A number of recent articles have suggested we may be heading for the second web crash.  Most of these theories are base don the inflated prices being paid for barely profitable companies because they fall under the category of “social media” or because they are the latest phenomenon on the web.  Others are quoting the fact that advertiser supply is outstripping demand and many websites are being left with unfulfilled inventory.

But does this signify the beginning of the end? I don’t think so.  I’m not saying change isn’t around the corner, but at the end of the day many companies are yet to fully embrace the potential of the Internet and so there is still growth on the horizon as far as I can see.  I agree with the comments about inflated prices, Google is unlikely to ever recoup the $1.65 Billion it paid for Youtube unless it can come up with a more innovative way of monetising its traffic.  Similarly, although it is a profitable network, Microsoft paid a massively inflated price of $240 million for a measly 1.6% share in Facebook which it will never see a return on (in my humble opinion).  But this does not necessarily mean that we are seeing a repeat of the dot com collapse.  For a start, Google and MSN can afford it, they have VERY large warchest built up from years of successful ventures.

More likely, for me, is that we will see a fall in the ad prices demanded as inventory grows and needs to be fulfilled.  This may mean the demise of some smaller players in the market but those with a strong legacy and a solid proposition will survive and continue to prosper.  In any industry you are at risk unless you have a solid offering and the Internet is no different, just because a few bedroom companies go out of business doesn’t make it the end of the Internet!

All of this can only be good for advertisers as the market levels out, and potentially dips a little, so will the prices.  Bring it on I say!

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Just as people are getting to grips with the so called web 2.0 phenomenon already there are people within the internet market touting the arrival of web 3.0! hang on, what happened there? did I miss something?

Apparently, where as web 2.0 was about engagement and interaction, web 3.0 is the “semantic web”, where computer intelligence interprets information without use intervention.  An example given by Ruth Mortimer of brand strategy, is that of search engine spiders and how, with the emergence of web 3.0, will be able to interpret context and meaning of text within a page rather than simply looking at code without meaning, hence giving a more sophisticated search result.

But where did web 2.0 go? I think there is a real danger here of people getting ahead of themselves and predicting the future before theyve mastered the present.  Many companies are yet to embrace the web 2.0 ethic (and some even the basics of online!) and to go around touting the revolution is scare mongering in the extreme unless it is given some context.  My advice to companies reading these articles would be to look at your webstie from a customers point of view, decide what they would want to see, what they would want to do and provide this functionality.  If you get the basics right to start with and put in place an infrastructure solid enough to support it you will be in a strong postion to embrace whatever new technologies are around the corner.

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According to reports from Reuters, Kevin Johnson, Microsoft’s platform and services president, believes the company can gain a 40% share of the search market in the next 3-5 years. This is an ambitious target by anyone’s standards with Google holding a 80% market share at present it is difficult to see how they can achieve this from their own 6% hold at the moment.  Apparently they have a “10,20,30,40” plan suggesting this will be a slow build rather than a quick win. It certainly suggests they may be looking at acquisition to help them gain some share, perhaps a purchase of yahoo, and maybe even ask as this would tip them over the double figures mark and make the deficit a lot smaller. It could be a very interesting few years for the market if they are hell bent on achieving their goals as they certainly aren’t short of a bit of cash.  Mind you, neither are Google so it would be a very exciting shoot off if it comes to it.  Personally I cant see 40% begin achievable unless Google hit the self destruct button and do something which turns people against them.

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It has been reported this week that the rise in traffic to social networking sites has coincided with a drop in traffic to web mail sites such as yahoo mail and hotmail. This has sparked discussion about the use of social networks for communication sparking of the demise of web based email. Obviously this is an overreaction, as tends to happen with the press, but it is an interesting point all the same. Where is the need for personal email accounts when you can be in touch with all your friends through myspace, facebook, or whichever else is the network of the moment. This led me to consider what are the limitations of social networks which could be the saving grace for web mail solutions? So I compiled the list below:

• Reach: although the social networks have huge user bases they are unlikely to cover everybody you know, yet most people will have a functioning email address. There is therefore likely to be at least a few people within your group of friends you cannot contact through your network of choice.
• Flexibility: you can write what you want in an email, and can attach any type of file you wish, making it a much more flexible solution than the networks. They are however catching up through the various plug ins and applications that are sprouting up daily.
• Privacy: emails are more private than wall post, although facebook has the facility to send private messages as well.
• Length of message: wall posts are more like the text messages with emails as the phone calls. more detail can be added and more information contained and explained, the phone call still isn’t dead despite the popularity of texts.

I’m sure there are more to add to the list but none that I can think of right now. It will be interesting to see if the trend continues though and what this means to the email portals. Falling usage must also results in a fall in advertising rates and available inventory??

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I have been reading up recently on tracking solutions I came across the argument between first click and last click tracking. More specifically which one gives the most accurate measure of performance?

First click tracking is the term given to solutions which cookie the user on their first visit to a website and record the source of their visit.  On each subsequent visit they are recognised as the same visitor and allocated back to the original source and so when they convert through to sale/application/sign up the software records them this as the origin of the conversion.

Last click tracking relies on session cookies and so no matter how many times a user visits a site, the source of their conversion will be recorded as the final means by which they reached the site.

So which is a more accurate measure of advertising performance? Well its difficult to say really.  Display advertisers will normally put the argument across for first click tracking as they play the brand card a lot more and place their strength in building awareness of offers and products.  Some of them even cookie a user on ad impression so would even more stringently argue this case.

Search advertisers on the other hand are more likely to lean towards the argument for last click tracking as users will often use search results to find brand and products they already know they want to buy.  Regardless of where they found out about them a user is more likely to visit Google and search on a brand or product name to complete their purchase.

I’m more likely to not worry about it and assess online as a whole rather than worrying about each channel in isolation.  More and more recently I have noticed the effect the channels have on each another and I am now suggesting the holistic approach to online is the best way to go.  Conversion attribution is a difficult skill and requires a highly sophisticated piece of tracking software.  By pulling one channel you could quite easily find that although when analysed in isolation it didn’t appear to work, it was having a positive affect on another channel and you see a drop off across the board by its removal.

My advice? Although all channels need to be measured, pay careful consideration to the impact they may be having on one and other.  Look at online as a whole to measure performance before making any decisions as the halo effect exists and if you pull one brick from the tower, it could all come tumbling down!

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