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April 25, 2008

Brotherly Love

kenever3 My colleague Mel Carson e-mailed me today with tales of the debauchery that ensued at the London launch of Brian Clifton's Google Analytics book (actually, it sounds like it was quite a sedate affair). Mel mentioned that some folk he'd been talking to had asked, "What's happened to Ian Thomas? He's disappeared!"

Well, of course, I haven't disappeared. Here I am, still blogging away, speaking at trade shows, and generally fighting the good fight. But my role at Microsoft has changed over the last few weeks, and now seems like a good time to tell you about it.

You may know (because I delight in telling people an any opportunity, in a "you kids don't know how easy you have it" kind of way) that I've been involved with web analytics since I helped to set up WebAbacus in 2000, building that business up for 6 years before coming to Microsoft and working on (amongst other responsibilities) the Gatineau Analytics project. Considering I originally got into web analytics by accident, it's been a pretty smart career choice, and a steady companion these past 8 years. But time for something of a change.

One of the things that always attracted me about coming to Microsoft was the opportunity to engage with the online marketing industry in a broader way than through the (relatively) narrow lens of web analytics. I now have the opportunity to do that through my new role, which goes by the grand title of Director of Ad Platform Evangelism (those of you who were alive and watching telly in the UK in the 1980's will now see the relevance of the image at the top of this post).

The "Evangelist" role is a well-established one at Microsoft, and provides a direct connection between our technical teams within the company and the technology folk at our key customers. It inhabits that huge grey area between traditional marketing and day-to-day technical support. Google has them, of course; so does Amazon. So I'm in good company.

Evangelism in our Ad Platform group is a pretty new concept; in fact, even the idea of an "Advertising Platform" (where "platform" means a technology environment that is created to allow others to add value and build services, in the sense that the "Windows Platform" does) is a pretty new one to Microsoft. It has a lot to do with our acquisition last year of aQuantive, and much fascinating work is going on behind the scenes here to make the most of that acquisition, as you'd imagine.

So my new job is to spend lots of time with our advertiser customers and agency and publisher partners to introduce them to the emerging platform concepts that we're working on, and (most importantly) to get their feedback about the way we're thinking and the stuff we're building. You'll see a difference here on the blog, as I post a broader range of articles, such as this one about the new things going on in publisher ad serving. I have to tell you that I am seriously excited about all the stuff that's going on in the industry right now.

If you are currently wiping a tear from your eye at the loss of my brilliance to the web analytics industry, put your handkerchief away - one of my focus areas will continue to be data and analytics, particularly as it relates to online marketing measurement, conversion attribution and ad inventory yield optimization. Which means that I'll still be coming to E-metrics in SFO next month, and will be there at the WAWoT if you want to come and congratulate me/mock me/buy me a drink/poke me in the eye/all of the above.

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April 20, 2008

Yahoo AMP vs Google adManager

newspapers_400 The last few weeks have seen plenty of interesting announcements from our esteemed competitors, Yahoo! and Google. But two that you might not have paid so much attention to are are Yahoo's launch of AMP! (those guys have got to get over this whole silly exclamation point thing), and Google's new AdManager product. Both are aimed at making it easier for publishers to sell their ad inventory, though both are part of a bigger story.

Sometimes it seems like publisher ad serving is the red-headed stepchild of the industry - frowsty, boring technology used by publishers and ad sales houses to push inventory around from pillar to post in an attempt to get it off the publisher's hands before it goes stale. But publisher ad serving has one killer attribute - whoever provides the primary ad tag on a publisher's site can control (or at least influence) how that publisher's inventory is monetized. Control that tag, and you're the nightclub bouncer, magnanimously letting the pretty girls in whilst keeping the spotty boys out. If you're just another ad network serving ads into that ad unit, you're the spotty boy hanging about the back door. What's more, whoever owns the primary ad tag gets to see all the traffic data, a treasure trove of information for anyone trying to build a behaviorally targeted ad network.

So, since Google and Yahoo now both have significant ad network operations (AdSense and YPN), it makes sense for both of them to offer free ad serving technologies to publishers. How do they stack up? Should they even be compared?

Yahoo AMP

yahoo-logo-gold Yahoo has been working on a new ad platform/exchange for some time, under the title of Project Apex. Some noise was made about Apex shortly after Jerry Yang took over Yahoo last year. The offering is aimed at publishers, and purports to offer a radically simplified/more powerful way of managing and monetizing online ad inventory. Reaction to the announcement has been mixed; the Yahoo Publisher Network (YPN), which AMP is seen as an evolution of, has been dogged with editorial quality issues, affecting advertiser ROI and driving advertisers into the arms of Google. So a certain amount of skepticism attends this latest announcement.

