What people think a town square in Colombia looks like. (ie the horses)

What a town shopping area actually looks like.

Sunset over the mountains, view from apartment.

View looking the other way during the daytime, and yes I live in a valley.

This is what a typical neighborhood street looks like.

Shopping in the downtown district, known as “the hole” by locals.

View from the cable cars, hovering over the forest on top of the mountain.

What a $5 lunch looks like, with fresh fish and salad.

Somehow we were casted as the faces of Colombia in a TV commercial.

Pool Party on a Saturday. Yes the people are really this good looking.

DJ at the Pool Party.

Paragliding in the mountains.

This is a chiva, which is basically a party bus that we used to get to the water park.

Hanging out at the waterpark with friends.

Huge waterpark (note this picture was taken at closing time) it was packed during the day. Had a wave pool, lazy river and about a dozen water slides.

Did I miss something? Want to see a picture of me doing something while here? Let me know in the comments.

Finding Local Events

Timeout Chicago and The Local Tourist are awesome to see whats going on in Chicago, I find the reviews to be pretty spot on as to what actually expect at the event. During Chicago in the summer there is always a street fest, live music or some sort of activity to check out.

Things to Do

• Summer Dance – free dance lessons then a few hours of dancing in Grant Park downtown
• Architecture Tour – the boat tours are legendary
• Millenium Park Concerts (make sure to bring a bottle of wine, snacks and blanket- also recommend getting their early for good seats)
• Museums- Field Museum, Science and Industry, Art Institute, Shedd Aquarium and the Planetarium. There are other museums in Chicago you can check out but these are the main ones and the first three are staples of the city.
• Beers to Try- Goose Island 312, Green Line Gossamer and Three Floyds’ Gumballhead
• Baseball- Cubs Game is always a ton of fun. The local insiders tip is to go to one of the many bars near the stadium to enjoy a few local beers, then after first pitch walk out to talk to the ticket scalpers (corner of Sheffield and Addison has them every 3 feet). You can usually get really good seats for $10-20 a piece (FYI you have to haggle a little, but works every time). If you like to drink, then “the bleachers” is your best bet, otherwise try to get something in the 100′s or 200′s sections.
• Brewery Tour- Goose Island tour is cool, it costs $10 and you get a cool pint glass a tasting of 6 beers at the end
• Funky Tours- Chocolate Tours, Cupcake Tours, Ghost Tour, Gangster Tour, Food Tour and even a Weird Tour.
• Blues Music- Kingstons Mines, B.L.U.E.S. – they are both across the street from each other, various specials like students get in free during the week or pay cover at BLUES on Sunday and get into Kingston Mines for free the same night.
• Summer Events – Jazzin at the Shed, First Fridays at the MCA and the dozens of Summer Street Festivals check Timeout or Local Tourist as their is one every single weekend during summer.
• Millenium Park- The “Bean” and the water faces art is really cool to see in person
• Beaches- North Ave beach is packed on any warm sunny day in Chicago, make sure to check out the cover bands at Castaways (bar on the beach, rated one of the top beach bars in the world).
• Lincoln Park Zoo and Conservatory- awesome zoo within the city and the conservatory has plants from all around the world, you will feel better with all the fresh oxygen you get checking out the exotic plants
• Tall Buildings- John Hancock and Sears Tower (now called Willis Tower) both are worth doing for the view on a clear day. The trick for the Hancock is to not go to the skydeck but the Signature room on the 95th floor. Ask to sit by the window and you can order a round of drinks for about the cost of going 2 floors up. For Sears Tower, they have a new attraction with a glass ledge so you can look down at a few thousand feet, very very cool.
• Drinking – People in Chicago really like to drink, pretty much you can find a busy bar any night of the week. If you are going out stick to bars in Gold Coast, River North, Lincoln Park, Wrigleyville and Wicker Park (yes bars are all over the city, but this is where locals tend to hangout)

Favorite Neighborhoods

• Lincoln Park – Armitage and Sheffield intersection – (Young, fun, college kids) for nightlife you can go for drinks to Kellys Pub, Mcgees Tavern or Kinkades. For food check out Devil Dawgs (late night), Mcgees Tavern, Sweet Mandy B’s (desert), Lou Malnatis (pizza), Nookies Too (breakfast)
• River North – Hubbard and Clark St is a good intersection to start at, walk either way on hubbard
• Gold Coast – Rush St and Division, is kind of a tourist trap but these bars can be a lot of fun.
• Wicker Park for delicious food check out Jerry’s Sandwiches or Big Star. Tons of awesome bars at North Ave and Damen intersection. Brunch at Crocodile on the weekends.
• Wrigleyville- Clark Street and Addison Intersection – try to visit during a Cubs game to fully understand how crazy the neighborhood gets.

