Life, Local and the Pursuit of Advertising; My experience growing a local online guide.

• iTunes replaced the record store for distribution of Music
• Netflix replaced Blockbuster as the distribution for Movies’s
• Amazon replaced Barnes and Noble as the distrubtion for Books
• People will pay to read content that matters to them - Micropayments or subscriptions to Online News (WSJ, NYT)
• Google is not evil, but blind love of Google will lead to evilness.

I’ve been neglecting my blog here for some time, but I had this saved as a draft and based on many of the conversations I’ve had in the past few days, I felt that this brief thought captured some good points. Content doesn’t come from Google, it comes from people. Some of those people are professional journalists, but many of them now are just regular “Joe 6-Packs.” You and me posting our thoughts, our pictures - all of us out here sharing our lives.

Regardless of where it comes from, Google doesn’t create any of it and its not claiming it does. Google is out organizing information, which is one form of content. And as we grow less mindful of where our content comes from, or even who is creating it, the medium loses its value and we simply consume content in whatever form it appears in front of us. For me, I see the web as finally having caught up and mimicked our physical world experience with word of mouth. Twitter and Facebook have taken an innate human action, word of mouth, and amplified it online. Almost none of the content I consume comes from Google (except when I am seeking specific information).

My point is that content comes from the people around us, and when we watch, listen or read something that is very interesting to us, it doesn’t often matter who made the content - we remember who told us about it, or where we found it. In todays world wide web, where we found it is rarely on Google, it is from within our social network of friends and acquaintances.

I’ve heard something about this social graph idea…

Sometimes in business you aren’t able to develop the exact tool you need to serve the market the way it wants most. There are many reasons for this and they vary from situation to situation, sometimes it is lack of resources (time, $, skill) sometime it is simply not technology feasible, etc. But regardless of the reason you aren’t able to develop and deliver the right product to market, there is no reason to think about your go to market strategy for a product the market is not demanding. Every available resource should be focused on creating a product that is wanted and needed by the customers you are aiming to serve.

Marketing, advertising, sales are all (very important) deliberate measures taken to serve your customers and make their experience with your product better, or happen at all. But that all comes back to your product, and if your head isn’t focused on execution of that product, what are you doing?

Facebook is rumored to be launching its own location based checkin service, foursquare and gowalla are getting more hype than a red sox/yankees championship game being played on the moon. Everyone is all about checking in. (But what about standing out?)

I’ve mentioned this before, but I think QR Codes should play a role in the technology of checkins. It forces a check in to be physically located in a given place, not just nearby or walking past and it adds a layer of interaction between the patron and the business.

No major revelations here, just something I have been thinking about lately amongst all this hype.

Within my business we have been talking alot about impressions, pay per action, service based contracts, all-you-can eat pricing and various other pricing models we and other players in our industry (local) are using. Its also interesting to see what the agency world is buzzing about in terms of the future of digital buying. (I think most people don’t understand the influence agencies have on the technology side of advertising, at least I didn’t until recently) Its interesting for me to look at the dicotomy between massive media buys and those media buys of the small local business. While their procurement and distribution might be similar, the methodology behind the initial purchase is entirely different. Foremost is the role that research plays in the buy, and put quite simply at one end of it there is a lot of research and at the other end there is very little.

In thinking of how to properly explain this difference, and sticking with the commodity theme that is growingly pervasive in the industry today, I want to compare a large media buyer, at the very basic level, and the average small business. Take the large brand media planner for example, this person might be working for Coca Cola and looking at a 20 million dollar digital ad budget, new technologies are allowing hyper targeting, re-targeting, behavioral targeting and real-time impression buys. In order to make sense of this world, the planner is analyzing audiences, demographics, entire neighborhoods of the web down to real time pages across the exchanges and networks they are plugged into then matching up the appropriate buys with Coca Cola’s plan. This planner wants to know who else is competing for specific buys, they want to know where users are coming from and where they will go after they view the Coca Cola ads; they want to see the entire supply chain of the impressions they are buying, from start to finish. The planner then recommends which impressions to buy, from which sites, at which times, etc. Brands can target specific individuals that fit their demographic profile for a specific campaign, and thus manage and run a very effective campaign.

