Tag Archive for 'attention'

The Australian cancer that will kill the Internet

grainy girl censored There is a cancer growing in our society. This problem may seem small, isolated and insignificant, but left unchecked, could grow to affect everyone in the world. Because when a small nation validates a disastrous idea, it gives the larger countries evidence to pursue it – and like domino’s, we all fall.

Logging into a Bogota internet cafe last year as I was backpacking around South America, I nearly choked. Australia’s new government had slightly tweaked their election commitment: they no longer wanted to help parents filter the Internet to prevent their children from stumbling on child porn (children don’t watch child porn, and lets not forget the fact that child pornographers have a sophisticated offline network that bypasses technology), but now the government was going to mandate a “clean” feed on everybody. Mandatory censorship on the Internet is not a future I want. It made my blood boil.

It was to be a filtration regime, that the government would censor whatever they thought was deemed censorable. An unaccountable, shady regime using the high moral ground of claiming to look after children, but in subsequent examinations, has proven to be just the start. A recent leak has shown that there has been considerable scope creep. Pornography, gambling, abortion websites – all the good stuff in life that make conservative Christian’s pray for a flood and famine to clean society up – would be part of this black list, despite being perfectly legal for adults. The question isn’t why is the government banning porn and the like; it’s where will the line be drawn and who determines that? We are seeing a moral crusade, cloaking a very real civil rights issue.

Censored face

I wrote an email to every senator of the Australia government several months back, speaking on behalf of the Silicon Beach Australia community (which will give you all the background you need). Fortunately it worked – I not only educated, but I was acknowledged from two important senators that the current administration needed to pass the legislation. It was a temporary win, and thankfully since then the Australian mainstream media have taken an absolutely beating on the government. But very rarely does this get international attention.

More recent announcements suggest the legislation is dead in the water. But let’s not get complacent – we are only as safe as the next election, where the numbers in the Senate shift. This has been an issue for several years being pushed by the parties to win the growing Christian conservative vote. This dangerous policy hasn’t died – it’s just undergoing an evolution.

Why the rest of the world should care…and be scared
One thing that I’ve learned from this experience, is that the Australian government will cling onto the flimsiest of evidence and pathetic moral rhetoric, to position their case. Distorted perspectives, exaggerated linkages – it almost makes me laugh and then cry to see how desperate the government is to sell its case, by citing overseas efforts in an inaccurate way, in order to build their case. It is a propaganda war based on lies that we are getting sick of .

self-censored

If an economically insignificant – but credible nation – like Australia introduces this filteration regime, it means it’s a global precedent. We don’t want a precedent. All it takes is one solid example, and governments around the world can jump out of hiding on this sensitive electoral issue.

The Internet needs to be open, free, and available. It’s going to be the infrastructure of our society that will allow new opportunities for the development of the human race. So when a government starts flirting with the idea of internet censorship – don’t get complacent. Every piece of legislation passed, is a step closer to a control regime we don’t need.

twiter_vanuatu_nocleanfeed

We need to make this issue political suicide around the world. Our public pressure needs to get to the point, where no politician in their right mind, will try to implement this policy. I’m not asking you to suddenly become an activist, but just understand – there is no room for leeway in this. This issue has been under-reported by the media across the world – let’s kill this cancer once and for all. Because unless we exterminate this fake moral crusade, this cancer is going to slowly grow in the background – only for us to realise it’s all over when it’s too late.

It’s not often I will breakout in anger over this, but I think about it everyday (like how my Twitter avatar is in constant protest). No need to chain yourself to a tree – but let’s start making this the bigger deal that it really is.

The broken business model of newspapers

About six weeks ago I took a week off work to catch up on life and do some research and testing of market opportunities. I had several hypotheses I wanted to test and sent content to a closed group of friends and colleagues. My goal was to watch how they reacted to it, to understand how time-poor people consume information…and it was an absolutely fascinating experience.

As part of this excercise, I took the task of reading all the major newspapers every day. It has literally been years since I’ve given that much attention to them – I used to read them daily, but my Gen-Y ways got the better of me, and I moved online. Unfortunately, I still can’t seem to manage my online rituals to efficiently consume information (hence the research I did – turns out other people are struggling as well). Something I realised in the course of my research, is that whilst newspapers are losing circulation due to the Internet – there is a lot they could do to really improve their competitiveness.

Too much detail
I tried reading the main newspapers word for word, and it took me hours. I don’t care how much people whine that they love the newspaper experience – the reality is, the people who read the news also work full-time. They barely have time to take out five minutes in their day; the reason people don’t read newspapers is because of the complexity of life. Personally I work through lunch; and if I don’t work, I am trying to do things in my life so as to make more time for myself after work. The weekend is literally the only time I have a chance to take a time out to read the newspaper – but given I neglect people in my personal life during the week and the myriad of other things I am involved in outside of work, means I don’t even get that chance. I rarely sit down – that’s why I read the news on my phone on the train.

Newspapers contain quality content, there is no doubt about that. However, if you are going to compete in the news business, you need to understand your audience: that’s all they want. If you read any news item in a newspaper, it will be flowered with extra facts, background information, and endless perspectives to colour the central issue. For example, an article about the Central Bank in Australia dropping its cash rate by 1% had several paragraphs talking about the exchange rate. Yes, it’s valid to talk about it – but there were another half dozen articles that did the same thing in the related coverage, and quite frankly, it’s a separate issue. Another article about the impact of the rate change on local business, makes mention that 50 million pizzas get sold through Dominoes Australia. Interesting stuff – but is it relevant to the news?

A newspaper should have a headline, and literally report just on that news. I’m not saying they shouldn’t report on the extra stuff – quite the contrary I love the extra stuff – but they fail to recognise that the problem with reading a newspaper is that it takes so long, and so people can only skim it. Report just the news, and let consumers follow up on the website with extra detail through special links provided.

Newspapers can’t compete in news any more
I was able to get copies of the major newspapers between 11pm and 12.40am – as in, the night before people usually buy it. Those newspapers had been delivered by a truck, after being printed in a factory far away, with thousands of copies being loaded and distributed earlier that evening. Of course, there is a staggered distribution with some newsagents getting them through the night and early morning (about 5am), but it’s still the same newspaper delivered at 12am as at the high profile newsagents.

