Bullshit 2.0

It's been a while since I've personally blogged.

Since August 2008, I've been on the road talking with several groups of potential investors about our Series B round. It's amazing to me to see how naive some of these investment firms are. Many of them are so sucked up in the "web 2.0" frenzy that they are writing big checks to tons of companies who don't have a shot in hell of making it. Honestly, it's pure bullshit. Whatever happened to having a sustainable business model? You know, one that actually makes money?

There are basically two types of web 2.0 companies:

1) Grow like hell and hope Google or Microsoft buys us before they have to make revenue. These web 2.0 companies get a ton of money in their investment rounds, burn it quickly, and hope they get bought before they run into trouble. Sadly, most investors are attracted to this type of company. They all want to be involved with the next Skype. Anyone who has half a brain knows that most of these types of companies will fail miserably. Truly bullshit.

or

2) Build a company on a shoestring budget, whip your competitors with your technology, become profitable, and then put together a REALISTIC growth plan based on research and experience. This is Sway. Believe it or not, most investors still like option 1 better. Whatever happened to getting rewarded for hard work, keeping your expenses to a minimum, and actually proving your business model? Bullshit, eh? You're right!

After going through the entire investment circuit, I think I've finally found a capital firm that gets it. Though we are in the initial stages, I feel optimistic about a deal. I'm eager to find out how quickly we can scale now that we are almost through all the bullshit.

Thanks for letting me vent.:)

-Jason Weaver

Look At These Numbers!

According to estimates by eMarketer there were nearly 116 million U.S. user-generated content consumers in 2008, and 82.5 million content creators.

Both U.S. user-generated content consumers and creators are expected to grow significantly by 2013, with an estimated 154.8 million user-generated content consumers and 114.5 million user-generated content creators.

So what are the major content types being generated; well, eMarketer looked at social networking, blogs, user-generated video, and virtual worlds.

They found that in the U.S. social networking has the largest number of content creators with 71.3 million (in 2008), and social networking will continue to have the largest number of content creators in 2013, with 105.3 million. Blogs were second with 21.2 million content creators in 2008, and will reach 32.1 million in 2013. Followed by user-generated video at 15.4 million in 2008, and 27.2 million in 2013. And, lastly virtual worlds with 11.6 million in 2008, and 19.9 million in 2013.

Take that. Looks like marketers and brand managers need to be prepared to share control with their customers and prospects. Let our voices be heard!

--Milissa Rick, VP Online Insights

Is Social Media Free?

With the slow economy, we're getting more and more calls about how to effectively use social media which is great, we love new people and it's exiting to watch a company make it's first podcast or RSS. However, we're also hearing a lot of "we cut our marketing budget so we're using social media" which is not quite as good. There are a lot of companies hoping that social media is not only free but can catapult your brand to infamy and riches in a week and that's a pretty scary expectation. So how much social media is free and what do you have to pay for?

1) If you don't put your content somewhere, it won't be seen. There are both free and paid ways to do this and we at Sway think it makes sense to do a little of both. If you only put your video on free video sharing sites you might get some views but placing it on social communities where your audience is spending time makes sense too and this is generally paid for. The trick is to avoid the massive sites with high CPM's and a broad user base. Those aren't targeted and thus they act much like traditional media buys.
2) Do you value your time? Social media can be time consuming. You could look at it like shopping and know that you can go to Saks Fifth Avenue and get a Chanel dress. You could also find a Chanel dress for $5 at a thrift store but you're going to spend a long time finding it. Updating free tools like Facebook, LinkedIn groups, blogs, monitoring forums and video view numbers takes time and could arguably be an employee's entire job. If that employee isn't very familiar with social media it could take even longer.
3) What are you paying for? Paying a company or freelancer to handle your social media gets sticky when the deliverable is engagement. What is an engagement worth? The answer is you're paying for a combination of things. Sites that your hired hand knows about that you don't, contacts they have developed, ideas and strategy, cumulative market knowledge, the experience to determine if success is being acheived or not.

So while it's correct to say that social media is free it's also true that nothing really great is ever free. The balance of free and paid is ultimately up to you.

~Caitlin

Seven Ways for Marketers to Tighten Their Belts in These Lean Times

Per eMarketer (care of OMMA Magazine's Daisy Whitney):
1: Online marketing is measurable. Advertisers should embrace its accountability so they can demonstrate to their bosses that a marketing program is working.
2: Search marketing will be more vital than ever because it generates direct response and ROI.
3. Combine search marketing with online branding to create product awareness and desire.
4. Marketers should keep in close contact with their consumers. One of the best ways to stay in touch is one of the simplest: e-mail. It's an inexpensive and efficient marketing channel and a good bet in a sliding economy.
5. Part of keeping close to your constituents is to focus on building trust through good customer service, listening to what consumers say on blogs and social networks, and creating consumer forums and interaction.
6. Don't forget online video. Marketers should bring their video content to the Web, such as promotional films, sales demos, and customer testimonials. Video makes a site stickier and keeps viewers more engaged with content.
7. Test. Because now is actually a good time to experiment--but with practical, data-backed marketing tactics.

--Milissa Rick, VP of Online Insights

The Fear

With so many companies jumping headfirst into social media this year and with headlines detailing the horrors of online identity theft, bad blogs, CEO's Facebooking things they shouldn't etc. I thought it appropriate to write a quick post about the state of affairs since staying away from social media out of fear isn't really an option anymore.
Think of the side affects of social media like flossing. Regular attention to your content portals will keep them free of spammy comments, old content, and incorrect information.
1) There are predators, thieves, and competitors reading your content as well as your customers. Be aware that a bad review isn't the worst thing you can get online and protect yourself and your brand. Don't create a Facebook page for your brand and let "anyone" friend you. Facebook is pretty good about keeping their site relatively free of scammers and spammers but you should keep an eye on your own page. Some people simply should keep Facebook to a minimum. My doctor asked me about having a Facebook page or a blog and to be honest, I think that if your business depends on your personal reputation, you'll need to be extremely careful about what type of information you're putting out there.
2) Monitor comments on your company blog closely and keep an eye out for both scammers and extreme ill-wishers. Erase their comments but don't engage.
3) Transparency is a good thing. Your customers want to hear from your brand and want to tell you ways to better your business and what their experience with you is. Negative reviews are not really so bad and I have had clients make great changes to a product based on customer comments with markedly different reviews post-change.
4) Don't leave social media to the interns. No offense, we love our interns but allowing the first person in the company who wants to start a company Twitter feed to do so isn't a great idea. My advice? Gather ideas company wide. Some of the best social media ideas could be formulating in your accounting dept. or at the front desk, just make sure that when you implement them that it's being done by someone who is very familiar with the company culture and that all of the messaging is consistent with what you want your public perception to be.

~~ Caitlin