Time Warner is starting a new trial of “Internet metering” that would allow customers to select a monthly plan that imposes bandwidth limits and as expected charges you overage fees for exceeding your limit. Time Warner suggests this is fair for all users as some users known as “bandwidth hogs” can negatively affect the Internet experience for the average consumer. Yet, the internet is constantly growing and has become the place for all your entertainment needs. The technology company Cisco drives this point home by stating, “today’s ‘bandwidth hog’ is tomorrow’s average user.”
So why are media companies spooked? Even if the average user uses well below the limit the monthly cap causes users to worry about how much time they are spending online. This will lead some users to reduce their time online and this is accompanied by a reduction in trying new sites and applications. Video is the biggest hog of gigabytes and bandwidth caps will hurt online video advertising.
Mr. Leddy of Time Warner states, “media companies’ fears were overblown.” He states that Time Warner could not stop web video and that they are aware of having to increase capacity to accommodate video. Mr Leddy’s words do not reassure me and media companies should be shivering in their boots. As a dedicated Netflix user and a fan of the Office I am not too excited about this trial either. If metering is the way of the future I will feel conflicted and torn as the media companies keep pushing me to stay online as the number of television shows and games keep increasing and the internet provider is trying to hit me with overage charges for doing what I have been attracted to do. Video and video ads will probably be the most hurt by the caps, but I believe the results will be more catastrophic as this metering has the potential to reduce Internet growth.
For those of you who didn't have a chance to review Online Ad Revenue for Q1 '08:
This data research was conducted by the New Media Group of PricewaterhouseCoopers. The Internet Advertising Bureau (IAB) revenue report was launched in 1996 by the IAB.
What I found to be entertaining was to see how the IAB Reports this news versus other publishers/blogs:
I took it upon myself to get out "there" and meet influential online marketers within the online interactive space. The perfect venue presented itself: 212, New York's Interactive Advertising Club, ran an event hosted by Undertone Networks - "Meet the Retail Marketer's". It took place at the Midtown Loft, and I'd say 200+ made the event.
They discussed the unique demands of retail marketing on the web for brick and mortar, brick and click and pure play initiatives.
• The Panel (left to right)
o Patti Freeman Evans, Research Director, Senior Analyst, Retail | JupiterResearch
o Jim O'Brien, Director, Customer Marketing, Barnes & Noble
o Eric Nadler, Danskin.com, VP Sales Operations/E-Commerce, Triumph Apparel Corp.
o Matt Bailey, Search Marketing Manager, Hanover Direct
o Anna Maria Virzi, Executive Editor, ClickZ Network
It was a great event, but at this point, you're asking: "What made it so great?" and "What's with the headline 'Long Road To Hoe'?"
In response to Anna Virzi's questions, "How would you approach cross-channel mixing of metrics and behavior?" (I think she was implying wrapping together both online metrics and in-store retail behavior along with other modes of advertising)....Patti Evans simply responds "It's a Long Road To Hoe..." and continued on to explain that companies are attempting to analyze metrics in new ways.
Someone brought up the issue of in-store behavior to break out your PDA and see if the item is cheaper on the internet. In response to that, Patti explained how shipping costs, time and complexity may be a reason why people will choose the in-store option...in which Jim O'Brien quickly pointed out, "We (Barnes & Nobles) have an option to ship to store and to your home in the same day".
Patti explained that it was necessary to "Figure out what the customer is looking to accomplish in that channel (ie: in store) and seeing if they can serve that need in another channel (ie: online)".
QUICK HIGHLIGHTS:
- 3 of the 4 panelists were experimenting with Mobile (text based) Advertising
- 2 were interested in "Social Media" Marketing
- 1 panelist was experimenting with Video/Viral Advertising
Overall, it was informative, entertaining and worth the networking. So, in closing, what did I learn today? 2 things: Online Retail Marketers place a lot of emphasis on consumer behavior, yet most of their budgets are in Keyword Search.
So there ya go...next time, I suggest you head on over. For more information on upcoming events, check out 212 Here.
