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Monday, April 26, 2010

Twitter Ad Potential: Huge (Source: History, Users' Love of Searching)

Regarding that last post about Twitter and monetization, I haven't changed my mind on all of it, but for the projection/prediction part about Twitter potentially putting up very modest ad revenue numbers in the first two years. That part, I realize, is wrong!

Certainly, they're well behind Facebook in many areas (revenues included) and possibly will continue to be forever, but what they have going that Facebook doesn't have as much of yet? Search! (Fascinating piece today by Eli Goodman of comScore: What History Tells Us About Facebook's Potential as a Search Engine, Part 1).

Goodman's point so far seems to be that as search improves and as users come to expect it to be highly useful, usage increases, familiarity with the tools increases, etc. This is going to happen with Facebook, and it's going to happen with Twitter.

By contrast with Facebook, though, Twitter already gets 19 billion monthly searches -- about 19% of what Google does in a month. Astounding. That with a search platform that often doesn't work well, or sometimes return any results at all. Twitter searching is going to grow to incredible levels. And where inventory and granularity are that huge, even very cautious forms of monetization lead to sizeable revenues and positive feedback loops in CPM rates and user satisfaction.

So I'm coming to the realization that 2011 is going to be a strong year for Twitter's ad revenues, and 2012 could shock people.

A huge wrinkle here, though. Those supposed 19 billion monthly searches count API calls from third parties, and that would include standing queries from users, more like how people use feeds to display their favorite content. But hang on, isn't that a good thing? That's great contextual information and where there is such great contextual information, eventually there will be ad deals, and ad revenues. Sure, there will be ad-free ways to use third party tools, just as some advertising will actually appeal to users (or at least they will tolerate it).

Based on a more conservative definition of a "search," let's dial the 19 billion back, then, to around potentially one billion actual searches per month in 2011 for either Twitter or Facebook (so, more like 1-2% of Google's overall volume). That's still impressive. Based on Eli Goodman's logic, that could certainly lead to a snowball effect of bona fide search product development and bona fide user addiction. In essence, the search product and ad product teams at Twitter and Facebook alike won't be able to hire people and build products quickly enough.

Promoted tweets, then, should be viewed just a light pilot project to try something sort of "alternative" in the space for a reasonably guaranteed amount of cash. Down the road, Twitter can monetize something we're all very familiar with as the highest-CPM, win-winningest, digital advertising channel: search and keywords. I doubt Twitter's founders or any of the early adopters predicted this type of user behavior in the early going. Certainly, it's a credit to them and their far-sighted investors that they all bet big on the potential and the direction of user excitement, rather than trying to get too specific about how it would get used or how it would make money, too early on.

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Posted by Andrew Goodman




Tuesday, April 13, 2010

Twitter's Monetization Model: On the Mark, or Off-Target?

As Twitter moves to pilot its first experiments in monetization, it might be interesting to speculate on its prospects for success. To help, I'll go through some of the elements of success and failure that have been proven in the last twelve years or so of online advertising experimentation. Without all of these elements being in place, ad-supported models have tended to fail.

1. Large enough audience to matter. Wrapping some ads around content or functionality geared to a relatively small audience is tricky on a number of levels. First, no one in the press cares, and investors don't care. Most importantly, advertisers and agencies don't care, since there's not enough to buy, so you get lumped into remnant or at least underpriced network inventory unless you've got a really smart little sales force. Second, any hiccup gives you a greater chance of killing the golden goose of whatever you wrap the ads around. Third, you lack statistically significant data for testing and refining, so it's hard to perfect. Fourth, related to the third point, dipping a toe into the water becomes difficult. Large publishers can run tests without alienating anyone as they test the model in a small sliver of the content.

2. Targeting by keyword. Publishers and ad mavens have bent over backward to insist that targeting can be based on concepts, personalization, demographics, and factors other than keywords. Even Google, the King of Keywords, began fairly early in its attempt to paint the keyword as only one sub-facet in the global effort to better align advertising with user tastes and intent. (Bonus: that effort to blend into the woodwork might have helped Google in court if trademark and patent lawsuits really started to escalate out of hand, or if they started losing cases so badly that they'd need to substantially revise their business model ahead of schedule.) Deny it all you like, but keywords still "click" with advertisers. Users like them too, because it's a way of seeing relatively relevant ads without feeling too creeped out. Keywords triggering relevant text ads and offers are the display-advertising-in-content cousin to permission marketing as it was conceived by Seth Godin for email. Somewhere, a line can get crossed. Keywords do a really great job of helping advertisers and users connect without that line being crossed as often.

3. Doesn't get in the way, or even at times enhances the experience. Advertising is a necessary evil to some, but to a substantial part of the population, it's a buying aid or even a cultural experience. Glossy ads in fashion magazines are part of the "art" and "positioning" and are seen as less intrusive than advertising that really "gets in the way" of reading an article online. The same goes for billboards by the highway: an eyesore to some, they're a part of cultural history to others -- and hence, provide free buzz over and above the advertising cost. Burma Shave was before most of us were born, but chances are, you've heard of the roadside signs.

4. Is in a place online that people willingly go to or are addicted to, rather than being an app that is a bit cumbersome to use, take-it-or-leave-it, overly incentivized (paid in points or cash to "surf,"), or weakly appreciated but maybe a flash-in-the-pan. Related to this, the user base has to understand what the owners plan to do around advertising and what kind of "trade-off" they can expect. Do they get involved in using something for one reason, then find it's infected their user experience or device (i.e. "scumware")? Or is the format and the trade-off relatively transparent?

5. Isn't susceptible to "banner blindness". For the time being, we can consider this one relatively unimportant, as initially, enough advertisers will be lining up to try new things where the audience is big enough and attention can be grabbed. But performance marketers are turned off by ads that don't perform, and historically these types of ad formats have had limited upside when compared with personal, anticipated, and relevant communications (especially when the latter are connected with keywords). You can be "big" with the support of brand-building advertisers, but with the approval of direct marketers on top of that, you can be huge... because then any advertiser, large or small, can justify it to themselves or to someone on their board of directors. And agencies too can come up with those justifications.

