The effectiveness of behavioral targeting

As we have mentioned here and here, the advertising game is changing once and for all as it pertains to online. It is getting more sophisticated and more effective everyday. But, hey, don’t take my word for it. Online consumers are consistently more receptive to behaviorally targeted ads than contextual ones, with BT outperforming contextual by as much as 22%.

And as for that highly desired demographic, how’s this? The behaviorally receptive audience has a higher income, is more likely to shop online and spends more online. But the interesting twist is that behavioral ads work with both big spenders and smaller spenders. (More on the study here.)

This is a game changing trend that merits close watching.

Online video is online video

An interesting study came out about internet video usage that was rather eye-opening (awful pun intended).

During the month of July, internet users watched an AVERAGE of 3 hours of video online, with Americans viewing 9 billion videos online. Nearly 134 million Americans viewed video online, which equates to 3 in 4 American internet users. The average duration of each video was just under 3 minutes.

TV continues to hemorrhage ratings share. Eyeballs are online and quality continues to improve. How will you take advantage?

New iPods- but THIS is more telling

So Apple did their big pre-Holiday season roll out of the updated line of iPods and the new iTunes store yesterday (September 5). New features, more storage, different colors and one new product- the iPod Touch, which is an iPhone without the phone. We’re not in the business of reviewing Apple products, as much as we love them. (Go to Engadget if you want the full 411 on all the latest products.)

Rather, what we found fascinating about Steve Jobs’ speech was some of the facts regarding the digital influence. Peep this:

  • Over 600 million copies of iTunes distributed
  • 3 billion songs purchased on iTunes
  • 95 million TV shows purchased
  • In the US in 2006, ONE THIRD (32%) of all music released was digital only, that is to say, not on CD but only as a download. One third. Talk about digital influence.

All these stats are only relevant to iTunes and the amount of content that THEY have aggregated. It boggles the mind to try and extrapolate that across all content aggregators across the entire web.

It’s happening, folks. Are you ready?

Emergence and the internet

If you’ve never listened to Radiolab from WNYC in New York, I urge you to do so. The topics are compelling, the production of each show is engaging and they only produce 5 per year so they leave you wanting more.

The episode from August 14, 2007 investigates the science of emergence or, simply put, where does organization come from? How can order come out of nothing? The group is more knowledgeable than any of its individuals. A simple, illustrative example is the guessing game involving a huge jar of jelly beans. No one person hardly ever guesses correctly. But the average of all the guesses of the entire group is almost always within a jelly bean or two of the correct number.

In the co-hosts’ analysis of how ant colonies function, their irreverent distillation of the science of emergence was, "How do so many…creatures with no boss add up to be so smart?"

This directly relates back to the "organization" of the internet. Who is responsible for popular search topics? Answer: everyone and no one.  Error is architecture.  Hundreds of local, unplanned decisions can add up to a mass movement. Consider this: you log on to search for a restaurant to try this weekend, but in your search you swerve and swerve until you find yourself on a site that gives tips on how to make your home more energy efficient. You’re not where you planned on going, but you’re not dissatisfied with your destination either.

Is this is how movements, neighborhoods and communities form? Are there no instructions? Or do they just come out of how the colony lives and behaves? What I DO know is: this is how Google has achieved primacy on the internet.

Another channel- Will there be anything on?

Web video content is improving. Search is improving. Is anyone noticing?

Apparently, yes.

According to the Online Publisher’s Association, internet users are spending nearly half their online time visiting content, a 37% increase from four years ago. The study shows that the primary role of the internet has shifted from communications to content. The study is pretty interesting and can be found here.

One of the nice conclusions is further proof that one person’s success does not have to mean another’s failure. While some in the old media (read: Hollywood) are afraid that this might be the death knell for traditional TV and film distribution models, other glass half-fullers see this as the opening of new business models like pay-to-own downloads (iTunes), subscription services (RSS) and online rentals (Amazon Unbox, among others).

Got a good idea? Get it out there and make it easy for people to find it and get it. But,in the inimitable words of radio and TV host Jim Rome, "Have a take. Don’t suck."

High speed growth of high speed

As more and more content aggregates online, there has been a concurrent surge in online penetration. According to a new report by the Pew Internet and American Life Project, seven in ten Americans who go online from home now connect via high-speed lines. Almost half, 47%, of all Americans now have broadband at home, up from just 30% two years ago. (Amazingly, 29% don’t use the internet at all. It is not clear if that is a purposeful opt-out, or if there are other economic factors involved.)

All this contributes to the changing entertainment experience at home. Storage is always an issue with digital files since they can be such bandwidth hogs. The more you compress them, the greater the degradation of the image. But technology always catches up with technology. The day when what we enjoy on our home HD monitors is of equal quality to what comes in over the pipes is already here.

People don’t care where or how they get their entertainment, we just want it. The smart companies have figured that out already.

Mobile video and iPhones

I try to keep these posts short, mostly because I don’t like to read long blog posts online. In that spirit, this might be a two or three-part post.

Lost in all the iPhone hype, in my opinion, has been AppleTV. For content producers, I think this is the real killer app. The mobile research firm Telephia released a report that states 8.4 million people in the US subscribed to mobile video services in the first quarter. That is a 155% increase over 2006, but it only represents 3.6% of all mobile subscribers.

Watching any video that lasts more than 60 seconds becomes less about the content, however, and more about the experience. Is watching an iPod screen or telephone screen for 10, 30 or 60 minutes really the best experience? While there are certain circumstances where we make concessions (plane flights, commuting to work via bus or train, etc.), if you really want to dig in and enjoy some video, obviously this experience leaves a lot to be desired. This, I think, is where AppleTV comes in. While the major networks are continuing to lose their primacy in favor of podcasters, at the end of the day (literally), we all want to watch this stuff on the couch on our TVs. AppleTV makes this possible at a very high quality.

THAT is the killer app.

Our take on the iPhone

We get lots of questions about the iPhone: what do we think of it? Are going to buy one? What does it mean for cell phones in this country?

While 99% of the discussion is pure speculation until the phone hits the street on June 29, there is certainly tremendous POTENTIAL in the iPhone as a device. In the first place, the ability to have a great three-in-one device will certainly free up a lot of pocket or purse space. Everyone who has an iPod knows how great they are. Everyone who already has a Treo or Blackberry knows that the web surfing experience is not analogous to that of your computer. A phone, video iPod and powerful browser and e-mail tool could certainly be a welcome addition to those of us who wish all these things could be joined as one. The real proof will be in how well Safari works and whether it really does replicate the experience we all have when we’re online from our desktops or laptops.

Apple has a history of getting people very excited about products and, while there have been a few letdowns over the years, their track record has been pretty good. I heard one pundit refer to this as the "largest consumer product launch in history." Apple and AT&T certainly have a lot riding on its success, and naysayers will jump on the smallest glitch to say "I told you so."

Our attitude is basically "wait and see." I seldom jump on the first version of anything, but if it even lives up to half of what they are claiming, I think we might witness a real sea change in mobile communication. And why not? Are any of us REALLY in love with our phones?

If you’re dying for more iPhone news, we suggest giving a listen to our friends over at

Better than a 30-second spot?

So, by now you have probably all seen the latest YouTube entry from Hillary Clinton spoofing the final scene of the final episode of The Sopranos. The point of it was to announce the winner of an internet vote sponsored by the Clinton campaign to choose the theme song for her presidential run. This might be a turning point in her campaign in terms of the use of technology to soften her image and present her in a more playful light.

Bill Richardson created an online ad campaign that was humorous and helped him to maximize an ad budget that is probably a fraction of the Clinton campaign.

The presidential candidates are beginning to tap the power of the internet to reach a broader audience. Could it be that they are realizing that maybe the medium is not the message, but perhaps the message is the message.

Information as bread

I spend a lot of time marveling at the way the internet has transformed our lives. Anything you want to find out about, no matter how mundane or arcane, is out there. Totally unregulated, yes. But for the most part, it serves as an information repository. Information is the daily bread of our lives and the internet is the most searchable storage site.

As Bill Moyers observed, "Bread is life. But, if you’re like me, you have a thousand and more times repeated the ordinary experience of eating bread without a thought for the process that brings it to your table. The reality is physical: I need this bread to live. But the reality is also social: I need others to provide the bread. I depend for bread on hundreds of people who I don’t know and will never meet. If they fail me, I go hungry. If I offer them nothing of value in exchange for their loaf, I betray them. The people who grow the wheat, process and store the grain and transport it from farm to city; who bake it, package it and market it- these people and I are bound together in an intricate reciprocal bargain. We exchange value."

Ideas and information are the metaphorical bread. This is today’s reciprocity.