Blog Archives

Mobile Advertising to Reach $8.2 Billion by 2016 As Search Market Share Shrinks

New figures released by Forrester Research project the healthy growth recently seen in U.S. interactive advertising will continue through 2016, with total spending reaching $76.6 billion, or 35 percent of global ad spend.

The figures are particularly encouraging for those in the mobile sector, who have had to deflect criticism about the current state of mobile advertising and its viability using current technology. The report projects mobile interactive advertising will enjoy a compound annual growth rate of 38 percent, reaching $8.2 billion in 2016. This best-in-class growth will be led by a growing mobile commerce market, consolidation of mobile ad networks and the implementation of rich media ad formats as smartphone technology advances.

Consolidation in mobile ad networks has accelerated in the past two years, as Google acquired AdMob for $750 million, Apple acquired Quattro Wireless for $275 million and ValueClick acquired Greystripe for $75 million, placing the full force of some of the most valuable companies in the world behind the mobile ad sector.

Mobile Advertisement Example - Land Rover

While display and search are projected to retain their dominance of most interactive ad budgets as rich media, text listings and online video components become budget staples, search engine advertising is expected to see a significant reduction in both its growth rate and its share of the overall interactive market. Search advertising is projected to experience a compound annual growth rate of 12 percent, nearly doubling from $18.8 billion in 2011 to $33.3 billion in 2016, but will see its share of the overall market decrease from 55 percent to 44 percent over the same period as other formats establish themselves as meaningful components of large scale media buys.

Forrester reports social media marketing will enjoy a healthy 26 percent compound annual growth rate, but will only reach $5 billion in total spend due to the inexpensive nature of many social ad platforms.

With the explosive valuations of literally thousands of VC-funded startups heavily dependent on advertising revenue for survival, let alone growth, these latest figures are encouraging. However, marketers appreciate (and are increasingly demanding) both security and results, which will likely benefit the largest and most established companies in mobile and social, including Google, Apple, Facebook and Twitter. The industry should expect further consolidation as the large, cash and equity-rich players utilize critical acquisitions to expand their arsenal and take advantage of the rapidly accelerating growth in interactive advertising.

Follow @LetsChatBiz on Twitter and join us on Facebook for access to exclusive content.

Rise and Fall of MySpace is A Lesson for Facebook

MySpace was the king of the early social Web, with nearly 76 million monthly unique visitors at its peak in December 2008. It spawned the careers of several music mega-stars, and brought in as much as $470 million a year in advertising revenues. When News Corp. purchased the social network for $580 million from Intermix, MySpace was poised to become the transformative centerpiece of a new media empire. Shortly thereafter, a 21-year-old Mark Zuckerberg turned down a $1.6 billion offer from Yahoo!, and the world balked at his seemingly uncontrollable arrogance and idiocy. My, how time reveals all.

This week, with the backdrop of LinkedIn, Pandora, Groupon and Zynga enjoying multi-billion dollar valuations, MySpace was auctioned off to Specific Media (and Justin Timberlake) for a paltry $35 million, shrinking into the shadows of the new era of online and social media. Facebook, once dwarfed by the size and power of MySpace, is poised to go public in the next 9 months valued at over $100 billion. It seems Mark Zuckerberg, now personally worth over $18 billion thanks to Facebook, isn’t the arrogant fool many perceived him to be.

Instead, Zuckerberg is hailed as a genius, a visionary and has been crowned the King of the Web. His company is expected to pull in $2.19 billion in revenues in 2011 and double- and triple-digit growth in annual display ad revenue has vaulted Facebook past Yahoo! and Google to the forefront of display advertising. Today, Facebook enjoys the company of over 700 million users, while MySpace continues to shed millions of users and traffic has fallen off a cliff.

MySpace v Facebook BloombergBusinessWeek

Facebook is on a tear, and at times appears unstoppable. But if there is one thing Silicon Valley and the online world has learned, things can change in a heartbeat. As Google likes to say, the competitors are always just one click away, and in social networking, any exodus almost exclusively means a total exodus. When your friends flee, you flee. Facebook must learn from the mistakes MySpace made if it wants to avoid the same fate, especially considering how poorly regarded the company’s image is in spite of its massive size and success.

Mismanagement, a total disregard for the user, an onslaught of spam, fake profiles and spammy features and an ill-fated sale to a massive old media overlord are just a few of the missteps that took MySpace from a company that could have been worth billions to a nuisance happily discarded for pennies on the dollar.

Facebook’s first achievement on this path came years ago, when Mark Zuckerberg shocked the world and turned down a $1.6 billion offer for a company with little to no revenues. MySpace co-founder Chris DeWolfe noted to Bloomberg Businessweek that the News Corp. acquisition deprived his company of the start-up culture upon which the company was built and thrived. A relatively slow and simple introduction of advertising features on Facebook, partnered with a voracious focus on the user experience, has kept Facebook users from feeling exploited (at least not by ads, privacy concerns are another issue.) Partnerships with Zynga (which just filed to IPO valued at $20 billion and is hoping to raise up to $1B) and search giants Bing, Yahoo! and Google have made Facebook the core of the modern Web experience.

The potential for Facebook to succeed where MySpace failed is astounding, but rather than celebrating their victories over the fallen competitor, Facebook must treasure the opportunity to explore exactly how MySpace fell short, and how they can deliver mind-blowingly positive experiences to their users every step of the way.

Want more exclusive content from Let’s Chat Business? Connect with us on Facebook here and follow us on Twitter @LetsChatBiz.

Img. Credit: Bloomberg Businessweek

Connected Television and IntoNow Are Poised to Disrupt Integrated Brand Advertising

Earlier this year, Yahoo! made a splash with its acquisition of 12-week old media check-in app IntoNow for approximately $27 million. The tech media circles, often critical of Yahoo! in recent years, praised the move in spite of the multi-million dollar price tag and the fact that IntoNow was just 12-weeks old.

IntoNow utilizes wavelength recognition to listen to and identify television programs with the tap of a button, and has become an important tool in Yahoo!’s previously-maligned foray into social. IntoNow combines the addictive check-in elements of Foursquare and the clever utility of Shazaam with the seemingly unstoppable power of Facebook and Twitter. While this conflagration of new media stars yields hordes of adoring users and Silicon Valley praise, IntoNow is poised to tap into the well-established mega-billions of the traditional media television industry.

IntoNow - From Yahoo!

The Internet is transforming television, and the first-glance value of IntoNow is obvious. Anything that gets users in front of television screens, especially if paired with live event coverage a la CoverItLive, holds immense value to television networks seeing more and more eyeballs transition to the smaller screens of laptops, tablets and smartphones.

However, the multi-billion dollar potential of IntoNow and Internet-connected televisions (including Yahoo!’s ConnectedTV) lies in the value these tools can deliver to brand advertisers and CMOs desperately seeking ways to integrate campaigns across the increasing number of platforms used by consumers. The possibilities are endless:

  1. A consumer “checks in” to the live airing of the latest White Collar episode and receives a reward from USA Network (a badge, points, a sneak preview video, a behind-the-scenes look, etc.)
  2. IntoNow utilizes a Pandora-esque algorithm to provide recommendations and offers brand advertisers the ability to provide highly relevant Sponsored Recommendations based on a user’s viewing habits
  3. Yahoo! pairs ConnectedTV and IntoNow with its own real-time ad bidding and exchange technology to deliver contextually matched, highly targeted ads based on what a user is watching right now
  4. A signed-in Yahoo! user receives time-sensitive television and movie recommendations from networks, Fandango, movie studios and the many advertisers Yahoo! already has relationships with based on their explicit IntoNow viewing habits and the inferred interests derived from them
  5. A viewer “checks in” to American Idol and is given the option to “Like” the show’s Facebook page, read the Idols’ tweets or purchase and download a song from the night’s episode directly from iTunes

The power of IntoNow in the right hands makes Yahoo!’s purchasing price of $27 million seem like chump change, and paired with ConnectedTV and real-time ad delivery, may be the spark that ignites Yahoo!’s rebound. Matching advertisers and brands with consumers is a ceaseless quest, and IntoNow gives Yahoo! a plethora of options to deliver value to a vast range of customers while capturing the always-critical adoration of its users. Execution matters above all else, and we’ve seen dozens of hot, nimble startups fall victim to the oppressive tides within a large and entrenched public organization.

Want more exclusive content from Let’s Chat Business? Connect with us on Facebook here and follow us on Twitter @LetsChatBiz.

Twitter and Facebook Seek Big Ad Dollars with Opposing Strategies

Defying the overall economic trends witnessed across the United States and the rest of the world, Silicon Valley is once again a thriving, dominant ecosystem that some are calling “the last great American frontier.” Spurned by widespread popularity of social pillars including Facebook and Twitter, the seemingly insatiable appetite for tech IPOs and innovations in content and brand integration, the prospects for online advertising are brighter than ever before.

