Category Archives: web 2.0

Marketing and Editorial – The Line Blurs

Reading Stefanie Olsen’s summary of this evening’s sessions from the Conversational Marketing Summit (another great example of why living in Seattle can be a PITA when the center of the web 2.0 is 700 miles away and staying here can mean missing out on interesting events) reminded me of how blind the world can be to the reality of the world around them. The tone of piece and likely the same for many readers is that there is still this chinese wall between editorial and marketing. As Seth Godin noted in his book All Marketers are Liars (one of my favorite godin books even if overlooked in the canon of godin books) people love to tell themselves stories about their idealized view of the world even when deep down they know the truth is often much more crass. And with the rise of huge financial incentives for publishers of online content to conform to contextual ad-targeting technologies and payouts – the line has already been covered up much the way batters cover the line at the back of the batter’s box.

The notion of content as a non-commercial, purely for spreading the soul of the creator is a fantasy and myth that has lived for centuries. DaVinci and Michelangelo did works for hire. Their masterpieces were all commissioned works – that means they were done for commercial purposes. Dickens was paid by the word and boy did he get his money’s worth as any high school lit student will tell you. Newspaper have lived for sensational head lines because that sold newspapers – and in the old days (see Deadwood) the publisher and editor were one and the same person. Having worked at Disney I can tell you that many folks view Disney animation as the infomercial department. Each animated movie a 2 hour commercial for the rest of the Disney merchandising empire.

It sounds crass but you know what? It isn’t.

People like brands, they like commercialism when it means something to them. It’s why people pay to where Nike logos – that’s because Nike stands for athletic performance. And when content and editorial reinforces that brand it works for them.

Now let’s fast forward to the world of web. What has happened particularly when it comes to content is this tiny little thing called Google Adsense. See what Google Adsense does is match banner ads based on keywords on a webpage. So now folks who write for websites or blogs have a financial incentive to write for the ads. In some cases this has lead to spam sites (the very ones that inspired Jason Calacanis to create his latest venture Mahalo) and in other lots of sites and blogs dedicated to high-paying & popular keywords (see travel, finance, etc.). The people who publish those sites definitely have one eye on their Adsense earnings whenever they write (do a search for top paying adsense keywords and you will see exactly what I mean). So in a world where contextual advertising rules the day, then that world will likely have a very blurry line between marketing and editorial.

valleywag and micropayments (been there done that)

Valleywag has an essay today pitching hard for a future of micropayments.  Would the madness stop.  As many, many, many folks have discussed many, many, many times micropayments are doomed to failure.  Having a lot of experience in consumer marketing online, I can confirm the theory that the biggest drop in sales is when you go from free to 1 cent.  That hit on users that imposing even a 1 cent price or tax creates has doomed every micropayment service to ever hit the startup landscape (there should be an entire section for these companies in the proverbial startup graveyard).

The good news is in all of this is that there already is a $17 billion dollar micropayments business online.  What didn’t I just say that micropayments are DOA?  Yep, but there is an alternative – advertising.  Advertising is by FAR the best solution for monetizing micropayment level transactions.  Advertising can easily cover a penny for something price.  That’s why the web 2.0 universe is free.  It’s not free – it’s just being paid for by advertisers who are more then willing to pay you way.  Is this a new model?  Nope, broadcast TV has been using the same model for 60 years.

sometimes we forget where we are on the curve

Friend and colleague Renee Blodgett (she can blame me for getting her involved in the people search engine startup Spock) wrote an interesting post about what she calls the web 2.0 echochamber.  Her point is that we in the online startup business can get wrapped up in the new and latest tech fad but often forgot our place as super-eager early adopters of new technologies and services.  To her point, my brother a 33yr old manager of a TGIF’s restaurant back east has never heard of half of the web services that Renee’s friends insist everyone is using.  My mom can still barely turn on a computer and my Dad, a pretty middle of the road adopter of new things, has barely heard of anything beyond yahoo, amazon.com, ebay and espn.com.  As a marketer, it’s easy to forget sometimes, just because it seems cool, doesn’t mean it’s mainstream.  And if it, whatever it is, doesn’t solve a real problem for a large group of people, then it’s not likely to go mainstream. 

