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Jul 26, 2008

Are Ad Spend And Commerce Spend Correlated?

Ed: Fred asks if online ad spending translates into online commerce dollars. He also recognize the value of advertising for brand building. Very good questions.

It also raise the issue of single variate analysis. Too often, journalists, investors, and analysts simplify cause and effect to a single catchy phrase.
  • The problem is this. The solution is this.
In true economic systems, problems are rarely single variate and one-dimensional.
  • Many variables explain an outcome. Ad spending impacts commerce. So do many other factors - more than the catchy Product, Price, Place, Promotion conventional wisdom; big becomes bigger conclusion; or the location, location, location wisdom of retailing.
  • A system converges to new equilibriums. Supply and demand curves adjust to change that cannot be explained by a single relationship. This convergence can occur quickly or take years, like the adjustment to new oil price levels.
  • Relations are significant only when the noise level is random and controlled.
Are we concluding based on noise? With the increasing volume of content from amateurs and professionals on the Internet, should we be asking the basis for our conclusions and recommendations?

Are Ad Spend And Commerce Spend Correlated?

I wrote a post with some numbers on global internet use earlier this week and followed up with a second post the next day. Both posts generated excellent comments and also some good links with additional numbers.

I particularly like this post from the InPage Advertising blog which has some good IAB numbers on Europe. This chart from that post caught my eye.


So the online ad spend in Norway is 130 euros per monthly unique Internet user in Norway. And that number in Italy is 37 euros.

So that go me thinking. Is the online commerce market (on a per user basis) four times larger in Norway than it is in Italy? Is the online commerce market per user in the UK three times larger than France?

I don't think so, but I don't have the data to back that up.

If all internet advertising was direct response/CPC/CPA advertising, then I think the correlation would be pretty high between ad spend and commerce spend. But it seems that brand oriented campaigns are more prevalent in some countries like UK and the some of the nordics and less prevalent in markets like France, Austria, and Italy.

I'm not sure why that is. It could be that branding dollars have just not moved online as quickly in some markets as others. This chart from the same post bears that theory out.


But I still wonder if online ad spend will ultimately be correlated with online commerce spend. There are many markets around the world where online commerce is starting to take off but online advertising has not. Are those developing markets big opportunities for online media?

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The Silicon Valley VC Disease

Ed: With too many Silicon Valley venture capitalists, they have become risk averse - Omaha influence. Rather than venture investing, they become a bridge to an IPO or sale - a small time pre-IPO proceeding the real IPO. Thus, they minimize market, technology, and trend change risks; and deal with management staffing, standardizing internal processes, and packaging a company for an IPO or sale. Entrepreneurs can save much time and anguish by avoiding these VCs. Sad. 

The Silicon Valley VC Disease

Yesterday at the Mobile Web Wars event (here’s video of that), held right before the TechCrunch party, David Hornick, partner at August Capital (he’s the host of the TechCrunch party) told the audience that he would not invest in pure iPhone apps because the iPhone had too small a market share and that anyone who wanted to get big in the mobile space should go after all phones, not just the iPhone, which, while it’s hot with early-adopter types and is seeing people waiting in lines to buy around the world, hasn’t yet made a dent in, say, Nokia’s market share of cell phones overall.

Let’s call this the Silicon Valley VC Disease. This disease has been going on for a long time. Seagate’s CEO Bill Watkins told me a few months ago that Seagate almost didn’t get started because they couldn’t get funding from VCs who didn’t see a potential market for hard drives...

The Next-Gen Web: Browser Storage Support

Nik Cubrilovic


lame_logoThe next-gen web is starting to gather pace, as this week MySpace integrated Google Gears, Yahoo! announced their new BrowserPlus product and Google launched a browser-based edition of their 3D Earth product. Technologies and formats such asAIRSilverlightJavaFXGearsXULWeb Applications 1.0 (DOM5, HTML5 etc.) allow developers to accelerate beyond AJAX and towards a new generation of web applications with better performance, more functionality and tighter desktop integration...

