Friday, April 25, 2008

Business in Second Life

At Silicon.com there was a post related to what we saw in class yesterday - business in Second Life. They say that
Business[es are] still experimenting in Second Life but confusion over measuring virtual world success.
I am also curious how they will measure the success or failure of advertising/marketing on Second Life. They have virtual compnay islands, so they might count visits to their islands, but it would be difficult to see if it leads to actual purchase. Since many businesses have been in Second Life for a while, they must believe there is a positive effect. Or as the article says:
Businesses are unsure about the benefits of using Second Life with many still just experimenting with the virtual world to discover its true value.
The companies may still be experimenting with the presence on a virtual world. If it works, Second Life may expect to earn a lot from advertising from eager advertisers to join the virtual advertising.

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Click Fraud still a problem!


Tech Crunch Blog brings new stats about the amount of click fraud going on the net these days. Click fraud is when black hat practitioners set up a fake site with Google or Yahoo's content networks and then hire people or have a robot sit and click on the advertisements on their site. This way the publisher makes a lot of money off click through that do not bring any profit to the advertisers. Google or Yahoo will still make a their profit any way. Some advertisers say they loose over 30% of their advertisements on click fraud. Click Forensics is reporting a decrease of around a half a percent and Tech Crunch claims that might show that Google and Yahoo are finally doing more to stop this kind of fraud. For the time being it is too early to tell where this is going.


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Playing David

A little inspiration might be just the thing during these disheartening times. The economic downturn has marketers breaking out innovations to get through the recession. Some smaller players, in particular, provide inspiration on how to do more with less.

Advertising Age focuses on the little guy, the Davids of the marketing world who outsling the giants, those with hefty R&D budgets, TV campaigns and free shipping. Adage offers up a list of how to make marketing money work harder.
1. Denial is a good thing – Instead of cutting your media spend by 10%, what if you slashed it by 100% instead and forced yourself to look for alternative forms of media
2. Pick a Fight – Challengers get people to pay attention to them by strategically picking fights
3. It Pays to Hate – It can be useful to pick an enemy, if only for the attention it will get you
4. Take it Personally – Successful challengers are nearly always invested with a very personal sense of mission
AdAge suggests the economic uncertainty should inspire all marketers to adopt a 'challenger' mentality. That message extends beyond the marketing industry. “Only the paranoid survive.”

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Shooting the Advertiser

Mark Cuban never veers too far from controversy. The chairman of HDNet and Dallas Mavericks owner calls ‘em as he sees ‘em on his widely-read Blog Maverick. Now, he’s taking aim at advertisers who, he suggests, “shoot themselves in their collective feet.”

Cuban notes the advertiser’s central challenge: getting people to watch their commercials. He asks why advertisers don’t take advantage of available technology to avoid having television viewers turn away from the commercial break.

“Why in the world do advertisers JACK UP THE VOLUME OF THEIR COMMERCIALS?” he asks. “WHY ARE ADVERTISERS SO STUPID?”

Apparently, Cuban finds this as aggravating as the rest of us.

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Thursday, April 24, 2008

Gentlemen start your engines...

Is the race on to find the standard-bearer for Web 3.0? With many expecting localization to play a big role in the next life-cycle of the internet, today was a big step towards bringing social networking through mobile apps to the masses. Buzzd, one such social network, announced venture funding by Greycroft Partners (also shareholders of paidcontent.org) and Monitor Ventures for an undisclosed sum (http://www.paidcontent.org/entry/419-buzzd-raises-first-round-for-location-based-mobile-networking/). The article also mentions one of their competitors, Loopt, who's got a great elevator pitch on their web-site: "loopt turns your mobile phone into a social compass".

I checked out the Buzzd tutorial on their web-site, and it's basically twitter with a dose of facebook but branded for big city night-life. I'm pretty sure you can manage your account online, posting personal details and linking up with friends, etc. The idea is that you can send Buzzd an SMS right before you go out, and the service will return with a text that displays recommended venues/parties for the night. At some point a WAP site even opens up, so it's rich media. When you get there, you can send one text to Buzzd, letting your community know that you're there, and everyone in your network will be notified.

I "get" the model, but it just sounds like a heckuva lot of work. Usually you're not going to meet people you barely know, right? Some, if not most, people have group lists on their phones that they can SMS in one shot. You agree to a bar beforehand, and then send out the obligatory mass text asking, "Where R U?". One point of differentiation between these mobile social networks seems to be the partnerships they strikeup. Buzzd seems to have Cityseach and TimeOutNY locked up, while Loopt has Facebook. Interesting to see what the tipping point will be with this technology. I'm much more interested if someone in my network has found a cool, unknown bar with no annoying people around. I'd almost pay for that...

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"Olay for You" is a Success in Providing Personalized Online Product Recommendations

Proctor & Gamble started a digital initiative back in January called Olay for You, which has proven to be extremely successful. Olay for You is an online product recommendation system. It was developed because of the proliferation of Olay products, and confusion among consumers new to the brand in regard to what each product does and what products they need.

Olay for You uses a very graphic, iterative interview process and a soothing female voice in order to "interview" users and get them to answer numerous questions in order to be able to recommend products to them.

Consumers are increasingly finding the offline shopping experience to be annoying, especially when they aren't sure what product to by or can't find the product they're looking for. As a result, retailers want to tap inot the convenience and functionality of online tools. Wal-Mart is an example of this. Wal-Mart has now begun testing an in-store version of Olay for You via in-store kiosks.

It's very interesting how the shopping experience in big box stores has come full circle. Online shopping used to be thought of as lacking the "warmth" of in-store shopping. However, with the proliferation of large stores and the lack of sales personnel to help the shopper, the online experience is now becoming more pleasant. Online, a shopper can find the information she needs, and with the advent of initiatives such as Olay for You, can even obtain personalized product recommendations. Now stores are trying to mimic the advantages of online shopping. Who would have thought that would ever happen?

Article: http://adage.com/digital/article?article_id=126543

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BBC Looking into Buying Out Virgin Media

Large media conglomerates continue to change dancing partners. This time it's happening across the pond. On Monday of this week (April 21), the Wall Street Journal reported that the BBC is looking for a private equity firm to help it buy out its partner Virgin Media. It is not clear if the rest of Virgin Media's TV portfolio will be part of this deal, which is referred to as the UKTV venture. UKTV has many older British shows that are very popular, such as Fawlty Towers, and also controls several channels such as UKTV Style, UKTV Food, and UKTV History. If the deal goes through, BBC Worldwide would own a majority stake in UKTV, and plans to launch numerous channels around the world in an effort to increase its profits to about $400 million. The deal would also help Virgin Media reduce some of its large debt. About 10 PE firms have submited bids to paricipate with the BBC in the buyout, including U.S. based Providence Equity Partners.

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Company Using Virtual World to Train Employees

One company is using a Second Life-type of virutal world to train their employees. Silicon Image, a chip manufacturer, has a virtual world that represents its corporate campus and allows employees to interact with each other using 3-dimensional characters. Videos and slideshows are available within this virtual world, which supplement live classroom training. Employees can move through this virtual world, enter different departments, and play videos to learn more about what is done in that department.

This may seem a little strange to us, but Silicon Image says this keeps employees interested in learning. The technology isn't cheap - virtual world training usually costs $60,000-$300,000 to set up. However, since Silicon Image is an early adopter, they received a speical discount.

It's hard to imagine being trained in a virtual environment. I think I prefer the real-life version. But it will be interesting to see if and how fast this catches on. I think that as Second Life becomes more popular and mainstream, we will see the ramifications of this in other areas, including more companies engaging in corporate virtual training.

Artricle:
http://online.wsj.com/article/SB120717370600584599.html?mod=todays_us_marketplace

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Combining Digital Media Sharing with Online Chat

Photophlow and Videophlow, two new services being offered soon by Oortle, combine the social aspect of the internet with user generated content. Photophlow allows a group of users to all view and scroll through a flickr album together, so that they are seeing the same image at the same time and able to discuss it in real time. Videophlow is the exact same concept, but centered around videos on YouTube. I think a program like this has the potential increase the sense of community that already exists around user generated content. While it's sure to be used for plenty of mindless commentary (as YouTube commenters have shown), it also has the potential to promote ongoing critical discussions about content.
These are the latest in a long string of applications being developed that take advantage of preexisting websites and builds on their infrastructure. A natural next step seems to be to turn this into a Facebook application so that it becomes easy to find and invite your friends to watch videos with you.

