Category Archives: Internet & Web X.0

Alto Email, The Open Graph, MBA Mondays, and Las Vegas CES

Happy Wednesday.  I thought I’d write another post that points to discussions or products that I’ve been part of recently.   Leave some comments below or reach out directly if you’d like to talk further about any of these.

It’s amazing how much an interface can make or break a product, go Alto!.   In early October, I heard AOL was launching Alto, it’s upgraded mail platform.  I signed up for the limited release and was granted access to the system late last night.  I am impressed so far.  I like the interface a lot.  It’s amazing to see how much of a difference the interface can make.  Font selection, user flow and the overall idea of classifying emails is fairly smart and spot on.   I do not use Sparrow so do not have a point of comparison, but it seems to me like accessing Alto over Gmail (even though Alto is a layer on top of Gmail for me) is the way to go.  What do you think?

The big question for Google, especially if users start accessing Alto as the portal to their Gmail is at what point do they disallow this?  Gmail is a revenue driver for Google in relation to AdWords (ads on the sides and above your emails) and Alto basically gets rid of these.  Will AOL roll out an ads product in Alto?

Get Your MBA On, Advertising Models.  Fred Wilson, a friend, venture capitalist and AVC blogger wrote his latest MBA Mondays post on Advertising Revenue Models.  Being that he and I both know that this is in my wheelhouse, I helped write the piece and linked it back to a presentation I gave in 2011 to the NYC TechStars class (I mentor).  The post was not specifically used to quantify or justify advertising but rather expose the different models within advertising revenue.   I think the post is fairly comprehensive and is a good primer for anyone considering taking advertising dollars.  I’m more than happy to talk more about it which is why I created the short-lived but very specific Marketing Wednesday series.

Fb Open Graph Innovation.   At kbs+ Ventures, we see lots of companies who are innovating around advertising and marketing technology.  This is our core area of the marketplace we invest in and one we’ve considerably doubled down on over time.  An area that we see companies spending lots of time thinking about is the Facebook Open Graph.  FbOG is an underutilized asset/utility for brands and there is a ton of room for brands to engage with it.  We are sniffing around this space to understand the forthcoming players in the FbOG space so if you are someone, know someone or are just genuinely excited about the FbOG, leave a comment and we’ll hook up.

2013 Consumer Electronics Show.  I’ll be heading out to Las Vegas for 2013 CES.  I’ll be there for meetings on Monday/Tuesday so if you’re heading out and want to meet up, certainly reach out and we’ll try to coordinate some time to meet up.  I’m specifically looking to meet entrepreneurs or other folks innovating in/around marketing and advertising technology which actually had solid representation at last year’s (2012) CES.

 

Multi-Platform Measurement, Social Referrals, Frothy Times, and Too Much Supply

Back when I was blogging more often, I used to write posts that provided perspective on other industry conversations around the web.  I did this fairly frequently in the 2000s but have stepped back a bit over the past couple of years mostly because Ive been balancing the family and work  and blogging has been the one activity that I’ve forgotten.  I do miss it.  And I will try to be better at it but Ive said that for the past few years.

Anyway, there are a couple of posts that I’d like to react to or at least point you in the direction of.

Multi-Platform Measurement:  comScore announced a new product in which allows us to measure the audience of desktop and mobile (right now, only in the US).  It’s called Media Metrix Multi Platform.  Fred Wilson, a venture capitalist over at Union Square Ventures points out some insights:

There’s a bunch of interesting stuff in there. Take Google. They have 189mm users in the US on desktop/web. They also have 109mm users in the US on iOS and Android. But the unduplicated total audience is 211mm, meaning only 22mm of Google’s users are mobile only in the US.  Pandora and Twitter stand out as highly mobile user bases. Pandora’s mobile user base is >2x their desktop/web user base. Twitter’s mobile user base is almost equal to their desktop/web user base.

I’m not shocked at all about the Pandora and Twitter data.  As a user of both services, I notice my usage is higher via mobile.

It’s Basic Math That’s Killing Display@jhlava over at Varick Media Management (I co-founded in 2008) posted a piece on AdWeek that looks at a top down approach of supply and demand of display inventory, specifically that of RTB.  He puts together an argument that shows how much money there is in RTB/display and how much supply there is and makes that case that there is not enough dollars today to increase the overall CPM’s of inventory.  The imbalance of supply/demand is hurting the industry overall.

He’s pointing out a 101-issue that is the big elephant in the room.  It’s a big issue.  We’ve never witnessed a medium such as the web which has provided us with infinite supply.  You cannot do that on TV, radio, print, etc without significantly hurting both the user experience and business margins.  But on the web, another banner or video play has marginal cost so creating supply is not an issue.

The creation of supply has led to problems for a few constituents.  The entire Lumascape is affected.  The investors on the Lumascape are affected (me too).  Marketers are affected (so many decisions).  Pretty much all sides of the table are affected.

I have no doubt that over time, more money is going to flow into RTB.  It’s growing.  Adweek posted that over the holiday weekend, RTB prices jumped.  Dollars will come into the space but we need to figure out what we’re doing with inventory.  We just cannot keep creating infinite supply as it’s going to hurt the entire web.

RIP Frothy Times:  There’s a meme going around now about the shakeout of early stage companies and the Series A crunch.  Well known folks have argued both sides of the table on this.  I might as well add my two cents.  The next 24 months are going to shake out many of the companies in the ad & marketing technology space.  I’ve predicted this before and I’ll say it again, getting from $1-10MM in revenue is the easy part but we just don’t see many $10MM+ companies.  Note I said revenue and not billings.  The ad tech space likes to inflate their numbers and talk about revenue but realistically, most of the time is media billings.  The companies with out core differentiated tech will fizzle out and we just don’t need fifty mobile DSP’s or undifferentiated DMP’s (who are now selling media, too).

Social Referrals:  I was reading Jason Goldberg’s blog, founder of Fab.com and he has a post up that talks about the referrals to Fab.com.  For the record, I absolutely love how open he is about their business.  Black Friday to Cyber Monday traffic on Fab.com was 25% social driven.  65% of the social traffic came from Facebook, 20% Pinterest, 5% Twitter and 1% Coolhunting (there are more, click to the post to read it).  That’s pretty powerful.  Jason also states that about 20% of Fab’s revenue from this period came from users who originally joined Fab via Facebook.

Lots of good stuff happening in the industry.  I’m excited to be part of it.  Happy Holidays!

Cookies, The President, and Ad Tech

There is lots of chatter in the government and the digital advertising industry around privacy and cookies.  You can do a simple Google search and get all the details about self regulation vs. government reform.  I even created a Slideshare document on this back in October 2010.

I wanted to write this post to document something:  if the government steps in to intervene in the privacy and cookie war in the digital advertising industry, lets look at what President Obama used to help win his re-election.

Obama has at least 30 providers of marketing & advertising technology working for him.  Romney as of 12:19PM ET today (11/7/12) has 18 trackers.  This Obama screengrab was taken at 11:55pm ET last night on his official homepage.  Ghostery provided the insight on the right of the screenshot and we can see many cookie-enabled technologies.

Next time you hear about the government coming down hard on cookies & privacy, remember this post.

(This post is not supposed to be a political ding in favor of one party over the other.  I’m one of the least vocally political people in the USA.  It is supposed to provide insight into cookie use for political candidates, in this case, the President Obama.)

 

What does $GOOG’s driverless car and marketing have in common?

I’ve been thinking about the Google Driverless Car.  Why in the world would Google create a driverless car?  I know Google maintains the 80/20% policy of creating new projects in the 20% of time but this automotive project is a bit of an anomaly when compared to Google’s other 20% projects that have gone on to become legit businesses for them.

For those not familiar with the Google Driverless Car you can check out the wikipedia page here.

Caveat:  I’ve not been in the Google Driverless Car nor have seen one in person or even spoken to anyone on the Google Driverless team; so anything I type here is purely speculation.

My hypothesis:  I believe the Google Driverless Car, or the driverless system that they eventually will license out to automotive makers will help close the loop from online to offline (and vice versa) marketing.

I speculate that whomever is sitting into the driver seat of the car has to log-into the navigation system.  Since they need to authorize, they will use their Google credentials.  Since Google has a single privacy policy and all data across its various services are stored in one platform, the Google car and/or navigational system will recognize the Google cookies and search history and match up any parking lots you might park at with cookies you’ve been exposed to.

Example:  I’m on Google.com (while on my Macbook Air or iPhone) and search for a Thomas the Tank Engine for my son.  It brings me to a host of search results and I select a page on Walmart.  I do not order the Thomas the Tank Engine online but during my errand run thru Westchester County, NY, I stop into Walmart to pick up a few things.  Since I am in a Google Driverless Car (or using a licensed navigation system), Google will know I parked in the Walmart parking lot.  This new dimension of data:  parking lot(s) and driving details will help create a significant barrier for Google (against competitors) but more importantly, will help solidify and protect marketing budgets that are given to Google.

