Bickel Blog

We have a bit of March Madness at Ringside getting ready to launch tomorrow . But for the rest of the country, it is the NCAA college basketball tournament - and of course CBS Sports big deal with Facebook . CBS has provided this year's bracket system on Facebook (a Facebook application). Hundreds of thousands of Facebook users (including my 11th grade daughter) have made their choices and anxiously compare themselves to the rest of their friends, or within their high school or across the world. CBS is going to make $25 Million this year from on-line advertising of the tournament, and the Facebook crowd is a big channel for them. It also engenders the type of engagement and virality we have been talking about in this blog. Come tomorrow when Ringside Networks launches our Beta open source project, folks like CBS will have a common platform that they can build applications like this on. A platform that will enable them to build one application that runs on both Facebook and t...

Good blog by Henry Blodget giving data on the continuing shift of advertising revenue to on-line. Last year on-line was $18B out of the total $58B according to this market data. Again, I ask if there is real return on this that creates a competitive advantage?

In an earlier post I argued that search marketing is a break-even business for those investing in it. In this post I want to get down to some hard numbers and determine where the break-even is for investing in your own social networking tools. Analysis 1 : Let’s look at the costs of search advertising. The costs range from $0.10 to $5.00. Here is a sample average cost currently on Google: $0.55 – “Nike” $0.85 – “running shoes” $0.72 – “social networking” Commerce sites have a range of making a sale from a click-thru typically between 1 in 50 to 1 in 250. In the case of “running shoes”, the cost would then be 50 X $0.85 = $42.50. Figure a pair of nice running shoes is about $100, with a gross margin of about 50%. So an on-line retailer would make $7.50 gross profit. And that is for an excellent conversion rate and not counting the overhead of fulfillment and running the business. If the rate falls to 1 purchase in 60 click-thrus, then it is a loss. Competitors simply bid up th...

As pointed out in my previous blog, online advertising is a BIG business, and social networking is becoming a significant part of that market. The question is whether spending ad money with a social network is really the best way to take advantage of Social Networking. Is it better to spend at least some of that money on your own company’s web site to add social networking capabilities? Let’s look at Search Advertising. It is based on a model that takes all of the profit from competitors. Company A and Company B will both bid up the price of the ad for an item that they both sell until the point that they do not make a profitable return. I know there are many e-commerce businesses who sprung up and took advantage of early leadership in search ads, building up spending to be 25%+ of their total revenue. They initially made money as they built up sophistication on using Adwords, finding profitable keywords ahead of their competition – but those advantages decrease over time. Then C...

On-line Advertising is a big business. Actually, it is a HUGE business. And the big and small Social Networks are trying to take their cut of the pie. There are many estimates of On-Line advertising: - Rayport estimates the US market to be $28 Billion, with the Big Three (Google, Yahoo and Microsoft) commanding 85% of that market. ( Business Week ) - Jerry Yang estimated the worldwide on-line advertising market to be $45 Billion this year and growing teo $75 Billion by 2011 in his recent letter to Yahoo! stockholders. - Google had revenue of nearly $5 Billion last Quarter – so a $20 Billion run rate by themselves that is mostly advertising based. Yahoo is at a nearly $7 Billion run rate. - "Google, Yahoo, Microsoft, and AOL each regularly see a minimum of 100 (sic) million unique visitors each month, according to research firm comScore (SCOR). Advertisers that want to reach a big audience are still likely to gravitate toward an established portal.” ( Business Week ) Advertise...