Clever Blog

The "Ad bubble" ?!

Fascinating article in the WSJ on Tuesday regarding the focus on Ads into most Web 2.0 companies and investments.  There has obviously been a significant focus on the Ad space over the last few years (post-bubble), primarily driven by Google’s amazing ability to monetize their search capabilities through the Ads on their results pages. 

When a company like Google becomes wildly successful people intuitively follow. So, with that leader firmly in place many have followed.  But we are suddenly back to a place where “traffic” and “page views” (previously known as “eyeballs”) are seemingly all that matter. 

Consumer interactions with online Ads are known to be fairly limited (in terms of click-through rates) and yet Online advertising is one of the fastest growing industries on the globe.   But if consumers aren’t interacting with them then how is this industry growing so quickly?  The simple answer is because the value doesn’t have to be a consumers interaction with the Ad, but rather the consumer simply needs to see the Ad, hence us being back to “eyeballs”. Google just announced their Ad strategy within YouTube – they will charge $20 per 1,000 impressions as the Ads roll across the bottom of the video screen for 10-15 seconds at the beginning of the Ad; again, no interaction, except that the viewer can rid the Ad fairly easily.

Google brings up another interesting question.  How is the Ad industry going to shake out?  Right now, Google, Yahoo and Microsoft are the clear leaders in the market. With recent acquisitions by all three of these companies (i.e. aQuantive and Double Click) they now own much of the ‘network’ (publishers and advertisers) and the inventory.  And yet, every day there is a new “Ad company” that gets funded – how these all survive is another story entirely.

Interestingly, just prior to this article, I have had two conversations regarding the “Ad bubble”. The first time I heard that term was from a well-respected VC who said that he doesn’t have any idea how this “bubble” continues, nor how so many companies can build their Web 2.0/eCommerce/Service businesses can survive, let alone thrive, on the Ad model.  I don’t disagree.   

It’s going to be interesting to see how this all plays out. The last “bubble” was ugly, to say the least. I don’t believe the “Ad bubble” will be anything close to the bubble that we saw a few years ago, but it’s something to watch...closely.

Summer travel summed up perfectly...

Auren Hoffman sums up my travel this summer (and yesterday specifically, when i spent time in the Seattle, Denver, Chicago and La Guardia airports, although i was suppose to end up in Newark) here.

The (in)convenience of Online Shopping

Sometimes it takes a child to really 'tell it like it is'.  Here's an example of that:

Last weekend I  took my two daughters, ages 3 and 5, "shopping"...on Target.com. They loved it - sitting at the table on a Sunday morning, in their PJ's, eating their cereal, and looking at page after page of great products.  Finally they settled on their first purchases; they each got to buy a wall clock, a clock radio and, of course, a new Hello Kitty garbage can (anyone with kids can appreciate why they got exactly the same things!). 

So, we added the six items to our shopping cart, when through the checkout process and then, with three fingers on the mouse button we hit "Enter" and completed our order.  I said "ok, we're done" to which my 3 year old replied, "that's great, now where's my stuff"....

....it arrived FIVE days later.

I suppose Online shopping doesn't have quite the same satisfaction level....at least for the 'younger generation'

AlwaysOn Summit

I presented at the Always On Summit last week at Stanford University (by the way, i have no idea how anybody ever graduates from that school - including my wife - the campus, the weather, the surrounding area makes you want to do anything but study!).

It was a great conference and I was lucky to be one of the presenters at the CEO Showcase.  There were a few blog postings about it, including one from Rafe Needleman, who is one of my favorite bloggers.  It's interesting to look at the past companies/presenters and see their successes, including the CEOs of Google, Skype, Sun Microsystems and Salesforce.com - here's hoping my presentation brings us some of the same karma.

Some airlines really are starting to 'get it'...

One of the benefits of traveling a bunch is that once in a while you get upgraded. Today, United upgraded me on my DC to Seattle flight and, after a long weather-related delay, we are at 35,000 feet. 

And now, I fee like I am sitting in a Sharper Image on a Saturday afternoon. Why you ask?   Well, I just pressed the button my console and all of a sudden I start to feel something moving in the back of my seat.  United airlines has a business class seat with a massage roll in the backrest. I am amazed. I am stunned. Fabulous!

Thoughts from the eTail Conference

On a flight home from DC after a great eTail Conference. Its always enjoyable and productive to spend time with and around our customers, and our competitors for that matter. The (online) retail industry, while massive in terms of dollars is actually a fairly small, tight-knit and fun community.  Over the past three days I have heard stories of tremendous growth, struggles, opportunities won (and lost) and plans for the next 6, 12, 24 and even 60 months.  With an industry moving at warp speed it was amazing to hear of one companies FIVE year plan.

I had an opportunity to sit on a panel at Personalization Day and talk about the here and now of “personalization”.  I was thankful that much of the day, let alone the panel, was focused on Recommendations and particularly how CleverSet is changing the way in which retailers can personalize the Recommendations on their site to dynamically adapt to each customer on a click-by-click basis.  I made the claim that “segmentation” and “behavioral targeting” are good first steps on the path to true personalization but that they didn’t get a retailer to where they should want to end up. I had four retailers tell me that the statement rang true to them (which was nice to hear!).

One of our customers, Glenn Edelman, Director Online Marketing and Merchandising at Wine Enthusiast participated in the panel discussion and then presented a 30 minute case study on personalization and in particular their implementation and outstanding results they have had while utilizing CleverSet. Thanks Glenn – you’re not only a customer but also a good friend of CleverSet’s

I also had a chance to spend some time with a great Canadian retailer, Penny Gniwisch, Founder and EVP Marketing at Ice.com.  I won’t share most of the stories or conversation but let’s just say that I felt like I had met a kindred spirit and that I have not drank my last beer with “the Rabbi”.  We came up with a unique promotion for the Shop.org Annual Summit in Vegas in September

Some other notes from the past few days:

Retailers are struggling with priorities and how to make choices on which technologies/strategies to employ, regarding personalization and other opportunities.
Many vendors make very similar claims which muddies the waters even more for the retail community.
I saw more VCs at this conference than any in the past 15 years – means something interesting is happening in the space.
Retailers really want to engage third parties to assist them but get tired of being ‘pitched’ to all day – I can’t blame them.  There was rarely a time that I saw Tony Hsieh , CEO of Zappos, without a vendor ‘selling’ him something – felt somewhat sorry for him, but I guess you get that kind of attention with the growth trajectory that Zappos is on.
Competitors (retailers and vendors) are typically friendly with one another.
DC is REALLY hot in the summer – seriously, it was ridiculous.
The “Hinkley Hilton” (where Ronald Reagan was shot) has absolutely terrible cell phone coverage and NO wi-fi, which was frustrating.

All in all, a great week!