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Life:Water, Internet:??? November 23, 2007

Posted by thedotcomillusionist in Uncategorized.
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When I was still in equity research, one of the hottest topics and continues to be a prevailing theme are the varying monetization solutions for many of the widely popular services that comes as second nature for our generation – Instant Messaging, Social Networking, Search, Media, just to name a few. And for these, there are a slew of different types of advertisements – banner, contextual, rich media, in-text, pop-up, rss, in-video, mobile, product placement, and so on. The evolution of the Internet (huge un-researched assumption) went from informative, and as technology advanced, the permutation of more media rich content came into play, to today’s ravaging of the village that is the Internet. Everyone is getting in the game, not just free services, even those with winning products and services that are proven breadwinners. Its totally cool, don’t get me wrong. I don’t mind watching an advertisement on the new Nissan Versa in order to catch my latest episode of heroes on nbc.com so that I don’t have to pay extra to have a Tivo device at home. If not for advertising, then how would NBC justify serving such media intensive content? Obviously there are people out there with both televisions and computers who prefer to watch their shows on a computer.


So who wins in this equation…definitely not the advertisers. As I’m writing this post, I clicked to view an episode of Heroes on NBC’s website. I was expecting to probably see an in-video about Nissan’s Versa, instead I was served an ad by Comfort Inn. As I was recovering from being totally juked out, I tried to my limited ability to ask myself, “Why Comfort Inn?” I’m not so sure if this is a good fit. What assumptions does the Comfort Inn advertising group make for the type of viewership the Heroes? I am no expert in advertising or marketing, but to me, Heroes is a more adult version of many of the comics my generation grew up on, so I’m thinking:


  • Majority age range of 20-30

  • Young professional

  • Income bracket somewhere between $45k and six figures.


Not having done any research, these are loosely based assumptions, so no need to bash me, I’m just using it as an example to further my observations….Ok, lets wrap this up. My point is that the advertising is not engaging, and neither would a Nissan Versa ad. If I was traveling, I would probably google map a list of hotels in the area, and depending on whether I’m paying myself or on the company dime, I would make my decision there. Or if I was going to purchase a new car, I would make a set of decisions – sedan or coupe, power or efficiency, price range, and then visit a review site. I can see the product placement of the Versa in the show “One of the heroes is driving the Versa,” because it plays on the emotional appeal of the viewer. Some idiot out there will think they’ll be as cool if they drive the same car as the time-bending character.


Recently, I interviewed with a social networking company for an advertising analysis manager position. Before the meeting, I read an interesting article on the economist about the implications of advertising on today’s many web 2.0 companies. A lot of what that writer said makes a whole lot of sense to me. The problem with advertising is the difficulty of engaging the user to create an experience. Only then is it likely that you will see the percentage of performance significantly increase. The article goes on to talk about search engines and social networks. User types something to the tune of “I want to buy a car” and I’m sure a lot of of the hits will come back with websites that will let you purchase a car online, or tell you how to. Whereas with a social network, user types into the interests section, “I like South Park,” and an ad to purchase a dvd box set of south park is served. But the conversion rate is low. In fact, despite being one of the most popular and intuitive social networks, Facebook has one of the lowest CTR’s in its space. This has been a problem plaguing online advertising for a long time coming. Would I be able to solve this problem? Haha…..(wipes tears from eyes)…no. In the recent slew of acquisitions by big tech companies (Yahoo/Third Screen Media, Microsoft/aQuantum, Google/DoubleClick), it is apparent that this has been on the mind of these technology powerhouses for some time. Mobile or Internet advertising, everyone is trying to cover their own asses, paying high premiums to ensure their livelihood into the next big mobile stretch, which I’m sure was a good choice. But living in Silicon Valley, where the advertising startups flow like the salmon of Capistrano, something tells me that very few to no advertising companies have yet to discover the holy grail solution. What this also says to me is that those starting up don’t think the ones already in the game are close to getting it right.



So how to create the experience? Going back to my previous examples, personalize the ad, put Hiro in the passenger seat with a silhouette in the drivers seat of a brand new Nissan Versa with some catchy tag like, “Save the world, save the cheerleader, save $1500 on a brand new Nissan Versa.” Or put Hayden Panettiere in a cheerleader outfit sitting in a Comfort Inn room with a *come in* gesture. That’ll definitely help create an experience (She is 18, right?)



Either that, or narrow the focus of your demographic. For giant social networks where user’s interests are grouped, finding an advertiser that can generate a decent conversion rate would be hard to find. Large retail companies like Best Buy, Amazon, etc. Is the target of your monetization based on the relevancy, behavior, or actions of your users?


