Archive for the ‘Venture Capital’ Category:
Looking at the world through these 3 charts adds a unique perspective to advertising
My friend Niel Robertson wrote this article about how he looks at business through these three charts: Distribution Curve/Bifurcated Distribution, Sigmoid Curves, and Network effects. Its interesting to apply these different charts to current and future business models: Search, DSPs, Media consumption.
He also makes an interesting analysis of the professional services business as how it is counter to the Network Effect, in fact its much more of a linear effect – therefore takes considerable time and effort to grow and scale since adding each additional customer requires almost as much (sometimes more) costs as the previous customer. This is very relevant as the advertising industry begins to look at potentially finding network effect solutions for the marketing and advertising industry for scale – a great example is Demand Side Platforms and their effect on the media buying and planning industry. Once you have established your DSP, your next primary cost is data, with some staff costs, but the incremental cost of adding an additional customer is lower as the business scales especially if you can gain economies of scale around data and audiences. . .
Everything I learned in business I learned from these 3 charts | VentureBeat
Everything I learned in business I learned from these 3 charts
July 8, 2010 | Niel Robertson(Editor’s note: Niel Robertson is the founder and CEO of Trada. He submitted this story to VentureBeat.)
I’ve been building venture-backed businesses for over 11 years now. In that time, I’ve seen a sea change in how businesses are put together. Engineering approaches, marketing approaches, pricing, service delivery … they’re all dramatically different than what they used to be.
But what I’ve come to appreciate is that, ultimately, businesses live and die on three simple dynamics: Distributions, network effects and sigmoid curves (s-curves). Almost all problems (and most opportunities) come from understanding how to take advantage of these functions – rather than fight against them.
Distributions – A distribution is a measure of how tightly grouped something in your business is. For instance, if you plot all of your customer deal sizes in a distribution, you’ll identify some interesting observations. You might see a tight packing around the mean (average), which indicates that most of your deals are about the same size.
You may also see a bifurcated distribution – which means you have two types of customers. (For discussion’s sake, let’s say one has a peak value of $1,000, while the other’s peak is at $100,000). If you find yourself in this scenario, you’re likely heading towards a problem.
Got a big idea for an agency? MDC Partners is listening with our wallets open.
The advertising industry was built by people that didn’t believe in the status quo. They were sitting in their current jobs and believed that they could do it better, smarter, more creative and deliver more value to their clients. They pined, they collaborated, they worked at midnight when their current jobs ended, they sometimes took jobs as fry cooks putting it all on the line, until the moment that their business finally began. . .and then they put their name on the door and changed the industry.
MDC wants to make it just a little bit easier. With an idea and a brilliant submission, MDC will invest $1 million in starting up the next new transformational marketing communications business and own 51 percent.
I am excited! oh and just in case you didn’t know the email address is startup@mdc-partners.net
‘Million-Dollar Challenge’ for New Marketing Firms – DealBook Blog – NYTimes.com
Venture Capital
‘Million-Dollar Challenge’ for New Marketing Firms
June 25, 2010, 2:29 amThe TV quiz show “Who Wants to Be a Millionaire” is about to get a Madison Avenue version, “Who Wants a Million Dollars to Start an Agency.” MDC Partners, the holding company based in Toronto that owns agencies like Crispin Porter & Bogusky and Kirshenbaum Bond Senecal & Partners, plans to announce on Friday what top executives are calling the “Million-Dollar Challenge.”
Would-be entrepreneurs will be invited to submit business plans for agencies in any area of marketing communications. MDC will review the submissions, choose at least one plan from among 10 finalists and invest $1 million in starting it up in exchange for a 51 percent stake in the new shop, Stuart Elliot reports in The New York Times.
The proposal is to be described by Miles S. Nadal, chairman and chief executive of MDC, at a seminar at the 57th Cannes Lions International Advertising Festival in Cannes, France. The seminar, titled “How to Build an Agency From Scratch,” is to feature Mr. Nadal as the moderator and Chuck Porter, chief strategist of MDC, as a speaker.
“It’s a great time, as we come out of the recession, to back entrepreneurs,” Mr. Nadal said in a telephone interview from Cannes on Wednesday. “There’s such an amazing amount of talent in the world today, to not capitalize on it would be a lost opportunity.”
The data goldmine of facebook available everywhere
With the Universal Like Button, Facebook will provide its fingers and more so its data into all corners of the web. While it gives publishers more traffic from users, it will also ultimately allow advertisers (through a facebook ad platform) to optimize and target truly deep user behavior, interests and social data to deliver the ultimate ROMI ad inventory. . .
Layer this onto Real Time Bidding of display media and this gets very interesting. . .
Lets not forget the user benefit for this – completely targeted content and personalization.
Social: Universal Like Button Spreads Facebook Across Web – Advertising Age – Digital
With Universal ‘Like’ Button, Facebook Spreads Across Web
Announcement at F8 Developer Conference Reveals Platform Designed to Draw in Vast DataNEW YORK (AdAge.com) — Launching its universal “like” button, Facebook extended its tentacles across the internet today, setting up pipes to gather user data from anywhere on the web. And now that users can add what topics, products or content they like to their Facebook profiles, the social-networking site is sitting on a data treasure chest.
Facebook CEO Mark Zuckerberg presenting at the F8 developers conference.
AP
Facebook CEO Mark Zuckerberg presenting at the F8 developers conference.
At the F8 developers conference today, CEO Mark Zuckerberg announced a platform that aims to connect the entire internet through the social network. With those like buttons appearing on major publisher sites directly after the announcement, users can thumbs-up individual pages with one click and publish that to Facebook. Meanwhile, that Like is stored for later.“[Zuckerberg] is using the like button as the glue to link Facebook to everything else and understand his users much more,” said Shiv Singh, Razorfish’s global social media lead. “It’s a data goldmine.”
Facebook’s new tools, including the like button, activity feeds for other Facebook users and recommendation engines, are designed to embed Facebook functionality on outside websites. With like buttons on 75 sites, including publishers such as CNN and the New York Times, from day one, Facebook expects to serve more than 1 billion buttons in the first 24 hours. Once a user likes a page, the publisher gets a link on the user’s page, and means to later publish to that user’s newsfeed.
Facebook made no specific ad announcement today, but the affinity data for the site’s more than 400 million users already has agency types salivating. A Facebook spokeswoman said its policy about developers or publishers targeting ads on their own sites has not changed with the new policies. Facebook will allow developers to apply user data to target ads on their own sites, but not elsewhere. Even though sites can’t share data, Facebook will be sitting on the mother lode.
The iAd: an Ad Industry Perspective
The entire advertising industry lined up for miles for the iPhone; they pre-ordered the iPad months in advance without any data plan or even any real idea how they would use it; and today we waited with baited breath to see what Steve Jobs had in store for the intersection of our world and his…the iAd: Apple’s new platform for in-app ads. This just might be the exact stimulus mobile marketing needs to finally make it “the year of mobile”.
Apple and Google have fundamental beliefs on the best way to engage users, and both are right. Google is betting on the web browser, and that browser’s evolution into an OS (Chrome) and all the channels within it – Video, Search, Display, etc. Jobs believes that the best way to engage with users is through the iPhone and he is building a fairly closed, but large and already viable ecosystem, with the iPhone, iPad, iPod Touch, etc.
The iAd is another new revenue stream for this ecosystem. In the past developers had two options; charge for their applications and have a small distribution, or don’t charge, and have a large distribution but no revenue. What the iAd brings to the table is the option for free apps that allow the developers to make money and create new business models. More than that, an ad-supported component to the ecosystem will drive innovation around the platform, and a lot of people are betting on it. One example? Kleiner Perkins just raised $200m for their iFund.
Let’s look at the stats from Steve Jobs’s presentation today – there are over 450,000 iPads sold to date, over 50 million iPhones, 35 million iPod Touches, and over 150,000 applications in the iTunes App Store. The average user spends 30 minutes a day interacting with applications. Those are some really compelling numbers
Lets discuss the logistics of buying, placing and building iAds – Apple will host and sell the ads. They are going to give developers 60% of the revenue and developers will be able to integrate them within their apps using the iAd SDK.
For the advertising agencies, since the iPhone and iPad still don’t support Flash, all development will have to be done in HTML5 (given that Flash isn’t very SEO friendly and now completely mute from the iPhone OS, it might be important to continue to migrate from the platform). Given that much of web development is moving to HTML 5 the developers at our firms should port over easy to this platform.
For marketers, it will be exciting. We will have a great opportunity to reach this enormous and growing audience in completely new ways. Ways in which, Jobs says, will be the intersection between the emotional power of television with the interactivity of the web. The iAd displays full-screen video and interactive ad content without ever leaving the app, and lets users return to their app anytime they choose. The more I think about it the more it makes sense:
Imagine watching American Idol on the Fox App on your iPad, when you notice a branded entertainment piece on the Ford Focus. Just by touching it, you can engage with the product including a virtual test drive of the vehicle using the game mechanics of the iPad without ever leaving the app.
Here’s the question: Will Apple provide access to the audience and data, or will the brands and agencies be precluded from leveraging this wealth of information about our customers and their experiences?
Another thing to think about is that as Apple scales the iAd Platform and the many application providers using it, there will be the need for an exchange, and the opportunity to plug agency Demand Side Platforms like MDC Partners’ Varrick into them will be significant.
What remains unquestionable is that Steve Jobs has built the ultimate platform in the iPhone OS for consuming media, engaging with content and connecting with the world. And the iAd is a game-changing marketing opportunity.
Redefining Navigation Simply by Nokia
Apple to ship tablet in March
Although the tablet has been around in many reincarnations, and many different CE developers have tried, the fact that Apple is launching a version is a validation that that platform and form fact is ultimately the next evolution in how we consume our content.
Apple to Ship Tablet Device in March – WSJ.com
By YUKARI IWATANI KANE And GEOFFREY FOWLER
Apple Inc. plans to unveil a new multimedia tablet device later this month, but doesn’t plan on shipping the product until March, people briefed by the company said.
