It Pays to Advertise

Why is Social Media “Free” to Use?

It is often said that the American free enterprise system is the eighth wonder of the world and the average American's lack of understanding of what it is and why it works is the ninth wonder of the world.

In today's confluence of mass communication, many of us are somewhat bewildered by the tremendous number of advertising messages that are directed to our attention on a day-by-day basis – whether through traditional venues such as newspapers, magazines direct marketing, etc. – or from rich media platforms, such as sponsored ads on Google and Facebook to individual websites and apps.

But have you ever stopped to consider where our economy and commerce would be if business people did not aggressively pursue their freedom to advertise the products and services they produce?

Better yet, how could all the “free” social media sites we enjoy operate without advertising revenue – including those ubiquitous banner ads that run along the sidelines and interfere on the middle of the page? Bottom line: “free” content on collaborative sites are possible only by advertising dollars.

But, in the social age, where do ads fit?

According to a Forbes article, Facebook founder Mark Zuckerberg stated, “We should relax, make relationships, build rapport, sell later.” That philosophy has helped shape its current pitch. Rather than simply providing traditional ads, the social network encourages companies to engage with user by telling them stories. Facebook believe that such interaction is less intrusive than other online ads that take over a user’s screen or push done content.  

Advertising:  With –or -Without Content:

Dish Network Announces its New Ad-Skipping DRV – Ironically, with Commercials.



Ad-skipping DVR raises a ruckus

 The Wall Street Journal, New York Times, LA Times, and others screamed headlines during “upfront” week on the Dish Network Corp. plans to promote its new ad-skipping feature with, ironically enough, a television ad.

Ironically, Dish is rolling out television, radio, newspaper and social media ads to spread the word about their new DVR, dubbed the “Hopper.” Dish last week added “Auto Hop” which lets views skip commercial completely on most nation prime-time shows aired on the major broadcast networks.

However, major networks may not run the ads.

From the B-School

A little card with a caption that said, "NEGATIVE THINKING" and the message it contained is a standard in Business Administration Schools.

It begins, "A man lived by the side of the road and sold hamburgers. He was hard of hearing so he had no radio. He had trouble with his eyes so he watched no television and read no newspaper, but he sold good hamburgers. He did however, advertise in the local newspaper telling people how good they were.

He stood by the side of the road and cried, "Buy a hamburger mister?" and people bought. He increased his meat and roll orders and bought a bigger stove to take care of his trade. His son came home from college to help him and then something happened.

His son said, "Father, haven't you been listening to what people are saying? If money stays tight, we are bound to have bad business. There may be a big recession coming on, you had better prepare for poor trade. Whereupon this man thought, "Well, my son has been to college. He listens to the radio, watches television and reads the newspaper and he ought to know". So, he cut down on his meat and roll orders. He cut out his advertising and no longer bothered to stand by the road to sell hamburgers, and his sales fell almost over night. "You're right son", the father said to the boy. "We are certainly headed for a recession".

Sources:
1. Micahel Humphry, "Facebook, DVR and Solving the Ad Conundrum," Forbes, 5/17/2012
2. Doug Gross, "Ad-skipping DVR Prompts Fight for the Future of TV," CNN Tech, 5/25/12

Pinterest: Pinning, Sharing and Challenging Copyright Laws




Getty Images pinned and re-pinned - some in hi-res 

 

Is Pinterest the new Napster or a Wake-Up Call for a Better Copyright Idea?

The headline in The Wall Street Journal asked, "Is Pinterest the Next Napster?" It's a good question, but perhaps the wrong one.

The story focuses on a blog post written by Kristin Kowalski titled, "Why I Tearfully Deleted My Pinterest Inspiration Boards" that went viral.

Pinterest is a social site for image sharing around themes that launched in March 2010. It gained a considerable following and was one of Time's "50 Best Websites of 2011." In January 2012 it drove more referral traffic to retailers than YouTube, Google+ and LinkedIn combined and became the fasted site to ever break 10 million unique visitors.

As its popularity increases, so have concerns about whether its users aren't just sharing their favorite things, but engaging one another in the web's largest copyright infringement platform.

Ms. Kowalski, a photographer/lawyer, feels pretty strongly that it's infringement to re-pin work from others. Kowalski turned to federal copyright laws and found a section allowing fair use without permission when someone is criticizing it, commenting on it or conducting research. Re-pinning doesn't fall under any of those categories. She concludes that the only option is to either pin your own work or get off Pinterest altogether.

