13 Questions For 2013 In The World Of Online Advertising

questionsCross-posted at my Forbes.com blog The New Persuaders:

For the past few years, I’ve offered predictions here and on The New Persuaders for what’s likely to come in the next year. I viewed them more as an agenda for what to watch for in the next 12 months than as firm predictions.

But it was too easy sometimes to state the obvious so they’d end up right by year-end. So this year, I’m going to shake it up and throw out a few questions instead. I think I know the answers to some of them, but if many won’t be answered definitively by year-end, they remain top of mind for me and probably for many others in online media and advertising.

So in this, the first full week of the new year, here are some questions to which I hope to start finding answers (and if you’ve got ‘em, sound off in the comments below!):

* Will image advertising finally take off online? I have to believe that as people spend more and more time online instead of reading print publications and watching TV, brand marketers will want and need to reach them there with ads that are aimed at creating consideration for later purchases, not just eliciting an immediate sale like Google’s search ads and too many banner ads. We’re already starting to see signs of such advertising with the early success of Facebook’s Sponsored StoriesTwitter’s Promoted Tweets, and YouTube’s TrueView ads–not to mention the explosion of tablets, which provide a lean-back experience more compatible with image advertising. This won’t be a sudden change, since brand marketers and agencies don’t move quickly, but you can’t tell me there aren’t going to be increasingly compelling ways for brands to influence people online.

* Will native ads reach broad scale? Well, perhaps they will on platforms such as Facebook and–well, Facebook–that already reach hundreds of millions of people. Sponsored Stories clearly have gotten some traction, even on mobile devices. But marketers and agencies won’t create multiple versions of campaigns to serve every new ad format that publishers claim work better than banner ads. Which brings up a related question:

* Will any standards emerge around the social gestures that most of these native ads embody? That’s really the only thing that will ensure that marketers can reach scale across many sites. That wouldn’t be in the interest of big companies such as Facebook and Google, which benefit from proprietary ad formats that can reach their huge audiences. But standards, whether it’s banners of a particular size or ad networks, create a more liquid market that helps hundreds of publishers survive as they provide marketers scalable opportunities to reach big audiences. So are there atomic units of social gestures that could carry brand messages across multiple native ad formats without destroying the appeal of native formats? Maybe there’s a technological fix for this, but it’s clear that a lot more needs to be done.

* Will the long-predicted shakeout in ad tech companies finally happen? It didn’t really occur last year despite a few middling-big acquisitions by Oracle, Salesforce.com, and Google. This year, perhaps new Yahoo CEO Marissa Mayer will corral a few to try to recharge the company’s ad business. Google, Adobe, and IBM have built out “stacks” of ad tech, but no doubt they can each fill out their offerings. Then there’s Facebook, whose ad exchange is likely to need fleshing out. But even if they each write checks for a few three-letter acronym startups apiece, don’t call it a shakeout. Given the rapid evolution of advertising technologies, and the reality that using data to refine advertising is still in its infancy, it’s a good bet that more companies will still be created than disappear. That should keep the Lumascape as crowded as ever.

* Can advertisers and publishers make ads more personal without scaring people? That’s the $64 billion question, and it likely won’t get answered in full this year. It’s easy for headline-hungry politicians to make a big deal out of Facebook’s latest privacy gaffe or the Wall Street Journal’s or the New York Times’ latest scare story about an ad that followed somebody all over the Web. That’s especially so since Facebook really does push the privacy envelope too far at times, and too many advertisers idiotically chase one more sales conversion at the cost of scaring off hundreds of others or inviting onerous legislation. But making ads more useful to each individual person is not only crucial to online commerce, it’s potentially better for most consumers as well–seriously, I don’t need to see another ad for a fitness center or a new credit card, but that ad for Camper van Beethoven’s new CD had me in a split-second. The answer lies in these two words, everyone: transparency and choice.

* Will mobile advertising work? Well, some of it already does, to hear Google and Facebook tell it. And while those already devalued digital dimes so far turn to pennies when it comes to ads on smartphones and tablets, this still feels more like growing pains than a crisis in online advertising. Sure, the screens are small and people don’t like to be interrupted in their mobile cocoons. So a different kind of advertising is probably needed–clearly, banners don’t cut it on a four-inch screen. But the value to advertisers of knowing your location and maybe the apps you’re using, coupled with knowledge of what your friends like–all with permission, of course–is huge. That permission may be really tough to earn. But if advertisers can offer tangible value, perhaps in the form of useful services related to what you’re doing or looking for or shopping for–and isn’t that the ultimate native ad?–people may loosen their hold on that information.

