Steve and his wife are expecting their first child. With this addition, they are in the market for a lightweight, but safe, child seat for their car. Steve doesn't know the first thing about child seats and is dreading the hours of researching and then searching on the Internet to find the appropriate one. Steve, like many fathers, is also fearful that he might, despite all of his diligent research, make a mistake. Making sure you provide the appropriate safety for your child can be stressful and at times overwhelming. The good news is that the majority of these purchase challenges, concerns, and unwanted stress will become things of the past with social media. Here's why.

On a search engine, if you entered "buying a baby seat" you are likely to receive a series of irrelevant search results and a bevy of sponsored ads. Not all of the search results are unrelated. Some will prove fruitful, but it may take some time-intensive trial and error before you wean the helpful results from the not so helpful results. Yet, as social commerce becomes more and more mainstream, when Steve performs a social search by entering the query—"buying a baby seat"—he will discover the following:

Steve respects the opinions of the 14 people who purchased the same seat, so he clicks to find out more, and gets the following information:

Steve can now confidently purchase the baby seat without the usual research, stress, and time required if he were starting his search from scratch. Once Steve starts to use the seat, he takes on a different role within the same social media conversation; he is actively using the product and can provide his own insight into features and benefits that the seat provides. Steve may notice that it's too easy for his child to undo one of the seat straps. Compelled, he may point this out to his network via a quick video example that may be relevant to his social network of friends. This then presents an opportunity for product improvement, which the manufacturer can act upon.

If the manufacturer's marketing team is listening and watching, then they will be able to quickly share this with the design and production team and hopefully get a quick resolution/improvement for future buyers. This is not only a benefit for the manufacturer, but a benefit to society as well, because future children will be much safer based on the quick advancements.

Correspondingly, just like his friends before him, if Steve finds features he really enjoys about the baby seat, he will feel compelled to write about them, since his friends with a similar purchase decision will benefit from his experience. When I worked at EarthLink, one of our key findings when working on referral incentives was that the main reason people recommended EarthLink was not for the incentive, but that they liked being viewed as the subject matter expert within their social graph. The same holds true in social media.

Steve and his wife eventually go on to have their second and third child, and their two sedans won't cut it anymore; he's in the market for a bigger vehicle. Having vowed to himself and his friends that he'd never own a minivan, he's considering an SUV or a crossover vehicle.

Steve is dreading the hours of searching on the Internet to find a vehicle that suits his needs. He's even dreading having to leave work early to visit the car dealerships to test-drive his selected vehicles and then the ensuing haggling process. Despite hours of research, Steve is also fearful that he may make a big purchase mistake when the moment comes. Again, most of these concerns are mitigated when we move to a social commerce model: Steve performs a search on his favorite social network—he types in "buying a car." Rather than receiving a series of irrelevant ads for car trader sites, he discovers the following:

Steve respects the opinions of the nine people who purchased the same vehicle, so he clicks to find out more, and gets the following information: "I test-drove Crossover X and Crossover Y. Crossover Y was the much better feel, and it was easier to get into the backseat. Coupled with the fact that it gets three more mph to the gallon, it was a no-brainer."

To further illustrate the importance of virulence today, a study conducted by online-market-research firm Marketing Evolution on marketing campaigns from adidas and video-game publisher Electronic Arts within MySpace found that 70 percent of the return on investment was the result of one consumer passing information to another virally. Social commerce is a referral program on steroids.

Karen (age 48) just received a birthday check from her mum for 470 euros. She feels like treating herself by buying something, but doesn't have anything particular in mind. Karen quickly taps into her social network to see what other people she respects (friends/peers) are buying and whether they like or dislike their choices.

Within five minutes, she decides to purchase an Apple iPad because her friend Sally bought one and loves it. The fact that Sally has an iPad and likes it assuaged Karen's fear of technology because Sally is even more of a technical neophyte than Karen. Knowing this about Sally drove 95 percent of Karen's decision process within minutes. This intimate knowledge of people within your social network is key, and is one main reason why reviews via social media have gone to the "next level" compared to other online reviews in the past.

