Some ElfYourself statistics

Following on from the previous ElfYourself post, I found an article from Promo Magazine that talks about the 2006/2007 Christmas ElfYourself viral campaign. The article sings the praises of the little elfs - lots of mainstream press coverage, website traffic up, lots of buzz etc., etc. These are some of the specific highlights:

At its peak, this site generated an average of 41,000 elves per hour or 11 elves per second. Revelers created 11 million elves in all, and the site drew 36 million visitors in the five weeks it was up, from Nov. 27 through Jan. 1. Better yet, it helped boost traffic at OfficeMax.com by 20%.

So three is no doubt a lot of elves were created. Yet did any of this translate into real worth for OfficeMax? A 20% rise in traffic on the site seems good but if you look at Alexa (and yes, Alexa has issues with its sample), www.officemax.com had similar increases in the three years prior to running the campaign - it's called the 'holiday shopping season'.


If you look at Google Trends for 'Office Max' searches, you get similar results - the years without the campaign look pretty good in comparison - although there is a slight upward trend recently.


Besides, some increase is to be expected. If you have a viral campaign that generates tens of millions of page views, you would expect just by sheer chance x% of those people clicking through to OfficeMax just curious to see what else is happening. Are they motivated to purchase once they are there? Maybe. Given that it's a web campaign it shouldn't be hard to figure out yet I can only find site traffic statistics, not incremental sales, as a success metric for last year's effort.

When you do a brand campaign in a non-direct response medium such as TV or radio, you accept the limitations of measurement. Surveying and tracking awareness and changing impressions towards your brand is about the best you can do (not always, but usually). There is no such excuse on the Net. The medium is demonstrably measurable. If you set it up right, you should be able to measure the incremental sales effect of an effort such as this. As well as the brand effect.

Maybe OfficeMax did measure it this way? If they did, you would think they would be shouting sales metrics from the roof if it was successful.

I think marketing in general would be considerably better off if its practitioners were more transparent about success and failure. The worst is to tout victory for efforts like this with scant proof that they do indeed work.

Fred Wilson, a prominent NYC VC, posted about this campaign on his blog - 'expect to see more efforts like this' was his summation. He rightly points out that the CPM (cost per thousand impressions) is far superior to a TV effort. That's true, but it doesn't lessen the need for the return to still prove profitable. Making nothing off less is still making nothing. Kudos to Matthew Reinbold for pointing this out in the first comment.

It's not hard to REACH people with an idea. It's not even that hard to make the idea MEANINGFUL to them. It's dam hard to translate that meaning into VALUE for your brand or your bottom line.

Despite all this though, I still made an elf. An action I will caveat with the fact that I did click through to the OfficeMax site, was there for 10 seconds, bought absolutely nothing and probably won't go back until next year when the call of the elf dance echoes on the web once more.

Merry Christmas everyone!

PS: I don't think I make a good elf, lol.

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Elf Yourself - could have been so much more!

Many of you would have come across the ElfYourself site from OfficeMax - I think it is ranked in the top 20 for holiday internet traffic right now.

It's a cute site. You can upload a picture of yourself and up to three friends/family members, crop the pictures to just the heads and then put them on the top of dancing elf bodies. All very viral stuff.

I sent one to my wife who loved it. I asked her afterwards what else she remembers about watching it. Not much came to mind. She had no idea it was from Office Max. I asked her what she might do now that she knew it came from Office Max - she didn't really know. Yes, it's a sample of one, but based on my experience probably a very common reaction.

Office Max just created one of the best viral efforts of the season, had millions of people sending and receiving their effort, yet none (or very little) of what was sent or received concerned the brand. Yes they would have generated a bit of awareness for the holiday season - which is good as top-of-mind choice is important in retail - but it could have been so much more.

Where is the daily competition for the best elf that wins you a $20 Office Max voucher - redeemable at any store and so drives online or foot-traffic? Where is the picture of the elfs working away hard in their shop, with Office Max equipment strewn all around so people can click on products the elfs use? Where is the ability to print your dancing elf free with any purchase at Office Max before December the 25th?

The list can go on. Just because you have a great viral, doesn't mean there aren't ways to promote both your brand and drive people to action.

10/10 for the idea, 2/10 for the execution.

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US Firm Size

I was just looking around the IBM Many Eyes site and found that you can now embed visualizations into blogs!

One that I have always been fascinated with is the distribution of revenue in US businesses.

This below is the number of non-employer and employer firms in the US - the vast majority are smaller, one person outfits. Try playing with the selector on the bottom right. It changes whether or not you are looking at the number of firms, employees or revenue.

It's amazing how much revenue is tied up in such a small number of entities. Food for thought.

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UPDATE: The 'squeaky wheel' wireless card

Well, the Linksys wirelesss USB card came in the mail today. The one I bought despite the number of bad reviews it got from Amazon.

So far so good. It gets a little bit quirky if you pull it out while running, but other than one driver reinstall when this happened, no other problems. Connects fast and as yet hasn't dropped a line.

When I was looking back at the reviews for this product, one caught my eye. It was from a poster called mhk1999. It caught my eye because I remembered the handle from somewhere. Sure enough, after looking back at other sites selling the same product, this reviewer had pretty much spammed the same negative review everywhere:

Amazon
PC World
Epinions
Shopping.com
Pricegrabber

When this product works, it works. However it will occasionally shut down and then the only way to reconnect is to shut down the whole computer. If you are in the middle of several things like working on photos, graphics and the internet, you have to shut down all those programs, restart the computer to get the internet to work and then pull up all your work again. Simply unplugging the adapter will not do it and there is no way to "repair" connection except shutting down the computer. I've had it with this adapter.

Now whoever this person is, they are definitely entitled to do this. However, from a fellow consumer's point of view, this heavily biases the negative side of this product.

This is one person's view from one trial of one product, posted AT LEAST 5 times on separate sites they definitely didn't all buy from.

Just another example of how self selecting samples can be dangerous.

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The WSJ "numbers" guy

The Wall Street Journal (WSJ) has a "numbers" guy that just posted an article on how numbers can be very misleading.

He makes a good point, despite coming close to arguing himself out of a job :).

The good point is that the term 'statistical significance' has taken on such a aura in popular culture and business that anything claiming 'significance' from data must be true and important.

It's generally not - on either account. Large sets of data can produce all sorts of strange results and small sets all sorts of wrong conclusions.

Just something to keep in mind.

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The "squeaky wheel" syndrome

With all this talk about Facebook and the value of networks and recommendations, it reminded me of an issue I have had for a long time with Amazon reviews.

The problem is the 'squeaky wheel' syndrome - the 'squeaky wheel' is the only one you hear. Or put another way, you tend not to care when things go right, only when they go wrong.

If you work with service companies, you see this phenomenon reflected in customer feedback. I've seen industries with anywhere from 10-to-1 complaints-to-compliments, to over 30-to-1! People are more likely to give you feedback (negative feedback) when something goes wrong. You can bet your house on it.

Amazon collects reviews from millions of people every day. If you take a look at the ratio of good reviews to bad reviews, the ratio is no where near 30 or even 10-to-1. But this isn't surprising. Amazon promotes reviewing as a way to help people make choices. People are glad to help, so they post positive as well as negative reviews.

However, I guarantee that if you look at the distribution of reviews (good vs bad ratio), it is still a bad indication of how likely you are to be happy with a product. Just as the 30-to-1 complaints-to-compliments ratio of a service company tells you nothing about how good the service is (that particular company had less 1% of all customers complaining).

Case in point, this is the review distribution on Amazon for a cheap USB wireless drive.


If you read the 8 reviews that gave it a "1" you would probably never buy this product. They are scathing. And those 8 reviews are 30% of all reviews given! If you take all 27 reviews as representative of the 'average' experience with this product, you've got a 30% chance to end up with something you will hate. Not great odds.

