Summary: In this post, I discuss the issue of trying to force independent word-of-mouth recommendations, an oxymoronic concept. I’ve come to the conclusion that there’s a simple two-step process to generate great word of mouth: 1) provide a great product or service, and 2) make it easy for people to spread the word.

One of the big lessons from Facebook’s trials over the past three weeks is this:

Artificially-induced word of mouth is not the same as the organic kind.

Not only is it not the same, but attempts to game it, like Beacon, carry the potential to bite the implementers in the nether regions.

This concept goes straight to the core of what makes word of mouth powerful: its inherent sincerity. And it pretty much goes without saying—or it should—that sincerity can’t be faked.

The reason we trust our friends is because we believe they have no ulterior motives, so it means a lot when they buy something or subscribe to a new service or read a good book, and are independently impressed enough to pass on a recommendation.

I believe that we all choose what we want to do all the time—nobody has to do anything. But in our society, the concept of having to versus wanting to is frequently linked with money. If you do something without receiving any money, you’re not doing it because you have to, you’re doing it because you want to. The most powerful recommendation possible comes from someone who is so awed by your product or service that they have to tell people even though they get no financial benefit.

And the payment question can be tricky. On the one hand, are paid endorsements still independent? On the other hand, if you’re going to co-opt my purchasing habits and use them to promote your products I should get a piece of the pie, don’t you think?

There is a reason this is the most powerful recommendation, and it has to do with motive. If you’re not getting financial benefit, why do it? Why do we tell each other about commercial offerings when we have no stake in the sale?

When we take away the financial incentive, it comes down to social standing. If I consistently recommend the best products, the coolest services, the newest up-and-coming websites, I increase my social rank. If I recommend lousy things, those recommendations color people’s impression of me personally.

We all know this, albeit subconsciously. I know that my friend wouldn’t recommend to me something lame because it would make her look lame. And that’s far more important to her than the $10 she might earn from a company trying to buy her endorsement.

You cannot fake this stuff. You definitely cannot fake this stuff sustainably.

Tapping into word of mouth is a simple two-step process:

1. Provide a great product or service
2. Provide the tools and mechanisms to enable customers to easily recommend your product or service

What has your experience been with social recommendations and endorsements? And I’ll give a dollar to anyone who can provide the original source of the quotation: “Sincerity is everything. If you can fake that, you’ve got it made.”

Boy was I wrong when I said that dynamic in-video ads hadn’t been done before!

From Cory Treffiletti at Online Spin:

Last week I made the statement that the majority of online video networks either serve video into existing ad units or are manually attaching video spots like 30-second commercials into existing video content. That set off a flurry of responses from such companies as Scanscout, Tremor Media, Eyeblaster, Broadband Enterprises and a new start-up called QMeCom. Each of these folks professes to be capable of dynamically ad-serving video spots into video content based on cookie profiles or behavioral data. I did take a peek at each of their newest products and they do appear to be delivering these services to advertisers within their existing networks of inventory, By using an ad tag from Doubleclick, Atlas or any of the major ad-servers, you can track these units in your digital dashboard for ad management and reporting. I can’t speak on the performance of any of these, as I have not tested them, but at least you know where to look.

Then Michael Arrington reinforced the point with his aptly titled post: Ok, Ok. All of You (even YouTube) Invented Video Overlay Ads “First”:

VideoEgg has certainly been doing this for a year or so…

Next up was Adbrite founder Philip Kaplan, who emailed me to say that Adbrite has had their own overlay product for nearly a year…

And finally, Brightcove CEO Jeremy Allaire sent me a long email saying they’ve been doing this as far back as October 2005…

So where did I read recently that dynamically generated ads were the holy grail for video content? Seriously. It was within the past month. I’ll send a Facebook gift to anyone who can help me figure it out.

Interestingly, Jeremy Allaire continued by saying that advertisers weren’t particularly interested in video overlays:

There are a lot of factors behind this limited uptake, including:

- the advertising community buying video have been very focused on leveraging existing creative and buying patterns in the online video space
- most content publishers and media owners have been focused on getting the ‘basics’ up and running, and also responding to the RFPs from marketers and advertisers, which are almost 100% focused on basic short-form video commercials
- for premium brands and content, the basic pre-roll and companion banners are yielding extremely attractive CPMs and there is little evidence that :15 ads have any negative impact on end-user viewership behavior — in fact, our own metrics show that sites that run without any ads, and then introduce :15 pre-rolls and banners achieve identical usage and performance (e.g. no drop-off in users because of ads) on their content.

Brian Hayes pointed out after my last post that Google’s going to have a tough time recouping their $1.6 billion using this model.

So consumers don’t like it, advertisers aren’t interested, and Google can’t make money at it. Why are they doing it, then? And what do you recommend instead?