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Brands and retailers vying for their customers’ attention have to be smart. Sending too many mobile offers can lead to a decrease in customer engagement, while sending too few offers can lead to lackluster campaign results. In an effort to find the perfect medium, strategic business owners are increasingly turning to Placecast. The mobile ad company’s ShopAlerts platform uses geo-fencing to send relevant mobile offers to customers located in the nearby vicinity.

How It Works

Since July 2011, Placecast has been offering merchants and brands access to ShopAlerts, a self-service tool for creating, delivering and tracking mobile promotions using location-based technology. From the customer’s end, the platform is seamless. Shoppers visiting a merchant’s store are instructed to text a keyword to a special number or sign up through the web to receive discounts and deals on their mobile phones. Each time shoppers enter a geo-fenced area—which has been determined by the participating merchant—they receive relevant marketing messages delivered straight to their smartphones. In addition to receiving discount codes and deal offers, customers can also receive details about upcoming sales, invitations to private events and insider information that’s only available to customers who’ve opted to receive the merchant’s mobile alerts.

Placecast in Action

Small businesses and larger brands can use Placecast’s ShopAlerts platform to increase user engagement in their mobile campaigns. The platform helps businesses ensure that the mobile deals they send out are reaching the right customers at the right times by utilizing geo-fences to determine when customers should receive text message alerts. In addition to setting up geo-fences around their stores, merchants can also create geo-fences at nearby recreational areas, event venues, dining districts and wherever else their customers hang out.

To determine whether their targeted marketing efforts are paying off, merchants can turn to the custom reports ShopAlerts supplies. These reports show the number of users who’ve signed up to receive mobile messages, what devices those customers were using when they signed up, and where they were located when ShopAlerts’ messages were triggered. For these services, Placecast charges merchants a one-time setup fee, plus variable fees based on the number of active users and messages being sent each month.

Why It Works

The problem with most text-based marketing campaigns is that they target consumers at inopportune times. Most people don’t want to receive text message alerts from retailers while they’re eating dinner with their families or meeting with important business clients. Placecast gives marketers a way to screen out customers whose geographic locations indicate they are not interested in receiving marketing messages at the given time. Sending targeted messages when customers are at certain locations, such as nearby recreational areas or concert venues, also gives marketers a way to pinpoint the specific offers or alerts that are most likely to attract interest and drive traffic at their individual stores. As a result, brands and merchants who use Placecast’s ShopAlerts platform tend to have deeper brand engagement and higher levels of customer satisfaction.

Maximizing the Benefits

Larger businesses that are interested in launching their own branded mobile applications can use the ShopAlerts platform to connect with customers in even smarter ways. Using Placecast’s location-based technology, retailers can push notifications to their customers’ smartphones whenever they enter geo-fenced areas. More importantly, these pushed notifications can be sent even when the retailer’s mobile application is closed. The ShopAlerts platform also gives brands a way to leverage the individual customer data they’ve solicited from loyalty programs and past purchase information—along with weather patterns and times of the day—when creating deals and messages that are relevant to each consumer. source: openforum.com

Last week, my friend Kate e-mailed me a “friends and family” offer from the shoe company she works for. “That’s nice,” I thought. I can always use an extra pair of sneakers or comfy shoes.

So I downloaded the certificate and went to the company’s website. Lo and behold there was the very same offer, available to just anyone.

Like me, you’ve probably felt mildly miffed in the past because a “secret” deal turned out to be nothing special. And you might wonder why a company would dilute the value of an offer that’s ostensibly for its best customers. To avoid having your loyal customers feeling unloved, here are some tips on crafting the perfect offer that will spur them to buy.

Make them feel important. The people who understand the value of an offer best are the folks who develop direct mail and e-mail programs. Without an offer, the mailing is just an expensive retail ad. Most good direct mail is a one-to-one communication, and ideally, it should make the recipient feel important. For example, “Because you’re a Club Member, I’m sending you this special gift.”

Make them act fast. Getting recipients to act is an art, because most of them are sitting at home and probably not in a buying mode. The offer is a “call to action” that gently nudges them to buy or risk losing the deal forever. You don’t have to do this with a shopper in a store, who is already in buying mode.

Create deals that are believable, relevant and involving. Believable means, for example, that if you buy a new computer printer, you get two boxes of paper (which is also relevant), free. Involving means that you’re not offering the same old add-ons. Yesterday I saw a TV spot offering a FREE iPad when you buy a new Honda. It’s involving in a way an $800 discount on a new car is not.

Get creative. Cosmetic companies do it well. If you’re in Macy’s and you see a fabulous designer cosmetic bag filled with goodies that are free when you buy something worth $30, you can’t resist. The bag is unique and perceived as high value. Another way the company wins is that it also gets you to test its products.

Test your offer. Direct mailers have learned that an offer is responsible for 40 percent of the success of a program. So it’s a good idea to test at least two offers–half of your list gets one offer, and the other half gets a second one. Then see which pulls a higher response, and roll out with the winner next time.

A quick and inexpensive way to test your offer is through the U.S. Postal Service’s program for local mail. It’s called the “Every Door Direct Mail Program.” You can test 2,500 names with one offer and another 2,500 names with the second offer.

Generate leads. Your best list, of course, is your own database of your customers’ and prospects’ names. Try to get as many new names as possible from your website or brick-and-mortar store, as they’ll always work better than a random list.

Remember to make your offer unique so that the only way to get it is to respond to the mailer. It will help you track responses and make prospects and customers feel special.

And if you try a “friends and family” offer, make sure it’s available only to friends and family.

What offers have worked for your business? Which ones haven’t?

Lois Geller is president and owner of Lois Geller Marketing Group and headed agencies in New York and Toronto. Lois taught direct marketing at NYU. She’s the author of five marketing books, including Response: The Complete Guide to Profitable Direct Marketing. Follow @loisgeller on Twitter and visit her blog Joy of Direct Marketing for more marketing tips. source: openforum.com

The good news we’ve been hearing about the economy in recent months finally seems to be trickling down to small-business owners. In a recent survey, nearly 60 percent of small businesspeople say they’re planning to hire in the next 12 months. The GrowBiz Media Small Business Hiring and Retention Survey 2012, conducted for my company by SurveyMonkey Audience, polled 700 U.S. small-business owners, most of them with 2 to 50 employees.

Responding to the Uptick

More than 60 percent of the businesses surveyed say they are hiring to meet increased demand for their products or services, and 44 percent say they’re expanding into new products/services or new markets/geographic areas. Of course, good old attrition is responsible for 46 percent of planned hires.

Even among business owners who aren’t planning to hire, 73 percent say they aren’t hiring because of sufficient staff levels. Only 16 percent say concerns about the economy are preventing them from hiring, and 8 percent need to hire employees, but can’t afford to do so.

Small-business owners’ outlook toward the economy as a whole, in fact, is getting sunnier. Asked their opinion of the U.S. economy in the past six months, nearly half (46.7 percent) have seen improvement. About one-fourth say there’s been no change, and 16.7 percent say the economy has worsened a little. Just 6.7 percent say the economy has worsened drastically.

Lasting Growth

With all we’ve heard about the recession leading to a permanent freelance economy, one of the surprising results of the survey is that the bulk of hires small-business owners plan to make this year are the old-fashioned kind: permanent. About 61 percent plan to hire full-time permanent workers, while 48.4 percent will hire part-time permanent workers. Just 13.7 percent will use contractors, 13 percent will use interns, and 9.9 percent will retain virtual workers. As for outsourcing internationally, it’s barely making a mark, with just 2.5 percent of respondents choosing this option.

In terms of the specific business sectors that need staffing, operations will account for 51.6 percent of hires, communication/sales/marketing positions for 27.3 percent, administrative for 21.1 percent and technology for 18.6 percent.

Keep in mind, most of the business owners in this survey had 50 or fewer employees. In other words, even the smallest small businesses are feeling it’s time to make some changes, power up and get ready to grow again. That’s good news for all of us.

Are you planning to hire this year? Access the full survey results here to see how you compare to other small business owners. source: openforum.com

When I started my private nutrition practice in 1999, I immersed myself with getting new clients. I had to–I couldn’t pay the rent otherwise. Within eight months, I filled the practice to capacity. I then realized that I could provide more value teaching business owners how to attract clients. With that, my Client Attraction System was born, one of the main tenets of which is: the best way to bring in new business is to delegate some of the things that you’re doing right now.

I can hear your protests as you’re probably like me, who has an Inner Control Freak that wants to control everything. This may have been essential when starting your business, but it can get in the way as your business matures. Here are my top four tips of what to delegate now:

1. Delegate anything that does not make you money. If you’re doing something that doesn’t make you money, it’s not your “brilliance work” – those activities you perform that bring in the most amount of money using the least amount of time and effort.

Chances are these are the tasks that you simply love to do. To drive the point home on how important this is, I want you to look at how much you earn per hour when you’re doing your brilliance work. Now, consider how much you’re not earning when you’re doing other work you could be paying someone else to do (at a fraction of what your own earning potential is.)

2. Delegate anything that you’re not good at doing. If you’re not good at doing something, chances are you’re not enjoying it, not doing it well and taking longer to do it than someone else would. For me, that task is bookkeeping. I spent way too many hours struggling to keep up my books until I finally realized it was best to have someone else do the job.

Make a list of all those pesky tasks that you know you’re not good at it (or don’t enjoy), then hire a part-time employee or a virtual assistant to get it done.

3. Delegate what you don’t know how to do. Give yourself permission to not have to know everything. I don’t know how to code HTML or how to build a website. But I know that if I want to get more clients and make more money, then I have to have a professional web presence. That means hiring someone who’s got great coding and website skills, and delegating that work to them—which is exactly what I did.

4. Delegate what you don’t have time to do. When I started my business, I kept my own schedule and at first, this made sense. Why would I hire somebody else to tell me where I had to be or what I had to do? But over time the more clients I brought on and the busier my calendar became, the more time it took to schedule–and reschedule–meetings.

Delegation is easier said than done and these tips may sound obvious. Ease the struggle by being really clear about expectations with whomever you delegate to. Define your ideal outcome to them, set deadlines, create checks and balances and be available for questions, especially early on in the process. Don’t chide yourself if you find it’s taking too long to “turn over” a task in the short run. In the long run, it will free you up to do more of your brilliance work and bring in new clients.

OPEN Cardmember Fabienne Fredrickson, The Client Attraction Mentor, is founder of the Client Attraction System®, a step-by-step program that shows you exactly how to attract more clients. source: openforum.com

Behind the counter at Back in the Day Bakery, a neighborhood shop in Savannah, Ga.’s burgeoning Starland District, stand owners Cheryl and Griffith Day, both smiling as they help pie-purchasing customers. This year marks the bakery’s 10th anniversary, quite an accomplishment for the Days, two people who once only dreamed of owning such an establishment.

Both around 50 years old, Cheryl and Griffith met in the early 80s at a nightclub in Chicago. Cheryl, a Los Angeles native and former Soul Train dancer, was in her first year of college. Griffith was a traveling musician from Minneapolis. The two struck up a friendship but then went their separate ways, not meet again for more than 15 years.

Doing the Right Thing

A few years into college, Cheryl lost her mother and returned to Los Angeles to help support the family. She got married and worked in retail, but did not feel fulfilled. She yearned to launch a food business, but felt intimidated by her lack of formal training. Still, the thought nagged her, spurned by memories of baking with her mother.

“My mom would tell me fantastic stories when we would bake together,” Cheryl says. “It was like she knew she wouldn’t be around to tell me them later on.”

Meanwhile in Minneapolis, Griffith was working as a musician and at restaurants on the side. He got married when he was in his late 20s and, in an effort to get serious about a job and career, attended the Minneapolis College of Art and Design. There he earned a degree in video production and worked in the field for the next nine years, at times feeling unhappy.

“I thought I was just doing the right thing, the traditional thing,” he says.

Unbeknown to either of them, Cheryl and Griffith were living similar lives in unfulfilling professions, progressively unhappy partnerships (both divorced in the mid-90s) and wanting to start food businesses.

Reconnecting

The late 90s were lonely years for Cheryl and Griffith. Both fresh out of their marriages, they were looking for new lives but not sure where to start. They found each other’s e-mail addresses through mutual acquaintances and began corresponding, striking up a renewed friendship. It wasn’t until Sept. 11, 2001, though, that things turned a corner.

“9/11 was a real wakeup call for me; I knew I was at a crossroads and wanted to finally do something I was passionate about,” Griffith says.

Cheryl had since moved to Savannah and invited him down for a visit. In-person, romantic sparks flew and a conversation about the future began. Griffith soon moved to the South and they worked on a business plan. The goal: to open a bakery in Savannah’s transitional “Victorian” neighborhood (now dubbed Starland District). All goods were to be made from scratch with local ingredients.

Finding Success

Their dreams became a reality on a hot day in August 2002 when they opened Back in the Day Bakery. Today, around eight employees work at the establishment, which brings in $750,000 in revenues per year, according to Griffith. The couple recently released The Back in the Day Bakery Cookbook (Artisan).

“The book is a thank you to our customers,” Cheryl says. “We’ve really built a community here; our customers are the best people, and we are proud to serve them every day.”

Success has come with quite a few challenges, however. Funding was especially tough in the beginning. Retirement plans and saving accounts were liquidated. The only way they got through was to grow slowly and never spend more than was available.

Another big challenge: finding the perfect employees. Griffith says it took a full six years to, “find the right people to help our dream. Baking from scratch is a lot harder than people think.”

How to Take the Leap

Cheryl advises people looking to enter entrepreneurship to find a mentor and get experience before quitting a day job.

“Then, follow your passion, it is as simple as that,” she says. “Life is just too short to not be doing what you really want to do.”

What business have you always wanted to start? If you’re already an entrepreneur, what helped you make the jump? source: openforum.com

Andrew Keen‘s new book, “Digital Vertigo: How Today’s Online Social Revolution Is Dividing, Diminishing, and Disorienting Us,” warns that social networking could have adverse affects that have not have been properly considered by society. The following is an edited version of my discussion with Mr. Keen:

Q. Do you have a Twitter account?
A. Yes, it’s @AJKeen.

But aren’t you against Twitter and Facebook?
Twitter, and my dependance on it, is part of the narrative of my new book. Twitter is a dependency, not a narcotic.

What about Facebook, do you have an account?
I gave up Facebook. I was embarrassed by some of the things people put up so I decided to close my account and I don’t miss it at all. It’s one of the best things I’ve ever done online.

But Twitter is O.K.? I’m confused.
There is a balance to the way these tools are used and what we choose to share on them. As a writer, Twitter is imperative to my business. Any writer who is not on Twitter should have their writing hands chopped off.

So what is your new book about?
We are being seduced by a new cult in Silicon Valley: the cult of social media. We are told we should reveal ourselves more and more on the network. While we do this, as we sign up for more services like Path and Highlight, we share more and are entering a painful solitude.

Do you think there will be a backlash to Facebook and others?
We are already seeing a backlash. The way people feel about Facebook: The wealth. The dishonesty. The duplicity of our privacy. People are seeing that they are being turned into products on Facebook.

Why “Digital Vertigo”? Are you afraid of heights?
The book is called “Digital Vertigo” because I’m reminded a lot of Alfred Hitchcock’s themes that showed that things that are too good to be true, usually turn around to destroy you. This is apparent with the free social sites online.

Can we find a balance of social media? It can’t just go away.
Yes. Of course. But people have to find their own balance though. I can’t tell them when to use Twitter or Facebook. But I do want to try to remind people that whatever it means to be human is slipping away as we reveal more and more of ourselves on social networks.

This statement sounds a bit sad and depressing.
I don’t think it’s sad and depressing. I think it’s interesting. What Silicon Valley does really well is push the limits, but it’s up to the rest of us to push back a little.

How did we get to this point?
As we’ve heard, “data is the new oil,” and that’s where the value is. Mark Zuckerberg and Facebook are worth $100 billion because he’s figured out how to get rich from our data. The new barons of the 21st century are the people with the data.

This book sounds different. It sounds like you’re genuinely worried about this.

I am concerned that whatever it means to be human is being undermined. This endless temptation to broadcast ourselves, intimately, globally, to the world is ruining us. The majority of us don’t want to be sold and right now, with all of this data, we are being followed around the Web.

What’s next? Do we throw our hands in the air and so “Oh well?”
No. Our data online should be perishable. It should be like drawing something in the sand in the desert. Facebook won’t do this, but others will and there are some of the smartest people I know working on new companies that focus on privacy.

How will these “private” companies make money?
People will pay for them. We don’t have a problem paying for things. People are learning that nothing is ever really free, so people don’t trust free products. The tragedy of the Web is the unthinking acceptance that free works. It doesn’t! The consequences have been very problematic. You have trashy products and you have corrupted content.

Will you Tweet this article when I’m done with it?
Of course. Shamelessly. source: bits.blogs.nytimes.com – By NICK BILTON

It’s official: Google finally owns Motorola Mobility.

After months of jumping through regulatory hurdles and fending off inquiries from authorities, Google said Tuesday that it had completed the acquisition, a deal worth $12.5 billion.

Larry Page, a founder of the company and its chief executive, announced the news in a company blog post.

“I’m excited to announce today that our Motorola Mobility deal has closed. Motorola is a great American tech company that has driven the mobile revolution, with a track record of over 80 years of innovation, including the creation of the first cellphone,” Mr. Page said. “We all remember Motorola’s StarTAC, which at the time seemed tiny and showed the real potential of these devices. And as a company who made a big, early bet on Android, Motorola has become an incredibly valuable partner to Google.”

In a slightly surprising move, Mr. Page also announced that Sanjay Jha, the chief executive of Motorola Mobility who oversaw the introduction of the the original Droid smartphone and Motorola’s first tablet computer, would step down. Mr. Page named Dennis Woodside, whom he described as a “longtime Googler,” as his replacement.

Mr. Page said that he had known Mr. Woodside for nearly a decade and that he has been “phenomenal at building teams and delivering on some of Google’s biggest bets.” Mr. Woodside’s previous roles at Google included helping establish the company’s foothold in the Middle East, Africa, Eastern Europe and Russia. More recently he was president of the Americas region.

“Dennis has always been a committed partner to our customers and I know he will be an outstanding leader of Motorola,” Mr. Page said.

Google first announced its intention to buy Motorola Mobility last August, citing the company’s rich trove of 17,000 patents as a main driver of the deal. However, many analysts speculated that the company could benefit from finding ways to integrate its Google TV and Android software into the smartphones, tablets and set-top boxes that Motorola Mobility builds.

Google received all the necessary regulatory approvals and had been waiting for Chinese regulators to approve the purchase. That final nod came through over the weekend. However, Chinese regulators attached a big condition: that Google’s Android operating system for mobile devices remain available at no cost for five years.

Mr. Page did not specify whether additional structural changes would take place under Motorola Mobility’s new leadership. source: bits.blogs.nytimes.com – By JENNA WORTHAM

The Facebook logo is seen on a screen inside at the Nasdaq Marekstsite in New York on May 18, 2012. (SHANNON STAPLETON – REUTERS)

Facebook’s eagerly anticipated IPO, which turned Mark Zuckerberg into a billionaire and a select group of Silicon Valley insiders into millionaires, has had a decidedly rocky debut, to say the least. Shares, which priced at $38 and advanced as high as $42 on the first day of trading, have tumbled out of the gate amidst a long list of potential problems: “embarrassing” glitches on the Nasdaq, investment bankers who priced the deal too high, and concerns from advertisers about Facebook’s core business. While Facebook may have been “the last great company of the desktop age,” at $38, it was overvalued for a new mobile age where consumers use the site via smart phones rather than desktops or laptops.

While the Facebook team has floated a number of ideas out there as to how to profit from the mobile era, the company revealed that 85 percent of the company’s revenue comes from advertising and 15 percent comes from virtual goods purchased within games like FarmVille and Mafia Wars. Just how reliable are these revenues in the future? At a time when roughly half of Facebook’s users access the social networking site on their mobile devices, the company still doesn’t seem to have figured out advertising in the mobile world. Sure, there was the $1 billion acquisition of Instagram — but didn’t that seem like a last-minute decision by Facebook CEO Mark Zuckerberg to sweeten the IPO honey pot?

Worse yet, even the core of Facebook’s desktop business is open for discussion, as we saw last week when GM gave the big “Unlike” to Facebook’s advertising. Zynga and Facebook have openly sparred over who gets all those gaming revenues, while a whole host of other social networking competitors are nipping at Facebook’s heels for its 1 billion users. Presumably, a number of these users would defect if it was made enticing enough. (And, certainly, Google has been doing everything in its power to make Google+ more of a draw.)

At the end of the day, the valuation of a public company on Wall Street is as much a science as an art. While Facebook was talking about users and engagement, Wall Street was talking about dollars and cents. The key to understanding Facebook’s valuation is the good old-fashioned multiple, as Business Insider’s Henrey Blodget writes. Which is to say, if Apple is trading at 10-times projected earnings per share in 2013, and Google is trading at 12-times projected earnings per share in 2013, how is it possible, in the real world, that Facebook could be trading at an implied 65-times earnings per share? At $38 per share and a $100 billion valuation, Facebook was worth more than McDonald’s, Amazon, Disney or Visa. Say what you will about McDonald’s, they have a product you can buy called a Big Mac — Facebook has ads for a Big Mac, among other products.

Surely, the disappointing first 48 hours of Facebook’s $38 special will engender a lot of head-scratching and navel-gazing in the tech industry, especially among the tech entrepreneurs in the Billion Dollar Boy’s and Girl’s Club. At companies such as Twitter, Pinterest and Airbnb there has to be a lot of soul-searching: “Yeah, we can get to 1 billion users, but then what do we do?” Simply racking up a lot of users and trying to sell ads against all those visitors sounds like something out of the first Web boom, when people valued “stickiness” as some kind of financial metric.

Financial markets can sometimes be irrational and overly exuberant, and this looks like a clear case when bankers and others in the money set got a bit carried away with the allure of Facebook’s nearly one billion global users. The next time the likes of Morgan Stanley or Goldman Sachs call them up and offers to take them public, Internet CEOs in Silicon Valley should take a moment to reflect on the example of Facebook. Over the short-term, social networking competitors such as Google will surely indulge in a bit of schadenfreude as they see a worthy competitor take on water in a frothy market.

Disclosure: Washington Post Co. Chairman Donald E. Graham is on Facebook’s board, and The Post markets itself on Facebook.

Dominic Basulto is a digital thinker at Bond Strategy and Influence (formerly called Electric Artists) in New York. Prior to Bond Strategy and Influence, he was the editor of Fortune’s Business Innovation Insider and a founding member of Corante.com, one of the Web’s first blog media companies. He also shares his thoughts on innovation on the Big Think Endless Innovation blog and is working on a new book on innovation called “Endless Innovation, Most Beautiful and Most Wonderful.” source: washingtonpost.com – By Dominic Basulto

You know what’s not cool? Suffering more than $300 million in paper losses since Facebook’s IPO last week.

Sean Parker, who was played by Justin Timberlake in “The Social Network,” might be regretting the fact that unlike Goldman Sachs, he did not sell any of his shares in the IPO for $38 each. Facebook’s shares have now tumbled by 13% in less than three days of trading on Nasdaq.

The euphoria over Facebook’s IPO has vanished and many Facebook employees, ex-employees, and early investors might have an excruciating wait before they can sell their shares and cash out. To be sure, those shares are still worth a tremendous amount. Parker’s Facebook stock is still worth more than $2 billion, but losing $300 millon even if it’s in paper wealth can’t be easy to stomach. The Facebook IPO pop never materialized and although few will sympathize, it’s safe to say that many insiders will be disappointed.

There are 1.7 billion shares of Facebook currently sitting on the sidelines. The biggest chunk of those shares, 1.2 billion of them, will be released from their lock-up provisions in 177 days. That’s in November and is a pretty standard lock-up period for an IPO. The first slab of 271 million insider and principal shareholders stock will be available for sale in 86 days, an unusually short lock-up period.

That could make for a long summer of waiting if Facebook’s shares don’t stabilize soon. Denizens of Silicon Valley have learned the lessons of the first Internet bubble, when many employees of dot.com companies got greedy and held onto their richly-priced stock, only to often see their shares tumble in value. It seems unlikely that too many Facebook employees will repeat that gamble.

There are also serious tax issues to consider. Mark Zuckerberg sold more than $1 billion of his Facebook shares in the IPO largely to cover his expected tax bill. In order to get around rules limiting the amount of shareholders a private company can have, Facebook created restricted stock units that with the IPO are now becoming actual stock and the IRS is going to tax it as 2011 income. Facebook will sell a large amount of its employees stock this year to cover the tax bill for its employees. In addition, Facebook’s pre-IPO investors will be watching events in Washington closely to see if they should sell Facebook stock before capital gains taxes increase next year.

The selling pressure on Facebook’s stock as the year progresses will likely be intense, although it seems that stock market investors have already taken that into consideration. source: forbes.com – Nathan Vardi, Forbes Staff

It’s now official that in a new round of funding, gaming channel Machinima raised $35M from VC groups and Google itself. The flush of cash is huge for the brand, and they’ll use it to create more original content and bolster that which they already produce. Machinima.com CEO Allen DeBevoise had this to say about the news.

“With this latest round of funding, Machinima is well-positioned to make the next evolutionary step in the world of multi-channel video programming and distribution by expanding into original content, international territories, and new platforms and devices. Our tremendous growth as one of the world’s largest online video communities, with innovative social metrics and attributes and massive mobile viewership, positions us well to lead the third wave of original video programming brands.”

He posits his company on the forefront of the next revolution in televised programming, except it’s no longer on TVs, but the internet instead. He could be right, as this might be a step forward in YouTube attempting to shape itself into a digital cable-like company. A move away from traditional TV programming is not the worst thing in the world, as cable has been without competition and overpriced for eons, and YouTube is free, but with this deal comes certain questions.

With YouTube (through Google) now a direct investor in Machinima, they have more of a stake than ever to make sure its videos get views. That means Machinima videos plastered all over the homepage and recommended videos section. If this expands, and Google keeps investing in popular channels like this, we may see a “Google lineup” of channels similar to cable TV.

Why is this a bad thing? Isn’t it great we’re starting to move past traditional TV with steps like this? I suppose, but the corporatization of YouTube into promoted content from big, established brands leaves not a lot of room for the little guys. You know, the little guys who MADE YouTube in the first place with funny cat videos and failed Star Wars lightsaber fights?

Now, there will always be viral videos. The moment a kitten starts playing a Rick Astley song on the piano, that video is going to blow up no matter if its owned by a corporation or not.

But what of those intrepid YouTubers out there trying to get their own channels started, and assemble subscribers the natural way without millions in cash at their disposal? If every recommended video list is made up of these giant channels, it’s going to be a lot harder for them to be discovered.

Machinima itself has been under fire by many gamers for a while. In many ways, they’re positioned as “only game in town” when it comes to gameplay videos, as unless you serve at their pleasure, you can often risk tangling with copyright lawyers over showing game footage in your videos. Recently, there have been a few tearful goodbyes of gamer channel hosts, popular ones at that, leaving Machinima because of their policies. BrainDeadly, Hutch and Athene are a few that are bailing on the brand and taking most of their viewers with them. Here’s YouTuber HuskyStarcraft explaining the issues many of Machinima’s partners (or potential partners) have with the brand in a statement he posted after BrainDeadly’s departure:

“I have a YouTube channel with 600,000 subscribers and it is so frustrating to see things like this.

I was approached by Machinima a couple years ago with them looking to get me to join. At the time I had just finished schooling and, as a lot of people that age, wasn’t sure what to do for a living. The timing of them approaching me was perfect as they told me I could make money on my channel. Thankfully I was lucky enough to have parents who actually knew their shit and they told me not to sign such a bad contract.

Because of my experience with them I decided to start TGS (The Game Station) instead. I believe I was one of the very first ‘big’ channels to tell them no. A special note to everyone telling him to ‘read their contracts before signing’, two things:

1) The Machinima contract has changed many times and I have friends in the network who had to sign ANOTHER contract even though they already had signed one. This tricks people into not realizing just how different they are.

2) A lot of the people in their network are very young and dont fully understand what the ramifications of such a bad contract mean. I would consider myself pretty well put together and even I contemplated going that route.

Its really sad that this keeps happening (this is the fifth or so video I’ve seen on this EXACT topic) but keep fighting the good fight. A couple people who know what they’re talking about have already contacted you about what the next steps should be.”

As you can see, there are definitely issues with this corporate model, and Machinima is at least perceived at times to be taking advantage of young broadcasters who don’t know any better. Granted, there are many satisfied Machinima partners, but gamers should not think that they should cave to the (now Google backed) corporate giant to distribute their content if it’s ultimately not in their best interest.

I’m all for a digital revolution to shake up the traditional TV model, or at least give it some competition. But if Google stars investing directly in giant channels, it’s unclear if there’s still room for the little guys who have made YouTube what it is. source: forbes.com – Paul Tassi, Contributor