A Brand New Internet . . . opens a can of worms

The NYTimes has an article this week about whether or not we need to build a new internet. The internet was built based on a very narrow view of its use with a decentralized structure. The internet today far outstrips any ideas its first developers had. Over time we have patched and stretched the structure of the web to do what we want it to do but this has very real limitations. While many of the issues a new internet would resolve are about security the tradeoff brings up issues of privacy and anonymity. The NYT article talks about the challenges any endeavor like this faces – don’t think this is the first time rebuilding the internet has been attempted. However, it cites anonymity as one of the key reasons any attempts are likely to fail. Security is directly tied to anonymity, and while we would all like the internet to be more secure we have to wonder what we are willing to give up to achieve that.

While I feel a visceral concern about giving up my anonymity on the web even for more security, I have to laugh at myself a little bit. I have a Facebook page with my picture, same with LinkedIn, I have cookies all over and I definitely have certain sites store my credit card info for easy check out – I even have experimented with Mint.com which logs in and downloads my credit card and bank statements. So I look at this and I have to wonder if I shouldn’t be more concerned with security then privacy. Nevertheless, there are a lot of slippery slope and big brother issues that need to be explored before I can make a decision – what does less anonymity mean exactly? We need a national discussion about the tradeoffs to determine where the sweet spot is between someone tracking my every move on the internet (can’t they already do that?!) and keeping my credit card and personal information safe. It promises to be a thorny, though important, discussion.

--By Kate Grossman

The notion of privacy and Internet advertising

Great piece in the Times about the joke that is privacy on the Internet. The piece makes several points about recent findings from the FTC.

The industry’s self regulation has not been adequate.

Duh. When is it adequate for any industry? See mortgage lending..

Privacy policies are not a good enough way to tell people what information is being collected about them.

Who has ever read a privacy policy? Do you read it when your credit card company sends it in a mailing? Me neither.

The post also discusses the notion of "personally identifiable information," a vague concept that purportedly protects the user. And finally, it appears that the Internet industry has been wholly uncooperative in helping the FTC in this area. It appears overall that the industry has a long way to go...

Industry’s silence in response to F.T.C. staff’s request for information about the secondary uses of tracking data is deafening.

Follow the money: M&A in online media

As if the growing importance of online media needs to be reaffirmed, the media investment bank Jordan, Edmiston Group released a report last month looking back at M&A activities in media in 2008. In the report, it estimates that in the next several years, “88 cents of every dollar in media industry revenue growth will stem from four sectors: database and information, b-to-b online media, consumer online media and interactive marketing services.” If their prediction comes true—and it seems likely so—traditional media’s sales growth engine is essentially dead. Another point I read from this is that even though M&A activity has dried up a lot in 2008 (and the group predicted that 2009 won’t get much better, either) compared to the previous two years, there are still bright spots and deals to be done, especially for the strategic buyer. For example, CBS’ $280MM all-cash deal to acquire last.fm, as well as its acquisition of Wallstrip, a financial video blog website and production business, were prime examples for traditional media companies to snap up others to “plug in” gaps in their business models. Deals like these are more likely as traditional media are put under more and more pressure just to maintain their revenue stream. There might also be a competitive pressure for them to “step up” to the game, especially in an environment that has become very difficult for many major players in both television and print. On the other hand, there are plenty of targets (e.g. Pandora, LinkedIn... and the list goes on and on.) that were funded by VC and angel money. One might speculate that those funders might be looking for a way out and get their cash back—that is, unless they see even greater price appreciation potential down the road… but whether they’re willing to weather this recession out and hold on to their investments in a wild-paced industry is another question.

Twitter gets $35 million in New Venture Funds

Twitter, the latest darling of Silicon Valley, had a very sweet Valentine's Day, announcing an additional $35 million received in venture funding from Benchmark Capital and Institutional Venture Partners. The deal closed last Thursday night, according to Twitter's official blog. A person familiar with the matter said the round valued the nearly two-year-old company at between $200 million and $250 million.

Twitter executives made it clear the young company was not desperate for cash. A post by co-founder Biz Stone states, "We weren't actively seeking more funding because significant capital from last year's partnership with Bijan (Sabet) and his team from Spark (Capital) is still in the bank....Nevertheless, our strong growth attracted interest and we decided to accept a unique opportunity to make Twitter even stronger with a very attractive offer."

The infusion comes as Twitter's popularity is surging. Biz Stone further provided that the service's number of active users has increased 900% in the past year. Now would probably be a good time to put together a business model...

Happy Valentine's Day!

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Market Leadership with 1% market share

The iPhone is a great device and it for sure has changed the landscape of smart phones. The original idea, however, has not invented by Apple: I saw a design study of a mobile phone years ago and found it great – unfortunately cannot proof this right now. When I saw the iPhone for the first time, I thought: finally someone picked up this idea and made a real product out of it. Well the same thing happened decades ago with the Macintosh that used ideas from other parties – anyway ;-)

One thing I am wondering about for a longer time is the widespread perception that Apple is the market leader of cell phones. This has even been expressed by more than one professor in lectures ;-) However, it is by far not true! According to this source, the iPhone has a market share of about 1% which is impressive as two years ago it only had 0.3% and Apple is a newcomer in the cell phone market. Cell phone market, yes, but actually in the sub segment smart phones where it certainly plays an important role behind RIM in terms of market share and technology leadership – not taking into account that one cannot change the battery in this super duper device which is a confession of failure in the 21st century.

So, how is it possible that most people perceive the iPhone as THE cell phone? Because “very one” owns an iPod – according to an unofficial survey in one of my classes – and so the Apple brand is ubiquitous? Because we are only in certain circles with somehow rich people – once an employee from DouaneReade asked me what I paid for my BlackBerry and was shocked from the price – who can pay and “need” this gadget. Whatever, Apple is hype and part of this is viral online marketing by Apple disciples: if you google for “iPhone” you get about 321,000,000 hits, for the true market leader, “Nokia”, you get 367,000,000 which is truly surprising when you take into consideration how long Nokia is in the cell phone business. The iPhone attracts much more and people just talk about it online like crazy and thus push it further and further in terms of market share but probably also in our perception.

Google to Revolutionize Health Care?

Google is always coming up with new products and services to take advantage of the massive amounts of information it holds. Google Health is a new format that seeks to aggregate a person's medical history into an online format. According to the Google site,

"Google Health puts you in charge of your health information. It's safe, secure, and free.

• Organize your health information all in one place
• Gather your medical records from doctors, hospitals, and pharmacies
• Keep your doctors up-to-date about your health
• Be more informed about important health issues"

Many in the health care industry are calling for records to migrate into an electronic format to improve the communication between doctors, lower the risk of patients mixing medications they shouldn't, and speed up the access one's medical history in case of emergency. While I'm sure there are a number of companies dedicated to this initiative, it is interesting to see the way Google has entered the space and is positioning the service as one to benefit the patients rather than the doctors. It will also be interesting to see what level of resistance there is to online records due to the risk of privacy and security.

- Jennifer Rogers

Google Knows When to Hold 'Em, Knows When to Fold 'Em

Here's an interesting view on the way that Google explores new projects and sometimes pulls the plug. I thought there were a few interesting things about this article:

First, how many different projects is Google developing that I have never seen promotions for? It seemed to me that virtually every project that they recently killed had zero buzz. Lively, Dodgeball, Catalog Search, Notebook, and Jaiku - each of these projects had potential, but there was an obvious lack of awareness among consumers.