The big social networks (Facebook, LinkedIn, Twitter, QQ, etc.) will eventually dominate this portion of Social Commerce. Sites like ThisNext, Kaboodle, WeShop, and WishPot helped push the adoption of this market opportunity by enabling buyers to quickly share their purchases and reviews with friends. These sites were designed for people to go to for ideas about what products and services they should be purchasing and using.

Suzy (age 34) has set aside a budget of £1400 to take a trip this year with her husband. The only thing she knows at this point: destination, South America. In the past, she would've performed a search on Google, which would have taken her to some helpful online travel agent sites (e.g., Travelzoo, TripAdvisor, GoAhead Tours, Lonely Planet, Orbitz, Priceline, Travelocity). She probably would've narrowed down her choices after hours of research. She would then begin the arduous task of finding the best deal for her flight, hotel, and so on.

As a result of social media, this process becomes much easier for Suzy. She simply goes to her social network of choice and searches for "South American Vacations." The results pop up: five of her friends have traveled to South America in the last year. Conveniently listed are their itineraries, hotels, and resorts, as well as prices and recommendations.

Suzy sees two of her friends both took a trip to Chile through GoAhead Tours and rated it highly. It's within her budget, and the same package is available. She quickly snatches it up before it's sold out. She saved hours of painstaking research and the fees of a travel agent.

If she only has 10 minutes before going to pick up the kids at day care, is her time better served scrolling through 400 reviews by people she doesn't know on a travel review site (some of which will be spam from the competing hotels), or is she better served looking at the recommendations from her friends? The time is much better spent with her friends' experience and recommendations. Social commerce gave her peace of mind and the anticipation of an enjoyable adventure. That is why TripAdvisor incorporated Facebook Connect into their site in 2010. Now you can see hotel reviews from your friends via TripAdvisor's connection with Facebook.

Listed alongside the qualitative reviews are certain data points for each friend: price, travel supplier, places recommended, day excursions, and so on.

We could continue with other examples, like trying to figure out what the trendiest online video game is for Christmas. This has several challenges; the first is trying to figure out what the it game is. The second is to determine if it is age appropriate for your child (e.g., sex, violence). Third, if it is the it game, the task of obtaining the game will be a challenge. Fortunately, social media lessens many of these worries, some of your early-adopter friends can show the way by providing insight into their purchase history and experiences. If a friend you trust bought the game for her child, that would be more insightful than trying to decipher the confusing game ratings for graphic and sexual content to determine if the product is age appropriate for your own child.

Social media has a much easier time tracking when the purchase is made online. It enables users to know where goods or services were purchased—which in turn may be a good indication that the item is in stock. This is done using cookie-based tracking that follows the user (if they opt in) as they traverse and transact on the Web. A cookie is a term used to describe a tiny piece of code that is placed in your Web browser.

What does this mean for brand marketing? Well, it means that companies and marketers better start spending more time listening to their customers and less time spending countless hours creating the next award-winning, but-no-customer-getting, 30-second television commercial. Consumers are taking ownership of brands, and their referral power is priceless.

Just as important as listening to the customer is acting on the information received. This entails all parts of the organization working more harmoniously than ever before—the speed of social media demands it. These certainly aren't new constructs, but in this new age, your brand will experience a quick death if these constructs aren't adhered to. The days of traditional brand marketing aren't necessarily dead; they're just taking on new forms.

Social Media increases efficiency by saving time as it eliminates multiple individual redundancies (MIR). This is obviously a tremendous benefit to the user, and it's mission critical for businesses to understand that this impacts almost everything they do from marketing to operations to manufacturing. As people increasingly look to social media for advice and recommendations, marketers need to make certain they are part of the consideration set. In order to accomplish this, companies need to create great products and services rather than rely on advertising campaigns to bail them out. When a transaction occurs, marketers need to encourage or give incentives for users to complete product and service reviews albeit good, bad, or indifferent. Companies that are able to encourage this information sharing from their consumers, via both online and offline, help water the seeds of viral success. Money to water these seeds will come from traditional advertising budgets (television, outdoor, radio) and will go directly into the consumers' pockets. This is another reason why consumers will take more ownership of the brands they associate with, and it makes the traditional referral model look like a dollhouse alongside the Taj Mahal.

