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Cesar A. Brea bio at Force Five Partners

     

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19 posts categorized "Video"

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?

January 07, 2011

Great Moments in 4G Smartphone Marketing: "These Go To 11"

Announced yesterday:

I've long felt that Nigel Tufnel would make a great pitchman. Maybe his day has come?

 

September 17, 2009

#Adobe + #Omniture: Further Thoughts ( #Analytics )

I've been following the Web Analytics Forum on Yahoo! -- David Simmons' ideas here are especially thoughtful -- and I listened to the Q3 Adobe con call.  Plus last night at Web Analytics Wednesday in Cambridge I had a chance to talk about it with VisualIQ CTO Anto Chittilappilly and Visible Measures' Tara Chang.  Here are some further ideas based on what I've read and heard so far:

  • Rich media -- video, interactive ads, etc. -- are a growing piece of the Internet experience. (Google's rumored acquisition of Brightcove reflects this.)  (The flip side: Semphonic CEO Gary Angel writes that "It's taking a long time, but HTML is dying.")
  • Since they're growing, tracking user interactions with them effectively is increasingly important, not just on the Internet but across platforms, and as the CIMM challenge to Nielsen suggests, not yet well addressed.
  • User tracking in rich media platforms like Flash is more granular and more persistent than cookie-based tracking (David Simmons explains how and recommends Eric Peterson's Web Site Measurement Hacks for more).
  • But, support for event-based tracking of users' interactions in rich internet media in existing web analytics platforms is in its infancy (though vendors say otherwise).
  • So, publishers want tighter, simpler integration of event-based tracking.
  • In the con call, Adobe CEO Shantanu Narayen mentions the framework "Create - Deploy - Optimize" as a way to understand their overall product roadmap vision.
  • Adobe has the "Create" (e.g., Photoshop, this part of their business is ~60% of their revenues) and "Deploy" (e.g., Flash Server / Flash Player) pieces covered.  But "Optimize" was still uncovered, up until this announcement.
That's the product strategy logic.  The financial logic:
  • Adobe is too dependent on the "Create" leg of their stool, and hasn't been able to monetize the "Deploy" piece as much as they might have hoped -- removing  license fees from the Open Screen Project is one recent example of this limitation.  So they're betting that "Optimize" has legs, and that buying Omniture in this economic climate at ~5x revenues is good timing.
  • Adobe's traditional software-licensing business model has gotten crushed year to year.  Omniture's revenues are >90% recurring subscriptions based on a SAAS model.  Adobe revenues (~$3B) are 10x Omniture's but the enhanced value proposition of the A-O integration and cross-selling through Adobe's sales force will accelerate O's growth.  Over the next 2-3 years, this will help to reduce the volatility of A's revenues / revenue growth.

What's ahead?  One direction, as I've previously discussed, is that the workflows associated with "Create-Deploy-Optimize" are increasingly complex, and that platforms that support these workflows in a simple, more integrated way will become important to have.  Managing these processes through hairballs built with Excel spreadsheets scattered across file servers just won't cut it.

Postscript: Eric Peterson's take.  And more from him.  The gist -- not so high on Omniture's relative value to customers and the experience of working with them, and not sure why Adobe did this.  Anil Batra has some interesting ideas for product directions that emerge from the combination.

March 25, 2009

MITX Measurement 2.0 Panel Recap

Yesterday morning I went to a MITX panel discussion titled "Measurement 2.0: How to Tell the Full Digital Story".  With 110 folks, it was SRO at Google's pad in Kendall Square.  Charlie Ballard from One to One Interactive (sponsor of other cool MITX panels) moderated, and the other panelists included Paul Botto , head of GA Enterprise Sales at Google, Morris Martin from Microsoft's Atlas Institute (that's him in the banner picture), Visible Measures' VP of Marketing and Analytics Matt Cutler, Mike Schneider from Allen & Gerritson, and my friend and colleague Ms. Perry Hewitt, CMO at the Cambridge-based social media measurement firm Crimson Hexagon.

Notwithstanding that it's so very 2004 to call anything "2.0" these days, Mike was correct to point out that before we can expect dollars to move toward "Web 3.0", we've got to get Measurement 2.0 right first.  Charlie usefully characterized that if "1.0" is about optimizing within channel silos, "2.0" is, in this context, about optimizing across them.  Whether you like the moniker or not, I agree (not uniquely) with his premise.  

Paul pushed the point further, arguing that to really understand a customer's experience, we need to move beyond a page-based measurement model to an event-based one.  This is especially necessary in a rich media world (think YouTube) where an experience spanning interaction across multiple rich media objects can happen within the context of a single page. (Whether or not you agree, it's provoking to think that while some pressures push us to think more macro (multi-channel), other technological developments push us to go more micro (intra-page).  Wonder if the same design concepts (pathways, handoffs) apply "fractally"?)  

However, Mike took the view that we should be careful about introducing new more exotic frameworks into a world where standards are such that we still can't agree on what defines a visit.  Matt pointed out that event tracking generates 10-100x the data, further complicating matters.  I'm in between: if you got a whole lotta Flash, you have no choice but to implement event-based measurement. Nonetheless, if we can't agree on standards, you give up benchmarking, because your own site (and perhaps others your agency has implemented) will be your only apples-to-apples point of reference.  (Paul indicated that event-based measurement is an invitation-only feature of GA.  I asked for one, and will report what I learn when I get to try it.)

Charlie kicked off the questions for the panel by referring to the multi-channel-measurement tool ur-text, Suresh Vittal's (Forrester Research report "Defining The Online Marketing Suite".  Specifically he asked if the centralized, "command and control" notion of tracking folks through a purchase pipeline across multiple channels still makes sense.  

Matt's take was that the explosive rise of social media has pushed the centralized model toward obsolescence (so soon!). He argued that with the "conversation" happening in places that don't (yet) let you slip measurement tags into their "vessels", marketing needs to be more about tracking what's happening out there using tools (like Perry's firm's) that Suresh didn't then cover but since has.  "Today, the center of gravity has moved, and marketing is much more like portfolio management", said Matt.   He then pointed to a silver lining opportunity: getting value from what he called "big data".  He described how in some presentations, he's successfully used tagcrowd.com to crunch a big bolus of comments on a video to infer / visually convey their collective meaning.

One question is, if we take his comments literally, are we back to local optimization of social stovepipes?  And, "big data" is valuable if you've got big comments.  What if no one comes to your party? In Long Tail space, no one can hear you scream. (Aside: this puts a premium on understanding viral propagation of your social media efforts as part of your portfolio management.)

Morris argued that the central model's value is just beginning to be realized, as it enables us to better understand the value of "upstream" investments and slowly ease away from over-emphasizing the value of being (if you're a publisher) / spending on (if you're an advertiser) the "last click".  Setting aside that Atlas is a display ad network with a natural interest in making this point, others have confirmed that display campaigns lift searches 15-20%.  Knowing this value, I think the opportunity here is to do the math to determine the "effective CPA" of an extra dollar to search vs. an extra dollar to display.

Charlie next asked, "How do we move from measurement to optimization?"  

Morris asserted that you've got to be able to track everything first, and that you shouldn't try to retrain media planners to work with a different process -- it's just too hard.  He pointed us to Atlas' Engagement Mapping tool, (launched a year ago, here's a review) as one option for optimizing within existing constructs.

Perry noted that one client has told her that her thinking about optimization has shifted, from "measure twice, cut once" to "measure twice, cut fast" -- the point being that media usage patterns are shifting quickly enough that a rough optimum appropriate to today is better than a perfect optimum appropriate to patterns we saw six months ago. Perry continued, "agility is the core competence in optimization efforts today."