In a recent TechCrunch interview, Jonathan Klein, co-founder and CEO of Getty Images, discussed photo sharing on the Internet. As the world's largest stock agency, he is focused on protecting the photographs that belong to his company -- and making sure that Getty and its affiliated photographers get paid.



Mr. Klein is not concerned about people playing with Getty photos; teenagers using for school projects and folks putting them up on their personal blogs -- or, at the moment, even Pinterest.

So when does Getty snap into action? The moment a website starts running ads alongside those images. As Klein told TechCrunch in the interview above: "We're comfortable with people using our images to build traffic. The point in time when they have a business model, they have to have some sort of license."

This is why Pinterest has a big problem on its hands. When they start generating revenue, which they have not done so far, this will spotlight copyright issues and the lawyers will pounce. The site has certainly built immense traffic by allowing people to share and collect as many photos as they want -- many of which inevitably don't belong to them in the legal sense.  However, the moment that Pinterest starts making money on its own, intellectual property owners such as Getty Images will have the right to ask that Pinterest pay up -- or start deleting pinboards.

But could it be instead that pinning other people's images -- the way Pinterest intends and the way most people use the site -- is fair use? Courts have held that search engine thumbnails are sufficiently transformative to not be infringing. In that context, are Pinterest boards likewise transformative?

Pinterest is probably counting on that -- being considered like a search engine were this ever come to a courtroom, since pins link back to the original site. Pinterest may also have concluded that its users' creation of "boards" is use of content in ways that is akin to collages and mashups, which many consider transformative and therefore lawful.

So there are understandably different opions on the issue of copyright legality. However, beyond questions of copyright, underlying all of this is a huge problem to which the only solution is a mass recognition of the cultural shift occurring. Simply put, the Internet is built on a culture of sharing.

Creatives of all types are often surprised to find their photos shared or their designs copied by others. All art is ultimately derivative -- from the great masters like Karsh or Hemingway or Matisse -- whether the artist wants to admit it or not. We build on those who came before us. That's not a bad thing -- it's just art.

Sources:

1. Therese Poletti, "Is Pinterest the Next Napster," The Wall Street Journal, March 14, 2012

2. Collen Taylor, "For Pinterest, Revenue Will Turn Copyright Questions Into Real Problems," TechCrunch, March 22, 2012

3. Anthony Wing Kosner, "Pinterste: Napster for Housewives or Wake Up Call for a Better Copyright Idea?", Forbes, March 15, 2012

4. Ruth Suehle, "Pinteerest and Copyright: Why You Should Keep Sharing -- and Keep Pinning," Opensource.com, March 7, 2012

Building Brands in a Connected World

"The Connected World has Rerouted the Customer Journey"

Mad Men - the AMC series of top-down advertising and marketing from the 60s - hilariously describes the traditional purchasing funnel: Awareness > Consideration > Purchase > Preference > Loyalty.

In a TV-dominated age, you'd see a commercial and become aware of a brand. Then, after you got familiar with the name, you might consider if you wanted to buy it. Next, you bought it. Then, you might decide you liked it. Finally, you identified yourself with the brand ("I'm a Budweiser guy").

Facebook recently released a study by Forrester Consulting to evaluate how marketing leaders are building brands in a connected world. According to the study, social media has turned the purchase tunnel on its head.

Facebook's new process looks like a circular motion of learning, investigating, purchasing, and interacting.

The process is completely influenced by social media. Consumers hear about new brands and investigate via social media. When it comes time to buy something, consumers increasingly consult their friends via social media. Then, they expect to be able to interact with the brands through social media after the purchase.

The study proposes a six-point plan for building brands in the social media age:

1. Articulate the brand's social identity so the brand communicates with a unique, compelling, and authentic voice.
2. Connect with your best and most likely customers by giving them a reason to like or follow the brand in social channels.
3. Engage people by making brand communications more participative and personally relevant.
4. Influence people by inspiring and enabling people to share messages about your brand with their network.
5. Integrate social into the brand and product experience to make it more cohesive and useful.
6. Rejuvenate the brand by using insights from social channels to monitor the brand's health and improve the brand experience.

A good example of this process can be seen in the clip below that has Michigan State basketball coach Tom Izzo reinforcing the power of social media while in the hunt for the NCAA championship.