Compare that to a local business with a $1000 they just cancelled from their local newspaper and want to move that budget online. Who do they talk to? They have no idea what an ad exchange even is, let alone where to find and implement a campaign in one. They might want to reach a more educated buyer than less, but they are going to rely mostly on gut, and what their local salesperson tells them is the right place for their dollar.

- Wait, a local salesperson?

Yes, dear rest of the world, local businesses want to deal with a local sales person who is an expert in their field and can give them valued advice on where to spend their money. Just as your average oil consumer doesn’t want to stress about the market fluctuations in a barrel of oil when they fill their car up, the local business just wants to get some new customers in the door, hopefully before he runs out of olive oil and with enough cash left over to replace the boiler.

When consumers go to the pump, they realize that the price of a barrel of oil correlates to the price they pay at the pump, and some weeks its more expensive than last, but generally they know they can go, fill up their tank for $30-40 and drive off. We don’t have time to calculate the cost savings of purchasing that oil at 11am rather than at 3pm as investors are loading up for tomorrows news, because frankly at the volumes most of us buy gas, the savings really isn’t significant.

Contrasting the media planner, purchasing the commodity of impressions at a vast scale and with micro targeting and specific demos in mind, executing on these buys in near real time; contrasting that media planner with the local business is fascinating. There are very few levels of size between Madison Ave/Varick St, and Main Street, USA - but a massive difference, both in scale and targeting. Commodity style impression buying is the new new, and its really intriguing, but the same way your average investor is not going to get into derivative trading or bond re-insurance, your average local media buyer isn’t going to get into the targeting, research and buying detail that is required to effectively execute commodity style buys - at least not on their own.

Yes, local businesses will figure out how to properly deal with commodity style impression purchasing and the Cost Per Action models becoming more pervasive. Yes, innovators across the world will build technology to make it easier for those small businesses to do so. But by the time the SMB’s adopt and adapt, impressions might not even be a metric. Or maybe they will. Regardless, who will always control the local ad budgets of those small businesses and ultimately the direction of their adoption? Their trusted local sales people and the brands they work for. At the end of the day self-service only platforms will not penetrate truly local businesses, feet on the street will be needed to ultimately unlock and capture the transition of local ad dollars to digital.

The sales people, and their overhead organizations will have to evolve, the businesses will demand new solutions, but as they demand new solutions they will look to experts for advice. Expert sales teams these small businesses trust. And right now, today, there exist thousands of local sales teams, many with years of brand equity invested and vested in their publications and properties. As ad dollars transition across the board away from traditional media, those properties and their local equity will in basic Darwinism adapt or die; and out of self-preservation many will adapt. Some will not, but many will.

Getting to my point that local businesses will evolve, that is inevitable, they are small and agile and represent the true grit of American capitalism. They will adapt, they will transition their ad dollars from traditional to digital, but they question remains - where and how? A second question remains - will the local media companies serving those companies adapt to the needs of their local customers, and if they do what solutions will they offer?

Many of the big publishers believe they have the solution. They do not, I have seen their solutions and they are not solutions to current problems. The biggest problem in the marketplace is that the majority of small local media companies don’t know what the solution is, or even really what the problem is. Over all in 2009 print revenues declined by about 20% +/- and digital revenues increased by about 9% +/-,  given the lower CPMs of Digital compared to print - that is not a zero sum game. Dollars are disappearing from the market entirely. And traditional media is suffering from that loss most acutely.

When those dollars come back to the market (as some have seen recently), they will not be returning to traditional media, they will be migrating to digital options, both web and mobile. And just as agencies control ad dollars for major brands, local media companies control ad dollars for pockets of local businesses. Big chunks of local media siphoned off into individual properties across the country. As local businesses demand different solutions and more digital options the local media companies that adapt and deliver new solutions will thrive. They may have to adjust their content models, but if they bring the right technologies to their customers, paired with true knowledge of their offering they will keep their customers both in business and doing business with their brand.

There are several technology companies which have developed strong local products and have had success with local sales teams. But these technology companies are not media companies - how will traditional content-to-display dollars transition to digital? As a basic consumer a more efficient PPC campaign does nothing to quench my need for a write up of local-celebrity gossip. Most importantly, as those companies are opening in new markets, they are ignoring what can often be valuable local media brands, along with the years of brand equity they have with local customers. Will local businesses receive a PPC optimizing technology better from the local salesperson they already deal with - from the brand they know and trust? Or will they prefer the new comer with the sizzle?

I believe that small businesses want to know and trust that the technology they are using is the best in the market, but that fundamentally they want to take their marketing problems and talk about them with their local salesperson. Looking to them for answers - solutions. I believe the smart media companies will adapt to their customers needs, where they will fail is the technology.

Technology that should be centralized, technology that should live in the cloud and distributed out through multiple markets, multiple sales teams. Technology that is easy to use, brought to market by the best local media brands in each market and made easier to understand by knowledgeable sales people, trusted by their customers. Coupled with a strong media property using a second decade content model, commodity based ad buys will thrive in the future.

Many local media companies will realize they need to adapt to a changing market place; adapt or die. Once they see this as fact, they will seek out technology to serve their local customers. They are experts in their local markets, in their traditional media and in sales/customer service. In true efficiency economics these adapting local media companies will seek expert solutions to their customer problems. And with success comes the desire for more solutions and that ultimately translates to more dollars flowing through local media companies.

Ad dollars flowing through traditional media companies? Yes, but those dollars will flow through the media company and into the cloud where they will be curated and optimized and from there those dollars with buy commodities - impressions, clicks, calls, etc. Ultimately those local ad dollars will originate from the local sales teams talking to local businesses on a daily basis, and over the next 3-5 years it is up to those local media companies to defend their turf. Adapt and deliver new solutions to their market, or sit by as new companies come in and drink their milkshakes.

Manhattan has become a city of iPhone users. No longer do digital cameras rule, but housewives use their iPhones to post pictures of their family on Facebook. Businessmen monitor the markets on their Bloomberg apps, and the digerati is constantly checking in on Foursquare, letting the world know where they are, and not mutually exclusive, how cool they are. Iphones are ubiquitous in the city, everyone seems to have one, and everyone who does seems to love it. Sure there are gripes about Att and 3G and battery life, but for the most part - they’re in love.

In love with what though. I myself am not an iPhone user, so while I see the appeal and emphathize with the functionality of a computer roaming around on a touch screen iPod - I don’t truly understand it. I do, but in recognition of what is quickly becoming a lifestyle choice (to iPhone or not to iPhone) - I don’t. Is it the convenience? My blackberry gets the mobile web, I have hundreds of apps on my phone, many of which are comparable to iPhone apps, my camera is excellent and I can post to Twitpic or Facebook with ease. I can upload music onto my expandable 8GB SD card, I can sync my calendar, I have great email functionality and make really clear phone calls.

I completely understand what people are so in love with, and its becoming more than love. As smartphones become more ubiquitous in society, the functionality of these devices is becoming more of a necessity than a bonus feature.  Do I really *need* to access my boarding pass on my phone and check in with that? Do I really *need* to look up driving directions on the fly? No I don’t, but if I have grown into reliance upon my smartphone, then I don’t take necessary steps to be prepared for life sans smartphone. Smartphones have become integrated into NYC society, our social habits and even our basic needs; smartphones make our lives easier and more quickly. Quickness is of course a longstanding tradition in NY.

But here I write this from Wilmington, NC on my grandmothers porch. She a cellphone for emergencies when she leaves the house, but doesn’t ever use it. I have not seen a single Blackberry or iPhone in the 5 days I have been here (I’ve seen a few sidekicks and Droids). So what is it these people don’t *need* in a smartphone? My initial thought is that this observation is simply an effect of the adoption curve. We are in a remote corner of North Carolina, a place where foreign cars are few and far between. But these people live there lives just fine - even more relaxed one might say. If someone took every iPhone and BB out of New York City overnight, people would be in chaotic states of panic. What would we do, I can’t event Twitter about my problem!

Smartphones have changed the way we live. We are reliant on them for so many of our basic needs these days and the iPhone is clearly the best in class device. As I grapple with how to pay my current bills, I really want an iPhone. You could even say I *need* one from a business perspective. (My post a few days ago about Stickybits - yeah, you need an iPhone to use the app). I’m in a conundrum, although I am facing bigger issues than should I buy and iPhone or not, this one is a doozy.

There has been a lot of buzz around mobile coupons and QR codes in the past few weeks. I wrote about 2D barcodes way back in 2008, and its nice to see a second movement in that direction Target announced a national campaign to increase mobile coupons and the use of QR codes in their print ads, Sprint followed with a similar announcement, but particularly there was the launch of a company called stickybits.

Stickybits is a new company that produces a custom 2D barcode which you can print out and place somewhere, people can then use their compatible camera phones to “attach” a message or a link to an associated page that is tied to the physical location of the Stickybit you scanned. The location based implications of this technology being adopted by businesses is very exciting.

Businesses could place stickybit codes inside their physical location and could use that to store specials and “insider-type” information about their business. They could also use the stickybit to force a “check-in” to actually take place inside their business. They could use the location of the code to prompt reward systems and loyalty programs, adding a location based and mobile aspect to their existing program.

Sure the idea that individuals could leave “stickybits” all over the place behind them as they travel, leaving notes and tips is exciting and novel. Actually pretty darn cool. But for me and my train of thought, I can’t help but see the applications of this for local businesses.

With a simple way to approach it (I will creat an account and order some stickybits and report back on the level of simplicity), local businesses can be making a valuable and big step into local mobile marketing, while reinforcing their existing loyalty programs and driving in-store foot traffic, two things that mostly signal more business. And more business is something everyone can use.

A few months ago I finished Jeff Jarvis’s book “What Would Google Do”. It was a fascinating read with much good insight into modern ways of running a business/organization. Google unquestionably runs a great business, but I think at the heart of Google, is an algorithm that returns better search results than any of its competitors. Yes they run their business efficiently as well, but their products superiority is what lead them to success, and leads them to try new things through iteration and openness.

Bijan Sabet recently posted a thought about building an excellent product as a pre requisite to monetization and it sort of summed up my thoughts from WWGD (What Would Google Do). Transforming every industry the way Google does things is sort of like saying being really good at something will make you better at it. Which is true, but doesn’t really mean anything if you aren’t good at that something to begin with.

Google is a child in the business world, it is only 12 years old and hasn’t even been public for 6 years. Of course its a behemoth with Billions of dollars in cash and revenue, it is no doubt a titan of the Internet Industry. But the internet is so young, we’ve had roughly 17 years with a web-browser, look at the automobile after 17 years of the combustion engine - it didn’t exist. Samuel Brown patented the internal combustion engine in 1823, 50 years in 1879 later Karl Benz patented the 2 cylinder engine used in the first automobile, which wasn’t invented for another 7 years. From 1886 when the first automobile was patented, it took until 1914 for an assembly line to build cars for the common man, and not until the 1940s was there a car that resembled autos as we know them today.  So looking back at the history of our modern cars, it took about 100 years from the invention of the underlying technology until it became a useful mainstream product.

Yes we are advancing at a Moore’s Law pace, and using much more powerful technology than they were, my point is advancement takes time. Google right now is at the Model-T level, it has something great that people want and use, but in another 12 years who knows what we may be doing to find information (I don’t think we’ll be using search to find content). Google will probably be powering what ever technology it is that we use in 2022, but that is IMHO solely because its initial product was so excellent that it advanced upon its competitors so far they’ll never catch up and now any new technology that is developed anywhere on the earth, Google has the power to stick its hands in it.

Building upon that great product, Google built a great company - it wasn’t born as a great company. A great product was born around which a great company was developed, and ignoring that product would be to ignore the cornerstone of any great organization: the product that it creates.

Great companies are built around great products. Build a great product and you have a chance to create a great company.

Kudos to Mr. Jarvis for bringing a lot of great lessons to light from Google’s dominance, but my biggest lesson over the past year has been to build great products and let the rest follow. Google’s success is no exception.

I’ve been spending more and more of my time looking at all the data I have surrounding my life and my business. Its interesting to see whats going on at a very granular level, and then zoom out and see the forest itself.

Its also intriguing to see how other people use data. Some people use charts and graphs to tell a story that doesn’t necessarily play out with a closer look, while others take a close look and find something you wouldn’t necessarily see on the surface of the data.

