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When taking risks such as looking to invest in a new technology, making a move that will effect your day to day operations, or any other major change in your business, one of the most overlooked variables is opportunity cost. It’s important to factor in the opportunity cost of any business decision because it can reflect additional expenses onto the change that would otherwise be unnoticed, and may effect the decision overall. The most basic way to calculate opportunity cost is to understand the gains you will no longer acquire, that were once attained through your old business methods. Here are a few examples to think about:

• An EMT arrives at the scene of a medical emergency and decides that the patient requires medical attention immediately in order to stay alive, and transporting the patient via ground would not be sufficient. The opportunity cost would be utilizing the medevac flight crew to transport the patient safely so that they live, rather normally transporting the patient via ambulance.
• In a college basketball game, a team that is down a couple points in the final minute often fouls the leading team for the opportunity to score by having the ball in their possession again. By fouling the leading team, the opportunity cost is the points that the leading team can potentially acquire with free throws.
• A worker decides to live in the suburbs and work in a city. The worker’s opportunity (living in the suburbs, away from work) cost is having to commute to and from work each workday.

If you need me to be more clear or specific on anything, feel free to comment below.

The Northern Iowa bench runs onto the court after their 69-67 win over Kansas in an NCAA second-round college basketball game, Saturday, March 20, 2010, in Oklahoma City. Northern Iowa upset top overall seed Kansas. (AP Photo/Tony Gutierrez)

It’s that time of year again, March Madness, when each basketball team invited to the NCAA tournament is given their shot to make a name for themselves and put their school on the map as a final four contender. Just last night the Northern Iowa Panthers took down the overall favorite and perennial college basketball powerhouse, Kansas. UNI showed up ready to play and made the big shots in this big game, against a big-time opponent. Not to mention, when an upset of this proportion happens, people are watching. The media outlet is quickly changing though, over 3 million computers were streaming the madness each day since tournament play began on Thursday, reported by CBS Sports. Now the inevitable question is how does a TV broadcast company such as CBS manage and afford to pay to stream an event of this magnitude for free to all interested viewers?

From a logistical point of view, making sure the HD stream is available to anyone across the globe comes with the help of the CDN (content-delivery-network) Akamai.  Their job is to provide CBS with seamless streaming of their coverage to viewers anywhere in the world. CBS pays to utilize the fiber optic bandwidth infrastructure and data centers that Akamai has already established in internet hot spots around the world. This eliminates costly logistical problems that CBS would otherwise run into if they were to stream the coverage with their own bandwidth. The service contracted out to Akamai is then easily paid back with mandatory 30-second commercials  that viewers are required to watch, in order for the player to unlock. Simply put, CBS profits from the increase in online video advertising inventory.

Kansas State and Northern Iowa start their NCAA second-round college basketball game, Saturday, March 20, 2010, in Oklahoma City. (AP Photo/Carlos Osorio)

One other factor, the two year old developer program has allowed for developers to promote the March Madness on demand service and viewers are now able to stream march madness from their HD TV’s, high-speed internet, or mobile device.

Many critics are applauding CBS for their efforts regarding making March Madness coverage widely accessible, as the most recent Winter Olympic’s broadcaster, NBC, required a subscription to view Olympic events live online from Vancouver. CBS’s great work is allowing for everyone to rally behind their bracket picks, and making sure that only the basketball teams are being “upset” throughout the tournament.

March 2011 UPDATE:

To watch the 2011 NCAA Basketball Tournament:

Visit March Madness On Demand – Watch Now!

Yesterday I was flying home from Augusta, Georgia on U.S. Airways and I noticed that the monthly edition of the airline magazine contained enough subsentence to occupy my short and rare flight. However, I realized that the magazine is almost totally irrelevant to the the airlines most profitable customers, frequent fliers, who stare at the glossy cover next to the safety card several times every month. Allowing travelers to have Wi-Fi access is a trend that has fliers more fliers disregarding the airline magazine and seeking carriers with Wi-Fi for more productivity and personal entertainment.

Recently many of the major U.S. airline carriers have decided to go ahead with an investment in offering in-flight Wi-Fi for a fee, provided by the third party company Gogo, which operates under the parent company Aircell. The rationale behind the decision is that the airline executives believe their customers desire in-flight internet enough to chose one carrier over another, just for access to the internet. To support this belief, Mashable published the results from a recent survey, showing that over 3/4 of frequent fliers would change airlines to have Wi-Fi. Now, in March 2010, most airlines have taken action and are implementing the service on select planes in their fleet, which operate routes that would have a high Wi-Fi demand.

Now, why is this relevant to the airline magazines? For the passengers who subscribe to the Wi-Fi service, this will mean that their entertainment will likely be fulfilled via their Wi-Fi device, and not the magazine. The magazines exist now as a place for the airline to entertain their customers with reviews and promotions of destinations they serve and other mildly interesting travel articles. Meanwhile, the same information is available and more accessible with Wi-Fi, making the passenger likely to disregard any of the useful information within the magazine.

As fewer passengers become interested and engaged in the airline magazine, its likely that advertising revenues will drop significantly because the advertiser will no longer be reaching their primary target. Instead, the primary target demographic which the advertisers are seeking will be on the internet. In other words, the advertisers will likely look to reach out to these travelers through a new media form, the internet! Thus, the internet advertising world will yet again trump traditional media forms, as travelers become increasingly digital and mobilized citizens. While the addition of Wi-Fi service in flight is not a guarantee that airline magazines will one day be discontinued, it is certainly an indicator that the advertisers should modify their ad budgets to attract those customers again, on the internet.

Photo by RetroCactus under Creative Commons

The past two weeks have drawn much attention in the web startup industry to the upcoming deadlines for startup incubators. Thanks to an internet entrepreneur that is physically distant from the U.S. startup scene, but still very in touch with the funding opportunities, Juri Kaljundi of  Estonia has put together a comprehensive list of the startup accelerator programs currently accepting applications. Check it out here.

While I am not planning on applying to participate in these programs specifically designed to accelerate the startup process, I would like to offer advice to the applicants that are applying  now or in the future. These are a few quick notes from an entrepreneurial program I participated in at Drexel University’s Baiada center for entrepreneurship in the summer of 2009-

In order for a startup to be the most successful with their product or service, their offering must meet the following requirements:

1) Solves a current problem.

2) Perceived as being innovative. Even if its not; because of the way it is packaged or marketed.

3) Easy and inexpensive to install or integrate.

4) Low-tech, meaning that it is simple to operate.

Keep in mind that these guiding points are merely a starting point, and many other variables such as market size, existing competitors, etc. must be taken into account. Either way, this  should give you an idea if your startup business is on the right track, and hopefully make your idea stand out a bit more than others. Good luck on the applications!

I said it back in May of 2009 when virtual goods was the largest emerging market of the year, and I will say it again, the demand has rapidly increased. This past week the new startup Kwedit launched, positioning itself to open up new revenue opportunities in the virtual goods industry. Their never seen before technology allows users of any age to buy real physical goods and digital goods, by making using a variety of payment methods online to credit their account. The first reason why this is such a noticeable change in the industry is because for the first time users of any age (essentially tapping into the demographic of kids under 16) to pay for things offline based on credit that they earn on the internet. Credit can be earned by paying via credit card, but does not have to be paid immediately. Eventually a virtual credit score is attributed to each user’s account, generated by their algorithms , and kids are able to learn the importance of maintaining a positive credit score because it can effect their purchasing power in the future. Kwedit has teamed up with 7-Eleven to first implement its credit system, and will likely partner with more brands that attract youth in the near future.

More on this promising new payment provider:

TechCrunch – Kwedit Launches: The First Completely Unreliable Payment Network

The New York Times – Buy Now, Pay Later (Maybe With Your Allowance)

In the past couple of years, an online education has become more accessible that ever imaginable. For example: Many college students are sharing course notes on sites such as ShareNotes. Moreover, the general intellectually curious go getters are soaking up Ivy League school lectures from schools who have made them free online, such as Princeton. MIT was the pioneer of enabling internet users to free higher education lectures, with their OpenCourseWare service which includes the entire curriculum, online. (P.S. Bill Gates has been rumored to take in one or two Physics lectures from MIT in his spare time, when he is not managing his philanthropic work.) The course material available is often up to date, and taught by the some of the smartest professors in their field. So, in reality, an Ivy League education is really just a click away for any internet user.

Some of my favorite lectures that I have seen have been through AcademicEarth. Their portal has accumulated lectures on an array of subjects from numerous institutions, even offering AP course test prep for high school students. 2010 is truly the advent of digital learning, where classroom time will main irreplaceable, but learning online will increase greatly.

Many people hold up, and limit their view of online education for the college/university level. That is absolutely false, because the largest group of learners online are the K-12 kids going through school right now, who are engaging with school lessons online.  Here, take a look into the life of my typical day in high school-

Glancing back at my PreCalculus class notes posted online, while doing homework:

Again, studying online from the notes and discussions posted on my Environmental Science class’s website:

I realize what you may be thinking, that is just the math and sciences of the curriculum. For my English class, the widely used study aid CliffNotes now offers all of their materials online, offering literary criticism among many other study tools. In addition, for institutions to combat academic dishonesty, the leading tool Turnitin was created to scan a students work and compare it to all existing publications available on the web, which is often used in my history class for research papers.

Finally, the next step of my education is the college search and application process, which non-coincidentally takes place on the web these days, with the help of powerful software such as Naviance. This is the age of digital learners, and the internet is the new path towards a higher education. If you are looking for the next place to continue your education, then the chances are that you are already here.

Right now in Vegas, the Affiliate Summit West is taking place at the Rio. For the performance marketing industry specifically, this is the largest event and congregation of people who do business in the industry. Networks, merchants, and affiliates often spend many weeks or days in preparation of this event, hoping that the time and monetary investment in this 3 day show will pay off over the next six months, until the next Affiliate Summit. From my limited, but very impressionable experience attending the Affiliate Summit East – NYC this past August, I can tell you now which moves back then, ended up paying off in the long term.

Firstly, my best relationships remain in place with companies who were open and honest about their offerings, and were willing follow up personally a few days after the event, and get me situated with their company. I assure you that these companies were not involved in the practice that has been described as “the pitchfest” where most companies simply pitch their unoriginal products over and over again, talking all about themselves and not how they could specifically help anyone else.

The companies that come out of the trade show with winning relationships have a value proposition in hand, and are prepared to offer their customer a tool or product that will elevate their game. In the internet world, this is often in the form of proprietary technology, which is able to reduce costs and increase profits. Such as: Tatto Media, who offers an innovative enterprise level tracking platform for a cost that beats out all competitors. Tracking202 (now BlueSky) is also the leading tracking software provider for affiliates, due to their opensource platform which has enabled thousands of affiliates to scale profitable campaigns. MediaTrust is one of the first companies in the industry to enable the advertisers with better fraud detection software, and a thoroughly vetted publisher base. In my opinion, companies that are similar to the ones mentioned above are truly changing the game, and are investing in long term profits versus high short term payouts.

In addition, the companies that are maintaining the winning relationships month after month are often the smaller boutique networks which usually have not invested in proprietary software tools, but instead into educating their publishers on how to be better marketers. These types networks have gained an enormous respected in the industry among affiliates, because they are provide one-on-one support to work their publishers up the ranks, even through the tough times. The first networks that come to mind are Convert2Media and Eagle Web Assets. Both are run by former affiliates who realize the importance of their business model, which is 100% reliant on affiliate driven revenue.