The IAB reported 2010 online ad revenues of $26 billion, a 15 percent increase from 2009 and a new record. While search remains a dominant revenue generator – accounting for 46 percent of total spending with 12 percent YoY growth – relatively newer formats including sponsorships, mobile formats and site takeovers are experiencing massive growth. Many entrepreneurs and venture capitalists, with big valuation dollar signs in their eyes, are literally betting their fortunes on this growth trajectory continuing, hoping advertisers follow the paths of the hundreds of millions of users interacting on Facebook and Twitter every day.

IAB - Online Ad Spend Classification

Facing looming pressure to generate new revenues off their massive engaged user bases and hoping to disprove critics who argue social media advertising is ineffective, Facebook and Twitter have accelerated their monetization programs. However, the two social icons are tackling the same issue with two very different strategies.

Facebook, which enjoys healthy, highly profitable partnerships with gaming companies like Zynga, has exploded past Yahoo! to become the largest seller of online display advertising (in the United States, excluding Yahoo! media network partner sites.) While Facebook is home to the online “Pages” of virtually all of the world’s largest brands, the company’s automated ad-buying system is targeted toward smaller advertisers, allowing them to custom-target based on a wide range of demographic and geographic variables.

Adam Bain - Twitter President of Global Revenue

Twitter, still several years behind Facebook in monetization development, is just beginning to build out its sales force and will not possess an automated ad-buying system until late 2011. Under the direction of Adam Bain, Twitter’s President of Global Revenue, the company has slowly rolled out advertising platforms including Promoted Tweets, Trends and Accounts that have been targeted exclusively toward the largest brand advertisers on the Web. As Twitter’s ad auction infrastructures develop further and the sales team grows in size, and if usage continues to skyrocket with the help of  key platform integrations like Apple’s iOS 5, the company’s $150 million in projected 2010 revenues will likely swell dramatically, helping to justify the reported $8-10 billion valuation.

The two distinct strategies employed by Facebook and Twitter are likely to merge and overlap as each company builds its sales and ad-serving infrastructure, but it appears each company understands how businesses of all kinds use their services and has structured their early monetization platforms accordingly.

Want more exclusive content from Let’s  Chat Business? Connect with us on Facebook here and follow us on Twitter @LetsChatBiz.

Yahoo! Search Direct Provides Richer, Faster Results

Today Yahoo! announced a new search product, Search Direct, that integrates richer content and instant results to the search experience.

Could this be the product & morale boost Yahoo! needs? It just may be. After months of public hits and high-profile executive departures, Yahoo! has taken a significant step forward in reversing the company’s downward trend. Competition from Google, Facebook, Twitter and others have put pressure on Yahoo! to release an innovative, revolutionary product to capitalize on the company’s massive Web audience.

Yahoo! Direct Search

Search Direct is clearly an effort to make Yahoo! Search more of a destination and less a sea of links. Search is about content and information discovery, and reducing the number of steps it takes to get a user from query to information is vital.

View and test Search Direct here.

Google Instant was a start – it brought links to users faster. Yahoo! Direct Search takes it one step further, providing a richer experience and faster, more comprehensive access to answers, not just links to answers. It’s early and the product is still being refined, but it has big potential.

Yahoo! Direct Search

Here is the press release from Yahoo! announcing Search Direct:

Yahoo! (NASDAQ: YHOO), the premier digital media company, today announced Search Direct, which delivers answers and direct access to websites before you complete a query, hit the search button, or go to a search results page. This search innovation supports Yahoo!’s strategy to fundamentally shift the way people experience the Web – by providing the richest, most integrated content faster and more efficiently.This new feature, currently in beta, taps into Yahoo!’s unique opportunity to combine content and structured data and to provide a rich search experience. Search Direct predicts search results as fast as a person types, character by character, and presents those results dynamically, generating a fast, simple search experience that goes beyond a list of blue links.  Search Direct rolls out in a public beta to Yahoo! users across the U.S. today, and will be available in other Yahoo! products and markets later this year.

“With today’s launch, direct answers – not the search results page – is the primary focus. We are redefining the search process and prominently displaying direct answers where search decisions are being made,” said Shashi Seth, senior vice president, Yahoo! Search and Marketplaces. “Search Direct is evidence of Yahoo! continuing to lead innovation in search, enabling people to take action faster, find what is most important, and sample what is possible with the next stage of search technology.”