Second, I thought that it was interesting to think of each project at Google as being in competition for their engineers' 20% free time. This type of decision structure is very flat, but may mean that extra projects that are difficult or not sexy will be ignored.

http://www.nytimes.com/2009/02/15/business/15ping.html?pagewanted=all

Do You Own Your iPhone?

A new front has opened up in the fight over digital rights management (DRM), and sadly we see Apple leading the fray against the Electronic Frontier Foundation (EFF). At issue is the rights of iPhone users to install legal but unauthorized software on their devices.

Every three years, the US Copyright Office considers exceptions to the Digital Millennium Copyright Act, which prohibits any circumvention of DRM. The EFF asked for three, the first of which was:

an exemption for computer programs that enable wireless telephone handsets to execute lawfully obtained software applications, where circumvention is accomplished for the sole purpose of enabling interoperability of such applications with computer programs on the telephone handset.

This would sound innocent enough, but Apple has gone to great lengths to ensure that users of its iPhone can only install applications approved by the company, in no small part because it takes a percentage of every sale.

In my mind the question boils down to: who really owns your iPhone? And it seems that the answer is (or should be) pretty clear. But because this is obstensibly a copyright issue, the legal question at hand is whether the Copyright Office will permit "creation of unauthorized derivative versions of Apple's copyrighted bootloader and iPhone operating system software".

The EFF has a set up a website for its supporters, which you can find here: http://www.freeyourphone.org

Economy testing how little we can spend on food

Consumers cut food spending almost 4% between Q3 and Q4 of 2008, the steepest decline in the 60+ years government has tracked this metric.

Assuming that we aren't eating any less, some experts believe that this data reflects people essentially eating what's already in their freezers and pantries. If that's the case, this sharp decline isn't sustainable... but I don't think it's realistic to credit much decline to this theory. 4% of a quarter of a year is almost four days. I don't believe a huge portion of the American population is organized enough to replace four days' worth of food they would they would have bought with food they have in their homes already.

I think it's much more feasible to think that people are truly buying less expensive food - eating in instead of eating out, and paying attention to the price of what they're putting in their carts. These two trends, taken to a reasonable extreme, have the potential to trim a lot more than 4% from most people's budgets, and I think we'll see the metric continue to fall.

An additional thought to consider is that people may truly be eating LESS - which would be great for our country, on the whole. If someone who usually gets a mid-morning donut, or after-dinner ice cream, skips the indulgence entirely, all the better.

Weirdly, Q4 did see a 5% drop in pet food purchases. Hopefully we're not putting our pets on diets.

You can read more here:

http://online.wsj.com/article/SB123448606475780133.html

Targeted Advertiser Supported Text Based Messaging; Strong Potential

I found this article regarding, http://adage.com/digital/article?article_id=134568, H&R Block's use of text messaging service ChaCha, as supported text based tax answers as an interesting way a brick and mortar/software shop and a text based service, sponsored by very targeted ads, as a way to approach a new audience and even more targeted, the younger market which H&R blok hopes to gain as consumers for life. H&R Block has paired up with ChaCha, a text messaging service answer service, possibly a competitor to Google411, to answer tax questions for people through texts. The approach is a novel way to engage consumers who are just starting to begin doing their own taxes. I also think it is a very interesting ad campaign as it selectively target an audience already soliciting advice. As the article mentions, users are texting in questions on tax issues, thus H&R Block has an active, tax-focused audience. As written in the article:
ChaCha lets users call in or text tax questions, then sends them responses via text, along with H&R Block ads inviting them to access tax-prep services gratis.

The ad campaign is already seeing benefits:
ChaCha plans to deliver more than 2.8 million impressions between now and April 15 and is seeing a 3% response rate to the H&R Block ads. It expects the opt-in rate to grow as the tax-filing deadline approaches.

I think it will be interesting to see how this campaign progresses and I hope some financials are disclosed to see how the campaign was structured in terms of ChaCha and H&R blocks contract. Currently, someone is paid 10 to 15 cents by ChaCha for each answer. I'm curious if this is being done on a CPM or CPC basis, but the idea of using text based messaging with an ad may yield to be a very lucrative business.

Internet Business = Las Vegas gambling

Facebook, Double click, AOL Time Warner all were examples (for now) of why it is not a good idea to invest in the Internet yet (for the paries on the wrong side of the trade at least). It supports the point that there are no first-mover-advantages. But maybe it will turn out a huge success in the long run. We will find out but for now managers, investors and entrepreneurs should face the fact that it is a gamble, which is ok, as long as we clearly acknowledge and accept that. Forget about business plans with projections. They usually don't even work in traditional industry fields, much less in the digital space. We do not know where the Internet -this exponential super high speed train will take us. Not even the kids who got rich in the wake of the internet mania know and just because they got rich in the process does not make them digital gurus with a crystal ball. But people will continue to bet on the big payday because we all love lottery tickets, right?

Is Wikipedia doomed? I don't see why it has to be

The article linked below,

http://arstechnica.com/web/news/2009/02/doomed-why-wikipedia-will-fail.ars

summarizes the case a law professor, Eric Goldman, made at a recent conference for why Wikipedia is, in essence, doomed to fail. Goldman contends that Wikipedia, great as it is, "seeds of its own destruction" - that as the site grows in popularity, and in credibility, the very thing that has made it great - the fact that users can relatively easily add to and edit its content - will also bring it down.

Goldman's point is pretty simple, and it's a good point: there's a tradeoff between the reliability of the data on Wikipedia and the ease with which users can change this same data, and this is a difficult line to walk. But I don't think this point is new, surprising, or inherently problematic for the site's future. This tradeoff has been inherent in the concept of Wikipedia since its inception. As the site has grown, and as it continues to grow, the ways in which this balance shifts will always be a huge part of its strategy, and of subsequent decisions about its operations.

Of course, there's potential for Wikipedia to really mess up managing this tradeoff - and that could absolutely cause its downfall. But there's also plenty of potential for the site to adapt its strategy as it grows, and to continue to morph into something different, bigger, and better. A lot of businesses - most, arguably - contain "the seeds of their own destruction." The same practices that help them grow become unsustainable once they're big. I think it's quite silly to think that a business is "doomed," just because it will need to change to succeed.

In the future, I think Wikipedia could head in either direction of this tradeoff - it could be easy to post to, but not a reliable source, or its content could become much more tightly managed, and its facts more reliable. I think there's room for both types of knowledge-sharing on the internet.

Porsche Goes Mobile

Porsche’s recent mobile marketing venture appeared bold being that Porsche demographic is middle age man and mobile skews young. Surprisingly, it ended up paying off. The click-through rate of the campaign was six times better than online display advertising. Mobile generated three times the volume to Porsche’s call center than online, and twice as many dealer look-ups. The mobile site logged 40% higher visit rates to the model-pricing sections, compared to online. The carmaker used Yahoo behavioral targeting tools to serve Porsche ads to Smartphone users whose web-surfing behaviors had indicated they were in the market for coupes, SUVs, convertibles or luxury cars.

This news was surprising to me to say the least. That so many people have the time and patience to click through to ads on their phones is surprising. After a little bit of research, I found that many luxury brands have been experimenting in the mobile space. Land Rover, Merecedes and Ford have all had mobile campaigns in the last year. However no one has reported the success that Porsche has recently experienced. After much contemplation, I think this surge in mobile marketing must be due to the fact that more and more higher end consumers have phones with rich digital capabilities – such as the I-Phone- with which browsing the internet has become a much easier experience. It is clear that automotive companies targeting mature buyers have to be careful before they shun emerging media channels. Consumers are on the go more than ever, and it is inevitable that their attention is moving away from stationary channels and towards portable ones.