Sources:

1. "Building Brands For The Connected World," Facebook, Forrester Consulting, February 2011

2. "Facebook's 6-Point Plan for Building Brands in the Social Media Age," Todd Wasserman, March 12, 2012

3. "Journey to Comfort with Tom Izzo," Dove Men+Care

Where Have The Editors Gone?



Ann Arbor Journal
Thursday, February 16, 2012
Page 1-A (cover page)

 Quality Continues Downward Spiral
The press, especially the traditional press, continues to loose out to rich media formats - not only in revenues, but apparently in talent also.

A recent publication in the Ann Arbor, MI region painfully pointed this out last week.

The Ann Arbor Journal, a weekly newspaper published by Heritage Newspapers, underscores the question: "where are the editors, where are the proof-readers, where are the fact finders?"

A front page article in its Feb. 16th edition, "City talks sustainable uses of land," features a layout template meant to flag information for editors to complete. They actually published the paper with "Subhead goes here, typically three decks."

Truth in Advertising? Since When?

Campbell's Soup Co. was

charged with deception

when it placed marbles

in the bottom of a soup

bowl so ingredients

would rise to the surface.

If it looks too good to be true, then... In ancient Rome, the Latin expression caveat emptor, "Let the buyer beware," warned buyers of unscrupulous sellers. It remains a good dictum today.

Deceptive advertising, whether from altered images and/or simulations, infomercials, misleading statements, outrageous claims, and questionable testimonials -have a long history in the US.

There are legendary stories about ad campaigns that used mock-ups rather than real products to simulate the way products work. When some of these practices came to the attention of the public, some people called them "deceptive advertising," and the authorities stepped in. Nowadays, the Photoshop phenomena is the primary tool to enhance a product.

Digitally Enhanced Images Getting Attention from Authorities.
In the US and the UK, authorities are taking issue with cosmetic ads that they deem are misleading. Print ads for CoverGirl mascara, fronted by spokes model Taylor Swift, have been banned by the U.S.'s watchdog National Advertising Division of the Council of Better Business Bureaus Claims (mercifully abbreviated to NAD) for making unsubstantiated claims. According to the NAD, the mascara ads made claims that couldn't be proven. What's more, fine print beneath Swift's picture states "lashes enhanced in post production."

This is the first major beauty ad to be banned in the United States, though such measures are less rare in the United Kingdom and Europe, where media-watch groups have adopted particularly aggressive anti-Photoshop stances.

For a quick view on how Photoshop is used in cosmetic advertising, check out the video called Evolution below from Dove that shows how Photoshopping is applied to a model.

P&G had the grace to pull the ad when it got caught, but it's a slippery slope between artistic enhancement and government regulation. 

When asked whether this was a de facto ban on Photoshop, NAD director Andrea Levine stated, "You can't use a photograph to demonstrate how a cosmetic will look after it is applied to a woman's face and then - in the mice type - have a disclosure that says 'okay, not really.'" Mice type! We like this lady.

In the UK, Christy Turlington and Julia Roberts retouched ads banned.

Julia Roberts and Christy Turlington are two very beautiful women. But in order to sell its foundation, L’Oreal may have made some itty bitty adjustments to their faces.

That’s a no-no, according to Britain’s Advertising Standards Authority, who has banned two ads of the lovely ladies that were airbrushed to an extent that they claim misleads customers. This will come as a shock to anyone familiar with makeup ads.

Member of Parliament Jo Swinson first alerted the campaign watchdog to Lancome's two-page ad showing Roberts as shot by Mario Testino and a spot for Maybelline's "Eraser" foundation featuring Turlington.

Swinson added, "Excessive airbrushing and digital manipulation techniques have become the norm, but both Christy Turlington and Julia Roberts are naturally beautiful women who don't need retouching to look great. This ban sends a powerful message to advertisers -- let's get back to reality,"

Did you know: There's truth in ice cream advertising.
In the old days of TV ads, many tricks were used: motor oil over roasts to make them look better, airbrushed automobiles, razors that could shave the sand off a piece of sandpaper, mashed potatoes in place of ice cream - and so much more.

A classic example include Campbell's Soups ads (1968); in order to show the abundance of vegetable and noodles in the soup, the ads were shot after placing clear marbles in the bottom of the bowls, helping the vegetables stay near the top and show up clearly in the ads. They got busted by the FTC for false advertising.

It's true that food stylists - those who arrange and photograph food for those tempting photos you see in ads and in restaurants - sometimes create ingenious concoctions to stand in for the real thing under the hot lights of the studio.

