About

I'm a partner in the advanced analytics group at Bain & Company, the global management consulting firm. My primary focus is on marketing analytics (bio). I've been writing here (views my own) about marketing, technology, e-business, and analytics since 2003 (blog name explained).

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64 posts categorized "Media"

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.

 

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Here's what I look like on Currents:

 

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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!

November 11, 2011

Sponsored Occupations :-)

NYT.com had an interactive poll / visualization today taking readers' pulse on the Occupy protests.  Browsing through the usual left-right snarks and screeds, and on the heels of a recent stroll through one of the protest sites, it occurred to me that we're missing a chance to think beyond the politics of the movement, to the economic opportunity it represents.

Think of the protest sites as outdoor ad inventory.  This inventory is in great locations -- in the hearts of the world's financial districts, with lots of people with very high disposable incomes to see your ads every day, all day, right outside their windows -- the same people that fancy watchmakers pay the WSJ big bucks to reach.  

Photo (30)

Yet currently, this valuable inventory is currently filled with PSAs...

Occupation 2

...Or it goes begging altogether:

Agenda

So it dawned on me: "Sponsored Occupations" -- the outdoor ad network that monetizes protest movements!  This concept meets several needs simultaneously:

  • One stated objective of the movement is to "Make Them Pay".  The concept creates a practical mechanism for realizing this goal.


    Make them pay

 

  • Events and guerilla marketing in premium locations without a permitting process -- an advertiser's dream!
  • Plus, sponsors could negotiate special perks, like keeping the protesters from "Going all Oakland" (just heard that term) on their retail stores.
  • Cash-strapped municipalities can muscle a cut of the publishers' share, turning what's today a drag on public resources (police, etc.) into a money-maker.

Photo (32)

There's another important benefit.  This idea is a job creator.  After all, the network needs people to pitch the "publishers" at each location, and sales folks to recruit the advertisers, and staff to traffic the ads, keep the books, etc.  Politicians right and left could fold this into their platforms immediately.

Finally, for the entrepreneur who starts it all, there's the chance to Sell Out To The Man -- at a very attractive premium!  And, for the protesters who back the venture, and get options working for it, a chance to cash out too, just like the guys they're protesting.

Porky

After all, Don't Get Mad, Get Even.

 

Postscript in Rolling Stone: "How I Learned to Stop Worrying and Love the OWS Protests". Plus some thoughtful suggestions here.

 

 

 

October 05, 2011

#MediaPost Future of Media Conference Trip Report

Today I attended Media  Magazine's / MediaPost.com's "Future Of Media" conference in NYC.  NYU hosted the event at its Kimmel Center overlooking Washington Square; after lots of recent events in midtown it was nice to be in the Village for a change, especially on a sunny early-fall day.  To the fortunate folks living in the condo one block south:  admiring your rooftop garden and the sweet library below made for a great conversation starter at breakfast!

Ken Fadner, Joe Mandese, and the MediaPost team assembled a great panel.  Josh Quittner framed his kickoff question with what seems to be the Ur-point of departure for all recent conferences:  Apple's latest announcements.  "Is the future simply "three screens" -- small / smartphone, mid-sized / tablet & PC, large / TV?"  Very quickly, the responses tumbled out. "Yes!  And more: wearables!  Thermostats! Location-based marketing (plus ça change...)! Voice!  Device-based payments! (Biometric access to our devices, for greater security!)  More fragmentation..."

Someone -- I think it was David Verklin -- replied that the answer is to "follow the consumer".  At first it seemed like a bland answer.   But of course it's really the only way you can get a grip on where things are going:  think users and use cases.  Which users, and which of their macro life events and the micro use cases that go along with those, represent the biggest pots of potential value to act as muses for media innovators?  Someone else -- Bob Carrigan? -- suggested that in shaping experiences to address those users and use cases, "convenience trumps quality."  Echoing William Gibson's iconic "The future's already here, it's just not evenly distributed," Maria Luisa Francoli noted that, for example, we're already seeing mobile devices used as a vehicle for payments in Africa.  Riffing on that theme, Beth Comstock predicted that we'd see lots more investment in user experience over raw features in the coming two years.  

Now, the role of the media in shaping what's possible seems even more significant today than 47 years ago.  So Josh naturally segued to ask about what firms would dominate the landscape in the coming years:  "Certainly Apple, Amazon, Google, and Facebook -- but who else?"  On the one hand, the panel had no specific, answers: no candidate from the MSM world, no mention of Microsoft (stunning, since we still spend so much time with their software), no golden child(ren) from the Web's Third Wave (though Groupon and Zynga did get shout-outs at different points later in the conversation).   On the other, their comments together pointed out that Josh's Big Four all aspired to be platforms that allow others -- ten million, by Bob Pittman's counting I think -- to transform features into experiences that solve for the users and use cases mentioned earlier.  One question left unaddressed is how much of the "profit pool" in this vision of media futures goes to the API builders versus the API users.  From my perspective, it looks like "the stack" metaphor for software strategy now generalizes well to media too.

