Auto Dealers Are Getting the Biz Online

MAY 31, 2007

Lisa Phillips, Senior Analyst

The local Internet scene is heating up for automotive dealers and sellers, according to a recent report from Borrell Associates. Local online advertising by automakers, dealers and individual sellers will escalate to $4.2 billion in 2011, up from $2.3 billion in 2006.

Data from the National Automotive Dealers Association (NADA) indicate that of the $7.8 billion spent on advertising by auto dealers in 2006, the Internet's share was 11.5%.

Common features on dealer sites in 2006 were price and inventory information, financial forms and information, and the ability for customers to schedule sales and service appointments. Yet although visits by car shoppers are on the rise, conversion rates are not. The NADA's "2006 Dealership Internet Survey" shows a monthly average of 319.9 unsolicited prospects visited dealer sites in 2006, compared with just 227.9 per month in 2005.

But of the qualified leads these dealerships received — 52.9 in 2006, up from 29.5 in 2005 — the conversion rate to sales dropped, from 26.4% in 2005 to 19.2% in 2006. Conversion rates among customers who arrived through third-party buying sites were far better — 29.6% in 2006.

What are they missing? Prompt follow-up with prospects does not appear to be the issue. Although Capgemini, in its 2006 "Cars Online 06/07" survey, demonstrated that 84% of US respondents expect their e-mail inquiry to a dealer or manufacturer to be answered in less than 24 hours, Chinese car shoppers were the most impatient, with 43% expecting an immediate response, while 91% of British respondents expect an answer within the same day.

Dealer responses to the NADA for its Internet survey indicate that 98.3% are responding to customer inquiries within 24 hours, with 82% boasting they are getting back to prospects in seven hours or less. Perhaps the responses themselves are turning away prospects. While the Internet has speeded up response time, that greater speed can reduce, rather than improve, the quality of communication.

Killer Startups widgetQube review

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Widgetqube.com - A Widget For RSS Feeds
posted 7 hours ago by Siri Visit http://www.widgetqube.com/ view profile
With the development of RSS feeds getting updated and clued into all the latest happenings has gotten incredibly simple. Feed aggregators and speed readers have increased the functionality of RSS. WidgetQube takes RSS and aggregation to a new level. This elegantly designed widget displays clear, legible headlines as well as a snapshot synopsis of each story, so you know what the story is about without having to click to another website. It comes with a set of preloaded RSS feeds spanning a ra... read more
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Comcast Wants To Lead Interactive Ad Charge

by David Goetzl, Thursday, May 31, 2007 8:00 AM ET
COMCAST'S TOP EXECUTIVE BELIEVES IT'S "imperative" the cable operator give advertisers a user-friendly way to beam targeted messages into millions of homes within the next several years. The same philosophy applies to interactive ads, in which a viewer could potentially engage in impulse e-commerce.
"The money is humongous--and real cash," Comcast chairman-CEO Brian Roberts said Wednesday at an investor conference.
That calculus would appear to come from advertisers' increased interest in employing Internet-style targeted ad techniques on linear TV--and the massive amount of ad time Comcast has to sell via the two minutes an hour per channel that it retains for itself.
Roberts said that after Comcast, the nation's largest cable operator, moves aggressively to roll out phone service for businesses over the next year, offering widespread targeted and interactive ad opportunities becomes a chief corporate focus. The cable industry has dipped its toe into various initiatives in those areas--propelled by data and capabilities from set-top boxes--but it has yet to make a notable splash.
"It's a strategic imperative to the company, whether that's a one-year or five-year achievable milestone," he said.
He suggested that Comcast would take the lead in encouraging other cable operators to band together to offer advertisers the opportunity to run targeted or interactive campaigns well beyond Comcast's 24 million homes. The idea: national reach would provide a high-tide-lifts-all-boats phenomenon. Cablevision has expressed a similar interest in forming a turnkey service that would offer advertisers the opportunity to buy targeted or interactive ads that could potentially reach tens of millions.
"It would be really great if the cable operators could work together to present advertisers one platform, one set of metrics, one Nielsen-type data--whether it's Nielsen or whomever," Roberts said.
Multiple MSOs have held discussions along those lines and launched an initiative to develop the infrastructure. Roberts said the cable industry's research arm, CableLabs, is working on developing a system that would allow MSOs to link together and launch a one-stop-shop for the new types of ads.
Targeted ads can take many forms, from aiming ads at specific regions or neighborhoods to arguably the Holy Grail of "one-on-one" ads that reach individual homes, based on demographic and other characteristics. The latter, of course, would take longer to develop.
There have been some fits and starts in the interactive ad realm--one that could be particularly noticeable to the cable industry. Chase's credit card unit late last year launched an interactive campaign with satellite competitor EchoStar, allowing it to gauge viewer interest down to the household level by clicking on an option to receive more information.
Chase has also experimented with a household-by-household targeting initiative with Cablevision.

Google kicks offline Web apps into gear

By Martin LaMonica

http://news.com.com/Google+kicks+offline+Web+apps+into+gear/2100-7345_3-6187596.html

Story last modified Wed May 30 16:09:07 PDT 2007

Google engineers have enabled what Internet surfers for years have yearned for--Web applications that work offline.

The search giant on Wednesday launched Google Gears, a browser plug-in that will let people run Web applications when they're connected to the Internet or not.

The company released the source code for the Google Gears software in conjunction with Google Developer Day, a daylong conference in 10 locations.

The goal of Google Gears is to create a single, standardized way to add offline capabilities to Web applications, said Linus Upson, engineering director at Google.

The initial code is aimed at JavaScript developers who write Ajax-style Web applications. It runs on Internet Explorer on Windows; Firefox on Windows, Mac OS and Linux; and on the Safari Mac OS browser.

Google expects to have a consumer-ready release of Google Gears, which will be under 1 megabyte in size, "within months." It also expects to submit the code to a standards body so that it will eventually be built into all standards-compliant browsers, Upson said.

"It's been a long time since the Web has gained new fundamental capabilities. I think it's been about 10 years," said Upson. One of the key capabilities of Ajax development--XMLHttpRequest--came out in 1998 and took years to catch on, in part because of applications like Google Maps.

Google engineers took on the task of bringing offline access to Web browsers because customers of its hosted Web applications complained about not being able to work when disconnected, Upson said.

"One of the reasons we're doing Gears is that developers here at Google have really pushed the envelope on what can be done in the browser so engineers are hitting barriers harder and faster," he said.

The first application to have offline access through Google Gears is Google Readers, the company's RSS reader. Once people install the browser plug-in, they can read RSS content when they're offline and synchronize with the RSS feed provider when they get back online.

As part of the announcement, Google said Google Gears has been endorsed by the Mozilla Foundation, makers of the open-source Firefox browser, as well as Flash developer Adobe Systems and Opera Software, which makes the Opera browser.

Under the covers
By releasing the Google Gear code, the company hopes to get feedback from developers before releasing a consumer plug-in.

The software itself has three components--a local Web server which runs in the browser, the open-source database SQLite for storage, and browser extensions that allow multiple JavaScript jobs to run in parallel.

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With that architecture, end users will be able to run Web applications even if they have flaky network connections or if the Web server they are accessing is bogged down. Having a browser capable of running multiple JavaScript scripts, or threads, means that the browser is less likely to get locked up.

"What we wanted to enable was to make applications that essentially run off local data even when you're connected to the network because defining or detecting that (connection state) is very hard," said Upson.

The local SQLite database, while small in size, is capable of saving gigabytes of data, although Google intends to set up Google Gears so that Web application providers have to ask permission from users to store data locally.

Google engineers have already started work on adding full-text searching to SQLite, Upson said.

Other companies have taken on the challenge of making Web applications run offline before but there still lacks a generic, widely used method.

Going Vertical !!!

By Cory Treffiletti

With the entire buzz being generated through numerous consolidations and mergers, it's interesting to witness the trend towards vertical ad networks and away from the previous model of broad-reach, broad-targeted networks.
The first wave of the network model focused on large reach networks, such as ValueClick and Advertising.com. These folks aggregated a large volume of audience for advertisers to speak to, and allowed for contextual targeting and demographic targeting, mostly via contextual relationships. The second wave focused on behavioral targeting being layered over the existing infrastructure, offering advertisers the ability to reach the same audience either contextually or based on previous traffic patterns and usage, thereby giving birth to behavioral targeting. The current trend appears to be focused on building a singular portal to reach a specific audience by tapping into them via a collection of smaller to medium-sized sites of a similar contextual relevancy.
One of the first (apparent) players in the category was Gorilla Nation. The company amassed a large collection of sites reaching the entertainment category, and has continued to build them over the last few years, while acquiring more into the mix. Recently we saw Jumpstart Automotive Media be acquired by Hachette Filipacchi for a large sum of money, aggregating together a large collection of automotive targeted sites and inventory, in some cases building relationships with larger portals to weave together its inventory, either contextually or through behavioral targeting, to reach in-market autobuyers.
Even the start-up world is getting into the act, with properties like Real Girls Media and its first site, DivineCaroline. These folks are trying to pull together women-targeted sites in much the same way that early trailblazer iVillage did, but is focusing on the Web 2.0 elements such as blogs and user-generated content. Going beyond the network model, we are even seeing the development of platforms and services to help advertisers reach the types of verticals they are interested in. Centro is a platform and service that objectively aggregates together local online content for advertisers, while Adify is a start-up that professes to build out vertical networks for specific advertisers, then is able to reuse that inventory, building a marketing asset for later growth.
All of these models signal the shift away from large aggregate audiences towards the development of solutions to reach the long tail and provide advertisers with the ability to go deeper into the lives of their audience. In our planning way back in 1996, we used to say that this was a means for reaching the portal audience without advertising on the portals. It was a means of going around them when they cost too much or wanted too much in the form of an upfront deal. Now we know that these are all ways to build to the ever-important tools of reach and frequency. These long-tail vertical networks provide access to a targeted audience at a lower cost, in a way that is attractive to advertisers. You are able to do more than just run banners and buttons. You are able to run large page take-overs and larger rich media units, but in a smaller, more efficient, and possibly more effective environment.
The venture capitalists seem to have gotten the message loud and clear. The majority of the dollars I see going to these models are focused on video and vertical. Of course, that means that a vertical video network or platform would be the most attractive option for VCs and advertisers alike.
Please excuse me while I go work on that business plan!

Spot Runner Teams With Reed Elsevier Unit To Offer Media, Creative To Local Law Firms

by Joe Mandese, Wednesday, May 30, 2007 7:45 AM ET
IN A MOVE THAT COULD prove a boon for local TV advertising markets, Internet-based "long tail" ad agency Spot Runner has teamed with a division of Reed Elsevier's LexisNexis unit to begin offering turnkey media planning and addressable ads to local law firms around the nation. While advertising-savvy firms have successfully leveraged TV advertising in larger markets to create lawyer brands like the ubiquitous Jacoby & Myers, the new alliance will make it far easier and affordable to smaller firms to leverage TV advertising. Spot Runner, which is backed by big agency holding companies such as Interpublic and WPP, has already had a profound impact in other local franchise based categories, such as real estate agencies, offering big chains like Century 21, Coldwell Banker and ERA the ability to customize ads and plan and buy local TV avails based on the coverage areas of local agents, said it is teaming with LexisNexis' Martindale-Hubbell unit, which offers professional services and business development to law firms nationwide.
"Initially, we are launching this new offering in a few states and will be working with Spot Runner's creative team to develop commercials in the practice areas of most immediate interest to customers," said Nicholas Karrat, senior director of marketing and alliances for Martindale-Hubbell. "Throughout 2007, we will be rolling out the product to additional states and areas of practice, based on considerations such as state bar association ethics rules and the market demand we observe."
Based on the specific budget and market information provided by the firm, Martindale-Hubbell will work with Spot Runner's media planning platform to create an optimal media plan that allows the law firm to target prospective clients by demographics, networks and specific neighborhoods.
Joe Mandese is Editor of MediaPost.

Widgetbox Remote Gallery: An Open Platform For Widgets

Duncan Riley
11 comments »
Widgetbox have announced the wide-spread adoption of its new Widgetbox Remote Gallery feature which eases the transition to an open platform for social networks.
The Widgetbox Remote Gallery feature enables social networks to embed a select number of widgets from third party developers and provide access to the over 10,000 widgets from the Widgetbox main gallery, giving their users the ability to easily find and use widgets to customize their profiles, blogs and web pages.
Partners can brand their own Widgetbox Remote Gallery and have control over the widget selection in the Widgetbox Remote Gallery. Galleries can be as large or small as desired and widget selection can be rotated as needed.
Launch partners include Freewebs, imbee.com, Xanga and Six Apart’s TypePad, LiveJournal and Vox.

eBay’s StumbleUpon Acquisition: Confirmed at $75

Nick Gonzalez
18 comments »
As we expected earlier today, eBay has confirmed an all cash $75 million acquisition of social discovery service StumbleUpon. eBay says StumbleUpon fits will with their “goal of pioneering new communities based on commerce and sustained by trust” and helps them learn more about newly emerging community based businesses.
Although you can imagine “StumbleUpon Shopping” coming soon, eBay is leaving the company alone and taking a wait-and-see approach. The corporation will remain completely intact, except for the addition of eBay’s Michael Buhr, who will serve as general manager for the product.
Throughout 2007, StumbleUpon has seen tremendous growth. They currently have over 2.3 million registered users, serve 5 million daily recommendations, and are experiencing a 150% year over year growth rate. Here’s a quick look at their latest stats from comScore:

CBS Acquires Social Music Site

CBS Acquires Social Music Site
BBC News
Continuing its digital push, CBS Corp. today announced the acquisition of the UK-based Last.fm for $280 million. Last.fm is a social music site that connects users with similar music tastes, helping them find new music, build their own collaborative radio stations and watch music video clips. It was founded in the UK five years ago, and now has more than 15 million active users.Last.fm founding member Martin Stiksel said an alliance with such a major media player would help the site put "every track ever recorded and every music video ever made onto Last.fm." As part of the deal, the Last.fm management team will remain in place, and the site will retain its brand--although CBS might want to think about a new name.What does the move do for CBS? CEO Les Moonves said Last.fm figures largely into the company's push to syndicate content. The company's demo also hit the media giant's target audience. CBS could make its new social network into a MySpace competitor by integrating CBS media content (like radio broadcasting) with its existing offerings. The Last.fm acquisition is the latest in a string of disparate digital moves for CBS Digital this year, which include the launch of the CBS Interactive Network, an investment in virtual world content creator Electric Sheep Co. and the acquisition of the quirky Wall Street-oriented news show, "Wallstrip." - Read the whole story...

