Fulcrum Gallery Use Case
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Background
Online advertising has become a big business with advertisers devoting larger portions of their budgets for online versus traditional Print, TV and Radio. The following TechCrunch article nicely summarizes how the share of advertising dollars is divided among the major players such as News Corp., Google, Gannet, and Yahoo: http://www.techcrunch.com/2008/03/14/what-media-company-gained-the-most-market-share-in-2007-hint-it-starts-with-a-g/
With social networking sites such as Facebook and MySpace having about 100 Million members each, it is also no wonder that advertisers are shifting increasing portions of their budgets to social networks. The important question, however, is whether spending ad money with a social network is really the best way to take advantage of social networking.
Banner ads, for example, are based on a model that takes all of the profit from competitors. Companies and their competitors effectively bid up the price of the ad for an item they sell until the point of diminishing profitable returns. While social networks offer the benefit of a more targeted prospect, banner ads in social networks will likely offer only temporary competitive advantage until competitors show up with advertisements of their own. And while the higher ad costs that result will be good for the social networks and advertising companies, they will not offer a ongoing competitive advantage for the businesses paying for the ads.
Social networking can enable a whole new generation of advertising, however, if the focus is placed on extending corporate websites and brand with social applications that engage the community and prospects directly. This type of creative targeted advertising arguably offers a more efficient way to spend advertising dollars since it provides a way to build ongoing competitive advantage.
What is Art?
Fulcrum Gallery is an e-commerce site that offers a selection of over 200,000 works of art encompassing nearly every imaginable subject matter: abstract, children, animals, astronomy, maps, scenic, vintage, holiday and much more. Fulcrum provides a range of value added services such as custom framing and canvas transfers, and they ship to thousands of customers each month, worldwide. While Fulcrum Gallery has made huge investments in search advertising over the past two years, spending over $1 Million last year alone, they have also chosen to spend some of their budget on creating a social application that enables them to directly engage the passionate abstract art lovers in their online community.
Specifically, Fulcrum has a custom social application called "What Is Art?" which highlights a selected piece of abstract art and allows users across both Facebook and the Fulcrum Gallery website to comment. The comments are posted on Facebook users' feeds to friends, inviting them to rate the comments and add their own comments as well. To make things even more enticing, Fulcrum Gallery offers weekly incentives for the most popular abstract art interpretation of the week.
Fulcrum Gallery thinks of social networking as a way for their existing customers to become more engaged and to serve as a source of word-of-mouth referrals. They also see Facebook as a way of extending beyond their existing customer base to target the high growth market of college and post-collegiate customers. The other benefit of creating an engaging social application is the fact that it does not involve an ongoing per-click cost to the business.
The "What is Art?" application takes advantage of the Ringside Social Application Server's Facebook compatibility and interoperability features which enable Fulcrum Gallery to simultaneously reach members on both Facebook and FulcrumGallery.com.
Deploying the application into the existing Fulcrum Gallery e-commerce infrastructure was very straightforward since the Ringside platform provides a widget interface that plugs easily into existing websites via simple HTML tagging. Fulcrum Gallery is able to centrally collect the comments and ratings people contribute from both Facebook and FulcrumGallery.com, providing valuable insight into art lovers' preferences and trends. Moreover, since the application is tightly integrated into FulcrumGallery.com, the user generated comments provide additional website traffic and benefits from a Search Engine Optimization (SEO) perspective.
Fulcrum Gallery will be measuring the effectiveness of this initial social application. They estimate that they only need to see a 1% successful referral rate over the first six months to justify a significant set of additional investments in social networking. For example, they might consider creating simple ways for interior designers to collaborate with their customers on selecting the right artwork for their homes or businesses.
Conclusion
A critical success factor for any Social Web initiative is to find the area of passion that fuels social engagement. In the case of Fulcrum Gallery, their first goal was to target abstract art lovers and engage those passionate members in a way that would drive incremental sales. Their second goal was to tap into the social aspect of referrals and word of mouth in order to drive new buyers to their FulcrumGallery.com site.
Ringside Networks is focused on providing solutions to Social Web scenarios like the one described in this paper, and we have designed the Ringside Social Application Server to:
- Connect your website members to the Social Web
- Connect members to friends on your website, Facebook, or any OpenSocial site
- Connect social applications to your website, Facebook, or any OpenSocial site
- Connect your social applications to your content, data, and systems
References
- U.S. Social Network Ad Projections Revised Downward
http://www.socialtimes.com/2008/05/us-social-network-ad-projections-revised-downward/ - What Media Company Gained the Most Market Share in 2007?
http://www.techcrunch.com/2008/03/14/what-media-company-gained-the-most-market-share-in-2007-hint-it-starts-with-a-g/ - What is Art application on Fulcrum Gallery
http://www.fulcrumgallery.com/ArtInterpretation.aspx - What is Art application on Facebook
http://apps.facebook.com/what_is_art
Additional References
- Ringside Networks Social Business website links to a wide range of articles covering the business aspects of the Social Web
http://www.ringsidenetworks.com/socialbusiness/ - Ringside Networks team blogs cover industry, technical, and product related topics
http://www.ringsidenetworks.com/community/blogs/ - Why Build Social Applications into a Website?
http://bobbickel.blogspot.com/2008/02/why-build-social-applications-into-web.html
- Why Develop a Facebook Application?
http://bobbickel.blogspot.com/2008/04/why-develop-facebook-application.html
- Social Media: Rent or Own?
http://jasonkinner.wordpress.com/2008/03/01/social-media-rent-or-own/
- Search Advertising vs. Social Applications
http://bobbickel.blogspot.com/2008/03/search-advertising-vs-social.html