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May 31, 2005
Amazon and Personalized Predictive Media (Part I)
I love Amazon.com.
Why?
I buy a lot of things from Amazon, but mostly music cd’s. There are three reasons for this:
1. Subscription shipping. With Amazon Prime “all you can eat” express shipping for $79/year, I never have to worry about shipping costs. I don’t hesitate when purchasing something, even if it is a small order, because I know shipping costs are already covered.
2. Long tail product offering. The music that I listen to and purchase isn’t always in the mainstream, so it’s difficult to find. I usually can’t find it in Best Buy or other physical retailer, nor even on iTunes. But it is nearly always on Amazon, which is great. It’s only rarely that I am looking for something that I can’t find.
3. Personalized recommendations. I have purchased so much music from Amazon that my preference profile is very rich. So when they recommend via e-mail or on their site that I purchase an artist’s album that I haven’t heard of, I’ll check it out. I often buy it – and like it. The service’s recommendations now are so spot on, that I truly trust it. That’s a powerful thing to say: that I, as a consumer, trust that when a company says I should buy something from them, I do.
I bring up the case of Amazon example as just one example of where the consumption of media is headed. It will become personalized: it’s delivered just for me and no other consumer. And it will be predictive. It’s not just about giving me what I want and only when I want it, but also telling me what I want before I know that I even want it. Media should know where to find me; I shouldn’t have to know where to find it.
So it’s more than just personalized content. I think the power of personalization resides in telling me what I should be looking for. Amazon is already headed in that direction and is doing a great job. There are other examples, too, in the RSS world that I’ll touch upon in subsequent posts.
Posted by David Beisel at 9:30 AM | Permalink | Comments (0) | TrackBacks (0)May 26, 2005
Got Radio?
Traditional radio is really feeling the heat these days. Increased digital downloads (legal and illegal), satellite radio usage, and IP radio alternatives (including podcasting) are consuming a larger share of people’s music listening time. Radio is slowly losing the power that it once had, as evidenced by the following ad that I found while flipping through a magazine:
"Tons of artists. Zillions of songs. And oh yeah, it’s free. Radio. Brought to you by America’s 13,000 local radio stations that play artists like these every day."
Are ads like these going to have the same rejuvenating effect on the industry as the “Got Milk?” ads did for its own? I hardly think so. It appears to me more like a desperate attempt to grasp whatever still remains before these digital technologies facilitate change in a significant way.
Posted by David Beisel at 5:44 PM | Permalink | Comments (1) | TrackBacks (0)May 25, 2005
Social Networking for a Reason (and Revenue)
With yesterday’s news that Friendster is laying off people and that the company’s CEO will be leaving in a few weeks, it’s apparent that some of the first generation social networking sites are hitting a few bumps in the road. Bill Burnham wrote about this problem in a great post a few weeks ago,
"You see, despite all the hype about social networking, it has now become readily apparent that social networking is not an application in and of itself, but rather a by-product of other activities."
In other words, there needs to be a reason why people are getting connected. Jeff Clavier continues along that mode of thinking,
"The first generation of social networking sites (Friendster, Tribe, ZeroDegrees, Orkut, ...) have all gone through ups and downs (more downs) as they were pioneering in this new space - and not really figuring out a business model for themselves, besides advertising. Social networking is now an integral part of the fabric of Internet applications, but offers limited value in its own right - with a very quick decay of one's interest."
I would argue that in addition to possessing a reason d’etre, successful social networking companies will more closely integrate the revenue model into the functionality of the service. It’s not just about throwing up some advertising. Take, for example, H3, which embeds the purpose of the network (locating job candidates) directly into the revenue stream (a bounty for a located candidate). I think that we’ll continue to see closer alignment of the connections’ goals with the revenue derived from them.
Posted by David Beisel at 6:11 PM | Permalink | Comments (1) | TrackBacks (1)Search Spam That's Coming... (Time-based)
We all know about search engine spam. Wikipedia defines it using the coined term “spamdexing” as,
“the practice of deliberately and dishonestly modifying HTML pages to increase the chance of them being placed close to the beginning of search engine results, or to influence the category to which the page is assigned in a dishonest manner. Many designers of web pages try to get a good ranking in search engines and design their pages accordingly. Spamdexing refers exclusively to practices that are dishonest and mislead search and indexing programs to give a page a ranking it does not deserve.”
