Archive for July, 2008
By Kyle Austin
By Kyle Austin
Had the opportunity to share a quick chat and drink with Richard Edelman, CEO & President of PR-giant Edelman and Keith Reinhard, former CEO of advertising giant DDB yesterday evening at Brainstorm: TECH.
The two industry giants were worth a good laugh as they playfully chuckled about stealing each other’s clients at the conference.
Richard was chatting me up on the reason to be global and why PR is a scalable industry. He still feels like there is a true advantage in being a massive global agency over a mid-size shop.
Keith on the other hand couldn’t stop talking about DDB’s latest project with McDonald’s in reviving the “Big Mac” jingle, with its new digital campaign. Richard and Keith both had to actually let me know what the jingle was in the first place as it orignated in 1974, 9 years before I was born.
To celebrate the Big Mac’s 40th Anniversary, DDB helped with a campaign that calls for U.S. consumers to write their own songs using the exact words of the jingle, and submit them to a contest on MySpace.com.
Not only is the campaign succeeding by engaging in brand dialogue with consumers, but it also garnered coverage in the New York Times – Results that both men can appreciate.
BTW: Richard told me he was going to have a blog post up this morning at 6 a.m. (As he is one of the featured live bloggers at Brainstorm: TECH). Where is it Richard? I have five up already.
July 22nd, 2008
By Kyle Austin
By Kyle Austin
I took in the “How Net Content will be Monetized Round Table (Wedding Table) at Fortune Brainstorm: TECH this morning. Hosted by Fortune’s Adam Lashinsky the round table included Greg Waldorf, CEO of eHarmony; Neil Ashe, President of CBS Interactive; Robert Glaser, CEO of RealNetworks and Mike Volpi, CEO of Joost.
Here are some of the excerpts from the round table:
Adam Lashinsky: Good morning, we are going to be talking about “Net Monetization.” This is not the format that we planned on doing for a breakfast round table (straight table facing the audience). We had so many people sign-up we decided we’d do something like a head table at a wedding with you being the guests. However, we’re not going to talk to you we are going to talk with you.
Robert Glaser, President & CEO of RealNetworks:
- 600 million in revue last year. 2/3 of monetization comes through consumer purchases. 1/3 is from net carriers.
- Our goal is to create a balance in revenue streams.
- You look at what Google does with only one revenue stream and may think we are taking the wrong route, but you have to diversify.
- Behavioral targeting is an major opportunity, but there doesn’t appear to be an Overture type idea out there that goes beyond search.
Greg Waldorf, CEO of eHarmony:
- eHarmony was founded 8 years ago to be a series match making site. It was a crazy idea at the time because the industry was dominated by the photo-clicking approach.
- We recently released Harris Interactive numbers, which found that 236 people marry each day (on average) through eHarmony.
- This has allowed the business to become very successful and over 200 million in revenues last year.
- Lashinsky - ”My best friend met his wife through eHarmony. He’s a serious guy, so I guess he needed a serious relationship site.”
- 96 – 97 percent of our revenue comes from subscriptions.
- Match.com and ourselves are really the biggest players in the space.
- We want to keep a “happy” churn rate – given our goal to match couples in serious long-term relationships (which leads to them leaving site). Usually takes a couple of months for that to happen.
- You can’t just create great content first and then say we’ll figure out how to monetize it later. I think people have this belief that good content will easily translate into ad revenue and that is just not the case when you are looking at scale.
Mike Volpi, CEO of Joost:
- Joost was created in October of last year and has slightly under 1 million unique visitors.
- We have a revenue share model that goes back to content owners.
- We’ve really been the first online video destination to use the 30-second in-spot ad that is seen on TV.
- Music has been really hard to monetize on our site because its hard to understand interests in music to target relevant ads at users.
President of CBS Interactive:
- Earlier this year I was the CEO of CNET Networks and now I am the President of CBS Interactive after the close of our sale to the CBS Corporation.
- We reach the 8th largest Internet network in the world.
- 80 percent of business is ad supported through sponsorships or advertisements.
- About 20 percent of our business is in major countries in Europe.
- We’ve found that you can’t out grow your category. The growth of advertising revenue has grown across the Internet but there is a cap in how it can grow within certain markets on the Internet.
