“Is buying video advertising from a video syndicator a good idea?”

According to http://www.todsacerdoti.com, the answer is, it depends. But, again, bad actors are hurting the video ad business. Broadcast videos sites such as Hulu and CBS have done a phenomenol job of maintaining high quality users expereinces when their videos are in syndication. Hulu distributes their player to MSN, Fancast and other sites, and maintains a universal user experience. CBS, through the audience network, controls video content, placement and advertising, to insure consistency.

The problems for brands become more evident when we are talking about the content licensors such as Roo, NewsMarket, JamboTV, a slew of others or any of the video ad networks that offer video syndication. In an attempt to compete with the broadcasters (or each other), these publishers syndicate their players far and wide, with little attention paid to user experience, site or site placement. As a result, video advertising campaigns can end up on low quality sites or, worse, not even be seen by the consumer.

This problem is most evident when brands unknowingly buy fake pre-roll, either from a video syndicator or a video ad network. Fake pre-roll occurs when an advertiser buys pre-roll video inventory, but gets a placement where the video player autostarts a video ad in display inventory, usually with the sound off and often below the fold.

Examples of fake pre-roll are abundant (see screenshots below). In 15 minutes one day I found examples of Mars, State Farm, Nicorette, Van de Kamps, Starburst and Starkist running in low quality, fake preroll placements. On day two Hellmans, Jello, Tide, Oil of Olay and Bounty. Sites such as Luvcube.com, Sweetiessweeps.com, Hairpedia.com and Pajiba.com provide clear examples of fake pre-roll with video syndication from Jambo and video ads from many “leading” video ad networks. This gaming of video advertiser’s budgets is hurting all of us for the following reasons:

* These advertisements won’t perform for the advertiser, which hurts budgets moving online and the perceived efficacy of online video advertising

* These placements are priced at banner rates (or lower), which drives down rates for the entire category and falsely gives agencies the belief of a market rate

* Advertisers run the risk of being placed next to inappropriate content, which could result in an advertiser or agency pulling out of video altogether

The problem of fake preroll can either be solved by agencies (by paying more attention to the placements they are buying, comparing ad performance among players and demanding URL by URL reporting) or by the players in the industry (by not taking advantage of unknowing buyers, “gaming” the medium and returning to focus on selling a high quality product).Personally, I am much more a fan of self-regulation.

Global Warming Solved for $250MM

from Start-Up Blog Texas on January 13th.

What happens when you take entrepreneurs and give them a global problem like ‘global warming’ to solve?  They build a business.  Tens of thousands of them have started companies focused on making money around global warming, but a few have actually tried to solve the problem.  Microsoft’s ex-CTO, Nathan Myhrvold is one the few who has developed a very simple solution to global warming at a cost of $250MM.  Literally, he has a fix for global warming, but what is the real cost?

Nathan’s idea as described by Mark Whittington is to, “run a hose up to the stratosphere with balloons and using that hose to pump out enough sulfur particles to dim the sun’s heat just enough to counteract the effects of global warming.”  Al Gore can rest easy, Nathan can solve the global warming problem, but I am getting a little worried.  If the climate is so easy to manipulate what is going to stop nation states from manipulating the weather for their own purposes?

For example, Putin suggested that ‘global cooling’ effects need to be addressed promptly.  Russia has significant resources and could unilaterally decide to increase global temperatures by a few degrees.  What would we do about it?  Would we pay Nathan to reduce global temperatures to offset those increases?  What if Hugo Chavez decided to reduce global temperatures even more?  Would we increase them?  Maybe we would create a global market for temperature.  Each country could buy a temperature – the ultimate temperature would dictated by market forces.  I guess this wouldn’t be fair to poor countries and we would need some of offset to protect them from industrialized countries in cooler climates who sought to warm their shores.

I don’t have an answer, but I thought I would try to spark a conversation…

Interesting take on brainstorming by Instigator Blog…

One of my favorite exercises is brainstorming startup ideas with other entrepreneurs. You can gain a lot of value from a fresh perspective. When “pitched an idea” for brainstorming or feedback I tend to go through the same 7 key points and questions each time. That tends to spur strong discussion, new ideas and new opportunities.

I’m certainly not going through a full analysis of startup ideas or assessing the entrepreneurs themselves and their ability to execute. I’m not an investor; just a fellow startup guy that wants to help (if I can). And I’ve seen a lot of entrepreneurs that get too deep into the weeds of their ideas – either focusing too much on one thing (and the wrong thing!) or stuck at certain points with no clarity on how to move forward.