Ken Robbins, founder of Digital Agency Response Mine Interactive, sums up the challenges and opportunities that individuals and companies face with social media:

Many may take umbrage with the two points or assumptions being made. One could make a good argument that people aren't going to want to share their purchase decisions. This is true; some will not. Others will share only certain purchase decisions and price points, while still others will share everything and anything. However, from an online buying perspective, the technology for this to occur is there, and as we have seen from the transparency of other social media usage, it's only a matter of time when purchases will be pushed to everyone who is willing. Not everyone will share, just like not everyone comments on TripAdvisor or edits on Wikipedia. However, as we've seen over the last few years, particularly with younger generations, people have an unbelievable willingness to share. That is why Facebook has over 400 million users.

The other piece that people will be concerned about is that buyers will be motivated to write a review. It's possible that a true tangible incentive may not be necessary, but what is certain is that more effort and marketing dollars will be used to implore customers to write a review of their product. This incentive model isn't anything new; when a hotel or airline asks you to fill out a suggestion card, it is usually with the hook of potentially winning a sweepstakes or free meal.

The hope is that incentives aren't necessary, but even if they are, that doesn't mean that the person will write a good review. This type of transparent review may not be for everyone, as some people like to remain anonymous, but that brings up another key point: All reviews don't necessarily need to be public to everyone—some may only feel comfortable posting reviews to their own network. All of this is a lot to digest for Generation X and beyond, but it's a way of life for the Generations born after 1980, as they have grown up in a transparent world.

We can see a dramatic shift in that 92 percent of consumers now cite Word of Mouth as the best source for product and brand information, up from 67 percent in 1977.^[79] That is one reason why in this book we say we've moved from Word-of-Mouth to World-of-Mouth marketing.

Other major societal benefits from social media will be made in the health care arena. 2008 survey results from online advertising agency iCrossing showed that 34 percent of Americans turn to social media for health research. While substantial, we are certain these numbers are even higher today. Twenty percent of the online health searchers went to Wikipedia for information. Other social networks were also used and the average age of people using social media for health-related questions was 37, whereas the average overall age for patients searching for health information was 44.^[80] It is not surprising that it is younger, but it does again show that social media users aren't all teenagers; it will be mainstream sooner than people expect. When health consumers turn to social media they are in a decision-mode process. Needs range from finding out costs for certain operations or medical devices to the reputation of a certain provider or doctor.

When engaged in face-to-face or phone conversation, it can be awkward or even rude to discuss medical conditions. Social media eliminates this awkwardness. A simple post like: "Has anyone ever had their tonsils removed? I've had a sharp pain in my throat for the last day. Let me know"; or not even asking the question but simply stating: "Burned my finger with boiling hot water—top of the tea kettle fell off" will often elicit such responses as:

After their physician, nurse, or pharmacist, people look within their network from those they trust for good advice on medical treatments and medications. In the iCrossing study, more than 60 percent list "Consumer Opinion Leader" as "extremely important" or "very important." Some even list the advice from their friends above that of their physician.^[81]

In the same study, 75 percent indicated that they use social media in health to "connect with other consumers to exchange information or obtain support"; 55 percent noted that the most important reason to use social media over other online sites is to get cost information for a procedure or medical equipment.^[82] Consumer-generated health content is increasing in both supply and demand. Society is benefiting from this shift. Perhaps the largest benefit to this will be seen outside of the United States where in some small towns the local physician is revered as a demigod. This is fine if that physician is altruistic at heart, but that is not always the case. Social media allows for an inexpensive and relevant second, third, and four hundredth medical opinion, especially in underdeveloped regions of the world.

Marketers struggling with idea ownership are not doing so entirely because of advances in social media or technology. One of the most successful marketing campaigns of all time nearly didn't get off the ground. Jared and his Subway weight-loss story did not come from the top down; rather, it came from the bottom up. Jared actually started the now famous diet on his own accord, long before receiving royalty payments from Subway. Jared's unique diet story made its way from a college campus newspaper to a savvy executive at an advertising firm. Jared was attending the University of Indiana at the time and the advertising executive sent an intern to Bloomington, Indiana, to track Jared down on campus.

Once Jared was found, the advertising executive and his agency pitched the idea to Subway. The marketing executives at Subway originally rejected the idea, but the ad agency and this particular executive were so convinced of the idea that they sold it to local franchisees, and the agency paid to run the spots out of its own pocket! Only after proven success did the marketing executives at Subway's headquarters relent. This turned out to have a happy ending, but how many such ideas have never seen the light of day?

In the Subway campaign, recall that Jared was an avid user of a company's product and service—in this case, low-fat submarine sandwiches. This is another reminder that executives and companies who want to excel need to be comfortable in knowing that not everything related to the brand will be owned by them; their customers are beginning to take ownership. This is a good thing, because straightforward and true stories resonate well with consumers, and this particular story has helped Subway overtake McDonald's as having the most restaurants in the United States.

The beauty of social media is that fewer of these great stories will remain hidden, and as a result, companies will benefit. One of the top-10 viral videos in 2008 was "Christian the Lion."^[83] This is a clip of two Australian men who raise a lion in the city of London. One year later they go to Africa to reunite in the wild with a giant hug (Remember, this is a lion!). This story was from 1969 and despite having a book published about it in 1971 (Broadway Books), prior to 2008 it was relatively unknown. Then along comes the social medium of YouTube and the story spreads globally in little time at all by using the film footage from 1969. Imagine, this incredible story would have only been known by a few until the advent of social media—what a shame! Ironically, it has come full circle, and a second book has been published on this story: A Lion Called Christian: The True Story of the Remarkable Bond between Two Friends and a Lion by Anthony Bourke, John Rendall, and George Adamson (March 10, 2009), and it is on Borders' Best Seller's Shelf! This is also an example of how social media can drive offline revenue in new forms as well.

Businesses, both large and small, have to realize that they no longer own relationships. Yet, when it comes to social media, many companies haven't shaken their old tried-and-true marketing models. Other companies quickly figured it out. Next, we discuss three companies that all had the same goal when they set out, but wound up experiencing different levels of success based on their strategies.

In 2007, Facebook introduced the ability for developers to make applications (tools/widgets that allow users to do everything from tracking a favorite sports team's scores to playing a game of tic-tac-toe against a friend in another city) to enhance the Facebook experience. When the application platform was originally introduced, three separate travel companies correctly surmised that people would want to input and track all the places in the world they had visited. Each company set out with different strategies resulting in various levels of success. The three companies were:

One of the top executives at ACME Travel had a relationship with someone at Facebook and was aware that Facebook was planning to open its application program interface (API) allowing any company to develop useful widgets within Facebook. For example, Delta Airlines could develop an application in which users could view upcoming flights on Facebook, or Crayola could have you fill out some simple questions and tell you what color crayon you most represent.

ACME Travel thought it would be helpful for the users to be able to easily track where they had traveled. The idea sprang from an employee who had invented an Excel spreadsheet that allowed you to check off boxes next to countries traveled. This spreadsheet was based on other people using maps tacked to a wall with a push pin for every place traveled.

The idea for the application was a good one because within the first few days, hundreds of thousands of Facebook users downloaded the application. Understanding also the braggadocian behavior of social media, ACME Travel set up the application so that people could send an alert to their friends whenever they traveled to a new city. So, if Kim went to Auckland, it would alert everyone in her network "Kim indicated she has traveled to Auckland within ACME's travel application."

ACME Travel was ecstatic at the success of their application; they estimated that the internal cost to build the application was $15,000, and they were receiving 50,000 downloads per day, which means they were capturing 50,000 names to put into their prospect database.^[84] To go into this particular aspect a bit further, the download process for Facebook applications doesn't require users to forfeit their e-mail addresses—yet ACME Travel made the decision to place an extra page in the middle of the download process indicating it was mandatory for users to supply name, mailing address, and e-mail address in order to use the application. About a week into the process, ACME received word from 20-something Craig Ulliott. Craig's belief was that the additional page during the application download process was cumbersome and would discourage many users who didn't want to disclose personal information to get the application, ultimately hurting the overall success of the application. ACME Travel pondered the suggestion from Ulliott and conceded that there probably were people they were turning off, but then again, they were getting 50,000 names on some good days, so things were going very nicely. Besides, they thought, this was the entire reason they were doing social media marketing: it was a carrot to get names for the database. Why should they fix something that wasn't broken?

