Tag Archives: internet

Impact15, Twitchcon, and more

It has been a busy month since my last post here.  I’m en-route to Las Vegas to speak at the Internet Marketing Association’s Impact15.  I’ve never been to an IMA event before so have no expectations but the speaker lineup looks fairly solid and I met my wife in Vegas (and she’s coming too)… so how bad could it be?

At Impact15, I’ll be doing a fireside chat with The Buddy Group CEO/founder, Pete Deutschman, a friend and partner of Mozilla.  He’ll be interviewing me about Mozilla’s role in the content and advertising space and how putting the users first will lead to better results for marketers and users alike.

On Saturday, I’ll be heading up to San Francisco to Twitchcon.  As many of you know, I was in the video game industry from 2004-2007 while we built IGA Worldwide.  Between then and now, the entire video game industry has blossomed and it’s expanded tremendously.  I have an angel investment in a company who is showing at the event (StageTEN).  They help any broadcaster (especially eSports) have a full digital production studio at their fingertips:  incorporating multiple feeds, polling, text-in, etc.  Everything.

If you are going to be at Impact15 or Twitchcon, would love to say hi.  I will be back in NYC next week.

Two posts you should read:

We are 3 clicks away from an oh shit moment for the web and Dear Abby, I don’t mind advertising but I do mind tracking

Google Controls 41.8% of total Internet Ad Spend

I was doing some financial modeling for a new initiative we’re thinking about at work and wanted to see how many ad dollars there were per Internet user.  Based on my simple calculations, it’s on average* $40.88 per user, per year.

And ….by the way, Google controls around 41.8% of total Internet ad spending.  Wow.

Internet Ad Spending







* Note, I said average above.  We know that some markets value users higher than others.
** Link to the Google doc with above information is here

These 6 Companies Controlled 55% of Worldwide Digital Ad Spend in 2012

When I have spare time, I like reading public companies financial reports.  They are very telling not just for the micro trends, but for macro trends as well.  55% of worldwide digital ad spending was consolidated to Google, Yahoo!, Microsoft, Facebook, Amazon, and AOL which according to Comscore, are the 6 top Internet sites by traffic volume.

I am working off the GroupM $113.5B worldwide digital ad spending number from a recent AdExchanger article.  All other numbers come from Lara’s research of these companies Form-10k‘s.

Ad Spend Chart

I ran a similar report in 2011 which is located here.  Read it so you can compare.

Google’s growth is terrific and Yahoo! took a step back in 2013.  I’m always amazed to see Google dominating digital ad spend with 41% share whereas the next closest competitor is around 4%.  That’s 10x.  10x!

Nice to see Amazon and Facebook building out their ad businesses and showing y/y growth but the larger question is of where is it coming from?  Who is losing (or is the whole advertising pie getting larger)?




Super Bowl XLVI Advertising, When TV Spots Are No Longer TV Spots

If you’ve been watching any of the major television channels over the past week, you’ve probably seen a little button on some of the commercials that pops up with a call to action to Shazam.  For those unfamiliar with this nifty app, it allows you to use your mobile device to take a sample of a sound in a room and send it to Shazam returning details surrounding the particular sound.  This initially launched around music – and I personally use it quite often to help me figure out who the artist is of a particular song so I can download the track at a later time.

Over the past 6 months, I’ve seen an increasing amount of television spots using Shazam technology to help consumers learn more about a product.  Back in February 2011, an Old Navy television spot featured Kim Kardashian singing and had a link out to Shazam.   This is the first commercial I saw that adopted this technology.  Since, some big brands are starting to use mobile to extend television spots.  Last night, I was watching 30 Rock on my DVR (lots of catching up to do) and there was a commercial for Progressive with a Shazam logo.  I took out my iPhone and Shazam’d it – and captured the screen shot here.

