Greek Complexity

Nuance

Someone on my FB feed shared this post today:

I had two reactions to this. Interestingly, they are contradictory to each other.

My first reaction was a head-slap, face-palm, eye-roll at the lack of nuance in the post. One, none of the incumbents except for Blockbuster is dead. So stop saying they were each "killed" by a tech firm. And two, is lack of customer-centricity the only reason for the troubles faced by the incumbents? Really? And three, is it a foregone conclusion that Uber is a long-term viable business (in its current incarnation)? I'm not so sure.

My second reaction was, "That's just silly. All five arguments as stated here are about price. Not customer-centricity." Which of course replaces the author's single-cause "analysis" with one of my own. Make of that what you will.

Things that make me puke

Yesterday I read, The World’s Longest Recruiting Process: Josh McFarland is Joining Greylock as a Partner. My pukoradar began to boot up at the sight of that headline but I ignored it. Then I came to:

TellApart applied cutting edge data analytics and predictive modeling to the field of marketing. In the time it takes you to blink — literally 100 milliseconds — TellApart’s technology can respond to an impression in an ad exchange, crunch thousands of model features and serve the right ad at the right place and the right time. And it does this hundreds of thousands of times per second, with great insight and accuracy.

Really? This is the best you can do? I'm by no means the first person to point out the inanity and insanity of absurdly smart people reduced to doing this. I also freely admit that I used to be one of the flock myself, being fascinated by the potential for algorithmic ad placement, trading, optimisation, and so on (and I still am fascinated in some ways). The parallels with, say, high-frequency trading are obvious and have already been seized upon.

Then today I read, Methbot: a $3M-$5M/day video ad-tech fraud:

White Ops, a security firm, has published a detailed report on a crime-ring they call "Methbot" that generated $3M-$5M by creating 6,000 fake websites to embed videos in, then generating convincing bots that that appeared to watch 300,000,000 videos/day -- running virtual instances of various browsers (mostly Chrome) on virtual machines running MacOS X, from a huge pool of IP addresses that they fraudulently had assigned to US locations, deploying clever grace-notes like limiting access to "daylight" hours in their notional locations; simulating mouse-movements and clicks and more.

It's bad enough that prodigious brains and huge amounts of capital are being deployed towards optimising digital ads. But what stories like this second one tell me is that even the fundamental premise of digital ads is invalid (let alone trying to optimise it).

Page views? That's so 20th century.

Clicks? Meh.

Click farms? Old hat.

Automated click farms? Yawn.

Measurement "errors" and over-billing? Surely. Not.

And so we arrive at purely simulated, never-even-existed views and clicks. Ah, yes, let's do that.

A race to the bottom.

Surely we can come up with something better than this? A system that actually creates real value? We're missing the woods for the trees.

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I'm sure Josh is a perfectly wonderful human being – and the Greylock blog post goes on to tell you so in nauseating detail – but that's not really what set my pukoradar off.

AT&T-Time Warner and competition policy

1/4 Proposed AT&T-Time Warner deal illustrates once again how oligopolistic US business tends to become. Not a problem IMHO as long as…

— Murli Ravi (@murli184) October 23, 2016

2/4 …real competition possible. In A) networks-effects-based firms which B) become dominant over time, A & B both vital, hard for new rivals

— Murli Ravi (@murli184) October 23, 2016

3/4 to fight incumbents. That's why, say, retail, energy, real estate and on-demand taxis don't merit the same level of anti-competitive

— Murli Ravi (@murli184) October 23, 2016

4/4 scrutiny as say, AT&T-Time Warner, MS Windows, big airlines and Facebook.

— Murli Ravi (@murli184) October 23, 2016

You read that right. I don't think Uber merits anti-trust scrutiny (yet) and do think Facebook does.  There are plenty of competitors as well as business model reasons that act to keep Uber on the straight and narrow (mostly). Facebook? Nope.

Does this mean Uber, Airbnb and Amazon will never need to be monitored? Of course not. Do I mean to imply that Facebook is in fact acting in an anti-competitive manner? No, because I don't know.

Also, does my highlighting Facebook imply that all other social networks merit the same degree of scrutiny? No. Or at least, not yet. Snapchat, Twitter, Pinterest and arguably even WhatsApp don't qualify as dominant even though they obviously have huge network effects.

Another thought to keep in mind is that competition regulators might be better off cooperating with each other, sharing information and formulating regulations holistically, rather than trying to regulate companies in a patchwork manner. The cost of not coordinating efforts is that some of the most sophisticated, fast-moving companies play off regulators against each other. Companies that fulfil my conditions A and B above have long since become pan-national and regulatory actions taken at the national level cannot possibly be sufficient.

I do acknowledge that what I am saying is much easier said than done because of conflicting objectives such as the desire to build up national champions at the expense of external interlopers or differing cultural values on issues such as consumer privacy and wage policy. That's without even considering the cost, time and expertise involved in coordinating large multi-agency efforts.

Then again, if, say, multiple national police agencies can cooperate on criminal investigations spanning multiple jurisdictions, then that could well offer a template for anti-trust agencies to explore.

The next big opportunities from the next Silicon Valley

This piece first appeared on Ask(Your)VC.

That title isn't clickbait: I'll tell you upfront that I don't believe that there is any such thing as the Next Silicon Valley. Apples to apples comparisons across regions are mostly meaningless. Now that that's out of the way...

I was invited to speak on this topic at dmexco earlier this month, Europe's largest digital media conference and expo, with 30,000 attendees. The discussion was moderated by Terry Kawaja of Luma Partners and my co-panelists were Marvin Liao of 500 Startups and Stefan Gross-Selbeck of BCG Digital Ventures. The conference organisers have produced a slick recording of the session here.

Although I don't believe in notions like the Next Big Thing, I do strongly believe that there is globally unparalleled potential in what I term Emerging Asia.

South and South-East Asian countries are a few years behind Japan, Korea and China, and still have poor broadband coverage on the whole, low digital media spend, low incomes relative to the developed world, etc etc. Yet these same marketes contain in aggregate close to 2 billion of the world's people. Their median age is a mere 26 and the fastest growing demographic is aged 15-24. The top 5% wealthiest people in India have the same aspirations and spending power as the average Western consumer -- while also easily outweighing their Western compatriots in terms of sheer numbers.

People in Indonesia and Philippines are far and ahead the world's leaders in terms of time spent per day looking at screens. Not US users, not Koreans, not even the Japanese come close.

Attitudes to entrepreneurship are changing and no one bats an eyelid at the idea of launching a company in Emerging Asia that targets Western businesses as clients.

The number of VC firms actively seeking to make Series A and B investments in Emerging Asia of between $1 million and $10 million (i.e., well below Silicon Valley norms) is less than 30, possibly less than 20.

Singapore, although small and far wealthier than its neighbours, sits right in the centre of all this activity and is a natural hub for start-ups to set up regional HQs, access financing and, at a later stage, become a venue for exits.

Finally, not all of this is mere potential: over the past 6 or 7 years, we have seen about a dozen technology companies hit the magic billion-dollar valuation mark.

Isn't all this mind-boggling?

It's clear that these markets are massively attractive though not without their risks and obstacles. We discuss some of this in the video.

White knights and soft landings

Photo credit: Jon Rawlinson

We need more soft landings in Singapore, India, and other markets in SE Asia for start-ups that fail to fulfil their initial promise. Why? So that more potential entrepreneurs and start-up employees will actually take the plunge.

I'm a little late to the party but I just realised that Brandscreen, an ad-tech company that went into administration at the end of 2013, was bought by a US ad-tech firm last month. I've been told that Brandscreen went through a raft of problems prior to its entering administration but I also know that they had some great assets in their staff, intellectual property and client roster.

It's a virtual certainty that none of Brandscreen's shareholders made a profit on the sale to Zenovia, but that's not the point. We need more of these fall-back options which will allow start-up founders and employees to dust themselves off and live to fight another day, whether that be at another start-up or at a larger organisation. Over time, prospective white knights will find that there are talented, motivated and cohesive teams, not just individuals, available to them.

Getting this started is the responsibility of everyone here -- senior entrepreneurs, investors, large tech companies, corporate executives, everyone. Ultimately, we will all benefit from increased start-up activity and greater market depth, so it's up to us to make it happen.

Let's do it.

WPP leads Series B In Percolate

The size of the investment was under $5M according to one source. Content-related businesses have started to become ever more popular in recent times. Witness Buzzfeed and the like.

More: http://www.mediapost.com/publications/article/220359/wpp-takes-stake-in-percolate-expands-social-marke.html

A few other tidbits from Mediapost:

WPP was also recently rumored to be eyeing social media analytics startup Simplify360. The Bangalore-based firm already boasts about 100 clients, including Revlon, Target and Yamaha.

The social-marketing business is bigger than ever. This year, advertisers are expected to pump nearly $12 billion into social networks around the world, according to eMarketer. That’s 25% more than marketers spent on social last year.

Analysts, however, say the social management market is ripe for consolidation. In fact, over the next 24 months, the number of social-leaning vendors and agencies will shrink from roughly 200 to less than 24, according to Mukul Krishna, digital media industry analyst at Frost & Sullivan.

“Consolidation is definitely needed -- and definitely happening,” Krishna recently told Social Media & Marketing Daily. “The market is extremely fragmented, and filled with vendors and agencies promising to manage everything, which is B.S.”

How Real-Time Bidding Will Influence The 2016 Election — And Change Don Draper's Job

Snip: "Real-time bidding (RTB), a method of selling and buying online display advertising in real time, is one of the fastest growing areas of digital marketing. According to the International Data Corporation, worldwide real-time bidding-based spending is expected to reach $20.8 billion in 2017 — which is a big jump from the $3.2 billion spent in 2013. Jeff Green recently talked to us about how programmatic buying and RTB are influencing the industry, from the 2016 elections to print ads — and how Don Draper's job is about to change."

More: http://ift.tt/1hmMv5o

This is an auto-generated post from my reading list.

The Internet, as predicted in 1981

Prescient stuff.

 

Taking enterprise social media to the next level

I am very pleased to announce that my firm has invested in Unmetric, a New York-headquartered company that is the leader in providing competitive intelligence on over 10,000 global brands that use social media. These three pieces contain further details.

We invested in Unmetric because of our answer to this question: how are large enterprises using social media within their broader marketing and customer service strategy?

In our view, the first stage of enterprises truly engaging with social media was when brands formally started listening to what customers were saying online, using such tools as, for example, Radian6 (bought by Salesforce for $326 million in 2011).

The second stage of brands rapidly coming to grips with social media was when enterprises began reaching out to customers to build relationships with them, Buddy Media being one of the tools used for this (also acquired by Salesforce for $689 million in 2012).

What Unmetric does is then the logical next step: benchmarking your brand against the competition and figuring out on a daily basis what, when and how to post online for your brand to achieve the best engagement. As far as a time-poor digital marketing manager or agency researcher is concerned, it's like having a super-human team of data scientists, market researchers and software engineers all working together to deliver key insights -- not just metrics -- in real time.

But let's not deal in abstractions. Here's a typical report prepared by Unmetric, this one analysing the US telecom industry. See slides 9 to 13 for examples of the kinds of insights Unmetric provides its customers.

The Telecom Industry on Social Media from Unmetric

 

Customers generally see insights like this not on static reports but on a personalised dynamically changing dashboard, on which they can click through for further details.

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Update: I forgot to mention that they're always on the lookout for smart and fun people to join the team. Please spread the word.

Whither Twitter, whither media agencies? (Bonus feature: a conspiracy theory!)

How scared are media and advertising agencies of this development (PDF; 384 KB)? I'd be petrified if I was them.

If you don't have time to look at that document, here's the two-sentence snapshot: Mondelez (the renamed Kraft snack food group) has done a deal with Twitter where Twitter staff will be seated in four Mondelez offices around the world, helping Mondelez with their real-time marketing by providing real-time insights, custom research and so on, in return for a minimum ad spending commitment. In effect, Twitter has turned itself into an agency.

Mondelez announced a similar deal, though more limited in scope, with Google back in May.

Now, before anyone starts jumping up and down with objections, I know that this isn't really a replacement for agencies. But it is a significant development that agencies and advertisers will be watching, and for Twitter itself as it positions itself for an IPO. If large digital platforms like Twitter and Google are able to directly provide custom services to large brands, where does that leave agencies?

On the other hand, the agency business model has historically changed so much in response to market developments that I have no doubt the smartest ones out there will continue to reinvent themselves and thrive. For example, when online advertising first started to get going, a lot of agency unbelievers thought that the Internet would disaggregate agencies entirely. Exactly the opposite happened as agencies started online trading desks to buy ad impressions on clients' behalf, started doing creative and copy for digital ads, designed online campaigns and so on.

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For whatever reason, I couldn't find mentions of this news online when I checked a few hours ago, not on FT.com or on any other website. Gentlemen, start your conspiracy theories now.

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Update: Right, here's the FT article now. Mondelez strikes deal to chew into Twitter’s social media knowhow