But it's all a big lie. There is no way Linksys is going to release a product to market that fails, completely, in 30% of cases. It's just not going to happen.

What has happened is Amazon has drastically improved the ratio of bad-to-good reviews, but not to the point that you can be confident that they are representative of the 'average' experience.

This may sound a little bit nit-picky, but it's important to know. It's the same phenomenon at work when CNN post the results of invitation polls - it's a self-selecting group giving their opinion. Something vastly different from actually polling a population.

It's kind of an obvious point. But it's amazing to see how persuasive Amazon reviews (indeed customer reviews in general) are on people's purchase decisions. When most of them tell you little about your chances of receiving a dud (they do have other uses of course).

I ended up buying that drive despite the bad reviews. I will be big and post my experience (good or bad) when it arrives and I get it working.

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We live most of our lives between 0 and 100

I just came across this nifty applet that lets you look at the popularity of every number between 0 and 100,000 - based on the results of a prominent search engine.


Not surprisingly, we live most of our lives happily ensconced between 0 and 100.

I don't think there is anything earth shattering about this - it's pretty much common sense. But it's nice to see it displayed - that 'aesthetic' value of information again.

It also reminded me of a use of this type of distribution that is not commonly known. Apparently you can tell if someone is cheating on their tax forms by looking at the distribution of integers they use. If it's more perfectly random than it should be (too many numbers with the same frequency of occurrence), they might be cheating. Normal tax returns should have skewed distributions - more 1s than 7s for instance. When we cheat, we tend to be a bit too random - some important advice there.

I can't find a link for this though, but I know this type of phenomena has a name... need to do some digging.


PS: I don't condone tax fraud. I love the IRS. No, really, I do.

PPS: Isabel came to the rescue and just commented that the phenomena is call Benford's Law - thanks Isabel, I needed that. Was driving me crazy.

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Lies, dammed lies and Magazine Subscriptions

Chris Anderson over at the Long Tail just posted this on magazine subscription offers. I'd highly recommend reading it if you are in the business of trying to persuade a potential customer to subscribe to your service.

He talks about how magazine subscription offers are full of lies and half-truths to try and hook you in. We've all received many of these in the past. I especially like the ones that come three weeks after a 'free trial issue' and warn you about an impending lawsuit if you don't pay your overdue subscription. Great scare tactics.

In the past, a positive ROI from these tactics was an indication of them working. But not anymore. Where Chris may have complained to a few friends, his wife, his bowling team (ok, I really don't know if he bowls), etc. These days he blogs about it. To thousands of people.

Blogs, Web 2.0ish technologies and online social networks have introduced very real consequences for marketers who try these tactics.

Please stop.

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Viral Marketing, Facebook and some new research

Since I posted about FB's Beacon service - where you can have your purchases from selected sites listed in your FB news feed - there has been lots of talk over the merits of the system.

I personally don't believe it's useful. At least not for me. I have many friends with many different tastes and would prefer an actual recommendation from one of them than a link to everything they purchase.

Of course, that's not to say the system has no merit. Exposing your product this way has to be better than basic display (banner) advertising. How much better is the question.

Surprisingly, there was some recent research done that the FB guys and gals could look to for a bit of insight into this area. The Dynamics of Viral Marketing is a research paper that was written this year on data collected from a large online retailer of books, music and video between 2001-2003.

The data they looked at was recommendations (15million in all) made by purchasers on the site. It was actually a referral program. Which means when you bought something, if you emailed it to a friend and they ended up buying it as well, they got a 10% discount on their purchase and you got a 10% credit.

Compare that to the FB program where there is no real incentive and no real recommendation (you're not targeting an individual friend with it), all things being equal the FB program results are probably going to be worse. The problem is that 'worse' results than the referral program are probably 'no' results.

A few of the things they discovered looking at almost 15million referrals were:

• The probability of a recommendation working decreased with repeated interaction - so we tend to ignore people who spam us with product recommendations. I am sure the same is true for multiple purchases on FB news feeds.
• The probability of a recommendation working if we receive it from multiple sources quickly reaches a (relatively low) threshold - the verbatim conclusion from this one was "...individuals are often impervious to the recommendations of their friends, and resist buying items they do not want". Couldn't agree more.
• Highly connected people who recommend a lot ('spreaders', 'mavens', 'sneezers') tend to have significant diminishing returns - they seem to have an influence over their immediate friends, but the wider network discounts their recommendations the more often they receive them (point 1).
• Smaller, more tight-knit communities coalescing around a single interest were more conducive to viral effects - that's definitely not FB. That's more like EBay where small groups of collectors and such show a strong interest in certain product areas.

I think the key point for FB is that last one. Viral effects are more pronounced in 'communities of interest'. What I would like to be able to do is actually HAVE a newsfeed from my friends that I can specify exactly what I am interested in at the time.

For instance, if I need a new laptop, let me look at all laptop purchases from my friends in the past 6 months? Or a new phone? New summer clothes?

The key is I have control. I don't feel like I am being spammed. And I am looking for products that I have an interest in. Seems much more useful.

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Sweating the small stuff when conveying information

It's an absolute must to sweat the small stuff when conveying information - any information.

I just came across this from the Microsoft Performance Point site. It's a description of the different system requirements for the Performance Point product.

Try to figure out if the Planning Business Modeler and the Monitoring Server have the same hardware requirements? Impossible, right? Or at least extremely hard.

This is either multiple pages or an inventive dynamic page. It's not a long list of thin columns.

Yes it's only one page out of many, and yes, they are only system requirements. But it's the small stuff you have to sweat. This one pages speaks volumes as to how difficult the help system is probably going to be, or how difficult it will be to find help full-stop.

It's the extra 10% of effort to produce an easily readable page that counts. Without it the other 90% is wasted. Yes that sucks. But that's just how it is.

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Facebook and the death of the Public Space

I was interested to read about the Beacon announcement from Facebook - basically, a way people can share what they have bought or registered for on different websites. I am just waiting until the first abuses of this start rolling in - and they will

Add this to all the ads, the branded pages, company pages, etc., and FB starts to feel like the rest of the web - crowded with branded content.

It reminds me of Naomi Klein's No Logo. She wrote that back at the turn of the century bemoaning the loss of public space to brands. Not a hell of a lot seems to have changed. It's just all moved on line.

Not that I am against branding or branded content, but now as part of the news feed in FB I have to read what all of my friends are buying? Some of my friends (no one reading this post of course) are blithering idiots and I wouldn't buy anything they recommend (I love 'em though!). I have different interests and tastes than many of my (more normal) friends as well. I'm not friends with them because we buy the same brand of shoe-shine.

Recommendations are powerful because they are personal and targeted. A friend has the same problem you have, you recommend something that helped you. Spamming seemingly random purchases in a FB news feed is not really the same thing.

It's the never-ending need to intrude on public space because of the perceived 'value' in the distracted attention of the 'crowd' that got us into this mess. There is no value in 'intrusion' anymore. Hasn't that lesson already been learned?

Naomi Klein started her book with a profound quote from David Ogilvy (that most sensible of ad men):

As a private person, I have a passion for landscape, and I have never seen one improved by a billboard. Where every prospect pleases, man is at his vilest when he erects a billboard. When I retire from Madison Avenue, I am going to start a secret society of masked vigilantes who will travel around the world on silent motor bicycles, chopping down posters at the dark of the moon. How many juries will convict us when we are caught in these acts of beneficent citizenship?

Pretty topical for something written in 1963.

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Blogger Social '08 in NYC

CK just put another post up on her blog about Blogger Social '08!

The poor girl is out on the streets promoting this thing. It just took one look at the obviously 'captivated' crowd of suites to move me to post about it here. She definitely knows how to get the sympathy vote!

Seriously though, it looks like a great event. If you're a blogger, you're welcome to come. Head over to this site to check out the event, times, etc. It's NYC based. They already have a good contingent of bloggers from places far and wide signed up.

