Interactive marketing to exceed 1/4 of all ad spend by 2016 (and how we know)

by Josh Bernoff

You see headlines like the one on this post all the time. This headline reflects of a Forrester prediction from the report "US Interactive Marketing Forecast, 2011 to 2016" by Shar Van Boskirk. Before I get into some tidbits from the prediction, I'd like to address the question that thinking people always ask about these forecasts: where do they come from?

Forrester analysts like Shar immerse themselves in the market. They are in touch with the demand side -- people who buy these marketing services, many of whom are our clients. They are also in touch with the supply-side, people like Google, who give us insights into what people are buying (and sometimes, publish numbers that we can use in our calculations). We also talk to people like agencies that are buying, charging clients for services, and have a broader perspective.

It's a huge amount of work just doing the research, and then that all gets put into a complex model which is checked a dozen different ways. The model reflects not just straight-line or hockey-stick projections of elements of the market, but also changes we see coming, like social media advertising catching on or video getting cheaper to produce.

Our clients (the smart ones) use these projections in several ways. They represent well-researched, reasonable expectations of where the market is going -- written down so people can work with their management for budget and planning. Vendors use them to identify where heat is. Note that you don't have to agree with a forecast like this to use it -- it's useful even if you're more bullish or bearish than we are on a certain sector or the overall market, because it gives you a place to start the discussion.

So, what did this forecast predict? The major top-line results are in Shar's post on the report. But here's what I noticed.

• Interactive marketing spend for the year 2011 is heading for $34.5 billion, 19% of all advertising spending. Our projection shows this spending more than doubling to $76.6 billion, 35% 26% of all advertising, by 2016 (and more than marketers now spend on television). This is massive. Digital marketing is unquestionably heading for the center of the marketing mix.
• The highly measurable returns of digital marketing are driving these ever-increasing investments. It not only works, you can prove it works.
• While search is also growing, its share of the total will shrink. The big growth is coming from Display ads ($10.9 billion in 2011, $27.6 billion in 2016), Video ($2.0 billion in 2011, $5.4 billion in 2016) and especially mobile ($1.7 billion in 2011, skyrocketing to $8.2 billion in 2016). The online world is splintering, but the splinters are growing like mad. The digital marketing mix is going to get increasingly diverse.
• Social media spending -- on technology to manage it, agency fees, and integrated campaigns (and this doesn't even include ads on social networks) will already reach $1.6 billion this year. We are projecting it to grow above $2.1 billion next year, and to reach $5.0 billion in 2016. Social programs -- not just social ads -- are now a significant part of the digital economy. When spending passes a billion dollars, you can't call it experimental.

The report also makes some interesting predictions -- that daily deals a la Groupon will die in a flurry of competition in your inbox, for example, and that we'll see ad-supported devices that make their success based on audience targeting. It's a hell of a world we're entering. But given the current economy, interactive and social media marketers just need to be glad they're in a part of it that's got healthy growth.

Google just invited itself into your living room

by Josh Bernoff

Nearly all the coverage of Google's proposed $12.5 billion acquisition of Motorola Mobility concentrates on two things: the patents Google is acquiring and Google's taking over a major mobile phone maker. But this is a multi-device play, as Charlie Golvin points out. Don't ignore Motorola Mobility's second huge business -- it's one of the largest suppliers of set-top boxes for the cable industry.

The Internet is on a majority of the mobile phones now shipping. Why isn't it on all our TVs already? As Wired points out, Steve Jobs is on point here when he talks about why Apple TV didn't catch fire:

The problem with innovation in the television industry is the go-to-market strategy. The television industry has a subsidized model that gives everyone a set-top box for free, or for $10 per month. That pretty much squashes any opportunity for innovation, because nobody’s willing to buy a set top box. Ask TiVo, ask Roku, ask us [Apple]. Ask Google in a few months.

