Insider Chatter by Donna Bogatin

New York City is hailed (by proud New Yorkers such as myself) as the Capital of the World! BUT, does that include the Web 2.0 world? YES, if the current conference season is any indication!

I spent last Thursday and Friday discovering the “Future of Online Advertising” in the “gilded ballroom” of the historic Gotham Hall in midtown Manhattan.

See my extensive coverage of the conference.

Mayor Bloomberg even issued a proclamation declaring the week of June 4 “Online Advertising Week”:

Ever since S.M. Pettingill became the first agent to prepare his own advertisements–paving the way for the agencies that produce today’s creative commercials–NYC has been the world’s advertising capital. From newspaper ads in the 19th century to television and radio ads in the 20th, NY’s innovative minds have long embraced the latest media to connect consumers with products and services.

While the technology may change, events such as “The Future of Online Advertising”–along with our residents’ trademark hard work and creativeiy–will ensure that NYC remains at the forefront of this vital industry for many years to come.

(Photo of conference organizer Ryan Carson sharing the proclamation with attendees last week.)

June continues to be a banner Web conference month in NYC. Here is a taste of what is on tap:

WEB 2.0 MEETS MADISON AVENUE 2.0

Esther Dyson, Keynote
Shawn Gold, MySpace
Mike Dubin, Yahoo!
Jenny Mullen, Ogilvy One…

DM DAYS

Sandra Zorratti, IBM
Scott Delea, Digital Grit
Marc Barach, Ingenio,
Brian Zwit, AOL…

AUDIENCE MEASUREMENT 2.0

Tom Delaney, CBS
Pete Doe, Nielsen
Duncan Watts, Columbia
Debbie Myers, Taco Bell…

STAY TUNED TO INSIDER CHATTER FOR THE LATEST WEB CONFERENCE CHATTER, STRAIGHT FROM THE HEART OF THE BIG APPLE!

CONTACT DONNA BOGATIN

Greg Stuart no longer heads up the Interactive Advertising Bureau, but he is on an advertising mission nonetheless, a $295 billion one.

Stuart presented the keynote at the Future of Online Advertising conference in New York City last week and offered his perspective on how marketers can better optimize their ad spends in the future.

In other words, “What Sticks, Why Most Advertising Fails and How to Guarantee Yours Succeeds,” the latest Stuart book.

“What Sticks” puts $1 billlion in ad spend by 30 Fortune 200 companies to the “experimental design” test in order to “explain exactly how marketing and advertising works today,” all $295 billion worth.

Out of the $295 billion annual U.S. ad spend, over $112 is wasted, Stuart declared. Why? Problems can occur at any point within the marketing cycle: Motivation, messaging and/or media, Stuart indicated.

Stuart illustrated the importance of testing by using a “theory of 5.” If each of five core components of an advertising campaign have five diffrerent options–positioning, segmentation, creative, print, online–3,125 different combinations would be avaialble for marketing implementation.

To clarify the advertising situation, Stuart advises making sure there is universal agreement on the goals of a campaign, upfront. From the research team to the ad agency, and from the creatives to the media planners, all must be alligned towards the same marketing objective. Points of allignment include:

Knowing why consumers buy a brand,
Targeting a valuable consumer segment,
Creating an unambiguous defintion of campaign success.

Testing is a prerequisitie for achieving advertising goals, Stuart believes, because NOT testing is “really expensive,” he said. Testing must occur for both the creative and media components of campaigns.

In a nod to Google’s 70-20-10 technology “innovation theory,” Stuart presented his own marketing formula for success:

Apply 70% of budget to what is known to work,
Devote 20% of resources to innovation on what is known to work,
Dedicate 10% of assets towards brand new ideas.

Jay Adelson wears two online CEO hats: Digg and Revision3, proud host of Diggnation.

I spoke with Adelson last September when he asked the world to “kill your television” and join him instead for “televison, revised.” In other (Adelson) words, a relaunch of a “new network for a new audience” with new VC funding for the “first media company that gets it”: Revision3

I spoke with Adelson again yesterday, about the progress Revision3 is making.

I noted last Fall that Revision3 may tout its “edgy” programming and claim to want to “kill your television” but its business model actually harkens back to the early days of television when shows were made possible by brand “sponsorships.”

For example, Kevin Rose might “integrate” talk about GoDaddy hosting in an “honest” way during an episode of Diggnation.

Adelson told me at the time that Revision3’s style of “product placement” would be more effective for advertisers and more lucrative for Revision3 than 30-second spots inserted within the programming.

I underscored that investors apparently agree, as Revision3 also announced a new million dollar round of funding.

