The coolest you'll look pooping in your pants

We usually don't go for this cool-hunting Brandflakes kind of post, but it's Friday before a three-day weekend, people. If you're expecting psychological analysis of how this spot targets women in their 30s with kids, rebounding from recession now aspiring to luxurious spending, or the two-pronged demo approach of starting the spot with a beauty shot of two female models to lock dads in their seats as well, or even the juxtaposition of Maslow's top hierarchy of self-actualization via parental love vs. base bodily function needs ... forget it.

Enjoy, and this weekend try to dress with some chic.

Get me one of those viral things that lasts 6 days

Analytics shop TubeMogul points out the half-life of a YouTube video is now only 6 days, meaning in less than a week an online flick has burned through half its potential audience. After 20 days, any given video has pulled 75% of its total eyeballs. This isn't great news for creative agencies focused on selling viral potential -- and points out consumers' ADHD is accelerating, since back in 2008 a YouTube audience lasted at least twice as long.

Don't fret, though, viral promoters -- newsprint and radio ain't doing so hot, either.

Via Business Insider.

Why do CPMs still exist?

We've been critical of Razorfish reports in the past and so must tip our hat to that digital team for its insightful Razorfish Outlook Report 2010 -- which not only lucidly addresses major trends in online marketing, such as the rise of ad exchanges, but also offers a candid peek inside Razorfish's own business.

One curiosity in the report, however, comes in the section where Razorfish discusses the impact of the 2009 recession on client media spending. Their clients, similar to yours if you work in the ad business, made the expected moves: shifting ad spend to direct-response channels, using discounting in messaging, moving more funds to paid search. Yet the big surprise was 48% of online ad spending was still placed on a CPM model -- the type of buy where you pay for impressions no matter who clicks on or responds to the ad.

CPMs stand for "cost per thousand impressions" and are one of the great artifices of the ad industry. They are fiction, you see, because most "impressions" don't really reach consumer retinas at all. In newspapers, readers do not scan every ad on every page; on television, the average U.S. household has access to 130.1 channels but tunes in to only 17.8. The rise of tighter measurement tools in radio known as portable people meters exposed the fact that consumers often turn the dial when :30 second radio spots come on -- news so bad that Arbitron, the radio ratings service, launched a PR campaign to try to convince ad agencies that fewer impressions were a better value! The vast majority of ads run in any media are never seen. CPMs, in other words, are a currency used to place a value on a media audience -- and just as a paper dollar has little to do with real gold, you should never confuse an impression estimate with an actual frontal lobe synapse firing.

On the web, pay no attention to measurement?

CPMs in the Internet arena are no different. One has to wonder, in the year 2010 when we can conceivably tag every computer browser and track responses in the forms of CPCs, CTRs, CPAs, conversions, even cost per sale, why nearly half of all online ad buys are still pushed through the weak CPM pricing system. This is no knock on Razorfish; our clients do the same thing, since the online marketplace demands it. The truth is there is huge resistance inside the industry by publishers, who aggressively (and fearfully) defend impression-based pricing structures which pull revenue no matter what the result. Online pricing schemes remain the Wild West of media -- it is possible to spend $60 CPM to reach an elite audience at WSJ.com, or $17 CPM if you negotiate shrewdly, or $6 if you are clever enough to lift the audience and chance them with retargeting. Ad networks can drive down costs even further to below $1 CPMs, and buys using the cost-per-click model remove potentially all waste in the top of the funnel. So what does it cost to reach 1,000 wealthy consumers online? A buck or 60 dollars, take your pick.

Yet CPMs persist. They are in fact a necessary defense for all content publishers, as the inventory of communication channels rises to infinity and switching costs fall to zero. The only way to make a margin with any material is to build in waste, and fight to keep that frictional source of profits. To paraphrase John Wanamaker, half the money you spend on advertising is wasted, and publishers really, really want to keep it that way.

Nike and your Lady Gaga meme future

Darryl Ohrt calls this new Nike spot epic, but we think it's more -- an explanation of how individual memes have taken over pop culture.

