Darren Herman
Marketing, Media, and Technology Conversations

Put the Service Back in Technology

admin April 26, 2013 1 Comment

I meet with plenty of technology companies who sell to marketers and agencies and  I also meet with many marketing and advertising technology startups who are pitching for venture funding.  Sometimes they are one and the same.

I’ve been witnessing companies coming thru the door and telling me that they are a pure technology platform, not a service business.  Most of the time, their motivation to say this is to achieve a technology multiple (on sale) versus a service business multiple.

I think this is faulty and a mistake.

There is nothing wrong with wrapping services around a technology, especially in the early days of your company.

If your idea is new and unique, then most marketers or their agencies will have no idea how to build the assets necessary to deploy on your technology platform; thus a service business is needed.

If your idea isn’t overly unique, marketers and agencies still generally want help to get assets created or implemented.  A services group can help enable this to happen.

At the end of the day, as a startup or technology company, you want marketers or their agencies to have the best possible experience when using your platform.  I define experience by performance and service.  This will have a higher chance of keeping them back (and the dollars flowing).    By creating an organization that can enable this to happen (creating the right assets, trafficking properly, building KPI’s and metrics), you are at least starting off the relationship on the right foot.

Put the service back in technology.  It’s not such a bad thing.

 

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Advertising & Marketing, Startup & Venture Capital, Technology
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Some Thoughts on SocialFlow, Our Latest Partnership

admin April 17, 2013 No Comments

It was announced yesterday that SocialFlow raised $10MM in Series B funding and our kbs+ Ventures participated along with Fairhaven Capital (lead), Softbank, RRE, AOL Ventures, Betaworks, and Rand Capital.  We blogged about our perspective on why we participated on our corporate blog but I wanted to add a few notes here.

I have been tracking SocialFlow ever since I was introduced to Frank Speiser at an event at Nihal Mehta‘s apartment in January 2010.  After learning about what he was building and why, I quickly saw the opportunity to leverage the technology for marketers.  Later that year, Frank give a talk at The Media Kitchen‘s Digital Media Venture Capital Conference and I’ve stayed in touch since.

When we found out that SocialFlow was raising money and was looking for a strategic or two to participate, it was a no brainer for us because of the trends that we are seeing in the space.  I will explain those below.

1.  Evolution of Communications Architecture:  Way back when, the communications architecture generally consisted of Public Relations, Investor Relations and Paid Media.  While those three still exist today and are still going strong, we’ve now re-arranged the construct to be Paid/Owned/Earned media.  What you [as a brand] do and say in paid media can be made exponentially greater when you leverage owned and earned.

2.  Communications Velocity:  The speed in which communications hits the marketplace has increased rapidly.  I don’t know of a “law” such as what we have with transistors (Moore’s Law), but I have to imagine that the speed in which we communicate has increased so significantly that old media cannot keep up.  Within 15 seconds, I can put out 140 characters to my entire follower-base on Twitter, Facebook, Pinterest, Instagram, Vine, or whatever other communications tool.  When it was just print ads, television ads, or even radio, it took months… sometimes a year (inclusive of production)!

3.  Big Big Data:  Almost every digital platform we use exhausts some form of data trail.  This data trail can be collected, mined, and optimized into an opportunity or insight for a marketer (or any company for that matter).  With the explosion of digital communications, there is a ton of data that’s available to optimize from.  Making sense of this data thru frameworks, architectures, and algorithms, will allow marketers a leg up in the communication “wars” for customers.  Note: It’s not about the size of the data set, it’s about the insight that’s gleaned.

4.  The Shift of Dollars:  We have all seen the charts that show time spent with a media channel vs. advertising dollars and the gap that exists in digital is still large.  But it’s getting smaller, which means that ad dollars continue to flow into the digital landscape.

SocialFlow capitalizes on the four points above.  They are smack in the middle of all of this.  Many of the kbs+ Ventures portfolio companies also exhibit these traits (and others).

