Tag Archives: Goog

Thinking About Google Fiber

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?

 

Digital Marketing Tidbits: Social Media, CPM, Ad Serving, and RTB

I have not been updating the blog as much as I’d like and have a few long-form posts I’d like to write, but based on my schedule right now, that’s a long-shot.  I’m going to condense the posts into a paragraph each and if people want me to expand on them, please comment or reach out to me and I’ll spend more time writing.

Social Media Strategy – your social media strategy should be part of your marketing and communications strategy.  I do not believe that social media should live in it’s own silo.  A solid marketing department or agency will understand social media at its  core and will work to involve the benefits into the overall strategy.  It’s only a matter of time until the many opportunistic social media shops will either be weeded-out or acquired into larger entities.

Let’s Not Kill the CPMOver on TechCrunch, Shelby Bonnie, former CEO of CNET, talks about wanting to kill the CPM.  His usage of CPM is incorrect and is misinformed.  Additionally, since many people think that CPM is a digital media term, there was additional pickup across other blogs and the tech industry started to drink their own juice.   First off, CPM is a planning metric in which marketers are able to put a cost to 1 thousand impressions.  While CPM is a metric that can be used for cost-basis, it is NOT a metric for performance.  Marketers who are optimizing to the CPM without overlaying other engagement stats as KPIs are the ones who should re-work their strategy.   CPM also is used in offline mediums such as Print.  This allows for an apples-apples comparison for rate basis.  To Shelby’s credit, I do believe he was trying to illustrate something different (and valid) but “killing the CPM” is something that’s a hyperbolic title.

Ad Serving Systems – Current ad serving systems such as Google DART or Msft Atlas must change their positioning or they may be toast as the industry evolves.  The current ad serving systems must provide real-time bidding engines within the next few years or they will be defunct as new players (i.e. Invite Media, Dataxu) start to eat their cake.  How much success will Goog/MSFT have with re-engineering their legacy systems?  Time will tell.

Real-Time Bidding – Today, this does not impact the majority of agencies, advertisers, and publishers, but within the next 3 years, the media landscape will be at a tipping point.  I do not know why I picked 3 years, but it seems reasonable.  Imagine a world where you can value every single impression in real-time based on the amount of data you have and the models that you put together… starts to sound like Wall Street… and yes, that’s the insight I am trying to illustrate.  Quantitative analysis is coming to advertising beyond where it is today (it’s already here in most major media shops) and the technologies needed to service RTB will start to emerge.  I’m fascinated with this space from the agency side, client side, and tech side.  If you are building something here and we’ve not spoken, I’d love to hear from you.  Additional:  My comments on the Google Advertising Exchange.