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Wednesday, May 12, 2010
Q&A Interview with Jaffer Ali - Vidsense
Jaffer Ali, President of Vidsense, can be labeled a
provocateur because of his very different and cutting edge
views on the future of the media. And yet, his thought
provoking opinions and insights cannot be easily dismissed.
Jaffer has been on the cutting edge of the digital business
for over 25 years and has experienced the rise and fall and
rise of media from many vantage points. His latest venture,
Vidsense, bundles video content and viewers and delivers
them directly to advertiser websites in an interesting and
user friendly manner.
CW: What is the payout for the publishers?
JA: We actually do something few networks actually do; we
negotiate with each publisher upon acceptance into our
network. We do not have a set payout that goes for every
publisher. The only thing we guarantee is that our payout
will be higher per video view than any other video network
out there. We just insist that the video view play in a
new browser window.
CW: What do you think are the next trends in the online
advertising environment?
JA: Presently, most of the media and advertising models
have not been created for advertisers to scale. Google may
scale for Google, but it certainly doesn't scale for
advertisers. That is why they need 1.5 million advertisers.
They cannot deliver millions of visitors to a brand website
every day.
We will see new ad models that have scale as a point of
departure and not as an after thought. The present online
ad environment was created for niche, "long tail" marketers.
Having a scalable ad environment will reverse this idiotic
trend. This will then attract the huge brand ad dollars
that have largely stayed with television. Scalable reach
will be accompanied by a trend of brand websites controll-
ing the eyeball on sites they own instead of renting eye-
balls on publisher sites.
We also believe that the definition of online reach will
dramatically change. Why? Because current display banner
ads just might be the most useless, ignored advertising
medium ever invented by man.
CW: What are your views on consumer privacy?
JA: I have also written about this extensively. We are
experiencing an almost complete symbiotic relationship
between corporate and government collusion. Google, AT&T,
and all BT companies are just a subpoena away from handing
over any PII (Personally Identifiable Information) to the
government. Orwell never envisioned corporations violating
our privacy as they are now. His dystopian view of the
world had only government savaging our privacy.
Violating our privacy in the name of the false, clay idols
of targeting only serves to defy and desecrate our dignity.
Even if the present targeting methodologies worked (which
they are existentially flawed), they would be disqualified
by any ethical or moral standard worthy of its name.
CW: What would you say are the most dramatic changes in
the media industry in the past five years?
JA: The futile attempts to avoid recognizing failure has
resulted in all media "doubling down" over and over. And
the result has been an ever-accelerating rush to the
bottom. Common sense has been abandoned. Everyone knows
that if you are in a hole, one should stop digging. But
media across the board has rented power shovels to dig
ever deeper. The obsessive and futile search for "one-to-
one" marketing is a reflection of obscene narcissism. Media
and marketers have tried to divine what makes each of us
different and have utterly ignored what we share in common.
In the process, we have increased choices catering to as
many different tastes as possible. Media and marketers have
thus sacrificed scale for idiosyncrasy. We have developed
more and more targeting tools which further erode brand
loyalty. Behavioral targeting is just the most recent
boondoggle that will dig an ever deeper hole for media
and marketers. Audience fragmentation and marketing
fragmentation both operate against scale. Media and
marketers are embracing each other in a death grip.
CW: But what about products that are niche by nature such
as vitamin water? Isn't behavioral targeting a way for
advertisers to better pinpoint potential consumers in an
efficient and affordable way? Not all products are mass.
Having a niche product does not confer some talismanic
right for a viable business. I once had a client who
flew out to meet me to demonstrate his product. It was a
"portable toothbrush". In fairness to him, it was encased
in device that looked like a fountain pen. Having a niche
product for left-handed midgets doesn't mean that it is a
viable business. You are 100% correct that not all products
are mass... and yet we all need to realize that not all
niche products are economically viable.
Your question about behavioral targeting assumes that it
works. The reality is quite different. The fact that there
are a multitude of anecdotes pointing to its effectiveness
ignores the reality that it has failed miserably MANY
times. BT is just the latest snake oil being sold by
folks who really do not even understand its underlying
assumptions. Chief amongst the misconceptions is the
notion that human behavior is rational. This was the same
disastrous assumption that led to the collapse of the stock
market. I have written about this in much more detail and
will not go into this more deeply right now.
