Justin Smith, Inside Facebook on Drinking from the Watercooler, Talking Smack and the Beauty of eBooks
Susan Bratton

Episode 66 - Justin Smith, Inside Facebook on Drinking from the Watercooler, Talking Smack and the Beauty of eBooks

Meet Justin Smith, editor of "Inside Facebook," the biggest blog covering social media marketing and app development and author of my favorite ebook ever, "The Facebook Marketing Bible." Justin, in his spare time (as he's one of those Silicon Valley Brilliants who can multi-task with technical precision) also heads up product strategy for Watercooler, one of the Top 10 social media apps developers focusing on sports and entertainment. 

You'll want to sit in front of your computer with Facebook loaded up as Justin gives you a virtual audio tour of Facebook for marketers and guerilla self-branders. Learn what new ad models are emerging for marketers through the new Facebook design. Get Justin's highly-educated opinion about the best opportunities for brands on Facebook which include integrated home page ads, video ads with commenting and best uses for News Feed ads and marketer's pages.  If you are a "web celebrity" you can learn more about pimping yourself on Facebook with some of Justin's guerilla Facebook self-promotion strategies.

Justin offers advice about building and maintaining applications and widgets and some estimates of the cost of producing one. He also categorizes the app development companies into buckets we can wrap our marketing-hatted heads around. Suz also asks his opinion about how open to be about your personal life in the social web and what's next on the social media horizon. The future is plastics. No, wait! It's Facebook Connect. Hear why on this detailed episode where Justin's breadth of social media marketing experience is eclipsed only by his amazing ability to explain these complex issues (think "opportunities") beautifully.



This program is brought to you by PersonalLifeMedia.com

[music and commercials]

Susan Bratton: Welcome to DishyMix. I’m your host, Susan Bratton, and on today’s show you’re going to get to meet somebody I’ve admired for quite a while: Justin Smith.

Justin is the head of product at a hot new start-up, called Water Cooler, but I discovered Justin, because he is the editor of a blog – the largest blog serving the social media application developer world, called ‘Inside FaceBook’. The thing that I found out about Justin is that he is the author of ‘The FaceBook Marketing Bible’. I bought it. It is an e-book, it is fantastic, and I have Justin on the show to share all his best tips with us today.

So, we are going to talk about the power of the WaterCooler. We are going to talk about the ‘apps’ versus widgets smack-down. We are going to talk about the beauty of e-books and that whole world, and hear from Justin about graphing social pattern.

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Justin Smith: WaterCooler is a developer of distributed social applications for consumers of entertainment, primarily in the TV and sports categories. What we have done is we have built a network of applications that run on social networks.

[music divider]

Justin Smith: Within each community, there definitely is the ability to access content created by fans -- no matter which social network they are on.

[music divider]

Justin Smith: And on the whole, having users’ real friends talking about your creative is a type of engagement that is generally hard to get, so this provides a more compelling way do that than almost anywhere else.

[music divider]

Justin Smith: People discover from their friends new things that they like. Showing a friend’s face next to a new product or service, can be a pretty powerful idea; so if you became a fan of Apple, your friends might see that news-feed later tonight or tomorrow, and could then click on that news-feed and in turn their friends would see the news that they became a fan, and so forth.

[music divider]

There can be a rapid spread of news about becoming a fan of a brand, through the news-feed, which makes it pretty powerful.

[music divider]

Susan Bratton: Please, welcome Justin on today’s show. Hey, Justin!

Justin Smith: Hey, Susan, it is great to be with you. Thanks so much for having me.

Susan Bratton: It is my pleasure. It took us a couple of months to get this booked. You are a busy guy: you are running a blog, you are the author of a book that you update frequently, and you are a Head of Product at WaterCooler. Do you have time for a girlfriend?

Justin Smith: [laughing] Actually, I do. They are busy days these days, but all of them are really exciting and I am just excited to be working on everything that I am doing right now.

Susan Bratton: Well, you are like a kid in a candy shop with all these great things. You are a social media lover, for sure. Tell us a bout WaterCooler – it is such a great name for a company. You are actually one of the companies that are making good money in the world of social media marketing. Describe it a little bit.

Justin Smith: Sure. WaterCooler is a developer of distributed social applications for consumers of entertainment, primarily in the TV and sports categories. What we have done is we have built a network of applications that run on social networks, primarily on FaceBook, MySpace, Hi5, Bebo, and so forth – the biggest, and the continually growing ones in the world.

We have enabled fans of shows and teams within each of those social networks to express themselves, share their passions with their friends, play casual games with their friends, and, in general, make their fan experience a lot more social.

Susan Bratton: Give me a really good example. Give me one of your best examples of entertainment application.

Justin Smith: Sure. Fore example, here in San Francisco, many folks are fans of the San Francisco Giants – a major baseball team.

We provide applications on social networks that allow fans of the Giants to get ready for the game by posting ‘smack-talk’ on their friends’ walls on FaceBook in the days leading up to the game. When the Giants win, which is hopefully more often than not these days, they will get to post the scoreboard to their own profile page and invite their friends to come to take a look at it. Therefore, we really provide the context for social interaction on sports in ways that have not been possible before, when just reading an article online.

Susan Bratton: What I understood while reading about WaterCooler was that, because you make applications which work with multiple online services, there was some way that -- as a fan of, let’s just say, the San Francisco Giants -- I would be able to connect with my friends, whether they were on MySpace, FaceBook, Friendster, Hi5, or Bebo. If I wanted to smack-talk on five social networks that I could talk to all of them with this one application. Is that true or is it that you need to be in the one thing to work with it?

Justin Smith: Within each community, there is definitely the ability to access content created by fans, no matter which social network they are on. For example, if you are a Giants fan on MySpace, you could create trivia questions, a quiz, and so forth, which could then be played and enjoyed by fans on others social network, like FaceBook or Hi5. But because of the way that the communication channels work within any social network – they are limited to communicating to users of that network itself, obviously, even when using applications, you are still only able to send FaceBook messages to other FaceBook users.

Susan Bratton: Yeah, exactly. When is that going to change, so that I can just talk to everybody all at one time?

Justin Smith: [laughing] That is too hard to tell right now.

Susan Bratton: Oh, come on! You are the guy that would know the answer, aren’t you? [laughing]

Justin Smith: [laughing] Definitely we do enjoy providing applications that allow fans to connect in the community fashion, but each of the social networks has built its’ own communication channels, primarily for communicating with other users of the site.

Susan Bratton: Yeah. Well, I am looking forward to the day when that changes.

Justin Smith: [laughing]

Susan Bratton: You are Head of Product at WaterCooler. What does that really mean?

Justin Smith: That means that I work on product management and product strategy here. We are continually building our applications on additional social networks, and continually evaluating the future of the social lab, and the distribution of applications across increasing number of websites, which are thinking of themselves as social platforms, or at least as platforms for third party applications to integrate with, in general.

My job is continually evaluating those, making sure that we are building our support for users, and creating value for users in a way that is best for them, depending on the platform that they are on.

Susan Bratton: You are a computer systems engineer, is that right?

Justin Smith: Yes, that was the program that I completed at Stanford. It was Electro-Engineering and Computer Science Degree -- half and half.

Susan Bratton: I want to ask you another question about WaterCooler and then I want to move on to FaceBook and ‘The FaceBook Marketing Bible’.

If I were a brand -- let’s say Mountain Dew, as an example -- and I wanted to be involved in WaterCooler, and I wanted to reach certain sports fans. This might not be a good example, so you can change it f you want to, but let’s just say I wanted to sponsor skateboarding stuff and there is a skateboarding application. How do I play in that?

Justin Smith: There are a lot of different ways. What we are trying to do is to provide ways for brands to create an integrated experience that is deeper than they can get from working purely through a banner ad or through some other, more traditional marketing channels. For example, one of the things that we have done recently, is we have provided ways for advertisers to integrate with various features within our fan applications. For instance, by sponsoring trivia or by getting their brand identity and their messaging inside the trivia application, in the context of the fans’ natural experience, as opposed to just providing a banner ad off to the side.

In general, applications provide opportunities for deeper integrations in the natural things that users enjoy doing in the social networking platforms that they use every day, as opposed to trying to create an interrupting message that sits to the side of the content that the user is most interested in.

Susan Bratton: This is the perfect segue to talk about FaceBook and marketing, I think. Your book is called ‘The FaceBook Marketing Bible’, it is $29.95, it is an e-book that you download, and I noticed when I bought it, that I have received a couple of upgrades, or updates, since I bought it. How often do you update the book and how long is my subscription going to last?

Now, mine is going to last forever after this interview – is that correct, Justin? I would like the ‘forever’ FaceBook Bible. [cheekily]

Justin Smith: Without a doubt.

Susan Bratton: Oh, good.

Justin Smith: I update the Bible monthly, because there are a lot of things that change almost on a daily basis; certainly there are a lot of things that are changing in the FaceBook world on a month-to-month basis. As you probably know, FaceBook is going through a major re-design of the site, which they have been through XX for several months now; a process that has taken a lot longer based on feedback from both: the application developers and users, who have responded in different ways to the changes that FaceBook has made. The Bible itself is available in two versions: one just through a purchase, and second through a subscription, so if you are interested in staying up to date with the changes that occur on a month-to-month basis, that is available for a slightly higher price.

Susan Bratton: And what is that price?

