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Cesar A. Brea bio at Force Five Partners

     

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20 posts categorized "Mobile"

May 20, 2013

"How to Engage Consumers in a Multi-Platform World?" See you May 22 @APPNATION bootcamp panel in NYC

Sponsorpay's Global Sales SVP Andy Bibby kindly asked me to join his NYC Internet Week APPNATION panel on Wednesday, May 22 2:15-3p at 82 Mercer.  Hope to see you there, watch this space for a recap of the conversation.

May 10, 2013

Book Review: Converge by @rwlord and @rvelez #convergebook

I just finished reading Converge, the new book on integrating technology, creativity, and media by Razorfish CEO Bob Lord and his colleague Ray Velez, the firm’s CTO.  (Full disclosure: I’ve known Bob as a colleague, former boss, and friend for more than twenty years and I’m a proud Razorfish alum from a decade ago.)

Reflecting on the book I’m reminded of the novelist William Gibson’s famous comment in a 2003 Economist interview that “The future’s already here, it’s just not evenly distributed.”  In this case, the near-perfect perch that two already-smart guys have on the Digital Revolution and its impact on global brands has provided them a view of a new reality most of the rest of us perceive only dimly.

So what is this emerging reality?  Somewhere along the line in my business education I heard the phrase, “A brand is a promise.”  Bob and Ray now say, “The brand is a service.”  In virtually all businesses that touch end consumers, and extending well into relevant supply chains, information technology has now made it possible to turn what used to be communication media into elements of the actual fulfillment of whatever product or service the firm provides.  

One example they point to is Tesco’s virtual store format, in which images of stocked store shelves are projected on the wall of, say, a train station, and commuters can snap the QR codes on the yogurt or quarts of milk displayed and have their order delivered to their homes by the time they arrive there: Tesco’s turned the billboard into your cupboard.  Another example they cite is Audi City, the Kinnect-powered configurator experience through which you can explore and order the Audi of your dreams.  As the authors say, “marketing is commerce, and commerce is marketing.”

But Bob and Ray don’t just describe, they also prescribe.  I’ll leave you to read the specific suggestions, which aren’t necessarily new.  What is fresh here is the compelling case they make for them; for example, their point-by-point case for leveraging the public cloud is very persuasive, even for the most security-conscious CIO.  Also useful is their summary of the Agile method, and of how they’ve applied it for their clients.

Looking more deeply, the book isn’t just another surf on the zeitgeist, but is theoretically well-grounded.  At one point early on, they say, “The villain in this book is the silo.”  On reading this (nicely turned phrase), I was reminded of the “experience curve” business strategy concept I learned at Bain & Company many years ago.  The experience curve, based on the idea that the more you make and sell of something, the better you (should) get at it, describes a fairly predictable mathematical relationship between experience and cost, and therefore between relative market share and profit margins.  One of the ways you can maximize experience is through functional specialization, which of course has the side effect of encouraging the development of organizational silos.  A hidden assumption in this strategy is that customer needs and associated attention spans stay pinned down and stable long enough to achieve experience-driven profitable ways to serve them.  But in today’s super-fragmented, hyper-connected, kaleidoscopic marketplace, this assumption breaks down, and the way to compete shifts from capturing experience through specialization, to generating experience “at-bats” through speedy iteration, innovation, and execution.  And this latter competitive mode relies more on the kind of cross-disciplinary integration that Bob and Ray describe so richly.

The book is a quick, engaging read, full of good stories drawn from their extensive experiences with blue-chip brands and interesting upstarts, and with some useful bits of historical analysis that frame their arguments well (in particular, I Iiked their exposition of the television upfront).  But maybe the best thing I can say about it is that it encouraged me to push harder and faster to stay in front of the future that’s already here.  Or, as a friend says, “We gotta get with the ‘90’s, they’re almost over!”

(See this review and buy the book on Amazon.com)


January 09, 2013

My New Book: Pragmalytics

I've written a short book.  It's called "Pragmalytics: Practical Approaches to Marketing Analytics in the Digital Age".  It's a collection and synthesis of some of the things I've learned over the last several years about how to take better advantage of data (Big and little) to make better marketing decisions, and to get better returns on your investments in this area.  

The main point of the book is the need for orchestration.  I see too much of the focus today on "If we build It (the Big Data Machine, with some data scientist high priests to look after it), good things will happen."  My experience has been that you need to get "ecosystemic conditions" in balance to get value.  You need to agree on where to focus.  You need to get access to the data.  You need to have the operational flexibility to act on any insights.  And, you need to cultivate an "analytic marketer" mindset in your broader marketing team that blends perspectives, rather than cultivating an elite but blinkered cadre of "marketing analysts".  Over the next few weeks, I'll further outline some of what's in the book in a few posts here on my blog.

I'm really grateful to the folks who were kind enough to help me with the book.  The list includes: Mike Bernstein, Tip Clifton, Susan Ellerin, Ann Hackett, Perry Hewitt, Jeff Hupe, Ben Kline, Janelle Leonard, Sam Mawn-Mahlau, Bob Neuhaus, Judah Phillips, Trish Gorman Clifford, Rob Schmults, Michelle Seaton, Tad Staley, and my business partner, Jamie Schein.  As I said in the book, if you like any of it, they get credit for salvaging it.  The rest -- including several bits that even on the thousandth reading still aren't as clear as they should be, plus a couple of typos I need to fix -- are entirely my responsibility.

I'm also grateful to the wonderful firms and colleagues and clients I've had the good fortune to work for and with.  I've named the ones I can, but in general have erred on the side of respecting their privacy and confidentiality where the work isn't otherwise in the public domain.  To all of them: Thank You!

This field is evolving quickly in some ways, but there are also some timeless principles that apply to it.  So, there are bits of the book that I'm sure won't age well (including some that are already obsolete), but others that I hope might.  While I'm not one of those coveted Data Scientists by training, I'm deep into this stuff on a regular basis at whatever level is necessary to get a positive return from the effort.  So if you're looking for a book on selecting an appropriate regression technique, or tuning Hadoop, you won't find that here, but if you're looking for a book about how to keep all the balls in the air (and in your brain), it might be useful to you.  It's purposefully short -- about half the length of a typical business book.  My mental model was to make it about as thick as "The Elements of Style", since that's something I use a lot (though you probably won't think so!).  Plus, it's organized so you can jump in anywhere and snack as you wish, since this stuff can be toxic in large doses.

In writing it amidst all the Big Data craziness, I was reminded of Gandhi's saying (paraphrased) "First they ignore you... then they fight you, then you win."  Having been in the world of marketing analytics now for a while, it seems appropriate to say that "First they ignore you, then they hype you, then you blend in."   We're now in the "hype" phase.  Not a day goes by without some big piece in the media about Big Data or Data Scientists (who now have hit the highly symbolic "$300k" salary benchmark -- and last time we saw it, in the middle part of the last decade in the online ad sales world, was a sell signal  BTW).  "Pragmalytics" is more about the "blend in" phase, when all this "cool" stuff is more a part of the furniture that needs to work in harmony with the rest of the operation to make a difference.

"Pragmalytics" is available via Amazon (among other places).  If you read it please do me a favor and rate and review it, or even better, please get in touch if you have questions or suggestions for improving it.  FWIW, any earnings from it will go to Nashoba Learning Group (a school for kids with autism and related disorders).

Where it makes sense, I'd be very pleased to come talk to you and your colleagues about the ideas in the book and how to apply them, and possibly to explore working together.  Also, in a triumph of Hope over Experience, my next book (starting now) will be a collection and synthesis of interviews with other senior marketing executives trying to put Big Data to work.  So if you would be interested in sharing some experiences, or know folks who would, I'd love to talk.

About the cover:  it's meant to convey the harmonious convergence of "Mars", "Venus", and "Earth" mindsets: that is, a blend of analytic acuity, creativity and communication ability, and practicality and results-orientation that we try to bring to our work. Fellow nerds will appreciate that it's a Cumulative Distribution Function where the exponent is, in a nod to an example in the book, 1.007.

 

 

July 03, 2012

#Microsoft Writes Off #aQuantive. What Can We Learn?

In May 2007, Microsoft paid $6 billion to buy aQuantive.  Today, only five years later, they wrote off the whole investment.  Since I wrote about this a lot five years ago (herehere and here), it prompted me to think about what happened, and what I might learn.  Here are a few observations:

1. 2006 / 2007 was a frothy time in the ad network market, both for ads and for the firms themselves, reflecting the economy in general.

2. Microsoft came late to the party, chasing aQuantive (desperately) after Google had taken DoubleClick off the table.

3. So, Microsoft paid a 100% premium to aQuantive's market cap to get the firm.

4. Here's the way Microsoft might have been seeing things at the time:

a. "Thick client OS and productivity applications business in decline -- the future is in the cloud."

b. "Cloud business model uncertain, but certainly lower price point than our desktop franchise; must explore all options; maybe an ad-supported version of a cloud-based productivity suite?"

c. "We have MSN.  Why should someone else sit between us and our MSN advertisers and collect a toll on our non-premium, non-direct inventory?  In fact, if we had an ad network, we could sit between advertisers and other publishers and collect a toll!"

