Clickability

The TV of Tomorrow

2010-03-05T14:46:00.002-05:00

I was asked to be on the panel of Tracy Swedlow's TV of Tomorrow Conference in San Francisco. It was a lot of fun but I realized that I had a tough time connecting with some of the other attendees. Turns out that they are all traditional TV / Cable folks that actually know what EBIF and tru2way mean, while I'm just an Internet guy with an idea and a passion. What was really cool was that Tracy was able to get all of the interactive internet video providers into one room onto one stage. (This is her passion as well, and kudos to Tracy for pulling this thing off).

On my panel were Brian Rogers from EvenHere, Nick Alt from ConciseClick, Baba from VideoClix, Shana Steele from Tremor Media, Michael Fink from YouTube Annotations, myself, Abe from Clikthrough, Scott Bloomfield from Veeple and Rob from content creator Rob Chad and Matt. It was pretty interesting to see everyone's demo and to hear everyone's thoughts. I've always wanted to drive interactive video because I believe that we are not working against each other but actually should be working together. The great thing is that each company had a slightly different spin with a slightly different target audience. Here's the rundown:

Evenhere - They drop items into a timeline that appear in a video. When you are watching you have the option to purchase these items. They charge on a CPM / CPA basis. Target audience appears to be professional content - currently implemented on BFF.tv

Conciseclick - They are clickable video with popups that show up when you roll over something. Came from an agency and I think they are still targeting those clients. Not sure how they charge, but nice implementations with Hotwheels and Mattel.

VideoClix - They've been around for 11 years now and have a nice interface for professional content creators that track objects within their video. Then the creators go in and create content for each tag. They had a nice sizzle reel.

TremorMedia - Aren't they an ad network? Not just. They also have an Acuedeo tool that furthers interactivity for their brand partners. Pretty cool. They provide buttons and overlays that easily plug in.

Clikthrough - They target the music industry and have a really comprehensive system that gives the viewer anything from ratings to ecommerce to social media. Pretty nice interface.

YouTube - Small company attached to a small search company. Even Michael said that annotations was pretty low-tech but what's interesting is the adoption of annotations. (They've also released what Michael describes as wiki annotations). One out of every six has some type of annotations. He's no longer working on the product anymore.

Veeple - They are targeting the pro-sumer and corporate users including GoDaddy. Pretty interesting how they've allowed users to put PDF, Word, PPT files into a video.

Rob - Funny guy who is part of a trio of comedians from LA. They do a lot of cool things with interactive video including choose your own adventure.

And then there was me. I told my favorite story about our favorite movie (Miss Pettigrew) and the audience got that. I was also able to fit in a story about In The Heights and how its a different game than Miss P and why it worked better. And then time was over. Wow that was fast. We even had to postpone the click awards. So apply for them, and email me if you'd like to apply. On my way now to go meet up with old friends from Google....

Bowling Not Wii

2010-03-05T14:39:00.003-05:00

So on Wednesday night, I checked out the Flybridge VC bowling event in NYC's Bowlmor lanes. It was pretty interesting event as I'd say the top NYC entrepreneurs were there. It got me thinking about an ongoing debate about entrepreneurship and whether entrepreneurs could be created or were just born. I've read a bunch of posts on the topic but I've come to a few realizations....
(BTW, our team was pretty awesome - i think we should have won - Baveo's Ari Greenberg, Bill from Goodwin, Stefan who just got funded, Alex and myself). Actually it's really one realization. Should an entrepreneur have a breadth of knowledge or a depth of knowledge?

I think the answer is breadth. I look at guys like Jeff Stewart (Mimeo, Urgent Career, Monitor110) and realize that his companies span many different industries (printing, sales, information). What resonates in my mind though was what Rich Forman from Register.com said at a recent M&T event.... He started Register.com as a wedding registry and it turned into a domain registry. Wow. Imagine that he was working with a bunch of folks with depth in weddings, gifting, and / or retail? They would not have been able to turn on a dime. That was cool. Speaking with Jeff, he said the same thing. Get a bunch of generalists first until you have a definitive idea on business model, product, etc. Essentially have a bunch of McKinsey entrepreneurs (breadth smart), that were former athletes (never say die), that are crazy (everyone needs some craziness) and there's your team.

Now do just do it.

Notes from the First Stamford Tech Meetup

2010-03-03T12:40:00.004-05:00

On Wednesday February 24, a group of techies got together at Tigin Bar in Stamford, CT. We had a semi private room and although we could only use an S-Video cable to a PC connection, we got the first Stamford Tech Meetup (#STeM) off.

We had four presenters that all provided an aggregation type theme, although a few of them fell into the travel niche, one fell into theater, and one into food.

The first brave soul that demonstrated was David Marcus from Routefriend.

Routefriend's elevator pitch (IMO) was Kayak for non-air travel. It worked pretty awesome. There was a lot of great Ajax on the site that made for quick loading and user friendly controls. David's got a ton of content that he was able to scrape from the sites themselves and is now working on a way to provide travel displays to the various city owned train stations.

CommutePlan was the second demo up. Nik Ran the CEO and founder wowed us with five minutes of his work. I'd say the elevator pitch was Drupal for Transportation Hubs. CommutePlan was still in the alpha stage but I could see where Nik was heading with it. He demonstrated the content management system and showed where he was going. Perhaps Nik should team up with Routefriend's David and CrowdFusion (that demo'd last night at NYTM).

TheaterAdvisor was next up. I'd say it was Yelp for Theater. Great presentation by the founder Andrew Asnes as he covered a lot of the things that I was going to ask about the site. What was really cool was the integration with NY based Hunch where a user could come to the site, answer some questions, and a Broadway recommendation would be given to them. I'm looking forward to this launch of this site as I saw a great show this past weekend that I'd like to review.

Last but not least was RecipeBridge. Bill Brennan the founder presented what I'd call Google/Yelp meets Recipes. A robust interface and on the target search results provided me with an awesome way to probably construct something with all of the random ingredients in my refrigerator (chocolate sprinkles, BBQ sauce, garlic, chicken wings, beer).

Overall, this was a great first meetup for STeM and I can't wait to see what is next in store...!

Sign up for Stamford Tech Meetup!

Games, games everywhere, but which one?

2010-03-03T12:37:00.003-05:00

Cross posted from Klickable.TV

I like to talk about the gaming concept mashed up with video a lot. I think that it's a great way to build engagement with your viewer, especially with online video. As we know, the video game industry is growing daily while Hollywood (sans Avatar) is shrinking. Furthermore, at the same time, video engagement rates (abandonment) decrease (increase) as the video plays on (from our friends at TubeMogul). We talked about using Klickable TV as a great way to captivate an active viewership that is front of their computer (active) by using a medium that traditionally has been passive (video). One such example is the easter egg hunt. I love the story about the film trailer that skews 30-40 female but once sent to 20+ year old guys that know that there is a hidden easter egg where they can win free movie tickets, their interest in the film increases greatly. We've also discussed creating different "versions" of the same video where a viewer can watch the "Joe" version and then if they want a different experience, they can watch the "Nick" version of the same exact underlying video. Shoot once, capture different audiences forever....(almost).

There are so many different types of gaming experiences that we can create with this platform and a reason why I'm reluctant to provide too too many examples. Once you see how others use Klickable TV you almost feel like this is the ONLY way to use it, which is definitely NOT true. However, I want to get your creative juices flowing and help you find the best way to use the platform that is in line with your goal. As we see from the Tubemogul article, audiences have short attention spans. One user recently put together a mash up of gaming with video using the Klickable TV platform. Their goal wasn't to sell anything, it wasn't to even build awareness; the goal of the video was to collect email addresses of people that they thought might be interested in their product and to have them watch the ENTIRE video from start to finish.

So what type of puzzle did they choose? Easter eggs are a great way to get repeat watches of a video but a lot of the success is based on where the hidden spot is located. If the spot is located near the beginning of the video, the rest of the video may or may not get watched (also dependent on how skillful the viewer is). They actually chose a "puzzle." The viewer had to find different pieces within the video and the sum of all of the parts yielded the answer that they had to send in via a form (with their email of course).

Did it work? You bet. They had ten pieces in the puzzle. And on average the number of clicks per view was 9.5. Pretty darn good. Email your success stories to info@klickable.tv

Wisdom of Crowds Reliability

2008-05-12T13:08:00.002-05:00

Something that's been bugging me lately is why we distrust the so called Wisdom of Crowds effect. To recap the wisdom of crowds effect (coined by James Surowiecki the author of the book with the same name), is that the crowd in aggregate is smarter than any one individual. He tells anecdotes of guessing the number of jellybeans in a jar and the fact that the average will be closer to the actual number than any one guess. Another example is from the popular game show Who Wants to Be a Millionaire? Ask the audience is the wisdom of the crowd, while Phone a friend (which fails more time than not) is the individual. We can also point to the success of Wikipedia which is self policed. Are people spammers? Not when it takes them a while to build their reputation. eBay members, Amazon members, and other such members value their reputations more than anything. Is it a few bad apples that ruin it for everyone else?
Can the Wikipedia model work for everything?

The self correcting nature of the wiki allows for people to police and to ban certain IPs and usernames. Further, the general consensus of the crowd is to create something that is useful for everyone. It is the few bad apples that do ruin it for all. The spammers, the Nigerian princes, the Viagra hawkers. Will the crowd out the spammers, I think so, comments anyone?

Infinite Information - Narrow Minds?

2008-05-06T08:46:00.002-05:00

We live in today's age of infinite information. Never before have we had the world at our fingertips. Google provides us with a portal into the World Wide Web. It's truly an amazing time. With all of this information, don't you think that we'd be more open to ideas?

Here's a reverse point of view on things though, that I'd like to throw out and see what you guys think. Do you think that with so much information and so many tools to wade through this information that we are actually providing ourselves with a more narrow mindset? After all, in college, weren't we encouraged to do everything? With our new Internet tools are we limiting ourselves? An example: Let's say that you were interested in news on the Yahoo - Microsoft merger. You input this into your Google Reader and now Google comes up with other news articles that fit the meta data with Yahoo and Microsoft. So other news items that come up deal with Google, Cisco, Oracle, and other such tech companies. Another example: Netflix and Amazon. You like tech books/movies and AMZN/NFLX provides you with these recommendations. Are you missing out on Shakespeare/Art house films that you might never come across because you've weeded them out with your preferences?

We can even look at a tool like Digg where the Digg community determines what is news. This news is then "dugg" to the top. What if this was the way that we determine what is important? (Note: some Europeans already think that American media is like this). So for example, the latest features on the newest iPhone is more important than the latest updates on the war in Iraq. The results of yesterday's Yankee game is more important than ..... To some yes, this is important.

This fragmentation of information is creating imperfect information. Are we missing out on some things? Do we still need portals to ensure that we have a shared experience? That we all know who won the Super Bowl, that we all know who won World War II, that we all know who the 32nd president of the US is.... (which by the way leads to another post about how we don't need to "store" information in our heads anymore).

Yes the long tail is a phenomenon that will not go away and the Internet will magnify this effect. But is the head of the tail dead? Will there truly be no more blockbusters? Ironically, the day the Long Tail was published Pirates of the Caribbean set all types of box office records. Are we living in a world where we all live in our own worlds? Is there value anymore in the front page of the New York Times, when we can all create our own?

Who Wins from the Long Tail?

2008-05-05T09:23:00.002-05:00

We've talked a lot about Chris Anderson's concept of the Long Tail and the democratization of content. Journalism, film, music and other such "artistic" endeavors are things that anyone can do. The crowd determines who has "talent" and then rewards them with mainstream publicity. And with mainstream publicity comes the ability to reap riches beyond your imaginable belief.

Fast forward to two years from now when the Long Tail is more prevalent than ever. Box office will remain flat, but less people will go see movies (it'll be $20 a ticket after all). CD sales will go the way of the cassette and iTunes will rule but only at 99 cents a track. Amazon will claim that 75% of their sales come from Long Tail books and blockbusters will gravitate more toward the body of the tail. TV...What's that? Everyone will watch "TV" on their laptops when and where they want.

So who wins? There's a glut of video content coming online with the latest being "GodTube" receiving $30 million. Let's assume that there is an effective monetization strategy whether that is pay per view (like JumpTV), pre roll, plinking, or some other strategy to turn this content into cash. Even then, are we giving up control to the power broker (i.e. Google)? That would be as if everytime TV Guide sent NBC a viewer they would get a cut. Hmmm. Are content owners slowly losing control?

With the long tail of content is there an effective monetization strategy that can allow the niche creator to make a living? We've seen with YouTube's monetization that the BreakALeg.TV received an 80 cent CPM. So who wins? Unfortunately (please don't deindex me, Google), it seems to be the broker which is shaping up to be more and more Google/YouTube.

Can Video Ever be Pay Per Click?

2008-05-02T13:06:00.004-05:00

Can video ever be pay per click? Video is a strange beast online. Its not exactly free as YouTube quickly learned after they received their first Limelight bill. Google AdSense works because the cost to deliver these ads to the blogs that host them are so negligible as compared to bandwidth. However, when we begin to talk about video, the economics completely change. Let's take ABC.com as an example. It costs about 11-12 cents for an episode of Lost. ABC charges their advertiser about 25 cents to sponsor the entire episode (this equates to an astronomically high CPM of $250; although they do get to sponsor the whole 42 minute show). This nets ABC 12-13 cents per show. Guaranteed. At this high cost, ABC HAS to guarantee this revenue. Or do they?

Let's look at some other statistics. The average commission from an affiliate is let's say $10. This takes into account big purchases (laptops and ipods) and small purchases (books, CDs) and everything in between as well as the average split of anywhere from 5% to 10%. For a 42 minute episodic, ONE person out of 80 has to buy something in order to break even. 80*$0.12=$10. Add in some type of pay per click revenue at an average of let's say 50 cents per click (everything from a mortgage to a newsletter sign up) and there's a possibility to even pay for video production.

The economics look promising if the model works. Are people ready to purchase items within video? We don't know. But we do know this. YouTube is making $0 on all of those dog on a skateboard videos that we watch. And with HD coming out, the only one that will be laughing to the bank is Akamai and Limelight.

Long Tail Gets Longer

2008-04-17T08:40:00.004-05:00

Is there a way to monetize UGC? The YouTube reports came in and it seems that a popular show on YouTube Break a Leg, received a check for $1600 after 2 million views for an 80 cent CPM. What does this mean? It means that collectively all of our UGC might let someone eat lunch, but its not going to be the creator of that content. Just like Amazon who claims that the long tail exceeds the head of the tail in terms of revenue, the long tail of content probably does as well. But who wins there? Amazon does. By aggregating all of these pennies they are able to make a business. YouTube wins (sort of) by aggregating all of these videos. Is crossing over into traditional media the only way to earn a real living? Bloggers appear to have figured it out: Gawker, TMZ, Perez Hilton, although the latter two have crossed over into mainstream. Further, these are well trafficked blogs. The stars of Internet video (LonelyGirl guys) just got $5 million to continue to make shows. Well if you're an economist this could be a good trend. The monetization for content is creeping down the long tail toward the tail but its stalled in the middle.

Will the long tail ever become profitable for the content creator? Well by definition it means that its content serves a small niche. (sometimes a niche of one). The medical / scientific / engineering communities found a way to monetize this by charging more money for each research paper that you might want to read online. Trade journals are very expensive - $100 an issue. Not because they print on glossy paper but because they (like you) need to eat! And given this high price, most likely they have a highly targeted audience and thus, advertising will be most effective for niche products.

So going back to the long tail, will there be an effective way to monetize? I think so. But right now the Internet is all about scale. If we can cut through that and think about relevancy than I'll be able to continue to watch BreakALeg.tv....

What Do You Really Watch Online?

2008-04-16T09:19:00.002-05:00

PluggedIn launched today with most of the major music labels joining in. As TechCrunch puts it, its the Hulu for music video. The site is a great looking site as its powered by Move Networks - the same company that powers ABC.com and other high quality video sites. Investors include Will Smith and they hope to monetize through ancillary product sales (i.e. affiliate revenue).

I think that PluggedIn could possibly work but here's the catch: You need to take traffic from YouTube. And being that YouTube has a stronghold on the video community it will be hard to do. But what's even harder is the same problem that is plaguing Hulu. The content is NOT EXCLUSIVE! There's a major disconnect between Hulu, NBC.com, MySpaceTV, and the folks that place content on YouTube. Content creators have simply said that they'd like to spread their content in as many places as possible on the web even at the cost of a start up that they co-own. Simply put, if Hulu (or PluggedIn, for that matter) had exclusive access to the NBC/FOX library or to music video they would be hugely successful. Yet they don't. And further, if the content creators really want to have their content all over the place, why do they disable the embeds on YouTube...(yes this is right, see for yourself on Avril Lavigne's GirlFriends video).

What is the reason for this? I think folks are still trying to find an effective way to monetize video. Bandwidth now is a huge consideration and if YouTube is giving it away ... for free.... then that's a tough proposition. Broadcast TV had no marginal cost to deliver programming to every incremental household. Internet does. And when that's the case, you have to go with what you know: free delivery - i.e. YouTube. So until we can come up with a way to monetize more effectively, the answer to 'What do you really watch online?' is simple. We watch YouTube.

The Free World

2008-04-14T08:22:00.005-05:00

Chris Anderson's Wired Article about Free has really sparked many debates and discussions. This weekend I heard more than one viewpoint about free. It's time for a few quick points about it and my view:
[Right now the argument really surrounds music and the proliferation of music piracy.]

With so many iPods sold and only 3 billion songs sold on iTunes - there must be another way that 20 GB hard drives are being filled.
I've learned that a long time ago there was a "tape tax" that helped to subsidize the music industry everytime you recorded a song off the radio (will that translate into an iPod tax?)
The Internet / Bit Torrent / even email has made it easier to "share" files.
Most kids/users don't believe its stealing. (The analogy of sneaking into a movie theater versus getting caught shoplifting.) If you're not taking something physical you're just sharing information, and that's free right?
Ad supported music? Look at what's happening with radio.

You get the picture as to the gloom that is happening with music.

Opponents argue that the music industry has been "ripping us off" for years with $20 CD's (will this happen to software? some argue that it has already).
Do 360 deals make sense to record labels? [this is when the label acts as manager and takes a cut of all entertainment related deals, including when the musician becomes an actor, sells t-shirts, etc] Look at P. Diddy and his Bad Boy outfit. I think only 20-30% of Bad Boy's revenues came from music. The rest was from Sean John, his vodka line, his TV show, etc. P. Diddy is selling a lifestyle and the music is his entree into showcasing it.
Label executives would argue that this works for the Radioheads of the world but what about unknowns? Would an Amie Street model work? Probably not for the labels (at least not now since whether you are a hit or not, you still have to eat). I've heard of the argument that the free period has conditioned us to see the computer as an entertainment center.

So these are the positions and the arguments from proponents on both sides. Will all digital media become free? There's no way. Hank Williams from Why Does Everything Suck blog made a good point. If you take MSFTs revenue and get rid of that, then figure out how to support all of that software with ads, you'll never be able to make up the difference. Never. Ever. Yet, we are conditioning ourselves to believe that digital media should be free. Why? Supply and demand. There's more supply than ever. Look at the hundreds of millions of posts on YouTube. The hundreds of cable channels out there.

To me, I think that this is more a question of psychology rather than economics. I remember what Strauss Zelnick once said about his consumption habits. To paraphrase: If I did it when I was 17 years old, I'm probably doing it now. College kids are ripping music off now, and when they're in that prime spending age, they'll still be doing it. Hank has a further point that companies like Google and VC's are helping to perpetrate this trend right now for land grab. Sure, some sites like Facebook should be free ....

Take a look at the current operating situation for cable. HBO charges you for content. But many people are happy to pay. Sure, you can probably get a bootleg version of Entourage off of Bit Torrent or something, but you've been getting a cable bill for x number of years. And that's a habit. Paid for email? Never!

Media as a broker of other goods and services? If this is the case, is media only good to try to sell you something physical? Do you watch "Lost" only to buy the Toyota that they'll sell you in the fourth ad block? Do you listen to Jay Z only to buy the Roc A Wear shirt he's wearing in the music video? Is that what its come to?
If so, we are in deep trouble.

Has radio and television conditioned us as the consumer to be "cheap?" Take an average feature film. $12 bucks to see it when it first comes out. Wait 2 months and get it on Netflix. Wait another 18 months and see it on pay cable. Another 18 months and get it on network for .... FREE!

Again its conditioning. This is how we grew up and this is what we are used to. Contrast this to things that people will pay for online.

A digital teddy bear on Facebook - $1
The right to customize your penguin on Club Penguin - $5.95 / month
Organize a meetup through Meetup.com - $18
Meet your soulmate through a number of dating sites - ~$25/month
Sell one of a kind items that you probably don't want on eBay - $0.01 - $100's

And the list goes on and on. Why is this relevant? Look at all of these things. They are all new forms of consumption. Why is this smart? Because this is the beginning of conditioning. If we're conditioned to pay for something, we're happy to do so. And if not, then we won't. (the whole, I got it for free before, why would i pay now?)