I’m predicting that we are going to see quite a few Super Bowl spots with Shazam tie-ins.  I’m not the first nor won’t be the last to say this.  AdWeek, back in June, predicted we’d see up to a third of all commercials.  They could be right.

While this is not an endorsement or commercial for Shazam perse, it’s a statement of stitching together multiple screens.  If brands are going down this path, they need to be thinking about the connected screen experience.  My buddy Pete calls this the Connected14I’ve written about it here.

Super Bowl XLVI could kick off (no pun intended) the main stream adoption of the connected experience.  I hope so.

Why I'm Excited About This Batch of Internet Driven IPOs

NEW YORK - APRIL 02: Changyou CEO Tao Wang pre...
Image by Getty Images via@daylife

Let’s assume the Internet started mainstream adoption in 1990 when Prodigy had approximately 465,000 subscribers and CompuServe had 600,000 (fact check here).  While those numbers in themselves aren’t mainstream to a country of 300MM+ people, they do signify a large group of people who were early adopters and started to spread the love about this thing we called/call the World Wide Web.

Throughout the decade of 1990s and within the technology sector, there were quite a few companies who attained liquidity thru going public (IPO).   Others raised quite a bit of private equity and venture capital and some are still around today, others are not.

IPOs of significance to this post:  Lycos (1996), Yahoo! (1996), eBay (1998), Akamai (1999), Razorfish (1999)

During the 90s, there was lots of hype and hoopla surrounding many of the IPOs which led them to appear much larger and significant than they really were.  The major reason for this was the promise of the Internet and implied valuations and multiples for what the Internet “will be” in years to come.  These multiples made up for the revenue traction (or non-traction) that the companies had.  The companies who had revenue traction then are more likely to be around today as they had solid foundations.

Fast forward to today.  There is starting to be some talk on the various mainstream and niche news sites about the forthcoming IPO marketplace for Internet related companies such as Facebook, Groupon, LinkedIn, Twitter, amongst many others.  In talking with many investors, journalists, and entrepreneurs, they are a bit hesitant of this IPO landscape which is the opposite of my thinking.  Maybe I’m the contrarian here.

I’m excited for some of the forthcoming IPOs.  Let me explain why but before I do, lets remove any external factors outside of this blog post about the US economy, worldwide economies, etc.   Let this solely be around the Internet.

  • Internet Adoption:  In it’s most simplest sense, there are more people using the Internet today than there were in the 1990s; here in the US and in the world.  By more people using the web, there is inherently more demand for innovation.  Instead of introducing home PCs to people, we’re now introducing tablets and smartphones.  Access to the web isn’t “if” or even “when” now, it’s more about “how much” access thru multiple devices.
  • Internet Understanding:  It’s 20 years post 1990 or 11 years (an entire decade+) since 2000 and the mainstream public now knows how to use a computer and browse/surf/dabble across the web.  500 million people have logged onto Facebook and created a profile.  This was not the case 10 years ago.  Fundamental understanding and most important, comfort, with the Internet is here and more people are discovering, transacting, communicating, and planning each day online.
  • Advertising Dollars:  For the past 20 years, dollars have been allocated to the digital channel.  Search, display, rich media, video, mobile, etc all have helped grow the digital advertising pot. Currently as it stands according to eMarketer, online ad spending is roughly 15.3% (2010) of total ad spending resulting in approximately $25.8B.  This number is going to grow and help bolster digital tv, radio, print, and OOH (all of those channels will have digital backbones eventually).

So why I’m particularly excited about the idea of the Internet IPO resurgence is because there is a strong foundation for these companies to grow on top of in terms of Internet users, comfort level, and ad & product spending online.  The previous companies had very little to build atop which is very different now.  The landscape is a bit more mature which should allow for companies to go big and have a higher rate of success.

