InfoCommerce

Getting the Message

2009-06-26T12:43:00.000-04:00

What do email, instant messaging, RSS (generally associated with blogs), social media (I am thinking in particular about such platforms as Linked-In and FaceBook) and Twitter have in common? They are all messaging channels. And each one grew rapidly in popularity after the then-dominant messaging channel became over-used, and thus less effective, particularly for marketers.

Email was the first of these messaging channels. Its low cost, ease of use and lack of rules turned out to be a two-edged sword, spurring rapid adoption, while attracting a tidal wave of marketers, spammers and others whose mail volume soon swamped one-to-one email communications. Users fought back with aggressive spam filters, usage conventions and even legislation, largely taming the channel and adding lots of marketing constraints.Blogging then went supernova for a while, in part because one could attract an audience at low cost, but more importantly I would argue, because it was closely tied to RSS. The great hidden value of RSS was that it bypassed spam filters and landed messages directly on the users' desktop.

Next up: social networking platforms, such as Linked-In with its Linked-In groups, which created privileged communications channels that are still growing in popularity. And now there is Twitter, which is also growing rapidly.

It seems that once a popular messaging channel becomes too clogged with extraneous messages, a new message channel emerges. Once it generates spectacular rates of adoption, marketers, spammers and others seeking to monetize the channel pile on, creating noise, clutter and a commercial tone that many users reject. This sets the stage for yet another new messaging channel to emerge.

The implication for publishers? They should jump on these new messaging channels as quickly and early as possible, which is when they yield maximum benefit. At the same time, publishers need to be cognizant that it's risky to develop dependence on these channels because their marketing half-life will become increasingly short. The messaging channels that prove durable will be the ones that impose rules and technological barriers that limit their value for marketing purposes. The ones with the fewest restrictions are likely to flame-out relatively quickly.The bad news and the good news in all of this remain the same: the message remains more valuable than the medium, and there is no durable short-cut to building an online audience.

The Best Never Rest
Model of Excellence Award Winner
iJet Intelligent Risk Systems
to Speak at DataContent 09

A 2004 InfoCommerce Model of Excellence Award Winner, iJet has tranformed itself several times to take advantage of new opportunities and emerging business needs, while never losing sight of its core competencies and value proposition.

iJet CTO Greg Meyer will be on the highly popular "Excellence Revisited" panel at DataContent 09 where he'll talk candidly about what iJet has learned about what it takes to succeed in the business of business information, hard-earned lessons you can take to the bank!

DataContent 09: All Roads Lead to Data. Full program here.

Risky Business

2009-06-19T10:10:00.001-04:00

It’s hardly newsworthy that the Internet has been enormously disruptive to both well established businesses and business models. It’s also not news that the Internet enables disintermediation by making it easier to both buy direct and do-it-yourself. We’ve also seen that the Internet has enabled “electronic commons” through social networking and user-generated content.

What happens when you combine all these combustible characteristics in one package and apply them to our global financial crisis? You get start-ups like freerisk.org.

Freerisk wants to challenge, if not replace, the major credit ratings agencies (e.g. Moody’s, Standard and Poor’s and Fitch) by letting users build and run their own financial risk models. As I understand the plan (and the venture is still very much a work in progress), Freerisk will aggregate public company financial data and provide an interface that lets users pull the data into their own risk models with the hope they will publish their findings on the Freerisk site.

Freerisk is explicitly gunning for the major rating agencies. It’s unlikely they’ll make a short-term dent in the revenues of the big three players, each of which operates with governmental imprimatur, but the risk is that Freerisk over time calls the credibility of these entities into question, a potentially more damaging outcome, and one not outside the realm of possibility. Ratings agencies aren’t the most popular folks these days, and if this young upstart embarrasses them with a series of prescient calls, it could be enough to topple this highly profitable oligarchy.

The lesson for content providers: there’s no room for complacency. New competitors spring out of nowhere, and the web provides them with near-equal footing with you. Further, the economics of the web not only reduce barriers to entry, but they enable even failing businesses to hang in for extended periods of time, causing you pain all the while. Indeed, it’s not unusual for a website to launch with no revenue model (some plan to figure one out down the road; some don’t ever intend to generate revenue).

The solution? The best offense is a good defense. You can’t anticipate these new competitors, and you can’t (and generally shouldn’t try to) fight them. All you can do is stay close to your customers, deeply understand their needs, give them tools that they come to depend on to operate their businesses, and oh yes … always sleep with one eye open.

Searching for Quality

2009-06-12T10:44:00.000-04:00

I'm in research mode for a client project right now, and that's all it takes to re-introduce me to the sorry state of site search - the capability a publisher provides for users to search just within the publisher's own site. The only conclusion I can draw from what I see is that publishers view site search as an expense to be minimized, and programmers view it as not worthy of their time and talent.

That's a big mistake.

Visitors to your site who use your site search capability are engaged users. They're investing time to probe deeper into your site because you've convinced them you are relevant to their interests and needs. These are prime visitors who you can monetize through advertising or a la carte sales of content. These are also visitors who'll likely come back again if you provide a rich and rewarding experience. Yet despite all this upside, site search is typically an afterthought. Here's my list of top offenses:

- Limiting yourself to low-cost or free site search software without regard to the kind of experience it delivers to the users of your site.
- Failing to integrate site search results into the site's style sheet and theme (usually because the designer is long gone before site search is implemented). Besides the jarring visual disconnect to those searching your site, your site screams "we don't care" which brings the value of your content into question.
- Providing only global site search capabilities. If your site contains different types of content, let users limit their searches. If I am on a newspaper site searching for a restaurant review, I don't want to wade through classified ads, news stories and obituaries in my search results.
- Not using content tags for searching. Most publishers are tagging all their content inside powerful content management systems to improve the front-end site experience, but I see little evidence that all these powerful CMS capabilities are being used to improve the back-end (i.e. site search) experience.
- No power searching capabilities. There's nothing more frustrating than reviewing results in order of relevance when date order is what you really need. Just a few simple options like this can radically upgrade the site search experience.
- No dates. A personal pet peeve of mine, there's nothing more frustrating than finding an absolutely on-target article through a site search and having absolutely no idea what month, year or even decade it was written, immediately rendering it worthless.

When you also consider that because many publishers hold their archives in database form meaning they are not typically visible to the big general search engines, site search gives publishers one shot at unlocking the value of this content. Instead, most are shooting themselves in the foot.

Fill 'er Up

2009-06-05T11:56:00.000-04:00

A new launch by Picaphone, which aims to create the first international phone directory, caught my eye this week so I decided to check out www.picaphone.com.

After dozens of searches for all types of companies, big and small all yielded no results, I was pushed to an inexorable conclusion: this database nothing in it.

Back to the press release again and I noticed the statement, "The success of this ambitious project depends on the cooperation of web surfers all over the world." Yes, it's all about user-generated content, but with the remarkable goal of trying to collect every telephone directory listing in the world. Imagine how many listings would have to be contributed (and maintained) for this to become a site worthy enough for users to return to repeatedly.

I certainly have no beef with this company's audacious business objective. My point is that the window is rapidly closing for online data ventures that set up shop with a user interface and back-end database and then say to the world, "fill 'er up." Why? Very simply, the novelty factor is gone. That's why last year's Data Content Conference featured companies such as Snooth and BrownBook. Both these companies see user-generated content as integral to their success, but both started out supplying an initial dataset that delivered value while encouraging users to augment this information. With this approach, these companies deliver value to users immediately, rather than hoping magic will happen and users will do a credible (and rapid) job building out the database from scratch. I'd go so far as to argue that the bigger the scope of a user-generated database product, the more important to provide an initial dataset.

But what about companies like Jigsaw and Linked-In you may properly ask. These two very successful databases were built entirely from user-generated content. To this I would respond that these companies caught the wave of early excitement around user-generated content, so they had great timing going for them. I'd also argue that these databases, while they certainly became more valuable as they got bigger, were still able to deliver value to users while quite small. Think about it: both Jigsaw and Linked-In could deliver some value to users with 50,000 names; a database claiming to be a global telephone directory cannot.User-generated content certainly isn't dying; in fact where user-generated content augments a publisher's existing database it is very much alive and well. User-generated data products where the database starts completely empty are also lacking much promise.

Questions About Answers

2009-05-29T17:55:00.000-04:00

A new enhancement from giant Canadian yellow pages publisher Yellow Pages Group caught my eye this week. It seemed to promise a live concierge service for users. You pose a question, such as "I'm looking for a good Chinese restaurant in Toronto," and you get a real-time response.

I surfed over for a look at the new feature, called "Yellow Pages Answers." Immediate disappointment. Here's still another publisher that simply grafted a social networking capability onto its database, with no apparent understanding of the fundamental dynamics of either social networking or yellow pages publishing.

First and foremost, social networking demands engagement, and that in turn usually means shared interests or some other compelling reason to participate and remain involved. Are there really people who find it cool, fun or interesting to be part of a community of yellow pages users? What shared interests do these millions of users who are doing quick information lookups have? Would you trust their recommendations?

Equally important, yellow pages is what I like to call a "point of purchase" medium. You only use the yellow pages when you want something, usually immediately. Submitting a question where you have to keep checking back for an answer, which might never come, is antithetical to the yellow pages raison d'être. The only people inclined to respond promptly are those with vested interests (owners of Chinese restaurants in Toronto, using my earlier example), or people with way, way too much time on their hands.

If Yellow Pages Group had launched a real concierge service that used it own staff to provide immediate answer, I'd be impressed. Certainly there would be lots of issues for an advertising-based medium to make recommendations, but at least there would be real user value. But encouraging your users to make vendor decisions based on recommendations from strangers comes with plenty of issues as well, not the least of which is how does this help my advertisers?

I hold up Yellow Pages Answers not to ridicule it but as an example that while social networking tools have their place and can be powerful and valuable, just because you can graft them onto your website doesn't always mean you should.

No Reservations About OpenTable

2009-05-22T09:16:00.000-04:00

OpenTable went IPO on Thursday, running up nearly 60% in its first day of trading (NASDAQ: OPEN). It was a much-needed "green shoots" moment for Wall Street, but it also speaks to the current favor in which subscription-based data products are held.

Does it seem odd that I am describing OpenTable, a nationwide online reservation system for restaurants, as a data product? We had a lot of discussion around that when we gave an InfoCommerce Model of Excellence award to Open Table in 2006. What swayed us in the end was its incredible workflow integration characteristics, coupled with all its data potential, much of it still unleashed.

Nobody could ask for tighter workflow integration. Restaurants that sign up for OpenTable have no choice but to make a total commitment to letting OpenTable manage all their reservations -- online and offline. You simply can't use it effectively otherwise. And once a restaurant has accustomed itself to OpenTable, enjoyed its convenience and seen the power of the online reservations pouring in through the OpenTable booking website, there's no turning back. Restaurants turn off OpenTable at their own peril!

But what about the data? Well, it starts with the fact that OpenTable is building a huge experiential database of dining activity. Registered users of the system even supply demographics, and OpenTable can easily overlay more. That means OpenTable knows with incredible precision, who eats where and when and how often. Think about an analytics and advisory business based on that data, much like MasterCard created MasterCard Advisors to leverage it analgous base of transaction data.

OpenTable is also well positioned to track no-show reservations, the bane of every restaurant. OpenTable could create a no-show score, much like a credit score. This would permits restaurants the option to either defensively overbook or perhaps demand a credit card in advance from such diners.

Open Table could help restaurants understand how they are doing versus their peers and competitors. It could help them learn how they are being discovered on the web. It could create customized promotion codes of landing page URLs that restaurants could use in their advertising to track response rates. It could tie into mapping data for site selection research. And the more it does, the smarter it gets, and the more valuable it becomes.

Intriguingly, Zagat Surveys was an early investor in Open Table, a relationship (presuming it still exists) that has been woefully underexploited. Tie the leading online reservation system to the leading rating system and an incredible number of opportunities emerge.

The key to OpenTable is that it successfully injected itself into an industry's order flow. Act One was to perfect the technology to make that possible. Act Two will be mining the rich data that results. From there, the future is OPEN.
(Since this may read as if I am playing stock tout this week, it seems right to mention that we have no business relationship or financial interest in any of the companies mentioned here.)

When Features Collide

2009-05-15T12:44:00.000-04:00

Google's uses an annual press event it calls Searchology to trot out its new search features and other new offerings. Two new features caught my eye. Individually, they are useful and fascinating. In combination, they are potentially disruptive.

The first new offering, scheduled to go live imminently, is called Google Squared. It's an attempt to present search results to the user in spreadsheet format. You'll type in a standard free text query, for example, "baseball teams" and Google will return a spreadsheet where the rows consist of each team in baseball, and the columns are determined dynamically, such as location, league affiliation, etc. In short, Google is attempting to create structured data from unstructured web page content. Does it work? As you might suspect, it's far from perfect, but at the same time, it's a remarkable start.

Another new feature announced by Google is called "rich snippets" which involves putting more structured data in search results by drawing on web page metadata (in particular, pay attention to Google's support of a microformat called hCard). With rich snippets, which is being rolled out slowly, Google can now display star ratings for restaurants right in its search results, standardized address information for businesses, and disambiguated person data (initially courtesy of Linked-In) that will show company affiliation and job title right in the standard search results screen.

Okay, here's the disruptive angle to this. Fast forward a few years and it sure sounds that with more structured business and individual contact information available through Google, along with tools like Google Squared that allow output in spreadsheet format, it's entirely possible that users will routinely be able to easily create and export business mailing lists, organizational charts and much more. The more microformat data Google is able to access, the more high quality, structured output Google will be able to deliver to users and in a popular data interchange format to boot. Given Google's preferred price point for information (zero), there's a very real possibility of some disruptive change on the horizon.

Recommended response? Remember that basic contact information had been becoming commoditized for a number of years now. These Google offerings will only accelerate an existing trend. The future for data publishers is to continue to relentlessly push up the value chain delivering deeper, smarter information to customers in ways that integrate into their workflows and business processes.
2009 Model of Excellence Award Nominee: Boardroom Insiders

We're pleased to announced that Boardroom Insiders has been nominated for a 2009 Model of Excellence award for its "Boardroom Insiders" product.
Click here for our full MofE product profile.

Remember Your CMP's

2009-05-08T12:37:00.000-04:00

I am just back from the American Business Media annual conference in Florida. Since this is the leading association of business magazine publishers, I expected the mood to be dour. After all this, this is an industry that has remained stubbornly wedded to not just advertising, but print advertising, and has consequently been hammered in this economic downturn.

The mood I encountered was actually somewhat upbeat and distinctly resolute. This downturn, I heard time and time again, is forcing publishers to make hard decisions and take decisive action to evolve their businesses.

And what's the focus of this evolution? Interesting to me at least, it's not data. While these magazine publishers are increasingly appreciative of the stable, recurring revenues data products can offer, they remain largely outside their comfort zone. Instead, the conference buzz centered on the notion of magazine publishers evolving into marketing service companies. The idea is to move off a singular focus on ad pages to staging events and promotions, building websites, whatever the advertiser needs. As my colleague Janice McCallum notes, this isn't exactly a new concept, and it begins to blur the lines between publisher and agency.

Are there dangers in this? Most particularly, do publishers risk "biting the hand that feeds them" as they start to move onto agency turf? The conference panelists took a combative stance in response to that exact question, suggesting that agencies were moving onto what has traditionally been the turf of publishers, particularly in the area of building communities on behalf of their clients. No talk of cooperation or partnering here. Rather, the recommendation was "get them before they get you."I admit to being energized by all this talk of marketing services. It's a concept that makes sense, and the dollars and the margins being discussed are big enough to yield fast and positive financial results for many magazine publishers. My caution to these publishers, however, is to remember what's enabling this fast move into marketing services, something we call Central Market Position. Most business magazine publishers occupy a central, trusted, respected and neutral position in the markets they serve. Central Market Position provides a uniquely powerful platform to exploit any number of market opportunities. Moving too aggressively into marketing services risks damage to this position, and that could mean that the hunt for short-term dollars could conscribe future growth opportunities.

A Model of Excellence Winner Does Us Proud

2009-05-01T13:14:00.000-04:00

I don't think you can gush too much about a data content company that has an army of hundreds of thousands of field researchers gathering company and executive information, data entering it all into a central database, and best of all, doing it all for free. That company, as you may have guessed, is Jigsaw, an InfoCommerce Group 2005 Models of Excellence winner, and the company is finishing up a very busy week.

On Wednesday, Jigsaw announced the launch of Data Fusion, a service that I think truly qualifies for the label "revolutionary." Simply described, Data Fusion hooks seamlessly to company CRM databases to perform continuous data scrubbing. This scrubbing goes far beyond merely standardizing existing data to deleting dead records, updating current records and even adding new records. Data Fusion is a SAAS (software as a service) offering, meaning no software to buy or install, and steady recurring revenue for Jigsaw. I've been in this business for nearly 25 years, and publishers have been fantasizing about an offering like this for at least 24 of them.

On Thursday, Jigsaw announced a deal to license its executive contact information to D&B. It's a pretty slick maneuver when you can turn a competitor into a sales channel, and if nothing else, it's a major validation of Jigsaw's data quality and increasingly comprehensive database. All-in-all, not a bad week!Lessons for the rest of us? First, you can build a trusted, quality database off user-generated content if you go about it correctly. Second, the users who contribute data to you don't seem to mind at all if you aggressively monetize the resulting database, provided they continue to see value in participating. Third, with a well-crafted licensing agreement, it is possible to do business with competitors, so don't rule out this possibility without thorough examination. Fourth, software can add tremendous value to data when it empowers the business processes and workflow of your customers. The goal, as I like to put it, is to move from reference-oriented data to "data that does stuff." Jigsaw is showing us all that success in data publishing isn't puzzling at all.

