Insider Chatter by Donna Bogatin

Are VideoEgg’s ears ringing? Just days ago, VideoEggg rocked Manhattan’s Times Square with the message that IT’S THE ONLINE ENGAGEMENT METRIC, STUPID, at its sponsored affair designed to spur Madison Avenue agency interest in VideoEgg’s new pay for engagement performance ad offering.

Today, Microsoft declares–via three short on details PR paragraphs–a “new reporting standard” for digital campaign performance dubbed “engagement mapping.” Will VideoEgg feel one-upped? Unlikely, Microsoft signed on as the flagship VideoEgg “engagement” debut advertiser!

Engagement is expensive, though, as the VideoEgg “Engaement Debate” host, CMO Troy Young, reiterated at the Hard Rock Cafe last week, via a rolling overhead message. Microsoft ought to know! Redmond is paying “under” 50 cents per “view,” according to Universal McAnn, as cited by AdWeek via VideoEgg.

Talk about CPMs! How about “under” $500 for 1000 “views.” What exactly is a view, though? Engagement is not only expensive, it is ambiguous!

Advertisers pay on an “engagement” basis – that is when a user rolls over the ad and the advertiser’s full screen creative is displayed.

It doesn’t SOUND very engaging! How engaged are prolific Web multi-taskers, after all?

The allmighty Google click isn’t all it is cracked up to be either, though! SEE my VideoEgg report: MySpace To Google (Round 2): Text Clicks Do NOT Rule! VideoEgg Report

Bottom advertiser ROI line? Savvy, deep pocketed brand advetisers will continue to conduct their own, proprietary econometric modeling to ensure that every single penny they disperse on Web advertising–regardless of mechanism or venue–yields measurable contibution to sales of product, as CPG advertiser Bayer Healthcare underscored repeatedly at the VideoEgg conference.

Bottom brand advertising line for the Web’s front runner? Top tier marketers are not swayed by any media platform’s noble talk of “accountabiltiy,” including Google speak. The only accounting Bayer relies on, for example, is its own.

MORE: VideoEgg Rocks: Debuts AdFrames in Silicon Alley: Google Next?

ALSO:  MySpace On Google: Sorry, ‘NO Truth’ To $900 Million Rumors and Facebook Meltdown: Is Twitter Next? and FriendFeed: Got Google Millions? Who Needs Revenues! and Google vs. Microsoft: The REAL Health Platform War Story

PLUS: Why Obsession is GOOD for Startups, and Microsoft

CONTACT DONNA BOGATIN 

Thw Wall Street Journal claims the richest man in the world scaling back on his “social graph” usage is ”the most damning indictment of ”social networking technology.” REALLY? Bill Gates is also scaling back on what he does at the company he founded, Microsoft: Any personal computer technology “indictment” there?

There was a Facebook indictment yesterday, it came form MySpace. Arnie Gullov-Singh, VP Product Mangement, Fox Interactive Media, had his competitive “social networking technology” fun at the OMMA Behavioral conference in New York City, at the expense of Facebook, as I present in MySpace to Facebook: NO ‘Reach, Relevancy, Results’! OMMA Report.

I asked Gullov-Sing about the future prospects for MySpace advertising, both in-house prime and the lower grade, out sourced Google variety. My question to panelist Gullov-Singh:

I appreciate your calling Facebook a “competitor”; Mark Zuckerberg refuses to return the favor. 

In any event, do social networks risk becoming too popular for their own good? As user generated content grows like a weed, what will be the impact on ad quality and pricing? Will users be subjected to more “punch the monkey” ads?

Gullov-Sing avoided the seemingly undeniable inventory glut issue, hailing MySpace is popular among advertisers and its CPMS are doing just fine, while offering no hard data to support his contentions.

After the panel, I sought specifics from Gullov-Sing and pointed out that MySpace partner Google itself lamented MySpace ad quality and pricing, in an indirect dig during its Wall Street conference call.

Gullov-Sing told me that there are a lot of reasons for Google not doing well at MySpace. I suggested to Gullov-Sing that perhaps MySpace is not providing necessasry internal MySpace data to Google so it is best able to optimize.

