The Feed Kludge

I'm not a huge fan of blog comments. Sure, I appreciate the friendly "Amen, brother", but if you've really got something to say then start your own blog and start saying it. And, of course, link it to my blog. Comments are inherently a speaker-audience metaphor: the blogger is up on the stage talking and the peanut gallery chimes in now and again. I don't like that; I don't want an audience, I want an invisible college.

A network of citations is the best way to organize and discover relevant information, better even than the oft-yearned-for semantic web. From a systems point of view, writing a blog post and linking to mine creates a useful connection. It says that your set of ideas and my set of ideas are related. It means that highly connected subsets of the web could be mechanically discovered; that someday I could ask to read opinions on, say, the Future of Advertising, and some system could reliably set me up with feeds of sites that talk about that. And it could do it in a way that more closely emulates the editorial function than the search function. And the editorial function is what is sorely missing in today's web. That's why I often spend half an hour weeding out the direct marketing pitches from the useful content after a Google search: what are my other options? Go to About.com? Not likely.

Sarah Perez writes that the Conversation Has Left the Blogosphere over at ReadWriteWeb. The article is a list of kludgey ways to track ideas and comments popping up in unlinked settings: Twitter posts, Digg comments, Facebook feeds. The bigger issue for me is that these new sources of ideas aren't integrated. One strength of the web, linking, is being superseded by another, ease of communication.

Maybe I'm just an optimist, but there has to be a way to create more communication while maintaining some way to keep the information organized. I'm not saying we should roll back progress, I would never say that. The internet community has always been great at synthesizing great features into true progress. That is definitely what's needed here.

Don't Do Me Any Favors

Louise Story had a decent article in the NY Times on Monday about internet ad targeting. But the article, like every article on ad targeting ever written in a publication dependent on placating their obviously non-objective sources, said this:

...executives from the largest Web companies say ... the data is a boon to consumers, because it makes the ads they see more relevant... “What is targeting in the long term?” said Michael Galgon, Microsoft’s chief advertising strategist. “You’re getting content about things and messaging about things that are spot-on to who you are.”

Now, let's keep this between us internet marketing wonks, but the truth is targeting isn't a boon to consumers. We're not doing them any favors. Moreover, nobody I know who is in the marketing industry (as opposed to the media or ad-tech industry) says that consumers want advertising. Consumers put up with advertising, because they know they can't get content without it.

Don't agree? Here's a simple test. If you're doing the consumers such a favor with targeting, ask them to give you something back for it. Money, maybe. Or maybe just putting up with inferior content. That seems fair, doesn't it? Convince me that consumers are willing to give up something for more relevant ads, or stop saying it.

The only thing consumers give up to see more relevant ads is their personal data, and while that data's very valuable, they are giving it up only because they don't know they are.

David Verklin, of Carat, in the same article:

"Everyone feels that if we can get more data, we could put ads in front of people who are interested in them,” he said. “That’s the whole idea here: put dog food ads in front of people who have dogs."

Note that by "everyone" he means everyone in the marketing, media and technology world. He is paid to sell more dog food, and targeting lets him do that. If a salesman showed up in my office and said he came calling because I fit the profile of buyers of his product, I would say he's just doing his job; if he claimed, in addition, that he was actually doing me a favor by not showing up trying to sell me something I didn't want, I would think he was an idiot. Verklin does not claim to be doing anyone any favors, he claims to be doing his job. That is how marketing professionals think, and how the better ones admit to thinking.

I make my living in the marketing industry. I'm not going to bite the hand that feeds me. But the idea that we're doing consumers a favor is so transparently ludicrous that it sounds exactly like intentional misdirection or defensive rationalization.

Please, everybody, stop saying targeting is a boon to consumers. Seeing ads are the price consumers pay for media. Anyone arguing that slightly lowering that cost by showing more relevant ads (without acknowledging that they are increasing the costs by nosing around in the consumers' private affairs) is not doing anyone any favors, especially not the marketing industry.

A Dollar's Worth of Wine, and Three Dollars' Worth of Bubbles

I had this New Yorker cartoon on my desk in 2002. I felt for that guy. Wait, I was that guy.

I totally missed out on the real estate bubble. Well, I bought a house in 2003, so I guess I played a bit role. Eric Janszen has a great article in Harper's about the dot com bubble and the real estate bubble. While I disagree with about half of what he says, that's a pretty good percentage for me, so I recommend reading it.

He makes a case that the next bubble is starting to inflate now. He also lays out the timing and size of the next bubble by looking at the characteristics of past bubbles. It's a bit simplistic, but it's fun reading. If he's right, then knowing what the next bubble is, investing in it now and selling anywhere near the future peak he has identified would be a nice way to get rich without needing to be a super-genius, a hard worker or anything other than a huge risk-taker (and, of course, somewhat wealthy already.)