(note, I’m not bullish on all of the companies listed in this post -just using them as examples)

Related articles
Enhanced by Zemanta

Financial War: The Nimble vs. the Titans

A much smarter man than I said that competing with big companies is much easier than small companies.  Big companies are hard to pivot and change; so they either acquire you (good for investors) or you bring them down.  Actually, he said that today at the TechCrunch Disrupt Conference today in New York City.  His name, Michael Bloomberg.

Bloomberg is a trifecta for this post:  his quote, his background in finance, and his track record as an entrepreneur.

In the office, I’m responsible for digital marketing strategies for a few financial companies (no conflicts) that we’ve all heard of.  But a funny thing is happening on the way to the office.  Thru email and through introductions, I’m being introduced to about a half dozen startups that are tackling the financial sector.

Now is the perfect time.

You do not need to read another rant about Wall Street, as I’ll leave that to more financially-minded folks than myself.

When in a fight, you want to knock your opponent down when he’s hurt.  The bigger they are, the harder they fall.  During a professional boxing match, the fighters are trained to wait/observe for weakness and then attack.

Right now, banks are hurt and they are ginormous.  It’s the perfect time to go after them and attack.

2 financial companies are presenting at the Disrupt conference this week:  Plantly and Betterment (I’m assuming a play off the words “better investment”).  The third made press waves last week and is called Banksimple.  There’s even a fourth that I’m seeing ads for:  Ally Bank.

I don’t know the intricacies of each of their business plans, but they are certainly positioning themselves in a market where the nimble can out maneuver the biggies.  Also, being big these days in finance may not resonate with consumers so well.

This is an area that I’m watching.  If you are part of the senior team at any of these companies (or others), I’d love to chat.

Crunchbase Profile:  Plantly
Crunchbase Profile:  Betterment
Crunchbase Profile:  Banksimple

New Piece of Art in the Herman Household

As many of you know, I went down to SXSW this year to check out the Interactive sessions and while walking through the exhibit hall, I saw that one of my favorite artists, Hugh Macleod of Gapingvoid fame had a booth and was selling some of his original art.  I’ve been a fan of his art for years and have always thought about owning some for the home office.  Well, now I do.

Below is the original that I acquired:

Why I selected this piece over others was because I think it’s really relevant to me.  While I’m not on the Venture Capital or large Angel side of the business (i.e. the guy on the left – in red), I have been known to start and fund companies and always love figuring out a business model.   This piece gives me a chuckle each time I read it and it’s relevant to the first and second dot com bubble I’ve lived through.

I also feel right now, this is very relevant to many of the companies being funded.

To RTB or Not RTB, That is the Question

This is an unbaked opinion piece.  Please comment to keep the conversation going as this will certainly provoke some commentary.

I’ve been participating in many conversations (conferences, panels, articles, journals, meetings, etc) about Real Time Bidding and it’s potential affect on digital media.  There are very few true real-time-bidding inventory sources today and only a few Real-Time Ad Platforms (i.e. AdNexus).    Without revealing too much information from our day to day in the office, we see that less than 25% of our inventory is coming through Real-Time Bidding.  According to conversations with our peers, this is fairly consistent with the industry.

The big question is not whether RTB is coming (or here), but rather if you (as a marketer) need to harness it.

Demand side platforms (DSP) build/buy/partner with RTB-enabled platforms
If the big agency holding companies have their way (note: I’m part of MDC Partners), then the majority of standardized display will be running through these platforms.  If these platforms and capabilities are RTB enabled and the processes and procedures are in place to run in Real-Time, then there can be a very large demand (liquidity) for RTB enabled inventory.  This means that the Supply Side Platforms need to on-board enough inventory to be sold in Real-Time.  I include data (& audience) within the “inventory” label.  1st, 2nd, and 3rd party data (& audience) needs to be RTB enabled as well.

You need both the Demand Side and Supply Side to be real-time enabled to make this happen.

This theoretically seems easy, but how many “big-name” publishers are real-time-transaction enabled?  The majority of RTB inventory is long-tail today… and this needs to change to really attract the significant dollars to this space.  The Supply Side will either aggregate at large exchanges or use Supply Side technology to make this happen.

