Tag: advertising (Page 2 of 4)

Emerging trends? Nope – its been a long time coming

May 4, 2008 / elias

When I read the technology news, concepts about cloud computing still seem to be debated . I think to myself: you are kidding me right? I take a step back and think maybe the future won’t be like the current mantra, but then again, trends take time to materialise.

Scanning through my hard-disk, I could not help but laugh after I found a document I wrote to a friend in February 2006 – and as I said in the document "Those six points, as rough as they are, form core elements in my thinking on how I approach business on the Internet …[I’ve been thinking about it] since November 2003"

So below, is literally a copy and paste of that document that has seeds from way back in 2003 when I submitted a grant application for a business idea (ahem, no response obviously…). The fact that nearly half a decade has passed since I first synthesised these ideas (and no doubt, from reading of the thinkers of the day not just me being imaginative) means they are not flake predictions: they are real. Ready?

1. Digital future. All information ‚Äì news reports, television shows, educational text books, radio shows ‚Äì are being digitalised, coexisting with their analogue versions. Whether the digital replicas replace their analogue counterparts is pure speculation. But one fact we cannot ignore is that the possibility is there ‚Äì all content is now digital. And consumers will switch to the digital version if the value of the content consumed is better realised in digital form

Quick case study. Many pundits believe newspapers will not exist in 15 years. I know they won‚Äôt exist in 15 years, and I have spent three years thinking about this very point. At first I used to think digital replicas, as shown by http://www.newsstand.com, was what was going to transform the newspaper business. What I didn‚Äôt realise, is that the current newspaper experience far exceeds the digital replica (I was hung up on the idea of electronic paper [www.eink.com] ‚Äì which still remains a big possibility). But I knew the digital future was going to make the current newspaper business obsolete ‚Äì there is more value out of digitial. It only just hit me recently by observing my own behaviour‚Äì traditional newspapers are not going to be replaced by digital versions ‚Äì rather, the method¬¨ that people receive their news is going to change. And this fact is embodied by the recent acknowledgment of the world‚Äôs great newspapers of not being in the newspaper business anymore, but in the information business now. I used to read every single major newspaper, and several international newspapers, as I was a debater ‚Äì I was a heavy news consumer, and I still am. Today, I still follow the news very closely ‚Äì but I have not read a newspaper all year. Why? I receive all my information needs through websites, RSS feeds and blogs. A new method, made possible by the digital future. People means of consuming content will change because of digital.

2. Internet as infrastructure. It doesn‚Äôt take a genius to realise that the internet will be the core infrastructure of anything to do with information and communications. The power of the internet as infrastructure to communications and information unlocks opportunities that are transforming the world. Radio, TV, phone calls ‚Äì you name it ‚Äì can be done via the internet protocol now.

3. Content is king, distribution is queen ‚Äì but advertising is what pays for the cost of that sting. Google now makes more revenue than the three prime time television stations in the USA. In monetary terms, that‚Äôs about $10 billion a year. And yet, 99% of that revenue comes from one thing ‚Äì Google‚Äôs click-through advertising (about 45% from Google results, the rest from the Google network of publishers through adsense). HarperCollins announced last week that they are trialling a new business model of providing books for free but supported by advertising ‚Äì the consumer book business up until then was literally the only segment of media not reliant on advertising as a revenue model. Whilst broadcasting organisations make money from several sources, advertising is literally the backbone of their revenue. To make money out of any content, you place a huge reliance on advertising.
In short, if you want to make money out of content, you need to understand advertising

4. One-to-one advertising is the superior form of advertising. Partly due to technological factors, the mass media could only advertise through a one-to-many medium ‚Äì meaning one message to many. The digital-internet future has transformed that ability, by customising content on a one-to-one basis. If advertising, and content can be targeted to an individual‚Äôs personality profile and preferences, it allows for the value of the content to be maximised, with 1-to-1 advertising returning a higher return on campaigns – far superior than any other form of advertising. Superior because it can make advertising more relvant for consumers (ie, higher response rate), it can increase advertising inventory (mass media advertising is a bit like throwing pamphlets out of a plane, hoping the right people catch them – 1-to-1 means the right people get it at minimal cost and best of all, it creates better accountability which is what advertisers now demand.