Justin Smith: It is $10 more.

Susan Bratton: Is it $39.95?

Justin Smith: The base is $39.95.

Susan Bratton: That must be what I bought.

Justin Smith: $49 is for the updates.

Susan Bratton: Ok, got it.

You have been nice enough to offer two of ‘The FaceBook Marketing Bibles’ for me to give to DishyMix Fan Club. It is only fitting that my Fan Club is on FaceBook. All you have to do if you would like to have one of the two copies that Justin is allowing me to give away for free, is to write a really good post on the DishyMix FaceBook Fan Club, and I will select two, and Justin will send you your free subscription. You have to type the DishyMix in the search box on FaceBook to find me – DishyMix all in one word.

Going to ‘The FaceBook Marketing Bible’ -- you have broken this up into the following three big categories: tools for guerrilla marketers, tools for advertisers, and tools for application developers. I really want to talk at a higher level about what you see working well in the world of tools for advertisers. Then I would love for you to give me just a couple of little nuggets for guerrilla marketers, like the brand called ‘You’ -- for the people who are out there, not with a big corporate high-rocky behind them; a couple of new things they might not know about, that they could leverage. I would like to satisfy both worlds, if we can.

Let’s start with the big marketers. What is really working? What do you like that FaceBook offers today?

Justin Smith: FaceBook has been actually adding some innovative ad units for big advertisers and big marketers on the re-designed version of the home page. You may remember that, in the past, they only allowed for advertisements on the sides of some pages on the site, but with the re-designed version of the site, they have added both banner ads on almost every page, and integrated ads on the home page.

Integrated ads are interesting, because they create new opportunities for engagement that had not existed in the past. One specific example of that would be a new video-ad unit that FaceBook has created on the home page, which allows for users to comment on the video on the home page itself, and those comments are visible next to the video to that user’s friends.

For example, one recent ad that I saw this weekend, was for a trailer for the new movie ‘Choke’, which I have not seen, but I had two friends who commented on the video saying: “This is a great movie”, or “This is a great trailer, you should check it out.” After seeing my friends comment on the ad in that way, I felt much more interested in actually viewing the trailer and spending three minutes watching this video.

That is really a new type of opportunity that has not existed on the Web before: advertisers can place a creative in places that can be enhanced by friends talking about the creative in a way that is visible to that user’s social network, really increasing the attractiveness of the unit.

Susan Bratton: One of the things that I like about that is that not every advertiser is ready to create a group or a fan page -- or any kind of a custom page for their brand. They might not be ready for the maintenance, and the love, and the daily care that requires, so if you are still involved in, or you have to work in more of a campaign mentality, this is actually a good product for you.

Justin Smith: Yes, that is exactly right. Some of the more traditional tactics that marketers have employed on FaceBook meant really getting involved with your users and spending a lot of time maintaining or engaging in conversations with people who may have different things to say about you. With this unit, there is definitely less maintenance involved. You do run the risk of people saying negative things about your creative in case they don’t like it, but that’s just part of the ball game.

Susan Bratton: Right, and as marketers we understand that we run that risk. No matter what, our creative will be criticized by someone and it is happening online all the time anyway. We cannot stop it, so we must embrace it and take our lumps, and in reality it makes us more authentic to be able to live through those things.

Justin Smith: And on the whole, having users’ real friends talking about your creative, is a type of engagement and is generally hard to get.

Susan Bratton: That is right.

Justin Smith: So this provides a more compelling way to do that than almost anywhere else.

Susan Bratton: What about things like sponsored FaceBook groups or others? What do you think are some of the newest tools for advertisers that you are most excited about?

Justin Smith: FaceBook is actually moving away from the sponsored group model and they are moving more towards pages. These are business listings within FaceBook, that users can express affiliations with by calling themselves fans of it. You have probably become fans of several brands – most of your users have probably become fans of several brands themselves.

FaceBook is basically building a net product around driving traffic to those pages. Most of the news-feed ad products, which they are selling these days, are either direct links to those FaceBook pages, which, once users’ become fans of your page, provide a mechanism for you to keep fans of your page up to date through messages, and so forth.

They also have a feature called ‘recommendations’. They will essentially let you to tick a check-box when placing your news-feed ad, allowing them to say: “Hey, Justin, your friend, Susan, has now become a fan of Apple. Check out the Apple Fan Page and become a fan yourself.” Effectively, using your friends as endorsements of these pages, FaceBook is able to increase the conversion rate of users becoming affiliated with your brand.

Susan Bratton: That was a little confusing for me.

Justin Smith: Oh, ok!

Susan Bratton: Can you describe it again, and describe it from a consumer’s perspective?

Justin Smith: Sure. One of the type of ads that FaceBook places in the news-feed, are sponsored items.

