigm, brands create rapid bursts of entertaining content with little reference to their own brand to see “what sticks.” If it sticks, expect that brand to replicate its success. Hence, the 15 same Old Spice commercials. It really is getting Old.
In the old paradigm, swapping a green to a black in a banner may produce a 10% lift in efficiency. In the new paradigm, placing the right piece of content into the distribution platform could easily produce a lift of several thousand times over.
There are thousands of advertisers sitting in creative agencies working with Fortune 100 brands to figure out how their next spoof, their next tweet is somehow shared on by the masses. The challenge is no longer, which properties do I plaster my banners on, but how do I innovate my ad to give it the best chance of going viral with a discriminating audience?
Who is the world’s most interesting man? I don’t know his name, but he is the guy that drinks Dos Equis. Who is the guy on a horse? I think he wears Old Spice. Those campaigns worked because it was probably one of your colleagues that shared it with you and said, “You have to see this. It is hilarious”. This ancient form of advertising, word of mouth advertising, eclipses the effectiveness of purchasing Google Display Ads or Facebook Sponsored Stories.
The best advertising is entertainment. For instance, the 2010 Old Spice “The Man Your Man Can Smell Like” video’s 41 million views and 47,000 comments continue to increase daily. This kind of content caters to people’s wants and needs. People want to be entertained and have a need to maintain hygiene. People don’t want dirty banner ads; they want a good laugh and to stay clean.
The maths just works. Instead of paying on a per-impression basis, many advertisers have realised that by engaging their consumers with content they are likely to see and forward on, they are reducing the blended cost of impression or blended cost per click.
There is an interesting challenge on the horizon. Once I have a branded piece of content, how do I engage enough of a critical mass to create a snowball effect? There is a finite of attention span, thousands of brands competing for top of mind. It better be original and definitely not a banner.
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