Friday, February 29, 2008
Making sense of the web's fast-growing but fragmented video audience isn't easy. But the truth may be that reach is already here. It's just up to the marketers to find it.
At some point in my life 8 p.m. stopped being all that important. When I was a kid, primetime defined my media world, and I can pretty much chart what I know about pop culture from the shows I watched, all of which aired in that three-hour block called primetime.
Sad to say, but when the clock struck 8 p.m., a near Pavlovian response took hold as I raced to the TV to find the shows that defined my generation.
But fragmentation has eviscerated that shared media environment, and the on-demand culture of the web has made time irrelevant.
Is this a bad thing? No. Consumers seem to love it. Media companies, though stunned by how niche their audiences have become, seem to be adapting, and marketers are turning to technology companies to give them the reach they came to expect in the days of network TV.
And so it appeared that everyone in the media triangle (consumers, content producers and marketers) was coping -- with varying degrees of success -- in an increasingly fragmented world. True, a handful dinosaurs masquerading as media executives still insisted on a primetime audience, but that idea -- that users would actually band together for a shared experience subject to the dictates of a clock -- seemed laughable at best.
But then something weird happened -- at least, if you believe a piece in The New York Times.
It turns out that the web hasn't killed primetime after all. But like so many things on the internet, it's not what you think.
For starters, the web's primetime (if there is one, more on that in a bit), is a midday event. What some refer to as dayparting and others call video snacking is actually a trend of students, office workers, housewives and possibly the perpetually unemployed turning away from the TV and embracing new media in a big way.
It's noon; do you know who's looking at your ads?
Speaking mostly to publishers, The New York Times found that there is a growing push to get content up in time for a midday audience.
"Go take a walk around your office [at lunchtime]," Alan Wurtzel, head of research for NBC told the paper. "Out of 20 people, I'm going to guarantee that five are going to be on some sort of site that is not work-related."
According to The New York Times, portals like AOL and Yahoo have taken note of the trend, gearing their content toward a noon audience.
For Rob Barnett, CEO of MyDamnChannel, there's little doubt that there's such a thing as a midday video spike.
"We've been able to prove that noon -- no matter what geographic region you're looking at -- is the new primetime," Barnett says. "Wherever you look, there's a significant spike around noon."
In fact, one of Barnett's shows, "Horrible People," has a decidedly soap opera quality to it on the theory that midday audiences may have shifted platforms but kept their taste in content pretty much the same.
Not so fast
But not everyone agrees with Barnett's assessment, and numbers for video snacking seem hard to come by.
YouTube, the 800-pound gorilla of video sites, boldly declares that all times are primetime, saying it doesn't have publicly available data on when viewers are watching content. A YouTube spokesperson added that the site's audience is a global one and the concept of primetime is both dated and irrelevant.
According to comScore, one of the few firms able to give specific data on video consumption by time of day, there is a midday peak, with 37 million unique viewers looking at web video in the midday block. By comparison, comScore reports that the web's total video audience is about 19 million in the morning, with about the same number of viewers in the evening.
Cory Kronengold, director of marketing and communications for Tremor Media, a firm that specializes in placing ads in videos, confirms that there is a midday spike. But, he says, midday viewing is hard to quantify because of the geographic spread, and the spike occurs across all ad formats.
"I’d hardly call it the 'new primetime' because it's video snacking -- people watching news clips, the latest webisode or viral hit," Kronengold says. "They are blasting through more web pages and getting more ads, but not necessarily mimicking the primetime 'lean back' experience. Maybe its primetime for webisodes."
And then there's Break.com, the male-focused video portal-turned ad network. Break.com CEO Keith Richman says his site has actually seen a midday spike in the past, but what's happening now is actually a "flattening out of the day."
"We're seeing more people at all times," Richman says. "The peaks are much less than they used to be. From a marketer's standpoint, you want a specific person and you want to know the time that you're going to reach them. What I think [is happening with online video] is that marketers have a longer period of time over the day, rather than saying Thursday night primetime."
According to Richman, Break.com updates four times per day (10 a.m., 1 p.m., 4 p.m. and 10 p.m.), but he says that's got more to do with users developing viewing habits than publishers and marketers creating an artificial primetime.
So, perhaps it's the viewers that want primetime back. Or, if not primetime, something akin to a "regular time" when they can incorporate online video into their everyday habits. While that's good news for the medium -- the idea that web video is routine as opposed to a novelty -- it's hardly a sea change away from the on-demand world and back to a more temporal consumption pattern.
But there's another school of thought that says it's not the users who want their primetime back. Instead, it's reach-challenged marketers who are longing for the days of a primetime audience.
"Audiences are enjoying their favorite programs on their own schedule and it's not just during their lunch break," reports Greg Mand, VP of sales for PodShow, when asked if he's seeing dayparting among his audience.
While Mand says PodShow's users are eagerly embracing the on-demand universe, a handful of advertisers have requested time-specific slots. But according to Mand, that kind of thinking won't keep pace with the fast-evolving market.
"Though a ton of folks consume online content at the office, I think we'll see usage spread out more evenly across the day and night as the market develops," Mand explains.
If dayparting for video is really just wishful thinking on the part of marketers, then the problem may go beyond simple numbers.
Think of it this way: Marketers who formerly used TV to obtain reach in the past probably didn't sweat reach as much as their digital counterparts do today. If you wanted 10 million viewers in the 1980s, Nielsen could tell you which network show had that number with the demographics you were looking for. The data may not have been exact, but for marketers, it certainly was easy to come by.
But there's no such thing as a one-stop-shop for content today. What's out there is a universe of publishers and ad networks, regular viewers and irregular viewers. And if that's the case, the new primetime is really just a quest to find "M*A*S*H" or "Seinfeld" where it does not -- and likely never will -- exist.
So what does all this mean for marketers?
It's not fair to call the idea of a new digital primetime a myth. For one thing, there are some numbers (though better ones are required) that point to a midday traffic spike, at least at some sites.
Anecdotally, the NBC researcher who told The New York Times that office workers are consuming a lot of video at lunch, seems to be right on the money. Scanning my office and talking to friends and family, I've found that a lot of people are watching internet video in the middle of the day.
But it's hard to say that there's any single thing that people are watching. In fact, it's hard to say that there's any single thing people are watching at anytime of the day. And so it stands to reason that midday is just as fragmented as all other times.
So what's a marketer to do? One piece of advice may be as simple as get over it. Like the 30-second spot, the idea of primetime may also be a digital casualty.
According to Keith Richman, primetime might exist for a core audience, but the bulk of the viewers have become untethered. That assessment seems to jibe with Rob Barnett, the CEO of MyDamnChannel, who insists audiences are embracing a new primetime on the web. According to Barnett, MyDamnChannel uses its regular publishing schedule to build an audience that is loyal to both its site and specific shows. Where the two part ways, it seems, is the degree to which time-specific publication can develop and drive an audience.
But marketers may need to keep their eye on a somewhat different -- and more complex -- ball. Marketers will have to ask whether they're buying an audience, as defined by content alone, or if they're buying eyeballs, which means creating a hybrid of content, time and targeting to obtain reach.
Online video has taken flack for not being able to deliver reach. But the truth may be that reach is already here. It's just up to the marketers to find it now.
Thursday, February 28, 2008
AzoogleAds, an online performance-based advertising network, said it plans to expand into the European marketplace through a charter agreement with 77Agency, a London based new media marketing agency.
“We obviously have tons of direct relationships here in America, but we really needed a partner like 77Agency to bring some of those relationships [outside of the US] under the tent for us,” said Mike Sprouse, CMO of AzoogleAds. “There's a significant opportunity [in the European marketplace] for us to expand.”
