I had a great meeting with Bindu Reddy last week. Bindu is the CEO of MyLikes and the former head of product management for Google Apps. Her husband and co-founder of MyLikes, Arvind Sundararajan, is the former tech lead for AdSense.
The premise behind MyLikes is simple: we are more likely to trust the recommendations of our friends, colleagues and advisors more than we trust consumer ads and the opinions of people we don’t know (with the exception of Hollywood celebrities and sports stars because, of course, we all know they are completely believable, role models for our children and extremely well educated – sarcasm intended).
Here is some data that supports this thesis (source: Lies, Damned Lies and Statistics):
- 83% of consumers globally are likely to visit a website are likely to visit a website recommended by a friend on Facebook, and more than half say comments posted on retailers’ Facebook and Twitter pages, whether positive or negative, also influence their opinions (2011 Global Consumer Shopping Habits Survey – Channel Advisor)
- Consumer opinions posted online (70%) are more trusted than information on TV (62%), newspapers (61%) and online banner ads (33%) (Nielsen)
- In Europe over 50 percent of respondents aged 16 – 64 with access to the Internet, use social networks to assist with shopping decisions and of those that would be likely to follow a retailer on a social network, 35 percent stated they use social media platforms to read reviews or rank products and services (IBM)
- “Customers who engage with companies over social media spend 20 percent to 40 percent more money with those companies than other customers.” (Bain & Co)
- A study in South Korea (a mature social media market) found that social impacts sales among moderate and heavy users. Recommendations shared among moderate social media users increased brand sales by 5%.
- However, heavy social media users also listen to negative chatter. Brands talked about negatively experienced a 14% sales drop among this grow (Harvard Business School)
- The heaviest Facebook users are also the biggest spenders online – the top 20% of users spend $67 per quarter, compared to $27 for non Facebook users (Comscore)
- According to a Kantar Media study in the US, 35% of social media users say Twitter has influenced their purchasing decisions (Twitter links also result in more clicks than Facebook)
- Even concentrating on smaller social networks can be commercially beneficial. Radio Shack in the US found that customers checking into their stores on Foursquare spend 3.5x more than those that don’t
- Super fans and advocates on your social channels are 50% more likely to create content that influences a purchase (ComBlu)
- The picture is the same if you look at individual industries. In the ‘quick serve industry’, consumers exposed to social media have a 7x greater likelihood of ‘higher spend’ (WPP / Ogilvy)
- Meanwhile, 60% of consumers say they factor other travellers’ online reviews into their plans when booking a vacation / holiday (eyefortravel / Simpliflying)
What I like about the concept of MyLikes is they allow you – anyone – who has created a group of followers/friends through FB, Twitter, etc. to promote certain brands and content you trust to your personal community. In exchange, you get paid for making these promotions. Since it is easy to see what is “sponsored” content you aren’t duping your family, friends, colleagues and they, hopefully, see interesting content and/or products they might have missed if you didn’t share it with them.
I feel this has a beneficial effect for advertisers/brands in that there is typically implied trust between people who know each other; it is not likely we are going to spam each other and we are not likely to promote something we don’t believe in ourselves. I think it is this fact that makes the sponsored content received through this exchange that much more valuable to advertisers/brands.
To learn more, I wanted to try MyLikes for myself – just to better understand how the process worked. It was a breeze to set up my MyLikes account and to link it to my PayPal account (you get paid when the sponsored content you send out via Twiiter/FB, etc. is clicked on so you need a place where MyLikes makes the payment.)
During the process, MyLikes asked me what types of conversations I typically engage in. In my case, it’s all about business issues and technology. But, if you are primarily interested in things like fashion, entertainment, celebrities, etc. they can capture that.
Once I completed the sign up process, I was presented with a list of sponsored ads and the amount I would be paid if I sent them out to my network.
I realized that as I was going through the various sponsored ads, I immediately rejected anything I thought wasn’t relevant to the community of people I engage with. For example, while interesting, I wasn’t about to send out the Sports Illustrated swim suit sponsored ad since this is inappropriate for my brand and for the professional community I interact with. For others, this content might be ok.
I did have a few things that I would suggest MyLikes consider changing over time:
- I would prefer that MyLikes only present me with content I would find highly relevant for my community. Right now, I need to scroll through a serialized list of sponsored ads that aren’t limited just to the areas I would find relevant.
- I would like to see them add the ability for me to rate each ad as to whether or not they are relevant to my community and to use this to filter which ads I am presented with.
- Having to go to MyLikes and select sponsored content feels non-intuitive to me. Instead, I would prefer to find content anywhere that I want to post to my social networks and at the moment of posting be prompted if I want to make it a sponsored post and select the advertiser from a small list of sponsors with whom I trust or new ones who want to compete for access to my network.
The real power of MyLikes’ approach, I feel, is the fact I am self-policing. No one needs to tell me what is appropriate or inappropriate for the community of people I engage with. If I were 15 years old with a bunch of friends, my idea of what is and isn’t appropriate would be a lot different.
This self-policing fact means that the “value” of the content I selectively choose to share with my community should be a lot higher with advertisers than ads generated through the popular ad networks. In other words, CPM rates for MyLikes should be a lot higher because publishers of the sponsored ads are filtering the ads for relevance.
There are other start ups that have been built around a “digital word of mouth” premise (e.g. Zuberance, Amplifinity, etc.). They, however, are primarily focused on providing tools/services for the brands and/or their agencies to manage their communities. MyLikes, on the other hand, is focused on disintermediating the brands/agencies and putting power into the hands of consumers to decide what brands and what messaging is important.
Just as traditional brokerage firms were disintermediated by new firms such as Schwab and eTrade, there may be an opportunity to disintermediate the traditional advertising firms with these new approaches. We are only in the beginning stages of this transformation. It will be interesting to see where this ends up.
In the meantime, I posted my first MyLikes sponsored ad today. Now, all I have to do is wait for the big bucks to roll in!