Food

• For a beef sandwich- Portilios – $8-15 good for lunch or dinner, order is with sweet or hot peppers, also ask for it “wet” (the dip the sandwich).
• For a steak- Gibsons – fantastic steakhouse, very old school, recommend dressing up a bit (ie wear pants for dinner) $20 for lunch and $50 for dinner per person.
• For a deep dish pizza- Lou Malnatis – $25 for a deep dish pizza and I recommend ordering The “Malnati Chicago Classic”
• For the best burger in the world- Kuma’s Corner – local tip is to get there right at 11:30am for lunch when they open, or else you may be waiting a while for one of their famous burgers.

Getting Around

Finally the last tip is to buy a multi-day pass on the CTA (Chicago Transit Agency) which will give you unlimited rides on the buses and trains in the city. They sell them in 1,3,5,7 and 30 day increments. It is super easy to catch a cab in most neighborhoods anytime of day and in most cases they can be pretty cost effective if you are in a rush. Apps to catch a ride- Uber, Sidecar and Lyft. But with that said sometime the train is much faster during rush hour (before and after work).

Thanks for checking out my list! Make sure to leave a comment and tell me, what is your favorite Chicago thing to do, see or eat?

Why the promising foray of the Internet giant into TV, print, and radio advertising failed to support its diversification strategy

Intro

I was looking into several different business ideas during the past few weeks to potentially submit them as my idea for Startup Chile. I did not end up submitting any of my ideas, but I wanted to share some insights I found when I analyzed and researched one of my favorite ideas. I wanted to create an online marketing place to buy and sell offline media such as- radio, tv, billboards and print.

Investigating this business idea meant thoroughly researching the industry. I knew going into it that Google made an attempt at this business and I wanted to better understand why it did not succeed and look at the size of the opportunity. It was during this research process that I learned more about the underwhelming results of Google’s foray into traditional media, which was part of their strategy to expand and diversify their business from online media to offline media. The search giant had successes, sure, but these were overshadowed by failures. It is nevertheless an interesting story, one that I thought I’d share with those who have been wondering about doing the same thing.

The Plan

In 2006, Google, led by then CEO Eric Schmidt, unveiled a multi-billion dollar strategy to diversify its advertising platforms, Google AdWords and AdSense. The strategy included rolling out these products beyond online media and Internet search to include three traditional forms, namely: television, print, and radio.

At the time, Google had already established leadership in the online advertising industry. But the company felt it was necessary to expand this stronghold to include TV, print (newspapers and magazines), and radio advertising because:

• It was a crucial step in building a CMO’s (chief marketing officer) dashboard or an online platform through which advertisers and marketers can promote products in any medium – online or offline. “We’re trying to get a simplified AdWords interface where the advertiser gets multiple channels,” Schmidt said. This meant enabling Google clients to either automate the allocation of their advertising budget across the Internet, TV, print, and radio, or to target times and regions for the placement of their advertising material.

• The diversification strategy was also likely a response to meet the expectations of its investors, who had built up Google’s stock valuation to more than $100 billion. (The company’s Initial Public Offering took place in August 2004 on Wall Street, with an opening price of $85 per share.)

Indeed, there was an opportunity for Google to leverage the technology behind its advertising platform in order to buy unused ad space – in TV, print, and radio – then sell these to standby advertisers at a significantly discounted price.

“Anything that would help move unused inventory for markets of any size will be seen as a positive…,” said Bill Stakelin, the former President and CEO of Regent Communications, Inc., now Townsquare Media.

Added an unnamed former Google executive who had been involved in discussions about the company’s proposed business diversification efforts: “Google executives would never say it out loud, but everyone thought that Google could make advertising (media-buying) agencies unnecessary.”

The Promise

The appeal of Google’s platform to potential advertisers lay in the company’s engineering and technological capabilities – as well as in the discounted rates. This implied several advantages for Google:

• Google’s program was meant to target a specific segment of advertisers. This segment included small businesses, online retailers, and companies in remote locations that either did not have the ad budget to pay for original fixed rates, or which could not easily be serviced by bigger, more metropolitan publishers, broadcasters, or media agencies.

• “I’m hopeful the program will lower advertising costs in the print world,” expressed Bruce Telkamp of eHealth, an online insurance agency. “By aggregating a large number of advertisers, Google should get purchasing power.”

• The strategy also promised to position Google as a partner of sorts for print publishers and TV and radio broadcasters, many of whom saw how Google could develop a more effective way of selling unused space (or “remnant space” in industry lingo): by letting advertisers bid online for placement, with a self-service formula that would integrate a Web-based platform like AdWords and AdSense.

• “Every day in the newspaper we have a fair amount of space we set aside for ads that we are unable to fill,” said Owen Youngman, then the Vice President for Development at The Chicago Tribune. “Google says they can bring us thousands of small advertisers for space we would otherwise fill with house ads, and we say, ‘Great.’”

• Added Michael Lemke, who was representing The Seattle Times: “We have tens of thousands of advertisers we deal with face-to-face. They are talking about an exponentially larger base that can do business on a self-serve basis. These are clients that metropolitan newspapers have a hard time getting to.”

• Further helping Google’s cause was its large network of online advertisers, many of which had never bought traditional ad space, but would soon be able to using a single computer system.

Print: The Execution and the Players

Google began its non-search – and offline – diversification strategy in late 2005 and January 2006 by running a small-scale trial (called “Google Publication Ads”) in which the company sold ad space in print editions of 50 major newspapers. These included:

• The Chicago Sun-Times

• Gannett

• Hearst

• The Seattle Times

• The Tribune Company

• The New York Times Company

• The Washington Post Company

Google started with newspapers because of the numbers: at the time, $48 billion were being spent yearly in the U.S. alone. “Print adds value the Internet doesn’t have,” noted Tom Phillips, who headed Google’s print operations. “It is a different browse-able reading medium.”

The New York Times gave an account of how the system worked:

To use the Google system, newspapers list the sorts of ads that are available, including the sizes, days of the week and sections. They will also enter what is known as the open rate — a sort of list price — for each type of ad.

Advertisers then can log into Google’s main advertising system, known as AdWords, and click to go to the newspaper section. They will see a list of the participating papers and the sorts of ads that are available. They can then enter a bid for a certain type of advertisement, specifying the section and date range. Newspapers in turn see these bids and accept the ones they want.

The system is not exactly an auction — the papers do not commit to selling any advertising space. They can choose to accept as many or as few bids as they like at any time. One reason is that the papers often do not know how much space they have available until the last minute, depending on the other news and advertising on that day. Moreover, the papers sometimes can add pages if there is a lot of advertiser demand.

In February of the same year, the company held a similar auction in which they bought then resold ad space in over 20 magazines, including PC Magazine, Martha Stewart Living, Budget Living, and Road & Track. The magazine market accounted for $12.8 billion at the time.

A report by Bloomberg Businessweek gave details on one of the highlights of the experiment: “Nicholas Longo, CEO of CoffeeCup Software, which makes tools for creating Web sites, wound up paying just $4,000 for each of three half-page ads in Martha Stewart Living. It was a long shot: The magazine’s rate card pegs the price of a half-page ad at more than $59,000.”

The Flop

The rest of the results of Google’s print advertising efforts, however, were underwhelming. The fact that the company felt the need to extend the auction by several days made it evident that there was little demand from potential buyers. Moreover, a related Businessweek story reported that 8 out of 10 participating advertisers were “disappointed with the results and probably wouldn’t buy print ads through Google again.”

Why did this happen?

• Businessweek suggested that the print industry – while a lucractive market – “failed to meet Google’s lofty expectations.” The company also had difficulty breaking into the print advertising business without undercutting existing prices – and the small-scale trials didn’t even generate enough sales to make it worth expanding the program with bigger ad units. From the report: “Magazine publishers display ad prices on rate cards and typically give large marketers discounts from those rates. Publishers are reluctant to provide Google with bigger discounts than its best advertisers for fear of seeing rates collapse.”

• Google’s inability to lower the prices on print ads could be attributed to the very nature of print media (as opposed to the Internet). The production and distribution costs of newspapers and magazines made print ad space naturally more expensive than online ads, which meant that publishers couldn’t sell their ads to Google – even remnant space – for pennies.

• The Register offered another point of contention, one that had little to do with price talks: “… large advertisers (in print media) are used to a more cozy relationship with publishers than Google generally offers. Google customers are used to bidding online for placement… Google customers may be unused to the lack of feedback, when compared to the click-rates available with on-line advertising….”

Radio: The Execution and the Players

Following this failed initiative, Google apparently stopped updating the website that it had originally created for its print ad program – AdSenseforPaper. Still, despite – or because of – this disappointing initial foray into traditional advertising, the company devoted more money, people, and attention to the expansion of the program, this time via “AdSense for Radio”.

• In January 2006 – just before its acquisition of YouTube – Google acquired dMarc Broadcasting, a company which facilitated the sale of radio ad space online. Owned by brothers Chad and Ryan Steelberg, dMarc “connects advertisers and agencies directly to radio stations with a robust advertising platform that automates everything from sales to scheduling, delivery and reports.” The company’s Scott Studios and Maestro automation systems were designed to enable advertisers to purchase and track campaigns, as well as reduce costs associated with processing broadcast ads.

• Eric Schmidt described AdSense for Radio as “essentially the integration of the dMarc Console and management tools into our advertising network.”

• Schmidt also told Forbes.com that more than 1,000 people would work on Google’s radio advertising efforts, which would be facilitated through a modified version of the Google AdWords placement platform.

• Bill Figenshu, the chief operating officer of Softwave Media Exchange – a rival of dMarc Broadcasting – revealed that he had been in talks with people who disclosed that Google was in talks to buy $1 billion in radio ad space from the San Antonio, Texas-based Clear Channel Communications, Inc.

Reuters reported that Google – led by 24-year astrophysicist David Friedberg– would begin testing a version of the AdWords system for the radio market by the end of 2006. With the dMarc acquisition, it now had a new radio ad distribution channel for its advertisers.

• This channel automated the task of transmitting advertising material to radio stations, as well as of scheduling them and tracking when they ran.

• To increase the sales of radio stations, Google let advertisers bid on slots based on the performance of the ads, instead of on the number of listeners the ads were expected to reach.

• Google did have competitors as it made its entry into the industry. Bid4Spots, a Newmark Advertising subsidiary, was holding a weekly online auction of unused radio ad space at the end of each week – space that, when filled, would be broadcasted the following week. In this last-minute selling of spots – a kind of “reverse auction” – stations competed for the advertising budget by offering remnant space at the lowest cost per thousand. Soft Wave Media also leveraged its Remnant Radio software and Web-based program to sell radio ad slots to more than a dozen New York stations, as well as a network that included Citadel, Clear Channel, and CBS Radio.

The news of Google’s unexpected entry stirred a wide range of reactions from the radio broadcast industry (which had generated $19.5 billion in revenue in 2005).

• Said Marc Guild, then President of the Marketing Division of Interep National Radio Sales, Inc., one of the two national rep firms (along with Katz Media) through which flowed an estimated 20 percent of annual radio revenues: “dMarc is only for certain types of remnant inventory, filling the needs of only a small, very specific group of advertisers.” He also expressed caution at the fact that dMarc did not allow advertisers to buy specific stations – only a specific format in a given market.

• Meanwhile, former Bear Stearns senior media analyst Victor Miller said that the Google-dMarc partnership would indeed attract new interested parties who wanted to buy advertising. He pointed to a “new world order” in radio, and suggested that the development to watch out for was whether Google would continue to sell remnant ad space or expand to compete with the rep firms, which had exclusivity over national ad sales.

The Flop

Google, however, did not even come close to reaching that point of competing with national rep firms. Like its print auction program, the company’s radio advertising venture soon fizzled. On May 31, 2009 – less than three years since it began automating the buying and placement of radio ads – the company pulled the plug on the program. A Wall Street Journal report outlined the major reasons why.

• “Google misjudged the capacity of its technology to work beyond the Web, and underestimated the human side of the business. Radio stations refused to turn over airtime to a computer algorithm that set prices far lower than their own rates. Big advertisers steered clear.”

• Even though Google’s prices delivered substantial discounts, most of those who bought its ads were small businesses. Bigger prospects wanted the freedom Google refused to give – the freedom, that is, to be able to determine which stations their ads would run on, instead of just station types and specific geographic locations.

• CEO Schmidt noted that while Google’s computers “can do the math really well”, there also wasn’t a good enough signal or an effective enough way to measure how listeners responded, or how each ad performed. In an official statement, the company expressed that it had “devoted substantial resources” to developing radio and print ads, but the resulting products “didn’t have the impact we had hoped for.”

