AdViking

The keynote interview of Facebook CEO Mark Zuckerberg at SXSW’08 by Sarah Lacy has all ready had plenty of coverage. Generally, the coverage has been about the supposed awfulness of the interview and the Geek revolution that took place but from listening to the interview, AdViking believes that many people missed some very interesting insights into Facebook and in particular the Facebook strategy around advertising.

One important point that Zuckerberg was at pains to get across is that Facebook is really just part of the macro-trend about bringing technology to bear to facilitate the ease of connectivity and communication between people.

Advertising

Within seconds of Lacy turning the conversation towards advertising, a punter in the crowd neatly summarised the majority of opinion by shouting out, “Beacon Sucks!”. To which Lacy responds by promising that we’ll get to that.

AdViking thought that the primary takeaway about the Facebook monetisation strategy is that it’s going to be an organic evolution that is inline with how people use the platform, both on the site and across the wider web. Zuckerberg also admitted that they announced the basic idea (Beacon) too early and believes that the solution isn’t going to be found in the next couple of years but actually over the next couple of decades.

AdViking would argue that Facebook needs to take the thinking a bit further and provide Users with empowerment tools to become nano-publishers. That is, if Facebook is making money off people’s use of the platform, then those that are keen to do so should be able to get involved in that marketplace.

Beacon, WTF*?

To this question, Zuckerberg shrugs his shoulders and agrees with the indictment. He then takes a step back and takes the opportunity to explain the vision behind Beacon, which can be summarised as:

Beacon was first attempt at trying to tap into a growing trend (very web2.0) that social media interaction is quickly moving away from monolithic sites (e.g.: Facebook) to a collection of social services (e.g.: TripIt, Dopplr, 30Boxes) across the wider web. That is, Beacon was hoped to be a collection point for the usage of social services with a tie into the Facebook ad system and then turn those actions into ads/endorsements.

Another point that AdViking found interesting was that the development of Beacon was done by the Platform team and not the Ad team.

In response to what went wrong, it all came down to communication and in particular about how users can tune the permissions.

Microsoft

With regards to the $15 billion valuation that was gained through the Microsoft deal, Zuckerberg said that others focus on the deals but at Facebook, they believe that to realise their vision they need to build revenue quickly and this was one way.

As to if Microsoft are happy, this was skirted around but jokes were flying about calling Ballmer to ask him.

Adviking’s takeaway is that Facebook views this deal as some easy cash and resources that allows them to focus on the big picture.

The above image was an interpretation of the keynote by graphic artist Sunni Brown.

* WTF - Was Lacy’s rather interesting way of putting a burning question from most people’s minds.

The story that Facebook UK lost 5% of users between Dec. 07 and Jan. 08 is a bit of old-rope now but AdViking has been on the road and wanted to come back around to this and also wanted to synch that with a recent report that shows the UK marketing decision makers are reticent to invest in advertising through social media.

Facebook is losing users!

The news that Facebook UK lost 5% of users is interesting for a couple of reasons (including that it’s buried in the coverage that MySpace lost the same amount of users for the same time period) but let’s see if the trend continues through the next couple of months, which is so nicely put by: Alex Burmaster, the Nielsen Online’s European Internet analyst

Just as one swallow doesn’t make a summer, so one month of falling audiences doesn’t spell the decline of Facebook or social networking,

Personally, AdViking would put some bets that the trend could be associated to some of the reasons Fuller mentions in his post about why he was quitting Facebook over on A Fuller View. This was mirrored with some reasons that the quality weekly UK magazine Grazia had to say about why they are bored of Facebook.

NB: I am an active FB user but have changed drastically my usage pattern the platform over the recent months and now use it for lifestyle enhancements (e.g.: Integration with 30 Boxes and Dopplr).

Marketers are saying no to Social Media advertising

More interesting and lost amongst this noise was that a poll published by TNS Media Intelligence/Cymfony shows that senior corporate marketing executives believe that social media in some form will be lasting, but in the UK only 18% of companies believe that by not spending on social media they are likely to fall behind competitors.

The poll, which was taken across France, North America and the UK, used the broad definition for Social Media, including: blogs, forums, social networking and video sites. You can get access to the summary of the findings by going to http://www.socialmediainbusiness.com/.

Some other interesting highlights:

• 0% thought it would impact purchasing intent
• 9.9% said they didn’t have sufficient budget to make forays (i.e.: spend isn’t an issue)
• 38% saw social media sites as a new advertising channel
• 49.3% believe social media should be monitored at exec level
• 0% thought social media would have little significance in 5 years

AdViking’s take is that if you narrowed the spectrum to look at just the obvious social networking sites (i.e.: Bebo, Facebook and MySpace) then these numbers would look drastically worse. The thing is today’s senior marketing exec isn’t really going to be savvy to the idea that the potential for this kind of advertising and so will probably be as wrong about Social Media as they were about Search advertising.  You can read AdViking’s nascent views on the importance of this new format in this comment on John Battelle’s Searchblog.

I know I work at FAST but FASTforward is much much bigger than what our company does and when you hear so many keynotes that are talking about the importance of the now of search and how it’s become the key to enterprise success, one can’t help and become enthused and in the end Get Religion about Search.

Below I provide some short summaries on the following topics:

• Vertical/Local/Ad Networks
• Keynotes
• Microsoft acquisition of FAST

For further reading, the FASTforward blog has a consolidated and rich number of posts for more thoughts.

The validation of Vertical/Local/indy AdNetworks:

Elaborating on the stats that IDC provided in early 07 that 70% of searches in the US happen outside of GYM, Sue Feldman provided some stats that vertical sites, including those focused on Local, will have almost 3bill search queries in 2012, while Google will only have 250 million and in fact emerging AdNetworks will have more traffic than Google.

This is very exciting news and one that AdViking has been visioning for approximately 2.5 years.

To further validate this, there was a Local Search session where there were four customers of FAST (and more specifically of AdMomentum) who had exciting opportunities for each of their markets. What was exciting what that the customers were globally spread (Arab region, Chile, Germany and Ireland) and more so there were more customers in the audience doing the same thing in their markets.

Keynotes:

There were so many great talks from speakers like:

• Andrew P. McAfee, Associate Professor, Harvard Business School
• Bjørn Olstad, Chief Technology Officer, FAST
• Don Tapscott, Chief Executive, New Paradigm, the Business Innovation Company
• John Hagel, Author, Consultant, & Co-Chair, Deloitte & Touche Silicon Valley Research Lab
• Safa Rashtchy, Financial Analyst, Entrepreneur, & Past Managing Director, Global Internet Media, Piper Jaffray and Company
• Susan Feldman, Research Vice President, Content Technologies Group, IDC

From doing a quick straw poll people said that the presentations by Tapscott and Feldman were highlight keynotes.

For me, a personal highlight was a fascinating panel with Olsted, Hagel and Rashtchy. It was so deep that I couldn’t take it in to repeat anything worthwhile at this point. A video should be available soon, so once that is, I’ll be back by more. One that that did stick was in response to the question “What is the last thing you changed you mind about?”; Olsted responded without missing a beat, “Microsoft!”

Microsoft:

Microsoft, through Jared Spataro, gave a measured insight into why MSFT is acquiring FAST. He started the presentation with some anecdotes, including that a couple of days after the news of the offer was made, a NASCAR team approached them asking if they could actually have FAST sponsor their team!

The quick summary can be clustered under:

1. What’s in it for Microsoft?
2. What’s in it for FAST?
3. What’s in it for Customers?

What’s in it for Microsoft?

MSFT has figured it out that the user experience of the future is going to be shaped by search. To that end that had begun their own initiatives and taking Search seriously, but on the back of a visit to Redmond by the CTO and CEO of FAST, they realised that by purchasing FAST they would be able to take an aggressive leap forward.

What’s in it for FAST?

FAST has visionary innovations, passionate people and best-in-class technologies that with the power of Microsoft will be able to bring all of that to bear in the world and therefore the technologies and innovations will be available to all.

What’s in it for Customers?

For this cluster, Spataro, elaborated on their strategy for Search and in particular spent time focusing on the Enterprise and how Sharepoint is appearing to be a wild shooting star (approx $1billion in revenues for 08). The key takeaway is that customers will get all that they are use to from FAST but backed by a trusted infrastructure vendor. I’m sure more details will be forthcoming at the Microsoft SharePoint Conference 2008

Two interesting moves in the online ad space to note.

1. The ISPs are waking up and trying to get in on the advertising pie - check out - ISPs Get into the Ad Game - over on Screenwerk.
2. Google has started another and probably wider push on video ads for AdSense. Check SEL and on the AdSense official blog.