Microsoft ends Encarta. Will your memory be next?

Microsoft has announced it will discontinue the Encarta encyclopedia this fall -- a sad bit of news for those of us who grew up struggling with DOS and floppy discs and were suddenly delighted to find all the world's information on a set of computer CDs. More than a victory for Wikipedia, the move points to a future where storing information locally really doesn't matter that much anymore, since you can rapidly pull anything out of the cloud.

Which brings up your mind. We have to wonder, what is the rationale for learning new languages or memorizing presidents if all that data can be transcribed and pulled forth at the touch of a keystroke? In a few hundred years, human beings may be prized more for their ability to search and less for their ability to remember. Computer banks may become the real memory systems; just as social media now has extended our personal Dunbar numbers to allow for 1,500 relationships instead of 150, it may be more efficient to let data chips record the world, and we'll simply learn to call up the right search query. With the ubiquity of GPS and video and human relationship mapping, pulling the universe together is only a step away. Why should we have to remember all that?

Just a thought. We had another point, too, but forgot.

Via Jonathan Nafarrete.

Free at last, business, you're free at last

Chris Anderson's blog just posted an overview of "free" business models, or ways your firm can make money in the coming crunch where prices are pressed lower by digital commoditization. Despite Anderson's eloquence, we still wonder if all business models are being pushed to the free -- digitization isn't going to reduce demand for solid goods to the point where margins become zero for things made out of sheet metal. Still, if you're running a small shop or startup, the list may provoke new thoughts on how to make money while passing along lower perceived costs to customers.

If you're new to the Freemium idea, here's an overview of Anderson's speech at SXSW in Austin.

The problem with video...

... these days is you can't figure out what is real and what is not. At least this golf shot gives us hope.

Falling for outdoor

Yikes. A Swiss skydiving school put aerial shots of a city on the floors of high-rise elevators. The impressions were sure to sink in, along with a few heart attacks. Via Angela Natividad at AdRants.

Writing with power

Here's an example of raw, honest writing to inspire you on a Friday. Max Zeledon is one of the intellectual gems uncovered by the internet -- a financial trader schooled in macroeconomics who is a former fashion photographer, who reads and writes voraciously. When not discussing toxic assets and deflation on his blog, he often segues into thoughts on human nature. Max doesn't censor himself. Sex, love, bowel movements -- it's all there.

Max on fear:

I used to run track in college—the 400m was my specialty event but I would also run the 200m whenever they needed me to fill in for an injured teammate. Running the 200m was a nerve wrecking experience because at the college level this event is about pure power and speed—and a lot guys I faced ran it under 21 seconds. Pre-race jitters were a given for me. My heart would start to race and I would get this horrible butterflies in my stomach. It was definitely fear—fear of getting smoked in front of a huge crowd of frat boys. Taking a huge dump was mandatory and that usually helped me a bit (I felt lighter) but the anxiety symptoms were still there.

My warm-up routine helped too—stretching, jumping, knee lifts, and running in place. Another technique I used was self-talk. Track runners are known for talking to themselves before a race and the technique is all about fighting nervousness. Coaches also emphasized visualization exercises but I never really took them seriously. I think that was a mistake on my part and I blame it on youth and immaturity. But the only thing that got rid of the butterflies was the race itself. Once I got on those blocks and the gun went off, the adrenaline would take over and the only thing that mattered was making sure I was not the last guy coming out of that curve.

In retrospect, I think the jitters were a healthy form of self-awareness because they kept me alert—acutely aware of my limitations and fears. And a healthy dose of fear is a good thing both psychologically and physiologically. Outside the realm of sports, the jitters are everywhere and learning to deal with them is important because the last thing we want to do is to choke during a presentation, an important business deal or a timely stock trade.

TV is still king

Oh, internet hyperbole, it's so tempting to believe you're the big thing. But a new Nielsen study reports that Americans still use TV more than any other media. The average U.S. citizen spends 5 hours and 9 minutes a day in front of the live television, and 8.5 hours total in front of all screens including cell phones and GPS devices.

Younger demos skew toward newer "screen media" -- adults 25-34 watch only 3.5 hours of live TV a day, vs. 5.5 minutes of internet video and a boatload on mobile. The real trend to watch, though, is the growing multitasking among almost every age group -- in which consumers watch TV as background ambiance while working on computers or texting on mobile devices.

TV is still king. The question is whether consumers, in their new multitasking modality, are paying attention.

Photo: Jmsuarez

39% of adults addicted to mobile. 7% not happy about it.

Do you have a love-hate relationship with your cell phone? Join the club. Pew reported yesterday that 39% of U.S. adults are now heavy users of mobile devices to access the internet. Pew lists several typologies:

- 9% of adults are Roving Nodes, using mobile to connect and share with others
- 8% are Digital Collaborators, using mobile to share creativity
- 8% are Mobile Newbies, just figuring out how to connect online...

