"Cost Per Whatever" to displace CPC and CPA

Google Checkout and experiments in "cost-per-action" (CPA) advertising bring Google several steps closer to a "pay-per-click-you-like" future.

What's that, you ask?

Well, take CPC (cost-per-click) and CPA advertising as points on a continuous curve: CPC pays for every (or every 'legitimate') click, CPA only pays for clicks that result in sales. But in fact there are as many kinds of clicks as there are clickers, and every one has a different value. Further, this value is only evident at some time after the click is delivered. Was it a shallow click -- a confused customer or fraudster? Was it a valid lead that left contact info but may not purchase for weeks? Was it a small sale? A large sale? A sale that ultimately resulted in a return?

With that insight, we can take a radical leap to a new model for pricing clicks: pay whatever you feel like, and only after you've decided what the click was worth to you. Pay nothing for clicks you don't like, after you've had time to evaluate them. (No more anguished appeals to PPC advertisers for fraud investigations!)

"Huh? Wha? It'll never work!" you might protest. People will lie about what clicks are worth; they'll game the system; it's too complicated.

But think it through, and you'll see there's a better alignment of incentives, and less opportunity for fraud and gaming, than with the current discontinuous and fixed-price CPC and CPA systems.

Could an advertiser game Google, by underpaying for valuable clicks? Only at threat of having those exact same kinds of clicks dry up in future periods. If you want more of any particular click, you have to pony up. Conversely, by refusing to pay for worthless clicks of any kind -- by whatever criteria makes sense for your business, not magic secret 'fraud-detecting' algorithms deep in Google's bowels -- you'll send Google the best feedback possible about what clicks (and ad inventory/impressions) you want. Google won't be guessing what clicks are bad with algorithms; they'll be knowing because customers will have told them directly.

Can a fraudster bilk advertisers? Only if they manage to simulate valuable clicktrails through target sites -- a much harder problem against diverse real businesses than generating simple clicks. And any business fearing fraud has the ultimate countermeasure completely in their own hands: just clam up and only pay for real, verified, unreturned sales.

Is it too complicated? Small and unsophisticated advertisers can still pursue degenerate strategies: pay for every click, or pay for only sales. They can gradually vary their payments as their sophistication grows, or use free or subsidized tools like Google Analytics and Google Checkout to improve their pay-strategy. And yet, they'll still benefit from the info spillover of the sophisticated buyers. Google will learn from the 'pro' customers, who use powerful click-valuation software, which clicks are truly valuable. Further, it is in Google's self-interest to even send 'dumb' CPC buyers just enough true value to make their ad spend worthwhile (or else lose the customer).

And Google? Such a system takes them even further towards being a giant and dominant click-routing brain, sending impressions to wherever they have the greatest expected click-value return, based on past payment patterns. As I noted last year in a post introducing an earlier variant of this idea:

Google is uniquely positioned to implement and benefit from such a policy. They already rank AdWords ads not by raw bid, but by actual profitability over time. They already reserve for themself overwhelming placement discretion, and keep raw performance, price, and payout rates to themselves. All they ask of advertisers is, "are you getting sufficient value for value paid?" -- and that'd be the core proposition at the heart of a pay-per-click-you-like system, too. (Pay no attention to the half-million computers behind the curtain.)

The patterns of unpaid-for clicks would become just another massive and valuable data stream for Google to mine, along with web crawls, query logs, toolbar data, per-browser/per-IP address web-trail info, and whatever other tricks they have up their sleeves. Their core competence is discovering patterns that reveal implied value in giant dynamic datasets, and there's market power in having the biggest dataset.

So the day Google adopts this kind of policy, click fraud ceases being a major problem for them and starts to be a giant club they can use to beat off their smaller competitors. Who else will have as large and detailed a map of which clicks are wanted? And once you've been with Google for a while, and fed it months of data about the clicks you like and don't, switching to any other advertiser would involve a big cost and efficiency hit while the patterns are relearned.

Call it cost-per-whatever (CPW). Let every click find its own value! But watch out for the proprietary click-intelligence monopoly it could create.

