blogs.conchango.com

It's been almost a year since a crack team of Conchango experts went up to Bradford and delivered a little flash application that a year on is still being shown around the world and still being discussed at retail seminars as one of the key innovation ideas that has been successfully delivered in the last few years..

So after such a long time sitting in my "drafts" that it was time to tell the story I decided that now is a good time to have a slight diversion from the usual ranting's from deep within the digital media world and have a little spot on the other wonderful innovations that we did a year ago!

The crack Conchango team were dropped into the northern territory of Bradford to work with OTTO (UK) - my first question was "OTTO ? - a carnivorous aquatic or marine mammal part of the family Mustelidae, which also includes weasels, polecats, badgers - then realised that OTTO was in fact Otto UK (formerly Grattan/Freemans) is the UK subsidiary of Germany’s Otto Versand - the world’s largest mail-order company, and one of the biggest online retailers. Otto UK’s 9,000 staff generate revenues of £815 million per annum through both online sales and approximately 3 million seasonally issued catalogues.

The mission: to deliver a high street experience of browsing through a department store type environment and as one does - gather your items, ready to then go into the dressing rom and try them on for size, colour matching and generally the whole outfit!

Right... make a store experience of trying out clothes and stuff online-  how do we do this - we thought??

Simple, you have some of the most talented guys in Conchango (were all talented here at Conchango - but this team did gel like a good super glue!) - lock them in a dimly lit room - bring in stakeholders and managers from the client that have an opinion and idea of what they want - and bingo in 3 days we have a Plan - and a raft of phenomenal ideas to boot. Then decide that instead of delivering the usual raft of A4 documentation - we decided (well Mr Venter in his infinite wisdom) that lets push the boundaries of what is expected from a discovery piece of work, to show what we really can do if you go beyond what is expected!! So we locked ourselves away in a scabby Hilton business lounge (never heard of wi-fi or customer service??) and spent the day adding all of our elements into a beautiful A3 compendium of work.

The result was that within 48hrs the client arrived in our London offices, went through the compendium with one of the team and our MD and the "Look Book" deal was done!

The next 29 days were full on integration into the clients team, getting to know them, them getting to know us, seeing how we work. Pushing the limits of a tight timeframe which was a stressful time for everyone (losing days and gaining days back) all over the place - but stuck with the 29 days in the end, a wonderful achievement from the whole team and the client was great as well.

So what did we have to do?? Integrate with Scene7 image store, work with Endeca and return product information based on the master slave relationship, hit their mainframe (called The Matrix) which was run by the CIO called.... Mr Anderson! (really!!) Then create a flash overlay that would do all these things while at the same time overlay over a classic ASP framework - with so much work and dedication by Mr van Rooijen we knew that this was going to be possible and achievable.

As I said at the start of this post - there has been a lot about this project that has been discussed all over the world from Australia to North America, Europe and into Asia - and even as recent as today it has been cited in another online discussion http://www.designweek.co.uk/Articles/138435/Going+virtual.html I have talked enough about it (as I'm sure people at Conchango would tell you!!) and enough press and publications as well.

Although you have to ask the question, why a year after it launched is our Look Book still being discussed. Well quite simply it was designed from a pure retail and ecommerce perspective that we know and understand inside and out - it was created with the user in mind and delivered from a true bunch of professionals. Other copies / imitators have come and gone in that year, because they were either to flashy and had no real retail substance, or not user centric designed enough and therefore too complicated for the user to understand or interact with, and that is why it has stood the test of time and still as relevant as it was a year ago.

Where next then?

We kept up the tradition and delivered a 42page compendium to accompany the final Look Book that had some future thinking and deliverables in there to keep them going for another 2 - 3 years, social shopping, live interaction with your friends, etc... so the possibilities are endless. Also we would like to try a Silverlight version of the Look Book as well - but we'll see what the future holds.