5. Here's the way things played out:

a. The economy crashed a year later.

b. When budgets came back, they went first to the most accountable digital ad spend: search.  

c. Microsoft had a new horse in that race: Bing (launched June 2009).  Discretionary investment naturally flowed there.

d. Meanwhile, "display" evolved:  video display, social display (aka Facebook), mobile display (Dadgurnit!  Google bought AdMob, Apple has iAd!  Scraps again for the rest of us...). (Good recent eMarketer presentation on trends here.)

e. Whatever's left of "traditional" display: Google / DoubleClick, as the category leader, eats first.

f. Specialized players do continue to grow in "traditional" display, through better targeting technologies (BT) and through facilitating more efficient buys (for example, DataXu, which I wrote about here).  But to grow you have to invest and innovate, and at Microsoft, by this point, as noted above, the money was going elsewhere.

g. So, if you're Microsoft, and you're getting left behind, what do you do?  Take 'em with you!  "Do not track by default" in IE 10 as of June 2012.  That's old school medieval, dressed up in hipster specs and a porkpie hat.  Steve Ballmer may be struggling strategically, but he's still as brutal as ever. 

6. Perspective

a. $6 Big Ones is only 2% of MSFT's market cap.  aQuantive may have come at  a 2x premium, but it was worth the hedge.  The rich are different from you and me.  

b. The bigger issue though is how does MSFT steal a march on Google, Apple, Facebook? Hmmm. video's hot.  Still bandwidth constrained, but that'll get better.  And there's interactive video. Folks will eventually spend lots of time there, and ads will follow them. Google's got Hangouts, Facebook's got Facetime, Apple's got iChat... and now MSFT has Skype, for $8B.   Hmm.

7. Postscripts:

a. Some of the smartest business guys I worked with at Bain in the late 90's (including Torrence Boone and Jason Trevisan) ended up at aQuantive and helped to build it into the success it was.  An interesting alumni diaspora to follow.

b. Some of the smartest folks I worked with at Razorfish in the early 2000's (including Bob Lord) ended up at aQuantive. The best part is that Microsoft may have gotten more value from buying and selling Razorfish (to Publicis) than from buying and writing off the rest of aQuantive.  Sweet, that.

c. Why not open-source Atlas?

February 02, 2012

Please Help Me Get Listed On The #Google #Currents Catalog. And Please ReTweet!

Hi folks, I need a favor.  I need 200 subscribers to this blog via Google Currents to get Octavianworld listed in the Currents catalog.  If you're reading this on an iPhone, iPad, or Android device, follow this link:

http://www.google.com/producer/editions/CAow75wQ/octavianworld

If you are looking at this on a PC, just snap this QR code with your iPhone or Android phone after getting the Currents app.

 

Img

 



Here's what I look like on Currents:

 

Photo

 

 

What is Currents?  If you've used Flipboard or Zite, this is Google's entry. If you've used an RSS reader, but haven't used any of these yet, you're probably a nerdy holdout (it takes one to know one).  If you've used none of these, and have no idea what I'm talking about, apps like these help folks like me (and big media firms too) publish online magazines that make screen-scrollable content page-flippable and still-clickable.  Yet another distribution channel to help reach new audiences.  

Thank you!

January 06, 2011

#Google Search and The Limits of #Location

I broke my own rule earlier today and twitched (that's tweeted+*itched -- you read it here first) an impulsive complaint about how Google does not allow you to opt out of having it consider your location as a relevance factor in the search results it offers you:

Epic fail

I don't take it back.  But, I do think I owe a constructive suggestion for how this could be done, in a way that doesn't compromise the business logic I infer behind this regrettable choice.  Plus, I'll lay out what I infer this logic to be, and the drivers for it, in the hope that someone can improve my understanding.  Finally, I'll lay out some possible options for SEO in an ever-more-local digital business context.

OK, first, here's the problem.  In one client situation I'm involved with, we're designing an online strategy with SEO as a central objective.  There are a number of themes we're trying to optimize for.  One way you improve SEO is to identify the folks who rank / index highly on terms you care about, and cultivate a mutually valuable relationship in which they eventually may link to relevant content you have on a target theme.  To get a clean look at who indexes well on a particular theme and related terms, you can de-personalize your search.  You do this with a little url surgery:

Start with the search query:

http://www.google.com/search?q=[theme]

Then graft on a little string to depersonalize the query:

http://www.google.com/search?q=[theme]&pws=0

Now, when I did this, I noticed that Google was still showing me local results.  These usually seem less intrusive.  But now, like some invasive weed, they'd choked off my results, ranging all the way to the third position and clogging up most of the rest of the first page, for a relatively innocuous term ("law"; lots of local law firms, I guess).  

Then I realized that "&pws=0" tells Google to stop rummaging around in the cookies it's set on my browser, plus other information in my http requests, and won't help me prevent Google guessing / using my location, since that's based on the location of the ISP's router between my computer and the Google cloud.

 Annoyed, I poked around to see what else I could do about it.  Midway down the left-hand margin of the search results page, I noticed this:

Google Search Location Control

 

So naturally, my first thought was to specify "none", or "null", to see if I could turn this off.  No joy. 

Next, some homework to see if there's some way to configure my way out of this.  That led me to Rishi's post (see the third answer, dated 12/2/2010, to the question).  

Unbelieving that an organization with as fantastic a UI aesthetic -- that is to say, functional / usable in the extreme -- as Google would do this, I probed further. 

First stop: Web Search Help.  The critical part:

Q. Can I turn off location-based customization?

A. The customization of search results based on location is an important component of a consistent, high-quality search experience. Therefore, we haven't provided a way to turn off location customization, although we've made it easy for you to set your own location or to customize using a general location as broad as the country that matches your local domain...

Ah, so, "It's a feature, not a bug." :-)

...If you find that your results for a particular search are more local than what you're looking for, you can set your location to a broader geographical area (such as a country instead of a city, zip code, or street address). Please note that this will greatly reduce the amount of locally relevant results that you’ll see. [emphasis mine]

 Exactly!  So I tried to game the system:

Google Search Location Control world

Drat!  Foiled again.  Ironic, this "Location not recognized" -- from the people who bring us Google Earth!

Surely, I thought, some careful consideration must have gone into turning the Greatest Tool The World Has Ever Known into the local Yellow Pages.  So, I checked the Google blog.  A quick search there for "location", and presto, this. Note that at this point, February 26, 2010, it was still something you could add.  

Later, on October 18, 2010 -- where I have I been? -- this, which effectively makes "search nearby" non-optional:

We’ve always focused on offering people the most relevant results. Location is one important factor we’ve used for many years to customize the information that you find. For example, if you’re searching for great restaurants, you probably want to find ones near you, so we use location information to show you places nearby.

Today we’re moving your location setting to the left-hand panel of the results page to make it easier for you to see and control your preferences. With this new display you’re still getting the same locally relevant results as before, but now it’s much easier for you to see your location setting and make changes to it.

(BTW, is it just me, or is every Google product manager a farmer's-market-shopping, restaurant-hopping foodie?  Just sayin'... but I seriously wonder how much designers' own demographic biases end up influencing assumptions about users' needs and product execution.)

Now, why would Google care so much about "local" all of a sudden?  Is it because Marissa Mayer now carries a torch for location (and Foursquare especially)?  Maybe.  But it's also a pretty good bet that it's at least partly about the Benjamins.  From the February Google post, a link to a helpful post on SocialBeat, with some interesting snippets: 

"Location may get a central place in Google’s web search redesign"

Google has factored location into search results for awhile without explicitly telling the user that the company knows their whereabouts. It recently launched ‘Nearby’ search in February, returning results from local venues overlaid on top of a map.

Other companies also use your IP address to send you location-specific content. Facebook has long served location-sensitive advertising on its website while Twitter recently launched a feature letting users geotag where they are directly from the site. [emphasis mine]

Facebook's stolen a march on Google in the social realm (everywhere but Orkut-crazed Brazil; go figure).  Twitter's done the same to Google on the real-time front.  Now, Groupon's pay-only-for-real-sales-and-then-only-if-the-volumes-justify-the-discount threatens the down-market end of Google's pay-per-click business with a better mousetrap, from the small biz perspective.  (BTW, that's why Groupon's worth $6 billion all of a sudden.)  All of these have increasingly (and in Groupon's case, dominantly) local angles  where the value to both advertiser and publisher (Facebook / Twitter / Groupon) are presumably highest.

Ergo, Google gets more local.  But that's just playing defense, and Eric, Sergey, Larry, and Marissa are too smart (and, with $33 billion in cash on hand, too rich) to do just that.

Enter Android.  Hmm.  Just passed Apple's iOS and now is running the table in the mobile operating system market share game.  Why wouldn't I tune my search engine to emphasize local search results, if more and more of the searches are coming from mobile devices, and especially ones running my OS?  Yes, it's an open system, but surely dominating it at multiple layers means I can squeeze out more "rent", as the economists say?

The transcript of Google's Q3 earnings call is worth a read.

Now, back to my little problem.  What could Google do that would still serve its objective of global domination through local search optimization, while satisfying my nerdy need for "de-localized" results?  The answer's already outlined above -- just let me type in "world", and recognize it for the pathetic niche plea that it is.  Most folks will never do this, and this blog's not a bully-enough pulpit to change that. Yet.

The bigger question, though, is how to do SEO in a world where it's all location, location, location, or as SEOmoz writes

"Is Every Query Local Now?" 