Picking up Perry's thread, Matt urged the audience to think carefully about what data to collect.  He distinguished between "just-in-time" versus "just-in-case" data collection efforts.  "A bigger regression won't help," he noted, observing that "Even if it's more accurate, if people can't understand it they're unlikely to be able to act on it."  He suggested focusing on a narrow set of metrics and trying to move the needle 10% first, then adding more complexity to your models.  And, as a way to avoid analysis paralysis, Mike advised starting with a likely story in mind to prove or disprove, rather than boiling the ocean (testing/ regressing everything against everything) to find "emergent stories".  Truly men after my own  heart.  

A logical extension of the points above, particularly Perry's, is to shift the relative importance of A/B testing and passive measurement, versus back-testing, for media mix modeling efforts.  Charlie moved to this question next, asking, "How far can it go?"

Paul pointed out great results they've had (using Google Website Optimizer, natch) optimizing the Picassa download page.  Testing 200 different versions, they settled on one that "none of us would have ever thought of" that drove downloads 30% higher.  Surprisingly, the words "free download" don't help.  And, for those who fear that testing curbs creative freedom, reducing us to no better than Shakespeare's Monkeys, Paul pointed out that ironically, the opposite has been true -- creative teams feel they don't have to "play it safe" and can explore more possibilities, knowing that testing will ultimately discipline the process.  (Of course, this is true when experiments are as small as having or not having "free" on your page, but gets harder as the creative execution gets more expensive.)

Charlie's next question: "What about brand-focused advertising measurement?"  Matt talked about how the emergence of online video and social media have brought the left and right brains together: in these media, it's now simultaneously possible to craft a story that traditional brand marketers love and to measure its impact at least better than before, if not yet well enough.  In particular, he told the story of a credit card company that syndicated a video widget and saw a big jump in applications from folks who viewed it.  Perry told the story of how semantic analysis of an online crafting community's conversations (about vinyl home decor -- go figure) is being recycled to shape creative execution of television spots for one of her firm's clients (Ahem Perry, interesting crowd you're hanging with).  Matt further pointed to opportunities for "viral packaging", like paying Blendtec $10k to ask "Will It Blend?" of your product after their clever YouTube experiment with the iPhone drove millions of views and hundreds of thousands of subscribers to Blendtec's channel.  Paul suggested folks try Google Insights for Search as a way of getting a better view of what's happening upstream.

Panelists suggested the following additional resources:


Q&A:

  • I asked about whether the assembled players had explored allowing members of social media services like FB and LinkedIn extend their member profiles to include "analytics tracking tags" fields, so members could track visits and interaction by others in content the members publish or syndicate there.  It seemed to me a win-win all around for advertisers, members, and social media platforms.  Answer, good idea in principle, but social media platforms still guard that data jealously and there are privacy concerns that folks like Google and Microsoft in particular are sensitive to.  Paul did note though that YouTube provides some of this data to branded channel customers today.  My view is that if I can track you, dear reader, in GA using the tag embedded on this page through the Typepad template that wraps this content, it won't be long before Facebook makes the same thing happen, since advertisers want/ will pay for that (indirectly via CPMs), and who knows, they might be able to get a buck or a few each month from publishers to whom that information is really valuable.
  • Another person asked about the validity of the "view-through" as a metric -- that is,  what credit do you give to display ads that aren't clicked on?  Here's an article that describes the issue further (I love the author's concluding sentence: "Something between 0 and 100 percent credit is appropriate, depending on the advertiser's unique environmental, programmatic, and analytic profile. Each advertiser has to find its own answer.")  Morris referred folks to the Engagement Mapping research cited above, noting that "You can't grow search from the bottom of the funnel."
  • A third question was about the degree to which marketers should try to identify "emergent" funnels from the data versus operate/ test "pre-defined" purchase funnels.  The panelists were pretty much aligned in their responses about the practicality of focusing on the latter.  Matt said, "we're reinforcing for advertisers the importance of stories -- as humans we're tuned to listen to stories deep in our DNA, and it's much harder to infer them from oceans of data and analyses."  (From my end, I see an opportunity here -- services that collect stories as hypotheses, so that you can test the fit between stories and stats, mad-libs style.)  Charlie told a story about how they had tracked anonymous user 110135 through this cookie ID, and used this journey in a presentation to a cable company CEO, to huge effect.  Mike put it beautifully: "No story, no value."

