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Going Tech Green: Google Files Patent for Floating Data Centers September 12, 2008

Posted by Bill in Ad Serving, Google, Green, Online Advertising, Technology.
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I have to admit, this is truly interesting. Thanks to Joe Tedd for sending to me…

Article from Red Herring

Search giant Google has filed a patent application for a “water-based data center” that would use seawater for cooling and rely on ocean tides, currents, and waves for power generation.

The application, filed last year with the U.S. Patent and Trademark Office, became public knowledge on August 28. Google envisions “floating platform-mounted” data centers 3 to 7 miles from shore, in 50 to 70 meters (164 to 230 feet) of water.

As the global use of the Internet grows, more large computing facilities, or data centers, are needed to support the demand. But these data centers, many as large as 100,000 square feet, require large amounts of costly real estate and electricity.

Google’s plan strikes at both expenses. Data centers would be housed offshore, presumably where land prices are cheaper, and would generate their own electricity, said Data Center Knowledge Editor Rich Miller.

Miller said annual operating costs for data centers in the U.S. can run as high as $28 million per year in regions with relatively expensive electricity.

Google has been searching for ways to use more renewable energy sources, investing in solar companies and other startups through its foundation.

But schemes for harvesting ocean power from the natural motion of the water are still largely untested in commercial applications. Numerous pilot plants are under development around the world.

Google doesn’t intend to build its own wave energy machines, however. The patent application mentions the use of Pelamis P-750 Wave Energy Converter systems for generating electricity from waves.

The P-750 systems are made by the Scottish company Pelamis Wave Power. The company has built what it claims is the first commercial wave farm off the coast of Portugal. It has a 2.25 megawatt capacity, but the machines are still in commissioning phase.

Google isn’t the only company looking at placing data centers offshore. San Francisco Bay Area startup IDS would like to place them on decommissioned cargo ships, according to some reports. And Google might encounter resistance to its idea from businesses that don’t want important information residing on data centers that are less resistant to man-made or natural hazards, such as hurricanes.

Patent filings typically take 32 months for approval, according to the U.S. patent office. That means Google might not receive its patent on the floating data centers until October 2009.

The system envisioned by Google would be modular, meaning it could easily be scaled up or down depending on the need.

In one example, the patent application describes 40 Pelamis systems spread over a square kilometer to produce 30 megawatts of electricity.

The platform system would also use wind turbines to provide pumping power for the seawater cooling units.


Yahoo Acquires Right Media April 30, 2007

Posted by Bill in Auction-based media, exchanges, Google, Online Advertising, online marketing, Right Media, Yahoo Search Marketing.

Fun days here at Right Media… I have been incredibly impressed with Yahoo!s strategic vision and commitment to the exchange model through the process. I think this will be a great marriage. More importantly, it makes the competition with GoogleClick that much more exciting!

Official Press Release: Yahoo! Announces Agreement to Acquire Right Media, Largest Emerging Online Advertising Exchange

New York Times: Yahoo to Buy Ad Company in Bid to Compete With Google

Some excerpts from the above New York Times article, by MIGUEL HELFT:

– “The acquisition, to us, is a key step toward executing our long-term vision to build the leading advertising and publisher ecosystem both on and off the Yahoo network,” Terry S. Semel, Yahoo’s chief executive, said in an interview. The deal is to be announced today and is expected to close in three months.

– Right Media, a four-year-old company, runs an exchange in which advertisers and publishers buy and sell online ad placements in real time through an auction system. DoubleClick, which specializes in serving ads on Web sites, announced recently that it would develop a similar type of exchange. Online publishers are increasingly turning to exchanges like these to sell ad space on their sites.

– “What we look forward to do as an owner is put more inventory into that pot to help create a more vibrant exchange and create better pricing for everyone,” Mr. Semel said.

– Yahoo said that after the acquisition it would increase its participation in the exchange as both a buyer and seller of ads. The company said it planned eventually to sell all the nonpremium ad space on Yahoo through the exchange, a move executives said would enhance revenue.

– Google and Yahoo each dominate one segment of the online advertising market. Google is best at selling text ads that appear alongside search results and on other Web sites. Yahoo, which has lagged Google in search, is a leader in selling graphical ads, mostly on its own sites.

– By buying Right Media, analysts have said, Yahoo would accelerate its own efforts to sell and broker ads on other sites. Those efforts began taking shape recently, after Yahoo reached agreements to sell ads on eBay and on some 264 newspaper Web sites.

(Note: For the math impaired, $680 million for the remaining 80% that Yahoo! didn’t yet own is equal to an $850 million in total valuation…)

Google Max Bid For DoubleClick… or Insurance Policy? April 28, 2007

Posted by Bill in Ad Serving, Auction-based media, Google, Microsoft, MSN Search, Online Advertising, online marketing.

