InfoCommerce Group Blog


Value Versus Volume

A recent article in Digiday entitled “Why publishers struggle to monetize their paywall data” lays bare one of the great inconsistencies of the digital marketing era: despite the ready availability of great targeting data, advertisers and their agencies still put more emphasis on quantity than quality.

Don’t get me wrong: advertisers want to target their messages, and will pay a premium for the ability to do so. But they also want push-button simplicity, which invariably means they favor those with the largest audiences and the biggest networks. A single price, a single invoice, easy management and analysis: that’s what advertisers seem to value most highly. If the audience quality isn’t quite as good, it’s still worth it to them.

And thus it has ever been so. In the heyday of postal direct marketing, everyone talked quality and sold quantity. Back then it was the tyranny of per thousand pricing at work. If you sold your product at a per-thousand rate, you had to move a lot of volume to make meaningful money. Indeed, the clever publisher who could identify 50 perfectly targeted prospects for an advertiser probably couldn’t even sell those names at any price – it was just too much work in an industry that tested its lists in quantities of 10,000 names.

Online marketing and improved user data was supposed to change all this. And to some extent it has. We now have a bifurcated publishing world with some publishers still selling their audiences on a cost per thousand basis, forcing them into a world of almost unlimited supply, meaning low prices, meaning they have to still make their money on volume. Quality occupies a tenuous position in this business model.

The other group of publishers has changed their focus to lead generation. By using a variety of different approaches, these publishers get individuals in their audiences to raise their hands and indicate they are likely buyers of a particular product or service. An individual lead can sell for a lot of money, and this has allowed publishers to move away from commodity selling with per thousand pricing.

And this would ordinarily be a happy ending, except that advertisers are now demanding their sales leads in quantity. They’re indicating it’s not worth their time to work with publishers that can’t reliably generate a certain quantity of leads per week. Once again, quantity is starting to take precedence over quality. What makes this even more odd is that many advertisers are gorging themselves on sales leads, buying so many that they can’t handle them effectively without expensive marketing automation software that itself demands more and more leads in order to work effectively.

The seemingly unavoidable conclusion from all this is that most advertisers aren’t really that good at marketing and sales. If correct, it seems logical that publishers should assume more of this role for them. And indeed, we are seeing movement in this direction with growth of marketing services, content marketing, lead qualification and appointment setting – all things that arguably roll up into what’s being referred to as the “full stack” business model.

If things play out this way, we’re looking at another round of profound, wrenching change for the publishing industry. At least with this round of change those who survive it will seemingly emerge with strong, high-value businesses and bright prospects.



App Store or App Storage?

In a recent article in Talking New Media, a writer with the pseudonym Alain Parkeat takes the Apple App Store to task for its incredibly bad design.

While I am not a frequent user of the App Store, every time I have to access it, I wince. For a company that hangs its hat on its relentless pursuit of perfection in design and user experience, everything about its App Store is slipshod and half-baked.

Really, you couldn’t do it much worse. The problems start right at the core of the whole App Store concept: in a rush to have the most apps, it’s necessarily assembled a collection of the worst apps. And here I am not just talking about the quality of the apps. Rather, I find I must tread warily with every search, because the App Store is riddled with frauds and imposters. Search on the trademarked name of a popular product, and you’ll invariably get not only that product, but lookalikes clearly designed to fool those who are not careful. They use deceptively similar names, logos and trade dress. They also are apparently allowed to use competitive product names as search keywords. Scariest of all, many of these lookalike apps are free – and thus likely to be nefarious ploys to gain access to your data or your passwords.

Searching the app store is also remarkably difficult. You think basic search functionality wouldn’t be too tough to implement, but with the App Store, you’d be wrong. Searching is about as literal as you can get, meaning that you better get your input exactly right, because the search engine isn’t going to help much at all.

This of course leads to categorization. Yup, the App Store is all over that, with 25 categories to classify a reported one million apps. I guess I’ll just click on the category “business” and start browsing. Clearly, with an average of 40,000 apps per category, this isn’t a very effective discovery mechanism.

But the App Store does feature apps, and since these apps are about the only thing you can easily discover in the App Store, they get enormous numbers of downloads. How does one become one of the few, the proud, the featured? Well, you need a lot of downloads first. Yes, if you want to be successful in the App Store, you better be successful before you get to the App Store. Otherwise, you better be very lucky.

Perhaps the most remarkable thing about the Apple App Store is that this is not some obligatory thing Apple threw together to keep customers happy. Indeed, it’s a major source of revenue, generating over $1 billion per month, with Apple helping itself to a nice share of the pie.

For most publishers, the harsh reality is that the App Store is, more accurately, the App Repository. Apple’s value is providing a central location for apps and easy downloads. As far as discovery goes, you’re on your own. If only there was an app for that!




Evolving From Data Providers to Market Makers

Trucker Path is a young company, founded only in 2013. Yet its mobile app, providing truckers with basic directory information such as location of rest stops, parking, diesel fuel stations, weigh stations and more has already attracted over 250,000 users. Its formula for success is a familiar one to data publishers: collect information that is really needed by a specific niche market but not readily available in one place elsewhere.


Another mobile app success story to be sure. And Trucker Path could have rested on its laurels. But just a few days ago, it signaled a much more ambitious vision with the launch of a new product called Trucker Marketplace. It is exactly what the name implies: a marketplace where truckers can find and connect with those who need to ship freight, either regionally or nationally.

