Advertising and Marketing, Media, and Technology are at the cusp of a sea change. Traditional rules of engagement and economic models for success have changed or already failed. But what to do? Think in realtime. Come here for New Ideas. Live Idea.

Monday, April 13, 2009

The Exit Strategy



One of the things that is totally unique to online advertising is the "exit strategy." Is this important? Does it affect price & performance?

Julia Kim from Harvard postulated that “Information resources can be bundled by substance, format, and/or process to be information products and services.” For example a “magazine” has news & entertainment substance, printed on a paper format, whose process is that you turn pages in a linear sequence. For the most part the “ad page” is no different in format and process than an editorial page, and it’s substance may be valued higher than the editorial in certain categories.

Compare this to pcworld.com which presents news & entertainment on a monitor screen whose process is to navigate by clicking, scrolling, opening and closing pages. You have a choice of how to leave.

I was reading PC Worldand thought the page was very cluttered.

I counted 170 total links. Of these 4 were traditional display ads (2.35%), 20 text links (11.8%), and 2 display promotion ads for the magazine (1.2%) for a total “commercial exit share” of 15.3% total or 0.59% per link.

I’m the first one to call this Abbott & Costello math, but a 0.59% share of links would certainly coincide with a similar and small ad CTR.

What would happen if the only way to click out of the page was via an ad? Why shouldn’t the typical magazine mix of 55/45 editorial/ad mix hold on the internet?

Rather than an iCPM, or time-on-page metric, how about SOX: share of exits.

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Sunday, April 12, 2009

It's About Time


I was recently asked to submit a story to the Internet Oldtimers Foundation's monthly newsletter. I  though I might share it here too.

IT'S ABOUT TIME
Larry W. Smith, President/Owner, Live Idea

My long tale starts in 1979 surfing on CompuServe with a Texas Instruments TI99/4A and 300bps Volks modem. Now 30 years later as an Internet Oldtimer Foundation member, I'd like to share a few thoughts about time.

Wikipedia says "Time has been a major subject of religion, philosophy, and science, but defining time in a non-controversial manner applicable to all fields of study has consistently eluded the greatest scholars." Good news, I'm not going there.

Instead, consider 2 components of time that matter to our marketing communications, media, measurement, and advertising revenue ecosystem: the point in time values of persistence and durability, and chronology.

Persistence and durability are clearly demonstrated in print advertising: just buy an antique copy of Colliers or The Plain Dealer to see the editorial and adjacent ad, forever, in perpetuity. However at the Museum of TV & Radio tapes for programs and commercials are separate, until the 1980's when VCRs became affordable and programs were saved by amateurs.

Hop to the Wayback Machine (www.archive.org) and search any top 1996-1998 site with static pages and oops, no ads. Go to any current publishing site and search for an old article, and see a current ad with old content.

Punchline: content has retained its perpetual value through its persistence and durability. But the paid advertising has not survived, it is fleeting and has fled the net. Question: could, would or should the advertising retain its presence? Should an old or new ad be served? What value would accrue to the viewer, advertiser or publisher? Is there a business model and revenue stream?

Chronology is how we grow and age, one second, minute, or hour at a time, in sequence.

But am I the only person frustrated that creation dates are not applied to internet content? For example, the PC World article from the March 2007 magazine gets striped on pcworld.com, not cross referenced on cnet.com, and not indexed to any popular search sites. Interestingly, dates are a main feature for professional librarian systems like Lexus/Nexus.

As a linear kind of guy who has built on the shoulders of his predecessors, I think the most current and timely may also be the most relevant. Popularity is not a proxy for currency, nor are back links that take time to perpetuate. Time matters in a chronology and should be organized and available that way.

So what are the marketing implications and opportunities? Can publishers sell long-term or multi-generational commitments to serve "in context to content" using new, old or on demand ad messages? (e.g., a John Updike article always connects to the Amazon book page with his signed banner ad).

Do Ad Networks spawn "perpetual servers" which attach to pages and analyze long-term trends for serving that page with a certain ad? (e.g., YouTube video of Coke-Mentos stunt always serves a Pepsi message on weekends).

Can Advertisers and Agencies arbitrage the long-term brand value? (e.g., net present value of dollars over brand life = I'll pay a 20% premium to keep it there forever = PURL or URN ad tags).

