You’ve seen the scantily clad cocktail waitresses in the casinos.  The sexy woman posed on the hood of a car.  We know that sex gets men’s attention.

But does sex actually sell?

A new research study by Brian Knutson of Stanford suggests the answer is yes; at least, that heterosexual men are more likely to take financial risks after being subjected to positive emotional stimuli—in the case of the study, erotic photos of a man and woman.

Why should digital marketers and publishers care?

As digital content and advertising become increasingly intertwined (here’s one of many posts on that topic), and marketers and publishers get better about measuring the effectiveness of their efforts (read more in our mini-eBook on social media performance management), we can expect the trend toward sex in advertising to be further invigorated (pun intended), at least in advertising that targets men.

And as social media becomes an increasingly effective marketing tool, we can also expect more of the digital equivalent of those cocktail waitresses.  The Stanford study alluded to the particular relevance in online gaming (gambling) businesses, and I noticed the effect firsthand when checking out XuQa.com, an online casual gaming community co-founded by Murtaza Hussain, co-founder and CEO of PeanutLabs and the subject of a recent DigitalPodcast interview.  Many of the most popular gaming rooms in XuQa are hosted by very attractive women (or at least hosts with photos of very attractive women), and the formula seems to be quite successful there.

By the way, for our female readers (my wife included) who by now are gloating over the superiority of your half of the species, beware:  Mr. Knutson is planning to test women’s responses in the future.

The Association for Downloadable Media, an organization whose purpose is to help provide advertising and audience measurement standards for episodic and downloadable media, announced today a proposal for advertising standards at Ad:Tech San Francisco.

A cross section of podcasters, agencies, device manufacturers and others interested in monetizing downloadable media have developed the proposed standards.

Why do we need standards for downloadable media?

• Lots of podcasts, lots of sponsors, lots of options and confusion
• Like IAB display ad unit guidelines for podcasts
• Allow sponsors to create 1 advertisement for multiple podcasts

The panel believed that the standards should be

• Simple
• Inclusive
• Acceptable

The group is proposing three types of ad standards: Insertions, Content Participation, and Collaterals

Insertions (as provided by advertisers)

• Definition: pre-recorded file provided by sponsor
• Time up to :10, ;15, :30, or :60 seconds
• Location: Pre-roll, post roll mid roll
• Frequency: Variable or time period
• Audio: 128k stereo/64k mono mp3, Sample Rate: 44.1 khz
• Video: H.264 MP$, Aspect 4×3 or 16×9 SD and HD

Content participation

• Definition: When an advertiser’s message is included as part of the audio or video podcast content.
• Time: Variable from :1 second to full episode
• Location: Pre-roll; mid-roll; post-roll; or integrated within one or a series of episodes
• Frequency: Variable by number of episodes per month; variable by number of insertions per user per month; or fixed per channel/feed per month.

Collaterals
All the other real estate that a podcaster has that may be included as part of an advertising or sponsorship package, or as separate items a lá carte.
Examples

• Show notes on podcast website
• ID3 tags in podcast episode file
• Album Art Cards
• Link and banner in enhanced audio podcasts
• Overlays, underlays in video podcasts
• Web banners, buttons, text links, hyperlinks (using IAB standards)
• Email sponsorships
• Press Releases
• Product sales (CDs, DVDs, merchandise)
• Signage/Outdoor (for retail)
• Brochures, flyers

The second area that the ADM focused on is developing a set of proposed measurement guidelines for audience traffic.

The Association of Downloadable Media is recommending compliance with one of two proposed methods to determine true download measurement. These two methods are Native Server Measurement or Third Party Measurement.

In order to comply with these guidelines, publishers would clearly state their download measurement methodologies to interested buyers. Buyers seeking to work with ADM-compliant publishers would be entitled to request and receive these download methodologies. The goal is to achieve high levels of confidence around the metrics for both parties.