It’s a simple concept, and it’s also not a new concept. Many companies have sought an intermediary role in this inefficient marketplace, particularly in the area of backhauls, where trucks often return home empty after delivering a load. And the opportunity is huge: more than 75% of all freight in the U.S. is delivered by truck.

Obviously, Trucker Path has a natural point of leverage in that it can offer this service to its existing base of satisfied directory users. But in another twist I find both significant and smart, Trucker Path is embracing freight brokers, not trying to disintermediate them. Rather than embracing the standard tech playbook of trying to blow up an inefficient industry in order to carve out a position, Trucker Path is simply trying to graft a new layer of efficiency onto an existing market. I would argue they’re trading a bit of potential upside for a radically increased chance of success.

Trucker Path does some other tried and true things such as providing credit, insurance and license data to its marketplace participants, a tested way to increase both value and trust.

Trucker Path is a case study for my long-held view that B2B data publishers in market verticals are well positioned to consider the marketplace model. They’ve got a brand, they’ve got the audience, and they know how to use data (e.g., license and credit information) to create the trusted environment that is essential to driving transaction volume. And despite their noisy collapse after the dot com bust (too much, too soon),  I am very optimistic about the future of B2B exchanges. We all now recognize the value of workflow integration: if you’re enabling the flow of work for an entire industry, you’re obviously in a very good place.


A Review of Reviews

Reviews are important. That’s no secret. Almost everyone uses them now as part of their pre-purchase research. We depend on them. We want them. And in the time and attention deficit world we all live in, we need them to help us quickly make smart decisions.

The basic premise of online reviews can be summed up as "in numbers, truth.” If you have enough people reviewing something, the real answer will emerge. And it will overwhelm all the cheaters, frauds and manipulators who are posting reviews as well.

But in order for a review site to build the volume of reviews, it needs to focus. If you want reviews on all the hotels in the world, you need to stay true to that mission. Same if you’re trying to be the authority on restaurants. There’s always time to expand your scope later, once you are established, known and successful. This is a simple, but key driver behind the success of sites like TripAdvisor and Yelp. If you want people to come to your site to read reviews, you better have reviews to read. And once they’re reading, getting them to post reviews is pretty easy as experience has shown.

That’s why I was puzzled to read recently that a Danish site called TrustPilot had just raised over $73 million in new funding. There must be innovation here, right?

Well, TrustPilot is indeed innovative, but not the way I had imagined. As far as I can see, TrustPilot wants to review every business in the world (and it’s already pushing into product reviews as well). Nothing wrong with being ambitious, but in this case is TrustPilot trying to be too ambitious?

Let’s look at the numbers: TrustPilot currently has about 10 million reviews of 90,000 businesses … worldwide. Further, it’s organized by overly broad categories such as “Services” and “Transportation.” In a nice feature, it ranks the top companies in each category based on their review scores, but in all the categories I examined, I had trouble finding any companies whose names I actually knew. TrustPilot is a great vehicle to post reviews, but as a purchase research tool, it’s a mile wide and an inch deep.

Sure, $73 million buys a lot of growth. But it seems like long odds against TrustPilot getting enough review volume across all its categories to reach critical mass. First they need enough companies to become a real go-to destination. Then they need enough reviews of each company for the truth to emerge.

My review: in a business that depends on volume, don’t start out by trying to be everything to everybody.

Everyone into the (data) Pool

There’s a quiet revolution going on in agriculture, much of it riding under the label of “precision agriculture.” What this means is that farms are finding they can use data both to increase their productivity and their crop yields.

To provide just one vivid example, unmanned tractors now routinely plow fields, guided by GPS and information on how deep to dig in which sections of the field for optimal results. Seeds are being planted variably as well. Instead of just dumping seeds in the earth and hoping for the best, precision machinery, guided by soil data, now determines what seeds are planted and where, almost on an inch-by-inch basis.

It’s a big opportunity, with big dollars attached to it, and everyone is jockeying to collect and own this data. The seed companies want to own it. The farm equipment companies want to own it. Even farm supply stores – the folks who sell farmers their fertilizer and other supplies want to own it. In fact, everyone is clamoring to own the data, except perhaps the farmer.

Why not? Because a farmer’s own soil data is effectively a sample size of one. Not too valuable. Value is added when it  is aggregated to data from other farmers to find patterns and establish benchmarks. It’s a natural opportunity for someone to enable farmers to share their data to mutual benefit. This is a content model we call the “closed data pool,” where a carefully selected group agrees to contribute its data, and pay to receive back the insights gleaned from the aggregated dataset.

One great example of this model is Farmers Business Network. Farmers pool their data and pay $500 per year to access the benchmarks and insights it generates. Farmers Business Network is staffed with data scientists to make sense of the data. Very importantly, Farmers Business Network is a neutral player: it doesn’t sell seeds or tractors. Its business model is transparent, and farmers can get data insights without being tied to a particular vendor. Farmers Business Network makes its case brilliantly in its promotional video, which is well worth watching:

Market neutrality and a high level of trust are essential to building content using the closed data pool model. But it’s a powerful, sticky model that benefits every player involved. Many data publishers and other media companies are well positioned to create products using this model because they already have the neutral market position and market trust. Closed data pools are worth a closer look. Google certainly agrees: it just invested $15 million into Farmers Business Network.