Through the relationship, AzoogleAds will be able to increase the number of international advertisers — including those in the financial services, retail and travel markets — in its network. AzoogleAds' publishers will also be able to opt in to receive Web advertising inventory as a result of the partnership, according to the company.
“AzoogleAds is uniquely capable of providing our advertisers with targeted distribution,” said Marco Corsaro of 77Agency, in a statement. “In addition, this agreement allows 77Agency to establish a presence in North America.”
Online marketing services firm Datran Media has released StormPost 4.0, an expanded version of its StormPost platform that includes social media assets.
The updated platform merges Facebook social marketing tools with analytics and ad inventory management enhancements in a move to aid marketers to combine e-mail and database marketing with social media. With StormPost's Facebook tool, marketers can send personalized mass communications to social media content subscribers.
“We've found that there are folks who spend a lot of time on Facebook and do a lot of messaging there,” said Dave Hendricks, VP of marketing and strategy at Datran Media. “So we wanted to build a tool that would give marketers the opportunity to message there. It works great since Facebook is based on e-mail addresses and accepts messages from outside systems.”
While it is still early to say who will adopt this technology, Datran Media client Lionsgate, a film production company, has expressed interest in the product.
Other enhancements to StormPost 4.0 include upgrades to its user interface, trend-based reporting and inventory management features.
It can be argued that the need for an ad seller to have its own ad exchange was one of the driving forces behind much of the recent M&A activity in the digital communications marketplace. Right Media and DoubleClick have both been acquired, and the industry trades buzzed about how exchanges were the future of buying and selling media.
I'm a big believer in exchanges myself, and at my agency, we're staying ahead of the curve by getting involved with all the major players and kicking tires as new features are introduced to exchange-based buyers. And we've had our share of difficulties. Largely, though, those problems are being addressed, and it won't be long before the tepid reaction to exchange-based buying warms up.
Here are some of the issues on the table:
Not enough transparency
An issue common among many exchanges is transparency, or lack thereof, especially where the identity of the seller is concerned. Public awareness of the fact that a premium-brand site needs to get rid of some remnant inventory quickly is not something that many publishers want disclosed. They think it cheapens their brand and presents problems with respect to comparative CPMs that various advertisers pay. Think about it -- no one wants their top advertiser to find out that another buyer who has never advertised on the site before managed to book inventory at 1/10th the rate through an exchange. It's not considered good for business.
This mentality leads a number of publishers to mask their identities. From the buyer perspective, it looks like the exchange is carrying a lot more trash inventory from undisclosed sellers than it is from disclosed branded sites. And that can be problematic. Many brand advertisers disqualify undisclosed ad deals as a matter of practice. In the case of exchanges that allow undisclosed sellers, there might be slim pickings for the brand-conscious advertiser.
Thankfully, this problem is being solved by the free market. As more publishers find regular buyers through exchanges, we have seen an uptick in the number of sellers willing to disclose their identity through the exchange. This behavior is usually rewarded with a boost to the CPM the buyer is willing to pay. The invisible hand of capitalism will solve this problem for everyone but publishers with ultra-premium brands.
"If you don't watch it carefully, budgets can quickly get out of hand," was the quote delivered by one of my media supes when talking about a popular exchange. Much like a Google AdWords account, budgets need to be set, capped and watched very carefully in order to ensure allocated funds are spent fully, and that spends don't go over budget. Yes, there are mechanisms in place to keep spending under control, but the parameters don't always line up with the limits media buyers need to impose over time.
Thankfully, technology can easily solve this problem, and exchanges are working to make sure delivery stays as close to specified budgets as possible. Right now, many exchange platforms are a far cry from "set it and forget it," but we're getting there.
Exchange inventory often has the reputation of being -- how shall I put it delicately? -- not exactly top-tier. Some clients and prospects we've talked to about exchanges initially reacted poorly to the idea but have since warmed up to the idea after we've showed them that inventory on top-tier sites can be bought through exchanges at a discount.
Again, as more publishers get aboard with exchanges and disclose their identities, the stigma will begin to vanish, particularly when agencies are able to increase efficiencies by getting better rates. Over the long haul, agency services may become more competitive (cost-wise) as agencies streamline their process and incorporate exchanges into their day-to-day media buying processes.
So, while exchanges have yet to make a huge splash, I wouldn't look at them as a flash in the pan, either. Remember that they're fighting years' worth of institutional inertia. The way to combat all that inertia is by showing significantly increased efficiency, which they are. So it's only a matter of time.
Meets a business objective: First and foremost, any marketing campaign or activity should match with a business objective, regardless of the tools being used.
Supports Community Goals: Every community is different, and each has unique goals (from supporting products, to each other, or to just be entertained) the campaign focus should therefore meet the needs of the community, before the needs of the marketer. Effective campaigns will first understand the core drivers, interests, and rituals of the community and learn how to meet those desires. (Expanded by Laurel Papworth)
Encourage Member Interaction: The most successful social networking campaigns and efforts involve the audience.
Quickly scale: Social networks are designed for information to quickly move from member to member, so campaigns that lean on these capabilities perform the best. These attributes known as Velocity, Viralness, and Spread are key.
Utilize Media: In some campaigns, the best way to get members to return is to offer them media. Depending on demographics and community needs, this could be audio, videos, or demos
Foster self-expression or communication: Members in social networks like to communicate with each other, or self-express. As a result, campaigns should satisfy these needs with the appropriate tools
Offer a satisfying User Experience: This encompasses the overall experience of the campaign, the content and navigation items should be where expected, the language familiar to the audience, and overall look and feel of the site appeasing.
Provide longer term utility: Successful campaigns have a longer term value, rather than a short term ‘disposble campaign”. These campaigns add value by being a useful application to the members, rather than just quick dose of entertainment.
Enhance Value as Community participants: As more people contribute or interact with the campaign, the value is increased. This can be in the form of content that is created by the community, contests, voting, or games.
Integration with other marketing activities: Successful marketing campaigns aren’t single channel, in fact they utilizie multiple channels and mediums to enhance the overall activity. The same thing applies to marketing campaigns on social networks, those that are promoted from other locations such as (corporate websites, email newsletter, blogs, podcasts) outside fo the social network have a great chance for success.
Maintain agility during the campaign: Social networks are living, breathing organisms made up of real people connecting with each other. Marketing campaigns also should share these attributes and show be flexible to change in-flight, yield to legitimate requests or complaints of the community. Those campaigns that reflect the same dynamic behavior as human interaction have a higher chance to be interacted –and accepted –by the community. (Submitted by Graham)
Company Participation: In some cases, companies that participate in the discussions or conversations will yield to a more successful marketing campaign. Activities can range from recognition, company interaction, or attention to members perhaps from a community manager (Submitted by Whitney McNamara, Esther Lim, Crimson Consulting, Warren Sukernek)
You add your attribute: Please leave a comment below, I welcome and respect your opinion. If you’re from a vendor in this space, feel free to leave your company name or email so I can properly credit you.
full post: http://www.web-strategist.com/blog/2008/02/19/what-makes-a-marketing-campaign-on-social-networks-successful/
Wednesday, February 27, 2008
In an hour long interview posted today about the Semantic Web, W3C Director Tim Berners-Lee says all the pieces are in place to move full steam ahead and realize the potential of a world of structured, machine readable data. Available as a part of the Talking with Talis semantic web podcast series, the interview (listen here) is summarized on interviewer Paul Miller's new ZDNet blog dedicated to the semantic web. A full transcript is available here.
It's an important conversation and a good introduction to what the semantic web is. Also notable is the way that Berners-Lee sees Semantics and Data Portability as very related. Some highlights are excerpted below.
