Aha Media

Hanging headlines...

2010-02-25T21:11:00.002-05:00

Quite frequently, I will click on a headline on a news site like CNN.com and it will take me to a page where the said article is not yet posted. I'm assuming this is because they have made the correct updates in their CMS system but the cache servers have not caught up. Regardless of the technical issue, this is really an annoying user experience and would mystify many users who may not understand that content is being cached all over the Internet. I'm surprised they haven't solved this problem yet.

Interesting research on Facebook persuasion

2010-01-25T15:23:00.004-05:00

Colleague today reminded me about BJ Fogg's research at Stanford on the persuasive psychology of Facebook. Check him out at http://bjfogg.com/. I ordered his book and am interested in learning more about his work.

Excited to share some of our own research on influence and change using online platforms in the coming months.

Another reason for ad revs to drop

2009-04-29T09:22:00.002-04:00

Every time I quiz someone in traditional media about audience measurement, all I hear is how horrible and inaccurate the current measuring techniques are...Nielsens, Arbitron, etc. And yet, billions are spent based on the best "guesses". The web is better but there is still no clear standard. Because bigger numbers drive bigger deals, the tendency is of course to skew data upward. The marketplace will settle on standards and technology that will represent a more accurate representation of audience size and behaviors. We are getting better at this all the time. This is going to be the only way to make sense of the "infinite" inventory and separate the 'wheat from the tares' in terms of quality properties for marketers to spend money.

As this shakes out, only the obvious "prime time sites" will continue to enjoy the highest inventory sold rates with high CPM's, while everyone else will barely scrape by. And, the overall dollar spend will drop as dollars continue to shift from traditional media (where measurement is most ambiguous) to digital (where measurement is closer to reality).

UI dominance

2009-03-26T10:30:00.002-04:00

Online application development is really now a commodity exercise. Its amazing how fast and how easy and how inexpensively one can develop a robust, database-driven application. So how to online companies win? You can create clever features but there is so much pressure to be open and collaborative in order to get attention that clever features don't stay proprietary for very long.

User Interface, which at one time was relegated as the very last thing to throw together, is rapidly becoming a key variable (and maybe the key variable) to win. Look at Yahoo's comment today where they said they have tested over 141 front page designs to see which one can be the most sticky. Ease of use is a big part of today's value proposition and can't be ignored.

Spiralfrog shuts down

2009-03-20T13:43:00.002-04:00

Ad-supported music is a nice idea but the math simply doesn't work. The labels have cornered themselves into having the monetary value of music be relegated to be a loss leader.

CTR data

2009-03-12T12:43:00.004-04:00

Interesting report on click through rates in Europe against 10 billion impressions. The rate range was from 0.11% to 0.19%, settling in at 0.12% after the holidays. What was interesting to me is that in 2004, click through rates were at 0.33%. The article also speculated that although online video click through rates were markedly higher, that they would also face a decline once the "novelty" wears off.

Publishers would be wise to pay attention. The more they can integrate an advertising experience that yields high click through rates that don't bastardize the user experience, the more likely they will be left standing as the market continues to mature.

Dynamic ad insertion in live stream - its about time?

2009-03-10T16:44:00.002-04:00

ESPN360 announces dynamic ad insertion in its live simulcasts starting with March Madness. I'm kind of surprised it has taken this long to work this out. Cable still not there...

Heavy social media contributors becoming a meaningful number

2009-03-09T15:54:00.003-04:00

Interesting statistics released in a new report by Netpop Research. Among the data most interesting to me was that 7 million Americans are "heavy" social media contributors (6+ activities) who connect with 248 people on a 'one to many' basis in a typical week.

This figure reminded me of 80:19:1 rule that was written a lot about the past two years segmenting web audiences into passive audience (80%), content creators (1%), and the content curators (19%). What group would this 7 million 'heavy social media contributors' fit into?

