Random bouts of bloviation, mainly relating to economics. My basic premise is that both the classic conservative and liberal economic ideologies are played out. I'm most interested in exploring what a relevant leftist economic ideology could look like.
A couple of thoughts came to mind watching the presentation on advertising and video games:
Ads follow eyeballs. This principle was raised at the beginning of the presentation and I don't have any to add to it really, except to point out that I was impressed with how succinctly it expresses the fundamental m.o. for marketers (that, and I can't believe how expensive NASCAR sponsorships are!).
Don't mistake novelty for innovation. A billboard in a videogame isn't any more engaging than a billboard on a highway. From what I've picked up from "Always On" and the MedNet case study, marketing designed only to generate impressions is not particularly relevant anymore. Instead, consumer engagement should be the modern marketer's target. For those reasons, I found the Burger King and BMW approaches more compelling than the Orbitz approach (not sure to what extent my comments are contradicted by my actions - I've played those Orbitz-sponsored games many times, but never heard of the BK or BMW promotions until this presentation....).
My half-baked theory on product placement: I don't have anything empirical to back this up, but I instinctively believe that there is an aspirational quality to entertainment-based media. That is, there is a mild tendency for people to subconsciously emulate the characters and lifestyles they see on TV and other media. (There is something ironically circular to this, because to some extent the producers of this media are attempting to emulate their target audiences.) This is based just on personal experience observing subtle shifts in my and other people's behavior. For this reason, I imagine that subtle product placement has real power to influence purchasing decisions (subtle being the key word here).
Marketers, tread lightly. The point about players reacting negatively when being presented with ads after shelling out top dollar for a game really rings true with me. You don't see overt advertising on HBO, and I'd think HBO would be very careful about getting into product placement and other types of ad selling. In all fairness, I don't know how much I am representative of the general population - to extend the HBO example one more degree, I don't subscribe to cable tv because I'm deeply offended by the idea of paying to be marketed to (if you want me to walk out of your movie theater, show me some ads after the lights dim).
A quick comment on something I read today in chapter 3 of "Always On." Vollmer talks about the renewed interest in "below the line" marketing. Two reasons for this shift come to mind, one probably more significant than the other:
Simple math: Ad budgets haven't necessarily decreased, so as marketers pull back from declining channels (like newspapers and television), the ones that still prove worthwhile will see more dough.
More provocative reason: In my opinion a more profound force at play has to do with the accelerating trend towards virtual reality over the last couple of decades. That is, as more things are acceptably replaced by their virtual versions, we are placing higher premiums on those real things and experiences that aren't easily translated into binary code (look at what's happened to concert ticket prices as the music recording industry has gone down the tubes - more on that here, courtesy of The New Yorker).
Quick comment on the "Brief History of the Internet" video. It filled some gaps in my understanding of things rather nicely, including its origins (I didn't know about ARPA) and the relationship between the web and the internet. It was also funny to learn that its original name was the Intergalactic Network - ok, maybe it's mostly terrestrial deployment is one area where the internet has not yet exceeded apparent expectations, but it's good to aim high.
I read the NY Times article on smartphones ("Advertisers Get a Trove of Clues in Smartphone") on the subway this morning and a lightbulb went off - Verizon gave me my Blackberry in exchange for a 2 year service agreement.....why not give away smartphones & service in exchange for users waiving their privacy rights?
Everyone's tiptoeing around privacy concerns (as they should be), but as Prof. Schwartz points out in the article, "People should be allowed to trade most kinds of information for value as long as the terms are fair. They're not fair now." This would seem like a fair trade, certainly not an unprecedented one (e.g., netzero), so to my mind, the question is financial - is the data a wireless provider could harvest worth more than the marginal cost of supporting another user on their network? Maybe my imagination is running away with me here, but considering the depth of data marketers could get to under such an arrangement, I think this could be a goldmine.
I've been waiting for the chance to mention this, but before this class started my curiosity about online marketing was piqued when I read this NY Times article on the trend among marketers towards using more robust analytics to monitor and manage their internet efforts. I don't have a background in marketing, so this article was really illuminating for me and whet my appetite for this class. Now, having read chapter 4 of "Always On" and the first chapter of "The Numerati," I have a better understanding of the context around this movement and the forces driving it.
Still, it's very hard for me to not think about this from the consumer perspective; mostly, I'm distracted by the Orwellian creepiness of being watched and monitored and analyzed all the time. My behavior contradicts my concerns, however - there's nothing stopping me from flipping the switch to prevent sites from placing cookies on my pc, and yet I don't. I can't help but think that if the virtual locations I visited knew me better, it would enrich the quality of my digital experiences in a more profound way, even more so than the simple convenience of not having to remind my favorites sites who I am each time I visit them ("who was my favorite childhood pet - Lulu or Jack? Do I have to choose? Again?").
