I just saw the headlines from a report this week that Google is earning $1.10 of every new search dollar spent. This didn’t make sense (obviously) because Google is magic, but I couldn’t imagine how they were creating money out of nothing. Turns out that the explanation is simpler:

“For every new dollar spent on search in Q2 2008 versus Q2 2007, $1.10 went to Google. Yahoo lost $0.09, and Microsoft lost $0.01. In other words, advertisers are putting all of their new search dollars into Google, and pulling money out of Yahoo Search and Microsoft Live Search.”

Looks like Efficient Frontier Insights, the company that published Search Engine Performance Report: Q2 2008, is looking for publicity with that headline, because it isn’t really accurate. Google may be taking money away from Yahoo and MSN, but they aren’t taking $1.10 of every NEW dollar. Google may be taking old dollars away from its competitors, but it isn’t creating money out of nothing.

Nevertheless, the news remains strong for search advertising. Some other highlights from the report - CPC rates increased for all three search giants compared to Q2 of last year, as did ROI.

The Long Tail is a concept that was set forth in 2004 by Chris Anderson, editor-in-chief of Wired, which was then turned into a 2006 book. In short, the idea is that because of the Internet and it’s infinitely wide and incredibly low-cost distribution capabilities, the big “hits” of popular culture (be they movies, music, books, etc.) are no longer the only things that will make money. Now, the “misses” will also be money-makers.

But a new article by Anita Elberse just published in the Harvard Business Review called “Should you Invest in The Long Tail“ is taking a closer look at the theory and suggesting that businesses really shouldn’t shift their promotional dollars to the long tail - and instead should stick to promoting the winners. She comes to this conclusion after determining that the tail, although long, is very flat and accounting for very few sales, and typically less satisfied consumers.

Anderson replies here.

Elberse responds to Anderson here.

This is a very interesting debate, and one that should be followed by anyone who is involved in marketing or advertising online. Anderson and Elberse have taken a great deal of time looking at data and doing analysis on this concept, but here are some thoughts based on reading the articles.

- Anderson seems to be focusing on the fact that online retailers like Amazon.com will begin selling a lot of items in the long tail. Whether or not it’s true is practically irrelevant for the vast number of online businesses. Most businesses don’t have the reach of Amazon.com and are targeted at a much smaller audience. The people who run those businesses know that 80% of their business comes from the top 20% of their clients and customers - so they will continue to focus their attention - both time and money - on reaching those clients/customers. Now they have Elberse’s data to back them up.

- People buy stuff that other people like. This is why user recommendations (such as those on Yelp or TripAdvisor) are so popular, and why the head of the tail keeps growing in popularity. People like to have a choice, but when their time is limited, they typically will go with the easier choice. And it’s easy to choose something that has been recommended by someone they trust - or an online audience of their peers.

- The long tail does exist and consumers are benefiting from more choice - but the tail isn’t a place that any musician or artist or blog or business wants to be. And may not be a place where money can be made. According to the data collected by Elberse and cited by Anderson, “In music, of the 2.4 million digital tracks sold in 2007 in the US (most of them through iTunes) 24% sold only one copy and 91% sold fewer than 100 copies.” 100 copies sold through iTunes (at $.99 each) isn’t even enough money to buy a new guitar.

Photo by loufi

I’m back from my vacation, and it was terrific. Basically, Chris and I spent an entire week having fun and relaxing - and not a bit of work was done by either of us. It was a real vacation!

Of course, I may not have officially been working, but I was on the lookout for business ideas and interesting perspectives on the Internet during my time in Ireland. Only two things stood out:

1) Most ads, billboards and marketing that I saw in the country included a URL, and most of those URLs ended in .ie. I really was surprised at the prevalence of the country-specific domain name usage in Ireland. I can’t be sure if it was just Ireland that uses it’s country code, or if that practice is common across the world, but I definitely expected .com to be more popular in Ireland than it appeared to be, at least in what I was looking at as I drove across the country. This trend (or non-trend) is something that I am going to be watching closely for globalization projects.

2) In Ireland, a widget is related to Guinness, not the Web. In fairness, many people in Ireland probably think of the Web when they hear the word widget. But for us, during this trip, the widget was all about the Guinness.

According to this interesting post by Fred Wilson that I read when I got back from my trip (Why Widgets is the Wrong Word for What We’re Doing), widgets as they relate to the Web may soon be an outdated term (or concept) anyway. But for posterity, a widget is “an object on the computer screen that the user interacts with,” according to Wikipedia. It’s basically a piece of code that can be used on a Web page (or blog) to deliver specific content or functionality to a Web page. (I am not convinced that the widget is going away, although Wilson makes an interesting point.)

In terms of Guinness, the widget is a little plastic ball that is in the canned version of the beer that releases gases to help make the head that Guinness is so famous for. This link provides some very helpful information (and a picture) about the Guinness widget.

I told you I was on vacation and not working, right?

My company has a lot of blogs for the various businesses that I’m starting - 52 to be exact. Most of them are run on Wordpress, which I really like, one is run on an old install of TypePad (which is clunky, but might be because I need to update), and one is run on Tumblr.

I love Tumblr. I love the user interface, the way that you can post quick snippets of things. Quotes, pictures, text, links…it is fun to use. And the templates are awesome. The Cara Austin blog is on Tumblr, and it’s a delight to update every day.

But there is a fundamental problem with Tumblr that I wasn’t aware of before I started using it - the search engines don’t seem to like it. In the two months since I have been posting (every weekday starting March 13, 123 posts total), the blog has only received 17 visitors from Google. Every one of those visits, except one, had the term “Cara Austin blog” or “Cara Austin Tumblr” as the search term.

This is a major problem for a commercial blog. I have a personal Tumblr that I use for my own things, notes, things I want to remember - and I don’t care if no one ever comes to that site. But for Cara Austin, a musician who needs to get her name out there and needs to sell albums, this is a big issue.

I didn’t know this about Tumblr. I didn’t know that the pages wouldn’t be indexed well (or show up high) on Google. I knew that Tumblr doesn’t have comments. And I knew that Tumblr didn’t have a search engine built in. These things I decided to live with.

But I didn’t know that Tumblr had a search engine optimization (SEO) problem.

I could no longer ignore the fact after I launched another new blog on Wordpress on April 23, put up a few posts, and that blog starting receiving more traffic, from a wider variety of search terms, in a much shorter time period.

Here’s a little chart to illustrate:

And so I’m leaving Tumblr. I’m leaving with a tear in my eye, but I’m leaving nonetheless.

Photo by Jaye_Elle

My most recent article for The Industry Standard is up on the site now: What the ValueClick settlement means for the future of lead generation. Why don’t you go read it? And hey! Why don’t you leave a comment if you have something to say.

For those of you who don’t know the background to the story, ValueClick just recently agreed to pay $2.9 million to settle the FTC allegations that they were doing bad things with their business, including:

1) Lying to consumers, advertising free offers, but then requiring consumers to pay or purchase to qualify for those “free” offers.

2) Violating federal law, specifically, the CAN-SPAM act.

3) Not securing customers’ financial data, even though they promised to secure it.

The press release from the FTC with the complete list of charges is here.

ValueClick will admit to no wrong-doing. Here’s what ValueClick says about the charges:

“The FTC alleged that the Company utilized deceptive marketing practices that violated the CAN-SPAM Act and FTC Act. In an effort to resolve this matter, ValueClick agreed to a settlement payment of $2.9 million without an admission of liability or conceding that the Company violated any laws.”

Having worked in the lead generation industry for years, I know that this is not the norm in lead generation and that most lead gen companies follow solid business practices; but yet, these types of scams do happen fairly frequently. Lead generation is a big business in the U.S. (see images below) and gettng bigger as companies realize the value of generating data that can provide specific metrics and ROI. So companies will use many different tactics - not all of them aboveboard - to generate leads for their clients.

If you’re doing lead generation through a third-party provider, make sure that you get them to explain in detail the following things:

1) What the environment looks like in which they will be generating leads. If they are creating a registration form, make sure that they show you what it looks like.

2) How they are generating the traffic that drives the leads.

3) If they are doing “co-registration” to generate their leads. Co-registration is the practice of including a check box at the end of another registration form so as consumers register for one thing, they also can “opt-in” for your thing, too. If they are doing co-registration, find out if the box is pre-checked, and if it is, run the other way.

4) Ask for a client reference - they should be willing to let you talk to someone else who has used the service and found it reputable and helpful.

Here are those lead generation numbers that I promised. This image is taken from the BtoB Magazine’s Interactive Marketing Guide for 2008, which has a lot of great online advertising data.

BtoB Magazine just released its Interactive Marketing Guide for 2008. (PDF here) The 36 page guide features a lot of great data about the state of online advertising, including the following gems:

- In 2007, U.S. marketers’ best performing advertising tactic was search engine optimization (SEO) at 57%, followed by behavioral targeting (44%) and email house list (42%). Rich media ads, which rated at 28% last year, trailed the list at 7% in 2007.

- In 2008, U.S. ad spending will break out like this:
         - Search: 40%
         - Display ads: 21.5%
         - Classified: 17%
         - Rich media/video: 9.5%
         - Lead generation: 8.3%
         - Sponsorship: 2%
         - E-mail: 1.8%

- 82.4% of marketers plan to increase their email marketing this year, compared to 2007.

- In the U.S. spending on online social networking advertising by marketers is on the rise with the following growth:
         - 2006: $350 million
         - 2007: $920 million
         - 2008: $1.56 billion
         - 2009: $2.02 billion
          -2010: $2.4 billion
         - 2011: $2.7 billion

There’s lots of other interesting data in the report, as well, so check it out.

Everyone knows at least one skimmer. Someone who doesn’t really read their email that closely, the person who reads enough to “get the point” but might miss a lot of the details.

The life of a skimmer is trecherous. They go to meetings and get asked a question “about that email that was sent yesterday” and have absolutely no idea how to answer. They never know what time the party is going to start, or who was invited, or what day it is going to be held.

Skimming causes problems. But for whatever reason, skimmers can’t stop. They might just think it’s ridiculous that people send long email messages. They might be “all about efficiency” or “impatient” or “don’t care.” The list of reasons is long.

I know some skimmers, and they are going to think this blog is about them. But it’s not. It’s about what happened to me when I became a skimmer and what I learned from the experience.

I am NOT the skimming type. I am detail-oriented, I read every word. I’m the person who explains what’s going on to the skimmers during the meetings. But with starting all these businesses, I have a lot of details going on at once. And a couple of weeks back, I forgot that my book club was meeting in a week and I still hadn’t bought a book.

My book club is a little non-traditional - it’s a history book club, we pick a different historical topic every time we meet, everyone reads a different book, and then we attempt to explain to each other what we read to try to surround the topic and get a better understanding of history. This is not because we are history buffs, but because - to put it kindly - our historical knowledge is somewhat lacking. In past book clubs, we have read about apartheid in South Africa, the time of the Cultural Revolution and Mao Zedong, and the Crusades. This book club topic was Cuba and Castro, which turned out to be very timely.

So I headed over to Amazon.com to search for a book on Cuba. I have learned my lesson in previous book clubs to not get a book that’s too long, or one that’s too intellectual - I wouldn’t be able to get through either in a week. I also know that the crowds are usually right, so I always go for a bestseller.

So I searched on “Cuba.” The first book was a travel guide, I knew to skip that. Number 2 was a book called I Was Cuba: Treasures from the Ramiro Fernandez Collection, and it was under $20, had a 4.5 star rating with 12 reviewers. I clicked to the page to find out more. The book description said this, the full text is below. But to show you what I saw, I will BOLD the parts that I read (when skimming):

“While most think of Cuba as a mythical island of rum, rumba, and revolution, period photographs reveal a more complex place. I Was Cuba is an original look at Cuban history as seen through the Ramiro Fernandez Collection arguably the world’s leading archive of Cuban photos and ephemera. I Was Cuba showcases rare, vernacular images from the nineteenth century through the revolutionary period, exploring the everyday and the eccentric. With texts from famed Cuban writer Reinaldo Arenas (Before Night Falls), this captivating volume is an intimate view into a bygone era of glamour, political upheaval, and astounding visual culture.”  

I bought the book. When it came, I found that this was not a book that I could read for book club - because there were no words. The “texts” were few and far between, and were simply short quotes. This book was a collection of (random, interesting, but not even that historical) photographs.

I bought a picture book for my book club.

And I was caught - a skimmer!

This experience helped me realize that being a skimmer is painful. But that sometimes everyone is going to skim. However, since I don’t want skimmers to skim when they are reading something that I wrote, especially an email, I need to work to combat skimming every way that I can.

So here are the five things that that you can make sure that your email messages get read by skimmers:

1) Put the point of the message in the subject line. Don’t waste the subject line with “hey” or “hello.” Put the subject of your message right in the subject line.

2) Make your point in the first sentence. Don’t take a long time to get to the point or explain background - you can do that later. Make the point in the first sentence of the first paragraph of the message.

3) Elaborate in the rest of the email - but keep your main point in the first sentence of each paragraph. Sometimes skimmers will “read” the whole email by reading the first sentence of each paragraph - so keep your main point up top.

4) If there is something that someone must read and it’s not at the top of the message, use the person’s name, in bold. And maybe underline it. This might offend a non-skimmer just a bit, but the skimmer is sure to notice their name bolded. Skimmers look for bold and bullets - they are a skimmer’s lifeline - so use them for important points in your email message. Because when she’s skimming a long email, Melissa I need you to do this, will really stand out.

5) Put a call-to-action before your signature. At the very end of the message, if there is some action that needs to be taken based on the message, remind the person at the end. “Please call me by the end of the day tomorrow.” or “I need your list of suggestions by noon.” That way the skimmer will know that they need to do something with the email, and your chances of getting a response will go way up.

And don’t follow my example and put a long personal story before the five main points in your message - the skimmers will never get that far.

Guy Kawasaki just formally released his latest project. It’s called Alltop and it’s getting widely panned across the Internet. Michael Arrington doesn’t like it, and neither do these people. (Although some people like it.)

Alltop basically is simply lists of blogs and publications, organized by category. Kawasaki calls it an “online magazine rack.” The most popular criticisms of the project are that it’s a redo (of popurls and Original Signal) and that the format neglects all the benefits of RSS.

Eliminating a discussion of whether the site is good or useful or worthy of attention, I find this launch particularly interesting because I just started reading Guy’s book, The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything. And it’s not often that you get to read a book about starting companies while the person who wrote the book is starting a company. So here’s my take on that aspect of the launch.

(Major Disclaimer: I am only on page 31, so my analysis of the book is going to be weak, and is not the point anyway!)

Guy says: “Make meaning - create a product or service that makes the world a better place.”

Does he do it?  I would say yes. According to the official announcement of the release, the “goal is to satisfy the information needs of the 99% of Internet users who will never use an RSS feed reader or create a custom page.” This is a pretty meaningful purpose, and one that I can really relate to as most of the people I know in my non-work life do not use RSS or even know what it is.

Guy says: “Make Mantra. Forget mission statements…instead, take your meaning and make a mantra out of it.”

Does he do it? Heck yeah. Check out this catchy mantra - “aggregation without the aggravation.”

Guy says: “Get going. Start creating and delivering your product or service….Don’t wait to develop the perfect product or service. Good enough is good enough. There will be plenty of time for refinement later. It’s not how great you start - it’s how great you end up…The wisest corse of action is to take your best shot with a prototype, immediately get it to market, and iterate quickly.”

Does he do it? YES! And I think that this is the No. 1 best thing about this launch. Guy didn’t wait until the product was perfect, refined, pretty and loved-by-all to launch. It was “good enough” and he let it fly. Now, he’s getting unbelievable feedback and commentary by everyone who is watching the launch. Love it or hate it, the feedback is real and immediate, and I bet that tomorrow he’ll be working on version 2.

Verdict: Guy Kawasaki practices what he preaches - at least what he preaches in the first chapter of his book.

This is pretty trivial, I admit, but since I heard that the most recent iPhone update allows you to create a custom icon for your Website that will be deposited on the iPhone home page, I have wanted one for 16th Letter. It doesn’t help that I saw BoingBoing’s and TechCrunch’s and had some Web clip envy.

And now I have one. So go ahead, add it to your iPhone (or iPod Touch)!

Here are the instructions on how to create your own Web Clip icon, from Apple.

This is another set of step-by-step instructions.

I hear that this is pretty easy to do. (I had a developer who did this for me, but he said it was a piece of cake.)

I have been thinking about this post from Robert Scoble since I read it yesterday. (Go read it now.) In the post, Scoble makes three pretty strong points:

First,

“In the past few years I’ve had some success building audiences, but I found that that’s not really what’s important. It’s not what advertisers REALLY care about.”

He goes on to ask “What do they really care about?” and answers his own question by saying that advertisers care about content: that you get content that no one else does, that it causes conversations to happen, that your content gets noticed in the niche that you’re covering, and that it gets the most authoritative links back to it.

His second point:

“It’s not the size of your audience that matters. It’s WHO is in the audience that matters.”

And his third point:

“I never talk…about how large my audience will be. No, instead, we’re talking about who we want on the show for the first week. How can we make the quality better? Who is out there who is doing innovative stuff that we can learn from?…How can we take our art further? How come bloggers never obsess about THAT?”

There is a lot going on in this article, but first and foremost I have to disagree that advertisers don’t care about audience size. All you have to do is look at how advertising is sold online to know that they do, in fact, care very much about audience size. CPM (cost per thousand) is the standard measurement for online media sales. Just check out the advertising pages for CNET or PCMag.com  or CMP (all technology publishing companies). What is the first statistic that’s listed? Unique visitors per month. Second statistic? Unique page views per month.

Having worked for both Ziff Davis and IDG, two of the biggest technology publishers in the world, I know that when technology marketers are buying online advertising packages, the easiest question to ask - and the first one out of their mouths - is size of audience. They always want to know traffic stats and reach. In that market, advertisers do care about how big the audience is. And I think that this is only magnified in the consumer markets (with audiences like the one that Perez Hilton reaches), where there is no way to measure audience except by size.

And (this is still hard for me to swallow even though I’ve believed it for a long time), most advertisers do NOT care about how good the content is. I am just being honest here. Most technology marketers and advertisers do not pay attention to the content, or know how good or not good it is in and of itself. Instead, they measure content “goodness” quantitatively - by how big the audience is that is reading the content, and by who that audience is.

Which leads me to the part of Scoble’s article in which he was dead on accurate - advertisers do care about how targeted the audience is, WHO is in the audience. I believe that this is actually the statistic that matters the most to online advertisers.

Take another look at those advertising pages that I linked to earlier. There are some pretty strong arguments made by the publications that they have the specific audiences that advertisers are looking for. I believe that this trend of advertisers trying to reach the specific individual - with the right title, job function, industry and size of company - instead of reaching just a whole lot of people and hoping that the message has an impact, will continue. This desire to reach the RIGHT audience is why new models of online advertising are emerging, such as lead generation, in which a company will pay $100 PER LEAD as long as they are targeting the right person with their message. Scoble is reaching the audience that his advertisers want to reach - so the size of his audience isn’t as important. And this is why sites like Perez Hilton, which have to rely on audience size (because they are reaching a disparate consumer market) are going to have a hard time selling advertising by any measurement except audience size.

As far as content is concerned, I have already made the point that I don’t believe that advertisers care as much about quality content as Scoble claims that they do. I wish that they did, but I’ve been in this industry long enough to realize that they really just don’t. They like the latest and greatest thing - because it’s good for their brand to be associated with that innovative content - but advertisers aren’t content specialists and just really don’t have a good understanding of quality content.

HOWEVER - and this is a really big however - I think that Scoble is writing from the perspective of a content producer, not an advertiser. And his point is RIGHT ON that content producers MUST CARE MORE about their content than their audience size. Because without good, innovative, cutting-edge content, content producers will never draw the type of audience that they need to get advertisers. Scoble says that the right question is “how can we take our art further?” And I agree that is the right question for a content producer.