Tracking Error

A new report released by the Federal Trade Commission this week makes a strong case for increased online consumer privacy protection. This report builds on the "Consumer Data Privacy Bill of Rights" issued by the White House last month.

The White House document is largely aspirational, setting general goals such as "Consumers have a right to secure the responsible handling of personal data." The FTC report is far more specific, and includes an endorsement of a "do not track" option for consumers, along with a recommendation that "data brokers" be required to allow consumers to inspect the data that have been collected about them.

You'll notice my exclusive use of the word "consumer" above. That's because both these documents only refer to consumers, not businesses. Whether this creates a giant loophole for business-to-business information publishers or a giant swamp of indeterminate liability remains to be seen.

My sense in reviewing both these documents is that they have been fueled by a strong sense of "we don't know what we don't know." These recommendations are not born out of concern about using cookies to better target advertising. Instead, they stem from a concern that marketers and unknown other parties are building huge electronic dossiers on consumers with no restrictions on the use of such information.

None of this is new. As far back at the late 1980s, I worked with databases that held deep behavioral data on consumers. They were built by mashing up information on what mail order catalogs consumers purchased from, information supplied on product warranty cards, information on what magazines they subscribed to, etc. Low-level Census data were overlaid to gauge income and wealth. Even by today's cutting-edge standards, these were slick marketing tools. And they worked. But they didn't create consumer anxiety or outrage. The worst outcome was you might get more mail order catalogs than you wanted.

What's different now is that technology is advancing faster than the ability to govern it. Identity theft is commonplace. Data breaches happen regularly and are well publicized. Reputable software companies plant tracking cookies against your wishes, or secretly upload your address book from your computer. All this works to create severe information anxiety. And we react by trying to regulate the legitimate players, because we can't even locate the truly bad actors.

Certainly the online marketing industry would benefit from greater transparency and some agreed-upon rules of the road. But we can’t throw the baby out with the bath water. Consumers -- and government -- need to acknowledge that all that free stuff is paid for by advertising. Insisting on free content while at the same time rejecting intelligent ad target isn't sustainable. As an astute blogger recently posted, “Dude, if you aren’t paying for the product, you are the product."

Made to Measure

It's been well-known for many years that  Google periodically alters its search algorithms. These changes are made for two reasons: to improve the quality of search results, and to push back against those sites that it believes are gaming the system. To Google, gaming the system means that a website operator has divined in part how the Google search algorithm prioritizes results, and uses that knowledge to improve its own search results rankings.

This fear of websites finding tricky ways to inappropriately push themselves to the top of search results is why Google keeps its search algorithm secret, and why it is periodically changed. At some level, this stance sounds fair and makes sense. After all, it is in the interest of both Google and its users to have the most relevant sites appear earliest in search results rankings. And now Google is arguably upping the ante with a plan to penalize those sites that it deems "over-optimized." Yes, if your SEO efforts are too good, your search rankings may be at risk.

The downside of these efforts is that they create winners and losers. Your site can be one of the most visited on the Web one day, and fade into obscurity 24 hours after a Google algorithm change. And with this new policy, even an honest, useful site with valuable content can inadvertently cross a secret Google threshold and be penalized for "too much SEO."

How does one build a business in such an arbitrary, frequently shifting environment where you can be severely penalized all with no notice, no explanation and no appeal? Guess what, you can't.

This is a huge point for content companies. That's because at this late date, most of us remain focused on undiscerning, top-line measures of online success: total visits and total uniques. Frankly, it's like a retailer deciding it's more insightful to count the number of people who look in the store window as opposed to those who enter the store and buy something.

Publishers all know that a significant percentage of their monthly visitors hit their sites, look at a single page and disappear within seconds. Nothing wrong with that. The web is a huge discovery tool: web users find your site, take a quick look, and the relative few who like what they see stick around. It's just like a sales funnel. Yet we persist in focusing on the top of the funnel, not the bottom. Publishers also know how many of their visitors come to them directly, and how many come via search engines. But it's only a handful of publishers who attach any strategic importance to trying to build direct traffic. And that again is because everyone is competing to show the biggest overall traffic numbers. I will admit that the market supports this sloppy view of things: a lot of advertising is still sold based on these meaningless metrics.