So, traditional media, unless you can change the mass psychology of millions, we're kind of - let's put in nicely - in a very bad place.

I'm Back But I'm Not Live

2008-04-11T08:25:00.003-05:00

Yes, after a long hiatus from writing this blog, I'm back. What I've been doing? We can talk about that later.....

One of the trends that I've noticed that is catching on like wildfire in the videospace is lifecasting. Made popular by Justin TV, YouTube, UStream and others are getting into it. Why? I don't know. We all know that YouTube's biggest expense (and the other video sharing sites that host their own content) is bandwidth and if you have very fickle users the cost of CDN's and such. (Although I learned last night, admittedly, that YouTube's new API really wants you to use their bandwidth). Now imagine live streaming. Costs for Flash media server. Cost for 24/7 live bandwidth. The number would be staggering. BUT from a business perspective...if you can make more money than that it would make sense.

Now let's look at that angle: Currently videos monetize by a few ways. Pre Rolls, Post rolls, interstitials and banners. Pre and Post rolls are hitting about $20 CPM on YouTube. OK. Let's give banners $10. So at these rates its all about the eyeballs. If we do some quick and dirty math (really dirty math from my last Amazon AWS bill) we can make an assumption that a GB of data costs about 18 cents and that each minute of video is about 10MB. SO... 100 minutes of video data is about 1GB (obviously depending on quality). But to keep it simple let's say that's the cost. So let's say you have a banner and an interstitial (its live so you can't have pre and or post rolls). $30 CPM (on a good day).
Some math:
($30/$0.18)*100minutes/60=~277 hours or 11.5 days.
To break even you need 1000 viewers every 11.5 days.

Doable? Maybe. But the thing that we all have to realize is that no matter how exciting Paris Hilton's lifestyle might be, we all sleep at least 6 hours a day (well some of us get 4!). Are we really going to put all of the video editors out of business? After all these are the folks that are getting us to the juicy parts of the content faster than ever. And what about those bookmarking tools like MotionBox and VeoTag? Do you really want to sit through and watch Justin sleeping (by himself, of course)?

In my mind the economics of live streaming don't make sense, but on a more base level, the entertainment aspect of live life casting is just plain boring. Some events are great live but with more and more life casters out there - its just going to make our Internet slower when we need to sit and watch more important things (like Round 1 NCAA games on Thursday and Friday!)

Customer Service is Your Most Important Marketing Tool

2007-09-04T08:09:00.000-05:00

This past weekend I tried to rent a car from a well known rental car chain that shall go unnamed. Being the savvy consumer that I am, I took a bus out to my hometown in NJ and saved $100 / day by renting in the place where everyone has a car and by returning to the place where almost no one has a car (NYC). Smart, huh? Well turns out they wouldn't accept my debit card. The one with the MasterCard logo. After explaining my situation the customer service rep only said that he couldn't rent me the car unless I brought in a credit card with my name on it. I told him that I wanted to speak to the manager. His name plate said that he was the manager. I've been able to rent cars from every other place in the entire world with the same MasterCard credit card and the one in my very own hometown would not let me rent. Amazing. I tried everything. I called the corporate office, I called reservations, I called everyone (including my dad, who drove me home, and we opened up junk mail which eventually led to my credit card). This just doesn't make any sense to me as to why this one car rental company needs to have a different policy from anyone else. But what really irked me was the customer service rep/manager's attitude. As marketing folks, we spend so much time and effort trying to figure out the best way to have good people buy our products and services only to have one negative experience destroy our career's work. Why do we treat our existing customers so poorly? Look at all of the great deals for cell phones for example. These are only applicable if you are a NEW customer. Think about all of the rewards and loyalty programs that rip you off if you forget to redeem. Enough about my rant, I think one of the things that we should always remember is that the customer is in control and a few flimsy free nights/rentals/whatevers is not enough to persuade that customer to stay especially if the face of the organization (the customer service rep) is rude.

DMCA

2007-08-16T08:14:00.000-05:00

The DMCA ruling is what is so far protecting YouTube from any of the copyright infringements that has been piling up against them. Blogger (disclosure: used for this blog) recently took down a "Facebook Secrets" blog that displayed the source code of Facebook. So - that being said, will people invoke the DMCA every time something goes up that is questionable and / or objectionable? Bolt.com couldn't continue to fight the battle with the DMCA with the mounting legal fees and is now officially dead.

Is an alternative Creative Commons? What's the difference between posting something to your own Web site versus posting to YouTube? Is there one? I think that the pending legislation around the DMCA is really going to change Web 2.0 and the direction that it goes.

My feelings? I think that copyright holders need to be more open and available with their intellectual property. My favorite example goes to the mash ups that were available when Lucas made some Star Wars clips available to fans. Zidane's head butt mash ups were the funniest thing I've ever seen, and probably did wonders for the sport that plays fourth (maybe fifth) here in the states.

It'll be interesting going forward and will change the models of a lot of businesses out there including Google and the other big digital players. We'll keep an eye on this space for you...

TV and the Long Tail

2007-08-10T08:25:00.000-05:00

It's anyone's guess as to whether the acquisition by JumpTV of CyclingTV makes sense. That being said CyclingTV actually has paying customers - $40 a year for 18,000 customers - about $720,000 in annual revenues. JumpTV recently raised $100 million in an IPO and is using its stock and cash fairly wisely (the Cycling deal was 50/50 about). But the disclosure about CyclingTV actually brings up a very interesting point. Are customers willing to pay for content that they really really really want?

I think the answer is YES they are. And maybe JumpTV has the answer - aggregation. The ability to bring the long tail into one market. After all, with only 18,000 paying viewers, how can you pay for anything else other than a basic infrastructure? But with aggregation and shared resources this could become profitable. Paid content surely prevents getting around the guys that sign the checks since there are few advertisements if any. The one thing I'm worried about is piracy for these guys. It's not too difficult for a disgruntled customer to take a stream of Cycling TV and repost it on YouTube. Or is it? I'm not a subscriber but I'd be interested to see what their DRM is....

For the naysayers out there....remember in 1985 (if you were alive back then) when someone asked you to start paying for TV (yes it was and still is free for SOME content). Well guess what that trend took off. Pay Internet TV? Maybe not such a bad idea.

The Bubble is Getting Bigger

2007-08-09T08:15:00.000-05:00

PaidContent just reported that NBC and News Corp's Clown Co, as dubbed by Google execs, video sharing site, received a $1 billion dollar valuation by receiving $100 million for 10 per cent. Earlier NBC Uni launched Didja.com a site where users can watch commercials (similar to TBS's VeryFunnyAds). This follows large VC investments in comedy video sharing sites, $30 million in Video Jug, and a boat load more in Veoh (which MTV exec Tom Freston joined in...hmmmm this could be interesting..).

Well, I hate to say it guys but this is the same exact scenario that happened in 1999 with ecommerce websites (although no lavish parties this time around). Sure, we all want to build the next YouTube but with no business model how can these valuations be sustained and which companies can absorb the loss (and potential lawsuits) of these resource intensive sites? Only a handful and Google is trying to make good on its first purchase.

We need to see a model that works in this space. There needs to be a way for producers to make money for advertisers to make money and for the user to...well the user always wins.

The Risks of Social Networks

2007-08-03T08:11:00.001-05:00

Reported today (via Mashable) was how Facebook lost Vodaphone as an advertiser because its skyscraper ads were placed on the same page as the British National Party (a far right party that wants to rid the UK of all non whites). On that same page were T-Mobile and Virgin Media which so far have not said anything. This is just another example of the difficulty with advertising on social networks. The message cannot be controlled. I cannot imagine actually having someone troll through each and every single page on Facebook to make sure that ads are placed exactly according to the criteria of the advertiser. Does ad placement make Vodophone guilty by association? Were these criteria even given to Facebook?

I think as brands we need to understand what is happening within the Internet and that we cannot control the message as much as we'd like. Look at what happened with GM and their viral video contest. It would be a different issue if Vodophone ONLY showed up on the BNP's page. Regardless, as brands we need to tell media outlets what we definitely do NOT want to be associated with. To have Facebook assume that they don't want to be on BNP's page is ridiculous. We are losing control whether you like it or not so we have to adjust ourselves for it. Provide media outlets with criteria that would cause you to pull your advertising; but don't try to ask them to read your minds...

The Penguin Eaten by the Mouse

2007-08-02T08:09:00.000-05:00

It's official! Club Penguin has been acquired by Disney for a whopping $350 million with bonuses and incentives that could be worth up to $350 million more. Supposedly Disney outmaneuvered AOL at the last moment. We talked a few months ago about how Sony was in talks with them at a valuation of $450 million. The site has 12 million users and 700,000 subscribers paying anywhere from $6 a month to $58 a year. The amazing thing about this site unlike many others that have been bought is that it is a cash cow. The site has margins of 50% with about $30 million in revenue. Talks with Sony and other media companies interested in buying it supposedly fell apart because the Penguin donates a substantial amount of profits to charity.

I think that Disney got a steal here. If you think about the MySpace acquisition about 3 years ago which Fox also stole at $580 million Disney will have a lock on the child market. And unlike Second Life, these are real paying users. I'm not sure how integrated the Penguin will be with other Disney properties and I don't know how good of an idea it will be to do that, but just the fact that you have the attention of 12 million people (I'm assuming mostly kids) is superb. Again, not to bash Second Life, or even Joost, or other download services, but it goes to show you how important it is to keep your product within the confines of the Web. Club Penguin is flash based. Kids don't need to worry about viruses or any other kind of malware and they are able to access their accounts from anywhere - versus any of the software based programs which force you to download onto the local computer. Viacom purchased Neopets in 2005 for $160 million (a very good deal, good job Sumner!) and now there appears to be a showdown between Disney and Nickelodeon for the kid market. What will happen? I'm not sure. But this space dominated by others like Webkinz and Habbo Hotel will be an area to watch.

Long Tail....Dead?

2007-08-01T08:33:00.000-05:00

A very interesting study was published by Chitika and the University of Texas saying that the top 50 blogs generated $50 million in revenue total (via TechCrunch). Not bad. That gives the average top 50 blog $1000 of annual revenue. Of course this number is skewed since Perez Hilton and Michael Arrington aren't really scraping by. Arrington points out that 15% of total blogs accounts for 90% of the revenue out there. That could be true. However, I do believe in the long tail although money might not be the best way to measure it. True, there are a lot of blogs out there that really mean nothing (a teenager's diary, personal notes, family photos) but there are other random blogs that discuss all types of obscure topics, ranging from Transformer toys, to a Shih Tzu's life, to life in Topeka, KS. Someone's gotta be reading these things! And the more niche the blog the better. You can sell toys, dog gear, and local services on the above mentioned blogs, respectively. Sure the big blogs will always work best for Coke and Pepsi type products, but we can now compare blogs and the target demographics to cable television....

I think ad networks have yet to realize the power of the long tail, and until that happens you'll get these skewed numbers....

Whole Wild Forums

2007-07-19T08:11:00.000-05:00

By this time, you've probably heard about the fiasco with John Mackey's forum posting on Yahoo! Finance and other message boards. Using the pseudonym Rahodeb (backwards for his wife Deborah), he posted positive things about not only Whole Foods but about himself and negative things about Wild Oats (the company that they are purchasing). The SEC Chairman Harvey Pitt says that its "bizarre and ill-advised, even if it isn't illegal."

I'm sure this isn't the only time that a CEO has jumped onto the message boards to pump up their stock but I think the bigger issue is one that has plagued the Internet since its existence, Anonymity. As that famous cartoon said, "No one on the Internet knows that you're a dog." Anyone can be anyone else. And that I think was not only frustrating for someone like Mackey but a way to fight fire with fire. I'm sure he encountered many anonymous posters that said negative things about his company that had no basis.

What can we do about this? I think within a year a social network like MySpace will have dropped in value significantly because of all of the anonymous bands, movies, porn cameras, and fake profiles on it. On the other hand, Facebook will continue to grow because of the verification standards that it has and the networks that you have to join. (Don't change this, Mark!) If I recall correctly, eBay has immense value because it is difficult for you to change your screen name (so I can't go rip someone off and then re-open and then rip another person off, etc).

If you realize, the networks with the most value that people come back to time and again are the ones where you can really verify who you are. This minimizes spam, threats, violence, anything that will detract from the true goal of the site! Perhaps this means linking a credit card to your site (even if you are not charged!). This is a tactic that eBay employs. Have other people vouch for you (like LinkedIn or Facebook). But I really believe that the anonymity of the web has to be curbed otherwise the value there will really diminish. (I hope that I don't eat those words when I find an example otherwise!)

Could YouTube be in Big Big Trouble?

2007-07-18T08:10:00.001-05:00

The official numbers on YouTube's dominance in the video sharing space are out. Online video as a whole attracted 75% of US Internet users according to ComScore (via Mashable) that watched 158 million minutes of online video in May. The average stream is about 2.5 minutes. 35% of users use YouTube and YouTube accounted for over 20% of the online video stream total. Wow.

And now the bad news. Dailymotion a large French video sharing site was ordered by French courts to pay $32,000 in damages to a French director (along with the producer and distributor) who's CLIPS were on the site. After the clips were uploaded did Dailymotion begin to use Audible Magic which is seemingly becoming the standard in detecting copywritten clips. But what does this mean? Is this the end of the DMCA as we know it? (As an aside the DMCA stands for the Digital Millennium Copyright Act, and basically says that a Web site has no jurisdiction over what its users do, hence YouTube has been claiming as one of its defenses against Viacom). Will YouTube have to give up its users private information if they are caught infringing? Were all those Zidane Mashups from last summer considered copyright infringed?

We saw earlier this year how Digg went down with users posting the HD encryption key on its site. Will YouTube users also contribute to the backlash by posting copyrighted clips, causing massive lawsuits against YouTube and its parent, Google? And while $32,000 is small change for Dailymotion the video in question were clips. Was this fine some type of relative measure?

Lots of questions here. We're digging to get to the bottom of this and what this means for the future of online video sharing. But we do know one thing. Video sharing no matter what is here to stay.

Commercials as Entertainment

2007-07-17T08:22:00.000-05:00

AdAge's AdReview talks about the Sonic commercials and the well executed jokes and humor in them. The Sonic commercials are an example of commercials that you might not want to fast forward just because they are actually entertaining. (If you TiVo everything, then you might not know that..) But as I've been saying for a while now, the 30 second commercial is dead. So what do you do?

ABC.com allows one advertiser to purchase the entire ad portion during its commercial breaks. It really pains me when I see the advertiser using that time poorly, meaning it simply shows the same non engaging commercial every single commercial break. However, Fidelity had an interesting ad where they asked you very simple questions and showed a simple animation based on your answer. And thus you could do the same with your commercials. Depending on the ad time (still 30 seconds), why not shoot a variety of different commercials that all wove together into one story line?

Interruption advertising is no longer working. It could actually detract from the brand. However, we've all grown up watching commercials so we actually tolerate them. But our recollection is virtually zero. Don't think that commercials have to inform. Look at the buzz created by JJ Abrams new film tenatively titled Cloverfield. It didn't tell us anything about that film yet people are Googling and speculating about what it could be. Let the audience decide whether they are interested enough to find out more from the quick teaser that you give them. If we can make our commercial actually become water cooler talk we've done our jobs.

The Way Things Work

2007-07-16T08:41:00.000-05:00

Another wild weekend with things that we thought that worked not working and things that we thought would never work working. First off - Second Life is dying. At least in a corporate way. Corporations are leaving in droves because the CPM is just way too expensive. While there is a higher CTR the CPM is not justifiable. Secondly - The TiVo numbers are out. And...Direct response commercials are the least fast forwarded commercials out there. Strange. Thirdly - Why aren't people clicking on those Facebook ads?

So those three points are some interesting issues that are going on in today's tech beat. But I think the more interesting thing is the growth and spread of these networks like Second Life. (or un-growth). Why is Facebook so large and ConnectU the company suing Mark Zuckerberg not? So advertising as we know it is changing. Things aren't spreading the way we think they are. A virtual 2D world like Barbie has more users than a Second Life and will soon rival World of Warcraft.

A new world of thought has emerged that is rivaling Malcolm Gladwell's Tipping Point strategy of Influentials well influencing people. It's from Columbia Professor Duncan Watts who believes that its not the influentials but the easily influenced people that make a difference. BzzAgent utilizes this strategy as well. I think though that when it comes to viral marketing and the way that it works it really depends on what you are trying to market. If you are marketing Coke and Pepsi then sure, you should go with the Watts School of thought. After all, everyone needs to drink a soda every so often. And when you're thirsty do you really care if Paris Hilton is drinking a Coke (although you would care if she was drinking a Vitamin Water, which is arguably, a reason for its great rise)? I think fashionable products and name brands work better through Influentials (like Paris). Products where you can charge a premium because its the celebrity's choice, etc. That works. But I think when you are going after mass merchandising buzz (let's say you have a website that let's you create a profile and all you care about is number of profiles, all right let's just say you have MySpace) its a better deal to go after the lowest common denominator (hence the simple yet poor design of the site).

As we've seen before, we've been wrong, but we'll be keeping our eye out on how things grow in this new viral economy.

Jackson's Back - Fortune 500 Beware!

2007-07-12T08:40:00.000-05:00

Eric Jackson is back! He's the activist shareholder behind Yahoo! Plan B and perhaps one of the reasons that Terry Semel was ousted from office. His tools: MySpace, YouTube, a blog, a wiki and never ending energy. Now he's back and has set his sites on Motorola, the fledging cell phone manufacturer. He specifically states on his Motorola Plan B website that Ed Zander of Motorola has led to 13.5% returns for the stock versus 35% for the S&P and 37% for Nokia. Through another social media tool, youchoose.net, he's been able to aggregate 422,430 shares of stock so far (the campaign is 3 days old). Dominic Jones from IRWebReportDaily has some interesting insights into the evolution of the web and how Jackson is taking things to the next level. With low commission online brokerages popping up, ownership in stock has risen to all time highs. Similarly, the web has brought together like minded folks in a type of shareholder activism. However, while people like Jackson are targeting the tech savvy, Jones still believes that true power lies in the "soccer moms" that can pull money out of their mutual funds as the ones with the true power. He cites the Disney debacle a few years ago as the first and strongest of these showings.

Wow. From an IR perspective this could be a logistical nightmare. Before all we had to worry about were the few fund managers and maybe now a few hedge fund managers that owned our stock. Now how do we answer every question out there that every mom and pop shareholder want answered yesterday? While most of these individual investors are not Eric Jackson, we don't know who will be and that's scary. So what's the answer to this?

I think transparency is the key to effective communications with the public and especially to the masses. Apple did it with their defective iPod battery and folks realized that although Steve Jobs is sometimes a god, he's still human. Dell didn't do it with their firey laptop batteries and they paid the PR price. Yahoo didn't admit its mistakes in losing Google, then Facebook, and Semel paid the price. Is blogging the way to go? Perhaps. Johnathan Schwartz from Sun Microsystems keeps a blog that sometimes gets him into trouble.

I think the general public will accept mistakes but they won't accept dishonesty or cover up. Admit mistakes and let your investors know about them before they leak out and there's a PR nightmare....

Interruption Advertising

2007-07-11T08:28:00.000-05:00

There are just some moments in your life when for once, you just don't want to be marketed to. And for Greg Verdino its when he's updating his blog. In his marketing blog, he makes a good point about interruption advertising and how it sometimes brings about bad will to a given sponsor and media outlet.

We've seen that the most successful advertising and media company out there Google lets you choose when you want to be marketed to. And that is the model of the new millenium. With all of the tools that we have to bypass commercials (i.e. Tivo), with all of the conditioning to ignore that we've grown up with, we need to find times when people want to be interrupted with a certain ad.

A tool that I saw last night is really cool. It's called UpNext and right now only works in Manhattan. But its Google Maps on steroids and while it basically launched last night, it is addictive. I surfed around the virtual streets and buildings of Manhattan for a few hours last night looking at all of the buildings and finding out all of the restaurants and bars that I never knew about in my neighborhood. I was happy to entertain that there was a Cuban restaurant a few blocks from my apartment and actually clicked on it to learn more.

Interruption advertising doesn't work. It's an annoyance. If we click on it, its an accident. I read an AdAge article this morning about relevance. Why is Netflix blanketing the world with its pop ups? Sure everyone watches movies, but don't you think real movie buffs would want the 10 discs at a time plan? Why not advertise on IMDB, Yahoo! Movies and other relevant sites? As this blogger said, its virtually riskless in this online space where there's lower production costs and media buys are not as expensive as television. Take a risk, go out there and find a niche and appeal to them. Or else feel the result....Since by now we already know about Netflix and as they continue to interrupt folks like Greg Verdino, they may lose more and more subscribers.