* Can Larry Page keep Google relevant in the social media age? So far, the no-longer-new CEO has at least kept Google’s mainstream ad business humming. Page has outlasted a year or so of missteps, missed opportunities, antitrust investigations, and bum vocal chords, and arguably emerged with a company that’s leaner, more focused, and more potent than ever. Not only does the recent antitrust victory appear to leave it free to compete unimpeded, but Android is doing better than ever even vs. a very strong Apple ecosystem and Google is about to emerge as a powerhouse in the other half of online advertising: display ads, whether on the desktop or on mobile devices. Page’s big challenge looms as big as ever, though: Can Google play in the social Web vs. Facebook/Instagram, Twitter, Pinterest, and more? I don’t know, but this may be the year Page has to provide a more definitive answer.

* Will TV and Web video ads finally come together on Connected TVs, tablets, or other devices? Sure, at some point. Video is video no matter where it runs, and while personal computer users bristle at pre-roll video ads, I’m betting viewers are more amenable to various kinds of ads when they view video on Internet-connected TVs or tablets. And even on PCs, YouTube’s TrueView ads, which you can skip after a few seconds, have proven successful to the tune of several billion dollars last year. Traditional TV advertising will continue to thrive thanks to unassailable economics of the cable-content cabal. But given extensive work by Nielsen, comScore, and others to provide metrics that can extend across TV and the Web, the latter may finally get some serious coin from brand marketers–if not this year, pretty soon thereafter. Especially if Apple works its magic on the television.

* Will Facebook really tick us off with a new feature or privacy “improvement”? Is Mark Zuckerberg CEO of Facebook? Nonetheless, Facebook’s well-worn playbook of pushing beyond social comfort levels, then pulling back just a bit, means we’ll probably see privacy norms get stretched once again.

* Will Apple ever make a real splash in advertising? Don’t bet your iPad on it. I think even the post-Steve Jobs Apple still views ads the way a lot of Silicon Valley still does (mostly in error): ineffective, inelegant, and crass. Apple itself can make great ads, but selling them is an entirely different matter.

* Will Amazon make a real splash in advertising? Oh yeah. All the pieces are in place, from a huge shopping-focused audience to a nearly bulletproof technology infrastructure. Again, it won’t set the world on fire this year, but we’re likely to see the smoke.

* Will Marissa Mayer turn around Yahoo? Not this year. Still, I wouldn’t be surprised to see signs of a real turn for the first time in about five CEOs. But the real turnaround will take years–if Yahoo’s board has the patience. That’s still an iffy bet worth about as much as a share of Yahoo stock.

* Will I ever figure out the appeal of Reddit and BuzzFeed? Gosh, I hope so. I get that these guys attract massive traffic, but neither site does much for me. Reddit, in particular, seems so random that I guess it must be the channel-surfing of today’s generation, only with somewhat more worthwhile nuggets. But for pete’s sake, there’s so much noise for the signal you get, and even the most popular noise can be many hours, days, or even months old. Go ahead, call me a geezer who doesn’t get it. You wouldn’t be the first, and maybe you’re right. So I will continue to click over to them until I see the light, my brain explodes, or the next phenom looks more worth wasting my remaining years on.

I have a lot more questions, but I’ve got to stop before too much of 2013 is gone.

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How Did I Do On My 2012 Predictions?

2012: The Year Ahead

Photo: Mike Licht, NotionsCapital.com

From my Forbes.com blog The New Persuaders:

It’s that time of year: time to reflect on the past year, time to get wasted and watch a glass ball smash into the ground, time for people like me who foolishly offered predictions for the past year to face the music. So here’s how I did on my 2012 predictions:

* Facebook goes public, but won’t start an IPO landslide: Bingo! Indeed, Facebook’s ill-received IPO led to a months-long drought in IPOs as investors realized they were not a sure route to riches. The situation may be improving, but mostly for enterprise more than consumer companies.

