Polygraph Media Blog

Making sense of controversial City of Austin Web Project, Government 2.0, OpenAustin

Stepping back from industry developments for a moment, I thought I'd try to make some sense of recent developments in Austin following a recent award of a major web development contract to a company from California.

First, some context.  I'm still a relative outsider in the Austin community, having moved back to town 8 months ago after spending almost 4 years in Seattle.  I am just now getting to meet folks and establish myself and my business here in Austin.  Additionally, I have met a few of the folks involved in government contracting from the private sector *and* our company Notice Technologies recently won a small contract with the city to help the SBDP (Small Business Development Program) market local businesses through its ExploreLocalAustin.com web site.  I am not going to make any value judgments here as much as I am going to summarize what happened (as far as I can tell) and suggest solutions to the systemic problems behind the story.

So what happened?  In shorthand, the City put out an RFP for a major overhaul of its web sites, citing that the sites are built using 12 year-old Web technology.  Makes sense, the world is *a lot* different today than 12 years ago.

Three companies bid on the project, two from the Austin area and one from California.  The Austin companies bid a little more than $1.3 million while the California company came in at a significantly cheaper rate of just over $700k.  Who won?  The California company, of course -- I'll bet the cost difference was eye-opening.

All of this created quite a stink within the local Austin Web community.  Why?

1. Three companies bidding -- The first many folks heard of this large project was the uproar around its award.  The City of Austin says that over 200 companies were notified.  While I'm sure that is based in truth, I wonder exactly what notification really means in this sense.  Clearly the tactics used to communicate with the community at-large didn't work very well.  It doesn't make any sense that a contract this large would only attract the interest of two local companies, especially in the recession we're in.
2. Loss of business to California -- In the tech industry, folks here in Austin hear about how things are in some way more legitimate or more sophisticated on the West Coast.  In my experience, this is certainly true in some areas.  But there is certainly enough talent in town to build a Web publishing system for the City and its various departments.  There is enough social media talent here to figure out how to use new technologies to make communication more efficient.  Folks around town know this, which makes losing a contract to a company in another part of the country particularly painful.
3. Lack of community feedback? -- In part because of the small # of companies bidding on the project, I think a lot of folks jumped to the conclusion that the City hasn't been seeking help to put together the best plan to fix its Web Sites.  Well, the City has apparently been thinking about this for awhile... try 18 months plus.  The City first solicited the Public for feedback in November 2007.  If you scan the City's AustinGo web site, you'll find detailed information on the process, a supporting blog (that was updated minimally), Town Hall meetings, etc. As a taxpaying citizen, I am not entirely sure I want the City to take longer than 18 months to go through feedback, evaluation, planning, scoping, and vendor selection.  But the data suggests that the City did a really good job of documenting the entire process here.
4. Concern over evaluation criteria & qualifications of evaluators -- I've heard this mostly from folks in the private sector.  People are concerned that the City may not have the right people to make an informed evaluation of the proposals they see.  I can't & won't comment on this -- I don't know the people involved, their backgrounds, etc.  What I can say is that very few people have 1) done business with the City, and 2) seen all the proposals to make a qualitative judgment.  Similarly, there is no governance from the private sector (as far as I can tell) to ensure that the City personnel are indeed making the right decision.  I think this is where private sector folks get concerned.

Meanwhile, in this case folks in the private sector have responded with the OpenAustin initiative -- it's a collection of crowdsourced ideas of how to improve Austin & City operations.

Overall, this is a very interesting case for Government 2.0 broadly.  As Government institutions get more and more resources and as they modernize, there is more at stake for the private sector.  Ergo, I expect more private sector involvement and scrutiny of Government decisions.  Remember, folks in Government agencies are already limited by issues of fairness, equality, internal policy, limited budget, etc.  Public sector scrutiny may just make it that much more difficult for Government decision-makers to move quickly and be bold. 

So how can this be fixed to the satisfaction of all involved?  A few thoughts:

1. Official local government policy re: supporting local business/employment -- This can be an explicit policy or one enforced in proposal scorecards. (i.e. Is the proposer doing most work locally?  Yes -- high weight)  I think this works well in communities that have the existing talent to get the job done.  Going too aggressive would create negative outcomes as well, so there is a happy medium here.  In any event, I think each local government should have a policy regarding the use of local companies vs. companies that don't contribute meaningfully to the tax base.
2. Public/Private Partnerships -- Government personnel are not always going to be the most qualified people to assess private sector proposals.  Get people from the private sector to help with these assessments.  Note I did not say "get them to make the decision for you".  A private-sector board that is available to answer questions surrounding a proposal or Government 2.0 decision is a very valuable thing to have at your disposal.
3. Government Transparency in terms the private sector can understand -- Government language and process is very difficult for private sector people to understand.  Often times, folks in Government positions don't understand that this can be very difficult for businesspeople to navigate and plan around.
4. Patience in terms Government can understand -- Entrepreneurs and businesspeople are often used to making quick decisions and doing things in ways that help advance their business.  Agility & execution are keys to winning.  The same is true for Government, but within the confines of what is possible.  Government personnel are often under a microscope that entrepreneurs are never, ever under with respect to public outcry and overreaction.  So when dealing with Government, harken back to the most bureaucratic corporate job you've ever held... and empathize.