Death to the Page View

2007-07-10T08:30:00.000-05:00

How do you track the popularity of web pages? It used to be that every page that was loaded into the system would be counted as a "view." From here, the sites with the most "views" would be counted as the most popular. However, with new technology like Ajax (think Google Maps, where you are not reloading the page) and streaming video, the page view is no longer accurate. Nielsen/NetRatings one of the bigger ratings agencies online is changing its metric from the page view to time spent on the site (via PaidContent). Right off the bat, we know that Google known for redirecting other people to the sites that they want will drop in ranking. Yahoo with its Ajax filled pages will rise and MySpace will most likely fall as well (poor HTML design forces users to visit new pages). Video sharing sites where users are spending a whopping amount of time will likely increase and crack the top 10.

What does this new measurement mean for marketers? Well, sites are able to use these new metrics to increase their CPM. However, I think we will all know which tactics work best given our demographic. The new measures also don't take into account widgets, which I think given Facebook's API opening will be essential for marketers to know (although technically we could go by number of subscriptions). So once again measurement is all over the place.

Google is going to continue to drop in terms of time spent at least with their flagship search product but I still think that contextual search and SEM are the best ways to bring folks into your online store and convert them (since they are looking for you anyway). We all know the addictiveness of social networks and email but if you leave your email open all day (as Mashable suggested) are you really engaged with the banners on there as well? Does Yahoo or Gmail have the right to charge more for these pages? Similarly we also know that sites like YouTube will rank higher but is anyone watching the ads?

I don't think the new metrics are going to tell us anything that we don't know already. It may give media companies a way to charge us a higher CPM, but I think that we know (hopefully) the ways that our target demographics use the Internet. Whether its through banners, Facebook widgets, etc, I think the best way to measure is by ROI ....

When You Pay For Something That's Free

2007-07-09T08:27:00.000-05:00

There's been a lot of techie hype over Kevin Rose's lastest start up. (Kevin Rose is the founder of Digg). Pownce is a P2P way to send "messages, files, links, and events" to your friends. But outside of this, is the fact that Pownce is still in Beta. Not much different than other Web 2.0 companies and to limit their testers Pownce is only letting folks with invites join. Again, not much different. What is different is the artificial marketplace that has surfaced because of this. Remember Gmail? Gmail invites at one point were hitting $200 on eBay. Now Pownce invites are ranging from a starting bid of 1 cent to a buy it now of $9.99.

I'm not sure who is posting these invites for sale, but could it be Pownce's own team? While Pownce cannot charge (it would be against the Internet's business model), folks with invites can create an artificial market and therefore make each free invite somewhat valuable. If they can do this demand is going to outstrip supply, which will create a buzz around this "free" product.

I don't think that Pownce has the name recognition that Gmail did at this same point for it to work. Also, how many people are willing to pay for this? It's not the same as Gmail which is interoperable with other email addresses. Right now there were 3 bids for Pownce invites and other sites like Mashable and Techcrunch give these invites away for free.

We'll see how this strategy works, I wouldn't be surprised if it backfired, although some blogs have picked up on the artificial marketplace....

Piracy Crackdown

2007-07-06T08:41:00.000-05:00

Yesterday in New York City, Kalidou Diallo was arrested under the city's new anti-piracy laws when he was caught recording the Transformers on his handheld camera. It's definitely a move in the right direction to protect copyright but is it enough? Lawrence Lessig has been moving towards a copyright free world with his Creative Commons effort and in the Internet world it appears that this is the only way to enforce things: by not enforcing things.

Diallo was caught recording the Transformers and his plan was most likely to sell the "bootleg" on the street for 100% profit. His business model would have him, the retailer, winning, you, the consumer, winning (because you would pay a reduced price to see the film), and the producer, Dreamworks, losing (they don't get to collect a fee for entrance). In essence this equation is shifting power toward the retailer. But if we think about traditional television the equation is also changing. Previously it was: the user pays (with his time), to watch commercials that the sponsors create, in order to get to the content. Thus the brands get your attention, and for that attention they pay producers to create content that you want to watch but will put up with commercials to get to. Now the equation is changing with TiVo and DVRs. Now the user doesn't pay, but brands are still paying. Content is still being made so there's an imbalance. Who's losing? It's the same case as Diallo - the guy footing the bill. In TV its the sponsors.

I think that pay per entrance still works. After all, you get the luxury (at least in some theaters) of comfortable seats, big screen, shared movie going experience, and last but not least, new cutting edge content. It's worth $9 ($12 in Manhattan). But TV? In the comfort of your own home you can do anything...including stealing content. There are legitimate tools out there that make this easy for you to do. In the old days you could just tune your brain out but now you don't even have to do that. And with tools like Apple's ITV how can we continue to justify television broadcast and more importantly, costly national media buys?

True, there are some events out there like the Super Bowl, and other sports, awards shows like the Oscars, and other "events" out there (last episode of Sopranos for example) that are worthy of getting a large audience together at the same time. But for the most part we want to watch what we want when we want. I've been an advocate of product placement for some time and I'll put this one thought in your head of cross generation product placement with a strange product known as the female sponge. In yesterday's AdAge the mention of the contraceptive sponge as used by Elaine in Seinfeld, demonstrated the power of perfect product integration. The product had recall among every generation and with the power of Seinfeld's syndication network, even stronger. Now are you Tivo-ing through that?

One last thought: the folks that paid for the production, namely GM, although I haven't seen the movie yet, would probably want this movie to get around as much as possible, although now that I think about it, if you are bootlegging a $10 movie, you probably can't afford a $30,000 Camaro.

The Hype

2007-07-05T08:46:00.000-05:00

Well even if we have been living under a rock, we would have known about Apple's iPhone release last Friday at 6pm. In fact that was single handedly the only piece of news out there in the tech community. But some of the stats are in (via TechCrunch). As of Sunday, Apple and AT&T moved 700,000 iPhones. Apple sold out in 95 of its 164 stores. The larger phone which was calculated at a cost of $220 and sold for $599 and the cheaper phone at a cost of $200 selling at $499 gives Apple somewhere of a $200 million + weekend IN PROFIT (less marketing costs, we'll talk about this later).

It's an amazing phenomenon. People were in line as early as 5am on MONDAY, a whopping FOUR days before the iPhone went on sale. How much marketing was done? Very little. If memory serves me correctly, a Super Bowl ad. That's it. The rest was Jobs talking at various conferences and user generated hype. How sustainable is this? If the iPhone promises to change the way we do telecommunications...a lot.

But what really interests me is the artificial hype that was created about this phone. Sure its a beautiful phone and this past week, when I noticed someone with the phone it made me turn my head, but never before has a phone really made this much impact. A phone as status symbol. Only Apple could do it. The Sidekick went for the young hipsters, the Razrs went for the mainstream, but the iPhone did it right. I'm not sure why but it did.

There are many Apple evangelists out there that support anything that Jobs does. I don't know if its a function of that fact that he's going up against the evil empire in Redmond led by evil Bill Gates and that in a way he's still David versus Bill (Goliath). But there is no other brand that has much loyalty as the Apple heads. And I cannot figure out why. You'd think that there'd be diehard Yahoo guys against Google, but there aren't. Wii versus Playstation. Nope. The only one that comes close and this is very distant are MiniCooper owners who seem to have formed a click. And for that fact other rare car owners (see Larry David's Prius episode).

But these supporters came out and did what Steve wanted them to do without him asking them. They just read his mind. They blogged about it, they created mock commercials about it, they waited in line for days, they thought about it, they drooled about it. Over a phone. Over an IPHONE. The fastest selling gadget of all time - people are trading off weeks of food for a $600 phone! And I bet you if it weren't for all of the mumbo jumbo that you have to deal with when you go to a cell phone service contract they would have to sold more. Which leads to my final point of sustainability. Sales will be sustained....but now the ball is in AT&T's court (which so far have not been positive)....

Lessons from Online Video

2007-06-29T08:52:00.000-05:00

Dotcomedy was reviewed today by Mashable. It's a Funny or Die wannabe that is ad supported by NBC. The difference with this is that there is no UGC here - all content that is posted is reviewed by NBC's editorial staff. So only the best clips make it on there. Will this model work? Well, at least we won't have to wade through that much stuff, but perhaps volume is still the way to go where people will find something that appeals to them.

What's interesting are some of the comments from the OMMA video conference as reported by PaidContent. Some of the highlights include:

Video Ads need to rely on visual rather than audio - most users have their sound turned off or low
CPMs are hitting $5-$15 for semi professional user generated content (Heavy.com calls this SPUG)
Greg Wilson from Red Bull Tiger - One other thing he doesn't want is product placement. "It's a crock. When someone holds up a bottle of Evian on TV, is anyone being fooled? Is anyone being enticed? It's only being done because we can't think of anything else to do."

So that's another week in the wild west of online video. It appears that more and more brands are turning toward branded entertainment, but the big issue is still search. How can we find videos that are relevant and interesting to us? Will these ads pop up? Some but not all. The sunglasses falling on my face video was sponsored by Ray Ban but for everyone of those there are many more viral ads that barely make their view count out of the 100's. Are those considered successful? What are the metrics here? Greg Wilson's comments take out product placement, but what are our alternatives other than sending someone over to sit next to you and talk about products. I think that technology has been maxed out here. After all, you can't control content, filmmakers will make whatever they want. How do we get this stuff paid for?

MySpaceTV looks a lot like YouTube - Prom Queen stats

2007-06-28T08:29:00.000-05:00

MySpaceTV launched today and it really does look very similar to YouTube. Besides its cluttered landing page which is stuffed with banners, MySpaceTV has nearly the same exact layout as YouTube, which isn't necessarily bad. MySpace users most likely have visited YouTube and know that site fairly well. All they need to do now is hang onto their traffic instead of direct it to YouTube. Given that it launched today, I'm not going to discuss their very slow load times as I'm sure they are working out the kinks, but I think that with all of the folks that YouTube pissed off (especially on the pro content side) MySpaceTV is a viable alternative. It's already #2 and with this new setup could overtake the top spot. The more I look at it, the more its an EXACT copycat of YouTube. Everything from the layout to the categories to the way that its sorted (although some of the things don't really work).

An interesting point to note about MySpaceTV is that PromQueen received a majority of their traffic through the social network. I'm looking at the PromQueen page and seeing that different episodes get a different number of views. I would expect recap episodes to have a low hit count, but some of the videos that have low hit counts just don't make sense. Granted I haven't been watching so perhaps the prior show lead in was weak or there was some type of grand PromQueen promotion....But the variance of views goes from a few hundred thousand to 20,000. Strange huh? Is that really the way that we consume our video? I would compare all 80 some episodes of PromQueen at 1:30 each to a 2 hour feature film. Are we really that impatient that we will skip the boring parts and fill this in with our own perceptions? My initial feeling was that Prom Queen episode 1 would be the most watched. It's not. It's episode 20: Off like a prom dress with 1.2 million views. Could that have been the day that Prom Queen was featured on the front page of MySpace? Or was episode 19 really that good? Was it the name of the episode? Because episode 67 was called Naked n the Rain and that only received 139,000 views. I'm glad that MySpaceTV captures all of these YouTube like metrics (and hopefully more) as we'll soon be able to dissect our viewing habits.

Overall, I think that MySpaceTV is going to give YouTube a run for its money. Why go onto two sites when you can simply stay on one?

Social Networking at an All Time Buzz

2007-06-27T08:16:00.000-05:00

The words couldn't be out there more: MySpace, LinkedIn, Friendster, Bebo, Facebook. All of them are useful sites. All of them are addictive sites. But what are they really worth? Yesterday we talked about the demographics of MySpace versus that of Facebook. Today, we're going to talk about the value. Yesterday a few pieces of news turned our heads toward this social network phenomena again. LinkedIn, as broken by Reuters, could be planning an IPO "as early as next year." The site claims to have about 12 million users and expects $100 million in revenues by next year. Then, the guys that started it all, Chris DeWolfe and Tom Anderson, the founders of MySpace asked Rupert for 50 million bucks for the both of them for two years. Again, many speculate that this request was to cash out at the height of the social networking revolution. So far no news as to whether Rupert will grant this request. And just to throw it in the mix, Facebook is still independent although rumoured at at least one billion dollars (and I guess given the more educated demographic with more disposable income, possibly worth it, given the $580 million spent on MySpace).

All of this money being thrown around for user generated content platforms. Is this the height of the social networking that we've seen prevalent since Friendster days? Why are these guys looking to cash out? MySpace is nearly saturated with users, coming up on 200 million. Do they think that social networking has maximized its growth? An interesting book that I read lately is The Cult of the Amateur where the author talks about how all of this user generated content is ruining us. Is this what the owners think? Do they want to be distanced from their creations?

Regardless of their reasoning, every new website out there now has some type of social network component. The ability to not only gather information, but to find like minded people regardless of geographic boundary is extremely valuable. But upkeep to these sites is a major task at hand. Again, we'll keep an eye out on how these social networks continue or don't continue to grow.

MySpace versus FaceBook

2007-06-26T08:46:00.000-05:00

An interesting study by Danah Boyd that we've been pointed to by Mashable, looks at the socioeconomic differences between your typical MySpace user and your typical Facebook user. Overall, she concludes that Facebook users are more educated and "good kids" while MySpace users seem to be those that are "bad" and that live in the fringes of society. Income had little to do with the outcomes of the study as a struggling actor/waiter making $12,000 would fall into the Facebook camp and that the differences emphasize a matter of upbringing. She also notes the banning of MySpace in the military while Facebook is still allowed and used by most officers. Finally she notes the cleanliness of Facebook's white background as opposed to the clutter and noise on some MySpace pages.

The results are not of a surprise if you look at the origins of both social networking sites. Facebook started at Harvard and while the network is open now to anyone, you tend to be on networks where your friends are. Hence, Harvard folks are friends with other educated folks and so on. Further, prior to opening up, you needed a .edu account to join Facebook. On the other hand, MySpace started on the fringes with the underground music scene. Soon it spread pretty quickly, but with anything mainstream, pretty soon everyone's on it. I think MySpace has lost the most value recently with the openness of the site. I get more spammers posing as lost 20 year old girls than real people, more bands and films trying to build a following, and more people that I don't know that want to be my friend.

I think that in the MySpace world - it's all about carving out your piece of the Internet; you have your own URL and many use it as a "resume" of sorts. In Facebook, its true social networking. You can't link to anyone randomly. That's the benefit of sites like Friendster and LinkedIn. To get access to others, you must REALLY be my friend (although there's a bunch of ways to get around this). Is that what Danah Boyd is trying to say? That socioeconomic upbringing is about me, me, me? Ego is everything? That kids understand why they went to Harvard, not necessarily about the education, but about your classmates and building networks? The interesting thing is that we can now track how Facebook will grow given its open nature and see if this is true.

Revision3 raises $8 million

2007-06-25T09:27:00.001-05:00

Digg Founders Kevin Rose and Jay Adelson have raised an additional $8 million for their Revision3 website. The additional capital should allow for Revision3 to add to its 10 show slate and to expand its website and operations. The most popular of their shows Diggnation is advertising supported but has a very interesting business model where the hosts actually talk about the products (kind of like Howard Stern). The shows hit the geek demographic with shows that are called Ctrl-Alt-Chicken, Pixel Perfect, and XLR8R TV. It also allows you to take the content on the go with QuickTime downloads. Their Flash player from BitGravity is also a solid high quality flash player. Overall, a pretty solid product and the best example of monetizing online video to date.

Video AdSense - Relevant Ads

2007-06-21T08:33:00.000-05:00

Remember Blinkx? It's the publicly traded video search site. Mashable reports that Blinkx will soon be offering an advertising network based on speech recognition. So whenever a certain keyword that advertisers bid on either shows up in Meta tags or within speech, the ad will be shown in pre, post, or mid-roll ads.

This is definitely an improvement from Revver's model of fitting an ad in (at the end) that users have to click. Relevance should improve the response that advertisers get. How well will it work? Well the service hasn't launched yet, but I'm going to preface my statements by saying that Blinkx's service is definitely something that we need in the online video space. YouTube is doing something similar but there is only so much information that you can mine from meta tags. With the ability to actually gage what someone is saying, you can really figure out what the content is. That'll really be of value to the entire food chain of users, content creators, and advertisers since more relevant ads will be served to users, content creators will make more money, and advertisers will be minimizing wasted eyeballs.

Great. Or is it? Again, I'm not sure how Blinkx's software will work, but context is everything. Let's say Apple wants to buy the phrase Apple Computer. So everytime Apple Computer is said an Apple ad should run. Well, I think that you can see where we might run into some problems. What if I have a video where a character says "Apple Computer sucks" or "Apple Computer is a piece of s--t" or worse yet "Shove that Apple computer up your..." you get where I'm going hopefully. So then the video that bashes Apple becomes financed by Apple. Probably not where Apple wants to spend its ad dollars. The problem with this model is still that we need some type of human intervention to determine the qualitative parts of the video. It's similar to MySpace problems where advertisers didn't want to purchase ads or even AdSense because they were not sure of the context of the page. Context is key and while keywords will help in relevancy and is a step in the right direction toward advertiser AI, we still have a while to go. In the meantime, good job Blinkx for taking us one step closer to free content and relevant commercials!

David Beats Goliath

2007-06-19T08:18:00.000-05:00

We've been talking about this story for a while....Activist shareholder Eric Jackson using Web 2.0 tools (social networking, his blog, a wiki, YouTube, MySpace etc) to organize Yahoo shareholders against Yahoo management. Well, unless you've been under a rock yesterday, you would have seen that Terry Semel, the man that Jackson was calling for to step down, resigned as CEO of the company to be replaced by Jerry Yang, co founder of Yahoo and one of Jackson's suggestions. I'm not saying that Jackson single handedly caused Semel's resignation but what I am saying is that Jackson was able to control a little under 2 million shares with his 100 shares from these Web 2.0 tools and a bit of publicity.

The story here is not necessarily one of how Semel stepped down but its about how good ideas can be spread rapidly through these new Web 2.0 tools. Diet Coke and Mentos was another interesting idea that caught on because of online video and its popularity soared with the video sharing sites (including YouTube). Ipods dirty secret also attracted many viewers and caused backlash against the popular mp3 player. The Dell laptop fires are another. Communication online is becoming ever more transparent and the Jackson example is an extreme one of how one person asked how Semel was able to justify his salary and his options given how Yahoo has fared against Google. Sure, the rest of the Street also did not favor him but I think that Jackson proved that sometimes a meritocracy works.

On the other hand, I'm sure IR folks that read this blog are wondering about how something like this could affect their company. No one wants a guy like Jackson against you. He's relentless. However, I think Apple's response to dirty secret is the suggested way to go: Admit that your product is not perfect. Dell tried to sweep the dust under the rug. Bad move. People will out you and your deception will simply add fuel to the fire. Be open. Admit mistakes. Admit that you're not perfect. No one can fault you for that. Not even Eric Jackson (who is now having dialogues with Semel according to his blog).

Brave New World

2007-06-18T08:21:00.000-05:00

TechCrunch alerted me to a very interesting YouTube video created by Davide Casaleggio that appeared first on Read/Write Web. The video talks about the future of the Internet in a 1984 / Brave New World style. A bit creepy where everyone is connected online via avatars or as the video puts it Agav, an agent avatar. Second Life, Amazon, and Google are the short term winners but Google eventually rules the world in 2050. The Agav's have five senses built in so that you can trade experiences with anyone (i.e. Joe's European vacation can be yours too!)

The video is definitely creepy and I hope that avatar interaction never replaces real life interaction (although for some MMORPG's this is already reality). However, it really gets you to think about where the Web is going and how much more we can exploit by making the World "flat." Thomas Friedman's book, The World is Flat, already discusses how small the world is when you can pick up your VoIP and call around the world or email or IM someone in India for example. With Agav's this will give you the feel of knowing someone without knowing someone. However, the video also brings up an interesting point that "No one on the Internet knows that you're a dog."
I think that if this is the main way that we begin to do business, there will be ways to assure folks that you are who you say you are. Stronger security and identity measures will need to be in place.

And then finally we run into this cultural problem. The root of all of our problems right now. (I don't want to get political here but...) Online culture will be dominated by who has the most dollars. At this point, its the USA. Will US culture be the dominant one online? And if so, what are the repercussions? With information and culture so available, will other cultures be completely forgotten, destroyed, or wiped out?

Interesting points here but I think one thing remains is that one mile is one mile and that local news will always be of interest to the users. I spoke about local and the big market opportunity that this is. I think that overall the Web will be used for understanding of culture (hopefully) but the ability to broadcast your culture online and for others to respect and learn about other people. After all, like the movie Babel, misunderstanding is the root of most problems. Could the Web be that next Tower of Babel? Remains to be seen....

