Sunday, March 27, 2005

Exclusive interview with Mr. David Yancey, Vivante

The second interview is with Mr. David Yancey, founder of Vivante and owner of Proactics Partners. Proactics Partners is a privately held software developer, Internet applications designer, and interactive strategy consulting firm. They develop web-based product and service concepts, develop proprietary software applications, and design and develop interactive software platforms and websites. Also, he is well-known in the marketing world because of his useful contributions on several popular discusssion lists and forums. You can find more info about David Yancey and his work at http://www.proactics.com

Dejan Bizinger)
What do you think about current Internet advertising industry?

David Yancey) The industry is very strong, as everyone now realizes. I was sure this would ultimately be the case, from when I founded the “ibiz” small business newsletters group in 1999.

One reason online advertising is growing steadily is that larger advertisers are beginning to shift significant campaign dollars to “interactive” from traditional advertising channels. In 2000-2001, when the so-called “Internet bubble” burst, many wondered why the major consumer advertisers were not jumping in, to take advantage of the great advertising bargain opportunities. But these companies and their ad agencies did not then have the specific performance data that showed how effective interactive advertising can be. Now, five years later, the data is available, and it shows dramatically superior ROI in many cases. Naturally, therefore, the larger marketers are responding with major budget B2B, or “business to business” online advertising is similarly picking up. In this sector, it is mainly due to the maturing of “paid search” and its PPC options that have motivated businesses to move their ad
budget online.

Finally, the recent move of search sites into local-area search is changing the allocation of advertising and promotional budgets among smaller and locally-focused businesses. These could not cost-effectively use the web until just about 3 months ago. In hard numbers, the growing list of local search, and, more importantly, geographically-targeted contextual ads, means that, over the coming five years, about 3-4 *million* businesses will become online advertisers. This means a growth in the number of paying advertisers of about 1000% in just five years!

As local targeting becomes more sophisticated, we will see perhaps 60% of the advertising budget that is now allocated to local newspapers and Yellow Pages directories shift from print to online channels. In global dollars, this means that by 2010, total global “interactive” advertising could well be more than US$25 *billion*. I realize that my forecast is *much* higher than those of say, Kelsey Group, or JupiterMedia. But in my opinion, these analysts do not fully understand the nature or scale of the coming shift in budgets, especially among smaller advertisers, and among advertisers not located in North America.

DB) Do you think that email publishing will be replaced with blogs or RSS?

DY) In a single word, no.

Do not mistake my meaning, please. RSS and the blogs RSS drives are very important, and are growing fast. All epublishers need to be exploring how to include blogs in their total mix. Similarly, many companies can employ blogs effectively to highly targeted sub-audiences.

We are planning a series of blogs for this year. But, even though we support this new trend, for the foreseeable future, blogs will be *additive* to the total online information flow, not an effective substitute, at least for epublishers.

Let’s explore why we have reached this conclusion.

First, the ordinary person is still not aware of what a “blog” is. Almost *no* typical non-webbie user I speak to at dinners and the like has installed an RSS reader, or knows where to begin, or even clearly understands why they should.

SPAM is not enough of a reason, I’m sorry to say, to change the preferences or email behavior of most ordinary users. Few non-web-specialist people actually get so much spam that they feel they need to receive their newsletters via an RSS aggregator. And, thanks to better filtering by the major free email providers and the various email clients, much SPAM can be eliminated from the ordinary user’s in-box, even without identifying and shutting down the SPAMmers.

RSS can eliminate the problem of email-hosted trojans, worms, and viruses, but this, too, as serious a problem as it has become, will not soon drive the average user to demand RSS for her newsletters or announcements.

Consider that for hundreds of millions, email is still simply the most convenient way to receive messages. The typical user needs to contend with a *variety* of messages each day, including personal ones, newsletters, *desired* commercial reminders and information, *desired* greeting cards and similar pass-alongs from their friends, news updates, and, don’t overlook, often critical update or reminder messages from their suppliers, vendors, software makers, and others.

We “pro” level users also tend to downplay the very large number of users who consciously opt-in for marketers’ information announcements and reminders because they *want* them. And, lest we forget, email remains the best way (in the eyes of the recipients) to deliver most documents and attachments.

There are other reasons, mostly technical ones, that RSS will be, for the time being, an *auxiliary* delivery system, no matter how clever or handy it is for those who are acclimated to the idea of a news reader.

But what about the advantages and simplicity of RSS-based publications? Well, true enough, these are substantial, so RSS feeds will doubtless grow rapidly. For an “always on” type of user, RSS can be a useful tool.

But the typical user is not “always on”. Indeed, perhaps 70% of all web users globally do not even own their own PC. As usage in India, China, and Latin America increases, this proportion will likely *rise*, not fall, in the coming five or ten years, as more and more people go online via schools, community centers, libraries, kiosks, and cafes, to do their limited surfing, research, shopping, and email tasks.

As individual publishers and sellers, we of course need to need to target our intended audiences. So, while it is probably true that most North America- or Europe-based web companies won’t care about the rest of the world’s users, we, as an industry, need to make sure that all potential users are included, so that we can continue to drive audience “reach” numbers up, and drive unit publishing costs down.

The point? So long as email is pervasive, free, and easy to use, it will be (in terms of numbers) the prevalent message distribution medium. It is therefore in everyone’s interest to find better ways to block SPAMmers. And, since I predict email in some form will be with us for many years to come, it will continue to be a requirement for newsletter publishers to offer this form of delivery along with RSS.

DB) What is your opinion about future Internet trends?

DY) What a big question, Dejan! You kindly used the word “opinion” so it would be easy to just throw out any answer. But I have to plan for the future of our group, and we do not have any money to waste, so, actually, I take this question very seriously, every day.

The rapid evolution in interactive advertising formats and media channels is certainly one major trend. The adoption by many hundreds of millions of new users in less-developed regions is another. The migration of web-hosted information to mobile formats is big, for sure.

On the negative side, the explosive issue of poor security is hugely important, from the browser and individual PC, to WIFI networks, to spyware and trojan threats, to phishing schemes, all the way up to ill-protected databases of major credit reporting companies. But this negative trend will, I predict, result in a next-generation approach to operating systems, user data security, and secured networking that, in turn, could actually make Internet use grow even faster.

The problem is that it will take at least five years for this transition to a safer, more confident, less frustrating user experience. The coming few years will see many more problems than viable solutions, I fear. So this will be a barrier that impedes to a degree the growth of the user base, especially among less sophisticated users. At the same time, the security, privacy, and fraud problems are creating hundreds of niche opportunities for specialized sites and software companies. A great example is www.grisoft.com, the small Czech firm that is doing such a great job with its AVG anti-virus product.

Beyond these obvious trends, the most important development I know of is the continuing migration to “interactive communities”. This trend is so important that I have begun writing a book about it.

Online communities are not new, of course. In fact, the original “world wide web” was such a community, one made up mostly of scientists, engineers, teachers, and research specialists. Over the past decade, we have seen numerous communities evolve, ranging from thousands of special-interest sites to dating sites to sports sites to massive portals. Far from exhausting the possibilities, however, we have just begun to develop the various types of venues where people like to come together.

The next wave of evolution will be huge in impact, because it will bring a new generation of geographic communities. These will go far beyond the quaint, quirky, semi-elitist types of online communities such as www.craigslist.org. We will see, in my *opinion*, the beginning of the end of local newspapers, as their advertising and content migrate online, and there, begin to merge with locally-oriented broadcast media. The result will be a kind of community that truly reflects the local interests of most of its members. Unlike the early attempts in this area, these will be economically viable, thanks to targeted interactive advertising.

As these local-centric interactive communities form, we’ll see them focus more and more specifically on the interests of their regular membership. Don’t be surprised to see multiple such communities form in a single geographic area, as users find those they want to interact with on a regular basis, and tend to exclude others. The class and social implications of this trend will be profound, but are too complex to go into here.

Continuing the ideas from the first question, above, as these communities evolve and develop more features and special tools for their specific members, we will see a second wave of advertising budget migration to “online”. This wave will see a large proportion of broadcast media dollars switching from cable and network TV, and especially radio, to interactive channels.

Similarly, we will see many so-called “destination sites” for special interests develop into truly interactive communities. www.ivillage.com is one well-proven model of this trend. Just as with the locally focused communities, we can predict that these “focused interest” communities will steal advertising market share from other media, as they prove their demographic, retention power, and “stickiness”. Specialty magazines are particularly at risk from this trend.

A distinguishing characteristic of these new-generation interactive communities, again, in my opinion, is that they will incorporate “niche” or so-called “vertical search” as an integrated part of the community platform. It makes sense: if a user has already arrived, say, at her favorite cooking community site, and now wants to search for related products or information, there is no good reason she needs to go to a separate search site.

By the way, this move toward “distributed search” is a main reason we designed our new search platform to “fit” gracefully *within* the confines of a third-party “parent” site, even taking on its look and feel, as opposed to the design approach of our own Vivante site.

DB) Please describe your Vivante project?

DY) www.vivante.com is our first entry into the fast-growing
paid-search market.

I believe that in time, users will learn to regularly use three or even more search sites to find the information they need. Younger people are less patient, and think (unrealistically) that one single site, like Google, can meet the finding needs of all people, on all topics.

Vivante is designed to appeal to the premium search user audience. We specifically want to support grown-ups find things that are associated with their special interests.

We think older users have search needs and preferences that are very different from those of the typical younger or web-specialist user. Vivante is therefore concerned with those needs. As a result, we don’t care if most student-level users or technically-oriented people don’t care for our approach. Similarly, searchers interested in “right now” news and sports won’t expect to see that information in Vivante.

The key to implementing our market vision is to have a platform that can be quickly adapted to meet specialized search needs. Vivante is driven by our “find engine” listings management system. What this means in simple terms is that the Vivante site is just one of potentially hundreds of search-based websites, each one aimed at one specific “niche”, but all sharing one very efficient and universally adaptable “listings management platform”.

In time, this flexibility will let us create many problem-specific search-based sites, both for our own group, but also, for third parties. We envision a very powerful shopping site, for example, one that goes far beyond the limited capabilities of Froogle and Shopping.com.

Thanks to our design platform generalization philosophy, we have a powerful navigation toolkit, and can experiment with many ways of helping users find what they want in our database. For example, we are developing a set of “user search preferences” options that provides several “firsts” in this key area.

Our architectural approach also allowed us to develop a “topical mapping” scheme that lets us set up macro- or cross-referential topic groups in a manner of minutes, including updating our search index “on the fly”. This makes it possible to create new “Power Topics” in real time, such as would be useful for bringing together all available information relating to a breaking news story, for example.

Vivante was, as many know, the first search site to solve (in May 2002) the problem of effectively integrating conventional search listings and “local” search listings. Now, “local search” has become the hottest trend in search. But the main engines are still basically adapting Yellow Page-type listings to their platforms. Our design goes deeper than this, building a truly integrated page of results. We do not have any Yellow Page listings, however, but acquiring these is a simple step, if funding is available.

DB) What is your best site?

DY) www.vivante.com is our primary site, and by far the most important one we have built so far. Our www.adjunction.com site, where we sell and service paid search accounts, was also a major effort.

Both sites employ a very complex MySQL database, and both use relatively sophisticated PHP and JavaScript elements that enable us to support the user better.

But our efforts so far are just baby steps.

I have been involved with database design, online queries, and commercial applications for four decades, so, when we turned our attention to finding a better way to help users find web pages online, I had the advantage of having made just about every mistake one can make in this field. At least once!

I expect that we and other designers will find many more new answers that help people find things faster and with less hassles and frustrations.

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Copyright(c) 2005 Dejan Bizinger If you want to reprint this interview
please contact me at dejan [at] bizinger.biz?subject=Re-print

2 Comments:

Anonymous Mass Submitter said...

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