Social Media Advertising Is Set to Explode. - 04/25/2012
Michael Lazerow
Michael Lazerow

The great agency battle has begun. After years and years of riding shotgun, agencies that focus on communications and conversations – PR firms and social media agencies – are gunning for their clients' ad budgets.

At stake is who will control, and earn the lucrative fees, from the cash companies are pouring into Facebook and Twitter ads.

In a world where the content is the ad and the ad is the content, the barriers between the different types of agencies go away, and all are frothing at all the new and growing revenue streams.

In a recent blog post, Altimeter Group's Jeremiah Owyang was the first influential analyst to report on the trend, writing, "The new advertising features from both Facebook and Twitter (Such as sponsored tweets and trends) encourage earned content to become advertising units and give an opportunity for social marketers to get into the advertising game."

He also said that he expects a "battle" between digital media and social agencies as these social agencies look to secure more of the marketing budget from brands, expanding their scope and revenue base.

In the comments of the post, Adam Kmiec, who leads social for Walgreens, said the industry created its own problems. Namely, agencies are battling each other, there are no accountable metrics, and everyone is selling a promise and not delivering. "We have allowed social media to become SEO industry; a collection pseudo experts all promising a solution without the talent to deliver. Frankly, it's depressing. I hope for better," he wrote.

Adam's comment was one of the best that I've read in a long time. I applaud his bold stance, which is both honest and raw.

The noise in this space is deafening. And I take partial blame for helping to create it. I believed strongly in 2007 that social was another fundamental shift in the Internet. Instead of sitting on the sidelines after selling my last company,, I jumped back in with my wife Kass.

While I take full responsibility for helping to create part of this industry, I sleep well at night knowing that all brands who joined early and stuck with it are leading the pack and starting to see meaningful results.

I've worked in the Internet space since 1994. So I've seen up close and personal the portal and search wars, the birth of the display market, ESPs, DSPs, listening platforms and more. Having lived through the growth of these other markets, I've seen more mistakes and missteps than most.

While I am the biggest fan boy for Facebook and all things social, I feel compelled to identify three specific problems that are keeping social media marketing from truly thriving.

Clients still believe an agency can tell their story.
The reality is that no agency or vendor can just "make it work." Why? Very simple: the rise of Facebook, Twitter and the other social platforms has made it easier than ever to distribute content at scale. But it doesn't work without a commitment to the content. Content is power. Content drives connections.

Brand advertisers need to find their voice. Once they do, all things fall into place. The voice doesn't come from a single campaign or ad agency. It comes from the soul of the business. Just look at Ford. The company was on death's doorstep in 2008 in the middle of the global financial collapse. Since bottoming out, it focused on its products, openness and committed to telling its stories through the stories of its owners. Its stock price is up 600% since then. No one agency or tool or vendor did this. The company did it and others just played a small role in making them smarter, better and faster.

Tool anarchy.
Buddy Media's success (and the success of other companies like Radian6, Hootsuite, etc.) has lead to large venture capital fundraises and a perception that the social media software industry is a massive space.

Let me tell you, it's not, and most of the companies that raised venture capital in the last four years will be out of business in the next few. Investors are idiots, for the most part. They are pack wolves with Audis and Porsches. They just follow. Very few lead and really know the true landscape and how complicated it is. So they've funded hundreds of companies. And they're all showing up to brands selling their own version of the bow and arrow for social.

Companies don't need bows and arrows. They need a unified way to organize their teams, optimize their programs, and repeat over and over again. So the "tool" space needs to be about internal organization and content optimization across all channels (page presences, paid ads, conversation management, etc.).

The world needs another social tool startup like I need another pencil in my eye.

Instead of focusing on their own internal organizations, companies went crazy trying to find the latest and greatest tool for everything they thought they needed to do. Companies, fat and happy with venture backing, were lined up to sell it to them. In the process, many of the largest brands ignored simple enterprise (read: boring) truths, like:

Do I need a single login with a unified work-flow (increases productivity)? Do I need a single brand asset repository (saves time by eliminating redundancies and securing approvals)? Do I need granular rights management (takes governance and security requirements off the table) and a unified data store (how can you activate social data if you're not collecting it?)?

Focusing just on social media and not social advertising.
The industry is still talking about "influence marketing" and identifying influencers. Brands are still talking about launching social presences with "engagement" as their end game, and not a means to an end. Most brands have invested in building suboptimal communities that sit in their own Caribbean Island.

These islands are warm, balmy and breezy, filled with tropical fruits and umbrella-topped drinks. They live on social platforms growing faster than ever and serviced by hundreds of small agencies and vendors hoping to eek by off of tips earned carrying your bags to your room.

The islands of different social presences make brand managers feel good as they escape their day-to-day pressures of driving real business results. But they are islands, cut off from the grind of everyday life when you need to focus on blocking and tackling to grow.

The only way brands get off their social islands is by looking at social media not just as an engagement vehicle for a small audience, but as part of their larger advertising and marketing efforts.

What I realized long ago, and why Buddy Media acquired a social advertising company, is that this isn't just about social media. Social media - the publishing of content through owned channels to foster community engagement - is no more real than the idea that you're going to live on a Caribbean Island for the rest of your life.

It's critical to engage, but also to engage at scale. It starts with content and social engagement with that content. But that engagement is not an end in and of itself. It's a means to an end. That end is the scale that happens when you combine the consumer insight you get from social media with the massive reach available via paid advertising (on any channel, not just social). And the goal is to effectively invest those advertising dollars to generate the highest results -- sales, new customers, loyalty and more.

We are at a turning point today. I see it in all my conversations with clients (they typically understand the larger play here) and potential clients (many of which are deciding between a unified solution that makes it possible to organize, optimize and repeat to drive maximum ROI and the next hot tool without a proven track record).

Brands that organize internally and get serious about their publishing efforts (free and paid, conversations and ads) and their data will continue to succeed. Others, who look to third parties to check the box and/or do it all, will lose.

Michael Lazerow is CEO of Buddy Media, whose social enterprise software is used by global brands and agencies. He founded and sold it to Time Inc., and U-Wire, which was sold to CBS. Follow him on Twitter at

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