But as long as we retain this orientation, our businesses remain totally exposed to Google's latest algorithmic whim, and now we risk having our visibility reduced simply because we were trying to maximize our visibility. It’s time we wake up to the futility of the traffic-based economy, and, luckily,  many advertisers are at the same point.  The savvy ones now could care less about our monthly uniques; they want a certain number of sales leads. Since we'll never turn one-page, one-time visitors into qualified leads, why measure them? And once we stop measuring what doesn't matter, we can start focusing on building quality, recurring, direct visitors that will reduce our exposure to the vicissitudes of search engine algorithms. What's not to like?

It's been well-known for many years that  Google periodically alters its search algorithms. These changes are made for two reasons: to improve the quality of search results, and to push back against those sites that it believes are gaming the system. To Google, gaming the system means that a website operator has divined in part how the Google search algorithm prioritizes results, and uses that knowledge to improve its own search results rankings.

This fear of websites finding tricky ways to inappropriately push themselves to the top of search results is why Google keeps its search algorithm secret, and why it is periodically changed. At some level, this stance sounds fair and makes sense. After all, it is in the interest of both Google and its users to have the most relevant sites appear earliest in search results rankings. And now Google is arguably upping the ante with a plan to penalize those sites that it deems "over-optimized." Yes, if your SEO efforts are too good, your search rankings may be at risk.

The downside of these efforts is that they create winners and losers. Your site can be one of the most visited on the Web one day, and fade into obscurity 24 hours after a Google algorithm change. And with this new policy, even an honest, useful site with valuable content can inadvertently cross a secret Google threshold and be penalized for "too much SEO."

How does one build a business in such an arbitrary, frequently shifting environment where you can be severely penalized all with no notice, no explanation and no appeal? Guess what, you can't.

This is a huge point for content companies. That's because at this late date, most of us remain focused on undiscerning, top-line measures of online success: total visits and total uniques. Frankly, it's like a retailer deciding it's more insightful to count the number of people who look in the store window as opposed to those who enter the store and buy something.

Publishers all know that a significant percentage of their monthly visitors hit their sites, look at a single page and disappear within seconds. Nothing wrong with that. The web is a huge discovery tool: web users find your site, take a quick look, and the relative few who like what they see stick around. It's just like a sales funnel. Yet we persist in focusing on the top of the funnel, not the bottom. Publishers also know how many of their visitors come to them directly, and how many come via search engines. But it's only a handful of publishers who attach any strategic importance to trying to build direct traffic. And that again is because everyone is competing to show the biggest overall traffic numbers. I will admit that the market supports this sloppy view of things: a lot of advertising is still sold based on these meaningless metrics.

But as long as we retain this orientation, our businesses remain totally exposed to Google's latest algorithmic whim, and now we risk having our visibility reduced simply because we were trying to maximize our visibility. It’s time we wake up to the futility of the traffic-based economy, and, luckily,  many advertisers are at the same point.  The savvy ones now could care less about our monthly uniques; they want a certain number of sales leads. Since we'll never turn one-page, one-time visitors into qualified leads, why measure them? And once we stop measuring what doesn't matter, we can start focusing on building quality, recurring, direct visitors that will reduce our exposure to the vicissitudes of search engine algorithms. What's not to like?

It's been well-known for many years that  Google periodically alters its search algorithms. These changes are made for two reasons: to improve the quality of search results, and to push back against those sites that it believes are gaming the system. To Google, gaming the system means that a website operator has divined in part how the Google search algorithm prioritizes results, and uses that knowledge to improve its own search results rankings.

This fear of websites finding tricky ways to inappropriately push themselves to the top of search results is why Google keeps its search algorithm secret, and why it is periodically changed. At some level, this stance sounds fair and makes sense. After all, it is in the interest of both Google and its users to have the most relevant sites appear earliest in search results rankings. And now Google is arguably upping the ante with a plan to penalize those sites that it deems "over-optimized." Yes, if your SEO efforts are too good, your search rankings may be at risk.

The downside of these efforts is that they create winners and losers. Your site can be one of the most visited on the Web one day, and fade into obscurity 24 hours after a Google algorithm change. And with this new policy, even an honest, useful site with valuable content can inadvertently cross a secret Google threshold and be penalized for "too much SEO."

How does one build a business in such an arbitrary, frequently shifting environment where you can be severely penalized all with no notice, no explanation and no appeal? Guess what, you can't.

This is a huge point for content companies. That's because at this late date, most of us remain focused on undiscerning, top-line measures of online success: total visits and total uniques. Frankly, it's like a retailer deciding it's more insightful to count the number of people who look in the store window as opposed to those who enter the store and buy something.

