Monday, July 27, 2009

Why IZEA is Wrong for Absolutely Everyone: Brands

IZEA is a leader in the "sponsored conversation" business, which is a euphemism for paid blog posts and tweets. IZEA promises benefits to everyone--hard-working bloggers can earn cash based on the size of their audience; brands can reach consumers via difficult-to-crack Social Media channels; and consumers can learn about new products and services from the bloggers they trust. It all sounds so positive, and it is complete and utter rubbish.

If you believe IZEA has the Midas Touch, it might help to brush up on your mythology; we all know Midas turned everything he touched into gold, but we forget how the story ends. Upon receiving his magical ability, Midas converted a few baubles into gold and at first was pleased, until he tried to eat and drink and found that solid gold food was not going to fill his stomach. His prayers to have the ability reversed were answered, and Midas renounced wealth and lived humbly the rest of his days.

IZEA promises easy gold, but those who engage with IZEA may find themselves wishing--as did Midas--for a quick exit. IZEA and other "sponsored conversation" firms are the wrong model for Social Media. Wrong for whom, you might ask? Absolutely everyone!

Why IZEA is Wrong for Brands

Like Midas, who was pleased with his initial results, IZEA claims their early programs furnished positive ROI. Brands would be wise to proceed with caution before basing expectations upon the outcome of IZEA's first programs; marketers have sometimes been enthused by the early success of new tactics and rushed into investments, only to be disappointed by diminishing results as those tactics became more commonplace.

For example, GM O'Connell, founder and chairman of the agency that in 1994 invented the banner ad we know today, noted that the very first banner campaign attracted a 42 percent clickthrough rate (CTR). That first banner ad garnered a CTR 100 to 300 times higher than is common today because it was unique and attracted attention. Paid blog posts and tweets are likely to follow the same path--furnishing some reason for initial optimism but ultimately earning the same consumer indifference and loathing as banner ads. For financial reasons, brands must proceed very cautiously with "sponsored conversation" tactics.

Another reason for brands to reject IZEA and their ilk is the quality of the blogs and Twitter accounts to which they furnish access. The IZEA home page lures marketers with names like Chris Pirillo (Technorati Authority of 537), Janice Croze (Authority of 1388) and Chris Brogan (Number 2 on the Ad Age 150) You don't need to scratch too deeply to see the giant chasm that exists between these people and the typical bloggers and Twitterers offered by IZEA. For example, on IZEA's I quickly found a "verified" blog called "OOooooh what does that do?!" offering sponsored conversations, but it turns out to be not a blog but a spammer's trap. In the IZEA community, this valueless spam site earned three "props!"

IZEA is now plotting to bring pay-per-tweet to Twitter, but this sort of platform already exists. As I noted in a blog post back in May called "How to Lose Friends and Alienate People," has been offering paid Tweet opportunities for some time. As with IZEA, the quality is not what brands expect and demand. In that article I noted, "For just $918, you can sponsor the misspelled, fraudulent 'Official Joe Jonas Brothers' Twitter account, @JoesephJonas. With this sort of quality and authenticity, how could brands possibly lose?"

I am hardly suggesting that brands don't belong on blogs and in tweets, but for conversations to be truly valuable, they must be earned, not sponsored. On Twitter this weekend, I complimented a movie, recommended a brunch, and shared an interesting Social Media friend-tracking tool. I didn't get paid to tweet these things--my comments were earned by businesses that furnished the kind of function or experience I wanted to share.

I'm not even suggesting that brands cannot target bloggers or Twitterers for special attention. Far from it--Social Media PR that focuses on finding the right blogs and crafting the right approach for each blogger is an extremely valuable tool in the social marketing toolkit. But there is a world of difference between a smart, respectful, and customized Social Media PR effort and simply hawking your brand in a marketplace of mercenary bloggers willing to sell their readers' trust to whichever brands pay the price.