Third Party Measurement (TPM)
A Third Party server is the intermediary between the Native Server and another Third Party Server. Third Party Measurement refers to the files measuring the initial download requests as received by a third party server to be delivered to the requester. Because the Third Party server is a constant, it may uniformly measure download statistics across multiple hosting services.

Data logged by third party servers include request information about the media being downloaded. Each request contains the following data that may be utilized for analysis.

• IP Address - Unique Internet address of the user consuming the media file.
• Time Stamp - Time at which the request was made for the media file.
• Request - The request specifies the media file requested and provides the method at which the request should be handled.
• HTTP Status Code - A technical code defined by the HTTP protocol that determines the status of the request.
• Referrer - Location where the request came from.
• User Agent - A unique value that identifies the service or application making the request. e.g. web browser such as Internet Explorer, podcatching agent such as iTunes, a web bot such as Google.
• Byte Range - This is the range of start and end bytes requested by the media consumer.

Native Server Measurement (NSM)
The Native Server is the actual end point where the media is hosted. Native Server
Measurement refers to the log files derived from the Native Server. It may include
the amount of data that was transferred in each log entry, and therefore may provide information to derive more than simple download statistics.

Data logged by native servers include request information about the media being downloaded as well as the amount of bytes transferred during the download transaction. All the data listed above (available to third party servers) applies to Native Servers. In addition, the following data may be utilized for analysis.

• Bytes Served - This is the amount of bytes that have been transferred to the media consumer in a given request. Depending on the type of request made, the bytes served may be less than or equal to the size of media file.

The data contained in either native or third party server log files does not necessarily mean that the data is analyzed. The method of analysis used varies.

Analysis Techniques and Factors

Both types of measurement include analysis techniques, in order to calculate download measurement. These analytic techniques are used to determine the validity of actual downloads (versus duplicated or aborted download attempts)

There are a number of factors used in any given technique to analyze log files.

• IP Address - The IP address may be used to determine if the request is unique or a duplicate. It may also be used to determine geographical information of the media consumer.
• Time Stamp - The date and time may be used to determine if the request should be counted.
• HTTP Status Code - The appropriate HTTP status code is examined to determine if the request should be counted.
• Bytes Served - The value may be used to determine if the media was completely downloaded. (Note: This information is only available from native server log files.)
• Referrer - The origin of the download may be used to determine if the request should be counted. e.g. media that is auto played upon loading a web page may be removed or reported.
• User Agent - The identifier of the application or service consuming the media may be analyzed to determine if the request is unique.
• Byte Range - The range of bytes requested in a given request may be used to determine what portion of the media is requested. When analyzed across multiple requests, the information may provide an accurate assessment to determine if the media was completely downloaded.

The ADM does not require a specific combination of factors or techniques, instead requires that you use analysis that’s appropriate to the business at hand in a way that provides high confidence data and you can explain the process used to create the data. It is left to any company following these guidelines to create techniques that fit their situation. However, it is strongly recommended to include the IP Address in analysis.

These types of measurements can be provided by services like Wizzard Media or PodTrac. UPDATE: ADM members RawVoice and Volomedia are also providing this kind of measurement service.

The proposed standards are open for public review and comment through May 16, 2008. Send to comments and feed back to info@downloadablemedia.org.

Once ratified will be reviewed bi-annually by ADM.

Technorati Tags: downloadable media, ADM, Association for Downloadable Media, Advertising, Standards

Andrew and Alex joined Forrester Research for its 2008 Marketing Forum. This article is the second in our series from the forum focused on customer engagement in a digital media world.

Realizing Your Return on Empathy (ROE)

Steve Kerho, VP Analytics, Organic
Mark Kingdon, CEO, Organic
Creating effective online (and offline) marketing solutions starts with a deep, emotional understanding of your customer segments and their needs - in other words, “empathy” for your customer “personas”. This empathy serves as a critical guide in designing online and other touchpoints, and the personas also support breaking down how you measure and respond to online performance.

Mark led off the sessions with the observation that as marketers, we have a lot of data about customers, but we need to get beyond the data to “touch” our customers.