Sirius XM in Trouble

Don't look now, but Sirius XM is looking more and more troubled by the day. After fighting so long to get its merger approved, the new company is the latest to get caught in the ripple of the global economic crunch. More specifically, the threat of bankruptcy would spell public humiliation for outspoken CEO Mel Karmazin. It is still unclear how this situation would affect customers, but it may force the company to scale down its content and let go of some of its higher-priced personalities.  

For more details, click the link below.

http://www.nytimes.com/2009/02/11/technology/companies/11radio.html

Banner Ads a Waste of Money?

Here's an interesting article on the effectiveness of banner ads. According to a survey of more than 2,000 adults in the UK, 57% of users rarely or never pay attention to banner ads and are very adept at ignoring them. If this lack of engagement is born out with additional research, it may realign the ways in which marketers look to allocate funds for internet advertising.

http://www.paidcontent.co.uk/entry/419-most-people-ignore-ads-especially-on-general-interest-sites-report

Monetizing Network Effects

In an attempt to contribute towards this blog and therefore this class I spent minutes, no hours, no days contemplating a subject or topic or dilemma or article or something to post. My professional life is not exactly the most exciting or relevant to Marketing and Internet class, but perhaps this is....

Internet is always attached to network effects. But what is a network effect and who really cares if you have a network effect unless it results in more cold hard cash. So I thought of a paper we did for another class outlining if and when network effects can be monetized.

What we found is that network effects can only be monetized when:

1. you are dealing with a marketplace

2. goods and services exchanged have a defined value

3. the company (or website) can take a piece of each transaction

4. there is a sense of stickiness in that users have a stake in the website beyond the traditional more users more value.

Now, I have not posted all the interesting tidbits we found in developing this paper, but if you are curious just let me know.

Watch out for this classic black-hat SEO strategy...

As we learnt in class, any internet business would want to be high up in Google's organic search rankings (the section on the left). Getting the number one spot for certain keywords is the holy grail for many internet marketers as clicks through to the site our free (ie no CPM, CPC or CPA).

Although there are many legitimate strategies for improving your ranking (backlinks, keyword density, title tagging etc), I was in a meeting earlier this week listening to different SEO strategies that could be labeled as 'black-hat' (no it has nothing to do with fashion but are short-term strategies that work but may get you in trouble down the road).

One such strategy that you may see in YouTube is the post-roll of a video clip. If the clip is only 1m 13s long, then some publishers add a blank post-roll of 1,2,3 and 4 secs. This means they now have five 'different' videos they submit, increasing their chances of being watched and improving their ranking.

If you'd like to find out more, here is an interesting article I found. Enjoy... http://www.associatedcontent.com/article/18570/the_donts_of_seo_black_hat_strategies.html?cat=15

Partnership between Nokia and Facebook?

According to the Wall Street Journal, social networking web site Facebook and Nokia are discussing a potential partnership. The deal would have Nokia embed portions of Facebook's services into Nokia's phones. For example, a Facebook’s contact information would be linked to a Nokia user’s handset contacts and users can see the online status of other users, send them messages and post on their walls. Many issues are to be negotiated, such as how much user information Facebook would be able to access, such as web browsing history or buying habits.

However, Nokia is also considering bypassing Facebook and setting up their own social network. This would have the benefit of removing negotiations with a third-party and giving the company full control of the system. With this option, Nokia would have to build the network from scratch or acquire a smaller social network in the market.

Source: http://online.wsj.com/article/SB123439645252474935.html

The Secret to Viral Marketing

As we discussed in class, expenditure on online video advertising is predicted to grow at a tremendous rate over the next few years. Companies such as TotalBlender, Dove soap and Levi Strauss have generated immense enthusiasm for their viral marketing campaigns. In some cases, campaigns have been even more impressive than the underlying products - for example, Snakes On A Plane.

Today's Wall Street Journal reminds us, however, that spending a fortune on snazzy, online video campaigns is by no means a sure bet. Even in the world of 30-second online video, consumers continue to vote with their feet. Today's article reported on Trident Gum's current "That's Not Fake" online TV show: http://www.thatsnotfake.com/. Despite engaging premier ad agencies, trumpeting the campaign among dentists and bloggers, and purchasing online and prime-time cable-TV ads, the campaign has so far failed to generate significant enthusiasm. Indeed, visits to the site are currently under the minimum reporting threshold required by Nielsen. Critics argue that a fake video about a fake TV show served only to undermine the brand's credibility. The videos are also too far removed from Trident, which makes the viewer ponder, "Why all the fuss?"

So, what is the recipe for success? Obviously, the fact of being "on the internet" alone is insufficient. Further, as seen in "Will It Blend?", a big budget is not a pre-requisite. Creating the necessary 'buzz' to propagate 'word of mouth' requires sending a simple message, highlighting specific product attributes, injecting humor and inviting the consumer's involvement. From Trident's experience, we can add credibility to the list. If one of these is missing, it's back to the drawing board.

W.Denton

The fiscal challenge of being creative online

eMarketer reported this week that online video sites are racking up incredible numbers of viewers. Google sites led the group with more than 100 million unique online viewers in December, 2008. The report also showed that online video ad spending is increasing and is expected to continue to do so.

The problem though is that marketers are having a hard time linking revenues to these increased traffic levels. This problem is augmented by worsening economic conditions that will put marketing executives under increased pressure to justify their budgets. This is just one example where the recession has the potential to stagnate technological and creative advances in marketing initiatives. Instead of trying new and creative tactics, like online videos, marketers may be forced to focus on older tactics that they know are effective and can be linked with certainty to increased revenues. Maybe this is the fiscally responsibly thing to do as budgets tighten, but I believe that now is the time that we need creativity more than ever.

Southwest Airline did what?!?

Like it or not, Southwest Airline’s revelation this week of the “SI One” airplane (one of their 747 fleet with a giant picture of swimsuit-clad Sports Illustrated model Bar Rafaeli) is a pretty entertaining and clever marketing initiative. It’s a perfect example of how the internet can give a really unique marketing initiative even more bang for its buck. Love it or hate it, *everyone* has an opinion on the plane, and they are flocking to the internet to post these opinions.

One fan posted the suggestion that Southwest build on its initiative by inking a deal with Victoria’s Secret for the rest of the fleet. Another, who was less impressed by the sight of a scantily clad women draped across the side of the plane, suggested instead that images of Michael Phelps and Venus or Serena Williams holding championship trophies would be a better choice. Others posts debated how to make the plane more “gender neutral” by perhaps putting Brad Pitt on the other side. The bottom line is that I don’t remember the last time so many people were talking about an airline with no mention of service issues, extra baggage fees, or the price of fuel.

You might argue that this was a risky move, but realistically, the risk of customers cancelling flight plans with Southwest because of it are extremely low. Instead, Southwest is getting a lot of attention, and frankly, a lot of interesting other marketing ideas from people online! I’ll be looking forward to seeing what their next move is!

AP Reports Facebook worth $3.7 Billion

The endless speculation that Microsoft's $15 billion valuation of Facebook (through an investment) was way out of whack with reality is finally revealed to be true - even within Facebook itself!

According to court documents obtained by (and hacked by) the AP, the recent settlement of the ConnectU lawsuit shows that Facebook values itself internally at only $3.7 billion.

Techcrunch also discusses the laughable 'cut and paste' hack used to reveal the supposedly blacked out court information.... Check it out for yourself.

In light of writedowns like Google's 'mark to market' of their investment in AOL, this is not that surprising. Perhaps the greater question is why these things happen in the first place. For a promising startup with great potential, valuation can often be the consensual hallucination of where it's going to be - and this is often a self-fulfilling prophecy, as people and partners want to sign up with and do business with (and invest in!) what is perceived as the next big thing.

By encouraging Microsoft to place a seemingly high valuation on Facebook as an enterprise, was Facebook trying to game the system - create a sense that they were an emerging juggernaut, suggest a higher valuation to potential investors, acquirers, and even employees - and perhaps even impact the perception of the average consumer choosing where to spend their social networking time and attention?

Amazon Marketplace

The topic of Amazon Associates program, wherein ad banners generate commission for website owners through purchases from click-through, came up during class last week.  Depending on what Amazon's cost structure is, I wondered how big of a cushion is left and added to the bottom line after deducting commission from its average gross margin.  Of course, the argument for such a program is that it increases reach and impulse sales opportunities.  However, the argument for increased reach gets weaker when you consider Amazon is already the biggest retailer on the internet.

Amazon also has another program called Amazon Marketplace.  It operates like EBay's Half.com and fixed price, "Buy-It-Now" listings on Ebay.  An Amazon user can register to become a seller on the website and lists their own products on sale on Amazon.  Someone browsing that particular product has the option to purchase it from either Amazon or Marketplace sellers from the page.  The limitation for sellers is that they can only list products Amazon currently sells, whereas one could list virtually any product on EBay within guidelines.  However, the difference is that while EBay charges a listing fee (Half.com does not), Amazon does not.  On average, Amazon has had a much stiffer commission structure after a successful sale.  Also, the concept and reality of Marketplace almost always lead to third-party seller undercutting Amazon's prices before and often, after factoring in shipping costs (Amazon offers free shipping on orders of most items over $25).  In this way, it would be interesting to see how much Marketplace is cannibalizing Amazon's own sales.  While a commission is almost 100% pure profits added to the bottom line, lost sales opportunities could be significant.  Also, Amazon has little influence over protecting its brand when transactions are done over Marketplace.

Here is a blog entry that talks about some of the Amazon-seller-buyer dynamic on Amazon Marketplace: http://www.venturecompany.com/opinions/files/amazon_marketplace.html  

Twitter? It's What You Make It.

Twitter? It's What You Make It. The author shared his observations and personal experiences. Like him, I had been confused what's going on and thought Twitter was another fancy application. Moreover, I felt it's somewhat invasive when having followers who are strangers! So I guess that's the reason I try to avoid it. But life is not always as you had planned. The more I avoid it, the more Twitter appeared on the news: Twitter traffic surpassed Digg; Twitter might find new revenue stream, etc. I become the follower of Twitter! Click whatever headlines about Twitter. Anyway, Twitter is quite a phenomenon. I am thrilled to see someone has been through the process: reject-confuse-search-accept-embrace. Read the article if you are in the 1st or 2nd stage. 

           

Criminals Monetize Facebook as Marketers Struggle

A major challenge currently facing internet marketers is how to best monetize popular social network sites. As marketers deal with complex issues of targeted marketing and privacy they are under pressure to devise a method to extract advertising value from some of the most visited sites on the internet. The answers are not obvious and will require creativity and ingenuity. Another equally ambitious and creative group has created their own solution to the monetization conundrum, it’s just not legal. Internet criminals have often been in front of the security frontier creating methods to beat internet security measures and take people’s money. Recently, a Seattle man’s Facebook friends fell victim to a scam that revolved around using Facebook to directly contact his friends and solicit money to help him return home after he was mugged while on vacation in London. Obviously he was not in London, but before his friends knew that they had been taken for thousands of dollars. The lesson learned here could be that we cannot let our guard down on the internet, even if we are on a trusted site like Facebook. If someone asks you for money on the internet, it’s almost always a scam.

http://www.king5.com/topstories/stories/NW_013009WAB-facebook-hack-ks.3334427.html

Mobile Data Set to Explode

According to Cicso's recently released estimates, over the next five years the volume of data transferred volumes over wireless networks is set to grow at a compound annual rate of 131%. If true, this could represent one of the greatest growth opportunities of all time. Among the many interesting claims in this article:

over 60% of data traffic will be video based by 2013

Western Europe will lead all regions in video traffic where it will account for more than 70% of all mobile data

each smart phone will account for 30 times the traffic of a basic cell

each computer will account for 450 times the traffic of a basic cell


http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-520862.html

Wild Safari

I recently stumbled upon the Web site safaribooksonline.com, which makes technology- and business-related books and magazines available online. I decided to take them up on their free trial offer, as I was unable to find a copy of a book for a different class in stores, I had a paper based on the material covered in the book due the next day, and my local libraries were closed (plus they didn't seem to carry the book).

This site did have the book available, and I was able to preview some of its content before I started my "free trial," just to make certain that it did have the full version of the text available. In order to sign up and start the trial, I had to input my contact and credit card information so they could bill me the full monthly access rate ($22.99) if I didn't cancel my trial within ten days. I resisted signing up for the trial for several minutes, simply because that monthly fee seemed exhorbitant, but as I had no other way of gaining access to the book, I finally succumbed.

The online material was professionally presented and I was fairly happy with the site's ease of use. I was able to finish my paper and was pleased with the experience in general. However, I couldn't get past the high monthly fee. Would I really need at my fingertips enough technological or business information to justify paying over two-hundred dollars a year for the service? If I weren't in such a hurry initially, I would have chosen a far less expensive method for getting this information (like buying the book itself, or finding it at the library). I decided to cancel my subscription after eight days.

I gather this site is most relevant to those who need to keep track of what others in the industries it covers are doing. It isn't unusual for a specialized trade publication to charge a large monthly or annual fee because its customer base is limited to those in the industry, the periodical provides a relatively exclusive service to those customers, and the periodical needs to recoup its cost (and reap a profit) from a niche set. Still, I guess I remain one of those Internet users whose willingness to pay for online content remains at or near zero. What will it take to get me (and the others like me) to find value in the convenience of online content distribution--especially since I once was willing to pay more for similar trade publications delivered to me in print?

Internet Service Offered on Planes...

Southwest Airlines announced that it is going to test out a WiFi connection on its planes. Interestingly, it is not going to charge its passengers for the test.

This can have a positive and a negative effect. On the one hand, passengers can be more productive. Wasted hours spent traveling on planes can be turned into efficient time spent working. It is also another way to pass the time either through surfing the web, chatting with friends, etc…

On the other hand, those “slackers” who use flight time as an excuse for not doing work, will surely be disappointed when their boss expects them to be working during their flight. (Although companies should value their employees’ time and not make them work during unreasonable flight times).

Personally, I think this is a good idea. I think Southwest will have to be careful and explicitly state that passengers should be respectful of other passengers (i.e. certain applications are not recommended to be used- for instance, Skype). I also think they need to be careful with the quality of service. I wonder what consumers are going to say and how much Southwest is going to charge…

Full article: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=100065

Another shift in the ever-evolving news media landscape...

New Media Breaks in, but Tradition Lives On

By JEFF ZELENY

WASHINGTON — It was a bookend moment.

President Obama on Monday evening became the 10th American president to call on Helen Thomas at a White House news conference. And he was the first to call on Sam Stein, a reporter for TheHuffington Post, whose Internet publication sprung to life during Mr. Obama’s candidacy.