Selling Web Advertising Space Like Pork Bellies

Exchanges That Pair Buyers,Sellers for Available Ad SlotsAttract Internet Giants

By ROBERT A. GUTH and KEVIN J. DELANEY
The next big Internet race might turn the buying and selling of advertising space on Web sites into the online equivalent of the pork-bellies pit.
Over the past few years, a host of small companies has started electronic exchanges where advertisers and Web sites can buy and sell online advertising space. The companies, with names like Right Media Inc., AdECN Inc., Turn Inc. and ContextWeb Inc., have been an obscure sideshow to a broader battle over Internet advertising.
That's changing quickly. The biggest Internet companies, including Microsoft Corp., Google Inc. and Yahoo Inc., are focusing attention and money on the emerging business, hoping to be first with the kind of large-scale, dynamic market for the ad industry that the Nasdaq market brought to stocks.
Over time there will be "a handful of winners that build very high-tech marketplaces," predicts Jim Barnett, chief executive of San Mateo, Calif.-based Turn. "That's what we're trying to do; that's what Google is trying to do."
Today, online publications and Internet companies have space for display ads built into their Web sites. Typically, that space gets filled with ads either the old-fashioned way -- through a salesperson -- or by a mix of computers and people called an ad network that automatically sells ads for the spot. But a significant portion of the available ad space -- called "inventory" -- remains unsold, or is sold for next to nothing. Enter the exchanges, which use automated systems to match buyers with sellers of unsold space.
With ad exchanges, member advertisers specify the price they're willing to pay for a certain type of ad spot, such as a banner ad that will be viewed by a female in Boston. When a woman in Boston pulls up a Web page of an exchange member with a banner slot available, software assesses the exchange's offer. If the price offered is better than the site's minimum rate for that page and higher than what it can get from other sources, such as ads sold by its sales staff, the site will usually accept the exchange-brokered offer. The exchange's computers can then deliver the winning ad to be displayed as the Web page loads on the consumer's PC. The exchange immediately notifies the site if it doesn't have a buyer for the ad space, and the site can then put in a nonpaying house ad or try other means to unload it on the fly.
Web sites rely on data such as IP addresses -- identifiers for PCs connected to the Web -- to know the general location, gender and other characteristics of the Web surfer pulling up an ad. Sites also use cookies, small files stored on users' computers, to track their Web activity, such as recent searches. Web publishers say the cookies generally don't allow them or advertisers to know the actual identity of specific users -- and any data are made anonymous. But for a car maker who might want ads to be shown only to consumers who had previously visited auto sites or had done car-related Web searches, for example, the targeting such technology makes possible can be attractive. By bringing together a lot of ad sellers, exchanges can potentially help advertisers buy a larger quantity of such specifically targeted ads across different Web sites.
AdECN says it can complete an auction for the ads on a Web page in 12 milliseconds after a consumer clicks to pull it up. AdECN runs an exchange where 28 advertising networks, which purchase ad slots from many different sites and sell them at higher rates to advertisers, buy and sell ads.
Exchanges usually collect payments for ads and pass them along to the sites, taking a commission. Ads are generally priced per thousand times they're viewed by consumers, a unit known in the industry as CPM.
Online ticket seller StubHub in recent months started using exchanges and ad networks to spread its reach to sports and music fans on the Web. (Historically, the company used ads tied to Internet search results on Google to reach customers.) The exchanges have allowed StubHub to place ads on a broader universe of sites large and small that it never had used before. Some of those, including ads on Gawker, a gossip blog, and Internet radio station Accuradio, led to ticket sales, StubHub executives say.
In a few months of use, ad networks and exchanges "have already become material to our marketing mix," says Michael Janes, chief marketing officer at StubHub. He estimates the company now spends about 15% of its budget (up from zero at the beginning of the year) for display ads over networks and exchanges. There's still some disagreement over the actual differences between networks and exchanges. But many industry executives agree that transparent pricing and an open neutral marketplace where anyone can buy or sell ads are distinguishing characteristics of exchanges.
Q Interactive of Chicago this month started selling some ads on its sites through the Right Media exchange. And it believes that buying ads on other sites through the exchange, which it has begun doing as well, will offer a 20% to 30% better return on investment than its previous practice of going around and buying ads from different sites individually. "Right now if you want to do a media buy you have to buy on a lot of different networks and with a lot of different publishers," says Q Interactive CEO Matt Wise. "Theoretically, with an exchange, one technology platform can cover an enormous swath of the Internet."
Or so the big players hope. Yahoo thrust exchanges into the spotlight in April when it agreed to pay $680 million for the remaining 80% of Right Media, following a 20% stake it bought last October. Yahoo said that it wanted to own Right Media as a way to take a leadership role in promoting the exchange model. The company has been selling some ad space on its site through Right Media, and says it has seen increases of over 50% in prices for ad spaces sold through Right Media compared with what it brought in for them on its own.
The Right Media acquisition followed Google's $3.1 billion deal to purchase DoubleClick Inc., which is building an ad exchange. DoubleClick last week began conducting transactions for actual ads on the exchange it has been building.
David Rosenblatt, chief executive of DoubleClick, estimates exchanges could eventually handle 50% of all display ad sales. He compares the exchanges to auctions that Internet search providers like Google used to ignite search-related advertising several years ago. "I think the exchange concept will have the same impact on the display market," he says.
Meanwhile, Microsoft has started developing a prototype of an exchange and has also considered buying one of the start-ups, say people familiar with the company. Microsoft General Manager Joe Doran declined to give details but said Microsoft has been studying the exchange model and "what it would take to build an exchange." But, he said, "it's still very early for the exchange concept to really catch on and drive to large scale."
Indeed, if the dream is to have the same kind of impact on advertising that spot markets had on commodities and stock markets on equities, one or more exchanges will need a critical mass of buyers and sellers. As with stock markets, "liquidity" is key for the ad exchanges: the more participants, the greater the chance of finding buyers and sellers.
But with a bevy of exchanges large and small, the industry risks not having a critical mass of buyers and sellers on any one exchange to make a viable market. "That's the thing that's uncertain," says analyst Greg Sterling of Sterling Market Intelligence in Oakland, Calif.
It's also unclear what percentage of their ads Web sites will be willing to sell through exchanges. Many industry executives say the exchanges are suited only for "remnant," or leftover ads and ad space that the biggest brands aren't interested in. Big advertisers generally want to have more control over where the online ads appear and who sees them.
With exchanges, "the underlying assumption to that is you're buying a commoditized product that anyone can sell you," says Steven Kaufman, senior vice president at Publicis Group SA's Digitas interactive agency. Many of the high-end ads that Digitas handles require human negotiation and tailoring before appearing on a Web site. "That's not coming through an exchange," he says.
Others disagree. Such high-end ads represent at most 10% of the ad market, counters AdECN CEO Bill Urschel. "And everything else is up for an exchange."
Write to Robert A. Guth at rob.guth@wsj.com and Kevin J. Delaney at kevin.delaney@wsj.com

Microsoft Surface

Microsoft Surface

Techdirt: Don't Look Now, But Old Media May Be Figuring This New Media Thing Out

Techdirt: Don't Look Now, But Old Media May Be Figuring This New Media Thing Out

Slashdot | Semantic Search Points To Better Relevancy

Semantic Search Points To Better Relevancy
ReadWriteWeb writes in to tell us about an article by Dr. Riza C. Berkan, founder and CEO of hakia.com, describing the promise of and potential for semantic search. This approach to providing more on-target search results contrasts with the dream of the semantic Web. Semantic search doesn't require all the Web page authors in the world to begin adding metadata; but it's not a sure thing that the researchers now developing the idea will get it right.

