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October 22, 2008

SMX Singapore Keynote II - Harrison Gervitz

By David Temple

Dsc03783 16 year old business prodigy, Harrison Gevirtz of GevirtzMedia and LeaderClicks spoke about social media monetization for the keynote on the second day of the inaugural Search Marketing Expo in Singapore, SMX Singapore. LeaderClicks is a social advertising network, working with publishers and advertisers on Facebook, Myspace, Bebo and Hi5. Harrison's company specializes in monetizing social traffic with proprietary ad serving technology.

Social networks have been growing significantly over the past 5 years and he just read an article that social media has surpassed the adult industry. 4 of the top 10 sites in Singapore are social media sites. MySpace and Facebook are receiving most of the traffic as well as Friendster here in Asia.

The evolution of social media started with just targeting based what was on their web page. Now we're getting into a new technology, social graphing targeting. Using technology shapes relationships. We developed technology to determine influence among friends. For instance if someone has 500 friends on a FaceBook profile and interact once or twice a week, let's say that friend has around 500 - 1,000 interaction points.  But if someone has 200 friends and they interact on a daily basis they have a lot more interaction points. So they have more power over their friends. So it's quality over quantity.

We need to put social into media. It's about friend rank and not page rank. Instead of placing value on content, base the value on interaction. It's not the number of friends but the depth of relations of that friendship. It's really about frequency of the contact and how they interact. If someone on FaceBook sends you a message everyday promoting their band that are probably not very credible. But if a friend  sends you the same thing, then you will probably take a look. Are you a follower or a leader? Are you the one that joins and all your friends join or do you see a friend join so you join? It's about who the person is in relation to you.

Shows some examples of different social media sites that have good interaction for users. SparkPeople a weight loss site let's users interact by sharing pictures, telling how they've lost weight, how they work out, etc. They get free rewards, earn points and that's what motivates them to participate. On YouTube you can favorite your videos, rate their friends, leave comments on their video, and exchange videos, Recently the added a reply to comment on a video by making another video.

Facebook applications like pets for sale where people collect pets. You can buy friends, their value can go up and you can leave comments, like why are buying me or change their nicknames.  You can also send them gifts or put cool gifts on their profiles. It's about utilizing the game mechanics which helps the application continue to grow. People do things that couldn't in real life like buy a friend.

There's Facebook word challenges, where you can play against friends, participate in weekly contests and share their scores. There's mob wars where you steal a car or shoot someone. You can't do these things in real life and people have imaginations. On Friendster, the biggest social network in Asia you can take a typing test but people play it lke a game and compete with their friends. On Hi5 and Facebook there is a graffiti wall. Friends can write on your wall and others can add to it. 

Harrison shows an ad on Friendster and comments he doesn't see much relevance or how it appeals to users.  We need to dynamically insert users in motion, it's not there yet. He shows a Youtube video of Blendtec blending golf balls to show how powerful their blenders are. He got an email to fly Virgin Air and they mention their FaceBook page. Others were talking about their bad experience but Virgin was responding and addressing the problems. This is social media at it's best.

Social media traffic monetizes extremely poorly. People are showing the same ads to everybody. If somebody doesn't click an ad once or twice they won't click on it after the hundredth time. Instead of serving the same ads, target users by what's on their profile, their behavior and their friends. That gets back to friend rank. Have an ad that says your friend also signed up for this Facebook application or can you beat their high score on this application. Put the friends into the ad and they will probably convert at a higher rate.

Frequency cappng is another thing that the ad networks are not doing on social media sites. This should be based on the time of day, level of engagement and how active that user is on that application. Create an ad based on the user engagement. Social media ads should include the picture of your friends that have signed up for an application or put the actual user in the ad.

For instance he's seen a lot of ads for free ringtones and we know that isn't true or ads for magic weight loss. People have seen those ads and now they want to see true advertising and interaction. You need a points based system. Friends for sell give you 10,000 free dollars every time you sign in. Harrison says he is a sucker for points. People are starting to realize introducing points in really work.

This is how we can maximize the revenue. If you have a new install and you see x number of users leaving, you can actually see the cpm is lower. Most people base cpm on total impressions but it doesn't work. On social networks due to the functionality of how may page views are generate it's better to go by pay per click. If you get more page views you will increase revenue but you need to keep the content there and you need to keep the retention rate.

Here's some frame work on social applications and how to monetize. How much it cost to create an application, drive users, how much for hosting costs and how to make it profitable. Right now most are overpaying for advertising, not adding basics like points or social interaction.

On ppc we have keywords and there's a limited word amount. On social media we have the name, age, location, friends. That's were we come back to friend rank. We can rank their friends, see who they interact with and tie that all together to create a relevant ad. It Improves user experience and improves ROI for advertisers. On Google content network you don't know where your as are showing but if you can say I want 16 year old girls who are interested in tennis and who play this Facebook application you're truly able to run a relevant ad.

Teen brands (gives Axe as an example) that attract younger demographics realize social media ppc is significantly better than keywords alone on Google. The teen signs up for a fan page or an application and interacts with the brand. Perhaps brands can add points to that and if someone invites their friends maybe they can get a free bottle of Axe or a t-shirt. If you drive the users to keep going, they're going to keep going.

You need analytics that are socially aware. You need to know who is seeing your ad and what they like. Most people think that all social networks are kids 14 - 25. Recently Facebook has more users over 24 than under 24 and MySpace as well. If you know who your users are you have a significant advantage to create relevant advertising. When you have all the data you've collected, why not make it relevant to that user?

Here's some basic examples of social media advertising. A forum for people to signup and talk about their sports experience. And Nike is putting all the ads into here. On the surf page they are talking about the surf gear. When you go to a sports site you might not see relevant ads from Google. Yes, you might get an ad for Nike shoes but you might also get one for sports trainers but that might not be relevant.

Next example is from Fuji Films, ZSpot Now, they have about 100,000 users. When you sign up here you talk about cameras. Those are relevant users, they like to take pictures and the best audience for Fuji. So if you have a socially aware campaign and promote a socially aware product, such as ZSpot Now, you're bound to have success.

Ad serving that is socially aware. Applications and  websites that are socially aware allow you to buy ads. Harrison's favorite feature is Hyper Targeting. There are people who are online all day updating their profile and you can target them based on the keywords in their profile. For instance you can ask for all girls that like Britney Spears who live in Topeka, Kansas and play basketball. It's targeting to such a point it's pretty unbelievable.

The ad serving networks are finally getting a grasp on this but there not quite there. The social networks have it down. Harrison thinks his ad network LeaderClicks has it down. There's a long list of ad serving networks that are in social media in the last 6 months. This is the future of ad serving.

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Comments

David,

Wow, so detailed. Did you sit down and transcribe Harrison's entire speech?

The part that he didn't have time to talk about was how the proprietary ad server works-- it takes advantage of the profile data which Facebook/Bebo/Myspace pass to applications, then dynamically inserts them into ads. This includes first name, profile picture, and a number of other fields. The result is not only a massive increase in CTR-- from 0.02% to sometimes north of 3%, but also an increase in conversion rate, too. This is due to the trust that comes from marketing through relationships. Users trust their friends who try a product or view an ad, which then leads to viral effects.

The rest of the ad server is standard fare-- frequency capping, the ability to serve text/image/flash creatives, eCPM optimization, scalability to 200MM imps a day, and so forth.

Dennis

Dennis,
I missed a few parts as they weren't clear without the slides. Pretty good presentation and some interesting stuff. No doubt this is relevant advertising and much needed. Will continue to watch you guys and see how you grow. Best wishes!

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