ChasNote

Stuart Elliott, the advertising and media columnist for the New York Times, makes BMW’s Graffiti contest in Facebook the topic of today’s column:

“Almost half the spending for the campaign, estimated at $15 million to $25 million, is being devoted to online media. By comparison, executives at BMW of North America say, Internet ad spending for other models ranges from 1 percent to 15 percent of the total ad budgets. The online elements of the 1-Series campaign include letting members of Facebook, the social-networking Web site, design virtual cars and send them to Facebook friends….”

“The goal has become ‘to give people a reason to engage with or participate in your advertising,’ said Patrick McKenna, manager for marketing communications at BMW of North America in Woodcliff Lake, N.J…. ‘We’re trying to let our hair down a bit and have some fun’ with the campaign, he added. That is evident in the offbeat ads being created for Facebook, which include the chance to design virtual cars.”

BMW’s Graffiti contest that invites Facebook users to color in outlines of 1-Series cars has done a few things very well.

One, ad units on Graffiti app pages within Facebook as well as websites outside of Facebook (eg, Boing Boing) are performing better because the campaign invites participation.

Two, it enlists a core group of active social-network participants (more than 9000 submissions in the first 7 days) into a fun, transparent evangelism effort: Participants spend, in many cases, hours personalizing images of BMWs that they then share with friends.

Three, it takes advantage of the friend-to-friend newsfeed mechanism at Facebook to spread word of the campaign beyond the paid media program.

Four, the concept and the images themselves are capturing the attention of bloggers, columnists and Twitterers, such as Facebook’s Dave Morin. Ben Barren’s headline captures it best: “i found a blog post about a twitter about bmw’s facebook campaign.” UPDATE 4/7: Stuart Elliott at NT Times dedicates a column to the campaign. Others pick-ups below.

I also love that BMW’s advertising in other areas of Facebook (through Facebook, not FM) integrates a single message across multiple media plans. With the Graffiti contest BMW built a killer idea that resonates especially with existing Facebook members, so why not show the Facebook audience that you’re hip to the applications they all enjoy? Here are some banners BMW ran elsewhere on Facebook:

Credits: The team that made this happen includes Brendan Starr at GSD&M; Jon Lor at DotGlu; Mark Kantor, Tim Suzman and Ted Suzman at Graffiti Wall; Jean Aw at NOTCOT; and FM’s Jen Tamez, Marcia Simmons, Liam Boylan, Matt Jessell and Lester Lee.

A small sampling of other coverage:

Auto site Top Speed:

Autoblog:

Han D Work blog:

Blog post and Twitter from Inusual Network:

Facebook’s senior platform manager Dave Morin twittered that BMW’s Graffiti contest “could be one of the most brilliant social media campaigns I’ve seen in a long time.” Thanks, Dave!

Over the weekend BMW rolled out its What Drives You? contest in Facebook’s Graffiti. Participants choose from a library of outlines of the 1-Series:

Then they color them in — more than 2700 entries so far. On Sunday, submissions were rolling in at a rate of one per minute. Here are a few faves:

And as those participants color in their entries and/or become Fans, other Facebook friends hear about it in their Newsfeeds:

Jeremiah Owyang, at his site, writes up a case study of Dell’s Facebook Graffiti Contest, part of its ReGeneration campaign. His “what could have been better” section — that conversational campaigns should be given longer life spans, and that the content they produce should be given more exposure too — is worth a full read at his site. His summary of the campaign overall:

“Unlike most marketing campaigns that deploy heavy ads, fake viral videos, or message bombardment, this campaign let go to gain more. Overall, this is a successful campaign as they turned the action over to the community, let them take charge, decide on the winners, all under the context of the regeneration campaign. The campaign moved the active community from Facebook closer to the branded Microsite, closer to the corporate website, migrating users in an opt-in manner that lead to hundreds of comments was clever. Well done.”

And MediaPost’s Social Media Insider blog says:

“There are a lot of impressive stats here: 1.1 million people voted on their favorite illustration, 7,300 people entered a submission, the contest has almost 1,300 friends, and there are currently 209 comments to the post at ReGeneration.org announcing the winners. Clearly, Dell’s ReGeneration effort supports [FM CEO John] Battelle’s contention that social media may finally make online advertising much more interesting to users than the ongoing crop of forgettable banner campaigns.”

