Targeting ads at the edge, literally

Esther Dyson wrote about a really interesting area of the advertising market in an article for The Wall Street Journal.

She’s talking about user behavior data arbiters, companies that capture what users are doing on the Internet through ISPs and sell that data to advertisers.

These companies put tracking software between the ISP and a user’s HTTP requests. They then build dynamic and anonymous profiles for each user. NebuAd, Project Rialto, Phorm, Frontporch and Adzilla are among several companies competing for space on ISPs’ servers. And there’s no shortage of ad networks who will make use of that data to improve performance.

Esther gives an example:

“Take user number 12345, who was searching for cars yesterday, and show him a Porche ad. It doesn’t matter if he’s on Yahoo! or MySpace today — he’s the same number as yesterday. As an advertiser, would you prefer to reach someone reading a car review featured on Yahoo! or someone who visited two car-dealer sites yesterday?”

Behavioral and demographic targeting is going to become increasingly important this year as marketers shift budgets away from blanket branding campaigns toward direct response marketing. Over the next few years advertisers plan to spend more on behavioral, search, geographic, and demographic targeting, in that order, according to Forrester. AdWeek has been following this trend:

“According to the Forrester Research report, marketer moves into areas like word of mouth, blogging and social networking will withstand tightened budgets. In contrast, marketers are likely to decrease spending in traditional media and even online vehicles geared to building brand awareness.”

We tried behavioral targeting campaigns back at InfoWorld.com with mild success using Tacoda. The main problem was traffic volume. Though performance was better than broad content-targeted campaigns, the target segments were too small to sell in meaningful ways. The idea of an open exchange for auctioning inventory might have helped, but at the time we had to sell what we called “laser targeting” in packages that started to look more like machine gun fire.

This “edge targeting” market, for lack of a better term, is very compelling. It captures data from a user’s entire online experience rather than just one web site. When you know what a person is doing right now you can make much more intelligent assumptions about their intent and, therefore, the kinds of things they might be more interested in seeing.

It’s important to emphasize that edge targeting doesn’t need to know anything personally identifiable about a person. ISP’s legally can’t watch what known individuals are doing online, and they can’t share anything they know about a person with an advertiser. AdWeek discusses the issue of advertising data optimization in a report title “The New Gold Standard“:

“As it stands now, consumers don’t have much control over their information. Direct marketing firms routinely buy and sell personal data offline, and online, ad networks, search engines and advertisers collect reams of information such as purchasing behavior and Web usage. Google, for instance, keeps consumers’ search histories for up to two years, not allowing them the option of erasing it.

Legalities, however, preclude ad networks from collecting personally identifiable information such as names and addresses. Ad networks also allow users to opt out of being tracked.”

Though a person is only identified as a number in edge targeting, that number is showing very specific intent. That intent, if profiled properly, is significantly more accurate than a single search query at a search engine.

I suspect this is going to be a very important space to watch in the coming years.

The useful convergence of data

I have only one prediction for 2008. I think we’re finally about to see the useful combination of the 4 W’s – Who, What, Where, and When.

Marc Davis has done some interesting research in this area at Yahoo!, and Bradley Horowitz articulated how he sees the future of this space unfolding in a BBC article in June ’07:

“We do a great job as a culture of “when”. Using GMT I can say this particular moment in time and we have a great consensus about what that means…We also do a very good job of “where” – with GPS we have latitude and longitude and can specify a precise location on the planet…The remaining two Ws – we are not doing a great job of.”

I’d argue that the social networks are now really honing in on “who”, and despite having few open standards for “what” data (other than UPC) there is no shortage of “what” data amongst all the “what” providers. Every product vendor has their own version of a product identifier or serial number (such as Amazon’s ASIN, for example).

We’ve seen a lot of online services solving problems in these areas either by isolating specific pieces of data or combining the data in specific ways. But nobody has yet integrated all 4 in a meaningful way.


Jeff Jarvis’ insightful post on social airlines starts to show how these concepts might form in all kinds of markets. When you’re traveling it makes a lot of sense to tap into “who” data to create compelling experiences that will benefit everyone:

  • At the simplest level, we could connect while in the air to set up shared cab rides once we land, saving passengers a fortune.
  • We can ask our fellow passengers who live in or frequently visit a destination for their recommendations for restaurants, things to do, ways to get around.
  • We can play games.
  • What if you chose to fly on one airline vs. another because you knew and liked the people better? What if the airline’s brand became its passengers?
  • Imagine if on this onboard social network, you could find people you want to meet – people in the same business going to the same conference, people of similar interests, future husbands and wives – and you can rendezvous in the lounge.
  • The airline can set up an auction marketplace for at least some of the seats: What’s it worth for you to fly to Berlin next Wednesday?

Carrying the theme to retail markets, you can imagine that you will walk into H&M and discover that one of your first-degree contacts recently bought the same shirt you were about to purchase. You buy a different one instead. Or people who usually buy the same hair conditioner as you at the Walgreen’s you’re in now are switching to a different hair conditioner this month. Though this wouldn’t help someone like me who has no hair to condition.