The timeline for reporting news is a joke. The only hope a newspaper has in reporting news uniquely, is if it breaks it. By breaking news, it has a chance to take its time and frame the flow of information. But is this that common? Most newspapers use shared agencies to pool their resources with stories, like international news. Newspapers are being ignored by consumers, because they get news quicker on the Internet. Why must these media executives continue to ignore the reality that an online news organistaion is much more efficient in distributing breaking news. That’s why newspapers existed in the past, but they no longer fill that role in society – newspapers need to get out of that role (or become “news brand”, but no longer treating print as the prime distribution for that news).

The incentives and structures can’t compete with this new world
Journalists, especially freelancers, get paid by word count.
Readers, especially time poor ones, skim through the newspaper.

See a problem there? It’s called friction. In case you are a mass media executive, let me build on it for you: the economics of information have now changed. When your industry was created several hundred years ago, information was scarce and people had plenty of time. Today, it is people’s time (or “attention”) that is scarce, whereas information is abundant. Tradition through the “art” and skill of journalism seems to drive the industry more than its fundamental economic shifts. As I remarked at the Future of Media Summit several months back after hearing a mass media journalist rant on justifying her existence: “The skill of journalism? It’s just as relevant as the skill of sword makers. It’s nice, but I prefer a gun.”

A business that does not respond to its market, will die one day. The cost structures of the newspaper (and magazine industries) are sustaining a structure that no longer suits the market for which it supposedly caters for. Instead, it relies purely on generational factors of a Luddite population to sustain its circulation, trying to make money on a model that has now been broken.

What’s so exciting about this? The traditional media don’t get it, in the same way a bible-basher won’t accept there is no God despite presenting logic suggesting otherwise. I’ve heard this from friends in the industry, from people I’ve met at conferences, and from observing my own clients who are part of a broader media group.

Denial by a legacy industry can be a beautiful thing for an entrepreneur.

Advertising on the Internet needs innovation

On the weekend, I caught up with Cameron Reilly of the Podcast network , and he was telling me about his views on monetising podcasts. It got me thinking again about those things I like to think about: how content can be monetised. Despite the growth in online advertising which is tipped to be $80 billion, I think we still have a lot more innovation to go with revenue models, especially ones that help content creators.

Advertising is a revenue stream that has traditionally enabled content-creators to monetise their products, in the absence of people paying a fee or subscription. With the Internet, content has undergone a radical changing of what it is – digital, abundant, easily copied – whilst the Internet has offered new opportunities for how advertising is done. However, the Internet has identified the fundamental weaknesses of advertising , as consumers can now control their content consumption, which allows them to ignore embedded advertising altogether. Content on the other hand, still remains in demand, but means of monetising it are slipping into a free economy which is not sustainable. I make that point to illustrate not that professional content creation is a sunset industry – but rather there’s a big market opportunity as this massive industry needs better options.

time mag

"Hey man, there’s this new thing called the Internet. Sounds pretty cool"

One of the biggest innovations in advertising (and enabled by the Internet) is of contextual search advertising. This has been popularised by Google, which now makes 98% of its $17 billion revenue from these units. This advertising dominates online advertising (40% of total) because of its pull nature, whereby key-words stated by a consumer in effect state their intention of what they are interested or would like to purchase. Whilst this is a highly efficient form of advertising, it also has its weaknesses – for example, it is not as effective outside of the search engine environment. Google makes 35% of its revenue from the adSense network , where these contextual ads are placed on peoples personal websites. Evidence from high traffic bloggers suggests they barely make enough money through this type of advertising. Another point to consider is that aspects of the Google network include significant partnership agreements like the one with AOL which accounts for 10% of Googles revenue (this is a 2005 figure which has likely changed, but Google does state in their 2007 report "Our agreements with a few of the largest Google Network members account for a significant portion of revenues derived from our AdSense program. If our relationship with one or more large Google Network members were terminated or renegotiated on terms less favorable to us, our business could be adversely affected.". AOL most recently reported for Q1 2008 half a billion dollars largely from search advertising ).

Other attempts at creating more efficient advertising which have existed for over a decade, have come in the form of profiling or behavioural tracking. However, these forms of advertising has also highlighted the growing awareness of consumer privacy being eroded, and is under heavy scrutiny by activist groups and government. Facebook is a company that is best posed to deliver new forms of advertising because of the rich profiling data it has, but it itself has faced massive backlash .

My view is that the majority of online advertising for successful individual publishers at least, has largely come from traditional approaches to advertising – a masthead blog with a sales team that uses display advertising. How effective this display advertising is is debateable with widespread banner blindness and consumer control over their content, but it would appear that this is more a case of advertisers seeing this as the least bad on the overall scale of opportunities. The fact it replicates the mass media approach of number of unique consumers viewing the content, and not the types of users, means this isn’t anything new other than being done in a digital environment.

Digital content is in need of a better monetisation system.
Targeted advertising is the most efficient form, yet consumer privacy is a growing force preventing this. What we need, is not a new advertising technology, but a new way of thinking about advertising – in a way that can help the content economy rather than riding on it without giving benefit. Contextual advertising sounds great in theory as it calculates key-word frequency of words on a website, to match it to a key word ad – but it’s proving in practice these ads are not very relevant. Yet trying to think of a smarter way to advertise, may be the wrong question – perhaps half the problem itself is advertising as a concept?

perspective

Are we running down a tunnel, only to find there is nothing there?

Content which comes in the form of news (historical and breaking), analysis, and entertainment can be monetised via a persons attention or through a transaction (ie, subscription, fee, etc). Both this approaches have different barriers.

– Attention: The key driver is increased dollars per unique person, over a period of time. The barriers to this approach is the challenge of identifying the individual in a way that gives advertising that is highly relevant and will result in a conversion. In other words, privacy privacy privacy.

– Alternative payment: Requiring consumers to pay for content is a barrier due to the paid wall. What is more problematic for digital content, is that the ability to replicate it freely makes it not just easy to do for the masses but has created a culture of if it’s not free, it’s not worth purchasing unless its really necessary. There needs to be a strong value proposition for a consumer to purchase content, and in the absense of a brand and marketing, the restriction of what value the content offers is a barrier for consumer demand as they don’t know what they are missing out on.

So as you see above, content creators are in a difficult position. Charging people reduces their opportunity unless they are really established, but even then, due to the digital environment they don’t have any control over subsequent distribution (with rampant piracy). Yet advertising is fraught with being irrelevant and hence not effective (so advertisers go to other forms) and any attempts to make it more relevant, gets held back by the concerns of privacy advocates (and rightly so). Whilst the Internet parades itself as an advertising growth machine, it’s growing in new areas but not the old areas that have traditionally been the medium for advertisers.

This advertising growth is largely being driven through utility computing products that aim to make information retrieval more efficient (ie, search). However, the growth for the content creators, is not happening. As Cam was telling me, in a market like Australia – small content organisations like TPN and Bronwen Clune ‘s Norgs , don’t have access to the big end of town for a sales team. And he didn’t have to tell me, those Google ads for the smaller guys, are not enough to pay the bills. That small to middle end is not being really catered for.

But before you jump on the phone and create some mid-tier advertising network that caters for a niche, think about the real problem: content creators need a better solution to monetise their content. But advertisers also need a better way of selling, other than some slick-talking sales person who can sell ads on pageviews (a broken model with weak alternatives ) They need advertising that is suited for their product, but the market now includes other products media outlets never had to compete with like marketplaces now happening online and utility computing products. Whilst the technology community obsesses about search , let’s also remember we have yet to see a new way to monetise content that is superior to the old world. Contextual advertising of text is the latest new thing area, but that technique is nearly a decade old. As I prove above, outside of the search environment, it is showing to not be that effective.

Where is the innovation going to come from? Not through technology but with a new paradigm shift like how content creators operate . New ways of thinking about the way we ‘sell’ like what the VRM Project is challenging. But perhaps more fundamentally, is an understanding that the holy grail of targeted advertising has got a speed hump called privacy – and that may actually be a sign of not going faster towards better targeting, but changing the vehicle all together.

Analysing the user experience from two social networking sites

Yet again, MySpace has e-mailed me a useless e-mail that frustrates me more than it gives me value . But what I noticed recently, was another social networking site, taking a different approach.

geni

Whereas MySpace is simply alerting me, which is forcing me to painfully log into their service, Geni is actually alerting me the information without me having to take another action.

A few points of reflection on this:
1) Using my business analysis on the consumer Internet , MySpace is offering a content model (hypermedia is how I referred to this in my post) whereas Geni is offering a Utility computing product. Both these businesses consider themselves "social networking" sites and yet both offer a different product model.
2) This also highlights two different business models: MySpace is a platform whilst Geni is working on a network model. Meaning, MySpace’s business model is premised on you visiting them for you to get value; Geni’s isn’t. To be perfectly honest, both MySpace and Geni are irrelevant for me. However platforms can come and go, but network models always stick around. As irrelevant Geni is to me, I still value it – a network business strategy (meaning you follow the user, rather than expecting them to come) builds a long term relationship.
3) Social networking sites when it’s the core product, work best as utility services and not a content business. Look at what a different user experience it is for me, because I can get benefit from my Geni account despite not having to log in. Although I am not giving them pageviews, I am giving them my attention which is translating into greater brand equity for them. When you treat social networking as a content business, this distorts the service offered to users, as misaligned business views on generating revenue drive strategy in a way that is harmful to the consumer ie, I feel like saying "f**k off" whenever I see those e-mails for MySpace . But "thank-you" to Geni.

The main point I want to get at though, is that the user experience is just as important when the user is not on the site as it is when they are on the site. People shy away from the recently-recognised network model of business, because they don’t get the same traffic. I say embrace it, because the market will eventually correct itself to recognise this is a superior type of strategy.

What is the DataPortability Project

When we created the DataPortability workgroup in November 2007, it was after discussion amongst a few of us to further explore an idea; a vision for the future of the social web. By working together, we thought we could make real change in the industry. What we didn’t realise, was how quickly and how big the attention generated by this workgroup was to be. A press release has been released that details the journey to date, which highlight’s some interesting tidbits. What I am going to write below, are how my own thoughts have evolved over the last few months, and what it is that I think DataPortability is.

1) Getting companies to adopt open, existing standards
RSS , OpenID , APML , oAuth , RDF , and the rest. These technologies exist, with of which have been around for many years. Everyone that understands what they are, know that they rock. If these standards are all so great – why hasn’t the entire technology industry adopted them yet? Now we just need awareness, education and in some cases pressure on the industry heavies to adopt them.

2) Create best practices of implementing these standards
When you are part of a community, you are in the know, and don’t realise how the outside world looks in. Let the standards communities focus their precious energies on creating and maintaining the technologies; and DataPortability can help provide resources for people to implement them. Is providing PHP4 support for oAuth really a priority? It isn’t for them – but by pooling the community with people that have diverse skillsets and are committed to the overall picture, it has a better chance of happening.

3) Synthesise these open standards to play nice with each other.
All these different communities working in isolation have been doing their own thing. An example is how Yadis-XRDS are working on service discovery and have a lacklustre catalogue. Do we just leave them to do their own thing? Does someone else in Bangalore create his own catalogue? (Which is highly likely given the under-exposure of this key aspect to groups needing it for the other standards, and the current state its in). Thanks to Kaliya for mentioning that the XRDS guys have been more then proficient in working with other groups – "how do you think their spec is part of the OpenID spec?". Julian Bond goes on to say: "Yadis-XRDS is only months old and XRDS-Simple is literally days old…Having trouble thinking of a community that is working in isolation. And that isn’t likely to be hugely offended if you suggested it. " So let me leave the examples here, and just say the DataPortability Project when defining technical and policy blueprints, can identify issues and from the bigger picture perspective focus attention on where it’s needed. By embracing the broader community, and focusing our attention on weaknesses, we can ensure no one is reinventing wheels .

4) Communicate all the good things the existing communities are doing, under the one brand, to the end user.
RSS is by far the most recognised open standard. Have you ever tried explaining RSS to someone who is outside of the tech industry? I have. Multiple times. It’s like I’ve just told them about the future with flying cars and settlements on Mars. I’ve done it in in the corporate world, to friends, family, girls I date, guys I weight train with and anyone else. Moving onto OpenID – does anyone apart from Scoble and the technorati who try all the webservices they can, really care? Most people use Facebook, Hotmail (the cutting edge are using Gmail) and that’s it. On your next trip to Europe ask a cultured French (wo)man if they know what OpenID is; why they need it; what they can do with it. Now try explaining RSS to the mix. And APML. And oAuth. Bonus if you can explain RDF to yourself.

Wouldn’t it be just easier if you explained what DataPortability is, and explained the benefits that can be achieved by using all these standards? Standards are invisible things that consumers shouldn’t need to care about; they just care about the benefits. Do consumers care about the standards behind Wi-Fi, as defined by Zero-conf – or do they care about clicking "enable wireless" on their laptop and them connecting to the Internet. If you are going around evangelising the technical standards, the only audience you will get are the corporates in IT departments, who couldn’t care less. The corporate IT guys respond to their customer/client facing guys, who in turn respond to consumers – and consumers couldn’t care less on how its done, but just what they can do. Have the consumer channel their demand, and it benefits the whole ecosystem.


The new DataPortability trustmark

It has been said the average consumer doesn’t care about DataPortability. Of course they don’t – we are still in the investigation phase of the Project ; which later on will evolve to the design phases and then evangelising phases. We know people would want RSS, oAuth, and the rest of the Alphabet soup – so lets use DataPortability as a brand that we can communicate this. Sales is about creating demand – lets coordinate our ‘selling’ to make it overwhelming – and make it easy for consumers to channel that want in a way they can relate to. You don’t say "oAuth"; you say "preventing password theft" to them instead.

5) Make the business case that a user should get open access to their data
Why should Facebook let other applications use the data it has on its servers? Why should google give up all this data they have about their users to a competitor? Why should a Fortune 500 adopt solutions that decentralise their control? Why should a user adopt RDF on their blog when they get no clear benefit from it? Is a self-trained PHP coder who can whack something together, going to be able to articulate that to the VC’s?

The tech industry has this obsession that nothing gets done unless the developers are on board. No surprises there – if we don’t have an engineer to build the bridge, we are going to have to keep jumping off the cliff hoping we make it to the other side. But at the same time, if you don’t have the people persuading the people that would fund this bridge; or the broader population about how important it is for them to have this bridge – that engineer can build what he wants but the end result is that no one will ever walk on it. Funny how web2.0 companies suck at the revenue model thing : overhype on the development innovation, with under-hype on the value-proposition to the ordinary consumer who funds their business .

Developers need to be on board because they hassle their bosses and sometimes that evangelising from within works; but imagine if we get the developers bosses bosses on board because some old bear on the board of directors wants DataPortability after his daughter explained it to him (the same person that also told him about Facebook and Youtube). I can assure you, as I’ve seen it first hand with the senior leadership at my own firm, this is exactly what is happening.

Intel is one of the best selling computer-chip companies in the world. Do you really think as a consumer I care about what chip my computers works on? Logically – no. But "Intel’s Inside" marketing campaign gave them a monopoly, because end consumers would ask "does it have intel inside?" and this pressure forced Intel’s customers (IBM and the rest) to actually use Intel. Steve Greenberg corrects me by saying "The Intel Inside campaign came a decade after Intel took over the world. It wasn’t what got them there. It was in response to Microsoft signaling that they liked AMD. Looked like AMD was going to take off… but then they didn’t". So my facts were slightly wrong, but the point still remains.
At the same time, it isn’t just political pressure but its also to educate. I genuinely believe opening up your data is a smart business strategy that will change the potential of web services.

You make people care by giving them an incentive to do it (business opportunities; customer political pressure; peer pressure as individuals and an industry which later evolve to industry norms). The semantic web communities, the VRM communities, the entire open standards communities – all have a common interest in doing this. DataPortability is culture change on an industry wide level, that will improve the entire ecosystem. Apparently innovation has died – I say it’s just beginning .

Information overload: we need a supply side solution

About a month ago, I went to a conference filled with journalists and I couldn’t help but ask them what they thought about blogs and its impact on their profession. Predictably, they weren’t too happy about it. Unpredictably however, were the reasons for it. It wasn’t just a rant, but a genuine care about journalism as a concept – and how the blogging “news industry” is digging a hole for everyone.

Bloggers and social media are replacing the newspaper industry as a source of breaking news. What they still lack, is quality – as there have been multiple examples of blogs breaking news that in the rush to publish it, turns out it was in fact fallacious . Personally, I think as blogging evolves (as a form of journalism) the checks and balances will be developed – such as big names blogs with their brands, effectively acting like a traditional masthead. And when a brand is developed, more care is put into quality.

Regardless, the infancy of blogging highlights the broader concern of “quality”. With the freedom for anyone to create, the Information Age has seen us overload with information despite our finite ability to take it all in. The relationship between the producer of news and consumer of news, not only is blurring – but it’s also radically transforming the dynamics that is impacting even the offline world.

Traditionally, the concept of “information overload” has been relegated as a simple analysis of lower costs to entry as a producer of content (anyone can create a blog on wordpress.com and away you go). However what I am starting to realise, is the issue isn’t so much the technological ability for anyone to create their own media empire, but instead, the incentive system we’ve inherited from the offline world.

Whilst there have been numerous companies trying to solve the problem from the demand side with “personalisation” of content (on the desktop , as an aggregator , and about another 1000 different spins), what we really need are attempts on the supply side, from the actual content creators themselves.

info overload

Too much signal, can make it all look like noise

Information overload: we need a supply side solution
Marshall Kirkpatrick , along with his boss Richard McManus , are some of the best thinkers in the industry. The fact they can write, makes them not journalists in the traditional sense, but analysts with the ability to clearly communicate their thoughts. Add to the mix Techcrunch don Michael Arrington , and his amazing team – they are analysts that give us amazing insight into the industry. I value what they write; but when they feel the stress of their industry to write more, they are not only doing a disservice to themselves, but also to the humble reader they write to. Quality is not something you can automate – there’s a fixed amount a writer can do not because of their typing skills but because quality is a factor of self-reflection and research.

The problem is that whilst they want, can and do write analysis – their incentive system is biased towards a numbers system driven by popularity. The more people that read and the more content created (which creates more potential to get readers) means more pageviews and therefore money in the bank as advertisers pay on number of impressions. The conflict of the leading blogs churning out content , is that their incentive system is based on a flawed system in the pre-digital world, which is known as circulation offline, and is now known as pageviews online.

A newspaper primarily makes money through their circulation: the amount of physical newspapers they sell, but also the audited figures of how many people read their newspaper (readership can have a factor of up to three times the physical circulation ). With the latter, a newspaper can sell space based on their proven circulation: the higher the readership, the higher the premium. The reason for this is that in the mass media world, the concept of advertising was about hitting as many people as possible. I liken it to the image of flying a plane over a piece of land, and dropping leaflets with the blind faith that of those 100,000 pamphlets, at least 1000 people catch them.

It sounds stupid why an advertiser would blindly drop pamphlets, but they had to: it was the only way they could effectively advertise. For them to make sales, they need the ability to target buyers and create exposure of the product. The only mechanism available for this was the mass media as it was a captured audience, and at best, an advertiser could places ads on specialist publications hoping to getter better return on their investment (dropping pamphlets about water bottles over a desert, makes more sense than over a group of people in a tropical rainforest). Nevertheless, this advertising was done on mass – the technology limited the ability to target.

catch the advert

Advertising in the mass media: dropping messages, hoping the right person catches them

On the Internet, it is a completely new way to publish. The technology enables a relationship with a consumer of content, a vendor, a producer of content unlike anything else previously in the world. The end goal of a vendor advertising is about sales and they no longer need to drop pamphlets – they can now build a one on one relationship with that consumer. They can now knock on your door (after you’ve flagged you want them to), sit down with you, and have a meaningful conversion on buying the product.

“Pageviews” are pamphlets being dropped – a flawed system that we used purely due to technological limitations. We now have the opportunity for a new way of doing advertising, but we fail to recognise it – and so our new media content creators are being driven by an old media revenue model.

It’s not technology that holds us back, but perception
Vendor Relationship Management or (VRM) is a fascinating new way of looking at advertising, where the above scenario is possible. A person can contain this bank of personal information about themselves, as well as flagging their intention of what products they want to buy – and vendors don’t need to resort to advertising to sell their product, but by building a relationship with these potential buyers one on one. If an advertiser knows you are a potential customer (by virtue of knowing your personal information – which might I add under VRM, is something the consumer controls), they can focus their efforts on you rather than blindly advertising on the other 80% of people that would never buy their product). In a world like this, advertising as we know it is dead because we know longer need it.

VRM requires a cultural change in our world of understanding a future like this. Key to this is the ability for companies to recognise the value of a user controlling their personal data is in fact allowing us new opportunities for advertising. Companies currently believe by accumulating data about a user, they are builder a richer profile of someone and therefore can better ‘target’ advertising. But companies succeeding technologically on this front, are being booed down in a big way from privacy advocates and the mainstream public. The cost of holding this rich data is too much. Privacy by obscurity is no longer possible, and people demand the right of privacy due to an electronic age where disparate pieces of their life can be linked online

One of the biggest things the DataPortability Project is doing, is transforming the notion that a company somehow has a competitive advantage by controlling a users data. The political pressure, education, and advocacy of this group is going to allow things like VRM. When I spoke to a room of Australia’s leading technologists at BarCamp Sydney about DataPortability, what I realised is that they failed to recognise what we are doing is not a technological transformation (we are advocating existing open standards that already exist, not new ones) but a cultural transformation of a users relationship with their data. We are changing perceptions, not building new technology.

money on the plate

To fix a problem, you need to look at the source that feeds the beast

How the content business will change with VRM
One day, when users control their data and have data portability, and we can have VRM – the content-generating business will find a light to the hole currently being dug. Advertising on a “hits” model will no longer be relevant. The page view will be dead.

Instead, what we may see is an evolution to a subscription model. Rather than content producers measuring success based on how many people viewed their content, they can now focus less on hits and more on quality as their incentive system will not be driven by the pageview. Instead, consumers can build up ‘credits’ under a VRM system for participating (my independent view, not a VRM idea), and can then use those credits to purchase access to content they come across online. Such a model allows content creators to be rewarded for quality, not numbers. They will need to focus on their brand managing their audiences expectations of what they create, and in return, a user can subscribe with regular payments of credits they earned in the VRM system.

Content producers can then follow whatever content strategy they want (news, analysis, entertainment ) and will no longer be held captive by the legacy world system that drives reward for number of people not types of people.

Will this happen any time soon? With DataPortability, yes – but once we all realise we need to work together towards a new future. But until we get that broad recognition, I’m just going to have to keep hitting “read all” in my feed reader because I can’t keep up with the amount of content being generated; whilst the poor content creators strain their lives, in the hope of working in a flawed system that doesn’t reward their brilliance.

How business is done on the Internet

Day in and day out, the Internet continues to show innovations from people all around the world. Yet for all these innovations, it all comes down to the very core of trying to do business in a new way.

I’ve been doing some research recently for an internal publication my firm produces on the future of the entertainment and media industries, and I wondered what exactly does it mean to do business on the Internet. Whilst there are some brilliant thoughts on what business models on the Net are, I think we lack a proper analysis of what it means to do business.

Below is a summary of my understanding from a consumer perspective of doing business (enterprise is a different beast), but which I think will help people better understand how it all works.

First of all, we need to split the three key factors about business:

  1. Business models: What the structure of a business is.
  2. Revenue models: How the business generates cash from customers to fund its operations.
  3. Product models: What the product is that you provide to your customers to generate the cash

Too often, these three components are mixed as one or the same. Another thing that happens, is we struggle to classify the Internet because it contains so many different types of business. Breaking it down gives us more complete view.

Business models

The first thing to understand, is how a business is structured of which there are three varieties:

  1. Destination: driving consumers to a point ie, a website that you try to drive usage by consumers. This was very much what the early Internet was in the manifestation of the world wide web; websites attempting to get ‘eyeballs’. Your business model is based on the premise of getting people to visit your destination.
  2. Platform: a service that you try to build usage by creating an ecosystem for. Arguably, the web is the platform but in reality we are seeing a different type of platform akin to the Microsoft Windows approach of creating a core service that others can build on. You could classify the web2.0 view that websites are communities in this, whereas there are companies trying to create operating systems on the web for widgets that are a similar thing. Your business model, is built on the premise that people interact on your service or use your platform.
  3. Network: a service that people use regardless of where they are on the Internet. This type of business is about attaching to a user as they use the Internet. It’s almost like the flipside of the above two models: instead of having everyone come to you, this is about following everyone wherever they are. Your business model is built on the premise that people use your service in a decentralised manner.

Revenue models
Revenue models are a key factor to understand as they are what sustain long term changes to an industry that is currently been pushed by venture money and acquisitions from the dominant players. There are four types of monetisation models that I can observe:

  1. Fees: Payment of a fixed amount for access or usage of goods and services over the internet
  2. Subscription: Payment of a fixed amount on a periodic basis for access or usage of goods and services
  3. Commission: Payment of a percentage fee of a transaction
  4. Attention: Consumer gives their time, such as viewing an advertisement, in exchange of goods and services

Product models
There are three types of product models:

  1. Markets is the term I am using to explain when businesses use the Internet as a way to allow others to transact goods and services. The product offered by these companies is effectively a mechanism to do commerce. For example, eBay offers a product model that gives the ability for people to auction goods. Their product is to offer the facility for vendors and consumers to transact. They are like a shopping centre, giving space for vendors to sell and centralising the space so that consumers know where they can buy from these vendors. Markets offer the ability to perform trade of some sort with other parties
  2. Hypermedia is the term I am using to describe any type of content offering to people. Philosophically, it falls under the “new media” category that I have previously linked to and I use the term coined by Ted Nelson which is the broader term coined at the same time as “hypertext”. Effectively, you are offering content to a consumer in an Internet environment. Formally defined, it is access or supply of content via visual, audio and/or text over the Internet
  3. Utility computing is what you can call search engines, web applications, and the software as a service variety, which essentially is about providing computing services for information. Maybe a better way to define the concept is that they are computing services that allow for productivity through information retrieval, creation or management.

It is important to note that a business doesn’t have to restrict itself to just one of the above sub-categories. A business must have at least one business model, one revenue model, and one product model (or rather, they should – web2.0 startups seem to forget the revenue model bit). But within those groupings, it doesn’t have to be just one.

Take for example Facebook, which was initially a destination business – people logged in, viewed peoples profiles and their news feed, and the company generated value for the user by them ‘visiting’. With the launch of the applications platform, Facebook became a platform, because it allowed other entities to build on top of its core service. In this regard, Facebook generated value by creating an ecosystem of applications within its confines. As for a network model, Facebook is yet to to this, but imagine if they created an ad network like Google’s – whereby information about you in Facebook is used to determine what advertising to see across the entire internet. Here the value is that Facebook helps add to your experience across the entire Internet (despite being off the actual site)

So as a concept, below is my matrix of doing business on the Internet (I’m graphically inept, but I want to illustrate the three dimensions conceptually). What do you think?

business on the net

If you can draw better than me (not hard), I’ll credit you on this post!

Update May 27 2010: Rethinking this two years on, I think this still stands as a rough analytical framework. But I now believe that business model makes sense for the overall discussion above (ie, the combination of all the components), and what I term as ‘business model’ in the post is actually more like the ‘operating model’ of a web business.

My presentation at Kickstart forum

I’m currently at Kickstart forum (along with the Mickster), and I just gave a presentation on DataPortability to a bunch of Aussie journalists. I didn’t write a speech, but I did jot down some points on paper before I spoke, so I thought I might share them here given I had a good response.

My presentation had three aspects: background, explanation, and implications of DataPortability. Below is a summary of what I said

Background

  • Started by a bunch of Australians and a few other people overseas in November 2007 out of a chatroom. We formed a workgroup to explore the concept of social network data portability
  • In January 2008, Robert Scoble had an incident, which directed a lot of attention to us. As a consequence, we’ve seen major companies such as Google, Microsoft, Yahoo, Facebook, Six Apart, LinkedIn, Digg, and a host of others pledge support for the project.
  • We now have over 1000 people contributing, and have the support of a lot of influential people in the industry who want us to succeed.

Explanation

  • The goal is to not invent anything new. Rather, it’s to synthesise existing standards and technologies, into one blueprint – and then we push it out to the world under the DataPortability brand
  • When consumers see the DataPortability brand, they will know it represents certain things – similar to how users recognise the Centrino brand represents Intel, mobility, wireless internet, and a long battary life. The brand is to communicate some fundamental things about a web service, that will allow a user to recognise a supporting site respects it’s users data rights and certain functionality.
  • Analogy of zero-networking: before the zeroconf initiative it was difficult to connect to the internet (wirelessly). Due to the standardisation of policies, we can now connect on the internet wirelessly at the click of a button. The consequence of this is not just a better consumer experience, but the enablement of future opportunities such as what we are seeing with the mobile phone. Likewise, with DataPortability we will be able to connect to new applications and things will just “work” – and it will see new opportunity for us
  • Analogy of the bank: I stated how the attention economy is something we give our attention to ie, we put up with advertising, and in return we get content. And that the currency of the attention economy is data. With DataPortability, we can store our data in a bank, and via “electronic transfer”, we can interact with various services controlling the use of that data in a centralised manner. We update our data at the bank, and it automatically synchronises with the services we use ie, automatically updating your Facebook and MySpace profiles

Implications

  1. Interoperability: When diverse systems and organisations work together. A DataPortability world will allow you to use your data generated from other sites ie, if you buy books on Amazon about penguins, you can get movie recommendations on your pay TV movie catalog for penguins. Things like the ability to log in across the web with one sign-on, creates a self-supporting ecosystem where everyone benefits.
  2. Semantic web: I gave an explanation of the semantic web (which generated a lot of interest afterwards in chats), and then I proceeded to explain that the problem for the semantic web is there hasn’t been this uptake of standards and technologies. I said that when a company adopts the DataPortability blueprint, they will effectively be supporting the semantic web – and hence enabling the next phase of computing history
  3. Data rights: I claimed the DataPortability project is putting data rights in the spotlight, and it’s an issue that has generated interest from other industries like the health and legal sectors, and not just the Internet sector. Things like what is privacy, and what exactly does my “data” mean. DataPortability is creating a discussion on what this actually means
  4. Wikiocracy: I briefly explained how we are doing a social experiment, with a new type of of governance model, which can be regarded as an evolution of the open source model. “Decentralised” and “non-hierarchical”, which with time it will be more evident with what we are trying to do

Something that amused me was in the sessions I had afterwards when the journalists had a one-on-one session with me, one woman asked: “So why are you doing all of this?”. I said it was an amazing opportunity to meet people and build my profile in the tech industry, to which she concluded: “you’re doing this to make history, aren’t you?”. I smiled 🙂

How Google reader can finally start making money

Today, you would have heard that Newsgator, Bloglines, Me.dium, Peepel, Talis and Ma.gnolia have joined the APML workgroup and are in discussions with workgroup members on how they can implement APML into their product lines. Bloglines created some news the other week on their intention to adopt it, and the announcement today about Newsgator means APML is now fast becoming an industry standard.