It has been rumored that Microsoft bid right around the rumored $2 billion for DoubleClick. So the question remains, “Why did Google pay $3.1 billion?”. I have some thoughts; some serious, some just for giggles:

1. With AdWords, “max bid” represents the most an advertiser is willing to pay for a click for a particular keyword or group of keywords. The ACTUAL price the marketer pays is one penny more than the next highest bidder (on an effective CPM basis, which takes into account CTR/ quality score). Meaning, a marketer can bid $50 a click, but may only end up paying $0.50 for the click if that’s what it takes to win the auction. My theory is that Google thought the $3.1 billion was its MAX BID, and insiders say the Google executives were astonished when they didn’t win the auction for $2,000,000.01!!!!!!!!!!!!!!!!

2. This one is serious… PATENTS! While DoubleClick may claim to be the “central nervous system” to online advertising in their new marketing campaign, they really were the pioneers of online advertising the 90’s, and have really, really, really valuable patents that Google just couldn’t afford Microsoft to get their hands on. After all, they need to protect their 149 BILLION MARKET CAP… an extra billion to ensure it is seemingly a decent insurance policy. Thanks to an awesome write-up at SEO by the Sea below are a list of the patents DoubleClick has.

3. Last, the ability for Google to publicly beat Microsoft yet again was worth a little premium. Dr. Eric Schmidt spent decades at Novell and Sun getting beat up by Microsoft… Time for some pay-back from the Google CEO, who now also sits on the Apple board of directors.

WIPO Patents Assigned to Doubleclick

1. Method and System for Sharing Anonymous User Information
(WO 2002/035314)

Published May 2, 2002
Doubleclick, Inc.

A method and system for sharing online user information in an anonymous manner. The system associates an identifier (100) with anonymized information of the user, and sends the anonymized user information to a receiving party (130). In one embodiment, the system receives a temporary id with personally identifiable information from a Web site, uses the personally identifiable information as a key to obtain the anonymized information from a data source, and sends the temporary id with the anonymized information to the receiving party. the receiving party uses the temporary id, previously received by the Web site, as a key to obtain the anonymized information of the user. In another embodiment, the system receives a temporary id from a Web sit…

2. Automated Online Sweepstakes System and Method
(WO 2001/059656)

Published August 16, 2001
Doubleclick, Inc.

An automated process of conducting an online sweepstakes and marketing to sweepstakes entrants. The software system enables a non-technical individual (e.g., sweepstakes manager, marketer, etc.) to create a sweepstakes entry form that is integrated with back-end data processing systems (figure 2, item 210). The entry form and entry form processing system are kept consistent with sweepstakes rules chosen by the non-technical individual and automatically generated by the system. The system enforces compliance with applicable laws with integrated tools to pick winners, to determine eligibility and to collect winner affidavits. A back-end database is integrated directly with a sweepstakes entry form. Online tools permit a marketer to view entra…

3. Network for Distribution of Re-targeted Advertising
(WO 2000/008802)

Published February 17, 2000
Doubleclick, Inc.

A computer system for automatic replacement of advertisements includes an advertising server for selecting an advertisement based on criteria related to the individual viewer. In particular, advertisements are selected for a given user, based on the past behavior of that specific given user. Advertiser web sites on the network are configured to anonymously report back user activity such as visit dates, purchases, specific product pages visited and the like. Alternative reporting embodiments include email, file transfer protocol and spotlight tags. User activity lists are processed to select candidates for re-targeting. Candidates for re-targeted advertisements are identified based on their own individual past activity, and stored in a list …

4. Method and Apparatus for Automatic Placement of Advertising
(WO 1998/058334)

Published December 23, 1998
Doubleclick, Inc.

A computer system for automatic replacement of direct advertisements in scarce media includes an advertising server for selecting a direct advertisement based on certain criteria. Transaction results of the direct advertisement placement are reported back to the advertising server, and an associated accounting system. In one embodiment, the direct advertiser’s server reports transactions back to the advertising server by email. In a second embodiment, a direct proxy server brokers the user’s session (or interaction) with the direct advertiser’s server, including transaction processing and the direct proxy server reports the results of transactions back to the advertising server and its associated accounting system. A direct proxy provides a…

5. System and method for analyzing website activity
Invented by Jonathan Marc Heller, James Christopher Kim, Dwight Allen Merriman, Andrew Joel Erlichson, Benjamin Chien-wen Lee
Assigned to Doubleclick, Inc.
United States Patent 7,085,682
Granted August 1, 2006
Filed: September 18, 2002


A method and system for analyzing website activity. According to an example embodiment, the system receives event-level data representing visitor session activity on a client website; attributes characteristic information of the event-level data associated with each visitor’s session to at least one of a plurality of visitor segments, stores results of the attributed information aggregated according to visitor segment prior to a client-requested analysis of the event-level data, and provides online reports based on the resultant data in response to a client-requested analysis of the event-level data.

