Will it fly? How to Evaluate a New Product Idea

I've been thinking about a number of new product ideas lately. In doing so, I've been trying to come up with a way more structured way of evaluating them. Here's a first attempt at defining that. It's not as clear as I'd like it to be. But perhaps you'll find it useful.

Tractability

Question: How difficult will it be to launch a worthwhile version 1.0?

Blogger was highly tractable. Twitter was tractable, but sightly less-so because of the SMS component. Google web search had quite low tractability when they launched it. Vista?: About as low as you can get.

Tractability is partially about technical difficulty and much about timing and competition—i.e., How advanced are the other solutions? Building a new blogging tool today is less-tractable, because the bar is higher. Building the very first web search engine was probably pretty easy. Conversely, building the very first airplane was difficult, even though there wasn't any competition.

In general, if you're tiny and have few resources, tractability is key, because it means you can build momentum quickly—and momentum is everything for a startup. However, tractability often goes hand and hand with being early in a market, which has its own drawbacks (e.g., obviousness, as we'll discuss below).

If you're big and/or have a lot of resources—or not very good at spotting new opportunities, but great at executing—a less-tractable idea may be for you. It may take longer to launch something worthwhile, but once you crack the nut, you have something clearly valuable.

Obviousness

Question: Is it clear why people should use it?

Everything is obvious once its successful. Big wins come when you can spot something before its obvious to everyone else. There are several vectors to this: 1) Is it obvious why people should use it? 2) Is it obvious how to use? 3) Is it an obviously good business?

Number two is more affected by the design of the product than the idea itself. You don't actually want number three to be true. You want it to be a good business, but not an obviously good business, because than you get more competition. Web search was not an obviously good business before Google demonstrated it. This allowed them to leap-frog the competition that was in it for years, but not taking it very seriously. But, like Google, the business may not be clear until later.

The key question for evaluating an idea is number one: Is it obvious why people should use it? In most cases, obviousness in this regard is inversely proportional to tractability. The cost of Blogger and Twitter's high tractability was the fact that they were defining a new type of behavior. The number one response to Twitter, still, is Why would anyone do that? Once people try it, they tend to like it. But communicating its benefits is difficult. We're heartened by the fact that Why would anyone do that? was the default response by the mainstream to blogging for years, as well, and eventually tens of millions of people came around.

On the flip side, if you can build an ad network that makes people more money, a better search engine, or a productivity app that actually does tasks for people—all, less-tractable solutions—it will be highly obvious to people why to use your product.

Sometimes you can come up with ideas that are highly tractable and obvious. For example: Top Friends or HotOrNot. These products were not hard to launch and yet, were immediately appealing (to their target market). What was not obvious, in either case, is that they could also be great businesses. HotOrNot has proven this to be true. And I suspect Slide will, as well.

Deepness

Question: How much value can you ultimately deliver?

The most successful products give benefits quickly (both in the life of a product and a user's relationship with it), but also lend themselves to continual development of and discovery of additional layers of benefit later on.

Facebook is incredibly deep because it leverages your connections, which touch practically every aspect of your life. Scrabulous, on the other hand—a Facebook app for playing Scrabble—is not very deep. How big is the Scrabble-playing part of your life, and how much can it deliver beyond that?

But most things are deeper than they seem at first glance. Practically any application, once people start using it, can be used as a lever to more activity and benefit delivery. Being smart about what you're leveraging is key.

When Feedburner first launched, their only feature was the ability to take an RSS feed and spit out multiple versions, depending on the capabilities of the feed reader requesting it. It seemed useful, but hardly something to start a company around, especially because that particular problem would probably go away over time. Or so I thought. What I didn't get and they did (because Dick and gang is smarter than me) is that they were setting themselves up at a great leverage point—between publishers and their readers—where they could offer an ever-deeper value stack. Soon it was feed stylesheets with one-button subscription, feed stats, feed flare, blog stats, email subscriptions, and, of course, advertising, where they made their money.

While we're talking about Feedburner, its worth mentioning that their product was also very obvious for their core user-base. There were clear benefits and very little drawbacks. They also had no competition, even though there were tons of companies in the RSS/feed space, because most of the others were battling it out on the reader side.

Other times, you stumble into deepness. When they put up HotOrNot on a whim, Jim and James didn't know they'd be able to leverage it into a highly profitable dating site. Okay, so HotOrNot's still not the "deepest" of sites, but it's deeper than you think.

Wideness

Question: How many people may ultimately use it?

Wideness, like deepness, is a fairly classic market analysis measure. They are usually inversely proportional—do you try to offer the mass-market good or the niche one?

Feedburner is not particularly wide. Their market was those who published RSS feeds (and cared about them). This was in the hundreds of thousands, not a hundred million. Turns out, it didn't need to be used by a hundred million to be worth a hundred million, so going for wideness is not entirely necessary. But it's something to look at.

Like deepness, wideness can take you by surprise. The web is getting so damn big, what seem like niche ideas can be very decent businesses. When Ted Rheingold launched Dogster, as a joke, he didn't know there were enough people out there who would be interested in making their dogs web pages to actually build a business. When we launched Blogger, I thought maybe a few thousand people would use it.

Sometimes, you can find a spot that is both deep and wide. This is where multi-billion-dollar businesses are built: Google, Windows, Ebay. It's easy to think these kinds of opportunities aren't laying around anymore—at least not for the little guy. But most people would have said the same before Facebook entered the picture.

Discoverability

Question: How will people learn about your product?

I was going to call this criteria "viralness." However, there's a lot of focus on viralness these days, and—while sometimes amazingly effective—it's not the only way to grow a user-base. And it doesn't make sense in all cases.

Interesting to note: Google web search is not the least bit viral. Nor is Firefox. Nor it Kayak.

It's possible to get the word out without being "viral." One way is organic search traffic. Another is pay-per-click ads (if you can monetize). Another is plain old-fashioned word-of-mouth/blog/press. (Twitter has probably grown more through press and blogs references than any inherent viralness.) There's also distribution deals and partnerships.

Either way, it's something to think about up front, as different ideas lend themselves to different discoverability strategies. And some things are more difficult than others to spread. Dating sites, for instance, have not historically been viral, because people weren't going to invite their friends to—or even talk much about—their personal ads. The sites made up for this by buying lots of ads, which worked because they monetized signups via subscription.

Monetizability

Question: How hard will it be to extract the money?

Far be it for me to say that obvious monetizability is a requirement. I'm generally a believer that if you create value, you can figure out the business. However, all things being equal, an idea with clear buck-making potential is better than one without.

Whether or not something is monetizable is not always clear up-front. It wasn't clear how Google was going to make money early on. Ebay thought it would sell auction software.

In most cases, if you position yourself close to the spending of money, you can extract some. Or if you offer something that clearly saves or makes people money.

Blogger, I believe, makes money for Google, but it's not the most monetizable of products. Twitter, I believe, will be more-so, but that's yet to be seen.

Personally Compelling

Question: Do you really want it to exist in the world?

Last on the list, but probably the first question I ask myself is: How important to me is it that this product exists in the world? If I were evaluating a startup, I'd ask this of the founders. As I wrote in "Ten Rules":

Great products almost always come from someone scratching their own itch. Create something you want to exist in the world. Be a user of your own product. Hire people who are users of your product. Make it better based on your own desires.

In theory, you can get around this with lots of user research. (It's pretty clear neither Slide nor Rockyou's founders are creating widgets based on their own needs and desires.) But you're more likely to get it wrong that way. When I've gone sideways, it's when I wasn't listening to my gut on this issue. Specifically, Blogger and Twitter were personally compelling, while Odeo wasn't.

However, "personally compelling" doesn't have to mean only that you want it as a user yourself. Curing cancer or helping the world be more green may be highly personally compelling for other reasons, which I think is just as good. My favorite products are those I really want as a user, but that I also think have some "greater good."

Charting it Out

To bring it home, here's a table with my estimates on where different products land by these criteria. Obviously, these are subjective measures, and for some of them, it's hard to judge in retrospect. (I didn't inlclude Personally Compelling on the list, because I can't really speak to the founder's motivations in most cases.)