Source: TechCrunch

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Aaaaaaction!


In what I consider a brilliant move ahead of other cellphone manufacturers, Finnish based Nokia is using the populist appeal of user generated content, the shift of social networking from the Web to cellphones and the pedigree of a famous film director, Spike Lee, to position its mobile devices as entertainment friendly.
The company has said that last year it surveyed 9000 consumers and concluded that 1 out of 4 consumers will create, edit or share entertainment with friends, instead of getting it from traditional outlets like television.

For this project with a theme on humanity, contributors will upload their materials (video, music, photos, text) created with their mobile devices to a Nokia website-- www.nokiaproductions.com. Mr. Lee and a group of assistant directors will revise the entries, choose and put the film together. There will also be a blog where he gives young filmmakers advice.
The film will be viewable online, but Nokia still has to negotiate what cellphone service carriers will distribute the film on its mobile devices.

Seriously, I just can't think how Mr. Lee will be able to manage with all the entries, producing the film and the blog(perhaps lots of assistant directors). Anyhow, I am interested in seeing the final outcome.

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Orbitz experiments with traveler networking

I was traveling recently and noticed some Orbitz advertisements highlighting a new feature that seems aimed to compete with the Travel 2.o stylings of websites like tripadvisor.com. Orbitz currently has its feature out in beta, it's called Traveler Update, and it attempts to use user-generated travel feedback to deliver real time updates through the Orbitz network of travelers. Essentially, it seems that travelers will send updates about airport conditions and Orbitz will forward this information to other travelers who might find it relevant (i.e. others who are traveling to/from that same airport at around the same time). The feature is billed on the website as:

Stay a step ahead with real-time updates from travelers just like you.

Ensure your trip goes smoothly with real-time updates from fellow travelers about security wait times, traffic & parking, taxi lines and more. Additionally, our exclusive OrbitzTLC air-traffic info, FAA updates, and weather conditions will keep your travels on track!

Additionally, to incentivize honest reporting, Orbitz will offer rewards to those who consistently provide helpful information.

Orbitz will rate users based on how often they comment and how useful their comments are, offering discounts and free flights to those with the highest ratings — no indication yet exactly how such bounties will be measured or doled out.
(see: gridskipper)

Given the relative trust that users seem to grant to user-generated feedback, this seems like an innovative step for Orbitz. The site already sends out text/phone updates, and it is encouraging that it is using its database to connect users who may have relevant information to provide to one another.

This seems particularly interesting too because users don't have to seek out the user-generated feedback... instead Orbitz feeds them relevant reports based on information it already has stored in its database. In essence Orbitz is creating a ready-made travelers network, without requiring the traveler to explicitly join or explore the network themselves. By harnessing the power of social networking to connect travelers and integrating information from its own databse, it seems Orbitz has hit on an interesting way to innovate and compete in the travel space.

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Let's Go to The Blog

In its latest attempt to battle Anheuser-Busch, an employee from Miller Brewing Co. is now running a blog (Brew Blog) which breaks news about beer, especially Anheuser-Busch. Recently, James Arndorfer, posted information on Busch's latest brew, "Budweiser American Ale" ahead of the company's marketing and PR campaigns. This clearly angered Busch, which surely felt as though it was "scooped".

This site is evidence that "corporate espionage" and "sabotage" could take on a whole new meaning in the age of the internet, particularly for consumer product companies. Although the estimated damage is difficult to measure, it is easy to believe that these types of actions between rivals could cost millions. For example, company A spends millions designing and setting up and ad campaign and it's rival breaks the news ahead of the campaign. And on top of that, the rival could do it for free on a blog.

In addition to spilling news about its rival, MIller as basically created a platform to spin industry news in its favor. The biggest question will be credibility. Will consumers trust this site or view it as "manufactured" marketing?

http://online.wsj.com/article/SB120829767153417401.html?mod=2_1567_topbox

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Real Beauty and Product Placement

Dove maker Unilever has spent several million dollars designing a new online community strictly for women that will offer entertainment, blogs, advice, and of course advertising. The Dove brand has been a trendsetter in the industry for the past several years with its "Real Beauty" Campaign where the sompany stopped using waifish models and began showcasing more natural and average women in its ads. Will their creative payoff in this space?

The new site is supposed to strengthen the tie between this "Real Beauty" cause and the company's products. The portal also an has original miniseries called, "Fresh Takes", starring singing sensation Alicia Keyes which is simultaneously airing on MTV's hit show "The Hills". But the major question is, will women take their cues and advice from a soap company? Especially one that is trying to actively sell them something?

Although the site has advice from real doctors about skin care and other issues, the intense use of product placement could potentially be a turn off to consumers. It's one thing if there is a passive recommendation of a product from a non-affiliated party, but since the entire site is run by Unilever, credibility will continue to a major problem for consumers who don't already use Dove products.

http://dove.msn.com

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Nintendo Launching "Wii Fit" Exercise Games Targeted at Women

Young male gamers may soon be shocked to find themselves competing with their moms for use of their Wii gaming console. Nintendo is attempting to broaden the gaming market (which is currently dominated by young men) to women with the release of a new product on May 19th called the Wii Fit. This add-on to the gaming system is a $90 attachment that expands the games that can be played on the Wii to things like yoga and push-ups. It also tracks the user's weight and body mass index.

The Wii Fit is already on the market in Japan, and is very popular there. Nintendo is planning a massive marketing campaign for the Wii Fit in the U.S., which includes a huge PR push. It will be featured on TV, as well as outdoor and print ads. Just last week Diane Sawyer tested it on Good Morning America. Interestingly, Nintendo is marketing this product slightly differently in order to suit the different target audience. It is holding most of the ads until the product is on the shelves, rather than engaging in mass media advertising to drum up excitement before the product is launched. Nintendo says that, unlike the core gamers, the targeted women and moms won't be willing to wait a few weeks before they can buy the product - hence the shorter time span between the start of advertising and the product being available.

Will Nintendo alienate its young male core gamers by introducing exercise games targeted at their moms? They don't think so. Perhaps everyone in the family will use it! Nintendo of America's executive VP of sales and marketing says:
The soccer is fun, and the strength training is really hard to do. There is nothing wimpy about the product. It will challenge everyone in the household, and that will keep the product's appeal really strong and broad.
Time will tell. I think it sounds like an interesting idea - the standard at-home exercise tape or dvd with a twist. However, its success might depend upon how willing the female target audience is to using this new medium as a way for them to do their at-home exercises. On the other hand, even if they are willing to try it, sales of the Wii Fit could be seriously compromised if consumers need to first buy a Wii, but have trouble getting one. If that happens, these busy women might just go back to their exercise tapes and not give the Wii Fit a second chance.

Full article: http://online.wsj.com/article/SB120889895144235997.html?mod=todays_us_marketplace

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Twitter Privacy Breach

Twitter, the social networking site which functions as a public broadcast/update/news feed/megaphone for users, accidentally displayed the direct (private) messages of several users in their public message stream. The breach is thought to have been the result of GroupTweet, a third party application which allows users to direct message several people at once. I'm a little confused since I thought the whole point of Twitter was to tell as many people as possible what you're doing at every moment, and that things like e-mail were for private messages....All the same, it's on obviously frustrating (and potentially embarrassing) technical snafu to suffer through. This comes on the heels of several of Tumblr's most highly-trafficked blogs being hacked, as well as any number of complaints and bad press regarding privacy violations resulting from various Facebook partnerships with programs like Beacon. In addition to all of the problems with privacy (or lack thereof) on the internet, I think this raises interesting questions about opening up web programs to third-party applications, which (apparently) may have the potential to damage the basic infrastructure and/or effectivity of the site itself.
Source: TechCrunch

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Amazon's Digital Media Push - Successful or Not?

Amazon is still plugging away at its digital media initiatives, but it remains to be seen if they will ultimately be successful. Amazon says it is "very happy" with the three primary initiatives in its digital media push. However, information on the results of these initiatives is very hard to come by, since Amazon has disclosed very few numbers on them so far. (An analyst from Deutsche Bank estimates that Amazon has invested $3 million in them, but that they have produced less than $100 million in revenue.) As a result, analysts will look for data in Amazon's quarterly earnings (released Wednesday) to provide some information on how the initiatives are doing.

