Monthly Archives: December 2010

December 31, 2010 · 11:00 am

Summary of 2010

Let me share with you a brief recap of my 2010.

This was a heavy learning year, to name a few learning experiences:

  • I continued to study French,
  • Toastmasters: I delivered some speeches at Toastmasters, received the CL and ALB awards, and attended 2 District 59 conferences and 1 Division H conference.
  • I went to several EOI conferences and others, including one with the economist Robert E. Lucas who was awarded the Nobel Prize in 1995 and the TEDx Madrid event.
  • I read over a dozen books, many of which I commented here (being the 3 ones I liked the most these ones: first, second and third). At the end of the year I was given an eBook so I expect this trend to continue.
  • I continued to enjoy the subscription to The Economist (frankly, one of the best decisions I’ve taken in recent years) and subscribed to Scientific American for a dime.

I also had lots of fun reading and learning things related to aerospace & defence, to investments, and enjoyed supporting some charities and especially seeing some friends starting to support them as well.

Travelling. Either we together or I visited for the first time Porto, Morocco, Tunisia, Poland and Egypt. We also spent some time in Luxembourg, Brazil, Netherlands, Sevilla and France. Travelling well over 65,000 km last year (equivalent to 1.6 rounds to the Earth). Of all the places we visited, the view that I liked the most was the falls of Iguaçu, no doubt.

Javi 2.0 Encouraged by Luca and some friends I started this blog in February 2010 and a twitter account shortly afterwards. I reckon that my twitter account has become one of my biggest hobbies and sources of information apart from a communication channel with friends. I even saw some friends (here and here) and my sister starting their own blogs!

In the sports side… even though this has been a great year for Spanish sportsmen, it hasn’t been so for Real Madrid: not for the football or basketball section (being the last year I attended with the season ticket). On the personal side I competed in two championships of Minifutbol but won neither one, the same applies to paddle tournaments… the best sports moment was completing once again the San Silvestre race.

Other reasons for joy have been:

  • our friends Amalia & Paco, María & Alberto, Janine & Rients, Leyre & German got married,
  • we saw the newborns Paula and Javier, while two of our friends are pregnant today (that we know),
  • my sister finished her bachelor and continued studying a master; my brother finished his MBA and joined my company; my mother continued to take several courses.

To close the year, I got a new position within the same company in another country, where I moved a month ago. This will allow me to continue learning and experiencing new things!

I use to tell my friends and family that since long ago I feel that I enjoy more and more each coming year and am happier with time; this year, with a few bad moments included (including some sad losses), has been no exception to the trend. Thanks to all of you who contributed to it. As I say, if it continues like this, I may explode one of these years :-).

Now it’s time to make some few resolutions for 2011 as well… I have thought of 5, that if I manage to fulfill, next year’s account will be even shinier. I wish you the same: keep learning and enjoying your time.

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December 28, 2010 · 6:02 pm

Impact of an AdWords campaign (cont.)

After my previous post was published, I had a conversation about it and received some comments. These made me think that it could be interesting to comment on the other 2 campaigns to gain more insight about how AdWords works and how useful it can or cannot be. First, let me share some data of the 3 campaigns:

  • Al Andalus club (Rota, Cadiz): had a cost of 29.68€ for 250 clicks, thus 0.12€ per click (CPC). It appeared in the screens 208,520 times. It used 72 words or combination of words, restricted to a circular area about 90km around Rota.
  • Standing Ovation club (Madrid): had a cost of 16.56€ for 59 clicks, thus 0.28€ per click (CPC). It appeared in the screens 166,291 times. It used 49 words or combination of words and was restricted to Madrid region.
  • Blog: had a cost of 51.96€ for 1,410 clicks, thus 0.04€ per click (CPC). It appeared in the screens 3,685,521 times. It used 41 words or combination of words and was not geographically restricted.

