I had a chance to be interviewed with Fred Wilson by Dave Morgan of Simulmedia (and Tacoda and and and…). The video is fun and ranges around from OpenCo to the future of the Web, so I thought I’d share it here:
Last week I was fortunate to be in New York City over the weekend, accompanied by most of my family. I had meetings with senior marketing executives at companies like Coke, Citi, and many others, and they stretched from the previous Weds. all the way into Monday of last week. I hate being away on weekends, and my wife is from New York, so she brought my daughters to visit their grandmother, who lives right in the middle of Manhattan.
Now, a weekend in New York with your family is special anytime, but last weekend was particularly notable because of the annual Pride Parade. This celebration of LGBT rights is one of the largest in the world, and this year’s was historic – just the week before, the Supreme Court had voted down the Defense of Marriage Act, a major civil rights victory for the gay community and, by extension, for citizens across the country. Last Sunday, our family joined tens of thousands of others who cheered the parade down Broadway, marveling at the exuberance and yes, sometimes at the show of skin as well.
But what stuck out with us was the pure joy of the day. Both my daughters, one fifteen, the other nine, joined in the celebrations, waving flags, cheering, and slapping high fives with passersby. Everyone was so happy, and the party snaked down Broadway for hours. What really struck me was the diversity on parade – gay fireman and policemen (that can’t be an easy world to live in) marched in uniform, followed by politicians like Mayor Michael Bloomberg and Sen. Charles Schumer. There were community centers on floats blasting dance music, and a long assortment of “firsts” – the first gay married couple in New York, the oldest married couple in New York, etc.
And then there were the brands. Yes, the brands – sponsoring the parade, and marching as part of it. I was prepared to be disappointed, and even cringed when I saw the first banner announcing a brand – I think it was Vitamin Water, a Coke brand. But instead, I was inspired. I had just met with many of the brands that were represented, and it made me proud to know the folks who had the courage to stand out and stand up for what was right.
As I watched the parade I was struck at how deeply and how honestly these brands were part of the celebration. Sure, Vitamin Water gave out free drinks, but the real story were the legions of employees – from Citi, L’Oreal, Wells Fargo, Coke, Delta and many more who marched, proudly wearing their company’s logo, proud of their individuality, proud of their voice, and proud that their businesses have stood behind them on their journey to this historic day. It felt very real – these companies clearly had backed their people on the long road to full civil rights, and their employees were proud to celebrate their brand connection – they very much believed that in their lives, the brand on their t-shirt had made an important difference. It was a very honest moment, and that’s not always the case when it comes to sponsorships and marketing. It should inspire all of us in the media business to follow the path of true human connection in our work. It certainly inspired me.
It’s been quite a six months, I must say. Personally I took back the reigns at a company I founded in 2005, found a co-author for my book, and hired a CEO for the company I started last year (he starts next week). But I haven’t been writing nearly as much as I’d like here, and that sort of saddens me. However, one of my “half year” resolutions is to change that, and it starts with this review of my Predictions 2013.
This year’s predictions were a bit different in that I wrote about things I *wished* would happen this year, as opposed to those I thought most likely to happen. They were still predictions, but more personal in nature. So let’s see how I did, shall we?
1. We figure out what the hell “Big Data” really is, and realize it’s bigger than we thought (despite its poor name).
Halfway into the year, I think there’s no doubt this conversation has picked up speed dramatically. The PRISM program, in particular, has thrown new light on how “big” big data really is, and what kind of a society we’re becoming as we all become data. I’d say that on this prediction, which was pretty easy to make, we’re well on our way to checking the box as “true.” The bigger point of my prediction had to do with how we, as a society, are coming to grips with the more far reaching implications of all this data. I’ll report back on that at year’s end.
2. Adtech does not capitulate, in fact, it has its best year ever, thanks to … data.
I think so far, I’ve been proven right here. Terry Kawaja, he of the famous Lumascape, has revised his charts to show a more than doubling of the companies in the space this year. While there have been plenty of deals, it doesn’t look like adtech is capitulating at all.
3. Google trumps Apple in mobile
I predicted that Google would come out with an iPhone killer this year, so far, this hasn’t happened (though many do view current Google phones as equal.) There are still six months to go, with the crucial holidays to come.
Also, there are many ways to measure “trumps Apple,” including market share (where Google has already surpassed Apple), profit (where Apple is still killing Google), and the softer “buzz,” which I have to say, Google is winning in my small world. For now, I think the jury is out.
4. The Internet enables frictionless (but accountable) payments, enabling all manner of business models that previously have been unnaturally retarded.
This is a “slow burn” issue, and I think we may look back at 2013 as the year payments got really, really easy. Square, Stripe, and Braintree are leaders here, and I really do sense a breakthrough happening. But I can’t quite prove it at midyear. Many, many startups are using these services as base ingredients for their business models, I can say that.
Related, I also predicted that major consumer-facing online platforms based on “free” – Google and Facebook chief among them, though Twitter is a potential player here as well – will begin to press their customers for real dollars in exchange for premium services. This is undeniably true. Twitter, Facebook, and LinkedIn have all been asking me for money for premium services this year – for advertising my account, or upgrading to “pro” services. This trend is well underway.
5. Twitter comes of age and recommits itself as an open platform.
I just don’t know about this. Honestly, I don’t know. On the one hand, the company has deprecated RSS to the point of it not being usable. On the other hand, the company stands for free and open speech like no other. What do you all think?
6. Facebook embraces the “rest of the web.”
Well, as I said in the beginning, this was a set of predications based on what I wished would happen. I predicted that Facebook would “make it really easy to export your identity and data.” I’m not really seeing anything that merits a “win” here, but maybe I missed a memo.
7. By the end of the year, Amazon will have an advertising business on a run rate comparable to Microsoft.
I think this has already happened if you take out Microsoft’s search business, but we don’t know it for sure because Amazon won’t break out its ads business. More here and here. Anyone have any more insights?
8. The world will learn what “synthetic biology” is, because of a major breakthrough in the field.
Well, given I’m not steeped in current research, I better ask my friend David Kong if this is true yet. David? Hopefully it will be by year’s end!
All in all, I think the predictions are faring well halfway through the year. What did I miss?
This short Slideshare deck, an extremely clever satire of the now infamous NSA slide deck, should be Slideshare’s marketing calling card. It’s a promotional gift to the service, timely, clever, and leveraging the product perfectly. If this ever happens to you, use it in your marketing!
Waaay back in the late 1990s, I started a conference called the Internet Summit. My co-producers were Bill Gurley, who remains one of the giants in venture over at Benchmark, and Mary Meeker, who was at that point the best analyst in the Internet space, at Morgan Stanley. The Internet Summit had its last event in July of 2001, and the space was taken over by Kara Swisher and Walt Mossberg, who went on to launch All Things Digital, which has thrived to this day. I went on to launch the Web 2 Summit in 2004, and it was at that event that Mary started presenting her annual Internet Trends deck. I put her in one of my typical “High Order Bit” slots, ten minutes max, and each year Mary would lobby for more time, and cram more and more data and insights into her alloted time (by the last time Mary did it with me, it was 15 minutes and about 90 slides).
I stopped doing Web 2 in 2011 (OpenCo is the new black, natch), and Mary migrated her job to Kleiner Perkins and her presentation to All Things Digital, both great moves. Last week she unveiled her latest work, and I notice it’s gotten up to 117 slides. I missed All Things D due to a client event at P&G, but I bet she got more than 15 minutes to present it!
This deck is always worth the time to review. You can download it on KPCB’s site, and I’ve embedded it below.
Thanks to our sponsor Google, we got the full first day of last week’s CM Summit, featuring Fred Wilson fresh from the Tumblr deal, Pinterest CEO Ben Silbermann, and about 20 speakers in between for your viewing pleasure. Enjoy!
The world is atwitter about Tumblr’s big exit to Yahoo!, and from what I can tell it seems this one is going to really happen (ATD is covering it well). There are plenty of smart and appropriate takes on why this move makes sense (see GigaOm) but I think a lot of it boils down to the trends driving Yahoo’s massive display business.
If there’s one thing we all know, it’s that a new form of native advertising is spreading throughout the Internet. It started with Google and AdWords, it spread to Twitter and its Promoted Tweets, and Facebook quickly followed with Sponsored Stories. At FMP, we have sponsored posts and our Native Conversationalist suite, which we are scaling now across the “rest of the web” – the smaller but super influential independent sites that we believe are major suppliers of “the oxygen of the Internet” – the content that drives true engagement. Other companies are adopting similar strategies – Buzzfeed is building a content marketing network, and Sharethrough has moved past its “wrap a YouTube ad in a player and call it native” phase and into more truly native units as well.
The reason native works is because the advertising is treated as a unit of content on the platform where it lives. That may seem obvious, but it’s an important observation. When a brands’s content competes on equal footing alongside a publisher’s content, everyone wins. Those search ads – they win if they are contextually relevant and add value to the consumer’s search results. Those promoted tweets only get promoted if people respond to them – a signal of relevance and value. The same is true for all truly “native” ad products. If the native ad content is good, it will get engagement. The industry is evolving toward rewarding advertising that doesn’t interrupt and is relevant and value additive. That’s a good thing.
Left out of this evolution, until now, has been Yahoo!. When you break it down, Yahoo! is a Very Large Display Advertising business, with a hefty side of search and a bit of this and that on top. And that display advertising business is going through a wrenching shift, as buyers move to more efficient programmatic channels (for a visualization, see my last post). CPMs (cost per thousand, the unit of value for display advertising) are rapidly declining for “standard display” units – the boxes and rectangles that built Yahoo! and much of the rest of the web.
It will take a couple of years for those ads to A/evolve into new forms that are standardized and B/be driven by data and real-time programmatic rules in ways that brands can really trust (it’s already working for direct response, but that’s not the end game). Display will always be around, but as I said, it’s in a significant evolutionary phase, and the short to mid term reality is this: CPMs are dropping, and Yahoo! has a massive display business.
At the same time, we’re all shifting our attention to mobile devices, and we’ve adopted the “stream” as our preferred method of content discovery and consumption. That stream doesn’t work so well with standard display. But it’s great for native units.
Yahoo! is already shifting its home page and other content sections to a stream like interface. Tumblr offers only native ad units (founder David Karp lifted his strategy pretty much wholesale from Twitter’s “the ad is the tweet” philosophy). And Tumblr was built from the ground up as an activity stream.
I’ll write another time about how I believe that display and native will eventually merge – via the programmatic exchange. For now, Yahoo’s move gives it an asset that its branded display sales force can sell as sexy: native, content-driven advertising at scale. A good move.
I’m very proud to announce “Behind the Banner“, a visualization I’ve been producing with Jer Thorp and his team from The Office for Creative Research, underwritten by Adobe as part of the upcoming CM Summit next week. You can read more about it in this release, but the real story of this project starts with my own quest to understand the world of programmatic trading of advertising inventory – a world that at times feels rather like a hot mess, and at other times, like the future of not only all media, but all data-driven experiences we’ll have as a society, period.
I’m a fan of Terry Kawaja and his Lumascapes – Terry was an advisory to us as we iterated this project. But I’ve always been a bit mystified by those diagrams – you have to be pretty well steeped in the world of adtech to grok how all those companies work together. My goal with Behind the Banner was to demystify the 200 or so milliseconds driving each ad impression – to break down the steps, identify the players, make it a living thing. I think this first crack goes a long way toward doing that – like every producer, I’m not entirely satisfied with it, but damn, it’s the best thing I’ve seen out there so far.
I am deeply grateful to all the folks who helped us make this happen, in particular Jared Cook at Adobe, and a legion of leaders in the industry who reviewed early versions, including Walter Knapp, Bill Demas, Ned Brody, Brian O’Kelley, Ann Lewnes, and dozens more who helped me research and imagine what this might end up looking like.
So take a look and tell me what you think. It’s far too complex to embed here, so we have it running over on the CM Summit site. If nothing else, it should get folks talking, and I hope you’ll help us make it better by leaving a comment here, or sending me mail with your thoughts.
Oh, and while you are at the site, check out the conference lineup. We are almost sold out of tickets, and it’s going to be one heckuva conversation, so please join us!
In case you have any interest, here’s a short clip of me opining on Google Glass and the upcoming OpenCoNYC, which is going to be HOT. More on that soon.
I’ve been a bit slow to update this site lately, as my return to Federated Media, and preparation for the CM Summit and OpenCo NYC, have pretty much eaten up all my time lately. But I did want to repost a few things I have written elsewhere, starting with this article in Ad Age, written two weeks ago.
Titled Publishers, Ad-Tech Firms, Marketers Need to Connect, Build Trust (no, I didn’t write that headline, if I was in charge, it might have been “Hold Hands or Die Apart” – pageviews, ya know?), the article argues that our industry is not yet prepared for what the market is going to demand – solutions that integration adtech and brand marketing. Here’s a sampling:
Something troubling has jumped out at me. There’s an extraordinary asymmetry of information among these three important players in our industry, and a disturbing sense of distrust. Brand marketers don’t believe that ad-tech companies view brands as true partners. Ad-tech companies think brand marketers are paying attention to the wrong things. And publishers, with a few important exceptions, feel taken advantage of by everyone.
Here’s a representative sample of things I’ve heard:
“If I had it to do over again, I am not sure I’d be in publishing. You can’t win over the machines.”
“Brand marketers are wasting their money. If they’d just get smarter about data, they’d realize content doesn’t matter — what matters is leveraging what you know about a customer. They’ll never get it. “
“The Lumascape has devolved into a pay-per-click machine. Tech companies are too full of themselves. I don’t trust them. It’s a “black box.’ “
“Agencies and technology companies are leveraging their data advantage to arbitrage publishers’ inventory — and even their marketing clients’ spend — so as to pad their bottom lines.”
“I won’t put any of my inventories on exchanges — the last time I did, CPMs were so low it was embarrassing.”
This isn’t a pretty picture. But even as I hear statements like these, I also hear story after story about how data-driven marketing practices are working. Publishers like Forbes, Ziff Davis and Weather.com have seen revenue from “programmatic premium” rise to as much as 20% of total top line, up from 5% or so just a year ago. (Programmatic premium is the practice of running premium inventory through programmatic channels in ways that “protect” that inventory, such as building private marketplaces or adding publisher first-party data.)
Smart marketers are leveraging ad tech to drive real brand lift, conversion and sales. And a platoon of top ad-tech companies are preparing to go public in the next 12 months, hardly a sign that they have business models built on shady business practices. (We’d do well to recall that Google went public one year after “click fraud” was considered pervasive in the search marketplace.)
What we have here is a failure of communication and shared values. The brand marketers I speak with acknowledge that they don’t understand how to map their brand-building skills to the offerings of ad-tech companies. The ad-tech companies confide that they don’t understand the motivations of brand marketers (nor do they believe it would be profitable to try).
For more, head to Ad Age.