The only way that’s ever going to change is if you can really go back to square one, tear up the set top box, redesign it from scratch with a consistent UI across all these different functions, and get it to consumers in a way that they’re willing to pay for it. And right now there’s no way to do that.

So how do you get the Net onto your TV? How about through one of the world's biggest suppliers of set-top boxes, Motorola Mobility?

Assume this merger gets approved. Here are some things that could happen:

• Comcast becomes Google's largest customer. They work together on a TV gateway device/software that includes broadcast, interactive TV, on-demand content, and of-course, streamed Internet content. Google's search competency and other assets (ad sales, YouTube, ...) are at the center of this deal.
• The program guide on your set top box becomes a guide to any video, anywhere. And it generates revenue for the operators as well as Google -- every click generates a payment from the content owner.
• Television networks' deals with the cable and telcos become deals for broadcast, VOD, streaming from cable servers, streaming from Hulu, streaming from their own servers -- basically, universal content distribution deals. Television networks transition to their future role as bankers, promoters, and aggregators of video content, not so much broadcasters. 
• Google becomes the brand name for your program guide to entertainment, regardless of whether that guide is on your TV or on your PC.
• Google Plus gets built into your TV experience. You can +1 a TV program. Isn't that what Spark is supposed to be?

Basically, Google could make more money from Motorola as an entree into the television world -- ongoing revenues and advertising -- than it can from continuing to push Moto set top boxes. And this new source of ad revenues and retention of viewers could make this attractive to many of the cable operators.

Some people who know the cable and television industry think this is a long shot. The set top boxes that could do this may cost too much, the cable operators may be afraid of Google, or there may not be enough money to be made from the ads. Fair enough. But watch this space. The TV set is too big a screen for Google to ignore, and it just found its entree into your living room.

Graphic: Androidcommunity.com

Four ways to be clueless about social strategy

When I bought a snack between flights at Chicago's O'Hare Airport, I was intrigued to see this notation at the bottom of the receipt:

"BECOME A FAN OF HMSHOST ON FACEBOOK"

Has HMS, operator of travel restaurants worldwide, figured out a clever strategy to take advantage of the millions of people who get receipts and keep them for expense reports? If they have, it's a mystery to me. In fact, embedded in this little receipt, HMS has made nearly every mistake possible with social media. Let's go through appropriate social strategy principles and compare them to what HMS Host is doing.

1. Have a clear objective. Why does HMS Host want friends on Facebook? I don't have a clue. I can see why, say, Coca-Cola or NCIS could benefit from collecting friends, but HMS doesn't have a brand its customers identify with, as far as I can tell -- mostly it operates restaurant franchises for other brands (like Starbucks).
2. Give customers a reason to connect. What do I get for connecting with HMS Host? Nothing I can see. The invitation to connect should result in some kind of offer ("Connect with us for discounts" or "Connect to learn about our frequent customer program" for example.) If your brand is Apple, it may be obvious whey we'd want to be your friend, but there's no reason for a customer to believe that connecting with HMS Host would have any benefits.
3. Own your identity. I tried to do what this receipt asks: become a friend. But facebook.com/hmshost is run by some guy in New Jersey who works for one of the HMS outlets (and his Facebook page has 102 fans so far). The top page on a Facebook search for HMS Host is a placeholder page with 300 fans and no content. Leave out the space and you get to a Facebook page with a Wikipedia description and 700 fans. HMS' Web page finally leads to the company's actual Facebook page: facebook.com/HMSBethesda (pretty hard to guess without a little detective work). That site has a stream of press releases and some actual useful travel tips -- and 960 fans, many of whom are probably employees or social media experts who worked hard to find it.
4. Drive traffic. If the receipts were part of a strategy of online advertising, Facebook ads, or other traffic drivers intended to create a bunch of fans to participate, that could work. Absent that, messages on these receipts are just wasted space.

HMS Host's senior director of communications and public relations, Susan Goyette, says I've missed a few things in this critique. She says they do have on objective for their Facebook page: listening to travelers and promoting company programs like their participation in the Children's Miracle Network. And she complains that Facebook takes many months to boot people who've taken charge of sites that rightly belong to corporate brands.

Even so, I think HMS Host had made one of the classic errors: diving into a social network without a coherent strategy, and without control of their own brand in that environment. Because social networks are so visible (and because HMS Host is now promoting this on thousands of receipts), this is like an actor coming out on stage without his costume on.

There's a lot to learn from this. Don't get started in social media without an objective, a reason for customers to join you, control of your identify, and a plan to drive participation. Don't put Facebook and Twitter buttons on your Web page or your real-world signage until you're ready. And for lord's sake, don't put invitations on your sales receipts. Until you know what kind of party you're throwing, where, and what the entertainment is, it's nuts to invite people to join you. And it's clear evidence that the frenzy over Facebook has run way out ahead of reasonable marketers with actual strategies.

 

 

 

Invest 10% of your advertising money in serving and cultivating customers

Next month, my column in Marketing News will recommend that you cut your ad budget by 10% and spend the money on customer service. Why? Because getting your customers to be happy will pay off far more than the advertising investment. You could also put that money into finding and cultivating fans. Both will spread word of mouth, which is more valuable than advertising.

Here are three pieces of research – one from Forrester, and two from other companies – that back this up.

First, as Kerry Bodine points out, satisfaction scores for call center interactions have fallen – in some industries, to below 60%. Customers are getting annoyed, and annoyed customers don’t say nice things about you. Invest more of your money in customers, less in advertising.

Second, you can’t buy positive word of mouth – you need to earn it. According to Search Engine Marketing/Optimization firm Covario, “Money Can’t Buy You Love.” Covario studied Twitter volume (number of tweets) and Twitter sentiment (positive/negative content) for 81 of the marketers that advertise the most, according to Advertising Age’s listing. According to this study, advertising spending doesn’t even correlate to volume. Digital spending can boost volume, though. But neither can get people to tweet things that are positive. Invest more of your money in customers, less in advertising.

What’s the value of those tweets? For that, I turn to a third piece of research, by Syncapse, a social media management company. They just published a paper called “Increasing campaign effectiveness with social media,” which analyzes a survey of 4,300 people in North America (free download with registration).

Syncapse segments consumers into groups called “Producers,” “Engagers,” “Abstainers,” and so on – these segments are similar to our Social Technographics categories. The Producers – similar to Forrester’s Creators – are those who create and distribute new content through social networks, blogs, and discussion forums.

Syncapse figures that a recommendation from a Producer is worth $22.93. They calculate this based on the reach people have (similar to our Peer Influence Analysis) and the media value of impressions within the social networks people are using. Frankly, I think this number underestimates the value of a recommendation, since those recommendations are more persuasive than ads. Bottom line once again: Invest more of your money in customers, less in advertising.

Let’s sum up. Your call center staff may be annoying customers. Advertising won’t help.  And if you could only get your customers to start sharing positives about you, the value of that sharing could be enormous.

Now can you see why I want you to put your advertising money into your customers instead?

The marketing value of customer experience

by Josh Bernoff

Customer experience is marketing. That is, in a world drenched in social word of mouth, the way you treat your customers -- and the way they perceive you -- makes all the difference in what they say to their friends.

With that in mind, I'd like to share some key results from Forrester Research's latest Customer Experience Index survey. We asked over 7,700 consumers to respond to three questions about 154 different companies: how well did they meet your needs, how easy were they to do business with, and how enjoyable were they to do business with? The results are fascinating.

• Only 6% of the brands were ranked as excellent (score 85 or more out of 100). And two-thirds were rated "okay" to "poor". 18% were poor. Social technology is going to hammer these brands.

• Retail and hotel companies did the best, health insurance and TV service providers ranked worst. I find this interesting. The cost of great experience in the retail and hotel business is very high, they are people intensive businesses where it's easy to fail. And yet the companies that succeed here succeed in part based on great service -- because they compete. In health insurance and TV service, there is far less competition. Some companies, like Comcast, now provide service guarantees. But the customers haven't caught up to the changes.