The list goes on, but one group stands out: Ambivalent Networkers. This group represents 1 in 5 of heavy users of mobile internet -- the people who text on phones most often -- and they aren't happy. Pew reports this group feels overwhelmed with the need to stay connected, out of fear they may miss something, and are growing frustrated with the constant variations of social media options to communicate.

We've noted recently that the typical savvy mobile-web consumer now has at least 12 standard ways to listen to others: email, Gmail, chat, Twitter, Facebook, LinkedIn, blogs, blog comments, RSS feeds, desk phone, cell phone, text messages. Within each tool, subtools are allowing new controls -- such as the free TweetDeck software which divides Twitter streams into groups of friends -- but each new subtool adds yet more complexity.

Is a backlash growing? Will consumers eventually demand streamlined interfaces to control online connections? Don't ask us. We're still adding new icons to our iPhone.

Photo: Scifr

How do agencies build buzz in a recession?

Not with press releases. Look what Plaid is doing. This branding/interactive shop has enlisted the mayor of Danbury, Conn., in a proposed military assault on Denver, challenged Denver's own mayor, and took over a popular Denver-based ad blog all to promote an upcoming road tour.

Ad agencies do road tours? You get the idea. In a market where people retrench, go build buzz.

P.S. Plaid invited us to play on the Denver Egotist blog takeover, see our riff here.

Sci Fi, Syfy: It's time, dear marketers, to recognize women

The Sci Fi cable channel made the news last week by announcing it would change its name on July 7 to Syfy, an obscure new brand that outraged some Star Trek enthusiasts. We found it no coincidence that the cable network timed the news to the upfront, where advertisers make major financial commitments for the coming year.

What's up? Women are resurgent as an advertising force. Consider that women's web sites were one of the fastest growing categories in 2008, with 46% more visitors (only slightly behind job-search sites). Slate.com is spinning off its popular XX Factor blog into a woman-specific site. Kristi Faulkner, founder of the WomenKind marcom firm, told DM News "Women are hungry for something that is respectful and dignified."

And of course it helps that advertising dollars are behind this. In a down economy where men are paring back on big screen TVs and lawn equipment, women still run the household -- and most other spending. In the United States women account for 80% of discretionary spending including buying 90% of food, 55% of gadgets, and -- yes, boys -- most new cars.

Sci Fi is broadening its brand to include supernatural and paranormal entertainment, topics more likely to appeal to women and to attract the marketers who chase them. There could be a lesson here for your own brand.

What's black and white and dead all over?

View more presentations from Dirk Singer.

Dirk Singer at London PR agency Cow has created an insightful report on the potential death of the newspaper industry. The full PDF, found here, offers more details than the slides above and points out the UK press faces the same challenges as papers in the U.S.

We're just linking to it because Dirk quoted us next to Arianna Huffington. Finally, our thoughts align with The Huffington Post.

Metcalfe gets a haircut

Brian Morrissey threw out a line in a podcast last night that everyone today is getting a haircut. We were debating union pay issues with him, but it occurred to us later that even Robert Metcalfe is getting a trim.

You see, Metcalfe was wrong. Metcalfe's law -- the idea that networks grow exponentially in value as more users join them -- drew the curve too high. The reason, at least for humans, is that people don't act the same as fax machines; not every link has the same value, we have a limit to the number of relationships we can maintain, and so our networks tend to fragment into subpopulations.

Networks don't grow wildly in value if the links inside break and fall apart.

Which is why the recent trend of social media tools like Facebook and Twitter being sliced up is so interesting. Tweetdeck is a free software/mobile app that now accounts for nearly 10% of Twitter traffic, and it allows users to create groups of people they want to watch closely within Twitter. Web sites such as ExecTweets or BusinessWeek.com's new feed into Twitter are creating silos within the human networks, easier to access, depending on your interest or mode or point of entry.

All of which points out social media is fragmenting even as it connects us, limited the total utility of the network. Step back and count the sheer number of systems you now use to communicate. Email. Gmail. Hotmail. Facebook. Twitter. Desk phone. Home phone. Cell phone. Fax. Physical mail. Voicemail. LinkedIn. Blogs and their comment threads. Do you really plug in seamlessly to each, reaching all possible connections? (Ha. If you do, please come help us with our In box!) Each system is a network with potentially unlimited contacts and ways to tweak it, but to function we filter out insanity by limiting access in each.

Advertisers who still believe social networks equal wild potential, where a message can scale to the masses, aren't paying attention and perhaps should wise up. Networks are largely illusions. We all aren't connected, because if we want to listen to a few, we have to find new ways to shut some others out.

This isn't to suggest your marketing message can't scale. Just beware of the limits within new networks -- humans tend to cluster, and each subgroup is a disconnect that can turn your message off.

Executives get their Twitter

Federated Media notes there are more than 100,000 executives on Twitter; where do business groupies begin? So it's launched ExecTweets, a portal site that lets you peek into the minds of the C-level people in business, government, advertising and healthcare by monitoring their Twitter streams. It's a good example of how social networks are beginning to (a) mature by capturing conservative communicators and (b) thus be sliced into manageable subnetworks to help users digest the sheer scale.

Our only question is why weren't we invited?

NYT's future model? We suggest it's not personalization.

Jason Moriber has been writing insightfully about what might save The New York Times, including personalization. We debated this on his blog and are replaying it for your amusement.

Jason:

Beyond the ongoing debate over what will eventually happen to newspapers I feel there needs to be some quick pragmatic thinking on what can be done “now.” The quickest changes can be made to print-media’s online sites.

Show me the static content for free. I’ll pay you for the active content ... Offer me something you can’t get anywhere else but online – my behavior and my preferences. Don’t sell my data to marketers, sell it to me! Mix the available content and data with my behavior, let me set a few preferences, and you have a paid model.

Me:

Very interesting ideas. I debate, though, whether personalization is enough to build a subscription base or loyalty. The idea of 1to1 marketing has been around since Don Peppers in 1991 and never seems to make it as a real business model; Netflix and Amazon try and still fall far short.

The problem is the switching costs to find relevant information are now so low, that as soon as NYT charges - I’ll fly somewhere else, where the same quality content can be had for free.

What I might pay for though is access to the minds of the people writing the stories. Imagine spending $20 a month to be able to converse with the top technology writers at NYT, or perhaps a club of similar top readers interested in the topic. But even that is a tough sell given the ease of setting up other social networks.

The truth is that the content we all love so dear has become a commodity. There is only so much demand; the supply has become almost infinite; as the quantity of supply moves farther and farther to the right on a classic supply-and-demand curve, the price of the good (content) must fall. I suggest that there have always been millions of brilliant minds in the human population out of the billions on the planet; journalism in the past limited our access to these minds, so we perceived that NYT and other top papers had the “few” people needed worth spending to see. But now that I can find you, or anyone else I deem smart or wise or reporting real news that I find useful, I can flow to this huge real supply of intelligence. The profits disappear as the friction between content supply and demand are gone.

As far as the solution? The only one I can see is for the current knowledge empires like NYT to become nonprofits, lock in their brand, and admit that advertising or subscription revenues will no longer be enough for them to survive. Knowledge, like data, has always wanted to be free.

Your blog now exposes your psyche

Look out. Some clever person has built an online tool that scans your blog to determine your personality type based on the Myers-Briggs scale. You know: When you judge, do you "think" or "feel," and when you perceive, do you "sense" or use "intuition." The theory is based on Carl Jung's work and explains why you just can't get along with your boss, because different people see the world in vastly unique ways.

The real story here is that many people are exposing their inner workings using social media tools, and outside groups will begin collecting this information for marketing or customer service purposes. An individual who chats frequently on Twitter over time sheds deep things about his or her personality. There's a market for information like this.

Via TheBeanCast.

Playboy, like Chris Anderson, flows to the free

Wired editor Chris Anderson spoke at SXSW this week, arguing again that pricing on all products and services will flow to the free as the internet matches supply and demand more efficiently.

As evidence, we give you Playboy. The publishing empire, which has been severely threatened by free online alternatives, announced today it will post 53 issues from 1954 through 2007 at a free Playboy Archive web site, unedited, with no age restrictions. Now -- if you're still reading and haven't clicked through, stay with us, people -- this is a perfect example of Anderson's freemium model, where a large portion of your services are given away in exchange for a small group of customers who pay. Marketers could learn from this move; rather than fight online competition or piracy, learn to coexist with free models while building future demand for paid services.

As if you're still reading this.

Pew: Teens much less likely to shop online

Yo, kids, don't you like Amazon.com?

Dirk Singer points us to a recent Pew report evaluating differences in internet use by age. Many of the findings are obvious -- teens like games and blogging, seniors are increasing their time on the internet -- but one leaped out. Only 38% of online teens said they shop online, compared with 71% of young adults 18-32 and 80% of Gen Xers age 33-44.

Some of this may be driven by finances; teens don't make much money. But you would think teens -- with their constant online connections and the marketers rabidly chasing them -- would spend what money they have via online purchases. It could be that youth have a focused modality on creating and sharing content in social media, and so all those hours spent on Twitter, Facebook, YouTube and blogs reduce the time teens spend shopping. Or, alternatively, young people use online access to gather information but prefer to make actual purchases at the mall.

(Or it could simply be teens don't have access to credit cards, usually required for online purchases. If so we smell a huge marketing opportunity here for a credit card firm that can provide some entry credit tool for young people with parental controls. No, wait. BAD idea.)

Since people take their media habits with them as they age, ecommerce players and online advertisers should watch this new modality. It also points out the need to match offline results with online impressions; the last click on a web site is not the only indication of a sale.

Photo: turtlemom4bacon

User-generated constructs

The Marketing Addictionary is a fun new site that lets you upload any words you coin, where others rate them, and we suppose potentially cascading your originality into the master English oeuvre. We penned tweetus interruptus ourselves and felt a little thrill for adding a term describing the constant hiccups of Twitter. Go ahead. Word a little.