Hong Kong cracks down on spam - Yahoo! News

Hong Kong cracks down on spam - Yahoo! News

80% of Podcast Listeners Seek Out Products They Hear About

80% of Podcast Listeners Seek Out Products They Hear About

The second wave of video over the Internet | AlwaysOn

The second wave of video over the Internet

The first wave of Video over the Internet has been focused on streaming video technology. It was companies like YouTube and others that pulled video into mainstream Internet culture and is correspondingly driving ever increasing demand for broadband services. It has fueled the explosive growth in online video viewer ship with experts forecasting that the USA market will reach 157M viewers by 2010.

The second wave of video over the Internet will be driven by high quality live two way video communications technologies.

What The Social Media OS Strategy Means To Advertisers

What The Social Media OS Strategy Means To Advertisers

By Joe Marchese

Facebook has fired the starting gun signaling the race to social media's next evolution, gaining a significant edge in the race. The open call is for droves of driven, innovative and funded entrepreneurs to develop feature sets and functionality to improve the quality of Facebook life, rather than focusing their collective efforts on building Facebook competitors. I guess that's the nice thing about being the one that fires the starting gun; you can give yourself a nice head start. While Facebook's competitors are busy looking for ways to take advantage of the awesome power granted to them by being the hub of people's digital social lives, Facebook has begun to look for ways to live up to the responsibility that accompanies the power granted it. Facebook knows it can't fulfill its role as the Internet generation's social media OS alone. In essence Facebook is asking not what its community can do for Facebook, but what Facebook can do for its community.

By formally recognizing the role of third-party developers in the Facebook ecosystem, the company exponentially grows its research and development. Josh Kopelman spells it out nicely by putting some figures to it here. And by granting those vendors who are improving the lives of Facebook users the right to profit from their work, Facebook will get to work directly with those solving the issues of social media monetization. The thought leaders from advertisers and agencies will get the opportunity to collaborate with social media application and content developers, all within the Facebook ecosystem. Therefore, not only has Facebook created a seemingly endless virtual budget to research features and functionality for its community, the company has also created an equally endless virtual budget for the research and development of social media monetization methods. Eventually Facebook will be there to benefit when its partners crack various pieces of the social media monetization code. In the end, Facebook's open strategy will likely lead to it reaching its monetization potential long before those social networks that remain closed off in their search for (ironically) monetization.
Many other social media platforms will follow Facebook's lead by attempting to evolve into social media operating systems for their users. In fact, I strongly believe that If MySpace can find its tollbooth, it could quickly turn the game inside-out by not only allowing vendors in, but by actually helping them monetize. As social media players shift strategies, the questions advertisers have to ask themselves include: What are we as advertisers doing to match the pace of change in social media? How can advertising support the open social media ecosystem? What value can our advertising creative and our brands' social currency add to the social media ecosystem?

Facebook is doing its part, but the right strategy doesn't guarantee success. In order for Facebook's user-centric strategy to succeed, the company needs its advertising partners to share its user-centric vision. Just because Facebook isn't setting a price on admission doesn't mean its users won't set their own price. When was the last time you really set aside marketing goals for a second (I promise we will come back to them) and turned your team loose to figure out how they would improve the life of those social media publishers and consumers that are so sought after? When was the last time you, like Facebook, asked your staff not what social media communities can do for your brand -- but what your brand can do for social media communities? Advertisers need to start with this question and work backward to marketing goals. Providing value to social media communities will be the new cost to distribute marketing messages in the social media OS. It's a cost that Facebook is deferring to its users to collect on.

From The Times

May 24, 2007

Big Brother and an industry vision

Rhys Blakely: Analysis

Google’s investment in 23andMe, a company that aims to allow users to trawl their DNA online, points at a central strand in the search giant’s intellectual helix.

The start-up’s ultimate aim – to discover drugs that can be prescribed according to an individual’s unique genetic make-up – pinpoints Google’s number one fixation: the importance of personalisation.

The company’s vast fleet of datacentres already holds a huge amount of information on its users. This ranges from the contents of e-mails in its Gmail service, to credit card details through Google Checkout, its online payment system.

However, Eric Schmidt, Google’s chief executive, has insisted that he does not yet “know enough about you”. To put that right, and further sharpen Google’s ability to target consumers with the ads they are most likely to respond to, the company is stepping up its efforts to collect personal information on the web.

Related Links

• Google aims to search your genes

“This is the most important aspect of Google’s expansion,” Mr Schmidt said. He envisaged a day when Google will be able to advise users on everything from career moves to how they should spend their free time, based on the collected queries they tap into Google.com.

Despite the Big Brother connotations, it is a vision embraced across the industry.

Yahoo! has invested heavily in Panama, an advertising platform that will track in greater detail than ever before a user’s search history prior to an online transaction. The details extracted will guide advertisers on what search terms they should buy.

Meanwhile, new markets that trade records of online behaviour are emerging. WunderLOOP, a company backed by Niklas Zennström, the billionaire internet entrepreneur, recently launched the first “exchange for behavioural targeting-based online advertising”.

A “stock market” for logs of browsing habits, it allows website owners to trade records of consumers’ long-term behaviour. So armed, advertisers can ensure that a handpicked audience can see a particular campaign.

Other ploys will be more obvious. Autonomy, the search specialist, is exploring “transaction hijacking”, in which shoppers are monitored and informed, mid-purchase, if a better price is found elsewhere.

Google presents itself as a benign Big Brother. Bowing to pressure, it recently cut the length of time it holds search data to two years. Users have to opt in to its new generation of personal search tools and it will not pass user data on unless faced with “a valid legal order”.

Three quarters of its users are not aware that Google stores data on them, a recent survey found. The Electronic Frontier Foundation, an internet rights group, describes a list of search queries as “practically a printout of what’s going on in your brain”.

Which is exactly why these groups are so keen to get their hands on it.

Dawn of The Social Shopper

Solo Hunters, Social Gatherers and the Online Marketplace

By John P. Mello Jr.
E-Commerce Times
05/25/07 4:00 AM PT

"Online vendors of goods and services that ignore the social dimension, as exemplified by the 'social gatherer' archetype, are ignoring a potentially large revenue component," noted a recent Gartner report. "These vendors are, in a substantial sense, 'leaving money on the table,'" the report stated.

Social networking is popular on the Web. So is shopping. Imagine, then, the potential of Net shops that combine the two into a package called "social shopping."

Until recently, most designers of e-commerce sites have concentrated on catering to individual shoppers -- what the research firm Gartner (NYSE: IT) calls the "solo hunter."

Now, however, a new breed of online shopper -- the "social gatherer" -- is emerging who is looking for more interaction with people when they shop, Gartner revealed in a report released Tuesday.

Money Left on Table

"Online vendors of goods and services that ignore the social dimension, as exemplified by the 'social gatherer' archetype, are ignoring a potentially large revenue component," said the report.

"These vendors are, in a substantial sense, 'leaving money on the table,'" the report added.

It noted that for social shoppers, the journey can be more important than the destination. "Social shoppers seek not just artifacts or information for future use but also an enhanced emotional connection to other participants in the shopping experience," it explained.

Tale of Two Shoe Shoppers

"Despite a seeming lack of preoccupation with purchasing a particular item," the report continued, "it is possible that the total transaction amount in a social-shopping journey will exceed that of a solo foray; therefore, e-commerce vendors that ignore this dimension are leaving money on the table."

