Business Archives - Page 10 of 10

Reality TV as Advertising?

My Super Sweet 16 Who’d have thunk that MTV (VIA) could spawn a niche market? In last December’s issue of Entrepreneur magazine, there was an article entitled: “Party Planning for Teens“. It opened with:

Blame MTV’s My Super Sweet 16 for showing teens nationwide the extremes the super-wealthy go to for a child’s coming-of-age soiree. American teens, who number more than 70 million, want what’s hot at their parties–from bar and bat mitzvahs to sweet 16s, quinceañeras and other coming-of-age rites.

That got me thinking. If My Super Sweet 16 could start a new niche market, could similar reality TV shows also start (or jump-start) other markets? What if an advertiser created a reality TV show just to increase the demand for their product or service?

That could be a stupid idea. TV as an advertising medium is losing its luster. More and more kids are on the Internet. They don’t care about TV. Or do they?

Another Entrepreneur article, “Whip Up a Hot Kids’ Cooking Business“, cites a growing interest in cooking classes among today’s youth.

Americans’ interest in cooking has drizzled down to the nation’s kids. From cooking classes and kits to full-fledged cooking parties, this still-hot category even includes kids’ cookbooks in the recipe for success.

It doesn’t point to Top Chef, Hell’s Kitchen, or even the Food Network as influences. But it makes me wonder. Also: has American Idol increased the sales of karaoke machines or customers to karaoke bars?

Goodbye 30-second commercial spot, hello 60-minute TV show!

The Pageview is Dead

Here Lies the Page View 1994-2010 Last December, ComScore reported that someone finally topped Yahoo! (YHOO) in pageviews. It was News Corp’s (NWS) MySpace.

This seemed like big news at the time. “Oh my goodness! Someone beat Yahoo!” Unfortunately, a poor metric was glamourized: the pageview.

David Dueblin at On Tokyo Time amusingly writes:

The page view metric (PV) is already dead! Not everyone got the memo though…

The pageview was important because it gave Internet advertising companies a way to measure the number of users as a means to price their advertising placements. They used it like newspapers and magazines used subscriptions. In the past, this was effective.

The adoption of modern web browsers, however, has changed the game. And advertisers either don’t realize this, or have known it all along (perhaps as far back as late 2005) but didn’t want to tell anyone. Steve Rubel of Micro Persuasian suggests that some advertisers may not want a more accurate metric either:

This is a dirty little secret in the advertising business that no one wants to talk about. Media companies love to promote how many page views their properties get. They’ve used the data to build equity. They will fight it tooth and nail to protect it, perhaps by not embracing interactive technologies as quickly as they should. But that’s not going to stop the revolution from coming.

Modern web browsers have given us the ability to change a piece of a web page without reloading the entire page. This is more popularly known as Ajax. And this technique effectively makes the pageview obsolete. How? Mike Davidson explains it well:

This would be the flow in a, say, Google-engineered network experience:

1. Click over to “GoogSpace”, or whatever we want to call it. (+1 page view)
2. Click through to read and reply to all mail (0)
3. Visit a few friends’ pages (+3)
4. Edit my profile page (+1)

That’s about 5 registered page views. The rest of the interaction comes from XML/HTTP requests.

Here’s the same sequence on MySpace:

1. Click over to MySpace. (+1 page view)
2. Log in, because MySpace doesn’t remember logins very well. (+2)
3. Click through to read and reply to all mail… about three per mail. (+21)
4. Visit a few friends’ pages. (+3)
5. Reload a few pages because of server errors. (+3)
5. Edit my profile page. (+10)

That’s about 40 registered page views… and it’s not an atypical pattern at all, from what I’ve found. Many people have also mentioned that web-based IM generates a ton of clicks for them as well.

In other words: the stuff on your page can dramatically change without having to load a whole new page. Since your page doesn’t change, it doesn’t technically count as a pageview. And if you can’t count it as a pageview, what can you count? What’s a better metric?

Evan Williams of Evhead answers with: “It depends.”