He then solicited audience feedback on the importance of understanding customers in marketing through a uniquely engaging technique. When we sat down in the conference room, a pad and a branded pen were keeping each of our seats warm. The pens were laser pointers, and Mark gave us a brief tutorial on turning them on and aiming them without blinding our neighbors.

Mark walked us through a series of slides filled with questions and multiple choice “answer” targets; the volume of laser points bouncing around each target quickly illuminated audience response. The survey responses told us that collectively, we thought it important to find an edge in our marketing and to develop and understand customer personas to refine marketing approaches, but that we had a way to go in implementing these techniques.

Organic believes that getting to personas is so fundamental to their work that each year they send staff down to Vegas for “persona work”. The group breaks down into seven teams that are each assigned one of seven sins. Each team is tasked with observing people indulging in their target sin, and then developing a campaign for that persona. The exercise is all about getting to empathy, getting everyone on the same song sheet around what’s driving the consumer, their behavior and their needs.

Organic sees four steps in order to take advantage of empathy:

(1) Know your consumers well enough to develop detailed personas,
(2) Design web experiences around those personas,
(3) Tailor all media and touchpoints to these personas, and
(4) Know and optimize against “Return on Empathy”.

To get to step 4, marketing needs to secure management commitment to overcoming the challenges of siloed organizations, to develop a process for optimizing efforts, and to connect campaign objectives to metrics.

Why go through all this effort? Because empathy pays off, as Steve demonstrated with three case studies:

Jeep Patriot. The business objectives were to create familiarity and purchase intent for this all new vehicle in a crowded segment, targeting younger, internet saavy buyers. The solution was a very interactive online experience, where they shot 40 or so minute-long video segments for about the cost of a traditional 30 second spot. These segments comprise an interactive film, which viewers could enter and then steer their experience and outcome. Consumers were introduced to the story starting with a TV broadcast spot, then rich online ads, targeted emails, and theatrical trailers. In total their was about an hour of content, and the vehicle and its features appear in every scene. Their campaign had great results – Jeep more than doubled its target for unique visitors, with 80% of them new to the Jeep brand, enjoying an average viewing time of 5 minutes with 40% of visitors staying for over 10 minutes.

Bank of America’s No Fee Mortgage Plus product. The business objectives were to create familiarity, awareness and sell-through. They identified one persona familiar with the mortgage process, and another unfamiliar with it, and customized the site experience accordingly after three very simple multiple choice pre-qualifying questions.

Coach. The business objective was to increase the sales of bags online. The empathy process highlighted a key “persona” issue around women’s discomfort buying bags unless they are sure that they fit. The solution was to create an online bag “sizer” that drove a substantial increase in sales and reduction in returns.

After the case studies, Steve walked us through an example of metrics supporting “ROE” on site design. The example showed how the measures were built up, and demonstrated the differential impact on return against identified personas versus non-personas.

The session was running late so there wasn’t much time to discuss the ROI calculations, below.  Deeper reflection reveals a number of interesting questions, for example, why calculate ROI based on revenue rather than contribution margin, why only amortize the redesign over one quarter, and whether the redesign impacted other drivers of value such as new customer acquisition and retention rates.  You might choose a different set of assumptions for your business, but in any case, the persona-level analysis of differential site performance provides an important basis for objectively evaluating ROI.

The bottom line: executed well, empathy pays.

Q&A Discussion

You mentioned that the Jeep example exceeded traffic goals, but how does one go about establishing those goals? You end up in the forecasting business, and need to use historical performance offline and online as the baseline that you are trying to meet or exceed, for example CPM through traditional media (even though may be lower engagement, more eyeballs) You can also look at search traffic and value as another baseline for the value of the consumers you bring in.

How difficult is it to sell-in the work of building personas to clients? Actually, doing so in increasingly easy, and we have had some clients asking only for personas, not the follow-on work.