To combat the numerous techniques used to spam search sties (like keyword stuffing, invisible text, cloaking, etc.), the engines have deployed a variety of algorithms to determine ranking relevancy. (In a post earlier this month I talked about the fine line between search engine spam and content, arguing that different parties would disagree as to what is spam and what is actual content). Thus far, the major search engines have done a fairly (but not perfectly) good job at combating this problem, but it’s obviously a continuous battle.
Now enters the world of RSS and the Incremental Web. No longer is the position of a search result a function of its relevancy, but it is also a function of its timeliness. Consequently, search engine spammers have a new trick to play with.
For example, I’ve noticed as soon as I ping Technorati with a new blog post, a search for many of the keywords in that entry places my blog in the first result. As the day progresses, the blog entry moves down the list of results. I believe that spammers will begin to realize this “opportunity” to instantly have their pages placed at the top of the list results and exploit it.
Eventually the Feedsters and Technoratis of the world will determine algorithmic techniques to combat this problem, but I predict that there could be a bumpy transition period as spammers realize the power that’s here.
UPDATE: Since writing this entry, I’ve come across two great posts (here and here) from the hyku blog about spam moving to RSS and another with PubSub’s thoughts on the issue.
Posted by David Beisel at 8:47 AM | Permalink | Comments (1) | TrackBacks (0)May 24, 2005
Freakonomics & Correlation/Causation
After the extended media blitz in the past few weeks, along with the recommendations from fellow bloggers like Seth Levine, I decided to pick up a copy of Levitt & Dubner’s “Freakonomics: A Rogue Economist Explores the Hidden Side of Everything.”
While I am almost certain that this book is going to become the over-hyped over-fashionable cocktail-conversation book-du-jour (think: Gladwell’s Tipping Point), it is well worth the read. Seth summarizes,
“The basic idea of Freakonomics is to use statistical analysis to explore relationships and answer some pretty interesting questions about our world (are swimming pools more dangerous than guns; why do drug dealers live with their mothers; how can we tell if sumo wrestlers cheat; etc).”
I was happy to read that Levitt & Dubner directly address (more articulately than I) the relationship between correlation and causation that I passionate wrote about in my post, “My Pet Peeve.”
Page 163 reads,
“A regression analysis can demonstrate correlation, but it doesn’t prove cause. After all, there are several ways in which two variables can be correlated. X can cause Y; Y can cause X; or it may be that some other factor is causing both X and Y. A regression alone can’t tell you whether it snows because it’s cold, whether it’s cold because it snows, or if the two just happen to go together.”
Of course, I would take issue with many of their arguments and conclusions. For example, they try to dispel the conventional wisdom that flying is safer that driving, “The per-hour death rate of driving versus flying is about equal. The two contraptions are equally likely to lead to death.” I ask: isn’t the more relevant metric the per-mile death rate? Afterall, there’s a reason that people fly – to get there faster.
But more importantly, one of their basic arguments is that so-called “experts” in a field (like real estate agents) are often incented to not necessarily present the full truth. And these “expert” authors here run into the same quandary. With strong financial motivations to sell more copies of the book, Levitt & Dubner are compelled to make wild claims, which they do: the decline in the national crime rate in the nineties was a consequence of Roe vs. Wade; parents’ actions have little effect on the outcome of a child. There potentially may be some evidence to support these extremely controversial claims, but we must remember that the motivation of these authors comes down to the same principals which they themselves argue – economics.
Posted by David Beisel at 8:49 AM | Permalink | Comments (0) | TrackBacks (0)May 23, 2005
Knowing Your (Incremental) Online Reputation
While we transition from the Reference Web to the Incremental Web, more and more information will be available online – especially information about you.
As the web moves from merely a reference medium to a true conversational medium, and the tools to post our thoughts and digital content becomes more accessible, the amount of information about individuals will increase. And search engines dedicated to find that information will also flourish.