Branded Websites Are the Most Effective Online Marketing Tactic for Pharmaceutical Marketers, comScore Study Finds

Online Advertising Also Has a Significant Impact on Brand Awareness and Favorability for Both Patients and Prospects

RESTON, VA, July 23, 2008 comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, in conjunction with pharmaceutical marketing consultancy Evolution Road, today released results from the second annual study:e-Marketing Effectiveness Benchmarks for the Pharmaceutical Industry, which is designed to help pharmaceutical marketers assess the success of their online marketing activities.

The study evaluated the impact of banner ads, search marketing, and visits to a brand Web site on a brand’s awareness, favorability and sales results among both patients and prospects.  The study found that getting a patient to visit a branded Web site is the most effective form of online pharmaceutical marketing, with an incremental patient adherence rate nearly 20 percentage points higher than among those who did not visit the Web site and an incremental new start rate for prospects nearly 5 percentage points higher than the control. Meanwhile, exposure to, and interaction with, online ads also improved adherence rates among existing patients. Patient’s exposed to an ad showed a 4.0-point lift in adherence and patients who interacted with an ad exhibited a 9.5-point lift. 

Using comScore’s one million person U.S. panel to passively observe behavior, with an overlay of survey questions to gather perceptions about the brand, the benchmarks study summarizes the performance of 32 individual studies involving more than 10 prescription brands. 

Incremental Effect of e-Marketing Tactics Over Control on Adherence/Next Fill For Existing Patients
e-Marketing Effectiveness Benchmarks for the Pharmaceutical Industry (2008 Release)

Marketing Activity

Adherence/Next Fill
(Patient Group)

Exposure-Only to Online Ads


Exposure to and Interaction with Online Ads (Rich Media*)


Visits to Brand.com


* defined as interactive digital media.

“The most effective online marketing tool for both patients and prospects is the brand’s Web site.  It’s important to realize, though, that visits to a brand Web site are achieved through the use of a variety of offline and online tactics, such as online banner ads, search and offline advertising,” said Bridget O’Toole, comScore executive vice president. “This is why it is essential for marketers to develop fully-integrated campaigns that not only raise awareness and educate consumers but that also drive visitation to a site.”...

New York Times’ Derek Gottfrid and NPR’s Dan Jacobson Discuss APIs

New York Times’ Derek Gottfrid and NPR’s Dan Jacobson Discuss APIs

By webmonkeyJuly 25, 2008 Categories: Platforms & APIs
Derek Gottfrid Speaking at OSCON Thursday. Photo Courtesy James Duncan Davidson/O'Reilly Media

Derek Gottfrid Speaking at OSCON Thursday. Photo Courtesy James Duncan Davidson/O’Reilly Media

Is the future of news in the hands of internet developers? News organizationsNew York Times and National Public Radio (NPR) think so.

O’Reilly Open Source Convention (OSCON) this week offers the opportune time for NPR and New York Timesprogrammers to discuss the release of their news source Application Programming Interfaces (APIs).

NPR’s announcement came earlier in the week. NPR’s API introduces the ability to write applications surrounding public radio’s text and audio from most radio programs dating back to 1995. It was only a matter of days before Phoenix programmer John Tynan exemplified what one can do with the API by mashing up NPR headlines with a Simile Timeline visualization.

Likewise, New York Times programmer Derek Gottfrid is excited about his API. Officially on the menu: public-ready releases of some of the APIs they’ve used internally. First out of the gate later this year will be read-only APIs in distinct content segments, like movie reviews, restaurant reviews and wedding announcements.

Both APIs follow Reuter’s lead: The news agency released its API in May. If the APIs take off, soon all major global news organizations will be offering audiences ways to craft their own presentations of what the news is and what it looks like on the Web.

Wired.com took Dan Jacobson and Derek Gottfrid from NPR to a Portland restaurant to talk about their company’s news APIs...

Wordpress Adds Turbo Button Using Google Gears

By Scott Loganbill

 Wednesday is Wordpress’ five year anniversary since its original 0.7 release, and the online content management system prepared for it by going “turbo.” The online version of WordPress added a link which turns on Gears and makes your administrative dashboard faster.

