From the BlogSubscribe Now

The Rise of Micro-Education

Recently lots of folks have been talking about online education and where traditional schools will go long run with all the new technology available.

I personally struggle daily to keep up with all the new online learning platforms like MITx, OpenUniversity, iTunes University, KhanAcademy, Udacity, Udemy, Skillshare, Coursera etc. They are all evolving so rapidly, and all of them have great content in my opinion.

The fragmentation in the Education market is just part of the overall disruption that Peter Thiel called for last year.

If we look at the current technology market we see a major shift towards mobile as the primary interface. These new all in one devices like iPads are creating tons of new opportunities in how we consume information.

The list of sites above covers the following needs in the market:

  • Cost – most of the sites are free or low cost.
  • There are no entrance exams or exclusivity.
  • They are high quality original content.

What I don’t see in the current education disruption is the following:

  • A true mobile learning platform – are the sites above able to be viewed on a phone or tablet? Yes. But is the content optimized for a tablet’s features? No. There is no Path or Instagram in the Education industry.
  • A way for this education to turn into employer value.  Someone who can provide a standardized certification for employers will be a massive boost to the online learning industry.
  • The current crop of content quality is good, but there are no standards in place to keep quality high as people find ways to monetize this content.
  • There are no effective ways to test knowledge retention.
  • The formats are too long. Why does it take 10 weeks to learn something a particular subject? Can the content be on demand and still provide the same experience? Why are we sticking to the concept of credit hours in the online world?

With the steady decline of attention span in the US, wouldn’t it make sense to make education available on a mobile device, anytime and in tiny chunks?

Imagine for a moment if you could learn one function in excel as part of a larger curriculum in 2 minutes via mobile video. If you had questions you could ask the group or have someone walk you through it on your screen. Think of a mobile MOOC and Google hangouts. Now lets say that this 2 min course is part of a 2 hour block of curriculum that certifies you have learned the basic functions of excel. Once you get the certification it gets posted to your linked in profile so that employers know you have achieved a certain level of education.

Simple right? Digestable and best of all cheap. Here is the kicker, if you could charge 99 cents per 2 hour course, how many people would start to buy education? Especially if employers could verify that you completed each course?

The other version of this is actually broadcasting education on TV. Stations like PBS and Discovery were massively successful in the past for producing educational content. Imagine if there was a Harvard channel on-demand? Or a marketing class channel on TV? Ted Turner would support this. Why aren’t we able to produce content online and push it to TV? We are spending too much time trying to figure out how to get TV onto the computer.

The greatest thing about the TV format is that we are essentially sponges during the time we are watching. Education is the perfect thing to deliver via TV.

I am looking forward to the era of micro-education which employers can verify.


My Data Button Initiative for Education

The Obama administration announced a plan to help students access their own data from various schools via a simple button. The so called “MyDataButton” initiative is building on the success from the Green button for energy conservation and Blue Button for veterans to access their own data.

The plan has several objectives:

  • Standardize education data
  • Allow students to easily and quickly access records from multiple institutions.
  • Allow for the tech community to build new applications and strategies with public data
  • It will allow students to download their financial aid data so it can be imported to other programs

The initiative could lead to new funding opportunities for local communities, it could also give us a much better picture of how students perform by race, income level, location, household income etc. This data could also be used to preemptively spot lower performing students and provide them with more tutoring.

This series of initiatives could run into potential FERPA regulations but the government is treading lightly in regards to privacy issues. To find out more about the MyDataButton please visit the or the Whitehouse’s official statement on the Data Button.

What is the Minerva Project?

The Minerva Project is a new elite university created by Ben Nelson, the founder of Snapfish. It also has Larry Summers the former President of Harvard University for its board.

In this interview Ben Nelson highlights the core principles of the new university and some potential problems.

  • The Minerva Project is estimated to have its first class in 2014.
  • The school wants to evaluate students based on their ability to be “brilliant” and change the world. I suspect this means a change in how they look for students and potentially avoiding standardized tests.
  • The school does not have Accreditation yet
  • Tuition is estimated at $20k a year to start.
  • The school seems to feed off the high quality students that Yale and Harvard may reject.
  • It is largely lecture/discussion based and all online.

A few major issues with their strategy so far:

  • Their costs are estimated to be well above their revenue for a while. Without sustained funding the school will fail. Especially since they don’t have an endowment to fall back on.
  • There is no clear value proposition for a student that could go to Harvard to join Minerva. Most people who apply to Harvard apply to several schools. Where will Minerva fall within that list of priorities?
  • For high quality students, they usually expect scholarships. This adds on to the costs yet again and potentially may push away attractive students.
  • Professors are a wildcard, where will they come from? Will they be able to adapt to an online environment?
  • Who is to say that the costs don’t explode just like a regular university?
  • Will employers still value this degree?
  • Without accreditation will this school ever get off the ground?
  • Will their curriculum be relevant to real world jobs/careers?

This is one concept which has received a lot of money and has some major name backing but I am not really seeing a true differentiation point to their plan. As a parent or a student, I don’t see any reason to join a group of people who didn’t get into Harvard.  Perhaps I am missing something…



Virginia High School Students forced to take Online Classes

Virginia became one of the first states to require online classes and courses as part of the regular curriculum for 2013 high school students.

The original post is here. 

Why is this important?

It shows a few major shifts:

  • Public schools are worried about costs. Alternative delivery methods are not an option anymore, they are mandatory to keep schools within budget.
  • Curriculum changes too fast to buy new books all the time. This allows for adaptable curriculum without cost penalties.
  • Students are online or connected all the time. Why not bring the education to where they are instead?
  • This approach prepares students for mainstream online learning in the near future as more and more universities introduce online classes.
  • It takes advantage of new technologies that are becoming ubiquitous. Lots of people have laptops and more and more are buying tablets every day. These new methods of learning may increase retention through interactivity.

It will be interesting to see how the students evaluate these courses next year. I suspect the actual courses will evolve greatly in the coming years to better adapt to the technology.


Startups are Destroying the US Economy

In the past few weeks, I have been lucky enough to visit a variety of conferences regarding entrepreneurship.

One of the most recent events was sponsored by Bain Capital and the Accelerator at the University of Texas at Austin. It had three engaging speakers, a professor from Rice University who had done well in business, a CEO who had sold a company for over a billion dollars, and an entrepreneur who sold a small personal item belt.

During the course of the discussion I think most people discounted the entrepreneur who sold the belt, since it was low tech, it was a physical product and she had not taken money to develop her business. Kim Overton’s company SPI Belt is 100% bootstrapped.

People started paying attention her once she said that she was making close to $8 million dollars on these tiny low tech belts. And the kicker was that she didn’t have to answer to anyone and she still had 100% ownership. By most definitions she runs a successful small business.

Why I bring this is up is because it hints at an issue with American culture. In 2012, millions of entrepreneurs have taken the route of creating a startup instead of creating a small business.

The laymen distinction between a Startup and a Small Business is that a small business is an industry that already has a definitive revenue model. A startup just has an idea with no current revenue model.

From a macro-economic perspective, my personal take on this is that early stage investors are actually destroying value by taking a strip mining approach to entrepreneurialism. In a traditional strip mine, thousands of tons of earth are moved to find ultra valuable minerals in tiny concentrations. This is not sustainable since it disrupts the larger eco-system which doesn’t repair itself quick enough.

In current day startup investing billions are spent to find the next Facebook or Twitter.  On top of the engineering costs millions more are spent on PR to create buzz. In reality they are trying to be market makers to define the value of a particular technology.  Most of the PR is professing why you should be using X technology to share, communicate, be involved, engaged etc.

Daily, companies are funded that have no revenue model and intentionally shun traditional monetization programs like advertising.

Now, what are the effects of this approach?

  • Thousands of well educated individuals go into jobs being mainly compensated via investment capital or even worse shares of equity. This usually equates to a shoe string budget for the person and it greatly limits disposable income. From a macro-perspective I am sure that thousands of entrepreneurs choose not to buy a home or durable goods since they are not sure if their income stream is going to be consistent. This undermines economic value creation.
  • From a time perspective, if a young person spends 2-3 years in various start ups that all ultimately fail, this is time that could have been spent working in a traditional business driving real sales, and potentially more tax revenue.
  • They are repeating failure. They are encouraged to continue to take risks and continue to waste time and money. There are few instances within the Silicon Valley culture where people say “hey, I think you failed enough, I think it is time for a regular job.”  Silicon Valley has created a culture which is a kin  watching a gambling addict. They will double down on every hand even if they know they are going to lose.
  • Startups are fairly elitist. They look for people with pre-existing skills or a higher education in many cases. Startups don’t usually create jobs for under-educated people and don’t really have the resources to train people. Once again preventing larger economic growth for people who don’t have access to higher education.
  • Startups are clustered. The investment and startup community is rather incestuous. If you really want money for a startup the most common advice you will get is to move to Silicon Valley. This creates a brain drain in communities which need it the most and relegates them to stagnation. Imagine what would happen if those sample people stayed in their community, grew a small business and infused their enthusiasm to a more traditional business. Perhaps their community would start to see growth again and retain talent long term.
  • Start up culture has rebranded the concept of panhandling or begging. Asking for money in exchange for an idea/vapor is the exact same thing as begging. If you have no intent to ever monetize your idea but create really cool technology, your concept or start up is undermining fundamental business rules.

By now, most of your are thinking, this article is really offensive and doesn’t cover every start up. And you are right. I apologize for that. But keep reading it gets better.

Should early stage investors stop gambling on new ideas? No.

So what should change?

There are a few things that need to change to create more talent in America that generates real revenue.

  • An investor should embed startups with the concept that having a revenue model from day 1 is not only good but also necessary for funding. No exceptions.
  • Startups should understand that the ultimate goal is to get information about users and get more eyeballs. What that statement means is that ultimately we need to sell advertising/products to your user base. If you don’t feel comfortable with the concept of selling, you shouldn’t be starting something up. The other perspective on this is that your start up should reduce costs. EG – making transmission of data, faster, cheaper, easier. That is value people will pay for.
  • Larger companies need to restructure research in house. Millenials fear large companies since they appear to be boring, slow and lack innovation. Internal skunk works will create macro-economic value through salaries/taxes and potentially create new revenue streams for the company. Plus you get to train the person to work in a much more diverse set of individuals.   The idea of an internal skunk works department also helps keep knowledge in a system where it can deliver value now or later. If a start up dies, most of the knowledge dies with it. There are lot of start ups which come up with the same idea but with minor variations. If the core idea is corrupted or not able to make money, we are now wasting resources two times over. There really should be a site of concepts that never worked. F**Kedcompany used to be that resource.  I suspect that this site will come back very soon. The IBMs, HPs and Ma Bells of the world were some of the best incubators of all time. The US military is also one of the best investors on the planet. Why aren’t more startups aiming at being inside HP or selling to the US military?
  • The concept of early stage investing should always include mandatory focus groups and professional managers with a record of selling a product or service to customers. Focus groups of real customers keep your product realistic. Only work on ideas that people actually want and understand. Technology should work for us, we shouldn’t have to learn it.   Having a person on the team that knows how to make money will force you to compromise. This is a short term compromise. Once your company is large enough you can start experimenting more with “cool” features.
  • Investors need to get back to fundamentals of revenue and costs. Coming up with bullshit metrics to justify the company’s growth curve is selling snake oil. Time on site, number of page views, engagement, social velocity are useless terms unless your site has a true way of making money from all of those people.
  • Instill common values about not wasting resources, be it money, brain power, or time.  If you are interested in seeing how spending limited resources might actually cause  a collapse check out this MIT Study.
To really see any of this work, the unfortunate fact is that we need to re-align values. The only quick way that happens is through a major catastrophe or market crash.
For more information on how Silicon Valley was created I suggest reading the NPR series here. 
My advice for today is get off your computer/phone/tablet for a moment and look outside at a local business. Imagine how long he could give away his product for without you paying for it…The Internet is reality, it must make money eventually.
What I would like to augment in this article:
If there is a university researcher out there that wants to help me gather data on how much startups take from the economy and how much they actually produce, please email me! The only true way to verify the thoughts above is through hard statistics and defining if a dollar invested in a failed company actually creates any value, or if it is a 100% loss.
I welcome your thoughts/comments!


How Mobile Growth will Fuel Advertising for Years

The Business Insider put together a great presentation about where we were in terms of mobile growth world wide and smart phone penetration globally.

It had some amazing insights which are summarized here, but I also wanted to provide a perspective on how this may affect online advertising.

