Thursday, January 26

A Better Search Algorithm: People

Following up on my previous post "The Web is more powerful than a brain", the article Yahoo's Social Circle is particularly succinct reminder of how the big players are developing this theme.

A couple of paragraphs stand-out for me:

It sounds great, but there are plenty of skeptics. Most Internet users haven't even heard of Flickr or, let alone spent time sharing photos online or posting bookmarks of their favorite sites. Alexa Internet ranks as the 364,886th most trafficked Web site. Google is ranked third by the researcher.
Others doubt the wisdom of crowds will offer much of an upgrade over the feats of raw computing power. "It really adds very little value to what is available now," says Raul Valdes-Perez, CEO of Vivisimo, which provides search technology to enterprises. "The best description of a document is the document itself."

It is certainly true that these 'tools' are not quite at tipping point. But as we know, once they tip they move so quickly that competitors will have missed the boat.
Read into this what you want, for me it's one of those few occassions where you can see the next trend and have an opportunity to be part of it... before it tips.

The idea below that some how search (as we know it, Jim) and social search (not as we know it, Jim) are mutually-exclusive polar opposites puzzles me. And I would be very suprised if either Google or Yahoo see it that way. Indeed Google is itself involved in a huge social search project, that little thing called Google Base. A self proclaimed project to index the world - they're inviting users to post-content, links to content which are self-tagged.

MORE PLAYERS. Google, by most appearances, is also tepid on the prospects of social search. Sure, the search giant has developed and acquired social-networking sites, such as Orkut and Dodgeball. But it has done far less than Yahoo in the arena of online community building. Analysts take that to mean Google's long-term bet remains on personalization -- using its mammoth computing horsepower to sort through data and better discern what users are thinking. Google declined to comment.

Ultimately, there is room for both and a mash-up of the two types of search. We should call the algorithm approach Rational Search, since it's is based on entirely rational principles. Social Search is Emotional Search, something generated by random connections, thoughts and feelings between human interest groups. Both ad value, depending on whether your search query is rational i.e. looking for business research or emotional i.e. finding music that you might like.

>>Written to the tunes of Telepopmusik's Breathe

Monday, January 23

The Marketing Pie Keeps Moving

I have a theory. It's something so simple and it affects an entire industry.

UK advertising spend represents an £ industry which each year grows at 3 to 4%. That's more than 1.5% of GDP. Marketing Directors hold the keys to billions in marketing spend each year. And each year, plans are discussed to use budgets more effectively to better reach consumers.

A key chart in every annual marketing plan is spend by media. X% to TV, X% to Radio etc. Since in most organisations plans and budgets are set annually, this simple pie chart affects an entire industry for the coming year. Media organisations at the margins stand to gain, or lose, enormously from a few percentage points change. Whilst the fat cats with the largest shares (print and TV) stand to face an unprecendented world of tight margins and cost reduction when spend declines even slightly.

With most financial years rolling in April, marketing people will be shifting the pie another couple of notches towards new media once again. Last year, the pie moved 2.2% towards online versus 2004. That's a 62% increase for the online advertising industry.

Because of the ridiculous annualised nature of budget setting, these changes don't come along gradually. And the online industry finds itself suddenly trying to cope with 62% more demand for advertising formats and products that it already lacks enough of (... we're still inventing them). Don't missunderstand me. In the short-term this is great news for all us netophiles. But it also leads to rushed and poorly planned marketing spend, with huge degrees of wastage. Driven into an industry with a derth of talent.

So every-time that pie moves, and another flood of budget hits the online advertising industry, we had better be sure that at least 50% of it is effective for the advertiser. Since 50% is the long-accepted benchmark for old-media.

"Half the money I spend on advertising is wasted; the trouble is I don't know which half." John Wannamaker, US Department Store Merchant (1838-1922)

Sunday, January 22

Great quotes of the week

My name is Earl (Episode 3)

Earl's Brother: Did you know that humans used to be monkeys

Earl: Really? What were we before we were monkeys.

Earl's Brother: I don't know, I don't even remember being a monkey

Sculpture at Butler's Wharf, Tower Bridge, London:

Thursday, January 12

Redux: When East overtakes West

A few years ago I wrote my thoughts on the shift of economic power from West to East (read "When East overtakes West". The view was that this would eventually/inevitably lead to marketing and ultimately ownership of the customer.

I still believe this process is inevitable. On each visit I make to parts of Asia, signs of the sophistication of their marketing campaigns get clearer. Production values on advertising campaigns are good, messages clear and intelligent, product packaging as good and innovative as anything in US/Europe. What we are seeing, in the space of just five to ten years, is the maturing of an entire marketing industry. In the UK/USA this learning process began in the early 1900's, accelerating with the advent of TV advertisers filled our screens with bad ads for soap-sud and mustards.

In China, right now, the creativity of the marketing industry is invested in tackling home markets. These new marketers and their brands are testing, trialing and learning rapidly on a pool of an estimated 100m middle-class Chinese. This knowledge will find its way back into product improvements and begin creating innovations led by Chinese consumers. Innovations that will lead to the next iPOD style revolution coming from China - designed, created, shipped and marketed by the Chinese, carrying the Chinese brand name...

So in ten years, the hot new thing is Píng Guo...that's Mandarin for Apple

Or should it be Lí Zi - the Chinese Pear POD

China's Best Prospect - from Forbes
October is China's iPOD Month

Saturday, January 7

Off Topic: Every self-respecting Marketeer should have...

This amused me.

Introducing the Marketeer, portable mobile shopping device. Limited edition.

A relic of the height of 1970s style, the Marketeer shopping trolly. Look carefully at old-age pensioners on London's high street and you might spot a retired marketing guru closely followed by the Marketeer. Every self-respecting retired marketer should have one.

Trend guru's say that shopping trolley's are coming back, oh well, "each to his own".

Monday, January 2

New Year Clear Out: Investment

With the ushering in of a new year comes the investment spring cleaning - a time to sort out finances, paperwork and take advice from those predicting the future. As a contrarian investor, I like to do this in December to get into new investments before everyone else thinks about their annual shake-up. My thinking goes - by the time 'tips' appear in the media, the market has already moved.

The best I've read on the year ahead comes from my favourite investment blog Mao Xian - read his post "Interesting Bits in Barron's -- Week of January 2, 2006" [ed.Thanks for the updated link MaoXian]. Investing is about trends - Emerging markets, recovery of the sleeping dragon (Japan) and increasing shift towards technology - all should continue to dominate headlines in 2006. But I was particularly suprised by this view on the future:

"is a continuation of an inexhaustible increase in the use of oil, particularly in the countries where they are barely using any oil. The wealthier they get, the faster they start using oil. The idea that $60 oil is really hurting the emerging economies is a myth. It doesn't seem to be affecting them at all........ I've placed a $5,000 bet that oil prices will average $200 a barrel in 2010.

If the prediction comes true, now's the time to invest in alternative energy. Businesses will soon ditch their petrol cars/trucks for new energy when running costs really hit bottom lines. BP announced $8bn investment in alternative energy just a month ago (no coincidence) and expects to generate £3.5bn income from alternative energy