Displays: Sharp Announces Micro LCD...Thanks?

from Gizmodo by Mark Wilson

Hitachi may have the thinnest production LCD but it's a lard butt compared to Sharp's 2.2-inch mobile LCD that's a mere .68mm thick. For an LCD the stats aren't even horrible. You get a 2000:1 contrast ratio, 8ms response time and 176-degree viewing angle in this 240x320 display. Intended for use in one-seg terrestrial broadcast, we're just a bit confused. Why even challenge OLED in the mobile market? (Other than price, maybe?)

OLED has lightning response times (reports of < 0.01ms), viewing angles with nearly no color fallout and contrast ratios as high as the eye can see (Sony's new 11-incher claims 1000000:1). I mean, LCD, it's not that we don't appreciate the gesture. And if Sharp could make a .68mm-thin 60" TV, we'd be all over you. But...uhh...we sorta already agreed to go to the prom with OLED...and his dad's renting a limo and everything. [avwatch]

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BzzAgent is a great way to test products and services and get immediate feedback

IPG Links Up With BzzAgent
October 23, 2007
By Brian Morrissey

Bant Breen

NEW YORK Interpublic Group said it has entered a partnership with BzzAgent for its agencies to use that firm's word-of-mouth services and conduct research in the area.

Several IPG shops, including Hill, Holliday, Connors, Cosmopulos, DraftFCB and Universal McCann, already use BzzAgent for various clients. The Boston-based company has more than 300,000 "agents" who are given product samples, asked for feedback and encouraged to talk about them with their friends.

Marketers are reawakening to the power of word of mouth in product decisions. Several studies have shown that recommendations from others rank higher than traditional ad messages in swaying consumer preferences. The rise of social media has led to the development of several buzz-monitoring services for brands to determine what is being said about them.

The next step, according to Bant Breen, president of IPG's Futures Marketing Group, is turning insights into action.

"There are a variety of ways to get involved in the conversation," he said. "BzzAgent has one of the interesting ways. I don't know if we can say one company has cracked the code."

Yet at the same time, many consumers are wary of commercial interests distorting recommendations. A Burson-Marsteller survey released this week found nearly 30 percent of influential consumers felt commercial activity on opinion sites is a big problem.

The IPG-BzzAgent partnership is similar to agreements struck with TiVo and Joost. The Futures Marketing Group has also made a small investment in Facebook and Spot Runner, and houses search marketing shop Reprise Media, which IPG bought in April. IPG has not invested in BzzAgent. The agreement will give IPG preferential pricing, the companies said, and will be managed through IPG's Emerging Media Lab.

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I want my iStockphoto fix

from Duct Tape Marketing by John Jantsch

I visited with Lesa King, editor of the Graphic Reporter, author the Lynda.com training series - Graphic Secrets for Business Professionals and chief evangelist for iStockphoto for a recent edition of the Duct Tape Marketing podcast.

Lesa gave the Duct Tape Marketing Coach network a guided tour of iStockphoto at my annual gathering of coaches. For those of you who may not know about iStockphoto, you simply must. If you use images, illustrations and video clips in your marketing, this is a gold mine. Great, royalty free stock photos, that are easy to find and inexpensive.

Some of my favorite tips and tricks Lesa shared had to do with ways to find great photos.
• Do a search and look deeper into the results to find great photos that might not be used by as many folks
• Search by color to find photos that possess a great deal of a color that better compliments your designs
• Search by CopySpace to find photos that are composed in a way that lets you add type to certain areas
• Filter search for shots with people, for orientation and price.

iStockphoto is also a big supporter of Duct Tape Marketing and is offering my readers 10 free credits (good for 5-10 stock photos)

Just send Lesa an email at lesa@iStockphoto.com and ask her for the special Duct Tape 10 code.

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How Profitable is Google's Core Biz? 75%+ Profit Margin

from Silicon Alley Insider by Henry Blodget

Google booked free cash flow of $1.1 billion in Q3, more than any other media company we know of.  The company also improved its operating margin (on net revenue) to 50%.  In other words, it's a fantastically profitable $16 billion global business that is still growing at better than 50% per year.

But guess what?  "Fantastically profitable" doesn't even begin to describe the earnings power of Google's core business.  For example, this is not a business that has mere 50% profit margins--a level that just about every other company on earth would kill for.  Rather, this is a business that probably has better than 75%+ operating margins--a level that only one of Google's fellow behemoths, Microsoft, could ever hope to match.

(And if Google has anything to say about it, Microsoft won't be enjoying its monopoly operating system and office suite profit margins for long).

How do we know Google's core search and AdSense businesses have better than 75%+ profit margins?  Because, for the last four quarters, Google's rate of hiring (people) has significantly outpaced revenue growth.  Salespeople and engineers take 6 months to a year to get fully productive, so most of the 6,000 employees Google has added in the past year aren't yet fully utilized...
Given the number of products Google has rolled out, moreover, only a fraction of these folks (except sales) are likely dedicated to search and AdSense.  Google is not yet generating meaningful revenue from any products other than search/AdSense, so this means that these folks are dead weight on the P&L.  But Google still has a profit margin of 50%.

How fast has Hiring grown relative to revenue?  Here are the y/y quarterly progressions for the past three quarters:  (For details, please see this online spreadsheet).

NET REVENUE:        66%, 63%, 62%
EMPLOYEES:          80%, 74%, 70%

That's a lot of unproductive weight that has been easily absorbed.

Why is this important?  First because it gives Google an amazing amount of cash flow to reinvest in other businesses.  Of the $2+ billion a year that Google is currently spending on engineering, for example, probably only half of it is dedicated to supporting the current core businesses (Google says 70%, but this seems unlikely).

Second, because all those salespeople the company has hired over the past year are eventually going to get fully productive, and when they do, revenue should grow far faster than headcount.  This means that,

Third, Google's latent earnings power is enormous.  At some point, the company will finally scale back hiring (from Schmidt's comments on the call, it sounds like this has just happened).  As it does, expense growth will slow, while revenue productivity from existing employees will grow.  Unless the company rapidly ramps spending on other non-revenue generating projects, therefore, Google's profit margin could leap upwards in the coming year.

By the way, we've just seen this movie before--with Google's CAPEX spending and free cash flow.  Two years ago, when it realized how big its opportunity was, Google ramped CAPEX spending far faster than revenue.  For six quarters, this held its Free Cash Flow down, at a level of about $2 billion a year.  In the last two quarters, however, Google's CAPEX has stabilized, while the company's revenue has skyrocked.  This combination has caused Free Cash Flow to go through the roof:

NET REVENUE:        73%, 66%, 63%, 62%
CAPEX:                   49%, 73%, -18%, 12%
FREE CASH FLOW: 32%, 30%, 363%, 111%

What's that called?  Earnings power.

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Click Fraud Up Modestly in Q3, Including Google

from Silicon Alley Insider by Silicon Alley Insider

Click auditing firm Click Forensics released its Q3 report on industry-wide click fraud.  The news continues to be bleak for third-party content networks, including those operated by Google and Yahoo.  (Note that some of Google's Q3 upside came from its content network, along with our minor concern about this).  Among the findings:

-Industry average click fraud rate was 16.2% for Q3, up from 13.8% from 2006 and from 15.8% for Q2.

-Average click fraud rate of PPC advertisements on search engine content networks, including Google AdSense and the Yahoo Publisher Network, was 28.1%.  That's up from 25.6 percent for Q2, 21.9% for Q1, 19.2% for Q4.

-Over 60 percent of traffic from parked domains and made-for-ad sites was click fraud.  Click Forensics estimates that more than 70% of the sites in the Google and Yahoo networks fall into one of these two categories.  However, we estimate that these sites account for only about 25% of the paid clicks in both networks.

-In Q3, the greatest percentage of click fraud originating from countries outside North America came from France (4.2 percent) China (4.1 percent) and Germany (3.7 percent).

Click Forensics CEO Tom Cuthbert has been having a public pissing match with Google click-fraud czar Shuman Ghosemajumder.  Ghosemajumder says CF and other third-party auditors have no idea what they're talking about.  Cuthbert says Ghosemajumder knows exactly what they're talking about--and won't come clean about it.  After listening to both sides (and others), here's our take:

• It's getting worse.
• It is more prevalent and more of a concern on third-party ad networks (distributed search/Adsense for content) than on Google's and Yahoo's own sponsored search.
• It's especially bad news for content providers who make a living using AdSense, et al.
• It is something advertisers should pay attention to and spend money analyzing
• If nothing else, the use of a good third-party auditing firm provides comfort that money isn't being thrown away.
• Google et al could/should consider providing more detail about, at the very least, the number of total clicks vs. the number of clicks the advertiser was charged for.  It should also give advertisers more ability to select which sites they advertise on.
  

Industry Click Fraud Rate Hits 16.2 Percent in Third Quarter 2007
Click Fraud Rate for Content Networks Reaches 28.1 Percent
 

AUSTIN, Texas - Oct. 18, 2007 - Click Forensics[TM], Inc. today released industry pay-per-click (PPC) fraud figures for the third quarter 2007 from the search advertising industry's leading independent click fraud reporting service - the Click Fraud Index[TM] (www.ClickFraudIndex.com).

Now in its second year, the Click Fraud Index monitors and reports on data gathered from the Click Fraud Network[TM], which more than 4,000 online advertisers and agencies have joined. The Click Fraud Network provides statistically significant industry PPC data collected from online advertising campaigns for both large and small companies across all the leading search engines. Key findings from data reported for Q3 2007 includ
 

-The overall industry average click fraud rate was 16.2 percent for Q3 2007. This is an increase from 13.8 percent for the same quarter in 2006 and from 15.8 percent for Q2 2007.

-The average click fraud rate of PPC advertisements appearing on search engine content networks, including Google AdSense and the Yahoo Publisher Network, was 28.1 percent in Q3 2007. That's up from 25.6 percent for Q2 2007, 21.9 percent for Q1 2007 and 19.2 percent for Q4 of 2006.

-Over 60 percent of traffic from parked domains and made for ad sites was click fraud

-In Q3 2007, the greatest percentage of click fraud originating from countries outside North America came from France (4.2 percent) China (4.1 percent) and Germany (3.7 percent).

 

Publishers and advertisers have recently felt the impact click fraud is having in the content networks. Increasingly, publishers are seeing a performance drop in the content network traffic quality. Advertisers are seeing their conversion rates drop significantly on content networks because of bad traffic coming from parked domains and other low quality sources.

"Click fraud activity continues to grow especially on made for ad sites, parked domains and on the content networks," said Tom Cuthbert, president and CEO of Click Forensics. "Advertisers, publishers and search engines need to take notice because content networks are becoming the fastest growing source of click fraud. Ensuring their quality is essential for the pay per click advertising market to continue its growth."
 

The Click Fraud Index publishes data collected from the Click Fraud Network (www.ClickFraudNetwork.com), the industry's first independent third-party click fraud detection service dedicated to helping companies more accurately monitor their online advertising campaigns for pay-per-click fraud. Click fraud data is tracked and published on a quarterly basis for specific search providers, industries and trends. The service is unique in that it monitors online campaigns for click fraud by correlating data collected from search provider campaigns and the advertisers' own web sites - providing the industry's most accurate view of click fraud to date.

 

About Click Forensics, Inc.

Click Forensics[TM] is the leading provider of click fraud management solutions that help online advertisers, agencies and search providers identify and eliminate pay-per-click fraud. The company also runs the Click Fraud Network[TM], the industry's top independent click fraud monitoring and reporting service with over 4,000 members. Click Forensics is headquartered in Austin , TX and is privately held with funding from Austin Ventures and Shasta Ventures. More information on Click Forensics and its offerings is available at www.ClickForensics.com.

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