MiniMediaGuy

Targeting is the future of online advertising — or so I suggested yesterday when I cited a comment from Google CEO Eric Schmidt, and earlier mentioned a Yahoo ad campaign designed to target the advertising decision-makers who would might buy targeted ads (would that be meta-targeting?).

But what happens when targeted ads are misdirected? Online commentator Evan Coyne Maloney recently said ads attacking President Bush and Vice President Cheney annoyed readers of his conservative site, and caused him to withdraw from Google’s AdSense program.

AdSense lets bloggers and small web-sites get ads delivered to their pages. Publishers share in the revenues when people click on these ads. Maloney, a self-described“sometime political operative who also rode the dot-com wave from boom to bust” said too many pitches were misdirected and became were too insulting to his audience. His complaint to Google elicited this reply: “We understand your concern with the types of ads that are being displayed on your site. Please note that at this time AdSense only targets ads based on overall site content, not keywords or categories.” It would seem that the artificial intelligence crawler can determine that content is “political” but, not surprisingly, has trouble distinguishing left from right.

On the flip side of Maloney’s complaint, advertisers must worry that misdirected ads would waste money or, worse, tarnish their brands by appearing alongside inappropriate content. One survey by AdRelevance, a service (division?) of Nielsen/NetRatings, studied 300 million web ads, worth about $10 million, directed at women and selling women’s products. “Regardless of this targeted approach, more men on average saw these ads than women,” the report said, adding, “Targeting ads is anything but an exact science.”

The mission of AdRelevance seems to be helping big advertisers learn the art of placement. When into Maloney’s complaint, I tripped across a web site that helps small web publishers make use of AdSense. My sense is that everyone perceives that web ads are a fast-growing category, with huge potential, and many are rushing to embrace them. But the channel so novel that it still takes a pilot to help newcomers navigate past the sandbars. Interesting.

Tom Abate

Here are three snapshots of new and old media firm strategies in the wake of yesterday’s posting on EPIC, the futuristic info-net that humbled the New York Times.

Google chief executive Eric Schmidt voiced two overarching themes in a Dec. 1, 2004 interview with Fortune Magazine — serving communities of interest and targeted advertising. “There are an awful lot of communities that have never been served by traditional media,” Schmidt says. Apparently he doesn’t simply mean left-handed cat lovers. Google ad salesforce sells vertically into industries. “We would like customers to say to be able to say, –I’m in this industry, please help me.’,” Schmidt told Fortune, adding, “the real revolution here (is) targeted advertising.”

Yahoo chief financial officer Susan Decker made a December 1, 2004 presentation at Stanford University. I missed remarks but tripped across her slides, some of which speak for themselves. What struck me was her global view of the Internet marketplace. European and Asian Internet users now outnumber those in the U.S. (slide 5) and Asians could be the most numerous netizens by 2007. She mentions personalization (slide 16), the flip side of targeting as seen from the user’s view. Internet penetration in key markets is now upwards 60 percent, says Decker, adding that when cable penetration reached that rate, use as measure in hours-per-week accelerated (slide 8). “Adults 12 to 64 now spend an average of 15 percent of their weekly media consuming hours on the internet yet only three percent of advertising spend is online,” she says in slide 20.

A January 17, 2005, Business Week cover story on Arthur Sulzberger Jr. and The Future of the New York Times, says revenues have been flat for five years at around $3 billion, net income has fallen far below traditional newspaper expectations, and circulation losses inside the New York metropolitan area have been offset by national circulation gains. This national extension of the Times brand, says Business Week author Anthony Bianco, was partly driven by new business chief Janet Robinson, a former teacher who joined the paper in 1983 and worked her way up the ranks through advertising. The piece discusses the quandary facing all print media — whether to charge for content over the Internet. Web veteran John Battelle observes that, so far, the print side of the business has produced most of the revenues that allow the Times (despite the occasional scandal) to remain a synonym for quality journalism. Orville Schell, dean of journalism at UC Berkeley, has the killer quote. “The Roman Empire that was the media is breaking up,” he tells Business Week. “It’ a kind of desegregation of the molecular structure of the media.”

Tom Abate

A workmate turned me on to a video clip that purports to be a documentary set in 2014. That’s the year in which the New York Times quits publishing online and reverts back to print only. This occurs after the Times loses an imaginary news war to Googlezon — a firm created by merging Google search with the Amazon suggestion engine. Together they produces EPIC — the Evolving Personalized Information Construct — a network of newsmasters who assemble data streams for specialized audiences. “EPIC is a summary of the world — deeper, broader and more nuanced than anything ever before available.” (Access clip and transcript.)

EPIC has the look and feel of Apple Computer’s now-famous 1984 commercial. But it offers more than the shock value of that bit, by suggesting a future that seems plausible. One prediction will test EPIC’s prescience. In 2005, it says, “in response to Google’s recent moves, Microsoft buys Friendster.”

The video’s creators include Robin Sloan, a wunderkind with IndTV, an independent media company led by former Vice President Al Gore, entrepreneur Joel Hyatt.

It fascinates me how the idea is circulating. My friend saw the EPIC bit on Sun COO Jonathan Schwartz’s blog. With that kind of uptake, I guess a newsmaster doesn’t need the Times’ circulation to enjoy clout (though, my bourgeoisie side wonders who will pay their health care bills and match their 401(k) contributions).

Tom Abate

Wireless networking is great — when it works, which wasn’t the case at mi casa Sunday afternoon. One moment all was well. Next moment web access down! Call the parmedics, stat! I restored connectivity after some frustration. Seems my Surfrider web modem (from Comcast) shut out the D-Link wireless router. Went to bed connected. Woke up off-net. Again. Grrrrr.

I wasn’t around 80 years ago, but this experience reminds me of what I’ve read about the early days of radio, when reception was unreliable for reasons ranging from broadcasters transmitting outside their frequencies to, quite literally, interference from sunspots. Broadband is great but it’s not an appliance. It breaks too often and costs too much.

But that sounds like a rant. A change of mood is in order.

Big excitement at CES over online advertising sales. Larry Marcus with the San Francisco-based investing firm WaldenVC told Media Daily News“Internet advertising is now a $10 billion industry. That’s an incredible thing for content providers.”

And Yahoo is set to unleash a campaign, directed at potential advertisers, touting its ability to target ads to specific demographic and behavioral groups. You may not see the campaign unless you work at a targeted ad agency or client. According to MediaPost “Yahoo! plans to use domain targeting with the campaign, which will involve displaying ads to visitors coming from Internet protocol addresses of specific companies–including ad agencies, clients, and prospective clients.”

That should be a powerful demonstration of what online can deliver. But will the audience be there? In the off hours, I mean. Sure, my office network hums along thanks to the system guys who shield me from the complexity. But I’m not supposed to be shopping at my desk. At home, where I’m presumed to do all that personal stuff, those damn sunspots keep interfering.

Tom Abate

Here it is a lazy Saturday and my fingers are drawn to keyboard. I guess I’ve got a writing habit, which is probably a good thing for a blogger.

But it feeks like a day to let my thoughts wander to the peculiar habits of the Monarch butterfly colony that spends its winters in my Northern California city of San Leandro.

The Monarch is a lovely creature that has long fascinated naturalists and scientists. Among other noteworthy characteristics, it is poisonous. “Animals that eat a Monarch get very sick and vomit (but generally do not die). These animals remember that this brightly-colored butterfly made them very sick and will avoid all Monarchs in the future.”

Other species of butterflies have evolved markings similar to those of the Monarch to ward off potential predators, a self-defense strategy called mimicry.

Like many species of birds, some Monarchs also migrate from colder to warmer climates in the winter. Unlike birds, however, these short-lived butterflies cannot complete the round-trip in one lifetime. It takes takes more than one generation for a flock of Monarchs to make the round trip. It is the offspring of the Monarchs wintering right now in my town that will return here next January.

Even more amazing, the Monarchs that make this intergenerational journey are not created equal. “Adults that emerge in early summer have the shortest life spans and live for about two to five weeks. Those that emerge in late summer survive over the winter months. The Monarch that emerge in late summer and then migrate south, live a much longer life, about 8-9 months.”

I can’t imagine what mechanism, presumably coded into its genes, makes the summer-born Monarchs live fast and die young, while fall butterflies must hunker down for the long flight that became their lot through the evolutionary luck of the draw.

I have always believed in free will and argued the nurture side of the nature-nurture debate. But thinking about the Monarch always makes me wonder how much of our own behavior is hard-wired — and all the more grateful for the things about myself that I can control.

What a week! One of my New Years’ resolutions was to create a blog and populate it daily with something useful. After week one, all I can say is TGIF!

As I dragged myself out of bed this morning to make good my vow, I recalled the quote by famed writer Samuel Johnson : “No man but a blockhead ever wrote, except for money.”

Apparently, blockheads are running rampant these days, given the popularity of blogging. The New York Times Magazine inflamed the situation by making bloggers the darlings of the 2004 presidential election campaign. To show how out-of-control blogamania has gotten, my sister, Tina Nocera, just started a blog around her Parental Wisdom website. I am the oldest of six in my family. Tina is second in birth order. Two blockheads down. Four to go?

Meanwhile, in the business realm, blog-platform companies are consolidating. This week San Francisco-based Six Apart (home of Moveable Type) said it would buy the competing LiveJournal. Six Apart already owns TypePad. From a commercial view, such moves are probably necessary to create companies powerful enough become more than blockhead playgrounds in search of a business model.

Because the sad fact, for bloggers who have no desire to remain blockheads indefinitely, is that despite the media interest in blogging, the advertising industry, which supports most professional media activity, has been leery of supporting the community.

That’s the upshot of a recent Pew Internet memo on the state of blogging. A delicious writeup on the memo by MediaPost author Gavin O’Malley explained why advertisers are reluctant to funnel ads to blogs even when they generate a swell of interest, as occurred in the wake of the tsunami. “A company has to seriously ask themselves: ‘Do we really want to associate ourselves with the greatest natural disaster of the last quarter century?’”

But I think there are reasons blogs should find support. At least I certainly hope so. I’ll pick up that thread next week. For the time being, however, my blockhead could use time off from, as Samuel Johnson might say, such pecuniary ruminations.

Tom Abate
January 7, 2004

Ten million Americans “earn at least some money from their performances, songs, paintings. videos, sculptures, photos or creative writing.” I used that factoid to close yesterday’s blog about The Long Tail — the article in which Wired editor Chris Anderson suggests that publishers slash prices on their backlist to allow this languishing content to find its niche audience.

That’s classic economics. Drop price, boost sales, sacrifice margin, make it up in volume. But the Web is more than a distribution channel and it may enable a new economics. What if we could use the Web to drop the cost of producing and marketing amateur content? Could we double the ranks of money-making artists, providing lots of new content and growing many niche markets in the process?

Those questions guided me as I read the Pew Internet report on Artists, Musicians and the Internet, which provided the estimates cited above. The report had a lot to say about artists views on digital file sharing and copyright issues. But I focused on the numbers.

The 10 million people who earn some money from their creative works (for most it’s a sideline) are a subset of the 32 million who consider themselves artists or musicians but relegate creativity to a hobby.

That suggests to me that if a Web business could provide the tools or platforms to make money from art, this would induce some of those 22 million pure hobbyists to become creative moonlighters.

How exactly might that be done? Alas, I have more questions than answers, but here’s another market-friendly number for those in search of business models — roughly 40 percent of artists order supplies or equipment online (a nice close to an ad sales pitch!).

There are other encouraging hints in the report that many artists, and even more musicians, already use the Web to chat with each other, reach out to fans, sell their works — and that they want to use it more. The report quotes one musician lamenting the absence of a site to facilitate easy distribution of MP3 downloads: “If there were a site where I could post and charge others for downloads, I’d use it.”

Interesting given Anderson’s observation in The Long Tail about the failure of the amateur-music download site MP3.com (I added a link to Goodnoise). Perhaps they were ahead of their time or perhaps these sites had the wrong marketing and sales expectations.

Here’s what I mean. Say you’re one of the 22 million artists and musicians who now makes not one red cent from his or her art. And someone enabled you to invest, say, $100 to buy into a do-it-yourself art production venue on the Web. And in the first year, the person sold $400 worth of stuff — probably to friends, associates and family members, who would buy the content for the same reason that our office mates and neighbors buy Girl Scout cookies and fund-raising gimmicks.

It’s not the dollars that matter to the artist involved. They have moved into a new status of deriving at least some income from their hobby. The better and more ambitious folks will grow their cottage content businesses. And if enough of these folks could be assembled, there might even be a business model in making all this happen.

Tom Abate
January 6, 2005