What is the role of customers in participating in site design? Customers are an increasingly important part of the process. In fact, we are working with a client now to involve customers in their core product development process.

How are you developing personas beyond traditional observations? We have deliberately selected low-tech workshops versus high tech means to develop personas, which surprises many because so much of what we do is high tech. That approach may evolve over time.

Does all this work to actually increase sales? Our clients have realized a high correlation between engagement, purchase intent, and buying behavior.

Tony Ponturo, President and CEO of Busch Media Group, spoke at the Future of Television conference. Tony observed the increasing complexity of marketing as the number of channels has exploded from the basic three back in 1972 to hundreds of thousands today with the web.

At the same time, the consumers are getting more sophisticated, diverse and elusive. Tony describes how the demographics of college markets are changing rapidly, in particular the increasing share of women in the college ranks and how that will change their marketing in the future.

He goes on to describe the rise of UGC and changing consumer media habits. Today, adults 21-34 consume over 58 hours of media each week (28+ hours on TV) . The internet has risen to 6.4 hours per week on average, and it consumes an average of 8.5 hours per week for those that have Internet access.

In the 80’s and 90’s, “consumers had to come to us”. In the latter 90’s through today, you need to go to the consumers. You need to find the consumer. While 90% of media spend is still on traditional sources, almost every deal needs to integrate into the digital space in some way.

Tony described the example of Swear Jar, which was originally done for the Super Bowl, but was considered too racy for TV given the bleeped out language. They bought 6.2 million views on Yahoo and Break. It then got 2.7 million more views on YouTube.

Tony showed the original internet spots for the Dude campaign which allowed the creative team to develop something unique, which then led to TV commercials with the same theme.

TV strategies are focused on Tivo proof TV such as big events and sports which have managed to retain their audiences. He sees an increasing shift to cable spend. Cable is up form 19% in 1998 to 30% in 2008.

Another major theme has been an increase in product placement in TV and movies.

The integration of TV and online is important. He describes how they get 32 million views online after the Super Bowl.

TV is as strong as ever, but there is now more need for added value and consumer engagement.

In addition to TV, Tony sees product placement and the convergence of broadcast marketing with online publishing as important brand marketing priorities going forward.

Technorati Tags: Future of Television, brand marketing, Busch Media Group

Television is changing a lot and television advertising is changing with it. Tivo, DVRs and the internet are changing the way content and advertising is consumed. It changes the way TV ads need to work. This panel explores some of the changes they see on the horizon.

Panelists
Karen Bressner, SVP, Advertising Sales, TiVo
Eric Hadley, Chief Marketing Officer, Heavy Corporation
Rick Mandler, VP, Digital Media Advertising, Disney/ABC Media Networks
Robert Riesenberg, President & CEO, Full Circle Entertainment
Moderator: Joe Adalian, Television Editor, Variety

What’s the future of the 30 second spot?
The 30 second spot is still an important marketing tools and will remain so into the future. As long as television is important spots like 30 second or 15 second ads will be important. Karen from Tivo says they can enhance the 30 second spot by making it interactive. Eric points out that the importance of TV will change for different segments as young males are using the Internet with increasing intensity on sites like Heavy.com. He says the key is to respecting the viewer and make the advertising relevant and engaging.

How important is diverse portfolio in marketing?
In this day and age, when a network has a show doing 7-8 share its a success. It demonstrates the fragmentation of advertising channels and the need for marketers to explore a diverse set of channels to find their audience.

What one thing should change, what would be the new rule?
As the networks have jumped on the bandwagon of integration it has become more commoditized. The integration needs to be more strategic and in harmony with the show as opposed to something that is just a media deal done for an advertiser wanting integration. Rick would like to see more aggregation of agencies to make it easier to coordinate marketing and make it more integrated. Eric suggests that measures need to be tied to the intent of the campaign, not just what can be measured. Just because you can measure impressions or click throughs does not make it a good measure for everything.

