Business Quests in the Information Age

Yahoo! strikes an alliance with Google

"The enemy of my enemy is my friend" seems to be the rule at Yahoo! even when that means striking a stunning alliance with old-time rival Google. According to French news agency AFP and to CNN Money, the two companies came to an agreement for the US and Canadian markets, whereby Google would be able to sell advertising space on Yahoo's search pages. Aside from being an admission that Yahoo! stands no chance to compete head to head with Google in this space, the agreement is interesting in that it contains a provision saying that should Yahoo!'s ownership status change by way of an acquisition or other operation within the coming two years, the company would have to pay Google 250 million dollars.

That provision could be seen as an attempt to ward off any attempts to acquire Yahoo! for the next 24 months even though when a company like Microsoft is willing to pay over 45 billion USD to acquire Yahoo! I doubt 250 million would make a difference even if paid to archrival Google. I would personally focus my interest much more on the time horizon of the said provision because in my opinion it speaks volumes about the internal expectations of Yahoo! as to the time when its future strategic direction will have matured and started to deliver the first results. Microsoft's takeover bid most certainly was a wake-up call for top execs at Yahoo! Now of course, the question that remains to be sorted out is whether activist investors like Carl Icahn will give Yahoo! two years.

Tighter legislation of online and interactive marketing

In yet another sign of a maturing market for new generation marketing and communications services, stricter legislations and rules are being enforced in Europe. The clipmark is about the UK market where legislation has been tightened considerably over the past few years. For example, the legislators have taken steps to make it impossible to target children with dedicated web sites and online activities. Now techniques of influence marketing are being regulated in a stricter manner to limit if not eliminate manipulation of consumers. The interesting question of course is whether legislators will apply the same kind of logic to politicians and their spin doctors...

clipped from www.visinsights.com Buzz Marketing techniques to become illegal in UK? Effective on the 26 of May 2008 certain activities will become a criminal offense when the Consumer Protection from Unfair Trading Regulations becomes effective. Seeding positive messages about a brand in a blog without making it clear that the message has been created by, or on behalf of, the brand will be an offense. Using “buzz marketing” specialists to communicate with potential customers in social situations without disclosing that they are acting as brand ambassadors will be an offense.

Blog Ad Network by Six Apart helps monetization of smaller blogs

Six Apart is one of the few companies of the so called web 2.0 wave whose focus on sustainable business models is a major strength. Using their position as a blogging platform to structure and manage an ad network is really a no-brainer from a business standpoint, while it is also in keeping with Six Apart's consistent policy of offering easy-to-use solutions to its customers. They are uniquely positioned to generate substantial business value from this initiative. I am very curious about their pricing mechanism and about the degree of visibility they will allow into their profit margins from this activity. And perhaps even more than those aspects of the scheme, I will be interested to understand their targeting philosophy (serving the relevant ads to each micro-audience) because that's one of the big battles of tomorrow's advertising.

clipped from www.marketingpilgrim.com Six Apart Launches Blog Ad Network, Blog Services clipped from www.marketingpilgrim.com Blog software company Six Apart acquired creative agency Apperceptive, a company that built blogs for sites such as The Washington Post, The Huffington Post, BoingBoing, and iVillage. Now they’re launching an advertising network for blogs. They are also venturing into design, programming, and blog marketing services. As an ad network, Six Apart is competing with Federated Media Publishing, Glam, Blogads, and others. Here’s how it will work - they will get advertisers, bloggers put the ads up, and the two share revenue (not sure what the payouts are like, but I believe it’s typical to get 20-30%). Six Apart is working with Adify to provide back end support so bloggers can see their payouts and manage their account. they are targeting their services to the little guy The ad network is currently in invitation-only beta and it’s just for bloggers who use Six Apart’s Vox, TypePad, or LiveJournal.

Inspiration from The Last Lecture

Today's inspiration from me. Dr Pausch's presentation contains a message for those of my customers who complain when I tell them what they need to know instead of what they'd like to hear: "your critics are the ones telling you they love you and care... when you're doing a bad job and nobody points it out to you, that's when they've given up on you". Enjoy.

