Category Archives: Internet & Web X.0

Making Progress in Digital Media & Technology

Progress PartnersI met an extremely active Skidmore alumn back in 2004 who had been in the entrepreneurial finance world and we remained networking buddies since. We get together about once every two quarters and discuss promising new startups, emerging trends, and the perils and hardships of entrepreneurship.

His company has been making some significant progress in the digital media space and I wanted to highlight their newsletter which is a welcome addition to my inbox each day. I know there are many places that aggregate news together, but Progress Partners does a great job highlighting the relevant news and briefly sum it up in a simple paragraph for each headline.

If you’re part of the digital media or technology industry, certainly subscribe to the Progress Partners email list, NextMediaUpdate. For Progress Partners, this is a great tool to help showcase their thought leadership to prospective clients.

Frits Abell is heading up their NYC presence and is doing some great work here… if you are looking for strategic planning an execution, M&A work, or corporate finance, certainly give him a call. If you’d like a private introduction, please contact me (if it’s relevant, I’ll introduce you).

Email. Thought it was going somewhere?

Charlie has an excellent point in this post about email.

So, while the kids, with their rock and roll and their ripped jeans and hacky sacks… err.. chrome spinners, may not have a need for e-mail now, it’s not going away anytime soon. Plus, most alternative methods, like Facebook, MySpace, Twitter, require both the sender and the recipient to both be on the same social network. E-mail is a least common denominator. We all have one and it requires no additional signup/login to send someone a message.

There’s been lots of talk about how we need Inbox 2.0 or that kids don’t use email any more (only IM, social network messaging, etc) but remember, they’re not in the work force. Typically, the work force moves at a snails pace (with technology infrastructure) so when kids come of legal age to work, they’ll be using email for the foreseeable future.

Just because a kid uses IM or MySpace to send messages, don’t mean his boss will want to use that. At the end of the day, sending a spreadsheet or pitch document to your team/boss is necessary – whether it’s thru an attachment or an online URL; and email, as Charlie says, is the lowest common denominator of everything [today].

Fred recently (today) posted about messaging and that’s the larger conversation here.  If you step back to 30,000 feet and look at email/SMTP/POP/Exchange/rss/sms/IM/etc – it’s all about messaging.  He believes that there will be open platforms and that’s where it’s going in the foreseeable future.  I agree.  If my Outlook could send SMS messages/IM/etc – and group it all in one place, that would be fantastic.  A great name for this would have been Grand Central, but that’s taken by another startup (now owned by Google) in the telephony industry.  We should potentially call this Penn Station?

We all love innovation and in my opinion, there’s a heck of a lot of it occuring right now in the technology scene. Entrepreneurs are turning out radical new ideas almost daily and we haven’t caught up to even 10% of what they are churning out. Just because kids are using IM to converse with each other, doesn’ t mean we should drop what we’re doing now to adopt these alternative methods of communication. They aren’t mutually exclusive. Also, lets not get too far ahead of ourselves for the innovation curve. Innovation is great – but consumer adoption is more important (to build a sustainable business).

Web 2.0 T-Shirt

G.Verdino pointed me to a social media/web2.0 t-shirt and the nerd in me loves it. Going to add it to my home office.

Social Media T-Shirt As Verdino illustriously comments:

A couple of enterprising gents in Germany have the solution — they’ve teamed up to produce a t-shirt that features scores of Web 2.0 chicklets, alongside check boxes so that the wearer can tick-off all the online networks that they call home. It’s something clean to wear and a great conversation starter to boot — “Hey, you’re on Orkut? Me too. Wanna Pownce? No? OK – well, see you on Ustream sometime.”

You can check out the t-shirt here. The pessimist in me is wondering how many of these startups will still be around by the time the t-shirt arrives. I think I’m going to “check” them off when they hit the dot-com dead pool.

I may add it to the list of what to buy entrepreneurs for the holiday.

Alley 100 Contest

BricaBoxNate Westheimer, a friend of mine is running an “Alley 100” contest with his new startup, Bricabox.  A good PR stunt if you ask me.  Charlie O’Donnell mentioned that this would become a popularity contest between bloggers (thru nextNY) which may certainly happen, but shinning some of the light between the skyskrapers of NY may be a great thing for the NY entrepreneurial industry.

I believe you need to log-in/register to vote (it’s free and takes 2 seconds):

Looking for a job in digital media?

AdAge ran a great article this morning on their site which talks about skills necessary to land a digital media job.  I think the article is fairly comprehensive in the five skills it lists (out of hundreds):

  • Hackers
  • Technologically curious
  • Online eavsdroppers
  • Dataheads
  • Trailblazers

If you’re going to work on Madison Avenue, at a technology startup/company, or a media conglomerate, these are must have skills in order to really harness what’s going on in the industry today and to be able to apply it to your company or clients.

