While I still know nothing about game shows (I don't even have a TV at home), there is something intriguing about Amuso at a business model level. Amuso may be a good example of that rare breed of startup that is both viral and monetizable.

The rule of thumb is: "The more viral it is, the harder it is to monetize".

For example, Communication services such as Twitter and Hotmail are perfect for viral adoption but hard (not impossible, but hard) to monetize. They maybe great businesses, scale first and monetize later can be a great game plan if you have plenty of funding. But they are certainly hard to monetize.

What about Entertainment? YouTube is perfect for viral, but has monetization issues. Traditional entertainment is simple to monetize - you create something that people want and charge them for it - but is only viral as a bye-product of occasionally creating a great hit that everybody talks about.

Amuso says they are in the magic quadrant at the top right hand corner that is both viral and monetizable. Let's look at that a bit closer, poke around in the magic numbers.

How Amuso Works

In this case a picture says it all...

Parsing The Amuso Model

Here is the basic deal: user generated game shows.

COMPETE
Enter photo and video contests to show off your talent.
VOTE
Support your favorite entries and invite friends to come vote for yours.
WIN!
Win the most votes with your entries and take home the prizes!

Contestants want to get famous and make money from prizes. Who are they: Next Top Models, Pop Idols, Comedy Kings and more.

The "community" breaks down as follows:

10% Contestant
90% Members/Voters

Amuso takes a share of the prize money.

It Looks Like It Might Be Working

After only two months, Amuso has already attracted 100,000 monthly visitors, 20,000 registered contestants and paid out over $10,000 in cash prizes.

That is good traction by most start-up standards.

Investors Who Funded Skype

The founders are two ex-Yahoo!-ers, Jordi Bartomeu, CEO and Barak Rabinowitz. They told me that their investors had been investors in Skype. Which means that the investors have done well and understand how to get viral growth. For more on Skype investors see this old blog post from 2005.

It's been said over and over again, but maybe one more time would help: "viral" can be encouraged, it can be prayed for, but it can't be engineered. Your only hope is to create engaging, compelling content, and tell a terrific story... and then hope.

A Jupiter Research report on this subject analyzes the risks of negative buzz. The report is entitled "When Good Social Marketing Goes Bad," but it should be noted that most people use the term "social marketing" to apply to campaigns that mean to bring about social change. The Jupiter report, however, uses the term more casually to mean any marketing campaign that relies on user-generated content of a viral nature.

What they discovered was that although marketers have been quick to embrace this new trend - 35% allow for user-generated content (UGC) on their own web site and 21% have a profile on a social network - they have not been as quick to monitor and combat the negative buzz that some of their consumers will create.

In fact, only 29% of marketers using these techniques are monitoring the online discussions about their products on an ongoing basis and a shocking 17% don't monitor online discussions at all. Also, despite the availability of professional "buzz monitoring" services like Nielsen BuzzMetrics or MotiveQuest, only 8% of marketers used these services in 2007.

Who's Talking Trash?

The Jupiter report was also able to build a profile of the typical creator of negative user-generated content. This person is usually a heavy user of social networks, predominantly male (60% are male) and into technology (40% are influential in this area and 23% are considered "early adopters"). They are also a potential valuable audience for marketers as 49% tend to act as brand advocates - which means they tend to be vocal influencers who spread the word online.

How to Fight the Negative Buzz

Before trying to combat the negative buzz, the first thought needs to be whether or not it's worth the effort. Often, marketers will attempt to offer these negative UGC creators special treatment or invite them to be beta testers in order to keep the feedback private and productive. However, these tactics are not always practical and they don't always work, either.

A marketer must be aware of how far and fast their company will go to fix a legitimate complaint and also how likely the complainer is to adjust their response. Keeping in mind that research shows that only 12% of online adults think UGC like those posted on social networks or message boards is "trustworthy," going to great lengths to quiet the naysayers is not always worth the effort.

Of course, sometimes it is worth the effort, which is why the most important thing for a marketer to determine is whether or not the negative content is created by someone who just wants to take a cheap shot at the company, or whether it actually offers genuine insight into a product or service's failure. If so, then addressing those persons that created the negative UGC makes sense. Then, it can actually be helpful to engage those people openly in the public forum to show the company is listening to valid complaints and responding. That is a difficult choice to make for a company, as it only takes one loud negative voice to affect an influence on the larger group of the company's customers. However, when done well, this type of response can be a benefit to all.

