Category Archives: Internet & Web X.0

Marketing Technology behind $35 billion in holiday 2011 ecommerce sales

Ever wonder who is the marketing technology behind the $35 billion dollars in e-commerce sales this holiday season? If you are an agency, wall street analyst, marketer, optimizer or any other player in the digital media ecosystem, you probably want to read below.

I always tell my team at The Media Kitchen that you can learn a lot from what other companies are doing; the good, the bad, and the ugly… so study them.  On the web, it’s relatively easy to study companies and their respective infrastructure as the source code of competitors is only 1 click away.

I teamed up with my friends over at Evidon who own the Ghostery product and had them send me a data dump of 3rd party tags that were placed on 20 e-commerce sites (list below).  Note, the data I have is fairly reliable but not perfect, so I may have missed a partner here or there.  However, I do have over 150+ partners who had tags down on these 20 e-commerce destinations, so I feel I have a directionally accurate view of who was part of the marketing technology ecosystem for Holiday 2011.

Sites I tracked were Best Buy, CouponCabin, Sports Authority, LL Bean, Gap, Dicks Sporting Goods, Bed Bath & Beyond, SVPPLY,, Modells, Zappos, Old Navy, Disney, Target, Walmart, Gilt, Sears, Amazon, NewEgg, and Piperlime.

I counted a total of 413 partner tags/pixels placed across these 20 sites (note, I only went to 1-2 pages per site and assumed tags would be similar across most pages).

Executive Summary (full report can be downloaded here)

  • Best Buy, CouponCabin, and Sports Authority properties contained 43% of all tags placed.  The top 10 of the 20 sites accounted for 85% of all tags placed.  I am actually surprised that Amazon didn’t fall into the top 3, but again, Ghostery told me they only had 3 tags down on their pages (Turn, DoubleClick, Google Analytics).
  • The top 3 tags placed across all 20 sites were Google Analytics, Omniture, and DoubleClick.  No real surprise here.
  • The biggest surprise IMHO is that Google+1 outranks Facebook and Twitter as social plug-ins that are embedded across these ecommerce publishers.
  • The DSPs are in-line with the recent Forrestor report so I didn’t find anything crazy in those numbers.
  • Google Analytics has 70% coverage across these 20 e-commerce sites.  Imagine the data that Google could/is collecting.  Just saying.

In order to digest this 1000+ cell data dump, I created a schematic whereas I broke down the product (such as Tag Management) and took the top companies and their % composition the 20 e-commerce destinations.  The link to the excel sheet is at the bottom of this post.

Web Analytics software:  Google Analytics (70%), Omniture (60%), Foresee (40%), Webtrends (15%), Yahoo Analytics (15%), Coremetrics (10%)

3rd Party Ad Serving:  DoubleClick (55%), Microsoft Atlas (25%), ValueClick MediaPlex (35%), MediaMind (5%)

Tag Management:  BrightTag (20%), TagMan (5%)

DSP:  AppNexus AdNexus (30%), Turn (25%), MediaMath (20%), Invite Media (20%),  AdNetik (10%), X+1 (10%), Lucid (5%), DataXu (5%), Rocket Fuel (5%)

Exchange:  Right Media (35%), AdBrite (15%), OpenX (10%)

SSP:  PubMatic (50%), Rubicon (25%), Admeld (10%)

Social Plug-Ins:  Google +1 (45%), Facebook (40%), Twitter (15%), AddThis (15%)

Site Optimization:  Omniture (60%), Monetate (20%), RichRelevance (20%), Visual Website Optimizer (15%)

I believe the Omniture & DoubleClick tag data above is a bit misleading because those are grandiose tags that can do many different things and without the right context, they could be categorized incorrectly.  I tried my best.


Google dominates pretty much up and down the marketing technology stack. I still think they should buy Adobe to become the monopolistic dominant player (to get Omniture), but I don’t believe the government will ever allow that.

I was actually surprised that Omniture didn’t have even higher composition of the 20 ecommerce players.

I couldn’t tease out DoubleClick AdX from their other tags so that’s why they weren’t included in the Exchange part.