Kudos to CK and friends for putting this together. It's a lot of tough work to get one of these things off the ground.

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Has the PC and Apple guy campaign Jumped the Shark?

I recently saw a couple of new installments in the Apple vs PC guy campaign. Here, you have the PC guy hiring a PR person to 'smooth' over some cracks. Here, you have the poor PC guy trying to promote Vista, but things turn out bad.

Now, I'm a fan of this campaign. It has very pointed humor that cuts through to the things that are indeed irksome about Windows. It doesn't make me want to switch to Macs, but I can attest that it has had an impact on other Windows users I know.

However, there just aren't many places you an take a campaign like this. It's dependent on popular Mac/PC issues. When those run out it feels like the juxtaposition is grappling at straws. The latest installments are a good example of this.

I find Vista easy to use. It has some quirky traits, but it doesn't take a lot to get over those. It's far superior to XP. Most of the problems people have is in upgrading and third party software and drivers, not the OS itself.

Comparing Vista to the new Mac OS is fine. But bashing Vista just for the sake of bashing Vista is, well... nasty. And that's not what the Mac guy is about. If anything, his persona is overly nice. He's always trying to help.

By all means compare the security environments. Poke fun at the bloated PC 'freeware' . Laugh at the abysmal peripheral compatibility. Make fun of the nasty reviews. But when the substantive comparisons run out and the best thing you can say is 'you suck', it's time to stop.

Don't jump too far over that shark Apple, you were doing such a good job.

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Visualizations as Metaphors

There is a mini 'industry' of professionals who worry about data visualization. Which is great. Someone has to! I have a few of them in my Interesting Links on this blog - check them out if you have some time (Many Eyes, Swivel, Information Aesthetics, DSA Insights, Perceptual Edge).

Part of what they discuss and debate is efficient ways to convey insight from information - similar to some of the posts on this blog, but their concern is more with the physical display. What's the best way to arrange data in a graph? What is the best graphical representation? What types of annotations are acceptable, etc.

However, having read many of the thoughts and postings in this area, there is another way to look at visual representations of data that has less to do with efficiency of display, and more to do with impact - visualizations as metaphors.

I love metaphors. My previous boss was a metaphor giant - which can be a double edged sword when swung too liberally. But as a way to add impact to data, the visual-as-a-metaphor is invaluable.

Case in point. Here is a post on Juice Analytics regarding the evils of pie charts. The image is:


Now I love the guys at Juice, they are very sharp and smart. And their reasons as to why this is a bad chart are valid - too much visual for too little data and the 3d is kind of pointless.

They also quote some nasty comments made about the poor pie chart. One that caught my eye was from Eric G. Myers's Improving Customer Experience blog:

To my mind, the best use of a pie chart is when you have one value that is overwhelmingly larger than the rest and you don't want the audience to focus on the actual values, but just bamboozle them with the overwhelming size of the leading segment. Of course, this seems to come close to embracing the old adage, "There are lies, damn lies and statistics."

Eric, you hit the nail on the head! You just hit it with the wrong end of the hammer. This is EXACTLY the right way this type of visual should be used. You throw it up on the screen and scare the living daylights out of the audience with the large, overwhelming pie piece that dwarfs all other pieces! If it's competitive market share, then the imposing piece of pie is a looming metaphor for struggle and toil in the face of incalculable odds. If you arrange it just right, you can make your tiny sliver (of market share) even smaller and seemingly in danger (if it's all in 3d) of being eaten alive by your competition - the impending Cheesecake of doom!

Ok, so that's a little over the top, but you get the point. The image becomes a powerful call-to-arms to combat the invading competition. Or perhaps a reality check for the task ahead? In any case, it's more impactful for delivering your message than any table or set of numbers ever could be.

Just like great design is full of metaphors, great data visuals can be too. Especially if they exist to make a point or further an argument. Not all data displays are static reports delivered as cold, hard facts. Which means not all visualizations are flawed if they don't follow the rules for cold, hard, factual static reports. Something to keep in mind.

Edward Tufte calls this the greatest data visualization ever. I think I agree. But not because it crams more information into less space than anything else could. It's the fact that it LOOKS like a jagged, disorganized, unplanned and unforeseen tragedy.

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Video Games and Community Based Marketing

Information Aesthetics just posted some interesting data looking at certain statistics in Half Life 2 - a popular video game. The statistics make for some interesting reading if you are a video game enthusiast - play time, average completion time, heat-maps of 'maps' showing difficult and easy areas, etc.

What's really interesting though, is that you can get this information at all. The information is used by the game's designers, Valve, to understand what is and isn't working. It's used to tweak and refine further versions or updates. This is like Microsoft releasing its Office QA data. Or Apple its OS usage studies (Apple does do those, right?).

But then, video game companies, particularly ones that make PC based titles, are unsung heroes of community based marketing. Community based initiatives are passe in the video game industry. You can't release a major title without a solid community based strategy. And this isn't just about forums for complaints or questions - it's encouraging fan sites, player development of additions or modifications to the game, community days and events etc.

Even development is, in some ways, a community based task. Video games tend to have massive betas with extremely good mechanisms for player feedback. Most developers keep a close eye on player reactions when changes or additions are made.

Valve releasing data on play time etc. is just one example of this type of mentality - the more information we give out about the product, the better ideas, help and support we get back from the player community.

It's a great way to run a business.

Of course, not all the lessons are easily transferred outside of the industry. Gamers tend to be pretty fanatical. They play for the fun, the escape, the community. Users of business productivity apps are harder to engage. But not impossible.

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Great post on how to demo software

Just a quick link to a great post over on Joel on Software about his trials and tribulations running a demo tour of his latest creation, Fogbugz.

His point about triangulation is powerful. You can scream at the top of your lungs to try and convince someone of something and often come up short. But when someone else whispers your argument to them, they believe.

A good point for anyone selling anything to keep in mind.

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Metrics wish list

Scott over at Artificial Simplicity just posted about some metrics he wishes he could measure. I just got off a phone call with a very intelligent ex colleague of mine who was also dealing with metrics he wishes he could measure.

On the call, my esteemed ex colleague brought up the Mystery and Puzzle notion so eloquently explained in a Gladwell op-ed piece for the New Yorker. A great idea to apply to anything you want to try and understand - be it marketing metrics or conundrums in general.

To quote directly from the Galdwell piece:

The national-security expert Gregory Treverton has famously made a distinction between puzzles and mysteries. Osama bin Laden’s whereabouts are a puzzle. We can’t find him because we don’t have enough information. The key to the puzzle will probably come from someone close to bin Laden, and until we can find that source bin Laden will remain at large.

The problem of what would happen in Iraq after the toppling of Saddam Hussein was, by contrast, a mystery. It wasn’t a question that had a simple, factual answer. Mysteries require judgments and the assessment of uncertainty, and the hard part is not that we have too little information but that we have too much.

The distinction is a great one. Too often we think we're trying to solve a puzzle, when in fact there is no real solution or vital missing piece. What we have is a mystery.

I would venture that the vast, vast majority of metrics/measure we use to look at consumer behavior are mysteries or parts of mysteries. Yet, in most cases, we believe them to be solutions to puzzles. Why? Because puzzle solutions are far easier to understand. You end up with a final solution, a factual outcome, a 'result'.

I think Scott asks some great questions, but they are all mysteries - and hence tough to solve.

The Brand Utility Mystery
A mystery if their ever was one - but a great thing to try and understand. Scott describes utility as more than 'usability'. It encompasses a brand's ability to understand and anticipate. Amazon being the gold-standard.

There is no one score than can encompass this though. It's just not possible (I've seen it tried). The big problem is tacit knowledge. It's too hard to divorce what a person knows from their perceptions of how easy or useful something is. Give the same utility test to top users of Amazon and Barns and Nobel and you will get the same result. You find utility in what you use often, for the very reason that you use it often.