Even though I am not an expert in AdWords, from what I have experienced and as you can see above:

  • The more clicks it has the lower the price per click will be.
  • You may set a maximum amount of money you want to spend per day (I normally didn’t spend more than 1.5€ euro per day per campaign), this means that once that amount is reached your campaign is de-activated until the next day (ads won’t appear for some hours).
  • Using more words does not necessarily translate into more clicks. You need to find adequate words, related to the website, so it appears and appears high enough in the web. Also, some words are more expensive than others, though the price varies with the number of clicks.
  • The ads themselves need to be attractive, as it may appear many times but still needs to make people click on it. In that sense, the most successful one was that of Al Andalus (people clicked on it 0.12% of the times it appeared; 3 times more effective than the other 2 campaigns).
  • You need to focus the campaign in the segment you want to target. E.g., I first centered the area for Al Andalus campaign, until I found out that some clicks (consuming campaign money) came from Tanger and other Moroccan cities… I had to move the target area, as no one from Morocco would go to the club on a weekly basis.

I didn’t measure any kind of conversion rate as I am not selling anything through my blog nor could I check how many guests went to Al Andalus or Standing Ovation meetings thanks to ads (I was not attending those clubs); and that would be an extremely interesting indicator for any business.

Finally, my friend got the 75€ from a special offer from Google. In the Iberia in-flight magazine (“Ronda”), I have also seen some months ago codes for 50€ to be used in AdWords campaigns. So, be aware of possible next opportunities and give it a try (and you can always spend some little money as a learning experience – everything is very well explained inside AdWords tool).

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December 21, 2010 · 11:00 am

Impact of an AdWords campaign

Some months ago, my friend Nacho gave me as a gift 75€ to be used in AdWords campaigns. I set up 3 of them: 2 of them promoting 2 Toastmasters clubs, the third one promoting this blog.

According to the campaign report the blog received 1,410 visits from the advertisements. The campaign ended in July and cost 51.96€; thus the average cost per click (CPC) was 0.037€.

I plotted in the following graphic what the total visits per month have been (blue line) and the total visits less the ones that originated from AdWords ads (green line).

Evolution of the blog.

You can see the big impact of the campaign: so far 26% of the visits came from it (since February, when I started the blog, to the end of November the blog received 5,434 visits), while the campaign was active up to 48% of the visits came from it.

Discounting the campaign (green line) we can still see that the pattern of the growth is not as smooth as we would expect. That is why I linearly interpolated visits from March to June (and in August, where you see that due to the low activity of the blog – holidays – there were less visits than the trend) and plotted the red line (adjusted).

Finally, I tried to see what trend line adjusted better to the growth of the blog, using the adjusted red line, and even though now it seems that follows closely a second grade polynomial I guess the evolution of the blog should follow an exponential (if any).

From this analysis I conclude that:

  • The real impact of the AdWords campaign is the difference between blue and red lines, instead of blue vs. green ones. This would mean 243 extra click for free; this would have had a cost of ~9€, not much but a whole 17% extra than what I paid. Where did those extra clicks come from? E.g. people who saw the ad but didn’t click on it and did enter the blog, people who enter in the blog more times than the initial click…
  • It could be predicted that the blog should have ~850 visits in December, and in January ~1,000, a year after it started (if indeed it follows the exponential pattern of evolution)… we’ll see.

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December 20, 2010 · 11:00 am

Big Mac in Aswan

While in Aswan, Egypt, I went to a McDonald’s restaurant. When I finished my meal I went to the counter to ask “What is the price of a single Big Mac?”, “16.5 Egyptian pounds”.

I wanted to check The Economist‘s Big Mac index, their exchange-rate scorecard (see a detailed explanation), for the case of Egypt.

Already in the last list published it can be seen that they used a 13.0 pound price, while I was given 16.5 pound (probably because I went to a more touristic McD restaurant than the average). At the time of writing the post the exchange rate is: 1 E£ = 0.1726 US$.

The reference is always the price of the hamburger in USA (average of Atlanta, Chicago, New York and San Francisco), which in the latest publication of the index was 3.73$.

The dollar cost at the exchange rate of the hamburger was 2.848$; according to that, the Egyptian pound is 24% undervalued against the dollar (in relation to Aswan prices). The Economist normally calculates as well the implied purchasing power parity of the dollar: 4.42 (=16.5/3.73) while the actual exchange rate was 5.79 (=1/0.1726).

Finally, I wanted to remark 3 other things that caught my attention in the restaurant:

  • They had an employee of the month award and published it.
  • The uniform of the global company made local.
  • They provided delivery service… I wish they did that in Europe.

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December 19, 2010 · 11:00 am

New entrants in the commercial aircraft business

In a previous post, I mentioned the new entrants in the large commercial aircraft business (Bombardier CSeries, Embraer, Russian MS-21, Sukhoi SuperJet, Comac C919, Mitsubishi…). Now that the latest market forecasts both from Airbus (Global Market Forecast) and Boeing (Current Market Outlook) are available, I wanted to briefly note how they are treating the segment that most of these entrants would enter: single aisle jet aircraft.

For example, Boeing in this year’s CMO already splits the single aisle between 90-175 passengers (where new entrants would fall into) and over 175 passengers (still the safe harbor?). In previous studies Boeing didn’t offer such sub-segmentation. On the other hand, Airbus hasn’t published yet such differentiation.

It is even more interesting to compare last year’s GMF and CMO with this year’s ones.

  • Airbus saw a demand for 16,977 single aisle aircraft in 2009 while in 2010 sees a demand for 17,870.
  • Boeing saw a demand for 19,460 single aisle aircraft in 2009 while in 2010 sees a demand for 21,150.

In other words Airbus has increased the single aisle market forecast in 893 aircraft, while Boeing has increased it in 1,690 aircraft… Both have made the forecasted pie bigger before it will have to be shared.

On average, they see ~1,300 more single aisle aircraft than what they saw last year… In the case that these extra aircraft was room made for new entrants, that would leave the new entrants a market share of 6.7% of the single aisle market… not much.

However, those entrants are not yet delivering in that segment and most of their deliveries would come at the second half of the 20-year period. By 2029, it could well be possible that their combined market share is around 10%… still not a big share, but already ~7bn$ yearly business (in 2010 dollars); a ~4.4bn$ after discounts, an amount the size of Embraer revenues (the 3rd company in commercial aviation, reason enough for them to enter the segment).

Boeing even concedes that of the 21,150 single aisle aircraft, 86% of them will be between 90-175 passengers, precisely the market sub-segment that will be ferociously fought.

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December 18, 2010 · 11:00 am

Commercial aircraft market size after discounts (update)

In an older post I already made an analysis of the aircraft discounts related to the published list prices (by the way, Boeing just raised its list prices 5.2% a couple of days ago). In that case, I used the revenues and deliveries of Boeing in the previous 3 years (38% discount was the result!).

Using that information, now that the latest market forecasts both from Airbus (Global Market Forecast) and Boeing (Current Market Outlook) are available, we can say that the real market size in the next 20 years will be in the order of 2,100bn$ (average of both forecasts in 2010 dollars).

Flow of airplanes

Another very interesting feature that Airbus published in last year’s GMF (it is not yet in this year’s publication) and Boeing used for this year’s CMO is a graphic showing the dynamics of aircraft. In it you may understand how from today’s fleet, adding new deliveries, retiring old aircraft, converting some from passenger to freight transport they arrive to the forecasted fleet in 2029.

I include below both graphics.

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December 17, 2010 · 11:00 am

Airbus vs. Boeing, comparison of market forecasts

Airbus announced on Monday its latest Global Market Forecast (PDF, 4.6MB) for the 20-year period 2010-2029. Media has already highlighted the main points: ~26,000 new aircraft will be delivered with a market value of ~3,200bn$.

Some months ago, Boeing published its equivalent study, the Current Market Outlook (PDF, 8.2MB) for the same period.

It is interesting to compare the two of them. In that way we can see how each other treat competitors’ products (mainly A380) and how they try to shape the market and send messages to it (point-to-point & hub-spoke).

However, it is not easy to compare the studies as they use slightly different segmentations, disclose in different ways the value of aircraft for the segments (list prices) and is not always clear how to discount freighter aircraft from global figures. I dig for some time into those numbers and arrived to the following table:

Comparison of Airbus GMF and Boeing CMO 2010-2029.

Some comments on the comparison:

  • Boeing sees demand for 13% more aircraft with a 10% more value.
  • However, this higher demand is not applicable to all segments: Boeing sees ~60% less A380s or equivalent being delivered over the next 20 years, while 18% more single aisle (A320s) and 12% more twin aisle (A330/A350s).
  • Boeing plays down A380 potential, but sees a very similar number of RPKs (“revenue passenger kilometer”), that is, the number of paying passenger by the distance they are transported. Airbus forecasts for 2029 12.03 RPKs while Boeing forecasts 12.60 (in trillion).
  • The difference of less than 5% in RPKs means that out of the 13% difference in aircraft deliveries over 8% comes from the different business model each company is trying to push.
  • Finally, we can see that Boeing uses again higher average prices for smaller aircraft and a lower reference price for A380s.

Enjoy the two documents, differences apart, they gave a very good piece of information and insight about the market.

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December 16, 2010 · 11:00 am

Archaeologists

There is no doubt that archaeologists have done and continue to do a great and exhaustive work in Egypt… (yes, there is a “but” coming) But, while visiting several temples last week, I really got sick of seeing their signature in the middle of the statues, walls, hieroglyphics, etc…

Signatures from archaeologists ar various sites in Egypt.

Can you imagine that a conservator / restaurateur from the Louvre museum had just signed in the middle of La Gioconda while performing some work on the painting? Like: “L. Bernard, 1835” in the cheek or the forehead, where there is plenty of space.

I want to think that this was the norm in XIX and early XX century and that nowadays it is not happening, otherwise: archaeologists, please refrain from doing that!

As Luca put it: these were people who failed to understand their place in history. After all, to the general public Lecaros, Black, Hamdy Bey, Federici, Levinge, etc., are completely unknown names (luckily! imagine how many of their signatures and in what places would have been needed for them to be stars!).

Having said that… who knows, maybe around the year 5,464 someone visiting these places may find a plaque honouring these signatures, like the one that can be seen today in Saqqara outlining the first “graffiti” in history, yet another inscription from another archaeologist in the year 1,232 BC, Hadnakhte, who wrote, on the wall of an already then 1,500 years old building, the following: “on a pleasure trip west of Memphis”.

Hadnakhte's graffiti in the House of the South, Saqqara.

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December 15, 2010 · 11:00 am

The best (and the worst) of the first 100 posts

Today is a symbolic day for the blog: this is its 100th post.

I started the blog in February 2010 and about 15 posts ago I thought: “what could I write about for my 100th post?”.

A reflection: To be honest, after 100 posts I still haven’t got a clear idea of which post topics you, the readers, like more and which less. What do you think? In this post, I will just give you the list of the ten most read posts and the ten least read ones…

1. An aircraft worth its weight in gold?
2. FC Barcelona copying Real Madrid
3. A Kiva success story
4. Mi adiós a Ibercaja
5. Boeing forecast for A380
6. Most common letters in English and Spanish
7. TEDxMadrid 2010
8. Venture Capital & Crowdfunding
9. 3 wishes to Nosso Senhor do Bonfim
10. My flat-renting decision process

…

90. Giving feedback at Pixar
91. From climbing to merely walking
92. Sao Paulo from the top of Banespa building
93. How rain determines olive tree economics
94. Nothing like a good red wine…
95. Speech about Minifutbol
96. Three centuries of confusion
97. Opera with subtitles
98. Book review: Pirate Latitudes
99. Book review: La Hermandad de la Sabana Santa

Some stats from this period: over 5,700 visits (~18 per day), being the day I announced that I moved to Toulouse the most visited one.

Let’s see what I’ll write in the next 100 posts…

 

NOTE: the box in the right showing “Top Posts” shows the most read ones in the last week, not the all-time most read ones (the ones above).

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December 14, 2010 · 11:00 am

The first bloggers

I found while visiting some tombs in the Valley of the Kings and temples in Luxor that the Egyptian pharaohs were the first bloggers.

There are paintings older than the hieroglyphics from Egypt but, unless I am mistaken, we don’t know whether they just capture scenes of daily life/gods or relate to the story of a single individual (and in if that was the case, who is he?).

In the case of the pharaohs, they inscribed (or those working for them) in the walls and columns what had happened to the pharaoh in his life, apart from stories related to gods. Some months later or the next year they would come back and update it with the latest achievements (wars, victories, offers to different gods…).

Luckily, today we can just store our storyline (or whatever we may want to write about) in the internet and save ourselves the effort of gathering up to 134 columns as in the Great Hypostyle Hall in Karnak, Luxor (larger than St. Peter’s Basilica in Rome and St. Paul’s Cathedral in London together – some pictures below).

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