Make Money Online

In this session, web developer Justin Sainton set out to cover three areas: (1) WordPress 3.0, (2) Ecommerce Trends, and (3) the WP e-Commerce plugin. Justin has 3 years of experience developing with WordPress. Everything that follows this italicized paragraph is based on Justin’s presentation, and not my own ideas.

WordPress 3.0

Justin started out with an overview of WordPress 3.0, and what advantages and opportunities it offers publishers. Essentially, there are many new features and functions that can help publishers integrate ecommerce into their WordPress site.

For starters, the default username after you install it is no longer “admin”. Rather, you can select your default admin username. This gives it added security because it’s harder for hackers to guess your admin username.

Another benefit is that the default theme, 2010, is a very strong parent theme — meaning that publishers can build better “child themes” off of WordPress 3.0 right out of the box. WordPress 3.0 also offers a lot of custom post types and taxonomies that give publishers more flexibility in creating custom front-end user-experiences.

Ecommerce Trends & Improving Conversion Rates

This part of Justin’s explored ecommerce data, analysis, statistics and making money with WordPress sites.  Specifically, he focused on conversion rates, and addressed how, on average, 80 percent of traffic on most sites are new users, and new users are the hardest to convert.

One of the things that improves conversion rates is if users can easily return products. So a return policy is something that any ecommerce site should have.

Another conversion improvement method is product search. Forty percent of users coming to ecommerce sites are looking to search. So ecommerce sites should offer an easily accessible product search.

Product recommendations or cross selling are another way to improve conversions. Amazon does a great job of this — e.g. XX percent of people who bought this also bought that.

Most online consumers also like to see some kind of security logo. So such a logo should be prominent through the shopping and check-out process.

And don’t forget SEO. 20-25 percent of Google searches are new search queries. So don’t assume that the market is too competitive or too saturated. Chances are you’ll be able to attract targeted new users on a variety of long-tail search terms.

Also, a toll free number helps increase conversions. It reassures users that they can reach someone for assistance if they need it.

Finally, requiring pre-registration will deter 40 percent of user from completing the check-out process. So allow the user to fill out a shopping cart and proceed to check-out without having to set-up a profile with you.

Similarly, almost half of users will abandon the check-out process if the page takes more than 2 seconds to load. To address load times, Justin recommends using either the W3 Cache and WP Super Cache plugin.

Essentially, there are 3 keys to improving conversions, and they come down to testing:

• Analyze: Dive into your analytics, and determine where the bottlenecks are.
• Modify: Once you identify your bottlenecks, try changing stuff. For instance, if you’re losing most users at the check-out page, try adding a security logo, reducing the check-out steps, or even adding bigger product pictures (might reassure users that they’re getting what they’re paying for).
• Evaluate: Now, once you’ve made some changes, keep monitoring the funnel. Conduct A/B testing and determine what kinds of changes are driving conversions and which ones are not.

WordPress Ecommerce Plugin

Justin recommends use the WP e-Commerce Plugin. Although the plugin has had some issues in the past, version 3.8 (not yet released) is said to address many of these bugs. In the meantime, the latest branches of 3.7 are said to be very stable.

For starters, the admin and user-interface are completely new. The tax system is also more customizable so that merchants can manage different kinds of tax rates in different regions.

Version 3.8 will also offers advanced control over search, cross-sales, and social media sharing. And on the data side, it will offer analytics on conversion funnel trends, such as shopping cart and profile abandonment rates.

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Microsoft continues to wrestle with the e-commerce side of its search engine, Bing, in an effort to more effectively compete with Google’s dominance.

The company discontinued Bing Cashback as of July 30. Bing Cashback was a novel way for shoppers to save money by earning a percentage of the price paid for an online product as “cashback” – in essence, an instant rebate. The cashback was paid out of proceeds from search advertising fees from participating stores. Consumers received cashback payments through PayPal, direct deposit, or mailed checks.

George Michie, CEO & Co-Founder of The Rimm-Kaufman Group, a search engine marketing firm, tells Internet Retailer, “Cashback was a big win for merchants and users, but I don’t know how big a win it was for Bing in terms of buying market share.” According to Microsoft, while Bing Cashback attracted over a thousand merchant partners, it “did not see the broad adoption that we had hoped for.”

Bing is trying to remove the sting from killing Cashback with the launch of Bing Shopping, which appears as a navigational link on the Bing home page. Bing Shopping is following Google’s lead in offering online retailers free clicks from the Bing Shopping page. Microsoft confirmed that a product feed service for merchants was being offered without charge, so product listings and images show up in search results as essentially free placements. Eventually, Microsoft is expected to add paid advertising to the mix.

Bing Shopping is a nicely organized shopping portal, with featured products, featured stores, and “products people are talking about.” It will offer some new search marketing features; for example, “shopping slide shows” allow consumers to click through product photos and purchase a product of interest, directly through the portal. Bottom line, however: Bing Shopping is basically similar to Google Product Search, with some added functionality.

Bing Shopping will also be similar to Google Product Search in ranking products. Rick Backus, co-founder of CPC Strategy, an online data firm, tells Internet Retailer, “Bing’s data on search clicks will be part of its overall algorithm that ranks product search results, giving popular retailers an advantage.”

But the big question about Bing Shopping is whether the search engine can drive enough traffic to build the numbers merchants want, especially in terms of sales conversions. Bing Cashback presented a pretty compelling reason to shop because of attractive rebate offers. Bing Shopping has no such built-in incentive.

Bing Shopping needs to do two things quickly: get as many merchants as possible to participate, and get as many shoppers as possible to visit. Launched last summer, Bing has seen increases in traffic, but its U.S. market share is under 10 percent, while Google’s is over 71 percent. Microsoft has also been losing money in its Online Services division.

If Bing Shopping can’t make the cash registers ring for online retailers, dumping Bing Cashback may come back to haunt Microsoft.

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Will Shoppers Click with Bing Shopping?

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Google has received a lot of blame for the decline of newspapers. It looks like Google might now be poised to bail newspapers out and make them reliant on the search giant.

Google is testing a new paywall system. Called Newspass, this new system seems like it can make micropayments a viable revenue model and make Google an ecommerce behemoth.

Bad Blood

Some newspaper owners have accused Google of making a profit from scraping their content. Essentially, many newspapers feel defrauded because while they’ve received no compensation for their content appearing in Google News, Google has made revenue off of the Adwords ads that appears alongside that Google News content.

Blood is so bad between Google and some newspapers that many newspapers have ignored Google’s efforts to help them drive traffic to their restricted content. For instance, rather than using Google’s First-Click-Free service to let Google index content behind a registration wall, Rupert Murdoch’s News Corporation blocked Google from indexing its newspaper content altogether.

Google’s Paywall Solution

One model tabled to help newspapers generate online subscription income was micropayments. The model was never widely implemented, however, because of widespread doubt that a user would be willing to repeatedly charge minuscule transactions from multiple sites to their credit cards.

But Google is now working on Newspass, a paywall system that would allow users to manage subscriptions and micropayments across multiple sites/networks through one centralized account. And as Matthew Buckland wrote for Silicon Valley Watcher, Google is already piloting Newspass with Italian publishers, and it’s designed to support multiple platforms:

The search giant will apparently launch “an integrated payment system” allowing users to buy news content with just “one click”. Newspass would allow publishers to use a single infrastructure for Web, mobile and tablet computers to monetize their content.

Importantly, [...] consumers will have a single log-in across a multitude of news sites that would be flexible enough to accommodate various kinds of payments, including long-term subscriptions and one-time micropayments. It would be a one-click payment for access, not too dissimilar from Google Checkout.

The one-click access to multiple sites could potentially be a deal closer for micropayments and other paid subscriptions because it would reduce friction. Essentially, users might be more likely to pay for content if all recurring and micropayments are managed under one account that they already have through a brand that they already trust.

Just Another Brick in the Wall?

Of course, this all begs the question: is Google too late? In addition to Google having failed at many things, it might be too late to expect users to start paying for what they’ve been getting for free for so long.

For instance, there’s no guarantee that mainstream publishers will go for Newspass. They might be too uncomfortable with Google having that much access to data about both their traffic and revenue.

That being said, it’s equally likely that this kind of product and level of support could be the tipping point for news publishers to fully embrace Google’s suite of tools (such as First-Click-Free). In the meantime, we’ll just have to sit back and watch how things play out in Italy.

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Google Moves to Corral Newspapers into Newspass

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These days, recommendation engines are so common on larger online retail sites that you might not give them a second thought. Amazon and eBay have long been using personalization technology to create a shopping experience that’s highly customized.

The whole area of collaborative filtering, the behind-the-scenes technology used to drive customized recommendations, has advanced to the point that now, it has become easier than ever to implement without the huge investment in development. It doesn’t even have to degrade site performance like it did in the old days.

Susan Aldrich of the research firm Patricia Seybold Group believes recommendation engines will become commonplace next year. A survey Seybold and the Institute Telecom Paris conducted with 100 European and U.S. companies indicated that every one of the responding companies was planning to add a recommendation engine if it didn’t already have one.

Aldrich thinks one main reason for the new popularity of recommendation systems is advances in collaborative filtering. She says it uses modern web analytics instead of longs lists of business rules. The new systems are easier to update and more efficient.

Companies like Webtrends and MyBuys are on the forefront of collaborative filtering. Webtrends just announced full availability of its “Optimize Profile Enhanced Targeting” solution. It provides marketers with the ability to deliver a personalized web experience based on past behavior of visitors on their websites. Casey Carey, vice president at Webtrends, says profile-based onsite targeting “presents a great opportunity to maximize relevance, increase conversion rates, and ultimately see a significant return on [users’] marketing investments.”

MyBuys, which provides personalization for multi-channel retailers, has introduced “Kinetic Advertising.” According to CEO Bob Cell, this “is a format that enables our display ads to incorporate movement, that let users interact with them and see a dynamic set of products that fit their profile.” With a Kinetic ad unit, says Cell, you can “populate a custom set of products and offers based off a shopper’s interactions with a brand that are specifically tailored to that individual.”

Aldrich draws an intriguing analogy for the recommendation engine – she likens it to a global positioning system. “If a site visitor doesn’t take the recommended path,” she says, “it will come back and recommend another path.” A key strategy of the recommendation engine is to use a site visitor’s known shopping history to put “them on a shopping path that other shoppers with similar interests have taken before completing a purchase.”

Not surprisingly, says Aldrich, companies making use of or planning to implement recommendation engines see value in cross-selling and upselling. Obviously , if an online retailer can get a customer to make an additional purchase at the same time as he or she is buying a product, the incremental cost for the sale is negligible. Recommendations, says Aldrich, have “high impact on conversions and order size.”

Expect to see more recommendation engines popping up on even smaller online retailers’ sites as plug-and-play collaborative filtering technology becomes more widely available.

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The New Must Have Accessory for Online Retailers? Recommendation Engines

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Recently Amazon announced that it has sold more copies of e-books for its Kindle e-book reader compared to hardcover books. While cynics might dismiss the announcement as a counter to Apple’s attempts to position its iPad tablet computer as the de facto reading device; the announcement does signal a shift in consumer habits and perhaps a tipping point in how we read.

With recent moves such as slashing the Kindle’s price from $259 to $189 it’s clear that Amazon believes such a tipping point has happened and is banking on digital editions of books to drive its growth.

Everyone’s happy right?

Maybe not. Cost is a big factor. The $189 cost of the hardware is a fixed investment and a barrier to entry given that walking down to your local used bookstore and picking up a book is going to set you back around $10. Plus, there is always the library. If I were to buy the Kindle or iPad, I’d expect to buy enough books to at least equal the cost of the reader, to make the device purchase worthwhile.

In its press release, Amazon’s claim that “Amazon sold more than 3x as many Kindle books in the first half of 2010 as in the first half of 2009“ is not a useful statistic given that its base number of sales in the first half of 2009 isn’t given. Look a little closer at Amazon’s announcement and you’ll see that e-books have outsold hardcover books. There’s no mention of paperback books. As The New York Times points out: “Amazon does not specify how paperback sales compare with e-book sales, but paperback sales are thought to still outnumber e-books.”

Going by my personal buying habits, I’d say that I’m typical of the average book reader, about 10 percent of my books are hardcover editions and the other 90 percent are paperbacks. If that’s a similar stat for Amazon’s sales figures, Kindle sales would have to grow another 800 percent to be anywhere near knocking physical books off their pedestal.

A Reading Paradigm shift?

One thing I’ve noticed is that major shifts in technology seem to sneak up on you – the changes are gradual and are usually only noticeable in retrospect after you’ve already converted to it. Whether it’s the shift from DVDs to blu-ray discs, buying music from iTunes instead of a CD or streaming videos over your Internet connection from Netflix, instead of renting Blockbuster, these changes can be sneaky.

In the broad scheme of things e-books might eventually win out over their physical counterparts and if they’re able to solve some of these challenges:

●     E-book readers will have to drop below the $100 price point, preferably $50 or below.

●     Mass availability of book titles: It’s not enough to have only 630,000 titles in the Kindle store. I want to have the choice to buy the digital equivalent of any physical book or magazine, even if I might only buy 100 such titles.

●     With fiascoes like the fallout around 1984, Amazon and others still have to resolve the question of ownership in Digital Rights Management (DRM).

●     How will e-books deal with such issues as censorship, whether through hacking or through the manufacturer?

●     Battery life: charging your Kindle every 2 weeks might be nice for some. The killer app might be battery life of 6 months or once a year.

This wishlist might take Amazon or Apple sometime to fulfill and it’s unlikely I’ll buy an e-book reader until this happens although I might end up eating my words at some point. Until that point is reached, the Kindle e-books still need to make up some of that 800 percent gap with their paperback counterparts before there is a true paradigm shift.

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Despite Amazon Fanfare Kindle Not the Final Chapter on Paperbacks

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RockYou and Facebook announced a deal where RockYou will exclusively use Facebook credits and where Facebook will keep 30 percent of the revenue from the credits. In the same press release, the two firms discussed a “Deal of the Day” project where RockYou issued 6 million Facebook credits to users who interacted with ads.

What just happened? Did RockYou just admit defeat? Did RockYou single-handedly inflate the credits market? Did RockYou publicly admit to radically changing their business model?

RockYou’s agreement to exclusively use Facebook credits at the standard 30 percent cut to Facebook says several things:

1. RockYou didn’t have enough power to negotiate better terms than the 30 percent cut for Facebook
2. RockYou seems to be betting the farm on Facebook, as they’ve just foregone revenue from potential non-Facebook users
3. RockYou is admitting that its star may not be shinning as brightly as in the past and may not shine as bright in the future in their applications business

RockYou is far larger than the other two exclusive users of Facebook credits, Crowdstar and LOLapps, and a bet of this type usually only happens when you’re options are dwindling. Add to the mix the new focus on “branding and promotional” opportunities in the RockYou press release boilerplate, and you see that things are changing for RockYou.  No wonder. Just consider what it means that they serve 15 billion impressions a month or 500 million impressions a day to a social networks with combined populations of over 600 million registered users (sum the user base as listed on Wikipedia for each social network shown on the RockYou home page). That’s less than 1 impression per user per day.

And what about inflation? RockYou and Facebook flooded the market with 5 million Facebook credits in four days. but more recently, every game player I know (half of my Facebook friends) received 20 or 15 free Facebook credits sometime over the last two weeks. So in a not-unlikely scenario, it would seem that Facebook issued 250 million x 15 credits, or 3.75 billion credits. So, yes RockYou did contribute to inflation, but there’s a bigger inflationary pressure.

3.75 billion Facebook credits = $375 million value at the stated “15 credits, a $1.50 USD value”, or $0.10 per credit. If Facebook actually paid developers for these credits when used, that would be the equivalent of 70 percent of $375 M, or $262.5M net to developers. Whether that cash is actually paid out or not, that represents $260+ million of equivalent cash value on the market that didn’t exist before.  Why does this matter? Suddenly the cash equivalent of Zynga’s 2009 revenues (per Jeremy Liew) were dumped on the market. In commonly accepted money supply theory “There is strong empirical evidence of a direct relation between long-term price inflation and money-supply growth, at least for rapid increases in the amount of money in the economy”. This inflationary pressure can drive down real monetary value, making it more difficult for application developers tied to Facebook credits to grow revenues.

The Facebook application economics are changing, and vendors who are exclusively tied to Facebook credits are at the risk of both short and long term fluctuations on the value of Facebook credits and at the mercy of any Facebook credits promotions run during the period of exclusivity. While it may seem that Facebook has enough power to hold its developer partners over a barrel, you have to give them credit for successfully executing a strategy to lock in partners and extract money from their partners’ businesses.

As for RockYou, it may look grim, but look at the fine print of the press release. I’m hopeful that they haven’t really admitted defeat as they state that they will use Facebook credits as “the exclusive virtual currency in RockYou’s social games and applications”. While it does lock them into Facebook credits for virtual currency for their social games and applications anywhere they are distributed, it doesn’t sound like they are actually precluded from using real currencies such as PayPal and credit cards.

So is the RockYou deal the harbinger of bad deals to come, leading developers to lower income and inflation while Facebook reaps the benefits? It could be, and it’s definitely limiting, but the real test will come as more developers start to accept Facebook credits and take a long hard look at the agreements and the limitations on their distribution and revenues that come with such deals.

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RockYou At The Mercy Of Facebook Credits For The Next 5 Years

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There is nothing like a short URL to help increase retention in branding. Today Overstock banked on that announcing the purchase of O.CO and associated domains for $350,000.

The move helps Overstock in two ways. It allows them to highlight further the O in their name which they have built a lot of branding around. From a pragmatic standpoint, in a time where the adoption of shortened URLS for web and mobile is ever increasing, dropping to a smaller URL has definite benefit. Expect to see a lot of O.CO on Twitter.

According to Patrick Byrne, Chairman and CEO of Overstock,

“The O is such an important and recognizable part of our brand. In the new era of the Internet, where short and memorable web addresses are critical for capturing the attention of mobile and socially connected Internet users, our O.CO web address will help to reinforce our brand and expand our business among these audiences.”

Overstock’s brand already enjoys strong recognition among consumers but this might be step to spin off part of their brand as more upscale. Especially since O.CO plays very well from an aesthetic design standpoint.

One has to wonder whether Oprah feels she missed out.

Originally posted here:
Breaking News: Overstock Purchases Single Letter Domain O.CO for $350,000

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Although the average conversion rate for a website is around 3 percent, many websites convert at 10 percent or higher. This session at SES Toronto covered what you may not be doing to reach that conversion level. The speaker was Bryan Eisenberg (founder of Grok.com and author of several books), and he provided, examples from retail sites, B2B sites, publishers and everything in between.

Bryan started out by reminding us that conversion rate is a measure of your ability to persuade visitors to take the action you want them to take. Then he asked an interesting question: If technology and tools have improved so much since the late 90s, how come conversion rates only climbed from 1.8 percent to 3 percent?

1. Communicate Your UVPs & UCPs
You have to give people a reason to buy from you. Make sure that your unique value propositions and unique campaign propositions are clear and prominent on every page of your website.

2. Make Persuasive & Relevant Offers
Make sure that customers have a reason to convert. For example, Overstock.com offers free shipping for first time customers.

3. Reinforce The Offer Site Wide
Remind your users over and over again. Whatever your offer, have it all the way to your Thank You page.

4. Maintain Scent
This is about maintaining your branding, UVP, and UCP throughout your sales funnel. Landing page optimization is not enough. You have to look at the customer’s entire journey & experience. For instance, if you’re running PPC ads, make sure that the landing page and every subsequent page in the funnel is in-line with your ad copy.

5. Make a Strong First Impression
Whether it’s a good brand story or offer, find a way to distinguish yourself.

6. Appeal to Multiple Personas/Segments
None of us have just one kind of customer. But we often overlook all of our potential customers. Different customers will interact with your content differently. So build acquisition models for each potential persona you’re targeting.

7. Don’t Do Slice & Dice Optimization
When you do A/B testing, use your concepts of personas to get better results quicker. Spontaneous users seek top sellers. Humanistic users care about reviews. Methodical users shop by category/genre. Competitive users search by other product meta info, such as make, model, brand. etc.

8. Leverage Social Commerce: Use the Voice of Customers
Let your target market create the content for your products. Amazon does this better than anyone with their users reviews, and they have 25 percent of ecommerce transactions in the US.

9. Use Reviews for Navigation
Incorporate your most viewed and most reviewed products into your navigation by figuring them prominently on your site.

10. Use Reviews for Promotions
Use customer reviews in your other marketing material — email, PPC, etc…

11. Use Review for Credibility
Reviews from independent, third party customers add a lot of credibility to your brand and products.

12. User Reviews for Feedback & Research
What you used to pay a marketing research firm tons of money for is now available for free. And there are 69 free/low-cost tools to help you make sense of the user’s experience.

13. Use Persuasion Principles Like Scarcity
Usability helps people what they need to do, but not why they need to do it! You need to create urgency to persuade the user to convert — i.e. “Only 7 left in stock – Shop Now.”

14. Make Forms Engaging
Keep the clean, short, and simple — to be both visually engaging and easy to complete. There is no need to make people users register before they check out.

15. Provide Point of Action Assurances
Leads lose their effectiveness by “6x” within the first hour. So reassure customers of when they’ll hear back from you. Also, remind them that the check-out process is secure.

16. Keep Them in the Process
As users choose items, give them the option to either keep shopping or check out.

17. Consider Email Preview
Email is an effective way to retain users. Leverage it to follow up with leads and recent customers.

18. Budget for Experience
You can’t just invest in acquisition. You also have to invest in what happens once users get to the website. So work conversion optimization into your marketing budget. And work continuously to improve your customer experience.

19. Utilize a System for Prioritization
Prioritize elements of the sales process/funnel based on how the customer interacts with the site. For example, if users click on a certain feature a lot, optimize that feature first.

20. Make Data Driven Decision
As hard as it can be to go against your own (or CEO’s) personal preferences and ego, you (or your boss) don’t necessarily represent your target market. So use the data you have to optimize the funnel. Make a To-Do list of all the problematic parts of your sales process, think up ideas on how to improve them, and then implement A/B testing to figure out what elements of any given step are impacting conversions.

21. Know How to Execute Rapidly
Develop processes for rapidly adapting content and deploying new products. Map out the implementation process and template it so that when a marketing opportunity arises, you can quickly capitalize on it.

Bonus Secret – 22. Use your Thank You Page to Sell
Since you’re not trying to register users before they by (see #14), encourage them to create an account on the thank you page. Customers will be more likely to complete the process once they’ve got what they want (i.e. made their purchase), and getting the to create an account will help you increase users retention rates.

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Mistakes happen, but the snafu that 6pm.com, a sister company of Zappos.com, made in the early hours between midnight and 6 a.m. on May 21^st may just reach legendary status. Due to an internal error, 6pm.com accidentally marked down nearly all of its stock to $49.95. Items that typically would have sold for $1,857.85 were sold at over 97% off! This wasn’t part of any marketing strategy and the error will cost the company an estimated $1.6 million in revenue.

The costly mistake occurred when an employee accidentally triggered an incorrect action using new internal price management software. Apparently a few symbols were missed in the coding of a new rule which resulted in the over-writing of nearly all products to the new, erroneous price. It was several hours later before the the 6pm.com team noticed the mistake and took down the website to fix the problem.  Coincidentally, this same pricing engine also powers the pricing algorithm for Zappos.com.

Aaron Magness, Director of Brand Marketing & Business Development, mentioned this on 6pm.com’s blog.

“This was a great deal for customers, it was inadvertent, and we took a big loss selling so many items so far under cost.  However, it was our mistake.  We will be honoring all purchases that took place on 6pm.com during our mess up.”

As far as I know, the employee who made this blunder was not fired and Tony Hsieh, CEO of Zappos.com, called it a “learning experience” and a costly $1.6 million lesson for the company.

In light of the current economic condition and the lean times, I am surprised that the 6pm.com and Zappos.com team decided to honor the pricing error and take such a major hit.  Zappos.com, which was sold to Amazon in July 2009 for $928 million, could have easily refuse or canceled all of the orders placed during that time based on the Terms of Use description found on their website.

“In the event a product is listed at an incorrect price or with incorrect information due to typographical error or error in pricing or product information received from our suppliers, we shall have the right to refuse or cancel any orders placed for product listed at the incorrect price.”

However, from a customer service standpoint, honoring the mistake is an excellent move. The “sale” created a lot of positive buzz and served as great a PR piece for the company in regards to honoring  their customers, sticking to their word, and owning up to their mistakes. Obviously, it was the customers profiting from such amazing deals on so many items who came out ahead, but affiliates of 6pm.com undoubtedly benefited from the surge in sales, as did other business partners and price comparison portals.

But the questions remains if the goodwill generated from this positive buzz will translate into repeat customers. Either way, at $1.6 million this was an expensive lesson.

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Will Costly Mistake Translate Into Future Customer Loyalty?

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Integrate email and social media?  Nonsense.  Email is social media.  And once you realize this — and focus on traditional direct response tactics — you’ll be glad you didn’t pay the consultants for their social media blather.  You’ll be too busy counting sales.

Last week I discussed the concept of using ‘ethical bribes’ to acquire new customers via social media — all while suggesting that all digital media is social.  And that includes email.  Integration of the two is actually just folly because the two are in fact one.  I’m back with the case study on Dormeo, a home goods brand focused on sleep products and mattresses.

We left off with Rok Hrastnik being tired.  The International Web Director for Direct TV Goliath, Studio Moderna was exhausted — done watching his home goods-focused Web sales just puttering along.  His boss tasked him with generating incremental sales — not just leeching sales generated by all the TV ads the company was running.  To top it off, he was suffering through poor readership and sales from his email newsletters.  So Hrastnik got bold and decided to take a risk.

He became a full-fledged, content-focused email publisher to the masses.

Some in his office called him crazy — courting people who he knew would not be customers in near-term.  But his bet paid off.  Sure enough, his readers began to buy his mattresses, bedding and sleep-related home goods when he mixed direct calls-to-action into his content marketing fold.

The system revealed: email publishing

Hrastnik realized that he had two choices when building an email list that would generate sales.  It’s the same choice you probably have.  Either buy a targeted list of leads or an un-qualified list of prospects (people who have no interest in your product line).

Lists of qualified buyers cost more.  Unqualified cost much less.   So Hrastnik decided to buy unqualified leads based on the following hunch.

He could successfully use content to:

1. