Marketonomy

Value Added Marketing Launch

I've just returned from a week in NYC, and the announcement of my new business ventures during the Inspiration Festival. It was a whirwind of a week, starting with a weekend at The Gathering, held this year in Brooklyn, with an endless stream of mind-blowing presentations from artists, entrepreneurs, writers, musicians and scientists, and ending with a preview of Wired's NextFest, complete with intelligent robots, futuristic cars and Branson's new space ship. In the middle was Juliette Powell's Inspiration Festival, a 3-day gathering of top creatives from all over the world who converged on New York for Advertising Week. There were a lot of compelling presentations and discussions on marketing, advertising, technology and culture, at venues ranging from an art gallery to a breathtaking former synagogue in Soho--and some of the best art and entertainment imaginable. It was a far cry from the hotel ballroom-and-buffet conferences that put you to sleep before lunch--and a fantastic venue to launch two new ventures...

First up, the Value Added Marketing Association. I launched VAMA to address one of the most persistent shortcomings of marketing today--technology is advancing far faster than marketers are able to adopt or adapt it. Most marketers think they're on the cutting edge if they're managing SEM programs or deploying blogs, but there's a world of technology out there that could help improve the practice of marketing, if only there were marketers who knew how to use it. In the Enterprise IT space, there's long been a successful channel of Value Added Resellers who bridge the gap between application Vendors and IT managers. VARs keep up with all the latest technology so IT can focus on keeping their systems functioning properly. VARs have become trusted advisors who make product recommendations, assist with installation and integration, and even help with system training and maintenance. The existence of VARs has accelerated the development of new enterprise applications, and helped IT managers keep up with the new technology.

Now we need the same structure for marketing. Marketers simply must get smarter about technology, and the best way to do so is to provide a channel that can help them identify and target relevant technologies that can improve the effectiveness of their programs. VAMA will provide that structure by creating an association that connects marketing technology vendors, marketing agencies, and marketing operations managers. VAMA will spotlight new technologies to keep marketers in the loop; beginning in '07 we'll publish an annual list of the VAM100, and host an annual marketing technology conference called VAMX. Check out the VAMAweb site, and let me know if you have any recommendations for the '07 VAM100 list.

My second venture, MotiveLab, is a parallel concern--a "marketing lab" where marketing fundamentals can be explored in the light of new technologies. I'm already working on my first project--a product roadmap for a publicly traded company, which, instead of being published as a paper brick that will be out of date in 6 months, will be deployed as an internal Wiki, where product managers can keep their roadmaps continually up-to-date and accessible to stakeholders. I'm also exploring a mash-up between social-networking and content management tools to power a customer advisory board.

MotiveLab is essentialy where I'll have the chance to explore, while VAMA will ensure that I have one ear always to the ground to know what's up and coming in marketing technology.

I've got a lot of work ahead, but now that the seemingly endless incubation has ended, I can focus more on the kind of work I love to do. You should be seeing some more consistency in the Marketonomy posts, and some more penetrating analysis of marketing strategy, finance and technology in the days and weeks ahead. Let me know what you think of the new ventures.

Marketing Mechanization

I'm working on some of the materials for my launch next week, and one idea broke out of my framework today. I'm not going to go into the entire framework now, it's enough to say that I'm processin a lot of the meta ideas about marketing, its role in business, and its role in society.

There was a paper in the Journal of Marketing back in Summer 2003, called "From Market Driven to Market Driving: An Alternative Paradigm for Marketing in High Technology Industries", which was later published as a book. I don't know how popular the book was, or how it was received in academia, but it had an interesting premise--that some companies lead markets by developing new technologies and compelling others to follow them, while other companies are driven by the market, especially by focusing on customer needs and responding to them. One company blazes a new path (often failing), while another follows in the market wake.

This is not an exclusively descriptive or prescriptive view of marketing. It's an interesting filter through which to view a company's activities, and it has some nice intersections with other corporate and marketing strategy theories--particularly the concepts of Positional vs. Resource-based Strategies. Some companies will naturally do better at one or the other approach, and the myriad other factors that contribute to success or failure will always obscure the degree to which adherence to a specific strategy actually determines an outcome. But that's a thread for wonks.

What popped out at me today is a distinction that I don't think is adequately explored by this paradigm, which is the Manufactured Market Leader--the company that embarks on a market leading course not because it truly has a visionary product it is convinced the market will adopt, but because it is convinced that it can sway the market despite the product--through partnerships, distribution, licensing, whatever.

It's one thing for a couple of passionate engineers to leave their jobs, set up shop in a garage, and knock out a prototype that ignites the market because it is a transformational disruption. It's quite another to try and manufacture a process that delivers the same result. For one thing, such attempts typically get captured by the "market-driven" paradigm, because finding the revolutionary product leads to a lot of market research and reactionary thinking. But the other effect is more troubling: a culture of marketing that is based neither in a true pioneer mindset, nor a true customer-engaging mindset, but a manufactured hybrid--a marketing approach that wants to artificially generate the benefits of successful pioneering--the wild fan base of acolytes--without taking the time or trouble to be responsive to the market. The symptoms are loud branding campaigns and highly aggressive lead-gen techniques, with poor customers service and short product lifecycles.

I realize this is probably more navel-gazing than most people enjoy on a Thursday afternoon, but's a piece of a larger puzzle for me. It's part of a series of observations about how marketing is evolving in different sectors, and how the increasing focus on marketing performance is creating a mindset of efficiency-driven mechanization. I'm not wringing my hands over it, as much as I'm amused to watch the equal-opposite trend continue to emerge--the growing power of consumers who are increasingly driving market decisions through information networks and greater scrutiny of marketing practices. I hope companies that are investing heavily in marketing mechanization aren't under the illusion that their man behind the curtain will amaze the market forever.

Mobile Marketing Mindlessness

This is the kind of thing that just drives me insane--that proves to me just how stupid and short-sighted businesses and marketers can be, or worse, how cynical.

A few years ago, when the complaints about spam reached enough of a pitch to reach the ears of legislators, many businesses, and associations like the DMA, took positions that did not reflect what consumers (their customers) wanted. At first they said we don't need no stinking regulations, there is no problem with spam, and then when it was obvious congress had to do something to look like it was listening to constituents, they got into the lobbying act to craft regulations that still let them send unsolicited mail. (And boy, did that CANSPAM act hobble spammers...)Today, the estimates are that 80% of *all* email is spam. Market-research firm Ferris Research tallied the cost of spam in 2005 at $17 billion in the United States and $50 billion worldwide, reflecting lost productivity, costs to purchase and administer anti-spam systems, and time wasted dealing with spam with legitimate messages mistakenly tagged as spam.

Now, spam is reaching into Text Messaging. But there's a twist. You pay for it. Since most mobile carriers charge by the text message (often 10-cents per message), unless you buy a bulk texting plan, you have to pay for every spam message you receive. And guess what? The carriers don't think this is a problem. Not only do they not have robust systems in place for blocking spam, they don't have other, more obvious systems in place to let you determine who gets to send you a 10-cent COD text message.

Here's an outtake from David Lazarus's column at the Chronicle:

Most wireless companies focus their filtering efforts on known spammers. Customers are typically given the option of blocking messages from specific senders.