The three digital media initiatives that Amazon is pushing are: a digial music store, a digital book service paired with a reading device called the Kindle, and a download service of TV shows and movies called Unbox. Analysts say that Amazon has either been too late to market (e.g. its digital music store came out after iTunes was firmly establised) or has tried to move into markets in which the consumer demand hasn't been established yet (e.g. digital books).

I think this poses an interesting predicament for companies such as Amazon, who are trying to make a foray into digital media. If you wait too long, then someone else has snatched up the market. On the other hand, if you're too forward thinking and come out with a service before consumers realize they want it, that won't help you be successful either. How do you strike that balance between being a pioneer with a good idea, and marketing that idea so as to make people want it? Apple was certainly successful in doing this with iTunes and the iPod....it'll be interesting to see what the next big thing in digital media will be.

Full article: http://online.wsj.com/article/SB120889788429535939.html?mod=todays_us_marketplace

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Wednesday, April 23, 2008

Facebook Application Teaches You How to Build Your Brand on Facebook

Facebook is offering its users an application called "The Insider's Guide to Viral Marketing", which promises, among other things, to teach you how to expand distribution with Facebook Ads
and get the most out of marketing your brand on "Facebook Pages", which function as free user profiles for your brand, your band, or whatever it is you're selling. They encourage users to explore and employ available applications, such as one that might allow a customer to make reservations directly from their Facebook Page. By teaching Facebook users how to use Facebook's free tools for advertising, they also hope to lead them into some of the paid services, such as text ads on Facebook. All of this is appears to be part of the company's larger effort to entice more small businesses and individuals to employ Facebook as an advertising tool. While I don't expect them to catch up with Google in this area anytime soon, they do continue to dominate the world of social networking, social media marketing, and one day, perhaps, the world writ large.

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Casual Online Gaming for Sports Fans

Play Hard Sports, Inc., an online sports network that exclusively offers sport news and entertainment to sports fans, plans to offer casual sport games for desktop computers as reported by the Boston Globe. The Casual Games Association, an industry trade group, forecasts that people will spend $2.25 billion worldwide on casual games this year. Despite the positive outlook, the casual game industry is a tough business, particularly for those who are targeting a certain niche like sports fanatics. Currently, the successful sites are Pogo.com and MSNGames.com.

But the founder, Jeffrey Anderson, who is also the former CEO of Turbine Inc. that turned Lord of the Rings into an online game sensation, is very enthusiastic about it, especially since Electronic Arts Inc., the leading maker of sports games, announced it would stop selling a version of its immensely popular football game Madden NFL for desktop computers. "That changes the dynamic and the landscape dramatically," said Anderson. "It leaves a very big vacuum."

Anderson will first offer a football simulation game and has plans to eventually add on baseball, basketball, and other sports. The game will allow players to create their own teams and use them against other players via the Internet. Players can also customized characters and add them to their teams. To encourage players to come back, their characters can “level up” so that the more the players play, the better their “franchise players” become. “For instance, a wide receiver will break more tackles or a quarterback will become a more accurate passer.” The idea is that frequent playing will help to develop a community of loyal players.

Play Hard will offer the casual sports games for free and expect to make revenue through advertisements. Alternatively, it will offer an ad-free version to users who pay an undetermined subscription fee.

As other have mentioned on the blog and in class, we have yet see if sites that offer free services to users can truly be profitable through ad supported revenues. To Mina’s blog, online games have different audiences and so require different marketing. Now imagine the eccentricities of gamers, who are sport fanatics. Have you ever watch them play? The intensity of how they are locked to the screen and only to the screen is profound. They can go on for hours, switching off with their partners to take breaks, and coming back for more as if nothing else existed in this world. I think there is great potential for marketers, but it will definitely be a challenge to capture their attention.

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Yahoo-Google Under Investigation


To add to the Microsoft-Yahoo drama, there has been talk of antitrust implications of a possible merger between Google and Yahoo, otherwise known as the "other option". The speculations of this possible merger were launched in full force when Yahoo announced that it would conduct an exploratory two-week trail with Google by outsourcing some of its online ads to Google. The "Wall Street Journal" reported last week that the trial has "yielded positive results", thus signaling to the Department of Justice (DOJ) that there are serious possibilities of a long-term relationship between Google and Yahoo. With Google dominating the online advertising market with approximately 60% share and Yahoo following up with 20%, a merger of the two companies could easily violate US antitrust laws.

The story gets even more interesting. Google CEO Eric Schmidt is under investigation by the US DOJ for anti-trust behavior. Upon Microsoft's unsolicited acquisition bid for Yahoo, Schmidt reportedly contacted Yahoo CEO with questionable motives. The DOJ reports:

… The Justice Department is concerned that the test may violate antitrust law, the source said, adding that authorities “have initiated an investigation” of it … The source, who spoke on condition of anonymity, said that some of the government’s concern focused on a telephone call from Google Chief Executive Eric Schmidt to Yahoo Chief Executive Jerry Yang to offer help in thwarting Microsoft’s $44.6 billion bid.

While Google was able to garner regulators' blessing on their DoubleClick acquisition back in March, it does not seem likely that the antitrust gods are smiling upon them this time. While no decisions have been made as of yet, it'll be interesting to see what happens. Who would of thought that amongst the group of Microsoft, Yahoo, and Google, that Microsoft would be the one left out of the antitrust investigations for once?!

Sources: Reuters, Mashable

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Mobile search gets better by de-automating

Widely recognized as a deeper market than web search, mobile search is the next big challenge for companies small and large -- no one has mastered it yet. Google SMS and Microsoft TellMe are playing in the space, but have limitations, including the requirement that special keywords be texted as queries (Google) and that users have certain phones and can only receive location-based information (TellMe).

A relatively new offering is removing these limitations and more, by adopting an old-school, de-automated solution. ChaCha is a free service that works on all cell phones, allowing users the flexibility to either text a query or call in and ask via voice. For anyone who's ever been stuck without phone web capabilities and had to call a friend or family member to request a Google search, ChaCha's model will be all too familiar:

The service works by routing your questions to one of 10,000 hired "guides" -- students, stay-at-home parents, retirees and others -- who look up the questions on the Web and reply. They get paid 20 cents per answer.

Naturally, these guides vary as to their speed and accuracy. If you don't like the answers they give you, or you want related information, you can call back or reply to the text message with a follow-up question. For instance, after learning which pitcher had won for Boston, I asked who lost the game for New York. I was quickly informed it was Phil Hughes.

While clearly not a high-tech scalable solution, ChaCha does successfully solve problems with existing services -- it allows natural language requests and gives users the choice of format between voice and text. It doesn't know your location without you disclosing it, and the quality of responses is sometimes inconsistent, but it represents a real attempt to respond to consumer needs rather than imposing a service handcuffed by technological limitations. I will be interested to see what this or other companies do to try and capture these same solutions while providing a cheaper, automated service.

ChaCha is free -- to use, dial 800-2chacha (800-224-2242) and state your question. If you'd rather text it, send to "ChaCha," or 242242. I know what I'll try next time I'm stranded with my non-web-enabled phone and a burning trivia question...


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On Seeking Clicks...

It used to be that companies were content to spend marketing money just to raise awareness, but since the beginning of this year it's all retail oriented. With a recession at the doorstep, everyone wants as many clicks for the dollar as possible.
And so ad networks are rising high into the scene. This of course could mean a smaller share for internet portals that carry more traditional display advertising like Yahoo.
More and more advertising is being made through ad networks because they charge much less than ads on display on premium sites like MSN. Improved technology and targeting in ad networks are also helping its success.


However.... “These are the gold rush days now for ad networks,” said David Hallerman, senior analyst with eMarketer. “And that kind of counters the appeal of ad networks for advertisers’ agencies, which was to simplify the purchase of ads. And that’s why its unlikely that a great number of ad networks will survive.”

I wonder how much ad networks can take as advertising prices are rising, how long will it take before this bubble bursts and what the consequences will be...


