Advertising Market Disruption According to IBM

You expect a scrappy insurgent startup to talk Disruption. Hearing IBM talking “disruption” is, however, much more amusing. IBM’s last report on the media sector is entitled The End of Advertising as we Know It. The report does not pull any punches.

The next 5 years hold more disruption for the advertising industry than the previous 50 years, according to Big Blue. Apparently open advertising exchanges will replace traditional media wholesalers and agencies.

A strong concensus opinion, according to IBM’s industry poll, is that open advertising exchanges will take 30% of revenues currently won by traditional media. The figure must be in the 5% to 10% range currently. With Google’s adsense leading among exchanges with around 50% of online advertising. Yahoo and Microsoft are desparately trying to muscle in.

The big looser will apparently be the 30 second TV spot.

IBM’s solutions for traditional marketing agencies? If you cant beat them, you join them. Buy yourself a new business model and infrastructure (preferably from IBM), and hook into these open exchanges. This is not the first market that has succumbed to electronic trading.

Ad “receptivity” High for Online Video Advertising

Brand marketing has different metrics to online sales marketing. Brand recall and engagement measure the first, sales conversion rates measure the second. New web2.0 web sites, social networks and video sites, are notorious for low conversion rates. New surveys are, however, showing excellent brand marketing results.

A cross-media study, by Experian Research Services, found that viewers are 25% more engaged in the content of TV shows that they watch online than on a TV. John Fetto, product manager at Experian, said that TV ads online are especially effective at reaching consumers.


“Web sites that are extensions of properties that exist in other media channels have great potential to funnel audiences that are highly engaged in the first place,”
he said

The Simmons study was based on 74,996 interviews with U.S. adults about the TV programs, magazines and Web sites that they watch, read and visit. The survey was conducted online and via telephone between October 2006 and September 2007.

[Via Meadiapost Publications]

[Disclosure: Yes, we are invested in a video and a social networking site. My views may be biased.]

First Year Anniversary for tu.tv

Exactly one year ago, the tu.tv team spent a white night launching their baby. And as one of the proud parents, I insist on showing you a video of Jon Elosegui and his team installing the first tu.tv server.

Thirty servers and over ten Gbits of bandwidth later, we are approaching 10 million unique users a month. The tu.tv team has hit the perfect viral storm, check out the traffic graph below.

tu.tv

The systems department has responded heroically. Even though it occasionally came down to me driving a van full of servers to our London datacenter, capacity has always been ahead of the viral whirlwind’s demand. Nobody says incubating is easy.

Not to be outdone, the Sales team has sold its first major brand campaign for Nokia. Unlike straight banners on the site, video overlays have great impact on viewers. Given its similarity with TV advertising, clients and agencies are rapidly accepting the format. All good news on the profit & loss side. It is all looking good for a great second year.

Happy birthday and congratulations to Jon, Felix and company. Have a great second year.

Hollywood Writers: More Creative Class Disruption

wga

The trend continues; managers-administrators are being squeezed out of the value chain by the “talent”, the creative class. Sports agents no longer make more money than their sportsmen, as was prevalent in the early days of football. Script writers in Hollywood are following suit with the WGA strike, pushing the film and TV entertainment value chain for a bigger percentage of earnings.

The internet is touted as the catalyst for this dis-intermediation. Mark Andreessen paints a convincing scenario of how the creative class will distribute their work directly, without the need to go through the big studios. Thanks to new video technology, the cost of productions is dropping; no need for extensive fund raising. And great material is picked up and distributed rapidly by the social filtering sites, like youtube or digg; no need for massive marketing and distribution budgets.

Make it, blog it and they will come”

tu.tv Breaks into the Top 100 in Mexico

spanish free - video gratis

Free video site tu.tv traffic keeps on growing. It has broken into the top 100 sites for Mexico, according to Alexa Ratings. It is number two video site after youtube.

Talking with the tu.tv team reminds me that “When you grab a tiger by the tail, it is all about hanging on. Fortunately, the hispavista team has ten years experience of launching and sustaining online services; it is not their first time.

tutv traffic

tu.tv traffic accoding to Alexa Ranking


Nevertheless, feeding the beast is a challenge. Video sites are resource hungry projects, and the team needs to exercise ingenuity and flair in maintaining the service. It is a good thing the company has an engineering and technical background.

[Disclosure: We are invested in tu.tv]

tu.tv Breaks the Top 100 in the Alexa Rankings

spanish free - video gratis

Free video site tu.tv is in the throes of viral uptake. Since launch Christmas, traffic has grown to millions of unique users a month.The service is currently the number two free video service in Spain, behind youtube.com.

tu.tv alexa rank graph

The Alexa service ranks tu.tv number 88 in the its Spanish Top 100 list for today. Following its current trend, it will enter the top 50 by the end of the month. A look at the traffic graphs shows the doubling period is around a month; a worthy contender in the list of present day web2.0 success stories.

Jon Elosegui, head of innovation, is no stranger to viral growth; with half a dozen viral growth services to his credit in the 1990s and early 2000, he has detailed insight into how to create a thriving online communities. One of his salient themes is that it is about the product, not the promotion. The tu.tv service has had little uptake in the mainstream press, or among the blogosphere elite, the A-listers. Viral marketing has other vectors with which to access the target internet users.

When you have a hit product, promotion is often not necessary, and sometimes undesirable. The world is getting smaller. In the rush to improve the product and infrastructure in the face of ferocious uptake, marketing must take a backseat.

The innovation team is currently incubating new projects. You will see no press release, nor blogosphere comment on launch. Just straight launch into the young spanish internet user segment. A somewhat perplexing view of PR and “how to influence internet users”, but you cannot argue with the traffic numbers.

[Disclosure: We are invested in tu.tv]

Google Developer Day London

dibona

Chris Dibona keynoting Google Developer day in London. Open Source program manager at Google, Chris is ambassador at large among the Open Source and Free Software community. He is in charge of the Google’s summer of code program, and also the legal framework of licenses under which the Google releases and uses FOSS code.

As expected, the Semantic Web (with capitals) came up during Questions & Answers; Chris is candid regarding the intellectual ambition and scope of SW, and is skeptical of its practical application and adoption among web developers. Given the volume of content and wide-ranging approaches to developing the web, he thinks standards will evolve organically rather than be dictated top-down. A widely held view considering Tim Berners-Lee’s difficulty in forging concensus even within working groups at the W3C.

Google Maps Platform

Ed Parsons, Andrew Eland and Peter Birch, geo-spatial technologists, gave a sweeping view of the geographic data in corporate networks and User-Generated data waiting to be collected and exploited. Excellent work integrating Google Earth and Google maps through KML files, the new standard for encapsulating geographic and viewing data together with the multimedia information.

Mapplet is the term for Google map widgets. A mapplet deploys data and functionality on a users’ Google map. Users can submit and select mapplets from Google’s mapplet open directory. The same as Google gadgets. Google Maps is fast becoming the platform to render and present geographic multimedia information AND functionality. With 200m downloads of Google earth and the strong Open Standards emphasis, the commons community seems to be adopting the platform rapidly.

Google Maps Mashups

Mike Astle, from online estate-agent Nestoria, was forthcoming about working and organizing a Google mashup company. Nestoria’s added value is geo-locating and processing estate agent information, either scraped or XML fed, onto Google Maps. Mashup business models are inherently fragile, as they depend on the whims of Google’s rapidly evolving Map/Mymap/Mapplet platform, and Mike sternly fielded the inevitable questions during the Q&A.

Whether Google’s creative commons ecosystem can also support businesses is still an open question. Only a few of the 50,000 Google mashups have revenues at present. Tellingly, Nestoria has built a buffer interface to Google maps, so as to allow swapping it out for Yahoo’s map service.

Google Developer Day

Google Mobile Search

Gummi Hafsteinsson described the ease with which mobile web can be developed nowadays. The new converging xhtml standards allow a KEEP IT SIMPLE approach which eases targeting a particular mobile device/mobile user for a particular service. Google’s mobile index is becoming the focus of conversation, as it is central for accessing mobile internet users. Gummi described how the newly relaunched index combines so-called transcoded and true mobile web sites to provide optimum results for the mobile user.

Google Gears

The big announcement was Google Gears. The ability to use Google spreadsheet, Google documents, Gmail and Google Reader while not connected to the internet. Google’s office suite can now be used in lieu of Microsoft’s Office suite. Google has stepped out onto the desktop software arena, no question.

Members of the Hispavista innovation team were present, with their boss Jon Elosegui, to hear the latest update on Google’s APIs for the various mashup projects in incubation. User Generated content is increasingly geo-tagged and Google maps renders such tagging best at present. With Google Developer day ongoing in 10 cities, we were not alone.

[Ian Forrester provides a good interview of Chris Dibona over cubicgarden.com…
]

Correos Stand at Internet World 2007

correos

I was surprised to come across the Spain Post Office (Correos) stand at London Internet World 2007 yesterday. Apparently, cross-border trading in Europe is catching on quicker than I thought; “we reach any place in Spain” is their message.

Correos is offering standard Direct Marketing services for Spain

  1. Direct Mail: dispatch of volumee promotional mail into Spain; leaflets, catalogues magazines
  2. Quality databases both acquiring and cleaning the list
  3. Parcel services already used by the likes of Amazon when shipping into Spain
  4. Registered post an alternative to the UK Post Office service for Spain

I applaud the move on behalf of Correos to open up cross-border online market further. I just hope businesses in Spain are taking note and planning to export into northern Europe in return. Certainly good news for Spanish online publishers since northern Europe merchants exploit online advertising fully in their ad mix.

Worst case scenario is that southern Europe becomes a consumer nation for value-added services and technology.