For years, Ms. Thomas has held the honorific title as dean of the White House press corps. At 88, she has been questioning presidents since John F. Kennedy.

“All right, Helen, this is my inaugural moment here,” Mr. Obama said with a grin as he turned toward Ms. Thomas’s seat in the front row of the East Room. “I’m really excited.”

Ms. Thomas, now a columnist for Hearst Newspapers, did not return the pleasantry. She plunged directly into her question, wondering if Pakistan was maintaining safe havens in Afghanistan for “these so-called terrorists.” She added, did any country in the Middle East have nuclear weapons?

Mr. Obama glided through the questions without making any obvious news. Then, he turned to Mr. Stein, 26, who last month became the White House correspondent for his publication.

“Are you willing to rule out — right here and now — any prosecution of Bush administration officials?” Mr. Stein said, asking whether Mr. Obama intended to endorse an investigation by a so-called Truth and Reconciliation Committee.

As he did with Ms. Thomas, Mr. Obama essentially bypassed the question, saying, “My general orientation is to say let’s get it right moving forward.”

It was not the answer but the very fact that he took a question from Mr. Stein that created a buzz and signaled yet another shift in the ever-evolving news media landscape.

The White House decided in advance which reporters would be selected. And on Monday night, correspondents for The Wall Street Journal, The Chicago Tribune, Time and Newsweek were not on the list.

For full article: http://www.nytimes.com/2009/02/10/us/politics/10media.html

Mobile Advertising - Still in experimental stage? really?

I lately ran into a Forrester report claiming that the mobile advertising industry is still in experimental stage. While the technology exists and monetizing seems possible, the industry seems to pick up very slow relatively to the size of the opportunity.
What are the main factors that will drive the growth of this area?

• Brand managers need to accept this channel - in a survey, 43% of advertisers said that the mobile channel is inappropriate to their brand and 33% claimed that they are lack of resources to go mobile. This actually means that 76% of the advertisers still learning this channel and are not on the innovative leading edge of their media channels. As we see in many other areas - it is harder to change people perception than come up with a new technology. Promised - all these brands will find a way to go mobile, who ever starts now will have a huge advantage.

• Mobile users will gain confidence - users still not adapted to the mobile advertising channel. The use of location based advertising and other information that can be collected form the mobile device still seems like a huge privacy issue. However, many researches show that people do not really mind to share information, as long as they get something in return and trust the 3rd part to keep their information protected (after all - think of Google and the amount of info we all give them every single day). The mobile advertising industry will develop to a very targeted, location based advertising. Consumers will not only allow extended use of information, they will also enjoy interacting with their preferred brands over this new channel.

• Standards - to make the advertisers life easier, few standards need to evolve with well-defined business models, monetizing options and metrics to define prices.

• Devices and "look and feel" convergence - as devices become more and more transparent; users can actually browse the internet and consume content on their mobile. Already today, mobile devices allow a full range of rich media and monetizing options (see www.admob.com and their android/iPhone campaigns). As devices become even more sophisticated, advertising options will grow and advertisers will have more flexibility to choose campaigns that fit their brands.

Much more data on this interesting advertising channel can be found at www.mobilemarketingwatch.com. The underlying message to advertisers - start to experiment now or you will find yourself struggling (or jobless) when this channel picks up.

You're Hiring? Wow!

The market tanked again today, GM is laying of 10,000 workers and the ad industry cut nearly 19,000 jobs in December. However, a new report out from the Bureau of Labor Statistics had one nice statistic: online media and search companies actually added staff. While the ad industry overall shrunk, internet media companies and search portals added 800 more jobs in December 2008 bringing the total jobs in that sector to 82,200 jobs – the highest level since 2002. This data suggests that once the economy gets moving again, this area will expand rapidly. It also speaks to the fact that money must be going into these areas if they are hiring, which is just one more vote of confidence for the future of online marketing.

What the statistics do not get to is what type of work these employees are doing. Perhaps, these companies are strong enough to actually be innovating in this downturn and exciting ideas will materialize over the next few years. It’s especially striking in comparison to the woes of the newspaper industry which hopes mostly to survive these times. The print media may innovate to survive, but these statistics suggest the online media and search companies may actually be able to strengthen their core capabilities. Combine the strength the industry is demonstrating with the recent articles about Google putting electric metering online and you can imagine we are only getting closer to a fully web integrated society.

By Kate Grossman

A Good Cause for Ads?

AdCause is the newest third party company that is trying to make money off of Twitter advertising. AdCause isn’t the first to offer a service that will connect twitter users with businesses looking to advertise. AdCause’s “hook” is that it gives Twitter users a reason to not feel bad about spamming their followers. The service allows users to donate proceeds to their favorite charity Quoting its slogan it is “saving the world one tweet at a time.” But will the promise of goodwill be enough to prevent the criticism and backlash that ensued after previous Twitter advertising models emerged? I think not.

How will the idea of charity make better the inconvenience of receiving ads through yet another media vehicle? How will followers even know that you are donating the money you are making to charity? And looking from the side of the user, I’m still skeptical that Twitter authors will want to monetize their tweets. My reasoning is that many users value Twitter for its usefulness as a vehicle through which to spurt out raw, random, thoughts. A stream of thought interjected by a commercial doesn’t seem right. In my opinion, advertising does not belong on Twitter. The inherent purpose of Twitter is conversation. It’s equivalent to having ads disrupting my IM conversations. But like any other popular social networking application, once a user base is built, a business models follow.

I don’t think we will see ads on Twitter go away, but I think any business that thinks it can fool the victims of Twitter spam will.

Ads Targeting Kids: The Fight Moves Online

As fast food restaurants steer more of their marketing resources online, they are facing regulations similar to the ones they must observe in traditional media. The central issue is whether fast food companies market their products directly to children. In the UK, where this is explicitly banned, fast food companies are being accused of observing the letter, but not the intent of the law. Fast food sites have games and interactive areas aimed at kids. Some are accusing the companies of the same targeting of kids, just less directly. Companies counter that children must receive adult permission to enter these sites, and that menu items are not the focus of the interactive areas. In a less than objective article the BBC news addressed the subject. See http://news.bbc.co.uk/2/hi/technology/6905072.stm

Fortunately, the internet is still a great provider of free speech, and this very subject is being debated at; http://wiki.idebate.org/index.php/Debate:Junk_food_advertising_ban#Should_junk_food_advertising_be_banned.2C_especially_during_children.27s_television_programs.3F

JetBlue Can't Navigate the Virtual Space

So my group is researching JetBlue for our class project and I went in with the impression that JetBlue is a savvy marketer that really knows how to promote itself. The airline's Happy Jetting campaign was very effective in positioning the carrier as a easy, breezy company. However, my research on JetBlue's digital strategy was quite a shock. For this entry, let's focus on its blogging efforts.

Let's start with its address, t508.wordspace.com - how is the average consumer going to associate that reference to JetBlue's new terminal at JFK to the airline? Even though the blog is dedicated to the opening of the new terminal, it could have been named something more memorable like JetBlueT5. The narrow focus of the subject matter means the blog hasn't been updated since October 2008. Not only is it an old blog, it has out-of-date links (t5wines.com) and didn't offer any videos of the opening ceremony at the terminal, nor does it direct visitors to the JetBlue homepage. While there's nothing wrong with using wordpress to publish its blog, JetBlue stumbled badly with an obscure name, no RSS feed, and a missed opportunity to promote the JetBlue brand.