Susan Bratton: I have seen those.

Justin Smith: For example: “Check out Blockbuster movie rentals,” and so forth.

Susan Bratton: Yes.

Justin Smith: That is pretty akin to many traditional types of ads we have seen in the past. They recall action, they are probably CPA priced, and so forth. One of the things that FaceBook has done to increase the conversion rate is to allow advertisers to let FaceBook to show your friends’ face and name next to that ad, when your friend has previously interacted with that ad.

Susan Bratton: Right. “Your friend, Justin Smith, is part of the Visa Small Business Network.”

Justin Smith: Exactly.

Susan Bratton: Got it! I have seen those.

Justin Smith: Right. There has been some discussion around that, because it is a new paradigm of thinking in terms of automatically using friends’ actions on FaceBook as an implied endorsement for them.

Susan Bratton: How is it going over?

Justin Smith: Well, overall I think it has gone fine, but obviously there are some folks who have expressed discontent about their face showing up next to something that they were not entirely aware of that they were going to show up next to.

Susan Bratton: I am surprised it is going to fly.

Justin Smith: Actually, it has done pretty well so far. FaceBook have done a good job of putting privacy options available, so if you do not want to appear next to ads, you can select your privacy settings to not ever do that for you.

Susan Bratton: Ok.

Justin Smith: But it has increased the conversion rate significantly, I am guessing which is why it still exists.

Susan Bratton: Well, because you are familiar with their face, so you notice the ad. It is the familiarity.

Justin Smith: Many people discover new things that they like from their friends, so showing a friend’s face next to a new product or service can be a pretty powerful idea.

Susan Bratton: And our brains are naturally associated to recognise the patterns of our friends’ faces.

Justin Smith: Yes, absolutely.

Susan Bratton: That makes a lot of sense.

Justin Smith: It is an interesting way of increasing engagement this way -- seeing that your friends have already chosen to participate in that.

Susan Bratton: I like it. So there are a lot of things that I have seen but was not completely aware of or I was not completely groking them, and you have brought them into focus for me, and I am sure for a lot of our listeners. We are on there, busy doing our thing, those things flow by us, and it is good to know that: ”Oh, wait, we could actually use these in a campaign!” I get it.

I want to go to a commercial break and when I come back I would love for you to fill us in on a couple of tips for all of us who are more on a guerrilla marketer’s side, who do not have big marketing budgets, but still want to leverage social media and FaceBook. We are going to take a short break to thank our sponsors.

When we come back, we are going to talk a little bit more with Justin Smith. Justin is the author of ‘Inside FaceBook’, which is the largest blog about social media applications, et cetera, and, of course, he is the author of the ‘The FaceBook Marketing Bible’. You can get a copy for free if you are one of the two lucky posters on the DishyMix FaceBook Fan Club. I am your host, Susan Bratton, and we will be right back after this sponsor break.

[commercial break with music]

Susan Bratton: We are back and we are with Justin Smith. We are talking about the ‘FaceBook Marketing Bible’ and Justin is just about to give us some of the latest changes that FaceBook has made that we might leverage if we are the brand called You.

Justin Smith: There are a lot of things going on FaceBook right now for guerrilla marketers. One of the biggest changes that we have seen over the course of the last year -- at least several months and up to a year – has been the shift from groups to pages, and FaceBook providing more tools for marketers through the pages product, as opposed to the groups product. One of the most common questions that I get from guerrilla marketers is: “How can I get started? How can I get the word out? How can I make sure that once someone joins my page or group that I am able to leverage that into a relationship that is valuable over the long run?”

One of the original limitations of groups was that it provided very limited messaging capabilities. Therefore, if you wanted to invite your friends to the group or to send a message to the group, there were pretty strict caps on that. I think you could only invite a few friends.

Susan Bratton: 19 at a time. [laughing]

Justin Smith: Right. Group owners could only message a few hundred, and I think it changed over time to up to a 1,000. That has recently changed, and they are continually tweaking that.

However, FaceBook’s real intentions for pages is that they will be tool. They will be able to be used by social media marketers to regularly engage FaceBook users in a way that is more ingrained with what they do on a daily basis on FaceBook. The things that pages allow are updates, which are regular messages that page owners can send. They also create analytic tools for page owners to be able to measure the effectiveness of those messages. For example, if you sent a message one day and a different one the next week, you can see the conversion rate, the traffic, how many folks spread that message to their friends, and so forth.

FaceBook does not publish any official numbers on how much different types of feed items get published through the news-feed, which is FaceBook system of sharing what you do on FaceBook with your friends. In my observations I have definitely seen that page activity. These stories get published a lot more, because FaceBook wants to become a more important place for marketers to spread the word, and so they are basically giving more love to marketers through the increased visibility of page-related feed activity.

