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Marketing Channel Business Strategy Reallocation Management: Where Are You?

The other day Google (GOOG) had it’s earnings call, Google stated that a primary agenda for 2010, in addition to mobile, was display advertising. Yes, you read that right, display advertising.  Display? Yahoo 2.0? After the call one had to think about how non-targeted and potentially wasteful advertising spend could potentially be harmful to corporate profitability as some people might try display that aren’t appropriate for display (and could do far better just creating quality content to be indexed in organic search). The promise of the Internet comes from the potential to change organizational structures to be closer to the customer in the way that Peter Drucker would want to increase customer utility and reduce the cost of marketing and sales. I think we have all underestimated the amount of time these changes will take and clearly question whether our society is picking the right leaders to lead these changes.

Obviously one must consider that without true reform of advertising models away from CPM driven page view models how display in 2010 can do nothing to further the goal of lowering costs of marketing and sales for companies and improving our standard of living. CPM can only maximize revenue of an ad network with some residual benefits to publishers. A few days ago I considered writing something about this, but thought this was part of something larger than just Google and their display initiatives in 2010.

Surely, less than 48 hours later, Jason Calacanis started a discussion about comScore that has the Blogoshpere abuzz. Michael Arrington also chimed in (as did a bunch of other people) in his post, Jason Calacanis Punches Comscore In The Face. Comscore Punches Back. Fred Wilson Drags Us Into It. $SCOR” rel=”bookmark” href=””>Jason Calacanis Punches Comscore In The Face. Comscore Punches Back. Fred Wilson Drags Us Into It. $SCOR.The buzz around Jason and his conversation is ultimately about symptoms of the current ecosystem, not the root causes of the future end game.  While the conversation about the current state is certainly an interesting conversation to observe, it’s not the conversation I wish to take to the next level. We need to have a different conversation. There is so much more to achieve and limited marketing resources of companies need to be put to work effectively. There are advertising models of the future to consider where offline, mobile and Internet will collide and will someday make this entire conversation look primitive.

Sure enough reading this post brought me back to the conversation about Google and the worthlessness of poorly targeted and untimely display banner ads. You see there was not one but two large banners on TechCrunch that stood out as irrelevantly served by Google. What were they? They were display banners for a company I had interviewed with to be the CMO of in Spring of 2009 that I would have likely have increased the revenue significantly by now.  Unfortunately most CEOs don’t yet fully understand the magnitude of the amount of change  that is necessary to transform a company successfully for marketing on the web while improving customer satisfaction and the corporation’s profitability. I had researched them and their competitors back then. I was never a potential customer of the service. So now, a full nine months later, here I am looking at this completely irrelevant ad on TechCrunch of all places (which is completely unrelated to the vertical). Wasteful. Pathetic. Sad. Not something a rational business leader following the rules of being a Gen X CMO where search marketing becomes the top of the strategic process.  The first decade of the Internet got us to the batters box to start the game of corporate business strategy transformation, I look forward leading that conversation into the first inning during the next few years. The magnitude of the change and the amount of transformation needed is massive, whether it is a small company or a member of the Fortune 500.

You should read those comments in Michael Arrington’s post and think about their motivations – extremely carefully. You’ll also find a link to Jason’s original post there if you wish to read the full details. The future of not only the Internet, but also the future of business organizational structures and marketing strategy budget direction hangs in the balance.

So my question for Jason Calacanis, Fred Wilson, Michael Arrington and EVERYONE ELSE is the following, “Is it time to stop pretending that offline branding models simply converted online is the future of the advertising? If a world migrated budgets from CPM banner ads to CPA/CPL and other emerging forms, who would really care about unique visitors besides site owners seeking an ego boost?

Bonus question for Fred Wilson: Wouldn’t your energy be better spent on funding ideas that move the conversation in the direction of innovation of advertising instead of arguing with Jason about a company you exited long ago? (If you are up for it, I’d like to create those realities with you in start ups in that future arena.)