Mark your calendars now to meet this year's Models of Excellence companies at the InfoCommerce Group's annual Data Content09 conference, October 27-29, at The Ritz-Carlton, Philadelphia.

2009 Model of Excellence Award Nominee: Telnic Limited

We're pleased to announced that Telnic Limited has been nominated for a 2009 Model of Excellence award for its "dot tel" product.

Click here for our full MofE product profile.

Fresh Ideas from a Stale Sector

2009-04-24T09:28:00.000-04:00

Pinch me, I must be dreaming: I am seeing product innovation and fresh thinking coming from a most unlikely source: a major yellow pages publisher, in this case, Idearc.

I wrote several weeks back about the new Idearc "Super Guarantee" program. Participating yellow pages advertisers get (for a fee) to run a special logo in their ads that guarantees customer satisfaction with Idearc as the arbitrator. If a consumer is dissatisfied with one of these participating advertisers, Idearc steps in to mediate. If no happy compromise can be arranged, Idearc will pay the consumer up to $500. Now here's a real reason to use a specific yellow pages product.

A recent FT.com article points out a host of other innovations, starting with a "Super Trade Exchange," an online barter site for the exclusive use of Idearc advertisers.

But perhaps the most intriguing idea out of Idearc is to re-position itself as "an ad agency for small businesses." The company's vaunted salespeople have been re-branded as media consultants, and they're being trained to help small business advertisers with all their advertising needs, including direct marketing. Idearc is even contemplating the idea of becoming a sales rep for its arch-enemy: local newspapers.

I've talked for many years about this notion of buying guide publishers filling more of the advertising needs of their small business advertisers. In fact, many online buying guide publishers are already driving significant revenue by helping their advertisers build and maintain websites and manage their search engine pay-per-click programs. Key to the success of initiatives like this is a simple fact: almost nobody talks to small businesses about their advertising and marketing needs. Anyone who reaches out to this community has an immediate opportunity. That's why yellow pages salespeople, who at best visit their advertisers once a year, can still morph almost overnight into trusted advertising advisors: there isn't anybody else out there. Buyers' guides in vertical markets are arguably in even a stronger position, because they know the industry's products, its issues and its lingo.
Keep an eye on Idearc. The ideas are strong, they're being put to use quickly, and execution looks strong. Maybe someday they'll apply some of this creative energy to developing a better company name!

Yesterday, I stumbled across a press release from a German company called NOUSguide announcing its new deal with the San Francisco Museum of Modern Art. NOUSguide develops interactive museum guides that can be viewed on iPhones and other devices, and that can be distributed on-site at museums via Wi-Fi, or globally via the iPhone App Store.

I don’t usually pay too much attention to specialized products like this, but this is noteworthy because it flips the whole concept of guidebooks on mobile devices on its head. Think about it: all the buzz on mobile devices for the last ten years has been on coupling them with GPS capabilities to make it easy to figure out where to go. The classic example is an online yellow pages that helps you select a nearby restaurant and then directs you there. What NOUSguide does is exactly the reverse. Instead of telling you how to get somewhere, it tells you about where you are.

I immediately thought about city visitor guides. Imagine an online application of the city guide that was centered on telling you about what’s around you at any given moment. It’s surely more interesting, useful and valuable than the traditional endless lists of everything you can do in a ten mile radius. With a good database behind it, an online guide such as this could even be programmed to beep or send alerts when the user was in range of a certain type of museum, store or restaurant. There would be endless potential ways to add even more value to such an application. If such guides currently exist, I am not aware of them, but it’s clear we’ve only begun to explore the explosive possibilities when you marry mobile devices database and geolocation capabilities. You can look forward to learning more about taking data mobile at InfoCommerce Group’s annual conference, Data Content09, October 27-29, The Ritz Carlton Philadelphia.

Who's Hiring?

2009-04-17T09:27:00.000-04:00

The Folio Alert in my inbox yesterday had as its headline "Questex lays off 40." That's just one of an almost daily parade of layoff announcements I am seeing from the world of B2B publishing. It would be easy to conclude that B2B publishing is, to use the words of industry pundit Paul Conley, "in a death spiral."

That's why a news item that noted Bloomberg is on track to make over 1,000 new hires this year is so noteworthy. Why all the hiring? It's primarily to support future growth on the data side of its business.

One thousand new jobs. And this in the midst of a steep economic downturn. From a company that depends on a decimated industry - financial services - for its revenue. It's hard not to be impressed.
So what's Bloomberg doing right? We can start with being a subscription-based business with multi-year contracts that lets it ride out economic downturns more easily than most. We see a strong brand and good quality content. We see a product that is integral to client workflow. We see high-value information that drives high stakes business decisions. But most importantly of all, we see data.

Public Data Central

2009-04-17T09:23:00.000-04:00

The federal government's brand-spanking-new Chief Information Officer, Vivek Kundra, was interviewed yesterday by Government Computer News about some of his planned initiatives for the federal government.

What's most notable about these remarks is that high on Kundra's agenda is an ambitious plan to centralize federal databases and data feeds at a new site to be called data.gov. Most significantly, Kundra sees this rich pool of data fueling all sorts of new products and creating new business opportunities.

The article notes that in his former position as CIO of the District of Columbia, he launched an initiative called "Apps for Democracy" that encouraged businesses, non-profits and individuals to build applications based on District of Columbia data so the government wouldn't have to do the work in-house. Now that's progressive thinking!

What are the implications for data publishers, particularly those already making heavy use of government data? This initiative could be a two-edged sword. On one hand, it creates real pressure to make more government data conveniently accessible. On the other hand, it's likely to create more competition from online start-ups start seeking to capitalize on the value of these new databases.