I am the Managing Partner at AC Lion and I bring over 12 years of investment banking, venture capital and sales experience to AC Lion. I recently received a newsletter from Rutberg & Company that so perfectly laid out a concise summary and perspective on the key digital media industry events relevant to private equity firms and companies. The newsletter implications included Rutberg & Company's perspectives, adding their own observations, hypotheses, and investment theses. A lot of that information should be respected as exclusive Business Intelligence of which they have requested to remain confidential. Below, I've included some of the more relevant info to our space and leave room for you to formulate your own hypothesis:
During the one month period from June 1 through June 30, 62 private digital media companies announced $416.7 million in venture capital financings.
Investments were primarily in the Applications, Content Publishers, and Advertising Infrastructure sectors.
There were also 37 M&A transactions announced during the period, including Verizon Wireless' acquisition of Alltel, Bain Capital's acquisition of D&M Holdings, and Microsoft's acquisition of Navic Networks.
Here are a few graphs that depict and analyze venture capital and M&A activity for digital media during the first half of 2008....
I was initially very very concerned about yesterday’s article in AdvertisingAge by Abbey Klaassen “$80 Billion? Online Display Market Is Being Overhyped”. The last time I read a headline to an article of similar tone was July 2000 when the WSJ was reporting (well back in section B) that Visa Card was scaling back its online banner ad spend due to poor ROI. That story was a leading indicator of what eventually became the dot.Com implosion (March Madness? Maul Street? Anybody? Bueller…..Bueller……..) So to say the least my heart skipped a beat as I wondered just what had happened to inspire such an alarmist headline. The answer………NOTHING! Operative word being – alarmist.
Ms. Klassen’s initially makes dramatic statements like...
• “The exuberance isn’t so rational this time, either”. She seems to suggest that the current state of online advertising is as unfounded as it was in’00-’01.
• “Its déjà vu all over again…” as she critiques Google’s acquisition of DoubleClick which most experts seem to agree was a great acquisition for Google and MSFT’s attempt at Yahoo which is based on MSFT’s desire to compete along a different vein of online spend (search – not banner as the article would eventual try addressing).
Ms. Klassen must have a personal issue with……well…..facts as she doesn’t really use them to make her points in this article. I'm not pointing fingers saying "this is a poorly written piece", but unless there's evidence to support her claims, I just see her post as an attempt to gain more readers. Oh, and the "simply fabulous" quotes continue...
• “….And we know by now that measured-media growth has pretty much ground to a halt as marketers continue to increase their dollars in unmeasured disciplines such as web development, public relations, and database marketing at the expense of paid advertising.” NO SOURCE! NO FACT! NO NUMBERS. This is one’s simple opinion.
• “…and digital is faring better than its more traditional counterparts, bit its impossible to say its growing at the rate it would have were the economy booming or even normal.” I don’t quite know what her point here was. She seems to suggest that internet growth is stumbling but doesn’t care to source 1 fact behind her opinion. As well, she seems to suggest that our inability to compare current growth rates and economic factors to economic factors that don’t exist as a valid reason to be concerned about the overall value impact and sustainability of the internet advertising space.
• “And jobs in the space? They declined last month too” Sure would love to see some numbers behind that too because we are wrapping up a fantastic July!
She wraps up this article by suggesting that in 5 and 10 yrs display advertising will be only one segment of a more diversified online pie, but that’s just a basic reality that anyone in the space understands, not really a point and certainly not a conclusion that Online Display is “overhyped”
AC Lion specializes in sales and technology recruitment and in particular the nexus between the two. I recruited there for close to a year before I was promoted to Marketing/Sales Coordinator handling PM, WebDev, DBA, Social Media and other Marketing aspects. Really, it's a high level of leg-work combined with flexible schedules and great sources of motivation and collaboration.
Over the past decade, AC Lion has developed a leading reputation in the marketplace by helping the industries' most innovative companies maintain their competitive edge by sourcing and placing superior talent.
In our industry, knowing people delivers results. Whether building a new sales team, replacing a corporate executive, transitioning to the interactive world or augmenting the technology team - our clients come to AC Lion because we know the people that know the industry.
Our vertical (industry) specialists work with top corporate executives from a variety of firms within the media (traditional and interactive agencies, publishers, and client side), 3rd party technology/software providers, emerging technology (mobile wireless/PDA, IPTV), e-commerce, and financial industries.
