Value Part Deux

I was thinking some more about the post I wrote yesterday on Apple value and it intersected with another observation I made about something completely unrelated.

For the last couple of days I have had a guy working on our house, specifically he is a metal fabricator and I hired him to make copper pieces for 3 bow front windows (like a bay window but not as pronounced). This guy is a craftsman, he comes out and takes a few measurements and then goes to work cutting flat sheets of copper, bending them, putting seams on them, fitting, crimping, and soldering everything together. I actually watched him for a few minutes last Friday and was amazed at the skill required to do this.

He quoted me $1,200 to do this work, which seemed reasonable but when he finished I was compelled to ask him if he was making any money on the project. He said “well it took a few hours longer than I expected but $1,200 is what I quoted you so that what it is” and I admit I was a little thunderstruck because I am astounded at the work he did and I feel guilty about not paying enough.

So why have I been thinking of this? Well it’s because far too often we, consumers, feel like we are paying more for less and on that rare occasion when we actually do get less for more we, or at least I, instinctively feel as though I am getting something beyond what I deserve for what I am paying. Is it not that we should be conditioned to expect value for our spent dollar? I think that’s what people in business should strive to deliver.

At NewsGator we measure our widget value on many dimensions, but one measure that I believe is important is the effective CPM of the widgets we are serving under hosted contract basis. This pricing doesn’t take into account a variable price per unit delivered, it is a measure of the price we are charging per thousand widget impressions we are contracted to deliver. Over the last year this eCPM has declined, indicating that we are increasing the unit volume of widget capacity we contract for while reducing the price, and at the same time increasing the functionality we are provided through the hosted management application.

Some people would suggest “well you have to reduce the price because the market is getting more competitive” but in actuality the market is getting less competitive as it stabilizes and two camps emerge, those that offer purely ad-based pricing models and those that are offering a hosted subscription service and ad-based pricing. We’ve also increased our client base and contracted capacity, recently closing our best quarter ever, which indicates that our pricing is not an obstacle to closing business.

I have a different explanation for the movement in this metric and it’s simply that we believe the best way to win in a market is to deliver a product that works as promised and constantly optimize it for price and performance to ensure that the client believes they are getting the best value possible from the relationship.

We have been fortunate enough to experience near 100% client renewals through 2008, and I am not hesitant about disclosing that only 1 customer in the last year has not renewed their contract with us. That makes me really happy and as we enter an uncertain macro economic environment I believe this customer satisfaction level is a real asset for us.

BTW, I’m having Dave the copper guy come back next month to replace the gutters on our roof. I didn’t ask him for a price, just told him to make sure he’s also coming out okay.

Political conventions showcase newspapers’ multimedia tricks

The DNC and RNC were exciting events for us, newspapers really grabbed on to the notion of feed aggregation and immediacy as a service for their readers. We aggregated over 200 political blogs, wire service content and Qik streaming video direct from the conventions.

The Post and Pioneer Press might have been helped by widget technology supplied by NewsGator Technologies to lead users back to their respective sites.

Every MediaNews Group property ran a dedicated widget during the conventions and if readers clicked on a particular link, it would take them to The Post or Pioneer Press Web site.

“We actually saw quite a bit of traffic from that widget every day from Media-News Group papers,” said Clonts.

[From Political conventions showcase newspapers' multimedia tricks]

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FeedBurner May Not Be Hearing Your Pings

This is actually a bigger deal than simply an inconvenience. Many media publishers are now relying on RSS to not only take inbound content but also publish it out and when latency is introduced in the plumbing it creates larger problems for publishers.

RSS is an infrastructure and when providers of the services fail to provide optimal performance it really harms everyone else in the business by introducing a confidence issue.

NewsGator serves content to publishers not only through widgets but also through our platform services that are either instantiated as applications or APIs that are used to drive custom apps. We go to great expense and effort to ensure that our clients are experiencing a level of performance that not only meets but exceeds their expectations and SLAs in our contracts keep us honest on this point. All that work becomes moot though when the actual publisher of the feed fails, as was the case here, because while we republish search as feeds and make additional content available as original feeds, the bulk of the content we deliver is being published not by us.

If FeedBurner decides to take its sweet time in delivering the news, that’s bad for bloggers. Unfortunately, that’s what’s happening right now. We’ve been seeing delays of up to 20 minutes between posting to our site and our posts appearing in our FeedBurner feeds. That’s a pretty serious problem and we’re not alone in experiencing it.

[From FeedBurner May Not Be Hearing Your Pings - ReadWriteWeb]

NetNewsWire iPhone Application is Very Popular

Today we released some statistics for adoption and usage of our NetNewsWire for iPhone application. To recap, this is the downloadable and installable version of NNW for the iPhone, not the web-based version we launched last year when the original iPhone was released.

# There are over 200,000 users of NetNewsWire for iPhone
# Over 115,000 iPhone users have signed up in the past 30 days

# The average NetNewsWire iPhone user subscribes to 26 feeds

# One NetNewsWire/iPhone user has over 2,800 feeds — wow!

# More than 130 million items have been marked read by NNW/iPhone users

[From NetNewsWire iPhone Application is Very Popular: NewsGator Widget Blog]

Here are the 2 stats which mean most to me, new users in last 30 days and items marked read. The new users in the last 30 days is meaningful because it indicates strong word-of-mouth traffic and all while the App Store on iTunes has become very crowded. People like this app and are telling other people about it.

The items read (along with another stat that we track showing how many registered users are accessing it daily) is really important because it underscores a very important point, people are installing the app AND actually using it on a repeat basis. I can think of no more important metric to track as an indictor of the value people are getting from this application.

I could read into the average number of feeds subscribed to, but I’m a little hesitant to because this could have many meanings. The 26 feeds per iPhone user could mean that we are reaching into the “mainstream mass market” and not just the RSS geek and early adopter market, or it could suggest that users are actually being very specific about the feeds they are reading while mobile and taking advantage of our “Locations” capability to organize their experience.

These are great numbers that we are certainly proud to talk about, but it also fits with a general attitude we have about being transparent about our business.

Widgets at the DNC

Even though I am officially on vacation this week, I did want to blog about some cool stuff we are doing at the DNC in NewsGator’s hometown this week. The Big Tent stuff is getting some great coverage, and our widget is aggregating feeds from a whole bunch of blogs that are covering the event. Check it out, install it, follow the activities.

You might be interested to know that the Big Tent Widget consolidates feeds from nearly 200 bloggers, new media journalists and nonprofit leaders credentialed for the Big Tent, the 9,000 square-foot new media center hosted by Progress Now, Daily Kos, the Alliance for Sustainable Colorado, and is sponsored by Digg, Google, NewsGator, and others.

[From Two Innovative, New Widgets Are Launched Widgets Provide Dynamic Blog/Qik Content from DNC: NewsGator Widget Blog]

Secondly, I am really excited to hook up with the team at Qik to offer a video widget featuring their user generated mobile streaming video right from the convention floor and surrounding activities. The two offerings can be summed up as a true “pros vs. joes” with professionally published blogger content, as well as the semi-pro stuff as well, and the user generated video that is aggregated from anyone using Qik who is in Denver.

What’s next? Just aggregating content is useful but I’d like to see us layer in our related content tools to offer a more semantic take on the content offered up with other non-linked content that is similar in subject and possibly even with sentiment analysis thrown in. Maybe dynamic persistent search on any key entity extracted from a post. We’re just scratching the surface with what is capable with these widgets and the back end platform services. Stay tuned.

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Generation Shift

Yeah this is NewsGator widget business but near the end of the article there is a great statement from Rob Covey that underscores the opportunity that companies face as they take in a new generation of young workers.

Covey added that some of the inspiration for the new application came from National Geographic newsroom employees under the age of 25, who offered suggestions of new products that might appeal to younger online users. “The more that you listen to them and think through and understand how they see the world, you begin to want to shape your products to see if their ideas will catch fire,” he said.

[From National Geographic redefines widget strategy with co-branding effort]

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NewsGator/mSpoke Collaborative Related Content

NewsGator and mSpoke have been quietly working together for several months on a range of projects. In addition to having some kick ass technology, we really like the mSpoke team and are excited that fruits from our working projects are beginning to be realized. Sean Ammirati wrote a thoughtful post on our Widgets Blog about the conceptual approach to delivering related content, which as the name suggests is a mechanism that publishers can use to surface not only highly relevant third party sourced material against any source piece of content, but related content that is filtered using our attention score.

Over the last several months, NewsGator has partnered with mSpoke on several initiatives. Our first jointly-developed product “the Related Content widget” is now coming to market. While many companies can recommend related articles, we provide a superior experience by combining NewsGator’s attention data and reporting with mSpoke’s content analysis capabilities. In this post, I’ll give a quick overview of how the Related Content Widget works and some of the highlights of our unique approach.

[From mSpoke's Sean Ammirati on Our Collaborative Related Content Widget: NewsGator Widget Blog]

NewsGator iPhone App

nnwOnHomeScreen.PNG NetNewsWire is now available on the iPhone. I don’t normally write about every product that we release but this one is really really cool because it takes full advantage of the touch interface to vastly enhance the user experience of a mobile feed reader.

Apple made a couple of really strange design choices, like the headset jack requiring an extension, and the lack of copy/paste, but adoption of the touch gestures really makes this device in my opinion. Ironically, touch gestures may be a primary reason why we don’t have copy/paste…

Brent put a lot of work into this app and it reflects not only his intuitive sense of what is right in a Mac app, or in this case, a Mac app on an iPhone, but also what works for users. I’ve always admired that NetNewsWire has a deep bench of features available to the user, but the user experience doesn’t overwhelm you with features.

Here are some screenshots of the app in action. Go download it from the App Store today.

nnwMainScreen.PNG nnwNewsItemsList.PNG nnwNewsItem.PNG

NewsGator and AFP Olympics Widgets, Guaranteed CPM

NewsGator and AFP have teamed up to offer a collection of widgets featuring their premium content covering the upcoming Beijing Olympics. These widgets are squarely targeted at media sites and popular blogs, and as part of this program we are guaranteeing a CPM to any approved site that runs the widgets on their site. Here’s a link to the press release we put out this am.

Why is this important? For us it’s significant because it shifts our business model from being purely a hosted service provider to a syndication network. Widgets have many use cases, a vehicle for brands to reach consumers is just one while what we predominately do, enable content owners and distributors to syndicate their content is another. This Olympics feature program is a perfect adaptation of several trends in widgets, including premium content syndication, display ad monetization, and mid-tier distribution site targeting.

We are making it drop dead easy for a premium service like AFP to expand their reach beyond their current clients and top tier media sites to the long tail. Blogs and small/medium traffic websites offer a terrific syndication opportunity for AFP but the cost of reaching these sites with their traditional mechanisms is punitive. What NewsGator’s widget services offers AFP is the ability to quickly and easily reach this long tail with a self service model and a monetization scheme that correlates to the channel.

Speaking of monetization, our ad network partner is Advertising.com, a premium online ad network by any definition. This is one reason why we have a qualification program around this, because advertisers really care about where their ads are showing up so we have to have a process to ensure that these widgets are being placed on sites that are topic and audience appropriate. What this means is that we have some qualification guidelines to be met in order to participate in the guaranteed revenue part of the program, there is nothing here that restricts anyone or any site from picking up these widgets and running them.

If your site is part of the revenue side of the program we are offering a co-branding opportunity. We have designed the creative for these widgets with a replacement logo placeholder that we can use to co-brand these widgets with your branding. This is appropriate for the kind of sites we envision running them and it’s a great way for small/mid tier sites to extend their own brands.

Lastly, I want to emphasize a couple of final thoughts. First and foremost, we are not changing our business at all, we are expanding it on top of the hosted widget service we have been successfully selling to publishers. Widgets are becoming a more complex business as they grow up, we intend to lead that by innovating the service offerings we are making available and bringing traditional media companies with us as their partner. AFP is a world class news agency who deserve a lot of credit for trying something new as a means of reaching new audience and satisfying the demands of online new media.

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Privacy Getting in the Way

“You have zero privacy anyway, get over it.”
– Scott McNealy, Jan. 1999

Once again we have “privacy concerns” being used to squash efforts to make advertising more effective by targeting it at people likely to want it.

Cable and phone companies say their growth increasingly depends on being able to deliver targeted advertising to their Internet and TV customers, but criticism from privacy advocates is threatening that strategy.

[From Free Preview - WSJ.com]

I admit to having mixed feelings about this. On one hand I simply don’t trust cable companies but on the other I have to wonder what the worst that could come of this is. The risk for privacy advocates is that they are the boy who cried wolf… what damages have actually been incurred because online behavioral data was made available to advertisers. Indeed one of the most successful online advertising networks of all time is Google Adsense and it is predicated on having context to online content that you are viewing or searching.

I’ve written about this many times before, advertising should have some utility and the first step in providing that enabling a better understanding of what I do in order to predict what I want. Online advertising should not be as it is today, which either relies on tricking someone into clicking on it, or as is the case with interstitials, forcing it in front of someone.

What is more troubling about this debate is the effort by some to undermine the rights of businesses offering services by demanding they attach privacy rights where there are none, public online spaces, and at any rate it is well established that it can be voluntarily sacrificed in exchange for some service or product benefit. This is exactly what happens every time you do a search on Google, login to Facebook/Myspace, and watch cable television, as well as a hundred other things we do on a daily basis.

We are currently running a pilot that takes advantage of Myspace’s hypertargeting for distributing widgets. The USA Today Pop Candy widget features content from the very popular column written by Whitney Matheson, featuring celebrity and entertainment news. What we are doing is taking advantage of the profile tags generated by Myspace for every user profile, then “suggesting” the widget based on alignment of those tags to the Pop Candy widget.

Why is this important? Well for USA Today they can drive distribution of their widget, which really just means extend their brand deeper into prospective audiences, in a more efficient manner than slamming an IAB compliant widget through an ad network and hoping people pick it up. For Myspace users they get the promise of more relevant content based on what is inferred by analyzing the content that is already on their pages.

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