The best performers overall were Borders, Barnes & Noble, Kohl's, Costco, Amazon, JCPenney, Walgreens, Target, BJ's Wholesale Club, and USAA (credit cards). The top two companies are in trouble right now -- a great experience by itself doesn't make up for an industry facing digital disruption. It's also fascinating how many low-price providers are in the top ten, companies like Costco, JCPenney, Target, and BJ's. In a recession, providing low prices and an experience that's better than people expect is a prescription for success.

USAA is a case unto itself. Serving military families and staffed with many ex-military staff itself, the company has a dedication to great experience that stands out. USAA is rapidly embracing social and mobile technologies because much of customer experience has shifted to those channels.

What do these results mean for you?

As Andy Sernovitz says, "Advertising is the cost of being boring." On the other hand, advertising is a lot cheaper a and easier than changing a company's culture to focus on customer experience. If you're an advertiser, sure, you can keep hammering the message of how great you are, even if your customers think differently. If you're an agency, companies like this will support you for years to come. But in the end, people will find out the truth -- and with social technology, that happens more easily every day.

Or, you could put your money and effort into improving the experience. That's an effort that will take a couple of years, but with buyers coming back and seeking value as the recession lifts, you'll attract the leaders. They'll talk. You could end up like Zappos, where the customer word of mouth is most of the marketing. Or, you could just develop a customer experience that resonates with consumers, which is a whole lot easier to advertise.

Customer Experience Index survey

How many of your employees love your products? (And why it matters.)

by Josh Bernoff

In a world where you need to depend on your staff to reach out to increasingly empowered customers, you won't get very far if your employees don't believe in what you're doing.

I mention this now because of two items I've noticed -- employees in commercials and the data we collected on employee advocacy.

First, as noted in an article in Advertising Age, more and now more companies are now putting actual staff front and center in their advertising. As they nicely put it:

"While employees have always been the front line of customer interactions for brands, particularly those in the service industry, a number of factors of late have brought them more to the fore, including a more transparent and socially engaged society, a still-fragile economy where everyday value trumps aspirational brand attributes, and an ongoing lack of trust in corporate America and CEO spokespeople."

Best Buy is a leader here. The company now bases its brand on helpful service, and the salespeople ("Blue Shirts") are at the center of that image, so it's natural to see them in ads. Twelpforce is an extension of the same idea. Southwest Airlines' commercials similarly reflect the brand image with genuine employee banter and questionable acting skills -- here's one hilarious example:

Could your company do this? Probably not, and there's where the data comes in.

In a report published today, we examined the question of employees advocating for their companies. Forrester surveyed 5,519 information workers across the US and Europe. We used a variation on the Net Promoter methodology, asking on a ten-point scale, "How likely are you to recommend your company's products or services to a friend or family member?" As in Net Promoter, we count people as promoters if they rate this a 9 or 10, neutral if they rate it a 7 or 8, and detractors for 0 through 6. The results amazed me. For example:

• 49% of information workers are detractors, and only 27% were promoters. That's a net score (promoters minus detractors) of -23%. (Yes, that's a negative number.)
• Canada had the best scores in our survey, France the worst. But even in Canada, there are more detractors than promoters.
• Directors, VPs, and executives are net promoters, but individual workers and managers/supervisors are net detractors.
• Among US workers, the best scores are in design, HR, and the ever-optimistic sales department. With a net score of -10%, marketers are actually more likely to be detractors than promoters for their own products. But customer service workers are among the most likely to be detractors. When your call center staff don't believe in your company, you're ripe for your own Maytag moment.
• In case you're wondering if you should allow employees onto social networks (and trust me, you can't stop them), try this fact on: workers who use social media are among the most positive. 48% would strongly recommend a company's products and services and only 22% were detractors, for a net score of 26% -- among the highest of the groups we surveyed.

What should you do? Well, you could squeeze more work out of people, tell them exactly what to do and punish them when they don't do it, and block their access to technology. This might boost short-term profits and make you feel like you're in charge. In a recession, they probably won't quit. But they sure won't be spreading joy to your customers.

Or you could spread an internal reputation that customer problem-solvers will be encouraged and highlight the workers who do it. You could empower people. Then the ideas will be coming from you staff instead of just from you. And maybe they'll be sufficient happy you could put them in your TV commercials, get them tweeting about your products, and generating customer advocates with their enthusiasm. That's hard to do, but it's worth it.

What you can learn from consumers' digital decade

by Josh Bernoff

As the decade I call the twenty-oh's ends, think on what a transformational change we have just all witnessed. Our obsession with the latest product from Google or Apple often clouds our recognition of the long-term effects. We all know where we are. But I think many of us have forgotten where we were, and just how dramatically things have changed in ten short years.

Bill Gates in 2001 called this new decade "The Digital Decade." Boy was he right.Consider:

• When the last decade began, there were 2.6 million broadband households in the US, one out of every 40 homes. Now there are 80 million, or two thirds of the population. Broadband has gone from rare to ubiquitous.
• Starting from zero, digital video recorders reached 31 million homes and HDTV reached 51 million in this decade. Together with online video and video on-demand, these gadgets have completely transformed the television experience.
• Mobile phones subscriptions are now 270 million, out of 307 million US adults residents.(For a comparison, mobile phones were in 51 million households at the start of the decade, but back then having more than one phone per household was unusual.) Back in 1999 phones were phones. Now they are iPhones, Blackberries, and Androids -- computers and internet access devices.
• Portable digital music players have reached 76% of all US households. At the start of the decade, they were in practically none, because the iPod had yet to be introduced. Mark Mulligan calls it "The Decade That Music Forgot".

And finally, it's worth noting that Google just celebrated its tenth anniversary. In 1999, most of hadn't heard of it yet. And forget social technologies -- in 1999, most of the social activity online was in chat and discussion forums.

As I look back on all this from the perspective of media and marketing, it's clear that consumer lead, media stumbles along behind, and marketers follow along behind.

2009's consumers spend 34% of their media time online. As a result, digital marketing spending has gone from $6.2 billion in 1999 to $25.6 billion, or 12% of all marketing spending, in 2009. But marketers still spend most of their energy and dollars on television, newspapers, and radio.

Within those industries, the spend shifts slower than the behavior. Newspaper sites still bring in far less than ads in the paper. Video on-demand and online video ad models are still under construction.

But what you can learn from this decade is that consumers move quickly, models move slowly, and marketing moves conservatively. When you see a technology shifting, that's the time to begin close observation of the models behind it. It will take years for those models to take hold, and in those years, you get the chance to learn. That's when you need to experiment and figure out how things work, because that's when it's cheap and the competition is hanging back. The objective is not to make money right off, but to learn the ropes. Because when the transformation happens -- and it will -- then you will have the advantage of knowledge.

The twenty-oh's were the digital decade for consumers. The twenty-teens will be the digital decade for marketers. Time to get cracking.

Note: most of these links are to Forrester Reports that are available in full to Forrester clients, or as abstracts for non-clients.

Advertising will change forever

by Josh Bernoff

Here's one of the things we do at Forrester Research: we interview as many marketers as we can about their plans, identify trends and project future likely conditions, and then we put together some numbers to make a projection. If you've ever seen a Forrester projection, it comes from a process like this.

This means that inside every projection is an idea or ten about the future. Those ideas can be powerful, and they come from research with marketers and consumers.

My colleague at Forrester, Shar Van Boskirk, just published our five-year interactive marketing forecast. The idea inside it is the real kicker.

