The report also noted that a new brand had entered the top 100: Facebook, which debuted at the 35th spot with a brand value of $19.1 billion. Perhaps more significant, the reported year-over-year growth rate of Facebook’s brand value was #1, at 246%. Compare with Apple, up 84%, and Google, down 2%. 

Of course, the significance of these ratings is debatable, but one thing is clear: Google’s competitors have put its brand in the cross-hairs, especially Facebook, which acknowledges hiring PR firm Burson-Marsteller to run a negative PR campaign against Google by persuading top news outlets and bloggers to stir up controversy against Google’s privacy practices by highlighting a Gmail feature called Social Circle, which allows Gmail users to make social connections across other Google products. (USA Today broke the story here, without naming Facebook, and CNet filled in some details.) 

Google, for its part, has hardly been neglecting its brand. In fact, it recently launched what advertising folks would call a “pure brand” campaign – a TV ad that aligns Google with a highly charged emotional cause: the It Gets Better project, a gay social support movement started by Dan Savage. The Google ad, which features the tagline, “the web is what you make of it,” positions Chrome as the platform for social change. Watch it here.

This campaign initiative strikes me as significant on many levels. First, we should acknowledge that it shows a suprising degree of courage on Google’s part to choose such an emotional topic to associate with its brand. Then, it’s interesting that the spotlight is on Chrome rather than Google itself. Other Google products and brands (notably YouTube) play supporting roles, but Chrome is out front. It’s also interesting that Chrome is being symbolically associated with the idealism of the web itself as an open place where people are empowered to start movements – and watch them spread across the globe. It’s a youth-oriented message of liberation, timed to coincide with Google’s announcement of the Chromebook, coming in June. 

The promotion of Chrome as an emotional centerpiece of the Google brand must be considered a risky strategy. Not only does it depart from the idea that Google itself should be the main subject of any “pure branding” efforts, but the status of Chrome (and Chrome OS in particular) within Google is conflicted by Google’s association with Android, as was evident at Google I/O.  Here’s a take on this, via Moconews: “Google’s Mixed Message On The Future of Mobile Computing:” 

> “In short, the entire mobile app versus mobile Web debate is playing out within one company.” 

Good branding is, first and foremost, about creating clarity. This is hard to do when internal strategy is murky. Given the aggressiveness of Google’s competitors, brand clarity is even more essential, and more important to insulate from product issues. 

As industry analysts focus on Google’s technology and business moves, we must remember that Google above all requires trust to succeed, and its brand is its most valuable and vulnerable asset. Both Apple and Facebook are, in their own ways, positioned as alternatives to the open web. The open web itself has branding issues related to privacy controversies, child safety, and so forth. Will Google bet its brand on the web? Should it?

The 2010 BrandBowl, a Twitter-based ad competition produced by the Mullen Ad Agency and Radian6, a social media measurement company, declared Doritos and Google the winning advertisers, and I was not alone in feeling gratified that Google chose to open its coffers to CBS on this occasion, and produced an ad that not only effectively romanced its search product, but also (as David Card pointed out in a tweet) gave new hope to copywriters all over the world.

Last year I wrote about how advertisers like E*Trade had fumbled keywords like shankapotamus, turning over their traffic to folks like me. This year E*Trade got the message and bought milkaholic, and a number of other advertisers followed suit.

But the spot I want to talk about didn’t even make the #brandbowl top 10, despite featuring Beyonce, the Twitter Bird, and a host of other online icons. Unless I miss my mark, most of America had no idea what to make of it. Here it is:

It’s tempting to enumerate the many reasons why this ad is a failure from a creative standpoint – basically, it’s a cacophony of clashing and contradictory metaphors and idioms with no clear brand promise or value proposition – but it’s nonetheless noteworthy in its attempt to go mainstream with the message of Internet on your TV. And therein lies a tale of interest.

We are reminded that, a year ago, Yahoo! made headlines announcing its platform for TV widgets, called Yahoo! Connected TV, at CES2009, to be supported by four major TV manufacturers (Samsung, Sony, LG, and Visio). Yesterday, Yahoo was featured on the Vizio widget bar, but like all of the other manufacturers, Vizio has chosen to brand its own widget platform – VIZIO Internet Apps (VIA) – and give Yahoo tenant status. This is rapidly leading to a condition where each manufacturer has its own proprietary widget platform, which, needless to say, is a path to doom for the whole idea.

