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Koral, Salesforce, and a Video you should watch

I ran into an old friend and co-worker, Mark Suster, at a Valley event last week.  I haven't spoke to Mark in probably a decade, but he has been very successful and is one of the more thoughtful software/business guys I know.

I Googled him after the event and came across a video he did about his venture history and, more importantly, what he learned about through building and selling software to enterprises.  It is absolutely uncanny how similar our experiences were and the lessons we took away.

Watch his video on Scoble's blog here.

Seriously, watch the video.  He is a very thoughtful guy and much more pragmatic than most software execs you will run across.

What I liked:
1. Simple insights that are devastating to the model of his industry - A content management system without folders is almost heresy to anyone but the Web2.0 world, but Mark got it - folders are just places to lose content in at large corporations.
2. The real dynamics of software development - When you charge a lot of money to large enterprises for your software, it will never be usable.  This might actually be a law of physics.

There is more, so watch it.

Both Mark and I met while working on a very large custom software project for a huge utility in Southern California.  It was years long and impossibly expensive.  In the intervening years I started an ecommerce software integration firm (Fort Point Partners) and he started an Internet firm for builders.  We both raised a great deal of money, suffered through the downturn and created new products. His recent venture, Koral, is now part of Salesforce.com.

'Official' at Last: Faster, faster, faster Marketing

"Many people think the technology revolution in
marketing is about Web sites and interactive
advertising. It’s not. Speed and the customer’s
experience with the brand are the two most important
marketing strategies today."

This is the lead-in to a new study by management consultancy Sapient and the Kellogg School of Management at Northwestern University (blogged here). The report, titled The New Marketing-IT Power Partnership, finds that IT and marketing must work more closely together in order to speed innovation and boost the bottom line.

Speed, and customer experience. Hallelujah!

Whether you call it Agile marketing, or Velocity marketing, or just marketing that moves fast enough to notice, it is the future.  And IT's job is to do everything in its power to increase responsiveness and take itself out of the path of the marketing cycle.  Marketers must be able to change programs and campaigns based on the changing needs of our customers, our campaigns will never be as strong or successful as they could be.

Another great quote:

"How does Netflix stay ahead of the curve? They
constantly experiment with how technology can
enhance consumer and partner touch points. In fact,
Netflix makes significant changes to its Web site
every two weeks in order to improve their customers’
experience.

Lets put it more simply.  Your customer, if they have a noteworthy experience with your brand (positive or negative) can publish their opinion in about 5 minutes on a blog, forum, wiki, or review site.  With the current state of IT and Marketing at many large brands, you can publish new information to your own digital media in about 4 weeks to 3 months.

They are running circles around you.

As we're all learning in the age of the Web 2.0, it's all about the customer experience, and we must learn to maintain a site that is as changeable as our customers, and that is as varied as the needs of our various customers.

So I agree, wholeheartedly: Yes, marketing needs to work with IT. If we can understand each other's needs and fears, we will have come a long way. (Perhaps we can even convince them to do away with the holiday lockdown...)

On the other hand, we as marketers need to learn to stand on our own. If our every site need hinges on the ability for IT to work us into their schedules - no matter how closely we work together and how understanding IT has become of our needs - we're still hamstrung. Marketers need the ability to test and to optimize in real time.

This is why we created Offermatica. After building Jcrew, Nike.com, BestBuy.com and about 40 other ecommerce sites, it became clear that no amount of spending on IT was going to solve the problem.  That is why we set out to create a content delivery platform that could move at the speed of marketing and target customers anywhere they went. The holy grail was to eliminate IT from the path of a marketer who had a great idea and wanted to get it in front of a customer fast and learn.

On a final note, the report suggests that marketers be the ones to reach out. It's time to stop working in silos and work as a team.

MSFT to Acquire AQNT - Seattle Roars back

According to Marketwatch this morning, Microsoft is acquiring Aquantive.

Doubtless this deal is directly linked to the DoubleClick aquisition by Google, and it continues the battles between Mountain View and Redmond. With the announcement of 24/7 heading into the hands of WPP, this leaves only a few standing - Accipiter? Zedo?

There are two ways of looking at this frenzy - First, with search highly optimized and relatively stable around the majors, marketing money is searching for a home and display advertising is certainly the largest spend that is still open for competition. With a predicted continuing influx of brand dollars into interactive, owning a greater share of the spend is a good growth bet.

The other side, however, is even more interesting.

What this is also a likely sign of is the maturation of the online media market from a real estate perspective.  For over ten years, there has always been limitless "frontier" of available marketing real estate, and we have finally colonized the last bit of land on the Pacific Coast.

The value of a good display ad network is not the technology (a team of quality engineers could relatively quickly).  It is the network.  Aquantive and Doubleclick have enormous numbers of impressions per month (DCLK is 6B/month).  The tags that drive this traffic are the value.  They are the real estate.  Just getting the tags on the sites took almost ten years.

As recently as a few years ago, it was not unreasonable to start up a new ad serving technology.  Falk AG, Zedo, and others were successful with pricing and technology strategies that drove demand. But this was because there was still new real estate that had not been exploited.

These days, the combination of ad networks like Blue Lithium and Federated Media (and many others) plus the publisher networks have opened up some new real estate in the long tail of small web sites and blogs, but the mainstream of traffic is already represented, and new, large sites like YouTube are rare.

I am glad to see Redmond in the game.  It is a hard business, and the question of what to do with Avenue A/Razorfish dwarfs the prior speculation about what Google should do with the Performics division of DoubleClick.  But strong product development will likely give a real boost to Aquantive's platform and that should benefit advertisers.

Google's Move to TV - Black Box or no?

Google has entered into television advertising with a new partnership with Echostar. The partnership includes the creation of an automated platform for ads running on EchoStar DISH Networks' 125 networks. Google will gain access to DISH ad inventory from across all channels and dayparts; Google's platform will then allow it to sell that inventory and provide measurement on those buys.

The buying of DISH Network ads will work much like AdWords and use a web-based auction system. The real-time reporting allows advertisers to see how their ads performed on a second-by-second basis and adjust creative or daypart scheduling accordingly. Advertisers can target by age or demographic data. Reporting data will be pulled anonymously from the four million DISH boxes currently in use. The program will, according to Google's Eric Schmidt, allow for the ads delivered to be more relevant and therefore more valuable to the viewer and advertisers, because they can be targeted more closely.

On the surface, this sounds like good news for advertisers. After all, commercial data on a second-by-second basis is something advertisers have long been searching for, yet even Nielsen's new commercial minutes ratings do not provide such detailed measurement.

But relevance and the ability to measure viewership alone are not enough. Advertisers will not be acting in their own best interests when they purchase television time via the AdWords ad management platform. Online, advertisers can look at the quality score assigned by Google, along with keyword bid, ad copy and landing page, to try to determine how the minimum price bid was determined and how they can improve how often their ad is served.

But on television, a "black box" process could hamstring advertisers, because the same tools for improvement do not exist.

There's also the problem of testing. Online, Google can be used to good advantage because advertisers can test different combinations of keyword, ad copy and landing page to see which drives the best ROI.

With television, testing is obviously far more cumbersome and costly. So while Google may be able to offer better measurement than the broadcast and cable networks themselves, what exactly are they offering to measure? Without a control ad against which to run a test, the measurement is far less useful. An advertiser may find that 120,000 people watched an ad. But, did they take an action as a result of the ad? Would a different ad from the advertiser have worked better?

As consumers lean more and more toward creating and/or choosing their own media for consumption when and where they want it (via linear television, time-shifted television with Tivo, via online sources like YouTube or broadcast network sites, via mobile devices, etc.) ads that aren't relevant haven't got a chance.

But I would love to see Google TV move beyond the black-box automation that it uses online.  If they do so, I believe that advertisers will be well-served.