Is it a generational thing like Renee posits?  Nope, I don’t think so.  We just sometimes forget the whacky insular world we live in SF, the Valley, Seattle and sometimes LA.  Does that mean Twitter isn’t important or potentially huge? Nope.  As the next generation comes of age – they like their previous generation’s counterparts in Europe and Asia are much more mobile.  But let’s not rush to distraction, remember not everyone is as infatuated with the latest and greatest as we are.

web 2.0 expo thoughts and feedback

First I tend to agree with this blog post that for the most part I was underwhelmed with web 2.0 expo.  After the raging zeitgeist, that was the web 2.0 summit from last fall – it was probably too much to expect the show to live up to the hype in my own mind.   Now this isn’t the fault of the organizers (including pal Dave McClure) – the challenge is the web 2.0 market has moved mainstream in only a few months.  The companies that are going to make it are already making money or have enough investor’s money to figure it out, or have been acquired by a larger media copmany like Google or Yahoo!, or have already imploded and ending up on TechCrunch’s Deadpool list. 

Now there were a few companies and/or products that I thought were interesting in no particularly order:

  • Spock (disclosure – I worked with these guys for a little while this past winter) - great demo from Jay (one of the co-founders and vp of product even though Battelle gave him a promotion on stage from vp to ceo) showing how the idea of people as the object of the index of a search engine really can change a well known paradigm.  Googlng yourself will soon be replaced by Spocking yourself. 
  • Adobe’s Apollo platform – this successor to flash potentially offers all the richness and advanced functionality that Flash lacks.  However Apollo’s penetration will take years to build.  Remember Flash roled out in the mid-90′s and took almost a decade to reach ubiquity.  Whether Flash is eaten by its child Apollo or whether Flash continues to grow will be interesting to watch.  Startups like Dekoh which offer similar platform vision will have a hard time swimming against the dollars, resources and entrenched developer network that Adobe has.  Their best hope – get bought by someone who wants to go toe-to-toe with Adobe.
  • G.ho.st – cool concept and plays on the computer in the sky concept that I have been writing about this time as a literal computer in the sky.  It’s built on Amazon’s web services and I look forward to playing with it.
  • Dapper – great concept – widgetize any website or build an api for any website that doesn’t have one.  Potentially very useful service when trying to incorporate random third party services that aren’t built for it.  Not sure I understand how they’ll make money (and thus stay in business) but it looks plenty cool.

One of the areas which I thought was missing from the expo was the lack of focus on monetization.  This to me is still the elephant in the room that no one is talking about.  Unless the web 2.0 world is happy living off of $0.25 to 0.50 cpm’s, then it’s something that will need to be addressed at some point (I have my own ideas naturally).  Time will tell.

It’s a small world after all

One thing about working in online startups is to remember never burn bridges because you never who or when you will bump into someone from your past.  It’s a small world after all.

I had a few such experiences this past week at the Topix party around Web 2.0 Expo (BTW – thumps up to Topix – great venue and guest list). 

First I ran into Alison Macondary former GM of Wired News.  Well a few years ago the company I was almost acquired Lycos including Wired News.  It was fun to trade a few war stories about that deal which resulted in one Daum acquiring Lycos (ed. note – one of the major – huh? as in what are they thinking deals of the last couple of years).

Then I ran into Kurt Buechler currently SVP of Sales and BD for Aggregate Knowledge (as Loomia calls it – AK – they are a Loomia competitor).  Kurt once upon a time was the head of BD for Windows Media back when I was at Loudeye.   Kurt was a major partner of the company so I knew Kurt quite well as we were jointly trying to expand the digital music landscape.

Later Kurt “introduced” me to the CEO of AK – Paul Martino.  Paul and I immediately recognized each other and then realized we had done a deal together back when he was at InterTrust many moons ago while I was at Loudeye.  Needless to say Kurt, Paul and I wasted no time in trading all war stories.  Even as competitors now, it is nice to see old faces in new places.

Off to Web 2.0 Expo

I’ll be in San Francisco the next few days for the Web 2.0 Expo.  My pal Dave McClure was one of the planning advisors and as such I am sure it will be a great show.  I’ve discussed a lot of the themes that interest me and I expect more to cross my list but here’s a few I’ll be paying attention to:

  • Monetization through advertising
  • Applications in the Sky
  • Vertical Search
  • Personalization

it ain’t no damn bubble

Alright the title’s really a double negative, but the slang sentiment makes my point.  We’re not in a bubble the way we usually think of bubbles.  The Tulip Bubble was a bubble, the Stock Market 98-01 Bubble was a bubble and in some areas(note: as my friend dave berson, head economist at fannie mae would say – there is not a national housing market there are 300+ local ones) there is a mortgage bubble.  With all true bubbles one of the key features is broad public participation.  Given no Web 2.0 copmany has gone public there isn’t a Web 2.0 bubble.  Is there a lot of investment in internet startups these days? Sure, but given the closures of a number of VC funds (see Apax Partners for instance) sanity still rules in the long run. 

Am I glad there isn’t a bubble? Damn straight.  Having been a participant in the online startup eco-system since ’97, the last one caused even good ideas and investment opportunities to go dry.