Exploits of a Mom

My Blob

The changing face of shopping in India

No more visiting 4 different markets to shop for clothes. Indian youth is smart and with the new found power of internet, is doing the research sitting at home before going to the market.

It all started with google making search better and more relevant. Where people barely expected to find something meaningful while searching, they now expect to find what they want. And with this expectation, there are a slew of sites that are opening up to provide relevant information to shoppers on the best places to shop in the city.

One of these sites, www.dealheadlines.com , that was launched last week, combines the advantages of social networking with relevant and pointed shopping information. The open framework allows anyone to submit a deal that they know of in the city and share it with their friends. A democratic voting mechanism ensures that only the best deals make it to the top and catch the eye of the users. Scoop that with your favorite features of tagging and search and you have all ingredients of a potent combination that will help you find the best deal anytime in the city.

Do check it out - I think you will like it.

Wish You a Happy New Year

Thief Thief - Stole my idea

People who startup companies are cautious. I have seen numerous websites say "We are in stealth mode and we will be up and running in a couple of months" which I interpret as "We are scared to share our idea because we think you will steal it and launch a company before we do". Is it really that easy to steal an idea ?

I don't think so. If an idea were so valuable, wouldn't there be a market for ideas ? If you want to find out how valuable an idea is, try selling one in the market and you will find out the reality. What is really valuable though is an idea that has been implemented in the form of a product, and you can certainly sell that for a couple million dollars.

Another way to think about it is to take an example, say search engines. The idea of search engines is really old, but over the years, many have come and gone. When google launched their search engine, there was nothing unique in the idea, what was unique was their approach to the problem and the implementation. That was what eventually took them to their current multi-billion dollar valuation and the greenbacks in the pockets of Sergey and Larry.

So think twice before you hide an idea - discussing it with someone might give you more value than hiding it inside your head.

How Innovators Connect - Sharing Experiences of Leading Silicon Valley Innovators

Rohit is a veteran entrepreneur and has a couple of successful startups to his credit. The most recent idea he is working on is to build a community where entrepreneurs ( and budding entrepreneurs ) and innovators can interact and exchange ideas.

He is releasing a book called "How Innovators Connect" 8 weeks from now, that shares success stories of entrepreneurs and his session today summarized the learnings of the entrepreneurs into ten key points. Every entrepreneur should know and do these ( in my words ):

1. Innovation lies between invention and imitation : An invention is something completely new, unseen, imitation is something exactly identical to what already exists, and innovation lies somewhere between invention and imitation. An innovative idea doesn't always have to be inventive - it simply has to be different and it has to solve some problem. Look at the following successful companies and you will understand what I mean - all these companies picked up an existing idea and innovated to deliver more value than any of the existing companies.
   
1. Google.com
2. Shaadi.com
3. Naukri.com
   
2. Connect with an idea : It is extremely important that you have an idea that you believe in and passionate about. In case you are not sure how passionate you are about the idea, sleep over it for a week and see if your passion stays beyond a threshold. Once you connect with the idea, you will have the wherewithal to carry it through the hard times.
   
3. Connect with themselves : Starting up your own company requires a lot of hard work and commitment which is really hard to achieve unless you are spiritually connected to yourself in some way. This gives you the power to face the unknown, the confidence to build something you believe in and the maturity to take hard decisions. It is important that you know yourself and that you know if you are ready to start your own venture. Ask yourself the questions and trust your inner voice.
   
4. Connect with fear : Think of a startup and fears in various shapes and sizes creep into your mind. The first and the foremost is the fear of losing your well settled job to venture into the unknown. The second is the fear of how well your venture would do. Third is the fear of not being able to survive the hard times. And the list goes on and on... You need to connect with your fears and instead of letting them dominate your actions, use them to guide you into making smart decisions.
   
5. Connect with failure : Failure is not the end of the world. As a child when you learn to walk, you fall a couple of times, but that does not mean you give up walking. Similarly, when you start your own company, your first product does not necessarily have to be successful. Infact, most of the companies today started off with a stupid idea, had this realization a few months into the venture and modified the idea to make it successful. You need to learn to accept failure and course correct to keep making progress on the right track.
   