So what would you need to do to get to this concept? Probably multiple measures that segment out new, recent and older users (to try and control for tacit knowledge). Apply different questioning techniques to each segment. Look at adoption times for new functionality across these groups. The goal would be to build up a body of insight, not a single measure. Less sexy, less useful... but it's a mystery!

Shareability/Network/Viral Effects
Another pure mystery, and Scott treats it as such. I'd love to know this one, I'd make a million dollars. An interesting question is why is this a mystery? Why is it so hard to predict what will and won't go viral? I think one of the reasons is that network effects are significantly more important than content. But you can't control network effects - who sees it, at what time, who they send it to, who they in turn send it to, what they say about it, etc, etc. There are way more great pieces of content (or conversations) that never went viral than there are networks with no content.

Participation
Again, a great mystery. What does encourage participation in a community? A host of factors have to come into play here - networks, interest, time, branding, incentives, hype, content, functions, fun, etc. The list is long. I'd love to see someone even try and model it! If you broke it down into manageable chunks - importance of just incentives for instance - you might learn something. As a broader question though, it's unknowable.

Linking Sales and Branding
This was the conversation I had with my ex colleague. Again, this delves into the realm of mystery. It also has to be the single most common question you get from Marketers - why are my sales going south but my brand metrics are strong? (or vice-versa). The truth is that there is never a clear relationship, never a stable relationship, and it's never solvable - it's not a puzzle. I worked for one of the fastest growing phone companies in the US in recent years and saw sales skyrocketing and brand metrics tanking - it made perfect sense. But it wasn't a situation that was typical and nothing you learned from it was useful to anyone other than that specific company.

Mysteries aren't 'general'. You can't derive learnings and apply to situations that look similar. I've blogged about this before, but if you really want to understand uncertainty, read The Black Swan - possibly the best book I've ever read that deals with what is and isn't knowable, and what to do about it.

Most of Marketing deals with mysteries. Beware people that package mysteries as puzzles - a common technique used by Marketing Research companies to sell you research. Beware consultants and industry pundits that package their experience as laws.

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E-Filing Data

Interesting graph over on Swivel showing the proportion of people in the US using e-filing for tax returns.

Interacting with government/local government via the Web is really an idea who's time has come - and not a moment too soon.

The interesting thing about this graph is that as an adoption curve it's not that steep. You would think that network effects would have resulted in a steeper climb - as more people e-file, tell others how easy it is, they do it, tell others, etc.

I remember seeing some data on online banking back in the early 2000s and you could clearly see the rapidly increasing adoption of that service. My guess is there is probably a lot of built in inertia - accountants you have always used, not trusting some of the early services, cost.

I'd love to see data on paying parking tickets via the Web - that's a service I have been using a lot recently :(

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Guidelines for setting useful Marketing KPIs

I'm doing some KPI setting work for a client at the moment (I do freelance marketing/research/strategy related stuff on the side to support my bad habits) and it got me thinking about Key Performance Indicators (KPIs) in marketing.

Marketing KPIs are different. Many are 'softer' than more common revenue or profit targets. 'Softer' means they don't reflect things that have a direct and consistent relationship with revenue. For example, as a marketer you might be interested in the number of people who know about you (your Brand Awareness). Measuring this is useful because a higher number of people aware of you means your marketing is working. But what does this mean for sales? Harder to say. High Brand Awareness can lead to higher sales, but not all the time. It gets complicated.

This is why Brand Awareness is a 'soft' measures - it's useful to know, but the relationship between awareness and sales/revenue/profit is not always clear.

Marketers tend to live in this murky world of 'soft' measures for many of their efforts. And because of this, they need to pay close attention to how they measure things.

If I had to come up with a framework for Marketing KPI setting, I'd start with two broad areas:

1. Measure Selection - this is really a no-brainer. You have to at some point decided on what you want to measure. This is also hard to give general advice for because it's so situational. As a guide though, pick measures that are the closest things to direct consequences you can find. And if possible, build in feedback loops for these consequences. For instance, you don't want to set awareness targets for a viral campaign, just not going to work. Instead, measure referrals on your website with quick questions at the end of the purchase process - "Did someone recommend our product to you"?. Set baseline and measure the delta.

The general hierarchy of measure selection goes - direct consequences or immediate expected results (something was passed on, taken up); diffusion effects or secondary effects (I heard about that but didn't do anything); and tertiary effects or lingering attitudes (I thought it was good/cool/nice/interesting).

2. Measure Calibration - this is less commonly done well in my experience. The key here is to think about the absolute value of what you are measuring, how its value will reasonably be expected to change based on what you are doing, and if any change you see can be assessed as good or bad.

'Absolute' value (or 'real' value) means try and think about things in terms of concrete numbers, not percentages or in relation to other measures. If your brand awareness is 25% and the market is 100million people, 25million people are aware of you - this is important to keep in mind. Why? Because it affects the second point - how you expect this number to reasonably change. If 25million people are aware of your brand yet you propose tactics that, at most, might affect 500k people, and 25% of those are, on average, likely to be aware of you anyway, how many people can you expect to affect? Not too difficult to work out that you should be looking for less than 1% increase in awareness.

Of course for tactics that small, you're probably not going to have awareness goals - which brings us back to point 1!

In terms of assessing 'good' or 'bad' movements, this comes down to effectively using historical data and trends (although it depends on the measure as well). Markets are very fluid. All the time people are hearing about your brand, contemplating it, buying it, rejecting it, etc. This is all background noise. The general turmoil of life and commerce. You need to filter this out to see whether your tactic had an effect over and above this 'noise'. Admittedly, not always easy to do.
In fact, none of this is easy to do. It requires deep knowledge of many aspects of your market and your brand. And if not done carefully, is likely to get you in trouble as much as it can help you.

To bastardize a classic Simpson line - 'Information, the cause of, and solution to, all the world's business problems"...

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Some reliable Radiohead figures released by comScore

This recent press release from comScore shows the number and distribution of downloads for Radiohead's new album - the one they released online in a 'pay what you want' method.

Worldwide, 62% of people downloaded the album for free, 38% payed for it. Of those who payed for it, the average amount 'given' was about $6USD ($8 in the US). This is pretty much what I expected and puts to bed the rumors that the average price across everyone was $8. The 1.2 million was actually the number of people who visited the site during the time it was released.

The distribution of the sums given was pretty much as expected as well. Most people payed between $8-$12 with only just under a third paying more than $12. The $12-$20 price bracket isn't broken out further, but I would guess most of it sits between $12-$14.

So what does all this prove? There are some fanciful reactions to it on the comScore page. One pundit (Michael Laskow) reckons it is the death of the industry as few bands have the tenure and history of label support Radiohead does and therefore, for them, giving away music is not viable. It's actually the opposite. Giving music away is the only way future bands will create a fan base. Jim Larrison of Adify thought few people would pay and those that did would only pay a few bucks. Jim doesn't know anything about consumers.

My take is that is proves one thing only - that given worldwide publicity and a stated experimental intention by one of the biggest bands in the world, fans will come to their aid and successfully average their collective intentions to produce what is seemingly an optimal average price - $8 feels like what an album should cost if you strip away all the overhead. It does not prove that if you do this again you will get the same result and it certainly doesn't usher in the start of a new business model.

If other bands start doing this and it becomes prevalent, the average cost of 'pay as much as you like' albums will trend towards zero. Fans are making a point at the moment. They want to believe themselves that there is intrinsic value in music and they are willing to pay for it. But at the moment they have but one choice - Radiohead. As more choices appear (if this model takes off), this will spread their goodwill thin - they will either give less to each band or give most to one and take from others.

This is not a viable business model for the music industry.

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Enterprise marketing and Web 2.0

I came across this little gem of a print add on the back of the latest Economist magazine (pretty much the only off-line publication I read these days). It's a comparison of Oracle and SAP numbers for last quarter (despite the fine print saying that the numbers are actually from two different quarters). Oracle is obviously doing something better than SAP. That something is 'applications growth' - which sounds like its applications grow better (maybe they're fitter?).

