Congratulations CES for becoming the hottest, consumer advertising buy on the planet

CES has descended upon the psyche of the tech world so that it dominates most reports and tweets and attention.

We all wait with bated breath for the declared best new product, most innovative game, most outrageous consumer electronic gadget. We are, in effect, like kids with our noses up against the window pane of the biggest toy store in the world.

I should say that the hyper cool nature of CES is a fairly recent phenomenon. Back when I worked at AT&T, CES was an annual ritual that, frankly, rather inconveniently put a crimp on holiday festivities since many of us had to go the Las Vegas a week before to setup. There went New Year’s plans *sigh*. Sure it was fun to see what ingenious gadget was coming into the market, but make no mistake about it; CES was a serious B2C trade show where manufacturers worked hard to woo retailers into carrying their stuff. While there was some consumer coverage, mostly it was confined to the B2B press.

Then, somewhere in the last 4 years, I think driven by the gaming industry, Google, Apple and social media, it took on the glamour of the Oscars for tech set. If a product was even mentioned in a “from CES” report, that was cause for celebration (“I am so honored even to be nominated” kind of thing). CES went from being a B2B event to the event that plays itself out directly to consumers. That shift, in effect, caused CES to become the biggest consumer trade event of all time – even if every consumer is attending by proxy via social media.

But there’s more to it than that because at the current level of consumer exposure to the show, CES has transcended the trade show segment and was elevated to become a premier consumer media buy, kinda like SuperBowl. Think about with me. A media buy in SuperBowl was a strategy companies used to catapult themselves – think GoDaddy. This media buy cost a few million bucks, but if played right – you were made. I think CES has taken on that same level of media potential if you account for all the primary, secondary and tertiary coverage that live streaming and social media provide. And instead of a few thirty second spots, you get three days to strut your stuff. Make no mistake about – doing CES right is a multi-million affair. But the pay-off could be huge. In fact, it would not shock me if I learned that CES exceeded SuperBowl in the number of impressions delivered.

That’s awe inspiring. Never before has a trade show had that kind of reach and coverage. It seems cosmically fitting that new technology, e.g. social media, would elevate the very essence of CES itself.

Welcome to the year of living intelligently with technology.

Judy Shapiro

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Why Google Reminds me of AT&T – Take 2. Can you spell DOJ?

Many of you will remember the July 7 article in AdAge on Why Google Voice Reminds Me of AT&T, where I broadly outlined how Google, like AT&T before it, can be undone by its ambition to dominate a key “infrastructure” sector, like the web. I contended in the article that, much like AT&T’s quest to dominate information systems, Google’s quest to dominate web services can divert precious resources from core businesses leaving it weaker not stronger.

The article generated, uh, considerable conversation; some polite, some not – but most were incredulous that I could even dare to make such a comparison.

Now, a mere 3 weeks later, Fred Vogelstein of Wired Magazine chivalrously comes to my defense (however unwittingly on his part) with his article; “Keyword: Monopoly …Why is Obama’s top antitrust cop gunning for Google.” where he explores the Department of Justice’s newly launched anti-trust investigation of Google (see where this is going?).

The article explains why the DOJ is going after Google now:

“Recently, Google’s size and ambitions have begun to obscure its halo. Advertisers watch nervously as the company’s share of the search-advertising market have jumped to 75% from 50% …Google’s largest problem isn’t what the company is today; its what is plans to become. Google aims to create a world in which web services replace desktop software.”

Does this not sound familiar?  The government gets nervous whenever one, very large, commercial enterprise wants to dominate any key infrastructure, whether it is software, information or the web. It was why AT&T and Microsoft were targeted in their day and it explains the DOJ timing now.

This investigation is yet another element demonstrating the parallel between the two companies. Sadly, the DOJ investigation changed everything for AT&T and it is likely to fundamentally change how Google does business, even if the case is not brought for years.  You see, once the government had a “virtual” seat at the AT&T table, the lawyers started running the show. It slowed us down, blunted much of our competitive bite and even restricted which technologies we considered. It simply took the life out of AT&T. Google seems prone to face similar constraints.

At this point, I hope most of you can at least understand why I saw and continue to see a pattern repeating itself. The real question becomes what’s in store for Google? What can Google do better/ differently than either Microsoft or AT&T when they were at this critical crossroads? Maybe nothing – I don’t know. Yet, that does not seem to sit well given Google’s well earned reputation for its Google genius. So for a moment, using history as our guide, let’s consider “out loud” some of their choices – together.

In the face of a potential anti-trust suit, Google can follow the path of Microsoft to fight to keep Google whole. It can use the legal argument of “anyone can go to any number of competitors with a better mousetrap” strategy. But that approach is not without peril if the lesson of Bill Gates’ now infamous court testimony with the resulting loss of Microsoft public good will is any indication. Poof – in a virtual moment, a decade of good will was gone. And the irony of following in Microsoft’s legal footsteps is rich given Google’s corporate culture of being as much anti-Microsoft (e.g. their “Don’t be evil” mantra) as it is “for” anything.

Google has another option; one that celebrates what Google what it does most brilliantly; innovate with new business models to create sustainable, profitable and ethically oriented corporate growth. It is an option that follows the contours of AT&T’s footsteps (read on before you all descend into an epileptic shouting fit), but avoids its failures.

Here’s what I mean.

