Highlights from the Web 2.0 Expo Conference - May 2010

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The document summarizes highlights from the Web 2.0 Expo conference, including sessions on media business models, open APIs, lead generation, ad-supported communities, freemium models, and virtual goods/currency. Key themes discussed were the transition to a more social web platform and the importance of transparency and openness. Sessions also compared HTML5 vs. Flash and analyzed major tech companies' roles in the "internet operating system" landscape.

Technology

Highlights from the Web 2.0 Expo Conference Presented by Carol Cox May 18, 2010 http://www.web2expo.com/webexsf2010

Strategy & Business Models Track Sessions on: News Media: Success without Google Open APIs Lead Generation Ad-Supported Communities Freemium Virtual Goods Virtual Currency and Offer Walls Behaviorally-Targeted Advertising Plus: HTML5 vs. Flash The Internet Operating System

1. Media’s New Business Model:Success without Google Panelists: Jessica Vascellaro (Wall Street Journal) Bernard Gershon (GershonMedia, LLC) Tristan Harris (Apture) Heidi Perry (ShareThis) Darian Shirazi (Fwix)

1. Media’s New Business Model:Success without Google ,[object Object],[object Object]

1. Media’s New Business Model:Success without Google ,[object Object],[object Object],[object Object]

1. Media’s New Business Model:Success without Google More targeted display ads from “social signals” Groupon ads becoming content as well

2. Open APIs:Evolve Your Business Model ,[object Object],[object Object]

2. Open APIs:Evolve Your Business Model Successful applications will use many different APIs And they will take your applications everywhere.

2. Open APIs:Evolve Your Business Model For successful companies, 80% of traffic will come from beyond the browser.

3. Sharing is the New Lead Gen ,[object Object],[object Object]

3. Sharing is the New Lead Gen Wrong way = Fill out a form to get white paper/article

3. Sharing is the New Lead Gen ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

5. How to Cash in with a Freemium Business Model ,[object Object],[object Object],[object Object]

5. How to Cash in with a Freemium Business Model ,[object Object],[object Object],[object Object],[object Object],[object Object]

6. User-Generated Virtual Goods ,[object Object],[object Object]

7. How to Monetize Your Contentthrough Virtual Currency ,[object Object],[object Object]

7. How to Monetize Your Contentthrough Virtual Currency

7. How to Monetize Your Contentthrough Virtual Currency Why do users want to earn virtual currency?

7. How to Monetize Your Contentthrough Virtual Currency Offer Wall Users can select offers to complete and earn virtual currency (affiliate deals) Types of Offers: Watch a video ad Complete a survey Subscribe to a newspaper or magazine Purchase a product Trial a service or product Install an application

8. Behaviorally-Targeted Advertising Panelists: Satya Patel (Battery Ventures) Mathew Greitzer (Razorfish) Fran Maier (TRUSTe) Ingrid Sanders (TARGUSinfo) Omar Tawakol (BlueKai)

8. Behaviorally-Targeted Advertising ,[object Object],[object Object],[object Object],[object Object]

Can access device’s web cam, mic, and P2P communication

Both HTML5 and Flash can co-exist and be successful,[object Object]

Cloud computing platform with monetization for developers

Weaknesses: Search; Advertising; Social Graph,[object Object]

Building an alternative way to access info/media

Weaknesses: no cloud platform; latecomers to advertising and location; doesn’t understand importance of data (MobileMe example),[object Object]

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Highlights from the Web 2.0 Expo Conference - May 2010

1. Highlights from the Web 2.0 Expo Conference Presented by Carol Cox May 18, 2010 http://www.web2expo.com/webexsf2010

2. Strategy & Business Models Track Sessions on: News Media: Success without Google Open APIs Lead Generation Ad-Supported Communities Freemium Virtual Goods Virtual Currency and Offer Walls Behaviorally-Targeted Advertising Plus: HTML5 vs. Flash The Internet Operating System

3. 1. Media’s New Business Model:Success without Google Panelists: Jessica Vascellaro (Wall Street Journal) Bernard Gershon (GershonMedia, LLC) Tristan Harris (Apture) Heidi Perry (ShareThis) Darian Shirazi (Fwix)

6. 1. Media’s New Business Model:Success without Google More targeted display ads from “social signals” Groupon ads becoming content as well

8. API:Application Programming Interface

10. 2. Open APIs:Evolve Your Business Model

11. 2. Open APIs:Evolve Your Business Model Successful applications will use many different APIs And they will take your applications everywhere.

12. 2. Open APIs:Evolve Your Business Model For successful companies, 80% of traffic will come from beyond the browser.

13.

14.

15. 3. Sharing is the New Lead Gen Wrong way = Fill out a form to get white paper/article

16.

17.

18.

19.

20.

21. 7. How to Monetize Your Contentthrough Virtual Currency

22. 7. How to Monetize Your Contentthrough Virtual Currency Why do users want to earn virtual currency?

23. 7. How to Monetize Your Contentthrough Virtual Currency Offer Wall Users can select offers to complete and earn virtual currency (affiliate deals) Types of Offers: Watch a video ad Complete a survey Subscribe to a newspaper or magazine Purchase a product Trial a service or product Install an application

24. 8. Behaviorally-Targeted Advertising Panelists: Satya Patel (Battery Ventures) Mathew Greitzer (Razorfish) Fran Maier (TRUSTe) Ingrid Sanders (TARGUSinfo) Omar Tawakol (BlueKai)

25.

26.

27. HTML5 advantages:

28. Built on the “web stack”

29. No plug-ins

30. Not proprietary

31. Flash advantages:

32. Consistency across platforms

33. Can access device’s web cam, mic, and P2P communication

34.

35. Communications

36. Identity and the Social Graph

37. Payment

38. Advertising

39. Activity Streams

40. Location

41. Time (real-time)

42. Image and Speech Recognition

43.

44. Amazon

45. Apple

46. Facebook

47. Google

48.

49. Cloud computing platform with monetization for developers

50. “Thing graph” – lots of data on stuff

51. Fulfillment Web Service

52.

53. Building an alternative way to access info/media

54. Web’s first real rival as a platform

55. Don’t take the open web for granted

56.

57. Social Graph

58. Application Ecosystem

59. Strategy of adding value to other sites: “Create more value than you capture”

60.

61. Richest and most complete data subsystems

62. Search, ads, maps, translation, videos, payments, email, etc.

63. Weaknesses: anti-trust target; trying to own too much of the pie

64. Weaker monetization for developers

65. 70% of Apple apps are paid

66.

67. Cloud computing platform, search, advertising, maps, speech recognition

68. Willingness to partner

69.

Editor's Notes

Image Source:http://www.flickr.com/photos/oreillyconf/4586237726/sizes/m/in/set-72157623869278867/
Google still largest driver of traffic to news sites, however:Growth rate is slowingTraffic from social media sites increasingTraffic from social media is better traffic (more page views and time on site)
U-turn traffic from GooglePublishers frustrated that they’re paying for SEO and PPC, but the traffic is not sticky:30% of the top publishers’ traffic comes from Google.But, 30% of users immediately go back to Google after clicking on the SERP link.“So, what’s the point?”, publishers are asking.
Apture.com has a plug-in that news sites can use to keep visitors on their site when they want to search for more info.Being used by NYT, WSJ, Washington Post
Identity (instead of anonymity) = Better comments and stickinessFor NYT, Twitter traffic 3-4x more valuable than Facebook trafficStay longer and more engaged; older demographicShareThis has found better engagement from Facebook than Twitter (for non-news content)All agree that email is the most engaging
Facebook “Like” button (way for FB to index the web)Seeing transition from Google (information web) to Facebook (social web)
Integrated and Immersive Ads (“Frictionless Internet”)Apple’s iAd PlatformRead about a movie, buy tickets, get map all from one screenAds are still in 1995; Internet can do so much moreSeeing more immersive ads in social gamingIncrease in location-based ads and contenthttp://www.cooliris.com/partners/advertisers/
Presentation by Sam Ramji (Sonoa – API infrastructure)Worked at MicrosoftHow developers can access a company’s data/contenthttp://youare.s3.amazonaws.com/39466-6987440.jpg
Analogy with 20th Century Brick-and-Mortar BusinessShift from Direct (buy from manufacturers)Image Source: http://ephemeralnewyork.wordpress.com/tag/old-signs/
To Indirect (buy from retailers/middlemen)The web is now going from Direct (get/use data/content from source) to Indirect (get/use data/content from third party).APIs are how people get to your business.http://ephemeralnewyork.wordpress.com/tag/old-signs/http://farm5.static.flickr.com/4072/4338895970_56d7989798_o.jpg
The Twitter Ecosystem = Twitter has grown so much because of the third parties that have used its API to create apps like TweetDeck.
Source: PowerPoint presentation by Sam Ramji, May 4, 2010.Siri purchased by Apple in April 2010.Siri is an iPhone app that helps you find movie and show tickets, tables at restaurants, etc. Siri does not create its own content or data. Instead, it taps into the APIs of these other sites.
Facebook betting its future on its APIsMobile = use APIs to access maps, location, social graphs, eventsFor successful companies, 80% of traffic will come from beyond the browser.Make your API useful and it will be carried to customers you’ve never met.Markets becoming more specialized and differentiated.http://i334.photobucket.com/albums/m431/igorkheifets/tweetdeckimproves.png
Twitter:Tail = Users send tweetsHead = Google & Microsoft pay millions to get the data from TwitterGameSpy:Tail = Limited access for freeHead = Unlimited access for a price
SEO and virality
SlideShare charges minimum $1/lead
Lessons learned:Control the loopGroupon creates the offers for businesses because they know what worksOptimize buyer experienceReduce barriers to buyOptimize end user experienceReduce clicks to leads
Presentation by Chris Tolles, CEO of Topix.netLaunched in 2004 as a news aggregator, focused locallyAdded communities in 2006Large increase in traffic from Google9 million unique visitors/month
Ad-supported siteMust get a LOT of traffic to make enough moneyNiche sites don’t scaleLead gen great for local (Groupon)Targeting is criticalhttp://multivu.prnewswire.com/mnr/affinion/27862/images/27862-hi-traffic.jpg
Product has to market itselfSEOSocial Optimization (invitations, sharing)Be distinct and be about something (Digg, HuffingtonPost)
Why was Ning not successful?Did not have control of their ad inventoryDid not have control over quality of contentDid not stand for one thingCould not go to advertisers to sell ads – for what audience?
Freemium = Free + Premiumhttp://gis.geoscape.eu/freemium/images/zerocost.png
Concept of freeloaders not a bad thing with digital goodsHeavier users will upgrade and payIdeal to have several tiersFree version encourages later adoptionChallenges with Freemium:Get a lot of users (viral)Convert a sufficient fraction
Lessons Learned by Animoto:People have to fall in love with your free product.~10% conversion rate (150,000 of 1.5 million)Created Facebook app in 2008 and had dramatic increase in installs (and huge increase in cloud bill)No way to monetize it, so shut it off.Need both popularity and monetization
Lessons Learned by Skype:Be sure to communicate your paid offerings to your customers (in-house ads)Expectation that people will pay for mobile apps, higher quality calls, HD videoLoves the iPad = video conferencing in the future
Lessons Learned by Pandora:Was originally subscription-only (2005-06)Only 0.5% converted from trialsWent to ad-supported model:Doesn’t scale with heavy usersAdvertisers want to buy your reach/breadthDiminishing marginal potential revenue with heavy usershttp://www.chrisbrogan.com/jameson-does-pandora-right/
Lessons Learned by Pandora:Customer segmentation = focused on very heavy listeners (5%)Pay-as-you-go option (monthly)Doesn’t require commitment; good for users early onPandora One subscription (yearly)40% of very heavy users convertedMobile was game changing for themLooking at cars as well
Final Thoughts from Chris Anderson:Transparency with users is really importantIf they don’t understand your business model, they will think they are getting screwed.Textbook publishers looking at e-books and selling tests, test prep, iPad bundles.
Presentation by Cary Rosenzweig, CEO of IMVU, Inc.IMVU = online community where members use 3D avatars to meet new people, chat, etc.50 million registered users4 million items in catalog (5,000 items a day added)Long Tail = Top 20 items only sell 0.2%. People want unique.Founded in 2004$22 million in revenue in 2009 (profitable and cash flow positive)
Members buy creditsMust offer lots of different payment options
Why do people buy?Enhance game playExpress their identityBuild relationships (gifts)20% of virtual goods on IMVU are purchased for other peopleShop (browse and buy) = fun
Presented by Rebecca Watson, gWalletVirtual currency platform for social media
Digital media revenue models:Subscription/pay to playAdvertisingDisplay, search, product placementFocused on impressions and eyeballsLicensing/SyndicationCost per article or gameMicro-transactions/virtual currencyUser buys strawberries in Farmville
Est. $1 billion in revenue in the U.S. in 2010 from virtual goods.
Why do users want to earn virtual currency?Virtual worlds = obtain an avatarSocial networks = communicate with othersGames = get premium accessApps = send a virtual goodeCommerce = get a product or service (software, data)Users can:Pay directlyEarn it
Advertisers have realized they’re selling to people, not pages/contentBehavioral targeting = pinpointed to a particular user
Re-marketing = person visits site, doesn’t purchase; show them an ad elsewhere later on
Works at all stages of the funnelBranding and performance drivenFocus on a niche that an advertiser would be interested inLong research times = travel, real estate, auto, financeHigh price items
Transparency and choice are key for consumersAt point of data collection, users should know/understandAt point of use, there should be an indicator and explain what data is being usedAdd link at bottom of every page of your site – “About Advertising” – in plain English, no sugar coating, links to preferences optionsOpt-out rates decrease with more transparency
http://radar.oreilly.com/2010/04/handicapping-internet-platform-wars.html
http://radar.oreilly.com/2010/04/handicapping-internet-platform-wars.html
See http://radar.oreilly.com/2010/03/state-of-internet-operating-system.html
Media (books, music, video); user reviews and ratings; purchase historySee http://radar.oreilly.com/2010/03/state-of-internet-operating-system.html
See http://radar.oreilly.com/2010/03/state-of-internet-operating-system.html
See http://radar.oreilly.com/2010/03/state-of-internet-operating-system.html
See http://radar.oreilly.com/2010/03/state-of-internet-operating-system.html
See http://radar.oreilly.com/2010/03/state-of-internet-operating-system.html

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Editor's Notes