You are currently browsing the archives for August, 2006.

Ads on Shopping Carts

Frisco, Texas-based Mediacart, “a shopping cart ad system that runs digital ads and promotions — via high-resolution video screens without audio” may be coming to a supermarket near you (AdAge).

“One of the company’s findings: 87% of the 150 shoppers surveyed said they would choose a retailer equipped with Mediacart over one without the carts. The reason: ‘They enabled them to get out of the store more quickly,’ Mr. Kramer said, because an on-screen navigation tool allowed them to find the aisles where, say, anchovies, ketchup or razors were stocked.”

I hope the embedded RFID tags that make these ad displays work can talk to ads placed on items like potato chips!

3 Tips to Long-Tail Marketing

Steve Rubel’s column at AdAge offers 3 recommendations to marketing in the fragmented, long-tail world. To paraphrase: 1, focus on influence rather than reach; 2, fund the niche publications that matter to your customers; and 3, demand that your trusted media partners (he doesn’t actually mention

FM!) help manage your relationships with the many small niche players that matter to your brand.

Agencies Invest in Media Start Ups; Will Preferential Treatment Follow?

Rafat Ali at PaidContent on the slew of ad-agency investments in new-media start ups:

“But conflicts of interest are also there: IPG’s stake in Facebook will create new ad models for all kinds of clients but will IPG also have a quid pro quo vis-a-vis Facebook’s ad account? Isn’t it a wee bit strange too, that IPG-owned agencies count Microsoft as a client and Microsoft recently inked a deal with Facebook to be the exclusive provider of advertising to Facebook?
Will such arrangements mean some clients will steer clear of certain agencies due to competitive conflicts? While ad execs tell Adweek that the equity deals don’t involve preferential treatment, I don’t buy it. On MadAve, there’s always some sort of quid pro quo originating with the actual deal or spawned from handshake arrangements. It’s just another form of the two-martini lunch

.”

User-Gen'd Product Reviews Get More Important

AdAge reports that Austin-based Bazaarvoice, a company that manages customer feedback for companies such as HomeDepot and CompUSA, will now syndicate its database of user comments to online shopping portals like MSN, Google’s Froogle and Pricerunner. Driving the user-review trend, Jupiter Research reports that “48% of online shoppers find it critical that retailers post reviews.” AdAge continues:

“as marketers fixate on getting their virals on YouTube and making friends on MySpace, these relatively unsexy product write-ups have quietly become the most common form of consumer content — Forrester puts it as the most-used form of peer-generated content — not to mention the one with the most direct impact on purchase decisions.”

Ad Exec Arrested for Pulling Down Ads

Techdirt has a funny (but apparently true) post about an ad sales exec who got himself in trouble for removing illegal road-side ads from private and public property. Maybe he crossed the line by calling the advertisers to tell them, and, in the process, sell them his own wares?

ChasNote Team Replaced By Google Bots!

As reported at Donna Bogatin’s blog at ZDNet:

“Google believes it is in the best interests of all to displace ad sales execs with Google ads. For Google CEO Eric Schmidt, a ‘targeted ad’ is better than a ‘targeted sales person.’”

Granted, I’m biased. But disagree with two aspects of Schmidt’s comments. First, I still see a lot of evidence that the Google bots aren’t nearly as good as they promise at delivering advertising relevance (see ChasNote 8/12/06). Two, while paid search is certainly a boon to direct marketers, it’s still not delivering to publishers even half the revenues (in rates per thousand pageviews) as those old-fashioned targeted sales people. According to the CPM numbers included in the Sept 1 Business 2.0 cover story, teeny tiny Federated Media (my employer) — with its mere 3 targeted sales people on staff in Q2 — delivered $8 average CPMs for its network of blog sites. Gawker Media does about the same (between $8 and $10), while “CPM rates on Google AdSense and competing automated systems are estimated at anywhere from 50 cents to a few bucks.”

Business 2.0: Blogging for Dollars

At Business 2.0, Paul Sloan and Paul Kaihla take a look at the independent online publishers who are starting to make a living from their blogs. Nice to see such nice press for FM authors like the Boingers, Matt Haughey at Metafilter, Heather Armstrong at Dooce, Om Malik at GigaOM, Mike Arrington at TechCrunch and Drew Curtis at Fark! My favorite excerpts:

“Says Thom Campbell, head of media strategy for Intel, ‘The audience on blogs is the cream of the crop.’”