Susan Bratton: That is important. What does it cost for you to build your own page in FaceBook?

Justin Smith: Oh. FaceBook does not charge for that at all.

Susan Bratton: Ok.

Justin Smith: FaceBook lets anyone create a page. The one caveat is that you cannot create a page for a brand, which you are not the trademark owner.

Susan Bratton: Sure.

Justin Smith: For example, Coke could have claimed your Coke page if you created one today. FaceBook intends to make money by charging you to drive more traffic to your page if you want to up the speed with which you are marketing within FaceBook.

Susan Bratton: And how do you up the speed within FaceBook to get more people to visit your page? Do you become a member or a fan? What is the connection on a page? Do you join?

Justin Smith: [laughing] You choose to become a fan of the page, which is a pretty general term. That message can be propagated on both: your profile page, where it appears in your menu feed, which is now the low field in the new design. That message also goes out to your friends’ through their news-feeds, so if you became a fan of Apple, your friends might see that news-feed later tonight or tomorrow, and could then click on that news-feed and in turn their friends would see the news that they became a fan, and so forth.

There can be a rapid spread of news about becoming a fan of a brand, through the news-feed, which makes it pretty powerful. The advertising products that FaceBook makes available basically accelerate that -- they get you in front of more people, so that more fans that you would not have access to, because they were not friends with the people that saw your news-feed item, would be able to join. That is just increasing the spread of your page within FaceBook.

Susan Bratton: And, do you think that is the best way to run an ad campaign, even if it is a limited one based on certain keywords and thing like that, to get visibility for your page?

Justin Smith: That is definitely an important way of doing it. Obviously, there is more that brand marketers can do with pages that could enhance the engagement that users can have with their page. For example, there are many application developers who have created applications that can live on pages. If you are a band or a promoter, you might want to get an application that allows users to listen to music right on your page. There are various applications in the application directory that, depending on the nature of your page, might make sense for creating an increased engagement.

As a page owner, if you so choose, you can also create those applications to provide enhanced functionality. If you are a bigger advertiser, that might make sense to create, for example, a specific contest application or just provide additional functionality that might not be available by default.

FaceBook did create several built-in features for pages, like video, photos, walls, and so forth -- all the standard social networking features that will allow users to engage with your page and when users do that, the news of their interaction with your page will spread to their friends. Some page owners choose not to turn on many of those modules, because they do not want to monitor them, since someone might say something they might not like, but by turning them on, you enable message about your interaction with your page to spread a lot more.

Susan Bratton: That makes a lot of sense. You gave me a nice segues as well. We were talking about applications and widgets. The reason I called it a smack-down application versus widget smack-down, was because I think there is a dark side to building FaceBook 'apps' and widgets, and it is exactly what you are probably going through right now with ‘The FaceBook Marketing Bible’. You build an application or a widget, then FaceBook changes their platform, then you are going to write your book again, and we have to fix our widgets on our applications, correct? [laughing]

Justin Smith: Hence the need for updates. [laughing]

Susan Bratton: [laughing] You must buy the subscription version of ‘The FaceBook Marketing Bible’ – just one copy is not going to do it.

Justin Smith: [laughing]

Susan Bratton: That is exactly as somebody has recently said to me! I built a multi-podcast player widget and we built it with the Gigea platform for PersonalLifeMedia. A week, or maybe a month after we launched the widget, FaceBook changed and the widget does not look right in the application any more. Aghrr! So I think the rule of thumb is that as much money as you spend developing an ‘app’, you are going to have to spend as much maintaining it. Do you agree or disagree with me on that?

Justin Smith: No, absolutely not. We are still in the early stages of things and the APIs, the features, and the functionality that are available for folks that are building applications, are changing on a regular basis. If you are a marketer who is planning on engaging users much more deeply through the use of an applications, you should definitely be prepared to update it for the course of the next several months.

Maybe allocate 30, 40, or 50 percent of your budget to learning, based on how things have gone so far and fixing things that have changed based on FaceBook’s continually evolving platform. Hopefully, that will stabilise after the re-design is completed in a few weeks.

Susan Bratton: It will not.

Justin Smith: [laughing]

Susan Bratton: It is not going to stabilise and once you have launched your widget you realise that the UI is not quite right or people do not quite get how to use it, or you think of those great improvements. So yes, at least 50 percent of your budget. [laughing]

Justin Smith: Just like any campaign or project, you will definitely learn a lot. Especially, if it is one of your first projects, you will learn a lot; you will see what works well and oftentimes it may be the simplest thing that you thought up; some of the more complicated things may not work as well.

Susan Bratton: There is one thing I would like you to do for us: explain the difference between an application and a widget, just so that we have that clear.

Justin Smith: I think there is a little bit different terminology, depending on whom you ask. But I have a pretty clear difference between the two. An application consists of a couple of different parts, one of which is the profile page integration, which is a box on a user’s profile page -- it looks a lot like a widget on any other website. It is a small, generally lightly functioning area, which is slightly customizable.

Basic applications and other applications, like MySpace or Hi5 or Bebo, and so forth, also provide a so-called ‘canvas page’. It is essentially a full page, a clean slate, where FaceBook only provides the header and the footer, and the application developer can provide all the functionality in-between those two. That is where users generally go when they click on application profile boxes on FaceBook profile pages. They go into this deeper experience, which I call the ‘canvas page’, which is really where the richness and the depth of applications exist.

Generally, a widget on a website would link you off to a different website, where the destination or the homepage of that marketer would exist. Within FaceBook, applications provide a way for deeper interactions within FaceBook itself, as opposed to jumping off to another website. Does that make sense?

Susan Bratton: It does, and, I think it is also helpful to understand those two things. It has also been explained to me that a widget is a piece of code that can work across many platforms and an application might be a piece of code, which only works for a particular platform. What do you think of that?

Justin Smith: Yes, that is exactly right, depending on the technology that you use to build the widget. On the web, many widgets are built in Flash, which allows them to live on many different websites, because it is rather easy to add a Flash widgets to a page. On FaceBook, you have to build it using FaceBook’s language, which is called FBML – a FaceBook Mark-up Language.

Susan Bratton: A FaceBook Mark-up Language. Right, got it.

Justin Smith: Yes, exactly. Which is basically their version of HTML that works within FaceBook. Therefore, you are right, if you would like to build within FaceBook or most of other social networking platforms, you will have to write in a different language, which will require new development.

Susan Bratton: So I think that is another thing to talk about here, and that is the FaceBook application developers. You have RockU and Slide, The Social Gaming Network and Xanga, Flickster, Chain, and Water Cooler – you are right in there, Project Agape, SA Ventures and iLike – those are currently the top ten, according to Adnomics, which I got off TechCrunch. Those are the top ten application developers or social application development companies, right?

Justin Smith: Sure.

Susan Bratton: They are different; there are different flavours in there. Some of them just build apps, others have ad networks, and so they are selling the media in the applications to advertisers, right?

Justin Smith: That is right.

Susan Bratton: Are there any other buckets? How would you divide that world, if you had to ‘bucketize’ it?

Justin Smith: It is a really big world. There are over 40,000 applications that have been created for the FaceBook platform, and they vary greatly. I think that you are right on in naming a couple of the key categories. I think applications that provide really rich media experiences are one really interesting category of applications. Water Cooler definitely falls into that bucket, as does iLike and Flickster, which serve music and movie communities respectively. What those really do is provide richer experience around the media and the entertainment that people enjoy in the context of their social network.

Each of those companies generally makes money in a variety of ways, but more or less falling into category of sponsorships or advertising. For example, at WaterCooler, we provide advertisers with various opportunities to advertise within our applications or to sponsor or integrate with different elements of the applications, as do the others. I think you can think about those as just deeper social entertainment experiences, that really could not exist on a website, because your friends do not live there.

Moving onto a different bucket, I think ‘social games’ is a pretty interesting bucket as well.

Susan Bratton: Yeah. That is the Xangas of the world, correct?

Justin Smith: Yes, exactly. Xanga, SGN and PlayFish are three of the biggest companies who have built some of the most successful social games today. These are games that may or may not be able to exist outside of the social networks, but are more fun when played with people that you are actually friends with.

Susan Bratton: Like the Poker app is a big one.

Justin Smith: Yes. Texas Hold'em is one of the biggest games that was created by Xanga. Another interesting game is ‘FriendsForSale’ that was created by a company called Serious Business, which basically makes a game out of buying and selling your friends – it is a way to flirt and tell people that you are thinking about them. There have been a lot of interesting innovations by game developers creating new types of game-like experiences within social networks.

Related to that, I would say, are content-sharing applications. These are ones like BumperSticker, SuperPoke, FunMore, or FunSpace, which basically allow you to find content that you think is funny or interesting, and forward it to your friends. A lot of email these days, even 15 years after the growth of the Internet in the US, is still forwarding content to your friends and family.

Susan Bratton: Especially from your parents.

Justin Smith: [laughing] Exactly!

Susan Bratton: Do your parents totally send you that stuff all the time?

Justin Smith: You know, my parents are definitely the number one forwarders in my inbox. Maybe that is true for other people, I don’t know.

Susan Bratton: [laughing] I think it is.