November 13, 2008

CMO Club Talk Recap

From Pete Krainik, this recap of the presentation Perry Hewitt and I delivered at The CMO Club Boston dinner last Tuesday evening, complete with video.

Here's Perry's version, including our presentation via Slide:

The CMO Club 11 11 08
View SlideShare presentation or Upload your own. (tags: cgm ugc)

June 27, 2008

Via My Mom, Also A George Carlin Fan

RIP, George

June 23, 2008

Qik+Twitter+Summize+(Spinvision): We Have Met Big Brother, And He Is Us

Imagine if you could sit above the world, at whatever altitude you wish,  and see anything through anyone and everyone's eyes, in real time, filtering these streams to let through only those things you're actually interested in. 

Today, we have real-time video streaming (now -- though not always practically -- in 3G) via folks with Nokia N95's and Qik.  Qik lets people know you are streaming via Twitter, and you can filter these "tweets" with Summize (which I wrote about yesterday)  You can also get your Qik streams onto YouTube automaticallySpinvision, a brother to Twittervision and Flickrvision, lets you see videos as they are uploaded to YouTube -- superimposed on a map of the Earth.

Now let's roll ahead 12-18 months.  N95's won't be the only devices with high quality camera/ video capture and GPS capabilities -- so, many more people will have this capability.  3G will be more widely available and adopted.  Twitter and Summize will be features of much larger players' services, so they too will move from the fringe to the mainstream as more people inevitable discover the utility of microblogging for different purposes, and the utility of filtering all that microblogging (and microvlogging).   Presumably, you'll be able to stream simultaneously on Qik and YouTube.   Google's just announced the availability of Google Earth running in a browser (though strangely, they didn't keep in sync with the release of Firefox 3.0), so we'll be able to  make our mashups even more dynamic and accessible.  Throw in a little facial recognition to boot, while you're at it.

What does all this add up to? A crowd-sourced, global/hyper-local, digital video, roll-your-own-channel, keep-your-friends-close-and-your-enemies-closer news network. 

What does that make you?

Postscript:

Imagine if rather than turning over a videotape to the authorities, she had streamed this.  Or if Zimbabwe, Darfur, Afghanistan, Iraq, or New Orleans for that matter, were live and unedited, 24/7, from a thousand sources each.   How will that change us?

March 11, 2008

The Revolution Will Be Televised (It Just May Not Be A Revolution)

I wrote in an earlier post about the logical math that would drive ad budgets away from "traditional" TV (broadcast, cable) toward online videos.  Here's a great article by Alan Schulman in yesterday's Online Video Insider on how traditional agencies are co-opting the online video ad buy in a way that may limit the evolution of the medium, and illustrates how my earlier post missed the point. 

Continue reading "The Revolution Will Be Televised (It Just May Not Be A Revolution)" »

February 28, 2008

DylanMessaging: Viral Genius

This viral messaging campaign by Ten4 for SonyBMG's release of a collection of Bob Dylan's music last fall was enormously successful.  I've always loved the original video, and harbored ideas of recording my own version of it at home to kick off various presentations I've given in the past, but hadn't pulled the trigger.  Then I saw this (via Scott Kirsner -- thanks Scott!) and was really impressed.  The mind races to all the other similar possibilities, though doubtless there are intellectual property issues that weren't a problem here.

Reminds me of another viral favorite, Mr. Picassohead

February 13, 2008

An Unevenly Distributed Future: MITX Internet Video Panel

Last night I went to a great MITX panel discussion at MIT on Internet videoScott Kirsner moderated a great and diverse group representing the media, CDNs, VC, and agency worlds.  Scott organized the discussion into three buckets:  how are users interactions with web video changing; how is the production side of the business evolving to enable new things; and, the "monetization" of all this.  Here are my notes, and a few ideas:

Continue reading "An Unevenly Distributed Future: MITX Internet Video Panel" »