Moderator: Jimmy Guterman, Editorial Producer, EconSM

Panelists:
Simon Assad, Co-Founder and CEO, Heavy.com
John Battelle, Chairman, Federated Media
Shawn Gold, Senior Vice President, MySpace
Tina Sharkey, Chairman, BabyCenter
Rishad Tobaccowala, CEO, Denuo/CIO, Publicis Media Group

Jimmy: Comment from mixer last night - the key is to understand when the ad is most desirable. When I hear people talk about marketing they oftentimes are really talking about advertising, not the full range of marketing. What is really going on?

Simon: Have been selling ads for ten years and it has helped us to get out of the gate but marketing is the discipline to create a conversation between two parties that is useful to both. Banners and search are the old world, marketing is about creating the conversations and bring together two people really interested in having a conversation.

Jimmy: The online promise was that we'd be able to track things on a very granular level, hasn't quite turned out that way, John, why can't we measure anything? John: One reason is that we haven't tried, much as the banner ad that made its debut on HotWired in 1994 we're still looking at panel-based measurement, but it doesn't work for niche audiences unless you make fractal-like numbers of panels. Nielsen and ComScore responded aggressively to say that they're going to figure it out, but as we get into conversational marketing what we're measuring is going to change. We're addicted to a certain number of metrics, how do you measure a lifetime value of a customer against a spend at a specific site like heavy.com, don't have the standards much less the conversations that get us to those standards, but we're moving towards it. Jimmy: what's the barrier? John: Time, we're twenty people, takes a lot of time, can't put an algorithm out there and everybody gets it as with AdSense, conversations aren't easy to code into an algorithm.

Jimmy: Quote from MySpace "If you live in a dorm room everything is yours, if the internet were your room it would be MySpace." How do you market differently to people if you think that you're doing it on their turf? Shawn: Have to look at why people are there in the first place and catch people in stride. MySpace is there to help people to discover culture, how do you enhance that value proposition? Talks to advertisers, have to create a subnetwork that is relevant to your value proposition, have to create recognition, brands have the ability to provide access, can offer access to events, discovery, knowledge. There are simple sociological guidelines for social networks. Simple program provided simple contact tables, send a message, personalized, early on was fairly innovative, about 76,000 people used them, not huge but impressions were 2.6 million, helped people to express themselves and to tap into their value proposition.

Jimmy: Because of new distribution methods the release of a film was no longer THE marketing event but an event that begins an extended marketing campaign. How do you adapt? Tina: Must-see TV on Thursdays will never be seen again in our lifetime, the aftermarket is key. Ecosystems are the focus, you have to become part of people's personal capital. People say the music industry's dead, but it's about what friends spin instead of what DJs spin, so those 76,000 people aren't many but their network is of millions, so once in their ecosystem you need to leverage their conversation.

Jimmy: Are there ideas from mass events that social media can learn from old media? Tina: I was watching a concert on MTV, was watching an announcer talk about something backstage that he thought was cool, it was annoying, meanwhile AOL had integrated messaging and other features so that the audience became the experience.

Jimmy: Rishad, the folks that used to be in control are looking for control in an era in which there is no control. What to they do? Rishad: There's still a lot of control, no one would market it there weren't. People are self-marketing, you need to get involved in their self-marketing but you need to be cautious. If you tell people things that are mathematically untrue they'll think that they're idiots and they won't listen to you. Social media will not displace things in five or ten years for marketing, there are companies trying to sell millions of things. What are the incentives for markets and suppliers to change, it's hard work, it doesn't scale. If it won't make money you won't do it.

Jimmy: Conversation in social media always goes towards Second Life, fascinating but a world that's mostly empty except for marketers. What's your experience as a marketer with virtual world? Shawn: unripe and inefficient for marketers, if you look at MySpace and other big social networks audience comes back multiple times a day, Second Life requires a much larger committment, ability to distribute information is very inefficient. John: Was a "Deadhead," went to The Well, there is an incredibly devoted group but it doesn't have the scale to truly pay back that marketers are putting into it. Tina: When we look at Korea we're very engages, multi-generational, think about a marketer from that perspective, very different than it is here.