There's relatively little publicly available information to help differentiate AMP from YPN (and Yahoo aren't likely to tell me much for the time being). The main theme seems to be that AMP is a much more 'open' platform than YPN, meaning that publishers can use it to direct inventory to any third-party ad network or advertiser, without having to have Yahoo 'represent' (i.e. take a cut of the value of) their media. The video preview of the technology also makes much of a publisher's ability to cross-sell other publishers' inventory as part of a negotiated sale, by tapping into Yahoo's Newspaper Alliance network.

Additionally, there's talk of an API, enabling ad networks to integrate with the platform. In this latter respect it's hard to see a clear difference between this offering and the Right Media Exchange (RMX) - in fact, a previous working title for AMP was the Advertiser/Publisher Exchange.

It's too early to say whether AMP is actually any good, though the demo looks pretty and appealing - the principle danger is that Yahoo is re-re-inventing the wheel here, potentially ignoring the YPN and RMX code bases and coding something new from scratch. And the effort does seem to be squarely in the negotiated space - i.e. the sort of inventory that is Yahoo's bread and butter; we can count on Yahoo knowing a thing or two about this kind of inventory, but I wonder how it's going to address the highest-growth part of online ad sales - the tail.

In September, Jerry Yang said that AMP would take three years, which seems to imply something of this nature, and which caused gasps from the likes of ValleyWag at the time. But now Yahoo says they'll have something out during the summer. Presumably they'll have a lot more to add even then.

Google AdManager

gam_logo_main A couple of weeks before the Yahoo announcement, Google announced the beta of Google AdManager. The timing of Google's announcement was significant (or at least an unfortunate coincidence) because it almost exactly coincided with the completion of Google's acquisition of DoubleClick. AdManager (which shares a name with a Microsoft product, Atlas AdManager, which I believe is the subject of some discussion of a legal nature between our two companies) is positioned as an easy-to-use, self-serve inventory management tool, allowing publishers to manage their reserved and discretionary inventory, and select ad networks for the latter (including, crucially, Google AdSense).

The motivation behind AdManager (and AMP) can be seen in a quote from MyYearbook.com on the AdManager website (my highlighting):

"The AdSense integration feature has been helpful with helping us optimize our remnant inventory. There have been numerous days where we made more money because Ad Manager was able to auto adjust and send AdSense more inventory."

It seems like the primary positioning of AdManager is as a trade-up from AdSense - for publishers who have been using AdSense and perhaps another ad server (or doing something clunky like serving ads manually), AdManager represents the next step up, as this comment from this forum thread shows:

"What we used to do before is, insert the adsense code or any other affiliate banner code in the adslot MANUALLY! If you want to insert adbrite code there instead of adsense code, we will edit the code and upload it right?? OR some people also use other PAID third party hosted ad servers/their own ad servers!."

The interesting thing about this announcement (and the reason the timing seems so unfortunate) is that DoubleClick already has a publisher ad server on its books - DART for Publishers (DFP). DFP ain't no slouch - it's the market leader, with about a 60% share (our own Atlas AdManager, by contrast, has about a 10% share amongst publishers). But Google AdManager and DFP fulfil very similar roles - helping publishers to define, predict and sell online inventory. So it will be interesting to see how this situation plays out now that the DoubleClick acquisition is closed.

What's also interesting about this product is what it says about Google's innate attitude to online advertising - that it is a process that should be simple and as automated as possible.

Compare and Contrast

So the bottom line is that these are two quite different products, aimed at solving a different set of problems. But these two products paint a fascinating picture of Yahoo and Google's attitudes to online ad sales.

Yahoo seems to be thinking of itself as a semi-neutral ad network/exchange, enabling its publisher partners to build and sell their own on- and off-network inventory packages and then clear/settle them through Yahoo's infrastructure. Even Yahoo's Newspaper Alliance is itself a member of a larger network, quadrantONE. AMP will scale well at the top-end of the market, but its features will mean little to smaller publishers who just want to monetize remnant inventory simply.

Google, on the other hand, seems to view itself as the uber-network. This is understandable, since it has such a huge network of publishers via AdSense. AdManager seems primarily to be aimed at increasing the amount of inventory that is made available to Google's network, as opposed to allowing publishers to build their own mini-networks - publishers are very much expected to be the end-nodes, in Google's worldview. Google AdManager will scale well into the tail, but lacks the sophisticated required by larger publishers.