* Facebook’s ad business booms–but not at Google’s expense: Bingo! While Facebook’s revenues slowed even before its IPO as it continued to experiment with new ad formats and scrambled to provide mobile ad units, ad revenues have since accelerated, up 36% in the third quarter over last year. At the same time, while Google’s revenue growth disappointed investors in the third quarter, it was mostly thanks to the impact of its Motorola acquisition, not a shortfall in its core ad business.

* Image ads finally find a home on the Web: Half-right. YouTube proved there’s a real market for TV-like video ads if you give viewers the choice to view them or not, as its revenues were expected to hit $3.6 billion in 2012, according to Citibank. But Facebook’s struggles to attract brand advertising despite a TV-scale audience, while partially successful, show that no one has yet come up with brand ad formats that work consistently and at large scale online. Or at least brands, which still spend most of their money on TV ads, don’t believe it yet. And they write the checks.

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Jeff Bezos: How Amazon Web Services Is Just Like The Kindle Business

From my Forbes.com blog The New Persuaders:

Amazon Web Services, which provides computing and storage services to hundreds of businesses, began as a seemingly crazy idea in 2006, but it has since grown into a $1.5 billion business this year,  according to a new report from R.W. Baird. It’s believed to be one of Amazon.com’s fastest-growing businesses, the largest piece of an “other” revenue category that grew 68% in the third quarter, to $648 million, far outpacing overall company revenue growth of 27%.

Today, Amazon founder and CEO Jeff Bezos offered an explanation of how AWS, often seen as something that has little to do with its core retail operation, fits into Amazon’s business, and how it runs on similar principles. In fact, he says, it’s quite similar to Amazon’s Kindle business, where the company makes little money on the device but a lot more if it’s used–in that case to buy lots of books and movies.

Bezos made his comments, which were webcast early Thursday afternoon, to close the company’s first public conference on Amazon Web Services, a three-day geekfest that started Tuesday in Las Vegas. Following are his edited and sometimes paraphrased comments in conversation with Werner Vogels, Amazon’s chief technology officer, sometimes ranging well beyond AWS to entrepreneurship, rockets, and a humongous clock in the mountains of west Texas. (Unfortunately, he had nothing to say about Amazon’s surprisingly large ad business.) You can view the whole keynote here or click the video above.

Vogels: The last time you were onstage, at the Kindle Fire announcement, you said that Amazon should only win when our customers win, and that’s how the Kindle Fire business works. I’d like to think AWS also works that way, but elaborate on that.

Bezos: It’s very similar to our Kindle device business. We sell our hardware near break-even, so we make money when people USE the device, not when they BUY the device. That is very aligning with customers. It causes us to have the right behaviors.

AWS is very similar. It’s a pay-as-you-go service. We’re not incented to get people to overpay for hardware. In the long run, that will work out very well for customers, and it will work out very well for Amazon.

Vogels: You’ve always talked about flywheels, which in Amazon retail is low prices, convenience, etc. What’s the flywheel in AWS?

Bezos: I always get the question, what’s going to change in 1o years? I almost never get asked, what’s NOT going to change in the next 10 years? That’s the more important question, because you can build a business around things that are stable. One is low prices. Another is faster delivery. Vast selection.

On AWS, the big ideas are also pretty straightforward. People will want more reliability, lower prices, etc. The big ideas in business are often very obvious. But it’s hard to keep a firm grasp of the obvious.

Vogels: What are the real mechanisms of innovation?

Bezos: Innovation is a point of view. You have to select people that want to innovate, to explore. An explorer company isn’t for everybody. But for people who get up in the morning and want to change things, it’s a lot of fun.

Other things important for innovation isn’t as fun. One is you have to have a willingness to fail, to be misunderstood for long periods of time. Then, you can ramp up your rate of experimentation. Successful invention requires you to increase your rate of experimentation. AWS is one of those things that helps startups do experimentation faster. …

Read the complete post at The New Persuaders.

Apple’s iPad Mini Cannibalizes Other iPad Sales While Google’s Android Tablets Steal Share

Apple Introduces iPad Mini... and some new com...

From my Forbes.com blog The New Persuaders:

Apple’s grip on the tablet market it single-handedly popularized is slipping.