Virtual Worlds Online

2007-06-15T08:22:00.000-05:00

We've all heard about the media success of Second Life; the addictiveness of MySpace; and the large valuations of Club Penguin. Just launched is the Virtual Lower East Side which is an avatar based approach to location based social networking. So take the best of all of the aforementioned products: the avatar based Second Life, with the social networking aspects of MySpace, together with web based aspect of Club Penguin. Just like MySpace, VLES is starting as a tool to bring bands together with their fans. Interesting play, and I think that we could be seeing more of these web based virtual worlds, especially as bandwidth becomes less of an issue and Flash continues to pack in the power in small sized bytes.

Virtual Web based worlds are very interesting to the marketer since we have clearly seen the power in social network marketing and the power of word of mouth. However, what the virual world allows is also a chance to build a strong robust application with little capital outlay. What does that mean????? MySpace really didn't have a strong business model until it reached a critical mass of users and even then CPMs are reaching $30 or so. YouTube didn't have any business model at all (and still might not). These virtual worlds do. Club Penguin charges $6 a month to customize your penguin and users gladly pay. Second Life items cost real money and users gladly pay. Not all users but some and I think that will be sustainable enough for social network and virtual world builders to build a robust application and will allow for more entrants into this brave new world.

Will MySpace become virtual? They have the easiest userbase to do so with. But will it happen? I doubt it. The code that MySpace is written on is so unstable that if we were to have some virtual users and some static users we'd crash the system. So there's an opportunity here! Could VLES be the next virtual MySpace in the 3D Web 3.0? I don't know. But I do know that there's an opening here for someone to create a rich application with decent cash flows that if successful will probably rival a valuation like YouTube's. (Since MySpace was bought for $580 million and Club Penguin was flirting with $450 million at a fraction of the users of MySpace).

Value of Portals

2007-06-14T08:18:00.000-05:00

I'm going to write today about how portals have really changed the way that we do business. Before (and I mean back in the old days prior to 2000), we would register a trademark and a company name and really blast that trademark out there and build goodwill as well as brand recognition. Companies like Coca Cola, McDonalds, IBM, Apple, and others were extremely valuable and most of them really were marketing companies (Apple for example gets most of its parts overseas and simply assembles them to sell to you). Today, these brands are extremely valuable as end products. However, online, purchasing these products has never been easier or more competitive.

Think about how your web browser fires up. It usually opens to some type of portal page (most are set to Google). In fact, the most searched for term every month is "MySpace" or some variation of. So that really does change the way we do branding. If you are selling the latest no frills mp3 player, how can you compete against iPod? You can't, but you can optimize your website to be on the first page of search results.

In fact SEO (Search Engine Optimization) is a ever growing field where firms charge anywhere from a few hundred dollars to a hundred thousand dollars per month to ensure that your site stays on top. And usually if your site is on top, very few people pay attention to your URL. So even if you have a www.icouldntbuyashorterurlbecausetheywerealltaken.com it won't matter because people are clicking on the link anyway. Which leads back to making sure that your page is optimized for those terms that people search for. There are a bunch of different tools out there that determine "keyword density" and a bunch more that tell you how often a given term is search for.

Overall, if you are running an online business (or conduct more than 50% of your business online), I would think about hiring an SEO firm before you purchase another full page color ad in the New York Times.

The Tipping Point

2007-06-13T08:37:00.000-05:00

Something that I've been looking at is why and how things "tip." How does a site like YouTube go from 0-60 in 3 months? Why is MySpace the premiere destination for social networking? Has Second Life "tipped" or is it still a geek's toy? Why did FaceBook grab so many users? Let's look at some thoughts into why these things happened...

YouTube - YouTube was launched by Steve Chen, Chad Hurley, and Jawed Karim, exPayPal employees in November of 2005. Shortly thereafter (around December or January) the trio has no one but the copyright infringer who uploaded SNL's Lazy Sunday to thank. Traffic spiked at that point. And even more traffic came to the site when it was reported that NBC asked them to take it down. But by then it was too late, YouTube was the "it" place to be for user generated video and any kind of online content.

MySpace - MySpace was founded by the friendly Tom Anderson in November of 2003. It started as a site to share music and eventually became "a place for friends." MySpace could be attributed as one of the first successful social networks that really brought about the entire Web 2.0 revolution. However, traffic for the site didn't really tip until what I think was the entire Friendster debacle. Friendster arguably the first social network, was experiencing slowness and server difficulty. A message was sent around Friendster saying that they would start charging and that MySpace was free. Many addicted social networkers flocked to MySpace and that was all they needed. With the newness of social networking, MySpace quickly grew and that rolling stone gathered enough momentum that MySpace is a household name.

Second Life - Second Life is the avatar based role playing world. So far its received a lot of attention in the media and by brands. However, as you can see from the chart, it still hasn't tipped. I think that its a combination of things here and one of the big barriers is the user experience. Second Life for the non techy is hard to use. That's agreed upon. Secondly its a separate software download. That's a pain. Compare this with Flash based ClubPenguin who's traffic is slowly creeping up on SecondLife, and was recently offered $500 million from Sony.

Facebook - The darling of Social Networks - Facebook was rumored to be worth in the $2 billion range. How did a dorm room start up at Harvard become one of the most valuable properties on the web? The chart below shows how Facebook really hit straight up growth in the beginning of 2006, which corresponds to their high school out reach. But why did all of these high schoolers want to join Facebook? I think here the tipping point was based on what Malcolm Gladwell calls influencers. And there are many influencers at Harvard the birthplace of Facebook. Would Facebook have survived if it started at another school? Princeton? Perhaps. University of Middle of No Where? Probably not.

I think that its interesting to look at the different ways that these things "make it." YouTube had a unique piece of content, MySpace was positioned at the right place at the right time, and Facebook had influentials behind it. What will it take for Second Life or the plethora of Web 2.0 companies? Sometimes its dumb luck.

The Best of 2.0: Video Meets the SocNet

2007-06-12T08:21:00.000-05:00

PaidContent brought OurChart.com to our attention this morning. It's a social network based around webisodes that are loosely spun off of Showtime's The L Word. It's worth noting that the Long Tail social networks centered around content seems to be working. PaidContent reports 72,000 users and over half a million hits thus far and there's only one episode up (although the social networking aspect appears to have taken off). The creators report that the show came first and then the SocNet was built around that.

OurChart.com and GirlTrash (the webisode series which is clearly NSFW!) is a perfect example of how the Long Tail works. Our favorite Web 2.0 applications, web video and social networking come together to bring a certain demographic together, in the case of OurChart.com, lesbians. It's certainly a very specific demographic that is valuable to some advertisers (most of the banners I've seen are for content from Showtime's The L Word, to XM Satellite Radio's LGBT "The Agenda" programming, to a True Colors concert series. While the numbers are not staggering like MySpace or Facebook, this is a very targeted demographic where advertisers know that every pair of eyeballs could be a potential customer as opposed to a MySpace where there are many "wasted" impressions.

The combination of professionally created content around a social network seems to be a very powerful combination. I'm very interested in how other content can be as perfectly segmented as GirlTrash and OurChart. There hasn't been much content out there that has a definitive audience as GirlTrash. Perhaps a WallStrip and StockPickr joint venture is next?

Video Roundup

2007-06-11T08:22:00.000-05:00

Babelgum launched over the weekend (Friday to be exact I think) with some mixed reviews. Babelgum is in competition directly with Joost for quality P2P delivery of content. Lacking content (although Babelgum has Spike Lee on his side), lack of social networking, and difficult interface are some of the problems that have been cited with for Babelgum. Well, Joost started somewhere too right? I think Joost has the high profile of its founders which led to some great content partnerships and if Babelgum can do the same....

One of the early pioneers in video revenue sharing is Revver. Unlike pure views count, like Metacafe, Revver shares revenue with content creators by sliding a clickable ad at the end of the video. If a viewer clicks on it, then they are brought to the company's website and everyone gets paid. Well, Mashable reports that CEO Steven Starr is exiting the company six months after its previous CEO left. What's happening at Revver? Perhaps people aren't ready yet to click on ads at the end of a video?

Eefoof relaunches as VuMe. Reviews came in as somewhat negative and I think the only differentiator of VuMe from other video sharing sites is that revenue is shared based on actual revenue instead of video views. We'll continue to watch what VuMe is doing in this already crowded space.

Finally, my friends at Four Eyed Monsters have placed their entire feature length film on YouTube. It's the first feature available on YouTube at a whopping 72 minutes. And my friends tell me it'll be available for a week, which could be steps toward YouTube protecting their content? (Or I guess someone could suck down the video and reupload in 7 10 minute clips?) The film is actually also a pioneer in this space with a real relationship being started and grown through podcasts and technology. Pretty cool.

Social Networks on the Go

2007-06-08T08:33:00.000-05:00

Sprite Yard, a mobile social network created by Coca Cola, will be launching on June 22 in the US. The social network launched in China last week and Coke hopes to have a global presence relatively quickly. Using simple bottle cap printed codes, Coke will give users the ability to win downloads, webisodes, ring tones, even virtual items in Second Life. However, with only one way to access the social network, will this ever be able to build a critical mass?

Old economy Coca Cola is definitely pushing the envelope in digital marketing and media. After having missed the boat on the Diet Coke and Mentos phenomena, Coke is making sure that they allow for their brand to be fully interactive. They've been one of the first to hop on the Second Life platform and with this social network, one of the first that I've seen to create a social network purely in mobile form. However, we've seen many problems with the mobile platform that may provide a difficult time for Coke to build an audience, at least in the US.

Segmented mobile carriers and lack of standards. CDMA, GSM, What? The US market has four major carriers and two major standards, whereas the rest of the world is mostly on GSM networks (the ones that T-Mobile and Cingular use).
Walled Garden Approach. I think that this primarily applies to Verizon. I can't type in a WAP enabled URL into Verizon without it going through some kind of Verizon proxy server to make sure that I'm not accessing T-Mobile's site through Verizon's network. I can't blame them but definitely a barrier to innovation.
Too many Handsets! The carriers aren't the only ones to blame here. There's so many different types of handsets, resolutions, color schemes, etc that to develop for mobile means that you have to develop for hundreds of different phones and types. QWERTY keyboards, keypads, a combination of both (Blackberry Pearl), etc. Agh!

But all is not lost. Coke will definitely be positioned for first mover advantage when things change with the carriers. I think they realize the value of content over their networks but the behemoths of companies are moving so slow that who knows when this might be. Some of the things that Coke has going for it:

Brand. I don't want to pull apart Coke's balance sheet but I'm sure Goodwill is a pretty hefty figure here. People will recognize Coke and realize that its okay to interact over your phone. But then again look at Bud.tv.
First mover advantage and campaign integration. The same message over multiple platforms. Coke's size and clout allow it to do this. Integrating their Second Life with their social network with their web with their print with their TV etc. creates for consistent messaging and a better user experience.
Mobile's Hot. Kids and teens (the target market) are probably regulated by what they can do at home. Parents have all kinds of mechanisms to restrict Web sites and watch what their kids are doing. But on mobile, you can go anywhere and do anything. Kids like that. Parents don't. But mobile has other advantages like constant communication and that wins out. I think that until someone creates a monitoring device for mobile (which will probably be soon) kids will love that medium more than the computer.

I think its great that Coke's taking the plunge. The pros and cons are fairly even. I'll track what happens in the space and to Sprite Yard and watch for the launch on June 22!

Some Interesting Numbers

2007-06-07T09:53:00.000-05:00

Frames of Reference, a study from Online Publishers Association, (via paidContent) released a study regarding online video advertising. Some of the highlights from the study:

30 second outperformed 15 second
52 percent of users take an action (learning more to purchasing)
News was number one, followed by weather, and then humor
Companion ads (static banners with video) were most effective

The results of this study are pretty interesting especially for those of you living in New York exposed to the branding campaign that NBC Uni is promoting (via bus shelters and phone booths) about how they are innovating beyond 30 seconds. I'm also very surprised about the high number of users that take action following a video ad. Personally if an ad is irrelevant to me (for example on ABC.com) I can't wait to "click to continue" as soon as my requisite 30 seconds are up. So this means that somehow, ad servers are serving up relevant ads. I'm not sure how since YouTube is barely rolling out there new ad serving product, but I'm curious if anyone out there knows what they are doing. Companion ads are kind of an obvious thing which is what ABC.com does. No brainer there. Content wise I'd also agree that news and weather are the most watched. And again this is fairly obvious. We live in a world of Long Tail entertainment and the only common thread that everyone on the planet shares is the passage of time. So keeping up with what's new and keeping up with how you should dress (if its cold or warm, not fashion) is pretty obvious.

Marketing wise what does this mean? Well our intuition is wrong but the study is a bit fuzzy as it mentions that results were taken from 1,422 online video users. Are they YouTube watchers or ABC.com watchers? A mixture of both? Joost users? After all ABC.com only has 30 second companion ads. Also the numbers are fairly small. And of course if you have to sit through 30 seconds you will have better recollection than if you sat through 15 seconds. So this result could be skewed.

The big (and best) part of the study is the high call to action provided by those surveyed. This shows that users are not only in there for a passive experience but have their fingers on the mouse button ready to click away. It's a great sign that we're ready for interative TV.

Will this Change Everything?

2007-06-06T09:16:00.000-05:00

The much anticipated iPhone is launching in less than a month (June 29th). The implications are amazing. Many are finally predicting a convergence between Internet and mobile, Media and Commerce, and location and information. User generated commercials have popped up online.

However, is the iPhone as big of a deal as we think? Of course Apple is going to hype up their latest product which they hope will be as big as the iPod. Apple, though, is limited by Cingular and with a price tag of $499-$599 by wallet sizes. (Unlocked phones I hear are going for over $1100). I think the biggest breakthrough though with the iPhone is the touch screen interactivity of it. With this, there will be no more need for clunky QWERTY keyboards and t9 guessing algorithms.

Smaller devices will come out that can take advantage of this, being not only a phone, but a web browser, a camera, MP3 player, and camcorder ... all at the same time! But how will it affect marketing? I think the implications are obvious. Text messaging while powerful and popular will become even more when rich media can be delivered on the spot in relevant locations. Users won't be limited and programs won't have difficulty reading varied responses when web like applications appear on your phone. Overall, the iPhone is a step toward a world where we really will have the world at our fingertips, anywhere, anytime, anyplace.

Big Opportunities for Small Business

2007-06-05T08:20:00.000-05:00

I think that most small businesses have felt closed out of the Internet loop. Many don't feel the need to advertise or promote to a global audience when the majority of their business comes from a radius within a few miles of their physical location (or in Manhattan a few blocks!). However, with the relaunch of Google Maps, meaningful online advertising for the small business may be possible. With their Mapplets Preview (via Mashable), the big business known as local search may become a reality.

Craigslist is one of the largest properties on the web. With no graphics, no fancy Ajax, and a staff of a dozen, Craigslist is a true success story which is focused strictly on content. What makes Craigslist so successful that fancy sites don't have? Sure, Craigslist is free and that's a big factor but the other one is the locality of Craigslist. Just like other local tools, like Citysearch, Meetup, and Yelp, Craigslist turns an online conversation into an offline transaction/encounter/meetup etc. Why is this important? I don't know if I need to answer this question, but we are social creatures and while we've been talking about great tools like MySpace, SecondLife, and YouTube, we still need to meet each other physically and not just through our computers! So enter the Local Market, which to date has felt shunned by the Internet. Very few tools out there cater to the local market and most have to do with restaurants, tourist attractions, and / or movie showtimes.

Enter Google Maps and their contextual AdSense. With Google's new street views program, this will really allow ALL businesses to have a virtual storefront. Could this be an integration of a virtual world like Second Life with the other intricacies of the Web? Could you be walking down a virtual Fifth Avenue and enter into all of the big department stores and then make a turn down 45th street and also enter the mom & pop deli? I think that Google Maps might be the key to Google's growth especially with local search, since most local businesses do not have domain names or websites (most of them still use a hotmail address if they even have one!). It could be truly interesting times, except that it might keep you in front of your computer more instead of being out there with real people like we were programmed to do!

YouTube Going Legit

2007-06-04T08:41:00.000-05:00

YouTube previously announced a revenue share for some of its non-corporate users a few weeks ago. It recently announced a revenue share with Hearst Argyle TV - owner of local TV networks where YouTube will pay a licensing fee for some of its news, weather, and entertainment clips. YouTube also has a deal with Verizon Wireless and Apple TV. YouTube also struck a deal with EMI allowing users access to use EMI music in their clips, although EMI still owns the license and can request takedown. YouTube is also breaking ground in the pre-roll ad space sponsoring video blog Rocketboom (Rocketboom is charging $3000 for pre rolls and this number jumps to $5000 on 9/1). YouTube is slowly making the cross over into tradition media and legit media with these deals that they are striking. They're still obviously in a dispute with Viacom over $1 billion dollars.

YouTube is clearly making a splash amongst everyone out there. AdAge featured an article today about how YouTube is being used to not only advertise prescription drugs, but how consumers are reacting to it. I think the pharmaceutical business is taking a step in the right direction. YouTube is here to stay. And with YouTube slowly going legit you'll be able to see brand bashers on your television (a strange juxtaposition between UGC and professionally created content). But what can be done to protect your brand on YouTube? Honestly, not much. The first amendment protects free speech. If someone wants to "review" your product on YouTube you can't really do anything about it. However, what you can do is dispel some of those myths via a video comment, which is very different from a text comment. Video comments are almost like a rebuttal to the very video being watched at that moment. Users are more likely to watch a video comment (although it usually requires approval from the original video owner). For example, if someone posted a negative video about my BlendTec blender saying that it wouldn't blend your daily celery juice, and that video reached a critical mass of audience, I would post it up as a response the Will It Blend series. (A highly successful series featuring the BlendTec blender.)

If your video can entertain (first and foremost) and then educate (a distant second) then the video can possibly be successful to build a following on YouTube. The GlaxoSmithKline ad (via AdAge) is an extremely clever and interesting domino video that has little to do with the drug and disease, but I think that I now have a better subconscious association with Restless Leg Syndrome and GSK than I ever had!

MySpace Safe Again..?

2007-06-01T08:28:00.000-05:00

TheGlobe.com has settled with MySpace, the largest social networking site, for $5.5 million dollars after spamming MySpacers through fake accounts about their GloPhone product (which is now defunct). Other lawsuits filed by MySpace (thanks to Mashable) include TheDilly, a social network that picked up many users via MySpace messaging and Anthony Lineberry who ran MyFriendBot, an automated friend requester.

While TheDilly settled for $6000 and Lineberry, I believe, walked away unscathed, its a step in the right direction for MySpace to combat spam. The $5.5 million settlement with TheGlobe.com should deter spammers from trying to get back onto the MySpace system. However, the inherent problem seems to be the simplicity with which it is to create an account. Anyone can create an account without any verification. Should sites like MySpace and YouTube force users to enter credit card information (without any charges of course)?

MySpace has done a great job of spam and abuse reporting but could these efforts curtail any type of real marketing being done on the site? The great thing about MySpace is that its free. But if you are a small company or a non-Fox owned property you are going to have to pay for placement either on the front page of MySpace or some of the other costly real estate the site provides.

CPMs on MySpace are significantly less than CPMs on Yahoo!, and its probably the supply and demand curve working its magic. Advertisers are still afraid of being put next to content that they have no control over and therefore associated with. Most of the ads that I see are pretty raunchy dating sites, Shave the Armpit and win an iPod sites, Hit the Monkey and win a shopping spree sites, Can you Tell this Celebrity sites...in other words content that is already so outrageous that it could hold its own against little Johnny's MySpace page.

So then how does a brand propogate on MySpace? I think its through good old fashioned word of mouth while utilizing smartly some of MySpace's tools. The most powerful tool of them all...the top 8. Yes, you may laugh, but being in the MySpace top 8 ensures that you're brand or product is being seen by others when they visit someone's page. Of course you can achieve the same effect by commenting, but Top 8's change less frequently than comments. For those of you not familiar with the Top 8 its a MySpacer's "top 8" friends. These friends appear on the person's page without any need to dig deeper into the profile. Users are always curious about other folks and will mostly likely click on some of your top 8 friends. How do you achieve a top 8 status? Some profiles like the Black Carpet Screenings for Borat made you print out your MySpace profile showing Black Carpet in your Top 8. Others want you to email them when they are in your top 8. Screen grabs, the list goes on and on. So there it is, spammers why bother? We already know all of your tricks and we quickly delete your messages and comments. Have a good profile, a good product and a reason for us to put you in our Top 8 and you'll spread like wildfire. Maybe Lineberry's next project will be to work on an automatic Top 8'er.

Free but not for long!

2007-05-31T10:05:00.000-05:00

Break.com is considering charging users for content. WHAT? What happened to the currency of the Internet? Free? The only content we've ever paid for is going to the movies. We already pay for connecting to the Internet, how can you charge us more?

