That Sheryl Sandberg is One Smart Chick

By now you have probably read about the brouhaha over Facebook’s unbelievably lame efforts to get PR firm Burson-Marsteller to quietly place anti-Google stories of questionable import with some big media outlets, and Burson’s even lamer attempt to throw their client under the bus when the truth came out (Facebook Busted in Clumsy Smear on Google).  Bad form, Burson – bad form.  Isn’t the first rule of crisis PR to own up to your mistakes?

What you may not have read is the current Bloomberg Business Week cover story on Sheryl Sandberg, COO and reining adult at Facebook.  (Btw, I will never get used to calling it Bloomberg Business Week – it’s a ridiculous mouthful.  Of course, I still call the Met Life building the Pan Am building, but I digress.)  I’ve never had the pleasure of meeting Ms. Sandberg, but by all accounts she lives up to the hype – smart, capable, very good at what she does, and possessing many of the qualities that generally make women better managers than men (there, I said it).

The article is a very good read, but the part that really caught my attention is how fb is selling advertising and how it plans to evolve its model.  Here, an excerpt:

“Social ads” on Facebook perch unobtrusively on the right border of the page and usually specify which of a member’s friends has “liked” or commented on that particular ad or advertiser. The data company Webtrends says that only around half of one percent of people who see these ads actually click on them; yet Facebook pulled in an estimated $2 billion in sales in 2010, Bloomberg has reported, and is on track to do twice that in 2011. Facebook executives argue that the click-through numbers are not that meaningful; they say that people remember ads better and are more likely to make purchases when their friends endorse products.

Advertisers appear to be buying that logic. The social network now serves up nearly one-third of the display advertising that Internet users see in the U.S., according to comScore (SCOR), and delivers twice as many ad impressions as its closest rival, Yahoo! (YHOO).

Sandberg wants to let advertisers burrow even deeper into the social fabric of the site. When a user checks into a restaurant using the Facebook app on their mobile phone, or leaves a comment on the profile page of an advertiser, that action gets broadcast into friends’ news feeds, where it can get lost in the clutter. A new tool called Sponsored Stories allows advertisers to pay to turn that member’s action into an ad, which is more likely to be seen by the user’s friends.

It may sound obscure, but if you’re an advertiser, there’s nothing better than converting customers into unpaid endorsers. Michael Lazerow, chief executive of Buddy Media, which helps brands advertise on Facebook, predicts that the largest advertisers will cross the $100 million spending threshold on Facebook this year. “The ones who were spending zero last year are spending millions this year,” he says. “The ones who were spending millions are spending tens of millions.”

Facebook’s tentacles now touch millions of other websites, from the Huffington Post to (AMZN), that use its reader comment system, and its “like” and “send” buttons, to allow their users to share their content with their friends on the social network. Under Sandberg’s direction, Facebook has begun preaching the mantra of what it calls “social design” to companies that want to remake themselves for the fashionable age of social media. It sets up Facebook brilliantly—those social ads may someday start showing up on any site that has a “like” button.

While the term “social design” sounds vaguely sinister, this is a pretty genius idea not only in its potential power but in its simplicity.  Sponsored Stories unleash the value created by millions of fb users who happily endorse a product they not only like, but because they’re endorsing it publicly, to their entire network, they obviously take some pride in the association.

I’ve no doubt that the naysayers will have a field day with this – that it’s somehow “wrong” to turn my positive comment on Shorty’s Widgets fb page into an ad.  You know what?  If it bugs you that much, don’t leave a comment on Shorty’s page.  Truth is, you’ll probably be hurting his business more than you’ll be hurting fb’s.

To read the article in full, check out this link:

Mangia…or how you can get cheap concert tickets

Last week I had lunch with my friend David.  We used to work together at SFX Entertainment (now known as Live Nation), and he has long harbored the idea of creating something like TKTS for concerts, sporting events and the like.  We talked about what such a service might look like and how it would be pretty easy to pull off technically.  The stumbling blocks, though, were two-fold.  First, is Ticketmaster.  We all know Ticketmaster as the go-to source for all kinds of tickets, but what most people don’t know is that venues use TM’s systems for inventory control.  Thus, any sale of tickets has to tie into TM’s systems.  Second, and far more gnarly, is the artists.  While everyone loves to think of TM as the evil empire with respect to inflated ticket pricing, the truth is control (and therefore blame) lies squarely with the artists.

So imagine my interest when I read this morning that Groupon and Live Nation (which owns TM) have teamed to, in effect, create a TKTS for live events  (Groupon Brings Group-Buying Concept to Concert-Goers With Ticketmaster Partnership).  Sounds pretty good, right?  Yeah, well, not so fast.  If you think this is going to be a cheap source of Lady Gaga tickets, forget it.  If you think it’s going to get you (dare I say it) Justin Bieber tickets for your kid, you’re SOL, which is probably a blessing.  If, however, you’re bound and determined to catch Journey this summer because you’ve missed 15 out of their last 15 tours, this deal’s for you!

Quick education on the concert business:  It sucks.  It is a high fixed cost, real estate based business, and there are too few artists that can fill an amphitheater or an arena, and too many one-hit wonders and rock and roll dinosaurs.  Ticket prices are too high.  Artists are unwilling to lower them.  Promoters still feel compelled to pay artists guarantees that give them @100% of ticket revenue.  This puts artist and promoter at odds since the promoter is essentially in the beer/popcorn/parking business and therefore ultimately cares more about butts in seats and less about how much a ticket sells for as the show date approaches.

So tell me:  do you think Steven Tyler, coming off the success of AI, is going to allow his tickets to be discounted when he’s earning a guarantee?  Do you think he’s going to publicly admit that his show is sucking wind one minute earlier than necessary to ensure a reasonably full house the night of the show (no one likes to play to an empty house)?  And while a ticket purchased through Groupon is presumably discounted, there has to be some margin in there for Groupon, right?  So why buy from Groupon when you can buy from or any scalper (fyi, scalping, or “reselling,” is legal in most states) who is also sitting with unsold tickets they can discount more deeply because they don’t need artist approval or to compensate a middle man?

The only way this deal works is for acts like Journey and Queensryche and their ilk – bands that tour year in and year out, rarely if ever put out new material, and no one wants to see.  It also works for other forms of live entertainment – sporting events, the circus, and monster truck rallies.

Here’s my advice.  If you want to see a show, make friends with someone at the venue and find out when the “holds” – the tickets that are held back from the initial on-sale by the artist, the promoter, and/or the building for friends and family – are going to be released for sale to the general public (generally a few days before the show).  These are always the best seats in the house.  Stick to club shows – that’s where all the interesting stuff is going on musically anyway.  Or, get ready to see The Big Apple Circus.