Seeing the who, not the what: Robert Scoble's interview with Quantcast

Most web analytics measure what happens online -- how many impressions, clicks, conversions. But finding out who is visiting sites has been more difficult.

We just chatted with Konrad Feldman, co-founder and CEO of Quantcast, for a forthcoming BusinessWeek.com column. We won't spoil the thesis, but if you are interested in web measurement, the Quantcast system is free and provides extensive demographic profiles of web site audiences. Here Robert Scoble interviews Konrad for details of how it works.

SXSW attention deficit disorder has some 'real' advantages

So we got home tonight from SXSW Interactive, the web-internet marketing festival, having learned a few things. Facebook is emulating the Twitter live "stream" (to become the Experian prospect database of the now). Mobile advertising still doesn't exist in any scalable form (but like the Great Pumpkin may be just around the corner). Quants can predict outcomes of baseball and elections but not stock movements (because too many public companies lie). The psychology of game play can guide better design (in web sites, product usability, and marketing campaigns).

But the real finding is the web is now merging with reality.

This is both a good and bad thing. Bad, in that people no longer pay attention. The geeks (OK, and us) spent much time ignoring elite speakers to type their own commentary on iPhones or laptops into Twitter, with hashtags (brief codes beginning with an "#" symbol) allowing others to search for the backchannel snark. Everyone justified this as a new way of adding personal value to the presentations, but face it, if you're typing you can't listen, or at least listen well.


The good spin, though, is sometimes the backchannel created a powerful overlay on reality -- real insights from your peers on the current debate; the contact who finds you in a room of 1,000 people after you text your shirt color; the location of the person you need to meet on the roof of the Mashable party. We think Todd Sanders did it best -- this Wisconsin-based webmaster couldn't make SXSW, so had friends email him photos with vacant areas allowing him to be photoshopped in. The entire series is hilarious, bordering on art masterworks. Here, Todd arm-wrestles Plaid interactive agency president Darryl Ohrt over a booze bottle, when Darryl was actually holding nothing. Soon numerous people were staging photo shoots to feed Todd; uberblogger Chris Brogan posed with his arms around air; Todd became a meme within the SXSW hip crowd, who in turn looked for his next photoshopped feed back.

It's scary people don't listen. It's cool that ideas, moving from the virtual web community into reality, give us new things to listen to.

Privacy vs. publicness: The genie will be collected in the bottle

Author Jeff Jarvis sat behind us at the SXSW privacy panel yesterday, typing away frantically at his keyboard. Thirty minutes into Danah Boyd's onstage discussion, Alan Wolk, sitting to my right, laughed and pointed to his laptop -- where we both read Jeff's blog post dissecting the very seminar we were in. So we Tweeted the privacy report to our friends ...

Ironic, isn't it, that our very observations of a privacy discussion were not private.

Human privacy has left the building, and discussions on if, how, and why people may wish to opt-out of systems that collect their data are becoming antiquated. One point missed in the privacy panel debate was the inevitability that large data sets on your personal behavior will be collected -- because in the history of technology touching data, information is always compiled. Consider:

1. Criminal records are now standardized and shared across states and countries.
2. Tax records are now consolidated at national levels.
3. Your financial history -- yes, perhaps one of the most personal things about you -- is monitored with every credit card swipe and compiled into vast credit profiles by companies such as Experian and TransUnion, and are available to anyone at anytime you request a loan or subscription service.

People are not up in arms that their financial or past mistakes are collected and shared, yet a citizen from 100 years ago would be shocked at how much information is already compiled. Over time, technology gradually pulled these records together, and we all eventually accepted it.

So let's look ahead at the next two waves of inevitable data collection:

4. Healthcare information silos, now critiqued for the wild inefficiencies they create in health treatment, are finally being addressed by the Obama administration, which hopes to create universal health records.
5. Social media information silos, now collected by numerous popular internet subentities, will be consolidated as well.

Privacy is a new idea, about to go away

Alice Marwick of NYU said at the SXSW panel that our current notion of privacy is a relative novelty; for millennia humans lived in tiny communities with few walls where everything you did was known by others. It was only modern society, where people moved around more, spend time in isolation at home, and can shift personas between high school and college and each subsequent job, that made "privacy" something within an individual's control. Technology is removing the walls we have so recently built, and there are too many entry points for data for anyone to stop its consolidation by opting out of certain privacy controls on Facebook or Google.

Technology is converging all the data sets, as it always does, and this time it includes your social connections (Facebook), your personal preferences (Google), what you are doing at this instant (Twitter), and your GPS location (any cell phone).

You can't opt out of this new anti-privacy universe. The genie is pulling all data into one bottle. Get ready to give up control.

Photo: Liel Bomberg

Pepsi Zeitgeist, or Twitter as the database of the now

We're flying to Austin's SXSW Interactive conference tomorrow, you know, that geekfest where people who don goggles to peer at what's coming down the internet highway get together for illumination and ale. While there is a lot of silly crap floating around from brands trying to edge in on the event -- P&G made a clichéd, lame attempt last night by enlisting the usually brilliant David Armano in trying to hawk Tide T-shirts for charity -- Pepsi is the brand that has hit coopted event coolness out of the park.

Pepsi launched a microsite that compiles Twitter text feeds from anyone mentioning what they're doing at the SXSW conference -- perfect for internet addicts arriving in droves, trying to plug in. Beyond the graphic gimmicks, the Pepsi site taps the real power of Twitter as the database of the now, or the only tool we know of that gives you huge sets of information on what people in the world are doing at this very instant. Experian has profiles and demographics and psychographics. TransUnion can slice and dice your credit report. But who else can tell if we're chilling with a friend, about to eat a taco?

If you are still new to Twitter, visit its search menu here, type in a topic (or your brand), and find out what millions of people are saying about it at this very instant.

Google offers free U.S. phone service. No surprises here.

Speaking of Google, the search giant just announced it will provide a free phone service starting today for domestic calls in the U.S. We'd go on and bore you with the details -- it has free transcriptions of voicemail! AT&T doesn't, so will AT&T fold? will Google take a bite out of Skype's $500 million in revenue? will phone calls serve you contextual ads for pizza when you tell your spouse "Honey, I'm running late and starving"? -- but let's not.

Instead, reflect on this simple quote from Vincent Paquet, who founded GrandCentral, the acquired baseline for Google's new free dailing: "The notion of long-distance calling is becoming less and less relevant every day." As all services become data and access to data becomes ubiquitous, the margins people once earned by bridging the gap between data supply and demand will go away. In the 1970s your aunt in far-flung Montana sounded like she was speaking from a well. Today, it costs less to call, because geography has been bent until her voice is right next door.

Photo: Kenzie W.

A video introduction to Google advertising

If you know someone new to Google advertising, share this. A good refresher for you, too.

TED shocker: See the internet in the air, with no geeky glasses required

Pranav Mistry, a student at MIT Media Lab, has created something that will change your world in a few years: A wearable device that allows you to interact with the web while you walk through reality. His mockup (demoed above by Pattie Maes) uses about $350 of off-the-shelf components -- a small projector, camera and mirror hung from the user's neck, and a cell phone with wireless internet access. The simple combination allows you to match images from the real world around you with cloud-based profile information, to find out if the tissue paper in the grocery store is good for the environment or whether your new college roommate likes to snowboard.

It all reminds us of a recent William Gibson book in which the protagonist, an über-hip-former-rocker journalist, uncovers an underground world of techies who are melding the virtual world with reality. As Gibson notes, most of us are already using virtual reality by sitting in front of computers for hours a day, but we're trapped, unable to touch the information behind the screen. The next step will be unhinging virtual information to let it float over the reality we see outside our windows.

Via Eric Gonzalez.

Page and clean coal not found

Clean energy is a controversial topic; it's easy to say you don't like coal, but coal is powering about half the juice running through your office or home at this instant. Regardless of your position, Crispin Porter + Bogusky strikes a chord for the Alliance for Climate Protection by placing anti-coal banners on web 404 pages.

Brilliant media buy matching a web user's disappointment over not finding a web page with a PR spin. Via Brian Morrissey.

Direct mail spending is down. So could demand still be up?

A rocket scientist would look at this chart and deduce direct mail volumes are down significantly because banks are retrenching. EMarketer reports spending on postcards and the like will fall from $58.4 billion in 2007 to a projected $51.8 billion in 2009 -- a whopping 11.3% decline within two years.

There is no question the collapse of lending hammered direct mail volumes. However, beneath this trend it is possible that improvements in targeting are reducing direct mail volumes while marketers continue to expand the channel. How? With stronger targeting and response rates.

A core metric of direct marketing is response rates: If you spend $250,000 to mail 1 million pieces and achieve a 1% response, you would get 10,000 respondents. However, say your marketing program gets more sophisticated and mails to a better list of people more likely interested in your service. Now, you spend only $125,000 on 500,000 pieces -- but get a 2% response. You still end up with 10,000 responses.

The dark irony of direct response programs is that the better advertisers get at targeting, the smaller the total spending within the ad channel. This trend is now highly visible in online advertising, where behavioral targeted ad networks can sell inventory at a fraction of the CPM (cost per thousand impressions) of marque sites. If you need to spend $60 on WSJ.com to reach wealthy people but can do the same on an ad network that charges $4 CPM, your total spending in online ads will decline -- and writ large, the industry as a whole may shrink. Media analysts need to look beyond just aggregate spending by advertisers to judge the interest within a media category; they must peek beneath the hood to see if better targeting is building demand while reducing total spend.

Dead breakfast cereals, or how to survive the coming brand contraction

Remember Yummy Mummy? Gunaxin has a nice ode to discontinued breakfast cereals, which reminds us of the current brand collapse going on inside consumers' heads.

Product brands today are under tremendous pressure to survive, and it's not driven by companies like GM desperately seeking to cut back. The root cause is the decline in consumer consumption and the corresponding lack of interest in brand options. Decades ago Al Ries and Jack Trout wrote the brilliant book Positioning, explaining that consumers (even back in the 1970s) faced information overload and so defended themselves by creating little ladders of product consideration in their heads. If a person is only moderately interested in a product -- say watches -- she might be able to rattle off Casio, Timex, Swiss Army and Rolex. In her mind, she only has four rungs on the watch brand ladder. By comparison, a guy who loves watches might think of scores of brands: Accurist, Adriatica, Alpina, Aviator, Baume et Mercier, Bell & Ross, Breitling, Bulgari, Bulova ... with lots more rungs in his head.


The goal of brand managers is to grab a rung in that mental positioning ladder, and the classic strategy is to "position" your brand vs. someone else. If Hertz is No. 1 in car rentals, Avis tries harder. This positioning strategy was hot in the 1980s and early '90s -- think of the Coke vs. Pepsi wars or Wendy's "Where's the Beef?" -- but has cooled off recently, with far fewer brands attacking others or deliberately taking position against a competitor's attributes. It's time to reconsider. As consumers retrench in this severe recession, their mental consideration set of potential consumption options is way down. There are fewer rungs in their heads. Someone may love Saabs, but what about Saturns and Pontiacs? And if some brands will fade from these mental ladders, shouldn't you try to make sure it's your competitor, and not you?

The point for marketers is you now need to be aware, more than any time in the past two decades, of how your brand is positioned against other options. Consumers are backing away from the cereal aisle, and some sweet brands are about to get taken off the shelf.

Via Make the Logo Bigger and Graham English.

Plaid's take on Skittles and dying newspapers

A good wrap by interactive branding shop Plaid on the week's events in advertising. We're beat so we'll let them cover it. Happy Friday, Flakes.

Calvin Klein's Recession for Men

We could talk about how vast improvements in recording technology coupled with cascading declines in the cost of storing data make it possible for amateurs to emulate professionals, putting huge margin pressures on broadcast intermediaries and ad agencies. Instead, we'll watch this and laugh.

Parody by Adrian Beiting.

Google to sponsored blog posts: Your links are trash

Dear Bloggers: Behave. Because if you write a lot of paid posts, your blog could get demoted by Google in search results.

This is the latest wrinkle in the story about how many bloggers are now willing to sell their "posts," or written opinions, to marketers trying to buy their way into social media. A few years ago a guy named Ted Murphy thought to encourage legions of bloggers to shill, er, write about products for payment. Google got wind, and pretty much shut it down by removing the "page rank" of all such bloggers -- turning them invisible on the web.

Murphy recast his company to IZEA, and now has launched massive efforts to make paid blogging placement more respectable with new rules such as full disclosure -- bloggers who shill must declare it a "sponsored post" -- and telling advertisers the bloggers can write whatever they want. The new model is now being seeded across the internet by engaging top bloggers (Chris Brogan, Joseph Jaffe) to write, show it's cool, and encourage other bloggers to do the same.

This week, Google moved again to shut it all down. Matt Cutts, an enforcer at Google's web-spam team, has re-announced that any bloggers who write paid posts must include a "no-follow tag" -- a snippet of code that tells Google's magic machine to ignore this post and any links from it, because it is worthless. This is a harsh judgment against paid posts because any marketer who hopes to generate 10,000 links into her brand's web site from paying bloggers will now get exactly *zero* links (or more accurately, the scoring from those links will not drive up the brand in Google search results). Not exactly a good return on investment. Google went further by also warning bloggers if they don't comply, they'll face corresponding action. Cutts wrote, "Google -- and other search engines -- do take action which can include demoting sites that sell links that pass PageRank, for example."

We covered the entire ethical debate in our recent BusinessWeek column and can only say, well, Google has voted. If bloggers continue to let their opinions be sold -- even while disclosing the brands who pay them for their supposedly unbiased thoughts -- they now risk having all their links back into the web go up in smoke.

Photo: PSD

Reality unplugged

Nice spot reminding you to save electricity and the environment. The stop-motion here has the vibe of an amateur YouTube video. Interesting that as video broadcasting tools spread, our eyes are drawn to lower-quality production ... which perhaps resonates more realistically.

Via Brandflakes.

Behavioral targeting grows by slashing banner costs up to 93%

If you are looking for a customer, in the past you had to peer through a publisher's window. A marketer trying to reach upscale men interested in finance, for example, would logically place ads in The Wall Street Journal. Marque publications and web sites controlled elite, special audiences, so the ads weren't cheap.

Ah, but this model is changing, and the dark irony is web publishers may face the same threats that newspapers do today. New online tracking systems are beginning to connect the dots about everything you, as an individual, do online -- and now they can serve ads by placing cookies on your computer, following you across thousands of web sites, and forgetting about the marque publishers that used to control niche audiences. OMMA predicts that by 2012 nearly one-quarter of all U.S. display ads will use behavioral targeting.

