Archive for January, 2008
Next Entries »Companies Betting on Location Based Mobile Ads
Sunday, January 6th, 2008
You’re walking down the street. You pass a Starbucks. Mmm, that Triple Venti Nonfat Latte sure does look delicious, but you’ve only got three bucks on you. Maybe next time. But wait! You have a new text message — “Save $1 on any Starbucks coffee” — score! Maybe that Latte is within your grasp. Welcome to the world of location based mobile advertising.
According to eMarketer mobile ad spending will reach almost $5 billion this year, with the lion’s share of that going to “direct response ads,” which are what location based advertising is best suited for. Location based ads are very attractive to advertisers because they add a personal level of targeting that’s already available and used effectively on the Internet. When I search for “toyota” on Google, I’m served ads for my local dealerships. GPS technology can target mobile ads even more precisely and make them even more relevant to where you are at that moment.
But there are plenty of potential hangups. Take the deal that CBS announced this morning with mobile social network Loopt. CBS plans to use Loopt’s GPS technology to deliver location based ads to CBS mobile users. These aren’t exactly like the scenario I announced above, since CBS will be displaying location-aware ads on top of mobile content rather than deliver them via text message. That actually highlights the first problem with location based advertising.
It would take a perfect confluence of events in order for many ads to make sense. Not only do you have to be near the thing that is being advertised, but you also need to be viewing the CBS mobile site. For entities like Starbucks that exist on every street corner, that might not be an issue, but in practice how often do you think you’ll be in the proximity of one of CBS’ advertisers while you’re viewing the site? It’ll happen, sure, but it drastically cuts down on the number of opportunities to deliver location aware mobile ads when you have to be viewing a specific mobile web page at just the right time to receive an ad.
CBS can, of course, deliver more general ads fixed to your location — but is that really taking advantage of the GPS capabilities that Loopt offers? Yeah, it’s neat to see ads for things in the city I am traveling in, but not as neat as seeing ads for the businesses on the street I’m walking down.
The fix for that, of course, is to deliver the ads by text message, triggered by proximity to the advertiser’s storefront. We questioned in December whether mobile ad startup Fluc would be able to fill inventory for a similar type of ad scheme (though is isn’t clear if Fluc is actually targeting ads by GPS or if they’re just asking users where they are located). “If the GAP knows you’re near a mall where they have an anchor store, and they know from your Fluc account that you fit their consumer profile, then they might pay to send you an ad,” we wrote. “That’s a lot of ‘ifs,’ though.”
Further, ads like this have to be opt-in. Not only is there a privacy issue involved, but text message ads are also the least likely to be trusted by consumers, according to a Nielsen Internet survey. The CBS-Loopt ads are opt-in.
Another hangup with the idea of location-based ads is reach. Right now the CBS ads are only available to customers using a GPS-enabled phone on a network that Loopt has a partnership with — so far that means just people on Sprint Nextel or Boost Mobile. Loopt’s CEO predicts that by the end of 2008 there could be 50 million mobile phones in the United States equipped to receive this type of advertising, but for now the audience remains relatively small.
Even so, location based advertising is a tantalizing vision for the industry. Google CEO Eric Schmidt said last week that location based ads are the future and will lead a revolution in mobile advertising. Last year Google launched a mobile version of AdSense and their own mobile OS. I think we can expect location aware ads from them in the near future. And whatever Google does in the world of advertising, you can bet others will follow suit.
The ad scenario I described above is possible (and it can get even spookier and more finely targeted when mashed up with other data — say, your social networking profiles), but it’s probably not quite here yet. At least, I haven’t seen it. The question is — do we even want that? Should we potentially trade more of our privacy for more relevant advertising? What does a dollar off a latte mean to you?
Originally
from ReadWriteWeb
by
reBlogged
on Feb 6, 2008, 7:25PM
This Is Not Our Bubble
Sunday, January 6th, 2008
Back in early October I posted about coming economic storms and what entrepreneurs could do to prepare. Given recent news, it is now almost certain that we are in recession. The bad news from financial institutions and credit markets is like a steady drumbeat, so it would be easy to write about “battening down the hatches” or even jumping for the lifeboats.
Far from it. These are great times for entrepreneurs. Really. This is not our bubble. We had our bubble and it burst in March 2000.