It's complete drivel of course. It's a comparison of growth rates with no indication of market share for context so you have no idea who is actually performing better. It's a hell of a lot harder to grow if you are the dominant player.

What's really interesting though is the strategy behind it. This is a 'Leadership' strategy. Oracle is trying to convince potential customers of their leadership: that they are a viable choice; that they are beating out the competition; that they are doing this consistently. It's all about being the biggest, best, cutting edge, most innovative, etc, etc.

This strategy is repeated for almost every large enterprise software company and many banks, consultancies and financial institutions. There are slight variations on it of course: Royal Bank of Scotland talks about 'making it happen' rather than 'words'; EDS 'gets things done'. But by and large, it's all the same positioning. The term 'Thought Leadership' is a byproduct - the notion that in certain industries, you should be looking for companies with 'thought leaders' (people who push the intellectual boundaries of their discipline).

But how does this strategy play out in a Web 2.0 world where collaboration, collective intelligence, factual scrutiny, two-way conversations and openness are the new rules? Does Web 2.0 level the intellectual playing field? I think it does. You're just as likely to find consultants and industry 'thought leaders' blogging these days. And their facts being questioned. Which is a good thing. Too many of these pundits lived in rarefied air for too long. Writing undisputed and unchecked white papers. The white paper is like the anti-blog - a typically biased opinion piece filled with selective and dubious facts enshrined for all eternity as a pdf with no way of commenting on or questioning the numbers or argument.

Which brings us back to the print ad at the top of this post. One of the most unabashed, arrogant attempts to position a company as a leader I think I have ever seen. And it's like the white paper - unaccountable because it's not a conversation. Unaccountable to its statement, to its facts, to its implications. If the bar for this ad had been 'would I put this in a blog post and let people comment on it', it would never have seen the light of day.

I don't think the notion of being a 'leader' or 'thought leader' is incompatible with the 2.0 world, but the substance of strategy is very different to what it was 20 years ago. Companies like Oracle haven't grasped this if this ad is anything to go by. Enterprise software in general I think is going to struggle.

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Marketing speak, and how to avoid it

Something strange happens when you pull together a bunch of information about a product or service and sit down to try and write it up in a way that would pique the interest of a reader.

For some reason, you have this urge to over persuade. A simple 'this product does x, allowing you to do y and it will cost you z', becomes 'this revolutionary product x eliminates every barrier to y imaginable allowing you to do y at any time, anywhere in the world and costing you only z!'.

I was amazed at myself after re-reading some marketing material I had written that it sounded like this. And it wasn't even intentional (I wasn't trying to be too persuasive)!

Marketing speak creeps into our heads because that's all we hear. It's a vicious cycle. The more we hear it, the more we think it works, the more we use it. Here is a sample from a leading Business Intelligence company - this is posted on their website (company named removed to protect the innocent).

XXX is the first and only business intelligence (BI) platform to deliver a complete set of market-leading, end-to-end BI capabilities: best-in-class enterprise performance management (EPM), dashboards and visualization, reporting, query and analysis, and enterprise information management (EIM). XXX introduces significant innovations that deliver BI in new ways to a broad set of users.

It's 'complete, end-to-end, best-in-class, innovative, new and broadly useful'! As well as introducing us to THREE acronyms in one paragraph!

I was thinking how to reconstruct this to make it less vomit inducing and I came up with:

XXX is a business intelligence platform that delivers a complete set of enterprise tools - dashboards and visualizations, reporting, query and analysis, performance and information management. We deliver a best-in-class solution that's innovative and accessible to a broad set of users.

It's more understated, less direct and certainly less 'loud'. The copy that carries a quiet confidence? Maybe I am over thinking this a bit...

Then again, the original probably sells more stake knives. Someone is making a killing from stake knives. I'd love to know who that is.

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Update: Radiohead album sales

So since the Gigwise announcement that Radiohead had sold around 1.2 million downloads, the band's manager, Bryce Edge, has called that figure 'exaggerated' - despite that number appearing on a few widely read and influential blogs. However, in the same article he did say that the average price ($8) that was reported in the press was about right.

A survey done by an industry newsletter and reported here in the Times, indicates that the average price of $8 is about right, but that a third of people who downloaded the album paid nothing for it. That seems strange.

If a third of people paid nothing for the album, then the remaining two thirds would have to have an average price of around $12. This seems high. If you assume that few people are going to put down the actual price of a CD ($14 or higher), then the vast vast majority of people (who put down something more than $0) must have been plunking down $12-$14 on it.

I say no way. That would make for a very skewed price distribution. And in my experience, these things tend to follow more predictable patterns.

I guess we are only going to know once Radiohead releases their sales data. Which I hope they will. And, I hope they will release it to one of the public data sites such as Swivel - would be great PR for both of them (not that Radiohead really needs more PR).

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Springboks win the Rugby World Cup

Congratulations to the South African national Rugby team (the Springboks) on capturing the 2007 Rugby World Cup. A well deserved triumph.

Watching the game, it was difficult to say that England put up a good match, but that doesn't take anything away from the Boks. They played well and did what it took to win.

I am going to go out on a limb here and predict a New Zealand win in 2011. No team can perform so consistently bad in one tournament. We are due!

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The problem with nutrition information

We recently took a kind of photography trip to Vermont to see the Fall leaves in 'bloom'. My wife is an avid photographer so this is the sort of stuff she lives for. I, on the other hand, am partially red-green color blind. Fall leaves look various shades of unusual green to me. My wife assures me I am missing out on a lot.

On the drive up to Vermont we took one of the toll roads north. A toll road in America is an interesting phenomenon. It is usually slightly better than your average non-toll road and along its stretch are various places to stop and rest. All these rest areas look exactly the same (and are unusually symmetrical in construction - I once walked out the opposite entrance and thought our car had been stolen as the front and back parking lots looked identical). And they all contain the same types of fast food outlets.

We don't typically eat a lot of fast food but we hadn't indulged in a while and were in a hurry. So we rolled up to the nearest McD's and ordered our usual. After getting it and sitting down I noticed, for the first time, the nutritional information on the box. Below is a picture of the Quarter Pounder's info:


My first instinct was to throw up. I realized this stuff was bad for you, but not quite that bad. And I now understand why these companies were so keen to keep this information off the box.

In studying it more though, it struck me that the display of nutritional information is woefully inadequate if you know nothing about nutrition. For instance, the only information that gives you any context is the Percent of Daily Value (PDV). But what if you had heard that saturated fat was an important component of your diet and you needed to make sure you hit your daily quota? You'd be loving this meal. It's a one stop saturated fat mecca. Cholesterol only 30%! Great, I have only two other meals in the day and 70% to play with! And on top of that, it is low in carbs and low in sugar. And wow, 30% of my calcium! I can forget that glass of milk in the morning now as well.

Of course, this is all wrong. This is one of the most unhealthy meals you can have. But from this nutritional information, that's not easy to conclude unless you already know a bit about health and food.

Information without the proper context is useless. The extent to which you give it context can be more or less complicated, but it needs to be there.

The UK has recently implemented a 'traffic-light' labeling method for food products sold in stores. I think this sort of thing is a move in the right direction. It at least tells you the relative 'goodness' of high or low values of certain ingredients.

A better system would be one more tailored to your own health needs. People with a high risk of heart disease for instance, should have a different set of saturated fat criteria. Women who are pregnant should have alternative priorities. Likewise people with liver problems or even people just looking to lose a bit of weight. How such a system would work is a harder question.

But whatever is implemented, the good old Quarter Pounder should probably have a skull and cross bones beside it - 'a real and imminent chance of death if consumed in excess'.

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Breaking Radiohead album sales news!

