Today’s announcement (below) is particularly exciting for the company. Opening a sales office in LA and the VP National Sales hire of Tim Lane from MySpace marks the next phase of growth for SplashCast.

Tim is a class act. During my crazy travel last month, I bumped into literally a dozen people between LA and NYC who worked with Tim at MySpace or EyeBlaster — or from the client / agency side — and they all gushed how wonderful he is, both professionally and personally. It is very clear that Tim has rightfully earned a lot of respect in the industry.

Welcome aboard, Tim!

Digital Media Veteran Tim Lane Sees SplashCast’s Social Advertising Solution Leading The Next Big Wave In On-Line Marketing. Portland, OR (PRWEB) July 14, 2008 — SplashCast™ Corporation today announced that digital media advertising veteran Tim Lane has been hired to head up the company’s new national sales office in Los Angeles. Lane, a 12-year veteran of the Internet advertising industry, has been named SplashCast’s vice president of national sales, responsible for expanding the company’s current position as pioneers and leaders in social advertising solutions. Lane will join SplashCast, leaving his position as southwest sales manager at MySpace.com. His move from MySpace to SplashCast highlights what Lane considers to be a trend within the evolving Internet advertising industry. “Social network sites such as MySpace and Facebook are a treasure trove of opportunity for advertisers that know how to successfully tap into their users,” said Lane. “Brands continue to experiment and struggle to find ways to effectively target this audience. Working with social networks, SplashCast develops unique technology solutions successfully tapping into this audience and delivering results for advertisers. SplashCast is the newest and best solution out there that’s attracting advertisers.”

SplashCast’s Los Angeles-based office will open later this summer. This expansion reflects the company’s recent successes in helping major brands reach social network site users. According to statistics presented on the MySpace music application directory more SplashCast music applications in general have been shared and installed on individual MySpace pages than any other artist-specific applications across the entire MySpace application platform.

In addition, SplashCast’s social advertisements consistently receive click-through-rates 75 times higher than typical banner advertisements used on social network sites. Splashcasts have already been viewed more than 375 million times and spread to 3.5 million web pages.

“We are excited to have Tim join our team and we see his move as further substantiation of our approach to social advertising,” said Michael Berkley, CEO of SplashCast. “Lane has remained at the forefront of the social advertising movement, helping many of today’s largest brands find strategies to reach MySpace users. His expertise will be invaluable in helping SplashCast pave the way for future success stories.”

Prior to his position at MySpace.com, Lane held the director of sales position at Eyeblaster Inc. - developers of rich media advertising solutions. He was also sales manager at Move.com - creators of several top home and real estate-oriented Internet destinations. In his new position, Lane will be responsible for managing SplashCast’s sales team based out of the company’s new Los Angeles sales office scheduled to open later this summer.

The SplashCast Solution

A splashcasts is a powerful opt-in social advertising tool that allows brands to connect and engage with customers. Using an interface similar to a multi-channel TV screen, marketers use splashcasts to distribute videos, games, pictures, and other digital content. Consumers who find a splashcast they like can easily add it to their own profile page. Companies can then easily update all of their distributed splashcasts with new content, as often as they want, whenever they want.

Pivotal to SplashCast’s effectiveness as a social advertising tool is the player’s unique three-way communications capability. Not only can companies push new content out to their splashcast audience, but the audience can also send digital content back to the brand or engage with each other. The result is the formation of online communities that gather via the splashcast player and unite around the product or brand.

SplashCast recently announced a new enhancement to their product that allows marketers to integrate advertisements into new and existing video content. The unobtrusive, opt-in nature of HotSpots ad-insertions works like a product placement advertisement to entice viewers and engage them at a time when they are most prone to the advertising message.

“Whether it’s a brand looking to share content with customers or advertisers looking to sponsor existing content, I believe SplashCast has created the customizable turnkey solution they’re looking for,” said Lane.

About SplashCast

Splashcast Corporation is one of the first companies dedicated to the emerging new marketing field called social advertising - strategies specifically designed to connect brands with users of MySpace, Facebook and other social network sites. Used by Sony Music, Red Bull, Universal, NIKE, AEG, PBS and other top name brands, SplashCast offers an alternative to banner ads, pop-ups and other traditional online advertising strategies that have proven disappointing in their ability to reach this critical audience. For more information on Splashcast visit www.splashcastmedia.com or call (503) 222-5645.

SplashCast is featured in the cover story of this month’s Promo Magazine. Promo is one of the major marketing print publications.

The article is about how big money is starting flow from big brands to hip hop & urban artists - once largely ignored by mainstream brands. SplashCast is the focus of the last 3rd of article. Nice coverage, even if not completely accurate.

Here is the section on SplashCast:

VARIABLE VIRAL VIDEO

The viral side of music videos just got a bit more so with the advent of SplashCast, a social network gaining traction among the major labels.

SplashCast provides a movable window of a performer’s video with a template to enable messaging. Users can transfer their favorites to a MySpace page and share them. They can post videos, pictures or comments and chat with other users.

The service will soon allow insertion of its advertising into the video streams, thanks to HotSpot technology.