Gullov-Sing indicated to me that Google doesn’t understand the sales process and thinks technology is the answer to everything.

If Google really did learn how to sell advertising like the rest of the media world, though, would its MySpace performance really improve? After all, MySpace has its direct hands on the “good” MySpace ads goods, while Google is an outside ad serving player, playing around with runnerup inventory.

MySpace inventory distribution appears to match the industry standard put forth at the OMMA conference by Peter Horan. The CEO of IAC Media & Advertising said a sites’ advertising is generally about half direct-sale, premium ad inventory and half of lower quality, resold by aggregators.

I have been questioning the quality and “salability” of MySpace’s inventory available to Google since the $900 million deal was announced in 2006 during a joint Fox Interactive Media and Google conference call.

Fox Interactive has continued to retain exclusive rights to directly sell its most desirable, and most lucrative, display advertising to Fortune 500 advertisers. In addition to Google being exclusive search and keyword targeted advertising sales provider, the agreement has provided for Google to have an option on My Space’s unsold, “remnant” display advertising: a “right of first refusal on display advertising sold through third parties on Fox Interactive Media’s network.”

Google CEO Eric Schmidt was well aware of the MySpace monetization challenge when he made a long term, expensive pledge to MySpace, but believed the vaunted Googley technology would prevail. Schmidt in 2006:

“We are not going to cover MySpace with ads,” he said, noting that Google carefully analyzes what sort of ads encourage users to click on what sort of pages to produce the most revenue. “It turns out the right answer is to show fewer, better ads.” (NYT)

It turns out, though, that Schmidt’s Google did NOT, and still does not, have the right MySpace answer, demeuring now that Google is “still in the learning stages of how it monetizes social networking”:

We have had a challenge in Q4 with social networking inventory as a whole and some of the monetization work we were doing there didn’t pan out as well as we had hoped. But we are continuing the efforts and we are still optimistic about future quarters.

MySpace, on the other hand, is optimistic about the present! 

PLUS: MySpace To Google (Round 2): Text Clicks Do NOT Rule! VideoEgg Report

MORE: MOBILE Visions? Microsoft, Yahoo, AOL Open Up: NOT Google! OMMA Report and Henry Blodget Tech Ticker Puts Yahoo Finance at SEC Risk and LinkedIn Preps Spy Network: Is YOUR Company Safe?

CONTACT DONNA BOGATIN

Publicis CEO Maurice Levy undoubtedly believes he has obtained a competitive coup in obtaining the friendship of Google CEO Eric Schmidt: In typical Googley “partner” fashion, all hail King Google and its beneficence:

Mr. Levy said the goal is to create a “triple-win” — not just a win-win — situation. “Our clients win, the platform Google wins and the ad industry/Publicis wins. We’re bringing Google our knowledge of advertising communications, consumers and client needs. They’re bringing us knowledge of technology and the world of the web.”

BUT, in REAL typical Google fashion, it is actually $200 billion market cap Google that wins the most.

What is the big, bad Google-Publcis “initiative”?  Google shrewdly continues its worldwide mission of putting the burden of selling more Google ads on other more than willing companies!

Yesterday, Spot Runner. SEE my story: Spot Runner Sells For Rival Google: Local SEM Bandwagon Grows

Today, Publicis, which will be “using Google staff and materials for training programs.” What’s more, Google “has established a dedicated global account team for Publicis Groupe.” YAY? More Google ads for Publicis clients!

Publicis will undoubtedly spin Google ad sales to its accounts by touting a singular, competition trumping, exclusive knowledge of Google AdWords. Savvy Publicis clients, however, will know that Google reveals nothing to anyone–not even resellers–about the black box GOOG fuel that is the pride of Wall Street. After all, Google can only promise “no ceiling to monetization,” if it steadfastly maintains its Google-centric, non-transparent, advertisers always bid up their own rate cards for the greater Google good, AdWords blind auction “democracy” sham.

