Tim Kilroy's Blog

From your friendly friends at Wordstream

This summarizes everything that is emotionally wrong with the US (and I guess, global) financial system:

“I’ve worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions.”

Read more: http://swampland.time.com/2012/01/11/warren-buffett-to-mitch-mcconnell-put-up-or-shut-up/#ixzz1jBtsn3H2

Bernard Moon, CEO of Vidquick, has written up his 2012 predictions over at Venture Beat. Among them, he opines that Amazon will have a tough 2012 because of looming sales taxes. His thinking is that with the addition of sales tax, Amazon’s pricing advantages will be diminished, therefore the overall business will suffer.

So, are sales taxes on internet purchases coming? You betcha. Does this surprise anyone? I hope not. Does this eventuality mean that it levels the playing field a little between online and off-line retailers? Sure.

But the advantages of no sales tax has not been what drives online sales. If that were the case, the catalogers would still be flying high! Most catalogers have not ever collected sales tax outside their own states. Taxes aren’t the tipping point. The real tipping point is low prices and amazing selection. That drives the interest and likely the first conversion. But it is the seamless service that drives repeat customers. It isn’t the lack of sales tax.

Further, every time that you visit Amazon, your home page is personalized. It changes to suit you. The last time I walked into a Best Buy, the store didn’t change to reflect my interests. Amazon tries to show me what I want to buy. The big box stores want to show me what they want to sell. This is a dramatic difference.

In a recent NYTimes article, Jeff Bezos talked about the discipline and advantages of thinking 7 years out. Amazon has been modeling and dealing with the threat of sales taxes since its inception. They aren’t surprised here. And, I suspect taht they have sophisticated pricing models ready to launch to alter all of their prices to maximize sell through. In Amazon’s core businesses, they aren’t terribly concerned about margins(they live off of their ad business and marketplace referral fees), so they can still undercut the big box stores in every respect.

Check out the incredible analysis of Amazon’s business put together by FaberNovel, it will illuminate many of Amazon’s advantages. Honestly, sales tax won’t even be a bump in the road for Amazon.

The holidays are here, and as the kids bask in the joys of vacation, many businesses are deep into the final throes of business planning. Scrambling to figure out sales projections, headcount and more can make the end of the year an exercise in anxiety about what is happening next year. Here is my look at what is happening in 2012:

1. It Is Going to Hurt to Be an Offline Retailer: e-Commerce has been here for over a decade, and it has just started to capture some significant share. Reports show e-commerce somewhere between 7-12% of total retail sales. But guess what? Retail generally counts autos…and e-commerce is just a freckle there. Taking out auto, e-comrce has a much higher percentage of the stuff that you already buy. From computers to televisions to shoes to furniture, e-commerce is having a significant effect on the way that offline retail operates. Amazon killed Borders (besides what they didn’t do to themselves), and e-commerce is on its way to killing other soft offline retailers (read about Sears closing stores). And with more and more online retailers maximizing logistic efficiencies to minimize delivery time (like Amazon Prime and ShopRunner), the “disadvantage” of online shopping begins to disappear. 2012 will be even harder on offline retailers because their primary advantage of proximity and “service” will begin to fall away at an accelerated rate. Look for a fair number of broad-based retailers to report store closings and depressed earning, even as the economy recovers a touch. There are just cost disadvantages to owning and stocking a retail store that will become harder to overcome. I suspect that retailers who aren’t deeply web-integrated (like Ross and Marshalls) will have a tougher 2012.
2. Social Finds It’s Place: Social media has been all  the marketing rage. We’ve moved to a time where Facebook is larger than all but the biggest countries. Twitter is expanding like crazy. And then there’s…uhhhh. Well, there have got to be other social networks that work. (Linked In is great for professional stuff, but I wouldn’t call it social.) Social has found its place. It is on Facebook. And Facebook is an amazing platform for developers and companies to build small interactive experiences that scale massively. Social interaction is NOT an indication of desire to buy, or an indication that customers will evangelize on your behalf. Social media is about awareness, about reminding your customers that you love them and are interested in their experiences. It is not a direct response channel, it is not a primaryacquisition channel and it is not an affiliate program. But rather, it is all of those. It is about the impressions that you leave. It is about the way that your treat customers. It is about the way that you share with your customers. Think of it like your logo, or your retail store layout, or the way your business card looks. None of these things really drive sales alone. But they go towards creating an image, an emotion, an experience. And that drives sales. Social will be realized as a crucial element of branding and customer service.
3. Mobile and Web Become 1: The days of the web as a distinct development process apart from mobile are numbered. Mobile and web are becoming the same experience. HTML 5  development can make sites device agnostic. A well-programmed site will present itself well to users of smartphones and tablets. There may be some tweaking that is done to maximize your presentation on particular devices, but the choice to build or not build a mobile experience will be moot. Your website will be your mobile experience. Tablet commerce is here. Mobile commerce is here. Your team must master the essential elements of these presentations because that is e-commerce. As much as your team spends tweaking your website, they will be tweaking it even more to insure that the user experience is fluid on laptop, smartphone and tablet. This starts out with a device agnostic approach to user experience and development processes. If you have not started this process, or are considering hiring mobile experts to make a mobile site, start deeper, closer to the source. Website, mobile, tablet is a new trinity. Not to be worshiped, mind you, but they should be considered, developed and maintained as one.
4. SEO Becomes More (and Less) Important: SEO is the marketing channel that makes marketers crazy. It is a source of delicious, free traffic. But at the same time, the marketer’s presentation and position is at the whim of a secret algorithm. But SEO remains a crucial part of the online marketer’s arsenal. And as search continues to grow, and consumer expectations around search grow (I just Googled and discovered which Arlington gas stations were open on Christmas Day through search. It was a stupid and arcane query, but Google found that answer for me in their first result…nice) having a powerful presentation in search has never been more important. Hence the reason why SEO is more important. There is more traffic to be won than ever. SEO is less important because the search engines get better and better and results become more and more personalized. There are fewer “tricks” that work in SEO. SEO has become an exercise in creating clear messages on well-coded pages. SEO has become about creating quality content that answers questions. SEO is less about the bits and the bytes and more about creating information that is useful. Seems like a good outcome to me.
5. Paid Search and Organic Search Become Close Cousins: Adam Audette of RKG has a terrific primer of SEO/SEM integration. And Google will not ever mix the algorithms…that would require them to backtrack on 15 years of discussion around this topic. They will not cross that divide. But in order to help create a good user experience (and to generate more revenue) the techniques that drive clicks will become closer. For instance, the metric Quality Score of a paid search landing page will expand beyond that of obvious performance, and involve elements of SEO scoring (as evidenced, minimally, by the inclusion of landing page meta-data in the paid search experience). Think of it this way…although the algorithms of paid search and natural search are different, the results are converging. Google’s definition of a good organic listing and a high quality paid search landing page are becoming more similar. And as this happens, we see that Google is hiding lots of keyword data from organic searches and not paid listings. Further, organic search results take up less and less room on the search result page. The end result? Google essentially directs the marketer to engage well and deeply into paid search to get at consumer behavior data, and with the disappearance of a fair portion of Google organic search data, Google is telling folks to keep their meddling hands off of their organic search results. So, the enterprising marketer will take a “whole search” approach, using data from paid and organic search to make the best possible search presentation. My response: It’s about time.
6. The Video Battleground Becomes Less Crowded: It is going to boil down to You Tube, Netflix, HBO Go, Amazon and cable streaming to mobile. Hulu falls apart. Vimeo becomes less and less relevant, and live streaming of sports takes off.
7. Music Consolidation Happens: I have satellite radio, Spotify, Pandora, iTunes, and I could have rdio, rhapsody and a billion others… It will take a while, but satellite dies a painful death. iTunes works its way towards a subscription model. Spotify and its pals are just so compelling. Why buy music regularly if I can just rent it forever? There is no economic model on the resale of owned music files, so rental works. We all stream all the time. Including terrestrial radio. Apps like “IHeartradio” mean that there is no reason for local radio to exist. Terrestrial radio diminishes increasingly over the next 12 months. Not a good time time to own Clear Channel or any other radio network…
8. E-Mail Declines as a Communication Tool: Asynchronous communication has always been inadequate. While there is some magic in a thoughtful correspondence, my inbox is besieged with marketing and spam. There are marvelously few conversations that are meaningful. This high noise to signal ration (it has got to be 50:1 noise to signal) means that I pay less attention to e-mail. My wife and I text more often than e-mail, and FB messages are more likely to catch me than an e-mail. The era of e-mail as a primary point of engagement are dwindling. And commercial e-mails will begin to dramatically underperform unless they become personalized and intimate. If they are more noise, then they will stop being useful. Listen up e-mailers…change or die. And you will die faster than the direct mailers do/did. You will fail faster…
9. Catalogers Are Under Seige: From postal rate increases, skyrocketing paper costs, postal service cuts, and aggressive personalization from both on and offline retailers, the cataloger faces very difficult times. We keep the recycle bin near the mailbox…and we are not alone. The infinite shelf of online and the immediacy of the in-store experience make the catalog old news. Catalogers need to leverage the tablet, and the web, as fast as possible. If you aren’t, your key-responding demographics will be getting older and older, and less and less consumption-oriented.
10. The Occupy Movement Makes a Comeback: Occupy become Moveon.org. Sadly, Occupy will devolve into NPR-like fundraisers, until an agenda evolves. Then they become the Tea Party of 2012 (political activists that revolve around a common set of goals, not conservatives…).
11. Obama Wins Re-election in a Landslide: Not wishful thinking on my part, but even as the GOP seems to coalesce around Romney as of this writing, they don’t believe that he really is one of them. Resources turn from the White House to Congress and the partisan stalemate becomes even worse. GOP will win in 2016, falsely benefiting from a torrid economic rebound starting in late 2014. Washington gridlock will be worse than ever previously experienced, and I will be in a rage.
12. 2012 Will Be Amazing: Not so crazy, this prediction, but between solar paint and the discovery of Goldilocks planets, 2012 will herald amazing new scientific discoveries that will excite everyone. We have been in a bit of “been there done that” with regard to things that we discover. But 2012 will be a year that we discover something truly incredible? Biggs Hoson? Evidence of bacterial life on other planets? A cure for a major disease? Something is coming. I can just feel it.

