Big Brother Boss

The management game has changed drastically as a result of enterprise software systems, and with that change has come many separate privacy concerns. Software companies’ products strive to streamline sales processes, succession and management change-up planning, integrating new policies or guidelines, and just about any other corporate strategy theory put to use in a company, big or small. Unfortunately, all of those products rely on one main thing: data. That data comes from a lot of places, but for management software in particular, the most valuable data are typically reflective of employee behavior. And employees aren’t particularly happy about that.

Some data is aggregated from keystrokes, or phone call times, or even web-browsing (a more touchy topic with respect to privacy). Typically, companies restrict the data they collect to “business-only” behavior, that is, actions performed for business purposes. But for some jobs, the line between business and personal is often blurred. Steve Poppe, CEO of Roto-Rooter, employs 1,500 technicians, who all make their living on the road, repairing pipe after clogged pipe. Among their schedules visits, those employees are eating lunch, taking breaks, and performing other personal tasks throughout their day. Which is why most of them took opposition to Poppe installing GSP locators on their new, company-issued cell phones. Poppe’s rationalization for this apparent “breach of privacy” was to be able to send the nearest technician to a call in real-time, which is a valid claim when that is the majority of your business. For employees of the company, prior to the GPS system, they would have to manually report a job completion, and then wait patiently by their phone for the next assignment. Now, Roto-Rooter uses etrace software from GearWorks, integrated with their Nextel i58sr phones to view an interactive map of all their employees. It also allows technicians to carry portable printers connected to the mainframe system, capable of printing out invoices immediately, which immediately tells the company that the call is now complete. As a result of this software implementation, the company’s employees are now able to serve 20 percent more customers then before. That’s a pretty substantial increase in productivity at the cost of what was ultimately a low opposition to breach of privacy (Roto-Rooter’s employees’ opposition was short-lived compared to some other companies experience with GPS integration). Additionally, the employees directly benefited from the increase because they work largely on commission; the more sales, the more commission. Direct benefit may not be a valid justification for loss of privacy, but it will certainly help the cause at the corporate level.

There is also a new wave of corporate culture emerging at some technology companies that promotes a more organic approach to acquiring employee behavioral data. Cisco Systems, the largest producer of network and communications technology and services, has encouraged its employees to share their data willingly in the form of internal wikis, blogs, and various social networking accounts, both proprietary and open (such as Twitter and Facebook). This culture allows company employees to share information across divisions (such as engineering to sales), disseminate leadership and decision-making faster and wider, and manage what each employee is doing in a manner that is less invasive and more collaborative. If privacy is the concern, that solution is one that should be considered by companies having difficulty integrating management and tracking software. If a company the size of Cisco (which currently has $39 billion in revenue and $22 billion in cash while most companies are underwater), it certainly could work for others.

new site

I've switched blogging platforms to Wordpress, check it out at http://mattlabz.wordpress.com!

targeted does not always = relevant

I think there has been a confusion in the digital advertising and social media industries between the delivery strategy of targeted ads and contextually relevant ads. With the development of sophisticated ad platforms at Facebook and MySpace, the advertising industry has had their eye on the prize of [finally] creating effective online advertising. Unfortunately, many dollars, man hours, and experiments later, that prize still remains very wrapped.

Delivering a targeted advertisement does serve the message--whatever it may be--to a theoretically receptive audience based on data collected on their browsing behavior and, in some cases, published interests, connections, and personal information. However, the reason the CPM model exists is because only a very small portion of those designated "targets" will be receptive to the product/service when the ad is served. This is based on numerous variables, many of which are uncontrollable. When an ad is served at an inopportune time, that user can react one of two ways: he/she can glaze over the banner/search/interactive message (as most do), and remain indifferent about the brand serving the message; or they can become frustrated by the ad's neutral or, as is increasingly the case, negative utility to the browsing experience. The latter creates a detractor for that brand, and as conventional wisdom tells us, a brand promotor will tell 1 person while a detractor will tell 10. This is a cost that is continuously rising as users become more and more empowered and less passive to being subjected to constant advertisement. Obviously channels have opened up as social media becomes more ubiquitous, but the attempts have been less than authentic (such as CEO Twitter accounts, branded Facebook games, etc). But while authentic content creation is a good initiative (and is quite cheap), its hard to tell whether it actually leads to purchases down the line, either direct or via trickle-down promotion.

Perhaps the blanket strategy is getting tired, and instead of paying a low cost-per-impression on a broad market segment, firms should begin focusing on a smaller but more receptive (and thus more valuable) audience, and leave the indifferents to browse in ad-free bliss. Unfortunately the nature of the digital ad business is restrictive to this concept, because ad networks are really the ones serving the ads, not the advertisers, so the incentive is more to serve as many ads as possible and keep their inventories flourishing. We may see some shake-up in this sector with respect to that model (publisher-ad network-advertiser) this year given the times and constraints (fingers crossed).

The difference between targeted and relevant advertising lies in the mood of a user at a given point in time. Relevancy is more difficult to achieve because that value is always changing, but there are ways to estimate that behavior. A targeted ad can measure what a user likes to listen to, watch, who he/she likes to converse with, co-brand with, etc, but those are generalizations that apply to that user's entire personality, not their specific mood. Targeting systems can also identify what a user is reading at the time or what previous articles/posts/videos/other content that user is coming from, but jumps at the sell the first chance it (the ad spot) gets. If I were trying to sell a client on an expensive new IT system, I wouldn't approach the CEO if their stock price has recently dropped by 70% and they'd laid off 40% of their staff. No, I would either wait for a more opportune time, or sell a different product, such as a more efficient system that would save the company money. Now, that's an extreme example, but the point is, the way any solicitation is received makes the difference between a sale and a dud. If a user jumped to a page with an article about the auto industry, GM or, even better, Toyota ads appear. But that user isn't nearly as valuable as the user who spent 30 minutes researching what mid-size sedan has the best crash-test rating. The dollars should be put into a more useful ad served to the second user than blasting the first user hoping their disdain for American cars might throw them right into a Corolla.

I'm just touching on the overarching problem plaguing online advertising currently, and many a clever ad exec has been wrestling with these problems for years. I think the constraints really lie in the disjointed model placing the ad network between publisher and advertiser, as well as the ad industry's starry-eyed reliance on new technologies to fix the problem through sophisticated platforms. Google knows search, Facebook knows networks, but Burger King knows burger eaters, and Crispin Porter + Bogusky knows how to market them (supposedly, those new Angry Whopper ads I'm not so sure about...).

$how me the money!

So its been 2 1/2 years, and still no business model from Twitter (even with a co-founder by the name BIZ Stone...c'mon!). Obviously this method isn't anything new for the Web 2.0 pioneers in social media...Facebook has tested the limits of this practice, and still hasn't released a viable model. This youthful style of ready-fire-aim has been questioned by the critics and traditional business analysts time and again, the response always being (in either an aggravated or snobbish tone), "we'll figure it out!" And its hard to argue with, seeing as how Larry and Sergey did it 9 years ago with Google. But search is certainly different than social media, and the latter has only been mildly validated by MySpace, who actually entered the space with the intention of becoming a PROFITABLE enterprise.

Twitter has maintained that it does in fact have dollar-earning plans for its micro-blogging community, and they "plan" to announce those next quarter (they've already hired their very first head of Product Development). But they should really stop outright dodging the question, especially co-founder Evan Williams. Every time he's asked, he makes it seem like they're a bunch of kids who got too much money and scaled to a point where their out of their league. For the record, I still very much believe in Twitter's viability; they have a very loyal and outspoken user base that is growing very healthily, their distribution has continued to open up all across the social stratosphere (they've just partnered with Facebook Connect, MySpace ID and Google Friend Connect), and their application is being used in hundreds of different contexts to increasingly valuable niches. One niche in particular is the socially apt finance world. While the industry itself may be the Grinch that stole Christmas (and its bonuses), StockTwit, a recent startup, just raised $800k in a Series A this month (via CrunchBase). Its web applications like these that spread Twitter's utility around in healthy doses. The virtual infrastructure is certainly in place, it is simply a matter of solving the monetization problem. And I really hope its not ad-based, because the most recent attempts companies have executed on Twitter in hopes of connecting on a more personal level with their customers have been all but disgusting and inauthentic.

look daddy, straight a's!

What the son isn't pointing out is that the classes are workshop, home ec, and Enligh as a Second Language. And herein lies the problem currently facing the advertising and marketing world. With the country now officially in a recession, advertising budgets are the first to get cut, specifically experimental and unquantifiable media. This means companies are looking to areas such as direct response ads (which have grown 27% YTD while most other ad products have decelerated), which have easily derived ROI's. This is basically an attempt for the marketing department of a company to prove itself to the board so the VP's don't get chopped as just another gangreined limb.

Unfortunately, we are in a time when companies need to reach their customers in the most cost-effective and relevant way possible, and more often then not that does not include media with easily derived ROI's. We are beginning to see this take effect in the digital ads space, specifically in display ad sales and the declining rate of CPM's. Firms are simply realizing these impression metrics simply aren't as valuable as everyone has been thinking. What needs to happen is the emergence of an entirely new online advertising model (or a paradigm shift to something like mobile), but unfortunately for the next however many months, companies simply won't have the cash to experiment and execute. Ad networks and advertisers alike should really begin (or should have already begun) rethinking their traditional models and find a way to monetize on alternative forms of digital media or, God forbid, without the reliance on advertising altogether. Either way, the model's broken and no one has the tools or manpower to fix it. We'll see a significant drop in the online advertising market over the following year as a result, but hopefully the old sayance "necessity breeds invention" will hold true and we'll see a beaute emerge.

Until til, keep your heads low and keep posting those A's.

Neilson online advertising spending breakdown (via AlleyInsider)

ad [hoc] irony

Well, the most recent advertising forecasts are out...and we all wish it was the 60's on Madison Avenue, because even if the industry was in the same state it is now, at least we could pound some scotch at the office.

John Janedis from Wachovia cut his forecast from 1.5% growth to a 0.8% decline in ad spending this coming year. Most of the big ad firms are cutting jobs. Two WPP subsidiaries (Landor and Brand Union) announced cuts last week, as did Starcom MediaVest and TBWA/Chiat/Day (150 and 20 people, respectively).

One silver lining I see to this mess in the ad world is the completely necessary disruption of failing business models, and the forcing of creative, economical and valuable ad models to emerge. And its about time. Right now I'm looking to Hulu to lead the charge on web-based video content, they've definitely got something. And with more people viewing the Thursday night SNL special after the broadcast (via DVR or online) rather than live, that "guaranteed" audience TV networks once relied on are migrating from 10 ft to 2 ft experiences in a hurry.

It is a bit ironic how one of the most popular shows at the moment depicts a dated (albeit glamorized) advertising age that is run on a network (AMC) barely scraping by on the advertising it runs during the show's breaks. I think that's too many levels to even be funny, its just confusing and hurts my head. Need more scotch.

ohh, apple's STOCK is dying, not its ceo. gotcha.

While Steve wittingly quashed the rumors of his terminal illness once again to open his keynote address today, the delivery of his new products was underwhelming...mainly because the products themselves weren't the mind-blowing, industry-altering gadgets the public was expecting. And their stock suffered; down nearly 4% today, hitting lows not seen since April.

The products revealed were a slimmer, sleeker iPod Nano, update v2.1 for iPhone (coming Friday...fingers crossed for copy/paste function), and HDTV availability on iTunes. See what I mean? Nothing too fancy or too interesting. But hey, they have really cool colors for Nano, so at least your iPod won't look as depressed as you, Apple shareholder!

Full video of the keynote here.

spider with a viral bite (oh, and its enormous)

So, like, I know the Brits are weird and all...but this? A giant robotic spider repelling down the side of an office building in Liverpool? I don't quite follow. There are speculations on Engadget's comments section that its a viral campaign for Ghost in the Shell, a popular anime program (it resembles one of the characters).

Whatever it is, its certainly viral. Just like that full-sized UFO crashing near London Bridge promoting the Vauxhall Insignia car in the UK, its another attention-grabbing installation...not sure if its directing people towards cars or anime, but hey, its certainly interesting.

buffer.me from shitty design

As reported on TechCrunch this morning, Buffer.me has launched a private beta site, bringing sleek and intuitive design to the Youtube experience. And its about damn time...the Youtube site has become less and less appealing (search function, video UI, cluttered layout, etc), and has caused me to revert much more to watching Youtube videos only when they are embedded on third-party blogs, news or websites. The other video sites out there have a sleek, appealing layout and UI (Hulu, Vimeo), why can't Youtube? Well, wish no more. By the way, this whole site was concieved and designed by one dude.

Buffer.me

aza raskin, superman for UI

Ubiquity for Firefox from Aza Raskin on Vimeo.

Aza Raskin, the boy-genius son of famed "human-computer interface" developer Jef Raskin--responsible for Apple Pascal and the Macintosh Project for Apple Computer (and a few other remarkable things)--has struck a chord within the relationship between language and the Web. He has created an interface that allows you to use natural, informal language to call upon certain Web services in a very organic fashion. "twit this," "map this location," "translate this," "highlight." Very good stuff.

Aza, by the way, gave his first UI talk when he was 10 years old. He dropped out of middle school and high school, went to the University of Chicago to study math and physics, and researched Dark Matter (which he followed into an ultimately abandoned PhD program at CalTech). He also studied at the University of Tokyo, though U. Chicago was his only fully completed stint. He is also the founder of Algorithm Ink and Songza. Yeah, he's kind of a big deal.

update: students who hacked the MBTA get gag order lifted

Via SlashDot:

"Judge O'Toole said he disagreed with the basic premise of the MBTA's argument: That the students' presentation was a likely violation of the Computer Fraud and Abuse Act, a 1986 federal law meant to protect computers from malicious attacks such as worms and viruses. Many had expected Tuesday's hearing to hinge on First Amendment issues and what amounts to responsible disclosure on the part of computer security researchers. Instead, O'Toole based his ruling on the narrow grounds of what constitutes a violation of the CFAA. On that basis, he said MBTA lawyers failed to convince him on two points: The students' presentation was meant to be delivered to people, and was not a computer-to-computer 'transmission.' Second, the MBTA couldn't prove the students had caused at least $5,000 damage to the transit system."

Nice.

weekly diy: ceral box to gift box

So you bought the perfect gift for your buddy's birthday, but realize a half hour before the party that the nicest thing you have to wrap it in is a Duane Reed grocery bag. I feel your pain (and embarrassment). Well, with this DIY you can cut open your favorite cereal box and a couple of folds later you've got yourself a box. Bueno.

The folding steps are relatively precise, so I'm sending you over to instructables.com to check out the exact method. There are about 8 folds, then a gluing step. That's it.

Materials needed: cereal box, sharpie (to decorate).

Tools needed: glue gun, dexterity.

Instructables step-by-step.
J.J. Abrams talk @TED on box design that seemed to inspire our DIY-er.

walmart noticing nobody wants to buy cd's...bingo

WalMart may have the exclusive release of ACDC's new album dropping this fall, but that might be some of the last music the retailer will carry. Like everyone else, they have finally realized the lack of demand of music through mediums such as WalMart (the decline began at those obsolete brick and mortar music stores like Tower Records, Sam Goody, etc). And the demand curve for music at WalMart is even more kooky, because it is based on the impulse purchase demand and not music listener demand. That's how WalMart, Target and Best Buy sell the vast majority of music in the US. People who want to buy music use iTunes and Amazon, people who want to buy dishwasher detergent and cereal and happen to walk past the music section and see Tim McGraw on the shelf for $6.99 buy music at WalMart. As soon as they start to take away that inventory, people will obviously stop buying, but those sales won't carry over to online music stores...they'll just kind of die.

Somber, just like to music industry. Bronfasauras, take note.

aside: aapl worth more than goog

Bam. For at least this moment, Aug. 14, 2008 @12:01pm, Apple's market cap is $158.93B, which just happens to be slightly more than Google's $158.61B. Ouch. They both look pretty shocked to learn it, too.

schmidt to cramer: mobile's gonna kick desktop's ass

Everybody has been talking about mobile advertising like its going to blow everything else out of the water. That talk's about ten years tired now, and still...nothing. Its a tough problem, one that faces all forms of advertising: how do we not annoy the crap out of our consumers? There have been examples of mediums that didn't solve this problem (who in fact used its existence as a means of accessing consumers). Those would be pop-up ads on your browser. The endless sea of pornography and gaming sites covering your entire screen...yeah, that builds great brand image.

So when Eric Schmidt goes on Cramer and says that Google will eventually make more money from mobile ads than desktop? Big statement, especially considering that the problem is still, well, a problem. Schmidt went on CNBC's "Mad Money" last night to discuss the mobile ad concept with Cramer (full transcript here), and was quite optimistic of the role mobile will play in Google's future. He also reiterated that, even though www.google.com is ranked #2 on the web in traffic (behind Yahoo), there will (hopefully) never be any ads littering the site's real estate. "We absolutely are not going to sell that page," Schmidt told Cramer. I think we can all understand the value of keeping that page, and by extension the company's image, clean.

But how to make money in mobile? Cramer poses the question with regard to the greed of wireless carriers (maybe Android is the answer??). Even if Google figures out a smart and non-invasive way of placing targeted ads (as they most certainly will), is it possible to structure the economics in a way that makes enough money (at least comparably to their desktop model)? AlleyInsider also brings up a good point: if Google were to make more money in mobile than desktop (currently bringing in over $20B for the company), the mobile ad market would have to grow from less than $1B to over $50B (SAI is assuming that Google takes about 50% of the market). That's a lot of growth. Just please, no location-based coupons like that hairbrained Starbuck's example.