At LMS: SES Mobile, 700 MHz and ‘Dream’

Here are recent posts from Local Mobile Search:

• Bar Codes and Camera Phones: Google May Help Mainstream
• Coverage of SES Mobile Session: How Big is Local?
• Google Happy about Spectrum Auction Outcome
• Do Androids ‘Dream’ of HTC or Samsung?
• 700MHz Non-Surprise: Verizon & AT&T Win Auction Blocks

Turning Display Ads into Directional Media

I wrote below that consumer privacy concerns may create problems for publishers, ad networks and advertisers seeking to turn aggressive targeting into greater relevance for display ads just as brand advertisers are starting to shift big dollars online.

However there are interesting potential alternatives to BT for display, which include units such as Linkstorm’s overlays, widgets (e.g., Google Gadget Ads), brand advertising in search results (see also here), and other interactive display units such as Admission’s dynamic platform.

Here’s an example of the latter’s inventory based display advertising:

Clicking on any of the individual cars opens a window as follows that becomes a lead-gen form (and could contain video):

These sorts of ads can take ride on top of BT; however, more importantly, such units can be effective outside of it. They can be targeted contextually to the content of a site or to a geography or both without relying on any consumer data mining. Consumers interact with the ads and then self-select, turning a display ad into “directional advertising” — the equivalent of the behavior that has made search so effective. (And some of these ad units include a search box as well.)

As mentioned, there are a range of companies offering display advertising with interactive capabilities or elements. But if legislation or regulations are enacted that require tracking notifications and consumer opt-out opportunities, these sorts of alternative strategies to make display ads more effective, by making them highly interactive, are going to be the way that the industry needs to go.

See this related piece I wrote at SEL regarding branding in search results.

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Disclosure: I’m an advisor to Admission Corp.

ISPs Get into the Ad Game

There is a movement afoot for ISPs to get into online advertising, in terms of providing data support and tracking for ad serving purposes. Phorm in the UK and and ISPs in the US are seeking to take data on users and their behavior and factor it into online ad targeting.

From a “local” standpoint, this will potentially improve geotargeting. But the emphasis and focus of discussion is on BT and serving brand advertising that relies on deeper data mining about individuals. In my opinion, BT may ultimately collapse under the weight of its own “greed.” It reportedly works but there are going to have to be very high-profile and voluntary consumer privacy measures taken by the involved companies themselves or outside forces are going to try and reign it in.

BT is fairly shadowy right now in terms of consumer awareness and understanding. Consumers want more “relevant” ads but are also uncomfortable with being “tracked.”

While US regulatory agencies are generally ambivalent about consumer interests and tend to favor business, in Europe the European Commission is going much farther to safeguard privacy. We may see some fairly aggressive positions taken in Europe that require actions on the part of search engines and portals at odds with BT capabilities and objectives. It’s not clear at the moment what these might be as a practical matter.

Privacy is a once again a huge issue (see my post on Google Health and consumer privacy).

The online ad industry’s general disregard of the consumer — notwithstanding rhetoric to the contrary — and its desire to offer ever more specific and powerful targeting capabilities to marketers may ultimately “kill the golden goose” by failing to properly self-regulate or educate the public and legislators.

Search is largely immune because it’s “directional” and doesn’t rely on data mining, although Google has experimented with BT in search in the form of ads based on past queries.

EU Review of Google-DoubleClick Acquisition

This is not a surprise, given the difference in the way that the US and Europeans dealt with the anti-trust case against Microsoft. The company essentially “got off” in the US, while the Europeans were much more aggressive and harder on the company. So too with review of the Google-DoubleClick acquisition.

I anticipated that the Europeans would bring more scrutiny to the deal. I would be surprised, however, if they prevented it or required major concessions from Google. We’ll see.

Will BT’s Wings Get Clipped Prematurely?

The success (or failure) of the still-nascent behavioral targeting (BT) online ad segment will depend on public and Congressional perceptions of the technology and how intrusive it’s seen to be. BT and a number of related, targeting variations are being seen as critical to the performance of display advertising online and are often celebrated as the cure to historical “banner blindness” (so is video).

If consumers have to see ads, almost without exception they would rather see ads that are more “relevant” to their interests and needs than ones that are not. However, the concept of being tracked by publishers and ad networks in order to deliver those more relevant ads is unsettling to many.

Thus AOL (which acquired BT firm Tacoda) has proposed allowing consumers to “opt-out” of BT style targeting and tracking. And then there’s also the proposed “do not track” list that would be to online advertising what the do not call list is to telemarketing. There’s also a US FTC “town hall meeting” coming up later this week to examine “behavioral advertising” and its impact on consumer privacy.

The AOL opt-out initiative amounts to something of a proactive or call it a preemptive effort on the part of ad networks to prevent BT from becoming a PR liability, as click fraud became for SEM. But there’s also heat coming for privacy advocates who want to see significant restrictions imposed on consumer tracking, which is central to BT.

If you ask consumers “Ads or no ads?,” they’ll opt for the latter generally. Indeed, the bulk of the action surrounding BT and whether or not it gets regulated is about framing, perception and, to some degree, semantics. Indeed, “relevant” ads are desirable, while “behaviorally targeted” ads are not.