- We’ve made mistakes along the way. We never could monetize Webshots. We could sell certain sponsorships but not for each individual page view.
Disclosure: eHarmony is a client of the Racepoint Group
July 22nd, 2008
By Kyle Austin
By Kyle Austin
I was out socializing on the patio at Brainstorm: TECH last night when Michal Lev-Ram of Fortune snuck up on me to ask me what I had in my pocket. On a patio full of “top-executives” I obviously had the least cool technology in my jeans.
Somehow my broken Motorola Q (this happens once a month) and my (actually I borrowed/stole this from my colleague Stephen Russell) 1980′s tape recorder made it into the segment. Unfortunately, so did I. Clearly the lesson here is to not go on camera after a 6 hour flight with no sleep the night before.
Check out the video here.
July 22nd, 2008
By Kyle Austin
By Kyle Austin
A few other notes from the first few hours at the Ritz Carlton in Half Moon Bay, CA:
- You can go home again: Just ran into Erick Schonfeld of TechCrunch in the lobby. Schonfeld was chatting it up with some of his former colleagues from Time Inc. He previously worked with the now defunct Business 2.0, which was under the Time Inc. umbrella.
- Sometimes you can’t leave home: Sir Martin Sorrell, CEO of WPP, didn’t make the trip to Brainstorm: TECH after all. He was a last minute drop from the Thinking Globally panel. Kirkpatrick made a slight joke (not really) that he was home in the U.K. closing another major acquisition. The truth is, he is. Word is that WPP will win the bid for Taylor Nelson Sofres.
July 22nd, 2008
By Kyle Austin
By Kyle Austin
The second speaker / panel is underway at Brainstorm: TECH with a Q&A between David Kirkpatrick and Jeff Bezos of Amazon. A few quotes from Jeff that I picked up below:
- I love the fact that I can read one-handed (With the Kindle). As soon as you read with the Kindle for awhile it’s hard to go back to a regular book. It’s also a lot quieter to read with the kindle when you’re laying next to your spouse in bed.
- I believe that we are at the dawn of a new industry with the Kindle.
- We had a microwave oven that would beep every minute until I turned it off. I called it a self-important device.
July 22nd, 2008
By Kyle Austin
By Kyle Austin
RaceTalk is live at Fortune Brainstorm: TECH where the first panel is wrapping-up and David Kirkpatrick is getting mad that the audience is turning the conversation to Tesla.
Marc Benioff of Salesforce.com made an interesting statement on the first panel before it changed tunes saying:
“Web 1.0 = Transactions, Web 2.0 = Collaboration, Web 3.0 = Innovation.”
Already hearing some buzz in the press room from bloggers that are complaining that they can only watch through the live feed and don’t have access to the Ballroom.
Kara Swisher of BoomTown just stopped into the press room (even though she has a pass to the Ballroom) and noted:
“We don’t do that at D”
July 22nd, 2008
By Ben Haber
In yet another lesson of be careful what you put on Facebook, one college student in Rhode Island found that a picture a friend uploaded from a Halloween party is going to cost him – two years.
Just two weeks after 20-year-old Joshua Lipton seriously injured a woman while drunk driving, he attended a Halloween party dressed in a prison uniform, and the words ‘jail bird’ written on the uniform in place of his name.
A friend at the party posted the picture onto Facebook, where all of Lipton’s friends, along with the prosecutor for his DUI case, could see it.
Jay Sullivan, the prosecutor involved in Lipton’s case, used the picture in court as evidence that Lipton was an “unrepentant partier” who “lived it up” while the female victim of the crash remained in the hospital. The judge at Lipton’s trial agreed with the prosecutor, and handed out a two-year prison sentence.
While the picture is not 100 percent responsible for Lipton’s 2-year sentence, Judge Sullivan did say that is affected the his decision: “I did feel that gave me some indication of how that young man was feeling a short time after a near-fatal accident, that he thought it was appropriate to joke and mock about the possibility of going to prison.”
While some may argue that Lipton got what was coming to him for seriously injuring the woman he crashed into, this also offers another opportunity for others to learn from this mistake. So next time you’re thinking about putting something that could be detrimental to yourself or someone else on a social network like Facebook, MySpace, or YouTube – don’t.