The trend is growing complex and war-like. ValueClick, for example, is one retargeting network with more than 13,000 web sites. Clients who place an invisible pixel inside a Flash banner ad can then place that ad on a marque site -- for example, WSJ.com -- to trigger ValueClick retargeting. When a consumer visits WSJ.com, they may not click on the banner ad, but the ad puts tracking onto that consumer's computer -- and then a series of subsequent ads can "chase" that individual consumer every time they enter the broader ValueClick network of other web sites.

Whoops, WSJ. The retargeted ads cost less.

This is delightful for advertisers because the retargeted impressions cost only a fraction of the original, expensive, marque site ad. Consider that some WSJ.com banner ads cost $60 or more for each 1,000 ad impressions; ValueClick's retargeting costs less than $4 per 1,000 impressions against the same audience. If you are an advertiser, you just figured out how to reduce your costs by 93 percent. But how does The Wall Street Journal feel about an outside force identifying, and in a sense, lifting away its precious readers?

We're researching these new trends, and how major online publishers might defend themselves, for a future national news column. If you have your own ideas, please share. The cost savings are obvious; the strain this will put on broader online publishing and ad revenue models is far more complex.

Photo: Simon Pais-Thomas

Clear view on the world economy

The obfuscation psychologically inherent in refuting unorthodox intricacies in socio-political economic stimuli in light of irrationally post-exuberant apocalyptic traumatic stress disorder caused by hyper-leveraged real-estate-based investment assets repackaged by quants for financial engineering creates cognitively dissonant worldview models for macro discussion yet individual morally enlightened paradigm shifts in spiritually refined consumer consumption behavior.

Meaning it's time for a stiff drink.

An open letter to Forrester about payperpost ethics

Sean,

I am disappointed that Forrester would condone paid posts as a legitimate marketing model. Bloggers lose out as they erode their *authenticity* and brands lose consumers' *trust* -- two important aspects that make this type of program a failure.

Paying someone to blog about a product is a disturbing low point in human ethics, because it manipulates a system to artificially elevate a topic where it does not belong, inside human opinions. It is damaging because the readers cannot judge where the message is coming from, or whether it is true or false.

Sean, let's imagine Gartner gives you a $500 gift card if only you say in your next upper management meeting, "Hey guys, speaking of our research, have you seen what Gartner is doing lately?" You might be free to voice your own opinion, and say with transparency that the mention was paid, but you are still inserting a brand into a conversation where it has no bearing. People in the meeting would wonder if your opinion were real. Your authenticity would be eroded and Gartner would look a bit the fool. Do this enough and no one will listen to you in meetings.

And that's the real point. These gimmicks will eventually erode the value of bloggers' individual voices and the brands they shill.

I'm certain this trend will continue, crest, and then fade as the pollution among real social media conversations creates the inevitable backlash. See telemarketing and email spam for two recent examples of other networks where overly aggressive intrusions failed due to consumer discontent.

As for the bloggers who consider it: If you don't see the ethical problem of selling your own opinion, then perhaps you don't place much value on your own voice. Keep it up, and your readers will agree.

(Reprinted from our comments on Forrester's blog.)

Photo: Imfreelykeely

iPhone now runs Amazon Kindle

Wayne Schulz over at Gear Diary notes the Amazon Kindle ebook reader is now available as a free iPhone app. We've been critical of the Kindle in the past for its fuzzy sales numbers (Amazon claims success but does not release sales data) and for what seemed a 1990s' portal attempt to tether content to a single device. The new move is brilliant for Amazon because it opens the playing field to millions of iPhone users -- and we expect, soon anyone with a smart phone. Amazon still pushes the hardware Kindle as an optimal device by limiting some if its downloading features, such as subscribing to magazines or newspapers, on the phone.

Amazon's new open platform signals one more nail in the coffin of traditional hardcopy publishing. By 2020 most consumers are expected to use mobile phones to access the web, and if they can pull all books (or soon magazines and newspapers) onto glass screens, wood pulp will go away. This will be driven by both technology and our human greed. Last weekend an online friend recommended a finance book on an issue we were debating via Twitter, so we logged in to Amazon, ordered the book, and felt a lustful twinge of irritation that we'd have to wait several days to get the material in the mail. The web has spoiled us. We want knowledge instantly.

So we're going to download the Kindle app right now -- instant gratification is the future, even if it drains the phone battery.

University teaches nonprofits a secret: How to get $120,000 in free Google advertising.

Google offers up to $120,000 in free annual advertising to qualifying nonprofit organizations. Surprised? So are most nonprofits, who often don't know about the program -- which requires filling out a simple AdWords grant application -- and even when they do, they stumble. Do nonprofits spend the funds promoting their mission? Chasing individual donations? Courting corporate sponsorships? And how do they manage the nuances of bidding on thousands of potential Google search phrases?