And

“FM’s eight-person sales force has been aggressively approaching big marketers, armed with detailed and persuasive demographics. The data has helped FM steadily boost ad rates on its sites. The average CPM doubled in the past six months to roughly $8. The aim is to get rates between $20 and $30, which, Battelle says, would put his blogs on par with sites like CNET and NYTimes.com.”

Yikes — 300 to 400% improvement over current rates? I better get busy!

Yahoo Lets Users Tinker with Their Yodel

Don’t just let your customers mash up your commercials (like GM did), let em re-yodel your trademark yodel! From Searchblog.

TechCrunch Disses FM

If I’m going to toot my horn every time an FM partner says something nice about us (like Digg’s Kevin Rose and BoingBoing’s Cory Doctorow did last week on This Week in Tech, or Metafilter’s Matt Haughey did from the podium at Webvisions or the Newsvine gang did at their blog), I better air the dirty laundry too!

Today at TechCrunch, Mike Arrington expressed his discontent with FM. He feels we’re keeping too much of the money we earn for him:

“I think more ad networks are good things, but mostly because they will compete with the other networks and drive margins inevitably down. I consider the 40% I pay FM Publishing, my agent, way too high. But they are still a young service and I’m sticking with them. Eventually, though, they will have to fall to more sustainable levels or risk losing their bigger properties. As blogs get larger, hiring an in-house sales person becomes much more reasonable that paying ad networks 40-50% of total revenue.”

Maybe he’s right. But at the twenty-odd print magazines and websites for which I’ve worked (and had access to the P&Ls) over the past 14 years, the expenses associated with editorial and content production are in the 12-24% range. The other 76-88% of the costs are for SG&A — salespeople, account managers, IT (especially ad-server development & operations), research, accounting, and collections. Outsourcing 80% of your cost structure in exchange for 40% of the revenue may not be such an unfair deal in the end.

Mike D. at Newsvine weighed in to the discussion at TechCrunch with this (thank you, Mike D.!):

“With regards to FM, the real question for them — I believe — is whether the premiumness of the network they are creating is going to translate into noticeably higher CPMs than standard run-of-site ads in the long term. We think it might, so that’s the theory for now. Since the time we posted that Newsvine article, FM has actually sold almost our entire site out — at good CPMs — and that’s great. Couldn’t have come at a better time either as we’re doing record traffic. If this continues, I’d say FM is worth the 40% for now (other networks can take as much as 60% by the way) — although you’re right that competition can drive this down. I think what’s good about the strategy you’ve taken at TechCrunch is that you allow for the outsourced sale of targeted CPM ads (by FM) but you are still able to sell sponsorships yourself and keep 100%, as well as other revenue opportunities. In the end, targeted CPM ads (and thus, FM) should only be one component of a revenue stream.

We have indeed built our own ad system in-house and it’s ready to roll whenever we need it….

It’s really not a question of serving, tracking, or any of the other operational aspects of ad serving for us. It’s more about the selling. As an early stage company, you have two options for selling your ads: do it yourself with a full-time sales staff or outsource it. AdSense tends to make people believe that the entire advertising world is just a question of building up traffic and then letting the ads pour in automatically, but the reality is that a good sell through rate at a good CPM requires a dedicated sales staff, whether it’s internal or external.

By building our own ad system in-house, we can use FM as long as it’s a valuable relationship (which it is), and then if god forbid something goes south, we’ve got the flexibility to plug in other options or do everything ourself. Right now, we’re happy though.

My sentiments exactly!

Web 2.0 in the Media Business

Jason Goldberg at Jobster asked me for my definition of Web 2.0. Here’s it, from the Jobster blog:

To me the most important aspect of Web 2.0 is “the architecture of participation.” On one level, the architecture of participation lowers costs and reduces liability: Ebay creates an enormous storefront without carrying the risk of warehoused inventory; Google creates a better search engine by harnessing the collective wisdom of millions of internet users (rather than a million engineers) who link to other sites. In the media business, sites like Digg, Boing Boing or Metafilter add another level. By rewarding participants who provide them content (“thanks, bill!” credits at Boing Boing, status as power Diggers, etc), they create greater loyalty to their brands, which results in high pageviews per visit, more time spent per visitor and more frequent visits by those visitors.

Also worth chcking out: The over-used, over-hyped aspects of the Web 2.0 movement are captured best in Reddit-founder Alexis Ohanian’s satirical video, “Ingredients for Web 2.0 Success”: