Brand New

Not a day goes by, it seems, when we're not on the phone talking to advertisers on behalf of our clients. What's most stunning about all these conversations is that even in 2007, there remains a remarkably high level of web ambivalence out there. I used to feel that a lot of these advertisers just didn't get it. Now I am coming around to the view that a lot of publishers don't get it, with "it" being an understanding of what their advertisers want from them.

The biggest disconnect occurs in markets that are mature and increasingly consolidated. Consolidation means fewer players in the industry and less advertising overall. But this does not mean that advertising disappears, even in markets where companies can credibly claim to know most if not all of their prospects. Instead, companies shift their advertising objective from lead generation to branding. And make no mistake about it: these companies know what they are doing, and they are confident that brand advertising is important, delivers good value, and most importantly, supports their other selling activities. If only publishers these days could muster the same resolve about the power of brand advertising!

What about ROI? These advertisers know that ROI is difficult to measure for brand advertising, and as a consequence, few make any real effort to do so. And what about online advertising? Typically, we find these companies are devoting 10-30% of their advertising budgets to online, and most reluctantly confirm that the online percentage continues to increase each year.
Why the reluctance? Because these advertisers aren't seeing any compelling places to do brand advertising online. Most industry websites look weak and tired to them, and in the case of b2b magazine websites, they're usually correct. Where they do run across energized sites with good advertising potential, they actually feel a disconnect with the publisher's focus on lead generation.

There is no small amount of irony here. Just as publishers have begun to deliver the ROI-driven online products that advertisers have been clamoring for, a sizable number of them seem to be shifting back to brand advertising.

In short, all this provides more proof that neither the web, nor our advertisers, are monolithic, and that "one size fits all" online strategies are increasingly fraught with risk. As always, the prescription is clear: stay close to your advertisers, and don't be swayed by conventional wisdom. There's a lot of change going on out there, and it's not always easily discerned.

Labels: advertising, b2b, online, trends

Go Phish!

One of the most interesting features of Microsoft's Internet Explorer 7.0 browser is a visual alert system to identify potential phishing sites (sites that look as if they are reputable, well-known companies, but which are designed for identity theft). It's pretty cool: when visiting a site verified as legitimate, the address bar area of the browser turns green to connote safety. Suspect sites turn the address bar yellow, and known phishing sites turns the address bar red. On the surface, it seems like an elegant solution to a growing problem.

But to take the punch line from an old joke, "how do it know"?

How does Microsoft determine that a site is legitimate, suspect or fraudulent? It doesn't. Microsoft isn't validating companies or websites directly. Instead, it is relying on a program developed by the CA/Browser Forum, an industry group that has created a standards process for verifying legitimacy. These standards are in turn applied by a number of private companies (called "certification authorities") that actually do the certification work. A key screening criteria is a check of state incorporation records, meaning that unincorporated businesses currently aren't eligible for verification.

A fair amount of research on my part has not yet determined who identifies "suspicious" or "known" phishing sites, and who maintains this database of information. Good luck if you're ever accidentally included on this list, because there appears to be no appeal.

We're very bullish on the power of "3R" (rating, ranking and recommendation) features to add value to data. They can be even more powerful when tightly integrated into software tools, as in this new system. Yet, in its rush to do good, Microsoft (non-Microsoft browsers will participate in this program as well I should add) has made four major blunders:

• The program doesn't currently cover everyone, relegating a large number of companies to the status of "unknown." This angers the excluded companies while reducing the value of the 3R system to users.
• It has created a secretive blacklisting process that lacks any of the processes or safeguards you would expect of a system that has the power to put a company out of business virtually overnight.
• Its high certificate fees (reportedly, prices now range from $300 to $1,200) pose a barrier for smaller businesses. This works against a high participation rate, which is critical to success.
• It over-hypes the benefits of the system -- to qualify for "green" status, a company needs only to be legally incorporated somewhere, not exactly a demanding standard when you are vouching for the legitimacy of a business.

While the goal is laudable, this sloppily designed program has been rushed to market under pressure from the companies planning to become certification authorities. The lesson for information companies considering 3R systems of their own is don't rush to judgment, or ye yourself will be judged, and found wanting.

Labels: IE7, Infocommerce, Microsoft, Phish

Coin of the Realm

The online advertising world was all abuzz this week with the revelation that a number of very high traffic websites have been obtaining large percentages of that traffic through pop-ups on other sites. Apparently, by including actual site content in the pop-ups rather than an advertising message, these pop-up pages got counted as site visits, radically inflating overall site traffic counts.

There's no allegation of fraud here; the discussion seems to be centered more along the lines of "who knew this was even possible?" Intriguingly though, it's far from the first time we've all been surprised to learn the way we were counting site traffic was badly skewed.