As the value of social media becomes more apparent and meaningful to all segments of web users, my guess is that the 80:19:1 theory starts to look like an antiquated idea. Social media tools and applications will continue to be so easy to handle, that depending on context, any given person may play any one of those three roles.

I have seen many technology companies have deep strategic product conversations about how to divide up features to cater to each user type but I think those companies will be better served focusing on having the best content or most interesting conversations shine on a page at any given time. Have to go think about this some more.

Ad dollars skewing towards search and niche sites

2009-03-09T15:47:00.004-04:00

According to a report by Razorfish:

"As the economy began to soften toward the end of the year, we witnessed a renewed focus on search because it delivers a stronger ROI than many other tactics," said Sarah Baehr, vice president and national media lead at Razorfish. "We also saw a continued shift in digital ad spending toward niche sites as clients realize the value of targeting precise audience groups."

Making sense out of putting up effective campaigns on niche sites is exactly what Reptide Media is doing (shameless plug as I am a Director of the company).

More monetization thoughts

2009-03-05T16:27:00.003-05:00

Last week, I started to write about a recent report that stated that only 10% of a publisher's inventory is directly sold, the rest being left to the mercies of ad networks. While recent efforts to optimize placements within ad networks will likely continue to enjoy incremental eCPM rates for many publishers, its not going to be enough to change the fact that display ad revenue alone cannot make a content company into a real, profitable business.

Late last year, I wrote:

If you are an online web property with aspirations to grow into a large, profitable business, you have some serious challenges to overcome.

If you are a content-centric company, your revenue growth increases linearly with your audience growth but so does your cost structure. So the more money you make, the more money you lose. What major stand alone content-centric site or online magazine is actually a viable business today? (There may be some, please point them out)

For social networks, the problem is more difficult. Like content companies, your revenue growth is also linear to audience growth but your cost structure may be exponential. I hear that Facebook has significant cost issues see (http://www.techcrunch.com/2008/10/31/facebooks-growing-problem/). They have a plan to buy an additional 50,000 servers - is revenue growing at the same y-axis rate? Um, not even close.

What does this mean for online companies? There needs to be some variable on the revenue side that makes an exponential difference to get to profitability. A significant jump in average CPM for a site's entire inventory (not just small discrete campaigns) is the most obvious. Can you get from sub-$2 eCPM to $10 or $20? The market is not big enough yet for the numbers to add up for that to happen quickly (online ad spending is not going to jump 400% overnight). The horrible economy may actually help some in that the very best sites could see significant jumps as they focus more faithfully in wooing advertising dollars while keeping their cost growth more in check.

Another revenue side option is to find non-advertising monetization techniques...I have thoughts on that to share in another note.

One can also hope for technology innovation to find exponential savings on the infrastructure side of things but it seems that user consumption is staying ahead of any significant bandwidth or storage savings that technology has provided.

The stat that only 10% of a publisher's entire inventory yields premium eCPM's underscores this whole point. You can't rely on ad dollars alone to build a business. The 10% number faces downward pressure as the growth of publishers exceeds that of ad spend growth (I think). Although this revenue should represent one of the strongest revenue streams for the publisher, it can't be the only one. I think there is a big opportunity for products that help online publishers monetize their audiences in other ways.

Time Warner's plans for putting network content online

2009-03-03T23:40:00.002-05:00

'That's pretty smart' was my reaction to my first read through the reports of Jeff Bewkes description of what Time Warner is planning with "TV Everywhere". The idea to charge for access through an already existing payment plant (Cable TV) and mature the notion of the rights associated with that payment to 'access anywhere' can be both attractive to consumers as well as create more ad inventory for the networks. I would bet that they will insist on authenticating through the email address associated with the cable account thus mitigating against rampant unauthorized access.

Of course, with some cable networks likely not to participate, some consumer frustration and confusion will exist but who would have thought that the big time operators would have thought up such online friendly terms even 2 years ago???

Worth of an opt-in email newsletter subscriber?