This, of course, leaves the door open for other spammers to get through  --  at 10 cents a pop for cell-phone customers without costlier plans that accommodate more text messages.

The more consumer-friendly approach would be for all text messages to be blocked except for those from senders given a green light by individual customers  --  a "safe list" that could be regularly updated online by the wireless customer.

That way, you're charged only for the messages you send and the ones you want to receive. Everything else falls by the wayside.

Not one major wireless company gives customers this option, although Cingular offers a service that blocks all text messages except those sent to a separate address created by the subscriber. 

Laura Marriott, executive director of the Mobile Marketing Association, an industry group, said such a system is unnecessary because of various safeguards already in place, such as spam filters and guidelines for association members that consumers "opt in" before receiving any text messages.

"We have done an extraordinary job as an industry to protect consumers from spam," she said.

It's nice to know the MMA cares so much about consumers. Let's take a little walk over to the Mobile Marketing Association Web site, shall we? If we go to the "About MMA" page, we find a mission statement:

The Mobile Marketing Association is an action-oriented association designed to clear obstacles to market development, to establish standards and best practices for sustainable growth, and to evangelize the mobile channel for use by brands and third party content providers.

MMA members include agencies, advertisers, hand held device manufacturers, wireless operators and service providers, retailers, software and services providers, as well as any company focused on the potential of marketing via the mobile channel.

And if we look at the board of directors we find a nice representative sample of major carriers, entertainment companies and agencies. Browse the rest of the site, and you'll find tons of case studies, research papers, and statistics that show the tremendous potential of reaching out to customers on their mobile devices. The MMA has been very busy. And oh, hey, here's a section for Consumers! Whoops. "Coming Soon". Consumer Information? "Coming Soon". MMA Consumer Initiatives? "Coming Soon". Yes, consumers carry a lot of weight at the MMA.

So here we have a problem that we have seen before. Spam. It causes us enough headaches that we have created a very successful industry that gladly accepts our money to stop it. It took us 7 years to get that far. Now we have the same problem cycling up to tackle one of the fastest growing new messaging platforms. But instead of building an industry to block text spam, we'll now pay the carriers directly for every message they don't see the need to filter. Hmmm. Is that an incentive for the carriers to get into the spam business themselves? And finally, we have an industry association that in the press proclaims its righteous dedication to protecting consumers, even while saying that implementing measures to protect you and me from paying for ads we don't want is not really very reasonable. I'm so glad they're thinking of us.

Look. If you've read my columns or blogs long enough, you know I'm pro business. I've done a lot of work with carriers, and I love the products they develop. You also know I'm pro marketing. I see tremendous potential in Mobile Marketing, and think a lot of the work the MMA produces is fantastic. But I've also seen plenty of stupidity from carriers and marketers, and you always know it's coming when you hear them pronounce what is good for customers. Because it never is. When. When. When will these people figure it out?

If the MMA was half the industry association it should be, it would not be bowing down to the carriers and carrying their water in the press, but would be challenging them to create a sustainable market practice that would not be blowing up on the front pages of major newspaper a year down the road, with calls in Congress to establish "Do Not Text" lists. This is called self-regulation, people. It's how we avoid having customers sue us, governments regulate us, and competitors eat our lunch with an alternative that, ~gasp~ gives consumers what they actually want.

I know, I know, that takes discipline and the sacrifice of all that cash they can make today by charging customers for spam. So instead, we'll get to watch this whole thing play out like it always does. I predict class action law suits emerging in 8-12 months. Major news coverage of Text Spam in 12-18 months. Calls for legislation in 18-24 months, just in time for the next major election cycle. And accurate tallies of all the money we've wasted beginning in 2 years. That's when the investment will pick up in anti-text-spamming products. Buy your domains now.   

The Impact of MTV

A lot of people were talking about MTV's big 25-year anniversary this week--though not MTV, since they don't want to remind their 14-year-old prime audience that they've been around so long...

If you didn't catch it, NPR's Talk of the Nation did a great show on the meaning of MTV and it's impact on society and culture. You can find a link to the story, with an audio file and lot's of supporting information at this link. It's well worth the listen. Two of my favorite snippets:

1. MTV, despite its name, has perhaps had a greater impact on society with its introduction of Reality shows, than its music videos--notwithstanding its music successes, including its service as a vehicle for rap to hit the mainstream, along with black pop artists.

2. MTV doesn't age. Every year they spend a lot of resources researching their 12-18 year-old target audience and tweaking their content, such that every 4-year cycle of high schoolers will no longer resonate with MTV by the time they graduate from college. They of course have launched parallel channels to hold on to some viewers, but at the core, they have a single-minded focus on their primary audience.

There are some troubling aspects to MTV's success, exemplified today by the disturbing implications of the runaway success of shows like "The Hills". But that's another thread. What's interesting to me, good or bad, is the ability of a media institution to have such a tremendous impact on our culture, and this is a decent overview by NPR.

Speaking of which, I'm quite impressed by NPR's production quality. They make very effective use of the Internet to augment their stories, by adding useful supporting content and outtakes they can't fit into the broadcast. It's not the fluffy crap you usually find as extra material--like on most DVDs--but information that expands the experience. Great stuff.

 

Why Businesses Really Fear Blogging

Have you ever noticed how it sometimes takes an epiphany to reveal the reality of an obvious truth? Like, I don’t know, sitting in traffic in a $60k SUV burning $3.50 a gallon and, even though you’ve sat in the same gridlock every day for years, on this day you happen to notice the endless lines of single-occupant vehicles, the single half-empty carpool lane, and for the first time it dawns on you with sparkling clarity the breathtaking stupidity of modern life? Yeah, that feeling. I had a moment like that yesterday. Not during my commute, but during a panel discussion about blogging and digital media technology.

I was part of a panel for the Backstage Pass series of industry discussions at Pillsbury Winthrop in Palo Alto, moderated by Tamara Ireland Stone of Rainmaker Communications. Though the discussion was highly practical, focusing on the challenges and pitfalls of new information channels like blogging, I fell into my usual routine of veering off into the social and philosophical context of the debate. While it’s important from a business perspective to understand the immediate impact of disruptive technologies, I’m always interested in seeing the flow of the bigger picture—in this case, how the control of information is becoming distributed, how consumers are learning new skills to filter and process data, how businesses are having to learn how to shift from polished monologue to broader dialog with their audience.

The old paradigm of corporate communications that businesses understand—the one-way broadcasting of a tightly designed and controlled message—is giving way at an accelerating pace to a chaotic and uncontrolled market discussion. Bulletin boards, chat rooms, blogs and list groups allow consumers to share information and influence public perceptions about companies and products, and businesses are quickly being relegated to just another participant in the conversation. Some companies are actively engaged in the discussion, some are trying out various schemes for influencing the dialog, but most are just standing on the sidelines scratching their heads.

So while we panel experts were doling out our sage advice about how businesses can better understand and engage the blogosphere it suddenly occurred to me why this is such an immense challenge for so many businesses. I always just assumed it was about control. Businesses want to minimize risk; control is a powerful tool in minimizing risk; and the new channels of communication take much of the control away from business. Panic ensues. But my epiphany was about something much more obvious and fundamental.  

The advice that has become standard among blogging experts is that any business engaging in a dialog with their market must be authentic, open and responsive. You can’t just hire a PR agency or a freelancer to write your blog—you’ll be defrauded or disregarded, or both, in an Internet minute. Companies must put executives on the frontline who can engage intelligently, responsibly and passionately about what the company does. This is an obvious challenge for companies that have a contentious relationship with their market, a hyper-secretive culture, an impatience for dealing with questions, or a style of business that might not stand up well under public scrutiny. But it’s also a serious challenge for companies beleaguered by a far more common vice: uncertainty.

And this, finally, was my penetrating revelation into the obvious. Why do so many businesses fear the give-and-take dialog that is the currency of our new communications technology? Not primarily because of the lack of control—that only scares those who were good at controlling their image in the first place, an elite few who are now engaged in tactics to control their image in the new paradigm. What far more businesses fear is the lack of a consistent, cohesive and compelling story--much less business operation--they can be confident in sharing and defending clearly to win the hearts and minds of their market. After all, it’s easy to package, polish and publish a perfect message for mass consumption. But to embody that message as a business, to understand its meaning and its implications throughout every commercial function, to champion that message and to believe it, that takes something that most businesses just haven’t spent a whole lot of timing working out.

The Tyranny of Long Tail Minorities

This just mystifies me. Marc Gunther, a senior writer at Fortune, has just posted a column claiming that the Internet has left us all poorer from the overwhelming glut of information choices. The column is sort of a tangential review of Chris Anderson’s finally released book, The Long Tail, which describes how business is being reshaped by the growing viability of micro-markets—which essentially means that consumers, in part by virtue of the Internet, can develop and satisfy all kinds of niche desires instead of conforming to a mainstream taste dictated by the economies of mass production. Instead of a mass market, The Long Tail argues, we’re evolving into a mass of niches.

Gunther seems to think this is a sad kind of progress. After all, the fragmented Internet, with its endless rat holes serving niche interests, is incapable of creating the kinds of mega-stars and ubiquitous ad slogans that unify our culture into such a homogenous ideal.

“Think of the feeling that comes a few times a year—the morning after the SuperBowl or the Oscars—when tens of millions of Americans share a common experience."

I'm kind of lost about what the Internet has do with the common experience. I mean, did we all not share in Zinedine Zidane's headbutt? It wasn't only the talk of TV, newspapers and radio, but video clips and remixes have been plastered all over YouTube for days. But alas, according to Gunther, it is the Internet and its world of choices that is eroding the very fabric of our national identity.

“I think the explosion of choice has left us poorer in at least two arenas. The first is journalism….Yes, there is more information available to us than ever, but I don’t think we are better informed. Niche media will, inevitably, continue to weaken mass media.

"The second arena where we are worse off is politics. This is related to journalism, as the moderate and responsible voices of the Mainstream Media get drowned out by partisan, opinionated cableheads and bloggers. Politics in America  has become polarized for many reasons, but a big one is the fact that people can now filter news and opinion they get to avoid exposure to ideas with which they disagree.”

Hmmm. Choice is bad, because we get more information we can choose ourselves rather than being spoon-fed whatever the Wise Editors decide, and that keeps us from being well-informed. Because apparently, we aren’t smart enough to figure out what information is worth reading, and we need other, smarter people to tell us what to read, and big spectacles with stars and flashy ads to help bind us all into a nicely pasteurized culture.

I’m hearing a lot of this kind of argument lately, from people terrified of the uncertainty of how our world is actually shifting with all of these new channels of communication. They always seem to arrive at the conclusion that choice is somehow corrosive, instead of seeing it as a symptom. Why do we all migrate so rapidly to a world of choices? Because what we’ve been fed for so long in the mainstream SUCKS.

Network news pretty much stinks across the board. Where’s the reporting on Darfur? When’s the last time you heard about Afghanistan? Or a critical story about a major corporation that, ahem, owns a major network? Don’t even get me started on politics. Do you have any desire to see who’s going to run for president in 2008? And that’s all the fault of new choices available on the Internet? Give me a break. And here’s a news bulletin: the Internet allows you to filter news and opinion to avoid exposure to ideas with which they disagree. Interesting. I guess the masses of people who listen to talk radio, or watch Fox vs. CNN all day long are opening their minds to reasoned debate.

The explosion in choices available via the Internet is a reflection and reversal of the rise of mass markets during the 1950s. Some people are just tired of same old mainstream crap, others don’t trust the sources of mainstream ideas and information. The phenomenon of choice is not the problem, it’s a symptom of our cultural and technological evolution. As time goes on, we’ll learn new techniques for sourcing and sorting information, just as new powers will emerge to bring certain channels and ideas into the foreground and galvanize larger audiences.

But hey, if it doesn't work itself out and we end up losing the kind of common cultural identity cemented by the Oscars, the SuperBowl and catchy ad-slogans, I won’t be losing any sleep.

Rating Commercial Viewership

The advertising world is all atwitter over news today that Nielsen will start offering viewership numbers for televised commercials beginning with the new fall season. Using the same 10,000 set-top boxes they use today to measure the incredible consciousness-melting power of American Idol, Nielsen proposes to give the first accounting ever of just how many people tune out during the commercial break. Media executives everywhere anxiously await the dramatic fallout:

The Wall Street Journal reports that executives at both TV networks and advertisers expect the new Nielsen ratings will show that viewership declines noticeably when a program breaks for commercials.

Wait. You mean people actually change channels and go to the bathroom during commercials? You're kidding. Advertising executives everywhere are shocked and amazed at this new development, not to mention outraged:

"Prices should go down," media buyer Bruce Goerlich, executive vice president at ZenithOptimedia told the paper. "If I was a buyer, I would be taking the stance of, 'Quite frankly, what you said you were delivering, you weren't.'"

It's shocking I tell you. Just shocking. (I love the "if I was a buyer" routine. Uh, hello Bruce. You ARE a buyer...) The only thing worse than the paper-thin positioning from advertisers and network execs is the utter lack of insightful reporting from some leading ad industry analysts. Many are rushing so fast to be the first guru to unveil their vision of the future they fail to see through the smoke and mirrors. Here's one typical remark:

Either way, as advertisers see hard numbers that show their television investments are even less accountable than they suspected, they will begin to seek new outlets at a faster pace than they have.

"Hard numbers"? Where did anyone get the idea that Nielsen delivers hard numbers? The recent problems Nielsen has had justifying its ratings adjustment for Tivo viewers demonstrated just how much secret sauce they've been adding the ratings mix. In this article from MediaPost, Lifetime's EVP of Research explains how Nielsen cooks the numbers:

"If important demos are underrepresented in its sample, Nielsen frequently uses mathematical factors, giving them more "weight," and raising audience levels ascribed to those demos in its final ratings... ...Nielsen's calculation systems are so complex, especially since they've weighted people in the database so that a person is not a simple person. A person is 1.1 on one day and 1.5 on another day."

It makes sense. I mean, why waste money on quality programming to raise audience levels when you  can just use a complex mathematical factor? I suspect the same concept will work quite nicely for commercials. 

Google Testing New Ads

Google is testing a new ad format associated with it's Google Maps service, as pointed out by the Search Engine Round Table. If you do a geographic search, little icons will show up on the map that identify advertisers close to your search location. For example, if you search "hotels san francisco" you'll find a small icon with a bed near all of the generic pushpins. Click on the icon, and you see a "Sponsored Link" from the Mark Hopkins Hotel. Do a search on "booksellers nyc" and you'll find an icon for a coffee shop, sponsored by Barnes and Noble. I did a little searching around on other cities and business types, and couldn't find anything else, so it must be pretty early in the rollout.

Who's Afraid of the Dark(net)?

If you haven't been following the bubbling unrest over Digital Rights Management, now may be the time to tune in. The wrangling over how technology impacts copyright and fair use is picking up momentum on the edge of mainstream, and some interesting Web sites and undergrounds have emerged that are a good reminder of what creativity is all about. 

<Rant> Creativity is a social currency. It's about reflection and inflection. Exploring and connecting through something deeply felt as a way of experiencing the present. Humor. Fear. Regret.... The capacity for creativity to transmit emotion, to inspire, to generate shared experience, is more powerful than any manufactured currency.  Which is why we use creativity in business as a vehicle to generate revenue. We use it in marketing, we use it in product development, and we use it most of all in entertainment. But Creativity has very short shelf life as a business currency. Business wants to be efficient, to strip away anything unnecessary, anything that isn't calculated. Even businesses that code creativity into the DNA of their operations usually can't avoid stifling it in some vital way, because ultimately the purpose of business is not to inspire, even if inspiration is an expedient tool.

Nowhere is this more apparent than in an industry of creativity. Movies. Radio. Television. It's become a cliché to moan over the lack of creativity in entertainment today, even as we anxiously await another blockbuster summer with the likes of Scooby Doo 3, and a big screen version of Leave It To Beaver. Why is creativity so lacking where we expect to find it most? Because the structure that allowed the entertainment industry to profit even while it inspired--or that enabled it to inspire even while it profited--has changed. We can copy and share files. We can have 54" screens in our living room with high definition DVDs and video games. We can hang out on the Internet instead of watching TV. From a business standpoint, it's chaos. New technology. New attitudes. How do you handle chaos in business? You either maximize your effectiveness at doing what you know best, or embrace change and move in a new direction. The relative risk is open to perception, but most businesses like to avoid change.

So now we have a media industry that is very poorly suited to adaptability. They're using whatever tools and weapons they can find to prevent change, and to retain revenue--one of the biggest being copyright law. We have a record industry suing it's customers. And now a movie industry threatening the same. At this point, at least in the entertainment business, industry is no longer serving creativity, and creativity is no longer serving industry. It's a broken relationship that is no longer satisfying to anyone. People feel cheated by the quality of movies and records they buy, and the industries start losing revenue. Industry reacts with ever more draconian restrictions on how people can use content, and people react by finding new ways to get around the restrictions. Because ultimately, people don't care if the industry is making money. They want to explore and connect through something deeply felt as a way of experiencing the present. They want to share that, and be part of a shared experience. If businesses can make money while that's happening, no one cares. But businesses get in the way of it happening, they'll ultimately lose. Because creativity is a social currency far more powerful than anything manufactured. </rant>

This pill will take you take you back where you came from, and you'll forget everything.

This pill may lead to places you don't expect.

New Advertising Model

I'm producing a pilot program for a startup company in the online advertising space called Hyperbidder, that will be launched at the Ad:Tech show in San Francisco in April. It's an interesting model for advertising. Instead of buying ad space for a set CPM or CPC, you place a bid for ad space at whatever price you want to pay. At the end of the auction, the space doesn't go to the highest bidder, it gets divided up and spread among all bidders in proportion to their final bid. That means any advertiser can buy space without getting squeezed out of the market, and the pricing is set by market demand.

What's nice about the model is that it has significant potential to open up surplus ad space currently unsold by major advertisers, since the pricing model will put it within reach for smaller buyers. For the publisher, no potential revenue is lost because all bids win. And unlike the typical banner ad networks, where you buy ad space across a series of sites--usually without knowing exactly where the ad will land--there are metrics and mechansisms to not only see where your ad is going, but to control where it goes. 

I never stump for products, but I'm giving the background as an explanation for why an ad is now appearing on this site, down along the right hand margin. I'll be lucky to earn a cup of coffee each month with that space, but it's an interesting exercise on the front lines of the battle being waged in the online advertising market this year. Let me know what you think.

That Newfangled Web... Thing

Let me start with a disclaimer. I love B2B Magazine. They cover strategic marketing like it's news, and they focus, as their name suggests, on B2B. But I'm still scratching my head over their recent roundup of the "Best & Brightest Media Strategists". (Okay, recent, as in last month, but I'm still catching up on my rag reading.)

When I started browsing over their picks, I noticed a distinctive lack of online media strategy. In fact, I finally had to pore over each profile before I found even one concrete example of an online strategy--really nothing more than a paid sponsorship for a site--among a number of interesting samples of print, radio, TV, and outdoor media ploys. What gives? They paid lip service to the Web in their intro, saying they'd made their picks based on the subject's innovative use of strategy across online and offline media, and yet there wasn't a single example of really innovative online strategy at all.

Is this 2005? The year when everyone's in a froth over projections for online advertising in 2006? The year when everyone's projecting the death of the newspaper audience?

Googlemyopia

I had a funny conversation with a sales rep from Google who called to sell me on reselling AdWords and AdSense. She was smart, well informed on Google's offering, and pretty well briefed on the company I work for. But when I told her Paid Search and SEO weren't on the roster of services I would be offering in 2006, she went, like, totally blonde on me. "You're a PR and Marketing firm, right?" Yes, I confirmed, and we don't do search marketing. She barely concealed her incredulity, circling back to the beginner's pitch to introduce me to AdWords. Yes, yes, I know. Great stuff, really. No, not interested, thanks. But if you want to send me some material I'll keep it on file. She couldn't resist confirming one final time, "You are a PR firm...right?"

Yes. I know Google is a really big phenomenon, and I know AdWords is critical for generating topline revenue at many companies--especially if they happen to be selling something like refrigerator magnets or life insurance. I've advised businesses spending 10s of thousands of dollars a month on paid search, and others spending over $100k on SEO. When something like 80% of all Internet traffic begins at a search engine, it's a good idea to understand how the game works. But--gasp--I don't think it's the end-all, be-all marketing strategy for most businesses. This seemed to come as a genuine shock to the Google Ad Rep. As if, what else is there?

Well, I think the biggest What Else is what seems to be a rapidly resurging relevance for Social Marketing--a marketing approach that focuses on meticulously cultivating relationships with a selected audience rather than trying to push a critical mass of anonymous and abstract targets through a response filter. As effective as AdWords is today, it still represents a paint-by-numbers approach to mass marketing that won't stand on its own in a world where users have on-demand access--through Google, no less--to hundreds of data points on your product from media sources, expert reviews and countless peers. Businesses are rapidly losing control of their own message, and channel efficiency isn't going to solve the problem.

I'll post more on this after the CMO Summit in Monterey this week. For now, I'm not sure whether I'm captivated more by the Google Ad Rep's inability to conceive of any marketing tactic beyond Search--are they really that self-inflated?--or by the thought that she was so incredulous because she doesn't come across any other companies that question Search's omnipotence. That can't be true. Can it?

What's Happening to PR?

Here's a challenge to the traditional Public Relations process at most companies. Despite all of the fragmentation and multplication of information resources, most businesses are still pursuing the age-old PR methodology of spitting out press releases as the primary method of media relations. Well, we've jut completed an interesting audit of one of our clients. In 2004, this company put out nearly 400 press releases--more than one a day. After analyzing media coverage, we discovered that although they distributed more press releases than any of their top competitors that year, they actually had a lower share of coverage than any of their top competitors.

It's going to be hard to change the attitude of CEOs who only judge the effectiveness of their PR by whether or not they find the latest release on Yahoo!, but clearly more strategic media relations methodologies are mission critical. That's always been true, but now we have the metrics to prove it.

Ning Bling

A new site has popped up on the Net called "Ning", and it takes the whole concept of democratizing content to a new level--making it possible to democratize the democratizing of appplications. Okay, in English: social applications, things like blogs, bulletin boards, matchmakers, etc., allow the unwashed masses to publish and distribute their own content to a broad audience. Now, someone is out there with a platform to allow the masses to create their own social applications to allow the masses to publish and distribute content.

Why write a blog on books if what you'd rather do is just create a public bookshelf? Why post and sell to strangers on eBay, when you could create one for your own neighborhood?

This is nowhere near primetime, but what a fascinating look at how decentralized the whole social economic order could become. I feel some unknown synapses firing. Could just be the coffee.

Corporate Blogging

I'm in New York again this week, presenting at the Factiva Forum on the topic of Blogs and RSS. The audience is made up of Factiva's corporate customers--information professionals responsible for researching and tracking content critical to their company's business objectives.

I just finished presenting on a panel called Blogs and RSS: Friend or Foe, Fad or Future, along with Sandy Hamilton, EVP of Sales and Marketing at NewsGator, James Brancheau, Managing VP at Gartner, and David Scott, Author of "Cashing in With Content".

From a content perspective, I don't think we broke any brilliant new  ground on the topic of Blogs and RSS, but we did present a broad and optimistic view of the power and utility of unstructured and unfiltered content, even in the face of significant challenges. There appeared to be a clear consensus among the panelists and audience alike that blogs represent the leading edge of a sea change in communications, and businesses need to move from asking whether or not the phenomenon is real to understanding and engaging the medium.

The audience seemed well ahead of the bell curve--70% read blogs regularly, almost the same number use an RSS newsreader, and at least 10% either write or contribute to a blog. That speaks well for the corporate uptake of blogs and RSS. Concerns focused mostly on control of content, including copyright and intellectual property issues, as well as general perception management.

Clare Hart, President & CEO of Factiva previewed some new information technologies they'll be rolling out Q4. That's a post in and of itself, that I'll try to dig into that in the next few weeks. Suffice to say the challenge of information overload is becoming a market opportunity, and information science experts (formerly known as librarians), are coming up with some interesting tools to address the challenge.

One of the most interesting presentations was Steve Wilson, Director of Global Web Communications at McDonald's. McDonald's appears to have a pretty advanced approach to blogging and content syndication--and "Lincoln Fry" is not a good indication of what's really happening at McD's. They're using blogs to collect and distribute internal corporate communications in addition to public-sphere marketing; they're using blogs to stay in contact with franchise operators; and they're rolling out a sophisticated RSS add-on to their CMS to provide subscription feeds to all their content.

Seth Godin at 4. Cocktails at 5.

Biting the Hand that Used to Feed Me

In the interest of full disclosure before delivering this post, I recently left BusinessWeek as a columnist for the online edition. The bottom line is that after 2 and a half years of writing for the small business section, our paths diverged. There's a lot of good stuff happening at BW, but unfortunately I don't think the Web site is as strong as it could be--from underlying investments in technology, to editorial focus. I wasn't too inspired to say anything about the transition until I close a new gig, but a feature I read today changed my mind.

BusinessWeek is posting on its site its editorial picks for "best of the Web".  They frame the list by saying: "with only 24 hours in the day, we have to settle on a relative few as places to work, play, and get things done online. These are our picks for the cream of the crop". Take a look at the list, flip through some of the links, and then ask yourself how this serves the BusinessWeek audience? The listings are vaguely categorized, have no description, and worst of all, as a whole they have only tangential relevance to a business reader. Lets just take a few examples:

Travel is listed under "play", not under "@work". I guess business people only travel for pleasure.

There are more links relevant to personal entertainment than business.

"Blogs" as a category contains a random sampling of high-profile mostly-technology blogs, with no breakdown into business categories, like technology, finance, management, and oh, I don't know, marketing?

What the hell is "collaboration" supposed to mean here? You've got a project management ASP, an SFA provider, an open source depository?? What is this category?

"Research" includes del.icio.us, a great social bookmark aggregator, but not, say, Edgars? Or Hoovers? Or Factiva? Or the US Patent and Trademark Office?

BusinessWeek has a great brand and a tremendous amount of goodwill in the market. Why are they having such a hard time using the Web to deliver the same quality of content they deliver through print? This list has all the hallmarks of an editor who's had a task to create a "Best Of" list sitting on his desk for 3 months, coming up for review, and slamming out an email to all hands to submit their favorite sites before 5pm. Too bad. This could have been useful.

Back to Growth

I went up to San Francisco yesterday to catch a day of Oracle OpenWorld. Feels like old times. A packed crowd at Moscone Center--something like 38,000 people expected for the show--a packed exhibit hall, packed conference rooms. Not much of the over-wrought, over-the-top marketing that we came to know and love to hate during the hey day, though Larry parked his racing yacht in the exhibit hall.

The buzz on the floor was about ProjectFusion (bringing together all of Oracle's products, regardless of origin, into a single platform), the Siebel buyout  (they were on a slide down anyway, right? wink and a knowing glance), and where to place bets on the next acquisition. Business Objects?

There was a big showing from the Supply Chain Management sector, the CRM sector, and the entire ecosystem of integrators and professional services providers. It's a huge base when you see it all together in one place. Especially when you step back to consider it's all B2B, with no fortification of consumer flash in the mix like you see at other big shows. The bottom line impression I got walking away is that Oracle is just shifting into third gear. I'm not an Oracle cheerleader, but I will pick up some shares.

Coming In From The Cold

There's a good article in CMO Magazine about the rise of marketing among technology companies. The article outlines the evolving landscape of marketing at high-tech companies, and the drivers behind the marketing department's growing ascendance. The gist of the article is that a maturing landscape of technology buyers is more discerning than ever, requiring tech companies to think more deeply about their offering, and behave more collaboratively in identifying and responding to market demands. This has provided the opportunity for marketing to play a more strategic role in the company's operations.

There are couple of other components I would add to the mix.

1. Technology marketers have long been one of the most isolated and under-valued representatives of the marketing profession. While marketers in other industry sectors, particularly retail, have long had strong peer associations, generous budgets, and a mandate for more strategic marketing programs like focus groups, surveys, and market testing programs, technology marketers have been relegated primarily to sales support. When the dramatic shift to accountability-based performance marketing caught many marketing sectors flat-footed, it was already old news for most senior technology marketers.

2. Technology marketers, by virtue of their chosen industry, are comfortable and familiar swimming in a sea of technology. They have to constantly adapt to disruptive innovations and rapidly learn new technology paradigms. In a world in which enterprise marketing requires emerging enterprise applications to leverage data and connect more responsively to customers, technology marketers have a tremendous edge over marketers who prefer to retreat to the world of demographic trends and marketing creative--and there are a lot of marketers still in that camp. 

The Need for a Bigger View

There’s a story my wife sometimes tells of an old woman back in the Azores islands where her family is from. The old woman had lived in a small village on the island of Pico all her life, and never ventured beyond it. By the time she reached her eighties, roads had been improved between the villages, and a young relative took the family on a drive to the other side of the island, about 10 miles away. When the old woman looked for the first time from the opposite shore and saw another island in the distance she gasped, “My God, the world is big.”

That’s what I feel like at my new job with the CMO Council. I’ve only been on the job a few months and already I’m getting an education that makes my career so far seem provincial. When I was running my own marketing agency, I had plenty of excitement serving a wide variety of companies large and small. It seemed like I was at the hub of enterprise marketing. But in retrospect, it’s evident I was always solving the same kinds of problems—developing competitive positioning strategies, establishing brands, building marketing programs, producing lots of collateral, messaging and Web sites. It was challenging work that is core to the marketing function. But now it seems like just a village on the side of a small island.

My work with the CMO Council, and with its parent GlobalFluency, has exposed me to a whole new set of operational marketing challenges that I haven't had to deal with much in the past. They range from big company issues--like how to manage a global brand when it's localized through thousands of agency partners--to issues that affect small and large companies alike, like how negotiate with the CEO over which key indicators matter in the measurement of marketing performance.

Many of these new issues were anticipated, and part of the motivation for my move. But other realizations have come as a surprise, the most startling being the state of the marketing solutions market. I've been on the front line for years reporting on the many ways in which marketing has been hammered by changes in the business environment--including the fragmentation of marketing channels, the explosion of new technologies, the demands for accelerated efficiency and effectiveness, the imperative to integrate with other key business functions, and the pressure to be more engaged with the customer.

What I failed to see was how rapidly a rabid market of proposed solutions to each of these problems circled the marketing profession. I’m not talking about Customer Relationship Management (CRM) or Sales Force Automation (SFA) platforms, which have been around long enough to have matured into reasonably viable tools in the marketing arsenal. I’m not even talking about the Business Intelligence (BI) or Business Performance Management (BPM) platforms, which have a strong lineage in other enterprise application arenas. I’m talking about one-off solutions for every tactical ill that ails marketers, from lead generation tracking to customer referral manage.

When I was managing a marketing agency, I would run across companies from time to time that would seek a partnership to reach my clients. When I joined the CMO Council, those infrequent calls became a tidal wave of requests to reach our membership. I did a recent informal survey only of companies offering solutions that affect the customer relationship lifecycle—the marketing pipeline—and came across 900 companies with some kind of offering. If you’re a marketer, 300 of them are probably calling you or emailing you every day.

I don’t know what percentage of these companies actually has a compelling solution for a critical problem facing marketers—I’ve seen some credible vendors with solid offerings, and I’ve seen some pitchmen hawking elixir. The problem is that they all look exactly the same. Rapid software development tools and the growing acceptance of Web-based applications have lowered the bar so precipitously that there’s almost no barrier to entry. Hundreds of overnight vendors can pop out of the woodwork when the opportunity arises, and the plight of marketing has proven to be an opportunity of epic proportion.

What has made this situation even more confusing is that every one of the vendors, from the mighty billion-dollar incumbents to the masses of new startups, is selling their product the same way. Whether it’s an email marketing platform or a marketing analytics package, just about every product in the marketing bazaar is being wrapped in the same package. After years of hearing that marketers are pressed for accountability, performance and efficiency, every product is being positioned as an ROI-based lead-generating powerhouse that offers a real-time dashboard on key performance indicators. It’s become parody.

But if there’s one thing I’ve realized in this larger world of marketing, it’s how important vendors are to the balance of the ecosystem. The demands on all business functions are growing along with the demands on marketing, and the challenges can’t be solved without a strong set of partners. The biggest challenge today is the void between marketers and vendors. Marketers need solutions, but they can't make sense of the sea of solutions, they have few benchmarks to compare options, and they don't trust vendors enough to take them at their word. Hmmm. I wonder why.

The only way the gap between vendors and marketers will be crossed is by moving away from the mindset of marketing as a predatory sport. Vendors need cultivate relationships with customers in a way that treats the market more as a channel than a field of prey. Rather than the typical approach of staking a positional claim, trumpeting a message as loudly as possible to the market, and then tackling prospects at the knees, vendors need to actively partner with customers to listen and define problems so that solutions can be positioned for a tailored fit.

Ironic, isn’t it? Matching problems with solutions is the very definition of marketing, and yet it’s precisely the missing mindset that prevents marketers from gaining the powerful vendor tools that can unleash marketing's full potential. I guess in some way, we're all stuck in an isolated village on one small island in a vast ocean. We need a bigger view.

The Invisibility Motive

There's a new release of Tor out today, a piece of freeware that lets you connect to a virtual underground railroad for data, helping you surf and move data anonymously over the Internet. The software establishes a network path of servers between you and your destination, but each server only knows which server the data is coming from and which server it is going to, not the entire origination-destination path. As the site explains, it's like taking a twisty path that is hard to follow and erasing your footsteps as you go.

Other than the obvious drivers and fears behind such technology (anonymous access to porn, hidden communications among terrorists, anonymous hacking and spying), there are some mainstream drivers that are of significant interest to marketers.

First of all, there is significant demand for anonomyzing internet activity. Marketers have come to rely more and more on the powerful demographic and behavioral data they can gather from Internet customers which helps them target their products and messaging more effectively. But a lot of users are uncomfortable with the notion of being tracked, and are willing to take steps to become invisible--even to hide such seemingly innocuous data as their browser type and version, through tools like Privoxy. There are many good arguments that collecting demographic and behavioral data is good for consumers, because it ensures better products and more effective (and thus cheaper) distribution. Unfortunately, business has cultivated an increasing antipathy among many consumers with invasive tactics that make consumers fearful of protecting their private information and behavior.

So what happens if this technology takes off? Companies will still have access to powerful behavioral data based on the traffic traversing their site, but some of the data they have today will either be lost, or become statistically suspect--such as geographic data, browser and platform data, and anything not derived directly from activity on their own site.

The second interesting use being explored among early corporate adopters is the use of anonymizing technology to conduct competitive intelligence. There are already ways for companies with good resources to anonymize their traffic, this just brings it down to the level where small companies can start trawling around their competitor's sites without the fear they'll be sniffed. But the obvious extension of such a democratic technology is its potential to undermine many of the tools used to prevent click fraud. If an entire network of anonymous tunnels is available for obscuring traffic, and proxy applications can strip computer identification data, then generating malicious traffic to trip up a competitor's metrics or drive up their pay-for-performance budget can't be far behind.