July 21st, 2008
By Guest Author
“Broadcasting is really too important to be left to the broadcasters”. So said Tony Benn, Member of Parliament, to constituents in 1968. That same year, the Free Communications Group (FCG) was founded to demand “democratic control of all media”.
Lets skip the next forty years’ analysis of broadcasting motives and actions that so preoccupied these politicians, broadcasters and journalists. In 2008, convergence has emerged as a force of nature, irrevocably changing “broadcasting” globally, and the FCG might just be smiling if it still existed.
I put “broadcasting” in quote marks because I decided, as chair, to start last Thursday’s Convergence Conversation, titled “Is broadcasting dead or merely taking a break?“, by seeking to define broadcasting. Not as trivial a task as it sounds, rather a critical task if the 65 conversationists who attended the event hosted by BT Media at BT Tower were going to reach a conclusion.
The meaning of broadcast
The Oxford English Dictionary defines the verb “broadcast” as “transmit by radio or television”, and “tell to many people”. And for American English speakers Merriam-Webster offers “to make widely known” and “to transmit or make public by means of radio or television”.
So the same word applies to both the technology employed and the end result; the “radio or television” transmission, and the one-to-many communication achieved. I guess this attribution of dual meaning is to be expected given that “radio or television” technology was the only way to communicate one-to-many for almost the entire twentieth century. This technology consisted RF transmission from the 1920s and cable from the 1940s.
The broadcast industry supply chain
This isn’t an academic paper, so we can simplify the (commercial) broadcast industry supply chain as one that aggregates audiences with content that informs, entertains and educates so that they can also be hit with adverts. The advertising revenue should cover all costs with a bit left over; the profit. So the chain goes something like:
1. Produce or commission great content
2. Estimate how many people will watch it
3. Sell ads to go alongside the content
4. Transmit the content and ads
5. Grow the audience and repeat
The disruption of the broadcast industry
Convergence has wrought huge change on the broadcasting industry.
Traditional broadcasting technologies are no longer the sole means of achieving one-to-many communication, and they struggle with any form of many-to-many communication. Mobile and Internet protocol based technologies are the new contenders.
The broadcasters’ revenues pivot almost entirely on marketing directors’ willingness to pay to advertise on TV and radio. Yet new technology allows viewers to skip broadcast ads and has created competing new opportunities (eg, the Web and mobile) for marketers to reach out to their target audience. In other words, new channels are purported to offer comparatively more effective and more measurable marketing outreach, so there is fierce competition for the marketing budget that has underpinned the broadcasting industry to date.
Will broadcasters survive?
As for all dynamic systems, the answer to this question hinges on the relative rate of change of the core characteristics and parameters in the mix. To reduce it to the simplest form:
If the rate at which advertising spend is diverted away from traditional commercial broadcasting exceeds the rate at which traditional broadcasters can adapt and capture some of the new kinds of marketing spend, they’re dead (or require some serious bridging capital).
The adaptation required can be considered to fall into two camps. Firstly, there’s the “OMG! We better get monetising the new channels quickly!”; and secondly, there’s the “What can we do the new channels can’t do, and how can we leverage this differentiation?”
The first of these, getting into the new channels quickly, is exemplified by traditional broadcasters’ uptake of new technology and media. The award winning bbc.co.uk and iPlayer. Time Warner’s award winning cnn.com. BSkyB’s Sky+ box.
And Jon Mobbs, BT Media Head of Strategy, clearly articulated at our event when traditional broadcasting wins hands down. No other technology is as efficient at reaching hundreds of thousands of people as traditional broadcasting. No other technology is as adept at covering live events. And none of the new technologies can yet warrant the same quality of service.
It appears very unlikely now that any broadcaster from the twentieth century can thrive unevolved. Moreover, no one organisation can own the entire supply chain. They may offer services throughout the supply chain, but the chain fragments, shifts platform, shifts place and gets mashed-up.
In my recent ebook, “The Social Web Analytics eBook 2008“, I refer to a future we labelled in 2005 myChannel…
The user (aka the recipient of news and information, the listener, the viewer, the inter-actor) has been empowered to set the schedule. It’s what they want, when they want it and how they want it. Video on demand. Personal video recorders (PVR). Newsfeeds (RSS). Alerts. Lifestreaming. Podcasts. Web radio. Mobile TV.
