- Entries : Category [ Serving a Market ]
- Understanding how you serve both your audience's needs and your partner's.
Serving the market and solving the marketers' dilemma
Review of Ari Rosenberg's article on "How Do You Sell Advertising"
The big story in media these days is the transition of ads from print to web. But so little is made off the web and so much is lost by the print - why?
- Never has it been so hard to lock in on exactly serving the market need.
- Never has it been so easy to solve the marketer's dilemma.
Seems simple - it's not in practice. Here's why
The web is too flexible a tool, too low cost, too powerful. Unless used razor-cut, market doesn't develop.
Case in point is web video, which is happening now as a growth media that can't be ignored. Everybody is doing it - everybody is doing it wrong. So there's lots of action, but little back for it - the answer is it doesn't serve a market because it doesn't solve a problem.
Reminds me of artificial intelligence companies a decade ago, which were the hot thing. Always in search of a problem to solve - they didn't.
Video content on the web isn't like broadcast - the demographic, like in Google AdWords, is narrowed to one, not a to a million. But then how does the marketer use this with the million to be reached?
In other words, the marketer's dilemma.
They are one in the same.
You market to people one by one - content that specifically solves a problem, coupled with a relationship to the marketer who values and monetizes the relationship, all this at once. Then you let technology multiply this to millions, and invite search / PR / word of mouth to bring it within reach.
Read Ari's article here. And think "smallest" to grow "biggest".
Choosing the model - Serving audience AND marketer's problem
Web Video - Should you do pre-roll's?
In the content business, you solve a problem by providing appropriate content. The marketer underwrites your effort, because the relationship formed gives them access to and/or comfort with an audience.
With video you can do in-page, pre-roll and transitional. Brightcove has bet it all on pre-roll, and is losing by it. Clearly the market isn't being served, so content isn't coming to it, no matter how it favors the marketer
A CMP publisher told me the way he viewed web video was you let your major customer put up whatever they wanted, and after a while, you charged for it. And thats exactly what they did.
Needless to say, as his print publication's ad revenues have been dying, circulation falling to nothing with a page count smaller than a advertising circular, is it any wonder that his web video effort is similarly clueless?
Its a case of "chicken and egg" - which comes first, the content or the ad? Clearly Mr. CMP thinks its ad then content. Similarly, pre-roll presumes that a viewer will endure the ad sponsorship before viewing the content.
But what if the viewer doesn't have his problem solved by the content? Could we be risking both the resentment of the ad AND the content, by being forced to watch an ad, and forced to experience the content, getting nothing for the time? Might this even kill interest in the site?
This has nothing to do with quality of ad or content, but with maintaining viewers expectations. For that, one builds the primary relationship that makes the secondary one worthwhile - enough to advertise on.
On the Internet, nobody knows if your just a dog ...
NEC gets "brand-napped"
Great story about NEC taken to the cleaners by a massive fraud.
Success on the Internet is only about powerful brands. See what people went thru to hijack a valuable brand.
NEC execs found pirated products in China bearing NEC's brand - no surprise, typical day in China suppressing pirates right? Wrong. Much bigger.
They faked an entire, parallel company - developing own range of products, manufacturing, distribution, even to collecting licensed royalties. The key to it all was exploiting the NEC brand. Sophisticated pirates, able to extract a fair fraction of the world-wide, annual, brand equity, and for years.
The funny thing was, they did indistinguishable, quality products - they also built the brand! Nobody could tell the difference.
You are your brand on the Internet, for good or ill - what they see is all that is. So perhaps the battle for brand control and brand building is the only battle worth winning. Even if you're just a dog.
The value of interacting with purchasers of content
MSO's tease with the promise of a lucurative secondary market
Hot item in Scott Brown's blog - "When Will VOD Really Pop?". He hears that Hollywood's worked down its fear of consumer copies, such that it can consider the wealth of opportunities of secondary content markets.
Back in 1996 when I was in Tandem Corporate Strategy, some Warner execs were pushing Smart TV, a way to interact with broadcast content to build a lucrative advertising mechanism that Barry Diller said could double HSN's take - but fear held it back. Could it be that greed has finally conquered fear again?
Smart TV had a cool idea - you could interact with TV content and get things immediately. See an ad for a free coke or pizza, and you could click a button and walk over to a vendor and get the item immediately.