6. Method and apparatus for automatic placement of advertising
Invented by Dwight A. Merriman and Kevin O’Connor
Assigned to Doubleclick, Inc.
United States Patent 7,039,599
Granted May 2, 2006
Filed: June 15, 1998


A computer system for automatic replacement of direct advertisements in scarce media includes an advertising server for selecting a direct advertisement based on certain criteria. Transaction results of the direct advertisement placement are reported back to the advertising server, and an associated accounting system. In one embodiment, the direct advertiser’s server reports transactions back to the advertising server by email. In a second embodiment, a direct proxy server brokers the user’s session (or interaction) with the direct advertiser’s server, including transaction processing and the direct proxy server reports the results of transactions back to the advertising server and its associated accounting system. A direct proxy provides an independent audit of transactions at a remote direct advertiser’s web site. The feedback of the results of direct advertisement transactions provides an efficient utilization of direct advertising space by way of an automated computer system with a predictive model for selection and distribution of direct advertising.

7. Method of delivery, targeting, and measuring advertising over networks
Invented by Dwight Allen Merriman and Kevin Joseph O’Connor
US Patent Application 20050038702
Published February 17, 2005
Filed: September 10, 2004

(There are 5 versions of this patent application on file at the USPTO)


Methods and apparatuses for targeting the delivery of advertisements over a network such as the Internet are disclosed. Statistics are compiled on individual users and networks and the use of the advertisements is tracked to permit targeting of the advertisements of individual users. In response to requests from affiliated sites, an advertising server transmits to people accessing the page of a site an appropriate one of the advertisement based upon profiling of users and networks.

8. Network for distribution of re-targeted advertising
Invented by Dwight A. Merriman and Kevin J. O’Connor
US Patent Application 20020082923
Published June 27, 2002
Filed: February 26, 2002


A computer system for automatic replacement of advertisements includes an advertising server for selecting an advertisement based on criteria related to the individual viewer. In particular, advertisements are selected for a given user, based on the past behavior of that specific given user. Advertiser web sites on the network are configured to anonymously report back user activity such as visit dates, purchases, specific product pages visited and the like. Alternative reporting embodiments include email, file transfer protocol and spotlight tags. User activity lists are processed to select candidates for re-targeting. Candidates for re-targeted advertisements are identified based on their own individual past activity, and stored in a list of candidate user ID’s. When a candidate on the re-targeted list is identified at any network affiliate web site, a re-targeted advertisement is delivered to the candidate user.

Are Ad Exchanges Solely for Spot-Market/ Remnant Inventory? April 6, 2007

Posted by Bill in Auction-based media, exchanges, Google, Microsoft, Online Advertising, Online Auction Tips, traditional advertising.
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The eBay Media Marketplace (“EMM”) has received much hype the past bunch of months. According to a MediaPost article, this past Thursday that hype came to a screeching halt when the Cable television Advertising Bureau–which holds the keys to launching the broadcast auction system–said the EMM was a permanent no-go. The trade group’s opposition was based on two points:
1. The eBay functionality was flawed, and
2. The system wasn’t in step with the new age of media buying, where the focus is on complex multi-touch point deals, not peddling and purchasing spots.

CAB head Sean Cunningham said his members reviewed a pilot of the system for some weeks. They found that its infrastructure fell short in making the intricacies of end-to-end buying and selling better. Cunningham said it was “evidence of someone developing a system in eBay that, despite the best counsel of top buyers in the business, was just not getting the scope of this business in terms of both current and future practice.”

So this raises a few questions…
1. With all the hype over DoubleClick’s entry into the “Ad Nasdaq” world, will anybody be able to move this marketplace concept up market?
2. Was broadcast simply not ready for their ecosystem to be turned upside down and embrace auction-based media?
3. Is premium inventory, regardless of channel, simply too personal and relationships and media buying too complex to make the evolutionary switch away from upfronts and personal negotiations?
4. Is an auction platform built simply for spot-market, remnant, or turn-key/ non-creative ad inventory?