My standard explanation of the value of the Semantic Web is this:
Once our software is capable of deriving meaning from web pages it looks at for us, then there's a whole lot of work that will already be done, allowing our human, creative minds to reach new heights.
In the interview with Miller, however, Berners-Lee emphasized that it's not just about web pages. He told Miller that that the core pieces are in place today for developers to build robust Semantic Web applications;
“I think… we’ve got all the pieces to be able to go ahead and do pretty much everything… [Y]ou should be able to implement a huge amount of the dream, we should be able to get huge benefits from interoperability using what we’ve got. So, people are realizing it’s time to just go do it.”
On the topic of challenges still faced, Berners-Lee said:
“There’s an awful lot of data out there. And I think, one of the huge misunderstandings about the Semantic Web is, ‘oh, the Semantic Web is going to involve us all going to our HTML pages and marking them up to put semantics in them.’ Now, there’s an important thread there, but to my mind, it’s actually a very minor part of it. Because I’m not going to hold my breath while other people put semantics in by hand… So, where is the data going to come from? It’s already there. It’s in databases…”
Other topics of the interview include whether leading social networks are likely to implement semantic web technologies, how semweb engagement benefits companies and what users can do to move the technology forward.
We've cover the Semantic Web extensively here at RWW. See below for a list of posts on the topic.
"If financial advertisers pull back their online ad spending it's going to have an impact on all the companies receiving a share of that money," said Pete Petrusky, an online advertising analyst with PriceWaterhouseCoopers.
Still, Petrusky and others say that in a recession, search advertising should remain strong because it provides a more immediate return for marketers compared with traditional advertising.
"Our experience is that on the search side, any performance-based media is less likely to be affected because marketers are paying on a price per lead. Our feeling is that as ad budgets get cut--and if the economy gets soft they will get cut--performance will less likely be cut than general impression or branding ads," said Geoff Yang, a venture capitalist and partner at Redpoint Ventures, which has investments in search companies Oodle.com and TheFind.com.
Yang added that the industry might see 10 percent cutbacks across the board in such an event, and that his companies are already seeing signs of recession in the online advertising business.
Other data backs that less-than-gloomy notion. A recent report from JupiterResearch said financial services would continue to be the strongest category for online ad spending. (The companies typically split their online budgets 50/50 between paid search and display ads, according to the research firm.) Financial services will boost online ad spending from $3.5 billion in 2007 to $6.3 billion in 2012, a rise of 76 percent with a compound annual growth rate of 12 percent, according to JupiterResearch.
Certainly, LendingTree's marketing team "pulls levers at all hours of the day" to respond to market changes, Vail said. It's just that online marketers can change gears in paid search advertising with more ease and speed (without contract penalties by the search engines) than banner-ad campaigns, she said. Vail clarified that the company, which has lost about 60 percent of its staff since May, hasn't made any drastic cuts to its online ad spending.
Executives in the online performance advertising business are less clear about how much mortgage lenders have cut their spending. But at least one online ad executive said ad aggregators like LowerMyBills.com, which is owned by Experian, and NexTag aren't buying the same amount of inventory that they once did.
One shift is already happening. Aggregators are beginning to offset a downturn in the mortgage business by advertising education opportunities, as part of a philosophy that when the economy sours, people turn to education. LendingTree and NexTag are both moving into the education lead generation market, according to the source. NexTag and LowerMyBills.com didn't respond immediately to requests for comment.
Similarly, one ad company has noticed that auto lending advertising has picked up in recent months. The thinking behind that change is that people who were previously prepared to go into debt for a home--now without that option--are looking at car debt instead.
"Mortgage brokers are collapsing daily and the business is moving back to where it belongs, at the banks," said one insider who asked to remain anonymous. "How it will shake out for the overall business will be interesting; there isn't enough history to predict."
The day after the federal government cut interest rates, LendingTree.com saw record traffic to its site for connecting borrowers and lenders.
As a result, the marketing team at LendingTree pulled back on search engine advertising campaigns that are used to draw visitors, according to company spokeswoman Allison Vail.
"With the fed changes in January, we were driving natural traffic. It's smarter for us," said Vail, whose Charlotte, N.C., company can pay an average of $2.70 per click for a search engine listing on Google or Yahoo, according to industry estimates.
Trends from search-engine companies and some anecdotal evidence suggests that the biggest buyers of paid search and online advertising--financial services companies--have cut back on spending online in the face of a housing crunch. It seems like an obvious shift, but one that spooked financial analysts enough last year to
Signs of slowing growth in spending by financial services companies haven't appeared until the first quarter of this year. According to research firm Nielsen Online, spending growth in the sector plummeted year over year in January 2008 compared with the previous year's rise. Financial services firms spent roughly $132 million on online ads--including paid search and banner ads--in January 2007, up 58 percent from the comparable month in 2006. But this January, overall spending in the category went up year over year by 12.7 percent to roughly $149 million, according to Nielsen.
Efficient Frontier, one of the largest buyers of paid search listings for marketers, has traced similar trends more specific to the search industry, but with even less percentage growth. Ellen Siminoff, chairman of Efficient Frontier, said search advertising spending in the financial sector has typically risen by 30 percent to 50 percent annually, but this year it's either flat or down for some companies. It's no wonder with companies like LendingTree and Countrywide struggling in a housing crisis. From January 2006 to January 2007, credit and mortgage advertisers raised their spending by 24 percent, but this year, their spending has risen only 3 percent year over year, according to its data.
"It's either not the kind of growth we've seen in the past or there are spending changes altogether," Siminoff said.
How that might play out for the biggest search engines, Yahoo and Google, remains to be seen. Yahoo declined to comment for this story, and Google did not immediately respond to requests for comment.
The financial services sector spends as much as $2.7 billion annually on online advertising in the United States, and about one-third of that pie, or $900 million, is related to mortgages, according to estimates by Oppenheimer. Between 30 percent and 45 percent of those advertising dollars gets funneled into paid search and for that reason, Oppenheimer analyst Sandeep Aggarwal said, any pullback could affect earnings of sites that depend on paid search for revenue.
Siminoff and others were positive that growth in spending in other markets would offset any losses from the financial sector.
"Yahoo has bigger issues by being distracted by what's going on with Microsoft, but retail advertising spending is still strong," Siminoff said. "I do not think Google would be hugely impacted because they have enough growth outside the United States."
This week, Google's stock price fell by about 8 percent on fears that people weren't paying as much attention to its search engine ads. Research firm ComScore said this week that it tracked about flat growth in advertisements viewed on Google pages from January 2007 to January 2008. Google shares also fell on analysts' concerns that its overseas growth wouldn't be as strong this quarter.
The financial services spending slowdown could add to that concern. Financial services are the highest-spending category in online advertising, accounting for 15 percent to 20 percent of the revenue annually in the United States, according to figures from PriceWaterhouseCoopers and the Interactive Advertising Bureau. And the sector pays among the highest rates for search listings--nearly six times that of retail advertisers, according to industry estimates.
The average cost per click (or the amount the advertiser pays per click) for a mortgage or credit services ad in Web search results is $2.70, according to figures from Efficient Frontier. That's more than seven times what a retailer pays at about 36 cents per search click and almost four times what travel marketers pay at 65 cents per click. So cost-cutting in the lending sector is more meaningful in terms of dollars than cutbacks in retail, travel, or dating ads.
Similarly, financial services companies pay an average of $1.24 per click when their text ad appears next to related content. In comparison, retailers pay 24 cents per click and auto companies pay 58 cents per click for the same deal.
The ads will be supported by DoubleClick Rich Media enabled HD Video and the latest Adobe Flash technology, which will simultaneously boost video performance and tamp down unwieldy video file sizes, the company says.
This latest ad coup allows consumers to launch full-screen HD videos from banner ad units – without sacrificing quality or long download times.