The interesting question to consider is how some of your customer's behavior may start looking more and more like the behavior of malicious competitors--or, to be more precise, won't look like anything at all--and what, as a marketer, you'll need to do to make sense of such a data shadow. What if your most valuable prospects are inclined to become invisible? Would you notice the trend?

Killing Customers Softly

Everyone's talking breathlessly about the apparently sudden realization that Amazon and other retailers may be "secretly" shifting prices around to give different deals to different buyers. The buzz is being driven by an article from AP reporter Ted Bridis spotlighting a new study by The Annenberg Public Policy Center titled Open To Exploitation, which highlights the ignorance of American shoppers.>

Sixty-four percent of American adults do not know that it is legal for online stores to charge different people different prices at the same time of day for the same product. This Groundbreaking new study explores this and many other shopping facts that all Americans need to know in order to protect themselves from online and offline exploitation.

It's interesting that many people passing the story around are focusing on Amazon--probably because it's the most recognizable brand in online shopping. The story originated from an incident in 2000, which you can read about here at The Register. In that instance, Amazon was giving a better promotional price to first time shoppers than it was to loyal shoppers. Apparantly, the practice has evolved as companies find ways to deal with "bottom feeders" who scour the Web for the cheapest prices. According to the Bridis article, one photography Web site is searching your cache to see if you visited a number of other sites to check prices, and then offering a higher price to bargain hunters to discourage price shopping, while offering better discounts to loyal customers to try to retain them.

Companies have long offered acquisition discounts to attract new customers, which existing customers don't get. You see this most gallingly in cell phone ads which offer fantastic premiums and benefits to new customers, but existing customers need not apply. The question was always how to do this in such a way that you don't anger loyal customers enough that they switch to a competitor. Cell companies have relied on long contract terms that lock you in tight, while Amazon has depended on building a customer experience that can't be replicated elsewhere, and which will hopefully overcome any annoyance over some missed deals.

What's intersting now is that the practice seems to be evolving as companies gain the ability to track more behavioral data, and target those kinds of customers that are most profitable for them. It's price strategy beyond the price war. What intrigues me most about this whole story is the realization that Amazon probably has the most powerful price modelling system on the planet. A number of years ago I worked on the repositioning and rebranding of Talus Solutions in preparation for their acquistion by Manugistics. Talus provided a system of profoundly robust price modeling applications--the kind used by automobile companies and airlines to figure out the revenue impact of myriad pricing programs, including discounts, promotions, and all the competitive strategies that go along with pricing. We're talking about the kind of programs PhD economists sit in front of all day to fine tune programs that can swing revenue millions of dollars in either direction.

When you consider the volume and variety of what Amazon is selling, and the data they have to populate their models, you know they have some pretty heavy iron on hand to calculate how they can squeeze an extra dollar or two out of every sale they can. Some people feel that's exploitation, but is it? No. It's good business in an age where competition is driving profits down to a razor's edge, and it's what allows Amazon to keep giving customers the convenience and variety they want.

Social Networks

I had breakfast this morning with Antony Brydon, the CEO of Visible Path, to talk about the business application of social networks. Visible Path provides an Enterprise Software package that allows businesses to create their own contact networks, similar to online social networks like LinkedIn and Plaxo.

The discussion ranged far and wide, only touching the surface of some fascinating topics that warrant deep consideration--topics I'm planning to explore further in the near future. But the most important topic, from the standpoint of the business case for social networks, is the quantification of intangible assets to describe real market value. The notion is that among the intangible assets that enhance real market value, but don't show up on the balance sheet--e.g. intellectual property, knowledge, business processes--one of the most powerful is human relationships.

Think of it this way: when you hire a sales person, one of the topline metrics of value is the depth and quality of their personal network. How big, how current, and how powerful is their Rolodex? The same concept is true for a business, but on a much larger scale. How extensive is the company's network--with prospects, partners, regulators, financiers, etc--and how well are they using it to create real value, like products made channels built, deals closed? If you could map your network, place a value on the nodes of that network, and track some of the critical business functions that utilize that network, like lead generation, sales, and referrals, you'd be able to demonstrate an asset that generates value for the company, and reduces risk for investors because it moves a series of important processes into the light of day. That becomes value you can measure in the marketplace.

There's a lot to explore in the uses and meanings of social networks, and I'll be talking to Antony more in the future. Look for a column, or a podcast on this topic in the near future.

Neuromarketing

The prospect of using neuroscience to improve the practice of marketing is equally exciting and worrying. On one of their beta posts for a new blog on the Future of Marketing, The Institute for The Future offers some links to articles on the application of neuroscience to advertising. 

On the one hand, there's a geewhiz factor to the notion of mapping the brain's response to advertising, and using that data to shape more effective ads. There's also an obvious ethical debate that will arise from perfecting the art of persuasion by science. Not to mention a legal one: Can you imagine what the defense of Big Tobacco would have been if they were using scientifically designed manipulation techniques to motivate buyers?

But beyond the obvious technological, political, legal and ethical questions--which will be the press fodder that boosts this topic into the mainstream--there are some practical business questions that always seem to get lost in the noise. Is there really a competitive advantage for most companies in diverting funds to manipulation technologies and away from just building better products and experiences?

One of the examples cited in the research is the mapping of brain patterns after the subject was exposed to a cola drink, without an associated brand, and then after. When just drinking samples of carbonated sugar water, the subject had little preference. But when sugar water was linked to a few cola labels, the brain patterns went off the charts in showing a preference for Coke. Great. Undoubtedly there's something to learn from that. But will it help Pepsi create a more successful product?

You could compare the Coke response and the Pepsi response and draw the conclusion that Coke's marketing, which is really the major substantive difference between the two brands, is just better, and Pepsi's better improve. But any time you're measuring a person, an organic brain, you can't separate out the lifetime of baggage that comes with it. It may look like just a set of brain waves, which Pepsi could theoretically try to emulate by testing a new brand mix. But what you can't see is the memory of drinking a Coke on a summer day at a family picnic. Or laughing so hard at the joke your best friend told one time at the ice cream shop when you were 10 that the Coke came streaming out of your nose. Those memories are anchored to the brand and inseparable from the brain waves that show preference in a lab. So what will Pepsi emulate?

Coke didn't create those experiences, even if they effectively enshrine them in their advertising to enhance recall. They've had good, consistent marketing over the course of most people's lifetime, and a long string of personal experiences have been attached to the brand. I'm not sure how knowing what the impact of those experiences look like in the shaping of preference-oriented brainwaves on a CRT scan will help Pepsi create a more successful product today. 

I can see the application of monitoring brain waves as a supplement to product response studies and focus groups,so that Pepsi can isolate the most appealing ad, and I suspect that's probably the point. But I also suspect that isn't sexy enough to push neuromarketing into the mainstream press and boost interest in the technology and the companies that create it. Far better to amaze and frighten us a little with the prospect that companies will be able to engineer desire from whole cloth. Just think of the consequences!

A Communist Internet?

I'm no knee-jerk captalist, but China's appeal to the U.N. to internationalize control over the Internet is a strange and fascinating view into the baseline assumptions of a communist system.

"Chinese Ambassador Sha Zukang told a UN conference that controls should be multilateral, transparent and democratic, with the full involvement of governments, the private sector, civil society and international organizations."

"It is of crucial importance to conduct research on establishing a multilateral governance mechanism that is more rational and just and more conducive to the Internet development in a direction of stable, secure and responsible functioning and more conducive to the continuous technological innovation," he said.

If we applied the same thinking on a national scale, any large company could argue that the government should take over Microsoft to ensure more rational governance conducive to stable, secure and responsible functioning, and more conducive to continuous innovation. Wait a minute, that sounds promising. Unless, of course, you envision congress trying to make decisions about what is rational...

Customer Data Stolen

Hackers broke into ChoicePoint, a company that aggregates consumer data and resells it to the government and businesses, and stole thousands of private records with sensitive data like credit records and Social Security numbers. About 35,000 customers in California have been notified that their records were compromised.

The story is scary enough on its face--enough to make any Californian monitor their credit reports even if they haven't been notified. But what is mind-boggling is the deliberate mis- and dis-information that ChoicePoint is putting out about the whole debacle.

In the first place, ChoicePoint, which aggregates records all across the U.S., is trying to claim that the problem is limited to California. What some of the articles covering this story fail to mention is that the only reason Californians were notified, is that there is a state law requiring companies to notify customers whose computerized data has been compromised. So according to ChoicePoint, the problem is limited to California, simply because that's the only state where they actually have to admit they left the door open to hackers. I'm sure the hackers, while pillaging the database, were doing geographic selects on California. Don't worry if you live in Ohio. They don' t have to report there, so there's no problem. Trust me.

Second, a spokesperson for ChoicePoint claims they're not even really sure that any data was compromised. That's comforting. You mean, you're collecting sensitive data on hundreds of thousands of customers, and you don't even know when those records have been hacked? So, um, if you can't tell whether data has *actually* been compromised, how are you able to say the problem is limited to California?

I'm one of those people who believes that sharing consumer information is a necessary part of an information economy. I'm also one of those people who believes regulation is not the best first line of defense. But when I see companies like ChoicePoint, I really start to question my judgement. If it weren't for a California law requiring them to come clean or face open-ended damages for their security lapse, no consumers would even know they were at risk for having their identity stolen.

But this is the really scary part. On the day they are being flogged for failing to secure the crown jewels, on the day they are openly, shall we say, equivocating about the scope of the problem... wait for it... THEIR STOCK IS CLIMBING.

Keeping Up With Demand

Every time I'm tempted to short Google's stock, they do something that impresses me.  I'm not talking about their new map, which is cool technology, or their library project, which is certainly ambitious. I'm talking about the kind of stuff that's happening in the bowels of the company that you don't hear about in the news. Management stuff. The stuff that actually helps a company generate revenue.

A lot of my clients are involved in some level of search engine positioning. 80% of all Web traffic begins at a search engine. If your company appears on the first page of results for a search phrase relevant to your business, it can drive your sales through the roof. But keeping your company's raw listing prominently ranked is a big investment in time and money.

Not too long ago, Google added paid search listings. The idea is that you buy the rights to certain key phrases in an auction scheme. When those key words are searched, you get a small advertisment listed on the results page, guaranteeing that you'll serve up an impression without all the hassle of SEO. Without getting into the ROI comparison between paid listings and raw rankings, this was a great move for Google. They created an economy around search engine results--one that nets them a lot of revenue. But there was a problem.

Google's AdWords were so popular that demand skyrocketed (I wonder-how much of the demand had to do with eliminating the confusion of SEO). And what happens when demand goes through the roof? So does the price. For some really popular search phrases, you could spend $1, $10, even $20 or more for *every click*, driving the cost-per-lead up to the point where many companies started to curb their enthusiasm--not to mention pop a few tums over the notion of competitors or cynical customers clicking their ads just to drill them for a few bucks. But that's just the dynamics of a rapidly evolving market. The real problem was something else.

One of my colleagues is the VP of Marketing at a mid-size retail software company that sells their product online. As you can imagine, driving Web traffic has an immediate impact on their sales revenue, so they keep pretty current on SEO and paid search. But a few months back, when she called Google to place a $30,000 order for paid search, she got the cold shoulder. No one would return her phone calls. It seems that demand was so high, as well as orders, that my colleague wasn't a big enough fish for Google to bother with. Her frustration made me start wondering if they were growing too fast. Hearing a customer with 30k to drop saying: "They won't take my money," doesn't sound very good to an investor.

But today I got a phone call from Google. A sales rep in New York saw Cymbic online, checked our search rankings for various phrases and found us lacking, and called to offer a helpful program to improve our performance. For my company, search engines aren't the best use of money. We have a highly targeted clientele that we reach directly; I really don't need another RFP from Qatar, or Poland, or India. But I was impressed because obviously Google is taking the pulse of its operations and making adjustments. That may not be the basis for a $200 stock valuation, but it says a lot to me about the health of the company. 

Rant #1

Sometimes I hate software. Actually, it’s really that I hate the makers of software, who can be so incredibly smart sometimes they turn out to be completely clueless. Which, if you know anything about software engineers is actually quite common. Why am I launching on a rant so early in the day?

I’m trying to import a lot of my old articles into a directory on my blog. No big deal, but it’s a lot of file management. All I want to do is to point my Web editor (Dreamweaver MX) to a directory so it can create a list of hyperlinks to the files in the directory. This isn’t rocket science, Web servers do this automatically. But after poking around for an hour in Dreamweaver, I still can’t get the stupid thing to do something so simple. I’ve gotten to the point where it will allow me to actually drag a file from a directory onto my index page, but it inexplicably embeds the link to an image in that directory instead.

I’m pulling my hair out because this is classic software development stupidity. There are 15 million bells and whistles built into Dreamweaver that I will never use. But one basic, bonehead utility that would actually be useful to many people (ie: Create a Site Map) doesn’t work, and doesn’t have any obvious reference in the online help, unless you count the quasi-Visio Site Map creator that is impossible to figure out without digesting the manual, but looks nothing like an actual *Site Map* that you would find on any of a billion sites you would visit on the Web. And what kills me is that this functionality used to work as simply as you would expect in the old Home Site engine that Macromedia digested when they upgraded Dreamweaver.

So, by “improving” Dreamweaver for the core of diehard koolaid drinkers, they’ve made it less usable for most people. To me, it’s like buying a car and then not being able to drive it because you need a mechanic's license to figure out how to start it. 

Update:

Instead of wading through online forums and references, I hacked my way out in a way that always makes me appreciate the unsung valor of basic tools: I put all of my files into a new directory without an index page; uploaded the directory to a Web server and turned off the default page for directories with no index. When I navigated to the directory, a default directory index appeared with html links to all of my files. I cut and pasted the Web page into Word (which retains the hyperlinks) and saved the file as an HTML document. I opened the document in a browser, viewed source, and cut and pasted all the code, with HTML links, back into word, where I used Word’s Find and Replace to quickly wipeout all the extraneous code. That left me with a long list of clean html hyperlinks to the files in my directory, in about 5 minutes. An ugly process, but better than battling Dreamweaver to do something so basic.