Think Multicultural

When I lived in Alaska, the popular wisdom was that in the Gold Rush almost nobody got rich mining for gold, but that people did get rich selling shovels to the miners who were headed into the hills to go prospecting. Similarly, after the oil boom in the 1970’s, the richest man in the state didn’t own oil wells, he owned… grocery stores.

What does any of this have to do with advertising? This week, Forrester Research released its “Global Enterprise Web 2.0 Market Forecast: 2007 to 2013.” The report concluded that over half of businesses surveyed by Forrester have Web 2.0 (social networking, mashups, and RSS) on the agenda for 2008.

BizReport concludes that this result means that “The report adds weight to the frequent assertion that Web 2.0 isn’t just a passing fad and is indeed a long term strategy that marketers need to consider.” A hundred entrepreneurs are going to conclude that it means that the world needs more social networks. Several more Hispanic social networking sites will spring up.

On closer examination, that’s not what it means at all. Chances are that the companies surveyed (including BEA Systems, IBM, and Microsoft) did not respond that they are going to set up widgets on Facebook and homepages on MySpace like some Second Life pretender showing up two years late to the party. It’s a lot more likely that these businesses said that they will incorporate mashups and RSS feeds into their corporate collaboration tools, and possibly create an internal corporate social network among employees, vendors, and customers to facilitate interaction.

Those who are going to benefit from these trends are not the people who rush out and set up another new niche social network. Rather, it’s going to be the people selling shovels to the people rushing into the hills to find the next Facebook gold. Marc Andreeson is a really, really smart guy. He’s sold two Internet companies for over a billion dollars each. His newest company is Ning, which provides the infrastructure for people who want to launch a social network. They have enabled the creation of 230,000 (that’s right) social networks and are adding over 1,000 a day.

The point is that although Web 2.0 tools are interesting and likely the future of the Internet, the Forrester report is not evidence that marketers need to rush into using Web 2.0. The Forrester report is evidence that there is a lot of money to be made in the Web 2.0 tools that will be used by all those online prospectors looking for gold.

Here at TM, we preach the gospel of new media almost every day. However, as marketers and advertisers, as we embrace new media we also need to be cautious of differentiating between what’s new and compelling and what’s hype. As press releases come out announcing new research reports, take a closer look at what they actually say, rather than what someone thought would make the best headline.

The backlash against Facebook has started. That’s not really shocking news. Everything that gets as much hype as Facebook has recently must have a backlash. It’s some kind of psychology rule that I would probably know if I had ever taken psychology. But I didn’t.

When I talk about a backlash against Facebook, I’m not talking about the “digerati” in Silicon Valley and New York, led by TechCrunch, who get all worked up about the latest thing and then ditch it in fifteen minutes. They’re just a parody of themselves. The first shot in the Facebook backlash that I can take seriously came from a thirtysomething mom in Orange County.

Mayrav Saar is a brilliantly funny columnist for the Orange County Register. My friends and I read her column religiously (I subscribe via rss feed) even though we don’t live anywhere near Orange County and couldn’t have less in common with her target audience there.

Mayrav’s column this week is about how she’s over Facebook. In her opinion, it’s not really fun and it’s not really useful – it’s just some creepy utility that annoys you while trying to collect every last piece of information about you.

Or, I might add, allows college students to waste time, which is what it was originally designed for anyway.

Don’t get me wrong, I’m not declaring Facebook dead. Far from it. They’re about to close a VC funding valuing the company at about 10 kajillion dollars and Google is scrambling to ward off whatever “threat” that Facebook poses. I’m just saying that maybe Facebook isn’t really cool anymore. Maybe all those comparisons to GeoCities aren’t so outlandish after all.

What does this have to do with multicultural marketing and advertising? As marketers, we are always trying to get to where the customers are and to associate our brand with their positive feelings for the newest and coolest. In today’s online world, where clients demand the newest and freshest ideas and then only spend money on the tried and true, Facebook, like SecondLife before it, may be shaping up to be neither tried and true nor fresh and cool. Online advertising is a treacherous world where the crystal ball is very, very murky.

Facebook could be the next GeoCities or it could be the next Google. Tread carefully.

I just read an interesting, and refreshingly critical Wired piece on how much money major brands are wasting on Second Life initiatives.

How Madison Avenue Is Wasting Millions on a Deserted Second Life

It is interesting because it follows Coca-Cola’s decision to invest in a Second Life “island” called the Virtual Thirst Pavillion, and shows how little return on investment it is generating. This is refreshng because all that anyone in our business talks about these days is how Second Life is the next big thing - how Virtual Worlds will revolutionize the advertising world much like mySpace and YouTube have over the last few years (I would actually question this assertion as well). In fact, the article shows how little activity and “traffic”, in Web analytics terms, Second Life gets. Yet major brands are pouring millions into Second Life programs.

The article got me thinking about how crazy this is in relation to most marketers hesitancy to invest appropriately in multicultural marketing, whether traditional or online, targeting Hispanics, African-Americans, Asians-Americans, and/or GLBT.

To put it in perspective, the article mentioned that some brands are spending upwards of $500,000 a year on building and managing Second Life programs that are reaching maybe 100,000 people in the U.S. In stark contrast, the most recent 2007 AdAge Hispanic Fact Pack shows that the #8 Hispanic Web site in terms of revenue, Terra Networks, only generated $852,000 in ad revenue in 2006, even though it had 1.3 million unique visitors per month and 38% reach among the 14-16 million online U.S. Hispanics.

If I was Coke, I might consider building a virtual “Mundo Coca-Cola” on Terra.com…