Full article:
A Web Shift in the Way Advertisers Seek Clicks
http://www.nytimes.com/2008/04/21/business/media/21online.html?ref=media

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Ballmer Says Microsoft Can Live Without Yahoo

In an interesting turn or events or game of cat and mouse, Steve Ballmer, CEO of Microsoft stated today, “We are offering a lot of money… If Yahoo’s shareholders like it, that’s great. We are prepared to go forward without a merger with Yahoo’’ Interestingly, as paidContent points out, Ballmer uses the term "shareholders" when speaking about interests of Yahoo and hinting at a more hostile bid as Microsoft might take its bid directly to the shareholders. It's interesting how many twists and turns this story has taken since the original unsolicited offer in February on through all the talk of big media partnerships and now we're at the point where Ballmer is legitimately expressing frustration and indicating that Microsoft would in fact be willing to move on without more aggressive action towards Yahoo or whether he's simply trying to incite dissent among Yahoo shareholders to try to bypass Jerry Yang and the Yahoo board. My guess would be that this late, after Microsoft's initial out of the blue bid, it's talks with News Corp and all its efforts to value and and persuade Yahoo that it's only trying to shock Yahoo shareholders into thinking that this deal might in fact fall through.

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SOAPnet.com Becomes Ad Network

Walt Disney Co. recently announced that its sparsely popular website, SOAPnet will become an ad network for 45 smaller web sites. The agreement reached will allow it to distribute content on the other sites as well as sell advertising on their behalfs. SOAPnet joins the overcrowded space of over 300 other ad networks already in existence. Because of the intense complexity and overlapping of these networks, media buyers are bound to get confused. Some believe that it will result in major consolidations very shortly.

Ad networks are a boon for sites with very light or slowing traffic, but that need to sell significant chunks of ad space. Forming these networks allows the bigger sites like SOAPnet to sell ads on other sites and meet their revenue targets. Unfortunately with so many ad networks competing against each other to sell the same ads, competition is heating up revenues are slowing. Like the parent sites, the networks themselves are beginning to fail.

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Agencies Know the Score on Web Tracking

We are know that tracking web traffic is not yet an exact science. But for ad executives that rely heavily on the information, exactly how wrong is it and as a result how much stock can they put in it? According to a recent WSJ article, the answers are apparently "very wrong" and "not much". Many ad execs were quoted as not being at all surprised that comScore's research isn't 100% accurate, but that it's the best they have to go on at this point in time. However, because they rely on firms like comScore and Nielsen Online for research to decide where and how to spend their internet ad dollars, you have to question how much of that money is going to the wrong place and being wasted on nonexistent consumers? One of the key problems is that these companies don't count every unique visitor. They use "visitor panels" and then extrapolate the data. So not only is the data itself not exact, but the results from both firms tend to conflict with each other. So what's the solution? At this point, until technology advances there isn't much advertisers can do, but take the data with a grain of salt and use their common sense.

http://online.wsj.com/article/SB120874282224730191.html

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mobile search

According to emarketer:

ABI Research forecasts that worldwide mobile search advertising spending will reach $5 billion by 2013, up from a projected $813 million in 2008.

Mobile phone users have a variety of ways to search including on-deck search applications (provided by a carrier), sms text search (for example to google or others), or through off-deck applications like google or msn.

Given the ever increasing relevancy of mobile and portable devices, ranging from cell phones to blackberries to pdas, mobile search is going to be a very important search growth area, but with different constraints.

For example, it is more difficult to type on these devices and lag time can be an issue, so we can probably expect less overall searches vs. a pc user and more direct, shorter search times. This will also have an impact on adverstisers because of mobile devices smaller screens that make including a lot of text or an image more difficult.

Finally, there is an interesting implication of carrier provided search vs. google. As a mobile user, you may be more inclined to use Verizon's search engine to find the address of a store than to load of a new search application such as google. In this fashion, the commodification of search can be accelerated by the emergence of mobile platforms.

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Social Search

It seems that the next frontier in the world of social networking is being tackled by three ex-Googlers who have started "Mechanical Zoo." The new company has successfully raised funds and is attempting to build an application that would allow individuals to search within their networks for information and recommendations based on what it knows about their preferences.

The company is not ready to publicly preview or talk about its technology, but it currently has at least 100 "alpha" users testing the service. According to Ventilla, it will be a Yahoo Answers-type product, with more built-in intelligence about your personal tastes.

"We're tackling the problem of subjective search--when no one answer would satisfy everyone--and the answer is not to serve a Web page," Ventilla said in an interview. "We've developed an online social structure that lets users reach out to people they already know" for answers.

Given the meteoric rise of social networking activity over the past few years, it makes sense that the next step would be to find a way to harness the information contained within any given person's network. According to the article, Mechanical Zoo is not alone in its attempt -- FriendFeed, Delver, and Eurekster are all working on ways to bring a social context to web searches as well. I will be curious to see what all these companies come up with and how it improves upon Facebook functionality. I find it pretty easy to find interesting things going on in my network, but it would doubtless be useful to have a more controllable search capability.


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Second Lease on (Second) Life?

...heh heh. I'm still amused by my own title. Well, the cultural phenomenon known as Second Life certainly has not taken the world by storm just yet, now has it? What was supposed to represent the "next level" in terms of interactive marketing and branding has not exactly set the world on fire, as examples such as American Apparel literally closing down their Second Life store can attest to. Seems as if the software needed to play Second Life is a bit too meddlesome to install and continually update (a barrier to entry faced by Joost - web TV provider - as well), and in the face of other virtual community options sprouting up seemingly by the day, Second Life has seen monthly unique visitors in the U.S. taper off to just half a million. And like many of the technologies we've studied this term, calculating ROI is a hazy science at best.

But if anyone can reverse the fortunes for this Linden Lab-produced posterboy for virtual communities, it's Mark Kingdon, formerly CEO of interactive agency Organic. As the story broke today (http://www.paidcontent.org/entry/419-industry-moves-second-life-parent-appoints-former-organic-ceo-as-its-ne/), this veteran of the online marketing space is being tapped for his expertise with the user experience, which, if executed properly, could really make the product stand out against a proliferation of "me too" sites. What I'm really excited about is the potential for innovation: as the guy who was at the helm of the #7 Digital Agency (by Advertising Age), he guided Organic to 40+% revenue growth in 2006, so he's clearly at the forefront of this space. He's had a history of making a company like Daimler Chrysler envision digital gold; can he show the world that Second Life is truly a gold-rush opportunity?

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Microsoft Reveals a Web-Based Software System

Microsoft announced on Tuesday the release of a new program called Live Mesh that allows users to sync their data over the Internet with a variety of programs.  Everything will be linked up to centralized data-storage ports, and companies will be able to purchase units of this space.  The NYT references the term "Cloud Computing," that is Internet programs that replace software programs. This is a very smart move for Microsoft, as it does seem to recognize that with the advent of many Google programs (like Gmail that allows unlimited storage, or Yahoo for that matter) and Amazon that recently said they are going to implement a similar online storage program, that I think charges 15 cents a month per five gigabytes.  

This move by Microsoft is probably closely linked to its attempts at taking over Yahoo.  Microsoft sees that Internet software is where the money is headed, probably due to the increase in broadband width.  Microsoft is making an altogether shift to try and tackle online programs and Yahoo would be a great boon to this.  However, Microsoft is focused on certain parts of Yahoo, like its advertising strategies, which would aid Microsoft in their future ventures.  Also Alibaba is important to Microsoft so that it can enter the asian market.  

I think that Live Mesh is a very strategic move for Microsoft, though this announcement may have unveiled too much in regards to the Yahoo deal.  Yahoo's resistance is fueled by the idea that Microsoft is undervaluing them, because Microsoft must believe that Yahoo will have a good ROI that is worth a 60% premium.

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Tuesday, April 22, 2008

eBay sues Craigslist

Today’s nytimes.com reported that eBay had filed a lawsuit in Delaware against Craigslist, accusing the founder, Craig Newmark and chief executive, Jim Buckmaster, of unfair actions to limit its economic interest in the company. But eBay did not specify what those actions were. eBay owns a 28.4% share of Craigslist.

“The recent actions by the Craigslist directors have disadvantaged eBay and its investment in Craigslist,” said Mike Jacobson, eBay’s senior vice president and general counsel, in a written statement. “Since negotiating our investment with Craigslist’s board in 2004, we have acted openly and in good faith as a minority shareholder, so we were surprised by these recent unilateral actions. We are asking the Delaware court to rescind these recent actions in order to protect eBay’s stockholders and preserve our investment.”

eBay states that no details can be provided because “some of the information about Craigslist contained in the complaint is governed by confidentiality restrictions.”

I speculate that this is a battle for ad revenue and eBay wants to get (take) a share of it without having to do any of the work itself. I also think eBay wants to have access to Craigslist's consumer behavioral data and use behavioral targeting to drive activity to its own website in order to attract more ad revenue. It’s clear that there are privacy issues here for both the companies and the users. But to what extent are these companies considered invasive to users’ privacy when sharing data? Should users speak up about it? Personally, I don’t enjoy deleting all the junk e-mails that try to offer me all sorts of products that I didn’t sign up for. But I know that I'm probably receiving them because I signed up for something else that they are affiliated with. And no matter how many times I unsubscribe, they always find a way to come back. This isn't a perfect example, but it's to give you an idea of the seemingly endless flow of marketing from companies and their affiliates.

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Games and Advertising

It may be a little far-fetched from online gaming and advertising, but I found something interesting on video games that would work the same on online games. (link to full article)

“The kind of person that buys a Wii is not the same kind of person that buys a PS3 or an Xbox,” said John Greiner, the chief executive of Hudson Entertainment, the North American arm of Hudson Soft. “You have to be very specific when you design a game and target not only the gameplay mechanics for that user, but also the marketing for that kind of a product launch.”

Online games too would have different audiences. Thus, the target audience when marketing for the games or advertising on the games would also be different.

On a side point, I heard that advertising in games is not that effective, at least for people who love the game. On a study, they tracked the eye movement of the gamers of a racing game, and the ones who concentrated did not pay attention to the ads. Their eyes were glued to the car itself. Nonetheless, I guess that it works, since people keep advertising on games!

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Nokia Offers Free Music

I found an article that caught my eyes. Nokia announced that it
will offer free 12-month access to music from artists of Sony BMG, the world's second-biggest label, to buyers of its particular music phones, the world's top cellphone maker . . .
In my opinion, this seems as a way for Nokia to compete with iPhone, but the article seems to see a bright future in the music industry.

Such unlimited download models could offer a shot in the arm to the music industry, which is struggling to find ways to make up for falling CD sales.

Since users will be able to keep the music they have downloaded, Sony BMG would need to keep up with providing better music after the 12-month period.

Full article: Nokia Signs Sony BMG for Free Music Offering
http://www.nytimes.com/reuters/technology/tech-nokia-sonybmg.html?ref=technology

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Yahoo's first quarter earnings exceed expectations

Yahoo reported its first quarter earnings today, reporting that it earned $542.2 million, exceeding predicted earnings (see report: wired).

The Sunnyvale-based company said Tuesday that it earned $542.2 million, or 37 cents per share, more than triple its profit of $142.4 million, or 10 cents per share, at the same time last year.

Most of the first-quarter improvement stemmed from a non-cash gain of $401 million recorded to recognize Yahoo's stake in the parent company of Alibaba.com, a leading e-commerce site in China that went public last year.


Differencing out the increase in earnings that resulted from Alibaba.com, it seems that Yahoo's earnings would be similar to the company's 1Q earnings last year.

Earlier this month, reports indicated that Yahoo's first quarter earnings would be a crucial factor in negotiating better offer from Microsoft:

The fate of the No.2 Internet shop is largely sealed as Microsoft closes in. But Yahoo can hope for a higher price if its business is strong. "We think Yahoo's only escape from Microsoft's ultimatum is to have posted a strong first quarter and raise its outlook for the rest of the year," writes Henry Blodget on Silicon Alley Insider.

However, while providing some leverage, Yahoo's positive performance may not be sustainable... it is important to note that the company has not increased its revenue forecast for the rest of the year. Additionally, Yahoo's performance and growth continues to trail it's major competitor, Google. On Microsoft's end, the company has maintained a hard line stance, and it remains to be seen how Yahoo's current performance will change things. Microsoft had previously given Yahoo until Saturday to accept it's current offer (or face a proxy battle).

At the very least, Yahoo has shown that it is still a force to be reckoned with... but a takeover by Microsoft still seems inevitable. Most analysts predict that Microsoft will likely sweeten its deal... but it's still unclear how the two companies will negotiate the merging of their "disparate cultures and technologies".

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Improving the Online Travel Industry

In class recently, we discussed how the travel industry will continue to see start ups primarily due to the complex nature of arranging travel. I just finished planning a very complex trip involving a safari in Africa and a side trip to Paris and felt the need, although I’m not quite sure what it is, for continued innovation. In planning flights, I used Kayak and Orbitz’s “multi-city” functionality to try to find the best prices for airfare. Not only did I quickly discover that they would continue to show me the same prices unless I cleared my cookies or actually clicked through to the purchase page, I also found that they didn’t always find me the best prices and routes! By adding or subtracting a stop, or changing the routing of my trip manually, I was able to find better prices. And once you start down that path, the possibilities of combinations become endless. I was dying for a product that would truly let me see what my options were. A travel agent was no help, either. They marked up flights with a commission, making anything that they found more expensive than what I found. In the midst of my flight planning, Orbitz redesigned it site and its glitches made it nearly impossible to find the flights I had previously found. These search engines, it seems, still have a long way to go in continuing to improve their functionality as people start to increase the frequency of planning complex travel online.

My frustration didn’t end there. Trying to figure out how to find a good, reputable safari company was mind-boggling. Googling “Africa safaris” creates an endless list of a mix of travel agents and tour operators, many of which look like they are run out of someone’s living room. Not to mention, you have to dig through every site to see if a tour actually departs during your travel time. And for the first time, I actually found the “sponsored” ads on Google to be more helpful than the organic search. But above all, I found word-of-mouth recommendations to be the most helpful. I could imagine a search engine that would allow you to search for tours, based on where you would like to go and the dates and duration of your travel. Similarly, a site like this could overlay reviews or mapping functionality, allowing you to compare and contrast trip options.

In the end, I used Orbitz to book my flights (post-getting the glitches worked out), went to STA travel who booked me a tour through a tour operator in South Africa, and booked my hotel in Paris through TabletHotels.com. It was exhausting and took over two weeks to nail down. Needless to say, I wholeheartedly agree that this industry still has a lot of growth to realize via the Internet and I would be thrilled to pay for the services it could provide.


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mashups here we come

According to techcruch, Intel has just released an experimental piece of software from Intel labs called MashMaker. It functions as a plugin for Firefox and Explorer and appears to:

1. Allow users to create their own mashups, and
2. Show users browsing available mashups for the sites they are visiting.

You can already use Google to create mashups and I anticipate this being a big thing once it gains leverage. From my understanding coding a mashup is not an overly complex technical task (on par or easier than a widget), and thus we can expect a number of mashups surfacing in the future. Most of the mashups that I have seen leverage mapping software or other related data with websites. For example, you can overlay crime statistics with craigs list.

This meta-web activity, has the potential to allow people an incredible degree of customization in their web experience and will also probably give birth to new products and internet paradigms.

The fact that a powerhouse like Intel is behind this application speaks to promise of this product at its infancy and likelihood of mashups becoming much more widespread. Maybe its web^2.0

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Does anyone really use coupons?

Not in my own little planet, but apparently there is a whole universe of people out there who do. I mean, yes, I’ve occasionally used coupons or codes when buying online but because I have come across with them, not because I spend time searching for them. But seriously, am I out of the loop? Have I been missing out on something great? Somehow I bumped into an article speaking about “m-coupons”, i.e. mobile coupons. They are sent to your cellphone via text messages (with your authorization). So, basically you opt-in to what kind of vendors you want to receive coupons from. The coupon is often a number code that can be redeemed at the point of purchase or on online buys too.

The vendor benefits because delivery and redemption costs are reduced in comparison with the traditional ways (paper coupons). Also, receiving the coupons directly on your phone will trigger impulse buys and you can forward the coupons to your friends’ mobile phones triggering more sales. M-coupons are redeemed at higher rates than paper or e-coupons because they are not forgotten at home; you have them with you on your phone.

NetInformer, a wireless media and mobile marketing firm, claims that with their m-coupon services they can:
  • Send offers to customers in real-time that are location based
  • Track results by customer, the exact time and purchase location
  • Offer rewards based on redemption and referrals

This again, raises a huge privacy issue in my head. How are advertisers and vendors able to ‘track’ our steps? It’s kind of creepy that any given vendor can know exactly where you’re located and that they can send you ‘the coupon of the day’. The fact that they can track your actual steps is scary. How secure is this redemption technology? I think it is still in a rather early stage but it’s a major consideration to make when opting-in.


