Blindspot/Strategy

Another blindspot: advertising-based services

Posted on by charlie

Being a FOG (Follower of Guy) for many years now, I now get daily doses of his wisdom on a regular basis. A recent post on his website stats has a few great gems in it, but one comment on click-thru advertising was enough for me to launch on another Blindspot rant.

Advertising is not the panacea for free services that everyone makes it out to be.

First of all, people act like Google invented the tools for advertising supported websites. Uh, anyone remember ad banners, pop-ups, and other regular advertising channels on websites?

Second (see Guy’s quote below), click-thru metrics only pay significantly if you have enough traffic, say Google’s or Yahoo’s. Sure, some sites are making some chump change with AdSense, no problems there, but don’t try to build a company on it (or a company of more than one person). I’ve been saying that for some time now, and folks have been looking at me as if I was spouting heresy.

Here’s what Guy says, spot on with what I’ve been saying:

I spend about two hours per day on the blog, so I’m making about $5/hour. 🙂 Also, if any company comes to Garage and says that their business model is to generate a lot of page views and monetize it with Google AdSense, I’m going to be figuring that each page impression is worth $.001. For example, 10 million page impressions would yield $10,000/month. It’s not that hard to get 10 million page views in a month, right? 🙂 “We’ll generate a lot of traffic and monetize it with Google AdSense” is hereby labeled the 11th lie of entrepreneurs.

Third, if you want to run an advertising-supported service, study how the pros do it. No, don’t go looking on the Internet. Go to your nearest news kiosk. Print publications have been heavily advertising-supported
for a very long time (heck, there is no front page news on the main Helsinki rag, it’s always an ad). Practically all subscription magazines and
newspapers are advertising-based. And they have whole departments working to get advertising that brings in money, that is relevant is relevant to the publication, that is relevant to the reader. Not only is AdSense an automated system that is second best to targeted ads, but you have little control as to what it shows.

Fourth, who makes the money? Google AdSense users aggregate a huge number clicks that bring most of the money to Google, not to the users. Look at Guy’s stats again.

Mobile?

It wasn’t just Guy’s comment on AdSense that got me going, but MoMo Mike pointing out a comment on mobile advertising from the W3C’s Mobile Web Best Practices:

Developers of commercial web sites should note that different
commercial models are often at work when the Web is accessed from
Mobile devices as compared with desktop devices.

You betcha. When you open up a Web page on your PC, you have enough space not to care about those pesky links somewhere else on your screen. Also, your browsing experience really doesn’t take a hit, nor do you have to really pay for that advertising to be served to you.

Not so on the mobile, where space is precious, the environment is personal, time is critical, and cost is a sensitive subject.

Enough of the rant. Here are some positive suggestions.

Don’t think of advertising-supported services, as that will make you think of traditional advertising. Think ‘marketing-supported’ services and then you will start to think of other ways to have someone pay for your users’ free service. I think if you make clear the ‘cost’ to the user for using a free service is you channeling brands and such to them.

For example, a company could sponsor a Java game that would have the sponsor’s branding displayed in an integrated and unintrusive fashion.

Or, if you have a really cool local map client (uh, maybe Google Local Mobile). When you get the info on the venue in that nifty pop-up, there could be an ad or two. Maybe even a local ad.

Or, think of how your service could be a door to other better paying business, such as consulting or upgrades to paid service. Using a free service or content to drive sales at a store is quite common, that I won’t even list the sites that do this.*

So there

As you can tell, this is not just a blindspot I don’t understand, but something that I think really others have a blindspot to. I am like guy and shudder whenever anyone says they want to start a business based on AdSense. Heck, that’s NonSense.

 

*Well, this one, Treonauts, I think is nifty. It’s a blog that grew into much more. That’s how you give free stuff away to bring in folks long enough to have they leave some money behind. 🙂

The Narrative

Berners Lee opposes .mobi

Posted on by charlie

I guess I’m not the only one who thinks .mobi is a bad idea.

Link [Googirama]: .MOBI domains available – Berners Lee opposes

As reported on MEX, .MOBI has been around for almost six months as the new suffix for mobile/WAP sites.  The Register reported then  that the new domain names would start selling in early to mid 2006. We’re curious to see how fast this will take off given the fact that Tim Berners Lee ( so called creater of the world wide web) published a paper last year against the addition   of the .mobi TLD rasing issues of fairness, device independance and loss of web functionality.

