Archive for the 'Tod Sacerdoti' Category

Clicks Are a Bad Metric (for influence or anything else)

Fast Company recently kicked off the Influence Project, an audacious effort to determine “Who are the most influential people online right now?” Unfortunately, they have made the same critical flaw in their measurement of influence that many first time and/or unsophisticated advertisers make — ie, focusing on clicks.

Under “How We Measure Influence” they clearly state their measurement philosophy:
The scale of your influence is based on…
1. The number of people who directly click on your unique URL link. This is the primary measure of your influence, pure and simple.
2. You will receive partial “credit” for subsequent clicks generated by those who sign-up as a result of your URL.

Essentially, this means, the primary form of measurement is clicks with a small component of the measure being people who sign up (or what we call “conversions”).

Here is why this is a problem. As of today, August 3rd, here is the #1 most influential person according to their measurement:

Yes, yours truly. However, if you go into rank view, you can see that I have only directly signed up 6 people. So, although I have sent a significant amount of click traffic I have driven very few conversions. In the online advertising world, this is equivalent of sending low value (or no value) traffic to an advertisers site and getting paid for it. This is a tactic we strongly advise advertisers to avoid, as a measurement of the post-click activity is far more important than the number of unique clicks.

Compare this to Mari Smith, an SEO consultant who has dominated the Influence Project rankings for most of the competition. She is currently ranked #2 in influence but has driven 346 people to sign up. Further downline from her initial signups (or conversions) she has driven thousands of additional signups as a result of her efforts.

In my opinion, there is no way you can argue that I am more influential than Mari as she is clearly driving more action from her referred visitors and more value to Fast Company’s efforts. In addition, some of the clicks I have sent I know are of zero value but there seems to be no measure of the value of an individual click.

In the ad world, businesses that pay on clicks quickly end up with 30-50% of their traffic being fraudulant. With no measure of click quality or value put on post-click performance, click traffic becomes the wild west. I would bet that Fast Company would see click volumes at 10-100x the current levels if they were paying even $.10 a click. According to some pundits, Fast Company should be paying per click given all the link love they are getting out of this controversial Influence Project.

I am considering testing the impact of sending high quality traffic to the Influence Project, rather than continuing my test of sending a stream of low to no value clicks, but to what end? Given that it is clear this project is focused nearly exclusively on clicks it is hard to imagine that any resulting rankings will be of any meaningful value. To argue that the “winner” is actually the most influential person on the web is simply a false argument.

Sand Hill Road Lessons - Techcrunch Guest Post

Today I wrote a guest post for TechCrunch called “Don’t “Pull A Patzer” And Other Lessons Learned On Our Trip Down Sand Hill Road.”

Here is the link: TechCrunch

The part of the article that seems to be generating the most amount of interest is the section titled the “Patzer Problem.” Essentially, this is the entrepreneur vs. VC problem of deciding when to sell a company, and highlights my surprise that VCs would actually say that they believe Mint.com’s sale was a mistake. I consider the company to be a huge success and this issue worth talking about.

In the comments, I note that…

I deeply share the concern “about any VC who says to you that any deal which puts tens of millions of dollars in a young founder’s pocket is something to avoid,” and that is why I wanted to shed light on the practice. I understand this phenomenon first hand, having been at Plaxo, a company that exited at $180M+ in equity value but had VCs saying it had failed behind closed doors.

My perspective is on this issue is that VCs are actually acting counter to their goals. They should tout these 3 year, $180M+ exits, and share the story with any budding entrepreneur who will listen — what better example is there of the incredible fruits of starting a successful company?

Furthermore, this exit in particular was at close to 40x revenue! It’s not like the company was a guaranteed success. Any rationale person would consider this a home run and I say congrats to Patzer and the entire Mint.com team.

POV - Point of Video

BrightRoll vs. Hulu — Why it Matters

My company, BrightRoll, recently announced that we are larger than Hulu in video viewership as measured by Quantcast. This is an important milestone for the company and for the online video advertising business.

Here is the raw data:

Here is why this is important:

1. We Only Serve Video Ads. Hulu Serves Video Content And Ads. Yes, we are comparing apples and oranges — if you compared our reach to the reach of Hulu’s ads, there would be a much larger difference between our two networks. Agencies and advertisers often forget that the reach of a site is irrelevant, the only metric that matters to them is the reach of the site’s available ad inventory. As the gap between our network and Hulu continues to grow, it will become more and more clear that the most efficient way to reach targeted video audiences at scale are through video advertising networks.

2. TV Everywhere? More like Video Ads Everywhere. Although there has been a lot of press recently about TV Everywhere, the reality is that online video advertising will be far larger than online television. Why? Because online video advertising is being used by premium publishers to monetize all free content — including broadcast video, short form video, games, radio, social apps — and many of those publishers have much more reach outside of their video content area than within it. Plus, many premium publishers don’t have huge production costs outside of their broadcast content, so advertisers are flocking to more cost efficient placements.

3. By The End of 2010, The Majority of the Top Ten Video Properties Will Be Networks. As I recently predicted in MediaPost, this is beginning of what will be a long trend of networks and aggregators surpassing the largest video properties in total reach. By the end of 2010, the majority of the top 10 video properties (as measured by Quantcast, comScore or your preferred third party) will be video companies that don’t produce any meaningful amount of video content. This means the top 10 properties will be dominated by video ad networks (BrightRoll), video-sharing sites (YouTube), video syndicators (Grab Networks) and vertical video sites (Break.com). Yes, some of these players produce some content, but the vast majority of the views on their properties are generated from content they did not produce.