Finally, rather than offense advertising (oxymoron? Pun intended!), let's consider value in defensive marketing. How many times have you searched and found old negative comments about your company or clients? The long tail is rewarding the negative comments because of durability over chronology with links not connected in time. Is there an opportunity to serve rebuttal ads in context placements?

And that's all I've got to say about that. Thanks for your time.

Ad Me, the future of internet advertising

What does the future of Internet advertising look like?

Given the issues with privacy, the sophistication of server side data analysis and predictive modeling, the massive under-utilized processing power of my personal electronics (phone, netbook, laptop), and the acceptance of “free” as a money-making economic model, I’m pretty positive we’ll see a power shift to the individual.

“It won’t be my son’s Web 2.0, it will be “Ad Me.”

Many people, not all, will take control of their personal information and create rules, permissions, and filters using Personal Relationship Management (PRM) software and/or “User Managed Advertising Permission Systems” (Umaps).

“I will take a higher level of control for some, not all, of the messages to which I am exposed. I can define and quantify my value, then put it forth for an exchange. I will expose my identity where ever and whenever I decide. I’m willing to be a target, a known target, when it serves my purposes.”

Core components to these PRMs & Umaps are:

-> Central personal profile account which consolidates the data I already have at sites like LinkedIn, FaceBook, Classmates, Amazon, eBay, Digg and creates a universal profile under an OpenID. Once the namespace and APIs are created, all kinds of data about me can be connected by me: credit card purchases, loyalty programs and frequent buyer clubs, phone records, medical data, and even physical wanderings via GPS.

-> A new set of Creative Commons “Personal Data T&Cs” will be created so I can choose to interface with different types of servers and establish my privacy rights and ownership of data (invisible in the background).

I will expose none/some/all of my ZAGI (zip, age, gender, income) in exchange for content and advert categories I’ve tagged or brands I’ve approved (yes cars, no diabetes drugs; yes Starbucks, no McDonalds). I will share certain data sets in exchange for usage of a software application or faster delivery of premium entertainment. I’ll answer surveys and give quota data automatically in exchange for results (profile points) to enhance my value.

- A Conversation System where I tailor initial preferences, then a stochastic algorithm takes over to manage my general behavior and adjusts preferences. My system has hooks into other data and systems where I’m a subscriber or regular like eBay, Amazon, NY Times, Digg, delicious, Likeme, Live, webmail and corporate exchange servers. Imagine what this could do for search and search ads when I’m shopping. It will also spawn “pre-fetch” widgets for Web 2.0 personalized sites.

- A Negotiating Engine permits me to understand and value/monitize my behavior and clicks, as well as request/permit cueing of ads according to bid/ask systems like AdSense and Omniture. These ads may sit local in my cache and display on a page when certain tags are served. Monitization for me could be cash, barter, discounts, tickets/access, goods or services. Publishers and ad networks could be paid when the ad is locally served too and the pixel is sent to the Advertisers accounting server.

So, in this possible future, will Advertisers embrace these PRMs & Umaps? Will they recognize my uniqueness? Will they want to Ad Me?

Yes, because we will give them superior efficiency and less waste (green data?). Targeting will be far easier, more exact, and relevant to those people that announce that they care, are agreeable, or not overtly saying no.

Publishers should like the system too since they can optimize ad inventory and reduce inventory clutter (quality over volume, one perfect ad), thereby making the content king, again. Better yet, Publishers get another method for aggregating audiences who voluntarily supply data; they all lost the for registration battle but not the desire and understanding of its importance — so next gen audience gives it to them.

Not only will companies get a better understanding of “customer relationship management” but we the people will accept the responsibility to help out with “business relationship agreements.”

The conversation will be full circle.

Browser –to- server discussions will occur in the background to establish agreements and value my uniqueness while my screen gives me what I requested in a sharper focus. From a technical perspective, almost all the pieces exist today so technical heavy lifting is not necessary. In practice, this could take shape as a browser add-on, an internet app, apps with personal crawlers, agents & spyders, and live as something local to my desktop/phone or in the cloud.

Net, the future internet advertising models will reward my performance, participation and consumption. I will have tools to use which meters and exchanges value when I become an active participant in the conversation. Advertising will still be omnipresent, but delivered more often by invitation. Sellers and buyers still aggregate, but can segment in more meaningful ways.

Or not.

The internet may continue its slide downward toward becoming another tonnage media channel for delivery of video entertainment, and we all just continue to sling eyeballs. Ugh.

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