I think everyone (or at least nearly everyone) has “Googled” themselves to find out what is posted on the web about them. Yes, but have you “Technorati’ed” yourself lately? Other than professional bios, the reference information available when I’ve Googled my own name is pretty basic (for example, a quote in the New York Times and the results from an Angel Island 12K race a few years back). And my Technorati results are mostly just my own blog entries & trackbacks to them.
But what happens when your online reputation goes awry? In the course of my job, I was doing due diligence on one nameless entrepreneur and learned his fiance’s “pet” name for him in her blog. That, I am sure, he didn’t wish for someone in a professional context to see. Embarrassing, yes, but innocuous as well. Yet you can see where this could go if only taken one step further. An angry ex-spouse rants on his/her blog about the other, or a not-so-flattering picture from last year’s company holiday party tagged with your name on flickr. That could do some actual damage.
Your online reputation does matter, and I’d argue it will increasingly do so.
For example, when Fred Wilson of Union Square Ventures hired Charlie O’Donnell, he turned to online research, “We found his blog to be the single best diligence item in our process of hiring him.” Now that’s a powerful demonstration of a positive online reputation.
Increasingly, we are going find out information – both professional and personal – about people online. (I know from my own web server logs that ten people found have found this blog so far this month by typing my name into one of the search engines.) And as more information about us is online, people will be increasingly likely to search for us.
Do you know your own online reputation? It’s out there whether you know it or not.
Posted by David Beisel at 8:34 AM | Permalink | Comments (2) | TrackBacks (1)May 19, 2005
The Need for Speed
In a recent Business 2.0 interview with Om Malik, Cisco Systems' Chief Technology Officer Charlie Giancarlo is quoted as saying,
"I think 100 megabits per second into the home is a given [in the near future] if we want more HDTV channels on our IP connections. Inside the home, 1 gigabit per second is going to be necessary as we move those big video and audio files around. In a decade or so, I expect that gigabit wireless would be cheap enough as well."
The only question that I would ask is: with each member of a four person household all simultaneously using utilizing HD IPTV, VoIP, file sharing to multiple devices, automated storage backup, and many other imminent bandwidth intensive apps – perhaps we need 1 Gb/s into the home sooner than in a decade?
There’s no question, though. It’s coming.
May 18, 2005
Explicit, Implicit, & Advertorial RSS Monetization
The CEO of Indeed, Paul Forster, addressed a number of topics on yesterday’s Syndicate panel entitled “New Pathways to Profits: Exploring Business Models.” I caught up with him after the session to chat about the very insightful distinction he made about how corporations can monetize content, even though RSS allows it to be decoupled from its origins. After all, how do you monetize content when it’s everywhere and no longer under complete control?
Paul drew a distinction between what he calls explicit monetization vs. implicit monetization. Explicit monetization is direct and overt. By definition, user-generated revenue is tied directly to the feed itself. The best example is the placement of ads in publisher content RSS feeds. Classic model of content surrounded by advertising.
Implicit monetization is more subtle. The way I understand his characterization, corporations can offer RSS feeds which are part of the value of a user’s revenue stream, but the revenue generation isn’t directly tied to the feed. For example, UPS or FedEx offering a tracking feed tracing the path of a customer’s package. It is not explicitly a revenue-generator, but rather delivering service value which the customer certainly pays for in turn.
I would also argue that there is a third category of monetization somewhere in between explicit and implicit, which I’ll call advertorial monetization. There is a distinctive set of content that companies can offer which is both editorial content and advertising – i.e. advertorial. In these feeds, the content is the advertising, yet it still delivers value to the end-user. For example, e-retailers could offer consumers a feed with weekly coupons. Or, eBay could offer a feed with the persistent results of my search for “t-shirts,” so I always know what’s for sale on its marketplace. In both of these cases, these feeds are advertorial because they are clearly merchandising a company’s products, yet they still offer value to the end-user.
I think that both start-ups and large corporations alike can benefit from exploring which of these three monetization strategies are best suited for the type of syndicated content they offer their customers – explicit, advertorial, and implicit monetization. It’s not a one-size-fits all.