Similarly, you can imagine that marketing messages could actually become useful in addition to being relevant. If CostCo would tell me which of the products I often buy are on sale as I’m shopping, or which of the products I’m likely to need given what they know about how much I buy of what and when, then my loyalty there is going to shoot through the roof. They may even be able to identify that I’m likely buying milk elsewhere and give me a one-time coupon for CostCo milk.

Bradley sees it playing out on the phone, too:

“On my phone I see prices for a can of soup in my neighbourhood. It resolves not only that particular can of soup but knows who I am, where I am and where I live and helps me make an intelligent decision about whether or not it is a fair price.

It has to be transparent and it has to be easy because I am not going to invest a lot of effort or time to save 13 cents.”

It may be unrealistic to expect that this trend will explode in 2008, but I expect it to at least appear in a number of places and inspire future implementations as a result. What I’m sure we will see in 2008 is dramatic growth in the behind-the-scenes work that will make this happen, such as the development and customization of CRM-like systems.

Lots of companies have danced around these ideas for years, but I think the ideas and the technologies are finally ready to create something real, something very powerful.

Photo: SophieMuc

How to launch an online platform

I attended the Bebo developer platform announcement this morning in San Francisco. The announcement seemed to go down very well based on immediate response, though only time will tell if the expected impact is achieved.

Bebo schwag
It’s clear that a formula for launching this kind of stuff exists, and I think Bebo did a great job of giving it their own flavor. The overall format Bebo used was standard:

  • Invite people to a nice place and give them some free stuff
  • Give a presentation including a video showing customer testimonials
  • Let the founder or product owner or thought leader present the product
  • Parade the partners on stage
  • Provide demos for people to peruse after the presentation
  • Keep it short

But the nuances in the formula are what make an online platform launch successful.

  1. Create an invite-only experience: This is true with restaurants, art galleries, clubs and just about any socially-driven service. Make a select few feel important by treating them differently, and they will then be your advocate. Bebo invited press and partners to a small-ish rooom to give their presentation at the Metreon. Those people then felt responsible for spreading the news.
  2. Make it newsworthy: I wouldn’t say that the Bebo platform was a secret, by any means, but the features that make it worth talking about were kept secret until the event. In particular, the crowd seemed very pleased to hear that Bebo decided to emulate Facebook’s success by making their platform fully compatible with Facebook’s.
  3. Follow standards: Developers are not generally interested in proprietary environments unless there is a substantial gain to be made by leveraging that environment. Platforms on the Internet should default to known and proven standards, and when they do deviate, there should be compelling reason to do so. Bebo indicated that there might be features in the future that are Bebo-specific such as micropayments, and I suspect the developer community would be happy to customize their apps for Bebo when those features are ready.
  4. Prime the pump with partners: An ecosystem is not an ecosystem if it doesn’t have partners. So, don’t launch a service for partners with no partners already committed. But more than that, partners are proofpoints that the wider market wants to validate that what you offer is in fact real. Give them the stage. Make them successful, so others want to follow suit. I wasn’t all that impressed with the NBC Universal app showcased at the Bebo event, but the Gaia Online and Flixster apps were solid. And the 20 or so partners demoing in the back of the room after the presentations were great evangelists for the platform. They were proud to be there and happy to sing Bebo’s praises.
  5. Be real: I’m always a sucker for a self-deprecating joker, but Bebo founder Michael Birch backed up the laughs with substance. He admitted that they intend to follow Facebook and do whatever they do which is a totally viable strategy in this space, at this point in time. Of course, he gave himself a great defense should they get pounded by the press, but his approach was very refreshing in a market that’s increasingly crowded full with ambition and arrogance.

Again, the response by developers and then the subsequent uptake by users will be the real indicators of success. But Bebo gave themselves as good a start as any by getting the launch off on the right foot.

Investing in video at YDN

We’ve been playing around with video as a communications mechanism on Yahoo! Developer Network for a while now. Our casual attempts to generate interest in Yahoo! technologies through interviews, screencasts, tech talks, etc. have worked really well.

So, we hired a full time videographer/filmmaker named Ricky Montalvo and got him some decent gear to push the envelope a little further. And today we rolled out YDN Theater on the YDN web site to establish a home for all the work he has been producing.

The journey here started with a pretty lame but surprisingly successful screencast that Dan Theurer and I did to explain how browser-based authentication worked. It was blurry. We made mistakes. The subject matter was pretty abstract. And neither Dan nor I have particularly strong camera presence.

Regardless, it has been viewed over 19,000 times, so far.

We kept pushing with new types of videos such as partner showcases with people like Joyce Park, Adam Rifkin, and Leah Culver. We brought the camera to our various Hack Days and produced a particularly funny recap of the London event. And we recorded tech talks from our own staff at Yahoo! and presentations from guest speakers like Grady Booch, Joe Hewitt and David Weinberger.

By the time we found Ricky, we knew we were building a program that was going to be really interesting. Yet, we hardly spent any money other than a few cheap cameras and some basic editing tools including Camtasia at that point.

The success to date I think has been in large part due to the fact that we haven’t tried to pimp out our videos with any professional plastic gloss or staged demos. We also try to have a little fun with them. Jeremy Zawodny is a really good interviewer. His unassuming yet pointed questions get people to say things they otherwise wouldn’t include on any planned script. And the fact that the videos are raw with few cuts or edits make them feel real, too.

There are some good video program ideas floating around here that could be a lot of fun, but now we’re torn between how much time we want to spend building out the video offering and how much time we want to spend on all the other ways the team can evangelize Yahoo! technologies.

I’m not sure how to measure that decision just yet, but as long as people are consuming these shows we do with such enthusiasm we’ll probably tilt the scale in favor of doing more video whenever possible.

The business of network effects

The Internet platform business has some unique challenges. It’s very tempting to adopt known models to make sense of it, like the PC business, for example, and think of the Internet platform like an operating system.

The similarities are hard to deny, and who wouldn’t want to control the operating system of the Internet?

In 2005, Jason Kottke proposed a vision for the “WebOS” where users could control their experience with tools that leveraged a combination of local storage and a local server, networked services and rich clients.

“Applications developed for this hypothetical platform have some powerful advantages. Because they run in a Web browser, these applications are cross platform, just like Web apps such as Gmail, Basecamp, and Salesforce.com. You don’t need to be on a specific machine with a specific OS…you just need a browser + local Web server to access your favorite data and apps.”

Prior to that post, Nick Carr offered a view on the role of the browser that surely resonated with the OS perspective for the Internet:

“Forget the traditional user interface. The looming battle in the information technology business is over control of the utility interface…Control over the utility interface will provide an IT vendor with the kind of power that Microsoft has long held through its control of the PC user interface.”

He also responded later to Kottke’s vision saying that the reliance on local web and storage services on a user’s PC may be unnecessary:

“Your personal desktop, residing entirely on a distant server, will be easily accessible from any device wherever you go. Personal computing will have broken free of the personal computer.”

But the client layer is merely a piece of the much larger puzzle, in my opinon.

Dare Obasanjo more recently broke down the different ideas of what “Cloud OS” might mean:

“I think it is a good idea for people to have a clear idea of what they are talking about when they throw around terms like “cloud OS” or “cloud platform” so we don’t end up with another useless term like SOA which means a different thing to each person who talks about it. Below are the three main ideas people often identify as a “Web OS”, “cloud OS” or “cloud platform” and examples of companies executing on that vision.”

He defines them as follows:

  1. WIMP Desktop Environment Implemented as a Rich Internet Application (The YouOS Strategy)
  2. Platform for Building Web-based Applications (The Amazon Strategy)
  3. Web-based Applications and APIs for Integrating with Them (The Google Strategy)

The OS metaphor has lots of powerful implications for business models, as we’ve seen on the PC. The operating system in a PC controls all the connections from the application user experience through the filesystem down through the computer hardware itself out to the interaction with peripheral services. Being the omniscient hub makes the operating system a very effective taxman for every service in the stack. And from there, the revenue streams become very easy to enable and enforce.

But the OS metaphor implies a command-and-control dynamic that doesn’t really work in a global network controlled only by protocols.

Internet software and media businesses don’t have an equivilent choke point. There’s no single processor or function or service that controls the Internet experience. There’s no one technology or one company that owns distribution.

There are lots of stacks that do have choke points on the Internet. And there are choke points that have tremendous value and leverage. Some are built purely and intentionally on top of a distribution point such as the iPod on iTunes, for example.

But no single distribution center touches all the points in any stack. The Internet business is fundamentally made of data vectors, not operational stacks.

Jeremy Zawodny shed light on this concept for me using building construction analogies.

He noted that my building contractor doesn’t exclusively buy Makita or DeWalt or Ryobi tools, though some tools make more sense in bundles. He buys the tool that is best for the job and what he needs.

My contractor doesn’t employ plumbers, roofers and electricians himself. Rather he maintains a network of favorite providers who will serve different needs on different jobs.

He provides value to me as an experienced distribution and aggregation point, but I am not exclusively tied to using him for everything I want to do with my house, either.

Similarly, the Internet market is a network of services. The trick to understanding what the business model looks like is figuring out how to open and connect services in ways that add value to the business.

In a precient viewpoint from 2002 about the Internet platform business, Tim O’Reilly explained why a company that has a large and valuable data store should open it up to the wider network:

“If they don’t ride the horse in the direction it’s going, it will run away from them. The companies that “grasp the nettle firmly” (as my English mother likes to say) will reap the benefits of greater control over their future than those who simply wait for events to overtake them.

