Online Audience Grows in Effort to Escape Reality

The Wall Street Journal had an article this week about the unemployed and interestingly I think the article gives some direction to marketers in this downturn. It turns out that the unemployed are flocking to digital activities as a way to pass the time cheaply (leisure minutes the article calls it). Internet games and gambling, Netflix, Twitter, Social Networks and Blogs have all seen an up tick in use during this downturn.

Internet marketing, as we all know, is here to stay, but the flight to leisure on the internet suggests that the online audience in social networks and gaming may grow online marketing even faster despite the downturn. One man quoted in the article has sent out 652 tweets since October as a way to keep in touch with his network – something he has time to do since he is unemployed. Perhaps he would not be such a loyal tweeter if he had not become unemployed and had the time to devote to “writing.” Right now Twitter does not have a solid revenue model but users, like this man, may drive the service to a model faster than good times would have - the downturn may actually be maturing the market faster. Marketers are going benefit from this by being able to target a larger online audience than might have existed in good times.

The question of course is will companies benefit now or later – will they start taking advantage of increasing online audiences or wait until the economy turns up? I see strong potential for smart companies to strengthen their brand identity during this downturn by figuring out how to capitalize on this escape from reality driven audience. True, this is not going to lead to immediate sales but the past shows that strong branding in a downturn can lead to greater rewards when the good times return.

--Kate Grossman

Is the internet making us...dumber?

This is more of a philosophical posting - but does access to more information, online and across various mediums, lead to less knowledge?  Consider the election and contentious topics surrounding the candidates, their identities and their stances on various issues.  Days before the election, nearly 25% of Texas respondents believed that Obama was a Muslim.  Among Republicans, belief that humans are causing global warming has declined by 2% over the last 5 years, despite much factual evidence to the contrary.  What is going on?  Shouldn't we expect a progression with the infusion of available information?  In the most recent issue of Wired Magazine, Clive Thompson writes about this surprising counter trend.

History of Science professor at Stanford University, Robert Proctor, contends that when it comes to controversial subjects, our usual relationship to information is reversed.  Ignorance increases.  He calls this trend "agnotology" or "the study of culturally constructed ignorance."  The ability to drown out the truth with online gorilla marketing tactics, has an impact on how some companies dessiminate information.  For example, a typical "agnotological" campaign is the funding of bogus studies by tobacco companies that link lung cancer to baldness and viruses - anything but their product - to manufacture confusion and ambiguity.

According to Proctor: "People always assume that if someone doesn't know something, it's because they haven't paid attention or figured it out.  But ignorance also comes from people literally suppressing truth - or drowning it out - or trying to make it so confusing that people stop caring about what's true and what's not."  

So despite the opportunities presented by the internet for consumers of information, it is inherently agnotological.  After all, from even a simple google search, people can easily find information online, whether true or false, that is tailored to their particular world view.  As newspapers decline, and fact checked traditional journalism is replaced by citizen bloggers and op-eds galore online, we should be mindful of this disinformation revolution, and make sure that user fact-checked sites like Wikipedia continue to flourish.  

 

 

All dressed up…

The invitations have been sent, the Morgan Library in NYC is ready to host, and the rumors are swirling… will this coming Monday, February 9th, finally be the day that Amazon announces Kindle 2.0? With a waitlist already 4 – 6 weeks long for the first version, 230,000 titles already available and industry analysts expecting the Kindle 2.0 to push Amazon.com to unprecedented sales levels… nothing could spoil this party!

Except maybe Google that is.

Google announced today the availability of a mobile version of its Google Book Search product which will allow Android and iPhone users access to over 1.5million books, for free, that are currently available via its service. The books may be free to users, but they didn’t come cheap to Google. In 2008 it settled a 4 year legal battle with publishers to make the books available at a cost of approximately $125M. There is a catch though – most of the books were published prior to 1923, so you have to like classical literature to appreciate the offering; right now at least. But Sergey Brin, Google’s co-founder has stated that it’s, "Google's mission is to organize the world's information and make it universally accessible and useful” so this could just be the beginning of what becomes available for mobile phones from Google.

So – is Amazon.com all dressed up for a party that no one will care about? That remains to be seen… I think it all comes down to whether customers really want to read a book on their iPhone or Gphone screen. The Amazon PR department though surely must be thinking of Charles Dickens’ famous introduction, “It was the best of times, it was the worst of times,” in preparing for this press event. Let’s just hope they’re not reading A Tale of Two Cities for free on Google Book Search.

Improving online sales – the secret is out!

eMarketer reported in late January that in a single year, the number of customers who viewed online retail videos increased by 40%. More important than this increase however are the reported benefits from web retailers who are seeing a lower number of abandoned shopping carts, reduced return rates and higher sales.

The data isn’t surprising. Anyone who has shopped on line is likely to understand the value of seeing a video about the product before purchasing it. Somehow it brings the online buying experience closer to the familiarity of an in-store experience. So why don’t all vendors offer this added feature if the benefits are so clear? The biggest challenge, says eMarketer, is the high costs associated with the creation of these videos. Cost aside however, there are additional challenges that I can think of:

First, who makes the video? Is it the OEM/supplier, or the retailer? And once it has been created who owns the rights to it? If a retailer spends the money to create the video, can the OEM use it too? What about the risk of channel competitors using it for their own web storefronts?

Second, what about customization? Assume a very simple scenario where an OEM decides to make a video, but it sells 5 different colors of its product to 5 different retailers. What color product is featured in the video? Choose any 1 color to feature, and you alienate 4 other partners. Choose all 5 and you agitate all 5. Make 5 videos and you’ve blown your budget. And this only considers your retailer’s reactions – just wait to see the customer confusion that is created if the product they see in the video is not exactly the one that arrives in the mail! It gets even trickier once you have customized offerings, beyond simply color, available for each vendor as well.

Last but not least – short product cycles become an issue. In a world where products are reinvented, refreshed, and re-released faster than video production times, how on earth do you keep up?

So – what’s the answer? Maybe someone should call the Dorito’s guys who spent $2K to create the Superbowl ad which turned into $1M return. They seem to have figured it out.

And now even little kids are programming for the iPhone

Apparently the iPhone is so easy to program for 9 year olds can develop applications: http://i.gizmodo.com/5147072/9-year-old-writes-iphone-application-has-nothing-to-do-with-farts

How does this involve marketing? I'm not sure, but I'm sure it must in some way.

Online marketplace for handmade goods - more sustainable than eBay?

I'm a big fan of the online site Etsy, an eBay-esque marketplace for art and other handmade goods. The site has been growing quickly and has received a fair amount of press lately, most recently for the additional $27 million in funding it just raised:

http://venturebeat.com/2008/01/31/etsy-online-market-for-handmade-goods-funded-fighting-mass-production/

What's admirable about the site is that it creates a low-cost, highly effective way for artists and artisans to sell their work to buyers around the world. It's great for them, but it's also great for their buyers, who now have a means to purchase quality, affordable art from their living rooms (vs. awkward strolls through intimidating art galleries). And it's fun to buy handmade knits from the person who did the knitting - worth paying a premium, even. For these reasons and others, I think it's a great (and overdue) business concept.

There are other reasons, however, that make me think the site's concept is somewhat silly. Mainly, it's founder, and many of its biggest fans, tout it as somehow more "green" and more environmentally (and commercially) sustainable than more traditional shopping, and particularly more so than eBay. “We believe that the world cannot keep consuming the way it does now, and that buying handmade is part of the solution,” says its founder, Rob Kalin.