With Search Direct, Yahoo! content is combined with information from the Web to provide rich answers, not just links, and to give people the option to immediately engage or continue to a traditional search results page. In this beta release, coverage includes top trending searches, movies, TV, sports teams and players, weather, local, travel, stocks, and shopping categories now available at search.yahoo.com.

·         Trending Searches – The moment the cursor hits the search box, top search trends appear and are updated every 10 minutes to display the latest and greatest search trends.

·         Search Previews – Search Direct predicts the search term as you type, providing the 10 most likely searches. You can then easily scan each option to see the related top results and find the best match for your needs.

·         Direct Answers – For many common searches, Search Direct provides instant answers before you click the Search button. Find an address or phone number, a three-day weather forecast, financial stock performance, the top trending stories at Yahoo! News, or when and where a movie is playing – all without going to a results page.

·         Direct Results – When you scan the search options and find the site you need, Search Direct provides exactly that – direct access to the site. No more overwhelming pages of links.

·         Rich Content – For all top searches about sports, top news stories, and finance, Search Direct displays rich content that only the world’s largest digital media company can provide. For example, type “n” to get the Yahoo! News display, which always shows the top two trending stories.

Yahoo! will continue to enhance and update Search Direct with new content, such as popular music and local listings.  For more information and a demo video of Search Direct from Yahoo!, visit search.yahoo.com and our company blog, Yodel Anecdotal.

Yahoo! CEO Carol Bartz

For more insight, check out the live blogs and analyses from Business Insider and All Things D.

From Avatar to the iPad 2 – We’re in an Experience Driven Economy

You know the feeling. Being so profoundly overtaken by awe, laughter, incredulity or amazement. Experiences like these tap into the deepest and purest of human emotions, and serve as powerful motivators. We are in a new economic era; an era in which savvy businesses craft their product and service strategies with the specific and overarching goal of creating compelling consumer experiences.

Hollywood was among the first industries to recognize that even the best stories need great packaging to become the mega-hits that bring swarms of people to theaters in costumes and tents, waiting for hours to experience the story. Avatar was not a multi-billion dollar smash hit because the story was particularly exceptional or because audiences were deeply committed to the film’s message of environmentalism. The film attracted an enormous and diverse audience of moviegoers craving to immerse themselves in the engrossing experience James Cameron expertly crafted. The impressive 3D effects, captivating majesty of Pandora and exceptionally-directed audio throughout the film catapulted audiences into a foreign world, allowing them to experience the story in a way that simply was not possible even twenty years ago. James Cameron isn’t just selling movie tickets. He is selling an experience. Entertainment locations like Universal’s Harry Potter theme park and Disneyworld don’t sell roller coaster tickets and concessions. They sell an experience. Starbucks isn’t selling coffee and pastries. It is selling an experience.

Avatar Movie Wallpaper

The entertainment industry was a pioneer, but new players are encouraged by the success they’ve seen and are increasing their efforts to weave the overall consumer or experience into every decision they make.

The resurgence of Apple as a beloved consumer and cultural icon can be directly linked to its insistence on providing unique and powerfully positive experiences to its customers. One only needs to step inside an Apple retail store to understand how well this strategy has caught on. Flocks of current and would-be customers seem suspended in a perpetual state of bliss and fascination as they explore and tinker with the latest iPhones, iPads and MacBooks. Even months after a product is released, Apple stores are bustling with activity and energy. Why? Because Apple created a hands-on experience and instills a sense of ownership in its customers.

But what makes Apple such a unique and powerful example of experience-driven strategy is its array of products designed to wow the users’ senses. The touch, audio and visual interactions that characterize the company’s most successful products have taken a company that was once a quarter or two away from a low-ball acquisition and made it a beloved symbol of quality, innovation and excellence. (Author’s note: I give high praise to Apple, but I’m no ‘fanboy’ – I have happily used a PC for 15 years and will critique Apple if/when necessary.)

Apple iPad 2 Customers in Store

Facebook, Twitter, Foursquare and others are carefully crafting new and addictive user experiences that have led to astounding engagement and interaction metrics. The genuinely positive experience of interacting with your social connections and having the ability to share your own story is an experience we – as humans – crave.

From luxury car dealerships and IMAX theaters to retail stores and theme parks, business are trending toward products and services driven by a foundation of selling experiences. These experiences are powerful, and as technology advances even further, the experiences will become deeper, more interactive and more compelling. An incredible, truly wowing experience with a product or service is rare, but if businesses can deliver one, they are poised for transformative success.