Publishers all know that a significant percentage of their monthly visitors hit their sites, look at a single page and disappear within seconds. Nothing wrong with that. The web is a huge discovery tool: web users find your site, take a quick look, and the relative few who like what they see stick around. It's just like a sales funnel. Yet we persist in focusing on the top of the funnel, not the bottom. Publishers also know how many of their visitors come to them directly, and how many come via search engines. But it's only a handful of publishers who attach any strategic importance to trying to build direct traffic. And that again is because everyone is competing to show the biggest overall traffic numbers. I will admit that the market supports this sloppy view of things: a lot of advertising is still sold based on these meaningless metrics.

But as long as we retain this orientation, our businesses remain totally exposed to Google's latest algorithmic whim, and now we risk having our visibility reduced simply because we were trying to maximize our visibility. It’s time we wake up to the futility of the traffic-based economy, and, luckily,  many advertisers are at the same point.  The savvy ones now could care less about our monthly uniques; they want a certain number of sales leads. Since we'll never turn one-page, one-time visitors into qualified leads, why measure them? And once we stop measuring what doesn't matter, we can start focusing on building quality, recurring, direct visitors that will reduce our exposure to the vicissitudes of search engine algorithms. What's not to like?

It's been well-known for many years that  Google periodically alters its search algorithms. These changes are made for two reasons: to improve the quality of search results, and to push back against those sites that it believes are gaming the system. To Google, gaming the system means that a website operator has divined in part how the Google search algorithm prioritizes results, and uses that knowledge to improve its own search results rankings.

This fear of websites finding tricky ways to inappropriately push themselves to the top of search results is why Google keeps its search algorithm secret, and why it is periodically changed. At some level, this stance sounds fair and makes sense. After all, it is in the interest of both Google and its users to have the most relevant sites appear earliest in search results rankings. And now Google is arguably upping the ante with a plan to penalize those sites that it deems "over-optimized." Yes, if your SEO efforts are too good, your search rankings may be at risk.

The downside of these efforts is that they create winners and losers. Your site can be one of the most visited on the Web one day, and fade into obscurity 24 hours after a Google algorithm change. And with this new policy, even an honest, useful site with valuable content can inadvertently cross a secret Google threshold and be penalized for "too much SEO."

How does one build a business in such an arbitrary, frequently shifting environment where you can be severely penalized all with no notice, no explanation and no appeal? Guess what, you can't.

This is a huge point for content companies. That's because at this late date, most of us remain focused on undiscerning, top-line measures of online success: total visits and total uniques. Frankly, it's like a retailer deciding it's more insightful to count the number of people who look in the store window as opposed to those who enter the store and buy something.

Publishers all know that a significant percentage of their monthly visitors hit their sites, look at a single page and disappear within seconds. Nothing wrong with that. The web is a huge discovery tool: web users find your site, take a quick look, and the relative few who like what they see stick around. It's just like a sales funnel. Yet we persist in focusing on the top of the funnel, not the bottom. Publishers also know how many of their visitors come to them directly, and how many come via search engines. But it's only a handful of publishers who attach any strategic importance to trying to build direct traffic. And that again is because everyone is competing to show the biggest overall traffic numbers. I will admit that the market supports this sloppy view of things: a lot of advertising is still sold based on these meaningless metrics.

But as long as we retain this orientation, our businesses remain totally exposed to Google's latest algorithmic whim, and now we risk having our visibility reduced simply because we were trying to maximize our visibility. It’s time we wake up to the futility of the traffic-based economy, and, luckily,  many advertisers are at the same point.  The savvy ones now could care less about our monthly uniques; they want a certain number of sales leads. Since we'll never turn one-page, one-time visitors into qualified leads, why measure them? And once we stop measuring what doesn't matter, we can start focusing on building quality, recurring, direct visitors that will reduce our exposure to the vicissitudes of search engine algorithms. What's not to like?

It's been well-known for many years that  Google periodically alters its search algorithms. These changes are made for two reasons: to improve the quality of search results, and to push back against those sites that it believes are gaming the system. To Google, gaming the system means that a website operator has divined in part how the Google search algorithm prioritizes results, and uses that knowledge to improve its own search results rankings.