To all intents and purposes, we’re just a short hop away from everyone having their own customised channel, a channel tailored uniquely from your own subscriptions, your friends’ subscriptions and recommendations, and automated “if you like that, you’ll like this” discovery.
Given that broadcasters’ revenues lay in the hands of marketing directors, it’s worth understanding what myChannel means to them:
Considerably more fragmentation of the target audience of communications campaigns
Less precise timing of delivery
Increased opportunity to provide niche information
Less certainty of how each recipient is receiving the information
Greater opportunity for innovation in inviting and securing interaction
The need for new mechanisms for gauging campaign success.
The broadcaster as brand
Attempting now to leap swiftly from analysis to synthesis, it appears there may be an ever increasing emphasis on broadcasters’ abilities to transmute into lifestyle brands.
They need to pick their fight (the parts of the supply chain they wish to excel at) and their audience (who’s going to buy into their brand). Both the supply chain and the audience are too diverse and too complex for a broadcaster to try to be all things to all people, and too noisy not to aspire to reaping the benefits of lifestyle branding.
And, if this isn’t sitting on the fence, the right broadcasting technology will simply be defined as the right one at the right time.
Live Earth concert = traditional broadcasting tech. Live Earth’s ongoing SOS campaign = Web and mobile.
First airing of Lost = traditional broadcasting tech. Subsequent episode sales and associated community engagement = traditional, Web and mobile.
According to the Free Communications Group, “newspaper, television and radio should be under the control of all people who produce them.”
Whilst this point of view was asserted in the 1960s to eradicate Government politicking of the BBC, the assertion repeated in 2008 takes on new meaning and fresh energy. The viewer has always been able to vote with the off button, or by switching channels. Now they can engage in programming, vote for winners of talent shows, develop and vote for plot ideas, and even create and publish their own content.
In conclusion, broadcasters must be adaptable and nimble. They must develop compelling content and services, create enticing opportunties for engagement, and adopt the right channels at the right time. No small task, but as the next Desperate Housewives or X-Factor won’t be user-generated content (a small matter of budget), there’s plenty of opportunity for today’s broadcasters to thrive tomorrow.
History of British Broadcasting, Asa Briggs, Oxford University Press, 1995, p787, ISBN:019215964X
The Campaign for Press and Broadcasting Freedom, review of Des Freedom’s book “Labour & Television Policy”
“News from nowhere? A review of Asa Briggs, The History of Broadcasting in the United Kingdom–Volume Five: Competition 1955-1974“, Issue 68 of INTERNATIONAL SOCIALISM JOURNAL Published Autumn 1995
Photograph by Paolo Margari.
July 21st, 2008
By Kyle Austin
By Kyle Austin
Tomorrow marks the kick-off of Fortune Brainstorm: TECH (AKA: David Kirkpatrick’s conference) in Half Moon Bay, California. Many in the industry believe that it will be the best technology conference of the year and with a speaker list that includes Mark Zuckerberg, Eric Schmidt, Nicholas Negroponte and even Neil Young (yes the musician) – who can argue.
Fortune has turned the conference circuit into big business and gives the conference major editorial billing thanks to Kirkpatrick’s influence over the magazine. Fortune’s special Tech issue, on newsstands now, takes a deep look at those that will be on hand at the conference. RaceTalk got a chance to sit down with Kirkpatrick late last week to preview the conference, chat broadly on the technology industry and discuss his upcoming book on Facebook.
RaceTalk: So is this the calm before the storm (Brainstorm: TECH)?
DK: It’s pretty calm. The problem we have now, so far (knock on wood, that it’s not people dropping out as speakers), are people who forgot to register and are now begging to come as attendees.
We have a PR person who says “Our CEO (of a fairly major tech company) wants to have an in-house PR handler come with him.” I’m thinking this guy (CEO), isn’t even a speaker and I look and he’s not even registered as an attendee.
It’s great though, they all want to come. They sign-up, then they back out and then they want to come again.
