Thanks to Delphine at Traackr UK for inviting me alone to their event last week. I started to make notes about what was being presented but in the end also started writing reactive notes as thoughts occurred to me. Here they are below (with the spelling corrected). The event was given the theme of ‘beyond the buzzword’ which has multiple interpretations – Traackr looks at influencers more like a granular taxonomy than around keywords, but it also signifies a mainstreaming of ‘influencer marketing’.
There was an explanation of why influencer marketing
Authoritative content
The ability to better scale high touch relationships, something that traditional public relations isn’t able to do. The mix of people in the room from marketing agencies and PR agencies gives an idea of how ‘blended’ the concept of influencer marketing is. PR agencies see it as an extension of PR, specialist agencies see it in a different light and mainstream marketing agencies see it as an extension of their content marketing divisions
What became apparent to me during listening to the introduction and the presentations was that Traackr and the people on stage hadn’t met the same requirements I’d heard from clients with regards a business case for influencer marketing. Influencer marketing wasn’t quite taken as an article of faith, but considered to be a good thing. There was a focus on measurement benchmarking and a lack of concern over RoI or the lack of econometric data to back up the decision. The lack of econometric data to support PR is starting to become an issue and may affect where PR sits (at least in B2B environments at least for those companies with a strong marketing automation programme in place).
There was some hints that influencer marketing was looked at in a similar to customer services, in particular the advocacy journey above reminded me of customer service models.
Coca Cola
Coca-Cola focus the majority of their influencer relations programmes on what Brian Solis calls the Magic middle, the point at between the head and the long tail in a ‘long tail distribution’, the man from Coca-Cola defined this as ‘people who don’t have agents and strong bonds with followers’. They are likely to know the majority of their followers personally. They use interaction and prize give-aways as a way of encouraging brand advocacy and continued heavy consumption patterns. In a similar way to on pack tokens and giveaways would have done in pre-internet times.
They also like to do activities that encourage co-creation and in-real-life (IRL) interaction was consider the acme of these campaign interactions. When asked about whether they use sponsored / affiliate marketing of magic middle influencers – Coca-Cola generally don’t touch them. They only pay for a-listers and this seems to be on a market-by-market basis.
Interestingly, they use Traackr to consolidate programme data, keep things up to date, integrate with rest of the toolbox. I wonder what would be economics of this approach rather than using Salesforce’s tools to provide the customer records?
The objectives for influencer marketing at Coca-Cola where around brand love, brand affinity and purchase intent – which makes sense given the dynamics of the mature market oligarchy that they operate in.
De Grisogono
De Grisogono is a Swiss-based jewellery brand that also make mens watches. They discussed their use of influencer marketing as part of a panel discussion. Historically luxury brands had been slow to react to social platforms due to their perception of exclusivity and what it meant to be exclusive. In many cases social was imposed by customers on the brands. De Grisogono sees social and influencer marketing as an extension of their IRL social events. Since they are a relatively new brand there was also no heritage as baggage.
There overall intent is to drive footfall into stores, however it was interesting that they don’t look at location-based services like Swarm/Foursquare and instead focus on content channels. They don’t need to look at customer segmentation, since their approach to pricing does that for them.
They qualify influencers based on expertise and passion. Generally their jewellery influencers have 30-50,000 followers, mens watch influencers have less. This is in sharp contrast to fashion bloggers who may have millions of followers.
When thinking about influencer relations they put a focus on how they design content and experiences. They also pay a lot of attention to provide clients and prospects at any IRL events that influencers attend with adequate privacy.
The brand produces content that features influencer, to keep the production levels high. User generated content is not obvious for for a luxury brand (despite customers taking selfies) – De Grisogono take a more graduated control of visual content than other brands.
In trying to define the ROI, De Grisogono said that they don’t measure it explicitly but have noticed a causality between influencer coverage and a 300 percent increase in press coverage.
I was started down the train of thought to think about the idea of a cyborg based on a discussion with my colleague Colleen with regards to the changes we had been seeing in consumer behaviour. With that in mind I thought I would reflect on what my understanding of what cyborgs are.
‘Moo-mail’ Yahoo! cow parade cow. The web appliance / cow cyborg hybrid used to stand in the lobby of building D, next to the Yahoo! branded merchandise store on the Yahoo! campus back when I worked there. It was originally created in 2000 as a buzz marketing gimmick to promote Yahoo! Mail – the company’s email product to New Yorkers. More here.
Cyborg in culture
I can just about remember playing with friends bionic man toys and primary school and remember the opening credits of The Six Million Dollar Man. The show ran from 1973 to 1978 and had a corresponding spin-off show called The Bionic Woman.
