John Akerson's Thoughts

Business, technology and life

Advertising Failure

Diana Adams has a great post on Bitrebels.com titled “16 ways to use your wrist now that watches are obsolete.” Her post includes some really funny suggestions, with comical illustrations from Lunchbreath.com … including “Backup urinal cake” and “Portable Pot Pie.” (do not confuse)

There is advertising on Bitrebels.com – and I’m sure somebody is paying fror those impressions and click-thrus.  Of course, some of the best advertising is content-specific. If you can put your product in front of a person who is already interested, you have a much higher probability of making a sale. Google makes Billions from this concept. Other companies, and many people also make big heaping piles of money from this simple concept.  But sometimes it fails. Sometimes the best content algorythms and the smartest advertisers promote their product in the wrong places.  And sometimes those failures are remarkable.

Here’s an example:  If you are reading an article discussing wrist-watches, how obsolete they are and suggesting a direct relationship to… say… buggy whips and egyptian pyramid blueprints… are you really looking to BUY a wrist-watch? Maybe not. The content is there, but the CONTEXT makes all the difference.  Here’s a screenshot of the advertisement, on the page focused on “Wristwatch Obsolescense.”

Although I have a great appreciation for why the watches are up to 80% off, seeing that advertisement on that page doesn’t leave me inspired to buy one.  (as an fyi – the link from the advertisement was this: http://googleads.g.doubleclick.net/pagead/imgad?id=CP6jxPL3spWLVBD6ARjvATII8BFY93VjUEI )  I suspect Google’s advertising bots, smart as they are, are still learning… but context is an enormously difficult thing to learn.

March 14, 2011 Posted by | Business, Competitive Advantage, Marketing, Search Engine Optimization, Social Media, Technology | 2 Comments

The Reputation Economy is Here.

Dan Schwabel has written two posts on his Forbes Blog in the last week. His message is that “the Reputation Economy is Coming.”  Alot of pieces of the Reputation Economy are coming together at warp-speed. Here are a few:

MANY anecdotal stories of people who have been fired, arrested, not-hired,(cisco-fatty, etc).

Millions of people who meet and begin relationships due to *something* online.

Businesses running into serious issues… (Kenneth Cole, etc)

Colleges considering online info during interviews

If Dan Schwabel’s cited research is even close to correct that “80% of HR professionals use online reputation information… and that 70% had rejected a job candidate due to what they found online.”

It seems there is enormous evidence that whether the subject is personal, professional, corporate, or really from ANY perspective: The Reputation Economy is not coming, it is *here.*

What do you think?

March 1, 2011 Posted by | Business, Competitive Advantage, Life, Marketing, People | 2 Comments

Audi, Lexus and Sponsored Tweets

Ive been watching Audi online more and more lately.  I went to a swanky VIP/RSVP thing at my local Audi dealership where they unveiled the fantastic new A8. It has a cockpit that is remarkable in every regard. My 2001 S4 seems as retro as a 57 Chevy by comparison.  I’m also kind of impressed by Audi’s push into the Superbowl.  The Kenny G doing Prison Riot Suppression video is the sort of quirky original thing that fascinates me. I have a search for @audi – on my Tweetdeck.

I was surprised this morning to see a Lexus advertisement on top of my @audi search in Tweetdeck.  There’s nothing new about advertising online using a your competition’s words, say as keywords and titles to SEO some people into your site instead of theirs.  Fans Flipping Out  on Bravo will remember Jeff Lewis getting VERY angry at a former business partner, Ryan Brown, for using some keywords a few years ago, and perhaps adwords to help his business. (season 3, of course) 

So – whats new here?   Lexus has sponsored @audi on Twitter. Anyone who has a stored search for @Audi in Tweetdeck and/or Hootsuite will see an advertisement for Lexus at the top of their stream.  Here’s what that looks like in Tweetdeck:

Certainly a delightfully creative way to advertise to your target audience.  Lexus – sombody there is Brilliant.

I think this interesting because LEXUS – sees Audi as serious competition for eyes, and buyers.  Lexus is so concerned about people following @Audi, they are paying Twitter for those responses.  Audi isn’t the only competition for Lexus. If I am in the market for a Lexus, I might look at other makes.  It occured to me that Lexus might be sponsoring other car brands as well.  Guess who else Lexus worries about… enough to pay for sponsored responses? BMW, Cadillac and Infiniti.  Lexus is NOT following Lincoln, Jaguar, Acura, Hyundai or Equus through.  (yet?) 

What do you think? Is this a new trend?

It is also interesting because other companies are sure to follow. Lexus is a leader here, and Twitter can surely use this for every other large company that wants to pro-actively protect their own brand, on Twitter, Tweetdeck, Hootsuite, etc…

February 3, 2011 Posted by | Competitive Advantage, Continuous Improvement, Marketing, Search Engine Optimization, Social Media | Leave a comment

Search Wars

Vivek Wadhwa sparked a bit of a firestorm on the first of January 2011 with his article “Why we Desperately need a (new and better) Google.”  Vivek’s first point was that Google’s search result-sets are overrun with content farms of junk data.”  “Google has become a jungle: a tropical paradise for spammers and marketers.” He also pointed out that alternative search engine Blekko does things differently. In reading Vivek’s blog, I realised that the Search Wars… may produce no victory – just casualties.

I blame Marcus Frind – founder of Plenty-of-Fish and I also blame INC Magazine.   The cover of Inc Magazine on January1, 2009 was about how Markus Frind keeps money rolling in.   Marcus keeps the money rolling in by producing content that his customers want. (He also blogs about it, and has since 2006 – with his wordpress theme essentially unchanged as far as I can tell.) Marcus Frind figured out what content the most people wanted, and monetized it, initially with Google’s Adwords/Adsense toolset.  Other people realized that if Marcus can make millions off of Sex, then other topics could be less lucrative, but still valuable. When people realized it, then companies realized it. http://www.associatedcontent.com/ is Yahoo’s “official library.”Yahoo, most famous lately for selling Yahoo HotJobs to Monster, and selling Yahoo Personals to Match.com – BOUGHT Associated Content in 2010 for $100 million dollars.    What does Associated do for Yahoo?   A quote from AdAge: “Associated manages a network of freelancers, but has also built underlying technology that predicts what kinds of content consumers want, as well as surfacing that content through natural search on engines such as Google, Yahoo and Microsoft’s Bing so the library makes money over time” 

Translation:  Associated makes money by building content that stuffs Google and other search engines.  They are only ONE company that does this.  Ok. I admit it. Marcus Friend and INC magazine aren’t really to blame. There is nobody to blame. People search. Searches produce data. Data is valuable and has a price. Search engine responses have a price. Building content to respond to those searches has value – whether it is for an SEO consultant, a “content farm” a media company, or any other company.

Having a price for the value of the response of Google searches, and a documented way, a well-understood way, a reproducable way to monitize the value of that response has become a problem for Google’s core business model; and it presents an Opportunity for Microsoft’s Bing.  

Wired – and everyone else online – noticed the escalations in the business-war between Google and Bing.  Wired’s article is titled:  Google Catches Bing Copying; Microsoft says ;So What?’  but they really missed the point. The point is not copying, or customer data, or even money. The point of this war is risk.  By fighting the war, both sides incur risk.

Farsight 2011: Beyond the search box.  “The future of Search” was recently held.

Just before it was held, Danny Sullivan broke some very interesting – somewhat inflamatory information.  Google trapped Microsoft/Bing copying Google Results.  Microsoft admitted to using opt-in data. Google obviously has been in the browser tool bar business for quite some time, and they also use opt-in data. Microsoft and Google both make billions from advertising, from operating systems, from browsers, from devices, and ultimately from advertisers, based on hexa-giga-peta-bytes of “opt-in” customer data.

There is endless value in the data that comes from browsers. Microsoft knows it. Google knows it. Everybody knows it. Microsoft is using the data to improve the tool that its customers are using. Google uses that value to sell AdWords. Everybody makes money counted in the Billions.

This argument between Google and Microsoft is Risky for either or both.

Here are two possible outcomes that would benefit Microsoft.
1) If people conclude from the resulting press that Google and Bing are not that different… 
and if businesses conclude that neither has a competitive advantage, that is a huge win for Microsoft’s Bing.

2)If people are interested in having tools that learn from their input and misspelllllings, they might use Bing more often.

Considering that Bing (as of 1/14/11) has 12% market share vs 66% for Google, any win for Microsoft’s Bing could be extremely significant.

HOWEVER, If people believe that Microsoft is stealing, that might benefit Google. If people believe that Google is emphasizing this issue to reduce the problem of junk-filled content farms which you address above as being able to differentiate “content produced by regular people and large-scale junk produced by the spammers” that is a problem for Google.

It is most risky, however, for both. I think this spat has the potential to further help people understand the value of the data they provide, the button-bars they install, the software, hardware and search engines they use, the sites they visit, the information that THEY willingly provide. 

That makes this war very risky to both Microsoft AND Google. 

Search Wars may not have a winner, only casualties.

What do you think?

February 2, 2011 Posted by | Business, Competitive Advantage, Search Engine Optimization | 2 Comments

The Cost to Convenience ratio

Bradford Cross wrote a great article on Measuring Measures “Why the iPad is Destroying the Future of Journalism.”

He was a bit off the mark in discussing Facebook, and could have provided more useful content by discussing Twitter because Twitter is a competitive microblogging platform that more directly delivers news-ish information.  His point was valuable because he focused on ways that media needs to address how it delivers unique content in a way that allows people to share.

Traditional media needs to ensure their cost to convenience ratio is favorable. 

What is that?  Here’s an example:  Your bank would love it if you, personally, used them for CD, Checking Account, Savings Account, Car loan, mortgage, IRA, online banking, online bill-pay, mobile banking and every other consumer service they offer. They want you to use their atm’s, their branches, and every location they offer.  They want the fees, of course, but they also want to make it more difficult for you to go to another bank and start up all those accounts, at that other bank. If your relationship with your bank is deeper, it is more difficult for you to switch. That convenience has a huge value because of the cost of changing, in terms of time and aggravation.

When your personal cost of switching (in time, and aggravation) exceeds the pain you feel from staying with a bank, they’re a winner.  This applies for ANY business.

If your convenience exceeds the cost you’re charged for that convenience, you, as a customer, might be content to be their loyal customer for EVER. You may slide from being a customer to being an evangelist.  This works for a local newspaper too, which may have a virtual monopoly on newspapers in a regional or local area. In many cases when a local newspaper is the only game in town, it can afford to be sloppy and cheap . The Winston Salem Journal, for instance, recently fired their entire copy desk. For their customers, the cost of finding an alternative far exceeds the cost of staying a customer. In some cases, there IS no alternative.

Look at Hyundai’s new Equus. Car and Driver’s comparison shows that it essentially clones the Lexus LS460L . “When Korean engineers set about copying the modern LS, they swallowed their inventiveness and simply deployed a really good Xerox machine.”  They did it extremely well, and “as-tested LS460L cost 50 percent more than the Equus.”  That is a steep cost for the convenience and pleasures of owning a car with the Lexus name.  Ironically, it is similar to what Toyota did.  “Note the way the Equus undercuts the six-figure Lexus. Just like Lexus undercut Mercedes 20 years ago.”  Hyundai “xeroxed” the LS460L, and it has also copied Toyota’s Lexus business model to a certain extent. (Using Toyota’s business model against Toyota.)

Every business needs to look at the cost/convenience ratio that they provide. It is a real key to deepening customer relationships. Deeper customer relationships increast the cost of changing to competitors.  Successful businesses (Zappos, Amazon, Lexus, Hyundai, etc) aspire to make their customers happy because happy customers are loyal customers. Those customers are loyal, in part, because of the cost to convenience ratio.

Every Lexus’ LS460L that is sold this year is an example that the value of that loyalty… Every person who buys a Lexus LS460L is a person who is willing to spend tens of thousands of dollars for a Lexus, when there is a much less expensive substitute available. Those purchases show loyalty for Lexus’ past performance.

January 10, 2011 Posted by | Business, Competitive Advantage, Life, Social Media | Leave a comment

Smart Advertising

NPR had a really wonderful Morning Edition about the value New York City’s Times Square billboard Space on December 30th of 2010. Their piece had the inaccurate (but executive pleasing) title:Billboard Advertising In Times Square Pays Off   I was listening while driving to NYC to see the ball drop.   Does that advertising really pay off? Not necessarily.  SMART advertising pays off but there were two pieces of advertising in Times Square that could have been vastly improved.  Looking at the TDK advertising, as I did for about 5 hours on New Years Eve, it was striking how counter-productive it was.  I went back to the podcast and transcript, and confirmed that in the radio piece, Lisa Chow of WNYC interviewed John Connolly, Chief Operating Officer of Duncan Donuts.

Lisa said “Let’s see who’s advertising here. We’ve got Toshiba, Budweiser, Dunkin’ Donuts.”

Lisa did not even mention TDK. Lost in the crowd of a million freezing new year’s eve rockers in Times Square, I saw the enormous TDK billboard too. I researched it, and found that  TDK upgraded their billboard in December of 2010.

Everyone noticed the TDK billboard. How could you NOT notice it? Lisa Chow may have noticed it, but didn’t say a word. The problem is that advertising isn’t always SMART advertising.  In the New Year’s Eve crowd, I heard several people ask aloud if Cassette Tapes were making a come-back.  

I suppose that just KNOWING what a cassette is qualifies me as an old person, but if the old people know what TDK is because of cassettes, and the younger people don’t know what TDK is, what value does TDK get from a multi-million dollar billboard in NYC’s Times Square?   I think their value is less than zero. the billboard does nothing to tell any of their possible customers what TDK does, and because there is no connection to current products, viewers are left with the “are cassettes making a comeback” thought – or for younger viewers, the billboard gives absolutely no idea what TDK is.

What is TDK today, beyond the cassette? It is a huge, successful company that reported during their 1H FY2011 period – coverinf April 1, 2010 to Sep 30, 2010 –  they had $5.2b in net sales and  >84,000 employees.   TDK makes billions by producing and selling huge quantities of unmentionable electronics bits: capacitors, displays, print heads, transformers, etc.  Impressing people in Times Square is likely one of the purposes of their advertising. That billboard isn’t very smart advertising because only an extraordinarily small percentage of people passing One Times Square will ever look at their website, products or financials. The billboard doesn’t mention their website, their products, their global scope If they are spending this much money on advertising, perhaps they should use the display space to let people know that TDK is more than cassettes.  Perhaps a newly inspired “TDK-Inside” logo for this century??

Perhaps smart advertising could tell people what TDK is, what it does, who benefits from its products and why there is some advantage in selecting or using products that have TDK inside… Smart advertising could illustrate features, benefits and competitive advantages for TDK. (just like it does for anyone)

*Thanks to TDK for all those SA-C 90’s, and thanks to Tapedeck.org.

January 4, 2011 Posted by | Competitive Advantage, Marketing | Leave a comment

Best Buy

Best Buy stock plummetted 15% yesterday.  The headlines were all about “Q3 Profit Misses, Outlook Slashed” but I think the real story goes way deeper. source: Yahoo Finance

If you look at the numbers – their Q3 net income was $217m (54c/share) compared to $227m (53c/share) in the same quarter during the previous year.  The previous year was one of the most difficult years in US business history. Their stock dropped like a rock, from about $41.70/share, to about $34.50/share.

Seeking Alpha thinks Best Buy is being “unduly punished by Short Term Factors” and they might be correct, but I think their stock price reflects risks.

If you just look at numbers and projections, the stock IS undervalued in the 9.5x P/E ratio/ $34-35 range where it is at.  

The stock is undervalued in the 9.5x P/E ratio/ $34-35 range where it is at – if one only considers the numbers. It is extremely significant that their net income dropped between these particular quarters in these particular years. The economic climate was so much worse last year. There should have been growth. Best Buy’s net income drop goes deeper than the appraisal of delivering products to/for customers that weren’t there. Best Buy’s customer service issues are significant and not necessarily related to how many people are on their floors.

Their marketing dept would probably pick a generic version of me as their perfect customer: An employed geek with a couple of thousand followers who knows the difference between 60hz and 240hz, the difference between i3 and i7, the difference between wireless g and n, and is extremely impressed by the performance gains delivered by SSD as compared to 7200 rpm.  

My very personal and admittedly anecdotal experience is that their service is so horrid – that their prices, selection and availability just don’t matter.  I should be their customer, but I am not. When a business loses its target-customer base, drops in net income are a predictable result.  Facebook shows such a negative reaction to Best Buy – and Victoria Barret pointed out on Forbes that YouTube and Netflix are competitive problems as well. She thought their competitive advantages were around viewing patterns.  Netflix and YouTube excel in customer service, and I think that it will be essential for Best Buy to master the customer service components.

Bernhard Warner (Social Media Influence) looks at Best Buy’s social media efforts and distills their issues: 

“we get news that Best Buy is finding it difficult to compete with the likes of Walmart and Amazon. com who seem to be doing a better job of discounting and delivering a more satisfying customer experience. In the retail business, mastering those two parts of the business and you usually finish with a strong quarter. Only after that should you focus on new apps.”

Best Buy’s stock might certainly be a bargain, but the current price figures in the risks of their complex competitive  landscape and whether Best Buy can recover, or if they are on the Circuit-City path.

December 16, 2010 Posted by | Business, Competitive Advantage | Leave a comment

300,000 Android Phones

Andy Rubin has only ever made 2 public tweets and only follows one person. His twitter page links to Spies.com – which was last alive as a website with a binary dog portrait in 2008 or so. This morning he tweeted: “There are over 300,000 Android phones activated each day.” (Andy Rubin is also VP of Engineering overseeing Android at Google, and he knows how to design products that customers LOVE.) @Engadget pointed out that 300k Android Phones Activated DAILY is an increase from August when only 200k were being activated daily.  A 50% increase in 3 months is an incredible business trend.

THIS seismic shift will bring a tsunami of opportunity for businesses that are creative enough to harness it. Tsunamis are destructive too, but thats another story.How significant is this? Two days ago, Penny Crosman in Bank Systems & Technology published “Who will be the Google of Mobile Payments” and discussed the tangled mess of providers, banks, systems and technology.

She didn’t make the case that the “Google” of mobile payments could be GOOGLE. Given 300,000 Android Phones activated *DAILY* that has to be worth consideration.

 

So – that is only mobile banking, and that is just a ripple. The tsunami has to be understood creatively, by the businesses who will use this explosion as competitive advantage. Want to sell a mobile app? Android has 300k new users each day.

Even considering Android as one of the big 3 or 4 types of smartphone – with Blackberry and iPhone, and … others, it is very safe to say, the trend is for Android smart phone domination. There are only a few models of iPhone, and only one manufacturer each of iPhones and Blackberry phones. (The key corresponding fact, is that Android is on dozens of phones made by an array of companies, and Google shares success with all of them… Motorola, LG, Samsung, HTC, etc.)   To flesh that out a bit… It is in the corporate interests of all of those cell phone producers to help Google succeed by selling more android phones. Even Google’s competitors are selling phones that spread Android. For instance – Google opened their bookstore 2 days ago. As ironic as this can be – Amazon is discounting the Droid Pro to $19 each.  Google is smart and they ARE going to take advantage of this installed base.

When your platform is exploding, and your fiercest competition contributes to your expansion – well, that is a bit like IBM selling PC’s and including Microsoft’s DOS as the key component that made a PC “IBM-Compatible.”  Good for IBM, but VERY good for Microsoft.

Beyond Cell Phone manufacturers, Android users use more data than other smartphone users, which will make them a favorite of cell companies who want to profit from data transmission. “Samsung Galaxy users typically upload 126% more data than iPhone 3G users, and HTC Desire users download 41% more data” (Arieso)

Want to be available to mobile users? 300k per day is a trend that you MUST account for.

December 9, 2010 Posted by | Business, Competitive Advantage, Marketing, Technology | 1 Comment

Competitiveness and Personal Data

Technology competition is ramping up everywhere, and it surrounds the value of Personal Data.   Google is launching its E-Bookstore to compete with Amazon, Apple, and others. Facebook is releasing a new “profiles” feature that will certainly compete with LinkedIn and Twitter, and Google Buzz.

Motorola’s Droid Pro has to be giving RIM nightmares because the reasons for having their Blackberry are dwindling at an amazing speed. Cellphone competition is at a feverish pace. As Verizon prepares to get the iPhone, it sounds like they’re willing to pay Apple to prevent either Sprint or Tmobile from getting it…  Google released the new Nexus S phone  with a reference build of their android operating system, with no additional-anything to impede user experience. (TechCrunch says that “Google’s various apps, some of which are unavailable for the iPhone, that make it the best phone on the market today.”)

All of the technical competition has a downside though… Google’s Nexus S has a Near Field communication, NFC, feature that will let you use the phone in lieu of a credit card by simply tapping it against a device in a store. (read more about that here)  Given the data that they gather every second about customer preferences with their search engine, and the data that they gathered over the last few years with Street view – One has to wonder about the data they will gather from their Ebookstore and their Nexus S. One has to wonder what Facebook is going to gather with their new Profiles Feature. Another good question is… WHO is Facebook competing with there? Is it LinkedIn? Is it Twitter? Is it Google Buzz? or is it just Facebook improving for the sake of improvement? And what personal data will THAT improvement release?

Given the enormous value Google reaps from its growing googlebytes of data, it seems safe to question every “technical” advance, innovation, invention and announcement in terms of what personal data will be freshly captured for corporate plundering.

Is it all about the data? Should we be concerned about Ford gathering consumer information with their “Vehicle Interaction Revolution?” The new MyTouch feature of the Ford Edge understands thousands of commands. It connects to Cell phone, MP3 player, USB drive, SD Card… and features an ADHD-enabled delight: “Two 5-way switch pads on the steering wheel with 3 LCD displays – 2 in the instrument cluster, and 1 in the center stack. The available MyFord Touch™ features an 8-inch touch-screen display in the center stack.” (I’d love to trade my 10 year old Ford Explorer in for one. I’d think of it as a Ford Digital Explorer!)

Does it know how to phone home?  How long will it be before your Droid Pro can sync with your Ford Edge to update your Facebook Profile with 4Sq information, and feed all that into Google’s database so that Groupon can target you with an advertisement?  How much personal data is too much?

What do you think?

December 6, 2010 Posted by | Business, Competitive Advantage, Life | 1 Comment

Nissan & Facebook

Timothy Tiah wrote a thought-provoking review of the Web 2.0 Summit in San Francisco last week. It has some amazing contrasts of facebook.

On one hand Fred Wilson thinks of Facebook as a photo/chat site. On the other hand Mark Zuckerberg wants it to be an idealistic, privacy-eliminating uber-platform that he can run like a government-less big-brother.  I think it is somewhere in the middle, but with the potential to go either way. As the Facebook “company” grows, it will be less and less of Zuckerberg’s vision, and more of Fred Wilson’s, HOWEVER – So many people are clueless of both potentials, that there is really no way to predict.

 Jeremiah Owyang pointed out this morning that companies are self-depreciating … of their OWN brands when they point to facebook.com/*** instead of their own sites. When I read that, I immediately thought of Nissan’s weekly emails promoting their “master the shift” contest. This is a weekly contest designed to publicize the Nissan Leaf, where they direct contest participants to http://facebook.com/mastertheshift instead of their own site. They aren’t selling a Facebook Leaf, but do they know that?  Well, maybe Nissan is an exception, though. They don’t even own Nissan.com – so, seriously- Perhaps they have bigger issues.

What do you think?

November 24, 2010 Posted by | Competitive Advantage, Marketing | 1 Comment