So here are 7 key points for brainstorming startup ideas that I use regularly:

1. Use Cases. I find it’s helpful to understand a startup in the context of use cases. How will someone use the product or service? Who are the different types of people involved (e.g. customers, vendors, advertisers, etc.)? I often ask, “Walk me through how I would use this thing?” It gets people thinking in simpler, linear paths and often helps clarify questions in my head as to whether or not the product or service (as envisioned) will actually be usable.
2. Risk and Failure Points. When you ask someone about the risk and failure points you often get to the underlying assumptions being made. Sometimes, entrepreneurs haven’t quite thought through the assumptions they’re making, but they can more easily recognize failure points. This becomes easier once you’ve asked someone to go through a few use cases as well, because now you have clearer, step-by-step processes lined up that describe how the product or service is used. So an entrepreneur might respond, “Well if no one puts any content into the system, it won’t work.” So then a critical assumption being made is that people will put content into the system. The next logical question is, “Why?”
3. Incentives and Motivation. People usually don’t do things for the heck of it. Consciously or even unconsciously there have to be incentives and motivations. The clearer the incentives, the better. Brainstorming around incentives and motivations is fun. And universally there aren’t that many incentives and motivations that drive humans to do things. We’re now getting into the weeds of psychology (albeit basic psychology), but the key brainstorming question is this, “Why will people do what you want them to do, especially to remove the point of failure we’ve just discovered?”
4. The One Feature. I like looking for the one feature that’s going to be the real hook inside the use cases and driving the incentives and motivations. Entrepreneurs like to stuff features into their products. And they often make the false assumption that one more feature will win the day for them. It’s not about more features, but it very well could be about one feature – the one feature (or use case) that drives the bulk of activity, virality and momentum. Brainstorming around this can be very interesting because it allows you break things up into small, digestible pieces and decompile a grand vision into potentially manageable chunks. I like to look for a starting point where an entrepreneur could focus on one small piece of their master plan and test it thoroughly with customers before moving on. Brainstorming around the “one feature” really gets to the heart of ideas very quickly, and helps create a lot of focus.
5. Target Market. Most of the time, entrepreneurs know what market they’re going after. But it’s not always the right one. When you look at something from the outside in, it’s much easier to think of other applications and target markets for a startup idea. Brainstorming around this often leads to interesting ideas on product features, but more importantly on go-to-market strategy and whether the customer (that’s in the entrepreneur’s head) is really the right one. For example, there are fairly simple and interesting ways of taking a B2C web application and targeting it at businesses. The reverse is true as well; take a B2B application and steer it towards a B2C adoption model.
6. Monetization. It’s interesting to brainstorm ideas on monetization, as well as its importance at an early stage for startups. In some cases it makes sense to monetize right away, in others it’s better to wait. I don’t think there are any hard and fast rules that can be applied to every startup. When brainstorming something for the first time, I don’t get caught up in monetization, because the other points are more important in terms of assessing an idea more thoroughly, and tackling it with new perspective. It’s not that a single idea will guarantee success whatsoever (because it won’t), but all startups start with the idea.
7. References and Referrals. One of the last things I tend to do when “being pitched” an idea is see if I have any references or referrals that can help. A reference might be as simple as an article I can share. A referral might be a potential customer, business partner, or other entrepreneur with experience in the field. If I see merit in the idea and the entrepreneur, and the timing is right, I like to help as much as I can in terms of my network and history. It’s quite easy to do this, as long as the connections you’re making are meaningful and don’t waste anyone’s time.

I love listening to new ideas (or seeing how ideas and startups are evolving). It’s fun, educational and valuable to come in from the outside, tackle the issues and questions above and hopefully provide some level of assistance. And if I can’t, then maybe I can point you to someone else that can.

Most of the points above do form the basis for a strong investor pitch as well.

The goal in a brainstorming session isn’t to solve every problem, or even discover every problem. I like to focus on moving things forward by at least one step. Can you uncover one key point to focus on? Can you think and talk your way through a few issues that leads an entrepreneur to further research, discovery and progress?

And finally, after doing a number of brainstorming sessions it becomes quite clear that most entrepreneurs have a lot of the answers already, but they still need someone to talk to. For example, you meet someone that’s hemming and hawing over an idea, but isn’t sure it’s “great” and isn’t yet ready to quit their day job. They ask, “Should I quit my day job and pursue this idea?” You can’t give them the answer – they have to make that decision, but chances are they already have. It’s still nice to talk it out though.

Great article from the Harvard Business Review on the impact private equity investment has has on our economy.

