I saw an AdMob ad for an “X-Ray Scan” in the Viigo application, which reminded me of the x-ray glasses you would see advertised in comic books along with Sea Monkeys and what-not (living outside of the US as a kid, I was always intrigued by these products yet they were also out of my reach – ironically exactly the point here as we’ll see), and so I “thumbwheeled” on the ad.

It was for mobile wallpaper that looks like an x-ray scan. And of course, I can get lots of other fun wallpapers and ringtones for “just 9.99/mo”. Remember to remove the $ sign, I’m sure, it’s not by accident. I clicked on the terms link. Very  sparse, almost non-existent. About – was blank except for a graphic that has the name 28282 on it and very little else. How did I know it was running via AdMob? The title of the page in my browser is “X Ray AdMob”. I have no doubt that these ads are making a whole heckuva lot of money for these guys.

I decided to find out more about 28282 and did a search for them online. I found the Club 28282 page on Class Action Connect and it was quite sad. Lots of posts from parents, kids, people thinking that by complaining on this board someone was going to help them because they were unable to stop the services and/or the SMS spam that accompanied it. One person had over $500 of charges racked up by their 11-year old. Etc. Etc. Read some of the comments. Go on.

What was crazy though, was that I first read this page on my browser, with no ads to speak of, but when I looked again online in a full browser, this is what I saw:

Ringtones ripoff ads

Unreal – Google contextually targeting ringtones and basically pouring salt into the wounds of anyone visiting here by displaying similar ads for the very services people are here to complain about. This stuff is toxic, but the carriers make a lot of money out it and it appears as if they are okay letting the cycle of bad experience – complaint – chargeback go on. I heard a story recently (perhaps apocryphal? sounds very plausible though) of someone who was a big hero back in the day at MCI Worldcom since they figured out a regulation/legal loophole to add a $1 “service fee” onto every customer’s bill. If you called in they would automatically remove it but it was a quick way for them to make millions of extra dollars.

Forget about the ads it runs, for Google, becoming a mobile phone hardware company will give them all the customer service headaches they could ever want. Couldn’t imagine being a phone carrier. Good luck.

No surprise to those who know me, the area I spend most of my time thinking about during the workday is the online advertising business. In running a company that participates in this space and has some different takes on the existing ways of doing things (albeit many of these staid practices are all of 2, 5 or 10 years old), it often behooves me to have handy some analogies to help laypeople navigate our space and understand what it is that I am doing day after day and hour after hour.

Analogies and comparisons for online advertising are most often made with financial markets, and don’t always hold up. I did, however, stumble on some recent interesting information looking at the historical context in financial markets and talking about the difference between a financial market and a financial exchange. The text below is from a review of The London Stock Exchange: A History by Ranald C. Michie (1999) .

Michie begins his story, “From Market to Exchange, 1693-1801,” with an overview of the rise of an informal, unorganized, secondary market in government debt. This begins, in his view, in 1693 with the establishment of permanent debt that could be transferred. As the amount of debt increased with each successive war, so did the number of investors, encouraged by the government’s ability to continue servicing at least the regular interest payments promised on the debt issues. Gradually, specialists arose, both brokers and jobbers, both very important to the operation of an efficient secondary market for any set of products. Brokers made their money from commissions they charged to their principals, who desired to buy or sell an amount of a particular security within a specified price range. Jobbers provided the brokers the counterparties to their principals, offering to sell to their buyer or to buy from their seller the particular security. They made their money on the difference between the prices they bid or asked, and saved the broker the time and expense of finding a specific counter party to his original client. Both made more money, the greater the volume of transactions. Brokers made a commission charged to their principals; jobbers made a “turn” on the bid-ask spread always intending to buy low and sell high. By the end of the eighteenth century, the number of investors was large and a number of specialized brokers and jobbers seemed to be making a living from their respective trading activities. Nevertheless, asserts Michie, this was just a market, not an organized exchange that could affect by its own rules and enforcement decisions the way the security market would develop in the future. In 1801, however, the informal London stock market ceased to be shaped strictly by outside forces and henceforth could determine in part its own destiny through the decisions taken by its governing bodies.

Reviewed for EH.NET by Larry Neal, Department of Economics, University of Illinois.

The current state of the online display advertising market I think is quite similar to the above, with “brokers” and “jobbers” earning revenue by providing market access for varying amounts of commissions/fees that I am sure historically were quite volatile and in the absence of regulation might correlate with the particular client’s level of sophistication. The online ad space is a series of private markets loosely connected and as such, the connective glue that companies like ad networks provide definitely makes it stick together and these types of firms who already have been involved in these markets will play a role if shifts to one or more true exchanges take place. Again quoting the book review below, the LSE success was built on allowing access under controlled conditions, utilizing the skill and knowledge of the jobbers to help make markets and provide liquidity, and then the cycle of specialization with tight alignment of interests (specialization can only work well if motives of partners are in sync and measured/monitored by market and/or regulatory mechanisms… the relationships between entities becoming more important than the internal capabilities of one -> a market ecosystem develops…):

What accounts for this earlier success? Internally, one factor was that dual control by Proprietors and Members continued to be effective in offsetting tendencies towards restricting access to the exchange; another was the continued importance numerically of jobbers within the membership of the exchange. Externally, the most important factor was the central role played by the Stock Exchange in the money market of London. The ever-expanding joint stock banks in London found that their loanable funds could be employed profitably for short periods of time by lending to so-called money brokers who were members of the Stock Exchange. They, in turn, could lend on security of shares and stocks held by jobbers to allow them to settle differences at the fortnightly settlements or to continue their positions to the next account. Specialization in function within the Stock Exchange thus occurred that allowed further specialization in function among the financial intermediaries of Lombard Street. These nested specializations increased efficiency in the use of funds by all concerned. They also allowed, however, increased efficiency within the growing number of provincial stock exchanges, who could tap into the London money market easily through the branches of the joint-stock banks.

The development of stock exchanges is rich (sometimes eery) fodder for analogies for the development of new, electronic markets and exchanges. In the end, people and the incentives that connect them to one another and their institutions are the key underpinnings, but more about that later.

My wife remarked to me that the prices of Blu-Ray players had come down very quickly, more quickly than she remembered for other similar technologies like DVD players. Apparently is it pretty close and bluray might be slightly cheaper but that makes sense – the ability for a technology to get to scale via expanding various distribution channels, outsourced manufacturing that can make it cheaper, faster etc. will make these changes happen ever more quickly.

With digital goods this is probably magnified by an order of magnitude because the costs of reproduction are far lower (even though writing software does take time as we all know!), effectively zero for the copying or redistribution of some digital items.

2010 we are going to see some amazing developments and changes, and the pace will accelerate even further.

There’s always something fun about real-time data, especially when it’s related to money like this map of where Chitika is making money right now in the US.

Apropos of nothing: I saw this movie yesterday, and thought it was great. It certainly vies with “District 9″ as my favorite film of the year – not that this year I have seen that many to be quite fair… nonetheless. Lots of interesting layers to the film and a couple of (what I thought were) good twists. It’s the kind of role Clooney does very well. I’m almost to 1mm miles with American, and don’t travel that much these days but figure I’ll get over that hump soon — why not?

Yahoo! just launched a page where you can manage how they classify your interests based on your search and other activity on the Yahoo! Network.

http://info.yahoo.com/privacy/us/yahoo/opt_out/targeting/

Mine was blank, and then I did two searches, one for “powerball” and one for “cars”. These are the categories I am now flagged as being interested in:

Interest Categories:

Automotive

Entertainment

Entertainment > Movies > Animation

Entertainment > Movies > Childrens

So I can see how that the lottery/entertainment categorization could go along with it being a move title etc. But what was odd was then the next list which was “Categories you search:”

At which point I have to say, “huh?” – this is really what I’m searching for with those two keywords? Categorization is dangerous – but it is really difficult to create an ad product that takes keywords as an input because you need tens or hundreds of thousands unless you’re only focusing on the “head” keywords and as we know people don’t only search that way. Fascinating though, now you can do some searches, clear your cookies and start again and see how Yahoo! classifies you. Or opt-out of it all of course.

I’m amazed that a senior executive at a major ad company like The Rubicon Project would write something like this (in their Q3 update):

“Many of these platforms ultimately value all inventory equally, from the New York Times or Sports Illustrated, to a niche WordPress sports blog,” [JT] Batson [,Rubicon’s EVP of Revenue and Global Development] said. “And for certain ads, that is OK. But publishers correctly argue that a reader seeing an ad against the trusted brand of a well-known site is more valuable than a reader seeing the ad on a site they don’t fully trust.”

Referencing the “agency-backed buying platforms” which presumably encompasses all demand-side aggregators. Any company on the demand side of the display ad business (agency-backed or not) that does value all inventory equally is surely going to fail. Having a set of well-known branded sites in a campaign is certainly going to create more confidence for brand-sensitive advertisers, but that is of course one of many determinants of the value of inventory. Audience, position on page, user frequency, number of other ads on the page — these are all certainly factors in valuing ad inventory.

As I mentioned on CPMa’s blog recently, some very well-known publisher brands appear to be giving themselves liberally to anyone with an ad to show. Those in our business who have real technology and a real understanding of media know that the way we make this business work is to get past the irrational, emotional responses that “nobody cares about my brand” and bring data to the table to support our suppositions.

I was trying to post a comment to this story on Mediapost about newspapers arguing for behavioral targeting online, but it crapped out on me. So i figured I’d post it here:

I believe there should be more disclosure around BT. I also believe if done properly it can provide a lot of lift for advertisers and the ability for publishers to make more money and have a more sustainable business online. There are, however, double standards as applied to online advertising versus what happens in the offline world. When I subscribe to the Wall Street Journal or the New York Times (or most publications), they make money on selling my name and address (PII) and the fact that I’m a subscriber to various third parties. When I get one of these third-party direct mailings sent to me at home based on my address and data-matched to other information about me in various databases out there, I don’t get to find out who gave it up and how.

Consumers already ignore irrelevant mailings offline and irrelevant ads online, and with silicon being cheaper than paper and BT being non-PII, why do we devote so much more attention it seems to this online side of the equation and make it extra hard for the publishers to stay in business?

Was playing around with new site BigDeal.com, similar to some others like Swoopo.com – it’s an auction site where you pay a small amount ($0.75) for the right to bid in an auction. The price increments by $0.15 and the auction continues for another 30 seconds, or if there are less than 30 seconds left, the timer goes up to 30 seconds.

There’s a lot of crazy in this – you may end up spending money to bid and having nothing in return. The winner’s curse is certainly prevalent here – in order to win you not only have to keep a watchful eye and keep bidding, but you also have to be very cognizant of how many bids each of your rivals have put in, and gauge their commitment to winning. As an example, I placed a few bids in an auction where the winner ended up having bid 1306 times for a $1700 imac – they finally won the auction at a price of $538 but had racked up $980 in bidding charges meaning they’d only saved about 10 percent versus the retail price here.

Someone else swooping in could have gotten it for cheaper since they had “invested” a lot less in terms of bids – but that’s the issue, you are struggling against guys who have sunk a lot of time and money into the auction. Your bid dollars can be used for discounts on gift cards (though a max of 25% only so you have to shell out more money), but at least it’s not all lost. Kind of interesting model. Here’s the Techcrunch writeup. These types of systems are very very smart from a consumer behavior/dynamics perspective.

The site is still fairly new, so prices may be lower than they will at scale but here are some stats. On the above auction there were 3589 bids at $0.75 each = $2691.75. The product sold for $538 meaning that BigDeal.com was supposedly out $1162 on buying the product from Amazon. If we assume they break even on the 25% discount on the gift cards, and they get maybe 30% breakage on people not buying gift cards, then they get to keep $807 less the net price of the item of $1162 meaning they will end up losing a few hundred dollars, though it will take some time for that to happen of course as I’m sure the cycle times are a few weeks at least and probably months. Not bad for someone who just started – the margins get better with more bidders and more breakage. Fun stuff and interesting to play around with these ideas.

It might be a little early for “end of year” trends type posts, but following on Jay Weintraub’s excellent dissection of the flog trend from a few months ago, 2009 may be the year of the affiliate blog website (with the fake blog and fake news site being the most popular). I thought it would be interesting to share this list of weight loss flogs. Jay warned me not to visit these sites since some of the creators have since shut them down and replaced them with forwards to not-so-good sites apparently. I didn’t see if that was the case . The source for these sites is Nielsen/NetRatings (non-disclaimer, I used to work for NetRatings but did not work there long enough to have any stock, and I guess this list just shows you they don’t discriminate which is good for a market researcher…)

1flatstomachrule.com
1weightlosssecret.info
2-Rules-to-Flat-Stomach
2xFatBurningPlan.com
Abbydietjournal.com
AbbysDietJournal.com
AbbysDietStoryBlog.com
AdrianaLostWeight.com
AdrianasWeightLoss.com
AlanasWeightLoss.com
Aleshasdietblog.com
alicesdiet.com
AlisasWeightLoss.com
Alisonsweightloss.com
Allison’s Weight Loss
ALLY’S WEIGHT LOSS DIARY
Allysweightlossblog.com
Alyssa’s Rachel Ray Diet Blog
Amazing Brazilian Diet Pill
Amazon Diet
AmbersDietBlog.com
AmbersDietSuccess.com
Amy’s Diet Blog
Amysdietjournal.com
AmysDietSecret.com
AmysWeightLossDiary.com
Andreas Weight Loss Blog
Andreasdietblog.com
AngieWeightLoss.com
Anniesdietstory.com
Anniesweightblog.com
AnnsWeightLoss.com
AprilsWeightLoss.com
Ariana’s Diet Blog
Ashley’s Rachael Ray Diet Blog
ashleysdietblog
AshleysWeightLoss.com
Autumn’s Weight Loss
Ava’s Diet Blog
BeckysDiet.com
BeckysWeightLoss.net
Best-diet-picks.com
Beth’s Diet Plan
BethsDietBlog.com
BetsysWeightLoss.com
Beverly’s Diet Journal
Bevsdietblog.com
BiancasWeightLoss.com
BriansWeightLossDiary.com
BridgetsWeightLoss.com
Brigette’s Diet Blog
Britney’s WeightLoss Story
Brittanysdietstory.com
BrittanysWeightLoss.com
candicediet.com
Carasdietdiary.com
CarlasWeightLoss.com
CassidysWeightLoss.com
CathysDietBlog.com
CelebrityWeightLossSecret.com
Celine’s Weight Loss Blog and Tracker
cherylsweightloss.com
Christysdiet.com
Cindiesweightloss.com
claudiasweightloss.info
CRISTIESDIETBLOG.COM
DaniellesWeightLoss.com
DanielsWeightLoss.com
Dani’s Weight Loss Blog
DebbysDietBlog.com
DebrasDiet.com
DebrasWeightLoss.com
Denisesdiet.com
DestinysWeightLoss.com
DietingMother.com
Dietstoryblog.com
Diet-To-Go
Dinasweightloss.com
DonnaDailyDiet.com
DonnasWeightLoss.com
Double-Diet.net
DrOzDietSecrets.com
Easydiettips.org
EasyWeightlossTea.com
ElensWeightLoss.com
Elisa’s Weight Loss
elisasbellyfatlossblog.com
ElizabethsWeightLoss.com
EllensDietBlog.com
ElliesWeightLoss.com
EmilysWeightLoss.com
EmmasWeightLoss.com
EmmasWeightLossSuccess.com
ErinWeightLoss.com
Evasdietblog.com
gloriasweightlossblog.com
Heather’s Diet Log
helensdiet.com
HelensDietDiary.com
HollysWeightLoss.com
HotCelebDiet.com
image weightloss centers
Jane’s Weight Loss Secret
Janesdiet.org
JeaniesWeightLoss.com
JennasDietBlog.com
JennasWeightLoss.com
Jennifer’s Weight Loss Story
jenniferweightloss.com
Jenns Weight Loss
JennsWeightLoss.com
jennylosesweight.com
JennyLostWeight.com
Jenny’s Diet Blog
Jenny’s Weight Loss Success
JennysDietBlog.com
Jenny-weightloss.com
Jen’s Diet Blog
JensWeightLossStory.com
Jessicas-Diet.com
jessiesdietblog.com
jesssdietblog.com
Jilliansdietjournal.com
Jill’s Weight Loss Story
JillsWeightloss.com
JillsWeightLossBlog.com
JoycesWeightLoss.com
Judy’s Weight Loss
JudysWeight.com
JudysWeightLoss.com
Juliasweightlossblog.com
juliesdietblog.com
Justinsweightloss.com
Kailey’s Weight Loss
Karen’s Weight Loss
KarensWeightLoss.com
Karenweightstruggle.com
KatesDietStory.com
KathyLostWeight.com
Kathy’s Diet Success
Katie’s Weight Loss
KatiesWeightlossDiary.com
KatysWeightLoss.com
Kaylasdietplan.com
KayleesWeightLoss.com/Blog
KaysDiet.com
KaysWeightLoss.com
Kellysdietingjournal.com
KellysWeightDairy.com
KellysWeightDiary.com
KellysWeightLossStory.com
Kelseyhowardweightloss.com
KelseysWeightLoss.com
KimbysWeightLoss.com
Kim’s Diet
Kim’s Rachael Ray Diet Blog
kimsdietplan com
KimsFatLoss.com
Kyla’s Weight Loss
LarrysWeightLoss.com
Laura’s Weight Loss
Laura’s Weight Loss
LaurenWeightLoss.com
LeahWeightLossBlog.com
LilysWeightLossBlog.com
lindas-diet.com
Lisa’s Weight Loss
LisaWeightLoss.com
Lorrie’s Weight Loss Story
Losing Weight Gaining Life
LostWeightDieting.com
Lucysweightloss.com
MadelinesWeightoLoss.com
MariasDietBlog.com
mariasdietstory.com
Mariasweightlossblog.com
Marie’s weight loss secret
MarlenasWeightLoss.com
Mary’s Weight Loss Blog
Marysdietblog.com
Medical Weight Loss Clinic
Megan’s Diet Diary
MegansWeightLossRecipe.com
Megsdoublediet.com
Melissas Weight Loss Diet
Meloras Weight Loss
Melsdietblog.com
Mica’s Weightloss Blog
MichellesWeightLoss.com
midietaincreible.com
Mikeacaidiet.com
Mike’s Diet Blog
MindysDietBlog.com
Molly’s Diet Blog
MollysWeightLossJourney.com
MommysWeightLoss.com
Momsdiettips.com
Momsweightjournal.com
monica’s weight loss
MonicasDiet.com
MonicasDietBlog.com
MyDietMagic.com
MyDietRevealed.com
MyDoubleDiet.com
Mypersonalweightlossblog.com
Mysecretstofastweightloss.com
mysecrettolosingweight.com
myweightlossblog.net
MyWeightLossLife.com
Natalia’s Weight Loss Story
netDietMD.com
Newcelebdiet.com
nichollesdietpage.info
NichollesWeightLoss.com
OliviasDietBlog.com
Onegirlsweightloss.com
Oregon Weight Loss Surgery
RachaelRaydiets.com
RachelDietWorks.com
Rachel’s Weight Loss
Renee’s Weight loss story
SarahsWeightLoss.com
Saras Weight Loss Story
SarasWeightLoss.com
savannahsweightloss.com
ShelbysWeightLoss.com
Sherriesweightloss.com
SmartDiets.com
Sofia’s Weight loss
SofiesWeightLoss.com
SophiasWeightLoss.com
SouthwestWeightLoss.com
Susana-Weight-Loss.com
SusansWeightChallenge.com
Therachelraydiet.com
thisgirlsweightloss.com
Tinasdietstory.com
TracysDiet.com
TracysWeightLoss.com
TrueDietStory.com
Veronica’s Weight Loss Blog
Victoria’s Rachel Ray Diet Blog
Victoriasweightloss.com
viviansweightloss.com