Amazon's recommendation system could be more intrusive than Google.
When Amazon recommends a product on its site, it is clearly not a coincidence.
At root, the retail giant's recommendation system is based on a number of simple elements: what a user has bought in the past, which items they have in their virtual shopping cart, items they've rated and liked, and what other customers have viewed and purchased. Amazon (AMZN) calls this homegrown math "item-to-item collaborative filtering," and it's used this algorithm to heavily customize the browsing experience for returning customers. A gadget enthusiast may find Amazon web pages heavy on device suggestions, while a new mother could see those same pages offering up baby products.
Judging by Amazon's success, the recommendation system works. The company reported a 29% sales increase to $12.83 billion during its second fiscal quarter, up from $9.9 billion during the same time last year. A lot of that growth arguably has to do with the way Amazon has integrated recommendations into nearly every part of the purchasing process from product discovery to checkout. Go to Amazon.com and you'll find multiple panes of product suggestions; navigate to a particular product page and you'll see areas plugging items "Frequently Bought Together" or other items customers also bought. The company remains tight-lipped about how effective recommendations are. ("Our mission is to delight our customers by allowing them to serendipitously discover great products," an Amazon spokesperson told Fortune. "We believe this happens every single day and that's our biggest metric of success.")
Amazon also doles out recommendations to users via email. Whereas the web site recommendation process is more automated, there remains to this day a large manual component. According to one employee, the company provides some staffers with numerous software tools to target customers based on purchasing and browsing behavior. But the actual targeting is done by the employees and not by machine. If an employee is tasked with promoting a movie to purchase like say, Captain America, they may think up similar film titles and make sure customers who have viewed other comic book action films receive an email encouraging them to check out Captain America in the future.
Amazon employees study key engagement metrics like open rate, click rate, opt-out -- all pretty standard for email marketing channels at any company -- but lesser known is the fact that the company employs a survival-of-the-fittest-type revenue and mail metric to prioritize the Amazon email ecosystem. "It's pretty cool. Basically, if a customer qualifies for both a Books mail and a Video Games mail, the email with a higher average revenue-per-mail-sent will win out," this employee told Fortune. "Now imagine that on a scale across every single product line -- customers qualifying for dozens of emails, but only the most effective one reaches their inbox."
The tactic prevents email inboxes from being flooded, at least by Amazon. At the same time it maximizes the purchase opportunity. In fact, the conversion rate and efficiency of such emails are "very high," significantly more effective than on-site recommendations. According to Sucharita Mulpuru, a Forrester analyst, Amazon's conversion to sales of on-site recommendations could be as high as 60% in some cases based off the performance of other e-commerce sites.
http://tech.fortune.cnn.com/2012/07/30/amazon-5/?hpt=hp_t2
Internet giants combine to create new lobby on Capitol Hill.
Google Inc, Amazon.com Inc, eBay Inc, Facebook Inc and other big Internet companies are starting a trade association to handle political and regulatory issues in Washington, a person close to the group said on Wednesday.
The Internet Association, which will open its doors in September, will act as a unified voice for major Internet companies, said President Michael Beckerman, a former advisor to the chairman of the U.S. House of Representatives' Energy and Commerce Committee.
Beckerman would not identify the association's members or discuss which issues the group will focus on. But the source confirmed that leading members were Google, Amazon, eBay and Facebook.
Internet companies have been lobbying recently on issues as disparate as easing visa restrictions to hire overseas engineers, revenue repatriation, privacy, cybersecurity and sales taxes for Internet companies.
"We want to educate (lawmakers) about the impact of the Internet in their congressional districts," said Beckerman. "In September, we'll do a full rollout and announce companies and announce policy positions."
Google and Facebook have been steadily ramping up federal lobbying spending.
Google, the world's No. 1 Web search engine, increased federal lobbying spending by 90 percent year-on-year, spending $3.92 million in the second quarter to lobby the U.S. Congress, the White House and various federal agencies, according to required filings disclosing lobbying.
The company, which is being investigated by antitrust regulators in the United States and Europe, lobbied officials at the Federal Trade Commission, the Federal Communications Commission and the Department of Commerce.
Facebook boosted its spending on federal lobbying by 200 percent in the second quarter, spending $960,000 on issues including online privacy and immigration reform.
The world's largest online social network with 900 million users, Facebook said it lobbied lawmakers on market structure and initial public offering issues during the quarter.
In May, Facebook became the first U.S. company to go public with a market valuation above $100 billion. But the market debut was marred by technological glitches on the Nasdaq exchange and criticism that the IPO was priced too high.
EBay spent $400,600 dollars on lobbying in the second quarter, up about 10 percent from the same quarter in 2011. Its lobbying efforts focused on piracy and counterfeiting, air pollution and revenue repatriation, according to disclosure filings.
Amazon spent $690,000 in the second quarter, up about 25 percent from the second quarter of 2011. Its lobbyists worked on issues including sales tax, privacy and advertising.
http://www.reuters.com/article/2012/07/25/net-us-congress-lobbying-idUSBRE86O1JO20120725
http://www.tgdaily.com/business-and-law-features/64959-new-lobbying-group-draws-industry-heavyweights
http://www.activistpost.com/2012/07/internet-giants-combine-forces-creating.html#more
Twitter will (spy) gauge voter sentiment in new venture.
Twitter says it has developed a way to measure how its users feel about the presidential candidates, drawing on the nearly 2 million weekly posts on the micro-blogging site about President Obama and Republican challenger Mitt Romney.
The company joined forces with the data analysis firm Topsy and two campaign pollsters--Democrat Mark Mellman and Republican Jon McHenry--to launch the new Twitter Political Index, which it says "evaluates and weighs the sentiment of tweets mentioning Obama or Romney relative to the more than 400 million tweets sent on all other topics" each day.
Topsy developed an algorithm that assesses the sentiment of a tweet in the same way that a random individual would more than 90 percent of the time. And Adam Sharp, the leader of Twitter's government, news, and social innovation team, says that the algorithm can be altered and refined to reflect the changing rhetoric of the campaign. "It is a collection of key words, phrases, and patterns that is ever expanding what is positive and negative," he said.
The initial installment of the Twitter Political Index, called the "TwIndex" for short, shows Obama with a score of 34 and Romney with 25, based on tweets posted on Tuesday. Since the TwIndex compares tweets about the candidates to all tweets on other topics, that means that tweets about Obama are on average more positive than 34 percent of tweets not mentioning him. It also means that tweets about Obama are generally more positive than tweets about Romney. The plan is for the latest Twitter Political Index will be posted each day at 8 p.m. at election.twitter.com.
The TwIndex can also be used to show changes in perceptions of each candidate among Twitter users. Sharp shared charts and graphs with National Journal that showed the changes in TwIndex scores for Obama closely paralleling movements in Gallup's daily-tracking poll. And because the TwIndex is a daily, immediate measure, compared with the three-day rolling sample used by Gallup to form its tracking poll, tweets often foreshadowed changes in the president's approval rating, he said.
http://nationaljournal.com/2012-presidential-campaign/twitter-will-gauge-voter-sentiment-in-new-venture-20120801