Daily Archives: January 29, 2008

Superbowl and Internet Advertising

A writer from the local paper, The Daily Item, emailed my department asking for background on something about superbowl advertisers doing more with the internet.

Here is what I gave her back. It will be fun to see what gets used (if anything.)

“The mingling of the new kid on the block- Internet advertising- with the old (and big) kid- Superbowl advertising, crystallizes important shifts in media use and consumption in America. First, the Internet is no fenced off. Second, the Internet is more and more the Everyone-Net.

The Internet is less and less a privileged or partitioned media for commerce and advertising. The fence is down. Some researchers estimate that 10% of all ad dollars will go to Internet advertising by 2010. Meanwhile, live TV viewership declined 10% in 2007. What is more striking is how much citizens trust the Internet given how wary of mass media and generally information-saturated they are. Recent research from the Annenberg School for Communication found that by 2007 80% of Internet users rated the Internet as an important source of information, much higher than TV (68%), radio (63%) or newspapers (63%). Consumers seeking information appreciate authenticity, and they find it more and more in cyberspace.

These effects are magnified by the increasing adoption of the Internet and especially broadband which has surged from 5% to 42% of households since 2000. We are watching the extension of the Internet to the Everyone-Net. Internet penetration is up to 75% of American households (the most of any country, however many other countries have more intense Internet use per wired household. Israel is first at 57 hours per month. The US is about 32). Ten years ago there were clear race and class divides in in Internet use. Those have narrowed considerably (but persist for broadband connectivity). Among college graduates, the difference in White, Black, and Hispanic internet use is almost zero. The digital divides are now along education and age lines and narrowing progressively.

But those are only the tip of a big iceberg. Consumers are far more savvy about information sources and products. Cyberspace is becoming a destination for entertainment, community, and commerce. The logic of the Internet is not one-to-many, like print or broadcast media, but many-to-many. This is a fundamental difference whose significance can not be overlooked. As advertisers shift, they will have to learn how to navigate the mixture of entertainment, community, and commerce online. They don’t own the stage like they have with big production Superbowl ads. They will have to learn that the audience mingling amongst themselves is the only show in town.” anything).

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Filed under Business, Information and Communication Technology, innovation, Media

Thoughts on SL Banking ban

I know I’ve talked to people about virtual worlds and when they point out that it is “odd” or somehow “wrong” for people to adopt other identities, I sometimes repsond that the ability to do so, or at least, the ability to do anything meaningful as your alter ego, will be limited by how porous the boundary between virtual and real wrold is.  moreover, that barrier is getting more porous in most cases.  As virtual worlds develop, what people want to do in and iwth them will bump against the very real world of durable identity and the need for regulation

So, the fall out from the banking crisis as described in his WSJ article seems to affirm my point.

First, only in SL  :>):

Cheer Up, Ben: Your Economy Isn’t As Bad as This One – WSJ.com
On Sunday night, the female character was wandering topless through the virtual lobby of a Second Life bank called BCX Bank, where a sign said it was “not currently accepting deposits or paying interest.”

I still don’t get very well what these banks’ business model was?  What is their loan portfolio?  How could they possible deliver 100% returns?  The answers are not clear.  I suppose partly it is speculative dynamics around land.  Do the bankers know about Linden’s plans to control land supply?  Would that constitute insider information?  Or, through fast growth SL business; this was the story behind Ginko Financial which failed last summer and was purportedly investing in gambling in SL (another story of regulation).

For example, how can this guy say the ban will not effect his business?

Cheer Up, Ben: Your Economy Isn’t As Bad as This One – WSJ.comSteve Smith, who runs BCX bank under the avatar name Travis Ristow, yesterday said depositors — who are owed a total of $20,000 — will be able to get their money back next week. The bank, which had promised to pay depositors more than 200% in annual interest, is now allowing only small withdrawals.

“This won’t affect us long term. It’s just a short-term difficulty,” said Mr. Smith, 40 years old, who also has significant land and real-estate interests in Second Life. He said he retired from the real-life mortgage business to devote his time exclusively to his Second Life enterprises.

Finally, there is one mention that one bank was arbitraging Linden-US exchanges to the tune of $15,000/year in profit. and

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Filed under Banking, Business, policy, Political Economy, Second Life, virtual worlds