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Facebook Plans to Allow Brands to Sponsor Stories from Users – Without Asking

Facebook is getting more buzz this week with a new advertising program that will enable brands to sponsor user actions.  For example, a Facebook user’s “likes,” his page posts, and his check-ins via Facebook Places could all become content that brands can sponsor.  In simplest terms, brand can pay (based on a pay-per-click or pay-per-impression model) to boost that content up to special placement on the right side of the screen where Facebook ads typically appear.

For brands, Facebook Sponsored Stories is a great opportunity.  Giving prominent placement on screen to user actions that support a brand draws attention to what can be perceived as a customer endorsement.  Research shows that conversations and endorsements of brands on social networks are trusted more than ads, so sponsored stories seem like a perfect match for brands.

However, Facebook users are likely to not feel the same way, although Facebook representatives are quick to point out that sponsored stories will only appear to people that the user has identified as being able to see those types of updates within his Facebook account settings.  There is currently no reported way for Facebook users to opt-out of the new sponsored stories initiative.

According to BrandWeek, both Coca-Cola and Starbucks are signed on to roll out Facebook Sponsored Stories campaigns, and other brands are sure to follow.

Let’s face it, sponsored posts are likely to be more effective for brands on a social network like Facebook than display or text ads are.  It’s true that people notice and respond to people they know and trust over brand messages, and research report after research report supports that.  The problem would come if this level of intrusiveness (i.e., republishing people’s content and conversations without their permission) will be considered acceptable or not to Facebook users.  If users don’t respond well to it, there is the risk that they’ll stop talking about brands altogether.  That’s the type of negative backlash that could really damage a brand’s social media and content marketing efforts.

How do you feel about Facebook Sponsored Stories from the brand’s perspective?  How about from the Facebook user’s perspective?  Leave a comment and share your thoughts.

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Online Communities Trump Facebook to Connect with Women

New research from Burke Research and iVillage (a website and online community for women owned by NBC Universal) reports that women, an audience coveted by many brands, prefer niche community websites over broad social networking sites like Facebook.  This finding presents an interesting opportunity for brands to better connect with women, gain their trust, and build relationships with them.

As eMarketer reports, 51% of women surveyed during this study cited that online communities like iVillage, BabyCenter and CafeMom are places they “trust for information on brands and products.”  Similarly, 47% of respondents reported that these online communities have “the right people for me to seek advice on brands and products.”  These percentages were double or triple the percentage of respondents who believed the same things about social networks.

Equally interesting were the respondents’ answers when asked what online communities and forums are best for and what social networks are best for.  The results follow.

Online Communities and Forums are Best For:

  1. Finding out about new products = 51%
  2. Helping me make a purchase decision = 47%
  3. Entertaining me = 31%
  4. Keeping up with friends and family = 10%

Social Networks are Best For:

  1. Keeping up with friends and family = 74%
  2. Entertaining me = 57%
  3. Finding out about new products = 21%
  4. Helping me make a purchase decision = 16%

As you can see from the results above, women view niche online communities and forums very differently from social networks, and they visit and participate in online communities and forums for very different reasons than they visit and participate on social networks.  In fact, their reasons for visiting and using online communities and forums are almost exactly the opposite of the reasons why they use social networks.

Bottom-line, if you’re not searching for online communities and forums (particularly niche online communities and forums related to your products and services) where your brand’s target female audience spends time, you’re missing a significant opportunity to raise brand awareness, develop relationships and trust, build brand loyalists and advocates, and grow your brand and business.  In other words, online communities and forums are where women are already talking about products, brands and services.  They’re engaged and open to learning on these sites.  As long as you provide useful, meaningful information and avoid self-promotion and marketing messages, you can indirectly build your brand on these valuable niche sites.

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Toyota Takes Title as Biggest Carmaker in 2010

Despite a series of Toyota recalls in the United States in 2009 and 2010 that damaged the Toyota brand (a brand which had long been associated with quality and reliability), Toyota hung on to take the top spot as the world’s largest auto manufacturer of 2010.

However, Toyota spokesman Paul Nolasco claims in an article published on the BBC website that selling the most cars in the world is not as important to the company as boosting profits and being number one in customers’ minds in terms of service and satisfaction.

Quality, service and satisfaction have certainly been Toyota brand promises around the world, and despite the Toyota recalls, the brand still owns the word quality in consumers’ minds.  There is simply so much trust and belief in the brand from its loyal followers that even recalls couldn’t keep this brand down.  You can’t buy that kind of brand equity — the kind that can keep a brand at the top despite problems that would destroy another brand.

However, as the BBC reports, Toyota sales are still down in the United States in comparison to previous years, and General Motors is pushing hard in the United States and around the world to regain the title of biggest car maker, which it held for 80 years before relinquishing it to Toyota in 2008.  All eyes are on Asia, specifically China, where General Motors is having great success.  2010 marked the first year that General Motors sold more cars in China than in the United States.

There is a saying that tells us, “the more things change, the more they stay the same.”  I can’t help but think of that phrase as I watch the players in the auto manufacturers’ game of chess move around the board.  Who will be the short-term winner?  Who will be the long-term winner?  Only time will tell.

What do you think?  Leave a comment and share your predictions for these brands.

Image: Flickr

Research Shows Celebrities in Ads Don’t Make a Difference

Let me preface this this post by stating that I am not an advocate of paying celebrities large sums to appear in ads.  I’m not saying that it can’t be effective, but it’s very rare that a celebrity connection to a brand seems to deliver real results.  Of course, there are exceptions (e.g., Michael Jordan and Nike), but those are exactly that — exceptions, not the rule.

A new study by Ace Metrix reveals that celebrities in ads are not effective and are often a waste of money.  The chart below from the Ace Metrix report, Celebrity Endorsements: Exposing a Myth of Advertising Effectiveness, shows that celebrity ads more often brought a negative performance lift when compared to non-celebrity ads.

The report was based on a study of every nationally televised ad during the first 11 months of 2010 and included extensive efforts to present fair and balanced statistical analysis of the results.  The study found that regardless of age or gender, ads without celebrities performed better than ads with celebrities.

Most consumers cited reasons they found celebrity ads to be ineffective as: being confused by what product the celebrity was endorsing and simply not liking the celebrity in the ad.

Ace Metrix concludes from its findings that consumers today are not as easily influenced as they once were.  With quick access to massive amounts of information on the Internet, they want equally quick and instantly relevant messages in ads.  Celebrities affect them far less than relevant messages.

I agree with the Ace Metrix conclusions, and it’s nice to see some research support what many marketers, myself included, have believed for a long time — a celebrity might help raise awareness of an ad and get people talking about that ad or celebrity, but it doesn’t guarantee positive results for the brand, company, or product.  A celebrity can only help if the message is good, the celebrity is well-liked by the target audience, and the celebrity matches the brand, company, and product, he or she is endorsing.  Disparity in any of those areas equates to a waste of money.

What do you think?  Leave a comment and share your thoughts about celebrity endorsements and the value of paying celebrities to appear in ads.

CMOs Believe Comments are Most Important Corporate Blog Success Factor

According to research by Blog2Print of Fortune 1000 companies, approximately 1 in 4 companies have corporate blogs.

Respondents revealed that employees within the marketing department are usually charged with writing blog content followed by social media or blogging professionals, but the CEO typically determined the tone used in the blog.  Interestingly, when CMOs in the study were asked what makes a great corporate blog, 46% cited an engaged community who publishes comments on blog posts as the number one factor.  And when asked why they launched a corporate blog for their companies, 50% of surveyed CMOs stated “it’s the cost of doing business today.”

And therein lies the problem. The above findings from the Blog2Print study explain quite clearly why most corporations aren’t getting the results they want from social media marketing and content marketing efforts.

It’s important to remember that the best social media marketing strategies include a variety of branded online destinations where consumers can self-select how they want to engage with a brand.  There is more to social media marketing success than generating a lot of blog comments.  Of course, building relationships should always be one of the top priorities of any social media marketing plan, but blog comments represent a very small part of what makes a successful company blog in terms of building a brand and a business.

Social media marketing efforts cannot operate in silos.  The best social media marketing strategy is a fully integrated strategy, not only between social media initiatives but also with traditional media efforts.

Bottom-line, don’t be tempted to judge your company blog on comments first.  It’s very possible that your audience simply prefers to discuss your content on Twitter, on Facebook, or on another online destination.  The trick is connecting with those people where they already spend time and slowly bringing them back to your own branded online destinations to consume more of your content and deepen relationships with you.  Blogs don’t live on comments alone.  Don’t short-change the potential of your blog to grow and the value it delivers to consumers if you’re not getting hundreds of comments each day.

What do you think are the most important factors that define a great corporate blog?  Leave a comment and share your thoughts.

You can read more about the Blog2Print study on eMarketer.

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Facebook and LinkedIn Going Public Sooner Rather than Later

Two insightful articles from Reuters this week paint an interesting picture for the top social networking sites.  As the articles explain, LinkedIn could go public in 2011 and Facebook in 2012.

Rumors of the planned IPO for LinkedIn in 2011 come from sources familiar with the company’s recent efforts in securing financial underwriters.  With 85 million users, LinkedIn is the most popular social networking site for business people and career-minded individuals.  It’s a focused brand with a great deal of value that is distinctly different from the broader social networking brand of Facebook that boasts over 350 million users.

It was as early as September 2010 when Facebook insiders leaked news of a possible public offering in 2012, but that timeline might speed up if regulators find reasons to require an earlier IPO.

Of course, with a new breed of dot-com IPOs comes reminders of the dot-com bust that happened just over a decade ago.  Will the huge investments and valuations for a brand like Facebook help or hinder other dot-com IPOs?  Is Facebook really worth the $1.5 billion in investments (at $2 million a piece) Goldman Sachs expects to raise in the next year?  Facebook’s valuation is $50 billion.  Is that realistic or is it an inflated number that sets expectations for subsequent IPOs that are completely unrealistic and unsustainable?

As Reuters writer Alexei Oreskovic explains,

“For Facebook, which Bloomberg and others have estimated to have generated $2 billion in revenue last year, the $50 billion valuation means investors have awarded it a multiple of 25 times sales, compared with a nine-times multiple for Google and Amazon.com’s 2.5-times multiple.  In the first nine months of 2010, Facebook generated $1.2 billion in revenue and earned $355 million in net income, according to unaudited financial details released by Goldman to its private wealth clients. Facebook generates $4 per user, compared with Google’s $24 per user and Yahoo’s $8 per user, according to a recent report by JPMorgan.”

Facebook’s value is being marketed as potential over hard numbers.  Since Facebook surpassed Google as the most visited website and the site displaying the most ads, the value of Facebook might just be at the beginning.  Or is it?  Only time will tell.

What do you think?  Are inflated valuations appropriate for dot-com brands like Facebook?  Leave a comment and share your thoughts.

Image: Stock.xchng