See original post at cdixon.org – chris dixon’s blog:

Companies that employ the “freemium” business model give away a product or service for free and then charge for additional features. The freemium model has gotten more popular as the cost to deliver free services has dropped but the cost of employing sales and marketing people hasn’t. One of the hardest questions around freemium models is deciding how to divide free from paid features.

One particularly effective version of freemium is: “give away the diagnostic, sell the remedy.” The most striking example of this is anti-virus companies that give away free virus scans but charge for virus removers. In fact, this tactic works so well for anti-virus that it almost seems coercive (and indeed has been abused by “anti-spyware” software that, for example, started conflating cookies and viruses). But, in general, giving away a diagnostic seems like a reasonable way to demonstrate the effectiveness of a product while still being able to sell valuable additional features.

Selling the remedy has become increasingly popular with B2B companies. For example, recently a friend wanted to make sure his company’s (non-spam) e-mails weren’t getting blocked by spam filters, so he contacted a company that specializes in “email delivery optimization”. They ran a free test and reported back that his emails weren’t getting blocked. Two months later they called back and said “uh oh, your emails are getting blocked.” Sure enough his open rates had dropped and his anecdotal tests confirmed that his emails were being inaccurately labelled as spam. He now had confidence in the email delivery company’s technology, and was willing to pay them to fix his problem.

See original post at cdixon.org – chris dixon’s blog:

Companies that employ the “freemium” business model give away a product or service for free and then charge for additional features. The freemium model has gotten more popular as the cost to deliver free services has dropped but the cost of employing sales and marketing people hasn’t. One of the hardest questions around freemium models is deciding how to divide free from paid features.

One particularly effective version of freemium is: “give away the diagnostic, sell the remedy.” The most striking example of this is anti-virus companies that give away free virus scans but charge for virus removers. In fact, this tactic works so well for anti-virus that it almost seems coercive (and indeed has been abused by “anti-spyware” software that, for example, started conflating cookies and viruses). But, in general, giving away a diagnostic seems like a reasonable way to demonstrate the effectiveness of a product while still being able to sell valuable additional features.

Selling the remedy has become increasingly popular with B2B companies. For example, recently a friend wanted to make sure his company’s (non-spam) e-mails weren’t getting blocked by spam filters, so he contacted a company that specializes in “email delivery optimization”. They ran a free test and reported back that his emails weren’t getting blocked. Two months later they called back and said “uh oh, your emails are getting blocked.” Sure enough his open rates had dropped and his anecdotal tests confirmed that his emails were being inaccurately labelled as spam. He now had confidence in the email delivery company’s technology, and was willing to pay them to fix his problem.

See original post at cdixon.org – chris dixon’s blog:

Companies that employ the “freemium” business model give away a product or service for free and then charge for additional features. The freemium model has gotten more popular as the cost to deliver free services has dropped but the cost of employing sales and marketing people hasn’t. One of the hardest questions around freemium models is deciding how to divide free from paid features.

One particularly effective version of freemium is: “give away the diagnostic, sell the remedy.” The most striking example of this is anti-virus companies that give away free virus scans but charge for virus removers. In fact, this tactic works so well for anti-virus that it almost seems coercive (and indeed has been abused by “anti-spyware” software that, for example, started conflating cookies and viruses). But, in general, giving away a diagnostic seems like a reasonable way to demonstrate the effectiveness of a product while still being able to sell valuable additional features.

Selling the remedy has become increasingly popular with B2B companies. For example, recently a friend wanted to make sure his company’s (non-spam) e-mails weren’t getting blocked by spam filters, so he contacted a company that specializes in “email delivery optimization”. They ran a free test and reported back that his emails weren’t getting blocked. Two months later they called back and said “uh oh, your emails are getting blocked.” Sure enough his open rates had dropped and his anecdotal tests confirmed that his emails were being inaccurately labelled as spam. He now had confidence in the email delivery company’s technology, and was willing to pay them to fix his problem.

See original post at cdixon.org – chris dixon’s blog:

Companies that employ the “freemium” business model give away a product or service for free and then charge for additional features. The freemium model has gotten more popular as the cost to deliver free services has dropped but the cost of employing sales and marketing people hasn’t. One of the hardest questions around freemium models is deciding how to divide free from paid features.

One particularly effective version of freemium is: “give away the diagnostic, sell the remedy.” The most striking example of this is anti-virus companies that give away free virus scans but charge for virus removers. In fact, this tactic works so well for anti-virus that it almost seems coercive (and indeed has been abused by “anti-spyware” software that, for example, started conflating cookies and viruses). But, in general, giving away a diagnostic seems like a reasonable way to demonstrate the effectiveness of a product while still being able to sell valuable additional features.

Selling the remedy has become increasingly popular with B2B companies. For example, recently a friend wanted to make sure his company’s (non-spam) e-mails weren’t getting blocked by spam filters, so he contacted a company that specializes in “email delivery optimization”. They ran a free test and reported back that his emails weren’t getting blocked. Two months later they called back and said “uh oh, your emails are getting blocked.” Sure enough his open rates had dropped and his anecdotal tests confirmed that his emails were being inaccurately labelled as spam. He now had confidence in the email delivery company’s technology, and was willing to pay them to fix his problem.

See original post at cdixon.org – chris dixon’s blog:

Companies that employ the “freemium” business model give away a product or service for free and then charge for additional features. The freemium model has gotten more popular as the cost to deliver free services has dropped but the cost of employing sales and marketing people hasn’t. One of the hardest questions around freemium models is deciding how to divide free from paid features.

One particularly effective version of freemium is: “give away the diagnostic, sell the remedy.” The most striking example of this is anti-virus companies that give away free virus scans but charge for virus removers. In fact, this tactic works so well for anti-virus that it almost seems coercive (and indeed has been abused by “anti-spyware” software that, for example, started conflating cookies and viruses). But, in general, giving away a diagnostic seems like a reasonable way to demonstrate the effectiveness of a product while still being able to sell valuable additional features.

Selling the remedy has become increasingly popular with B2B companies. For example, recently a friend wanted to make sure his company’s (non-spam) e-mails weren’t getting blocked by spam filters, so he contacted a company that specializes in “email delivery optimization”. They ran a free test and reported back that his emails weren’t getting blocked. Two months later they called back and said “uh oh, your emails are getting blocked.” Sure enough his open rates had dropped and his anecdotal tests confirmed that his emails were being inaccurately labelled as spam. He now had confidence in the email delivery company’s technology, and was willing to pay them to fix his problem.

See original post at cdixon.org – chris dixon’s blog:

Companies that employ the “freemium” business model give away a product or service for free and then charge for additional features. The freemium model has gotten more popular as the cost to deliver free services has dropped but the cost of employing sales and marketing people hasn’t. One of the hardest questions around freemium models is deciding how to divide free from paid features.

One particularly effective version of freemium is: “give away the diagnostic, sell the remedy.” The most striking example of this is anti-virus companies that give away free virus scans but charge for virus removers. In fact, this tactic works so well for anti-virus that it almost seems coercive (and indeed has been abused by “anti-spyware” software that, for example, started conflating cookies and viruses). But, in general, giving away a diagnostic seems like a reasonable way to demonstrate the effectiveness of a product while still being able to sell valuable additional features.

Selling the remedy has become increasingly popular with B2B companies. For example, recently a friend wanted to make sure his company’s (non-spam) e-mails weren’t getting blocked by spam filters, so he contacted a company that specializes in “email delivery optimization”. They ran a free test and reported back that his emails weren’t getting blocked. Two months later they called back and said “uh oh, your emails are getting blocked.” Sure enough his open rates had dropped and his anecdotal tests confirmed that his emails were being inaccurately labelled as spam. He now had confidence in the email delivery company’s technology, and was willing to pay them to fix his problem.

See original post at cdixon.org – chris dixon’s blog:

Companies that employ the “freemium” business model give away a product or service for free and then charge for additional features. The freemium model has gotten more popular as the cost to deliver free services has dropped but the cost of employing sales and marketing people hasn’t. One of the hardest questions around freemium models is deciding how to divide free from paid features.

One particularly effective version of freemium is: “give away the diagnostic, sell the remedy.” The most striking example of this is anti-virus companies that give away free virus scans but charge for virus removers. In fact, this tactic works so well for anti-virus that it almost seems coercive (and indeed has been abused by “anti-spyware” software that, for example, started conflating cookies and viruses). But, in general, giving away a diagnostic seems like a reasonable way to demonstrate the effectiveness of a product while still being able to sell valuable additional features.

Selling the remedy has become increasingly popular with B2B companies. For example, recently a friend wanted to make sure his company’s (non-spam) e-mails weren’t getting blocked by spam filters, so he contacted a company that specializes in “email delivery optimization”. They ran a free test and reported back that his emails weren’t getting blocked. Two months later they called back and said “uh oh, your emails are getting blocked.” Sure enough his open rates had dropped and his anecdotal tests confirmed that his emails were being inaccurately labelled as spam. He now had confidence in the email delivery company’s technology, and was willing to pay them to fix his problem.

See original post at BRYCE DOT VC:

Tuesday a video surfaced that inspired the online world. The reactions I saw from many across my social networks were of awe and a longing to achieve their own dreams of human flight. The link was tweeted, liked and fav’d all across the web, racking up millions of views on Youtube.

it didn’t take long for the skeptics to surface. And the next day, Wednesday, Wired started to find cracks in the wingman’s story. 

Although Wired’s preliminary analysis by physicist Rhett Allain suggests the video is not necessarily a fake, computer graphics and other experts are highly skeptical. What’s more, Wired could not confirm Smeets’ education and employment information posted on Facebook and LinkedIn.

A LinkedIn page for Jarno Smeets, which is linked from Smeets’ website, says that he worked at Pailton Steering Systems from 2008 to 2010. John Nollett, the group managing director for Pailton Engineering Limited, said there is no record of anyone by such a name.

Wired also contacted Coventry University in the UK, where Smeets’ online profiles claim he attended school from 2001 to 2005.

The university’s student records staff searched their full digital records database, which contains students’ names who attended from 1986 to the present. They told Wired they found only one entry for anyone by the last name of Smeets: Alexandra Smeets, who attended from 1999 to 2000. No record for Jarno Smeets could be found.

By Thursday, the creator of the video outed himself on Dutch TV as the filmmaker and animator Floris Kaayk, not the engineer and inventor Jarno Smeets. The video was, in fact, a hoax, er, art project. 

Watchdog groups are nothing new. They’ve been around for decades. But I think what we’re seeing now is an entirely new type of network effect that marries data, distribution and action.

One example of this that’s captured my imagination of late is Anonymous Analytics. 

From their website:

Anonymous Analytics, a faction of Anonymous, has moved the issue of transparency from the political level to the corporate level. To this end, we use our unique skill sets to expose companies that practice poor corporate governance and are involved in large-scale fraudulent activities.

We provide the public with investigative reports exposing corrupt companies. Our team includes analysts, forensic accountants, statisticians, computer experts, and lawyers from various jurisdictions and backgrounds. All information presented in our reports is acquired through legal channels, fact-checked, and vetted thoroughly before release. This is both for the protection of our associates as well as groups/individuals who rely on our work.

This is not your grandma’s watchdog group. 

Companies, politicians and individual citizens are leaving data trails that betray or validate them in entirely new ways. Informations is spreading and resources are getting pooled in entirely new ways. Individuals are collaborating and organizing information in entirely new ways. We saw it in Egypt, we saw it with #occupy, we saw it with SOPA, we’re seeing it play out with KONY2012 and we’ll see this new effect front and center going into this Presidential campaign.

As a firm, we’ve long held collective intelligence as a central investment theme. This added layer of collaboration and transparency the network enables will push collective intelligence and collective action into entirely new territory. 

And, as a firm, we’re very interested in founders looking to build companies around this theme.

See original post at Andrew Chen (@andrew_chen):

Will CPE (Cost Per Engagement) advertising ever take off?
I doubt it – the reason is that it’s targeting metrics at the kind of marketers that don’t care too much about metrics.

Broadly speaking, there’s two kind of marketers in the world – a ton could be written about this, so I’ll just provide some sweeping generalizations:

Direct response marketers are companies that are typically very focused on ROI when they buy advertising – often these include companies you’ve never heard of in ecommerce, online dating, financial services, etc., where it’s easy to calculate the value of a customer and they are primarily getting their traffic through paid marketing channels. They like to back everything out to ROI by comparing lifetime value to cost per customer, and if not that, then at least cost-per-action or some similarly concrete metric.

In many cases, these kinds of marketers prefer search marketing, email marketing, telesales, and other things where it’s easy to quantify what’s going on – they stay away from Super Bowl ads though. They prefer CPA and CPC versus CPM or sponsorships.

Brand marketers are companies you’ve heard of and have seen a lot of advertising for – they are typically targeting a large consumer base, they want to position their products differently relative to their competition and don’t have great ways to quantify the value of a customer. For example, Coca-Cola doesn’t know the LTV of a customer nor what the cost-per-customer looks like for a billboard ad they’ve bought.

For these guys, they are used to hiring big ad agencies to help them advertise on billboards, television, the front page of Yahoo, etc. They may buy search marketing, but have different goals than ROI. (For example, they may just want the top ad, and don’t care too much about ROI)

Why CPE is a weird metric for both DR and brands
The reason why cost-per-engagement is a weird metric is that ROI-focused marketers (that is, direct response marketers), don’t care about “engagement.” They want to know if people are going to buy, and if their media spend is going to be profitable.

As a result, the “E” part of CPE is really only a part that brands care about. And yet, they don’t care that much about CPE because they aren’t focused on the cost of the campaign as the #1 priority. Instead, it’s more important where the ads are being placed, how strong the ad creative is being used, etc.

One scenario to demonstrate this: If they could buy the front page of YouTube, even if that had a higher CPE, a brand advertiser would be happier with that than being shown in random footers of YouTube (the “remnant”) even at a lower CPE. They are looking to establish their brand, not optimize their spend.

What will be prevalent instead?
I think even with the advent of lots of ad opportunities on social sites, the dominate business model will still be CPM/sponsorships for brand advertisers, and CPC/CPA for direct response. Basically, nothing much will change.

If it turns out that CPE correlates to CPA/CPC, then DR marketers will end up liking it.

Also, CPE might turn into a secondary metric that you use alongside really strong placement of ads- maybe as a way to establish a bonus or upside on the campaign, but I don’t think it’ll ever happen that the dominant form of advertising on the web will be that ad agencies will put in a CPE “bid” into self-serve systems

I answered this question on Quora – more great answers over there.

See original post at Andrew Chen (@andrew_chen):

Will CPE (Cost Per Engagement) advertising ever take off?
I doubt it – the reason is that it’s targeting metrics at the kind of marketers that don’t care too much about metrics.

Broadly speaking, there’s two kind of marketers in the world – a ton could be written about this, so I’ll just provide some sweeping generalizations:

Direct response marketers are companies that are typically very focused on ROI when they buy advertising – often these include companies you’ve never heard of in ecommerce, online dating, financial services, etc., where it’s easy to calculate the value of a customer and they are primarily getting their traffic through paid marketing channels. They like to back everything out to ROI by comparing lifetime value to cost per customer, and if not that, then at least cost-per-action or some similarly concrete metric.

In many cases, these kinds of marketers prefer search marketing, email marketing, telesales, and other things where it’s easy to quantify what’s going on – they stay away from Super Bowl ads though. They prefer CPA and CPC versus CPM or sponsorships.

Brand marketers are companies you’ve heard of and have seen a lot of advertising for – they are typically targeting a large consumer base, they want to position their products differently relative to their competition and don’t have great ways to quantify the value of a customer. For example, Coca-Cola doesn’t know the LTV of a customer nor what the cost-per-customer looks like for a billboard ad they’ve bought.

For these guys, they are used to hiring big ad agencies to help them advertise on billboards, television, the front page of Yahoo, etc. They may buy search marketing, but have different goals than ROI. (For example, they may just want the top ad, and don’t care too much about ROI)

Why CPE is a weird metric for both DR and brands
The reason why cost-per-engagement is a weird metric is that ROI-focused marketers (that is, direct response marketers), don’t care about “engagement.” They want to know if people are going to buy, and if their media spend is going to be profitable.

As a result, the “E” part of CPE is really only a part that brands care about. And yet, they don’t care that much about CPE because they aren’t focused on the cost of the campaign as the #1 priority. Instead, it’s more important where the ads are being placed, how strong the ad creative is being used, etc.

One scenario to demonstrate this: If they could buy the front page of YouTube, even if that had a higher CPE, a brand advertiser would be happier with that than being shown in random footers of YouTube (the “remnant”) even at a lower CPE. They are looking to establish their brand, not optimize their spend.

What will be prevalent instead?
I think even with the advent of lots of ad opportunities on social sites, the dominate business model will still be CPM/sponsorships for brand advertisers, and CPC/CPA for direct response. Basically, nothing much will change.

If it turns out that CPE correlates to CPA/CPC, then DR marketers will end up liking it.

Also, CPE might turn into a secondary metric that you use alongside really strong placement of ads- maybe as a way to establish a bonus or upside on the campaign, but I don’t think it’ll ever happen that the dominant form of advertising on the web will be that ad agencies will put in a CPE “bid” into self-serve systems

I answered this question on Quora – more great answers over there.