6. Connect with environment : The environment around you is the biggest influencer behind success/failure of your idea. If your idea does not solve a problem or reduce a pain point in the environment where you are bringing it out, there is a high likelihood that it is headed for failure. As an example, building a GPS navigation system would be a really good idea in US ( infact it is already used heavily ) whereas it would not cut across to the masses in India ( where you have so many people around to ask the way ). Keep in mind the dynamics of the environment and the environment will guide you to the right path. As another example, India is a price sensitive volume driven economy (people here do not pay for convenience) whereas people in US are more likely to pay for convenience.
   
7. Connect with team : Starting up alone is a sureshot recipe to disaster. Startups that have more than 1 founding members have dramatically higher chances of success relative to those that are driven by a single owner ( infact most of these have failed historically ). There are a couple of ways to think about this:
1. Your network of friends is one of the most valuable resources when you are starting up a company. Are you starting up alone because you do not have too many friends that you can trust ?
2. You have a good network of friends but you were not able to convince any of those that this is a good idea. If you cannot convince at least 2 of your close friends ( who know you so well ) of your idea, how do you expect to convince your customers and people you do not know of the same ?
3. There are hard times for every startup when even the highly passionate founder begins to think if it is a good idea to pursue. If you have more than 1 founding members, it is highly unlikely that all of them are depressed at the same instant of time and they would be able to provide each other support during hard times.
4. You don't need a big team to bring out the first version of the product. You need a set of people who are passionate about the idea and 6 months to get this done. In absence of other founding members, you would need to look for employees to take the product through the first release and employees would never ever be able to drive the same results as a group of highly energized founders.
   
8. Connect with customers : Do I need to emphasize the importance of this - I guess not. Customers may not be intelligent enough to tell you what you should build ( otherwise they would have built it themselves, isn't it ), but they can surely tell you if they are going to use what you are building or not. If customers love using your product, you are surely on the path to success. However it is easier said than done and no startup ever gets the idea dead right in the first go. That is the reason it becomes increasingly important to connect to your customers, listen to their feedback and course correct early based on that feedback. Remember, the closer you are to building what customers want, the greater are your chances of success. Also, when taking feedback, listen to the whisperers more than the ones that are shouting on the top of their voice.
   
9. Connect with money : Be frugal. Borrowing money to get the startup going always sounds compelling ( because that way you transfer all your risk to the person offering you money ), but remember that there is little difference between Opium and OPM ( Other People's Money ) and addiction to either is a recipe for doom. When you are starting up, you need to be very efficient with your spend and squeeze the maximum value from each penny you spend. The best way to start up a company is for the founders to pool in the initial investment ( enough to sustain 6 - 9 months ) and get a prototype live after which you can start looking for external investments. Also remember that going to a VC too early in the cycle is not a good idea either because when a VC invests in a company, the VC would also dictate their terms which might cause your vision to be destroyed completely ( because now you are executing the VCs vision, not building your idea ) thereby throwing an otherwise excellent idea down the hill. Approach a VC only when your startup has achieved a threshold and you need to expand. This also makes you better placed to bargain with the VC and get the funding on your terms.
   
10. Connect with ego : Last but not the least, do not let your ego get in the way of the startup. Yes, you do need to stand behind the idea and you need to be passionate about it, but you also need the flexibility to course correct as you get feedback from your customers and that is where your ego might get in the way. Don't ever let your ego tell you that you are the smartest person in this world and any idea that you think of can never be stupid. Drop your ego, listen to your customers and march ahead.
    

Presented By:
Rohit Agarwal

What VCs look for - Elements of Sustainable Venture Companies

Our focus in the last 15 years has been internet, specifically wireless. In India, we have a portfolio of 30 companies with around 10 in the internet/wireless domain. We go from seed stage investments to later stage investments as well. Things that we look for:

1. Large Markets - Address existing markets poised for rapid growth and change. Example is TravelGuru which is a big market with scope of bringing in a lot of efficiency.
2. Team DNA - 'A' Level founders attract 'A' level teams.
3. Clarity of Purpose - Summarize company's business on the back of a business card.
4. Rich Customers - Target customers who will move fast and pay a premium. Eg: Jassi Chadha founded MarketRx.
5. Insane Customer Focus - Customers will only buy a simple product with singular value proposition.
6. Pain Killers - Pick an issue of burning importance and delight the customer with a compelling proposition. Eg: PayPal
7. Think Differently - Take the contrarian route and create novel solutions. Eg: Shashi Reddy started testing services company.
8. Agility - Stealth and speed will ususally help beat out large companies. Eg: Steve Chen and Chad Hurley started YouTube.
9. Frugality - Focus spending on what's critical. Eg: Nitish Mittersain started Nazara that has exclusive rights for sportsmen like Sehwag, Tendulkar.
10. Inferno - Huge markets with customers yearning for a product developed by great engineers requires very little firepower.
    