2009-03-02T09:46:00.003-05:00

The worth of an opt-in email newsletter subscriber is simply more valuable than a regular user/visitor of your site. Arguably easier to program, higher click thru rates, higher CPM's, and overall a more consistent money maker. Hasn't been bad for entrepreneurs of Daily Candy, Thrillist, IdealBite, or Dogster either!

Are your Facebook friends really all your friends?

2009-03-02T09:37:00.003-05:00

A research scientist at Facebook (has Facebook really grown to the point where they have an inside research scientist??) recently revealed some statistics on its users' behavior on the site. Despite some users having hundreds of friends on Facebook, people still at their core only really interact with a small circle of intimate friends and that social networking is really just broadcasting their lives to an 'outer tier of acquaintances'. Makes sense, right? Time and attention for any given person is finite while adding 'friends' on a social network is not.

This research is based on a person's Dunbar number. This is a number attributed to British anthropologist Robin Dunbar who theorized that human's have a limit to the number of meaningful relationships any one person could have (it seems that the average number is about 150).

So do you have a high or low Dunbar number?

Online advertising marketplace - 10/70 rule?

2009-02-27T22:27:00.002-05:00

10% of advertising (usually sold directly) for publishers account for 70% of total revenue, the rest being low, low CPM stuff from an array of ad networks...I'd like to write more on this later but for now, here is the link.

Ad money will continue to be spent

2009-02-27T14:11:00.002-05:00

Interesting comments from Rino Scanzoni of WPP yesterday.

Interestingly, Scanzoni said the ad recession of 2009 won't be nearly as severe as the ones that occurred either in the dot-com bust triggered recession of 2001, or the previous one that occurred in 1991, because he said advertising budgets had not been running up as quickly this time leading up to the overall economic crash.

"We're not coming off a huge growth uptick," he said, implying that 2009's comparisons with 2008 wouldn't be as severe as earlier recessions as a result.

He also said that the ad recovery would lag the overall recovery by 6-8 months. Marketers still need to get their message across to audiences and online still has great appeal to run a measured campaign despite it all.

Power of the inbox?

2009-02-27T14:07:00.000-05:00

Strong numbers for email marketing ad dollars.

Digg toolbar quick thought

2009-02-26T20:51:00.003-05:00

Reports today of a new Digg toolbar. Makes a lot of sense. Social media is maturing quickly and more and more would-be passive users are getting more comfortable engaging online. I think 2009 will bring a lot more neat innovations to allow people to share more easily and more comfortably. Big opportunities for companies who can also make this fun and entertaining. If the last few years has been the era of getting content published online, the next few years can be the era of great features and products to share and engage with it, the combination thereof may actually help online companies turn into actual businesses.

Is facilitating playable search copyright infringement?

2009-02-25T12:27:00.003-05:00

This suit, although not without interesting a story line behind it, is important to watch because of the implications of the outcome. EMI is suing Seeqpod because it is a service that points users to music that is playable. Seeqpod does not host the files. From a technical breakdown, some judge is going to have to decide whether there is a distinction between indexing meta data (including where a file is hosted and what the file type is) and presenting that index to a user base and where does copyright infringement begin and end? Further grey area is how that presentation is packaged, which in Seeqpod's case where it has a player-like UI, does make it look like much more of a facilitator than say Google search results.

PubMatic's API - what specifically does it do?

2009-02-25T09:28:00.002-05:00

Press release is too vague for me...can anyone tell me exactly what we can do with this API?

Live streams of Obama's speech

2009-02-25T09:25:00.002-05:00

Hulu kept on freezing up although the audio kept up ok. I also watched part of the time on CNN but their Facebook feature was really annoying. I like the idea of interactivity of audience members but we have to figure out what is going to be the right user interface. I preferred NBC's commenting feature on their online player during the Olympics which did not seem to interfere with the passive quality of sitting back and enjoying the show.

iPhone - making mobile real

2009-02-23T23:19:00.002-05:00

I just saw a note from a dev shop that has stopped taking contract work entirely in favor of dedicating all its resources to developing and selling iPhone apps. This type of momentum coupled with the rumors of a Verizon deal makes the mobile industry that much more attractive as a growth market with room to grow. With iPhone app store download numbers continuing to impress, mobile is one platform that has consistently shown that convenience and an easy UI can be enough for consumers to spend money. Now, if we can figure out how to convert purchasing power to a keyboard and a mouse, digital media could really become a business.

SAG and AMPTP - can't agree on predicting the future

2009-02-23T09:15:00.003-05:00

Despite the progress of the availability of Hollywood produced content online in the past few years, we are still years away from a great user experience, one with reasonable windows of availability and a comprehensive library. One of the several key reasons is money and how unsure content rights holders are in valuing online distribution. The breakdown in negotiations between the AMPTP and SAG is indicative that no one is quite sure how big (or small) the money can be with online distribution. I think whatever the deal terms get settled on becomes a self fulfilling prophecy. Does anyone have insight on what the proposed deal terms are? Has this been published or leaked online anywhere?

Jazz trumpet video channel using Aha.tv

2009-02-20T16:54:00.004-05:00

Advertising or entertainment?

2009-02-19T22:48:00.000-05:00

Interesting report from Piper Jaffray says that 12% of YouTube's top 100 videos during one week in February were actually branded promotional videos.

With production costs continuing to lower, advertisers can and should realistically consider more creative, branded content as part of their marketing message. Where, however, is the talent pool going to come from? Could be a boon for creative production houses and web development firms.

Celebrity generated video

2009-02-19T08:15:00.000-05:00

The low key announcement today between People.com and Ideocracy collaborating on a new video channel called Vipwich describes a service where celebrities will produce 4-5 minute episodes. Reminds me of several fun celebrity videos with Will Ferrell and a handful of others who have started channels on YouTube and ibeatyou.com. Seeing celebrities in "user generated" videos has an immediate novelty factor but I think that only marginally makes that video more interesting than a non-celebrity low production video.

How does one assign a dollar value to a single online video? Production quality and marketing spend are the single biggest factors, both of which are almost non-existent with any 'person-generated' video. Sites like Hulu would not stand a chance to become a standalone business (even with their impressive growth numbers) without the production quality and marketing costs that the networks put behind the videos for television/cable distribution.

Efforts like Vipwich are a great step in learning what can work in the fast evolving video marketplace and it will be fun to watch which of these types of channels rise and fall.

Local advertising not looking bullish

2009-02-18T07:57:00.000-05:00

Recent report does not paint a rosy picture for the local advertising market. Lots has been written about and plenty of startups have looked at local advertising as the Holy Grail of revenue growth (although keep in mind that no one has actual found the Holy Grail!).

It shouldn't be too hard to guess why local advertisers have not flocked to the web. They are local businesses after all, with limited growth abilities which inhibit how much they can justify resources for managing web marketing. Word of mouth and location and good service are always going to be the hallmarks of a local business' marketing backbone.

Successful online marketing services for local advertisers will be the ones that can save local business owners money and time and still yield the same target % of new local customers.

Not sure this is news...

2009-02-17T14:57:00.000-05:00

Research reports that most people ignore ads...any check of typical click thru rates, or a simple review of one's own behavior would tell you that!

There are campaigns that can do very well whether virally or contextually and so better research would be to report on quantifying circumstances where ads do NOT get ignored.

Online video numbers getting impressive

2009-02-16T08:39:00.001-05:00

Record 14.3 billion online videos viewed in the month of December according to ComScore. Most notably, Hulu was reported to have 241 million videos viewed. With the bulk of longer form, high quality network television on Hulu surely garnering premium CPM's, these growth numbers continues to make the case for a real business...or a real extension of a business for the networks. The real test for online video is whether it can find a model where online viewing alone can generate revenue to justify production costs. The long tail, poorly produced, user generated video is a volume business that hasn't demonstrated the scalability necessary to be a standalone business.