Government 2.0 is going to be a major league adjustment for all sides of the equation.  We're just getting started.  Buckle up. ;-)

The Coming Evolution (and not Revolution) in Internet Advertising

I had an interesting chat with a friend the other day about an internet advertising startup.  The underlying premise behind this startup was that it would be beneficial to accurately calculate ROI for internet advertising and social media.  That would be a good thing, of course, because everyone wants to measure ROI right?

Not so fast my friend.

Measuring what happens in any form of Internet Marketing is critical -- be it the basic cocktail of site metrics, social media metrics, paid advertising metrics, etc.  Without it, a practitioner is flying blind and spending money in ways that are not necessarily optimal.  So far, so good right?

ROI measurements are one way to tell how effective your plan is and how well it is being executed.  But how many Internet marketers really want to be held to that standard?  I'd suspect the number is a lot lower than you'd think.  ROI tools bring a level of accountability that a lot of people don't want to face.

If you're building tools or products that help expose ROI of any type of Internet advertising, you have to consider that your biggest objection in the marketplace may come from the very people you are trying to help.  Maybe folks don't want to know their Internet marketing ROI -- because once you expose ROI, you put that person up to scrutiny from their boss... you put their budget at risk... or you put them in a position to kill a particular Internet Marketing initiative that may look *really good* on their resume'.

All of this is why I think that winning Internet & Social Advertising tools will be evolutionary and not revolutionary.  They'll show a taste of what is to come, but they won't change the game overnight.

Content, Evolution, Twitter, and Business Opportunity

Just a quick thought about content & Twitter this morning...

Back in 1999 when we created one of the first live news blogs on the Internet at Stratfor.com, we tripped across a very, very interesting phenomenon.  We learned that the existence of content didn't necessarily make it discoverable.  If you as a user are reformatting, repurposing, or commenting on content, you are in effect changing that content and helping it evolve.  Stratfor.com became an overnight success not just because we did something unique, but because we also put widely available international news/intelligence content into a refined, discoverable format.

Thinking more broadly, search made vast libraries of content discoverable by a large group of people, but only after Google and others transformed large articles & web pages into indexed & short-form summaries like the one below.  This is probably the best example of how evolved content attracts more consumer eyeballs.  If left in its original form, sure it is available but people won't necessarily be attracted to it.

 

Think about what we're seeing with Twitter today -- it's the same sort of content evolution but rather one with human intervention leading the way.  People scan articles that they read -- via RSS, Web browsing, their favorite Web sites, forwards from friends, etc.  People then tweet or re-tweet their favorite articles, usually with some commentary which repurposes that content & makes everyone a potential distributor.  Industry experts have talked for years about how "human-powered" search/discovery was the next evolution of the Internet.  It's happening a little at a time before our very eyes.  I don't think Twitter will totally supplant the old way of doing things, but it is another example of how technology helps make content more fluid -- easier to consume, repurpose, and ultimately discover.

Despite the fact that we still argue over these points in 2009, content wants to be free and broken into individual elements for consumption/repurposing.  I suspect that there are a number of business opportunities even today in making certain types of high value content more discoverable for audiences who don't enjoy enough transparency.  We are in one such business.  Liberating information & making it more transparent is good business in 2009 and probably will be for quite awhile.

Why Microsoft should buy Twitter NOW

Seriously.

I don't know anything about what's going on behind the scenes at Microsoft, but if I were there and if I could make it happen, I'd do it yesterday.

I understand that Twitter isn't an engineering miracle.  I understand that it can be somewhat easily replicated.  I understand that similar functionality may be in the works at Microsoft.  I get all of that.  But I still don't agree with Mary Jo Foley's assessment that Microsoft doesn't need Twitter.

Buying Twitter would be a bold move... the exact type of bold move that Microsoft needs to supplement gradual improvements in the advertising team there.  Twitter is growing its user base significantly, and advertisers & corporate brands are paying attention.  A Microsoft acquisition isn't going to negatively affect Twitter's brand, but it will signal to the advertising world that Microsoft is a legitimate and forward-thinking player in internet advertising.  It will also accrue benefits to other Microsoft advertising properties.  It will signal that Microsoft is serious about Internet Advertising.

