Bradley Howard's Blog

Personalised advertising is good for users

Feb 21, 2012 at 1:29pm

Personalised advertising is getting a bit of a bashing in the news recently. The whole question over privacy is being questioned; that it’s an advantage purely for advertisers and no one else.

The critics have got it all wrong. It’s the public, whether they are a mobile, web or TV viewers, are the real beneficiaries.

Firstly, let’s take a look at what personalised advertising really means. When a person buys a car magazine, do they want to see adverts inside of:

Nappies
Washing powder
Cars

That’s an example of personalisation based on personas, or group of people. No one, that I’m aware of, would argue that nappy or washing powder manufacturers would want to advertise in a car magazine. I don’t understand why it’s any different on a website.

Now let’s move forward to personalised network advertising. This technology is based on how users move around a number of websites, who all use the same servers for their large adverts. Say a user visits a football club website regularly, and then they go to another website such as a news portal. They then see some adverts for their favourite team’s new home kit.

This is still based on personas because it assumes some trends indicate certain behaviour (in this example, a user visits a football club website regularly so they probably support that team). This is an advantage for both the advertiser (no point spending marketing money on loads of advertising banners aimed at everybody and anybody) and also the consumer – they see relevant ads.

The next step is individually targeted, truly personalised content. It’s what many supermarkets do, based on your commonly purchased items. It’s takes into account some trends, but mainly the specific individual.

Take the car example above. A user sees an advert on a website for a car. They end up buying the car (probably not based purely on the advert!) Personalisation will then stop the user from seeing worthless, same ads for the car and may replace them with insurance companies that specialise in that car market, and maybe even the demographics of the user.

This is an advantage of personalised advertising. It’s what shop keepers have been doing for centuries – understanding customers who walk into the shop (browse their website) and make targeted recommendations.

Car ad courtesy of Georg Schwalbach (GS1311) on Flickr

tags:

High Street, advertising, ecommerce, personalisation,

2 Comments

Review of my 2011 predictions

Dec 22, 2011 at 10:51am

Back in January I made 12 predictions for digital media for 2011. I did the same for 2010 - i.e. I made the predictions and then analysed them in December, and faired well. How did I do this year?

1. Rapid demise of Flash

Bang on here. We're witnessing HTML5 rapidly overtaking Flash, mainly because users want to view sites on their iOS devices, which don't support Flash. Flash for mobiles has been dropped in favour of Adobe Air - the problem with Air (an irony in the product name) is that it's too heavy for downloading over mobile: Adobe Air apps are very large. HTML5 is both very powerful and not linked to a specific vendor, which is exactly the type of technology web developers embrace quickly.

Prediction rating: 10/10

2. Local local local

The use of Google on mobile devices is increasingly rapidly, and one of Google's most powerful functions is to provide local results on mobile devices. Facebook Check In and FourSquare will continue competing in the future, providing more relevant functionality which is only good for end consumers.

Prediction rating: 10/10

3. LinkedIn to IPO

Yes, LinkedIn IPO'd in the summer at a market capitalisation of around $6bn. At the end of the first day of trading, shares were selling at over $94. They are now worth just under $65. The actual variance has been from $55 to $122. Personally I think the future is very bright for LinkedIn, as long as it sticks to it's core, professional-only values and steers cleer of Facebook.

Prediction rating: 10/10

4. More "paywalls" will increase the expectations of having to pay for content

I predicted that we'd see at least six mainstream publications start charging for online content. What was very difficult to predict was that this was going to be made possible via the iPad. The iPad has been the saviour of global newspapers by offering a simple charging model for content owners. Many newspaper websites are still free, but most apps charge for content. The main point is that user now expect to pay for content, but it took the shift to a new platform to illustrate this.

Prediction rating: 8/10

5. Financial Services move into social networks

Banks have had other things to worry about this year, and whilst many are dipping their toes into the water with Twitter and Facebook, I'm not aware of any doing it particularly well. Searching for the popular high street banks on Facebook returns a rather fragmented list. I expect this to change in the near future.

Prediction rating: 2/10

6. Facebook to follow Compuserve even more

Try and name a brand that isn't on Facebook. In January I said that we should expect a Skype messaging style interface and in July, we got Skype inside Facebook. I predicted we'd have a billion users by the end of the year, although this is unlikely to come true because in September, Facebook announced they'd broken through 800 million users - still an amazing feat.

Prediction rating: 8/10

7. A clear leader will emerge in Interactive TV

Interactive TV is now firmly called Smart TV, and no, a clear leader hasn't emerged yet. The remotes all look different, and operating systems are different, and with the latest XBox release, Microsoft is putting up a decent fight to use your games console as the Interactive device.

Prediction rating: 0/10

8. Rapid rise in CPC

I said that CPC rates would rise, and noted the cost of some terms. Here they are:

keyword	Cost in December 2011	Cost in December 2012
ebook	£0.55	£0.74
sandwich	£1.00	£1.05
drink	£1.00	N/A
laptop	£1.25	£1.31
paper	£0.75	£0.76

I estimated costs would increase at least 50% over the next year however they have mostly gone up a much smaller amount, with the exception of the highly competitive ebook market.

Prediction rating: 2/10

9. A $50 A5 eReader

I was $10 out - Walmart are selling an eReader for under $60. Bearing in mind there was nothing available for less than $120 at the start of the year, this demonstrates how mainstream eReaders have become.

Prediction rating: 6/10

10. App stores will decentralise, leading to confused customers (again)

The term app store has become abused. Now everyone has an app store whereas a year ago their product had an 'add-on'. If you go into a car showroom I'd half expect the optional extras to be available from an app-store! Fortunately the market hasn't become decentralised as predicted - to the benefit of end users.

Prediction rating: 0/10

11. The economy will continue to splutter

Obviously this has come true. I predicted that companies would need to start demonstrating clear revenues, including Twitter, and this has materialised as $140million this year.

Prediction rating: 10/10

12. Chrome to far exceed Firefox market share

Perhaps 'far exceed' is an exaggeration, however in early December Chrome overtook Firefox for the first time, and it's here to stay. I'm a big fan of Chrome for a number of reasons (all the settings are stored centrally "in the cloud", it auto updates seamlessly and it's very fast), and hardly use Firefox any longer.

Prediction rating: 8/10

So there we have it. Overall I was reasonably accurate with the predictions. I'm working on 2012 predictions, which feels more difficult at this time. Maybe it's the economy/ general outlook. Any help would be appreciated!

Photo courtesy of lacomj on Flickr

tags:

Adobe, Facebook, Firefox, Flash, Google Chrome, Kindle, LinkedIn, TV, advertising, apple, banking, ecommerce, economy, finance, iPhone,

4 Comments

Using Groupon and Quidco at Christmas

Dec 6, 2011 at 1:33pm

With so much industry news reported about Groupon, I was asked recently asked for my views on the Internet shopping/ deal site.

Firstly, I have been using a favourite deals site, Quidco, for several years, and this year Mrs H and I have done most of our Holiday shopping using the site, and earned a very nice cashback amount from the site. Quidco has a simple model - it uses the affiliate bounty that is a standard model across the Internet, and gives most of the money back to the end consumer (me) after taking £5 for the year.

There are hundreds, maybe thousands of deals and voucher sites on the Internet. If you type in your favourite retailer followed by the word ‘voucher’ into Google, you’ll find an amazing number. Now click on them and chances are you’ll be presented with tens of expired vouchers. With voucher sites, it’s a case of quantity over quality.

Groupon has just turned three years old. It’s model is to offer a limited number of products and sell them to the first consumers who buy those products. After the ‘inventory’ has been sold, the offer is removed from the site.

