Tuesday, September 4, 2007

Customer Service is Your Most Important Marketing Tool

This past weekend I tried to rent a car from a well known rental car chain that shall go unnamed. Being the savvy consumer that I am, I took a bus out to my hometown in NJ and saved $100 / day by renting in the place where everyone has a car and by returning to the place where almost no one has a car (NYC). Smart, huh? Well turns out they wouldn't accept my debit card. The one with the MasterCard logo. After explaining my situation the customer service rep only said that he couldn't rent me the car unless I brought in a credit card with my name on it. I told him that I wanted to speak to the manager. His name plate said that he was the manager. I've been able to rent cars from every other place in the entire world with the same MasterCard credit card and the one in my very own hometown would not let me rent. Amazing. I tried everything. I called the corporate office, I called reservations, I called everyone (including my dad, who drove me home, and we opened up junk mail which eventually led to my credit card). This just doesn't make any sense to me as to why this one car rental company needs to have a different policy from anyone else. But what really irked me was the customer service rep/manager's attitude. As marketing folks, we spend so much time and effort trying to figure out the best way to have good people buy our products and services only to have one negative experience destroy our career's work. Why do we treat our existing customers so poorly? Look at all of the great deals for cell phones for example. These are only applicable if you are a NEW customer. Think about all of the rewards and loyalty programs that rip you off if you forget to redeem. Enough about my rant, I think one of the things that we should always remember is that the customer is in control and a few flimsy free nights/rentals/whatevers is not enough to persuade that customer to stay especially if the face of the organization (the customer service rep) is rude.

Thursday, August 16, 2007


The DMCA ruling is what is so far protecting YouTube from any of the copyright infringements that has been piling up against them. Blogger (disclosure: used for this blog) recently took down a "Facebook Secrets" blog that displayed the source code of Facebook. So - that being said, will people invoke the DMCA every time something goes up that is questionable and / or objectionable? Bolt.com couldn't continue to fight the battle with the DMCA with the mounting legal fees and is now officially dead.

Is an alternative Creative Commons? What's the difference between posting something to your own Web site versus posting to YouTube? Is there one? I think that the pending legislation around the DMCA is really going to change Web 2.0 and the direction that it goes.

My feelings? I think that copyright holders need to be more open and available with their intellectual property. My favorite example goes to the mash ups that were available when Lucas made some Star Wars clips available to fans. Zidane's head butt mash ups were the funniest thing I've ever seen, and probably did wonders for the sport that plays fourth (maybe fifth) here in the states.

It'll be interesting going forward and will change the models of a lot of businesses out there including Google and the other big digital players. We'll keep an eye on this space for you...

Friday, August 10, 2007

TV and the Long Tail

It's anyone's guess as to whether the acquisition by JumpTV of CyclingTV makes sense. That being said CyclingTV actually has paying customers - $40 a year for 18,000 customers - about $720,000 in annual revenues. JumpTV recently raised $100 million in an IPO and is using its stock and cash fairly wisely (the Cycling deal was 50/50 about). But the disclosure about CyclingTV actually brings up a very interesting point. Are customers willing to pay for content that they really really really want?

I think the answer is YES they are. And maybe JumpTV has the answer - aggregation. The ability to bring the long tail into one market. After all, with only 18,000 paying viewers, how can you pay for anything else other than a basic infrastructure? But with aggregation and shared resources this could become profitable. Paid content surely prevents getting around the guys that sign the checks since there are few advertisements if any. The one thing I'm worried about is piracy for these guys. It's not too difficult for a disgruntled customer to take a stream of Cycling TV and repost it on YouTube. Or is it? I'm not a subscriber but I'd be interested to see what their DRM is....

For the naysayers out there....remember in 1985 (if you were alive back then) when someone asked you to start paying for TV (yes it was and still is free for SOME content). Well guess what that trend took off. Pay Internet TV? Maybe not such a bad idea.

Thursday, August 9, 2007

The Bubble is Getting Bigger

PaidContent just reported that NBC and News Corp's Clown Co, as dubbed by Google execs, video sharing site, received a $1 billion dollar valuation by receiving $100 million for 10 per cent. Earlier NBC Uni launched Didja.com a site where users can watch commercials (similar to TBS's VeryFunnyAds). This follows large VC investments in comedy video sharing sites, $30 million in Video Jug, and a boat load more in Veoh (which MTV exec Tom Freston joined in...hmmmm this could be interesting..).

Well, I hate to say it guys but this is the same exact scenario that happened in 1999 with ecommerce websites (although no lavish parties this time around). Sure, we all want to build the next YouTube but with no business model how can these valuations be sustained and which companies can absorb the loss (and potential lawsuits) of these resource intensive sites? Only a handful and Google is trying to make good on its first purchase.

We need to see a model that works in this space. There needs to be a way for producers to make money for advertisers to make money and for the user to...well the user always wins.

Friday, August 3, 2007

The Risks of Social Networks

Reported today (via Mashable) was how Facebook lost Vodaphone as an advertiser because its skyscraper ads were placed on the same page as the British National Party (a far right party that wants to rid the UK of all non whites). On that same page were T-Mobile and Virgin Media which so far have not said anything. This is just another example of the difficulty with advertising on social networks. The message cannot be controlled. I cannot imagine actually having someone troll through each and every single page on Facebook to make sure that ads are placed exactly according to the criteria of the advertiser. Does ad placement make Vodophone guilty by association? Were these criteria even given to Facebook?

I think as brands we need to understand what is happening within the Internet and that we cannot control the message as much as we'd like. Look at what happened with GM and their viral video contest. It would be a different issue if Vodophone ONLY showed up on the BNP's page. Regardless, as brands we need to tell media outlets what we definitely do NOT want to be associated with. To have Facebook assume that they don't want to be on BNP's page is ridiculous. We are losing control whether you like it or not so we have to adjust ourselves for it. Provide media outlets with criteria that would cause you to pull your advertising; but don't try to ask them to read your minds...

Thursday, August 2, 2007

The Penguin Eaten by the Mouse

It's official! Club Penguin has been acquired by Disney for a whopping $350 million with bonuses and incentives that could be worth up to $350 million more. Supposedly Disney outmaneuvered AOL at the last moment. We talked a few months ago about how Sony was in talks with them at a valuation of $450 million. The site has 12 million users and 700,000 subscribers paying anywhere from $6 a month to $58 a year. The amazing thing about this site unlike many others that have been bought is that it is a cash cow. The site has margins of 50% with about $30 million in revenue. Talks with Sony and other media companies interested in buying it supposedly fell apart because the Penguin donates a substantial amount of profits to charity.

I think that Disney got a steal here. If you think about the MySpace acquisition about 3 years ago which Fox also stole at $580 million Disney will have a lock on the child market. And unlike Second Life, these are real paying users. I'm not sure how integrated the Penguin will be with other Disney properties and I don't know how good of an idea it will be to do that, but just the fact that you have the attention of 12 million people (I'm assuming mostly kids) is superb. Again, not to bash Second Life, or even Joost, or other download services, but it goes to show you how important it is to keep your product within the confines of the Web. Club Penguin is flash based. Kids don't need to worry about viruses or any other kind of malware and they are able to access their accounts from anywhere - versus any of the software based programs which force you to download onto the local computer. Viacom purchased Neopets in 2005 for $160 million (a very good deal, good job Sumner!) and now there appears to be a showdown between Disney and Nickelodeon for the kid market. What will happen? I'm not sure. But this space dominated by others like Webkinz and Habbo Hotel will be an area to watch.

Wednesday, August 1, 2007

Long Tail....Dead?