Revision3 solicits sponsors for its shows:

Revision3 specializes in product-placement, honest sponsorship, where our show hosts discuss the sponsors in an integrated way…similar to television of the 1950’s. Our sponsors have found this method, combined with the highly targeted nature of our shows, to be an extremely effective way to get their brands in front of millions of viewers a month.

Adelson continues to tout the Revision3 “TV sponsorship” model, and he has stats for backup to boot, that he shared yesterday at the Future of Online Advertising conference in New York City.

Adelson showed two video clips yesterday.

First, an old school black & white Flinstones video short featuring Fred & Barney enjoying a “Winston’s break” relaxing behind the cave, as part of a “sponsored by Winston’s cigarettes episode. Then, a colorful excerpt of a Diggnation episode featuring Alex & Kevin relaxing on their couch while admiring the latest, greatest Verizon VCast, Mobile TV, a Diggnation sponsor.

Verizon apparently was well served by the ”endorsement” received from Alex & Kevin for a fee. Adelson said in their surveys of Diggnation fans, 40% bought sponsors’ products and 85% could name the sponsors, for very high top of mind recall.

Adelson believes 2008 will see a rise in such “direct to content” sponsorhsip relationships, although he acknowledged “Howard Stern style” advertising can not be supported by all types of content.

I asked Adelson why he thought Kevin’s “paid endorsements” are accepted, while PayPerPost’s posties get a bad rap.

People trust Kevin and he is believable, Adelson happily indicated.

ALSO: Google PPA Advertorial: The Next PayPerPost?

CONTACT DONNA BOGATIN

Yahoo is trying its Panamanian darndest to best Google at search.

Nevertheless, the Yahoo strength continues to be “establishing the Internet’s most valuable audience through deep and engaged relationships,” as CEO Terry Semel underscores every three months to Wall Street in his earnings calls.

What is the “Future of Search Marketing” from Yahoo’s point of view, then? It resides in particular with the “Consumer 2.0,” not necessarily the “Searcher,” as suggested by Ron Belanger, VP of Agency Development at Yahoo, presentation at the Future of Online Advertising (FOOA) conference Thursday in New York City.

On the topic of Search Marketing, Belanger showcased above all Yahoo’s Web 2.0 “collaboration & sharing” tools!

Belanger began his talk, headlined “Understanding Consumer 2.0,” by signaling the importance of focusing on the “people conducting the searches,” rather than the search mechanics themselves.

Who are these people? With a half billion users world wide, all use the Internet differently, Belanger said. How then, can messages be catered to individuals, to get their attention? Yahoo wants to “empower” Consumer 2.0 “choice,” in a scalable way.

Because Consumer 2.0 is “stressed-out, sleep deprived, over worked and over whelmed,” there is less available time to physically reach them and it is harder to reach them emotionally, Belanger indicated. There IS hope, though.

Consumer 2.0 is “addicted to leisure”; If marketing messages are “entertaining, fun and relevant,” they can succeed, Belanger underscored, when aimed at the “passion points” of “community participants.”

Participation Marketing, according to Yahoo:

Identify your best customers,
Listen to them,
Collaborate with them,
Give them tools to share.

Above all though, “Hips Don’t Lie!” Belanger presented a case study on Yahoo’s “participation marketing” program for Shakira’s album.

Yahoo reached out across its Consumer 2.0 platforms to target “communities of passion” around Shakira–70 fan groups, 120,000 images, 100 customized fan sations–with a pitch to start shaking those hips!

Belanger showed a video of myriad Consumers 2.0 that took Yahoo up on its offer and submitted their own (Yahoo) clip-culture videos of themselves shaking their hips like Shakira. Yahoo received more than 10,000 user video submissions and the Yahoo remix “was our number one most downloaded video,” Belanger said.

Moreover, Yahoo helped extend the life of the hit single, he proudly added. In other words, those hips kept shaking!

CONTACT DONNA BOGATIN

Why is the blogosphere so riled up about PayPerPost? I asked Ted Murphy, founder and CEO, just that, yesterday at the Future of Online Advertising Conference in New York City.

Murphy told me:

“There are two types of bloggers, some that consider themselves “journalists,” and they won’t provide “sponsored content.” But there is a much larger audience that looks at their blogs in a different way, and thinks they can run their blogs as they want.”

How large is that larger blogger community? I asked Murphy that as well: The PayPerPost network comprises 27,000 bloggers and 6500 advertisers to date, Murphy said.

Murphy described his product as “advertorial.” I have also characterized it as such, in repsonse to the most recent TechCrunch lambast over bloggers supposedly “selling their souls” thanks to PayPerPost.

Are media souls really in danger of being compromised merely because of one new advertorial entrant into the publishing market though?