AT&T ended breaking itself up into seven companies (the 7 Baby Bells of which three are still around) after a lengthy and costly battle which left AT&T very much weakened in the process. Maybe, just maybe, Google takes the first, brave step to focus on getting smaller and better – not necessarily around becoming bigger. Google can consider innovative ways to spin off smaller, more sustainable businesses via a consortium or community of like-minded companies. This community of companies model was first tried successfully by the Bell Labs New Venture Group in the late 1990’s. It operated with a structure that let connected businesses share basic, scalable overhead services like HR or marketing, but they remained relatively small to allow for innovation and ideas to flow freely. I was there that time and I can attest to the fact that with this model, we were able to more quickly assess and launch new technologies with successful outcomes.

While getting “smaller” may echo back to the AT&T “breakup”, that’s where the similarities can end. AT&T never really embraced the notion that smaller companies could be stronger and more profitable. Perhaps Google, by staying true to its very DNA to “be a force for good on the Internet” can free us from outmoded business models where bigger is automatically assumed to be better. Google can keep its cool by being a role model for a well balanced company that’s big enough to stay strong and innovative but not too big that it drowns in its own grandeur and bureaucracy.

It has not been done yet. In this respect Google reminds me of no one. And maybe this is what saves them.

Judy Shapiro

This is a reprint from Ad Age DigitalNext column.

Google Voice: What’s up with that?

As an ex-AT&T “Bell head” anything telecom always gets my special attention. So when I saw the “Google Voice” re-announcement recently I couldn’t help wondering, “Huh, what’s up with that? How does this fit into Google’s core business?” Mostly though, I was interested in understanding why this and why now?

First, let’s put Google Voice in perspective. I’m gonna put it out there and say Google Voice is, IMHO, a refined GUI within a fairly standard VoIP version of unified messaging with number portability thrown in (sorry all for the techno-jargon, but a factual articulation of the technology seemed in order). Nice, but hardly deserving of the media gush that quickly followed this re-announcement, especially since Google Voice is a rebranded version of their Grand Central “one number for life” initiative launched in 2006. So this notion of having the same phone number for life has been done and redone dozens of times over the past dozen or so years. 

Now we all know that anything Google launches tends to bask in the Google glow, defying critical analysis.  So I seemed to be the only one interesting in knowing – why now?

In a recent Computerworld article by Mike Elgan, “Why Google Voice is free,” (6/27/09), Mike began to get at an answer of “why now” when he correctly contended that Google intends to monetize this free service via new advertising vehicles within their voice network.  While that answer makes total sense, it still didn’t get at the “why now” part of my question.

And then I was struck with a déjà vu moment – I realized with a jolt that Google is doing now what AT&T did in the 1980s and 1990s – I know since I worked at AT&T at that time. In fact, Mike Elgan made a similar connection when he observed that, “Google Voice means Google is technically, literally and actually a telephone company.”

Once I put that together, I realized that Google seems to be following in AT&T’s footsteps more closely than the media, or even they may realize. But more interestingly, that connection best explained the “why now” part of my question.    

First a quick AT&T history lesson. From the 1980s to the mid-1990s AT&T was in its full power as a global innovation brand fueled by its dominance in the communications business. While the diversity of the AT&T business was amazing, it was generally focused on communications, and they stayed “close to their knitting” (AT&T had many such quaint terms).

But competitive communications pricing pressures being what they were, AT&T expanded into business well beyond its core competency starting in the late 80s. It dabbled in home security, launched PCs, sold electronics games and even explored Pay-Per-View (PPV). They did this so they could grow by controlling digital information delivery channels from its source to its final consumption points to leverage the vast AT&T infrastructure. This explains lots of these diverse AT&T businesses, including their short-lived attempt to build their own internet via a project called “HomeCenter” (circa 1994).

These ambitious (dare I say arrogant) goals were necessary to fund its “big” company overhead. So it played in lots of industries because it could and because the cache of the AT&T brand blinded the leadership into believing that such an AT&T Information Network goal was achievable. So tons of resources were thrown at these diverse business plays in the hopes of reaching the business promised land that a lock on controlling information to users would have provided.

We all know how it turned out. In the briefest of years, AT&T went from a powerhouse to literally being almost a shell of its former self, regulatory issues notwithstanding. Only now, nearly 25 years later, is it beginning to make a brand comeback.  But it will probably never relive its former glory days.

So flash-forward to Google today and why Google Voice now?

Right now, Google is in its prime and has become the arbiter of technological coolness, much the way AT&T was in its day. And like AT&T in communications, Google has a very strong hold on the online ad market, but it’s facing new types of pressures from technology, as well as new business models. Furthermore, the Google PPC money machine is losing its grip and has, by many accounts, already plateaued.  This is similar to what happened with AT&T when MCI entered the field.

So much like AT&T did 20 years ago to maintain its growth, Google is trying to do the same – control the data distribution channels. In the case of AT&T, it was all about information delivery to business and residential users. In the case of Google, it’s all about advertising delivery to its “product” – to its users of its services.  

The trouble with wanting to dominate all delivery channels (whether it be information or advertising) is that you are forced to go further and further afield from your core competency. And while “playing” in disparate businesses is something a leader brand can afford to do, over time the core business tends to suffer – slowly, but inextricably. And then at some point, you are willing to throw out the knitting needles. AT&T did, and that did not end well. Google looks like to be headed in the same direction.

So the launch of Google Voice lets me see these parallels more clearly. As wonderful as Google Voice may be, I am tempted to say to Google, “Stick to your knitting.”

Judy Shapiro

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