Location-based results raise political debates, such as "this candidate is great" showing up as the result in one location while "this candidate is evil" in another.  Location-based queries may increase this debate.  I need only type in a candidate's name and Instant will tell me what is the prevailing opinion in my area.  I may not know if that area is the size of a city block or the entire world, but if I am easily influenced then the effect of the popular opinion has taken one step closer (from search result to search query) to the root of thought.   The philosphers among you can debate whether or not the words change the very nature of ideas.

Heavy.

OK, never leave without a recommendation.  Here are two:

First, consider that for any given theme, some keywords might be more "local" than others.  Under the theme "Law", the keyword "law" will dredge up a bunch of local law firms.  But another keyword, say "legal theory", is less likely to have that effect (until discussing that topic in local indie coffee shops becomes popular, anyway).  So you might explore re-optimizing for these less-local alternatives.  (Here's an idea: some enterprising young SEO expert might build a web service that would, for any "richly local" keyword, suggest less-local alternatives from a crowd-sourced database compiled by angry folks like me.  Sort of a "de-localization thesaurus".  Then, eventually, sell it to a big ad agency holding company.)

Second, as location kudzu crawls its way up Google's search results, there's another phenomenon happening in parallel.  These days, for virtually any major topic, the Wikipedia entry for it sits at or near the top of Google's results.  So, if as with politics, now too search and SEO are local, and much harder therefore to play, why not shift your optimization efforts to the place that the odds-on top Google result will take you, if theme leadership is a strategic objective?

 

PS Google I still love you.  Especially because you know where I am. 

 

April 13, 2010

MITX Panel: "Integrating Cross-Channel Customer Experiences" (April 29, 2010)

On the morning of April 29 I'll be moderating a MITX panel discussion titled "Integrating Cross-Channel Customer Experiences", in Cambridge, MA (Kendall Square).  More here, more posts to follow.  Hope to see you there!

March 12, 2010

#Adobe: Duct Tape for the "Splinternet"

(Previously titled: "Adobe: Up In The Air")

As folks line up for the iPad, SXSW rages, and the Splinternet splinters, if you own a smartphone or plan to own one, or a tablet, or if you're about to commission an app for one of these platforms, this post is for you.

A couple of years ago, Adobe seemed to have positioned itself smartly for global domination.  The simple logic:

  • Online experiences becoming richer
  • Adobe makes tools for rich experiences (Flash, Flex, Air)
  • Ergo, Adobe becomes richer

Or for you Mondrian fans, the visual version of Adobe's "All Mine!"

A1

Oh that it were that simple.  So, Apple, also vaguely interested in rich immersive experiences as its path out of the hip hardware niche toward intergalactic domination, plays the digital Soup Nazi: "No Flash support for you!"  Again, for the Visualistas:

A2
The nerve!  As if that weren't bad enough, there are those pesky evolving standards to stay ahead of.  HTML 5 now rides into town to save the Internet garden from the weedy assault of proprietary browser plugins (Flash, Gears, Silverlight) for supporting rich experiences (read as: need more client-side processing and storage than HTML 4 + browsers could offer).  Like any abstraction, it has performance compromises.  But, with powerful friends behind it with a shared interest in taking down the de facto rich experience standard -- Flash is on basically every non-mobile browser out there -- HTML 5 will get better, if like any standard, slowly.  The picture:

A3
For you conspiracy theorists, a Smoking Gun:

A5

Now, those Adobe folks are pretty smart too, and they aren't sitting still.  Basically, their strategy amounts to two things:

  • "Duct tape for the Splinternet", aka "Son Of Java" -- the ability to develop your app in their tools, and then compile them for whatever platform you'd like to publish to, including Apple's.  Remember "Write once, run anywhere?"  Of course you give a few things up -- some features, some performance.  But if you're a publisher, pretty tempting! 
  • Do what Microsoft did a few years ago -- "Embrace and Extend".  Basically, agree to play nicely with the non-threatening parts of the HTML 5 spec while continuing to extend the feature set and performance of Flash so it's preferred on the margin as the environment for the coolest rich experiences. For example, one way -- now that Adobe owns Omniture -- to extend the feature set might be to embed analytic tracking into the application layer.

Here's a good interview Rob Scoble did with the Adobe guys where they explain all this in 22 minutes.  Here's my graphic translation of the interview:

A4
 
A while ago I wrote a post on strategy in the software business that forms the frame for how I try to understand what's happening.  I think it still makes sense, but I'm eager to hear suggestions for improving it!

So what?  What does this mean for the publishers who are trying to figure out how to respond to the Splinternet?  I think it makes sense, as always, to start with The User.  Is what you are trying to do for him or her sufficiently exotic (and rewardably so) that you need the unique capabilities of each smartphone's / tablet's native OS / SDK?  Or is the idea sufficiently "genius" that you don't need to tart it up with whizziness, and can accept certain limitations in exchange for "Write once, run anywhere?"