Perfectly targeted marketing would be a godsend to me as a consumer, at least to the extent that the value propositions were legitimate, but we aren't there yet, and it's going to be a tedious trip getting there. As it stands now, I can almost spell out the simplistic machinations going on that determine why I was shown this or that ad. Sometimes, it's offensive (stop pushing the singles sites - I'm happily married, damn it! Is my wife going to get suspicious when she sees what ads Yahoo! thinks interest me? Maybe there's a good sitcom plot in here somewhere...).
Still, I can see why people are trying: even a marketing neophyte like me can imagine that innovations along these lines - not just to target ads more accurately but also to measure their true impact and make adjustments on the fly - are going to be richly rewarded.
As my first post on web business models indicated, this is a fascinating puzzle to me - I see it as the Gordian knot of our time. So, it was with great enthusiasm that I watched the recommended segments from the Supernova 2008 conference. I still couldn't get a decent stream for Prof. Eric Clemons' speech, which was maddening because what I could make out was utterly captivating. As frustrating as that was, his Q&A session came through fine and I think I was able to get the gist of what he was saying from reading his slide deck.
It was interesting to note a couple of points both Dr. Clemons and the industry panel made:
A model based on managing customer experience is superior to one bogged down in managing content (when one panelist said "don't build planets, build satellites" - I think he was expressing essentially the same idea). Makes perfect sense when you think about it.
Social content can have great value, and piggybacking referrals is a business model with high-potential (interestingly, both chose to cite tripadvisor.com as a good example of this). Again, not surprising, but worth noting as a lead dog in the hunt for business models.
There were several other points made in the videos that resonated with me:
Looking down the road, social search has big potential.
The traditional approach to advertising is not well-suited to the web. However, marketing that focuses on building relationships can create value for both sellers and buyers.
"Living web beta" is a great concept, not only for crowdsourcing R&D but also as a marketing strategy. That is, putting out a product earlier in the development process than you might've historically (along with the appropriate caveats) can not only improve the ultimate product's value proposition, but it also helps build relationships and engagement levels with future customers.
Bringing mobility to web 2.0 is an extremely high potential area. To be successful, products will need to offer relevant, time sensitive and actionable information.
This last point really hit home for me. I've had a blackberry for work for a while now, but it was getting one for personal use a couple of months ago that finally sparked my interest in social media (well, that and this course, of course!). I never understood what I had been reading about smart phone usage in Asia and Europe (using a cell phone as a wallet? What?!?) over the last couple of years, but I'm sold now. In fact, seeing the value it has delivered to me over the last few weeks has me convinced that mobility is the next game-changer (intriguing mobile web stats here).
Very interesting materials this week (not that the other weeks' haven't been; on the contrary) , though I'm having a little bit of trouble getting the supernova videos to play without too big a lag - I'm using wifi; maybe I'll try a wired connection this weekend. Still, I was able to get through all of the other materials - lots of food for thought there.
Entrepreneurs are still vexed by the challenge of turning a great web idea into a reliable source of income (other than by ipo, that is). More than a few people have developed some pretty amazing -revolutionary, really- websites and applications that captivate millions, but getting paid for it somehow remains elusive. I'm pretty sure the first time I ever heard the word "monetize" was during the first internet boom in the late 90's, when I had friends at start-ups. To me, that says it all - businesses were always pretty good at figuring out how they were going to make money (execution being the area that separated them), but somehow each incredible advancement in the web is accompanied by an equally incredible challenge in turning it into a revenue stream.
How many web firms don't end up turning to selling ads as the backbone of their business model? Personally - and I'll be the first to admit I am no expert on this - I'm skeptical of the real value "traditional" internet advertising delivers to its sponsors. I'm pretty sure I've never forked over any dough after clicking on a banner ad or a sponsored search result, so, to the extent that my example is typical, then whatever it is these ads are doing, they aren't directly delivering sales results (in all fairness, the same could be said of billboards and other mainstays of traditional advertising). We'll see what happens when these ads get smarter and better targeted, but I'm not holding my breath.
Neither is Christopher Vollmer, apparently, who advocates for more sophisticated relationship marketing. He points out how both media buyers like Johnson & Johnson and sellers like Meredith Corporation are succeeding by taking a fresh look at their assets to find ways to pivot away from the old approach to a new level of customer engagement.
Chris Anderson, meanwhile, has some ideas of his own about how web firms can build effective business models, ones paradoxically built on a foundation of giving stuff away. We'll see. To me, it feels like we're still an innovation or two away from crafting a viable business model for web firms. The web has not been short on innovation, of course, but the difference here is that where web pioneers are typically innovating along more technical lines, this next creation, the viable virtual business model, is likely going to require a different sort of ingenuity. The one thing we can be sure of, in my opinion, is that there's enough money on the table to entice some genius to eventually come up with something that finally works. Certainly enough to inspire an X501 student to give it more thought than they otherwise might've...