Meanwhile, Canoe Ventures (remember them?) and CableLabs announced the completion of a new (yet-to-be-fully-revealed) standard called EBIF IO6 (“IO6” for short) which extends the original EBIF specification to cover widget-like applications that are delivered outside the context of an individual show or channel (“unbound” in industry parlance). That puts the standard on an apparent collision course with the manufacturer’s Internet-connected TV aspirations, and is sure to make for an interesting race to critical mass.

This appears to be a good-news, bad-news story. The bad news is that developers and content providers will not have a single platform to target with applications for some time. The good news, however, is that the race is (back) on, and that the service providers and manufacturers have little choice but to accelerate their efforts if they’re to have any chance at achieving critical mass in the marketplace before their opponents. Nothing like competition to bring out the in us.

The big question, of course, remains: what are these magical TV widgets that are going to engage consumer interest in new sets and services? After all, tweeting on a smartphone during the game didn’t seem so bad. Oops, there’s the whistle, seems like we’re out of time….

The issue came to light  in October when a plague of phony insertion orders compromised major publisher sites including The New York Times, Foxnews.com, The Huffington Post, and Gawker, culminating in Starcom MediaVest Group’s request for a Federal investigation (see MediaPost or AdAge coverage). Fraudulent practices range from malware distribution, which appears to be on the rise (see Click Forensics’ alarming report, declaring that click fraud perpetrated by botnets, a result of malware distribution, has risen sharply) to the grey-hat technique of the month, “invisible advertising.” (Is it fraud? You decide. But it certainly isn’t the kind of thing that’s going to ease any brand-conscious minds.)

On the defensive side, AdSafe Media has set itself up to provide rating and filtering services for advertisers, which could help solve the website half of the problem (MediaPost), while sell-side optimizers such as The Rubicon Project, PubMatic, and AdMeld have been promoting their abilities to help publishers filter the advertising side. (PubMatic, incidentally, held an Ad Revenue conference of its own on October 8th which I attended and found quite good; see recap here.)

The bottom line is, major brands are going to continue to be skittish until these incidents calm down, but the incumbent leaders on the publishing and media agency sides should smell an opportunity here. Their common adversary, comprised of certain ad networks that are widely seen as depressing prices and arbitraging profits out of the system, is arguably also contributing to a general climate of low security by removing personal contact and active scrutiny from the marketplace. But the fact that premium players have also recently been successfully targeted suggests that they need to do more to distinguish themselves as safe – and thus worthy of premium pricing and greater spending allocations.

Publishers and agencies have a chance to take the upper hand on this issue, but they’ll have to move quickly. They need solid solutions of their own before someone like Google takes the reigns.

On August 10, 2009, Publicis Groupe SA announced that it had agreed to acquire Razorfish from Microsoft for about $530 million in cash and stock.

(Razorfish, in case you haven’t been following, is a top interactive agency that Microsoft picked up as part of its acquisition of aQuantive in 2007 that gave it the Atlas family of ad servers and an online ad network. Razorfish is doing some of the best work in the business and they will be an asset to Publicis’ VivaKi “digital holding company” which includes Digitas and Performics (recently acquired from Google) and many other leading agencies, putting Publicis at the front of the pack of ad holding companies (WPP, Omnicom, Interpublic, Havas, and Dentsu) racing to incorporate digital services as a centerpiece of their offerings.)

But also included in the deal, according to Publicis CEO Maurice Lévy, was “a five-year media-buying relationship. In return for buying a certain amount of display and search advertising on Microsoft properties, Publicis will receive better ad rates.” (see WSJ coverage).

What’s wrong with this picture?

Razorfish clients include Ford, Best Buy, McDonald’s, and Microsoft, and Publicis as a whole represents many more “premium” brands. Clearly, Microsoft can’t sell search advertising to these advertisers and still claim that Yahoo! is “exclusively” empowered to sell to this market without some clarification of terms. Microsoft declined requests for such clarification, but a Microsoft spokesperson was quoted in Forbes as saying, “the Yahoo! and Microsoft proposal had not yet been approved as an official partnership, and that he was ‘fairly certain’ that no deal would have been struck with Publicis if it ran counter to the Yahoo! partnership.”

Retaining the ability to sell premium search is, in my view, essential for Yahoo!’s future, for two reasons.

First, as Yahoo! and Google have both repeated frequently, the future of online advertising is “Search-Display Convergence,” which means both that search data will become an increasingly essential component of targeting display ads, and search ads themselves will come to resemble display ads in graphical and interactive richness. “Premium” advertisers, in particular, will want integrated campaigns that combine the targeting of search with the branding capabilities of display (and video, which is increasingly being incorporated into display).

