Many of you know that I’m a huge Muppet’s fan.  I find this video extremely intelligent and hilarious.

I’ve been thinking about bloggers, blogging, memes, and this entire ecosystem from a macro-POV over the past few days. What caused me to think about it… I’m not sure, but nonetheless, I’m down the path and wanted to throw a few ideas out there.

In early 00s, I spent enough time in the music industry to understand the problems that we hear about everyday. Essentially, the music industry for the most part, relies on the ‘hit’ model, which means that a small portion of their artist roster generates enough revenue to cover the entire roster. (You can also draw a parallel to venture capital, publishing, and other industries)

Because the few chosen artists (signed to major labels) are promoted in such a way that exaggerates their excessive lifestyle, many, many artists (bands) want to be signed to a ‘major’ label because they believe that the clout, promotion, advances, and contacts that the label has within the market will help them to become rock’n’roll hall of fame inductees. Generally, this doesn’t happen. Even signed to a major label doesn’t guarantee you success, it even doesn’t guarantee that they will release your upcoming album.

Musicians use instruments in their craft. These instruments are pretty much worthless without someone playing them. A Fender guitar is nothing but a few strings, some solid wood, and a few screws/glue/etc holding it together. It’s the artist behind the instrument who brings value to the instrument.

In the blogosphere, the platform is the instrument. Whether you have chosen to use TypePad, WordPress, Blogger, Tumblr, or any other blogging platform, it’s worthless without someone (or multiple people) behind it producing content. The content producer is the artist (or musician in this instance).  There are a handful of blogs that generate 80% of the buzz (TechCrunch, ReadWriteWeb, Ars Technica, Silicon Alley Insider, VentureBeat, Gizmodo, Engadget, paidContent, Between the Lines, GigaOM, A VC, The Social, TechDirt, etc) but there are millions of blogs who exist as well…

Using the blog/music analogy, the 20% of the blogosphere that generates 80% of the revenue are the blogs signed to major labels. What are these major labels in relationship to the blogosphere? Examples are Federated Media, UTA, WMA, and any other high profile blog representation services. Google Adsense and advertising networks are generating revenue for blogs of all shapes and sizes (majority of the long-tail) and I attribute this to the similarities of CDBaby/Amazon and other online merchandise retailers for the music industry however they are doing it in a passive way.

The music industry has the radio, which helped create hits across the globe. Whether you were a one hit wonder like Marcy Playground (I loved those guys) or a multiple-platinum seller like Coldplay, the radio certainly helped bring their music to the masses. In the blogosphere, you’ve got major influencing sites like TechMeme, TechCrunch, and BoingBoing (amongst others) who help drive traffic that potentially create an opportunity for your blog to transition into the pro-blogging space.

We all live the dream, some to play at MSG in front of 15,000 screaming fans, or a direct link to one of my postings from Robert Scoble, but it’s almost impossible to attain.

Thinking about the business model for bands, you’ve got a few ways to monetize yourself: sell music, sell merchandise, sell concert tickets (play shows), take donations, etc.  The business model for blogs are pay-for-access, advertising, merchandise (maybe this is a way of the future?), or a loss-leader, like this blog is.  I don’t make a dime off of it, but it opens the door to conversations that I’d not normally have.

With so many musicians and bloggers, it’s impossible to follow them all. Look at the amount of music discovery services that have emerged.  Blogging discovering on the way?  Are VC dollars flowing in that direction?  Are micro-blogs like Tumblr essentially “singles”?

Would love to hear your thoughts…

Here’s a starting question:

1.  Who will be the RCRD LBL of the blogosphere

I’m a big fan of Springwise, Iconoculture, and other trend watching/forecasters. While each of these sites are the opinion of the person writing, they recognize interesting things happening in the world that at a minimum, are interesting.

In my inbox on Monday Morning, Trendwatching sent it’s Special Edition: “Innovation Avalanche” 41 global business ideas begging to be copied. To an entrepreneur, the subject heading sounded intriguing so I opened it up and read all of the trends. While I don’t think I’ll be copying them, I did find a few that peeked my general interest:

1. Crowd clout meets eco-persuasion: Use the crowd to affect social change. Very interesting by the way CarrotMob has setup their organization. Carrotmob organizes consumers to make purchases that give financial rewards to those companies who agree to make environmentally friendly choices. You can watch a video of CarrotMob here.
2. SeatGuru for Hotel Rooms: I use SeatGuru before I fly, and TripAdvisor before I travel. Hotel rooms generally have a method for their numbering scheme and if you can understand what the numbers mean, you can potentially book a better room. Where this breaks apart is whenever I travel, I’m given my room assignment as I’m checking in.
3. Celeb4aDay: Ever wanted to be a celebrity? Check this company out.

Why did these 3 companies make the “Innovation Avalance” list? They represent hot areas of today’s cultural environment: green/social change, transparency, and celebs/fame.

Anyone like any of the other ideas?

I’ve got a Tumblr page setup for micro-blogging… quotes, thoughts, pictures, videos that I find fascinating… generally, they compliment this blog well. Sometimes, they are totally random.

Feel free to check it out. For those of you who are RSS buffs, there is a separate feed for the Tumblr page.

I haven’t blogged about Google’s new Ad Planner so thought that I’d start my week talking about it and sharing a sexy and hot observation I made totally randomly.

What is the purpose of Ad Planner? Media Planners spend quite a bit of time trying to figure out where their brands or clients’ audiences are so that the brand can buy media to reach them. For digital media, many agencies use either Comscore or @Plan; both aren’t perfect, but they certainly help us organize thousands of potential sites for media planning.

Google is entering the world of Ad Planning. Why? I suspect it’s because they make it easy for anyone to purchase media on any site as they come into the Google Network. If you’re on the Google Network as a publisher, then ad dollars should follow as buying media for the small tire shop in Boise or a Fortune 100 brand can now reach you for display based online media.

I took a spin around the interface tonight and looked for Males, Ages 35-44, $150k+ in HHI, and have a Graduate Degree. It’s very intuitive, no frills - and gives a nice site list. If you use DoubleClick’s MediaVisor, you can export this and can finish planning in your preferred tool.

A funny thing happened however as I dug deeper. If you look closely at which sites come up first, you’ll see that the #1 site for this search is BDJGirls, an escort service. I’m all for beautiful women (and there are some on their site), but I don’t think I’m going to be spending my brand’s money on an escort service’s website. After reviewing their site, they don’t even accept advertising.

To add a bit of humor to this, BDJGirls is listed in the Weddings category. Does this mean that these males are looking for dates to weddings?

Maybe Ad Planner needs some refinement?  What’s evident however is that DoubleClick is very important to Google’s future strategy.

Strange thing happened… I was reading the Wall Street Journal during my commute this morning and there was a music article (and recommendation) so I went to find out a lot more about the artist (Girl Talk) as the technology behind the music sounded interesting to me.  Who knew that the business centric WSJ was going to look in-depth at music sampling?

Anyway, I went to check out Girl Talk’s website and it’s pointed to a MySpace page where you can click a link to buy the album.  Following the similar format of Radiohead’s latest release, you can pay whatever you’d like for the album.  I chose to put in $0.00 and on the next screen, the band asks why I was not inclined to pay but they still allowed me to download the album.  Screen shot below… though this was very interesting.

The data they get from this is invaluable.  I’d love to see the breakdown of what people say.

Something really fascinating happened today.

We brought together Madison Avenue and Silicon Alley/Valley at our first annual The Media Kitchen Digital Media Venture Capital Conference (say that 4 times fast). Having spent the better part of my life building digital media startups, I noticed that there was a huge divide between what is happening in the garages and what’s happening in the plush offices of Madison Ave (Varick Street). Since Madison Ave relies on these emerging digital media companies and vice versa, I thought it would be extremely beneficial to bring various constituents together with dozens of brands (clients), press, agency folks, and funds/portfolio companies to sit through a bunch of inspiring presentations and collaborate with each other.

It all started at 8AM at the Tribeca Grand in New York, Union Square Ventures, DFJ Gotham, and First Round Capital spoke about their views on the digital media landscape and where they see it going. There were some extremely insightful comments and inspiring moments… Albert Wenger, partner of venture firm Union Square Ventures was talking about generational shifts and broke them down to, “people who dated before they had their first computer and those who had first computer before starting to date.”

After each venture firm spoke, there were two portfolio companies who presented. USV portfolio companies included Tumblr and Outside.in. DFJ Gotham portfolio companies included Izea and ContextWeb. First Round Capital companies included AppNexus and Pinch Media. Conversations and presentations centered around micropublishing platforms to Internet “plumbing” and social media platforms to iPhone analytics. Hearing from the CEOs/Founders of these companies added a touch of validation and inspiration.

Some great audience questions were asked at the end of the conference and there is one I’d like to highlight: one of the group directors at The Media Kitchen asked all of the presenters if there were any digital media companies who were trying to build sustainable businesses (or were doing real revenue) instead of trying to be acquired. I thought this was very interesting. When we hear of Silicon Valley and Alley based startups, we all wonder what the “exit” will be for that particular company. With close to $10BLN in M&A deals in 2007, we’ve come to expect quick acquisitions… but doesn’t building sustainable companies count anymore?

Lots more thoughts to come from this conference… look for articles/postings across the Internet as people start to blog about the event. Here is a recent posting by Allen Stern over at Center Networks about the videos of the event.

Advertising is going through a significant innovation period right now and it’s fascinating to take part in it. Online advertising (strictly online) was established and tested in the 90s and now has billions of dollars being spent. Brands are spending increasing amounts of money to engage with their audiences in the digital world.

The Internet is really the first medium that is enabled by technology, potential for mass reach, and the ability for anyone to aggregate audiences (niche or mass). Television, print, radio, and OOH (out of home) all have significant barriers to entry in terms of both human and capital resource. Because of the lower barriers to entry and the adoption of billions of people worldwide, the Internet has become one of the most fertile feeding grounds for technology geeks and media mavens to innovate within and to make a difference in a short amount of time.

With all of the properties that exist online (web only or hybrid), a common theme for many of them has been monetization by advertising revenue. Over the past decade, companies like Poindexter, Atlas, Overture, DoubleClick, Google, Burst, Sonar, Tribal Fusion, and a whole slew of others have helped brands reach their audiences either through technology or advertising sales (enabled by technology).

Up until very recent years (and in many cases, even today), when you advertise online, you are reaching the audience of a particular website. For instance, if you are advertising on FerrariChat.com, you are going to reach the affluent crowd that visits that particular site. To put this in context, you would advertise (place your media) on sites/properties that have a high composition of your target audience. If a sites composition is 92% (of your audience), it means that for every $10,000 of media dollars spent, you are wasting $800.

Of course, we all like to create efficiencies and limit our wastage. Advertising technologies are in a high-growth phase where audience data is becoming highly sought after and important. Most brands and companies have tons of audience data but generally, it’s always existed in many different silos (divisions of companies) or the technical (or operational) infrastructure was never in place to crunch the data. Now that entrepreneurial visions and technical infrastructure are on the same wavelength, advertising is becoming increasingly technical.

Lets throw away our old models of buying mass audiences.

Lets look at new models of buying single people and I’m sure you see the benefits of this. This isn’t revolutionary but it’s becoming mainstream. Some smart people have been thinking about this for quite some time but there are finally enough media dollars behind this to move everything forward and validation is occuring.

Separate audiences from the page and on top of that, fragment the audiences into singular conversations (impressions).

In order to buy single targeted impressions, you must have data on the impression. Data is key. Dare I say, data is the new king (content)? If you have data and aren’t afraid to roll up your sleeves and analyze it, you can do some really interesting things today. Just having data however does not mean a thing…. quantitative analysis and modeling abilities will allow everyone from agencies to technology companies create unique audience segments and add color to single impressions.

Whether your a venture capitalist looking for your next investment, a media planner/strategist looking to figure out where to spend your ad dollars, or a brand manager looking to grow your P&L, there are no shortage of companies emerging (or have emerged recently) that could provide this data. Just look at the behavioral targeting networks that emerged such as Tacoda, Revenue Science, and Specific Media. Not only do these networks allow you to target based on behavior, but they provide added value in the sense that they show you who your audience really is by analyzing the data they have on the audiences who react to your brand messaging. This data is turned into reports that are given during and after the campaign has run for your brand. Of course, this is very interesting.

Look at Lotame, 33Across, Datran, Media6 and others that have quite a bit of data about users that can be leveraged for reaching audience segments. Matching an impression with a chunk of relevant data can be extremely interesting.

Who will win the near/mid-term advertising game?

This is a very interesting question. I think that there are quite a few players in the market who have quite a bit of data and also have an ad-sales team. Many times, these companies keep the garden walls “up” with this data and you can only receive minor parts of it through your ad buys. I think there are ways to monetize that data individually aside (but maybe not mutually exclusive) from having to buy media. I’d like to see companies leverage all of their data together to make impressions more valuable, whether they are bought from the respective company or a 3rd party.

Where does this play out? In the exchanges, networks, and sometimes, site buys.

Food for thought: While most of this conversation was centered around the Online Advertising world… it’s safe to assume that this will take place for all media channels in the next few years. As we’re one power outlet away from being a fully digital society, we’re going to be able to buy single impressions across television, radio, print, OOH, etc. Data will make this infinintly more valuable. Get excited… I know I am.

Yesterday, we had a fantastic Fathers Day as we went to the Scarsdale Concours in the morning and up to the lakehouse in the afternoon.  I’ve added 2 pictures from the day to this blog post but to see more from the Concours, check here.

For a short while, I had a tab up at the top of this blog labeled “Ramblings.” This tab was for a Tumblr page of mine which I had neglected to update… until recently. It’s officially back but until we figure out how to fit it into the design of the blog, it’ll be accessible from the “My Favorites” area or by going to http://dherman.tumblr.com directly.

I like to use the Ramblings area for qoutes/pictures or other interesting things I find… generally, they are much shorter and w/o analysis… which is what the front page of this blog is for.

You can officially access Ramblings here.

Rock’n'roll.