Bill, here's a good article on Yahoo that I think also applies to ACTV. This Digital ADCO is going to take on a very significant role in the new advertising world -
forbes.com
The killer ad machine
By Quentin Hardy, Forbes Global, 12.11.00
here's an old joke among marketers: "I'm wasting half my ad budget. I just don't know which half." Yahoo, the successful all-purpose website that offers such things as shopping, news and chat, has a proposition: We'll tell you which half. We have the technology to do it, when the ad is online.
Welcome to my parlor: Tim Koogle, the chairman at the center of the Yahoo web, spies on users, runs ads on the fly.
"Traditional media should get scared," declares Timothy A. Koogle, Yahoo's CEO. Yes, they should. The world's television stations, radio stations, newspapers and magazines take in more than $200 billion a year for ads, and most of the people doing the buying are working on blind faith that their dollars are producing a return. What if they knew how much—or how little? Would their spending habits change?
Broadcasting and print publishing are not going to disappear next year or even in the next decade, but the customers are inevitably going to migrate. As screens get sharper and batteries stronger, more people will get their sitcoms and weather reports on demand, their articles on the web rather than on a piece of paper. The producers of the content will migrate, and so will the advertisers. No harm there. But at some point the advertisers will insist on precise performance measurements, going far beyond the circulation figures and Nielsen ratings they now get on the old media. Yahoo will be happy to provide performance data that show results; publishers that don't match that offer will lose advertising clients.
At the moment Yahoo shares with the rest of the Internet world a depressed stock price—off 75% from its high. Scary thought: Even at its shrunken state, Yahoo's $30 billion valuation on Wall Street makes it worth more than all U.S. magazines put together.
Apart from the stock collapse—which means that options are underwater for half of its 3,000 employees—Yahoo is a happy anomaly in the online world. It has millions of regular users, a billion dollars in annual sales and 16 consecutive quarters of profit. Koogle says that the company would be worth more but for Wall Street's assumption that its ads (which provide 85% of revenue) are just another commodity in a glutted market.
"It hurts me when they don't understand what we're building," says Koogle. And what they are building, he vows, is a killer ad machine, more powerful than print or television—and able to charge far higher prices. It will offer marketers mass reach, with a customized, close-up intimacy they never had before. And it will offer instant feedback on every ad. The advertiser will know how many people saw an ad, who they are and how many reacted with a further click or a purchase.
Yahoo reaches 60% of all net users worldwide and 70% of employees in the 500 biggest companies in the U.S. It tracks the visits of 166 million users, 55 million of whom have obligingly revealed such things as their identities, home addresses and personal preferences. Yahoo slices its huge audience into narrow, highly targeted groups as small as 17,000 like-minded souls. Each month it drills into 16 trillion bytes of data on the browsing, buying and social behavior of millions of people.
From this, Yahoo can divine that an anonymous user is a 25-year-old man in Germany with a Visa card, in need of flowers for his wife and keen to see a "click here" ad from a nearby florist. |