There are a number of ways for a company to get benefits out of providing data to remote programmers:

Revenue. The brute force approach imposes costs both on the company whose data is being spidered and on the company doing the spidering. A simple API that makes the operation faster and more efficient is worth money. What’s more, it opens up whole new markets. Amazon-powered library catalogs anyone?

Branding. A company that provides data to remote programmers can request branding as a condition of the service.

Platform lock in. As Microsoft has demonstrated time and time again, a platform strategy beats an application strategy every time. Once you become part of the platform that other applications rely on, you are a key part of the computing infrastructure, and very difficult to dislodge. The companies that knowingly take their data assets and make them indispensable to developers will cement their role as a key part of the computing infrastructure.

Goodwill. Especially in the fast-moving high-tech industry, the “coolness” factor can make a huge difference both in attracting customers and in attracting the best staff.”

That doesn’t clearly translate into traditional business models necessarily, but if you look at key business breakthroughs in the past, the picture today becomes more clear.

  1. The first breakthrough business model was based around page views. The domain created an Apple-like controlled container. Exposure to eyeballs was sold by the thousands per domain. All the software and content was owned and operated by the domain owner, except the user’s browser. All you needed was to get and keep eyeballs on your domain.
  2. The second breakthrough business model emerged out of innovations in distribution. By building a powerful distribution center and direct connections with the user experience, advertising could be sold both where people began their online experiences and at the various independent domain stacks where they landed. Inventory beget spending beget redistribution beget inventory…it started to look a lot like network effects as it matured.
  3. The third breakthrough business model seems to be a riff on its predecessors and looks less and less like an operating system. The next breakthrough is network effects.

Network EffectsNetwork effects happen when the value of the entire network increases with each node added to the network. The telephone is the classic example, where every telephone becomes more valuable with each new phone in the network.

This is in contrast to TVs which don’t care or even notice if more TVs plug in.

Recommendation engines are the ultimate network effect lubricator. The more people shop at Amazon, the better their recommendation engine gets…which, in turn, helps people buy more stuff at Amazon.

Network effects are built around unique and useful nodes with transparent and highly accessible connection points. Social networks are a good example because they use a person’s profile as a node and a person’s email address as a connection point.

Network effects can be built around other things like keyword-tagged URLs (del.icio.us), shared photos (flickr), songs played (last.fm), news items about locations (outside.in).

The contribution of each data point wherever that may happen makes the aggregate pool more valuable. And as long as there are obvious and open ways for those data points to talk to each other and other systems, then network effects are enabled.

Launching successful network effect businesses is no easy task. The value a participant can extract from the network must be higher than the cost of adding a node in the network. The network’s purpose and its output must be indespensible to the node creators.

Massively distributed network effects require some unique characteristics to form. Value not only has to build with each new node, but the value of each node needs to increase as it gets leveraged in other ways in the network.

For example, my email address has become an enabler around the Internet. Every site that requires a login is going to capture my email address. And as I build a relationship with those sites, my email address becomes increasingly important to me. Not only is having an email address adding value to the entire network of email addresses, but the value of my email address increases for me with each service that is able to leverage my investment in my email address.

Then the core services built around my email address start to increase in value, too.

For example, when I turned on my iPhone and discovered that my Yahoo! Address Book was automatically cooked right in without any manual importing, I suddenly realized that my Yahoo! Address Book has been a constant in my life ever since I got my first Yahoo! email address back in the ’90’s. I haven’t kept it current, but it has followed me from job to job in a way that Outlook has never been able to do.

My Yahoo! Address Book is becoming more and more valuable to me. And my iPhone is more compelling because of my investment in my email address and my address book.

Now, if the network was an operating system, there would be taxes to pay. Apple would have to pay a tax for accessing my address book, and I would have to pay a tax to keep my address book at Yahoo!. Nobody wins in that scenario.

User data needs to be open and accessible in meaningful ways, and revenue needs to be built as a result of the effects of having open data rather than as a margin-based cost-control business.

But Dare Obasanjo insightfully exposes the flaw in reducing openness around identity to individual control alone:

“One of the bitter truths about “Web 2.0” is that your data isn’t all that interesting, our data on the other hand is very interesting…A lot of “Web 2.0″ websites provide value to their users via wisdom of the crowds appproaches such as tagging or recommendations which are simply not possible with a single user’s data set or with a small set of users.”

Clearly, one of the most successful revenue-driving opportunities in the networked economy is advertising. It makes sense that it would be since so many of the most powerful network effects are built on people’s profiles and their relationships with other people. No wonder advertisers can’t spend enough money online to reach their targets.

It will be interesting to see how some of the clever startups leveraging network effects such as Wesabe think about advertising.

Wesabe have built network effects around people’s spending behavior. As you track your finances and pull in your personal banking data, Wesabe makes loose connections between your transactions and other people who have made similar transactions. Each new person and each new transaction creates more value in the aggregate pool. You then discover other people who have advice about spending in ways that are highly relevant to you.

I’ve been a fan of Netflix for a long time now, but when Wesabe showed me that lots of Netflix customers were switching to Blockbuster, I had to investigate and before long decided to switch, too. Wesabe knew to advise me based on my purchasing behavior which is a much stronger indicator of my interests than my reading behavior.

Advertisers should be drooling at the prospects of reaching people on Wesabe. No doubt Netflix should encourage their loyal subscribers to use Wesabe, too.

The many explicit clues about my interests I leave around the Internet — my listening behavior at last.fm, my information needs I express in del.icio.us, my address book relationships, my purchasing behavior in Wesabe — are all incredibly fruitful data points that advertisers want access to.

And with managed distribution, a powerful ad platform could form around these explicit behaviors that can be loosely connected everywhere I go.

Netflix could automatically find me while I’m reading a movie review on a friend’s blog or even at The New York Times and offer me a discount to re-subscribe. I’m sure they would love to pay lots of money for an ad that was so precisely targeted.

That blogger and The New York Times would be happy share revenue back to the ad platform provider who enabled such precise targeting that resulted in higher payouts overall.

And I might actually come back to Netflix if I saw that ad. Who knows, I might even start paying more attention to ads if they started to find me rather than interrupt me.

This is why the Internet looks less and less like an operating system to me. Network effects look different to me in the way people participate in them and extract value from them, the way data and technologies connect to them, and the way markets and revenue streams build off of them.

Operating systems are about command-and-control distribution points, whereas network effects are about joining vectors to create leverage.

I know little about the mathematical nuances of chaos theory, but it offers some relevant philosophical approaches to understanding what network effects are about. Wikipedia addresses how chaos theory affects organizational development:

“Most of the focus on chaos theory is primarily rooted in the underlying patterns found in an otherwise chaotic enviornment, more specifically, concepts such as self-organization, bifurcation and self-similarity…

Self-organization, as opposed to natural or social selection, is a dynamic change within the organization where system changes are made by recalculating, re-inventing and modifying its structure in order to adapt, survive, grow and develop. Self-organization is the result of re-invention and creative adaptation due to the introduction of, or being in a constant state of, perturbed equilibrium.”

Yes, my PC is often in a state of ‘perturbed equilibrium’ but not because it wants to be.

Transparency as a result of efficiency

Advertising Lab pointed to the AdAge article written by Eric Webber who prefers clothed conversations to naked ones:

“It seems to me that all this talk of being “totally transparent” is overrated and takes things entirely too far. What’s worse, it’s just not honest.”

Advertising Lab blogger Ilya Vedrashko adds, “He’s so getting shredded.”

In a loosely related post, Jon Udell notes the network effects of communicating openly (and the benefits of optimizing your keystrokes):

“If your choice is to invest keystrokes in an email to three people, or in a blog entry that could be read by those same three people plus more – maybe many more – why not choose the latter? Why not make each keystroke work as hard as it can?”

There’s a similar relationship betwen form and function where alone each piece of the equation is weaker. Balanced properly amazing things start to happen. Substance and openness need eachother.

Media As A Service

Much like print and tv are becoming marketing vehicles to drive people online, the domain name for an online media service is becoming sort of an abstract utility or maybe just a brand address for media services rather than the real estate upon which the core activity occurs. The service a media vehicle provides matters more than the vehicle itself.

And this isn’t only happening in the content space. Every aspect of the media business is pointing to a services model. Here’s what the key pieces look like, in my mind:

  1. Data is infinitely distributable. All data…not just editorialized words. The RSS standard opened the doors for vast distribution networks, and services like Yahoo! Pipes and Feedburner figured out how to make the distribution methods meaningful. There’s an endless supply of microchunks flying around the Internet, most of them unattached to any domain or URL except as a handy reference point.
  2. Data can be visualized in meaningful ways. AJAX and the many freely available widget kits and javascript libraries such as YUI are rendering these microchunks in the right place at the right time in the right way for people which, again, is not always on a web site. The Internet user experience is no longer held back by the limitations of HTML and the packaging a site owner predefines for their media.
  3. Media is created by everyone. Whether written in long form by a reporter or researcher, captured as video by a mobile phone owner, or simply clicked by a casual web site visitor, expressions of interest are shared, measured and interpreted in many different ways. This results in a seemingly neverending stream of media flowing in and out of every corner of the digital universe.
  4. Distribution technologies are increasingly efficient and inexpensive. Personal media services like instant messaging, blog tools, podcasting and collaborative media services like Wikipedia, del.icio.us, Flickr, etc. are easy to use and often free. Web services and open source software enable people and companies to scale distribution and production functionality for large audiences or groups of users with negligeable costs. Most importantly, these tools enable people to be influential without ever owning a domain.
  5. The distance between buyer and seller is shrinking. There are more and more ways for buyers to find sellers and sellers to find buyers from search engines to recommendation tools to coupon rss feeds, etc. Distributed ad markets like Right Media are enabling marketers and service providers to negotiate both the methods and the value of a marketing message. Advertising can operate as a service, too.