We have always made more money with people who are not proven. We do 5-6 seed stage investments every year and we have some ability to assess the technology risk. Why should you come to us:

1. Phenomenal track record in internet and technology space.
2. Ability to foresee an idea, refine it and bring it out in a way that it is complementary to the team.
3. History of 6 years in India, learnt from mistakes.
4. Long term staying power. We were investing in 2000, 2001 when there were no investors.
   

Presented By:
Sandeep Singhal ( Sequoia Capital )

Spam Rocket

Spam, very frequently called a menace, but look closely and you might conclude that it is yet another ingenious idea of marketers. In that sense, telemarketing is nothing else but spam's dearest sister ( or brother if you like ).

Philosophy and ingenuity apart, both spam and telemarketing have reached such dramatic proportions that they have begun to look like Frankenstein's monster that is out of control. Many companies have been spending painless hours building solutions to filter out spam and stop telemarketing calls, but the success has been moderate at best, relative to the efforts that have been put in.

It is said that to catch a thief, you need to think like him and I guess that holds true for marketers as well. Recently I came across a company, BoxBe.com that has come up with this innovative idea of engaging the marketers in their own game. The idea is to build a proxy mailbox that shields the actual user mailbox from hordes of spam mail, at the same time giving the user the option of receiving spam mail and getting paid for it ( by charging the marketer ). That way, the marketer gets access to the people that he desires, at a small price, and the users get paid for reading the marketing pitches.

However, there is one catch. The popularity of email as a marketing medium stems from the fact that it is really cheap and that the results can be accounted for. Given that access to users is now chargeable, one would need to wait and see how many marketers bite the bullet. Too costly and marketers would shy away from it, too cheap and oodles of spam would continue to flow through the network. Lets wait and watch - only time will tell.

More details on Bangalore BarCamp

Many people have been asking me for more details on the barcamp - lazy folks who can't click a link to find it out themselves. So here is it for all you lazy folks:

Barcamp is an “Unconference”, an event where we eliminate the panel of speakers and let the attendees do the talking.Its an event where everyone participates in some form or the other.It can be through presentations,blogging or volunteering.

When:

Dec 2 -3 '06

Where:

ThoughtWorks Technologies (India) Pvt Ltd
2nd Floor, Tower C, Corporate Block, Diamond District,Airport Road,
Bangalore - 560 008, India
91 80 2508 9572,3,4
91 80 2508 9584

Don't forget to be there !!

Upcoming (un)conferences in India

I have series of (un)conferences to attend this year. Its good that so many of such events are happening in India and helping build budding entrepreneurs. Most importantly, they are all on the weekend so certainly a chance not to be missed.

Check these out by clicking on the links:

A Step Beyond Contextual

Let us assume that you are running a business that owns some prime properties on the internet. As millions of users interact with your properties every day, there would be a significant number that abandon the site in the middle of a web transaction. What do you do with these set of people ?

The most common approach that business owners take is to assume that people who abandon web transactions are lost forever and not worry about them. A recent study reveals that this could be a big mistake and that at least a third of the people who abandon web transactions interact with the business within ten days following the abandonment through the same or alternative channels. Interesting - isn't it ?

This revelation has some interesting implications. For starters, this calls for solutions that are capable of identifying abandoned customers and re-engaging them. This might involve grabbing their attention at third party properties or sending them messages that could be of specific interest to them to drive them back. This also marks a shift from the traditional contextual targeting of customer to a more personalized targeting mechanism where each person interacting with a web property is treated as per his needs. This is an idea that has the potential to change the way we think about interactive marketing.

New avenues for marketing

Yes - after a long break, I am back to my favorite hobby :). Since the time I started to think like a marketing person, I have had a keen eye for new avenues that technology is opening up for advertising and today I am going to share one of the avenues that is going to be big pretty soon. This avenue has nothing to do with interactive marketing, but is pretty interesting to think about which is why I am covering it here.

You must be aware of how movies are distributed to various theatres and released. NO ? Ok, let me do a quick round up of the process. Traditionally, the movie producer signs up with a distributor, who then creates multiple prints of the movie ( ranging between 200 to 20,000 depending upon the budget ) and distributes it to cinema halls. Each print costs between 60,000 to 70,000 which explains why costs escalate dramatically if you want to release in multiple cinema halls simultaneously. In addition to this, the high cost of a print forces the distributor to phase out the release in Tier2 and Tier3 cities leading to huge losses in revenue. This has been a big problem for distributors for a number of years and they are desperately looking for a cost effective solution to this problem. Lately, in order to alleviate this problem, distributors have been distributing movies on hard drives, but that doesn't entirely solve the problem because the distributor loses control over the number of times the movie is played. So what is the solution to this problem ?

Many companies have been trying to solve this problem, but the three companies that stand out in the effort are "Valuable Group", "Mukta Adlabs" and "Pyramid Samira". These companies, independently, have come up with solutions to make digital copies of the movies and beam those movies to any theater capable of receiving it. Theaters who sign up for this service would be provided with the necessary equipment that can be used to download the movies and store them for a limited number of replays after which the movie would self-destruct ( doesn't it sound like a clip from a James Bond flick ). The theaters would be charged a nominal amount ( say Rs 200 ) per show as the rental for the equipment that has been provided.

Now you must be wondering how these three companies plan to make profits out of this service if all they charge is a nominal amount to the theater owners. That my friend is what marketing is all about - build up a network that has a large viewership, a network with massive reach across all demographics and you have advertisers lining up outside your door.

Coming back to the service provided by these companies, one of the big positives is the ability to reach the audience in Tier2 and Tier3 cities, and there is no other media that provides this ability today. Every marketer knows that Tier2 and Tier3 cities have huge potential for certain products, but they are afraid to target the audience in these cities because of lack of infrastructure and high costs of marketing involved. With the creation of this new channel, marketers would be able to reach their audience in Tier2 and Tier3 cities in a cost-effective manner and would love to divert some of their spending for slots inside the movie. In addition to the revenue generated from the advertisement, the companies providing these services could also ask for a dedicated area in every subscribing theater that they would use for putting advertisements or promotional campaigns.

This goes on to support my belief that the future lies in services and the one that has the largest number of users in its service net will be the king.

Really Simple Syndication

Really Simple Syndication (RSS) is a lightweight XML format designed for sharing headlines and other Web content. The format has been active in the developer community for a couple of years, and is fast gaining acceptance of the average user.

Recent reports suggest that less than 2% of the adult internet surfers are currently subscribers of RSS. Now that is a very small number, but it is growing rapidly at the rate of more than 40% every month. And why shouldn't that be - afterall, the temptation of being able to dynamically subscribe ( or unsubscribe ) to the content that you are interested in is hard to resist, especially when the facility comes for free.

The rapid growth of RSS as a media for information dissemenation has also captured the imagination of interactive marketers and they are beginning to figure out ways to monetize this channel. But the question everyone is asking is - "How good is 40% growth per month given that the base is a miniscule 2% of adult internet surfers ? How soon is RSS going to be a BIG enough media channel that we can monetize from it ?"

Since RSS started off as a channel for the developer community as the next cool thing, no one ever cared about the usability of this channel. Infact, most of the users don't even know what RSS is even though a majority of news sites prominently display the "RSS", "XML" or "Atom" symbols today. To top that, the user who dares to click on one of these symbols is displayed an obscure XML file and does not know what to do with it.

If RSS is to become a BIG channel for information dissemenation going forward, someone would need to figure out how to market RSS as a service to the users and also make sure that it is really simple for the end users to subscribe and read the RSS feeds. It goes without saying that efforts have already started on both fronts, with companies like "Feedster" taking on the challenge of marketing the RSS service to the end users and companies like "Google" bundling easy to use RSS readers with their popular products like "Desktop Search". With interactive marketing majors putting their weights behind this new media channel, it shouldn't be long before this channel tips.

Optimal dayparts for advertising

Would you believe me if I told you that "there are some parts of a day where online advertising is most effective" ?

A recent survey conducted by Atlas reported that lunch break and evening time ( just before bedtime ) yield as much as 35% higher conversion than other hours in the day. Now, this does not imply that people do not visit websites during the rest of the day or do not click ads at all during rest of the day, but this certainly is concrete statistical evidence to support that a product has as much as 35% higher chance of getting purchased if the advertisement is displayed during these hours.

That leads to an interesting question - "If the information about optimal dayparts is public and well researched, why don't all advertisers display their ads only during these dayparts ?". A look at the laws of demand and supply would easily answer that question ( and is a phenomenon witnessed today on television advertisement ). Lets say that all the advertisers want to advertise only on the prime dayparts ( similar to prime slots on television ) - this would create a very high demand, and given taht the supply of the media on these prime dayparts is limited, would cause the cost of the media during these hours to be raised significantly. In this scenario, advertising on prime dayparts would mean fewer eyeballs and significantly narrow reach to the target audience at the same or higher cost while there is lots of cheap media lying unused on other dayparts. Pushed to the extreme, the market would eventually swing back and breakeven at a point where the media cost during the prime dayparts is 35% higher than the media cost for the remaining dayparts.

So does it really make sense to run after prime dayparts for interactive marketing ? While there is no absolute answer to this question, the key lies in setting up good metrics to measure the progress of the campaign and gathering the statistics from your campaign to build/optimize your media plan. With a good plan, you would certainly be able to find the eyeballs to market your product.

Renaissance Marketing

Marketers are known to pick up catchy phrases to represent what they do, and the latest one in this league is "Renaissance Marketing". If you are thinking that "Renaissance Marketing" falls in the domain of "Interactive Marketing", well, it does not, but it has some interesting implications to interactive marketing which is why we are discussing it here.

Lets review some of the basics before we try to understand this term better. Online retailing has been one of the most profitable and viable business that have been setup since internet came into being. One of the prime reasons for its success has been the fact that most of the retail sites have been championed by companies that have been in the retailing business for years, that have had huge success in doing the retailing business offline and that have looked at online retailing as an additional channel to sell their goods, not as a replacement for their existing channels **. What does this say about the vision these companies had of online retail ?

Well, one of the things that is readily apparent is the fact that anyone who has a history in offline retail would knows the importance of customer interaction. If they are planning to augment the retail channel with an online solution, wouldn't they want their online retail channel to have the same level of interactivity ? Wouldn't they want their online retail channel to act like a salesperson for them ? Wouldn't they want their online retail channel to provide their customers with the same freedom of movement and the same freedom of choice ?

Unfortunately, one of the areas where online retail has been very disappointing is in bringing this vision to reality. Primitive internet technologies have forced online retail to turn into a sequential process, often referred to as the "Retail Funnel". The user is shoved down the funnel where he is forced to select some options along the way in an attempt to take him to the holy grail. One wrong choice and there is no way to go back and fix it. The end result is a lot of frustrated and fuming users who abandon their quest midway in disillusionment.

"Renaissance Marketing" proposes a solution to this problem by providing users choice, control and customization of experience. "Renaisance Marketing" rejects the idea of purchase funnel as a sequential series of steps and proposes a more fluid environment where unconstricted consumers easily float from upper funnel marketing assets to lower funnel assets at their own whim. The basic idea is derived from thinking of online retail as any other marketplace - afterall, if a user is allowed to roam freely in a shopping mall, why not allow him to roam freely in the online marketplace ?

Now that you have understood the concept of "Renaissance Marketing" can you think of where "Interactive Marketing" fits in ? Hey, I'm not going to answer that today - maybe in another post a few days later.

**You might argue that there are/were retail sites built by companies that have had no prior experience in retailing whatsoever. I would argue that most of them have vanished today except for the ones that had a sound business model to back them. Amazon is a great example of the latter.

Another Tipping Advertisement

A lot of people who have read my previous post on advertisements that tip, have been asking me if I happen to have a bagful of interesting advertisements that they can munch on in their spare time. While I don't have a bagful, I certainly have another one that I admire a lot.

This advertisement is very special. Not only do I admire the creativity of the guys who conceived this and the patience of the people who turned it into reality, I truly admire the courage of the marketer who spent a whopping 6 million dollars to shoot this advertisement. I do not know whether the company was able to get more than 6 million dollars worth of value from this advertisement, but without further deliberation on that, ladies and gentlemen, let me present to you, the new Honda Accord.

Tracking Campaign Metrics

Let us start with a small quiz - you will find answers to the questions at the end of this post.

1. Assume that you are the CEO of a F500 automobile company. What would be your purpose behind running a marketing campaign ?
a) Brand Building
b) Increased Car Sales
c) Increased Leads
d) Both a) & b)

2. Assume that you are the VP Marketing of a F500 automobile company. What would be your purpose behind running a marketing campaign ?
a) Brand Building
b) Increased Car Sales
c) Increased Leads
d) Both a) & b)

3. Once you have allocated the marketing spend to various media channels, how would you judge the effectiveness of the media channel ?
a) I will select the media channel only if I am sure it will be effective
b) Effectiveness will be measured by the number of people who see the ad ( or click it if the media is online )
c) Effectiveness will be measured by the number of people who purchase cars through that channel
d) Effectiveness will be measured by the popularity of the ad for offline media and ( search engine ) ranking of the ad for online media

Now that you have selected your answers, I must tell you that the focus of this post will be on question 3 above and I am surprised how few people can actually answer the third question correctly. Think about it for a moment - if you are running an ad campaign, wouldn't you want to track all the time how well the campaign is doing ? More importantly, if your business is to sell cars, wouldn't you want to know how many cars is the campaign helping you sell ? Wouldn't you want to know how much it costs you to sell a car through the media channel ?

It sounds really counter-intuitive, but when it comes to tracking ad campaigns, a lot of marketers make the mistake of using intermediate metrics like web traffic generated or search engine ranking instead of using ROI or sales oriented metrics. A part of the problem is that tracking an ad campaign against ROI metrics is significantly harder, but for the benefits you get, it is a small price to pay.

As an example, how would you attribute credit to an online campaign for conversions that happen offline if you are not tracking your campaign on a sales oriented metric ? Well, the answer is that you would not be able to attribute sales to the online campaign, which eventually means that your metrics portray the channel as less effective than it really is. If you continue to percieve the channel's performance that way, it would not be long before you declare the channel ineffective and stop using it completely - all because you were using the incorrect metric for tracking it in the first place.

So is using a ROI or sales oriented metric the solution to all problem ? Well, as I think more about it, I realize that we haven't even touched the real problem so far. The real problem is the existence of multiple media channels, every channel so diverse that there can be no common platform to track its performance. The usage of incorrect metrics is only a way in which the problem manifests itself today.

The solution to the real problem lies in taking a holistic view of your media channels and understanding how they work in synergy with each other to help you achieve your targets. ROI or sales based metrics are really the first step in understanding that synergy. There is a long long road that lies ahead and we shall never be able to tread on it if we are scared to take the first step.

Answers:
1. Increased Car Sales. A CEO always cares about the core business and if the company is into selling cars, then the motivation behind the campaign should be to sell more cars. Yes, brand building is important, but the end goal of building a brand is again to sell more cars. A CEO would treat brand building as a side effect of achieving his target - afterall, if his cars sell more than his competitors, doesn't that give him a good brand anyway.

2. Increased Car Sales & Brand Building. Since you are VP Marketing, you would be concerned about the brand as well in addition to achieving the target sales. For you as the VP Marketing, brand building is one of the goals, not just a side effect. Infact, a VP Marketing would sometimes go to the extent of considering just brand building as their end goal, considering that a good brand would help them sell more cars then their competitors.

3. Effectiveness will be measured by the number of people who purchase cars through that channel. If you have read through the blog, you would know why.

Crossing the chasm

Let me tell you that I am very new to the domain of "Interactive Marketing". Why, its been only 2 months since I started thinking about it, and one of the things that has always amazed me is the extent to which we can innovate in this domain.

"Money is the most powerful thing that exists in our world" - Is it the fact that there is a lot of money in interactive marketing domain that motivates the best management grads to put their heads together and figure out innovative ways to reach their target audience ? Not really - afterall its interactive marketing, not investment banking at wall street.