What new capabilities will brand marketers need to become publishers of relevant and engaging content?
Need to become masters of what data comes from set top boxes and DVRs to understand what works in different environments. There is also a crying need for different kinds of resources within the marketing infrastructure. Interactive capabilities are still very underdeveloped and need to improved. Brand marketers will need to integrate these new capabilities with their traditional story telling strengths to make interesting content.

Should brands rent or own their content?
Rick suggests that brands should rely on rented content. Content is not what advertisers do so they should leave it to the traditional content producers. Eric suggests that it doesn’t matter whether you rent or own it. What matter is that you need good content wherever the content comes from.

Technorati Tags: Future of Television, television, advertising

As a follow up to our earlier post of Think Publishing, Not Podcasting, I found Jason Calacanis’s post asking “Are ad networks for loser/weak publishers” a must read for anyone serious about building a publishing business.

Jason argues that if you are serious about building a publishing business you need to take control of your advertising sales. I could not agree more. Jason says that if you’re under $250,000 in revenue then ad networks are ok, but over $250,000 in revenue you should hire a sales person and build your own advertising revenue stream.

I think you should start a lot earlier - If you have a focused, high value audience you can get premium or even Super Premium ad deals. Just look at Grape Radio as an example. They have a great, high value audience and they get premium rates given their audience size.

The problem comes from the huge surplus of inventory available and publisher’s desire to get some money for that remnant inventory. This remnant inventory can be a big problem for publishers.PaidContent puts the rate at between 20-70 percent.

wide range of avails that go unsold at a given time can run from 20- to 70 percent of a site’s inventory

When you turn to ad networks to fill this remnant inventory, you get the same ads as everyone else, they probably won’t fit with your brand and you diminish the value of your direct sales.

Jason points out that giving away inventory creates a major problem. I agree completely.

Many of my friends give their inventory away to 3rd party networks and I’ve told them in no uncertain terms they are fools–really, really fools. In order to be a REAL publisher you must have control of three relationships:

1. Your writers
2. Your readers
3. Your advertisers

And I would add to that list - your community which consists of the relationships between your readers, your writers and your advertisers. If you treat those relationships with value, I believe it will return to you multi-fold.

Don’t make the mistake of thinking of your space as only useful for advertising. If you can’t get good ads for the space, then start thinking about how to use the space as currency within your community. And you want your currency to be as valuable as possible.

Think about how to use it to further relationships. Think of ways to allow readers to interact with other readers. Think of ways to promote your writer’s relationships with readers.

How can you do that? Here’s a few ideas. Run a contest, with ad space as one of the prizes. Promote the best comment of the day/week. Feature premium/dvd/cd content packaged from your writer’s archives. Ad video to your posts with writers adding color commentary to what they’ve published.

Your inventory is as valuable as your creativity can make it. Be creative, build a community based economy and good money will come your way.

Technorati Tags: ad networks, ESPN, Jason Calacanis

Microsoft announced that it is acquiring Rapt, a provider of advertising yield management solutions for digital media publishers. Rapt’s system is used by a number of big players like Microsoft, Yahoo, CNET Networks, Dow Jones & Company, Expedia, Fox Interactive Media and a number of well recognized web properties.

So what is Rapt and why is this a smart acquisition?

I came across Rapt last week while I was looking for solutions that help companies manage what could be called the advertising supply chain. And to understand Rapt, I think helps to a have a perspective on sales and operations planning and supply chain optimization. (which is something we have done a lot of)

Putting it simply, sales and operations planning is all about coordinating sales efforts with production. In the case of advertising, it means projecting how much inventory of what type (eg units, demos, etc) will be available looking out into the future and what that means for sales goals. It also includes the sales force communicating the markets demand for inventory of different types and the ongoing process of trying to match demand with supply. Once we have a sales and operations plan, its up to the sales force to sell and the supply chain to deliver.

Arming the sales force with the right information about what promises they can make to customers can make an enormous difference in terms of sell through and in terms of price realization.

On supply chain side, supply chain optimization means serving the right advertisement in the right place at the right time in a way that maximizes the revenue that can be produced on an ongoing basis. Doing this requires balancing the number of ads, placement of ads and a whole bunch of other factors. Doing this at large scale is not easy. Doing it well is worth a lot in terms of extra revenue capture.

From what I can tell, this is what Rapt’s solution helps companies manage.

This capability is at the heart of the advertising supply chain for any large publisher. And that’s why I think this is a very smart acquisition by Microsoft. The combination of Rapt’s ability to plan, coordinate and optimize the advertising supply chain and Atlas’ campaign management and ad serving capabilities should be a very compelling solution that will help Microsoft be a central player in the advertising supply chain.

And the icing on the cake is that this system is being used by both Microsoft and by Yahoo for managing their respective advertising sales and supply chains. Strategically, Microsoft blocks someone else from acquiring Rapt and screwing up their ability to integrate Yahoo and Microsoft’s ad sales and supply chain operations.

More discussion of this acquisition can be found here, here, here and here.

If you know more about Rapt, leave us a comment.

Click here follow me on Twitter at http://twitter.com/alexnesbitt

Technorati Tags: Microsoft, Rapt, advertising supply chain

The Association for Downloadable Media (ADM) announced the appointment of a special advertising agency liaison to the organization, along with the confirmation of a fourteen-member Ad Council, comprised of media professionals from leading interactive advertising agencies.

The council will act as a sounding board for the ADM committees, which are creating downloadable media advertising standards and guidelines. David Herscott, President of San Diego-based interactive agency MEA Digital, has been appointed the liaison between the Ad Council of media strategists and the ADM committee chairs.

The Association for Downloadable Media is focused on creating a landscape favorable to the commercialization of portable media. The ADM’s focus includes revenue generation from advertising and sponsorships of audio and video podcasts, (aka vidcasts, or vlogs), and other digital content distributed via RSS, ATOM, peer-to-peer, mobile devices, downloads from Web sites and other platforms to come.

The Association for Downloadable Media, formed to focus on monetizing consumer-downloaded content will be releasing initial ad unit standards and audience measurement guidelines for public consideration at the ADM Forum at ad:tech San Francisco April 16th from 9:00 am - 11:45 am at Moscone Center.

Chris MacDonald, Chairman of the ADM and Executive Vice President for Business Development and Operations, Libsyn PRO Enterprise Platform, said regarding this announcement: “People have been talking for years about the need for podcasting ad standards. We’re taking the first big leap on standards-setting and are working proactively to verify that the ad formats and audience measurement processes we set will work for both the buyer and seller.”

“Podcasting and downloadable content are the next frontier of digital media. The members of the Ad Council and I are excited to work with the ADM committees. Our work together will help brands leverage the amazing engagement we find with the audiences of downloadable content, says David Herscott, President, MEA Digital”

The members of the Ad Council are volunteering to be the sounding board for the ADM committees as they develop standards for monetization of downloadable media, making sure the standards dovetail with prevailing digital advertising best practices.

The Ad Council members include:

• Jonathan Adams, Vice President, Group Director, Media Digitas (Publicis Groupe)
• Kendall Allen, Managing Director, Incognito Digital
• David Berkowitz, Director of Emerging Media & Client Strategy, 360i
• Jason Burnham, CEO, Burnham Marketing
• Jocelyn Griffing, Senior Vice President Online Media at ICON International, an Omnicom Company
• David Herscott, President, MEA Digital
• Tom Hespos, President, Underscore Marketing LLC, Underscore Marketing
• Alyson Hyder, Director, Digital Marketing Services, Avenue A-Razorfish
• Jennifer Kim, Vice President, Integrated Strategy, Sigma Group
• Susan MacDermid, Senior Vice President, Real Branding
• Stephen Smyk, CEO, Performance Bridge
• Jeff Adelson-Yan, Managing Partner, Levelwing Media

Technorati Tags: Association for Downloadable Media, ADM, ad standards

In Digital Podcast 41, we connect with Wizzard Media’s CEO Chris Spencer to talk about podcast based advertising. As Chris puts it, how else can you advertise on an iPod.

