Entries : Category [ The Value of Brand ]
Whats in a brand that conveys value, that provides an audience with assurance.
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11 May

Eroding the Google brand with search engine "spam"

How even the most powerful could be humbled by stupid greed

Shari Thurow has cogently found an incredibly brilliant firm doing an incredibly stupid thing - which has the the potential for billions of dollars of brand value loss. Google is risking its brand on marginal spam business!

Even more juicy is start-up Demand Media that Matt Marshall reports is getting $120M to profit off Google's brand value loss - they can make a fast buck off selling Google down the river.

This must be a first - sucking money out of a blue-chip brand in public with the assent of the patsy.

Perhaps this better belongs in "Ripley's Believe it or not" category - I prefer to think its something that's been missed rather than been actively considered. But here's the gist of it:

In her article "Encouraging Search Engine Spam", she points out that Google is poisoning its first page search relevance with link farm entries, profiting off of the CPM revenues as a potential fraud not unlike click fraud.

In my Haas biz school course way back years ago, the first thing impressed about brand value was how easily it was lost, and how hard to recover.

Spam related businesses have about the most negative connotations you can get on the planet, and there is nobody who uses Google who hasn't been hit by spam. You couldn't ask for a more brand damaging situation than this.

Already, Demand Media is floating a $120M investment to buy-up dead domain names to use with link farms that simply scrape content sites with follow on links to the content. From the people who brought you MySpace, and big-name finance.

So what happens if things continue as they are? First page search results get dominated by these link farms, Google results then are less relevant, and people look for a brand that gives them the relevance that Google used to.

The Wall Street Journal reports "the Web's biggest search engines are littered with search engine spam. Link farms, click fraud in sponsored listings, and links to sites harboring viruses and spyware are among the many concerns facing search engines today. A new study from SiteAdvisor, a unit of McAfee, says that roughly 5 percent of the results found on the first five pages at major engines like Google and Yahoo exposed users to viruses and spyware, including 3 percent of normal Web search results and 9 percent of paid advertisement ... it's still a bit alarming to hear that a consumer will click through to an unsafe site from a search engine about once every two weeks."

Posted by william at 01:32 | Comments (0)
28 August

Having too good a brand is a problem.

When Google has to tell people to "not" use their name

Lets all shed a tear for Google. In danger of losing control of its brand due to people speaking of "googling" things, they've gone on the attack over people using the brand as a verb.

So, can you end up having too good a brand? Read more.

Back in the 70's, Xerox totally freaked out when they became a verb meaning to copy a document. Once having the lock on all copy/print sectors, Xerox now holds 28% of the copier market.

I think I heard Google first used as a common verb back in 1998 or 1999. Google variant words have also become commonplace - there are even websites. For example, Googleism.com is a popular website thats been around for years (try checking on "jolitz" - and who says I'm hard to work with?).
During all of this, the brand manager is loving the attention as the brand becomes embraced by mass culture, no longer just a obscure techno item.

But, like to much ice cream, loss of brand is a very real thing. Say a website names itself "google-me.com", and in court shows dozens of press articles from major outlets where its fallen into common use. Sorry Google, google-me now is its own, separate thing. And sorry, you can't control it.

Imagine what it would be like, to have a multibillion brand, and then not be able to control what it means.

Posted by william at 19:22 | Comments (0)
07 December

On what you don't need to say ...

Craigslist CEO Jim Buckmaster at the UBS Global Media Conference

Jim Buckmaster gets the analyst asking "How do you plan to maximize revenue?"

His response: “That definitely is not part of the equation. It’s not part of the goal.” They're dumbfounded.

Jim runs Craigslist, which has eroded the newspaper's lock on classified ads. Newspapers are on life support - and he doesn't appear to want the money he's taking away from them. Read more...

Classified ads represent around 40% of a newspaper's ad revenues. And yet, some of these who are hurting the most (ad revenue down 30%!), have been forced to providing free online ads, killing their own profit centers, simply to slow down Craigslist's fantastic popularity. And it isn't working.

Craigslist has gone from being an eclectic pre bubble San Francisco only brand in 1999, to a national brand in 2004, to a place in the common consciousness (30th most popular search term). Ebay bought a 25% share for $15M two years back. Can a global brand be that far away?

The print guys fear that craigslist can get a 100% lock on online classifieds and drive all newspapers out of the market on price point, speed, cost, and effectiveness.