NOTE: Visit www.letschatbusiness.net on your iPad for a unique, Flipboard-esque experience driven by Onswipe and WordPress.

Fighting History – Fragmentation and the Social Web

“History is a relentless master. It has no present, only the past rushing into the future. To try to hold fast is to be swept aside.” -John F. Kennedy

For nearly a century, technology has purportedly brought together the fragments of society. With universal access to common information, previously disconnected groups can unite. History has proven, however, that this initial period of universality eventually trends back toward fragmentation. Can the social Web fight history and survive the seemingly inevitable re-fragmentation?

After Dark Ages, the explosion of printing and publishing in the 15th century led to a significant spread of knowledge and the rebirth of intellectual curiosity. Knowledge was no longer exclusively based on hearsay, and people sought information from trusted academic and historical resources. Outside academic circles, media sources like newspapers and general information magazines boomed in popularity in the 18th and 19th centuries. For the first time in generations, people could discuss common events and share their opinions on similar topics. Previously fragmented societies were unified. The world’s longest running magazine, the general information-focused Saturday Evening Post, lasted 148 years. Over time, however, general interest publications died out as public interest waned, and niche publications that catered to unique, specialized interests became the only sustainable media outlets. (There are nearly 7,000 special interest magazines in publication today.)

FDR

Radio, commercialized by RCA’s David Sarnoff after World War I, removed some of the adoption barriers that characterized print media. The famous voices of Edward R. Murrow and Franklin D. Roosevelt – for the first time in history – were broadcast to millions of people at a time across the airwaves. Radio was a national phenomenon, and the medium had a powerful unifying impact on society. Millions of people shared common listening experiences and had access to the same information. For twenty years, the country was bound together by radio until a new medium came along: television. Television forced radio programming to cater to niche audiences, and the medium that once unified society fragmented it once again. (See also: How the Internet is Transforming Television.)

Mark Zuckerberg at Web 2.0

Starting to notice a pattern? The Internet is a unique medium, allowing virtually anyone, anywhere to become a source of content. More than any other medium, the Internet has created fragmented user experiences. The social Web is, of course, founded on the platform of unifying users based on their social connections to create a more personal Web experience. So can it buck the historical trend that has re-fragmented user bases in previous media?

Absolutely.

Social media is the product of constantly evolving, improving and competing technology, and is heavily integrated in a range of Web content. Social products improve user experiences by taking into account a plethora of data and using this data to provide increasingly relevant content and people to share it with. Social media has exploded in popularity over the last five years, but it is easy to argue the market is still in its relative infancy. Mobile social products like Instagram, Foursquare and Twitter are connecting people across the globe in new ways, and social media has initiated a new Web paradigm. The transformational nature of new media technologies has united societies and re-fragmented them again and again, but social media has the opportunity to transcend the biting force of history and remain a powerful connecting force for many years to come.

Twitter Microsites Offer Networks Real-Time Engagement

In a television era dominated by DVRs and Netflix, network executives are facing incessant pressure from advertising partners to increase the number of eyeballs that are watching programs in real-time. Traditional media has often been lambasted for fighting change, but the recent trend toward connected television and the ubiquitous popularity of social media has forced many media giants to embrace these technologies.

Twitter, the micro-blogging site that easily connects users across the globes with one-click follows and hashtags, has become a valuable real-time thermometer for networks to gauge viewer feedback during programs. What began as networks monitoring chatter on the main site feeds has evolved into the launch of enhanced microsites developed and powered by Twitter, and several major brands have already come on board. Visa and the NFL partnered with Twitter to launch a microsite covering the Super Bowl XLV. Women’s Wear Daily, Bobbi Brown and Bergdorfs sponsored a microsite for New York Fashion Week. HBO created a Twitter microsite for True Blood fanatics.

NYFW MicrositeThese microsites provide encompassing coverage of live events with real-time tweets, pictures and aggregated news. Brands can deliver real-time updates and become a destination for consumers to share knowledge and engage in active conversations on a particular topic with like-minded individuals. Most importantly, these microsites are a platform for branded content alongside user-generated content, integrating two incredibly powerful forces in Web 2.0 marketing. Brands can subsidize the costs of developing these sites by partnering with sponsors (i.e. “New York Fashion Week: Presented by American Express”) that obtain prime real estate alongside highly relevant content and engaged audiences.

For networks, these microsites encourage and facilitate real-time conversations that cannot occur on a comparable scale outside of the live program time slots. Networks can use these microsites to provide advertisers with more in-depth viewer metrics (i.e. 250,000 unique tweets, 50,000 hashtag mentions, etc.) that can command premium ad rates.