(Previous entries on this topic: Killing click-fraud (and the competition) with one stone [March 14, 2005]; Google Analytics & the "pay-per-click-you-like" future [November 14, 2005] .)

Tags: cost+per+click, cpc, cost+per+action, cpa, advertising, adwords, adsense, google, checkout, cost+per+whatever, click+fraud

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You the man now, Digg!

I recall early this year when Digg was knocking at Slashdot's door, about to surpass it in traffic... but only in the last few days have I noticed a couple mention that Digg has actually pulled into the lead. According to Alexa, Digg passed Slashdot in tracked pageviews in March, then in tracked "reach" (which I believe is a matter of unique visitors) in April:

(Part of the Digg surge is associated with a discontinuity in the Alexa data which probably reflects some internal methodological change -- but the pro-Digg trend seems evident both before and after.)

I always thought Slashdot could be unseated by a similarly-focused competitor that showed marginally more care about quality: facts, grammar, and a respectable editorial voice. How wrong was I?

You the man now, Digg!

Tags: slashdot, digg, traffic, alexa

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But 5,271,009 women?

SFGate: Tech leaders, wannabes gather in San Francisco / Supernova2006 good for networking with Internet crowd

'There's a frenzy of startups,' said Markus Frind, founder of PlentyofFish.com, a free one-man online dating service in Vancouver, British Columbia."

A "one-man online dating service"? What an interesting twist on online dating! That one man must be busy. I'm sure this also makes the site 'search' functionality a lot easier to code.

Tags: facetious

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Serial entrepreneurship

In 1896 Charles Pathé, with his brother Émile, founded Société Pathé Frères, an early motion picture equipment and content company. The company produced successful silent movie serials, including The Perils of Pauline. The Pathé brothers were thus serial entrepreneurs.

Earlier, the brothers had founded a record company, Pathé Records, so the Pathé brothers were also serial entrepreneurs: starting multiple businesses. However, since only the second business concerned movie serials, they were not serial serial entrepreneurs.

John Harvey Kellog, with his brother, Will Keith Kellogg, formed the Sanitas Food Company in the 1890s to sell whole grain breakfast cereals. They were cereal entrepreneurs.

After a falling out, Will Keith broke off on his own, forming the Battle Creek Toasted Corn Flake Company -- which became the Kellogg we still know today. Will Keith Kellogg was a serial cereal entreprenuer!

If only Dennis Hayes, founder of serial-modem seller Hayes Communications, would start a breakfast foods company. Then, he would be a serial serial-cereal entrepreneur.

Tags: entrepreneurship, language, serial, cereal

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Scoring yourself daily: Joe's Goals

via Reddit: Joe's Goals

I've had the idea for a web app like this in the back of my mind for a while, so it's great to see it made real.

But, some quibbles:

• No feedback channel. No blog, no forum, no contact email. Thus I've got to quibble here. (But maybe they're diabolically clever: I have to quibble here, where others will see it.)
• No Favicon. C'mon, "Joe". It's 2006. I have 20+ tabs open and you've made an app that plausibly, I'd want to keep up in my browser all day. A Favicon is not optional. (LazyWeb request: a Firefox extension to assign my own Favicons to sites and pages.)
• No reordering of goals. Many daily goals are time-sensitive and an ordered presentation would help... but if you remember a "first thing in the morning" goal after entering others, there's no way to put it first.
• No free-form notes. Little reminders of how you hit your 'pos' goals or lapsed on the 'neg's on any given day would make the app more intimate, emotional, memorable. It could be done in a way that preserves the current simplicity.

I'd also love to see some simple to-do list integrated... such that each to-do item retired counts as a positive goal, but doesn't require its own permanent 'goal' row. But I understand that'd present a major challenge to the current super-simple appeal, so this quibble doesn't rate a bullet.

Tags: goals, gtd, joesGoals, website, review

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Red Rain Andromeda Strain

Popular Science: Is It Raining Aliens?

As bizarre as it may seem, the sample jars brimming with cloudy, reddish rainwater in Godfrey Louis’s laboratory in southern India may hold, well, aliens. In April, Louis, a solid-state physicist at Mahatma Gandhi University, published a paper in the prestigious peer-reviewed journal Astrophysics and Space Science in which he hypothesizes that the samples—water taken from the mysterious blood-colored showers that fell sporadically across Louis’s home state of Kerala in the summer of 2001—contain microbes from outer space.

Specifically, Louis has isolated strange, thick-walled, red-tinted cell-like structures about 10 microns in size. Stranger still, dozens of his experiments suggest that the particles may lack DNA yet still reproduce plentifully, even in water superheated to nearly 600˚F. (The known upper limit for life in water is about 250˚F.)

As a fan of the panspermia theory, I'd been meaning to post about this for a while. Now the Popular Science article has also been picked up by CNN, this red rain incident and accompanying extraterrestrial-life theory is getting wider attention.

My «panspermia» tag at del.icio.us collects some of the coverage and research papers (including rejected versions) about the 'red rain' and other possible evidence for life elsewhere.

Tags: panspermia, red+rain, extremophiles, exobiology, ETs

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Joe Dunce for California Controller?

We're deep into primary election season in California, meaning broadcast TV is saturated with political advertising. A lot of it is unintentionally humorous -- the attacks between the Dem governor candidates, Steve Westley and Phil Angelides, have been especially funny, featuring flimsy appeals to the sort of cartoon-villain archetypes that might appeal to Dem primary voters: "evil real estate developer", "negative campaigner", "negative campaigner" (the other guy, now), "favor seller", "tahoe polluter", "friend of Schwartzenegger".

My favorite unintentionally funny ad, though, is in the down-ticket race for the Dem controller nomination. The candidate, Joe Dunn, claims to be "the man who cracked Enron" because he chaired a committee investigating California's 2000-2001 energy crisis, including Enron's involvement. (Never mind that none of the recent convictions for Enron heads Kenneth Lay and Jeffrey Skilling had anything to do with Enron's operations in California.)

However, Dunn's heavily-played TV commercial poses the question: can a man 'crack' Enron if he can't find it on a map?

The 'action scenes' (set to 'action music') of the commercial are interspersed with tracings on a map showing Dunn's travels during his investigation. But here's the key frame, for me:

Astute students of geography will note that Dunn's team has rendered Houston on the Mississippi, deep in Louisiana, essentially where New Orleans is. (Or perhaps, to be precise, Baton Rouge.) The real Houston is about 300 miles west, where that other bay is on the left side of the Dunn ad frame. For those needing a refresher, here's a helpful map from the Washington Post:

Now, neither gulf coast transplants nor the geographically astute are likely to be swing voters in the Dem primary. And perhaps it doesn't matter. For example, I can't find any other references to anyone who's noticed this error.

But for the office of controller, the "Chief Financial Officer of California" who must "account for and control disbursement of all state funds" and "determine [the] legality and accuracy of every claim against the State" -- I'd rather have a 'detail guy'. Someone who sweats the small stuff, checks anything in doubt, and expects the same of his team. So bragging about an investigational trip to Houston, but plotting it on a map as New Orleans, just looks comically inept.

(Dunn's opponent, John Chiang, has some cheesy TV ads good for grins too, especially as they show Chiang marching stiffly around downtown business districts, snapping law books shut, and finally staring sternly into the "wind" -- generated by a just-offscreen fan, no doubt. But they don't have the same whiff of incompetence about them as the Dunn ad, and it appears Chiang at least has some tax and finance experience compared to that of a grandstanding lawyer.)

Tags: joe dunn, california, elections, controller, tv, politics, houston, new orleans, john chiang

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"Team Human" and still more on saluviruses

Reuters at ABC: We are not entirely human, germ gene experts argue

"We are somehow like an amalgam, a mix of bacteria and human cells. There are some estimates that say 90 percent of the cells on our body are actually bacteria," Steven Gill, a molecular biologist formerly at TIGR and now at the State University of New York in Buffalo, said in a telephone interview.

