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July 2007 Archives

July 5, 2007

Editorial Search

I have a couple of friends that live in SF that I think fall squarely under the definition of "hipsters." From the clothes they wear, to the music they listen to, to the clubs they frequent - these are the defining characteristics of hipster, no? - they are hipster all the way. Those of you know me, know that this is the farthest thing from me. I, for better or for worse, wear regular guy clothes, listen to mostly out-dated music and frequent neighborhood bars (if I go out at all).

So what's this have to do with search? Well, I was thinking about it - when my hipster friends want to go to buy some new clothes, or check out new music, etc., there are places and brands that are designed precisely to cater to them. True Religion jeans vs. the Gap jeans i wear - that sort of thing. These are stores and places that are specifically created around taste differentials among consumers.

But that's not how things work online. Let's say that my hipster friend and I go to Google to get more information on blue jeans. The Google result, because Google knows nothing of our specific tastes, is identical for both of us. It's up to us, the user to provide qualifications....

So I guess my question is, is that optimal? Or is it possible to have a search experience branded by users tastes. In other words, similar to how there are clothing stores that cater to different styles, automobile brands that cater to different demographics (think Buick vs. Hummer), etc. should there be branded search where results page for queries is skewed to a demographic?

Battelle calls this stuff the data base of intentions - but that implies its up to the user differentiate him or herself from other users. I'm wondering can a search brand be built around pre-supposed differences. Google for Kids, Google for Elderly, Google for Geeks, Google for Hipsters - that sort of thing....

July 8, 2007

Advertising Supply/ Demand

Kelly and I headed to Napa to meet up with her brother and his wife, for a weekend of good food, bad golf and great wine. All three missions accomplished. In any event, while out to dinner on Saturday night, Kelly scored the only celebrity sighting of the weekend, spotting Alyson Hannigan (the "this one time in band camp" girl from American Pie and various sequels).

Anyway, my sister-in-law reminded us that in addition to American Pie fame, Ms. Hannigan is also on a current TV show, which got me thinking about TV advertising. TV is expensive. Not from a consumer's standpoint, even the price of plasma's has droppped pretty significantly. But if you are a network and you are producing and airing TV shows (or even buying and airing them), it is enormously expensive. Just the labor costs alone (the actors, the writers, the producers, the directors, the editors, the production people, etc.) are huge. I read somewhere that Charlie Sheen makes $250k or so per episode for a show called Two and a Half Men, which I've never seen. And this is in the internet age, where hits are pretty much non-existent

So who pays for all this? Well, advertising of course. But why? I have to believe that in the world of ever-shrinking audiences, Tivo/ DVR and the remote control, even if a network can deliver a large audience for its show, the percentage who actually see one of the ads is going to be extremely low. So why do advertisers keep buying them? And why do they still pay enough for them that Charlie Sheen gets paid $250k/ episode?!

So two thoughts on this. First one, advertising is an industry - and industries, like bureaucracies and big companies, don't change directions quickly or easily. For years now, for most large corporations TV buys have been part of their budget and the industry is built around that. Ad agencies, media buyers, marketers, brand experts, and, yes, actors, writers, etc. are an industry stack which now is perpetuating. This type of thing doesn't disappear overnight.

Second, I imagine the original pitch of the TV ad sale was essentially "we're the only game in town." In other words, in 1965 where else were you going to be able to reach millions of people quickly and efficiently? Fast forward to 2007, add in the aforementioned bureaucracy, and you are where you are - lots of people paying for inefficient ads.

But for how long? Given that the internet and the ad networks has given marketers the ability to reach millions of people even more easily, TV is no longer the only game in town. In other words, the overall ad supply has increased exponentially. Doesn't Adam Smith tell us that when supply increases and demand stays the same, the price comes down?

We'll see how long the ad industry can keep the price of TV ads running high, but my guess is not for long.

July 9, 2007

Live Earth: A Lesson in Event Marketing

To borrow from an old riddle, what if a concert for global warming takes place and no one is there to witness it - does it make a sound? Obviously, that's an exaggeration, but from what I am reading about the recent Live Earth concerts, its not too far from the truth.

So why is this? Because global warming isn't immediate enough? Maybe. Because of the obvious hypocrisy of the event? Perhaps. Or was it the line-up that was uninteresting? Probably, to some degree, all of the above contributed. But maybe Live Earth was doomed to fall flat regardless, a sign of the world we live in today. Here's what I mean:

In today's world, building buzz for any event is really, really hard. I always admire the movie industry - every year they make their summer blockbusters huge events. How do they do that? They spend, piles and piles of cash. The economics of movies allows for that. But what do you do if you don't have that kind of budget?

If you're a marketing a product (or a web-site), it's actually easier. Products can sit on a shelves for long periods of time, waiting to be sold. As a result, you can do things like guerrilla PR, buzz building ad campaigns, focus campaigns to reach the mavens (a la the Tipping Point) and let the message filter through, etc., etc. If your campaign takes off immediately or in 6 months, doesn't really matter.

But that's not the case if your marketing an event, like a concert. You don't have an unlimited shelf life. You need to get everyone's attention quickly (but not too early - lest they forget about the event), otherwise the moment is literally lost. In other words, it's shock and awe marketing - hit 'em heavy (TV, internet, radio, billboards, etc., etc.) with the message for a short period of time and hope it grabs there attention. Like I said though, this type of event marketing takes a lot of money. And as a charitable event, Live Earth didn't have it. So despite the network coverage, all the celebrity endorsements you can shake a stick at, internet streaming, etc., etc., Live Earth couldn't build a buzz.

But wait, you say, Live Aid didn't suffer these problems, and they operated under the same conditions/ constraints. True. But remember, that was 1985! A huge difference. The reason marketing costs so much these days is there is no single platform for reaching an audience. In Marksonland parlance, no point for convergence and consensus. Back in 1985, with a large population continually gathering around the same few channels, it was really easy to build the buzz around an event - get people excited to tune in. Heck, make them feel like they missed history if they didn't!

I don't think anyone feels like they missed history by missing Live Earth. And that has nothing to do with Phil Collins performance this year vs. 1985. It's a reflection of our fragmented world.

July 10, 2007

Domain Name Claims Race

Back when I was in high school, my friends and I used to, from time to time, head to the track to check out some harness racing. I realize that this isn't standard weekend behavior for high school students, but one of my friend's dad owned some horses that ran out there, so through him, we got the racing bug.

Anyway, one of the things that I remember initially thinking was odd about racing was the concept of the claims race. By virtue of entering the horse in a claims race, the owner of that horse was offering to sell it to anyone willing to "claim" it for the stated amount of that particular race (usually somewhere between $3k on the low end and $100k on the high end). I remember asking my friends dad how this could be - what if the owner didn't want to sell? His response: don't enter a claims race then.

So why have a claims race? Obviously, to facilitate the transferability of an otherwise illiquid asset - aka horses. In other words, the races themselves become the marketplace, and all those attending/ watching/ aware become potential customers. Given the complexities of the horse business, it makes complete sense.

I was talking the other day to someone about the purchase of the Topix.com domain name, way back when, and the conept of the claims race came to my head. Buying that name was a pain in the butt. First, we had to find names that we might like. Then we hired someone (Verisign) to approach the owner, otherwise they try to fleece us. Then, once that negotiation faltered, we struck a deal on our own. Then the paperwork, the dotster account, etc., etc.

Why is this? Because there is no standardized secondary market for domain names. There are plenty of primary issuers (GoDaddy, network Solutions, etc.), but once someone buys it from the primary issuer, re-selling it is a pain in the butt. So what if there was some claims site out there where domain name owners/ squatters could assign their name to the site to hold in escrow, until someone agreed to pay the "claim price" set by the owner. Create the market place and implement the transfer.

But what about eBay you say, or any of the other domain auction sites - can't they do that? Yes, they can. But eBay is about buying and selling everything, not one specific thing. Do you think e-Bay when you think about looking for possible domain names? And this is not an auction - but more of a buy it now (for the claim price). And besides, in the case of ebay, facilitating the transfer of the name is an added on service that they're not prepared to handle. StubHub is a great model of showing how a site devoted to a niche market (tickets, in their case) can take a slice out of eBay provided that there's some value added services add on (ticket guaranty in the case of StubHub).

So the claims race for domain names. Perhaps this is a niche business, but it sure could make buying and selling domains easier....

July 12, 2007

Fret Killer

Seems like a pretty common use for YouTube is for amateur musicians to record themselves and then post their performances online. Some of them are good, others not so much (no need to link anyone in this category). Rare is it though that you find someone who consistently posts really unbelievably great stuff. With that, meet fret killer (or I guess fret killr is the actual user name he uses) - a really, really talented guitar player (and a pretty great singer to boot).

On a semi-regular basis, Fret Killer posts videos of a very eclectic set of songs all played on his acoustic guitar. All the videos are done in the same manner: all you see is the guitar and his fingers literally killing the fret board. Here are a couple of favorites of mine:

Ain't She Sweet (as of this entry, his latest post)

You Don't Mess Around With Jim (Jim Croce song)

My Back Pages (Dylan Song)

It's a Sin to Tell a Lie (an old 1920's tune)

With that, I've listened to/ watched everything he's posted and they're all great.

Only 2 beefs with Fret Killer: 1. he remains entirely anonymous, as far as I know. I would pay to see this guy in concert. 2. He disallows embedding of his videos (thus the awkward linking above).

In any event, check out his stuff...it's worth the time.

July 18, 2007

Oakland A's Up Close

Last March, after Bob and I managed to score some primo seats for the Pitt - UCLA NCAA tournament game, I wasn't sure if that could be topped for watching a sporting event live. That's before I experienced the Diamond Level seats for an Oakland A's game.

The Diamond Level seats are really a one of a kind experience. So close to the action, that they don't even show up on the stadium seat map. The seats themselves are directly behind home plate, so close to the action that you have to walk out the players tunnel to get to them. They're so close to the action, that you can literally call not only balls and strikes, but pitches (i.e. slider vs. fast ball). So close to the action....well, you get the point. Oh yeah, one more thing: in the Diamond Level it's free food and drink through the seventh inning. Now that's what I call watching a baseball game!

So last night, I was invited to these seats for a great night of baseball against the Texas Rangers. The Rangers ended up winning 8-5, but lots of great action in this game. There were not one, but two, triples, two plays at the plate, a monster homerun to left center and, on top of that, it was my first chance to see slamming Sammy Sosa play live (as well as see him in person - he walked by me in the player's tunnel).

Anyway, the A's might have lost, but it really was a great night. Thanks to Karen for the tickets!! A couple of cheap camera phone pic's below:

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July 23, 2007

Facebook Tipping Point

A while back I wondered aloud whether or not we were in a bubble, and, more importantly, whether it really mattered? My point was that given the dynamics of the Web 2.0 world, where the exit for start-ups was an M&A event from one of the many cash rich public companies, was there any down-side to (perhaps) excessive valuations? Specifically, I wondered what, other than terrorists or a down-quarter from Google, could cause this "bubble" to pop?

It seems in only a few short weeks, times have changed. Not that the bubble has burst, but rather it looks like the model is changing. Today I read this entry on Valleywag about everyone's favorite Web 2.0 darling, Facebook, and how they think they are worth $10 billion. Now, Facebook is a great company, doing some amazing things in attracting and keeping users in the hyper-competitive world of social networking. But $10 billion??

If I had to guess, I would say that from a revenue perspective Facebook probably does $.30 CPM sitewide. So, let's say they do 5 billion pageviews each month, that translates into $1.5m in revenue each month, or $18m annually. Not bad right. But to get to a $10 billion enterprise valuation, your now talking about 100x revenue. Hmmm....

OK? So they have an unfounded valuation - so what? Well, I'm thinking that given Facebook's high profile, how their story ends may markedly effect the others in this valley, and, unfortunately for the We b 2.0 crowd, not positively. Given all the hype, bluster, press, etc. around Facebook and their success in growing an audience, they're the new poster child for the Web 2.0 world. There have been previous poster children - MySpace, Flickr, YouTube, Topix?, etc. - but they've all been purchased. Once you get bought you stop being the poster child and you become part of the organization. And more importantly, once you get bought your valuation stops being questioned - you're worth exactly what you sold for.

Unfortunately for a lot of companies in this valley, it doesn't look like Facebook is following that model. When you spout off numbers like $10 billion, with no revenue to justify it, you price yourself out of the M&A world. Accordingly, if they ever do choose to sell to someone (if that's even possible now), it's going to be for a lot less than that. Alternatively, if they go IPO, absent a huge change in their revenue outlook, the discipline of the public markets is likewise going to bring their valuation back down to earth (remember, it was the discipline of the public markets which helped normalize (i.e. pop) the last bubble).

The moral of the story being that both of these options indicate the company's not worth what they say/ want it to be worth. So if that's the case with the Web 2.0 poster child, what does that say about the rest of the Valley wannabe's???

In other words, rather than Google, maybe Facebook is the company to watch as the bell-weather of the Web 2.0 economy. How this story ends exactly, I'm not sure, but given the expensive corner Facebook seems to be painting themselves into, if I'm with any other Web 2.0 start-up, I certainly would hope they figure it out later, rather than sooner.

July 26, 2007

A Sad Day for the News Business

Unfortunately for all of us, the Weekly World News has announced that they are discontinuing their print edition. This is truly a sad day. First off, will anyone step up to fill the now glaring hole in the world's coverage of alien mutants, JFK sightings and similarly important matters? More importantly, how will we all pass the time waiting in line in the supermarket?? Alas.

Fortunately for all of us, the "Worlds Only Reliable Newspaper" will still maintain there web-site. And judging from today's top story, their crack reporting staff is still hard at work. Long live the fourth estate!

July 31, 2007

Search Engine Branding

Here's a list of very prominent online brands. Tell me, from a brand perspective, which one doesn't belong?

eBay

Drudgereport

craigs list

yahoo

wikipedia

MySpace

Facebook

cnn.com

ESPN.com

In my mind, Wikipedia. Why Wikipedia? Because it's the only one's who built its brand on search marketing (well, actually SEO, the non-paid equivalent). The rest did it other ways. The first four on the list are internet veterans, having been around since early days. Their brand building occurred well before search engine marketing came into effect. Now, obviously eBay buys a shitload of keywords, and Craig spams the search engines as well as anyone, but this referral traffic, while perhaps re-enforcing there brand, is really just an arbitrage play. The brands were built well before.

MySpace and Facebook, while they too spam the search engines, actually built their brand outside them. In Facebook's case, it was through tapping into universities and the accompanying viral phenomenon, and in MySpace's case, it was through good old fashioned email spam and the accompanying viral phenomenon.

As for CNN.com and ESPN.com, those are entirely different animals. Each of those has managed to pull off the difficult task of turning offline brands into effective on-line brands. This is something a lot of other companies have struggled with.

So that leaves Wikipedia, which, according to Hitwise, receives about 70% of its traffic from the search engines. And, to be honest, that actually sounds low to me....

So, I ask: How did Wikipedia manage to pull a brand out of its search engine spamming? Because Jimmy Wales is a personality? Because some sort of open source mojo? Uber-effective guerrilla PR? And why haven't other search engine spammers (like about.com) manage to pull off the same trick? Is it because they look like spam on the search engines, people think of them as spam and not a brand? In other words, is it possible that search engine marketing, while good for arbitraging, is actually harmful to brand building?

About July 2007

This page contains all entries posted to Marksonland in July 2007. They are listed from oldest to newest.

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