Archive for October, 2007

Putting together the pieces of Google’s cryptic releases of information is very much representative of the flow of small packets of information through the web itself, rendering in a clear ‘bigger picture’ once reaching the final culmination point.

Mediapost today reported about Google’s plans to release a cross-media dashboard  – I mean – the holy grail of the data driven marketing future.

For the last several years, sophisticated digital marketers have had the luxury of seeing into the future. What do I mean by that? We’ve been struggling with disparate data sets sitting in different silos, where the whole indeed would be more valuable than the sum of its parts. Third parties such as Theorem of Blackfoot have been in the business of developing data mining tools and customized dashboards for cross-digital-channel management, but the prospect of a true cross-media dashboard still eludes most agencies and advertisers.

Couple this with Google’s move into the display ad world via Doubleclick (not to mention the plethora of other acquisitions), slow expansion into offline media channels, slowly and quietly digitizing the world around us (think Google street view or the NASA collaboration), a play for the last frontier on the wireless spectrum, and tentacles in many aspects of the web ecosystem including e-commerce merchant services, and you have a recipe for a new media behemoth like we’ve never witnessed before.

Google did fail in one critical area however, which is Social Networking. Orkut never gained the traction that popular brands like MySpace and Facebook achieved. My theory is that if they weren’t in court defending their acquisition of Doubleclick, that Google would have done what they had to in order to muscle Miscrosoft out of the Facebook equity investment. But Google and Microsoft are playing slightly different, albeit competing hands at the moment.

The purpose of this blog is to focus on the blurring of media, marketing and technology as it relates to marketers – Google is the perfect storm and watching the evolutionary path has been and continues to be fun (yes I know, I’m a total media nerd). Microsoft is trying to play catch up, but as time goes by it only seems like Google’s lead increases.  The innovation associated with this competition is benefiting both consumers and marketers alike. Can’t beat that…


 Microsoft is definitely succeeding in positioning itslef in a manner equally as blurred as the lines between media and technology themselves. No different than arch-rival Google.  This move however, pegs the valuation of Facebook at over $15billion, a number that may represent the strategic value of the investment that was won in a bid against both Yahoo and Google rather than the actual value of the company. Only the next 18 – 24 months will tell.

But hey – I always love hearing about the young technology billionaire story, even it it’s not me. Mark Cuban, and the founders of YouTube come to mind. It’s wins like these that make it worthwhile for the VC’s to have portfolios full of otherwise mainly flops. You can get a great perspective from this NYTimes clip “Mark Zuckerberg, the 23-year-old Facebook founder who followed the path of Bill Gates by dropping out of Harvard to build a company, owns a 20 percent share that may now be worth as much as $3 billion. Accel Partners, the venture capital firm that invested $12.7 million in May 2005, now holds stock that could be worth $1.65 billion.”.

I remember when pundits were skeptical over the price paid by News Corp in the acquisition of MySpace, which in retrospect, with more than double the audience (albeit a slightly different beast) was an apparent bargain.

The bets are on a data driven advertising ecosystem, and if I were a VC that’s where I’d be allocating my attention and energy. With projected growth of $20+billion in the next few years, it’s the hybrid media/technology companies are are best positioned to provide consumers with the best content and experiences and advertisers with the most relevant and appropriate platforms to enagage targeted sub-segments of these consumers.  

Facebook announced plans this week to utilize the vast wealth of psychographic data within consumer profiles as ad targeting criteria. This announcement comes roughly a month after a similar announcement by MySpace to leverage their vaults of data as well. This should be a welcome move for advertisers large and small. Advertisers will be able to target by geo, age, gender, specific psychographics and even the company they work for. Similar to the large search engines, the possibility exists for the larger social networks to provide national or global advertisers with a scalable and relevant platform for matching consumer interest to marketers’ products and services, while also offering even the smallest local advertiser (still an untapped potential) the ability to reach the 16 people in Topeka Kansas who are into model airplane collecting, for example. 

Facebook in particular is valued at over $15billion and the revenue model is now playing catch up to the valuation – dare I say it – circa 1999.

The MySpace custom page marketing program costs are in the hundreds of thousands of dollars range at this point, but beyond the excitement of Facebook’s widget-friendliness and acceleration of the ensuing industry-wide widget mania, they have  not been able to build a masterful media practice just yet…

But I feel one coming. It’s like the calm before the social storm. 