Then what is it that motivates an interactive marketer to innovate ? Well, a glance into the history of marketing would tell you that psychology has always played a significant role in the success or failure of a marketer and interactive marketing is no different. Everyday, an interactive marketer faces the challenge of understanding the human psychology, that too of people whom he hasn't met ( or even seen ). It is important to consider here that while the psychology of an individual is not important here, the psychology of the masses holds the key and an attempt to understand the secrets that lie beneath is as interesting as a Jungle Safari in Africa.

An interactive marketer constantly thinks of ways and means to get into the depth of mass psychology ( that the results are stored as statistical data is irrelevant to this discussion ) and to utilize that information to make informed decisions on marketing campaigns. What this really means is that an interactive marketer needs to innovate, to find ways to accumulate the information that gives him/her an understanding of mass psychology, to find ways to process this information to get new insights into mass psychology and to use these insights to find ways to influence the target audience better.

Now that sounds really exciting. But wait a minute - if there is really so much innovation happening in the interactive marketing domain, why is the change in the marketplace so gradual ? Why did it take so many years of struggle for interactive marketing to build a niche for itself in this big bad world ? Why isn't interactive marketing taking the biggest pie of the marketing spend of fortune 500 companies ?

The answer to these ( and other similar ) questions lie in the fact that the time lag between the time an innovation happens and the time it becomes mainstream is very large. If you have read "Crossing the Chasm" by "Geoffrey Moore", you might be familiar with the representation of this gap as a chasm, that every innovation has to cross before it goes mainstream. Unfortunately, every innovation has to face this acid test of survival and interactive marketing innovations are no different. If only this chasm could shrink....

Online Ads First ?

Whoever predicted that online marketing would never take off would find it hard to believe the radical progress that interactive marketing has made in the past four years.

In a twist to the traditional "TV First", "Web Later" sequence of launching new commercials, companies are beginning to launch web commercials first to gauge user reaction and reach their target market as quickly as possible. Recently, Coty Inc launched the commercial of their new perfume Lovely on a lifestyle site and they are planning to target a broader audience through a TV Commercial later this year.

This change in perception certainly marks the growing respect that internet is garnering as a marketing medium. According to Forrester Research, online advertising made up 5 percent of advertising budgets last year and will make up 8 percent by 2010. Someone rightly said "There are only two kinds in this world: Winners and Underdogs" and interactive marketing is moving rapidly out of its underdog shadow.

Folksonomy = Taxonomy - Taxis + Folks

For the uninitiated, "Taxis" means "Classification" and "Nomos" (or "Nomia") means "Management". "Folk" are people. So "Folksonomy" literally means "People's Classification Management".

Some people might argue why "Folksonomy" does not mean "People's Management" and if you are one of those, you might want to join your friends who are debating "Folksonomy" vs "Folks Taxonomy".

Lets forget the etymological nitty-gritties for a while and focus on what this new buzz-word actually means. To completely understand the need of this concept and its significance, you would need a crash course in the history of the famous ( or infamous ) "Search Wars".

Once upon a time, there was a company called "Microsoft" that had the largest share in the retail software space. The ruler of "Microsoft", "Billie Wille Gates" was very happy with his dominance in the retail software space, but he had a bigger ambition - the ambition to dominate the lives of all computer users on this planet called "Earth" ( he never cared about Martians though ). It didn't take him time to figure out that "Internet Search" was an activity he should indulge in to get closer to his ambition. During the same time, a couple of underdogs dropped out of Stanford and built a search engine that would put other search engines out of business. The company called itself "Google" ( after the magical number googol ) and [coincidentally] also called their search engine "Google".

The fairy tale doesn't end here. Having rapped "Microsoft" hard on the back of its head, "Google" went on to become the leaders in the online search space and built a set of businesses around it that would make it very profitable. Meantime, another company called "Amazon", that was into selling books online, got interested in internet search as well and jumped into the fray. "Yahoo!", the undisputed leader of search engines prior to the "Google" onslaught, also set out to take vengeance on those tresspassing into its holy grail. All of these companies had a common motive - to build a better search engine than the other, one that would draw all the people using the internet every single day.

The million dollar question is - what makes a search engine better than the other ? There are several million pages out on the internet that need to be searched and given that there is no definitive "best" answer to this problem, how do you quantify the "goodness" of a search engine ? Is it just the speed at which the search engine crunches through the results that counts or are there other factors that impact its "goodness" ?

