The Future of Viral Marketing, Service-Oriented Advertising

Warning: This post is rated WTF. I am going to try to spin a little conceptual magic here in attempt to think about things a bit differently. Because I am merging thought from two worlds – advertising and web architecture – it might not make sense to anyone. But I figure that maybe there is one person crazy enough to understand/comment/help me through this insanity.

Advertising is dead. Long live advertising. 

People have been yammering about the bottom being pulled out from page-view centric methodologies of advertising for years. In particular, the CPM model – or cost/1000 impressions – has been spiritually beaten up for its lack of accountability. At the same time, however more and more people are going online and – despite the economic hubaloo – so are the dollars.  So where is the money going to go if CPM is not the long-run solution?

It’s not just about reach and frequency – it’s about spread.

I believe that the traditional performance-based models are just the beginning. As we shift towards engagement-centric models, advertisers are demanding new metrics that effectively quantify how their message is being delivered AND received.  They are no longer satisfied with reach and frequency, but instead want to know how their messages are spreading and shifting as they make their way through services like Facebook, Twitter, YouTube and more. These two shifts should be looked at as parallel. Siloed pages are giving way to connected applications. And impression based programs will eventually give way to programs that leverage the connected nature of those applications to deliver and understand the dissemination of their message.

Web Services connect applications

So for those of you that are geeks, you know that a service-oriented architecture calls for distributed applications to be run on top of a loosely-coupled stack of interoperable web services, or APIs.  For non-geeks, this means that information will no longer only be accessed like that information in a magazine – simply through reading. Instead, the data powering all those websites will be exposed to programmers via web services. Think of web services as reusable building blocks for programmers to create an application. For instance, a programmer could build a browser-based application using Google’s mapping capability and Twitter’s messaging platform to show how information is flowing around the world.

Connected applications unleash Viral Marketing opportunities

Advertisers want to understand the ‘spread’ of their messages.  As more people communicate via Facebook, Twitter, email, and more a unique opportunity to track message distribution ACROSS these channels is emerging.  And as you know, what can be measured can be managed.

As we have watched the web transform from a technical perspective, we have also been engaged with advertisers.  Their Nirvana is as follows:

  • I spend strategically to arm brand advocates with a message
  • Advocates spread the word efficiently
  • I can track the distribution of that message
  • And I pay on performance – nothing more

    This Ad Nirvana could be closer than you think. Web services have unleashed the next generation of performance-based viral marketing. As browser-based applications integrate with popular web services like Twitter, Facebook, IM, and more  ‘viral’ experiences to be delivered via cross-application messaging.   Moreover, because of advancements in metrics technology and social networking data availability, it is now possible to literally watch and optimize your message per user and watch distributed communities and discussions form around your content.

    Service-Oriented Advertising

    I call this concept Service-Oriented Advertising. People will pay to have their messages delivered across services.  It’s a bit geek-shique, but the idea is that marketers will seed the delivery of their message through multiple web services, or channels, and pay for the enhanced distribution of their messages on a performance basis.  There are some primitive versions of this that exist today.  The CPI, or cost-per-install, model for widgets is a subset of this paradigm.  People pay for their message (widget) to get distributed across a subset of channels (social networks) on a performance basis (install on a page).

    hoomanradfar Written by:

    • http://autom.x.iabc.com Autom

      Great post. I've often wondered how many are challenged to effectively translating this type of value proposition to CMOs, CIOs..and if so, whether or not they really understand the long term impact.

      Look forward to more posts on this subject.

    • http://www.clearspring.com Hooman Radfar

      Thx. It's a tricky area. People in the Direct Marketing field are more used to this kind of idea. But the idea that you can pay-for-performance is old and so is multi-channel marketing (email, webpage, etc). The big question is how you tie it all together as more services pop-up.

    • http://tipd.com Andy Hagans

      Interesting ideas. Of course, social networks — and even applications — are still only a fraction of the way users' time is spent online. (A large proportion is still Web 1.0 "content + email".) But there's no reason this "social" time can't be monetized as efficiently as search, using a paradigm as you describe above. In any case, I think we're all starving for new metrics (beyond CPC and CPM), so this is great food for thought.

    • http://www.clearspring.com Hooman Radfar

      Andy, I agree that there is a way to go. That being said, I actually count email as a 'service' that can be wired into this viral mesh and optimized in tandem with messaging and other inter-application communication hooks.

    • http://jonathanhstrauss.com jonathan

      I agree with you that an increasingly important part of the future of marketing communications is going to be about identifying and empowering brand advocates from the community. But, why buy the cow when you can get the milk for free? In this new world, I think advertisers will be drawn to the capital efficiency of what political operatives call 'earned media' or what web 2.0 geeks call community management/brand evangelism. I believe advertisers will pay for the measurement tools to make their social media outreach more efficient and effective. But as these tools make legitimate outreach more common, the side-effect will be to make 'social media advertising' seem even less authentic (and thus less effective) than it is today.

      Broadcast/interruption marketing will never go away, but it is just one tool in an integrated marketing communications campaign. While I agree that more money will be spent improving the tools of social media/permission marketing, I don't necessarily believe it means that will take the form of conventional advertising spends as we've known them.

    • http://www.clearspring.com Hooman Radfar

      Jonathan, super interesting perspective. so basically, you are saying that in a world of perfect communication, a brand should not have to advertise (at least the way we know it). social media should efficiently distribute the message. although i think that is a good end game, from (limited) experience with widget distribution, I know that the world is not wired well enough yet so you need to amp up your initial seeding. that being said, I like your direction and need to think more about it…

    • http://www.louderback.com Jim Louderback

      Great post, and definitely a solid weaving of tech and advertising. I like adding "spread" to reach and frequency..

      I really think it's a third dimension to marketing. You can graph reach and frequency on a plane, but add in spread, etc, and you get a 3D model, where marketers should be encouraged to manipulate the axis based on their goals for a particular campaign.

      I've been thinking about some of these things as well, and put together a somewhat parallel set of ideas on my blog recently. I called it "depth of experience" rather than spread, but many of the concepts are the same. You can read about it here if you want.
      http://louderback.com/2009/web-videos-powerful-th

      jim

    • http://www.clearspring.com Hooman Radfar

      Nice post, Jim! 🙂

    • http://gregorymarch.com Greg March

      Hey Hooman,

      Well articulated. I also like the concept of, as the well as the word "spread".

      If everyone uses the appropriate mechanisms to spread the message, this will be easy to track and attribute spread to each tactic. What percentage of users abandon the given tools and just post shit to their blog, email, and twitter stuff without a measurable connection to the placement that inspired it? I assume its significant. Is that ever going to be measureable?

      On a second note, I'm all for "pay for spread" payment models but advertisers should still try and pay for placement and optimize their own spread as part of the mix (only part, I still want you sell me CPI stuff). If spread becomes a business model, you know some publishers will figure out a way to game it and maximize margin at the expense of the true marketing value of the endorsed impression.

    • http://www.widgify.com Hooman Radfar

      Greg, on the money. I love this. Wow.

    • http://stickiwidgets.com Ming

      Hey Hoo,

      Always love your posts…

      I have been thinking about this for a while too and haven't come to any conclusions yet. Being able to track, manage and optimize marketing/advertising is great. It allows for rapid adjustments to focus on effective tactics that drive performance. However, I do agree with Greg that the value of the endorsements could become polluted and have a negative effect.

      Online social networks, as it stands, are loosely tied and trust is easily lost. The ability to manipulate and optimize the message without decreasing the value proposition will be the key to long term gain. Fundamentally, there still needs to be some intrinsic value to what you're selling and there needs to be a clear message to the consumers.

    • http://www.clearspring.com Hooman Radfar

      Ming, thanks for the love as usual. It always brings a smile to my face to see you in the discussion. How's life at Demand? I hear you guys are big users of AddThis and Clearspring?