Why Facebook has a $10billion dollar valuation – Network Neighbors

Brands leveraging only demographic, geographic and psychographic information about a consumer is dead. This type of information is certainly powerful to gain insight into your consumer, but my belief is that this is only the tip of the proverbial ice berg.

While studying direct marketing at NYU in the late 90’s this information was the holy grail of marketing.  Today, it’s no longer the case.  As social media has become ubiquitous the manner in which people interact with each-other is now available.  This information is certainly more powerful, and more telling to a large brand regarding the consumers likes, dislikes and potential purchasing habits.

I’d argue that the more compelling information that’s available to a brand is who are Network Neighbors.  These network neighbors are consumers linked to a prior consumer. They adopt a service at a rate 3-5 times greater than baseline groups selected by the best practices of the firm’s marketing team. Analyzing the network allows the firm to acquire new customers who otherwise would have fallen through the cracks, because they would have not been identified based on traditional attributes. – Statistical models, built with geo demo and prior purchase data are significantly and substantially improved by including network information. More sophisticated network information allows the ranking of the network neighbors so as to permit the selection of small sets of individuals. with very high probabilities of adoption. As a traditional direct marketer within the Social Media world, this is very exciting.  This is why every brand needs to be engaging with their consumers in Social Media.

Top Online Predictions for 2009

 

Growth in mobile advertising 

Yes, it’s probably featured on every prediction list for the past several years, but ’09 is almost certain to see significant expansion in mobile advertising. Technology, increasing bandwidth and smart phone ubiquity have brought us to the point where engaging mobile campaigns are no longer just pipe dreams. Marketers in ’09 are likely to increasingly leverage direct response opportunities on mobile.

 

M&A – bargain hunters out on the prowl

I don’t think any economic commentators are expecting conditions to improve markedly in ’09. Fledgling businesses are going to struggle to get second or third round funding and many established businesses are going to see falling valuations. We should expect M&A activity as companies with good liquidity go bargain hunting.

 

Migration to more measurable channels

This one is happening now is certain to continue into ‘09. As marketing budgets get squeezed, money will continue to flow out of brand led channels and into direct response.

 

Ad network consolidation

A cursory glance up and down the aisles at industry trade shows is enough to highlight that there are a lot of ad networks out there chasing the same advertisers and knocking on the same publishers’ doors. With the softening display market and the general economic malaise, it’s likely we’ll see some consolidation in ‘09.

 

Privacy debate will continue to rage

The backwards and forwards between the various stakeholders looks set to continue into ’09. Over the course of next year, we’re likely to see greater consensus reached surrounding the issue of behavioral targeting and the correct rules of engagement.

 

Widgets / buttons / gadgets – call them what you will, they’ll continue to be big in ‘09

Brands want to reach customers beyond the confines of their websites and consumers want a customized online experience. And widgets are the glue in the middle. Expect continued growth in the widget space in ’09 and in particular with desktop implementations as consumers look to replicate the iPhone experience on their PCs.

 

 

Online Ads are Alive and Well

Despite our current financial crisis, US Internet ad revenue rose in the 3rd quarter of 2009 according to Yahoo Finance AP Writer Rachel Metz.

Metz goes on to say “The report from the Interactive Advertising Bureau and PricewaterhouseCoopers LLP said that online advertising revenue totaled almost $5.9 billion in the third quarter, up 11 percent from the same period last year. It marked a 2 percent rise from the second quarter.”

Seeing an increase regarding any economic activity these days is a good thing, but it’s certainly encouraging for the online world to see stories like this.  The manner in which online advertisers can performance (when a consumer clicks on ads) is a direct indicator of it’s success.  Other media doesn’t offer the ability for the advertiser to track ROI.  Online advertising is truly Direct Marketing on Steroids.

FINALLY – Good news!