“While video has proven itself as an effective form of online advertising, advertisers have had to sacrifice video quality to use the medium,” said Ari Paparo, vice president of advertiser solutions at DoubleClick. “This new feature, powered by Adobe Flash technology, gave Epson the ability to showcase their brand in the highest quality available and maximize the effectiveness of rich media ad campaigns with eye-popping video.”
Epson is the first company to implement DoubleClick Rich Media with HD Video as part of its whimsical “Epsonality” ad campaign, created by Butler, Shine, Stern & Partners.
“Throughout this campaign, we aimed to present Epson printers with a human touch and personality. DoubleClick Rich Media with HD Video was exactly the type of solution that helped us achieve our goal,” said Jordan Kretchmer, associate creative director at BSSP. “HD Video lets us deliver our creative in a way that reflects the high quality of Epson products. Consumers aren’t used to seeing such pristine video online, so we expect the new HD technology to capture peoples’ attention like a standard video unit never could.”
Tuesday, February 26, 2008
Web companies discover the perils of putting privacy before profits.By Reihan Salam
Posted Tuesday, Feb. 26, 2008, at 11:50 AM ET
A few months ago, I shopped around for a Web site to help keep track of my spending habits. I was looking for a service that would charge me nothing yet work flawlessly, protect my privacy, and make me feel good about myself—a tall order, I'll admit. I settled on a little start-up called Wesabe, mostly because the founders seemed so committed to, well … to being cool dudes. The company has a detailed and very encouraging policy on privacy and data ownership and has recruited privacy-obsessed Alpha Geeks like Cory Doctorow and Clay Shirky to serve on its advisory board. In its frequently asked questions, Wesabe comes across as positively saintly: They won't sell ads because ads encourage you to spend, they plan on making money by helping people reach their financial goals, and their security measures are at least as impressive as those used by your credit card company. If Wesabe were a person, I'd be seriously smitten.
Of course, Wesabe isn't the first company to present itself as irresistibly smoochable. The vision of immaculate capitalism, in which no one gets screwed and everyone gets awesome, free stuff, is as old as capitalism itself. The trouble is that filthy lucre needs to change hands at some point, or else capitalism goes kaput. So how does Wesabe plan on making money? The plan, according to the site's FAQ, is to launch a "Pro" version loaded with new features and goodies. And then there is a mysterious revenue-generating feature they're still keeping under wraps. For companies like Wesabe, this is the tricky part: How do you keep your immaculate reputation once you start trying to, you know, make money off your customers?
The sustainability of immaculate capitalism is one of the key economic questions of the Internet age. This is thanks in large part to Google. Back in 2000, Paul Buchheit, best known as the man behind Gmail, came up with an unofficial slogan for his then-employer: Don't Be Evil. It began as a bit of a goof, yet it also captured something important about the iconoclastic and even heroic self-image of the founding Googlers, who grew up in the shadow of mighty Microsoft. In the heady days of the early 21st century, everything Google touched, from search engines to e-mail to calendars to the quest for renewable energy, seemed magically delicious thanks to its open, freewheeling, creativity-enhancing culture.
That self-image persists even as Google bestrides the world like a colossus. When now-humbled Microsoft announced its hostile bid for Yahoo, Google's chief legal officer, David Drummond, wrote a blog post—the immaculate version of a press release—raising "troubling questions" about the deal. Drummond all but accused the company of seeking to destroy the openness and innovation that fuel the Internet's spectacular growth.
How come the deep-pocketed Google can still manage to come off as a good guy? I think it's because we can barely tell that Google is the world's fastest-growing advertising company. That is, the text ads that have made the company its fortune are unobtrusive enough that we barely notice, or can't be bothered, that Google is shaking us down. In coming up with new ways to serve up these text ads, Google has transformed the way we think about privacy. Remember the brouhaha over Gmail? When it first launched in 2004, privacy advocates were creeped out over Gmail's use of "content extraction" to analyze all of its users' e-mail. In Google's defense, it's not as though your inner thoughts are being read by some censorious bluenose at Google HQ; the content is analyzed by (presumably) harmless Googlebots, much like the friendly Googlebots who keep your inbox spam-free. Clearly, there's a difference between protecting your inbox from unwanted mail and allowing your e-thoughts to be mined to sell you goods and services. Yet Google has lulled us into no longer pondering that difference. Perhaps it's the low-profile way in which the text ads are displayed; perhaps they're placating us with massive amounts of free e-storage.
As Google goes from humble search engine to all-purpose infotopia, it is reaching into other gray areas. How kosher is it to take billions of satellite photos, or to store patients' health records on the Web? As Google's moneymaking ventures become more conspicuous—and require Web users to take more active steps to cover their tracks—the company will have a harder time maintaining its immaculate reputation. To keep its shareholders happy, Google needs to grow its business. And to grow its business, Google can't keep relying on the same old text ads. It has to risk turning off technophiles with newer, eviler business models.
Facebook is in an even more nettlesome situation than Google. The company's extraordinary success lies in its pervasiveness. In high schools, colleges, and an increasing number of workplaces, the decision to resist assimilation by the Facebook Borg is the rough equivalent of holing up in Ruby Ridge. Founded by cherubic youths dedicated to being even less evil than Google, Facebook (like Wesabe) had an almost countercultural quality. Mark Zuckerberg's site was less garishly commercial than MySpace, and it was zealous about protecting privacy. When users flipped out over the Facebook News Feed, which allows people to monitor their friends' activities on the site, the top brass successfully reassured the base; the News Feed is now one of Facebook's most celebrated features.
If Facebook were a nonprofit dedicated to bringing millions of people together in a dense cyberworld, it would be an extraordinary success. If it were an NSA-funded initiative to track evolving enthusiasms, it would be a stroke of diabolical genius. But Facebook is supposed to make its founders billions and billions of dollars. And they still haven't figured out a really good way to convert happy freeloading users into dollar signs.
Social networks are widely considered dreadful advertising platforms. People go to Facebook to socialize, not to buy stuff. A Google search for "leopard-print ballet flats" probably means you're in the market for "leopard-print ballet flats"; listing Megadeth as your favorite band doesn't necessarily mean you want to buy Pantene for your long, flowing man-locks. That's why advertisers love Google and why they are generally reluctant to pay top dollar for text ads on Facebook. Facebook's response was to launch a service called Beacon. Actions taken on partner Web sites, like renting from Blockbuster or buying movie tickets from Fandango, would loop back into your News Feed for all your friends to see.
From Facebook's perspective, Beacon was a relatively unobtrusive way to integrate commerce and social networking. After all, Facebook is an advertiser-supported site, and this was just a fancy new way of selling ads. But the site's crazily devoted acolytes—who think of Facebook as their personal playground, thanks to years of immaculate rhetoric and behavior by Facebook's founders—revolted against the new ads and demanded new privacy protections. Sure enough, after days of devastating news coverage, the users won, and Facebook converted Beacon from an opt-out (if you can figure out how) to an opt-in feature. By cultivating an image as a free social utility you could trust with your friendships and your photos, Facebook had backed itself into a corner.
The same goes for scores of smoochable start-ups. The great thing about the Web 2.0 boomlet is that, unlike the original dot-com boom, it requires much smaller start-up costs and has generated many more real success stories, like Flickr and Del.icio.us and YouTube. But most of those success stories have involved an already profitable company—Yahoo in the case of Flickr and Del.icio.us, Google in the case of YouTube—scooping up the little guys at a healthy valuation. Great little companies start out with a terrific idea they have no way to make money from. While they're burning through other people's venture capital, they can afford to be as noble and un-evil as they want. The Googles and Microsofts of the world, alas, don't have that luxury. Perhaps immaculate capitalism is just a phase, like teething or dying your hair magenta. Talking the non-evil talk builds your user base and gets you noticed, then evil Uncle Moneybags swoops in to rescue you from your own rhetoric.