After re-reading this description myself, it looks like I’ve just echoed much of the whole Web 2.0 thing yet again. That makes me think I didn’t articulate the concept properly, as I believe there’s a very different way to visualize how data get created, packaged, distributed and remixed and how the various parts of a media business can be coupled both within the organization and across the wider network. Maybe that’s Web 2.0. Maybe it’s edge economics. SOA. Whatever.

The important thing is to think of how your media business can create for yourself or leverage how others offer Marketing As A Service, Sales As A Service, Operations As A Service, in addition to your editorial and community building efforts. Here’s a quick chart of how a media business might look that hopefully gets the point across:

Staffing Model Source Data Coopted Data Distribution Services
EDITORIAL Reporters, Community Managers, Assemblers (formerly known as ‘Producers’) Original News, Analysis, Columns News Wires, Paid Data Feeds, Free RSS Feeds, Links, Comments, Votes, Ratings, Clicks RSS Feeds, Content API (Read and Write)
MARKETING Customer Service, Evangelists, Event Organizers SEO, SEM, Paid Inclusion, Sponsorships, Staff Blogs Partner Promotion, Customer Evangelist Blogs Customer Help, Usage Policies, SLAs, Traffic/Referrals to favored partners
SALES Sales Engineers, Business Development Customer Data, On-site Inventory Partner Inventory, OEM Partner Services Ad Service API (Read and Write)

We’ve seen Journalism As A Service evolve with a little more clarity, particularly recently. Mark Glaser provides a step-by-step guide on how to structure a community-driven news organization:

“Reach out to the community for bloggers, muckrakers and go-to experts. Each topic area would require more than just reacting to news. The Topic Chief would be sure to enlist as many experts as possible not only to be sources but to also be contributors, commenters, and word-of-mouth marketers. Anyone who possesses the skills that go beyond basic participation can be hired on as freelancers or even full-time staff.”

Similarly, Doc Searls’ “How To Save Newspapers” post also lays out what needs to happen on the editorial side. Here’s step #5 in his list:

“Start looking toward the best of those bloggers as potential stringers. Or at least as partners in shared job of informing the community about What’s Going On and What Matters Around Here. The blogosphere is thick with obsessives who write (often with more authority than anybody inside the paper) on topics like water quality, politics, road improvement, historical preservation, performing artisty and a zillion other topics. These people, these writers, are potentially huge resources for you. They are not competitors. The whole “bloggers vs. journalism” thing is a red herring, and a rotten one at that. There’s a symbiosis that needs to happen, and it’s barely beginning. Get in front of it, and everybody will benefit.”

There is lots of guidance for the newsroom, but all parts of a media business can become services.

For example, the ultimate in Marketing As A Service is the customer evangelist. It’s not about branded banners, as Valleywag points out,

“When paid-for banner ads lead to another site that’s supported by banner ads, you know that something’s wrong. Anyone who relies on that circular spending is asking for trouble.”

Marketing should be about enabling customer evangelists whether your customer is simply promoting your stuff for you or actually distributing and reselling it. Fred Wilson thinks of this in terms of “Superdistribution“:

“Superdistribution means turning every consumer into a distribution partner. Every person who buys a record, a movie, reads a newspaper, a book, every person who buys a Sonos or a Vespa becomes a retailer of that item. It’s word of mouth marketing, referral marketing, but with one important difference. The consumer is the retailer.”

None of this needs to happen on a single domain. The domain chain in any of these actions probably should be invisible to people, anyhow, except maybe to ground the events in trusted relationships.

Now, there are many domains that can create wonderfully useful and valuable destinations once they reach a certain critical mass. Invoking another over-used dotcom jargon word, this is what happens at the head of the long tail. And there are obviously lots of nice advantages of being in that position.

Most media companies want to be in that position and fight tooth and nail for it even if it just means being at the head of a niche curve. But instead of or maybe in addition to competing for position on the curve, most media companies need to think about how they provide relevant services outside of their domains that do something useful or valuable in meaningful ways across the entire spectrum.

Posting articles on your domain isn’t good enough any more. The constant fight for page views should be positive proof of that. There’s a bigger, deeper, longer term position out there as a critical part of a network. Sun Microsystems’ mantra “The Network is the Computer” is still meaningful in this context. What is your role if “The Network is the Media”?

Similarly, is Marshall Mcluhan’s widely adopted view that “The Medium Is The Message” still true? Or, like many have asked about the IT market, does the medium matter anymore?

If we are moving to an intention economy, then those who best enable and capture intention will win. And that doesn’t have to happen on a domain any more.

Are big product launches necessary?

A commenter in Mark Glaser’s recent post on MediaShift about the USA Today redesign sheds light on a problem that Internet companies seem to struggle with a lot.

“I think there may be a lesson to be learned in how to roll these things out. Most of the problems people are having are usability issues that it is nearly impossible for designers/developers who are in the weeds to notice.”