The secret for success is not simply to re-format or even aggregate these government databases, but add value to them. Government data are almost by definition messy data, so there is value in scrubbing and normalizing it. Government data are almost always not current, so value can be added by bringing them up to date. Government databases are often deep, but not with information that's necessarily of any commercial value. Data augmentation can often add tremendous value.

Profiting from this promised flood of new government databases means treating them as starting points, not destinations. Adding value to data is something we all know how to do very well, so let the race begin!

Making Contact

2009-03-27T10:26:00.001-04:00

I'll start this off by admitting I only have a fuzzy grasp of the underlying technology, but that doesn't stop me from believing there are interesting opportunities to be mined as an increasing number of major social networking sites are making member contact lists available through an API (Application Program Interface), based on a new collaborative standard called Portable Contacts.

Through Portable Contacts, you can build the capability into your online applications that enables your users to seamlessly access their address books stored on Google, MySpace, Plaxo and others. Word on the street is that other major social networking sites will jump on this bandwagon shortly. The operative word here is "seamless," meaning it's easy and convenient - users need not enter additional passwords and you don't have to do any screen scraping on their behalf.

At its lowest level, this is an opportunity to add more convenience to your online products. A user may want to forward a data record directly from your site to a colleague. With this new API, that could be as easy as providing them with a pre-populated pick list of all their colleagues.

But let's think more expansively. Lexis-Nexis has a powerful capability on its martindale.com site that lets you see if anyone in your Linked-In network knows any lawyer in the Martindale database that is also listed on Linked-In. What a powerful way to pre-qualify a lawyer you might want to hire.

Consider also Leadership Directories. Its Leadership Networks product lets you visually map how you and your colleagues connect to the most powerful and influential people in America. This API makes this type of functionality much easier and more powerful.

This initiative is all about seamless connectivity. And as I have said endlessly, data products can't thrive as standalone references. The more they integrate with other applications and embed themselves in business processes and workflow, the more powerful they become. Here's just one more way to accomplish that.

Sell What They Are Buying

2009-03-20T10:57:00.000-04:00

A fascinating new study called "Main Street Goes Interactive," from Borrell Associates takes a thorough and much-needed look at the advertising practices and attitudes of the so-called SMB (Small and Medium Businesses) segment - a poorly understood and fitfully researched pool of over 14 million U.S. businesses that collectively spends many billions of dollars annually on advertising.

In many respects, the SMB market is a victim of its own label: it's hard to draw too much insight when you lump small manufacturers and distributors, retailers and even restaurants into one undifferentiated group. At the same time, the Borrell study is more focused, and many of its top-line findings track well with research we've seen from data publishers surveying their own markets.

The Borrell study places SMB average annual revenue at just $212,000, with average annual advertising spend of $5,671. Where are these businesses spending those advertising dollars? Most typically in yellow pages, direct mail and coupon-based media. Perhaps not surprisingly, SMB's are migrating to the web, with 11% of the advertising budgets now spent online, up from 4% just three years ago.

A key study finding is that SMB's see the cost of building and maintaining their websites as part of their advertising expenditures. This insight is useful in helping to inform us how SMB's think about advertising, but ultimately it's a distinction without a difference. For most SMB's, their website is their capabilities brochure and/or their catalog. When I send out direct mail, I don't separate out the cost of the artwork and the paper and the printing from the cost of the mailing list and the postage. It's all an advertising expense to me. And that's apparently how SMB's think as well.

The more important point is that websites are now central to the advertising strategies of SMB's. According to Borrell, two-thirds of SMB's plan to spend more on their websites this year. It's also important to note that SMB's are fans of online directories and search engine marketing.

This study documents what an increasing number of savvy online data publishers have already discovered (think ThomasNet and Martindale-Hubbell among many others): the best way to buttress online advertising revenue is to help SMB clients improve their own websites, whether through design services, creation of online catalogs, providing SEO services, or even managing SEM programs.

SMB's are not sophisticated advertising buyers and they need assistance in this area. Those data publishers that are moving beyond solely selling online advertising to supporting SMB's with agency-like services for what SMB's consider to be a big part of their advertising activity - their own websites - have found both a warm reception and multiple new revenue streams. If you're not doing it, it's a strategy well worth considering.

No Help From Yelp

2009-03-06T11:23:00.000-05:00

As soon as you visit the popular website yelp.com, you'll know you're looking at the future of the yellow pages business ... and you'll also see why yellow pages publishers are finding it so hard to get real traction online.The young start-up combines an accurate and deep city-specific directory of all types of local businesses with user reviews and ratings that provide site visitors with plenty of information to make informed choices about local vendors. Beyond this, Yelp provides local event guides and works hard and apparently succeeds in building a sense of community among users of the site. Yelp also innovates. I previously wrote about Yelp's clever process for summarizing user comments to make them more useful.

But a recent profile of Yelp in the New York Times leaves me thinking that the company's founder is offering up more attitude than answers to the company's growing pains.

You see, Yelp generates revenue by selling advertising to the very businesses its users are posting comments about. Invariably, those two activities come into conflict. The article cites a business that called Yelp after a sudden and unexplained drop in its overall rating, and got no assistance. Yelp's founder, Josh Stoppleman, dismissively blamed the problem on an "overly vigilant" spam filter meant to cull suspicious reviews. If Stoppleman had even the slightest concern that his algorithms were impacting revenues of small businesses - the very businesses he wants to advertise - it didn't come across in the article.

When a local restaurant complained about a negative review regarding a dish the restaurant didn't even serve, Stoppleman told the Times, "We can't referee factual disputes. Why believe the business owner who has skin in the game?"

Throughout the article, the implicit message from Yelp to the business community is that "you need us more than we need you." And quick, can anyone think of another group that adopted that same attitude towards local businesses? Right, the yellow pages publishers.

And what of the late lamented yellow pages industry? Well, while Yelp exhibits more and more hubris rather than trying to address real issues with its business model, the yellow pages industry is in fact going back to the drawing board on its business model.

One great example of fresh thinking comes from SuperPages.com, which just launched a program called SuperGuarantee that guarantees its users a satisfactory experience with any service provider sporting the SuperGuarantee logo. Complain to SuperPages, and they'll resolve things to the customer's satisfaction or offer reimbursement up to $500. Best of all, users must register with SuperPages to take advantage of the guarantee, providing incredibly powerful proof of ROI back to participating advertisers.

Why is a giant yellow pages publisher willing to roll up its sleeves and get involved in messy customer disputes when the young, hip, cool start-up is so unwilling to address even clear-cut factual disputes? I think some of the answer is cultural. Too many online start-ups I see seem intent on building black box systems designed to avoid any customer interaction. Great work if you can get it, but the real world is messy, and most of the online services I see really can't deliver maximum value and utility on a totally automated basis. User needs can't be reduced to online forms. What the article on Yelp screams to me is that Yelp simply doesn't want to do the work - too messy, too slow, too labor-intensive. Unfortunately, that's a big part of what publishing is all about. And that leaves an opening competitors can drive a truck through.

Do You Excel?

2009-02-27T10:58:00.001-05:00

The Internet has fundamentally impacted every segment of the publishing industry. But for data publishers, a parallel development that is not often discussed has had as significant an impact. This development, stated simply, is that personal computing, with little fanfare, has finally begun delivering on its promise.

What do I mean by this? That personal computers, and in particular their software, are finally able to do most of the things we were always told they could do, and do them simply and painlessly. That means users - in particular average users - can now confidently download, manipulate, manage and output data. And when people can readily unlock the value of data, they not only buy more of it, they are willing to pay more for it as well. The Internet has freed us from having to communicate with incompatible systems. Hardware advances have brought vast amounts of processing power, memory and disk capacity to almost every computer removing another layer of constraint. Software advances have resulted in software that is easier to master, more stable and more capable than ever before. Our customers are all now routinely working with data in ways that would have been unimaginable just 15 years ago.

But have we licked all their issues and solved all their problems? Not quite yet. The emerging issue I see is that the rapid growth of hosted applications and cloud computing is creating a vast number of data silos - standalone software applications driven by standalone databases.

We are a small company, but despite that (perhaps because of that) we use a number of hosted applications for such things as accounting, bulk email distribution, online surveys, etc. We also subscribe to a number of online databases, and maintain our own in-house database as well. My constant ongoing frustration: none of these applications talk to each other. All these applications do, however, allow me to export my data to Excel or input data from Excel, making it the default format for data interchange. That works, but it's a variation on the old "sneaker nets" of years ago. It's not convenient, it's not efficient and it's prone to error.

There's a huge opportunity here for data publishers who recognize that no matter how powerful and robust their online applications are, they shouldn't be operated as islands. Design your application so relevant data can seamlessly enter and leave your application and you are positioning yourself to become a data hub for your customers. It's taking the concept of workflow integration to the next level: in addition to powering specific business activities, you can help companies centrally manage key datasets. It's a natural role for many data publishers to serve as central data platforms for their customer. But to excel in this area, we need to think beyond Excel.

SAVE THE DATE: INFOCOMMERCE 2009 WILL BE HELD OCTOBER 27-29 AT THE RITZ-CARLOTN, PHILADELPHIA.

It's All How You Look at It

2009-02-20T11:45:00.002-05:00

There's nothing like data visualization tools to bring your data to life for subscribers. And "living" data is not only more interesting and compelling, it's more valuable too.

For most subscription data products we've seen, however, the approach to data manipulation can be described as "you're on your own." Subscribers are allowed to download data in spreadsheet format, and they can analyze it any way they want with whatever tools they want.

This sounds like a perfectly reasonable compromise, and it is, but at the end of the day it remains a compromise. With competition strong and customer expectations high, it's increasingly risky to push customers to use your data outside your application. The more you do for them, the more value you provide, and the happier your subscribers will be.

That's why we were intrigued by the tour we got recently of a newly launched site called GraphPortal.com. GraphPortal offers a powerful capability for quickly and easily building interactive graphs of your data. Even more exciting, you can embed these graphs on your own website, all free of charge. If you want the world to know about your data, you can optionally publish your charts to the GraphPortal site, where they are available for others to use on their own sites, a graphic form of viral marketing.

Keep in mind these graphs are not static; users can filter and manipulate them for different views of the data (Excel users: think pivot tables). Click here or on the image above to get a sense of the power of these graphs -- which can be chained together to form a presentation "deck." There's even a way to add annotation to each graph.

And yes, the folks behind GraphPortal have a revenue model: they'd like you to buy the underlying software, which you can run in-house or use on a hosted basis. The software, which is more powerful than the features available in GraphPortal, even allows the development of interactive "data dashboards."
Is GraphPortal for everyone? No. If you've got a graphing capability as part of software you already use, GraphPortal doesn't bring much to the party. But if you're dabbling in graphic presentation of your data and would like to get your feet wet without a big up-front investment, it's well worth a look.

All a Twitter

2009-02-13T12:37:00.000-05:00

You've doubtless noticed the phenomenal buzz surrounding Twitter, a social networking service that allows very short messages (140 characters or less) to be broadcast to a closed group, or publicly to as many people as may choose to sign-up to receive your messages or "tweets."

What purpose does Twitter serve? It appears the overwhelming majority of users are tweeting their current activities to their groups, "I'm in the car going to the mall" and the like. Why anyone wants, much less needs, to know the activities of others in such excruciating real-time detail is a discussion best left to mental health professionals.

Ah, but who cares about its purpose if it's making gobs of money. Actually, you may not be surprised to learn that Twitter not only doesn't generate a profit, it currently doesn't generate any revenue. There are even third-party contests now to suggest a revenue model for Twitter!

