• by Joe Mandese  @mp_joemandese, August 25, 2008

Interpublic has quietly struck a deal to begin utilizing a promising new online marketing service that could finally enable Madison Avenue to unleash the power of social networks on behalf of their clients' brands. The deal, which is being officially announced today, involves a partnership between Interpublic's Emerging Media Lab and SocialVibe, a company that provides incentives for members of social networks to interact and endorse consumer brands. The business--which has been in development for a couple of years--opened a public beta in May and already has begun quietly working with marketers ranging from Adobe to Coca-Cola Co. to Sprint, and now hopes to make a big push into the ranks of major advertising agencies. At the heart of SocialVibe's business model is a patented micro payment system that enables marketers to offer incentives--usually charitable donations to favored causes--directly to the members of social networks who promote their brands on their personal pages.

The system, which was conceived by SocialVibe Founder and President Joe Marchese, enables marketers to build relationships directly with individual users of social networks by making them offers that will create personal affinities for their brands. The offers can take the form of direct financial incentives, merchandise or so-called "schwag," or what Marchese says so far has proven most successful: charitable donations that build goodwill for all concerned.

"We've tried a lot of different approaches, but charitable donations seem to be the most effective because they allow people to tap into marketing budgets to benefit the causes and charities they want to support," says Marchese, who originally conceived SocialVibe's micro payment system as a way that marketers could pay social network users directly for endorsing their brands.

The idea was to tap the explosive but latent marketing power of social networks, and turn the legions of social media users into individual brand endorsers. Marchese still believes there are untapped commercial applications to the system that will allow marketers and their agencies to discover new business models that connect individual online users with brands, but he says the charitable donations have so far proven most effective because many social media users are socially conscious and want to support charitable causes. SocialVibe simply allows them to tap into lucrative marketing budgets to do so.

Some of the charities that have begun working with SocialVibe range from the World Wildlife Fund to Stand Up To Cancer, but one of Marchese's favorites is Charity Water, a bottled water brand that devotes a portion of its profits to improving the quality of drinking water in impoverished communities around the world. He likes it, he says, because it exemplifies the kind of direct, one-to-one benefit between a brand, a consumer and a cause that SocialVibe was conceived to facilitate. Go to the Charity Water page on SocialVibe.com and you'll see it festooned with the images of its active supporters along with their comments and reasons for promoting the brand.

Marchese says the Charity Water approach may not be right for every brand, but that there likely are an infinite number of similar benefits that SocialVibe can facilitate between an online consumer and a brand, and that the rest is up to the imagination and creative ingenuity of marketers and agencies.

"It's like we've been saying all along, 'The consumer is in control," says Mike Parker, director of digital strategy at Goodby, Silverstein & Partners, an agency that has begun working with SocialVibe to see how it can benefit its clients' brands. "Philosophically, if you really believe that, then you have to find ways of providing new ways of providing the assets of our brands that people want to be involved in."

Charitable donations and cause-related affinity may be one, but Parker says systems like SocialVibe also create a platform for marketers and agencies to create other affinities with social media users that would make them want to spread their brands to the other people they socialize with online. Another way, he says, may be to align a consumer brand that has a relatively limited brand affinity with another that is likely to have far more traction.

"Say you're Sprint. Not many people are going to put a Sprint logo or a Sprint product on their personal page, but what if the Spring brand has an asset that people want to be involved with on an ongoing basis, like the NFL, or NASCAR or music," he explains. "We can put three or four assets into Social Vibe and see how a NASCAR sponsorship performs or the NFL, or something that will connect with consumers in their social media world."

If that sounds a lot like sponsorship, Parker says it is--but that's only because it's the most obvious application. The unknown opportunity, he says, is if agencies and marketers can figure out ways of developing new kinds of brand assets that may lead consumers to support, endorse and spread the word for their brands.

That's largely what Interpublic appears interested in doing. While precise details of its deal with SocialVibe have not been disclosed, Interpublic said it would be "featuring" SocialVibe in its Emerging Media Lab, and that it would establish it as an "offering for our agency partners."

The deal is the most public support to date for SocialVibe, which had been stealthily developing its business model until it took its beta public in May.

In December 2007, it got bankrolled with a $4.2 million round of funding from venture capital firm Redpoint Ventures, after nearly a year of development by Marchese and his partner Kurt Johnson. Johnson, who is SocialVibe's chairman and CEO, was CEO of the Fastclick online advertising network, until he sold it to ValueClick in 2005 in a deal valued at $214 million.

Marchese--whose boyishly good looks make him look even younger than he is at 27--is something of a digital marketing wunderkind, who also has been a regular columnist on MediaPost's "Online Spin Board" for the past couple of years. He will be emcee of MediaPost's OMMA Global conference in New York in September, and has become one of the best networked young digital marketing Turks on Madison Avenue.

As persuasive as Marchese has been, and as sensible as SocialVibe's business model may seem, GS&P's Parker says it doesn't guarantee success.

"He's a smart kid for sure, and I think they have an interesting opportunity. And you can see a day down the road when they are able to connect brands with all these micro celebrities in social media. It could be the new industry model," he says, adding that it "still remains to be seen" whether SocialVibe can pull it off.

"The big question is that in order for a marketplace to work, you have to have assets that are available, and there has to be enough material so that when consumers come, they say, 'Well, there's a lot of stuff I want to be socially involved with.' And it will only work for our clients if there's enough traffic and interest from them. If 100 people come there and only then that say they are interested in NASCAR and Sprint, that's nice--but it's just not going to work for us."