JoeVC

In Defense of Digital Media

Frontline is running an interesting documentary on PBS titled Digital Nation: Life on the Virtual Frontier. The program explores the implications of a generation raised as digital natives. Many of the experts interviewed deliver a cautionary tale on the rapidly evolving world of digital media.

While I can understand the concerns related to overly multi-tasked behavior, I am bothered by the notion that a student’s interest in consuming piecemeal information as opposed to books is altogether bad.

Most of the students I grew up with never had the attention span to read books in the first place. They just had no other option. Digital media helps teachers adapt to a learning style that keeps more students engaged. The documentary visits a middle school in the South Bronx that has dramatically increased attendance and academic performance by embracing digital media. Some students still goof off, sending digital notes to friends as opposed to handwritten ones, but more of them are participating in academic dialogue as well.

Digital content may have even greater leverage in higher education. In the past few months, I’ve spoken to classes at Boston College and Harvard about the venture capital industry. I referred students interested in learning more about the space to blogs as opposed to books or periodicals.

If I were to create a syllabus for VC 101 in today’s world, my required reading would be less focused on textbooks and more on the blogs and twitter accounts written by industry leaders. I would direct students to the thoughts and real-time conversations of Marc Andreesen, Chris Dixon, Bill Gurley, Bijan Sabet, David Skok, Mark Suster, and Fred Wilson. For more structured content, I would point them to Brad Feld and Jason Mendelson’s AsktheVC. The content from these sources is current, interactive, and created from the front lines of the industry.

Books absolutely have their place in education and will in some form for eternity, but digital content can provide incremental and, in some cases, superior intellectual value. The amount of trash clouding the digital media landscape should not be allowed to obscure the treasure.

The Social Media Multiplier

Evidence is mounting that 2010 will be the year social becomes an established advertising medium. P&G is reportedly bringing every one of its brands to Facebook, and Pepsi is shifting from Super Bowl to social.

Shiv Singh, VP & Global Social Media Lead for Razorfish, brilliantly illustrates the value of social in the embedded presentation below.  In one of my favorite quotes, Shiv says, “The point is you’re never going to buy a car again alone. You’re influencing and are being influenced everyday.” This statement has rung true for decades, as the vehicle your friends and neighbors bought or spoke of impacted your buying perspective.

However, in today’s world, the number of friends an “influencer” communicates with each day has risen exponentially. They’re not just telling the guy down the street how much they love their new Prius. They’re taking photos of their new ride and sharing them on Facebook, or bragging how green they are on Twitter. An influencer’s social media activities have a dramatic multiplier effect on their messaging, which is convincing brands to engage in the discussion.

Social Influence Marketing Trends View more presentations from shivsingh.

Users Are Lazy, Keep It Simple

I started this mini-post a month back and had to resurrect it after coming across this fantastic quote from Ariel Waldman, a digital anthropologist, founder of Spacehack.org, and former NASA coordinator.

“Simplified UI that is able to achieve what the user is motivated to accomplish often outweighs gorgeous design.

In social networks, Twitter and Foursquare are shining examples of this factor, while Tumblr leads the way on balancing simple interactivity with decent aesthetics and information architecture.”

Users are generally lazy, which is why simple beats rich but complex almost every time. Twitter users type 140 characters and hit send. Foursquare users check in and hit send.

Despite an incredibly complex backend, Google is the ultimate example of simplicity.  Mint is another example of a service that married simplicity with brilliant design.  Making search simple, and accounting simply beautiful, delivered great returns.

A Night with Hot Potato

Twitter’s explosive growth and the iPhone app store have spawned a fresh batch of real-time data services. Many brilliant minds are searching for sustainable business models in the segment. Last night I tested out one of the most promising new players, Hot Potato.

The startup enables real-time, curated chats around live events. Users can create a discussion thread, either public or private, focused on a game, concert, conference, etc. Users can announce their participation to friends via Twitter and Facebook, then post text, photos, and videos, comment on individual posts or “like” them, view other participants’ profiles, and track “hot” posts.

I accessed Hot Potato via my laptop, as Apple has the iPhone app in review purgatory.  I joined a discussion around the Patriots-Saints game. Per the image above, the Pats forced me to abandon the chat for the first ever Hot Potato Gossip Girl discussion, launched by Jon Steinberg, in what was no doubt an historic moment for the series.

The service was raw but has significant potential for both users and advertisers. Real-time user generated content faces multiple challenges, from information overload, to lack of editorial control, to accessibility.  The confluence of Hot Potato’s capabilities addressing these issues could make it a winner.

Curation is the key to addressing both information overload and editorial control.  There is an abundance of chat-based options around live events, but they’re typically overrun with blowhards like myself that will make insane claims about Brady Quinn’s ability to throw deep, or Shaq’s athleticism. This idiocy is half the fun, but the ability to mute the idiots when appropriate makes the experience more engaging.  Hot Potato will allow you to focus on posts contributed by your friends or from strangers that are generating the most interest amongst participants.

Accessibility is addressed via smartphone apps, which allow users at the live event to share near-time, personal thoughts and visuals with viewers watching from home, bringing them closer to the real experience.

As an aside, I must say that despite all the complaints about the iPhone app store, it was the first, quasi-open platform with a critical mass of distributed handsets. Before its deployment, app developers had to break through with carriers, which is a Herculean task for any startup.  Luckily the success of the iPhone is leading to more initiatives like the Blackberry app store and Joint Innovation Lab, an open mobile services platform launched by SoftBank Corp (disclosure: SoftBank Capital is an affiliate), China Mobile, Verizon, and Vodafone, which will address their 1 Billion aggregate customers.

Getting back to Hot Potato, I think the site has significant commercial potential for highly targeted, sponsored chats, if it can provide moderation tools such as filtering of foul language (which I was guilty of during the Pats performance last night) and offensive imagery.  The inevitable deluge of spam will also need to be controlled, but users should be able to help police spam in real-time.

I look forward to tracking the progress of Hot Potato and other emerging players in the world of real-time data.  Hot Potato’s iPhone app, which reportedly has superior functionality to the desktop version, is expecting an imminent release.  You can be the first to know by signing up at their homepage.

Facebook is the Genghis Khan of the Web. Join or Die!

Social media rockstar and Buddy Media CEO Mike Lazerow presented today at Web 2.0 (disclosure: SoftBank Capital portfolio company).  Find his excellent presentation below.

My favorite quote: “If Facebook were a country, it would be the 3rd largest in the world behind China and India.  You need to set up ‘shop’ in that country! Today!”

As Mike’s presentation demonstrates, Facebook is capturing territory in a manner not seen since Ghengis Khan ruled the Mongol Empire.  With reports that the site now accounts for 25% of US pageviews, brands have no choice but to establish an outpost within Facebook territory, where brand messaging can be amplified through the social graph.  Controlling that message is a huge challenge, but one that must be accepted in the evolution of the web.

If you need the tools for battle, see Buddy Media’s social marketing platform here.

Building Across The Social Web - The Implications of Social Web Technologies on Social Media Content Strategy View more presentations from Michael Lazerow.

Mobile Marketing in Japan

Below is an interesting presentation from Christopher Billich of Infinita on mobile marketing in the world’s most advanced mobile market and home of SoftBank Corporation, Japan.

Thank you SlideShare for enabling the distribution of such high quality content!

Future Insight: Mobile Marketing in Japan View more documents from Christopher Billich.

The ABC's of Local Advertising: From Glengarry Glen Ross to Foursquare

Piper Jaffray’s Gene Munster recently released Always Be Closing: The ABC’s of Local Online Lead Generation. On top of the classic Glengarry Glen Ross reference, the report offers a wealth of revealing statistics on the evolution of local advertising online.  Quality leads are still gold, but the methods by which they’re mined are changing.

Piper Jaffray projects online local ad spend to grow from $11.8 billion in 2008 to $19.2 billion in 2013. While local dollars represent 50% of overall spend today, the segment is expected to outpace growth in national dollars, climbing to 57% by 2013.

Today 60% of internet users turn to search engines or online Yellow Pages to find local businesses, and that metric is expected to jump to 90% within 5 years.  Google, which is currently serving less than 5% of US small businesses, should capture a significant portion of increased local spend.  Facebook, with its massive usage and compelling targeting capabilities, should also benefit handsomely from this growth.

The traditional Yellow Pages business is reportedly still twice the size of Google’s overall search revenue.  While it’s not going away anytime soon, the traditional approach is stagnating online, as leader SuperPages.com has seen traffic drop 3% over the last year. Within the same period, Yelp, with its user generated reviews, has seen traffic increase 85%.

While new models for local are required to succeed online, something unlikely to change is that phone calls, not clicks or impressions, is the primary metric that local businesses care about.  Phone calls lead to sales. 

This dynamic along with geo-targeting should make mobile a huge driver for local advertising.  According to comScore, 36% of mobile phone users conducted a local business search in 2008. While local businesses have yet to discover mobile as many of them are just starting to advertise online, Piper Jaffray believes there will be a $1B mobile search ad market in the US by 2011-12.  Research estimates tend to be overly optimistic, particularly in regards to speed of adoption, but the market is clearly shifting.

From an investment perspective, many digital media players have preferred to focus on national ad-based models given its relative ease of scale vs. local.  Deploying a local sales force, which is most efficiently done via outbound call centers, can be incredibly expensive.  Nonetheless, a number of companies have succeeded after spending years building up a local presence.  Examples include local review sites Angie’s List, IAC (CitySearch/InsiderPages), and Yelp, and local lead gen sites NetQuote, ReachLocal, Yodle, and emerging player Yext.  Others like Facebook and Google are succeeding on a self-serve basis with highly targeted ad inventory across a massive user base.  Twitter should have a play here as well long term.

Given that innovation follows money, we will continue to see startups emerge in the local ad space, such as Foursquare and Gowalla, which are competing to be the king of social location.  These services have discovered a novel approach to scaling locally via gaming elements, which have yielded fanatical user bases that build content, promote the services virally, and may ultimately be a sales channel.

The mayors and frequent visitors of local businesses, who are likely well known customers, are the direct beneficiaries of discounts and promotions.  If they can engage a local business to participate, they’re likely to increase their activity with that business.  This symbiotic relationship could make users a valuable sales tool. 

I convinced my favorite local eatery, where I’m mayor, to join foursquare.  It’s not worthwhile for a suburban pizza place to offer their one foursquare-using customer a discount, but it could certainly be worthwhile for popular urban hangouts with multiple users competing for location status to do so.  Perhaps Foursquare’s for closers!