We might better think of ourselves as "team human": a flotilla of life teeming with many other species.

A few years ago I suggested the term saluvirus for beneficial viruses, expecially those naturally-occurring. Slate has an interesting article on what were probably the first-discovered saluviruses: bacteriophages, viruses which kill bacteria.

Daria Vaisman at Slate: The Soviet method for attacking infection

The word phage comes from the Greek "to eat." A phage contains genetic material that gets injected into a virus's host. Whereas "bad" viruses infect healthy cells, phages target specific bacteria that then explode. At Eliava [phage research institue in former Soviet Georgia], phages are produced as a liquid that can be drunk or injected intravenously, as pills, or as phage-containing patches for wounds. Though few published articles in Western journals report positive clinical trials—most of the recent long-term research on phages comes out of the Soviet Union—some Western scientists say that phages are safe and that they work. "There is no evidence that phage is harmful in any way," says Nick Mann, a biology professor at the University of Warwick in England and co-director of phage R&D company Novolytics.

I remember immediately thinking when I first learned about bacteriophages in high school biology that they could be a useful against harmful bacteria. I don't recall our curriculum addressing that possibility.

An exicting part of the article is the prospect of custom phages for any bacterial strain, and constantly updated phage mixes much like constantly-updated flu vaccines. But US medical regulation would throw a monkey-wrench into such dynamic/active medicine:

There are two ways that phages are currently used in the former Soviet Union, and both pose problems from the point of view of the Food and Drug Administration. At the Tbilisi phage center, phages are personalized: You send your bacterial sample to the lab, and it's either matched up with an existing phage or a phage is cultured just for you. In the United States, by contrast, drugs are mass produced, which makes it easier for the FDA to regulate them.

Phages are also sold over-the-counter in Georgia. People take the popular mixture piobacteriophage, for example, to fight off common infections including staph and strep. These phage mixtures are updated regularly so they can attack newly emerging bacterial strains. In the United States, the FDA would want the phages in each new concoction to be gene sequenced, because regulations require every component of a drug to be identified. To do so would entail prohibitively expensive and lengthy clinical trials.

There is some hope for Americans unable to travel to Georgia: "Phages might be offered someday at clinics on Native American reservations, as a casinolike quirk of legislative autonomy."

One step beyond culturing phages from natural stocks would be designing synthetic disease-specific viruses -- and it turns out that's not just appropriate for bacterial disease, but cancer:
New Scientist: Engineered virus thwarts ovarian cancer in mice

Bartlett’s team created a modified vaccinia virus that would target and kill cancer cells. They did this by removing genes in the virus that help it to produce a growth protein. This means that the virus survives best in cancer cells that can supply it with large quantities of this growth protein, as opposed to non-cancerous cells that only produce very small amounts.

The vaccinia virus was also engineered to carry a gene for an enzyme called cytosine deaminase that causes cell suicide in the cells it infects.

Of the mice given the immediate injection, 90% were still alive 180 days later and showed no signs of tumour growth, says Bartlett.

There are previous reports of naturally-occurring anti-cancer viruses. Perhaps spontaneous remissions from cancer are actually triggered by catching such a natural virus, purely by luck. Anyone enjoying such a fortuitous remission should thus be a prime hunting grounds for new saluviruses.

The healthy should be under the microscope in the search for contagions nearly as often as the sick.
Tags: saluvirus, phages, cancer, fda, medicine, bacteria, disease

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The war against metadata?

Piratbyrån's talk at Reboot 8.0: The Grey Commons

The war against file-sharing is essentially a war against the distribution of uncopyrighted metadata, not against the distribution of copyrighted material. It is about hindering the ever-present piracy from globalizing and open indexing, pushing it back to the family and the schoolyard and the workplace. Scaling-down, not in quantity but in network scale, from peer-to-peer to person-to-person. The result is not less piracy, but less plurality in piracy.

Technorati Tags: piracy, piratbyran, pirate bay, metadata, file sharing, copyright, reboot, reboot8

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