There's no question that DIY is very in fashion - sales at craft stores like Michael's, and others, actually increased in Q4 of 08. But I don't think buying yarn from Michael's, spending 10 hours turning it into a sweater, and selling it on Etsy... is better for the world than reselling something you already have on eBay. In the long-run, I see Etsy as a fun, artistic, and high-end boutique within a larger online marketplace.

The fine line between targeting and privacy

eMarketer this week announced that 41% of internet users interviewed pay more attention to advertising that is personalized toward them. At the same time, however, the article explains that 57% of those surveyed in a TNS Global and TRUSTe poll indicated they were worried about advertisers using their browsing history to serve them relevant ads. In an industry that expects $1.1B worth of behaviorally targeted ads in 2009, and one of the toughest economies the US has faced in years, what is an advertiser to do?

It is clear that behavioral targeting is the most effective technique to use, so increasing this type of advertising must be the right move right? Not so fast - 41.7% of those surveyed said they would sign up for an online registry to ensure that advertisers are not able to track their browsing behaviors even if it means that they would receive more ads that are less relevant to them! And evidence suggests that these types of lists are very effective. For example, “Indiana Attorney General Steve Carter announced this week that the telephone privacy law is still effective for Hoosiers after seven years. The “Do Not Call” law, which took effect on January 1, 2002, prohibits most telephone solicitors from calling phone numbers on the list. It is estimated that the Do Not Call legislation has stopped a total of 4,352,496,468 telemarketing calls to Indiana consumers from the laws inception to December 31, 2008.” (http://www.fox59.com/pages/landing/?Do-not-call-list-continues-to-prove-effe=1&blockID=177824&feedID=1295” Can advertisers afford to lose 7+ years of reaching these potential target consumers?

But how can advertisers afford NOT to use behavioral targeting during these times of economic crisis when advertising expense has to do more to bring in customers? They can not. Perhaps the best thing to do then is to just continue along the path they are currently following. Use personal advertising, but follow the rules, don’t take unnecessary risks, and generally just tread lightly until more and more internet users realize the value to them of such personalized ads.

Unfortunately either way there is a great risk to advertisers – either risk losing potential customers for the long-term because of aggressive tactics that compromise privacy concerns, or risk not stretching advertising dollars far enough today and as a result not having a long-term to worry about at all. A this point, it seems advertisers will just have to make a bet, and decide which option for them is the lesser of two evils.

De.mail - sending secure email

The German government passed a law that aims to highten security of sending emails. These so called "de.mails" (de for the www extension of German web adresses) are to be used for important email communication like tax declarations, purchase orders, etc. Organizations which will have to pass security requirements are the facilitator through which one can send these secure emails. To send emails one must register at these organizations with identification, similar as in the case of opening a bank account.

The idea is not bad I think, but I am sceptical if this will work. But it is worth a try. This comes not as a surprise and maybe is a bit of a political gimmick, as company's (Telekom, Deutsche Bahn) are under big pressure due to recent scandals for having spyed on employees etc.

Facebook looks for some advertising

Now 5 years old, Facebook is considering selling its users data to companies for marketing purposes. As the most powerful social network with over 150 mln active members, in 170 countries, Facebook is planning to sell the information contained in its incredible database. Companies could acquire specific data on users and develop targeted marketing campaign. Indeed this could be an extremely powerful tool however this opportunity poses some privacy issues.
Facebook is not new to advertising. It actually had struggled with the previous and controversy Bacon advertising campaign of 2007. In that case each time a member bought a book, movie or ticket online, every member of his network was informed automatically. The campaign was then suspended due to serious privacy concerns.
Facebook database, not only is accurate and vast but also extremely updated, since users frequently update profile / status and also gives information on their network.
Furthermore, Facebook plans to introduce engagement ads in the log-in page. Members by signing in will be presented with an ad and the opportunity to “interact” with it. Facebook would then share and introduce the ad also to the user’s friends. Companies will be able to select members, based on the information that Facebook provides on the user, and create instant focus group to test, promote their products and receive real time feedback.
It’s true that as of today Facebook hasn’t been able to monetize its vaste usage; now, still remaining a free platform, it is definitely exploring more opportunities in order to increase advertising revenues.

Video Game Advertising beyond Product Placement

Marketers are utilizing video games to create advertising opportunities that extend beyond standard product placement. As ways to place products in video games has become more sophisticated so have the methods to exploit a video game’s popularity outside the game. Product placement now includes working the advertisers food or drink directly into the game as a means of ’powering up’ the player’s character. Advertisers have realized that opportunities outside the games themselves exist as well, as gamers routinely use the internet to research and discuss their games. Old Spice deodorant created a campaign in which gamers earned prizes by increasing their high scores, then logging on to a website sponsored by Old Spice to claim their prizes.

The Discovery Channel worked in conjunction with the game “Gears of War” to offer two additional levels of the game, downloadable exclusively at their site. This site served to jointly promote the premiere of the Discovery Channel’s new show “Future Weapons.” As spending on gaming continues to grow advertisers will also work to exploit all advertising opportunities in and around the games.

Link: http://www.clickz.com/3628372

Burger King Teams with Comedy Writer for Online Ad Campaign

Burger King has teamed up with the creator of “Family Guy” to create short ads made specifically for the internet. Seth McFarlane, whose prime time cartoon show “Family Guy” is particularly popular with young men, agreed to have the ads precede his new show distributed exclusively by Google.

“Seth McFarlane’s Cavalcade of Comedy” is distributed by Google’s AdSense network, which is particularly effective at targeting specific demographics. This internet marketing campaign represents an innovative combination of relatively new internet options to target Burger King’s target demographic. The three ads are amusing spoofs of well known movie scenes. They precede short comedy clips which are about one to one and a half minutes in length and have the feel of Youtube videos. Burger King is clearly adapting its advertising to the methods by which its customers enjoy media and entertainment on the internet.

Link: http://www.brandrepublic.com/News/839827/Family-Guy-creator-makes-Burger-King-ads-Google-show/

Book Readers Losing Their Bibles

Washington Post’s Book World Goes Out of Print as a Separate Section 
http://www.nytimes.com/2009/01/29/books/29post.html

The New York Times recently reported that the Washington Post will no longer have a separate book review section. "Book World" will make its final showing in print form on February 15, 2009, though it will contine to maintain a separate identity online. That leaves the New York Times's book review section as one of the last in print in the country. 

The Times report suggests that this says a lot about the value people place on literary criticism. I think this says as much if not more about the value people place on news. Subscriptions to every print media have declined rapidly in recent years. People tend to believe that news should be free because its so easily accessible online (and on television). That the WP is getting rid of its book review is simply a cost-cutting measure meant to reduce its financial burdens and alienate the fewest number of readers. They see book readers as a declining breed. 

The WP also seem to understand the value people place on reader reviews (as opposed to those from professional critics)--those posts and ratings regular people add to products on Amazon.com. (I certainly think twice about a purchase when an item's cumulative rating on any site is fewer than four stars.) I don't know if studies have been done, but I imagine reader reviews carry a lot weight among the public, especially as literary criticism can be seen as stodgy, lofty, or out of touch with mainstream tastes. However, what the WP may not realize, is that their loyal subscription base is probably comprised of older readers who continue to place value on the tactile experience of reading a newspaper made of paper. And those same readers were probably very attached to the book review section. Perhaps they consider themselves the so-called "literary elite." They are from an aging generation--the Post's base reader disgusted by advents like Kindle--and, as such, this might not have been the smartest move on the Post's part if it's looking to maintain its dwindling print subscription revenue stream. However, if the WP is transitioning to a predominantly online ad-based revenue model, this cost-cutting measure might not matter in the long run.

 

New York Times opens new API

For all it's brand name inspires, the New York Times has been struggling. If not for an injection of funds from a rich, Mexican investor, they would be shutting up shop in March.

The real challenge that the NYT has been facing, though, is how to deal with the shift to online and mobile media. Today, they announced the launch of an API (http://open.blogs.nytimes.com/2009/02/04/announcing-the-article-search-api/) that will allow other web sites and applications to retrieve articles going all the way back to 1981.

What this allows is a new generation of web-based applications that can utilise the vast resources of the New York Times, in much the same way that the Google Maps API allowed a whole new generation of location-based applications.

The next question will be how they monetise this, if at all? It's great for the upcoming wave of "Web 3.0" (!), but will it effect their business?

Integrated Marketing Approach - SEO, SEM and/or Organic

A recent article in MediaPost discusses the importance of incorporating search in the overall web design process for companies (“How Search Fits Into the Web Site Design Process” (http://www.mediapost.com/publications/?fa=Articles.san&art_aid=99289)). This element may sometimes be overlooked. A great deal of emphasis is placed on SEO and SEM approaches to increase marketing returns; including incorporating natural search in the process i.e. using site language and messaging that is similar to the user’s perception of your product or service. In principle, this makes sense, but an integrated approach may be more advantageous. Thinking about search element in web site design is relevant to increase product/service awareness. However, the best form of marketing that is also most cost effective is viral/buzz marketing; marketing that is organic and does not trap companies on the SEO/SEM bandwagon. Word of mouth publicity can go a long way to attracting potential customers to one’s website. Companies like Netflix have done a great job with this. A lot of its digital/emerging media strategy integrates both online and offline media and most individuals first learn about the Netflix from friends and other users of its movie services. While thinking about access / search in web design is relevant, a holistic approach may reveal greater rewards in the long run.

Doctors using social networks prescribe more

According to a research done by Manhattan Research, a pharmaceutical industry research company,
physicians currently participating in online physician communities presceibe 24 more prescriptions per week than physicians with no interest in online communities. Also, the research shows that the majority of physicians report that they expect pharma to monitor professional community sites and view this monitoring as a positive undertaking.
Given the fact that about 60% of physicians have already been using or interested in using physician online communities, it could be the right time for pharma to look into the marketing and research opportunities offered by this channel.

Google Launches Latitude

Today Google launched software called Latitude, which allows mobile phone users to share their locations with contacts. Latitude is part of Google Maps for Mobile, but also can be used through a gadget loaded onto its iGoogle customized home page. Latitude employs Google's technology to judge a user's location not just by GPS satellite, but also by proximity to mobile phone towers and wireless networks. As many privacy concerns exist with such tracking software, Google specifically requires users to enable the service.

This move by Google, using its mapping technology, shows both (i) an intention to establish a more personal connection with its uers and (ii) a hope that its mapping technology will lead to location-based advertising revenue. As discussed in class, there is large potential in the mobile arena, specifically with mobile-based apps, and Google is clearly looking to capitalize on this market by incorporating some of its preexisting technology. Can Google becoming the leader in this segment, which is already populated by numerous competitors such as BrightKite and Loopt? Only time will tell.

Increase in Demand + Decrease in Budget = Hard Times for Mass Transit

We are all too familiar with the current recession, but have any of us given serious thought to the impact it is having on mass transit? On Tuesday, Senate Republicans rejected adjustments to a bill that would add additional transit funding while transportation agencies have been cutting costs and looking for avenues to raise revenues due to massive budget short falls.

As you can imagine given the current economy and unpredictable gas prices, more Americans than ever are using public transportation. Typically, ridership correlates with gas prices, but currently transit users continue to rise as gas prices fall. Ridership is up 2.6% year over year while gas prices have dropped by nearly half over the past year. Such trends are causing trouble particularly since many cities are considering eliminating routes and reducing transportation frequency in response to budget cuts. Also fare increases of 15% are not uncommon for public transport in many areas to respond to the situation.

This is a problem that I'm sure doesn't make sense for most of us. An increase in public transport is good for the economy as it increases 'green' jobs for Americans, is better for the environment, and is good for energy independence however the funding and revenues are not currently there to support increasing demand.

The problem isn't as simple as just increasing fare rates as many users suggest they can't afford to pay such increases given their low-end jobs. There may not be much money for development initiatives, but public transport is a core function of our economy and this problem needs to be addressed more quickly than not. The following article link is available for further information: http://blog.wired.com/cars/2009/02/tough-times-for.html

Neil Kairen

India plans cheap laptop option - an outlook into the future of mobile computing

Some days ago, India announced that it is planning to produce a low cost laptop intended for use by school children and students (see article). Since the introduction of the One Laptop Per Child's XO machine and the Intel Classmate this is nothing really exciting; new about this pronounced laptop is its price: Originally, the XO was intended to cost $100 but the finished version ended up costing about $188 - the laptop from India is supposed to cost $10. This was later corrected as a typo and some reports talk about a potential misunderstanding as the $10 might not be the production costs, but the sales costs with the difference subsidized.

Whatever the case, the existing One Laptop per Child XO machine for $188 is currently developed towards a lower price and the now so successful Netbooks are already available from below $300. This clearly shows a trend towards ultra low cost laptops, so at one day in the future the $10 will probably be possible. This has at least two effects:

First, a lot more people will be able to afford a computer, get education in using it and will probably go online - all this making the world a better place from a certain perspective – and probably provide the “first world” with some completely new insights as long as the new internet users are capable of writing in English.

Second, in the developed countries, a laptop will become something non-significant like a pocket calculator – some decades ago, a pocket calculator was unthinkable and when the first came out it was a big fuss and only affordable for institutions or individuals who really needed it. Based on this, currently unimaginable ideas come to mind like the disposable laptop (it will certainly be fully bio degradable - at least I hope so ;-), a laptop as a gift from a company at a recruiting event, or whatever (this makes perfectly sense if you store stuff online and view the device as a terminal).

More serious thoughts are: will these still be any printed media as $10 is almost as cheap as an expensive magazine or a typical pocket book? If you take a look at the new Kindle 2, I cannot really imagine there is. If there is also a touch screen, one could even make annotations/ highlights which would it even possible to get rid of school books or course packages.
Maybe you guys have even more interesting idea/implications and make some comments.

In the context of this class, it is even more interesting to think about new possibilities of marketing: if the system knows what you are reading, what you have purchased, it may offer very precise recommendations for stuff that might interest the owner. So the "Amazon recommendations" would be everywhere.

Online marketing of luxury brands - still unsolved question?

When was the last time you have seen an online ad or any other online campaign for a real luxury brands? Luxury brands used to stay a way from any thing that looked like the web - for them; it was too common, too vulgar. However, in the last months we are starting to see the penetration of these brands to the online marketing world. There are 3 main drivers to this process:

1. More sophisticated tools and solutions

• Web technologies - AJAX, new versions of Flash and other innovations in web technologies make it possible to design and implement "luxury look and feel". Brands and companies feel more comfortable to use the medium as a direct sales channel (examples: www.louisvuitton.com, www.coach.com) although most of them will still use it as an online catalog (and by doing so are losing one of the most effective sales channels).
• Online media becoming richer and more sophisticated - the new technologies and mostly high-resolution video content enables to create a better branded, good looking content
• Social networks and communities - context is one of the most important factors in marketing. Viral online campaigns that use social networks to track and utilize relationship of a well segmented audience, is the perfect solution for luxury brands threatened by the huge amount of online spam.

