Some sites like MySpace have begun policing ads:

The main reason that they killed the dating ads was that people were using copyright images as well as girls under 18 to advertise for CPA sites. It got to a point where the ad approval team couldn’t police them anymore. The dieting ads were killed cause the FTC is just starting to crack down on the fake blogs that promote the diet offers.

But the efforts might be too little too late, and the Federal Trade Commission (FTC) is planning to regulate online social marketing. Yes, that includes blogs, Facebook, Twitter, and other forms of social networking.

In December 2008, the FTC proposed rule changes relating to endorsements, where bloggers and other site owners may be help liable for claims made about a product or service.

For example, companies giving trial products to bloggers might constitute an endorsement. So flippant comments about the product or service in a social media context may come under the same scrutiny as print advertising. So, best be careful blogging or Twittering about the efficacy of that affiliate weight loss program ;)

Is Regulation a Bad Thing?

In this interview with Shoemoney, Seth Godin explained why he thought this regulation was good, noting that

• there will always be someone operating sleazier than you are
• the sleazy operators steal from everyone on the network, and increase the trust barrier that legitimate businesses must overcome

If the internet was not anonymous then you wouldn't have Google AdWords ad reps stealing your keywords from your AdWords account and bidding on your trademark. Much of the advertising & affiliate driven fraud would quickly disappear.

If these measures are approved, what will this mean for social media marketers?

1. Go Easy On The Snake Oil

If a claim is outrageous, best be careful about repeating it. Check that any claim has studies to back it up.

2. Typical Results

Not only do results have to be shown to be achievable, they must be typical. The FTC will likely investigate claims if the average consumer is likely to be mislead about results that can be achieved.

This can be tricky, as most testimonials in the internet marketing space are essentially nepotistic or bought (particularly for "all-in-on" Earth shattering courses costing $1,997). Perry Marshall highlighted how hard it is to find out the "average" when your customers have little incentive to tell you something is working (and if they actually put in any effort when it is not).

3. Affiliates Beware Of Being Thrown Under A Bus

The FTC are likely to focus on endorsements by third parties.

Often, parent companies may be unwilling to make certain claims, but are more than happy for their affiliates to do so. This, of course, transfers risk to the affiliate.

Make sure both your stories are in sync.

4. Disclose

If you're being compensated for something, whether by money or materials, it's best to say so.

Meanwhile, the FDA is also tightening regulation, and this will have an impact on search advertising:

Last week the U.S. Food and Drug Administration wagged its finger at more than a dozen pharmaceutical companies over their use of paid search advertising.In one day, the agency sent an unheard-of 14 warning letters to pharmaceutical companies regarding their use of search ads on behalf of more than 40 drugs. The list of brands mentioned included such top sellers as Lexapro (an antidepressant) and Plavix (a blood thinner). GlaxoSmithKline, Sanofi-Aventis, Merck, and Eli Lilly were among those to receive letters.

Industry observer Mark Senak said it looked like the FDA was trying to clean up pharmaceutical search engine marketing by playing "whack the mole" rather than issuing some regulatory guidance. But an FDA spokesperson said the agency found "a plethora of violations across all classes of drugs," and noted the FDA's policy is to enforce the same standards in all media.

The common thread is that enforcement bodies are looking to apply the same standards found in print to online media.

How cool is this? Back in 1989 I started collecting sports cards and Tony Mandarich was the #2 draft pick in the NFL. He has since built an SEO company, and was recently interviewed by Patrick Gavin:

So my wife and I started from scratch, learning the web design and SEO business. That was five years ago. I had an above-average understanding of how the Internet worked, for someone who wasn’t doing it full time. Once I committed to learning it and applying it to our own business of photography and videography, within 6 months we were ranked on the first page of Google for the key phrases we were going after. The one crucial piece of literature that helped me immensely in SEO was Aaron Wall’s “SEO Book”. I applied his principles and – Voila – it worked!

A couple of our members recently reviewed our site. From SEO Rabbit:

SeoBook is not a fancy 8 hour long SEM workshop for which you have to pay several grand, only to leave with more questions then you originally had, or to very quickly figure out that the only fancy thing about persons conducting the workshop is their ability to market themselves. SEOBook community is a workshop that constantly asks questions and does its best to answer them, more often then not it does. Being a member for few months made me realize that members don’t hold back when it comes to sharing experiences, giving advices, and answering questions.