Google however, is still sitting on the side lines. I really like using Google reader, but if they don?¢‚Ǩ‚Ñ¢t announce support for APML soon, I will have to switch back to my old favourite Bloglines which is doing some serious innovating. Seeing as Google reader came out of beta recently, I thought I?¢‚Ǩ‚Ñ¢d help them out to finally add a new feature (APML) that will see it generate some real revenue.

What a Google reader APML file would look like
Read my previous post on what exactly APML is. If the Google reader team was to support APML, what they could add to my APML file is a ranking of blogs, authors, and key-words. First an explanation, and then I will explain the consequences.

In terms of blogs I read, the percentage frequency of posting I read from a particular blog will determine the relevancy score in my APML file. So if I was to read 89% of Techcrunch posts ?¢‚Ǩ‚Äú which is information already provided to users ?¢‚Ǩ‚Äú it would convert this into a relevancy score for Techcrunch of 89% or 0.89.

ranking

APML: pulling rank

In terms of authors I read, it can extract who posted the entry from the individual blog postings I read, and like the blog ranking above, perform a similar procedure. I don?¢‚Ǩ‚Ñ¢t imagine it would too hard to do this, however given it?¢‚Ǩ‚Ñ¢s a small team running the product, I would put this on a lower priority to support.

In terms of key-words, Google could employ its contextual analysis technology from each of the postings I read and extract key words. By performing this on each post I read, the frequency of extracted key words determines the relevance score for those concepts.

So that would be the how. The APML file generated from Google Reader would simply rank these blogs, authors, and key-words – and the relevance scores would update over time. Over time, the data is indexed and re-calculated from scratch so as concepts stop being viewed, they start to diminish in value until they drop off.

What Google reader can do with that APML file
1. Ranking of content
One of the biggest issues facing consumers of RSS is the amount of information overload. I am quite confident to think that people would pay a premium, for any attempt to help rank the what can be the hundreds of items per day, that need to be read by a user. By having an APML file, over time Google Reader can match postings to what a users ranked interests are. So rather than presenting the content by reverse chronology (most recent to oldest); it can instead organise content by relevancy (items of most interest to least).

This won?¢‚Ǩ‚Ñ¢t reduce the amount of RSS consumption by a user, but it will enable them to know how to allocate their attention to content. There are a lot of innovative ways you can rank the content, down to the way you extract key works and rank concepts, so there is scope for competing vendors to have their own methods. However the point is, a feature to ?¢‚ǨÀúSort by Personal Relevance?¢‚Ǩ‚Ñ¢ would be highly sort after, and I am sure quite a few people will be willing to pay the price for this God send.

I know Google seems to think contextual ads are everything, but maybe the Google Reader team can break from the mould and generate a different revenue stream through a value add feature like that. Google should apply its contextual advertising technology to determine key words for filtering, not advertising. It can use this pre-existing technology to generate a different revenue stream.

2. Enhancing its AdSense programme

blatant ads

Targeted advertising is still bloody annoying

One of the great benefits of APML is that it creates an open database about a user. Contextual advertising, in my opinion is actually a pretty sucky technology and its success to date is only because all the other types of targeted advertising models are flawed. As I explain above, the technology instead should be done to better analyse what content a user consumes, through keyword analysis. Over time, a ranking of these concepts can occur ?¢‚Ǩ‚Äú as well as being shared from other web services that are doing the same thing.

An APML file that ranks concepts is exactly what Google needs to enhance its adwords technology. Don?¢‚Ǩ‚Ñ¢t use it to analyse a post to show ads; use it to analyse a post to rank concepts. Then, in aggregate, the contextual advertising will work because it can be based off this APML file with great precision. And even better, a user can tweak it ?¢‚Ǩ‚Äú which will be the equivalent to tweaking what advertising a user wants to get. The transparency of a user being able to see what ‘concept ranking’ you generate for them, is powerful, because a user is likely to monitor it to be accurate.

APML is contextual advertising biggest friend, because it profiles a user in a sensible way, that can be shared across applications and monitored by the user. Allowing a user to tweak their APML file for the motivation of more targeted content, aligns their self-interest to ensure the targeted ads thrown at them based on those ranked concepts, are in fact, relevant.

3. Privacy credibility
Privacy is the inflation of the attention economy. You can?¢‚Ǩ‚Ñ¢t proceed to innovate with targeted advertising technology, whilst ignoring privacy. Google has clearly realised this the hard way by being labeled one of the worst privacy offenders in the world. By adopting APML, Google will go a long way to gain credibility in privacy rights. It will be creating open transparency with the information it collects to profile users, and it will allow a user to control that profiling of themselves.

APML is a very clever approach to dealing with privacy. It?¢‚Ǩ‚Ñ¢s not the only approach, but it a one of the most promising. Even if Google never uses an APML file as I describe above, the pure brand-enhancing value of giving some control to its users over their rightful attention data, is something alone that would benefit the Google Reader product (and Google?¢‚Ǩ‚Ñ¢s reputation itself) if they were to adopt it.

privacy

Privacy. Stop looking.

Conclusion
Hey Google – can you hear me? Let’s hope so, because you might be the market leader now, but so was Bloglines once upon a time.

Explaining APML: what it is & why you want it

Lately there has been a lot of chatter about APML. As a member of the workgroup advocating this standard, I thought I might help answer some of the questions on people’s minds. Primarily – “what is an APML file”, and “why do I want one”. I suggest you read the excellent article by Marjolein Hoekstra on attention profiling that she recently wrote, if you haven’t already done so, as an introduction to attention profiling. This article will focus on explaining what the technical side of an APML file is and what can be done with it. Hopefully by understanding what APML actually is, you’ll understand how it can benefit you as a user.

