Companies are going to need brand meaning as told by a person that can be trusted. Steve Jobs is an easy example, but, in reality, all but one company don’t have Steve Jobs and need to understand how to create a role for a trusted communicator for the business. Having one personality will be hard enough, but scaling that role into more than one person will get even more complex. In fact, Google has done exactly that by allowing multiple people to be the voice boxes for the company exemplifies how the activity generators can directly communicate with their target audiences. To be sure, Google has a more formalized process for how employees are to communicate on their own.

Organizations have built traditional infrastructure around communicating outside the company in a polished way for a reason: the message is created by professional creative folks, approved by management, tested with consumers and launched in a controlled way.

Companies turning to employee talent for communications have benefits and risks. The benefits are:

• Speed of interaction between the line managers and consumers and with it discovery of more problems/solutions,
• Increased lead user identification, and
• A higher rate of communications.

The risks can create real reasons to question implementation:

• Loss of senior management control over message content and timing,
• Increase of employee talent awareness within a company by outsiders, and
• More visibility to vision, commitments and failures after the fact.

These risks are real and leading brand driven companies have succeeded by building a product driven brand based on less personalized, indirect communications (e.g. TV and radio). As blogging and social networking take hold, how many layers of communications infrastructure (=PR, agencies) will be needed go-forward? Tools to empower communications will definitely continue to roll out to meet this area much like Salesforce.com did for the sales process in many companies over the past five years.

Background
A meme recently occurred on the frustrations of web metrics tracking. I personally found it quite interesting in that these frustrations occurred before: retail POS tracking. Even more compelling in its parrallel is the fact that one of the leading players in the web tracking industry, Magid Abraham of comScore, was one of the leaders of the retail POS industry, IRI. This train of thought provides insight on how widgets should be monetized by social networks using a parallel to retailer best practices: Category Management.

During the 1980’s and 1990’s, retailers grew more competitive by expanding geographic reach and then squeezing costs out of supply chains. As a result, the winning retailers grew efficient and stayed profitable by using four key elements:
1. Standardization of store fixtures, field operational practices and store selection/offering.
2. Nationalization of branding and leveraging of operational components including purchasing and back-room elements.
3. Development of performance metrics where leading players could leverage their data and consumer knowledge into better and faster decisions (=powerful got more powerful, the small had to develop strong niche positions)
4. Mass customization became possible as large, national retailers could now leverage operational efficiencies and large pools of proprietary information to deliver better selection to subsets of stores under a national umbrella

Moving into Web Metrics
The new retail space is social and viral – Facebook, last.fm, MySpace, Technorati, Netvibes, leading blogs. Unlike retailers, the amount of available space is limitless, but the space “above the fold” at key leading networks is limited, and will benefit from assessing operational efficiency metrics in managing space.

For example:

Even a leading website, like TechCrunch, needs to balance ads v. content delivery. Based on an initial measure of ads v. content above the fold, TechCrunch current has roughly 55% of its page containing ads (see red blocks noting ad space). This isn’t a dig against TechCrunch specifically, clearly the demand for ads on the blog are high enough and users aren’t complaining about the lack of content or difficulty reaching it.

Isn’t there more to TechCrunch than a one-way push of blogger opinion and advertisements combined with a second push back of responses by readers? The addition of Forums slightly changes the TechCrunch experience, but beyond some community interaction, a large audience of invested people seem interested in more, but what? Previously, I covered thoughts on how social communities need to focus on industries they serve over ads they should run.

User Interface Realization
Jakob Nielsen’s Alertbox notes screen size for about 60% of all monitors is 1024×768. While this size will change over time, a web page “above the fold” will continue to have limitations.

Result
A web page has limited primary web space beyond the social elements. Fred Wilson astutely suggests that he would like to virally receive and give purchase suggestions of all kinds. Facebook has developed its API to begin to deliver on that promise. While Facebook has a strong social network, it will have to assess how its widget platform becomes an profitable venture, much in the way WalMart leveraged the “store of the community” concept by not reducing or restricting choice, but expanding it to the limits of profitable choice and efficiency.

Shelf space above the fold is limited and a standardized platform (of widgets) allows users to customize uniquely through use of host-approved API programs. While customization rules, space will still matter and players along the social network value chain will need to develop a new set of compensation and performance metrics. Jeremy Liew has taken a crack at assessing the four key metrics of performance for widgets (=feels a lot like the security or cell phone business). While valuing an individual widget is important, the means for a social network to assess its value is also important for players like Facebook as well.

Web Performance Metrics for Social Networks
Many retailer metrics used in category management can apply into the new economy, including:
* Brand enhancements – not directly for profit, but for image and user experience
* Revenues/profits per square pixel area
* Placement optimization (A, B, C)
* Variety within a category v. across categories
* Loyalty programs to grow user affinity

Ning recently took a full year to build its platform of social networking turnkey solutions which demonstrates that even a well funded team requires time to develop a strong set of tools. While web platforms are becoming more scalable and cost less, user effort is still required to customize the experience to a specific community niche (just like a retailer needs to focus product selection and store layout for its consumers). Social networks, like retailers before them, will have a similar opportunity to focus on valuable users and how to ensure key segments continue to be rewarded over time.

