We have been running a campaign on Google AdWords, and I was recently looking at the numbers: It turned out each click through was costing us $5 – $7 and about 1/10-20 of the click through was resulting in people registering on the site. Which made our cost of acquiring that registration about $50-$150. That seemed crazy to me or it caught my attention anyway.
So I began asking our SEO specialists: Were the keywords we had chosen to blame, thats what google said anyway. If you didn’t bid more than $5 on them, then the keyword did not become active. So I began choosing obscure keywords, keywords for which searches on google did not display any ads. And google took several of those keywords and said $0.10 is too low, it should be atleast $0.50 or $0.25. Why should that be the case if it’s purely a bid system?
After asking around it seems how the google ad system works is a mystery. And part of their revenue growth comes from this mystery, because no one can challenge whether they are doing any manipulation or price fixing. Given that they are getting to the size of a monopoly one would think someone will go and check that they are not just ripping us off?
Accidentally I also read in business week or fortune an article which said that several small retailers don’t find google profitable any more. Although Google spokesperson said that they were not experiencing this in a broad way. I decided to explore this further and went to adbrite.com and registered the keywords there at $0.10 cpc. The keywords got the same number of hits per day as they get at google and slightly better conversion rate.
Raises several questions: is google artificially raising bids? is it really the right option?
February 4th, 2007
Perspective from some work I did at Cornell (with S. Keshav) in the late 90’s …. YouTube has changed the video paradigm completely. But most video’s today are short clips, as the clips become longer …. I believe that the evolution of YouTube will cater to a model of “micro-viewership”:
… Out of the nearly 5.6 billion people in the world, 1.2 billion own television sets, 800 million have phone lines, and less than 200 million have access to the Internet. One way broadcast of video, therefore has a large and well established audience. However, TV broadcast is economical only when each channel is viewed by millions of people. In contrast, with the Internet, we believe that channels viewed by hundreds or even a few thousand geographically distributed viewers are economically viable. Moreover, the Internet can support tens of thousands of simultaneous channels and other multimedia content associated with video. We call the one way delivery of video content on the Internet “Internet TV”.
…
Video on demand requires quality of service guarantees as it attempts to provide VCR functionality over the network. Supporting operations like fast-forward or rewind requires the applications to rebuild the video playout buffer. This requires bandwidth and delay guarantees from the network.
[ ... which is difficult for the Internet to provide ... ]
In view of the above arguments it seems unlikely that video on demand will succeed on the Internet. On the other hand broadcast television without VCR controls is a one way transmission from the TV station to the viewers, and is more tolerant to delays in the work[1]. One-way transmission leverages the strengths of the Internet architecture and is a more realistic model to send video on the Internet.
Figure 1.1 Premium paid for the timeliness of video content
But the television network already does this reliably and efficiently. In order to be successful Internet TV should either reduce the cost substantially or offer value-added services. Internet TV has two major advantages over broadcast television. First, the pricing model of the television industry makes it difficult to broadcast programs to small viewer populations. Second, Internet TV is able to integrate other media with video enabling a large class of applications.
But the television network already does this reliably and efficiently. In order to be successful Internet TV should either reduce the cost substantially or offer value-added services. Internet TV has two major advantages over broadcast television. First, the pricing model of the television industry makes it difficult to broadcast programs to small viewer populations. Second, Internet TV is able to integrate other media with video enabling a large class of applications.Figure 1.1 shows that people are more willing to pay a premium, or be more tolerant about video quality, for watching movies in theatres or for watching events live. Although live events with large viewer populations can be broadcast efficiently on the television network, it is uneconomical to do the same for small viewer populations. Television channels have three main sources of revenue: (1) subscription fees, (2) advertising, and (3) pay per view. For channels with comparatively small viewer populations the bulk of the earnings come from the subscription fees. Only channels with 80 to 90% market penetration earn significant advertising revenue. It seems unlikely that it would be ever economical to broadcast to an audience of 1000 to 2000 viewers.
On the contrary an audience of 2000 viewers is considered large for the Internet. The Internet will have a distinct advantage over the television network in broadcasting live events to these small viewer populations. We also believe that there will be a large number of events of interest to only small audiences. The Internet already transcends national and international boundaries and united people with similar tastes and interests across geographical boundaries. Several events can therefore be broadcast live to these small communities.
Further, video from these events can be integrated with other media to build powerful applications. For example, the live broadcast of a chess championship may be accompanied with a chat-session with the leading chess players of the world. Internet TV allows video to be treated as a data type to build larger applications.
To summarize we believe that Internet TV will have the most impact to broadcast live events, video in conjunction with other media types, to a small geographically distributed audience. This thesis addresses the problems encountered in making Internet TV feasible. This chapter presents an overview of the various problems.
[1] As a existence proof note that the radio and the television networks already have different amount of delay. The viewer receives the same event being broadcast on both the networks at different times.
But the television network already does this reliably and efficiently. In order to be successful Internet TV should either reduce the cost substantially or offer value-added services. Internet TV has two major advantages over broadcast television. First, the pricing model of the television industry makes it difficult to broadcast programs to small viewer populations. Second, Internet TV is able to integrate other media with video enabling a large class of applications.
But the television network already does this reliably and efficiently. In order to be successful Internet TV should either reduce the cost substantially or offer value-added services. Internet TV has two major advantages over broadcast television. First, the pricing model of the television industry makes it difficult to broadcast programs to small viewer populations. Second, Internet TV is able to integrate other media with video enabling a large class of applications. But the television network already does this reliably and efficiently. In order to be successful Internet TV should either reduce the cost substantially or offer value-added services. Internet TV has two major advantages over broadcast television. First, the pricing model of the television industry makes it difficult to broadcast programs to small viewer populations. Second, Internet TV is able to integrate other media with video enabling a large class of applications.
December 10th, 2006
IT Change Management can learn from what has been learnt about change management more from a people and organizational perspective. Here is an excerpt from “Change Management 101: A Primer” available at http://home.att.net/~nickols/change.htm
Section III: The Change Process
The Change Process as “Unfreezing, Changing and Refreezing”
The process of change has been characterized as having three basic stages: unfreezing, changing, and re-freezing. This view draws heavily on Kurt Lewin’s adoption of the systems concept of homeostasis or dynamic stability.
What is useful about this framework is that it gives rise to thinking about a staged approach to changing things. Looking before you leap is usually sound practice.
What is not useful about this framework is that it does not allow for change efforts that begin with the organization in extremis (i.e., already “unfrozen”), nor does it allow for organizations faced with the prospect of having to “hang loose” for extended periods of time (i.e., staying “unfrozen”).
In other words, the beginning and ending point of the unfreeze-change-refreeze model is stability — which, for some people and some organizations, is a luxury. For others, internal stability spells disaster. A tortoise on the move can overtake even the fastest hare if that hare stands still.It gets more interesting for organizations if the people doing the unfreezing and refreezing are different than those making change. Then this is very powerful insight.
October 30th, 2006
I heard recently “to go public these days you need the unbounded potential of the dot-com days and the solid fundamentals of large company”. That comment crystalized several disconnected snippets of conversations over the past several weeks. During lunch a CEO was said his company is doing 20M annual booking but where should it go next? Sarbanes Oxley has raised the bar to 60-70M but even then unless you have a strong quarterly growth and good visibility into future quarters it is tough to get out.
So where are the exits? The larger companies are acutely aware of these facts. Coupled with the presence of a large number of companies with similar technology, it seems like for the next couple of years tech will be a buyers market.
September 1st, 2006