A very interesting study was published by Chitika and the University of Texas saying that the top 50 blogs generated $50 million in revenue total (via TechCrunch). Not bad. That gives the average top 50 blog $1000 of annual revenue. Of course this number is skewed since Perez Hilton and Michael Arrington aren't really scraping by. Arrington points out that 15% of total blogs accounts for 90% of the revenue out there. That could be true. However, I do believe in the long tail although money might not be the best way to measure it. True, there are a lot of blogs out there that really mean nothing (a teenager's diary, personal notes, family photos) but there are other random blogs that discuss all types of obscure topics, ranging from Transformer toys, to a Shih Tzu's life, to life in Topeka, KS. Someone's gotta be reading these things! And the more niche the blog the better. You can sell toys, dog gear, and local services on the above mentioned blogs, respectively. Sure the big blogs will always work best for Coke and Pepsi type products, but we can now compare blogs and the target demographics to cable television....

I think ad networks have yet to realize the power of the long tail, and until that happens you'll get these skewed numbers....

Thursday, July 19, 2007

Whole Wild Forums

By this time, you've probably heard about the fiasco with John Mackey's forum posting on Yahoo! Finance and other message boards. Using the pseudonym Rahodeb (backwards for his wife Deborah), he posted positive things about not only Whole Foods but about himself and negative things about Wild Oats (the company that they are purchasing). The SEC Chairman Harvey Pitt says that its "bizarre and ill-advised, even if it isn't illegal."

I'm sure this isn't the only time that a CEO has jumped onto the message boards to pump up their stock but I think the bigger issue is one that has plagued the Internet since its existence, Anonymity. As that famous cartoon said, "No one on the Internet knows that you're a dog." Anyone can be anyone else. And that I think was not only frustrating for someone like Mackey but a way to fight fire with fire. I'm sure he encountered many anonymous posters that said negative things about his company that had no basis.

What can we do about this? I think within a year a social network like MySpace will have dropped in value significantly because of all of the anonymous bands, movies, porn cameras, and fake profiles on it. On the other hand, Facebook will continue to grow because of the verification standards that it has and the networks that you have to join. (Don't change this, Mark!) If I recall correctly, eBay has immense value because it is difficult for you to change your screen name (so I can't go rip someone off and then re-open and then rip another person off, etc).

If you realize, the networks with the most value that people come back to time and again are the ones where you can really verify who you are. This minimizes spam, threats, violence, anything that will detract from the true goal of the site! Perhaps this means linking a credit card to your site (even if you are not charged!). This is a tactic that eBay employs. Have other people vouch for you (like LinkedIn or Facebook). But I really believe that the anonymity of the web has to be curbed otherwise the value there will really diminish. (I hope that I don't eat those words when I find an example otherwise!)

Wednesday, July 18, 2007

Could YouTube be in Big Big Trouble?

The official numbers on YouTube's dominance in the video sharing space are out. Online video as a whole attracted 75% of US Internet users according to ComScore (via Mashable) that watched 158 million minutes of online video in May. The average stream is about 2.5 minutes. 35% of users use YouTube and YouTube accounted for over 20% of the online video stream total. Wow.

And now the bad news. Dailymotion a large French video sharing site was ordered by French courts to pay $32,000 in damages to a French director (along with the producer and distributor) who's CLIPS were on the site. After the clips were uploaded did Dailymotion begin to use Audible Magic which is seemingly becoming the standard in detecting copywritten clips. But what does this mean? Is this the end of the DMCA as we know it? (As an aside the DMCA stands for the Digital Millennium Copyright Act, and basically says that a Web site has no jurisdiction over what its users do, hence YouTube has been claiming as one of its defenses against Viacom). Will YouTube have to give up its users private information if they are caught infringing? Were all those Zidane Mashups from last summer considered copyright infringed?

We saw earlier this year how Digg went down with users posting the HD encryption key on its site. Will YouTube users also contribute to the backlash by posting copyrighted clips, causing massive lawsuits against YouTube and its parent, Google? And while $32,000 is small change for Dailymotion the video in question were clips. Was this fine some type of relative measure?

Lots of questions here. We're digging to get to the bottom of this and what this means for the future of online video sharing. But we do know one thing. Video sharing no matter what is here to stay.

Tuesday, July 17, 2007

Commercials as Entertainment

AdAge's AdReview talks about the Sonic commercials and the well executed jokes and humor in them. The Sonic commercials are an example of commercials that you might not want to fast forward just because they are actually entertaining. (If you TiVo everything, then you might not know that..) But as I've been saying for a while now, the 30 second commercial is dead. So what do you do?

ABC.com allows one advertiser to purchase the entire ad portion during its commercial breaks. It really pains me when I see the advertiser using that time poorly, meaning it simply shows the same non engaging commercial every single commercial break. However, Fidelity had an interesting ad where they asked you very simple questions and showed a simple animation based on your answer. And thus you could do the same with your commercials. Depending on the ad time (still 30 seconds), why not shoot a variety of different commercials that all wove together into one story line?

Interruption advertising is no longer working. It could actually detract from the brand. However, we've all grown up watching commercials so we actually tolerate them. But our recollection is virtually zero. Don't think that commercials have to inform. Look at the buzz created by JJ Abrams new film tenatively titled Cloverfield. It didn't tell us anything about that film yet people are Googling and speculating about what it could be. Let the audience decide whether they are interested enough to find out more from the quick teaser that you give them. If we can make our commercial actually become water cooler talk we've done our jobs.

Monday, July 16, 2007

The Way Things Work

Another wild weekend with things that we thought that worked not working and things that we thought would never work working. First off - Second Life is dying. At least in a corporate way. Corporations are leaving in droves because the CPM is just way too expensive. While there is a higher CTR the CPM is not justifiable. Secondly - The TiVo numbers are out. And...Direct response commercials are the least fast forwarded commercials out there. Strange. Thirdly - Why aren't people clicking on those Facebook ads?

So those three points are some interesting issues that are going on in today's tech beat. But I think the more interesting thing is the growth and spread of these networks like Second Life. (or un-growth). Why is Facebook so large and ConnectU the company suing Mark Zuckerberg not? So advertising as we know it is changing. Things aren't spreading the way we think they are. A virtual 2D world like Barbie has more users than a Second Life and will soon rival World of Warcraft.

A new world of thought has emerged that is rivaling Malcolm Gladwell's Tipping Point strategy of Influentials well influencing people. It's from Columbia Professor Duncan Watts who believes that its not the influentials but the easily influenced people that make a difference. BzzAgent utilizes this strategy as well. I think though that when it comes to viral marketing and the way that it works it really depends on what you are trying to market. If you are marketing Coke and Pepsi then sure, you should go with the Watts School of thought. After all, everyone needs to drink a soda every so often. And when you're thirsty do you really care if Paris Hilton is drinking a Coke (although you would care if she was drinking a Vitamin Water, which is arguably, a reason for its great rise)? I think fashionable products and name brands work better through Influentials (like Paris). Products where you can charge a premium because its the celebrity's choice, etc. That works. But I think when you are going after mass merchandising buzz (let's say you have a website that let's you create a profile and all you care about is number of profiles, all right let's just say you have MySpace) its a better deal to go after the lowest common denominator (hence the simple yet poor design of the site).

As we've seen before, we've been wrong, but we'll be keeping our eye out on how things grow in this new viral economy.

Thursday, July 12, 2007

Jackson's Back - Fortune 500 Beware!

Eric Jackson is back! He's the activist shareholder behind Yahoo! Plan B and perhaps one of the reasons that Terry Semel was ousted from office. His tools: MySpace, YouTube, a blog, a wiki and never ending energy. Now he's back and has set his sites on Motorola, the fledging cell phone manufacturer. He specifically states on his Motorola Plan B website that Ed Zander of Motorola has led to 13.5% returns for the stock versus 35% for the S&P and 37% for Nokia. Through another social media tool, youchoose.net, he's been able to aggregate 422,430 shares of stock so far (the campaign is 3 days old). Dominic Jones from IRWebReportDaily has some interesting insights into the evolution of the web and how Jackson is taking things to the next level. With low commission online brokerages popping up, ownership in stock has risen to all time highs. Similarly, the web has brought together like minded folks in a type of shareholder activism. However, while people like Jackson are targeting the tech savvy, Jones still believes that true power lies in the "soccer moms" that can pull money out of their mutual funds as the ones with the true power. He cites the Disney debacle a few years ago as the first and strongest of these showings.

Wow. From an IR perspective this could be a logistical nightmare. Before all we had to worry about were the few fund managers and maybe now a few hedge fund managers that owned our stock. Now how do we answer every question out there that every mom and pop shareholder want answered yesterday? While most of these individual investors are not Eric Jackson, we don't know who will be and that's scary. So what's the answer to this?

I think transparency is the key to effective communications with the public and especially to the masses. Apple did it with their defective iPod battery and folks realized that although Steve Jobs is sometimes a god, he's still human. Dell didn't do it with their firey laptop batteries and they paid the PR price. Yahoo didn't admit its mistakes in losing Google, then Facebook, and Semel paid the price. Is blogging the way to go? Perhaps. Johnathan Schwartz from Sun Microsystems keeps a blog that sometimes gets him into trouble.

I think the general public will accept mistakes but they won't accept dishonesty or cover up. Admit mistakes and let your investors know about them before they leak out and there's a PR nightmare....

Wednesday, July 11, 2007

Interruption Advertising

There are just some moments in your life when for once, you just don't want to be marketed to. And for Greg Verdino its when he's updating his blog. In his marketing blog, he makes a good point about interruption advertising and how it sometimes brings about bad will to a given sponsor and media outlet.

We've seen that the most successful advertising and media company out there Google lets you choose when you want to be marketed to. And that is the model of the new millenium. With all of the tools that we have to bypass commercials (i.e. Tivo), with all of the conditioning to ignore that we've grown up with, we need to find times when people want to be interrupted with a certain ad.

A tool that I saw last night is really cool. It's called UpNext and right now only works in Manhattan. But its Google Maps on steroids and while it basically launched last night, it is addictive. I surfed around the virtual streets and buildings of Manhattan for a few hours last night looking at all of the buildings and finding out all of the restaurants and bars that I never knew about in my neighborhood. I was happy to entertain that there was a Cuban restaurant a few blocks from my apartment and actually clicked on it to learn more.

Interruption advertising doesn't work. It's an annoyance. If we click on it, its an accident. I read an AdAge article this morning about relevance. Why is Netflix blanketing the world with its pop ups? Sure everyone watches movies, but don't you think real movie buffs would want the 10 discs at a time plan? Why not advertise on IMDB, Yahoo! Movies and other relevant sites? As this blogger said, its virtually riskless in this online space where there's lower production costs and media buys are not as expensive as television. Take a risk, go out there and find a niche and appeal to them. Or else feel the result....Since by now we already know about Netflix and as they continue to interrupt folks like Greg Verdino, they may lose more and more subscribers.

Tuesday, July 10, 2007

Death to the Page View

How do you track the popularity of web pages? It used to be that every page that was loaded into the system would be counted as a "view." From here, the sites with the most "views" would be counted as the most popular. However, with new technology like Ajax (think Google Maps, where you are not reloading the page) and streaming video, the page view is no longer accurate. Nielsen/NetRatings one of the bigger ratings agencies online is changing its metric from the page view to time spent on the site (via PaidContent). Right off the bat, we know that Google known for redirecting other people to the sites that they want will drop in ranking. Yahoo with its Ajax filled pages will rise and MySpace will most likely fall as well (poor HTML design forces users to visit new pages). Video sharing sites where users are spending a whopping amount of time will likely increase and crack the top 10.

What does this new measurement mean for marketers? Well, sites are able to use these new metrics to increase their CPM. However, I think we will all know which tactics work best given our demographic. The new measures also don't take into account widgets, which I think given Facebook's API opening will be essential for marketers to know (although technically we could go by number of subscriptions). So once again measurement is all over the place.

Google is going to continue to drop in terms of time spent at least with their flagship search product but I still think that contextual search and SEM are the best ways to bring folks into your online store and convert them (since they are looking for you anyway). We all know the addictiveness of social networks and email but if you leave your email open all day (as Mashable suggested) are you really engaged with the banners on there as well? Does Yahoo or Gmail have the right to charge more for these pages? Similarly we also know that sites like YouTube will rank higher but is anyone watching the ads?

I don't think the new metrics are going to tell us anything that we don't know already. It may give media companies a way to charge us a higher CPM, but I think that we know (hopefully) the ways that our target demographics use the Internet. Whether its through banners, Facebook widgets, etc, I think the best way to measure is by ROI ....

Monday, July 9, 2007

When You Pay For Something That's Free

There's been a lot of techie hype over Kevin Rose's lastest start up. (Kevin Rose is the founder of Digg). Pownce is a P2P way to send "messages, files, links, and events" to your friends. But outside of this, is the fact that Pownce is still in Beta. Not much different than other Web 2.0 companies and to limit their testers Pownce is only letting folks with invites join. Again, not much different. What is different is the artificial marketplace that has surfaced because of this. Remember Gmail? Gmail invites at one point were hitting $200 on eBay. Now Pownce invites are ranging from a starting bid of 1 cent to a buy it now of $9.99.

I'm not sure who is posting these invites for sale, but could it be Pownce's own team? While Pownce cannot charge (it would be against the Internet's business model), folks with invites can create an artificial market and therefore make each free invite somewhat valuable. If they can do this demand is going to outstrip supply, which will create a buzz around this "free" product.

I don't think that Pownce has the name recognition that Gmail did at this same point for it to work. Also, how many people are willing to pay for this? It's not the same as Gmail which is interoperable with other email addresses. Right now there were 3 bids for Pownce invites and other sites like Mashable and Techcrunch give these invites away for free.

We'll see how this strategy works, I wouldn't be surprised if it backfired, although some blogs have picked up on the artificial marketplace....

Friday, July 6, 2007

Piracy Crackdown

Yesterday in New York City, Kalidou Diallo was arrested under the city's new anti-piracy laws when he was caught recording the Transformers on his handheld camera. It's definitely a move in the right direction to protect copyright but is it enough? Lawrence Lessig has been moving towards a copyright free world with his Creative Commons effort and in the Internet world it appears that this is the only way to enforce things: by not enforcing things.

Diallo was caught recording the Transformers and his plan was most likely to sell the "bootleg" on the street for 100% profit. His business model would have him, the retailer, winning, you, the consumer, winning (because you would pay a reduced price to see the film), and the producer, Dreamworks, losing (they don't get to collect a fee for entrance). In essence this equation is shifting power toward the retailer. But if we think about traditional television the equation is also changing. Previously it was: the user pays (with his time), to watch commercials that the sponsors create, in order to get to the content. Thus the brands get your attention, and for that attention they pay producers to create content that you want to watch but will put up with commercials to get to. Now the equation is changing with TiVo and DVRs. Now the user doesn't pay, but brands are still paying. Content is still being made so there's an imbalance. Who's losing? It's the same case as Diallo - the guy footing the bill. In TV its the sponsors.

I think that pay per entrance still works. After all, you get the luxury (at least in some theaters) of comfortable seats, big screen, shared movie going experience, and last but not least, new cutting edge content. It's worth $9 ($12 in Manhattan). But TV? In the comfort of your own home you can do anything...including stealing content. There are legitimate tools out there that make this easy for you to do. In the old days you could just tune your brain out but now you don't even have to do that. And with tools like Apple's ITV how can we continue to justify television broadcast and more importantly, costly national media buys?

True, there are some events out there like the Super Bowl, and other sports, awards shows like the Oscars, and other "events" out there (last episode of Sopranos for example) that are worthy of getting a large audience together at the same time. But for the most part we want to watch what we want when we want. I've been an advocate of product placement for some time and I'll put this one thought in your head of cross generation product placement with a strange product known as the female sponge. In yesterday's AdAge the mention of the contraceptive sponge as used by Elaine in Seinfeld, demonstrated the power of perfect product integration. The product had recall among every generation and with the power of Seinfeld's syndication network, even stronger. Now are you Tivo-ing through that?

One last thought: the folks that paid for the production, namely GM, although I haven't seen the movie yet, would probably want this movie to get around as much as possible, although now that I think about it, if you are bootlegging a $10 movie, you probably can't afford a $30,000 Camaro.

Thursday, July 5, 2007

The Hype

Well even if we have been living under a rock, we would have known about Apple's iPhone release last Friday at 6pm. In fact that was single handedly the only piece of news out there in the tech community. But some of the stats are in (via TechCrunch). As of Sunday, Apple and AT&T moved 700,000 iPhones. Apple sold out in 95 of its 164 stores. The larger phone which was calculated at a cost of $220 and sold for $599 and the cheaper phone at a cost of $200 selling at $499 gives Apple somewhere of a $200 million + weekend IN PROFIT (less marketing costs, we'll talk about this later).

It's an amazing phenomenon. People were in line as early as 5am on MONDAY, a whopping FOUR days before the iPhone went on sale. How much marketing was done? Very little. If memory serves me correctly, a Super Bowl ad. That's it. The rest was Jobs talking at various conferences and user generated hype. How sustainable is this? If the iPhone promises to change the way we do telecommunications...a lot.

But what really interests me is the artificial hype that was created about this phone. Sure its a beautiful phone and this past week, when I noticed someone with the phone it made me turn my head, but never before has a phone really made this much impact. A phone as status symbol. Only Apple could do it. The Sidekick went for the young hipsters, the Razrs went for the mainstream, but the iPhone did it right. I'm not sure why but it did.

There are many Apple evangelists out there that support anything that Jobs does. I don't know if its a function of that fact that he's going up against the evil empire in Redmond led by evil Bill Gates and that in a way he's still David versus Bill (Goliath). But there is no other brand that has much loyalty as the Apple heads. And I cannot figure out why. You'd think that there'd be diehard Yahoo guys against Google, but there aren't. Wii versus Playstation. Nope. The only one that comes close and this is very distant are MiniCooper owners who seem to have formed a click. And for that fact other rare car owners (see Larry David's Prius episode).

But these supporters came out and did what Steve wanted them to do without him asking them. They just read his mind. They blogged about it, they created mock commercials about it, they waited in line for days, they thought about it, they drooled about it. Over a phone. Over an IPHONE. The fastest selling gadget of all time - people are trading off weeks of food for a $600 phone! And I bet you if it weren't for all of the mumbo jumbo that you have to deal with when you go to a cell phone service contract they would have to sold more. Which leads to my final point of sustainability. Sales will be sustained....but now the ball is in AT&T's court (which so far have not been positive)....

Friday, June 29, 2007

Lessons from Online Video

Dotcomedy was reviewed today by Mashable. It's a Funny or Die wannabe that is ad supported by NBC. The difference with this is that there is no UGC here - all content that is posted is reviewed by NBC's editorial staff. So only the best clips make it on there. Will this model work? Well, at least we won't have to wade through that much stuff, but perhaps volume is still the way to go where people will find something that appeals to them.

What's interesting are some of the comments from the OMMA video conference as reported by PaidContent. Some of the highlights include:

  • Video Ads need to rely on visual rather than audio - most users have their sound turned off or low
  • CPMs are hitting $5-$15 for semi professional user generated content (Heavy.com calls this SPUG)
  • Greg Wilson from Red Bull Tiger - One other thing he doesn't want is product placement. "It's a crock. When someone holds up a bottle of Evian on TV, is anyone being fooled? Is anyone being enticed? It's only being done because we can't think of anything else to do."

So that's another week in the wild west of online video. It appears that more and more brands are turning toward branded entertainment, but the big issue is still search. How can we find videos that are relevant and interesting to us? Will these ads pop up? Some but not all. The sunglasses falling on my face video was sponsored by Ray Ban but for everyone of those there are many more viral ads that barely make their view count out of the 100's. Are those considered successful? What are the metrics here? Greg Wilson's comments take out product placement, but what are our alternatives other than sending someone over to sit next to you and talk about products. I think that technology has been maxed out here. After all, you can't control content, filmmakers will make whatever they want. How do we get this stuff paid for?

Thursday, June 28, 2007

MySpaceTV looks a lot like YouTube - Prom Queen stats

MySpaceTV launched today and it really does look very similar to YouTube. Besides its cluttered landing page which is stuffed with banners, MySpaceTV has nearly the same exact layout as YouTube, which isn't necessarily bad. MySpace users most likely have visited YouTube and know that site fairly well. All they need to do now is hang onto their traffic instead of direct it to YouTube. Given that it launched today, I'm not going to discuss their very slow load times as I'm sure they are working out the kinks, but I think that with all of the folks that YouTube pissed off (especially on the pro content side) MySpaceTV is a viable alternative. It's already #2 and with this new setup could overtake the top spot. The more I look at it, the more its an EXACT copycat of YouTube. Everything from the layout to the categories to the way that its sorted (although some of the things don't really work).

An interesting point to note about MySpaceTV is that PromQueen received a majority of their traffic through the social network. I'm looking at the PromQueen page and seeing that different episodes get a different number of views. I would expect recap episodes to have a low hit count, but some of the videos that have low hit counts just don't make sense. Granted I haven't been watching so perhaps the prior show lead in was weak or there was some type of grand PromQueen promotion....But the variance of views goes from a few hundred thousand to 20,000. Strange huh? Is that really the way that we consume our video? I would compare all 80 some episodes of PromQueen at 1:30 each to a 2 hour feature film. Are we really that impatient that we will skip the boring parts and fill this in with our own perceptions? My initial feeling was that Prom Queen episode 1 would be the most watched. It's not. It's episode 20: Off like a prom dress with 1.2 million views. Could that have been the day that Prom Queen was featured on the front page of MySpace? Or was episode 19 really that good? Was it the name of the episode? Because episode 67 was called Naked n the Rain and that only received 139,000 views. I'm glad that MySpaceTV captures all of these YouTube like metrics (and hopefully more) as we'll soon be able to dissect our viewing habits.

Overall, I think that MySpaceTV is going to give YouTube a run for its money. Why go onto two sites when you can simply stay on one?

Wednesday, June 27, 2007

Social Networking at an All Time Buzz

The words couldn't be out there more: MySpace, LinkedIn, Friendster, Bebo, Facebook. All of them are useful sites. All of them are addictive sites. But what are they really worth? Yesterday we talked about the demographics of MySpace versus that of Facebook. Today, we're going to talk about the value. Yesterday a few pieces of news turned our heads toward this social network phenomena again. LinkedIn, as broken by Reuters, could be planning an IPO "as early as next year." The site claims to have about 12 million users and expects $100 million in revenues by next year. Then, the guys that started it all, Chris DeWolfe and Tom Anderson, the founders of MySpace asked Rupert for 50 million bucks for the both of them for two years. Again, many speculate that this request was to cash out at the height of the social networking revolution. So far no news as to whether Rupert will grant this request. And just to throw it in the mix, Facebook is still independent although rumoured at at least one billion dollars (and I guess given the more educated demographic with more disposable income, possibly worth it, given the $580 million spent on MySpace).

All of this money being thrown around for user generated content platforms. Is this the height of the social networking that we've seen prevalent since Friendster days? Why are these guys looking to cash out? MySpace is nearly saturated with users, coming up on 200 million. Do they think that social networking has maximized its growth? An interesting book that I read lately is The Cult of the Amateur where the author talks about how all of this user generated content is ruining us. Is this what the owners think? Do they want to be distanced from their creations?

Regardless of their reasoning, every new website out there now has some type of social network component. The ability to not only gather information, but to find like minded people regardless of geographic boundary is extremely valuable. But upkeep to these sites is a major task at hand. Again, we'll keep an eye out on how these social networks continue or don't continue to grow.

Tuesday, June 26, 2007

MySpace versus FaceBook

An interesting study by Danah Boyd that we've been pointed to by Mashable, looks at the socioeconomic differences between your typical MySpace user and your typical Facebook user. Overall, she concludes that Facebook users are more educated and "good kids" while MySpace users seem to be those that are "bad" and that live in the fringes of society. Income had little to do with the outcomes of the study as a struggling actor/waiter making $12,000 would fall into the Facebook camp and that the differences emphasize a matter of upbringing. She also notes the banning of MySpace in the military while Facebook is still allowed and used by most officers. Finally she notes the cleanliness of Facebook's white background as opposed to the clutter and noise on some MySpace pages.

The results are not of a surprise if you look at the origins of both social networking sites. Facebook started at Harvard and while the network is open now to anyone, you tend to be on networks where your friends are. Hence, Harvard folks are friends with other educated folks and so on. Further, prior to opening up, you needed a .edu account to join Facebook. On the other hand, MySpace started on the fringes with the underground music scene. Soon it spread pretty quickly, but with anything mainstream, pretty soon everyone's on it. I think MySpace has lost the most value recently with the openness of the site. I get more spammers posing as lost 20 year old girls than real people, more bands and films trying to build a following, and more people that I don't know that want to be my friend.

I think that in the MySpace world - it's all about carving out your piece of the Internet; you have your own URL and many use it as a "resume" of sorts. In Facebook, its true social networking. You can't link to anyone randomly. That's the benefit of sites like Friendster and LinkedIn. To get access to others, you must REALLY be my friend (although there's a bunch of ways to get around this). Is that what Danah Boyd is trying to say? That socioeconomic upbringing is about me, me, me? Ego is everything? That kids understand why they went to Harvard, not necessarily about the education, but about your classmates and building networks? The interesting thing is that we can now track how Facebook will grow given its open nature and see if this is true.

Monday, June 25, 2007

Revision3 raises $8 million

Digg Founders Kevin Rose and Jay Adelson have raised an additional $8 million for their Revision3 website. The additional capital should allow for Revision3 to add to its 10 show slate and to expand its website and operations. The most popular of their shows Diggnation is advertising supported but has a very interesting business model where the hosts actually talk about the products (kind of like Howard Stern). The shows hit the geek demographic with shows that are called Ctrl-Alt-Chicken, Pixel Perfect, and XLR8R TV. It also allows you to take the content on the go with QuickTime downloads. Their Flash player from BitGravity is also a solid high quality flash player. Overall, a pretty solid product and the best example of monetizing online video to date.

Thursday, June 21, 2007

Video AdSense - Relevant Ads

Remember Blinkx? It's the publicly traded video search site. Mashable reports that Blinkx will soon be offering an advertising network based on speech recognition. So whenever a certain keyword that advertisers bid on either shows up in Meta tags or within speech, the ad will be shown in pre, post, or mid-roll ads.

This is definitely an improvement from Revver's model of fitting an ad in (at the end) that users have to click. Relevance should improve the response that advertisers get. How well will it work? Well the service hasn't launched yet, but I'm going to preface my statements by saying that Blinkx's service is definitely something that we need in the online video space. YouTube is doing something similar but there is only so much information that you can mine from meta tags. With the ability to actually gage what someone is saying, you can really figure out what the content is. That'll really be of value to the entire food chain of users, content creators, and advertisers since more relevant ads will be served to users, content creators will make more money, and advertisers will be minimizing wasted eyeballs.

Great. Or is it? Again, I'm not sure how Blinkx's software will work, but context is everything. Let's say Apple wants to buy the phrase Apple Computer. So everytime Apple Computer is said an Apple ad should run. Well, I think that you can see where we might run into some problems. What if I have a video where a character says "Apple Computer sucks" or "Apple Computer is a piece of s--t" or worse yet "Shove that Apple computer up your..." you get where I'm going hopefully. So then the video that bashes Apple becomes financed by Apple. Probably not where Apple wants to spend its ad dollars. The problem with this model is still that we need some type of human intervention to determine the qualitative parts of the video. It's similar to MySpace problems where advertisers didn't want to purchase ads or even AdSense because they were not sure of the context of the page. Context is key and while keywords will help in relevancy and is a step in the right direction toward advertiser AI, we still have a while to go. In the meantime, good job Blinkx for taking us one step closer to free content and relevant commercials!

Tuesday, June 19, 2007

David Beats Goliath

We've been talking about this story for a while....Activist shareholder Eric Jackson using Web 2.0 tools (social networking, his blog, a wiki, YouTube, MySpace etc) to organize Yahoo shareholders against Yahoo management. Well, unless you've been under a rock yesterday, you would have seen that Terry Semel, the man that Jackson was calling for to step down, resigned as CEO of the company to be replaced by Jerry Yang, co founder of Yahoo and one of Jackson's suggestions. I'm not saying that Jackson single handedly caused Semel's resignation but what I am saying is that Jackson was able to control a little under 2 million shares with his 100 shares from these Web 2.0 tools and a bit of publicity.

The story here is not necessarily one of how Semel stepped down but its about how good ideas can be spread rapidly through these new Web 2.0 tools. Diet Coke and Mentos was another interesting idea that caught on because of online video and its popularity soared with the video sharing sites (including YouTube). Ipods dirty secret also attracted many viewers and caused backlash against the popular mp3 player. The Dell laptop fires are another. Communication online is becoming ever more transparent and the Jackson example is an extreme one of how one person asked how Semel was able to justify his salary and his options given how Yahoo has fared against Google. Sure, the rest of the Street also did not favor him but I think that Jackson proved that sometimes a meritocracy works.

On the other hand, I'm sure IR folks that read this blog are wondering about how something like this could affect their company. No one wants a guy like Jackson against you. He's relentless. However, I think Apple's response to dirty secret is the suggested way to go: Admit that your product is not perfect. Dell tried to sweep the dust under the rug. Bad move. People will out you and your deception will simply add fuel to the fire. Be open. Admit mistakes. Admit that you're not perfect. No one can fault you for that. Not even Eric Jackson (who is now having dialogues with Semel according to his blog).

Monday, June 18, 2007

Brave New World

TechCrunch alerted me to a very interesting YouTube video created by Davide Casaleggio that appeared first on Read/Write Web. The video talks about the future of the Internet in a 1984 / Brave New World style. A bit creepy where everyone is connected online via avatars or as the video puts it Agav, an agent avatar. Second Life, Amazon, and Google are the short term winners but Google eventually rules the world in 2050. The Agav's have five senses built in so that you can trade experiences with anyone (i.e. Joe's European vacation can be yours too!)

The video is definitely creepy and I hope that avatar interaction never replaces real life interaction (although for some MMORPG's this is already reality). However, it really gets you to think about where the Web is going and how much more we can exploit by making the World "flat." Thomas Friedman's book, The World is Flat, already discusses how small the world is when you can pick up your VoIP and call around the world or email or IM someone in India for example. With Agav's this will give you the feel of knowing someone without knowing someone. However, the video also brings up an interesting point that "No one on the Internet knows that you're a dog."
I think that if this is the main way that we begin to do business, there will be ways to assure folks that you are who you say you are. Stronger security and identity measures will need to be in place.

And then finally we run into this cultural problem. The root of all of our problems right now. (I don't want to get political here but...) Online culture will be dominated by who has the most dollars. At this point, its the USA. Will US culture be the dominant one online? And if so, what are the repercussions? With information and culture so available, will other cultures be completely forgotten, destroyed, or wiped out?

Interesting points here but I think one thing remains is that one mile is one mile and that local news will always be of interest to the users. I spoke about local and the big market opportunity that this is. I think that overall the Web will be used for understanding of culture (hopefully) but the ability to broadcast your culture online and for others to respect and learn about other people. After all, like the movie Babel, misunderstanding is the root of most problems. Could the Web be that next Tower of Babel? Remains to be seen....

Friday, June 15, 2007

Virtual Worlds Online

We've all heard about the media success of Second Life; the addictiveness of MySpace; and the large valuations of Club Penguin. Just launched is the Virtual Lower East Side which is an avatar based approach to location based social networking. So take the best of all of the aforementioned products: the avatar based Second Life, with the social networking aspects of MySpace, together with web based aspect of Club Penguin. Just like MySpace, VLES is starting as a tool to bring bands together with their fans. Interesting play, and I think that we could be seeing more of these web based virtual worlds, especially as bandwidth becomes less of an issue and Flash continues to pack in the power in small sized bytes.

Virtual Web based worlds are very interesting to the marketer since we have clearly seen the power in social network marketing and the power of word of mouth. However, what the virual world allows is also a chance to build a strong robust application with little capital outlay. What does that mean????? MySpace really didn't have a strong business model until it reached a critical mass of users and even then CPMs are reaching $30 or so. YouTube didn't have any business model at all (and still might not). These virtual worlds do. Club Penguin charges $6 a month to customize your penguin and users gladly pay. Second Life items cost real money and users gladly pay. Not all users but some and I think that will be sustainable enough for social network and virtual world builders to build a robust application and will allow for more entrants into this brave new world.

Will MySpace become virtual? They have the easiest userbase to do so with. But will it happen? I doubt it. The code that MySpace is written on is so unstable that if we were to have some virtual users and some static users we'd crash the system. So there's an opportunity here! Could VLES be the next virtual MySpace in the 3D Web 3.0? I don't know. But I do know that there's an opening here for someone to create a rich application with decent cash flows that if successful will probably rival a valuation like YouTube's. (Since MySpace was bought for $580 million and Club Penguin was flirting with $450 million at a fraction of the users of MySpace).

Thursday, June 14, 2007

Value of Portals

I'm going to write today about how portals have really changed the way that we do business. Before (and I mean back in the old days prior to 2000), we would register a trademark and a company name and really blast that trademark out there and build goodwill as well as brand recognition. Companies like Coca Cola, McDonalds, IBM, Apple, and others were extremely valuable and most of them really were marketing companies (Apple for example gets most of its parts overseas and simply assembles them to sell to you). Today, these brands are extremely valuable as end products. However, online, purchasing these products has never been easier or more competitive.

Think about how your web browser fires up. It usually opens to some type of portal page (most are set to Google). In fact, the most searched for term every month is "MySpace" or some variation of. So that really does change the way we do branding. If you are selling the latest no frills mp3 player, how can you compete against iPod? You can't, but you can optimize your website to be on the first page of search results.

In fact SEO (Search Engine Optimization) is a ever growing field where firms charge anywhere from a few hundred dollars to a hundred thousand dollars per month to ensure that your site stays on top. And usually if your site is on top, very few people pay attention to your URL. So even if you have a www.icouldntbuyashorterurlbecausetheywerealltaken.com it won't matter because people are clicking on the link anyway. Which leads back to making sure that your page is optimized for those terms that people search for. There are a bunch of different tools out there that determine "keyword density" and a bunch more that tell you how often a given term is search for.

Overall, if you are running an online business (or conduct more than 50% of your business online), I would think about hiring an SEO firm before you purchase another full page color ad in the New York Times.

Wednesday, June 13, 2007

The Tipping Point

Something that I've been looking at is why and how things "tip." How does a site like YouTube go from 0-60 in 3 months? Why is MySpace the premiere destination for social networking? Has Second Life "tipped" or is it still a geek's toy? Why did FaceBook grab so many users? Let's look at some thoughts into why these things happened...

YouTube - YouTube was launched by Steve Chen, Chad Hurley, and Jawed Karim, exPayPal employees in November of 2005. Shortly thereafter (around December or January) the trio has no one but the copyright infringer who uploaded SNL's Lazy Sunday to thank. Traffic spiked at that point. And even more traffic came to the site when it was reported that NBC asked them to take it down. But by then it was too late, YouTube was the "it" place to be for user generated video and any kind of online content.

MySpace - MySpace was founded by the friendly Tom Anderson in November of 2003. It started as a site to share music and eventually became "a place for friends." MySpace could be attributed as one of the first successful social networks that really brought about the entire Web 2.0 revolution. However, traffic for the site didn't really tip until what I think was the entire Friendster debacle. Friendster arguably the first social network, was experiencing slowness and server difficulty. A message was sent around Friendster saying that they would start charging and that MySpace was free. Many addicted social networkers flocked to MySpace and that was all they needed. With the newness of social networking, MySpace quickly grew and that rolling stone gathered enough momentum that MySpace is a household name.

Second Life - Second Life is the avatar based role playing world. So far its received a lot of attention in the media and by brands. However, as you can see from the chart, it still hasn't tipped. I think that its a combination of things here and one of the big barriers is the user experience. Second Life for the non techy is hard to use. That's agreed upon. Secondly its a separate software download. That's a pain. Compare this with Flash based ClubPenguin who's traffic is slowly creeping up on SecondLife, and was recently offered $500 million from Sony.

Facebook - The darling of Social Networks - Facebook was rumored to be worth in the $2 billion range. How did a dorm room start up at Harvard become one of the most valuable properties on the web? The chart below shows how Facebook really hit straight up growth in the beginning of 2006, which corresponds to their high school out reach. But why did all of these high schoolers want to join Facebook? I think here the tipping point was based on what Malcolm Gladwell calls influencers. And there are many influencers at Harvard the birthplace of Facebook. Would Facebook have survived if it started at another school? Princeton? Perhaps. University of Middle of No Where? Probably not.

I think that its interesting to look at the different ways that these things "make it." YouTube had a unique piece of content, MySpace was positioned at the right place at the right time, and Facebook had influentials behind it. What will it take for Second Life or the plethora of Web 2.0 companies? Sometimes its dumb luck.

Tuesday, June 12, 2007

The Best of 2.0: Video Meets the SocNet

PaidContent brought OurChart.com to our attention this morning. It's a social network based around webisodes that are loosely spun off of Showtime's The L Word. It's worth noting that the Long Tail social networks centered around content seems to be working. PaidContent reports 72,000 users and over half a million hits thus far and there's only one episode up (although the social networking aspect appears to have taken off). The creators report that the show came first and then the SocNet was built around that.

OurChart.com and GirlTrash (the webisode series which is clearly NSFW!) is a perfect example of how the Long Tail works. Our favorite Web 2.0 applications, web video and social networking come together to bring a certain demographic together, in the case of OurChart.com, lesbians. It's certainly a very specific demographic that is valuable to some advertisers (most of the banners I've seen are for content from Showtime's The L Word, to XM Satellite Radio's LGBT "The Agenda" programming, to a True Colors concert series. While the numbers are not staggering like MySpace or Facebook, this is a very targeted demographic where advertisers know that every pair of eyeballs could be a potential customer as opposed to a MySpace where there are many "wasted" impressions.

The combination of professionally created content around a social network seems to be a very powerful combination. I'm very interested in how other content can be as perfectly segmented as GirlTrash and OurChart. There hasn't been much content out there that has a definitive audience as GirlTrash. Perhaps a WallStrip and StockPickr joint venture is next?

Monday, June 11, 2007

Video Roundup

Babelgum launched over the weekend (Friday to be exact I think) with some mixed reviews. Babelgum is in competition directly with Joost for quality P2P delivery of content. Lacking content (although Babelgum has Spike Lee on his side), lack of social networking, and difficult interface are some of the problems that have been cited with for Babelgum. Well, Joost started somewhere too right? I think Joost has the high profile of its founders which led to some great content partnerships and if Babelgum can do the same....

One of the early pioneers in video revenue sharing is Revver. Unlike pure views count, like Metacafe, Revver shares revenue with content creators by sliding a clickable ad at the end of the video. If a viewer clicks on it, then they are brought to the company's website and everyone gets paid. Well, Mashable reports that CEO Steven Starr is exiting the company six months after its previous CEO left. What's happening at Revver? Perhaps people aren't ready yet to click on ads at the end of a video?

Eefoof relaunches as VuMe. Reviews came in as somewhat negative and I think the only differentiator of VuMe from other video sharing sites is that revenue is shared based on actual revenue instead of video views. We'll continue to watch what VuMe is doing in this already crowded space.

Finally, my friends at Four Eyed Monsters have placed their entire feature length film on YouTube. It's the first feature available on YouTube at a whopping 72 minutes. And my friends tell me it'll be available for a week, which could be steps toward YouTube protecting their content? (Or I guess someone could suck down the video and reupload in 7 10 minute clips?) The film is actually also a pioneer in this space with a real relationship being started and grown through podcasts and technology. Pretty cool.

Friday, June 8, 2007

Social Networks on the Go

Sprite Yard, a mobile social network created by Coca Cola, will be launching on June 22 in the US. The social network launched in China last week and Coke hopes to have a global presence relatively quickly. Using simple bottle cap printed codes, Coke will give users the ability to win downloads, webisodes, ring tones, even virtual items in Second Life. However, with only one way to access the social network, will this ever be able to build a critical mass?

Old economy Coca Cola is definitely pushing the envelope in digital marketing and media. After having missed the boat on the Diet Coke and Mentos phenomena, Coke is making sure that they allow for their brand to be fully interactive. They've been one of the first to hop on the Second Life platform and with this social network, one of the first that I've seen to create a social network purely in mobile form. However, we've seen many problems with the mobile platform that may provide a difficult time for Coke to build an audience, at least in the US.
  1. Segmented mobile carriers and lack of standards. CDMA, GSM, What? The US market has four major carriers and two major standards, whereas the rest of the world is mostly on GSM networks (the ones that T-Mobile and Cingular use).
  2. Walled Garden Approach. I think that this primarily applies to Verizon. I can't type in a WAP enabled URL into Verizon without it going through some kind of Verizon proxy server to make sure that I'm not accessing T-Mobile's site through Verizon's network. I can't blame them but definitely a barrier to innovation.
  3. Too many Handsets! The carriers aren't the only ones to blame here. There's so many different types of handsets, resolutions, color schemes, etc that to develop for mobile means that you have to develop for hundreds of different phones and types. QWERTY keyboards, keypads, a combination of both (Blackberry Pearl), etc. Agh!

But all is not lost. Coke will definitely be positioned for first mover advantage when things change with the carriers. I think they realize the value of content over their networks but the behemoths of companies are moving so slow that who knows when this might be. Some of the things that Coke has going for it:
  1. Brand. I don't want to pull apart Coke's balance sheet but I'm sure Goodwill is a pretty hefty figure here. People will recognize Coke and realize that its okay to interact over your phone. But then again look at Bud.tv.
  2. First mover advantage and campaign integration. The same message over multiple platforms. Coke's size and clout allow it to do this. Integrating their Second Life with their social network with their web with their print with their TV etc. creates for consistent messaging and a better user experience.
  3. Mobile's Hot. Kids and teens (the target market) are probably regulated by what they can do at home. Parents have all kinds of mechanisms to restrict Web sites and watch what their kids are doing. But on mobile, you can go anywhere and do anything. Kids like that. Parents don't. But mobile has other advantages like constant communication and that wins out. I think that until someone creates a monitoring device for mobile (which will probably be soon) kids will love that medium more than the computer.

I think its great that Coke's taking the plunge. The pros and cons are fairly even. I'll track what happens in the space and to Sprite Yard and watch for the launch on June 22!

Thursday, June 7, 2007

Some Interesting Numbers

Frames of Reference, a study from Online Publishers Association, (via paidContent) released a study regarding online video advertising. Some of the highlights from the study:
  • 30 second outperformed 15 second
  • 52 percent of users take an action (learning more to purchasing)
  • News was number one, followed by weather, and then humor
  • Companion ads (static banners with video) were most effective

The results of this study are pretty interesting especially for those of you living in New York exposed to the branding campaign that NBC Uni is promoting (via bus shelters and phone booths) about how they are innovating beyond 30 seconds. I'm also very surprised about the high number of users that take action following a video ad. Personally if an ad is irrelevant to me (for example on ABC.com) I can't wait to "click to continue" as soon as my requisite 30 seconds are up. So this means that somehow, ad servers are serving up relevant ads. I'm not sure how since YouTube is barely rolling out there new ad serving product, but I'm curious if anyone out there knows what they are doing. Companion ads are kind of an obvious thing which is what ABC.com does. No brainer there. Content wise I'd also agree that news and weather are the most watched. And again this is fairly obvious. We live in a world of Long Tail entertainment and the only common thread that everyone on the planet shares is the passage of time. So keeping up with what's new and keeping up with how you should dress (if its cold or warm, not fashion) is pretty obvious.

Marketing wise what does this mean? Well our intuition is wrong but the study is a bit fuzzy as it mentions that results were taken from 1,422 online video users. Are they YouTube watchers or ABC.com watchers? A mixture of both? Joost users? After all ABC.com only has 30 second companion ads. Also the numbers are fairly small. And of course if you have to sit through 30 seconds you will have better recollection than if you sat through 15 seconds. So this result could be skewed.

The big (and best) part of the study is the high call to action provided by those surveyed. This shows that users are not only in there for a passive experience but have their fingers on the mouse button ready to click away. It's a great sign that we're ready for interative TV.