May 17, 2005
Syndicate Theme: Choice and Voice -or- My Media, I am My Media
As I posted last week, I am here at the Syndicate Conference in New York City.
The opening speaker Bob Carrigan, CEO of Computerworld, identified two major trends that are emerging in online media: “More Choice” and “Online Voice.” Coincidentally, J.B. Holston, CEO of Newsgator just posted a thoughtful blog entry on the same subject, merely giving the ideas two different labels, “My Media” and “I am My Media.”
What do these labels mean?
“More Choice” and “My Media.” Because of technologies like RSS, consumers are increasingly more able to dictate how, where, and when they consume content. To compete in this sea of content, it becomes more important that publishers offer content not as a one-size-fits-all, but in the format and venue that users truly want it.
“Online Voice” and “I am My Media.” Bloggers, podcasters, and all other forms of user-generated content are giving individual consumers a voice to express their opinions, thoughts, and ideas. And the ability to syndicate this content has empowered these individuals to find an audience. Very powerful.
Both themes are driving new innovation. NewsGator, for example, gives users the ability to read RSS feeds on multiple devices – desktop, mobile, media center, etc. But RSS aggregation and reading is just one way that start-ups can and will capitalize on this trend.
May 16, 2005
Enterprise Software is Dead But it Won't Die
Jeff Bussgang reported from the annual VC Conference, “The enterprise software business model is dead… VC appetite for standard enterprise software appears to be dwindling to nothing.” And Jeff Nolan simply replies, “agreed.”
But even though enterprise software is dead, it’s not really going to die. Despite indications otherwise, VC’s will continue to fund enterprise software companies for three reasons:
1. While the overall model and outlook admittedly looks grim, there are still a few remaining pockets where innovative start-ups will fill in gaps with new technologies facilitating localized change.
2. Fledgling enterprise software companies will dress up and adopt buzz-word monikers like Software-as-a-Service and open source. Then it's sexy, and more likely fundable.
3. VCs, especially those on the East Coast, are used to funding enterprise software companies. It’s really tough to change, as old habits die hard.
May 15, 2005
The New Startup Model? (Google & Dodgeball)
While many hypothesized on why Google acquired Dodgeball last week (for example, Gary Price and Russell Glass), I think one of the most interesting posts came from Marc Canter. He wrote a semi-satirical semi-serious post describing the new way for internet entrepreneurs to hit:
"OK - so first you graduate from Clay Shirky's exclusive school of thought, eat the red pill, drink some koolaid and do something Clay thinks is cool. Then you use the blogosphere to launch - but you never really achieve critical mass - but that's OK. As long as Cory Doctorow or Xeni think it's cool - you're set. There's not need to achieve positive cash flow or even have more than 2 employees. Just build up a "little traction" and come up with some cool model like "Stoli Vodka" wants to be your friend. Come here to meet Stoli (or was it Skye?) Then just stand back and wait to get bought out. It worked for ODDpost, Flickr and now Dodgeball - who's next?"
George Bernard Shaw once wrote, "When a thing is funny, search it carefully for a hidden truth." And I think that Marc has hit upon some truth in his parody.
Entrepreneurs are discovering a New Startup Model: bootstrap and build a product, generate buzz on the blogosphere and the early adopter community, skip vc financing, and sell to one of the portals.
Everyone wins in this game. Entrepreneurs innovate and cash out early. Google and Yahoo outsource their innovation to the best and the brightest without paying a hefty price tag.
Well, almost everyone wins. VCs are left out without the ability to invest and make returns for their LPs. What’s a VC to do? It’s up to us to demonstrate to entrepreneurs that with additional investment, their potential quick flip can become a solid and enduring company where genuine and significant value is created.
It will be interesting to watch Yahoo and Google over the next few years – will they increasingly acquire early-stage companies or are these recent examples just symptoms of the fact that we are early in this innovation cycle?