Things continued successfully for ACME Travel for a few weeks. Meanwhile, Craig Ulliott wasn't your typical user; rather, he was a very established programmer. He liked the idea of the mousetrap that ACME Travel was offering, but he thought he could build a better one. So, he continued with his own vision; a very similar application called Where I've Been. Where I've Been was graphically more appealing and also contained some sexier pieces of flash programming that made it easier to click on a particular part of a map to indicate you'd traveled to a certain place. However, the key difference was that Craig didn't add the additional page during the download process that required users to enter their personal information. He simply used Facebook's standard two-step process. Here's what happened next.

Where I've Been quickly became one of the must-have applications and also the top-downloaded travel application. It was so successful that Craig was able to help form a seven-person company under the same name. With 800,000 active monthly users, Craig was attracting the attention of the big online travel agents like TripAdvisor, Priceline, and Travelzoo.

TripAdvisor was savvy enough to realize that an application like this would be an unbelievable marketing tool for their business. TripAdvisor began behind-the-scenes negotiations with Where I've Been. By this time, Craig had joined forces with an experienced and dynamic Internet Travel guru named Brian Harniman to head up his strategy. The asking price for Where I've Been was a little steeper than TripAdvisor had originally hoped. They had hoped that they would be dealing with some wet-behind-the-ears kid and get the application for a bargain.

They came within a whisker of buying the application for $3 million. So close, in fact, that a story was released. Then they did something very smart—they begged, borrowed, and made better. TripAdvisor pulled back, took a deep assessment, and calmly said we think we can do this better. Instead of investing $3 million, they decided to build their own application for a fraction of the cost. Now it's important to point out that TripAdvisor used two very good tactics. The first one was a prudent attempt to leverage an already proven and successful product application in Where I've Been.

On discovering the expensive asking price, TripAdvisor reassessed the situation and correctly decided there was enough opportunity for more than one company to succeed. With Facebook counting user growth in millions, TripAdvisor was hopeful that this type of travel application had not "jumped the shark." Jumping the shark is an Internet term for something that is past its prime or no longer in. According to Wikipedia the specific definition is as follows:

The term was taken from one of the later Happy Days episodes where Fonzie, leather jacket and all, attempts to jump a shark on water skis. It was not one of broadcast television's finer moments. The tech community eagerly snapped up this television term, and today it is more recognized in the Internet community for the moment that something goes past its prime. For instance, most MP3 players had a jump the shark moment when the iPod was first released.

Anyway, TripAdvisor moved forward with building a bigger, better version of Where I've Been. Within a month they released Cities I've Visited. They were smart to name it something very tangible and stick with cities. TripAdvisor leveraged Google Maps so travelers could place pins on the digital map just like many people do in their home or office on paper maps. Using Google Maps was smart in four ways:

That old adage that you can only have two out of the following—cheap, quick, or quality—doesn't hold true within social media because you can often leverage preexisting human capital or preexisting products and solutions. In this instance, TripAdvisor was doing both—they were leveraging the idea (human capital) that Where I've Been and ACME Travel had produced before them, and they were leveraging Google Maps (preexisting product). So, their cost investment was approximately $20,000. What they received in return is somewhat staggering. In April of 2009, TripAdvisor's application had 1,779,246 monthly active users, while Where I've Been had 885,577 monthly active users.^[86] In June of 2010 TripAdvisor's application had grown to 5,187,366 monthly active users, while Where I've Been was up to 1,031,902 monthly active users. Both were very successful—that's over 5 million people who actively interact with TripAdvisor's brand every month! Craig was able to help start a company due to the success of this one application as well. That is truly the power of social media.

We introduced the term active monthly users. This term was coined by Facebook in 2007 and is an important one. Historically, most tracking just dealt with pure volume. How many hits did you get on your website? Then it was determined that hits weren't really relevant since hits were tracking the number of times certain elements on a page were served up. If your website home page had several images and form fields and one person visited this site, the unique visit could equal 13 hits; this type of count is not too helpful. So, tracking progressed to visits; this wasn't very good either because it could be the same person coming back several times. The next logical step was to measure unique visitors.

Social media has changed the paradigm of tracking again. Originally, Facebook rated top applications by how many times they were downloaded, but downloads aren't necessarily relevant; what truly matters is how active the users are. If a user downloads the application and never returns, that's not very valuable to the creator of the application. If a million people download something but never use it, then in a sense it is worthless to both the user and to the creator. Or, if 500,000 people "like" your brand on Facebook, but never return to the page, comment, share, or post anything they may not be particularly valuable. This is why Facebook tracks most items by active users, which changes everything.

Having 12 million e-mail addresses in your database doesn't mean much if only 1,000 open and click on your e-mails. It's much more important to have 10,000 e-mails with 9,000 people opening and clicking. With social media, marketers are able to measure user activity and capture helpful information such as age, sex, education, hobbies, interests, and so on. This assists marketers in one-to-one conversations between companies and consumers.

Going one step further is just how powerful the social graph is. Take, for example, the 9,000 active people mentioned above. E-mail is generally a one-to-one conversation. If you have an e-mail that contains something particularly entertaining, then you could be lucky and those 9,000 people forward it on, and so forth. This is powerful, but not quite as effective as social media. The main reason is that the viralness of e-mail is really related to that one particular e-mail, whereas in social media people are constantly pushing content to their network. In e-mail it's an anomaly, whereas in social media it is inherent.

To showcase this point, in April 2009 EF Educational Tours had roughly 800 Twitter followers—people who actively want to know the latest news from EF Educational Tours. If you looked at the number of followers these 800 people had, then the social graph influence was 8.5 million people (based on results from a query on http://twinfluence.com/).

The TripAdvisor story doesn't end with the brand value derived from the application; that was only the beginning. The beauty is that 1.8 million users are feeding TripAdvisor information. These augment their 30 million user base—talk about a large focus group! The days of advertising executives sitting behind two-way mirrors munching on stale chips and M&Ms will become a distant memory. More important than healthier marketers is the opportunity this vast amount of data presents. First of all, companies can provide this data to reporters as part of their public relations efforts. For example: "Top-five cities that people want to travel to in the coming year"—"35- to 45-year-olds more likely to travel to Australia—teenagers to Europe."

Reporters and bloggers are always looking for this type of hard data that is of interest to consumers. What they learn real time can also help shape their product and services. The level of demographic information passed within social media is unprecedented. If TripAdvisor sees in October that 80 percent of males 55 to 65 are putting Machu Picchu as a place they desire to visit when historically only 20 percent select that destination, then it would make intuitive sense to change the TripAdvisor home page to have a callout for a Machu Picchu Senior's special. This is where marketers' jobs are changing drastically. This data is being collected from the website, as well as all the social media touchpoints.

Marketers need to be joined at the hip with their production team to ensure they are getting this real-time information. They also need to recognize that they are no longer sending a one-way message but are serving more as a conduit. "Those who will succeed need to act more like publishers, entertainment companies, or even party planners, than advertisers,"^[87] says Garrick Schmitt, Group Vice President of Experience Planning for leading digital agency Razorfish.

The process TripAdvisor employed while building the Cities I've Visited application presents a new way of thinking in that TripAdvisor didn't know for certain what they would be able to monetize. "Users are challenging publishers, advertisers, and marketers to meet their needs in new, distributed, and largely uncharted territories—many of which have no analog touch points—and to provide services that have no immediate monetization models,"^[88] indicated Schmitt.

It's also a communication cycle. In this case, if someone within the Cities I've Visited application selects Athens under the category "I'd like to visit," then TripAdvisor has the ability to serve up its top-five most popular tours of Athens (which of course are clickable) and take the user directly into a booking process at the appropriate point in time. It's easy to see why this isn't interruption marketing like in days gone past; but it is a value-added part of a useful tool for the user. TripAdvisor is offering value to the user in providing a tool to track and brag about where he's gone as well as where he'd like to go, and at the same time, the user is receiving valuable information from TripAdvisor that is directly tied to his particular travel interests. There is no marketing guesswork or marketing laboratory—the user is informing marketers implicitly through his actions.

One Australian company, Companion Credit Union, actually turned over the decision on its brand logo to the social community. "The credit union is really owned by the members, and therefore, we decided we should invite them to actively participate in helping us decide,"^[89] said Ray O'Brien, CEO/Companion. Of the 12,000 members, 1,000 of them voted. "Many of our current members founded Companion Credit Union, so it only seemed fitting that they would be a part of our new journey and direction," said Companion's Marketing Manager Cas Scott.^[90]

Mobile devices acting as e-book readers (Amazon Kindle, Sony eReader, Apple iPad, etc.) are wildly popular (Kindle is the #1 selling product on Amazon), and the fact is that online books offer many of the same advantages as digitized music, newspapers, and magazines. The New York Times is available via eReader for a monthly subscription fee that is drastically less than the traditional paper edition.

It is only a matter of time before we will see advertising and marketing efforts creep into both fiction and nonfiction materials. This is virgin territory for marketers. This is a good thing because as the traditional channels of marketing like television, radio, and magazines diminish in effectiveness, marketers need these new marketing outlets to continue to thrive. One way in which marketers, publishers, and authors will come together as it relates to e-books is within the content itself. How is this possible without compromising the story? On some levels, this is very simple. Let's say that within a scene of a novel the author describes a hot, dusty day where the main character refreshes himself with an ice cold Coca-Cola. Authors generally like to describe items specifically so the reader can really visualize them. That is why more often than not they use branded items in their descriptions—they don't write "soda," they write "Coca-Cola"; they don't write "listening to an MP3 player," they write "listening to an iPod"; and last but not least, they don't write "a stylish Swedish over-the-shoulder baby carrying device," they keep it short with "Baby Bjorn." Because of this, there is tremendous potential for advertisers and authors as e-books continue their rise in popularity.

In the previous example, if there is a mention of Baby Bjorn, the company can pay to have that mention become a hyperlink within the e-book's digital format. The benefits of this are that it makes the brand term more pronounced, and if the reader is inclined, he or she can click on the term and either be given more description, branding, an image, or be taken directly to babybjorn.com. Another benefit to Baby Bjorn is that the search engine spiders will read its hyperlink, which will help Baby Bjorn come up high in the search rankings.

Thinking outside of brands entirely—books often mention a geographic location. With traditional books, curious readers will look up places like Transylvania with maps or mapping tools to learn where it is. With e-books, this is made simple because it is only one click away, taking you straight to the location on a digital map, providing a benefit to the reader. Think of a particular word in a novel that you may not know the meaning of—say panoply. Rather than having to look up panoply in the dictionary, the definition would be one click away or you may even be able to mouse over it with the cursor to see a pop-up definition. Both of these can be monetized by the publisher and author. Google currently generates revenue from its mapping application, so it makes sense that a business development could be struck whereby Google would be the preferred provider of mapping information within books; in return, the publisher or author receives a portion of the revenue that Google generates.

This paragraph was written in 2008, and my, have we already come a long way. All eReaders and iPads have this functionality. Today Kindle sales already top hardcover book sales and Amazon predicts digital book sales will outpace paperback sales in 2011.

Going back to the brand-product-placement-within-a-book scenario, you could argue that if the author is already placing brand terms into the book (e.g., Coke), then why would a company like Coke pay for something that is already there? Coke would want to do this for two reasons: (1) the competition (Pepsi) could swoop in and take this placement, or (2) the placement isn't currently a hyperlink in the e-book. By paying a small sponsorship fee, the company could make it a hyperlink, thus driving traffic and helping improve organic search engine rankings (because search engines reward hyperlinks).