Those willing to give it a try have been most interested in:





Call me paranoid, but beyond privacy issues I think this mobile coupon redemption technology will raise personal security issues too. There will always be a technology savvy wacko out there. At least online you have firewalls, pop-up blockers, filters, antivirus software, and so on. We are more aware of ways on how to protect ourselves from hackers infiltrating our systems, from phishing, etc. But walking on the street it is our personal integrity that could be at stake and our cellphones could become a ‘personal tracking device’. The deal of the day m-coupon might not be such a good idea after all; at least not for me.





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B2B Ad network by 24/7 Real Media

24/7 Real Media is partnering with the big four publishers: Cygnus Business Media, Nielsen Business Media, Reed Business Information, and The McGraw-Hill Companies, to launch BBN, the largest B2B online advertising network, with the target to focus on an underserved niche among ad networks.

According to the SVP of North American sales and operations for 24/7, with a rising number of over 200 ad networks in the US, ad agencies and advertisers can get confused among the different types. Thus, BBN builds its strengths by having advanced targeting with high profile publishers as well as a high quality audience, niche content and reach so that it can ensure effectiveness to advertisers.

Therefore, the advertisers using BBN will benefit from both the niche contents appropriate to their business and access to the big four publishers, whose number will be increasing later this year.

Full article:
http://www.clickz.com/showPage.html?page=3629230

Pachara

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Monday, April 21, 2008

Hunting jobs through social networking

On social networking sites, such as LinkedIn and Facebook, users can create their online professional profiles and highlight their core skills and strengths for review by recruiters.

New surveys conducted on behalf of Robert Half International, California-based recruitment firm, reported that social networking tools will be useful for job hunting over the next three years. The survey involved interviewing senior executives in Canada and the US. As a result of the survey, around 60% of the executives interviewed said professional networking like LinkedIn was useful, while around 30% said social networking like Facebook was useful.

Thus, we, as MBA students, should utilize this networking tools to maximize our chance to get the best jobs we can. However, the traditional cover-letter-and-resume recruiting should not be neglected.

Full article:
http://www.internetnews.com/breakingnews/article.php/3742166/Social+Networking+For+Work.htm

Pachara

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The death of privacy (yet again)

I was rather distressed by a WSJ article today detailing acquisitions by both Thomson Corp and Dun & Bradstreet of software companies that have developed programs to allow the mining of employee contacts through email programs and electronic address books. The software purportedly "helps" to create business by establishing a contact network but in the process violates employee privacy in a heinous way:

The software is supposed to help companies drum up business by allowing employees to make use of each others' contacts. For example, salespeople can pitch to a co-worker's contacts, while corporate recruiters could use the program to target employees' friends and acquaintances. The products work by examining the contact lists on employees' email programs, as well as other information such as lawyers' billing records or contacts stored on special programs for managing customer relationships. Then it checks how often individuals email the contacts and whether they have appointments for face-to-face meetings or phone calls on their calendars. The software uses that information to determine how strong a relationship a person has with the contact.

I could almost accept the argument that information stored on your work computer technically belongs to your employer. In that case, yes, the contacts may be okay to peek at. But to monitor your communications and rate the quality of interaction in order to determine how close the relationship is just screams privacy violation. The developer companies have added features to allow clients to set privacy controls (for example, enabling employees to hide individual contacts), but these controls are set at the corporate level for all employee users -- I wonder how many companies choose the higher privacy standard, given the purpose of the software.

This is yet another area where we see privacy being trampled in the name of technological progress. Call me old-fashioned, but I'd rather not have an entire firm of strangers viewing and contacting my clients, friends, and family. This is a scary precedent.

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Sony's comeback in digital entertainment?

Sony plans to (re)enter the digital entertainment market by launching its version of online video service through its game console, PlayStation 3 (PS3). This service will offer movie and television shows from the Internet to the PS3 through its online PS network. This will put them in direct competition with Microsoft Xbox Live service, which has 10 million subscribers, who get movies and TV shows through Microsoft’s Xbox 360, as well as AppleTV.

This will be Sony’s third attempt to distribute digital entertainment. Its previous project was Sony Connect, a response to Apple’s iTunes, which shutdown this March and prior to that, it was Movielink, an online video store that was sold to Blockbuster last year. But according to Peter Dille, SVP of marketing for Sony Computer Entertainment America Inc., "…we'll be offering a video service for PS3 in a way that separates the service from others you've seen or used."

One way Sony plans to differentiate is by having open standards for its online video service so that it is compatible to a range of computers and hand-held devices (i.e. PlayStation Portable) in contrast to Apple’s close networks in which its service is only compatible to Apple products.

But according to Convergence Consulting Group, online movie sales are a small business and will remain small over the next year as compared to DVDs, which continue to be the dominant home video format. U.S. consumers spent $95 million for online movies while they spent $23.4 billion to rent and buy DVDs last year. On the other hand, market researcher Parks Associates predicts that online videos will become more lucrative in the future. They project an estimate of $6.4 billion in revenue by 2010 from advertising and paid downloads or rentals.

It’s clear that Sony missed out on the digital era and is trying very hard to carve out a market segment for itself. It will be interesting to see if Sony can achieve this since it was able to successfully use the PS3 console to establish its Blu-ray discs as the standard for high-definition video in the home, beating out the HD DVD format that was backed by Microsoft, Toshiba and others. Maybe third time is the charm.

http://www.latimes.com/business/la-fi-sony21apr21,1,152898.story

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How a show about bratty teenagers may change broadcast television

It is not often that one gets to blog about a television show that in only thirteen episodes has already managed to feature such scandalous plot lines as a pregnancy scare, an attempted date-rape, a lost virginity, a near-deadly accident, a divorce, a suicide attempt, multiple thefts, blackmail, a drug addiction, a threesome, and an eating disorder for a business school class. However, Gossip Girl, creator Josh Schwartz’s (of The O.C. fame) latest incarnation of the teen drama, is not an ordinary program. Modestly successful in its Monday at 9pm time slot (it averages 2.5 million viewers weekly), the show has gained tremendous momentum online. Though Lost and The Office have become download sensations as well, what sets Gossip Girl a part from these other serial programs is that it appears to be succeeding primarily on the Internet.

But given that the show’s title character is an anonymous blogger and that the majority of communication occurs via text-message, the spread of its online existence should come as no surprise. According to the nymag.com article, “The Genius of Gossip Girl”:

There’s something about the combination of the show’s premise, the viewers’ age, and the available technology that has given Gossip Girl a life of its own online. Not only do fans watch the show on their computers, but they post sightings of the actors on gossip blogs and exchange rumors (about both the show and its stars) on fan sites. You can even play Gossip Girl’s Upper East Side on Second Life. It’s not appointment television; it’s a 24-hour conversation. We are all Gossip Girl! And the whole experience can happen sans television.

The challenge of this sort of success is monetizing it. Traditionally, shows that permeate the cultural zeitgeist—Friends, Seinfeld etc.—are ratings Goliaths, or they exist on cable television (Sex and the City) which is not as reliant on ad revenue. Gossip Girl, which lives on the CW, does not fit either model: it has become a pop culture phenomenon on a major network, but this has only translated into modest television ratings, which could lead to its demise. Up to this point, the strategy for solving the advertising conundrum had been mostly product placement (i.e. characters talk on Verizon cell phones); however, this sort of creative marketing cannot replace the revenue generated by traditional broadcast ads. Other options do exist: the CW could look into a Pando-type of content delivery system in order to minimize cost and maximize revenue. But instead of taking a more creative approach, network executives, as Kumasi blogged about in "'Gossip Girl' Goes Offline," have announced that is pulling Web-streaming for the season’s final five episodes, which begin airing tonight.

This desperate move to increase viewership seems like a temporary fix that will undoubtedly annoy GG’s legion of fanatical tween, teen (and yes adult) viewers who have come to appreciate and expect the show’s multi platform availability. Though it may generate a ratings bump, it does little to actually solve what is at the heart of the problem: that GG’s brand of success is not an anomaly but rather indicative of future viewing trends as young, tech-savvy audiences continue to grow. Discovering new, sustainable and effective advertising streams for shows that exist into two worlds—on television and online—could forever change the broadcast model. Schwartz and co–executive producer Stephanie Savage believe that part of the answer is redefining “successful” programming by devaluing the traditional Nielsen’s rating system and, instead, judging a show by its “cultural permeation.” According to the article, “It’s not a new goal—as Us Weekly editor Janice Min puts it, ‘The best thing that could happen to a show is for someone to be able to say ‘Jen and Courteney’ and you know they are talking about the stars of Friends’—but it is an entirely new way of getting there.”