I'd predict that Adobe will make common cause with some hardware manufacturer(s) -- HP, anyone?  It will be interesting to see what Adobe's willing to trade off for that support.

Where's Microsoft in all this?

January 29, 2010

Ecommerce On The Edge In 2010 #MITX

Yesterday morning I attended MITX's "What's Next For E-Commerce" Panel at Microsoft in Cambridge.  Flybridge Capital's Jeff Bussgang moderated a panel that included Shoebuy.com CEO Scott Savitz, CSN CEO Niraj Shah, Mall Networks CEO Tom Beecher,and Avenue 100 Media Solutions CEO Brian Eberman.

The session was well-attended and the panelists didn't disappoint. Across the board they provided a consistent cross-section of the sophistication and energy that characterizes life 2 SDs the right on the ecommerce success curve.

My notes and observations follow. But first, courtesy of Jeff, a quiz (answers at the end of the post):

1. Name the person, company, and city that originated the web-based shopping cart and secure payment process?

2. Name the person, company, and city that originated affiliate marketing on the web?

3. Name the largest email marketing firm in the world, and the city where it's headquartered?

Jeff opened by asking each of the panelists to talk about how they drive traffic, and how they try to distinguish themselves in doing so.

Brian described (my version) what his firm does as "performance marketing in the long tail", historically for education-sector customers (for- and non-profit) but now beyond that category. What that means is that they manage bidding and creative for 2 million less-popular keywords across all the major search engines for their customers. Their business is entirely automated and uses sophisticated models to predict when a customer should be willing to pay price X and use creative Y for keyword Z to reel in a likely-profitable order. The idea is that the boom in SEM demand has driven prices way up for popular keywords, but that there are still efficient marketing deals to be mined in the "long tail" of keyword popularity (e.g.,structured collaboration").

Niraj noted that there's an increasing returns dynamic in the SEM channel that raises entry barriers for upstarts and helps firms like CSN preserve and expand their position.  Namely, as firms like his get more sophisticated about conversion through scale and experience, they can afford to pay higher prices for a given keyword than smaller competitors can, and can reinvest in extending their SEM capabilities.  CSN now has a 10-person search marketing team within its total staff of 500. Since SEM is, to some degree, a jump-starter for firms that don't yet have a web presence sufficient to drive traffic organically, this edge is a powerful competitive weapon.  CSN is up to $200 million in annual revenues, and now manages the online furniture stores for folks like Walmart.

Scott sounded a different note, with similar results.  Shoebuy has focused more on cultivating its relationship with its existing customers and on Lifetime Value -- including referrals.  This focus has had a salutary effect on SEO, allowing them to rely less on SEM as it gets pricier.  Last year Shoebuy experienced double-digit top line growth and hit 8M uniques for December's shopping season, while realizing its lowest marketing expense as a percentage of sales since 2002.  They've continued to plow the savings into a better overall customer experience.  One way Shoebuy guides this reinvestment is through extensive use of Net Promoter-based surveys.  They keep the surveys brutally simple:  1)"Were you satisfied?" 2)"Whould you shop with us again?" 3)"Would you recommend us?".  Then they calculate the resulting NP scores to different things they try in their marketing mix, to give them a more nuanced insight than the binary outcome of an order can provide.

Tom described how while Mall Networks' traffic is "free" -- it all comes from their loyalty program partners' sites (e.g. Delta Skymiles website awards redemption page) -- they still have to jockey for Mall Networks' placement on those pages. (Though Tom was too polite to say so, the processes for deciding who goes where on popular pages is often a blood sport and ripe in most organizations for a more structured, rational approach.)

Former Molecular founder and CEO Ralph Folz asked about display -- is that making a comeback?  Brian indicated the lack of performance and the lack of placement control through ad networks made that a highly negative experience.  He did note that they are now experimenting with participation in real-time-bidding through ad exchanges for inventory that ad networks make available, sometimes for time windows only a hundred milliseconds long.  Jeff reinforced the emergence of "RTB" and mentioned MIT Prof. Ed Crawley's Cambridge-based DataXu (which Flybridge has invested in) as a leader in the field.

Affiliate marketing came up next.  Tom explained the basics (in response to a question): each of the 600 stores in Mall Networks stable pays Mall Networks, say for example, a 10% commission on orders that come through Mall Networks.  Mall Networks gives a chunk to the members of various loyalty programs that shop through it -- say 3-5% of the value of the order; some goes to the loyalty programs themselves, as partial inducements for sending traffic to Mall Networks, and the rest goes to Mall Networks to cover costs and yield profits.

