Could Gaming Social Media Sites Be A Legitimate Form Of Online Advertising?

Social media marketing, i.e. promoting content through social media sites like Digg has become a cottage industry. Digg and other “audience as editor” sites have fought tooth and nail against gaming, trying to keep marketing content from receiving the same homepage attention as “editorial content,” i.e. content voted up by the community without marketer influence. Digg CEO Jay Adelson calls it an “arms race against the manipulators.” But could this marketer gaming of social media sites actually evolve into a legitimate form of online advertising?

A WSJ article rehashes this issue along with coverage of a new startup, Collactive, that has created a system for gaming social media sites:

The latest to try to capitalize on the popularity-contest trend is start-up Collactive Inc., which lets individuals create bulletins about specific online content that they can then blast out to other people. Users can identify items such as articles or video clips from a number of different sites, and specify what actions — such as emailing articles and giving videos a specific rating on YouTube’s five-star scale — that they want Collactive to direct other people to take. The users can then email a link to the Collactive bulletin to friends or post it on their Web sites. Collactive, a Delaware-registered company that operates mainly out of Israel, then automatically walks the recipients through the process of viewing and emailing or rating the content. While the service is free for individuals, the company plans to charge businesses, politicians and some nonprofits for usage.

Digg, of course, took a strong stance against Collactive:

“There’s a difference if you’re a marketing company and you want to get something manipulated to the top,” says Digg’s Mr. Adelson.

In thinking about whether such “manipulation” of social media sites to get attention for marketing content could actually be a legitimate form of online advertising, the real issue is not the manipulation or gaming but disclosure.

PayPerPost took it on the chin because the service did not require bloggers that get paid for posts to disclose the payment. ReviewMe, a competitor, introduced the requirement that all sponsored posts be disclosed as sponsored.

Despite the flare-up over the issue of disclosure in new media, it is in fact an old issue. If you think about, putting an ad on a page of a magazine or newspaper where you might also find editorial content has the potential to be manipulative. But most people can recognize a magazine ad as an ad. As for “advertorials,” i.e. advertising content that could more easily be mistaken for editorial content, this is from the American Society of Magazine Editor’s Guidelines for Editors and Publishers:

Editorial-looking sections or pages that are not produced by a magazine’s editors are not editorial content. They should be labeled “Advertisement,� “Special Advertising Section� or “Promotion� at the top of every page in type as prominent as the magazine’s normal body type.

But how would such disclosure work on a site like Digg? And there’s another problem, which is evident in the use of Collactive to get attention for content based on the legitimate interest of people viewing it to influence social media rankings:

The Genocide Intervention Network, a Washington, D.C., nonprofit, used Collactive last week in an effort to get 30,000 members on its email list to boost the visibility of a Boston Globe opinion piece about the conflict in Darfur, Sudan. The piece was featured in a “most-emailed” box on the newspaper’s site; as of yesterday, it was the most popular item for the past week.

Yahoo SVP Scott Moore is notably, and I think correctly, OK with that:

So far, sites such as Yahoo Inc. don’t appear to object to the use of Collactive’s bulletins. “People using Yahoo News’s ‘most popular’ or ‘most emailed’ as a kind of grass-roots marketing tool is just fine with us,” says Scott Moore, senior vice president at Yahoo in charge of news and information. “If we detected abuse in the ratings … we would stop it.”

The issue of disclosure arises when the content is voted up strictly as a function of payment and not legitimate editorial interest. Digg has such a problem with manipulation because it’s not clear to any reader of the homepage whether an article got their because the Digg community genuinely thinks it’s interesting or because a marketer effectively placed it there.

One obvious solution is to give marketers the opportunity to pay for their content to get exposure on social media homepages by clearly labeling it as paid or sponsored. This is what Gabe Rivera has done very effectively on TechMeme.

But the problem with this solution for social media sites is that many marketers will argue that the content they are trying to promote on the site is legitimately interesting to the users whose votes determine the rankings. So why should that content be labeled as “advertising” if it has real editorial value, i.e. the products or services being promoted are genuinely of interest to the social media site’s community?

Disclosure of paid content is such an important issue because publishers need to avoid deceiving their audience into believing that paid content is actually editorially selected content. The challenge for social media is that when the audience is the editor, the traditional guidelines for separating “advertising” content from “editorial” content break down.

I think a company like Collactive could offer a legitimate form of online advertising if it found a way to work with social media sites to ensure that the communities are being well served and not spammed or deceived. The challenge is working close to the Chinese Wall without falling over it — something that publishers have wrestled with for decades.

Interestingly, Google, whose search algorithm is based on human-created links, has fought the ultimate battle against marketer “manipulation.” But Google itself operates very close to the Chinese Wall. Google recently changed the format for the sponsored links that appear above Google search results from a blue background to a yellow background. (Thanks to Sahar for pointing that out.)

The other day, I was showing someone a Google search result on my laptop and he pointed to the first sponsored link thinking it was the first organic result. I tried looking at the laptop screen from his angle and I discovered that the yellow background is all but invisible — and the “Sponsored Link” label, rather than being over the link, is all the way to the right.

The long-term health of online marketing and advertising depends on building a new Chinese Wall, i.e. not over-polluting the system, which is going to be a huge challenge. One thing is certain — the ASME guidelines aren’t going to cut it.