History > 2008 > USA > Internet, media (V)

About New York

What the Search Engines

Have Found Out About All of Us

December 10, 2008
The New York Times
By JIM DWYER

Google has released its map of the national brain and appetites for 2008, and it turns out that many, many people across America have been asking the Internet “what is love?” and “how to kiss.”

And to tighten the focus, Google has also provided a list of search queries made by people sitting at computers in New York City.

It turns out that New Yorkers are looking for something a bit different. On a list of the 10 subjects that posted the greatest increases this year, the country as a whole was looking for Fox News and information about David Cook, the “American Idol” champion.

Neither made the New York list. Then again, the national list did not have 2 of the city’s top 10: Walter Gropius, the founder of the Bauhaus architecture school, and the Large Hadron Collider, a 17-mile circular underground tunnel in Switzerland that was built to smash protons into each other at the speed of light.

No doubt someone out in cyberspace can explain the surge of interest this year in Gropius, who has been dead since 1969 and has only one structure of any note in the city, the former Pan Am building.

The collider is easier to understand. There were worries that the crash of protons would instantly create a black hole, but in good news that was widely overlooked at the time, no hole appeared — or is it disappeared? — on Sept. 10, the day the machine was turned on. Search-engine interest in the collider promptly dropped off, as people pointed their anxieties and inquiries toward “Wall Street.” (The collider is currently on the fritz, as is Wall Street.)

On the surface, these kinds of lists are supposed to reveal what Google calls the zeitgeist of 2008, though it’s not much of a surprise that people were interested in Sarah Palin and Barack Obama. But they also provide hints of the level of personal details that people are now turning over to search engines and related businesses without much awareness.

The lists, said Lt. Col. Greg Conti, a professor of computer science at West Point, “are just major tsunami-type activities, big waves in the online searches.”

Professor Conti, the author of “Googling Security: How Much Does Google Know About You?” (Addison-Wesley, 2008), contends that Google’s internal tools make it possible to develop detailed pictures of individual interests, not just of masses of teenagers looking for the very latest about Miley Cyrus.

“A complete picture of us as individuals and as companies emerges — political leanings, medical conditions, business acquisitions signaled by job searches,” he said. “It would be very scary if we could play back every search we made. Those can be tied back very precisely to an individual. You can go all the way from individual molecules of water up to the tsunami.”

INFORMATION on the Web looks free, but it is actually swapped for little bits of data that are useful to businesses. Google records Internet protocol addresses that are generated by each computer, cookies permitted by the users, the kind of browser being used, and the operating system of the computer, said Heather Spain, a spokeswoman for Google.

After nine months, Ms. Spain said, Google “anonymises” the data it has collected.

“At that point we permanently delete the last two digits from both the I.P. address and parts of the cookie numbers,” she said. “This breaks the link between the search query and the computer it was entered from. It’s similar to the way in which credit card companies replace digits with hash marks on receipts to improve their customers’ security.”

Professor Conti said that few people have the slightest idea how much of a trail they leave across the Internet. “People tend to think they’re only leaving footprints on sites that they trust,” he said, but many Web sites contain invisible code, like Google Analytics, that can track users over swaths of the Web.

The lists of popular searches, Ms. Spain said, are the products of inquiries by millions of people and do not threaten anyone’s privacy. The tools Google provides to the public for analyzing searches generally make it possible to look at the inquiries made in a particular state, not by individual cities.

For now, surrendering personal information is the cost for asking questions and getting answers quickly. All of the privacy measures are cumbersome.

“I speak about this at hacker conferences,” Professor Conti said, “and if they say something’s hard to use, believe me, it’s hard. There’s really no solution now — except abstinence. And if you choose not to use online tools, you’re not a member of the 21st century.”

    What the Search Engines Have Found Out About All of Us, NYT, 10.12.2008, http://www.nytimes.com/2008/12/10/nyregion/10about.html

Storefronts in Virtual Worlds Bringing in Real Money

December 8, 2008
The New York Times
By STEFANIE OLSEN

Want to walk a mile in Elvis Presley’s blue suede shoes? It’ll cost you 50 cents.

In a down economy, that might be an affordable luxury to a teenager or twentysomething hanging out in a virtual world like Gaia Online, which this week will start selling a range of digital accessories depicting the rock legend’s style, including blue suede shoes, a white-rhinestone jumpsuit ($4) and a pompadour ($1.50).

Younger people unfamiliar with Elvis might prefer to shell out $2 for Justin Timberlake’s signature fedora or $3 for a pair of Snoop Dogg Dobermans to raise the cool quotient of their characters, known as avatars.

That is the premise behind Virtual Greats, a start-up in Huntington Beach, Calif., that represents celebrities and brands in the burgeoning American virtual goods business. The one-year-old company acts as a broker between Hollywood and the technologists who run youth-oriented virtual worlds like Gaia, Whyville and WeeWorld.

So far, the deepening recession has not slowed sales of virtual goods, which executives attribute to people spending more time at home. Gaia Online, a youth world with seven million monthly visitors, sells more than $1 million a month of virtual goods and expects a record month in December, said its chief executive, Craig Sherman. One rival, IMVU, has also had a 15 to 20 percent increase in sales since September.

Facebook, the leading social network, allows members to spend real money to send virtual gifts, and it has worked with corporations like Ben & Jerry’s Homemade, which gave away 500,000 virtual ice cream cones in April as part of a Free Cone Day promotion in stores.

Consumers are tightening their belts, but they still want to socialize with peers and express themselves, industry executives say. Virtual goods like Paris Hilton’s pet Chihuahua or Mr. Timberlake’s puffy jacket can offer a cheap way to stand out.

“People are thinking that they’re sacrificing in other areas so I’ll indulge here with a dollar,” said Charlene Li, a social media analyst formerly with Forrester Research. “Is it worth it? It depends on them.”

By most estimates, customers spend about $1.5 billion a year on virtual goods worldwide. Tencent Holdings, a publicly traded Internet media company based in China, is the leader, with hundreds of millions in annual revenue from virtual goods in online games and other applications. Internet companies in the United States are behind the curve.

For celebrities, licensing virtual products is a new way to make a buck and stay hip with a young crowd. Snoop Dogg’s manager, Constance Schwartz, said she did not have a clue about virtual worlds when Virtual Greats approached her this year, so she and her team spent a week exploring Gaia Online.

After seeing that many teenagers were spending their time and allowances there, Ms. Schwartz explained the concept to Snoop Dogg. She said it was an easy sell, given that Snoop Dogg had been one of the first rap musicians to license works for ring tones and voice tones. His only requirement was that all of the goods be “true to himself,” down to the hair braids, house slippers and plates of Roscoe’s chicken and waffles he regularly eats in Los Angeles.

At Elvis Presley Enterprises, virtual worlds are just another drop in the bucket — 250 licensees worldwide sell 5,000 Elvis products and promotions, including talking dolls, Pez dispensers and a Facebook page. “Elvis is everywhere,” said Kevin Kern, a spokesman for the company, which controls the name, image and likeness of the rock star. “Why not the virtual worlds?”

Virtual Greats appeals to partners like Snoop Dogg and Elvis Presley Enterprises because it does the legwork that neither party — rights holder or virtual-world operator — has the desire or time to do. On one end, it courts celebrities and brands, negotiates licenses and aggregates talent; on the other end, it coalesces an otherwise fragmented market of virtual worlds starved for added sources of revenue.

Dan Jansen, former head of the Boston Consulting Group’s global media and entertainment practice, started Virtual Greats in partnership with Millions of Us, a marketing agency in Sausalito, Calif., that builds virtual worlds. The two companies shared the idea that virtual worlds lacked diverse revenue sources and had no presence when it came to celebrity or branded goods. The Omnicom Group, a marketing and advertising firm, and Allen & Company, an investment bank, invested an undisclosed sum in Virtual Greats.

Virtual goods have profit margins of 70 percent to 90 percent because they do not cost much to store, reproduce or distribute. Still, making a profit requires high volume. Next year, Virtual Greats hopes to represent 30 worlds and more than 50 artists.

It is talking with movie studios about licensing rights to characters like Ferris Bueller and with sports leagues for the rights to jerseys. It is also courting luxury brands like Gucci, Prada and Chanel for the rights to represent their goods online.

One challenge for Virtual Greats and its partners is to create legitimacy for the online brands while ensuring that there is not too much supply.

Mr. Sherman says Gaia uses “forced forms of rarity,” or limited editions of items. Over time, those items can command a premium in the secondary market, where members trade their goods for virtual currency. For example, a Gaia golden halo now out of production sold for $6,000 on eBay, he said.

Similarly, Virtual Greats has learned that it underpriced some items, like the Hulk Impact Crater, which originally sold for 50 cents, then went up sixfold in the Gaia aftermarket. In its several months of testing, Virtual Greats has found that people prefer more expensive items with a brand name over cheaper, generic items. And larger items that are easier to see are more popular than small ones.

Licensed virtual goods probably will not be more than a tiny niche business. Generic items are a huge portion of the virtual-goods market, and company-sponsored promotions like the Ben & Jerry’s cones on Facebook will probably grow in importance as marketers try to extend their brands onto social networks.

The economic downturn could make many people reconsider the notion of spending real money to outfit fictional personas with an Elvis pompadour or a Snoop Dogg hoodie.

Still, Mr. Jansen argues that people always crave a bit of brand-name glamour. “Maybe you can’t afford that Louis Vuitton bag, but you could in virtual form,” he said. “They’re an affordable luxury in this difficult economy.”

    Storefronts in Virtual Worlds Bringing in Real Money, NYT, 8.12.2008, http://www.nytimes.com/2008/12/08/technology/internet/08virtual.html

An Online Sales Boom That May Not Last

December 4, 2008
The New York Times
By CLAIRE CAIN MILLER

SAN FRANCISCO — In a rare bright spot for the retail industry, e-commerce sites had a strong holiday weekend, with online sales from Friday through Monday up 13 percent compared with last year, according to data released Wednesday by comScore.

The Monday after Thanksgiving was the second-heaviest online spending day on record, comScore said, behind only Dec. 10, 2007. Online sales climbed to $846 million, up 15 percent from the previous year.

“It was higher than I would have anticipated, but I’m not entirely surprised, just because the level of discounting was so aggressive,” said Andrew Lipsman, a senior industry analyst at comScore, which tracks a variety of Internet data.

Still, strong Web sales are unlikely to bail out the retail industry, which is contending with a recession and a sharp decline in consumers’ wealth. E-commerce now accounts for only 7 percent of overall sales, according to Shop.org, the e-commerce arm of the National Retail Federation. And online sales were down 2 percent for the season so far — the first decline since the Web became a significant retail channel.

The Monday after Thanksgiving — which Shop.org calls Cyber Monday — has been a bellwether for online holiday sales. Sales growth on that day has historically fallen within two percentage points of total online sales growth for the season.

This year will be a different story, Mr. Lipsman said. ComScore has predicted that sales will be flat this season, and the firm is not changing its forecast as a result of sales Monday.

“There was evidently some pent-up demand,” said Scott Silverman, executive director of Shop.org. “The consumer could have said, ‘I’m going to do most of my shopping this day,’ and we could see a drop-off for the rest of the season.”

The online sales growth over the weekend mirrored offline sales, which the National Retail Federation said increased 18 percent over last year. Many retailers will give precise figures Thursday in their November sales reports.

Online, the virtual big-box stores, which had some of the steepest discounts, got the most visits. On Monday, eBay, Amazon, Wal-Mart, Target and Best Buy were the top e-commerce sites, Nielsen Online said.

At PayPal, which is used to process almost all eBay sales, the number of transactions Monday was up 27 percent from the year before, said Jim Griffith, whom eBay calls its marketplace expert. To lure shoppers, the auction site is promoting $1 holiday “doorbusters.”

The most popular product sold on eBay Monday was the Nintendo Wii game console — 3,017 were sold for an average price of $349. The Wii Fit, an add-on device for the console, was also popular, with 1,305 units sold for an average $143.

Amazon.com had strong sales of consumer electronics and toys, said Sally Fouts, a spokeswoman for the company. Deals included a Logitech universal remote control, marked down to $137.28 from $249.99, and a Canon digital camera, down to $159.94 from $299.99.

Beauty products accounted for a surprisingly large slice of sales Monday, said Sucharita Mulpuru, an e-commerce analyst at the research firm Forrester. “Cosmetics are doing really well this year, because it’s those affordable luxuries,” she said.

Average order values have been smaller this year, Ms. Mulpuru said: “It may not be a sweater, but it’s a scarf.”

One reason that shoppers finally filled their online shopping carts might be that there are five fewer shopping days between Thanksgiving and Christmas this year than last. “People have to spend a certain amount of money during Christmas,” Ms. Mulpuru said, “and that money was not spent in November, which means it has to be spent in December.”

    An Online Sales Boom That May Not Last, NYT, 4.12.2008, http://www.nytimes.com/2008/12/04/technology/internet/04online.html

Advertising

Web Marketing

That Hopes to Learn What Attracts a Click

December 3, 2008
The New York Times
By STEPHANIE CLIFFORD

ONLINE advertisers are not lacking in choices: They can display their ads in any color, on any site, with any message, to any audience, with any image.

Now, a new breed of companies is trying to tackle all of those options and determine what ad works for a specific audience. They are creating hundreds of versions of clients’ online ads, changing elements like color, type font, message, and image to see what combination draws clicks on a particular site or from a specific audience.

It is technology that could cause a shift in the advertising world. The creators and designers of ads have long believed that a clever idea or emotional resonance drives an ad’s success. But that argument may be difficult to make when analysis suggests that it is not an ad’s brilliant tagline but its pale-yellow background and sans serif font that attracts customers.

The question is, “how do we combine creative energy, which is a manual and sort of qualitative exercise, with the raw processing power of computing, which is all about quantitative data?” said Tim Hanlon, executive vice president of VivaKi Ventures, the investment unit of Publicis Groupe.

“I think it’s clear that the traditional process of agencies is clearly not going to survive the digital era without significant changes to our approaches,” Mr. Hanlon said.

•

The push to automate the creative elements of ad units is coming from two companies in California, not Madison Avenue.

Adisn, based in Long Beach, and Tumri, based in Mountain View, are working both sides of the ad equation. On one, they are trying to figure out who is looking at a page by using a mix of behavioral targeting and analysis of the page’s content. On the other side, they are assembling an ad on the fly that is meant to appeal to that person.

Both companies assume there is no perfect version of an ad, and instead assemble hundreds of different versions that are displayed on Web sites where their clients have bought ad space, showing versions of an ad to actual consumers as they browse the Web.

That might lead to finding that an ad for a baby supply store is more popular with young mothers when it features a bottle instead of diapers.

(Adisn and Tumri both measure the ad’s effectiveness based on parameters the advertiser sets, like how many people clicked on the ad or how many people actually bought something after clicking on it. They compare those with standard ads they run as part of a control group.)

Adisn’s approach has been to build a database of related words so it can assess the content of a Web site or blog based on the words on its pages.

Adisn then buys space on Web sites, and uses its information to find an appropriate ad to show visitors to those sites. If a visitor views pages about beaches, weather and Hawaii, it might suggest that the visitor is interested in Hawaiian travel.

Based on that analysis, Adisn’s system pulls different components — actors, fonts, background images — to make an ad. For example, it might show an ad with a blue background, an image of a beach, and a text about tickets to Hawaii. “Once we’ve built this huge database of hundreds of millions of relationships” between words, said Andy Moeck, the chief executive of Adisn, the system can “make a very good real-time decision as to what is the most relevant or appropriate campaign we could show.”

Simple Green, the cleaning brand, began working with Adisn this year to advertise a new line of products called Simple Green Naturals.

“If it’s a woman looking at a kitchen with a stainless steel refrigerator, they can show a stainless steel product,” said Jessica Frandson, the vice president for marketing for Simple Green. While Ms. Frandson gave Adisn a general idea of what she wanted, she also let the agency do almost random combinations with about 10 percent of her ads to see which of those combinations had the highest click-through rates.

“If it wants to be purple and orange, if that’s going to be appealing to my customer, then so be it,” she said.

Even Mr. Moeck said he was often surprised by the success of certain ads. “Some of it, I just scratch my head and say, ‘I have no idea,’ ” he said.

Tumri’s approach is slightly different. It creates a template for ads, including slots for the message, the color, the image and other elements.

Unlike Adisn, it does not buy ad space, but lets clients — like Sears and Best Buy — choose and buy space on sites themselves. And rather than building a contextual database like Adisn, Tumri uses whatever targeting approach advertisers are already using, whether it is behavioral or contextual or demographic, and assembles an ad on the fly based on that information.

“It’s reporting back to the advertiser and agency saying, ‘Guess what? The soccer mom in Indiana likes background three, which was pink, likes image four, which was the S.U.V., and likes marketing message 12, about room, safety and comfort,” said Calvin Lui, chief of Tumri.

•

Some advertisers are using that information just to see which version of the ad works best, but Mr. Lui emphasized that the appropriate ad is not static, and changes all the time as content on the page changes.

While the planners and buyers in advertising agencies are intrigued by the idea of measuring each part of an ad, the creative staff that designs ads is less focused on measurement and more focused on the overall effect.

“I think the creative community has to get very comfortable with results-based outcomes in marketing,” said Mr. Hanlon, whose company has an interest in Tumri. “There are a lot of creative people who didn’t sign up for that kind of world.”

Bant Breen, the president of worldwide digital communications at Initiative, the Interpublic Group media buying and planning firm, had a similar view. “The traditional creative process right now is not structured to essentially deliver hundreds of permutations, or hundreds of ideas for messaging,” said Mr. Breen, whose firm is using Tumri to determine which ads are working.

“There’s no doubt that there will be a lot of data that can be collected that could be applied to the creative process.”

But, he said, “that’s not necessarily an easy discussion to have with great art directors.”

Web Marketing That Hopes to Learn What Attracts a Click, NYT, 3.12.2008, http://www.nytimes.com/2008/12/03/business/media/03adco.html