Friday, March 9, 2007

And On The Flip Side of the Online Video Spectrum:

NBC Poised To Sell Digital Downloads. (Free registration required.)

Here's the latest attempt by Big Network TV to generate revenue directly from consumers for their standard TV offering. They'll be selling flotsam like five-minute video clips of SNL for a buck ninety-nine, although you'll also be able to buy sketchy-quality videos of shows like "The Office" as well.

I predict this will not work in the long-term -- meaning sustain a profitable SKU for anything longer than a year -- for the opposite of many of the reasons I elucidated in my preceding post.

The Most Successful Online Video Event So Far ...

... has got to be CBS March Madness product, located here. When they first came out in 2004 in conjunction with CSTV, it was as a $19.95 subscription. Starting last year, CBS started offering it free to viewers, with the cost underwritten by advertisers.

Now that's really starting to bear solid fruit: this Mediapost story (free registration required) reports that revenue has gone to $9 million this year, over double that of last year's $4 million, with advertisers such as AT&T's wireless unit, Kraft Foods and DiGiorno buying into the fun.

I can think of four key reasons why this specific online video offering has become so successful:

  1. It's an event. March Madness has become the #1 sports event in America, and it generates a significant amount of low-level non-professional (and professional) gambling. So there's a lot of intense interest inherent in it. (I love serendipitous assonance.)
  2. It's sports, a top avocation for the heaviest users of video, young men.
  3. It's free. Appealing for obvious reasons.
  4. It's a viable alternative to nothing. This is not an insignificant point. I would be willing to bet that the vast, vast majority of online video viewership of March Madness comes in the early rounds during weekday day games, when most people are at work and have no alternative method of or access to viewing games. Once you get later into the tourney -- specifically, Sweet Sixteen -- every game is on TV anyway, and plays at night or on weekends. The chances you'll be watching a relatively grainy online video versus watching the same game on better-resolution TV, especially hi-def, has got to be nearly nil.
If proven correct, then the implication here is that people respond to scheduled video events that are special in nature and not otherwise available to them. This is not the same viewing psychology as watching UGC on YouTube, or catching up on the latest 30 Rock on

Thursday, March 8, 2007

Technorati Profile

"How Radio Is Becoming RadiADo"

The brilliant Al Ries, author of the marketing classic "22 Immutable Laws of Marketing", validates in this Ad Age article my main beef with terrestrial radio that I mentioned in my post here.

Are Ad Networks Safe for Brands?

Of course they are, according to this iMediaConnection article in which the author interviews Joseph Apprendi. And who is Joseph Apprendi? He's the CEO of Collective Media, a "leading online advertising network specializing in audience targeting and optimization". And if you can't trust the CEO of an ad network, who can you trust?

To be fair, Apprendi does recognize the need of brand marketers for transparency, which is the number one point of contention between ad networks and advertisers. But he does suggest that the desires for 100% campaign (not just list) transparency and complete control over carve-outs are unreasonable, and does slightly mischaracterize the issue as one only of quality assurance. That's part of the issue, to be sure, but the one issue he would never bring up is that of bait-and-switch. We've seen this before -- ad network touts ESPN and CNN and iVillage as part of their networks, and you run with them, and within a week you're getting emails from your CEO with links to, wondering what the hell the media buyer is doing advertising a product clearly intended for adults on a site for little children. (Of course, you could reply asking your CEO what he's doing on such a site himself, but you wouldn't have to love your job too much to do that.)

Ad networks want nothing to do with the bait-and-switch discussion because for some of them, it's a core business strategy, and the others who might be sympathetic to a client's wishes don't want to pigeonhole themselves into a guarantee that's too hard to keep. Until the networks can figure out a way to give brand advertisers what they need (not just want), they're never going to become a must-have part of the plan.

The End of Web Radio As We Know It?

This story is so big that even the mainstream media sources are talking about it, but I will link to the first source in which I saw this story online, this Business week article.

The technical issue here is payment on a per listener/per song basis versus the traditional percent of revenue basis. Since web radio generates hardly any revenue to start with, there's no way they can withstand hefty fee increase the Copyright Royalty Board is demanding through their mandating the former, to take effect within the next two months.

The real issue, as I see it, is the music industry regaining some measure of control over their product, even if it's only symbolic. They're mightily pissed at the MP3/piracy phenomenon, which has reduced their sales at the local Tower Records (that is, if it's still open) and through Heck, the unchecked growth of the MP3 single-handed even killed off a burgeoning online sales channel characterized by once-known entities CDNow and CDUniverse, which can now be only found strewn among ancient Mayan ruins somewhere in Mexico, I think. (Actually, I see a site called CDUniverse is actually still selling CDs online. Do you buy your CDs there? No? See what I mean?)

So, killing off several thousands basement web radio stations that weren't generating any money for them anyway is a cheap way to make a point to music distributors everywhere: don't eff-you-see-kay with the RIAA.

I doubt anyone is quaking in their boots as a result.

Answer: Enough Data To Make Your Freaking Brain Explode!

Question: How much data storage exists on the planet?

According to this article in eMarketer, a study by IDC reveals that there are 246 exabytes of total storage on the planet.

An exabyte equals 1,152,921,504,606,846,976 bytes, and there are 246 of those, which I'm sure is really meaningful to you. So how about this: if the average iPod is 40 gigs, then from that much storage you could create over 6.6 billion iPods, more than one for every person on the planet. Yeah, I know, you probably got three of them -- that'll cover for the guy in Vanuatu and the teenager on the Faroe Islands that don't have one.

And because I knew you were gonna ask -- an exabyte is 1,000 petabytes, a petabyte a 1,000 terabytes, and a terabyte is 1,000 gigabytes -- so that means an exabyte equals a jillion zillion gigabytes.

But that's not the best part. The best part is that the story goes on to say that more data is going to be generated just this year -- 255 exabytes -- than there even is storage available. If that doesn't make your head explode thinking about it, then you have a hell of a head.

So the next time your no account CTO tells you "storage is expensive" as an excuse to not keep log files for your site -- yes, that's what one actually told me less than a year ago, in front of the CEO -- that's when you know it's time to quit.

Goodbye News, Hello "USASpace"

OK, so it's not as facile as all that, but it's interesting how USAToday online has relaunched itself as more or less a social networking site, where you're invited to interact with the news stories, rather than be the passive audience for the news. You can leave comments and recommendations on individual stories, and it also is replete with video and blogs.

I'm not sure whether this is a bad thing. I'm used to my news sources being authoritative, and this has the feel of a blog, which I do not deem as being authoritative. After all, if just anyone can go in and add content, how can you vouch for the quality of it?

One thing I don't like, for sure -- it's laid out very poorly. The various areas don't appear properly sectioned off, and it's hard for the eye to track through it very efficiently.

A Downside of Blind Networks

Looks like is starting to appear on advertiser hit lists, even as they get top-flight advertisers, thanks to their relationships with ad networks. Their being hitlisted may not be because of her politics per se, but because of that age-old #1 enemy of advertisers: controversy.

This post in Daily Kos reveals the names and contact information of various advertisers who've appeared on Coulter's site. The mission of the poster is to"out" advertisers who support what they term as "hate speech".

We in marketing know that this kind of thing -- running on controversial, divisive, or otherwise wacky and irrelevant sites -- is de riguer when casting your lot with a blind network. It's bad enough when this kind of thing happens when you have a CPA buy running -- but to trust any blind network with a CPM buy with zero transparency, and I don't care how "reputable" the network is, is something like dumping your money into the middle of the street and setting on fire the portion of it that's not blown away by the wind.

On the one hand, serves them right. It's 2007, and if you don't know that this kind of thing can happen on a blind network by now, you're either ignorant, cynical, in cahoots with blind network sale people, or stupid. Any agency that allows this to happen should be put on the hot seat by their clients, pronto.

On the other hand, this is one more data point in the discussion of transparency in ad network buys to start with. If this can move the discussion toward a resolution that provides a broad level of insight into where your ads run on ad networks, then it's totally worth it for some advertisers to die from the poison berries on your behalf.

Monday, March 5, 2007

Big Shift in Search Landscape Coming?

Here's some interesting news I saw in a MarketingVox story: seems that, according to the blog Search Engine Land, Microsoft filed for a patent in which an algorithm is described that would remove a company's organic search listing if a paid ad showing the same base URL appears on the same page. This looks like an attempt to shift search-oriented revenue from SEO agencies who specialize in natural search to the search engines themselves through paid advertising.

I wonder how SEO professionals are reacting to this? If my client thinks he can ensure top positioning by paying a few cents or dollars per click in paid search advertising, why would he also pay me four or five figures a month to design a spider-friendly site to try to accomplish the same thing? The client might reason that they might be able to save a few bucks by shifting his SEO dollars to PPC and focusing on that.

Of course, given that Google, MSN and now Yahoo have eCPM-based positioning algorithms rather than straight competitive bidding for positioning, it's not as easy as driving up bids to get premium positions, anyway. A good SEO client services person would need to gently explain the potential pitfalls of such strategy without looking baldly self-interested.

Mark Your Calendars for March 31, 2008

That's when you should at least be starting to think about buying stock in companies that manufacture television sets and digital converter boxes. That's because, according to this story in eMarketer, people are waiting until the very last minute to convert from analog sets to digital sets. Analogs will become absolutely useless as braodcasters switch to 100% digital signals a couple of springs from now.

I'm all set with my TV itself, although my portfolio might need a little sprucing up before then.

Maybe Panama Doesn't Rock For Clients?

Following up on my breathless musically-lyrical treatment of early results from Yahoo's Panama launch, this story in Mediapost (free registration required) suggests that clients may not be as thrilled about early performance as are paid search providers.

Avenue A reports that, across their 33 clients, click-through rate is definitely up, by +10%, but conversions are down an average of -5%. The story contradicts itself on cost-per-click, claiming it dropped early in the story but then referring to a CPC rise in the next paragraph.

CPA, the third most important individual metric to clients (after margin and then revenue), is up +6%.

This might mean something -- or it might not. A key question I have here is about the integrity of the study. Testing best practices state that you hold all ancillary variables in control while you test one or just a few key variables at a time, with everything else running exactly the same on a simultaneous basis (in this case, same bids, same keywords, same keyword rotation, same offer, same copy, same copy rotation, same site split within the content distribution network, etc.) If you can't manage that, then you need to apply some sophisticated regression analysis to tease out the noise in order to bring everything onto the same playing field.

In this case, the thing that exacerbates the analysis even more is that they are comparing on a before-and-after basis, in which changing competitive conditions over time can also create a challenge in determining the validity of the results.

I'm not saying that Avenue A hasn't applied all the statistical filters required to the study in order to eliminate the noise, and their conclusions may be totally valid on an objective basis. But that's the question that I as a second-hand observer have.

FOLLOW UP: I just ran across this story on BizReport, which confirms my earlier post regarding Yahoo's happiness about performance, and also cites the Mediapost story above. But this is interesting -- the BizReport story notes Avenue A's clients seeing a click increase and CPC decrease -- BUT no mention on CPA increase and conversion drops! I guess including that sort of information would have put an unwelcome and unhappy spin on the story, huh?