A meme (pronounced to rhyme with "gene") is a cultural idea or practice that, once seeded, can spread until almost everyone has adopted it. The Nike soccer players flash through victories and defeats, each result cascading into a future of fortune or disaster. In reality, memes can last a long time -- blue jeans, leather jackets, women's stockings and men's short haircuts have been around for more than 50 years. The word "cool" to represent, well, cool is a meme that stuck. God, religion, political views and superstitions are foundational memes. Other cultural units have fleeting lifespans -- pop music, women's dress lengths, goatees, the use of the word "curate" to denote managing something in advertising, the "#" hashtag symbol everyone used a year ago on Twitter that now appears to be waning. We wonder if the hipster-khaki look will ever take off. And just as each soccer player's fortunes in this Nike spot are cut short by the subsequent action of another, new memes tend to push prior ideas off the cultural table.

Mutations and marketers

British scientist Richard Dawkins thought up the idea, stating memes are cultural expressions that, like genes, mutate and spread. All you need is variation (a new idea), propagation (the ability to create copies of the idea), and something called "differential fitness" (in which some ideas are better suited for an environment than another) and a meme can take off.

Advertisers are in the business of producing memes. Crispin Porter + Bogusky, the darkly funky ad shop behind psychologically dissonant campaigns such as Burger King's "King," has a core strategy of always seeking buzz behind the paid communications -- the goal of a meme replicating in society. Every "viral" campaign is a meme gone successful, if only for a fleeting moment.

But now individuals are getting in on the game. Like the soccer players in the Nike spot above, your personal future seems to hinge on whether you can send the right message about yourself to your networked peers, and have that idea scale until they erect statues of you in a public square. Lady Gaga is the best current example, and say what you will of her pop hits, you probably want to be as famous. The challenge, of course, is that in a world of limited communication inventory, the rising supply of memes and the falling demand of consumers to absorb what other people say (since they are creating their own stories) mean the value of any message has fallen. The odds of winning the meme game are shrinking because the number of slots spinning on each cultural concept wheel has multiplied. The players on the field have grown too numerous. Still, go ahead, idea-makers: kick the meme ball.

The :30 second spot ain't dead. It's Googled.

Pity the poor tube. The average U.S. home has at least four televisions -- more than the people who reside under the roof. Americans watch on average 5 hours and 9 minutes of live TV each day. And yet this big, broad, blue-light bathing glow that we can't escape is never commented on as a revolution in communications.

Stand by. Google this week hinted it was dipping its toe in the Internet-to-TV waters with Smart TV, hoping to do with big screens what its Android OS is with mobile: capture a new market. Google is partnering with Sony, Intel and Logitech to launch open-source software that streams TV shows, YouTube or home videos to the big screen in your basement. Such integrated video hasn't caught on yet because most TVs aren't built to hook into the web, and "bridge" systems such as Apple TV have limited functionality (and require too many damn wires for the average user to contemplate). That's about to change -- now, more than 1 million TV sets in the U.S. are wired for the Internet, and about 10 million are expected to be in homes by 2011.

The battle for the future of television is getting interesting. Hardware makers such as Sony and Panasonic are also pushing out 3-D televisions, partly because the ginormous files required to render 3-D can't be jammed easily through cable or Internet pipes -- you'll have to buy an expensive Sony or Panasonic box. (Bonus points: 3-D TVs work by projecting regular TV images, but simply flash the images back and forth from two alternating perspectives rapidly in sync with battery-powered glasses that shutter your left and right eyes in sequence; we've seen the illusion and it is startlingly holographic.) The irony is cable companies may get caught between two crushing forces, the ultra-high-def holographic 3-D of Avatar films and the ultra-fuzzy-low-res quality of Internet cat videos. Consumers seem drawn to the extremes; that doesn't bode well for the ratings of mediocrity in the middle.

Image: Jorge Miente

How to build the ultimate TED Talk

Data brainiac Sebastian Wernicke crunched 10,000 minutes of TED videos and 1.3 million words from their transcripts to figure out how to give the ultimate conference speech. Wear glasses. Don't mention girls on airplanes. Etcetera etcetera.

Via Branislav Peric.

He got his dream job using Google for $6

We first heard about this from Bruce Henderson, group creative director and senior partner at Ogilvy New York, who couldn't stop laughing at the genius of a man tapping the egocentricism of the ad industry. But hey, it's not like you've never Googled yourself either, right?

We'll take whatever she is wearing

Play me.

So say you're surfing the web and see a jacket that looks cool. Could be on anyone -- a Facebook friend's photo, a model over at Esquire.com, a CNN photo of a prime minister. Westfield's "fashion detector" lets you match the clothing image to any similar brands at its nearest mall location. Not enough? The app works on your iPhone, too, so you can surreptitiously snap photos of attractive lasses walking down the street to find the same short skirt for your wife. Or something like that.