Google’s recently open-sourced Gears is an add-on for Firefox 2 and 3 and Internet Explorer 6 and 7 browsers used primarily for downloading, or synchronizing, files for use locally and/or offline. When you click on the turbo link, WordPress uses Gears to download up to 200 files which speed up WordPress functions. The effect combines WordPress’ online capabilities with desktop application power by running JavaScript in the background and utilizing a local database of synchronized data.

Gears is increasingly growing more common since MySpace demonstrated Gears’ ability to speed up search and sort functions on its messaging system. MySpace and WordPress show Gears can be used for more than just offline web storage. Gears is also similar to advancements promised in web standards such as HTML 5.0, which is slowly being tuned into modern browser features. Both Gears and HTML 5.0 are a good indication of where rich internet applications of web 2.0 (3.0?) are headed.

Adnets Weekend

Boston Globe
Globe and Mail, Canada - 7 hours ago
It will tell the network how the future TV network needs to conduct itself in an industry where $76-billion worth of advertising is at stake. ...
TV Guide Network Teams Up With NBC Universal to Promote NBC's ... MarketWatch
Obama buys Olympic TV ad package United Press International
Sony Playstation, Kimberly-Clark and More Join High-Performing ...
PR.com (press release), NY - Jul 25, 2008
The Ad Network is now extended to the web sites of Sony Playstation, Acer, US Robotics, Kimberly-Clark and Screen Life Games, where retail partners are able ...
Hard Rock Hotel and Casino Deploys Scala Digital Signage Network ...
PR Web (press release), WA - Jul 25, 2008
... entertainment, government and other industries for diverse applications such as retailadvertising networks, corporate communications (employee TV), ...
Beating back ads that pay ISPs to track your Web habits
Providence Journal, RI - 2 hours ago
"Embarq followed the prevailing industry practices of the most similar business model, that of online advertising networks, which also collect anonymous ...
Unique Partnership to Offer Pharma Companies Comprehensive Suite ...
FOXBusiness - 14 minutes ago
... from advertising, through three autonomous global advertising networks, Leo Burnett, Publicis, Saatchi & Saatchi and two multi-hub networks...

Microsoft Searches for Revenue With Facebook
InternetNews.com - 20 hours ago
... noted that advertising on MySpace has not produced the revenue they had hoped, a difficulty they described as symptomatic of social networks in general. ...
Microsoft looks to Facebook to expand Live Search Computerworld
Microsoft Seeks an Ad Friend in Facebook New York Times
Microsoft Live Search to Facebook: Good Move, But No Silver Bullet Conde Nast Portfolio
ReadWriteWeb - AccuraCast MSFT

MediaPost Publications
iPhone Spawns New Ad Networks
MediaPost Publications, New York - Jul 25, 2008
"By adding ad-supported iPhone applications to JumpTap's mobile advertising network, we can immediately provide high-quality brand advertisers to our ...
More Ads Coming To iPhone Apps: AdMob Expands iPhone Ad Network Silicon Alley Insider
A Valuable Introductory Guide to Projecting 3G in Emerging Markets ...Business Wire (press release)
Europe - Broadband - Regulating Fibre Access Report Examines ... Storage
VisionChina Media Announces Second Quarter 2008 Results and Raises ...
華富財經, Hong Kong - Jul 24, 2008
Entry into Shanghai, China’s largest advertising market, completes our mission to become a premier national network with a strong and scalable business ...VISN
NeoEdge Introduces Breakthrough Online Video Advertising ...
Market Wire (press release) - Jul 24, 2008
MOUNTAIN VIEW, CA--(Marketwire - July 24, 2008) - Starting July 24, NeoEdge Networks, Inc., a leading advertising network focused on providing television ...
Online Ad Buys Buttressed with 25% Make-Goods Marketing Vox News
Luxury brands discover social networks
International Herald Tribune, France - 21 hours ago
Many fashion and luxury companies have also been advertising for some time on ASmallWorld, an invitation-only social network aimed at wealthy consumers. ...

Social Media Weekend

Misuse of Social MediaSocial Implies Human Interaction, People!
Profy - 7 hours ago
Spending all of my online time using either social media tools or reading news, I'm used to the typical reactions to news that you'll see on Twitter or in ...
Inspired by Randy Pausch's life and lecture Examiner.com
all 3 news articles »

The Social Media Minute
CMSWire, CA - 21 hours ago
By John Conroy Social Media moves so fast, it’s hard to keep up. Here’s the week’s major developments, in scan-friendly format. *It’sa Miracle! ...
Google Knol: The First Real Challenge to Wikipedia? Web Ad.vantage
Google takes wraps off ad-driven Internet encyclopedia after 7 ... TMCnet
all 346 news articles »  GOOG

Sydney Morning Herald
The Big Business of Tiny ...
InternetNews.com - Jul 25, 2008
By Susan Kuchinskas: More stories by this author: SAN FRANCISCO -- They used to say there was no money in social media. You wouldn't know it at f8, ...
Facebook: Movement or Business? TIME
Mark Zuckerberg Says Facebook Connect is the Future eWeek
Private social network Facebook to go Web wide Reuters
Asia Times Online - Wall Street Journal
all 389 news articles »
Crowd Sourcing The Big Issues In Social Media: Race, Gender ...
Profy - 7 hours ago
Gender gap/social media, race/social media, poverty gap/social media or generation gap/social media." I must admit I picked a hard time to conduct a Twitter ...
New social media conference in September
Bellingham Herald, WA - 7 hours ago
Featured speakers will focus presentations for small- to medium-size businesses about how they can benefit and generate revenue from social media marketing, ...
Penny Kim Joins Dialogue Media - MWW Group's Industry Leading ...
FOXBusiness - 18 hours ago
As digital media specialist, Kim brings expertise in online marketing, brand management, paid search (PPC), display mediasocial media, SEO and copywriting ...IPG -OTC:CMTX
GET Interactive and Gydget Announce Groundbreaking New Technology ...
MarketWatch - 12 hours ago
Gydget provides a social media marketing platform that allows users to reach audiences onsocial networking and fan-based websites. ...

Social media defines the value of aging
Examiner.com - 21 hours ago
The most valued social media have high cross-connective capability. They tend toward integration of multiple platforms. Well-supported aging brains have the ...
Social Media Release: Cisco Announces Winner of Tournament of Aces
Prdomain Business Register (press release), India - 18 hours ago
Etvino Rogelio Medina has won the Cisco® EDGE QUEST Tournament of Aces, receiving USD $10000 and a Cisco Aggregation Services (ASR) 1002 Router, ...
Beta Version of MyPRGenie, Breakthrough Interactive Social Media ...
MarketWatch - Jul 23, 2008
NEW YORK, July 23, 2008 /PRNewswire via COMTEX/ -- An executive from MyPRGenie, the first-of-its-kind social media platform designed specifically to help ...

Blog Weekend

New York Times
Comcast communicated by blog
VNUNet.com, UK - 13 hours ago
A Washington student got a bit of a shock when he received an email from internet service provider Comcast about comments he had made on his blog...
Is 'Big Brother' watching your blog? Seattle Post Intelligencer
Comcast is listening ... to you complain Los Angeles Times
Griping Online? Comcast Hears and Talks Back New York Times
bMighty.com CMCSA

Comic-Con: Stars banter at 'Dr. Horrible's Sing-Along Blog' panel
Entertainment Weekly - 11 hours ago
He was talking about the success of Dr. Horrible's Sing-Along Blog, his three-act, Internet-only flick about a lovelorn wannabe-supervillain with a penchant ...
Dr. Horrible's Highest Lights E! Online
Live from Comic-Con: Big Plans for the Future of 'Dr. Horrible's ... BuddyTV
'Horrible' belts out wonderful fun Modesto Bee
Cinema Blend - Zap2it.com
Cisco Unified Communications Blog Introduction
NetworkWorld.com, MA - 13 hours ago
It has been brought to my attention that I have not formally introduced this blog to the readers. I would like to use this blog entry to do so. ...SIN:U18

Vancouver Sun
Athletes to blog Olympic Games
VNUNet.com, UK - 14 hours ago
They will be asked to blog the Olympics as it happens “Writing a blog gives me a chance to reflect on the experience of a rower preparing for the Beijing ...
Lenovo Launches Blogger Program for Athletes on a Journey to Beijing MarketWatch
Why Apple and China are Simply Incompatible InternetNews.com
MLB Trade Deadline Blog
ESPN - 18 hours ago
Even with the trading deadline less than a week away, the Reds have had very little action on Adam Dunn. But one club that spoke with the Reds says the ...
LA Times Music Blog
Los Angeles Times, CA - 19 hours ago
Shooting a documentary about high school teenagers must be like trying to capture a smoke ring in a jar, but director Nanette Burstein has spun a thousand ...
Zacks Analyst Blog Highlights: Halliburton Company, AK Steel ...
FOXBusiness - 9 minutes ago
CHICAGO, Jul 25, 2008 (BUSINESS WIRE) ----Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts ...AKS -HAL - PFE
Search this blog
ScienceBlogs - 5 hours ago
I am the Online Community Manager at PLoS-ONE (Public Library of Science). My job is to try to motivate you to comment on the papers there. ...
Blog Carnivals - what is in it for you? ScienceBlogs
Training Camp Day 1 Morning Practice — Live (almost) Practice Blog
Palm Beach Post,  United States - 55 minutes ago
By Ben Volin | Saturday, July 26, 2008, 08:49 AM The live practice blog you have grown to love is back for another year. Hopefully you get a chance to check ...
NICHOLAS J. COTSONIKA'S BLOG Camp snapshot: Punter’s skills impressive
Detroit Free Press, United States - 18 hours ago
By NICHOLAS J. COTSONIKA • FREE PRESS SPORTS WRITER • July 25, 2008 The Lions have added more bleachers at training camp this year. ...

Jul 25, 2008

Apple Inc.

Customers examine a display at an Apple computer store, in Boston, Monday, July 21, 2008. Apple Inc. says its fiscal third-quarter profit climbed 31 percent from a year ago. It was helped by demand for its Macintosh computers and iPod media players...

The Final Days of DRM: Yahoo Music Store Closing, Will Eat Your Purchased Music

Picture 441.pngDigital Rights Management technology is dying, it's becoming understood that hobbling tunes to enforce scarcity isn't the best way to monetize the music business online. What about all the suckers who bought DRM laden music in recent years, though? When the Yahoo! Music Store closes its doors this fall, the company announced today, past customers dependent on their music "phoning home" to get license approval before playing are out of luck. They'll be able to continue playing purchased tracks on a single computer, until they make any changes to their operating system...

More AOL Cost-Cutting: Dumping Properties; Cutting Back On Blogs (TWX)

AOLLogo.jpgAOL is "sunsetting" (i.e. killing or trying to sell) some of its underperforming units, including Bluestring, Xdrive, AOL Pictures and MyMobile. TechCrunch has the memo, issued last week, by EVP Kevin Conroy, who oversees the company's product group. Conroy's unit will now focus on projects like its Truveo video search, though PaidContent notes that Tim Tuttle, who ran Truveo before AOL acquired it two years and has been managing it since, is now just an advisor.

Meanwhile AOL is also telling bloggers who contribute to its Weblogs group to stop writing, at least for now. Blogs going dark include Diylife.com, The Unofficial Apple Weblog, and DownloadSquad...

MacNN - Jul 23 12:18 PM
Microsoft's most ardent supporter of the Zune is giving up on the player despite having gone to the extent of receiving three Zune-themed tattoos, according to a statement by the fan himself. Having earned a reputation as one of the most avid early adopters, Steven Smith now says he will hide the tattoos and largely exit the community after disappo...

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