In this recession, marketers have learned that interactive marketing is more effective, and advertising less effective, per dollar spent. While budgets for online have decreased, they decreased less than other budgets. Six out of ten marketers we surveyed agreed with the statement "we will increase budget for interactive by shifting money away from traditional marketing." Only 7% said "we have no plans to increase our marketing budget."

Unlike the last recession, digital marketing is no longer experimental. Now it looks more like advertising is inefficient, relative to digital. More than half of the marketers we surveyed said that effectiveness of direct mail, television, magazines, outdoor, newspapers, and radio would stay the same or decrease within three years. In contrast, well over 70% expected the effectiveness of channels like created social media, online video, and mobile marketing to increase.

The result is that digital, which will be about 12% of overall advertising spend in 2009, is likely to grow to about 21% in five years. Along the way overall advertising budgets will decline.

This is huge.

It means we are all digital marketers now, since digital is at the center of many campaigns anyway.

It means media is in trouble, or at least in the middle of a transformation. For example, online video ads, which will be about $870 million this year, will grow to over $3 billion in 2014. What will this do to networks plans to put more of their shows online in places like Hulu. How will it accelerate some newspapers plans to become more and more centered around online?

And it means that social "media", which will account for $716 million this year between social network campaigns and agency fees, will generate $3 billion in five years. And this doesn't even count displays ads on social networks (which are in the display ads category.) Of all the parts of digital marketing, social network marketing one is poised for the most explosive growth.

Pundits have been declaring the end of mass media and advertising for years now. From my 14 years of experience analyzing this stuff, I've learned that things die very slowly, but there are real trends you can see. If you're in advertising, you'd better learn to speak digital, because that's the way the world is going.

Note (7/22): This was reprinted at the Ad Age site, where there are over 50 additional comments from marketers.

Supreme court virtual DVR decision is a turning point

This isn't social technology, but indulge me. I used to be a TV analyst. And this is big news for marketers.

The U.S. Supreme Court yesterday decided to let stand a ruling that Cablevision can go forward with its virtual DVR product.

Let me explain what this is, and what it means for marketers.

Cablevision's service works just like a DVR, but uses storage on the company's VOD servers instead of a hard-drive in your home. So when you ask to record "Hung" on HBO, the company makes a recording on its servers (and needs only one recording to serve all the people with the same request). Works just like a DVR otherwise.

When Cablevision told me about this product in 2006 (in advance of the general announcement) I told them "you will get sued." They knew that, of course. And it has taken 3 years to get the legal issue resolved, which is fast as these things go.

Here's why this product is more than just a DVR with no disk.

1. They don't have to put limits on disk space. Since everyone is sharing the same recordings, there's no reason to limit you to 100 or 1,000 hours of recorded content, in high definition. No limits.

2. Retroactive recording. No more "damn, I wish I'd thought of recording that." They could, in theory, allow you to ask to record something that's already passed. Or when you find out about a program on episode 4, why not ask to see the previous 3 episodes.

3. Un-delete. Assume deleted programs hang around for 12 months. When you ask to delete something, they just take it off your recorded programs list. If you want it back later, just ask to see it again.

None of these features have been announced, and some might be subject to further suits. But it's possible that, within two years, all of these features will be available to all digital customers, not just on Cablevision, but on Comcast, Time Warner Cable, Cox, and the TV services of AT&T, and Verizon. Why? Because they can do this, and DirecTV and Dish Networks can't. And differentiation from satellite is a big problem for cable operators.

If you're an advertiser, this means a whole lot more customers are about to get DVR service. Not one at a time when they upgrade. En masse, system by system. If cable is smart, they will give everybody a free level of this service, as a taste, and then encourage them to upgrade (the "Freemium" model).

Commercials will become optional for many more people, and on nearly every program.

If you advertise on TV, this could be a problem.

It's all part of the transition to video available on any device, any time. Omnivideo, you might say.

I'd also say it's time to figure out how to make your commercials more engaging and interactive, on those same digital television systems. Can you Canoe? Better learn how soon.

To Use Social Technologies In Ad Campaigns, Get The Rhythm Right

By Josh Bernoff, from my Marketing News column.

Social technologies take a while to build, but last a long time. Think about the effort it takes to get people reading your blog, following your Twitter feed, viewing your YouTube videos, joining your community, or friending your Facebook page. They all start with zero viewers, but the more they grow, the more powerful they become.

Ad campaigns move at a faster pace. More importantly, they have a beginning and an end. You rent a chance to get some attention for a few months, then you see whether you moved the needle.

Since advertising people often get responsibility for social elements of marketing, this creates a fundamental disconnect. Marketers who tap into these two forms of communication can get whipsawed – the social builds too slowly, and the campaign ends too quickly, to make it easy to synchronize them. Even when they do succeed, there’s huge waste. If you’ve assembled 100,000 customers into a community behind your brand, what happens when you’re done with them? Send them a thank you email and say good bye? That’s a tragic waste.

The answer, as my colleague, Sean Corcoran, discovered in the research behind his report “Using Social Applications In Ad Campaigns,” means thinking of social fans as an asset that you can build with a campaign and then tap over and over again. To do this, you must also make sure you connect with and feed them between campaigns, to keep them interested.

For example, Starbucks has 1.2 million fans on Facebook. So when it launched its first instant coffee, VIA Ready brew, those brand loyalists got to tag whether they liked it, and to share it with their friends. And H&R Block took its 2008 tax-time promotions on MySpace, Facebook, and Twitter and turned them into 1,700 Facebook fans and 2,300 Twitter followers that they regularly check in with as tax season approaches.

Marty Collins, a social marketer at Microsoft, has figured this out. She supported Microsoft’s “I’m a PC” campaign late last year with short-term social tools, so people could contribute their own content to the campaign. But now, Marty spends 75% of her time with continuous online discussions to make sure the company has an engaged audience to tap into for the future.

Here’s how to master the rhythm. First of all, you need a launch plan. Sometimes, this means identifying key fans and tapping into them early, so they can help you build a community, spread buzz, or make the contributions that will attract more people to your offering. It may also mean starting the online portions of your campaign early, so it has time to grow. If you must start your online social campaign concurrent with your other ads, be aware that most of the impact will come weeks or months into the campaign, when the momentum and word-of-mouth has time to build.

Second, during the campaign, pay close attention to customer participation. Social applications need fuel. You may need to plan events over a period of weeks or months to keep people coming back. And don’t be afraid to make mid-course corrections in your social campaign, based on what’s working and what’s not. Most importantly, your company has to participate. Since you’re tapping into brand fans, the feedback from you is the fuel that will keep things going. You can’t spin up an online community and expect it to continue on its own.

Finally, you’ll need an exit strategy. What will you do when the campaign winds down? If you’ve named your Twitter account after your ad campaign, you could have a problem – maybe it’s better to name it after something more permanent, like your brand. And do you have the budget to keep the community going in a maintenance mode? You’d better budget for that, because this community could well generate the ideas for your next campaign.

In the end, companies that have built up fan bases this way will have an advantage. For one thing, as this trend picks up, the socially active consumers will be getting serenaded by every brand in America. In this environment, Nike, Coca-Cola, and Scion are all direct competitors – better to sign them up to your dance card before another brand comes along to romance them.

Of course the real challenge here is for agencies, who tend to get paid on their short-term efforts. Partly because of this short term focus, clients are reaching out to digital agencies like imc² and PR firms like Edelman and Fleishman Hillard to build social applications, often keeping them out of the hands of traditional ad firms. Agencies who wish to play here will have to adapt to these long-term platforms, which means a new set of skills.

They’ll also have to find ways to get paid for efforts that pay off in the long-term. To that end, marketers ought to consider paying by the number and enthusiasm of fans recruited, rather than by the impression. That’s the only way the agency, the campaign, and the social media will ever end up in sync.