Savvy search engine advertising agency specialists understand all to well that Google NEVER allows for an actual win-win-win SEM game, as Aaron Goldman, VP, Marketing & Strategic Partnerships, Resolution Media of Omnicom Media, discussed yesterday at the Digital Media Measurement conference in New York City.

Goldman echoed what I have been consistently presenting here at Insider Chatter: Google’s win-win-win spiel is but a convenient user-friendly cover for an impenetrable Google pricing scheme that leaves advertisers in a perpetual Google-centric cloud, fretting over Google’s undecipherable ”quality” calculations and Google’s GOOG monetization comes first blind bidding machinations.

I asked Goldman if advertisers will soon wise up and demand that Google not only treat them with the respect which ought to be due from a media platform soliciting business from them, but also call Google’s “transparency” bluff and allocate their ad dollars elsewhere, unless Google ceases to fuel its oversized proifit margins at the expense of marketers’ and agencies’ own shareholders’ backs.

The Google bandwagon is in no apparent immediate danger.

SEE: Yellow Pages Get Reprieve? The Myth of King Google Local Advertising ROI

MORE: Reach Local Advertising? How Google Squeezes SEMs and AdWords Buyers and
Local Ad Sales War: Why Google is a Guaranteed Winner and
Google AdWords Plus Box: Local CPC Bidding War Unleashed! and
Google Apps & Maps: Enterprise and Local Business STILL Missing and
Local Advertising Online: SMEs Hold the Billion Dollar Keys, ILM ANALYSIS and
Google Zeitgeist: $200 University Payola AdWords Scam and
How Google AdSense FAILS Better Business Bureau and
Frugal Google.org: How NOT To Save the World On $159,000 a Day

PLUS: Facebook To Particls: What IS Your Data Portability End Game?

CONTACT DONNA BOGATIN

The Scrabulous Facebook games are heating up.

Last week, I broke the news that Zynga is at Facebook risk too. SEE my January 16, 2008 story: Scrabulous At Risk? Zynga $10 million VC Game: Facebook Roulette

Is Fred Wilson being too casual with Union Square Ventures’ money I asked? After all, the USV backed Zynga’s all-in bet on Facebook could blow up in smoke! Just ask Scrabulous, I underscored.

Now, six days later, Erick Schonfeld, Michael TechCrunch Arrington’s lieutenant, also wonders “Is Zynga next”? Wonder how he started to wonder that???

While now jumping on the Zynga at risk boat, though, Schonfeld misses the Zynga boat. TechCrunch rattles off some of the high-powered Zynga investors, but neglects to  make the crucial connection as I did last Wednesday: Crossover shareholder dreams!

Zynga believes it is NOT Scrabulous, claiming to have immunized itself from game infringement claims by scrambling its game names. What’s more, though, the high-powered Zynga investors are also Facebook investors: founder Mark Pincus himself, Peter Thiel, Reid Hoffman…

AND, didn’t we learn from the Associated Press yesterday that anything Angel Reid Hoffman touches turns to gold!!! Zynga and $10 million VC team undoubtedly believe they have powerful, incestuous secret Facebook weapons at their disposal, their own lucky Facebook charms.

As Mark Zuckerberg reminded Lesley Stahl, he has plenty of competent lawyers at his $15 billion disposal.

Schonfeld really gets it wrong though when he gives startup “advice” to would be future F8 game developers, hailing that “social networks have been a boon for casual gaming online,” so game on, with a license.

SORRY, Erick, a licensed game only mitigates one of the two double-whammy Facebook risks that a “cool app” such as Scrabulous engenders, as I underscored last Wednesday.

Web 2.0 VC standard bearers are throwing $10 million Zynga Facebook caution to the wind and heeding the “Internet court jester”’s advice to “Throw out your development, go use Facebook.” WHY, though? Because “It doesn’t matter if you are “better,” what matters is that you are “standard,” Esther Dyson gushed about Zuckerberg’s F8 upon its unveiling to the world.