Conclusion

Lately we've seen a lot of companies attempting to combat negative online buzz in new ways - Comcast has been monitoring blogs and social networks for mentions of their company, Digg is now holding online townhalls, and many other companies are offering customer service via Twitter. We've also seen the potential volatile situation that can occur when one disgruntled customer's voice can attract the attention of the whole crowd, as in the situation with Ariel Waldman's complaint against Twitter. Even she admits on her blog that she never meant "...to bring a mob with pitchforks to Twitter’s door," yet that is the power of even one complaint.

An old adage in advertising and marketing is that "a satisfied customer will, on average, tell five people, but a dissatisfied customer will tell everyone they know." For a company to be successful, especially now when the tools for communication are being intentionally placed in the customers' hands, it is more important than ever to know how to analyze, monitor, and respond to negative online buzz.

While some people have said that Digg has begun to lose its relevancy since the recent algorithmic changes, I believe it still represents an incredibly rich resource for studying social media and how stories and links spread throughout the web community. Once a link "goes popular" and is listed on Digg's homepage it is seen by many and perhaps even a majority of web geeks. Very often these readers have their own blogs, and if they like a story they may blog about it or link to it. This is why many webmasters yearn to be Dugg -- not for the first wave of traffic, which is often substantial but hard to retain, but for the viral wave of traffic and links that comes as a result.

Digg's algorithm can be gamed just like any other, so we often see sub par stories hit the homepage, but low-quality stories rarely receive any substantial amount of links once they're made popular. It takes real, quality content to induce savvy social media users and bloggers to link to a story.

So I decided to study this effect: what types of stories get lots of links after going popular? I created a database of 33,000 of the 39,000 stories that made Digg's homepage in 2007 and, using Yahoo!'s API, I tracked how many external links each URL had pointing to it. Then I analyzed a number of factors that could influence the number of links a story gets and wrote a report with my findings.

I'm publishing my Link Attraction Factors (PDF) report exclusively for the first time here on ReadWriteWeb and I'd love to hear everyone's thoughts and comments. The report is available as a free PDF file.

Once I realized that the occurrence of certain words in a story's title or description can have a potentially large positive or negative effects on incoming link accumulation, I created two tools that leverage my database.

The Keyword Tool analyzes a specific word or phrase and returns the average number of links a story mentioning that keyword got in 2007. While the Title Check Tool analyzes an entire title string and shows you which words tend to increase links and which tend to decrease links. These tools can be used by webmasters or social media consultants to help them tweak their copy for optimal social media link attraction, or by other researchers looking to expand on my work.

I plan to expand some of this data for future reports, including by looking at social sites other than Digg and incoming link data sources other than Yahoo! Again, I'd love to hear all of your ideas in the comments.

Note: Though Dell has purchased ads on this site in the past via FM Publishing, we have no advertiser relationship with Dell, nor are we being compensated in any way for showing this video -- we just thought it was funny. We hope you do too.

Most of the Web 2.0 success stories have been viral. Apart from Hotmail, this was not true in Web 1.0. The game at that time - hopelessly flawed in retrospect - was raising tons of money to advertise (online and offline) to get traffic. Flickr, YouTube, Twitter, Facebook type services don’t need to advertise to get mass scale.

That is a major revolution in business; it overturns the accepted wisdom that you needed mega millions to build a consumer brand.

But there is a problem with all this. I don’t believe I ever clicked on a Hotmail ad. I don’t think I even looked at them. Here is the nasty law:

“The more viral it is, the harder it is to monetize”.

These are the three streams of the Internet - communication, entertainment and research. You go online to communicate, have fun or find some information. The viral properties of each stream are quite different:

1. Communication. This is perfect for viral. Think Hotmail, Twitter, Skype and Facebook. The viral property is built into the service.
2. Entertainment. Think You Tube or Second Life or any online game. I tell people about a really entertaining video. The viral property is weaker as it depends on a stream of loss-leader hits.
3. Research. Google got viral adoption because the alternatives were weak and it was a major problem faced by millions every day. As it was free and dead simple to use, there was no barrier to adoption; but the viral spread was only possible because it was such a big problem and it was so much better than the alternatives. This happens very rarely.

Only Communication is a sure fire viral success. It only works when it is a genuinely new form of communication (webmail, social networking, microblogging). You cannot launch a web mail or social networking site today and expect viral adoption. But when it is a genuinely new form of communication, the viral adoption is stunning in its speed. I can see one new form of communication out there today that could get mass viral adoption, which is video conversations as exemplified by Seesmic.