To look at some quick examples:

  • Intrusive or oversized display ad formats -- leaderboards, "popovers," garish animations, etc. -- have had mixed success. They've driven online advertising to a degree, but somehow got surpassed by little old search, despite their reach. That's because they fail on counts 3, 4, and 5, and aren't even all that great on 1 and 2.
  • Weird apps like Pointcast, eTour, and Gator eventually fail because people uninstall the apps, don't install the apps, etc. Performance is uneven and users squeal. To incentivize users to do things they wouldn't otherwise do, you either deceive them or pay them too much (thus killing profit). Fail all around.
  • Point 4 relates to Facebook -- in both senses. The network effect and addiction factor actually outweigh the fact that Facebook has been particularly brazen in doing wacky, unpredictable, privacy-invading things to its users. Facebook is very strong on point 1 and has point 2 covered also. Because its audience is very large, it can be cautious relating to points 3 and 5, monetizing below "potential," thus leaving long-term potential on the table. Huge win.
So how about Twitter? Twitter's scheme sounds like it will largely succeed on points 1 through 4. The ad revenue, once disclosed, will appear pitifully small for the first year or two. As long as trust is built gradually and testing provides insight, that revenue should pyramid up over time.

Some will question whether users will remain addicted to Twitter long term. Facebook is an entire social environment, and Twitter still feels like a "feature," a quick hit, despite a large user base on paper. That one hangs in the balance. Perhaps the litmus test for any would-be top-tier destination would be: are users choosing to download and keep their favorite mobile app related to that content, brand, function, or community, in the most accessible place on their mobile device? Will people get bored with them and stop? Will ads be easier to ignore on mobile devices? Will people look for versions of apps that allow them to ignore ads? (That's where point #3 really comes in.)

Change will be rapid, but based on these criteria, it appears that Twitter has the correct fundamentals and the right strategy in place for a long-term win. But if Facebook has a two-year head start here, you still have a nagging feeling that Twitter just needs to keep hitting certain user targets and to look reasonably dangerous revenue-wise, for the more realistic goal of selling the company to Google or Facebook.

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Posted by Andrew Goodman




Friday, September 25, 2009

To Ev and Biz: Click Arbitrage Tips for Twitter

Hi Twitter,

In light of your impending $1 billion valuation, juxtaposed with Bill Tancer's observations that Twittermania might just be leveling off, we thought we'd propose an easy, short term way that you can cheer up your investors and slow the burn rate on the large sum of cash they're about to fork over. Slower losses, less buyer's remorse for the investors... while you get the business model really figured out.

The beauty of it is, our method increases your traffic and member base, rather than demotivating your existing user base.

Since everyone from Google to Seth Godin to Iran has been donning hats ranging from grayish to dark black this week (Sidewiki, Brandjacking, and nukes, respectively), we figured our plan might not even get labeled evil. Ethics, schmethics.

The idea is simple. Buy Google AdWords keywords on every topic under the sun and run them globally, avoiding the US where the Quality Score bar may be a bit higher. Bid low. Use a lot of automation and dynamic keyword insertion.

Let's say someone is reading an article about the fashions of the G20 leaders and learns that one of them was wearing a Hermes tie. So for some strange reason, they go to Google and search for "G20 Hermes Tie." You are using an automated tool to build ad groups around broad matches of major breaking news items, like G20. So of course, you've got this one covered!

Example ad:

G20 Hermes Tie
Tweet or read tweets about
G20 Hermes Tie. 140 chars. only!
http://twitter.com

Now, you set up a custom landing page loaded with relevant text ads (from another CPC ad network, say, Yahoo), and hope the resulting ROI on the arbitrage is at least breakeven. As a secondary goal, you hope more people sign up for Twitter accounts. Insofar as this turns a profit, you can even cut into the monthly cash burn.

Target average CPC on text ads in USD: 19 cents
Target average revenue per click on same ads: 25 cents

Profit on ten million clicks per quarter: $600,000
Profit, minus management fees: $450,000

Annual revenues from ads: $10.0 mm
Annual profit: $1.8 mm (gotta start somewhere)

Annual traffic increase: 40mm visits

Presto, now you're monetizing and adding visitors without even placing ads on existing pages. Just like eBay does!

If you run into Quality Score problems - no problem. There is still a massive content targeting inventory you can use. That's a legitimate way of building an audience. And oh, so, so, so much cheaper than Yahoo's $100 million planned ad campaigns.

Your traffic and user counts will resume growth, and Mr. Tancer will have to admit as much.

Good luck with it! We know you don't need the money, but we sure are curious as to how you will eventually monetize the Twitter juggernaut. You could charge corporations for some way of putting a shiny face on their brand reputation, but something tells us this could blow up in your face.

Sincerely,

The Team

P.S. - You're welcome.

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Posted by Andrew Goodman




Friday, August 07, 2009

RSS: A Stalled Standard, But "Not Dead Yet"?

Blog and RSS advocates are devoted to the core. Only a couple of years ago, as so many factors appeared to converge to make feed readers the geek's information overload management tool of choice, the future seemed limitless. It only seemed fitting that Google acquired Feedburner.

The difference between RSS and old ways of opting in, though, is surely the issue of "breakout". Did RSS really ever cross the chasm from insider adoption out to being a mainstream technology? Nope.

Compare how things used to be with email. Even if you were a relatively unknown newsletter publisher, you could eventually build up your list to 10,000, 20,000, or more -- just through opt-in (not even counting swaps and "JV's"). Popular lists reached 200,000, and more, and those were just pinging companions to a popular content site.

RSS subscription worked differently. People had relatively strong feelings about how many feeds they'd sign up for, if they bothered at all. And suddenly, there was a host of other ways to find the content you loved, anyway -- Twitter, Techmeme, Digg, Sphinn, email, Facebook, etc. -- so even a lot of geeks curtailed their RSS habit.

Don't get me wrong, lots of people use it differently, but as adoption waned, it seemed less important to us here to bother displaying a "subscribe to feed" logo, and so forth. We started tweeting, Sphinning, etc., and hoping others would too.

Lee Odden over at TopRank Blog takes a slightly different view. Lee just posted the Top SEM and SEO Blogs list, in order of RSS subscription. In principle, I feel strongly about subscription, but I notice that many good blogs have only in the low thousands of subscribers. I asked Lee whether it was still worth paying attention to RSS. Here's what he thinks:

"Looking at the RSS subscriber counts for the top 10-20 blogs doesn't make it seem like RSS is dead just yet. For example, Search Engine Land has 9,500 followers on Twitter, and 40,909 RSS subscribers as reported by Feedburner.