Below some pictures from the Project and Compendiums... or just visit www.oli.co.uk

A little while ago along with my usual ranting and ramblings I actually was strapped down and forced to write in a cohesive and structured manner. This of course goes against the grain of what I do - as I like to ramble on and on and go off in various tangents (I'm like that when speaking as well :) - but when asked by Miss D & Miss B to create a white paper on my thoughts of where the media industry is going I started rambling on like a loon - and then the bombshell - 1500 words!! On THIS topic!!! This is almost a novel with the number of ideas, concepts and models that I have rumbling around my head... luckily Martin came to my rescue and helped make it a readable piece rather than the 2million rambling words that it could have turned out to be!!

Even after this was written back in February / March we have already seen Coldplay deliver their new single for FREE!! Free concerts - so with more to come maybe you need to speak to us ;)

Anyway - the paper is out there somewhere if you want the full on version with pictures or even a free chat with us on this topic then email talktous@conchango.com and we'll set you up ;) - so below is my words and thoughts - nicely edited and delivered to you!! Enjoy!

With customers increasingly accessing music and movies for free, 2008 is shaping up to be a critical year for digital media across the world. How can content owners and resellers respond to the challenges that face them?

The past five years have been marked by a propensity for content owners and resellers to avoid tackling the issues associated with the protection and distribution of their content. Both parties seem to have forgotten or even ignored the most salient element in this whole marketplace – consumers who have traditionally paid for their music and movies.
This stance has led to customers becoming increasingly frustrated and confused by what they can or cannot do. Ironically, it has even driven them to explore the wonders of
peer-to-peer services. As a result, more and more are being turned ‘to the dark side’ as the only place where they can freely access content ranging from the latest music releases through to US television series that are yet to be on air in the UK.

Waking up to the challenges
So what is changing? Why is 2008 turning out to be such an important year? At last, content and rights holders are waking up to the public’s growing
appetite (one that will increase by 40% this year*) for digital content. The result is that growing numbers of
retailers and re-sellers are delivering unprotected content to users – especially in the music sector.
It’s a sign that the market is recognising that
consumers want to be in control; they do not want content owners or digital rights management to dictate how, why, where and when the user should use their content. This is a massive step in the right direction but what else can we expect in the coming months?
Well how does ‘Music will be Free’ sound? Perhaps not everything, and maybe not all the classics and genre-defining music, but free to a point!

How free music adds up to a profitable business
How can giving music away make commercial sense? Well, looking at some basic
principles of digital business, where a digital master file is created and then simply copied, it’s easy to see that the more content is delivered, the more money is being made. However, the real issue is where does this free music come from – and is it really free?
The answer, of course, is not so simple. Yes, music will be free in essence but in return for their ‘free’ music, consumers will be subjected to targetted advertising or sponsorship to some degree that will in essence pay the labels for their content.
This is neither new or a radical shift. What it is, however, is a new business model and dimension to the ever-growing race for digital dominance. Not everyone will be able to compete in this space – as there are specific rules and applications of this model that will eliminate some of the ‘me too’ players in this space but others will step up to the mark and create a new model of excellence for this media.

Goodbye DRM, hello MTR
DRM (Digital Rights Management) is all but gone from the music industry and with it the protection and limitations that have crippled the user and their overall acceptance of this medium. However, as one piece of the puzzle disappears, another will rear its head.
This time, however, the technology is not there to hinder or disable, it is there to enable
and enhance each user’s experience and enjoyment of their media.
MTR (Media Tracking & Reporting) is the initiative that will enable this to happen. Naturally, there will be the usual outcry that that it is just the same as DRM but that sentiment misunderstands the
benefits of the technology. The power of MTR is that it enables
users to share music, track its progress around the globe and report back. As a result, it can transform a single, unobtrusive track into one that is shared among 3 million people across the world.
All signs indicate that the summer of 2008 will be the real tipping point for the music industry. This is when new, innovative business models will appear to take advantage of this huge, connected
market. The consumer will be the winner along with those labels that accept and participate in this new, exciting age.

Entering the movie world
Other types of media such as movies are an all together different beast. Movie production can run into hundreds of millions of dollars and costs are recouped through the tried and tested method of cinema release, rental, pay-per-view, sell-through and retail.
Even if a movie fails to perform well at the box office, the additional sales channels mean that the movie makers/ rights owners still have a chance to get their investment back.

