BloGiza

Surfing on a Wave of Marketing Problems

Over the last couple of weeks, nearly everyone in my social network who has any connection to the tech world has begged (sometimes desperately) for an invite to Google Wave. This is reminiscent to the kind of excitement that GOOG managed to generate a few years back when it first started handing out invites to Gmail, but greatly balloon-ified.

Going by the hype being generated, it seems clear that Wave is destined to become the next big online thing.

Or is it?

I’m not entirely certain. (Full disclosure at this point: I am one of the sad proles still waiting to try out Wave. The opinions contained herein are based not on what Wave is, but what it appears to be, which is just as crucial).

Google has launched and killed more than its fair share of applications and services over the years without too many issues. But I think what we’re seeing here, at least in the short run, is the company’s first high-profile product marketing flop.

There are a couple of reasons IMHO:

1. Overselling the undefined - For all the techheads desperate to play with the shiny new toy out of Mountain View, I’m not sure how many would be able to describe what Wave actually is in two sentences or less. Google has done a pretty bad job explaining it so far.

Take the lengthy accompanying video (see above). It paints the new technology as an amalgamation of all the online communications tools available today, but redesigned to fit the needs of the 21st century. From this has arisen much talk that Wave is the ultimate email/blogging/chatting/Twitter/whatever killer.

The reality of the matter is a bit more prosaic. The main use case appears to be online collaboration. But collaboration tools are not mainstream consumer applications. So does this mean that Wave is more for businesses? And if not, then what can regular people do with it better than what they can do with email/chat/Twitter/whatever?

I would imagine that all these issues will become a lot clearer once Wave starts growing its user base. But in the meantime there will be a lot of disappointed people thinking they are going to get some nebulous-but-nonetheless-super-nifty Thing A and instead get Thing B which doesn’t suit their needs.

2. Rollout tripping on early buzz – At the moment, not a lot of people have gotten their paws on Wave. This is unsurprising, seeing how Google is rolling it out slooooowly in order to ensure proper scalability and stability.

However, many among the lucky few who have used Wave are less than thrilled with it. Most notably Robert Scoble, who wrote a sharply worded entry on his first impressions. Scoble paints Wave as being both cluttered and a productivity timesink.

Scoble is joined by numerous other early adaptors in talking down the new product. And this combination of slow rollout + negative early publicity gives potential Wave users plenty of time to read the rotten reviews without trying out the application for themselves. Not the optimal combination from a marketing perspective.

3. Privacy issues – Even assuming that Wave manages to overcome the above problems, it is still likely to run into a number of other thorny issues, primarily in the realm of privacy. On the one hand, the collaborative nature of the application allows anyone to see what you are writing in real time, which I suspect will turn a lot of people off.

Then there are the continued questions of just how much of our personal and business information Google has access to. Wave will only make the debate thornier.

None of this leads me to conclude that Wave is heading into the land of epic fail. Google has enough money and enough time to fix all but the most horrifying mistakes. However, for a company that has managed to become the Web’s reigning monster without too much vocal opposition, this is an uncharacteristically high-profile boo boo.

Bridging the “Why Hasn’t It Happened?” gap

Last week, I had the pleasure of attending a talk given by New Media guru Mitch Oscar, who is in charge of televisual applications at the global media agency MPG. (Props to AdsVantage for organizing the event).

In his presentation, Mitch focused on how the world of interactive TV is taking shape. Interactive TV is part of the general media industry which is comprised, as it has been always, of three major components: content producers who create the content, advertisers who essentially fund the content, and distribution platforms which bring the content to the end users.

The biggest changes over the last decade have come primarily on the side of the distribution platforms. Where once there were basically two distribution mechanisms (network TV and radio) today there are nearly 20 different and sometimes complementary platforms with which users encounter content. This includes everything from digital television to satellite radio and includes the set-top boxes and interactive episode guides that power the experience.

The explosion in distribution has fragmented the industry and created internal media silos. Different media agencies and content creators deal with different distribution platforms in different regions. Each one has a different piece of the puzzle, but no one is able to put it together from above.

The lack of communication between the different silos has been one of the key factors keeping New Media (or interactive TV or whatever term you want to give it) from achieving what should be nearly boundless economic and cultural potential.

In this way, interactive TV is a lot like mobile Internet: it should be much bigger than it actually is. You have the technology to drive new media consumption experiences (be it on handhelds, on the Web, or on the TV in your living room); you have what appears to be a critical mass of users receptive to consuming media in new ways; and you have the advertisers who are receptive to the new media and distribution types.

Yet everything remains mired in what I like to call the “Why Hasn’t It Happened?” gap.

Ad spend is still overwhelmingly directed to old media channels, primarily broadcast television and radio. New Media avenues (for example Hulu) remain a kind of sideshow with the relatively small ad budgets to show for it.

There appears to be a missing link here between the situation as it is and the situation that technology makes possible. In order for things to change in a meaningful way, content creators and advertisers will need the ability to provide what Mitch calls a “360 degree experience” based on the consumer and not the device

Interestingly, the key obstacles are less technological than they are worldview-related. Or, more to the point, they are technological but a lot less on the distribution side than one would expect. The real issue is how to provide a unified experience across multiple device types but done in a manner that the advertising agencies are used to dealing with.

Some of the key issues that need to be resolved:

• Measurability – getting reliable data across different platform types. This is a lot more non-trivial than you’d imagine. To give one banal example: When measuring television viewing, do you measure each separate set-top box in a household or the household itself?
• Standardization – This involves everything from standardized ad formats to the definitions of measurable ad spend units. For example: how do you translate a CPM model to interactive TV?
• Addressability – This is the holy grail of advertising, involving as it does the delivery of the right targeted ad to the right person at the right time.

All these issues, by the by, while not necessarily the most sexy part of the high tech world, present huge opportunities for the startups that can crack the code. From the investor side, IMHO this will be one of the most interesting sub-sectors of the overall Internet industry in the next few years.

Internet is Fun!

Another one out of the gate!

This week marks the official public launch of a second Giza Ofek Program company. This time around, the company is Viral Gurus who have opened their site to the big wide Internet.

Viral Gurus operates a site called Internet Is Fun. The name is pretty descriptive: Internet is Fun provides you the user with a new way to share all those interesting video clips, slide presentations, jokes, sound files, and other fun stuff that you normally get via email.

Internet is Fun still allows you to email these things to your friends and acquaintances. But it also adds a couple of new and useful functions. For instance the service allows you to:

• Have a discussion with your friends about a specific item - Does that YouTube video you got remind you of Haim in accounting? You probably won't leave a comment to that effect on YouTube, but you can here where it's relevant
• See how an item got to you and how it spread once you forwarded it - Internet is Fun tracks the viral spread of each item. You can see the chain of friends that led the item to your doorstep. More interestingly, you can see how an item spread out once you forwarded it. You send it to 10 friends and two weeks later more than 2000 people have seen it - cool!
• Collect all your fun items in one place - Internet is Fun automatically saves all the items you upload and forward to your own personal, customizable page, your "funblog". (This is like what Tumblr and similar microblogging sites enable you to do).

The site is open to everyone. You can check out my own funblog here. Feel free to friend me and let the fun begin.

Google Buys Doubleclick

Goog, as though looking to disprove once again the notion that they only do small purchases, has dropped another bomb on the biz-tech world. This time, we're talking about yesterday's announcement that Sergey and Larry are buying DoubleClick for $3.1B.

Some thoughts:

• DoubleClick is probably the major player in the CPM/ad serving space. Watching it getting gobbled up by Google is kind of like watching a whale swallow up a somewhat smaller whale.
  
• The deal is a whopper any which way you look at it. Goog is paying out $3.1 billion in cash for a company that two years ago was taken private for $1.1 billion and which had revenues of $300M last year. Either way, this is a huge premium, especially for a mature company like DoubleClick.
  
• I think by now we can all stop thinking about Google as a search engine company and start thinking about it as the world's biggest advertising machine. Google is king of the CPC/text ads space; acquiring DoubleClick gives them a huge presence in the CPM space assuming that they manage to digest the new company without cannibalizing their existing revenue streams
  
• The mega-valuation came about in part because Microsoft was also looking to buy DoubleClick. Google was able to outspend Gates & Co big time. Which means that Google has now officially taken over the title of the Borg of the new millenium.

A Man, a Plan, a Canal...

It's now been two months since Yahoo! unveiled their new search marketing program, the one known as Panama and something like two weeks since they started rolling the thing out. After having Google eat its lunch for the past couple of years with everything related to textual and search advertising, Yahoo! hopes that Panama will be a worthy competitor to Goog's Adwords in the text advertising space.

The new program bases its ad rankings not only on the money bid for the specific keyword(s) but also takes into account the potential click-through rate for the ad. The idea being that the new system will maximize ad revenues per ad.

I've been waiting to see how the rollout will affect Yahoo's fortunes. I have a soft spot in my heart for the perennial #2 of the Internet world. The big question is whether Panama will be enough to turn Yahoo's stock around, especially compared with Google. (Business Week seems to think no, Arrington hopes yes).

I subscribe to the school of thought that Panama will be good for everyone. More choices should mean more advertising dollars will migrate online.

Has anyone out there started using the new system? Any comments to share?