The first incident I remember is back in the early days of the Internet, when it first became widely known that many ISP's, AOL in particular, were caching web pages. In those days when most everyone had dial-up lines, ISP's could deliver huge performance gains by delivering cached pages from their servers rather than constantly fetching them from destination websites. Result: vast under-counting of site visits.

The second big seismic event I remember is when a programmer casually pointed out at an industry conference that hits and page views were radically different things. Up until that point, hits were thought to be the same as page views, and much of the software of the day was focused on measuring these hits. The problem? A web page with no graphics on it generated a single hit count, but a web page with 10 graphic elements on it generated a hit count of 11. Talk about over-reporting traffic!

Having seen these and a whole host of smaller such "discoveries" over the past ten years, what amazes me -- and to some extent scares me -- is that at this late date, we are still struggling to both define and count traffic. It's all the more remarkable because our industry has so totally bought into the "traffic economy," where your success and even the value of your business is directly linked to the amount of site traffic you can attract.

If traffic is truly our new currency, we are all going to need to work a whole lot harder to stamp out counterfeiting.

Picks, Pans and Passes

Another week full of activity, so here's a report card on some of the more interesting developments, graded as either a "pick" (thumbs up), "pan" (thumbs down) or "pass" (it is what it is):

Reed Business Information has announced the acquisition of 2006 Model of Excellence award winner BuyerZone, which has an underlying business model that neatly side-steps a lot of the issues that have dogged other e-marketplace initiatives. BuyerZone is a great business, and more importantly for Reed, a real platform to leverage its central market position in many industries to quickly build out powerful transactional offerings. This deal's a pick.

The Commonwealth Business Media unit of United Business Media has announced the acquisition of Official Airline Guide (OAG). A long-time high-flier in the information business, OAG thought the Internet was just a little turbulence, and tried to ride it out rather than changing course, a bad strategy for a subscription-based provider of print airline schedules. What Commonwealth sees in OAG is the raw data for high-value business intelligence, and it's providing that analytics overlay by putting OAG into its BACK Aviation consulting group. This deal's a pick.

Another 2006 Model of Excellence award winner, Zillow, is continuing to roil the real estate industry. First, it launched a free national database of home valuation data to great fanfare. Now it seems to be lifting a chapter from Craig's List, and is offering to let homeowners and real estate agents post real estate listings for free. Further confirming how publicity savvy it is, homeowners can either post a traditional sale listing, or a listing of their home with a "make me move" price. This is all very fun and frothy, but it's going to take a lot more than great PR to win the huge prize that is the real estate listings business. Jury's out on this one, which is why we rate it a pass.

Microsoft has launched a beta of Live Search Books this week, its answer to Google Book Search. Initially, searches will be separate from the main Windows Live search engine, but Microsoft wants to move quickly to integrate book content so a single search on Windows Live will return both book and Web content together. And yes, Microsoft plans to scan the full text of books, but with a twist: Microsoft plans to ask publishers for their permission first. This kinder, gentler Microsoft sits well with us, and suggests its "House of Hubris" label should be assigned to some different company. Any company spring to mind? Respect for copyright makes this new service a pick.

Garbage or Gold?

A recent article in the Sunday Times ofEngland points out the dark underbelly of user-contributed content. An undercover reporter posing as a salesperson for a marketing company called a number of hotels and offered to post favorable reviews about them on user-driven travel websites in exchange for a fee. None of the hotels contacted dismissed the proposition out of hand, and many of them were more than a little intrigued.

That's just one unseemly aspect of what the Sunday Times sees as a larger problem: user-contributed content in the travel industry is becoming more and more widespread and popular, forcing companies that conduct their own independent ratings to either adopt user-generated ratings or go out of business. This might be dismissed as the invisible hand of the marketplace at work, except for one major issue: in many cases, bad data is replacing good data.

The Times article found a number of examples of hotel owners submitting reviews on their own properties, and notes that for most travel sites even two or three reviews can radically alter the rating for a hotel for better or worse, creating fertile playground for fraudsters. In an even murkier twist, some hotels are now offering various incentives to guests who post positive online reviews. The newspaper also contacted a number of travel website operators that claimed to monitor all user-supplied content and found that some weren’t living up to that promise, Those that did monitor all user-submitted content admitted they couldn’t really spot bogus submissions. There are even cases now of hotels threatening legal action against their guests who chose to post legitimate, negative reviews.

What's going on here is that these travel sites are beginning to have real influence in the marketplace, with significant financial consequences for hotels. Hotel owners are frustrated by a system they don't consider fair, where just one or two dissatisfied guests can totally trash a hotel's reputation. Worse yet, the system is wide open to many forms of fraud and abuse. Operators of these websites are publishing information they can't vet, and consumers continue to lap up all free and easily accessible content with no apparent concern about its provenance or accuracy.

With user-generated content and community now two of the hottest concepts in the data publishing business, it's important that we all take a look at the critical issue of quality, because the current "garbage in, garbage out" model can't be a basis for long-term success.