According to the show a cyborg was:
CY’BORG
A HUMAN BEING WHOSE ORIGINAL HUMAN PARTS HAVE HAD TO BE REPLACED TO ONE EXTENT OR ANOTHER BY MACHINES THAT PERFORM THE SAME FUNCTIONS.
According to the definition, at the time of writing my Dad is a cyborg, having had a pacemaker fitted a year or two ago. So would the character Batou be in Ghost In The Shell.
The cyborg was a feature of cyberpunk culture. The key difference was that people chose to have augmentation, not just as a repair but as a form of enhancement.
Optional enhancement
Johnny Mnemonic had a storage brain interface fitted that allowed him to be a giant walking thumb drive as a profession.
Fellow William Gibson creation Molly Millions has retractable razor sharp blades in her fingers and an augmented metabolic system. She has permanently fitted mirrored lens over her eyes that enhance her vision.
Captain Cyborg
Real life did a rather poor version of this cyberpunk fantasy with academic Kevin Warwick spoofed by IT paper The Register using the moniker Captain Cyborg for him. He did foolish things like implant himself with an RFID chip usually used for pet identification. And yes of course Warwick did a TED talk. I can’t tell whether the audience is laughing with him; or at him.
So what has an office conversation got to do with a cyborg?
Digital drugs
Which brings me to how an office conversation spurred me to reflect on how a conversation on compulsive behaviour got me to start thinking about cyborgs. Culture did envisage some form of device addiction. The premise of Neal Stephenson’s novel Snow Crash revolves around a file that crashes a person’s computer and leaves a hacker called Raven with real-world brain damage in the process.
Long live the new flesh
Ten years earlier Videodrome featured a TV executive called Max Renn investigating a satellite TV show called Videodrome. It is described a socio-political battleground in which a war is being fought to control the minds of the North American population. Built into it is a signal that produces a malignant brain tumour. Renn’s reality dissolves over the rest of the film as he finds out more and then kills himself.
There is a clear analogy with the heroin and crack cocaine epidemics that ravaged the cities of the western world through 1980s and 1990s as drugs of desperation in the face of globalisation. Science fiction is as much about the past and the present rather than the future. Heroin and crack both cost large amounts of money, so children tended to be secondary and tertiary victims rather than addicts in their own right. It would also be problematic for the authors to contemplate gratuitous harm to children in their works back then, let alone now in more anxious times.
In both Snow Crash and Videodrome users suffer damage from technology that they are unwilling to put aside.
Back to now
Addiction is ‘real’
My colleague put forward the following points:
Screens now dominate our lives, and their presence is only getting stronger and more powerful
(Some) adults can control to a certain extent how often and when they use screens. But there is a commonplace screen addiction.
Smartphone addiction and drug addiction share some similarities including a neglected personal life, a pre-occupation with the subject of the addiction, social media as a mood modifier or for escapism. The implication is that smartphones are an unwilling appendage which add capabilities (some of which are of a questionable value) and can’t be put down. All of which reminded me of my childhood (and adult relationship with music). But it is why I started to thinking about the nature of a cyborg
Smartphone addiction
Smartphone addiction goes by many names including screen addiction, online or internet addiction. Japan identified the phenomenon of hikikomori. The term was coined by social scientist Tomaki Saito in a 1998 book. While the term itself meant socially withdrawn, it hinged around the person staying home and playing video games or living a virtual life.
By 2015, academic research indicated that somewhere between 1.9 – 2.5 percent of Hong Kongers aged from 12 to 29 might fall into the hikikomori category, compared to the 1.5 percent of Japanese believed to in the category.
Meanwhile in the early 2000s BlackBerry email devices were nicknamed Crackberry, often by users who admitted overusing them in anti-social contexts. There was a corresponding term ‘BlackBerry orphans‘ for children who were ignored by parents wrapped up in their BlackBerry writing and reading emails instead of engaging at home.
China was the first country to push for action to clamp down on children’s online time, in particular the use of online games. As far back as autumn 2005, China’s General Administration of Press and Publication had started trialling a fatigue system to limit screen time.
By 2007, the local government of Shanghai had a camp set up to help cure teens of internet addiction working with a pilot bunch of inmate aged between 14 and 22. And just a year later the FT was documenting how the Chinese government was struggling to combat the addiction throughout the country. This addiction implies a cyborg-like relationship with their internet access device.
In 2017, the substitute phone is launched as a kind of fidget tool. This provides the tactile experience of swiping and button pressing, but without any of the compelling addictive software.