2. Preferences of customers

• Age - The current potential customers were raised along side with the web and are managing many aspects of their life using the web. For this audience, the lack of a substantial online presence is hurting the brand.
• Demographics - by their very nature, luxury brands customers spend an increasing amount of time connected to the web and are looking to converge many of their activities into this media to save time and increase efficiency.

3. Economics

• Direct online selling and online marketing are a cost effective media/channel
• Global reach
• Online marketing (done properly) can enhance the brand and add a "cooler" "younger" "more current" aspect to the marketing effort

In the next few years, we are expected to see a lot of activity in this space. Brands with online presence will move into e-commerce and more advanced brands that already

use the direct sales channel will become sophisticated users of the most advanced online marketing methods.

(Benchmark: Luxury Sector eBusiness Adoption, Victoria Bracewell Lewis, Forrester report, June 2 2008)

As usual, the brave brands that were not afraid to try to capture this space early on will be better positioned to capitalize on the opportunities and enjoy the substantial growth in this space.

NYT to charge for content (again)?

Bloomberg has an interesting short article discussing how the NYT is considering charging for content: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=at4KmZvYijEM

This article is an appropriate follow up the next post about Chris Anderson's WSJ article.

The NYT is in a tough position considering it has been offering its content for free for so long, plus it has already tried charging for content before with TimesSelect - which did not work out well and it was canceled. However, NYT.com is also very heavily ad dependent and the NYT is facing more and more challenges.

The NYT makes a comparison to The WSJ and the FT:

“The lesson of that experiment, however, was not that readers won’t pay for content,” he said, pointing out that News Corp.’s Wall Street Journal and the Financial Times have paid- subscription Web sites.

In addition to those always having some paid component, they are also different type of publications - business/financial 'newspapers.' Plus, my guess is a some percentage of those online subscriptions are paid by corporations/businesses. See FT/Blackstone article as an interesting side note: http://www.observer.com/2009/o2/steve-schwarzmans-blackstone-group-sued-user-accounts

Something else to consider is, is The New York Times product unique enough for enough consumers to pay - or would consumers be able to go elsewhere/competitors move in - Washington Post for Political News, NY Post/Daily News/Local TV news websites for local News, etc...

Play with Muji

Muji (無印良品) is a Japanese retail company which sells a wide variety of household and consumer goods. Muji is distinguished by its design minimalism, emphasizes on recycling, avoidance of waste in production and packaging and no-logo or ''no-brand'' policy. In 2009, Muji introduced all its products line on-line through The PlayMuji Calendar. The calendar displays a different product everyday with a short video that shows how to use it and provides a close look at its details. You could use this site to discover new product ideas( Muji has tons of original ideas and they are practical) or simply learn how does Muji makes your life easier. A screensaver is offered to downloaded to retrieve the site.

I like Muji very much. I have a lot of their products and I used to collect their catalogues every season. They simply offer inspiration of lives, makes trivia less daunting, and smartly solve the problem. The PlayMuji site plays the function of catalogues. It is well-designed and in line with Muji Brand. Moreover, the idea of making Muji products part of your lives seems very convincing through online demonstration because people easily grasp their product solutions. You can even envision you're using any of the product and feel inspired. This also break the barrier of language. Through visualization, everybody can understand it without further explanation. 

The last but not the least thing is that you can find a link to the online store that allows you to purchase. This site works smoothly to combine brand communication with e-commerce and leaves a pleasant experience whether you make the transaction or not. But I am sure you will put Muji on your top list in next shopping. 

Music Meets the Digital Age

In the digital age, how can the music industry and content providers develop a reasonable copyright approach to satisfy the needs of the public? It may be easier to craft a digitally friendly approach to protecting content for creators while taking advantage of the web's massive distribution network.

Some have considered the idea of an internet tax payable by every web connection that would cover all copyrighted material online. Content owners would register with a centralized copyright database and users could then download anything they like.

Many questions exist around the feasibility of such an approach. First off, where would such a system of online content become the standard? Should such a system be held nationally or at the global level? Though the vast majority of music content is downloaded illeaglly in most nations, is it fair to really impose a flat tax when not all internet users download music or video content? An article referencing this topic can be found at: http://www.paidcontent.org/entry/419-isle-of-man-charging-1-per-month-for-unlimited-music.

If a flat tax isn't the solution, perhaps content owners provide a flat internet license to a designated web copyright service for the entire WWW. Web based content providers will then need to pay a flat (or tiered) fee to access such content, which they can potentially collect back from customers at a truly minimal price.

Clearly the issue is more complex than this blog can solve, but it is good to know there are some creative options being considered.

Neil Kairen

Would you pay for Facebook?

More and more press has been garnered upon Facebook in recent days. Will they follow myspace’s lead in capitulating and placing ads all over your ‘page’? So far they’ve purposely circumvented this strategy, instead asking their investors to be patient while they try to find a ‘real’ business model. But if it’s not going to be advertising, what is it? Is Facebook’s stalling tactic just an admission that their CPMs really stink (around a dollar compared to premium properties like CNN or The Times that rake in upwards of $20) and that advertising on social networking will never really get them there? And though it’s lured users, Facebook hasn’t been able to monetize even when people are using it’s site, something this article talks a lot about.

Let’s do the math – with 1 of 5 users WW (yes!) on Facebook, they are growing at a insane pace, having just eclipsed 200M uniques according to ComScore. What if they were to charge, say, $9.95 for a YEAR access to their service, would you pay? In revenue terms, $10 x 200M would net them $2B in annual sales. Not bad considering they are supposed to do about $350M revenue this year from advertising and other means (btw MySpace will do about $1B in 2009 sales despite having half the user base).

So…. Would you pay? Or would you shut down your account? As we’ve come accustom to from the Google Generation, and as this wsj article The Economics of Giving It Away nicely summarizes, the internet has been the land of the free.

Click Forensics

I was thinking on Click Fraud and how advertisers can protect themselves from malicious clicks (orquestrated by "pirate" looking individuals :) ) on PPC ads and found Click Forensics a company which provides services to monitor ad campaigns for click fraud. Basically they offer traffic quality management, which comprises all efforts to improve the return on online advertising.

They achieve this through a Traffic Quality Engine. The engine analyzes PPC traffic data with sophisticated heuristics to score the relative merits of online traffic. Data mining techniques are applied to click behavior to identify markers and determine relative merit of every click, every visitor, and every site. The large number of heuristics employed examine three main categories of data:

• Attributes: technical and economic attributes of every click include IP address, proxy server traffic, bot characteristics, originating location, HTTP header characteristics, visitor profile characteristics and cost-per-click.
  


• Behavioral: click-through behavior such as visit depth, time on site, viewing patterns, and time between clicks.
  


• Community: comparative data is available across a community of advertisers, networks, and publishers for correlation, validation, and continuous improvement to the algorithms.

(For more information on this you can visit http://www.clickforensics.com/)

Looking through information on click fraud I found that it rose to 17.1 percent, up from 16 percent in the third quarter of 2008 and from 16.6 percent in 2007's fourth quarter, according to Click Forensics' quarterly report. According to the report Click Fraud spikes during the holiday shopping season but the results for 2008 4th Quarter were an all time high. A big factor in the fourth quarter's increase was the continued rise in the use of botnets. In the fourth quarter, botnets generated 31.4 percent of click fraud traffic, up from 27.6 percent in the third quarter and from 22 percent in 2007's fourth quarter. Another factor boosting click fraud is the global economic crisis, which has caused a spike in crime and cybercrime of all sorts.

Industry Click Fraud Rate Higher Than Ever Reaching 17.1% in Q4 2008 on Click Forensics

(http://www.clickforensics.com/newsroom/press-releases/120-click-fraud-index.html)

The increase in Click Fraud is alarming and it is a pity that besides investing on online advertising you have to pay to get protected from click fraud in order to guarantee higher results from your investment. Unfortunately although this seems like a good solution people who actually work on employing click fraud tactics will continuously find new ways of doing so. While I was searching for information on click fraud I actually got some ads on where to obtain click fraud which is definitely a concern!!

Is the VC Model Broken? By Pete Henderson

Columbia's Private Equity and Venture Capital Club had their conference last Friday. One of the Venture Capital panels addressed the question "Is the Venture Capital Model Broken?" The panel was comprised of one angel investor, 2 mid-stage venture capital firms and one growth equity firm. Each of the firms invests primarily in IT technology firms such as the internet and software companies that have been discussed in our class.

While the participants disagreed on whether the model is broken, they did agree that the returns from funds originated during the 2001 - 2004 time frames have underperformed. One theory for the lower returns was that the economic downturn cut the exit window prematurely short. While this makes sense, a more interesting alternative was also presented that theorized that the IT technology in general is further along the maturity model and thus the growth equity stage represents and captures the best value.

Lastly, one of the participants, a well respected and famous individual in the vc world, did say that the model is fundamentally broken. The video of the panel with his thoughts will be posted on the Columbia PEVC website.

The Inauguration Will Be Televised — and Tweeted and Flickr’d

The Inauguration Will Be Televised — and Tweeted and Flickr’d

By JENNA WORTHAM

Barack Obama’s inauguration will be televised. It will also be tweeted, live-streamed and simulated in virtual worlds.

This bodes well for those eager to participate in Tuesday’s festivities without risking frostbite or braving the troubling ratio of porta-potties available for the millions of political partygoers expected to descend on the nation’s capital.

Here at Bits, we’ve compiled a list of some of the inaugural happenings around the Web. Let us know which events we missed in the comments below.

Live Streams: The New York Times will be live-streaming Mr. Obama’s speech from its home page; video Web sites Hulu and Joost are among the other sites broadcasting Tuesday’s events.

Live Tweeting: Similar to its coverage of the presidential debates, Current TV is joining with the microblogging site Twitter to showcase inaugural day musings from the Twitter universe, in 140 characters or less. Beginning at 11:30 a.m. E.S.T., the indie media company will handpick selected messages, or “tweets,” and integrate the updates into the channel’s broadcast. To prevent network blackouts, Twitter’s chief executive, Biz Stone, told The Times that the company is doubling its capacity to gear up for the event.

Flickr: The photo-sharing social network, owned by Yahoo, will be hosting a respite from the packed event at a nearby wine bar. Local and visiting Flickeristas can drop in for a coffee or a glass of wine and check out photographs from election night alongside recently snapped images from the induction ceremony displayed in an exhibition of digital frames.

3-D Panorama: Microsoft is joining with CNN to release a digital panorama of the event using Photosynth, software that morphs a series of photographs into a digital, 3-D panorama. The company is soliciting professional photographs from news outlets as well as user-generated content, snapped from cellphones and digital cameras, for the final product.

DIY Inaugural Balls: Still waiting for an invite to one of Washington’s lavish parties to celebrate the new president? On the off-chance you don’t make it onto a V.I.P. list, you can still attend a party online. Gussy up your avatars and port them into one of the balls happening in Second Life and Wee World. If virtual alter egos aren’t your thing, try your luck finding a nearby shindig using the official Presidential Inaugural Committee’s handy Web tool.

Mobile Applications: UStream.tv, a streaming video site that lets anyone put up a broadcast, like the wriggling brood of Shiba Inu puppies that made headlines late last year. The company recently unveiled plans for an iPhone application that will port any of its streaming broadcasts to the Apple device -– including the inauguration. The service also supplements live streams with a chat function so Ustreamers can chit-chat during the festivities.

In the event that you are traveling to the nation’s capital for the event, the free 2009 Presidential Inauguration Guide iPhone application is a must-have for out-of-towners. The application serves up public transit schedules and details, locations of parking garages, free Wi-Fi zones and a Zagat guide for the Washington area. The nifty application will also map the current distance between the phone’s owner and the steps of the Capitol building.

For full article: http://bits.blogs.nytimes.com/2009/01/19/the-inauguration-will-be-televised-and-twittered-streamed-flickrd/

Where are all the Google Competitors?

Ben had an interesting post about Google's continued dominance of the search market. With Google grabbing 90% share of all growth volume how are the nearest competitors doing? Yahoo is losing share and Microsoft has gained a moderate amount of share (Microsoft Live Search is now at about 8.5% market share).

My question is: Where are all the Google competitors? Has Google search become so omnipotent that competitors have stopped trying? Many believe the key to search success is ever present search (search where you want it when you want it). With Android, Google is beginning to make strides in the phone search market, however how can phone manufacturers and their OS makers stand by and let this happen? To me the larger market players (RIM, Apple, and Windows Mobile) are in the perfect position to stall Google in the mobile search market by embedding search in the phone operating systems in a more integrated way. As it stands now, mobile search and the web browsing experience has typically been a development afterthought but a mobile experience built from the ground up on a web based platform has the the potential to stop Google dead in its tracks.

The same goes for the PC web browsing and search experience. As it stands now, web search on the PC is again largely an add-on experience. MSFT is in perfect position, to make the web search experience a more of a natural part of the PC (and even platform gaming) experience. Ahh but here's the rub... the words bundling and integrated experience makes Microsoft very weary because everytime those words are brought up, memories of anti-trust suits come racing back. So while Microsoft is well positioned from a multi-platform perpective, their history in tech competition makes these types of cross platform initiatives challenging. Has the Justice department inadvertently inhibited competition in the search space? Given Google's reach into the phone hardware and PC browser space will the Justice department ever come knocking?

Ok so maybe given all its problems maybe Microsoft will never catch up? Anyone else? Hey.... ten years ago everyone thought AltaVista was the end all be all of search.

Brand.net offers blind ad sales

I thought this article was interesting after our discussion last week about advertisers' sensitivity to where their ads are placed and their reluctance to advertise on sites with high levels of user generated content such as YouTube. This article from AdAge descirbes now Brand.net is taking advantage of the weak economy to sell excess online ad inventory to companies - without telling them where their ads will appear: http://adage.com/digital/article?article_id=134243

"The idea behind Brand.net, launched by a couple of ex-Yahoo execs, is that a publisher will give an online ad network high-quality inventory only when it's clear the network won't tell advertisers that the publisher is part of the network. That means advertisers don't know for sure but have to trust that they're buying quality, premium sites; even the network's salespeople aren't quite sure what sites are being used in each campaign they sell.
It's the only way to get premium publishers comfortable using networks again, especially as a worsening economy and increase in supply leads more top inventory to go unsold, said Brand.net CEO Elizabeth Blair. "

Although Brand.net doesn't tell advertisers the exact sites where their ads will appear, it does give them some information about the level of user generated content on the site and allows them to choose the level they feel most comfortable with:

"Advertisers, of course, need some information on where their ads are running and that the inventory is safe -- that the ads won't be next to videos of bloody street fights or comments laced with vulgarities. To address that, advertisers get a list of top ComScore sites in genre-based buckets. Brand.net does not say it has buying relationships with any publishers on the list -- only that the buy will include "sites like these." It has also launched a grading system, based on how the site content is organized, where the user-generated content is and whether it's moderated. A site with only professionally created content gets an A ("most safe"), while a site with moderated comments gets a C. A site with highly dynamic or un-moderated forums gets an E ("most potential for some crazy UGC to surface"). "

It will be interesting to see if advertisers' tolerance for risk increases as the economic downturn continues, and whether blind ads become a more popular tactic for mainstream companies who are more concerned about cost than targeting their ads to specific sites.

Facebook's Plan to Amp Up Ad Revenue

An interesting article that was published today at AdvertisingAge by Michael Learmonth:

NEW YORK (AdAge.com) --
Think Facebook's 15 minutes are just about up? Well, one in five web users in the world is saying otherwise. Facebook lured 222 million unique visitors in December, according to ComScore, twice as many as MySpace, and it has been growing at a more than 10% rate each month since September.

Until now, Facebook has focused on growth at the expense of advertising, much like YouTube circa 2007. MySpace, on the other hand, wasn't born in a Harvard dorm room and is run like a profit center for Rupert Murdoch, one reason it's expected to book around $1 billion in ad revenue in 2008, compared with Facebook's estimated $300 million.
Jeff Berman, MySpace's president-ad sales and marketing, said the social network is competing for portal dollars, seven-figure ad budgets often splashed on home-page takeovers and banners.
Don't expect Facebook to follow suit. "Lots of companies our size have decided somewhere along the line that they'll turn on the monetization and slap banners up," said Facebook VP-Sales Mike Murphy. "That's not what we're trying to do."

The joke around Facebook is that it is run like a nonprofit. Indeed, for a site its size, it has remained remarkably free of overt commercial activity. Last fall, Facebook began trying to dial up the ads with a new generation of units it calls "engagement ads."
But as it tries to scale as an advertising business, the irony is that marketers can leverage the platform without actually paying for it. Take, for example, Burger King's "Whopper Sacrifice" application, which allowed users to un-friend 10 friends for a free Whopper. The application resulted in plenty of press and more than 230,000 dumped friends, but Facebook earned no revenue from it. Ultimately, Facebook disabled the notification feature, which it deemed too intrusive, and the application was shut down.

The CNN integration with Facebook Connect, which allows users to export their profiles and
connections to other sites, was a huge success for the network, resulting in more than 2 million
comments during the inauguration of President Barack Obama, but it, too, was not a revenue generator for Facebook.

The promise of Facebook as a marketing platform is to get woven into the conversations taking place there, with ads that act as a "Trojan horse into the news feed," said Deep Focus CEO Ian Schafer. The conundrum is that marketers can do that without buying any advertising on Facebook. Any brand, like any person, can develop an application for Facebook, or use Facebook Connect. Facebook's "engagement ads" are about directing users to pages or applications with activities that trigger an action that is broadcast through the users' news feed.
Facebook has rolled out four of these so far, allowing marketers to create events (to which users can RSVP), comment on a video such as a movie premiere, become a fan and send virtual gifts.
A fifth type of ad The New York Times tried the virtual gift by allowing users to send an image of its "Obama" issue the day after the election. More than 220,000 gifts were sent, and the newspaper's "fans" tripled to 160,000.

Sony Pictures tested the commenting feature for a clip for "Rent" to see if a roadblock would increase awareness of the film in a given city. And it did, doubling awareness among Facebook users. On deck is a fifth type of ad that will allow marketers to conduct a poll within an ad, tested last week by CareerBuilder to build awareness for this year's Super Bowl spot. Those who respond to the poll get to see the results, as well as whether any of their friends have voted.
Marketers can use Facebook free, just as they can create a channel and upload videos on YouTube free, but Robson Grieve, managing director of independent agency Creature, said as the service grows, a media buy is essential to make a campaign scale. "In the same way people are putting up videos and getting lucky on YouTube, you can get lucky on Facebook, but there is so much content that fewer and fewer people are going to get lucky," he said.

At this point, the results of the first round of engagement-ad campaigns are starting to trickle in, and marketers will be scrutinizing them for results. MediaVest VP Mohan Renganathan said he thinks Facebook is headed in the right direction but sees at least two challenges for engagement ads in a down market: First, experimental budgets are being cut, and second, marketers are focusing less on brand building and more on survival. "If they shift toward short-term sales instead of awareness or engagement, Facebook might be a mismatch," he said.
Or, rather than paying for an engagement ad, they might shift dollars to low-CPM banners sold on the site through a deal with Microsoft.
Facebook is staffing up its ad-sales force around the globe, but if its efforts still seem nascent, it's worth noting that Facebook was invented as a communications tool and platform for applications, not for advertising.
"What you see now is the beginning of our thinking of how we can do this in a meaningful way," Mr. Murphy said. "We're pretty sure we're on to something."

Those Who Post

I am curious about the psychology of the person who posts online--that fellow who feels compelled to comment on whatever he's read, on whatever Web site. And then there's me--the individual fascinated by the comments of others, who finds the ramblings of the readers often more entertaining than the article (or video) itself. 

Reading posts allows me to think I've being given some sort of insight into the psyche of persons attracted to that content. For instance, when I read Tmz.com, or Perezhilton.com, I expect to encounter lots of "First!" posts and individuals cursing at the site hosts, insisting that the content they post is idiotic, and that they need to get real lives. On reputable new sites, I generally encouter readers with a bit more wit, just as much passion, and just as much venom delivered in slightly less confrontational ways. On YouTube, every string of posts seems eventually to devolve into race-baiting, wherein dissenters and sometimes sympathetic posters are given instructions as to how to perform various unspeakable acts on their relatives, most commonly their mothers. Is that person more likely to post wherever he or she ends up in cyberspace? Are your more likely to post if you're angry and bitter than it you're content and sane?

Would anyone care to chime/weigh in on who he/she thinks is most commonly compelled to post? I will admit, I've written a thing or two here and there, just to have my say or dispute some ridiculous, excessively destructive and mean-spirited, unwarranted comment. Yet I always post anonymously. Does that make me a coward, unable to stand behind my own admissions, hiding behind a computer screen that doesn't force me to reflect upon my own image?

If I set this up correctly, my screen name on this site should be a pseudonym as well. Perhaps I'm comforted by the fact that, as the Internet gathers and stores more information about me than I could possible process in a lifetime, unearthing and reintroducing embarassing facts that I thought time had extinguished and erased from public consciousness and history, I have a little anonymity, a little mystery left. That is, until the host of this site decides to give me up to NBC for watching their copyrighted material on sites from China because NBC took down their first-run shows' streaming video prematurely to force people to purchase DVDs. 

Will Joost on iPhone be the nirvana of Mobile TV

For many years, mobile telecommunication operators have been pushing mobile TV to 3G mobiles. Unfortunately for them, there has been a lot less support among consumers to watch video on those small screens.
Many issues were identified with Mobile TV, that prevented widespread adoption:
* Relatively expensive - typical from 50c to a few dollars to watch anything from one TV show, through to a monthly subscription.
* Poor 3G coverage - Particularly prevalent in the US (although an issue in most parts of the world), poor quality mobile broadband networks led to video stuttering or stopping mid-stream.
* Poor selection of content
* Content was not tailored to support the "mobile context" - ie: I'm on the bus and want to watch a cut down version of my favourite show from last night, etc...

Joost recently announced that their iPhone application had been installed more than 1 million times (http://mashable.com/2009/01/30/at-least-joost-is-doing-well-on-the-iphone/). This would indicate that it is now accessible to a large proportion of people. However, if we look at the issues above, how many does Joost address:
* Relatively expensive - check - the Joost app is Free
* Poor 3G coverage - the Joost app is prone to the same issues
* Poor selection of content - while broader than most mobile operator's catalogues, the Joost selection is still somewhat smaller than competitor, Hulu
* Content not tailored for the "mobile context" - Joost is simply streaming its desktop content to the iPhone

It appears that Joost doesn't really address 3 of the 4 issues that's limiting Mobile TV to take off. I find it hard to believe that users will forego these issues, if the application is free.

Maybe Joost isn't the nirvana of Mobile TV!

Online Retailing at What Cost?

While I do find the development of monetization models for online marketing infinitely fascinating, I am very concerned for the the prospects of brick-and-mortar retailers in this new age. The Long Tail would have you believe that niche markets have found renewed life unconfined by the "tyranny of physical space", just as Google would likely claim that they are radically decreasing the barriers of competition for the "little guys" with CPC services like AdSense. However, many of the tech developments we are studying imply a degree of consolidation across several industries that could very well destroy the small commercial centers across the country. Put in the context of the current economic crisis, I feel like this is a really big deal.

I would love to see more online marketing tools that have the potential to strengthen the health of our cities by driving traffic there and, where appropriate, reinforcing that sometimes there is no substitute for an authentic experience (shoutout Walter Benjamin, Jane Jacobs, and Guy Debord!). I know, of course, that this presents the problem of not being able to track the effectiveness of the online tools used, but I would like to believe this is what is coming!

Google Ocean

For the first time, the mysteries of the ocean are revealed. The ubiquitous, but nonetheless admirable, Google is about to release vast amount of underwater imagery and seabed map as part of Google Earth.
Unless you were living on the moon over the last four years, you probably have used Google Earth to explore aerial photography, or three-dimensional maps of cities around the world.
Now you will be able to explore the largely unknown underwater world with this new addition that Google is expected to announce in a high-profile event in San Francisco.
People using these additions will get a better understanding of the effect of climate change on the oceans and will be able to discover fascinating parts of the globe. Only 10% of the sea floor has been mapped so far. As the professor of geophysics at the Scripps Institute of Oceanography, at the University of San Diego David Sandwell explains: "There are big voids everywhere, but there are a few little spots where we know quiet a lot". Google Earth users will be able to interact with the maps and get a better sense of the large parts of the planet that are still unknown to the scientists.

From a business point of view, Google is using its well-known strategy of making people use its products, and finding ways to monetize its applications on a second stage. It seems that this strategy has been successful so far, Google being the most profitable internet company in the world.

But beyond the revenue it can generate, these new additions will open new horizons for users and increase their understanding of global warming issues, and that's great news. I can't wait to see it!

For more information:
http://www.guardian.co.uk/technology/2009/feb/01/google-earth-oceans-project

Ido

The Death of Facebook

One of my favorite dot-com implosions was Third Voice, which was named one of 1999's hottest companies by Red Herring magazine. It was basically a browser plug-in which allowed users to place comments on any website. With no mechanism through which comments could be vetted, the result was basically "digital graffiti". Salon commented:

The AOL home page boasts a chorus of notes with the common sentiment that "AOL Sux!" And at Netscape's front door you'll find notes like that of "MrDwight," who feels that Third Voice is the perfect forum to tell you that "Jesus is the only Eternal Life Insurance Policy that gives you true Peace on Earth, Righteousness in your thinking, and Joy in your attitude."

What lessons can we learn here? One is that the vast majority of user-generated content is not very compelling, to say to least. This is less of a problem for sites like YouTube, which enjoy massive amounts of traffic and determine what content is worthwhile using measures of popularity. But for sites like Facebook, where posted information is only relevant to a handful of people, the effect may be fatal. The Economist notes:

Unlike other networks, social networks lose value once they go beyond a certain size. “The value of a social network is defined not only by who's on it, but by who's excluded,” says Paul Saffo, a Silicon Valley forecaster. Already, social networks such as “aSmallWorld”, an exclusive site for the rich and famous, are proliferating. Such networks recognise that people want to hobnob with a chosen few, not to be spammed by random friend-requests. This suggests that the future of social networking will not be one big social graph but instead myriad small communities on the internet to replicate the millions that exist offline.

I met a friend for coffee today, and she complained that her extended family keeps pestering her with unwanted messages and invitations on Facebook. I'm betting she will quit the site within a year or two. Whether this becomes a real trend depends on how well Facebook can divine and respect the preferences of its users. The Burger King "Whopper Sacrifice" (thanks Kelly) may just mark the beginning of the end.

Google users get bogus warning on site searches

On Saturday, Jan 31, between 6:30 and 7:25 am, anyone who did a Google search during that time likely saw the message "This site may harm your computer" accompanying every search result, Google said in an explanation on its company blog. The incident was caused by human technical error. During these 55 minutes, Google users were directed to StopBadware.org, a nonprofit project headed by legal scholars at Harvard and Oxford universities who research consumer complaints. A London newspaper estimated that this glitch has costed Google 2-3 million of advertising income.

Google has been somewhat deified by users around the world. With so many depend on Google as the main if not only information source, we have to remember to question validity of the information we get online. This incident also shows the interdependence of the whole internet ecosystem. Even search giant Google needs to cooperate with niche players like StopBadWare.com to improve its products.

Sources: http://www.mercurynews.com/news/ci_11599839?nclick_check=1 and http://mag.udn.com/mag/digital/storypage.jsp?f_MAIN_ID=319&f_SUB_ID=2941&f_ART_ID=174812

The Rise of the Internet as a Marketing Tool

On Saturday, January 30, CBS hosted its annual Private Equity and Venture Capital Conference. The morning keynote address was delivered by Bob Pittman, Founder of Pilot Group LLC, a consumer brand focused private investment firm, and former-COO of AOL Time Warner. His address centered around how businesses, in this difficult economy, can survive by reconnecting with their consumers. He explained that consumers are 'brand buyers' and 'convenience is King.'

Mr. Pittman went on to point out that the U.S. consumer tends to have two boxes in the home, an 'Entertain/Inform Me' box (the TV) and a 'Manage My Life' box (the personal computer). The television is a public resource, shared by all in the home, and requires passive interaction. On the other hand, the computer is a private resource, requiring active participation. The boxes are quite different in terms of how they touch the consumer and, in many ways, do not compete. Mr. Pittman believes that convergence may occur, but that we will continue to have two boxes in the foreseeable future.

The computer has brought much more convenience to our lives which, in turn, has prompted business to develop the internet into a prime marketing channel. Concurrently, American consumers no longer 'comparison shop,' preferring the security of buying well-known brands. With the rise of the internet channel and the ongoing development of brands, we have seen increasing attention on the part of marketers to the internet.