Wednesday, June 6, 2007

Will this Change Everything?

The much anticipated iPhone is launching in less than a month (June 29th). The implications are amazing. Many are finally predicting a convergence between Internet and mobile, Media and Commerce, and location and information. User generated commercials have popped up online.

However, is the iPhone as big of a deal as we think? Of course Apple is going to hype up their latest product which they hope will be as big as the iPod. Apple, though, is limited by Cingular and with a price tag of $499-$599 by wallet sizes. (Unlocked phones I hear are going for over $1100). I think the biggest breakthrough though with the iPhone is the touch screen interactivity of it. With this, there will be no more need for clunky QWERTY keyboards and t9 guessing algorithms.

Smaller devices will come out that can take advantage of this, being not only a phone, but a web browser, a camera, MP3 player, and camcorder ... all at the same time! But how will it affect marketing? I think the implications are obvious. Text messaging while powerful and popular will become even more when rich media can be delivered on the spot in relevant locations. Users won't be limited and programs won't have difficulty reading varied responses when web like applications appear on your phone. Overall, the iPhone is a step toward a world where we really will have the world at our fingertips, anywhere, anytime, anyplace.

Tuesday, June 5, 2007

Big Opportunities for Small Business

I think that most small businesses have felt closed out of the Internet loop. Many don't feel the need to advertise or promote to a global audience when the majority of their business comes from a radius within a few miles of their physical location (or in Manhattan a few blocks!). However, with the relaunch of Google Maps, meaningful online advertising for the small business may be possible. With their Mapplets Preview (via Mashable), the big business known as local search may become a reality.

Craigslist is one of the largest properties on the web. With no graphics, no fancy Ajax, and a staff of a dozen, Craigslist is a true success story which is focused strictly on content. What makes Craigslist so successful that fancy sites don't have? Sure, Craigslist is free and that's a big factor but the other one is the locality of Craigslist. Just like other local tools, like Citysearch, Meetup, and Yelp, Craigslist turns an online conversation into an offline transaction/encounter/meetup etc. Why is this important? I don't know if I need to answer this question, but we are social creatures and while we've been talking about great tools like MySpace, SecondLife, and YouTube, we still need to meet each other physically and not just through our computers! So enter the Local Market, which to date has felt shunned by the Internet. Very few tools out there cater to the local market and most have to do with restaurants, tourist attractions, and / or movie showtimes.

Enter Google Maps and their contextual AdSense. With Google's new street views program, this will really allow ALL businesses to have a virtual storefront. Could this be an integration of a virtual world like Second Life with the other intricacies of the Web? Could you be walking down a virtual Fifth Avenue and enter into all of the big department stores and then make a turn down 45th street and also enter the mom & pop deli? I think that Google Maps might be the key to Google's growth especially with local search, since most local businesses do not have domain names or websites (most of them still use a hotmail address if they even have one!). It could be truly interesting times, except that it might keep you in front of your computer more instead of being out there with real people like we were programmed to do!

Monday, June 4, 2007

YouTube Going Legit

YouTube previously announced a revenue share for some of its non-corporate users a few weeks ago. It recently announced a revenue share with Hearst Argyle TV - owner of local TV networks where YouTube will pay a licensing fee for some of its news, weather, and entertainment clips. YouTube also has a deal with Verizon Wireless and Apple TV. YouTube also struck a deal with EMI allowing users access to use EMI music in their clips, although EMI still owns the license and can request takedown. YouTube is also breaking ground in the pre-roll ad space sponsoring video blog Rocketboom (Rocketboom is charging $3000 for pre rolls and this number jumps to $5000 on 9/1). YouTube is slowly making the cross over into tradition media and legit media with these deals that they are striking. They're still obviously in a dispute with Viacom over $1 billion dollars.

YouTube is clearly making a splash amongst everyone out there. AdAge featured an article today about how YouTube is being used to not only advertise prescription drugs, but how consumers are reacting to it. I think the pharmaceutical business is taking a step in the right direction. YouTube is here to stay. And with YouTube slowly going legit you'll be able to see brand bashers on your television (a strange juxtaposition between UGC and professionally created content). But what can be done to protect your brand on YouTube? Honestly, not much. The first amendment protects free speech. If someone wants to "review" your product on YouTube you can't really do anything about it. However, what you can do is dispel some of those myths via a video comment, which is very different from a text comment. Video comments are almost like a rebuttal to the very video being watched at that moment. Users are more likely to watch a video comment (although it usually requires approval from the original video owner). For example, if someone posted a negative video about my BlendTec blender saying that it wouldn't blend your daily celery juice, and that video reached a critical mass of audience, I would post it up as a response the Will It Blend series. (A highly successful series featuring the BlendTec blender.)

If your video can entertain (first and foremost) and then educate (a distant second) then the video can possibly be successful to build a following on YouTube. The GlaxoSmithKline ad (via AdAge) is an extremely clever and interesting domino video that has little to do with the drug and disease, but I think that I now have a better subconscious association with Restless Leg Syndrome and GSK than I ever had!

Friday, June 1, 2007

MySpace Safe Again..?

TheGlobe.com has settled with MySpace, the largest social networking site, for $5.5 million dollars after spamming MySpacers through fake accounts about their GloPhone product (which is now defunct). Other lawsuits filed by MySpace (thanks to Mashable) include TheDilly, a social network that picked up many users via MySpace messaging and Anthony Lineberry who ran MyFriendBot, an automated friend requester.

While TheDilly settled for $6000 and Lineberry, I believe, walked away unscathed, its a step in the right direction for MySpace to combat spam. The $5.5 million settlement with TheGlobe.com should deter spammers from trying to get back onto the MySpace system. However, the inherent problem seems to be the simplicity with which it is to create an account. Anyone can create an account without any verification. Should sites like MySpace and YouTube force users to enter credit card information (without any charges of course)?

MySpace has done a great job of spam and abuse reporting but could these efforts curtail any type of real marketing being done on the site? The great thing about MySpace is that its free. But if you are a small company or a non-Fox owned property you are going to have to pay for placement either on the front page of MySpace or some of the other costly real estate the site provides.

CPMs on MySpace are significantly less than CPMs on Yahoo!, and its probably the supply and demand curve working its magic. Advertisers are still afraid of being put next to content that they have no control over and therefore associated with. Most of the ads that I see are pretty raunchy dating sites, Shave the Armpit and win an iPod sites, Hit the Monkey and win a shopping spree sites, Can you Tell this Celebrity sites...in other words content that is already so outrageous that it could hold its own against little Johnny's MySpace page.

So then how does a brand propogate on MySpace? I think its through good old fashioned word of mouth while utilizing smartly some of MySpace's tools. The most powerful tool of them all...the top 8. Yes, you may laugh, but being in the MySpace top 8 ensures that you're brand or product is being seen by others when they visit someone's page. Of course you can achieve the same effect by commenting, but Top 8's change less frequently than comments. For those of you not familiar with the Top 8 its a MySpacer's "top 8" friends. These friends appear on the person's page without any need to dig deeper into the profile. Users are always curious about other folks and will mostly likely click on some of your top 8 friends. How do you achieve a top 8 status? Some profiles like the Black Carpet Screenings for Borat made you print out your MySpace profile showing Black Carpet in your Top 8. Others want you to email them when they are in your top 8. Screen grabs, the list goes on and on. So there it is, spammers why bother? We already know all of your tricks and we quickly delete your messages and comments. Have a good profile, a good product and a reason for us to put you in our Top 8 and you'll spread like wildfire. Maybe Lineberry's next project will be to work on an automatic Top 8'er.