A solo hunter shopping for a pair of shoes just buys a pair of shoes, explained the author of the report, analyst Ray Valdes. A social gatherer shopping for shoes, on the other hand, may never buy them, but they'll spend two or three times the amount the solo shoppers spend on items they had no initial intention of buying.

"There's a large opportunity here for e-commerce vendors who can address that style of shopping," he told the E-Commerce Times.

One reason for the success of powerhouses like Amazon (Nasdaq: AMZN) and eBay (Nasdaq: EBAY) , he said, is that they incorporated elements of social shopping early in their development -- elements like user ratings and reviews.

The trend is hampered by current technology, Valdes asserted. "The limitations of technology on the Web today allow only indirect support for social shopping," he maintained. "The technology platform needs to evolve for more direct support in a more integrated manner."

Immersive Environments

What's that technology platform likely to look like? It will very likely look like the immersive virtual environment in Second Life.

"Immersive virtual environments have an advantage in supporting peer-to-peer interaction across multiple vendor locations and in enabling spontaneous human social engagement at varying levels of intimacy, allowing collaborative purchases to occur," the Gartner report explained.

An online virtual environment can both mirror and augment shopping in the real world, observed Alyssa LaRoche, president of Aimee Weber Studios, a design firm.

"You can both be sitting there shopping, but you don't have to ever leave your house," she said. "You can still have all the benefits of socializing with someone throughout that experience."

Explosive Growth

The word about social shopping has begun to resonate among online consumers, according to Manish Chandra, CEO of Kaboodle, a social shopping site.

In the last six months, he said, Kaboodle has seen a tenfold growth in unique visitors, from 100,000 in October 2006 to more than one million in March 2007.

"The shopping season last year really triggered our growth, and we've seen that explosive growth continuing," he told the E-Commerce Times.

The fastest growing sales on the Web, he noted, were in categories where taste and style -- the mother's milk of social shopping -- are just as important as price in determining a shopper's behavior.

"The shopping experience is quite primitive in those categories, and that's what's leading to the adoption of social shopping," he opined.

Doesn't Have a Future?

Social shopping could prove to be a disruptive technology for e-commerce, the Gartner report cautioned, a view not shared by David Galbraith, founder of the social shopping site Wist.com.

"In its current iteration, social shopping doesn't have a future," he told the E-Commerce Times.

Social shopping's appeal, as he sees it, is limited to niche markets and small-time vendors.

"Social shopping has a future for smaller vendors, but not for established brands," he said

Technorati Repositions as Social Search Engine · MarketingVOX

Technorati Repositions as Social Search Engine · MarketingVOX: "
Home » Archives » 2007 » May » 25 » Technorati Repositions as Social Search Engine...
Technorati Repositions as Social Search Engine

Blog search engine Technorati is repositioning itself as a social search engine, a sign they're staging site benefits for a possible sale, according to The Next Net.

In addition to blog posts, the site's search engine will draw from any media that's been tagged by users - photos, videos, music and events."

Slashdot | Sony Debuts Razor-Thin Flexible Display

Slashdot | Sony Debuts Razor-Thin Flexible Display
I've been waiting for this. I plan to design a T-Shirt with a thin wire and a small TV tuner chip in in the collar feeding the screen, which will be attached to the T-Shirt front. The shirt will then effectively display a serious of satellite and TV signals that are picked up and displayed in random 'scanner' fashion.
-jm

Slashdot | Is Email 'Bankrupt'?

Slashdot | Is Email 'Bankrupt'?
"The Washington Post writes about a Venture Capitalist and blogger, Fred Wilson, who recently declared 'e-mail bankruptcy', wiping out his inbox and starting over because he couldn't keep up. Spam is cited as one reason. There have been several public incidents, some cited in the article, where the flow of email is just too much to keep up. 'If there is a downside to completely turning a back on e-mail, it's not one many former users notice. Stanford computer science professor Donald E. Knuth started using e-mail in 1975 and stopped using it 15 years later. Knuth said he prefers to concentrate on writing books rather than be distracted by the steady stream of communication.' Is email just too hectic a communication form for some people? Is email dead?"

Online Ad Spending Hits New Record

MAY 25, 2007

Search and display continue to lead.

US Internet ad revenues totaled $16.9 billion in 2006, up 35% from 2005, according to the "Internet Advertising Revenue Report" from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC).

Search, display, classifieds and lead generation all grew, as performance-based and CPM pricing both increased.

Consumer advertisers continue to represent the largest category of Internet advertising spending.

"The results for 2006 show the Internet continues to offer marketers the widest spectrum of advertising formats, from search-based text ads to dynamic rich-media and broadband video ads," said Peter Petrusky of PricewaterhouseCoopers. "Online publishers may continue to experience growth as marketing budget allocations to all interactive forms continue to increase."

The numbers topped eMarketer's revised estimates for 2006 by half a billion dollars. The estimates were based on IAB and PWC data, for which the last full year measured had been 2005.

"One key market shift can be seen in how display ad spending grew at a higher rate than even paid search advertising," says eMarketer Senior Analyst David Hallerman. "Brand-oriented marketers are just starting to ramp up spending, and we'll see greater growth in that area over the next few years."

Advertising's Brave New World

Different Lineup of Players Emerges With Online's Rise

By EMILY STEEL
May 25, 2007; Page B1

For decades, advertising has been a relatively simple process dominated by a clubby world. Long-established advertising and media-buying agencies, most owned by half a dozen global giants, make TV or print ads and negotiate for airtime or space with TV networks or publications, most owned by a handful of other big media companies.

But as a series of recent high-profile deals makes clear, the emerging importance of digital advertising is making for a shifting and more complicated advertising terrain.

"The biggest innovation in the advertising industry during the last 70 years before digital was color TV," says Ajaz Ahmed, chairman and co-founder of independent digital marketing agency AKQA. "The agency of the future will be half a software company and half an entertainment company because that's the new landscape."

A host of newer firms from outside the traditional ad mainstream dominate the technology-rich process of making and delivering ads to the Web. And while TV networks, magazines and newspapers have a presence online, much of the Internet media is controlled by companies such as Google Inc. and Yahoo Inc.

Marketers -- seduced by the perception that Internet ads offer a more cost-effective way to reach specific consumers and measure results -- have shifted more of their ad budgets online. Internet advertising has grown into a $16.9 billion industry -- 5.9% of the $285 billion total U.S. advertising market in 2006, up from 4.7% in 2005, according to the Interactive Advertising Bureau.

To try to get a slice of that online spending, both traditional ad companies and Silicon Valley titans have battled for a stronger position in the digital-ad food chain. Google bought Internet-ad broker DoubleClick for $3.1 billion last month; Microsoft Corp. struck a deal to acquire Seattle-based online ad concern aQuantive for $6 billion last week; and ad giant WPP Group PLC last week acquired search-marketer and ad-network 24/7 Real Media Inc. for $649 million.

Much of online's allure can be traced to its precision. In television, for instance, media buyers from Madison Avenue try to place an ad on a TV show that attracts the highest concentration of target customers. Someone wanting to promote their wares to young women, for instance, might advertise on ABC's "Grey's Anatomy." But audience measures for television are, at best, rough approximations, based on surveys of a small number of viewers, and advertisers have always found it difficult to judge whether their costly TV ads succeed in driving sales.

Online, advertisers can be much more scientific in where they place their ads. Using behavioral targeting companies, such as independently owned Tacoda Inc. or Revenue Science Inc., marketers can track the online habits of potential customers. For instance, if a consumer clicks on two car sites then visits the Web site for Us Weekly magazine, car ads might show up on the magazine site, in addition to the car sites. That way the ads will appear in front of the person most likely to respond -- even when that person is on a site unrelated to cars.

"We might know what term they just searched on, which is essentially them raising their hand and saying give me information about this subject," says Jeff Lanctot, senior vice president of global media at digital marketing agency Avenue A/Razorfish, a unit of aQuantive.

What's more, the most popular category of online advertising -- paid search -- requires advertisers to pay only when a consumer has clicked on their spot. With paid search, which accounts for 40% of online ad spending, advertisers pay Internet search engines such as Google or Yahoo to post a link to their Web site next to a specific word or phrase that visitors plug into the search engine.

Up until now, paid search has benefited just a handful of players, particularly Google and Yahoo because those ads have mostly attracted smaller businesses that don't use ad agencies. With bigger companies becoming more involved in paid search, agencies and search-marketing firms are playing a greater role. Also firms have sprung up to help marketers design their Web sites to make it easier for search engines to understand what information appears there. The goal of this "search-engine optimization" is for a company's Web site to show up at the top of a search engine's free results listings when a person is looking for information related to that particular company or industry.

A more diverse cast of characters dominate the other forms of online advertising, including display ads -- such as banner ads -- online video and the various types of animated ads that dance across the screen. These ads are usually designed by digital ad agencies and then transported to various Web sites through a circuitous route often involving a number of technology-focused companies. It is this area that has seen most of the acquisition activity in recent weeks, as bigger ad players try to streamline the online advertising process.

For example, Avenue A/Razorfish bought ad space on a total of 863 individual sites last year for its clients, which include Kraft Foods Inc., Walt Disney Co. and Nike Inc. To line up all that space, Avenue A/Razorfish used firms that deal with hundreds or thousands of Web sites. These firms, called ad networks, buy space from sites and resell it to advertisers at a premium. Among the major ad networks are Advertising.com, acquired in 2004 by Time Warner Inc.'s AOL, and 24/7 Real Media.

In the middle of this process are another set of players, called "ad-serving firms," technology companies that get the ads from the advertiser to the Web sites that the ad network firms have lined up. The top two ad-serving companies are DoubleClick and Atlas, another unit of aQuantive. Ad-serving companies save the digital information that creates an online ad on a computer server and then deliver that data to the sites where marketers bought advertising space. This lets ad agencies change the contents of an online ad or where it runs on a site by switching that digital information on the computer server instead of communicating with each of the hundreds of sites where an ad might appear.

"Ad serving is kind of like oxygen. You need it for every major [online advertising campaign] that you run," says Sarah Fay, president of Aegis Group PLC's digital-marketing subsidiary, Isobar U.S.

Some ad-serving companies also have ad-network arms. DoubleClick, for example, provides both these services for advertisers and Web sites.

All of the major digital ad players also generate measures to track the effectiveness of campaigns. While in the traditional media, marketers assess response to their ads by surveying audiences before and after the ads have run, digital advertisers can gauge response within minutes by using a number of metrics -- including how many people clicked on an ad, the time a consumer spends with the ad, what a Web surfer does after viewing the ad.

If advertisers find that a certain creative component of the campaign isn't working or if a specific Web site isn't delivering, they can make a switch at the click of a button to try to improve the results. These data ultimately determine where advertisers spend money on the Web and is expected to become an increasingly important aspect of the industry as other aspects of the business -- such as delivering an ad -- become more streamlined.

"The Internet was built on little companies," says David Kenny, chairman and CEO of Digitas and digital strategy chief for Publicis Groupe SA. "Now that we've got big advertisers putting money on the Internet, they need big scalable operations."

Simon & Schuster eyes Internet videos to boost book sales

Simon & Schuster eyes Internet videos to boost book salesSimon & Schuster will launch an Internet channel in June featuring videos of authors discussing their books and inspiration, and describing the settings and context of different stories. "The book-publishing industry has to compete with the Internet now and publishers should be taking advantage of the Internet," said Ed McCoyd, director of digital policy at the Association of American Publishers. "I see so much of the industry going toward social networking and I think viral marketing can really take hold." CNET (5/24)

Online Shoppers' Loyalty Behavior Is Complex · MarketingVOX

Online Shoppers' Loyalty Behavior Is Complex · MarketingVOX: "Online Shoppers' Loyalty Behavior Is Complex
Consumers often seek the best value, and price is an important factor in determining purchase - but it's not the only factor, writes MarketingCharts.
Nearly half of online shoppers say they are 'somewhat loyal to certain merchants based on a combination of good value, superior service and the right mix of product,' according to the just-released DoubleClick Performics/e-tailing group 'Consumer Loyalty Survey.'
'Seven out of ten consumers shop multiple websites before making an online purchase to find the site offering the best deal,' said Stuart Frankel, president of DoubleClick Performics. Consumers want to feel they are getting the best value when buying online, including price, service and product mix, the study found.

Some other key findings from the study:
71% of shoppers browse multiple online stores prior to completing a purchase.
42% of shoppers price-shop a product via comparison engines.
48% of online shoppers surveyed describe their loyalty to merchants across channels (store, web, catalog) as somewhat loyal to certain merchants based on a combination of good value, superior service and the right mix of product.
70% belong to a frequent buyer/loyalty program.
53% rank discounts or exclusive offers for members as the most important feature of frequent buyer/loyalty programs. "

Facing a Battle With Ad Networks - Why Publishers Need To Take Control of Their Inventory

Written on
May 22nd 2007
Author
by Mark Josephson
In today’s market, publishers are challenged to find ways to expand beyond their organic growth to keep pace with increased competition for marketing dollars. The more inventory that there is to sell, the greater share of the advertising spend. Unfortunately, publishers are losing an uphill battle with large advertising networks for market share, largely due to the fact the networks can grow faster and bigger by aggregating thousands of other sites. Today advertising networks control significantly larger amounts of inventory in major verticals than do large publishers, which equates to a greater share of advertising dollars for the networks.
Consider this: if you asked the average person to name the top online sports source in the syndicated research rankings, you’d expect to hear answers like ESPN.com or FOX Sports. What you wouldn’t expect to hear is an ad network like Google AdSense, Advertising.com or Gorilla Nation. But the truth of the matter is that in top verticals like sports, automotive, real estate and entertainment, the big ad networks consistently beat out top Web publishers in terms of online traffic. The most recent Web traffic data from comScore (April 2007) reveals that advertising networks drew the majority of unique visitors. In some instances, the advertising networks had twice the number of unique visitors than the sites one would usually associate with that vertical. Who would doubt that ESPN.com isn’t the largest sports property? The list of top 50 most visited Web properties continues to include more ad networks, and large publishers need to take an aggressive stance against Google and the other advertising networks to wrest control over their inventory.
Ad networks are successful because they can manage and maintain strong relationships with lots of partners and advertisers. The fact that the networks have the flexibility to be more aggressive, and the single-minded focus to build scale, quickly puts the traditional publisher at an immediate disadvantage. So the question remains: How can large publishers take back control and gain immediate access to more inventory that they deserve?
One solution is for these publishers to create their own ad network, and partners such as Pulse 360 offer products like the Publisher Vertical Network (PVN) to make that a reality. Since large publishers have the brand recognition, resorces and advertiser relationships to create their own networks, they offer a unique, compelling solution for any smaller site. These sites, that now feel captive to the likes of AdSense, can join a new network for access to not just cost-per-click dollars, but CPM and video and other branded content. The largest publisher in any given vertical has the deepest relationships with endemic advertisers because their content resonates with users. As a result, they can sell inventory at higher rates than anyone else. By creating a PVN, the larger publisher can syndicate content and tools to each member site and link to them to increase their own inventory.
Quite simply, the Web’s best sites can beat the networks at their own game because, with a PVN, they have the resources to do so. It’s a win-win-win situation: large publishers gain immediate access to inventory they can sell; member sites who join a branded network have the opportunity to align with a larger, respected brand in their category to add more advertising revenue, access engaging content to enhance their site and increase their traffic; and advertisers have even more opportunities to find and target their customers online.
It’s time for publishers to step up and take ownership of what should be theirs.

