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Friday, December 24, 2004

It All Starts with Good Ingredients

I've learned a great deal this year, for which I'm thankful. If I had to boil it down to one takeaway, it would be Godin's urgings in Free Prize Inside to focus on "going to the edge" in developing new products, services, and features. To engage in edgecraft, though, it won't do to simply act edgy. You need to go there... to put different stuff in what you make. Even if it just looks or feels different (design and presentation are real to the consumer, too -- it's just your marketing fluff that isn't).

Godin is capable of ripping off hundreds of examples on command. One good one, which he presented in a talk in October, was the example of the Honda Element. That funny, boxy-looking vehicle only got produced because the engineering team (imagine that) insisted on testing it head-to-head against the unremarkable "compromise" design favored by company execs. In real life, goofy-looking car outsold the "focus group friendly" car 3 to 1!

When it comes to the stuff they're buying, consumers are more informed than ever. Big brands know they used to win by aiming for homogenized, middle-of-the-road products and advertising them to death. Unfair allocations of shelf space don't hurt either. At the 7-11 today, I noticed the entire visible display of cough drops front and center at the counter was devoted to Halls. "But Fisherman's Friend is better," I thought to myself. I then went home to figure out why I thought that. It turns out Halls muddles along with one active ingredient, menthol, whereas Fisherman's Friend has several, including capsicum (cayenne pepper). Cayenne may or may not have health benefits. More importantly, you probably won't forget the experience of taking this particular lozenge. Although it's been around a long time, you might say that Fisherman's Friend "went to the edge." Now if it could only get equal shelf space, I'm betting it could take over the top market share spot with only about 20% the ad budget of the big-brand product.

I wouldn't be surprised at all, though, if someone came along with a head-sized cough drop in a few years, one that contained an even more memorable active ingredient. Maybe the TV-industrial complex isn't quite dead as Godin argues, but it's certain that the role of advertising is rapidly changing. Consumers are researching and reverse-engineering your product as soon as they take an interest in the category. All of this is made possible by the huge surge in available information and the speed with which your customer can access it.

Many dominoes will fall in this new age of radical consumer autodidactism. Perhaps even those grocery stores and convenience stores that try to prop up monopolies by allocating shelf space to crap people don't want.


Posted by Andrew | | | Permalink

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AdWords Exposed!

Unless my normally eagle eyes had been failing me, Google has quietly introduced a way to view all AdWords listings relating to your search by clicking a link titled "More >>" at the bottom of the first-page search results listings. Clicking the link displays a page of nothing but sponsored links, presumably all of the available AdWords advertisers for that keyword phrase.

This "full frontal" approach is a nice Christmas present for advertisers without deep pockets, as it will likely increase the exposure for advertisers whose ads normally wouldn't appear until page 2 or 3 of the Google search results.

Posted by Cory | | | Permalink

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Back to the Future with Internet Ads

You'd almost expect to see Michael J. Fox come blasting through the pages of the latest issue of BusinessWeek. Jaded former believers in Internet profitability will probably find it hard to believe that investment analysts are actually recommending the stocks of companies that provide Internet advertising tools and services once again. But it's true.

In a piece called "Where The Real Internet Money Is Made," BusinessWeek shows smart investors that there is money to be made betting on Internet advertising, due to once-elusive profits and industry consolidation, like this week's acquisition of iProspect. To wit:

"It started with advertising on search engines, such as Google Inc. (GOOG ), which collectively grew in five years from near zero to a $3.9 billion chunk of the online ad industry. Now companies are rushing to promote their brands with ever more banner ads, skyscrapers that crawl up the pages, and full-motion videos. Internet advertising should reach $9.4 billion in 2004, according to Kagan Research LLC. And with continued double-digit growth, it's on pace to surpass magazine advertising in about two years, adds Kagan."

Dang. Two years, and the Web overtakes glossy, dead tree advertising! As a die-hard believer in all-things-Internet, even I have to rub my eyes in disbelief at predictions like that. But it's going to happen, and soon (unless, of course, the US dollar's plunge wrecks the global economy first).

The article continues:
Right now, excitement about online advertising is behind a wave of industry consolidation. AOL (TWX ) dished out $435 million for Advertising.com in June. In mid-November, Dow Jones & Co. (DJ ) agreed to buy CBS Marketwatch (MKTW ) for $515 million, a rich 30 times next year's estimated cash flow. Analysts believe that Dow Jones, whose wsj.com is available to subscribers only, is looking to tap the bounty of advertising that a free site can attract because it draws more visitors than paid-for competitors. The current fever has a hint of the dot-com craze, but there's one vital difference: While the advertising stars are still spinning bold visions of the online future, they're measuring their progress with profits every step of the way.

So not only is the advertising resurgence coming fast, it's also reversing conventional wisdom that the only way content sites can make money is through subscription fees. Thanks to the massive audiences and the fact that more than 50% of US households now having broadband access, advertisers now see the Internet for what it is: the undisputed mass, trackable advertising medium in the world. I think we ain't seen nuthin' yet!

On a related note, the latest Fast Company (subscription only) also has a piece called "Commercial Success" about Internet advertising and how Yahoo, after helping Internet adverising crater, has helped bring it back from the brink of oblivion with a mixture of humility and flexibility. It even features a handy infographic about the current ad standards like skyscrapers that helped make the difference.

Posted by Cory | | | Permalink

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Monday, December 20, 2004

Why Google Is a Non-Portal

Like many other analysts, I've had a hard time assessing whether Google belonged in the portal category or not. If you were to look at a comparative feature set between Google and a portal like Yahoo, it might seem that Google should be classified as a portal. But if you look at the home pages of both sites, it's apparent from the sparse interface that Google ain't like the others. B-b-but, if all that good stuff isn't sreaming your face like on most portals, then where is it?!

Like Prego, it's "in there." But, under the surface, there's more to it than that. So what is it precisely that makes Google a non-portal?

Jefferson Graham of USAToday provides a very useful clue, thanks to Marissa Meyer:

For years, Google has said its focus was simply on search. Executives, often in language that can only be described as Google-speak, insist it still is.

"We want to be what the user wants, when he or she wants it, as opposed to everything the user might want, even if they don't," says Marissa Meyer, Google's director of consumer products.

"The portals overwhelm the user by throwing all these different tools at them," she says. "That's not us. We just want to get users to the highest-quality content."

Despite all the portal-like features such as Gmail and online maps, Google is about supplying the right information when and how the user wants it, in much the same way that AdWords ads are about serving up the product or service that the user wants, when and how they want it. That may seem like a small distinction on the surface, but with this new perception, it makes some of Google's recent moves less puzzling.

And here I was going to predict that Google was going to come out of the closet as a portal sometime next year! Trust the big G to zig when the others zag.

So what is Google, then? Um, how about an anti-portal? A find engine? A -- stay with me now -- direct information-on-demand engine (DIODE)? A search almanac? Argh, I dunno. How about some help here?

Posted by Cory | | | Permalink

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Information Wants to be Dusty: Library Science as Reaction

--
reaction


n 6: extreme conservatism in political or social matters; "the forces of reaction carried the election"

--

One of my favorite Seinfeld scenes has Newman concluding a particularly melodramatic threat with "because when you control the mail... you control.... information!!!"

The one time my father ever subjected himself to parent-teacher day, he met the outgoing typing teacher, Mrs. Rummery. "What about these new word processing machines?," my father asked politely. Other teachers were starting to show students how to use them. Not Mrs. Rummery. "I'm glad I'll be long gone before I ever have to deal with that," she grumped. A wonderful steward of taxpayer dollars.

--

Consider now the reaction of Michael Gorman, a librarian who argues that "the books in great libraries are designed to be read sequentially and cumulatively, so that the reader gains knowledge in the reading." Speaking for myself, I know that ain't true. Anticipating a glorious graduate school career, one summer I read Rawls' A Theory of Justice sequentially and cumulatively. It's safe to say I not only gained precious little knowledge from that exercise, but that in the ensuing years, the "snippets and snatches" method ruled the day for the tens of thousands of books and articles I was forced to read to come to a fully professional understanding of politics, philosophy, sociology, economics, admin theory, and other overlapping disciplines.

Gorman, president-elect of the American Library Association, writes with no little passion on the subject of recent high-flown experiments in digitizing content:

The boogie-woogie Google boys, it appears, dream of taking over the universe by gathering all the "information" in the world and creating the electronic equivalent of, in their own modest words, "the mind of God." If you are taken in by all the fanfare and hoopla that have attended their project to digitize all the books in a number of major libraries (including the New York Public and the University of Michigan), you would think they are well on their way to godliness.

I do not share that opinion.


Later on in his Newsday editorial, Gorman tells us which pieces of information he is in favor of digitizing, and which ones should be left alone. It's as if he believes that librarians alone hold the key to understanding how info should best be disseminated and consumed.

I do not share that opinion.

Words should not be taken out of context, but nor should access to them be seen as threatening in some way. There are whole courses, for starters, in "how to" read the canon of Western political philosophy. There might be four major schools of thought on the matter of "how to" read Plato's Republic or the works of Grotius. Some might involve close textual analysis. Others might involve a lifetime understanding the social, economic, political, and linguistic contexts of the works. That might involve a lot more reading, but it might also involve much research; in other words, not always reading all works "cumulatively."

There is talk amongst archivists that one can learn a lot from examining and smelling old books. Nice. But to a modern professoriate, the idea is to get higher education into the hands of the many, not to restrict access to a few "gentlemen." The bulk of reading material from whatever era (99+%) finds its way into the hands of undergraduates via anthologies and reprints. Education is supposed to be for everyone. Book-sniffing is considerably more rarefied territory than, say, wine-tasting, or truffle-digging.

Can there be any holding back the digitizing of some important historical content, and later, nearly everything ever published? Can Gorman see no potential benefit to this? You don't have to love or even like the "boogie-woogie Google boys" to admit it when they're working on something interesting.

The New York times piece on Google Web Library, and the InfoToday article on the announcement, offer a more balanced view.

Posted by Andrew | | | Permalink

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Sunday, December 19, 2004

How High Can FireFox Fly?

In a sign of renewed big media interest in the browser wars, Randall Stross of the New York Times (via CNET) chronicles the dramatic rise of the FireFox browser:

"Firefox 1.0 was released on Nov. 9. Just over a month later, the foundation celebrated a remarkable milestone: 10 million downloads. Donations from Firefox's appreciative fans paid for a two-page advertisement in The New York Times on Thursday."

Stross notes that FireFox's bold challenge to Microsoft shows that the open-source model pioneered by Linux has at last achieved mainstream success in a way that Linux could not due to its complex nature. And if that's any indication of FireFox's destiny, it could be Microsoft who is the next browser to be "Netscaped."

But, not so fast, Mr. Stross. Although many of us share your optimism that the web experience will be vastly improved by the widespread adoption of FireFox, there are at least two major obstacles to FireFox's success:

1. Microsoft still has the advantage in cash and connections.

With far greater resources than Mozilla (FireFox's non-profit owner) can ever hope to have, Microsoft can easily afford to bide its time while it chooses how to respond to FireFox's challenge. In other words, it has the luxury of outspending and embracing and extending FireFox. And when Longhorn finally is released, Microsoft can devise any number of devious ways to dissuade users from adopting competing browsers as a condition for getting the latest operating system technology.

2. Mozilla is a non-profit company.

If Mozilla succeeds in beating Microsoft at its own game, that would have to be a first in the history of business. To be frank, although it's a nice dream, there's probably no chance that FireFox can actually achieve a majority of the browser marketshare. It might be possible for FireFox to achieve a 25% share, but you just know that Microsoft won't even let that happen without a fight.

Mozilla may have lots of good will and support, but again, Microsoft's got the cash. It doesn't seem likely that any product from a non-profit software company, however innovative and sexy, can conquer a company that is driven to succeed financially. Perhaps I just don't understand yet how the Mozilla Foundation is funded and operated, but I don't see how it's possible. What are Mozilla's long-term aspirations? Who knows.

If FireFox is serious about making a dent in the browser market, Mozilla had better not rest on its laurels. Even though Longhorn is at least a year away, you just know Microsoft is gunning for the upstart, all the while it is also gunning for the search engine market, too. FireFox might do well to make a few connections of its own. Google has supposedly stated that it has no plans of partnering with Mozilla or creating its own browser, but the two companies are already collaborating on the FireFox start page, so it will be interesting to see if Google really does have something up its sleeve, or if its telling the truth.

When your quarry is the biggest software company in the world, one would do well to keep one's true intentions under the radar, for now at least.

Posted by Cory | | | Permalink

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