In the spirit of "You manage what you measure," one of the audience questions had to do with the metrics that will guide our progress toward media's future.  There's consensus, as voiced by Brian Monahan, that The Age of Sampling is passing, and The Age of Big Data is upon us.  David Verklin told a good story (even if it sounded slightly apocryphal, and his math seemed slightly off): "CNBC ratings recently went down 15%.  Why?  Two guys turned 55.  What could that possibly mean??  Well, the CNBC ratings panel tracks men 25-54 with certain other characteristics.  The panel had 32 people.  Two of those guys turned 55..."  Swimming briefly against the tide, Bob Pittman counselled "Some of this metrics stuff goes the wrong direction, you gotta help clients think like marketers.  When I ran Six Flags, I told my park managers, 'You have unlimited marketing budgets -- just give me a return.'"   Maria Luisa Francoli disagreed, pointing to attribution analysis as the way forward.  Pittman replied, "True, but that tends to drive you to direct marketing, "  She naturally countered, pointing out attribution analysis' whole premise is to put brand and direct investments on a common currency.   (For me, it's not whether you pursue greater accountability, but how...)

Josh: "Is social networking a fad?" Consensus answer: the genie's out of the bottle, the challenge is that social media is "broad but not very deep" in terms of how relationships are conducted and maintained there. David to Josh: "How many 'friends' do you really have?"  For me, behind this question, crucial to media firms and advertisers trying to capitalize on viral dynamics, is the question of how each of us "filter" the digital world, and of better filters as a worthy avenue toward media futures (the subject of the post I contributed to the conference blog).

What did I miss?  What's your synthesis?  Again, thanks for a great session.

 

#MediaPost "Future of Media" Conference in NYC Today

I'm at Media Magazine's / MediaPost's "Future of Media" conference at NYU's Kimmel Center today. (I contributed this post to the conference blog last week.)  Please say hi!  Trip report to follow.

February 16, 2011

#Watson Wins #Jeopardy! The Singularity Is Near(er): Are You Ready for Computational Engine Optimization ("CEO")?

Saw the news (though missed the show) that IBM's Watson won on Jeopardy.  Interesting to see this and other articles call out Watson's "stumble" -- as though they expected perfection, which is a milestone in itself.  Here's a great explanation of "what went wrong"

There are two notable things to me about this development / achievement.

The first is to ask whether this puts us ahead or behind Ray Kurzweil's schedule for 2019 (as predicted in 1999).  (Really worth reading his predictions, since we're within shouting distance!  What would you "keep / change / drop / add"?)  

The second is a little closer in.   Given the pace of this development, what does it mean for us as humans / users / consumers / citizens on the one hand, and as marketers / investors, etc. on the other -- from "now" to, say, "two years out"?

Imagine for example that in two years, IBM provides access to a more generalized form of Watson as a cloud-based API.   What might you, as a person or as a business or other organization, do with a service that can understand speech, parse meanings, and optimize spending and investment recommendations based on how sure it is of the answer?

Cesar: "Watson, our lease is up soon, can you suggest some available space options nearby that would make sense for a business like Force Five Partners?"

Watson: "Cesar, here are five choices, with suggestions for what you should be paying for each, based on what I can find out right now..."

A stretch?  Apple's integrated Wolfram Alpha - based support into the Siri app for the iPhone now.  Try asking Siri, out loud: "What is the market capitalization of Goldman Sachs, divided by the US population?"   Answer back to me, in three seconds (iPhone 3GS / AT&T):

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(Cross-check: Wolfram Alpha direct. Or,  GS on Google Finance / US Population on Google Search.)

 (FWIW, this hits 3 of 4 criteria in a prediction framework I suggested nearly six years ago.)

Wow.  We had barely figured out SEO, when we got slammed with SNO -- Social Network Optimization (as well as the frozen kind)!  Now we have to figure out Computational Engine Optimization?  (Confusingly, natch, "CEO" -- you read it here first!)  How do I optimize for "What inexpensive steakhouses are nearby?"   How do we even think about that?  

(Possible direction: Semantic Web Optimization -- "SWO", of course.  Make sure you are well tagged-for, and indexed-by, the data stores and services where the terms "inexpensive", "steakhouse", and "nearby" would be judged.  Or, in plain English: if Wolfram Alpha looks to Yelp to help answer this question, make sure your restaurant's entry there is labeled as a steakhouse, has an accurate address, and is accurately price-rated as "$".  Whatever gaming ensues,  just don't blame IBM / Apple / Wolfram /(Google too) for going for the mega-cheddar.)

It's trite to say that change is accelerating as technology develops.  ("We're only in the second inning!")  Some dismiss this (as Arthur C. Clarke said, we always overestimate the impact of technology in the short term, but underestimate it in the long term).  But, if you doubt, this chart is worth a look.  And then think about the degree to which "social" and "mobile" are now reinforcing, amplifying, and accelerating each other...

(Insert shameless commercial:) What are you doing to help your organization keep up? 

 

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. 

 

Filtering Solutions: @darwineco Now Offering Free Themed Editions

With the world awash in content, filtering is the great problem of the age for all of us.  Arguably, the online social revolution is just a means to this end -- our friends are just another way we filter the information we choose to consume.  

Early in 2010 I wrote about Darwin Ecosystem, an advanced new filtering service for helping you pick out news themes and trends emerging from the digital content fire hose.  Bill Ives (@billives) posts here about new "themed" editions of this service, which, though scoped down in terms of the sources each spiders, are both full-featured and free to try.

My earlier post explains the service and its significance in detail, but you might just try it first, then go back and read the manual!

January 04, 2011

Facebook at Fifty (Billion)

Is Facebook worth $50 billion?  Some caveman thoughts on this valuation:

1. It's worth $50 billion because Goldman Sachs says so, and they make the rules.

2. It's worth $50 billion because for an evanescent moment, some people are willing to trade a few shares at that price. (Always a dangerous way to value a firm.)

3.  Google's valuation provides an interesting benchmark:

a. Google's market cap is close to $200 billion.  Google makes (annualizing Q32010) $30 billion a year in revenue and $8 billion a year in profit (wow), for a price to earnings ratio of approximately 25x.

b. Facebook claims $2 billion a year in revenue for 2010, a number that's likely higher if we annualize latest quarters (I'm guessing, I haven't seen the books).   Google's clearing close to 30% of its revenue to the bottom line.  Let's assume Facebook's getting similar results, and let's say that annualized, they're at $3 billion in revenues, yielding a $1 billion annual profit (which they're re-investing in the business, but ignore that for the moment).  That means a "P/E" of about 50x, roughly twice Google's.  Facebook has half Google's uniques, but has passed Google in visits.  So, maybe this growth, and potential for more, justifies double the multiple.  Judge for yourself; here's a little data on historical P/E ratios (and interest rates, which are very low today, BTW), to give you some context.  Granted, these are for the market as a whole, and Facebook is a unique high-growth tech firm, but not every tree grows to the sky.

c. One factor to consider in favor of this valuation for Facebook is that its revenues are better diversified than Google's.  Google of course gets 99% of its revenue from search marketing. Facebook gets a piece of the action on all those Zynga et. al. games, in addition to its core display ad business.  You might argue that these game revenues are stable and recurring, and point the way to monetizing the Facebook API to very attractive utility-like economic levels (high fixed costs, but super-high marginal profits once revenues pass those, with equally high barriers to entry).

d. Further, since viral / referral marketing is every advertiser's holy grail, and Facebook effectively owns the Web's social graph at the moment, it should get some credit for the potential value of owning a better mousetrap.  (Though, despite Facebook's best attempts -- see Beacon -- to Hoover value out of your and my relationship networks, the jury's still out on whether and how they will do that.  For perspective, consider that a $50 billion valuation for Facebook means investors are counting on each of today's 500 million users to be good for $100, ignoring future user growth.)

e. On the other hand,  Facebook's dominant source of revenue (about 2/3 of it) is display ad revenue, and it doesn't dominate this market the way Google dominates the search ad market (market dominance means higher profit margins -- see Microsoft circa 1995 -- beyond their natural life).  Also, display ads are more focused on brand-building, and are more vulnerable in economic downturns.

4. In conclusion: if Facebook doubles revenues and profits off the numbers I suggested above, Facebook's valuation will more or less track Google's on a relative basis (~25x P/E).  If you think this scenario is a slam dunk, then the current price being paid for Facebook is "fair", using Google's as a benchmark.  If you think there's further upside beyond this doubling, with virtually no risk associated with this scenario, then Facebook begins to look cheap in comparison to Google.

Your move.

Who's got a better take?

Postscript:  my brother, the successful professional investor, does; see his comment below (click "Comments")

June 14, 2010

OMMA Metrics & Measurement "Modeling Attribution" Panel SF 7/22: Hope To See You There

I'll be moderating a panel at the OMMA Metrics & Measurement Conference in San Francisco on July 22.  

The topic of the panel is, "Modeling Attribution: Practitioner Perspectives on the Media Mix".  Here's the conference agenda page.

The panel description:

How do you determine the channels that influence offline and online behavior and marketing performance?  

How should you allocate your budget across CRM emails, display ads, print advertising, television and radio commercials, direct mail, and other marketing sources? 

What models, techniques, and technologies should you use develop attribution and predictive models that can drive your business? 

Do you need SAS, SPSS, and a PhD in Statistics? 

Does first click, last click, direct, indirect, or appropriate attribution matter – which is best?

What about multiple logistic regression? 

What is the impact of survey and voice-of-the-customer data on attribution? 

Hear from experts who have to answer these questions and tackle these tough issues as they work hard in the field every day for their consultancies, agencies, and brands.

So far, Manu Mathew, CEO from VisualIQ, and Todd Cunningham, SVP Research at MTV Networks, will be participating on the panel as well.

Hope to see you there.  Meanwhile, please suggest questions you'd like to ask the panelists by commenting here.  Thanks!

March 13, 2010

Fly-By-Wire Marketing, Part II: The Limits Of Real Time Personalization

A few months ago I posted on what I called "Fly-By-Wire Marketing", or the emergence of the automation of marketing decisions -- and sometimes the automation of the development of rules for guiding those decisions.

More recently Brian Stein introduced me to Hunch, the new recommendation service founded by Caterina Fake of Flickr fame.  (Here's their description of how it works.  Here's my profile, I'm just getting going.)  When you register, you answer questions to help the system get to know you.  When you ask for a recommendation on a topic, the system not only considers what others have recommended under different conditions, but also what you've told it about you, and how you compare with others who have sought advice on the subject.

It's an ambitious service, both in terms of its potential business value (as an affiliate on steroids), but also in terms of its technical approach to "real time personalization".  Via Sim Simeonov's blog, I read this GigaOm post by Tom Pinckney, a Hunch co-founder and their VP of Engineering.  Sim's comment sparked an interesting comment thread on Tom's post.  They're useful to read to get a feel for the balance between pre-computation and on-the-fly computation, as well as the advantages of and limits to large pre-existing data sets about user preferences and behavior, that go into these services today.

One thing neither post mentions is that there may be diminishing returns to increasingly powerful recommendation logic if the set of things from which a recommendation can ultimately be selected is limited at a generic level.  For example, take a look at Hunch's recommendations for housewarming gifts.  The results more or less break down into wine, plants, media, and housewares.  Beyond this level, I'm not sure the answer is improved by "the wisdom of Hunch's crowd" or "Hunch's wisdom about me", as much as my specific wisdom about the person for whom I'm getting the gift, or maybe by what's available at a good price. (Perhaps this particular Hunch "topic" could be further improved by crossing recommendations against the intended beneficiary's Amazon wish list?)

My point isn't that Hunch isn't an interesting or potentially useful service.  Rather, as I argued several months ago,

The [next] question you ask yourself is, "How far down this road does it makes sense for me to go, by when?"  Up until recently, I thought about this with the fairly simplistic idea that there are single curves that describe exponentially decreasing returns and exponentially increasing complexity.  The reality is that there are different relationships between complexity and returns at different points -- what my old boss George Bennett used to call "step-function" change.

For me, the practical question-within-a-question this raises is, for each of these "step-functions", is there an version of the algorithm that's only 20% as complex, that gets me 80% of the benefit?  My experience has been that the answer is usually "yes".  But even if that weren't the case, my approach in jumping into the uncharted territory of a "step-function" change in process, with new supporting technology and people roles, would be to start simple and see where that goes.

At minimum, given the "step-function" economics demonstrated by the Demand Medias of the world, I think senior marketing executives should be asking themselves, "What does the next 'step-function' look like?", and "What's the simplest version of it we should be exploring?" (Naturally, marketing efforts in different channels might proceed down this road at different paces, depending on a variety of factors, including the volume of business through that channel, the maturity of the technology involved, and the quality of the available data...)

Hunch is an interesting specific example of the increasingly broad RTP trend.  The NYT had an interesting article on real time bidding for display ads yesterday, for example.  The deeper issue in the trend I find interesting is the shift in power and profit toward specialized third parties who develop the capability to match the right cookie to the right ad unit (or, for humans, the right user to the right advertiser), and away from publishers with audiences.  In the case of Hunch, they're one and the same, but they're the exception.  How much of the increased value advertisers are willing to pay for better targeting goes to the specialized provider with the algorithm and the computing power, versus the publisher with the audience and the data about its members' behavior?  And for that matter, how can advertisers better optimize their investments across the continuum of targeting granularity?  Given the dollars now flooding into digital marketing, these questions aren't trivial.