If you’re talking about what’s important to pay attention to on your own site, you have to determine what your primary success criteria are and measure that as best you can. For some sites, that could be subscribers, or paying users, or revenue, or widgets deployed, or files uploaded, or what have you. It may even be pageviews.

Here’s a summary all the metrics I’ve seen used at Internet companies or mentioned elsewhere:

Number of signed-in active users (as opposed to number of user accounts)
Number of repeat unique visitors (tracked by cookies)
Number of relevant actions (for YouTube, it could be number of videos viewed per user)
Number of clicks made (Ryan Stewart of The Universal Desktop calls this the “interaction rate“)
Number of feed subscribers (though this wouldn’t measure visitors to your site)
Time spent (this can be artifically inflated, however)

I agree with Williams. It depends. The best metric is the one that’s relevant for your application and/or market. In some cases, advertisers are going to care more about the number of active users in your system. In other cases, the number of relevant actions & clicks made.

The pageview is dead. Long live the pageview.

What if Yahoo! had purchased Google?

Yahoo + Google Fred Vogelstein published an article in Wired last week entitled “How Yahoo Blew It.” It’s gotten a bit of buzz in the blogosphere since then.

The article discusses Yahoo!’s (YHOO) potential purchase of Google (GOOG) in the summer of 2002. (Disclosure: I’m a Yahoo! employee and shareholder.)

It made me wonder. What if Yahoo! really had purchased Google back then?

In Terry’s Shoes

Before we get there, let’s first re-examine Terry Semel’s decision. Put yourself in his shoes. It’s the summer of 2002. The dot-com had dot-bombed. Lots of Internet companies had gone or were going out of business. Even you had to lay off some of your employees last year.

But this year, your finances are improving. You’ve raised your free cash flow to rougly $220 million. Your market cap is about $10 billion. The next step for Yahoo! is to purchase some competent search and search advertising technology, since Google and Overture are proving that these business models work.

So you make a pitch to Google for $3 billion dollars. It’s a lot for you, but you figure it’s a fair sum. They turn it down. So then you make a pitch for Inktomi and Overture for a combined total of about $1.6 billion. They accept. At that price, it feels like you’ve gotten a great bargain!

In Terry’s defense, he made what he thought were smart business decisions. I don’t know if many others would have made different decisions back then.

Yahoo! + Google

Now let’s say Google accepted the $3 billion. Yahoo! gains search and search advertising technology. The search advertising market grows exponentially and Yahoo’s stock soars. Maybe not at the levels Google reached, but it’s an impressive climb.

The integration with Google is relatively easy. Any software engineer will tell you that massive integration projects rise in complexity with the number of integration points. Inktomi and Overture would have been two integration points. Google is only one.

(This is just a gross generalization, of course, but from a high level, it probably would have been easier to integrate Google than Inktomi and Overture.)

The search market now consists of Yahoo!, Microsoft (MSFT), and AOL (TWX). The press cries that it’s Yahoo! vs Microsoft. MSN enters desktop search immediately, followed by a late entry into the search advertising market when Ray Ozzie climbs on board.

Yahoo!, on the other hand, doesn’t provide any major updates to Yahoo! Maps or Yahoo! Mail, at least not in the way that it has now. Without the threats of Google Maps and Gmail, Yahoo! doesn’t push into the rich internet application space as quickly. Also, the mash-up phenomenon is birthed from start-ups, instead of Google Maps.

So while Yahoo! is making all of its shareholders happy as clams, it doesn’t innovate its web products as much. Instead, it turns around and fights Microsoft in the desktop and device markets. The press heralds this as a smart move; Yahoo! has dominated the web products world, so now it must contend with Microsoft in desktops and devices.

Competition Makes One Stronger

The lack of a formidable competitor generally means a company doesn’t fight as hard. That’s not to say Yahoo! wouldn’t have continued to evolve its web products, but it might not have evolved as aggressively. Ironically, many of Yahoo!’s products may have become better because of Google.

Does this mean Terry Semel made the right decision? Well, I think he made the rational decision at the time. It’s the relatively slower integration of Overture that hurt Yahoo!, not the presence of Google in the market.