Happy New Year!

Courtesy of My Friends at SEOBook – How has Google Diminished the Power of an Organic Link – and in almost every respect, I like it.

SEO Infographic by SEO Book

Honestly, it doesn’t seem like it is all that different than Amazon’s music service, and it seemingly pales in comparison to Spotify, and doesn’t offer the ease of iTunes. Who needs it?

It is clear that Google is at its very best when it has an original vision and is unencumbered by what others do or existing market offerings. Big data, speed and access are seemingly the entry requirements, but Google is at its best when it reimagines, not iterates (Twitter – Buzz, Google+ – Facebook).

If Google was hell bent on getting into the music space, they should have done it leveraging their algorithmic prowess. Imagine what kind of analysis and discovery opportunity could have occurred if Google focused on music DNA like Pandora? (Music and math are so closely related, I can only imagine what Google’s massive computing power could do…)

This is totally a me too product. It is sad that a company of incredible technology visionaries has diminished itself to stumbling into markets 8 years too late. I would rather they focus on the autonomous cars or space ladders where they have a unique vision rather than chase the tail lights of a bus that has already left the station.

Color me diasppointed.

OK…so the Kindle Fire arrived yesterday. In a nutshell:

• Feels great in your hand (heavier than you’d imagine, but it feels solid)
• Screen is delightful, very good colors
• Interface is pretty intuitive…my iPad trained kids pretty much at home. The carousel is likely to get wearisome if you switch apps, book s and movies a lot
• The performance is pretty good…there are some stutters and lags, but nothing objectionable.
• My kids prefer the backlit screen to the e-Ink for reading…they all said it was easier. (I am agnostic here…but they are heavy readers.)
• Gaming – While perhaps not in the same upper echelon with and iPhone/iPod Touch/iPad, Angry Birds, Plants vs Zombies and Fruit Ninja performed beautifully and we lauded by the new owners as “awesome”.
• Pandora and Netflix performed perfectly.
• We are Amazon Prime members, so the free streaming stuff is great, and works just beautifully.
• Over the years, we’ve bought a handful of music from Amazon, but they didn’t find it in their cloud…not sure if it is Amazon’s issue or mine, or if past purchases count toward their current music streaming services.

Long story short…for $199, the Kindle Fire is a fantastic deal. Great feel, good performance, nice screen…hard to beat….

A few weeks ago, I wrote about why search matters (and the answer is pancakes). Last year, I wrote about all of the things wrong with search.

But there is something that has been troubling me about search, and it has taken some long thinking and reflection to get to it. Search is good for information that is missing, like what was Babe Ruth’s WAR? Google and Bing can tell you who Babe Ruth was, along with what a WAR is (wins above replacement value— a geeky baseball stat). Those are kind of needle in the haystack factual tidbits that can satisfy your query. And I guess that last word, query, is the salient issue.

Search is about queries. Questions, with answers. To a search engine’s thinking, there is an algorithmic way to determine an authoritative response. And yeah, for fact-based stuff there probably is. But what about subjective arenas? The search engines respond to the notion of subjectivity through personalization filters. And these create their own issues with insulation and skewed viewpoints. (A filter essentially tries to guess what you would want to click on based on other stuff you’ve clicked on…). Eventually, personalization becomes a self-reinforcing algorithm which makes your world smaller. I wrote about filters earlier, and  I strongly recommend Eli Pariser’s book, The Filter Bubble: What the Internet Is Hiding from You (affilate link). He gives a clear view of how filters can make your world smaller.

But my real issue with search is that of discovery. Search is good for finding what you are missing, not what you are looking for…

Recently, I was looking for a gift. I didn’t exactly know what I was looking for. I had concepts.: Artisinal. Elegant. Minimal. Maybe Metal. Perhaps finely woodworked. Special.

Using that specific query, Google pointed me to a content farm (wasn’t Panda and the Revenge of Panda supposed to kill that stuff?). A fully unsatisfactory experience. And mind you, I am not blaming Google for the algorithmic disappointment. What they try to do is incredibly difficult and has amazing complexity. It is orders of magnitude more difficult than any technology project ever embarked upon. But the real disconnect is that I cannot express what I am looking for in any way that is truly structured. I have attributes. I have concepts. But I have no language to express what I am looking for because I don’t know what it is. I am looking for an intrinsic value, an essence. It is as if I am looking for a product that embodies the BMW motorcycle in Zen and the Art of Motorcycle Maintenance: An Inquiry into Values (affiliate link, again). I am looking for quality.

Is it possible for Google (or Bing) to infer and understand such a nebulous and subjective an essence as quality? Because the algorithm is machine driven, machine measured and objectively informed by click data, an algorithm cannot assess what it is serving up as a result, but rather only a fact that based on the parameters embodied within the algorithm, that a particular page is our best mathematical guess that it matches your query. But the engine has no idea of the intrinsic value of the result. Search is still in its nascent stages. It is a baby, and it has much to learn. Perhaps it will require us getting to the point where Google’s algorithm is in some state of sentience, perhaps it will evolve with deeper human influence on the algorithm, or perhaps a better way to get nuanced feedback into the algorithm.

