User Generated Content and Approaching Advertising in Social Networks

1. User Generated Content and Approaching Advertising in Social Networks OMD International Caroline Vogt Head of International Research: EMEA & Americas

2. IAB Europe’s comments • Last year, Microsoft began investigating user generated content and the implications in how advertising will work in social networks. This latest qualitative study covers the US, UK, Canada, China, Brazil and France with an objective of understanding how receptive consumers were to advertising in these markets. • What it reveals is how people are taking control of their online lives and the shift in behaviour that is fundamental to the online experience. It shows how User Generated Content can mean many different things. • Social networking describes the linkages between people and the communities that cluster around content. • Wikis are charting the development of how knowledge is acquired and processed. • There are also clear differences between those people creating content, those editing content, and those viewing this type of new content. • “The era of content creation has begun and it’s here to stay”, explains Caroline Vogt from Microsoft’s Digital Advertising Solutions team. “We need to stop thinking about internet users and more about internet participants. People really recognise this power that they now have and that presents specific challenges for the marketing industry. This is a democratic environment in which the consumers can be the creators of content.” • Brazil was revealed to be the most flirtatious with the Google-owned Orkut site proving to be ‘ultra-addictive’: photos of social life are big. In France there was a strong culture of personal expression and blogging, with the most personal photos being placed on Windows Live spaces. In the US there was a more sophisticated behaviour with different spaces reflecting work and private life. In the UK the strongest characteristic emerging is the photos of people’s social life and the importance of how these web spaces are providing a glue between people’s work and personal lives. • For advertisers there’s a fear of going into an unmanaged media environment and Microsoft have taken the learnings from this research and developed some simple guidelines for how to harness these new spaces. • One of the key elements emerging is how virtual connectivity is deepening real world friendships.

3. “Virtual connectivity is deepening real world friendships.” Caroline Vogt: Head of International Research: EMEA & Americas

4. Web 2.0 A Bigger Bang The second internet goldrush is in full swing, and this time it’s all about real people, creating, editing and showcasing their own lives and opinions Source: The Guardian 4th Nov 2006

5. The rise of social networking sites

6. A shift from authority to openness and collaboration Source: Spannerworks.com, 2006

7. What characterises social media? • PARTICIPATION • OPENNESS • CONVERSATION • COMMUNITY • CONNECTED-NESS Source: Spannerworks.com, 2006

8. Different levels of involvement with social media CREATION SHARING VIEWING

9. 16% have started their own blog Creating content is still in the minority – but they are still significant numbers • 11% have edited existing online content • 29% have built their own website European Markets Frequent Internet Users – “We are all media owners now” March 2006 European Markets Frequent Internet Users – “We are all media owners now” March 2006

10. And content creation will grow “Which of these do you plan to do in the future?” European Markets Frequent Internet Users – “We are all media owners now” March 2006 European Markets Frequent Internet Users – “We are all media owners now” March 2006

11. Sharing content and opinions is more common – photo sharing is the most popular activity “Which of the following have you done online?” European Markets Frequent Internet Users – “We are all media owners now” March 2006

12. Viewing and reading social media even more common – in particular personal content “What kind of blogs do you read” European Markets Frequent Internet Users – “We are all media owners now” March 2006 Blog Users: European Average Regular Internet Users – “We are all media owners now” March 2006

13. Technology is enabling “Internet users” to become participants • Content creators • Community creators • Conversation creators • Newness of behaviour recognised “The spaces thing is still in its infancy. Once everyone has it, it will change communication much more” Male 35+, London “There’s been such a big change in internet use recently” Female 18-34, Manchester Source:Essential Research, 2006 Source:Essential Research, 2006

14. Implications for traditional media owners “Technology is shifting power away from the editors, the publishers, the establishment, the media elite. Now it’s the people who are taking control. “We’re looking at the ultimate opportunity,” Murdoch says. “The Internet is media’s golden age.” Rupert Murdoch, Wired Magazine July 2006

15. It takes 6 months to create a TV ad – and 2 hours to create an online viral It takes 3 weeks to create and write a press release – but blogs are written and posted in seconds It takes a month to get focus group feedback – but global online audiences shape opinion 24/7 Technology has democratised what was oncethe world of "the few" – now we all have one voice Implications for Marketing

16. Understanding how advertisers can engage in social networks

17. Research Overview 183 participants • Objectives • To provide an understanding of the personal spaces market and the positioning of WL Spaces • To explain the motivations for using WL Spaces and the role it plays for members • To provide insight for advertising partners on commercial guidelines • Research Approach • A multi-faceted qualitative approach was designed, mixing in depth interviews, friendship triads, home visits and online journals and Messenger chats • Timing: Summer 2006 • Sample: 18-34 (friendship triads); 35+ (depth interviews) • Conducted by Essential Research Chicago, Philadelphia, San Diego 7 Triads, 7 depths [10 home visits] 12 online journals Toronto, Montreal 9 triads, 6 depths [9 home visits] 14 online journals Shanghai 5 Triads [5 home visits] 21 online journals London, Cheshire 4 triads, 5 depths [5 home visits] 6 online journals Sao Paulo 4 triads, 4 depths [6 home visits] 4 online journals Paris 4 triads, 4 depths [6 home visits] 1 online journal

18. Culture impacts on usage More flirtatious; Orkut ultra-addictive. Photos of social life are big. Less networking. Existing friends are key. Heavily etiquette-driven Market heavily friend-driven. Migration has big impact. Social co-ordinating & documenting are common Strong culture of personal expression and blogging; photos as mark of creativity. Far less socially-oriented Spaces as entertainment; important work/external perception factor Photos of social life are big. Spaces as new social currency.

19. Brand’s perspective • Unmanaged media environment • Potential for brand manipulation • Fear of intruding personal environment There is some hesitancy amongst advertisers about entering this environment Network’s perspective • Its my personal space • My community has power • Don’t intrude Source:Essential Research, 2006

20. Brand’s perspective • Unmanaged media environment • Potential for brand manipulation • Fear of intruding personal environment No category rejection, acceptance of advertising But clear advice… 1. Not enough just to be there 2. Need to be relevant 3. Create permission Advice from social networkers….. Network’s perspective • Its my personal space • My community has power • Don’t intrude Source:Essential Research, 2006

21. Create permission Drive conversation within networks Drive conversation between brand and network Engaging in Social Networks Participation Characteristics of Social Media Openness Conversation Community Collaboration Source: Spannerworks.com, 2006; Essential Research 2006

22. Create Permission What are the rules for standard ad formats? Are they acceptable in a personal space? Understand how people use networks

23. PUSH In general, banner advertising is accepted Users accept banner advertising – they are not viewed as having to reflect the user’s interests nor intrusive Source: Essential Research 2006

24. But, you are entering a personal space – don’t intrude! “it takes away part of my space. It’s ironic, it’s called Spaces, but here are ads that take away space.” (Male 35+, London) no sense of purpose or call to action/ direction “quiet”- barely noticed by many more of a niche say: Wow! Intrudes into users’ ‘personal space’ Ultimately only the most interested user will allow the submission of their space to the advertisement

25. Executional guidelines PUSH CONTROL AND CHOICE IS KEY • Users either hate or fear ‘entrapment’ banners promising rewards – some fear clicking over as it may expand/take details etc • Make ads clear in terms of what user is expected to do • Graphics/video sit well in a Space (but don’t clash with user content) • Making audio optional is a virtue

26. New Outlet for Creativity A form of social currency “It changes how I view things because now with my space I am always thinking of a new idea to talk about; before when I went to see a movie I would just sit there and enjoy it but now I get more reflective of it, in terms of what I can say about it on my Space” Canada “(Messenger) makes it easier to talk to a girl you’ve just met in a bar. You go to their Space for the more personal stuff. It’s like it’s replacing the first date” Male 18-34, Manchester Deepening Relationships “A colleague told me about his Space. I saw he likes to travel, he likes rock-climbing, he used to be in a band. You find out all these things about people that you wouldn’t otherwise have known” Male 35+, London Self Expression “People see a side of you they wouldn’t normally. Maybe a more fun, cheeky side of you” Female 18-34, Manchester Understand Motivations to use

27. Playing the field Documenting the moment Networking Friendly curiosity Self-actualization New dimensions Innocent voyeurism Popularity seeking THESE NEEDS IMPACT CHOICE OF SITE AND BEHAVIOUR WITHIN IT Social Co-ordinating Keeping in touch Understand Motivations to use UNDERLYING MOTIVATIONS (NEEDS) Individualism & creativity Friendship & belonging Discovery & exploration Sex & relation-ships Personal achievement / actualization Self expression Communities Extending networks All these have distinct motivations, ways of behaving and relating to content and the viewer

28. “Open” vs “Closed” Networks impact on how people view and use NETWORKING/PRIVACY FUNCTIONALITY OPEN (limited control over viewing and networking) CLOSED (control over networking and viewing – invitation) WL Spaces Perception: Unsafe Viewer: Often unknown Behaviour: Often Addictive Attitude: Fun Content: Shallow Perception: Safe Viewer: Known Behaviour: Rational Attitude: Serious/Fun Content: Deeper

29. More personal content shared on more “closed” networks Source:Essential Research, 2006

30. Create conversation within communities/networks Through use of standard ad formats Tap into “valuable” networkers Associate with communities Use branded properties to stimulate conversation

31. Executional variation can stimulate word of mouth “I’d like go on a friend’s Space and see he had a different clip from mine so I’d definitely message him and ask how he got it” Male 18-34, Philadelphia “It’s important not to put the same ad on everyone’s Space – if you run different ads on different days and different sites it would make people say what have you got on yours?” Male 35+, Toronto Source:Essential Research, 2006

32. Maowei, 19, Shanghai Regularly visits friends’ spaces to comment and talk. Searches net for additional ‘stuff’ for her own site Popularity Seeking “I love this space, it’s my schoolmate’s. I’ll leave a reply as soon as she has updated it. I come here every day” Chats to friends using Messenger and SMS while studying and downloading TV shows and films. With friends she is engaged in a constant cycle of creation and commenting in WL Spaces (and other sites) Customises everything – her mobile, her landline, her WL Space, her PC desktop, etc “I searched for materials to decorate my space” Very brand-conscious – multiple images sent of Coke, Pepsi, Nokia, Levi’s “This is the phone I want to buy, it’s a Nokia”

33. Popularity Seeking Commercial Opportunities Younger: make me look cool(er) Older: make me look sophisticated All: make me look vital to my group I want brands to interact with me, I want to personalise and customise "I wanna decorate my Space as much as I can. Maybe that’s cheesy but I want to make it look great and stand out.“ Female 18-34, USA The decoration of the personal page is actually a driver and point of discussion within this author’s network

34. Associate with communities Volvo “What’s your story”

35. Volvo“What’s Your Story?” (http://whatsyourstory.msn.com/) Campaign Objectives • Create an ongoing platform to engage adults 25-54 with Volvo. • Represent core Volvo brand values: human focus; active attitude • Continue to deliver a breakthrough experience worthy of the Volvo + MSN partnership by connecting with authentic human stories • Associates Volvo with the blogging experience, rather than the content itself. Goals/Results: • Engage consumers with ‘Volvo for Life” • Increased brand favorability and consumer agreement with Volvo brand attributes • Drove purchase consideration for Volvo automobiles • Increased web search for Volvo keywords

37. Use Branded Properties to stimulate conversation/sharing - Sponsored Gadgets Gadgets work: • they add real content • theyareentirely user-selected • they allow individual expression • they’re free • they help cement the role of the Space as the user’s online hub Positively, users made logical and often creative connections between a gadget and the type of sponsor behind it

38. Create conversations between network and brand Create interaction and involvement “Open” the brand to interaction

39. Join the Network – Create a Space Respondents discussed what a sponsored space (rather than ‘standard’ website) might bring to a brand • younger users: gives brand more currency • expectation to leave comments and suggestions – potential for currency and dialogue • tool to project personality of brand e.g. heritage, storytelling, interactive games or quizzes • ‘micro spaces’ could be dedicated to new product launches (use potential of photo gallery) “so with Adidas they could do something on their first ever factory or this is how we made our first ever trainer“ Male 24 Chicago

40. Create interaction and involvement with branded content….but stay authentic Members express their individuality – brands should too. Showcase a side of your character they don’t normally see

41. McDonalds “Express yourselves”

42. Positive Results Results Competition entries – 195 uploaded images Visits: 44,752 votes submitted Viral Spread: http://www.sweatdrop.com/forum/showthread.php?p=65339

43. An extreme, but interesting example Certain users – the more brand-involved and heavy users – spontaneously suggested examples where the user takes even more control of the commercial property. An example from China: “A white Adidas shoe emerges on my space, and everyone who comes to my space can sign or doodle on it. In the end, it becomes my own shoe.” Should this type of execution reserved only for ‘braver’ brands?

44. Understand the motivations to use Express yourself Create & maintain good conversation Empower participants Behave like a good Spaces member Underlying Principles

45. The best Spaces advertisers will behave like the best Spaces participants Be creative Be honest and courteous (permission) Prove your individuality Be conscious of your audiences Update regularly! Source:Essential Research, 2006