If you do not buy in real-time, can you exist in the future? Simple:  yes.

I know people in the marketing space (including myself) are trying to draw parallels to the financial markets and I’ll continue to do so here.  There are many financial brokerages that have access to transact very quickly and they do.  But other brokerages and buyers are able to transact (with significant dollars) in near-real-time (or less than near-real-time) and still be in solid financial positions and the ability to move markets.

Speed does not guarantee success in markets: finance or marketing.  The art of orchestrating the sciences is where the men are going to be separated from the boys. You can give me access to AdNexus tomorrow morning and just because it’s fully RTB enabled, does not mean I’ll be any better than buying site direct or thru a non-RTB network.

Unless the algorithms and the “view” of real-time inventory is exactly the same, no two RTB platforms will perform exactly the same.

Have I convinced you that you do not need real-time bidding to be successful today?

Now the contrary:  The faster an RTB platform can operate (in milliseconds today), the more inventory it has access to.  This is a big deal.  If you are building models to predict the future, then you want to see as many impressions as possible to have access to pick from.  Some say buying clout does not matter but does it?  A question to ponder.

The net/net:  RTB is a buzz word today and many people are talking about this space.  I believe that where there is smoke there is fire, thus, there is something to take note about RTB.  With the opportunity to value individual impressions and data with the ability to go the last mile and action it, potentially ahead of competitors, RTB does have an edge to those who can use it.

I believe that the long term winners in this category will not be the scientists, but rather the artists who know how to apply the processes, procedures, and strategies for their clients.

Please comment to keep the conversation flowing.  Would love to hear your perspective.

Lessons of the dot com shakeout – a decade later

If you’ve been around me long enough, you’ll hear me either say “history repeats itself” or “it’s the same cupcake with different sprinkles.”  With many of web 2.0’s kids not around during the boom and bust of web 1.0, I highly recommend reading this post and keeping it in mind while entrepreneuring.

The most important lesson for ANY entrepreneur:  Understanding the Adoption Curve (I wrote this back in 2008)

I came across the Business Plan Archive a few years back and was amazed to read the actual business plans of  the 1990s dot coms.  The archive was built by the University of Maryland Robert H. School of Business and Webmergers.com with a few other participants and is meant to be an educational resource to learn about the different entrepreneurial activities of the 90s tech/media landscape.

The archive went offline in 2007 for maintenance (I wish it came back online!), but Tim Miller of Webmergers Inc summarized ten lessons from the original bust.  I think these are extremely important (still) and as history repeats itslef, how many companies are following in these footsteps?    Below, they are presented:

Ten Lessons from the Internet Shakeout

The past boom and bust of the Internet sector is one of the biggest business events of the past several decades. In the interest of finding lessons that help us avoid similar debacles in the future, here are ten observations about the dot com shakeout.

1) Nothing changes overnight. The single most fatal miscalculation investors made regarding the Internet was to massively overestimate the speed at which the marketplace would adopt dot com innovations. That assumption of speed dictated the rapid pace and scale of investment by both VCs and public investors – and the resulting over-investment led to the inevitable bubble and bust. We somehow believed it was different this time. It wasn’t. It will always simply take time and lots of it for people to integrate innovations into the way they do things.

2) New stuff doesn’t replace old stuff. History tells us repeatedly that innovations almost never replace existing products but rather typically worm their way into the mix and inhabit their own niche. Yet, many dot coms and their funders persisted in modeling businesses that assumed a zero-sum game in which, say, online retailing displaces a significant percentage of existing retailing. In retrospect, all we had to do was look at the history of catalog marketing to predict that e-tailing might wriggle its way into some minority of purchases, eventually reaching its natural saturation point. Recognition of historic precedent could have spared some large and costly investments.