In the end measurement of the type discussed in Jason’s post only matters in an advertising world based on page view based(CPM) or time sponsored impressions. As in my example above, considerable display advertising occurs in an irrelevant way after the fact. For example, I bought a car last September, I’m still seeing increased banners on the models I considered now – after the purchase. Women planning weddings likely have seen related retargeted banners long after the wedding has occurred, possibly even after the divorce is filed in some cases!!! We must do better.

The convergence of offline, online, search and mobile marketing will require entirely new processes to effectively manage them as it becomes a real-time individual decision marketplace. To me, it will have similarity to the changes I made in the 1990’s at BlackRock, where we created new data, new structures, new standards and created better information for us to create strategic advantages.  I actively network with some outstanding nascent start ups, sadly many are ignored as many VCs look for traffic or who is involved rather than focus on revenue models, vision, market size and evidence that there might be paying customers for such a new , disruptive model.

The economy right now is bad, but to state that it is just an economic event is way oversimplifying it. It’s prolonged and drawn out due to the structural effects of the Internet not being managed to corporate advantage effectively. Stated simply, corporations and our society is not allocating resources in an effective manner as it fails to migrate budgets and marketing strategy to the highest ROI activities which attract relevant customers. It’s time for scarce, new and often misunderstood breeds of executives that understand these concepts to be allowed to realign corporations big and small, new and old to these new realities otherwise we will see more corporations destroyed “by doing nothing”. There is certainly a significant cost to tapping new leaders, with new skills to lead organizations into new frontiers in terms of realignment and retraining. However, the costs of doing nothing are far greater to our society as not allocating budgets to the most efficient channels and allowing those decisions to be made by people who understand these new realities is far greater.

All I can ask the both the blogosphere and the world business community is to please stop the bickering about these legacy models so we can move onto the real issue and work ahead – realigning our corporate business strategy and our society to the realities of Industrial Revolution 2.0. It starts with board of directors, CEO, CFO and COO executives asking their CMO and marketing partners the right questions. The journey will be fun.

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TECH cocktail CONFERENCE Chicago – Creating Change For The Future

Wow! That was tiring, I stepped on the L at 7:30AM and didn’t get home until 1:30AM the next morning! 18 hours of pure madness! Most people noticed the great speeches by Gary Vee from Wine Library TV and Dick Costolo (aka ask the wizard) and others. But what I really appreciated was the other things that the day brought to me. When Frank Gruber and Eric started TECH cocktail, one of the goals was to enable the interaction of people and removing barriers between entrepreneurs, funding sources and removing the boundaries between Chicago and the rest of the world.

When I sit at the first TECH cocktail CONFERENCE Chicago watching great speeches and meeting people from startups from both the east and west coasts while talking, playfully joking about Internet concepts and trading ideas with a local Chicago angel investor in the back of the room for hours on end – it’s at that moment one can clearly perceive a vision is starting to become reality…

For a first conference, it was very well run. There were those little things with a venue that didn’t go quite right with the elevators and not having enough power outlets (but you could say that about any conference) but those were out of their direct control. You could see that Eric and Frank went out of their way to challenge the audience about topics that too often go ignored at startups, like how to set up a corporate entity properly, partnerships and most of these challenges and experiments went well.

So what’s next? I’d like to challenge each and every person in TECH cocktail community to take things to the next level by taking the following actions:

1. Follow Up – People need to work to get to know each other better and learn to leverage each person’s special gifts and talents and realize that 1 + 1 > 2 when we behave in this manner. For me, I know that creating new business partners while listening to help iterate the product, data model or service is my area of strength.

2. Change TECH cocktail from an event to an everyday process on your own – a three month cycle time is not sufficient to build relationships to the next level – it’s everyone’s responsibility to make an hour here and there to sit down with someone, learn about what they are doing, give them a fresh perspective and potential assistance. Don’t wait for the next TECH cocktail event. If this means you need to organize your contact info, make that important time investment.

3. Listen to what Dick Costolo had to say about Internet company NDAs and then change your behavior accordingly (where is the video of that speech anyway?)Stop sending people NDAs that serve no purpose other than to destroy your access to people who are the most qualified to help you. Ideas are a dime a dozen, assembling the right people with the current knowledge and future potential to create that reality is what matters.

4. Go beyond lurking, participate!!! During the conference, I had at least 10 people talk to me about a blog post of mine in detail, yet they’ve never left a comment on my blog. That’s sad. Leaving a comment leaves you a hyperlink back to your business or blog and allows distribution of one’s business network organically removing them as the bottleneck, please use this viral tool.

5. Learn to hire people for their current knowledge, network, blogs and future potential – not legacy job titles and brands – this takes work, research and being involved in the community, but it is how you’ll find the breakthrough thought leaders and future superstars.

6. Become an ambassador to expanding the understanding of the tools we all use and expand our base of understanding to new people outside our core – If you have a client or operate a service do they understand what Internet advertising, blogs, rss, social media, twitter, etc do? If they do is their organizational culture and structure set up to handle it to serve a customer’s needs? Many people know there is a problem but do not know where to start to fix it – I want to help those people as it will ease the adoption and enhance demand for disruptive new Internet services. I’m planning a series of future posts on this important, yet highly untouched topic. If you have examples of success stories or learnings in this area, I’d love to hear from you.

What else would you add to this list? I look forward to your contributions.

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Winners of 11th Annual ad:tech Awards

ad:tech announced the winners of the of the 11th annual ad:tech awards. Congrats to all of the successful winners!

The 2008 Industry Achievers:
Pete Blackshaw (Executive VP, Digital Strategic Services, Nielsen Online) has been an industry leader since co-leading p&g’s interactive marketing efforts. He founded, coined the term “consumer-generated media,” and co-founded the Word-of-Mouth Marketing Association (WOMMA). He also has a forthcoming book, “Satisfied Customers Tell Three Friends, Angry Customers Tell 3000”.

Kate Thorp (CEO of Real Girls Media) was named one of the Top 25 Women to Watch by Advertising Age (1998) and a Media All Star by OMMA (2005). She was also inducted into the AAF Hall of Achievement for executives under 40 (2000).

Rich LeFurgy (General Partner of Archer) was recognized by USA Today as “the Johnny Appleseed of Online Advertising” (1998), was inducted into Advertising Age’s Interactive Hall of Fame (2000), and received the IAB’s Lifetime Achievement Award (2004). Rich is the Founding Chairman of the Interactive Advertising Bureau and remains active in the trade association since it’s founding in 1996.

The 2008 Limelight Award Winners:

· Best Banner Ad: WaMu Friendly Banner, Avenue A | Razorfish

· Best Interactive Broadcast Ad: Nissan Rogue Campaign, TBWA\Chiat\Day\Tequila

· Best Large Format or Overlay Ad: Assassin’s Creed Roadblock, AKQA

· Best Next Generation Ad: HEMA Rube Goldberg Viral, CCCP

· Best Use of Rich Media: HP Gwen Stefani Yahoo Paper Dolls, Goodby, Silverstein & Partners

· Best Affiliate Marketing Campaign: Moosejaw – Growth and Profit, Schaaf Consulting

· Best Branding Campaign: eBay – Renew & Rethink,

· Best Business-to-Business Campaign: EyeWonder Client Testimonials, EyeWonder

· Best Consumer Campaign: Nokia Jealous Computers, These Days

· Best Direct Response Campaign: Soccer Club Sells Seats with DRC, eStara

· Best Email Marketing Campaign: Sun APAC Re-engagement, Acxiom Digital

· Best Integrated Campaign: Heinz Top This TV Challenge Website, Smith Brothers Agency

· Best Mobile Campaign: Motorola “Say Goodbye”, The Hyperfactory & Ogilvy

· Best Multi-Cultural Campaign: Vivemejor, Media 8 Digital Marketing

· Best Social Media Marketing Campaign: Bamboo on Facebook, Guerilla PR

· Best Word of Mouth Campaign: Elf Yourself, EVB & Toy

· Best Campaign Optimization: Lincoln Educational Services, iCrossing

The 2008 Limelight Award Winners (continued):

· Best Search Engine Optimization Strategy/Campaign: Millennium & Copthorne SEO Campaign,
eMarketingEye (Pvt) Ltd

· Best Search Marketing Strategy/Campaign: HGTV Design Star Marketing Loop, Scripps Networks

· Best Business-to-Business Marketing Web Site:, Mullen

· Best Business-to-Business Transaction Web Site:, The Buddy Group

· Best Business-to-Consumer Marketing Web Site: HP Serena Williams Site, Goodby, Silverstein & Partners

· Best Business-to-Consumer Transaction Web Site: Virgin America, ROKKAN

· Best Micro Site: Every journey needs a Journal, T3

· Best User Defined Experience: DesignMyRoom Website, andCulture

· Best of Show: Elf Yourself, EVB & Toy

The 2008 People’s Choice Award Winners:

· Best Banner Ad: Blue Shield of California Headbanger Banner, TAXI, Inc.

· Best Interactive Broadcast Ad: Ubisoft Rayman Video Inventory Ad, AdMission Corporation

· Best Large Format or Overlay Ad: Flight of the Conchords, Deep Focus

· Best Next Generation Ad: Motorola Rockstarizer, Draftfcb

· Best Use of Rich Media: Taco Fu, Blockdot and Draftfcb

· Best Business-to-Consumer Marketing Web Site: Breville Concept to Kitchen, Avenue A | Razorfish

· Best Business-to-Consumer Transaction Web Site: Virgin America, ROKKAN

· Best Business-to-Business Marketing Web Site: Business Breakthrough, Visa

· Best Business-to-Business Transaction Web Site: ADSDAQ Selling Desk, ADSDAQ by ContextWeb

· Best Micro Site: Funship Island, Avenue A | Razorfish

· Best User Defined Experience: Elf Yourself, EVB & Toy

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Net.Finance 2008: Jon Kaplan of Google – YouTube and Financial Services

Before I post about Jon’s interesting session, I’ll note that it’s important that marketers considering using this channel read my post on YouTube Video Optimization as there are many highly unique search engine optimization techniques that can improve your success in this area.

Jon Kaplan’s talk starts here: Youtube was founded at a dinner party in 2005. There was no easy way to share video files.

Online video viewing in the mainstream

Americans stream of 10 billion online views monthly…

Explosion of Content = connection of people + democratization of the tools of production + broadband penetration + falling cost of data storage

Sharing is the new viewing – 150M unique users globally

Demographics: 2/3 of YouTube users are over 35, 37% earn above $75,000

800 content partners attended YouTube Videocracy in February

Four ways to think about marketing in 2008
– Target your audience with video profiling
– Integrate your brand into the user experience – on YouTube and Beyond!
– Leverage your offline assets and ones YouTube is creating
– Think about measurement differently

Video Profiling – Building Tools for Effective Targeting – using traditional demographics in the search by audience features…

YouTube’s Creative Standards – 20 million home page views a day

Animated flash overlay is the current YouTube ad format – NO Pre-rolls are shown
Promote Your Video: Video Search capabilities

Integrate Your Brand into the Experience – HP example

It’s all about interesting content: Turbotax

It’s about all about educational content: Vanguardinvestments brand channels

Launched test of video ads in the 1st Quarter of 2008

E*TRADE – pre-seeded SuperBowl commercials – 2,000,000+ views on Youtube.

American Express sponsored fashion week

YouTube Global Gathering

Metrics – the social side of YouTube
– Users can rate videos
– User can comment on videos
– User can add videos to their list of favorites
– User can share videos with friends
– Users can subscribe to their favorite channel

New metrics will accompany this, Google Trends data – admitted that this drives need for Adwords campaigns. Discussed other metrics in terms about how the video was measured and then closed with questions.

Audience question: Should YouTube provide statistics for videos with completed views or the average time of engagement with viewers so that more accurate measures of engagement could be provided?

Answer: That’s a good question. Said several things about exploration of new areas. Did not say yes we’ll add it or no we’ll never do that. It will be interesting to revisit this issue at some point.

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Business Week Article – So Many Ads, So Few Clicks

Nice article talking about he decline in click through rates of ads.  It includes this statement:

But as responsiveness declines, ad targeting grows more attractive. Marketers see increases of 30% to 300% in click rates when ads are customized based on criteria such as the location, content of Web pages visited, or information researched on search engines.

Exciting data indeed for a project I’m working on right now. It’s all about relevancy, not quantity, of viewers.

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eComXpo is October 9,10,11, 2007

Chicagoland’s very own eComXpo is October 9,10,11, 2007. You can join the fun and learning from anywhere in the world though!

eComXpo is the premier virtual Internet Marketing conference that is FREE to attend. I’ve also had the honor of speaking there previously. It’s a great resource for learning Internet marketing concepts and networking. Register now.

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SES San Jose 2007 Day 1 – Post-Search Marketing Ads

Search Engine Marketing Speakers:
Kevin Lee, Executive Chairman and Co-Founder,
Dave Carberry, Director of Search Marketing,
Michael Benedek, VP-Business Development, AlmondNet
Richard Frankel, Senior Director of Product Marketing, Yahoo!

Kevin Lee

Tap the intent of the searcher. Search is the greatest indicator of a consumers needs.

Engines have the greatest leverage as they see the highest level of data. Google says they are not doing retargeting. Yahoo is live in Phase 3 of an evolution. Microsoft’s acquisition of adECN will have implications.

Preaching to the unconverted. If you are lucky 5% conversion is good. Contextual ads are most often links but are increasingly graphical. Converting the unconverted – different offer/price, ad creative, different landing page or time.

One click away. Target directly, Google Site Targeting, Yahoo! YPN, adbrite, link sellers like text link ads – which has pros and cons.

Piggy-back Retargeting

The Best of Search + Media Buying – don’t over focus on keywords.

Stay tuned. Post-search targeting adds relevance to non-search advertising.

Michael Benedek, CP – Business Development – AlmondNet

Owns post search patents

70 million aggregated in US/UK 40 segments

Delivery of ads based on wherever people go.

Behavioral becomes increasing important when contextual falls short.

Types – Advertiser Retargeting, Inventory, Data Sharing and Post Search

Why is post search so exciting?

People of their time 5% time searching, yet spend 95% of their time browsing ad supported content on other sites!!!

User should not be seeing an untargeted ad.

What have we learned for 600 million ads. Clickthroughs on targeted ads is about the same as untargeted – yet they convert 8 to 10 times better.

David –

Post search behavioral allows you to re–engage your consumers after they click. The desired conversion is key. The searched keyword is the behavior. Can overlap geo or demo based on audience size. Custom messaging from multiple touch points. Brand segmentation keeps retargeting pool wide.

Richard Frankel, Senior Director, Product Marketing, Yahoo!

There are a lot of things that consumers do that don’t have to do with search. Part of our secret sauce is. If you go to the mortgage page or Yahoo! Autos you are likely interested in those products. We put all that together.

Yahoo! Engagers – raise brand awareness, deepen engagement and build brand preference

Yahoo! Shoppers

How Yahoo! Behavioral Targeting Works – we analyzed predictive patterns for ad response in 350+ product categories.

Target ads to users who get the highest relevance scores in the targeting categories you choose

Uses all of the commercial categories. Pretty much every Yahoo! property is included.

The smart ads value proposition is much more clear to me now in regards to relevancy and how Yahoo! can leverage it’s broad and unique resources.