I was talking to a friend of mine recently who runs a major national brand.  We were talking about the perils of running brand ads online.  His concern was that he didn’t have the ability to really understand where his ads were being placed or whether they were being seen by the right audience.  The folks at Mpire rolled out a service last year called AdXpose.  It asks as sort of the “Omniture for online advertising.”  Its an all-in-one solution to provide brand verification and campaign optimization for online ads.  The team put together a research white paper that you can request here that shows over 50% of online advertising is being wasted. 

The chart below looks at the cost of delivering an ad impression.  As you can see for a standard $1.00 CPM remnant ad the cost of delivering it is typically .$10 when you load in all of the manual cost and technology.  This is basically a fixed cost so a higher CPM brand campaign ($10-$40 CPM ad) barely feels this cost.  Knowing that there is so much waste in advertising today – brands and agencies are starting to figure out that they have to tackle transparency and accountability.  The price of this brand protection is relatively small especially considering that there is so much waste.  Plus, the opportunity cost is huge since there is so much upside in having consumer brands move their budgets online.  If you no that 50% of your advertising is being wasted and/or harmful to your brand, then it would seem to make sense that you'd want to track your campaign(s) with a microscope.

 

A recent PriceWaterHouse Coopers study indicated that nearly 1 in 3 ads is never even seen because they are below the fold.  Today, only 7% of the global US media budget is spent online.  80% of that volume is distributed thru indirect channels like ad networks or ad exchanges.  The answer to the question on what is the price that a brand manager would be willing to pay for brand protection – its priceless.  

Some interesting thoughts from Mpire's Kirby Winfield from this post on Adotas.  Kirby is always excited about talking to potential customers.

I did a recent blog post about 90-day planning.  One of the things that I didn't mentioned was the importance of communication.  Once you have your plan don't forget to communicate.  Communicate the hell out of it.  Build a communication plan around it.  Rather, a PR plan around your plan internally.
Simplify your key metrics, hold monthly meetings, send regular meetings, etc.  Just when you think you are clear, you are not.

A useful exercise especially when starting a new venture or new job is to have a written plan for your first 90 days.  Obama was very proscriptive about his first 90 days.  In fact, in order to send the right tone for your leadership administration - the first 90 days are critical.  I fundamentally believe that your 90 day plan should be posted and communicated to your employees, your Board, and executive team within the first week.  The plan should include:

Financial metrics - an overview of your top 3-5 key performance indicators (KPIs) for your business as well as the budget number.  Make the financial message easy and memorable for anyone to understand.

Initiatives list - list your top 3-6 initiatives; these are key to implement as part of your business.  Those should be bubbled up as part of your regular strategic planning process.  Some tips are here.

Detailed list of tactics by month - list out the top activities that your team and you are going to accomplish each month

I am thoroughly convinced that most of the success with running a business is planning (and the rest is luck).

I touched on the Web 2.0 players starting to charge for their platforms in my 2010 Technology Predictions.  A recent post shows that they are getting much more serious about rolling out their much lauded payment and credits platform.  A good post on this is at Inside Facebook.

Now that I've posted my results for 2009.  Here are my predictions for 2010. 

Apple will have another hit with the Apple Tablet (iTablet) - get ready for the cage match between the iTablet and the Amazon Kindle.  The Applet Tablet wont be a revolution and certainly wont have the same type of unit distribution as the iPhone or the iTouch.  The last bit of estimates that I saw for the Kindle was close to 500,000 new Kindles in 2009 and most likely accelerating to a couple of million in 2010.  That's not like the 40+ million iphone and itouch units that have shipped but the tablet is going to be a strategic product for the Apple.

Augmented reality is the big trend in smartphones - yes, its cool to see the overlays on our screens during football games but imagine having rich data overlayed with you (wherever you are). 

Location-based services is the new land rush - we have all been waiting for sexy applications that serve up highly relevant information.   There are a lot of startups doing cool things like FourSquare but the large players are going to have the scale advantage.  Twitter is already all over the location trend and with their acquisition of Mixer Labs (the team behind GeoAPI) they are certainly the first legitimate player with scale.  Facebook and Google will come out swinging hard in 2010 though.  Facebook has been slow and methodical due to their previous missteps related to privancy issues (aka Beacon).  But, when they release their location offering they will be a formidable location-aware platform.

Show me the money - I whiffed my prediction last year around M&A activity in 2009.  M&A activity was down a whopping 56% YoY from 2008 to 2009.  Next year will definitely have an increase from 2009 levels but not 2008 levels.  Venture activity will be up to 2008 levels. 

Google will significantly ramp up enterprise efforts - they are coming at Microsoft with everything that they have and in 2009 they publicly talked about enterprise as a strategic growth area.  They have been doing all of the right kind of enterprisy things like integrating with enterprise class clouds like Salesforce and providing SLAs.

Social games go to the Web - I am doing a lot of work in the social gaming arena.  The social gaming category is white hot with the top 3 players (Zynga, Playfish, and Playdom) generating over $400M in 2009 revenues.  In addition, there was one big acquisition of Playfish by EA for $400M.  2010 is when the social gaming category grows up.  The key social players will realize that they have to diversify out of Facebook and build direct-to-consumer experiences that leverage their strengths on the social platforms.  Zynga is already doing this with Farmville.com.  You've got to be nervous about building a business on someone else's platform (Facebook).  Take it from me (running GameHouse.com), its powerful to be able to have your own platform that you own.

The new guys grow-up - Twitter and Facebook will more aggressively roll-out monetization in their platforms.  Something tells me that when you see so many companies making money on your platform (in the case of social gaming, dangerously close to Facebook's revenues), you'll want to start to collect taxes as well as extracting revenue.  This will be done judiciously and methodically in order to not risk traffic growth.

Seattle startup acquisitions - last year, I predicted 4 Seattle companies to be acquired last year.  One was acquired (Urban Spoon was acquired by IAC).  In 2010, I am putting my chips on BuddyTV and Picnik.  Of course, Mpire should be acquired but I am obviously conflicted on that call.

Here’s to a more prosperous 2010.

Its that time to reflect on the past year and to think about the future.  Last year I posted some predictions.  I'll run through them and give my own personal view of how well I did.  Please comment if you disagree with my self-grade.  I'll be grading myself with a bucolic rating system of: "nailed it", "borderline"", and "whiffed it.".  Here we go:

Video Finally Takes Off

Prediction:  Overall consumption of video increases significantly on Web.  I think they'll grow from their current market share of videos watched from 37% to 45%.

Result:  Comscore reported that there are over 14.4 billion videos played meaning that nearly 75% of all online video users watched a video.  Google kept is dominant online video share at ~41%.

Grade: "Nailed It"

More ad networks versus less
Prediction:  Contrary to a number of predictions, there will be more ad networks versus less.  With 80% of the ad supply being sold thru indirect channels there will be more than less ad 
networks.  There will be better control over supply by publishers and everyone on this Comscore list (View this photo ) will be there by the end of 2009.  Anyone who is building 
unique IP will have a chance at an acquisition.  Yield technology in advertising is going to be a big theme in 2009 since all other forms of targeting are basically commodities.

Result:  Yep, no one dropped off the list.  The death of the ad network has not happened.  In fact, one of the smaller ad networks actually went public.  Interclick (ICLK) went public in November 2009.

Grade: "Nailed it"

Everything is simpler and smaller
Prediction:  We don't have the IT budgets that we once did.  Smaller and simpler devices will take off.  For example, industry sources say more than 11 million netbooks worldwide were sold  in 2008, up from just around a million in 2007.  Netbook sales will easily double in the new year.  Also, the majority of all phones next year will be smart phones (over 50%).

Result:  Netbook shipments have grown by 103 percent year-on-year in 2009 according to a latest DisplaySearch report. Netbooks were 19.6 percent of total portable PC shipments and sales were 10.4 percent of the total.

Grade: "Nailed it

The giant sucking sound

Prediction:  There are going to be tons and tons of consolidations in the technology space.  Big guys will buy big guys.  Small guys will merge with small guys.   Small guys will get bought 
by big guys.  There will be a lot of great deals out there for companies with capital.

Result:  As much as I was optimistic about 2009 and with the recent flurry of M&A activity (e.g, EA buys Playfish for $400M, Google buying AdMob for $750M, HP acquiring 3com for $2.7B, etc) the M&A market was relatively weak versus 2008.  VentureSource's last report had 71 venture-backed M&A deals for a total value of $2.25 billion. That compares to 84 deals at 5.2 billion for the same period last year. It is taking longer for an exit, too (a median of 6.1 years).

Grade: "Whiffed It"

It’s cooler to start a business than a rock band
Prediction:  There are massive layoffs and the economy is bad.  Per the above, when consolidation happens, unemployment increases.  People are only an hour away from registering online for a new business.  That combined with free SaaS (Software As A Service) software and easily registering for a domain name -- you've got the makings of a business.  There is an estimated 27.2 million small businesses in the United States and they employ 40% of high tech workers.  New small business registrations will grow by one or two points in 2009.

Result:  We are in the midst of one of the worst recessions in our lifetimes.  There was a lot of government packages and assistance starting to be passed by Congress towards the back half of the year.  Too little and too late in my opinion.  We didn't see 2 points of growth.  In fact, unemployment is not getting much better -- we need jobs for the economy to recover.

Grade:  "Whiffed It"

The future is cloudy
Prediciton:  2009 will be the year of cloud computing.  The companies that benefit are:  Amazon, Hewlett-Packard,  Sun Microsystems, IBM, and Microsoft. In addition, SaaS takes off even more.  With the worldwide economy in trouble, lots of layoffs, and pockets that are bare, SaaS  will take off more than ever as measured by overall consumer adoption of the Internet business population.

Result:  Although Larry Ellison was famous for his cloud computing rant this year, Larry can't deny that every major player in the space from Amazon to Google is betting in cloud computing in a big way.  I personally saw the advantages of using services like Amazon's EC2 at Mpire -- we basically wired an ad optimization into our infrastructure over night.  A startup could not have afforded the horsepower (not to mention the fast mover immediacy of the cloud) several years ago.  Powerful stuff.

Grade:  "Nailed It"

Windows gets its mojo back
Prediction:  Windows 7 will ship on-time (not in 2009 for an SP1 but it will be solid enough to get their mojo back).   Vista will feel like a bad hangover.  Windows 7 will be faster, more usable, and introduce some cool virtualization features.  Google will start to OEM an OS to PC manufacturers but Windows 7 and Microsoft's business juggernaut will successfully relegate it to a minor initiative.

Result: A lot of my friends chided my on this predictions. Windows 7 hit a July release-to-manufacturing date of July 2009 and a full release to retail on October 2009.  Microsoft did a bunch in 2009 to revive its mojo.

Grade: "Nailed It"

Microsoft buys Facebook
Prediction:  Facebook realizes that it needs a revenue stream.  Microsoft needs a platform to grow search share.  Facebook and Microsoft do a deal to change the search marketplace by integrating better social search.  The valuation gets a major haircut from their $15 billion valuation (crazy 100x sales valuation).  The deal gets done at big (crazy?) multiple at 20-25x or around $10 billion.  Microsoft can buy 100 more little companies to try to grow search share or do a big deal.  Plus, Microsoft shouldn’t let Google hook their FriendConnect initiative around such a large social hub like Facebook.  They ditch buying the Yahoo search business and look to change the search game on the social side.

Result:  A big "Whiffed It".

Microsoft buys Yahoo search
...And then they buy Yahoo's search business.  Deal is done in May of 2009.

Result:  We all know the news on this one.  MSFT and Yahoo cut a huge search deal during the middle of this year.  They didn't close on a full acquisition...so my grade is "Borderline"

Seattle company acquisitions

Prediction:  The following Seattle-based companies will be acquired in 2009:  BuddyTV, Visible Technologies, EvoLanding,  and Urban Spoon.  M&A in 2009?  Heck, it can happen and these companies have gotten scale and have relatively low invested capital.

Result:  Hey, one out of four ain't bad.  Urban Spoon was bought by IAC in April of 2009. 

Grade:   Borderline

So, I nailed 5, whiffed 3, and 1 was borderline on 2.  2010 predictions coming soon.