Break.com will attempt to address these questions and more as investors are going to start wanting to see some type of revenues from their investments. Break (one of the top 10 video sharing sites; 310 overall, but well behind #1 YouTube) will start charging a subscription fee for exclusive content. They've already created advertiser sponsored channels (more of an Internet model) for companies like Keystone Beer. Keystone gets to pick which videos they want for their brand sponsored channel.

We've been talking about how to monetize online video for quite a while. Advertising can only provide so much for free especially with the coming glut of user generated video. The refreshing thing for professionals is that sites like Break.com and others realize the potential for professionally created content. Can Break get subscribers for professionally based content? Hard to say. After all, I'd say Internet video is more like television and we've never had to pay for television at least not in an obvious manner (meaning that we all pay for HBO but we don't really see that bill when we flip the TV on). As previously mentioned, theatrical films, some pay per view events, and recorded media are the only things we've ever paid for.

If Break.com starts charging what does this mean? Advertisers, who will probably snag the best content, will have their channels subscribed to more often not only because they have the best content but because it will be free. If a Sopranos type show appears online, then perhaps users will be compelled to pay for it. However, once it appears online, there's very little that companies can do to prevent it from showing up on the YouTubes of the world. Sure there's the DMCA takedown but not after a few million potential paying customers already viewed the content.

And thus, I find that pure subscription will have a tough time finding an audience. Here's a solution. Remember watching soccer games on television (or am I in the minority on this one?) Soccer has no breaks so they only time to serve up advertising is up on the upper third dashboard next to time left, half, score, and station identification. Can't we simply overlay an advertiser over the bottom sliver of a video - we already see this with the station identification watermark in the lower right hand corner? If we do this, and I guess we should wait to see how Keystone turns out, will we be turning all of our great content into another Bud.tv fiasco?

Brand Dilution

2007-05-30T08:25:00.000-05:00

There's been a few announcements this week in merger mania that has left me scratching my head. Sure, the Dow is at an all time high making stock transactions relatively cheap. Still, I think that synergies are more important unless these big conglomerates have something farther up their sleeves that they are not letting on. Granted there have been some M&A activity that makes sense: Coke buying out Glaceau , the Vitamin Water manufacturer. This makes sense as a line extension of "healthy drinking" as soft drinks are slowly falling out of favor from the more health conscious community. Further, Coke already has a wide distribution channel that the smaller Glaceau can take advantage of. Great deal here for both sides.

Then there's the line extensions that just make no sense whatsover. Even if he has something up his sleeve I really don't see how this ties into his brand. The brand I'm talking about is Trump. Donald Trump. After his successful runs in New York City real estate and Atlantic City casinos, the mogul has put his name on a few different items that didn't really reinforce his luxury brand status. Trump Water? Trump Vodka? (from the man who doesn't drink?) and the latest Trump Steaks. The Apprentice definitely reinforced Trump's image as a wheeling and dealing businessman but steaks? Perhaps vodka, water, and red meat will be given to the folks at the Trump Modeling Agency? I'm not sure, but I'm sure there's something behind this...or not, just another thing to slap the Trump name on (which at this point, might not be such a great thing - The Apprentice was not picked up by NBC).

Back into technology where I have a feeling that I know where Google is going with its acquisition of Green Border. Google is becoming Microsoft slowly and surely. It more or less has an entire suite of products and once those products become unreliant on IE and can stand independently on any browser, Google will have a portable desktop. And since you don't want other viruses you may have picked up while using your virtual desktop anywhere else, Green Border protects your home computer (note I didn't say PC). So that's Google's strategy it seems. Buy everything to make it a viable competitor to Microsoft. Google's about halfway there (market cap GOOG: 151B, MSFT: 295B).

The final question in my head (and please help me here!) is CBS. We covered CBS's purchase of WallStrip last week for $5 million. I speculated that CBS wanted to lock in the rights on Lindsay Campbell as their own Amanda Congdon. Ok, that makes sense, I think. But this morning, CBS announced their intent to buy Last.fm. We've spoken about Last.fm's loyal user base and I think its a great tool to find new artists and even old ones that you didn't know about.
A StumbleUpon for music so to say. But I'm not sure how these two purchases really help CBS in the long run. CBS spokespeople have said that Last.fm helps them get that younger demographic that is so elusive to advertisers. Could be true. And perhaps this is where the synergies begin. Since the split of CBS and Viacom, CBS has all of the "old" properties, while Viacom retained the MTV's, Nickelodeons, Vh-1's, Paramounts, etc. Further as its old parent is suing YouTube, CBS has publicy said that YouTube has boosted its viewership. I think that these last purchases are probably more of a way for Les Moonves to stick it in Sumner's face more than anything else (since Sumner was so mad about the loss of MySpace that he fired Tom Freston). And for $280 million (half the cost of MySpace) why not?

Make Money with your Video - Vator.tv

2007-05-29T08:35:00.000-05:00

So this entire time we've been focusing on how to monetize your content online. Most of that is through ad revenue, but Bambi Francisco, originally from Dow Jones owned site Marketwatch has put a new spin on monetizing content. Her site Vator.tv allows entrepreneurs to post their elevator pitch while at the same time allowing investors to find start ups that they'd like to invest in. Definitely a different model than the ones that we were looking at, or are they? NBC and other networks have been looking at YouTube and other online shows for pilot ideas. In a way, post your content and if its good, a big network will pay for it.

Vator.tv, though is definitely an interesting play, although sometimes start ups are invested in because of the management team and not necessarily the idea. This provides the perfect forum since management needs to be somewhat coherent about business and not just all about the technology and Vator.tv provides that perfect medium to evaluate the people that you are investing in without wasting a lot of time.

What's next? The video resume? Aleksey Vaynor would say no. In our open world confidentiality is becoming more and more difficult. Start ups are having a tougher time keeping things under wraps. And likewise, HR departments, are having a more difficult time keeping candidates' information hidden.

Regardless, this is a great idea for this medium and I think the video resume would be as well, if it could be posted behind some type of password protected site for HR folks only. Will Vator be successful? Hard to say. Should they have an accredited investor check? Probably not (see bud.tv). Will wanna be entrepreneurs be watching Vator in a chance to rip off someone else's idea? Probably. How can we protect this? We can't, but hope that if you're video is on Vator and its a good idea you'll get funding before someone can rip you off.

OpenFaceBook

2007-05-25T08:16:00.000-05:00

The Facebook Platform, launched yesterday, is designed to do exactly what MySpace didn't want: Allow for third party content. Facebook has opened up all of its API's in order to encourage development for its site. There are tons of applications now that are sanctioned for use on Facebook. So unlike MySpace (when they shut down Photobucket, which they now own), Facebook encourages open access to their proprietary network. Facebook has some impressive statistics on growth and engagement and with the launch of their video network could really give MySpace and even YouTube a run for it.

Why is the opening of Facebook so important? Better yet, is that the right move? After all, third party widgets could take users away from the site. I think that it is. Think of Facebook as Windows. If Windows could only utilize Microsoft applications, there would be some utility but not as much as if Windows could also use Adobe products and (gasp) Apple products. Sure, the third party widgets are going to lure some users off of Facebook's site, but in the long run, users will be more engaged, Facebook will have free development, and third parties will develop cooler things for Facebook (leading to more and longer page views for the site). Think Amazon, Second Life, Linux...all of these tools were made better because users and developers could plug in their own enhancements.

From a marketing and monetization standpoint, this offers unlimited possibilities. Zuckerberg noted that Facebook was the sixth most trafficked site in the country. The ability to create embeddable widgets on a site like Facebook offers huge possibilities for commerce and contextual advertising. Favorite books, shows, music, and media could be purchased off of someone's profile page. Facebooks photo application (the largest in the world) could be integrate with an Ofoto or Kodak Gallery to provide for prints. Mashable talks about some of the applications already created for Facebook. The lesson here is that closed source does not work in today's open world. The music industry learned that, Hollywood is learning, and Microsoft will eventually learn that. If we can embrace our users and partners, then we'll hae a better platform all around.

Video Video Everywhere

2007-05-24T09:03:00.000-05:00

Everywhere I turn, every story I read, someone is getting funded in this online video space. Earlier in the week it was WallStrip's $5 million cash out. Previously it was Will Ferrell's company starting a comedy site. Today its Rooftop Comedy receiving $2.5 million from Azure Capital Partners to bring stand up comedians to the Internet. Again, no one wants to be deemed the "You Tube killer" as they do not accept user generated content. Instead they take on the rest of the content creators out there with somewhat professionally created content.

Great concept as comedy seems to be the one aspect that can be controlled in online video. The other is shock which usually comes from UGC. Prom Queen probably falls under suspense/thriller and I'm curious to see if there's any drop off from last month's reported numbers. However, as Mashable pointed out, Rooftop Comedy provides an outlet for comedians to get their funniness out there and they have links to the comedians own website. I mean, that's all well and good, but what's the business strategy? I'm smelling Web 1.0 e-commerce bubble where everyone would put a storefront on no matter how much money they lost (Pets.com anyone?). Now there's a Web 2.0 online video bubble where we can simply place a niche targeted website up that plays back some content. Are we really going to serve up that many banner ads? Are people really going to click on your AdSense that's next to the video?

I think that the real winners are going to be the TV Guides in this new world. Is it Blinkx (which IPO'd overseas by the way)? Is there a way for us to find the content we want online? In the world of the long tail, this will be the company (Google?) that emerges from the dust as the broker of viewers and content.

Everyone's a Star

2007-05-23T08:27:00.000-05:00

The ever popular live webcast Justin.TV has turned Justin Kan into an overnight web celebrity. He's opened his life up to the entire world, everything from police raids, landlord eviction, even things in Justin's personal life. Justin Twitters his goings on and keeps everyone in the loop about what he's doing. At just two months old, the site has really gotten some great traction. So, what's next for Justin? They are opening the site up for other live webcasters to become the next Justin. Via TechCrunch, you'll be able to create your own URL's, broadcast your own Twitters, real time chat, calendar, everything.

This idea is really really interesting. I'm not sure how much traction it will gain, although as hardware costs continue to drop a decent webcam attached to your hat (ala Justin) would set you back about $50. Further as we are already impatient enough when you don't respond to an email immediately (and hence IM is so popular) we can actually see what you are doing as to why you aren't responding. Could Justin.tv be the next MySpace?

I don't know about Justin, but I know that the majority of us can't stand to be "on" all the time (like in the Truman Show). Even some stars need their alone, quiet time. Justin is really sacrificing his life by broadcasting 24/7. I think college kids could probably get away with putting a webcam on your head, but what about when you "grow up" and get a real job? I don't think your employer would be too happy.

But the real value in this then becomes who we are putting our webcam on top of. While the rest of the magazine industry has been shrinking, we've seen growth in celebrity gossip magazines. We've seen "glimpse" type shows like Curb your Enthusiasm (look into a day in the life of Larry David), or Entourage (look into a day in the life of a movie star) really take off. However, these are things that are made to entertain. Could you imagine the laws that would be broken if we put a Justin.tv on Donald Trump's head? All of the deals that he would be doing would be known before they were announced. Sergey Brin's head? You'd be able to know what other medium sized company he was going to buy next, run up the stock price, and wait for the official announcement (although I'm sure GOOG traders are watching Sergey's Justin.tv page too). So it really comes down to celebrities and Hollywood celebrities at that, otherwise I'm sure alot of information that we don't want out there will get out when we forget to turn off our Justin cam.

7 Months for 10x Return in Online Video...Not Bad

2007-05-22T08:50:00.000-05:00

You can make money in online video! WallStrip, the video blog about stocks and investing, has been confirmed to be purchased by CBS. Rumors have said $5 million was the purchase price. Not bad for a show that started last year in October and to date raised about $600K. As one of the producers of the show stated, its Pop Culture meets stock culture. If you might remember Rocketboom, the once popular daily video blog, starring Amanda Congdon, in which she left for ABCNews.com, this seems to be a similar play. Lindsay Campbell, WallStrip's hostess, discusses reasons for why stocks are hitting 52 week highs in a somewhat playful manner, looking at a company's customers, "man on the street" type interviews, and visits to a company's retail stores if any.

However, as many other bloggers have questioned, who is watching this? It's definitely an entertaining show, but true Wall Streeters won't have time to watch the 2-3 minute daily episodic. Even on Revver, where the show is hosted, the popularity of the show appears to be correlated with the subject matter. (Most watched is the ever popular Cramer, followed by AAPL (anything Apple is interesting), then of course Google, and then some of the pilot episodes). Alexa has WallStrip at 65,865. Surely better than Bud.tv, but worth $5 million? Others have speculated that CBS made the play to lock down charismatic host Lindsay Campbell, which could be true.

Regardless of reasoning, congratulations to the team at WallStrip for sticking it out and making it happen. Big questions remain though:

How WallStrip will continue to be distributed (via CBS.com?)

Monetization? (PreRoll, PostRoll?)

Demographics? (Who IS watching this?)
The purchase gives hope to many of the other video blogs out there that would like to create some kind of liquidity event. I think execs at CBS were mainly into the content as opposed to the traffic and statistics. But the Internet definitely gives these execs (similar to film festival) a chance to see how content (which no one can predict) will do in front of an audience. I'm interested in hearing CBS's side to this story.....

Virtual Worlds the New Social Network?

2007-05-21T08:10:00.001-05:00

We've all heard of MySpace, YouTube, Facebook, and the myriad of other social networks that have popped up since the infamous Friendster spawned the social network revolution. MySpace sold for $580 million and everyone has jumped on the social network bandwagon. Since then however, we've had some interesting developments in the space including virtual worlds, which is essentially a social network based on a movable avatar. Second Life is the most popular of these with a in world economy and real money being transacted. I previously wrote about how I thought that this would be an interesting addendum to the Web with Linden Labs (who owns Second Life) to open up their architecture and allowing anyone to plug into their API (application programming interface) similar to the World Wide Web but in 3D space.

While I still believe that this is Web 3.0, I can't ignore these new Flash based applications like Habbo Hotel, Webkinz, Club Penguin, Runescape, and a bunch of other in browser applications. While most of these are for younger users (children and younger), there is an appeal to many based on the lack of a download and simplicity of it (a common complaint about Second Life is usability). Recently Sony was in talks to acquire Club Penguin for $500 million+. (via Techcrunch) This puts Club Penguin with a demographic heavily skewed toward youth right up their with MySpace. The big difference between the two is that users are willing to pay a fee to dress up their avatars in Club Penguin and have access to members only areas.

I think this customization will allow these social networks to finally monetize. MySpace which allows HTML customization is free, but with virtual worlds, the ability to feel like you purchased something as you would in real life appears to be worth payment. So users feel like there is value in having customized clothing for the avatars which is similar to having personalized wallpaper in MySpace. It's an interesting concept and I bring it up because of the potential for true interaction with your customers. There is now a way to track to see if users would like to use your product for their avatar (which would be fraction of the cost of real world usage). Further, as I previously mentioned, in the virtual world you can create anything, so another great opportunity to see how users interact with your brand.
Watch this space since it appears that it will follow the way of the social network where a virtual world will appear for the long tail.

Lonely Girl on Amie Street

2007-05-18T08:31:00.000-05:00

The ever popular webisode LonelyGirl15 will now be featuring music from AmieStreet. LonelyGirl15 is the extremely popular breakout hit on YouTube that featured a video blog about a girl, her problems, and her friends. An extremely popular hit on YouTube it racked up hundreds of thousands of hits before it was outed that the girl was actually a Jessica Rose in Santa Monica and that the content was scripted. However, it was too late, LonelyGirl15 was a hit and to date still averages hundreds of thousands of views. Enter AmieStreet. We spoke about AmieStreet a while ago as the ultimate in supply and demand economics. Users purchase music and the price goes up. Up to 98 cents (1 cent cheaper than Apple's iTunes). Now the popular video blog is teaming up with AmieStreet's artists to try and push music through to its users as a way to further monetize this medium.

Interesting concept, as AmieStreet features many unsigned and unknown artists that would love the exposure on LG15. Is there a way for users to know that the songs are available at AmieStreet? How will they track sales? Obviously if this concept works we will see a spike in the featured artists on LG15, but is it that simple?

I think that this is a great idea since music and the moving image have always gone hand in hand, and some shows have even made hits (The Rembrandts and Friends). I think the challenge here is to let the user know that the songs are available for purchase and if the song is from one of AmieStreet's more popular artists to have a special link that let's the producers know where the lead came from.

The Power of the Blog

2007-05-17T09:28:00.000-05:00

Yes there are two posts today! I had to write about this (via IRWebReport) because it really supports how powerful the blog is, who is reading them, and what a popular blog can do to a big company. Engadget, a very popular blog about technology, wrote about how Apple's iPhone would be delayed as well as the new Mac OS X Leopard. The post was at 11:49am yesterday and accordingly Apple stock dropped nearly 3% from 107.89 to 104.63.

Wow! Since then its been outed that the email in which Engadget derived its information was a fake and has been retracted. However, this is a good sign for tools like Monitor110 that look at the blogosphere for various tips that could give you an edge in trading and that information is moving faster than ever. Sometimes there won't be time for an editor to read something over and that's why the blog is a great tool for communication (as long as the information is accurate). But in the dense world of the blogosphere, the tools to find the information you need are going to be more and more important and hence tools like Google and Technorati are going to be playing a big part in determining what is information. Could these new tools be the new Bloomberg of Wall Street? Time will tell.. It just goes to show you the power of the blog, the investors that read them and the power one blog has over a very successful and powerful company.

Product Placement Rears Its Head Online

2007-05-17T08:27:00.000-05:00

Someone is finally listening! In an announcement yesterday (via Mashable) VideoEgg announces their exclusive syndication strategy with The Burg an online series about life in Williamsburg. The Burg which aired in June 2006 and is available at theburg.tv started as a twenty minute sit com like series. However VideoEgg appears to be syndicating four minute episodes that are sponsored by Motorola and therefore featuring Motorola products.

Click To Play

Well this was what I've been talking about for a while. The integration of product with content in order to convey lifestyle messages to an audience. The cool hipness of Williamsburg residents should cross over well with the audience that Motorola is trying to attract. Now I guess the big question is if Motorola is willing to split the sponsorship or if The Burg producers are willing to up the ante and not only have a cell phone sponsor but also a clothing sponsor, sunglasses sponsor, watch sponsor....

Crowds Being Manipulated

2007-05-16T08:29:00.000-05:00

I didn't want to write about this, but I think that if its brought to attention to most of these online platforms, perhaps something will be done about it. Some of the most influential websites include Digg, Reddit, YouTube, MySpace, and Yahoo News. Like most social networking sites, these sites include areas for superlatives, that is Most Viewed, Most Emailed, Highest Rated, etc. Collactive which Sequoia Capital invested in (via The Alarm Clock) helps you get your story to the top of these sites. You simply submit your story to Collactive and they utilize their network to affect the social network rankings. Digg, of course, is not happy with this, as their tool like most of the other tools above is all about the collective "wisdom of crowds" and not about a single lobbyist manipulating the system. However, as Mashable has pointed out before, its fairly easy to game YouTube to get to the "Most Viewed" list via a couple of browser plug ins and a desire to do so.

As you can see this is a big problem not just for marketers but news in general. To some extent, yes, we need editors to make sure that we get real news on the front page instead of simply the most viewed, otherwise we'd still probably be reading about Anna Nicole. But at the same time, Web 2.0 is about the collective intelligence of the group, and not simply the brute force that Collactive or any other system manipulation provides. And therefore you can see the danger here. The Web is about equality and not about money. However, if tools can be used to receive honorable mentions, high diggs, YouTube views, then the rich will continue to get richer. Great products and services will still be available online but will need to compete against the deep pockets of larger companies whose products might not be as superior. Furthermore, if we know that these rankings are being manipulated then what's the point? It becomes editorial again and the most Digg'd article becomes similar to "Collactive Presents..." and YouTube's Most Viewed becomes "Videos who's owners had nothing better to do but refresh a few hundred thousand times in order to draw traffic to their own websites."

It's a big problem for Web 2.0 just like spam was a big problem (and still is) for Web 1.0, especially for YouTube, where SuperMoviesDownload.com is trying to steal some of their traffic by gaming the system. And based on this, perhaps they will be able to more accurately reflect the collective wisdom of crowds...

People Still Want Reality

2007-05-15T08:48:00.000-05:00

Survivor made television history as being one of the first reality shows on primetime network television. (I think The Real World on MTV was the first real reality show, but who's keeping score?) Since Survivor and Richard Hatch's win, television has gone on to produce hundreds of reality shows and rekindle the game show as a source of prime time entertainment. While many cited reality television as simply a fad, others have noted the strength of reality not simply in the economics (sometimes 20% of the production budget on a scripted show) but also in the fact that the audience has an opportunity to determine the outcome sometimes (ala American Idol). It appears that audiences want more and more power and when you hear someone in the theater screaming "Don't open that door!" they really mean it.

