Category: News (page 40 of 1505)

Earlier in the week, I read articles discussing Facebook’s $100 billion dollar valuation. There are two ways to look at Facebook. The glossy view is that Facebook has 500+ million users and that the company controls a significant share of Internet traffic. This traffic will be monetized and make it the largest advertising and marketing company in the world.

The not-so-glossy view is that Facebook is nothing more than a repackaged version of America Online (AOL). At its peak, America Online had 30 million paying subscribers and a market cap of $240 billion. While Facebook has a lot more subscribers, each user is not paying $15-30 per month. Not only does a subscriber model provide real revenue, but it means you have 30 million paying users. People paying for a service are real users. In contrast, Facebook is free and we therefore have to question how many of the 500+ million are actually real users.

Facebook-AOL Comparison

Isn’t Facebook just an evolved version of AOL?

• AOL keywords v. Facebook pages
• “Become my AOL friend” v. being a Facebook friend
• AOL mail v. Facebook mail
• AOL gaming v. social gaming
• AIM chat v. Facebook chat

Facebook-Google (GOOG) Comparison

We can talk about users and social graphs, but ultimately Facebook is a marketing and advertising company. All of the features and utility the service provides is a means to collecting advertising dollars. According to E-Marketer, Google’s share of online advertisements in 2011 is 43.5%. Facebook is 7.7%. Facebook has not even eclipsed Yahoo (YHOO) (11.9%). In 2012, Google’s share will grow to 47.6% and Facebook’s share will grow to 8.8% (both in part at the expense of Yahoo).

Not only is Facebook a small player compared to Google, but it has not even eclipsed Yahoo — a company valued at $20 billion. Granted, Facebook has a better trajectory than Yahoo but you are paying 5x more for the hope of growth.

Google IPO-Facebook IPO

The Facebook IPO will be four times the valuation of Google’s $25 billion offering. Let’s not forget what Google accomplished. Google transformed the web and advertising. Google’s pay-per-click advertising caused an epic shift from conventional advertising mediums to online advertising. Whether it is good or bad, Google created the “link economy.”

Let’s not focus on Adwords, Android, Google Docs and other Google products. All of these products have one common goal. These products make Google the largest advertising and marketing company in the world. Will we be able to say the same about Facebook? Will Facebook as a product make it the largest advertising and marketing company in the world? Isn’t Facebook really just another advertising company chasing Google? Putting the service provided aside, Google essentially invented online advertising. Google created a new revenue stream. Facebook is a different product than Google, but as a business model it is chasing the same dollars.

Google at $25 billion offered buyers of the IPO a ton of room for growth. Travelers (TRV) today is a $25 billion dollar company. Even back in 2004, it was quite plausible to believe that Google could be larger than Travelers. But when the valuation starts at $100 billion, it is more difficult to make money. Intel’s market cap is only $115 billion. Cisco’s market cap at $82 billion would be significantly less than Facebook. McDonalds(MCD) is only an $84 billion dollar company. Once we start talking $100 billion valuations, we are talking big money. To get a double in Google, the company only needed to turn into a Home Depot (HD) ($54 billion). To get a double out of Facebook, it has to turn into a $200 billion company. There are not very many $200 billion companies.

Google itself only has a market cap of $163 billion. To make big money on the IPO, Facebook will need to be bigger than Google. Other interesting comparisons include GE ($197 billion), Walmart (WMT) ($182 billion) and IBM ($197 billion). And all this has to happen just to get a double.

Facebook v. Other IPOs

At least with some of the other IPOs out there it is possible to make money if the vision of the company plays out. I call it the dream factor. For example, LinkedIn (LNKD) is a $7 billion dollar company. If everything goes right for it, getting a double or triple from its current price is possible. If it triples, it would still be only worth as much as Yahoo. I’m not endorsing LinkedIn or any other stock, but at least it has the dream factor.

More Like Google or Yahoo?

At $100 billion, the risk-reward ratio for buying into the Facebook IPO is unfavorable (and retail buyers may pay much more than that). Personally, if I am taking the risk of buying into an IPO, I want a lot of upside potential. When you start at $100 billion, getting a double is tough. And this assumes I’m wrong that Facebook is really just an evolved version of AOL without the market dominance of Google and without the subscriber base AOL had. If I’m wrong, getting to $200 billion will still be tough (assuming normal market conditions). If I’m right, Facebook may be much more similar to Yahoo ($20 billion) than Google ($163 billion).

