« May 2006 | Main | July 2006 »
June 27, 2006
The Value of the Demo
It nearly always helps for me to see a startup’s demo when the founders of a company are giving a pitch to us at Masthead. Even if it is a canned demo or just a movie of what the software/service/product would look like, this visual representation is nearly always beneficial. For me, the value of the demo isn’t to help me comprehend the service itself, but rather to help me take that understanding as given and visualize beyond it. Rather than expending mental energy on translating a concept into how it could manifest itself, a demo (even if not fully baked) allows me to apply those mental resources on what it really means to have a full working product (whether that’s now or in the future). From there, I can more clearly see the potential of a business and the steps required to make it a reality. And it provides a lot of signal value as to how the team can transform/execute ideas into tangible product. I’ve been in many meetings where I understood theoretically where a company was aiming, but until I saw a raw demo of how that could translate, I didn’t fully see the company vision.
(I value demos so much that I’ve centered much of the Boston Web Innovators Group meetings, which I organize, on them. And it’s no surprise to me that one of the premier conferences for launching new emerging companies does as well.)
This simple tool that brings meetings forward in a way that others can’t, and I am surprised that more entrepreneurs don’t use it more effectively in an investor pitches, prospective customer situation, or in public relations forums. The risks in doing so, however, are real in all of these situations. Troubled execution of presenting a demo can at the very least change the tone of the meeting, or at the worst, significantly hurt it. Preparedness is the mantra here, but of course that should go without saying. For a new start-up’s demo, seeing isn’t necessarily believing, but it is a good first step on the road towards it.
Posted by David Beisel at 11:02 AM | Permalink | Comments (0) | TrackBacks (1)June 16, 2006
AJAX Shouldn’t Just Wow, But Also Register
Much has been written over the past year or so about AJAX-enhanced web pages, and I personally have been wow’ed by many startups which have leveraged this set of technologies to create whiz-bang features for many of their services. It seems that every day TechCrunch is profiling another Web 2.0 startup that has some candy implementation that makes their web app easier to use, more pleasing to look at, and most importantly, richer functionally without page reloading.
But the one area where I haven’t seen much use of AJAX is on user registration pages. And this fact surprises me, especially given two issues:
1. The number of web services which require this user workflow.
2. The importance of this workflow in a user’s perception of the service and the conversion from a surfer to an actual user.
Registration pages often ask users to fill-in a number of fields, many of which are optional or conditional based on answers to previous fields. It seems natural to me for a reg page to include AJAX-enabled functionality to simplify and reduce the intimidation-factor for the page. Anything to reduce friction in this process is highly beneficial. I would suspect that a well-designed page enhanced with AJAX would not only increase conversion rates, but also allow for a richer set of data to be collected from the user.
I am sure that more than a few startups (or even larger corps) have experimented here... but I just haven’t seen many. I would be interested in hearing about any examples of demonstrated successes (perhaps even with metrics?). Regardless, I believe there is a lot headroom for startups to harness AJAX on both registration and landing pages to more seamlessly pull users through this often tedious yet important aspect of many web service offerings.
June 14, 2006
eBay’s AdContext (and "AmazonContext"?)
Though its stock price is has been downtrodden over the past six months, I like a lot of the things which eBay has done recently. First, the introduction of the eBay Express, which further expands the company’s merchandising platform beyond the auction model. Then, the announced partnership with Yahoo will push the two companies in joint efforts in advertising, online payments, a co-branded toolbar, and the testing of a click-to-call functionality. Third, as I blogged about last week, eBay is making moves towards social commerce, with the addition of wikis and blogs to their platform toolset.
However, the company’s most recent announcement to launch AdContext, at last places them in a crowd with the other big Internet players (MSN, Yahoo, Google) by adding a contextual advertising network to their services. This key move is a final admission that the distribution of the eBay content shouldn’t be limited to their site itself, but rather throughout the web as a whole. Moreover, it extends the range of the buying process where the company captures value – from the matching of buyers and sellers with transaction processing to the role where advertising acquires the individuals to transact these offers. (It will be interesting to see where the role of Shopping.com further incorporates into this process over the long term.)
Didn’t eBay already have a solution for web publishers to monetize their sites by sending web traffic to their site? Isn’t the successful eBay affiliate program just that? Yes, the eBay affiliate program gives publishers many ways to earn revenue though the syndication of eBay’s content. Other than the repackaging and PR spin, my perception of the fundamental difference is that the serving of “ads” will now be done contextually – automatically – via a scrape of the corresponding publisher web page. This addition allows publishers to effortlessly more accurately target appropriate eBay offers to their audience, thus driving more transactions and therefore higher effective CPM rates.
Similarly, Amazon’s once-ground-breaking affiliate program, dubbed the “Associates” program, also extends syndicated product content to publisher sites for revenue sharing. Utilizing Amazon’s rich API, entrepreneur developers have figured out numerous ways to monetize on their own sites. However, with eBay’s launch of AdContext, I would expect Amazon to respond in kind and launch its own “AmazonContext” network very soon.
The key differentiation between eBay’s AdContext and a potential pending AmazonContext network vs. the Google/Yahoo/MSN’s networks is that the ads themselves are product-centric vs. offer-centric. Ads contain individual products themselves, as opposed to just offers about the type of information a user will receive upon clickthrough to the advertiser’s website. This distinction is both a strength and a weakness for them. I would expect for one set of publishers (especially those with an e-commerce focus), their web real estate will be more highly monetized with a product-centric system. On the other hand, sites with content less applicable to products will likely to continue with monetization from a network with broader-based generalized offers. Afterall, save strategic reasons for larger publishers, most publishers further down the long tail are purely going to go with whatever network consistently delivers the highest effective CPM for a given real estate.
The good news here for emerging web startups is that there is an increasing number of self-service contextual advertising networks which offer low-cost/low-barrier-entry into revenue generation mode. Depending on the payout rates, the addition of eBay’s adContext into the mix should be a benefit for many web publishers with product-focused content.
June 5, 2006
eBay Goes Social with Commerce
Steve Rubel’s recent post expands on an Auction Bytes report that eBay will launch blog and wiki publishing tools into its platform during the eBay Live conference next week. He writes,
“By launching blogs and wikis, eBay is taking a big step to push into the social commerce arena. Conversation drives commerce so integrating blogs, wikis and tags into the eBay toolkit is a natural extension to their core platform, which has long included discussion boards. I would not be surprised to see the company take this a step further and build eBay into a giant social network that lets like-minded buyers and sellers find each other.”
Back last December, I suggested that 2006 would bring developments in social commerce, and it’s natural to see that eBay has realized and started to pursue this opportunity to provide consumers with richer social context and relevancy to the purchases which they are making. It’s still a bit too early to tell if these specific features eBay is launching will be successful, as the execution of them is the key factor here. After all, Amazon added wikis and tagging to their product pages back in November, and in my own experience shopping as a heavy Amazon user, I can’t recall seeing anyone using them (though perhaps my own pageviews aren’t representative).
Both beauty and the challenge of blogs and wikis, as opposed to other types of user-generated content, is that they are a clean slate. Without set stricture and rules, users have the freedom to contribute anything. Yet without direction and guidance, general consumers often don’t know what to write. Product reviews and seller feedback make sense; an open forum to literally contribute anything may not.
Regardless of whether or not this step by eBay works initially, it places the company on a road to using social software tools to more easily facilitate connections between buyers and sellers. It further enhances eBay as a place not just to transact commerce, but to also learn about the products themselves within a social framework.
And it’s notable that new startups have emerged in the social commerce category since my December post, like MyPickList and GiftTagging. I think that while these and other services are onto something, there’s still some heavy experimentation that needs to happen before the right social commerce model is discovered. But it is clear that increasingly you won’t be alone when you’re shopping online.
June 1, 2006
Search's March Towards Advertorial
Back in April, Forbes reported that as part of Yahoo’s effort codenamed “Project Panama,” it will move away from its original Goto/Overture-inspired straight CPC pricing for paid search towards a system which mirrors that of Google (ranking both by the amount advertisers pay for keywords and the relevancy of the ad).
Last week, Google (without much fanfare) one-upped Yahoo in the calculation of Adwords rank,
“Google's rolling out a new system where ad landing pages will be automatically spidered by a new AdsBot. The content of landing pages will help determine the quality of an ad campaign. That quality score, along with the amount you are willing to pay, is then used to determine an ad's AdRank, the position where an ad will appear in the results. A high quality score means you can rank higher even if you pay less than others. And not participating in the new spidering system can hurt your AdRank.”
This evolution for Google plays out on a number of different planes. On a tactical level, it raises all sorts of questions for search engine marketers on how this additional ranking component will affect their campaigns (“What about graphically rich landing pages? Or those with Flash or even AJAX?”). On a philosophical level, one has to question if modified landing pages which are friendly to Google’s AdsBot are truly best for end users/consumers. The increased opacity can’t be beneficial for advertisers, as it increases the barrier to understanding marketing campaigns for new search advertisers and creates disruption for current ones.
Along the strategic level, Google’s move is a clear demonstration of the power which it has in the marketplace, given the sheer volume of quality traffic which AdWords can provide. That situation is hardly news. Perhaps more subtly, however, is that this move could covertly raise prices (and thus revenue) for the search engine company. If existing advertisers see their traffic levels decline because the AdRank algorithm views their landing pages as sub-par, one of the only levers an advertiser has is to raise the per click price it is willing to pay.
Lastly, I see these two moves from Yahoo and Google as potential datapoints in a trend towards advertorial content, where the content is the advertising (see other posts on the topic). When the current paid search market emerged, there was a clear line of demarcation between it (advertising) and natural search (content). Since then, the line between these two has blurred (perhaps in part because most consumers don’t know the difference anyway), creating an advertorial search product which is sponsored by advertisers yet still includes some editorial control. And in some ways, this situation is a good thing – at the end of the day, all content and advertising (even links to other content) is most effective when delivered to the most appropriate person to consume it. The difficulty is to avoid alienating advertisers in that tightrope walk (as it is in any advertorial product).