Just as the Beacon fire has died down, Wired has re-ignited the spark on Facebook’s Social Ads feature.

The controversy is grounded in two critical issues. The first is whether users fully understand the implications of becoming a “Fan” or downloading a brand’s application. It seems pretty clear that users aren’t aware that committing these actions essentially authorizes brands to use their likeness and corresponding inferred endorsement in Social Ads for the brand. As a board member of the Word of Mouth Marketing Association I believe strongly in the necessity for proper disclosure of marketing initiatives. I’d like to see facebook proactively engage in an campaign to educate its users each time it initiates sweeping changes like Beacon and Social Ads. With proper education and disclosure, the second issue still shines like a Beacon…what’s in it for the user?

One post in the Wired article correctly points out that some/many users might just like getting their face featured in ads from brands they like. Which led me to the question I pose to readers: “Are Social Ads the new Swoosh?” There was a time that in order to prove I associated myself with all the coolness that is Nike, I had to go buy something with a big, red swoosh. Branding myself with this logo put me in the club in the same way driving a BMW makes me part of that culture. So for today’s facebook users, the bar is set lower than pulling out one’s wallet to join the fan club of a brand, is that so wrong? I argue it is not, so long as the user knows exactly what they’re getting into by clicking the “become a fan” button or “add this application” tab.

In fact, I think this is the perfect representation of the new social equation forming between customers and brands. People are now demanding Return on Engagement and progressive brands are getting out in front of that. There’s a reason why Burger King acquired one million friends on Myspace. They leverage their media buy with Fox and offered free viewing of 24 on their sponsored profile to “friends.” It’s no different than VW offering a free iPod for everyone who bought a New Beetle a few years ago (a promotion I helped orchestrate), except there is no purchase requirement. The only requirement is opening up a communication channel with the brand. So what are a million friends worth to a brand? Quite a bit I would contend.

The net/net is that brands need to stop thinking about one tactic (like social ads) within specific social networking sites, and start thinking about a comprehensive social networking strategy that starts with asking some hard questions. Does our brand have “swoosh” value (social currency) to our customers. Are our customers eager to brand themselves as “friends” or “fans?” If the answer is “no” to either of these, what value can we bring to the equation that might tip the scales? How can we recruit and maintain a robust fan/friend network? How do we apply the logic of CRM to FRM (fan relationship management)? Tough questions all, but if you believe as I do that Networking is the new Marketing, then they must be answered.

We’re not in Niketown anymore.

As predicted, a small group of privacy advocates have created a Petition, demanding Facebook reconsider the privacy controls and protocols related to their Beacon application.

With just over 500 members signing the petition thus far, it seems as though this movement won’t catch fire the way the the mini-feed news did last year. You’ll recall the companies quick response to community privacy concerns, with Zuckerberg’s opening line in a blog post “we really messed this one up.”

We’ll keep tracking this group and other flare-ups with the community. On the whole however, it seems most Facebookers are OK with sharing their purchase decisions with friends. Stay tuned.

The convergence of Social Networking and WOM is finally upon us. It did indeed take the forethought of Mr. Zuckerberg to shed light on this inflection point. But make no mistake, the 450 marketers gathered here in Vegas are waking this morning to a new era, a new paradigm and a new understanding that social media is where it is at. Brands are poised and enabled to enter the conversation like never before. A breakfast this morning was dedicated to the art and science of Influencer marketing. I’m not a big fan of the “influencer” label- but the discipline of firing up your “brand lovers” is core to my vision for Brand Networks. I’m bullish that this is the future of marketing (or I probably wouldn’t have quit my job to pursue it), my only question is whether that future is now.

I might even classify the tone of the first speakers Ed Keller (keller-fay) and Peter Waldheim (womma) as revolutionary. Traditional advertising was served notice. Coming from that business, I curiously await the advertising industry’s response to the gauntlet laid down here today and by the champions of social media in the blogosphere and traditional media.

The game is on (or so the head of marketing for Microsofts Halo 3 has pronounced). I’ll post interesting tidbits throughout the next two days here from the front-lines of the revolution.

Beacon shines the light on your purchases

Beacon is to online shopping as a branded bag is to mall shopping, only better. Not only does Beacon allow people to shout “I bought something at the Gap,” it broadcasts their specific purchase to friends and directs them to the retailer’s door to follow suit. There’s a saying in teen marketing circles that defines the conflict between individualism and the need to fit in: “I’m an individual, just like everyone else.” For a certain personality/ consumer type, this unadulterated celebration of consumerism will be adopted, revered and evangelized.