Clever use of image matching and applications to drive impulse purchases. Well played, Westfield.

Via Ads of the World.

Facebook and self-filtering under the bedroom sheets

Tonight when you're lying in bed with your lover/puppy dog/teddy bear and something truly intimate slips out of your mouth, say, "When I was a child I dreamed of changing the world and now that I'm making money sometimes I wonder if I'm missing the real opportunity to help others," ask: Would you want that whisper broadcast on television during the Super Bowl?

Of course not. This is called media self-filtering, or the age-old habit of humans using different communication tools in different ways. This week we spoke at the Direct Marketing Association on how filtering is creating new challenges for advertisers, however, as more devices and portals give us greater self-filtering controls.

What is self-filtering? The graphic above shows how a typical consumer (me) "tiers" media from the most public space (mass media such as television or movies) to the most personal (under the bedroom sheets). Facebook is more intimate for me than Twitter, and Twitter is more intimate than email, and email more closed than the telephone. For each tool, I set up controls in terms of whom I connect with, who can access the stream, what I share inside it and what I choose to receive. You, and everyone else, does exactly the same.

War of the filters

All of which creates a pinch for marketers, because the inventory for their messages or advertising gets squeezed out with every additional filter layer. Consumers are demanding more self-filtering control even as some media outlets seek to take filters off, creating huge pressure on businesses pushing memes in the middle. This week YouTube tipped its hat to consumer privacy concerns by launching new "unlisted" video controls, where users can post films and no one else can see them unless they have the direct URL link. Most media networks, though, have been moving in the opposite direction. Facebook has gradually made openness its default setting -- attracting the wrath of Congress, privacy experts and analysts such as Jason Calacanis. Matt McKeon, a developer at IBM Research's Center for Social Software, has created a beautiful infographic of Facebook's expanding openness / eroding privacy defaults over the past few years.

Here's Facebook privacy back in 2005:


And here's what Facebook defaults to in 2010:


Is this good or bad, beautiful or ugly? A Metcalfe student would suggest Facebook, like other networks such as Twitter, LinkedIn, Vimeo and your cell phone company with those deals to call friends for free, are opening their node connections to try to (a) increase the utility of the network for users while (b) collecting more data to support advertisers. Calacanis in his critique suggests publishers are nuts to plug in to Facebook Connect, which bases the personalization of YourSite.com on the preferences monitored by Facebook. "If you’re stupid enough to give up your customer database to Facebook, (Mark Zuckerberg) will pay you back by screwing over your user’s privacy!," Calacanis shouts.

That is one harsh viewpoint. The alternative reality is simpler: Social networks, like businesses, are doing what corporate entities have always done -- recognizing that customers are their most important asset and working hard to expand the data they can collect and manage on that asset. We suggested in our DMA speech that if Charlene Li is right, and social media does someday become like air, the connected nodes of humanity will form an aggregate data set more valuable than the current financial information that provides FICO scores or product-purchase observations that build mailing lists. Someone, somewhere will find a way to aggregate this information and use it for marketing purposes, because a society based on pleasure from consumption has a demand for better, more personalized products and services. It will be a bumpy road to get there, because just as consumers long for shiny objects, they fear outsiders peering into their souls. We want leather jackets but hate to measure our waists. The good news is now you can record your fears on film and post it quietly and privately to YouTube; just be careful about mentioning it in your Facebook News Feed.

Via Make the Logo Bigger, @darrylohrt, and a homework assignment from The Beancast.

Facebook's $0.001 business model

"Facebook Just Blew Away the Competition in Display Ads!" bellows Business Insider. Yes! Ah, hyperbole and the agents of change who follow it. You'd think Facebook is crushing Yahoo and Google with ad revenue from that headline, right?

Um, no. Here's a calculus secret -- and we know you flunked math in high school which is why you went into advertising, so we'll type slowly here -- advertising impressions don't exist. Impressions are really a currency by which media planners judge options on where to place ad investments. Take Facebook. Social media site users refresh their streams constantly; unlike a reader pouring over NYTimes.com, an FB newsfeeder is clicking again and again, looking for the latest old girlfriends or Bejeweled update. Silicon Alley Insider suggests Facebook has a run rate of 720 billion display ad impressions a year, which works out to 1,800 per user. If you're a heavy Facebook user, one of the top 10% who really check the site, given a 10-to-1 skew in usage (math, sorry) you may receive 18,000 display ads pitched at you annually.