Web TV, podcasts, and the like are valuable secondary markets for content that doesn't have to rob the DVD, theater, or broadcast revenues. In fact, they can enhance them, by building a relationship with content consumers, who often want to acquire many versions of the same content.
Back in 1996, I met Chuck Dages and he educated me on the business Warner Brothers was in. "We're in the real estate business - we lend out space and equipment, get back content. The more we keep busy, the more content we get to put into play".
Simple to dominate here - you put different versions of content out for the "small screen's", and then you work out revenue models for each that balence demand with price point. All you have to accept is that the are seperate segments, and that one doesn't kill the other.
Hollywood is still stuck in DVD glut, hoping for the miracle of HD DVD, which maybe longer in coming than the lifecycle of HDTV displacing NTSC. The problem with betting the farm on this isn't just adoption, its that "speed matters".
The value of Smart TV was instant impact to the consumer. VOD, podcasts, and derivatives of YouTube have this. It has to make content connect faster to the market, or Hollywood suffers the fate of the print media of being too slow and obsolete.
Posted by william
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Anger and Schadenfreude at YouTube / Craigslist / Google / ...
When you can't beat'em, just bad mouth them
Business wimps are shouting again - this time about craigslist. Was YouTube a few months ago.
Calling them "communists" (NYT blog comments), 'trust-afarians’, 'anti-competitive' (MediaPost blog comments), and other silly things. They are mad as hell and wishing bad on CL. Why? Read more...
Simple. CL has taken the game away from them and they can't play anymore the same old game.
My dad taught me a few things: 1) there's nothing as bad as a bad mouth, and 2) cursing the future of others (what germans know as "schadenfreude") curses your own future as well. He was right on both counts.
I've found in business that its even worse than in engineering - it makes you blind to strengths and weaknesses. Nowhere was this more apparent when I tried my hand at doing the classic SOMA San Francisco "dot com" start-up.
One element that was common in the "dot com" failures, but totally lacking in the successes, was the understanding of the cost of customer acquisition. Most handwaved this number, while some did a "cost accounting" total absorbtion model. Many shrewd investors silently took this, and the accompanied customer adoption rate metric into account for estimating success - sometimes more than monetization metrics.
That's the key with CL and others. You want to shoot for the big win, where everyone chooses to do classifieds defacto by craigslist. Remember, at one time, nearly everyone only used Yahoo, Ebay, and Amazon for their specialty.
So you can push a message at cost to acquire customers, or you can acquire them from others at cost, ... or you can barter goodwill for them. What CL found, was that it was easier to be an advocate for their customer, generating enormous goodwill, and carefully using this they could attract customers that couldn't be sold to - no matter the marketing dollars, partnerships, or customer inducements.
It may be hard for these "ad professionals" to understand, but CL has massively expanded the market for classified advertising, by letting it be used more widely than newspapers or local circulars / ad boards. This necessarily comes with dropping the cost to effectively nothing.
To those who have made their numbers in this most difficult of selling times, where bludgeoning the customer and bribing them is a way of life, this is an incredible heresy. So upset, these same people who smarm on about how essential a large firms 'unfair advantage' is to doing business, moan on about how unfair CL's "good will" advantage is, as if its almost worse than murder!
CL also has an effective feedback mechanism, and controls applied by community. Like the same way Google ads have metrics better than print. But this could only come at the price of being always a reflection of its community. Ironically, this is also what many newspapers claim to be, but often aren't.
CL just proves you can have an unfair advantage with fairness!
How a businessman uses this "fairness advantage" is the true measured skill to watch for in seeing the CL advantage unfold.
Oh, and by the way, "Red State America", those WalMart loving types, are fast becoming CL addicts too. Guess they haven't learned about its communist leanings ... hah!
Open Source about to explode Wireless Security Market
OpenSEA launches at InterOp
Most of the business press will miss this, but a big thing just happened. Wireless security via an open source industry initiative OpenSEA will quadruple the market growth of 802.1x wireless security by widening adoption of WEP technologies. Jon Oltsik even acknowledges parentage, which is unusual for an analyst. Its a perfect example of what I spoke of as strategic open source (see prior blog entry).
With 802.11 WLAN's everywhere, you'd think that businesses would've already mined out all the opportunities ... but its actually quite the opposite. Read more ...
