Category Archives: Service Innovation

What is wrong with online ad optimization ?

Yesterday evening, I sat through a technical seminar on online ad optimization. It was a very enlightening talk, reasonably technical, that help me get started on this subject. I learnt how online ad optimization involves so systematic gathering of data, slicing and dicing, analysis based on demographic strata such as age, gender, ethnicity, wage groups, etc. They also collect data on unique visitors, and are doing real cool work like frequency capping (i.e., don’t show the high-priced ad more than a certain number of times to the user who doesn’t click on it in that many number of times – the logic being he is most likely not interested in it), and so on. After the talk, I had a few questions. The answers left much to be desired, and hence I thought of posting those questions in a blog post. So, here we go.

Just a small caveat: I am a die-hard supporter of “no-irritating-online-ads-please” policy. Yes, yes, I understand the economics of how ad revenues help in cross-subsidizing the magazines or newspapers or the websites, but I think there is a fine line between what is done and what is not done, and every customer knows where is that fine line ! So, let’s get going…

1. Why does online ad optimization include ‘unique visitors’ as a data for analysis and not ‘repeat visitors’ ? I read long back that it takes up to 6 times the time, money and effort to attract a new customer as compared to retain an existing one. Why not focus efforts on people who are coming to your site twice, thrice…ten times a month as compared to the unique visitors. A frequent visitor likes the user experience on your site (that’s why he is coming to your site so many times !), and might be more open to what you advertize on it than a vagabond visitor.

2. Why do online ad optimization techniques completly disregard ‘user preference’ in favor of inconsequential static factors like age, gender, ethnicity, etc. ? Let me explain. Suppose I never click on any online ads on a site. Irespective of whatever my demographics say about me, what possible value would it be to keep popping the ads at me ? At best, it is a wastage of advertizer’s money (which, in the long run, could mean the advertizer taking away his business to another publisher if the returns are less than expected). At worst, I will take away my business somewhere where there are less irritating ads (which also means problem for publisher if not too many people visit the site). Here is my proposal: on your site, ‘reward’ users like me who don’t click on any ads by showing less ads, or removing them altogether. And for user who are prolific clickers, ‘reward’ them by giving relevant ads and offering them ‘deals’ that make them click on them even more. Such an automatic ‘opt-in, opt-out’ will make sure it is a win-win-win-win situation: people who want ads will be happy to get more deals (which get funded by not popping ads at people who don’t want them), people who don’t want ads get an ad-free experience, advertizers are getting a better bang for the buck and publishers are finally getting to make everyone happy ! There, the biggest problem in online advertizing has just been solved. And, do remember to mention that you read about it here first 🙂

3. I blogged about Gmail a few months back (and surprisingly, it continues to be my #1 post). Here is some more on that. There is no bigger culprit than Gmail when it comes to making money on your user experience.So, when you open your mail in Gmail, its humongous search algorithms try to find the best ads for you based on what is written in your email. For one, that is an outright invasion of privacy – so what if it is done without human intervention. Anyone can hack into any customer data, right ? Secondly, it slows down your mail thus deteriorating your ‘user experience’. So what if that deterioration is unperceptible most of the time – it is getting bigger and more noticable every time I log into Gmail. Thirdly, every search on Google is supposed to crete 7 grams of Carbon Dioxide – so, every time I open my mail, I am unknowingly creating an unsolicitated search and creating another 7 grams of CO2 that we all could have very well done without ! Isn’t that a disincentive big enough to stop this mindless data mining that user don’t want ?