So, what's the next bubble? He thinks alternative energy. That doesn't seem right to me: creating that type of company requires actual deep technical expertise-- unlike creating a dot com or buying a house--so I don't see how enough investable companies are created. Any other ideas?

All I know is, I'm going way short in 2013.

Shoemaker's Child

I should be using this blog as a marketing vehicle, not for the money, but for the learning.

This company, YouCast, is doing something pretty interesting around branding on the internet. Can't say too much, but this Snapple widget is part of it.

The Sky is Falling! Onto the Moon!

Paul Kedrosky, whose blog I love to read, lends credence to a misleading MSNBC article "Mortgage Application Volume Plummets" by pointing to it. See below, a graph of the stat that "plummeted," through 2/15/2008.

I mean, there's something wacky going on with that volatility, but it's not a disappearance of mortgage applications. Looks to me like there's a lot of opportunistic demand.

Data from the Mortgage Bankers Association.

Advertising in a Downturn: Case Study

The common wisdom, the man on the street, the wiseacre in the crowd and their various ilk at the major media outlets say: in a recession, advertising spend goes down. I've been arguing for six months that certain sectors of the advertising market won't, even though their industries are troubled: mortgages and cars have been my examples. Today the New York Times grudgingly reports that mortgage lenders have continued to advertise.

The mortgage market may be in a historic upheaval, but mortgage companies continue to pump out upbeat advertisements... Despite rising foreclosures, defaults, lawsuits and investigations by state and federal regulators, the mortgage industry has not reduced its ad spending... Mortgage experts say spending will be strong into the spring.

"There's been huge scrutiny on these companies, but they are continuing to advertise... many of these companies are bleeding, and these ads are a way to get more money into the door."

But advertising spend is related to GDP growth. So, why is mortgage advertising immune? Why do I think car advertising (especially on the internet) will be immune? My thesis is that brand advertising and sales/transactional advertising react very differently to near-term microeconomic factors.

Brand advertisers (consumer packaged goods, car manufacturers, etc.) can cut back their advertising spend in the short-term and not suffer too much from it. Brand advertising is an investment in the future: brand advertising today has a long tail, so a cutback today doesn't mean that sales suffer tomorrow. But transactional advertisers (mortgages, car dealers) advertise today for a sale tomorrow. There is no long view. So if a transactional advertiser stops advertising, sales stop. (Of course, everybody is a bit brand advertiser and a bit transactional advertiser, it's not black and white, but most are more one than the other.)

My prediction: transactional advertisers will continue to advertise through a downturn. Brand advertisers will slow. The internet is primarily transactional advertising, so should weather a downturn better than other media. Network television is primarily branded advertising, so should suffer more.

The Google: Inflection Point

Google continued growing rapidly, albeit a tad less rapidly, and said they saw no weakness in the online advertising market from the oft-predicted recession. But they also said that they were going to focus more on display advertising to diversify away from their core CPC business. That’s exactly what I said to expect.

This will continue until people are feeling ebullient again. Long-term, Google's real problem in garnering a much larger share of the advertising market is something else: Google can't do brand advertising. They're great for sales advertising, but that's only--at most--half of advertising budgets.

Sales advertising is when the ad tells you to go to the car dealer this weekend and buy the car. Buy now. Only five left on the lot. Financing available.

Brand advertising is when the rugged man and the adoring woman drive through the verdant forest for thirty seconds while the Pats are taking a timeout from their pummeling by the Giants.

Brand advertising is a better investment, but it takes time, money and faith. Sales advertising gets you a measurable, but smaller, return tomorrow. When it's go go go, you do sales advertising. When its build build build you do brand advertising.

Brand advertising requires the consumer to pay attention, identify with the message, and engage long enough to remember the brand. And it requires that this happens several times (although not too many times) every week. It's both an art and a science, but mainly an art.

Internet advertising as it is currently practiced is incredibly poorly suited for brand advertising. Banner ads: you don't see them, you don't pay attention to them. If you do pay attention to one, you are certainly not engaging with it, unless you happen to be in the immediate market for the product. This is great for sales ads, but not for brand ads.

My agency friends are trying to figure it out: brands want to be on the internet, they need to be on the internet. But the techniques that worked when selling mortgages don't work when selling soda. It's not a question of display ads versus search ads. None of the current online advertising stuff works, nothing scalable works. Yet.

The internet could be a better medium for brand advertising than any other. The internet is built on communication, engagement and relationship. To harness this, an entirely new way of advertising needs to be invented, where attention and trust are paramount. This requires the consumer to be in charge, not the media.

There are a lot of companies trying to crack this code right now. And despite the highly visible mistakes, we're getting closer every day. But Google is not one of them. Google is not in a position to be a leader in brand advertising on the internet, and this is the fatal flaw in the model of all of the Google bulls.