BUT, is piggybacking on someone else’s property REALLY a bankable business model, I asked last week. WELL, who even needs a solid business model after all, at the time of a Web 2.0 investment, as we are repeatedly reminded by blogger VCs.

The Scrabulous team is piggybacking on the businesses of TWO other businesses: Scrabble and Facebook. ANY and ALL F8 third-party games play at the fickle mercy of Mark Zuckerberg, a young man fond of having his high-priced legal tgam whip up some high-powered terms of service:

We do our absolute best to keep Facebook Platform up and bug-free, but you use it at your own risk.

You must get signoff from us before releasing any formal press releases.

We reserve the right to charge a fee for using Facebook Platform and/or any individual features thereof at any time in our sole discretion.

Facebook may be independently creating Applications, content and other products or services that may be similar to your Facebook Platform Applications.

SEE: AP On LinkedIn: Social Networking Gold Mine at $5 per User?

MORE ON ZUCKERBERG’S STAR 60 MINUTES TURN: Mark Zuckerberg Confirms: Facebook is NO Google Killer

ALSO: Facebook Davos PR Blitz: Beware Scoble Hype, Users Still at BIG Risk

CONTACT DONNA BOGATIN

Spot Runner has acquired GlobeShooter videographers network, continuing to strengthen a portfolio for competing against Google. At the same time, however, Spot Runner is selling up a storm on behalf of arch rival Google.  

Is $200 billion market cap Internet juggernaut Google a direct competitor to startup Spot Runner, a Web-based television advertising production and media buying venture? I asked Nick Grouf, CEO, Spot Runner, just that almost one year ago. Grouf responded with a resounding “You got it.”

I chatted with Grouf on the heels of Google’s public acknowledgement that it is “running a small, early phase trial” of a cable TV ad delivery system last year. The Spot Runner claim to fame is: “the first Internet-based ad agency that makes it easy and affordable for local businesses to advertise on TV.”  Not surprisingly, SpotRunner did not welcome the Google television advertising initiative.

Grouf’s public reaction to the Google announcement of its entry into television advertising was to warn consumers of a nefarious Googleplex:

“Watching people watching TV,” is how Grouf characterized the prospective Google targeted TV advertising platform to me. Google will seek to leverage knowledge of viewership habits, Grouf believes, by using set-top box data collected without explicit consent of subscribers to “target ads according to the viewer.” Google’s end-game? Manipulate viewer data to sell ads at a higher price, Grouf indicated to me.

Interesting then that Grouf’s Spot Runner is now a proud seller of Google products, even as Spot Runner widens its sphere of operations with Google looming ever larger as the key competitor to beat. Spot Runner nevertheless has joined the ever growing ranks of would be Google killers that do their darndest to help Google’s core business grow ever unstoppable!

Spot Runner’s general ambitions are Googley indeed:

Revolutionize the way advertising is created, targeted, bought and sold, focusing on automating many of the more inefficient aspects of the advertising process and creating turnkey ways for busineses of all sizes to access creative and media planning and buying services.

Spot Runner even wants to help with buying Google services! Want a Search Ad with your TV ad?

Let the Spot Runner Search experts focus on the complexities of search advertising so you can focus on running your business.

In other words, let Spot Runner drive more business to Google AdWords! Why not, every one else wants to do it too! SEE: Yellow Pages Get Reprieve? The Myth of King Google Local Advertising ROI

MORE: Reach Local Advertising? How Google Squeezes SEMs and AdWords Buyers and
Local Ad Sales War: Why Google is a Guaranteed Winner and
Google AdWords Plus Box: Local CPC Bidding War Unleashed! and
Google Apps & Maps: Enterprise and Local Business STILL Missing and
Local Advertising Online: SMEs Hold the Billion Dollar Keys, ILM ANALYSIS and
Google Zeitgeist: $200 University Payola AdWords Scam and
How Google AdSense FAILS Better Business Bureau and
Frugal Google.org: How NOT To Save the World On $159,000 a Day

ALSO: Why Zynga, NOT Scrabulous, Has a Lucky Facebook Charm

CONTACT DONNA BOGATIN

If the MySpace rasion d’etre is to promote the unfettered creation of user-generated content, wouldn’t advertisers be missing out on the real MySpace experience if they advertise against “non” MySpace content. Moreover, do MySpace friends even visit the “non” MySpace protected areas in MySpace?, I asked John Trimble, SVP Branded Sales, FOX Interactive Media, in the Fall of 2006. Trimble made a “protected area” brand sales pitch at an IAB Summit, asserting that MySpace is where the “sizzle” is and putting the “best” MySpace face forward, a sanitized one.

