Given the title of this blog, you would admit my curiosity on the subject… It was then that I remembered the video of an interview with Jack Dorsey (creator and executive chairman of Twitter) about the existence of a business model founded on serendipity. How would I define it? Well, in a few words online serendipity is a phenomenon where users encounter something they like that they were not expecting (read my previous blog post on the same subject).
As Dorsey himself admits, Google AdWords has been the first application of this groundbreaking online marketing model. As with fashion magazines, where ads are so well integrated with the content to be not only pleasant but also useful to the consumer, AdWords has made online advertising reputable and even desirable.
In the same way that people believe that Google ads make the search experience better, Dorsey says that Twitter’s ad products – promoted trends, promoted accounts, and promoted Tweets – get engagement rates between 1 percent and 5 percent. And this is done, in fact, in an unconventional sense:
I don’t necessarily think of it as advertising in the traditional sense. It’s, how do we introduce you to something new? How do we introduce you to something that would otherwise be difficult for you to find, but something that you probably have a deep interest in discovering? It’s really just another algorithm, or it’s just more curation, but it’s something that you would find delight in anyway. [..] The user experience is what matters. If the user experience is bad, then we fail.
Now the key question is: How do you engineer a system that, while not literally random, produces the feeling of serenidipitous discovery, meaning emerging from what seems like meaninglessness? AdWords also works because it’s a natural part of the system. You perform a search in order to get results — some of those results come in the form of advertising.
If Twitter wants to fully rely on this business model, it must be sure that the strategy feels like it is natural part of the network.
Trying to figure out what the online media spend looks like, here is what he uncovered:
the digital media ad spend (search, display, mobile, etc) controlled by Google, Yahoo, Microsoft, Facebook, and AOL is about $40.1B
According to a recent ZenithOptimedia press release, worldwide digital advertising accounted for about $64.03B. That means that those ‘five sisters’ mentioned above, in that order, account for more than 60% of the worlds digital media ad spend. Moreover,
Google generates approximately 364% more revenue from advertising than it’s next closest rival, Yahoo!
To push this inequity even further, if you look at the comments in Herman’s blog post, Jon Steinberg (the President of BuzzFeed), points to another staggering statistic: 75% of all advertising spend is controlled by four advertising networks: WPP, Omnicom, Publicis and Interpublic (see his Flickr image here).
I’ll keep this in mind the next time I will be talking with someone of things such as concentration and dominant position. Apparently, these concepts also apply to the business models ruling the Internet. Which is something more difficult to occupy than any Wall Street.
For the first time in its history, the editors at The New Yorker know which articles are being read. And they know who’s reading them.
They know if the cartoons are the only thing people are reading, or if the fiction really is a backwater. They know when people abandon articles, and they know that the last 3,000 words of a feature on the origin of sand is being widely ignored.
They also know, or should know, whether people are looking at the ads, and what the correlation is between ad lookers and article readers. The iPad app can keep track of all of this, of course.
The question then: should they change? Should the behavior of readers dictate what they publish?
Of course, this choice extends to what you publish as well, doesn’t it?
[updated: I fear many people missed my points here. A. this isn’t a post about the New Yorker. and B. I’m not sure it should change. Perhaps it’s the stuff we don’t read that makes the rest of it worth reading. Racing to keep up with your readers and to pander to them might not be the best way to do work that matters. Sorry if I was insufficiently direct in my original notion. And yes, I’m aware of the irony of this update.]
From Dictionary.com ser·en·dip·i·ty /ˌsɛr ənˈdɪp ɪ ti/ –noun
1. an aptitude for making desirable discoveries by accident.
2. good fortune; luck: the serendipity of getting the first job she applied for.
In the offline shopping experience, this is quite common. You know, that feeling of walking into your favourite bookshop and picking something up in a section you don’t normally go into just because they rearranged the aisles. The moment when you stumble across some gorgeous shirt in a store you have never visited before, but your friend needed to ‘say hello’ to the salesgirl.
That magic moment where you discover something cool (and better than the others) by accident.
Or – as happened to me not so long ago – entering an hotel where you stayed only once a couple of months before and the concierge welcomes you by name.
In the online experience, things get a little bit more complicated.
Just like in the “real” world, online serendipity is a phenomenon where users encounter something they like that they were not expecting. We all know about targeting and segmentation: Amazon made a sort of 11th commandment of it (the “people like you buy stuff like this” functionality), and this has been replicated in thousands of platforms and marketplaces. Clearly, providing important and relevant information from your peers will help increasing conversion rates significantly.
But serendipity happens when you are not going for shopping.
Amazon’s lists (and the likes) never amaze. Serendipity gives you things that you weren’t looking for right now and suddenly you think: “OMG, I gotta have it!”
In my opinion, the next phase will be to anticipate users’ questions and answer them before they are even asked. That’s the same kind of experience you have during your offline saturday afternoon shopping session, when you see something blinking at you from the window of that never-even-realized-it-was-there bazaar.
Social networks have a strong part to play here, but we need something more than rating and sharing to be genuinely surprised.
PageRank is a patent owned by Stanford University and will expire in 2017 (more info here). Google hold a one time paid license of this patent and in 2003, the exclusivity license was extended till 2011. After that period, Google’s exclusivity on PageRank will expire and license will become non-exclusive. What does that mean?
Sure, regarding the exclusivity period, as they did in 2003, they can renew that license again in 2011 and own the exclusive rights for this technology. But think about this: what about a page ranking based not (only) on an algorithm, but on explicit indications made by users? And what if this users were people that you know and trust becuse already added to your “circle of friends” on Google+ or other social networks?
Yesterday, Google launched his +1 Button extension for Chrome browser. Using it, you no longer have to rely on a site to implement the +1 Button: you can invoke the functionality through your browser.
Right now, the +1 Button just shares content you like on the web. But eventually, the plan is to look at this data as a way to affect Google Search itself potentially. That’s huge. The button also is starting to play a role in how Google serves up advertising to you.
Last but not least, here is what Google states in the +1 app description:
They are an advertising company. Draw your more appropriate conclusions… 😎