Michael Arrington is appalled by PayPerPost, and, by extension the 27,000 bloggers that are, according to him, ”selling their souls” (on the cheap, however).

But, what about the long standing media practice of paid advertorial content “proudly” presented by the world’s leading publishers, should that practice not be a target for indignation as well?

Moreover, how about the impending Google PPA advertorial ad product which will more than likely be embraced by the legions of bloggers already profiting from Google AdSense?

The new “Paid” but not quite identified as “Sponsored” Links Google advertising product, Pay-Per-Action (PPA) text link format, encourages the ”blending” of paid for ecommerce transactional links into publisher editorial, but does not require any upfront “advertorial” disclaimers by AdSense publishers for the Google ad product being shown to consumers “blended” with “objective,” non-paid for content.

I asked the head of Google AdSense point blank yesterday if the soon to be released AdSense CPA (or PPA) “embedded” text links do not risk the advertising “evil” that Google vocally states its opposition to.

Of course not, was the not surprising, but also not quite accurate, Kim Malone response. SEE my report: Google Exec Skirts CPA Advertising Evil

Google is “excited” about its new PPA “pricing model.”

How excited will consumers be, however, if they are unwittingly mislead by the inherent ambiguities of the new Google advertising and ecommerce engine, to be distributed via the ubiquitous Google AdSense network?

A “disclaimer” upon mouseover is not in the spririt of Google.com’s “Sponsored Links” stringent policy. 

What’s more, how excited will bloggers fueled by Google AdSense be when they enthusiastically “blend” Google AdWords “paid links” into their editorial?

Merriam-Webster describes “advertorial” as a “blend” of “advertisement and editorial.” As in the Google AdSense PPA “blending” advice to its AdSense network re Google advertisers?:

Publishers can place them in line with other text to better blend the ad and promote your product.

CONTACT DONNA BOGATIN

Is all well and good in the YouTube video world? Not exactly.

Interface changes are meeting with resistance. 

Moreover, it is hard to build a business on pirated video content. Who says? Jeremy Allaire, founder and CEO of Brightcove.

Allaire expressed his belief this morning in repsonse to my question to him about the Google YouTube way of doing business. Allaire discussed the Brightcove business model at the Future of Online Advertising conference in NYC and during the Q & A, I asked him for his industry perspective on YouTube.

Allaire previewed an impending “Aftermix” enhancement to Brightcove’s offerings: “you can mastermind a mind-blowing mash-up featuring videos, music clips, and images. Pull from your private collection or among the videos available in Aftermix, add some killer effects, and share your own sweet remix.”

Allaire stressed that Aftermix will feature “rights-cleared” assets for adding to the remix.

I indicated to Allaire that rights clearance is not a solved problem in online video, asking him:

You speak with all the top video content owners. From your industry perspective, do the YouTube lawsuits threaten not only Google, but thge very viral distribution model you speak of.

Because of DMCA concerns, Google is also stymied with advertising at YouTube as well, Is YouTube’s dominance at risk?

While Allaire, not surprisingly, declined to comment on YouTube’s legal exposure, he did affirm that:

It is difficult to build a business on pirated content.

Allaire suggested that an intermingling of authorized and unauthorized video content is a precarious situation. He underscored that Brightcove has taken an opposite approach by being focused on the interests of the rights holders.

While Allaire believes the Brightcove model is a good one, he also expressed confidence in Google’s YouTube staying power.

Copyright protection is not the only stumbling block, however, in what Allaire calls the “wide open distribution” of video online.

While Allaire hails “reaching consumers where they are, not where you want them to be,” he is pragmatic about the implications of seeking net value from ”incremental viral video distribution.”

New issues resulting from “buying massively distributed media,” according to Allaire:

1) Inventory will be syndicated in diverse contexts,
2) Domain-based measurement no longer sufficient, metrics need to account for content, not just sites,
3) Potential for sales channel conflict.

A fragmented programming environment “reframes how buyers think about video content,” Allaire indicated. Targeting becomes critical in “network advertising,” he said. Existing programmers have to rethink lines of products and launch micro-channels, Allaire believes.

Brightcove, itself, features more than 3000 different commercial video channels from professional media companies, Allaire noted.

Who is a TV network? Allaire asked rhetorically. After all, production companies, broadband startups, print media companies and Web publishers are all getting into the online video game, opening up a wide range of both programming and advertising opportunities, such as:

Branded destination content sites,
Viral distribution and widgets,
Managed syndication,
Portal distribution.

The Allaire bottom line: “Fragment, or be fragmented.”

READ INSIDER CHATTER’S EXCLUSIVE INTERVIEW: PROSCECUTORS OF YOUTUBE CLASS ACTION LAWSUIT

CONTACT DONNA BOGATIN