Deals discounts are usually in the 50-75% discount range. Its the retailer who offers the deals to Groupon, and Groupon takes a further commission in the product.

One of the issues that Groupon is facing is that not all retailers believe the deals are worth that level of discount. When Groupon started business three years ago, the aim was that buy generating a loss-leading sale, the consumer would like the service/ product so much that they would revisit the retailer later.

There are many flaws to Groupon’s business:

It’s a highly competitive market that is very easy to imitate, as demonstrated above
Retailers don’t really want to be part of Groupon’s world because the discounts are huge, and the commission to Groupon is a high part of the remaining amount (i.e. what the consumer will spend)

In November, Groupon turned three years old. It is now in 45 countries. It IPOd last month at $19 per share. A fortnight after floating the stock had halved in value, and is now back to $18.

Groupon’s Q3 2011 revenue was an impressive $430m. It hasn’t achieved a financial year in profit, although Q1-Q3 2011 it has made $22m profit.

In Q3 2011 it made $8m - an unimpressive 1.86% profit. Groupon has a market capitalisation of $12bn. It’s actually quite amusing to go to Google Finance and look at other NASDAQ companies that have a capitalisation less than Groupon, yet earn a good profit.

I don’t see how Groupon’s business is sustainable because of the flaws, and I think we’ll see a trend of ‘lower value’ retailers on the site, which will mean less visitors come to the site and destroying its business model.

In summary, if you’re looking for bargains this Christmas, take a look at Groupon for some ideas. If you are looking to simply have some cashback without any fuss, I highly recommend Quidco. And if you're looking for an investment opportunity, you should look a little deeper.

Photo courtesy of 401K on Flickr

tags:

High Street, affiliate, ecommerce, investment, trends, web traffic,

0 Comments

Amazon removing more cost centres

Nov 21, 2011 at 12:41pm

It’s quite rare in most industries for a market innovator to become the strongest company in the sector. Usually the market creator is overtaken by a more efficient competitor, who has more time to see what not to do. This has been the case with most industries, not just IT.

One of the first ecommerce web sites I remember using was Amazon. It reduced the cost of books by a huge factor and its recommendation engine is still seen as one of the best in any website. The fact that it launched in 1994 and is still one of the most profitable companies in the World is impressive.

In terms of financial scale, for UK readers, Tesco has a market capitalisation of £31bn and Amazon has a market capitalisation of $89bn. For US readers, Target has a market capitalisation of $35bn.

Turning costs into profits

One of the business initiatives that most people admire Amazon for is how they turn their costly IT organisation from a cost-centre to a profit centre - called AWS (Amazon Web Services). Essentially, running Amazon.com and all the international sites requires a massive amount of servers in data centres all around the world. When I visited one of our US data centres a few years ago we had an area (called a cage, because it is one) and our next door neighbour was a cage several times larger for Amazon.

Anyway, Amazon realised it had a huge IT infrastructure and converted the spare capacity into a facility enabling anyone else to use their infrastructure. Companies can rent this capacity on an hourly charge. And many companies do use it.

Amazon won’t release revenue figures directly, however some reports have estimated its more than $500m annually.

Marketplace

Another innovation that Amazon had to implement, this time by force was their Marketplace. eBay started taking some revenue away from Amazon, so Amazon started allowing third party sellers to sell products on Amazon.com. Fast forward to the present time, and it’s quite often that a consumer will buy something on Amazon, which is actually another merchant – whether it’s a sole proprietor or a multi-national organisation.

If a consumer currently buys something from Amazon, if it’s actually Amazon who sell the product, it will come from an Amazon warehouse and be delivered directly. If it’s a third party seller, Amazon have a clever interface (and contractual terms) which notify the seller to deliver the goods within a set time period.

Removing more cost centres

However the latest area that Amazon is moving into is fulfilment.

Amazon is encouraging merchants who use its platform to send their stock directly to Amazon’s warehouse and Amazon will take care of the rest. They’ll fulfil (pick and package) the order and deliver it to the customer. So if you sold glass vases, you would instruct your supplier to deliver a pallet of vases to an Amazon warehouse and spend all your time and energy making the Amazon pages look as good as possible.

This is ingenious for a number of reasons:

It turns Amazon from a traditional retailer who needs to buy a certain commitment of goods for x and sell at x + y% markup – into a risk free business because it doesn’t need to buy the goods up front
To compete against this model becomes ever more expensive, because the sheer capital infrastructure costs are now prohibitive
Amazon will increase its economy of scale for delivery costs
It encourages merchants to use Amazon as the primary channel, because Amazon performing merchant’s fulfilment requires less overheads and easier.

The fulfilment model is an interesting concept, because it turns retail and distribution into a service and it moves a lot of the risk (of buying the items up front) up the supply chain from the retailer (Amazon) to the distributor.

tags:

Amazon, cloud, eBay, ecommerce, retail,

0 Comments

A look at New York Times digital revenues

Oct 25, 2011 at 12:33pm

The New York Times has announced some details of it's online premium subscription (i.e. cash payment) model.

Full details

Digital

Digital businesses include NYTimes.com, BostonGlobe.com, Boston.com, About.com, other Company Web sites and related digital products. In the third quarter of 2011, total digital advertising revenues decreased 4.5 percent to $74.8 million from $78.3 million. Digital advertising revenues at the News Media Group increased 6.2 percent to $50.3 million from $47.4 million due to growth in retail and national display advertising. Digital advertising revenues as a percentage of total Company advertising revenues were 28.6 percent for the third quarter of 2011 compared with 27.3 percent in the third quarter of 2010.

In the first nine months of 2011, the Company's total digital advertising revenues increased 0.9 percent to $242.9 million from $240.7 million. Digital advertising revenues at the News Media Group increased 12.2 percent to $162.4 million from $144.7 million. Digital advertising revenues as a percentage of total Company advertising revenues were 28.2 percent for the first nine months of 2011 compared with 26.3 percent in the first nine months of 2010.

Paid digital subscribers to The Times digital subscription packages, e-readers and replica editions totaled approximately 324,000 as of the end of the third quarter of 2011. In addition to these paid digital subscribers, as of the end of the third quarter of 2011, The Times had more than 100,000 highly engaged users sponsored by Ford Motor Company's luxury brand, Lincoln, who have free access to NYTimes.com and smartphone apps until the end of the year, and approximately 800,000 home-delivery subscribers with linked digital accounts, who receive free digital access. In total, The Times had paid and sponsored relationships with over 1.2 million digital users as of the end of the third quarter of 2011.

Source: The New York Times Company

My interpretation

In the last quarter, there were 1.2 million registered users, of whom 324,000 paid something, and 100,000 were paid for by Ford (a great subscription model as long as there are no catches for either party) and 800,000 were covered by their print subscription. In other words, they have a churn of about 25%.
The site has 45 million unique visitors per month as of January 2011 - it's interesting that they use comScore to quote that 45 million. ComScore use an estimated data model, as opposed to NYT using their own actual data.
Anyway, 45 million unique users and 324,000 have paid something - that's a conversion rate of less than one percent, however paid for content is still very much in its infancy.
Those 45 million users probably don't include Smartphone users or e-readers (hats off to ComScore if that can get that data, however I suspect they can't).
Doing some extremely rough sums, subscriptions are 99 cents for the first 4 weeks and then $3.75 per week thereafter. Let's ignore the special offer price and let's assume Ford pay a full $3.75 per user. Ignoring the print subscribers who get the digital edition for free, that's a total revenue of $1.59 million per week. Let's assume NYT earned this revenue throughout the entire quarter (12 weeks), that's a total of $19 million for the quarter.
Digital advertising across the group (and this includes a number of other websites and newspapers) generated $74.8 million.

Lessons to take away from this quarterly statement

The premium digital content model still has a way to go - advertising still generated four times the revenue as subscribers.
'Wholesale' or 'sponsored' user bases are key drivers for the number of paid for subscribers - Ford pay for 100,000 users and NYT have 324,000 paying individual subscribers. Think of the effort that goes into the Ford deal compared to the direct to consumer sales effort.

tags:

analytics, business, content, digital media, ecommerce, economy, freemium, news, sponsorship, subscription content,

1 Comment

Identity crisis

Sep 7, 2011 at 12:51pm

The photo above was taken eight years ago and shows my parents and my identical twin daughters Shelley and Natalie. I'm pretty certain that it's my dad on the left and my mum on the right, however I can't tell which baby is Shelley or Natalie.

Before I joined IMG I worked for a Finnish telco company called Sonera. At Sonera we enabled consumers to use mobile phones to 'sign' - to prove their identity. We used the SIM card in the phone as a secure, unique system. At the time (late 1990s) the system was designed from the ground up to be secure enough to sign mortgage papers.

As the Internet has matured over the last few years, the issue of identity hasn't gone away, however it has changed subtly. It's now possible to create an anonymous Twitter user, build up a few hundred followers and start a malicious rumour. This is why I find it hard to digest newspapers who reference Twitter for their news content.

It is quite secure for consumers to run a Google search for a product, land on a site they've never seen before, and hand over their credit card details. The main reason for this security is that your card issuer (bank) will provide a level of reimbursement if the website fail to deliver the goods.

However we are soon going to find that it's necessary for end users, the consumers, to have a valid identity.

We've read how some of the people accused in the British riots have been banned from using their Facebook account (which is ridiculous because they probably phoned someone as well, yet their mobile isn't being revoked, but I digress). There is nothing to stop that person from creating a new Facebook account straight away. In fact, Facebook's friend suggestion tool is so accurate that it will help recreate all that user's friends as well.

In order for the Internet to truly grow up and allow us to vote online and perform all the duties we've previously done in the Post Office, we need to sort out digital identities. Digital identities in the UK have always been seen in a negative light, despite the irrational xenophobic fear whipped up by some of our national newspapers. However we're going to need to jump over this fear if we can issue these digital identities.

These digital identities will be used to sign into most websites and will work across mobile, web, TV and anything else that springs up.

In order to apply for a digital identity, financial services organisations will require stringent checks - just like a passport, but probably with someone physically checking the photos and documents face to face. This is why Facebook Connect isn't the right platform for an Internet-wide ID platform.

The Internet is truly global, and the identities will need to work globally too. They will probably be government run, although it's feasible for some of the larger financial services companies to run them.

Like so many technology vendors, Sonera was doing the right thing, just at the wrong time - about 15 years too early.

tags:

Facebook, digital media, ecommerce, identity, legal, mobile, payment,

1 Comment

Why Internet scams are becoming harder to detect

Jul 21, 2011 at 9:04am

Internet scams are becoming more and more elaborate and easier to fall for, according to the Howard household. Here are two scams that we've experienced in the last couple of months:

Trial products

Mrs H signed up for a trial product which arrived quickly and was good value at £29.95. The next month we noticed a number of significant transactions on our credit card (we always use the credit card for Internet purchases so that we can appeal to the credit card company, rather than having to claim back money into our own debit account).

We called the company we'd bought the trial from, and they asked us to look at the terms and conditions of the trial.

How often do you check the terms and conditions on ecommerce sites? How often do you even click through to the terms and conditions page?

On this site, number one term was "the cost of the product will be £200 from the second month".

The second term was that we would be automatically registered and charged for other products.

Luckily, the person on the phone was extremely rude and ended up putting the phone down on us. I called the credit card company who, as soon as I said I think we've fallen for a scam, they said "Is it xxxxxxx company, because we've had a number of complaints about them, however they are adamant they are not hiding anything, it's all in the terms and conditions. It's morally wrong, but not illegal."

I then wrote an email to the company and focussed on the rude phone support rather than the product, and they agreed to refund the additional items and the second month's "full" cost.

The trust had already been broken and I asked the credit card company to reinssue our cards with new numbers, so there was no way we could be charged at a later point.

A few key lessons from this:

Read the terms and conditions. Even if it's a quick glance, it's important to read them.
Always use a credit card and not your debit card for Internet purchases.
If you regularly buy from Internet sites, I think it's worth changing your card number from time to time (even if it's every couple of years).

Viruses

We haven't had a virus on our home PC for several years. I make sure our anti-virus software is regularly up to date and configured correctly. The kids also have parental controls on their accounts, which prevents them going to many sites.

This morning Mrs H woke me up and called me over the computer to show me the screenshot below:

At first glance, I looked at it and agreed that it looked like we had a virus. I paused, and thought "Why is this screen inside Internet Explorer?" and then I realised it was just an elaborate web page.

Mrs H had been looking for a photo to use on a birthday card (she'd searched on Google Images) and when she clicked on a site, this came up.

I've seen a number of virus warning ads and websites over the years, but this one was the most accurate-looking of them all.

A few key lessons if you see a virus warning:

Take a screenshot (just press the Print Screen button, and email it to yourself in Gmail/ Hotmail). You might need this evidence later.
Close all windows and applications.
Open anti-virus, and run a scan. Only follow instructions from your anti-virus program, nothing else.

tags:

Microsoft, ecommerce, google, legal, scams, virus,

1 Comment

What bricks and mortar can teach ecommerce

Jul 8, 2011 at 4:52pm

A very nice man came round to our house one night this week and interviewed Mrs H about her shopping habits online.

This was part of some research that a cross-supermarket industry body is conducting into home shopping. He wanted to find out as much about her online shopping habits as possible.

The questions were fascinating - all centred around habits which can't be tracked online. "How many supermarkets do you shop with?" "Have tried using Tesco Click and Collect?" "Have you tried the new Sainsbury iPhone App?" He asked her if she recognised a QR code (no, not the specific code... it was whether she knew it was a QR code, and yes, she did).

The man even wanted to see where in the house the computer she does her online ordering from is located. He noted that we had wireless in the house and asked if her iPhone used the WiFi network. He showed photos of Tesco in Korea who are using QR codes in a subway station to let customer order food while waiting for a train - shown in the video above.

The interview got me thinking about what I could do to improve a website if I was a supermarket chain. And it didn't strike me until I went to buy some ground coffee from the local supermarket one morning.

I went in to buy the coffee and looked at the shelf. Do I want Tesco brand or a non-Tesco brand? Fair trade or not? Strength 1,2, 3, 4 or 5? There's a special on that one over there. The one next to it has more coffee and works out cheaper though.

And that's what you can't do online. Most people shopping online, especially for groceries, know specifically what they want to buy. But people who go into shops can buy additional items on impulse. Something catches their eye and ends up in the basket or trolley.

It happens with items other than groceries as well. A customer goes into a mens clothes shop for a shirt. And they see another shirt or cufflinks or a tie and maybe end up buying all three.

This isn't a case of "related products" or "suggested products" - it's impulse buying. I don't think I've bought many things on impulse from Amazon, and Mrs H claims it never happens when buying groceries online. However when we go shopping in a "real world" supermarket, we'll always buy at least one thing we didn't set out for.

To make this happen, screen design needs to radically change from a single product per page, to a shelf-style, where a customer can see a variety. Most ecommerce sites aren't designed or built to show variety (with the exception of colours or sizes). It's the opposite to real world shops where you never see a single product style on a shelf.

tags:

creative, design, ecommerce, usability, website production,

0 Comments

Learning from eBay timing

Feb 17, 2011 at 3:30pm

Several few years ago I got really involved selling stuff on eBay, became a PowerSeller for a few months and turned over a nice revenue, until the choice was to give up my main job and go into eBay full time. I decided to concentrate more on my main job, and well, the rest is recent history.

One of the things I learnt from eBay was that when it comes to auctions, timing is 90% of the story.

There was little point creating an auction that would finish at say, 11am on a Monday morning. The end of the auction was when there would be the highest number of bids, and Monday morning was a poor time for attracting traffic to the bid.

I used to list items on the weekend, and pay a few pence extra for a 'Scheduled start'. After some trial and [lots of] error I would schedule for items to finish at around 5.30 or 6pm on Tuesdays and Thursdays. On items to do with the home, I would schedule for auctions to finish on a Sunday evening.

I've noticed that timing is once again really important when it comes to Twitter, Facebook and LinkedIn statuses. Actually, the same is true of any status update. If someone (or a brand) continually updates a status, any previous status falls down from prominence very quickly. End users will probably be following tens, hundreds or sometimes thousands of other users/brands, so the timing between status updates is absolutely key.

I now find I'm using the same practices for writing blog articles and Twitter updates.

I write almost all the week's blog posts on a Sunday morning, and delay them being made public - trying to stagger them over the week. Also, I try to choose a decent time when they are made public (which then posts to my Twitter page, Facebook, LinkedIn, etc.). If I made them all public in one go, especially on a Sunday, only the most recent one would get any traffic.

Posterous has an excellent scheduler for blog posts. For my Twitter feed, I use either Timely, which has been written specifically to address the timing issue above, or sometimes TweetDeck. Timely is OK, but provides pretty random scheduling (you can't provide a time - the system does it for you). I find TweetDeck is one those applications that tries to be all things to all people, and ends up being unusable to all of them as well, so in practice I tend to use Timely more often.

Photo courtesy of LenP17 on Flickr.

tags:

Facebook, LinkedIn, blogging, business, eBay, ecommerce, marketing, twitter,

0 Comments

Site review: Zoomumba

Feb 14, 2011 at 11:21am

Thanks to Alan for contacting me and asking me to highlight up and coming new sites on the blog. One of the issues I have here is that I get sent so many sites each week - by email and Twitter, that it's difficult to do a review on all of them. Also, I'd rather to stick to the sites that I think are going to be successful rather than point to the many poor ones.

Chances are, if you have children, you already know about Zoomumba. It was introduced by my nephew to my son a fortnight ago, and now my eldest three are hooked. My wife too.

The site takes the Sims-like concept of creating a zoo, and puts it inside a browser. The typical, get-more-virtual-money-to-buy-more-attractions aim of the game seems to be addictive to my family!

From my perspective, the clever part of the game is the virtual currency element - you can only earn silver 'coins' inside the game to buy more attractions (e.g. animals, rides, amenities, merchandise shops, etc.). To collect gold coins though, well, you have to buy these with real money.

On Friday I joked with my wife that the kids will just need to spend more time collecting silver coins rather than trade our hard earned real cash for virtual stuff. At which point she owned up that she had let the kids "buy" some of the virtual currency. I won't report on the rest of the conversation.

Here's a related thought though - this week, VISA bought a virtual currency company, Playspan, for $190 million in cash. PlaySpan raised $18m in funding from Vodafone and Softbank last August, raising the total funding to $42m in three rounds.

Inside Network estimated that virtual goods in social games grew to $1.6 billion in revenues in 2010. I know where £2 of the 2011 revenues can be attributed.

tags:

business, ecommerce, economy, site review, technology,

0 Comments

Tags

Personalised advertising is good for users

Review of my 2011 predictions

Using Groupon and Quidco at Christmas

Amazon removing more cost centres

A look at New York Times digital revenues

Identity crisis

Why Internet scams are becoming harder to detect

What bricks and mortar can teach ecommerce

Learning from eBay timing

Site review: Zoomumba

Bradley Howard

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