I read the first chapter of Chris Anderson's "The Long Tail" on my flight home from our in-residence last night, and then listened to our Professors' discussion this morning. It was reassuring to hear some of the concerns I had about the theory get validated, particularly the extent to which Anderson may be overreaching with his theory of a "positive feedback loop that will transform entire industries - and the culture - for decades to come."
Anderson talks about choice unlocking demand that had been previously constrained by the "tyranny of locality." As one of the very people Anderson describes whose curiosity for "Touching the Void" was piqued by "Into Thin Air," I can't argue the point. Still, it's a stretch to take what begins as an argument about how technology has altered media consumption habits and suggest it will reshape the world as we know it.
The Professors point out a tendency for more obscure titles to have lower satisfaction scores among online retail customers, citing the possibility that they tend to be of a lower quality (I know there are exceptions to this, but still, intuitively, at least, this seems likely to be true). Another correlation I can imagine is between the size of the producer and the reliability of their supply chain (like the small press that prints books in short runs). This is important because online buyers of physical goods are forced to delay consumption; in turn web sellers go to great lengths to minimize the annoyance, promising extremely prompt and subsidized shipping. From my experience, this is pretty darn important to online consumers, and backorders can cause serious brand damage. To butcher The Rolling Stones' "Gimme Shelter," competition, Amazon, is just a click away.
This is just yet another reason why it's unsurprising that an online retailer would want to switch from physical to virtual goods, and this is the part of "The Long Tail" that was insightful to me: the argument that there's a link between a product's distribution constraints and the length of its market's tail (fewer constraints=longer tail). And so, this is how we find ourselves with the Kindle. On that, all I can say is that according to "Always On," the book is the only "old" media format that consumers are still actually increasing their exposure to, and if Kindle reviews like this are any indication, I don't see the book business getting "Napstered" any time soon.
p.s. I agree - "The English Patient" was HORRIBLE!
I'm still working my way through this week's materials, but I wanted to post a couple of comments on the "Origins of Social Media" chapter of "The New Influencers."
I'm finding that it's useful to check the publishing date of text discussing new media, as the rapid rate of change on the topic ages them quickly. For example, it was quaint to read in "The New Influencers" about businesses that "choose to participate" in social media. As we learned in last week's course materials, the more recent prevailing winds have blown brand & message control further away from businesses. To be fair, the first half of "Origins of Social Media" is all about this loss of control, but I suspect that if the book were published more recently (it came out in 2007) the tone and content of this discussion would have been different.
Still, "Origins of Social Media" provides a useful background on the subject, and one prognostication that did resonate strongly with me relates to transparency. The comment that "...transparency may be the single greatest cultural shift that businesses will face as they engage with social media" rings true, and I would even take it a step further and propose that, when combined with the other forces driving a demand for transparency (globalization & outsourcing concerns, sustainability & social consciousness interests), the ability to deliver it will be a profound source of differentiation for the firms of the future.
I joined facebook today, motivated by considerations raised by this class.My friends and family had been razzing me for a long time about joining, but I was reluctant to put my personal network “on the grid.”I had strong privacy concerns about that, but two things happened in the last week to turn me:
1.I was absolutely shocked to learn in an article a classmate had twittered about that facebook has 250 million active users.A week before, I had read in “Always On” that as of Dec. 2007 there were 35 million users, and that the user base was growing at a 71% clip.Those numbers seemed huge, but to see it explode in usage like it has made me think that it had reached a point of acceptance where I was risking my own relevance to not join.
2.Listening to the privacy seminar made me realize that I couldn’t control my own privacy without completely disengaging from society. Technological advancements will continue to reduce costs associated with data collection and analysis.This is unavoidable and, just like how I have to accept a lack of privacy to live where I want to (in New York City, we are subject to random searches when using public transportation) and work where I do (bank where my every keystroke and phone conversation is recorded), the only way to reject this is to disconnect from society entirely.Who am I kidding, my privacy is already deeply compromised and improving that can only be addressed in the same civic activities I use to try to effect change on other important issues outside of my control.
Besides, I’m already being targeted by online advertisers based on my web usage – if anything, I just wish these marketers would be doing a better job of it (I already went to Las Vegas and stayed at the Palazzo 2 months ago – don’t you know that, or can’t you guess that I’m no longer interested in looking for a hotel in Vegas?Stop jamming me with Palazzo banner ads already!).So, I gave in, with the hope that I’ll be able to reconnect with my friends and family and maybe be marketed to more appropriately.
