How to Make Money with Online Ads: SXSW 2005

Online panel with Philip Kaplan, Jason Calacanis, Gokul Rajaram, Henry Copeland, & Bill Flitter. To get an overview of the size and compare the various blog advertising networks (and Google AdSense)

# of salesmen:

  • Google has a ton of salesmen.

  • BlogAds has 2 salesmen
  • Pheedo has 3 salesmen
  • AdBrite has 6 salesmen. 3 for inqueries and 3 for calling advertisers. AdBright also recently accepted $4 million dollars in VC funding.

service & fees:

  • Google AdSense places contextually relevant ads on your site. While they have the largest distributed ad network they do not state the profit share percentage. Google introduced Smart Pricing a while back, which works to automatically discount the value of a click if they believe the site has low quality traffic. He stated that the publishers were not given a smaller share of the cost per click in these situations, but that the overall cost per click is lowered.

  • BlogAds allows you to sell flat rate ads. They keep 20% of the ad spend.
  • Pheedo allows you to track your RSS feeds and also places contextually relevant cost per click ads in your RSS feed. They keep 35% of the ad spend.
  • AdBrite allows you to sell flat rate targeted ads. They also allow you to sell bulk untargeted ads if you chose to. They provide a great overview of stats including repurchase rate. They keep 25% of the ad spend.

Business models for blog networks:

Jason stated that he expects many publishers to stack the various advertising networks on their sites to achieve maximum profitablility. He stated that when he started his network he wanted to pay bloggers 50% and that did not work. He later said that he gave the bloggers the first $500 and then 50% and then that did not work. Now he stated that he pays bloggers a flat monthly fee. He stated Gawker media pays $2,500 per month. One of the major benefits of blogging is that the time spent editing normal media is not usually required for bloggers.

He stated that at this point the bloggers still usually need to do something else to get to self sustaining but he thought that the business model would allow bloggers to just blog for his network sometime next year.

Jason also stated that for the people who run multi channel blogs that the more profitable channels are used to pay for the less profitable channels. The channels which lose money can still be ran to offer a wider selection or offering to people who like the network. His goal was to run 700 channels. Recently I believe they launched their 75TH channel.

Criticsms for this panel:

  1. For this panel being about making mone with online ads it was a bit excessively focused on blogs. If it was to be exclusively about blogs it should have said that on the schedule.

  2. I can not fathom how there was a panel about making money with online ads and there was exceptionally little coverage given to the concepts of:
    • selling ads directly

    • partnering up with a merchant or creating your own product
    • affiliate programs
    • selling links
    • sponsored posts
  3. I asked about low quality screen scraper sites participating in AdSense and got a fairly canned response from Google AdSense's product manager. He stated that they use technology and people to review sites and disapprove low quality ones. If they do that then they are doing a lousy job.

    Discounting the click prices a bit and still leaving sites in the program still encourages people to cloud up the web with crap sites. Granted a long time ago I made a few crap sites myself, but Google could at least be honest about not caring about that issue.

  4. On that same question Jason Calcanis stated that click fraud is a non issue. He stated that people were just looking to make up ways to find problems with the business model. He then pointed at Google's AdSense product manager and stated click fraud is not a problem, and he of course agreed.

    Funny that this is the complete opposite answer to what George Reyes, the CFO of Google, gave a while back.

    "I think something has to be done about this really, really quickly, because I think, potentially, it threatens our business model."

  5. As a person who has probably bought and sold around $100,000 worth of various ads in the last year I know that fluctuations in bid prices or click volumes can have significant effects on ROI and ad spend.

    Even if the fraud averages out over time it still:

    • tears apart consumer trust

    • increases account management time. If it takes me more time to manage an account then it costs more money for me to manage it, and that means less money is going to Google.
    • causes more inefficiencies in the market
  6. This panel should also give tips on how to increase site exposure and ad click through rate, since those concepts directly relate to ad revenue.

Bonus Rant:
Jason Calcanis used his speaking gig to rip on Gawker media no less than three times.

  • talking about finding Michael Jackson news on Gawker

  • talking about finding a Lindsay Lohan nipple slip on Gawker
  • saying "I read it on Defamer. It must be true."
  • words and tone matter. apparently I was not the only person who noticed Jason using the microphone for the wrong purposes

    post: Sometimes panelists need to be reminded that they are there to talk about the topic at hand, not to trash people they don't like and then admit they never heard of the topic of the session till they were asked to be in it. Could have been a really interesting session, though.

    comment: i agree. i think two audience questioners put it best when they basically said you ALWAYS have to consider the authenticity, knowledge and motivation of ANY source. After sitting through this session, I question all three for panelist Jason Calacanis.

For a person strong on the blog ethics concpet you would think he could give a speech without doing that crap.


Ana Marie Cox & Al Franken Interviews

Ana Marie Cox, who writes for Wonkette, was the keynote speech at SXSW interactive on Monday.

She stated that she has been in reporting for 10 years. She is working on a political book about August in DC prior to a presidential election. As far as good political books goes she recommended The Gay Place: Being Three Related Novels and I think she also recommended something by a name similar to Minor Fall Major Lift.

She stated her past work at sites like Suck.com (I think) helped to:

  • make her not care what people thought

  • make her willing to offend all parties
  • make her more edgy and funny

She was asked many questions on the blog vs journalism theme (which appeared strongly this year at SXSW).

She stated that as some bloggers became scalpers they started to turn into the media they critisized...and thus others will replace them.

She also stated that while blogs make some subjects more notable they also make other topics toxic, which prevents them from getting proper coverage in the national media.

She thought that blogs could be a supplement within the media diet, but should not entirely replace media.

A somewhat complete transcript of her keynote interview exists here. Please note that some of the text may be seen as slightly offensive to some.

Al Franken was the next speaker after Ana Marie Cox. He is an author and hosts a left wing radio show on Air America.

For blogs he recommended Daily Kos and Talking Points Memo. He also recommended people read the 9-11 Commission Report.

Al Franken stated that George Lakeoff, author of Don't think of an Elephant, was good at indentifying framing errors but was not strong at comming up with the best solutions to them. He stated that he thought Frank Luntz was amazing at framing debates.

I tried not to get too deep into the political opinions of the people who were interviewed as I doubt it serves much purpose on this particular blog.

How to Inform Design: How to Set Your Pants on Fire

Panel by Nick Finck, Jeffrey Veen, & Kit Seeborg.

Jeffry Veen shows Haynet as an example of good usability.

He believes that to perform well it is best if he imerses himself in the topic of the clients site. He jots down lots of notes on yellow stickies and covers the wall with the various ideas.

During project definition and research many possible solutions can be quickly eliminated, thereby lowering the overall cost of a project.

To find some of the core ideas behind the sales point of the website Veen collects market research data from people in the real world, often while failing to mention websites, as he feels that the needs overlap. The research ends up averaging out to about $200 per person and most smaller tests usually test about 6 to 8 people.

Veen also feels that analyzing data from server logs also tends to fall off track. Since you are only tracking where people are going wrong with the current system it may not bring about the most effective solution.

I totally agree with this concept. Often people have self fulfilling prophecies about their sites. The first day I talked to a marketer for a major cable and high speed internet provider. He stated that since most of their referals to their website came from direct type in traffic or bookmarks that he did not feel they needed to do SEO. If you don't know what traffic you are missing out on then it is kinda hard to see the need to go after it. This is why only analyzing your referal logs can give you bad or incompelete market data.

Seelong states that it is a good idea to follow the money trail before you get too deep into a project to ensure you will be OK to do whatever you desire. She also likes using survey services such as Survey Monkey.

Review of Daniel H Pink's A Whole New Mind 2005 SXSW Speech

A Whole New Mind
Daniel H Pink, who spent 10 years as a political speech writer, stated that the keys to a good Monday morning speech were brevity, levity, and repitition. He then went on to explain some of the concepts in his upcomming book by the name of A Whole New Mind.

In the past he stated that left brain dominant people have had an advantage. Well paying jobs existed for those who exceled at linear, logical, rational, and analytical types of thinking.

He then went on to state that due to automation, abundance, and Asia that people who exceled in right brain dominant thinking will do well going forward. Those who are empathetic, wholistic, artistic, intuitive, and big picture thinkers will receive more than a fair share of the upcoming windfall of profits.

Abundance:

  • 2 in 3 US own their own home
  • more than 1 car per registered driver in the US
  • self storage is a $17 billion dollar per year industry. (which is more than the motion picture industry

Asia:

  • overhyped short term
  • underhyped long term
  • 1 in 10 US IT jobs will go to India in the next 2 years.
  • 1 in 4 IT jobs will be outsources by 2010.
  • 2010 more people from India will speak English than the number of people doing so in the United States.
  • they work for 1 / 6 of the wages
  • cost of phone connections has moreless reached zero
  • routine jobs (such as scripts and specification sheets will be the first to go)

Automation:

  • "Software is a forklift for the mind." - Tom Peters
  • John Henry beat the machine and died.
  • Kasparov retires from chess.
  • TurboTax
  • YourDiagnosis.com
  • legal fees:
    • uncontested divorice ~ $3,000
    • Complete Case.com $249
    • US Legal Forms.com $14.95

Affluence, technology & globalization
agriculture -> Industry -> Information -> Conceptual (creators and empathizers)

Women have a much larger corpus callosum and are thus better at multitasking.

questions to see if you are in the wrong business

  1. Can someone overseas do it cheaper.
  2. Can a computer do it faster.
  3. Will there be demand for it in an age of abundance.

He adds the buzz words high concept and high touch to explain products and services he believes will do well.

Design, story, sympathy, play, meaning, and empathy are fundamental human attributes which will help people succeed.

He then gave examples of how design could be easy and why it is important.

  • "I see us as being in the art business. Art, entertainment, and mobile sculpture, which, coincidentally, also happens to provide transportation." - Robert Lutz, chairman of General Motors North America
  • Daniel also showed how quickly one can learn to draw by taking a five day course, showing his before and after self portraits.
  • US Army using video games to recruit.
  • Daniel also points to the hokey 2000 Florida state ballot which had many old Jewish ladies voting for Pat Buchanan

Google AdSense Ad Links, Google Local Business Center, The Butler, The Sandbox, New SEO Blogs

Ad Links by Google:
Peter D shows new AdSense change

Google Local Business Center:
wonder if the Yellow pages are feeling yellow? Andrew Goodman has the details. for now US only.

Wonder What Google thinks?
of a free product that strips out their published ads for the user

their response to autolink thusfur has been nothing short of pathetic. nice job Mark.

Ask Jeeves also recently created a FireFox toolbar.

Google Sandbox:
Does the sandbox only affect phrases containing popular words?
found on ThreadWatch

I have recently seen a site under a month old rank for some rather short query sets.

New SEO / SEM Blogs:
maybe not new, but at least new to me.
Got Ads? - seems to be more focused on the ad / ppc side of the search game. have not read it a ton yet but have seen John contribute many good posts on Andrew Goodman's SEM 2.0
Wolf Howl - should have mentioned and found this one a while ago as multiple friends have recommended it to me. his most recent post references Flatland, so it must be a cool blog :)

the conference I am at:
ended today. I could blog about a bunch of stuff but now find myself headed toward the closing party, which I suspect may give me more stuff to blog about.

Resource Rate Meta Blog / Forum

Resource Rate is the brainchild of Chris Ridings from SearchGuild. Essentially it aims to tap an Alexa type data from those of us willing to add a bookmarklet to FireFox to rate threads we view on various SEO forums.

Currently the system is heavily biased toward the newer / smaller / more hip forums ;)

If a few people join from some of the other forums it could help create a rather comprehensive resource. Editors get a share in the AdSense revenues from the site and it requires little effort beyond automatically sending back your feedback.

More info about Resource Rate on Brad Talmir's blog and ThreadWatch.

Blogs

Blog spam is on a sharp rise. These systems will only get more and more sophisticated as time passes. May as well give an interview and celebrate!

So today was the fifth annual Bloggies. Boing Boing won blog of the year for the second year in a row. Gawker media won a bunch of Bloggies too. The guy grabbing the awards for Gawker decided to rotate someone else in after a while.

Blog seems to be the single most used word at SXSW. Blogger just updated their API service and they are throwing a blog party right now - which I am either too tired or too lazy to attend.

This message was posted on a blog ;)

The other word I have heard in a ubiquitous fashion is the word ubiquitous.

MSN Search Ads Beta Release

MSN to start beta testing their own ppc ad network Wednesday, March 16 2005.

Andy Beal thinks it will be better than AdWords and Gary Price states that the official word will come out tomorrow, but that the system may not be fully integrated for 6 to 12 months.

I would just like to say that the MSN ad sales person I spoke to yesterday who told me Overture sometime in 2006 may have not been giving me the best info he could have ;)

Bogus Disclaimers & Self Promotional Postings

With respect to companies and their home pages showing up as the number one result I would like to point out that large companies who are SEO savvy do not necessarily want to have their home page show up first. Let's take Hewlett-Packard (disclaimer - I work with these guys)

Just found that on a discussion list.

Is it me, or does that lack tact?

At what point do we jump in head first? :)

2005 SXSW Interactive Conference

Review of the first couple days of the South by SouthWest conference. It does not much relate to search, but if you like other web, design, and interactive media stuff it might be worth glancing at. Friday, March 11

Ducking Bullets and Blowing Up Barriers
Thomas Fulp talked about independant game design. He runs the flash website Newsgrounds and recently launched Alien Hominid. His game looks cool enough that I am debating buying a Playstation 2.

He talked a good amount abut how being independant helped the creative process. I think I am a good bit more creative and efficient without structure and barriers real jobs and employers provide.

Saturday, March 12

The Imagination Challenge: Points of Departure for Design in the Knowledge Age

Alexander Manu talked about how the industrial revolution split work and play. He stated that play is where most of the creative ideas come from. Being a grown up child makes it far easier to expand the limits of technology & creativity.

Yet another presentation that makes me want to go out and buy some more video games. ;)

Ramblings from the Ranch
Chipp Walters and Michael McGar, a couple well known vets from the Austin tech scene talked about some of the trends they have seen in industrial design.

As time passes artificial intelligence and genetic algorithms will become more and more intertwined into the design process. They also stated that one thing that really helped Austin take off in the tech scene is that many of Austin's early industrial design firms openly shared their work and products with one another.

Zeldman gave the Opening Remarks Saturday keynote. His The Daily Report site is rather popular and he also works on A List Apart and The Web Standards Project.

He was a funny speaker who ended his speech with a which one of these things is not like the other game. He emphasized the importance of having fun, meeting people, and social interaction at SXSW. He also brought up Matthew Mullenweg to explain how South by SouthWest helped Matthew create WordPress.

How to Hot-Wire the Creative Process
Curt Cloninger gave what I thought was generally a kick ass presentation. He pointed out some of the ideas he uses and encourages his students to do to think up creative ideas.

a few of the concepts he stressed were

  • people should use processes but they are not universal or one size fits all

  • as designers we are editors. nobody really starts from "scratch"
  • we should all have test sites to practice and learn on. if you do not want to make a formal connection you can annonymously publish it.

a few of the cool resources he pointed out were

He also posted his presentation online.

Blogging Without Borders: Bridging the Digital Content Divide
Panel talked about the effects of weblogs in emerging countries and how they affect social and political conditions.

They talked about raising money after the recent tsunami and how some people crossed large plots of land to bring their ideas to portions of the country which still had web access.

In the Q&A section Hossein Derakhshan, a popular blogger who covers Iran, was asked what was the biggest worries with Iran country going forward. The response was the worry of war destroying the recent buildup in the country. He also stated that the country has some semi democratic processes and the corporate controlled government in the US may not compare all that favorably to it.

He also stated that most of the youth in Iran is not politically active. He said what would really help the country move forward is if they could get a journal of a 50 yr old Iranian who was politically active when he was young and upload those entries to the web each day.

Sunday, March 13

Malcolm Gladwell gave the keynote speech. He primarily discussed some of the rapid cognition and inherant natural predjudice concepts in his book Blink. He has rather strong carisma and is a great public speaker.

Later he was signing books and I got a signed copy of The Tipping Point - a key pickup as it is one of my two favorite books.

We The Media
After Gladwell's keynote Dan Gillmore was the next speaker I watched. He covered concepts which were in his We The Media book and talked about various points in the history of online media where he felt that he noticed a shifting in media.

He pointed to

  • an email a random guy in Florida sent him during a conference - which allowed near real time feedback

  • September 11 coverage - where many pictures came from the web first and vivid accounts such as now I know what a burning city smells like.
  • feedback he found on the Interesting People newsletter
  • coverage of the Challenger space shuttle entry
  • coverage of the tsunami
  • coverage of the 2000 election - and how he was getting great coverage by mixing and matching to roll his own news

He stresses that if you are a journalist no matter what you know your audience will know more than you and that presents a huge opportunity for journalism.

After his speech I think I was the first person to get a signed copy of Dan's book and I think I also overheard him say that his speech will be on IT Conversations.

How to Build Your Brand with Blogs
Panel hosted by Jason Fried, DL Byron, Molly Holzschlag, Jim Coudal, and Robert Scoble.

They stated that blogs are not for everyone and that if you don't have something interesting to say there is no reason to expect people to read it.

One of the most important things for writing is to be authentic.

Scoble ever so slightly talked about SEO (primarily saying that people should use descriptive title tags). He also stated that he uses PubSub to track various post topics for MicroSoft.

In the Q&A section someone asked about clients who may not like you for comments you may make on your blog. Jason said that you should not want clients who would be upset by you writing your opinions. He said he is well known for dropping the f-bomb and the s-bomb and that he you should not change who you are for clients.

Being fake kinda undermines the whole point of the web. With the Long Tail there is a market for just about anything so long as it appears honest and thoughtful.

I got a pre signed version of Jason's book. I wanted to wait and get one signed in person and have him put F-bomb in the autograph.

That is probably a good link building idea for whoever does it first, create a logo for people who support gratuitous amount of F-bombs in their content.

The Web Awards occured after the conference on Sunday. I sat next to a MicroSoft employee and chatted search a small amount. I was stoked to see TheMeatrix amongst the prize winners at the show. Moophius came on the stage and claimed the prize.

After going to NYC and seeing how many people are covering search coming here and seeing that the Interactive portion of this conference probably only has about 1,000 people seems amazing.

With the breadth of the topics covered here and the quality of the speakers and visitors you would expect many more people to be here, but I guess it just goes to show how new the web is. From what I have seen there are few marketers here and I have not seen much discussion about search or broad based marketing, but then again there still are a couple days left in the conference and there is a panel called how to make money with online ads Monday.

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