On the Power of the New Advertorials for Consumer Gadgets

It pays to include someone with successful experience building effective advertisements in the form of news articles in a product marketing team. Early stage technology businesses tend to think about marketing communications in terms of online promotional content and paid click advertising. But modern marketing communications also includes a new vehicle, “advertorials”, which look a lot like news articles, but are actually advertisements. There are few higher value promotional opportunities than a well respected reporter publishing an article, with some depth, on your product. So if you can find someone who knows how to place these articles as ads, at reasonable cost, then you should seriously consider hiring the person for a role in your product marketing promotional effort.

An example of this type of creative promotional content popped up on August 18, 2013 in the online edition of the Sunday New York Times. Frank O’Connell put together what looks to be an article on Green Mountain Coffee’s Kuerig Vue V700, Single-Serve Coffee Maker. But this editorial content is actually a very effective example of an advertorial. Points worth noting about this advertorial include:

  1. The advertorial presents an opportunity for the New York Times (and possibly Green Mountain Coffee) to market click ads to businesses with complementary product offers for the Kuerig single cup coffee system. These ads are dynamically served at the top center of the page on which the content is published
  2. The New York Times does not label the content as an advertisement, but the source of the content is listed as Kuerig, Inc.
  3. The content is entirely comprised of high quality photos of the device, and its working parts, which will likely attract a lot of attention from its target audience
  4. The features depicted in the photo provide an opportunity for the editorial content to be used to present a detailed set of benefits to the consumer. For example, “Each pack contains ground coffee and a filter. It is also filled with nitrogen to maintain freshness”

Omitted altogether are any mention whatsoever of the comparative enormous price difference between this type of coffee brewing and more mundane alternatives.

We wonder if the spread of this type of “content for hire” detracts from the usefulness of a public relations campaign. In the past, public relations teams would focus efforts on convincing writers to create similar content, albeit without the overtly paid promotional color of this piece. Does the popularity of this type of content signal the end of those days?

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved


On the Destructive Potential of Online Editorial Content

In August, 2013, a large majority of the U.S. population maintains a connection to the internet. Most of these internet connections are in an “always on” state. So online editorial content can now be be used by product marketers to influence human activity, at least here in the U.S., in a big way. Unfortunately, when online editorial content is applied to topics specific to financial investments, and, further, to stock trading, the results can be very destructive.

Stocks with a high volatility index are usually watched very closely by investors. Most of the time these investors are vigilantly monitoring news feeds to digest important developments as soon after they occur as possible. In theory, the first investors to get word of these changes will gain an advantage to buy, sell, or hedge positions.

But today everyone gets the same information nearly simultaneously over the internet. Twitter is particularly useful as an information distribution medium. Over Wednesday, Thursday and Friday of the week of August 12th, 2013 we watched the tweets for one equity, “MNKD”, Mannkind Corp. The stock moved up and down over 45% over merely these 3 trading days. The correlation between tweets and changes in MNKD trading price were very tight.

Who’s monitoring the accuracy of these tweets, many of which include links to blogs with longer posts devoted to topics specific to stocks like “MNKD”? Unfortunately the answer is “nobody.” When we read a number of them, and blog posts on related topics, we noted lots of inaccuracies and distortions. So the destructive power of this type of editorial content should not be underestimated.

We don’t see this condition changing anytime soon. We hope the writers producing the content are making a fair share of the profits some of the investors purport to be making for themselves. In the meantime, investors of all types will continue to maintain a rapt attention to these postings, which can only lead to more demand for this type of editorial content.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved


Security Vulnerabilities Threaten to Seriously Hamper Promise of Cloud Computing Systems

We’ve written frequently in this blog on what we take to be clear cracks in the secure foundation of online computing solutions. A lot of our position is based on our understanding of the data communications supporting the internet — Ethernet. While low data loss, universal availability, and low costs for consumers are all very compelling, the lack of authentication, and error checking, within the out of the box features of Ethernet data communications, in our opinion, made any choice of this network as the platform on which hyper text mark up language (HTML) web pages would be published a poor one.

But we were wrong. Consumers appeared to be indifferent to the security problems endemic to online computing over public networks. We attributed consumer indifference to service providers insulating consumers from these threat by absorbing the related losses, while continuing to offer service.

James Staten, an analyst working for Forrester Research, now thinks the Prism Program of the U.S. N.S.A. will finally slow down the spread, worldwide, of online computing services. In a blog post published on August 14, 2013, titled The Cost Of Prism Will Be Larger Than ITIF Projects, Mr. Staten estimates Prism will end up costing the world wide cloud computing business $180 billion by 2016, “or a 25% hit to overall IT service provider revenues in the same timeframe.” (quoted from Mr. Staten’s blog post, a link to which has been provided in this post).

The problem Mr. Staten aptly notes applies not only to so-called public cloud services, where multiple consumers share the same resources, but also to private cloud services supporting a single consumer. Prism has been equipped with a capability to monitor any/all communication over the internet (an Ethernet network). No claims of secure, proprietary data communications capabilities for any cloud service will hold up to scrutiny any longer.

We think a contributing factor to the chilling effect on cloud computing popularity will prove to be the set of increasingly brazen successful hacks of websites we are all reading about in mid August 2013. When the website of the U.S. Dept of Energy is, once again, compromised by malicious hackers, certainly business customers, if not retail consumers, will be likely to start rethinking cloud computing plans.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved


Smart Machines May Prove to be a Bonanza for Risk Underwriters and Automation Security ISVs

Automobile manufacturers have publicly expressed serious determination to quickly add more features to permit drivers to engage in personal computing activities like reading email, chatting with colleagues, and more. But all of this may not, after all, be a good thing. Nick Bilton of the New York Times published a post to the Bits blog, Disruptions: As New Targets for Hackers, Your Car and Your House. This post recounts some demonstrations presented at this year’s Defcon held in Las Vegas: “Imagine driving on the freeway at 60 miles per hour and your car suddenly screeches to a halt, causing a pileup that injures dozens of people. Now imagine you had absolutely nothing to do with the accident because your car was taken over by hackers.” (quoted from Mr. Bilton’s article as posted to the New York Times’ website, a link to which has been provided above”.

Clearly there is substantial cause for concern if Ethernet data communications capabilities are added to cars without a set of security controls capable of successfully defending them from malicious cyber attack. Cars are moving vehicles, usually weighing in excess of a ton, or more. It does not take much of an imagination to envision the destruction a rogue automobile can wreak in any one of a voluminous set of ways, if controlled by individuals with nefarious intentions. We think automobile manufacturers must completely verif the effectiveness of security controls purported to be capable of protecting smart cars from hackers, and, further, certify them prior to adding these features to cars.

The positive side to all of this, if there is one, is a substantial market for ISVs with security systems for precisely this type of application. While we are not in touch with any of these businesses, we think some excellent candidates can likely be found in the aerospace industry.

There is also an excellent market emerging for insurance underwriters willing to provide products for the cyber terror market. The kind of frightening event Nick Biltin recounts in his post can be a bonanza for risk insurers willing to service these markets.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved


Finding Substantial Value in Collaborative Product Development with Market Peers

Last month we published a post on the risk early stage tech businesses take when they develop products for other products built by third parties. The example we cited in our post was a familiar one, Microsoft and Intel’s collaboration over the last 25 years. The key points about this collaboration? Intel produces the next generation of is X86 firmware and Microsoft debuts a new version of Windows. The danger implicit to this strategy, as we wrote, amounts to predicating the success of a product on the success of the other product. The historical example of why this type of inter business collaboration can work to the detriment of one, or both of the partners, can be found in the recent phenomenon (over the last 5 years) where tech consumers have switched from the devices built on Intel’s X86 firmware to devices built on ARM Holdings firmware. Examples of devices built on the latter architecture include most, if not all, of the products we refer to as small, smart mobile devices.

The kind of collaboration we noted, as it turns out, is actually nothing new. In an article titled Capturing the Value of Synchronized Innovation, Jason P. Davis describes precisely the type of business to business collaboration we worked with in our post, albeit at a much higher level. Mr. Davis describes a truly ubiquitous activity cutting across businesses at all stages of maturity. Examples of this type of collaboration, as Davis demonstrates, can be found all the way from whole sets of companies coordinating product release dates around the target debut of a new smartphone, all the way up to a new jetliner from Boeing or Airbus.

We came to two conclusions as a result of reviewing Jason P. Davis’ article:

  1. His “Synchronicity” is much easier to identify around hardware devices than it is around software applications. Based on our experience, we can say Davis’ “synchronicity” usually occurs around the debut of operating systems, or major platform releases (for example, Enterprise Content Management or “ECM”, or Enterprise Document Management, “EDM”)
  2. Despite the popularity of this activity, we nevertheless hold to our position. Early stage ISVs will do very well to carefully consider whether or not it makes snese to build products based on “synchronicity” before leaping into an effort

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved


Popularity of Cloud Services Points to Increased Risk Responsibility for the Consumer

As cloud services continue to attract an increasing portion of the market for enterprise software, we think it’s highly likely the consumers of these services will end up assuming more of the risk management responsibility for their own accounts, and for all of the priority data associated with them.

As cloud customers begin to grapple with how best to mitigate the risk of shifting daily computing procedures for whole organizations from on premises systems, we think it is safe to assume a heightened attention to online security concerns will finally begin to unfold. Certainly heightened attention would be a good thing, but the question will still loom as to how to truly mitigate risks and protect corporate proprietary information from malicious attempts to subvert it.

On August 8, 2013, the CIO blog of the Online Wall Street Journal published a post by Rachel King, titled <a href=”http://blogs.wsj.com/cio/2013/08/08/cutting-cios-out-of-cyber-insurance-decisions-is-a-bad-idea/?mod=wsj_ciohome_cioreport” rel=”nofollow” title=”click this link to visit the CIO blog of the Online Wall Street Journal to read about a post by Rachel King, ‘Cutting CIOs Out of Cyber Insurance Decisions is a ‘Bad Idea'”>Cutting CIOs Out of Cyber Insurance Decisions is a ‘Bad Idea'</a>.

The point of Rachel King’s post is to sound a warning. Enterprise business will do better to allow CIOs to participate in the decision-making about how best to leverage risk underwriting by a third party insurer to protect corporate assets as they are exposed via online services.

While we agree with her point, we think it’s worth taking a moment and simply reflecting on how different the enterprise computing environment of 2013 has become in comparison to conditions a mere 5 years back. In 2008 it was highly unlikely most enterprise businesses would plan on shouldering their own risk management for online services. Back then, cloud service providers shouldered almost all of this responsibility, at least to the best of our knowledge.

Of course, a big question is what impact, if any, shifting risk responsibilities at a business to business cloud computing level will have on business to consumer services like online banking, etc. How will retail customers deal with a need to shoulder their own online risk management? We can’t think of a plausible answer to this one.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved


Motorola’s Moto X Smoke Screen

Google’s Motorola Mobility unit debuted the Moto X in mid July, 2013. A lot has been written about this smartphone. The phone is the first telephony product pro9duced by this Google subsidiary since its acquisition. But we think the marketing communications and public relations efforts for the product fall far short of where they should be to produce serious public interest in this product.

The collateral we’ve reviewed is too targeted to an audience of highly technical people. We’ve read articles on Wired about the phone, watched snips from a couple of videos on the phone on Youtube, but have to confess we still don’t get any idea of the killer reason why we (or most anyone else) really needs this phone.

Maybe the gap we find ourselves in is the result of a miss on the part of the campaign’s creative team. We conclude the target are highly technical people (colloquially referred to as “geeks”), but this conclusion has arisen more from subtle features (for example, the mythic “Joel” in the photo on the Motorola Mobility web page for the product has tattoos running up his arm) than the kind of overt ambience created by any of the memorable creative campaigns we’ve sampled in the recent past (for example, Samsung’s Galaxy ads, or some of the original Apple iPhone ads).

When we put this creative miss together with our increasingly skeptical position on the extent of further upside to the high end smartphone market, we come up with a notion this product will likely fail.

On another note, we think the quality of the collateral is quite consistent with the types of efforts Motorola Mobility used to make. Since the market for consumer mobile phones began in earnest, back in the mid 1980s, the division has produced a lot of great technology, but not a lot of effective promotion. Looks to us like Google’s allowing the status quo to continue.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved


IBM Starts to Show Effects of Cloud Adoption by Enterprise Customers

Perhaps no ISV can lay more claim to owning the market for on premises computing solutions for enterprise businesses and comparably sized organizations in the public and not-for-profit sectors than IBM®.

But a research report on IBM’s second quarter, 2013 financial results, published by Credit Suisse reveals some telltale signs of the negative effects of a multi year effort of this same customer base to implement cloud, and private cloud solutions in lieu of IBM’s own standard offers.

The Credit Suisse analyst team of Talal Khan, CFA, Matthew Cabral, Vlad Rom, Ray Bao and Andrew Ruben characterized the quarterly results as “weaker than expected.” They further attested their ” . . .confidence in the quality of the roadmap [a program designed to assure IBM attains its EPS targets for the fiscal year] is lower.”

On August 6, 2013, Julie Bort wrote on the Business Insider website, in an article titled Credit Suisse Downgrades IBM, Thinks Shares Will Fall To $175 “Some IBM employees have told Business Insider that this promise is causing IBM to take drastic measures to control or reduce costs and that some employees call the plan ‘Roadkill 2015.'”

So it is fair to say internal morale at the company is at a low point. We think a lot of this has to do with the results of a steady evolution of IBMs typical customer, meaning the CIO of an enterprise business, from a stalwart for on premises data centers to an ambassador for a long list of cloud services tasked with provisioning same to large communities of BYOD users.

Further, recent public relations collateral points to an effort on IBM’s part to resurrect the PowerPC chip platform (now renamed simply “Power”) into a real competitor to Intel’s X86 architecture. We find this one real hard to believe given Apple’s decision to migrate off of the PowerPC architecture over to Intel, as well as IBM’s long standing aversion for commodity computing hardware markets.

Perhaps Microsoft is not the only enterprise ISV smarting from the Cloud wars.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved


Following Up on Anonymous Website Visits as a Method of Product Promotion

We make daily use of data on anonymous website visits in our work for clients. We use a service from VisualVisitor. Our service plan is available to any business at a cost of under $40.00 per month, which should be a manageable expense. Where we are engaged in discussions with prospects listed on these reports, we can use this data from VisualVisitor reports to predict likely decisions, and even build a wider picture of the stakeholders who will need to be included in our dialogue if we are to help prospects arrive at a decision to purchase one of our client’s products.

But from a broader perspective, following up on anonymous website visits can be a valuable method of promoting products and even building a brand. By definition this data can be used to identify the business domains from which online visitors access a website. But the data does not identify the actual person (or computer program) visiting the site. So any successful effort to engage with a contact from the business will likely present an opportunity to inform a new contact about a product or service.

Engagement opportunities emerging from anonymous website visitor tracking can be especially useful. The intrusive nature of an unsolicited telephone call on a subject foreign to a specific contact can, and should, be managed with a reference to the anonymous website visit prompting the effort. Most contacts will be more accepting of a call when they are informed someone else from the business evidently visited the site. A reference to products and services will likely be more memorable if a prospect is informed about them in the context of a discussion about a colleague’s visit to a website.

Early stage technology businesses should be keen to leverage any engagement opportunity to inform market participants about products and services. Direct contact with people is certainly the best method (albeit a comparatively expensive one) of educating markets about what your business has to offer. The cost of collecting information on anonymous website visits is low enough to justify some sort of outbound calling effort based on this information.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved