ChasNote

From MediaPost:

“Schroeder’s blog–which has since been taken down, and as of late Friday, also was missing from Google cache–repeatedly referenced Stanley’s blog as if it had been produced by a real person, and provided links to it. She also waxed effusively and relentlessly about McDonald’s food quality and variety, as well as her quest to win this year’s contest.

Representatives for McDonald’s did not return phone calls. Kristin Zanini of JSH&A Public Relations in Oakbrook Terrace, Ill. confirmed that her agency did create the blogging strategy behind Schroeder and “Stanley Smith,” and that Smith was a fictitious creation.

Zanini asserted, however, that Schroeder personally wrote all the entries on her blog, including the one that reads: ‘Some nights, we skip cooking dinner at home just to take a trip to McDonald’s so we can play Monopoly. Thank goodness they have lots of variety on the menu to choose from.’”

At the NY Times, login required.

First some name-dropping. I mean, it’s not everyday I get invited to dinner at the house of Annenberg School Dean Geoff Cowan.

Last Thursday night, I had the pleasure and honor of attending a dinner party / salon organized by Karen North, director of the Annenberg Program on Online Communities; Geoff Cowan, dean of USC’s Annenberg School of Journalism; and Aileen Adams, a cultural affairs director at USC. You know you’re taking a risk when you call a dinner party a salon, but, my goodness, I went home convinced that this crew knows what they’re doing! Geoff and Aileen hosted the event at their house and set the topic for the evening’s discussion: teens, social networking and the state of media literacy. Jeff Berman, corporate and public affairs guru at MySpace, and Dana Boyd, PhD candidate at UC Berkeley and widely considered among the world’s leading authorities on MySpace, led the discussion. I most certainly brought down the group’s average IQ by a dozen points, all by myself.

The evening was so full of information and insights, I hardly know where to start. The rise in media literacy, though, was a topic that figured into almost every part of the conversation. Jeff Cole, a professor and researcher at Annenberg, presented data to show that media consumers are, more and more often, also media producers — blogging, participating through comments in news they read, filtering news and entertainment content in order to share it with friends and wider online communities.

Sure, publishing personal information online or building relationships online, where it’s harder to know whom you’re talking to, can lead to trouble. So can crossing the street without looking both ways. The culture of MySpace, by and large, is making young people (and the rest of us) smarter about media, information and communication — and that’s generally a good thing.

But while I’m convinced that our society is getter smarter about media, and with each mistake or instance of poor judgment that teaches us a new lesson, I’m not convinced that our society is taking the time to understand the economics of the media business. Keep in mind, News Corp owns and profits from MySpace, Google owns YouTube and Blogger and the cable and telephone companies own the pipes that give us access to the internet. We’d better get to know their motivations and business models or else we’re going to make uninformed decisions when we decide to “friend” Borat or Burger King’s King. Yeah, we all know that Burger King is paying MySpace under a sponsorship arrangement. But if we don’t have at least a passing understanding of the terms of advertising relationships, we may be trading our attention, loyalty and trust below market value.

This is particularly important as citizen-journalists decide to go pro. At the Blog Business Summit in Seattle (also last week), there was too much talk about taking your 400,000 pageviews a month, raising a financing round, and hiring a team. Which is fine, provided you have a good handle on the business side of online publishing, and your backers have realistic expectations on their return. Say you put three large, IAB-standard ad units on each page, you now have 1,200,000 ad avails (impressions to sell). If you sell two-thirds of those on a CPM basis to brand advertisers willing pay premium rates, say $10, you’re making $8000 per month, gross. You can fill the other third of the impressions with help from the ad networks, but don’t count on much more than another $800 per month ($2 effective CPM). Over 12 months, that’s $105,600, gross. Gross, meaning you haven’t yet paid yourself, your sales people and someone to collect the money you’re owed. Even without benefits, that’s less than $35,000 per staffer.

And what about sponsorships? That free money with no strings attached, no accountability and no sponsor expectation that their message will reach a pre-set number of prospective customers? It doesn’t exist. Sponsors have expectations just like advertisers. Even if the insertion order doesn’t price the deal in dollars per thousand impressions or cost per click, sponsors are doing the math just like everyone else; if the math doesn’t add up — appropriate value for their sponsorship buck — the sponsorship dollars will dry up fast.

Crunching numbers may not be the fun part of the media business, but it’s an important skill to learn. There’s no free lunch — even on the internet.

That’s the advice of RBC Capital Markets analyst David Bank (AdAge). To support this thinking, he points out (as paraphrased by AdAge): “Google Audio is making several high-profile hires in the radio sales field in major radio markets. Now why, if Google Audio’s selling of remnant ad time is so automated, would there need to be so many high-priced radio ad sales folks?”

Maybe Google is thinking that the move from automated CPC buying to selling radio ads (more akin to direct-response advertising for narrow geographies) is a smaller, more achievable leap than converting their current CPC expertise into auction-style sales for TV’s brand advertisers?

Related: I’ve heard from several web publishers that Google has been buying up inventory on their sites to hand over to Google’s video advertisers; yet the boxes on those sites continue to display traditional AdSense text-ad campaigns. Are Google’s advertisers not biting?

In late September, several marketers — including Symantec — rolled out ad units that pulled content into ad banners straight from RSS feeds of those advertisers’ corporate blogs. I just reviewed click-through data for Symantec’s first twenty days, and the early data suggest that RSS-powered deliver better performance, both in terms of click-through rates and engagement.

Normal ads (whether they’re video ads on TV, banner ads on the web or billboards along the freeway) experience “creative fatigue” over time. Creative fatigue means, in essence, our eyes get bored with the same creative after we’ve seen it too often, and we stop noticing it altogether. If you plot the performance of a single creative execution over time, with time passing left to right along the x-axis, it’s a sad, downward slope almost every time (blue line below). This is why advertisers “refresh” their creative frequently.

The data chart plotting Symantec’s RSS ad over the past three weeks looks like a roller coaster (red line below). On October 9, for example, news that hackers posted fake information on the Google blog by way of the Host Overflow Application eXception sparked major interest among readers at Digg and Techdirt. This post — the headline of which became the “ad copy” for Symantec’s banner ad for about a day — drove click-through rates about three times the rates on the ad in the first two days of the campaign. No other graphical elements on the ad unit changed.

What this means: Despite the fact that Symantec’s ad was clearly marked as a Symantec sponsorship unit, and despite the fact that it ran in areas of both sites that are reserved for advertising, readers didn’t let their eyes experience the “fatigue” that makes them blind to ads over time. They viewed it as a content feature, albeit content from a paid sponsor, but content that was worth perusing. If I’m wrong, how else to explain that 300% more readers interacted with the ad, all of a sudden, two weeks into the campaign?

And this doesn’t just mean that RSS-powered ads (or content-rich ads in general) drive better click-through rates; it also means they are doing more work building brand awareness. Readers are paying attention to the Symantec ad every day, otherwise they wouldn’t behave differently on a big news day versus all the other days.