Gigwise has an article on some breaking news about the Radiohead album sales experiment. This is pretty preliminary and has net been backed up by any official word, but it looks like the album sold for an average 4 pounds (about $8USD) and they have moved approximately 1.2 million copies.

4 pounds is pretty close to the $8-$9 I predicted in the post below - so maybe I have a future in forecasting after all!

The comments on the Gigwise article aren't all that kind to the story, so this could still change (it seems Gigwise will post anything to get a bit of traffic).

Will be interesting to watch as more results come out.

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The problem with Raidioheads's latest experiment

I downloaded the latest Radiohead album today. It's not bad. Very mellow. I think I definitely got my money's worth.

What did I pay for it? $10 USD. Why? Because an album in the US costs about $14 and I thought I would pay a little less as I know there is not a lot of overhead on the product. And therein lies the problem with this experiment. A problem that you encounter any time you let a consumer make a price decision - they try to put it in context.

In this case, the context most people will use is the standard $14 for a CD (I think it is about the same in pounds in the UK). This is an effective ceiling for most people - why would you pay more? We've been trained to believe that even the best albums in the world are $14. And, of course, the worst ones are worth that as well. Given this, the average price of a new album where you let the customer decide has to be less than the $14 context - you are always going to hedge slightly by paying less just in case the quality is indeed poor.

And if the album is great? You got a bargain. And I agree with Joseph Jaffe that Radiohead should have a follow-up option for people who want either their money back or to pay more - they might be surprised at the results.

I'm prepared to put my forecasting reputation on the line here (which is not much as I don't really have one) and say that the average selling price of the Radiohead album experiment will be $8-$9. If 5 million people download it, not a bad return.

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Rugby World Cup Disaster

Ok, since I posted about the Rugby World Cup's tournament structure, it feels appropriate to inform everyone (not following the competition) that New Zealand lost in the quarter finals to France.

While this fact is of minor importance to most people - maybe enough to elicit the odd raised eyebrow or semi-interested nod of the head - it's a soul shattering, life ending, world concluding disaster for most New Zealanders. Rugby is a akin to a religion in New Zealand.

So how do you take a loss like this? What can we do to console ourselves? After much soul searching, I've decided to take a leaf from the book of the New York Yankees - the self proclaimed 'winningest team in history' - when you need to feel good about yourself, pull out the record!



That's right, the numbers don't lie. The New Zealand All Blacks are the 'winningest' team in the long and rich history of the sport. That 's an impressive record. And one I think we can feel proud of.

It's that history of winning that will sustain us in these dark times.

(ok, that last line is a little melodramatic)

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The value of 'free'

Interesting and thought provoking piece on the BBC website today. It talks about the value of 'free' - is the increasing prevalence of free goods undermining their cultural significance? Radiohead's latest album release is cited as an example - they are giving away their album as a digital download on their website. Not entirely free, but the consumer can name the price.

Some of the article's premise is based on this quote from Julian Baggini, a philosopher (and fellow blogspot blogger):

"When we pay for something we are showing commitment in a very practical way. We put something of ourselves - in this case money - into whatever it is we want. And by paying for it, we are proving to ourselves that we value it."

I take issue with this - paying for something only involves a commitment if the price we paid comes close to exceeding the utility we expected. When this happens, we justify the expense with, often delusional, utility increasing valuations - the $200 I spent on my new bedside lamp was worth it because of the amazing light enhancing design that helps me read without straining my eyes! When in fact the $20 lamp probably does the same thing. We add value to the valueless when it costs us a lot due to our dislike of cognitive dissonance. Psychology 101. And of course the utility I add to my valueless lamp is in direct proportion to how I value money! Basic Economics 101.

So in our modern world, where mass consumerism has driven down the prices of cultural goods (e.g. music and books) to such a degree that they are essentially very cheap (bordering on free), what we pay for them needs little justification - $14 for a CD is not something you are going to lose sleep over. If they are free, even less sleep is forgone.

My point here is that there is essentially little difference between free and really cheap for these goods You have to get to a much higher price bracket before you start to add pseudo value and show commitment to justify a purchase.

What's wrong with Baggini's analysis then, is that price is just a poor proxy for value in this case. A better one would be some combination of time and attention - because that is what cultural goods really cost us. And time and attention, in this day and age, is of increasing value.

If you accept this, then 'free' cultural goods aren't in danger of devaluing culture because we're spending scarcer resources than money on them - our limited attention spans and decreasing free time. A thousand years ago the reverse was true - wealth was scarce and attention was abundant.

The irony is that the challenge for producers is to turn that attention and time back into money. I am sure the record industry longs for those heady days of feudalism!

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Good design helps small businesses

We've been searching for an Accountant for our business for a while and didn't really get many good leads from recommendations. Accountants are a funny lot, many seem to ignore the fact that they are in the client servicing industry as much as the financial industry.

And if you search the web for local accountants, many of the sites look like they were built by used car dealers - tacky, hyped-up, and kind of sleazy. So I was really happy to find M.H Financial Group, in the depths of New Jersey.

Michael and his team decided to take a different tactic to small business marketing. Instead of doing everything on the cheap, actually invested in a very nice, professional web presence that leaves a strong impression of the type of company they are. An impression strengthened when you walk into their business and see the new carpets, mahogany desks, leather chairs, great lay-out and comfortable atmosphere.

Of course, as Michael himself pointed out, none of that matters if his services are bad (which they are not). But it matters greatly when a customer is deciding. All of this gets him and his firm on a very short list. Getting on that short list is the hardest thing for a small service business to do.

This is the power of branding, and it works, no matter how small you are.

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The value of an idea

I was sitting down with my fellow co-founder the other day and we got to talking about the philosophy of ideas. Specifically how you value them.

It was an interesting conversation. My takeaway was that your perceived value of an idea is in direct proportion to the difficulty you would have had coming up with it yourself. Thus, creative ideas from your accountant about how to avoid unnecessary tax are more valuable than fashion advice - it's not hard to figure out what looks good, but it's tough to avoid the IRS.

If you're pitching an idea, you need to reverse-engineer this argument. You need to present a simple idea with a complicated or difficult creation path. This gives the idea scarcity - originality borne of difficulty, not newness.

Scarce ideas and new ideas can both have value, it's just easier to see the value in something that LOOKED like it took effort to achieve.

One of these subtle, but important points.

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You can't be serious?

I just had to mention this news story that popped up this morning. It looks like Kolcraft (makers of various baby gear) is pulling some of its playpens from the market. A 10 month old apparently choked himself to death while playing in one.

Now normally the odds of this sort of thing happening are low - these guys make baby products and are obviously interested in keeping them safe. In this case though, it's amazing this is the first incident. If you look at a picture of one of these playpens, it essentially has a noose hanging in its center!

In the picture below, imagine the strap on the top flipped over to hang into the pen when the top basket is removed (there was actually a picture of it hanging down on TV but I couldn't find one online).


It boggles the mind that the guy who designed this didn't think about the possible ramifications of a loose noose-like strap hanging in the middle of a baby's play area! They should have just labeled it the 'playpen of death' and had a pit of crocodiles to remove the lifeless body come as an accessory.

This is one of those cases where you can obviously see the problem with hindsight, but still fail to imagine, without hindsight, how the issue was missed.

It's the sort of thing I dread happening with our software product - some serious design flaw that is a major game-breaker. Of course, we won't be killing babies so the stakes are a bit lower.

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Rugby World Cup points spread

This is a graph of the current points spread in the Rugby World Cup - being held in France. This is actually points differential - points scored minus those conceded.

It's sort of ridiculous that the top 20 teams in the world can be separated be such large differentials, and that that there are countries in the World competition that don't really have serious domestic leagues (or any leagues at all).

And for those of you who don't know much about rugby, getting outscored by 100 points is a very big deal! You kinda suck if that happens.

I wonder how many years this will go on before the World Rugby Commission realizes that they might have to design a new format? I'd rather see the top 10 teams in the world play a set of series against each other that decide the semi finalists than see the top teams walk all over weaker countries in a one-sided affair.

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Losing My Virginity

I just finished the Richard Branson autobiography, Losing My Virginity. I can't remember who exactly recommended the book to me. I think I might have read a blog post about it somewhere - so apologies to the forgotten source!

Bottom line, an interesting read. Are you going to learn Richard Branson's secrets from this book? Does he reveal the reason behind the seeming madness of his professional life? Are you going to come away with the knowledge to build a global brand in disparate industries? No, no, no and no.

But you will find out a lot about how the Virgin empire was built and even more about the remarkable life Mr Branson has lead. I think he should be the ultimate inspiration to all entrepreneurs. His belief in his own instincts is only surpassed by the belief he has in others - and the love, yes love, he has for everyone who works for him. His impeccable business ethics. His love for his family and children. His dedication to social causes and his adoration for small furry creatures everywhere.

Ok, that was one was laying it on a bit thick. My point is that yes, he seems like a pretty nice guy from this book, but maybe a bit too nice. No one can be that perfect. Although maybe he comes close? I really don't know, having never met him I don't want to pass judgment. But he is now in the top ten people I want to meet before I die.

He fascinates me now largely because I know there is some serious complexity there - you can read it between the lines of every paragraph. But none of it emerges in the book. His hopes, fears, desires, etc, are all there, just never explicitly addressed. It's like reading about a biblical character in the actual bible - you get their story, but only as part of a larger narrative, never as a personal journey. And no, I am not comparing Richard Branson to Jesus Christ, although they have both laid claims to the Virgin Births name at various times in the past.

Bottom line, an interesting read. Definitely recommend.

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Using online applications

As part of our business, my business partner and I have been using many of Google's online applications - a word processor, spreadsheet program and now a presentation program. These applications can be located in the app area of your Google account (you have to have a Google account to access them).

By and large, they are good. The functions they have are useful, although they do lack some of the more sophisticated formatting and mathematical functions present in their off-line counterparts. Despite this though, a major consulting firm recently signed a deal with Google to get these online applications used by more businesses.

This move is good for us. Google's applications are an example of something called Software as a Service (SaaS) - where you use online software services rather than download and install software. The software tool we're developing works in this way (kind of).

However, having used Google's applications quite a bit over the last couple of months, the experience isn't without problems. The biggest one is feedback - it's just too slow. Things that you do with a swift two key-stroke combination or a couple of menu choices in Excel or Word that are executed instantly, have a constant delay in Google apps - which gets worse the more information you have on a screen.

It feels like a big step backwards in terms of design, which is sad.

It vindicates a decision we made when we began development of our software tool - we decided to build a SaaS tool that worked on the desktop, not in the browser. With the UI on the desktop, there is no user lag and you can create a much richer experience. Significantly richer. Check out this example.

Even with all the advances in web technology over the last few years - mostly targeted at improving the user experience - the browser is still a straitjacket for really good design.

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Iraq and prediction markets

So having read through the Greenstone article, he does put some caveats around the use of Iraq government bonds as a predictor of the success or failure of the surge. Most notably, he admits that the market reacts to the same information we all have - making it, in my opinion, vulnerable to the same errors and biases. Of course, he argues it's the size of the market and the more rational opinions that make it better at predicting the outcome. More 'rational' as traders are only interested in the future income stream from the bonds, they have no other vested interest one way or another in the outcome.

All things being equal, I would rather place my bets on the collective wisdom of bond traders than any of the opinions on Iraq coming out of the US government - I think that is a given. I would also trust the traders more than, say, a poll of American citizens - most don't understand the war and just parrot back the media spin.

But I still wouldn't put a lot of money down. Why? Because the situation in Iraq is too dependent on Black Swans - the name Taleb gives to highly unpredictable but game changing events. A single incident (the bombing of a holy shrine, the murder of a political figure, a massacre, etc) can turn the course of the war. These incidents are hard to predict. No amount of public information helps. No amount of rational, unbiased assessment helps.

Because of this, the nature of the problem in Iraq is, in my opinion, ill suited to a prediction market. The prediction might be less biased, but it's not necessarily any more accurate.

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Microsoft can be cool...

http://www.microsoft.com/design/Default.aspx

In their own sort of 'Microsoftie' way.

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Economist discuss Iraq data

The Freakonomics guys link to the following report by economist Michael Greenstone. He takes a pretty detailed look at the recent data out of Iraq to try and come to a definitive answer regarding the 'surge' (the increase in US troops since January).

Firstly, it's good to see someone with a lot of experience in information assessment try to tackle this question. Secondly, it's good to see someone who (I assume) has no political axe to grind entering the debate.

I haven't read the whole article yet, so might get to a longer post about it later.

The first thing that struck me as a bit strange though was Greenstone's faith in the predicitive power of Iraqi government bonds. He states:

I examine the price of Iraqi state bonds, which the Iraqi government is currently servicing, on world financial markets. After the Surge, there is a sharp decline in the price of those bonds, relative to alternative bonds. The decline signaled a 40% increase in the market's expectation that Iraq will default. This finding suggests that to date the Surge is failing to pave the way toward a stable Iraq and may in fact be undermining it.

The logic makes sense - bonds represent future income so their price can be indicative of the likelihood of that income eventuating. However, why do the people trading these bonds have any better sense of if or when Iraq will fall/fail? The don't. They watch the same news broadcasts and read the same information you and I do. Their opinions suffer from the same biases their sources do. So do ours.

I guess there might be some merit in the averaging effects of a large market, but that just means you come to an average estimate, not a better one.

You just have to look at oil futures pre Iraq war to see that no one in that market was predicting what would come.

I'll read the paper and see what else he says. I think he makes some other very useful points. I guess I'm just not a fan of prediction markets. They are basically gambles. You may as well say the odds of a horse winning are best represented by the win and place money. You could bet that way, but you're never going to make much. I have 15 years of watching my father bet on horse races to back me up!

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Vista Bashing

I just read this post about Microsoft's Vista operating system. It adds to the increasing negative 'hype' about this OS. Which is fascinating, as I have been using Vista for weeks now and it's fine.

How did Microsoft let this type of negative PR about Vista run amok on the Internet? It's obviously difficult to control this type of thing, but this product is actually good! It has many useful advantages over XP - more stable (yes, not one crash and I can leave the OS on for days with no memory leaks), a better UI, looks nicer, easy to find programs, etc, etc.

I was talking to an IT manager friend of mine the other day about this, and it turns out he is a classic example of how the hype hurts. He was initially very skeptical of Vista because of the negative press. Refused to use it after the 'verdict' on it seemed to be bad. He recently installed it on a few computers and to his surprise found it to be a great system! He runs a lot of computers and his failure to buy Vista was because of bad PR, not because he tried the system and hated it.

If Vista ends up selling badly, as it seems to be, it's not because the product sucks. It's because the Marketing does. Microsoft's Marketing leaves a lot to be desired.

What should have they done? Might be a good topic for the next post.

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Lies, dammed lies, and Iraq statistics

Over the past couple of days, General David Petraeus has been presenting his version of the 'situation' in Iraq to various congressional committees. I sat and watched some of this testimony and was impressed to see the General use a wide array of charts and graphs to back up his claims of positive, but limited progress.

I have no particular political axe to grind, I'm all in favor of a solution over there, whatever that turns out to be. But one chart in particular did interest me. It was this one (sorry about the quality):

If you can't read it, this the number of attacks in Iraq (from top to bottom) against infrastructure, from IEDs (found and exploded), sniper and small arms attacks, and mortar/rocket attacks.

The General used this chart to support the notion that the surge (the increase in US forces since Jan, which peaked in Jul) is working to reduce attacks. I think it is, but how is it working? Have the increased offensive actions of US units destroyed the ability of insurgent groups to mount these attacks? Or has the increased number of US troops just made it more difficult to carry them out?