I recommend SEOBook for anyone who is serious about Internet marketing. The only way I can see that SeoBook membership is not worth it, is if you don’t use it or don’t participate.

Tom Demers from Wordstream:

Even if you are a very sophisticated marketer and/or have spent a lot of time with the training modules, the SEO Book forums are excellent. They’re populated with:

• Aaron Himself – He responds to seemingly every post (he has over 11k posts on the board). I have asked three or four questions and started a handful of threads, and he’s answered/participated in every one. The answers are outstanding. If you think of this type of access in terms of what it would cost outside of this offer (to have a top SEO on retainer) a price point of 100 dollars a month is a pretty staggering value.
• The Moderators – I don’t know what kind of arrangement is set up with the moderators but they are all experienced Web marketers and are extremely active and helpful answering questions, as well. This makes the 100 feel like it’s going towards a team of consultants (or “coaches”).
• The “Customers” – The really fascinating thing here is that the people who are “members” are often affiliates and/or marketers themselves; the people asking very basic questions are hungry to learn (they actually paid to get in!) and then seem to come up the curb quickly to start contributing some great stuff. Affiliate marketers investing this kind of time to discuss and learn tactics are often the people doing the testing, and generally have bleeding edge insight into the way the Web works.

Since I signed up I’ve probably found three or four really great link sources that I wouldn’t have otherwise known about, and that would be worthless if they were published on a free blog. I’ve also had multiple questions given a lot of attention and lengthy responses.

Speaking at a conference for newspapers Eric Schmidt said:

"We've been careful not to bias it using our own judgment of trust because we're never sure if we get it right. So we use complicated ranking signals, as they're called, to determine rank and relevance. And we change them periodically, which drives everybody crazy, as or algorithms get better. ... The usual problem is you've got somebody who really is very trustworthy, but they're not as well-known and they compete against people who are better known, and they don't 'in their view' get high enough ranking. We have not come up with a way to algorithmically handle that in a coherent way."

So the big flaw in the algorithm there is "to be well known." SEOs have exploited that since Google first got on the web - buying, trading, borrowing, and stealing links as needed. Arianna Huffington claims that to succeed today you need to work in the links based economy

But what won't work -- what can't work -- is to act like the last 15 years never happened, that we are still operating in the old content economy as opposed to the new link economy, and that the survival of the industry will be found by "protecting" content behind walled gardens.

But the problem with that line of thinking is that the link based economy is quietly disappearing. Links are not flowing as well as they once would have. Take for example, this post - it covers a currently hot topic, is 8 pages long, contains multiple custom images, is easy to consume, and is published on a blog with over 30,000 RSS subscribers. The reward for such work? Less than 30 links so far, and maybe a total of 5 links if you back out the temporal social media links. (And some of those 5 links are on sites that routinely link back and forth).

Would you be willing to write for 4 or 5 hours to only get 5 links to a fairly non-commercial page of a site that already has over 1 million inbound links? No way...totally not worth the effort if we were operating in a "links-based economy."

A couple days ago I talked with a friend who works for some news companies, and they wanted to use rel=nofollow on their editorial selected links because they were afraid of leaking PageRank. To say that we are entering a links based economy is to ignore the corruption of nofollow and how "social" media is pulling editorial links away from those who earned it. But the web changes, and so must we, lest we become the mainstream media writing our own obituary each dawn.

We have moved past the links-based economy into a passion based economy.

In Someone Can Charge for News Content, but Who? John Andrews reminds us of today's most popular news programs:

Today Bill O’Reilly reports the news, and Jon Stewart reports the news. Very popular news shows, right? Think about it.

If the links are not counting in the algorithms then you need to get paid another way to make creating in depth high value content worthwhile. To do that, you need to publish content that is aligned with a particular passion, niche, and/or bias.

Call it tribe based or fan driven marketing. Your customers must play a critical role in your marketing for you to succeed.

Trying to maintain a false appearance of objectivity (as the media does) simply can't compete with deep rooted biases founded in passion, experience, and expertise. I would rather trust a known bias than fake objective with hidden agendas I later need to figure out.

• The mainstream media sites can profitably build businesses if they focus on high value niches and create stand alone brands for each that are worth charging for access to.
• The mainstream media sites can profitably arbitrage Google's organic search results by filling their sites up with eHow-like junk content that costs less than $5 per page to produce.
• But doing what they doing, half-assed generic publishing while slowly trimming costs off huge inefficient organizations guarantees bankruptcies & consolidation. Their current strategy gives them neither passion driven content nor cost efficiency...they are wounded animals mindlessly roaming awaiting their death - the one topic they cover with passion.

Ironically, some of the best content online comes in the form of walled garden paid membership websites. But, it turns out, we don't need the media to figure out who shares our passions.

When an economy is booming, companies can risk being sub-optimal.

They can get away waste and inefficiency. They can get away with providing less value, because customers aren't as focused on the bottom line as they are when cash is tight.

In a down economy, it is less likely people will be prepared to pay too much for things they don't really need.

So now we're in a down economy, how will things change? What can the webmaster do to adapt to these changes?

Here are a couple of interesting articles:

One on Gapingvoid.com, which predicts a return to value. Another on UnlockTheGame, where a 96 year-old ex-business woman talks about what happened during the last depression.

.... I remember seeing bankers standing in their fancy suits at street corners selling apples......there are millionaires made in good times and in bad times.so the lesson there is the "times" have nothing to do with it.......If you're going to read the news, it's important to read it separating yourself from it. .....Read between the lines and look for the silver lining, because behind every negative news story is a turnaround success story waiting to happen.

While the Gaping Void article makes a number of broad assumptions, the important points of those two articles are that things are going to change, and where there is change, there is opportunity.

So where is the opportunity going to come from?

The Gaping Void article points out:

It was quite a disconnect for me to hear the guys on CNN yapping endlessly on about THE RECESSION, in contrast to all the groovy cats I met at SXSW, who told me how their businesses were booming. It was like two alternate universes colliding. Which one was the real one?"

Been hearing those stories a lot lately? So have I.

It is probable that traditional marketing money (i.e. television, radio, print) is shifting to internet channels, because the internet is seen as providing better value. Also, people may use their cars less often, and shop on the internet to save money. Bad for brick n mortar retailers, good for internet stores.

The UnlockTheGame article talked about surviving the last depression by adding value i.e. selling a freezer stock full of meat.

A good approach in a down economy, especially for the little guy who seldom does enough volume to compete on price alone, is to think about ways to add value.

It is good we're in the internet game :)

How To Add Value

1.Re-Focus On User Needs

What do users really need? As money gets tight, people focus more on their needs than their wants. If you're selling a "want", can you twist it round into being perceived as a need?

For example, one of the first areas to get cut from corporate budgets during a downturn is marketing spend. But a company still needs to talk to consumers. If you sell internet advertising, you could address this need by comparing various channels i.e internet vs tv/radio/print.

Frame your message in terms of results and benefits. In a down economy, positioning is often a lot less important than the bottom line.

2. Segment Your Market

Typically, the wider your market, the more average your service or product. By being all things to all people, chances are you aren't delivering excellent value to some.

If customers are more driven by excellent value because cash is short, the generic products and services may miss out to a competitor more focused on a segments needs. Look for ways to segment your existing market.

3. Improve

Can you be more timely? More convenient? More accurate? Can your offering be customized? Can it be made more usable?

What more can you do for people?

4. Seek Feedback

Your users and customers know what their needs are. Do you make it easy for them to tell you? Ever asked them about it? How do you currently evaluate their needs?

5. Partner

Are there opportunities you see, but can't act on because you don't have the resources? Does someone else have those resources? Are there opportunities to partner up to create more value?

How about within your own company? Is every member of your team focused on providing customer value? Make every team member a partner in the adding value process.

6. Assess The Value Of Existing Relationships

It might seem like a strange time to cut customers, but the customers that aren't making much money present a huge opportunity cost to provide real value to someone else. Assess which customers make you the most money and focus on their needs. What extra value can you create for them?

In the 1960s, advertising was all about the faceless masses.

The idea was that you devise and build a product, throw it over the wall to the marketing department, who would figure out an angle, then engage in a marketing blitz. They'd try and get in front of as many eyeballs as possible, for the lowest CPM.

In the cynical, jaded 00's, advertising works on a more personal level. People are bombarded with messages, so instinctively tune most of them out. The most effective messages are those that people internalize, make personal, and pass on.

Marketing Models

Traditional marketing looked like this:

Very linear.

Modern marketing looks more like this:

Who controls the message now?

The audience.

The audience is no longer a passive recipient. The audience can pass a message on. They become a vector by which your message travels. If people don't pass your message on, chances are your message is dead.

The audience has control, because they have their hand on the remote, and on the mouse, so bombarding them or interrupting them no longer works. This is why companies try to engage people on a personal level, Google being a fine example.

Word of mouth, in other words.

Why Is Word Of Mouth King in 2009?

Word of mouth advertising is powerful because it resonates on a personal level, and it travels via established, personal networks. Those networks by-pass the mass marketing blitz, which people have long since tuned out, as those channels are low trust. They aren't trusted because they are impersonal, and politics in the 00's is all about me, me, me.

And my friends.

Word of mouth is how social media marketing is going to work. It isn't going to work using interruption or mass market techniques.

Review you message to see if it has a word of mouth quality. Is it remarkable enough for people to repeat to their friends?

Seth Godin, who I like to quote, because he puts his ideas in such a way as you want to repeat them, illustrates it like this:

First, Ten

This, in two words, is the secret of the new marketing.

Find ten people. Ten people who trust you/respect you/need you/listen to you...

Those ten people need what you have to sell, or want it. And if they love it, you win. If they love it, they'll each find you ten more people (or a hundred or a thousand or, perhaps, just three). Repeat.

If they don't love it, you need a new product. Start over.

Your idea spreads. Your business grows. Not as fast as you want, but faster than you could ever imagine.

This approach changes the posture and timing of everything you do.

You can no longer market to the anonymous masses. They're not anonymous and they're not masses. You can only market to people who are willing participants. Like this group of ten".

The thing I often find frustrating about Seth Godin is that he offers few practical examples. Perhaps his goal is to make us think.

Let's start with a checklist:

• Is you product or service remarkable? If not, can you twist and shape it so that it is? If not, start again.
• Who are the ten people in your niche who matter? Identify them. You need to spend your time and money being remarkable to them
• Who are the ten people who are really resonating with your brand? Survey them. Find out why they are attracted to your service. Give them tools and reasons to spread the word

One example that springs to mind is the MLM sales launch.

These launches often target trusted industry players first, who in turn spread the message to their readers. It's celebrity endorsement. The tools are the free giveaways and marketing collateral.

Social media marketing is going to work in much the same way. In social media, people listen to people, not networks. So find out who the ten people are you need to talk to, and make your message remarkable to them. Hopefully, they'll do the rest. Handing a bottle of expensive water to Paris Hilton was no doubt a good idea.

Check out this post on developing a social network platform. Notice how he integrates outside people into the internal processes of the company.

Perhaps that's the new version of MLM.....

Differences Between Word Of Mouth And Going Viral

One of the differences between word of mouth and going viral is that in order to go viral, people need to become part of the network in order to pass the message on.

Roelof Botha, the guy behind PayPal and YouTube points out:

Many people think the word "viral" is interchangeable with "word of mouth"--implying that the product or service is so good that people are compelled to talk it up with their friends. But there's more to it than that. Google and Amazon.com are both great Internet companies, but they aren't viral businesses....word of mouth is when I tell you to shop on Zappos because I think the service is great," explains Botha. "It becomes viral when you have to be ‘in the system’ to use it. For example I can post a video on YouTube but then you would need to go to the site in order to see it

Where Does SEO/SEM Fit?

But hang on, I hear you say. I'm an SEO/SEM, what does this have to do with me?

You're already slicing up the niche and targeting via keywords. But if you're buying clicks, or targeting SERPs, you're wasting a valuable opportunity if people visit your site and forget you the moment they click away. Perhaps that person didn't buy or sign up now, but they might tell someone else about you if your message resonates with them. Your message could then skip from the search channel into their closed social networks - Twitter, Facebook, et al - which increases your exposure and reach.

To do this, your message needs to be remarkable on a personal level.

Does your site convey such a message? If I click on it for the first time, do I know the one unique thing you do that no one else can? The problem you solve for me? And would I tell my friends about it? And will you provide me with the means/tools to do so?