Second, the next wave of growth in online advertising will have to be on the premium side. The new market that Google discovered of SMB advertisers buying keywords on self-service auction sites has shown phenomenal growth, but by now most of the customers who could benefit from this form of marketing are already involved. From here, it will be a technology-driven battle for market share which Microsoft is eager to wage (and Google, with Caffeine, appears equally up for).

On the other hand, among premium advertisers, the shift of media spending from traditional channels to online is still at an early stage, especially among CPG manufacturers which continue to spend many times more on TV and print but are compelled to follow consumers who have shifted their time to online activities far faster than the they’ve shifted their budgets. These buyers are looking for a partner on the media side that can provide massive reach and handle integrated, rich campaigns that are free from the perils they see in social media and user-generated content and sketchy long-tail pages that result from buying traffic blindly on networks. That need defines a potentially lucrative role for Yahoo!.

But not if their partner Microsoft is competing with them for this market by offering bulk discounts to major media buyers. Which is why I think the Microsoft-Yahoo alliance plans just got more complicated.

By the living room I refer, of course, to the future of television, and in particular the idea that video distribution to TVs and mobile devices will evolve to be more like the Internet, an environment which Google has found most hospitable to its brand of products and services. In video, however, Google has admitted that profit from YouTube has proven more elusive than originally thought. (At the last earnings call, however, Google CEO Eric Schmidt did say, “YouTube is now on a trajectory that we’re very pleased with.”)

Still, YouTube has been slow to penetrate the living room, where the real money is. Working with microprocessor designer MIPS Technologies, Google has already positioned Android for set-top deployment (see NYT coverage here), while also raising its involvement with addressable TV advertising with pioneer Visible World (see WSJ coverage here). The cable industry’s Canoe Ventures has played into Google’s hands by suddenly halting its already delayed addressable TV project. Make no mistake: bringing some Google targeting magic to TV ads could still be the company’s next gold mine.

So what does this have to do with On2? Three things:

• First, Google gets some important embedded infrastructure. On2 brings a wealth of online video distributor relationships who have been licensing its technology for some time, including Adobe, whose Flash platform continues to power the majority of online video (although Adobe has recently been migrating Flash from On2 VP6 to H.264), and, perhaps even more significant for TV, Sun Microsystems, whose JavaFX platform is embedded in the infrastructure of most standard advanced television platforms. Although On2 compression faces strong competition from H.264 from the MPEG group, Google can use it to help ensure that video compression remains competitive and non-exclusive. It may chose to open source the technology to achieve these goals, as has been its pattern with other core technologies, but in any case they can use the acquisition to assure the quality and economics of online streaming continue to improve.
• Second, it’s even more important to Google’s living room goals that the public Internet continues to develop into a reliable way to deliver high-def video to TVs in a “net-neutral” way: in other words, without cable, satellite, or IPTV telcos charging for quality of service or otherwise limiting video access to screens. This would allow Google, for example, to deliver “out-of-band” advertising options to broadband-connected set-tops that could be targeted using Google technology. Offering household targeting to broadcasters and advertisers, Google could beat Canoe Ventures to a lucrative exchange for targeted TV ads. But for that to happen, video compression needs to continue to make strides while remaining low cost. Many other things need to happen as well, such as the penetration of broadband TVs and STBs. Needless to say, this is a very disruptive notion for TV, so resistance will be strong. But compression could be an important factor.
• Lastly, as Google moves to balance control of video standards among companies that include Apple, Microsoft, and Adobe, ownership of On2 gives them leverage to ensure its platforms (Android, Chrome browser, Chrome OS, Apps and Gears) include native video capabilities that are independent of control or licensing by any of its potential competitors. (For a deeper look at this landscape, check this blog post from EDN Senior Technical Editor Brian Dipert.)

All in all, I think more “ads by Google” on video screens beyond the PC are coming fast.

I spoke with Anchor Intelligence’s VP of Product Management and Marketing, Richard Sim, and Product Marketing Manager, Carrie Bourguignon, about these issues, and in particular about the curious observation that, of the top 30 countries by click volume, the one with the highest rate of fraud – 48.3% – was Vietnam. While there’s no simple explanation for this, it does highlight the point that click fraud and similar enterprises, like phishing, often take root in emerging economies where access to Internet technology has begun to outpace legitimate economic opportunity.