Either way it's a good outcome right? Well yes, but also no. If it's the former, you are destroying the capability for future attacks. If it's the latter, you are curbing attacks in the immediate future, but not really in the medium to long term - you're just putting your finger in the dike so to speak.

In the testimony I saw, the General didn't really elaborate on which mechanism was at work. There was no accompanying graph of captured or killed militants. And no indication of militant numbers who just went back home to sit out the surge because their chances of capture were higher.

So what can the graph itself tell us about which mechanism might be at work? One interesting observation is of the steepness of the decline post July. If militants were still going flat out to bomb and kill US troops and civilians in that post July period, even with the surge and very successful offensives by US troops, you wouldn't expect the decline to be so steep. Why? Because it's been shown in the past that these attacks can be carried out with relative ease and despite heavy US troop presence. If the surge was slowly eroding away the ability of militant groups to launch attacks, you would expect the decline to be less steep - more of a gradual fall.

More likely, the militants have just stopped attacking. They are having a bit of a rest. Re-grouping and waiting for the right opportunity to begin in earnest again. This is far more likely to be represented by a steep, rather than gradual decline in these numbers. Given the sheer amount of activity from Jan to May 07, you would think a rest would be in order!

If this is the case, the force reduction plan might just be 'taking the finger out of the dike' enough to cause a new flood of violence. Let's hope not

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Rugby World Cup started this weekend

The Rugby World Cup started this weekend in France. For those of you that don't follow International Rugby, this competition is played every four years and involves 20 different teams (selected from past World Cup performance and various qualifying matches).

New Zealand won the inaugural Cup in 1986, and we've come close, but never quite triumphed since. Suffice to say, most New Zealanders feel they are well overdue.

Rugby is almost non-existent in the US. You get the occasional mention on TV, but it's largely ignored. If you didn't follow it over the web, you would never know the World Cup was on. Which is a shame, as there is actually a US team in the competition (although they are pretty bad).

As a sport, it's almost impossible to break through the Baseball, American Football, Basketball trio here - those sports are such an important part of the fabric of US society. There isn't really room for anything else. But the same goes for Rugby in New Zealand and Soccer in the UK.

Sports are the ultimate brands in a way - people devote huge amounts of time, effort and emotion following their teams and will willingly dish out significant sums of money for the privilege - sort of like Apple enthusiasts (poor sods).

So spare a thought for me as I sit in my $150 All Black replica top (that cost me $30 to ship from NZ), sipping $40/case NZ beer watching the World Cup on $25/game pay-per-view. If we win it was obviously money well spent! If we lose, I will be looking for a refund.

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If you're going to have a consumer forum, moderate it

I've been looking at a lot of small business websites over the past week as we're looking for alpha clients for our software. Having an unmoderated forum is the most common 'web' mistake I've seen. Check out this unmoderated forum from the NY Flower Market Association (warning, link contains offensive material).

Bottom line, don't use unmoderated forums. Spam is like sand - it always seems to find its way into the smallest of places.

At the very least, require people to have a verified account before they can leave a message!

I am sure this is not the kind of image the Flower Market Association of NY wants to project.

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Riding the NYC subway for the first time

I just cracked up when I saw this post over at Scott Adams blog (the guy that does the Dilbert cartoons).

Just an excerpt:

To ride the subway, you must purchase a card with a magnetic strip. You learn this by observing other people “in the know” swiping their cards as they enter the turnstile. There are many options for what type of card you might want for particular purposes, and no apparent posted instructions. Luckily, you can ask for guidance from a helpful person who is behind thick glass. This transaction involves mumbling, rushing, condescension, the supposition that you are a moron, much evidence to support that assumption, and eventually the exchange of money for a little card that may or may not have some application for riding the subway.

It's possibly the worst designed system in the world. I experienced pretty much all of what Scott is talking about when I first moved to NY.

I even get lost after 4 years of using it! And I have been with 'natives' who have managed to get lost.

If you're new to the city, NY has this way of making you feel you're the butt of some cruel joke. I think Scott is just finding this out.

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Swivel in the spotlight

Nathan, over at Flowingdata made a post recently about some of the shortcomings he sees in the Swivel concept - Swivel is site that allows users to upload, share and comment on data. I've mentioned Swivel before, along with some of the other sites trying to make a name for themselves in this area (ManyEyes, Data360, BO Insight, Freebase).

I think Nathan hit on a few good points - poor visualizations, statistical validity and data quality.

I agree that the visualizations could be improved, but you don't need an expert in this area - there is a lot of literature and commonly held 'norms' that good sites and products adhere to. Follow these and you should be fine.

The whole issue of statistical validity and data quality is tied up in the larger question of what does Swivel want to be? Adhering closely to the world of statistics and enforcing strict quality requirements will make the site less accessible to the very people it wants to attract - non-statisticians. But not doing so makes it more susceptible to comments like Nathan's, and potentially undermines confidence in the site.

Is there a happy middle ground between validity and accessibility? Probably. But is it a compelling proposition? Not really.

It's not compelling because, fundamentally, DATA is not compelling. Accurate or not, DATA is boring. I know, I've been presenting data to people for years. They could really care less about it. What they do care about is what it allows them to DO. Data is just an input into a decision, a thought, a process. It's meaningless without a context or as an end in of itself. The guys at Swivel know this. They write about their featured graphs in a way to promote context. But unfortunately, the discussions don't seem to take hold. Why? Because if I want to debate interest rates, hurricane Katrina or suicide in the US, I am bound to find specialist sites with more interested parties elsewhere.

As a result, I see Swivel stuck between being a specialist site about data (which is not compelling to anyone but statisticians), and being a generalist issues site driven by data (which is mildly compelling to everyone else, but not particularly compelling to statisticians (although we don't really care about what they think :)).

So what to do? My two cents follow:

• I'd move to shore up the validity and quality of the data on Swivel, and put more emphasis on people embedding and blogging about it in their own forums, rather than trying to have the discussion on the Swivel site. I know this is a pretty big departure from what Swivel is trying to do. But at this stage, I think it's a far more compelling 'tool' than 'destination'.
  
• In keeping with this theme, I would really put emphasis on improving the visualization tools. It would be great to have Swivel as the default source for all data visualization in blogs.
  
• Definitely concentrate on the Official Data source program. I love the idea that there is a site I can go to get data that I know comes from a reputable source.

But above all, keep trying Swivel guys. There is definitely something worthwhile in what you are doing. And I hope you can make a successful business out of it.

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Service on your terms

Scott over at the very insightful Artificial Simplicity blog has a great post on service expectations in the Internet world. He sums up 'service' as:

• Free
• Fast
• Accessible 24/7
• Hyper-relevant in terms of specific times, place, situation, product
• Connected to as many venues as possible
• Configurable/Customization: reorganize info the way you want it
• And ideally Smart: Learns your preferences and improves through usage

I think it's a pretty good list.

What intrigued me the most (and why I left a comment on his blog) was that we now expect these elements to be present in many of our real-life interactions - I'm less willing to pay for service (I can do myself), don't want to wait, want things to be connected to other tasks/information I need, and don't want to go through the same steps each time to reach my goal (configurable service).

Case in point. Each time my cable modem goes down (and this has happened a few times for varying reasons), I have to go through the same steps over the phone with the tech rep. Even when it might be my third call that week! Same steps... same boring routine.... despite me telling them it didn't work last time. The human on the other end of the phone might be good at keeping me engaged and talking and trying to deliver that good'ole service with a smile attitude, but they are not great at learning from my past experiences and configuring the service to my needs.

It's strange, but there are so many examples where I feel a computer is better at the job than a human. I never always felt that way. It's the Internet that has done it to me. For better or worse? Interesting question.

I'm consumed by these things at the moment as we're still in development stage for our software service. Interaction, design, work-flows etc. - they all need to be thought through. Scott's post about Internet Service gives clarity to many of these things. I'll post about some of them as they get more fully developed.

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