Paying for blog mentions is the lazy way for marketers to garner attention in Social Media, and as this approach becomes more common it will be apparent to consumers which brands earn buzz and which need to pay for it. In a medium as transparent as Social Media, brands that get people talking authentically create their own gold, but brands who pay for the attention they cannot earn legitimately will only make their brand's impoverishment of loyalty and influence that much more evident.

Please return tomorrow when we explore "Why IZEA is Wrong for Absolutely Everyone: Bloggers and Consumers".


Cullen O'Brien said...

Would you wage the same argument against Paid Search? I wonder. You might argue the two are not comparable, since most Paid Search ads clearly state 'Sponsored Links' or 'Advertisement,' and (from what I understand of IZEA) the paid blog posts and tweets do not make these disclosures (and are more "sneaky" under the guise of legit authors). But you have to admit, there are some parallels between both kinds of paid media: they're done very much in the context or attempt to appear like they're not paid media. (I also wonder if ad-savvy consumers can see through paid Social Media tactics such as those IZEA offers.)

Augie Ray said...

Interesting point and worthy of some discussion.

First of all, I do not see Paid Search ads and Paid Blogs posts as substantially comparable, so no, I would not wage the same argument. In my opinion, there are *parallels* but *very substantial differences* between paid blog posts and paid search ads.

The FTC and advertising ethical practices require ads to be “clear and conspicuous.” On search engines, PAID ads are visually and structurally different than CONTENT (search results), specifically to avoid the muddling of advertising and editorial. Search ads are not presented "in context" with organic results but appear above and to the right of the results to prevent any confusion. As a result, consumers are 100% certain of what is ad and what is content, which protects both Google's trust and the integrity of the brands advertised.

A paid blog post is not “clear and conspicuous" as an advertisement, at least unless it is immediately and obviously disclosed as such (which is certainly the exception and not the rule). A paid blog post that appears like every other post except for a subtle disclosure at the end (or no disclosure) seems not only likely to confuse consumers but specifically designed to confuse consumers. After all, this form of advertising isn't called "sponsored conversations" for nothing; it's like those involved are trying to convince themselves (and others) that they're actually subsidizing a discussion and not paying for advertising.

I think there is a good reason to look to traditional editorial/advertising to learn from history what is right for media, consumers, and brands. I don't think blogs have rewritten the laws of media trust, advertising ethics, or brand building.

In newspapers, advertising is advertising; content is content. In newspapers, there is no confusion between the two--news organizations don't permit advertisers to run ads that look exactly like an article, and they certainly would never allow a reporter to write a "sponsored article". When an ad gives a great deal of information in an article-like fashion, newspapers require different fonts and clear delineation that prevents ANY confusion of paid ad from editorial content. And, I'd point out that no respectable brand would ever take out one of those advertorial-looking newspaper ads; those types of ads tend to be used to promote cheap consumer collectibles or get-rich-quick MLM schemes.

I certainly support the idea of brands advertising on blogs. Google Adsense ads (which represent the context of the blog but don't present the ads in context with content) are perfectly acceptable. The distinction between this sort of advertising (or banner ads) and editorial is very clear for both brands and consumers. But blogs presenting ads in *exactly* the same way as content is a problem, in my opinion.

It is very clear the FTC is going to publish rules about paid blog posts, and there are clear indications they will be very strict. They may even go further than even I would suggest or want; these rules may require disclosure of ANY exchange of value. My thought is that any exchange of cash for "sponsored conversations" must be clearly and conspicuously disclosed, but I don't object to free product being given to bloggers for review. Of course, even that has to have its limits--a box of free diapers seems fair; a lifetime supply of diapers (or a car) is not.

In the end, while we can debate what is right or not (and wait for the FTC's actions), this much I believe is true (and I strongly suspect you'd agree): A brand that has to pay for attention is sending a signal--perhaps subconsciously or maybe overtly--that it doesn't have the level of brand loyalty or furnish the kind of consumer experience that gets people talking and blogging authentically. Some marketers may open their wallets and pay for blog attention, but smart marketers will find ways of engaging consumers and bloggers to earn far more valuable, genuine, and authoritative attention.

Thanks for the comments!