We look forward to continuing to lead the industry and driving innovations across our platform, pricing, targeting and research initiatives. If you share our passion about video advertising, please reach out or join our team.

How To Spot “Fake Pre-Roll”

Yesterday I wrote a post on AdAge on “How to Spot Fake Pre-Roll,” as we have noticed a trend of online publishers and networks packaging low quality ad units as pre-roll. The article goes into detail about what to look out for and what questions you should ask to verify your pre-roll buys.

Here are the highlights:

Pre-Roll Quality Categories
1. Gold Standard: Traditional Pre-Roll, as defined above
2. High Quality: Video ads that play in the middle of long form content (such as an ad between segments of House on Hulu.com)
3. Medium Quality: Video ads that auto-start with sound in a publisher’s video section; no user initiation
4. Low Quality: Video ads that auto-start with sound on a publisher’s home page; no user initiation or attention
5. Questionable Quality: Video ads that auto-start without sound in display inventory (typically by an ad network without video technology)
6. Borderline Fraudulent: Video ads that auto-start without sound on a publisher’s video player which can be embedded by users anywhere

Key Queries to insure 100% Pre-Roll:
1. Will my video ads ever be played in the middle of content, as opposed to before content?
2. Will my video ads ever be served into an environment where video is not the main content on the page?
3. Will my video ads ever be auto-started, i.e. started without a user initiation?
4. Will my video ads ever be started with the sound off?
5. Will my video ads ever be served into display inventory?
6. Will my video ads be served into any syndicated content? (Syndication almost always means a reduction in quality.)
7. Can you provide me with a list of every URL my ads will appear on?

BrightRoll Launches First To Market HD Video Advertising Unit

Yesterday, BrightRoll announced the release of an exciting new product - HD video ad units that scale across 65% of the BrightRoll publisher network. This first to market offering - near full screen ads in high definition - represent a quantum leap in both video quality and ad effectiveness for online video advertisers. Here is the press release.

We continue to be focused building online video advertising solutions that are more impactful (bigger and higher quality), more effective (higher engagement and click through rate) and highly scalable (reaches over 65% of the BrightRoll network).

We are excited that this new ad unit delivers on all fronts and is a true innovation in the video ad category. In addition, the response to this new ad unit has been overwhelmingly positive. We have already signed up multiple advertisers in the entertainment and technology verticals, and we are expecting HD ads to represent at least 10% of our business this calendar year.

It is clear that innovations involving high quality and HD video, which impact file size and therefore streaming costs, will likely not come from the high volume video sites which typically drive video innovation. This is because most high volume video sites have yet to generate a profit and streaming higher quality or HD video files simply accelerates an upside down business model.

On the contrary, our business model is based on delivering an increasing amount of value for our advertising clients on every ad we serve, so our incentive is to deliver the best quality experience that is technically possible. This is the most recent step in our efforts to add additional value to the online video advertising process for advertisers and agencies, and we are looking forward to additional announcements coming soon.

Here is screenshot of the ad unit:

Here is some of the press on the announcement:

CNET
TVWeek
MediaPost
Mashable
NewTeeVee
Webware

BrightRoll Fills Void Left By TV Networks

The television industry delivered another blow to the advertising community yesterday when NBC announced that they would be “giving advertisers cash back for prime time ratings shortfalls from last season.” Along with the writer’s strike, this represents the perfect storm - television inventory is lower quality AND now in lower quantity.

This is a horrendous outcome for all parties involved. Clients miss key marketing opportunities in the most important marketing period of the year, agencies miss their targets which is a disservice to their clients and tv networks miss out on significant revenue opportunities.

Additionally, this problem is only going to get worse. The writer’s strike has negatively impacted television content quality and ratings, but the real hit in both categories has yet to come. Many shows have strung along previously filmed content but are about to reach the end of that rope. If money is flowing back to agencies this quarter, expect a large chunk to be searching for a new home in Q1.

Fortunately, not all media channels are struggling. At BrightRoll, our video inventory is growing in both quality and quantity. We have significant Q4 and Q1 inventory available for broadcast buyers who have budgets previously allocated to under performing television placements.

Although we expect advertising dollars to follow their audience online regardless - sometimes it takes a shock to the system to accelerate the adoption.

Amazon releases Context Link

I have been a long time Amazon.com Associate,amazon2.jpg ever since I released the eBook How To Use Google while in business school. I haven’t logged into my account in years but recently logged in and was impressed to see a new Context Link product (see Google Adsense example to the right). As a test of the new product, I thought I would list some great business books I have read below. If the product works, you should see a dotted underline that has a preview and links to Amazon.

Here are some of my favorite business books:

  • Hiring The Best - Martin Yate
  • Man’s Search for Meaning - Viktor Frankl
  • Made in America - Sam Walton
  • Trading Up - Michael Silverstein
  • The Tipping Point - Malcolm Gladwell
  • Rich Dad, Poor Dad - Robert Kiyosaki
  • Moneyball - Michael Lewis
  • Multiple Streams of Income - Robert Allen
  • Running Money - Andy Kessler

I promise to post more books soon and I will let you know how the Amazon contextual link performs.