May 12, 2005
Seven Reasons Keyword Prices Are Rising
John Battelle’s blog identified Fathom’s recent announcement that search engine keyword prices increased 11% during the month in April. Despite a slight drop during the first two months of the year, it appears that the trend towards rising keyword prices is continuing. What is driving this sustained escalation of keyword costs? My thoughts are that the possible set of reasons includes:
1. Better conversion rates on advertisers’ website landing pages make each click more valuable for return on investment calculations.
2. Realization by marketers that there is additional ROI value in search traffic beyond immediate clickstream conversion is slowly being factored into prices.
3. More advertisers coming online fill in bottom-half purchases of specific keywords are thus raising the average price for that word (i.e. filling in coverage vertically).
4. Keywords previously underdiscovered – further down the long tail of terms – are being filled in, and previously undervalued specific keyword prices climb as a result (i.e. filling in coverage horizontally).
5. Margins are getting squeezed on the advertisers’ end as more advertisers are bidding on terms.
6. Seasonal opportunities (like mortgage-related terms) are baked into more recent figures.
7. Irrational spending is happening as novice search marketers unwisely jump on the search bandwagon. Yes, a keyword bubble.
My true hypothesis is that keyword prices are rising due to a combination of the above factors, with some being more influential than others. Perhaps there is a keyword price bubble as some have suggested, but most likely irrational spending is localized to specific sets of keywords, not symptomatic to the market overall.
What do you think? Are there additional reasons why keyword prices have been rising that I haven’t enumerated above?
May 11, 2005
East Meets West
My original post reacting to Jeff Bussgang’s thoughts on why Boston doesn’t have any great consumer hits argued that it is primarily due to culture. The West Coast general psyche is more comfortable with taking big risks for big rewards, whereas the East Coast frame of mind steers towards calculated, formulated risks.
There were two articles in the Boston Globe earlier this week, both here and here, that speak to the differences in venture capital investing cultures between the two tech centers. If you have an interest in this coastal comparison, you should read both articles, especially to hear quoted perspectives on the issue from a number of VCs.
The second article from Robert Weisman states,
“While many trends can be seen on both coasts, Silicon Valley venture capitalists who spend time in Boston see some differences: a venture industry in the Valley that invests more than twice as many dollars as New England, the nation's second-largest venture market; a less clubby environment here in the West, with more tolerance for failure; a greater emphasis on consumer-oriented investments, from digital media to personalized medicine…”
But as I’ve argued previously, this situation – especially with respect to digital media and consumer-facing technologies – needs to change. Weisman continues,
“[The] focus on consumers, stand[s] in contrast to the 1990s, where the most profitable niches in California and New England were selling software and telecommunications gear to corporate data centers. But those niches are being squeezed today, with businesses cutting back on spending.”
That assessment is absolutely correct. The continued demand for consumer-centered technologies (including the infrastructure to support them) will force the Boston entrepreneurial community to at least partially shift its focus away from enterprise information technology and towards what has been traditionally West Coast territory.
Posted by David Beisel at 6:01 PM | Permalink | Comments (1) | TrackBacks (0)Syndi Conference
Paul Kedrosky is saying,
“This IDG Syndicate Conference in New York May 17/18 is turning into a real coming out party for RSS.”
I, for one, am looking forward to attending the event next week. The speaker list definitely includes all of the “who’s who” in the RSS-related space. I will report back in my blog with my takeaways and impressions from the conference.
If anyone attending wants to connect in between sessions, just drop me a note and let me know – it would be great to meet in person.
May 10, 2005
The Things That You Can Do…
I usually don’t merely provide a link to another site without some commentary or opinion, but I really like Tim Yang’s post, “15 things you can do with RSS (it was supposed to be 10, but I got carried away).” It provides some additional examples that complement my post, “RSS Isn’t Just For Blogs.”
RSS is for so much more than blogs.
Posted by David Beisel at 4:45 PM | Permalink | Comments (0) | TrackBacks (0)My Pet Peeve: Correlation vs. Causation
People often mistakenly derive extraneous meaning out of the fact that two things are merely correlated. They will say, “A increases as B increases; if we change A, then that will affect B.”
It’s actually more than a pet peeve, a minor irritation. It’s really flawed logic.