Fifteen months later, as MySpace plows ahead with its safe, “non” MySpace “mainstream,” content agenda, The New York Times now also wonders if News corp.’s crossover dreams are compatible with the desires of Tom Anderson’s 221,416,999 friends: 

The original content may draw advertisers who are wary of placing a marketing message next to a messy profile page, but it is unclear whether the users who make MySpace the most-viewed Web site in America will want to watch TV episodes and chat with friends on the same site.

The MySpace nemesis, Facebook, believes it has accomplished an integrated social network brand advertising coup, by using Facebook users, often unbeknownst to the users themselves, as smiling product spokespeople in high-quality brand ads on users’ “friends’” Facebook profiles.

What about Multiply.com, a site launched almost four years ago, which “effectively defined the new field of social communications,” according to founder and CEO Peter Pezaris?

Multiply.com obtained a $16.6 million Series B round of venture capital financing last fall and I chatted with Pezaris and David Scott Carlick, the Vantage Point Venture Partners Managing Director which joined the Multipy board as part of the firm’s investment.

Pezaris and company continue to put forth a strong value proposition for users, but what about for high quality brand advertisers that are essential for the success of Multiply’s traditional media monetization model? 

Carlick told me in September he looks to Multiply–and all the social neworking players–to further educate brand advertisers about the under utilized power of reaching consumers in new, peer-to-peer environments where the users create all the content. Multiply sported Google AdSense, but Carlick derided it as “backfill” which does not enhance user experience. Both Carlick and Pezaris indicated to me they envisage a Multiply monetized by high quality brand advertisers seeking to directly engage with real people as they interact with friends and family in their own personal online spaces.

MySpace and Facebook are apparently succeeding in educating brands about the real power of real people.  

Where does Multiply stand four months later on its drive for higher CPM, brand advertising? Pezaris’ own Multiply profile page sports low CPM style banner ads for the likes of ringtones and domain name sales AND “backfill” Google AdSense.

Pezaris is now touting “numerous changes to Multiply with a focus on site optimization, such as an Ajax based interface for browsing therough photos within an album.”

Pezaris is particularly proud of his focus on the Multiply user experience, come what may. The Multiply CEO told me:

One side effect of this change is that we are knowingly deflating our page view numbers and ratings and rankings. Unlike other social networking and media sites that are primarily focused on numbers for the sake of a quick sell out, we are in this for the long haul and user experience continues to be our number one product development priority!

Which social networking sites are looking for a “quick sell out”? MySpace is long sold and Facebook is not for sale, we hear time and time again. BUT, what about Multiply.com, really?

What is the real end game time table for Pezaris and Multiply investors? How/where/when does the real money kick-in for the Multiply.com business model? Multiply does not have the levels of traffic or brand recognition that MySpace and Facebook enjoy.

How long will investors continue to fund Multiply.com? Will Multiply soon be looking for a “quick” way out?

ALSO: Multiply.com Raises Consumer Media Stakes AND $16.6 million VC: INTERVIEW and Lending Club $108 billion Market Opp ex Facebook: Goodbye Banks! EXCLUSIVE INTERVIEW

PLUS: Scrabulous At Risk? Zynga $10 million VC Game: Facebook Roulette and AP On LinkedIn: Social Networking Gold Mine at $5 per User? and Why Zynga, NOT Scrabulous, Has a Lucky Facebook Charm and Facebook Davos PR Blitz: Beware Scoble Hype, Users Still at BIG Risk

CONTACT DONNA BOGATIN