5. The best business practice for one-to-one advertising is not there yet. The internet is the platform that enables one-to-one advertising, and yet, this opportunity has still not been fully exploited. There is a massive need in the market, for a means of providing personalised advertising far superior to the current technologies and methods. Google populised an innovative form of advertising through click-throughs. However internet click-throughs, despite providing more accountable and better targeted advertising, still lacks the ability to unleash the real power of one-to-one advertising. The power of the internet as a one-to-one advertising platform is still in its infancy

6. Privacy matters. Privacy is the right to determine what information is available about you, when you want it to be available, and to whom you want it available to. Current practices of companies who gain as much information about you through your sales history, your activity on the web, and the like ‚Äì are often doing so without the full knowledge of the consumer. It is information collected by spying on a consumer, and whilst some people retaliate by various measures (ie, fake information, anonymous proxies), there is great mistrust by the public in providing personal information, or rather, too much to one organisation. If information is to be used about people, there needs to be proper approval ‚Äì both for legal reasons (a business model cannot rely on consumer stupidity) but also for the integrity of the data (ie, a cooperative consumer will provide more reliable data)

Companies like Double Click who would collect your surfing history relied on placing a cookie on your computer ‚Äì what happens if you delete that cookie? And what happens if your dad, mum, and cousin from Brazil, use the same computer as you? That creates a fairly inconsistent ‚Äúprofile‚Äù of a person that is to be targeted

I had totally forgotten I had written that. And reading it now it’s a bit lame and I could probably extend on things a little bit – actually there are things I have actually written in blog posts this last year. Better still, I can provide actual evidence that validate these trends as advancing like the existence of the VRM project for advertising, the big clash with Facebook and privacy (and lets not forget the first time ), and Microsoft’s recent announcement about moving away from software (to pick but a few examples).

If this is what I was seeing in November 2003 as a naive university student absorbing what the industry trends were back then; February 2006 when I wrote to my friend what I thought he needed to consider about the future; and the fact I still agree with it in May 2008 – I think things are beyond speculation: these are long-term trends that are entrenched.

It’s all still alpha in my eyes

April 27, 2008 / elias

The invention of hypertext has been the most revolutionary thing since two previous technologies before: the printing press and the alphabet. Combined with computing and the Internet, we have seen a new world represented by the World Wide Web that has transformed entire industries in its mere 19 15 year existence.

The web caught our imagination in the nineties, which became the Dot-Com bubble. Several years after the bust, optimism reawakened when the Google machine listed on the stock exchange ‚Äì heralding a new era dubbed ‚Äúweb2.0‚Äù. This era has now been recognised in the mainstream, elevated by the mass adoption of the social computing services, and has once again seen the web transform traditional ideas and generate excitement.

The web2.0 era is far from over ‚Äì the recent global recession however has flagged though that the pioneers of the industry are looking for something new. As the mainstream is rejuvenated by web2.0 like the Valley was not that long ago, it‚Äôs time to now look for what the next big thing will be. Innovation on the web is apparently flattening. Perhaps it has ‚Äì but the seeds of the next generation of innovation on the web are already here.

Controversy of the meaning of web2.0 ‚Äì and what its successor will be ‚Äì should not distract us. We are seeing the web and associated technologies evolve to new heights. So the question is not when web2.0 ends, but what are we seeing now, that will dominate in the future?