Well that's great that reality is here to stay, and there's been a bunch of horrible shows out there in the genre and there's been a few that have become part of our culture (The Apprentice, Dancing with the Stars, and of course American Idol), but what does this have to do with marketing? You may remember LonelyGirl15 the YouTube vlogger that was outed as being scripted, and racked up hundreds of thousands of hits all the while. There's been the Subservient Chicken, where you can control the chicken via a text box. Recently I noted a "Text Your Own Adventure" Spiderman video on YouTube. And even more recently, the Diesel Underwear marketing campaign, where two "Heidies" capture a Diesel salesperson and lock themselves into a hotel room for five days. Visitors to the site were able to communicate directly with the girls by asking them to write their names on the guy's flesh, singing a song, and just about anything, similar to Subservient Chicken. There was no explicit branding but a lot of Diesel underwear as product placement. Reports were cited that traffic to the site spiked to five times its normal traffic.

So that's it. A reality interactive commercial, creating an interactive event (you can communicate LIVE) without any scripts (clearly since you can ask them to do anything) with a great branding campaign (all of the beautiful people in the video in their Diesel underwear). The two hottest trends out there reality and interactive combined into one. Will we see more of these campaigns? Absolutely. But I think we'll also see more combinations of interactive commercials scripted or reality using the Internet as enabler. We'll see....

Video Ad Overview

2007-05-14T08:58:00.000-05:00

So the big question of Web 2.0 is how to monetize the online video. Revver has tried to embed an add at the end of the video, Metacafe serves pre-roll, and VideoEgg has an ad overlay that plays during the life of the video. Recently served up are Adap.tv which provides some type of contextual ad placement in the bottom of its player as the video is streaming (via Mashable), ScanScout (via TechCrunch) offers contextual text overlays on the video, and more recently YouTube announced their inline and post roll advertising method. (via Mashable).

Are video overlays the way to go? Possibly they could be. However, YouTube's demo doesn't make too much sense. As Michael Arrington notes, the ads served up via YouTube are not relevant to the video at hand and its way too easy to ignore them, while Mashable has the opposite view point. I'm not agreeing with either since I still feel that video ad models are interesting but as a user they are still ads. I'm a true believer that content is king and integration of the advert with content is the best way to go. Remember when Alias was sponsored by Nokia? Or the obvious product placement at BMW Films? I think that advertiser sponsored shows really build goodwill with audiences AND if an element of product placement is involved, great recall of products. However, while I am writing this I know that many are citing the huge bust of Bud.tv. Some products are definitely trickier than others.

However the question if video overlays work remains. And only time will tell. I think though that video overlays are a step in the right direction toward interactivity. As I previously mentioned, video games are the most interactive of movies where you make a decision nearly every second (or several times per second). As TV watchers, an extremely passive activity, we are not used to interacting with anything, whether it's ads or any other type of clickable. Video overlays are bringing us one step closer to that next generation.

Social Network Woes?

2007-05-11T08:27:00.000-05:00

This past week MySpace announced the purchase of Photobucket for $250 million in cash. Compared to News Corp's $580 million acquisition of MySpace, this looks relatively expensive. Further since Photobucket users are primarily MySpace users, News Corp is paying a lot for an incremental amount of eyeballs. Why would News Corp do such a thing?

Well, in a case of the rich getting richer, MySpace is the primary destination for social networkers out there. Sure, there's LinkedIn for business folk, Friendster for early adopter social networkers, Sneakerplay for sneaker lovers,Facebook for college students and so on and so forth. However, nothing beats the shear strength of MySpace's reach and depth (176 million as of right now). MySpace helps to launch many items of interest including a high proportion of Michael Eisner's Prom Queen episodes, various movies and television shows, and of course the original intent of MySpace: music and unsigned bands. MySpace video is second only to juggernaut YouTube and the numbers for MySpace are staggering, with the social networking site consistently in the top 5 sites hit, searched for, and session time.

MySpace is protecting its territory and rightfully so. However, those of you who remember Friendster also remember how quickly that social network flickered out. With niche social networks coming out, MySpace wants to be the ONLY destination for social networkers. Two weeks ago, I was notified that my account on Nike's Runner's social network would no longer be supported. I suspect that as time goes on this will be a common scenario. However, the niche social networks do have targeting which many advertisers find valuable. The social network is stronger than ever however, we are slowly seeing segmentation.

I would compare this now to the age of network television versus cable. We have the big players, the MySpace, Friendster, LinkedIn, and Facebooks (akin to ABC, CBS, NBC, and Fox) and then the niche players like SneakerPlay, MuscleDog, Barack Obama Supporters, etc which all serve a very important purpose. And if we take this a step further, I could definitely see MySpace purchasing other social networks (like StockPickr for example) similar to NBC and CNBC, simply to sell highly targeted niche advertising.

Music Video Long Tail

2007-05-10T08:26:00.000-05:00

Ever since Chris Anderson's book The Long Tail came out, there's been a lot of news and buzz about it. Whether its the irony of Pirates of the Carribean setting a blockbuster record (since broken by Spiderman 3) or the reality of the Long Tail happening (Rhapsody, YouTube, etc), the Long Tail has become a part of our vernacular on the ability to pull up on demand any piece of content ever created. Amazon.com is already a Long Tail for books, iTunes could be a long tail for music, eBay is a long tail for other people's stuff, and Google is a long tail of the Web. Last.fm the popular social network music community, has launched a long tail not only for music but also (soon) for music video. Via their press release, "Last.fm aims eventually to have every music video ever made on the site."

Content creators out there can do nothing but rejoice over the Long Tail. After all, in the TV business, for example, while they make money on the initial run, real money is made in syndication, see Seinfeld, where advertisers are putting up new money for the space every time. In essence, Last.fm is providing a distribution platform for artists to be available when the consumer wants to see it. So, if someone mentions A-Ha's Take on Me video, you'll be able to call it up on demand and A-Ha (if they're still around) should be able to get a cut of the advertising served up against their content.
Marketers should also rejoice over the Long Tail since content now from various eras or genres can now be identified. So, if you are trying to sell a product to a certain age group or demographic, music tastes could be identified to pinpoint that target. Radio has done a great job of that but no one has the time to sit through a radio commercial anymore. Perhaps, Last.fm could partner with Poptopus for a fairly interesting business model and since they have an embeddable player we wouldn't be stuck with the latest iteration of a revenue model that YouTube has come up with.

Music Industry Growing

2007-05-09T08:31:00.000-05:00

eMarketer's report today talks about growth in the music industry (yes, believe it or not, GROWTH). Revenues last year (2006) were $60.7 billion and by 2011 will be $67.6 billion (about a 2% annual growth rate). The report states the obvious that CD sales will continue to plummet and digital continue to grow, however, digital sales will never make up for the loss from CD's. Thus, the growth will come from other innovative ways to exploit the music such as online and mobile, concerts, licensing deals with TV, films, video games, and tie in with various products (the report states U2 and iPod and Bob Dylan and Victoria's Secret).

I think that the record labels have definitely enjoyed a monopoly on this business for a while, however, in order for good music to continue to be put out, there needs to be a way to monetize this business. Apple recently put announced that 100 million iPods were sold and about 2.5 billion songs sold via iTunes, which puts each iPod on average with 25 legally downloaded songs, a far cry from the thousands of songs that you can put on it. So where is the other music coming from? I wonder....Regardless, some very interesting models have come out, one of them I talked about before called AmieStreet which is a true supply and demand model. However, with sites like MySpace offering streaming music how would a band make money from them? The answer: Poptopus. Poptopus (reviewed by Mashable), is a widget (we talked about these yesterday) that you can embed on your site and revenue is shared by the artist and the publisher. Advertisements play in the video portion of the player and are paid on a per listen basis. It's actually a radio type model but uses the visual portion of the Internet to play the commercial while you are enjoying the music. I think its a great way to utilize the single servingness of the Web with a business model that could be sustainable. And since everyone makes money, or gets eyeballs, everyone should be happy....the one downside I see is that if a popular band doesn't want to be associated with a certain advertiser (but I think those are few and far between).

Regardless, its a good time for the music business as they've finally embraced the Internet as opposed to fighting it and it turns out that artists as a whole will be making more money than ever and some artists will actually be able to call themselves full time musicians because of this long tail phenomenon. We'll keep track of the music space as it continues to innovate....perhaps Sirius XM can take a lesson here? (i.e. Give away your units and advertise on your proprietary hardware?)

Juiced!

2007-05-08T08:24:00.001-05:00

Joost (pronounced Juiced) has been signing deals left and right with everyone from Viacom to CBS to independent filmmakers to now Heavy.com (via Mashable). It's being billed as "a new way to watch TV" bringing the best parts of the Internet (social networking, time shifting, etc), together with the best parts of TV (high production quality and quality content). Joost created by the founders of Kazaa and Skype (in other words pretty smart guys), could be the next YouTube killer? While Joost doesn't support user generated content (yet?) most of YouTube's traffic or at least a consistent portion of it comes from YouTube partners like CBS, NBA, and other established brands and Joost could be taking a large portion of those eyeballs away especially since YouTube's quality has been criticized as of late.

I think that as an audience we seek a more interactive user experience. On one hand we have traditional television where we simply watch. The most interactivity we have is by flipping channels. On the other hand we have video games where we are essentially watching a movie but one in which we are making a decision every fraction of a second. The trend appears to be toward the latter, as we see an explosive upward trend in video games and a gradual downward slope in TV. However, to graduate everything to a video game would be much to extreme and I think that Joost will do a great job in letting people understand that if they are interested in the t-shirt that Matt Fox from Lost is wearing, they can pause the show and purchase it in real time and then go back to watching. Further the social aspect of TV watching will have content creators spinning even more elaborate webs than the ones in 24 or Lost, which will engage audiences. Ad model here? I'm not sure, I think that Joost will probably provide some type of interactive commercial as opposed to the traditional 30 second ad spot. Perhaps Joost can even provide some more power to the almost dead Bud.tv?

Keep an eye on this space as I can't wait to download my Joost trial now!

Widgets Everywhere!

2007-05-07T08:22:00.000-05:00

Widgets are the hot new thing of Web 2.0 - everything from YouTube embeds to mashups to music players and so on. Widgets are basically Flash or javascript code that authors can simply place on their site and users can interact with them in some way (whether its answering a poll, e-commerce, watching a video, listening to music, etc.)

The e-commerce aspect is hot topic now on widgets since the interactivity of them and the portability of them allow for some really interesting applications. WidgetSense (coined by Steve Rubel) allows for Flash or javascript enabled Google Adsense to be embedded into widgets. Two new companies, Tumri and Mpire, (via Techcrunch) have announced e-commerce widgets. Coupled with eBay's widgets and the plethora of other widgets out there, it appears as if we have a widget revolution.

Marketing wise, what does this mean? Well, I think that we can now have those interactive, flashy (not Flashy if you get the difference), and interesting ad campaigns that we've always wanted to. Targeted and completely relevant to the content of the page, these new widgets are more catchy than Adsense and hopefully will provide more value to the advertiser. Time to rethink your SEM strategy!

Monetizing YouTube? ... Not Yet

2007-05-04T13:33:00.000-05:00

On YouTube's blog the "YouTube" team mentions that they are going to begin to share revenue with their more popular users outside of their "partners." Partners currently include the biggest traffic drivers to their site like the NBA, CBS, lonelygirl15, and NBC. Now they are going to share revenue with popular users like LisaNova, renetto, and smosh. Revenue share will include participation in Google's Adsense network. This announcement also comes off the heals of Afterworld (Bud.tv's foray into online video content) was announcement (via Mashable) as the first test of YouTube's ad program.

A few very simple questions spring to mind with these announcements. First and foremost: Why don't they share revenue with everyone? YouTube is easily gamed and they are sharing revenue with channels that have the most subscribers or views. You could easily build a bot to knock your views onto the Most Watched list or create many accounts to build your subscription list. And if its a logistical matter of paying out small amounts, have a threshold amount (like $5), similar to Revver. Secondly, this revenue sharing system (of clicking on AdSense ads) doesn't really work. Maybe its my content but I've tried it out (also via Revver) and perhaps its Revver's smaller advertiser base but I've never really had the desire to click on an image based Revver ad let alone a text based Google Adsense ad. Thirdly, most people watch YouTube content not on YouTube but via YouTube's embedded player. (See yesterday's post on Prom Queen and MySpace).
Overall, though, I do have to applaud YouTube for making an effort. They're hit with a billion dollar lawsuit. They're probably getting a lot of heat from shareholders about their ROI ($15 million in revenue vs $1.7 billion purchase price). I'm not sure what this Afterworld model will look like but I hope it keeps the viral aspect of YouTube going with a way to embed the ad within the content.

Eisner named Prom King

2007-05-03T08:27:00.000-05:00

The results are in and Michael Eisner wins ... or does he? The anticipated results for the one month old Prom Queen Internet serial are in from Eisner led Vuguru. According to Mediaweek, the 2 minute web episodic is averaging 200,000 views per day and an aggregate of 5.2 million views since its premiere on April 2nd. Now that's pretty impressive considering that some of the weekly most viewed on YouTube are 200,000 (in fact, at 200,000 it would have been 15th on YouTube's Weekly list). And for many of us, we can actually go back and watch these clips at our leisure and thus racking up more hits. Further, Prom Queen has garnered more than 18,000 friends on MySpace where users are treated to a sneak peak of the show. Out of the show's 5 million views, MySpace accounts for nearly 4 million, followed by Eisner's other company, Veoh, at about 1 million, YouTube at a quarter million and PromQueen.tv.

Given the long tail, that's a hit. Prom Queen is receiving on average 200,000 views. That's not taking into account any of the archived views or streamed mobile clips. That's an amazing number, especially one that can be sustained over (thus far, 40 episodes). I'm not going to comment about the content, although, I got into it for a while, but then my interest level dropped off (probably because I'm not a Prom Queen friend....yet). The production values are phenomenal and I almost wish there was more to watch at the end of my two minutes. Ok, so the content is great, production value is great, but the big question is this: Is it bringing any value to the sponsor, HairSpray the movie? I'm not sure, although it probably is bringing some general awareness to the movie from this tween demographic. The other question is this: Is this model easily replicated? The team that put together Prom Queen also put together a daily webisodic called SamHas7Friends, which while good did not receive the same number of hits as Prom Queen. But again, that, I guess was an experiment (a very successful one) that landed them the gig with Eisner which didn't have the P&A (prints and advertising) that Prom Queen has (although Prom Queen has no P&A but in web speak, they have banner ads and big time press and a big time backer). So...what's the model here?
Does this have to be something daily? What frequency? TheBurg.tv comes out monthly with their 15-20 minute episodes and I think they've done fairly well (537,686 on Alexa vs 148,798 for Prom Queen). Is it the length of time? 2 minutes really does keep you on the edge of your seat... What genre works? My gut would say comedy or thriller but watch YouTube and you find all types of things. Well, I guess keep watching this space for more information as we continue to experiment in this new new world.

Power of the People

2007-05-02T09:12:00.000-05:00

Even Digg couldn't withstand the power of the people or the so called Wisdom of Crowds. Digg, traditionally against any type of DRM, monitors its posts and takes down anything that they feel is morally wrong. Yesterday (via TechCrunch) someone posted the decryption key to HD DVDs. After the Digg team took it down, someone reposted it. Pretty soon, the entire Digg site went down with a deluge of the decryption key posted all over it. Kevin Rose, Digg's co-founder, says on their blog:

But now, after seeing hundreds of stories and reading thousands of comments, you’ve made it clear. You’d rather see Digg go down fighting than bow down to a bigger company. We hear you, and effective immediately we won’t delete stories or comments containing the code and will deal with whatever the consequences might be. If we lose, then what the hell, at least we died trying.

So that's it, that's what happens when you try to turn against popular opinion. Digg (valued at $60 million per Businessweek's cover story) could become the next Friendster, where users left at the blink of an eye. Fickle consumers have the power and especially online where the butterfly effect is magnified ten times over. It's a scary place to be right now for Digg as many of their million plus users have revolted against them.

What does this mean? Well, I've touched on it before, and again, I'm not sure how this phenomenon happens but if you think about companies out there Apple, Google, and Craigslist are the "good guys" while Microsoft, Yahoo, and Dell are the "bady guys." It's a connotation that can most likely be traced to a few choice events (Microsoft knocking down Netscape, Yahoo charging for email, and Dell's customer service debacle.) While Apple has come clean with its iPod batteries, Google discloses all (or wants you to think that), and Craigslist doesn't make that much money only through its job postings. Since then Dell has apologized, Microsoft has been a bit more open, and Yahoo provides free unlimited storage. However, the damage is done, and just like Gladwell's book Blink, these corporations are the evil empire while our knight in shining armor are the former companies. Stay open, make sure that your PR team has experience in damage control, and address your customers because the power of the crowd is too much to handle (at least for a $60 million company).

The Final Frontier?

2007-05-01T08:46:00.000-05:00

There's been a lot of speculation about Web 3.0 and what that will mean in the coming months and years. A quick recap - Web 1.0 was simply push technology, technology similar to a newspaper where a central editor pushed out content to you. Web 2.0 (where we are now) combined Ajax (pages reload with hitting refresh, similar to Google Maps) with an interactivity feature like a blog, social network, or rating system with the first Web 2.0 properties being Amazon.com, eBay, and Craigslist. Web 2.0 has definitely made an impact on the current web with nearly all sites offering these features and valuations skyrocketing into the billions (see YouTube). The most important aspect of Web 2.0 though is the fact that it is so engaging that Web 2.0 sites are one of the stickiest sites on the Web and one of the most visited (behind search engines). Now if you think about where the majority of us spend our time it is on video games. Yes, even older women spend time playing video games online, since games include not just Grand Theft Auto but Sudoku and FreeCell.

So what's the point of this recap? Well, its definitely to figure out where the Web is going. There's been a lot of hype over Second Life (kind of a Sims like game where there really is no point). There's also been a lot of hype over video games including Sony's Virtual World for PS3 users. What about the combination? Hitwise came out with a report yesterday about how quickly virtual worlds have been growing and Runescape is #1 with 44% of marketshare to online worlds with Webkinz coming in a distant second with 14%. This, of course, does not include downloaded virtual worlds like Second Life, or the ever popular World of Warcraft, although I think at some point Web based games may overtake these downloaded versions.

The virtual worlds cannot be ignored. I think that we all like the aspect of the interface coupled with the Web 2.0 characteristics of real people that we can interact with. Brands now will have that intricate product placement opportunity ever so prevalent with video games, an ability to monitor dialogues, and a chance to see what people will create and do with their brands given a blank slate. Is this Web 3.0? Many think so. Many think that its simply a way of representing Web 2.0 in 3D space. I think that if its not Web 3.0 at least it will be Web 2.5.

What Are You Doing?

2007-04-30T08:33:00.000-05:00

With all of the hype surrounding Twitter, I just had to write about it. For those of you unaware of Twitter, it is a minute by minute, second by second updater that you can post to via SMS or the web. It's popularity really grew after the SxSW film festival about a month and a half ago, and its been growing ever since. There have been some Twitter clones out there, like a Facebook or Bebo, however Twitter seems to have rapidly become its own verb in a very short amount of time.

The sign that Twitter has made it to the big time is the new Barack Obama account that is a featured Twitter member. While Barack is the most Web 2.0 ified of presidential candidates (he has his own social network, YouTube, MySpace, etc), something about Twitter is extremely compelling. Unlike Facebook's automatic updates, Twitter allows you to write about something when you WANT to write about it and be able to broadcast this to the world (or your subscribers).

So you're probably thinking "Why would I want to know what you are doing at all times?" From a personal perspective, you probably wouldn't. (You definitely wouldn't.) However, from a brand perspective and perhaps even from an IR perspective (although this is very far from happening), you might be interested in knowing what is going on and a daily updated blog is simply not enough. Diehard Apple fanatics would be able to know Steve Jobs every thought at any time of the day. Fans of 24 would get to know what "Jack Bauer" was thinking every second of his day. And supporters, or potential on-the-fencers would be able to know what Barack Obama's viewpoints were...every second of every day. Sounds almost too good to be true, and it is, but the point that I want to make here is that as more and more tools come out that are being adopted by mainstream (right now it is the blog), consumers will be demanding more and more usage of it, which means allocating more resources to updating your Twitter / blog /MySpace profile / YouTube channel

GooTube Merger Complete?

2007-04-27T08:26:00.000-05:00

YouTube is supposed to be testing out its pre and post roll ads this week according to Businessweek (via Mashable). However, Mashable brought up an interesting business model which seems to be a perfect compliment to YouTube's parent, Google. I've been arguing for eternity that I don't believe in pre, post, or mid roll ads. We all know from our own television viewing experience that they're annoying, intrusive, and very ignorable. So, that being said, the idea was to integrate AdSense with YouTube results and "Related Videos" section. Since more and more advertisers are hopping on the YouTube bandwagon presumably they'd want their content to be seen by more and more viewers. This in turn means that they'd be willing to pay for top placement on certain tags....or will they?