If it ain’t broke..?
So why should movie makers and distributors consider changing a successful sales model? Well, we live in a fast-changing digital world, a world where film fans increasingly want to watch a movie at home when it’s still on cinema release.
There may be reasons why the consumer isn’t sitting down in the front row with a bag of the finest popcorn and a gallon of coke but is willing to pay the same ticket price to watch that movie in their front room. Suddenly you have another stream of income at a premium price point and here again lies a new business model that can be leveraged, exploited and executed using technical expertise.
Will it kill off the thriving cinema industry? No, why should it? These are the very same
consumers who (for whatever reason) weren’t going to trek out the cinema but can now enjoy the movie in the comfort of their own home. It will of course drive down the window times of the lifecycle of the movie but ultimately will also recoup the commercials faster.

As seen on screen
As film makers look to off-set some of these costs, it seems inevitable that we will also see a much clearer and in-your-face advertising model. Product placements won’t just increase but will become increasingly sophisticated.
So, while you may continue to see stars such as Robert De Nero drinking Coke in a movie (for which Coke may pay as much as up to $30million), when that film is distributed via other medium channels such as Blu-ray then something interesting happens. The Coke that
May 2008 www.conchango.com 3
De Niro is drinking can now become an immersive advert that the user can interact with, contributing another dimension to the integrated advertising model.
Would this ever happen? Well, to see how much times and attitudes have changed, let’s take a look at Back to the Future part II. The movie incorporated specific brands that were pushing their ‘future’ thinking such as a Pizza Hut hydrated pizza and Black & Decker. When it was released in the 80s, it was criticised for such blatant advertising but now audiences
would hardly bat an eyelid.
The pace of change is likely to be slower in the movie industry and it’s unlikely that free movies will be as common as music in 2008 but the landscape is definitely moving this way. Once you add up a few major sponsorship or advertisement deals within a movie then throw in digital distribution, you’ll soon discover that producers are suddenly waking up to movies that cost £0.00 to make.

And the winner is...
With this model, the simple answer is that everyone is a winner. Advertisers get their brands endorsed by stars and seen by millions; movie studios reduce their risk by having additional funds supplied by advertisers in place before production; consumers get to watch the same high quality movies where and when they want to.

Becoming a leader of the ‘free’ world
Whether you are content owner, publisher or reseller, retailer of digital media, the ultimate challenge is to work out what a successful business model looks like when the selling price to your customers is £0.00.
Throughout, it’s important to bear in mind that:
1. The consumer perception of ‘free’ is just that - a perception!
2. Retailers/resellers have to subsidise the free catalogue with concepts that can
support a £0.00 price point for consumers.
3. Content owners must still get paid.
A final point to note is that the reseller that must pay the storage, distribution, delivery and associated costs with the media. Therefore, to be able to make any business model work in this brave new world, content owners must review their own cost and revenue models so that both sides can move forward and make digital media a mass commodity.

Moving in the right direction
Not everything will be free to the consumer straightaway so here’s a thought we’re happy to give away.
If a music label demands a cost price of £0.59 per download, it may sell 300 units of that track. However if that label looks closer at their sales model and brings the price down to say £0.29 (an easier price that can be associated against any advertising model) it might see that figure of 300 transformed into sales of 3,000 or more.
Whatever you think of this micro-payment model, the most important thing is to act – and act now. Ignoring the issues of digital media has only made the situation worse for content owners and distributors. Now is the time to work out your strategy and deliver.

** Warning ** Just to point out and to mention - that the site(s) and topic that is being discussed below - if anyone does decide to review any of the content mentioned in my post below - be aware that the sites do show scenes, images and videos of very graphic and explicit adult nature ** You have been warned

NO!

However when 6 grown men start talking about the Porn industry - you don't half get some funny looks from people - even when your discussing it in Vegas!

So why were 6 unkempt men in long stained overcoats talking about the Porn industry? (by the way - any double-entendres are purely coincidental!)

Well the Porn industry is where most of the best e-commerce billing engines are, some of the most secure and locked down "members areas" and the reason why we were talking about this industry: Business Models & Video Streaming.