"Twitter may be shiny and popular but not exclusive of RSS content consumption. Personally, I like to share both metrics on our blog. But that's just me.

"The AdAge list considers more variables and that sort of thing is likely to be a much better qualification of what's a 'top' list. In the end I think that decision is really up to the individual and lists are just puffery. There, I said it."

Well said, Lee.

Still, the fact that the top sites in the search marketing industry "only" have around 40,000 RSS subscribers despite their large numbers of daily articles and channels, shows that RSS subscription reaches its limits a lot sooner than email used to back in the day. It's a different animal. I tend to agree with Lee, in the sense that, as one of Seth Godin's all-time classic posts explains, Small is the New Big. You can choose between a million weak ties, or a few thousand strong ones. The strong ones are meaningful. They translate into real conversation and real connections. And best of all, they aren't spam. It's probably fitting, then, that Godin's blog currently sits at #3 on the Ad Age Power 150. And Search Engine Land sits pretty at #1.

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Posted by Andrew Goodman




Saturday, June 13, 2009

Google to Hand a Huge Opportunity to Twitter?

Remember how Yahoo helped Google rise to prominence, then dominance, ultimately obliterating the search and portal brand that gave it that timely helping hand? If you've been in the industry less than five years, you don't. In 2001, Google's future was still far from assured. But the power its brand gained during its two-year partnership to display Google results on Yahoo did serious damage to Yahoo's brand, and bought Google the credibility it needed to move to top-of-mind as the world's leading search engine.

Is Google about to do the same favor to Twitter? On the surface, it seems that adding microblogging search capability that features mostly Twitter results would only benefit Google, by giving it equal or superior capability to the as-yet-to-be-honed Twitter Search. Another feature to solidify the world's leading search brand. So as for whether this helps Twitter do to Google what Google did to Yahoo: probably not. Google today is far more than Yahoo was in 2002-2004. Still, it's interesting to contemplate the possibility that a deal that looks only so-so for Twitter might have a salutary effect on Twitter's already strong brand, and turn out to be the mainstream exposure they needed to go from hot to white-hot.

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Posted by Andrew Goodman




Saturday, June 06, 2009

Twitter Founders: Ain't No Follow-Back Boyz

Interesting piece at ReadWriteWeb about how the Twitter insiders actually use Twitter. Called out on their idiosyncratic use which doesn't resemble that of some power users, Ev Williams responded directly via email. A highly relevant excerpt, to me, is:

"Many people fall into the trap that you should follow all or most people back out of a sense of politeness or so-called engagement with the community. But the fact is, having more followers does not give you more time in the day (as much as I'd like to sell that). At a certain point, you're not actually reading any more tweets by following more people -- you're just dipping into the stream somewhat randomly and missing a whole lot of what people say.

"That's fine, but I believe people will generally get more value out of Twitter by dropping the symmetrical relationship expectation and simply curating their following list based on the information and people they want to tune in to."

The argument that the developers' own use of a tool affects the company's approach to building the tool, and its sensitivity to different user constituencies, is pretty much specious. I don't expect the developers of Word to be sending memos inside a law firm, I don't expect AdWords product developers to open an online apparel store, and come to think of it, I don't want to know what's on Steve Jobs' iPod, or how often he listens to it.

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Posted by Andrew Goodman




Tuesday, May 19, 2009

Is Guy Kawasaki Singlehandedly Ruining Twitter? (Part 2)

I said a lot of overly theatrical things about Guy Kawasaki in my last rant about him: Is Guy Kawasaki Singlehandedly Ruining Twitter? (Part I). Included in these were suggesting that Kawasaki was a "politician" who should never run for office any higher than "small town mayor"; that his tactics could turn Twitter into a "digital trailer park"; that he was like the regional manager of a vacuum cleaner direct sales organization; and that he would soon grow a mustache and begin smoking unfiltered cigarettes.

And for these indiscretions, I would apologize if asked. But not for stirring up the serious underlying debate about the unfortunate potential for Twitter's brand to degrade every time some spammy tactician auto-follows me, or you.

Is there a more charitable interpretation of Guy Kawasaki's Twitter antics than the one I put forward? Yes, there is a more charitable interpretation. If you choose to interpret it this way, I'd understand. It's how I choose to approach certain other seemingly annoying personalities myself. Here's an overview of how the argument might go.

Kawasaki's heartfelt personal insights (recent, and longstanding) combined with the range of favorable accounts of his accomplishments and personal qualities inevitably humanize a figure that in Part I, I'd only sought to demonize.

[Please keep in mind that I didn't set out with the intention of demonizing any individual. My complaint with him was actually pretty specific: his material in the SES keynote, and the approach to marketing it encouraged. It's one thing to be a well known underachieving spammer, telling people how to spam. Audiences know how to read that. But to see someone considered an eclectic, cultured, community-savvy leader and to turn around and violate both the spirit and letter of marketing ethics -- and to encourage others to do the same -- was bizarre to me. I've been to dozens of SES conference keynotes. Many have been provocative. A couple have violated basic keynote etiquette by being, umm, boring. But none (though Jason Calacanis came close) have been so hypocritical, self-serving, and silly as Kawasaki's Twitter advice. It was a keynote only because of his prominent name. The talk would have been more or less fine had it been a rank-and-file panel at Pubcon, for the gotta-learn-all-the-tactics crowd.]

The Case for Kawasaki as Ethical Showman

So thinking about the real human being that lurks behind the current public persona, I was reminded of a couple of people who have made millions being showmen and who are well known for being intelligent, cultured, thoughtful, and caring -- behind the scenes. (And I'm not even counting Howard Stern, probably the most polarizing example of someone like that you can think of.)

To go with one example, I've always been a fan of the financial analyst Jim Cramer, and remain so to this day. The Cramer many people know today was the sheepish fellow who was recently called on the carpet by Jon Stewart, made to atone for his pro-Wall-Street cheerleading, picking bad stocks on his show Mad Money, and all manner of other damage he'd done under the cover of showmanship, propped up by an endless bull market.

The general crowd reaction to this Cramer, I felt, was unfair. They didn't "get" Cramer. The real Cramer who was always the slightly disadvantaged Harvard boy who never quite fit in on Wall Street. The one who left Wall Street. The one who started up TheStreet.com (how many people can point to an accomplishment like that, for heaven's sake), which despite many ups and downs remains as one of a tiny percentage of "dot com" IPO's that has remained independent and solvent to this day.

When Stewart "outed" Cramer for telling people about shady tactics that Wall Street commonly used to create false futures activity overseas in order to fool the opening markets just long enough to help a trader liquidate a large position, the assumption was that Cramer advocated shady tactics. But that's an overly literal, "flat" way of listening to a smart man who is nuanced in how he communicates. I interpret Cramer differently, because I feel like I get him. I think in many cases, he's been out there trying to warn people: this is what Wall Street is really like! Don't be scammed. Buyer beware.

How does it benefit Cramer to be so transparent about Wall Street's (and his) shady tactics? It doesn't. It's a public service.

(So there, I do see an interesting parallel between Cramer and Kawasaki. Kawasaki jokes: "I may be a spammer, but I'm a transparent one." In the SEO world, there have been a few folks like that. Name your favorite transparent spammer SEO.)

The attention people suddenly paid to Cramer as a villain was nothing less than silly. Ultimately, The Daily Show taking a one-day interest in Jim Cramer's antics on Mad Money was something agreed to by both Cramer and Stewart for one reason alone: further showmanship leading to ratings. I imagine Jon Stewart is aware that there are worse villains to pay attention to than Jim Cramer. After Bush and co. left the scene, it got harder to fill air time with progressive rantings against the powers that be. And Stewart is paid millions of dollars a year to fill air time.

After the dust settles, I'm convinced that Jim Cramer will continue to be two things: (1) a decent man with a lot of talent who has more courage and scruples in his little finger than most folks on Wall Street; and (2) a brilliant opportunist and showman who (much like a Bill O'Reilly, Jon Stewart, or Howard Stern) has risen to a position where he can make serious coin and in some way "get back at" the people and system that didn't afford him the same opportunities as his wealthier peers. And he has every right to be both.

Kawasaki, like Jim Cramer, is a bundle of contradictions; a hero to some, a villain to others. On the positive side, Kawasaki's antics serve as a canary in a coal mine to help Twitter regulate itself before it's eaten alive by abusers. Already, Twitter is tightening up its rules, formal TOS, and API policies, angering some third party developers but pointing towards an ideal of "normal" Twitter usage as opposed to "spammy" usage. In that regard, Kawasaki's massive Twitter presence can be seen as doing the growing company a great service... almost like ethical hacking.

Opt Out??

Like any would-be plague on society, as many commenters on this debate to date have implied, the pivotal question is: can you opt-out? If a few stupid people choose to subject themselves to bad ideas, interruptions, etc. - it shouldn't affect me, right?

On that count, we still have a debate on our hands. That's how I've always felt about Jim Cramer's "work"; just as how I've always felt about people buying ineffective contraptions and cheap jewelry on The Shopping Channel. If it's not for you, don't do it, right? Unfollow, unsubscribe, opt out. Change the frickin’ channel.

But: what if, after unsubscribing, unfollowing, and opting out, the problem is still getting worse?

One smart reader of the last column referred to the problem as “digital blight.” Take digital blight, and accelerate it through social media contagion, and you’ve got a recipe for disaster.

The upshot is: I do still think Kawasaki is a spammer. And thousands of people are deliberately following his tactics. Many others are accidentally following them, or advocating them, because they haven't taken time out to think it through (or they didn't see the puerile SES keynote).

A friend of mine, someone with a lot of respect in the business world, followed me back recently when I followed him. His automated message pointed to a series of Twitter tips posted by Kawasaki last November. Without even trying, within seconds, I was able to discredit three of the five tips as spammy and/or contradicted by what Kawasaki actually does. 60% of the advice is easily refuted, and yet this is a "great article" that my friend sends to every single person who follows him (thousands to date)? "Great"? How about something by Malcolm Gladwell, maybe? Why was an otherwise smart person bamboozled into shilling for the King of Shill? Peer pressure, maybe? Or perhaps respect for Kawasaki's past accomplishments. Or the jokes about penis size and shiitake mushrooms were oddly disarming.

Maybe there's more to say about the problem of digital blight. Time allowing, I'll complete that thought in a Part 3. In the meantime, I welcome your thoughts.

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Posted by Andrew Goodman




Monday, May 11, 2009

50 Ways to Use Your Hover (Part 1?)

Method 1: Make that link right, Dwight.

After getting sort of hooked on Twitter and seeing the clear need for the URL shortening & forwarding services such as bit.ly, I really don't know why anyone would use anything other than Hover to shorten and share long URL's. With this service, you get a dashboard that makes it easy to manage all of your URL "Hovers" (forwards), but it's with your own personalized domain.

I've found it fun and useful on several fronts, but one feature is really handy. Several times, I've put the wrong link in, then posted the forward to Twitter telling everyone about some article or post. With Hover, it's easy to correct my mistake. I go into my own domain's back end, click on the edit icon, and fix up the forwarding info for the URL I've posted. Now the public forward goes to the correct (long, unwieldy) URL; problem solved.

Disclaimer: Hover is a client! I didn't quite twig to how cool it was first either (I made them explain it patiently a few times, at least). Although it works best with your own domain or domains (and gives you an incentive to find cool shorter ones to call your own), you can give it a spin for free using Hover's domain. Did someone say "no risk free trial"?

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Posted by Andrew Goodman




Thursday, May 07, 2009

Twitter and the Visible Web

Nice post by Andy Beal about Twitter's plan to crawl links in posts and index those web pages.

Indexing a significant part of the web? Developing a ranking algorithm? Twitterians, is that a threat, a promise, or some kind of masochism? Have fun guys!

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Posted by Andrew Goodman




Wednesday, April 22, 2009

Twitter Auto-Follow Limits Rankle Some

Some third-party developers don't like it, but I think for those being limited to following 365,000 new people per year, life will go on.

I guess it all depends on what you call "getting your act together". To me, it looks like Twitter is doing just that. As for TOS p's and q's, it's a lot to expect of such a young company to have all of its ducks in a row. Twitter is significantly younger and has a far lower headcount (and burn rate) than Facebook.

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Posted by Andrew Goodman




Monday, April 13, 2009

Perception, Not Reality, Could Topple Google in Search

Reading recent Twitter-will-crush-Google musings, it looks like the reasoning goes something like this: Google cannot do real-time search as well as Twitter. Ergo, Twitter will take over as a search engine people turn to for this type of information.