Product	Tractability	Obviousness	Deepness	Wideness	Discoverability	Monetizability
Blogger	Very High	Low	High	High	High	Low
Google (web search)	Very Low	Very High	Very High	Very High	Low	Very High
Facebook	High1	High	Very High	High	Very High	High2
Twitter	High	Low	High	High	High	Med
Feedburner	Med	High	High	Med	Med	Med3
HotOrNot	Very High	Very High	Med	Med	Med	High4
Scrabulous	High	Very High	Low	Low	Very High	Low
Ebay	Med	High	Very High	Very High	High	Very High

IAC's Horan: 'Intent-Driven' Media Challenges Brands

December 04, 2007
By Brian Morrissey

LA QUINTA, CALIF. The changes to the media business in the last five years are greater than the previous 500 years, according to IAC's media and advertising CEO, Peter Horan.

Speaking at the iMedia Agency Summit here, Horan predicted both media companies and advertisers could no longer rely on strong brands. Instead, they must find ways to meaningfully participate in what he calls "intent-driven media."

"Brand assists the process, but it does not drive the process," said Horan, whose unit includes Ask, shopping comparison service Pronto, Citysearch and over 50 other digital media properties.

Like much else in the digital world, Google stands at the center of this shift, Horan said. The ability to use search engines to find information means a more meritocratic media world, where a smaller advertiser or publisher can compete with larger companies on the basis of relevance. A car shopper, for instance, uses search to find information and considers a variety of sources rather than turn to a single trusted brand, he said.

Intent-driven media also means a blurrier distinction among content, commerce and community, he said. As an example, Horan pointed to Nike+, the running system and social network that blend product, branding and service.

"Nike is not just selling shoes," he said. "Where do you draw the lines there?"

Traditional media will struggle to adapt to these new conditions, he said, mostly because they have structural impediments, such as unionized work forces at local newspapers. That means newspapers will see declining revenue without the ability to cut costs, a potentially fatal combination, Horan predicted.

"We will see major metropolitan areas without a newspaper in two years," he said.

Search Ad Buyers Throw Good Money After Bad

What's the cost for every click? A new study has been released that demonstrates spend on branded keywords is far higher than it needs to be. The research comes from Atlas, now a division of Microsoft. It finds that money spent on branded keywords, which point to an official corporate website, are often wasted. That's because people are often looking for that site anyway and would have found it just an inch below in the organic search results. The study's conclusions include advising buyers not to focus as sharply on branded keywords in future campaigns. While they are an important part of an overall package, the bids on such keywords do not need to be as high. Instead, companies should concentrate on raising the organic search rankings for searches on branded terms.

Creating Great Product and Company Names

from the agency site www.igorinternational.com

Successful product and company names may appear to have been created by magic, but it is possible to develop names that are dynamic, effective and fully leverage a brand's potential if you have the right process in place. A process that is clear, insightful, logical and focused will lead to a name and tagline that are powerful components of your brand strategy, and pave the way for buy-in throughout your organization.

Before you begin, it is essential to decide what you want your new product or company name to do for you. To make that decision, you need to understand the possibilities. A name can:

• achieve separation from your competitors
• demonstrate to the world that you are different
• reinforce a unique positioning platform
• create positive and lasting engagement with your audience
• be unforgettable
• propel itself through the world on its own, becoming a no-cost, self-sustaining PR vehicle
• provide a deep well of marketing and advertising images
• be the genesis of a brand that rises above the goods and services you provide
• completely dominate a category
  

Every naming project is unique and our process is customized for each of them. We make sure that all aspects of a work plan are designed to complement your naming project, corporate culture, approval process and timeframe. Consequently, our process is flexible enough to be tailored to the specific needs of your company.