Bringing it back to Web 2.0, one company that I kept my eye on for some time is Loopt, a mobile LBS startup. It notifies you when one of your buddies (on Boost or Sprint, and also has the service) has stepped into a certain proximity of you. Somewhat limited, but pretty sweet right? Having been time-tested on Boost’s network, it recently scored big with an agreement to serve on Sprint’s network. Now a solution that will make it even easier for cheating spouses to get away with it….jk but it has a wide range of implications; I only see good things for this company. When they roll out with an ad-supported platform (incorporating the same technology to track businesses on the radar), I’ll be first in line to download the service.


Kinda long…yeah I know. But I hope this is a good transitory post from what I’ve recently been posting to the goals I hope to achieve with this blog. In the next big post (I’m going to subpost a viral link test), I will lay out my first idea that I hope will stir some discussion. Happy Turkey Day, I’ve got the turkey food coma.


What I’m all about November 21, 2007

Posted by thedotcomillusionist in About Me, Advertising.
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So begins my foray into the vast lands of the Internet…


As last generation’s land of opportunity was America, I believe the next opportunity is in the digital space. Is it safe to make that correlation?


… And I’m not being purely speculative, as we see thousands of people making a decent living doing small things like blogging (see John Chow’s impressive monthly revenue) and selling digital real estate on Second Life (see article on Anshe Chung on BusinessWeek) to the much larger and more conventional ventures providing video/image/advertising/whatever else content sharing services that are absorbed into larger tech companies for millions, and sometime billions. The world has shown me that there is a fascination in anything and everything, from a psychotic wannabe actress YouTubing her suicidal life, to a fanatic defending his favorite singer (“Leave her alone…I MEAN IT!”), so any publicity is good, right? The digital world is what you make of it, and for those who have taken the plunge much sooner than I have, I see the obvious benefits, that being –


  • very little to no initial capital investments (of course I’m talking about utilizing free service blogging/hosting/service websites)

  • the ability for global reach (or at least those who speak English or use translators)

  • limitless revenue potential


So here’s me – I was born and raised in Silicon Valley, I was recently in equity research at a technology investment bank, but have left several months ago, and trying to transition into a position at a big tech or tech start-up. In the meantime, I have taken steps to learn programming. Php, mysql, ajax, javascript, although my current focus is learning Drupal (which is almost as confusing as programming itself!) As a product of my environment, I am very entrepreneurial by nature. Growing up, I’ve seen people move in, only to move out a year later when their start-up tanks. As such, I am fascinated, possibly obsessed with the fast paced, cyclical, instant hit or go down in flames mentality of the technology world. One day you can be the only entrant in your space, hemorrhaging your users into oblivion. The next day, you can be yesterday’s news. Albeit this falls to the tendency of all industries, the web is much more sneaky, and and the time frame tends to be much shorter.


My dreams are not unusual, not for a Silicon Valley resident. Make my mark on the world, hit the internet lottery, remove myself from the corporate cog, enrich the lives of those around me, and then fade into history. My typical wet dreams typically consist of awesome products/services that I believe will generate the maximum amount of hedons for mankind. I have been involved in developing many dot com concepts, many of which have led to disappointment. Reasons….lack of technology, bad programming, bad team, a whole slew of things. I am what you would call a surface scratcher, I only think of the cool parts of the business, but oftentimes do not think about the dry parts (overhead, program backend, the stuff essential to a successful business)


So what will this blog be about? Ideas….primarily tech ideas. For those who know me, my time is unproductively spent thinking of ideas. I try to frame my ideas around my understanding of the technology space and work experience. Of course, this sometimes does not necessarily prove to be the case. I won’t talk about colonizing Mars, but I will talk about creating a website mashup of social networking and avatar technology with a focus on the fashion/retail industry, with the monetizing potential.


I tend to speak my mind without any consequence. I may occasionally publish a curse word or two, but only when I want to really emphasize something. I am grammatically incorrect, I like make assumptions, I talk too much and tend to digress often, and I like to include a lot of “…”’s and disclaimer comments in (parenthesis) in my attempt to show that I have thought out some of my statements to a certain extent.


What do I hope to get out of this? Improved writing skills, good opportunities, good discussions, and of course, money (whoring out my blog with ads in the most minimally intrusive way possible). Will I ever be able to make as much as my fellow bloggers? In time, would like this blog to be a center of innovative discussion with high level of interactivity, with meaningful relationships, and I’m not the only person blogging. With that, I plan to somehow incorporate forums as the center for discussion (comments are not the most intuitive). I am blessed with the pleasure of knowing, (although limited), venture capitalists, investment bankers, engineers, programmers, all with passions (not obsessions) in technology. Hopefully if I can get a decent audience, I can get some of them to be a featured blogger.


Thanks for reading, stay tuned, and welcome!