The maker of the iPad line of tablets still leads the market with a 55% share, according to a new report from market research firm ABI Research. But that’s down 14 percentage points in one quarter alone, and the lowest since the first iPad launched in 2010.

The problem, according to ABI, is that Apple was late to come out with a seven- to eight-inch tablet, well after the point at which it was becoming obvious that people really like that size. And when Apple did finally debut the iPad Mini, it was at a substantially high price relative to rivals such as Google’s Nexus 7 and Amazon.com’s Kindle Fire. “With the introduction of a smaller, lower-cost iPad mini, Apple has acknowledged Android’s beachhead of 7-inch-class tablets, though at the same time, it has failed to deliver a knock-out punch through innovation, pricing, and availability during the most critical selling period of the year,” ABI senior practice director Jeff Orr said in the firm’s release.

Worse, ABI says, the iPad Mini didn’t take back share from tablets powered by Google’s Android mobile operating software. Instead, people simply ended up opting for lower-cost tablets. Android’s market share rose to 44%. Another recent report from Finvista Advisors predicts that Android tablet sales will overtake the iPad’s by mid-2013. Android also recently bested Apple in smartphone shipments, at least before the iPhone 5 launched.

It’s not clear from the ABI report which companies benefited the most from the market-share shift. But it wasn’t just Google. According to one report, Google is expected to sell about 4 million Nexus 7s by the end of this year, but that’s somewhat fewer than some analysts expected.

Amazon says Kindle sales are strong, but it’s not providing specific figures to prove it. A report from Pacific Crest Securities says it’s likely to pick up a bit of market share in the fourth quarter, but not much.

The big losers are clearly every other tablet, including those running Windows–though that, too, could change if Microsoft’s new Surface tablet takes off.

Now, Apple’s share decline may well reverse in the current quarter, the first full one for the iPad Mini and other new iPad models, squarely in the heart of the holiday shopping season. And of course, it’s far better for Apple to cannibalize its own products than let others do it.

Problem is, it’s too late, at least for the moment. Now, rivals are eating some of Apple’s lunch, too.

Apple CEO Tim Cook Is Blowing Smoke When He Dismisses Rival 7-Inch Tablets

Apple Introduces iPad Mini... and some new com...

Apple’s iPad mini

From my Forbes.com blog The New Persuaders:

As a company that way more often than not comes out with superior products, Apple rarely appears defensive. Today was an exception.

On Apple’s fourth-quarter earnings call, CEO Tim Cook took repeated potshots at small tablets of the kind that–yes–Apple itself just debuted. The iPad mini is clearly aimed at blunting the appeal of seven-inch tablets such as Google’s Nexus 7 and Amazon.com’s Kindle Fire.

While I think Cook is probably right that the iPad will continue to dominate tablets, and even that it continues to make the best ones, his overenthusiastic criticism of seven-inch tablets struck me as surprisingly defensive. Saying Apple didn’t set out to build a “small, cheap tablet,” he called the competitors “compromised” products. “We would never make a seven-inch tablet,” he sniffed.

Why not? Because they’re too small, he said. The iPad mini is almost an inch larger, which means a 30% larger screen and 50% larger viewing area. I’ll grant that that is noticeable, and appealing.

But c’mon. These are all tablets you can hold in one hand, and acting as if the iPad mini is something utterly unique–”in a whole different league,” as he put it–comes off more than a bit desperate. Apple is clearly playing catch-up here, and trying to position the iPad mini as nothing like the Nexus 7 or Kindle Fire only serves to make us realize that Apple actually does feel threatened by these devices that beat it to what has turned out to be a real market. …

Read the complete post at The New Persuaders.

Apple Leaves Gaping Price Hole Between iPad Mini And Rival Tablets

From my Forbes.com blog The New Persuaders:

Let’s just get it over with at the outset and concede that Apple’s just-introduced iPad mini will be a holiday hit, selling millions of units to people who know they can’t go wrong giving a gift of a new Apple product.

And at a starting price of $329, that gift-giving isn’t a budget buster for many people. Let’s face it: Apple has yet another great-selling product on its hands, this time in the palm of ours.

And yet, I wonder if Apple just punted a chance to grind its rivals in smaller tablets, chiefly Google’s Nexus 7 and Amazon.com’s Kindle Fire, into the dust. The Nexus 7 starts at $199, the Kindle Fire even lower at $159. But Google also may release a new Nexus 7 model next week at an Android event, potentially dropping the price of the current low-end model to just $99.

