I’m a sucker for ads that comment on the dishonesty of ads. For example, I laughed at this one from Newcastle Brown Ale:

I also really liked this one as well:

I do have a duck-rabbit disagreement with Piper Hoffman’s reading of it at BlogHer. I took the ad as a direct comment on the sexism of beer ads: if you’re not an attractive woman, beer companies won’t include you. But Piper raises an interesting point. [SPOILER ALERT] She’s right that if the pronoun had been “she,” the point would have been less ambiguous. But it also would have been a bit crueler, since the ad would have had Newcastle calling their brewmistress unattractive, and it also could have been taken as Newcastle agreeing that only attractive women should ever be shown on in an ad.

While I enjoy a meta-ad like this (at least as I take it), I also feel a bit meta-fooled: What does that have to do with whether their beer is any good? I’m not looking to be friends with a beer.

I get more enjoyment from viewers subverting ads. For example, I saw an ad for KFC about some new boneless chicken product.

I wasn’t paying attention, in part because it was a commercial, and in part because I haven’t eaten anything from KFC since I became a vegetarian 1979 but I have not forgotten the sensation of eating chicken that’s been so close to liquefied that it’s held together only by a layer of deep-fried cholesterol. But I saw the hashtag #iAteTheBones and checked it out on Twitter.

Bunches of the tweets praise the commercial as amusing. (It was directed by David O.Russell, who also directed the Oscar-winning Silver Linings Playbook.) But prominent in the list is this:

THE MAJORITY OF INSTAGRAM POSTS BEARING KFC’S #IATETHEBONES HASHTAG FEATURE DIRT TUNNELS LITTERED WITH SHREDDED CLOTHING.

— Daniel Manitou (@ActualPerson084) April 20, 2013

Well, not as far as I can tell. But the tweet made me look.

And a heavily-favorited tweet is quite savage:

.@kfc_colonel Is it normal to fill a toilet with blood? #IAteTheBones

— Jocelyn Plums (@FilthyRichmond) April 16, 2013

Someone in the KFC Marketing Department has already written an email to senior management explaining why this is a good thing for KFC. But, um, it’s not.

Neither is this:

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Google’s video showing how quickly Chrome paints the screen is a good example of the lines blurring between advertisements, memes, and PR. It’s informative (including a making-of video), convincing, and totally geeky in the MythBusters blowing-sh_t-up way. And beneath its shambling nerdiness, there’s some damn fine direction and production values.

It’s an ad I watched voluntarily, which makes it hardly like an ad at all.

[A few minutes later] If I’m going to tout that Google vid, then I definitely need to push this amazing, non-commercial piece of footage about nature, numbers, and geometry.

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I had not heard of Flash cookies until Fernando Bermejo’s Berkman talk last week. Now he’s inaugurated his new blog (well, it’s his second post) with a posting about a new study. Fernando writes:

the white paper concludes “that companies making inappropriate or irresponsible use of the Flash technology are very likely asking for trouble (and potentially putting the rest of the online industry at risk of additional government regulation)”. As for [end users], flash cookies are characterized as “super-cookies which are dramatically more resilient than cookies due to their implementation and a general lack of knowledge about their existence among consumer”.

To remove Flash cookies – which have some peacetime uses – go here.

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Fernando Bermejo is giving a Berkman lunchtime talk titled “Mapping Online Advertising: From Anxiety to Method.” He says that people sometimes hear that he researches advertising and assume t)hat he works for advertisers and wants to improve advertising. In fact, his interests are scholarly. He’s going to talk about the dynamics and logic of online advertising. (The subtitle of his talk is a reference to Devereaux.)

He begins with the John Wanamaker (1838-1922) quote: “Half of the money I spend on advertising is wastsed. The trougle is, I don’t know which half.”: It’s the most repeated sentence in advertising, although FB notes that it might be apocryphal. It manifests anxiety. In 1923, people were urging advertising to become a science. From anxiety to method. And that repeats online where there’s anxiety about online ads failing, and a growing desire for a reliable method.

FB explains that anxiety is a free-floating fear with no particular trigger. In this case, anxiety arises from the growth of the gift economy (= peer production) and the pay model. The traditional ad model is advertisers <> media <> audiences, but that doesn’t capture all the complexity. We need to insert “products and services,” since the aim of the ad is to get people to purchase those products and services. Audiences may see the ad but not make the purchase. Hence anxiety.

The method, FB says, is: Collect info. Metrics. Targeting. Have the right context. Price. Funnel.

Collecting info: Online, every interaction can be recorded, but those are discrete events. Advertisers need to figure out ID or profile. Cookies are one approach. FB points out that most people don’t know that Flash sets cookies also. 54 of the top 100 sites use Flash cookies, but only 4 mention it in their privacy policy — Soltani et al, 2009. When you opt out of cookies on a set, your Flash cookies generally are preserved. Another study (Kryshnamurthy & Willis 2009): “Our results show increasing aggregation of user-related data by a steadily decrteasing number of entities.”

Metrics: It takes an idea from the press (page) and broadcast (time) and calls it a “visit.” This seems to FB not to be very apt since you’re not on a site continuously necessarily. People also measure “engagement,” but that’s very hard to measure. He shows a complex mathematical function that seems somewhat silly.

Targeting: It has gone from audiences to highly granular “targets.” Advertisers have used demographics for a long time, as well as looking at the content consumed. But ther’s also content produced (e.g., search keywords) and behavior.

Having the right context: Previously, an advertiser was confident the context of the ad wouldn’t be weird because the TV station of magazine was professional, etc. . Now, online advertisers produce content specifically for advertising (e.g., Demand Media), and want to control user-generated content.

Pricing: It used to be CPM (cost per million). Online, CPM is 38%, but performance-based pricing is 58%, including cost per click or cost per lead/purchase. Obviously, the content producers don’t like this because you can produce audiences to sell, and then it’s up to the advertiser to do an appealing ad.

Funneling: You can show people your ads, but you can’t make them take action. There are ways to funnel people toward a purchase. Branding is important because the worst result of an ad is that it stimulates a purchase but of a competitor’s product. There’s also tracking and re-targeting: If a visitor sees your ad but goes to another site, they’re shown an ad reminding them to buy. Another movement: Funneling used to be just about impossible: After showing you the ad, the advertiser had no idea what you went and did. Now customers can be put into more controllable environments, especially the mobile Net. (Google and Apple have both bost companies in the “mobile intelligence” area, FB says.)

The consequences of these are diffuse. Collecting info means that companies want to collect more and more info. Metrics: Advertisers are uncomfortable with that which cannot be precisely measured, so they prefer search engines to social media. Generating the context means that the advertisers prefers certain environments and shapes context. PRice: Adverteiser tries to reduce risk by asking others to assume it. Funneling: Adverister tires to be more intensive and extended. [Missed one. Sorry.]

Broader consequences: Privacy issues makes advertisers play a cat and mouse game. Search engine advertising disintermediates the content producers, and to generate behavioral info the content producers need to provide their info to cross-company entities. [I missed his point about structure.]

The online content layer can only be explained through the logic of gift, of pay, and of advertising. We need to learn more about advertising

Q: [doc] Is advertising a bubble? Are we too dependent on Google which is 100% dependent on advertising?
A: So long as we think advertising has an effect, it has consequences.

Q: [carolina] Are we back to anxiety?
A: Yes. After all the method, we’re back to anxiety. There’s always a source of anxiety because the final goal is perfect control, and that’s not possible. [Note: FB is not advocating perfect control!]

Q: There are networks of ads, with many hops between the site and the advertiser. That makes tracking even harder. Why do we demand less anxiety online? Why not just put your message out there?
A: Because there’s the possibility of having more accountability. The audience measurement industry is somewhere between making it up and measuring it exactly. We have a need to believe there’s something tangible and real there.

Q: The old way of measuring success was just to put your ad on TV and see if sales increase. Does that still work?
A: There was never proof that advertising works. It may shift people from one brand to another but not increase consumption. The online evidence isn’t very clear or reliable.

Q: E.g., affiliate marketing offloads the risk onto the affiliates. Not everyone who embraces risk is anxious.

Q: Ads are not under the announced privacy policy of the site they’re on.

Q: [me] Couldn’t we say that the new models are the end of anxiety about advertising? You know what you’re paying for (pay per click, etc.) and there’s a market mechanism (auctions) that leads toward semi-rational pricing.
A: You still have to worry that people would have bought it anyway.

Q: [salil] If there’s a fixed budget for advertising, and if they optimize for, say, the number of clicks, then everything’s a science. But there are still two choices that are anxiety making: How much of the budget should be spent on ads? And how does that final metric translate into increase in revenue.
A: Yes. If people click on the ad mean that they’re more interested, does it mean you’ll get more purchases, etc.
Q: Long tail advertisers maybe should have less anxiety because they can more easily correlate ads and sales.
Q: [rob] And there are short term blips that can be tied to advertisements.
A: Yes. It can be very different for different types of products.