The fallout from that - the technology nuclear winter - was as ugly as it gets in business. We won’t get another bubble inflating in our business (technology/media start-ups) until all of us who had any involvement have retired. We will get bubbles in other places, but they don’t recur in the same place within a generation or longer. Tulips, anybody wanna buy some tulips?
This is a credit bubble, pure and simple. That has far, far bigger implications for the economy than a stock bubble. So the recession is real. It is only a question of how long and how deep and my guess would be on the side of long and deep.
But equity valuations are fine. A very conservative investor friend who manages money on an asset allocation basis - choosing between bonds and equities - is pushing into equities. There are of course pockets of excess - please don’t tell me all the stocks you see that are overvalued, I know thats true - but broad markets are in reasonable value shape.
Nor are VCs going hog wild; sadly, because those days were fun 
Sure there is a bit too much money at work, but that’s good. VCs sure as hell remember the bubble and the burst. It is their “cousins”, the Private Equity (PE) guys, who’ve just had their bubble - fueled by the credit markets. But while VC and PE may sound the same to an entrepreneur - hey they are all money guys right? - at a more fundamental level they are on opposite sides of what is a very big battle.
The battle is around something which few people like to talk about in start-up circles. It is the big unmentionable, like sex for Victorians. The unmentionable is zero sum game. Yes, in an economy growing at 3% if we are lucky and zero or less if we are not, the dollars you earn come from another business. Economists call it “creative destruction”. People who work at newspapers call it a “disaster”. Entrepreneurs coming in like barbarians at the gate call it “window of opportunity”. Established companies and - this is the point - their PE backers, call it a possible negative externality which might impact Q4 earnings to the extent that they go near their debt covenant ratios. Or in other words, “I missed that barbarian with my boiling oil and he is now over the wall and wreaking havoc and oh my god there are so many of them….”
The first wave of barbarians were bad enough. They at least talked the same language of margins and profits. It is firms such as Craigslist and Plenty of Fish that really worry the bejesus out of people, as they are happy to take massive volume at ridiculous prices; which in a digital world where additional users are virtually zero cost and all the rewards go to the firm that gets the network effect, is totally sensible, rational economic behavior. More rational than chanting phrases learned in MBA classes like a mantra to ward off evil spirits.
But we are in recession, and that does change the game for entrepreneurs. In particular it changes the game for entrepreneurs banking on consumer advertising dollars. Advertising gets cut in a recession. Always has in the past and will do so now. There is a strong belief in start-up circles that the shift from traditional media to online is such a huge shift that it opens up an opportunity that is “big enough to drive a truck through”. Yes we are still in the relatively early days of this massive shift. But recessions lead to irrational behavior as much as bubbles and that can mean some short term pain.
More importantly, recessions have a way of changing behavior that lasts into the recovery and next boom. From that change of behavior, new companies and new industries are born. Pay Per Click, a more cost effective form of advertising, and offshore outsourcing, a way to cut legacy costs, both got their momentum going in the last recession.
Online CPM is like traditional media advertising. It is a traditional media model grafted onto online services. Which is like the talking heads in the early days of TV mimicing Radio. CPM is “faith based advertising”, you cannot measure the return. We will always have CPM but the prices will crash. Facebook ads going for 12.5c per CPM is one straw in this wind. Those low prices are OK when it costs so little to acquire the eyeballs, so these low prices are sustainable and may become the “new normal”.
Think about that. Right now there are new companies and new models that are below the radar screen that will emerge as major powerhouses in a few years and they will be radically different from what’s out there today. Thats kinda cool. Kinda scary too.
In a recession, the winners are able to make one of these two propositions:
- I will get you new revenue for a variable cost that is lower than your current cost of revenue acquisition. Note, that does not mean invest a lot of money now in the belief that new revenue comes in. It means, your current cost of revenue is 30%, I will deliver you that revenue for 25%. Guaranteed, no revenue = no fee to us.
- I will cut your costs now. Not, in 12 months, maybe, if it all works out. I will cut it now, this month, no investment needed. We are talking hard costs, external vendor costs, not fire a bunch of people to get the return; the latter is also popular in a recession but takes longer and is more painful and may also harm the business, who knows when it is muscles not fat that is being cut. But if you are replacing another vendor it is simple; “they cost you $100,000 per month, we cost $80,000 per month and I can prove that we are at least as good”.
Those are not easy things to deliver on, but if you can deliver on them you will win. If your start-up proposition is marginal, burning cash and the VCs are not calling, well it could get a bit messy. But if you have one of those propositions you can build a phenomenal business in a recession and there plenty of VCs willing to bankroll you to get there - if thats what you need.
Who do you see out there who can deliver what customers want in a recession?
Originally
from ReadWriteWeb
by
reBlogged
on Feb 6, 2008, 8:27PM
A Guide to Billionaire Bloggers - And Some We’d Like to See
Sunday, January 6th, 2008
With the news today that billionaire investor Carl Icahn is getting ready to start blogging, we started to wonder what other billionaires blog. Sadly (or perhaps not so sadly), not many of them blog. Why should we care if a billionaire blogs? After all, they only represent the tiniest fraction of the population (there are at last count 946 billionaires worldwide compared to about 6.6 billion people). Really, you might not care about the things a billionaire might write about, but along with controlling a disproportionally large amount of the world’s money, they also wield a lot of power over our daily lives as a result. So it might be nice to see what goes on in their heads.
Billionaire Bloggers
Name: Carl Icahn
Worth: $14.5 Billion
Blog: The Icahn Report
What It’s Like: The only thing Icahn’s blog has up right now is a notice saying that the blog is coming soon. But for a man who is so known for trying to publicly control the companies he invests in, I think we can expect a lot of posts about what direction his thinks specific business should take.
Name: Mark Cuban
Worth: $2.8 Billion
Blog: Blog Maverick
What It’s Like: Mark Cuban is probably the best known billionaire blogger. As both a technology entrepreneur and the owner of a professional sports team, Cuban uses his blog to opine on everything from business to sports to ethics to the trials and tribulations of Facebook account maintenance (handy if you too have 5000 friends on the network…). It’s not quite the must-read that Marc Andreesen’s blog has become, but it is still worth checking out.
Name: Donald Trump
Worth: $3.5 billion
Blog: The Trump Blog
What It’s Like: Ah, Trump. The billionaire real estate magnate cum TV celebrity writes a blog about business (along with a few other contributors) on his Trump University web site. Trump University is a non-accredited online university that sells correspondence courses in real estate and entrepreneurship. It has also been accused of spamming prospective students. Which is fitting given that Trump’s blog, which is plastered in ads for his books and other products, feels like one giant ad.
Name: Pierre Omidyar
Worth: $8.8 billion
Blog: Pierre’s blog
What It’s Like: The wealthy founder of eBay may have been the first billionaire to blog, when he started writing on on a TypePad blog in May, 2003. But after 3 years of no updates, Pierre shifted his blogging to Vox late last year. Mostly, though, his Vox blog is just a feed of his Twitter stream. It’s an interesting peek at the daily thoughts of one of the web’s most influential people, but we miss his full blog, on which he used to write at length about political and social issues (he still writes about his dislike of the Bush administration on his Vox blog, but it seems less often).
Name: George Soros
Worth: $8.5 Billion
Blog: George Soros
What It’s Like: Ok, George Soros doesn’t really blog. Just once, on the Huffington Post. In his single stint at blogging, Soros wrote about how the concept of the war on terror is self-defeating and framing US policy inside it isn’t doing the country any favors. But his post is tainted when you realize his one foray into the blogosphere coincided with the publication of his book about the war on terror. In otherwords, even though his ideas may be valid, the entire thing was a political stunt.
Name: J.K. Rowling
Worth: $1 Billion
Blog: J.K. Rowling’s Diary
What It’s Like: Ah, here we go, a best selling author. Certainly J.K. Rowling must have an awesome blog, right? Not so much. The Diary section of Rowling’s official site is a little weak. A not-so-often updated single page with no archives. I’m not even sure that qualifies as a blog, and I can’t help but think her fans must be somewhat disappointed by it. Rowling also appears to pen the news section of her site, which is a bit more interesting, has archives, and is updated slightly more frequently. But even so… no comments? No thoughts about the writing process, other literature, the decline of reading in society, your philanthropic work? C’mon, Ms. Rowling, give us a little more, please.
Name: Jerry Yang and David Filo
Worth: $2.2 and $2.5 Billion
Blog: Yodel Anecdotal
What It’s Like: Though not exclusively theirs, Yahoo! founders Jerry Yang and David Filo do occasionally contribute to the company’s corporate blog. Though Filo has written less recently, his posts tend to be more interesting, often concerning the environment or things outside of the Yahoo! product line or business.
Name: Steve Jobs
Worth: $5.7 Billion
Blog: The Secret Diary of Steve Jobs
What It’s Like: Jobs is one lucky billionaire… he doens’t have to lift a finger to blog his every thought. Who needs the real Steve Jobs when you’ve got a perfectly good fake one already?
Who We Want to See Blog
The list of billionaires who blog is rather paltry (let us know if we missed any). So below are some of people on the billionaire list we wish blogged, and why.
Name: Oprah Winfrey
Worth: $1.5 Billion
Why: Oprah has her hand in just about every other type of media, so why not blogging? She’s one of the most influential women in America and her opinions are closely followed by millions of people — she’s even recently shown that she can have an effect on US politics. What better way to connect to fans than through a blog?
Name: Sir Richard Branson
Worth: $3.8 Billion
Why: The man does crazy things like try to fly around the world in a balloon. You try telling me that his blog wouldn’t be interesting to read…
Name: Meg Whitman
Worth: $1.3 Billion
Why: If the rumors are true that Meg Whitman is planning to run for the governorship of California, it would be wise to start blogging and getting her ideas out there.
Name: Bill Gates
Worth: $56 Billion
Why: Not only is he the richest man in the world, but Bill Gates is about to step down from day-to-day work at Microsoft. He’ll have plenty of time to start blogging, and given all the charity work he is involved in through his foundation, I’m sure he has a lot to say about the state of the world.
Name: Michael Bloomberg
Worth: $5.5 Billion
Why: Bloomberg, who is the well-liked mayor New York City, recently left the Republican party and rumors persist that he is mulling a presidential run in the US. It’s starting to get a little late for that, but he has a lot of interesting ideas on pressing issues like the environment that we’d love to hear, if not as part of a presidential platform, then on a blog.
Name: Eric Schmidt
Worth: $6.2 Billion
Why: Our post about the Google CEO’s take on web 3.0 remains one of our most popular of all time. Clearly, people are interested in what Schmidt has to say.
Name: George Lucas
Worth: $3.6 Billion
Why: Because we’re nerds…
Originally
from ReadWriteWeb
by
reBlogged
on Feb 6, 2008, 11:03PM
Get Satisfaction Announces API - Look Out Corporations of the World
Sunday, January 6th, 2008New customer service site Get Satisfaction, itself a wonder to behold, announced today that it is now accepting requests for access to a beta API (Application Programming Interface). Satisfaction functionality will soon be available for apps and sites all over the web. Fresh off of a successful conference titled “Customer Service is the New Marketing,” Get Satisfaction is becoming the hippest place for companies to engage transparently with their customers - whether they want to or not!
The Service
Have complaints about the products and services at Twitter? Join the club - at Get Satisfaction! More old-school than that, a user of HP’s photosharing service Snapfish, perhaps? You too can vent your gripes with the cool kids at Get Satisfaction. These are just two of a wide range of companies that have chosen to answer questions and complaints publicly on this website.
More than just a question and answer service, Get Satisfaction includes a bunch of smart, fun and helpful features.
Companies can opt-in to participating and be identified explicitly in conversations. Customers can signal that they share some one else’s problem or question and get an email if it is answered.
The Digg guys tell people to discuss issues on Get Satisfaction. Facebook doesn’t have any employees signed on to answer complaints there. Neither does Webshots, United Airlines, Linksys or Washington Mutual - though there are conversations going on about all of those companies on the site. I guess they prefer customers to complain among themselves.
To learn more about the thinking behind Get Satisfaction, check out this October interview with CEO Thor Muller at SocialMediaToday.
The API
“Get Satisfaction is superclose,” the company wrote tonight, “to releasing a RESTful API (including some very cool OAuth support) through which you can access almost all of our current features and functionality.” They’ve already offer the ability for customers to broadcast their questions and complaints out onto Twitter or Facebook, and for companies to stick a Satisfaction RSS widget on their websites. What on earth could come next? Satisfaction has the ear of some of the most cutting edge Web 2.0 heads online, so there’s probably some very interesting stuff on the way.
OAuth support means you’ll be able to access user data on a wide variety of other systems, including most if not all that support OpenSocial, without asking for username and password.
Does that mean we’ll be seeing the option to shoot your complaint thread about a company out to all your friends on MySpace or GMail? I wonder how many of the company’s absent today will be showing up soon, post-API.
Originally
from ReadWriteWeb
by
reBlogged
on Feb 7, 2008, 1:40AM