A large number of wireless networks are totally wide open - even in industry. Or they are totally locked up, and sometimes new ones are added because no one can identify how to gain appropriate access by different groups of users. Worse yet, there are business initiatives afoot to tie specific businesses/products into wireless security, whereby either you're a secure customer of those products, or you're running by the aforementioned rules.
Every corporate or educational campus has this problem, of thousands of wireless connected users, with uneven security policies distributed across them. If you look at this as an opportunity to interact with those users, the point of an open source platform becomes clear - each institution/corporation can have crafted solutions that take into account the customers needs - not forcing awkward "built into the platform" solutions that mask or omit critical elements necessary for security policy.
Information security works best when it fits an institution "hand in glove". With appropriate incentives, instead being an obstacle, adopting security policies can be seen as a means by which users "self identify" and seek out verification resources, such that the burden of maintaining quality credentials shifts to the users, because they see the benefits accruing for them. The means by which you let users "pull" security instead of "push" through management can be a watershed opportunity that only open source can achieve.
Open source here erases the artificial product links, allowing a horizontal market for security products and services. It allows a broad degree of "customer choice", while allowing the best providers to bid on comprehensive client solutions with a standards-based architecture.
The security products/services markets could face exponential growth if this eliminates the frustrations of deployment of this "ground level", that all depend upon.
Dismal Failure turns out to become Brilliant Success
"The Marriage of Private Equity and Tech Investing" – David Rubenstein
Last week David Rubenstein, co-founder and managing director of The Carlyle Group, gave a talk at Stanford's Business School on the invention of the private equity business. In a fast paced, staccato style, he hammered the audience with his personal history, private equity's necessity of invention, reasons behind its dramatic growth, lucrative current deals going down, its potential near term bust, and long term post-bust future.
If you blinked, you probably missed 2-3 slides. It was that fast.
Ironically, the mere existence of a private equity market says more about the qualities of the public equity market than anything else - read more.
David recounted his (mis)adventure as a presidential adviser to a mediocre president, and that his jump into the private equity market, then known as "bootstrap finance", was more of way a necessity like than of a fledgling being forced to fly - this or else!
An ironic beginning to a brilliant entry at the start of the rise of the private equity industry. He noticed there were none in Washington DC, and used his influence wisely to start what would become an extremely prosperous one.
The way you hear him describe the past, present and future of the industry, it sounds more like an ode to the excesses and vulnerabilities of being a publicly traded firm. What makes this hilarious is that the same investor pushing for short term gains at the cost of long term ones for the public one, is being sold on the long term gains in the privately managed one! Its incredibly hypocritical any way you slice it. As if the opportunity for private equity largely comes out of the conundrum forced on being publicly traded by the same investors who invest on the leveraged side.
He provided a "$200K personal check" challenge to the students to find him a deal he is not currently doing, that if he does finally do it, he'll sign-off on. Which may sound great to the students, but less so to those of us who earn 3 percent finders fees for our trouble of selling a new deal to an investor (his smallest deal is typically in the billions). [My wife, who always loves challenges and is on the tech side so not put off by the lack of 3 percent, thought up a massive deal the next day - ran the numbers on it and it does work out sweet!].
With deal size growing beyond $30B, and the potential for $100B+ deals on the horizon, there are a lot of public companies that make tantalizing prospects - among them he mentioned were Microsoft and Cisco.
I may be in the wrong side of the business given 30% returns in private equity - start-up's are a more chancy thing. But then, I don't have to explain losing billions of someone else's money - its hard enough when seed round start-ups don't always come off.
39th Anniversary of Lunar Landing, 40th Year of Losing Lunar Capability
We actually wrote off the moon BEFORE we landed on it....
One of the common refrains I've always been annoyed with has been "if we (America) can land a man on the moon, why can't we do ....".
The falsehood has been that we've retained the ability to travel to the moon, when we have not - it was simply too expensive to maintain.
Most don't know that we lost the ability BEFORE we actually made it to the moon. Read More...
The Saturn V launch vehicle, who's sole purpose was that mind numbing feat, ceased production as Apollo 8's journey around the moon became a reality. We really won the race with the Soviets well ahead of schedule, and they couldn't catch up, a year before we landed on the moon.
This began the cycle which is getting close to repeating as NASA begins the process of ending the Shuttle.
We quickly lost all the technology around the moon, because it was very costly to maintain, and the thought was it wasn't very good to maintain, better technology would be available by the time we went back. In reality, the technology was strikingly effective, and hard to improve upon without having been maintained all along. It may cost much more to replace than the massive investment to have made it in the first place.
Our technology crystal ball also let us down on the Shuttle - it was intended to usher in an era of lower cost access to space, upon which space station (read ISS) and eventual lunar and interplanetary exploration would become possible.
But it too was too costly, requiring engineering compromises to its safety, compromises that proved again too costly to undo to remedy after it claimed the lives of not one but two crews, destroying 2/5ths of the Shuttles.
We seem as a country never satisfied with our remarkable accomplishments, nor what to do with the people, equipment, and goals once we arrive at a destination. So much so we get caught in a loop, recreating what we earlier discarded, while discarding before finishing what we used before.
Ironically, we are supposedly doing this to save budget and exchange outmoded technology, rather than refine what we've already made enormous investment in. While writing off such investments just before they "turn a profit".
I am already hearing talk of the need to reduce cost again of the access to space. Wouldn't it be ironic if shortly after retiring the Shuttle, we again find the need to reinvent the same vehicle from scratch again?
Bringing America back from the abyss ...
Dealing with denial
America isn't America anymore. In the past decade, we've lost too much of what defines America as America - and that isn't just bad for America - this crisis envelopes the entire world.
Lacking discipline, clarity, respect for reasoned discourse, fair dealing, intellectual honesty, able execution, and a passion for excellence - these all defined the American experience, the Yankee "can do" spark that electrified the world. It has all become a bunch of empty slogans, bankrupt by a pirate culture that claimed all of the above ... until it suited them to betray those aspects selectively. Paraphrasing Khrushchev, we have sold the rope to hang ourselves - made in China, on sale at WalMart, and soon to be discounted.
You'd think that anything this bad a threat to our world (let alone our nation!) we'd turn on in a moment and tear out its guts. Nope - sorry, we're only beginning to notice its existence, and have only been buying temporary relief for a few trillion dollars.
What's worse, the denial/delusion we've been in that got us into this position is quite alive, vibrant, and ready finish the job of our demise on a going forth basis. It's about as dire as it can get - can America even desire to wake up and claw its way back?. Read more.
It's hard to come back when your down. It's even harder when you've wrecked much of what you need to recover yourself, as we have carefully done. But what really wrecks recovery is being in denial that you even have to.
A good friend has pressed me to look at Matt Miller's The Tyranny of Dead Ideas: Letting Go of the Old Ways of Thinking to Unleash a New Prosperity. Miller sees us as caught in a web of self delusion - one that kills our ability to "power out" of the nosedive we are in, because it continually allow us to fool ourselves irrespective of the painful reality we are in.
But this is also going to be a continual fight to avoid even when we do decide en mass to respond and engage recovery, for to get the true innovation and true growth. Why? Because we'll simply delude ourselves that the old fake "innovation" we accepted to con with before is the new innovation, and we'll attempt to fake growth just as we did before. Trust me - we've been really good at deception.
We haven't come to look ourselves square in the mirror, straight in the eye and say what's bad, and commit ourselves to a different path. As long as you believe you are good, if bad things happen, they are someone else's fault. We can move that item off the balance sheet, we can sweep toxic finance under the rug, we can ignore the root causes to our failures because we can't own up to them.
If our ideas have failed, we don't reevaluate, we just cling to them even more. Addicts do kill themselves with this.
To test this, I spent some time in the heart of Silicon Valley attempting to push various kinds of innovations from different groups - some old "tried and true", some new and controversial, and some recent favorites disguised to seem original. The hands down most popular were the last category - are you surprised?
I can pull this off completely by knowing that capital calls are rare these days - most VC in the valley aren't investing (or surviving). Some are actually killing companies, reclaiming the cash as investor virtue to show limited partners that they can recover from a spate of bad investments, only ... to do it all over again the same?
Bottom line - American's aren't acting American. They need a twelve step process to get them back to being so. Then they have to talk the talk while walking the walk. When you hear anything as a next step, run the numbers, ask the questions, do acid test/burndown value, presume its wrong - until you see and prove it by parts that its something genuinely good. Then make it work. This is how Americans become American again.
Global Retrenchment - Retreat, Not Surrender
...retaining the ability to respond to reversal of fortune
Everyone knows good times don't last forever. Or do they?
In many economic downturns in America's history, the hubris of imaginary/undeserved perpetual prosperity has been present.