JetBlue can learn from Southwest. From the web address (blogsouthwest.com) to features and content. The site has a clear message at the top of the page regarding the purpose of the blog

Nuts about Southwest is all about our Employees, Customers, airplanes, and airports. We really are Nuts about Southwest and we hope that our Readers will share that passion by posting their own comments.

Entries are tagged, there’s a link to its Flickr presence (JetBlue also has a Flickr presence, but again, it was not presented well), and there’s a video blog and podcasts. In keeping with the nature of a blog, it offers links to other blogs of interest. The blog does a good job of announcing developments at Southwest, such as WiFi service on select routes and inviting user feedback, with the comment box following a posting (unlike at JetBlue’s site where users have to click the “Comment” link and be directed to another page).

I used to cover Southwest as an analyst and I always knew it was a solid financial and operating company, but I clearly mistook the company's folksy image to mean it would be less Internet savvy than JetBlue, but I was wrong, wrong, wrong.

It's Electric

Google is constantly innovating; they have teamed with other websites and brands, have a great advertising program, etc. Recently I read an article in the NYTimes about Google partnering with electric companies to enable real time usage checks.

“The service, which will be called Google PowerMeter, will allow users to measure their energy use in real time. It one of many new consumer products that would be enabled by “smart grid” technologies, and it is one of Google’s many initiatives in the energy area… Google developed its prototype using an electricity measuring device that clamps onto a house’s main circuit breaker and sends the information back to Google’s servers, where it is charted. Google plans to enhance PowerMeter with “social” tools that will allow users to compare their electricity consumption with that of their neighbors or friends. And it plans to allow third parties to develop their own applications that would enhance its usefulness. A programmer, for instance, could create a tool that normalizes the data for variations in weather.”

http://bits.blogs.nytimes.com/2009/02/10/googling-your-home-electricity-usage/?em

I think this idea is great. It is helping the environment and it enables people to self-monitor their electric usage. Another reference to the concept is on the Google blog seen here: http://googleblog.blogspot.com/2009/02/power-to-people.html

I wonder though, where will this head next? While Google sounds well intentioned, it is a bit scary that such private information will be floating around on the Internet. Granted this information is available on the website of the electric provider also. So why don’t they just make an application that enables customers to monitor their usage real time in a user-friendly fashion? Either way, the application of technology in simple manners that makes significant impacts is nice to see.

Onitsuka Tiger's Zodiac Race Campaign

Onitsuka Tiger is a premium sneaker brand based in Japan and currently held by ASICS. To celebrate its 60th Anniversary, it introduces the Spring/Summer collection and launches a global '' Cycle of Life'' campaign in Feb. The idea is coming from the ancient legend that the God has to decide the order of Zodiac calendar. 13 animals compete for 12 places. The agency Amsterdam Worldwide creates a campaign that works across multiple communications channels, include a one meter-long sneaker diorama; a three-minute animation film; a 30-sec trailer, a website, and print materials. 

The website has all the contents described. You can see how they made the sneaker diorama and those animal characters. The sneaker is a detailed model interpretation of Japan. Everything is hand-made on that diorama. Then they turn the diorama into the film setting. All the animal characters are 3-D animated. They show their personalities along the race. The story is simple and the production is great. I admitted I watched the film again and again. It has so many details that I personally enjoy so much. 

You can also calculate your zodiac sign on the website and it will show which animal is in charge your year of birth, how your personalty is affected, and of course, some merchandises with the symbol of your year. The website is worth browsing because of the production quality. Go, take a look, and figure out which animal year you're in. However, it is not 100% perfect. Some features is coming soon and you can't download anything fun or share with friends. But it's good enough for marketers to know the potential of integrating channels and communications. 

The Problems of Online Advertising

Here is a great example of an issue that we discussed numerous times in class, not knowing exactly where your ad might display. Below shows an add for Burger King's new cologne titled "Flame", next to a news feed about Australia's wild fires which have so far killed over 170 people.

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi-ENCMzaOsH63emAZ5SB0hbogF0RWLgNP3s1m0LQIdywJOztzzC898ri9Qrk4Aev1VL-giMm7x6OIIRqBz_tJa5vzxWI0q8xAaTPiZsewhO1s-KXh6UBoq1246PZu6owChcG9fuA/s1600-h/BKflame.png

3-D On the Internet

3-D is making a comeback! In addition to the ads shown during the Super Bowl broadcast last week, 3-D is making its way online. Brandweek recently profiled Crest, who created a website www.kissmein3d.com to promote its White Strips line. The videos on the site show different actors smooching while wearing the White Strips to address consumer concerns that they cannot go about their routines while wearing the White Strips. Through the site, Crest hopes they will get out in front of the revival of the 3-D trend.

"We noticed there was a lot happening with 3-D," said Laura Brinker, a representative for Crest. "That was a relevant trend to latch onto. We thought we could bring the benefit of the product to life in a relevant way."

If the technology takes hold, it could be an interesting way to enhance video advertising. Too bad I don't have a pair of glasses!

- Jennifer Rogers

New Media and the Government of the future

In a great presentation/case-study released today (http://www.slideshare.net/socialmedia8/case-study-the-barack-obama-strategy), the authors highlight all the facets of new media that the Obama campaign used throughout the Democratic nominations and the Presidential elections.

Obama's campaign team, included some non-traditional people, such as Facebook co-founder, Chris Hughes, who headed up the Online & Social Media architecture.

The study does a fantastic job of dissecting the campaign down to its messages, audience and delivery (I'm sure there are 3Cs, 4Ps and all else, in there somewhere!).

It seems that the Obama campaign really harnessed the power of social media this time around. By the next election, both camps will be on board with these new gee-wizz technologies.

But as was told to Peter Parker, "with great power comes great responsibility"...

Twitter may start making money...

In a recent interview Twitter co-founder, Biz Stone, hinted that Twitter would start charging for "commercial use". By identifying who commercial users were, it would be possible to charge them. Some companies, such as Dell, have been known to make significant sales through the Twitter platform.

Google Wants to Save the World

Google is making a step into the world of energy with their announcement today that they are embarking on smart grid technology. Smart grid is one of the hot new buzz words in the renewable world and refers to technology that will allow consumers to monitor energy usage. The goal of a smart grid would be to use the energy we already generate instead of building more power plants.

Google is announcing the rollout of PowerMeter, a free utility that will track and organize information from smart meters - devices that collect data on power usage and have the ability to restrict power. The only catch is that Google will be relying on other companies to develop these smart meters and will be relying on consumers to purchace and install them. They may get a little help from Washington, however, as the proposed stimulus package has $4.4 bil set aside for investment in smart technologies.

http://www.nytimes.com/2009/02/10/technology/companies/10grid.html?_r=1

I recently came across an article that talked about how the only real metric for selling advertisers, the unique visitor, is now being devalued. Many new web 2.0 start ups are using techniques that artificially inflate this count in order to show investors a certain level of popularity. The article points to a few schemes including facebook's 'zombie' unauthorized messages for applications and more recently Twply with Twitter, sending tweets to all one's contacts.

A backlash started, but it hardly mattered. Twply sold itself—and all the user login data—on SitePoint.com for $1,200 just hours after it launched.

I think that if this is a trend that continues, it will be detrimental in the long run. Investors will be suspicious of online user patterns and will not be able to trust current data. Since there really is no other reliable metric, it is imparative to keep this metric sound. I don't know what is the most efficient way of doing this is, but in the long run it is best for everyone, especially the entreprenuers, for this metric to be unadulturated. If popularity is falsified, certain technologies will be invested in and end up failing in later stages. It is best to have accurate data in order to accurately gauge whether it is worth supporting or not. Web 2.0 startups inevitably follow Darwin's theory of survival of the fittest when they truly aren't popular with users.