I think that this is a great idea that will, in the short run, help Google recoup some of its investment in YouTube. As long as advertisers can continue to make compelling content, viewers will be enticed to click. However, this does bypass the viral aspect of YouTube. After all, when you hear/see of a viral video how do you learn about it? Maybe if someone tells you for example about the Dove Ogilvy video you'll do a search for it...maybe. Most of the time, you'll be emailed the video or linked to it or it will be embedded like this. Lost revenue for Google. But other than that, I think advertisers will really want to own certain tags, since after all they are only paying for that interaction if it happens. I also love the concept of how the sponsored videos are embedded into the YouTube widgets. Popular videos come to the top. That way, everyone is making money similar to the entire AdSense model. Another thing to be weary of though is the gaming of YouTube, that is, writing a bot that can automatically ratchet your views into the hundreds of thousands. The Butterfly Effect magnifies this by placing your video in the "most viewed" category where more and more people will be curious as to why your video was seen so many times.

Despite these issues, which I'm sure Google will somehow resolve, I love this business model for YouTube, at least for the short term where advertisers/filmmakers can purchase placement for their videos and users know that they are purchasing that space. The question of whether this concept can translate from AdSense remains to be seen....

If you can't build it, BUY it.

2007-04-26T16:19:00.000-05:00

Stockpickr, a social network geared around the portfolios of various investment professionals, was bought yesterday by TheStreet.com for undisclosed terms. We've been talking about Stockpickr for a while now and whether or not the collective intelligence of the group could predict the fortunes of the market. We've noticed that Marketwatch launched something similar with so-so results. However, the difference is the aggregated knowledge that Stockpickr has, boasting the portfolios of Warren Buffet and George Soros.

I think that Stockpickr was a great acquisition by TheStreet.com which can utilize the social networking aspect to bolster its editorial content. The Wisdom of Crowds approach holds again, as savvy investors dart to see which stocks were picked by which investment gurus. The real reason however that I wrote about this acquisition was because of all of the press surrounding social networks. MySpace and Yahoo both have equal page views, however MySpace has a CPM that is a third of Yahoo. I wrote about metrics that MySpace commissioned to determine what the value of a friend add is. Facebook, the cover story of this month's Fast Company, was reportedly offered a billion dollars. YouTube of course $1.65 billion. A lot of money is being thrown at these social networks, but at the end, this money needs to be recouped. Of course, you can never charge someone to have an account, but if you can't do that, then how can you monetize this? Do you charge for premium content like TheStreet.com? Perhaps, after all this is how equity research makes their living (sort of). While it was a great buy (terms pending, of course) it remains to be seen if Stockpickr really is a stock picker!

Trouble for US IR Sites?

2007-04-25T08:29:00.000-05:00

The latest statistics from Alexa (via IR Web Report) show that traffic to Thomson's IR sites (corporate-ir.net) have hit an all time low. With a large number of US blue chips and mid cap companies using Thomson, along with the recent run up in the S&P 500, one would expect a positive correlation between page views and stock price. However, the latest statistics do not corroborate this. It seems that investors are turning more to blogs (like Seeking Alpha and tons of other blogs talking about industry, companies, products, etc), portals (like Yahoo! Finance) and message boards/social networks (like Stockpickr and Bullpoo) for their information. Is it a Web 2.0 thing? Doesn't appear to be, as Dominic Jones also notes that European companies' traffic is hitting an all time high.

What is happening here? I think its a few fold. The web is becoming more dynamic and static 'push' sites like Thomson's are just not cutting it. Investors would like a voice and an opinion in what is going on and the blog makes for a perfect forum for it. Social networks like stockpickr and bullpoo have become increasingly popular. Everyone wants to know what everyone else thinks. (I hate to bring it up again, but the Wisdom of Crowds effect.) Further, social networks give everyone an equal footing to be judged based solely on performance. Portals like Yahoo! Finance are not "Web 2.0" ified but then again, its been a staple since pre-Web 2.0 days. WHAT? What I mean is that "if it ain't broke, don't fix it." Another example: Bloomberg. In my opinion most traders are using Bloomberg as an instant messaging platform. Why? Because they've been using it since pre-email and they are comfortable with it. People have been using Yahoo! Finance since Web 1.0 and they have all of their data inputted and so forth (and since its customized, techincally it could be Web 2.0).

Investors relying on third party information like this is truly dangerous. As an IR/PR/Marketer you have no control over what message is being broadcast to the investment community about you. What to do about this? Well, as I mentioned before, about 5% of the Fortune 500 has a blog, and yes we are still waiting for the SEC ruling on Reg FD. However, its clear that instant gratification/communication is what the investment community wants, not day old or even half day old IR information. While it may mean more communication, I think that in the long run investors will be won over and you'll be able to broadcast your true message.

MySpace Marketing Metrics

2007-04-24T08:27:00.000-05:00

Today's AdAge mentions marketing to the MySpace set through profiles and tries to quantify what its worth to a marketer when you "add" them to your friends list. The study was brought about due to the much lower CPM that MySpace is receiving as opposed to a Yahoo. In the end of the study, the real value of the brand interaction on MySpace was not simply the brand itself but how the brand actually plays a part in your daily life. Therefore, the value is four times over because of the actual endorsement from someone that you know, and how this person has benefitted from the brand.

The results here are not rocket science however. I think that the more that you engage someone with a feel good about your brand the better. What this study has done was given marketers a way to quantify that (and in essence put a dollar value on it). I wrote about Coke a few days ago and how they are creating a Second Life contest in which you "create the essence of coke." This is similar. How do I capture the essence of your product/brand? Why is your product/brand one of my friends? The brand needs to come up with a reason as to why people should talk about it, whether through a contest, feedback, or comments. Hence the explosion of all of the viral video contests on YouTube. How does my brand make you feel? Hopefully that is a positive experience although in the case of GM's viral video contest there was some backlash.

Finally, the study mentioned that just having a profile on MySpace didn't contribute to much. Three things that the study found were: that they gave a way for consumers to tell their stories, they gave people something to talk about, and they also provided incentive via a contest or promotion. So in the case of YouTube, #1) Video #2) your product #3) the prize. With MySpace's more flexible platform #1 could be a myriad of things. Creativity is the limit and I think that MySpace will work well with a certain type of brand and that clicks on MySpace may go the way of banners.

Perceptions of Online Video

2007-04-23T08:31:00.000-05:00

Today's eMarketer statistic noted that most media and entertainment executives thought that online video (especially short form content) had the highest growth potential, triple that of the current cash printing format, the video game. Further they report that user generated content will be more than half of what is viewed online. However, the major difficulty here (in summing up the report) is

Commercials
Inconsistency of Production
Bad Search Capabilities/Too Much Stuff!

Now, I have to note that user generated content and short form content seem to be grouped together at least in the way that eMarketer has presented it. However, I have to point out a distinction between pure amateur video, prosumer/semi professional video, and professional video. While amateur video will always have a market (wacky clips taken on the moment by your cell phone camera), the rising of the "middle class," the prosumer/semi professional video will be the one to watch. These are the filmmakers/videographers with the new $5200 AG-HVX200 HD Panasonic camera, the latest Final Cut Studio for $1200, the latest Adobe After Effects for $1199 and so on. They'll have all the tools to make professional grade media, but at a fraction of the labor cost, and without the connections to achieve mainstream distribution. If you notice the top 10 all time viewed YouTube videos, 7 of them have editing that is probably beyond the scope of iMovie or Windows Movie Maker.

I've argued that semi-professional videos will soon become the growing segment of online video, but as a marketer, how does that affect you? I think that it may mean access to lower production costs and more ideas for getting your brands out to audiences. From my limited knowledge of production, I know that it takes 5 guys to change a light bulb due to all of the union regulations out there. Well, now the guy in Iowa can create similar content at a fraction of the cost without the labor unions. It also means that with large prizes like a Superbowl Commercial (a la Doritos), more and more prosumers will be vying for an opportunity to utilize your marketing muscle to make it big. If Frito Lay were smart, they'd be asking some of their runners up to be creating their next wave of commercials (again at a fraction of the cost). But, here's the most interesting one: As computer skills become as necessary as typing skills were 30 years ago, we're going to see a new age of marketer: the creative techie marketer. Marketers: Be on the lookout for this person (or these people) as they will be pushing the frontier of what is possible in this new and exciting space.

Loving Google

2007-04-20T08:34:00.000-05:00

Ok, I admit, I've been bashing Google a bit on their quest to take over the world and its probably a bad thing because the traffic to this blog from non-subscribers will probably plummet, but I couldn't ignore the incredible earnings release last night as well as their announcement of purchasing a WebEx type company this morning. Everywhere I turn Google this Google that, and now with a market cap that is about half of Microsoft, Google is definitely a force to be reckoned with. Coupled with Yahoo's drop in earnings, Google is the leader on the Web. But the interesting thing about Google is that for all of the neat little things they put out there, nearly all of its revenue comes from Search. How many times have you seen someone fire up their web browser go to Google and type in the URL? I bet Google (or some derivation with a Google search box) are on 70% of a person's starting (home page).

That being said, as a marketer, SEO (search engine optimization) is becoming more and more important. The first three pages must be positive about your firm and its products. And if they are not, get a PR team and an SEO to make sure that they are. However, the beauty of Google is that it is a true meritocracy. Just because you are throwing more money at a problem doesn't mean that it will go away. If a product is truly faulty, and appears negatively in a blogger's blog, and is linked to many times, you will have a tough time pushing that mention off the first page. Wikipedia no doubt will be on that front page as well (if you are popular enough to have a Wikipedia entry) so hope that that has a positive spin on you as well.

We haven't even spoken about SEM or search engine marketing, Google's bread and butter. Monitor your entries and make sure that you aren't overpaying for clicks that can be had for less. And while I'm not going to go into a whole lesson on SEM I think the most important thing: Make sure the landing page is relevant and ready to purchase. Imagine, you clicked on the link for the book The Tipping Point and it just brought you to Amazon.com's home page (where you'd have to redo the entire search). Sounds small but you'd be annoyed and you'd have a smaller chance of capturing that conversion. But the lesson today is that search is becoming a bigger and bigger part of our lives especially via Google (the numbers are our evidence) so please don't ignore that as part of your marketing plan.

eBay, PayPal, Skype, Stumble Upon?

2007-04-19T08:50:00.000-05:00

EBay's latest acquisition, Stumble Upon has been purchased for $40-$45 million as reported by GigaOm. So eBay has bought Paypal, which makes great sense given their close integration with auctions and online payments, then Skype for a few billion dollars and now StumbleUpon? I'm not sure how Skype fits into eBay's core business of auctions. Would you ever Skype a person that you were buying the latest Nintendo Wii game from? And where does StumbleUpon come into play? Unless....eBay plans to take on the evil empire that is slowly brewing in Google. With StumbleUpon, which is essentially a repurposed version of Google's "I'm feeling Lucky" button, eBay users have a smart search at their finger tips. Users are taken right to a page instead of banner ads or even contextual ads, bringing some decent brand awareness at the very least. Connected with eBay's auction system, you can browse for similar items using the StumbleUpon mechanism.

As for Skype, how does this VoIP system fit in? I think that eBay wants to claim some desktop real estate similar to that annoying uninstallable Google desktop. With the acquisition of StumbleUpon, eBay's positioning of finding everything new and used, and a communication tool more intimate than IM, eBay is also building a complete desktop to compete against Microsoft and more likely Google (who announced their own "rolling of the dice" product as well). Keep this in mind as eBay who was once the garage sale of the Internet could become a viable player in the online space.

Virtual Contests

2007-04-18T09:11:00.000-05:00

I always hate it when people say "I told you so" but we have to toot our own horn a little bit here on Coca Cola's new contest on Second Life. Their Virtual Thirst competition calls for people to create a vending machine in Second Life that not only dispenses soda but the "Essence of Coca Cola." We talked earlier about how Second Life would provide a great environment for virtually anything.

Coke has really embraced the young consumer market with this promotion as they have a MySpace page, encourage you to upload your Second Life creation via YouTube, and of course have you create something in Second Life. This is a full embracement of the Web 2.0 sphere which is something that I haven't seen yet. I also think that Coke is trying to make up for the backlash they received from not fully acknowledging the diet coke and mentos phenomena. While the prize is kind of lame, a trip to San Francisco to be in a documentary, I think that Coke will receive a good number of entries simply based on the fact that people would like to win this very first Second Life creation prize, especially since the contest is about capturing the essence of Coke, and not having to create something that actually works.
Again, the great thing about the "flattening" of the world today is that professional tools are now available to the prosumer. Second Life might not be Maya, but it allows you to share with others what is in your mind. Final Cut Pro is the industry standard. After Effects is used in Hollywood movies. And the great thing is that all of these programs install on your MacBook Pro. The bar is going to be raised in terms of production, but alas even like Hollywood, content is king. And in Coke's words: "A truly unique and exciting stick drawing is better than a been-there-done-that professional 3D animation."

Google Rules the World

2007-04-17T08:42:00.000-05:00

So in addition to their purchase of Doubleclick and their announcement of the Clear Channel Radio ads roll out, coupled with Google TV and their purchase of YouTube last year, Google seems to be the major force in the new world of targeted advertising. Google's database is going to stretch across all media which will truly be either a scary thing or an extremely good thing.

With Doubleclick, Google now has a presence in serving up banner ads and other display media. Coupled with their AdWords product, Google hopes to serve up relevant ads not just in text but also via banners. Overall Google is hoping that you have one crossover Google account. You can be hit with advertisements for your favorite foods and mainstream brands on TV, your favorite restaurants while on the road via Radio, and anything else they've missed via the Internet. One area where Google is lacking (although I'm sure they can find a small fledging company in this space that would LOVE to get bought by them) is mobile. Could Google be going the way of Apple and their iPhone product? Mobile is the hot new area of growth especially in the advertising front. Mobile gaming has grown in triple digits, nearly everyone has a cell phone (80%), web access is coming up on 50% and so on. While Google has their text messaging feature, it will be a matter of time before Google offers you free service, but only if you listen to an ad or if someone interjects during your conversation about different goods and services from some type of voice recognition pattern. Scary huh?

One last point. With this inevitable big brotherliness about Google, why does everyone still cower down on Microsoft? Why is Microsoft evil while Google is always the good guy? It's clearly not David and Goliath anymore but rather a battle of two near equals. I think it comes down to the fact that Google doesn't charge YOU the end consumer and for the people that they do charge, they have guaranteed results. Google is open source everything, opening up their API's, and integrating their revenue source into it. Microsoft meanwhile is more old economy by selling IP and closing off the rest of the world to their monopoly. Lesson here? Be open, be liked, and also take over the world while you're at it.

The Butterfly Effect

2007-04-16T08:39:00.000-05:00

The New York Times had an interesting article this weekend about how Hollywood and the music industry figures out if they have a hit in the early stages of its career. They don't. In a study that seems like it would be a great case study for the Tipping Point, the author, a Columbia professor, talks about a study that he conducted that talked about rating music. In it, he subjected one group to simply the names of songs and bands, and the other group also had the number of downloads on it. As you can slowly see, the one group with the download number had markedly skewed results than the other one. Turns out that the subjects were not only influenced by the music but also by the number of downloads. The Butterfly / Snowball Effect in play here, where people are influenced also by what they perceive others to like. He goes on to site examples of Harry Potter being turned down by eight other publishers, the Beatles, Star Wars, etc.

Well how does that affect your marketing plan? Very interestingly, this comes back around to social networks and the Tipping Point. People have the herd mentality which is why even a stock price falls or rises higher when perceived news comes out that is bad or good, respectively. We are all Lemmings to one extent or the other. We are social creatures, and we don't want to be left out. So, in this case, we need to find those influentials, those people willing to take a risk and endorse something (even if its as simple as putting it on a blog, MySpace page, or creating a YouTube video about how great something is).
They're taking this risk, knowing that if all doesn't go according to plan, their reputation is on the line. But who are these people? I think that while mainstream media is the easy answer, you can find blogs that are certainly influential to a certain community (TechCrunch for techies for example). Tila Tequila, the infamous, most "friended" MySpacer. Perhaps you have to "game" a system to even be noticed. I know that when I go to YouTube, there is so much content, that I just want to view the videos with the most hits. People have figured out how to game these systems to appear just there (although their rating reveals what the content really is). I'm hoping that this is helpful for those of you out there trying to market your products in this vast ocean of "stuff." (After all, MySpace definitely is not the cleanest or best social networking site, yet, they somehow caught). But if I could figure out the next hit, I would be doing so, and as William Goldman once mentioned - "No one knows anything." Very true not only in Hollywood, but when trying to figure out who will be the next YouTube.

The Results are in...Bud TV Falls

2007-04-13T08:06:00.000-05:00

So the results on the very widely watched (at least from a results standpoint) are in. Bud.TV viewership peaked at 253,000 visitors in February and has now dropped to 152,000 unique visitors good enough for ranking number 49,303 on the web according to ComScore Media Metrix. Bud execs were hoping for between 2 million and 3 million viewers on the online network which cost about $30 million. There's been a huge controversy over Bud TV's age verification scheme which asks you to put your drivers license since the attorneys did not want the alcohol manufacturer to actively market to underage adults and teens. However, despite this, Bud TV's free clips on YouTube have received little traffic with a few exceptions.

So the branded television network does not seem to work. Although 150,000 visitors is not bad, granted with a $30 million spend they should have received more. Personally I haven't watched any of Bud TV's clips until this post. Replaced by a Chimp and Afterworld are two shows that I've watched on YouTube. They are not bad although Afterworld seems like more of a slide show than a movie. There is no visible product placement except for the Bud TV logo in the corner. I'm not sure why they are not receiving the views that they were supposed to be receiving especially with all the hype surrounding it. Embedding is disabled for Afterworld, but I don't think that's the issue. I think one of the issues could be the pacing and the length of the shows. On average each show is about 3 minutes, where as Prom Queen is two minutes, although we don't know how Prom Queen is doing yet. "What Girls Want" is pushing 7 to 8 minutes! Replaced by a Chimp also adds about a third to its run time by putting their credits on as a post roll. While viewers probably click off at this point, potential viewers could be dissuaded by such a long run time. OR could it be just a critical mass thing? OR could this really be the Long Tail? Afterworld in YouTube terms is still in the top 10 subscribed and viewed. MySpace took a while to take off, maybe Bud TV needs to just keep at it and eventually a "tipping point" will occur? We'll be watching.

Web 3.0?

2007-04-12T08:56:00.000-05:00

With all of the hype that Second Life is receiving along with the other virtual reality worlds out there, I have to talk about where I think this whole thing is going to go. Mashable reviews Cruxy today, a widget that works inside various virtual worlds, even World of Warcraft. The widget is a player that embeds within an avatar so that artists can sell their audio, video or stills.

Second Life and other virtual worlds are being infiltrated by big brands such as Dell, American Apparel and Nike. Yet while these big brands are necessary I believe that this peer to peer interaction will still drive commerce. For example, your avatar is sitting next to mine at the Second Life Apple Store. I chat with you about the differences between iMovie and Final Cut and you tell me that you think that Final Cut does things so much better and that is worth the price. Then I can purchase Final Cut right from the Apple Store. With Cruxy, the product is you going around telling people to listen to your music. That doesn't really happen in real life outside of Times Square. Again, I think that while big brands have little to lose in Second Life (since most of their stores are not manned anyway), the real interaction is peer to peer. Where recommendations and such will really drive sales and marketing.

Is Second Life overhyped? Probably. Is it the future? Again possibly. While today's mechanisms are a bit clunky, in essence, Second Life is one big chat room with nice graphics, imagine the possibilities when you are virtually there. Think Nintendo Wii meets Second Life...that would be cool.

Marketing Imitating Art

2007-04-11T08:31:00.000-05:00

Just as life imitates art so does marketing. AdAge reports on this growing trend with different products, most popularly sneakers and cars. In fact, something like sneakers is such a popular art that social networks such as SneakerPlay have popped up around one's sneaker collection. (For the record, I am also a sneaker addict with about a dozen different pairs of sneakers.) Similarly the Toyota Scion has done a great job at being customized and thus a work of art in itself. To some degree, cell phones have also become a work of art (fashion) as well.

This being said, how can we capitalize on this as marketers? I think the first thing that we have to think of is WHY people do this? WHY do you want those shiny metallic purple sneakers? WHY do you want that lime green striped Scion? People want to be different, they want to be unique, they want to be recognized as individuals in this age of targeted marketing; the Long Tail. The more you allow someone to play with and customize the more control they want. We could go into a long discussion about iPods but I think that if Apple opened up not only the Apple architecture but also allowed for an infinite color palate of colors people would have multiple iPods for different occasions (my work out iPod, my going out iPod, etc).

