Is Bravo an Ad Network on FourSquare?

I just began to understand the value of FourSquare's strategy to partner with content providers. I thought I understood partners like Zagat recommending better restaurants or to dos, but I recently checked in to Merc bar and was told by Bravo to go to Paul Smith. By choosing to "follow" them to get a badge, I essentially opted in to them pushing me content.

If you think about this closely, this is essentially a proactive magazine, pushing me content when it's most easily actionable i.e. when I'm nearby. Of course the content itself is a form of advertising. Go here, buy this.

So another way to think about this is me opting-in to local ad networks, based on brand affinity (ex. Bravo, Zagat, WSJ, etc.).

I opted-in because I wanted a badge and I wanted to experiment, but over the long term this strategy can only be successful if I care about the badge that much (limited once you get the badge), if the content provider negotiates better deals (couponing as advertising) or the info is insightful and wanted (content as advertising).

As banner ads continue to die as we get better at ignoring them (just like tv commercials) advertising will continue to be integrated into service and content (just like TV). FourSquare's content strategy is an interesting development that allows them to plug in content providers or in other words ad networks. They need to be smart about controlling the marketplace, but it's a brilliant idea.

Unique Problems With Uniques

Uniques are what make the world go around, at least the Internet world. Advertisers care about their reach, the numbers of unique users they get in front of on a campaign. 1 million is the magic number and all of a sudden getting advertisers becomes much, much easier.

Uniques are so important that marketers like me spend money generating cheap traffic to inflate uniques even at a loss. It's a sizable percentage of traffic if you do it right, enough to inflate the numbers without killing your click through rates and bounce rate (the rate people leave the website after the first page view).

It's all about uniques. How are you compared to your competition? Check the uniques on compete.com. How's the board think you are doing? Just show progress on uniques. But as someone who looks at web metrics and models businesses, unique growth and future prospects of most business have much more to do with member retention (churn, repeat usage), viral coefficients and cost of customer acquisition and value. With positive key performance indicators (KPI) along these lines and you know you have a business that has long term value.

Sometimes that means you make prioritization decisions in development to things that drive uniques even at the cost of longer term value. The reality is that for $500, I can drive 50,000 visitors. $5,000 then 500,000. Not much money to get you halfway to that 1 million unique magic number.

But a new report and analysis say that the whole industry could be overestimating our unique count by a factor of 2 or 3. That's just crazy. If that were accurate it could send shockwaves throughout the industry. Or not.

If the number changes, does it change the performance of existing campaigns? We can still measure ROI. It won't change tomorrow. It just means we are twice as effective at marketing to half the number of people we thought. Or will the new numbers scare off holistic marketers who compare the reach of traditional campaigns? If this plays out, it could be a very interesting year.

Fight for Control of Your Internet Experience

There is an interesting thing going on that I predicted a while back. There's a fight for who gets to present your Internet to you and who gets the ad impression. You probably have seen glimpses of it.

For example, you probably have noticed that sometimes when you click on Facebook there is a little toolbar at the top that says that you were directed to the page from FB from a certain person. They were playing around with it a couple months back. They were invading sites outside of the Facebook domain. Just a couple pixels at the top, but it is invasion, which is why they probably removed it recently. Imagine a world where the person who links to you controls your user experience.

Then there are some of the URL redirection services like tinyURL, bit.ly or ad.ly. On some of them, when they redirect they had an ad on the top. So even though you are now on the NY Times, there is an ad at the top from another service. They have been moving away from it lately, but there is experimentation.

I mentioned one example of intentionally poor design in Internet Explorer on my recent post about Microsoft. They intentionally take advantage of every typo and mis-step as an ad opportunity.

But as I found out this morning, there are a lot more players in the Internet chain that can take advantage of tricks like this. Today my ISP, Time Warner, wanted a piece of the typo pie too. My Firefox browser only corrects "yahoo" to "www.yahoo.com" if it first gets a 404 error from the initial request. But the ISP can do that work and just return a valid result off the initial request. So Time Warner wants a piece. Where else could they insert themselves? Couldn't they alter the HTML and create a frame just like Facebook?

There are many creative ways to make lots of incremental revenue based on the linking structure and inefficiencies and errors of the Internet. I've got a couple creative ideas, but the point is that every link has value. Value to the place you are linking to and value to the property you are linking from.

Here's another example. You may notice that every link on Facebook or on Google is not really a pure link to the website. If there is a link to the "www.NYTimes.com" when you click it, it actually activates a Javascript or other service on Google or Facebook to record the click, before sending you off to where you are going. Why is this important? For Google, recording what people are clicking is key to optimizing their algorithms. It started with optimizing ad clicks, then the same approach is being used for organic search. For Facebook, they similarly want to know what to show and whether that Fan page of yours is spewing spam, or links that people care about it. They prioritize good links in your feed to make your feed better.

The point is that there is a wealth of info from augmenting the simple version of the Internet, controlling data and controlling the display experience. The question, of course is what's next? Where are there unrealized revenue opportunities in the existing structure? Could there be a way to get pennies, millions of times a day? There are...