The Narrative

The impact of the fixed broadband laws on mobile data

Posted on by charlie

There have been some recent rumblings in the fixed broadband space (see link to article below). For example, cable companies are no longer held to the same laws as DSL providers. Also, there has been at least one case, that was overruled, of a DSL provider blocking Skype calls.

Two things (of many) have got the broadband service providers worried: VoIP and bandwdth hogs. With VoIP, many service providers are thinking like our dear wireless carriers – it’s a service in my pipes and I should be able to charge for it. With the bandwidth hogs, it’s not much different, except it can hamstring companies like Google and Yahoo whose users and services make up a huge chunk of Web traffic. And it will only get worse with video and music consumption being more mainstream (and billable!).

Why is this of any import to our ‘little’ mobile world? Well, the rulings that might go against broadband providers might spill over to the data services of operators. For example, the US House Commerce Committee is thinking of passing a ruling on Net Neutrality, where, as I understand it, everyone has equal access to broadband connections, no preferential treatment, no negative restrictions, no blocking of ports or IP addresses only because of a market protectionism.

Well, a voice call is still a circuit-switched call and is regulated as that. But, mobile data services are part of the Net, so might those also fall under the Net Neutrality? Might that mean that if oprators allow access outside their systems and onto the open Net, they need to allow full access instead of the current, surreptitious (or threatened) port and IP blocking?

On the flip side, if the service providers get their way and can charge and extra fee for bandwidth hogs like Google, how will that impact further growth for mobile services?

Read the article and letme know what you think. It’s pretty good.

Link: At Stake: The Net as We Know It.

Google et al fear broadband carriers will tie up traffic with new tolls and controls. Ultimately, it could mean a world of Internet haves and have-nots

Strategy

Nick Desai from Juice Wireless gets it

Posted on by charlie

I found this interesting interview of Nick Desai from the mobile marketing company Juice Wireless (link below). This is a company to keep an eye on. Earlier I mentioned Juice Wireless and their JuiceCaster mobile media service.

In the interview, by Mobile Marketing Magazine, Nick makes a few comments that clearly shows that he gets the integration between Web and mobile.

Here’s one example he used:

Take Epicurious. It’s an online database of 18,000 recipes. So you find
the recipe that appeals to you, and then what would usually happen is
that you hit the ‘Print’ button, the recipe goes to your printer, and
when you’re in the grocery store two days later trying to get the
ingredients you need to make the meal, they are still sitting at home
on your printer. So we have created a mobile application called Epi To
Go which sends the recipe to your phone and creates a mobile web page
with the ingredients for all the recipes you have marked.*

And then he says later on:

It all comes back to the increasing reliance of people in the US on the
Internet to get through day-to-day life. This is what gives us the
opportunity to create these applications that integrate with the
Internet. [emphasis mine] The user interface on the phone is limited. People will always want a small, lightweight phone, so you will never
have a great keypad and screen. Those limitations will not go away, so
you have to look at how you combat them, and the way you do it is by
creating intelligent applications that seamlessly integrate with the
Net experience. You won’t search an 18,000-recipe database on your
phone. Where the phone comes into play is for the retrieval of the
data, and that’s what it is all about.

And then brings up another example of Web-mobile integration:

The pizza-ordering application is a similar idea. We are talking to one
of the four major pizza chains right now. No one will go through 14
toppings, large or extra large and all that on the phone, but if you
can enter your address and your typical order on your computer and then
1-click order from your phone on the way home, that’s great.

Link: Mobile Marketing Magazine: View from the States.

*I can see this Epi To Go doing some other cool stuff, like advertising the recipes at the store to make the reverse mobile to PC direction. Hmm.

 

UPDATE 30jul07: This post is 18 months old. Unfortunately, the only comments have been mostly negative ones of Nick Desai. This past month has been very busy with the bulk of the negative comments coming in. Something’s up, and I realized that I didn’t want to be a part of it. Since this last wave started, I’ve been wanting to close the comments, because I really don’t want this site to be a Nick-bashing site.

There will always be positive and negative comments on folks and I’ve seen all sorts of folks in this industry. But, I’m closing comments and asking folks to go elsewhere to continue this conversation around Nick Desai (which was not the original point of this article).