According to the U.S. Department of Transportation, approximately 63.5MM light cars were sold (via retail) from 2000 to 2007 in the USA.  If we double the number to account for additional cars on the road, that’s about 130MM cars on the road.  I do not know if this is low or high, just guestimating.  If Google had 100% marketshare of the navigation and/or driver systems, they’d have a very solid network of knowing what parking lots and stores people were visiting to validate their online searches, display ads, pre-roll video, etc.  100% marketshare is totally unreasonable but even 25% share will allow for a significant sample that can be extrapolated for the population.

My conversations with our marketing clients and visibility into my peers conversations have shown that marketers now more than ever need to show a return on marketing investment:  sometimes via sales, favorability, or whatever metrics are important to their respective organization.  So, marketing partners such as Google need ways to validate that the media spend we invest with them are moving the needle for our clients. Dollars flow to where we can measure.

Google and their driverless car is a very powerful value proposition to measure offline marketing impact.

Google is worth over $200B based on the marketing dollars it attracts from clients, so protecting (and growing) that is what Google needs to do.  It’s a media technology company.  The driverless car can help protect (and grow) their current business.

5 Marketing Trends & TASC

It was a big press week today with back to back articles in AdAge and AdWeek, two periodicals I highly respect in the advertising industry.

Meet the Five Big Trends Changing Marketing:  This was an article I wrote for AdAge which is based off of The Media Kitchen‘s Menu (2011, 2012 version), a document we release each year that talks about five trends and associated companies that are poised to grow with this trend.

Below are the five trends I highlight and if you want to read the whole article, click here.

  1. Communication across many social platforms will be seamless
  2. Location will play an increasingly important role for targeting
  3. Cross platform plans will be driven by data
  4. Content is marketing and marketing is certainly content
  5. Experiences will be linked across many devices

Technology, Advertising and Startup Council (#TASCNYC):  On Monday, David Berkowitz, Ian Schafer, Mark Silva and I will be hosting the inaugural event for TASC at the Soho House here in New York City.  The goal of the event is for create more of a bond between Madison Avenue and Silicon Valley/Alley through spending time with different startups to help them accelerate themselves.  It’s not a pitch for media budget but rather a business building exercise where we can help these companies position themselves better to work with Madison Avenue.  I’m super excited to be working alongside David, Mark and Ian and look forward to what future events might bring.  You can read much more about #tascnyc here.

 

Stuck In A Rut of Incremental Innovation

I have been in the digital media marketing ecosystem since its inception.  The first documented digital advertising was born as banners and buttons (1996) that lived on webpages.

Ad servers were built to deliver these banners.  Incrementally better ad servers were built to better serve these banners, video, and buttons.

Sites federated together to create ad networks.  Incrementally better ad networks were built around technologies such as contextual, behavioral, semantic, etc.

Boxes on websites were created to house advertisers’ creative.  These lead to banners.  Incrementally better banners were created that yielded rich media units.

Search engine marketing solutions were built to manage and optimize voluminous keyword lists.  Incrementally better SEM platforms now include Facebook buying

Lots of incremental-ism.  Being incrementally better sounds like a rat race.  Or the cold war.  I’m better today.  You’re better tomorrow.  Its a no-win game and becomes all about marketing and salesmanship where it should be about the product and performance.

So where is the 0-1 going to happen in this industry?

Maybe we focus so much on going from 1 to n because that’s easier to do. There’s little doubt that going from 0 to 1 is qualitatively different, and almost always harder, than copying something n times. And even trying to achieve vertical, 0 to 1 progress presents the challenge of exceptionalism; any founder or inventor doing something new must wonder: am I sane? Or am I crazy? (Blake Masters class notes of Peter Thiel CS183)

Its happening.   But it’s not overly obvious to all.

The social marketing space inclusive of content creation is unbelievably sloppy and inefficient right now, but I propose we will see tomorrows DoubleClick-like, Advertising.com-like and Google-like come out of the social landscape.

Why?  Because it’s fundamentally different.

There are no banners or buttons.  The way we’ve acted in the past is not the way we act in the future of this space.

Communication does not scale.  We need to re-think the way we communicate and participate in this space.  The role for earned and owned media becomes just as important as paid media.

The 0-1 innovation is going to come from the social places in ways we cannot imagine today (or some people already are).

 

* Note, I’m not down on paid media buying.  I’m all for it.  I work in it. It’s evolving quickly and there are some fantastic companies participating in the space.  But when looking out across the marketplace, and looking for disruption, this (s0cial) area is ripe.

 

 

 

 

Mobile Display Networks & DSPs

At both The Media Kitchen and Ventures, we’ve been watching the mobile display networks and DSP space evolve.  At The Media Kitchen, we’ve been testing and running with about a dozen mobile display companies and at Ventures, we’ve been talking to many of the mobile DSP’s over the past year or so trying to figure out how the market will evolve.

A buddy of mine, Ryan Griffin of Digitas had a great quote in Crains this week talking about how mobile display networks are unfolding very similar to how web desktop display networks did in the late 90s and early 2000s.

“A year and a half ago, we were at the stage of where we were in desktop [Web advertising] in 1998,” said Ryan Griffin, group director of media and mobile at Digitas. “It’s now feeling like 2004.”

I’ve been following that party line as well as things are very, very similar.

If we look to the early desktop display networks to predict the future of the mobile display folks, we know that there will be plenty of mobile players, some early exits and some mobile display companies remaining strong independent companies (potentially even going public themselves).  It’s played out this way… Quattro, Admob, Greystripe, and others have already been acquired by strategics and there are plenty of independent mobile companies still in the mix including but not limited to Gradient X, SessionM, Fiksu, mdotm, StrikeAd, inMobi, Adelphic, and dozens of others.

Some open questions I have for the ecosystem:

  1. Will desktop based DSP’s or networks merge or acquire (or be acquired by) mobile DSPs or networks?
  2. Will desktop based DSP’s build their own mobile components? Similar to DataXu.
  3. How are current mobile networks and DSP’s tackling the measurement and attribution issue?  The UDID ban has really put a dent into the measurement space so wondering who will tackle this.

#3 above is important.  The reason why it’s so important is because if you are a vendor on a media plan and can measure/track your performance, then it’s much easier to substantiate yourself on a plan and have a higher chance of getting extra media budget.

Areas that I’d stay away from in the mobile media ecosystem:

  1. Rich Media – if we look at desktop display, rich media CPM’s used to be in the $1-3/cpm range but now, we’re down in the $0.20-0.80/cpm range. The CPM’s have fallen dramatically and I expect to see this within mobile.
  2. Network – if the DSPs succeed and mobile inventory flows to exchanges, then networks have a much smaller role in the evolution of his new media marketplace.

Just some thoughts on the mobile media ecosystem.  Would love to hear yours, leave them in the comments.

 

Golden Age of Ad and Marketing Technology

On AdExchanger yesterday, Terrence Kawaja talked about how Ad Tech was going through a potential Golden Age.  There have been some recent acquisitions/mergers that have helped validate some of this thinking.  But why?  And why now?

List of recent ad tech acquisitions or mergers, not complete:  33across/Tynt, SAS/aiMatch, DG/Peer39, OpenX/LiftDNA, Pubmatic/MobiPrimo, Rubicon Project/Mobsmith and Syncapse/Clickable, Google/Admeld, Google/Meebo, Yahoo/Interclick, ValueClick/Greystripe, Adobe/Efficient Frontier, Oracle/Virtrue, Salesforce/Buddy Media, IBM/Core Metrics

I was talking to a potential client yesterday and we were discussing advertising technology.  We talked about how media is transitioning into the paid, owned, and earned landscape and more importantly, the rent vs. own (audience) scenario.  In a world that’s becoming increasingly digital and platforms can help harness the audiences who engage with you (and your brand), then having marketing technology platforms will help you not only harness this audience, but it’ll allow you to segment, target, engage, and draw insights amongst many other things.

Gone are the days where we continually rent audiences from media companies and pay them significant dollars time and time again.  We should not have to do that continuously if we have platforms that allow us to engage with audiences, have them opt-in to participate with us (as a brand) and interact with them over time.  I’m not saying there is not a role for paid media as there certainly is a role for renting audiences to help us refresh out funnels.

Why this is so important for marketing and advertising technology is because most brands (and their respective agencies) are new to this.  An ad-server is not enough anymore.  Over the past few years with increased velocity, we are re-writing what it means to be a marketer from a technology perspective and using this technology to make ourselves more effective and efficient, which in turn, benefits the consumer.

The Golden Age might be here because many forward thinking strategic companies see the future and need to button and scale up their infrastructure.  The world is their oyster right now and we’ll continue to see additional acquisitions and mergers.

Ghostery, Google, and Privacy

A couple of months ago, I wrote up a report that talked about the marketing technology behind $35 billion in 2011 holiday e-commerce sales.  I pulled the data from Ghostery, a browser plug-in that allows users to understand what trackers and beacons are on individual websites.  After I released the report and got some initial traction, Evidon, the owners of Ghostery reached out and asked me to be a guest editor for their Global Tracker Report.  Fast forward to today, their first report is out and you should download it.  Also, the New Media Age wrote a solid piece on the report.

Why?

Not only is it a good read about the current state of privacy, advertising technology, and data, it’s a piece that both the novice and advanced marketer can understand.

Based on the data, the top 5 most prolific trackers are owned by both Google and Facebook.  Google has 3 of the top 5 including Google Analytics, Google Adsense, and Google +1.  Facebook includes both Facebook Social Plug-ins and Facebook Connect.  It’s amazing to see the dominance of Google on this list, as their Google Analytics tags are down on a disproportionate amount of websites scanned by Ghostery.

I’ve recently stated on this blog that Google is both the house & the card player (in relation to a casino).  They know the odds, the cards in the deck, in the current hand, and are playing the game.  The more and more data that Google has access to, the more they can optimize for a Google beneficial outcome.  Note however, this argument falls a bit when you realize that Google can do this short term, but will lose advertisers long-term if (Google) only optimize outcomes for themselves.

If you have a second, download the report to learn more.

Google's Dominance and Why I Will Continue To Invest in Ad Tech

There have been a couple recent announcements in the marketing and advertising technology worlds.  Salesforce/Buddy Media last week, and now this week, DoubleClick Digital Marketing Suite.  For those of you not following the DoubleClick announcement, read here and here.  This morning, Digiday came out with a an article entitled, “Is Google Running Away With Ad Tech?” which I’d like this post to generally respond to.

Google is Intent Rich
As a media buyer, one of the best performance signals we have for buying media is Intent.  Murthy Nukala, CEO of Adchemy wrote a visionary piece recently that explained a bit about Intent and you can read it here.  Intent is way far down the purchase funnel and in a last click world, it generally gets all of the credit.  Being that Google is an Intent harvesting machine, it will continue to manufacture dollars.   Most of the Intent comes from its search engine, so the biggest risk to Google’s advertising dominance is if Google remains a top search engine.  As of now, it does not look like it’s going anywhere.

Google has Vision
I have a few very smart friends who have sold companies to Google for ad tech.  They are true visionaries and have a common vision.  Inside of Google, they are harnessing that vision and leading the way with it.  Neal Mohan has one of the best jobs in the world, IMHO.  He gets to execute this vision, not just talk about it, with Susan Wojcicki and continue to build one of the largest ad tech stacks we know of as an industry.

Google’s Enemy Is Themselves
At some point, which is unknown, there is a good chance a modular home falls apart because there is a stress fracture.  With Google, they are basically building a modular home with ad tech.  They are buying fantastic companies and piecing them together.  The recent announcement about rewriting their backend onto their own platform is extremely important, but one would have to think that mixed cultures and many different technologies will eventually be a potential kink in their armor.

There size is another reason to be concerned.  Publishers are realizing (some have realized a while ago) that Google is a big threat to them.  Google is the casino and knows both the dealer and the player.  They have the data.  This data can and will (might) be used against either party when it benefits Google.  This is a serious issue, essentially as Google continues to satisfy both the demand and supply side.  If publishers pull away, this means Google has less data.  The less data Google has, the less significant they become.

Google Needs to Watch the Government
We know that Google is big.  They are big enough that they need to seriously be concerned with how they are fronting to the industry.  In many circles, the term “monopoly” comes up.  From an entrepreneurial perspective, monopoly is pretty phenomenal because it means you’ve out executed every competitor and basically have won the war.  However, we know the USA doesn’t like monopolies and there needs to be competition in our economy.  Privacy concerns are serious and Google needs to keep these in mind going forward.

Why I Will Continue to Invest in Ad Tech
We believe that Google is strong.  There is no doubt.  Using a sports analogy, they are a team that you can bet on to make the playoffs each year and have a good shot at the Finals.  However, one has to bet against them.  There needs to be competition in the space and there are many companies impacted by Google’s dominance and won’t let Google take over the entire industry.  Each one of those companies, either direct or indirect competitors of Google will be stepping up their M&A game over the next 12-36 months to build an ad stack that’s comparable or better than what Google has.  Remember, in ad tech, features are very important – and Google with their early lead may have a legacy stack fairly quickly because the features they acquired might get old and stale.   This leaves the door open for many players.

Additionally, we don’t know where the next search engine might come from.  Twitter, Facebook, Amazon, Apple, DuckDuckGo (no cookies, I know), and maybe a few other players are building this.  If Intent breeds dominance in advertising, then these players cannot be overlooked.  Either Google buys them (probably not most of them), or they could be the foundation for the next big advertising tech companies.

Some of the players I’m watching to make moves are:  Apple, IBM, Adobe, Accenture, WPP, SAS Institute, Salesforce, Microsoft, Experian, ValueClick, Amazon, eBay, Walmart, Akamai, SAP and Oracle.