Friday, February 15, 2008

Ad deluge on our senses

The recent BusinessWeek article titled "Generation Myspace is Getting Fed Up" - is interesting in that it reveals certain advertisement metrics which are really pathetic and shocking.

Let me explain. The article says that social networks have some of the lowest response rates on the web, and advertisers and ad placements firms all agree on this. Well the shocking metric here is that only 0.04% of people who see their ads on social networking sites click on them compared to 0.2% on the web. How can 0.04% be an acceptable number for ROI? In fact how can even 0.2% be an acceptable number? These kind of response rates should make those who spend money on advertisements on the web do a double-take and stop to think about it. As one industry executive put it, "its really hard to make money when the click through rate is that anemic". I mean empires have been created based on these rates!?

MySpace and Facebook have supposedly recognized the issue and seem to think that increased targeted advertising will spur users to pay more attention. Let me be clear about this. I am willing to bet that any user who goes to an application as a "boredom response" will not be interested in any ads. You have to give the user products and services that actually help them and provide greater value than these unbounded desktop centric social networking sites to be able to monetize them. Just tying relevance to a search or tying relevance to a location ain't going to cut it. You will still frustrate the user because they were not interested in seeing the ad in the first place.

How exactly do the current crop of social networking sites bring value to a paying customer? The above rates are a sure sign that while there are millions of users on the sites, none of them are interested in looking at or clicking on the ads. There are some very stupid people who aren't realizing that they are losing a lot of money to display ads on a medium that only promises the huge potential of impressions, but delivers none.

The current idea of relevance as voiced by many of these companies (portals, search engines and social networking sites) is that if someone searches for something then display an advertisement based on the text entered in the search. Can you really tie relevance to that. You have to think bigger. You have to find ways to capture the real intent behind the search. The above response rate metrics prove that relevance certainly cannot be gleaned from the search "text" alone.

Innovation lies ahead, in being able to track the intent and then tie it to relevance and deliver information to the user that is of value to them.

Tuesday, February 12, 2008

Is search going to be the core function for monetization of the mobile phone

Well i find that hard to believe. Just think of the number of times that people use the mobile device to search in their daily phone use. I have one simple question. How many times do you pick up your cellphone to look for your next meal?

"Oh I am hungry, I need my phone to tell me where the nearest pizza store that offers the most competetive price/slice is." Or for that matter how many times do you use search for the most mundane things in your daily life. I will let you answer that question yourself.

Lets talk about this. People use mobile phones when they are up and about. Lets just assume that it means that about 12 hours of the day are available to look at the mobile device. That does not automatically translate to constantly staring at the mobile phone. Most people lead predictable lives, and go about their lives in a robotic fashion. They wake up, shower, get dressed, have breakfast at their favorite place (either home or the bagel store down the street), get to work, work, go to their favorite hangout after work (gym, bar or whatever), eat dinner and get back to bed. This leads me to believe that the total "search" time when most people need "search' as a way to lead them to the next step of their daily activity is all but a sliver of their total daily time.

I would argue that if you are mobile and are constantly in need of a search mechanism to lead you to the next step, then you are either constantly lost or are traveling in a new place. The former leads me to believe that you need more help than just a cellphone. If its the latter, there exists the possibility that you would "ask" someone where to eat or what place to visit. This would most likely be a colleague, a friend at the office in the new city you are visiting or someone with local tacit knowledge.

I know we need more discussion on this point, but I question if "search" is going to be the core function for monetization of the mobile phone. I think not.

Watch Rich Miner of Google on his monetization scheme, from his World Mobile Congress interview on youtube at

Monday, February 11, 2008

My Rants

I am happy to announce that I have begun to blog. Hmm, lets see what interests me. First I have to say that I have always been a technology and gadget geek for as long as I can remember.

I was one of the early adopters of TIVO (though after some persuasion by Tom Churylo who I do not consider to be a gadget geek by any means) and just recently upgraded to a HD-THX series 3 version. I must say that TIVO completely revolutionized the way we watch TV. I couldn't believe it when in my MBA days, during a marketing class we did a TIVO case study and I was the only one in the class to have one of those. Well anyway to cut a long story short I had a hard time defending my purchase of TIVO after the class discussion. Who cares, I still love it. I will convince Jomy Pidiath one of these days that it is a worthy gadget to have.

Well on to other things. I love to apply technology in meaningful ways and not in wasteful ways. For example: I have serious issues with these so called energy saver bulbs, hybrid cars (especially huge hybrid trucks) etc., and believe that short term technology bandaids only serve to cause greater harm. We'll discuss this more later and I will explain all this in more detail. This intro blog will not do justice to this issue.

I am also interested in politics. But lately I have been removed from it due to my focus on my startup which is now taking up most of my waking hours. I am all for flat-tax (single postcard method), or better yet, held at source. You know the tax system is out-dated when the government and the companies in this country have to outsource some of the tax related work. I hate the AMT. It was never ever meant for me. I have been paying it for a long time now. Since CONS@gress never ever seems to fix this issue and instead seem to adopt some bandaids, the AMT will haunt me a lot longer than it really should. On another note, you know something is wrong with the Tax system when Warren Buffet's secretary pays more taxes (% wise) than him. Well that's what he told Jane Wells a few months ago on a CNBC show. I am all for fair taxation, and a complete overhaul of this archaic and gigantic bureaucratic organization. Well more on this later. Well about this economic stimulus package with the rebate checks. If you asked me, those people who are going to get it, are promptly going to spend it on Chinese made imports at Walmart. Does that really stimulate our economy!?

Hmm. What else interests me. I love to play golf (though Tom thinks I can knock out a few people with my drives). I love to sail and I sincerely wish I could devote more (if not some) time to this. Well maybe after MOBOW, I will have all the time in the world to do so. I have also promised myself to run "a" marathon. I do love mountain/trail biking and hiking. I love photography and though I am not that good at it, I believe that i do take some good pictures (thanks mainly to the expensive cameras I purchase)

and last but not the least I love baseball. Yes, i admit I am a hard core Yankee Fan. (I routinely have these great discussions/arguments with Sean, Shawn, Tom, Boyd and Bobby about it). My low point in being a baseball fan was when i had to watch game 6 and 7 of the 2004 ALCS in San Jose during a business trip. To make it more difficult Jeff Fleider was calling me every two minutes. The worst part was all the Oakland fans in the bay area were rooting for the Sox and I felt like I was the was the only Yankee fan in the bay area those two days. I felt so lonely. It was a difficult time. Well The NY Giants certainly helped me in some strange way this past SuperBowl. I can call all those 18-1 boston fans and get back. I am not such a big fan of the NFl though.

Well I want to end this initial blog/rant on this note as its time for dinner. Well this is a start and more will come, I promise. Good Stuff.