Tag Archives: kenny

Friday Ad & Marketing Technology Insights

I thought I’d write a post before the weekend set in.  This weekend is going to be a special one as my brother, whom some of you might know, is getting married tomorrow night to an awesome bride.  I could not be any more happier for him.

Back to the post…

Some interesting insights that I’ve been uncovering and/or thinking about over the past few months:

1.  Large publishers are becoming increasingly wary of Google.  I’ve spoken to two major publishers in the past 7 days as I’ve been doing some diligence for startups we’re looking at and they are increasingly becoming wary of Google’s power in the marketplace.  “Monopolistic” is a term that I keep hearing about Google and it’s one that I think holds some ground.  One of the main reasons why pubs are increasingly becoming worried about Google is the amount of both demand/supply side data that Google has… if they were playing cards in a casino, they would be the player and the dealer.  It’s a ridiculously powerful position to be in.

2.  Amazon.  I’ve bought dozens of books from them over the years, but now, I’m starting to buy a lot of advertising from them.  And quite a few other agencies and brands are as well.  Amazon is becoming a quiet power in the advertising marketplace.  Why? Intent.  I wrote a whole post on this in March 2012.  Amazon has a search engine which it acquired and has millions of people with real intent coming to their platform.  Intent data married to advertising can yield very positive results.  A big reason why we invested in Yieldbot (not currently in relationship with Amazon).

3.  Social Media Monitoring.  We see a new platform in the social media monitoring space every other week or so.  We’ve not invested in this space because we feel that these platforms are becoming commoditized and are table stakes.  Yes, there has been some value created (i.e. acquisition of Radian6) but that’s few and far between.  In order for a platform to generate real value for shareholders, it needs significant market share at a fair price point.  I’ve not seen any significant breakout companies yet.

4.  Where are the $30-100MM ad tech and marketing technology companies?  Many companies I’ve seen lately are all $1-10MM organizations.  There is nothing wrong with that, but I’d like to see more ad tech companies maturing their business.  Randall Rothenberg has a hyperbolic quote in a Forbes interview he did with John Battelle that offers one reason why, but as many people point out, VC’s don’t force exits generally.

Battelle: What are the biggest obstacles in our industry?

Rothenberg: Venture capitalists. They create new businesses, but they incentivize companies toward short-term cash-out potential, not long-term growth. So if I were a marketer, my worst problem is chaos–not knowing what will make a difference. Venture capital has supported and financed a bunch of chaos.

5.  The next 12 months are going to drive returns to shareholders (including entrepreneurs) and continued investing will occur.  I’ve had first hand conversations with many companies who are sniffing around the marketing & advertising technology industries who are looking to acquire.  We recently saw this with Salesforce/Buddy Media ($800MM-$1bln +), SAS Institute/Ai Match, etc.  I think there is going to be another 3-4 deals by the time 2012 is over.

Just some food for thought going into this weekend.

People ARE and WANT to Watch… (an interesting look at television)

Beth Snyder Bulik wrote a great article posted on AdAge.com entitled It’s Not What Everyone’s Watching that Counts… It’s Where. Her article was based off of recent surveys that were released by The Conference Board, TNS, and In-Stat. Bulik’s article talks about that people are still watching shows, just not in the traditional sense of in front of the television. As digital media penetrates people’s lives, they adapt media into their own lifestyle. Traditional television shows are being adapted into people’s lives by an increasing viewership number online.

TV Chart… and it’s not all talk. My wife watches Greys Anatomy and other shows online. If she misses a show on television and doesn’t feel like going to the den to watch it on the DVR (we only have one in the house), she watches the show a few days later on her iBook or on her PC upstairs in her home office. She’s not the only person who is doing this, as almost 16% of internet households watch TV online, which is almost double the number from a year ago, according to the Conference Board and TNS’s TV online study. My mother also just found this and she’s been watching on her humble PC. Trust me, she’s not techno wizard.

Internet television isn’t anything new as it has been around for years and unless you live under a rock, Joost was all the rage about 9 months ago (Facebook stole their thunder).

