Final Post

This final week of blogging brings sadness with it. Previous to this, I had never blogged before, and considered it a waste of time. However, I have now embraced blogging as a wonderful outlet and release; to virtually scribe my thoughts and feelings from my head and heart onto paper so to speak. It doesn’t even matter to me if anyone is following my blog, because it is therapy for myself, even if they are assignments from my Marketing in the Era of Digital Technology class. Watch out Professor Acito, you may have unleashed a blogging machine. This week I was able to experience all the selections I had set out to in the previous post. These articles/videos/podcasts both re-affirmed my stance of advertising in today’s virtual world, but also provided many examples to disprove my beliefs.

My view towards ads is similar to the one presented in the article “Why advertising is Failing on the Internet.” Most ads are pushed upon users. Pushing a message at a potential customer when it has not been requested and when the consumer is in the midst of something else on the net, will fail as a major revenue source for most internet sites. “Forrester Research has completed studies that show that advertising and company sponsored blogs are the least-trusted source of information on products and services, while recommendations from friends and online reviews from customers are the highest”. While this may be true, Google did generate 21 Billion dollars in advertising revenue last year. Do the companies that advertise log increased sales due to these adspots on Google. Well I searched “does internet advertising increase profits” using the Google search engine. The second hit was the link for “Why advertising is Failing on the Internet” and none of the other links on the main page show any evidence that internet advertising has a direct correlation to increased profits. Therefore, I still am not sold that internet advertising actually translates into profits and sales that offset the advertising costs.

Before reading the “Secret of Googlenomics”, I never realized that Google sells their adds via a high speed auction , aka adwords. . However, and this may sound silly, but I never really noticed that Google had ads that accompanied searches. The article stated that ads are located on the right side as “sponsored links”. So I did a search and of course, sponsored links popped up to the right side with ads. These links were text based and non obtrusive, the original intention of the Google founders, “Page and Brin also believed that ads should be useful and welcome—not annoying intrusions”. However, they are so non-intrusive, I didn’t even know they existed until now, and I consider myself very internet savy There must to be some way to create websites that do other services than provide free access to content, some of it proprietary, some of it licensed, and some of it stolen, and funded by advertising.

Another interesting item to note is that I copied and pasted a quote from the “Why advertising is Failing on the Internet” article and the following was also pasted below -

Read more: http://techcrunch.com/2009/03/22/why-advertising-is-failing-on-the-internet/#ixzz0pITTKv26

I’ve never seen that before. That is genius, almost better than advertising. I researched to see if there was any information about this on the internet but I couldn’t find any. I’m not sure if this is a feature I turned on from my internet explorer.computer, or if it is embedded in the code of the html.

Final Week

This week’s topic is central to one of the main issues I have been discussing in my posts all semester. This issue is how advertisement and promotion are the main drivers of revenue for many of the “over valued” sites/businesses online. Such examples are Google and Facebook. Yes, these sites have developed niche services that do earn them revenue and are vast resources of collective information that will eventually be useful, but they will admit that their only major source of revenue currently is derived from ads. Therefore, I am very interested in reading the article on “Why advertising is failing on the internet” and “Advertisers Face Hurdles on Social Networking Site”. Also, I have always been intrigued by the site Second Life. Recently, I had watched a True Life episode on MTV about a musician who was afraid to perform in public and alternatively held concerts on Second Life to avoid her stage fright issues. However, she had almost 1,000 second life users attend her virtual concert, many more than what she would have received for a non-virtual concert.

Here are the selections I intend to cover throughout this final week.

Secret of Googlenomics: Data-Fueled Recipe Brews Profitability
Camtasia: Advertising in Video Games
Chapter 4: "Promotion within Your Community," in Now Is Gone, pp. 89-115
Why advertising is failing on the internet
Article: "Advertisers Face Hurdles on Social Networking Site
Podcast: Marketing and Second Life Part 1
Podcast: Marketing and Second Life Part 2

Week 6 - Data

This week, I was able to enjoy all the articles I intended to look at outlined in my previous post. First, I obtained a headache from simply reading about all the terabytes of data points that are collected by web analytics and research tools. I always overly simplified how easy it was to extract user’s movements on the web and convert that data into useable marketing information. However, this perception of ignorance was validated by the 10/90 rule presented in the “Critical Components of a Successful Web Analytics Strategy” article. I don’t think it is unreasonable to pay 100,000 thousand dollars for a web analytics vendor, but holding to the 10/90 rule (which is just an estimation), you would need to pay 1 million dollars to have a team to extract value from that information. For large companies like Amazon or Ebay, they have the capital to make that investment. Smaller companies or startups may not, and therefore might be losing valuable pieces of information since they aren’t able to convert user web use to profitable results.

Also, I always thought of Google as a power house search engine with most of their revenue generated from advertisements. Well now I can understand why their advertising space is just so valuable. As noted in “the Numerati”, Google is the Marquee company, it is built almost entirely upon math, and it’s very purpose is to help us hunt down data.

The challenge will be to build intelligent software that can analyze user data inputs and target value back to the users. I think there are two approaches to this, passive and active. I see much of the passive approach today. This would be advertisements targeted to you concerning items/services you may have already searched or purchased. If you recently searched for or bought a TV online, and then get advertisements online about Samsung TVs, then this is the passive approach. You may have already purchased a TV, and the ad has not reached you in time. Next, is the active approach. These are ads that try to predict your next step, before you have even thought of it. An example of this is the movie to car rental relationship discussed in the Numerati (I am having a hard time believing there is a connection between these tw)o. More often, there are logical connections that can be made. The best one I have thought of is the relationship status on social media sites (facebook, myspace, ect). When someone changes this status from relationship to engaged, this info should be an instant red flag to analyzers. If it were me, I would display copious wedding advertisements to this user. Before he/she even knew that one needed save the date invitations for a wedding, an ad would appear on their screen for this, and out of ignorance, they would click on this ad, and subsequently purchasing these invitations. This is one example that I would use data and web metrics from the internet, and be able to convert this data into value for the user and business.

Week 6 - Right up my alley

I’m very interested in this week’s articles. While marketing does intrigue me, my background is rooted in electrical engineering, math, and statistics, so this allows me to finally apply my understanding of those subjects to this week’s topic of web metrics and marketing research.

This week, I intend to review the following materials -
-Introduction," in The Numerati.
-Brief History of the Internet
-Chapter 4: "Critical Components of a Successful Web Analytics Strategy
-Kimberly Clark and Virtual Reality Simulations

Unanswered Questions

After watching the must anticipating video,” How will twitter make money”, I am still left with a lot of questions and little answers. The CEO of Twitter, Evan Williams, did not have a solution for this. He stated that most of Twitter’s resources (97%) were being directed at improving the site and business, and not focused on deriving profits from the Twitter service. He did recognize that branding through Twitter is very desirable and many companies want solutions for this, and this is a possible way to extract some of the value Twitter provides. However, Evan’s thought as the site develops is that profits will come in time. First, I disagree with this approach. Not having a model for future profit growth is a horrible business practice. Just believing that the company with make money in the future because people like the service is tantamount to disaster. Personally, I don’t think social media sites will ever make that much money. As far as income, advertising will be there only revenue stream. Yes, if the site is large enough with enough followers, than this should allow for some major marketing potential. So is the company going to charge businesses to have access to their virtual database. Why would a company pay when they can sign up for free and twitter questions like “would you pay for $2.50 for a Big Mac”. If they charge all users, then no one would be a follower of the site. Additionally, the barriers to entry for social media sites are very low. Anyone with some programming expertise and a few resources can start up the next Twitter. This is why in my opinion, only business models like the “Brokerage Model” or the “Merchant Model” will be the ones that thrive financially as outlined in “Business Models on the Web”. The best performers are sites that fall into these models. Some examples are Ebay, Amazon, and Netflix. These sites actually offer value to the customer that can be extracted by the company as opposed to Twitter. The only way for Twitter to become profitable is to build up a social database that can never be destroyed. However, looking at the recent

How will Twitter make money - Week 4

One of the media selections for this week has really peaked my interest. That selection is “Will Twitter Ever Make Money”. This is a topic I have wondered. How does one extract value from the benefits that Twitter or other social media, search engines, ect sites provide. Since this week’s topic is Business Models and the New Era of Competition, I would really like to focus on which business models are best for extracting monetary gains from the internet, and how do sites like twitter plan on monetizing their product.

This week, I will be reviewing the following selections -

Business Models on the Web
Gil and Frank Discuss Business Models
Video: Will Twitter Ever Make Money? Twitter CEO Evan Williams Responds
Article: "The Economics of Giving it Away," The Wall Street Journal
A taxonomy of internet commerce (2006)
5 business models for social media startups (2009)

Social Media Evolution

After reading Chapter 1: "The Origins of Social Media," in The New Influencers, pp. 1-14, it is hard to determine if social media is a net positive or negative for companies. Such examples as AOL and Sony cited in the article are evidence of how quickly negative media can be propagated throughout the social media channels of the internet. Most often, most media published by the public via internet takes a negative form. Most people won’t sit done and take the time to blog about how great the customer service was for Dell, but if they had one poor experience, they will make sure that everyone knows about it, such as the AOL example. It is up to the individual companies to utilize social media and the internet for positive gains.

As my outlook to this week’s learning, I wanted to understand how social media can evolve into a useful tool for businesses. The way social media and marketing can be taken to the next level is to market at the very early stages of inception. This is referred to as the bottom up strategy in "Making the Transition to the Social Web," in Marketing to the Social Web,. If a company has 1 million followers, they can pose the question, “would you purchase this new product”, and obtain real time feedback. This benefit could potentially save companies millions of dollars and avoid wasted time developing products that consumers would not be interested in.

My biggest take away is the pyramid effect social marketing can have. One person blogs about an issue, which is communicated to their 10 friends, which is then communicated to each of their 10 friends, and so on. Anyone can see how quickly this can continue to spiral. Therefore, the internet and social media is quickly becoming a vast and connected web. Companies can obviously see the power of this. Compared to television or radio, where you may only reach a few million people spending millions of dollars, social media can allow companies to reach billions of people, and more shockingly, do it with such ease and at low costs.