RaceTalk: Well it’s good that I got on the list early. I’m excited to take it all in next week. I’m really looking forward to your conversation with Nicholas Negroponte of One Laptop per Child and the “How Net Content will be Monetized” round table that eHarmony’s CEO Greg Waldorf will be on with Neil Ashe of CBS Interactive and Robert Glaser of RealNetworks.
DK: That’s great. Glad you’re going to be making it out.
RaceTalk: So, for your last “column” you asked everyone that was coming to Brainstorm: TECH to discuss their thoughts on the most exciting innovation in the technology space, what their biggest hope or fear for the future is / how tech relates to it and what should the top priority be for the next U.S. President. I was hoping you’d take a stab at answering your own questions for me?
DK: Did you see their answers?
RaceTalk: Yes, they had some great answers.
DK: I continue to think that social networking and social media at large is the biggest innovation over the last twelve months. The addition of automation to human communication has really occurred over the last five years but it has really been significantly augmented over the last 12 months.
Let me bring a little twist to that as well. Since so many of the Brainstorm: TECH attendees did say that the iPhone was the biggest innovation over the last twelve months, it also ties in. I think what you are seeing with the applications on the iPhone is a huge innovation. I’m sure more of those will be social applications that will incorporate location into the communication which they facilitate between people. Basically the iPhone 3G has three basic qualities: it’s 3G, it has GPS and it has applications – that are very easy to download. It’s the first time you’ve ever had a really easy way to get sophisticated applications on a mobile device, period. That is a huge leap forward from the first version of the iPhone, which only had a very constrained group of applications – or they were put on there illegally.
RaceTalk: I heard they sold 1 million last weekend, did you get one?
DK: I bet that is true, I got one.
Social networking, which will then be combined with the ability to put applications on mobile devices – In the new simple way that the iPhone 3G demonstrates – that is big. Social networking is different because the software makes connections for you (with other people) when it’s working in its highest level of sophistication – as it does on Facebook.
RaceTalk: What is your biggest hope for the world and how does technology fit into it?
DK: My biggest hope for the world is that the poor of the world, who are increasing their aspirations for a better standard of living, will find technology tools that will help them make a rapid transition from illiteracy, economic health and information deprivation. Technology will make a big difference there. Mobile technology and wireless technology are making a huge difference there already and are very promising.
RaceTalk: What should be the top priority for the next U.S. President? – That was another one of your questions.
DK: It was interesting – if you read my column – how many of those priorities sounded like they should be the top priority. It only makes you realize how many priorities have been abandoned or mishandled by our current administration.
I would say the single biggest priority is thinking through the integration of the U.S. with the rest of the world and conveying that understanding to the American people. I think the American people (In general), are really misinformed about the depth of their own economic integration with the rest of the planet – which is already real. However, most Americans deny or disregard it.
RaceTalk: Let’s get to your book. Can you tell us a little bit about it? It’s called the Facebook Effect from what I’ve read and aiming for September of 09’?
DK: That is a bit optimistic. I’m hoping to get it out in the fall of 09’. The book industry, its wheels turn slowly. Simon & Schuster is publishing it. Got the signed contract in hand – just got that yesterday – so that’s very exciting. It is going to look at the history of Facebook but the real intention is to explain what I started to describe earlier. I want to illustrate how there is a new kind of communication arising, as a result of what is popularly described as “Web 2.0” or “social media,” and that it is profoundly transformative.
It takes us beyond the era of email to something new. It is the new killer application for the Internet. The killer application up to now has been email and the Web. Social media uses the Web to create a much more sophisticated set of connections between people that allows a whole new set of things to happen in society between people; which I don’t think is yet fully appreciated. I think Facebook is the product or business that is most fully realizing that.
RaceTalk: I saw your one piece on Jeremy Burton and Serena software and how they are using Facebook for a collaborative R&D culture. Are there other ways you’ve seen so far in your research where companies are using Facebook to affect the bottom line? Different types of social networking?
DK: Social networking as a concept still goes against the grain of the impulses of most modern managers. For all the verbiage to the contrary, they are still oriented to the top-down hierarchal structure. Only the smartest companies are willing to experiment with the true empowerment that social media represents. I think you will start to see that companies are performing better when they empower employees with these new tools. Whether it’s Facebook or something else that makes it happen – I don’t know.
The single best example that I’ve seen on how Facebook creates fundamentally new opportunities for society was the demonstration in Columbia last year, where 4.8 million people went into the streets to protest FARC – in the largest demonstration in the history of the country. It happened one month to the day the first message was put on Facebook by a simple 30-something programmer who had the idea. He got it all started on Facebook by himself and it mushroomed into 4.8 million people in the streets one month later – and that’s largely due to the viral power of Facebook.
RaceTalk: Wow that’s interesting. So you also said that you’re going to take a look at the history of Facbook. So are Mark Zuckerberg and Sheryl Sandberg giving you carte blanche access to the company?
DK: I have total access and they are very much behind it and excited about it. It’s not their idea, it was my idea, but they are enthusiastically helping and participating.
RaceTalk: I was talking with Steve Levy a couple days ago and he’s pursuing a book on Google – will you be comparing notes on the access you’re getting?
DK: I’m sure I’ll get much better access.
RaceTalk: I’ve seen some of your latest columns on Microsoft and moving on after Gates’ retirement. It was interesting that you were taking the stance that Microsoft is still better positioned in the marketplace as a technology company then Google.
DK: I think Microsoft is a more successful well-rounded technology business then Google is. Google is a stock market phenomenon on one brilliantly managed business. But that business is not impervious to competition. Just like in all things, diversification is the best way to avoid risk. Google does not have a diversified risk portfolio. Microsoft does. Given the respective valuations, Microsoft is a far better risk for an investor (in my opinion) then Google. I think that Google is brilliantly managed company, managing a marketplace for advertising using search. They’ve done an extremely good job maintaining that.
However, I don’t think they have proven themselves to be a durable, continually innovative technology company – at least not yet. Microsoft has been challenged on the innovation front but they have succeeded in creating a wide variety of new successful businesses.
RaceTalk: I know we had talked about this awhile back, and your thought was “There is no way Microsoft is not going to get Yahoo!.” Do you still feel that way?
DK: I wouldn’t say there is no way. I would say they desperately want it and predicted they would get it. I wouldn’t’ say there is no way. Microsoft has mishandled the process so badly and it has been such a comedy of errors for Microsoft, Yahoo! and now Carl Ichan. I wouldn’t say anything is easy to foresee. They’re doing such a bad job managing this negotiation. Microsoft badly wants Yahoo!’s search and they need it.
RaceTalk: Out of all the people that are going out to Brainstorm: TECH, who are you most looking forward to running into or interviewing.
DK: I’m not interviewing him, because I generously passed him along to my bosses’ boss, but Neil Young is who I’m most excited about. John Huey, Editor-in-Chief at TIME, is interviewing him and he closes out the conference. You knew that right though?
RaceTalk: I think I knew that.
DK: Out of the ones I’m interviewing I’m excited for all of them: Jeff Bezos, Eric Schmidt and Nicholas Negroponte.
RaceTalk: Cool. So in general you are excited about Brainstorm: TECH and it sounds like you are planning to make this an annual thing?
DK: I think it is the best technology conference of the year and I think that will be proven true.
RaceTalk: Sounds like it’s well on its way. So you’re taking a leave when you get back for your book?
DK: Yes, I’m taking a leave August 1st.
RaceTalk: Well thanks for your time David, good luck next week and hopefully I run into you there.
DK: Thanks Kyle.
Disclaimer: One Laptop per Child and eHarmony are clients of the Racepoint Group.
July 20th, 2008
By Guest Author
How do you know when a technology has moved from hot to foundational to cultural icon?
Well, when they start to issue postage stamps in your honor – the technology has probably entered cultural icon status.
That’s the case with One Laptop Per Child – the non-profit organization that has single-handedly changed the way the world views inexpensive computing (especially laptop computing).
And now the organization and its amazing XO laptop has been immortalized on a postage stamp in Uruguay (see the image above). Uruguay has been one of the early adapters of the XO (they ordered 100,000 laptops back in October). Uruguay’s President Tabare Vazquez has been so committed to the program and the prospect of providing XO computers to the school children of his country that he has now honored OLPC with an official stamp.
Full disclosure: Racepoint Group has been working with OLPC for the last 18 months helping the organization with communications strategy and public relations. It has truly been a labor of love.
July 18th, 2008