This fear of websites finding tricky ways to inappropriately push themselves to the top of search results is why Google keeps its search algorithm secret, and why it is periodically changed. At some level, this stance sounds fair and makes sense. After all, it is in the interest of both Google and its users to have the most relevant sites appear earliest in search results rankings. And now Google is arguably upping the ante with a plan to penalize those sites that it deems "over-optimized." Yes, if your SEO efforts are too good, your search rankings may be at risk.

The downside of these efforts is that they create winners and losers. Your site can be one of the most visited on the Web one day, and fade into obscurity 24 hours after a Google algorithm change. And with this new policy, even an honest, useful site with valuable content can inadvertently cross a secret Google threshold and be penalized for "too much SEO."

How does one build a business in such an arbitrary, frequently shifting environment where you can be severely penalized all with no notice, no explanation and no appeal? Guess what, you can't.

This is a huge point for content companies. That's because at this late date, most of us remain focused on undiscerning, top-line measures of online success: total visits and total uniques. Frankly, it's like a retailer deciding it's more insightful to count the number of people who look in the store window as opposed to those who enter the store and buy something.

Publishers all know that a significant percentage of their monthly visitors hit their sites, look at a single page and disappear within seconds. Nothing wrong with that. The web is a huge discovery tool: web users find your site, take a quick look, and the relative few who like what they see stick around. It's just like a sales funnel. Yet we persist in focusing on the top of the funnel, not the bottom. Publishers also know how many of their visitors come to them directly, and how many come via search engines. But it's only a handful of publishers who attach any strategic importance to trying to build direct traffic. And that again is because everyone is competing to show the biggest overall traffic numbers. I will admit that the market supports this sloppy view of things: a lot of advertising is still sold based on these meaningless metrics.

But as long as we retain this orientation, our businesses remain totally exposed to Google's latest algorithmic whim, and now we risk having our visibility reduced simply because we were trying to maximize our visibility. It’s time we wake up to the futility of the traffic-based economy, and, luckily,  many advertisers are at the same point.  The savvy ones now could care less about our monthly uniques; they want a certain number of sales leads. Since we'll never turn one-page, one-time visitors into qualified leads, why measure them? And once we stop measuring what doesn't matter, we can start focusing on building quality, recurring, direct visitors that will reduce our exposure to the vicissitudes of search engine algorithms. What's not to like?

Dead Letter Office

I got a call from the new postmaster at our local post office the other day.  Her staff had apparently discovered a sizable stack of year-old nixies from our conference promotions, and wanted to know if I would still be interested in them, for the requisite fee of course. After ruefully noting that the Postal Service is, "really hurting for money," she pretty much offered to drop them off right away if we would just have a check waiting.

I found this call remarkably sad. It's not that I have any particular affection for the Postal Service. Having been a business mailer for nearly 30 years, I have had the same mixed experience as everyone else. But at its peak, service was prompt and reasonably reliable. And direct mail marketing made money for mailers. That's why our mailboxes overflowed with catalogs and offers.

Just before the Internet went mainstream, direct marketers were being confronted with the reality of rising costs and reduced response rates. The industry was just beginning to confront a future of smaller, smarter, better targeted promotions when email arrived, a delivery channel that allowed for unlimited promotion.

Yes, unlimited promotion! Image your daily volume of postal mail if postage and printing were free. Such a visual doesn't even begin to do justice to the feeding frenzy wrought by email and its promise of no-cost, instant gratification. And that's just the legitimate marketers; spammers and scammers were the icing on the cake.

With no gating mechanism (i.e. cost), so many piled on to email marketing so quickly that recipients got overwhelmed and response rates dropped precipitously. Of course when response rates drop and email is free, the natural response is to send more email, and that's exactly what has been happening. Even today, when we talk to marketing managers at B2B companies, they report the standard response to any email campaign that doesn't generate the required revenue is to send more email. And if that doesn't work, still more email is sent. Interestingly, they all admit it's a lousy way to do business, but what's the option? After all, postal mail is so dead.

Solution? Social media. There's one great problem with social media: the "social" part. To make social media work as a marketing channel, you need a) an audience and b) something interesting to talk about. Many marketers are so desperate to tap social media they literally try to buy audiences with such things as deep discounts and even gift cards. But it's a lot harder to be interesting, especially for B2B marketers. It's kind of like walking into a bar on Friday night and trying to chat people up about your superior industrial replacement roofing solution.