Q: [jason] Death of brands?
A: Context-dependent. Brands will continue to be important.
Q: [judith] Efficiency is great for consumers — we’ll just buy what we want to buy. But it seems like a huge part of the ad industry is aimed at creating desires. Is there a way of giving people a measure of how free the Web is not? How much are we paying for our content through unnecessary consumption?
A: These are core issues. Is advertising just about informing people or about stimulating desire? Those two things can co-exist.
Q: [judith] You can pay for content by getting people to buy stuff, but they won’t pay for the content they’re there to read.
A: I’ve tried to stay away from the culture impact of advertising in this talk. Perhaps another talk …

[Posted without re-reading.]

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Yup. Pretty damn creepy.

[Tags: cluetrain advertising ]

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Andres Hervas-Drane
Begins by noting the long tail in the market share of products. There’s empirical evidence that this is happening online. Why there? Standard answer: Supply side. But he wants to look at factors on the demand side that can affect this distribution.

He sets up a case where consumers have difference preferences and come to the market uninformed. In the offline world, search happens through word of mouth. They can search with evaluations or with recommendations. Recommendations come from consumers who searched with evaluations. Word of mouth results in a high concentration of sales.

Almost a third of Amazon’s sales are generated by recommendations. These are generated by users as meta-content, finding consumers who have similar preferences. This is taste-matching and it reduces sales concentration.

Then there are “artistic markets”: that increase the demand for niche producers and results in long term cultural variety.

Peyman Faratin talks about a case study of prediction markets. His main point: Scarcity is at play even in the UGC system. The new scarcity is of attention.

An incentive engineering problem is at foot in prediction markets. When you can’t bet real money, the incentives go down. The reward streams are delayed. You have to search for the market. There are significant transaction costs [which he goes over in some detail, but too hard to capture briefly...sorry]. That’s why prediction markets aren’t going very well; they’re lonely.

Solution: Reward the big hitters. Let them transfer their reputations. Give them content management rights. Rank markets and reputations. “Invisible hand of the algorithm: Recommendations.” Use widgets to let the market come to the user. [I missed the end of this. Sorry!]

Chris Derllarocas talksabout “Your Operations hvae become your New Marketing.” “Every customer is a potential brand ambassador or a lethal bran assassin.” E.g., in 2006, Comcast spent $100 M in advertising, wiped out by the youtube of a sleeping technician. UGC can make or break your business.

Most influential UGC occurs spontaneously and represents non-representative experiences. Companies need to take preventive measures. Consumers use UGC to decide if they should consume a product. Once they have, they decide what to report. Companies need to “Strategically re-engineer the consumption experience to spontaneously provoke the right mix of consumer content.”

Rules: Pay attention to extreme events. Move towards a culture that pays attention to outliers, positive and negative. “Redesign your monitoring practices and career incentives to accentuate the positive and eliminate the negative.” Also, “reasses yesterday’s yield management practices.” That is, make sure you do not systematically produce a small number of unhappy customers” (e.g., but routinely overbooking, or by routinely selling undesirable hotel rooms at very low rates). Also, get to know your power customers, i.e., the ones more likely to be vocal. They should receive “the special teratment that loyal big spenders used to receive ten years ago.” Also, not sock puppetry. Also, maybe have a Chief Perception Officer.

Q: You’re proposing an operational hit since we won’t be selling all the seats or rooms.
A: Yes. That’s the decision to be made. We need to make these decisions holistically. We don’t have the complete answer, There’s room for innovation.

Q: [me] This morning we heard that the population is not nearly as adept at using these tools as some of us (= me) would like to believe. This afternoon we hear about markets that are adept. How did you hear this morning’s research?
A: It varies by market. And consumers aren’t necessarily savvy. The UGC has effect even when they’re not savvy. You need to tier your efforts, taking account of the consumers’ Web savviness.

Q: How’s it work in other countries?
A: We haven’t done that research. Happy collaborate…

Q: How does this apply to B2B?
A: More limited.

Anindya Ghose will talk about combining textmining with econometrics. Firms want to know if there’s any economic value to social networks and UGC. How can they monetize UGC?

There’s economic value embedded in the content. E.g., product reviews, geo locations, online purchase behavior. His software mines the text and assesses the economic value of, say, a positive review and even more particular comments. E.g., “good packaging” lowers the value by $0.56 because customers expect superlatives. Particular keywords have particular monetary effects.

Hypothesis: The increasing availability of UGC is reflected in sponsored search metrics. And, yes, he found a correlation between the frequency with which key words are used in blogs and their cost-per-click on search sites. He’s researching whether there’s some sort of causal effect, but it’s not an easy problem. Hence, UGC can be monetized through sponsored search.

[Posted without re-reading. I have to prepare for my unprepared comments. I'm on a panel that's supposed to be reflecting on the day.] [Tags: ugc ugc3 marketing cluetrain advertising textmining advertising prediction_markets everything_is_miscellaneous ]

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Scott McDonald of Conde Nast gives the lunchtime talk. He reminds us of how big CN is: magazines, websites, events, digital apps.

His numbers show that lots of people are creating content.

UGC issues for “traditional” [the quotes are on Scott's slide] media: Brand compatitiblity (vs. “snark/coarsening”. Commoditization of content (all gets treated the same). Value as “listening post” (media can hear their readers). DRM when everyone is an aggregator. Monetization.

Advertisers are reluctant to jump in, Scott says. They worry about brand. UGC video is cheap and plentifu. but it’s not selling. The CPMs are deeply discounted. Ad revenues are not going to UGC and marketing execs are pessimistic about this; only 22% think UGC is a “high-growth opportunity.” 73% of advertisers say they definitely will not run ads on UGC.

So, what are the other models? You can incorporate UGC on a site as a “retention device.” [CNN's turn-the-channel "iReports"?] Authentication fees on microblogging sites? E.g., Twitter charges DominosPizza to assure that it in fact represents Dominos Pizza. How about sponsorships on crowdsourcing sites such as Digg? E.g., at Reddit, maybe a sponsor could be an “amplifier” that announces that each thumbs up counts 5x. [Wha??? Wouldn't that destroy Reddit's credibility?] Finally, there’s cross-platform marketing. Only 10% of visitors to a mag’s site are subscribers. So, cannibalization isn’t a worry. But how do you make money on the web site? Ads only work for very big sites. But,” online subscriptions sales are sweet.” People who subscribe that way have higher value than subscribers through other means: They’ve sought out the mag, they pay with a credit card, they are more likely to take an automatic renewal contract, they get added to the email list, etc.

He points to Conde Nast examples of UGC. Contests for designs, NYer caption contest, GQ tips on good grooming. [These are as much UGC as a man-in-the-street interview.]

He points to Reddit, a CN site. He acknowledges the bad language on the page. It produces no subscription revenues. They’re starting to have sponsored posts that still can be voted up or down.

Q: Are people dropping subscriptions because they can get the content for free online?
Scott: In general, no. The conditions for reading mags are special, e.g., reading one on the subway to create zone of privacy. [A good e-reader will destroy this.] For news mags, that’s more of an issue.

[Tags: ugc ugc3 conde_nast media mainstream_media advertising marketing ]

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Cold war, the cult of expertise, the broadcast metaphor, scientism, chaste kissing…why this one’s got it all!

[Tags: certs advertising expertise ]

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I read David Ogilvy’s “Confessions of an Advertising Man” when I was a kid and was greatly impressed, I think by the subtlety with which humans could be influenced. It was also quite entertaining. Here’s David Susskind’s hour-long interview of him from 1983.

(Thanks to Richard Pachter for the link.)

[Tags: david_ogilvy advertising marketing ]

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Ethan, in a long, careful, and superb speculative piece, wonders if newspapers have been propped up by the fact that advertisers couldn’t tell just how over-priced the ad space in newspapers has been:

Basically, there are two ways to explain the disparity in online and offline ad cost. One is to argue that paper ads are, for some combination of reasons, ten to a hundred times more effective than online ads. The other is to argue that advertisers are better at pricing online ads than offline ads.

So, if we lose the irrational pricing of offline ads, how are newspapers going to support expensive, investigative journalism? Or, as Ethan puts it.

What if the model that brought us Upton Sinclair and Woodward and Bernstein – impression advertising – can’t bring us into the future because it’s based on uneven distribution of information and bad math?

And Ethan’s answer is: We don’t know yet.

Great, provocative piece.

[Tags: ethan_zuckerman journalism newspapers media advertising ]

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