All Things Digital’s Kara Swisher joins Simon Constable on the News Hub to discuss a major product announcement by Apple, which many believe to be the much-awaited tablet computer.
While the shipping time hasn’t been finalized and could change, people briefed on the matter said the new tablet device will come with a 10- to 11-inch touch screen. An Apple spokesman said the company doesn’t comment on rumors and speculation.
One of the people briefed on the matter added that Apple was working on two different material finishes for the tablet, though it was unclear whether the Cupertino, Calif., company was just testing them or planning to come out with multiple versions of the device at different prices.
Analysts currently believe an Apple tablet will be priced at about $1,000, possibly including a subscription to a nationwide Wi-Fi wireless service.
The tablet is expected to be a multimedia device that will let people watch movies and television shows, play games, surf the Internet and read electronic books and newspapers. People briefed by Apple also say that the company believes it could redefine the way consumers interact with a variety of content. Textbooks and newspapers, for example, could be presented differently through color screens, a touch interface, and the integration of live up-to-the-minute information from multiple sources.
Complaining about AT&T? There’s an app for that.
I am not completely sure if they is application is really a crowdsourced maintenance tool for the AT&T network, a way to manage the huge inflow of negative customer service calls and emails to AT&T wireless, or really a brilliant idea. But what I will say is that if AT&T does make the effort to reduce dropped calls, upgrade the network based on feedback, then all I have to say is Cheers AT&T, I will stick around even after your network looses the iPhone contract.
Lets see how much better Union Square (an iPhone dead zone) in NYC gets in the next couple weeks.
AT&T’s New iPhone App Lets You Complain About AT&T
AT&T’s New iPhone App Lets You Complain About AT&T
December 7th, 2009 | by Ben Parr20 Comments and 555 Reactions
iPhone owners may love Apple’s sexy mobile device, but they absolutely can’t stand AT&T. It ranks dead last in customer satisfaction for dropped calls and spotty 3G service, a sore spot that Verizon has been poking at with new ads.
Now the U.S.’s second largest wireless provider is looking to turn things around, hopefully before it loses iPhone exclusivity rights. Its newest strategy is especially unique, though, because it comes in the form of an iPhone app called Mark the Spot [iTunes Link].
The free customer service app is really quite simple. Whenever you experience a problem with your service (e.g. a dropped call, bad 3G connection, poor quality), you can open up the app and report the issue right where you are. Once you cite the problem and add additional info, it gets submitted to AT&T’s customer support team. The key to the app is that it’s location-based, meaning that AT&T can aggregate this data to find dead spots and trouble areas.
This app is simple but smart — it provides useful data to AT&T while giving customers an outlet for venting about their hatred for AT&T and how they wished the iPhone was on Verizon. Still, it may be too little, too late.
Following a flood of information about Moms
Now that I am a dad, and well my wife is a mom, and since I spent a lot of time working on brands such as Dove and Suave, I find the mom demo very interesting. I also love how we as users of social media can consume content in huge waves without really needing to dig very deeply and deliver much effort.
So today, while watching my twitter feed I came upon an event being hosted at Google called MomDotCom or in hashtags #momdotcom. I didn’t exactly attend the event but I sure did learn a lot about the mom demo.
Such as:
TV prompts search usage – 83% of moms search for products based on seeing product in TV commercial
78% of moms type in brand terms in search engines
67% of moms look for discount codes before purchasing.
Search is vital for moms
When it comes to food choices for mom “health trumps choice”
A new mom is created every 7 seconds in the US
46% of the conversations between moms and 6 month-olds involve the word “cereal”
and much much more here
Looks like the power is shifting
Well let me rephrase that, the power has shifted, and now publishers are just realizing it. .
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Web Publishers Fear Agencies’ Demand-Side Platforms
Web Publishers Fear Agencies’ Demand-Side PlatformsNov 29, 2009
-By Mike Shields
Top tier Web publishers–already wary of ad networks and exchanges–are growing increasingly squeamish about the potential impact of demand-side buying platforms created by the top agency holding companies.
According to sources, several publishers have discussed banding together to establish their own publisher-centric ad platform, designed to protect pricing and data for premium sites.
Some sites are advocating for the creation of some sort of top publisher ad network; a handful are even said to be mulling whether they should just say no to selling inventory to demand-side platforms such as Publicis’ VivaKi and Havas’ Adnetik.
At issue is the industry’s overarching fear of being further commoditized and disintermediated. In the last 18 months, the online publishing business has been rocked by a brutal recession and an ever-worsening overabundance of inventory, making business conditions bad enough already for sellers.
Adding to the mix has been the emergence of ad exchanges shepherded by the Web’s biggest companies—Google, Yahoo and soon Microsoft—along with new companies introduced by agency holding companies focused on purchasing avails for clients at scale.
Both these platforms are built on the premise of buying Web audiences using data and technology rather than selling ad placements alongside specified editorial.
