If you haven’t been following the fight that has been brewing between Amazon and publishers over the profit of Kindle ebook sales, author Charlie Stross has a great breakdown of it here.
Charlie nails the point home – this is all about profit.
Amazon is collapsing the supply chain and the publishing houses see the writing on the wall. Of course they didn’t have to look any further than the music industry to see how things might play out. In that industry, Apple’s iTunes, became the number one retailer of music in less than 5 years putting them in a position to dictate pricing and promotion to record companies that had been used to calling the shots.
More to the point, the change to digital consumption of music caused most record companies to shrink to just a shell of their former size in order to retool their cost structures to meet the realities of declining revenue and unit profit.
So the big question on everyone’s mind is: will what happen to the music industry happen to the publishing industry?
I think so.
Amazon’s Jeff Bezos recently revealed that for every 10 print books sold, Amazon sells 6 Kindle ebooks. Pretty good for a new format, but it’s even more impressive when you take into account that those sales are on an estimated 2-3 million Kindle user base.
If these number are correct, the ebook revolution could be even faster than the iTunes revolution. Now that Apple has entered the ebook game with iPad and ITunes, I am betting that book sales will tip digital inside of three years.
If I’m right then publishing houses need to reinvent themselves fast and become experts on creating, selling, and marketing digital content on the Internet.
Why? Because like iTunes, centralized distribution means centralized channel promotion. If there are only one or two distributors left in town then everyone is going to be fighting for the limited promotional areas that exist within their channels. This is exactly what happened with record labels. For a solid two years, while album sales were in free-fall, the only online marketing move most record labels could fathom was securing a tile on the home page of the iTunes music store. And since the iTunes home page is only so big, you can imagine how long labels had to wait to get their shot at it.
However, if you know how to drive buyers into the store to buy your product, then you are not beholden to the distributor for promotion. This is why its critical that publishing house 2.0 becomes an expert with blogs, social media, search, email, and internet marketing in general. These are the new marketing tools of the trade.
Let’s hope that publishing houses are reading the music industry’s history books.
Flash is just taking a beating this week. Now it turns out that the technology has a huge carbon footprint when embedded in web pages as ads. The study below seems like another great reason for the Internet Advertising industry to move away from using Flash and towards open standards based Ads.
It’s going to take a well skilled ninja to untangle this knot.
The iPad is out. Jobs and co. did their usual great job of building the pre-launch excitement and then delivering what looks to be a revolutionary product.
Whether or not you’re a buyer, the iPad is going to have some very big ramifications for some product categories, industries, and the web.
One industry that is going to be immediately impacted is “web design”.
Unlike its cousin the iPhone, The iPad is largely a media consumer. It has no camera and it was more than chance that Steve did the demo sitting in an arm chair. That’s because the product is designed to tap into the casual media consumption that the iPhone fosters with it’s form factor.
Speaking of the iPhone, I read more of the New York Times and more Facebook on my iPhone than I ever did on my laptop. This is a huge behavior shift for me (and I know others) that I attribute mostly to one thing: a vertical screen I can use while lying down.
Web pages are not really pages
This is where web designers come in. Ever since the first web “pages” were published in 1994, designers have been trying to trying to fit a square peg into a round hole as they applied print design maxims to a medium viewed through computer monitors with horizontal aspect ratios.
This resulted in beautiful web pages that very few people ever saw the bottom half of. If you are in the business you know that designing for “above the fold” is a web design principle that was developed in response to just that.
Basically designing for “above the fold” means that a web page is broken down into two major parts: the part that is visible when the page is first loaded by the browser and the part that is not. The two are separated by the “fold” which is a newspaper design term borrowed and used in web design to describe the bottom edge of the browser viewport.
Page elements that are “below the fold” risk never being seen as they require the user to scroll the viewport – which. as web analytics has shown us, doesn’t always happen.
This has caused print designers to unlearn the art of designing for the unobscured printed page and start making hard design choices for the web and it’s horizontal aspect ratios.
The IPad changes all of this as it introduces the web’s first truly vertical screen orientation. Yes, the iPhone had a vertical orientation too but t was too small to read without zooming unless you used a native app.
Return of the Broadsheet
The iPad marks the return to “broadsheet” and magazine formats. It rocks the “above the fold” web design paradigm to it’s core as the user can now scan the entire page without having to scroll – much like a magazine.
If this device is as successful as I think it will be, I believe that we could see a lot of web page consumption in vertical mode – ushering in a renaissance for web design and web information architecture.
Because web pages will no longer only be viewed one half at a time, designers can finally design pages that are meant to be scanned and read all at once.
It only took 15 years, but it looks like the web page is finally going to act like a “page”.
I hope the publishing industry figures out what the music business did not: consumers hate DRM.
DRM is confusing for people. It flies in the face of the purchase-to-own offline sales model, not to mention the disaster that ensues whenever you loose a hard drive or buy a new computer.
O’Reilly, not surprising, has their finger on this pulse.
I’ve used Foursquare for months checking in everywhere I go but, after a while, my checkin’s have definitely slowed. I think the reason is that the game/points dynamics of Foursquare is not really what motivates me to checkin over the long term. My checkins are fueled by a desire for two things: status (yes, I’m the “mayor” of my favorite places) and the ability to get deals.
The problem I’m seeing with Foursquare is that after becoming the mayor of my spots, there are no deals to be had. If I was getting access to new deals I’d still be checking in daily, but alas, the only deal to be had in Palo Alto for the last few months has been half price pitchers at the Blue Chalk Cafe (nice! but not my cup of tea).
Foursquare needs more deals if they want to attract and retain a broader user base. This is where Yelp has the advantage. Yelp has relationships with tens of thousands of businesses and I’ll bet that e-mails will soon go out encouraging them to post special deals for frequent visitors that checkin. I already use Yelp to figure out where to go, so a checkin once I’m there is a no brainer.
So is Foursquare doomed?
I don’t think so, but they desperately need to figure out a model whereby they can organically acquire relationships with businesses as quickly as possible. The key move for Foursquare is going to be in leveraging their very loyal (and growing) user base to generate the awareness among business owners for them. Someway or another Foursquare has got to find a way to either shame or fame their users into getting their favorite businesses to engage in the model and post deals.
If Foursquare can turn their user base into their “feet-on-the-street” sales force, their advertising model could be explosive. If not, they run the risk of “dying in the sand”, just as countless other local content and advertising ventures have, as they attempt to scale their direct relationships with local businesses.
I’m hoping they make the right moves in response the Yelp’s play for the space.
Supposedly this is really from the desktop of a designer that came down with a case of the “sudden departures”… Too funny, but unfortunately also too often true.
This is from the “what’s this” link in the Sponsored Deals section on deals.woot.com:
OK, yes, companies pay a little something to be Sponsored Deals. But we don’t allow just any old crap in this section. Sponsored Deals are proposed to us by other retailers, manufacturers, and even other daily deal sites. If we find the deal compelling enough that our members will appreciate us bringing it to their attention, we’ll feature it here. Believe it or not, we have a reputation to uphold. If your store would like to be considered for this space, contact xxxxx[at]woot.com for details. But if your deal is lame, or sketchy, no amount of money will let you buy your way in.
What I find very interesting, is the Google used an anonymous inquiry model that keeps the user’s contact info private by providing proxy or masked phone numbers to the business.
This is a model that we rolled out on Matchpoint.com two years ago – except we took it further and extended the model to include email as well as phone due to the fact that most people prefer to manage the quote process via email until they have decided who to contract with.
It will also be interesting to see how they try to scale managing unique product dimensions and advertiser data entry.
Macworld is running a nice piece that compares the top photo/slide scanning services.
I’ve used ScanCafe to scan several thousand slides/negatives and have been really happy with the quality and price. They do an especially good job with black and white negatives which are much more difficult to scan due to lack of dust removal technologies that are available when scanning color.
Brief recap is that Foursquare is local-mobile-social network that makes a game out of sharing the local venues that you frequent with your friends. Foursquare users “checkin” on their iPhone, add tips (sort of like tiny reviews), and get alerted when their friends do the same. It’s a local social discovery experience that plays out on your iPhone – for the most part.
What might not be so obvious is the part of Foursquare that plays out on the web. I’m not talking about the twitter notifications but rather the user and venue pages on Foursquare.com.
When a user “checks-in” or adds a tip for a venue, the fact is published to their user page and also indirectly to the page for that venue. This creates a constant stream of new content and an explicit recommendation metrics that can be used to gauge the popularity of the venue.
For example, here’s the venue page for the Peet’s Coffee around the corner from my office (yes, I’m the mayor) and here’s the venue page for Citizen Cake in SF.
Local search and Yellow Page publishers will be quick to notice that every venue visited by Foursquare users has a page. As these pages get more popular, they are starting to get indexed by the major search engines. Here’s a screenshot of a Google search for Grand Sichuan on Second Ave. in NYC. Notice the first listing. If I were the owner of Grand Sichuan I’d be leaning into Foursquare in big way right about now.
Yelp has demonstrated that frequently updated user generated content is a key ingredient to local SEO. Judging by the upward trend that they are seeing, I think we are going to see Foursquare start to steal organic traffic share from Internet Yellow Page players.