There are different revenue models that a company could apply to Internet television and they include:

  • Brand advertising (pre/post/in-stream commercials)
  • Subscription
  • Per show fee
  • Integrated advertising (placement within the show, community features, etc)

Are users willing to pay?

“And it’s free content that’s leading the way. We found that few people are willing to pay.” said Lynne Franco, director of the Conference Board Consumer Research Center.

Bulik further comments: While free content could bode as bad news for TV programmers and networks, one possibility is consumer support for ad-supported content. Although one-third of viewers said they watch online to avoid commercials (the No. 2 reason given behind convenience, which was No. 1 reason to watch online by 60% of respondents), they’re not entirely averse to video ads. Recent consumer research from Frank N. Magid Associates found that consumers said they would be most likely to sit through an ad at the beginning of a video they wanted to watch, vs. in the middle, at the end or in between two separate videos. And they like them short: 46% prefer ads to be 10 seconds or shorter, with another 26% preferring ads that are 11 to 15 seconds, according to the Magid survey.

My brother works over at Next New Networks and leads their automotive content. NNN has a different spin on the online video market: they go after niche content areas that are desired by viewers, but not enough of an audience that would substantiate a show on a major network television channel. They are building out some short form content (6 mins) for FastLaneDaily and it’s working. Advertisers are uncovering these niche audiences and celebrities are starting to appear in their shows.

Most of us love television but traditional television may not fit in everyone’s lives the way it used to. Sitting around the television on a Sunday evening as a family may not be a weekly occurance like it once was, but ways of harnessing these shows/video in a viewer-driven socity is what everyone is trying to figure out. TV was once also solidary as a one way communications medium. There is no reason it can’t be a two way communications medium and the real winners for the future will find ways to build community functions and allow people to interact with the content itself. I’m not saying that mainstream of people will want to create mashups or generate content themselves, but I would ideally like to see a way that consumers can take TV and make it a part of their life, instead of forming your own life around television (must be home by 10pm to see XYZ show).

The world isn’t waiting for us, and neither is television. It’s adapting and the research is showing. Love it.

** Please note that the chart above comes from a BusinessWeek report from January 8, 2007. The article can be found here. A new report from Wall Street analyst Safa Rashtchy at Piper Jaffray outlines the rapid adoption of online video and the subsequent decline of TV viewing among online users. One of the interesting points is that TV networks sites are increasingly popular and are the second most popular destinations, after YouTube.

Watching YouTube on 67 Inches

We spent Saturday night watching my brother, Kenny, play Forza 2 for Xbox 360 on our HD-TV. We didn’t exactly plan the evening that way, but Kenny took to the game and it was fun to watch him customize his car and kick butt around the virtual race track. For me, it was fascinating to see this amazing game (graphics are incredible) and also, to take-in all the brand integration that was strategically placed within the game…it felt so real! Being that I’m in the in-game advertising business, I use a fine tooth comb whilst analyzing, but have to say, the game was done really well.

YouTube logoJamie, Sherri and myself managed to convince Kenny to watch some YouTube on the television by going through our AppleTV. I’ve never watched YouTube on a large scale television, only on my computer monitor. We spent about an hour or so watching the top clips and searching for specific videos and have to say…. we were thoroughly entertained. Individually, we had seen clips in the past that we wanted to share with each other and we had a great forum to do so – I can assure you that there was lots of laughing and amazement. The clips we watched ranged from breakdancers to FastLaneDaily clips. We also watched someone draw the Mona Lisa in MS Paint.

This was my first foray into watching YouTube on the television… and I’d certainly do it again. Of course the quality of the videos aren’t great as they were amateur, but that’s the nature of the beast. The quality cannot improve unless the source material gets better. I was amazed to see some of the numbers on the clips…17MM views here, 5MM views there, and 10MM here. That’s a lof of views! If you had a $20CPM on video ads at a 50% sell-thru, you’d be generating $50,000 -> $170,000… more than enough to produce those clips.

We’re at a fascinating stage now with digital media and content creation… it’s awesome to see that distributing content is becoming easier and with that, you’ll see more folks creating content.