And of course, since I work, play, and invest in the marketing technology ecosystem, I’m conflicted up the wazoo with many of the companies mentioned in this post as well, as, the data in the chart linked below.  I have done my best to tease out bias.  Please proceed with caution but honestly, I don’t think you need to.  Contact me if you are interested in discussing.

Thought you might find all of this data interesting.  I have included my chart here in case you want to download it and play with it.  The full report I put together is located herePlease remember to give proper attribution if you use it.

I’m curious to look at this data in 2012 and compare it to 2011 (I don’t have historicals).  I’m sure we’ll see some interesting changes.

Happy holidays.

Darren Herman is the Chief Digital Media Officer of The Media Kitchen (part of kbs+) and is President of kbs+ Ventures which is an early stage marketing technology institutional investment arm of the agency.  His tweets can be found at @dherman76 and blogging here at

Digital Media & Advertising Articles of Note

I’ll be traveling over the next 24 hours or so, but wanted to post a few articles that I’ve found interesting over the last couple of days:

Online Merchants Hone In on A New Demographic:  My friend Stephanie writes an article about a new audience for merchants… the imbibing consumer.  A glass of wine or beer after dinner while online shopping?  Sounds like merchants can have a lot of fun with this including potential wine pairings with individual online items.

SocialGuide unveiled their year-end look at SocialTV.  FOX is in the leadership position because of their sports & youth oriented programming.  Note however, there are 36,700 projected total socialTV related comments in December 2011, which still seems small, but can really only go up from here.

ComScore released their holidays sales numbers and showed a 16% lift last week from the same week in 2010.  Total online spending amounted to $2.83bn for the week or $36bn for the entire holiday season.

AdExchanger has their holiday reason list up on their site.  It includes industry reaction posts of major topics such as Adobe Acquiring Efficient Frontier, Mediabank-DDS Merger, and many others.  Certainly check it out if you have time to digest a lot of right (and wrong) opinions.

And lastly, a great interview with Antony Young, the new Chief Executive of Mindshare.  Why I specifically call out this interview is because he gives some good insight into his vision and needs within the media world, where many agencies seem to be undifferentiated.  As you can see after reading this, he’s striving for change and will invest and build in it.

Content Creation

Over the summer, I wrote a post on kids & content consumption.  The post came about because I realized that many of the user generated videos that my 3-year old son was watching on YouTube (via his iPad) had over 6MM views on them. I was shocked that these videos accumulated so many views as it was simply kids and their parents playing with Thomas the Tank Engine trains.

Over the past month, when my son was asked what he wanted for the holidays, he mentioned a few toys that we’d not heard before.  After going thru his YouTube history, we realized that he had viewed short pieces of content put online by both big and small toy stores and manufacturers as marketing content.  He watched some of these videos many times and could now tell us all about them.

We are now in the middle of toilet training.  He’s good with his #1s, but is a bit shy about his #2s.  We promised him that we’d buy him any toy he wanted if he started going #2 on the potty (TMI, I know).  He asked for a very specific truck, one of which I said we can get from Toys R Us, but he quickly corrected me and told me it’s only available at Walmart.  He’s 3 years old.  He’s never been to Walmart (none in the area).

It’s a marketer’s dream.  Walmart had unaided recall from a 3 year old.  I’m long content creation over the next few years.

YOUniverse & Personalization

An area I have been studying for a while is personalization, especially under a macro trend that is termed the YOUniverse.  While I did not create the term, Renier did, it’s an area that has been of increasing interest to me.  Personally & professionally, I have been involved in personalization over the years: content recommendations (, mens shirts (Second Button), and ad optimization (Varick Media Management).  In 2001, I had a business plan to essentially create what become Second Life, but it never got anywhere.  It was all about personalization.

Ninety years ago, pretty much everything was personalized.  We went to the butcher, he chopped meat to our liking.  We went to the tailor and came away with a perfectly fitted suit.  We needed pencils, so we sharpened them ourselves to match what we needed.

