Category Archives: Internet & Web X.0

The Personal CTO

I think society is trained to equate CTO (Chief Technology Officer) with the formal corporation.  In many corporations, CTO’s are certainly needed and they play a vital role.

In your personal life (outside the office), who is your CTO?   In many cases, the CTO is yourself or a trusted friend.   Choosing technology is almost a self service ritual around research on sites like cnet, gdgt, google, tekzilla, and others to help you make decisions.  The amount of time you have to research your technology challenge determines what sources you use and the quantity of them.

But what if you didn’t want to use self-service to find technology recommendations/answers?  Can you call Ghostbusters, err, a personal CTO to help you make decisions?  As personal technology expenditures rise, I’d imagine that people would invest more time (and money) into the decision making process.

If we could all set the bar like Apple

If you follow the tech space or watch the evening news, you will have heard/read that Apple is charging initial iPad advertisers millions of dollars to be the first marketers on their devices as part of the iAd product rollout.

Journalists (inclusive of bloggers) initially highlighted the price tag in most of their rants as very high. Yes, it is high (keep out the riff raff) but what is of importance here is nor the price rag but something very different.

Apple is all about controlling the experience for the end user. This sometimes doesn’t make them friends amongst the developer community but ultimately satisfies consumers (just look at their stock price). Apples foray into advertising has started with the Quattro acquisition and they are methodically working towards rolling out an experience for their users that creates a mutually beneficially relationship between Madison Ave and consumers.

What is most important to me about this rollout is that apple can set the bar so damn high for the initial advertisers and get away with it. There are virtually no other brands out in the world that can set this bar: upfront millions of dollars, Apple designs/develops ads (with minimum agency interaction), and no guarantee of launch date. When I had my in-game advertising company and we were doing huge integrations into top titles from the likes of EA and Activision, if we demanded these types of terms, Madison Ave would have laughed at us.

Apple has all the leverage in the world here. Creative departments and agencies have grown up on Macs, Apples stock is soaring, and Steve Jobs is the man Madison Ave wants to be; all of this works in the favor of Apple’s roll out for iAd.

The iAd roll out needs to be and will be treated like the guest list and dress code of the latest club opening in Downtown LA. Partners will be handpicked with stringent rules in order to set the bar for future marketing partners. Who and how Apple lets people in will influence the future success of the program.

Oh by the way: there are other ways to advertise on “iPad content” without having to pay these huge initial fees. While they aren’t iAd certified, they may deliver a similar or even beyond experience:
1. Sponsor an iPad app
2. Purchase ads on websites that have high viewership by iPad readers
3. Create your own iPad app
4. Buy standardized ads within apps

Thoughts on finance, marketing, and infography

Thoughts from 30000 feet on way to Mexico with Sherri. Not: these are totally random streams of thought.

…on finance
Millennials have terrible credit. Imagine if they actually paid for content, they would be even more in-debt

Non-financially minded oriented entrepreneurs lack the knowledge to decipher between gross/net revenue. Lots of companies we hear about today may have sweet top line numbers but net numbers and even operating margins are slivers.

…on marketing
Lots of chatter about giving consumers the ability to choose everything. Time and time again, consumers don’t want to be forced with telling us what they want, but would rather be inspired and select from a curated list. Case and point: apps in the iTunes store outsell their peers if try are on the recommended list, custom shirt companies who publish a few customized examples know that those examples will sell well as templates, and any retail clothing store has representatives helping shoppers shop…

…on data and infography
If business is shifting to a data driven ecosystem, the emphasis on visualization of the data in quick, actionable, and colorful ways will ultimately win. Most business folks, let alone consumers, are not SPSS nuts or Omniture junkies. Infographics are going to be key… Which leads to a potentially lucrative future career: infography design

Fantasy sports is one of the most data-driven applications for consumers in the world. I’d venture to guess that the amount of phd’s and mathematicians playing are <10%. The reason why fantasy sports have taken off is because of the visualization of realtime data. The visualizations are not complicated but are utility driven.

…on haters
Facebook and Twitter are quickly becoming very powerful companies and Google’s perch at the top may get a bit charger to accommodate these guys. Facebook and Twitter, while darlings today, will have to start to manage for mass criticism. It’s a good problem to face as it means you are on top (walmart, ford, Nike, gap) but a pain to deal with. The larger you grow, the larger the ‘hater’ volume and sentiment.

The Marketplace Appreciates Obfuscation in Pricing

OpenPricingPricing is defined as the property of having material worth. Pricing though does not dictate individual value, but rather the value of a good for the average.  Let me illustrate by an example:

Sherri walks into CVS to purchase some shampoo for the Herman household.  She sees Pantene for $6.45/bottle or Sunsilk for $9.99/bottle (totally made up numbers).  Sherri has a specific price in mind she wants to pay for Shampoo based on her proprietary valuation system (special needs, bottle shape, accessibility, etc) and based on this specific value, she is able to decide between Pantene and Sunsilk.

Pantene and Sunsilk are offering (pricing) their products at these price levels because they have done a comprehensive supply/demand curve and have optimized where they should price their product for the optimal (not always most) amount of buyers.  This is done through market and competitive research as well, as, historical sales scenario planning data.

In this scenario, the marketplace appreciates pricing obfuscation:  it’s simple for the consumer and it’s simple for the business.  The consumer never sees the profit margins (unless they are purchasing from a public company and even then, how many consumers read financial reports) and the business never knows how much the consumer was really willing to pay (potentially more).  There is not really a tension here – if a product’s price is not adequate for a consumer, they will move onto the next product on their list.

It’s simple.

For the media/advertising world, things are changing.  A once very opaque industry is changing.  Agencies and brands are becoming much more quantitative and are understanding how to value inventory for the first time (I took liberty for “first time”).  Most publishers do not appreciate this – and the obfuscation/opaqueness that once existed that provided healthy margins is dissipating.

Let me reprhase the last sentence:

Most publishers do not appreciate this in the short-term.  Historical obfuscation of pricing/valuation has lead to healthy margins that have existed for years (why do we have 3 Martini lunches? Why are media teams making custom nike sneakers with reps?) for the sell side.  The long-term opportunity is tremendous, if the sell side could get over the initial short-term shock.

Some say that the bigger they are, the harder they fall.  The problem with this is that the major media companies such as Conde Nast (Advance Publications), Hearst Corp, and Tribune are all very large private companies and are potentially going to fall very, very hard.  Note:  I’m not saying that they cannot get back up again… They can.  But they are going to have to fall first.

If/when major media buyers (marketers, agencies grouped together) have the ability to buy on value, not price en mass, this will be a major market shift.  Some of us are here today but when even more of us are here tomorrow, the sell side will become much more comfortable as more dollars move into the industry to satiate cash flow statements.

Since however the market appreciates obfuscation in pricing (it’s just plain simple!) we may never get to this efficient place, but it would help the actual buyers and sellers reap much longer term benefit that short-term margins.

Please comment below to continue the conversation or tweet @dherman76 with replies

iPad Review: thumbs, screen, interface

iPad I’m probably a few weeks late for this review but thought I’d toss one out into cyberspace anyway.  Let me start out by saying that I absolutely love the vision of Apple and this product has the potential to create a new usage occasion.

To keep it short and brief, here are my thoughts:

Dislikes:  the typing experience.  I think the keyboard on the iPhone is much easier to use then the iPad in terms of spatial portions.  When in portrait mode or even landscape, it just doesn’t feel right when you type.  Not a fan.  Additionally, I think I should have waited until either the 3G version hits the stores or until there is ubiquitous wifi.   The iPad works perfectly in the office (b/c of wifi) but once I take it outside, the functionality becomes limited.

Example:  I have been bringing the iPad onto the train in the morning and evenings during my commute and have been catching up on RSS Feeds.  I haven’t done this in over a year!  While I am excited that I can read the feeds in transit on a great screen, I cannot comment on them nor read anyone else’s comments.  The lack of connectivity gives this iPad more of an iPod Touch feel.

Likes:  ability to take the web with me wherever I want without the hassle of having a laptop.  I’m thinking that if this had a better typing experience, this would be the ideal travel computer for airplanes.  If you do not have a Netbook and are trying to use a full size laptop on airplanes these days, it’s tough because of limited space.  The iPad is a perfect solve for that… but typing again, is a pain.

Overall, I love the experience and the product.  I think the 3G version probably is a better product due to mobility outside of Wifi zones for the person who wants to stay connected.

New Piece of Art in the Herman Household

As many of you know, I went down to SXSW this year to check out the Interactive sessions and while walking through the exhibit hall, I saw that one of my favorite artists, Hugh Macleod of Gapingvoid fame had a booth and was selling some of his original art.  I’ve been a fan of his art for years and have always thought about owning some for the home office.  Well, now I do.

Below is the original that I acquired:

Why I selected this piece over others was because I think it’s really relevant to me.  While I’m not on the Venture Capital or large Angel side of the business (i.e. the guy on the left – in red), I have been known to start and fund companies and always love figuring out a business model.   This piece gives me a chuckle each time I read it and it’s relevant to the first and second dot com bubble I’ve lived through.

I also feel right now, this is very relevant to many of the companies being funded.

To RTB or Not RTB, That is the Question

This is an unbaked opinion piece.  Please comment to keep the conversation going as this will certainly provoke some commentary.

I’ve been participating in many conversations (conferences, panels, articles, journals, meetings, etc) about Real Time Bidding and it’s potential affect on digital media.  There are very few true real-time-bidding inventory sources today and only a few Real-Time Ad Platforms (i.e. AdNexus).    Without revealing too much information from our day to day in the office, we see that less than 25% of our inventory is coming through Real-Time Bidding.  According to conversations with our peers, this is fairly consistent with the industry.

The big question is not whether RTB is coming (or here), but rather if you (as a marketer) need to harness it.

Demand side platforms (DSP) build/buy/partner with RTB-enabled platforms
If the big agency holding companies have their way (note: I’m part of MDC Partners), then the majority of standardized display will be running through these platforms.  If these platforms and capabilities are RTB enabled and the processes and procedures are in place to run in Real-Time, then there can be a very large demand (liquidity) for RTB enabled inventory.  This means that the Supply Side Platforms need to on-board enough inventory to be sold in Real-Time.  I include data (& audience) within the “inventory” label.  1st, 2nd, and 3rd party data (& audience) needs to be RTB enabled as well.

You need both the Demand Side and Supply Side to be real-time enabled to make this happen.

This theoretically seems easy, but how many “big-name” publishers are real-time-transaction enabled?  The majority of RTB inventory is long-tail today… and this needs to change to really attract the significant dollars to this space.  The Supply Side will either aggregate at large exchanges or use Supply Side technology to make this happen.

If you do not buy in real-time, can you exist in the future? Simple:  yes.

I know people in the marketing space (including myself) are trying to draw parallels to the financial markets and I’ll continue to do so here.  There are many financial brokerages that have access to transact very quickly and they do.  But other brokerages and buyers are able to transact (with significant dollars) in near-real-time (or less than near-real-time) and still be in solid financial positions and the ability to move markets.

Speed does not guarantee success in markets: finance or marketing.  The art of orchestrating the sciences is where the men are going to be separated from the boys. You can give me access to AdNexus tomorrow morning and just because it’s fully RTB enabled, does not mean I’ll be any better than buying site direct or thru a non-RTB network.

Unless the algorithms and the “view” of real-time inventory is exactly the same, no two RTB platforms will perform exactly the same.

Have I convinced you that you do not need real-time bidding to be successful today?

Now the contrary:  The faster an RTB platform can operate (in milliseconds today), the more inventory it has access to.  This is a big deal.  If you are building models to predict the future, then you want to see as many impressions as possible to have access to pick from.  Some say buying clout does not matter but does it?  A question to ponder.

The net/net:  RTB is a buzz word today and many people are talking about this space.  I believe that where there is smoke there is fire, thus, there is something to take note about RTB.  With the opportunity to value individual impressions and data with the ability to go the last mile and action it, potentially ahead of competitors, RTB does have an edge to those who can use it.

I believe that the long term winners in this category will not be the scientists, but rather the artists who know how to apply the processes, procedures, and strategies for their clients.

Please comment to keep the conversation flowing.  Would love to hear your perspective.

New White Paper: Getting Real

Some of my friends over at DeSilva+Phillips a boutique investment bank (also known as MediaBankers) have just released a white paper (links to the PDF) entitled Getting Real.  I am always skeptical about investment bank led white papers (unless they are presentations by Mary Meeker which I love) but these guys pulled off a pretty solid document.

The goal of the paper was to talk about the marketplace of ad exchanges, RTB (real time bidding), and the future of online advertising.  I would say that the paper does a good job of setting up the history and current ecosystem that surrounds ad exchanges but lacks anything tangible about the future of online advertising other than saying that many media channels will become digital so a digital infrastructure today is required to service them, which I’m a big proponent of.

There is about $430MM invested in this ecosystem over the past 3 years which has attracted lots of attention from the press, marketing services companies, and of course, investors.  Figuring a venture capital fund wants to see some sort of liquidity within a funds lifespan (~10 years), the next 5-7 years are going to potentially be very “acquisitive.”  Thus probably the impetus for DeSilva+Phillips to release this document to establish themselves as leaders in this space.

Some of the main highlights of the paper:

  • A nice breakdown of what “ad exchanges” actually are including the great Online Advertising Ecosystem graphic from Matthew S. Goldstein that has been circling around some inner circles.
  • Discussions around Right Media’s decision to focus only on premium inventory
  • A solid definition around DSPs without over-hyping them
  • Accenture, which is not normally considered a player in this space is potentially moving in and could open up a new business within the space (has AdChemy partnership, owns a search bid management platform)
  • “Real-Time Bidding is the glue for melding display-ad marketing and search marketing”
  • Talk about SSP (supply-side platforms)
  • Yahoo vs. Google and the ultimate threat of Google (it is scary)
  • Neutrality around ad exchanges and how it’s not a long or even mid-term option (though I’d argue that is what this industry needs)
  • Adding two more acronyms to the vocabulary:  DBO (Dynamic Media Buying Optimization) and ARM (Audience Relationship Management)

You can download the paper here.

ResumeGal Deal Hunt at SXSWi powered by Stickybits

For those who are unfamiliar, my wife runs the website, ResumeGal.com.  ResumeGal was created when she left the corporate HR world and decided to stay home to take care of our child and wanted to still consult with people who needed resume/HR help and coaching.

I’m trying an experiment down here in Austin to post 5 Stickybits around the SXSW convention center to:

  1. Check out how many people actually scan these stickers
  2. How many people scan vs. how many people contact ResumeGal
  3. Conversion rates

We’ll be giving away 20-40% off any package on ResumeGal.com if you use the secret word/phrase located on the Stickybits.

Happy hunting!

P.S. and by “powered by stickybits,” we mean that it’s using their sticker technology, they are not publicly endorsing this to my knowledge (but are more than welcome!)