The full lecture given at Carnegie Mellon University is below. Be sure to take the hour and a quarter needed to watch it because it's worth it. Every slice of it.

Fret no more about Google

The decrease in paid clicks on Google's online advertising network has been one of the worrying news of the first quarter for modern day advertisers. The Economist has done a good little piece of analysis showing why the decrease may only be the result of Google's own aspiration for more relevance and better performance of ads. And I think it shows pretty well why Google is here to stay and very far from being already "over the hill" as some put it. It is perhaps the most telling testimony of the company's ambition to build a sustainable position in the elusive field of online advertising and beyond that narrow perspective an indication of the stringent demands the company has on itself.

So emails may be flying around showing how great a working environment Google is, but nobody should infer it's a corporate version of Club Med. And judging from their ambitious cooperation with SalesForce , these guys are going for a cut of every significant business transaction they facilitate. That is some business quest!

clipped from www.economist.com The case of the missing clicks What does it mean when people click on Google's ads less often? The scare started when comScore, a research firm, reported in late February that Google's “paid clicks” had decreased by 7% during January, and were flat compared with the same month a year earlier. the ratio of paid clicks to searches dropped even faster than the number of paid clicks: it was down by 16% in the month of January. eMarketer, another research firm, projects that online advertising in America will grow by 23% this year, economic troubles notwithstanding, because the measurability of the medium is too compelling for marketers to ignore. the likeliest explanation is instead that Google itself is to blame—by, paradoxically, increasing the quality of its ads this is what drove Google's revenue last year: it grew by 56% on the back of a 21% increase in revenue per paid click.

Thalys experiments: WiFi inside, idiot design?

Writing while in the train getting back to Brussels after a couple of days in Paris for Ad:Tech. Yes while in the train. That is really cool. What's less cool is the amount of over-engineering Thalys seems to have put in designing this service: resources like Gmail, Google documents, Network solutions webmail and Google Apps are simply not usable because some stupid piece of junkware that runs on the Thalys WiFi network considers those to be forbidden resources. Even the sites of Le Monde and CNN are not accessible. So what gives? Is Thalys developing a new concept of a hyperlocal web? Are they trying to revolutionize the web by severly limiting connectivity? Is this a censorship experiment for the Chinese government?
None of these exciting avenues I'm afraid. It only seems that somebody felt it important to implement an extremely stringent security policy, which, in the end, voids of most of its value the great promise of WiFi aboard high-speed trains. I'm sure they'll fix this someday, but what does it say about cost of opportunity in terms of revenue to the company? What untellable stories of wasted service design resources does this case convey? Is there anyone to doubt that product / service design will be a strategic competency for companies in the coming years?

In the end, it all boils down to common sense and a structured albeit flexible approach to product ownership. Something that does seem to be a common thread to methods like scrum, agile development, permanent beta, Toyota's continuous improvement through the kaizen approach or NLP... They all accept a degree of chaos that characterizes the real world. Realism, common sense, perseverance, patience, continuous and relentless improvement, continuous quest for evolution, no nonsense and a thirst for  feedback are some of the characteristics of approaches that work.

Now on the positive side of things the idiot design does not prevent Thalys travelers from accessing Wikipedia, Barack Obama's web site or the Business Quests blog :-) as you will see in the screen-shots.

P&G challenges in interactive and digital marketing

Currently attending a great presentation by P&G's Michel Lambert who is telling us about challenges and achievements in interactive and digital marketing. With an experience of 20 years in marketing 9 of which at pan-European level, a strong background in direct marketing, having gone through the great school called P&G and basically a combination of analytical capability and common sense, he's got a contribution to make.