OK, so let’s get something else over with. By all early reports so far, the iPad mini is better than either of those two existing devices. It feels better, it looks better, it’s lighter, it’s thinner, it even still has a noticeably larger screen and especially viewing area than the Nexus 7 or Kindle Fire. Not least, it has Apple’s App Store, with apps that fit the tablet form factor rather than plastering smartphone apps onto a bigger screen.

So yeah, millions of people will love it.

But millions of other people will be hearing a lot about the Nexus 7 and the Kindle Fire, too, and Google and Amazon.com have a huge incentive to advertise the heck out of them. Honestly, if you don’t do a side-by-side comparison, which is tough to do, you may pick up a Nexus 7 or a Kindle Fire and say, “Hey, this looks pretty good. Why do I need to spend an extra $130, or even more?”

That’s why it’s surprising that Apple, whose CEO Tim Cook has talked about not leaving a significant price umbrella for Apple products, did just that with the iPad mini.

Read the complete post at The New Persuaders.

LIVE: Apple Launches iPad Mini Starting At $329

From my Forbes.com blog The New Persuaders:

We’re about to hear about Apple’s latest must-have product, so far dubbed the iPad Mini.

Whatever it’s called, it’s sure to shake up the already dynamic market for tablets. In particular, the rumored 7.85-inch iPad Mini could, depending on its price, instantly provide potentially crushing competition for Google’s Nexus 7 and Amazon.com’s Kindle Fire tablets.

You can watch the livestream of Apple’s event, which also is rumored to include a new MacBook Pro and a full-sized tablet updated with the latest Lightning connector and other features, on Apple’s site, at least on Safari-equipped PCs and iPhones and iPads. There are plenty of other people, including Forbes’ Connie Guglielmo, tracking every word and movement of Apple execs, so what follows here will be strictly the highlights from the livestream.

Just before the 10 a.m. Pacific start, panning cameras are following the crowd of journalists filing in to the California Theater in San Jose. … And we’re underway as CEO Tim Cook takes the stage, first to provide updates on the iPhone 5.

* There are now 200 million iOS devices out there.

* 300 billion iMessages have been sent, 28,000 per second.

* There are now 700,000 iOS apps, including 275,000 iPad apps.

* 35 billion apps have been downloaded from the App Store.

$ 6.5 billion has been paid out to Apple developers.

* Apple announces a new version of iBooks that features continuous scrolling and is better integrated with iCloud. You can also tap on a passage or quote and share it with friends on Facebook or Twitter.

Now on to the Mac. He says it has been outgrowing the PC market by about seven times in the past year, and has outgrown it for the past six years. It’s now the No. 1 desktop and No. 1 notebook in the U.S. “But we are not standing still. And we’ve got some really great stuff to show you  this morning.” Cue Phil Schiller, who notes that the 13-inch MacBook Pro is the best-selling Mac.

* And so, as expected, he shows the new 13-inch MacBook Pro. It’s three-quarters of an inch thick (or thin), 20% thinner, and weighs only 3.5 pounds, almost a pound lighter than the previous one. And four times the number of pixels in the Retina display–twice as many as a 52-inch HDTV. Flurry of new specs, chip, etc. “PowerNap” updates email, etc. while the computer is asleep.
Oh, the price: $1,699. It starts shipping today. MacBook Air starts at $999, Pro at $1,199, Pro with Retina $1,699.

Next, a new Mac Mini starting at $599. “You knew there would be something named Mini in this presentation, didn’t you?” he coyly asks.

And one more Mac thing: a new IMac. Yup, it’s ridiculously thin–only 5 millimeters, 80% thinner than the last one (though with a bulge in the middle of the back for, well, the computer. Almost looks like a stand for a real computer. “The most beautiful Mac we have ever made,” Schiller coos.

How did Apple make it that thin? “Isn’t it something how something new makes the previous thing instantly look old?” he notes, thus summing up neatly Apple’s business model. No optical drive is one reason it’s thinner. There are 27-inch and 21.5-inch models. They’re also up to 8 pounds lighter than the previous iMacs.