Correlation simply doesn’t imply causation.
Just because two trends are correlated doesn’t mean one causes the other. Often, a third related factor causes both originally identified trends.
For example, just because in the past few years we’ve seen an increase in both search engine spending and the number of SEO/SEM firms, it doesn’t mean that one of these caused the other. Will increasing search engine spending directly increase the number of SEO/SEM firms, or vis-versa? Perhaps the real driver is the number of advertisers who have experimented and enjoyed successful results from these marketing efforts. Or maybe it’s a virtuous cycle in which it’s difficult to truly unmask the true cause.
Along those lines, we often see business plans here at Masthead that claim “because Factor X increases as the customer’s revenue-per-user increases, our product which affects Factor X will increase revenue even more.” Really? Maybe, but often there is a Factor Y which is the real cause of both Factor X and revenue. A company’s product offering should really get to the heart of the issue and the real driver of value.
When people present correlation graphs, I stop paying attention when they don’t know the difference between the two ideas of correlation and causation. This mistake is very dangerous, as it often leads people to chase the wrong goals.
May 9, 2005
30-Second Ads Aren't the New 30-Second Ads
In an AdWeek article, Brian McAndrews, CEO of aQuantive is quoted as saying,
"The Web site is going to replace the 30-second commercial as the expression of a brand."
Yes, as content accessed via the web replaces prime time television as the preferred means of reaching consumers, digital media will become the it media. But as Julian Smith argues in this article, “Online Video Ads: Think Web, Not TV,” advertisers can’t just drop in their 30 second spots onto the web. There is a lot of power in internet advertising, but marketers need to be extremely conscious of the differences between the mediums.
Blog Hypecycle Datapoints
Just a few days last week after I blogged that we should “expect to start seeing more grumblings of dissent claiming that the blog promise is overhyped,” the NY Times ran a story titled, “A Blog Revolution? Get a Grip.” The quick summary,
“Other critics of the blog movement wonder whether the hoopla over the commercial viability of blogs - particularly as publishing ventures - is overstated.”
My belief is that this is just one datapoint along the way on the Gartner Hype Cycle. So when voices begin to inject some realism into the discussion, don’t believe sky is falling as we realize that it isn’t an absolutely picture-perfect blue.
May 4, 2005
Riding the Hypecycle
Two weeks ago Business Week featured a cover story, “Blogs Will Change Your Business.” Just another mainstream media recognition that blogs are having a profound effect on not just traditional media, but also the business world as well.
And just as the mainstream acceptance – and excitement – begins to take hold, one of the leaders (Pete Blackshaw, CMO of Intelliseek) in the movement voices a bit of concern. His ClickZ article “Irrational Blogguberance?” suggests that we may be overhyping the potential that blogs have to offer.
Is this really the case? Are blogs not all that they are cracked up to be?
I would suggest that the adoption, and more importantly, the hype surrounding blogs is and will continue to follow the Gartner Group’s Hype Cycle. Succinctly stated, this Gartner theory maintains that the emergence of any new technology follows a well-defined path towards maturity – first a technology trigger, followed by inflated expectations, disillusionment, enlightenment, and finally reaching the plateau of productivity.
I believe we’re still on the upward slope towards a peak of inflated expectation. Though Rick Klau suggested two years ago that we were well beyond it at that point. Only time will tell, as history only becomes clear in retrospect. Regardless, expect to start seeing more grumblings of dissent claiming that the blog promise is overhyped.
For now, I think Pete’s critique is both fair and thoughtful. He articulately lays out a number of reasons why the picture isn’t perfectly rosy. I would especially highlight his comment,
“Think less about blogs and more about RSS. As marketers, we may be too consumed with the word "blog." The bigger idea fueling what some refer to as "the second push revolution" is RSS, which is becoming a de facto publishing standard, whether emanating from blogs or regular Web sites. Content is published, users subscribe, and data are seamlessly delivered to personal blogs, RSS readers, My Yahoo!, and the like. RSS basically brings the time-shifting concept of DVRs to the Web. This consumer choice and control is what "new" marketing is all about.”