For those unfamiliar with this dark area of Internet commerce, a typical click fraud scheme works something like this: an operator first must recruit a large bank of computers to automatically click on pay-per-click ads on demand – this can be done either by paying willing accessories, or, more elaborately, by deploying a virus like Conficker to support such activity by remote control on unknowing users’ machines. (Note, Conficker was mentioned by Mr. Sim at Anchor, but there appears to be no evidence that this specific virus was used for this purpose.) The operator then sets up a web site or farm of web sites, often using a “parked domain” to attract some “legitimate” traffic, and proceeds to sell advertising space through a CPC network such as Google AdSense, AdBrite, or any of a large number of similar networks. As the ads start to appear, the operator activates his automated click network and the money starts to flow.

Beyond the obvious caveat emptor for click advertisers, there’s a point to be made about the emerging world of apps on alternative devices such as smartphones and Internet-connected set-top boxes. PCs have been the subject of an ongoing cat-and-mouse game of virus protection for years, but newer Internet-connected devices are green field opportunities for black-hat enterprises, especially those that seek to exploit the exploding demand for accountable advertising on digital devices. As I happily explore the world of Apple TV hacks, for example, I can’t help wonder what that little box might be doing all the time.

So it’s safe to predict a bright future for security solutions in advertising.

So far the Internet has not been kind to incumbent media businesses: it’s taken down directory publishers, music labels, and newspapers. But the story of Internet-driven disruption is largely a tale of unintended consequences. Google certainly didn’t set out to disrupt newspapers, it just happened to be a side-effect of its mission to index all the world’s information. Nor was Craig of Craigslist out to kill the classified ad business. Similarly, I don’t think Cablevision intends for Network DVR to disrupt TV broadcasting. But…

There are four events of the past four weeks that look to be harbingers of end of TV as we know it. These are U.S.-centric developments, but, when it comes to the TV business, America holds disproportionate sway. (In fact, some have argued that America’s domination of television bears a direct connection to its global dominance in other areas; see Erik Barnouw’s highly recommended Tube of Plenty: The Evolution of American Television for a discussion of this and other issues.)

The four events are:

• The Digital Transition, which officially shut off analog broadcasting in the U.S. on June 12, which has left broadcasters scratching their heads about what to do with all their new digital transmission capacity
• The “TV Everywhere” announcement by Time Warner and Comcast, who plan to have the service extend subscription-based access control to online TV viewing based on industry-defined authentication techniques
• Canoe Ventures’ suspension of plans to roll out addressable TV advertising on cable TV anytime soon. The plan, called “Community Addressable Marketing” (CAM), would have given broadcasters the ability to offer ads targeted and displayed selectively to different viewer segments on cable TV. The abandonment of the plan illustrates the magnitude of the challenge presented by dependencies on legacy technology in the highly dispersed operations of the cable industry.
• The Network DVR decision, appeal of which was rejected by the U.S. Supreme Court, leaving broadcasters who were trying to stop Cablevision’s plans to allow consumers to “record” shows on virtual storage devices located in the cable cloud instead of their homes without legal recourse. (See Mike McGuire’s post here.)

Any of these taken individually would be pretty major news, but taken together, they point to some major instability in the ecosystem. The Network DVR decision, in particular, seems to be a fundamental game-changer for the economics of video-on-demand services (the line between VOD and Network DVR being increasingly hard to draw the more you think about it), as well as the economics of advertising, given the well-established tendency of home DVR users to skip ads. Of course Network DVR doesn’t have to allow ad skipping – online video services have clearly demonstrated the feasibility of making ads non-skippable even in on-demand content – but these features now appear to be a matter of negotiation rather than legal mandate.

So what do all of these have in common? Try this: they all indicate an increasing need for decision-makers at the highest levels to confront and understand the low level details of how technology is affecting every aspect the TV experience. High-level guiding principles no longer hold – we need storyboards and detailed flow charts to plan and negotiate business policies.

I once took a sales training class in which it was asserted that business executives spoke three different languages (and that the key to selling to them was to first determine which language they spoke). The three languages were: the language of CXOs, which speaks in terms of market-size and market-share, the language of VPs and Line Managers, which speaks in terms of revenues and costs, and the language of Directors, Designers, and Developers, which speaks in terms of features and functions. In general, the idea is that people turn off pretty quickly when you speak to them in the wrong language.

From this perspective, you could argue that the secret of the technology’s most successful leaders – Bill Gates, Steve Jobs, perhaps Eric Schmidt – was their ability to speak all three languages fluently, but mostly to see and exploit the subtle connections between feature-function thinking in the design details of products and the resulting major shifts they can produce in market share. Whether it’s tying the browser to the operating system, tying the device to the store, or – well, I don’t have one for Google yet, but you get the idea.

So, TV executives take note. You need to spend more time talking with your engineers (and analysts who can translate what they’re saying). In the words of Bob Dylan, “you better start swimming or you’ll sink like a stone, the times they are a changin’.”

As I waited, I could see from the teasers the angle that was being developed on the Internet segment: Facebook’s $10B valuation is an indication that we’re in a repeat of the dotcom bubble (smirk knowingly). I contemplated my options for key points to break out of this and came up with a plan. Something simple but pointy enough to break the monotony of condescending skepticism.

So, here’s how it went.

As you might have guessed, Live TV is not a medium I’ve mastered, so my plan was thwarted. Perhaps Dave Asman sensed where I was going when he cut to another guest. Fortunately, unlike Live TV, on the web there’s always a second chance. Here’s what I’d planned to say on this topic.

Asman: …but how will sites like Twitter make any money?

Me (second take): With respect, Dave, I think you might be missing the big picture here. Sure, some social networks might not survive and others might barely break even (or maybe get acquired by companies like Fox) and some investors will no doubt be disappointed because they were hoping for the next Google. But a lot of social sites will survive because they don’t need to make billions to fund their operations, which are steadily declining in cost. So maybe the question you should be asking is, assuming that some of them do survive, what’s going to happen to TV shows like this one when your sponsors discover they can reach your audience for a lot less money than they’re paying you? Social media means disruption – it’s hit the music business, it’s hit the newspaper business, and it looks like TV could be next in line. Think of people like Scott Monty, the head of social media at Ford, who’s able to broadcast his messages whenever he likes directly to over 22,000 followers, for free. Do you think Ford will be eager to continue paying millions of dollars to reach an undifferentiated TV audience with its commercials when Scott can put a link to a YouTube video in a Tweet and get massive exposure online for almost nothing? That kind of communication might not make Twitter wealthy – they’ll have to think of subtler ideas like selling marketing intelligence, or consumer data, or specialized applications – but it sure could change the economics of TV journalism.

The first half of the event was given over to Clay Shirky, who presented his characteristic big-picture assessment of historic sea-change in the nature of media. While the key messages, consistent with Bluewolf’s credo, were innovate, iterate, and be prepared to fail, the talk also had the effect of shining a spotlight on the elephant in the room of every Big Media gathering of late: once again, the Internet is messing with their business, intellectuals like Clay insist the changes are permanent and irreversible, and no one knows where this disruption will eventually lead for professional content.

With the crowd thus stirred, vendors took the stage to talk about how cloud computing could help. Representatives from Salesforce.com, Google Apps, and Zuora presented some compelling cases to illustrate how cloud computing not only cuts IT costs but can also create the right environment for rapid low-cost innovation and experimentation. It seemed as though Bluewolf may have gotten things back on message.

Google makes its case for Apps in media, photo by author

But then came the industry representatives: Dave Fox, VP, Commercial Services for Time Warner Cable, Mike Stoeckel, who had recently left his post as VP, Digital Products at Fox to join a media ad-ops platform start-up called Invision, Dottie Gallagher-Cohen, VP Marketing for The Buffalo News, and Daniel Hart, whose title, “formerly of MTV,” seemed to hint at some discord to follow.

Note to event organizers: be careful with panelists who no longer work for companies in the industry you’re targeting, especially if it’s media. Stoeckel laid into the media industry for its complacency following the Internet bubble which he pointed to as the main reason Google and ad networks have marginalized them online despite being initially inept at ad sales. Gallagher-Cohen, as the token newspaper representative, did not try to hide the stress and frustration surrounding her business, although she did claim that her paper’s innovative strategies were paying off as they were seeing CPMs rise (mostly due to the paper’s introduction of behavioral targeting) even as industry-wide rates were falling sharply. Hart, surprised to hear of rising rates in Buffalo, spoke wistfully of some of the great social gaming work MTV had done online with its sort-of-hit TV show The Hills, and suggested that someday media might understand how to monetize the passion of its fans, but today agencies and networks were still mostly locked in the outdated mass-media mindset of valuing reach far above audience dedication.

Things came to a head when Clay Shirky fielded a question about what kinds of business models he believed could sustain content production businesses in the future, given his points about the publishing’s catastrophic loss of scarcity. He pointed to examples like Cook’s Illustrated and Consumer Reports, which he described as successful “because consumers pay them not to take advertising.”  The audience flushed.

Afterwards, blue margaritas were served al fresco on the roof of the Bryant Park Grill under a warm, clear spring sky.