Yet, the buzz around Twitter continues to grow. You can bet that we'll shortly be hearing the case for why Twitter makes sense in B2B environments. An article in yesterday's New York Times illustrates how we will begin to move down this slippery slope with the writer recounting his use of Twitter while on a panel at a conference. He sent out a tweet pertaining to the panel conversation and quickly received useful responses. Frankly, this strikes me as akin to conference speakers and panelists doing Google searches to answer audience questions, but let's not stand in the way of the Twitter juggernaut with such trifling objection s.

Twitter is fun. It is interesting. I am not sure how much of a breakthrough it is given that you can easily send an email or instant message to a pre-established group, and you can certainly post to a blog that others can subscribe to and receive push updates. We're not lacking for ways to communicate, and an arbitrary 140 character limit precludes most serious uses. So let's not tie ourselves up in knots seeking B2B applications for Twitter.

Some are comparing the superheated buzz around Twitter to the superheated buzz that once surrounded Second Life. I also recall the insistent refrain that Second Life had huge B2B applications as well. Remember Second Life? Enough said.

ISN'T IT IRONIC DEPARTMENT: It was reported today that Google has purchased a newsprint mill in Finland ... in order to convert it into a data center for its online search operations.

The Blue Book Adds New Website Features

2009-01-16T10:23:00.001-05:00

The Blue Book of Building and Construction, which serves the commercial construction industry with its database of general contractors, subcontractors and suppliers, has launched a new feature on its website (www.thebluebook.com) designed to help construction professionals better manage their vendor contacts online.

The new offering, "My Blue Book," is a free application that enables registered users to customize the selection, sorting, viewing and storage of information found in The Blue Book database. Additional functionality has been included, such as the addition of "My Contacts" and "My Preferences" tabs that allow users to access their private vendor information.

This is a great idea from The Blue Book and will certainly be well-received by users. Online personalization is huge these days. Users want the features and functionality that online databases afford, but they also want to be able to manage their data in a way that meets their own personal needs. Enabling users to do just that will make them even more likely to utilize your content in the first place, make that content even more valuable, and will also motivate those users to return to your site again in the near future. Personalization can most definitely equal loyalty and retention.

Hopefully, The Blue Book isn't finished adding these personal touches to its website.

InsideView Receives Additional Financing; Looks to Expand Offerings

2009-01-16T09:56:00.001-05:00

InsideView Inc., a Sales 2.0 application provider, has announced that it has secured $6.5 million in second round financing, which was led by current investors Emergence Capital Partners and Rembrandt Venture Partners. InsideView plans to use this latest financing to bolster its sales and marketing functions and further develop its platform.

InsideView's Sales Intelligence application, SalesView, works like this: it uncovers sales opportunities across traditional editorial sources and social media and presents them directly within a CRM application. SalesView is designed to help sales teams increase their productivity by helping them determine the right prospects to connect with at the right time.

InsideView leverages Sales 2.0 technology by aggregating and analyzing the personal, professional and corporate information that is available in social networks, websites and subscription-based sources to help users find new customer engagement opportunities. InsideView's CRM mash-ups provide sales professionals with real-time access to news alerts, relationship analysis and company information.

It's not surprising that InsideView has received this monetary support along with the confidence by its inventors that the company will continue to succeed. Regardless of the economic climate, sales and marketing professionals are under enormous pressure to succeed as well. Yet, during our current economic situation, that pressure is building.

Thus, the need for solutions such as InsideView's SalesView is undoubtedly strong and will continue to grow. The premise behind InsideView's technology is already very impressive: utilizing such online content as social networks is certainly innovative and most likely very effective for sales professionals seeking any competitive advantage they can gain. It will be very interesting to watch how InsideView uses this latest round of financing to improve the features and functionality of the SalesView solution even more.

Transparently Clear

2009-01-16T08:29:00.000-05:00

In a settlement announced this week with the New York State Attorney General, UnitedHealth Group has agreed to shut down two databases maintained by its Ingenix subsidiary. In addition, UnitedHealth will pay $50 million to re-create the databases under the aegis of a non-profit organization to be established for the purpose.

The two Ingenix databases involved are Prevailing Health Charges System and the Medical Data Research database. The two products track "usual, customary and reasonable" physicians' fees. Most insurers use Ingenix's data, which is not available to the public or doctors, to calculate patients' out-of-pocket costs when they seek out-of-network care. Physician groups have complained bitterly about under-reimbursement driven by these databases, and consumers may have been under-reimbursed as well. This settlement does not address the claim of under-reimbursement.

In addition to the under-reimbursement claim, the New York State Attorney General also attacked the Ingenix data products for "lacking transparency." It does seem remarkable that a commercial, subscription-based data product would be obligated at all to be transparent. The New York Attorney General also charged a conflict of interest in that Ingenix is a subsidiary of a health insurer that also makes use of the Ingenix data for calculating reimbursements. Again, what's implicit in this charge is that these databases are so important that they've become bigger than the organization collecting them and become something of a public trust.

This settlement brings to mind the furor that erupted in 2006 when the First DataBank unit of Hearst Corporation was engaged in what appeared to be some very sloppy updating of its wholesale average price database for pharmaceuticals. Instead of surveying the industry to develop a true price average, it was instead gathering all its data from a single drug wholesaler. As a private, subscription data product, this would normally be just a huge embarrassment. In the case of First DataBank, however, this database was driving pharmacy reimbursement rates nationwide and reportedly led to inflated reimbursements to the tune of many billions of dollars. Here again, we have an example of a private industry database with outsized influence. While Hearst can't be claimed to have had any conflict of interest, this clearly seems to be a case were increased transparency regarding data collection practices might have prevented the problem in the first place.

