Darren Herman
Marketing, Media, and Technology Conversations

Amazon, The Data Company, Not The Retailer

admin January 7, 2013 No Comments

Last week I blogged about $GOOG.  This week, we’ll talk about $AMZN.

I find myself using Amazon much more than I used to.  I use the desktop version and the iPhone app though most of my usage comes from the iPhone app.

I’ve tasked myself to think about why I use Amazon.

Price was my first reaction.

Buying online for consumers used to be about price – mainly because you did not have to pay sales tax.  Amazon is collecting sales tax, but from just 8 states but three of those states are the most populated states in the USA including California, New York, and Texas.  Based on a July 2012 estimate, they collect sales tax on 35.45% of the country.  New Jersey and Virginia are expected to join the Sales Tax list in 2013 which would push the total coverage of the USA to 41% of the US population.

So eventually, buying online will not be about saving on sales tax.  It’s about something much bigger.  Convenience.  Selection.  And much more.

Here’s what I basically netted out to:

Amazon isn’t necessarily about the lowest price, but the most convenient shopping (1-click).

The 1-click shopping experience on Amazon is amazing.  It’s dead simple.  I cannot tell you how many times I’ve been sitting with someone who recommends a book and I pull out my phone and within fifteen seconds, I order the book and its delivered via Amazon Prime (48 hours).  Their search works, their catalog of product is deep and broad, and the checkout experience is headache-less.

I wish every single site and store deployed a similar checkout mechanisms.

At the agency, we’ve partnered with Amazon in an advertising relationship and are working with them on a client business or two.  I never thought I’d be working with a retailer in this capacity, but I am.

So what is Amazon?

To me, in my opinion, is a data company that uses intent and e-commerce to build its dataset.  Sound similar to Google?  Yep.  Only difference is that Amazon is a bit more diverse with its data set as it has the actual sale of product.  Keep that in mind.

Oh, and Amazon also has an entire cloud hosting division.  How much data resides and passes thru their cloud?

 

 

i
Technology
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Hustle in 2013 and CES Plans

admin January 2, 2013 No Comments

I’ve been looking forward to 2013 for quite some time both personally and professionally.  Personally, my kids are a bit older and it’s easier to do things with them.  Now two and four years of age, they are young and eager to take on many challenges except of course, eat broccoli or string beans.  Professionally, the market has been catching up to what we have been talking about and executing on at the agency which has translated with growth.

I’ve sacrificed much of my blog posts for personal time at home with the family which I think has been a very worthy trade off.  I do miss blogging often and getting consistent feedback from all of you so hopefully I’ll be typing more in 2013 and fit blogging back into my schedule.

Next week, I will be at the Consumer Electronics Show for the first few days.  Not sure if you will be there but if so, get in touch and we’ll try to hook up.

Hope 2013 is filled with hustle, excitement and health for you.

Happy new year.

 

i
Darren Herman, Internet & Web X.0
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Thinking About Google Fiber

admin December 27, 2012 6 Comments

I spent some time thinking about Google Fiber and it’s opportunity and threats to the consumer and business ecosystem.  This is not supposed to be a fully thought out piece but rather some raw thinking that I’m putting out to the Interwebs for continuing a conversation that was started by many of you.

Why is Google building out a Fiber Network?

After reading many articles on Seeking Alpha and other arm-chair analyst blogs, I believe the primary motivation to their planned (and current – Kansas City) fiber rollout is to protect their business and to allow for future growth.  What they are creating is stability for themselves and the pipes in which they can deliver whatever they’d like.

Lets think about this.

Google has done pretty well at maximizing paid search thru harvesting intent on the web.  This is a genius business and will continue to do well, even if there is an advertising downturn (lets hope not).  GOOG’s market cap of around $230 billion which is about 6x 2011 GOOG advertising revenue ($37.9b) could use some more growth prospects to satisfy investors.

Video is a big growth area for Google and YouTube will be its delivery mechanism.  YouTube streams over 4 billion videos per day and is looking to increase this (and the quality of videos) thru YouTube’s original programming partnerships.  The top 5 television markets are New York, Los Angeles, Chicago, Philadelphia and Dallas-Fort Worth; these account for roughly 12.5mm households and there is also some serious purchasing power in these markets.

You can bet that Google would like to put Fiber down in these markets as to gain access to distribute YouTube original programming distribution.  Note, they can currently distribute any of their content in market but if the last mile players like $TWC and $VZ utilize metered pricing, then YouTube videos might face consumption challenges.  If Google delivers the last mile, then viewership of YouTube content theoretically would be free as Google would be monetizing it from the other side (or at least Google would control it’s destiny).

Data is abundant and Google wants to learn from as much data exhaust as possible to make themselves better.  Larry and Sergey are engineers.  They are excited about technologies and want to build big systems.  Google Fiber will give them access to a truly big data set that they will then be able to tap into in order to optimize their systems for better content experiences and advertising delivery.  Advertising deliver is extremely important as Google derives much of its revenue from Madison Avenue.  The better the dataset that Google has, the better performance its advertising should yield.

Just thinking outloud about Google Fiber.  Did I miss any major points?

 

i
Advertising & Marketing, Internet & Web X.0, Technology
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Alto Email, The Open Graph, MBA Mondays, and Las Vegas CES

admin December 12, 2012 5 Comments

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.

 

i
Advertising & Marketing, Internet & Web X.0, Startup & Venture Capital
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Multi-Platform Measurement, Social Referrals, Frothy Times, and Too Much Supply

admin November 30, 2012 3 Comments

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!

i
Advertising & Marketing, Internet & Web X.0, Startup & Venture Capital, Technology
  • Ghostery Obama

Cookies, The President, and Ad Tech

admin November 7, 2012 2 Comments

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.)

 

i
Advertising & Marketing, Internet & Web X.0, Startup & Venture Capital
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The Rise of the Independent Agency

admin November 2, 2012 No Comments

I spoke a few weeks ago at the Digiday Agency Summit.  My talk was in response to Jack Marshall’s original post on the End of the Indies, a post about how independent agencies were decreasing.  I wrote a post in response to Jack’s in July of this year and Digiday asked me to come and speak at their conference about it.

Here is the practice run of my speech.  The quality of image is terrible as this was my first time using screen capture but the voice over is fine.  Enjoy it.

Click here to watch the video on Vimeo:  Rise of the Independent Agency

If you are into agencies, advertising, career opportunities, and future of service and technologies, you might like this video.

i
Advertising & Marketing
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What does $GOOG’s driverless car and marketing have in common?

admin October 21, 2012 No Comments

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.

i
Advertising & Marketing, Internet & Web X.0
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Bored vs. Tired

admin October 3, 2012 No Comments

I met with a friend and seasoned entrepreneur turned academia recently, Aaron Cohen.  For those of you who know him, he’s been around the block and has seen a lot in his days of being a successful executive at digital media companies.    He walked in the room and asked, how I was doing?

I am doing great, I replied.

He said I looked tired, which isn’t the first time someone has told me that.

We then dove into a discussion of being tired vs. bored.

It’s ok to be tired.
It’s not ok to be bored.

Lets discuss this here.

Tired.
Athletes train a lot.  Olympic athletes basically spend their life training.  But even at peek performance, athletes do get tired.  It’s ok to walk off the soccer pitch after a match and be tired.  It’s ok to drop the 400lbs of weights and lie down.  Why?  Because in most cases, you gave it your all.  You put everything you had into the sport.

Business is no different.  More often than not, founders get fat.  I put on weight.  I know plenty more who did as well.  Why?  Tireless persistence to achieve a goal left going to the gym, proper diet, and sleep all secondary and tertiary needs.

If you are giving it (whatever you are pursuing) your all, then tired is in your cards.  That’s good.  Make sure a vacation or time-off is planned to recoup, re-energize and reset.  Without this, you will run yourself down to the point of system failure.  If you get to that point, you’ve gone too far.

Bored.
There is a big difference between being tired and bored.  Boredom comes from not being mentally challenged and leads to complacency.  Boredom is not good because it causes negative attributes and tends to spread to people around you.  It’s like a negative-vibe-virus.

If you are bored, do something about it.  A vacation will not solve boredom.  You need to first analyze why you are bored and then talk to your superior to do something about it.  If there is no room within the organization to move, then get out.  Plain and simple.  You are not being fulfilled and I’m going to guess that your output is not up to standard because you are not mentally there.  You suffer.  The company suffers.

I have met plenty of people who are bored in their jobs.  Being bored is fine as naturally, your learning comes to an end in each role you take.  The smart people then move on to a role that’s fulfilling.  It’s a hard conversation to have with your employers but one that at the end of the day, is mutually beneficial.

I might be tired, but I’m certainly not bored.  I still wake up each day to new and fun challenges.  Some I dislike but they grow me professionally and personally.

i
Darren Herman, Startup & Venture Capital
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The Missing Word in Big Data

admin September 12, 2012 5 Comments

I keep hearing the phrase Big Data.  Whether it be conferences, blog posts, or due diligence requests from VCs about different startups, it’s probably one of the most used phrases in 2012.  The chart below shows “Big Data” search volume in Google over the past 4 years. ‘Nough said.

The phrase Big Data, in my humble opinion is missing a word:  Applied.

Big Data means two things to me.

#1:  Capturing and structuring the voluminous amount of data that gets exhausted across digital channels.  Includes clouds, servers and infrastructure.

#2:  The application of whatever is in the database to make meaning.  The application of this data to make better decisions, or at least more informed decisions.  This is generally software based.

I’m using Big Data to make roster changes to my fantasy football teams.  I’m using it to optimize billions of impressions that are in month on behalf of clients.  I’m using it to understand my DNA.  More and more people are using it as well in order to make many types of decisions.  The more digital we become as a society, we should be able to make better decisions.

i
Advertising & Marketing, Technology
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