The real solution is to first recognize the free ride is over. The days of "spray and pray" marketing are ending, a direct parallel to what happened with postal mail. And waiting for the next new online marketing channel to solve all your problems is no solution. Any new channel that shows even a sign of promise will be quickly over-run by hordes of aggressive and desperate marketers.

The real long-term solution is intelligent marketing fueled by data. You need to know more about your customers and prospects so you can be relevant to them, engage with them intelligently and earn their continuing interest. With that foundation, you move from having lists to having a community. This is not the easy path, because those marketers doing it right still have to cut through the clutter of the sloppy marketers doing it wrong.

Maybe with enough attention and respect, we can pull email back from the brink. The stakes are huge, and if we fail, we may all find ourselves someday trying to hawk our email bounce-backs to generate some quick cash. 

Because It's There

I am constantly reviewing new online data products looking for fresh ideas and innovative business models. I do see both, but increasingly I am seeing more lazy and uninspired products.

They are also formulaic . Here's the recipe: grab some public domain database, add some modest value to it (sometimes little more than simple parametric searching), build a user interface and ... well actually, that's about it. Business models vary: there might be a paywall, there might be ads from an ad network. It's actually not uncommon for some of these sites to have no business model at all. It is as if the owners want somebody else to identify the hidden value in what they've done and bring it to them on a silver platter.

This formula play has actually become so common that that there isn't much opportunity left. The number of public domain databases that anyone really wants to access is small, and too many have piled on. That's why a new class of online data sites has emerged: those based on licensed, but generally low-value data. You see them everywhere. The "locate anyone" sites that are generally derived from credit report header data. The business directories are based on compiled yellow pages listings.

The harsh reality is that it's cheap and easy to throw together a website to access a database, especially when the data are low-cost or free. And with the cost so low, there's little incentive to spend time and money to confirm a market need, and sometimes there is little urgency to even generate any revenue.

Professional data publishers point out that these products add little value and tend to be poorly produced and indifferently marketed. Yet there is a segment of the market that is content with "good enough" content, especially when the content is low-priced or even free. It's rare that data products of this type will steal large amounts of revenue from professional data publishers with similar content, but they still have a corrosive effect over time by de-valuing content in the eyes of users, creating downward pressure on prices.

What's a publisher to do? Those who rely largely on public domain data need to understand that this is a precarious place to be these days. Yes, normalization and cleaning and even verifying add value, but these important steps aren't the compelling value proposition they used to be, in part because with some smarts and programming skill, a lot of this value can be replicated by a low-end competitor on an automated basis. The only real long-term answer is differentiated, proprietary data. Even better, publishers need to be thinking about offering insight, analysis, commentary and context. And amid all the new technology that can do such wonders scraping websites to build databases and turning data into polished text, let's not forget that these can only be process steps, not a destination. All these clever tools are available to your competitors as well, and they get cheaper and more powerful every day.

Want long-term success? Think different. It works for content just like it works for computer products!

Good Leads Come to Those Who Rate

I was fascinated an intrigued to read about a start-up company called Inbound Score that is literally just opening for business. Its business is simple but powerful: it takes email sales leads and automatically scores them for you.

In a simple application, supposed you have a "contact us" form on your website. Information from the form is generally sent to you via email. What you know about the person contacting you is generally very little. And if you are getting any volume of such leads, you can immediately see the value of rating them.

According to an article in VentureBeat, what Inbound Score offers is a new tool that seamlessly integrates with your email software and scans new messages for sales leads based on parameters your provide. When it encounters a lead, it uses the email address supplied by the sender to scour the web, social networks and private databases. What is returned to you is the original lead with up to 25 additional data fields appended, along with a score that rates the lead on a 1-100 scale. Pricing for this service starts at $29 per month.

As you can surely see, this is a new spin on what many B2B publishers are already providing (or trying to provide) to advertisers -- basic lead contact information, enhanced with additional data to further qualify the lead, and some kind of lead score.

This concept isn't entirely new, but it's a neat spin on the concept, particularly the notion of scoring the lead when it is delivered to an inbox. If services like this take off, publishers will have to consider both the information they are supplying as part of their lead programs, as well as the format. Excel files (still the most common way leads are delivered) will start to look very tired by comparison.

And let's not forget the opportunities here for data publishers who can be powering tools such as this with fast access to proprietary, structured data. There are lots of interesting angles here, including possible a la carte up-selling of deep company or individual backgrounders.

Exciting stuff!