Mashed potatoes are still substituted for ice cream. So are recipes involving shortening and confectioners sugar. But when it comes to photos used in advertising, the Federal Trade Commission has deemed that real ice cream must be used in ice cream ads. However, if the ads are for the ice cream cone or a hot fudge topping, a phony ice cream concoction can be used.

Sources:
1. Sarah Anne Hughes, "CoverGirl Ad Featuring Taylor Swift Nixed Over 'Enhanced' Eyelashes," The Washington Post, December 22, 2011
2. Charlotte Cowles, "Taylor Swift's CoverGirl Mascara Ad Banned," New York Magazine, December 20, 2011
3. Jim Edwards, "US Moves Toward Banning Photoshop in Cosmetic Ads," Business Insider, December 16, 2011
4. Turkey Hill Team, "Did You Know: There's Truth in Ice Cream Advertising," Icecream Journal, March 11, 2009
5. William M. O'Barr, "Ethics and Adverising," Advertising & Society Review, 2007
6. Hilary Moss, "Julia Roberts & Christy Turlington L'Oreal Ads Banned in UK," The Huffington Post, July 27, 2011
7. Colleen Nika, "Taylor Swift's Mascara Ad Discontinued, 'Vogue' Cover Confirmed," Rolling Stone Magazine, December 21, 2011

Brand Identity: Who's Watching The Store?

Get Out of My Facebook!
Says German Merck to U.S. Merck.

German drug maker Merck KGaA has threatened legal action after it said it lost its Facebook page to rival Merck & Co. in the U.S.

According to a recent Wall Street Journal article, German Merck said its Facebook page has been "misappropriated," adding that it wasn't clear how that happened, nor who was at fault.

The November 21st filing reflects the growing importance of social networks as marketing tools, with companies willing to go to court to safeguard their perceived rights on these networks.



Click to enlarge

 The Merck Facebook page contained information on Merck & Co. Inc. (Whitehouse Station, New Jersey), which is described as "a global healthcare leader working to help the world be well". The site is said to be intended only for residents of the U.S. and its territories. On Sept. 16, it carried a post welcoming users to "Merck's official Facebook page!"

German Merck said that it entered into an agreement with Facebook for the exclusive use of the Web page in March of last year, but in October 11 this year, Merck KGaA discovered that it no longer had administrative rights to the page, which was filled with content related to Merck & Co.

Who's Watching the Store?

The two Mercks became separate companies under the Treaty of Versailles, each owning rights to the Merck trademark in different geographic areas, as part of Germany's reparations after World War I.

Merck & Co. Inc. (NYSE: MRK) is one of the largest pharmaceutical companies in the world by both market capitalization and revenue. Merck KGaA (EMD Chemicals in the U.S. and Canada), also known as “German Merck” and “Merck Darmstadt”, is the world's oldest operating chemical and pharmaceutical company. According to Hoovers.com, U.S. Merck outpaces German Merck by over 4x in sales volume (2010 sales = $4,598B versus $1,231B, respectively).

Confusing? Perhaps. But it points to the very serious issue of protecting brands, trademarks, and a company's goodwill and reputation - and keeping a keen eye to defend the store.

For many, brand theft, rather than piracy, is the biggest intellectual property risk. Brand theft occurs where one party establishes a brand but another party acquires rights to the brand (in bad faith). Not all trademark disputes are brand theft — many involve disputes between parties all acting in good faith, but cases of brand theft are those where people abuse trademark laws. Brand theft can make a legitimate brand owner essentially an infringer in using its own brand and is all the more dangerous because it is done through perfectly legal means. The costs of fighting brand theft are high, so the best defense is to reduce the risk of it happening.

In this case, no one at German Merck was keeping an eye on the store. Just look at the time frame: German Merck establishes its Facebook page in March 2010; U.S. Merck somehow gains administrative rights to the page and repopulates in September 2011, but German Merck does not notice until October 2011, and then finally sues in November 2011.

We can all learn from the mistakes made here. In particular, the top 5 social media pitfalls to avoid:

1. Not Investing Adequate Time: A common mistake is underestimating the amount of time a successful Facebook strategy entails. Many social media consultants report seeing a pervasive “set it and forget it” mentality among small businesses - apparently the case here between the two Merck's.
2. Broadcasting: Ask any social marketing consultant what the number-one "no-no" is on Facebook, and he’ll likely tell you it’s “broadcasting” your messages instead of providing fans with relevant content and engaging on an continual basis.
3. Being Boring or Predictable: When they’re thinking about marketing, some business owners forget that Facebook is a social place where people share things they find funny, interesting or useful with their friends. Think about what kind of content your fans would actually want to share when planning your posts.
4. Failing to Learn about Facebook Mechanics and Tools: Since Facebook is a relatively new medium, some businesses have yet to explore all its functionality and they’re missing out on creating an optimal brand experience.
5. Violating Facebook's Terms: Not only is it critical to know how Facebook works and what tools are available, it’s also important to know the rules of the road — something that many businesses miss.

Update (11/29/11):
Facebook Takes Fall For Merck vs. Merck
This week Facebook said that it ‘made a mistake’ in letting Merck & Co take over a page on the social networking website from Merck KGaA.

The social media behemoth, which unwrapped plans for an initial public offering today, essentially told the two companies to work it out, calling its assignment of the URL to the US firm "an administrative error."

“We have removed the vanity URL,” said Facebook's Andrew Noyes, manager, public policy communications. “Facebook.com/Merck will be unavailable unless and until the two companies mutually agree that one can use it.” Either company, he added, is welcome to create a new username or vanity URL for themselves.

“We apologise for any inconvenience this may have caused,” the Mr. Noyes added.

Click to enlarge



Apparently, an agreement has been worked out. Earlier today, the following posting was made by U.S. Merck on Facebook.



Click to enlarge

Later, this was replaced by a new Facebook page by German Merck (albeit with dated information; again - who's watching the store!). 

Merck KGaA said the loss of the Facebook page deprived it of an ‘important marketing device’, and would continue to look into the matter, but was happy with Facebook’s apology.



Sources:
1. Facebook.com/Merck and "Facebook.com/Search"
2. Neetha Mahadevan and Sten Stovall, "German Merck to U.S. Merck: Get Out of My Facebook," The Wall Street Journal, November 25, 2011
3. John Ribeiro, "Germany's Merck Wants Facebook Page Back," PC World, November 25, 2011
4. Leyl Master Black, "Top 5 Facebook Marketing Mistakes Small Businesses Make," Mashable, April 2, 2011
5. Company Results: Merck; Hoovers.com
6. "Merck and Merck Look to Settle Facebook Naming Dispute," InPharm.com, November 29, 2011
7. Matthew Arnold, "Merck v. Merck Facebook fracas a "tempest in a teapot" says US firm," Medical Marketing & Media, November 29, 2011

Loose Lips Sink Ships

loose lips sink ships.
by ~Kyogre-Kaiba

What's a Company's Biggest Security Risk?  You!!

Employees don't mean to be the primary entry point for hackers. But they are.

According to a recent article in the Wall Street Journal, we are the weakest links.

Hacking attacks against companies are growing bigger and bolder—witness a string of high-profile breaches this year at Sony Corp., Citigroup Inc. and others.

But gone are the days when hackers would simply find holes in corporate networks to steal valuable data. Large companies have grown wise to the threat of hacking, and have spent the past 30 years hardening the perimeters of their networks with upgraded technology.

These days, criminals aren't just hacking networks. They're hacking us, the employees.

"The security gap is end users," says Kevin Mandia, chief executive of security firm Mandiant Corp. The majority of corporate security breaches his firm is currently investigating involve hackers who gained access to company networks by exploiting well-intentioned employees.

Consider what happened in March at EMC Corp.'s RSA security unit, the maker of computer login devices used by thousands of other companies. A hacker sent emails to two small groups of employees that looked innocent enough, including a spreadsheet titled "2011 Recruitment plan." The message was so convincing that one employee retrieved it from the "junk mail" folder and then opened the attachment. Doing so introduced a virus inside RSA's network that eventually gave the hacker access to sensitive company data and enabled later attacks against RSA's customers.

Employees have more opportunities than ever to compromise company information. We not only screw up by clicking on emails from hackers that download viruses, letting them bypass corporate firewalls. We also open a Pandora's Box of security problems by circumventing company tech-support rules and doing work with personal gadgets and consumer-grade online services like Web email and cloud storage services.

Closing these holes is proving very difficult, security experts say. But companies keep fighting. To stop potentially dangerous employee habits, they're testing new tools to keep track of what's happening on their networks and rolling out employee education programs.

Sources:
1. Geoffery A. Fowler, "What's a Company's Biggest Security Risk? You.", The Wall Street Journal, September 26, 2011