There is a chance that a growing Twitter could make significant inroads on that front. But it wouldn't be because Google lacks the capability. They can develop or add this relatively quickly on a variety of fronts, and the results could often be more useful. Over the weekend I typed "Kenny Perry" into Google and saw a custom result at the top of the page that actually noted his position on the current Masters leaderboard (at the time: T3). Adding more real-time capability isn't something that Google just thought of yesterday. What people are really saying when they say "Google can't do real time" is "Google isn't Twitter." Twitter is the current Lovemark in the space. If you're not them, then you're something else. No feature build will fix that, because it's all about who's there at what time. It's not like Google can index your direct messages inside Twitter or organize all the information in the same way Twitter and Twitter apps do.

The fact that Google can do the immediacy thing, and could add more of it to the mix, might not make any difference to users, then. If people want to use Twitter as a starting point for their social and informational lives, then increasingly they will.

And of course, given Twitter's major shortcomings, it's very possible that it's a placeholder for a sentiment of community and immediacy that is happening at a certain place in time. As I wrote here on a perfect April day eight years ago, online communities endure as platforms come and go. (Remember kids, online community is like Christine, the haunted 1958 Plymouth.) As sure as day turns to night, in a few years, everyone will migrate somewhere else, and you'll have to migrate with them to stay connected.

As community and peer based thought have risen to the forefront, we may finally - after a ten-year run - be seeing the all-powerful concept of "search" losing ground to a new dominant metaphor: "share". By "losing ground", I mean this could be merely as a concept, or it could be in the sense of "what's the first place people think of to go online to solve a problem or get information?" By and large, it's been Google in this decade. Many have said that will give way to Facebook, as if one is somehow mutually exclusive to the other. Still, the fact that Google "isn't sticky" -- a threat many analysts used to level at the search giant, and one that increasingly looked laughable as repeat visits and profits piledu up -- could indeed be its Achilles heel in the coming years.

This shift didn't just happen yesterday, but it seems to be gelling.

Of all their many strengths, Google's key weakness is that they really own none of the top-of-mind brands in collaboration, community, and sharing (not counting GMail and GTalk of course, which are formidable but also private, and not counting YouTube): Facebook, Skype, Twitter, all major brands that somehow Google couldn't surpass with in-house offerings.

Not only does this weakness threaten to paint Google in a light it's never been comfortable with -- big, impersonal corporation -- an acquisition of any of these properties wouldn't do much to change that situation because the user bases would lament the loss of an "independent" community. Yahoo began facing up to that difficult paradox more than a decade ago, and arguably hasn't done much to solve it. Independent digital brands engender a lot of loyalty and enthusiasm for their pioneering spirit, but they have trouble scaling, so they sell out to the big brands. And that allows the cycle to begin anew.

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Posted by Andrew Goodman




Friday, April 03, 2009

Whither Twitter Under Google?

Techcrunch is tantalizing us with talk of late-stage Twitter acquisition talk.

If true, it leads one to wonder: what will a Twitter universe look like under Google? Clearly, it will allow the leading search engine company to more accurately graph the social web, and the reputation that follows information. It will also require a close eye on various techniques used to mimic hotness.

We've already recently weighed in here, not only predicting that an acquisition would happen (by mid-May was the conservative take). And in terms of the valuation and trajectory, and the ultimate outcome (no doubt, ubiquity and resources for stability and growth), we're sticking to the story that the pattern resembles YouTube's.

Seen on Traffick two weeks ago: Yes, Twitter's Business Model Is To Be Acquired, and Yes, It Will Be

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Posted by Andrew Goodman




Monday, March 30, 2009

Is Guy Kawasaki Singlehandedly Ruining Twitter? (Part I)

Guy Kawasaki gave a controversial keynote talk about his legendary Twitter tactics at SES New York last week.

Sitting a few chairs from @LisaBarone and like Lisa, tweeting my response to the session, I couldn't help but wonder if we were watching the same presentation. While I was unsettled by some of what I was hearing, I also felt like the presenter was self-deprecating and self-aware... and like he said, transparent about his sometimes aggressive tactics. @LisaBarone, on the other hand, "threw up a bit in her mouth," (OK those were words put in her mouth by @dannysullivan), thought Kawasaki was "making an ass of himself," etc. I just didn't see the evidence. I thought @LisaBarone was overreacting.

After digesting the entire talk for the rest of the day, Lisa's position grew on me. In fact I started formulating an even more extreme dislike of Kawasaki.

I'm relatively new to Twitter, but then again, I'm not slow :), so I have seen these kinds of trends come and go. Mostly, since the late 1990's, what we've seen are spammers in various channels tell us that they're the cool ones and not really spamming. This went for email, "inventions" like "push," new ad formats that users hated, Claria popups ... and so on.

I'd love to be able to make the point that it's not about the man, it's about the tactics. As honorable as that might be, it's impossible to separate the two... as you'll see.

Let's take the first thing that really made my blood boil. Kawasaki kept trying to ingratiate himself by saying "well someone out there is going to say I'm a dick for saying this, but..." and various references to the way his critics slam him. At first it seemed open and honest. In reality, it's a divide-and-conquer method that doubles as a way of constantly echoing the notion that he's important, talked about; essentially, the center of attention. For some reason. The nice act contrasted with the "he's a dick" reality. So which is it? Certainly, quite a slick politician.

And yes, he even has those types of operatives who will sidle up to you and say "you know, he's really quite a nice fellow when you get to know him deep down." Yecch.

Speaking of divide and conquer: he also made regular use of the old false dichotomy trick. According to Kawasaki: either you're a money-grubbing, social-media-abusing pusher of some product, service, or yourself to the waiting Twitter masses, or you're a frivolous nobody posting about your cat, or the new hairbrush you bought, or the fact that you brushed your cat with the new hairbrush. So those are the only two options? Building a genuine professional rapport or exploring mutual interests with a small to medium-sized circle of people? That has no place in Kawasaki's dichotomous world. People who aren't on the A-List are really just nobodies who should be spammed by A-Listers; that's Kawasaki's mental atlas. Funny that's how it is, because Kawasaki wastes a lot of breath trying to say that he feels just the opposite. He protests too much, a lot.

I don't know what office Kawasaki thinks he's running for, but I hope it's not much higher up than mayor of a small town. What does he take us for?