Executive Summary:

Abstract

The growth of the private equity industry has spurred concerns about its potential impact on the economy more generally. This analysis looks across nations and industries to assess the impact of private equity on industry performance. Industries where PE funds have invested in the past five years have grown more quickly in terms of productivity and employment. There are few significant differences between industries with limited and high private equity activity. It is hard to find support for claims that economic activity in industries with private equity backing is more exposed to aggregate shocks. The results using lagged private equity investments suggest that the results are not driven by reverse causality. These patterns are not driven solely by common law nations such as the United Kingdom and United States, but also hold in Continental Europe. 40 pages.

Paper Information

Full Working Paper Text

When PR?

Because we specialize in communications for start-ups, we’re often asked “when should I start a PR program?”

It’s a simple question. The simple answer (often given) is: “No time like the present.”

The real answer is bit more complex. We always ask prospective clients about their strategic company goals, as well as near- and long-term product plans so that we can help the management team determine whether a PR program can be helpful – and sustainable.

Once all parties agree that the time is, in fact, “now”, we go about the work of creating and executing the strategies and tactics that will help support the corporate vision. One of the first things we look at is helping a client generate a fairly steady stream of “content”.

Content is King

A good PR firm will help guide you and “tease out” the information that will help communicate your value and credibility to customers and partners. Part of your commitment to the PR process is to make sure the company is ready to handle the increased attention that comes with an effective and successful PR program. PR places additional demands on executives and managers who are designated as spokespeople or who otherwise have a stake in the PR process.

Content can begin – and often should begin – with company/product strategy communicated in the form of industry analyst discussions. This foundation work often precedes a more “public” PR campaign, It can also be combined with social media activity and/or “wire press releases” – two examples of content distribution tools. Knowing who is watching you and who you should be watching can often dictate the type, style and frequency of the content. But the key is that a lot of PR deliverables are no longer just media stories. They ARE company-created content that adds value and context to the more traditional media channels.

The Good (Bad?) Old Days

Not so long ago, PR lived in a relatively simple world of communication to the traditional press, who then processed, fact-checked and distilled that information before sending it out to the world. Today’s PR landscape is quite a bit more complex.

Before embarking 10 years ago into the land of the start-up, I and most of our team here spent time at large companies (IBM, Compaq, HP) where the simple rule was don’t communicate unless you get coverage in the press. Today, we’re seeing a disaggregation of traditional media “centers”, however, and now direct forms of communication are supplementing (not supplanting) the role of media. Take blogs, for example. They have become a significant supplement to traditional media and, in fact, many reporters also do double duty as bloggers. And, of course, companies and organizations have their own blogs, which add to the content volume. The influence of Twitter is well documented (ironically, in the traditional media).  Even CUSTOMERS are publicly influencing the buying decisions of other customers. So, today, the press release, the company blog, the analyst deck all take on significance in addition to, and beyond the role of media in delivering content.

While scary (for some), companies must be willing to communicate with their customers and potential customers in an almost 1:1 fashion, or at least to appear that way. You might be thinking “that’s marketing.” And, in a way, it is, but it’s marketing using the tools, language and credibility of public relations/media. And, of course, it’s also using the traditional PR tools FOR press articles and analyst reports.

PR is not a magic bullet. Just as with building a sales and marketing organization – indeed an entire company – an effective PR program builds up over time with activities strategically dictated by what stage the company is at and where it wants to go

VentureHacks posted a great article on identifying the key determinants for success in developing and marketing your innovation.

Check it out…

“Billy is perhaps best known for his Oxi Clean commercials, where one softball size ball of detergent, chucked into your washing machine and forgotten, will do 25 loads of laundry. Simple messages, great customer testimonials and products that really worked were Billy’s forte. He rejected perhaps 99% of the hundreds of inventors/companies that approached him, choosing only those products that met his three key metrics. And he and his inventors made millions in the process…

“Address clear customer needs: Billy wanted products that anyone could use, not just a select market segment–who does not have dirty clothes (Oxi Clean)? Needs a knife to cook (Samurai Shark)? Want shiny clean floors (Orange Glo)? or, my favorite, who has ever wished they could permanently cement their mother (or father)-in-law to a chair (mighty putty)?

“Have believable customer testimonials: Billy did not use actors, but recruited users who were true believers. Who could not like the housewives who had orgasms over their newly waxed floors?”

(Italics mark my emphasis.)

That’s a great set of requirements for picking startups: simple messages, great customer testimonials, and products that really work — that anyone can use. (You can also take the opposite approach on the “products that anyone can use” requirement.)

Bonus: Also see David’s post on Hiring the Right Sales Guy:

“So what’s the best type of sales guy for a start up? To be honest, none of the above. The founders are the best sales guys, supported by the correct marketing and sales support technology, processes and people. They know their solutions and vision best and should be the one who lead the charge in the marketplace.

“Instead of hiring a very expensive super sales guy, for example, use your board members to get introductions at target customers. That’s a prime role for board members and should be a key criteria in choosing them. Want C-Level introductions? Try cold calling at 8am in the morning when the C-levels get in early to check their emails. Need a group of specialists to sell the solution?  Assemble the team from current employees to make the pitch. Everyone should be a sales person in a start up.”

This is consistent with Steve Blank’s advice that founders should be on the customer development team and, if necessary, complemented by a ’sales closer’.

A trend is developing for 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.

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?

The Future Of Social Change Is…Video Games?

While it sounds crazy, there is some early evidence to suggest that video games may provide a new avenue for raising awareness and engagement. The $800,000 Facebook-based game Farmville raised for charity by selling virtual seeds in just two weeks should be enough for all of us to take notice.

One of the great problems nonprofits face is the “preaching to the choir” effect, in which organizations harness a few diehard supporters to great magnitude, but they’re never really able to captivate the masses and push toward any sort of broader tipping points.

One of the greatest points of excitement around the expanded power of user generated content and social distribution channels like Facebook and Twitter is that they make it easier for active individual change agents to share their passions with their peers. This is definitely happening, and is immensely exciting. Still, the process of social self-selection still predisposes the most engaged to know and communicate with, well, the other most engaged, and that leaves a whole lot of people – many of whom would care if they don’t already and all of whom have talents to contribute to whatever they do care about – out of the picture.

Which is one of the reasons that there is some buzz and excitement around the notion that video games may be an amazing new channel for capturing attention for social good.

Read More >>

AOL has been very impressive with its new emphasis on content. New sites like Asylum and Lemondrop have produced cool content in their respective niches. It also doesn’t hurt to have them linked up from AOL’s high-traffic flagship site.

The Wall Street Journal, however, is reporting that AOL will also get into mass-produced content (sometimes referred to as garbage content).

AOL is putting the finishing touches on a high-tech system for mass-producing news articles, entertainment and other online content, the linchpin of Chief Executive Tim Armstrong’s strategy for reviving the struggling 25-year-old Internet company after Time Warner spins it off next month.

Mr. Armstrong’s goal is to make AOL, which has been losing visitors and revenue, a magnet for both advertisers and consumers by turning it into the top creator of digital content. He hopes to do so in part by turning some media and marketing conventions on their ear, and potentially blurring the lines between journalism and advertising.

“Content is the one area on the Web that hasn’t seen the full potential. Hopefully, we will spark a revolution of people doing content at a different scale,” says Mr. Armstrong, a former advertising executive at Google.

AOL is betting it can reinvent itself with a numbers-driven approach to developing content, based on what Web-search and other data tell it is most likely to attract audiences and sponsors.

As pointed out this the article, this strategy mimics the approach taken by companies like Demand Media and Associated Content. Wired has a long profile covering Demand Media’s strategy, which uses an algorithm to pick narrow content subjects that could generate significant revenue from sources like Google Adwords.

Thousands of other filmmakers and writers around the country are operating with the same loose standards, racing to produce the 4,000 videos and articles that Demand Media publishes every day. The company’s ambitions are so enormous as to be almost surreal: to predict any question anyone might ask and generate an answer that will show up at the top of Google’s search results. To get there, Demand is using an army of Muñoz-Donosos to feverishly crank out articles and videos. They shoot slapdash instructional videos with titles like “How To Draw a Greek Helmet” and “Dog Whistle Training Techniques.” They write guides about lunch meat safety and nonprofit administration. They pump out an endless stream of bulleted lists and tutorials about the most esoteric of subjects.

In one sense the strategy is brilliant. There’s obviously some demand for content in each of these areas, and companies like Demand are meeting the demand (what’s in a name?) and profiting nicely from it.

On the other hand, much of the content is crap, and the crap from these big companies who get massive love from Google will often rank higher than similar content produced by others. This raises another question – will quality ever matter in search results? The criteria used by the search engines, which heavily rate factors like incoming links, are easily manipulated by content factories like Demand Media.

Manipulating Google results is obviously a big business these days, and companies like Demand Media and AOL are just doing it on a much larger scale. But we’re getting to the point where content is turning into a commodity, and Google is feeding the beast. In the long run, it will be interesting to see if Google adjusts its secret sauce, or whether the content factories will litter the web and the search engine with second-rate content.