Feature Presentation: Financial Page: The New Yorker

Feature Presentation: Financial Page: The New Yorker
Technology is supposed to make our lives easier, allowing us to do things more quickly and efficiently. But too often it seems to make things harder, leaving us with fifty-button remote controls, digital cameras with hundreds of mysterious features and book-length manuals, and cars with dashboard systems worthy of the space shuttle. This spiral of complexity, often called “feature creep,” costs consumers time, but it also costs businesses money. Product returns in the U.S. cost a hundred billion dollars a year, and a recent study by Elke den Ouden, of Philips Electronics, found that at least half of returned products have nothing wrong with them. Consumers just couldn’t figure out how to use them. Companies now know a great deal about problems of usability and consumer behavior, so why is it that feature creep proves unstoppable?

Internet ad revenue up 35% to $17 billion

One crucial element -- ability to deliver interested customers

Ryan Kim, Chronicle Staff Writer

Thursday, May 24, 2007

Internet advertising revenue, fueled by increases in classified ads, lead generation and display advertising, grew by 35 percent last year to $16.9 billion.

In the fourth quarter alone, $4.8 billion was spent on online advertising, a 33 percent increase over the same quarter a year earlier and the most for any quarter, according to a report by the Interactive Advertising Bureau.

The jump in revenue caps a 10-year span in which the Internet sector has gone from $907 million, or less than 1 percent of all advertising, to 5.9 percent of the $286 billion spent last year by advertisers.

The figures show a growing willingness by major advertisers to turn to online ads as an effective way to reach consumers, said Randall Rothenberg, advertising bureau president and CEO.

"We have every confidence that this growth trend will continue as marketers allocate more of their total marketing dollars to interactive and the industry delivers effective and innovative platforms for connecting with consumers," said Rothenberg.

Search ads, featured on sites like Google and Yahoo, continue to generate the most revenue for interactive advertising. Search ads generated $6.8 billion last year, or 40 percent of all online ad spending, a slight dip from the previous year, when they accounted for 41 percent of all online ad spending.

Display ads brought in $3.7 billion last year, or 22 percent of all online ad spending, while classified generated $3.1 billion, or 18 percent of all online ad spending.

The largest growth occurred in lead generation, which involves the delivery of interested customers to a company. That category grew by 73 percent to $1.3 billion, followed by classified ads, which grew by 48 percent.

Dean DeBiase, chairman and CEO of Fathom Online, a San Francisco digital marketer, said the jump in online ad spending represents a fundamental shift by advertisers, who now consider Internet advertising a core part of their strategy instead of a fringe experiment.

He said with about 70 percent of homes online, part of the growth is just companies following the migration of customers to the Internet. He also said the ability of online campaigns to deliver measurable data and performance feedback has made the Internet popular with advertisers.

"The most important things is the ability to know which half of your ad spend is working and what is not working," said DeBiase.

"But it goes beyond that. Now by geography, time of day, demographics, we can tell people how effective their ad spend is. With that, you can go after different demographics and pockets. Now that's real direct marketing."

Sweepstakes As Acquisition Tool: What Do You Really Win?

by Jamie Schissler, Monday, April 2, 2007
A LOT OF FOLKS ARE jazzed up these days about doing sweepstakes, particularly in the context of list building. And list building is itself all the rage in the context of a shifting advertising and media paradigm. Despite the critics who think email is passé, email is hot, hot, hot. Everyone, it seems, wants an opt-in subscriber list, and they want it now.
The tides are shifting in advertising as a consequence of changes in consumer attitudes towards, and consumption of, marketing and content. Mass media is on its way out -- at least mass media as we know it. Relationship marketing is in.
Marketing and advertising are feeling the gravitational pull of a model that has at its core relationship building, individual preferences, information-based content, and dialogue. And email is the powerhouse that serves all four. Brands must develop and cultivate their own unique audience with content that contains its own value proposition. Hence the increasing necessity to develop an opt-in database.
Marketers can see the logical progression of sweepstakes and promotions: The brand gains visibility by offering consumers a chance to win prizes, in exchange for their opt-in email addresses. But let's pause for a moment to evaluate the role and benefit of sweepstakes.
First, sweepstakes and promotions are short-term, high-impact motivators. A giveaway acts like a shot of adrenaline to your marketing efforts: it creates a burst of visibility and causes a traffic spike or exposure surge, but the impact can be expensive to sustain. Sweepstakes can extend the relationship with consumers who are already engaged with your brand, but by themselves do not typically create strong acquisition returns.
Second, incentivized opt-ins tend to be less responsive than consumers who opt-in as a result of brand values and identity (service, quality, value, experience, etc). Obtaining opt-ins through a promotion or incentive channel is akin to buying a friend rather than developing a friendship. "Hey, I'll buy you dinner if you come out with me Friday night!" Sure, they may go out with you in return for the free dinner, but a relationship? Don't hold your breath waiting for the phone to ring next week. In email terms, these "dates" have a propensity to be low responders to future programs. (Be careful not to degrade your brand by conditioning consumers to an endless cycle of promotions and discounts. Once you go down that path it will take a very long time to reverse.)
Third, sweepstakes can be a costly acquisition proposition. By the time you add in prize costs, prize fulfillment, sweepstakes administration, media spend to promote the sweepstakes, creative, and execution, you will most likely wind up paying a lot more per email address than you need to. Understand what other acquisitions tactics, such as list rental and co-registration, will yield, and be sure to account for all costs when developing your acquisition strategy.
Fourth, you have to have a program to support those people who sign up. If you ask your target to opt-in to "receive valuable information and discounts," you must have a communication plan in place to deliver on that promise. Budget for, plan, and set up your ongoing email program before soliciting names. I see too many brands that develop promotion campaigns with a primary or secondary goal of acquisition, only to have to throw those names away a short time later because they have either not developed a communication plan, or have no remaining budget to do so.
Having worked in the promotion marketing space, I love sweepstakes. They should be a staple in every brand and marketer's toolbox, and I've seen them executed with tremendous success. But just as you wouldn't use a tape measure to drive a nail, sweepstakes are not particularly effective for database growth and development. As a promotional strategy, they are great; as an acquisition strategy, less so. Let sweepstakes supplement your acquisition activities, not spearhead them.
Jamie Schissler is Strategy Director at Avenue A Razorfish.

M&A in the Digital Ad Sector is Smoking Hot; Here's Your Handy Future-Take-Out List

from Internet Outsider by Jason Jones (May 17th, 2007)

Jason Jones: The digital advertising industry consolidation continues. Interestingly, most of the acquisitions have been cash deals. Why aren't the big guys using their pricey stocks? Maybe the acquirees have negotiating leverage. (Or maybe the acquirors are hallucinating that their stocks are undervalued).