If all of this makes so much sense, why haven't they had this type of product placement in books before now? It wasn't feasible primarily because of tracking. An advertiser wouldn't be able to track the effectiveness of this form of product placement in a hardbound or paperback book. Now, with product placements in e-books you will be able to see how many people viewed (millions of impressions) along with how many people clicked or moused over the word with their cursor. This is great for advertisers and even better for the authors and publishers who now have an additional revenue stream without compromising their content, but rather enhancing it for their readers. It will be interesting to see how advertisers will be charged for these types of placements; the most logical would probably be a cost-per-thousand-impressions model.

While the transition from both hardcover and paperback to electronic versions will occur, we are at the beginning of this movement. It will not be as rapid or absolute a succession as other industries (e.g., music, movies). Rather, e-books will be complements or alternatives. Part of this is because there is something more genuine and romantic about curling up with a good book. It's not quite the same if you are curling up with your electronic reading device. Another factor is that books are one of the most viral offline items that exist today. Books, especially paperbacks, are disposable—passed from friend to friend; owners don't really plan to ever see the book again. Also, with today's technology, it is still 10 to 30 percent faster to read something on a piece of paper than it is to read from a computer screen, or a smaller handheld e-book reader.^[91] It will be interesting to see if advances in technology for eReaders, tablets, iPads, slates, and so forth, eventually help make it faster to read. My guess is they will, and they will soon.

Unlike music and news content, the information within books is not as time sensitive, especially for fiction. The shelf life for a book is much longer than news content or the popularity of a song. A salient example of this is the fact that today, middle-school kids are still reading Huckleberry Finn and The Catcher in the Rye. In the foreseeable future, while e-books will be exceedingly popular, they will not be an absolute replacement in the short term like the music, newspaper, and magazine industries have experienced. However, the popularity will be huge; in particular for books like the one you are reading right now. Most likely you are reading this on an eReader and you are sitting in your robe drinking coffee (okay, hopefully not that second part).

For publishers, there are both pros and cons to the book-publishing model being influenced by the rise of e-books. On one hand, publishers potentially save millions of dollars on the physical printing and shipping of inventory, and they would have an additional revenue stream in terms of the advertising via hyperlink placements within the e-books. On the other hand, they are middlemen, which may not be as crucial a role when an author can get his or her content directly to the reading audience easily. (A good example of this is Google Books allowing authors and publishers to upload their content in PDF format. Google was sued and did lose a court battle because more than one proprietary owner didn't want their content placed on Google Books.) However, look for Apple's iBooks to help fill this void. Expect Apple to make a strong play to put a stranglehold on the publishing industry just like they did on the music industry; their next frontier are TV shows.

Unlike the music and movie industry, the book industry has thrived, even though for hundreds of years there has been a free alternative to purchasing a book—public libraries. It will be interesting to see how the public library model morphs to address e-books. The book industry still thrives in spite of the free availability of the same content at the public library for many reasons: (1) people like to own books; (2) it takes an effort to go to the library, check out a book, and then remember to return it on time; (3) library books have return dates; and (4) there are often long waiting lists for new books. With e-book technology, it is possible that hurdles 2, 3, and 4 from the previous list will go away entirely. Specifically, there is no need to go to the library because the content can be wirelessly pushed or downloaded to the e-book device direct from the library. Also, once you have the e-book, you don't have a time limit in which to return it. As for the waiting list for the more popular books, because there is no physical item or inventory (i.e., the book itself), it is limitless; theoretically, everyone in the world can read the book at the same time.

Libraries will need to set up some sort of licensing agreement in the short term with publishers when it comes to e-books. So, there may not be limitless inventories and time lines for library e-books. For example, if you want to read The Girl with the Dragon Tattoo as an e-book from the library, the library may only have the rights to five e-book copies at a time, and the content may automatically expire from your e-book reader in 30 days. The good news is that inventory will be easier to track (no more lost books), saving the taxpayer some money; libraries will be less costly to maintain. In the long run, the best model would be limitless, eliminating restrictions. The more information that is free and available, the more society benefits. The industry will also need to figure out how an e-book purchase can be passed from one friend to another. This is additional revenue for those in the publishing world, who historically haven't made money from this passing-on tradition. Many reading this right now may be doing so on an eReader, iPad, Tablet, phone, and so forth. Books are strangely social, so there could be new revenue streams for digitally passing a book from one device to the next.