In a nod to the popularity of urban music, SplashCast is setting up a site for an established rap star it declined to identify, and expects he’ll be one among many.

“To date we’ve worked with labels,” says SplashCast CEO Michael Berkley. “Now we’re working with artists themselves, particularly in the urban category.”

The urban music channels created by SplashCast get the most viral distribution. The typical user is a tech-savvy African American ranging in age from 14 to 19. Females are in the majority.

SplashCast already has distribution deals in place with Sony BMG, Universal, EMI, Geffen, Warner Bros., MTV, NPR and PBS.

“It’s all about connecting our conversation,” says David Bell, director of digital marketing for Sony BMG’s Zomba label. “It’s about creating new communities, creating communities of our own.”

Bell says songs usually are a bigger draw than artists. But Chris Brown’s is the most popular of the 40 SplashCast channels featured on Sony BMG’s site. Roughly 40,000 users added it to their MySpace or Facebook pages within a month of its posting. It eventually was embedded in more than 75,000 pages.

Visitors “gobble up immediately” any news about stars like Brown, Bell notes, adding that urban music is the subject of a “huge number” of blogs. He says Zomba hopes to build content sites in collaboration with brands.

SplashCast plans a reality series on its “mystery” hip-hopper’s site.

“Once it’s out there on tens or hundreds of thousands of MySpace pages, the fans will be able to influence the reality show,” Berkley says. “It’s enabling artists to create content in a very efficient, cost-effective manner so they can essentially have a videographer follow them around, create this in real time and edit it.”

SplashCast currently owns the top 12 of 20 most recently popular music applications on MySpace. Other than the Coldplay and LilWayne apps, SplashCast apps have more installs than any other artist-specific apps in the entire MySpace platform.

Below is a screenshot of the MySpace Music Application Directory, taken today, with SplashCast apps highlighted in red:

It’s been 18 months since we launched SplashCast (Wow, already?) and we have received a lot of feedback from splashcasters about how to make working in the SplashCast console little easier. Today, we are happy to launch the newest version of the SplashCast console, introduce a cool new feature called “Hotspots” and also update the SplashCast player with a little change.

HotSpot technology

SplashCast’s newest feature is a major breakthrough in video product placement technology. We developed the Hotspot technology to enable a more seamless and interesting integration of advertisements into new and existing video content.

During our testing, we played with many different scenarios where we found the Hotspot technology useful and we thought that this feature could really be used by not only advertisers for marketing purposes, but by everyone who might want an opportunity to provide more information or more context to certain points in a video that they have added to a SplashCast show. So we decided to make this new feature available to all SplashCast users. Check out the Introducing Hotspots and Creating Hotspots tutorials below.

If you think you have a cool use case featuring the Hotspot technology for a specific video in one of your SplashCast shows let us know. We are excited to see what you will do with this new feature and will highlight some of the best uses of this new technology on our blog. Here’s how to share your video using the Hotspot feature with us:

• From your player, play the video with the hotspot
• Click the Send button (the one right next to Comments)
• Send to: support@splashcastmedia.com
• Make sure you enter your correct email address
• tell us why you find the Hotspot feature useful.

Simpler Interface for the Content Management System
See image of new SplashCast Content Management System

Were you confused about where to start when you first started using SplashCast? (Channels? Shows? Players? Where do I start???) Things are whole lot simpler now. Everything starts at the Channel level. When you first log in to SplashCast, select a channel that you want to edit (or create a new one). Then, add a show that you want to display in the More Shows list in the player. We think everyone will find this new interface a whole lot easier. Take a look at the Introduction to the SplashCast Console tutorial below for a quick overview of the changes.

SplashCast Player Channel Guide Change

See image of new SplashCast player

Most of you are used to seeing the Channel Guide button in the upper left corner of the player. Now, instead of the Channel Guide button floating over the top of your content, you will see a button in the lower right that says More Shows.

If you have any questions about the new Hotspot feature or changes in the SplashCast console, please contact us at: support@splashcastmedia.com

Here is a good overview of what we are doing here at SplashCast filmed during our recent trip to NYC for the Advertising 2.0 conference.

Thanks to the folks at Beet.tv.

Watch the interview here or below.

We had a great discussion around the definition of “social advertising” today.

It turns out that it’s pretty darn simple.

A traditional destination website (e.g., ESPN.com) is a public forum. The basic way to advertise there is to post a sign (i.e., a banner ad). That banner ad might be well targeted, or it might be loaded with rich media, but it’s just a sign.

Ads on a blog are no different. Although blogs are broadly considered a form of social media, they are nothing more than destination websites with commenting (which is not a knock on blogs).

Social advertising happens in sites where people are linked together in some way (e.g., as “friends”). The obvious examples are Facebook and MySpace.

[I refuse to use the buzz word “social graph.”]

However, not all ads in social networks are “social ads.”

For an ad to be social, it has to be just that, social. This means that the ad is there because it has been invited. It has voluntarily been taken across the threshold and allowed into the inner sanctum of the profile page, just as a teenager might hang a picture of a Nike sponsored athlete on her bedroom wall.

Social ads are those ads allowed “in the circle.” All others are “outside the circle.”