My view:
‚Ä¢ The mobile web. The mobile phone is now evolving into a generic entertainment device, becoming a new computing device that extends the reach of the internet. First with the desktop computer, and then with the laptop computer ‚Äì new opportunities presented themselves in the way we could use computers. The use of this new computing platform will create new opportunities that we have only scratched the surface.
‚Ä¢ The 3D web. Visit second life, the virtual world, as you quickly note the main driver of activity is sex and that it‚Äôs just a game. However, porn and games have spearheaded a lot of the innovation of technology in the past. The 3D web is now emerging with four separate but related trends: virtual worlds, mirror worlds, augmented reality and lifelogging.
‚Ä¢ The data web. Data has now become a focus in the industry. The semantic web, eventually, will allow a weak form of artificial intelligence that will allow computer agents to work in an automated fashion. Vendor Relationship Management is changing the fundamental assumptions of advertising, with a new way of how we transact in our world. Those trends, when combined with the drive for portability of peoples data, is having us see the web in a new light with new potential. Not as a collection of documents, and not as a platform for computing, but as a database that can be queried.

So to get some discussion, I thought I might ping some smart people I know in the industry on what they think: Chris Saad, Daniela Barbosa, Ben Metcalfe, Ross Dawson, Mick Liubinskas, Randal Leeb-du Toit, Stewart Mader, Tim Bull, Seth Yates, Richard Giles as well as you reading this now.
What do you think is currently in the landscape that will dominate the next generation of the web?

Information overload: we need a supply side solution

April 13, 2008 / elias

About a month ago, I went to a conference filled with journalists and I couldn‚Äôt help but ask them what they thought about blogs and its impact on their profession. Predictably, they weren‚Äôt too happy about it. Unpredictably however, were the reasons for it. It wasn‚Äôt just a rant, but a genuine care about journalism as a concept ‚Äì and how the blogging ‚Äúnews industry‚Äù 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 ‚Äì 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 ‚Äì 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 ‚Äúquality‚Äù. 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 ‚Äì but it‚Äôs also radically transforming the dynamics that is impacting even the offline world.

Traditionally, the concept of ‚Äúinformation overload‚Äù 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‚Äôt so much the technological ability for anyone to create their own media empire, but instead, the incentive system we‚Äôve inherited from the offline world.

Whilst there have been numerous companies trying to solve the problem from the demand side with ‚Äúpersonalisation‚Äù 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.

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 ‚Äì 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 ‚Äì there‚Äôs 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 ‚Äì 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 ‚Äì the technology limited the ability to target.

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 ‚Äì they can now build a one on one relationship with that consumer. They can now knock on your door (after you‚Äôve flagged you want them to), sit down with you, and have a meaningful conversion on buying the product.

‚ÄúPageviews‚Äù are pamphlets being dropped ‚Äì 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 ‚Äì and so our new media content creators are being driven by an old media revenue model.

It‚Äôs 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 ‚Äì and vendors don‚Äôt 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 ‚Äì 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 ‚Äòtarget‚Äô 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‚Äôs 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.

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 ‚Äì the content-generating business will find a light to the hole currently being dug. Advertising on a ‚Äúhits‚Äù 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 ‚Äòcredits‚Äô 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 ‚Äì but once we all realise we need to work together towards a new future. But until we get that broad recognition, I‚Äôm just going to have to keep hitting ‚Äúread all‚Äù in my feed reader because I can‚Äôt 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‚Äôt reward their brilliance.

How business is done on the Internet

April 7, 2008 / elias

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:

Business models: What the structure of a business is.
Revenue models: How the business generates cash from customers to fund its operations.
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:

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.
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.
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:

Fees: Payment of a fixed amount for access or usage of goods and services over the internet
Subscription: Payment of a fixed amount on a periodic basis for access or usage of goods and services
Commission: Payment of a percentage fee of a transaction
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:

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
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
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?

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.

Pageview’s are a misleading metric

November 11, 2007 / elias

Recently MySpace, the social networking site that once dominated but is now being overtaken by Facebook, sent me an e-mail informing me that a friend of mine had a birthday. What is unusual, is that although I have received notifications of this type when I had logged into the site, I had never been e-mailed.

Below is a copy of the e-mail, and lets see if you notice what I did:

It doesn’t tell me whose birthday it is. In fact, it is even ambiguous as to whether it was just the one person or not. Big deal? Not really. But it very clearly tells me something: MySpace is trying to increase its pageviews.

Social networking sites are very useful services to an individual; they enable a person to manage and monitor their personal networks. Not only am I in touch with so many people I lost contact with, but I am in the loop with their lives. I may not message them, but by passive observation, I know what everyone is up to. Things like what they’re studying, where they work, what countries they will be holidaying in, and useful things like when they have their birthday.

Social networking sites are not just a website, but an information service, to help you manage your life. However as useful as I find these services, the revenue model is largely dependent on advertising, with premium features a rare thing now. So when you rely on advertising, you are going to be looking at ways of boosting the key figures that determine that revenue stream.

Friendster’s surprising growth in May was due to some clever techniques of using e-mail, to drive pageviews. And it worked. E-mail notifications, when done tactfully, can drive a huge amount of activity. Of the what seems like hundreds of web services I have joined, e-mail at times is the only way for me to remember I even subscribed to it once upon a time. Combine e-mail with information I want to be updated with, and you’ve got a great recipe for using e-mail as a tool to drive page views.

…And that is the problem. MySpace has very cleverly sent this e-mail to get me to log into my account. A marketing campagn like that will at the very least, see a good day in pageview growth. But the reason I am logging in, is just so I can see whose birthday it is. Myspace now to me is irrelevant: those pageviews attributed to me are actually, not one of an engaged user.

Pageviews as a metric for measuring audience engagement is prone to manipulation. Increases in pageviews on the face of it, make a website appear more popular. But in reality, dig a little deeper and the correlation for what really matters (audience engagement) is not quite on par.

So everyone, repeat after me: Pageviews – we need to drop them as a concept if we are ever going to make progress.

How Google reader can finally start making money

October 17, 2007 / elias

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?¢‚Ç¨‚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?¢‚Ç¨‚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 ?¢‚Ç¨‚Äú which is information already provided to users ?¢‚Ç¨‚Äú it would convert this into a relevancy score for Techcrunch of 89% or 0.89.

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?¢‚Ç¨‚Ñ¢t imagine it would too hard to do this, however given it?¢‚Ç¨‚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?¢‚Ç¨‚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 ?¢‚Ç¨ÀúSort by Personal Relevance?¢‚Ç¨‚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

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 ?¢‚Ç¨‚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?¢‚Ç¨‚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 ?¢‚Ç¨‚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?¢‚Ç¨‚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?¢‚Ç¨‚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?¢‚Ç¨‚Ñ¢s reputation itself) if they were to adopt it.

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.

Bloglines to support APML

October 3, 2007 / elias

Tucked away in a post by one of the leading RSS readers in the world, Bloglines had announced that they will be investigating on how they can implement APML into their service. The thing about standards is that as fantastic as they are, if no one uses them, they are not a standard. Over the last year, dozens of companies have implemented APML support and this latest annoucement by a revitalised Bloglines team that is set to take back what Google took from them, means we are going to be seeing a lot more innovation in an area that has largely gone unanswered.

The annoucement has been covered by Read/WriteWeb, APML founders Faraday Media,?Ç? and a thoughtful analysis has been done by Ross Dawson. Ben Melcalfe had also written a thought-provoking analysis, of the merits of APML.

What this means?

APML is about taking control of data that companies collect about you. For example, if you are reading lots of articles about dogs, RSS readers can make a good guess you like dogs – and will tick the “likes dogs” box on the profile they build of you which they use to determine advertising.?Ç? Your attention data is anything you give attention to – when you click on a link within facebook, that’s attention data that reveals things about you implicitly.

The big thing about APML is that is solves a massive problem when it comes to privacy. If you look at my definition of what constitutes privacy, the abillity to control what data is collected with APML, completely fits the bill. I was so impressed when I first heard about it, because its a problem I have been thinking about for years, that I immediately joined the APML workgroup.

Privacy is the inflation of the attention economy, and companies like Google are painfully learning about the natural tension between privacy and targetted advertising. (Targetted advertising being the thing that Google is counting on to fund its revenue.) The web has seen a lot of technological innovation, which has disrupted a lot of our culture and society. It’s time that the companies that are disrupting the world’s economies, started innovating to answer the concerns of the humans that are using their services. Understanding how to deal with privacy is a key competitive advantage for any company in the Internet sector. It’s good to see some finally realising that.

Service Seeking – new aussie eBay for services

October 2, 2007 / elias

I came across news that a new Aussie start-up, called Service Seeking, are launching today. Below is a summary:

The business is called Service Seeking (www.serviceseeking.com.au ). It’s an online market where people bid to do work for other people.

If you’ve got anything that needs to be done at home or around the office (eg a new website, some brochures or hire your next contractor), don’t waste time with the Yellow Pages. Post your project with Service Seeking.

It’ll cost you nothing, there’s no obligation to hire, providers chase you and bid against each other. Could be worth a try?

If you provide a service, then register. It will give you free access to new job leads. You only pay 5% for work which you win!

I’ve had a quick look of their site, and the interface seems pretty intuitive. They obviously haven’t got any activity yet, but their sample listings give an indication of the type of people they expect to use it: “I?¢‚Ç¨‚Ñ¢m moving: I need a cleaner“, “Business Cards & Stationary Print” (sic), “Furniture Removal“, “I want to get fit for Summer“, and “Legals for Property Sale“. The fact they are advertising on the domain.com.au network is a good indication that?Ç? they are targeting the housing market.
Similar to eBay’s reputation system there is also a mechanism to rate providors of services. Uniquely, it’s a score out of 100 and it is derived by people assessing them on quality of work, ability to keep to budget, ability to keep to schedule, communication style, and overall professionalism. This scoring system seems to be an important part of their business model, as they repeatedly make the case that its a way of getting business “without wasting time & money on marketing”.

The revenue model appears to be commission: service providers pay a 5% success fee on payments made.

It seems like a good idea. The Australian economy is 80% services, and the marketplace concept seemed to work for thousands of years as a way of commerce – I could certainly see myself using this service. However as a business model based on the network effect, they will thrive or flop depending on how they engage with the masses.

Making it free for the ‘demand side’ (the buyers) – you just place a request and someone approaches you for work – could be extended in a variety of ways and will be a key thing for it to take off. For example, partnership deals with major websites where people can post a request easily. Like any market, the demand side is is crucial – not enough people using it will make this a ghost town.

On the supply side, only charging when a payment is made means this is an outlet for free advertising, and should alone be a good incentive. However as I mention above, the key is engaging with the demand side – which they obvioualy are trying to do with their advertising campaign launching today.

The fact they are targetting the Australian market with a .au domain is both smart and stupid: smart because it plays on a competitive advantage that nationals of a country will use a business that is homegrown; stupid because it limits their business to the small Australian market. Nevertheless, for a small startup struggling for success, focusing on a niche market first is more important than playing for world domination. (And its not like service marketplaces is a totally new thing). But hey, with an Aussie economy worth?Ç? in exceed of?Ç? US$700 billion – if they can capture even only one percent of that, then that’s going to be happy days for them.

Facebook is doing what Google did: enabling

September 9, 2007 / elias

The hype surrounding the Facebook platform has created a frenzy of hype – on it being a closed wall, on privacy and the right to users having control of their data, and of course the monetisation opportunities of the applications themselves (which on the whole, appear futile but that will change).

We’ve heard of applications becoming targeted, with one (rumoured) for $3 million – and it has proved applications are an excellent way to acquire users and generate leads to your off-Facebook website & products. We’ve also seen applications desperately trying to monetise their products, by putting Google Ads on the homepage of the application, which are probably just as effective as giving a steak to a vegetarian. The other day however was the first instance where I have seen a monetisation strategy by an application that genuinely looked possible.

It’s this application called Compare Friends, where you essentially compare two friends on a question (who’s nicer, who has better hair, who would you rather sleep with…). The aggregate of responses from your friends who have compared you, can indicate how a person sits in a social network. For example, I am most dateable in my network, and one of the people with prettiest eyes (oh shucks guys!).

The other day, I was given an option to access the premium service – which essentially analyses your friends’ responses.

It occurred to me that monetisation strategies for the Facebook platform are possible beyond whacking Google Adsense on the application homepage. Valuable data can be collected by an application, such as what your friends think of you, and that can be turned into a useful service. Like above, they offer to tell you who is most likely to give you a good reference – that could be a useful thing. In the applications current iteration, I have no plans to pay 10 bucks for that data – but it does make you wonder that with time, more sophisticated services can be offered.

Facebook as the bastion of consumer insight

On a similar theme, I did an experiment a few months ago whereby I purchased a facebook poll, asking a certain demographic a serious question. The poll itself revealed some valuable data, as it gave me some more insight into the type of users of Facebook (following up from my original posting). However what it also revealed was the power of tapping into the crowd for a response so quickly.

Seeing the data come in by the minute as up to 200 people took the poll, as a marketer you could quickly gauge how people think about something in a statistically valid sample, in literally hours. You should read this posting discussing what I learned from the poll if you are interested.

It’s difficult to predict the trends I am seeing, and what will become of Facebook because a lot could happen. However one thing is certain, is that right now, it is a highly effective vehicle for individuals to gain insight about themselves – and generating this information is something I think people will pay for if it proves useful. Furthermore, it is an excellent way for organisations to organise quick and effective market research to test a hypothesis.

The power of Facebook, for external entities, is that it gives access to controlled populations whereby valuable data can be gained. As the WSJ notes, the platform has now started to see some clever applications that realise this. Expect a lot more to come.

Facebook is doing what Google did for the industry

When Google listed, a commentator said this could launch a new golden age that would bring optimism not seen since the bubble days to this badly shaken industry. I reflected on that point he made to see if his prophesy would come true one day. In case you hadn’t noticed, he was spot on!

When Google came, it did two big things for the industry

1) AdSense. Companies now had a revenue model – put some Google ads on your website in minutes. It was a cheap, effective advertising network that created an ecosystem. As of 30 June 2007, Google makes about 36% of their revenue from members in the Google network – meaning, non-Google websites. That’s about $2.7 billion. Although we can’t quantify how much their partners received – which could be anything from 20% to 70% (the $2.7 billion of course is Google’s share) – it would be safe to say Google helped the web ecosystem generate an extra $1 billion. That’s a lot of money!

2) Acquisitions. Google’s cash meant that buyouts where an option, rather than IPO, as is what most start-ups aimed for in the bubble days. In fact, I would argue the whole web2.0 strategy for startups is to get acquired by Google. This has encouraged innovation, as all parties from entrepreneurs to VC’s can make money from simply building features rather than actual businesses that have a positive cashflow. This innovation has a cumulative effect, as somewhere along the line, someone discovers an easy way to make money in ways others hadn’t thought possible.

Google’s starting to get stale now – but here comes Facebook to further add to the ecosystem. Their acquisition of a ‘web-operating system‘ built by a guy considered to be the next Bill Gates shows that Facebook’s growth is beyond a one hit wonder. The potential for the company to shake the industry is huge – for example, in advertising alone, they could roll out an advertising network that takes it a step further than contextual advertising as they actually have a full profile of 40 million people. This would make it the most efficient advertising system in the world. They could become the default login and identity system for people – no longer will you need to create an account for that pesky new site asking you to create an account. And as we are seeing currently, they enable a platform the helps other businesses generate business.

I’ve often heard people say that history will repeat itself – usually pointing to how 12 months ago Myspace was all the rage: Facebook is a fad, they will be replaced one day. I don’t think so – Facebook is evolving, and more importantly is that it is improving the entire web ecosystem. Facebook, like Google, is a company that strengthens the web economy. I am probably going to hate them one day, just like how my once loved Google is starting to annoy me now. But thank God it exists – because it’s enabling another generation of commerce that sees the sophistication of the web.