* Another new thing: The Apple Fusion Drive. It has 160 GB of flash storage with a 1-terabyte or 3-TB hard drive, fused into one drive. The point: You can use the flash storage for much faster access and the disk drive storage for stuff like movies you don’t need constantly.

Cook’s back with more news. Apple has sold its 100 millionth iPad, in just two and a half years.

* He also intros the new version of iBooks Author. Feels like a breather for the main event, and indeed, Cook goes back to the iPad.

* And so Schiller comes on to intro the fourth-generation iPad, which has a chip that’s two times faster, for speedier graphics. Also 10-hour battery, better camera, high-speed LTE cellular data connection with “greatly expanded” coverage. It starts at $499 for 16 GB of memory, $629 for the cellular model.

* And finally–the iPad mini! Yes, that’s what it’s called after all.

Why do you need a smaller one? Hold it in one hand–that’s one reason. And really everything else, he says.

* It’s 7.9 inches diagonally, 7.2 mm thick, 25% thinner than the regular iPad. Weighs only 0.68 pounds, 50% lighter. He even compares it to Google’s Nexus 7 (“and Android tablet”), saying that the iPad mini is aluminum and thinner, with a 35% larger display area–50% larger in viewing an actual web page. 

It’s interesting that Apple finds it necessary to compare the iPad mini to a specific rival, even if it’s unnamed. Clearly Apple has viewed it as a threat that it needs to blunt.

* So what’s inside? Apple A5 chip, FaceTime HD camera, 5 megapixel iSight camera, faster WiFi, Lightning connector, 10 hours of battery life.

* Yes, and the price? $329 for the low-end 16 MB WiFi version up to $529 for the 64 GB WiFi version. For the cellular models, $459 to $659.

Methinks that especially if Google comes out with a new $199 Nexus 7 next week and reprices the current low-end to $99–coupled with Amazon’s $159 low-end Kindle Fire–Apple may have left at least a small pricing window for those products. Or, maybe not so small. Will it be enough of a window given Apple’s customary premium (both in price and in product quality)? We’ll find out this holiday season.

Cook wraps up and that is indeed a wrap.

Facebook Live: Charlie Rose Interviews COO Sheryl Sandberg, VC Marc Andreessen

DAVOS/SWITZERLAND, 28JAN11 - Sheryl Sandberg, ...

Facebook COO Sheryl Sandberg (Photo: Wikipedia)

From my Forbes.com blog The New Persuaders:

For better or worse, you know a company is serious about putting forward a clear image of itself when it submits to an interview with Charlie Rose.

And so on Oct. 2, Facebook COO Sheryl Sandberg and board member and uber-VC Marc Andreessen talked with the PBS journalist at the annual ad confab Advertising Week in New York, clearly in hopes of persuading brand marketers to invest much more on the No. 1 social network. Here’s a live account of what they had to say, paraphrased at times (especially when it comes to fast-talking Andreessen):

Rose asks Andreessen where advertising is heading in the Internet age.

Andreessen: People love the Internet and there’s such a powerful global phenomenon putting the world in people’s hands. We have the fundamental challenge in advertising and media: Most of the money is trapped on the wrong side. We still don’t have most of the money and advertisers moved over to online. We now can see that transition happen, particularly with mobile.

Sandberg: You went from radio to TV and print and then to online. We think Facebook represents the next stage of online and we’re still in the very beginning. Ads online today are onetime and one-way, no ongoing relationship. We’re at the very beginning of changing that. Businesses have an opportunity to change their relationships. They can establish an ongoing relationship. And members have 130 friends they can pass messages along to.

Rose: What are the challenges of mobile for Facebook?

Sandberg: Mobile is a huge opportunity for Facebook. There soon will be 5 billion phones. The engagement opportunities for us are obviously much, much higher. Our mobile users are much more engaged, and that forms the basis for monetization.

Also, the marketing messages can be put into the newsfeeds.

Rose: But does it in any way make the user unhappy?

Sandberg: We’re looking very carefully at this. We’ve been very pleased with the results. We’ve also seen a real improvement for marketers.

Rose: Has the monetization been slower than you expected?

Sandberg: Marketers understand they can’t just do the same campaigns. Then we have early adopters, and we’re working to help them understand. …

Read the complete post at The New Persuaders.