As you might have figured out by now, there is no good answer to this question. Umm, yeah, I would like the search results faster, but what if the links that I am looking for are on the 10th page of the search results ? I would much prefer a search engine that takes 5 seconds more to return the results, but gets me the results that I want on the first page. If you were to ask a million internet users of their expectations from a search engine, I bet you would get the same response. Personalization of the results is the top priority and the performance is a close second.

So, the million dollar question changes to "How do you get every search user results that he/she cares about ?" What it really means is that if two people search for the keyword "bull", a finance guy should get links pertaining to wall street whereas a basketball fan should get links pertaining to Chicago Bulls. What it really means is that to be the undisputed market leader, you have to go the last mile and personalize the search results for every single user who performs a search and at the same time personalize it better than all the other search engines.

Ok, so now that you have had a crash course in "Search Wars", what do you think is the answer to this complex problem ? I'm afraid I still have to say - there is no good answer to this problem. But that does not mean there hasn't been progress. Each one of the companies that starred in the "Search Wars" have research teams setup that attempt to crack this problem before the other team does, and the latest solution they are playing with is "Folksonomy".

"Folksonomy" is a neologism for a practice of collaborative categorization using freely chosen keywords. More colloquially, this refers to a group of people cooperating spontaneously to organize information into categories.

Think of it as a circle of friends - if you were to ask your friends to list out the URLs that interest them, there is a high probability that you would find those URLs interesting. Now think about what would happen if everyone in your friends circle shares the URLs that they find interesting - you would easily be sitting on heap of information that interested you but that you did not know about.

Now think about what would happen if everyone on the internet lists out the URLs that interest them. Well, you don't personally know all of them so that is where the extrapolation meets a sudden death. What if, in addition to a list of all the URLs in this world that people care about, you also had the details of how those people are related to each other, you could build communities on the internet that belong to people who share similar interests. Given that you would never know the relationship between all the people on the internet ( nevermind the concept of six degrees of separation ), what if you used a common set of URLs between two people to simulate a relationship and then built communities around these relationships. That is exactly what "Folksonomy" is all about - figuring out common interests and building a community around it. And since it is the users that are organizing this information, advocates of "Folksonomy" believe that it is a better model to store all the information in this world.

How well it would do, only time would tell, but companies like "Yahoo!" and "TagCloud" are already building some interesting pieces to bring this concept to reality. There will soon be a day when the search engines would be able to tell me which of the several billion earthlings should be my friends.

The stickiness factor

The second most important concept in making things tip is what Malcom calls "The stickiness factor". The stickiness factor is a measure of how easily things are able to stick to a person's mind and infact is a hard thing to measure.

What makes an idea or a concept sticky ? If there is something that sticks to my mind, would it stick to your mind as well ? When we think of stickiness, do we think about the masses or just the few people who are gifted to make ideas tip ? When you come up with an idea, how do you know if it is sticky or how sticky it is ? I can bombard you with thousands of questions like this, but how about getting back to the mattresses ( as Godfather would say ) for now and focussing on the areas of immediate impact.

As I think about it, stickiness is not a radically new concept. Marketers have been putting their heads together for years to build a bait that would charm the unsuspecting shopper into doing what the marketer wants him to do. Some have been successful, some haven't, but for most part of it, nobody has thought of coming up with a metric for "stickiness".

It was only with the dawn of direct marketing ( reaching the customers directly through mail, telemarketing etc. ) that the concept of "stickiness" came into the forefront. Direct marketers would shoot mailers to the people on their list and the definition of success was very straightforward - "How many of the people that were mailed responded to the campaign ?". If the percentage of people responding is large, you go Hurrrrray !!!, if not, you get back to the drawing board.

In the realm of interactive marketing, building metrics for success and tracking them over a period of time is relatively easy. But every new media comes with its own advantages and disadvantages and internet is no exception to that rule. For an interactive marketer, the biggest problem lies in the size of the internet community - what is stick for some may not be sticky for others ? If there is an iota of truth in the law of averages, then the metrics recorded across all the users on the internet should cancel out each other and you would never be able to judge the effectiveness of an interactive marketing campaign ever. That is a problem big enough to mark the beginning of the end of interactive marketing.

Don't despair, not yet. The answer to this problem would not only make it insignificant, but would also pave way to one of the fastest growing areas in online advertising called "Creative Optimization". More details in a future blog.