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CW: And what about mass type products that develop sub-
brands like laundry detergent that begets environmentally
friendly versions?
JA: Charlene, we are just emerging from the most self-
indulgent time in our nation's history. Do we really need
37 types of toothpaste? 47 types of corn flakes? The number
of SKUs stocked by stores escalated dramatically over the
past 20 years and only now is being rolled back. Walgreens
announced a reduction of25% of their SKUs. Wal-Mart is
reducing its SKUs.
Media fragmentation and product choices went hand in hand.
People actually thought that having customized license
plates expressed real individuality. Self-indulgent
narcissism was nurtured thru more and more niche product
lines. This "golden age" of choice did not create a healthy
ecosystem. And as Barry Schwartz wrote in The Paradox of
Choice, increased choices did not make us happier. It led
to a more and more complex environment.
CW: Jaffer, if you think niche products will cut back,
what is your long view of digital niche media - millions
of websites and blogs etc?
JA: The long tail marketing concept was thought to help
niche media sustainability...it does not. There will be
cable networks going out of business by the gaggle.
Millions of websites and blogs will recognize that they
do not have a sustainable business model and with rare
exceptions, only those that are hobbyists will continue.
I personally have had a Blog for 12 years that is a
collection of inspirational quotations from sages.
Quotations are a complete passion of mine and not a
business. This is an example of "passion over profit". It
would be self-indulgent narcissism and vanity to believe
that my hobby is a sustainable business.
Millions of websites have created a business for Google
and intermediate networks, but those networks cannot offer
a sustainable revenue stream in most cases. This is not
the least bit controversial. Just ask how many of those
millions of websites and Blogs are making a thriving
business from their passion. And niche cable networks by
and large are collapsing in on themselves. The end of self-
indulgent narcissism where 15 different types of toilet
paper (to be used on our backsides!) is gladly coming to
an end. Our happiness and media ecosystem should never
have been tied to trying to satisfy every indulgence.
CW: Jaffer, I am almost afraid to ask - please give me
three predictions for the next five years.
JA: All of the following predictions are predicated on a
landscape that understands that failure will no longer be
dressed up as success.
A) Consumer and media choices will be curtailed across the
board. As mentioned earlier, do we need 37 different types
of toothpaste? 49 different cereals? We are starting to
see the trickle of less skus in Walgreens, Wal-Mart and the
cereal aisle. This in turn will be followed by less media
choices on DirecTV and cable. Channels catering to ever
more niche audiences will go out of business because they
are not sustainable... just like 49 cereals are unsustain-
able.
B) Behavioral targeting will be recognized for the snake
oil it is. Plus, the invasiveness of its methodology will
be seen as unethical and immoral.
C) Brands will return to what made them: scalable reach.
They will figure a way to wrap themselves around content
in all media formats and scale. This means brands will
increasingly subsidize content like in the glory days of
radio and television. And media will figure a way to
accommodate them because that is where the money is: big
reach for big brands. Concentrating on self-indulgent
niches is a disease of the soul and brands will rediscover
the soul of their brands by emphasizing our commonalities,
not our differences.
CW: If your first prediction comes true, how do you see
that impacting the media sales marketplace?
JA: A less fragmented media marketplace that recognizes
its business is satisfying advertiser needs will lead to
simpler solutions. Brand advertisers want scale. They
need scale. Ask P&G. Ask Unilever. Ask any large brand
advertiser and they all will tell you that scale is much
more difficult to achieve in today's fragmented landscape.
We agree, but believe there is no technological solution
when you ask wrong questions. We cannot scale for large
brands by ADDING. We will scale by SUBTRACTING. Less will
be more when it comes to our media environment.
CW: If your predictions come true, do we need 1000s of
television or cable networks? What will happen in that
area, in your opinion?
JA: I think it is patently obvious that thousands of cable
and television networks are not sustainable as businesses
in a post-narcissism era. The same holds true for websites
as well, but since the barrier to enter and sustain a
website is much lower than for TV and Cable networks,
niche tastes will be serviced by passionate hobbyists. I
call this the "Passion over Profit" phase.
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Interview conducted by Charlene Weisler, a research
veteran, member of the Set Top Box Collaborative executive
committee, the CTAM Research and Research Planning
Committees and a CIMM consultant. She can be reached
through her blog www.WeislerMedia.blogspot.com or at
WeislerMedia@yahoo.com.
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