Ads get invited inside the circle for one of three reasons:

1. The ads are tied to great content

2. The ads have utility, and/or

3. There is an economic incentive.

Most examples fall under category #1 (e.g., SplashCast’s Converse campaign). The art and science around these three factors will be the secret sauce of social.

Additionally, some ads, if not explicitly invited are accepted. For example, a music application tied to a sponsorship is social.

So, why should marketers care about all of this? The reason is simple: the power of word of mouth. Social ads create a powerful form of recommendation within the context of friend-to-friend connections found in social networks. This type of advertising is far more rich and authentic than other forms, and, ultimately, far more valuable.

Conversely, ads that haven’t been invited inside are “anti-social.”

For example, banner ads, however well targeted, appearing on a social network page are anti-social. They are, therefore, typically rejected (as evidenced by their comically low click-through rates and CPMs). Anti-social ads are like the junk mail that you would rather not invite into your house.

See, it’s all that simple.

What’s the hottest, hippest, sexiest thing in digital media right now?

LISA!

I had the very good fortune of experiencing LISA last night at a downtown hotel (no worries, my wife doesn’t read this blog).

LISA, while hot, hip, and sexy, is actually no danger to my marriage. LISA stands for “Lessons in Social Advertising“. It is a traveling panel / networking event hitting the major media markets over the next month: Los Angeles, San Francisco, and New York. Last night it kicked off in Portland, OR, home to the organizers of the event, TAOW Productions, and of course, home to SplashCast.

The LISA events are the first forums totally dedicated to “social advertising”. It is essentially a panel discussion, with lots of free alcohol and twittering. I was a lucky panelist, sharing the stage with social media thought leaders John Furrier (former CEO of PodTech), Hashem Bajwa (Dir. Digital Planning for Goodby, Sliverstein), Dave Allen (Dir. Insights & Digital Media for Nemo Design), and Kent Lewis (President of Anvil Media). Furrier was live tweeting, while on the panel.

What was so great about this 90 minute panel discussion was that it was heated, bubbling with energy! Fists were flying. We didn’t all agree, and we let it be known. The audience interaction was awesome.

What I want to focus on right now is the very first question: what does social advertising actually mean? The usual set of buzz words were tossed about, like “authenticity, engagement, being-part-of-the-conversation, blah, blah, blah.” While all true, I don’t think that helps in people’s understanding.

Here’s the SplashCast definition of social advertising:

Social advertising is getting consumers to tell the brand story, on behalf of the brand.

Simple. Powerful.

It’s not new. It’s long existed in the off-line world, called “word of mouth”: friends talking to friends about products and brands they like / don’t like. Family and friend influence is the biggest factor in purchase decisions; lots of research has shown this. The problem is that in the off-line world, brands have almost no control over this process.

But in the digital world, brands can play a critical role in the process. Friend and family influence (ie, “social advertising”) can now be seeded, augmented, controlled, and most importantly, it can be tracked and measured.

Let’s look at each of those:

• Seeded. Using tools like SplashCast within social networks, brands can now launch embeddable applications that entertain (compelling content, games), provide utility (information, data), and stimulate communication between family and friends (chat, comments, video / photo submissions, message boards, wikis). People put these applications on their social network profile page or blog, and share them with their family and friends. Conversations start within the context of the brand. It begins to organically spread from one profile page to the next, always being exposed to a new set of friends. The brand being invited into and distributed within a consumer’s circle of influence. This is very different from conventional advertising, where the brand is being forced onto consumers.
• Augmented. To augment the organic distribution as discussed above, brands have the ability to accelerate the process. Using conventional media buying methods, they can juice up the distribution of their social applications by placing them in front of their target consumers. An interactive SplashCast channel, for example, can be distributed within Google AdSense, placed on millions of relevant web sites.
• Controlled. Brands have the ability to listen and moderate (if they choose) the conversations that take place and the content that is create within their social application. There is lots of strategy to discuss around this topic… I will leave that for another post.
• Tracked and Measured. A good social application will provide reports on how far the app has spread across the web, where it has spread, who’s viewing it, how engaged are those users, are users getting value out of it, what are they saying, and ultimately (if the application has a commerce component), are consumers making purchase decisions as a result of it.

This is what progressive brands are doing right now, and there are success stories. All of this is cutting-edge in terms of what the technology enables (enabling, seeding, augmenting, controlling, and tracking), but social advertising is not a new concept.

Back to LISA. I will be panelist at the LA, San Francisco, and New York LISA events. Check out the LISA web site for dates and locations: http://lisa08.com.

Fox Interactive Media (FIM) revenues are down by 10% last quarter, and FIM also missed their revenue target for the fiscal year by 10%.

From Techcrunch:

The culprit: There is too much inventory and not enough clickthroughs. As a result both brands (and, more importantly, “friends” on MySpace) remain skeptical. Dumping ads on MySpace without targeting them simply doesn’t work.