Justin Smith: [laughing]

Susan Bratton: Everybody who is listening, is nodding. [laughing]

Justin Smith: [laughing] Yeah. That is actually something that is still may be popular on any communication platform ever. As FaceBook becomes used by more segments of our population, we might see this continually used for that purpose as well.

Susan Bratton: What other big buckets are there? Then I have a couple of other questions I want to move on.

Justin Smith: There are other buckets, which are still being defined. I think that there are some business finance applications -- the VISA Business Network was an interesting one that you mentioned, where enterprises are seeing if there are ways that they can get value from building applications on social networks.

There are some social-lending applications that are happening. There are some social travel applications, like find friends' recommended beaches, or cult-surfing. All those types of things. There are a lot of dating applications, like HotOrNot and 2PointO within FaceBook. Those types of things will always be popular.

Susan Bratton: Got it. What do you think it costs for a marketer to build their own application? Let’s just say they thought they could create something as fabulous as Texas Hold’em, or HotOrNot, or SuperPoke, or whatever it would be. What would that cost?

Justin Smith: That is a big question. I think it really depends on the specifics of the campaign. I think that it is probably unrealistic for most marketers to expect that their applications can be as successful as Texas Hold’em or FriendsForSale, which have millions of users and have existed for many months or years. However, I do think it is possible to create applications that allow deep engagement for a larger number of users than is possible anywhere else.

Depending on the scope of your application, I would expect that simple applications, like any other web-development project, could run from tens of thousands, potentially even into the hundreds, depending on how complex you want it to get. I am just guessing here, because I have not built any applications for clients in that way.

Susan Bratton: Ok. This a personal question. It is a question that I want to ask you from a personal perspective. It is not about you personally. Although, it is DishyMix and I tend to do that. [laughing]

What advice do you give about managing ones personal online reputation? What is just your perspective on that?

Justin Smith: Many people are afraid that with the advent of the Internet, we are becoming an increasingly anonymous society, and there is the loss of personal connection, and so forth. I actually think the opposite. I think the creation of social networking platforms, like FaceBook, allow for information-sharing between people in much more powerful ways than have ever existed before.

I think that is really powerful, great, and good for society. In general, I tend to have the opinion that it is a transparent world and people are going to know you for who you are even if you try to hide it. FaceBook makes it easy to learn more about people, to see how they interact with their real friends, and to see the types of ways that they express themselves by the types of things that they put on their page, which represents them to others. Therefore, I think that just being authentic, honest, and being careful not to say anything that you would not normally say in public or in a place that a big audience would find out – these are the common-sense rules that I try to live by.

Susan Bratton: You have spoken at a conference called Graphing Social Patterns. What does that mean?

Justin Smith: [laughing] Graphing Social Patterns is a conference created by my friend, David McClure, who…

Susan Bratton: 500 hats.

Justin Smith: Absolutely. Yes, a great and super-smart guy.

His conference is essentially dedicated to trying to understand what is happening as all of these social networks are shifting from just becoming websites that you visit, to platforms, where really advanced eco-systems are developing. As FaceBook has shifted from just being a website to a platform, there have been new types of people that have tried to figure out how to work in this world: there are entrepreneurs who are building applications and business; there are developers who are serving agencies and marketers; there are marketers who are trying to figure out how this could be a way to engage people in new and powerful ways that are not possible elsewhere.

So this conference is basically trying to get everyone together to talk about what we should do, now that these social platforms are existing, growing, and are becoming increasingly common and prevalent. What are the best practices? What makes sense? How are people using this to achieve their goals? It is still early in the game, so conferences area a great way to just meet other folks who are trying things and to see what is working and what is not.

Susan Bratton: Is that one of your favourite conferences?

Justin Smith: Absolutely yes. I have been in both of them and they were both great.

Susan Bratton: This is a big question. Answer how you will, because we are out of time, but I cannot get enough of you, Justin. You are so smart, you explain things well, stuff I love, so we are going a little long. I am testing the patience of DishyMix listeners. So, what is next on the social media horizon?

Justin Smith: I think one of the bigger trends that we are seeing right now is the creation of services that will allow any website to become increasingly social, by plugging in to social networking platforms.

Susan Bratton: We have had Gina Bianchini from Ning a couple of episodes ago just to talk about that.

Justin Smith: Right. FaceBook has created a new initiative called FaceBook Connect, which is an interesting way for website owners to integrate FaceBook accounts into their websites. For example, if you ran a blog, you could enable FaceBook Connect authentication, so that when a person comments on your blog, their name and image appears from their FaceBook account, therefore your users identity is increasingly tied to wherever they participate across the Web.

This actually provides unique, new and interesting opportunities for any old website to become a social place. Users then might be able to use FaceBook Connect to invite their friends to that website or blog to participate and to interact in a way that normally would have just not been social at all -- it would not have integrated in a social network in any meaningful way; it would have just been this place that they book-marked, maybe they sent a link to their friends via email, and so forth.

Therefore, one of the biggest trends that we are seeing is the increased socialization of the Web, or however you would like to articulate that. Website are increasingly becoming integrated with your social network and the news-feed that exist within FaceBook, is not only going to talk about what you are doing within FaceBook, but what you are doing around the Web. Because all those websites are going to be plugging back to FaceBook and your identity is going to be unified. The feed is going to become the way that you find out what your friends are doing anywhere online. I think it is an interesting trend. It is a new way of thinking about information, and it really puts FaceBook and other social networking platforms in a powerful position, because they therefore get to control the distribution of that information.

Susan Bratton: Have you seen that product little technology called AlertThingy?

Justin Smith: I have heard of it, but I am not incredibly familiar with it.

Susan Bratton: This is a random thing I discovered somewhere. It is like FriendFeed where it aggregates a bunch of your feeds from all the different things that you do into one news-feed. So in FaceBook, which is just FaceBook news-feed now, you are saying that that news-feed will start incorporating all of these other things that we are doing on the Web. Well, FriendFeed is kind of doing it now, and AlertThingy just lets you pop it up above your browser in a transparent layer, so that you can see little notifications. For example, when you use Outlook on your PC and you can see clear email notifications as your emails come in, it just puts a little layer on top of your window. Do you know what I mean? It has like a translucent layer feed.

Justin Smith: Uhm.

Susan Bratton: What do you think about FaceBook – are they going to create some kind of an application so that you do not have your browser window open to FaceBook to watch your feed all the time?

Justin Smith: I think so. I think they probably will. I think FaceBook will want to make its’ information available in an increasing number of platforms. They have created the FaceBook for iPhone application, which allows you to get your FaceBook feed on your mobile phone and I would expect them to increasingly create new ways of accessing that information.

I think you are exactly right in pointing out that other services like FriendFeed are doing similar things of aggregating your life online into one stream that can be easily digested by your friends in a way that provides them with a lot of information that they would not have access to before. Because you cannot check all friends’ Flicker and YouTube accounts on a daily basis, that is just way too much work.

Susan Bratton: Yes, we already spend too much time online, right? [laughing]

Justin Smith: Absolutely, we need to get outside more.

Susan Bratton: More outside. This is my last question, because it is a fascinating one for me. I want to know some of the most interesting people that you follow in the social media or the advertising world. Who do you really track, watch, and learn from?

Justin Smith: That is a great question. I just try to stay up to date on what all the entrepreneurs in the space are doing. I follow many entrepreneurs’ Twitter accounts, because a lot of tacky folks use Twitter to share what they are doing on a regular basis. Also folks on a FaceBook platform team, folks on a FriendFeed team, and other people who are building social media services -- I just follow all them together, trying to stay abreast of all the things that are happening in the space.

Obviously, there are beginning to be some great analysts in the space: Jeremiah Owyang is a friend of mine who tracks social media for Forrester these days and does a really good job of helping businesses stay apprised of the ways that social media may be affecting different core-processes within an organization. That is really interesting to me as well; In general, I really like observing what my non start-up friends are doing on social networks -- I think that is the best indicator of the future.

Susan Bratton: Where did you grow up?

Justin Smith: I grew up in South Carolina. I came to California for College and never left.

Susan Bratton: Good, we are glad you are here. You are bringing more brilliance to the Bay Area, clearly. [laughing]

Justin Smith: Well, thanks a lot. It is really a fun place to be.

Susan Bratton: You are doing such an awesome job with your life, Justin. In a addition to your blog, your book, you are at a great Company. Thank you for telling us so much information and helping us get some traction. I think what needs to happen with this episode of DishyMix is we will have to listen to it in front of our browser on FaceBook, so we can see the things you were talking about. I guess I am just a visual person, but I think what we have here is like an audio tour of FaceBook for marketers. [laughing]

Justin Smith: Absolutely! That is a great idea. There are lots of things to explore within FaceBook and, hopefully, we have been able to touch on some of the most interesting ones.

Susan Bratton: I hope so. I think you surfaced some great stuff that really gelled for me today, so thank you for that.

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Again, I want to remind you if you are listening and you would like a copy of ‘The FaceBook Marketing Bible’, Justin has given me two to give away. Write me a really good post on the DishyMix Fan Club on FaceBook and I will give you one.

All right, Justin, thank you so much, it has been awesome to have you.

Justin Smith: Yes, thanks so much, Susan. It has been great being with you today.

Susan Bratton: Yes, we had a great time. I am your host, Susan Bratton. That was Justin Smith and it was terrific to spend time with you today. Thanks for the extra few minutes – I hope it was worthwhile for you. I will see you next week. Bye, bye.

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