The $300-$500m price tag that Twitter would reportedly fetch is a drop in the bucket for Microsoft in the realm of acquisitions.  It's *really* a drop in the bucket relative to all the money Microsoft will likely spend in coming years to buy a single point of market share at a time.  But perhaps most importantly, there are not many chances to acquire innovative, fast-growing companies in Internet Marketing... certainly not on the scale of Twitter.  This is a winner-take-all game.  The buyer of Twitter wins the battle in consumer real-time messaging, search, and associated advertising.  That's a big deal especially when it also results in a net loss for all other major players in the Internet Advertising business.

If I'm Microsoft, I find a way to get it done and NOW.

Government + Marketing = We Win!

Great news for Notice Technologies.  We were recently awarded our first Government 2.0 contract with Austin's SBDP (Small Business Development Program).  For those of you who don't know much about the Austin SBDP, it's a government organization sponsored by the City of Austin that helps promote ~250 unique Austin businesses in 8 popular "Small Biz districts".  Our task with this project is to conduct better internet marketing for the ExploreLocalAustin.com web site, which is a portal designed to give consumers more information about these businesses and their offerings.  It fits our core strengths in internet marketing, internet advertising, social marketing, and local online advertising.

This project is very similar in some ways to New York City's attempt to help promote local businesses.  NYCGo has actually already launched and its Twitter account has over 500 followers already.

We're really excited about this project because we're going to get a chance to learn more about local online advertising, albeit from a different angle... the Government angle.  We have spoken with a number of different companies who do a great job with local advertising -- directory services, telecommunications companies, newspapers large & small, and perhaps most importantly small business owners themselves.  Government similarly has a role and we're starting to see experiments here in Austin, NYC, and a handful of other cities.  Lots of stakeholders are involved, yet nobody has yet solved the business issues surrounding modernized local advertising.

This project will be great for us.  We'll help the City of Austin solve its immediate needs to better market its ExploreLocalAustin.com web site.  We'll also be a lot smarter about how government fits into the local advertising game.

Onward!

A Moment of Clarity re: Advertising... for me at least

After a few meetings today & rereading this Techcrunch musing about local advertising and newspapers, I had a moment of clarity regarding the advertising industry... where it's been... and where it's headed.  Random thoughts in no particular order:

• People consume media and ads from thousands of sources today.  Consumption is ridiculously fragmented, perhaps permanently, although for all the fragmentation there are a lot of efforts to centralize as well.
• There are so many media outlets, it's arguable that people have media/advertising fatigue.  Hence, they perhaps trust friends/colleagues and a "personal touch" more than ever before.
• Small, local businesses that achieved success in the "Age of Retail" (i.e. until the mid-80s or so) either became chains or went out of business in the succeeding generation.
• Despite the relative lack of local businesses, there is still a need for advertising at the local level... and that need bridges online and offline methods.  Sophistication in online models is largely non-existent even in 2009 while it's extreme in offline advertising.  This will change but only after a lot of experiments take place.
• Web entrepreneurs smell blood in the water when large, successful offline advertising companies fail to move quickly enough to play the game with the "new rules".  Most Web entrepreneurs underestimate the power of existing brands, but managers of most large, successful offline advertising companies also aren't empowered to be bold enough to compete as well as they perhaps should.
• Chains, large and small, spent the better part of the last 10 years optimizing operations, data mining activities, etc. but they have not yet undergone the same optimization of advertising spend.  I suspect this is an anomaly and large agencies will struggle with the realities of deflation sooner or later.
• Consumer behavior, overnight delivery services, and the efficiency of the Internet combine to make ads from other parts of the country or perhaps the World more relevant than an ad for a store right around the corner.

I don't know what this all means just yet... I'm rolling around on a few ideas that I'll share in more detail over coming weeks.

SXSW Interactive Recap/Observations

Despite raging chest congestion during the first few days, I spent the better part of five days in and out of SXSW soaking it all in.  Let me tell you, the show has come a long way since I first attended it 8 years ago.  The show was to some extent an afterthought... or perhaps a warmup for the Music & Film festivals.  But the show is truly a top tier, must-attend event now.  I'm thrilled about it because at least once per year, I don't have to travel to meet the best people the industry has to offer.

A few negatives:  I thought the quality of the panels & presentations was all over the map.  I attended several panel discussions that were fantastic & very well run, and I attended others that were a complete disaster because the panelists perhaps knew less about the subject matter than the attendees.  I won't name names here, but suffice it to say that next year I will target panels with high-quality people rather than high-quality descriptions.

Another issue for me in particular was the difficulty involved in finding people.  SXSW had a great interactive Twitter-esque chat client, but it didn't work as advertised.  In fact, I think it stopped working altogether on the first morning of the show.  Through the Twitter-esque part of the SXSW site, I targeted 40+ people who I needed to meet while there, but had an unexpectedly hard time finding them.  I managed to meet some at parties, some on the trade show floor, and others in panel discussions.  I stalked a few others when I knew what panel they'd attend.  But overall, finding people was a much greater chore than I would have expected for a modern, hyperconnected Web 2.0 event.  Yet despite it all, I made a lot of great connections and considered the event to be a great success.

Robert Scoble believes that SXSW Interactive 2009 will be remembered for the explosion of SMS & location-based applications.  I think he's mostly correct with that assessment although I think we are perhaps in the very earliest phases.  I'm really glad about it as I think that we're at the cusp of the next mini-boom in Tech around these technologies.  Most of the infrastructure necessary for location-based advertising and location-based services is in its infancy.  It will be an exciting few years.

SXSW has become a major event that you can't miss now.  I hope to see you there next year.

New Advertising Models, Newspapers, and Advertising Deflation

Last week, I had an interesting chat/demo with a colleague who has been in the local advertising business for the better part of 5 years now.  I'll spare you many of the mundane details, but he had an observation that I thought was really compelling.

We were talking about the economics of newspapers and the evolution of Google Adwords and Craigslist, etc. over the years.  Assume for a moment that it costs something like $500-$1,000 to run a 3" x 3" advertisement in a local newspaper for a week or so, depending on duration, placement, circulation, etc.  Although intuitively, we all think newspaper advertisements are a bad idea and the money could be better spent online... nobody *really* knows because of the lack of tracking in the old model.  Meanwhile, newspaper advertising has the benefit of years of "incumbency status" (i.e. this is how business has been done for a long time and nobody will get fired or criticized for running a newspaper ad, which is to some degree a semi-known commodity.)

Anyway, the "ah-ha" moment was this guy's question of whether or not tracking is a good thing & an appropriate competitive differentiator for internet-based local advertising alternatives.  Are we going to deflate ourselves into oblivion if we rely upon ROI tracking as our competitive differentiator?  It's a great question.

The challenge from a business perspective is to extract as much economic value as we can from a customer who adopts a modernized advertising model.  Customers are continuing to spend hundreds or thousands of dollars a month on newspaper ads, but will they do the same with Internet Marketing that ironically may be more effective as people do more online?

Beginner's Guide to Government 2.0

I have talked before on a few occasions about how I think Government 2.0 will be a defining theme in our business over the next few years.  It's an inevitable change because the 2nd wave of the Web (notably social media, true collaboration, societal acceptance of user generated content, etc.) has taken hold.  The Web is no longer new... it's discoveries no longer novel... and now it is time to take advantage of the technologies to earn greater efficiency for the public at large.

If you are a government official with the authority and budget to get going on the Web, where do you get started?  Everyone and their grandmother are social media/Web 2.0 experts, yet you need to make a good decision.

I'll leave it up to the reader to determine if we're expert or not, but I thought I'd nonetheless share a few random thoughts and tips about finding the right person or company to help with your needs.  In no particular order:

• Today, in February 2009, there are few if any Government 2.0 experts.  There simply haven't been enough contracts available for anyone to legitimately think of themselves as expert.  And no, running one tactic of Barack Obama's viral marketing campaign doesn't make someone an expert either.  Sorry.  Which leads me to my second point...
• Most successes with Web 2.0 and social media have been done in the private sector.  This is what you want.  Find someone who has solved a problem for a major company or three.  Government, complicated as it is, can be learned.  You will have a hard time (especially in 2009) finding companies or people with Government 2.0 experience.  If you make that a requirement, you are not likely to find the most talented person or company you can.
• Folks who didn't do anything with the social Web before 2000 aren't forward thinking enough for you.  Same goes for LinkedIn users after 2003 and Facebook users after 2005.  Government agencies who shell out good taxpayer money should have the benefit of people who can see long term trends and dive right in.
• Don't get a strategist.  Get someone who can both think through your problems efficiently and implement strategy.
• Training is important.  Once setup, a lot of Web 2.0 projects can run on autopilot if someone on staff wants to monitor success and failure.  Hold consultants to a high standard that includes training and an exit plan.  You don't want to pay a consultant ad infinitum, and you shouldn't if you've hired the right person or company.
• Accept the possibility of a few failures along the way.  Flexibility is key to ultimately getting the efficiencies, cost savings, and customer satisfaction improvements you seek.  Don't freak out if the going is rough early.
• You will probably get what you pay for.  So beware of the overeager who you aren't paying very well.

Our consulting practice can help with your Government 2.0 project.  Feel free to contact us at any time at no obligation.

Comparing Local Newspaper Circulation to Social Media Coverage

Daily Circulation of the Austin American-Statesman -- 173,527
Weekend Circulation of the Austin American-Statesman -- 215,984
# of Facebook Users in the Austin Metro Area -- 318,000+

Wow.