True… but I would argue that even highly targeted banner ads won’t solve the problem for MySpace. Click through rates are miserable not so much because advertisers can’t differentiate between a 14 year-old girl versus an 18 year-old boy… but because:

1. Teens are generally not in an “ad receptive mode” when they are socializing and communicating on MySpace or Facebook, and
2. Teens have learned to block out force-fed advertising, such as display ads. This is why opt-in, social advertising is becoming such a compelling alternative for advertisers.

Those of you who follow me on twitter endured quite a barrage of real-time notes / observations from Digital Hollywood, streaming from my BlackBerry on Monday and Tuesday. [Yes, my fingers bled.]

As an experiment, I am posting all those tweets below in this blog. I realize a blog is a very different storytelling / communication medium than Twitter, so it may not translate well. But this does create an archive of my notes that may also be helpful to you.

Panel #1: Deconstructing Advertising
Making choices in a universe of limitless choice: broadband, social networks, mobile, TV, cable, games, VOD, and ITV.

• Adam Stewart is the “vertical director for media and entertainment” for GOOG. Huh? Google has vertical content? Where besides YouTube?
• Future of advertising: moving from “ad buying” to “experience making”, so says Stephanie Sarofian, Digitas.
• Everyone on panel agrees that consumer interaction with brand is primary focus of advertising going forward.
• Accountability / tracking / metrics will become more important in this new world of advertising.
• Gary Hebert from MSFT: branded entertainment is MSFT focus. Really?
• MSFT: ultra targeted ads will be delivered based on what user is doing at that very moment on his/her PC (which web pages, apps are open, etc)
• Discussion has shifted entirely to future of targeting.
• Lack of standards is biggest road block in the value chain of digital advertising.
• Google: advertising is currently in an “evolution”, not yet a “revolution”.
• Biggest challenge for agencies is how to charge for “good ideas”.
• Agencies: how to charge in a post-commission world? Agencies need to figure out how to monetize ideas.
• From brand perspective: too many choices to connect with audience. Overwhelming.
• David Wolf from Accenture: “Facebook has figured out that banner ads aren’t working, and is changing strategies.”
• Wing Pepper of MRM Worldwide: “media technology platforms need to listen to agencies and cooperate more.” Translation: agencies know what brands want, tech companies don’t.
• Google: “media platforms need to find balance between user needs and brand needs. But the user is more important.”
• Wing Pepper (MRM) on widgets-as-ads: the more utility the widget, the better for brand.
• MSFT: give users ability to “save ads” for later consumption to minimize interruption, lessen intrusiveness.

Panel #2: Advertising NEXT
Social networks, user generated video, search, blogs, IMs, podcasts, broadband and mobile — it’s the breakthrough year!

• “Advertising NEXT” panel. McCann Worldwide, Kosmix, Starcom, Quantcast
• “Search engines aren’t smart, they’re mathmatical. They don’t really understand context or intent”. Yet.
• This panel is too heady, non tactical, and a bit pretentious. I’m bored.

Panel #3: Deconstructing Advertising
Making choices in a universe of limitless choice: broadband, social networks, mobile, TV, cable, games, VOD, and ITV.

• Switched rooms to “Monetizing UGC Video” panel with MySpace, YouTube, and Heavy.com. Much better.
• YouTube focusing on more devices for greater distribution. And on maximizing vid quality, based on device.
• The Onion: offsite distribution deals (myspace, youtube, etc) is NOT canabolizing their onsite traffic.
• Broadcast networks actively using YouTube to pilot/test TV shows. Hugely helpful.
• YouTube: leveraging AdSense heavily for distributing video onto blogs, as a service for content creators.
• When agencies create killer content for a brand, who owns that content? Agencies are starting to consider license models — they want to retain ownership of content they create for brands.
• YouTube pre rolls send 40-50% of viewers away. Overlay ads only a tiny bit better.
  
  

Panel #4: Personalized Media Platforms
Widgets, user generated media, news, music, and blogs.

• “Personalized Media Platforms” panel. Pandora, Userplane, NowPublic.com, JD Lasica, CNET.
• Washingtonpost.com: “we’re on the Chumby”. Hey, I love the Chumby!
• Washingtonpost.com: “we have to be everywhere: every mobile device, facebook apps, youtube, etc…”
• Washingtonpost.com: “we are no longer a destination; we are everywhere where the audience is.”
• NowPublic.com: “two types of personalization: content I like, and brands I like.”
• Pandora: “personalization still requires too much upfront investment on the part of user”
• Userplane: “over personalization can lead to an environment when no one learns anything new.”
• Has social media fatigue set in? Do we really care that your cat drank from the toilet?
• Discussion of twitter comes up. Is it valuable? I raise my hand to tell panel I am live tweeting them right now.
• After I speak, the panel shifts attitude and begins talking about twitter with a different spin: it “can” be helpful. Funny!
• Your current physical location in the world is going to be a new layer on top of all these web services…
• …It will be a killer feature that truly connects people in the real world, not just on the web.
• Mobile is going to be primary platform for identity, communication, content, engagement… everything.
• Is privacy dead? No, but we need to move from opt-out culture to opt-in culture. Including ads, I think.
• NowPublic on UGC: people are generally lazy about creating content; don’t package stories well.
• Gotta say that the panels are interesting, but really no new thinking is emerging.
• We are at the “sorting it out” stage in the media evolution, as opposed to “innovation” stage.

