Young and Free, power of social media

Young and Free, this young people's social network Web site launched first in Alberta in June 2007, has jump started 2,600 new checking accounts and $3.4 million in new deposits for Servus Credit Union, a cooperative financial services company that offers most services like a bank.

More encouraging data: an additional $17 million was lent to new account members, and $1.4 million is generating 15% yield from mutual fund. That is, using the Servus's 3-year bank loan rate 4.15%, there is an interest income of $705,500 and return from mutual funds of $210,000. The cost to run the Web site, including operating expenses and fees to the marketing company, is $630,000 for the last 19 months.

Return on investment: 45%.

Wonder why?

Imagine if all your friends have a pair of Nike sneakers, would you want a pair too? Very likely. This is what Young and Free does to its members. It takes an image of a social network, filled with fun activities. Members create blogs, share videos and exchange new ideas. Some members say: Young and Free is everything I want.

Once the members are there creating content and actively take part in the Web site, they are ready for a leader. This is where the spokesperson comes in. In each Young and Free Web site, respectively in Alberta, Texas and South Carolina, a month-long campaign started to search for an annual spokesperson, who is "the voice of Young and Free 2009." The winner is an overnight celebrity, a community star that every members like and trust.

His/Her job is to create five blogs a week to entertain the members. The content subtly incorporate the concept of Credit Union. What is it? How does it work? Why is it better than a bank? His/Her benefit is $36,000 annual pay, a free Mac Book, a HD video camera and a car with Young and Free logo.

Now the "peer power" comes into play. People want to hear advice from friends, especially the ones that they like and trust. The more members sign up to the Credit Union's checking account, the more people want to sign up.

The last but the key thing about Young and Free is, quoting its inventor, president of Currency Marketing, Tim McAlpine: "Everybody is talking about creating conversations online. When it comes to sell products, it is taboo. We have the product right in the Web site. I am selling the product, but very subtly."

Direct to the point, sell the product! And there they go, an old-school Credit Union is the new black. The name relates to youth, to fun, and to hip.

Only the members of Young and Free should be aware: The name of the Web site should really be Young and Not-Free.

2009 Pulitzer Prizes Winners

2009 Pulitzer Prizes Winners were announced yesterday. These are the journalists who still give us "glimmers of hope" for the future of journalism.

Public Service
Alexandra Berzon, Las Vegas Sun: Construction Deaths

Breaking News Reporting
New York Times Staff: Eliot Spitzer's Resignation

Investigative Reporting
David Barstow of The New York Times: Behind TV Analysts, Pentagon's Hidden Hands

Explanatory Reporting
Bettina Boxall and Julie Cart of Los Angeles Times: As Wildfires get wilder, the costs of fighting them are untamed

Local Reporting
Detroit Free Press Staff: Kwame Kilpatrick: A mayor in crisis

National Reporting
Staff of St. Petersburg Times: the coverage of 2008 election

International Reporting
Staff of The New York Times: Special coverage: Pakistan and Afganistan

Feature Writing
Lane DeGregory of St. Petersburg Times: The girl in the window

Commentary
Eugene Robinson of The Washington Post: Eugene's winning columns

Criticism
Holland Cotter of The New York Times

Editorial Writing
Mark Mahoney of The Post-Star, Glens Falls, NY
Editorial Cartooning
Steve Breen of The San Diego Union-Tribune

Breaking News Photography
Patrick Farrell of The Miami Herald

Feature Photography
Damon Winter of The New York Times (photo above is one of the winning photos)

Online Advertising: We Have The Basics Ready

The idea is brilliant: If the ads start to increase revenue, advertisers will be willing to pay more. Haven't advertising agencies figured that out years ago?

Maybe they did offline, but not online, yet. The frustrating thing for advertising agencies are: The market is there and it's huge. Twenty billion dollars are ready to be spent in online advertisement as of last year and over one billion Internet users (potential buyers) are there hanging out on social networks. But the creative advertising agents are stuck. They can see the cake is there, fresh and tempting, but they just don't have the "silver bullet" to break the glass and get it. But some people said they might have figured it out. It's called Behavioral Targeting.

“We don’t guess, we figure you out and know what you want and how much you want to pay,” said Sheldon Gilbert, 33, CEO and founder of Proclivity, a data tracking system that provides the clients with their customers' shopping interests, purchasing likelihoods and level of expenditure.

Behavioral targeting not only records the purchase information, it also traces every step of someone’s online activity. “The massive change is to track micro behavior, such as the blogs you read and the community Web sites you browse. We collect the data, and based on your behavior, we analyze you and know what you want before you actually make the purchase.”

“It’s the whole new level of targeting that makes Behavioral Targeting a potentially successful online business model,” Lars Perners, professor in consumer psychology at University of Southern California, L.A., said.

Gilbert said clients of Proclivity systems have seen an average of 26 percent increase in their revenue and 100 per cent increase in click rates. Datran Media said in its internal survey that its clients’ ads click rates doubled or tripled after adopting behavioral targeting.

Let's see how it works among three players in the game: technology providers, advertisers who have the money and Web sites who have the platform.