Gossip Girl is in a unique position to make inroads into multi platorm marketing and should not shy away from the challenge that this poses. Though the question of whether the network will give producers the breathing room needed to navigate this brave new world of program-delivery remains, ultimately whatever becomes of show,­ its model of multi platform distribution will have far-reaching implications on how television shows are marketed and disseminated online.

Link to article: http://nymag.com/arts/tv/features/46225/

"xoxo"

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Yahoo! to Report Quarterly Earnings Tomorrow


With Microsoft's three-week ultimatum coming due in five days (April 26) and AOL and Google in the mix, Yahoo's first quarter earnings release tomorrow could be one of their most important. With the economy slowing, one could hypothesize that earnings for Yahoo could be down, however because Yahoo is in no rush to work out a deal with Microsoft, most people believe that things are looking up for Yahoo. Industry analysts predict revenues of approximately $1.33 billion, which translates into 12% year-on-year growth and $.09 earnings per share.

Another major point of interest that people are eagerly anticipating is the result of Yahoo's two-week trail ad partnership with Google. A successful partnership would fall in the range of at least a 30% - 40% increase in revenue per search.

Tomorrow's announcements will most likely determine how much bargaining power Yahoo will have in a possible Microsoft take over. While analysts opinions are split on whether or not the deal will actually happen and at what price, all analysts agree that Yahoo has been and still is a strong company. Bernstein analyst Jeff Lindsay says:

We expect management to have pulled out all the stops to drive up Q1 performance, maximize their value, and make life generally as difficult/expensive for Microsoft as they can… We also think it likely that a deal with either AOL (NYSE: TWX) or Google or both will be announced ahead of the Microsoft deadline, and see this as a positive for shareholders.

While Needham analyst Mark May states:

We believe in-line results and either a maintaining or increasing of CY08 guidance will provide Yahoo! mgmt with further proof that it is executing toward its three-year financial plan, and will tilt the negotiating power in the MSFT take-over bid toward Yahoo!, in our view. Despite Yahoo!’s value as a take-over candidate and the potential for a raised MSFT bid, we are maintaining our Hold rating as i) we believe the company currently trades at or above its stand-alone fundamental value, and ii) we believe there is as much as a 50% chance that the MSFT transaction does not take place.


In the end the market seems to feel that Microsoft will eventually take over Yahoo, however key variables such as the Google ad partnership outcomes and how positive Yahoo's Q1 earnings have been will help determine how good of a deal Yahoo will be able to negotiate.

Sources: Paidcontent.org

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A blog about a blog about a blog

Last week, I read a NYTimes article that told the story of a woman who was blogging about her divorce with her wealthy, well-known husband in graphic detail. Of course, I barely made it past the first few sentences before I was online watching her YouTube videos. And I was not alone. While the Times article aimed to bring into focus issues of privacy, the article also served to drive millions of users to this woman’s blog. Or was their aim something different?

I just read a blog post on Silicon Alley Insider (http://www.alleyinsider.com/2008/4/new_york_times_discovers_seo_porn_viagra_sex_divorce_and_youtube) that argued that the NY Times actually used this woman’s blog to drive traffic to its own site and increase newspaper sales. As millions of readers read the article in the paper, or online, millions of users also logged on to watch the video and then email the article (video link included) to their friends. In essence, it hinted that the NY Times was itself blogging.

And now, here I am, blogging about the whole thing. It seems that businesses, media especially, are finding ways to use blogs in new and creative ways. As collective knowledge grows, the “truth” formerly reserved for delivery by the media is threatened by blogs. Traditional media, no longer the only outlet for news, must find a way to improve its sales by improving readership. So, why not make news of bloggers who are making their own news? It is happening with increased frequency. News media went crazy as Jeff Jarvis bashed Dell or when Microsoft fired Michael Hanscom over his personal blog. I guess it’s as the saying goes - if you can’t beat ‘em, join ‘em.


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How will Internet companies be affected by the Recession?

The recession of 2000-2001 really impacted the Internet sector; it came right at the beginning of the Internet boom when many companies were working on branding efforts by getting sites online. Dot coms that wanted to make enough noise to justify a public offering, or big companies that were trying to show they “got it.” However, by 2001, the economy took a downward turn and the Internet campaigns were shut down (or paid little attention to)

Will the current recession cause the same problems for the Online community? It looks like no; while they may not be totally immune to hard times- the recession is not impacting the Internet world as much as the physical one. Google, the biggest advertising company online (and offline) had a strong first quarter and said that it does not see much impact from the economy now on its business. According to the article in the NY Times BITS, "Online Advertising Is a Lagging Indicator of a Recession", there was an optimistic view of the situation at last weeks AdTech, the big advertising convention in San Francisco.

So why is it that the Internet companies seem to be a little "Safer"? There are two main reasons for this, one is unique to this time period, and another perhaps structural. First, Internet marketing has proven (in the last 8 years) to be successful and business are shifting their marketing efforts online. Online marketers are catching customers that they could not catch before, and online marketing is actually driving sales. Second, much of Internet advertising is tied closely to what people are actually still buying, rather than the hopes of marketers that they will buy more.

If someone is in the market for new TV or other item, they are most likely going to be browsing the Internet- therefore, marketers do not want to cut back on their banner ads and search keywords. While they may save dollars by cutting TV or print ads, which do not target those specifically in the market for the TV. However, people have to still be online and clicking through on the websites that post the display ads. What if people decide browsing Netflix is a luxury item they just can afford these days? Only time will tell.

Of course, now a large number of Internet ad revenue is tied to how often users click, and thus they are wired directly to the spending interest, or lack of interest, of consumers. If too many people decide that Netflix or Match.com is a luxury they can’t afford, clicks will fall. The ad networks, and the publishers they serve, will suffer.

In a time of a recession, everyone is impacted- "Even if online is growing, it is growing more slowly than it would if the home builders were still erecting a McMansion every five minutes"

Full article-http://bits.blogs.nytimes.com/2008/04/21/online-advertising-is-a-lagging-indicator-of-a-recession/index.html?ref=technology


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The Debate over Sports Bloggers

The article in today's NY Times, "Tension Over Sports Blogging" discusses many of the issues surrounding blogging and professional sports. Mark Cuban, the owner of the Dallas Mavericks, sought to ban bloggers from the Mavericks’ locker room, but the National Basketball Association intervened, ruling that bloggers from credentialed news organizations must be admitted.

As blogging is the new form of reporting and today, seems to be the way in which many people gain and discuss information; it then seems that it would be impossible to ban this form of reporting from the popular world of sports. However, Cuban decided to prove a point by allowing ANYONE and EVERYONE who has a sports blog to come into the locker room; “someone on Blogspot who has been posting for a couple weeks, kids blogging for their middle school Web site or those that work for big companies.”

The main issue between the press and organized sports is who covers the teams, how reporters cover teams, who owns the rights to photos, video, and audio that journalist gather. Should any blogger be allowed into the locker room to gather information? Essentially, the article asks, "Who owns the right to sports coverage?" Isn't blogging part of our First Amendment Right? But when is it stealing from someone else's copyright?

Major League Baseball recently issued new rules limiting how the press can use photographs and audio and video clips on Web sites. Many organizations and publications, like Hearst, Gannett and Sports Illustrated, have refused to go along with the new rules. Their reason for this ruling being that too much video and audio on a newspaper’s Web site could infringe on rights holders — the broadcasters who pay millions of dollars to carry live games. Additionally, the MLB has its own website in which photos and videos are posted- they want to generate visitors to their site.

The issue issue is not just a sports one- Last week ABC News limited the length of video clips from a presidential debate- limiting other networks to only use 30 second clips. However, the importance of this issue is even more obvious in sports where it is all about seeing that one amazing catch, home run, touch down or such

10 years ago, this was not an issue; however today sports journalism demands audio, video, and photo to capture the moment. “I’m all for selling newspapers and magazines,” said Bob DuPuy, the president of M.L.B. “What I’m not for is them branching off in to other enterprises.” Baseball (and other sports) may need to get with the times- instead of trying to prevent media online- work with it!