Cocktail Party
Where the real social application is applied.

• Cocktail party at Digital Hollywood. Drinking with guy named “Lover”, porn star agent, and guy named “D”, snoop dogg agent.
• Update: networking with who’s who in hip hop. Meeting all the hustlers who pair artists with brands.
• OK, I’ve positioned SplashCast well in adult vertical through cemented relationship with “Lover”. Work done. Bed time now.

Panel #5: Contextual Media & Advertising
Transforming and redefining the relationship between the consumer, advertising, and media platforms.

• First panel of the day: “Contextual Media & Advertising”
• Panelists include Saatchi &Saatchi, NBC Digital, Glam Media, moderated by dude from Ogilvy & Mather.
• Discussion of Glam transformation from vertical content play to vertical ad network.
• Glam focusing on brand advertising rather than performance-based ads.
• Saatchi+Saatchi blah blah blah blah… puleeese, say something new!
• Saatchi one of the last agencies to keep creative and media under same roof.
• TV2.0 is distributing the entertainment to consumers, where they want it in both time and place.
• Discussion on data collection by advertisers.
• What are consumers desiring at a particular time, place, context, etc? Deep data analysis can answer this.
• Data collection by advertisers will provide so much benefit to consumers that it will ultimately win out over privacy concerns.
• Intelligent, personal, friendly ads are better for users than the current state of display ads.
• Saatchi working on tech that not only reads your mind, but can make purchase decisions for you.
• Ha! That was a joke.
• Ah, now talking about the topic of “engagement”.
• These guys just talked for 10 minutes on “engagement” and said absolutely nothing!
• Engagement is more about the creative than the media buy. Engagment is about emotional response.
• “Ad technology does not create engagement, content does.” [I, for one, do not totally agree with that.]
• Glam: syndicates content to their 500 sites, not just ads. Glam editors pick best stories to syndicate.
• (My comment) Glam focused 100% on editorial content to create engagement, rather than creating more compelling advertising units.
• Saatchi: fresh, always changing content is critical. Big task! (This we know at SplashCast)
• In-video, contextual ads is holy grail.
• Meta tagging of video is hella big task that no one still has an answer to (GOOG as well?).
• How to monetize social networks? How do advertisers take advantage of this? Is there an economic model?
  
  
• YES! Social network advertising “must be user initiated”. Opt-in ads.
• “Social ads need to provide utility or entertainment to users”
• “Contextual Media & Ads” panel grade: C-
  
  

Panel #6: Social Media & User Generated Media Economy
The content, personalization, lifestyle, and advertising phenomenon.

• New panel “Social Media & UGC”: metacafe, kickapps, aol, youtube, redpoint ventures
• Metacafe: 30 million uniques, largest indy video sharing site.
• KickApps represented by my buddy, the VP BD, who shared the panel with me at Innotech last month.
• YouTube thinks it is a platform, not a destination. Lots of video inputs, from all over the web, and lots of distribution outlets.
• That is, youtube doesn’t think of themselves primarily as a destination.
• Redpoint was early investor in MySpace.
• Have social sites replaced portals? Yes. But more importantly: home pages in general are dead.
• Users come to content sites not via home page, but directly to content sub pages via search / sharing.
• This limits the site’s ability to program content and direct flow of usage.
• Redpoint: brands are still uncomfortable with social media, but they know they have to take the leap.
• Redpoint is really interested in platforms that enable users to become ambassadors for brands.
• Redpoint guy is essentially saying SplashCast’s positioning / value prop is the future of advertising.
• “Is there an ecommerce biz model for social sites?” yes, virtual goods / micro payments is interesting.
• Metacafe: people don’t pay for content on the web. [earth shattering news]
• YouTube in-video overlay ads are so-so performers.
• Redpoint: video ads need to evolve into interactive experiences, rather than static 15 or 30 sec spots.
• Brands can buy UGC contests on YouTube.
• Metacafe got 3K users to embed a metacafe contest widget, which they call a success. Received 3M views.
• Redpoint: “Google would admit that they are NOWHERE with brand advertising. Market still wide open.”
• Social sites have huge audiences but can’t monetize. AOL can help them, hence their buying spree.
• Facebook and MSFT struggling to make money from huge Facebook audience. Banner ads aren’t the solution.
• I believe Metacafe is in trouble. Not enough differention and still no solution to UGC monetization.
• Someone will buy Metacafe for their 30 million users , but Metacafe has no future on their own.
  