Why, even in California, we had a tax revolt launched over "that obscene surplus" - a "rainy day fund". California's had some incredible "rainy days" since. So not only is it fashionable to not plan for a downturn, it can be considered practically criminal in certain political lights.
But what's worse is America destroying its resilience ahead of time ... and being proud of it. Read more ...
Unlike other European countries, Germany did retain a "rainy day" fund ... perhaps not enough. More's the problem with getting them to spent it now, but that's another story.
The Germans inspired in the American's a sensible desire to maintain resilience, albeit from different parts of the psyche. For the German's retaining skills during down times comes from a recognition that to sell on extreme quality (enough so China, Vietnam, even Malaysia buy from Germany things at 20x local prices) means a long term commitment to such a skill set is a strategic imperative.
At war with a national sense of too frugal frugality, this comes from a root cultural metaphor of manufacturing from the legends of dwarves making fantastical swords.
In America, it had been, like Japan, a belief in national security rooted in maintaining a critical industrial base. This has been entirely lost in the last decade, where envy of those with greater skill (or intelligence) undermined the need to maintain such. After all, we were the masters of the earth, we could intimidate any to provide us what we needed - so with such power who need maintain (or have regard for) skill.
Ironically, those most politically trusted for national security were those whose craven needs ultimately debased national security - this is still underspoken.
It is clear that unlike the German's we have not created an enduring archetype in our culture to keep our economic "mojo" intact. Perhaps this current downturn might have a benefit of waking up America to the loss of some of its key strengths.
Smart Phone gives way to PersonalOS transformation
Understanding a market segment transformation
Sometimes there is a change that is so obvious that its as big as the Earth ... yet nobody sees it. That's because no one notices the elephant in the room when they are too busy scratching where the fleas are biting.
Bottom line - the largest volume OS market is about to come online. Only Google and Apple are well positioned to compete. Everyone else is stuck playing catch up in the prior market definition known as "Smart Phone" - they are missing the "left turn", just before volume spikes. Read more ...
So ... my son's visiting this week from UCLA, we're driving down the freeway, and drive by a Google Android billboard. He literally erupts with an almost incoherent torrent of observations on the rapid domination of the Droid and other Android-based phones around him at UCLA and the LA business circles he consults for - too much too fast.
The net take-away from this flood of information - Google's "application momentum" is overwhelming Apple, in ways that vastly broaden the market segment. There are parallels with the past - Apple with the Mac attempted to rigidly control apps and developers when Microsoft chose explosive growth instead. Then as now, Apple wishes to define the game to maximize control so as to profit best off of market segment growth.
But Microsoft's goals back then in the early days of Windows was to nail down as many vendors as possible, to define the concept of a PC as requiring Windows. This is closer to the Google approach today - that of overwhelm and devastate on the volume of apps, allow as many vendors/providers as possible, and let vendors carry the load of support.
Microsoft has license revenue from those vendors - if it efficiently supports them, streamlining production by the vendors they only increase the revenues back to them - its in their interest to have fast time to market.
Google's business model is different - Android's not for license revenue but for market share. They don't want to be locked out of provider "walled gardens" - so you have to look at the core business, not the penny ante CE mobile side, which is entirely now the vendor's pie, unshared with a Microsoft or Apple. The vendors themselves haven't yet completely understood this, nor that certain consultants are the ticket to fast time to market. A function of learning curve at winning at the Android business game.
All of this doesn't mean Apple is losing here - by its vertical nature, they will continue to ruthlessly extract every last penny to be found in their niche - not unlike how IBM historically extracts value on the enterprise side. But it reminds me of when I was at Tandem Computers - which sold against IBM, but only at the "top of the pyramid", to a very high end clientele only. Google is undercutting Apple, adding more base to the pyramid. What happens when the pyramid is 100x bigger? While Apple is focused on narrowing its definition and extracting even greater percentage out of vendors/providers for the privilege of selling an Apple product.
Meanwhile Microsoft is clearly losing the game. Palm lost the game, got sold, and HP wants a try at bat to take a swing at the game - extremely smart that they can use this to distance themselves from Microsoft, soon to be the next Palm in this market - they clearly, like Palm, don't get it. Why Microsoft is not Google.
Watch Google grow this pyramid, and eventually own 90% of it. It isn't the "Smart phone" anymore ... its the Personal OS. Eventually on PC's, tablets, phones, fridges ... even dog collars. Subsuming PC's into CE.
See what I mean?