With our relationship with Frank, the evolved management team, and the market traction the company has, we were super excited to green light this investment.

 

 

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Advertising & Marketing, Internet & Web X.0
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The Most Important Car America Has Ever Made

admin April 8, 2013 No Comments

I spent late yesterday afternoon with my father at the Tesla showroom in the Westchester Mall.  We left the kids behind and went to seriously look at the Tesla because I’d been reading glowing reviews and I’m, well, a curious car guy.  The picture below is actually my father driving the car.

Tesla Model S PerformanceExpectations were set high for this car due to the reviews and listening to @jason talk about how much he loves his car.  Also the entrepreneurial side of me was unbelievably curious as to how Elon Musk built a car in the USA without being part of the old Detroit boys club.  Building a business without knowing the constraints of the industry, being naive, could be a very good thing, especially when disrupting it.

In one statement, I was blown away by the car.

We test drove a Model S Performance car (pearl white w/19″ tires – winter).  Here is what stood out to me:

1.  Power:  I had no idea that an all electric car could be as powerful as this.  While I knew it was technically possible, I had no idea what to expect.  I thought driving my Audi A7 was fun for a sedan but the Model S Performance car certainly gave it a ride for it’s money.

2.  Seating:  I have two young kids so having the option of the 2 seats in the back of the car is a major plus as it frees up the second row.  This means we can take family and friends along with us because right now, my current car has two car seats in the second row.

3.  Electronics:  Google + Garmin was pretty sweet.   I was used to Google from my Audi but having a 18″ screen in the car is pretty sweet.  This screen can do HD back-up camera, music, tuning, air suspension controls, etc.  It’s gorgeous and love the touch of night vs. daytime lighting.

Downside:   I cannot wrap my head around how much this car will be worth in 3-4 years when I’m likely to move on.  Maybe this is the wrong question to be asking?  But it’s something that I’m noodling and holding me back.

I don’t think this car is revolutionary as it’s still 4 wheels and takes up a parking spot, but I think this car is evolutionary to our automotive world and something that is going to set the standard for the future.  It’s almost like driving the future, today.

I read a ton of online reviews of this car and Road and Track says it best:

“Beautiful, well-crafted, cool, and seriously fast, the Model S isn’t just the most important car of the year. It’s the most important car America has made in an entire lifetime.”

i
Darren Herman

Adobe Strategy: On Point for 2013

admin March 11, 2013 1 Comment

I am a fan of Adobe ($ADBE).  You certainly know this if you’ve been reading this blog.  Here is an article I wrote in 2011 about Adobe’s strategy that has pretty much held true and something we all should re-read.

ADBE Stock

This morning I read the 2013 Investor Presentation (PDF) by Adobe and wanted to highlight a few things that I found interesting:

On slide 22 of the deck, Adobe mentions “key digital marketing growth drivers:”

  1. Shift of marketing spend to digital
  2. Re-platforming of the Web
  3. Demand for Cloud-based solutions
  4. Multi-channel campaign and social marketing solutions
  5. International growth

#2 (re-platforming) above is really, really interesting.  I had been looking for a term to capture this insight and I think they nailed it.

The 1990s ad-stack is on the way out, or at least has matured.  The new marketing stack is filled with social, mobile, local, and dynamic delivery.  Marketing tomorrow will not look like marketing yesterday.

On slide 26, Adobe talks about their stack (well, cubes):

  1. Adobe Analytics
  2. Adobe Target
  3. Adobe Social
  4. Adobe Experience Manager
  5. Adobe Media Optimizer

I’d have to say that these cubes/stack are pretty much aligned for the future.  Marketers and agencies are demanding ROI for their marketing spend and quantitative validation is key to success.

Read the investor presentation if you get a chance.  It’s a fast read.  If your organization is not aligned with this thinking, rethink where you are headed.

 

 

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Advertising & Marketing
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Facebook, Ad Servers, and $344B in Media

admin March 7, 2013 3 Comments

There is $344B in media* market cap that own and operate ad serving systems now.  

Google acquired DoubleClick ($274B mkt cap), AOL acquired AdTech ($2.86B mkt cap), and Facebook acquired Atlas ($65.4B mkt cap).  ValueClick owns MOJO and retained Mediaplex ad-server ($2.05B mkt cap).

When we think about ad servers for Madison Avenue, our guts tell us DART and Atlas**.   Both of these two ad serving solutions are now owned by larger-than-life media platforms.  MediaMind, the challenger of ad serving solutions is making inroads across Madison Avenue and believe it or not, has surpassed Atlas as the number two platform.***

Having heard the speculation turned news recently about Facebook acquiring Atlas and reading Gokul’s post on AdExchanger, I still do not understand why they did this acquisition unless Facebook thinks they can convince Madison Avenue to use them as their 3rd party ad serving tool of record.

My question to Madison Avenue:  Wouldn’t you want an impartial 3rd party to be your ad serving tool?  Why would you rely on a media property who is going to make more money off media than ad serving to deliver you your attribution models?

And with this, I’m not saying Google is any better.  It’s a big reason why the majority of our clients are not on the DART ad server.

In the finance world, there is significant rules around proprietary trading (prop desk) and analyst/research work.  The two basically do not intermingle and in the recent laws, the two might have to split.   This is FINRA rule 5280.

(a) No member shall establish, increase, decrease or liquidate an inventory position in a security or a derivative of such security based on non-public advance knowledge of the content or timing of a research report in that security.
(b) A member must establish, maintain and enforce policies and procedures reasonably designed to restrict or limit the information flow between research department personnel, or other persons with knowledge of the content or timing of a research report, and trading department personnel, so as to prevent trading department personnel from utilizing non-public advance knowledge of the issuance or content of a research report for the benefit of the member or any other person.

I understand that advertising is not finance, but wouldn’t we take clues from a more robust industry?

If you are a marketer or agency and put all your media plan data in a company who is selling you millions of dollars of advertising media, don’t you think that the data will be used against you?

Here is an example, purely from illustrious purposes:
Property A – $6/cpm $3/cpa
Property B – $8/cpm $3.50/cpa
Property C – $7.75/cpm $3.40/cpa

Imagine the three properties above have their data in an ad server controlled by Google, AOL, ValueClick, and now, Facebook.

When you go to purchase media from any of these four properties, they can see what you are currently paying and what the actual performance is.

This gives these media platforms a significant leg up on pricing & performance as they know where they need maintain or beat.

Is it just me that’s skeptical?

On a completely other note, I do not run M&A for Facebook but I would have suspected they would have built their own Ad Server and maybe acquired an attribution company such as Adometry, C3 or VisualIQ (or the many others in that space).

* Companies who own significant media properties.  Google, AOL, Facebook, ValueClick.
** There used to be a trade magazine that showed ads served each month by ad server, but I haven’t seen it in a while.  Purely based by my conversations with other agency heads, Atlas and DART are the primary ad servers that come up in conversation.  MediaMind is coming up more and more.
*** Updated after an email conversation with MediaMind.

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Advertising & Marketing, Startup & Venture Capital, Technology
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Evolving Corporate Strategic Investing

admin March 6, 2013 2 Comments

We had a nice piece written about kbs+ Ventures in the WSJ today that spoke about the evolved model we are bringing to market.  I’m glad the WSJ initially reached out because it’s truly a great story to tell.  You can find the article here.

A month or two ago, we also put a short video online to explain kbs+ Ventures within a Made Here series that our agency is releasing.  The video showcases Taylor and myself talking about our investment vehicle as well as how we incorporate Ventures thinking into the larger agency.  You should check out the video if you’ve not already seen it.

I’ve always said that the world does not need another investor.  There is no lack of venture capital available today to startups of all shapes and sizes.  But, what Madison Avenue needs is to get closer to the technologies that have the power to disrupt our business in the future.  Some agencies are going to wake up 5-10 years from now and realize that they do not have a business any longer.  Other agencies such as ours and some of our peers will embrace this change and start investing in the future.

Its been fun and we’ve really only scratched the surface with what the big opportunity is for us.  Thank you for all of your continued support.

On a side note, if you haven’t yet downloaded our kbs+ Ventures book, what are you waiting for?  You can download Creative Entrepreneurship here.

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Advertising & Marketing, Startup & Venture Capital, Technology
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Marketing Technology that Powers $42.3B in E-Commerce

admin February 19, 2013 No Comments

Quick link:  Download report here.
This was our second year releasing the Marketing Technology Holiday E-Commerce report.  It’s no Lumascape, but it’s damn interesting.

It started as a simple project for me to understand which top e-commerce players were using different Marketing Technologies.  This year, we included trending information from last year’s report.

Here is a link to the new 2012 report (PDF), and a link to the old 2011 report (PDF).  The actual data set that it is derived from can be downloaded here for your own analysis.

I owe a big thank you to my friends at Evidon for providing me this information as Ghostery powers much of it.

AdExchanger was kind enough to write up the report late yesterday and hopefully you had a chance to read it.

Here are my takeaways:

1.  Social.  100% of the 20 surveyed sites were using social plug-ins or another form of social connectivity.  While social is the grouping, this shows the power of “earned” media; or at least the potential power of “earned” media.

2.  Audience.  I’ve been harping on this for years now.  We need to understand audiences in marketing.  Not just online, but in store too.  We’re seeing these top e-commerce sites learning about their audiences by deploying different marketing technologies that could help shape audience experiences, products, customer service, etc.

3.  Mixpanel.  I was surprised to see them in the top 10 marketing technologies utilized.  They are an analytics platform for the desktop and mobile web.    Impressive to see them breaking into the top 10.

4.  Slow decline of the ad networks.  Not the death as many folks have predicted but 51% less ad networks year over year.  Google AdWords was the top ad network (no surprise).

Again, the report isn’t perfect due to classification of companies but it’s directionally accurate.  I look forward to hearing your thoughts!

i
Advertising & Marketing, Startup & Venture Capital, Technology
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What Does Rick Rubin and Paul Graham Have in Common?

admin February 15, 2013 1 Comment

My brother recently took me to a Sound City Players show here in New York.  I’d never heard of the band before other than hearing it was a mashup of Nirvana, Foo Fighters and a dozen other artists.  How bad could that be?

In order to prepare for the show, he told me to watch this iTunes movie which is the history of Sound City.   I was not able to watch it before the concert but did end up watching it last night (romantic Valentines evening).

To sum it up quickly, Sound City was a recording studio in California that became famous for it’s location, home-y yet raw venue, and the volumes of gold and platinum albums that it turned out.  The studio was dedicated to tape based recording (pre-digital) and was magical in how it produced and directed everyone from Fear to John Fogerty, from Stevie Nicks to Nirvana.  The list of artists that stepped foot through their doors is unbelievably diverse and deep.

While watching the documentary, it got me thinking about how Sound City is similar to some of the incubator and accelerators that we have in the marketplace today for technology companies.  Are YCombinator, TechStars, Science, and others the next Sound City?

In other words, are recording studios similar to accelerators and incubators;  In many ways, they are.

I’ve spent some time in recording studios – specifically one here in New York City during my music business days.  Producers and recording engineers play similar roles to mentors and advisors that come thru accelerators and incubators.

Producers help to shape the music and if good, get the very best out of the artist.  They push the artist forward and move them into uncomfortable zones… often telling the artist things that they might not want to hear.

Recording engineers are making sure the music is being captured correctly and in a way that can move into production after its mutually agreed upon.

Artists who go thru recording studios are not guaranteed a hit song or album.  But the chances of going thru a solid recording studio with a reputable producer and creating an album will have a higher probability (I would think, not grounded in fact) of being taken seriously by the music business (A&R folks, etc).  The album also is accelerated thru the recording process as there is a lot of time dedication, attention, and focus on shipping the very best album possible.

Bringing this back to entrepreneurship, is Paul Graham or David Cohen the Rick Rubin of the accelerator industry?

It sounds like a hyperbolic and trivial statement, but think about it.

Not all startups need to go thru a accelerator or incubator.  Many artists don’t necessarily go thru a recording studios.  A big reason for this is that the digital tools available today do not necessitate getting together in a professional studio when Ableton Live or Pro Tools can have similar output at a fraction of the cost.  This is also similar in the accelerator space, though while the tools can be had whether or not in an accelerator, the network of people you engage with are most important.

Just something fun to chew on.

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Startup & Venture Capital
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kbs+ Ventures: Creative Entrepreneurship

admin February 6, 2013 4 Comments

Just last week, we launched our first book at kbs+ Ventures.  The book was derived from the insight that our agency‘s staff wanted to learn more about innovation frameworks and what entrepreneurs have to do in order to build a business.  You can download the book here (more formats for the book coming in the near future, follow me on twitter to find out when launched).

Creative Entrepreneurship Books

Last summer, Lara, Eugenia, Taylor and I embarked on the process of creating this book with the support of our agency and MDC Partners.  A few months later, we had a finished product of the book in-hand and were ready to launch it.  We turned the book around in about four weeks.

We decided not to re-create the wheel and write all new content.  Some friends of ours are top venture capitalist and entrepreneurs who already write amazing content online so we asked them to donate some content to our book.  And they did;  some old posts they had written and some brand new content for our book.  A huge fist bump to all the contributors including Blake Masters, Tim O’Reilly, Paul Graham, Jay Jamison, Sarah Lacy, Felix Salmon, Mark Suster, Steve Blank, Marc Averitt, Fred Wilson, Charlie O’Donnell, Chris Dixon, Andrew Chen, Seth Levine, Scott Weiss, Babak Nivi, Matthew Waterman, Dave McClure, Dan Shapiro, Adam Penenberg, Robert Ackerman Jr., Walter Kortschak and Rutul Dave.

We plan to use this book for our Fellows Program.  We also plan on making the book much more widely available – it’s free to you.  We will be distributing the book thru different accelerators, incubators, venture capital offices and other places of entrepreneurship.  Reach out to me if you want to put a bunch in your office or in a place which could reach many entrepreneurs.

Here are some pics of our launch party for the book.  It was a blast.  And here is the writeup on our Tumblog.

We believe this book can have an impact and I’m super proud of the team who made it happen.

 

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Darren Herman, Internet & Web X.0, Startup & Venture Capital, Technology
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Facebook, Attribution and Cookies

admin January 14, 2013 11 Comments

I thought I’d put this out to the community since I would love to engage in conversation around this.

At the agency, we have recently seen significant positive performance on a FBX campaign; performance as measured by an online sale (lets keep it vague).

I have been thinking about this and emailing with a few folks about why we might see such stellar performance.

I think I know the answer but want to run it by all of you, to help me think it through.

Facebook is used by over one billion people.  Many of the users of Facebook keep it open in a browser tab all day but it might not be “in view” most of the time.  However, there are consistently six ads in the right rail, all of which consistently update (and theoretically, drop cookies).   Using Ghostery, I see that DoubleClick has a tag on my Facebook newsfeed as I write this.

Is Facebook the new AOL Instant Messenger or Pop Under where it persistently is refreshing cookies all day long and taking credit for conversions?

Triggit recently ran a study where they converted 36% more re-targeted users than Google Display Network, Rubicon, Admeld or Pubmatic.  Is this because they have 36% more reach (I’m not sure if they do, I’m not logged into comScore at the moment).

In a world that is using last view/click attribution, then this could be a real issue for measurement.  If you are using a more advanced attribution method thru VisualIQ, Adometry or Encore Metrics (amongst others), hopefully it get teased out.

Just thinking out loud- lets discuss.  Leave a comment or email me thru the contact form.

 

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Advertising & Marketing, Internet & Web X.0
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