I’d like to stress Dataheads.  Most of the time, we have fantastic ideas and they sound good in theory, but until we can quantify how they perform, their irrelevant  to our clients.  Learning how to interpret and structure data is becoming increasingly necessary in order to really gain a grasp in advertising and marketing (amongst other industries).

I’d also say that even if you’re not in the digital media industry and want to stay abreast of what’s happening in the market overall, learn these skills.  It’s never too late to start learning…

RSS Advertising Done Right

I’ve spent the past hour catching up on my RSS feeds. More on that in subsequent posts.

One of the headlines of a TechCrunch feed caught my eye and I opened it up through my Google Reader. After reading the post, there was an ad on the bottom of the feed for TheITRoom, an upcoming web sitcom. A video was embedded in the ad – so I proceeded to watch it. I’m a big fan of Office Space so TheITRoom seems interesting to me. RSS advertising done right. Right audience, right message, and non-obtrusive.

TheITRom RSS Feed

On a further note, I went to the website of TheITRoom and it shows a video being played in a television… a Dell television. Great placement by Dell. Are they the ones behind this?

Message to Om Malik: Why is it too much?

Please excuse the diatribe, but I wanted to get my point across.

In a recent posting
by Om Malik, he questions the growth in online advertising, citing that they are growing too fast and marketing messages are going to be everywhere.

One of the reports he references are eMarketer’s recent forecastU.S. online advertising nearly doubling from $21.4 billion in 2007 to $42 billion in 2011, representing about 13 percent of the total ad-spend. I am excited for this growth, not scared of it. Let me tell you why.

Hypertargeting: Technology is finally here where we can hyper target our advertising messages. Over the past few years, there has been the opportunity to utilize niche technologies to do so, but now it’s in the mainstream, and here to stay (SocialAds, ContextWeb, Lotame, etc). Advertising overall should be a conversation and when you’re having a conversation with your friends, you don’t normally shout to a million people at once. You speak to an individual or a group of pre-determined people. The technologies are emerging to finally let this happen and they are being combined with a userbase, something in the past we forgot to do (matching the tech w/users).

Shifting Dollars
: The overall advertising pie isn’t getting much bigger, but dollars are shifting away from other media into online (digital). There are many reasons why this is occurring but one of the main reasons is wastage, or if you’re a good online marketer– very little. The wastage factor is what you spend to miss your target audience, or the amount of money you’re wasting. Offline dollars are realizing that their buys aren’t as targeted (see above) and they are shifting dollars to online media. Are these dollars going to shift all at once? No. It’s going to be a long time coming as people are still scared of the Internet and digital media opportunities.

Digital Media & Online: I like to think that digital media includes online advertising. Digital media, for me, is anything that is touched by an Internet connection. Marketers use this Internet connection to deliver marketing messages. This doesn’t just have to exist online, but it can exist on mobile, digital signage, etc. Of the $21.4 billion to be spent this year online, there is a large portion of it to be spent in digital media. As much of what we use becomes digital, the opportunity becomes that much greater.

Accountability: If we’re going to spend money in marketing, we like to be able to measure what we’re spending, where it’s going, and what it’s doing. If I’m at an ad agency, I need to be able to tell my clients what their money is doing for them. One of the long-time ad industry quotes are, “One half of my ad budget is effective, but I don’t know which half.” We now know which portion of the budget is effective and can optimize a campaign on the fly to make it perform better. If you’re advertising in Car and Driver Magazine and for whatever reason, you want to pull the ad, you can’t once it’s’ been released. On, you can. Amazing.

Since the world is flat and we try to reach consumers in all different countries, I’m keeping my eyes open on the growth of online advertising in China. According to eMarketer, online display advertising in China totaled RMB 2.6 billion ($342 million) during the third quarter of 2007, up 14% over the second quarter. Display advertising in China is picking up steam and with over 1 billion citizens, it’s a very large market. Expect ad dollars to follow.

So, Om, why are you scared? Are you scared that we’re shifting money too fast? Are you scared of the entrepreneurial environment? There are so many great reasons why dollars are moving into the digital media (online) advertising segment and these are just a few. If anything, I wouldn’t be scared, I’d be excited, as marketers are becoming smarter with how they’re placing their money.

Are marketing messages going to be in our face, all the time? Hopefully not. Digital media allows us to serve the right message to the right consumer in the right place. Efficiency is the key and potentially, less messages are more. Since we’re getting better at targeting, we may be able to deliver less messages, all of which are higher targeted than previous, to individual people. So, in my perfect world, Om, there are less messages being delivered but the delivery aspect is of higher quality.

In terms of startups chasing advertising dollars, this is another posting. For each time the sun rises, new startups are created and some of their business models revolve around advertising. If there are too many startups chasing online advertising budgets, the industry can’t support it. There will be a bust because of this. Some companies will not survive. Simply put, the law of suppy & demand.