From Adweek’s coverage of a panel at Ogilvy’s Verge conference. Outgoing Facebook chief revenue officer Owen Van Natta defended the company’s Beacon advertising concept, while Gawker’s Nick Denton slapped back:

“Gawker media publisher Nick Denton said he believes the ‘innovation’ in social media ad models is mostly a result of their failure as media properties. Even MySpace gets higher click rates than Facebook display units, he noted.”

FM’s Battelle disagreed:

“Not all ads on Facebook perform poorly, though. John Battelle, founder of Federated Media, said Facebook applications like Graffiti Wall are running ad campaigns for companies like Dell that are performing well by all metrics. ‘There’s no engagement in ad networks,’ he said. ‘We haven’t yet figured that out yet, and I think social media will.’”

Well, not entirely. If you search for “regeneration” at Google, the #1 result is a Wikipedia entry for the biological process that starfish, for example, go through when they grow back arms that were torn off. But the second entry, among nearly 18,000,000 pages identified by Google, is Dell’s site ReGeneration.org, a site (and brand concept) that was kicked off, in part, with a Graffiti drawing contest inside Facebook.

My colleague James Gross, who led the Dell-Graffiti-Contest idea from the FM side, points out on his site:

“the campaign [was] a win for not only Dell, but also the Application Developer, Graffiti. In a time when not a lot of applications are creating compelling campaigns for marketers, instead, many of them are being forced to rely on remnant inventory from ad networks.”

Ad networks are great at 100-percent fill rates with low-CPM, low-value-to-advertisers banners (the two factors are linked quite directly!), but they aren’t well positioned to conceptualize or execute campaigns that add value to a unique conversation. A 34-year-old man with a household income of $95,000 may visit Yahoo Finance to view his stocks, Boing Boing for his fix of quirky digital-cultural happenings, and stay in touch with his college friends by trading sketches using Facebook Graffiti Wall. Advertising works better — both for the advertiser and the recipient — if it understands two things. One, Mr 34-Year-Old is unlikely to be lured away from what he’s doing (click-through rates are considered great if they approach a third of one percent), so you need to bring your brand proposition into those environments. Two, Mr 34-Year-Old is a person, not a demographic; recognize the diverse moods and mindsets he passes through in the course of an hour online (each site he visits provides a guide), and cater your messaging to address that person in the context he’s chosen to join.

Eric Eldon at VentureBeat reports on Dell’s “Green” Graffiti contest, among other campaigns that illustrate marketers are finding brand-building value inside of social networks.

“[Dell] is working with ad company called Federated Media and a Facebook application that lets you draw artwork and feature it on user profiles, called Graffiti. Dell backed a contest for top drawings around its theme of environmental ‘ReGeneration,’ where contestants created visual answers to the question ‘what does green mean to you’ within the Graffiti application. The contest, which ran over two weeks in January, generated more than 1 million votes on more than 7300 Graffiti entries. Check out the top 150 here (as well as the ones pictured, above and below) — you’ll be impressed.

“This campaign was a success because Dell both promoted something people cared about and reached out to them through a medium they cared about. The Graffiti application has more than 8.6 million total members and 253,830 daily active users (as of today). Because Graffiti is a Facebook application, users also learned about the contest through Facebook’s news feeds and user profiles. Federated Media (which, in full disclosure, runs ads on sites like VentureBeat), also featured ads about the contest on sites popular with Graffiti users, including sites like Boing Boing and Make. These ads pointed users back to the Graffiti application.

“Even though this was one of the early efforts by a brand advertiser to reach social network users, Federated Media and Graffiti made money from Dell, Federated Media’s publisher, Chas Edwards, tells me…. Dell, meanwhile, accomplished what it set out to do, which was to reach hundreds of thousands of users and have them engage with its brand in a positive way. Whether Dell actually sells more computers as a result of the campaign is still open to question. This was a brand-building exercise, not a direct-response campaign, and so the idea is that Dell will be able to sell more computers in the future.”

From Business Week:

“Social networks have some of the lowest response rates on the Web, advertisers and ad placement firms say. Marketers say as few as 4 in 10,000 people who see their ads on social networking sites click on them, compared with 20 in 10,000 across the Web. Mark Seremet, president of video game publisher Green Screen, stopped advertising on MySpace last spring because of a 13-in-10,000 response rate. ‘It’s really hard to make money on that anemic click-through rate,’ says Seremet.”

Google admits they’re struggling with the same issue, and their stock got hammered on the news.

Meanwhile, advertisers who recognize that building awareness, preference and affinity with customers involves activities other than clicks alone are finding more success in social networks. Examples include Intel, Dell, Wacom and HP, to name a few.