When Life Hits Pause

Just when I was getting into the daily routines of work, eat, sleep... something happened 2 weeks ago and hit the pause button on my life. As sad and troubling the experience was for me, my friends, and those around us ... I treasured it for giving me perspective on life and especially work. How important is getting those extra engineering resources to build a particular feature versus treasuring life itself, chasing a not a objective but a dream, reaching out to a friend, and holding on to everything that made us who we were ... ? When everything could end so quickly, the “deferred life plan” doesnt seem so attractive, thoughtful, or “strategic”. How important is the future, when we can loose our past so quickly and easily.

Things change... and it changed for the worst for sure but with opportunity for the better... and perhaps that trade-off is worth the suffering and pain to get there. So in the end, I want to wish my friend (you know who you are) my support, love, and ... really... my thanks... I will always be there for you and lets try to make it a turning point for the both of us ...

The Problem with Pay-Per-Action is Liquidity

Snap has been tauting the value of PPA (Pay per Action ) for a while, and I certainly believes that in many ways its a superior model to PPC as pioneered by Overture/Google. (less spamming, higher monetization, less agency issues. . .etc) (What is eBay BTW then a PPA network?, so I do think the model has significant merits... AFTER liquidity has been achieved).

Today, Snap launched a whole bunch of new features hoping to gain the kind of buzz ASK did the last few months. And ofcourse, spent some time tauting PPA again.

Snap Rethinks Search

Snap, a search engine promising pay-per-action

Ads? Content? Snap.com Blurs the Line

Snap Realizes Own Desperation, Uses it as a Marketing Angle

The problem with PPA is liquidity. In the PPC world, agents (aka SEM firms, spammers, arbitragers, speculators, brokers, market makers etc) actually play a very very important role in the Google ad market. (No, they are not just parasites) Just like the stock, bonds, or commodities market, agents brings liquidity in the market which enables.

1) efficient pricing

2) enable principals to hedge out and offload risk to third parties

3) enable principles to participate in the market semi-passively/arms length

4) helps the marketplace scale significantly faster

In the PPA world, the arbitragers do not play a role becaues conversion requirements of PPA... requiring principals to participate in the purchase of “advertising” directly. As a result, keyword auctions will often not recieve enough participants to be priced correctly especially in early days of ramp up. Furthermore, PPA networks will need to invest in directly acquiring retailers instead of relying on speculators (keyword spammers?) to bridge the gap between the market and retailer - thus increasing marketing cost. Speculators also help a market grow and scale as Google did between 2000-2003 when keyword arbitragers helped Google scale before principal advertisers (retailers in this case) began joining Google enmass as well.

All is not lost of course if spam becomes a bigger issue for GYM... for now though, Snap needs to partner more broadly to offset its liquidity issues.