In today's fast-paced and ever-changing environments, it is critical to have a specialized recruiter with an established track record and a broad network who truly understands your needs. Here at AC Lion, our vertical specialists focus all of their efforts in your space. Because of this philosophy, we know your company, your competitors and your clients.
French advertising company Publicis Group has acquired the Performics Search Marketing business from Google. Performics housed more than 200 search marketing specialists and since its 1998 inceptions has expanded from Chicago, San Francisco, New York, London, Hamburg, Sydney, to Singapore and Beijing.
Terms of the deal were not disclosed, but Publicis, the parent of Starcom MediaVest Group, Zenith Optimedia Group, Digitas, Denuo, and agencies such as Leo Burnett and Saatchi & Saatchi, said Chicago-based Performics would be integrated into Publicis' new VivaKi Nerve Center. [...] Google did not comment on the reasons for its divestiture of the unit, but in a statement, Chairman-CEO Eric Schmidt said, "We look forward to working with Performics as a partner."
Publicis has been “cooperating” with Google for more than a year, but we’re not exactly sure what that means -- mostly because the companies didn’t reveal any details in a cryptic press conference in January. They did say that “Google would exchange its technological know-how for Publicis's analytical and media planning expertise,” according to Reuters. We’re assuming this deal won’t have an effect on their prior relationship.
So why would a Search Company giant sell of part of their search services? After Google acquired DoubleClick, the SEM portion created a "conflict of interest" for a search company to own a search engine marketing company under a different entity. Google just took on the Affiliate Marketing division of Performics and sold the rest to to Publicis.
A great move by Google, but I think everyone is asking the same question: "At what cost?"
As usual, my Friday blogging habbits seem to lead towards a selected "Viral Video"...which leads me to my 4th "VIRAL VIDEO OF THE DAY"...but at the same time I totally got sucked into Reuters YouTube Posting covering Michael Phelps and his Marketing success.
Michael Phelps is a "Marketing Dream" to companies like Speedo, AT&T, and Visa. He earns $5mm a year in endorsements, but can expect more post-Olympics. But none of this could happen without the Marketing Magic behind Phelps, Octagon.
Want a little humor? Well, according to the Video above, VISA immediately launched a commercial congratulated Phelps on the most metals in Olympic History, yet the marketing firm behind Phelps hasn't seemed to update their own web-site: http://www.octagon.com/worldwide-overview/athletes-and-personalities. Check it out...they still have him down for "8". Looks like VISA was a step ahead ;)
...Now that's some good Blogging right there! As for Phelps, have fun buddy!
Forbes Article Reformed Hacker Looks Back, brings to light just how vulnerable Web2.0 technology is to hackers like hacker legend Kevin Mitnick.
Kevin David Mitnick is a computer security consultant who was a controversial computer hacker in the late 20th century. In 1999, Mitnick admitted to the authorities [...]. Mitnick served five years in prison, of which four and a half years were pre-trial, and eight months were in solitary confinement. He was released on January 21, 2000. During his supervised release, which ended on January 21, 2003, he was initially restricted from using any communications technology other than a landline telephone. Mitnick fought this decision in court, and the judge ruled in his favor, allowing him to access the Internet. (Wikipedia)
As for the weaknesses in Web2.0, quoted from Forbes:
What do you see as the biggest threats to cybersecurity today?
Cybersecurity used to be about the network or operating system. Now it's more at the application layer. Companies and their contractors build their own applications hosted on a public Web site, and the people who write them aren't trained in secure coding. The mistakes they make can be leveraged to break the system.
...and he's right. People are pumping out web-based applications all the time and I imagine the only protection they have remain vulnerable hackers like Kevin. I imagine this will become a bigger issue as software becomes a thing of the past and everything is web-based.
I was playing with Stumble Upon and discovered a great depiction of a world without internet, in cartoon narrated story form (with pop-ups). Very entertaining if you need a break from work....(*To move through each story, click the arrow on the bottom right of the book)
According to AdAge.com article E-mail Blunder Alerts Carat Staff to Major Restructuring, "struggling media agency Carat is planning a major restructuring of its U.S. operations, including an undetermined number of layoffs -- news it accidentally released today via a memo the agency's top New York-based HR executive e-mailed to the entire agency that appeared to be intended only for senior managers."
I don't mean to laugh out loud (LOL), but this is worse than the time "a friend of mine" e-mailed 50,000 people with greetings "Hi [Firstname],". No, this is way...way worse! If you're wondering just how bad it was, courtesty of AdAge, read the documents for yourselves:Carat Restructuring Memo & Carat Restructuring Communication Plan.
Neither Carat President Scott Sorokin "nor a spokeswoman would comment on whether any disciplinary action would be taken as a result of the e-mail mishap". I'd hate to be in HR's shoes right about now. Quoting Ad Age Ediotor, John Hollon, "You pay those people to step up in these situations, not make it worse." This may be a good time for AC Lion Online Recruiters to show corporate what they're made of!
eMarketer.com published an article today that may affect the world of online in a whole new way. In the article Affluent Spend the Most Time Online, a study conducted from March through July 2008 by Ipsos Mendelsohn suggests that "among US affluent heads of household surveyed, those with annual household incomes of $250,000 and over spend the most time online."
This may impact where advertisers go to research the impact of their campaigns. The rich could one day define the "perfect ad" and the poor will get stuck with last years Banner ads. This is all speculation, but one thing is for sure. Ad Networks and social communities like aSmallWorld.com, that advertise to the Rich will see an increase in income if these stats continue.
I find it interesting to note that TV and Radio time decreases as you get richer. Now, when you site down and think about, everything here makes sense. The rich are more likely to rely on the Web as a source of news and information simply because the RADIO and TV are too slow and cluttered with ads. There are endless correlations and reasons, but I'll leave those assumptions up to you...
Silicon Alley Insider is a business blog, produced by and for the New York digital business community...and easily one of my favorite blogs in the Online Space!
Only in their 2nd year, they are now hosting their second Silicon Alley 100, an "annual list of the 100 most influential and important folks in New York's digital-business community. The list includes executives, investors (venture capital, private equity, angels), financiers, attorneys, journalists, analysts, commentators, philanthropists, and others who make extraordinary contributions to New York's digital industries (such as the guys on the right)." (Launching The 2008 Silicon Alley 100...Vote Now!)
If you'd like to Vote, then go to the Silicon Alley 100 Voting Booth and make your selection. You'll recognize quite a few names on the list, and you'll be surprised to see how they rank. If you don't like the way our tally looks right now, their voting booth will close at end of the business today (aka: Tonight!).
As always, here's SAI's company info provided by CrunchBase.com
Front-and-center on the Yahoo! homepage: Citigroup to buy Wachovia banking operations! Bear, Lehman and WaMu...now we have arrived at Wachovia!? "In the latest byproduct of the widening global financial crisis, Citigroup Inc. will acquire the banking operations of Wachovia Corp. in a deal facilitated by the Federal Deposit Insurance Corporation." How will this effect the Technology Sector and Digital Growth?
The financial markets have been on edge since Friday following the proposal for a $700 billion banking bailout hit a roadblock of opposition. (Read the $700 Billion Bailout Plan or the Alley Insider Summary.) Surprisingly, big financial companies raised the Dow Jones more than 120 points on hopes lawmakers would hammer out the bailout rescue plan this weekend. The Technology sector suffered a different fate, quoting Reuter's article on Friday: Dow, S&P gain on bailout hopes, Nasdaq slips , "Tech shares took it on the chin, keeping the Nasdaq in the red, after a disappointing outlook from BlackBerry maker Research in Motion. considered a bellwether for the sector. [...] The fate of the rescue plan pushed nearly everything else to the background on Friday." The Technology Heavy Nasdaq was down almost 4 points on Friday!
Research in Motion wasn't entirely to blame. Apple Inc, shed 2.8%, also hurting the Nasdaq. Apple is really feeling really the pain. In ZDNet article, Apple: Is It Really Recession Proof?, "Morgan Stanley analyst Kathryn Huberty thinks that Apple can’t outrun a slowing economy. And she’s betting her estimates on it." PC's are coming out on top because "Apple doesn’t play the sub-$1,000 game." The cheaperoption prevails during a recession! This is going to be a recurring theme in our economy! Want proof? My girlfriend was just given the assignment to write a 5 page essay on the effects on the purchasing of Brand-Names during a recession. I will gladly post that paper on my blog as soon as it is completed.
To make things seems even worse, AdAge just published the article: Revenue Growth Slowest Since 2001! "The nation's top 100 media companies saw a 4.6% revenue boost in 2007, their slowest growth since the recession year of 2001." Though on the bright-side of things "Media's biggest winner is no surprise: digital, with revenue up 10.8%." Could we be headed back to
That doesn't change the fact that for the Media Sector, mergers-and-acquisition activity has slowed dramatically this year undoubtedly due to the credit and capital markets current situation. "There have been only five announced U.S. media acquisitions valued above $250 million so far this year. [...] In contrast, there were 14 announced media acquisitions above $250 million by this time last year." (AdAge)
All these facts do not mean the tech sector is suffering entirely. According to MarketWatch.com article FiSpace.Net: One Company's Recession, Another Company's Opportunity, "some businesses find that the economic malaise has created a greater need for their technology and services. One such company, Zippi Networks, Inc. (Pink Sheets:ZIPI), may well be in the right place at the right time as they assist individuals in successfully selling items on eBay, creating a revenue stream for their customers and the company." The article continues to explain how many tech companies are reaping the benefit of our current economic situation.
The title for this article may be a bit misleading, but the point is simple: This is a very mixed-up place to be for the tech and online media space and I'm interested to see how this will play out in the next few months (or weeks pending any new surprises from the financial sector).
2008 is a hip-year for voters. Besides the fact that the candidates have driven more intrest through YouTube, Flickr, LinkedIn, Facebook and other social-media Web2.0 sites...there are so many 2nd tier efforts taking place on the side by companies seeking attention and results.
Actress and Comedian, Sarah Silverman took a brave approach with TheGreatSchlep.com As quoted directly from her site, "The Great Schlep aims to have Jewish grandchildren visit their grandparents in Florida, educate them about Obama, and therefore swing the crucial Florida vote in his favor. Don’t have grandparents in Florida? Not Jewish? No problem! You can still become a schlepper and make change happen in 2008, simply by talking to your relatives about Obama." Just watch the video above and you'll see what I mean.
This video inspired me to not only post a blog, but cover some other successful voting awareness and viral campaigns out there. At the top of the leader-board is obviously RockTheVote , a "non-profit organization founded in Los Angeles in 1990 by Jeff Ayeroff for the purposes of political advocacy. Rock the Vote works to engage youth in the political process by incorporating the entertainment community and youth culture into its activities" (Wikipedia). Year after year of support from political officials and celebs alike! It's #1 go-to spot for voting encouragement.
A more "awareness" based approach was put foruth by Someecards digital greeting card company with their viral campaign, BotherVoting.com. They are increasing voting awareness..in a very entertaining way. Vulgur, to-the-point, & hilarious cards that you can post on your blog and share with friends
Another voting attempt came with the recent release of Swing Vote, starring Kevin Costner in a film where, "in a remarkable turn-of-events, the result of the presidential election comes down to one man's vote." It was a great attempt to capture the attention of soon-to-be voters and promoted the NEED to vote. Glad to see it got a wopping 38% on RottenTomatoes. Can you smell the sarcasm?
As for some failed/awaiting attempts, I'm not sure what happened to Puffy's Vote Or Die campaigns this year. I haven't seen much. Another one was hidden in cyberspace, but I managed to pull it out. NYC was planning to launch a viral e-mail marketing campaign, but nothing came out of it. Check it out here.
Time Warner is starting a new trial of “Internet metering” that would allow customers to select a monthly plan that imposes bandwidth limits and as expected charges you overage fees for exceeding your limit. Time Warner suggests this is fair for all users as some users known as “bandwidth hogs” can negatively affect the Internet experience for the average consumer. Yet, the internet is constantly growing and has become the place for all your entertainment needs. The technology company Cisco drives this point home by stating, “today’s ‘bandwidth hog’ is tomorrow’s average user.”