Chris Anderson, the editor of Wired and the author of The Long Tail, is more optimistic about the sustainability and breadth of immaculate capitalism. In the March issue of Wired, Anderson previewed his next book with an essay called "Free! Why $0.00 Is the Future of Business." He argues that the bounty of free stuff on the Web—Radiohead's music, ad-supported casual games, all of Google's services—signifies that "digital technologies … have become too cheap to meter." What's scarce these days, he writes, is the world's "limited supply of reputation and attention. … Free shifts the economy from a focus on only that which can be quantified in dollars and cents to a more realistic accounting of all the things we truly value today."
As a confirmed cheapskate, I certainly hope he's right. But when we're thinking about the future of the Web economy, it's worth remembering that not every start-up with venture money has Google's inherent advantages. I, for one, am worried about the fate of my beloved financial site Wesabe. With a recession on the way and Yahoo about to go the way of the dodo, Uncle Moneybags looks set to retire, or at least go on a diet. With fewer gigantic Web corporations around to buy up the minnows of the Web 2.0 world, immaculate capitalism will have to put its money where its mouth is. Can Wesabe keep to its un-evil creed and still make enough money to survive and thrive? Will it compromise, by selling ads here and there? Or will the best personal finance start-up out there crash and burn? We're about to find out.
Monday, February 25, 2008
from GigaOM by Stacey Higginbotham
As someone whose job involves understanding how certain people and things relate to one another, the idea of the semantic web is both compelling and scary. It could make my job that much easier, or it could make me as redundant as switchboard operators are today.
Coding information in a standard way so that machines can see how one person relates to another, or how a string of words could alternately be a movie or a book title, is a challenge. But plenty of companies are taking little bits and pieces of the problem and solving them. One such startup, Radar Networks, the maker of Twine, today received $13 million in funding from Velocity Capital, Vulcan Capital and DFJ. Other startups such as EVRI and Freebase have also benefited from VC interest in the semantic web.
Some of the companies are following the standards offered by the W3C, which is pushing RDF as a standard data structure to underlie the semantic web. But not all companies working on helping machines figure out the relationships and categories that most humans have learned use that standard.
Nor are all the companies interested in making the semantic web work startups. Yahoo uses RDF in some of its offerings and Google’s efforts with its social graph API initiative resembles the semantic web in its goals. Instead of using RDF, however, it’s using XFM and FOAF tags.
Reuters is another company that sees potential is getting machines to understand relationships. Earlier this month its CEO laid out a pretty compelling vision (at least to Tim O’Reilly) about how Reuters would rely less on delivering information and more on packaging its information in a way that could be used by analysts and computers to quickly delineate relationships.
Reuters would then be able to take its content, make it programmable and offer that data to users, who could then do with it what they will. Things like making relationship charts that currently can take a journalist and graphics department a couple of days to complete, and must then be monitored and changed manually, become easy.
The effort to render all of the data on the web into a semantic form will take a while. Nova Spivack, CEO of Radar Networks, believes that semantic web applications are currently in the early adopter phase. Twine will unveil its efforts in March through a private beta and another startup, AdaptiveBlue launched a semantic plug-in called Blue Organizer earlier this month. Spivack believes that in 2010 mass adoption will take place as people start to expect machines to make “intelligent” connections between people and things.
All of this is interesting, but putting a layer of semantic code over the existing web raises some concerns. One is the danger of inaccurate or at the very least less nuanced sense of relationships between people. Another is the everlasting nature of information on the web. How will coded tags be able to follow the intricacies of human relationships as fights ensue, jobs shift and even names change?
Another issue that we’ll have to deal with is confusion as people try to figure out what the semantic web really is. I’m thinking of it as code added to existing and new web content that helps determine and maybe track relationships between people and contexts for objects. I’m not married to the W3C standards, however, and others are doing this without using those particular programming tools.
There are also plenty of other definitions and hopes for the next phase of the web that may play out before we get an intelligent Internet. It’s already apparent that the web will continue to become more useful over time, but won’t ever replace the benefits of human interactions. If you doubt me, just recall your most fulfilling customer service call with a person compared with your most fulfilling experience with an automated agent. While both are helpful, sometimes you need a real, live human being.
New approach allows advertisers to map and assign value to various touch points, gaining a more complete picture of a campaign.REDMOND, Wash. — Feb. 25, 2008 — Microsoft Corp. today announced Engagement Mapping, a new approach to managing and measuring the effectiveness of online campaigns that goes beyond the current “last ad clicked” standard. For the last decade, virtually all ad campaign reporting methodologies associate sales, leads and Web traffic simply to the last click or ad exposure. Engagement Mapping takes into account for the first time all the various online touchpoints and interactions a consumer experiences before an eventual sale.
Based on the Engagement Mapping concept, Microsoft announced the beta of Engagement ROI, an online campaign reporting and optimization solution that will undergo testing by national advertising clients and agencies, including Agência Click + UNICA, Best Western International Inc., BKV, Citi Cards, GSD&M Idea City, Ingenuity Media of The Martin Agency, Initiative, McKinney, MEC Interaction, Mindshare Interaction, Monster Worldwide Inc., Neo@Ogilvy, Sprint and World Vision. Engagement ROI evaluates and assigns measurable value to a consumer’s interaction with ads, giving advertisers and publishers a more complete picture of online behavior.
“The ‘last ad clicked’ is an outdated and flawed approach because it essentially ignores all prior interactions the consumer has with a marketer’s message,” said Brian McAndrews, senior vice president of the Advertiser & Publisher Solutions (APS) Division at Microsoft. “Our Engagement Mapping approach conveys how each ad exposure — whether display, rich media or search, seen multiple times on multiple sites and across many channels — influenced an eventual purchase. We believe it represents a quantum leap for advertisers and publishers who are seeking to maximize their online spends.”
Announcement of the Engagement ROI beta coincided with a keynote speech, “Advertising Ecosystem 2.0,” by McAndrews at the Interactive Advertising Bureau’s (IAB) Annual Meeting in Phoenix today.
The Engagement ROI is a fully integrated reporting capability within the Atlas Media Console currently available through Microsoft. Value is assigned and measured on a real-time basis and takes into account the impact that recency, frequency, size and ad format (such as rich media and video) have on a consumer’s online path to action. Engagement ROI is designed to allow advertisers and publishers to manage their campaigns with greater insight and control than previously available through third-party ad serving.
The beta officially begins on March 1, with results expected to be available before the end of the second calendar quarter.
Microsoft Helps You Reach Target Audience — Anywhere, Anytime
At Microsoft, we understand the intersection of the consumer and technology. Our advertising solutions can help you connect with consumers as they access different media at various points throughout the day — from PCs to games to mobile devices — and even more in the future.
Those interested can learn more about Microsoft’s diverse and effective advertising solutions — whether they are a small business or a Fortune 500 company.
About Microsoft Advertiser and Publisher Solutions
Microsoft Advertiser and Publisher Solutions (APS) provides world-class advertising platforms and tools for advertisers, agencies and publishers. Its mission is to make buying and selling media simpler, smarter and more cost-effective across media and devices in the Microsoft network of properties and beyond. The APS portfolio includes Microsoft adCenter, Atlas, DRIVEpm, Massive Inc. and ScreenTonic. APS businesses span search, display and emerging media including mobile, gaming, video on demand and IPTV. More information can be found at http://advertising.microsoft.com.
Adconion Media Group has received a massive $80 million in Series C funding for its online advertising network. The funding round was led by Index Ventures with participation from Wellington Partners. The company is touting the news as “largest purely VC raise in history.”
Adconion is based in London and is most prominent internationally. According to stats the company publishes on its homepage, they serve approximately 290 million ad impressions per day, only about 50 million of which are in the US.
Separately, Glam Media, the woman-focused media company and ad network announced that it has raised a total of $84.6 million ($64.6 million Series D, $20 million debt financing). The funding was lead by media company Hubert Burda Media, with participation from GLG Partners, DAG, Accel Partners, Draper Fisher Jurvetson, Walden Ventures, and Information Capital.
Last year, we saw just about every major ad network get snapped up by the major Internet companies; DoubleClick to Google, aQuantive to Microsoft, RightMedia to Yahoo, and several others in the multi-hundred millions of dollars. It’s clear that VCs are confident the trend will continue, and as such, are investing heavily in the next generation of ad networks.
Sunday, February 24, 2008
Written by Darren Herman - February 24, 2008
Roger raises an important issue when it comes to assessing company valuations and inventory: how much of it is monetizable? This is an extremely important question and often gets answered by the associate or general partner of a venture firm who is building the financial model for the startup they are looking at investing in or the M&A team who is looking to acquire an ad-supported startup.
One of the top concerns of mine and I’ve been through it first hand: when venture capitalists or corporate development teams are working through a financial model to figure out how much your inventory is worth, I can almost guarantee not one of them has ever spent any time in an ad agency (on the media team) or in marketing at a brand. I’d imagine over 90% of all VC’s or M&A folks come from finance, engineering, or similar backgrounds.
This is a problem (there is always a solution to any problem) when it comes to monetizing the web. We like to think that just because Facebook delivered over 12 billion pageviews in January 2008 (ComScore), they are able to monetize all 12 billion. Unfortunately, that is not and most often never the case. Case in point: Yahoo sells out the homepage of their site, but I know first hand that they have quite a bit of inventory that goes unsold on other areas of their network. Trying to buy a Yahoo! home page though is quite expensive and is sold out for weeks at a time.
There are a few important reasons (amongst many others) why any company who sells advertising on their website may have unsold inventory (startup, emerging company, or world renown):
1. Ad sales team is not effective. Tough to find, attract, and maintain a top-notch sales team in any industry.
2. Depending on the size of a company, a sales team can only cover so much geographical territory. For every territory not covered, money is being left on the table.
3. The ad marketplace (agencies and/or brands) may not want to purchase the inventory available for a host of different reasons.
4. The business environment is not conducive to ad spending at this time.
Most startups that I’ve had the chance to work with like to deploy a direct sales strategy first and sell all of the high-level integrations (longer sales cycle but more expensive buys) and then outsource standard inventory (IAB) to ad networks, rep companies, and participate on advertising exchanges.
With so many advertising supported (either fully or partially) startups in the market, the networks and exchanges are growing at an increasing rate. My guess is that the amount of inventory available to advertising networks is outpacing the additional advertising dollars available so the % of monetization of inventory is decreasing on a month-to-month basis. If there is a downturn in the economy, this will surely affect the sell thru and the % of monetization will decline rapidly.
Most of the purse strings of advertising budgets are held by ad agencies. Yes, ultimately, brands sign-off on any plans, but agencies are doing a lot of the work to make strategic and tactical recommendations as to where to spend the brands money.
There are many types of agencies who spend their money digitally:
1. Interactive (only) shop
2. Performance marketing (direct) shop that has a digital capacity
3. Fully integrated agency (digital, print, OOH, television, etc)
The way that each of these agencies looks at the digital environment may be very different from one another. A fully integrated agency may not be looking at performance driven marketing (CPA type stuff) whilst an Interactive shop may not want to amplify what the brand is doing offline into the online world. These are just examples and may or may not hold true for any and all of the agencies.
The bulk of the premium inventory on many websites are being sold to Interactive and Integrated agencies as they are the most creative and high-impact. Beyond this, agencies may purchase inventory from ad networks to add reach (or hit certain goals) and in some (increasing) cases, ad exchanges, though compared to the larger pie, small [today].
Just because you have 12 billion page views, should you be worth $XXCPM * 12 billion/1000 * XX months? (or whatever the valuation equation is?) I’d also like to see some marketing gurus head into the finance world, that way, we can add some context to the valuations occurring today. The majority of sites will not monetize 100% of their traffic 100% of the time. Please remember to keep this in mind.
One other thing to keep in mind:
1. Not all agencies pay the same rate
2. Rates are different depending upon the category vertical, time of year, etc.
3. Most major buying firms are paying well below rate card
Friday, February 22, 2008
If you're launching a widget campaign, consider these strategic and technical factors to maximize your campaign's impact.
The intense popularity of widgets, gadgets, Facebook applications and their kin has advertisers and publishers eager to get on board. But before you invest in a widgetized advertising campaign, there are a number of strategic and technical factors to consider. There are also important guidelines to follow to ensure you get the most from your investment.
Are you ready to let go?
That's the first question to ask yourself, because consumers interact with widgets (and thus your content) outside the confines of your website. That off-site engagement may run counter to your online marketing instincts.
But by their very nature, widgets keep users interested in your message, which is likely to drive pageviews back to your site. A desktop widget is an ever-present reminder of your brand -- like the promotional mousepads you once gave away, only much more effective and minus the coffee stains.
Beyond a willingness to give consumers a long leash, you must also be ready to put some effort into keeping your widget evergreen. Refreshes should occur in real-time, or at least daily. And your content has to be interesting and relevant over an indefinite period of time. It's not a medium for lazy advertisers; however, it is a new canvas for the truly creative.
If you're ready to both liberate your content and invest some energy in your widget, it's a channel worth exploring. Once you decide to move forward, here are a few tips to keep in mind.
Serve a purpose, and serve it fresh
Widgets shouldn't simply be advertisements for your content or service. Think of them instead as a service or tool unto themselves - something that keeps users engaged with your message because it delivers value in some way. Especially when it provides real-time, practical information, consumers will refer to your widget again and again.
A classic example that meets these criteria is a branded traffic widget updated in real time. Because it's both useful and current, users may well interact with it several times each day -- during the AM and PM commutes, for example. That's at least two times per day that your brand is on your customer's mind -- a level of awareness that's hard to beat.
Stick with standards and partners you know
On the development side, adhering to IAB standards maximizes the number of potential placements for your widget. It's also wise to stay within "general" publisher restrictions for file sizes.
If you're sourcing third-party content such as RSS feeds or APIs for Mashups, work with a partner you trust absolutely. Any problems with widget security or reliability can sting your users and compromise your brand image.
The good news is that your first foray into the widget market needn't involve developing a widget from scratch. Often, you can simply repurpose popular information or features from your existing website. Innovative search features, shopping recommendation tools or special-interest news, for example, can all be widgetized by reducing file sizes, increasing interactivity and possibly adding a social or creative spin.
The point is, if consumers like information or features on your site, they may love the convenience of a widgetized version.
The distribution question
Once you've created your widget, how do you get it to fly? The first step is to find a syndication partner. Syndicators provide the "wrapper" or components necessary for your widget to be picked up on blogs, social networks, and personal pages. YourMinis from Goowy Media (now part of AOL), Clearspring Technologies and Interpolls are just three examples of established syndicators. Once you have a syndication partner, you can place your widget in popular galleries such as Yahoo's Widgets, Facebook, the Mac Dashboard or Widgetbox. Of course, be sure to showcase your widgets on your own site, and consider working with a widget ad network.
Given the popularity and the ingenuity devoted to these mini-applications, widget-based advertising will continue to grow and evolve -- enabling creative forward-thinking advertisers and publishers to build a totally new kind of customer relationship.
