Flipboard: Three Reasons Why It's Not Just Another Pretty Face

(This post was previously published on Digital Pivot at Talent Zoo.)

I know. I’m late to the party with this post. But actually I've been partying since July 21st.

Before that day, everything was beginning to taste a bit like chicken over in the social media world. Streams of links, look-alike text streams flying onto our PC screens and mobile devices and all of it coming at me like a firehose. Then along comes Flipboard , the latest killer free app on the iPad.

Hailed as “The Future of Magazines”, "The Future of News" and even  “Revolutionary” by hard-to-please tech guru Robert Scoble, Flipboard is a social magazine  which aggregates the feeds from your Twitter and Facebook accounts, providing photos and video of link content in a beautiful magazine style layout. Forgetting for the moment the server performance  issues that the company has experienced since launch day due to over-demand, everyone seems excited. 

That is everyone except Advertising Age. Active some two decades before the real Mad Men Days, Ad Age is the venerable bastion  of All Things Advertising.  Since Flipboard is proposing to support itself ultimately via an ad model – hey, it’s significant what Ad Age says.

Ad Age’s problem with Flipboard?    To quote from Michael Learmonth’s post

I'd be stunned if any publisher really thought it was going to make a dime from working with Flipboard. Ever. And for its founders to say that it could, as CEO Mike McCue did to Business Insider, is just ludicrous.
 

He takes specific issue with Flipboard CEO Mike McCue’s statement that publishers will “end up making 10x the revenue from advertising they are making on their websites today”. Instead,  Ad Age posits that Flipboard is but a “shiny layer”, an unnecessary intermediary that publishers are unlikely to go to as a worthy component in the ad value chain.

What's the basis of Flipboard's bold-acious statement on  ad revenue? McCue argues that today's web advertising is competing and distracting to web content readers.  In providing a tantalizing visual front-end to tweets and Facebook links, Flipboard assumes more links will get clicked on and will be retweeted. And  that means more potential impressions for a web content publisher or advertiser.

Well, as much as many bastions are ultimately raided and sacked, my bet is  actually on this one. For there are three key points I believe  the Ad Age post misses.

1. The Word-of-Mouth Factor

While Ad Age admits that Flipboard will likely surface stories that a reader might, under ordinary text streams, not notice, what's not being taken into account here is the “social weight” of the content senders .  As a trusted member of a reader’s social circle, a Flipboard content contributor  is part of a powerful word of mouth network.

What’s word of mouth worth? The data below from a USC/ Annenberg School of Communications study shows that a recommendation from a friend or family member is a much more potent influence of a person’s purchasing decisions than newspaper or blogs. And this is a difference that advertisers care about. 

2. Personalized Magazines Built Around your Social Graph.

 
One of the more interesting features of Flipboard is that it does some form of relevance ranking today, prioritizing content based on how "close" your connection is to  the sender. (For instance, your wife or son's content is  likely to take precedence over a co-worker's.)
 
Though not available in Rev 1.0,  Flipboard's  maker has made clear that, leveraging their acquisition of Ellerdale and its semantic indexing capability, future versions will allow users to build collections of content across their social network, based around any ad hoc topic of choice.  For instance, you might create an instant zine, based on your personal curation of the trusted tweets and Facebook status messages on the topic of “World Cup” or “Earthquake”.   It is in fact this advanced  technology competence that will distinguish Flipboard’s position in the ad value chain, much as Google became an "intermediary" with Google AdWords.  

3. Flipboard as the Netflix of Socially-shared Content 

There have already been comparisons of Flipboard to the NetFlix model.  Netflix knows a lot about your viewing habits, combining your known preferences with their recommendation engine allows Netflix to make reasonable suggestions as to what other movies you would like.

Granting me a bit of (not far flung)  license here , imagine that Flipboard is savvy enough to hire machine learning expertise  which allows suggesting  not only Twitter and Facebook content you might like, but other people’s fuly-assembled curated news channels that resemble your own. (Whatever algorithm Twitter is using with “Who to Follow”, that’s not it.) 

In the end, Ad Age is correct to question whether Flipboard can provide enough value-add in technology and emotion-stirring visuals to really move ad revenues 10x over the current revenue. But given that some traditional content publishers are but newly hopping onto RSS and  their production departments just learning the meaning of "API" – it’s a good bet that Flipboard is sitting mighty pretty.
 

What do you think? Is this a crawl-over-the-wall revolution in the web advertising model?