To be fair, Google does have more convincingly third-party sell-side assets in DoubleClick (including the DoubleClick Exchange), whilst Yahoo has its own network in the form of YPN, so these positionings are not exclusive, but I think they are representative of the attitude that both companies bring to this business.

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April 17, 2008

The running of the programmers

bridges_12142006_1700  Off-topic, this, but there's an interesting report in this week's Economist about the changing lifestyle patterns created by mobile technology, and the rise of the digital "nomad" who works anywhere and everywhere (I'm writing this from my local coffee shop, just to prove what a trendy nomadic-type person I am). Particularly interesting (to folks round here, anyway) is a write-up of the results of a series of studies of US traffic patterns carried out by Alan Pisarski over the past three decades:

Car trips had stopped increasing and were even declining in cities such as Seattle, Atlanta and Portland. Traffic was still heavy but now spread out over much longer periods, starting at 5am and lasting till noon, say. Bizarre new patterns were cropping up, such as a “reverse commute” in Seattle as lots of male computer scientists at Microsoft in the suburb of Redmond raced downtown to find females—a weekday ritual called "the running of the programmers".

I have to admit that I've never heard the term "running of the programmers" (and besides, I live in Seattle, and am married), but I can attest to the misery that is the 520 into Seattle at 5pm, and I use everything in my power (including not going to Redmond, or traveling on a wi-fi enabled bus) to avoid it. So now I'm part of a lifestyle trend.

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April 16, 2008

Wow, that was quick: IndexTools is free already

free_sign_med Less than a week after announcing that Yahoo! is to buy his company, Dennis Mortensen has announced that Yahoo! will be making IndexTools free to all customers, so long as they sign a new Yahoo! agreement. Those guys aren't hanging around!

The chatter here at Microsoft is about about what's likely to be that agreement. As I've said before, you can only afford to provide web analytics for free if you have other ways of monetizing the service. Yahoo! will certainly be expecting IndexTools customers to spend more on advertising with Yahoo!, or (if publishers) make more of their inventory available for Yahoo! to sell through its network, but wouldn't need a new agreement in place to try to achieve those objectives (unless IndexTools' existing license agreements are very restrictive about permission to contact to market other services, which seems unlikely).

So the most likely changed content in the new agreement is a clause to allow Yahoo! to reuse the web analytics data, most likely to bolster the behavioral targeting data that Yahoo! already has a very good collection of. In his post, Dennis says:

"I think this is a fair tradeoff for an Enterprise class Web Analytics system?"

I agree that it is, but it remains to be seen whether IndexTools customers (some of whom may have specifically chosen IndexTools over GA because they wanted their data to remain 'independent') agree. What's most likely is that some customers will bail out, whilst IndexTools/Yahoo! will capture new customers at the free price point, who are less sensitive to the data issue.

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April 09, 2008

Way to go, Dennis: Yahoo! acquires IndexTools

yahoo-indextools-737805 Well, it's turning out to be quite the week for Web Analytics industry news. First we had Coremetrics's $60m cash injection; now we have the news that Yahoo! has agreed to buy IndexTools. Let me start out by sending my congratulations to Dennis Mortensen and the team at IndexTools, who have come from nowhere to take a seat at the big boys' table. As I've previously blogged, I have a soft spot for IndexTools because their development mirrors that of my previous company, WebAbacus - except that IndexTools's payout has been somewhat higher :-)

As to the implications of this deal: Firstly, I believe this is another significant step along the path to the future that I mapped out in my recent post on The Future Of Web Analytics, Demystified - that web analytics will continue to be absorbed into other, broader businesses, eventually disappearing as a line of revenue in its own right. In his post today about the deal, Eric Peterson predicts that Yahoo! will continue to charge for IndexTools, at least for the time being; but there is a strong chance that Yahoo! will make at least a part of the portfolio (the E-business edition) free in due course - perhaps charting a similar path to the one that Google took.

My money is that IndexTools will eventually be, effectively, free, because that's essentially Yahoo!'s business model (and ours, in our Online Services business). Yahoo! does not have a history of providing Enterprise software, and I would bet my bottom dollar that Yahoo!'s valuation models for ClickTools were not based upon their current lines of revenue. Even if Yahoo! continues to charge for ClickTools, the majority of the upside for the company is in the impact that ClickTools usage will have on its sales of advertising inventory, especially search.

That means that in, say, 2 years' time, when the synergy effects are starting kick in, it will make little difference to Yahoo's numbers on this deal whether they charge for ClickTools or not. So why not make it free, or at least hold the price right down to hurt folks like Omniture and Coremetrics?

As for the potential impact of a potential Microsoft-Yahoo! union on this deal, well, of course, I can't make any comment about that. But that's not to say that my little head's not buzzing with thoughts about it...

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April 07, 2008

Clifton leaves Google; Coremetrics gets $60m; Webtrends gets new CEO

brian_clifton Well, it's been a busy Web Analytics weekend. First I read an interview with the recently departed heard of Google Analytics in Europe, Brian Clifton, over on Mel Carson's blog. Brian is returning to his roots at Omega DM (the analytics/marketing consultancy he founded). Mel has captured Brian's thoughts well in his post, so I won't attempt to recreate them here. Good luck, Brian.

money Next to cross my desk was the news on Friday that Coremetrics has secured a series E (I didn't know the letters went that high, to be honest) funding round of $60m, courtesy (principally) of 3i. Joe Davis (Coremetrics CEO) is tight-lipped about exactly what he's going to spend the money on, but takes the opportunity of the press release to assert how bullish he is about the outlook for the company. $60m is a decent chunk of money and does change the dynamics of the industry, allowing Coremetrics to potentially pursue an acquisition-led strategy to build out the breadth of offerings that it has. It still won't give it the deep pockets of Omniture, but it could help it compete more effectively with Webtrends.

dan stickel Speaking of Webtrends, the final piece of news to hit today is that Webtrends has found itself a new CEO - Dan Stickel, former head of syndication at Google. I know next to nothing about Dan Stickel (I know that he has a beard, and that he used to run Macrovision and served a spell at AltaVista); I'm slightly wondering how his experience is going to be directly relevant to Webtrends's business, but it speaks well of the company that they can attract a senior Google exec. Good luck, Dan.

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April 01, 2008

Just what the world needs: another web analytics tool

image I'm amazed and kind of impressed that there are still people out there who want to get into the web analytics business. After all, it's not like there aren't plenty of tools to choose from. And the challenges of making money from web analytics are well documented (by me, anyway). So I applaud Elie El Khoury and his team at Fusion Media Labs for their chutzpha in launching Woopra (if that's not a naming decision driven by .com domain availability, I'll eat my hat) at this relatively late stage in the game.

Before I go on, yes, I know we're in the middle of launching our own, not-exactly-first-to-market web analytics service, but as I've explained elsewhere, if you want to be in the web analytics business today, you really need to be in some other related businesses as well to pay the bills, and to provide a compelling reason to use your app. So I shall be interested to see how Woopra is monetized (there's no mention of pricing on the site as yet).

Elie's background is in graphic design, which can be seen in the very shiny (and very Visual Sciences-esque) UI design. But what else is there to Woopra? The (hilarious) demo video (click the link before it's replaced with something sensible) doesn't give much away.

Well, Woopra seems mainly to be aimed at lower-volume (< 10,000 PIs/day) sites, principally blogs. And it focuses on providing very detailed, real-time data about on-site behavior. I have to say that I'm a bit of a skeptic about real-time data - it has the "wow" factor that helps to get people engaged with web analytics, but in all the years I've been in this industry I've only encountered one or two very specific cases where it could be genuinely useful, and even then, 20-minute old data would have been just as useful. Other features include real-time notifications and visitor tagging.

Boo!

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The most interesting (and alarming) aspect of Woopra, though (which is linked to the real-time component) is the ability to launch a live chat session with someone visiting your site; so if you're watching someone blundering about the aisles of your virtual store, you can jump in and say "Hey! Looks like you're lost. Can I help?"

I can say in no uncertain terms that this would scare the bejesus out of me. It violates the (unwritten, unspoken) "pact" that exists between website users and owners; many users know at some level that their behavior is being tracked, but as long as that tracking doesn't get too "scary" (e.g. receiving an e-mail just after visiting a site that lists all the things you looked at), they're fairly comfortable. I predict that this feature will create significant discomfort for users; not to mention that it will be hard verging on impossible for a webmaster or site support person to monitor behavior accurately enough to actually justify jumping in and offering help. To be fair, the system does also allow the site user to initiate the chat, which is perfectly acceptable.

Reading this post back, I feel like a terrible old curmudgeon, criticizing this product - it has a kind of youthful enthusiasm to it that was once common in the industry but is now becoming less so as it matures (and now I can add condescending to my list of vices, too). I hope that Elie and his team can find a niche for it.

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