Technology providers like Proclivity make money through subscription. Advertiser's revenue increases given the data provided by Proclivity and Datran Media are credible. The Web sites are the losers. It seems like we have sugar, flour and butter to make a cake. Now we need is a good chef, someone who could put all the ingredients together and bake it at the right temperature for a right amount of time.

Kenneth Wilber, professor in online marketing of University of Southern California, said “it might be harder to build database as big as Facebook or Yahoo than people think,” Wilber said. He agrees Behavioral Targeting has a clear proposition. But it is a very young technology and advertisers have a long way to go before using it on a regular basis. “If I were an ad network, I won’t be thinking about how to increase my revenue now. I would think how to merge with social networks,” Wilber said.

If the model is moving towards success, we should expect to see a lot of merges in the sector soon. Technology companies merge with social networks to combine their massive database; technology companies should also think of themselves more than technology providers but ads networks, who are brokers who put ads on most of the Web sites.

“I think behavioral targeting will become a successful business model but it will take three to five years to really take off, longer than most people think,” Wilber said.

The science part is done. Now it's art to make it work.

Who Are Those People Familiar With The Matter

Since when have newspapers started citing unnamed sources over and again --- according to people "familiar with the matter"? Does that bother you? It bothers me.

LA Times reported earlier this month that "a person familiar with the matter says IBM intends to pay $9 to $10 a share" to acquire Sun Microsystem; February's Washington Post started its story on SEC's investigation into Stanford as "a range of federal agencies... have been investigating allegations of fraud and possibly other illegal activity at R. Allen Stanford's companies for at least two years, according to people familiar with the matter;" Today's Wall Street Journal front page story brought the whole matter to a new level:

"More than three months into a medical leave from Apple Inc., Chief Executive Steve Jobs remains closely involved in key aspects of running the company, say people familiar with the matter. Chief Operating Officer Tim Cook runs the day-to-day operations at Apple, these people say. But Mr. Jobs has continued to work on the company's most important strategies and products from home, they say. He regularly reviews products and product plans, and was particularly involved in the user interface of the new iPhone operating system that Apple unveiled last month, these people say."

Who are "these people"? Why should readers believe in THEM? Speaking from experience, I admitted that sources ask to be anonymous, or on-the-background, for sensitive topics. But abuse of such leeway can lead to lazy reporting and incredible stories.

John Paczkowski's Daily Digital blog mentioned a New York Post story last year that got facts dead wrong by citing people who claimed to be familiar with the matter:

" The reason Microsoft hasn’t announced the slate of dissident directors it plans to nominate to Yahoo’s board isn’t that it’s already too deep in negotiations with Yahoo to bother–it’s that it can’t find any dissident directors to nominate. This according to “sources close to the situation” who tell the New York Post that Microsoft hasn’t managed to line up a single candidate for Yahoo’s board. Not a one.

Huh. That said, there is one little caveat.

Other sources–“sources familiar with the matter”–tell the Post that Microsoft does in fact have a slate of 10 board candidates and two alternates locked and loaded and will pull the trigger on nominating them if it must.

Holy Shiite … what a story. Incidentally, sources with knowledge of both “the matter” and “the situation” tell us that the Post has got this one dead wrong–the first part of it, anyway."

So it is unsettling to see increasing number of reporters from major publications, especially business and Wall Street coverage, are citing such anonymous sources. It is particularly alarming in a time when blogs and online news sites are eating up traditional newspapers. Credibility is one of the few things that newspapers still hold onto in the battle against uncensored online content. If newspapers give up its credibility, they give up the battle.

Social Media Coordinator Wanted

Newsday.com is hiring, thanks to social networks that have been taking the blame to be killing newspapers like News Day.

This might be the most ironic but encouraging news today: Newsday.com has an opening for Social media coordinator. The job description, a first of its kind, I believe is to get Newsday.com viral using Fark, Digg, Facebook and other social networking sites.

Smart move. Newspapers have finally figured it out: The secret is not to alienate the Internet, but to work with them, or, even better, to take advantage. Newspapers need to think in a win-win scenario. Social networks are good tools for marketing newspapers, in Newsday's case, even created media jobs. In return, successful newspapers might be financial sources for the online sites. Work together, we might find out a new business model. Didn't they say: Prosper together and die alone?

Twitter Traffic Explodes by an Annual 1382%

Do you know over 60% of the 7 million unique Tweeters are, surprisingly, not teens who gossip about school and prom dates, but adults between 35-65 years old?

Well, this recent demographic shift has caused an explosion in Twitter's traffic, a staggering increase of 1382% from 475 thousand just a year ago. See chart on the left.

Not only its traffic soared, Twitter has also been in the spotlight.

Computer World said "Twitter traffic skyrocketed thanks to middle-age tweeters," USA today exclaimed Twitter's surging traffic is deafening. BlogPulse, an online traffic metric site, followed up with a chart to show that in March 2009, the number of blog posts about Twitter has taken up 1.2% of the total blogsphere.

In a time where everything is pointing downwards, the uptick is definitely a confidence booster for the founders of Twitter as well as anyone else dying for good news.

So here comes the ultimate test: Now Twitter has made it in expanding its user value, we can't wait to see whether user value would eventually translate into greenback.