Like a lot of folks, I’ve been intrigued by the marketing possibilities present in Second Life. I’ve been fascinated by all the people making over $5,000 a month in real money (132 at last count) and by the companies holding press conferences within it. Like 4,000,000 other people, I downloaded the software, created my avatar and spent hours figuring out how to walk around, talk to others, teleport, etc. And it is kinda, sorta fun.

On the flip side, there was the time I went to a heavily advertised in-world club. And danced. Alone. It was creepy, bizarre and virtually lonely.

That hasn’t stopped Coke, the NBA, Wired, CNET, Adidas, Coldwell Banker, Sears and others to open up shop, often investing as much as $500,000 per year to do so. Wired now has an excellent article outlining how much of that money may be wasted.

Some amazing facts from that article that explain why I was so lonely in that dance club:

• While SecondLife talks about 8 million users, the actual number of Americans actually using the site on a given week is only about 100,000.
• 85 percent of the avatars created have been abandoned.
• On a random day in June, “Sexy Beach” had 133,000 visitors. IBM’s huge innovation island, on the other hand, got 281 visitors. Coke’s highly praised Thirst Pavilion got 27 visitors.

It turns out that Linden Labs servers can only handle about 70 visitors to a given place at a time. 70. Which explains why the don’t do some obvious things they could otherwise do to encourage density.

Don’t get me wrong, I’m not against experimenting in social media. It’s what this company is all about, and too few companies are doing that right now, not too many. And $500,000 out of Coke’s ad budget isn’t going to cripple anyone.

But other social media advocates, including Joseph Jaffe (who I don’t know but who I respect), are pushing Second Life in the article with quotes like, “So when people ask, ‘Why Second Life?’ I ask, ‘Why not?’”

Why not? Because social media for business and brand building is not about setting up shop on some poorly traveled virtual world with a ridiculously high CPM. It’s about conversations. It’s about having conversations with your target audience. It’s about participating in your target’s conversations. It’s about listening in a way that helps you understand your audiences better.

The big ad agencies still don’t get it. Banner ads on Facebook are still just banner ads. They’re not social media, any more than a 30-second spot during a break on Survivor is reality TV.

Why not spend $500,000 on a Second Life presence, to answer Jaffe’s question? Because no company can do it all, and for most companies, 1/10th of that investment in a sound social media marketing plan, followed with the development of a sound multi-pronged social media strategy will pay far bigger dividends and have far better ROI. That planning may lead you to a Second Life experiment, but it may also lead you to some more interesting, more productive places.

Because when we get too excited about technology and start investing millions without considering the return, well, it makes me think of 2001. I’m sure smart people work on all of those brands I mentioned, just like smart people invested millions in the dot com bubble.

Smart marketers experiment, sure. But smart marketers set a strategy first, and put their toes in the water (or dive in) in ways most likely to generate returns. They also analyze returns. Reading those SecondLife stats this month makes me wonder, “Has Second Life Peaked?” Cost per acre is down from the prior month. The number of people making over $5,000 a month is down for the last two months… Smart marketers are watching those numbers, too.

When we saw how most ad agencies, PR firms and SEO firms were thinking about and reacting to social media… Well, that led us to form Ignite in the first place. Social media, new media, virtual worlds. If you’re in the marketing business, it’s still about business—at least, it is in this life…

~Jim Tobin Ignite Social Media

(Notice how there are fewer than 70 people listening to this artist play live? How much did Coke pay to reach those people? Too much, I’m sure, even if you count the 1,200 others who have watched this video…)

One of the most compelling features I wrote about yesterday for Sezwho was the site’s ability to provide a user reputation – with a critical part of this score being a user’s interaction.

This brings up an important point – that interaction and participation in social media is a vital part of Social Media Optimization. Yes, to give is (almost) better than to receive in your quest gain readership and interaction.

Why?

1. Participation builds readership. How? The more that you participate the more visible you are in the community. Every comment you make on a blog that relates to your area of expertise or topic can become another chance to reach new and interested audiences. Avoid spamming, but don’t be afraid to use this as an opportunity to link back to your own blog if it relates.

2. Participation connects you with experts. Participation allows you the opportunity to interact with experts. Find blogs or writers that relate to your subject area. Reaching out to these experts can grow your knowledge base, and potentially allow you to add meaningful content and credibility to your blog.

3. Participation guides your efforts. There is no other way to learn social media and know your audience better than being emerged in it. By becoming a consumer of it, you can understand what others are doing, what works and what doesn’t work, and use this information to redirect your social media efforts.

Finally, I’d like to add that interaction is synonymous with what social media is. Because of this, it should naturally be an element of every social media effort.

I came across an article from CMS Wire that has shed light on a newly emerging social network community (still in beta) that I thought I’d share.

In case you are thinking, “Not another social networking site”, I urge you to bear with me. In my humble opinion, the site “Sezwho” has a unique characteristic that I’ve yet to see from other sites: social network integration.

To put it shortly, the site allows users to build a comprehensive online reputation from the multiple social networks users are involved in. According to the article, Sezwho will calculate a user’s reputation score by analyzing a user’s contributor statistics, frequency of participation, time of interaction, existing reputation scores for bothrater and commenter, participation consistency, and even discussion topic.

The site uses this form of “reputation rating” in order to promote ethical and active participation of users across the multiple social networks they are involved in. This rating system then allows users of Sezwho to find and interact with members with equally high reputations.

Great news for genuine social media users, bad news for spammers. I’m curious to see if it will attract a following. Seems it is more targeted to the social media savvy than the first time user.

Last night’s presidential debate on CNN, featuring questions from You Tube users is all the talk this morning. Everybody is forming their opinion – determining if this milestone in social media and politics was successful, or discussing their favorite questions (see mine below)

But whether or not you feel it was a major milestone, or an entertaining evening, you can’t deny the success this event will have on building the You Tube brand.This breakthrough is epic for You Tube. Not only did it expose traditional media consumers in America to social marketing, but it branded the “You Tube video”. Users completely unfamiliar to You Tube are now using it to describe video-sharing.What will eventually happen to You Tube is similar to what happened to Kleenex and Q-Tip. While there are many equally advanced, if not higher quality video sharing applications out there such as Bliptv or Break, the power of You Tube brand will prevail. Why? Because new users to social media will seek the familiarity of it’s brand.

What’s equally powerful is that this has established You Tube as household name. As new users join, they will become brand advocates by sharing with friends and family, further establishing and maintaining You Tube as the top video-sharing website.

Ingenious move by You Tube. If you don’t agree – go broadcast yourself. Or just share a comment.

Yet again another social media term has been created by a company titled, Pageflakes.The term? PageCasts. The definition? A personalized page anyone can create at “Pageflakes” by using widgets for news, RSS feeds, blogs, photos, video, podcasts and more”

While customizing pages with widgets is not a new concept - Pageflakes has both termed PageCasts and created a user community to share customized templates with content based around a topic or genre. While anyone can create a customized PageCast, the company is now marketing to major media brands as another way to reach their consumers.

By partnering with Pageflakes, these companies can combine video, music, photos, and news in a branded PageCast, that is then shared and adopted by specific audiences. Currently, CBS is using Pageflakes to create personalized pages to promote television programs such as Entertainment Tonight and The Insider. Entertainment Tonight fans can download a PageCast equipped with RSS feeds for You Tube, related photos, and the latest hollywood news.

This is a prime example of how social media can work to build a brand. Want users to interact with your brand? Provide relevant and highly customized content. Users will take it and run with it.

Ever dreamt of becoming Diddy’s personal assistant? Well surprisingly – some people do. And they are coming out of the woodwork since Diddy himself has posted his You Tube video, welcoming any and all applicants to apply.

Interested applicants are encouraged to plead their case in a 3 minute or less video (Diddy likes to keep it short), and then post it to You Tube with the tag “Diddy Assistant”. So far, applicants will do just about anything to get noticed – anything from pouring out life ambitions, showcasing homemade clothing, and our personal favorite: lifting weights.Here in the office we’ve had our share of laughs about this – especially since we are currently looking for a social media specialist and half-jokingly thought of posting on You Tube. However, those posts made us a little skeptical of what we might receive. So instead, enjoy the humor of the Diddy videos. And if working for a social media agency is your dream job, we are opening the floor for you to astound us with your qualifications, be they day job-based or on the side.

AT&T is rolling out their U-verse product in select markets. The product allows people to get television over the Internet (along with high speed service). Now the potential for that is interesting, although as cable companies such as Time Warner Cable and Comcast have improved their service offerings and their service over the years, the argument for change is not a clear one.

To promote U-verse in Norwalk, CT, AT&T has a campaign under which they supposedly award free U-verse for a year to go named, conveniently enough, Bobby Choice. Get it, you have a choice. Uh yeah… They’ve put a bunch of videos on YouTube. Here’s one.

Ok, so did that nauseate anyone else? We discovered it here in the office off of YouTube, and we immediately agreed that it was fake and cheesy. So why pretend that it’s real? To AT&T’s credit, they’ve admitted in the media that it’s a campaign. But why pretend he’s “won” this service? It deflates it, it minimizes it. He could’ve been just a funny spokesperson.Ironically, in some ways it’s better more in-depth information than is on the rest of the U-verse website, but the whole “faux social media” attempt just feels like another Wal-mart like mistake by a big company trying to understand the new rules of marketing.

Yesterday, Lisa posted on the 3 baby steps to Social Media Optimization, including step 2, “Setting SMO goals”. Expounding on that thought, I found a good article by MarketingSherpa.com that noted that, while success on the web is typically measured by page views and click-throughs, it is equally (if not more) important to measure a site’s “Web Events”.

Web Events are interactions users have with features of Web 2.0. Interactions can be anything from comments made on a blog post, RSS Feed subscriptions, video views, image/file downloads, or wiki updates.

As you set your SMO goals – analyze the Web 2.0 features currently on your site and categorize the outcomes that are of most importance to you. What interactions could drive a ROI or generate positive results for your company? Would a video interaction yield a better outcome for you than a user posting a comment?

Ask yourself these questions and then set out to measure each through your analytics. Ultimately by establishing and measuring these Web Event goals you can really know the effect social media tools have on your website and even on your business. And perhaps more importantly, you can engineer more relevant content to your readers.

If you want to optimize your website, one of your first considerations should be “Social Media Optimization”, or SMO. Similar to Search Engine Optimization, SMO employs social media tactics to drive more users to your website, provides more ways for users to link to your site, increases user interaction, and overall allows your site to appear higher ranked in web searches.

Spend a few minutes researching SMO, and you will realize there are countless methods to optimize. Rohit Bhargava first termed SMO and created the 5 rules of Social Media Optimization. Since this post, readers commented and added to these rules bumping them to nearly 17 rules of SMO.

With numerous tips and suggestions out there it is natural to feel a bit overwhelmed. Where do you begin?

As the psychologist in the movie What About Bob said, “Relax…...take baby steps.” Below are a list of the three suggestions to start you on the right track and guide your SMO efforts.

1. Analyze your situation. Before beginning anything, if you aren’t using an analytics tool – get one. Programs like Google Analytics and Feedburner are free and easy to use. Through them you can help you see how your readers get to your site, popularity of your articles, effective search words, and more. This will give you a base of comparison for your SMO efforts. And frankly, if you’re not studying the analytics, there’s simply no way to optimize.

2. Set Specific SMO Goals. Everyone dreams of increased readers and higher search rankings – but setting out specific goals will further help set your SMO strategy. Do you want readers to interact with your site? Do you want to gather information?

3. Remember Resources. SMO takes time. In order to accomplish your goals will your SMO efforts be daily, bi-weekly, or a one-time only? We know from our own work that there is always something else that you can do with the site to improve it. What’s going to get you the most value? What can you afford? What return do you expect and what will you need to do to get there?

If you’ve ever taken a consumer behavior course you may be familiar with the 5 classes of adopters: Influencers or Innovators, Early Adopters, Early Majority, Late Majority, and Laggers. As a result of this model, it is usually understood that those who are the first to adopt new technologies or products are typically viewed as the leaders of large scale change. They discover, they share, and it spreads like wild fire to the rest.

Advertisers and social media agencies alike have termed this process as “Viral Marketing”, and are constantly looking towards social media mediums to achieve it. The theory? Target the influencers, the influencers will spread it to the rest.

However, a recent article by AdAge disputes this by revealing the latest research by sociology professor Duncan Watts. Watts’ mathematical research reveals that, “even if these influentials are seven times as influential as normal person, they have little impact beyond their own immediate neighborhood”. As a result, he believes that to begin an “epidemic” such as viral marketing, one must skip the targeted select and instead reach for the large number of easily influenced people.

Certainly even Watt’s theory can be debated. Influencers should be targeted – as they have the ability to discover and spread information. However, Watt reminds us that social media strategies should also not overlook the unrecognized power of our everyday, average Joe’s.