We moved away from this customized business world because we optimized our processes to create cost efficiencies that were passed to the consumer as well, as, created additional margin that was kept for the business.  It was a win/win.  The Gap emerged, created a lower cost pair of basic jeans, and was able to sell at a lower price point because they created 1,000,000 items of the same thing in mass factories.  If someone wanted a very specifically tailored pair of the jeans from the Gap, they had to purchase the jeans and then take them to a tailor and the tailor would alter them.  Inefficient, but this is how it works today.

In a world where technology (and software) is penetrating every industry imaginable, processes are going to evolve.  It was cost inefficient to create custom/personalized items back then, but will not be tomorrow.  The world of personalization is starting to unfold at a price point that is palatable for consumers.

What is a key attribute of personalization is that the consumer is part of the creative process.  Every one of us, consumes, have at least 1 bone of creativity in our body and the more we can exercise it, the more we are satisfied and inspired.  Union Square Ventures & Index Ventures both invested in a 3D printing company, Shapeways, which celebrates personalization, but it’s certainly not for the masses, yet.

A recent example of personalization: The Apple iPhone.  The iPhone is a platform which every owner can customize their own experience.  Unlike a feature phone, there is a real relationship with the iPhone because of all of the customization that goes into it on a consumer/app level.

I am very inspired and excited about the opportunities in the YOUniverse.  If you are too, I’d love for you to leave some comments around areas that you are innovating in.

Your Daily Soundtrack

So much of what we do on a daily basis is one dimensional from a sensory perspective.  As an example, this blog post is one dimensional.

Music/sound can play a huge role in your day, as a dimension overlaid on top of everything else.

For a while, I forgot this.

I was thinking recently while I was writing a deck on marketing technology infrastructure, “what if the brief for the deck included a soundtrack?”  Meaning, what if the tone of the deck took on the tone of a song, such as Poker Face by Lady Gaga or Save the World by Swedish House Mafia?  By doing this, it sets the expectation for how the deck should be written and visualized.

I’ve been listening to music a bit more as well – on the train during my commute and at the gym a few days a week.  It’s added a spark of creativity.

What’s your daily soundtrack?

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TechStars Demo Day NYC

I just came back to the office after a great morning with David Tisch, the NYC entrepreneurial investment community and the whole techstars group (currrent & past classes).  I was very impressed with today’s presentations and there are certainly a few I will follow up directly with.

For me, I was most impressed with: Contently, Spontaneously, and Want Worthy.  The latter three are not candidates for kbs+p Ventures as they are outside our investment scope but I found personal interest there.

Contently:  We’ve been a customer of Contently for a few months now and I was a mentor of theirs thru the TechStars program.  They are going after the content creation and curation space which I believe is a very ripe area for innovation.  The creation of content in a socially driven world is immensely important and from a brand perspective, very daunting in the short term.  Contently solves a lot of the issues.  Big fan.  Since I’m a huge fan of saber metrics, this company was interesting to me as they are trying to build the saber of the restaurant space.  David, their CEO captured me at moment one when he mentioned this.

Spontaneously:  I’m generally not a fan of consumer web plays as I’ve not focused a ton in that space, but the need for sharing social plans is certainly around and Spontaneously built a pretty sweet looking app that does just this.  I can imagine that this is a very crowded space in the next 6-12 months and curious to see how Spontaneously differentiates.

Want Worthy:  I’m a huge fan of the fashion space and have been looking for innovation.  Lauren had a great presentation about a meta-layer she’s building and I instantly saw the need for it.  I work with a handful of fashion brands on a daily basis and understand the issues they face from a marketing perspective.  As a consumer, I spend a considerable amount of money on my wardrobe and have been looking for something like this.  I like it a lot.

These are the few I’d like to highlight.  Of course the other presentations were great too.  It was nice to see the growth of the Techstars companies in the past 100 days – lots of changes and pivots, but I think all worked out for the better.

We’ve currently not invested in any of this classes’ TechStars companies but that might change over the coming weeks.  I’m proud to say that we’ve invested in Crowdtwist from the last TechStars class and hope to add to that list.

The Integration Company

I was on the phone with a founder of a major data play within the digital ecosystem this afternoon.  We were discussing the next 12-24 mos of acquisitions and who the big players will be.  This post is not about who will be acquired or do the acquiring, or the bankers who will make some good dollars off the deals, but rather the single most important part:  Integration.

There is no doubt that there will be mergers and acquisitions.  The main reason why deals fail is because the integration between the two companies doesn’t happen.  There are a slew of reasons for this, but most of the time, culture and mismanaged expectations are what drives companies not to integrate well.

If I were going out on my own and wanted to start a services organization, I’d build up a company specifically geared toward making integrations work and take a % of the deal for compensation.  I’d have a team of ad tech and business professionals who have been through it before and make sure that all the boxes are checked around a solid integration.

There will be no shortage of M&A in the ad tech space in the next 12-24 mos so this should be a nice opportunity

Cash Crunch, Herd Mentality, The Big Picture, and We're Hiring!

I spent Tuesday of this week out of the office and at the NY Athletic Club for the Big Picture Conference, a conference that focused on financial markets, global economy and trading.  It was my first year in attendance but have been a regular blog reader of Barry Ritholtz (Big Picture).  Of the many topics we covered on Tuesday, I’d like to highlight two in this post as they are timely to the conversation circulating around Web Startups Hitting Cash Crunch and Fred’s perspective from Union Square Ventures.  Note, we didn’t really speak about Venture Capital or angel investing at the conference but there are similarities.

In one of the talks, Barry came on stage and discussed investing behavior.  It was less of a conversation around around the act of investing, but more about the behavior and perception around how investors think.  Of the many topics that Barry discussed, one of them in particular stood out:  Herd Behavior. He used a cartoon that I’d not seen before, but it quickly made me understand what he was saying:

As you can see from this cartoon, things can become misinterpreted quickly and then irrational behavior stems.  I don’t think our current entrepreneurial/funding environment is misunderstood, but I do think there is a strong sense of herd mentality at the macro-level.

Angel investing is the cool thing to do.  For many, it’s actually the right thing to do.  If you’re an entrepreneur who has raised money from angel investors and then got lucky with a liquidity event, many of us, myself included, pay it forward by investing in other early stage startups.  We don’t do it purely for the “karma” it brings, but we also do it for the potential of the financial returns (early risk, high rewards).

It seems these days that everyone and their uncle are investing in startups.  This has pushed the seed stage funding rounds much higher which has changed the venture financing world, maybe temporarily, or maybe structurally.  Time will play this out.

Around Advertising Technology, there is certainly a funky behavior going on.  We see too many investors without any marketing or advertising knowledge chasing Ad Tech deals.  I spoke about this at a conference a few months back and my friend Will has a great post about this that appeared on DigiDayDaily yesterday.  The infamous Lumascapes which have made the rounds of every ad tech company and put Luma Partners on the map (beyond Mr. Kawaja’s smarts) have actually created a sense of transparency in which allows non-ad tech investors to suddenly become ad tech investors.  Think about that.


One of the talks during the BPC referenced a gentleman by the name of Bob Farrell.  Many people in the audience knew exactly who he was, but I had no clue.  I quickly Google-d him and it turns out he was the Chief Stock Market analyst at Merrill Lynch & Co from the late 60s thru the early 90s.  Apparently, he was highly well regarded.  Over his career, he came up with 10 Rules for Investing, which is highly regarded.

As you read through the 10 Rules For Investing, think about them in the context of the recent meme around startups/fundraising/angel investing.  His wisdom lives on and makes a lot of sense.

1. Markets tend to return to the mean over time
When stocks go too far in one direction, they come back. Euphoria and pessimism can cloud people’s heads. It’s easy to get caught up in the heat of the moment and lose perspective.

2. Excesses in one direction will lead to an excess in the opposite direction
Think of the market baseline as attached to a rubber string. Any action too far in one direction not only brings you back to the baseline, but leads to an overshoot in the opposite direction.

3. There are no new eras – excesses are never permanent
Whatever the latest hot sector is, it eventually overheats, mean reverts, and then overshoots. Look at how far the emerging markets and BRIC nations ran over the past six years, only to get cut in half.

As the fever builds, a chorus of “this time it’s different” will be heard, even if those exact words are never used. And of course, it – human nature – is never different.

4. Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways
Regardless of how hot a sector is, don’t expect a plateau to work off the excesses. Profits are locked in by selling, and that invariably leads to a significant correction eventually.

