Posts Tagged ‘advertising’

You Know Interactive Advertising Is Still A New Field When…

April 1, 2008

… you find yourself explaining the definition of an “impression” to a co-worker or client.

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More Difficulties Monetizing Web 2.0

February 7, 2008
A Branding Me First: I Was Right About Something!!!

It’s a bittersweet day for those of us who keep repeating over and over and over again that advertising on social networking sites is not effective. I think I have been spouting the same line since I started this blog: advertising, although it may create revenue, is not the most lucrative way to monetize Web 2.0.

Google’s stock tanked recently, falling 8.6%, which is the sharpest fall since it went public. As many of you already know, this is in large part due to the recent “bear hug” Microsoft gave Yahoo. But another key reason for the dive was the (semi)lack of revenue growth: although the net income rose 17% compared to a year earlier, that figure fell short of analyst expectations, and may represent the peak of continued growth.

So how come Google did not meet expectations? CFO George Reyes said, “We have found that social networking inventory is not monetizing as well as we would like.” Translation: we bought a helluva lot of advertising inventory for a helluva a lot of money, and it’s not performing. How bad is this problem? the reporter for the NY Times continues: “People involved in [the MySpace deal] said that Google never assumed that it would earn its $900 million back from that deal, but it appears to be losing even more than it had expected.”

Now, don’t get me wrong; I don’t think advertising is worth throwing out completely. I just want more creative business models for Web 2.0; there has to be other, more profitable ways to monetize these services.

Anyways, so much for me being a “naysayer” (the link back to me is in the last paragraph of this other blogger’s entry).

EDIT

Also check out AU Interactive’s rundown of a Facebook Social Ad experiment. 

Microsoft Bids On Yahoo

February 1, 2008
Trying to Compete with Google

In what Bloomberg states is “the biggest-ever technology takeover,” Microsoft made an unsolicited $44.6 billion bid for Yahoo. That figure marks a 62% premium of Yahoo’s stock price as of yesterday’s closing.

It seems this bid is the culmination of the roller-coaster ride Yahoo has been on the past month: first, according to one report, the Yahoo CFO Susan Decker stated, “We don’t think it’s reasonable to assume we’re going to gain a lot of share from Google […]. It’s not our goal to be No. 1 in Internet search. We would be very happy to maintain our market share.” (as of September of 2007, Yahoo’s share of search traffic was approximately 19.5%, followed by MSN at 12%, compared to Google’s 54%). Second, Chairman and ex-CEO Terry Semel left the Yahoo board. He is credited it reviving the company and then “losing touch,” not being able to gain on Google’s dominance as quickly as others had hoped.

This hope was one of the reasons Yahoo ditched merger talks last year: “In a letter to Yahoo’s board, Mr. Ballmer wrote that the two companies discussed a possible merger, as well as other ways to work together, in late 2006 and 2007. Mr. Ballmer said that in February 2007, Yahoo decided to end the merger discussions because its board was confident in the company’s ‘upside.'” Now that that potential “upside” has fizzled out, it may be we’ll see this bid actually go through, especially since the search advertising market could possibly grow to $80 billion by 2010.

EDIT

Found a copy of the letter sent to Yahoo by Microsoft, and a great analysis of the possible merger on Forbes (the title? “A Messy Marriage”… gotta love it).

So Much For Consumer-Generated Ads

January 29, 2008

Subway is suing Quizno’s over a contest the latter company held, where users were encouraged to make commercials depicting Quiznos’ sandwiches as “superior” to Subway’s. A breakdown of the suit thus far can be read here. If you’ve been thinking of working in copyright and defamation law, now would be a good time to do so. Unfortunately, consumers may find themselves liable, not the advertisers or companies.

Wow.

No Complete WSJ.com Access

January 25, 2008
Wall Street Journal Won’t Be Free

Hopes of the Wall Street Journal getting rid of their online subscription revenue have been seriously dashed: speaking at the World Economic Forum, Rupert Murdoch reportedly stated, “‘The really specialized (material) giving the greatest insights, that will still be a subscription service.'” However, the New York Times pointed out that Murdoch has “has vacillated publicly” about staying fee-based; the article noted that in November, Murdoch said “‘We expect to make that free.'” So why the change? Although I highly doubt Murdoch and company based the decision on this information, a Bear Stearns analyst concluded that to free WSJ.com, the site would need 12x more traffic. On The Long Tail, Chris Anderson explicated why that conclusion is probably false. I mostly agree with him, since the analysis is “based on an estimated CPM of $6”; that price estimation strikes me as ludicrous, because I’m pretty sure old media schedules for my clients do not include a $6 CPM.