Next in Kawasaki's demagogue's (and Twitter is nothing if not a place where you'd better have your demagogue hat firmly in place) bag of tricks, he castigates people who don't follow everyone back because they're arrogant. By not "reciprocating," non-followers are showing they "don't care about their followers." Sure: he's trying to make the point it's not a broadcast medium. Well hold the phone: broadcast is pretty much all he uses it for, and not even interesting or ethical broadcast. So back to broadcast and fake reciprocity: remember when people had blogs and newsletters (even talk shows) and weren't required to "follow everyone back?" When it was OK to be an authority or a celebrity and to respond to some viewers, some fan mail, some email, etc.? Has Guy Kawasaki singlehandedly swept a wand of democracy over all media communications? Not on your life. He's on the A-List, and wants you to know it. More on that below.

The thing about Kawasaki's follow-back habit is: it's fake reciprocity. He isn't actually following. Following everyone back is like the old idea of exchanging links with everyone and anyone, in the hopes of gaming Google. You don't actually have any hope of really following 100,000 people, so instead, you hide behind TweetDeck and other apps. As Kawasaki points out, he does read all @replies and Direct Messages. But don't believe that the "purpose of following everyone back is so people can direct message me." The purpose is to get people used to the idea that a follow should be reciprocated with a follow. That way, folks who go out and follow 200,000 people have a greater chance of being followed by, say, 160,000.

Before I forget, on that A-List thing. Kawasaki introduced his talk by telling us he dismisses the whole concept of "A-List" bloggers, celebrity Twitterers, and the like. It's perhaps more telling than he realizes that one of his early slides illustrates the principle that Nobodies Can Be Somebodies. Nobodies Can Be Somebodies! Yay! You poor loser who got picked on in high school and have only 14 fake online friends, there is still hope for you! Pastor Kawasaki says Twitter loves you! I can almost taste the Kool-Aid on my lips.

If the word "nobodies" is so top of mind for him, I suspect Kawasaki never left the A-List mentality. Says he, we're supposed to be celebrating the fact that information "bubbles up," rather than being "top down." So why then does he have to make such a big deal out of the fact that "ReTweets" (signified by the convention of signing posts with RT in Twitter to indicate you're reposting someone else's tweet) are the real proof of Twitter reputation? Well, because he's mastering the skill of pretending to be the most popular, by that single measuring stick. And he makes fun of Ryan Seacrest for having so many followers... like that's a yardstick. I feel myself starting to like Ryan Seacrest.

Kawasaki trots out the list of the "retweet leaderboard". And guess what, he and the Mashable guy are fighting it out for top spot. Out of everyone in the world! But guess what else. Kawasaki spends a good part of his day using and designing tactics to win that fake race (much automation and staff help is involved).

Guy, Guy, Guy. We've been down that road before. Remember? You could game Google by getting a bunch of links to your site, even buying them or joining a silly link farm, so that "reputation" could be mass produced?

The problem is, no one is buying it anymore, and algorithms you make up because you've pre-gamed them before a search engine has even begun using them as a signal: well let's hope the search gods don't fall for it.

Automated reputation enhancement does nothing to convince us you have a strong reputation. So that's why you're reduced to selling your self-referential tactics to folks who want to use them to destroy the channel alongside you, and maybe, just maybe (with all the hope of a low level MLM participant) wring just a little cash from some spammy tactics. Here's hoping they aren't people who run real businesses: it's all too easy to squander your hard-won reputation by polluting a social channel with your hard sales tactics. (Hmm, why have I switched to the first person? I think this rhubarb is really heating up.)

Here's what really turned me off. I don't have the time or inclination to research them in depth - and am turned off in the extreme by the number of times Kawasaki shilled for them - but I gather he has some involvement with and equity in two companies, AllTop and Adjix. When you follow Kawasaki (and his team of ghost-tweeters, and his automation methods), you get frequent messages on stupid, random topics (or hey, they might be relevant to you because you mentioned a certain keyword; problem is, the dude responding is always Guy Kawasaki, who can't possibly be genuinely interested.) Kawasaki illustrated this onscreen, by posting some stupid peanut butter cookie recipe and showing how quickly other (mindless followers, employees, or whoever) Twitter users retweeted the recipe. All hail the Peanut Butter Man! I'm throwing up in my mouth.

So. The reality on the ground: Kawasaki pretends to follow a huge number of people, but doesn't. Spams that huge number of people, in the hopes of self-promoting and in the hopes of boosting the traffic of this uninspiring AllTop site - presumably, enough to cash out of the thing before it fades into oblivion.

So why do I think that he could singlehandedly ruin Twitter, if its brand, community, and technology aren't robust enough? I think mostly about how a fashion-forward digital brand can be reduced to a sort of flea market image, just by the actions and presence of a prevalence of certain kinds of members. When that happens, eventually the value declines (think eBay) and the cool kids start scouting around for somewhere that isn't overrun by hawkers and pitchmen and auto-generated babble. To say nothing of desperate losers trying to build their "downline."

If you strip away the black turtleneck (please don't), the Silicon Valley pedigree, and the attitude, Kawasaki can be boiled down to the equivalent of the regional sales manager of one of those vacuum cleaner sales operations -- the guys who actually admit to being in what is called "the direct selling industry." Trying to whip up enthusiasm among his subordinate product pushers, making an uncomfortable number of penis references, and flashing his lifestyle and (borrowed) fancy cars to distract the current crop of reps from the fact that they haven't made a cent yet. I wouldn't be surprised if Kawasaki soon grew a mustache and started smoking unfiltered cigarettes.

If everyone listened to Guy Kawasaki and admired his Twitter tactics, Twitter would start looking more and more like a digital trailer park. Hey, that's no shame and it's no crime. MySpace's digital trailer park is a pretty big revenue generator. But is that really where the Twitter founders expect and hope to wind up?

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Posted by Andrew Goodman




Thursday, March 19, 2009

Yes, Twitter's Business Model Is To Be Acquired, and Yes, It Will Be

This is the type of subject matter we set out to write about nearly ten years ago when we launched Traffick. And I'm a little surprised that we're still writing about it.

The upshot is Google is a massive funnel today. So not all of its individual lines of business need to make near-term profit. But the whole enterprise, right now, is geared towards dominating core streams of user attention and user functionality, with enough of that attention being monetized through advertising to pay for everything. That's the kind of scale the major players in the same race are all seeking. And it colors the prospects of standalone services looking to be acquired (or pretending to want to go it alone).

When we launched this site, our subhead/tagline was "The Guide to Portals" or "The Portal Portal". At the time, the "portal wars" raged. They don't call them that anymore, but the principle is still the same. In this emerging space of core online standards or starting points, or diversified digital lifestyle brands, or however you want to describe them, there's room for only a few major players. Since AOL took the lead in the area with Yahoo following on as the savvier version of same, the leading digital lifestyle monopolists have knitted together their various services in such a way that they keep you in their garden, or at least coming back. They had various grand visions of how they would accomplish that; few predicted that one feature -- search -- would be at the heart of the grand takeover of first place by Google, which hasn't looked back in years. Many of those schemes revolved around the idea that the ISP would be the lock-in point. Some thought nice features (better email) would do it. Microsoft hoped the browser or the OS would return them to universal dominance. Just buying up a big enough percentage of the important online stuff was another theory. IAC Interactive pursued that path, but never far enough to get anywhere close to scale. The others have played the "buy not build" game enthusiastically at times. They have to! User loyalty can't always be produced out of thin air. Orkut, Knol, and a good list of other Google inventions may never dominate their verticals.

Every so often a standalone service would emerge that would be so popular on its own it would be eagerly snapped up by one of the leading players. Sometimes it helped them build a nice feature (Rocketmail became Yahoo Mail) or add something viral and even more cool than many realized at first (ICQ by AOL). Yahoo made many great bets, though paying staggering sums for some of them: eGroups and Geocities beefed up community. They made some subtle bets (Flickr) and some awful ones (Broadcast.com). Their aggressiveness has left them where they are today: in second place (not bad). History buffs know that many wannabes (Excite, AltaVista, Go2Net) died unceremoniously, failing to reach top of mind.

Yep, this is all about scale - sustainable scale, but scale to be sure. Few of the standalone services would be household names today without those mega-acquisitions. They'd be popular, and bankrupt.

Google has made some subtle acquisitions (Applied Semantics, Blogger, Dejanews, Keyhole) and some stunning ones (YouTube), while developing far more great products and functionality in-house than any of their competitors. Without both the subtle and stunning acquisitions, they most certainly wouldn't be in the position they're in today.

In any case, this post is supposed to be about Twitter. Nielsen's recent report shows the service growing a stunning 1,328 percent year over year.

How to interpret this? One one hand you have the camp that understands what such a rapid growth rate means in this space. It's a rush of user attention - a locus of operations for the savviest of users that is now crossing the chasm to become a mainstream attention - that the big guys just cannot ignore. The month-over-month growth numbers are hugely important to anyone watching.

On the other hand you have the chicken littles who say that companies like Twitter have no business model.

Both are right. It's much harder for a get-big-fast online service to build a business model on their own than it is to sell. On the other hand, if they dominate a category, they can be pretty scary to the big guys.

The best precedent would be with YouTube. YouTube could have made a lot of noise about wanting to stick around for the long term, but where would they be today had they not sold to Google or someone else? It takes a long time to continue growing and investing in a platform before monetizing in a way that doesn't kill your user base. On the other hand, Google Video had largely failed. YouTube was already the People's Platform for online video. In the end, Google got great value for money. They talked the price down by referring to the copyright threats that were in the air.

The "poor man's email service" that is Twitter is both growing so fast that it cannot be ignored, and it has no credible way of handling all of the coming hyper-growth *and* monetizing in time to keep itself afloat financially, despite raising large sums of money. (Facebook's in a similar position but that's a separate topic.) Like YouTube, it is hurdling headlong towards an acquisition, in a game of chicken with the leading potential acquirers to see who can hold out the longest.

Which brings us to the question of which gigantic company can afford to underwrite such high-volume expansion that will eventually funnel into a bigger monetization picture, as Google did with YouTube.

It's an uncomfortable scenario in that Yahoo has been forced into a frugal state, and simply cannot afford to acquire Twitter. That's most uncomfortable for Twitter, as it leaves them looking at Microsoft -- who took an expensive stake in Facebook -- and Google as the only two logical acquirers. Oddball acquisitions can happen -- see eBay & Skype -- but they aren't ideal in the sense that the oddball could get spun out again in a couple of years, and who's to say the oddball acquirer would be the proper environment for growth.

In a weird sense, Twitter is most like ICQ, in the sense that it's gone viral and offers a certain kind of immediacy at a certain moment in digital communication history. AOL isn't the kind of company that acquires a Twitter today, though.

For companies like Twitter, the messy and as-yet-unconsolidated patchwork left by the also-rans (Microsoft, Yahoo, AOL) in the digital space may be bad news valuation-wise, as it creates too many distractions for these lesser candidates, and points so heavily towards a single acquirer.

Make no mistake about it, if Twitter can't find themselves an acquirer with deep pockets, and soon, they are in deep trouble. They are actually growing too fast.

Eric Schmidt's comments about Twitter being a "poor man's email service" may have been even more telling than we realize. Twitter under Google could go anywhere, but the literal interpretation of its value is typically how Google would look at the value at first. Could you slap targeted contextual text ads next to people's Twitter streams -- that look much like a thread in GMail? Why yes. And how much money do those ads make for Google? A healthy sum, but nothing stupendous. So in looking at Twitter as analogous to GMail, Schmidt is actually trying to put a real-world value on the company. And he's trying to knock that value down a peg from the hyped values that refer to untried monetization methods.

A similar game of chicken happened before -- with YouTube. And the valuation was a bargain for Google and didn't exactly make paupers out of the company founders and their investors. If I had to lay down a chip, I'd expect Google to acquire Twitter by the middle of May. We'll see.

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Posted by Andrew Goodman




Friday, March 06, 2009

Why I (Finally) Got on Twitter

In addition to the hat tip to my colleague @mona_elesseily, who urged me to finally take the plunge out of Twitter silence, I alluded to "one part @BarackObama". But perhaps not in the way you might think.

It was just a couple of weeks prior to President Obama's inauguration when I kept hearing world leaders talking about their keen interest in resuming speaking with the United States. Imagine! Such a protracted period of suspicion and silence, turned on a dime by the election of one man.

"So the channel is open again," I thought. I was filled with hope for new global possibilities. Surely dialogue is a prerequisite to accomplishing pretty much anything at all. Two-way is ideal.

And then I thought about twitter.

It's not about how it has this feature, or "does this" or "does that". It comes down to: the channel is open. Period.

It was then I decided I didn't really need convincing anymore.

