PlayerSearch Blog

by Ted Kasten, Founder of PlayerSearch

Vertical Ad Networks – Huge potential for a good reason

PlayerSearch partners with Fantasy Sports Ventures to serve our sports focused ads, many tech sites partner with John Battelle’s Federated Media and many women’s focused sites partner with Glam Media. It appears that FSV is going to be the dominant ad network for sports sites. They have 90+ sites signed up, have raised a good amount of capital and, most importantly, they have the right rolodex full of contacts at the large brand advertisers from their 10+ years of experience working with the NFL. Oh, and they have no real competition at this point…that helps! In an interview with CNET, John Battelle makes an interesting comment about the range of CPMs that vertical ad networks can provide. This seems to apply very well with my positive experience so far with FSV.

John Battelle: “The industry is really good at direct response advertising on-line. The problem with vertical ad networks is that until you have engagement, integration, and proof of that consumer awareness, you are just going to keep devolving down to direct response pricing, which is sub $5 cost per thousand (CPM) for an ad.

We want it at the kinds of CPMs that supported the magazine and the cable industry, which is above $20, $30, $40, $50 cost per thousand. Advertisers will pay that once they feel like they’re getting that value for it, and once the media is created that proves that value, and it’s not just the publisher’s job to create that media, it’s the publishers working in partnership with the marketers and that what we try to do it with them.”

Techcrunch covers this interview here.

With Google AdSense a small site can hope to get about $1 CPMs…FSV has done an excellent job in less than a year of executing on direct response banner ads, as John describes them, that garner about $5 CPMs. So FSV immediately adds value to their affiliates by doubling the CPM that we could get otherwise. One of the challenges I see with any vertical ad network is that the quality of each site varies dramatically…so 2+2 is still 2 in many cases – marketers don’t want their brand/ads on poor quality sites and if that happens they certainly aren’t willing to pay a premium CPM for it. So adding up 10 million page views across 100 sites is not as valuable to marketers as going to Yahoo or MSN and getting the same reach on a single site. And as John points out, the engagement brand advertisers are looking for is currently very fragmented on most networks.

PlayerSearch brings a very unique value proposition to the FSV network. PlayerSearch can direct traffic to each affiliate by including their content in the search results and can improve their site to keep their users coming back more often by providing a much better search experience for their users…both actions increase page views for the affiliates which increases ad revenue for both the affiliate and FSV (FSV wins twice…once by serving ads on the search results pages and a second time by serving ads on the affiliate sites that receive the traffic from the search results; this is not unlike Google that wins twice as it serves Google AdSense on many sites that it sends traffic to). In addition, the high quality content (human editor approved) and user interface provides a high quality advertising environment for brand marketers. Once we are able to build the reach (assuming it is a matter of when, not if!!) we can work with the brand marketers to create high value promotions beyond banner ads that are worth the $20+ CPMs that John is talking about. That is the potential and the goal…now we just need to get there!

March 21, 2008 Posted by | Vertical Ad Networks | , , | 3 Comments

Sequoia Capital’s Elements of Sustainable Companies

I recently came across a post on Techcrunch that linked to Sequoia Capital’s Elements of Sustainable Companies. Here are the elements:

How I see this applying to PlayerSearch/Advanced Sports Media is in italics after each category

Clarity of Purpose: Summarize the company’s business on the back of a business card.

Aggregating sports content from around the web and making it searchable by player, team or topic.

Large Markets: Address existing markets poised for rapid growth or change. A market on the path to a $1B potential allows for error and time for real margins to develop.

60 million sports fans on-line (as of fall 2006).

Rich Customers: Target customers who will move fast and pay a premium for a unique offering.

Free offering…but the target customers are highly educated males between 21-45 with above average household income according to the FSTA market research.

Focus: Customers will only buy a simple product with a singular value proposition.

PlayerSearch…search for player…simple enough?!

Pain Killers: Pick the one thing that is of burning importance to the customer then delight them with a compelling solution.

So much great sports content on so many different websites that it has become impossible to keep up with your favorite players and teams while holding a real job, being a good husband and taking care of the kids. Ego is also of burning importance to our customers as true sports fans want to be the first to know everything and every player.

Think Differently: Constantly challenge conventional wisdom. Take the contrarian route. Create novel solutions. Outwit the competition.

1,000+ great content sites and blogs focused on sports content with new sites appearing every week. 1 sports content focused search engine – PlayerSearch.

Team DNA: A company’s DNA is set in the first 90 days. All team members are the smartest or most clever in their domain. “A” level founders attract an “A” level team.

This is a tough one as it was only me for the first 1,045 days!

Agility: Stealth and speed will usually help beat-out large companies.

Three guys in shared office space is about as agile as it gets.

Frugality: Focus spending on what’s critical. Spend only on the priorities and maximize profitability.

See “shared office space” above!

Inferno: Start with only a little money. It forces discipline and focus. A huge market with customers yearning for a product developed by great engineers requires very little firepower.

Done. Not necessarily by choice!

I think this is a good list. No list is all encompassing or perfect for every start-up or industry, but if you had to boil every key element of starting a sustainable business into a top ten list I think this is a good one. It is clear and concise and fairly specific while covering a lot of different areas of a company from the overall market to the customer to the product to the team. Good stuff!

March 20, 2008 Posted by | Entrepreneurship | | Leave a comment

The Man In The Arena

Inspiring words from Theodore Roosevelt that certainly apply to entrepreneurship:

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

March 20, 2008 Posted by | Entrepreneurship | Leave a comment

Mahalo Adds Social Search Features

Jason Calacanis, the founder and CEO of Mahalo.com, unveiled My Mahalo at SES New York today. His product demo is available here. Mahalo has obviously done a lot of work to integrate there search with social networks and other web 2.0 services…very impressive. The part of the demo that struck me the most was the screen shot of Google.com with Mahalo content injected within the results and on the right side of the results (sans google ads???).

From Search Engine Strategies (full post is here):

Users who have installed the Mahalo toolbar will be asked when they visit another social media site whether or not they’d like to import their content from those sites to Mahalo. Then, when users search on Mahalo, they will be presented with content first from their friends, followed by the most trusted Mahalo users. Mahalo users build trust by recommending links, and by having those links accepted by the Mahalo guides and added to a page.

“We’re not competing with social networks. We see ourselves as the bridge between social networks and search,” Calacanis said. “We’re building a system where people can openly help each other and share.”

The openness and sharing that Mahalo is trying to tap into is amazing…if it works it will be very exciting to watch.  The potential to make it blazingly easy for users to combine web services from different individual sites to improve their web experience is amazing to think about.  There are a lot of great parallels for the sports world…

March 19, 2008 Posted by | Mahalo | , | Leave a comment

Like the boiled frog, Google is slowly becoming a destination site…

…as soon as they integrate Double-click, my bet is this pace will quicken. Comscore released preliminary data today during the Orion Panel on Universal Search at SES that showed users clicked on links and ads less often when universal search results where included along with the ten blue links. This is not surprising as Google has begun injecting content into the search results such as video, news, stock charts, etc., all of which “get the user to their answer faster”. That is good for the user on the surface…but clicks on ads drops as well which is bad for revenue…unless you replace those CPC ads with CPM ads (enter Double-click). There are three basic types of search – navigational, informational and transactional. The transactional search (Cars) is ideal for CPC and represents the most profitable search category for Google. Informational searches (News on Brett Favre) are not as profitable using CPC monetization and my bet is that Google will start experimenting with inserting CPM based ads from Double-click into informational search results to increase revenue per search.

As John Battelle points out here, over the past few years Google has added YouTube, Google News, Google Maps and Knol…all destinations and all falling into the category of “informational” searches. Google is becoming a destination just like Yahoo. They are a media company and want to keep their users attention in order to increase ad revenue. Knol is a perfect example…Wikipedia is hugely successful…Google is not content with capturing the search revenue generated by simply sending users to WikiPedia. My guess is that most searches that end up at Wikipedia are informational searches, so these searches are not as profitable for Google. By creating its own version of WikiPedia, Google can keep this traffic and monetize it beyond the search results page, or the “second click” as John Battelle refers to it (and my guess is with CPM ads).

Universal search is, in theory, better for the user if they find their answer faster. However, if Universal search places preferential treatment for Google content that may be inferior (Knol, Google Finance) to the content on other sites (Wikipedia, Yahoo Finance), then the user ultimately loses. This also sets search back ten years when “sponsored” search results where always at the top of search results and users where uncertain if they were clicking on a link because it was the best result or because that publisher paid for placement. Part of why Google beat all the other search engines was because they clearly delineated between organic and paid results. Google is becoming its own sponsored result and walking a fine line with objectivity in its results.

March 19, 2008 Posted by | Google, Search as Destination, Universal Search | , , | Leave a comment

Wikia Search, Mahalo and Google

Jimmy Wales (Wikia) and Jason Calacanis (Mahalo) were on a panel today discussing Human-powered search (Wikia and Mahalo) vs. Algorithmic search (Google). Jeff Jarvis of Buzz Machine was live blogging here and the Long Tail blog covered it here.

A couple of comments caught my attention:

“Jason says he has 60 fulltime people and 400 freelancers.”

That is a lot of people!

Jimmy Wales: “If you’re going to come in the search space you need to invest at least $50 million to do this… This is not for the faint of heart.”

I have heard that $50 million is probably on the low end if a company is going to build data centers to index billions of pages frequently and complex algorithms.

Marrissa Meyer (from the front row of the audience): “that there’s a false-dichotomy to look at this as all algorithmic or all human”

Couldn’t agree more! One size fits all for only so long…

Jason: “the [short head] will be human, the [fat medium] social, the long tail algorithmic. And he says that the advertising interest is in the [short head].”

This is a great line. The short head has always been human and long-tail certainly requires algorithms…the interesting comment is about the fat medium being social. Thinking about the user submitted content and sharing options that we are building for the beta release of PlayerSearch, I think this is fairly accurate. We already include all the top sports news from ESPN and the like, we use Microsoft Live Search to provide the long-tail content and will rely on our users to submit and share all the content in between. I just wonder what percentage of searches will fall into each section and what the economics will be when the industry matures.

I don’t necessarily agree that advertising interest is only in the short head (that is where Jason’s company is focused) as Google has made billions from advertisers (including me for the Draft Analyzer as well as PlayerSearch!) in the long-tail of search. Brand advertising may be more popular in the short head, but advertisers can certainly get a lot of site traffic from the long-tail.

March 18, 2008 Posted by | Human-powered Search | , , , | Leave a comment