Concluding
Savvy brands and companies investing into 3rd party hosted communities and portals have the potential to create value for sizable and loyal audiences. These investments will require retailer-like emphasis on customer loyalty, content variety/depth and segment profitability. User engagement offers as an added intangible benefit of faster and more accurate feedback for those companies that can effectively and credibly manage this medium

Contextual marketing has no page in Wikipedia, funny isn’t it? Funny in the sense that contextual marketing is at the core of Google’s AdSense platform. Google has redefined, and will continue to drive, efficiency and metrics into the advertising arena moving its influence from search to radio and to TV. While efficient advertising continually focuses on “the” desired target audience, advertisers will begin to turn the question from efficiency and effectiveness metrics in ad delivery (=push) to determining deep ad-sponsored relevance.

Google’s Actions

In fact, Google itself has blazed a trail doing exactly that, just this week. Google’s long tail user base is entrenched in blogging, video, and online publishing. The Google acquisition of Feedburner has strategic and financial rationale from an ad delivery standpoint, but its decision to make Feedburner a free tool shows another intent: increased relevancy to its core user base. Feedburner is part of the Google brand, and is now part of the Google ad-network experience. User advertising relevance is going to take on a whole new world well beyond the mere “push” attitude that exists in the current market definition, inclusive of most contextual ads.

With so much to be said about the $ size of the advertising arena, a contrarian opinion is to seek out advertising relevance covering sponsored activities, and not ad supported ones. Sure, in a way this can include things like in-game advertising, but in actuality, it is far more than that.

Advertising relevance in a world full of sales and brand messages will need to shift from ‘telling the consumer information’ to ‘providing the consumer with the tools of discovery’. These tools of discovery lead to the following framework for brand relevant advertising experiences:
1. Educational and beginner advisory content;
2. Customizable and configurable experiential software or venues;
3. Social elements for publicity, critique, guidance and/or networking and perhaps
4. Means for the user and host to profit.

The above four elements are technology agnostic as they could easily be in a store as online.

Businesses spend a wide range up to 30% of their sales on marketing, awareness, brand recall and promotion. For many businesses, this budget is well into the millions, or hundreds of millions annually. During the past 3 years, the costs of developing online technologies has dropped dramatically. With FOSS, versions of Digg and eBay can be downloaded for free and customized for a few thousand dollars into a niche social network. As a result, ad spots on the ever growing impression blocks stay very cheap, and inventory will continue to be hard to sell. Content will continue to explode, and choices on where to place ads will continue to grow in complexity.

Google and Yahoo benefit from complexity in the online ad marketplace. First, capturing and retaining cached content is a growing barrier for Ask.com, AOL, Yahoo and Microsoft. Second, the growing number of long tail publishers, relevant ones, makes individual selection of online publishers less possible each month. While TV and radio may be “all or nothing” shot guns with a difficult set of metrics to verify payback, online advertising’s inefficiencies are click farmers and brand connections to extremely poor quality publishers.

An Escape

Thinking differently, businesses should consider doing as Google does, . Google’s purchase of FeedBurner and the free-ware decision will foster loyalty and increased usage. Seth Godin astutely noted the same with Google Analytics. Analytics is not for boosting egos by showing big viewing statics, it is for attaining measurable and profitable results.

What about contextual meaning? I started on this topic and now I’ll come back to it. With the arrival of low cost open source technology and communities of interested people looking to get engaged (=buzz word), creating a move into this experiential world to drive business should be considered as an alternative to traditional and interactive marketing. Caution, this should be done in a credible way by the right players in the value chain. For example, how will bloggers feel about free Pro Stats from Google? I know how I feel, happy (thanks, Google, seriously).

Facebook’s API isn’t All That

Honestly, Facebook is a great networking tool. Its move into the lives of lots of people is having an impact. Many people, college kids and professionals, now have a new home that is an open market with guard rails. Very cool. It will be a place where users can push messages, but will Facebook create a world where people can learn, create and share?

Facebook’s widgets are billboards that allow users to have 1-way push of messages (=music preferences, videos, etc.), push of products (=Amazon, Gap, etc.), push of blogs and other info. As a result, “profitable” Facebook users will be ones that view the platform as a means to push messages to monetize it (more on this in another post). Do you have friends that sell to you? I don’t mean refer you to things, but want to make money off of you. As a note, I’m no fan of a world of being a “referral friend”, where my friend makes money on that deal.

Looking to Education + Customization + Sharing

Gary V. at the Wine Library has gotten some buzz for a story worth digging into, deeply. Understand that case study, apply it to your industry, win.

Wrap Up

Contextual marketing should be defined as the fusion of education, customization and sharing. The buying or creating of website portals that do all three of those things to the right audiences will be where web 2.0 gets monetized, and it won’t be because those websites had great advertising revenues.