We cover some of the history of Wizzard and how they have brought together some of the most popular podcast hosting companies such as Libsyn and SwitchPod, and built a podcast advertising network to go with it.

The show focuses on podcast based advertising and in particular we discuss the two advertising campaigns Wizzard is running for the US Navy.

 

 Digital Podcast 41 [56:43m]: Play Now | Play in Popup | Download (1572)

The first of those ran on 20 podcasts with wide distribution and focused on recruitment. The current campaign is much more focused and is running on 7 podcasts. It focuses on recruiting medical personnel.

We get into some good detail about how the process works, what Wizzard does and what podcasters have to do to make it all work. We talk numbers and Chris tells us how different ads support different CPMs, depending upon their placement and whether they are audio or video. Videos commands the highest CPMs running $5-7 to $20-35 depending upon whether it’s a pre-roll or a mid-roll. Audio runs at lower CPMs that range from $3-5 to $15-25 depending upon placement.

Chris explains how the revenue share works. The advertising agencies get their 15% off the top and then Wizzard and the podcasters split the rest 50-50. Wizzard pays the sales force and covers the costs of setting up and running the campaign.

Wizzard published that they supported over one billion downloads last year from the over 8,500 podcasts that use their hosting services. Some have questioned how that could be, so we ask Chris to help us verify those numbers and to understand how 8,500 podcasts produce so many downloads. Chris explains how they count downloads and filter out the spiders and bots. He says that there are some blockbuster podcasts that do really high volumes and just as in other media forms there is a long tail of podcasters, so looking at mean based average per podcast just does not make sense. It’s the old 80-20 rule once again. Chris also clarifies that some recent problems with reporting to podcasters has nothing to do with how the count their download figure.

Chris ends the show by providing some tips for podcasters - The one to remember most is that if you think you want to advertise in your podcast someday, start tagging them now so that ad inserts are easy to do and you don’t have to go back and re-edit your catalog.

It’s good to see organizations like Wizzard taking up the flag and promoting podcasting. Wizzard along with a few others is taking the risk to build the platforms that we need to scale the downloadable media business. We wish them well on their mission to help marketers advertise on an iPod (or a Zune for you Zune fans.)

Technorati Tags: Wizzard Media, podcast advertising, podcast hosting, downloadable media

Is brand based advantage eroding as Umair Haque argues in a post entitled The Shrinking Advantage of Brands?

Umair points to Millward Brown’s report about the top 100 most powerful brands in which the number one brand is Google as evidence that there is a shrinking advantage of brands.

I strongly disagree with the point Umair makes in the title to his post. Brands are just as important as ever. Just ask Ask or Yahoo? Would they like to be at the top of that list. You bet.

However, when I read the post I agree with the body of the argument he is making. If you substitute the word advertising for the word brand the argument makes sense. There is a shrinking advantage to advertising and advertising scale.

Because every other player in the top ten has spent decades – if not literally centuries, as for P&G and Coke – investing billions in advertising to build a brand.

But where these players invest on the order of 5-10% of revenues on advertising, Google’s advertising expenditure is almost exactly zero.

Stop and think about that for a second: the top brand in the world belongs to a player that…uhhh…doesn’t advertise.

The social web is way more powerful than traditional advertising based brand building efforts.

Communities have always been central to building brands as positive word of mouth has always been much more powerful than advertising in building brand strength and value. When our friends speak, we listen.

Google’s brand has been built without any paid advertising. It has been built by the world’s biggest community - the social web.

We’ve gone from people telling their physical communities about good stuff to global web based communities where strong positive word of mouth spreads virally across the globe at zero cost.

Brands that don’t understand the power of the social web will shrink in advantage, those that do can build even stronger brands and more value.

Technorati Tags: social web, advertising, brand building, competitive advantage