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Our 2008 Digital Outlook Report is out. Register for your free copy. Domestic advertising media billings for the agency grew to $735 million on more than 1,800 web sites in 2007, up 36 percent from 2006. Publisher web site spending slipped to 19 percent of billings, down from 24 percent in 2006. As Jeff Lanctot highlighted, customers don't live on a handful of web sites or portals anymore. Advertisers still value large sites, but they realize the web presents a seemingly endless number of advertising options.



And not just that, social influence marketing is changing the way marketers do business in 2008. Don't miss the Social Influence Marketing section in the report which includes social media trends, the six "C"s of social influence marketing, an argument for rewarding users on social networks and the social technographics profile. All the  charts from the report are on Flickr too.

Feedback has already started pouring in with Advertising Age and News.com doing pieces on the report. I'm most interested in learning what the bloggers like Rohit Bhargava, Peter Kim, John Bell, Jay Deragon, Matthew Peters, Paul Gillin, Jeremiah Owyang, Shel Israel and Brian Solis have to say about it and specifically the various social media thoughts articulated throughout the report.

Over at Forrester, Mary Beth Kemp and Peter Kim have published a report titled, "The Connected Agency." As Mary Beth Kemp explained to me during a conversation, they believe that as consumers trust brands less, the interactive and advertising agencies will have to get closer to the consumers. Getting closer to the consumers means nurturing consumer connections and facilitating conversations. Mary Beth and Peter believe that within five years the agencies will get closer to the consumer communities and will eventually become an integral part of them.

Cesar Brea was in our offices the other day. A former colleague, Cesar was most recently a Global Practice Leader at Marketspace Global (part of the Monitor Group). So what did we talk about? Social networks of course and more specifically Duncan Watts research on how trends spread.

Duncan contradicts some of the more traditional research arguing that how much an influencer a specific node is matters a lot less than earlier thought. It doesn't matter what the composition of the network is. Trends are just as likely to spread through networks full of random, everyday people as they are through networks sprinkled with "influencers." This flies in the face of some earlier research by Ed Keller and Jon Berry that they highlighted in their book, The Influentials. It also contradicts the The Tipping Point premise that Malcolm Gladwell outlined in his first book.

Analyzing email patterns, Duncan Watts discovered that highly connected people are not, in fact, crucial social hubs. His research shows that a slob is just as likely to start a huge trend as a well-connected person is. But that's not all. Duncan has developed a new technique for propagating advertisements virally. Apparently, this technique can quadruple the reach of an ordinary online campaign by harnessing the pass-around power of everyday people and ignoring the influentials. Called Big Seed Marketing, it combines viral and mass marketing into one strategy. You can read more about it in his Harvard Business Review article.

My take? Based on the research I've seen and been a part of, Duncan seems more right than the others. Just by looking at information sharing patterns on social networks, one can see how the centrality of the node matters more than who the actual node in a network is. For an interesting Duncan Watts paper, read The New Science of Networks which was published in the Annual Review of Sociology. Also read the recent Fast Company coverage.

Is there any doubt that social media exploded in 2007? The astounding growth of Facebook alone forced everyone – not just marketers, but corporations, investors, academia, and media –to pay attention to social media as a serious business and cultural phenomenon. But the bigger question is how will social media change the way we do business in 2008? In fact, we’re discovering a major shift occurring. The rise of social media is creating a new form of marketing altogether, which we call social influence marketing. Social influence marketing is about employing social media as part of the entire lifecycle of a marketing campaign, even beyond the campaign.

The emergence of social influence marketing is one of 10 major social media developments for 2008 that you need to know about now.

McKinsey talks about the marketing activities that can benefit from user generated content in a recent McKinsey Quarterly article. They talk about public relations, advertising, product development/innovation and customer service outlining how user generated content can impact each of these areas. I couldn't agree more though I just wish they'd get into more detail.



We all know that social media is having a transformative impact on marketing but so far there's little talk about how exactly. Only time will tell whether there is more hype than is warranted. However, the article made an important point regarding experimentation and focus -

In our experience, however, marketers who let a thousand flowers bloom risk losing focus—for instance, by failing to recognize the areas where user-generated media could make the biggest difference or by stumbling into the public-relations problems that intense customer involvement sometimes creates. One way of enhancing focus is to take a top-down approach, starting with drawing a conceptual map that links a company’s brand, industry, and customer characteristics with its core marketing activities that could benefit from user-generated media.

Everything must still start with the business objectives. And you still need to frame all your social media activities through the lens of your brand. While a lot of industry pundits encourage lots of experimentation, I believe that a more strategic approach (similar to what McKinsey hints at in the extract above) is really required.

According to Dana Boyd and Nicole B. Ellison in Social Network Sites: Definition, History, and Scholarship 

We define social network sites as web-based services that allow individuals to (1) construct a public or semi-public profile within a bounded system, (2) articulate a list of other users with whom they share a connection, and (3) view and traverse their list of connections and those made by others within the system. The nature and nomenclature of these connections may vary from site to site.

Read their article for a wonderful overview of social networks, their roots and some recent research. What's not discussed in much detail but deserves attention too is how much social networks get influenced by one another. Features present on social network quickly gravitate to the next. We're going to see a lot more of this if OpenSocial takes off and lots of applications are developed using it.

Gavin over at Servant of Chaos (love the blog name) highlighted the Social Networks and Group Formation article that I wrote for Boxes & Arrows. He also discussed Granovetter and his strength of weak ties authored back in 1973 and published in the American Journal of Sociology. The article has gotten just under 15,000 page views so far and has been linked to from several prominent blogs all over the web.  

Boxes and Arrows published the first of a three part series on Social Networks written by me. Its a literature review with practical tips for practitioners involved in designing, building and evangelizing social networks.

Humans suffer from information overload; there’s much more information on any given subject than a person is able to access. As a result, people are forced to depend upon each other for knowledge. Know-who information rather than know-what, know-how or know-why information has become most crucial. It involves knowing who has the needed information and being able to reach that person (Johnson et al. 2000).

In this context, understanding the formation, evolution and utilization of online social networks becomes important. A social network is “a set of people (or organizations or other social entities) connected by a set of social relationships, such as friendship, co-working or information exchange.” (Garton et al., 1997) While the Internet contributes to the information overload, it also provides useful tools to effectively manage one’s social networks and through them gain access to the right pieces of information.

For more visit, Boxes and Arrows and let me know if you think I've left out some major contributions.