Perhaps the most valuable relationships you can make are with affiliates/publishers, since they are on the forefront of the industry, setting up new campaigns daily, and getting prepared for a prosperous 2010. Either way, keep on the lookout for the mutually beneficial partnerships at your next conference.

Just last month Adknowledge became the first company to integrate a bidding system into virtual goods platforms. Their innovative offering is the first of its kind, and it is playing off the current virtual goods boom that is taking place across the socialshpere. Through their updated ad platform, advertisers can now bid to have their offers completed via CPA pricing. To a CPA marketer, this type of traffic is gold because the it enables a guaranteed ROI if the bid on the campaign is high enough.

I expect other ad networks and virtual goods platforms to follow suit and integrate some sort of option for advertisers to compete for the spot in a virtual game. Adknowledge has really taken this first step to allow a free market for advertisers to compete for the virtual goods offers that millions of social users complete daily. Take a look at this offering for sure, I look forward to using the Adknowledge bid system soon!

If you haven’t noticed recently, all media outlets usually wind down the year with numerous publications on the year in review, or in this case the entire past decade. On the contrary, today the MediaTrust blog published a blog post containing the “Top 10 Predictions for Digital Marketing in 2010“. For this forward thinking post, I was honored to contribute my predictions on the near future of digital marketing.  So, if you haven’t already seen my predictions, here they are:

#9. Spending for online video advertisements will continue to increase due to the expanding amount of feature programs now available online.

#3. Consumers will begin to see much more relevant online advertisements due to expanding ad-targeting capabilities, which will be drawing from social media profiles in particular.

To elaborate on #9 briefly, online video is emerging with endless advertising opportunities. Some quick facts: YouTube is the #2 search engine, behind Google of course. This means that consumers demand video, and the advertising dollars will follow the consumers.

As for the # 3 prediction, ad-targeting is now more precise than ever with the amount of data ad servers can use in their tracking algorithms. Consumers will begin to see much more specific advertisements, that relate to the content their browsing history and content published online. Furthermore, the IAB will begin to assume more responsibility for making sure that the ads are targeted towards the right people.

Case in point:

Today I was browsing AOL’s video website SlashControl.com when I came across an ad on their homepage. Take a look- (Click the image for a close up!)

How cool is that? The ad server actually detected that the ad about to be shown would have been irrelevant to me, and thus a waste of the advertisers budget. I was impressed by this real-time action to maintain relevance and create a mutual win-win situation between consumer and advertiser. For more information on this function implemented by the IAB, along with other ad targeting information,  visit their site here.

I look forward increasing relevance and transparency in digital marketing, in 2010. Good luck in the new year!

Often I get the question: “How did you learn all about this?”  The answer is by reading and doing. In order to be able to understand positive and negative trends in any industry, it’s imperative that you read often about related topics and events. This is because being successful in any industry is a process, not a singular event that suddenly clicks with you after one game changing event.

Simply put, staying on top of your game enables you to be in position to rise above your competition faster and quicker. Knowledge is power…  How do I stay on top of the digital marketing industry? By reading at least the following-

• Twitter status updates at the end of each day, and clicking through to interesting links.
• The Web List – aka every top social media story of the day from the front page of Digg, Delicious, Reddit, etc. (By # of clicks)
• Affbuzz.com for affiliate marketing news.
• Google Reader to group related RSS feeds.

That’s it really. In order to stay on top of the digital marketing industry I take around thirty minutes each day to read, be informed, and think critically about the material presented.

The controversial thought here though is that many online marketers say “Stop reading!”. The reason for that is because many new people to an industry will only read, and not actually do anything… resulting in negative productivity.

Lastly, staying on top of your game can most literally be seen in sports, where a day off is a day that you lost. So, I want to share an advertisement that I clipped out of a magazine a while back:

“Me and running don’t always see eye to eye. Some days it hurts more than others. But it doesn’t mean I don’t do it. Ideal with it and I keep running because not everything that is good for you always feels good for you. Every day is the day.” – Lance Armstrong