These microsites have significant potential beyond enhancing live, lean forward television viewing experiences. Imagine brands like Apple and conventions like CES implementing these sites for major product launches and events. It’s more important than ever to go where your customers and users are, and microsites offer networks and brands the opportunity to drive engagement and become a central online conversation destination.

Will more Twitter microsites pop up in 2011 and beyond? Would you use a microsite to tweet on your connected TV?

Going Social to Help Change Lives

The power and influence of social media communities has been witnessed through the exponential growth of headliners like Facebook and Twitter over the last 24 months. With the rest of the world migrating to online, diverse virtual communities are continuing to grow at astounding rates, creating myriad opportunities for local and international brands and businesses alike.

Social commerce is booming, and online retailers like Amazon.com are racing to leverage the power of communities to drive growth and accelerate expansion. This holiday season, you can use the power of online social communities to make meaningful and significant changes in the lives of those in need across the globe.

SoftCity utilizes an innovative two-pronged approach, including a thriving social community, known as the SoftCity Cafe, and an open e-commerce store, the SoftCity Marketplace. Users are rewarded with SoftDollars for contributing comments, writing articles, asking and responding to questions, giving feedback, and participating in SoftCity activities. These SoftDollars can be used towards the purchase of discounted software – the more SoftDollars, the bigger the discount.

SoftCity Logo

SoftCity has initiated a charitable effort, dubbed “Secret Santa”, in which users can donate their SoftDollars earned in the Cafe to a select group of distinguished charities. SoftCity has raised over one million SoftDollars in just three weeks, which will be awarded to the charities in the form of thousands of dollars of free software that can be used to improve education, teach vocational skills, and advance industrial projects.

The power of online communities can be harnessed and cultivated for financial growth and expansion, and Web 2.0 continues to validate this every day. SoftCity is proving that these same online communities can be leveraged to make meaningful changes in the lives of others through many of the same practices.

Community Service

To earn SoftDollars that can be donated to charity and join a thriving interactive community of business, technology, and creative lifestyle enthusiasts, open a free SoftCity account here. Additional SoftDollars are earned with each vote for Let’s Chat Business in the SoftCity “Battle of the Blogs 2010.”

Vote here once per day and “Like” Let’s Chat Business in the SoftCity Battle of the Blogs to be entered into a daily Amazon.com gift card giveaway and for a chance to win one of 6 Apple iPods. The contest ends December 30th, 2010, so remember to vote once per day.

Happy holidays from Let’s Chat Business!

Why Social Proof Is Your Best Friend

Have you ever wondered why sitcoms use laugh tracks? Or why bars and coffee shops put money in the tip jar before they open? Why nightclubs gladly keep long lines of customers waiting outside even though there is more than enough room inside? Each of these are a representation of social proof, the powerful force that indicates we look to others to guide our own actions. It is highly beneficial to take advantage of this psychological phenomenon to increase customer interaction, brand awareness, and product adoption.

Many of the highest-traffic websites and blogs (including Mashable, SEOmoz, and Yahoo!) use social proof to generate buzz and portray an image of a popularity and success. By displaying their feed subscriber counts, the number of users who “Like” their page on Facebook, the number of followers they have on Twitter, the number of times a post has been shared, and so on, they are presenting a very calculated image to outsiders who have not yet experienced their brand. Strong numbers in these categories say: “We’re successful, everybody wants in on what we’re offering, so you should, too.” The true value of social proof lies in the fact that the higher the numbers, the faster the numbers grow. The faster the numbers grow, the more exposure, interaction, and recognition the site receives. This phenomenon of compounding exponential growth exemplifies the importance we place on social reference and the powerful influence it has over our decision-making.

Mashable - Social Proof

The concept is playing a critical role in the implementation of social search, which Facebook is developing as a key part of their growth strategy. Today, it was announced that Facebook is including articles “Liked” by a user’s friends in search results. This is promotional gold for bloggers looking to increase their exposure and presence online. (Last week, I wrote a post about how Facebook needs to capitalize on Social Search if it wants to maximize its online dominance.)

Facebook Social Search

While some dismiss these number displays as bragging points that don’t add any value, the site administrators who recognize the importance of user validation ensure they are a prominent element of their design and strategy.

Here are some great write-ups about the power of social proof:

1) http://www.doshdosh.com/social-proof-optimization/

2) http://www.copyblogger.com/social-proof-herd-it-through-the-grapevine/