Internet advertising: we aint seen anything yet

I attended a panel discussion recently on Internet advertising. The panel was an insightful and lively discussion on “What’s working, What’s not and what’s coming in Internet advertising”.

 

The moderator of the event was Tony Perkins, Chief Editor of Red Herring and founder of Goingon.com. The panel included heavyweight google and startups in this industry all vying for a piece of the pie. Gokul Rajaram, Product Manager of Adwords and Adsense at Google, Ujjal Kohli, Founder of Rythym New Media, Philip Kaplan, Founder and CEO of Adbrite, Jonathan, Founder of Socializr and a VC whose name I can’t remember now.

 

Here are some of the key takeaways and my analysis.

 

The boom in internet advertising is just beginning. Today the main spend on internet advertising is for transactional advertising which is basically e-commerce. We still haven’t seen companies spending on BRAND advertising on the internet, which is the main chunk of the spend on traditional media. For this to happen, demographics is key, without which it is very difficult to target the audience you want and think of a achieving an ROI. Hence the companies who can provide this will be king’s of this space. For ex: take a property like facebook, it can provide a potential advertiser who can for ex: run an ad for all male students in the age group of 18 to 25 who play college football! Companies who create a platform that will allow advertisers to do this will be king.

 

62% of content read by 21 year olds is generated by people who they know. This is a very challenging group to crack because they are generally numb to marketing or brand advertising for that matter. Hence brands are now looking to create content which users can interact with and getting young brand ambassadors of sort to create the buzz in order to penetrate into this hard segment. The internet and now mobile is probably the only way to reach this segment as they spend most of their time on the internet and rarely ever watch TV (You get your favourite shows now also on TV..and soon on the mobile). Such users want their IM, they want to be incharge, be seen, create and share content and take things mobile. This poses are very interesting challenge for advertisers.

 

An example of content that such users watch is silly videos. YouTube is the 15^th most popular site on the internet when I last checked. And interestingly not just young users, but everybody watches such videos. Hence embedding ads in videos, games (mobile, MMORPGS etc) are the next thing to look at. The challenge though when selling this to a brand advertiser is that they are very skeptical about where they will put their brand.

 

An interesting prediction make by one of the speakers was that, the mobile which is the 3^rd screen in our lives today will grow to twice the size of internet advertising today! That is a bold claim to make, but when you think of the number of mobile phones out there today (1 billion and growing like crazy), it’s not hard to fathom this.

 

Once again in this space, demographics are crucial. The operators hold this information today and the company who can rally these guys to create a business model and provide this as a service to advertisers will once again be king.

 

 

bay area or gay area?

I recently witnessed THE most outrageous parade i have ever seen in my life! The SFO gay parade!!!

and man i have never seen such open, diverse and (i can't believe i am using this word) vibrant! people in my life! and not to forget, all of them absolutely proud to be gay!

dont believe me? Check out some outrageous snaps here!

http://www.flickr.com/photos/66262504@N00/sets/72157594187940513/

and some really funny ones too! like little girls carrying signs which say "I love my mommies"!:)

the FUNNIEST of them all was the DESI gay community!!! maan i just remember a line from the russel peter comedy where his dad says "Indian men cannot be gay!" that group just cracked me up! Unfortunately i ran out of battery by the time they came on and cold not take any snaps of them..i just went trigger happy as soon as the parade started cause all em them were worth to be on camera!

enjoy the snaps:)

Outsourcing to access top talent

The US is a mature market when it comes to outsourcing. Outsourcing and off shoring is not about cost any more, it's about access to talent. The challenge for companies today is to come up with a coherent strategy that uses off shoring to get access to the best talent, wherever in the world it exists.

One of the main reasons for this is that hiring and retaining talent in the valley has become a huge problem for many companies. To make things worse, over the last 5 years there has been a 33% decrease annually in the number of computer science graduates in the US.

An indication of this is the surge of the number of companies looking to hire developers, architects and project managers. With good VC and investor confidence, the open source phenomenon making technology available at lower costs and a strong economy, startups and entrepreneurship could hit a feverish pitch in the next couple of years.

All of this spells an opportunity for a company that can demonstrate a value proposition in the area of software development services.

India currently is the leader. How do the other countries stack up in comparison?

Well China is India's biggest competitor and will be a major force in the next 5 to 10 years. With the government setting its sights on improving english education right from primary school levels (which today I believe is the biggest stumbling block for China), China will be in a position to compete for a major chuck of the software services market. For now though, with only 3-4 companies with 500+ people, it really can't compete with the Indian powerhouses.

You also have Russia, Brazil and eastern European countries such as Ukraine which I have seen coming up as a good off shoring destination. Russia is still bogged down by its rules and regulations, and Brazil by its language (Portuguese being the main language currently). Hence India remains the clear leader and will be challenged by China in the coming years.

So coming back to my point which is that there is a clear opportunity in the outsourced software development space with companies looking at outsourcing today as a way to access the best talent..and the challenge is to understand the customer needs and build a value proposition around that.

If any of you guys are interested on this topic, just leave a comment and I can share how that value proposition can be built.