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Posted by Andrew Goodman




Friday, February 27, 2009

I'll Be Blogging Less, So Please Follow Me on Twitter

Sorry for the autobiographical tone, but this is navigational in nature. Not exactly a 301 redirect, but I am vowing to take the first baby steps towards sanity by seriously limiting blogging for the month of March. As a crutch, I'll need another drug, of course, and that drug will be Twitter.

A little bird suggested I try it, and now that I have, I am digging the logic already. I admit: I resisted the lure of the 140-character microblog up to now. Where's the substance? Will I get distracted? Etc.

But my hope is that blogging less and tweeting more will save time and also put me in touch with the thoughts of a highly select group of people who can help me think faster (and have fun doing it).

Catch up to me at: http://twitter.com/andrew_goodman

Blogging "less" here means that I will be making a conscious choice between serious writing, and the type of writing I do to stay fun and connected, rather than just have it all jumble together.

Serious writing:

  • Maybe someday, more work on "books" (never say never)
  • Reports, emails, proposals, internal Page Zero communications, website copy and white papers now and then, and the day to day written work that focuses on the needs of our clients!

Fun and connected writing:

  • Twitter - necessarily pithy observations and pointing to the best most useful stuff
  • A city blog: it's my dream to find the time to start a blog in the area of citizen photojournalism for my beloved Toronto, something that would capture a more varied flavor than existing entries such as Torontoist. This is very much on the back burner and would likely work better if I lived in a tiny village. :)
  • Just a personal blog. If I get around to it, I'll probably set up a personal blog as Danny has done with Daggle. I've meant to do that for years to discourage me from putting personal stuff here. Again, that's on the back burner but as with the city blog, I have the domain name picked out.

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Posted by Andrew Goodman




Tuesday, September 18, 2007

Is it Just Me Or...

Would you also prefer that Evan Williams, founder of Blogger, actually wrote stuff?

In other news...

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Posted by Andrew Goodman




Friday, March 23, 2007

Twitter: Jennicam For All

What if you were nobody, who became somebody, and there were weirdos who wanted to watch your every move? Let them, of course?

My friend Mitch Joel writes, in part:

I think the tremblings of Twitter and the growth of Facebook are pointing us to a new era in Branding. It’s here and we’re paying scant attention to it. Personal Brands are going to start growing to levels usually relegated to, what marketing industry experts call, “super brands.” Who needs Starbucks when you can have Scoble? Who needs Rolls Royce when you can have Rubel?

You're joking, right Mitch? Or is there too much ringing in your ears today from the echo chamber? We are going to have to have a good long chat about this in person so I can understand where you're coming from, because personally I will take Starbucks over Scoble and Rolls Royce over Rubel (as wonderful as these dudes may be). Maybe we can just chalk it up to Starbucks being apples, and Scoble being oranges.

It makes me think about Erving Goffman's concept of frontstage and backstage behavior. It's interesting that Goffman drew attention to the concept of the Operating Theater as a device to elevate the status of some medical professionals. The play's the thing.

This veneer of immediacy & transparency provided by Twitter is quite an interesting phenomenon. How are legends made? A lot of it is in what you leave out. If Twitter had been the saxophone-du-jour when Clinton had been running for office, you can certainly imagine that old smoothie twittering many (but not all) of his movements. John Edwards Twitters. I think this says a lot.

So here's what a heavily-twittered day might look like for me if it were today - and all the good parts were edited out, and the "bad," "less than inspirational," or "confidential" stuff were left in:

- 7:44: Woken by screaming of cat, Walter, at neighbour cat

- 8:03: Grind & make coffee. Starbucks beans, not fair trade. I made it too weak.

- 9:00: Threw water in general direction of neighbor cat, Giorgio, who torments Walter

- 9:14: Compliment Carolyn for emptying dishwasher the night before. I sure didn't do it.

- 9:41: Finally wearing pants.

- 9:59: Brief phone call agreed to contract with XXXXXXXX [sorry can't do full transparency on this one], same details as previous email exchange. Very pleased with 9-month duration.

- 10:07: Put in Respond.com quote for Business Liability Insurance, because I don't currently have any, to facilitate becoming an Authorized Reseller for XXXXXXX

- 10:20: Hiding in home office with door closed, hoping Carolyn deals with tradesman scheduled to arrive at 10:30.

- 10:41: Duct cleaning estimate dudes from Sears are late.

- 11:30: Banking errand. Resisted picking up takeout from Flip, Toss, & Thai. Or did I? The Emerald Curry is irresistable. Yesterday, my friend Raja made fun of my heavy eating schedule.

- 2:00: Client call with XXXXXXXXX (sorry this one is actually under NDA. so much for twittering!)

- 2:10: I'm gesturing with my right hand as I talk with XXXXXX. HUGE stack of parking tickets just fell to the floor! %$$!!

- 2:55: Tell colleague I'm swamped the rest of the afternoon

- 3:07: Nicest day of the year. Park car on Bloor Street, walk to entrance of High Park, go for run. Yes, I drive to my run which is only a 10 min walk away.

- 3:07: Twittering about running, but I'm really too lazy to run today. I usually am.

- 5:20: Knock off for Yoga - Carolyn's. I do a workout to make up for not running. I'd joke about ogling the Yoga class, but I don't even know what room it's in.

- 7:10: Sushi.

- 9:00: What Not to Wear

- 10:00: Catching up on storyboarding new site for XXXXXX, my second job (don't tell anyone)

- midnight: I love folding laundry!

- 1:00 a.m. Why can I not concentrate on writing this book chapter! 1:00 a.m. used to be the best time to write when I was 25 yrs. old!

Hmm, even with pretend candor I had to leave the "best parts" out. So isn't that what Twitter is about?

I'd love to see hyper-realistic Twitter reports for any of the following:

Richard Nixon
Lance Armstrong
Willie Nelson

Probably, though, I'd really rather not hear from:

Britney Spears (I get the picture from the paparazzi)
Russell Shaw of ZDNet (I'll stick to his blog)
Kirstie Alley
Carrot Top
My immediate family
Jerry down the street
Loud carpet store owner trying to get attention

There was a modern artist who used to chronicle his waking time every day as a discrete daily creation (using a stencil or rubber stamp type of printing), and that was about it. In other words, he shared one intimate detail with the world, but left the rest out. (Does anyone know the name of the artist? I'm having trouble finding this.)

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Posted by Andrew Goodman




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