Friday, January 05, 2007

Finding Pain, and Creating Value.....

The best businesses solve problems.
Some of the issues that leading companies solve for their clients -- CREATES A MARKET unto itself.

The original business plan, most likely does not represent how the company evolves and dynamically embraces changes in the marketplace, as well as the client's business, pain points.

Some entreprenuers call this "opportunity."

One of the most fascinating things I have witnessed in the past 8 years (in my former role) as a participant in the growth of online advertising , is how people predict the coming year, and how they think the media will evolve.

More often than not, it has been writers of magazines, editors, and pundits who have scribed something akin to -- "My thoughts on the coming year."

It could be 2002, or 2007. It matters not.
Here a partial list of PREDICTIONS for 2007.

I give them to you, but they are difficult to read...(I try every year)

Why?

Because they mean NOTHING. No one predicted in 2001 that Google would rise up and become the largest media company in the world. No one could have envisioned that a company that was based on "Search" -- would DOMINANT, and capture somewhere between 15-25% of online money spent.

No one knew that a company called Intermix, would create the largest platform for internet "socialization" - and it would be acquired for half a billion dollars by NEWSCORP.

No one knew that AD NETWORKS would be as valued as they currently are.

One person, who is a FANTASTIC writer - has nailed what I believe is one of the largest opportunities in terms of PAIN, and addressing needs in MEDIA today.

Robert Young of GigaOM writes.....

"Social networks, and online communities in general, are terrible platforms for advertising formats designed for any type of call to action. As such, Google Adwords-type direct-response PPC ads have proven highly ineffective. On the contrary, the significant opportunity for social networks is to become highly-efficient branding vehicles. In fact, it is my prediction4 that social networks will prove themselves to be the most effective brand communication platforms on the Internet. "


Bingo. He hits on the very reason on WHY I started Lotame. It's about the DATA -- and effective use of highly specialized DATA points...thus, helping BRAND and DR marketers hit the VERY audience, and INDIVIDUALS they covet....in a place they are increasingly spending most of their time....

He continues:

"Given the extreme pressure to monetize with low CPMs, many of today’s social networks are way too cluttered with ads. Virtually every pageview that is generated carries an ad. This is highly wasteful and counterproductive, for both users and advertisers. Instead, improved methods of monetization yielding higher CPMs, must correspond with a reduction in the volume of ads. To some extent, old-fashioned artificial scarcity must be imposed on available ad inventory in order to achieve improved performance and satisfaction for all parties involved"

Scale and Data points for Social Media Publishers are KEY to generating higher profit and revenue in 2007. And, it all begins with segmenting and understanding their audiences, SO THAT THEY CAN TARGET MORE EFFECTIVELY.

Andrew Weissman writes...

"In other words, the advertiser intent or motivation (reach, response, etc.) becomes much less important, at least in terms of the publisher side of the equation. What increases in importance is the data provided to the advertiser. The middle opportunity can, in my opinion, be captured by providing rich, detailed and new levels of analytics. An advertiser may only care about reach, or unique users, for some campaigns, but for others might wants levels of segmentation that heretofore don't exist (but are being developed).

In other words, all that matters is data, and making that data relevant and actionable (and visible) (and even share-able).

Then, concepts like branding, DR or even page views fade in importance because an advertiser can take a data set (provided by a publisher, a network or a third party provider), analyze that data, mesh it with strategic or tactical objectives, and make an ad decision."


How critical is that?

"Someone will successfully fuse social networking and online advertising. If I am interested in some topic, like programming in Ruby, or Vespa scooters (along with thousands of like-minded others), then sponsoring an online watering hole for aficionados should make sense. But no one has cracked the code yet, except for the mega-sites like MySpace and Yahoo. This should be the area that traditional media companies would move into, if they had any sense."

- Stowe Boyd, Jan, 2, 2007

My thoughts for 2007 is simply this:

We will add value for our Social Media publishing clients by helping them MAKE MORE MONEY....and increase their value, WITHOUT HARMING THE USER EXPERIENCE inside of the community.

We will make social media work better in 2007 for advertisers, than in previous years.

We will focus on having the most comprehensive set of tools, to arm publishing clients -- so that the LOW CPM's they are charging today -- can DRASTICALLY INCREASE by working with LOTAME.

Why do I think this will come true over the next year?

There is "pain", and a need, amongst advertisers who WANT to use social media properties to target, and there are publishers, who want more money for their media.....

We create the VALUE for both.

And, through this opportunity -- create VALUE FOR US.

Rock on.

1 Comments:

Anonymous nate archer said...

well put!

9:41 PM  

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