5. The public buys the most at the top and the least at the bottom
That’s why contrarian-minded investors can make good money if they follow the sentiment indicators and have good timing. Watch Investors Intelligence (measuring the mood of more than 100 investment newsletter writers) and the American Association of Individual Investors Survey.

6. Fear and greed are stronger than long-term resolve
Investors can be their own worst enemy, particularly when emotions take hold. Gains “make us exuberant; they enhance well-being and promote optimism”, says Santa Clara University finance professor Meir Statman. His studies of investor behavior show that “Losses bring sadness, disgust, fear, regret. Fear increases the sense of risk and some react by shunning stocks.”

7. Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names
This is why breadth and volume are so important. Think of it as strength in numbers. Broad momentum is hard to stop, Farrell observes. Watch for when momentum channels into a small number of stocks.

8. Bear markets have three stages – sharp down, reflexive rebound and a drawn-out fundamental downtrend
I would suggest that as of August 2008, we are on our third reflexive rebound – the January rate cuts, the Bear Stearns low in March, and now the Fannie/Freddie rescue lows of July.

We have yet to see the long-drawn-out fundamental portion of the bear market.

9. When all the experts and forecasts agree – something else is going to happen
As Stovall, the S&P investment strategist, puts it: “If everybody’s optimistic, who is left to buy? If everybody’s pessimistic, who’s left to sell?”

Going against the herd as Farrell repeatedly suggests can be very profitable, especially for patient buyers who raise cash from frothy markets and reinvest it when sentiment is darkest.

10. Bull markets are more fun than bear markets
Especially if you are long only or mandated to be fully invested. Those with more flexible charters might squeak out a smile or two here and there.

Sources: The Big Picture, 17 August, 2008 and MarketWatch, June 11, 2008.


Lastly, if you made it this far, we’re hiring.  kbs+p Ventures is looking for an Intern to come and join us at our offices.  The job description is here.  We’re looking for someone who is knowledgeable in advertising/marketing and it’s technological applications.  Someone who will roll up their sleeves with administrative work around our financing and portfolio companies but also help us with diligence and strategy.  Don’t hesitate to reach out.

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Building a Data Empire On Your Back

This post was inspired by an email conversation between Taylor Davidson, Adam Liebsohn, and myself early this morning.  Taylor works at kbs+p Ventures and Adam is the founder/ceo of a startup called VoyURL.

“The best way for a startup to get a dataset like that is to create some sort of self-expression platform, a way to express what you’re into …,” says Lavingia, who also designed the iPhone app. “You can’t directly ask users, ‘Hey we’d love all of your data! List the songs you like and the albums you’ve bought and the places you’ve visited and the food you’ve eaten.’ But you need these answers to ultimately make money.”

The above quote comes from a post on TechCrunch titled Pinterest Joins Twitter and Facebook As The Newest Self-Expression Engine.  It’s hot on the heels of a few other posts (BloombergBetabeatUncrunchedTechCrunch) that talk about how Facebook and the like are building massive data assets on the backs of consumers and reselling them to advertisers.  Consumers for the most part, are not fiscally compensated, but some of the technology services can argue that they are getting value in exchange for their data.

Bloomberg’s latest headline, “Getting Rich From Others Has Never Been Easier,” pretty much sums it all up.

I think there’s an expression, “there’s no free lunch in life.”  When was the last time you signed up for a service and wondered how it was making money?

For the next 24 hours, look at all the sites you visit.  Are they collecting your data and reselling it?  Are you making any money off of your data?

I think we are going to see some sort of reform in this area.  Imagine going to a website and seeing a “ratings” of some kind which shows what they are doing with your data, similar to how the movie world uses different types of ratings (G, PG, PG-13, R, MA).  A little icon or graphic which shows if your data is being sold, transferred, stored, etc.  I think I’d like this – and folks like Apple who take leadership positions with App Stores would have to roll this out next to each app I download.  I’d like to know what’s happening with my data.

Just some food for thought on this Tuesday morning.

