The Rise of Email this Holiday Season

Kate Kaye at Protocol discusses how the impact of losing access to third-party company data has made retailers even more incentivized to acquire the email addresses of customers this holiday season. This is hardly surprising, and a logical response of retailers to deal with an impaired ability to target their ideal customer profile through paid advertising channels such as display, search and social.

One wonders whether limiting the effectiveness of marketers in one channel just drives them to others, and whether that ultimately results in a better experience for consumers.

Which is worse - being advertised to with relevant messages, or being advertised to with irrelevant messages?

A push to more email marketing from loosely related retailers may drive customers to explore options to keep their inbox clean.  Email clients have begun to emerge (see Superhuman and Hey) that create a whitelisting process which forces all new email senders to be vetted before they make it to a user's inbox.  A shift to email marketing risks spoilage of that channel in the same way we've seen the rise of ad-blocking software to target display ads.

If marketers see opt-in email as the path forward in an era where targeting through paid channels has become less effective, they need to very careful to make sure that the content they produce is at least as relevant and as targeted as their paid ads, if not more so, otherwise this channel too may cease to bear fruit.

Is MySpace's Data Worth More Than Its Traffic?

Like most people, I haven't visited my MySpace page in years. But when I signed up, I supplied them with a lot of personal information, such as age, address, maybe even favorite music. The value of the company, based on traffic that viewed its advertising, plummeted from its sale price to News Corp of over $500m to around $30m when it was recently sold.

The loss of value was shocking to the industry, and it makes me wonder if, with all the experts and management takeovers in recent years, relaunches and new strategies, did they miss an obvious source of revenue that the new investors will reap?

A few things we know about MySpace: it had hundreds of millions of users, mostly 15-25, starting in about 2005. Based on their previous behavior, maybe there are future values to this data that has not been accounted for, or even considered a possibility.
That is, what about email marketing to those addresses?

For example, MySpace knows when a lot of people are going to graduate high school and college in the next few years. With so many users, a student loan email may not convert many people but those it did would have high value. MySpace knows when certain users are getting driver's licenses and getting to be legal age.

These might be lowest-common-denominator sort of products, but MySpace was already famous for that. These are very elementary examples of behavior that could be gleaned from their data. There must be something in there... seems like a steal, $30m for such a vast trove of data from around the globe. The speed of the company's life cycle means a lot of this info is still valid, to look on the bright side again.

Amazon and Display Ads

Amazon recently closed a deal with demand-site platform Triggit which will allow the e-commerce giant to expand its existing retargeting efforts and take advantage of the growing display market. (www.paidcontent.org, David Kaplan, 6/29/2011) Research analysts have noted Amazon’s current efforts to expand its display ad business and to even provide services to third-party sites. According to Macquerie Research analyst Ben Schachter, Amazon intends to use Triggit’s RTB system to match pools of profiles from Amazon’s consumer data with available ad impressions. From there, “Amazon will then bid on inventory and re-sell it as part of a targeted ad buy to third-party advertisers.” Schachter estimates the gains for Amazon from display to be non-GAAP EBIT margins in the 20-25 percent range” compared to its current 5-6 percent margins.
Two issues that arise from this retargeting system are those of privacy and of user interference. After Amazon acquired the online shoes retailer Zappos two years, as a result of retargeting efforts, customers complained about receiving the same ads repeatedly. For example, when consumers visited and browsed items on a website, if they made no purchase, they would continue to see ads from the same website; the purpose of this technology was hopefully to convince these users to return to the website they visited and purchase the items they browsed. After a series of complaints, Zappos adjusted the system to stop repeated ads.
Amazon is obviously in a great position to make display advertising a lucrative business, but it must be careful not to let retargeting efforts ruin the user experience and drive away customers who are annoyed by repeated ads.

What does the AdMeld Acquisition Mean?

Quite simply it means Google is consolidating it’s overwhelming dominance of display advertising. From my initial glance at the acquisition, it appeared that Google was simply growing its already massive analytics toolbox, but I now believe that this is only a small part of their acquisition rationale. The more significant byproduct of the acquisition is the growth Google’s display ad presence.

Admeld’s technology, most notably its yield optimization service, will undoubtedly be incorporated into Google’s own DoubleClick. This does not preclude the possibility that Admeld will continue to operate its original service; the future development efforts will most likely be redirected to doubleclick. Maintaining Admeld will certainly be part of the strategy to retain Admeld’s publisher client base, which is certainly a larger part of the acquisition.

However, a much more powerful and less intuitive benefit of the acquisition is the boost Admeld will make to Google’s display ad presence by increasing their queries per second (qps) volume. Queries per second is a direct measure of the volume of display ads), and these queries are generated by Sell-Side Platforms (SSPs) like Admeld.

I anticipate that Google’s acquisition of Admeld will boost the value of the remaining Sell-Side Platforms, and we even may be seeing Microsoft looking to acquire one of the other major QPS generators.

Google Bomb

On 25th January, Google announce officially that they have an algorithm that correct / avoid the effect know as Google Bomb (see wikipedia). Playing with some flaws in the algorithm people was able to establish ways of changing the results. One of the most famous is the search for "miserable failure" that send you to the White House.

It is a new alteration of an algorithm that is getting a lot of criticism on Internet. What do you think about it?

Poorly placed display ads

Continuing our conversation in class yesterday about when ad placements can really hurt a company.... check out these hilarious combinations of news stories and accompanying ads:

http://gawker.com/news/advertising/adventures-in-contextual-advertising-a-new-beginning-231660.php

http://gawker.com/news/advertising/return-of-the-son-of-still-even-more-further-adventures-in-contextual-advertising-229366.php

http://gawker.com/news/advertising/even-further-adventures-in-contextual-advertising-222310.php


I'm assuming these are cases of keywords automatically matching up the stories and ads. How could a company avoid such problems in the future?