Monday Roundup

Over the weekend, the WSJ (sub req’d) speculated that Google would soon be acquiring Adscape Media, which inserts ads into video games. Microsoft bought Massive, which does the same thing, last year. This of course makes sense for Google as it seeks to expand its reach. According to the Entertainment Software Assn., about 60% of the US population plays video games. It skews about 60% male (not as high as one might think perhaps) and a the average age of game players is 33 (I’ve seen conflicting data on this point). The point here is that gaming is a multi-billion dollar market with lots of users.

The NY Times over the weekend ran a piece about using ads in mobile to subsidize mobile Internet access or higher cost services like video. In other words, people will be asked to accept ads (opt-in) in exchange for lower monthly wireless bills. While this looks good “on paper,” I’m doubtful that this will be a mainstream phenomenon unless it is very carefully executed. From the article:

“I would not want them on the phone even if that would help cut costs,” said Conor Kelly, 20, a student at Savannah College of Art and Design in Georgia.

MarketWatch ran an interesting piece on the traffic controversy and an audit of Nielsen and comScore methodology going on now. This is a chronic problem in the industry and affects things like ad rates and stock prices.

Here’s a GigaOM post on telcos rallying around to promote Net non-Neutrality to defend against Google et al. AT&T was forced to make certain neutrality concessions prior to gaining approval of its BellSouth takeover. I believe, however, this is ultimately a self-defeating move by the telcos and they should just compete more effectively (if they can) rather than pursuing government protection of their franchises. (Yahoo!’s in an interesting position here given its relationship with AT&T.)

IBM said it will build social networking features into its Lotus software with the enterprise in mind. And the NY Times featured a wide-ranging article on social networks and how “big media” have fully embraced the phenomenon. Now that “everybody’s doing it,” publishers will find that not everybody will participate and it can’t be done in a perfunctory way. Just because you build it doesn’t mean they will come.

In a related article, here’s CNet’s Stefanie Olsen on children and their expectation of and control over on-demand media.

Steve Case’s vertical portal RevolutionHealth launches today. This is a hot and increasingly competitive segment with an anticipated Google Health on the way. Here’s the WSJ story. The business model is low-end free with premium (consumer pays) services. Whether this strategy is viable depends on how good the content and site are vs. free competitors such as Healthline and WebMD.

Travel site Farecast launches “airfare insurance” program Fare Guard. This product, critical to the site, offers to pay the difference between what you may have paid on Farecast and a lower fare that may occur after your purchase. In my view this will NOT help the site gain traction because it requires too much of consumers. Farecast is ultimately a feature of a larger travel site and not a site unto itself.

$100 Laptop + Writely + GDrive = Now I Get It!

Ever since it was announced, I have been fascinated by the potential appeal of the $100 laptop developed by MIT, with the backing of Google and AMD among others. It's now in production. I've written about it a bunch in the past and won't reproduce all those comments (or links) here. I said originally this is the realization or "second coming" of Oracle's Larry Ellison's "network PC" idea, which was a response largely to Microsoft's market position and power. Google co-founder Larry Page in his CES Keynote mentioned the low-cost machine as a way to overcome the first-world, third-world digital divide.

Bill Gates doesn't like the idea for several obvious reasons (neither does AMD rival Intel). But more importantly he doesn't think that consumers will like it. In a somewhat related vein, Microsoft has touted Origami as a response to the size/power/functionality challenges of mobile computing (the price range is $799 to $999).

I do think that consumers will be interested in the $100 computer (there's already considerable evidence). The current "hand-crank" design may have less appeal to certain consumer segments than it could but design elements can be changed over time. Alternatively it may indeed turn out to be a product for emerging markets (I don't think exclusively so). That's still millions upon millions of potential customers.

The thing that struck me tonight all about all this was that a kind of global vision for Google comes into focus. People have been speculating for the last couple of years about a GoogleOS or a GooglePC. There's no GoogleOS, per se — although there is GooglePack and the deal with Sun regarding OpenOffice. And now there's the Google acquisition of Writely. And then there's GDrive.

Let's put aside the major, major privacy issues that may prevent GDrive from really hatching into a full-grown butterfly. Having made that very important qualification, let's step back and look at the really big picture here:

1. Low cost computers that don't have big hard drives (say the $100 laptop or similar device)
2. Ubiquitous high-speed access (see GoogleNet or FON)
3. Web-based consumer software apps (e.g., GMail or Writely)
4. Virtually unlimited personal online storage (GDrive)

Now you see where I'm going.

This is not to say it's the same place that Google is going. But from one point of view it's certainly a compelling roadmap. Google thus would be the network and host most of the necessary software. Google and its allies would thus replace Microsoft as the primary computing platform — swapping the Internet for client-side applications. Microsoft sees the storm clouds on the horizon and that's why I among others believe it's pushing Live (in addition to the market segmentation value there).

The supreme irony of all this is that while Google genuinely wants to offer value to consumer-users it doesn't as clearly recognize how the realization of its vast ambitions would effectively turn the company into Microsoft (maybe it does), in terms of market domination and corresponding suspicion (which already exists). Microsoft, for its part, is now cast as the underdog and "good guy" when it comes to the Internet. That is an amazing turn of events — and not lost on the people in Redmond.