Browsing articles from "January, 2008"

Measurement Is Money

Measurement and analytics have always been critical in any medium where advertising is the primary revenue driver. That’s because measurement – an online currency used to value media space – creates the financial relationship between advertisers and media networks, e.g. publishers, web site developers, TV networks, digital billboard companies, and others who carry advertisements.

Analytics also help both publishers and advertisers understand their audiences. They answer the question of who is reading or watching, what categories they fall into, how much money they spend, and on what. As each new medium has come into being, new forms of measurement and analytics have emerged to provide demographic insight and determine value.

One of the most recent and exciting spaces is online video. Already, some 63% of the US Internet population consumes video on the Internet. Today we see that in the consumption of user generated content on sites like YouTube as well as on sites operated by large media companies such as MTV and others. We know this shift to online viewing is happening because “Did you see Seinfeld last night?” has been replaced by water cooler discussion about specific clips.

What does all this mean?

  • Consuming video on the Internet is now a mainstream consumer activity
  • Content producers, publishers, and advertisers are struggling to figure out how to finance and monetize online video
  • Confusion persists about how to track, measure, and analyze viewer behavior patterns

Check out two companies helping to solve these problems: Visible Measures and Fliqz.

Jan 28, 2008

Customer Service Summit

Almost two decades ago, Bill Davidow, one of the founders of MDV, authored Total Customer Service: The Ultimate Weapon. Lane Becker and Thor Muller at Get Satisfaction are now taking it one step further with their declaration that Customer Service is the New Marketing. They’re putting on a one-day summit to bring together the best minds to talk about it. We’re excited to be sponsoring the event’s lunch with round-table workshops on February 4 in San Francisco.

CustSvc

Demand generation the old way was a well-understood activity. Companies allocated a given budget. They then spent these dollars at conferences and events that people attended in-person, in print-magazines, and in getting placement of articles and quotes in trade journals and with leading analysts. Their customers called them or went to a store, bought the product, and everyone lived happily ever after. Except that customers were dissatisfied and disconnected from the companies whose products they bought.

The Internet and web marketing changed all that. A giant shift occurred, from product to customers. Today it’s not sufficient to build a great product. Getting product to market is like getting to the starting line. Building your community and interacting with your users and customers is where the real race occurs.

With Genius.com, we’ve seen first-hand how companies are marketing online. What started as a multi-step process – advertise in a search engine, drive traffic to a landing page, put the lead into a database, and then have a sales person follow up – has turned into an immediate interaction. With Genius, sales and marketing reps can now tell if a customer or potential customer is on a company’s web site and interact immediately, online.

Web based forums, wiki’s, blogs, and other online collaboration and discussion mechanisms are providing a new way to interact with customers. Rather than trying to manage the infrastructure for their online communities themselves, as with so many other areas of IT, companies are turning to hosted software like PBWiki and Thor and Lane’s Get Satisfaction offering. By using these collaborative and open mechanisms, companies are turning what could be a support burden into an incredible asset, with users helping users. A loyal customer base is the result.

On the consumer side, individuals of every age are now managing their own online communities. Facebook, Linkedin, and other large social networks are a few leading examples. With hundreds of millions of users in aggregate, these networks illustrate just how important the ability to define and interact with your online community has become.

Bill Davidow was right: Total Customer Service is the ultimate weapon. Head over to the Customer Service is the New Marketing conference on February 4 to find out how to put that weapon to work for you.

Jan 15, 2008

The Big Switch: The New Tech Investment Wave

Nicholas Carr, famous for his article IT Doesn’t Matter has written an interesting new book, The Big Switch. I haven’t finished it yet, but so far it’s an excellent read. That computing is switching from in-house to utility, much as electrical power generation went from in-house to utility, is an incredibly powerful premise. But the title might well also refer to an underlying fundamental switch in Tech investing: from traditional client-server to cloud-based. What Carr refers to as the move to the World Wide Computer is driving nearly every aspect of today’s IT investments and providing an incredible new wave for entrepreneurial innovation.

Eighteen months ago, Software as Service (SaaS) IT investments were an emerging trend. Now, they’re mainstream. Many investors were just starting to look at the space as consumer started to become over-crowded. Including SaaS in your pitch was a differentiator, but it no longer is. Just about every Tech investment has at least a component if not a majority of its offering that is delivered as a utility

Even appliance companies are moving into the cloud; security and anti-spam companies have managed offerings that customers use over the Internet. Salesforce.com is of course the most prominent Business to Business (B2B) example – few predicted five years ago that critical enterprise data would be stored outside the firewall, but it is.

But the real leading indicator of the switch to a service based model was and continues to be consumer Internet companies. Their users spend hours a day communicating with each other over these services. Much as they use the telephone as a voice communications utility, they use social networks as their online communications hub, and they have similar expectations around ease of use, reliability and responsiveness. Not only could they not get this functionality from a traditional desktop application, but the use of the system – as a communications hub, would not be possible in traditional form.

Of course, Google is today’s example of a consumer utility; not only the search service itself but the huge data centers underlying the software. Looking back a few years, Hotmail was one of the earliest consumer Internet utilities, with hundreds of millions of users. Just as occurred with electric power generation, even large services delivered as online utilities are now looking to shift some of their computing infrastructure to a utility provider such as Amazon S3, among others. Numerous early stage startups are also leveraging this form of utility because it is so easy to adopt.

An interesting hybrid is also emerging. Today’s consumers are bringing their personal online applications to work with them. Users of wiki’s start out as consumers but grow into business users. As they do, they bring their wiki’s with them to work. A few months ago, one wiki company received an interesting request from an enterprise customer asking if they could come by the office to inspect the company’s computer systems. All of the company’s production servers are, naturally, off-site.

Will there be one massive World Wide Computer that grows into an artificial intelligence system? It’s hard to say. But one thing is for sure. Large outcomes in IT venture investing have historically come in waves: numerous companies became successful riding the mainframe wave, the PC wave, and the Internet wave. Even a recession won’t stop another wave of companies from becoming highly successful riding the utility computing wave. The big switch in tech investing is on.

Jan 9, 2008

Tray Table Advertising

I travel a decent amount, yet today was my first experience with tray table advertising, which was first rolled out nationwide in 2006. What a surprise to pull down the tray for a place to put my water only to find an advertisement for AirBorne. Even though it was static, it seemed remarkably contextual. I was on a plane ride breathing sneeze-filled air wondering when I could buy some AirBorne to keep me healthy.

Looking on the web, some people clearly feel that this form of advertising violates their personal space. Perhaps I am involved with so many companies in the advertising space that I expect ads to be everywhere, even airplanes. After all, I’ve seen plenty of advertisements in in-flight entertainment and no shortage of paid programming. The flickering TV screen on a cross-coast red-eye is certainly a lot more personal space violating than any ad on a tray table, which I can easily return to its up-right position.

According to SkyMedia, independent market research shows a 98% exposure rate, a 92% recall rate, and a 25% increase in purchase intent from tray table advertising. Plus, there’s a great spin on the static nature of the advertising: it delivers a single, exclusive advertisement with some 3+ hours of exposure time. There’s something to be learned here. This isn’t just any marketing: it’s the marketing of marketing.

Advertising is everywhere. So forgive me if I wear some MDV or portfolio company logoware to our next meeting. No good ad space should go unused.

Jan 7, 2008