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Week's Clue: ROI Rex
Roi is French for King. It's also short for Return On Investment, the principle that ruled last week's Internet World show.
Oracle chairman Larry Ellison was its Sun King (of course). In his keynote, an unabashed sales pitch for the new Oracle 8i database (the i stands for Internet) he claimed Internet economics will let doctors outsource their bookkeeping for the cost of looking at ads from drug and medical equipment companies. "The really big companies on the World Wide Web will be building business-to-business applications," getting tremendous returns on their investment, centralizing complex tasks "in professionally-managed servers" and getting the best from the old mainframe and new client-server environments. (Would Louis XIV wear Armani today? Is there any doubt?)
So it went throughout the show. Matchlogic said its TrueSelect system gives big advertisers "proof of ROI," showing ads only to users whose demographics fit anonymous profiles, mostly compiled from users of the parent Excite network. Andromedia , which does log file analysis, said it bought personalization pioneer LikeMinds from O'Reilly because it was the only way for both firms to prove their ROI to clients. At IBM's press conference Jeff Jaffe, general manager for eNetwork Software and Security, insisted that bringing Web management under the company's Tivoli system is aimed at improving ROI. The nickel or so big advertisers pay for users linked by Centraal's RealNames system represent "qualified prospects," a quick ROI for both linker and linked, according to Centraal.
Technology and business history are now repeating themselves. Web activities can now prove an ROI, and not just for shareholders in Amazon or Yahoo. Businesses must demand it as a recession looms. The technologies of the 1920s, like radio and the movies, became the height of glamour in the depressed decade that followed the stocks' run-ups. The hope at Internet World, where t-shirts flew from booths like candy, is that ROI will make them Kings of the future, no matter what happens in the real economy.
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This week I'll be debuting a new talk called "Clues to Commerce" at John Audette's Cascade Conference, which runs from October 14-16 in Bend, Oregon. If the talk goes over well, we'll do it again sometime.
You can now order "Web Commerce: Building a Digital Business," , by Kate Maddox with yours truly (but with on the cover) through Barnes & Noble. It's on sale at $20.95, (down from a cover price of $29.95, and down from Amazon's price of $27.95) part of the Wiley/Upside series. Let me know what you think of it.
A-Clue.Com has also been picked up by Andover News as its Monday e-commerce column. Thanks to you, A-Clue.Com now goes to about 1,000 (!) Clued-in subscribers each week. Thanks to Multimedia Marketing Group a UnityMail customer, it's also an in-line HTML file (no more messy Web codes). Besides producing A-Clue.Com, I contribute regularly to such publications as Net Marketing , Boardwatch, Datamation and Atlanta Computer Currents . Your magazine can join the list - send me an e-mail and let's start the ball rolling.
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And now back to our show...
TRUSTe made a big splash at Internet World with a campaign to demand privacy statements on commercial Web sites. The campaign will run with free banners from eight major vendors (AOL, Microsoft, Netscape, Yahoo, Lycos, Excite, Infoseek and Snap), and it's designed to forestall any government move toward privacy regulation.
The problem is, there's no standard for privacy being offered here. Even if every site posts a standard there's no protection for consumers. You'd have to read each standard and decide, on the spot, whether to then "transact with that site," in the words of TRUSTe executive director Susan Scott. Oh, and the terms of each privacy standard can change. Oh, and we're really just talking about registration and purchase data here - clickstreams are automatically captured by all sorts of log analysis tools.
Nothing works in technology until you have a standard, and the failure of this group to set one makes it an immediate failure, so far as users are concerned. It's great for merchants, and it works politically. But in the long run, it's bad business.
At Columbia University, "60 Minutes" co-star Lesley Stahl tried for two hours to convince Steve Case and other industry heavy-hitters that this Internet thing is dangerous, and that people like her 21 year-old daughter are ill-served by the fact their access lacks gatekeepers (like her), who filter-out dangerous information. (Like sex with the President, Ms. Stahl?) The session didn't just prove her Internet cluelessness - it also proved even the rich-and-famous like nothing so much as the sound of their own voices, especially when they think they're giving wisdom to tomorrow's leaders.
After the crowd adjourned to the J-School's main gallery for heavy-duty schmoozing, Professor Steven Ross honored me with a tour of the facility. (He said he considers me an "entrepreneurial journalist" and a model for the future, which pleases me more than sitting on that stage would have.) The place is jammed with computer labs. The computers have access to Lexis-Nexis and Dow Jones as well as the whole Internet for research. The school is working on networking technology because gigabit-Ethernet can't stream video around the building fast enough. A fourth-floor room on the 8-floor building is getting a raised floor and servers because, at those speeds, "the speed of light counts."
What is all this technology doing? Long-form digital radio and TV stories, as well as text stories that are perfect for use on Web sites, he said. (If they can do it long, they can always cut it down. If they just do short, how can they do long?) Columbia's journalism program is only for graduate students, many of whom get law or business degrees at the same time. The official New Media lab has a collection of offices above it, where Ross will be able to lean over the railing and see the future take shape.
I graduated from Northwestern's Medill School of Journalism in 1978, and they've just started spending the money needed to compete with the effort Ross now directs. I have no doubt he'll turn out people who can use the Internet for great journalism as effectively as Stahl and others have used TV. And excellent journalism will always find its market. The schmoozers and speakers who pontificated at Columbia last week have nothing to worry about on that score.
I picked up a key Clue while doing a story for this week's Advertising Age recently, one I considered often while prowling the aisles at Internet World.
If you're the head of marketing for a Fortune 500 company, you have big, big trouble. Web stores have succeeded and scaled to the point where they have to be integrated with your corporate computing environment to make sense. The data collected by your Web server must become usable by your call center and direct mailers, and vice versa, if you're to get value. Decisions that will determine the success or failure of your marketing effort are suddenly out of your hands. Marketing must get input, and buy-in, from your computer geeks. And those computer geeks are overwhelmed by the Y2K problem, which ActivMedia says will be the focus of all corporate computer spending next year.
Personalization products like NetPerceptions Grouplens , the Brightware Server and Broadvision One-to-One are paying their way, and scaling to meet the needs, just as the computer people become too-distracted by Y2K to deal with them. They've announced "native" support for industrial-strength databases just as those companies take the double-whammy of Y2K and the "Asian contagion."
As I learned while doing a story for next month's "Silicon Prairie" section of the Chicago Tribune , it will be easy for software companies to put the breaks on growth in the next few months. An increasing percentage of software writers are "contractors" who can be let-go very quickly, without severance pay. The good news is they'll be more high-quality Web pages and Web software, with service prices declining as the recession deepens. There will be some incredible bargains among Web companies when the skies start to clear, but expect a long, dark night before the dawn.
Clued-in is Time Inc. , which finally figured out that if you don't know what you're doing, find someone who does and pay them what they're worth. They'll take a cut of what People gets from AOL , they'll let CNN run SI's site , and they'll give clued-in "Netly News" head Josh Quittner a clear shot at proving he can wring an online profit. A Clue is not a win, but you don't get a win without a Clue.
Clueless (unfortunately) is Lesley Stahl of "60 Minutes," although she did admit the point while leading a panel of industry heavyweights at a Columbia Graduate School of Journalism seminar last week. This is a close call - admitting you don't have a Clue may be a great Clue in itself.