Facebook Has a Monetization Plan?

So lay it on me, Zuckerberg! What is it, Facebook Social Ads? Compensating users for promoting products? Sponsored and paid search opportunities? The winner is....wait for it...selective marketing polls.

According to Telegraph, Facebook will soon allow multinational companies to selectively target its members in order to research the appeal of new products. Companies will be able to pose questions to specially selected members based on such intimate details as whether they are single or married and even whether they are gay or straight. The company's advertising department is marketing the new service to thousands of companies worldwide and it hopes the polls will go live this spring.

Like YouTube, Facebook has struggled to make money from advertising because of the unpredictable appropriateness of content adjacent to advertisements. Why does it matter whether or not Facebook has a strong and growing revenue source? Because until it does, everything they have worked so hard to build is at risk. If its business model is at risk, partners will be less and less likely to jump on board, compromising the site's network effect. Focusing on a primary revenue source will also signal to businesses building upon the Facebook platform which opportunities Facebook is not going to try to monetize, all of which adds up to opportunity for the developers.

Make music sharing on the Internet legal

For the last 8 years, the music industry is trying to control digital music, using different technologies/ attempts like DRM, CD protection, broadcast flags, lawyers, etc. This has not bettered the situation, but has brought the music industry a fundamental and detrimental crisis, value destruction, squashed innovations, and so on.

Compensation Not Control Music 2.0 Gerd Leonhard Midem Net 2009

View more presentations from Gerd Leonhard. (tags: isps leonhard)

Companies selling music, such as Apple with iTunes, have started to sell music without DRM – partly because of the competition (Amazon is more and more successful in selling music that is open) and thus through the buying power pressure from customers who found out that this magic DRM server holding the rights to use their music might be turned off sometime (see article). Apple, being “nice”, even offers a possibility to remove the protection for as little as 30 cents per song (that is “only” about 30% additional cost) which persuaded me to stop any music from them after I once have taken a deep breath and converted my purchased songs. (Apple lives forever? Sometimes “forever” is approaching pretty soon ;-)

Back to the topic: as demonstrated in the past with copy protections for computer software, the music industry is fighting a battle they cannot win but it looks like they still have not understood that. One possible solution that has been around for a while but never really left the ground is a music flat rate. Some time ago, the Isle of Man is planning to offer a flat fee to all of its internet subscribers to cover the cost of downloading music – the price discussed is GBP 1 per week.
Taking this idea further to a global level, this would have tremendous influence on the way music would be marketed and companies like Apple with iTunes would have to find new benefits for the customers in order to get them paying something.

An intermediate approach would be to use the already installed surveillance systems that track down pirates to collect numbers about download rates and spread the collected flat rate money according to actual download figures – a more expensive but maybe fairer approach.

Total Music Experiment - Music Industry a step behind once again

No other industry has been as un-adaptive to the changes brought about by the web than the music industry. Forget web 2.0, they are still trying to figure out a Web 1.0 strategy. TechCruch recently posted about the death of the record industry's TotalMusic project.

http://www.techcrunch.com/2009/02/08/confirmed-totalmusic-is-dead/

Essentially the initial idea of the TotalMusic project was a joint venture between the record labels (Sony BMG and Universal) that would bake the concept and cost subscription music into MP3 devices (For example, pay $350 for a player instead of $250 and get unlimited lifetime downloads). For anti-trust reasons that strategy didn't work out to well so they eventually turned their attention to creating a free, advertising-supported streaming service that would be licensed or white-labeled to other Websites. Each stream would link directly to a paid digital download. Well supposedly now that has failed.

The question is how can the record industry stay relevant when they have been pushed out of the distribution chain? The answer probably doesn't lie in finding a way back into the chain (that opportunity has probably been long lost). But maybe its about creating value by finding new ways to target consumers based on their listening and purchasing behaviors (how Pandora's music project was not a project of the record industry is beyond me!).

The record labels still distribute a large portion of the music in the US and with that can come data. When a person purchases music at a Virgin Megastore what else do they buy? The music preferences of an individual may uniquely tell a story about the listener and that information compiled in an effective way could allow you to target not only music recommendations but also other consumer purchase recommendations. Ok, maybe the connections wouldn't be so explicit at first but I bet if they started collecting some data about listening and buying preferences they would see some solid connections.

Start with gathering information about your users, then see who would be willing to pay for that information.

Hey... thats what worked for Google.

Marketing to the iPhone

Mobile marketing has been talked about as the "next big thing" for years now, but few U.S. advertisers have figured out how to effectively market their products via mobile platforms.  Unilever, who is already well known for innovative marketing campaigns in the consumer products category, recently launched a successful new mobile campaign to support their Axe body spray brand (http://adage.com/digital/article?article_id=134331).  The full scale interactive ad campaign was designed specifically for the iPhone, and it was a hit with target consumers, resulting in 3 million impressions and a 15% increase in purchase intention.  

Interestingly, Unilever was able to work with an agency to design a campaign that replicates the functionality and interactivity of Flash, which is not currently available on the iPhone.  The campaign also involved a game, a trend which many advertisers are using to encourage engagement.  Several companies including Kraft and Nike have built their own iPhone apps, hoping that by providing useful tools that consumers use and appreciate they will increase brand awareness and eventually sales (http://adage.com/digital/article?article_id=133607).  

Although mobile marketing is still in its early days, the success of Unilever's campaign and the popularity of corporate applications for the iPhone shows that if advertisers can be creative and work around technical limitations to reach them, consumers are ready to respond.  

MLB.TV Can Hit and Hit for Power

In today's New York Times, there's a brief article detailing Major League Baseball's success with Internet video. Unlike most content sites, MLB.com has been able to build a large paying subscriber base for their online broadcasts of games. So far, MLB.com has amassed an audience of over 500,000 who pay $120 per season for broadband access to games out of their home markets. They also have 350,000 additional fans who pay $15 a season for podcast access to radio broadcasts. These are huge numbers for any subscription based web service and represent a growing ancillary market for MLB.

This season, MLB.com will be rolling out MLB.TV, which will represent a massive upgrade in streaming services. Some of the new features include technology that tailors the bit rate of game feeds to match the broadband access of users and providing subscribers with the ability to pause and rewind live games. MLB.TV will also offer live radio broadcasts over cellphone networks in an effort to increase penetration into a fast growing market that their competitors such as the NFL and NBA have made a priority.

When it comes to online content, it is interesting that baseball has managed to stay far ahead of its competitors by exploiting facets of the game itself that have traditionally been viewed as weaknesses. Specifically, the high number of day games and the large amount of inventory that has hampered baseball in negotiations for television contracts are large strategic advantages when it comes to syndicating content on the web.

http://www.nytimes.com/2009/02/09/technology/internet/09mlb.html?_r=1

Google taking a few more minutes out of our day

In an article that's quite close to home, the boffins at Google have now launched a site to track bushfires that are currently ravaging parts of Australia.

Traditionally, in Australia, the progress of bushfires was reported through TV and radio, with those affected (or who knew people in the affected areas) keenly watching and listening for the status of the fire. This now introduces a new medium, that allows people to witness the scale and location of the fires online.

While, I believe that the engineers at Google had entirely altruistic motives when they developed this site, my cynical side definitely highlights the fact that this falls in line with Google's strategy of capturing more of your time. By becoming more reliant on Google, that allows more possibilities for them to sell you advertising.