• According to Daniel Hirsch, who was representing online retailer BedLounge.com, Google’s system also frustrated several advertisers because it refused to negotiate prices ahead of time, and instead effectively encouraged “impulse (buying).”

• Hirsch’s experience is only one of many that echoed what Interep’s Marc Guild had said, that it was important to “work with the total needs of advertisers, including creating strategic marketing plans that include planning, promotions, and event marketing. We (Interep) do not reduce our selling to a commodity business, which will ultimately be very harmful to both broadcasters and advertisers.”

• Added John Rosso – then ABC Radio Networks’ affiliate sales director – agreed that Google was unable to offer the creative advice and detail that advertisers typically expected from ad agencies and rep firms. “The success of local radio is helping your customers grow their business, which means you need to do more than just sell a quantity of spots to really effectively do that. It’s very consultative. You need to make sure you’re getting the right number of spots in the right dayparts and that the creative is done right and that the value add is there.”

• Google also experienced major difficulties in signing up bigger radio stations, which were hesitant to auction portions of their ad slots. These unresolved pricing ramifications were in part due to the company’s refusal to set minimum bids; but it was also a result of Google and dMarc not always agreeing on their strategy. According to the same WSJ report, “dMarc… advocated blasting the market with salespeople to push the auction concept, but also negotiating fixed-price packages and discounts that are more typical of how radio spots are usually sold. dMarc also asked for 50 new employees and submitted a long list of prospects, according to people familiar with the matter. Google favored hiring only seven or so new salespeople, and told the Steelbergs their candidates weren’t qualified….”

TV: The Execution and the Players

Undeterred, Google focused on its remaining toehold in traditional media advertising: TV.

The new system – called “Google TV Ads” – was, according to its head of strategic partner development, John Saroff, designed to attract “a lot of new demand to television.” He believed that advertisers who had never placed ads on TV – or even thought of pitching for it – would find the online-based Google TV Ads so much easier and cheaper to use. Mashable gave an account of how the system worked:

Using TV Ads is almost as easy as using Google AdWords: you do it all from a web interface in a couple of simple steps. First, you choose your target audience; then, you choose the networks, dayparts, and specific programs you want your ad to run on. Finally, you choose the cost-per-thousand impressions you’re willing to pay; and you actually pay after your ad airs on TV.

Of course, to place an ad on TV; you first need to have a TV ad; however, Google’s Ad Creation Marketplace provides you with the tools to connect with pros who will provide scripting, copywriting, editing, production and voiceovers for your ad.

There’s a sweet deal thrown into the mix, too; for a limited time, Google will cover the cost of creating your TV ad through the marketplace up to $2000…. To understand how huge this is, try and set up a TV ad campaign through any other means. Yup, it’s way more complicated than what I’ve just described.

The websiteforGoogleTVAds boasted of the system’s ability to “pick popular and niche programs across all dayparts without any forced program bundling.” It also offered advertisers the ability to “measure campaign performance and ROI with detailed next-day reporting.”

How? Google would use data it received from set-top boxes in satellite TV households then organize this data into metrics. Saroff said that while the information was anonymized, “it does tell us how many people are watching a given channel at a given time.”

Google began testing its TV ad system in 2006 by partnering with Astound Broadband to target 25,000 suburban San Fransisco households.

• In 2007, the company reached its first official TV ad sales deal with EchoStar (which then had 13.1 million satellite TV subscribers), enabling it to sell TV ad inventory from EchoStar-affiliated Dish Network’s several satellite channels, including ESPN, CNN, Discovery, Lifetime, Nickelodeon, and the Disney Channel.

• By 2009, Google TV Ads expanded its reach to subscribers and branched out to include national cable networks like Bravo, MTV, USA, CNBC, and MSNBC.

• In August 2010, DirectTV Networks, a U.S. satellite pay-TV operator, joined the network of Google TV Ads, enabling Google to sell advertising inventory across all time slots in channels such as Bloomberg, Fox Business, Centric, G4, Current, Ovation, Chiller, and TV Guide. According to the company, the deal helped Google reach a base of 18.7 million satellite households.

• Other carriers and networks that Google reached an agreement with were the Game Show Network, Outdoor Channel, and CBS College Sports.

• In October 2010, however, NBC Universal decided to end its TV ad deal with Google. According to reports, NBC Universal felt that Google TV Ads, while filling enough space on small channels, “hadn’t worked out so well in regard to more established networks.”

The Feats and the Flop