Social Media is Shifting Power from Advertisers to Consumers

In a recent column, Shel Israel opined, ‘‘Social media is not yet a vast wasteland.. But in the world, where changes come at the speed of the Internet, I see danger here.’’

When television was in its infancy, some of its pioneers sought to share fine arts with viewers, but advertisers quickly drove the decision makers to offer low comedy and variety shows. When social media was in its infancy, companies at first talked about listening to their products’ consumers, but now they are talking ‘‘about making social media more transactional rather than conversational.’’

Still, consumers push back, driving advertising budgets and media buys through their social media behavior. By the 2013 Super Bowl, some predict that advertisers will change less liked versions of their TV commercials to different ver- sions later in the game—for the first time making real time changes in the commercial lineup. This is based on the esti- mated 5 million viewers who tweeted or otherwise com- mented on the commercials during the 2012 Super Bowl, for which ads cost an average of $3.5 million.2 With $72 billion in U.S. television ad spending at stake,3 the once fanciful notion of ‘‘interactive TV’’ is becoming reality.

TV is still the primary communications channel for mar- keters, representing a 41% share of major media advertising spending globally in 2011, up from 38% in 2001, when In- ternet advertising was new.4 Advertisers are learning to put their TV commercials online, and it is paying off. Online au- diences watched ads a record breaking 1.3 billion times in the first quarter of 2012, an increase of more than 40% compared to the same period in 2011 and more than 225% compared to the same period in 2010.5

Paying attention to the convergence of TV and social media is critically important to advertisers, as Americans spend 20% of their day watching TV—and many are simultaneously playing with their iPad or iPhone.3 Research shows that 71% of tablet owners go online while watching TV; the extra device will soon not be needed, as all TVs are expected to be connected to the Internet, with more than three fourths of global TV shipments in 2015 having this capability.6

Research is beginning to appear to help advertisers un- derstand these interactions. Hanna et al. describe the social media ‘‘ecosystem’’ of digital and traditional media in their 2011 article.7 Hess et al. explore the interplay of TV, PC, and mobile technologies in the German home.8 And research by Onishi and Manchanda concludes that new and traditional media in Japan act synergistically in terms of market out- comes, with this relationship stronger during the prelaunch versus the postlaunch period for a new product.9

Certainly, more research is needed. Companies such as Bluefin Labs are using analytics to find out how context affects ad ‘‘buzz,’’ while recognizing that some processes are still a mystery. One ad appeared on two shows with similar demographics and ratings, yet one show created eight more times the social-media buzz than the other. Moreover, not everything is controllable, as social media users are not representative of the general population, and 90% of people’s conversations about brands happen offline.3

Experts in this emerging field believe that the relationship between advertisers and consumers is undergoing a funda- mental change. As Bluefin CEO Deb Roy put it, ‘‘Audience members speaking through social media is effectively a shift in power.’’3 Advertisers seeking to put that relationship back on a one way footing through ‘‘shouting’’ in social media ignore this power shift at their peril.
1. Israel S. (2012) Will marketing muck up social media? muck-up-social-media/ (accessed Jul. 15, 2012).
2. Talbot D. (2012) Why viewers could soon control Super Bowl ads. article.aspx?id = 39590 (accessed Jul. 15, 2012).
3. Talbot D. (2011) A social-media decoder. New technology deciphers—and empowers—the millions who talk back to their television through the Web. www.technologyreview .com/printer_friendly_article.aspx?id = 38910 (accessed Jul. 29, 2012).
4. Green A. (2011) Understanding television audiences. Warc best practice. Understanding%20Television%20Audiences,%20September% 202011.pdf (accessed Jul. 29, 2012).
5. Visible measures. Q1 2012 social video advertising report. .pdf (accessed Jul. 29, 2012).
6. Mane S, Thompson K. How does industry buzz translate into real world consumer activity? Early indicators of what this means for advertising. Breakfast_Briefing_with_Ipsos_How_Does_Industry_Buzz_ Translate_into_Real_World_Consumer_Activity.pdf (accessed Jul. 29, 2012).

7. Hanna R, Rohm A, Crittenden VL. We’re all connected: the power of the social media ecosystem. Business Horizons 2011; in press. doi:10.1016/j.bushor.2011.01.007
8. Hess J, Ley B, Ogonowski C, Wan L, Wulf V. Understanding and supporting cross-platform usage in the living room. En- tertainment Computing 2012; 3:37–47.
9. Onishi H, Manchanda P. Marketing activity, blogging and sales. International Journal of Research in Marketing 2012; in press. doi:10.1016/j.ijresmar.2011.11.003


Brenda K. Wiederhold


Who Gets Funding? Let the People Decide

In The Department of Mad Scientists,1 Michael Belfiore offers a glimpse into the workings of the maverick Defense Advanced Research Projects Agency (DARPA), which is re- sponsible for the birth of the Internet and GPS, among other amazing inventions. The small percentage of Americans who know about DARPA may have heard about it because it funds the Grand Challenge Race, with a $2 million prize for the first autonomous robot that makes it through a desert course, avoiding obstacles and following the rules.

‘‘One enormous continuing development is the exponen- tial growth of social networking media and the increasing use of social media by companies to crowdsource ideas, mount contests to award prizes and gather audiences, and attempt to create dialogues with customers,’’ wrote Rosabeth Moss Kanter in her syndicated column toward the end of 2010.2 The following examples illustrate how these new types of contests can work, and provide food for thought about new possi- bilities for research and development funding.

In 2010, Google awarded a total of $10 million to five finalists in its Project 10^100 contest, which solicited ideas for changing the world by helping as many people as possible. From 150,000 ideas submitted by people in 170 countries, Google selected 16 big ideas and let people vote for their favorites.

The Pepsi Refresh Project is looking for great ideas that are going to ‘‘refresh the world.’’ As with traditional grant funding, there are specific grant cycles, applications, and ca- tegories for projects costing from $5,000 to $50,000. What is new is that the project director gets to promote his/her pro- ject through videos and social media such as Twitter and Facebook, and the projects that garner the most votes win. Pepsi awards up to $1.2 million each month for such projects.

A 2011 contest sponsored by Enterprise Rent a Car was called Giving Back. It allowed visitors to its Facebook page to decide among 10 competing charities nominated by En- terprise employees. The first-place winner received $10,000, the second-place winner received $5,000, and the third- and fourth-place winners received $2,500 each. The contest gave Enterprise Rent a Car an opportunity to promote its foun- dation, which gives 75% of its funds to employee-suggested charities.

Talking about the Dockers ‘‘Wear the Pants’’ contest, in which entrants submitted a 400-word business plan and awards were made on the basis of votes from both commu- nity members and a panel of judges, one author3 offers tips for businesses wishing to engage in social media contests:

  •  The best prizes positively affect people’s lives, creating a positive association for the company.
  •  If everyone gets something (e.g., a coupon) for partici- pating, it helps everyone feel included.
  •  Associating with a good cause generates emotional ap- peal and a reason to spread the word.
  •  Running a contest through Facebook keeps visitors there longer, interacting with the company and each other.
  • A ‘‘soft sell’’ approach that mixes branding, sales, and
    contest strategy is appropriate for social media.
  • Identifying how the contest fits into the marketing strategy, devoting sufficient resources, and defining what a successful outcome looks like are essential to thecontest’s success.

CYBER readers may be interested in the results of a recent study,4 which identified seven key components to informa- tion communication and technology (ICT) competitions:

1. Challenge goal—what sponsors hope to achieve (e.g., prompt innovative thinking);
2. Marketing—howandtowhomsponsorsspreadtheword (e.g., conferences, Web site, social networking sites);
3. Application process—how entries are submitted (most are publicly available);
4. Judging criteria—what is used to evaluate applicants (e.g., originality, economic viability);
5. Judging process—the particular mix that determines winners (e.g., external experts, crowdsourcing, presen- tations);
6. Winners—recent winners and their topics (e.g., mobile apps);
7. Supplemental support—what additional support is of- fered to winners (e.g., coaching for pitching ideas to investors).

The authors of this study concluded, ‘‘In general, contests are increasingly being used as a tool to solve society’s most entrenched problems.’’

This leads us to suggest that more government agencies follow DARPA’s lead. Why shouldn’t governments hold con- tests that let the people decide which projects are funded? This could start small, with perhaps one percent of government re- search and development funding allocated to such contests. In these days of American Idol voting and social media-based contests, we suggest that U.S. and European government agencies consider the benefits of letting the people decide.

1. Belfiore M. (2009) The Department of Mad Scientists: How DARPA Is Remaking Our World, from the Internet to Artificial Limbs. Washington, DC: Smithsonian.
2. Kanter RM. A promising year for technology and innovation. Harvard Business Review 2010; T19:20:43Z.

3. Cotriss D. Social Campaign Shows the Power of Contests. Small Business Trends, April 21, 2011. 2011/04/social-campaign-shows-the-power-of-contests.html (accessed May 10, 2011).
4. Arabella Philanthropic Investment Advisors. (2009) Media, in- formation and communication contests: an analysis. Presented to John S. and James L. Knight Foundation. www.knightfoundation .org/dotAsset/356025.pdf (accessed May 10, 2011).


Brenda K. Wiederhold