On a practical note, what the page presents is a one-way communication from the fire authority to the end-user, with Google as the middle-man. This communication is not real-time and has a degree of error. Ironically, the radio reporting during this emergency is far more interactive, with people (victims and fire-officers) calling in to provide current, up-to-date information on the fire.

If you were stuck in a bush-fire, which service would you trust?

A Kindle in the Wind?

Ok just thought that would make a funny title-- but I did see a bunch of posts on the class blog about the Kindle, and had been browsing nytimes.com when I came across http://www.nytimes.com/2009/02/06/technology/internet/06google.html?ref=technology
mentioning that Google and Amazon were putting more books on cell phones-- including the 1.5 million public domain books you can already access gratis online through Google. This of course makes me want an iphone even more-- however I don't think that screen is the best for reading necessarily. Still, I love the thought of a mobile library.

Concurrently, there is the current craze in Japan for novels written exclusively on cellphones-- http://www.nytimes.com/2008/01/20/world/asia/20japan.html
The article states that in Japan, "Of last year’s 10 best-selling novels, five were originally cellphone novels..." This development fascinates me-- while I love reading actual books myself and bemoan the demise of the neighborhood bookstore-- I do appreciate the democratization of fiction. Of course, it is simple to read online-- or on a Kindle of course-- but the ability to download chapters from a website to a cell-- serialized just like print magazine publications in the previous century-- is that much more convenient. Further, it is a fantastic vehicle for young women (the primary users and creators) to express themselves creatively as they can upload and download works for free, or minimal fees. The sites that host the novels make their money from selling ad space-- and I also think this platform and mode of expression would make an interesting opportunity for branded content, or even product placement. Just as webisodes are produced by major corporations-- some with social bents such as Dove-- so could serialized cell phone shorts... That is if this fad takes off here.

What did I just stumble upon?

7 million users!

Bigger than Twitter and making money too, all with zero promotion! Purchased by Ebay in May 2007 (top of the market to you!), Stumble delivers traffic and advertisers apparently are paying.

Using algorithms and a learning ability, Stumble makes sure you will never be bored at work again.

It's a fun, playful, chaotic way to navigate around the web.

So I played around a bit and found a mattress gun rack. Then I clicked on a Wiki article called "List of company name etymologies." Did you know that "akamai" is Hawaiian for smart or clever? Me neither, and who knows if it's true, as I don't trust anything on Wiki. Also MBNA stood for Maryland Bank, NA. Allegedly. This site is addictive. I also learned how to knit a smitten. And watched an Italian video of idiotic driving. Overall I'm very impressed with the web site since Internet browsing for entertainment purposes can often be so directionless!

Hulu's Success with Online Video Advertising

The February 7-13 issue of the Economist ran an interesting article ("Hulu who?") on Hulu's success in the online video advertising arena. It commends CEO, Jason Kilar for finding the right formula for success in the newly-emerging online video industry. YouTube may have been revolutionary in bringing online video to the masses, but it had failed to generate significant revenues due to advertisers' reluctance to associate their brands with user-generated content.

YouTube provided reassurance that consumers were indeed willing to watch videos online. This posed an opportunity to generators of professional content, if only they could come up with a model to attract both viewers and advertising revenues.

Should a service incorporate any user-generated content at all? Should a service offer content from one provider, or many? Would consumers prefer to download content (e.g. Apple) or stream it through their browsers? Would consumers be prepared to download special browser software (e.g. Joost) or prefer the browsers they already have? Which business model would win?

Enter Hulu, a joint venture formed in 2007 between NBC Universal and News Corp. To date, Hulu has been a runaway success: its user base is growing quickly (over 216m videos watched in December 2008 alone), it has over 100 advertisers, including big brands, and advertising inventory is currently sold out.

What was Hulu's formula? No user-generated content. Aggregate professional content from over multiple partners. Stream media through an existing browser. Simple. Joost has changed its business model accordingly.

Hulu has shown that it is possible to supporting streamed video with advertising, rather than charging for downloads. This is the way forward, for now.

W.Denton

A Chink in the Armor?

Google's dominance in search has been trumpeted by analysts and shareholders as often as it is lamented by their competitors.  A recent survey by Forrester Research, however, found that only 20% of Internet searchers use Google exclusively.  In addition, Microsoft's Live.com and Yahoo were rated higher for searches involving news, finance or media content and Yahoo was more likely to be a user's home page than Google.

In response to similar findings in their internal research, Google's competitors are focusing on areas other than core search in an attempt to strengthen their market shares.  Some of the products that are currently rolling out illustrate this new focus:

Yahoo - has a product called Search Pad, currently in beta, that will allow users to keep track of the sites they visit during an ongoing search.  This eliminates the need to keep separate notes and has the advantage of being fully integrated into Yahoo's search platform.

Ask - is refocusing their strategy on vertical search in an attempt to give users higher quality search results in specific topics.  As part of this strategy, they are partnering with specific websites such as Nascar.com.

Microsoft - continues to offer discounts and cash back promotions though its Live.com search engine.  Through these promotions and brand partnerships, they hope to become a strong competitor in e-commerce based searches.

Kindle: when can I expect the 3.0

Kindle is basically an e-book with added features that is releasing the 2.0 version.

See these links for details on the product:
http://www.amazon.com/gp/product/B000FI73MA/ref=amb_link_6369712_1?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-1&pf_rd_r=1PCKM9N9YHWK752BHHGN&pf_rd_t=101&pf_rd_p=469085531&pf_rd_i=507846
http://en.wikipedia.org/wiki/Kindle

I think this is a great technology. I thought of the idea a few year ago when I saw that newspapers were available online but people still enjoyed reading their print copy. Why not combine the 2 as 1 and let the reader bring their tablet-like computer that has just downloaded the newspaper for that day on the train with them as they travel to work. Well now it exists through Kindle and it is sold out on Amazon.

I just have one question: when will it start to play movies? To my knowledge it is user-friendly in downloading books and newspapers, etc. But when will it be an easily integrated system such as Barnes & Noble that has distinct sections: books, magazines, and movies.

I have no doubt that in time the kindle and other e-books will offer similar features such as itunes. But why should I buy the product now and have to upgrade to a new one in a few years because the company of the product could not create it all at once?

Technology is ever-evolving and I feel like this kindle version is when digital cameras came on the market. People that had 3.0 mega pixels had a great product!! Now the standard is around 8.0 and people with 3 megapixels cannot compare. I would just like to know when the 8.0 mega pixel Kindle version comes out and I will purchase the product then. Or…will I still not be satisfied at that point?

Personalized Ads Pack Bigger Punch

There was an interesting article in eMarketer recently that provided data to support the idea that targetted online ads reap greater reweards for advertisers. The data follows nicely from our class discussions and the presentation from our guest speaker.

While it is intuitive that targetted ads are more effective, what is interest the debate over privacy. In order to targer adsIn particular ChoiceStream noted that in its surveys 41% of people are more likely to pay attention to (and ultimately click on) an ad if it is specific to their interests. This percent increases for people that spend more money online. However, the data also shows that people surfing the web are willing to go through extra means to prevent thrid parties from tracking their web history -- more than 40% of those surveyed indicated that they would opt into a registry that would keep third parties from tracking their internet usage preferences.

It begs the question, would you be willing to release aspects of your identity and wed history to unknown parties to their benefit?


http://www.emarketer.com/Article.aspx?id=1006878

Source: eMarketer.