Keep in mind that Products as Art only goes so far. Technical gadgets are the best candidate for this (laptops, cars), along with anything that you wear (cell phones, iPods, clothes (obviously)), and anything that you use that defines you (pens, tools, etc). Nike Plus created the wearable iPod with sleeves, sneakers and a whole line of clothing and sneakers that integrated the iPod with the rest of your running outfit. Putting gemstones on your phone was popularized by Paris Hilton but now its tough not to see at least a few people with these "pimped out" phones. Alienware took a commodity and made your desktop PC into your own. With technology we can create customized products for each individual and I think that soon people will expect this.

I think that the takeaway is that if you can customize your product with colors, designs or patterns (cosmetic changes), you should allow your consumers to do so via your website. Not only will they feel that this pattern is unique to them, they will become your brand advocate by integrating it into themselves as ART.

The Value of Your Opinion

2007-04-10T08:22:00.000-05:00

iProspect put out a report detailing user behavior online with an emphasis on social networks. To summarize some of the results:

Despite buzz about social networks, search engines still outweigh social networks in terms of reach and use
However, niche social networks are useful to reach a particular demographic and most social networks are regularly visited.
Purchasing behavior is somewhat influenced by social networks (this includes Amazon.com and Yahoo! Answers)
Most comments are positive, few are negative, but most people don't comment at all.

Interesting report, but one where our intuition really pointed to, which is before you listen to a marketer, you'd rather listen to a third party with no real vested interest in the product. Further, with a very small amount of people that are actually commenting or rating a product, you're left with a core group of activists that are driving a large percentage of ecommerce. Scary thought. The good news is that most people are fair and actually skewed toward product advocacy. The chart shows that a small amount of people are "Debbie Downers" that is, they just post negative comments. A few levels up are the fair folks, those that post both negative and positive - the "speak your mind" folks. And an even larger number are positive folks. Positive comments only. It appears that many net users follow what your mom used to say "If you don't have anything to nice to say, don't say anything at all." Good news for marketers. The scary part are the Debbie Downers, the makers of iPod's Dirty Secret, the whistleblowers, the Negative Nancys, etc. After all these website filtering mechanisms make it easy to find these negative ratings amongst a sea of positive ones. What to do? Don't ignore them. Don't delete them. Address them. Show your loyal consumers that you have nothing to hide and if it is your mistake, admit your humanity. Through this transparent communication, your product advocates will emerge out of hiding and champion your product against the Debbie Downers out there.

Another interesting point is what they call brand awareness versus actual conversion - Amazon obviously leads in conversion while YouTube does a pretty good job of brand awareness. Kind of obvious because you go to Amazon to research a product while you go to YouTube to view stupid human tricks.

Video Game Spending Up

2007-04-09T08:40:00.000-05:00

In today's eMarketer, the report stated how video game spending pegged at about a billion dollars for 07 will nearly double in four years. I think marketers are realizing the potential of video games and the power of product placement, especially interactive product placement. A few months ago, Microsoft bought Massive, an advertising company specializing in billboards for video games. We've seen the success of Burger King's XBox Games. I attended the King Kong premiere last year and instead of a goodie bag they asked me if I wanted a Playstation or XBox Game of King Kong. We've seen the launch of PS3's take on Second Life. And speaking of Second Life, we've seen the massive (no pun here!) press that it has gotten for being an interactive world where real money is transacted.

All of this points to a slow integration of products and services into the content that we consume. Interactivity is the key to building a strong brand. While celebrity and character endorsement is powerful, nothing is more powerful than experiencing something first hand, even if that is through YOUR avatar or video game character (or even yourself through Wii's new interface). I don't think as marketers we give people enough credit. I think they would very much like to be engaged with your brand, if your brand has something compelling to engage with. For example, watching ABC's prime time shows online, some of the commercials that are shown are simply TV commercials repurposed for the web. I can't wait to click on that Continue button. However, commercials that have a story line, or allow you to click to play a game or something that engages you with the brand during that mandatory thirty second break are more likely to be successful. You are actually interacting with that brand as opposed to mindlessly watching a 30 second countdown. In Second Life, you experience (or at least your Avatar experiences) the difference between regular shoes and Nikes. Likewise in video games (which if you think about it, Second Life is one big video game). Point here: keep your eye on this space and begin to develop your own branded content and allow consumers to use your content on their avatars or characters and they eventually may use them in real life.

Update: Companies Happy with Web 2.0

2007-04-05T08:47:00.000-05:00

Well everyone that's spent some cash on your peer to peer network you can now be happy. McKinsey's Survey (registration required) shows that most people are very satisfied with their Web 2.0 investment over the past five years. Most of these folks categorized themselves as fast followers or early adopters, probably because they were able to get in before demand increased and therefore got a good price. In fact 42% said that they invested at the right time while 24% said that they should have invested sooner. A gray web services investment was being used by 80% of respondents followed by collective intelligence, peer to peer, and social networking. Bringing up the rear was mashups, blogs, and wikis, which are not even being considered by many of the respondents. India had the greatest percent increase in investment dollars followed by AsiaPac and Europe, while Retail and High Tech led the way for industries.

Overall the report doesn't say anything that we don't know or couldn't have inferred. The greatest tech growth is obviously in the countries with little to no tech infrastructure. At this time, India and China. Blogs and Wikis still are having a tough time being adopted because companies are still very protective of their IP and don't want anything out there that could offer up their competitive advantage to the industry. Web Services, peer to peer and collective intelligence strategies are leading the way as they are the backbone for any type of further collaboration internally. One lesson learned though is that many of them wish that they had implemented this technology faster. I guess sometimes we never learn, since collaborative technologies like blogs and wikis will (possibly) become a norm, yet very few companies are investing in them.

The First Collaborative Commercial

2007-04-05T08:35:00.000-05:00

Mashable broke a story about the first collaborative TV commercial. For $39 you can buy your own frame of an 8 and a half minute TV commercial. (In PAL at 25 frames per second ourTVad has 12750 frames. PAL is the European standard for broadcast, since this is a Lisbon based site). So far as of this writing they've sold 4 frames. Again, this worked when the guy sold the million dollar home page but I'm not so sure that this will work in video, unless someone buys at least 100 frames. $3900.

I love the warning on the bottom of flickering. I mean come on 25 frames per second and you can buy one frame, of course there will be flickering. If this commercial is ever seen.

Prom Queen

2007-04-04T12:16:00.000-05:00

So Prom Queen debuted on Monday. If you are not aware of it, it is Michael Eisner (ex-CEO of Disney) venture into the online world via Vuguru his online production company. 90 second episodics professionally produced and sponsored through pre and post roll advertisements. Prom Queen is produced by the same team that put together Sam Has 7 Friends, normally thought of as the harbinger of the online serial short, and the first series produced by Vuguru and hosted on Veoh (Eisner is on their board).

Initially thoughts? Not bad. There's a pre-roll and a post-roll advertisement for Hairspray the movie. That's it. No visible product placements. No visible brands. Content wise? Not bad either. Feels Dan Brownish. Each episode ends on a cliff hanger of some sort that leaves you wanting more. The production quality also gives an eerie "Am I watching TV online?" feel to it that makes Internet time feel like TV time. (Meaning that on TV they can slowly creep into a room but online why don't they just have a jumpcut to the room?) Honestly the 90 seconds goes by pretty quickly and you almost wish that they didn't have this restriction (which is obviously what they want). Each of the characters have their own MySpace page and the forums (while not heavily travelled ... yet) could be an interesting point to determine plot points and other things that the producers could use ... or not use.

In my opinion I think the content executes well. I could see that the series could be highly addictive and like shows like Lost and 24 have fan sites arising and all types of chatter via the message boards and forums. The production quality is superior and rivals that of ABC.com. The one thing I'd like to see is better integration of product sponsors with the content. As we move toward a pay per action world, perhaps that's what we might see. But for a first pass, good job, Michael. We'll be waiting to see who kills the Prom Queen.

Another "Wisdom" Application

2007-04-03T08:18:00.000-05:00

After talking about Marketwatch last week, which by the way, when everyone was bullish the market went down (what does that say?), I've stumbled upon another Wisdom of Crowds type application courtesy of Mashable called MyMuv. MyMuv (pronounced My Move) is a trend tracking tool where you can create "battles" between two different things. Examples: Hillary Clinton vs George W Bush, XBox vs PS3, Coffee vs Tea, and a whole bunch of other battles, some that make sense and others that don't.

Now just like Marketwatch, once MyMuv achieves some type of critical mass, will it be able to accurately predict trends? I think that this will do a better job than Marketwatch since there is no financial incentive (at least not apparently) to choose for example coffee over tea. You choose hopefully what you really use or like and the wisdom of the crowd will determine whether or not you are in the majority. Since its a social network, it will prevent one from loading any of the battles and it will determine what type of person you are from your choices, although IE vs Firefox won't say much about you....perhaps.

I think its an interesting play and will probably require stricter monitoring to make it appeal on a macro level. It seems that it is India based with many references to India, which is fine, but many of the battle participants like a Bajaj Pulsar or Dharwad need more explanation! (Although Google and Wikipedia do a good job in defining.) Again, we'll keep our eye on this and see how it predicts the future!

DRM Free at Last

2007-04-02T08:20:00.000-05:00

EMI's announcement today to make their music DRM free may change the entire consumer landscape of music. EMI will sell their new DRM free tracks through Apple's iTunes at an exclusive price of $1.29 (30 cents above the normal track), but they claim to have twice the sound quality of existing tracks. Without DRM (and their CD's do not have DRM), their MP3's will be able to be copied to other players, discs and other forms seamlessly. Will this expand the music business or will it further shrink it?

In my opinion, the removal of DRM from EMI's tracks will actually expand their listening base. Prior users of iTunes who were reluctant to purchase may now purchase more since the tracks can now be played not only on their iPods but on their home stereo systems. They'll be able to share tracks more easily with friends who may be enticed to purchase other tracks by the same artist.

As for the pirates? I think its fairly well known that to get around the DRM you can burn the tracks to a disc and then re-rip them to get rid of the DRM. Pirates that did this before now have to go through one less step. But pirates will always be pirates and even so, pirates will always find a way to crack any type of DRM while true consumers will be the ones that pay the price.

The record labels? The Long Tail is in effect here. Record labels are going to have to find more acts to sign to bring visibility to in order to satisfy their entire spectrum of listeners. They're monopoly is over, its going to be like finding the hidden Microsoft amongst all of the bulletin board stocks out there. Like finding the next lonely girl amongst every YouTube video out there. Like finding the next OK Go amongst every track on iTunes.....

Mobile and Gaming Lagging Search and E-mail

2007-03-30T08:39:00.000-05:00

A recent Forrester research report as reported by Adage notes that interactive budgets are skewed toward measurable means like email marketing and search marketing. The report notes that mobile and gaming are falling behind while social media advertising has risen 40%. Mobile is claimed to fall behind because of the lack of any proof of performance and gaming is skewed to younger sophisticated crowds.

It's so strange that the study notes that mobile is having a tough time growing roots. All around us are examples of successful mobile campaigns. Text messaging your favorite Idol in, guessing which briefcase has all of the Deal or No Deal money, and so on. The key with mobile is point of purchase. The phone is with you at ALL times, more so than even your wallet and/or keys. (And if you forget your wallet you can PAY with your phone via PayPal Mobile). So there it is marketers, your examples of successful campaigns. Then comes the second argument of cost. Well the great thing is that you don't need a graphic designer, a brand name director, or recognizable faces. It's TEXT! It's simple, it's cheap, it's 160 characters including spaces. Once you've decided what your campaign is, whether its polling, driving to web, or simple message push, you just need to rent space on a short code and there you have it - your own text messaging campaign.

Sure, you're going to need to promote it. After all how are people going to find out about your keyword and short code, but if you have a consumer facing brand you have tons of real estate to do so. I think that all marketers should be in the mobile space because its cheap, easy, and quick to roll out. You'll be able to collect the king of all data points, the cell phone number, the most sacred closely kept piece of information guarded by all consumers. (Maybe second to your credit card number, but definitely ahead of your social since you can find that online already).

Advertising via RSS

2007-03-29T10:10:00.000-05:00

So you thought that you could get around banner ads, Google ads, and other types of ads by subscribing to your favorite blogs or websites via RSS? Wrong! Feedburner's ad service embeds the ads in feed readers now such as Google Reader. The CPM's are relatively inexpensive at $5 or so on average. I think its a great service, and it will take time for Feedburner to build an advertising base as large as Google since I've seen this implemented on TechCrunch and Mashable and there is a clear rotation of a RedHat ad and a Microsoft ad (and when I went back the Microsoft ad disappeared!).

So this is a clear indication of the power shifting (albeit slowly) from mainstream media to bloggers (although only certain well trafficked blogs are eligible). However, aggregators like My.Yahoo still won't display these ads and since they are a majority of the RSS readers out there, although to read the content you must click through.

While this is an interesting addition to the world of blogging, I still think that integration into content is key. While initially folks will think that the ad is part of the post and might be more inclined to click on it, eventually the ad will become a banner ad, one that is easily dismissed and ignored. We shall see!

The Second Coming of the Infomerical

2007-03-28T08:24:00.000-05:00

By now we've all seen the "Will it Blend?" demos on YouTube. If you haven't, its a series of demonstrations where the CEO of Blendtec, a blender company, blends unlikely items, like iPods, golf balls, a rake, cell phones, and well, you get it. The videos are done in a 60's science show manner and have made the rounds on YouTube. AdWeek reports that these videos have caused a tripling in Blendtec blender sales. (By the way, everything on the show, thus far, has blended.)

The videos are pure genius. They're taking a common household product and giving it the oomph to become viral amongst the YouTube generation. I'll be honest, they are extremely addictive to watch. So for smaller companies out there that want to finally have a low cost commercial out there? Now is the time! The production costs are extremely low, however, for an Internet video to work, it has to be fun, engaging, shocking or all of the above. No more 30 minute Ab Roller infomercials, or Bowflex demonstrations. Nike has one of the most watched videos of all time with a quick clip of soccer great Ronaldinho hitting the goal post 4 times in a row while wearing new Nike sneakers (shocking). Eepybird's duo proved that Diet Coke and Mentos mix well together, which spawned thousands of videos in response (fun). Dove's evolution video exposed the techniques of graphic designers and the modeling process (engaging and shocking).

It's not easy, but online video has opened up another world of infomercial production and a cheaper way to distribute your product's message to the world.

Stock Market Predictions

2007-03-27T08:29:00.000-05:00

We've covered stock picking social networks like Stockpickr, Bullpoo, and other communities regarding investing. However, TechCrunch broke an interesting tidbit about how a fairly mainstream finance website, Marketwatch, is allowing for the masses to determine whether or not a stock is going to go up or down.

So far from what I've seen it seems that Marketwatch users are more bullish than bearish today (3/27). I guess we should wait to see what happens in the market.
However, more importantly, while some Marketwatch users could game the system (by disabling cookies), the sentiment tracker could actually be a self fulfilling prophecy with people flocking to the stocks that are predicted to rise. While its an interesting concept if we were talking about sports, I think with so many people in the stock market, Marketwatch needs to find a way to keep the results somewhat fair (by forcing people to register before they vote). Then again, it probably only matters who is coming to the site.

At this point, the data is probably meaningless. However, just like the social networks, this new Marketwatch feature is an opportunity to watch to see if your stock is getting bashed or being pumped. Only over time will we be able to determine its accuracy as a secondary market.

Video Ads More Effective than Images

2007-03-26T08:44:00.000-05:00

Doubleclick issued a research release about how inline video ads are clicked on more than twice that of banners and images. The report also says that the overall interaction rate is 8 percent! 8 percent! That's a huge number. A number that includes mouseovers, expansions, clicks etc. That number could also be pretty misleading. I've run into a ton of video ads that pop up right when you get to the webpage and you might have "interactions" with it when looking for that hidden "close" button. Unfair you might say. Well, I think that after hearing about this next statistic, which is 0.32 percent press the play button, you'd think otherwise. While this 0.32 percent is double a banner ads click through rate, this is a huge drop off from 8 percent. If the video isn't playing then what? Most likely you're trying to close it, or find the "stop" button. Then Doubleclick says that most videos on average are played 2/3 of the way through. OK, not bad. It could take anywhere from 10-20 seconds to find the close/stop/destroy button. Doubleclick's overall message: Video is twice as effective as Images....

But images aren't really effective. We know that. Whenever we go to a page, we automatically tune out those banners on the top and the skyscrapers along the sides. (Google Adsense speak there.) So what should you do? I've said it once, but I'll say it again, and even Mashable echoes me on this one. Embed your message within your content! A UK boxing promoter is suing YouTube for $1 million. (Rounding error for the Google guys, and a tenth of a percent of what Viacom wants.) The promoter was selling PayPerView subscriptions through his website. But as Mashable states"[the industry] need[s] to adopt a model that provides unlimited syndication, with watermarking and embedded ads, so the business model remains while users still get access to the content. This model would also solve the issue of unauthorized fan footage: rather than keep your version locked up and fight an endless battle to keep cameraphones and video cameras away from sporting events, just offer a higher quality version for free with an ad attached."

People don't want to be sold, but they do want to buy. Advertisements are an opportunity to sell. Embedded content makes them want to buy.

NBC and News Corp's Vaporware

2007-03-23T08:37:00.000-05:00

By now you've already heard about NBC and News Corp's venture to take on YouTube. The conference call really goes into the details. Not! In summary, they stressed copyright protection with help from their distribution partners (probably a majority of that being MySpace), some paid, but mostly free content, and being the world's largest advertising platform. Doesn't say much does it? Does this product even exist?

On the surface, this new company appears incredible. Copy protection for content creators and a great revenue split (90-10), and a way for distribution platforms to share in getting this content to the consumer. Further from all reports on the advertiser front, something their sales team is saying is making the ads fly off the shelf. But in all of this, the most important piece of the puzzle is being ignored. THE USER. The user is what made YouTube become YouTube. The user has made MySpace the #1 social network in the world. The user was the Person of the Year! And all this talk about advertising? Yesterday I talked about Burger King and how successful it was because the advertising was integrated with the game and in previous posts I'd written about the whole product placement phenomenon. When is big media going to realize that instead of being able to see The Office a few hours after Hawaii gets to see it on my computer screen with commercials, I'd rather TV it, or worse yet, watch the pirated YouTube version with no commercials? Love it or hate it, we have to face the facts. If the user experience is horrible, there will be no more users. Just ask Friendster.

BK Got it Their Way

2007-03-22T08:57:00.000-05:00

I've been talking about product placement in online video as exemplified by Diggnation and other such shows. I think that these unobtrusive ads are going to work best in our new tivo like society. The advertiser pays these content creators a sum to interact with their brands while potential customers watch the characters interact with a brand and possibly drive themselves to want that same product. This works with some products obviously not with all... (How are you going to sell a lawn mower? cleaning products? class action legal services? you get the point.)

On the other hand we've probably all seen those Burger King commercials with the creepy king in it. I think what Burger King did however with their XBox promotion took the best of the product placement world and the ever growing video game world. Burger King created three versions of BK character driven games through a partnership with XBox and actually SOLD these games at their restaurants, with the qualified value meal purchase. For the consumer that's great. Instead of paying $50 or more for an XBox game I can now get one for about $4 and get a fast food meal. Good deal. For BK, they obviously subsidized the cost of the game a bit but now have somehow manipulated it so that you want to PAY to receive their advertising! It's brilliant. According to Business 2.0, the games sold more than 2 million copies in four weeks, and placed them on the top 10 selling games of 2006.

Stay tuned as the Geico Caveman starts working out for his debut series this fall!

Pay Per Action

2007-03-21T10:57:00.000-05:00

As reported in Techcrunch this morning, Google's Pay Per Action engine is no longer a myth. It's a great thing for an industry that is plagued with click fraud, but it also drives more power into Google as other affiliate marketing programs will likely be raided. Further, Google is allowing ads to appear in line with blogs. As from Google's blog, :"These Javascript-based ads will display like regular hyperlinks and allow publishers to embed these links inline with other text to promote your product or service."

So Pay per Action huh? I think its good news for advertisers out there. Of course, each action will be more expensive than a click but now you are basically sharing your margin with Google. Affiliate marketing essentially. No click fraud. It's win /win for both. Will it put a dent into Google's treasure chest? I think in the short term it will. But as more advertisers realize that this model provides them with incremental revenue that they wouldn't have received anyway, more advertisers will sign up growing Google even larger. You know who loses here? Small affiliate players and to some extent SEM firms that work on optimizing your ad for maximum click through.

Now the second point. How are these inline ads going to change the blogosphere?
Sounds like a conflict of interest to me. Remember the controversy regarding Pay per Post where bloggers got paid to tout products. While the company advises a disclosure, I don't think its required. Is Google going to have some type of disclosure policy? Although the text links will say Ads by Google most people probably won't see this as they are already clicking on the link. And will it be annoying? Google says that the ads will appear on Mouseover, which probably means more Ajax and more pages cached and more and more memory needed.

All in all today's announcement by Google will change the way we as advertisers and as consumers utilize the Internet.