All the other panelists include affiliates in their marketing mix, and all appeared satisfied to have them play a healthy role.  Niraj specifically mentioned the ShareASale and Google Affiliate networks.  Jeff asked about everyone's frenemy Amazon; the answers were uniformly respectful: "they're a tough competitor, but they build general confidence and familiarity with the ecommerce channel, and that's good for everyone."  Niraj noted the 800 lb. gorilla nature of their category dominance: "They're at $20m and NewEgg is the next biggest pure play at $2B.  They're a fact of life. We just have to be better at what we focus on."

Someone in the audience raised email.  All of the panelists use it, with lists ranging from millions to hundreds of millions of recipients in size.  They noted that this traditional pillar of online marketing has now gotten very sophisticated.  In their world, they look well beyond top line metrics like open- and clickthrough rates to root-cause analysis of segment-based performance.  Re-targeting came up, and Niraj noted that for them, email and re-targeting weren't substitutes (as some have seen them) but in fact played complementary roles in their mix.  (Jeff explained re-targeting for the audience: using an ad network to cookie visitors to your site, and then serving them "please come back!" ads on other sites in the network they go to after they've abandoned a shopping cart or otherwise left your site.  A twist: serving ads inviting them to *your* site after they've abandoned one of your competitors' sites.  Hey, all's fair in love, war, and ecommerce...).  A common theme:  unlike most of the rest of the world, email teams at these leading firms are tightly integrated with other channels' operators to better integrate the overall experience, even to the point of shared metrics.

What about social?  Scott: "Building community is key for us.  We run contests -- "What are you hoping will be under your tree this Christmas?" -- to stimulate input from our customers.  And, while we have social media coordinators, many people here participate in channels like Twitter in support of our efforts."  Niraj: "Our PR team came up with a 'Living Room Rescue' contest which we did in partnership with [a popular] HGTV host [whose name escaped me -- C.B.].  We got six thousand entries; we used a panel of professional decorators to narrow the list to a hundred, and then used social voting to choose a winner.  We publicized the contest, and it took on a life of its own, as local papers tried to drum up support for their local [slobs -- my word, not Niraj's].  While we couldn't / didn't measure conversion directly from this campaign, our indirect assessment was that it had a great ROI."  Jeff observed that social's potential seems greater when the object of the buzz is newsworthy.

It was a short leap from this to a question about attribution analysis, the simultaneous-dream-and-nightmare-du-jour for web analytics geeks out there.  Brian was surprisingly dismissive.  In his experience (if I understood correctly), he's seeing only up to 20%, and usually only 5-10% of order-placing customers touch two or more properties they source clicks from, across the broad landscape they cover, across a time frame ranging from a day to a month long.  "In the end, only a couple of dollars would shift from one channel to another if we did attribution analysis, so in general it's not worth it."  We chatted briefly after the panel about this; there are large ticket, high-margin exceptions to this rule (cars).  I need to learn about this one some more, it surprised me.

Mobile!  Is it finally here?  Scott reports that 6-9 months ago *customers* finally began asking for it (as opposed to having it pushed by vendors), so now they have a Shoebuy.com iPhone app.  Jeff noted that customers are rolling their own mobile strategies -- some folks are now going into (say) Best Buy, having a look at products in the flesh, then checking Amazon for the items and buying them through their iPhone if the price is right.  So, your store is now Amazon's showroom.  If you can't find something, or didn't even know you wanted it, but happen to stray near a store carrying it, location-based services will push offers at you -- and the offers may come from competitors.  (Gratuitous told-you-so here.)  Niraj:  "Say you're in Home Depot.  You want a mailbox.  Their selection is 'limited' [his description was more colorful]. We have 300 to choose from.  Wouldn't you want to know that?" Jeff:  Soon we'll also see the death of the checkout line: you'll take a picture of the barcode on the object of your desire, your smartphone will tell the store's POS system about it, and the POS system will send back a digital receipt you can show someone (or in the future, something) on your way out of the store. 

With all these channels in use, I asked how often they make decisions to reallocate investments across (as opposed to within) them -- say from search to email, as opposed to from keyword to keyword.  Brian: "Every day, each morning.  Some things -- like affiliate relationships -- may take 3-4 days to unwind.  But the optimization is basically non-stop."  Later we talked about the parallels with Wall Street trading floors.  For him, the analogy is apt.  Effectively he's a market-maker, only the securities are clicks, not stocks.  It's now reflected in their recruiting: many recent hires are former Wall Street quants.

