You are currently browsing the archives for April, 2006.

BW on Second Life: Virtual Word, Real Money

The cover story for Business Week’s May 1 issue (link, reg req) is the booming economy inside MMPOG Second Life. The article gets at what makes Second Life so interesting, even though other MMPOGs are (for now) bigger:

“it’s a stretch to call it a game because the residents, as players prefer to be called, create everything. Unlike in other virtual worlds, Second Life’s technology lets people create objects like clothes or storefronts from scratch, LEGO-style, rather than simply pluck avatar outfits or ready-made buildings from a menu. That means residents can build anything they can imagine, from notary services to candles that burn down to pools of wax….. Besides, in one important way, this virtual stuff isn’t imaginary at all. In November, 2003, Linden Lab made a policy change unprecedented in online games: It allowed Second Life residents to retain full ownership of their virtual creations. The inception of property rights in the virtual world made for a thriving market economy.”

MediaPost on “Metablogs”

MediaPost columnist Mark Naples took a look at FM’s “metaweblog” concept in today’s edition.

“Federated Media is among the companies that have designed a solution that could perhaps remedy this for blogs and their advocates. Federated’s metablogs offer value to three constituencies. One constituency value set is directed to the readers who want a human editor to sift through dozens of selected content sources online & to surface the essential articles each day. A second constituency value set is directed toward advertisers who want their brands associated with the leading online voices, all through one place buying opportunity. A third is directed toward the individual weblog authors, who get the opportunity to forge relationships with new readers.

I know that other blog aggregators have created similar systems. But Federated Media seems to have developed something that thinks it through more comprehensively from the buy side, the sell side, and the reader’s side all at once.”

Thanks for the plug, Mark!

Web Will Collect More Ad Revenue than Print Magazines in 2006

That’s the word from Merrill Lynch (AdAdge).

Jeff Jarvis: More on the Open Ad Marketplace

Here is Jeff’s reply to my note (thanks, Jeff!):

Chas,

I may be expressing this badly… and I certainly may be naive… but I do believe that such a system could instead improve the value and revenue for highly targeted and high-quality blogs and other media.

I think you are right when it comes to plain CPM and CPC advertising that can appear anywhere: Advertisers like Pay My Bills and Vonage, for example, tend to buy tonnage and judge those purchases soley on performance, right?

Up the food chain from that are branding advertisers who do want to appear on quality sites that are relevant. But I’ve heard from agencies that they find it difficult — impossible, actually — to put together a critical mass of audience that makes it worthwhile to make the buy in our medium as opposed to other media. The open system I’m proposing would make it easier for them to both find the right sites and get the apples-to-apples measurement they require.

At the top of the pyramid are highly targeted sites and here I believe the marketplace adds the greatest value because it allows advertisers to find the “perfect” sites for them and pay for them. They will pay for perfect and, at the same time, will find more efficiency because they found the ideal environments.

How does this affect networks? Well, again, I may be naive and you can tell me far better but I think that this allows networks to be more flexible and to provide one-stop-shopping to agencies: When you sell an advertiser on a specific flight and need to get more “perfect” inventory, you can do so — but not be responsible for those added sites all the time. On the other end of things, if you have excess inventory (God forbid!), you can put it out in the marketplace.

This is not entirely a frictionless, rational, performance-based system — though it is, that, too. Instead, this is an infranstructure for advertisers for higher value advertising and for advertisers to find the critical mass and metrics they demand in trusted, quality, endemic, targeted, and sometimes ad hoc networks of sites.

Or so I hope.

My original post.

Is Frictionless Ad-Buying Good for Publishers?

Jeff Jarvis’s latest column for The Guardian (see BuzzMachine) proposes an “open ad marketplace”:

“By doing this, we take the friction out of the ad marketplace: every blog is an atom and every ad campaign is a molecule that attracts the best. Thus both advertisers and media gain control and increase their effectiveness and their value. In this post-scarcity world, freed of the limitations of the page and the clock, you could argue that as no end of ad inventory becomes available, rates will only drop. But I also believe that advertisers will pay higher rates for the right sites that perform efficiently for them. Thus quality sites will earn more and advertisers will waste less. That is the value of openness.”

I agree that media buying, selling and the metrics that inform them both are in need of serious improvement. Today most of the control is still in the hands of a few enormous media companies that don’t have a vested interest in innovation or upgrading the current system.

But I don’t think that a “frictionless” open marketplace benefits buyers and sellers equally. Much of the friction in today’s model comes from the publisher side, ie, the content producers and their appointed media sellers. The folks who put their hearts and souls into a magazine or TV network or web site want to make the case to advertisers that the editorial product they produce, and the conversation it engenders, are unique. That uniqueness, they argue, deserves a premium. While an advertiser can find those same people — say the few million people who watch The West Wing — watching other shows or reading certain websites, there’s extra value to reaching them when they’re watching The West Wing. And making that case, god forbid, usually requires a bit of high-friction human contact.

Google has shown us that algorithms can work wonders for direct marketers looking to drive clicks at the lowest cost. Whether or not marketing algorithms can create the next Absolut, Starbucks or Nike, is — to say the least — an open question. Great advertising is about more than “efficient performance,” and best publications do something that even the most thorough spreadsheets can’t compute.

My worry is this: Create a frictionless, rational, performance-oriented marketplace for ads, and content quality and editorial innovation go down the drain.

Related, Jeff’s reply.

Business Week on FM

Heather Green at Business Week on FM’s metaweblogs.

Nearly $50MM in “Social Media” Advertising in 2006

Research firm PQ Media is out with a report on ad spending in weblogs, podcasts, RSS and the rest of the “social media” platforms (from MediaPost). Is it me, or has MediaPost devised some annoying app that prevents cutting and pasting from their articles? In lieu of quoting the article…. PQ Media estimates 2006 spending will be $49.8MM, up from $20.4MM in 2005. Most of the 2005 spending — $16.6MM — was for advertising on blogs, which the report calls “the most mature of the user-generated online media segments.”

GM's Corp Blog on Chevy Tahoe Epidode

From Chevy General Manager Ed Peper’s blog, a site hosted on GM’s corporate blog site:

“Early on we made the decision that if we were to hold this contest, in which we invite anyone to create an ad, in an open forum, that we would be summarily destroyed in the blogosphere if we censored the ads based on their viewpoint. So, we adopted a position of openness and transparency, and decided that we would welcome the debate.”

Forget Apple; GM is the darling brand among the bloggers this week!

Only 700,000 Total Podcast Users?

Om cites a report by Forrester’s Charlene Li (see Om Malik’s Blog) that says podcast usage signifcantly lags podcast hype. In 2006, she predicts, about 700,000 households will regularly download and listen to podcasts.

While I certainly won’t argue that the hype isn’t outpacing the downloads, Li’s figure on regular podcast users can’t be right. Diggnation, the weekly program hosted by Kevin Rose and the gang from Digg.com, is downloaded 150,000 times a week. Amanda Congdon’s Rocketboom has 150,000 viewers on a bad day.

Assuming it’s the exact same people who watch every new episode of these programs (which would be a miraculous story of unprececented audience loyalty), that says 2 podcasts alone represent 43% of of total podcast usage in the world. Throw in The Dawn and Drew Show, and you’re getting pretty close to Li’s grand total users! I’ve got to believe there’s a few more out there.

Chevy Spoof Ads: Unexpectedly Brilliant Move?

First, GM’s invitation to the world to “make your own” Chevy Tahoe commercial spawned a slew of Chevy-bashing spoof ads with copy such as “Our planet’s oil is almost gone. You don’t need G.P.S. to see where this road leads.”

Then several prominent publications profiled the campaign as an unintended disaster. Like The NY Times:

“…the company was hoping that visitors to its Web site would e-mail their own videos around the Web, generating interest for the Tahoe through what is known as viral marketing. By the measure of Chevrolet Tahoe videos circulating the blogosphere and the video-hosting Web sites like YouTube, that goal was achieved. But the videos that were circulated most widely like the commercial that attacked the S.U.V. for its gas mileage, may not be what Chevrolet had in mind.”


And CNET’s News.com:

“General Motors did little in the way of damage control on Monday after a do-it-yourself ad campaign for a GM SUV was hijacked by critics of the company and thousands of negative ads flooded the Web.”


But, finally, the consensus at many of the leading tech weblogs was, brilliant move, GM. Here’s Scoble:

“It got me to think about Chevy all day long. I wasn’t thinking about my Ford Focus and how it successfully went 25,000 miles (passed that point on Sunday without even a rattle). I wasn’t thinking about the tax man. Or my next video I need to edit. No, I was thinking about Chevy.”

And here’s Mike Masnick at Techdirt:

“…it seems like perhaps GM understood what would happen a lot more than the so-called ‘experts’…. GM is getting even more mileage from this campaign, and making it appear that they are more open to listening to those who disagree with them. Rather than reflecting negatively on GM, as the experts (and the reporters) would have you believe, GM actually comes out of it looking pretty good. So, it’s questionable as to whether or not GM was ‘slow to react’ or if they are simply doing everything according to plan.

I kinda think GM was one step ahead of us on this one.