M.L.B. gave in on one key point: It originally tried to limit the number of photographs in online galleries to seven. Now the language permits a “reasonable” number of photographs, with “reasonable” left undefined. However, the publications feel they have a right to use the material they gather as they see fit (whether that be in print or online- and online seems to be where the readers are) “From our perspective, any arbitrary restrictions on how we use our intellectual property for news coverage is not acceptable,” said Phil Bronstein, editor at large for Hearst. Bronstein continues to say that video is the future of journalism and sports must embrace it.

Jason Zillo, the head of media relations for the Yankees, states “We spend a lot of time in spring training on media training. The biggest danger now is that with some of these blog sites there is no structure. There is no one that John Smith reports to.” This is to a very large extend true- with the popularity of blogs, there is no control over what information gets put out there. However, before the Internet there were gossip rags and other ways of getting info out- while they may not have been as readily accessible they were there- The accessibility of the Internet is the fear!

As of now, each team makes their own rules- some allow bloggers into the locker rooms- others (like the Yankees) have strict limitations. Sports blogging is not going anywhere- if anything it will only get more popular, Professional sports better think of a way to handle it.

Full article: http://www.nytimes.com/2008/04/21/business/media/21bloggers.html?pagewanted=1&_r=1&ref=technology

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Google is #1 brand two years running

According to market research firm Millward Brown, Google is the number one global brand for two years running.

The following spots were held by GE, Microsoft, Coca-Cola, and China Mobile. The measure supposedly values the brand, through financial analysis. While I have a number of doubts about the feasibility of this, I want to comment on the implication of the world's most valuable brand being primarily associated with an internet search, and now to some degree internet advertising product.

The question I want to raise is how developed people's conception of the brand is. I wonder if people know much about why google is good, how it works, what other products they have, etc., or if they simply just use it to search because it is the best. I would compare this to Coke, and suggest there is probably a much more deep and pervasive global brand effect. I think as the internet develops, it is possible that multiple search providers could emerge with stronger technologies and/or different approaches. I also think it is possible that internet search could become commodified.

While Google is in an amazing position, I also think their success could be there downfall. In some sense, they are wedded to their current model, i.e. simple interface, search based primarily on linking algorithms. If you look at another engine like ask.com, the interface is clearly superior. For example, you can have custom skins and it groups media types of information better. Perhaps, in the long-run, google search may be licensed out to a series of different front-end application providers.

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Travel Ad Network raises $15M

According to Silicon Alley Insider, Travel Ad Network has just raised $15M in series A financing. According to their website, they are the exclusive agent for a number of top-tier travel sites such as Rand McNally and Lonely Planet.

This trend is evident of 1) investors continued willingness to fund ad network ventures; and 2) increasing emergence of vertical ad networks.

The question I would like to pose is: why do I need specific ad networks for verticals? Are the ad conglomerates under staffed or without the expertise necessary to represent/sell/manage this type of inventory and associated advertisers? Or, is this simply another venture trying to make a quick buck on the wagon?

The interesting thing to this story is that this network is an exclusive agent, and thus may be indicative of content sites working with startups to try to leverage more effectively via exclusivity. Maybe they even have equity.

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A Digital Shop Hops Across the Pond

Opening up an advertising agency in New York City in today’s flagging US Economy might seem like a fool’s errand; however, Profero, one of the hottest digital shops in the U.K., has done just that. Though traditional advertising markets (print, television) have experienced a decline in recent months, the share of online advertising continues to grow, and brothers Daryl and Wayne Arnold, who started the $25 million company ten years ago, are betting the company’s fortunes on the continuation of this trend.

According to an article in Adage.com entitled, “Hot Digital Shop Hops Across the Atlantic,” Wayne, CEO of the agency’s North American operations, “said he’s confident digital spending is going to remain strong in the coming months, because web campaigns are more responsive than other types of media.” In addition, the company, which built out its Asian network before coming to the US, is counting on its expertise of this important overseas market as a way to attract U.S. marketers who are seeking to “understand the dynamics of the Asian marketing and learn to localize campaigns there.”

As one of string of U.K. digital agencies to set up shop in the U.S., hoping to capitalize on the shift of ad revenue online, it is easy to wonder whether these British imports will be the savior of “Madison Avenue.” This question may be answered in the coming months, once advertisers and ad experts can evaluate what type of inroads Profero and its competitors have made into this already crowded market place and whether the success of the company’s U.K. and Asian offices can be replicated in North America. If Profero does not live up to its expectations, it could be considered a clear indicator that the Internet advertising is perhaps not recession-proof after all.

Link: http://adage.com/agencynews/article?article_id=126532

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Ad Networks for Quality Eyeballs

An article in today's NY Times focuses on the increased popularity of ad networks as opposed to traditional display advertising. With a weakening economy, it can no longer just be about branding, but about action.

Ad networks that target certain consumers or others that focus on sites with a common subjects may mean "less eyeballs" but "higher quality eyeballs" and "less leads" but "higher quality leads." This feels like the natural evolution of a new advertising medium. At first, it's about making your brand or company's present generally felt, but then, as usage and competition increase, it signals that it's time to go after the people the matter - the ones likely to make a purchase.

According to the article, home pages can still be effective, but the high prices can make them unappealing. And so, we've seen a number of the smaller ad networks scooped up by the big players (Yahoo + BlueLithium, AOL + Quigo Technologies)... but what will this lead to? Well, if the ad networks become the go-to place for ad buys (and they're all owned by the Yahoo's and Google's of the world), then prices will shoot up, just as they have for home pages. For the time being though, targeting with ad networks (which seems intuitively more appealing anyway) is the cheaper, and hopefully more effective option.

Full article: http://www.nytimes.com/2008/04/21/business/media/21online.html?_r=1&scp=1&sq=tyler+townsend&st=nyt&oref=slogin

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The Plot Thickens

Even while Microsoft courts NewsCorp in an effort move forward with its Yahoo takeover plans and to strengthen its position in the social networking space, NewsCorp’s MySpace has initiated internal changes to bolster its potential to generate cash from online advertising. The company, which has an existing partnership with Google to host online ads at MySpace, has announced the promotion of Jeff Berman from EVP-marketing and content to the new post of president of sales and marketing. Berman is tasked with “coming up with ad solutions for MySpace’s brand partners, including strategies for driving online traffic optimization and integrating the company’s hyper-targeting technology and ad-serving into campaigns.” Berman, who began his career in public relations in the political and non-profit space, will no doubt face delicate political hurdles in the weeks ahead. He is taking on his post while the major players in the industry are scrambling to find ways to compete with Google. MySpace is using its ability to effectively target as a differentiating benefit to advertisers. Separately, the company launched a community ad program in beta “designed to help advertisers create communities around their brands.” This effort aims to maximize the benefits of social computing for advertisers, providing the opportunity for social media to facilitate interaction with an advertiser’s product while enriching the user experience as part of a community. The two levels of the “Community Builder” platform, “Self-Service” and “Full-Service” provide advertisers with updates on the effectiveness of their campaigns within the community. The “Self” option manipulates the cost-saving attribute of Web 2.0 self-service, placing the onus for web development, coding, and maintenance on the customer. Could MySpace be taking notes from Google?

Full article: http://www.paidcontent.org/entry/419-myspace-ups-berman-to-president-sales-and-marketing-begins-testing-comm/

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More Beacon Trouble

More trouble for Facebook's Beacon, but this time it is Blockbuster that is being Sued. Mashable reports that A woman from Taxes is suing Blockbuster for participating in Facebook's Beacon program and violating a 1988 statute. What I really wonder is weather someone can actually sue for such a thing. Yes, Facebook's Beacon was very controversial when in launched, since people did not have a lot of control over their privacy. But since then Facebook apologized for this and changed their privacy option so that people are well aware of when they are posting to Beacon and also giving them an option to opt out of the program altogether. This might be the reason why this woman is going up against blockbuster as apposed to Facebook since they know Facebook is covered on this matter. The questions is whether by agreeing to the terms of the post to ones news feed one is giving up their right under the videotape privacy Protection act. I think so, and I see no different between this woman physically signing on to Facebook and changing her status to "I just rented X film on Blockbuster" or her having the Beacon service do this for her after she clicks "yes." The main fault I see in this law suit is not the affect it will have on Blockbuster, but rather the network affect it will have on the Beacon platform in general. The platform is only as good as the amount of companies and websites that support it, and if companies are getting intimidated from having Beacon code on their sites because they fear they might get sued (as apposed to Facebook) then the whole platform might fail.


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