A list of recent M&A in the sector is below. But first, here are the single folks still waiting to be scooped up:

Acquantive, Valueclick, Burst Media, and AdPepper, the latter two of which trade on London's AIM. How much might the U.S. ones go for? AQNT is worth $44 if you use the TFSM take-out multiple (23x), $60 if you use the DCLK multiple (33x), and $75 if you use the Right Media multiple (10x EV/Revs). VCLK is worth $44 if you use the TFSM multiple, $66 if you use DCLK, $70 if you use Right Media. And then of course there are all the private beauties: Blue Lithium, Tacoda, Efficient Frontier, Did-It, etc. Go to it, bankers!

Recent Digital Advertising M&A

Google for Doubleclick: $3.1b cash (32x '07 EBITDA - my estimate) - ad serving, SEM, affiliate network

Publicis for Digitas (DTAS): $1.3b cash (16x '07 EBITDA) - digital ad agency

Yahoo for 80% Right Media: $680m cash & stock - implied value = $850m (10x revs - rumored value) - ad media exchange

WPP for 24/7 Real Media (TFSM): $649m cash (23x '07 EBITDA) - media network, ad serving, SEM

Aquantive for Accipiter: $30m - publisher side ad server

Aquantive for Duke Digital Marketing: $8m + earnout - European digital ad agency

AOL for AdTech: terms undisclosed - European ad server

Aegis for Trigger Communications: terms undisclosed - digital ad agency

Fox Interactive Media for Strategic Data Corp: terms undisclosed - publisher side ad server and site optimization

Doubleclick for Falk eSolutions: terms undisclosed - European ad server

Aquantive for DNA (UK), e-Crusade (Hong Kong/Shanghai), Amnesia (Australia), Neue Digitale (Germany)

Web Revenue Up 35%

May 23, 2007
By Brian Morrissey (Source: AdWeek)

IAB: Search and display revenue both rose more than 30 percent in 2006.

NEW YORK The Web advertising industry had its best year ever in 2006, climbing 35 percent to $16.9 billion in overall revenue, according to the Internet Advertising Bureau.

That increase was fueled at least in part by record fourth-quarter ad revenue of $4.8 billion. Both brand-oriented display ads and search placements saw similar strong growth.

The IAB said search revenue for the year was $6.8 billion, up 31 percent from a year earlier. Display revenue was $5.4 billion, also up 31 percent. Search advertising's share of the overall market fell slightly from 41 percent to 40 percent.

The report showed the Web making progress adding brand-advertising dollars to complement the response-oriented ads that have typified the market. Packaged-goods advertisers showed the highest growth rates among industries, earmarking $1.4 billion to interactive, more than doubling spending in 2005. Automakers also increased their already strong expenditures, with revenue from car brands rising 48 percent to $3.7 billion.

The report also paints the picture of a maturing industry. Fourth-quarter revenue grew 14 percent from the third quarter, similar to the 15 percent growth rate of the past two years' fourth quarters. The industry also remains concentrated among the top sellers, which accounted for 69 percent of revenue.

"We have every confidence this growth will continue as marketers allocate more of their total marketing dollars to interactive and the industry delivers effective and innovative platforms for connecting with consumers," Randall Rothenberg, the IAB's CEO, said in a statement.

According to the IAB, the Web now accounts for about 5.9 percent of overall ad spending, closing in on radio, which generates $20.8 million in ad revenue.

The IAB prepares the report with accounting firm PricewaterhouseCoopers.

Is Think Partnership More Valuable Than ValueClick?

Posted on May 22nd, 2007 with stocks: THK, VCLK

John Gilliam submits: There seems to be a great deal of interest in ValueClick (VCLK) today and many are suggesting that it could be a target for Microsoft ( MSFT), or perhaps one of the big players that wants to keep MSFT from buying VCLK.

On its face, such a deal makes sense, as MSFT has given us good evidence of their intent to be a player in this space with their $6 billion acquisition of AQNT. Additionally, the value in VCLK's assets are very complementary to the assets of aQuantive (AQNT), with very little overlap. Remember that these two almost merged last year for this very reason.

I believe that the $4 billion + price that would likely be necessary for a purchase of VCLK will make MSFT consider other alternatives, including a very small player in this space that has built a technology platform that has attracted some high profile customers, some whom have actually migrated from ValueClick.

Think Partnership (THK) has assets very similar to those ValueClick assets that would be so complementary to AQNT, primarily the Lead Generation business and the affiliate marketing platform. In each case, ValueClick's business is considerably larger than THK's, but I would submit to you that MSFT would find more value in a purchase of THK.

In the Lead Generation business, ValueClick is one of the largest players with its WebClients business. However, the practices in use at WebClients have attracted the ire of the Federal Trade Commission, as the company announced an FTC investigation of their practices just Friday. THK has a very strong and growing Lead gen business with its iLead subsidiary. The growth numbers are not as impressive the last couple of quarters because the company made a decision to eschew those practices that were attracting the negative FTC attention, but they appear to be back on track and growing again with their "white hat" approach. Its hard to imagine that MSFT or anyone else would want to buy into an FTC inquiry if they could get the lead gen platform without such negative exposure.

The Affiliate business is the other unique business ValueClick offers that would be complimentary to AQNT's business. ValueClick's affiliate platform has long been the leader in the affiliate marketing business. However, THK's "Kowabunga" division has developed a platform that many in the industry believe provides the best technology and the best value proposition. Recent happenings suggest that may be true. Yahoo recently chose the Kowabunga platform to power its affiliate business. Intuit was using the ValueClick affiliate platform, but migrated to THK's platform just a few months ago. Further, MSFT is launching a new affiliate program that will be using THK's Kowabunga platform - its live on the web as of Friday though it has not had the official launch yet. Thus, Microsoft, Yahoo and Intuit have recently had the opportunity to evaluate the players in the affiliate marketing space and each has ch! osen THK's Kowabunga platform over the VLCK platform.

One key asset owned by THK that has no comparable at VCLK or any other company is its proprietary click fraud prevention technology provided through its "ValidClick" subsidiary. The company owns the only "in the click stream" click fraud prevention technology currently in use. Microsoft and Interactive's Ask.com have been rumored to covet this technology as a value proposition differentiator for advertisers and publishers versus Google and Yahoo.

The ValidClick technology built out to a scale useable by large networks, its private label pay per click platform and its general availability to third parties for licensing are all fairly recent occurrences - it simply has not existed long enough to gain the traction necessary have a material impact on THK's financials. If MSFT or one of the bigger players decided they wanted to own this technology, now would be ! the time to buy it - before it becomes widely appreciated and ! before i t is monetized to its potential.

The bottom line is that a potential buyer doing their due diligence on ValueClick will likely stumble upon the Think Partnership comparisons. With the price tag of a ValueClick acquisition likely pushing well into the $4 Billion + range - one could surmise that they might consider investing $500 million - $600 million instead?

I cannot say at what price THK management (who own a large percentage of the shares outstanding), would sell the company. However, with its current market cap in the $200 million range, the recent deal valuations ranging from 1)TFSM at 31x 2007 EBITDA to the higher end of 2) AQNT at 45x 2007 EBITDA would place a value for THK in the $600 - $900 million range. It is hard to imagine that THK management would turn down the premium that MSFT or others might be willing to pay to own these assets