Pretend you’re a developer – how awesome would it be to capture the entire video game market and only have to develop your game for one system? No need to worry about the politics of exclusive releases or franchises only being for one system and potentially missing out on a huge chunk of gaming dollars. What if people could no longer buy used copies of your game and every sale was a “new” sale? What if people could no longer pirate your games?

Now, think like a consumer – how awesome would it be to have access to every game released without having to drop $1000+ (PS3: 400, 360: 300, Wii: 250, PC: 500+ all plus tax) on consoles? What if you never had to buy another? What if you never had to upgrade your PC because of games again?

Do I have your attention? Good, now what if I told you that this magical innovation could be crippled by your internet service provider (ISP)? Would you fight to make sure this doesn’t happen?

More after the jump…

Seems like everyone is already up in arms about Palo Alto-Based OnLive “console killer.”. If it can deliver what it promises on, then the name is well earned, because the rising cost of producing games in addition to traditional hard-copy distribution makes anyone thinking of starting a development studio or publisher think twice or more about how much debt they want to go into.

OnLive is trying to change that.

Just announced at GDC this week, OnLive is a server-based system that not only streams games to your computer, but with a small add-on it streams them to your TV as well. It was demonstrated on three separate mediums, TV, PC and Mac, and ran flawlessly on all three. Their top-end server systems guarantee zero lag due to the tech, and promise that as long as you can pull 1.5mbps downstream, you will be able to play lag-free in low res. For HD-Gaming, the requirement will be 5mbps.

OnLive’s main website has most every question answered except how much. No pricing has been announced, but it has been rumored that the system will cost less than the $250 Wii system. Much more has been said already on the interwebs, but what I want to address is the constant fight between internet user and ISP.

In case people have not paid attention to the news in the past year, ISP’s are backsliding from their “unlimited” bandwidth model. If we are not careful, more ISP’s will join Comcast and Road Runner in limiting their users to a certain amount of bandwidth per month and charging them for overages just like with cell phones. I have heard people talking about how high the margin is for ISP service. Some have said it is 60-70%, which means if you pay $50 a month, almost $35 of that is profit for the company. Now I’m not saying the ISP’s shouldn’t make as much as they can, but if they are impeding tech that will bring even more people to the internet and increase its use, then that is backwards.

What they are doing is punishing their customers for using the service that they’ve already paid for. The sad thing is, more and more ISP’s are looking at this model as a way to increase profits at the expense of the user. I pay for unlimited bandwidth from my ISP. I have looked at my terms of service and there are no “overage” fees, and that is the way it should be. Comcast got slapped on the wrist for purposely resetting connections for customers who appeared to be using P2P services such as Torrents. They also got hauled into court for it as well.

We thought we won a victory when they were caught, but all we did was make them sneakier. I do not want to see such an incredible invention that could revolutionize the game industry stymied by corporate fat-cats who have no sense of what this could mean for them in subscriptions. They are just trying to milk the consumer for every penny they can. Last time a local business adopted a “its mine, so I’ll do what I want,” attitude, they found themselves closed within two months because they spit in the eye of their customers.

ISP’s – don’t do this to your customers. They will turn on you and show you how little power you really do have.

Five years of programming, four seasons of shows that never stepped back from the edge, and a finale that does the series justice not only logically, but theologically and morally as well?

Absolutely amazing. Something words cannot capture and time will only make memory grow fonder happened tonight. I feel sorry for those who do not understand or appreciate the significance of the show and/or its passing.

Tonight, a giant fell among us.

Time for a second (of many) viewing!

Why Quality of course!

Are you sure about that? Really do you know? If you do, then you are a good deal ahead of most major TV ad execs who simply cannot grasp this concept. Traditional advertising versus the greater exposure and cost-effectiveness of the interwebs generally ends in an ugly, sometimes violent, shouting match between overpaid and under-thinking suits that do not want to admit that what they were taught 10-15 years ago is now failing. With the advent of commercial skipping DVR’s, its happening at an alarming rate. Just like the real estate bubble burst, so will traditional mass-market advertising. Lets take a look at the facts, shall we? Read on and I will show you how to do it better…

More after the jump…Quality or Quantity?

Oddly enough, this is a valid question and not quite so easily answered. Many of you (probably 99% or more) have a television and have seen commercials for just about everything you can think of, from shoes to jeans to computers to even sex. Can you remember the last time you were moved to purchase anything off of TV? Most everyone can think of one thing they saw on TV that they wanted to buy, of course.

Why did you want to buy it?