Yet they don’t have to pander a single word to the financial industry, and they are self-sufficient on a modest revenue profile. And with patience uncommon in this “get the money and run” business culture, they build a global brand from nothing at all, and are poised to become immensely powerful, while appearing to be uncaring of success - who would/could take them on? Nobody - they’ve outmaneuvered industry giants 10,000x bigger.

Its all viral. Like Google, its all text. It grows organically, with an expense profile unimaginably low. Subtle marketing. Immense customer loyalty and proven brand value.

Don’t need to monitize fast - simply by occupying the space, they drive the potential value of CL to astronomical heights. Which is why the “ebay money” that went into them years back was so wise. Like Pierre Omidyar did with Ebay, you wait for the correct monetization strategy to present itself, and to happen.

Not only does it meet the Google Test, it may eventually yield much greater than Google multiplier for its founders.

All of this in plain sight, for years. Most still don’t see it even now. Wow!

Posted by william at 23:27 | Comments (0) | Trackbacks (0)
27 March

Catch Me if You Can ...

Adam Lashinsky writes on News Corp / NBC attempt to kill YouTube / Google

Adam Lashinsky has a sarcastic write-up on News Corp. and NBC Universal's attempt to compete with YouTube (see "Catching Google's YouTube won't be easy").

He correctly points out the obvious signs that suggest this to be yet another feeble and futile gesture that points to the massive incompetence of "old' media at dealing with the "new", failing to control their own brand. And that they already appear to control the monetization of their product, by simple example.

Yet another consortium of big guys without a clue, even though they have a "good enough" business strategy already in place if they care to follow through. Read more ...

It gets back to the Larry Ellison "it's not good enough that I do well, everyone else has to lose as well". Thus, the vain goal of the consortium is to take away YouTube's audience entirely, so they can retain the dominant control they are used to of their media. But just as other internet video attempts like Moviebeam, they'll tie themselves up in knots with the restrictions to protect their business interests, never get traction with the consumer who doesn't understand and doesn't care, and never in the end go anywhere.

Finally the 500 pound gorilla is visible - but its too late to put it back in the cage.

4 years back I was pitching to Roelof Botha that web video hadn't taken off because of the volume of content (millions of titles), that if you assembled it into a spot it would be watched and become hot. WB and others laughed, saying nobody watched, and who would dare damage the brand by pursing rotten quality video, that they'd tried with a few hundred to thousand titles, and that was good enough.
Seems it is now.

The smartest thing to do at this point is to leverage/control YouTube and direct back into your brand, having a video portal for your properties, which has a better experience and closer involvement - this is what I've been telling them for years, demoing ways to do mashups and favorite scenes in minutes just with a web browser. They don't want to have "hands-on" control on the front-end of the process, where the costs for them to control the brand and control the interaction with the consumer is best. So they will be losing this option soon, which is mind boggling.

As Adam points out with finding the video on ComedyCentral, the take-downs work well enough, and the ability to monetize is right in their hands. Shouldn't this be exactly what they want in the first place?

Posted by william at 19:16 | Comments (0) | Trackbacks (0)
06 February

The Rules of the Road have changed ...

Bill Gross nominates Paul Krugman as the next Keynes

Bill Gross of PIMCO does the quick catch of noticing Paul Krugman's shift in economics from supply domination to demand. This is a big deal for both investors and entrepreneurs - we've all got to change our risk profile - or get burned. Read more...

Supply side and globalism brought us to the "triple zero" point in the stream of products flowing through Walmart. But, at some point, you can't go lower in price, you can't increase the volume, and everyone has enough diamond studded dog collars to go around - how does demand rise to meet supply?

Like in the 30's, it is the quality of life that matters - a fact that Roosevelt exploited at Hoover's cost. Our economic policy must shift to broaden our economic base. Which will be fought by the knee-jerk types for the role that government will have to take won't please them. Innovation in finance and industry will revolve around clever ways to fly under the radar of these flat earthers to realize the opportunities present.

Unsurprisingly, the economy has gone about as supply side as its ever going to get. If you stay too long with this notion with your investments and new ventures, you risk pressing on the money accelerator, only to find nothing happens, and yet others are passing you by.

Many start-ups I've visited last year had an instinctive wariness about this -- they wondered if they were venturing into dangerous offerings, depending on the sell through by key partners and customers that might not develop.

As a specific example, the focus on medium/large retail store chains to vend products and service to was tempered by developing a strategy to approach convenience stores as well. It drove marketing executives crazy, because logically you'd think with the incredible Chinese supply fire hose, you'd think that volume and price would dictate that big box stores would be the best customers -- yet the marketing exec's gut level instincts were being pulled to develop at least a minor position diametrically opposite.

Years back, when I was in Tandem Computers product management, we looked to C-stores as a revenue growth opportunity, and that the economics of these were largely driven by the service industries -- which are now in decline. So it was a complete surprise to be sitting with a VP of marketing who would be telling me why it was insane to direct some of his precious resources in this area, yet he knew he had to do it but not why.

Back in the 70's recession, all big box stores got hit hard. They couldn't discount to win volume. Smaller mom and pop retailers showed up overnight, and offered a better story and stole the customer base. Price wasn't any better - actually it was a little worse -- but the sale was made on value, where the perception of value through the small brand of the small store was seen as more genuine than the vapid brand of the big box retailers. For a while, these thrived, while about half of the big box stores vanished and the other half went on life support for a decade.

Could we be about to see a similar story, but not just retail but accross the bulk of the Internet?

Posted by william at 20:19 | Comments (0) | Trackbacks (0)
20 January

It's time for America to export ... but what?

How to bring the American economy back

Everybody has an idea to stimulate the US - but none of these deal with the fundamental problem - for a massive economy increase, you need massive product exports.

All the rest is window dressing. You won't get back any ROI at all on most of what's been touted, be it in finance, education, auto, retraining, etc. Forbes has half a good idea with small business stimulus - but it doesn't guarantee any reasonable ROI.

So let's be hard assed businessmen, leave the Ponzi/con schemes aside, and only consider what will/has before grown back the economy, namely large scale product exports, reversing the service industry direction of the past 30 years.

But globalization has meant that manufacturing has been best done outside of the US, and we've neglected/sold off/destroyed equipment/plants/people/skills/relationships since, so we have little capability to do, let alone compete.

But that can be compensated with the tremendous resources of the US, and a heritage of American mastery of production still retains the basics - it can be brought back. The more difficult part is the policy of what products to make.

You can't compete with China/India/Korea/Malaysia/Russia on cost/volume/brand - that's gone. No way to fill the shelves of Walmart ever. And it is more likely that imports will take more than 91% of domestic auto sales in short order. So what do you produce? Read more...

Rumsfeld and Cheney were fond at one point of running down European countries, insulting their manufacturing as being mere chocolate makers. Apparently it slipped their notice that key products manufactured by them are sold to China/India/Korea and the others, holding price points more than 20x locally produced comparable products. Does this give you enough of a hint?

We've long been dominated by the rush to the bottom with the "triple zero point" - (cost reduced, power reduced, size reduced) - that has dominated the semiconductor industry. This is the core of the retail consumer electronics side of consumption, once the driving part of American influence, but now descriptive of the loss of such influence.

The vulnerability of this, as noticed by Japan in competing with rising Asian competition, was to push quality and standards beyond what new and less mature country manufacturing culture couldn't bring off. Germany's manufacturing base has taken this even further, creating extreme enterprise products that are relied upon by China and others as necessary. They have taken quality and skill to the limits of instrumentation to measure.

When I was at Tandem Computers, we'd sell tremendously expensive American manufactured systems to countries like China, Vietnam, and Malaysia. Why would they buy them? Lowest total cost of ownership. Lowest possible down time.

Enterprise goods are all about quality and function that makes up for lack of diligence in any culture. Diligence is necessary to maintain brand equity and private label manufacturing - too easy to lose face, which is why one can maintain such high margins.

However, enterprise alone is not enough - just a beginning (or beach head strategy). Next comes the understanding through careful product marketing and management discovery of unmet need for pushing the product barriers beyond current accepted levels, and driving new standards for products across the board.

The race to the top has already begun.

Posted by william at 19:43 | Comments (1) | Trackbacks (0)
04 October

The end of an era .... the beginnings of another?

53rd anniversary of the launch of Sputnik

Last week in DC included a visit, a homage to our space roots at the National Air and Space Museum. My family was present for my daughter's award, which coincidentally was for an analysis of Mars conditions for life begun with the Viking lander - my dad fabricated and tested the transponder it used (along with a half dozen other museum exhibits too!).

I found myself recounting dozens of stories and "lessons learned", and getting into many discussions about specific missions and how certain presumptions tilted things rightly (and wrongly) for the evolution of entering the frontier of space, born as an exercise in cold war "soft power" conflict.

Even though the cold wars have been over for a couple of decades, neither NASA nor the aerospace industry have quite "moved on" to the necessary evolution to the next stage. Cold war relics (including myself!) still abound and seeming warp the present around the past in attempting to force a future that never seems to arrive.

Not unlike attempts to take a fish-oil company and rebrand it as a trendy "dot.com", yet retain its "fishy" origins.

We can already see that for things to go further, we can't do the huge "overwhelm and devastate" approaches appropriate for superpower competition - that trick hasn't worked for decades and ten's of billions. "Programs too big to fail" fail. Especially when we can least afford them to do so.

I won't bore you with the manifold political, structural, or social reasons - they're all contorted, contrived, and ... irrelevant.

However I will address "segment emergence" and the perception of brand as a critical element to breaking the nostalgic cycle that prevents us from entering into the next era that my children will thrive in. Read more ...

NASA was our response to Russian space exploration, and other government agencies and aerospace industry were the tools it used to craft responses. Black and white no gray.

Today we are immersed in a sea of gray with no black and white. True, there are always the nationalists of every country, attempting to manufacture/polarize "dark gray" into black and "light gray" into white for their own purposes.

But we are largely driven by "international partnerships" when, like with the unaffordable US-only "Space Station Freedom", need to operate with the even more expensive yet smaller "International Space Station" born of its parts.

The more frugal offerings here likely will come from commercial firms. Even the Chinese can't easily compel a frugal space exploration program like the Russians did in the past - commercial reuse and highly evolved systems require much specialization that needs constant involvement to refine.

Unlike the past, where superpowers could use their weapons arsenal systems to assemble "good enough" hardware to fly, frequently "stealing" from each other parts/ideas/skills as needed, we are getting to a level in the exploration game where we can't afford the economics of "good enough" but require "way better than good enough". As we did with the arrival of the personal computer.

America left the moon and retreated to low earth orbit because you could only push a "spam in a can" model so far before you started killing people and then a culture might demand to know what the ROI was on a highly expensive program that could at best return rocks not unlike ones at your feet on earth. It was an inspiring highest of high wire acts - some were even trying to stretch to go to Mars!

So we learned for 3 decades how to develop skills in space and how to cooperate to do so.

The next era is where commercial efforts displace the arsenal systems "hurry up and wait" with predictable metrics evolved to replace them. Because this is an emergence of a new business segment, there are no closed business models nor any expectation of stable served markets. Just a few hair brained ones. Not unlike the way the American west was prior to gold being discovered ... and no ones even hinting there's a millionth of a chance of anything remotely like gold being present.

This era must begin with no promises and preconceptions, simply to shed the contradictions of the beginnings of space exploration. Otherwise, the distortions of the past will continue to overwhelm the decision making process and we will continue to postpone the arrival of this new era because we as a society choose to cling to the past and relive it rather than have the courage to embrace the future, unknowns and all, and take it forth. Way past the moon.

My daughter did a knock-out speech in the acceptance of her award the next day. She had seen Viking, and had an immense exposure in being drenched in history. I believe it gave her the underpinnings of reaching beyond the present to a future that contained that unseen ROI on the trillions of investment that will be called upon to get it. Like Moses seeing the promised land he'd never touch, I'm thrilled she might feel it even if I can't but know it in theory.

Segment emergence is like this. You have to make a big, uncovered bet as an investment. Do all you like to secure it wisely (like eliminating the arsenal system involvement, whose point is not to do things best but to do things to "win" in a situation where you can define what "win" means ...), but you either "do or do not, there is no try".

That doesn't mean either that we blindly stumble about with no return possible. Robotics may allow us to, along the path of exploration, discover, develop, and adapt new resources off-world that incrementally build larger and larger ROI inducing businesses that we can "almost plan for".

Beginnings are fragile times, and this is at a time when people aren't in the mood for anything but quick flips that this certainly can never be.

When you look though for the biggest possible wins, the world changing forever ones though, and what causes someone to catch fire on the podium, this is where they will be found.

Posted by william at 20:41 | Comments (0) | Trackbacks (0)