Perhaps due to it's very nature, the Porn industry gets a hard time of it (steady now..)  - but you look at the growth of Facebook and you think wow that is valued at $xBillion... - but you take a look at something like YouPorn - and suddenly the traffic values almost double that of Facebook - and is one of THE fastest growing websites in the world today. It is a social site where users upload their videos - and other users can comment and rate the videos of the fellow amateurs. It has some of the biggest unique visitors in the world that most business can only ever dream of - and has some nice touches around the flash movies that it previews and delivers.

However it does have some real business challenges - the amount of bandwidth that it uses is well in excess of $1million per week, all the content is free and it has ad support from Google and mixed with some GeoIP and localisation incase you would like to meet "other like minded people in your area".

So the issue is - stats that we have unearthed is that only the videos under 3mins are actually viewed - the bigger ones of 15mins + are normally ignored, the ads are almost irrelevant as the user is there for a specific purpose - and once his "goal" is reached - there is no need to then pursue and ad driven promotion - so dwell time is not that sticky... and conversion of the ads is poor. The other big challenge is the Porn Industry themselves - at any one time there maybe upto 5,000 movies being made in Southern California a day - that is because the life-span of the Porn DVD is 2 weeks - yes only two weeks before it is ripped and then made available on torrents everywhere - so they really only have a 2 week window in order to gain maximum exposure and recoup the costs of the movie.

So now in 2008 YouPorn lead the way with free to view content - the porn industry looks at how it can compete - HD Movies, multi angle and interactive elements are being explored - and of course hoe BluRay will help them reach a new audience by connecting the rich interactive elements with online. YouPorn have also noticed this and have added a new subscription element that does not have "amateurs" but instead full HD quality, with the Porn Superstars and more intuitive scene selections and a whole host more. They have moved away from flash for this and gone with the trusted WMV format that has DRM restrictions - which defies the essence of the original site - but with say 100million eyeballs and a x% convert to the subscription model - that will surely start to pay for some of that bandwidth cost?

So why were 6 men discussing this? Well we were reviewing TV and Movies on line - and where to look to for inspiration and compare business models for of our big clients - 2008 will be an interesting year for streaming media - and apart from the BBC (rant to follow on those guys...) everyone will be looking for the best delivery, the most intuitive platform and retain some sense of commercial acumen to report back to their CEO or CFO that they can sustain a ROI on their business model.

Can it be done? YES - but after 6months looking at where we need to be and what the studios have to offer (take a look at a previous post that discussed this)  - looks like we have just started to climb the mountain - but we do have the knowledge and the brains to deliver to the consumer and return to the investor.

When? Well keep September free and we'll see you on the other side?

Right more "research" - goodness my eyesight is getting worse!

In my quest and mission to inform and of course to put my tuppence worth in in regard to the state of the music industry - I think you have got to look at the state of the business and how the consumer ultimately sees and feels about their music, bands, artists - and dare I say it "heroes"

Does that term even exist in today's MP3 Generation - where they consumer and explore on social networks where it's cooler to be "added" and seen - than to even listen to some artists - I've read on some MySpace music pages that people have had an add - and their only consumption or exposure is the 30sec sample of the mandatory 4 tracks!

So a real fan? A Disposable Hero for a disposable generation! - Well until the next "best" discovery (or plant) is found on MySpace, Facebook....

Look at the history of the biggest selling recordings... (I'm using the US as an example - the biggest territory) it has not really changed over the last 20 years - but what has changed is that the units are still rising...

1. THE BEATLES - 170million units
2. GARTH BROOKS - 128million units
3. ELVIS PRESLEY - 118.5million units
4. LED ZEPPELIN - 111.5million units
5. THE EAGLES - 100million units (Including the biggest US album ever at almost 30million copies)
6. BILLY JOEL - 79.5million units
7. PINK FLOYD - 74.5million units
8. BARBRA STREISAND - 71million units
9. ELTON JOHN - 69.5million units
10. AC/DC - 69million units

OK so the argument would be that this is based on the prolific sales of music during the 60s - 80s - Maybe - but why do the sales keep rising?

At what point does any of the bands / artists become less important, lose their "hero" status - Yes Garth Brooks may not be everyone's cup of tea - but hell he brought Country music to the mass market with its fusion of rock and country that had never been done or accepted before - and the key to Garth's success one of the best LIVE showman on the planet - which in turn resulted in him selling over 120million units.

Even the most hardened music enthusiast will have at least one of the above Top 10 artists in their collection, right next to Arctic Monkeys, Boy Kill Boy or Reverend & the Makers - whether that be a CD collection, or listed on their hard drive alphabetically or on their iPod!

Why?

Because they were and still are Heroes - they created music that lasted generations and inspired more kids to become artists than most (OK I would challenge that a 12 year old potential next Lilly Allen is listening to Barbara Streisand's Memories - but Bab's again is a great artist and wonderful live performer!

So what is the root cause and answer...

The current artists and bands are Disposable - here today gone by the afternoon - re-invented by the evening and in rehab by midnight! There needs to be a long term strategy again embracing the current ways that people consume music and art - LIVE is such an important part of the equation - yes its bloody hard work and long and arduous - but the benefits in the long term are astronomical - the Top 10 above all perform (or used to) in Massive Arenas and Stadiums around the world to sell out crowds - in the 21st Century - you can be there in person - or stream the whole event LIVE via a PPV (Pay Per View) - the technology is there now - and can be an additional revenue stream and allows more people than ever to take part in the event - with online chats, become the director and chose which angle you want to see or download the entire concert on MP3 after the concert is finished - the only restriction now is the imagination of what is a fantastic multi-media opportunity

Or we can continue to churn out artists and bands that can be consumed and be "added" for a day and then taken off the next day as they are no longer seen as the latest and greatest...

Disposable Heroes indeed

(I'm off to rehab, then I'm reforming my band - see you on MySpace! - add you if you if you ask?)

With the 2008 Retail Week Conference coming to London next week (which Conchango is one of the key Sponsors)- I thought that an objective view of the traditional high street was in order to see how in this e-commerce focused age how retailers are coping in the 21st Century and what (if any..) new initiatives and learnings from the digital age have been embraced into good old bricks and mortar!

To say that I was shocked, horrified and downright disgusted just doesn't paint the bleak and grim future that the traditional high street holds if it continues down this bedraggled path. Apart from a few key retailers (M&S, Boots, John Lewis & Tesco) of the stores that I visited - or should I say dared to enter - the results were beyond belief.

Before I begin my usual rant, when I started in retail 22 years ago - it was drilled into me by my former managers that "Retail is Detail!" and "Time to Lean, Time to Clean"

So what is so bad?

OK I'm not talking about those faceless monstrosities that we call Shopping Malls - as they fit the purpose and allow the shopper to wander in relative comfort and safety while browsing familiar high street brand names, eating lunch and leaving the expansive (expensive) car park - but even there we find the seeds of the high street death virus beginning to spawn out of control - Customer Service - followed closely behind with basic hygiene factors (dirty shelves, dusty stock, poor merchandise, dire marketing and lack of detail!)

So let's take a look at the first point of interest - you have decided to venture out on to the high street and do a spot of window shopping, browsing or just to wander around the shops on a beautiful Spring day - and the first thing that hits you is... the state of the streets and the shops themselves.

Dirty, grimy, eroding, decaying and unkempt - now there has to be agreements between, Councils, Landlords and Retailers to actually sort these basics out - if the outside of your shop building looks like a post-apocalyptic war zone - then to be honest you're not really enticing the footfall towards your store. Look at it from a customer's viewpoint - would you enter a store that looked like that from the outside? If the answer is NO, then do something about it, take pride in the appearance of your storefront.

If you do decide to ignore the exterior and venture into the retailer's emporium - you notice that there seems to be no real method to the madness that is the in-store merchandising and placement of their goods, random - or whatever there is too much of will normally grace the unexpected customer. This will normally be accompanied with an in-your-face massive discount, prices slashed or some kind of mid-season SALE. THINK before stuffing the store, window or entrance with so many messages that the consumer is over-awed with messages which only confuses and distracts them from the key. A lot of the independent retailers that I visited decided that cheap neon stars stuck in random fashion, and placed somewhere close to the massive stack of over-stocked, poorly bought items that seemed a good purchase while at some sales convention - this is NOT the way to merchandise your front of store. The customer needs to understand what kind of retail environment you are, if they have ventured in, then they must be given an opportunity to understand what your store is all about - do you really want them to think you are a cheap bargain basement store that just piles it high and sells it cheap? If that is your business model then fine, but at least use some kind of merchandising techniques to let your customer flow around your store - no matter how big or small. Look at the way IKEA lays out their store - yes they could do with some merchandising lessons in a lot of areas - but you flow around the store with relative ease - almost on an "IKEA Journey" - give the customer the same experience at your store.

Now we get to the biggest drawback of the high street - STAFF! - I can, and will tear this area apart after working in this environment, from a weekend shelf-stacker all the way through to managing muti-million pound stores and 100+ staff, and did this for 10 years, and I must say I have never seen such apathetic staff on the high street than I have seen recently. You look at some of these big brands, such as Woolworths, back at head office there will be customer service charter that is agreed with the Operations & HR Teams on what the staff should do, how to behave, how to reacts to customers, how to merchandise, operate a till and how to treat customers (just as you would want to be treated!) - However the reality is very different. Where does this stem from - well you have to look at the Management to begin with Regional Managers and Store Managers - these are the key to the overall smooth running and appearance of the store (inside and out) so going back to the first area that is the external condition of the retail store. If it looks rundown and shabby and well decrepit then be pro-active and do something about it. Your landlords will have a responsibility to maintain the exterior of your shop - get the ball moving and if you have a property department - log the condition with them - and give clear areas that need immediate attention, along with pictures. This will be sent to the landlord / owners of the unit with a set time to have these things resolved. Then of course keep following up - it takes time, patience and perseverance but if you give up and think that its a lost cause then - so is your business and management skills. Then inside the biggest draw back is the staff, who if not chatting to each other behind the counter of their latest exploits or on the salesfloor attempting to merchandise - but really throwing stock onto the shelves and gossiping about what they will do that evening - and using language that would make even me blush - never mind trying to navigate around them with a buggy or wheelchair and then looking and tutting at you if it is you that is inconveniencing them!! I know retail is not the best paid area to work in, but you can not excuse any rudeness or tolerate that kind of behaviour - because as a person interacting with other people, if you do not take pride in what you do, and treat people on how you would like to be treated - then  why are they there? Is it because they think that it is the easy way to make some ££, you don't need a massive set of qualifications to do the job that is expected of you? Whatever it is it is still a job that millions of people do everyday - and in some retail establishments seem to have installed a pride, passion and respect in what they do. So it must then reflect back to the management who are either recruiting the wrong people, or not training and developing their staff - or have the same apathy and simply don't care either! I hope not because what an even sorrier state of affairs the retail sector must be in!

Either way if it continues you (the retailers) wont have a business as customers do have a choice. More and more consumers fed up with the crap attitudes of staff, poor facilities and over priced "tat" and confusing merchandising realise that they can just sit in the comfort of their home, browse the virtual high street and not have to face or put up with the mouthy or ignorant staff.

...but there then lies the next problem for our intrepid consumer - you have abandoned the high street only to be confronted with the biggest faux pas on the Virtual High Street - really really badly designed and executed websites - with bad entrance, poor merchandising - and although there is no staff, somewhere behind the scenes there is a couple of web merchandisers chatting about their weekend exploits while adding products to the online catalogue.... you can see where the next blog is going.

So who are these retailers - time to name and shame...

Woolworths | WH Smith | Adams | Zavvi | Robert Dyers | Morrisons | Rymans / Partners | Whole host of Independents (too many to mention) | Argos | BhS | and too many more to mention here...

(oh and these were stores that were visited from North East of Scotland, through the midlands and down to the South East - and in each case the above retailers were all guilty of all these points)

The internet - don't you just love it!

You can find anything that you want, when you want and wherever you are - you can connect via your iPod, laptop, cell phone, tv or fridge!

If you've watched the web grow from it's humble beginnings to where it is now and just how it has become a seamless part of everyone's lives - it's been one hell of a ride.

It does have it's downsides - back in March 2000 - the technology sector saw the value peak at over 5130 (on the NASDAQ) after that it was the slippery slope all the way and the freefall began the dot-com bubble burst where silly money for silly ideas just had to stop! All the neigh-say'ers saw it coming and that this was indeed the end of the internet!

Far from it - it restructured itself - we looked deep within the industry and realised that business acumen had been replaced with greed - and a promise that we would never get ourselves back into that situation again with a more rigorous business focus on the new ideas and start-ups rather than exuberant VC's throwing even more money after bad ideas and poor business models.

Roll the clock forward onto 2007 & 2008 - and we see a significant drop in crap ideas / concepts that are valued at $100m+ and  signs that current growth is in acquisition and mergers - which is great - but then there is the undercurrent of that silly money and greed coming through again!

Google's entry onto NASDAQ, although seen as crazy money for an Internet company, I would tend to agree with that evaluation with the constant rise and growth of Google and it's additional businesses and innovations - combined with the number of eyballs, clicks and ads - so interesting to see their video ads coming this week - but I'll come back onto that later...

So lets look at where the silly $$$ are right now - I think you have to look at Microsoft and their $240million for a 1.6% stake in Facebook! If that doesn't stink of the 2000 bust then just add in the $44billion that Microsoft tabled to buy Yahoo! - and the alarm bells start ringing!!

What is pushing Microsoft to do this? Not that I'm singling out Microsoft - but you have to look at the size of the $ that is being pushed around here!

Well lets look at the current web climate just now - everyone is vying for traffic - now that could be for anything from basic e-commerce transactions, to dating - but the end game is the same. If you can bring traffic then you have an audience - if you have an audience and your offer is compelling then you can convert - and if you can convert then you have just made a transaction - and if that transaction is linked to the almighty $ or £ then that traffic or traffic driver has a value - and the bigger the traffic the bigger the value... Ok so that is simple basic Internet Commerce 1.1

So you look to the sites that are driving massive traffic (apart from Google) and especially within the social network arena - Facebook and MySpace and that's where the "brains" start to think "you know if there is millions of users visiting Facebook per day then I can sell to those millions, and if I can sell to the millions then that has got to be worth billions to the advertisers and marketing people who are in the business of selling stuff" - so using some classic AxBxC=D and just that D equated to $240million meant that actually Facebook has just been valued at $15billion+

What!!!

Wait - did we not learn anything from 2000 - OK yes Facebook (again I'm not singling out Facebook there are others..) has a lot of eyeballs and traffic - and then add in Cookie-tracking technology - but then there is that assumption that if their on the web their prime for selling - users of the web are getting wiser as is the technology and for every ying there is a yang - so for every Cookie-tracking technology that advertisers place on your system there are others that will block / remove / alter that - I refer back to the days when pop-ups were everywhere and banners were at a similar peak back in the late 90's - but then along came pop-up blockers and ad-blockers which meant that I haven't seen a banner ad since 1998 and love watching the count of pop-ups still rise as advertisers think that they can still get away with pop-ups.

But here is where I think we should start to think a bit harder about where this is going - at the moment the worlds biggest Internet browser happens to be Microsoft's Internet Explorer, and when this runs on Microsoft's XP, Vista or 7 and that same company has just forked out $240m in order to sell stuff via Cookie-tracking technology (which just happened to be purchased by.... yep you got it Microsoft) then if I were Ballmer - I'd make sure that nothing can interfere between IE8 & Windows 7 and my Cookie-tracking technology - so that actually they own the OS, browser and the ads that are delivered - then that is worth Billions! So $240m is a drop in the ocean compared to that -

but your still way off Google's size and stature of web stats that dominate and the user is not on Google to poke, check status, see friends (yet...) they are there to "search" for something and that is more complelling to advertisers and marketeers - and that's why going back to their initial evaluation and continued success really shows its value - so the introduction of video ads - pre-roll, post-roll makes the switch from TV to internet all the more compelling - or does it? (my blog on Google's Video Ads talks more on this subject)

So to wrap up my ramblings then what is main morale of this blog - well I think that yes advertising still has a value and a place - as advertisers move further away from traditional radio and TV and move more onto online - they are promised (from people like Facebook, Microsoft, MySpace....) that the web has audience figures that TV and Radio can only dream of and that they can accurately track, monitor and deliver targeted ads - and because of that they have to pay a premium. So they move their spend online, cough up that premium and sit back and watch those internet users click onto your site...

That my friends, is the theory that is prevalent just now and is funding the bigger acquisitions and silly money to grab more of the advertisers $ - but maybe...just maybe the answer lies in something more compelling than that..... with the drop in traffic on Facebook & MySpace (both down 5% and a combined UK traffic of 13.5m)  and Google still continuing to grow with almost double the UK web traffic than Facebook & MySpace combined - perhaps there is something in "fads" : lack of lasting stickiness, relevance and "forced" commerce that the wiser internet users will not tolerate - and when they do just how much is that $240million worth now??

...and when that happens to a company the size and importance of Microsoft you can start to see why then adding $44bn to buy Yahoo! (which of course - in turn gives you more of that traffic to sell to) - sounds like a real sign of desperation from a company that in this brave new 2008 internet world - may no longer be that relevant or important anymore...

I have never courted controversy in my Blogs to date – unless you class my dig at some of the bureaucracy within the music industry as controversial!

So now maybe this one will, no it’s not about sex, drugs or rock ‘n roll – no this is about the Tobacco industry – and how these brands continue to evolve and develop in the 21^st Century.

So I guess at this stage I must post a health warning so that any filters (no pun intended!)  across the Blog-sphere can be clear that I have issued a warning -  “Smoking Kills” etc... but hell – we (us smokers!) all know that anyway – so you can make the warnings as large as possible – but we still already knew all that stuff.

Hold on.. but so does crossing the road, driving a car (and I’ve lost more friends in car accidents than any pack of Luckys ever have), drinking alcohol, – the list is endless.

So what is this blog all about this time?  Well now that your only allowed to smoke alone in the confides of your bathroom with the extractor fan on full, sucking every last drop of air out of the place, but only on the last Tuesday of each month that begins with the letter “A”! So how the hell do British American Tobacco, Philip Morris and R.J. Reynolds among others keep their individual brands going and develop and create new concepts in the cigarette world?

They can no longer sponsor events (well with their brand names at least) advertise their brands within pubs and clubs, and now some of the private members clubs can no longer have new marketing initiatives as members can no longer smoke on the premises, never mind see any advertising – this is where some of the marketing, trials and events where tobacco manufacturers would introduce new brands, designs and flavours (hey – if you have never smoked then you wouldn’t understand that – yes indeed cigarettes do have distinct flavours)

So being a swinger between Camel and Lucky Strike I have noticed over the past year a few changes that unless you look really hard would go un-noticed to the uninitiated.

Camel launched a new natural flavour cigarette – different pack, subtle design but very well thought through with a subtle camel that had been cut out of the pack and highlighted from the silver design from behind. It has a very rustic organic look to the pack and I must admit a very subtle taste.

Next up has been the pack designs from Benson & Hedges and Lucky Strike – I’m not a big B&H fan (that was my first cigarette back when I was not even a teenager and a 10 pack used to cost me £0.68 – and still have enough dinner money left over for a Mars bar!) each company has looked at this area and come up with some nifty initiatives on how the cigarette user looks while “smirting” for example and with the great designs the pack is becoming more of a statement than the cigarettes themselves. Lucky’s pack that splits in half like a book – I had these last year from the US when there was a limited edition series that documented Lucky Strike cigarettes throughout the years and key milestones that happened back then.

So what am I saying – well if you are over 18 and in full control of your faculties – then why the hell can you not sign up to a website for example where you can have all the information that you want from your latest brands – have an online loyalty campaign (I never did receive my Marlbro jacket and Zippo from my silver foils) and read about some of the new designs, flavours –  So come on BAT, Philip Morris, R.J Reynolds – give us a call and let’s see what we can do for the millions of other smokers around the world that actually do take responsibility for our own actions!

Of course I’m sure that by signing up the user is accepting full accountability and liability for their actions that is smoking and will not pass on their sign on name to anyone under the age of 18 – and please do not smoke the laptop – it’s not very PC!