We’re pleased to announce that Paridym Pictures has acquired SilverDock’s video production business.

Paridym Pictures is a Silicon Valley based production house that specializes in creative video content for business marketers.  Paridym’s creative branding solutions generate tens of millions of targeted viewers and millions of dollars of revenue for clients. With this acquisition, Paridym extends its services into high-volume product videography.  SilverDock’s team will continue to serve existing and new clients in partnership with the Paridym team.

To welcome SilverDock clients, Paridym Pictures is offering a complimentary creative brief (normally $250) at no cost to you, along with 10% off your initial production package. To take advantage of this special offer, contact us or  contact Paridym directly at 650.450.4394.

On a personal note, I’d like to thank you for your support and patronage over the past four years.  We’ve really enjoyed working with you… and we’re looking forward to continuing to serve your video needs as part of Paridym Pictures!

Sincerely,
Raj Gajwani

While the data are interesting, the picture is more complicated than the headline numbers indicate.  I doubt that the average online video placement costs 4x the equivalent TV buy.

First, these averages are not apples-to-apples comparisons.  The $25 to $35 headline CPM for online video is based on rate cards from premium properties with limited high-quality inventory.  The reality is that there’s lots of “dark fiber” out there — lower quality video inventory that remains unsold.  As the market grows and as advertisers get more comfortable with ROI-based video advertising (rather than prestige buys), you’ll see the market fill out with cheaper video ad placements.

Second, the online CPM data is highly suspect.  eMarketer’s source data about online advertising rates relies on rate cards and analyst estimates — but I can guarantee you that buyers are getting significant discounts off rack rates.  Moreover even the analysts recognize that they’re grasping at straws:

“It is all over the place,” said Rino Scanzoni of GroupM in a MediaPost article.  “It is very hard to say this is what the average is. The average is made up of some big, big swings, depending on what you are buying.”

American Apparel has launched its new “Le Sac Dress” with the pitch that you can wear it twelve different ways.  So they’re using a series of product videos to demonstrate how to wear “Le Sac”.  Interestingly, they’re also posting their fashion apparel videos to YouTube to promote the line.

It’s a great concept, and very helpful to consumers.  And American Apparel is smart to use this video content as a promotional tool.  There’s room for improvement (faster pacing on the videos, better playlist indexing, larger or zoomable video, improved seek within videos, etc) but clearly even this basic step is enormously helpful to the new product line.

Creating a video strategy involves:

• Setting goals. Too often, technology is implemented for the sake of technology. Whether increasing advertising revenue, decreasing customer service costs, or driving brand awareness, video must tie back to a greater organizational or campaign goal. Goals should then map back to video metrics — such as views, revenue, comments, or uploads — that are continuously tracked, reviewed, and revised.
• Identifying the target audience. Identifying the target audience is a key step in creating the right type of video content for your goals. In selecting an audience, organizations should be cognizant of, but not beholden to, the stereotype that heavy video consumers are young and male. Large populations of females and adults are being underserved and represent key demographics to target. Lastly, product professionals should make sure video content is linked to the core brand message and audience — efforts to seem to young or luxurious will come off as unauthentic and often result in user backlash.
• Developing processes. Video is not a one-time investment — consumers expect updates to video libraries and innovation around the experience. Organizations must establish ongoing budget, headcount, and processes for video. Organizations where video technology is not a core competency — such as marketers — should evaluate a build/buy decision with video platforms such as Brightcove, Ooyala, and Permission TV.

1. Optimize video for search
2. Distribute video across the Web
3. Add context to the video on the Web page
4. Reduce video load time
5. Enable video sharing

People spend 34% of their media time online, compared with 35% watching TV, according to a recent study by Forrester Research. But TV’s percentage of ad spending is 31%, while the Internet draws only 12%—of which paid-search advertising is close to half.

Brand.net, an ad firm, estimates that only 5% of brand-focused advertising dollars has moved online, compared to 30% of direct-response ad dollars. Changing that requires better performance measures for display ads and better targeting for specific demographic groups. Standardized formats for video ads would be helpful, too.

• Picture Quality is less important than you think.  In fact, Christine argues that informal video can be better than high production values:

a handheld flip camera or phone now adds a new dimension to the relationship between the video product and the person. It adds a feeling of intimacy, real-time discovery, and inclusion — qualities that help break down the walls between images and the viewer. The content is more approachable and brings the user into the conversation more readily, whereas high definition has a tendency to psychologically create an extra wall between the content and viewer.

• Storytelling is critical, but this new medium allows far more creativity in our stories:

it’s no longer just about shaping the perfect trajectory: story, conflict, and conclusion. Somewhere in between the creation of reality television and the first online video blog, storytelling forever broke through the fourth wall: fiction and non-fiction interweave, real-time communication tools allow for constant connection and influence within a story, and co-development, mashups, and game play lead to endless interpretations and re-inventions of a story.

• Audience is no longer a vague concept:

Today, the fact that we can collect data about the online audiences watching video is even more of a reason to assess the quality of video by the audience attached to it…  Being able to effectively target and motivate an audience is just as much a critical part in defining the quality of a video. The ability to connect people and to spark communication is a capability that surpasses the surface value of the highly produced film and television shows of yesteryear.

It’s clear that photographic cameras are colliding with video cameras, in a very “Innovator’s Dilemma” way.  There was much talk about how the Canon 5D can now shoot very high-quality video.  (From the other direction, the Red video camera shoots excellent stills).  Bottom line — the artificial line between photographers and videographers is blurring.  My takeaway for the creative professional is, as always, to think beyond the tools.  Today you can practice your craft more easily, and in more ways, than ever before.  So focus on your craft as an imagemaker and don’t bind yourself into the strict definitions imposed by yesterday’s technology.  Given the increasing competition that will inevitably continue, it’s time to emphasize your creative talent rather than your ability to operate a specific tool.

Ellis Au put together a lovely photo journal of the day (thanks Ellis!).

Photo credit: Ellis Au

It’s been a packed day with lots of insights.  My seat-neighbor (Jordan from REI) commented that this conference feels a bit like an eCommerce conference in 1997 — very true.  These are early days and the early adopters are experimenting all over the place.  Results seem universally positive, often shockingly profitable.

Surprisingly, there’s a lot of negativity about YouTube as a distribution channel. Craig from Altrec commented that Google’s Universal Search can cause your YouTube videos to rank higher than your own product pages — which sucks because YouTube offers no good way to funnel traffic to your site.  The consensus is that YouTube has marginal utility for the online retailer.

Our friends at LiveClicker are putting together a “Video Commerce Summit.” The one-day summit takes place on Tuesday June 2nd in Seattle (plus an opening reception at Safeco Field the night before).

I’m exited to see this purpose-built event come together.  While everyone knows that online video is a big deal for e-commerce, the massive retail conferences really only skim the surface.  The devil — and the money — is in the details.  That’s why a dedicated full-day seminar, with credible speakers and participants, is such a great idea.  As I write this, the summit’s attendee list is diverse and impressive.  It’s going to be a fun group, and together we’re going to push the envelope a little.

The summit agenda is packed with timely sessions, and I’m pleased to be moderating a morning panel with video innovators from eBags.com, Altrec.com, and OnlineShoes.com.  The agenda will cover topics including:

• How the web’s most innovative online retailers develop winning video content strategies
• Cutting costs by applying scarce video production resources effectively
• Video merchandising tips & tricks from the pros
• Proving the business case while breaking knowledge & organizational barriers
• Profiting from video SEO, affiliate video, video email, and on-site video alike
• How video acts as the lifeblood of profitable social media strategies

There’s some tasty icing on this cake, too… a private-suite opening reception at Safeco Field to watch the Mariners play the Orioles.

For more info, visit the Video Commerce Summit website. Attendance is limited to 50 qualified participants (as of today, I believe there are a few spots still available).

Now researchers have deduced that people enjoy watching TV shows MORE with commercials than without commercials. Excerpts from the NYT article:

In two new studies, researchers who study consumer behavior argue that interrupting an experience, whether dreary or pleasant, can make it significantly more intense.

“The punch line is that commercials make TV programs more enjoyable to watch. Even bad commercials,” said Leif Nelson, an assistant professor of marketing at the University of California, San Diego, and a co-author of the new research. “When I tell people this, they just kind of stare at me, in disbelief. The findings are simultaneously implausible and empirically coherent.”

“The reason this happens, we argue, is that we tend to adapt to a variety of experiences, as they’re happening,” Dr. Nelson said. “Listening to a song, watching a TV program, having a massage: these all start out very enjoyable, and within a few minutes we get used to it. Interruptions break that up.”

Apparently the effect works for other pleasureable experiences, too — even a massage is more enjoyable if it’s interrupted!

Yahoo Shows Search Ads with Images and Video (NYT).  Excerpts from the pre-announcement:

Yahoo is introducing a new type of search advertising that integrates images and video in paid listings, the company plans to announce Thursday.

“It moves the advertising experience from just the blue links, to a more engaging experience for advertisers,” said Tim Mayer, the vice president for search monetization and distribution at Yahoo.

“Video is always more powerful than just words on the page,” said John Anton, the marketing director at Pedigree. “It’s definitely compelling to us to have options like this, where, when you type in ‘Pedigree,’ you get more than just the words, you get the video itself.”

According to Yahoo, some advertisers in the pilot program saw an improvement by as much as 25 percent in click-through rates. Karin Blake, the senior search manager at the ad agency Razorfish, who tested the offering for some of her clients, saw slightly less significant results: she said her clients had a 5 to 10 percent increase in click-through rates compared with a regular text ad.

Interestingly, traditional agencies and many digital agencies are not completely confident in their video competency.  That’s not surprising given the new challenges and skill-sets required for effective online video campaigns.  SilverDock did a record amount of business with agency partners in 2008; based on these results, we expect even more collaboration in the coming year.

Some highlights from the survey report:

• More than two thirds of respondents (67%) identified online video as a primary focus of their 2009 digital marketing campaigns.
• In Q2 of 2009, more than half (52%) of respondents expect to be implementing or extending an online video project, whereas currently less than one-third (32%) are doing so.
• A majority of respondents (63%) are most likely to invest in a branded content/video destination next year.
• Nearly 60% of respondents consider interactive video experiences to be the next evolution for online video.
• When asked how online video will enhance customer engagement, a vast majority (71%) stated it would help build brand awareness.

A recent MediaPost Insider article discusses the why’s and how’s of using online video for marketing and advertising.  In “Maximizing Online Campaigns with Video”, author David Rich outlines the bottom line for marketers:

Benefits of this New Production Model

Branding and Direct Response – Online video combines the emotional branding aspects of television and the direct-response attributes of the Web.  A recent Kelsey Group study found 55% of people who view a video visit the company’s Web site; 30% visit a physical store; and 24% make a purchase as a result of watching.

Affordability Doesn’t Impact Quality – This new production model doesn’t mean compromising brand standards.  High production values free marketers from the worry of poor-quality content that compromises the brand. Marketers can provide overall direction and creative input while these production network managers handle details like releases and quality control.

Testing and Targeting – Affordable production costs allow for testing video content and targeting different audiences.  Marketers aren’t forced to target the biggest pool of eyeballs with generic brand messages.  Instead, they can highlight multiple brand attributes that resonate with smaller niche audiences found online.

David Rich also points out that it’s important to design your video campaign for the needs of Internet users:

the Internet is a “lean forward” medium where people are actively seeking out information and don’t waste time on irrelevant items.  This requires marketers to deliver information in a way that engages and meets users’ needs, all on their terms. To thrive in this new environment, marketers must create video that:

• Is original and authentic
• Entertains and engages
• Meets audience needs
• Provides a path to learn more and share the experience

This chart is based on an Internet Retailer study, conducted by Knowledge Marketing and reported by eMarketer. The eMarketer report includes lots of useful charts and data.  For more information, see eMarketer’s article or report, called “Video Usage in eCommerce: The Best is Yet to Come”.

Most retailers have only just begun experimenting with online product videos, but early indications point to product videos becoming a powerful sales tool.

“Among the benefits of videos touted by Web retailers are a lower number of abandoned shopping carts, reduced return rates and higher sales,” says Jeffrey Grau, eMarketer senior analyst and author of the new report, Video Usage in E-Commerce: The Best Is Yet to Come. “And those are just some of the benefits.”

This information is excerpted from eMarketer’s announcements about their new analyst report covering the state of online video in eCommerce.  (And thanks to Dennis Marshall from Sellpoint for bringing this material to our attention).  The eMarketer report includes lots of useful charts and data.  For more information, see eMarketer’s article or report, called “Video Usage in eCommerce: The Best is Yet to Come”.

We think a better measure is PENETRATION — what percent of online shoppers are watching retail videos?  By that measure, video usage grew from 17% to 23% between Oct 07 and Oct 08.

That means that a quarter of the online shopping population was exposed to retail video as part of their shopping experience — a 34% growth rate from 2007.   As we reach the tipping point in usage of retail videos for eCommerce, watch for the penetration number to grow to nearly 35% in 2009 and 50% by 2011.

Other highlights from this data: unique viewers of retail videos increased from 25 million to 35 million during the course of 2008.  Contrast the 40% growth in retail video viewership with only 4% growth in overall visits to retail websites.

This information is excerpted from eMarketer’s new analyst report covering the state of online video in eCommerce.  The eMarketer report includes lots of useful charts and data.  For more information, see eMarketer’s article or report, called “Video Usage in eCommerce: The Best is Yet to Come”.

One of the biggest obstacles to retail video development, particularly in this economy, is high costs. “Nevertheless, seeing the sales lift from videos, retailers are exerting pressure on their suppliers to create video content,” says Mr. Grau. “This may be the year the logjam breaks.”

At SilverDock, we’re working hard to make video faster, better, and cheaper.  Why?  Because we know that retailers have unique demands for cost-effective and compelling video across lots of products and promotions.  With our “assembly line” approach, we can lower costs, reduce production time, and increase effectiveness in one fell swoop.

The bottom line?  Impressive product video and marketing video that increase your sales.

Consumers are increasingly avoiding newspapers — and books, too — because the text mode is now used so infrequently that it can feel like a burden. People are showing a clear preference for a fully formed video experience that comes ready to play on a screen, requiring nothing but our passive attention.
“Why Television Still Shines in a World of Screens”, by Saul Hansell in today’s New York Times

As Hansell’s insightful article points out, we’re witnessing a fundamental shift in how people consume information.  Humans are social creatures who evolved to favor personal interaction with each other.  Text is an adaptation to allow reliable storage of information, but it just can’t trigger the pleasure centers of our brains the way moving pictures and music do.  That’s why most Americans get their offline news from TV rather than newspapers — it’s more entertaining, more engaging, and frankly easier.

Text is not going away, of course.  But as we develop better ways to create and distribute video content, consumers will increasingly choose to watch video in their daily online travels.

TechCrunch is reporting that YouTube accounts for over 25% of Google’s search volume.  To put it another way, YouTube by itself is 1/3 the size of Google (in terms of search volume) and bigger than every other search engine… bigger than Yahoo, bigger than Live.com.  That’s quite a stat to wrap your head around!

We’ve been saying for quite a while that SEO (Search Engine Optimization) and SEM (Search Engine Marketing) strategies need to take video into account.  YouTube is beginning to offer really significant usage volumes, and the search engines themselves are mixing video results into “universal search”.  Keep your eyes open — there will be a lot of smart marketers making money on Video SEO in 2009.

We at SilverDock are glad to have been a part of Amazon’s Holiday Toy List again this year.  We produced a large number of product videos that are now live on the site.  Check ouT the Holiday Toy List to see for yourself!

One of the more interesting revelations of 2008 is the diversity of online video formats.  We see demand ranging from silent 15-second product clips (the “low cost, high volume” approach) all the way up to fully produced “web commercials”.

The tanking economy forces retailers to examine their ROI across the board.  In 2009, look for increasing measurement and accountability in online video — which will also mean less “one size fits all”, and more unique approaches to connecting with consumers.

Here are some highlights from the article, Web Sales Tactics: Virtual Salespeople and Zombie Videos:

From rings on QVC to toys on Amazon, retailers are increasingly using video to sell their products on the Web.

BabyEarth Missing that human contact at Internet shops? Employees at BabyEarth’s flagship store in Texas wear head cams to give online shoppers a more personalized experience.

They’re just giving the people what they want: In September, 32.6 million unique users watched video on a retail Web site, up 20 percent from a year earlier, according to comScore.

Videos offer shoppers a chance to virtually poke and prod the product before they decide to buy it. And, in the case of apparel, to see how a garment looks on.

“It’s the classic, ‘Does that make my butt look big?’” says David Fry, who’s e-commerce company Fry has built video platforms for clients such as Tassimo, the coffee-maker division of Kraft, and teen retail chain Wet Seal.

Really, it’s great for any kind of a product that you want to touch, Fry says. With handbags, for example, video allows you to see what the pockets look like, what the lining looks like, is there a zipper or snap, etc.

And, retailers are taking the cue: 43 percent of retailers surveyed by Shop.org said they planned to add or improve the use of video on their site.

Video raises the number of sales for featured products 30 percent on average, according to testing performed by Innovate Media, a California-based online video production company. “We’re seeing client after client with incredible video conversion rates, ranging from 12 percent to 115 percent with the average being 30 percent,” said Innovate Media President John Cecil.

…

the question for ecommerce merchants isn’t whether video works to drive conversions, but how to overcome production aspects, which is the biggest barrier for the average online seller.

Until now there have been very few resources for actually producing the videos,” said Cecil, whose firm charges $1,000 to $50,000 for production of online videos. “Most of the merchants delivering videos to agencies for distribution aren’t producing it ‘lights, camera, action’ themselves. They come to video production houses like ours with the product they want to sell online, and we produce a video around it. Then, once we started talking about production and delivery in the same breath, it totally changed our business.”

Raj Gajwani is the founder & CEO of SilverDock. Raj previously co-founded WiseConnect, a venture-backed maker of software for retail store merchandising. As CFO and COO of WiseConnect (sold to BayLogics in 2001), he ran operations, finance, and strategy.  Raj also served as Director of the Data & Research product lines for KnowledgeStorm (sold to TechTarget in 2007), a venture-backed online marketing startup based in Atlanta. Raj started his career as an analyst at Morgan Stanley, where he did strategy consulting and corporate M&A as part of the corporate Strategic Planning Group. Raj graduated Cum Laude in Economics from Harvard College.

SilverDock.com is a leading producer of online video for retailers and Internet marketers. These Shop.org TV interviews were conducted at the 2008 Shop.org Annual Summit at the Mandalay Bay Convention Center in Las Vegas on September 15, 2008.

Bernardine Wu is the founder and CEO of FitForCommerce, a business which resulted from her many years of operational and strategic success in helping online retailers find solutions and redesign and redeploy new or enhanced webstores.

Bernardine is also a co-founder and Board Advisor of SiteAcuity (www.siteacuity.com) which provides online marketing, sales and contact center technology to increase marketing intelligence and human touch to online businesses. She advises the company on business development and corporate strategy.

Before joining SiteAcuity, Bernardine served as the president and chief operating officer at Venda, Inc., a leading provider of outsourced eCommerce platforms, overseeing finance, marketing, business development, and operations for the company. As a co-founder of Venda, Inc., she had key responsibilities in the strategic planning and execution of Venda’s launch and growth in North America. Clients included: Lands’ End, Neiman Marcus, Crabtree & Evelyn, UnderArmour, Pokemon, MarketExpo and DoItYourself.com.

Prior to founding Venda, Bernardine was an independent consultant focusing on executive-level projects and business strategies tied to increasing revenues, restructuring costs and maximizing organizational efficiency at a variety of institutions including the New York Stock Exchange. Before that, Bernardine managed business development, marketing, PR, and the B2B eCommerce business unit at OptiMark, Inc., a provider of advanced matching engine and exchange technology. Bernardine also held senior technology and operations management positions at brokerage firms Salomon Brothers and Jefferies & Company.

Bernardine has extensive finance, technology and eCommerce experience rooted in Wall Street and a successful history working in the eCommerce technology industry as a consultant for Accenture. Bernardine received her BA in English and Asian Studies at Dartmouth College.

Shop.org TV interviews were conducted at the 2008 Shop.org Annual Summit at the Mandalay Bay Convention Center in Las Vegas on September 15, 2008.

As Shop.org’s Vice President of Content and Education, Joan Broughton oversees speakers, format, content, and networking for all Shop.org conferences, retailer-only workshops, tele-seminars, and regional events and meetings. She also manages all Shop.org research and publications as well as virtual community initiatives. Shop.org is a division of the National Retail Federation, the world’s largest retail trade group.

Before joining Shop.org, Broughton was Vice President, Multi-Channel Programs at REI where she managed website operations and REI Adventures. The business units she managed generated annual revenue of more than $100 million and included a team of 200 people. She was responsible for launching REI’s “order online, pickup at a store” option for customers and implemented a number of web services for REI customers.

Prior to REI, Broughton worked with Office Depot where she was Director of Web Publishing and has spent more than twelve years in the online and Internet industry including roles at O’Reilly & Associates and America Online. A native of Boston, she received her Bachelor’s degree in Classics from Brandeis University.

Shop.org TV interviews were conducted at the 2008 Shop.org Annual Summit at the Mandalay Bay Convention Center in Las Vegas on September 15, 2008.

When Google wanted to explain online marketing to the top brands in the world (including Wal-Mart, Costco, Sears and Sephora), they brought Mitch Joel to the Googleplex in Mountain View, California. Marketing Magazine dubbed him the, “Rock Star of Digital Marketing” and in 2006 he was named one of the most influential authorities on Blog Marketing in the world. Mitch Joel is President of Twist Image – an award-winning Digital Marketing agency. He is a marketing and communications visionary, interactive expert, community leader, Blogger and Podcaster. He is also a passionate entrepreneur and speaker who connects with people worldwide by sharing his marketing insights on digital marketing and personal branding.

Joel is a Board Member for the Canadian Marketing Association, an executive for the National Advertising Benevolent Society of Quebec and an instructor of the CMA eMarketing professional certificate course. He is also a former Board Member of the Interactive Advertising Bureau of Canada.

Joel speaks frequently to diverse groups like The Power Within, Starbucks, Google, Unilever, Shop.org, Visa, Microsoft and has shared the stage with former President of the United States, Bill Clinton, Anthony Robbins and Dr. Phil. He is also the founder/moderator of the Montreal Business Book Review and host of the HarperCollins Canada sponsored, Foreword Thinking: The Business And Motivational Book Review Podcast.

He co-launched Distort Entertainment, the only hard music label in Canada to have major label distribution (Universal Music) and whose roster features the platinum-plus, Juno Award and MuchMusic Video Award-winning acts, Alexisonfire and City And Colour.

Joel is frequently called upon to be a subject matter expert for CTV National News, Canada AM, CBC Newsworld, Marketing Magazine, Strategy, The Globe & Mail, The National Post and many other media outlets. He is presently writing his first book, Six Pixels of Separation (Fall 2009 – Grand Central Publishing – formerly Time Warner Books) and his newspaper business column, New Business – Six Pixels of Separation, runs bi-monthly in both The Montreal Gazette and The Vancouver Sun.

Shop.org TV interviews were recorded at the 2008 Shop.org Annual Summit at the Mandalay Bay Convention Center in Las Vegas on September 15, 2008.

Litle & Co was founded in 2001 by payment and direct marketing industry leaders. Litle & Co. is the only independent payment processing company focused exclusively on direct marketers.