This point I cannot stress more. As I’ve blogged previously, RSS isn’t just for blogs. While blogging has brought RSS to the forefront, the myriad of other RSS uses will lead the Internet’s transformation towards the true Incremental Web. Along the way, we will have to rise through the peaks and valleys of hype associated with any new technology, but the fundamental value is real and is here to stay.
May 3, 2005
The Fine Line Between Search Engine Spam and Content
In Monday’s WSJ article “Web sites that exist only to sell advertising," Lee Gomes complains how spam is clogging up search engine results pages and goes on to blame the major search engines themselves for the problem.
He writes,
“It's new and improved spam: pseudo-useful pages that are usually just shells for ads… In many cases, a page might at first glance seem like a guide to your topic. But after a minute or two, it becomes evident that the information is virtually useless but is surrounded by an ocean of ads. In other cases, you find "referral services" -- dozens of them -- that promise to put you in touch with reputable contractors… A kind of schizophrenia exists at search-engine companies. Half their engineering staff is busy trying to keep useless pages out of search results; the other half is busy coming up with tools that make it easier for people to create and profit from the useless pages in the first place.”
John Battelle laments,
“He's right, of course. We all have seen the crap that lards up results, pretending to be "services" of one sort or another. Is it spam? Well, it's clearly affiliate- and AdSense-driven sludge. At best, it's gray.”
Gomes stumbled across this phenomenon when he was researching the topic of roof repair, but you can find it in a myriad of spots. Take a search on Google for “Boston dentist” for example. Findadentist.com is at the top of this list. This site merely refers users to listings of dentists in the area and surrounds that “content” with a number of ads, including those from Google’s Adsense.
Is this really spam? Or is there true content here? What happens if Findadentist.com was to add user-generated dentist ratings? Articles on finding the right dentist? It already does have a quick summary on dental insurance vs. dental plans. When does a site cross the line from pure spam advertising to providing valuable content? John Battelle’s assessment is correct: it does feel a sludgy, but it’s very very gray. I don’t know the answer.
There are a number of small start-ups out there – some of which are looking for VC funding – which exploit this structural phenomenon. I think it’s going to take a while for the investors, search engines, and users to sort out what’s valuable content and what is spam. The question we should all ask is: is this site actually creating something of value for the consumer? Or is it merely playing a traffic game? Eventually, we’ll get there (perhaps with tagging or other social-influenced system), but it’s going to take some time.
May 2, 2005
The Bright Line Between Adware and Behavioral Targeting
Joanna Glasner of Wired wrote a piece where she states that behavioral marketing is “a growing niche in the online advertising industry focused on targeting promotional messages to an individual's online activities. Some might call such tracking across websites by a less flattering name: adware.”
She is absolutely wrong in defining all behavioral targeting as adware. There is a bright line separating these two concepts.
Let’s take Wikipedia’s definition of adware: “any software application in which advertisements are displayed while the program is running.” Fundamental to this concept is that a user has (often misknowingly) installed a software application and is being presented with ads that are not supporting any content. Again, with adware, users have an executable program running on their machines at all times (as the apps are dropped into the start-up routine). And they are randomly being subjected to pop-up ads which are not correlated to any valuable content or otherwise to the consumer. (I should mention that from here, there is a slippery slope into other types of ‘ware, like spyware and malware.)
In contrast, legitimate behavioral targeting involves ads or services served in conjunction to valuable content. It does not utilize any executable files on the user’s desktop, but instead uses innocuous cookies technology. The result is more relevant banner ads on the sites you are already surfing and more appropriate recommendations on e-commerce sites where you are already a customer. It is not random and intrusive pop-ups.
So while adware and legitimate behavioral targeting both serve advertisements based on users’ past behaviors, that’s where the similarities end. To mention companies like Choicestream and Amazon in the same breath as a rouge company like Claria is fundamentally wrong. It looks like the PR departments of companies like Claria and WhenU have done a good job of confusing the press about the difference. But underneath their new costumes, adware companies are still the same, and are in turn damaging the reputation of legitimate behavioral marketing services.