Public Data Central

The federal government's brand-spanking-new Chief Information Officer, Vivek Kundra, was interviewed yesterday by Government Computer News about some of his planned initiatives for the federal government.

What's most notable about these remarks is that high on Kundra's agenda is an ambitious plan to centralize federal databases and data feeds at a new site to be called data.gov. Most significantly, Kundra sees this rich pool of data fueling all sorts of new products and creating new business opportunities.

The article notes that in his former position as CIO of the District of Columbia, he launched an initiative called "Apps for Democracy" that encouraged businesses, non-profits and individuals to build applications based on District of Columbia data so the government wouldn't have to do the work in-house. Now that's progressive thinking!

What are the implications for data publishers, particularly those already making heavy use of government data? This initiative could be a two-edged sword. On one hand, it creates real pressure to make more government data conveniently accessible. On the other hand, it's likely to create more competition from online start-ups start seeking to capitalize on the value of these new databases.

The secret for success is not simply to re-format or even aggregate these government databases, but add value to them. Government data are almost by definition messy data, so there is value in scrubbing and normalizing it. Government data are almost always not current, so value can be added by bringing them up to date. Government databases are often deep, but not with information that's necessarily of any commercial value. Data augmentation can often add tremendous value.

Profiting from this promised flood of new government databases means treating them as starting points, not destinations. Adding value to data is something we all know how to do very well, so let the race begin!

Labels: data.gov

Making Contact

I'll start this off by admitting I only have a fuzzy grasp of the underlying technology, but that doesn't stop me from believing there are interesting opportunities to be mined as an increasing number of major social networking sites are making member contact lists available through an API (Application Program Interface), based on a new collaborative standard called Portable Contacts.

Through Portable Contacts, you can build the capability into your online applications that enables your users to seamlessly access their address books stored on Google, MySpace, Plaxo and others. Word on the street is that other major social networking sites will jump on this bandwagon shortly. The operative word here is "seamless," meaning it's easy and convenient - users need not enter additional passwords and you don't have to do any screen scraping on their behalf.

At its lowest level, this is an opportunity to add more convenience to your online products. A user may want to forward a data record directly from your site to a colleague. With this new API, that could be as easy as providing them with a pre-populated pick list of all their colleagues.

But let's think more expansively. Lexis-Nexis has a powerful capability on its martindale.com site that lets you see if anyone in your Linked-In network knows any lawyer in the Martindale database that is also listed on Linked-In. What a powerful way to pre-qualify a lawyer you might want to hire.

Consider also Leadership Directories. Its Leadership Networks product lets you visually map how you and your colleagues connect to the most powerful and influential people in America. This API makes this type of functionality much easier and more powerful.

This initiative is all about seamless connectivity. And as I have said endlessly, data products can't thrive as standalone references. The more they integrate with other applications and embed themselves in business processes and workflow, the more powerful they become. Here's just one more way to accomplish that.

Labels: Leadership Directories, Martindale-Hubbell, Portable Contacts

Sell What They Are Buying

A fascinating new study called "Main Street Goes Interactive," from Borrell Associates takes a thorough and much-needed look at the advertising practices and attitudes of the so-called SMB (Small and Medium Businesses) segment - a poorly understood and fitfully researched pool of over 14 million U.S. businesses that collectively spends many billions of dollars annually on advertising.

In many respects, the SMB market is a victim of its own label: it's hard to draw too much insight when you lump small manufacturers and distributors, retailers and even restaurants into one undifferentiated group. At the same time, the Borrell study is more focused, and many of its top-line findings track well with research we've seen from data publishers surveying their own markets.

The Borrell study places SMB average annual revenue at just $212,000, with average annual advertising spend of $5,671. Where are these businesses spending those advertising dollars? Most typically in yellow pages, direct mail and coupon-based media. Perhaps not surprisingly, SMB's are migrating to the web, with 11% of the advertising budgets now spent online, up from 4% just three years ago.

A key study finding is that SMB's see the cost of building and maintaining their websites as part of their advertising expenditures. This insight is useful in helping to inform us how SMB's think about advertising, but ultimately it's a distinction without a difference. For most SMB's, their website is their capabilities brochure and/or their catalog. When I send out direct mail, I don't separate out the cost of the artwork and the paper and the printing from the cost of the mailing list and the postage. It's all an advertising expense to me. And that's apparently how SMB's think as well.

The more important point is that websites are now central to the advertising strategies of SMB's. According to Borrell, two-thirds of SMB's plan to spend more on their websites this year. It's also important to note that SMB's are fans of online directories and search engine marketing.

This study documents what an increasing number of savvy online data publishers have already discovered (think ThomasNet and Martindale-Hubbell among many others): the best way to buttress online advertising revenue is to help SMB clients improve their own websites, whether through design services, creation of online catalogs, providing SEO services, or even managing SEM programs.

SMB's are not sophisticated advertising buyers and they need assistance in this area. Those data publishers that are moving beyond solely selling online advertising to supporting SMB's with agency-like services for what SMB's consider to be a big part of their advertising activity - their own websites - have found both a warm reception and multiple new revenue streams. If you're not doing it, it's a strategy well worth considering.

Labels: Borrell Associates, Martindale-Hubbell, ThomasNet

No Help From Yelp

As soon as you visit the popular website yelp.com, you'll know you're looking at the future of the yellow pages business ... and you'll also see why yellow pages publishers are finding it so hard to get real traction online.The young start-up combines an accurate and deep city-specific directory of all types of local businesses with user reviews and ratings that provide site visitors with plenty of information to make informed choices about local vendors. Beyond this, Yelp provides local event guides and works hard and apparently succeeds in building a sense of community among users of the site. Yelp also innovates. I previously wrote about Yelp's clever process for summarizing user comments to make them more useful.

But a recent profile of Yelp in the New York Times leaves me thinking that the company's founder is offering up more attitude than answers to the company's growing pains.

You see, Yelp generates revenue by selling advertising to the very businesses its users are posting comments about. Invariably, those two activities come into conflict. The article cites a business that called Yelp after a sudden and unexplained drop in its overall rating, and got no assistance. Yelp's founder, Josh Stoppleman, dismissively blamed the problem on an "overly vigilant" spam filter meant to cull suspicious reviews. If Stoppleman had even the slightest concern that his algorithms were impacting revenues of small businesses - the very businesses he wants to advertise - it didn't come across in the article.

When a local restaurant complained about a negative review regarding a dish the restaurant didn't even serve, Stoppleman told the Times, "We can't referee factual disputes. Why believe the business owner who has skin in the game?"

Throughout the article, the implicit message from Yelp to the business community is that "you need us more than we need you." And quick, can anyone think of another group that adopted that same attitude towards local businesses? Right, the yellow pages publishers.

And what of the late lamented yellow pages industry? Well, while Yelp exhibits more and more hubris rather than trying to address real issues with its business model, the yellow pages industry is in fact going back to the drawing board on its business model.

One great example of fresh thinking comes from SuperPages.com, which just launched a program called SuperGuarantee that guarantees its users a satisfactory experience with any service provider sporting the SuperGuarantee logo. Complain to SuperPages, and they'll resolve things to the customer's satisfaction or offer reimbursement up to $500. Best of all, users must register with SuperPages to take advantage of the guarantee, providing incredibly powerful proof of ROI back to participating advertisers.

Why is a giant yellow pages publisher willing to roll up its sleeves and get involved in messy customer disputes when the young, hip, cool start-up is so unwilling to address even clear-cut factual disputes? I think some of the answer is cultural. Too many online start-ups I see seem intent on building black box systems designed to avoid any customer interaction. Great work if you can get it, but the real world is messy, and most of the online services I see really can't deliver maximum value and utility on a totally automated basis. User needs can't be reduced to online forms. What the article on Yelp screams to me is that Yelp simply doesn't want to do the work - too messy, too slow, too labor-intensive. Unfortunately, that's a big part of what publishing is all about. And that leaves an opening competitors can drive a truck through.

Labels: superguarantee, superpages.com, yelp.com

Do You Excel?

The Internet has fundamentally impacted every segment of the publishing industry. But for data publishers, a parallel development that is not often discussed has had as significant an impact. This development, stated simply, is that personal computing, with little fanfare, has finally begun delivering on its promise.

What do I mean by this? That personal computers, and in particular their software, are finally able to do most of the things we were always told they could do, and do them simply and painlessly. That means users - in particular average users - can now confidently download, manipulate, manage and output data. And when people can readily unlock the value of data, they not only buy more of it, they are willing to pay more for it as well. The Internet has freed us from having to communicate with incompatible systems. Hardware advances have brought vast amounts of processing power, memory and disk capacity to almost every computer removing another layer of constraint. Software advances have resulted in software that is easier to master, more stable and more capable than ever before. Our customers are all now routinely working with data in ways that would have been unimaginable just 15 years ago.

But have we licked all their issues and solved all their problems? Not quite yet. The emerging issue I see is that the rapid growth of hosted applications and cloud computing is creating a vast number of data silos - standalone software applications driven by standalone databases.

We are a small company, but despite that (perhaps because of that) we use a number of hosted applications for such things as accounting, bulk email distribution, online surveys, etc. We also subscribe to a number of online databases, and maintain our own in-house database as well. My constant ongoing frustration: none of these applications talk to each other. All these applications do, however, allow me to export my data to Excel or input data from Excel, making it the default format for data interchange. That works, but it's a variation on the old "sneaker nets" of years ago. It's not convenient, it's not efficient and it's prone to error.

There's a huge opportunity here for data publishers who recognize that no matter how powerful and robust their online applications are, they shouldn't be operated as islands. Design your application so relevant data can seamlessly enter and leave your application and you are positioning yourself to become a data hub for your customers. It's taking the concept of workflow integration to the next level: in addition to powering specific business activities, you can help companies centrally manage key datasets. It's a natural role for many data publishers to serve as central data platforms for their customer. But to excel in this area, we need to think beyond Excel.

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