Granted there’s a lot of buzz out there regarding marketing and advertising within the social media environment. Every client has asked their agency about it, every publisher has considered developing or acquiring one. Those of us who have been marketing in the social media ecosystem (wider than just social networks) have learned that effective social media marketing is experiential marketing – becoming part of the experience, not just a message sitting adjacent to it. The adjacent advertising model is ubiquitous across media channels, and thus far has never been well translatable into the world of online communities, social networks included. Hence, the low cost of plain old banner advertising on modern social networks is no different than what used to occur with Geocities, Tripod, or any of the other early online communities.

But consumers have spoken – we live in a MySpace/YouTube generation – expect the kinks to be worked out this coming year, as the projected doubling of ad spending over the next 4 years commences actualization.

So back to Facebook – to test some of the new tools, I just created my first psychographic targeted “Facebook Flyer” ad at $.05 CPC, targeting scuba divers (to promote an underwater photography site that I run together with my wife.) The neat little estimator tells me that there are 69,000+ interested in scuba diving in the US, 18,000 in the UK etc. Unfortunately the system is not entirely flexible yet. I’m running a test that is geo-targeted to the US for 10 days beginning the date of our re-launch on Oct 30. Stay tuned for the results…

In a move that seems somewhat of a not-so-well-thought-out knee jerk reaction to market conditions, Viacom announced that it will be posting 13,000 ad supported clips from the “Daily Show with Jon Stewart”, previously the most popular Viacom video content on YouTube (along with the “Colbert Report”). Jon Stewart & Steven Colbert have embraced the online video world and Google and is attempting to depose the two hosts in the $1 billion case brought against them by Viacom.

The reality is, that by the time the case is tried in court, the online video ecosystem would have changed. Last week major industry stakeholders in the online video world agreed on a set of standards that would ensure copyright owners protection and potential monetization of their content. Unfortunately absent in this consensus was Google/YouTube, who issued their own set of guidelines and approach earlier in the week. Viacom’s reaction to Google’s guidelines was that it was too little too late, and that they will continue to pursue the case for past copyright infractions.

So, why is this all so important you ask?

The online ad spending forecasts show the industry doubling over the next handful of years (from approx $22B in 2007 to approx $41B in 2010), much of that will be coming from online video and the large brand advertisers shifting more budgets from TV to the web. Infrastructure and stability are required to actualize these projections (hence the massive consolidation this year), and any lengthy dragged out process between the current largest holder of online video ad inventory and one of the largest copyright owners, can prevent the industry from quickly and efficiently developing standards and moving on. 

Server FarmI for one, would love to be a fly on the wall at the potentially precedent setting YouTube/Viacom court hearings. The $1billion dollar case can change or empower an entire industry, or in fact several industries, ranging from traditional to new media and entertainment companies large and small.

To put it in perspective, one must remember that YouTube currently has the largest inventory of online video advertising on the web, an interesting scenario for Google, who also has the largest share of text based search advertising inventory. If the ’80’s were the MTV generation and the ’90’s were the AOL generation,  we now live in a YouTube Generation. Add Google to that list -buying YouTube for $1.6billion+ was a calculated move that I’m sure will pay off.

Automation:What a fantastic concept. Very few actions or activities are truly automated (hence why auto pilot still requires human guidance), but to add levels of automation creates a level of efficiency that can benefit marketers, and consumers. Google wants to simply add a level of automation to the ad delivery and monetization process of this war chest of video ad inventory. When looked at in the context of the bigger picture of Google’s Doubleclick acquisition, we may soon have the ability to tie all of this wonderful data together to bring us closer to the actualization of truly dynamic and relevant targeted ad delivery across search and display channels…but I digress.

Of particular note in the announcement is the paragraph about “Choice”:

“Copyright holders can choose what they want done with their videos: whether to block, promote, or even—if a copyright holder chooses to partner with us—create revenue from them, with minimal friction. YouTube Video ID will help carry out that choice. No technology can anticipate the preferences of a copyright holder…”, “…The best we can do is cooperate with copyright holders to identify videos that include their content and offer them choices about sharing that content. As copyright holders make their preferences clear to us up front, we’ll do our best to automate that choice while balancing the rights of users, other copyright holders, and our community as a whole.”