Whether we are developing product or company names, the process steps outlined below are what gives us the ability to create powerful and lasting brands:

• Competitive Analysis – Our process begins with a thorough competitive analysis, in which we quantify the tone and strength of competitive company names or product names. Creating such a document helps your naming team decide where they need to go with the positioning, branding and naming of your company or product.
• Positioning – The next step is to help you refine and define your brand positioning. The more specific and nuanced your positioning is, the more effective the name will be. All great product and company names work in concert with the positioning of the businesses they speak for.
• Name/brand Development – Product or company name development begins by applying the positioning strategy to figure out what you want your new name to do for your marketing, branding and advertising efforts.
• Trademark – We prescreen names under development through our trademark attorney to determine the likelihood that your company will be able to procure the names. We do this in order to feel confident that the names your attorney submits for final trademark screening and application have been deemed by an attorney as likely to pass muster for registration. If not, valuable time is lost.
• Creative / Testing – A standard part of our naming process is the production of creative support materials to flesh-out potential names, and market research testing when appropriate. These may include stories, ad treatments, or graphic layouts featuring leading name candidates.
• Name and Tagline – Final names and taglines, along with a well-defined positioning strategy, are the outcome of our process.

To print out our entire naming process and more, download our detailed PDF Naming Guide.

When Web Branding Works

Dynamic Logic's Data Offers Tips For Online Brand Builders

By Abbey Klaassen

Published: July 16, 2007

Want to craft an effective online branding campaign? Think pictures, not words. Keep it simple. And tie it in with your offline efforts.

According to Dynamic Logic, Kraft had four of the most effective brand campaigns, with creative and media for Oreo and Kraft Singles scoring high marks in both awareness and persuasiveness.

Those are some of the common strategies behind eight campaigns Dynamic Logic found to be the most effective online branding efforts out of all the campaigns the company measured in 2006.

Kraft had four of the most effective brand campaigns, with creative and media for Oreo, Honey Bunches of Oats, Kraft Singles and Crystal Light On the Go scoring high marks in both awareness and persuasiveness. Other marketers bestowed with most-effective honors include Unilever, BMW, McDonald's and Luxottica Group for its Ray-Ban brand.

Common features
The winners share several traits, said Michelle Eule, VP-research at Dynamic Logic, which is part of WPP's Millward Brown. For starters, they kept the ads simple, with great visual elements and little text.

"These ads are competing with a lot of other elements to grab the user's attention," Ms. Eule said. "If the messaging is too complex or esoteric, people will not pay attention at all or not get the messaging in its entirety."

These eight are not an absolute measure of the best online campaigns of 2006 as the results were culled from only the 600-plus campaigns for more than 400 brands Dynamic Logic was tapped to measure last year. The study didn't include campaigns that have never been measured or were measured by another firm, such as Insight Express. Kraft, for example, is a big Dynamic Logic client and may have had more campaigns among those measured than another advertiser.

Unexplored metrics
While the online space is considered a performance marketer's dream, thanks to the ability to measure effectiveness based on actions such as clicks or conversions, those metrics don't always mesh with brand marketers' goals, which include measures such as awareness, recall and likelihood to purchase, which is what Dynamic Logic aims to capture through controlled exposure studies.

In this particular list, Dynamic Logic first considered awareness, with the top-performing campaigns garnering between 18% to 43% gains, and then looked at persuasiveness, with the eight campaigns listed here all falling into the top quintile in terms of that metric. They also all had positive brand impact, the firm said. Ms. Eule said it's difficult for an online campaign to successfully capture all of those things and credited the prominence of the branding and the products in the ad as being major drivers of awareness.

One key to success in the interactive space is, naturally, interactivity. (While that seems obvious, it's still common to see marketers that fail to take advantage of this attribute.) The McDonald's campaign, from Tribal DDB, Chicago and OMD Chicago, for its Asian salad allowed users to mouse over the ingredients to see exactly what each one was. Kraft's campaign for Crystal Light On the Go, from Modem Media, let users shake a water bottle after the powdery mix had been added -- to virtually mix the drink.

Importance of video
Many of the top campaigns also incorporated video. And it wasn't limited to pre-roll and interstitial ads but also made use of technologies such as running video within banner or display ads. Kraft did a particularly good job of this, Ms. Eule said, with its Oreo ad, from Modem Media, featuring three ballerinas dunking cookies into milk -- a 15-second re-edited version of a TV ad.

And that example pointed to another trait the top campaigns shared: consistency with offline ads.

"Video units consistent with TV likely helped," said Ms. Eule, who suggested Dove's Super Bowl ad about its Self-Esteem Fund, from MindShare, New York and Ogilvy and Ryan Interactive, helped give the online campaign a jumpstart.

The right ingredients for online ads

What the top campaigns had in common:

• Keep it visually simple. Stick to little text and beautiful product shots. Online ads "are competing with a lot of other elements," said Michelle Eule, VP-research at Dynamic Logic.
• Put the brand front and center.
• Align online and offline campaigns. What's happening in other media can reinforce the online message and vice versa.
• Incorporate video and rich media: McDonald's salad spun. Oreo cookies dunked. And try out various video units—pre-roll, full-page interstitials, in-banner video.
• Add interactivity. Kraft let users virtually mix its Crystal Light On the Go product into a bottle of water.

Brand Marketers Use Direct Methods

JUNE 6, 2007

Direct metrics tempt the purest of branders.

Brand and mass marketers are now using direct techniques in their campaigns, according to the Direct Marketing Association's "The Integration of DM and Brand" report.

More than half (56%) of respondents to the DMA survey used one or more direct marketing channels in conjunction with their brand awareness advertising. Specifically, 50% used Web marketing with direct response mechanisms included, 48% used trackable offers and 45% used call-to-action on Web pages.

E-mail in particular is used with a range of direct marketing tactics. For example, 52% of respondents used call-to-action in their e-mails, 50% used targeting and 47% used trackable offers and response mechanisms.

Respondents said nearly two-thirds of their marketing budgets were allocated to direct marketing, and 36% toward mass marketing.

Search marketers were especially keen on direct techniques. Search engine optimization (SEO) and marketing (SEM) were used with response mechanisms by 28% of respondents, while 31% used SEO with targeting and a quarter used search engine data for list building.

"We began this report with the hypothesis that brand and direct marketers would differ substantially in their responses," Peter Johnson of the DMA said. "But when we analyzed the data, we discovered that, for those marketers with more experience, the differences have faded away. Marketing experts are combining direct techniques into brand advertising — and in all media, too."

Eugenia Steingold of the DMA added, "The findings of our latest report show that direct marketing tactics designed to increase consumer awareness and action are ubiquitous — from URLs on all marketing materials, to 800 numbers, to calls-to-action in TV, radio and print ads — and across every other type of marketing media."

The results of the domestic DMA study echo those of the Search Engine Marketing Professional Organization's worldwide survey conducted in December 2006. That study asked about core metrics used to measure search engine marketing effectiveness.

Nearly all the metrics mentioned linked to various direct response goals, except for brand impact, which was cited by only 21% of respondents.

Over half of search engine advertisers in the same survey said brand awareness was a top goal.

However, eMarketer Senior Analyst David Hallerman noted, "The effectiveness of search marketing for branding is not as readily measured as direct sales or lead generation. Furthermore, a brand is often promoted by the same techniques that can be counted by direct response metrics such as site traffic."

"Brandjacking" is on the rise

Do you know how your brand is being used online? According to a new report called the Brandjacking Index, many brands are being hijacked online - and companies don't even know about it.
by Kristina Knight
Cybersquatting is the leading cause of brand manipulation. By buying relevant domain names, cybersquatters abuse the brand image for their own gain. Phishing attacks, click fraud and similar tactics are used to make money or steal information.
The Brandjacking Index tracked 25 popular brands on 134 million public online records in March. The report authors found more than 285,000 instances of cybersquatting during the four-week study period.
Frederick Felman, MarkMonitor's chief marketing officer, said (in an interview with Reuters) that cybersquatting is a starting point for other forms of abuse, including search marketing tricks designed to pull traffic away from reputable Web sites. "Brand-holders face a double whammy: The volume of these abuses is significant, while abusers are becoming alarmingly savvy marketers," he said.
In another report, researchers found that phishing attacks increase 104% between March 2006 and March 2007.
What can a business, online or offline, do to protect themselves?
Stay on top of where your brand and trademarks are being used with a brand tracker like this one from ACNielsen, and invest in an email authentication program for email campaigns.