Battelle put me over the top and inspired me to write this.
Today, he writes "PS: I Think There is A *Huge* Business in Social Advertising"
Sometimes web people are so isolated, it's a bit ridiculous. Update: That wasn't very nice. Or accurate. These are very sharp guys...
John Battelle (or Scott Rafer w/ Lookery or Seth Goldstein w/ Social Media) trying to predict how small business advertising will be affected by social networking is like 3 rocket scientists debating how to bake a cake.
These guys are so far removed from the practicality of running small local service based businesses. When's the last time any of you talked to a contractor, a restaurateur (in a small town) or a massage therapist about how they get new business?
Role of referrals: Nearly 60% of respondents said that more than half their business comes from customer referrals and “word-of-mouth,” while 30% said that “more than 75%” of their business is from referrals.
Do you really think happy customers of small businesses are going to start using facebook to make recommendations? Ahem. No.
This process might move online. But, there's no money in it. People will recommend the people they got great service and products from; the people they trust; the people that have proven they can deliver.
It might happen over a platform. It might happen on facebook. But, the transaction isn't going to be monetized.
Never before has an organization had such a lock on our attention like Google has. It'll never happen again either. Our attention is and always will be given to the people we trust. Ant it's not that monetizable. There will be no middleman.
That's why "Social advertising" is not and will not be a big business. Of course, automated behaviorially targeted advertising will be a big business. But, it's only an incrementally better solution than current ppc networks. And google, yahoo, msn will own that game. The barrier to entry is too high for an upstart ad network to beat them, even with a few nice targeting tricks.
Yes. Sponsored Content or "Conversational Marketing" will be a growth area too. But, not everyone is going to start a blog so that they can host sponsored conversations. And conversational is just that: it benefits the advertisers that join the conversation. Not the ones that pay the most $. It won't be brokered. It doesn't scale like an ad network does.
Most people will just send an email or talk to their friends when they need a recommendation. Maybe there'll be a site that can help them do it a little more efficiently. But, it's not going to be a billion dollar business.
Social media is free. Social Marketing will be close to free. Social advertising won't be a revolutionary new big business.
That is a working title for an eBook I am thinking about writing.
The secret to driving more traffic to your website is "engaging your clients, referal partners and prospects" in a dialog online, hosted [or atleast initiated] by you. It's like inviting your prospects into a room full of happy clients. Your clients will convert your prospects into clients for you. You just have to buy the virtual beer.
The problem is that most small businesses have no clue how to do this.
Catie has turned Free Publicity Day into a permanent networking tool. She recently interviewed Stephen and wrote up a nice review of what he does.
Everyone knows how phenomenally successful Ebay is, but what you may not know is that auctions are alive and well in the real world, not just the virtual world, and a real live auction with a real live auctioneer is one of the best ways to convert your assets to cash, quickly and with a minimum of effort.
If you have assets you need to sell, like business property, a house that won’t move, or belongings you no longer need, talk to Stephen Paulin, owner of Strategic Auctions Inc. He’s a friendly guy and like most successful business people, he’s passionate about what he does. He’s got more than 30 years of experience, yet he still gets excited when he talks about solving your problems by taking your assets and turning them back into cash.
Stephen loves all the angles, from marketing to attract the right buyers, to running the auction online if a world full of bidders is a good match for your property, to surprising you with how much cash he can get for your assets. Ask him about the recent online auction he ran to sell all the tools from a local high school’s auto and wood shops. Or the house that wouldn’t move after six months on the market that he sold in less than eight days.
And, talk to Stephen if you have an asset and you’d rather have cash.
Stephen's business is rockin and rollin. You can see all the recent auctions he's succesfully conducted on his newsletter.
Going to meet Dharmesh, Brian and Mark (Mark spoke here previously.) this evening to get a bit of behind the scenes tour of Hubspot, which combines website management, content management, blogging, site analytics, competitive SEO analysis, and lead capture/lead management into a nice tidily integrated internet marketing software as a service package for small businesses.
They also have a great internet marketing for small business focussed blog, free website analyzer, and a cool social business news site.
I'd say that they get this.
Calacanis has a post up about his human powered search startup, Mahalo. He ponders out loud what his biggest challenge will be:
So, the only issue for our business is really how wide we can go. Getting wide is our big challenge... and we're figuring it out every day.
In English, he means he wonders how he's going to get a lot of human edited search pages created.
However, I would think he should know exactly how much time and how much $ it is going to take to get there since he pays people to do it and they presumably have a pretty predictable output. Unless Jason is having a difficult time recruiting quality SERP makers, I don't know what he's asking. Or maybe he's wondering whether his backer$ will be patient enough while he creates them. Or maybe he's wondering how he'll get enough traffic to justify spending $15 to create a page that google and wikipedia can create and attract traffic-to at no cost to them.
I don't think the question is how wide they'll be able to go. It's how long is the runway?
I admire what Jason is doing, and especially his execution and ability to raise funds and promote. But, I wonder how he's going to drive significantly more traffic to Mahalo? SERPs don't get followings like blogs do. Traffic isn't just going to start pouring in like it did for him at Weblogsinc. What's the traffic [and revenue] generation plan, Jason?
Scott Karp just published a great definition of a media company:
They seek leverage by consolidating resources and talent to achieve economies of scale.
And I agree that is what has defined a "media business" in the past. But, not any more.
Ad networks (especially Federated Media) are certainly media companies. They don't really aggregate talent. All they aggregate is impressions and centralize ad sales. Technorati is a media company. All they consolidate (ie aggregate) is "blog posts". They have no "media talent" on board. Google is a media company. All they aggregate is ads and links to websites. No [traditional media] talent there.
So, what's the next step? Does there need to be any 'consolidated talent' to make a media company? Can "the advertisers" be the talent?
Don't they just need a publishing platform? Does there really need to be professionals producing content? Can't businesses create their own content? There are certainly "business blogs" out there. Many companies publish newsletters, as indicated by Constant Contact's IPO today.
But, information that these businesses publish tends to stand alone. These businesses don't benefit from reach that a media company provides. Most of these blogs and all of these newsletters only go to the respective business's contacts.
So, how can they reach more people like a media company can? How do they consolidate their talent to reach more people collectively?
Here's how... What happens when a group of businesses create their own content on a common publishing platform? Or what happens if small-business-generated content is aggregated onto one platform? What if community is added to it so that people can leave comments, meet others, interact at events, etc. What if a listing of the content is categorized and syndicated to other websites? What if it is educational or reference information filtered by trusted experts and the wisdom of the crowd?
It's the internet version of a chamber of commerce + local business publication. That's what happens.
Calacanis just made an attempt at definining web 3.0:
Web 3.0 is defined as the creation of high-quality content and services produced by gifted individuals using Web 2.0 technology as an enabling platform.
Whether we call it 3.0 or not, he has a great point. When EXPERTS use a platform to create high quality content, very interesting things happen. Given Jason's bias, I am sure he means paid "journalist" editorial types. But, I'd argue that true expertise, albeit possibly biased, comes from people that actually do things for a living.
But how do people stand out on a new web 3.0 community publishing platform? The people who put the most work into creating their content and fostering interaction around their content are the people that succeed with the new platform. They get more visibility, recognition, they get more inbound links, more search engine traffic, more vibrant conversations sparked by their content, they get more email subscribers, more leads... more business.
So, how does "consolidation" occurr in an SMB-generated media organizations? Aggregation, promotion and syndication is where it happens. Content (events, blog posts, news) is aggregated, so that it becomes a valuable news source. Then, individuals can start media organizations on top of the platform, create events, send their own newsletters promoting content generated by other businesses. They become the media. They deliver the information to the final audience. They aggregate, package and present commercial content to the right people at the right time. They serve the "reader" and the "businesses". Like this. Their role is to foster interaction.
You might think that this kind of collaboration among businesses is far off. But, if that's the case, you probably don't know small business very well. There are thousands of organizations made of small businesses that that self-assemble in order to help each other generate leads offline. (BNI is the prime example. We do it here, here and here.) They meet regularly, they make introductions, they attend events together, they keep their ears open for opportunities for each other, they pass referrals, they provide each other with advice, help each other find employees. They do it all together. Of course, there's bullshit and politics. But, it works. In fact, collaboration and networking is the lifeblood of most successful small businesses.
It'd make sense, when small businesses really catch on to the internet as a publishing and lead generation platform (to web 3.0), that they'd begin to collaborate and network online like they do offline. The hold up, I believe, is the lack of a publishing platform for small busineses that aggregates their content like a media organization aggregates content from their talent.