So yes, the copyright holders will have to do a little work. It comes with the digital territory, but with great reward. Content providers must have their content well cataloged and easy to reference, common characteristics of any modern archiving process anyway.

In the grand scheme of things, it’s great to see that the co-defendants of Progress and Innovation have deep Google-sized pockets, and strong legal representation.  YouTube has thrived by co-existing with a wide variety of content providers,  some of who in return claim YouTube is simply parasitic. But the consumer adoption of YouTube speaks to its success of filling a consumer need in a way that no single media vehicle in recent history can claim, and the case is really about striking a balance that creates a peaceful and equitable ecosystem that benefits all involved. If this is not the outcome of the case, then we as society have failed Progress & Innovation.

In a move that continues to reinforce the power of web2.0, social media, citizen journalism, consumer involvement, or Newsvine MSNBCwhatever other descriptor you’d like to add to the list, MSNBC (itself a successful joint venture between Microsoft and NBC) acquired social media darling Newsvine. As media and technology continue to merge, this seems like a smart acquisition for both sides.

According to Newsvine: “… it’s all about growing the community and spreading the idea of participatory news as far and wide as possible.” “While Newsvine may be well known in early adopter circles, we want every college student, every farmer, every weekend journalist, and every household to have their own branch on the ‘Vine”

With over 29 million unique users, the potential participation of the MSNBC audience is huge, and can be both a pro and a con. Other social media sites have lost a level of authenticity once acquired, but the effects are insignificant and the end results are usually strong brands with staying power (think MySpace or YouTube – I know, both a little younger to speak of in the same sentence as staying power).

The biggest question I’m asking myself is how a brand-neutral social bookmark site can maintain support from content provides that feel competitive with MSNBC, or if that’s an insignificant issue, or if it doesn’t matter anymore…

G-Phone“Disruptive”. The beloved term that labels some of the great technology, processes or businesses that displace or largely disrupt an existing market or industry. Google has earned this title on many levels, for many products and consumer behaviors that they have spawned.  So when CEO Eric Schmidt states that the cellphone market is the largest growth opportunity for Google, it presents the mobile marketing world with an indication that some of the [much needed] innovation is on the way. Not just from the likes of Google, but from the carriers and device manufacturers as well.

I’ll never forget the day that I received the demo of how Sprint planned to open their deck to advertising in 2006. The initial response to my inquiry about mobile search and Google was that they were developing their own and may end up blocking access to Google for bandwidth reasons. I know that carriers are the last of a protective-pipe-breed, but what an  odd approach.  Obviously the potential of muscling out the search providers already failed, as just one year later each carrier has partnerships with major search providers.

The prospect of billions of mobile ad impressions was exciting … for the carriers. Although I am a proponent and active practitioner of mobile marketing, I still feel that both the existing on-deck and WAP experiences are poor, and the main barrier to widespread consumer adoption of the mobile web.

Think about it – the mobile web today is the equivalent of the wired-web back when it had low adoption and penetration, but everyone had a computer. We still tried to pump rich media through small pipes back in the late ’90s. The device was in place, but adoption and penetration only improved with the quality of the experience – mainly the speed of the connection and the evolution of the types of content and utility offered. Marketing opportunities followed the curve closely.

The same way consumer behavior varies from a medium like TV versus the web for example, so does it vary from the web to the mobile web. Hence the reason why SMS is effective and embraced, as it is appropriate for the on-the-go mode of a mobile device.

Enter the iPhone…Enter the perception of what the iPhone stands for – a mobile web experience wrapped in a slick device that becomes the embodiment of your digital lifestyle. Plagued by their weakest link, the speed of the network, and Apple’s decision to keep the device free of most 3rd party applications, the iPhone increased perception of the mobile web, but didn’t do all that much in improving the experience (ok YouTube is  easier to access than it was before) – albeit a valiant attempt.

However, the G-Phone isn’t competing with the iPhone, but rather with Microsoft. The effort is a smart attempt at a land grab for the mobile operating system, currently dominated by Microsoft, but very much fertile ground for innovation and competition. The open source Linux based operating system will become a conduit to generate ad revenues and continue to strengthen the Google brand.

If Eric Schmidt’s statements about the cellphone market presenting the largest growth opportunity for Google are true, we’ll have an interesting round of progress which will vastly improve the experience for consumers and over the next 12 – 24 months provide marketers with a brave new mobile marketing world to play in.