Thanks to the prodding of Danny Sullivan, I am now on Twitter. God help me. It might mean the beginning of another Searchblog like obsession. I remember when folks said "you blog nearly every day? How do you possibly find the time?!"
More when I learn more.
Update: It's https://twitter.com/johnbattelle
What do you know about that. Brand Advertising on Google:
It's Google, the master of direct response, neck in neck with Facebook. Innaresting. Thanks, Shank-mon!
I am at the Web 2 Expo and will have a lot more to say about this once the weekend comes, when I have time to think out loud. But for now, the news:
Yahoo Inc. is swinging the doors of its Web platforms wide open to let outside developers create applications across its network of sites, as well as radically stitching together its online services under the social profile concept.
The idea is to let the hundreds of millions of people who use its Web mail, instant messaging, calendar, photo management and other online services replicate the social experience that social networks like MySpace and Facebook have made so popular.
What that piece (from IDG) misses is the open search angle. This to me is where the real play is. TC gets it:
Yahoo is letting a limited number of beta testers into its SearchMonkey developer platform, a service announced in February that allows site owners to customize their Yahoo search result listings. (Although it does not allow them to change the ranking of results—which would be really radical).
In my humble opinion, Yahoo MUST get radical. And it will, I'd warrant, if it MSFT does not get in the way.
FM's Conversational Marketing Summit is just six weeks away, and I am getting more and more excited about the lineup of speakers, and the issues and topics we are going to cover. Check out the lineup of speakers:
# Jeff Berman, President, Sales and Marketing, MySpace
# Henry Blodget Co-Founder, CEO, Editor in Chief, Silicon Alley Insider
# Jonah Bloom, Editor, Advertising Age
# Beth Comstock, Chief Marketing Officer, General Electric
# Matt Freeman, CEO, Tribal DDB Worldwide
# Louis Giagrande, Online Marketing Manager, Samsung Electronics
# Darren Herman, Group Director of Digital Media, Media Kitchen
# Michael Hoefflinger, GM - Partner Marketing, Intel
# Mark Kantor, Co-founder, Graffiti
# Jason Kilar, CEO, Hulu
# Clark Kokich, CEO, Avenue A | Razorfish
# Andy Lark, VP–Global Marketing & Communications, Dell
# Andrew Markowitz, Director, Digital Marketing & Media, Kraft Foods Inc.
# Daina Middleton, SVP, Director Sunao Customer Insight, Marketing Analytics, Emerging Trends, Moxie Interactive
# Wenda Harris Millard, President, Media, Martha Stewart Living Omnimedia & IAB
# Eileen Naughton, Director of Media Platforms, Google
# Martin A. Nisenholtz, SVP – Digital Operations, The New York Times Company
# Michael Osborne, Vice President of Sales, Bazaarvoice
# Jon Raj, Chief Digital Officer, OMD
# Randall Rothenberg, President & CEO, IAB
# Ian Schafer, CEO, Deep Focus
# Rich Silverstein, Co-Chairman, Goodby Silverstein & Partners
# Rudy Wilson, Director of Marketing, Doritos, Frito-Lay
A great lineup, and we've still got plenty more to add. I'll be the host and emcee of this event, and I'm really looking forward to digging into the theme.
If you're interested in attending, sign up now. The early bird discount expires in a week or so. See you in New York!
Yahoo had a great quarter, but it's mainly because of its investment in China based Alibaba:
SAN FRANCISCO (Reuters) - Yahoo Inc (YHOO.O: Quote, Profile, Research) on Tuesday posted quarterly profit, excluding one-time items, at the top end of Wall Street's range of lowered forecasts, as it sought to bolster its case that Microsoft Corp's (MSFT.O: Quote, Profile, Research) takeover bid undervalues it.
Buoyed by a large gain on a stake in China's Alibaba.com Ltd (1688.HK: Quote, Profile, Research), Yahoo's first-quarter net income rose to $142.4 million, or 10 cents per diluted share, compared with the year-ago quarter's $542 million, or 37 cents per diluted share.
