Star power is a mixed bag for social media marketers

January 7, 2011
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By Ronald Grover, Businessweek

In the 1980s she was Punky Brewster, the star of an NBC (GE) comedy about an orphan. Today, Soleil Moon Frye is a 34-year-old mother of two and a power marketer for Ad.ly, an advertising agency that pays actors, athletes, and musicians to promote products through micromessaging service Twitter. Two days before Christmas, Moon Frye’s 1.4 million followers learned that THQ’s uDraw tablet, which lets kids draw using a Wii video game console, is “a must for any family night!”

Celebrities have been endorsing products since before talkies. Ad.ly, a 22-person operation run out of a small suite of offices in Los Angeles, is pioneering what it calls the “micro-endorsement.” Since its launch in September 2009, it has crafted more than 20,000 endorsements for more than 150 brands, including Sony (SNE), Best Buy (BBY), and Old Navy. The plugs, which adhere to the service’s 140-character limit, are delivered through the Twitter streams of the Kardashian sisters, rapper Snoop Dogg, and more than 5,000 other personalities ranging from A-list to D-list.

The ad campaigns are a little on the micro side themselves. On a recent day in late December, Ad.ly staffers were at work putting together proposals for a $100,000 package for a handheld, digital projector from 3M (MMM) and a $50,000 campaign for CBS (CBS) talk show Dr. Phil. For each campaign, Ad.ly tries to match the product with the best fit from its stable of celebrities, though advertisers have the final say as to who promotes their products. Pitches contain small labels indicating they’re ads, as required by the Federal Trade Commission.

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