YCombinator Ad Innovation Conference Keynote Breakdown

Today’s opening keynote was given by Paul Graham, at the YCombinator Ad Innovation Conference in Mountain View.  I attended along with @tdavidson and @barryl530 to see the early stage innovation that’s happening in the ad tech space.  We were certainly impressed not just with the innovation but with the amount of great agencies in attendance such as AKQA, Goodby, Sapient, Omnicom, Cadreon, VivaKi, and Jess3 amongst others.  We were in good company, to say the least.

Paul admitted he wasn’t an advertising guy, but knows technology enough to understand how tech will influence advertising in the next few years.  The data he used to back his claims were based on the thousands of applications YCombinator receives and is able to forecast and see trends in where innovation is happening.

Here is a summation of the 9 trends that’s pushing advertising, per Paul, but I tend to agree as well.

1. Tablets are important and might call for their own unique advertising platforms to take advantage of the user interface.  Apple and Android will dominate the market and Apple will dictate the ad formats.   Tablets are genuinely a big deal and we aint seen nothing yet.  My take:  Yes, he’s spot on.  Tablets penetrate and are both a content consumption device but increasingly, a content creation device, as long as we can innovate and create good input devices.

2.  All data lives in the cloud. All data about a consumer, transaction, records, etc will live in the cloud and ostensibly, be located in one database that can be used.  What will hold this back will not be technology, but will be government and policy.  My take:  Totally.  We’re seeing this today.  I’m all about data.

3.  More stuff happens peer 2 peer.  Paul used an analogy that I don’t know if I agree with, but he claims that hotels exist because consumers couldn’t find any other way of staying in a remote city or town, so hotels were built to meet this demand.  Now with services like airbnb, hotels could cease to exist as we know them.  My take:  I like what he’s trying to say, but don’t know if I buy the entire analogy.  Not everyone wants to stay in someone else’s home.

4.  There are going to be a lot more startups.   I liked where Paul went with this.  He basically said that engineers had 2 choices after college:  go to graduate school or join a big company.  Now, they have 3.  The third oppty is to create a startup.  Paul threw out the 1% number which was how many developers/engineers start companies… and if this increases 10%, then that’s 10x the amount of startups in the ecosystem.  Again, we aint seen nothing yet with the volume of startups out there… there are going to be many.

5.  Facebook is already a big deal.   Paul said that the $1.6bln from Facebook is quick and simple money and they haven’t really began monetizing yet.  They are focused on growth and even have a Facebook Growth Group, which is one of the most powerful groups in Facebook.  He thinks that when they start monetizing, they can seriously move into markets and kill competitors such as PayPal or Wepay.  My take:  I agree with Paul, but they have to be careful in how they approach this as to not alienate developers and users.  I don’t want Facebook to be 100% of the services I use as a consumer.

6.  Software eating the world.  Don’t be an advertising company that does software.  Be a software company that does ads.  Having this mentality is obviously valley-driven, but allows you to scale a business and think more product focused, which theoretically, should have better outcomes.

7. Target Ads Precisely.  Google could target their ads much more precise but they don’t have to yet, as the market isn’t necessarily requiring it or does it make economic sense for Google to do it until they must.  Paul said a great quote:  “Assume you can read someone’s mind, what ad would you give them.”  My take:  This is one of our investment thesis at kbs+p Ventures – application of data to drive advertising decisioning.

8.  More things will be done by numbers.  If an investor had to place a bet on quantitative measurement/analytics of creative, bets should be placed on measurement.  Numbers will/can/do drive decisioning and with ROI driven world, we need to quantify it.  My take:  Spot on, another investment thesis of kbs+p Ventures as well as what we apply at VMM and The Media Kitchen.  Couldn’t agree more.  I even treat my fantasy football teams this way.. and I want 2-1 this past weekend!

9.  Creative.  Creative will begin to become “generated.”  Paul essentially argued that the best creative in the “future” world will have to be generated because of all the varieties that are needed.  My take:  I think he’s onto something if we’re able to deliver the right creative to the right person at the right time.

I loved Paul’s opening.  This wasn’t 100% of everything, but was a lot of it.  My friend Roger of IA Venturesc also talks about similar trends on his blog, in a post titled, changing polarity in advertising, if you want to continue being inspired…

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