Er, wait, the Journal says this:
The popular Internet site reported net income of $542.2 million, or 37 cents a share, compared with $142.4 million, or 10 cents a share a year earlier. The latest quarter was boosted by a $401 million gain related to the IPO of Alibaba.com.
I think Reuters got it backwards...here is Yahoo's investor relations site, here is YHOO on Google Finance(grin).
Too good to not quote in full from SmartMoney:
Murdoch said Monday that he wouldn't challenge a Microsoft Corp. (MSFT) bid for Yahoo Inc. (YHOO), the second-largest Internet search engine.
"I can't afford that," Murdoch said. "I certainly can't afford to bid against Microsoft, least of all for Yahoo."
But he didn't rule out teaming with Microsoft on a bid for Yahoo, saying "that would depend on the deal."
He pointed to competition between Google Inc. (GOOG), the leading search engine, and Yahoo as an important factor in a deal.
"There's a very interesting dynamic going on there in that world where Google is going forward, marching forward, with tremendous momentum," Murdoch said. "It presents a lot of questions to everybody, whether they're ordinary marketers or advertising agencies. Are they being cut off?" "Is Google really going to get control of the advertising world and should Microsoft be supportive in (an attempt) to try and stop that, and do they have the capacity to do so?" he said.
As I noted in my panel dust up with the head of Google's universal search product, I found it interesting that YouTube was being pushed so directly into Google's universal search results. This from Hitwise I also find interesting:
One interesting trend that I have noticed is that search engines and social networks are now accounting for an equal share of referred traffic. Last week (ending April 12, 2008) the share of upstream traffic from search increased 35% over the same week the previous year, while the referred traffic from social networks declined 20%.
I am curious if this trend is because of natural causes, or an intentional effort by Google to counteract an otherwise disturbing reality: that social networks were better at driving traffic to video than search. It has implications...if consumers were to get in the habit of finding their video through social nets, and not search, that could hurt future revenues at search sites.
When, I wonder, did Google start integrating video into its results? Why, May of 07, exactly the same time the orange line started its travel downward. Interesting.
Thanks Denise. This is pretty funny stuff.
That's what this Times article seems to imply:
Last year, Mr. Townsend said, many clients were happy to spend money just to raise awareness. Since January, however, “everyone’s retail-oriented. They want as many clicks for the dollar as possible,” he said.
Well, it's fine and dandy to harvest demand for as long as you can, using ad networks. But at some point, you have to create demand as well. I sense that as we enter a downturn, the smart marketers are getting ready to do just that, as opposed to chasing ever decreasing margins down the rathole of direct response.
Posting might be a bit light as I will be at the Web 2 Expo this week. It's shaping up to be quite a show, with news from Microsoft, Yahoo (not that news!) and many others...
Our partner BabyCenter has released a study about the power of Mom's online. Not surprisingly, they are one of the most influential groups online.
New research released today by BabyCenter(R), the largest online resource for expectant and new parents around the world, and industry-leading market research company, the Keller Fay Group, reveals that today's pregnant women and new moms engage in one-third more word of mouth conversations per day than the total public or women and almost two-thirds of these conversations include brand recommendations. This group has an average of 109 word of mouth conversations per week about products, services and brands, most of which are positive and considered highly credible by other moms.
These are the two essential ingredients to any successful media property, to my mind. But I'm not alone, I'm really just parroting Clay Felker, my partner for a few brief years when I taught at Berkeley, and a legendary figure in the world of magazines.
So why do I bring them up? Because for once, I have something nice to say about Time Inc., in particular, its flagship magazine, Time. When I was in Europe, I read the cover story of Time that week, "The Clean Energy Myth." The piece was a winner - a conceptual scoop, an important and timely topic, and - this was the really surprising part - a true argument, an attempt to make a point. It was so refreshing, and so different than the warmed over "on the one hand, on the other hand" pap I was used to from most newsmagazines. This article was great journalism, and it had a serious point of view. The last graf, for example:
Advocates are always careful to point out that biofuels are only part of the solution to global warming, that the world also needs more energy-efficient lightbulbs and homes and factories and lifestyles. And the world does need all those things. But the world is still going to be fighting an uphill battle until it realizes that right now, biofuels aren't part of the solution at all. They're part of the problem.
