Category Archives: woblomo

advertising, economics, woblomo

Bem+Wom happens: The ALL-ETT wallet anecdote



pocket
mousetrap

Ernie told me about it. Sid and I told Lance who blogged it. Bill Gasarch read it, bought it, loved it, and blogged it again.

And so it goes for ALL-ETT, the ultimate wallet. Bem+Wom: BEtter Mousetrap + Word Of Mouth. It actually works.

It works for Google too:

[Google’s] growth has come not through TV ad campaigns, but through word of mouth from one satisfied user to another

And now, a viral restaurant.

But, beyond anecdote, continuing from the previous post, is this sort of thing worth $15 billion?

Companies with Bem benefit hugely from Wom and will happily pay for it.

And social networks are nothing if not mouths exchanging words, so it’s natural to think of some paid version of Bem+Wom as their killer app. Facebook Beacon is an innovative attempt despite the overblown backlash.

Paying mouths for words is affiliate marketing, a respectable if not Google-sized business. But turning friends (or celebrities) into salespeople induces a threshold of skepticism, as it should. Paid mouths’ faces must be awfully trustworthy, their words especially persuasive to be believed. Is it even “word of mouth” anymore?

Can Bem+Wom be monetized without mucking it up?

advertising, challenges, economics, new media, woblomo, yahoo

The social advertising puzzle

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There’s no doubt that social ties have tremendous value: people find love and work largely through the people they know and the people the people they know know.

And there’s no doubt that digital representations of social ties add value. Facebook does improve people’s lives.1

The puzzle, and one of the key challenges facing companies like Facebook, Google, and Yahoo!., is how social media can make money. So far the evidence is most users won’t pay directly, which leaves ideas like virtual goods, community marketplaces, app stores, and, of course, advertising. Unfortunately, although we know great ways to advertise to people searching, and decent ways to advertise to people viewing content, it’s less clear how to advertise to people communicating.

P&G’s Ted McConnell puts it bluntly:

What in heaven’s name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend?

Riffing off of this quote, Wired asks the $15 billion question: Is social advertising an oxymoron?:

So, what if social media and advertising just don’t mix?

SocialMedia.com, a social advertising startup, begs to differ (hat tip to Cong Yu), reacting to the same provocative McConnell quote. Their answer:

Advertisers only pay when users volunteer to say something about the brand to their friends.

Indeed, this sort of paid version of Bem+Wom (“BEtter Mousetrap + Word Of Mouth”) — more on this in the next post — is one of the first things people think of when pondering how to monetize a social network. But can it work well and if so, how?

Three disjoint friends like Rooster Sauce. Who knew?

1For example, I never would have guessed that three completely disjoint friends of mine are all fans of Sriracha Rooster Sauce. Who knew?
advertising, economics, finance, prediction markets, woblomo

Wall Street's version of a combinatorial market

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I was poking around TD AMERITRADE and came across this description of conditional orders (login required, or look here), or sequences of orders that are synchronized in various ways:

What is a conditional order and how do I place one?

Conditional orders let you combine two or three individual orders that will, if filled, either cancel or trigger additional orders. Conditional orders are available for both stocks and single-leg option orders (in option-approved accounts).

The following types of conditional orders are available:

  • OCA (one cancels another) – submit two orders simultaneously; if one order is filled, the other is canceled.
  • OTA (one triggers another) – submit an order and if that order is filled, submit another order.
  • OTT (one triggers two) – submit an order and if that order is filled, submit two additional orders.
  • OT/OCA (one triggers an OCA order) – submit an order; if that order is filled, submit two orders simultaneously; if one of these orders is filled, cancel the other.
  • OT/OTA (one triggers an OTA order) – submit an order; if that order is filled, submit another order. If that order is filled, submit a third order.

At first glance these resemble combinatorial bids that allow traders to buy several things at once, but they’re not. They’re more like bidding agent programs that describe exactly what to do when under various conditions: more complex, but not fundamentally different, than limit orders and stop-loss orders. They can be executed without any cooperation from the exchange.

This brings to light a key distinction: some forms of expressiveness can be achieved by layering increasingly complicated bidding agents on top of an existing exchange. Other types of expressiveness, for example true combinatorial bids, require new optimization routines put directly into the exchange.

The distinction arises in advertising as well. In a sponsored search auction, advertisers can bid lower during the day when people tend to browse and higher in the evening when people tend to buy, and they can even write a program to do it for them automatically. However an advertiser cannot execute a “guaranteed delivery” contract in sponsored search without changing the underlying auction mechanism.

Why should we care about the latter type of expressiveness that requires “smarter” exchange mechanisms? One word: efficiency. Economic efficiency, that is. With greater expressiveness, resources can be shuffled to align more precisely with who wants them the most. Advertising opportunities (a particular user’s attention on a particular page) can go to advertisers who value them most. Financial transactions that otherwise might go unmet can be consummated. Insurance buyers can get better coverage. And gamblers can have more fun.

publication, technology, woblomo, writing

What do you want to be when you grow up?

The first semi-serious answer I remember giving to the title question was “either a writer or a magician” (circa third grade, more about age 8-9).

Given this quote:

Any sufficiently advanced technology is indistinguishable from magic. –Arthur C. Clarke

and the fact that likely the most tangible record of my career are my publications, one might say that I did indeed become both a writer and a magician.