Should private sector databases that are used to drive payment systems, particularly where taxpayer dollars are involved, seek to meet a higher standard of transparency? On reflection, I think the answer is "yes." Data publishers whose products fuel mission-critical applications shouldn't need to hide their work. If your work is sloppy, you have a perpetual litigation threat hanging over your head, as these two cases well illustrate. If your work is first-rate, you have a selling advantage. As to the proprietary aspects of building a database, I'm not (necessarily) suggesting that you open your algorithms to the world, since their quality can be measured based on results. Rather, I am suggesting that your data inputs and your process for creating gold from dross might benefit from some sunshine. After all, any data publishing veteran knows well that most of our value is wrapped up not in secret methodologies but rather that we sat down and did the messy work nobody else wanted to do. We aggregate, we scrub, we normalize, we purify. It's not rocket science, and there are few secrets, just skilled practitioners. In our business, transparency builds trust, and trust builds increased utilization, meaning greater revenues. Suddenly, the case for transparency seems perfectly clear.

European Union Investigating Standard & Poor's

2009-01-14T09:18:00.001-05:00

According to media reports, European Union regulators are investigating Standard & Poor's to determine if the credit rating agency broke monopoly abuse rules by collecting fees from banks and investment funds to use S&P's identification codes.

S&P apparently requires these financial firms to pay a fee each time they use an international securities identification number to access financial information from content service providers such as Thomson Reuters and Bloomberg. S&P manages the CUSIP Service Bureau for the American Bankers Association. It serves as the only agency to receive first-hand information from all U.S. securities issuers and licenses the data to market information services.

The EU says that investors are paying to access a database they don't use and are being charged to access a code that they need to conduct their daily business activities. The EU also says that it has received complaints that S&P is ordering information providers to cut data feed access on U.S. securities to financial institutions if they didn't pay to use the codes.

S&P has responded through the media by saying that its licensing practices and charges follow industry practices and are fair. It is likely that this investigation will continue for a while as the EU more closely examines S&P's business model to determine if the company is acting improperly. It will be interesting to see how this will be resolved and if it will lead to changes in business practices for S&P and similar information providers.

More Risk, Less Reward

2009-01-09T12:27:00.000-05:00

I noticed in a small blurb this morning that LexisNexis had spent over $2 million on acquiring an interest in a company called RocketLawyer described as a lead generation site for lawyers. There are lots of good reasons LexisNexis might make a move like this, notwithstanding its ownership of lawyers.com, which is, surprise, a lead generation site for lawyers. This did get me thinking though that lead generation offerings are becoming ubiquitous.

We're evolving, rather quickly, from a model where advertisers purchased access to our audiences. We've spent the last several years enmeshed in a pay-per-click model, where advertisers only paid if some particular action, usually a click-through, was taken against an online advertisement. Now, the ante is rapidly being raised once again, to one where publishers are delivering screened, qualified and active prospects to advertisers.

For several years now, I've been saying that the pay- per-click model was really all about a shift in risk from advertisers to publishers. Technology and a lot of innovation by the search engines helped advertiser rapidly evolve from "you pay your money and you take your chances" to "I'm not going to pay unless something happens." Publishers were put in the position of proving that their audiences were as engaged and responsive as they had always claimed them to be. Advertising risk was being shared, like it or not.

With a business model based on sales leads, I would argue that risk may be shifting totally from the advertiser to the publisher. That's because in most sales lead models, the advertiser only pays, on a per-lead basis, for qualified leads, delivered conveniently to his doorstep while still fresh and hot. What's not to like ... if you're an advertiser?

My problem with this historic shift in advertising risk from advertiser to publisher is that as far as I can see, it's largely de-coupled from reward. In the old days, advertisers did indeed assume all the advertising risk, but at least they were allowed to keep the full benefit of the results. If a $100 advertisement yielded a $1 million order, the advertiser kept the $1 million. The publisher took no risk, but received only a small benefit. There was some balance of risk and reward.

With the sales lead model, the publisher is essentially working on spec, and effectively assuming all the advertising risk because the publisher has to invest to identify sales leads for the advertiser, and is only paid for results. If a sales lead developed by the publisher yields a $1 million order however, it is the advertiser who keeps the $1 million, paying the publisher a flat fee only if and when a lead is delivered. In short, risk and reward are anything but fairly balanced.

Perhaps most significantly, it seems clear to me we're on a slippery slope with advertisers who are finding they can ask for increasingly unreasonable performance on increasingly unreasonable terms and publishers will deliver. While it may seem laughable, the next logical step in this evolution is for advertisers to decide they only want to pay when a lead turns into a sale. Even if the publisher were to share meaningfully in the sale revenue this really puts a publisher's success in the hands of strangers. Do you really want your revenue to depend on whether or not the owner's brother-in-law at one of your advertisers is a skilled salesperson or not?
I'd suggest that before the lead generation business spirals totally out of control, publishers should take a breath and think about their revenue models. It's great if you can get, say, $200 for a qualified lead. But if you can truly deliver qualified leads to your advertisers, you're worth a lot more. Further, it's not sensible or good business to get your advertisers used to a risk-free business relationship. Perhaps adding a monthly "program participation fee" on top of per-lead fees is a way to re-balance risk and reward while reminding advertisers that there is no free lunch.

Morningstar Acquires 10-K Wizard

2008-12-08T11:01:00.001-05:00

Independent investment research provider Morningstar Inc. last week acquired 10-K Wizard, a provider of SEC EDGAR (Electronic Data Gathering, Analysis and Retrieval) filing research and alert services. The purchase price was $12.5 million (subject to working capital adjustments).

10-K Wizard offers users full-text searching capabilities for real-time and historical SEC EDGAR filings either through subscription or a custom data feed. Users can search companies by ticker symbol, company name, industry type, SIC code, financial form type or by specific industry keywords that appear within the filings. Users can also access global company profiles that include hyperlinks to annual reports and peer companies in addition to stock quotes, news and charts.

This is a very smart acquisition by Morningstar. The ability to more easily search SEC filings will be an ideal addition to Morningstar's functionality and will enable Morningstar customers to gain an even more complete look at companies they research. This deal should certainly help further position Morningstar as a one-stop shop for investment-related information.

For 10-K Wizard, the acquisition will provide more exposure to its capabilities and its relationship with Morningstar should also provide the resources it needs to further develop these tools.