Conversely, groups are surely being formed right now in Facebook to lobby against Beacon. Facebook purists will revolt against this level of commercialism in their community. A percentage of Facebook users will adjust their settings to avoid this feature. There will be backlash, like there was against mini-feed, on the grounds of privacy. A smaller percentage still will leave Facebook in protest, seeking the next “pure” social networking experience. I predict that like the battle over mini-feed, the uproar will silence over the coming weeks, and the two camps will adjust to the bright light of Beacon shining on our purchase decisions.
From a marketer perspective, adopting Beacon needs to be weighed carefully. A prompt at checkout to broadcast a purchase on Facebook is a big deal. For brands with a customer demographic wider than the Facebook sweet spot, this has the potential of being a disconnect at best, a nuisance at worst. It is like asking all you customers to present their college ID at check out. For pure play youth/teen marketers it is a no-brainer. But if I’m Travelocity, catering to the Alaska cruise crowd as much as the Spring Break set, doesn’t facebook have more to gain than the brand?
Lastly, what’s in it for the user beyond the inherent surge of pride in broadcasting you have bought the latest Puma’s at Zappos? If engagement with a brand is a dial, this action is moving towards eleven.

Ads Just Got Smarter and More Personal

This is the least interesting part of the announcement for me. Ho hum, a new ad format with better targeting. What makes this move provocative is that brands now have the permission to use my photo and inferred endorsement to sell my friends the same product or service I just bought. There are so many potential issues here, not the least of which, it is creepy. A landslide of users will oppose being used as a shill for a brand in which they have a passive interest. Sure I get it for an iPhone purchase, but do I want friends to know I just bought new Haynes undies at the Sears?
Again, the value proposition is skewed to the advertiser. Where’s the value for the user. Where’s the “thank you” for selling out for this product? Where’s the effort to locate true advocates vs. any indifferent shopper. There are plenty of companies to which I’ll lend my credibility, if recognized accordingly. Little something for the effort…?

“Sponsored Groups” are Liberated. Free at last!

Today is one of the few days I’m happy not being a facebook sales-guy. Having to explain to clients that their $300,000 “sponsored group” is now obsolete will not be fun. And oh, by the way, other brands, bands, and politicians can create something called a “Page” with oddly similar functionality for free. As someone who has been railing for a year now that these “Sponsored Groups” and “Sponsored Profiles” should be free, it’s a very satisfying day. What marketer in their right mind would build a “community” on a platform that goes dark when the very expensive media meter hits zero? This is a fabulous move for everyone. Brands will build these beachheads and test the waters. Most will realize they’re not as popular as they’d hoped, and will need to plug the media meter to drive traffic and find “fans.” Win, win.

Without saying so, Facebook is admitting that these “Sponsored Groups” were overpriced and under-delivered for most of their advertisers that are not Apple or Victoria’s Secret. They are not alone, Myspace needs visit the same confessional and purge itself of the sin of selling “added value” masked as community.

Speaking of Myspace, doesn’t this move make Facebook considerably more Myspacey. The rush is on for everyone to create a page in Facebook. Location alone will not ensure traffic, and it certainly will not magically create brand “fans.”

What’s a marketer to do?

For all those marketers not ready to dump huge sums of advertising dollars into an advertising adverse community, choosing an approach has been daunting. Many recognized the promise of applications and before they had the chance to fully engage it has become clear that applications are just one powerful tactic of a comprehensive strategy now required to enter the social networking game. If Google’s “Open Social” announcement taught us anything, it is that we need to think broader than building just a Facebook strategy. We also need to be nimble enough to take full advantage when the game changes again. And it will.

The common denominator here is enabling your “fans,” evangelists, and/or brand lovers, to do some heavy lifting for you. Some of us who have toiled in the Word of Mouth Marketing industry have been helping brands “enter the conversation” for quite some time, so we thank Mr. Zuckerberg for shining a Beacon on the strategy. WOMMA’s conference next week just became an even hotter ticket.

Online or offline, referral from trusted friends builds business and sales. So welcome to the next 100 years indeed, because that fundamental truth will not change.

Another common thread is the need to establish a “return on engagement” strategy. It is poor form to treat your best customers like pack mules for your messages without recognizing and rewarding the effort with a carrot or two. The single most powerful question in human decision making has to be: “What’s in it for me?” Brands that get that get this equation right will succeed in attracting and growing their own “brand networks” and social networks will simply become social utility again, just as founders of Friendster, Myspace and Facebook all intended in the first place.