Please note – there is a time and place for traditional advertising. Depending on the circumstances and client, there is a need for more traditional advertising than digital. The entire world is not going to shift all of it’s budgets to online advertising, but a majority of the advertising that is being wasted is going to shift. Since we’re human and we make mistakes, have egos, and like to live irrationally, it may take much longer than expected for this shift.

Testing SocialAds & Market Research 101

Owyang and Caddell are testing Facebook’s SocialAds system by purchasing $20 worth of ads and calling it a day. Both of these guys are immensely respectable and I’ve been fortunate to have some great recent conversations with Jeremiah. Right when Jeremiah published a post about his SocialAds test, I submitted a comment on his blog:

  1. Darren Herman November 7th, 2007 8:28 am

    Jeremiah, is $20 going to give you a statistically valid sample to extrapolate enough data from to see whether or not Facebook will work?

Jeremiah quick responded with the following:

  1. jeremiah_owyang November 7th, 2007 9:37 am


    Nope it’s not, it’s just at test, a trial. I talk to many clients who are using social media, I’ll also be able to hear from them.

    My goal is to understand how the system works, break it, make mistakes, and make sure my clients don’t have to.

I’m concerned about the following: If Owyang and Caddell both have negative experiences with SocialAds over a $20 campaign, I’m sure that they will post (since that’s why they started the topic) and many secondary sources will pick it up and talk about how SocialAds do not work, based on their data. Gotta love the power and influence of the Internet.

Let me please go on the record and say that these $20 “tests” are “trials” and they do not have any statistical relevance. The sample size is too small to make any overarching statements whether or not Facebook’s SocialAds work and I believe a larger test with some 3rd party auditing & measurement may be required.

Market research is an entire industry in itself and wasn’t invented overnight. There is a lot of technical innovation that is forcing rapid change to the industry, but the underlying methodologies are relevant. Calculating sample size is important for any research and here is a posting on how to do it.

If you don’t feel like reading the entire posting, here are some simple details:

For a meanThe required formula is: s = (z / e)2

s = the sample size
z = a number relating to the degree of confidence you wish to have in the result.? 95% confidence* is most frequently used and accepted. The value of ‘z’ should be 2.58 for 99% confidence, 1.96 for 95% confidence, 1.64 for 90% confidence and 1.28 for 80% confidence.
e = the error you are prepared to accept, measured as a proportion of the standard deviation (accuracy)
For example, imagine we are estimating mean income, and wish to know what sample size to aim for in order that we can be 95% confident in the result. Assuming that we are prepared to accept an error of 10% of the population standard deviation (previous research might have shown the standard deviation of income to be ?8000 and we might be prepared to accept an error of ?800 (10%)), we would do the following calculation:
s = (1.96 / 0.1)2
Therefore s = 384.16
In other words, 385 people would need to be sampled to meet our criterion.
*Because we interviewed a sample and not the whole population (if we had done this we could be 100% confident in our results), we have to be prepared to be less confident and because we based our sample size calculation on the 95% confidence level, we can be confident that amongst the whole population there is a 95% chance that the mean is inside our acceptable error limit.? There is of course a 5% chance that the measure is outside this limit. If we wanted to be more confident, we would base our sample size calculation on a 99% confidence level and if we were prepared to accept a lower level of confidence, we would base our calculation on the 90% confidence level.`

If we’re going to go testing the SocialAds system and other new and innovative systems and draw conclusions, lets do it as best as possible so that the world at large can benefit from statistically relevant data.

In Zurich: Recap of Speech and Pictures

Darren Herman SpeechI took an 8 hour flight from JFK to Zurich, Switzerland to participate in a conference at the GDI Institute on digital media and my portion:  the role of video games in culture and business.  While I have history in the in-game advertising industry, I didn’t focus the presentation on this.  I tried to talk about the macro-trends in the video game industry, some of which I posted in early October on this blog.

I spoke solely on in-game advertising at the GDI Institute in 2005 and the crowd really got into it.  Lots of great questions and insights that were shared amongst the few hundred in attendance.  As I noted above, maybe 10% of the presentation this time around talked about in-game advertising but the real time was spent with trends.  In-game advertising is part of a larger trend, which is finding ways to monetize games through the use of everpresent connectivity.  With broadband connectivity being harnessed by consoles, a new ecosystem of monetization opens up (skill based wagering, in-game advertising, virtual goods, subscriptions, RMT, etc).

One of the othe rmain topics I spoke about was about video game culture.  Look at what Guitar Hero and Rockstar are doing for fans.  The Nintendo Wii as well.  Toyota’s commercial utilizing World of Warcraft like content.  Games are finally being socially accepted which is opening up a whole creative market.

We had a fantastic discussion about this last night (as I was trying not to fall asleep due to timezone differences) and really enjoyed meeting a lot of new people.  Had lunch today with a gentleman I met last night and we discussed the presentation further.

For those of you who want to see some pictures of Zurich, I posted some in my Flickr gallery.