Similarly, Scott Karp asked the right question:

“Could it be that it’s really the social media revolutionaries who “don’t get it” when they assume that what the people want is to rise up against the media autocracy and take control, when in fact what most people want is to get high quality information from a reliable source?”

Unfortunately, even if you do the user research the recommendations of the studies often don’t fit into tight product release deadlines. And the studies often just support product direction rather than fully investigate a user need.

But the problem isn’t the research, it’s the product roadmap. In order to deliver a big punch in the market and cut through the noise, you need to be bold. And big changes that get noticed by big audiences require a lot of planning and complicated scheduling. Big changes are expensive on many levels.

But do you really need a big punch?

Most of my favorite online services tend to evolve organically as if responding to the way people are using the tools. Last.fm, for example, subtely rolls out new features that can occassionally have a significant impact on my usage. They had a pretty crappy web-based player for a long time. Of course, they upgraded it, as I knew they would, and I found it when it was relevant for me to look for it. There’s no amount of marketing they could have done to make me upgrade, and if they had done heavy marketing I might have actually been annoyed with them and considered a competitor.

The online media market is way too fickle to annoy your loyal customers.

But what about reaching new customers? Subtelty won’t win market share.

Admittedly, when you have a hammer everything looks like a nail, but the lessons of the web services market can be instructive. When you empower people to build businesses (or audiences) with your core offering, then you create a multiplier effect and reach all kinds of markets that you might never reach otherwise.

Winning market share in online media can happen by giving people the ability to distribute your offering for you, to create loyal customers for you out of their own customers, to build their own buzz for your product because they have an incentive for it to succeed.

Building the kind of passion required for a distributed customer model like this will never come from big bang marketing. It comes from fostering trustworthy relationships, establishing meaningful brands, proving tangible value, and responding quickly to market changes.

It’s not about noise. It’s about relationships.

I tend to agree with most online media insiders who appreciate the conceptual breakthrough for USA Today online and the balls to act on it, but I would be surprised if any of the positive comments in the blogosphere came from USA Today readers. And if USA Today damaged their relationship with their readers with this redesign, then they have made an incredibly costly mistake.

Online services need to roll out important new features constantly. But the days of hitting the market hard with a new product launch are fading. It works occassionally for major releases of things that are really new and require a reeducation of the market, like the iPhone. But fewer and fewer things fit into that category.

At the risk of invalidating everything I’ve said here by quoting a man who’s social and political beliefs go against just about everything I believe, Eric S. Raymond’sThe Cathedral and the Bazaar” included many astute observations about the way Linux development was able to scale so efficiently. Among the lessons is the classic “Release early and often” mantra:

“In the cathedral-builder view of programming, bugs and development problems are tricky, insidious, deep phenomena. It takes months of scrutiny by a dedicated few to develop confidence that you’ve winkled them all out. Thus the long release intervals, and the inevitable disappointment when long-awaited releases are not perfect.

In the bazaar view, on the other hand, you assume that bugs are generally shallow phenomena…or, at least, that they turn shallow pretty quickly when exposed to a thousand eager co-developers pounding on every single new release. Accordingly you release often in order to get more corrections, and as a beneficial side effect you have less to lose if an occasional botch gets out the door.”

Product Managers and Marketers need to bake these concepts into their thinking as well or risk missing the wider opportunity, the ultimate in marketing and distribution efficiency — customers as partners.

Photos: marble2, ccarlstead

A magazine I would love to read

There’s a magazine that I’d love to read if someone published it (yes, the print kind). Of course, it’s about the Internet. It’s about the stack that makes up the Internet, the platform or, as many people are calling it, the Internet Operating System. It’s mostly technology. But it’s a little bit business. And it’s definitely artful.

It’s not Business 2.0 or Red Herring. It’s not The Industry Standard, though I’d be happy to read that again, too. Those were/are too business-focused and often misunderstand the wider impact of many breakthroughs.

It challenges the people in positions to change things to make changes that matter. It exposes the advances in the market that have negative repurcussions to the Internet as a platform for good.

It’s critical and hard-hitting. It’s accurate. And it is therefore trusted and respected.

It isn’t first to report on anything. It might even be last, but it gets the story right.

It dives into services like Pipes, EC2, and Google Apps. It analyzes algorithms, data formats, developer tools, and interactive design. It studies human behaviors, market trends, new business models, leadership strategies and processes.

It’s not about startups, but it may be about why VCs like certain startups. I love the fact that Brad Burnham of Union Square Ventures disclosed the broader motivations for investing in AdaptiveBlue:

“We are particularly excited about the prospect of AdaptiveBlue developing tools that allow users to build the semantic web from the bottom-up to fill in the gaps and correct the top-down approach when necessary.”

This magzine should be printed monthly with lots of possibilities online that may actually be more successful in the long term. (I can imagine the print magazine turning into a sort of marketing vehicle for the web site. )

It includes longer deep-dive articles that have been throughly researched and copyedited. The editors are paid very well because they are experienced and talented. It also includes samples from the blogosphere and insights from contributors and participants who care deeply about the subject. There are intelligent interviews of people who are innovating and actually doing important things. There are insightful case studies of both the methods and results of certain technology breakthroughs. And there are columns that remind us to keep it real.

What I want from a new magazine about the Internet Operating System is to understand the technology breakthroughs and their meaning in the conext of the history of the Internet. I want to know what we can learn from art and innovation online to understand what lies ahead. The business model breakthroughs matter hugely, but I think they often matter as a result of an innovative technology rather than serve as a driver.

How is the Internet as a platform, operating system, network — whatever you want to call it — evolving? Who and what is influencing change? What are the trends that indicate this progression? How do new online developments impact communication, governments and social organizing principles?

Of course, a lot of this is out on the web in bits and pieces. But I’m too lazy to go through my entire feedreader and follow all the links to all the interesting stories out there. Maybe someone could invent a personalized and distributed Digg that surfaced what mattered to me more efficiently. But even then, I’d still pay a subscription fee and happily browse through endemic advertising for someone to assemble something thoroughly thought through, designed nicely and printed on my favorite portable reading medium — paper (recycled, of course).

And I’d read it in part because I would know everyone in the business would be reading it, too. At least, I suspect I’m not alone in wanting this…?

Membership has its privileges

Mark Glaser asks his readers this week to submit the answer to the following question:

“What would motivate you to contribute to a citizen media site?”

I can’t imagine that anyone is going to be able to answer that question in an interesting way. It’s the wrong question. It’s kind of like asking why do people sing at church? Or why do people meet their friends at the pub?


Photo: -bartimaeus-

If the church asks you to sing, you sing. If your friends tell you to meet at the pub, you go to the pub. The community and purpose of doing things together is already implied, so you do whatever everyone else in that community does if you want to be a part of it.

Jon Udell starts to dig into the critical mass hurdles for social networks in a recent post where he quotes Gary McGraw saying:

“People keep asking me to join the LinkedIn network, but I’m already part of a network. It’s called the Internet.”

The real question is not about getting people to do things. There are too many things to do and too many people to socialize with in a day already.

The question is about forming meaningful communities and the kinds of things that will help a community flourish. Meaning comes in millions of different shapes and sizes, but there are lots of precedents in terms of ideologies, aesthetics, and methods.

News, for example, is inherently about being first to report on an event. Successful community-based news sites enable people who care enough about a topic to either be the first to report on it or be clued in before less speedy outlets pick up on something. It feeds into a competitive and sometimes gossipy human nature. Just ask your best reporters why they became reporters. Digg appeals to the reporter in all of us.

I used to attend a charity event called Rebuilding Together where groups of people would assemble and fix up houses and schools around the city of San Francisco. There was a core team who selected applications for fix-it team deployments. Then there was a leader who would drive the work to be done by each team at each site. On the chosen date, people would jump on a project and invite their friends to join. It was impressive to see what a focused group could accomplish in a day, fixing plumbing, painting, cleaning, rebuilding fences, etc.

Why did people do it?

There was a purpose. We were helping people truly in need. The commitment was lightweight. It was 1 day a year. It was well organized. I didn’t have to debate with people about how things should be done. The result was impactful, a total overhaul of a building. It was fun. I had a laugh with my friends and met new people.

Often when people start asking how you get to critical mass, they’re losing the plot. Sure, it would be great to worry about scaling a site rather than fighting for a Digg. But if you and your community are doing something unique and valuable, then size really shouldn’t matter. And in many cases, it makes sense to make the community exclusive and smaller rather than bigger and diluted, anyhow.

The question then becomes, “Are you offering a service that a lot of people find unique and valuable?”

I think a lot of publishers fail to understand the size of a potential market, what’s unique about an offering, and the value of that offering to the people who do actually care about it.

Then there’s also the issue of recognizing what you can actually deliver. You have to play to your strengths.

Yahoo! Answers is a good example of that. The idea of getting immediate answers to any question you can think of from real humans is outrageously ambitious. There are lots of ways to get answers to questions out there. But Yahoo! played to its strengths to get it off the ground, then it just took off. It’s easy. It’s fun. It works. And, therefore, it’s meaningful. And now there’s nothing like it out there anywhere.

Of course, not everybody can point a firehose of traffic at a domain, but there are plenty of cases where Yahoo! failed to create a community by pointing a firehose of traffic at it.

So, what makes a meaningful community that has a definitive purpose? Yeah, well, that’s an answer you can get from Cameron Marlow, danah boyd, and a lot of people a lot smarter than me.

Though perhaps this is all just echo blogging and the real question gets to something people already understand. Maybe the question is simply: “How do you make membership in your community desirable?”

Wikipedia defines “privilege” as follows:

A privilege—etymologically “private law” or law relating to a specific individual—is an honour, or permissive activity granted by another person or a government. A privilege is not a right and in some cases can be revoked.

I think the answer is in there somewhere for everyone who is struggling to get their community to do stuff.


Photo:Manne