DigitalSpritz

Standards Coming for Buying Digital Media Ads?

 

Buying advertising has always been a bit of a shot in the dark. 

 

Digital media ads haven’t improved things much.  But a new initiative announced last week by the Interactive Advertising Bureau, a cooperative non-profit comprised of more than 375 leading media and technology companies who are responsible for selling 86% of online advertising in the United States, may improve things.

 

The Interactive Advertising Bureau has engaged Media Bank, a leading think tank determined to quick march all media buyers towards a cross-platform efficiency, to see if we can set some common advertising standards for E-business.  As might be expected, there aren’t even uniform standards on what the elements in interactive advertising are called. 

 

You’ve certainly heard the old cliché in the advertising industry that half of all advertising money is simply wasted – and nobody can ever reliably figure out which half is wasted.  That dilemma lives on in trying to calculate the exact impact of an online banner or a video roll – whether it appears on the CNN homepage or the MySpace page of a 13-year-old obsessing on the latest download from Pink.  And just try putting a reliable marketing value on a product placement in a straight-to-DVD movie.

 

Exasperated corporate communicators often compile a rough and dirty cross-media traffic report to appease their bosses.  But a sales campaign’s impressive report of multi-million “impressions,” for example, may be nothing but a sloppy and unreliable tally totaling up the alleged and inflated circulation of print publications ... plus the dubious audience numbers that broadcasters brag for a program on which a televised commercial might have appeared ... plus the so-called “eyeball” projections that web publishers claim when their hidden meters and snares detect a webpage visitor.

 

In the end, measuring techniques for advertising in digital media are still as flimsy as those in other, more traditional media – although what numbers there are come more instantaneously online. 

 

At its most fundamental, however, no one knows exactly what really has happened whether a reader has opened a print edition of Forbes to a Lexis ad or “viewed” a MySpace website pushing a Wal-Mart holiday guide – let alone whether the consumer has even truly paid attention to the ad.  We humans have such a facility for tuning out the most outlandish distractions.

 

Of course, you can certainly and reliably log things like how many people actually opened a digital online “page” on which a banner is running – whether it is a corporate website, the CNN website, or a YouTube page featuring a cat watching squirrels.  And you can set real digital tripwires so that the folks that click through the banner to dedicated websites are reliably counted. But in the end, client comfort will come the old fashion way – when sales go up and revenue flow swells.

 

So keep an eye on both MediaBank and IAB’s E-business subcommittee to see how this all turns out.  That old challenge about wasting half of the ad dollar comes from the late, great Philadelphian John Wanamaker who founded one of the first and greatest department stores – long since absorbed by Macy Inc. which also now principally does business as either Macy’s or wholly owned Bloomingdale’s. 

 

By the way, Macy’s online business at www.macy.com is quickly becoming its strongest sector, according to its February financial reports.  But if old John Wanamaker, the father of modern advertising, were still alive, he would still be pounding the desk and demanding to know which half of his money is being wasted by the damned on-line ad department.

  

-- TOM GOFF

 

 

The Next Debates Will Be in 3D ... Guaranteed.

So, it's been a few weeks (again!), but here's part two of our discussion on 3D media.  The big news today is that Digital Cinema Implementation Partners (DCIP), a consortium of the three leading motion picture exhibition companies in the U.S., has inked a deal with five big Hollywood studios.   The deal?  Well, it's a little complicated, but it basically amounts to having the studios help fund part of the per-location cost of converting movie theaters to digital cinema systems.  It's fair to have the studios help fund the conversion costs because they save a bundle in the move to digital cinema, as it allows them to distribute films electronically, rather than having to make a physical copy -- called a "print"-- for each location.  You can now basically upload a film to a theater when you're ready to distribute it, just like posting videos on YouTube. 