Search today is good for things that are lost or need to be found. It doesn’t help you discover. Who wants to make a discovery engine?

Someday, I will write about marketing and search again, but I need to vent about my rage at Joe Paterno. I assume that you have all heard, or read about the child abuse scandal at Penn State. In a nutshell, a member of the University’s coaching staff is a pedophile. He committed terrible acts against children. He did so at Penn State. He was caught in the act. He kept his job. He wasn’t arrested. He wasn’t obviously disciplined in any way. He did, however, engage in sexual acts with a child. And Joe Paterno knew.

Jerry Sandusky is a pedophile. Regardless if he is convicted, charged, whatever, the man is a pedophile. And while I believe we are all ultimately responsible for our actions, Jerry Sandusky’s compulsion is likely beyond his control, driven by a combination of emotional dysfunction and lack of self-awareness. He is culpable. He is scum. He doesn’t deserve any sympathy.

But, I have less rage at the pedophile than I do the people that enabled the behavior. Jerry Sandusky is a sick man that was out of control. But those that were in control, who knew or suspected his actions, had a moral obligation to stop him. And if they were not in a position to stop him, it is their obligation to find those that do and make them take action.

Joe Paterno is a legend. And, arguably, there is no man more loved and revered in Pennsylvania than he. And when informed that Jerry Sandusky was seen with a boy in the Penn State showers, Joe Paterno did the minimally acceptable thing. He told his boss. So, yeah, Joe, you fulfilled your legal obligation. But you didn’t do the right thing. You are JOE PATERNO. You’ve talked to presidents. I bet the governor takes your call. Why couldn’t you call the police? Why didn’t you fgo to the University’s president and demand that Sandusky be fired? Why didn’t you use the freakin’ bully pulpit that you built through 46 years of coaching and educational excellence to do not just the legal thing, but the morally right thing?

Sure, everyone will remember you as an amazing coach and likely a great guy. But for me, you will always be the guy that allowed a pedophile to continue ruining the lives of children. It is not only a stain on your storied career, but your very soul. You are Joe Paterno, the enabler. Shame on you.

UPDATE: The Penn State Board of Trustees did the right thing and fired Joe.

On the heels of my recent health event that reminded me firmly that there is an end to this life, I want to touch on a cause that is really important to me. There are thousands and thousand of organizations that are focused on research and finding cures for cancer, and that is what we all want, of course. But a really amazing family  has pointed their charitable efforts on something a little nearer term – helping provide comfort for those folks that are undergoing cancer treatment today.

My friend, Wendy Clayton, was an amazing person. She was energetic and delightful, smart and curious. And her smile was just stunning. With a grin that was effervescent and dimples that were just bound to spread joy, Wendy kept her smile throughout her nearly decade-long battle with cancer. Wendy lost her battle just over 11 months ago. But her family, Aaron, her husband, and her two incredible daughters, Ellie and Michal, have used their grief to create a charity, Comforters for Cancer. As Wendy waged her battle against the disease that would ultimately take her life, she endured grueling treatments, including many rounds of chemotherapy. During these treatments, she would get cold, as many patients do. And in her final days, bringing a comforter from home to use in the hospital made her feel more connected, more comfortable, more human.

The Clayton family has set up a charity to provide blankets for cancer patients at Dana Farber. These are beautiful blankets subsidized by Garnet Hill. These blankets do something wonderful – they create a homey environment for those that are in a struggle for their lives. They provide comfort in an institutional setting, they provide a touch of personal dignity in a medical environment that can be demoralizing. They provide comfort to those that need it most.

I am involved with Comforters for Cancer, and its mission is near and dear to me, but the charity is 100% volunteer-driven and donations are the only way to help the Clayton family do the work that they set out to do. Please take just a moment and donate now. Any amount helps.

Thanks.