In fact I was lucky to meet him yesterday and I was impressed with the stuff he told me about how P&G is clearly putting a great emphasis on interactive and digital factors throughout their organization, not only in the field of marketing. He clearly gets the transformative power of information technologies in the field of communication as well as in all the processes of any company that wants to be successful in the coming century. Michel does have a good and no-nonsense grasp of the ways in which organizations need to transforms their structure, practices, approaches, ways of assessing success versus failure, recruiting, building relationships... In fact it's quite impressive. While I prefer to respect a degree of confidentiality, I think the presentation of today reflects very well the state of play at P&G's end and this presentation certainly looked like a call to agencies to finally start offering stuff that make business sense rather than just surfing on the latest online fad and fashion.
Michel has a non nonsense approach: "is my brand prospect and brand customer online? Sure. But what do they actually do there? how can I understand them better?". His take is that the consumer, the person that is potentially a customer, the complex individual should be at the center of every single thought people  have about interactive and digital marketing. Platforms, tools, communities, practices, plugins, widgets... will proliferate and they are not really relevant if one does not understand the consumer.

Here are some of the very interesting things Michel shared with the audience today:

1. understanding the on-line behaviour in fine detail: motivations, participation, influencers, self-expression, context rlevancy, how they search, what are their expectations from search, why are they searching, where are they searching...
2. take a more strategic view on things: define roles and make choices. Here key performance indicators are key of course since they eventually feed back into the formulation and execution of strategy
3. how do you actually build valuable and intense relationships with people: the magic of relationship marketing
4. generate content or leverage existing content?
   • we compete for an audience, for the attention of people. So our competitive set includes media and entertainment
   • calls for production of higher quality of conten
   • why don't I invest in mobile marketing? There is no usable content!"
5. Risk taking
   
   • culture of data and measurement. Gut feeling is not really the core strength of P&G: if an ad does not test well in pre-release it will not be aired. Online things are considerably more difficult and require more risk-taking
   • risk taking needs to be managed in new ways and in particular by doing more iterations and working on shorter cycles (one year is an eternity online)
     
6. Cost of reach is too high right now.
   1. There is no way in the world P&G will invest crazy amounts to go full steam ahead with a pan-European campaign without understanding the ROI and how the campaign fits into a broader five-year strategy
   2. clear directions, reach goals and glide path: it may be possible to achieve results in year one simply because there was nothing before, but results in future years come only at the price of having a disciplined approach, not by throwing good money after bad. Back to basics again.
7. the challenge of mass individuals
   • consumers are in control
   • consumers want proximity and a relationship with the brand
   • segmented advertising vs one-size-fits-all even though offering a relationship on an individual basis is not an option because it costs too much and drives ROI down the drain
   • agencies should support brands in achieving mass customization in the relationship with their consumers and prospective customers
8. the sweet spot of balance between tools and approaches
   • starts with the consumer and drive scale from them, not from tools: e.g. in search and keyword advertising if I don't understand my consumer I end up translating ad keywords on a global basis on various platforms!
9. growing importance of retailers as media
   • retailers are increasingly building relationships with consumers  in particular by exploiting their huge databases and by developing content
   • P&G could develop a relationship with retailers considering them as media, but they need to develop missing capabilities in particular to assess the financial value of each contact
   • out of 25 retailers surveyed only one had proper online capabilities to achieve that. Quite frankly this is a shell-shocking picture! That's some potential business quest for someone in the field and with access to the decision makers of top retailers.
10. the need for constant optimization
    • in traditional media: concept test, develop content, pretest, go on air, wait to get results, plan for next year. The cycle is therefore one year. In the digital world, the cycle is much shorter and analytical skills are in very short supply in-house
    • transform pre-test into post-optimization: a complete shift in the mindset and probably one of the biggest challenges P&G is facing
11. integration
    • how do we integrate different platforms and media? how does the mix work together?
    • understand the relative ROI because the budget will not increase; in fact, it might even decrease. If there are more ways to execute a marketing strategy, then the money must be shifted from somewhere. New media need to prove the case and a better collaboration between online and traditional, between search and influence, between interactive and non-interactive... That's a key challenge

Michel also mentioned education of people inside P&G as being a major area of focus today because marketers need to reassess many of the practices they used to consider as world-class. Furthermore the relative differences between markets makes it necessary to have a decentralized approach and in that respect the world is very far from being as flat as Friedman tends to suggest. The world has changed in a major way.