A final note: The cultures in these shops are intensely customer-focused, flat, and data-driven.  Scott reads *every one* of the hundreds of thousands (yes you read right) of customer survey responses Shoebuy gets each year.  He also described the enthusiasm with which their customer service team embraced having all company communications to customers end with an invitation to email senior management with any concerns.  Niraj described CSN's floor plan:  500 people, no offices.  Everyone in the company takes a regular turn in customer service.  Everyone has access to the firm's data warehouse.  Brian told us about a digital display they have up in their offices showing hour-by-hour, source-by-source performance.  They also recently ran a "Query Day" in which everyone in the company -- including sales, finance, HR -- got training in how to use their databases to answer business questions.  Tom described that they “watch the cash register every minute, hour, day during the Christmas shopping season.”

This was a terrific session, and I've only captured half of it here.  Further comments / corrections / observations very welcome.

Quiz Answers:

1. MIT Prof. David K. Gifford, Open Market, Cambridge

2. Tom Gerace, BeFree, Cambridge

3. Constant Contact, Waltham

January 26, 2010

What's NYT.com Worth To You, Part II

OK, with the response curve for my survey tailing off, I'm calling it.  Here, dear readers, is what you said (click on the image to enlarge it):

Octavianworld nyt com paid content survey

(First, stats: with ~40 responses -- there are fewer points because of some duplicate answers -- you can be 95% sure that answers from the rest of the ~20M people that read the NYT online would be +/- 16% from what's here.)

90% of respondents would pay at least $1/month, and several would pay as much as $10/month. And, folks are ready to start paying after only ~2 articles a day.  Pretty interesting!  More latent value than I would have guessed.  At the same time, it's also interesting to note that no one went as high as the $14 / month Amazon wants to deliver the Times on the Kindle. (I wonder how many Kindle NYT subs are also paper subs getting the Kindle as a freebie tossed in?)

Only a very few online publishers aiming at "the general public" will be able to charge for content on the web as we have known it, or through other newer channels.  Aside from highly-focused publishers whose readers can charge subscriptions to expense accounts, the rest of the world will scrape by on pennies from AdSense et al

But, you say, what about the Apple Tablet (announcement tomorrow! details yesterday), and certain publishers' plans for it?  I see several issues:

  • First, there's the wrestling match to be had over who controls the customer relationship in Tabletmediaworld. 
  • Second, I expect the rich, chocolatey content (see also this description of what's going in R&D at the Times) planned for this platform and others like it to be more expensive to produce than what we see on the web today, both because a) a greater proportion of it will be interactive (must be, to be worth paying for), but also because b) producing for multiple proprietary platforms will also drive costs up (see for example today's good article in Ad Age by Josh Bernoff on the "Splinternet"). 
  • Third, driving content behind pay walls lowers traffic, and advertising dollars with it, raising the break-even point for subscription-based business models. 
  • Fourth, last time I checked, the economy isn't so great. 
The most creative argument I've seen "for" so far is that pushing today's print readers/ subscribers to tablets will save so much in printing costs that it's almost worth giving readers tablets (well, Kindles anyway) for free -- yet another edition of the razor-and-blade strategy, in "green" wrapping perhaps.

The future of paid content is in filtering information and increasing its utility.  Media firms that deliver superior filtering and utility at fair prices will survive and thrive.  Among its innovations in visual displays of information (which though creative, I'd guess have a limited monetization impact) is evidence that the Times agrees with this, at least in part (from the article on Times R&D linked to above):

When Bilton swipes his Times key card, the screen pulls up a personalized version of the paper, his interests highlighted. He clicks a button, opens the kiosk door, and inside I see an ordinary office printer, which releases a physical printout with just the articles he wants. As it prints, a second copy is sent to his phone.

The futuristic kiosk may be a plaything, but it captures the essence of R&D’s vision, in which the New York Times is less a newspaper and more an informative virus—hopping from host to host, personalizing itself to any environment.

Aside from my curiosity about the answers to the survey questions themselves, I had another reason for doing this survey.  All the articles I saw on the Times' announcement that it would start charging had the usual free-text commenting going.  Sprinkled through the comments were occasional suggestions from readers about what they might pay, but it was virtually impossible to take any sort of quantified pulse on this issue in this format.  Following "structured collaboration" principles, I took five minutes to throw up the survey to make it easy to contribute and consume answers.  Hopefully I've made it easier for readers to filter / process the Times' announcement, and made the analysis useful as well -- for example, feel free to stick the chart in your business plan for a subscription-based online content business ;-)  If anyone can point me to other, larger, more rigorous surveys on the topic, I'd be much obliged.

The broader utility of structuring the data capture this way is perhaps greatest to media firms themselves:  indirectly for ad and content targeting value, and perhaps because once you have lots of simple databases like this, it becomes possible to weave more complex queries across them, and out of these queries, some interesting, original editorial possibilities.

Briefly considered, then rejected for its avarice and stupidity: personalized pricing offers to subscribe to the NYT online based on how you respond to the survey :-)

Postscript: via my friend Thomas Macauley, NY (Long Island) Newsday is up to 35 paid online subs.