  • Currently 835 million smartphone users vs 5.6 billion feature phone users. (Keep in mind the number of phones is almost the same as the number of people in the world!)
  • Smartphone sales exceeded PC sales.
  • About 46% of US mobile users have a smart phone now.  So we are only half way through the transition to everyone having a smart phone.
  • SmartPhone Penetration is highest amongst the 18-34 group with income above 75k.  Soon the trend will be everyone.
  • Android and iOS are dominant. But developers prefer iOS due to Androids handset fragmentation
  • Mobile ad revenue is estimated at $800 million currently. Google is dominant taking 64% of the market share.
  • Only 1% of ad spending goes to mobile currently, however the consumer spends 23% of their available time on a mobile device.
  • Apps can generate a ton of revenue on mobile platforms and spread very quickly. However, overall share of mind is limited. Each new app may take user time away from another app.

What does all of this mean for the future of online advertising?

There are a few things not mentioned in the presentation which may help us understand how this will affect online advertising.
When people are online at their computers, or watching TV, they always have their mobile device with them.
Most advertisers already realize this and have started to launch integrated ad campaigns which ask you to complete an action on your mobile phone while watching a show. Twitter and TV integration is quite widespread now, you will notice most shows now have hashtags on the screen during the show.
The possibilities of how these two industries will be integrated is quite limitless. For general marketing purposes I think you will start to see overall ad budgets increase overall. The whole advertising ecosystem must be looked at in a holistic manner.  Often times TV ads actually boost the performance of online ads since they ad validity to the company advertising. EG – If they can afford to buy a TV ad they must be a real company and somewhat trustworthy.
On slide 27 of the Future of Mobile deck, you can see that TV still gets the lion share of ad dollars. I don’t see this changing in the near future. Especially as TVs become more connected. Once Apple or Android release a TV/Computer hybrid you will see a massive change in your TV experience. Imagine having a prime time show up and a browser window up on the same screen, and a mobile device on hand.  Also, it is highly likely that your phone becomes your remote. Not only is it in the room, it will actually be integral to your viewing experience.
Consumers will have incredibly short attention spans since they are trying to pay attention to multiple devices at the same time.
What we have established here is that the new electronic mediums play nice with technologies like TV and Radio.

Does Print Media have a future?

In my opinion, no. Print and digital devices are redundant. Even as much as I like holding a physical book or newspaper, the ability to deliver content faster and cheaper online will win.
Print excluding things like billboards (there is no replacement for those yet) takes a huge amount of ad spend but yields low results. The postal system is a key indicator of this industry collapsing. People are able to get their NY Times on the iPad now. Why kill a tree for something you are going to read for 5 mins?

Will the desktop still matter?

In the short term (2-5 years) people will still use desktops since they are important in work environments and portable devices are simply not big enough or strong enough for an 8 hour day.
Web based ads served to desktops and laptops will be important but the level of targeting will be antiquated compared to things we will be doing in mobile. For decades people have been able to pick demographics to target, but micro-targeting based on demographic, time, location, who you are with, personal influence, etc… will increase click through rates and overall engagement.
Ad networks will take that and charge premium rates due to the high level of engagement. Expect mobile ad rates to go up but not skyrocket. There is a ton of inventory out there. If supply was limited it would make the rates skyrocket, but inventory is outpacing advertiser interest at the moment.

As a media planner where should I start buying?

If you are an online media planner, it is important to learn how to buy on TV. I can’t stress this enough. The online world and TV will merge. Not knowing how to buy on both platforms will hurt your career and your clients.

Secondly, start setting up test buys on mobile. Inventory is cheap now, you can afford to make mistakes. Focus on what happens from an operations perspective to make sure the customer’s experience is a high quality, and quick experience with your company. Focusing on your short term eCPM or eCPA will not give you the learnings you should be focusing on.

The key to a long term strategy is really designing a pleasurable customer experience on a small screen or via voice.  That is what makes people buy, come back, and tell their friends.  Creating an experience that mimics your web checkout or form flow will kill your campaign. No one wants to fill out 15-20 fields of info on a tiny screen. Time is crucial. Most people will have various push notifications, text messages, new emails and other distractions coming through during your checkout process. Making sure your flow is quick is not just important it is the cornerstone of your mobile strategy.

Sometimes as a media planner, it is important to know where not to buy. It is time to move away from print. Go up to any hipster and ask them the last time they bought a magazine or a newspaper. Most likely they will spend their $3 on a fair trade cup of coffee instead of a magazine they can get online for free.   Print media has no reliable metrics. With so many tools available these days, why invest in something that can’t tell you if it was the right choice or not?

Mobile is just getting started. Start now, learn while it is cheap. It is our inevitable future.

Exponential Interactive IPO S1 filed

Exponential Interactive, an Emeryville, CA based ad network filed for an IPO on March 16, 2012.

The Exponential Interactive original S1 can be found here.

Here are some interesting details from the S1 filing:

  • Exponential’s CEO – Dilip DaSilva owns 74.90% of the shares currently. His family trust also owns an additional 5.11%.
  • They are looking to raise around $75 million dollars
  • The current stock price for accounting purposes is $2.75. This assumes a 6.5x multiple.
  • They are operating in 25 countries.
  • They have closed down their EDU lead generation division and are in the process of transitioning the clients to CPM buys on the core network. Their EDU product generated 5% of the 2011 revenue which equates to ~$8.45 million dollars. If they can not transition these clients to the CPM side of the business they expect to see a 5% decrease in revenue.
  • The Full Tango direct response is not mentioned much. In fact revenue is not really broken out by division.
  • The majority of international growth is coming from a physical presence in each country and increasing the number of sales people internationally.
  • The acquisition of AdoTube, a Ukranian video site will cost Exponential around $19 million dollars after all the earn outs are completed.
  • A major margin builder for the company has been acquisitions of content sites like
  • 2011 Gross Margin is 43.3% which is slightly above the industry standard of 40% for ad networks.
  • Gross Revenue Growth from 2010 to 2011 was 35.2%.
  • Stock symbol will be “EXPN”
  • International revenue grew 80% from 2010 to 2011. US revenue grew 20% in the same time period.
  • AdoTube generated around $10.3 mil in revenue in 2010 at a 54% gross margin.
  • $14.2 mil in cash on hand at the end of 2011.

Overall, Exponential is a solid company throwing off a healthy amount of cash each year.

There are some concerns to note in the S1 which could play into things over the coming months:

  • A change by large competitors like Google, Facebook and Yahoo! could alter the advertising landscape completely.  Is this anything new? No, but a company’s ability to navigate these changes and adapt to them will be key to their long term success.
  • The CEO is named as a risk because of his involvement with the core technology and his large percentage of ownership.  He has had a solid track record with running the company but how will the pressure of being a public company affect him? Will he be able to balance working with shareholders and working on the core tech platform? If not, will Alex the CTO be able to lead the tech platform into new areas?
  • There is no clear mobile strategy. Mobile ad inventory is increasing rapidly and taking away from desktop based inventory. Engagement rates are sometimes higher on mobile devices which could lead to greater top line revenue. However, Exponential does not mention a clear way to penetrate this market. This could severely limit growth potential long term.
  • Their international footprint is highly subject to currency fluctuations and global economic factors.
  • More than 80% of their revenue comes from recurring clients. Are they able to penetrate into new advertisers or has their inventory not that attractive? Or have the advertisers started to move more budget towards social platforms like Facebook?
  • From a competitive standpoint, it is hard to say if any of the ad networks have technology that is really differentiated. Even if they do, the lead that may develop from a differentiated technology is mitigated by the inventory they represent. The core of the network is really the relationships they maintain with their publishers. A significant risk is that these publishers are rarely loyal.

The above information is not intended to be financial advice in any way.


The New iPad and the Future of Display Advertising

As many of you know the new iPad was released on March 16, 2012. From an app developer standpoint thousands of developers had to upgrade their app’s graphics to take advantage of the new Retina display.

Older apps that were graphics intense looked very grainy. Apps that relied more on elements that were scalable by CSS tended to adapt without much modification.

What does all this mean for Display Advertising?

If you already have a new iPad go to You will notice the images on the page look grainy and the 300 x 250 ad unit at the top right looks very grainy. Any of the standard IAB ad units look grainy. To test this on using an iPad simply “pinch” the page and as it gets smaller the pictures and text in the ads will actually look sharper. This is because you are getting closer to their native resolution.

There are several potential problems with grainy ads on websites:

  • The ads will have a lower click through rate since they look un-professional
  • The ads do not adhere to brand guidelines creating an inconsistent brand experience
  • The publisher of the site may see lower revenue due to the lower click through rates.
  • For readers with vision problems or older readers the ads will be even harder to read. Naturally if your eye can’t read it, it skips over it. Once again bad for CTR rates.

What is causing my ads to look grainy or pixelated?

  • Your ads are most likely adhering to a very old file size limit that most ad-servers have built in. The file size limit was created to ensure that the ad renders quickly even on slower connections. As broadband penetration has increased file size limits have not really increased much. Essentially everyone still plans around the lowest common denominator accessing your site. Decreasing the file size and compressing the images makes them less scalable on larger screens and therefore causes the graininess.
  • Graphics that usually have a max file size, look decent on high resolution monitors and can be easily scaled down to fit older lower resolution monitors. The issue is that most images can not be scaled up to accommodate super high resolution screens like the new iPad.

What can my website do to look consistent on the new iPad?

  • For starters, check out how many people are actually accessing your site via the new iPad. You can see this in your Google Analytics data. If you don’t have a lot of people accessing your site via an iOS device, I wouldn’t bother with any changes.
  • A simple brute force change you can make is to upload higher resolution images to your site. This will slow your site down but it will keep the look and feel of the ads consistent.
  • You can implement a different CSS specifically for the new iPad. This is not recommended since you will end up rebuilding these style sheets every time a new product is released.
  • You can code your site in responsive design to accommodate for various screen sizes. Since the pixel count on the new iPad is so high, that actually becomes your largest canvas and you then work to scale the site for various screen sizes from there. The benefit here is that you are not designing for a specific device and it is much easier to maintain.
  • If you are using a third party ad network to fill your inventory ask them to only traffic ads with high resolution on your site.
  • Last but not least write into your ad network and ask them for a larger file size limit or ask them for different versions of the ads. The other option you may have is to ask for text only ads which are not flattened into images.
  • Lastly, you can use smaller images which may not show the grainy or pixelated effect as much.

What else should I be thinking about?

Since this affects all images on your website, it is important to test your website on variety of devices. I would strongly suggest going to your local Apple store and pulling up your website on one of the new iPads to check out how it renders.

Another key thing to think about is if you are using landing pages, those are usually graphic intense but highly compressed. Make sure those pages render to the original intended quality.


Google Attacks Head Terms through Semantic Search

The Wall Street Journal announced that Google will be updating their search algorithm in the coming weeks/months.

There are some important changes that could affect the lead generation industry that you should know about.

First, what is “Semantic Search?”

Semantic search is basically understanding the context in which you ask a question. This is how Siri for iOS works also.

Example – Lets say if you are talking to your friend about a future trip to Las Vegas. Your friend already knows you love good steaks, so the first thing out of their mouth is “you must check out this steak restaurant at the Palazzo!”

The semantic aspect of this is that your friend has known you for years and knows your likes, dislikes and your budget potentially. They use their own experience to quickly rattle off a handful of things you can do in Las Vegas.

Implications in search.

Most likely you are not having a conversation with your Google page. You enter in short search queries in hopes of researching various topics. EG – “Things to do in Vegas.”

With the new search algorithm Google may recommend a list of things to do and may push down other organic results. It may also determine that a restaurant ad is more relevant to you rather than a flight advertisement.

How does this work?

Google being Google does not release much detail but they say it is based on “attributes” from your personal search history, various websites and other common searches. Google is trying to become skynet in someways.

Why is Google doing this?

Lots of reasons!

  • Google is battling Facebook. They know Facebook’s search is horrible. Most people still need to get info from Google. By making search potentially more context based, it may increase usage of sites like Google+ (this is a really convoluted way to get more users)
  • This user flow is really tailored towards mobile users. Making Google a 1 page website and offering multiple types of results for one search is key to increasing user interaction.
  • This user flow is also great for a voice based mobile device. Imagine calling Google and getting this information read to you? At the end of the call it will ask you to connect to X advertiser. Return of the click to call lead gen model!
  • SEO has created a sea of garbage websites. Google knows no one goes past page one of the search results. Making page 1 more relevant is key for them long term. Creating content for Google via SEO and not users is counter -intuitive long term. They are hoping this allows them to be more useful. Creating a pivot this large is pretty scary. It is like transitioning everyone on Earth from gas to electric cars. You have already built a huge infrastructure around gas, the switching cost is pretty high.

What does this mean for lead generation?

Google is no longer agnostic. They are your competitor and friend at the same time.

Head terms are going to be affected the most. In the WSJ article an early alpha tester said it could change up to 20% of your search traffic. This is huge.

It is hard to say if this is going to affect long tail terms in the short term but if the system learns fast enough, this should have an equal affect for head and long tail terms.

From a PPC perspective, it should technically drop the number of impressions you get. It should technically increase your CTR if your ads are highly targeted. From a conversion perspective, it really comes down to how your ad groups are structured. If they have specific term groups but general landing pages there is an argument to be made that your C2C will actually drop, but that is not a new statement.

What will be the effect on Google’s stock price?

In the short term I can see this potentially lowering revenue. If such a massive portion of your revenue comes from advertising and linking to your index, presenting information before the click should technically reduce revenue.  In the short term I would say there is a dip in their stock price and long term I could see massive growth based on the mobile usage. Most likely analysts will jump on this and push the stock lower to create a lucrative short environment knowing full well that the long term is positive.

This is assuming that they don’t launch any new revenue models like the “speak to connect” ad model. Given that mobile usage of Google is increasing fast, the attention should be really on how can you get in front a mobile user with semantic search. Without knowing more about Google’s Semantic Search, it will be hard to recommend anything at the moment. I strongly suggest contacting your Google Rep for more info.

Thoughts? Comments? If you have an inside line to Google what are you asking them?

SXSW Thoughts 2012

SXSW is still going on in Austin at the moment but the EDU and Interactive conferences are officially done.

How was SXSW? Massive. The conference literally is a city by itself. Multiple venues, 20-30 sessions per hour and thousands of parties. Over 250k people will come to Austin for SXSW this year. That is over 30% of the normal population of Austin.

I thought it might be good to summarize what SXSW Interactive really talked about.

Major outcomes/themes of SXSW 2012.

  • Healthcare is the new social. The government is eager to clean the mess we call our healthcare system. The open health data initiative ( is key to this. Lots of money will flow to this tech sector since there are healthcare companies with deep pockets to buy it.  Simple projects like provide massive value to companies like Aetna.
  • Education needs reform. In the short term the attention will flow to social teaching platforms but there is little money to be made in this sector without the help of student loans. I suspect reform in this sector will be hampered by revenue model issues. The tech folks that focus on creating solutions for the K-12 public school sector will see the most traction in the near term.
  • Social is a bubble. Very few if any social apps or sites have any revenue. It is inevitable to have these sites collapse unless they embrace something like advertising. Most of the apps at the show were features of another site like Facebook. Few if any had original technology that didn’t depend on the Twitter API, Google Maps API or Facebook API.
  • The 2012 election will be decided on social. Focus on transparency, fact checking and online donations will drive the new candidate.
  • TV is not going anywhere.  Former Vice President Al Gore said no current technology rivals the richness of TV in terms of content. The goal is not to replace TV but converge with it. TV based social apps will drive much higher advertising rates in the near future.
  • Google may not be the winner in social but they still command a large amount of your daily internet time. Fragmentation between Google+ and Facebook is not helping the consumer.
  • Android still doesn’t get any love. Developers are still choosing to launch apps on iOS first. This was really shocking to see considering the Android phone penetration. Nokia and Blackberry have been thrown to the side of the road. They are no longer relevant.
  • Mobile Marketing is still in its infancy. Mobile ad formats are inadequate and there is a large lack of understanding of how mobile advertising currently works.
  • Near Field Payments or NFCwill become mainstream at the end of this year. Companies like ISIS and Google Wallet will lead the way. This will be a massive change to the US Economy over the next 18-24 months. If IPhone 5 has NFC in it, it will solidify the concept and push it mainstream. Almost all Android phones will have it by years end.
  • Privacy will be a renewed movement. People’s social profiles have gone out of control. Many people expressed concerns about not sharing pics of kids and family on Facebook anymore. Newer more secure platforms will start to gain traction. Try out for example. Apps like Highlight are overly socia in my opinion.
  • Portals are returning. Sites like, etc are just a re-skinned form of Curation of the internet is necessary. None of these sites have any way of automatically filtering for you, they are all socially sourced. People are throwing tons of money at these ideas. Welcome to 1999 again.
  • US interactive business models don’t always translate to other economies. But the bigger ideas are easy to copy and implement locally. Think Ren Ren, Yandex, Baidu etc.
  • eBooks are coming of age. The iPad, Kindle and Nook are going to create a whole new type of book, newspaper and magazine experience that really shows what HTML 5 can do.
  • Event Planning apps were a big deal. Apps like Schemer and Glomper made some traction.
  • Apps became creepy. Apps like and Highlight know, display and share everything about you.

Overall, SXSW was a really enjoyable event. It is hard to digest but if you pick off the things that interest you the most, you can really get a lot out of it. The US economy is for a massive change this year.  Keys to having any of these predictions/statements come true will be dependent on the 2012 Presidential election.