Jimmy: The Well was so successful because it was really immersive, what sort of immersiveness do marketers need now, does it need to be an amazing looking thing like Second Life? Rishad: In Korea we're very bullish about cyberworlds, in US it's more oriented towards gaming, we monitors Second Life, but we recommend most marketers to stay away. Why do you want it, for a press releases? 90 Percent of SL is for press releases, how is this going to help you sell things and make money? (Scattered Applause) Question: B2B vs. B2C and Ad-generated revenue vs. user-generated revenue (subscription). How are the dynamics different. Simon: Traditional cable companies are set up exceptionally well to sell subscription services, have to buy utility service plus options. Internet isn't that way, for now. John: For now. Simon: Yes, it may become a very different world but right now it's not there. Subscription would be hard to make work where there are millions of options, porn is about the most successful example, ads are not going to solve everyone's problem, every week you hear about one more site or one more model, traditional advertising only grows about 4-5 percent a year, selling stuff is going to grow, advertising is going to be the only real revenue model, and there are a lot of them so you better have a good model. Shawn: On the B2B side, just different application, in the late 90's the "exchange" was a model, that's going to come back. John: Check out GlobalSpec, back end of scientific content, extraordinary, didn't take 50 million in VC to build it. Shawn: There will be technology that will allow you to assess a page, in some sense marketers are concerned about a backlash, it's about what messages you put in the network, so if you're WalMart and promoting greenifying America is doesn't matter if you're against something personal, the value is in the brands that you put in the network. John: Advertisers are afraid of conversations, they're afraid of people thinking about their brands, they get feedback in social media, have to turn this into judo, have to approach marketing from a different point of view, change the structure of how agencies go about their job. Rishad: Marketing is about listening to your consumers, ask them questions, Nike campaign had users send photos to judges, people liked having editing, Zbrand said we're living in a world of crapocopia, bands can eliminate crap.

Question: User strength and power, there are some you want to market to more to promote viral activity, how to you target those types of people? Tina: If you're really committed to social media, you can identify the influentials and send them back out. Can be leaders in the community and spokespeople. Question: The assumption is that individuals control their brands, but what happens when people are talking about their own brands on their own blogs, all of these things are happening away from their control. John: The Cluetrain Manifesto crystallized that markets and brands are conversations, you are the chief conversationalist for your own brands and to guide them, GM posted a blog entry about the do-it-yourself ads that drew some critical ads, but it also drew a lot of positive responses. Shepherding a brand was different before efforts such as this.

Jimmy: Question from social network, egg model, social media on your site, or chicken model, an existing site. Any egg could be the next chicken. Where do you start, a big site or a little site? Rishad: It could be the chicken an egg an ostrich, but please recognize that marketers in America are not stupid, they are not scared, they are not stupid, but they want to embrace a space. The brand does matter, GM incident looks like a mistake, people get bitter, bitterness doesn't attract money. Question: Blend of social media, combined TV, print, banner and community all tied in together, we're seeing that it's very successful. Shawn: You can advertise on home page and reach 30 million people, the marketing mix can be orchestrated, but the mix can take place entirely in social media if they have enough scale. Tina: Social media can become the source material for advertising, winners of contest got to go to Oscars, yet the source was social media. Social media is not one way to do it, prime time isn't dead it's not the only thing that matters. Audences have to be engaged at every point but let them be a part of the brand experience. Question: Is posting and contribution what it's all about, most are consumers, where is the medium going, are more people going to be participating or are they just going to continue to be consumers. Shawn: We choose our friends by our ability to amuse them, that's not going to change any time soon. If they tend to think that we're funny or attractive we stick with them. Content today is so sharable, used to be a cigarette was social currency, now it's social media. John: Surprised that NBC didn't release whole package from VTech killer on Web, social media could chew through it and make sense. White House would try to bury documents but bloggers went through it and found juicy bits for media outlets. Question: Thinking about TV marketing dialogue? Simon: Promise of interactivity has been there for years, broadband will drive the dialog before TV will drive it, kids are using YouTube as their entire entertainment system, by the time that TV figures it out it will be too late. Question: In Hollywood we've stumbled in creating dialogue into revenues, Snakes on a Plane died as a film release in spite of huge online buzz. Awareness might be high but it doesn't necessarily drive consumption. Can dialog move consumption? Simon: there's a fair amount of dialog around TV, 1.3 billion streams on YouTube, we're going to be developing a lot of tools for situations that we just don't know about. Shawn: XMen movie, was an enormous amount of people who found out about the movie on MySpace, 15 percent went to movie because of it, 50 percent became aware of it, AND about half were female. John: SOAP should have been done in DVD and released in 20 theatres.

COMMENT: John hit the nail on the head, social media is an inverted marketing model that allows things to be monetized in small ways, with mass monetization a secondary step. This is contrary to most people's thoughts about mass marketing today, but it's where it's going -and it's where product development will be going as a result. There's a much broader economic cycle that will be coming into play.

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