3) Too early? Too bad. Timing issues continually pop up in the post-mortem of the dot com shakeout. Many of the web’s wrecks came to market with high-cost products well before the infrastructure was ready to receive them. The digital entertainment category is one good example. Companies like Z.com, Pop.com, Icebox.com, Digital Entertainment Networks and Pseudo Networks all may have had good products, but they were much too early for the broadband marketplace.

4) Many startups were fundamentally uncreative and “un-Internet.” Many failed Internet startups began with ideas that involved little more than shoveling an existing business model onto a web site – or copying another company that did it. Just as “shovelware” in the content world involved transfer of magazine or other traditional media formats directly to the Internet, so too did much e-tailing simply export catalogs to the web. Online retailing of “stuff” is perhaps the most obvious and uncreative use of the Internet, and like shovelware, it largely fails to take advantage of the interactive features that give the Internet its power. The more creative – and sometimes successful – e-commerce startups leveraged Internet tools to produce such innovations as pricing “bots,” collaborative purchasing, person-to-person trading, e-procurement systems and name-your-price bidding systems for perishable inventory.

5) All we, like sheep, will go astray (with enough pressure). Amid speculative bubbles that last as long as the dot com one we have recently witnessed, even the most disciplined investors can conclude that the rules really may be different this time and eventually give in to the wicked ways of the herd. Ironically, it is many of those most righteous hold-outs that inherit the iniquity of us all – those that capitulated and invested just as the bubble was about to burst lost both their shirts and their integrity. By contrast, the prodigals that jumped on fads with the alacrity of 13-year-olds had already cashed out handsomely. Few of us are immune from speculative frenzies.

6) Free is folly. The junkyards of many innovation cycles are piled high with business plans built around the idea of giving something away free and “making it up on XYZ.” A decade ago while I was working at Ziff-Davis we received a business plan that called for giving away free fax machines and “making it up” on faxed advertising. That’s only one step sillier than giving free exercise machines to health clubs in order to sell advertising blasts to sweaty boomers. The numbers simply don’t work out for most free models. The Internet’s low incremental distribution costs nourished a large crop of freebie wannabes – and now the “F” section of our shutdowns list is very long indeed with names like FreeInternet.com; Freerealtimeworld; Freeride; FreeTaxPrep.com; freeWebStuff.com; freeworks.com – you get the picture. Next time around – we’ll focus on our value proposition a bit more closely.

7) We used narrowcast to broadcast. A surprising number of entrepreneurs, presumably in the search for the big play, decided to use the Internet, the ultimate narrowcasting medium, to reach the widest and most undifferentiated consumer markets imaginable. In using the WaterPik of the Internet to water the broad consumer garden, entrepreneurs bypassed the many rich demographic lodes that the Internet enabled them to mine for a fraction of the cost of the big play. Many of the big and broad consumer startups ranging from Value America to Webvan went aground on the inherent low margins and the massive marketing and infrastructure costs of such ventures.

8) The $50 million rule can kill. Many dot com casualties fell victim to the temptation to gin up business plans to meet the size criteria of the typical venture capitalist. A typical VC firm, in order to justify the time it spends on an investment, needs to dispense fire-hose amounts of cash, implying that the recipient business must be fairly big, able, say, to generate revenues of $50 million in three years (hence the $50 million rule). The resulting dynamic creates a sort of theme park of co-dependency – VCs dangle big carrots to encourage bigger thinking on the part of entrepreneurs whose DNA already is programmed for grandiosity. The sad result is that many of these inflated business plans were overfunded. They were never destined for the fifty-mil world, but would have made nice $10 million to $20 million businesses had they been more appropriately financed. In retrospect, angel investing, with its ability to funnel smaller jets of funding, would have been more appropriate for many of shoulda-been-niche plays.

9) It’s hugely difficult to build chicken and egg simultaneously.Many of this past year’s disasters stemmed from business models that required the startup to build both a critical mass of buyers and a critical mass of sellers – and do it at the same time. Many B2B marketplaces fell into that category, as did collaborative purchasing models, rewards programs and many others. It requires huge amounts of money to create either half of the equation in a many-to-many model. Investors that want to create the next eBay had better plan to spend a lot of time and even more money to do it.

10) Prediction tools must improve. As we observed above, the biggest mistakes of the dot com bubble were mistakes of timing – of misjudging the speed and direction of development and adoption and placing investment bets accordingly. In order to avoid those mistakes in the future, we need better predictive tools to plot the speed at which new technologies will spread. Spreadsheet gymnastics by 20-something b-school graduates should not dictate our investment decisions. We can produce better predictions. We have the data – from decades of technology innovation. We have the ability to analyze the data – after all, Everett Rogers wrote “Diffusion of Innovations” 40 years ago. We have the history. The dot com bust suggests we should begin to learn from it.

Etiquette In An Increasingly Connected World

I think the most devalued word in the past decade was the word, “friend.”

I’m just another geek living in this world so I have no business enforcing my thoughts on Etiquette but since I think I was raised well (I’d like to think) and I’d like my son to be raised well, I’ll publicly share my thoughts.  Note, since I work in New York City and specialize in digital media, my thoughts are skewed towards the early adopter technologies, but over time, the rest of America/world will catch up.


With email, text messages, and DM’s, it’s extremely simple to make fast introductions now.  Please do whomever you are introducing a favor and ASK the receiving party whether or not they would like to be introduced.  Just because Person A is friends with Person B (who is friends with Person C), does not mean that Person C will want to meet Person A.   Not only does this save Person C from being in an awkward position, but it makes the introduction much stronger if it should go through.

Meetings (including around a conference room table)

If I said “turn off” your electronics, about zero percent of the readers would actually do that.  So, put them on mute/vibrate and pay attention to the people in the meeting.  My guess is that meetings will go much faster and become more productive if everyone is paying attention instead of typing emails or texting on their iPhone or Nexus One that’s sitting in their laps.  You are guilty of this, admit it (we all are).

Location Based Check-Ins

I had breakfast this past week with some of the investors in the company Foursquare and they mentioned that they have began checking in about 3-5 minutes away from the venue that they are checking into.  Why?  It’s rude to have everyone check in at the table and waste the first few minutes of the meeting telling the world where they are.   The issue with checking in to a venue when you are enroute is that the venue may be closed or have no available seating, and I do not have an answer on how to deal with this.

If you are checking into a restaurant on Foursquare and in the comments section include the name of someone you are meeting (e.g. meeting @dherman76 for lunch), think twice.  What if the person that you are meeting didn’t want this particular lunch publicized for whatever reason?

Getting People’s Attention by Tagging Them in a Picture

If you have a Facebook account, I will wager that this has happened to you.  If you do this, then please stop.   How many times have you been alerted by Fb that you are tagged in a picture and when you go check out the picture, you are not present (and it may not even be a picture)?  This is just annoying.

Are You Really My Friend?

I think the most devalued word in the past decade was “friend.”  My friends are all people I’d grab a bite to eat with on the weekends, invite over for Saturday football, hangout with my wife/child with, and even get a little crazy with.  Inviting anyone/everyone to be your friend on Facebook devalues the word “friend” to many levels.  I turn down probably 10 friend requests for every one friend confirmation and I’m sure I still have not stuck to even my own guidelines.


Just because your shiny Macbook has a “Caps Lock” key, does not mean that you should type emails or tweets in capital letters.  As a reminder (as if you live under a rock), CAPITALIZED words are used for emphasis and in quite a few occasions, they are mean to be “yelling.”  Do yourself a favor and pretend that the “Caps Lock” key does not exist.

I’m not perfect and have broken many of the above etiquette rules.

I had some fun writing this and I’m sure I forgot quite a few.  Please write your comments/thoughts into the comments area.

You can follow me on twitter at @dherman76