Another week, another conference :)
This time, it was the EC-TEL07 (European Conference on Technology Enhanced Learning) in Crete. Elisa Dalla Vecchia and I presented the MACE project (slides, video 1, video 2) and besides, met a lot of nice people.
The conference itself was really well organized. The keynotes (Hermann Maurer and Bruce Sterling) were excellent and big picture, covering a wide range of digital lifestyle topics and wild ideas. Digital quacks & charlatans, why Google is not so non-evil after all, telepathy is trivial, flying cars. No kidding. Many of the session talks, on the other hand, were not that exciting at all. I have the feeling many people in this area first build a “framework for…” before actually trying out some ideas on real learners.
Greetings to Martin Memmel from DFKI, who I met to talk about the ALOE project and Christian Glahn, who presented nice work on Smart Indicators for learner feedback, and Joris Klerkx, who is quite into information visualization. I am looking forward to future developments, guys!
And just for the record, here are my favorite insider nerd joke conference memes:
Thursday, February 21, 2008
from the having-someone-else-pay-for-it dept
When I first heard about TrialPay, I thought it was a bit gimmicky. However, in reading through a NY Times article about the company, I'm realizing it's actually yet another example of how to use "free" in a business model. The service is mainly used by software providers (who, remember, are offering an infinite good, which will face pricing pressures towards a zero price). The software developers officially offer their software for a price, but then also offer it for free if you agree to buy someone else's product. For example, you can get free anti-virus software if you also agree to get a subscription to Netflix. Note what's happening here (and how it sounds familiar). Software providers are giving away their (infinite) product, but they're attaching it to the sale of a totally unrelated (scarce) good, and are then profiting from the referral fees associated with those other goods. In other words, even if not explicitly, they've realized that their software products act as a promotional good for those other products. What's most interesting here is that those scarce goods are totally unrelated to the software that's for sale, other than through TrialPay's service. Effectively, TrialPay has helped makers of infinite goods tie up their products with other scarce goods that people would have thought were unrelated. So, the next time someone insists that there can't be a scarce good attached to certain infinite goods, remember this example.
The search giant's automotive director shares strategies for localized marketing and precision targeting and predicts some key industry trends on the verge of their tipping points.
Jodi Harris: It's been over a year since you joined Google as the automotive vertical market director. From your perspective, have there been any big changes to the category or to Google's automotive strategy, since then?
Bonita Stewart: We've seen major changes within the industry, such as soaring fuel prices, sales declines, market share fluctuations and reduced production; however, our automotive strategy remains the same. We work with our clients to demonstrate how technology, especially during turbulent times, aids ROI-driven media solutions.
Harris: Green marketing and reducing oil consumption seem to be major focal points for the coming year, and the rise in mobile technology and niche social marketing indicate that that localization will become a key marketing touchpoint for conveying brands' positions. What thoughts or best practice recommendations can you share to help automotive marketers strategize for these big issues in 2008?
Stewart: First, automotive marketers should implement localization on two levels -- brand and dealer. Brand marketers have the unique opportunity today to deliver relevant messages to their precise target, whether it's a potential hybrid customer or someone interested in fuel economy, through contextual targeting. Meanwhile, dealers have the opportunity to geographically target their products and services, and mobile technology offers the ability to connect with a dealer during the shopping process.
Harris: Focusing in on the idea of precision targeting, what strategies do you feel work best for brands to identify and target the right niches associated with their nameplates?
Stewart: Most brand marketers have defined targets, but it's critical to identify and then optimize their niche targets throughout the campaign, since some may have a higher ROI than others. We suggest placement targeting and taking advantage of niche sites to complement your brand strategy. If auto sales are expected to slow, it's critical to mine for potential consumers by targeting relevant content on niche sites. More than 76 percent of page views are in niche sites. (Source: AdRelevance)
Harris: Are there other key marketing trends do you anticipate will play a big role for automotive in 2008?
Stewart: Right now we are particularly keen on the benefits of online video. It's the new portable TV and offers the sight, sound and motion automotive marketers crave to differentiate their product and to evoke consumer emotion. In November 2007, U.S. consumers viewed more than 225 million auto/vehicle videos on YouTube. And several auto marketers have used online video to successfully launch new vehicles during the LA and Detroit auto shows, achieving views between 400,000 and 950,000 in a single day.
Harris: Video strategy also seems to be a top priority for the automotive market because so much of the purchase process involves getting a deeper feel for the car than just looking at pictures. Are there upcoming trends you see for video search and its ability to meet more tech-savvy consumers' needs?
Stewart: Assuming they have the appropriate digital rights we encourage all of our clients to upload their video content. Google's resources and expertise make YouTube's search experience the best it can possibly be. Recommendations, related videos, active sharing and subscriptions are very popular ways for people to find meaningful automotive-related videos. We will continue to make search and discovery of videos a priority in 2008.
Harris: Recently, you mentioned the concept of "atomization" in campaign distribution. What suggestions do you have for dealers who want to take advantage of multiplatform communications but may be limited in their budget or staff capabilities?
Stewart: Both brand marketers and retail dealer associations should consider atomizing their content and tools. Don't build it and wait for consumers to come to your site. Venture out, find them and communicate with them online through gadgets that provide dealer locators, photo/video galleries, build and price features directly to the consumers in a microsite format. Consumers control the dialog now, so make it easier for them to connect with your brand on their terms.
For dealers, I would recommend a stair-step approach to multiplatform marketing. Start with search, add contextual targeting, add geographically targeted display advertising and intermingle with video.
Harris: Obviously, at Google, search is a critical component of your marketing purview. So, what would your No. 1 piece of advice be for an automotive marketer looking to optimize its search presence?
Stewart: With U.S. vehicle sales expected to be 16 million or less in 2008, we recommend going back to basics with search marketing. All auto marketers should ask themselves if they are always on, 24/7, as consumers gather product information in today's virtual showroom. In a study we published with Compete last year on the automotive buying process, we found 65 percent of auto buyers research their products in one month or less. We also found the search engine is the No. 3 most important source for auto buyers, behind the OEM site and third-party auto sites, during the buying process. So if you are not attempting to engage your consumers on their terms, when they are ready to receive your message, you should expect diminished OEM site visits and fewer leads than your more aggressive competitors. And always remember offline plans (TV, major events) drive online activity. Be ready online for what's happening offline. Combine relevant search marketing with targeted display campaigns.
Harris: When we last talked, you spoke about the three-tiered approach for automotive marketing. But many say the funnel is eroding, and manufacturers no longer have the luxury of campaigns that simply build awareness. Are you finding this to be true? And if so, what can marketers do to streamline the purchase process for consumers who are embracing non-traditional purchasing and are more resistant to marketing tactics.
Stewart: True, the purchase cycle is condensing and the funnel is no longer linear. Nonetheless, marketers must strive to create connections at relevant moments and make it easy for the consumer to get to know the brand. When we address the three tiers, we encourage building a cohesive strategy from the brand, from the retail dealer association and from the individual dealer. All campaigns should align with a complementary message both national and local.
Lastly, don't ignore the data. Today it's more compelling than ever to follow the consumer and lead from behind. Consumer engagement is increasing and driving their behavior as witnessed by the growth in social networking, video, mobile and search. On the horizon I see integrated marketing moving to integrated accountability and ROI. Marketers will develop more cause and effect levers.
A great example is the Super Bowl. It's the all time favorite for mass reach, but how many are prepared for the aftermath? Can I search for the commercial, find it on YouTube, send it to my friends, rate the commercial, watch it on my phone, etc.?
Harris: GM made headlines recently when it announced that it would no longer be supporting the ad efforts of regional dealers. Is this a trend that you see other OEMs moving toward, as regionalization and more flexibility become key to automotive marketing?
Stewart: We see dealers realizing the reach of online marketing and its effectiveness. We see OEMs across the board stepping in to help the dealers with education, business guidance and best practices. This year will be a tipping point for retail dealer associations and we see more requests for assistance to understand the efficacy of search marketing among dealers. We see it as our role to aid their understanding of online media and de-mystify Google.
Wednesday, February 20, 2008
It's the biggest business story in months: the Birth of Microhoo (or Newshoo). Online advertisers and those who serve them have been spellbound by every one of the 63,387 (and counting) Google News entries about Microsoft's (so far unsuccessful) attempts to get a little Yahoo in its system. Why? Simple. Microhoo will alter the primal core of online advertising. In fact, it has already.
Let's say it together. Online advertising is about results. Before we all merged onto the Information Superhighway we tried to grab as much SOV/SOM as possible and hoped the message would motivate audiences to do…something. Now, with the net's instant metrics, advertisers track the success and failure of campaigns as they happen. This gives us enormous quantities of user data, and with it, advertisers deliver relevant ads that convert to sales. Which leads us to the importance of Microsoft's attempt to buy Yahoo.
Yahoo knows (almost) everything about each one of us, and so Microsoft's play is to grab that information and use Yahoo's platform to cripple Google's stranglehold on online advertising. Without Yahoo, Microsoft doesn't have all the pieces to chip away at Google; Yahoo's platform technology and user data feeds Microsoft's business goals.
Microsoft used to be the one big fish in a pretty small pond. Unfortunately for it, gigamouth (Jasconius pelaganax) Google jumped in and Gates' behemoth no longer rules the seas. Yahoo, on the other hand, was surely the first internet darling, but is now coping with a dam (bubble) bursting and big G's search and online advertising dominance. This is the meat and potatoes of the proposed merger, as Microsoft needs to acquire a Yahoo (or, gasp, AOL) to out-swim Google.
The strangest of all is Google's offer to help Yahoo. As AdWeek succinctly states, it's "putting Yahoo in the unenviable position of having to embrace the help of one contentious rival in order to fend off the advances of another."
With AOL on its way out, consolidation is sensible for Yahoo -- especially with Microsoft's ever-deep pockets and drive to remain relevant. We've seen a ton of big pairings in the past 18 to 24 months (Google/Doubleclick, AOL/Tacoda, Yahoo/BlueLithium) and with these happening, those companies providing distinct ad models are trying to demonstrate that theirs is the future.
So which online advertising will Microhoo use? It's a particularly fascinating question in the context of its mammoth share and reach. According to comScore, a Yahoo and Microsoft combo would have 32 percent of the U.S. search market, while Google holds 59 percent.
Yahoo has about 75 percent reach (pretty astounding); however, when it comes to user engagement, the company's numbers hover around 15 percent. Microsoft can take Yahoo's reach and employ a guaranteed means for advertisers to convert leads into customers: cost-per-acquisition (CPA).
CPA is not new, but all these consolidations mean CPA will be the darling of online advertising. Microhoo and Google's advertising customers will demand guaranteed results and they will be compelled to provide them because there will only be two fish swimming around -- and the choices of the smaller ad models will diminish. Since CPA advertisers only pay when based on predefined customer actions, Microhoo -- using CPA -- immediately has a leg up on Google's soon-to-be-archaic model, which is susceptible to click fraud and suffers from lack of transparency.
Speaking of click fraud, this shotgun marriage will affect pay-per-click (PPC) rates as well. Advertisers who use PPC are charged every time a user clicks on an ad; Microhoo will try to leverage that business. If these rates rise, advertisers are going to move swiftly to a model -- like CPA -- that has lower rates and higher returns.
CPA will in fact deliver high conversion rates for Microhoo's advertisers, and CPA's scalability across a large network means Microhoo can focus on integrating different ad exchanges and search ad systems into a more robust and powerful network. Remember that Microsoft is still integrating aQuantive -- which brought Atlas ad-serving technology, Avenue A/Razorfish agency and DrivePM ad network -- into its system. Incorporating a large CPA network will dominate rather than buttress ad models like behavioral targeting, contextual and search that are falling by the wayside.
When all else fails, simply follow the money. Microsoft employing Yahoo's platform with a CPA model will bring in the major bucks for shareholders, for the behemoth, for advertisers. Google has tried to deploy CPA, but because it makes money in search, CPA has not gained traction with Google's clients. So the question is: Will Microhoo's eventual use of CPA mark the beginning of the end for Google? And who will end up in the deep end?
Tuesday, February 19, 2008
Members may sign up for a chance at love, but marketers shouldn't dismiss dating sites for their campaigns. Dating gurus from two of the space's top sites share their advice.
With millions of registered members returning with regularity to access mountains of in-depth data, dating sites can look like a promising platform for marketers eager to connect with users. But a cookie-cutter marketing plan won't fly with online daters. Here are some things to keep in mind as you adjust your campaign to meet some of the unique characteristics of the dating space.
Reach isn't everything
Sparks Networks has about 38 million registered members and 5 million monthly visitors. Similarly, eHarmony reports 17 million registered users, with nearly 3 million monthly visitors.
While those numbers may look similar to a lot of other sites and ad networks, it's important to look beyond raw reach, according to Jon Ward, VP, eHarmony Ad Solutions.
"These are audiences that have a high propensity to pay, often a premium, for great services like eHarmony where the lowest-cost plan is $59.95 per month," Ward says.
At Sparks Networks, which operates an array of sites that include JDate and AmericanSingles, each with its own fee structure, there's a similar play that goes beyond reach.
"Users rely upon us to connect them to the people and products that best fulfill their wants and needs," says Gail Laguna, VP Communications, Sparks Networks. "To do this, our members tell us a lot about themselves, including birth date, gender, ethnicity, religion, hobbies, profession and income, plus dozens of other self-identified interests. Our robust user profiles amount to an incredible volume of consumer data, which enables us to match businesses with the right consumers."
Community matters -- a lot
As with any community, the community sets the rules. While the dating space is no different, marketers need to be able to size up each of the diverse group of communities that make up the space.
"For marketers, we think a more conservative, large brand, general message is effective on our site," Ward explains, adding that no two sites are created equally in terms of community.
But dating sites, with their rich streams of member data, give marketers vital clues when it comes to crafting a campaign that will connect.
A study released by Jupiter Research and Bazaarvoice found 70 percent of UK consumers consider ratings and reviews the most helpful web feature when researching an online or offline purchase.
The research reflects last week's Forrester report, which found 64 percent of US consumers want ratings and reviews available on the websites they visit.
The UK report compared ratings and reviews to other resources. 53 percent of the 1,000 online users surveyed said customer reviews were the most helpful source of information.
Recommendations from friends came second, with 47 percent. Only 11 percent cited TV ads as the most helpful source, and four percent called magazine and radio ads a major influence when deciding what to buy.
“The bottom line is this market is growing fast and will be a significant source of revenue for the network operators,” said Parks Associates analyst Harry Wang.
Parks Associates said ad spending on all multimedia platforms, including mobile and IPTV VOD, will be worth $12.6 billion in 2012, up from $1.8 billion in 2007.
Just FYI, if you want to include paid online video and exclude mobile and IPTV, Parks Associates has a different estimate for you (from a different analyst at the firm): $11.3 billion in total revenue for online video in 2012, up from $2.8 billion in 2008.
I’m not sure if writers should feel good or bad about finally striking a deal to get 2 percent of this multi-billion-dollar space in 2010-2011. On the one hand, a small portion of a large amount is still a lot. On the other — clearly the AMPTP generates revenue in online video — even if this estimate’s 50 percent off we’re still talking multiple billions of dollars. Multiple billions the writers won’t see.