Inside My Brain

Thoughts about startups, tech, marketing, and life

The (Artificial) Intelligence to Adjust

Check out this article in Business Week. The idea is cool – teach a computer how to read stock market conditions and adjust on the fly to produce steady returns. And the founder is pretty buff.

I’ve always wondered if this can be done for advertising media buying. Put in a bunch of channels (print publications, online and mobile sites and ad networks, radio stations, outdoor, etc.), enter some objectives to achieve, and let the computer optimize away. Do you know of anyone working on this? I’d imagine Horizon Media and those big media buying agencies have something like this.

The idea itself is pretty fundamental, whether or not a computer with artificial intelligence is involved – execute an initiative or project, see if it meets the objectives you’ve set, adjust accordingly and continually improve. But can it be done in real time? And how do you know it’s actually optimized?

The Rise and Fall of Online Poker

Last week, the U.S. Justice Department shut down online poker in this country, accusing 11 people of  bank fraud and illegally operating online gambling sites. You can read about it in the Wall Street Journal Online here and check out the very official notice on PokerStars here and below. I have a bunch of money on PokerStars and dreams of a very independent, lucrative career in poker (ehh, kinda), so I am not pumped about this.

This got me thinking about two things:

  1. The ongoing argument is that poker is truly a game of skill, and not chance, so is poker really gambling? In the short term, luck is a huge factor, but I do believe in the long run, it is truly a game of skill.
  2. More importantly, how amazing has the impact of online poker been to the overall industry?

Major online poker sites like PokerStars, Full Tilt Poker and the defunct PartyPoker have transformed the poker world just like Amazon.com changed retailing – the internet has been a disruptive technology that forever altered the landscape. Just like Amazon gave shoppers access to millions of products and streamlined the purchase process, online poker gave millions of poker players instant access to each other, and thus access to a plethora of poker games at all times of the day. Trips to Las Vegas, Atlantic City or the local cardroom weren’t necessary anymore. No more playing (and crushing, if he’s reading this :) ) my old roommate heads-up; I had access to full ring games with people from Europe and Asia in the middle of the night.

This easy access for poker players ultimately led to the Moneymaker effect, which sparked the growth of poker shows on TV networks such as ESPN, The Travel Channel, and NBC, and the transformation of poker nerds to celebrity status. This then proliferated a virtuous cycle where poker players saw the potential for riches and fame, jumped online or to the local casino to play, achieved success and TV air time, and became role models for other poker players, and so on and so forth, leading to the explosive growth of the poker industry.

Now a lot of that is all gone. And for what?

Will the poker industry be able to survive without its online component? And what if other brick-and-mortar industries were stripped of their online components? Could they survive?

Would you work for (or with) the enemy?

Fandom for a favorite sports team might be one of the strongest emotional bonds in the world. But is it strong enough to get in the way of a paycheck?  So my question for those working in the sports industry is, would you be able to work for or with your favorite team’s archrival?

What made me think about this? When watching SportsCenter earlier in the week, I saw an image of LeBron James, whose fandom for the Yankees is well-known (but in my mind, pretty dubious), wearing a Red Sox hat. I then learned that he reached a agreement with Fenway Sports Management to work with his LRMR firm to handle his marketing and sponsorship. Though LeBron called this a purely business decision, and may be a very good one, it still got me thinking about this “working for the enemy” concept.

I then thought back to the time when I was in business school, working hard in trying to break into the sports industry, and I interviewed for a summer internship with the Philadelphia Eagles (I’m a big Giants fan).  Though I got rejected for the internship (by who is now my current boss at the Caps, so it worked out) and never had to make the decision, I was seriously considering how my fandom for the Giants would affect this process. Kind of crazy.

I also thought back to the times when I was asked if I would ever take a job with the Boston Red Sox (I’m a big Yanks fan, so the job would have to be huge for me to take it).  I also thought about my Caps colleagues who are fans of the Pittsburgh Penguins and what they go through. 

Some rivalries are bigger than others, and some fans are bigger fans for a team than others, but I think it’s an interesting question to ask. Am I crazy to think that fandom for a sports team could get in the way of a paycheck? What are your thoughts?

Accounting for Groupon

In the class that I teach at Georgetown, we assigned a midterm where our students had to build a media plan to promote a local sports team. Costs were assigned to various marketing channels, e.g placing banner ads on a local website cost $5K, building a Facebook page costs $10K, etc.  One of the students then asked how much it would cost to run a promotion on Groupon, which got me thinking:

How exactly do you account for the “cost” of using Groupon and other social coupon sites?

The beauty of Groupon, LivingSocial, and other coupon sites is that there is no upfront advertising fee paid by the company offering the deal, and running the promotion leads to increased exposure to new customers, upshot in foot traffic to retail stores and of course incremental revenue, thus garnering an ROI that is essentially infinity. But is that totally accurate?

For companies selling distressed, perishable inventory (such as sports teams, where an unsold seat for a game on Wednesday has no value on Thursday), all revenue is incremental and the ROI pretty much is infinity. But what if the company is a retailer who essentially sells their product for 25% of list price on Groupon, but may have sold it later for full price?

Let’s say company A sells widgets at $100 list price. If they sold 100 of these widgets at full price, the revenue will be $10000. But if they run a Groupon promo and sell 100 widgets at 50% off ($50), the total revenue garnered by the deal is $5000, and Groupon and company A will typically split that revenue down the middle, so company A nets $2500. How is this loss in profit margin accounted for on the books? Should you count that $7500 profit margin loss as the advertising cost (rhetorical question, I know that’s wrong)? How can you determine how many widgets you would have sold without Groupon to predict that profit margin loss?

Kinda makes you think, doesn’t it? Does anyone know how retailers who have used Groupon do their accounting? Am I thinking about this correctly or am I off base? Let me know!

My first blog post – kinda

Hey everyone! So this is kind of my first blog post.  I wrote one blog post a few years ago, but it was about absolutely nothing and I quit after that. I’m a different man with different interests now, and I think I am going to dedicate myself to blogging more than I did back then. Hopefully.

The main reason why I am starting this blog is because it’s a great outlet for self-expression. I work for the Washington Capitals, so my big boss is Ted Leonsis. If you didn’t know already, he wrote a book called The Business of Happiness (http://www.businessofhappinessbook.com/), and one of his tenets for being truly happy is having a method to express yourself.  For those of you who know me know that I have a lot to say, and this blog is going to be one of the channels I use to express myself. This blog will be similar to Ted’s and will be about a broad range of subjects. I consider Ted a role model and hope to be at least 1/10000 as successful as he is.

I think I am a man of many interesting interests and this blog is going to address them all. Here’s a little organized synopsis of myself:

Marketing, in sports and any industry

As I mentioned, I work for the Washington Capitals, and I am Director of Strategic Marketing there. I love my job, and in many ways, my job defines me. I like to think deeply about marketing, primarily in sports but across all industries, and am interested in CRM, social media, mobile marketing, advertising, sponsorship, research, and pretty much anything else that has to do with marketing. I also teach a course on Sports Digital Engagement at Georgetown University, which will fuel many of my thoughts on this topic. A lot of posts here will have to do with marketing and I hope we can get into some great discussions.

Sports in general

First and foremost I’m a sports fan.  This drove my journey into working in the sports industry. I am a big fan of the Yankees, Giants, Caps (not only because they pay me), and Georgia Tech. I also follow the NBA, tennis, action sports and poker (if you think that’s a sport), and a bunch of other sports I can’t think of right now. I hate the Boston Red Sox, by the way. The NCAA b-ball tourney is going on right now and I wish Gus Johnson called every game. He’s awesome. And I love fantasy sports, too. Except when my teams suck.

Poker

I like playing poker. I play online and wish I played live games with friends more. I make trips to Atlantic City and Vegas every now and then. I’ll eventually play in the World Series of Poker sometime during my life.

Food

Ask anyone – I am a great eater, in terms of volume and frequency. In my 3+ years in DC, I’ve eaten at more than 100 restaurants in the area. I’ve lived in NYC, San Francisco, Atlanta, spent some time in Phoenix, LA, and Boulder, CO, and have visited Chicago, Seattle, Philly, and a bunch of other cities, so  I’ve eaten at some great restaurants all over the country.  I like all food except for olives, for some strange reason. I’ll post some restaurant reviews here, and will probably start writing reviews on Yelp. Maybe. I’d love to hear more about your favorite restaurants.

I hope you enjoy my posts and that they provoke thoughts and dialogue.

On to the next one…