APML – the specification
APML stands for Attention Profile Markup Language. It’s an attention economy concept, based on the XML technical standard. I am going to assume you don’t know what attention means, nor what XML is, so here is a quick explanation to get you on board.

Attention
There is this concept floating around on the web about the attention economy. It means as a consumer, you consume web services – e-mail, rss readers, social networking sites – and you generate value through your attention. For example, if I am on a Myspace band page for Sneaky Sound System, I am giving attention to that band. Newscorp (the company that owns MySpace) is capturing that implicit data about me (ie, it knows I like Electro/Pop/House music). By giving my attention, Newscorp has collected information about me. Implicit data are things you give away about yourself without saying it, like how people can determine what type of person you are purely off the clothes you wear. It’s like explicit data – information you give up about yourself (like your gender when you signed up to MySpace).

Attention camera

I know what you did last Summer

XML
XML is one of the core standards on the web. The web pages you access, are probably using a form of XML to provide the content to you (xHTML). If you use an RSS reader, it pulls a version of XML to deliver that content to you. I am not going to get into a discussion about XML because there are plenty of other places that can do that. However I just want to make sure you understand, that XML is a very flexible way of structuring data. Think of it like a street directory. It’s useless if you have a map with no street names if you are trying to find a house. But by having a map with the street names, it suddenly becomes a lot more useful because you can make sense of the houses (the content). It’s a way of describing a piece of content.

APML – the specification
So all APML is, is a way of converting your attention into a structured format. The way APML does this, is that it stores your implicit and explicit data – and scores it. Lost? Keep reading.

Continuing with my example about Sneaky Sound System. If MySpace supported APML, they would identify that I like pop music. But just because someone gives attention to something, that doesn’t mean they really like it; the thing about implicit data is that companies are guessing because you haven’t actually said it. So MySpace might say I like pop music but with a score of 0.2 or 20% positive – meaning they’re not too confident. Now lets say directly after that, I go onto the Britney Spears music space. Okay, there’s no doubting now: I definitely do like pop music. So my score against “pop” is now 0.5 (50%). And if I visited the Christina Aguilera page: forget about it – my APML rank just blew to 1.0! (Note that the scoring system is a percentage, with a range from -1.0 to +1.0 or -100% to +100%).

APML ranks things, but the concepts are not just things: it will also rank authors. In the case of Marjolein Hoekstra, who wrote that post I mention in my intro, because I read other things from her it means I have a high regard for her writing. Therefore, my APML file gives her a high score. On the other hand, I have an allergic reaction whenever I read something from Valleywag because they have cooties. So Marjolein’s rank would be 1.0 but Valleywag’s -1.0.

Aside from the ranking of concepts (which is the core of what APML is), there are other things in an APML file that might confuse you when reviewing the spec. “From” means ‘from the place you gave your attention’. So with the Sneaky Sound System concept, it would be ‘from: MySpace’. It’s simply describing the name of the application that added the implicit node. Another thing you may notice in an APML file is that you can create “profiles”. For example, the concepts about me in my “work” profile is not something I want to mix with my “personal” profile. This allows you to segment the ranked concepts in your APML into different groups, allowing applications access to only a particilar profile.

Another thing to take note of is ‘implicit’ and ‘explicit’ which I touched on above – implicit being things you give attention to (ie, the clothes you wear – people guess because of what you wear, you are a certain personality type); explicit being things you gave away (the words you said – when you say “I’m a moron” it’s quite obvious, you are). APML categorises concepts based on whether you explicitly said it, or it was implicitly determined by an application.

Okay, big whoop – why can an APML do for me?
In my eyes, there are five main benefits of APML: filtering, accountability, privacy, shared data, and you being boss.

1) Filtering
If a company supports APML, they are using a smart standard that other companies use to profile you. By ranking concepts and authors for example, they can use your APML file in the future to filter things that might interest you. As I have such a high ranking for Marjolein, when Bloglines implements APML, they will be able to use this information to start prioritising content in my RSS reader. Meaning, of the 1000 items in my bloglines reader, all the blog postings from her will have more emphasis for me to read whilst all the ones about Valleywag will sit at the bottom (with last nights trash).

2) Accountability
If a company is collecting implicit data about me and trying to profile me, I would like to see that infomation thank you very much. It’s a bit like me wearing a pink shirt at a party. You meet me at a party, and think “Pink – the dude must be gay”. Now I am actually as straight as a doornail, and wearing that pink shirt is me trying to be trendy. However what you have done is that by observation, you have profiled me. Now imagine if that was a web application, where this happens all the time. By letting them access your data – your APML file – you can change that. I’ve actually done this with Particls before, which supports APML. It had ranked a concept as high based on things I had read, which was wrong. So what I did, was changed the score to -1.0 for one of them, because that way, Particls would never show me content on things it thought I would like.

3) Privacy
I joined the APML workgroup for this reason: it was to me a smart away to deal with the growing privacy issue on the web. It fits my requirements about being privacy compliant:

  • who can see information about you
  • when can people see information about you:
  • what information they can see about you

The way APML does that is by allowing me to create ‘profiles’ within my APML file; allowing me to export my APML file from a company; and by allowing me to access my APML file so I can see what profile I have.

drivers

Here is my APML, now let me in. Biatch.

4) Shared data
An APML file can, with your permission, share information between your web-services. My concepts ranking books on Amazon.com, can sit alongside my RSS feed rankings. What’s powerful about that, is the unintended consequences of sharing that data. For example, if Amazon ranked what my favourite genres were about books – this could be useful information to help me filter my RSS feeds about blog topics. The data generated in Amazon’s ecosystem, can benefit me and enjoy a product in another ecosystem, in a mutually beneficial way.

5) You’re the boss!
By being able to generate APML for the things you give attention to, you are recognising the value your attention has – something companies already place a lot of value on. Your browsing habits can reveal useful information about your personality, and the ability to control your profile is a very powerful concept. It’s like controlling the image people have of you: you don’t want the wrong things being said about you. 🙂

Want to know more?
Check the APML FAQ. Othersise, post a comment if you still have no idea what APML is. Myself or one of the other APML workgroup members would be more than happy to answer your queries.