A poorly thought-out campaign is a sad thing because if a nonprofit doesn't get enough Google clicks, it will miss some of the $10,000 per month in free funding.

Eastern Michigan University professor Bud Gibson is bridging this nonprofit knowledge gap with a unique college course. "The idea," Bud says, "is to train students in running Google campaigns while the students also help nonprofits." The EMU course instructs students over 14 weeks in managing real-world Google campaigns for nonprofits such as the National Kidney Foundation who have qualified for Google AdWords grants. Students are graded on a 1,000-point system, with 30% of the score tied to their writing five blog posts per week on successes or failures. A strong focus is put on A/B comparisons, with the motto "Always Be Testing."

The landing page hang-up

The program has been rocking, with a catch. In the first winter 2008 session students produced nearly 3.8 million ad impressions and 85,000 clicks -- or web site visitors -- for nonprofits. But Bud's students discovered a key obstacle: the lack of a well-designed landing page to speak to the different audiences and convert them to donors or participants. The students built new landing pages, but nonprofits "did not internally possess the skill to put the pages on the web," Bud notes. Bud met with Google personnel to brainstorm a second course offering that would again have students work with nonprofits, but deeper into the web conversion funnel, installing tracking code on landing pages, running A/B testing for different landing page designs, and establishing a series of benchmarks for nonprofit performance.

So what should students learn to help organizations improve landing pages? Bud asked our agency for some ideas. We suggest:

- First, segmenting nonprofit targets to different demographics. This should guide every step of the online lead funnel (and multiple funnels can be set up). What is the demographic target? What drives their behavior? How should every step in the online flow meet their needs?
- Matching nonprofit services to each demographic. Most nonprofits have a range of services, from support groups to seminars to triathlons to awards ceremonies; which dovetail with the demo target?
- Matching nonprofit "offers" to each demographic. Offers can include information (whitepapers), savings (tax write-offs), altruism, competitions, and price framing. In direct marketing the "offer" accounts for at least 40% of the response. Nonprofit ad copy and corresponding landing pages should be specific about the offer that drives the desired action.
- Matching content all the way through each lead process (keyword term matched to ad copy matched to promotional copy on landing page).
- Matching Google campaign content to other nonprofit marketing messages. What's going on offline? How should the SEM campaign support, and catch inquiries, from other advertising or public relations messages in the marketplace?
- Testing different contact structural options (phone, email, contact submission lead form, click to call). Banks, for example, are a low-interest consumer category that often use "click to call" systems to rapidly get web visitors on the phone with a service rep. This type of system might be beneficial for nonprofits trying to land large corporate donors. What is the range of response systems, and how can each be tested?
- Testing different contact design options (placement on page, size, animation).
- Testing landing page offers against each demo and keyword group.
- Developing a data dictionary (what data fields will be collected from site visitors, and how are fields prioritized?).
- Testing different quantities of data to be collected in lead forms. This is a potential minefield in achieving success, since organizations often want far too much data, and too many fields turn off web visitors. Hillary Clinton and Barack Obama boiled their own web lead forms down to four data elements in the past presidential campaign, a sign that professional internet strategists know that less is more.
- Installing unique 800 numbers on landing pages. Typically 50% or more of responses from web campaigns come in via the telephone; calls should be tracked with the same isolation as every other ad component.
- Setting up measurement systems to assess call data. The three-digit prefix of inbound phone numbers can be matched to ZIP Codes for heatmapping of market demand, for example.
- Defining systems to collect and maintain data gathered through the web site. Where does the data go? Will it fit into a prospect database? Nonprofits that invest money or time in collecting information should safeguard it like any other valuable asset.
- Defining the operational follow-up procedures -- a key area where organizations often falter, by not responding to inbound inquiries in a timely manner. Leads do no good if you take no action.

Bud, those are all the thoughts we can muster. If anyone else has ideas, please comment below, or learn more about EMU here and here.

Skittles gives up site for 1% of all Tweets

The idea was sweet but not sticky. The little colored candy Skittles launched a new home page today in which the regular site turned into a Twitter page, filled with all the references from the social network related to, you bet, Skittles. Tens of thousands of Twitter users began tweeting each other, "hey, did you see the Skittles' site?" And then their very text messages floated to the top of the "Skittles" web page. By early morning 0.9% of every 100,000 messages on Twitter included a mention of the candy.

Ah, but look at the downslope on the chart above -- faster than a sugar crash, the mentions began declining. Which makes us wonder if all this SEO link-baiting on the internet echo chamber, in which new schemes emerge to tempt people to talk about or link to a product, are really sustainable. Hershey's, we love you, but this game has now been played.

Update: MediaPost has the Skittles backstory here.

Update 2: We checked back on Day 2, and yes, Skittles' tweets had a sugar crash...


But as Dirk Singer notes, even 1 percent of a large number is a very large number. David Armano also shares a deep dive on the entire interactive strategy.