But, why, you ask, does this make Presidential debates in 3D a certainty?  For three reasons:  1) Digital cinema is necessary for 3D -- and it costs nothing extra to install 3D capabilities if you're already doing a digital upgrade;  2) the parameters of the deal mean that the number of 3D-enabled theaters in the US and Canada will jump from about 900 today to 14,000 by 2012, representing 30% of the screens in those markets; and 3) studios have a heck of a lot of 3D films coming out over the next year. 

Studios are making more films and pushing for more screens because 3D and large-format films take in more box office:  Journey to the Center of the Earth, a recent 3D release, brought in 65% of its gross ticket revenue from 3D screens -- which represented only 25% of its distribution.   

And then there's the DVD market.  The Blu-ray format already supports 3D.   But there aren't that many 3D-enabled TV's out there.  How long do you expect that situation to last, given that theatrical ticket sales represent only 14% of a successful film's revenue?  (DVD sales represent 60%, television broadcast rights represent another huge chunk). 

So, studios are pushing for more theaters, and more available content -- including all that fancy sports content with Michael Phelps that we talked about earlier -- will put more pressure on consumer electronics manufacturers to make devices available.  And with companies like 3ality Digital making 3D broadcast possible over 2D pipes, it's guaranteed that the 2012 versions of John McCain and Barack Obama -- or Joe Biden and Sarah Palin -- will be arguing in 3D, for your political pleasure.   It's up to you to decide which candidates would fare better in living, 3-dimensional, color.  Leave your bets in the comments section, please. 

Michael Phelps in 3D: Sooner than you think.

So, I've seen the future, and it is Michael Phelps -- in 3 dimensions. 

I was lucky enough to visit the offices of 3ality Digital a week or so ago.  These are the folks who brought you U23D.  I caught that movie on an IMAX screen here in LA, and when Bono reached for me, I got a little breathless, but that experience was nothing like seeing it in 3ality's digital screening room.  After The Dark Knight's raging success, coupled with IMAX's pending transition to digital projectors, there's no doubt that large-format screens and 3D will soon become commonplace at the multiplex. 

But on your television set?  Well, turns out that's just around the corner, as well.  3ality showed me their broadcast set-up.   The camera details are way too complicated for me to explain -- except for the fact that that the device was much more compact than I expected, able to be moved around fairly quickly and flexibly.   The 3ality folks put me and another guest in front of the camera, facing a flatscreen 3-D television from Hyundai.  They handed us each a pair of polarized glasses and hey, presto! we appeared in 3D.  I jumped a little, actually.  (Note:  people look better in 3D.  You lose that flattening and fattening effect that 2D television gives you.)    No fancy pipes, no special broadcast tunnel.  Just the regular stuff, paired with the camera and the television.

Lest you think I'm a lone voice in the wilderness, read my geek crush Mark Cuban's Blog Maverick entry, taken from an address he delivered to the FCC a few weeks ago.  And given his other passion -- owning sports teams -- Mark should know this:  sports is the "killer app" for 3D television, the thing that's going to drive it into mainstream use.   Hence, the need for a portable camera -- how else are you going to get up under Kobe when he dunks? 

Hyundai is already shipping the televisions in Japan, where they are broadcasting an hour of 3D programming a week.  Not much, maybe, but it's a start.  But the big breakthrough will happen here when ESPN Zone sets them up in their sports bars.  Once the fanboys -- on in this case, the fangirls -- get a gander of Michael Phelps in 3D, there's no going back. 

Why Steve Jobs' Health Matters

First of all, dear readers, apologies for the long break.  Both Tom and I have been making major changes in our day jobs, which has resulted in a bit of disruption in our writing schedules.  But we're back, in full force, with many things to say.  Be warned. 

I have to start this post by saying that, in case you haven't noticed, I am an Apple junkie.  This blog is written on my beloved 12" Powerbook, one of five Macintoshes in various states of use/repair in my home.  I am the proud owner of a second-generation iPod (at last count, there were also five iPods in my home), as well as a newly-minted 3G iPhone which, well, sleeps with me at night. I set up my first home Airport network in 2000, when it was stilll a novelty that I could access the Internet in my backyard:  the neighbors came to gawk.  I've been a devotee since I hauled my first Mac -- a Classic-- home by the handle in the top of its case, to work on my SimCity metropolis, which is still preserved on a 3-1/2" floppy disk somewhere.  Yeah, I drank the Koolaid.

And whether or not Steve Jobs is healthy is very important to me.  Because Apple is not a technology brand, it's a fashion brand.  And the heads of fashion brands are always crucial to their success in the market. 

Now, Mr. Jobs and the Apple Board may disagree, taking the point of view that Apple is a technology company -- perhaps the world's premier consumer technology company, as a matter of fact.   But a great deal of Apple's current leadership is based not on true technological innovation, but on vertical market integration, and on style. 

Case in point:  the iPod.  There were certainly digital music listening devices before the iPod arrived.  But they weren't as sexy, and filling them with music required a certain facility with "ripping" software.   Apple's genius lay in making the music easy to access, assuaging the music industry's fears of piracy with long-extant DRM technology.  Once it had a lock on this vertically-integrated market, Apple continued to rev the devices, so that having the latest and hottest became a mark of well ... style. 

Now, I have to admit that there is some true technological innovation going on in the iPhone:  that fancy Minority Report touchscreen is a wonder to behold.    But there are limitations as well - email that doesn't leverage the capabilities of an Exchange server, voicemail that doesn't work with my Bluetooth headset (a true problem in now hands-free California).  RIM's long-existing Blackberry doesn't have these issues.  But it's not as sexy, not worth a four-hour wait in line just to be one of the first (and for a while, the only) people to get their hands on the device.   And I haven't even talked about my beloved Macs, which can cost as much as 50% more than equivalent Windows machines. 

So, who exactly is the source of all this style?  The candy-colored original iMacs, the flat-as-an-envelope MacBook Air, the iPod that clips to your lapel?  As far as the market is concerned, it's Mr. Jobs. 

Remember Gianni Versace?  He of the Medusa-head buttons and British-Empire-worthy shoulder pads?  His murder sent shockwaves through the fashion world, and damaged his company virtually beyond repair.  Granted, Versace at that point was a much smaller, private and probably less-distributed company than Apple.  But it was iconic enough to inform popular culture and to define status in the way that Apple does. (Don't believe me?  Watch Showgirls.) 

The market worries about Mr. Jobs the same way.  Like it or not, he's an icon of style, a symbol for the fashion trend called Apple.  (No "Computer" in the name now, fittingingly.)  Even his trademark black turtlenecks and jeans have mythic status. 

Perhaps my nephew showed it best when I asked him what kind of computer he had.  "A PC," he said.  "I hate Macs."    But he wouldn't be caught dead without his iPod.  It's just not cool. 

No, He Didn't ...

So, it's not all punditry and pedantics here on DigitalSpritz -- sometimes we have to entertain you a little.  And today's offering is a true geek horror-fest, as Tom blends his 3G iPhone. Shudder and enjoy:

iPhone Mania, v.2.0

Well, in less than 12 hours, the first 3G iPhones will go on sale in the U.S.  (Apparently, they're already available in New Zealand).  And the geek universe is going crazy.  Techcrunch reports that some enterprising souls have already unlocked the new iPhone 2.0 OS.  Look for iPhone Pimping to follow quickly.  As a matter of fact, the whole front page of Techcrunch is suitably devoted to iPhone hysteria, although Mashable is suitably restrained with only 4 stories, matching GigaOm.  Surprise of surprises, the mother-of-all-geek-toys-blogs, Engadget, has only 1 story -- so far.  I predict at least 15 at daybreak tomorrow.   

Apple released not only the new operating system for the phone today (and I use the term "phone" loosely), it also release the iPhone Apps store, featuring a slough of toys, games and some actually-useful applications for the phone.   It's like Christmas on the Interwebs. The ratings and reviewing frenzy has started apace.

Where will I be tomorrow, you ask?  Well, not standing in line, actually.  I plan to fully embrace the Tao of the iPhone 3G and join my eager tribe members, but actual life obligations preclude the camping-out actions, at least for a few days.  I'll just have to read the blogs and live vicariously for a while.  The mania, however, has driven me to one, perhaps inevitable, conclusion:

It's Steve Jobs' world, and we just live in it. 

UPDATES: News from our Digital Universe

DIGITAL PAPYRUS – The scroll is not dead as a reading medium.  Anne Eisenberg of the New York Times reviews the latest evolution of the electronic book, the roll-up Readius, made by a Dutch company, Polymer Vision … DUTCH TREAT – While the U.S. is going cold-turkey and switching by February of next year from analog to digital TV broadcasting on all full-power local stations, the Netherlands is moving more gradually – 73 percent of Dutch TVs are still analog, according to reporter Robert Briel, reporting for Broadcast Band TV News, published in Cambridge, UK – although a quarter of the population already watches TV on their desktop and laptop computers … VIRTUAL “LIFE” IN INDIA – Interest inside India in the on-line world Second Life (who dares call it a “game”) is surging, says V.K. Rishi in the Economic Times, India’s largest financial daily.  The world’s biggest steelmaker, ArcelorMittal, founded in India, recently held a shareholders’ meeting in Second Life (and now you can buy that company’s shares there in “Linden” dollars) … ON-LINE MUSIC? PRICELESS – The Radiohead experiment with pay-what-you-want software isn’t winning many followers among established artists in the music industry, according to Swati Padney, writing in the Los Angeles Times.  Mostly, the fans just rip off the tunes for free.  But newer bands, which have been giving away their music anyway in the local coffeeshop to get a proper buzz going, are happy that they occasionally get a dollar or two in revenue and worldwide “exposure” on the web.  Software developers at Topspin Media have even designed a new platform, now in beta test, that any artist can use to collect those pennies.

■ Tom Goff

Brave New World of Video Surveillance, Part 2: YouTube

Well, it's not supermarkets and airports:  It's YouTube.  A Federal judge ordered yesterday that YouTube turn over to Viacom its records of every single video watched on the service.  The action is part of Viacom's ongoing copyright infringement lawsuit against YouTube. 

Chris Albrecht at NewTeeVee has the details.  Obviously, individual privacy concerns are a major issue here.  On the other hand, don't we all realize that, while we're watching YouTube, YouTube is watching us?

My friends the Electronic Frontier Foundation are up in arms over the ruling.  It remains to be seen whether Google/YouTube will have to comply.   In the meantime, I'd suggest you keep any viewing of Viacom-owned content -- as well as all those sexy girlie videos -- to a minimum. 

Brave New World of Video Surveillance

Digital media isn’t always entertaining. Sometimes it has work to do. Smart digital video surveillance is beginning to shake up three real-life market sectors where dumb analog cameras have been mounted for years: public spaces like airports and airbases, colleges and schools, and retail – which include banks and those ubiquitous quick service restaurants and stores.

We spoke with research director Stan Schatt at ABI Research about his recent study “Watch this Space” highlighting the coming boom in digital video surveillance software and equipment.

______________________________

Why is ABI looking into video surveillance?

We believe in connectivity. The focus at ABI is everything wireless. Surveillance video is rapidly moving to wireless technologies as are we all, so that is why it is interest to us. It is an emerging technology that will fundamentally change global consumer and business markets.

Surveillance video isn’t exactly new.

Video surveillance systems have existed for many years. But until recently, extracting useful information from them was labor-intensive, time-consuming and tedious. Now, the quickening transition from analog to digital video has made it possible to use software for detection and analysis. This can free humans from the drudgery of slamming through hours of tape, while improving accuracy and the ways video can be use – ways that were just not possible before. I am particularly excited by the potential of digital video for analyzing and improving business processes. Once the retail sector sees the potential for business analytics, budgets for video surveillance, which now mostly come from the IT department, will begin to flow from the much more generous pockets of Marketing.

Video surveillance software was the particular focus of your study?

Yes. Because we can effectively massage digital records, the potential for intelligent use of software is enormous. Already the link between current physical security applications and what wireless, digital video and its movie-like rich images can do is dramatic. There are many small software companies in this market, and some big ones such as IBM, which has released software that is largely platform-agnostic, increasing pressure for others to follow suit. While most systems today are sold to end-users, IBM Global Services sees potential in a managed service model, and it would not be surprising to see HP jump in as well, particularly following its EDS acquisition. There are a number of smaller players who impress. Object Video, which was founded by some DARPA types, stands out with 800,000 licenses. Some other small companies are quickly becoming familiar names: Axis Communications on the IP-based camera side. PMSC of South Carolina on large storage.

How about airports?

Airports are an obvious application, but you can set the rules with this stuff if you have digital images and digital storage and let it do much of the work. If a bag is left unattended for a number of minutes, the software can quickly, even automatically pick that fact up and set off an alert. If a passenger in an airport corridor suddenly reverses direction or makes an abrupt approach to an exit when the standard flow of traffic across is in the opposite direction, towards an entrance of gateway, there can be an instant alert and intervention. Smart software can also trigger mechanical consequences – for example, instantly locking down escape routes in an airport when an individual is behaving erratically or takes off at a run.

Any human monitors needed in that digital future?

There’s always room for human judgment. You will see more large institutions – corporations, college campuses – setting up much more elaborate video monitoring centers that go beyond alarms and observation, allowing a shift leader or incident commander to react to what they see happening … or about to happen. Banks already do that. The metadata procedurals the software designers are playing around with – there are about 13 different detection directions, by my last count – include any number of different characteristics.

What are the most demanding of these?

The most ambitious are automated face recognition programs that banks can use, say, at an ATM – not just to identify bad guys as criminals but to identify you so no one but you can use your card. Smart cameras can also survey the parking lot and tip the central control room to any break-pattern activity, such as leaving a car too long in a particular space … or moving it to a space where it doesn’t belong.

You said in an earlier interview that it reminded you of the futuristic film, Minority Report.

Yes. All this, of course, raises profound questions of civil liberties – and they play with those issues in the film Minority Report, which has Tom Cruise intercepting criminals before they commit their crimes. We have a pretty conservative court system at the moment, so I don’t think you will find much support there in blocking the initial deployment of these software recognition and tracking systems. And who knows what classified smart video applications are already in use in the skies above Iraq that will be coming our way?

What about China? Have the Olympics created any technology leaps there?

I expect there to be some advances, using the Olympics as an excuse for upgrades, but nothing dramatic. The China market is attractive, but a continuing concern, particularly on software, is the potential in that nation for software hacking which is right down doing major damage to the mobile phone market. Most of the video surveillance equipment in China right now is cheap analog stuff. On the other hand, they have no shortage of people in China who can roll the analog tape back and forth to find what they are looking for. Britain, which began aggressively putting up outside analog video monitoring as far back as the IRA bombings twenty or more years ago, is now aggressively going digital. Most of the British equipment is installed and monitored by local municipalities.

Do you expect industry consolidation in the next year or so?

I do. The video surveillance area in general is so busy with new companies and small firms that I do anticipate some mergers and acquisitions. There are any number of products and platforms in the market, but very little interoperability yet. The camera companies are also trying to get together, but more by establishing common technology standards than on merging. Canon, Samsung, and Panasonic – not sure why there are all Japanese – are in some sort of dialog on tech standards. North American camera manufacturers tend to focus on the high end. Lumenara from Ottawa is one of those with an 11 megapixel camera coming out soon. You could shoot a respectable motion picture or TV show on a camera that advanced. It’s broadcast quality.

A video stream that rich must take up a good deal of storage.

It does. But once all that information in storage, you can do some very smart things with it. Intelligent processing can begin right inside the camera itself. For example, the digital signal processing chips that are essential to advanced video are faster than ever. They are now able to put some fundamental video analytics into the chip itself. An Israeli firm, Mango DSP, seems to be making some remarkable progress to that end.

Where’s the quickest growth?

The steepest growth curves we see are in the government, retail, and educational sectors. Growth in the government sector is still driven by heightened security concerns since 9/11, of course. We are now seeing video installations in transport systems that keep an eye not only on external surroundings of the vehicles, but on the people inside – including trains and buses. There’s a popular trend to jump on board a bus after it crashes and then claim whiplash – so come cities are trying to add video to fight that. We’ve all seen the popularity of police video cameras that capture not only police responses, but the provocations that precede the response. The ports are another area where very little of consequence has been accomplished.

How about education and retail?

The video market in the education sector has gone from a trot to a gallop since the campus killings at Virginia Tech – and elementary schools are also now adding video when they can find the budget to do so. Retail will take the lead, however. It just beginning to appreciate the possibilities of business analytics in all this. Retailers have traditionally low margins, so they are reluctant to take on equipment costs. But if some of this smarter software, backed up with smart chips, can tell them how customers respond to a display and what they like, it justifies the cost to elevate video surveillance equipment and systems – and reduce stock shrinkage by the employees and customers who are stealing them blind.

■ Tom Goff

Google, Family Guys and Chinese Walls

So, in light of the news about Google's deal with The Family Guy's Seth MacFarlane, a question that we geeks in the consumer technology business have been pondering for a while has reared its head again:  When does a technology company actually become a media company?  And in this day and age, should we even be differentiating between the two? 

For those who may have missed the headlines, Google has cut a deal with MacFarlane to create 50 2-minute "webisodes" titled Seth MacFarlane's Cavalcade of Comedy.   The shorts will be distributed to websites via Google's AdSense for Content distribution network.  Google's AdSense technology "scrapes" sites for demographic and content information, then serves up the appropriate advertising from its network.  Now, Google will be serving content as well, ostensibly well-targeted to websites where Mr. MacFarlane's fans congregate.

In part two of the deal, advertising will be paired with the webisodes, and Mr. MacFarlane will receive a cut of the ad revenue.  He's also been retained by some advertisers to actually create the ads that will travel with shows.  This is a nice deal for him, any way you slice it. 

For Google, the benefits of leveraging its technology to distribute content are obvious: it means more money in the already well-stuffed Google coffers.  However, it also puts Google squarely in the media business.  Eric Schmidt's statements that "Google is a technology company" are looking a little more disingenuous every day. 

Does it matter whether Google considers itself technology or media?  It definitely matters to the traditional media companies who have been partnering with Google.   As media becomes more and more portable, as audience moves slowly, but surely, to broadband pipes, and as guys in warehouses start bending long established artistic formats (we're talking about you, EQAL), these companies must ask themselves every day:  how do we innovate?    How do we compete with an entity like Google, with deep pockets and a head start on vertical integration?  Do we set about turning ourselves into technology companies?  (Mr. Murdoch, to his credit, started working on this several years ago, when he created Fox Interactive Media.)   And how does Google answer the obvious conflict of interest questions regarding distribution?  Whose media gets priority?  Google's media, or partner media?  Will Google be able to convince its partners that there's a Chinese wall between their technology and media businesses?  The Google algorithm is a carefully guarded secret, and history tells us that lack of transparency fosters suspicion, which augurs a bumpy road ahead. 

As someone who's been slaving in these trenches for a while, I have a few ideas about what some of these companies can do to smooth the path... but that's another blog post.  Or maybe a consulting assignment.  In the meantime, I'll look for Seth on the Internets and cross my fingers that in the midst of all the brouhaha, he's actually created something that makes me laugh.  After all, that's the point, isn't it?