I figured it had to be an article for only Europe. But when I got back, I was thrilled to see it on the cover here as well. I have not checked, I'm hoping they didn't water it down. But in any case, it struck me that Time was starting to realize what conversational media properties already knew inherently - you can't survive on distribution alone. You need Voice and Point of View.
I noticed another thing about Time recently: The magazine now writes a leader opinion piece, often strongly worded, to kick off the entire magazine. I love this idea, we did it at The Standard. It says "This publication stands for something. We're leaders, arbiters of analysis." Bravo, Time.
(Of course, I think nearly every site represented by FM has Voice and Point of View in some way or another, but I'm biased. Or rather, that's my point of view...)
Some musings, fundamental stuff for most of you I imagine, but still, background on the noodling I continue to do around my shadow next book, over at the Amex site where I'm contributing some thoughts from time to time as part of an FM brokered marketing program. From it:
At its core, the Web is a network of computers. As businesspeople, we’ve been in dialog with computers for some time now. But back in the 1960s and 1970s, computers were hulking machines meant for the back offices of Very Large Companies, not small businesses. These machines had a very particular interface – a command line into which you were required to type an arcane “computer language” to get anything done. The number of people who spoke this language were understandably low, and therefore, the number of people in the world who were having “conversations with machines” was also quite low.
In the 1980s, we all got “personal computers,” and thanks to the graphical user interface - “GUI” – millions of us starting talking with computers. But the conversation was hardly fluent. I call this the “hunt and poke” era of computing – we used a mouse to navigate a representational desktop; when we found something we wanted, we poked at it until it came alive for us. This gesticulative interface – not unlike what the wordless signals we employ while in a foreign land in need of the bathroom – is a step forward, but it sure doesn’t scale.
And then the Internet came along. And everything changed. Now we were not just navigating our desktops, or the back office computer files. We were navigating mankind’s possible knowledge base. The whole shootin’ match. Clearly, not a place we could hunt and poke our way through. We needed a new interface. And we found one, in search.
I am the first John on Google. WTF? Google, please don't change this. I feel - so giddy!
(hmmm, really, WTF?!)
I mean, I am ahead of Lennon. The Gospel. Er...McCain. WTF? What I really love about this is that I found out from my kids drama teacher via my wife. No wait, my wife knew, but I didn't. Then Neil at FM told me. In an email. Because his kid saw it. I mean really. WTF?
Since folks are seeing it all over, it's not just Google doing personal narcissism search (yeah, we can't wait till we're all first in our own searches....see image above). Huh.
I hope you read my earlier post. Now I look like I know what I'm doing, eh? Google crushes it.
Stock is up more than ten percent in after hours.
Mashable folk have resurrected ReadBurner (RWW coverage). I look forward to seeing how it develops!
I have not dug in, but it's good to see Alexa 1. admit it was totally apples to watermelons and 2. see Amazon push some weight behind the still hopelessly lame world of third party traffic measurement.
The Times reports on a New England Journal of Medicine article that raises some important questions:
In an article in The New England Journal of Medicine, two leading researchers warn that the entry of big companies like Microsoft and Google into the field of personal health records could drastically alter the practice of clinical research and raise new challenges to the privacy of patient records.
....But their concern, stated in the article published Wednesday and in an interview, is that the medical profession and policy makers have not begun to grapple with the implications of companies like Microsoft and Google becoming the hosts for vast stores of patient information.
The issue is this:
Microsoft and Google, the authors note, are not bound by the privacy restrictions of the Health Insurance Portability and Accountability Act, or Hipaa, the main law that regulates personal data handling and patient privacy. Hipaa, enacted in 1996, did not anticipate Web-based health records systems like the ones Microsoft and Google now offer.
The authors say that consumer control of personal data under the new, unregulated Web systems could open the door to all kinds of marketing and false advertising from parties eager for valuable patient information.
Microsoft responds saying it's wary of government regulation. Google is not quoted as responding. I wonder what its response is to this issue?
(thanks, Marc)
Many seem to think Google is going to miss when it reports earnings today. If Google is learning from its historical predecessor, Microsoft, that means Google's done a fine job of lower expectations, and will now go beat them.
I've always been a fan of Udi Manber, late of Yahoo and Amazon, now at Google. Popular Mechanics has an interview up with him. From it:
I’ve noticed, anecdotally, when watching people search, that they will rephrase their query over and over again until they get a proper answer. To what extent can that be fixed on the search engine side?
Many ways. First, we take that into account. The results we show you are based not only on what we know of the Web, but also what other people have searched for. Second, we are developing more tools to allow you to refine your queries—at the bottom of many pages, you’ll see query refinements. These are suggestions from us about what your next query should be. And we put it at the bottom because that’s where you run into problems—you tried to read the page, you didn’t find what you want, you may need other suggestions. Plus, we’re working on many other ways to help you with this process. [Search] is clearly a process.
So Yahoo finds, Mashable and the Journal report.
Yahoo Inc. moved closer to outsourcing its search advertising to Google Inc. after an initial test of the system yielded what the two firms deemed positive results, people familiar with the matter said.
A partnership could give Yahoo some needed leverage as it tries to ward off an unwelcome $42 billion bid from Microsoft Corp. Some view the potential pact as mere gamesmanship, particularly in light of antitrust concerns that a Google-Yahoo linkup would likely raise.
A search-ad deal could complicate Microsoft's efforts but is unlikely to derail its plan. Yahoo could simply pull out of the partnership should it agree to be taken over by Microsoft, people familiar with the matter say.
I find this concept very interesting, and important as we move from our current navigation/UI to new forms. New Scientist's coverage:
SITES that evolve as if they were living organisms are making their way onto the internet.
This ability to adapt without human intervention allows sites to stay up to date with changes in their users' tastes and can result in designs that are more user-friendly than anything a human designer is likely to come up with. Evolving sites might also allow web designers to home in on the features that work best for users.
Search share slipped, but share of search ads sold increased, according to a new study covered by Reuters.
New industry data out on Tuesday showed Yahoo Inc may have started gaining share in the Web search ad market against Google Inc even as Google's share of search audience inched up.
One study by RBC Capital using data on ad-buying trends from Web search marketing firm SearchIgnite shows Yahoo outpacing Google in spending on search advertising, ad viewership and click-through rates during the first quarter.
Saw this via News.com's the social blog: Facebook Lexicon.
At Facebook we love tools that allow you to see what people around the globe are searching for or discussing on blogs, such as Google Trends or Technorati. We thought it would be cool to show trends on the public and semi-public forums across Facebook (also known as Walls). Today we're announcing the launch of Facebook Lexicon, a tool where you can see the buzz surrounding different words and phrases on Facebook Walls. Lexicon pulls from the wealth of data on Facebook without collecting any personal information in order to respect everyone's privacy.
Smart move, not unlike the PR value gained by Zeitgeist (hell, that one launched me on the book, after all!).
Republican lawmakers are crying foul:
Google Inc. manipulated a U.S. government spectrum auction by bidding just enough to trigger rules that will open a nationwide set of airwaves to any device and then walking away, Republican lawmakers said.
The so-called open-access requirements, also backed by consumer groups, may have shortchanged taxpayers by discouraging more companies from bidding, Representative Fred Upton, a Michigan Republican, said today at a hearing.
``Google was successful in gaming the system,'' Upton said. The rules were a ``social engineering'' experiment by the Federal Communications Commission that prevented the spectrum swath, known as the C-block, from raising billions of dollars more, he said.
But they should not be surprised, this was Google's stated intent all along.
SEW points to the Googolopoly.pdf on Box.net (an unabashed link bait ploy, I'm biting). The game pokes fun at Google's market share, as well as the current fate of the MSFTs, AOLs, and Yahoos of the world. It's actually well done. But, it's only a matter of time before Hasbro sues these guys, which I am guessing is exactly what they want. (After all, Hasbro is going after Scrabulous...)
Wow, looks a lot like Google News, but I like it! Microsoft's Live Search News.
The stealth search company is not stealthy about the $25mm it just took in from lead Madrone and others.
..something a lot of players are interested in making health search better, Hakia joins the crowd, Mashable has a good review.
So I missed a week of the Ring Cycle between Yahoo, MSFT, AOL, Newscorp, and Google. Wow. Somehow I think I'll survive. Things I found interesting last week:
Yahoo crowing about an unbuilt platform and launches flickr video. Not sure this would have been the tack had the Ring not been Cycling. But it does strengthen their case about staying independent. Latest roundup from the NYT here.
I read about this story while in Europe. EU wants to slash search data retention period to six months
Google Apps - oops.
Fred on a new path to liquidity.
Rich on new crawlers in a brave new world.
The Journal on Sheryl Sandberg at Facebook.
I find this move by Google highly laudable: Google Comissioned To Monitor Illegal Amazonian Deforestation
He Wrote 200,000 Books (but Computers Did Some of the Work)
I'm on vacation now, and of course that means news will break! Google announced it's computing cloud play, App Engine, and I am sure there is more. So please, if you are so inclined, note any breaking news this week in the comments below! It's crowdsourced Searchblog!
Details are emerging, NYT here. I can't write about it due to vacation (am in the airport lounge)....but hope to grok when I get back, given my rants on this in the past...
...no matter what, some folks will work themselves to death. Why is doing it as a blogger any different? Yet another NYT story that, were it not for the word "internet", would not be a story.
Update: JG has a good point here.
I know, I'm writing part three in this series later, but here's one example of what I'm talking about.
Update: The NYT covers the campaign.
Thousands of bloggers and press will be there from foreign lands. Hmmmmm.
More on the official Google blog. Interestingly, Google is keeping the affiliate marketing portion of the Performics biz.
Silly. But I like it anyway.
We're happy to announce the launch of AdSense for conversations, a new type of monetization solution that "puts the 'context' in contextual advertising". Now, in just a few simple steps, you can begin displaying ads that are relevant to the topics you're discussing -- in an unobtrusive screen above your head.
In my last overlong bout of thinking out loud, I pondered the role of the ad network in our online media ecosystem, and the apparent connection between the loss of brand-savvy executives at portals with the rise of the ad network/platform strategy as the apparent saving grace for those selfsame portals.
I left that post with these thoughts:
And I have to tell you, neither the publishers nor the brand marketers believe that a magical ad platform will somehow address their needs online. Sure, brand marketers will spend 5-15% of their budget on lower-CPM "pray and spray" DR and awareness campaigns. And sure, publishers are happy - thrilled! - to see algorithms drive up their backfill or remnant inventory CPMs. But none of them believe that ad networks provide the same kind of engagement and brand building opportunities that a simple two-page spread or 30-second spot does in the offline world.
So what *are* their needs? To address that, we need to step back, and think about media brands and marketing brands, and why there's such a symbiotic relationship between the two. Clearly, brands have built what I've called "packaged goods media." And in the past few years, I've come to the same conclusion about online media. In short, I think brands will also build the next batch of great online media companies. And up until recently, I thought Yahoo, AOL, and MSN were best positioned to be those companies. Now, I'm not so sure.
Interestingly, quite an anti-ad network meme has arisen since that post, spurred in part by the news that ESPN is opting out of them entirely. More on that later.
The Brand
But for now...what's my big fascination with brands? And why do I think brands are so important to the next step in the evolution of the web?
There are many definitions of what a brand is (here are a few), but here's my version (bricollage, certainly): a brand is defined by what its potential consumer says to others about that brand.
I'm sure there's a formal symbolic expression of that idea (ie, an algorithm), but I'm going to guess it doesn't scale. And that's pretty much the point.
Brands are, in essence, defined by the conversations your consumers have about your products or services (and yes, I am indebted to Cluetrain and Ogilvy and any number of other great thinkers, even Hopkins, who might justifiably be the bridge between direct response and brand advertising).
Brand advertising in traditional media has been about getting in between the ears of a target consumer in some way and "building brand equity" through media executions. In essence, brand advertising has been, up till now, an attempt to influence the conversation that potential consumers will have after experiencing the advertising.
With conversational media and marketing, that concept is time shifting. Now brand advertising can *join* and even *initiate and convene* those brand conversations. And that requires a different skill set, one media folks are just starting to explore. To date, we've just begun to figure out how to execute marketing in this new form of media in ways that work for all parties concerned - the content producer, the marketer, and the consumer. But that doesn't mean we won't. It just means we have very interesting work ahead of us.
It's Early Yet, Folks
Close your eyes and imagine leafing through your favorite magazine – Vogue, perhaps*. A two-page spread halts your progress - the image of a beautiful, sophisticated woman standing in the doorway of a crumbling Havana doorway, with an elegant brand – “Lancome” – etched in the lower right corner. Or perhaps it’s a spread in Fortune, an arresting montage of imagery featuring a Jaguar automobile, a model you’ve never seen before.
Now, open your eyes, and imagine the same experience online.
Having a hard time? (You're not alone.)
As marketers, we love scale, and we demand safety and quality. But we have yet to nail engagement.
Brand marketers are experts at using traditional media to build demand for their brands – over the past 50 years, we’ve perfected the art of the engaging spread, the irresistible 30-second spot. Online, however, we have yet to find our footing.
Instead, we’ve funded the first ten-plus years of the commercial Internet with direct response dollars, pouring “branded display” budgets into ad networks and CPC vehicles. We’ve tried just about everything, to be sure, and we do buy display units on our favorite sites. Yet we’re often disappointed with the performance they deliver.
To paraphrase Wenda Harris Millard, Chair of the IAB, we must not trade our brands like pork bellies. Brands are not commodities, so why are we judging our online marketing by the standards of direct response? Is it, perhaps, because we can? Or, perhaps, is it because we don’t know how to measure that magic that occurs between a consumer’s ears when they first see the image of a beautiful woman standing in a crumbling doorway?
To keep building our brands, we have to go where the audience has gone. And every month, according to Comscore, 600 million people visit conversational media sites – foreign lands when it comes to brand marketing. Or ….are they?
Clearly, I'm going to argue that it's more than possible to build brands in conversational media. In fact, I believe it's already happening. We're still poking around, trying to find our "thirty second spot for the Web," a standard format that scales and performs. We have our print and television standards. And we have our IAB units online. But clearly, IAB units are not there yet when it comes to building brands.
And that's OK. The commercial web is now a teenager – it’s been fifteen short years since Marc Andreessen released the Mosaic browser. To put this in perspective, television as a commercial medium reached its fifteenth birthday in 1956 - the year Elvis Presley made his first appearance on national TV. National news broadcasts were still in their infancy, As The World Turns debuted as America’s first half-hour soap opera, and The Price Is Right began its dominance of the game show genre. Commercial grade videotape recorders emerged, portable black and white television sets were introduced, and the first local color broadcast aired in Chicago. The thirty second spot had not yet reached scale. In fact, the dominant model was sponsorship and integration. (Remember Hairspray?)
Consumer Brands Love Media Brands, and Media Brands are Changing
Regardless of all the flux in how brand marketing might work online, here's one thing of which I am certain: Consumer brands love media brands. Why? Because the best media brands represent a passionate community who are deeply engaged around a subject of shared interest. Think of some of the best loved media brands - American Idol, Wired, Oprah, The New York Times. All places with a distinctly engaged audience. Consumer brands are drawn to these winners because they want to be associated with quality, sure, but also because they know that if they can just get their executions right, something magical can happen, and they can influence that space between our ears, and in the right context.
And as I've argued in the past, what constitutes a "media brand" online is changing, and dramatically. In the first version of the web, a small handful of Very Big Brands dominated the online media landscape: Yahoo, Excite, MSN, AOL. There was a second tier - Lycos, Netscape (not originally a media brand), etc. - but the big four dominated not only reach, but also overall ad spending. The delta between the major online media brands and the secondary ones was massive, the drop off from there to others (Hotwired, Salon, etc.) was even larger. In short, it was damn near impossible to create a successful, stand alone media brand on the web that had the same scale as, say, a middling cable show or a decent consumer magazine - anywhere from 250,000 to 2 million uniques.
The reason? Brand advertisers did not see the value, and it was way too hard to scale a media buy. To reach, say, millions of business leaders, advertisers could buy six business magazines or six cable shows and run the same creative. They could then see results - lift in brand awareness, perception, and sales. But online, it was hard to find six similar places to run the same creative, and even if they could, the results were not there. Those tiny IAB units were simply not doing what a two-page spread or 30-second spot could do. To get results, they needed massive scale - and they would not pay massive CPMs to get there.
This economic reality drove CPMs down, and the measurability of IAB units added another wrinkle - now marketers could see results directly, and compare them to their spend in direct response type campaigns. It was a race to the lowest common denominator. Portals, with massive traffic, began selling tonnage instead of brand engagement, and the cycle reinforced itself.
So Where Are We Today?
As has been reported widely, more than 80 percent of the advertising inventory on the Web today is sold for less than a $1 CPM. Compare that to the average sold CPM in the magazine business or on television - reports vary, but it's anywhere from six to 40 times higher. That delta, to my mind, has everything to do with engagement.
Or put another way, why is it that a brand marketer looking to reach college educated women, 18-34, is willing to pay $40 CPMs in Vanity Fair, but just $3 in an ad network?
The first and most important reason is engagement - the reader of Vanity Fair is engaged in the magazine, and when she comes across that Lancome ad, the chances that the "between the ears magic" will occur is far greater than at a random site run by an ad network. The second and related reason is creative - a two-page spread is simply a far more effective media vehicle for the brand's message than the IAB unit.
So how do we solve for these two problems on the web?
Well, with Conversational Media, I believe the Web already begun to solve for the first issue. Thousands of great sites have popped up in the past decade, driven by a search, a critical mass of online users, and the confluence of cheap or free platforms (LAMP technology, free publishing tools, and tons of other Web 2 services). Sites like Boing Boing, ProTrade, Graffiti Wall, Dooce, Left Lane News, TechCrunch - these are deeply engaging media brands. Thanks to the new economics of the web, these sites don't need millions of dollars to get to scale, and they don't need millions of dollars to run. And thanks to new approaches to the economics of the media business (yes, I believe FM is such an approach), they have a decent chance of breaking even and even making good profits.
What's very interesting about these new sites is that they are not, in the main, owned and operated by traditional online powerhouses. And that's showing in the numbers: all the hyper growth in the top 20 sites on the Web is with conversational platform and tools - the very sites which spawn new conversational media brands. "Old School" portals and media sites are growing far less fast (see chart below). According to JP Morgan: "While portals were once dominant, Yahoo!, AOL, and Microsoft only accounted for ~ 29% of minutes spent online in August 2007, down from 42% in August 2002. Meanwhile, blogs, online gaming, and social networking websites have experienced double to triple digit Y/Y growth rates in page views."
I believe we are at the beginning of an explosion in online media brands, akin to the explosion of consumer magazine brands in the 1940s and 50s, or the explosion of cable TV brands in the 1980s and 90s. With magazines and cable, we saw a move from a handful of major brands to hundreds of choices, all supported by major consumer marketers. With the Web, I think we can take that an order of magnitude further, or even more - from a handful (AOL, Yahoo, MSN) to thousands, or perhaps even tens of thousands.
But to do so, we need to solve the second issue - which is creative. And that's where I think conversational marketing comes in.
In my third post in this three part series (yes, this is the end of the second, congratulations, you made it!), I'll update my earlier post of a year ago, in which I outlined what CM is, with examples from the past 12 months. There are plenty of great new approaches out there, and they're well worth reviewing in one place. I'll also posit a few new ideas, and as always, hope to learn from your critiques and comments.
----
*This portion adapted from writing I did for the theme of FM's CM Summit, to be held in NYC in June, and the Web 2 Summit, to be held in SF in November.
Joints After Midnight & Rants, Media/Tech Business Models, Random, But Interesting