By 2018, smartphone manufacturers were worried about smartphone addiction and came up with different ways to try and give their customers better information and control over their smartphone usage.
What about the children?
My colleague asked the following question: given the impact on adults, who haven’t grown up with screens, what does this all mean for children?
Remember the BlackBerry orphans earlier? My colleague proposed that now children are being taught once they are born that screens and smartphones are at the centre of life, rather than people. Parents use their smartphone as a substitute to toys, parent-child playtime or conversation or even reading to the child.
This is claimed to manifest in impacted social and emotional development. Expert opinion is that children below 2 years old shouldn’t have any ‘technology in their life‘.
There is a belief amongst experts that screen time can result in permanent damage to developing child’s brains impacting concentration, social kills and vocabulary. Some even believe that there might be a link between ADHD and TikTok.
But the Royal College of Paediatrics and Child Health (RCPCH), the UK’s professional body most concerned with a child’s health, doesn’t publish any recommendations. There isn’t any research to indicate the ‘safe’ level and arguably commissioning this research would likely pose ethical questions.
By the time children enter secondary education, they are likely to own a smartphone of some sort. They maybe exhibiting a number of physiological effects:
‘Text neck’
Premature eye ageing
Sleepless nights
Admittedly, as a child I was told that reading after lights out and listening to the radio or watching TV in the dark would result in ‘going blind’ or a lack of much needed sleep.
Like television before it, online screen time adversely affects academic performance. My own exam grades were empirical evidence of this. China, South Korea and Taiwan both have different ways of limiting screen time. China has enabled technology with online games platforms. Taiwan has held the parents directly responsible and even fines them.
Questions
All of this prompted a number of questions with me:
Is it the device or is it the media?
Is it different to other waves of technology?
Moral panics – or what can we learn from the past & our cyborg future
Media
Rock music – academic research indicated that listening to rock music was linked to an increase of reckless behaviour including drug use, unprotected sex, casual sex, drunk driving, speeding and vandalism
Violent content – while violent content was considered to trigger a response in children, the overall risk associated with it was difficult to prove conclusively despite decades of research. Studies as far back as the mid 1990s indicated that there a lot of other factors to consider in addition to the exposure including mental health and cognitive ability.
Sexual content – the US Center for Media Literacy pulled together views on sexual violence in content. There wasn’t a lot of clarity in the plurality of views beyond the challenge of defining content to be of an overly sexual nature. What views were expressed were not backed by scientific research
Video gaming – because of the strategies used by players in video games. Academic research in 2015 indicated that video games might have a negative impact on brain development over time.
Devices
Personal stereos – the use of a Sony Walkman and later on the iPod was considered to a negative effect on hearing. They were also considered to have a social effect, depending who you ask it considered to be empowering or dislocating from society with increased narcissism. The positive autonomy based interpretation was called the ‘Walkman effect‘. The implication from this research is that not giving a child a smartphone at a certain point could have a detrimental effect on them – at some point the child has to become a smartphone | human cyborg.
Televisions – when I was a child I was constantly told to not sit too close to the television and that doing so would cause me to go blind. According to Scientific American, it isn’t the distance from the television that affects the child, but a long enough amount can cause eye strain.
The implication in past concerns about media and devices is that its the content that tends to do the damage rather than the device. This tends to indicate where action should be taken on ‘screen addiction’. As for our great cyborg future – it can’t be stopped.
I worked peripherally on And1 early on in my career, but it didn’t catch fire in Europe than it did in the US. I hadn’t known the full extent of the buzz marketing campaign that backed up the brand in the US. Here’s the early versions of their ‘mix tapes’, which did for street football what skate videos did for skateboarding in the 1980s. They blew up street basketball in the US, in a similar way to the X Games blowing up extreme sports. ESPN got on board with a sports related reality TV show with players competing for an And1 team contract.
But all the buzz marketing didn’t get the cut through that Wieden + Kennedy’s Freestyle TV advert did, effectively depositioning And1 from its street ball territory. Then there was a tie-up show on MTV2 that was similar to the And1 | ESPN show of the previous year. The lesson I took away from And1 was that product and reach both matter. Nike could buy reach and And1 didn’t have any product of note after the Tai Chi.
Opinion: Intel’s ‘smart capital’ is a warning from the past | eeNews Europe – the author considers the rise of private equity to fund new silicon fabs as a warning of peak semiconductors. Similar things happened in the 1980s and 1990s when large businesses like Coca-Cola helped fund manufacturing facilities. The key difference this time is how globalisation has been thrown into reverse by ‘Made in China 2025’ and hostile moves against Taiwan
Loss of Chinese tourists forces Europe’s luxury retailers to rethink | Financial Times – A recent surge in Middle Eastern tourists, as well as US visitors buoyed by the strong dollar, has helped fill stores. Eduardo Santander, CEO of the European Travel Commission, said the lack of Chinese tourists left the many luxury retailers that relied heavily on them with “a huge feeling of loss”, but had spurred “a huge effort to diversify”. Retailers have personalised their services. During Europe’s Covid lockdowns, shop assistants contacted customers via WhatsApp with tailor-made recommendations. Berg sees a “possible return to the old idea of service and store management from the 1990s, the little black book with all the customers’ addresses and preferences in it”. “You have to do much more to attract local customers,” Berg said. “They can come back, they have more time to spend, versus an international customer that was determined and straightforward.” – A few thoughts on this: The article asserts that Chinese tourists are straightforward and not picky. I think Chinese tourists are very picky by comparison, although the diagou’s supplying lower tier cities or buying to order might appear to be ‘luxury hoovers’. Secondly, luxury brands have treated non-Chinese customers abysmally (in particular the watch makers like Rolex and their retail partners like the Watches of Switzerland group) and they deserve all the problems that they get. Only focusing on the Chinese market has allowed the Chinese customers to blow up the secondary market. A straw poll of people that I know who have a Rolex from the past 10 years or so:
All of them had to buy their watch on the secondary market
About 80 percent of them had original warranty cards with Chinese family names, which is far higher than the 30 to 40 percent share that Chinese consumers make of the global luxury market
Finally, I don’t see the market coming back in the same way given Xi Jingping’s focus on common prosperity which will make luxury consumption increasingly problematic.
This New Study Reveals How Brand Loyalty is On the Decline / Digital Information World – I see this as more indicative of economic recession rather than any major change. Gallup showed that traits such as preference for green products decline in a recessionary environment, it would make sense if brand loyalty took a similar battering in favour of private label brands and substitute products
On Monday afternoon, the buzz amongst my colleagues in New York was the Super Bowl from the night before. In particular the advertising and one advert by Coinbase sparked more discussions than others. The advert was divisive. Some people that there was something wrong with their smart TV which had triggered a dodgy screensaver. One person even first thought that the QRcode would take them through to a site that might explain whatever ransomware had hijacked their TV.
They scanned the QRcode but it didn’t work properly. The reasons for it not working were twofold:
The contrast in the QRcode background and foreground wasn’t large enough for certain colours and so wouldn’t scan
The coinbase website fell over. This would be spun as unprecedented demand, but the reality was poor execution
A game console style ROM screen revealed at the end that it was Coinbase. The management would likely pass the whole car crash off as growth hacking.
Growth hacking
Growth hacking as a term was attributed to a blog post by Sean Ellis back in 2010. But as a concept it goes back much further. A classic example of growth hacking could be considered to be FMCG staple of ‘buy one, get one free’ or BOGOF. The master of the growth hack was David Wallerstein came up with the idea of supersizing popcorn servings in the 1960s. Wallerstein came up with a behavioural change experiment as business idea based on the insight of that people might want to buy and eat more popcorn, but were simply ashamed of buying two bags at the cinema. Wallerstein was successful in his experiment. Wallerstein was appointed by Ray Kroc to the board of McDonalds in 1968 and then rolled out larger servings in McDonalds restaurants, if you’ve ever been asked if you want a ‘large meal’ with your burger Wallerstein was responsible. This created a whole range of products in restaurants and supermarkets called expandables, from large meals to multi-packs of products.
A more recent example would be the signature on hotmail.com emails that encouraged whoever received them to get their own email address at hotmail.com. This was effective back when most people had a work or college email address and wanted a home account for personal communications like finding a new job. Gmail took a slightly different approach with an invite scheme that saw early adopters clamouring like they were trying to get in the door of Studio 54 on a Saturday night.
The original idea of growth hacking is to try a small marketing tactic and refine it based on the feedback that you get. In reality that gets translated into poor thought out showy tactics focused on the short term. The reason for this is that test and learn is done over a short time period and doesn’t incorporate marketing science. The Coinbase advert was a classic example of this.
Buzz marketing
Growth hacking is influenced by a number of things. One of which was the concept of ‘scrappiness’ in start-up marketing.
Startup scrappiness
During the original dot com boom new online businesses wasted a fantastic amount of money on ineffective advertising. The most iconic example of this would be the pets.com sock pocket advert that featured in the 2000 version of the Super Bowl.
Courtesy of Yahoo! Inc. Co founder David Filo is hanging from the rear of the car.
You saw some businesses like Yahoo! try to do brand building advertising in a more cost effective way. This was known internally at Yahoo! as buzz marketing and in the US, it had its own team.
Examples of buzz marketing included wrapping employees cars that had been volunteered in the Yahoo! brand. This was listed in the employee handbook as a free ‘perk’ of working at Yahoo!. There were some conditions like you had to keep the wrap on for year and a good behaviour clause.
There were also some sponsorships like the ice machine at the San Jose Sharks stadium and some high traffic billboards. Yahoo! used to have a billboard alongside the 101 freeway going into San Francisco and another in Time Square, New York.
While the lesson of ‘go for business models that make financial sense’ seems to have been lost as we left the dot.com era further behind. The idea of ‘scrappiness’ stuck. It fitted with the wider concept of ‘struggle culture’ in entrepreneurship.
In technology, marketing = sales
On one level, the problem isn’t Coinbase but the technology sector. The truth is that for the most part technology companies don’t do good marketing. My hypotheses around the reasons for this are:
Technologists aren’t marketers. For the original technology firms, the products found their own market. Over time a salesforce was introduced and for complex products there might be pre-sales and post sales consultancy. They don’t really know much about marketing science. The sales funnel is the one ‘marketing model’ that managed to make it into Microsoft® PowerPoint® says a lot about the nature of this understanding.
To a technologist, every problem looks like a technology challenge. So the answer for great marketing is either in kludges aka hacks, like the Coinbase advert, or algorithmic in nature. And those algorithms are usually based on a poor understanding of marketing featured in the point above
Technologists think short term. Brands are transitory if you are looking to be bought out, or are built ‘organically’ in the hands of the victors (Oracle, Microsoft, Alphabet, Meta, Apple, Amazon, Tencent or Alibaba). So building a brand is an alien concept. Why build a brand in a world when you believe in disrupt, or be disrupted? Contrast that with the FMCG world where brands have considerably longer lives. The Nestlé Kit Kat chocolate bar is 86 years old at the time of writing. Procter & Gamble’s Bold washing powder (laundry detergent) is a spritely 57 years old. Baileys Irish Cream liqueur is 48 years old, as is the Mobil 1 range of synthetic engine oils, oil filters, chassis grease, transmission fluids, and gear lubricants. If we think of technology brands with that kind of longevity its likely to be the incumbent telecoms companies, Fujitsu, Hitach and IBM. At the younger end would be the likes of Verbatim, AMD, Intel, Oracle, Western Digital, Microsoft, Apple, Acer and Atari.
Disrupt or be disrupted creates delusion. If you believe in the disrupt or be disrupted manifest destiny of technology you probably believe that your ability to market is better than established brands that are actually marketing organisations
I would guess that Coinbase marketers would tick at least some of these hypotheses. It probably doesn’t help that organisations who should know better are starting to buy into this ‘disrupt or be disrupted’ model.
Cost of reach
So, if you’re a technology company like Coinbase, who believes in disruption and ‘knows’ how to market better than marketers? The simple answer is that while digital has managed to get marketers to use its platforms, it has failed to offer the most competitive cost per reach. To achieve the same goals Coinbase would have had to spend an order of magnitude more on YouTube than TV to reach an equivalent audience.
Brand building
Finally the reason why the advert contrasted so sharply with the other content that ran during the Super Bowl was because everyone else focused on brand building rather than on brand activation. The reason why they are going for brand building is that the work will keep paying dividends for years. This is something that digital transformation doesn’t reflect well through its algorithms. The Coinbase approach was the equivalent of a TV ad that said click here.
Back in 2005, I worked in the search group at Yahoo!. One of the projects that I worked on was Yahoo Answers. 16 years later, Yahoo Answers is being closed down. I thought I would capture some of my memories and inside knowledge on Yahoo Answers.
But first we need some context so that what I write later about Yahoo Answers will make sense.
The beginning
Let’s go back to the beginning. Back to the early-1990s. Jerry Yang and David Filo founded Yahoo!. It fits the classic Silicon Valley archetype story and you can find plenty of accounts of it elsewhere. The key is what Yahoo! originally was. Its a list of links for websites. Once the list grew above 200 links or so; Jerry and David came up with a way of displaying this list by grouping it into subject areas.
What would later be called a web directory. There were other directories around about this time like:
Netscape Communications had their own directory when they acquired Gnuhoo, this eventually became DMOZ and then Curlie. Gnuhoo did rely on a search engine to help you find things in their directory. This is available as open source code at GitHub
All of them had a certain amount of editorial input over what was good. Yet Yahoo! became the top one through buzz marketing – cheap ways to do brand building.
When I was there, I worked with an agency to organise event hijacking at the Harry Potter and the Half Blood Prince book launch at Waterstones flagship store on Oxford Street. Yahoo! would vinyl wrap any employee’s car for free. There were also strategically placed billboards, such as this one in San Francisco.
People who managed this directory were known as web surfers. But there was also search engines out there, like the Knowbot search engine for Telnet developed in the late 1980s. There was Archie which was the closest to what we think of as a search engine now. Archie searched FTP archives around the world.
As computer science post-grad students, Filo and Yang would have been familiar with the idea of the search engine. At the time David Filo felt that no machine would provide better filtering than a human. Media accounts of the time showed that Silicon Valley venture capitalists were all in favour of search engines over directories.
Peer companies like:
Webcrawler
Metacrawler
Lycos
Ask Jeeves
Infoseek
Excite
AltaVista
All offered what we’d recognise as reasonable search experiences. But Filo’s comments on human filtering is something that we will revisit later.
Web portal & web advertising
Search engines were the future but as the dot com era took off it wasn’t apparent how to monetise them.
Yahoo! home page early on the morning of March 3, 1999
At the height of the dot com era; Yahoo! had about 40 million users a month. You have to remember there weren’t that many people online in comparison to now. Internet usage had grown from 45 million users in 1995 to over 410 million by 2000. At the time it didn’t seem to matter that Yahoo! took longer to load as a website compared to its peers. Longer page times, meant that you could get away with less equipment in your data centre hosting the website and supporting infrastructure.
The internet didn’t give birth to culture in the same way that memes, influencers and platforms do now. Instead it was the meme. It was all over the mainstream media, often tied up with ideas of cyberpunk culture, bulletin boards and the ‘information superhighway’. Examples of this included:
The Site by MSNBC
The i in iMac was for internet. The idea was that you could take the computer out of its box, plug it in to your wall socket and telephone socket. When you turned it on, it would configure you an internet service. The cool product design was a byproduct of this internet appliance plus personal computer thinking
Movies: The Lawnmower Man, Hackers, The Matrix, Ghost In The Shell
Books: Snow Crash, William Gibson’s Neuromancer
A plethora of internet magazines, including Ziff-Davis’ Yahoo! Internet Life which was a mix of technology and gadget reviews, media and celebrity content and website recommendations. Yahoo! Internet Life was published from 1996 to 2002
It felt like something big was going to happen, even if we didn’t know what it was. What was obvious was the potential for advertising online. And the clearest analogue was newspaper advertising due to the long page format of web pages.
Web portals came about for a number of reasons:
There was now the technology to pull content from different sources together. You would have:
Weather forecast
Horoscope
Up to date news
Local information (for major cities like San Francisco)
Business
Finance
Entertainment and celebrity news
Like the newspaper before it, it offered the first media you needed, but on the web.
It was mainstream enough for brands to advertise against for brand building.
By the time I was leaving college, Yahoo! Mail accessed through the Yahoo! home page made perfect sense.
So before the dot com bubble bursts Yahoo! had a major media business valued at 2.8 billion dollars, or about $70 dollars per user. Which sounds expensive, but when you consider that Google is now worth about $386 per user, it’s not that bad. Secondly, online advertising per impression was much more lucrative back then and ad fraud was much less of an issue.
What there wasn’t was a way of taking advantage of the highly relevant search results provided by search engines and adequately monetising them. So companies had three ways of monetising search:
Companies created portals the so called ‘homepages of the web’ to put display adverts on like My Yahoo! or MSN.com and search was a service alongside news, weather and horoscopes
They became infrastructure companies selling search functionality in the background a la Inktomi
They sold inclusion in their directory. This was controversial as it went against the editorial integrity of the directory and still a hot button when I arrived at Yahoo! in 2005
The bubble bursts
In the US stock market we had was now known as the internet or dot.com bubble. Looking at the NASDAQ composite data, it seemed to start in the last quarter of 1995, six months or so before Yahoo! went public in April 1996. It reached its nadir in the last quarter of 2002.
In reality, this was more than about websites. Telecoms deregulation, satellite networks and the rise of cellphones had seen a boom in new companies and network equipment providers to support them. The need for servers had created booms in:
Computers: SGI, Sun Microsystems and IBM
Networking equipment: US Robotics, 3Com, Cisco
Software: VA Linux, RedHat, Open Text
Software as a service: I2, Salesforce, NetSuite
Web hosting and ‘data hotels’: Equinix, Intel, Rackspace, PSINet
Telecoms and ISPs: Level3, Global Crossing, Earthlink, Iridium, GlobalStar, AOL, @Home Network
NASDAQ composite index covering the dot com boom and crash
Add into that artificially high growth in earnings for enterprise IT companies in the run up to the Y2K bug issue and the whole sector was left with a bad hangover.
Eric Steiner tells his tale as the CEO of Inktomi in 2004
Steiner’s talk is interesting because it shows how the search business, selling search capability to the likes of Microsoft, Amazon and eBay had slow and steady growth rather than outstanding growth during this time.
Yahoo! went through a traumatic time. When I worked at Yahoo! Europe, I was told online advertising sales dropped to a third of what they were during the dot com boom. The European business managed to hold on by its finger tips thanks to revenues from online dating services.
Some of the ‘smart bets’ Yahoo! made during the boom times looked like hubris. The exemplar of this was Yahoo!’s acquisition of Broadcast.com. Broadcast.com provided video streaming (then called web casting) and internet radio services. It was the technology partner for the first online Victoria Secret Fashion Show streamed online. Yahoo! acquired it for 5.6 billion of Yahoo! stock. This was a bad decision, but thankfully, they didn’t pay cash.
When I joined Yahoo! the Broadcast.com acquisition was still a scar on acquisition decision-making. You can attribute the impact of this to subsequent failed purchases of Google and Facebook.
GoTo and Google
In 1998, the company GoTo.com launched paid advertising placement in search engine results. The next year they introduced real time bidding. It was renamed Overture and started providing these services for Yahoo! and others. It started to become successful as a business.
Meanwhile, Google had moved from a research project to a serious search engine. In 2000, Google began selling advertisements associated with search keywords. This was against Page and Brin’s initial opposition toward an advertising-funded search engine, they saw themselves more as a ‘search appliance’ business rather like Inktomi. Yahoo! adopted Google search around about the same time that Google started its search advertising business.
This put Google in front of a large number of consumers and helped Google further refine its search engine.
Google’s own offering was the exact opposite of Yahoo!. It prided itself its clean design with just a search box. Google also had a fanatical obsession with reducing page load times and the time taken to return search results.
This was what more and more people wanted. Google used the dot com crash to build its business and its infrastructure. It wasn’t until its 2004 IPO that rivals realised how much of a head start Google had.
Google revolutionised data centre server design, reducing cost and increasing the amount of servers that it could use. By contrast every Yahoo! data centre hardware purchase went via David Filo. If you used Yahoo! small business hosting, you were using tired and almost expired Yahoo! servers. In retrospect, they looked after the datacentre pennies, but let the pounds slip away.
2003 saw Yahoo! get serious about the search engine business. The company purchased Overture which included GoTo.com and Altavista. But the problem was that even if Yahoo! built a search engine as good as Google, it didn’t matter if people didn’t use it. During my time at Yahoo! there was a push to get the necessary servers in place and a product that was as good as Google. However there was a constant tit-for-tat feature development in the search space. By this time Google had already verbed. The Google habit means that its hard to compete against them.
I heard that inside Microsoft they tried to take drastic measures to persuade employees to use Bing over Google. When I worked at Yahoo! people used Google a lot too.
The only way to compete with Google was to have a different idea. Google defined its mission is to organize the world’s information and make it universally accessible and useful.
Yahoo! needed a new idea that was distinct from Google’s mission. The idea was knowledge search.
Knowledge search and Yahoo! Answers
Knowledge search as a concept was well under way by the time that I arrived. It was to capture and make searchable all the ‘knowledge’ (rather than information in the world). Opinions, experience and recommendations are knowledge rather than information. Yahoo!’s web 2.0 acquisitions including Flickr and delicious were made to support this vision.
Tagging built up words and associations with web links and images, effectively human filtering – some of which would be used to train machine learning algorithms. The next logical step would be to build a repository of knowledge by the people, for the people. That’s where Yahoo! Answers came in.
The inspiration for Yahoo! Answers came from a product that Yahoo! Taiwan had rolled out. It in turn probably inspired by Korean site Naver Knowledge IN. Bradley Horowitz apparently claimed that Yahoo! Answers was inspired by Naver Knowledge IN directly.
Knowledge IN was designed to encourage user created content, since there wasn’t much material on the Korean web at the time.
When I heard Jerry Yang talk about it internally at the time, he talked bruskly about a product built by Yahoo! Taiwan as having inspired it. Jerry didn’t do jet lag well and came across as morose on the couple of times I saw him in Europe, so wasn’t exactly an effusive speaker.
Yahoo! Answers was championed by Jerry and that blessing allowed it to be pushed through when so many other product died before they got pushed to beta. It makes sense to point out the human crafted nature of Yahoo! Answers. In this respect it can be seen as a direct line back to the original Yahoo! directory product. Both were fuelled by a belief that people had some ability that was better than machines.
Qi Lu was responsible for new products within the core search business and the troubled Panama search advertising project at the time. Weekly conference calls saw a plethora of existing projects cancelled, or reprioritised by Qi Lu, while new ones would suddenly appear. This constant change in the roadmap mean’t a lot of wasted efforts.
Yahoo! Answers and much of the knowledge search related acquisitions sat under Bradley Horowitz. Tim Mayer was focused on the commercial side of things, although there was some overlap in the roles. Eckhart Walter sat above Tim. Jeff Weiner was the main shot caller having both Search and Marketplace businesses reporting into him. If you’re thinking, that’s a lot of senior management involved. You’d be right, there were a lot of managers with varying degrees of responsibility involved.
But they were all good people and I’d be happy to work with them again.
Prior to Yahoo!,I had been working agency side for Transversal. Transversal powered the support functions for a number of companies including Sony Playstation. I had a good idea how much this service was priced and floated the idea of sponsored channels for instance around Sony Playstation and had a good idea how much Sony must be paying to support user troubleshooting.
But it didn’t fit that well as an idea with knowledge search.
Concerns and how is babby formed?
In the European team we had some concerns about Yahoo Answers like how was it going to get monetised? The quality of the content was also a concern. Knowledge IN and similar services in Asia work partly due to culture. We were worried when it hit a more individual-focused culture like the US or Europe.
Another problem was calibrating the rewards within the system. Its really hard to get the balance on good quality questions and answers. Generally people who are time rich, aren’t necessarily the best respondents. If you need one proof point to show how much of a failure this was, you only have to look at the how is babby formed? meme.
Rewards aren’t the only problem however. The second issue was the way the community was built. Generally, a great community is built carefully from like-minded people. With flickr it was around the passion of photography. Facebook is actually closer to Reddit, built on groups of groups. The death of a group dynamic won’t necessarily kill the platform.
I was involved in early seeding of the initial content on Yahoo! Answers. I answered 42 questions, the first one question I answered was ‘What to take from airport to downtown Munich?‘ My response: The taxi is reasonable, it cost me 30 Euros – which shows the contextual nature of knowledge search. 30 Euros was reasonable for me at the time, since I could expense it back, but it wouldn’t be reasonable for a backpacking traveller.
I also wrote six questions, the first one was ‘Has anybody got a Pentax K100D, if so what do you think of it? What are its pitfalls and what aspects of it do you particularly like? I wanted to get a a bit more colour beyond the reviews I’ve read online. – I was getting ready to leave Yahoo! and was going to buy a DSLR camera to take better pictures on my Flickr account. I deliberately structured the question to get opinions from early users. The Pentax K100 had recently been launched.
Careful community management is at odds with a platform trying to capture the world’s knowledge. So the Yahoo Answers community was built for rapid global user growth. For the English language versions at least, there was a global content index, sitting on top of a distributed Oracle database.
This meant a clash of cultures and variable quality content. I quickly found the site unusable for productive questions. Yahoo! spent the next few years trying to perfect it. People that formerly worked on Yahoo! Directory and front page brought their content and editorial skills to bear on Yahoo! Answers.
I suspect that trying to monetise the service would have been a constant challenge. Yahoo! Answers provided variable quality answers for children’s homework and was the butt of memes. Neither of which are an ideal recipe for the kind of content large brands like Procter & Gamble would want to put their name against.
Quora’s lean pickings
Google tried to do it better with Google Knol and also failed.
Quora was formed in 2009 and managed to build a better community, but I’ve still seen a steady decline in the quality of their answers. In 2019, they had a user base of 300 million people and total revenue (from advertising) of 20 million dollars. Thats an ARPU of 6.6 cents. That’s not a good internet media business. From that 20 million, they need to pay their infrastructure costs, maintain and improve the product, pay the salaries of their 300 employees. And I haven’t even talked about how their investors must feel.
Knowledge search is still a technology challenge waiting to be conquered.
The event was given the theme of ‘beyond the buzzword’ which has multiple interpretations – Traackr looks at influencers more like a granular taxonomy than around keywords, but it also signifies a mainstreaming of ‘influencer marketing’.