There are several reasons that it could be:

• Price
• Utility
• Need
• Want
• Joe has one
• Need to have a better one than Joe

The list goes on – my point is that every TV commercial is trying to give you this feeling and play on your rationalizations that because the comercial is interesting, funny, charming, outrageous, or seductive, that the product is on par with the entertainment value. What the companies are asking you to do is take their word for it and go spend your hard earned cash because their product will make you:

• Faster
• Stronger
• More beautiful
• More attractive
• Better in bed
• Better at what you do
• Happier in some way

But Tim, that’s true with any product we’ve never tried or heard of. Mathematically it makes sense to hit as many people as possible, doesn’t it?

That is a very valid point, from one point of view. If you look at sales numbers, you generally look at a ratio that is called many different things, but let us call it an Absorption Ratio (AR). Simply stated, an absorption ratio is how often a product is purchased versus how many times it was presented to the customer. AR is traditionally very low, in the 10%-15% range or less for mass-market advertisements. That means for every 100 customers shown an advert, they will see 10-15 purchases as a result. The actual number could be higher or lower, due to natural circumstances. To really know, shoppers would have to be surveyed about every product they purchase at the check-out and that is far too difficult to accomplish. Back to the main point – if you know that you have a 10% AR, and you want to increase your sales by 1000 units per day, then you need to reach out to 10,000 people each day. If you are factoring cost per person, this can get very expensive very quickly. Notice in my article about superbowl advertising, the price per person goes up $30 in 10 years. Even at low numbers, the cost is very high, and ultimately ineffective.

Ok, I get it. Its expensive and times are tough. But what’s the alternative?

Essentially what you want is to increase your AR. If you have a higher AR, then you personally need to show less people. Another aspect is the talkability factor a.k.a. word of mouth. This is where buzzwords like “viral” and “social media” come in. I’m dancing around here hoping you’ve already connected the dots. What I am saying is that your message itself isn’t the most important thing! Who and where the information given is the key, now.

Let me ask you – who would you take advice on what laptop to buy?

• Sales advertising exec and writing staff that creates commercials for a living
• Tech geek who has tested and reviewed all of this year’s best models

No brainer, right? You would think this makes the most sense in the world but the secret is that corporate America has not caught on, yet. They still pump money into TV and high-priced ads when the answer is obvious to everyone else. Podcasting News reported that podcast advertising is seven times more effective than TV or Radio ads. Seven times!

Why do you think this is?

1. People listening to the podcasts are already interested in the subject matter, and more likely to purchase items based on a recommendation from someone who’s opinion they respect.
2. Item and service reviews are a feature on the shows. They are presented in an entertaining way that consumers can identify with.

There are other reasons, of course but I believe these to the be the primary drivers behind their success. This sort of “niche” marketing has been around for ages just like mass-marketing, however the venues have not been nearly as visible. You’ve probably heard something about the internet creating a level playing field for businesses. This is very much the truth because of the open nature of the internet.

So to put this question to bed, quality in advertising is much more productive and profitable. Remember, you’re not shooting for as many faces as possible with your ads, you’re shooting for the right faces, regardless of number. If you show the right ones, they will do your work for you.

Today is, of course, Superbowl Sunday. Heralded by many as the best day of the year for sports and by others to be the best day for advertising. Going off of numbers from an article on MSNBC.com (Advertising’s Big Game)in 1987, a 30-Second ad in that legendary Giants victory over the Broncos cost $600,00. The viewership was an estimated 87,190,000. If we do the math, each viewer cost the ad companies 14.5 cents. Seems like a small price to pay, right? I mean, 87 million people saw the ad! Fast forward to 2006 – approximately 77,900,000 people tuned in to watch the Steelers trounce the Seahawks. A 30-second ad cost companies a whopping $2.5 million dollars… lets to the math again: 77,900,000/2,500,000 = $31.16 per person. Lets say that again – Companies paid $31.16 for every person who watched their commercial. If you watched this game, for every 30 seconds of commercial you saw, a company paid $31.16.

That’s all well and good, Tim – but was it worth it? Read on to find out…

Well let’s see – on a personal level, did any of the comercials warrant more than a chuckle or an ooh or ahh from the amount of cleavage and wet female body parts(I’m looking at you, GoDaddy)? Did you actually conciously  increase your consumption of products advertised? On a subconcious level, you may have, but only because when you were at the store and you looked at  a product it made you remember that commercial that made you laugh so hard. But if a comparable, cheaper prodcut was nearby those chances are very slim. Studies have shown that in the past 6-7 years it has gotten harder to companies to account for TV marketing success. Its almost unmeasurable, as other things in the world are happening and to attribute a spike in sales to a comercial would mean that the world existed in a vaccum. What I’m trying to get accross here is that its almost impossible to say why certain trends happen at any given time.

Lets take another route – do you judge the quality of a product based on its effective marketing? Of course not, that’s a silly question. It does stand to reason, however, that if a company has a lot of money to spend on marketing, it certainly must spend at least as much on the quality of their product, right? Sadly, this is not a guarantee however much it should be.

Well how do you judge the quality of a product or service? Here’s a couple common avenues:

1. Trial and Error – You take a shot on a product you know nothing about and either have a good or bad experience. This is many times costly and does not happen unless people are unhappy with their current product.
2. Word of Mouth – Someone else close to you who somewhat knows your interests and buying habits has tried it based on trial and error or another recommendation and has had success with it.

Which of these do you think is more common for you? What about for others? What if you could have recommendations from people whose opinions you respect or agree with that are also interested in the same things that you are? Sound too good to be true? Until a few years ago I would have agreed with you. Information originally reported by PodcastingNews.com states that,

New data from Podtrac and TNS suggests that podcasts may be a much more powerful advertising platform than television.

The companies studied podcast advertising from February 2006 to March 2008 across multiple product categories and ad types. Unaided awareness for podcast ads was 68%, compared with 21% for streaming video and 10% for television.

““The studies showed a 73% increase in likelihood to use or buy an advertised product,” said Velvet Beard, vice president at Podtrac. “The studies showed that 69% of audience members have a more favorable view of in-show advertisers.”

What this geek-speak means is that more and more  people are finding niche outlets that appeal directly to their interests. These online entertainment shows, or “Podcasts,” do the trial and error bit because its something they enjoy, or have a way to get demos or pre-release items from manufactuers before they hit the market at little or no cost to them. You don’t have to slough through a four-hour radio show to get it either. Most podcasts run between 10 -30 minutes for video and 30-90 minutes for audio. The fact that they can be downloaded and listened to at your leisure makes them the ultimate on-demand entertainment service.

Oh, and did I mention that 99% of them are free?

So, is advertising on the superbowl worth it? Personally I don’t think so. Its a great way for companies to increase brand recognition but gone are the days where pushing your product out in front of millions of viewers means you are going to increase your product sales by that high a margin. I believe the companies should reinvest their money into their employee’s forgotten 401k, insurance, and reinvigorate pension plans. When most companies are cutting budgets and laying off people by the thousands, its time to put money where it will do the most good.

I’ll be writing an article on the idea of quality of advertising is much more important than the quality of advertising, but I want to point out that its much more important to get your product in front of people who already enjoy that type of thing. If you have a tech product, putting it in front of people who don’t understand or enjoy tech is a waste of time and money. I’ll leave you all with that thought for now. If you’re curious about what I’m talking about, boot up iTunes and look up some podcasts that interest you and immediately you’ll see what I’m talking about.

It is interesting to think that we’ve been using the Internet for increasing more things over the past 14 years. In relation to all things technology oriented, it is beyond ancient. Old news, right? If so, what is the next great technology to consume our lives? I truly believe that the internet has finally hit maturity and a few forward thinkers have begun to look beyond the internet for the next great frontier.

While I still think that the internet has at least another decade of dominance, it is better to be ahead of the curve rather than behind it. However if you look at the way that the internet is still evolving and people are throwing around terms like “Net 2.0″ and “Organic Processing” does it really mean anything to the average person? Not at all – the items that people need to know are its ease of use as well as its accessibility. And no, they’re not the same thing. Technology’s immediate and severe price-point reduction cycle has increased even more the past 12-18 months than in the past 5 years. sub-$100 1-Terabyte hard drives. 3.0 Gigahertz processors that are $299 or under. Machines that could, by themselves, run a small city can be assembled for less than a thousand dollars.

But I digress – my point is that we’re barreling down the tunnel of time and the future will be upon us sooner than we think. The internet is still the king and just about everyone is on it. Checking e-mail, viewing websites, making purchases, doing work. How have you used the internet lately? It isn’t too odd of a question. Have you taken advantage of the commerce that the internet presents? Have you used the internet to advertise something about yourself or a product or service you have? The internet is the premiere information sharing medium, and all the information on how to maximize that benefit is out there. If you don’t get on the net soon, you will have an entirely new medium to learn and deal with.