How many of those Facebook display ads do you recall?

Can you name five?

Three?

Right-O. In our agency's client work, Facebook ads can perform brilliantly if purchased on a cost per click basis -- meaning you only pay if someone sees the ad, likes it and clicks through to learn more -- but fail miserably when evaluated on impressions. Click-through rates, a good apples-to-apples proxy indicator of whether users are interested in an ad offer, average 0.02% on Facebook vs. the 0.08% average of banner ads in the U.S. Do the math (sorry, sore point) and Facebook users are one-quarter as likely to actually see the banner image in the back of their retina vs. those other colorful boxes at the top of NYTimes.com. Or, (more math) Silicon Alley Insider estimates Facebook made $700 million back in 2009, about $2 per user at the time. Given 720 billion annual display "impressions," that equals (yes, math, but wait for it!) $0.001 revenue per ad served.

Facebook advertising, WOOT!

We know. OK. Can you name just one Facebook display ad?

Google: Oh won't you stay just a little bit loooonger

Web strategists are scratching their heads over why Google would risk redesigning its $23 billion search results baby, adding complex features such as subcategories and real time results.

We say it's simple: The more complexity, the more likely consumers are to linger, the more likely they are to click on a "sponsored link" ad, the more likely Google is to make more revenue. It's an inventory play, giving Google more shots at you as you rush through its doors looking for vacation deals, similar to weather web sites that force you to click through four pages to find a local forecast. More page options equal more ad potential.

Let's do the math:

> Assume 10% of Google's 268 million daily users decide to click on one more search results page before rushing off
> Assume also the odds remain the same on a second page that users click on a search ad
> Google gets a 10% lift in ad clicks.

Hmm. What's 10% on $23 billion?

The risk, of course, is by adding complexity Google diminishes its utility which pushes consumers away. But similar redesigns, such as Microsoft's Bing, have gained traction by making the act of finding stuff nuanced. And we bet Google has a fancy math formula somewhere predicting risk vs. reward.

Uberdesigner Jakob Nielsen told BusinessWeek, "People don't want to use a search engine. They want to get away from a search engine." Exactly, Jakob: Now it's harder to run away.

I'm a 115-year-old woman from Venice Beach

Ah, grumpy consumers. Someone has started a group on Facebook that protests its data collection. To play, you update your profile to explain you are a woman born in 1895, now residing in Venice Beach, California -- so you can thwart those evil marketers snatching your information to serve you ads.

Which makes us wonder, why are consumers so bent out of shape about online marketing while everything they do in the real world is tracked by Experian data giants for use in mailing lists? We're working on a BusinessWeek column that pushes on this issue a bit. We suggest it's actually beneficial when your data is seen, since you are more likely to get product offers that are personalized to your interests. Maybe you don't buy things, have just the clothes you need, and own an empty attic and garage. If so, feel free to become a 115-year-old woman who lives in Venice Beach, California.

The customer is not always right. $481M says so.

Everyone hates baggage fees. It's a crime airlines don't listen and let you stow aboard luggage for free, as much as you want, right?

Well ...

In case you missed it, the airline industry is a tough business. One of the few bright spots helping them stay afloat in the 2009 recession was baggage fees, which drove $2.7 billion in extra passenger revenue to U.S. airlines. Delta came out on top with $481.8 million from such fees -- a vital solution, since at year's end Delta still bottomed with a net loss of $1.2 billion. Without the added charges, Delta's loss would have been 39% higher.

Sure, customers say they hate fees ... but imagine the alternative. If Delta didn't hide charges until you got to the airport, it would have to raise its ticket prices 2% across the board -- about $10 on a $500 flight. And you, dear savvy consumer, planning your trip at Expedia or Travelocity or Kayak.com, would likely click on the nearest Delta competitor flight to Austin to save $10 in your rapid-fire, e-commerce fueled impulse decision. Because when you're shopping, you want the best deal, brand loyalty be damned.

Run the math, and the 1-2% of customers who really take enough offense at baggage fee surcharges that they would not come back are offset by the 10-20% of air flights that Delta would lose if it had to make all its passenger fees completely visible on aggregator travel sites, a click away from lower-priced competition. Disguising fees to make front-end purchase decisions easier is nothing new: your cell phone, cable company, magazine subscriptions, and even children give you low starter costs that hide whopping fee increases later.

The customer has strong opinions, and businesses should listen. But believe us when we say again, the customer is not always right.