Panel #7: Widgets as a Platform
Content, advertising, communications

• Sorry for the break in the stream. Here we go again: “Widgets as Platform”.
• RockYou, Newsweek, Gydget, Clearspring, Mochila, Slide.
• Discussion about difference between a widget and an application. Boring. Who cares?
• The panel is acting very defensive, arguing why widgets are not a fad.
• What are the widget business models? CPM, fixed sponsorship, cost per install.
• ..Widget-as-ad is the newest model, possibly most promising.
• What about MySpace risk? They have the control. Slide says risk is mitigated because MySpace needs Slide.
• Slide: widgets need to do more than just give content; they need to enable communication between friends.
• RockYou: the more simple, the more viral. The more universal the audience, the bigger the audience.
• Clearspring: measure success based on realistic expectations. If widgets outperform web site traffic: win.
• WidgetBox: development and analytics of widgets will become commoditized.
• RockYou: highest CPMs go to apps with most engagement, and most vertically targetted.
• “Slide is never going to develop branded widgets for brands.”
• “Slide is going to let brands insert themselves into Slide apps.”
• RockYou: selling installs to other app developers is primary biz model.
• WidgetBox business is their consumer-facing widget directory. Different type of distro than Clearspring.
• Gydget leverages existing fan-bases for providing their clients widget distribution.
• I like the Gydget guy (vp of biz dev). Geniune person. Refreshing.
• None of the widget panelists are investing in mobile. They don’t see the viral potential of mobile.
• All panelists agree: use traditional CPM to sell widget distribution. Can’t charge for viral, it’s bonus.
• Widget panel over. I will be on the Advertising 2.0 version with same panelists in NY in June.

Panel #8: Hollywood 2.0 (I was a panelist)

• I was on a fantastic panel last night: “artists vs. suits”, discussing tensions between creative and $$.
• I was a “suit”. I’ve been on both sides throughtout career, sometimes at the same time.
• I got to share the stage with LonelyGirl15 creator and grammy-winning rapper Chamillionaire.
• @mashable was in attendance (for free dinner?). Good to finally meet Cashmore face-to-face.
  

FYI, I am live blogging via Twitter the panel sessions at Digital Hollywood. I am covering all discussions relating to advertising 2.0.

Get all the updates via Twitter; follow me here: mike_berkley.

Cheers,
Mike

We’ve been closely following the developing Microsoft/Yahoo! deal over here at SplashCast.

This is a HUGE story. It’s the digital media story of the year.

Oh, and it’s not boring as charming French blogger Loic Lemeur asserts (with a few under his belt).

I’ve been hearing all kinds of convoluted theories about what is happening. My guess is that the simple answer is probably correct: Microsoft isn’t done. Microsoft realizes that it represents the best option for Yahoo! and can certainly out wait them.

As expected, YHOO is down big, big, big on this sunny Monday morning. This is what Microsoft wants to see. It’s a big stock market “I told you so.” Microsoft let go of the rope and Yahoo! fell.

So my guess? Microsoft will jump right back in three to four months down the road and pick up a Jerry Yang-less Yahoo! up for a much lower price.

That’s what I think.

It’s a lot more fun to speculate about other scenarios, however.

Microsoft needs traffic and advertisers. They are proven experts in software development. They haven’t been able to create the other two big pieces: massive traffic and advertiser relationships. There are some interesting non-Yahoo! traffic options for Microsoft.

The most obvious ones are the mega social networks: Facebook and MySpace (less interesting would be AOL/Bebo).

Yahoo! is last year’s hot restaurant. MySpace and Facebook represent the future (as far as anyone in this business can see the future). Traffic and engagement metrics point to the social networks as the place for advertisers to be.

Of course, it’s not as simple as saying Microsoft should pick up Facebook or MySpace. They would have to do some serious wrestling to pull the MySpace (or AOL/Bebo) away from Google. Perhaps it is possible, but it seems highly unlikely.

Facebook might be Microsoft’s next best option. Microsoft already owns a chunk of equity and owns the display advertising real estate on Facebook. So, why not play this out sooner versus later and purchase Facebook now?

There are several reasons why Microsoft might rather wait. First of all, the valuation will be crazy. However, that’s likely not enough to scare off Microsoft (especially if Facebook is viewed as one of the last great traffic sources).

Secondly, advertisers have not yet figured out a way to effectively generate revenue in the social networks. CPMs are very low. Banner ads have performed horribly there. That being said, there are other ways to generate advertising revenue (e.g., sponsored applications). This feels like a challenge that Microsoft might well be up for.

All that being said, my guess is that Microsoft will be standing by ready to scoop Yahoo! up off the playground asphalt on the cheap. If, however, Ballmer has seriously walked away from Yahoo! I’m guessing that Microsoft makes a play to acquire Facebook. If so, things will get even more interesting in terms of the ongoing effort to effectively generate revenue in the social networks.

Interesting times in digital media. Well, when hasn’t it been interesting in this business?

Update: In my belief that the Microsoft/Yahoo! deal will still happen (and at a lower price) I’m in the 15% camp.

The term “authenticity” is something that we social media types toss around like a baseball. Here’s a story to illustrate its meaning:

Seen the ads for the much-anticipated, sexy and action-packed TV series “Scarlet”? The ads are all over the web, as well as on broadcast TV. Check out the ad on the Onion News Network (”Scarlet” is currently the sponsor). The ads seem to be everywhere I look.

Well, guess what? It’s all a big hoax, thought up by Agency.com.

From the Wall Street Journal today:

On Monday night, about 500 people planned to gather at the Pacific Design Center in Hollywood for a swanky screening of “Scarlet,” a new TV series from director David Nutter that stars Natassia Malthe.

It looked like a standard new-show screening, right down to the 32-foot-long red carpet and Wolfgang Puck catering. But the event, part of a $100 million global advertising and marketing campaign for LG Electronics, was actually an elaborate ruse. Attendees were expecting a screening of a new TV series called “Scarlet,” but “Scarlet” was in fact “a new series of TVs” with a red back panel.

The marketing hoax is an attempt by the south Korean electronics company to overcome the commoditization of the television business.

As part of the public relations plan for the show, LG has had Ms. Malthe drum up publicity b attending red-carpet events, including Fashion Week in New York, the Bafta awards in London, and several film premieres in Los Angeles. The result: plenty of online, TV and magazine stories about “Scarlet”.

When I read this, I first thought: “Rock on! Now that’s some bold, creative marketing! We could use some of that!”

Yet… no. This is stuff that PR & marketing people get all giddy over. But it’s stuff that consumers hate. Breaking news, folks: consumers do not like to be lied to by corporations. Even worse, they hate to be manipulated by advertising.

We live in an age where brands have to be honest, because the truth is too easily exposed. This is where authenticity, a favorite buzz word of social marketing pundits, comes into play. Consumers generally want to drink the Cool Aid; they want to believe in the brand message. And by doing so, they are placing their trust in the brand, often putting themselves at risk (most of the time it’s social risk, but in some cases it can be physical risk). If the brand betrays that individual’s trust, they’ve lost him/her forever.

If a brand is concerned that being authentic might expose a flaw or weakness, then those are deeper issues that need to be fixed on the back-end (ie, within the product or in the board room), not on the front-end. Creative marketing no longer works as a band-aid; consumers have gotten too smart and too resourceful for that.

Yo, youth marketers: LISTEN UP! Online marketing is in the midst of a major transformation - one that is quickly changing the way businesses connect with target demographics and build brand loyalty. There is mounting evidence of the growing ineffectiveness of traditional online marketing, especially on sites that attract youth and young adults, like social networks. Those not embracing newer strategies will be left behind.

Banner ads, pop-up displays and other traditional online advertising strategies have proven to be disappointing in their ability to reach users of MySpace, Facebook and other social network sites. This has created growing demand for an entirely new category of marketing called social advertising. Those who ignore this technology-driven phenomenon will be left behind in efforts to reach young consumers.

Social advertising uses techniques specifically designed to reach the millions of active users of social network sites. Unlike intrusive online advertising, social advertisements are based upon opt-in strategies that attract and engage its target audiences rather then frustrate them.

A key feature of SplashCast technology is it’s three-way communications capability. Not only can companies push new content out to their splashcast viewers, but the viewers can send digital content back to the brand or to each other.

Social network sites are all about community and SplashCast makes it possible for advertisers to be a part of that community. In fact, splashcasts create a conduit connecting users from one social network site to another.

Folks, the trend is clear: today’s young consumers are watching far less TV and spending an increasing amount of time on the Internet. If advertisers hope to reach this key demographic, they must understand that their marketing strategies need to address the changing viewing habits of their target audience. The recent explosion in social advertisement technology has created new possibilities for reaching this audience. Those that ignore these changes will surely be left behind.

Earlier this afternoon TechCrunch published a summary and analysis of the Web 2.0 Expo panel discussion, “The Facebook Platform: Finding Success in the Facebook Economy”. The general consensus among the panelists is that Facebook application developers are struggling to generate meaningful revenue via advertising and that there isn’t much hope on the horizon.

All panelists agreed that CPM rates on Facebook are miserably low, perhaps averaging 15 cents. Developers have begun experimenting with other sources of revenue, such as the sale of virtual goods and premium services, but advertising still generates more than 80% of the platform’s revenue.

Yes, $0.15 CPM is absolutely hideous, borderline criminal! That’s $150 bucks for 1,000,000 ad impressions.

But folks, understand this: whether they appear above an application or in a side column, BANNER ADS SUCK ON SOCIAL NETWORKS. Period. The issues that developers have in monetizing applications is the same problem that Facebook itself has monetizing all their other pages. Banner ads are unwanted, irrelevant, anti-social, and essentially blocked out by teenagers and young adults.

Application owners, just like Facebook and MySpace themselves, need to think beyond the banner ad. In social networks, ads need to “become part of the conversation” (the new social media cliche). The line between content and ad needs to blur, or vaporize altogether. Ads need to become personal, social, and dynamic. And ads need to provide immediate value to the consumer, either in the form of utility or entertainment. Yes, ads must work harder in social networks to be accepted by this incredibly discerning audience.

Otherwise 10,000 application views might buy you a pack of Hubba Bubba bubblegum.

In February AOL acquired Goowy Media, a widget platform with great technology, but not a tremendous audience when compared to competitors Clearspring and Widgetbox. This morning Jenn Van Grove published a great post documenting Goowy’s history and details behind its acquistion by AOL.

Here’s a snippet from that post, highlighting the primary reasons why AOL acquired Goowy and why AOL is bullish about widgets:

AOL is interested in widgets because they’re desirous, now more than ever, to allow users to spend their time online wherever they choose. Secondly, AOL is focused on driving the AOL brand to areas outside of AOL web properties. And, AOL is extremely interested in using widgets as advertisements (don’t forget about Platform A, AOL’s ad-buying platform). Essentially, AOL wants to leverage Goowy’s expertise around widget tracking to serve widgets as ads in traditional 300×250 ad space. With widgets as ads, the possibilities for creating more engaging content are limitless; widgets can be micro applications that play trailers, or allow users to download ringtones, widgets (as ads) can also be embedded anywhere, making the advertisers return on the investment increase exponentially if the content is good enough that users decide to take the particular ad/widget and share it elsewhere.

The widget-as-ad model is a concept we believe very strongly in, and is a critical component of SplashCast’s business model. In fact, I believe it is going to transform how brands think about advertising within social platforms, especially where ads can access the social graph. Peer-distributed advertising is a killer app. But social distribution is more “art” than “science”. How to leverage the social graph most effectively? How to hook and engage consumers? And most importantly, how to compel them to pass the ad along to all their friends? These are the questions we ask ourselves every day. It is where SplashCast has invested most deeply over the last year. I do not know how well Goowy’s widget platform performs in the context of social distribution, but the track records of other widget platforms (the one’s mentioned above) are not stellar in this regard. These widget platform companies have invested most their attention and resources on data tracking and reporting, rather than optimizing social distribution. In the end, we believe data reporting and tracking will be a commodity (easily built or bought), while social distribution is a “secret sauce”. We believe this is a primary difference between SplashCast and other widget platforms like Goowy.

By the way, Goowy’s CEO Alex Bard is a really great guy and deserves a ton of accolades for what he did with Goowy.

We are seeing a trend of “green content” becoming an important media category. We have been pleasantly surprised by how much “green content” there is out there, how how much demand there has been over the last 6 months for green SplashCast channels.

Below are three of our favorites.

According to Techcrunch our former director of content, Marshall Kirkpatrick, is the 5th top tech blogger. Congratulations, Marshall!

This ranking was calculated on the degree of presence on the news tracking web site TechMeme, in the last 30 days. Conveniently, three of the four top spots went to TechCrunch bloggers. Huh.

According to Techcrunch our former director of content, Marshall Kirkpatrick, is the 5th top tech blogger.  Congratulations, Marshall!

This ranking was calculated on the degree of presence on the news tracking web site TechMeme, in the last 30 days.  Conveniently, three of the four top spots went to TechCrunch bloggers.  Huh.

Google’s impressive quarterly earnings report, showing a 30% increase in profits over first quarter last year, was buoyed by strong performance in search ads. This shows insulation from a deteriorating economic environment, which is great news for the online ad industry as a whole.

However, SplashCast is particularly interested in the performance of Google’s display (banner) ads, especially within MySpace. Here is a quote from yesterday’s AdAge write up:

Google executives also touched on social-media inventory monetization, saying that it has applied many new technologies, including demographic targeting, to the inventory. Three months ago, Google executives made comments about social-network inventory being more difficult to monetize, which set off speculation about whether the Google-MySpace ad deal was faltering.

“Demographic targeting has been very successful,” said Larry Page, president of products. “The challenge and opportunity is there’s a huge amount of inventory. … It takes some time for advertisers to realize they’re there and start targeting effectively.”

Improved demographic targeting may marginally help Google in MySpace. But we believe display ads in social networks have more serious issues. Click through rates are miserable not so much because advertisers can’t differentiate between a 14 year-old girl versus an 18 year-old boy… but because 1) teens are generally not in an “ad receptive mode” when they are socializing on MySpace or Facebook, and 2) teens have learned to block out force-fed advertising. This is why opt-in, social advertising (ie, SplashCast) will be such a compelling alternative for advertisers, and why Google, Yahoo, and MSFT will need a similar solution.

Google’s impressive quarterly earnings report, showing a 30% increase in profits over first quarter last year, was buoyed by strong performance in search ads. This shows insulation from a deteriorating economic environment, which is great news for the online ad industry as a whole.

However, SplashCast is particularly interested in the performance of Google’s display (banner) ads, especially within MySpace. Here is a quote from yesterday’s AdAge write up:

Google executives also touched on social-media inventory monetization, saying that it has applied many new technologies, including demographic targeting, to the inventory. Three months ago, Google executives made comments about social-network inventory being more difficult to monetize, which set off speculation about whether the Google-MySpace ad deal was faltering.

“Demographic targeting has been very successful,” said Larry Page, president of products. “The challenge and opportunity is there’s a huge amount of inventory. … It takes some time for advertisers to realize they’re there and start targeting effectively.”

Improved demographic targeting may marginally help Google in MySpace. But we believe display ads in social networks have more serious issues. Click through rates are miserable not so much because advertisers can’t differentiate between a 14 year-old girl versus an 18 year-old boy… but because 1) teens are generally not in an “ad receptive mode” when they are socializing on MySpace or Facebook, and 2) teens have learned to block out force-fed advertising. This is why opt-in, social advertising (ie, SplashCast) will be such a compelling alternative for advertisers, and why Google, Yahoo, and MSFT will need a similar solution.