When you look at the three streams of Internet services - Communication, Entertainment and Research from a point of view of monetization, the order is reversed:

Research is simple to monetize. It leads to a database of intentions and that leads to any number of advertising models that have a) proven returns to advertisers b) proven use for searchers.

Entertaiment can be monetized through advertising and “freemium”. We are used to the idea of ads to get free entertainment on TV/Radio and used to paying to go to the Movies or rent DVDs.

Communication is really tough to monetize through advertising. It has to be free to be viral (and it can be free because the marginal cost is close to zero). So the only way to make money is some form of advertising. It is just really, really hard to find a good way to offer advertising around a communication service that works for both the user of the service and the advertiser.

The big debate about Facebook’s value and their Beacon debacle is a reflection of this fundamental problem. So is the online debate about Twitter monetization and the heat that eBay got for not being able to wring the expected profits from Skype.

There have even been attempts to offer free telephone services in return for listening to ads. They were ridiculed and have failed. Yet we assume that it is OK to do this with online communication.

The simple fact is that when we are communicating all our attention is on communicating, so ads don’t get our attention. Entertainment can have breaks; TV has accustomed us to this idea. But try saying “we interrupt your attempt to get a date to give you this message from our sponsor”. I think the sponsor would suffer some serious brand damage!

Facebook is trying hard with some new models to monetize the social graph. But they all hit a fundamental problem. On page 44 of “Wikinomics, How Mass Collaboration changes Everything” it says “relationships are the one thing that you cannot commoditize”. That is like the law of supply and demand, you can count on it and take it to the bank. So any attempt at making social network relationships into either an Amway scheme (I make money by selling stuff to my friends) or a Beacon scheme (Facebook makes money by me selling stuff to my friends) will ultimately fail.

This does not mean that you cannot make good money on a new form of online communication. If you have a new form of communication and you get mass scale virally, you will get good returns on capital. Even if ad monetization rates are very weak, you make up for low rates with scale. As it costs so little to get that scale, it is still an OK business. Somebody who needs scaled-up features to add to their platform will pay good money to acquire you.

However that is a small prize compared to a Research service that gets mass adoption. Google is valued at over $200 billion because they got viral adoption for a Research service. They have even found a way to make email advertising effective. I now use Gmail and the ads are often bang on target and I have clicked on ads in Gmail. (They are also often totally, crazily wrong; my favorite was when I was writing about somebody called Cooper and got ads for Mini Cooper cars).

Services can mix Communication, Entertainment and Research. However the core proposition has to be clear. A new Communication medium is initially always Entertaining just because finding new ways to connect with people is a buzz. But once that “gee whiz” early adopter fades, the service has to be useful on a daily basis for mass markets. New entertainment models have to be social to break into what is already a hugely powerful entertainment industry.

Research is currently solitary. It is not fundamentally entertaining. I don’t see fun as a driver for Research beyond a gee whiz phase. However collaborative research, search with a communication angle, does look like the next big thing. My definition of Web 3.0 is:

“The combination of Web 2.0 mass collaboration with structured databases”.

If you can build a research tool that propagates virally and gets more useful with each person who uses it, you build a business with phenomenal power. That is a lot easier said than done. The purely technical challenges of creating structure out of lots of unstructured input is considerable. Much tougher is the chicken and egg problem; the tool has to be useful out of the gate, which is tough if the use derives primarily from the interaction of many people.

This means that funding has to be substantial to build enough value before the community kicks in to create value. That is why services such as Mahalo and Freebase raise VC measured in tens of millions of $. This is not like a pure Communication service that can get viral adoption out of the gate (but where the eventual returns are limited).

Image credit: Niall Kennedy

This is a guest post by Muhammad Saleem, a social media consultant and a top-ranked community member on multiple social news sites.

Essential Elements of an ARG

Here are few of the 'must have' elements for a successful Alternate Reality Game:

1. Storytelling or narrative

Every ARG should have a captivating story to tell that extends beyond the product. For example, the Halo 3 guerrilla marketing campaign revealed specific elements of the third installment in the series, which would be interesting for people that are already fans of the game. These 'games' often serve as prologues for the product or event that they are ultimately marketing. Unlike with traditional advertising, these stories make the product/event more dynamic and more appealing.

Although ARGs are mostly used to market products that have found a loyal online fan base (e.g. video games, movies, music, and television), they can be used to market almost anything - as long as you have a story to tell. We saw this in Audi's "The Art of the Heist" ARG, which was made specifically to market the Audi A3, and Coca-Cola's "Zero will give you life as it should be" campaign for Coke Zero in Europe.

2. Discovery/deciphering and documentation elements

Any well-executed ARG will play its cards close to its chest and reveal information slowly, sporadically, using different outlets/ mediums, and over an extended period of time. The narrative should be broken into smaller pieces, often obscured or coded in some way, so that not only do they need to be found but also deciphered into something intelligible. As such, the discovery and deciphering elements allow different people/sources to 'discover' new information and forces them to work together as a collective to help the story progress.

While most people will be interested in closely following the story, to try and be the first to discover the next step (for fame/glory or just out of curiosity) there will be others that will play along just so they can document the game, analyze the marketing strategy, and learn from it.

3. Cross-medium interactivity

For an ARG to be successful, it has to use multiple mediums. It has to be pervasive and must be available and accessible on as many different mediums as possible. These mediums may include, but are not limited to:

• Articles or bits of information seeded online on blogs and news outlets
• Videos (clips, trailers, commentary)
• Print ads in magazines and newspapers
• Billboards
• Posters in shops
• People with placards on the streets
• Phone calls
• Radio or online audio broadcasts
• Email and snail mail

The more mediums you use, the more personal it becomes and the closer it gets to reality. Furthermore, with each medium you tap a potentially unique audience that you may not be able to tap into using other mediums (e.g. online/email versus offline/snail-mail).

4. Blurring the lines between reality and fiction

Because ARGs allow you as an individual and community (working together) to make decisions that have visible and often instantaneous results, or at least give the appearance of interactivity, they help blur the lines between reality and fiction.

For example, for the Halo 3 campaign, real people took to the streets and babbled indecipherable gibberish for days on end. Similarly, the Harvey Dent campaign was made to look like a real political campaign and at the same time required a 'grassroots' collective effort to unveil what was actually going on. When you walk into a store and are faced with a vandalized display and a floor littered with "The Joker" playing cards, in a sense you step out of theatrics and into an alternate reality.

Image from destructoid.com

Things ARGs Should Avoid

Just as there are some elements that any good alternate reality game must possess to engage an audience, there are other things that can completely turn an audience off. Here's a look at some of the elements that ARGs must absolutely stay away from.

1. Lack of interactivity, too linear

Too many ARGs give the appearance of interactivity and though it seems like the end result depends on your participation, the games are actually linear 'journeys' from point A to point B. No one wants to put hours into a puzzle when they know that their individual effort doesn't really affect the outcome.

2. Lack of a reward

People enjoy participating in ARGs because each puzzle you unlock gives you a new piece of information and helps progress a story. As I mentioned earlier, these games most often serve the purpose of a prologue. No one wants to participate if the reward is not tantalizing enough or there is no reward. The Coca-Cola Coke Zero campaign had this problem, because the participants ultimately realized that the campaign was merely for another flavor of Coke - information that in itself isn't 'virally appealing'.

3. No instant gratification

Just as important as having a reward is allowing readers to access it right away. We are living in a Web-enabled world where instant gratification is key and delayed gratification is like no gratification at all.

4. Too difficult

You don't want to just throw away the prize, but you also don't want to make getting to the prize so difficult that nobody wants to participate. There have been ARGs where I tried for a half an hour and then gave up, thinking that I would wait for someone else to solve the puzzle and just enjoy the findings; or I didn't bother going back out of sheer frustration. Finding the appropriate level of challenge can be one of the more difficult parts of any ARG-based marketing effort.

5. Same old game, different name

The ARGs that everyone talks about were successful because they innovated and came up with ideas and ways to engage that no one had used before. If your game is still using the same old tactics to market a different product, it's not going to work. Try to come up with something new, because the novelty value alone will be enough to draw in some people.

6. Too scripted, too commercial

An ARG by its very nature has to appear to be unscripted and non-commercial to succeed. Otherwise it just becomes an advertisement that people have to work for to see.

You have to keep in mind that on a very basic level, you must have a premise that people are interested in - or they could be interested in. Making an alternate reality game around cats will be difficult to market. It's much easier to follow the 4 steps above and avoid the 6 pitfalls mentioned, to take your good idea and make it a great success through ARG-based viral marketing.

ilove bees image from mitchrukat.com