Some posit that marketers are increasing ad spend on the internet channel by decreasing their outlay on television ads. Mr. Pittman debunked this theory, arguing instead that the additional spend on internet marketing is coming from newspaper budgets. In fact, he cited the internet as the biggest threat to the newspaper business model, which has traditionally relied on revenue from classified ads for its profitability. In contrast to newspapers, he said the internet allows companies to stay in constant contact with their customers (for example, car owners now receive regular service reminders and model updates by e-mail). Television ad spend, on the other hand, remains robust, since it touches the consumer through the 'Entertain/Inform Me' box.

The switch from newspapers to online marketing is a gradual one, however. On a relative basis, looking at budget $ / consumer interaction time, there is still much more money spent on newspapers versus internet. Mr. Pittman blames this on stasis and expects this to change over time, with internet taking a much higher share in the future and perhaps even reaching par with television.

W.Denton

Google's continued dominance of search advertising

Google continues to maintain its dominating position as the leader in the lucrative search advertising space.  Google ended 2008 with a 63.5% share of search advertising, up 5% from 2007 - according to Comscore. 

More impressive, Google's relative performance compared to its peers is staggering.  Approximately 90% of all growth in search volume was captured by Google.  This chart clearly shows Google's dominating relative performace as all of its competitors essentially experienced flat growth.

Of course, none of this should come as much of a surprise.  Google enjoys strong competitive advantages in regards to its proprietary technology (i.e. it's results are simply better than other search engines) and customer captivity (Google is now essentially synonymous with search). Importantly, as more people use Google's engine, its search results improve even more as the search technology *learns* from the actions of users.  

Taken together, advertisers are wise to channel ad-spend towards the engine used (almost ubiquitously) by consumers.  

The mighty Google takes a spill

Google's Internet search service malfunctioned for nearly 55 minutes Saturday morning, upending users around the world with search results that carried false safety warnings and Web links that did not work.

Wow, a whole hour without Google. And yet the earth continued to turn? Just how important is Google?

There was a great piece in the NY Times Magazine a few months back about the power that Google maintains in foreign countries as it pertains to censorship. It also discussed how items are flagged as inappropriate on YouTube.

Over the past couple of years, Google and its various applications have been blocked, to different degrees, by 24 countries. Blogger is blocked in Pakistan, for example, and Orkut in Saudi Arabia.

Google has

enormous control over a platform of all the world’s data, and everything they do is designed to improve their control of the underlying data.

All this talk about regulating the banks.. what about regulating Google?

The most powerful and protean of these Internet gatekeepers is, of course, Google. With control of 63% of the world’s Internet searches, as well as ownership of YouTube, Google has enormous influence over who can find an audience on the Web around the world.

Super Bowl Ads Migrate Online

Today is Super Bowl Sunday, and as someone who previously worked in the advertising industry, this day is just as important for brands and their agencies as it is to the NFL and the teams themselves. Since the 1984 Apple spot premiered during this same broadcast, the Super Bowl has been the launch pad for new spots for iconic brands such as Pepsi, Budweiser, Fed Ex, and more. This week, however, the Epicenter blog at Wired.com addresses the growing trend of placing "Super Bowl ads" online. As author Chris Snyder writes, "Some of America's biggest brands are experimenting with viral ads, user-generated ads, online remixes, and web-only versions that are too hot for TV." The article cites Doritos, which is launching an ad online that consists purely of user-generated content. In fact, I have an old high school friend who entered the Doritos contest and was urging us to vote for her ad through Facebook.

The question is, why might major brands, who have major budgets to match, explore less-tested media formats online vs. running their traditional television spot? In my opinion there are several reasons. First, from a business standpoint, the cost of running a "Super Bowl" spot online to accompany a spot on TV is a huge money saver. Instead of running 3 or 4 $3MM 30-second spots during the broadcast, a brand like Doritos can run one $3MM spot and refer viewers to expand their experience online, a medium that is significantly cheaper. Second is the opportunity to increase viewership of the ads after the actual Super Bowl broadcast - the free press effect. Having spots online, whether agency or user created, means that viewers can send the spots to friends, post them on Facebook pages, etc, ultimately extending the reach of the spot beyond the day after the game. Finally, there is a creative benefit to online content. As the article cites, some brands use the web to promote ads that would not be approved by network censors. Agencies can go a little bit further with the concept of their ad, which ultimately creates more buzz when launched, gets more PR attention for the brand, and hopefully for that brand, improves all the right recall metrics.

I do not think that online ads will ever usurp the status of the Super Bowl ad. Rather, I expect that they will become part of a more integrated Super Bowl campaign that combines the television spot with various forms of online media to better extend the reach and duration of that original spot. Probably one of the better examples of this so far is Etrade, also mentioned in the article, who is airing outtakes of their Super Bowl spot online. It will be interesting to see how this integration evolves as broadband further penetrates American homes, allowing these intricate web productions to reach more and more people.

- Jennifer Rogers

Interesting Search Addition to IE8

Microsoft has added an interesting new search feature to Internet Explorer 8 that appears to target the SEO search market. According to http://www.bigmouthmedia.com/live/articles/just-how-well-do-the-popular-search-blogs-cope-wit.asp/5565/ the new browser has a feature that:

"One of Internet Explorer 8's new features is a button that suggests the related sites to visitors. This button makes use of browser history and related suggestions from Microsoft. The button aims to help users discover a wider range of sites and Microsoft may well be hoping that internet users turn to it for content discovery rather than returning to Google for another search.:

I know there are Google and Yahoo! toolbars, but if Microsoft can show that a browser, without any toolbars (the initial download), is a viable engine for conducting/pushing/helping consumers locate items/sites, then the idea of websites search engine portals (Google, Yahoo, MSN, etc) may have a significant competitor. This may be in response to Google's Chrome and Google's own thinking that searches will be done by the browser and not just through portal/search website. It's interesting to see the browser becoming the competition for the SEO market as opposed to new types of websites.

I think Microsoft has a name brand advantage, according to http://www.w3schools.com/browsers/browsers_stats.asp, the following browsers are used:

Browser Statistics Month by Month

2008	IE7	IE6	Chrome	Fx	Moz	S	O
December	26.1%	19.6%	3.6%	44.4%		2.7%	2.4%
November	26.6%	20.0%	3.1%	44.2%		2.7%	2.3%
October	26.9%	20.2%	3.0%	44.0%		2.8%	2.2%
September	26.3%	22.3%	3.1%	42.6%		2.7%	2.0%

Therefore, if IE7 and IE6 (which like Firefox have approx. 45% of the market), users simply upgrade, then Microsoft could command, with it's built in browser-search optimization/history feature, the searches of nearly 45% of the Internet. I think this is a larger than real number, but it does highlight the potential strength a browser could have on searches.

I also don't think any of this will happen overnight, but I do believe marketers may get some interesting new marketing tools that will optimize marketing plans by using browsers instead of SEO through sites such as Google. MediaPosts.com's Laurie Sullivan adds that the writer of the blog, Andrew Girdwood:

"Another question centers on whether a new feature in IE8 would enable searchers to bypass the Google search engine and go straight to suggested related sites. Girdwood explains a new feature in IE8 offers a button suggesting to visitors sites related to the one they landed on. "Microsoft may well be hoping that Internet users turn to it for content discovery rather than returning to Google for another search," he writes. Think of the consequence that could have on pay-per-click campaigns."