Tom Litle brings 20 years of business development, corporate management and payment processing experience to Litle & Co. Tom is responsible for all aspects of the Company’s day-to-day operations.

Prior to Litle & Co., Tom was Founder and General Partner of Industry Ventures. While at Industry Ventures, Tom raised and invested three venture funds in over fifty companies and was responsible for sourcing, negotiating and managing venture portfolios purchased from corporate investors including Enron, EDS, and InfoSpace. Tom founded Industry Ventures in 1999 after founding and serving as President of OrderTrust, the first large scale transaction processing network focused on end-to-end order management in support of direct and multi-channel merchants. Tom has served on the boards of multiple early stage companies and is an active advisor to many entrepreneurs and venture investors. He earned his BA from UC Berkeley and his BFA from the Rhode Island School of Design in 1988.

Shop.org TV interviews were recorded on Sept 15, 2008 at the Shop.org Annual Summit. Shop.org TV was produced by SilverDock.com, producers of Internet video advertising and video merchandising for online marketers.

Larry Joseloff is currently the Vice President of Content for Shop.org where he is responsible for constructing the content and recruiting speakers for Shop.org events. Larry also helped launch the Shop.org blog which has quickly become a popular communication tool for the Shop.org community.

Prior to joining Shop.org, Larry served as Marketing Manager for The Discovery Channel where he directed the online affiliate program, along with managing the shopping comparison sites and portal relationships for the retail stores.

Previously, Larry served as a Program Manager at Be Free/ Commission Junction where he managed affiliate programs for clients such as Expedia, eBay, Gateway Computers and Verizon Wireless. Before joining Commission Junction, Larry was the Manager of Interactive Services for four years at The Electronic Newsstand (enews.com) – the Internet’s first magazine retailer.

Shop.org TV was recorded at the Shop.org Annual Summit on September 15, 2008 in Las Vegas.

Brett is the Founder and CEO of Bazaarvoice, where he is responsible for guiding the company’s strategy and overseeing day-to-day operations. Brett is a seasoned executive widely recognized throughout the online industry for turning groundbreaking ideas into leading businesses.

Brett serves on the Board of Directors of Shop.org, the leading non-profit industry association for retailers online and a division of the National Retail Federation, the largest trade organization for retailers. This is his second term on the Shop.org board, where he previously served for two years. He also serves as an Entrepreneur-in-Residence at the Wharton School and served as a Board of Advisors member to the non-profit Web Analytics Association. Brett actively advises several early-stage technology companies. He is an inventor (US Patent #7,050,989) and a regular speaker at various industry events and universities.

These Shop.org TV interviews were conducted at the 2008 Shop.org Annual Summit at the Mandalay Bay Convention Center in Las Vegas on September 15, 2008. Produced by SilverDock.com, specialists in online video for retailers and marketers.

Brian is responsible for the strategic direction, performance, and team management at Alibris. Brian has previously been Alibris’s COO and led its sales and marketing functions. Prior to Alibris, Brian worked with consumer products and retail companies for eight years with the Boston Consulting Group, focusing on e-commerce opportunities, growth strategies, and partnerships. Brian is a graduate of Northwestern University and Harvard Business School.

Shop.org TV interviews were produced by SilverDock.com at the 2008 Shop.org Annual Summit at the Mandalay Bay Convention Center in Las Vegas on September 15, 2008.

Brian Platter is General Manager of Home Delivery for Peet’s Coffee & Tea Inc, a specialty coffee roaster and marketer of fresh, deep-roasted whole bean coffee for home and office. He joined the company in 2005 and is responsible for managing Peet’s online, call center and catalog business as well as supporting multi-channel marketing initiatives. Prior to Peet’s, Platter served as the Vice President of Product Management at Coremetrics Inc, the leading web analytics provider for online retailers. As the sixth employee of Digital Impact, Platter served as Digital Impact’s Director of Client Services and Vice President of Product Management from 1998 to 2000. Prior to 1998, Platter led product development efforts at Hewlett-Packard Company and consulting engagements at Gemini Management Consulting. Platter earned a B.S. in Mechanical Engineering from the University of Colorado , and an MBA from Stanford University ’s Graduate School of Business. Platter serves on the San Francisco regional advisory board for Shop.org.

Shop.org TV was produced at the 2008 Shop.org Annual Summit at the Mandalay Bay Convention Center in Las Vegas on September 15, 2008. SilverDock.com is proud to produce Shop.org TV.

David “Selly” Selinger first garnered international recognition as an expert in the field of eCommerce data analytics and personalization with his groundbreaking work leading the research and development arm of Amazon’s Data Mining and Personalization team. In that role, David increased Amazon’s annual profit by over $50 million (25% of US profit, 2003) setting the industry standard for recommendation services.

David has decades of experience, from developing the first Javascript-powered ad delivery system for Flycast—the same technology used by Google AdSense, DoubleClick and Overture—to leading Overstock’s personalization efforts as Vice President of Software Development and Data Mining. David also cofounded Redfin, a venture backed, industry-leading real estate search/brokerage company.

David holds a broad collection of awards and standing patents in customer segmentation, analytics and data mining, including over a dozen pioneered at richrelevance. David’s accolades also include the coveted PC Magazine Editor’s Choice Award (won for 2Roam Wireless, acquired by Air2Web). David received his BS in Computer Science from Stanford University.

This interview was conducted on September 15, 2008 at the 2008 Shop.org Annual Summit. Shop.org TV was produced by SilverDock.com, specialists in online video for retailers and marketers.

As vice president of Hosted and Consumer solutions, Doug Mack provides leadership for Software as a Service (SaaS) and consumer offerings for Adobe’s Creative Solutions Business Unit. Key products in his group include the recently acquired Scene7 On-Demand platform, Photoshop Elements, Premier Elements and the new Express solutions.

Prior to joining Adobe, Mack co-founded and was CEO of Scene7, provider of the leading on-demand rich media platform, which was acquired by Adobe in May 2007. Previously, Mack served as executive vice president of the Broderbund Home Division of Mattel. Mack also spent years at both McKinsey & Company and General Electric.

These Shop.org TV interviews were conducted at the 2008 Shop.org Annual Summit at the Mandalay Bay Convention Center in Las Vegas on September 15, 2008. Produced by SilverDock.com, producers of Internet video advertising and video merchandising for online marketers.

Ellen Davis joined the National Retail Federation in 2002 and was named Vice President in 2008. She is responsible for helping shape NRF’s communications strategy, acting as a primary NRF spokesperson, and conducting analysis of NRF consumer research and industry trends.

In 2007, Davis was named one of the “15 to Watch” by PR News magazine, a top public relations publication. The award recognizes fifteen budding PR leaders and creative practitioners in the public relations field under the age of 30.

During her tenure at NRF, Davis has been responsible for evaluating NRF positions on a variety of retail topics including e-commerce, consumer spending, the economy, and loss prevention. By analyzing research from NRF division Shop.org, Davis identified a trend of consumers shopping online after Thanksgiving weekend and coined the phrase “Cyber Monday” for the Monday after Thanksgiving. Cyber Monday is now considered by the media, consumers and retailers as the official kickoff of the online holiday shopping season.

These Shop.org TV interviews were conducted at the 2008 Shop.org Annual Summit at the Mandalay Bay Convention Center in Las Vegas on September 15, 2008. Shop.org TV is produced by SilverDock.com.

With RightNow since 2000, Jason leads RightNow’s global marketing efforts and is responsible for directing product marketing and management, as well as field and industry marketing, marketing communications, and corporate communications.

Instrumental in shaping RightNow’s strategy, Jason played a pivotal role in transforming RightNow from a niche eService player into a publicly held company, now recognized as the industry’s leading provider of on demand, consumer-centric CRM solutions.

Prior to joining RightNow in 2000, Jason held several positions at Intel Corporation, including product marketing, strategic planning, and management of OEM distribution channels.

Before his work at Intel, Jason served as director of internet marketing and business development at an online retailer, where he was also responsible for customer service and technology selection.

A frequently requested speaker, Jason has presented on the importance of delivering exceptional customer experiences at many conferences and events throughout the world.  As a key spokesperson for RightNow, he’s also been featured in numerous publications.

These Shop.org TV interviews were conducted at the 2008 Shop.org Annual Summit at the Mandalay Bay Convention Center in Las Vegas on September 15, 2008. Shop.org TV is produced by SilverDock.com, specialists in online video for retailers and marketers.

John Ragals joined 360i in early 2006 with the mission to expand the agency beyond search organically as well as through product expansion and acquisitions both domestically and internationally. John is primarily responsible for overseeing the day-to-day operations and future direction of the agency’s five US offices. Before joining 360i, John was Senior Vice President and Group Account Director at Beyond Interactive with P&L and operational responsibility for Beyond’s relationships with Fortune 500 clients such as Cendant, Western Union, Nokia and 3M. Prior to Beyond, he held senior positions at webloyalty.com, a leading online direct marketer of membership clubs, and Modem Media, a pioneering interactive marketing strategy and services firm (now part of Digitas). John holds an MBA in Marketing and International Business from NYU and a BA in economics from Duke University. He is currently a Governor at Large for the Eastern Region of the American Association of Advertising Agencies.

Shop.org TV was produced by SilverDock.com at the 2008 Annual Summit of Shop.org, the leading trade association for eCommerce merchants.

Clickbooth, The Exclusive CPA Network, provides advanced technologies complete with strong, exclusive channels, firm control on distribution and adherence to quality in terms of both publishers and advertisers. Clickbooth gives advertisers access to thousands of exclusive publishers and an extensive zero-risk environment with maximized ROIs. Additionally, publishers are guaranteed maximum returns and quality performance as well as the guaranteed highest payouts. With a focus on quality since its beginning, Clickbooth has been providing the advanced CPA (Cost per Acquisition) technology that is now leading the new phase in media buying for more than five years.

SilverDock.com produced Shop.org TV at this year’s Annual Summit in Las Vegas. For more information, contact SilverDock.

Pinny Gniwisch started his adult life in Rabbinical College of Canada and graduated from Sydney University with a masters in Jewish law. Always appreciating a challenge, in 1995 he moved into his family jewelry business and spearheaded sales in the United States by securing business engagements with leading retailers such as Macys and Sears. In 1999 he went on to found ice.com where he has taken the reins of marketing and been responsible for developing strategic alliances with a variety of distinguished Internet companies. Since its inception, ice.com has risen in the ranks of successful online retailers, quickly reaching into the top 200 most profitable online retailers. Ice.com has grown over the past year by a solid 45%. And this year, 70% in the first quarter alone by focusing on creative ways to drive online traffic and sales. Names like Yahoo, AOL, MSN, MyPoints, Modern Bride — to name a few — have all entered into agreements with ice.com because of their belief in the product line and knowledge of the jewelry business, as well as Pinny’s track record of successful endeavors.

Pinny has consulted for such distinguished companies as Best Buy, Target and Victoria Secret on cutting edge internet marketing and merchandising. He has spoken for shop.org, etail, internet retailer and other major Internet industry events on vital online retailing topics ranging from search marketing, email marketing, personas, affiliate marketing, fraud, site design, blogs and customer retention.

SilverDock.com produced Shop.org TV at this year’s Annual Summit in Las Vegas. For more information, contact SilverDock.

McAfee is the leader in intrusion prevention and security risk management. McAfee proactively secures systems, and networks, worldwide.

Shannon was interviewed by Natalie Pietrzykowski at the 2008 Shop.org Annual Summit in Las Vegas.

Sally McKenzie is a retail and online industry veteran with over 20 years of leadership success spanning brick & mortar, catalog and e-commerce channels. Her extensive experience covers merchandising, marketing, product development, web site operations and strategic planning functions.

After beginning her career as a merchandise buyer for several brick & mortar retailers, Sally built and extensive 12 year career at Eddie Bauer, serving last as the company’s Vice President of E-commerce. In this role, she was responsible for the strategic direction, growth initiatives and all operational aspects of Eddie Bauer’s industry leading apparel website. During her tenure, she was twice honored with the company’s “Best of Bauer” award for innovation and profitable performance.

She then moved to the social networking space at Classmates.com, first serving as Vice President of Merchandising for New Business, then moving to Sr. Vice President, Marketing and Strategic Planning, where she was responsible for brand positioning, customer acquisition and retention, customer care and site design.

Following Classmates, Sally moved to Expedia where she first served as Sr. Vice President of Merchandising and Retail Operations, and laster as Sr. Vice President and General Manager of Expedia.com, with P&L accountability for the company’s $9 billion online business.

Sally holds a Bachelor of Arts degree from Washington College in Chestertown, Maryland and has served on advisory boards for Shop.org, Digitrends Magazine, The University of Washington E-Business Consortium and Internet Retailer Magazine.

In addition to her consulting work, Sally currently serves on the Board of Directors for Local Marketers, as Seattle based startup focused on local search marketing. She is an MBA Student Mentor at Seattle University, a volunteer at the Humane Society of Seattle/King County, and services on the Board of Directors for Jewish Family Service of Seattle.

Shop.org TV interviews were conducted at the 2008 Shop.org Annual Summit at the Mandalay Bay Convention Center in Las Vegas on September 15, 2008.

Scott Silverman was named Executive Director of Shop.org in 2001. Previously, he had served as Vice President, Internet Retailing, for the National Retail Federation. He directs a number of internal and multichannel retailing initiatives and works closely with Shop.org’s Board of Directors, a committee of online retail’s most prominent executives. Shop.org is a division of the National Retail Federation, the world’s largest retail trade group.

Once again, we were pleased to be a Silver Sponsor of the show and Producer of “Shop.org TV”, a series of interviews of industry experts at the show.  Special thanks to our wonderful interviewers, Bill Bass and Natalie Pietrzykowski.

1. Interactive Merchandising – non-technical business managers need to be able to easily add, change, and remove merchandising features your website.
2. Advanced Shopping Tools – e.g. ‘pageless checkout’ tools

Rich Media / Video
Improving your shoppers’ ability to more fully visualize and understand products through rich media is another critical focus area in the coming months and years. As with traditional catalogs, online shopping suffers from a fundamental disadvantage compared to physical stores: Our shoppers cannot actually touch, wear or use merchandise before purchasing. However, unlike print catalogs, we can do so much more than provide simple pictures.

Video has proved to be particularly effective by demonstrating how others experience products, enabling shoppers to imagine themselves in similar situations. Williams-Sonoma.com uses videos of expert chefs to demonstrate how cooking tools can be used to make some mouthwatering dishes. MartinAndOsa.com cleverly uses very short video segments, lasting just a second or two, to give its shop-by-outfit experience pleasing and eye-catching motion that gives a surprisingly deeper and more interesting perspective on its clothing compared to static images. Competitively speaking, the sites that incorporate engaging rich media will have a natural advantage over text-and-image only sites, which will look increasingly outdated as time goes on.

3. Advanced Search and Guided Navigation – new ways to let consumers find what they’re looking for
4. Social Commerce – facilitate conversations and interactions between your shoppers

In a new report called How Video Will Take Over the World, Forrester Research analyst James McQuivey encourages companies to embrace a world where video is everywhere.

[...]

In How Video Will Take Over the World, McQuivey lays out a vision for a world in which individuals will be able to watch video nearly everywhere on a variety of different devices, in which anyone will be able to produce video, in which remixes and mash-ups will be prevalent, and in which the video industry will become much larger and more influential than ever before. McQuivey calls this vision OmniVideo (OV).

[...]

According to the report, the technology needed to bring about the rise of OV—IP video delivery, mega storage, and cheap display screens—is already in existence, and core human needs will drive its implementation.

“I think a profound driver of everything we’re seeing is that video satisfies the brain in a way that other media just cannot,” McQuivey said. “And so, when you give people compelling video experiences and a relatively easy way to manage and control it, which the internet is, we see a huge response.”

McQuivey is particularly right to highlight the “core human needs” that drive video consumption.  Think about the news, for instance — most people get their news from TV rather than newspapers.  That’s not because TV offers better/richer/deeper information.  It’s because TV is more entertaining.

Similarly, while the text-based Internet is an amazing information resource, it’s also relatively less entertaining because it’s text-based.  That’s why many parts of the Internet are still mostly used by techie-oriented early adopters.  As video proliferates online, we’ll see increasing mass-consumer usage (and the presence of more mass-consumers will drive more energy into producing online video content).

There’s one more element of the “OmniVideo” vision to focus on — content creation.  That’s where SilverDock comes in.  We’re helping innovative companies like Amazon.com to create cost-effective and compelling video content.  We’re focused exclusively on making OmniVideo a profitable opportunity for eCommerce merchants, brands, and marketers.

The problem is that YouTube’s DNA is that of a video sharing site, and Google’s DNA is in search.  Major acquisitions can be real trouble when a strategy shift is required and there’s no clear leadership to drive change.  Perhaps Tim Armstrong (a solid leader) can rally the troops around a new, advertising-centric model.  In that case, YouTube can take advantage of its pole position in this race.  Or, YouTube can continue to be Flickr for video (as Chad Hurley put it just two weeks ago)… while real innovators race past them to claim the lead in online video advertising.  Either way, the race is ON!

Excerpts from the WSJ article:

Wringing ad revenue from YouTube is proving to be a challenge for Google Inc.

Although users of the popular video-sharing site view clips more than one billion times on most days, the site hasn’t been as popular with big corporate advertisers. World-wide revenue from YouTube ads has fallen short of Google’s expectations this year, and is likely to total about $200 million for the full year, according to two people familiar with the matter.

YouTube is critical to Google’s campaign to extend its advertising reach far beyond text ads tied to Web searches, its revenue powerhouse. Google wants to sell more video ads and display ads on YouTube and elsewhere. It also wants to crack the television, radio and newspaper ad markets. Its target: the 90% of global ad dollars that don’t currently flow to the Internet.

[...]

Tim Armstrong, Google’s head of advertising and commerce in North America, is helping to lead the diversification push. When he dug into complaints from salespeople about Google’s system for selling YouTube ads, he uncovered another part of the problem: a sales system hamstrung by inefficiencies.

[...]

Twenty months after Google bought YouTube for more than $1.7 billion, Mr. Armstrong and his colleagues have begun to untangle the problems with its advertising operations — which generated 98% of Google’s revenue in the first quarter. The initiative is code-named “Project Spaghetti.”

The effort could affect how successful Google is at expanding beyond advertising tied to online searches. If Google is to maintain its torrid growth rate in the years ahead, it needs to tap other forms of ad revenue.

[...]

Google plans to begin accepting “preroll” and “postroll” ads, which will run before and after some YouTube video clips, according to one person familiar with the matter. The plan under consideration, this person says, would give companies that post video clips the option to sell such ads, and share the revenue with Google. YouTube has long forsworn such ads because consumers don’t like them. But advertisers consider them highly effective.

. 1. Web video has become a key tool in e-commerce. About 59% of Internet users view at least one video per week and viewing by women is expected to grow by 55% in the next five years, says Geoff Smith, vice president of ShopNBC.com and Adam Lindquist, director of business development at 2nd Wind Exercise Equipment. When deciding to pursue video, retailers should weigh if the product’s price point offers a good return on investment, they say.

Here’s one interesting opinion, from StreamingMedia.com’s Watchman column:

    The thing I most love that [ABC.com is] doing is their click-to-continue countdown clock. First off, the countdown starts as soon as the ad break does, not when the ad starts playing. Too many other sites tie the countdown to ad playback. The problem with this is what happens if the ad is slow to start? I, the user, then get penalized for your site not working. Whereas with the clock starting and counting down separate from the ad loading I never felt this sense of being penalized.

The real genius of this is the fact you have to click to continue after an ad. Because I’m in a lean-forward mindset I don’t mind having to click a button to continue, especially since in instances where the ad is slow loading it means I can click my way out of an ad before it finishes.

What’s really clever about it, though, is that it opens the opportunity for me to spend an open-ended amount of time with an ad. I have to admit, when I see one of those interactive in-stream ads I sometimes take the time to go through the whole thing, which often takes longer than the 30-second ad break. But I don’t mind as I’ve made the decision that I want to spend more time because I’m engaged with learning more about the ad.

Talk about a win, win, win! I win as the viewer, because I must be enjoying the ad if I’m watching it longer than need be, plus I feel like I’m in control and not being force fed. The advertiser wins because I’m spending more time engaged in the branded world of their ad, likely increasing the chances I’ll remember what the ad was about later on when making purchasing decisions. And in the end the content owner wins, as both the viewer and advertiser are happy with the experience they enabled.

So long story short, as the Watchman I’m all for in-stream ads. I’d much rather watch a few ads online than a ton of ads on TV, and ad countdowns are a very compelling way to hold my attention.

Here is Kevin Nalts’ eight-step summary of how to do viral video (slightly condensed):

Step 1: Determine if your brand is right for online video.

Is your brand compelling and simple, or complex and direct-response oriented? If you’re a consumer-product goods (CPG), it’s a no-brainer.

Step 2: Keep it quiet!

The more senior management and attorneys you bring into a pilot, the more internal battling you’ll do before experimenting. Get some “air cover” from an executive sponsor, and avoid excessive internal scrutiny.

Step 3: Let go.

Your marketing message is critical to you, but if your content is driven by an advertising objective it’s at risk of being a flop. If you want to go viral, you’ve got to entertain first and promote subtly.

Step 4: Develop a creative brief.

Don’t make it too narrow, but give it some focus. If you ask people to make a funny video that includes your brand, you’ll get a lot of stuff that may or may not support your objective. But if you require creators to insert a series of “unique selling propositions” then you’ll end up with ads instead of entertaining videos.

Step 5: Engage creators. You have four options here.

• Option one, you can hire your agency to create video content. This gives you control, but most agencies (advertising, online, and public relations) lack experience in social media and online video in particular. I’ve found this to be extremely expensive, and often the agencies lack the expertise to make the videos “not suck” and get the videos widely viewed and “seeded” in the right places.
• Option two, you can hire individual amateurs. This gives you access to people that know the medium and have established audiences. This keeps things safer, but requires some oversight since you’ll need to interact individually with these companies or people.
• Option three, you can run a big, public contest. These are still quite common, but rather expensive. You’ll spend a lot on media to promote the contest (money I’d prefer to see brands use to promote the brand itself). You’ll also get a lot of lame content, but hopefully a few winners.
• Finally, you can contract with a third party that can represent a variety of proven creators. For example, a few large brands have contracted with Xlntads to help reach a collection of experienced amateur creators (note: I consult with Xlntads, and run its creative ad board).

Step 6: Get the videos seen.

If you want to buy media, you can run your videos as advertisements on a variety of sites. The second and third tier video sites are especially receptive to giving prominence to promotional content in fairly inexpensive media buys. If your content is good enough, you can hope it will travel “viral” style: people will share it with friends, post it on their blogs, feature it on their websites. There are three magic tricks that make this work:

• First, your content has to be good.

• Second, it really helps to leverage the distribution and audience of known creators. If an amateur has a popular blog or YouTube channel, this gives you a much better chance of wide distribution.

• Thirdly, you can “seed” it yourself or have the creators, third parties or agencies do it. This “seeding” involves reaching out to appropriate online properties, channels, discussions, forums and blogs. If it’s good content and you reach out to people politely your chances increase. I’ve seen bad videos that get lots of attention, and good videos that die. So this third step is non trivial and often overlooked.

Step 7: Evaluate.

Did the videos get lots of views and positive feedback? What did the comments say? Did people take a measurable action after watching the video? Keep your expectations in check: few marketing videos break into the millions of views, and very few of those viewers will take an immediate action (visiting your site, and making a purchase). These videos will, however, help your rankings via Google and other search engines. So maybe the next time a prospect is searching for your brand on Google, they’ll find your brand-friendly videos instead of a competitor’s content or disgruntled customer. This is a powerful and often overlooked outcome of a good video pilot.

Step 8: Scale as Appropriate.

I found this article interesting because, about a year ago when it was written, Tedeschi noted that “Whether [video] will help build customer traffic and sales over the long term remains an open question.” Today, it’s clear that video CAN build traffic and increase sales. We’ve seen excellent results for clients ranging from Amazon.com to FrontlineShop to Kate Aspen (Brad Fallon’s testbed for StomperNet research in Internet marketing). The trick is that video is a LOT more complicated than AdWords search marketing! Results are harder to measure and all over the map. Today’s challenge is to optimize online video campaigns (whether video merchandising or video advertising) to maximize your traffic CTRs and conversion rates.

Highlights from Bob Tedeschi’s NYT article, “Online Sellers Discover the Power of Video Clips”:

Online retailers have begun capitalizing on the YouTube craze, offering a video platform for product demonstrations, rants and raves, sentimental messages and just plain bizarre behavior.

…

For at least one company, user-generated videos have led to a measurable boom in business. Blendtec, a manufacturer and seller of blenders based in Orem, Utah, started late last year posting videos of the company’s chief executive, Tom Dixon, blending random objects, including wood, marbles and Mr. Dixon’s iPod.

The company posted the videos on its own site, WillItBlend.com, as well as on YouTube, and promoted them on various message boards and blogs. The marble video, which can be seen at youtube.com/watch?v=3OmpnfL5PCw quickly rose to prominence on YouTube’s entertainment section, and since then, according to Blendtec’s marketing director, George Wright, the company’s 30 videos have been viewed more than 11 million times.

“We’ve seen wonderful improvements in sales,” Mr. Wright said. “Online, we’ve absolutely eclipsed our records, and it just continues to grow and grow.”

…

Mr. Corey said this year’s new golf clubs include even bigger drivers than before, some with square heads. “It’s going to take people some time to understand the features of these,” he said. “What better way to do that than with videos?”

Videos also help increase Internet traffic. The more Golfsmith offers videos and reviews of its products, Mr. Corey said, the better the chances Google and other search engines will point users to Golfsmith when they type a product name into a search box.

 The problem is a tactic known as “piggybacking,” in which smaller advertisers use major players’ brand names, slogans or other trademarked words in the text of search ads to lure Web surfers to their own sites.

As a result, Google could face a backlash as it attempts to grab a bigger share of other advertising niches, including display advertising and video ads. Big advertisers say they may punish Google if they aren’t satisfied with the way the piggybacking dispute is dealt with. “This does play into our decision of overall spending — it has to,” says Michael Menis, vice president of global marketing services at InterContinental.

Adds John Gustafson, director of distribution and Internet strategy at Northwest Airlines: “If Google has an inability to help us resolve issues about abuses of our brand, that would impact our decision to participate in future forms of advertising.”

A report from JupiterResearch indicates that retailers may want to take extra care with their online holiday marketing. The report found that even though overall holiday sales were sluggish in 2007, online sales remained strong. For November and December, online holiday sales reached $39 billion, up 20 percent from the year-earlier period.

The report also found that just 15 percent of online holiday buyers said they had cut back on online spending because of the economy, even as headlines were prophesying doom all around them.

It’s not just to acquire things they want or need. People shop because it makes them feel good.

Cheryl Lu-Lien Tan has an intriguing article in the Wall Street Journal called The Neuroscience of Retailing: Research Shows Shopping Can Make People Euphoric:

Research shows that people often do get a high from shopping — the brain releases chemicals such as dopamine or serotonin when a person is stimulated by discovering something new, such as a handbag. Sometimes, aspects of the shopping experience such as friendly sales clerks, eye-catching displays or aisles that are easy to navigate can trigger brain activity that brings about these “euphoric moments,” says Dr. David Lewis, director of neuroscience at Mindlab International, a United Kingdom-based consultancy whose clients include athletes, retailers and advertising companies. “The brain is turned on by novelty.”

We started SilverDock on the premise that online retailers haven’t mastered the art of selling yet. In the real world, the art of retail ranges from Wal-Mart (“stack it high, sell it cheap”) to Neiman Marcus (“luxury experiences”). Retail at the low end is “stocking” more than “selling” — you put what you have on the shelves, consumers look at it, and they buy what they want. Retail at the high end is about emotional connection and fulfillment. The high-end retailer is the consumer’s consigliere, providing trusted advice about what goods will satisfy the shopper’s emotional needs. At its best, retail is about providing consumers with novelty, entertainment, and vehicles for self-expression.

Online retailers are stuck in the Wal-Mart mindset — we “stock” products more than we “sell” products. However the Internet provides an incredibly powerful, intimate medium to connect 1-on-1 with shoppers. Shouldn’t we use that power to sell better?

At SilverDock, we think video can help. Innovative retailers are starting to explore the power of video to merchandise, market, and connect with their shoppers. The next five years will be an exciting time as we collectively figure out how to realize the potential of online selling.

Unfortunately America still lags in penetration of fast, broadband Internet. Christopher Rhoads reports in today’s Wall Street Journal that local governments around America are racing to deploy municipal fiber-optic Internet networks, mostly to compensate for the failure of the big guys to serve fast Internet to small towns.

Among the 30 leading industrialized countries, the US ranks 11th in broadband-access affordability and 10th in broadband penetration. The WSJ shows just how far we lag in Average Monthly Subscription Prices for Broadband, as well as the Percentage of Households with Broadband Subscriptions.

(Source: Wall Street Journal; OECD; Information Technology and Innovation Foundation)

Just as important, broadband speeds in the United States are falling way, way behind other countries’. Check out the average broadband download speed for the US as compared to Japan, South Korea, Finland, and even France (in megabits per second, mbps):

(Source: Wall Street Journal; OECD; Information Technology and Innovation Foundation)

SilverDock interviewed Sheldon Gilbert about Proclivity at last year’s Shop.org Annual Summit. Sheldon shared his thoughts on Proclivity’s behavioral targeting technology. Check out the whole interview here:

Some excerpts from the New York Times article on Proclivity, written by Eric A. Taub:

Among online retailers, pushing customers toward other products they might want is a common practice. Both Amazon and Netflix, two of the best-known practitioners of targeted upselling, have long recommended products or movie titles to their clientele. They do so using a technique called collaborative filtering, basing suggestions on customers’ previous purchases and on how they rate products compared to other consumers.

The search for a better recommendation continues with numerous companies selling algorithms that promise a retailer more of an edge. For instance, Barneys New York, the upscale clothing store chain, says it got at least a 10 percent increase in online revenue by using data mining software that finds links between certain online behavior and a greater propensity to buy.

Using a system developed by Proclivity Systems, Barneys used data about where and when a customer visited its site and other demographic information to determine on whom it should focus its e-mail messages.

Barneys experienced at least a 10 percent increase in online revenue, as compared to control groups, said Larry Promisel, Barneys’ vice president of e-commerce. It found 20 percent more customers would purchase once sent the targeted e-mail messages. The company has saved money by not sending e-mail letters to customers unlikely to buy.

Not only are sales increasing, Mr. Promisel said, but with the store focusing on customers with items they are likely to buy, its clientele feels that it understands their interests, which increases good will.

Note that only 5 of the top 10 brand videos were actually produced by the brand (and one of them, by a rogue division of Ikea, wasn’t intentionally distributed).

10. Toyota – “Top Gear: Killing a Toyota Part 1″ – 1,132,279 views – Jeremy Clarkson tries to destroy a Toyota pick up truck without success.

9. Ikea – “Banned Commercial – Swedish Midsummer” – 1,483,858 views – Ikea banned this ad making fun of Swede made by the German division of the company

8. Microsoft – “Microsoft Surface Parody” – 2,068,861 views – A caustic video parody of Microsoft’s Surface table PC

7. Budweiser – “Banned Super Bowl 2007 Bud commercial” – 2,149,516 views – What happens when you’ve spent millions on a racy Superbowl ad and then the censor bans it? Stick it on YouTube.

6. Disney – “Internet is for Porn” – 3,278,230 views – This not-so-family friendly mashup of Disney clips is hilarious and completely off brand message.

5. Unilever – “Dove Evolution” – 6,727,556 views – An inspired conversational campaign with unintended consequences – allowing consumer and environmental activists to create their own rebuttals.

4. Coca-Cola – “Diet Coke+Mentos=Human experiment: EXTREME GRAPHIC CONTENT” – 8,583,526 views – The Diet Coke and Mentos meme has spawned hundreds of copycat You Tube videos and prompted Coca-Cola to join the conversation.

3. McDonalds – “Fast Food Freestyle” – 11,744,399 views – Funny and flattering McD’s rap homage helps bury far more negative You Tube content.

2. Pepsi – Britney Spears, Beyonce, Pink – We Will Rock You – 14,050,586 views – Britney, Beyonce and Pink in skimpy gladiator costumes proves you can’t beat celebrity content.

1. Nike – “Ronaldinho: Touch of Gold” – 22,581,372 views – The master at work seen through this “homemade” viral produced by….Nike.

Visit Social Media Influence to view the videos and while you’re watching, ask yourself this question – Do you know how your company looks on YouTube?

Gordon Magee, head of Internet marketing for Drs. Foster & Smith, based in a Rhinelander, Wis., said a transition to video “will be seamless for us.” The company, Mr. Magee said, has in recent weeks discussed putting some of its product on video “so customers could see a 360-degree view they don’t have to manipulate themselves.”

Because Drs. Foster & Smith lacks a history in video production, Mr. Magee said the company would rely on vendors “who’ll do the video for you and just send you a piece of code to get it on your site. It’ll be an easy switch for most people. And I do think it’ll become a major thing in e-commerce.”

And Tedeschi also interviews QVC about their use of product video merchandising:

Bob Myers, senior vice president of QVC.com, said the Web site’s video salesmanship is especially effective when combined with detailed product information, customer reviews and multiple photographs.

Mr. Myers said video is a critically important element to sales. “E-commerce started with television commerce,” he said. “The sites who engage and entertain customers will be winning here in the near future.”

Cringely’s job is to entertain and incite his readers and he’s certainly doing a great job of it. But I don’t think it’s likely that Apple will buy Adobe. Cringely’s proposed rationale is awfully thin.

Adobe won’t bring too much to Apple’s party. First, buying control of Flash will certainly not do a whit for Apple’s hardware market share — in fact, the Flash/AIR platform is explicitly about cross-platform compatibility, which is not in Apple’s interest.

Secondly, Apple wants to develop control over the distribution of high-end professional audio & video content (the stuff that people will pay for). Apple is already leveraging the iPhone and iTunes platforms to that end. There’s no reason why Apple would trade its own media creation suite for Adobe’s. And Flash is primarily a tool for small web apps and free video distribution; it doesn’t hold a candle to Apple’s own video distribution formats and channels (for the purpose Apple is investing in them).

The first part of the rumor is more believable. There’s a strong strategic rationale for a sale of the professional applications business. While Apple is uniquely committed to a proprietary, closed hardware-OS platform, they don’t need to be building apps for the platform too. Apple invested in great pro media applications like Final Cut Pro and iMovie in order to fuel adoption of the Mac platform. If a third party wants to invest in these applications, Apple will benefit from availability of the apps without having to spend resources on them. And to Apple’s benefit, other third-party developers will feel freer to compete in the pro media app space.

There’s another reason to believe that Apple might spin off an applications business — Apple has spun off an application business before. Remember Claris?

M+O’s Shop by Outfit is a great window into the future of video merchandising and video navigation — especially for fashion and apparel. As a friend of mine noted, it’s very “Harry Potterish”. The designers of the M+O video shopping tool have clearly decided to go “all out” for a showstopper site centerpiece. As the Martin + Osa press release puts it,

– Shop by Outfit: Full-motion video of models wearing outfits created by M+O stylists, enabling customers to see the product on real people who are walking, turning and standing, showing a life-like view of the product’s attributes. Customers can click directly on the image to select individual items or the entire outfit to buy.

However it’s important to note that the M+O video tool is optimized for PR and branding, not for conversions. How can you tell? Download size.

The initial page load is 18 megabytes… and the whole page takes 29 megabytes to browse. Click on “Men” and you’re in for 57 megabytes. Most upscale office computers, and many high-end homes, will handle this content pretty well. However…

• What happens to visitors on slow broadband? AT&T’s entry-level DSL broadband service in the US generally provides 768Kbps of downstream bandwidth. Without anything else happening in the background, it would take 189.7 seconds to download the INITIAL PAGE LOAD for the Shop by Outfit tool. That’s well over 3 minutes of waiting.
• What happens to visitors on dial-up? Well, if they want to take a break from their computer for 45 minutes, they’re in luck!
• What happens if you’ve got a fast connection, but a slow computer? We tested with a high-end 3-year-old Thinkpad, a cable modem connection, and a modern up-to-date Firefox browser. The M+O site caused occasional, intermittent browser freezes while the computer’s CPU caught up to the torrent of video data.

All told, the M+O Shop by Outfit tool gives a great user experience to probably 1/2 of the available Internet audience. It’s a great showstopper to establish the brand, land PR, and draw traffic. However it’s not going to be as effective at increasing conversion rates.

SilverDock and our clients have experimented with a variety of video formats and technologies. In general we prefer “low-impact video” that adds to the high-end experience, but degrades gracefully for lower-end users.

We do this for solid bottom-line reasons — you sell more. In fact in some tests, we were able to show that altering the video implementation method (speeding the page load by a few seconds) raised conversion rates by 45%.

If you’re looking to explore innovative video merchandising, video shopping, and video navigation tools, contact SilverDock. Our team has been building exceptional video shopping tools for leading retailers since 2006. We’ll help you evaluate your video strategy and develop a plan to reach your bottom-line goals.

Ed Burnette at ZDNet points out that pretty much every mobile handset player (Nokia, Motorola, Siemens, Samsung, Intel, ARM) has lined up behind Adobe. Who’s left out? Apple and Google. Hmm…

Amol Sharma in the Wall Street Journal writes that the battle is over (1) the mobile web, and (2) online video:

Making video from Web sites work on cellphones is widely seen as a crucial component of the new shift. Adobe’s wider distribution of Flash is one significant step. As part of the deal, Adobe is dropping its traditional licensing fees and making changes to its technology that simplify its integration into mobile phones. Adobe says it is pursuing other efforts to enable Flash on the iPhone.

“Flash video is the most popular form of video on the Internet today. It’s really important to be able to bring that to mobile,” said Gary Kovacs, vice president of product management and marketing for Adobe’s mobile devices unit.

We’re looking at yet another standards war — just like VHS versus Beta, or HD-DVD versus BluRay. As long as Adobe, Google, Apple, and Microsoft are duking it out, the rest of us will lose. Publishers, websites, and e-commerce vendors will suffer from a fragmented mobile web until one camp achieves enough scale that consumers can get universal access to the web from any device.

In geek-speak summary, here’s what Adobe’s doing:

1. Allowing outside developers to access the guts of the SWF and FLV/F4V viedo specs. This will allow 3rd parties to build customized Flash components and new apps that will interface with Flash.
2. Publishing the APIs that will allow outside developers to port Flash to new platforms
3. Publishing Adobe’s protocols (FlashCast and AMF) for pushing data & applications to mobile devices (and other devices)
4. Removing licensing fees for mobile device Flash players

This marks another phase in the iPhone / Flash battle for web standards dominance. Adobe’s leveraging it’s market position to entrench as widely as possible, while Apple strong-arms them off the iPhone platform in order to strengthen open-standards AJAX web apps (and their own XCode iPhone apps).

And where’s SilverLight in all this? Nowhere to be found… it looks like Microsoft is getting its butt kicked by TWO dominant platforms. Your new technology platform doesn’t stand a chance when your competition has a lock on the existing users, developers, and applications. Oh, the irony….

Lauren Freedman of the e-tailing group shares this advice:

the product page… now functions the way home pages used to because many shoppers enter a site by landing directly on these due to more sophisticated search. Each product page should incorporate the best in text, imagery, tools and customer service information. Fifty-two percent of shoppers spend six minutes or more on a product page.

While using video doesn’t make sense for every Web shop owner, for those it does, it can boost conversion rates and average order size. For instance, Sephora has make-up application “how-to” clips at its site that do well.

Scott Todaro of DemandWare shares these “Five Merchandising Tips”:

1. Provide easy access to products through search engine optimization and guided navigation
2. Categorize and segment content for accuracy
3. Create content to set your site apart from others
4. Use visuals such as video and virtual modeling
5. Allow customers to generate content for the site

A few observations from the article:

• 65% of broadband users occasionally watch video online (as of 2007). In 2006 the number was 44%
• while “YouTube hypercharged this industry… advertisers tend not to want to touch [user-generated content] with a 10-foot pole. If you’re dipping your toe in the water, you’re not going to want your first dip to be something risky” (Mike Shehan, CEO of SpotXchange)
• In 2007, the Internet video advertising market is 1% of the TV advertising market. eMarketer projects that it could be 10% by 2011.
• High-quality video inventory from reliable publishers is scarce
• Repurposing TV commercials for use on the web “has generally not proven effective, and advertisers and publishers alike have moved strongly away from 30-second spots for much online video”
• “The need to re-edit or shoot new creative may have created barriers” to online video advertising
• 30-second and 60-second commercials don’t play well on the web. “Switching costs online are so low it’s easy for someone online to get annoyed at an overbearing ad or too may ads or too many repeats of the same ad and go away”
  

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 Conventional wisdom holds that customizing a Web site for individual visitors is a good way to boost business. Turns out all you’re doing is creeping people out. Nearly 60% of people surveyed in a Harris Interactive poll said it made them uneasy when a site tailored content or advertising based on the person’s online activity, Reuters reports. The survey also found that privacy policies did little to diminish peoples’ concerns and that young people were less concerned about privacy.

The Wall Street Journal points out (Exclusive Lines May Prove Risky in Cool Economy) that several major department stores have put a LOT of eggs into the private-label basket — 35% to 50% of their eggs, in fact.

In good times, private-label brands allow retailers to capture more margin and differentiate the shopping experience. The stellar growth of branded retailers like Gap and the Limited brands also encouraged department stores to counter with their own, high-margin exclusive product.

There’s a downside though: risk. Department stores used to be less subject to volatile shifts in customer behavior because they could more easily adjust merchandising to reflect changes in the marketplace. The risk was shared with suppliers and mitigated by a wide range of brands. When you’ve invested half of your sales in in-house brands, inventory, and marketing, though, you’re WAY more exposed to downturns. The WSJ notes:

If the retailers are forced to sharply mark down their exclusive goods, that could hurt the image of both the brand and the store. What’s more, retailers can’t share the pain with suppliers, as they do with national brands that offer allowances for markdowns, meaning retailer profits will suffer. And, retailers often commit to large minimum orders to get the best prices on their in-house products — and can wind up with far more inventory than they need.

“This vehicle for improved profitability is a double edged sword when sales are weak,” says Bill Dreher, an analyst with Deutsche Bank Securities.

If department store private label lines get whacked by a downturn, that’s good news for brands. Branded manufacturers can expect a bit more breathing room as retailers retrench and limit or reduce their investment in exclusive labels.

I think not. Network television revenue has continued to grow in a 500-channel world. Why? Because overall viewership has increased, overall revenue has increased, and the big networks have been able to sell reach at higher CPMs even while niche networks sell targeting. In fact while CBS’s broadcast revenue may hover around $4.5 billion, the CBS corporation’s revenues are over $13 billion. So while the big networks hold their ground, the market as a whole has expanded as distribution expands.

Online distribution is (very roughly) analogous to the explosion of niche cable channels. In the short-term, Mr. Smith is right — CBS won’t generate $4.5 billion by shifting the same content to the Internet. If CBS plays its cards right, though, they can build a lucrative, parallel online distribution channel for new and different content. Armed with new and different ad targeting technology, they may well generate billions of new revenue in the coming years.

The New York Times reports this month on Serving Up Television Without the TV Set:

When the fourth season of “The Office,” an NBC comedy, had its premiere in September, one in five viewings was on a computer screen instead of a television. The episode attracted a broadcast audience of 9.7 million people, according to Nielsen Media Research. It was also streamed from the Web 2.7 million times in one week, the executive producer, Greg Daniels, said.

“The Office” is on the leading edge of a sharp shift in entertainment viewing that was thought to be years away: watching television episodes on a computer screen is now a common activity for millions of consumers.

At least in the short- and medium-term, new technologies tend to supplement older technologies, rather than replace the old. Don’t worry, traditional TV isn’t going to disappear.  However we’re going to see the Internet increasingly emerge as a viable alternate distribution channel for video entertainment.

Last year, by one estimate, the video site YouTube, owned by Google, consumed as much bandwidth as the entire Internet did in 2000.

The good news: service providers are racing to meet the demand. For our part at SilverDock, we provision redundant servers in highly-connected data centers on multiple continents, to ensure that your video content has the best possible deliverability.

For a manufacturer, e-commerce is a way for you to experiment with the world of retail… With an e-commerce site, you’ll have:

• Direct access to customers
• More prospects
• Opportunities to innovate

These steps will help promote your site:

• Include Web address in ads
• Coordinate e-mail and direct mail
• Target ads

The result is one of the most intricate and expensive campaigns ever on YouTube; Toyota is paying about $4 million for it, according to a person familiar with the campaign. Its main feature is a new destination on the site, dubbed “Best in Jest,” that has been designed for Toyota. Special algorithms created by YouTube find up-and-coming comedy videos on the site each week and feature them in that space. Toyota also is sponsoring a sketch-comedy contest on the site called “Sketchies,” where users can post funny videos with the chance to win as much as $25,000.

YouTube is also offering lightly-customized contests to marketers:

YouTube lets advertisers submit the different creative components, such as the idea, the prizes and the graphics and control certain functions such as the start and end dates. YouTube enters these into a contest-maker program, and out pops a custom-made contest.

Both the custom-microsite and custom-contest offerings revolve around attaching user-generated content (UGC) to your brand.

But what if you don’t have $200,000 to $4 million to to create & run a custom UGC campaign? You can always create your own content and use the YouTube platform to help distribute it. Good news — for that, YouTube won’t charge you anything. The WSJ article reports:

… some advertisers are creating campaigns on the sites without actually paying the sites to create the content. Tax-preparation giant H&R Block is running a social-media campaign on YouTube, Facebook and MySpace, but the campaign was created by 360i, a small digital-marketing firm, and marketing firm MRM Interactive. The campaign involves games for the sites and even a profile and videos about a tax-obsessed character named Truman Greene. H&R Block simply posted the content to YouTube and Facebook just as anyone else would. One saving grace for the sites: H&R Block is buying standard banner ads on the sites to promote the new content.

When will people learn? If you’re promoting something on your Web site – particularly something that stresses your tech equipment like an online video – make sure that you’re prepared to handle the traffic spike you’re hoping to get.

TechCrunch reports:

As far as functionality is concerned, the most important addition to SiteCatalyst is support for the tracking of video usage across the web. If you are a marketer who uses videos to spread your message, you can now use Omniture to track metrics like how long people are watching your videos, whether they tend to skip forward in them, the rate at which they drop off, and which particular features in the video players they use.

At SilverDock we work with a variety of analytics tools including Omniture. With annual costs often starting around $40,000, Omniture is more commonly used by large retail enterprises. On the low end, Google Analytics is inexorably taking over the low end of the analytics market.

Never fear — SilverDock video content and technology is compatible with Google Analytics, Omniture, and more. We’re delighted to help our clients measure and optimize their video tactics and strategy, so we work closely with your chosen analytics tool(s) to help you get the best possible results from video.

Their conclusion: the online ad market grew to $21.1 billion in 2007. That’s a 25% growth rate over 2006.

The press will soon begin their eager speculation about whether 25% growth is a high number or a low number. We’d like to put these numbers in perspective. Since 1996, the online advertising market has grown from $0.3 billion to $21.1 billion. The market today is 78 times bigger than just 11 years ago.

Here’s the historical data:

Ird writes: Steve Jobs has no intentions of supporting Flash; especially on the iphone. Apple’s pushing the H.264 open standard and will stick to its guns because Apple want to use it this standard for AppleTV, iTouch & iPhone.

Ird, you’re right that Apple is pushing H.264 really hard. But I don’t think that’s why Apple is dissing Flash.

I think Apple sees its future in the content delivery system for mass market entertainment, so their chosen video format is a key part of that. But they don’t need to kill Flash to promote H.264. After all, they managed to get YouTube to re-encode all their video in H.264 for the iPhone (instead of their default Flash video).

And get this –Adobe recently added H.264 support to Flash. So if Apple cares mostly about H.264 video, then Flash shouldn’t be a big problem. If they want to, Apple could even support H.264 Flash video and break or disallow the older Flash video formats like Sorenson and On2 VP6.

Video is only part of the equation, though. Flash is an important web UI component for rich Web 2.0 applications (as well as everyday websites). One of the biggest appeals of the iPhone is that you can actually use the ‘real’ web, not a crippled mobile version of the web. So Apple’s going to continue to get pressure to support Flash, because iPhone users want their iPhone web browser to do everything that their Mac or PC web browser can do.

Robert R. Fox writes: “Apple wants a de-facto monopoly” … excuse me? On open standards that ANYONE can implement? AJAX. H.264. As opposed to say Flash? Which you imply is NOT a monopoly when it is wholly owned by ONE company? And if you can’t run Flash on the iPhone you can run it on WHICH other phone web browser? Am I missing something here?

Robert, I agree that Flash is a closed platform (and therefore an avenue to monopoly power). And I agree that AJAX and H.264 are open standards. But the iPhone hardware & OS is also a closed platform, right?

So here’s Apple’s game: their closed platform (the iPhone hardware & OS) needs applications. Apple wants lots of developers to write or customize apps for the iPhone, so they want the programming environment to be free. Apple wants to dictate the user experience on all iPhone applications, so they want control of the SDK (their own custom flavor of AJAX). And Apple wants the iPhone to remain 10x better than other mobile phones, so they want the application layer to be tightly tied to their OS (through the SDK).

Apple can’t ensure any of this if a competitor jumps in with a for-profit, proprietary, portable application layer — like, say, Flash. If Flash controls the application layer, then Apple loses some control over the iPhone user experience. If Adobe charges for the Flash IDE, then there will be fewer application developers. If Flash apps are portable, meaning you can use them on Windows Mobile or Symbian or whatever, then the iPhone loses differentiation and market share.

Robert, you asked: “And if you can’t run Flash on the iPhone you can run it on WHICH other phone web browser?” According to Adobe, you can run Flash Lite on “over 300 million mobile devices” including Windows Mobile and Symbian. Opera recently announced support for the full Flash player in their mobile browser. And you can bet that the new Google Android platform will support some version of Flash (as Dave Burke from Google alluded to recently).

So here’s the rub… if another mobile web platform uses Flash support to create a better web browsing experience, that will weaken iPhone’s current unquestioned status as “the best mobile web platform, period.” But incorporating Flash will weaken Apple’s control of the iPhone platform. That’s why Flash support is a dilemma for Apple.

For Apple to ensure their position as the unquestioned leader in mobile hardware & OS, they need to neuter Flash and/or establish strong competitors. We’ve seen this before — it’s the same competitive jousting that Microsoft went through to neuter Netscape and Java, in order to preserve their control over the desktop application stack. Personally, I think Apple will take a middle road: offer limited Flash support on the iPhone, but cripple the Flash player and/or make it difficult for developers to work in Flash for iPhone apps.

And finally…

The Dude writes: I don’t think people yet realize the groundswell of developers who are chomping at the bit for the iPhone/Touch SDK. People are VERY excited about this new platform.

I couldn’t agree more. The third screen has been an alluring dream for at least a decade, and many ambitious and creative projects have foundered trying to reach it. The iPhone has suddenly made this dream real. There are a TON of developers and companies who will jump on the opportunity. The longer Apple has the application development field to itself, the more likely they’ll own the market.

Techies tend to have a warped view of how “real people” relate to computers. A large chunk of the mass market doesn’t sit in front of computers all day, and doesn’t particularly like to spend their leisure time at a desk. If the iPhone/Touch succeed in untethering the web, including rich web applications, I think you’ll see a significant migration to the mobile web and away from the desktop web.

Exciting stuff, Dude.

Pakistan didn’t like something on YouTube.

So they tried to block YouTube in Pakistan.

And accidentally blocked YouTube for the whole world.

Whoops!

The Wall Street Journal reports:

Service on Google Inc.’s YouTube site was disrupted around the world for several hours Sunday after a botched effort by the Pakistan government to block access to a video clip critical of Islam.

Pakistan Telecommunication Corp. Ltd., or PTCL… only meant to block YouTube within Pakistan. But erroneous handling of PTCL’s routers inadvertently brought YouTube down.

The instructions sent out across PTCL’s network were meant to apply only to traffic within Pakistan. But somehow that message started getting replicated on the Internet world-wide.

“The traffic that was supposed to be going to our address was being rerouted to Pakistan, and subsequently dropping,” said Mr. Reyes of YouTube.

TechCrunch offers a possible explanation:

The interesting side of the outage is an allegation from OpenDNS that Pakistan Telecom hijacked YouTube’s IP address space resulting in a worldwide outage. They note that the issue was subsequently rectified by PCCW, but it raises the question: is it really that easy to take one of the largest destinations online down?

Why is this important? Because the iPhone is not just a smartphone. It’s Apple’s opportunity to dominate the mobile web.

The mobile web has been massively hyped for at least a decade. For most of that decade, it has also massively sucked.

The iPhone has changed all that — as the market share data proves. Within about six months, the iPhone has leapt from 0.00% market share to 0.12% market share of ALL web usage (and the growth rate is increasing). That’s TWICE the share of Windows Mobile, and more share than all competing mobile web browsers COMBINED. In the next year, it’s quite possible that the iPhone will capture ~90% market share among mobile web browsers, leaving 5% to Windows, et al. You can bet they’re grinning like hyenas about that down in Cupertino.

As Bob Cringley notes, full support of web applications is crucial to the iPhone’s usability. So far, Apple has ensured that AJAX is the only way to build web apps for the iPhone.  While AJAX is an open standard that poses no threat to Apple,  Flash is a proprietary standard that’s tightly controlled by Adobe.  And there’s no love lost between Apple and Adobe (they’ve been frenemies for decades).

So, Flash support is NOT about how to play video — it’s about control of standards in a market where Apple wants a de-facto monopoly. By minimizing use of Flash on the iPhone, Apple is preventing Adobe from creating a cross-platform standard for mobile-web apps.

But Adobe is only a minor threat; Microsoft is a bigger concern. Microsoft is pushing into Flash’s territory with its new Silverlight platform and has an existing massive investment in mobile. It’s not likely that Apple will completely ignore Flash forever, if only because that would leave a big, gaping opportunity for Microsoft to improve upon the iPhone user experience by building up Flash and Silverlight support in Windows Mobile. Apple can’t afford to leave that door open.

By delaying this long Apple has already given iPhone developers a one year headstart with AJAX, and may have enough leverage to gain some control over an iPhone Flash player as well (or cripple it just enough to keep developers working on AJAX iPhone apps instead). Apple’s best-of-both-worlds scenario is that the mobile web tilts strongly towards AJAX, maintains modest Flash support, and shuts out Silverlight. We’ll see how well they can pull it off…

More than half of internet users encounter frustrations and other frictions in the course of online shopping. 58% of Internet users say they’ve been frustrated, confused, or overwhelmed by the online shopping experience.

The Pew foundation also found that

84% of Internet users say “I prefer to see the things I buy before I buy them”.

The study contains quite a bit of interesting data on the attitudes of Internet users towards online shopping, complete with thorough demographic analysis. You can download the full 32-page report for free from the Pew Research Center.

This doesn’t come as a surprise; if anything, it’s way overdue. Google introduced Video AdWords back in mid-2006 but confined them to its “content network”. This week’s news indicates that Google is now going to start displaying these ads on its own webpages, as well.

The real story here is the remarkably slow evolution of the video advertising medium. Google, which ought to be the 800-pound gorilla, has been surprisingly slow to deploy a video complement to their own ad network (and to monetize their YouTube purchase). In terms of market-based innovation, they lag behind aggressive startups like Tremor, VideoEgg, YuMe, and Broadband Enterprises.

We think Google is taking its time because video advertising is a very complicated product; it’s really not very analogous to text AdWords, which has probably hampered their rollout. Moreover advertisers are generally still looking or experimenting rather than buying in volume (partially for lack of inventory). Most importantly, Google certainly hasn’t developed internal consensus on the relative importance of this new potential market relative to their existing cash cow. And because the online video advertising market has yet to generate revenue in proportion to its hype, it’s all too easy for them to slip into complacency.

Sounds like a classic Innovator’s Dilemma, doesn’t it? GOOG’s leisurely pace is making it increasingly likely that they’ll lose technology leadership in this space by the time the market is large enough, financially, to justify a significant investment.  The problem with that is that waiting for the market to mature may leave them too far behind the leaders to catch up through organic growth.  If they haven’t made a breakout move by 2009, they’ll be forced to pay a high premium to acquire a startup competitor (or two) in order to get their hands on enough “video DNA” to compete effectively in the space.

Our CEO, Raj Gajwani, was interviewed by Practical eCommerce’s Pat Callahan for their “eCommerce Conversations” podcast. Raj spoke with Pat about why more and more retailers are using online video to merchandise products. Check out the podcast at Practical eCommerce (or search for it on iTunes).

The folks at Practical eCommerce publish “down-to-earth articles and advice” through their printed magazine, email newsletter, podcasts and website. It’s nice to see that they agree: Internet video is the hot new thing in eCommerce!

When you can actually see the item in action all the writing in the world can’t compare. We want to deliver a richer shopping experience and give the shopper as much information as possible so it will lead to a more satisfying shopping experience.

Colin was quoted in the January 14 issue of Brandweek. For more, see the article: “Reviews Roll In as Shopping Sites Add Video”.

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The labels say it makes business sense to target men now. In the 12 months ended Oct. 31, U.S. sales of men’s apparel rose 2.6% to $56.3 billion — faster than the 1.9% growth to $103.5 billion in the women’s apparel market, according to market researcher NPD Group.

There’s a generational shift at play.  More men are buying their own clothes, and slowly growing more confident in their fashion purchases:

 The labels say one of their ultimate goals is to get men to shop more like women — making more impulse purchases and being open to items they didn’t intend to buy when they walked into the store. Many men nowadays know what they’re looking for when they step into a store and are unlikely to pick up anything extra.

Last year, 75% of men bought most of their own clothes, compared with 52% in 1995, according to Marshal Cohen, NPD’s chief industry analyst.

Finally, the article shares an interesting tidbit about (offline) retail store design:

In the retail business, the area just to the right of a store entrance is prime real estate because most shoppers, regardless of their gender, turn right when they walk in a store, says Britt Beemer, chairman of America’s Research Group, a consumer-behavior research and strategic-marketing firm in Charleston, S.C. Following this logic, Harry Winston says it is prominently displaying its new men’s jewelry collection in that spot. Tiffany’s expanded men’s jewelry line can be found just to the right of the entrance to its new Wall Street store.

Placing men’s goods in this prime location is especially important for stores trying to appeal to men because they tend to be more purposeful shoppers than women, says Mr. Beemer.

Unfortunately “100% uptime” doesn’t mean what you think. Rackspace suffered a (short) DNS outage in September 2006. Last fall they suffered two outages due to power issues — the most colorful one was caused when a medically-incapacitated truck driver drove into a power transformer outside their data center. Today, 37signals suffered a two-hour Rackspace hardware outage in the middle of the workday. To their credit, Rackspace has been open and proactive about the issues and their responses.

And to be fair, **** happens. There is no such thing as “100% uptime” for Internet services– not the way you & I would interpret that promise.

In ages past, telephone network engineers talked about uptime uptime in terms of “four nines” or “five nines”. “Four nines” means 99.99% uptime — that means no more than 52 minutes a year of downtime. “Five nines” means 99.999% uptime — less than 5 minutes and 15 seconds of annual downtime. Ma Bell and her progeny aimed for core service levels in that range. Today’s network engineers aim for similar targets.

Unfortunately the Internet is a heck of a lot more complicated, and a lot less mature, than Ma Bell’s telephone monopoly. Individual parts of the Internet are capable or four- or five-nines availability, but today’s Internet is layered with dramatically more complexity, variety, and failure points than ever. Data centers are designed to handle power failure, but cooling systems are now an issue. You can deploy redundant clustered servers, but your load balancer may fail. Five backup generators plus UPS’es (uninterruptable power supplies) will certainly protect you from utility power outages, unless 40% of the generators fail, or the UPS fails, or cooling fails, or your file servers go wonky, or one of your core routers may degrade — or all of the above may happen repeatedly within three weeks. And all this is on the service providers’ end, and Internet services don’t take responsibility for the “last mile”.  End customers still have to deal with Windows crashes, web browser bugs, and flaky DSL connections.

Today’s Internet is kind of like a giant game of Jenga. It’s a wonder that it works as well as it does, given the amazing number of building blocks that have to work together. Each piece of our Jenga tower is, by itself, more reliable than ever… but increasing complexity means that 100% end-user availability is frustratingly hard to guarantee.

Fortunately there are lots of smart people (including here at SilverDock) working really hard to raise the standard of reliability for Internet services. For our part, we focus on failover capability between four data centers on two continents (and more to come). We’ve also designed our application around a loosely-coupled architecture. And we are working with high-quality CDNs to further improve availability, scalability, and response times.

In the bigger scheme of things, there’s a trial-and-error process of evolution under way. As each layer of the Internet gets better at interoperating — holding up their part of the Jenga tower — we can expect reliability to continue to increase. With a little luck, in 2018 we’ll see an Internet that’s even more reliable than Ma Bell’s old landlines.

While these numbers aren’t directly comparable to the more widely-reported Comscore stats about holiday season shopping, they reflect greater strength than other reports we’ve seen. Two facts stand out:

1. MasterCard’s numbers include gift card purchases, which retailers don’t book as revenue until they’re redeemed. Since gift cards have recently become a hot holiday gift item, standard year-over-year retail sales comparisons may be underreporting actual sales growth.
2. Online retail continues to be the bright spot in overall retail sales. This is where the growth is.

More info coming very soon…

Other interesting tidbits: CyberMonday was not the biggest shopping day of the season. That was December 10th. Internet Retailer reports:

The heaviest day for online sales was Monday, Dec. 10, with $881 million in purchases. The first Monday after Thanksgiving, which some call “Cyber Monday” and consider the kick-off to the holiday shopping season online, was only the ninth busiest shopping day of the season with $733 million in sales.

Inevitably, there’s a new color on our palette… ComScore has dubbed the biggest shopping day of the season “Green Monday”. My suggestion for next year: color-coded dayparts. “Magenta 10am-2pm”, anyone?

Google recently started adding big, bright “Google Checkout” buttons to selected AdWords text ads. SEO and SEM experts expected this to make more users notice these ads. Apparently they were wrong. Internet Retailer reports that adding a bright “Google Checkout” button to AdWords ads did not increase the visibility of the ads — even though it did increase click-through rates (CTR).

So what gives? When it comes to online user behavior, there are plenty of hypotheses. Don’t trust them without proof.

At SilverDock, we’ve seen this in surprising ways. Pretty much everyone takes one look at our product videos and says, “that’s the future of retail.” We were shocked to discover that, according to our data, product video doesn’t always increase conversion rates. Certain implementations work great — producing 35% increases in sales. Other implementations showed no effect.

Armed with extensive data about what works best for online e-commerce video, we’ve tuned the SilverDock platform to deliver outstanding results for online retail. The lessons we’ve learned are the same as the lessons of the Google Checkout button story — don’t trust your hunches until the data agree, too.

• 74% offered estimated delivery times
• 58% correctly answered an e-mail question within 24 hours
• 52% of retailers had physical stores; only 10% of all retailers offered in-store pickup of orders
• 43% offered free shipping
• 42% provided shipping costs early in the checkout process
• Only 39% offered any information on the product page regarding in-stock availability
• 35% had a checkout process with more than four steps
• 33% offered customer reviews

Key takeaway: you can differentiate just by getting the basics right. Pretty much every store-in-a-box e-commerce vendor can give you a site that handles transactions moderately well. Most of those “starter” systems even offer automated shipping costs, short checkouts, and estimated delivery times. So you can start a brand new online store with very little investment and ALREADY be ahead of the pack.

For the retailer looking to excel, the steps involved aren’t rocket science. Younger and/or more innovative online stores have a tremendous opportunity to lead the market just by following best practices. As the industry consolidates over the next decade, the innovators will be well-positioned to take market share from the “me too” stores that don’t invest in customer experience.

FutureNow suggests the following steps for retailers looking to improve their online operations:

• In product presentations, provide:
  • Better and more enticing product descriptions.
  • Better-quality product images.
  • Multiple images.
  • Customer reviews.

• For fulfillment options, offer:
  • Product availability.
  • Easily visible return policies, shipping policies, and guarantees.
  • Customer-friendly and easy-to-read and -understand return/exchange policies.
  • Gift options.

• For checkout options, include:
  • Multiple payment options (e.g., by check, PayPal, etc.).
  • Estimated delivery times, and show in-stock availability for items.
  • In-store pickup where physical stores exist.
  • A progress indicator in the checkout process.
  • Simpler or fewer steps or both in the checkout process.
  • Third-party seals and security assurances.

• For customer service options, implement:
  • Faster and more accurate replies to customer e-mail inquiries.
  • Chat options.
  • A visible phone number for questions and problems.

Why is this exciting? Today, the video-web is similar to the text-web back in the mid-1990’s. There’s a lot of content, but you can’t find it if you don’t know where to look. First directories (like Yahoo) and then spider-based search engines (like Alta-Vista and, later, Google) were a key new tool that “tamed” the Internet.

Video content is exploding in quantity and quality — and has been since 2006. Video search engines have started to catch up, but general search engines (like Google) are still way behind the curve. Google’s Video Sitemaps is an exciting announcement because it heralds another step in the video-awareness of general search engines. Google and other general search engines are beginning to make sense of the video-web. And when they figure out how to make sense of the video-web, it will be a whole lot easier for you and me to make sense of it too.

What does this mean for e-commerce? The race for video-SEO and video-SEM traffic (that is, “video search engine optimization” and “video search engine marketing” traffic) is beginning. It’s time to consider how video content (including viral video) can help increase your site’s PageRank, search relevancy, and traffic. If you’ve already got video content, it’s time to start figuring out how to monetize it by getting your videos listed in all of the video destination sites, video search engines, and general-purpose search engines.

Watch this space for updates as SilverDock announces our new technologies and services to help e-commerce retailers and product marketers use video SEO and video SEM to increase their traffic.

Does this make sense?  Well, the overall online ad market is project to continue to grow at about 30% in the next couple of years, and slow to 12% by 2011.  In the meantime, online video is expected to grow to 13% of the mix, from 8% today.  These numbers seem like a reasonable guess, but they’re only a guess.

The key question is, what’s the long-term portion of ad spending that will go to online media?  And what chunk of that will go to video?

Consumers are spending increasing amounts of time online, and they’re shopping online more and more.  Already people spend as much time online as they spend watching TV.  However Internet advertising spend is way below TV ad spend — TV is around $70 billion today, while online is around $20 billion.   So if anything, the eMarketer numbers seem conservative.

What’s going on here? Shouldn’t the subprime debacle be crushing retail this season?

Apparently not. My hypothesis: the subprime mess is superimposed on an otherwise not-terrible economy. Subprime will have a very niche set of victims — subprime borrowers who are in over their heads, and financial firms that are stuck with explosively bad derivatives. Subprime homeowners are not representative of consumers as a whole, they tend to cluster in certain geographies and lower spending brackets. Financial firms will lay off employees and rein in bonuses, but the quantity of people directly affected will be finite and relatively small as long as the broader credit markets stabilize soon. The theory that the broader economy will be hit hard is based on estimates of the “ripple effect” from these two groups. So far, the ripples haven’t rocked the boat too aggressively; the broader economy hasn’t capsized. It’s quite possible that the slow-motion impact on subprime homeowners over the next couple years (abetted by the failure of long term interest rates to skyrocket) may allow the rest of the economy to bear this burden while still continuing to maintain modest overall growth.

Keep your fingers crossed, and keep the shelves stocked…

Amazon deserves credit for continuing to innovate aggressively in an industry that is often slow to challenge conventional wisdom. From Amazon Prime, to their wide embrace of third-party sellers, to Amazon’s recent introduction of Product Video (which silverdock.com was pleased to assist with), they’re doing a great job. Customers recognize leadership and will continue to reward Amazon with their loyalty. Congratulations, Amazon!

Google is reknowned for its network infrastructure, and there was some speculation GOOG’s acquisition of YouTube was necessary in part because YouTube was choking on its own traffic volume. While YouTube has put a very prominent “powered by Google” graphic on their site, apparently the infrastructure renovation still has a ways to go.

Spotty uptime is fine for a free, consumer service. For reliable e-commerce video hosting, consider SilverDock.

Now you can take your existing SilverDock Product Video content and use it on eBay — with all the benefits of SilverDock’s “Universal Access” technology, and at no extra cost.

Aided by less expensive and more sophisticated technology, stores like RealmDekor.com, CleanAirGardening.com and SitStay.com are competing with retailers as well as bigger sites like Amazon.

The article (Small Merchants Gain Large Presence on Web) talks about how smaller retailers are cleverly using online promotion and marketing to compete with much larger competitors. One retailer, CleanAirGardening.com, talks about their experience promoting via YouTube:

CleanAirGardening.com, an online retailer of environmentally friendly gardening supplies based in Dallas, recently began posting product demonstration videos on YouTube and other sites, along with links to the site. According to Lars Hundley, the company’s owner:
visitors who arrive from video-sharing sites purchase goods 20 percent more often than those who come from elsewhere.

Here is some of the WSJ’s advice on making successful viral videos:

• Videos that tend to go viral are funny, outrageous, or remarkable (such as WillItBlend). Other successful videos are revealing or touching, like Val’s Art Diary.
• Your viral video can be “homemade”.
  • (Editor’s Note: not everyone has the time, energy, equipment, or talent to put together their own collection of viral videos. SilverDock can help you create, host, and promote your viral videos. Send us an email to find out more).
• Short is best. Under 2 minutes is good, 30 seconds is even better.
• Try a whole bunch of different things. If you make 10 or 20 or 30 videos, 1 or 2 of them might “go viral”.

In the interview (below), David Meerman Scott, author of “The New Rules of Marketing,” talks with WSJ’s Raymund Flandez about best practices for viral video.