Oh well. I was hoping I could gain access to more articles, such as “A CDO Called Norma,” especially since the topic directly affects my work. Looks like I’ll just have to wait for that raise.

Facebook: All We Know Is Advertising

January 18, 2008
Facebook On The Way Up 

Although MySpace got 76% of US social network traffic, Facebook grew 51% last year and is about to surpass MySpace in foreign traffic. It’s interesting to note that although MySpace still dominates the total pageviews traffic, growth is stagnate; meanwhile, Facebook continues to make impressive gains.

Zuckerberg Makes 60 Minutes Appearance

zuckerberg.jpg

You can watch the full broadcast on Kara Swisher’s blog (she made an appearance on the segment) Boomtown; there is additional content and a transcript available on the 60 Minutes website as well.

Zuckerburg basically quotes PR material verbatim, which is an assumption on my part, but if you watch the video I feel it will be immediately apparent. One of the highlights of the segment is when Leslie Stahl ask Zuckerburg, “You seem to be replacing Larry and Sergey as the people out here who everyone’s talking about.” He just stares at her. And stares. So she says, “You’re just staring at me,” to which he replies, “Is that a question?” Golden.

“There Have to be Ads”

The rest of the segment is pretty fair, neither a complete puff piece for Facebook or a total humiliation either. One part the stuck out for me, however, is when responding to issues of advertising, privacy and the following PR disaster, Zuckerberg states, “I mean there have to be ads either way because we have to make money.”

Hold up one second.

Dear readers, please look at that again: “I mean there have to be ads either way because we have to make money.” [emphasis mine] It’s disappointing that so many websites these days cannot think beyond the advertising revenue model; yes Google did it and is now multi-billion dollar company, but the context of a sponsored link in a search results page is much different from text ads in a Facebook profile; same goes for many other social networking sites.

badoo.jpg

Where is the creativity?! Where is the diversified bottom line? I’m guessing all of you want glorious IPO’s that a) line your pockets with cash and b) vindicate the various investments that value your product in the billion-dollar range… are you really going to get there through simply advertising? Please, be honest here.

Here’s some ideas: Badoo, a social networking site, lets a user’s profile and content be featured for $1 in a program called Rise Up. Or, you can look at a recent in the blog A VC for a great rundown of revenue ideas, some of which are from Chris Anderson’s earlier post

What Won’t Google Do?; Lazysphere Blogging

January 17, 2008

“The Search Party”

Recently the New Yorker published an article about Google’s foray into, well, just about everything.
Kidding.
Anyways, here’s a great quote:

As Google expands beyond search […] the risk is that the company will come to believe that its engineers can master any business, solve any problem, and that Google will lose its focus.    

So, I don’t run a multi-billion dollar corporation, but even to me it seems Google is spreading their talent too thin; it’d serve them well to stick to their corporate mission: “to organize the world’s information and make it universally accessible and useful.” That’s quite a task… so why distract yourself with other things? Is Google running the risk of Starbuck’s, that of diluting the brand? Okay, that may be an apple to oranges comparison, but I think I’ll hold my ground on that argument. I.e., Google should stick to organizing content, not producing content.

Are You A Lazy Blogger?

Steve Rubel once again makes a good point: bloggers can be lazy, meaning bloggers are joining the “Lazysphere” instead of producing thoughtful, quality content. Interesting, because a while back Rubel stated that he’d rather post less on Micro Persuasion in favor of being “into the whole micro-blogging revolution”.

Now, my two cents: it’s hard to constantly produce good content. For some of the longer posts you read here, I can spend one to two hours simply doing research… yes, that time does not even include writing. My process is to go through all of my RSS feeds, hit up some of my favorite blogs and see if I can spot a theme; then I dig a little deeper through search engines in an attempt to find more articles. I read them all. I grab the url’s of the pertinent ones and then try to form a post that includes my analysis and opinion. That takes a lot of time. And what do I get for it??? About 3 pageviews a month.

So what’s my issue? Maybe I’m a horrible writer; maybe I don’t have original, quality, thought-provoking content; maybe I don’t post enough; maybe I might not engage in the blogging community enough to draw others to my blog; or maybe people are simply not interested in my ongoing thought process of how to monetize Web 2.0 sans advertising. Whatever the reason (I’m guilty of a lot of the things I just listed), it’s hard to keep it up when you can tell for certain that no one gives a $h!t about what you have to say…

Blogging For Money; FCC Auctions

January 15, 2008

Blogging For Money

Another story from the Journal did a great run-down of some new ways bloggers can take their labor of love (i.e., making enough money each month to cover hosting fees) to an actual cha-ching enterprise (i.e., being able to cover monthly hosting fees and some extra lattes for all those late-night marathon writing sessions). Unfortunately, the article is centered around how to do the best advertising program for your blog… which, once again, leaves us with no better ideas about monetizing Web 2.0 than slapping ads on whitespace.

FCC Airwaves Auction

I found an article on Bloomberg that was very useful in clarifying what the FCC auction will look like when it starts in two weeks. Also, the Wall Street Journal reported that Frontline Wireless has met it’s “demise” even before the auction started. Interesting, because the company was able to get a 25% small-business discount credit, but nevertheless ended up not being able to make the minimum bid.

FCC Airwaves Auction and Google

December 4, 2007

I love a good conspiracy theory.

Therefore, I want to know what Google is up to concerning their go-it-alone bid in the FCC auction for a piece of the wireless spectrum. Google may have to go as far as financing their bid because, despite their success, they don’t have the flow of hard cash needed to win. Moreover, a writer from the National Post mentioned that a Goldman Sachs analyst viewed “negatively a scenario in which Google wins the auction and decides to build and run a wireless network on its own.” I agree; I highly doubt they would want to take on the cost of maintaining the spectrum, and would most likely partner with someone to take over the nitty-gritty details. So what is there motive?

It seems many are parroting this section of the press release by Google:

Consumers deserve more competition and innovation than they have in today’s wireless world. No matter which bidder ultimately prevails, the real winners of this auction are American consumers who likely will see more choices than ever before in how they access the Internet.  

Eric Schmidt is correct in stating consumers want more innovation. Thing is, besides the AdWords gold mine, this company has yet to make a successful foray into, well, anything else. So far search advertising is their one trump card (although that is a damn valuable card to be holding). I think the second card they hold is their staff. Google allows their engineers time to work on their own side-projects (read: you have free time, but we own anything you think up…) and works hard to keep their people happy (have you been to the NYC headquarters? Their cafeteria has an incredible view of Manhattan, and some kick-ass sushi). Thus Google has a great stronghold on housing the potential for innovation.

What’s ironic about the press release is that Google is trying to position themselves as an advocate for openness. I about died laughing when I read that line.

But then again, Elizabeth Woyke noted that others agree: Amol Sarva argues that “simply publicizing its involvement [in the auction] should help achieve Google’s goal of liberalizing the wireless industry.” Google is the starting point of more than 70% of internet searches, and now they are bidding to control another key access point to the Internet. In addition, they are developing Android to further control that access point (assuming they win the bid). They are working hard to ensure the wireless industry is liberalized in their favor; any company would do the same, but for a company that has yet to produce any solid wireless gizmo (be it software, hardware, etc.), the question becomes, “Are they simply building structures to be ready for the future, or do they already have something up their sleeve?”

John Fine put it thus: “The eternal story line in media is ‘Google is moving into [fill in the blank].'” True. His byline reads that Google “sticks ads all over. But to maintain growth, it may need to own the places it puts them.” Are they really betting that expanding the reach of their advertising program onto the mobile phone is worth two years of their earnings? Does that much growth potential exist in that sector? I doubt it. For example, Woyke and another writer pointed ou that “Google lobbied hard to change rules governing use of the spectrum and was able to get lawmakers to ensure an open standard for part of the spectrum.”

They’re up to something. I can’t put my finger on it, but it’s there.

Dell Goes After A Pet Peeve Of Mine

November 30, 2007

Although Dell’s third quarter figures rose compared to last year, The Wall Street Journal pointed out that purchases from businesses overall has remained stagnant. So, Dell went and figured out a way to increase their bottom line: sue cybersquatters, especially with a nifty little charge tacked on that could take damages from $1000 per domain to the millions.

Now don’t get me wrong: typo/cybersquatters annoy the hell out of me. Purchasing domains for clients always becomes a little more tricky because these people run schemes to keep the URL tied up as they switch them around for free, while also making money off of AdWords commissions. This practice also ends up costing my clients valuable money in their pay-per-click campaigns (Richard Ball has the same issue for some of his campaigns and has a great analysis of this on Apogee Weblog).

I really don’t see Dell winning this case but, oddly enough, I am secretly rooting for them. Even if they do win I don’t foresee smaller companies like mine being able to chase these squatters around for money that infringes on our clients’ domains, but it would be nice to see less of this junk showing up as referrers in our Analytics reports.