Take for instance Business Insider’s Chart of the Day , they have all sorts of interesting charts compiled from all over the web. Sometimes they are completely outrageous, sometimes they are insightful (mostly they are just charts though). What is interesting is how the headline of the Chart often varies from the data in the Chart. Take this for example:

Yes the people who don't want one doubled, but the people who do want one tripled

Yes, the percentage of people who don’t want one doubled, but the percentage of people who “would like to buy one” tripled, and the percent of people who replied “No, I’m not interested” was cut in half.

Charts are fun ways to take a snapshot of some set of data and to quickly illustrate a point. But is really interesting to see what kind of crazy stuff comes out of the data, not the parts that complement the story you are telling, but the data points you had no idea you’d find.

Look at this chart comparing the last 4 weeks of traffic on one of our sites. The chart covers the exact same days of the week, from a year ago in January. There are no significant events that would drive traffic, other than a slight spike at the end from Valentines Day searches.

Look how each day lines up, fascinating to me

Look how the trend of the days of the week follows so precisely. The first thing I saw when I looked at this chart was the fact that we are down about 7% y-o-y, but then I looked closer and saw the parallel movement across the chart. Look how the dips correlate, and the spikes match up. I’m now intrigued enough to put together a chart of all the data from all our sites and see how this matches up.

I’m not sure what to takeaway from this type of find, but if you just look at the headline, you miss the real gems.

As a preface, the guys who started Twitter are brilliant, they created a service which no one realized they wanted, and turned it into hundreds of millions of dollars of investment, and created an entire ecosystem based around sharing links, emotions, and whats happening right now. They have built a cultural phenomenon, I just don’t believe it will last, at least in its current form.

Twitter has been aggravating me of late.  It seems to be full of self-promoting and self aggrandizing on a scale never seen before. The annoying part is that almost none of the “social media experts” on Twitter are even slightly aware of their actions, and seem to be completely oblivious that their “buy from me” spewing is just a new form of spam.

Yes there are many people sharing useful information and generally contributing to the society that exists within Twitter, but they are getting fewer and farther between. What really bothers me about Twitter is not its populous, but its Soapbox promotion of these experts. That soapbox has people yelling very loud, and as PT Barnum learned, if you yell loud enough some people will listen.  See trending hashtag of the #shooturself - these people are not adding anything.

Twitter holds in itself what Twitter seems to believe to be a new version of Alexander Bell’s telephone. Only they don’t own the lines, or the devices, or even the technology that it runs on. It is just a set of protocols, basically serving as a communal text messaging platform. That observation isn’t news, but what I’m getting at here is that Twitter’s use as a business to its owners and investors is purely as a utility. If it tries to be a media company, it will fail, because it is a fad. A fad that didn’t even truly go mainstream yet, it just caught on with the people *trying* to be cool. Twitter is like the person who used to operate the local switchboard for the telephone companies, as soon as the telecoms figured out how to automate that process, those people were no longer needed. As soon as we figure out that real time sharing of information doesn’t have to all go through the same service, Twitter is toast. What I’m doing right now has nothing to do with Twitter.

There is significant value in the positive information that I garner from my daily perusing of Twitter. Links are great, and the people that I’m interested in the techworld share useful and valuable information daily. But all of that is information I could easily get from RSS feeds, friendfeed, facebook, or a multitude of other options (new services are appearing everyday - like Google Buzz). Right now Twitter holds the illusion of control over that data exchange, but in reality, Twitter is simply the latest iteration of information exchange via the web. First came email, then the http protocol, then instant messaging.  All of those are utility-type services that you can get for free and as soon as another service comes up and reveals that Twitters “control” is merely an illusion, users will shift, and along with them, Twitters value will - from ~$1 billion to zero.

Twitter is as much a business as email is a business. Making email better might be a business, and all of the great auxiliary companies built on Twitter are great businesses, but providing the protocols to send a message across the web is not a business. Well, maybe it was in 1997, but I believe we’ve moved on from that.

Sharing information that is valuable to me, is an important part of our open society, and I believe that Twitter has value, just as email and instant messaging have value - those services are still around today - and flourishing. Those services are not being monetized however, and are corollary parts tied into more extensive offerings.  Twitter has the ability to make it as a large company, but I don’t think its heading down the right path. Right now its walking down that path like its the cock of the walk, and I certainly doesn’t deserve that posture.