While search marketing has often been lauded for its killer ROI and – especially on the paid search side – its incredible capacity for fine-tuning and testing, its cousin on the display side hasn’t always attained the same standard. Perhaps because of past miserable failures, some advocates for the display side simply issued it a different rulebook. Why should it be expected to “perform,” when it clearly can’t?

But what if it can? What if there’s a good chunk of the display world that needs to be tested, optimized, iterated, and forced to run the same gauntlet as “performance media” like search advertising and affiliate marketing?

Too often, display advertising has been coddled like a supermodel: allowed to swan in late to the shoot; paid exorbitant sums for lackadaisical performance…as long as it looks good, someone will go to bat for it and it will get a repeat engagement somewhere.

Paid search ads, meanwhile, have been like James Brown, the “hardest-working man in show business.” Singing, dancing, sweating…there isn’t anything paid search ads won’t do to make the paying customers happy.

Chalk it up to the guilty consciences of publishers and their trade group partners who secretly don’t think their display advertising is capable of performing. As a result, they overcompensate with elaborate measures of brand lift and other indirect metrics. Spokespersons like comScore’s executive chairman, Gian Fulgoni, are congenitally squirmy about true performance measures. Keynoting recently at an IAB Canada industry event, Fulgoni thundered that it’s time we stopped counting the click as a meaningful measure of ad performance.

The click! Call us crazy for still believing that a click may be the first step in getting someone to, you know, visit your website.

Ironically, speakers following Fulgoni earnestly reported not only impressive CTRs (click-through rates), but on-target CPAs (cost per acquisitions) on recent campaign efforts. Recalling the keynote, they’d hasten to add “with all due respect to Gian Fulgoni’s point…in a lot of ways we agree that performance measurement needs to get beyond the click.” Sure. But there has to be some reason you brought your CTRs to the table.

For avid search marketers, the most comfortable place to start in a renewed quest to expand out to display advertising is often the Google AdWords Display Network (formerly called the content network). The principles (and the cookies served to those who visit your site after the click) have much in common with your search campaigns in AdWords.

Two types of advertisers today are paying particular attention to display ads as an additional means of customer acquisition.

1) Traditional e-commerce players, steeped in the measurement of ROAS (return on ad spend) on all segments of their search keyword marketing.

It’s amazing that a significant amount of content has evolved on the web that appears well-aligned with the vast universe of e-commerce sellers. It’s not as easy to find high-intent prospects reading content as it is when they search directly for your products. The ecosystem has been self-optimizing to a degree because relevant publishers are increasingly incentivized through improving AdSense revenues, and irrelevant ones’ earnings are dropping.

These websites have to build their audiences somehow. It doesn’t come out of thin air. Well, because they offer large amounts of relevant – and often practical and action-oriented – content, many of them do pretty well in organic search results. The fact that they can “monetize” the traffic keeps them in business, and allows advertisers to continue facilitating that monetization.

In other words, these aren’t just random matching algorithms going bump in the night; this is an increasingly organized and predictable ecosystem involving symbiotic relationships. Advertisers hope that the “go-to” conversion-driving publishers in the Display Network continue to succeed in building their audiences.

A fascinating development – completely overlooked by the SEO community and the journalistic outsiders commenting on Google’s harsh treatment of some content sites in its recent Panda update – is that websites like Suite101.com, About.com, Squidoo, eHow.com, Answers.com, and many others continue to drive strong conversion volumes in AdWords Display Network stats. These sites were supposedly “hammered” by the Panda update, and that supposedly happened because they offer too much useless, regurgitated, rapidly-written content. Well, they certainly haven’t dropped off the map as far as our e-commerce clients are concerned. They may not be the highest-quality publishers in the world, but in a world short on quality content across many subject areas, they are often “good enough.” Indeed, their visitors appear to be more transactionally-oriented than they would be on high-minded “quality” websites.

For all intents and purposes – although the user behavior dynamic is significantly different – the way that e-commerce publishers use Display Network is often similar to the way they use search. You can tweak bids on segments like publishers, exclude publishers and pages you don’t like, try additional targeting refinements such as demographic-based bidding, and more. And the key metrics (CTR, CPA, and average order size; by ad, source, ad group, etc.) look or can be made to look more or less identical to the metrics you’re tracking on the search side. Sure, if you’ve got fancy attribution models, you might give the display ads additional credit beyond directly attributable performance. But the point is, you can compare apples to apples. For many advertisers, that’s very reassuring.

Such advertisers simply aren’t listening to all of the exhortations about how you’re supposed to treat display radically different from search, and maintain different expectations for it. Perhaps they didn’t get the memo. Or perhaps they’re onto something.

2) Aggressive CPA-focused advertisers who have been mainly rewarding performance in their interactions with publishers and marketing tacticians. Rather than being willing to pay for clicks, they generally “pay out” on a CPA basis to affiliates, websites, and networks. Yet some of the tactics (like aggressive pop-ups, spyware, etc.) employed by publisher sites in the past are drying up because users are rebelling. So now, they are looking into compromise solutions that tap into more mainstream forms of display advertising. Because a number of channels now subject display ads to Quality Score algorithms analogous to those employed on paid search platforms, advertisers may be able to increase delivery and lower costs by optimizing for relevancy to get ahead of less diligent competitors.

For CPA-obsessed performance marketers, the inventory and methodology used by traditional e-commerce players may not apply as well. Instead of hoping that Google’s probabilistic matching technology will find them high-intent matches across many good-quality content sites of all stripes, they may be dialed into a vertical such as gaming, targeted mainly at males in the 15-29 demographic. Here, the campaign deployment may be quite different. A traditional “Automated Placements” campaign, corresponding with keyword terms that are literally being searched for, may not be the way to go. The secret is that the demographic is so large and that there is so much relevant content to sort through, the potential is huge but the process of sorting out high-intent (and deep-pocketed) customers from low-intent audience members is going to be more daunting and more meticulous – and yes, it will definitely involve new channels like YouTube. Large effort, but great rewards, to the companies that can crack that nut.

Here’s my wish for your ROI-focused display ads in the latter half of 2011. You’ll add profitable volume to your campaigns, and – like the hardest working man in show business – be moved to exclaim “so good, so good, I got you…HEY!!!”

This column was originally published in SES Magazine, May 2011.

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It never fails.

Time and again, during a speech at a college or at an industry gathering, I’m asked the same question: Why aren’t there more female creative directors in advertising?

Stats report that a shamefully small number, 3% of us, are women. I know the question is coming and I try to prepare, but I always flub it. Because there is no good answer.

Is the world sexist? Maybe. Do women want to have families, which can be hard to juggle with work? Sure. Are women’s sensibilities and humor just different than those of men? Often they are, but that’s not necessarily a bad thing.

What’s most ironic about the woeful number of women in top creative roles is that the advertising field is all about solving problems creatively. It’s our job to change perceptions and culture, yet we haven’t been able to change this one.

I’m optimistic this is a problem we can solve, as long as we stop simply observing the problem and focus more on solving it.

And that requires a practical appreciation on behalf of all agencies — and marketers — to appreciate what’s valuable about the female creative mind and ensure young women starting in this business don’t feel they are set up for failure.

When I started out in advertising, I was naive. I didn’t know the percentages or realize the hurdles. There was no posturing, no observing of how to play with the boys, no brushing up on the latest football stats. I was just a chick working my ass off, like every other creative out there trying to get promoted.

Recently, I read Tina Fey’s hilarious and insightful “Bossypants,” which pokes fun at gender stereotypes but also revels in the fact that women can be women and achieve great success. As Tina puts it, the best course of action is to “do your thing” and pray that people will notice how great you are. Luckily, in my case people noticed. But clearly all that praying isn’t working for everyone.

For the past couple of years I’ve been running the Old Navy account, and the creative team just happens to be mostly women. It’s made me a huge fan of the female creative sensibility. They have all the gender-neutral characteristics that a good creative should have — smart, confident, and funny. But there are some other incredible things I’ve seen from my team that keep me hiring and promoting more women (aside from the fact, per a recent Forbes article, that women make 80% of all purchase decisions).

I made one of my senior creatives an associate creative director just a couple of months after she had her first kid. Becoming a mom actually made her a better creative. When she’s at work now, she’s highly focused and doesn’t waste time; her ideas come more quickly and, importantly, her leadership skills are more fine-tuned. It turns out that her “mom gene” kicked in and is working for her job, as well as her new baby. Being a mom isn’t a liability. It is an asset.

Recently a female creative director and mom rushed to work after a diaper had exploded on her — she didn’t want to miss an early meeting. I went to give her a hug hello and she stopped me, warning not to touch her — she thought she had poop all over her. I couldn’t help but think how well that would prepare her for a particularly tough upcoming client presentation. That’s the kind of training all of us in advertising, men and women, could use.

Women are hardwired to kick ass and nurture at the same time. But unfortunately the advertising business isn’t known for nurturing. It’s competitive, it’s fast and it’s filled with insecurities. We don’t want to be replaced by the newer, younger, better model.

But maybe if we were better mentors for young people, they’d see a reason to keep us around when we were past our prime. If there is one type of person who could both juggle their own life/work balance, as well as nurture new creatives, it’s women. Think about it — if every female creative in a management role could mentor and promote just five other women, each of those can help five more, and onward, and before long we’ll be in the hundreds. Call it a pay-it-forward meritocracy.

This starts to change how we think of our accomplishments. We start basing our personal success on how successful other women are as well. Women at my creative level, including myself, get caught up in feeling that part of our success is based on the fact that we made it in an industry where we shouldn’t have — that maybe we got there because we have a guy’s sense of humor or because we’re tougher. Or maybe because we don’t have kids.

That’s wrong. We made it because we are great creatives and great leaders. And having a fulfilled life can only help our work.

So it’s women who can change this industry for other women. And even for men, too. We live in a world now where moms and dads are reversing and integrating roles, so it’s not as simple as separating it into men vs. women. Men and women both deserve successful careers and families.

If our field is about understanding what motivates people and marketing products that make life better, we should take advantage of the perspective offered by our own real lives.

That’s great creative leadership.

Los Angeles – As most people know, the Internet is a global communications network of massive proportions. What many people do not know is that they can focus the vast power of the Internet to promote their businesses locally in the communities they serve.

Aviel Feuer, webmaster and owner of Site Me, Inc., says many businesses are missing the marketing boat by not properly coding and optimizing their websites. He notes, “There are thousands of businesses that have websites, but not all of them are used effectively to break through the enormous clutter on the Internet. Moreover, they are leaving money on the table by not drawing as much business as possible from their local communities.”

Feuer believes that much of the advertising done on the Internet is wasted on an audience that will not even consider buying a company’s product or service because they are not conveniently located to a prospective customer or, worse yet, the person can’t find the company on the Internet in the first place. He feels the Internet, which has virtually no boundaries worldwide, needs to be harnessed and better, more cost effectively used by businesses to target customers.

As vast as the Internet is, most major search engines, such as Yahoo, Google, Ask, MSN, and others, already provide tools to help address these issues. Feuer says, “If a website is optimized and search terms are featured on the web pages, an individual can register the website as a local business with the search engine companies. By doing this, if a prospect does a search that includes a city (e.g., Thousand Oaks, CA) or region of the country (e.g., Southern California), the odds of that company coming up can be dramatically increased. The company could even end up on the coveted first page of the search, which also improves sales opportunities.“

Many companies use Pay-Per-Click advertising programs online to enhance their visibility. These ads can be scheduled only to appear in a specified geographic area. This feature saves wasteful clicks by people located out of a business service area, allowing the marketing efforts to become more focused, more effective, and less expensive.

Important considerations for successful ad campaigns are being consistent, making offers that are enticing and ensuring that the website is attractive and easily navigated by visitors. Feuer states, “When a prospective buyer is presented with a call to action on a website, the cost per lead is minimal and definitely less than in other media like direct mail, print, radio and television.”

Feuer says another way to go local is to send out monthly or quarterly E-newsletters to clients, prospects and people in the immediate community. With little effort, businesses can grow their own mailing list to hundreds or thousands of recipients. “Create a nice template for a professional look, provide unsubscribe instruction, and you are set to go,” he notes. “You don’t even need to buy stamps. By subscribing to the newsletter, you can draw in business because you are in front of people who have already expressed an interest in what you have to sell.”

Feuer offers a free website evaluation and can be reached by e-mail at aviel@siteme.com or 818-735-4957.
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About Site Me, Inc.:
Backed by over 25 years of engineering, quality assurance, IT and Internet experience, Site Me is an Internet and website development company that provides website design, programming, SEO, content and database management, e-newsletters, e-commerce, online advertising, e-mail, web hosting, and domain registration. Site Me is located at 6493 Joshua Street, Suite 101, Oak Park, CA 91377. Telephone: 818-735-4957. E-mail: aviel@siteme.com. Website: www.siteme.com