4. Every ad on your site is like an outlink. It makes your visitors go away from your site. Now, why did they come to your site in the first place ? Not to search for which is the coolest mobile phone – they could have googled or cuil’ed for that. They came because they liked what you offered them – whether it was ideas, articles, ecom, vacations, books, e-shopping..whatever is your core business proposition. And by hosting a sexy ad, what did you do – for a few dollars more, you allowed, rather facilitated the visitor to go away from your site. To me, it is like loaning your working capital to other businesses even if that brings more returns than your own hurdle rate ! Agreed, you need to make some money and hence your require some ads, but here is the problem: on a typical CNN.com or a rediff.com, there will be thousands of pages. The most unreachable pages will attract least sexier ads, and the top pages will get the most coveted ads – the ones that have the biggest potential to take away your visitors from your site – lock, stock and a few smoking barrels ! Visitors will come to those top pages first, and get floored by the latest hi-tech flash-based ads and with them, goes away any hopes of them visiting the deeper pages on your site. Now, what is your aim: don’t you want people to spend time at your website, and visit as many pages as possible. But, you are achieving exactly opposite. It beats me why will somebody want to do that ?

These are my four questions that I have not understood yet. Maybe its my ignorance about the subject matter, but it most certainly doesn’t seem to add up.

So, what is wrong with online ad optimization ? I think absence of ‘customer’ as a thinking, rational living being is what is wrong. Till that happens, I can’t think of how one could fix this problem. Surely, ad networks and publishers will make money as is the case in any business which is floating on high tide, but eventually water will recede….

How do you manage a Disruption ?

 

The world of new product development is (NPD) is an extremely challenging one, and while the output of such an endeavor is never a sureshot guarantee, the journey itself is immensely fulfilling. Edison was reportedly asked by his assistant on not being successful with his electric bulb work despite two years of efforts, something that Edison could not understand… “what failure…we have discovered so many ways how an electric bulb won’t work”.  In a corporate context, however, we all must work within boundaries of finite resources (time, resources, people, etc.) to create the next telephone, the next microwave, the next LCD television, the next Windows or the next Google. It is perhaps the dream of every professional to be part of such life-altering Greenfield projects (many times also referred to as the ‘Version One’ in software world) and make a lasting impact on world around us.

However, innovation doesn’t only happen in such large doses. It also happens in small doses: small-small daily changes, enhancements, modifications, improvements done in thousands and millions of places in a product such that the final impact is as breathtaking as the version one. In fact, some might consider such ‘brownfield’ effort as much, or even more, challenging than the Greenfield because in a brownfield effort, one must work around constraints and ground realities that are not up for change. Irrespective, there are adequate challenges and learning opportunities in any endeavor that creates, or improves upon an existing product or service. This is the opportunity for a technical professional to sometimes work as an artist and make her lasting impression on the canvas, while also working as a child building grand designs of lego building blocks. As a manager, the fun is little more challenging than for others J

While a traditional project manager applies all his knowledge and skills to synthesize all tasks, inputs, resources and constraints to build a plan to execute the project, a project manager working on a new product development endeavor must recognize that the work has innate challenges, and quite often the task is a wicked problem.  There is an element of risk, a certain amount of discovery that in fact makes working on such a project worthwhile. It is not by accident that the best talent in the world gets drawn to companies that routinely engage in such work. Welcome to the world where the only objective is to create disruption ! However, traditional project management is all about applying time-tested sound principles and practices to bring a project under control and achieve all its goals. However, managing a disruptive endeavor is much more than that – to begin with, not all goals might be known. Some risks might be completely immitigable, and one must simply learn to accept them. Many of the activities in an NPD project might actually be undertaken for the first time, and hence for all practical purposes is more of research work than a mere development.  In short, one might not be able to apply all practices of traditional project management in letter and spirit and yet be able to create the right disruption that is envisaged. However, it is not an impossible problem.

In PMI NPDSIG, we are working towards creating a community of researchers and practitioners and enrich the body of knowledge by learning newer and innovative methods of problem-solving, shortening the cycle times, improving product reliability, improving the ability to manage such a project and so on. While recognizing the inherent challenges such an endeavor poses, and to an extent might be at crossroads with a very straightjacket approach to project management, we strive to explore the middle path – how best to apply principles of project management to a new product development endeavor, and meet the dual objectives.

I am part of the NPDSIG team for 2009, and as Vice Chair for Communications, I have an extremely interesting and challenging role. Here is how I propose to work on them:

  • PMI NPDSIG publishes a newsletter, Project Management Innovations, for which I serve as the editor. It is published electronically four times a year. I propose to take up themes for each of those issues and scout for talent all over the world to share their opinion, experiences and trends in that area. The idea is to learn from different fields and understand how well practices from one area could be used to solve similar-looking problems in another. Some of the themes I am exploring are
  • Lean: how well Toyota’s Lean Production System is being used in creating other innovative products and services
  • Green: we often tend to associate green only with companies that consume hydrocarbons, but in a broader sense, several companies are making invaluable contributions by adopting green in their technologies
  • Innovation: while our field of work is all about innovation, how the process of innovation is managed, how are organizations able to reduce the risks and lead times, etc.
  • Human: we exist to serve the society, and so must our products. How do organizations create technologies that, for example, enable the poorest of the poor to become literates, acquire practical skills to earn a livelihood and become self-sufficient, how has mobile telephony changed the lives of millions of poor people around the world and empowered them as a first-class citizen of this world.

As an editor, I shall be working with potential authors and SIG administrator on planning the release, review and proof-read articles, etc.

  • The discussion list has over 900 members, but there is practically no activity on that list. We need to revive it by involving list members in various discussions, share thoughts and articles, etc. While this requires a team effort, the need is to identify subject experts who can initiate conversations, offer conflicting opinions, cross-pollinate ideas and involve list members by listening to their problems, their experiences. The idea is not to take the high road by proclaiming ourselves as ‘experts’ but by facilitating thought process, we aim to serve the listmembers.
  • I would like to conduct one or two events in 2009 with PMI Bangalore Chapter and also with IEEE Technology Management Council (TMC) Bangalore chapter of which, I am the Chair for 2009. IEEE celebrates 125th anniversary in 2009 and among eight global cities, Bangalore is chosen as one of them and will have major events (http://www.ieee125.org/). I propose to conduct some event along with IEEE TMC Bangalore chapter that helps us build bridges within IEEE community as well as (hopefully) open doors for more membership. I don’t know if that is possible, and if yes, what would be a budget for this, but I thought of sharing my thoughts here so that you could advise on what is possible.
  • On the lines of PDMA and our very own PMBoK, I would like our team to undertake an effort to codify the NPD knowledge in context of project management profession. This codification could also be a reflection of the state of art in this field, and serves as a quick-learning tool into the basic tenets of NPD, tools and resources, best practices and emerging trends. This could be made freely available resource for the advancement of our field.

If you are a professional involved in the exciting world of new product development, then join us for mutual learning.

Toyota’s Wisdom for Tomorrow’s Managers

 

I just completed first draft of this paper for business review magazine of a city college of business administration. If it gets selected for publication, you will get to read the full paper on this site :). Here is the abstract:

Toyota’s pioneering work in automobile production systems continues to be among the most profound and radical departure from conventional thinking since the times of Henry Ford, and has led to unprecedented cost efficiencies and quality improvements for them. For long, it was thought to be a Japanese expertise – one that could not be duplicated by non-Japanese people, or outside Japan. However, subsequent to Womack and Jones’ pioneering works, “The Machine that Changed the World” and “Lean Thinking”, it has not only been adopted outside Japan, its universal principles are also finding huge acceptance in other sectors and service industries throughout the world.

However, any process is only as good as the people involved in it and their thought process behind it. Toyota’s production system is not only about how the production flow is organized – it includes fundamental aspects of professional ethics and work culture that are deeply ingrained in their thinking. These so-called “Toyota Traditions” serve as the guiding light for managers and employees alike and continue to remain relevant as ever. They also are ubiquitously applicable in almost every stream of management.

It is this author’s firm belief that by merely adapting Toyota’s Lean Production System, one can’t transform a normal organization to a Lean Enterprise. Alongside the changes in process, one must pay adequate attention to adapting the mindset behind Lean culture as well. With that context, I have analyzed and interpreted some of the Toyota’s Traditions that are most relevant in context of tomorrow’s manager in this paper.

Stay tuned for updates on this.

This is the festival season, and kids have holidays. I am also off to a short holiday. Festival greetings, and enjoy the winter holidays. See you soon.