Facebook’s New Gift Service: Nice, But Not Yet An E-Commerce Game Changer

From my Forbes.com blog The New Persuaders:

Just in time for prime gift-giving holidays like Friday’s World Rabies Day (or if you prefer, Ask A Stupid Question Day), Facebook today launched a social gift service. It’s rolling out to only a select few for now.

I must be one of them, because I was able to send something to my wife to try it out. But in its current form, I doubt I’m going to use it much.

This isn’t the 2.0 version of the Facebook Gifts virtual-gift service that the company shut down two years ago, by the way. In fact, the new Gifts is built upon, and run by, the folks at Karma, the gift-giving service Facebook acquired in May.

It actually looks pretty good. And while I have ordered precisely one gift that obviously has not yet been delivered, so I can’t judge the entire gift-giving process, it worked quite smoothly. I clicked on my wife’s Timeline, clicked the gift button, and off I went to order her some caramels. She can even pick her own flavor–that’s pretty cool.

In this case, I obviously know her address, so one advantage of Facebook Gifts–not having to know or ask for someone’s address–is moot in my case. What’s more, I didn’t get an automatic reminder I might get if it were her birthday, so that bit of friction elimination wasn’t a factor for me either. But it’s fast and easy to send gifts to friends, and that’s great–not just for consumers, but for Facebook, which can use a service that brings in revenues not dependent upon its brand of advertising that many large marketers are still doubtful about.

So what isn’t great, at least for me?

* A lot of the most prominent gifts are pretty vanilla–teddy bears, spa appointments, flowers, cupcakes. Maybe they’re fine products. Maybe they’re the sort of thing most people give their friends. But for a service with a tagline “real friends, real gifts,” too many of these products seem just too impersonal. Products, especially gifts, are not necessarily fungible, and all the less so for close friends for whom you’re supposed to be getting something special. And if they’re not close friends–and let’s be honest, most people don’t have several hundred close friends–I probably won’t be sending them many gifts, from Facebook or anywhere else. …

Read the complete post at The New Persuaders.

AWOL From Amazon’s New Kindle Fire Tablet Lineup? That (Mostly) Ad-Supported Model*

* Updated below.

From my Forbes.com blog The New Persuaders:

A few days ago, it looked like an ad-supported (read: cheap) Kindle Fire might be in the lineup introduced this morning at Amazon.com’s debut of new Kindles in Santa Monica.

Sorry, no dice. The company did introduce a lot of other products, of course, including a faster, cheaper, $159 version of the Kindle Fire with longer battery life, as well as new high-definition “HD” models–including, in something of a surprise, one that has a nearly 9-inch screen. The 7-inch version with 16 GB of memory will be $199, the original price of the first Kindle Fire. It will ship Sept. 14. The 8.9-inch version will be $299, $200 less than Apple’s iPad, and will ship Nov. 20.

Amazon CEO Jeff Bezos also pulled an Apple-like “one more thing” move by introducing a $499 8.9-inch Kindle Fire, also shipping Nov. 20, that has 32 GB of memory and much faster 4G data connections, though that service will cost $50 a year for 250 MB a month. That doesn’t seem like much data, at least for video streaming purposes.

On the more traditional e-book front, Amazon also showed a new Kindle called Paperwhite for $119 for a WiFi version and $179 for a free-3G version, as well as a newly named basic non-touchscreen Kindle now called the $69 Kindle. That one, $10 less than the previous version, is the ad-supported Kindle.

But it’s not the cheaper ad-supported Kindle Fire that some folks apparently had expected. * Update: To make it clear, as Amazon did not at the launch event, all of the new Kindle Fire models will have some advertising, or what Amazon calls “special offers” and “sponsored screensavers” that previously were only on the Kindle with Special Offers. So in a sense, the whole line has at least a small ad component that ultimately may have some impact on the price of the devices. But it still looks fairly minimal compared with the potential for a tablet whose cost could be substantially subsidized by ad revenues in a similar way that carriers subsidize cell phones. Although Engadget reported Amazon would soon allow buyers to pay a fee to avoid ads, CNET now reports Amazon has no immediate plans for that.

Why not a much cheaper, largely ad-supported model, given that it would have provided Amazon an additional way to differentiate itself from Google’s, Apple’s, and other tablets? …

Read the complete post at The New Persuaders.

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