For the eBay Media Marketplace to make it, I believe the market first needs to figure out a solution for a Premium Online Ad Exchange. For that to happen, it has to be driven by a Media company with a huge online presence, powered by a technology which embraces auctions but respects the old-school inventory forecasting and expectations on campaign delivery. All eyes have to be on Microsoft, Google, and Yahoo! before they go onto eBay…

How Search Turned MTV Into MySpace January 21, 2007

Posted by Bill in Google, Search Marketing, traditional advertising.
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For last week’s pronouncement that shook the new media world — but didn’t particularly surprise it — look to MySpace co-founder Tom Anderson. MySpace, Anderson informed German mag Der Spiegel, has “replaced MTV.”

The point is debatable. Between its acquisition of 10-million visitor RateMyProfessors.com and a rumored investment in social networking site TagWorld, MTV is clearly gunning for a return to empire. But at least for now, it does look as if the world’s sixth most popular site has stolen the lead from the suddenly presidentless MTV.

But the MTV versus MySpace competition is a bit more complex than just the old replaced by the new. That’s because MySpace isn’t as much the usurper of MTV, as it’s an evolution of MTV’s basic concept: a horizontal channel in which glamorous stars, the common folk, and the channel itself are all on surprisingly equal footing. And, like MTV, MySpace is a channel that’s built on reaching out to a youth generation who’s the first to have really grown up with a new medium. So MySpace hasn’t replaced MTV, as much as MTV has evolved into MySpace. And none of this evolution would have been possible without search.

Let’s start with MTV. MTV was first built around the ’80s generation, the first generation to really grow up with television — and even color television — as a given in the home. Their baby- boomer parents also grew up with TV, but the boomers often weren’t born into a TV household.

MTV also introduced horizontal media in 1992, when “The Real World” spawned reality TV a full 8 years before “Survivor.” And “The Real World” entirely changed the rules of how television works. Now, instead of a medium in which lofty stars appear on the screen while couch potatoes watch them, MTV’s invention of reality creates a model in which the stars and the mere mortals occupy the same space. MTV showed us how media can become horizontal. MySpace isn’t so different. MySpace is also built on capturing, and capitalizing on, the first generation of youth who’s grown up with new media — in this case, the Internet and mobile. In Anderson’s own words to Der Spiegel: “If you are 23 now, you probably started using the AOL Instant Messenger ten years ago. It’s totally natural for you to talk to your friends that way. A few years after that you started text messaging. I think the MySpace generation is these people who just have this experience. It’s perfectly natural.”

MySpace is also a truly horizontal medium, with everybody vying for the same attention: Madonna, Jamie Foxx, and the Honda Element all have to go head to head with your 12-year-old cousin to get noticed.

And so, again, while MySpace may have replaced MTV, it’s also just an evolution of the MTV model, brought online. Both MTV and MySpace gained success by providing young people with the opportunity to just be themselves, while understanding that technology had made young people “just being themselves” into something fundamentally different than it had ever been before. And they both did that while creating a new kind of horizontal channel.

It was search that allowed the MTV-MySpace evolution to happen. As New York Times columnist Thomas Friedman points out, search is the Web’s great flattening force: by offering a single window through which to jump to the Web’s billions of disconnected pages, search pulls the entire Internet together.

Instead of developing a relationship with just one site at a time — in the way that viewers watch one TV channel at a time — search turns the Internet into a single, unified Web. That puts all Web pages on equal footing, all Web pages at the mercy of the user, and all Web pages in direct competition with one another. (A similar point could be made about the effect of remote controls on TV, but search gives way more user control than remotes do, across billions of pages rather than just dozens of channels.) Search made the Web horizontal, and that horizontality enabled MySpace to use the Web to take MTV’s horizontality to a whole new plane.

This means a tremendous amount for those of us in search. If search is a driving force behind the new horizontality, then those of us in SEM — the first industry to make business sense of a horizontal universe — can drive unique value in the new horizontal world.

That’s also a challenge. As communications evolve — and search, and elements of search, become just one piece of a much larger media picture — SEM needs to turn its insights into ideas that can provide value, regardless of the directions that media take. And if we can’t make that happen, it won’t just be MTV that’s facing replacement.
* * *

(For a bit more on the future of search and social media, have a look at my recent interview with MarketWatch.

What Wikiasari Can Teach AT&T About Mobile Ads January 9, 2007

Posted by Bill in Google, mobile marketing, online marketing, Search Marketing, traditional advertising.
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On the heels of AT&T’s acquisition of BellSouth, the newly-ginormous AT&T announced last week that it would enter into mobile advertising. If all goes well, advertisers will purchase their first mobile ads through AT&T later this year; AT&T hopes to make several billion dollars in ad revenue (through sales of mobile, online, and TV spots) annually through 2012.

I, for one, think it could be a great idea for AT&T to serve as a mobile ad network. But if it wants to succeed, AT&T should start thinking about Wikiasari.

Wikiasari is an upstart search engine (still in development) from the people who brought you Wikipedia, the wildly-popular user-generated encyclopedia. Like Wikipedia, Wikiasari will rely almost entirely on its community–this time, to determine search results. (The initial sorting and ranking will be done by technology, but humans will determine the end product). Wikiasari, a culmination of sorts in user-generated content, is a real watershed in the history of media.

There are two ways that user-generated content has changed everything. First, it’s flipped the traditional platform/content dynamic on its head: in traditional media, content is king and platforms play a supporting role; in user-generated content, it’s not always clear which one is the star. Newspaper readers focus a lot more on the news than on the paper; moviegoers pay more attention to the movie than to the screen; but it’s the YouTube and MySpace interface–and not the bevy of amateur-produced clips of dancing beavers and shoddy personal pages–that really shine in the user-generated media.
A second change user-generated media has brought is a shift in the nature of the communications conversation. In the traditional world, mass-communication high priests (Hollywood, the press, Martha Stewart) talk to (or at) the media consumer. In consumer-generated media, users engage in a community-wide conversation, and the high priests are largely left out. “The one thing that I feel like I know how to do is build communities,” Jimmy Wales, co-founder of Wikia (Wikipedia and Wikiasari’s parent company), told Noam Cohen of The New York Times. “I mean people who know each other, who have discussions.”

User-generated content, in other words, is making the media world a lot less like the traditional mass media, and a lot more like the telephone–a medium for enabling consumer-generated conversation, in which the business ignores content entirely and instead focuses on building platforms that make peer content-sharing (i.e., phone calls) function a lot better.

Wikiasari is a major moment in this consumer-generated evolution. Consumer-generated search, even more than a consumer-generated encyclopedia, marks a shift towards consumers’ looking to a community for answers about their questions and needs, rather than looking to an all-knowing, ready-made information source. If Wikiasari takes off (and if it doesn’t, another wiki-based search engine surely will), it will mark a point at which the bulk of shared ideas comes from information-seekers turning towards their colleagues, rather than information being decreed from on high.

It would be well for AT&T to consider all this as it jumps into mobile advertising–at a time when mobile advertising is clearly failing to live up to its hype, and search is about to catapult consumer-generated media light years ahead. The two developments, after all, aren’t entirely disconnected. Users want their media to act like telephones; it’s clearly bothering them that mobile advertisers–who introduce unrequested, industry-produced content onto mobile screens–are trying to make telephones into the old media that everybody’s ditching. No wonder there’s a backlash, with 79% of online consumers bothered by the concept of mobile ads.

That’s not to say that mobile advertising has no future. For one thing, mobile ads can leverage the phone as a communication device, rather than trying to subvert it. That was the secret behind last summer’s “Snakes on a Plane” mobile campaign, in which mobile users sent friends a personalized message from an automated Samuel L. Jackson, demanding that the recipient see the action flick ASAP. The campaign clearly got the point that mobile is about peer communication–and 1.5 million “Snakes” calls were forwarded in the campaign’s first week.

A second way for AT&T to leverage mobile media is to provide phones that better enable the communication that the user-generated world craves. This could be as basic as improving mobile filesharing capabilities, or as sophisticated as helping two drivers in two different vehicles find one another via GPS. The bottom line is that the new-information consumers don’t just want to receive information; they want to communicate. And AT&T, which now owns Cingular and stands above a vastly huge telecom empire, is in a perfect position to offer that kind of capability.

If it’s thinking of going further into mobile content before the end of this year, AT&T should think seriously about the meaning of user-generated content now. And if it’s stuck for answers? I’d suggest it start its search at Wikiasari.

The Bubble Bath December 28, 2006

Posted by Bill in Google, MSN Search, online marketing, Search Marketing, traditional advertising, Yahoo Search Marketing.
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For SEMs and online advertisers, 2006 was a bubble bath. The tone was set at the end of 2005, when Google paid $1 billion for a 5% stake in AOL. That put AOL’s total value at $20 billion, or $1,000 per subscriber. Later this year, Google paid $1.65 billion in its well-publicized acquisition of YouTube, a company with sixty-five employees, no profit model, and a bevy of illegally copied material (complete with litigious owners waiting in the wings). But perhaps the biggest of them all, the granddaddy of all bubbles, is Google’s stock price itself, which at press time was hovering at a 57.85 P/E ratio. Indeed, analysts are also finally starting to catch on to Google’s hugely overvalued stock. Into this mess splashed an acquisition that finally made business sense: the Publicis Groupe’s plan to buy Digitas.

True, Publicis did offer Digitas shareholders a 25% premium over the closing price when the deal was announced, but this reflects actual upside, rather than perceived upside. As search marketers we’ve seen firsthand for years how advertisers have shifted their spend from offline into search and other online media. As the general public has spent more time consuming media online, advertisers have realized that the accountability of an online campaign greatly surpasses that of a traditional campaign. Overall advertising is growing at 4-5% per year, while digital advertising is growing at 30%. That statistic alone justifies the 25% premium that Publicis paid for Digitas.

The next step for advertisers is applying the highly touted accountability of online media to their offline campaigns. This requires the keen analytics and robust technology typically found in digital agencies, and notably absent from traditional agencies. These capabilities include measuring spikes in search behavior and traffic in response to TV, print, and outdoor ads. An agency that specializes in all media, both online and off, will be able to execute on initiatives like boosting bids on keywords mentioned in TV commercials, and building microsites as landing pages where consumers can easily read more info and purchase the product they saw on TV. This integration poses another huge advantage for Publicis’ clients, as they will not have to coordinate between two separate agencies. These factors further justify the 25% premium.

It’s always risky to speculate on the future, but there are certain outcomes that almost certainly will occur in some form or other. “Convergence” has been a hot buzzword in the industry, the idea being that users will take control of their TVs in the same way that they’ve taken control of online content. This, in theory will enable advertisers to target video ads behaviorally, demographically, and by keyword. But this theory presumes that TV will still be the only device used to consume video. In reality, perhaps “divergence” is a better word, because media will be consumed not just on TV, but on computers, mobile phones, mobile e-mail devices, MP3 players, and in cars.

Keeping track of and optimizing each ad’s performance, across a diverse user base with a diverse media-consumption device base, all while deploying targeting options and other optimization techniques, will require an even more advanced technology and even sharper analytics. A digital advertising firm is far better positioned to deliver these assets to clients than an offline media firm. This is perhaps the most insightful element of Publicis’s move, and even further justifies that extra 25%.

Much has been made of Digitas’ client relationships having real value, but in reality, the Publicis Groupe and the other offline advertising giants don’t need to buy client relationships. They’ve had clients’ trust for years. What they need are the technology and analytics to deliver a full suite of advertising options to all of their clients, with greater accountability and the ability to scale as technology advances. That’s the real value that Digitas brings to the table.

Holding companies should not be focused on buying aQuantive or paying a premium for client relationships. Rather, they need to focus on acquiring smaller, privately held companies that have built leading-edge technology platforms, embraced a culture where the statistician is just as important as the creative director, and with whom they can bring their pre-existing customers to the digital upsell.

What a refreshing note to the end of 2006. Just when we all thought the bubbles were rising over the rim of the tub, here’s a move that will allow all parties to soak in real, not imagined, value.

We’re Not a Technology Company Anymore, Toto December 14, 2006

Posted by Bill in Google, Search Marketing.
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            This morning’s Wall Street Journal had an article called “Google Tests New Ad Offerings–But Will Advertisers Follow?” by Kevin Delaney.  It serves as a chronicle of Google’s past, present, and planned future forays into offline, traditional media.  Will they work?  And will advertisers go along with them?  Not unless Google becomes a totally different company…

            What Google does well, better than anyone in fact, is PPC search advertising.  It is possible for a technology company to excel in PPC.  In fact, that may be the only way to do it.  PPC advertising is a numbers game; it’s more science than art.  It’s possible for advertisers to use an automated API to buy their keywords, write their simple ad copy, and track their results on a more granular level than any advertising media in history.  Granted, the tracking is not one hundred percent accurate, as searchers may click on ads multiple times from different computers before converting, or they may convert at a bricks and mortar store, but the tracking is accurate enough to allow advertisers to optimize their campaigns with minimal help from Google.  When it comes to PPC, Google is therefore able to focus almost entirely on their technology, while the keywords more or less sell themselves.  Google’s got the eyeballs, and it can guarantee advertisers that, if they’re smart, they will make money by buying keywords.


            In contrast, offline media does not sell itself.  It is sold via a personal relationship, with a big smile and lots of martinis, and often comes complete with plans that include useless remnant inventory.  If advertisers want a spot on American Idol, they often have to buy a billboard in the middle of nowhere that will get them a poor ROI.  Traditional ad networks can’t guarantee results the same way Google can in PPC, they can only offer rough estimates of reach, threaten demurrers with loss of market share to their competition, and, again, smile real big.  Unlike PPC advertising, it is not possible for a technology company to do well in this space.  You need to be a media company with a great sales team and lots of killer content.  It’s far more art than science; an automated API simply won’t be able to cut the mustard.

One thing Google mentions in Delaney’s article is that they can “track” response to traditional ads simply by examining the resulting search traffic.  That can theoretically enable advertisers to gauge the effectiveness of their ads, and thus optimize accordingly.  However, although it is a well known fact that traditional ads drive search behavior, there are far too many gaps between a traditional ad and search traffic for this measurement to be sufficiently accurate to sell itself.  Consumers may see the ad and go search on another search engine, or they may see another ad that the advertiser didn’t buy through Google and that ad may drive their search behavior.  Or perhaps they saw the ad and forgot about it for months until the advertisers’ products or services could benefit them, and only then do they turn to a search engine.  All the problems that exist in PPC but are too insignificant to tip the scales in the art/science balance are magnified in traditional media—magnified to the point where, even with tracking search behavior, art still trumps science.

So can Google become a media company?  Certain signs indicate that they are moving in that direction.  They now have a
New York office, a lot of lawyers, and are bulking up their sales team.  They certainly have killer content, and, especially with the purchase of YouTube, a burdensome load of remnant inventory.  Of course, right now, Google is so profitable that they don’t have to force advertisers to buy space on un-monetizable user-generated videos.  However, when PPC advertising’s growth slows (as it inevitably will) and Google’s revenue starts to fluctuate along with the rest of the economy, they may be forced to sell some of their junk in order to stay afloat and meet Wall Street’s demanding expectations.  So yes, Google can become a media company, but don’t expect it to revolutionize traditional media in the same way that it revolutionized online media.  If Google is successful, it won’t be the Google we know and love.  The new media baron will be the same as the old media baron.

Will E-Media Make It? November 20, 2006

Posted by Bill in Broadcast, Google, MSN Search, Online Auction Tips, online marketing, Search Marketing, traditional advertising, Yahoo Search Marketing.
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Last week, advertisers got their first glimpse of the e-Media Exchange, the auction-based TV (and other traditional media) ad-buying exchange initiated by blue-chip advertisers like Wal-Mart, and powered by e-Bay. The Exchange is said to be ready to roll in Q2 ‘07; the advertisers involved got their first sneak preview last week. And as I’ve said many times before, the Exchange is a revolution whose time has clearly come.

But at the same time, it still isn’t clear whether the e-Media Exchange will actually thrive. That’a an open question; there are forces acting both against and in favor of the Exchange’s long-term survival.

Let’s start with the forces against. To begin with, the networks don’t like the Exchange very much; and if the networks themselves don’t go along, the Exchange won’t work (it’s the networks’ inventory that the Exchange is selling). The networks’ reaction isn’t surprising, as the Exchange was created out of advertiser suspicion of network double-dealing when it comes to ad pricing: auctions, the Exchange members feel, are a more accountable and transparent way to buy media. Meanwhile, something else the networks have a strong reason to dislike is the fact that an auction would wrest pricing controls out of the hands of the networks, placing it in the hands of advertisers.

Then there’s institutional culture. The Exchange is an attempt to replace the traditional networks’ culture of lavish upfronts and martini lunches during ad buys. But while martini lunches might not foster transparent pricing, they’re an important aspect of networks’ tradition and corporate culture–and old traditions die hard. That’s especially true amongst large corporations, and the traditional networks happen to be large corporations (or pieces of large corporations).

Of course, martini lunches really do serve a valuable purpose. Television advertisers are spending enormous sums of money; and there’s a strong argument that large purchases are best done face-to-face. Even in the search world, the engines have reps who handle ad spend for larger clients, despite the fact that the actual ad purchases are made via online auction. And if there’s a need for a human interaction in the online auction of search, there’s no reason the same wouldn’t be true of online TV ad buys.

Finally, those behind the Exchange may have made a tactical mistake in declaring that they’ll start the Exchange as a place to buy remnant inventory. That makes sense politically, as the networks would never have agreed to let the Exchange start out by managing anything bigger that remnant. But the move also ignores a basic principle of how auctions work, and that’s a problem. To paraphrase what I’ve said many times, auctions are competitions over specific items–and to create a viable arena for those competitions, you have to offer something that people are interested in fighting over. But remnant inventory is definitionally the inventory that nobody wants; that’s not the kind of stuff that creates bidding wars, and so it’s not the stuff that makes for viable auction marketplaces.

OK, now why should the e-Media Exchange work? Because the auction networks have a record of creating clear and fair pricing. That kind of environment for buying TV spots would be an attractive change for advertisers who crave greater transparency in their ad buys. And if the advertisers are willing to fight hard enough for it, there’s definitely a chance that the networks will go along with the advertisers’ wish.

Meanwhile, the Exchange has made a smart move in deciding to start the program on cable TV. Cable TV is subscriber-based, which means that cable networks have demographic, geographic, and/or psychographic information that the standard networks don’t. That kind of data creates opportunities for the networks to slice and dice ad inventory in ways that clearly showcase each slot’s value. That, in turn, allows networks to charge more for the given slot, which is good for them; and it will also be able to drive more bidding wars over any given slot, which is good for the longevity of the Exchange, which is good for the advertisers. And initial success in a cable TV run will make the Exchange an easier sell to the larger networks, too.

One final note here: There’s no reason to assume that the Exchange is a guaranteed home run, just because it provides auctioned ad buys. Google and Yahoo have clearly shown that auction-based advertising can be a highly viable ad model; but there are plenty of auction media outlets that you haven’t heard of, simply because they died along the way. And whether the Exchange will become TV’s Google, or the next cutting-edge idea that lost because it was too ahead of its time, remains to be seen.

Why Yahoo Won’t Face Google In Traditional Media November 13, 2006

Posted by Bill in Google, Search Marketing, traditional advertising, Yahoo Search Marketing.
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With Google announcing that it’s launching both a newspaper advertising program and contextual radio ads, I’m left wondering if Yahoo will ever follow suit, rolling out a traditional media arm of its own.
For now, obviously, Yahoo in traditional media is out of the question. Yahoo’s facing tough times after poor Q3 performance, and it’s not in a position to extend its reach as dramatically as Google has. But that doesn’t mean traditional will be out of the question forever, and it’s a worthwhile question to ask.
I’ll save you the anticipation and get to the answer right away: the answer is no, absolutely not, Yahoo will never enter the traditional advertising space. I’ll explain why that’s so, but I’ll need to take a detour through the very non-traditional channel of the mobile Internet.
Along with Google’s new traditional ventures, recently both Google and Yahoo made advancements in mobile. Through Gmail Mobile, Google launched its e-mail service into the mobilesphere. Google also joined forces with Samsung and wireless provider Helio; together, the three now provide a satellite-powered Google Maps that helps you locate people. Meanwhile, Yahoo was pushing mobile ahead in a different direction: you can now deliver display advertisements via Yahoo Mobile.
These are very different paths to making mobile better. Yahoo’s mobile display ads will help mobile directly, immediately making it more valuable for advertisers and for Yahoo itself. Google’s mobile advancements, on the other hand, are more indirect; they’re focused on using mobile to get more value out of other channels-specifically, e-mail and social networking technology.
That distinction is consistent with the overall Google and Yahoo mobile strategies. A visit to google.mobile.com shows that Google Mobile services are essentially Google’s core online offerings (Google Search, Gmail, Google SMS, Google News and Google Maps) served up to your mobile device. That’s very different from mobile.yahoo.com, through which Yahoo Mobile provides online standards like e-mail and search, but also offers very mobile-specific items like mobile screensavers and ringtones. Again, Google’s using the mobile medium to get more use out of preexisting non-mobile channels; Yahoo, meanwhile, is embracing the mobile channel directly.
That’s a difference that reaches far beyond mobile. Actually, it’s a difference that runs as deep as each company’s mission statements. Google says it exists to “organize the world’s information and make it universally accessible and useful.” What that means in practice becomes clear when you look to Google’s oldest and most popular product: Google Search. Search organizes information and makes it accessible; more important, though, it creates that accessibility and organization by using a new channel (search) to improve the accessibility of an older one (the Internet). Which is the same strategy that we see Google using in Google Mobile.
Yahoo’s stated goal is different from Google’s. Yahoo aims “to be the most essential global Internet service for consumers and businesses”; it’s looking to be the world’s most powerful new-media empire. That goal makes each new media channel valuable in its own right, as it’s one more potential piece of the empire that Yahoo is trying to build. That emphasis on the channel itself is why Yahoo’s mobile strategy focuses directly on the mobile sphere by offering ringtones, and why Yahoo has built its own enormous publisher network–while Google’s publisher-related activities are limited to searching publisher sites and advertising on them.
And it’s this difference in goals that explains why Google’s a natural fit for the newspaper business, and why Yahoo isn’t. Running newspaper ads might be a divergence from Google’s stated goals of organizing information, but Google-managed print media is very much in keeping with using newer media models to enhance older ones. There’s really not much of a leap from using search engines to make the Internet work better, to using search thinking to make traditional advertising work better. Both tactics are about using one channel to improve the next.
But Yahoo isn’t interested in improving older media. Yahoo is focused on dominating in newer media. Which is why Yahoo would really have no interest in traditional advertising, even if the option were open to it. And it’s why Yahoo won’t enter the traditional space, even after it gets its house back in order. And finally, it’s why the underlying differences between Yahoo and Google are starting to cause the old online rivals to drift further and further apart–and why Google and Yahoo might not be rivals anymore in Web 3.0.