Tag Archives: Business

An Intro to Social Data Portability

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Social Data Portability allows you to bring your friends, interests and relationships where ever you go across the web.  For users, it means not having to create a new account on every site, and having immediate access to your network of friends.  For businesses, it gives you more demographic insight into your users, as well as let you leverage the popularity of existing social networks to promote activity on your site.   In this post I will discuss the strengths and differences between Facebook Connect, OpenSocial and Sign in with Twitter and show a few examples.

Facebook Connect

Simply put, Facebook Connect allows you to build a Facebook application outside of Facebook. You can integrate with Facebook’s authentication, retrieve profile information about your users, allow your users to find their friends who have “connected” with your site, as well as selectively publish actions to a user’s activity stream.   Developing a Facebook Connect application requires software development chops but gives you access to Facebook’s 200m users.  Digg and CNN both demonstrate different approaches to integration.

CNN
CNN offered a live video stream during Obama’s inaugration.  It included a Facebook Connect application which allowed users to sign in with their Facebook credentials and participate in a live global chat.

Chattin' bout Barry

The participation numbers are staggering.  According to Mashable:

1. 600,000 status updates posted through the CNN.com Live Facebook feed
2. Facebook averaged 4,000 status updates per minute during the broadcast
3. 8,500 status updates were posted during the first minute of Obama’s speech
4. “Millions” of people logged into Facebook during the broadcast

These numbers would’ve never been achievable if users had to register with CNN to participate.  Recently, the Whitehouse has taken a cue and announced a similar application for it’s live video events.

Digg
Digg’s Facebook Connect implementation allows you to link your Digg and Facebook accounts.  Each story you digg, shows up on your activity stream (for all your friends to see).  For Digg, the beneifts are immediate, more people will see that I am digging stories and click back to the site.

Facebook Connect Digg

Signing Into Facebook Connect

Facebook Connect Digg2

Digg story on my Facebook activity feed

Facebook Connect is now also available for the iPhone.  This is huge and will create a whole new world of mobile social applications.

OpenSocial

OpenSocial is similar to Facebook Connect but allows you to build applications that run in orkut, MySpace, Hi5, Friendster, Ning and Yahoo! and other 3rd party sites.

Virgin Global Row
The Virgin Global Row is a one crazy dude’s story about circling Antarctica in a boat by himself (and raising some money for charity).  OpenSocial integration allows you to login, connect with other people who have joined the site, and push your actions on the site to your various social networks.

Open social options

Open social options

Google Friend Connect
Google has also release a set of plug n play widgets based on OpenSocial called Google Friend Connect.  Currently there are about 10 widgets available including sign-in, comments, polls, reviews, events and recommendations.  This is cool because it allows anyone to quickly and easily incorporate social elements to their site (no coding required).

Sign in with Twitter

Yep, you guessed it, sign in with Twitter allows 3rd party sites to publish activity to your Twitter stream.  One example of this is Spymaster (the Twitter game which equally amazed and pissed people off).

Spymaster
Spymaster is a game which allows you to go on missions, raise money, buy weapons and attack other spies (Twitter users).  Success is based on how many of your followers play the game and how often you send out updates through your twitter stream.   IMO the game is pretty boring although it is undeniably attracting a huge following and a really nice example of a successful viral campaign.

Bribing you to tweet about your activities

Bribing you to tweet about your activities

Real time spymaster activity

Real time spymaster activity

Conclusion

There’s a big battle over who will become the defacto social OS of the web.  In the future sites/widgets/apps will be social (and location aware), the question is where your data will be sourced from.  At this point Facebook is clearly in the lead, but Google has deep pockets and Twiter is making huge strides.  As Facebook and Twitter launch payment platforms, the opportunity to monitize through social ads and microtransactions presents a huge opportunity.  Got friends?


http://virginglobalrow.com/

Advertising Is Not a Sustainable Business Model for the Web (unless you are a Search Engine)

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The long-held myth that web companies can achieve profitability through free products, services and content solely based on advertising is fading.  The diminishing rates of online ads, and the slowdown of venture capital and IPOs, has led to a realization that a sustainable business model for web companies must have multiple, diverse, revenue streams.

VC Slowdown

Over the last few months I’ve seen a growing number of companies offering alternative strategies to generating revenue.

Subscription Services / Premium Content (Blizzard, New York Times, GigaOM, Forrester)

The most straightforward revenue source is paid subscriptions. Blizzard, makers of World of Warcraft, absolutely crush it.

“if [their] 10 million subscribers were to pay the regular $14.99 month-to-month fee, then Blizzard would fill its pockets with almost $150 million every single month… that means a revenue-target of more than $1.7 billion for FY 2008.”

While many media companies have experimented with paid subscription models, very few have been able to do it successfully.  The exception is research focused companies like Forrester which banks on corporates with deep pockets shelling out $700 for a 12 page report.  GigaOM and TechCrunch have also recently launched similar premium research and analysis services.

The New York Times recently released it’s TimesReader 2.0 Adobe Air client. While the client offers an improved user experience, I can’t ever imagine shelling out $3.45 a week for content I can get for free.  Though I would pay for their $3 iPhone app.

It’s possible that with the success of the Kindle, these paid content services will flourish in the future.

Freemium (Wetpaint, Pandora, Google Apps)

A variation on premium content services is the freemium model. Give away 80% of your service for free, and charge for heavy users who want more functionality or a better experience. Pandora, a music discovery product, recently launched a premium services which, for $36 a year, removes ads, provides higher quality streaming music and offers a desktop app.  A compelling offering for their top tier of users.

Wetpaint is another company that has found success through the freemium model:

“When Ben Elowitz formed Wetpaint in 2005, it was intended to let anyone create a Web site free… Wetpaint typically offers advertisers space on a few Web sites with a few hundred thousand visitors. But last fall, many of their advertisers raised their sights to publishers with more than five million readers, Mr. Elowitz said. Rates for leftover ad space fell to 25 cents per thousand views from $1… Now, Wetpaint charges its big company customers, like HBO and Fox, a fee in exchange for providing extra services like site promotion and moderating reader forums… Smaller customers can pay to keep their sites free of ads. Wetpaint plans to add more paid services, including additional storage for big files and personalized domain names. It is also considering selling virtual goods on its sites. “

Finally Google Apps is another nice example of successfully upselling premium services. The communication and collaboration platform is free for up to 50 users, but for $50 per user per year you get access to a whole range of services including: additional storage space, email security and archiving, video sharing, phone support and access to API’s.

App Stores (Apple, Nokia, Blackberry, Google Android)

It’s tough to argue against the game-changing success of the Apple App Store.  Rival companies like Google, Nokia and Blackberry have launched their own stores (the Android Market, Ovi store and Blackberry App World respectively).  A cursory glance on the Blackberry store only showed about 20 apps, and none of them were paid.  While they won’t be competitive with Apple (at least for some time), it’s at least showing that this model is profitable and worth pursuing.  I’m sure this is now central to how mobile handset makers and software developers plan on monetizing phones.

Interestingly this model is now being extended beyond just phones (and why not!).  According to the Sun CEO, Jonathan Schwartz:

“Vector is a network service to connect companies of all sizes and types to the roughly one billion Java users all over the world. Vector (which we’ll likely rename the Java Store), has the potential to deliver the world’s largest audience to developers and businesses leveraging Java and JavaFX.

Our runtimes reach more consumers than just about any other company on earth. That ubiquity has obvious value to search companies, but it’s also quite valuable to banks looking to sign up new accounts, sports franchises looking for new viewers, media companies and news organizations looking for new subscribers – basically, any Java developer looking to escape the browser to reach a billion or so consumers.

How will it work? Candidate applications will be submitted via a simple web site, evaluated by Sun for safety and content, then presented under free or fee terms to the broad Java audience via our update mechanism. Over time, developers will bid for position on our storefront, and the relationships won’t be exclusive (as they have been for search). As with other app stores, Sun will charge for distribution – but unlike other app stores, whose audiences are tiny, measured in the millions or tens of millions, ours will have what we estimate to be approximately a billion users. That’s clearly a lot of traffic, and will position the Java App Store as having just about the world’s largest audience. “

I believe that a paid app store is also a viable business model for social sites like Facebook, LinkedIn and Twitter.

Microtransaction (Tencent, Zygna, Facebook)

Tencent, the largest Chinese social network, focuses on microtransactions as their primary revenue source.  Users pay for subscriptions, virtual clothes for your avatar, new weapons, cute pets, etc… From their ’09 first quarter results:

Internet services (digital goods, game subscriptions, micro-transactions) – $279.9 mil (76% of total revenues)
Mobile Subscriptions – $64.5 (17.6% of total revenue)
Online Advertising – $21 mil (5.9% of total revenues)

Online advertising only 5.9% of their total $350mil revenues?  Impressive.

Another company successfully generating revenues from social gaming microtransactions is Zygna.  According to TechCrunch:

“Zynga, the online gaming publisher, is making a ton of money… [close] to $100 million. And clearly, it’s accelerating… There looks to be a bright future in the online gaming sphere and specifically around micro-transactions. That’s how Zynga makes most of its money. With some of its leading games on MySpace and Facebook, it charges users for playing time or for things like chips in poker. These small purchases which usually amount to only a few dollars at a time, start to add up quick. And that’s only with a small percentage of overall players opting to buy them.”

Facebook finally launched it’s much anticipated payment platform for testing.  Facebook hopes to be the OS for the social web.  They are banking on companies like Zygna figuring out what it the masses want and developing social applications on top of their platform.  App developers will be able to charge for subscriptions and create opportunities for in-app transactions. Facebook will get a cut of each transaction.  Cha-ching!

Another interesting company in this space is Tipjoy, which facilitates small payments on Twitter. I haven’t seen this used effectively yet, but I imagine a micropayment based Craigslist Twitter app could be successful.

Trend Analysis (Twitter, Zensify)

It’s undeniable that Twitter has achieved massive popularity, but that doesn’t always translate to profits (see YouTube). I believe Twitter’s most effective strategy for monetization will be mining and performing trend analysis on the millions of thought bubbles created by users daily. Both companies and individuals would pay big money to answer the following questions:

  • What are people saying about me/my product right now?
  • How has the perception of my brand changed recently and in what direction is it trending?
  • Geographically where is my biggest, rapidly emerging and diminishing audiences?
  • Who are my biggest evangelists, in what demographic do they fall in, where are they located?
  • Who are my biggest naysayers, how can I change their perception?
  • What is the perception of my product vs. my competitors?
  • What are the trending (in both directions) topics in my industry?

On a smaller scale the new iPhone app Zensify:

“Shows the user trends within your social graph in the form of a tag cloud of key words. In other words it brings a lot more intelligence to your social graph. Suddenly, you can see a big trending topic amongst people you follow… “Wouldn’t it be cool if “trending topics” were localized to the people who are followed by the people you follow.” Well Zensify does this… And it doesn’t just do it across Twitter. It does it also does it across updates from Facebook, YouTube, Flickr, Digg, Delicious, Photobucket and 12seconds.”

Zensify Tag Cloud

I believe that providing a set of tools to monitor trends amongst your social graph (and public timelines), will be a huge revenue opportunity for companies looking to monetize on social and real-time.

Conclusion

When the internet was originally created the “page metaphor” mimicked the existing print industry. It followed that the way to monetize was through advertisements. As we move from pages to activity streams we’re starting to see entirely new, innovative ways to profit. We are still in the infancy of this new stream based revolution and while companies like Twitter and Facebook have achieved huge valuations no one (especially the Newspaper and Music industries) has yet figured out Monetization 2.0. Put on your thinking hats…

Why Would Anyone Advertise Online Without Google/Facebook?

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As part of my new job I’m in charge of developing and executing a marketing plan for a new website.  I’ve been doing a lot of research into online advertising and trying to figure out the best way to allocate my budget.  There are a number of ways to purchase ads online.

  • CPM (cost per one thousand impressions) is the cost to display your ad one thousand times.  For the sites I contacted the range was from $20-$70 per 1000 impressions.
  • CPC (cost per click), instead of purchasing ads which do not guarantee clicks, Google Adwords and Facebook both allow you to pay only when someone clicks on your ads.  Better.
  • CPA (cost per action), you only pay when a user clicks on your ad, comes to your site and does something (i.e. fills out a form).  This is obviously the best for ad buyers, but worse for ad sellers (since it depends on how convincing you/your product are to get someone to take that action).  I haven’t found any advertisers willing to sell on CPA basis.

There are also a number of other factors that allow you to specify your audience better.

  • Facebook allows you to specify where (to the city), what sex, age range, keywords, education (even to the specific college, year and major), relationship status and sexual orientation of your target audience (so that’s how my profile info is used).  In my example below, Facebook tells me there are 220 single college women between 18 and 23 in New York who like Pizza (hey ladies!).  You only pay per click, set daily limits on how much you want to spend and a maximum you want to pay for click.

  • Google also allows you to specify location, keywords, daily budgets and how much you will pay for a click.  The graph below shows me how many clicks I am likely to receive and how much those clicks will cost me (in Rupees):

In comparison the Google and Facebook models will give me a lot more value for my budget.  Here’s why:

  • Cost (CPC is better then CPM) – The number of clicks I get is much higher per dollar with Facebook and Google.  One of the major tech sites I contacted (can’t give their name but you’ve heard of them), offered me 174,000 impressions for 4k over two months ($23 CPM). They estimate a clickthrough rate of .25% which would equal 435 clicks.  In comparison I can set a maximum bid on Google and Facebook ads (let’s say .50 cents – $2 per click), giving me  2,000-8,000 clicks.
  • Targeting - While the tech sites I contacted gave a lot of demographic information about their users (what percentage are IT decision makers, developers etc…), it doesn’t mean the individual viewing my ad actually is in that bucket.  With Facebook, I can guarantee that the people who are viewing my ad are in the target audience I want them to be.  With Google, it’s up to me to define good keywords that people are searching for in order to reach them.  Assuming I can do this (there are a lot of tools out there to help as well), I’ll know my ads are only seen by the right people.
  • Analytics - There is no way for me tell how many times the ad publisher is actually displaying my ad.  They can tell me they showed it 100,000 times but I have no way to validate this.  All I can see is the number of people that actually click on that link.  Google and Facebook give me tools to see how well my keywords and ads are performing, guaranteeing my investment.

In short I can understand if you are Coca Cola you don’t really care who sees your ad.  In fact you don’t even care if people click on your ad. You are huge and all you want is to continue reminding people they are thirsty, your target audience is everyone. But for anyone else why would you advertise with someone who doesn’t offer targeted CPC ad purchasing? Your thoughts appreciated…

Billion Dollar Business Idea

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I have an idea, it’s a good one too.  This is gonna be big, we’re talkin’ bigger then YouTube, Facebook and Cute Overload… combined.  I’m goin’ to let you in on the secret, but there’s a catch – I need your help. I just need you to answer to the following question:  What is the killer service that combines people’s location (g/iPhone) and existing social data (Facebook, OpenSocial) to drive real life interactions and sales?  Give up?  Me too…

The convergence of the mobile and social web (although over-hyped for years) presents an enormous opportunity.  For a long time we’ve heard rumors of a mystical app where you specify you specify you want some new size 13, white, Nike Zoom LeBron VI’s.  You walk by FootLocker and all of a sudden you receive a message letting you know they have it in stock, in your size, and if you buy it now, you get 15% off.  Or the app that let’s you know the cute chick across the bar is single, and shares your love of Stan Getz and Quentin Tarentino.  Perfect?  Not really, privacy concerns and unwelcome solicitation can quickly ruin this product.  Success with location based services (LBS) can only be achieved by giving users complete control over their privacy, and continuously building trust by providing more useful and accurate services.

I’ve spent some time playing around with the current LBS offerings Loopt and Yelp, but I think there’s a lot more that can be done.  This summer I came across an article in the NYTimes describing Sense Networks.  I downloaded the CitySense app on my blackberry and was floored, absolutely incredible.  It allows you to see in real-time where people are, if the population density is higher or lower then normal in certain areas and recommend places you would like to go based on where you’ve been (currently only for SF).

But this is just a for-fun demonstration of their technology.  Some of the tough questions that Macrosense is trying to answer include:

  • Where do people make the decision to go to one place versus another?  Which places in the city are “influence points” versus “stops en route”?
  • From where do the most people come from before arriving at a particular location?  Where do most people go afterwards, and how does this change throughout the day?
  • What is the demand and elasticity of demand for places, activities and services by income level?  What are the most dramatic increases and decreases?

This is dope and extremely profitable.  The information could be used for marketers and business trying to determine the right location for their store.  The company is backed by hedge funds and I bet are making some scary decisions based on their findings (i.e. economy goes down 10% no one is going into the Apple Store, short the hell out of the stock)

Another great, new product is the Sekai Camera.  The concept is not only awesome, but the video is highly entertaining:

As we continue to make our phones smarter with faster and ubiquitous connections and GPS, we can enhance our real world experience by utilizing the thoughts, opinions and opportunities presented by friends and strangers alike.  Ideas anyone?

Ways to improve Twitter – Special Interest and Contact Groups

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The first part of this article described why people microblog and the current problems with Twitter.  There were two questions:

  • How can you quickly find and engage in conversations around topics you are interested in?
  • How can you identify which notifications are important and send/receive them in the appropriate method and frequency?

The answers: special interest and contact groups are discussed below.

Special Interest Groups

There’s a lot of people constantly engaging in dialogues I want to be a part of, but just don’t know about.  I love that the advanced search is able to filter tweets based on words, people, places, dates, and attitudes, it allows me to, for instance, find all people within 15 miles of lower Manhattan talking positively about the Mets.  The problem is once I have the results, what can I do with them?  Sure I can subscribe to an RSS feed but that takes me out of the whole call and response flow that makes Twitter so engaging.  Hashtags is a 3rd party service which allows you to create and track tags.

A couple of problems with hashtags:

  • It’s a third party service and not integrated into Twitter.
  • No way to subscribe to a specific hashtag and see it in my stream.
  • There is a lot of redundancy (i.e. Barack, BarackObama, Obama, Obama08, Obama-President)
  • There is no taxonomy (#family:genus:species)

Recently Twitter released a special strem for the elections.  This is awesome and I hope a sign for whats to come.  Here’s my wishlist for special interest groups on Twitter:

  • Be able to subscribe to any advanced search result.
  • Give a short name to the result and have a list appear underneath your followers.
  • Be able to specify if tweets from a specific group appear in your stream.
  • Be able to click on any of the groups and have a real-time, updated page of the results (like the Election Page):

  • Allow for the custom insertion of dynamic filters within a group.  (For instance if election is the main keyword you are searching, be able to add/delete dynamic filters like Obama, Biden)

Special interest groups would allow new users to quickly ramp up their involvement and allow long time users to filter all their messages into clearly discernible buckets by specifying a combination of people, topics and location.  Some examples of what this could to do:

  • Allow Obama to identify and address all people who were positively supporting Hillary in Virginia during the primaries.
  • Allow Apple to follow the launch of their newest product.  Combine this with trending topics within the group and identify most active complaints.  Send a notifications to all those afflicted with a message that the most recent update solves their issue.
  • Allow me to find all people who have discussed Twitter improvements in the last 2 weeks, and ask for their suggestions.

Contact Groups

The premise here is that some users I really care about, and some I only care about if they have something really, really important to say (to me).  Currently Twitter allows you to receive all messages, or messages directed to you via SMS.  They also let you turn it off during certain hours:

This is nice but there’s a lot more that can be done.  Here’s how I would structure contact groups:

  • Allow users to create unlimited contact groups and easily add and remove users and special interest groups.  These groups are private and cannot be seen by other users.
  • For each contract group allow the following receive options:
  • Delivery Method: Modify the settings for how you would like to receive different types of messages including: all messages, messages directed at you, and high priority messages (discussed below).  The following options are: Twitter Stream, SMS, Email, IM (allows multiple select)
  • Frequency : Modify how often you would like to receive messages from this group: Real-time, Daily, Weekly (daily and weekly would send aggregated list of all messages)
  • For each contract group allow the following sending options:
  • Private Messaging – Select which contact groups this message is sent to.  Specify if messages to this group appear in your public stream (twhisper).
  • Priority Alerts – Allow users/services to send messages they deem as critical (breaking news, emergency messages). There would need to be a system in place for people who abuse this (similar to flagging comments?), but this could be immensely powerful.

There are also (at least) 2 new revenue streams here:

In summary, special interest groups would allow anyone to identify and engage with user’s who are discussing a particular topic.  Contact groups would allow full control (privacy and frequency) of how messages are sent and received.  In combination, Twitter would much more attractive to business by being able to analyze the abundance of opinions being shared and individuals by customizing their Twitter experience to fit their schedules and habits.

Pluggd – Speach recognition technology for video

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This is pretty awesome:

Publishers have the option of attaching a heat map of sorts to their videos. The map shows up below videos as a variously colored bar, which ranges from blue to red and activates when the user types in a particular topic. For example, if you’re watching a clip about a golf tournament, you can enter “Tiger Woods” and the bar will show you where the commentator spends time discussing and showing footage of that famous golf player. The topics are automatically detected by a combination of speech and contextual analysis, so publishers don’t have to break down their videos manually.

Nu Analytics

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Using Javascript/Ajax we can build significantly better UI’s and create a much better user experience. Many companies still can’t effectively translate a better user experience into value ($$$). The biggest reason for this is that the statistics captured and reported by many are still page views. Enter the Web 2.0 Anaytics offerings:

French company Alenty is able to track what area of the screen you are looking at (duration): Alenty Demo

Nuconomy goes one step beyond, allows you to track not only Ajaxy (duration) stats, but interesting correlations as: friend request to purchase ratio and number of reviews written vs. clicks on ad. Pretty awesome…

There is a huge opportunity to offer free (or cheap) Web 2.0 analytics before the big players (Google, Omniture) do. Maybe we can then develop photo galleries that don’t reload between each photo…

The next step is to develop targeted ads that can seamlessly and unobtrusively change based on the your ever changing content…

http://www.alenty.com/xwiki/bin/view/Demo/AudienceDemoMultiContent

Interactive Agencies Q4 2007

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Forrester just completed its (semi?) annual assessment of Interactive Agencies. Attached are some takeaways. The purpose of this article is to shed some light on some of the things that bigger, leading agencies are concerned about. To be considered for their evaluation they required a minimum of 150 employees and revenue of $50 million.

Key takeaways:

  • “The biggest challenge — and necessity — facing interactive agencies is to cultivate the needed skills and gravitas to serve as the strategic marketing advisor to their clients.” This includes providing measurement and analysis of analytics, audience research with personas and ethnographic studies, and effectively using emerging media like blogs, video and rss.
  • “The interactive agencies included in this evaluation are all perfectly capable of helping clients achieve their interactive marketing goals today. But they have yet to demonstrate an ability to lead broader marketing and brand strategy. As a result, clients will continue to relegate them to implementing the brand strategies of larger agencies — at least until interactive takes a much higher percentage of overall marketing spending.”

There are then specific articles on each agency and compares them in terms of analytics capabilities, research techniques, emerging media channels, strategy, cost, vision, strength of management teams and more.

Ave A / Razorfish:

  • “We are quickly approaching an era when companies will look to their agencies — including interactive ones — for more cohesive, cross-channel marketing strategies. Avenue A | Razorfish’s road map doesn’t take it in this direction, which could mean that it will miss out on opportunities to lead strategy and thus deepen its client relationships.”
  • Avenue A | Razorfish … believes that ”the future of digital marketing is tapping into the immersive and social power of the Web. It’s invested into R&D like the Living Labs and Smartpox (exploring new uses of mobile phones for marketing purposes), both of which study how consumers interact with emerging media. It believes that interactive video is the most important to its (and its clients’) future. Its work increasingly employs interactive video. For example, it created interactive video advertisements for Levi’s iPod-ready blue jeans and the marketing microsite www.mercedes-amg.com.” (this Mercedes site would be much cooler if it was faster, but gives an idea of where they are going).

Digitas:

  • Has more than 170 analytics staff members with deep quantitative skills. Its expertise includes campaign analysis, experimental test design, etc..

OgilvyInteractive:

“OgilvyInteractive is engaged in four primary initiatives:

  • A full-service mobile marketing offering, including mobile media planning, campaign/messaging, WAP, and application development.
  • A digital influence and social media practice, including brand reputation management, advocacy, microcasting, viral marketing, digital PR, and content syndication.
  • Branded content and multiplatform digital communications, including original content production and distribution across the Web, digital TV, IPTV, and mobile channel.
  • Emerging channels such as video gaming, digital displays/signage, location-based targeting, and RSS.”

Some things to think about….