When it comes to marketing to consumers, many big advertisers have already made their bed. Now, in a departure from traditional advertising and promotions, Swedish home furnishings giant Ikea is asking consumers to make theirs. In a promotion that kicks off this morning, Ikea has turned to a new kind of consumer-generated video network that is designed to motivate consumers to interact with and create videos based on their brands. Unlike others who are treating user-generated content as advertising, PR or buzz marketing, the Ikea campaign is based on a very old marketing model: consumer promotion. The promotion, which is being hosted and managed by Shycast, any early stage company that is going public today with the Ikea campaign, is essentially a contest that offers $5,000 in cash to the user who creates the best online video on making a bed. Actually, the contest asks consumers to "break the rules" of bed-making. "We're looking for bed-making maniacs who aren't worried about what Mom says," reads Shycast's contest promotion. "If you mix and match sheets, have a special blankie for the Shih-tzu, or the craziest of quilts this contest is for you." As of early this morning, moments after the campaign went live, Shycast had three video posts: One from Bill showing a bed "making itself; one from Steph, "making my bed;" and one from Robert J. Moore, asking whether, "you can see me" in his bed. The hope of Ikea and its agencies is that the campaign will prove to be more than just a test bed, and that it will catch on like wildfire, tapping a new undercurrent of competition in the user-generated video space. "Ikea has a high degree of customer fanaticism. They're a customer brand. Really, what they want beyond that is to get an eye on their real world customers that are engaged and interested in their brand," says Drew Peloso, a founder of Shycast, which is also working with other big consumer marketers including Unilever to scale similar contests and promotions based on user-generated videos. In his wildest imagination, Peloso, a veteran of other social media ventures, says he can foresee these users becoming quasi celebrity spokesman for the brands they are promoting. "They're talking about customers doing press tours and treating them like endorsers, because they have ideas that the media would like to hear," he says. Shycast is one of the latest entries into what is emerging as a gold rush of networks seeking to capitalize on social media, and especially user-generated content, on behalf of brand marketers. The schemes and business models vary, but their essence is the same: Find a way to harness the groundswell of the new Web 2.0 marketplace and figure out how to tap into big marketing budgets. But Shycast does differ slightly from other forays in one significant way. Instead of going after traditional advertising, PR, direct response, or online marketing budgets, it is targeting promotional budgets, an area of marketing that typically has been relegated to the coupon and sweepstakes industry. "What we are is a framework for a brand to execute contests and promotions in an environment that is safe and secure," boasts Peloso. "They work with their agencies to come up with the great ideas. And we do all the heavy work to manage the contests and fulfillment." It's an interesting strategy, because most big media companies ignore promotional spending. During the 1980s when markers began upping their promotion budgets due mainly to the rise in so-called "trade" promotions, and it looked like promotional budgets were beginning to cannibalize on traditional advertising, most big media companies developed promotional marketing units to tap into the craze. But in recent years, traditional media outlets have backed away from the strategy. While plenty of integrated media deals have a promotional component, they generally are not earmarked against promotional budgets. That may help explain why promotional spending has been experiencing only modest growth in recent years. According to Veronis Suhler Stevenson's 2006 Communications Industry Report, consumer promotion spending in the U.S. rose only 4.0% to $44.47 billion last year. While that is a sizeable chunk of marketing budgets, it nonetheless is dwarfed in comparison to a much bigger and faster growing consumer advertising business. According to VSS, advertising grew 6.4% last year to $210.29 billion. But Peloso expects that relationship to change as the Web creates new, more sophisticated and far more effective ways of harnessing consumer promotions. It's a contra strategy. Other video networks have launched to tap into the user video experience, but they are focusing in different ways. ExpoTV was one of the earliest, but instead of focusing on traditional advertising, or even promotional spending, the fledgling video network has taken a page out of the direct marketing world, creating the online equivalent of infomercials and video product demonstrations. It bills itself as a "new social shopping destination," where other consumers are the sales force. Others are leveraging the power of contests with the emerging video marketplace. ReacTV, the interactive TV channel launched by Florida real estate tycoon Frank Maggio, utilizes contests to draw eyeballs to and force consumers to interact with the channel's advertisers. ReacTV went live on cable and on broadband earlier this year and currently programs two hours of prime-time programming on cable TV in Tampa Bay and four hours of prime-time on the Web. It plans to announce it second major cable operator deal next week, and it currently is not charging advertisers who use the channel during its "beta" roll out. While the business models vary slightly, the real growth of the burgeoning consumer video marketplace will rely on how much and how fast these networks can tap into their social communities. Says Peloso, "Our phase two plans are about a very broad and deep distribution network through social media, but we're not fully ready to paint the picture."
In an effort to help brand clients better understand the blogosphere, Ogilvy North America has enlisted the services of blog-tracking company Technorati. "We believe the blogosphere can have a considerable impact on brand health," Carla Hendra, co-CEO of Ogilvy North America, a WPP Group agency. She said that Technorati will aggregate blog content relevant to Ogilvy clients, and then will work with Ogilvy's senior creative directors to integrate existing word-of-mouth into campaigns. The move marks the latest example of ad agencies forging deals aimed at connecting with social media. Last summer, for instance, Interpublic Group purchased a stake in social networking site Facebook. Publicis Groupe's Denuo also struck a deal with user-generated ad platform ViTrue Inc. to enable marketers to bring social networking to advertising and marketing initiatives. For the Ogilvy partnership, Technorati will make use of its newly developed "Conversational Marketing System," which helps clients build advertising, destination Web sites and communities of interest that incorporate and link to blog posts around relevant issues. Technorati's services attempt to incorporate all digital media--including blogs, vlogs, videos, and photos--into brand building. "The benefit of social media is that it allows brands to build a more authentic, participatory relationship with its audience than was possible in the mass media era," said Peter Hirshberg, chairman and chief marketing officer at Technorati. Ogilvy has already experimented in the word-of-mouth field, using blogs for such clients as Cisco, IBM and SAP. "Technorati will help us understand what is going on in the blogosphere, which will be tremendously useful to our brand," said Marianne Samenko, director of worldwide brand communications, and consumer digital group vice president for Kodak. According to Hendra, Ogilvy will not use Technorati's services in the area of public relations or crisis management. Ogilvy Public Relations has its own "digital influence group" for such matters, she said.
YouTube this weekend said it was considering running pre-roll ads, but parent company Google Tuesday again disavowed such ads. "We don't believe in pre-rolls," said Penry Price, director of North American sales for Google, at an industry conference in New York. He said Google is currently testing other methods of serving video ads, including postroll ads and interstitials, but hasn't yet settled on a monetization scheme for YouTube. "We have a long way to go in video," he said at the AlwaysOn Media conference. YouTube co-founder Chad Hurley said this weekend that the company intends to launch a new monetization system that will include sharing revenue with contributors. YouTube has not publicly stated that it plans to add pre-roll ads to videos. But in a BBC interview after announcing YouTube's plan to start paying video contributors, Hurley said the site may begin running three-second spots before videos. Price was echoing comments made earlier in the panel by Curt Hecht, executive vice president and chief digital officer for GM/Planworks. Hecht, who has previously criticized pre-roll ads, asserted that the pre-roll model "just doesn't cut it." "It's not really helping us get the experience out there," he said. "It's an interruptive model." But Brian Quinn, vice president of sales and marketing for Dow Jones Online, said marketers continue to buy pre-roll. "The demand is there from the advertisers," he said. Quinn added that the post-roll format has major problems as well. "We'll put your 30 or 60 back there, but I don't know if anyone's going to watch it," he said.
WPP Group said Tuesday it has taken a 2.5% stake in mobile search and advertising firm JumpTap. Through the investment, WPP will join with JumpTap to develop new techniques for targeting mobile users and case studies for brands planning mobile campaigns. Founded in 2004, JumpTap provides wireless carriers with mobile search and keyword-based advertising. It offers direct-response text ads and banners as well as ad performance data. Backed by $43 million in venture capital, JumpTap supplies white-label mobile search to eight U.S. and European carriers including Alltel Wireless and Virgin Mobile. JumpTap competes mainly with Medio in providing white-label mobile search. But the company faces a growing threat from the expansion of Google, Yahoo and MSN into mobile search. Sprint, for example, recently signed a deal with MSN to power search on the carrier's wireless portal. Some carriers have been wary of partnering with the Internet giants for search because of concerns about their own brands being overshadowed. For WPP, the deal gives the ad holding company a means of helping to shape the development of mobile advertising. "Our clients want to understand how to use mobile devices as an effective channel to reach and communicate with customers," said Mark Read, CEO of WPP Digital, in a prepared statement. The move highlights the growing interest major ad agencies are taking in mobile advertising, predicted to double this year to more than $878 million, according to market research firm eMarketer. "Big agencies recognize that this is going to be an important marketing medium eventually," said Greg Sterling, principal with Sterling Marketing Intelligence. Other agency investments in emerging media include WPP's backing of Spot Runner, which has created a Web-based system for planning and buying TV advertising, and Publicis Groupe's stakes in broadband video company Brightcove and user-created ad platform ViTrue.
Aiming to appeal to a broader consumer audience, Elizabeth Spiers is preparing to launch several new blogs in upcoming months, including a site dedicated to organic living. "It's more mass market than our existing sites," said Spiers, of the upcoming blog. The new site will join four other Dead Horse properties: Dealbreaker.com, launched last June and targeted at the financial industry, AboveTheLaw.com for legal types, SuperMogul.com for "C-suite" executives, and the most recent addition, Fashionista, for fashion-forward consumers with plenty of money to spend. Spiers, who first came to fame in the blogosphere as founding editor of Gawker, said the organic living blog will focus on "anything to do with organic lifestyles--mostly eco-friendly design, organic cooking, and wellness, in that order." Dead Horse plans to hire freelancers to produce the content--a point of difference from Fashionista, which has a full-time editor, Faran Krentcil. Dead Horse also plans a companion e-newsletter from the site. Although the new site will target a larger audience than Dead Horse's three inaugural sites, Spiers said it was aimed at the mostly upscale urban consumers who are interested in organic lifestyle products. Spiers also is planning to roll out additional sites, including one specifically for women. One domain name registered by Dead Horse, SanctiMommy.com, suggests plans for some kind of maternity site. Still officially nameless, these sites don't even have speculative launch dates. But, she said, the build-out is part of a long-term business plan. "Ideally, the Dead Horse network will be diversified," she said, "which makes it more sustainable in the event of a downturn in any single category." Currently, Dead Horse's existing properties deliver about 2.1 million page views a month, Spiers said. She added that Dealbreaker's readers' average annual household income is $206,000 and their median age is 28, while AboveTheLaw's readers' average annual household income is $99,000 and their median age is 29 (SuperMogul and Fashionista haven't yet been surveyed). The finance and law sites have recently begun attracting a variety of advertisers beyond business and legal news, including luxury advertisers like US Helicopter, BMW, Marquis Jet, Helium Report, IndieVest, and the St. Regis Hotel.
Click fraud rates reached 14.2% last quarter--up from 13.8% in the third, according to a new report by click fraud auditing company Click Forensics. The click fraud rate for keywords that cost more than $2 was even higher--20.9%, according to the report. The study was based on data gathered from Click Forensics' "Click Fraud Network" of more than 2,500 online advertisers and agencies. But Click Forensics' numbers are by no means universally accepted. Search company Google, for one, has gone on record as disputing the Click Forensics reports. Last year, the search giant issued its own report on click fraud, "How Fictitious Clicks Occur in Third-Party Click Fraud Audit Reports," which criticized the methodology of Click Forensics as well as two other companies, ClickFacts and AdWatcher. Google maintains that click-fraud auditors overestimate invalid clicks--those made by users with no real interest in visiting marketers' Web sites--for two reasons. First, auditing companies reportedly count page reloads as separate clicks; secondly, they wrongly count one advertiser's traffic in another's report. "A rigorous technical analysis by Google engineers has found fundamental flaws in the work of several click fraud consultants--flaws that help explain why widely quoted estimates of the size of the click fraud problem are exaggerated," wrote Google's Shuman Ghosemajumder, business product manager for trust and safety, in a blog post last year about the report.