Last time, we started a conversation with David Honig, cofounder of Media6Degrees, which connects a brand’s customers with consumer segments via a social graph. Honig explained a bit about his company and how social media impacts behavioral targeting. Today, we conclude the conversation by discussing behavioral marketing’s role in social media.
Anna Papadopoulos: What role does behavioral targeting play in the social media space?
David Honig: That depends how you define behavioral targeting. Traditional behavioral targeting has yet to create scalable audience creation in social media.
However, incorporating social graph information into online advertising targeting methodologies will instantly add value to any media plan. Most marketers would intuitively agree that the social groups of an advertiser’s existing customers represent a desirable audience. But at the end of the day, we are talking about homophily, the powerful tendency of like-minded people to gather in tribal clusters around common interests, including brand affiliations. In other words, “birds of a feather flock together.” Marketers who can successfully leverage the power of homophily while respecting users’ privacy will have gained a highly predictive analytic tool that they can deliver against.
AP: Here’s a typical scenario: a client wants to test the social media space out but doesn’t know how to begin. Are there any steps that a client should take (besides hiring you!) when considering social media? Are there clients who should absolutely not be considering this space?
DH: You need to take baby steps, and don’t expect success right away. It’s a commitment to social media and the audience you are trying to reach. It takes lots of experimentation and time to really understand what will work for your brand. Don’t assume if you create an application or social networking site that people will flock to it. You really have to follow your customers’ existing online behavior.
The advent of social media necessitates a radical change in the online marketing paradigm. The next generation of targeting strategies that incorporate privacy-centric, group-oriented methodology will provide better audiences for brand advertisers.
AP: How do we set up quantifiable metrics to gauge success (or failure)?
DH: The industry’s monetization problem may have occurred because marketers tried to apply models from other online contexts to the social space. For example, CPM [define] and CPC [define] models have worked with traditional mass media display and search, respectively, but have had limited effectiveness in social media. It is time to look at an old problem in a new way and look at the quality of the audience, rather than the quantity.
AP: Is there unique information collected through social media that can’t be collected elsewhere?
DH: Currently understanding connections and how people are interactive in an online social environment is something very unique. This may change in the future with OpenSocial, but true connections between like-minded individuals are difficult to identify.
AP: Let’s talk privacy. How do we go about treating consumer privacy while still making this work for marketers?
DH: Customer privacy should be everyone’s top agenda. Data is extremely important to our industry, but we must stay ahead of the regulatory environment in self-policing the industry. We must offer a safe and private solution and, most important, collect absolutely no [personally identifiable information] or data that in aggregate becomes PII. Media6 has partnered with Network Advertising Initiative (NAI) to commit to consumer education and allow consumers to control their online experience.
AP: What role do publishers play in all this?
DH: The role of the professional publisher has drastically changed. Up to 70 percent of consumer time online is now spent viewing content created not by professional editors but by fellow consumers. While the knee-jerk reaction would be for many publishers to create their own social network, I believe we will see publishers and networks of publishers launch open-source platforms that allow applications to be distributed with a built-in system for monetization. Many of these apps will be based on the Google Gadget spec and wrapped with personalization by the publishing brand.
AP: Where do you see all this going in the next 12 months?
DH: Your guess is as good as mine. I think advertisers will start to seriously look at social media data and tie it in to their data. I am confident you will see a rather large handful of brands talking about their own node in the social graph. I look forward to helping these brands figure it out.
AP: Anything else you would like to add?
DH: This is very new to a lot of people. Something extraordinary is happening. In social media we have seen the creation of an entirely new Internet model, which few people could have foreseen even three years ago. We as marketers must create business models that will allow this fertile new area to expand, flourish, and continue to innovate by tapping into the revenue lines that derive from successful brand building platforms. I feel incredibly privileged to be a part of something so very special, and we shall see how it all plays out. There is a very similar excitement today as I experience in the late ’90s in the online space. The only difference is today, we have greater technology and many more people online.