Wow. This is bad news for online display advertising and it confirms my theory that there is a correlation between an Internet user’s propensity to click on display ads and how long they have been using the Internet. Said another way, as Internet adoption slows, the user population becomes more mature and click less on ads.
That said, a 50% drop in CTR (from 32% to 16%). is pretty massive.
However, I can’t say that I’m too surprised. I don’t know a single direct marketer that can get display advertising to convert for them unless the CPM (cost per thousand) is pennies.
Sadly the industry seems hell bent on chasing the click-through rate of display ads all the way to the bottom instead of admitting that it’s generally the wrong tool for online direct marketing.
On the other hand, whatever company cracks the code on delivering metrics that quantify an online display ad campaign’s impact on brand awareness is going to be well positioned to capture these display ad dollars. It’s amazing that no ad company has captured this ground yet.
This is good news. I’ve recently started using OmniFocus and have found it to be really well suited for implementing “getting things done” (GTD) principles. Definitely check out the PDF to see how OmniFocus maps onto your typical GTD process.
Google is finally coming around to the fact that their core Adwords product is too hard for small businesses and instead is now offering flat free pricing models that have typically been offered by Internet Yellow Page players.
If you are a small business, flat fee pricing on Google might be the best deal in town depending on your category and geographic service area. However, it’s going to be hard to tell without giving it a try for a while.
Google is slowly putting the pieces in place to consolidate the Internet yellow page market (maps, local business center, simple ads, etc.). If “simple ads” are a sign of things to come, Yellow Page players should be very concerned by this announcement.
However, IMHO, they are still missing a few important pieces of the Local puzzle:
Business Profile page/web site creation
Call tracking and reporting (can you say GoogleVoice for businesses?)
A social consumer review strategy on par with Yelp
Simple web analytics so that small businesses can track clicks/calls from IYP channels on thier dashboard
Thanks to Kevin (@kevinberk) for turning me on to Foursquare (@foursquare). I have to admit that I was a bit skeptical at first but being in the local search business I decided to persist and install it on my iPhone.
For those not familiar with it, Foursquare is a location based social network set around the notion of sharing the local places that you frequent with friends and indirectly with the broader community. That might initially sound a bit silly, but Foursquare wraps it up in a game dynamic by showering you with points for each “check-in” you do and ultimately crowning you the “Mayor” of an establishment/venue if you are the user who frequents it the most.
Aside from the bragging rights, users also get badges and leader-board stats. Your friends get a steady stream notifications throughout the day as you check-in from different spots. If a place that one of your friends visits catches your eye, you can add it to your to-do list.
Pretty cool and fun, but so far you are thinking this is just another Internet ego trip, right?
Well yes, but there is a brilliant business model lurking just beneath the surface…
Local businesses can offer special deals to Foursquare users. For example, as I was “checking-in” from my favorite Mediterranean lunch spot today in Palo Alto, Foursquare showed me that just a few blocks away The Blue Chalk Cafe was offering Foursquare mayors happy-hour drink prices all night long! All you have to do is show the waitress your iPhone and your mayor badge to be sipping $3 pitchers all night my friend.
One part local advertising, one part couponing, one part loyalty program, Foursquare could be a powerful cocktail for local businesses to use to drive traffic through their doors. The Twitter and Facebook integration plus the friend stream drives discovery or “awareness” as advertisers and agencies refer to it. Also, the badges and mayor status provide much needed accountability to the business owners doing the advertising. I’m pretty sure business owners will remember their mayor walking up and introducing themselves!
What Foursquare needs to do next IMHO, is make it super easy for local businesses to add their deals (right now it’s just a link to a google docs form) and provide some good analytics back to business owners. If they execute this right, then they will have a viral local advertising machine on their hands – as their user base will generate the awareness among business owners for them. I can just hear several Yellow Page executives I know cringing…
Word-of-mouth customer acquisition plus customer loyalty is a very unique combination to create in advertising and I think the folks at Foursquare might have cracked the code on this.
We were proud to attend the opening of this very cool exhibition in San Francisco tonight that was curated by my sister Rachel.
Here’s a bit about the show:
Interrupting a Beam of Light is an exhibition that focuses on contemporary works that deal with the wonder of natural and man-made phenomena, the nuances of magic, and the importance of retaining lore and myth in our everyday
lives.
This is the first show of Rachel’s that I’ve gotten to see and I was very impressed. I think you will be too, so be sure to check it out if you are in SF. It’s showing untill the end of October.
Needless to say, a good time was had by all. Awesome job Rachel. We are very proud of you.
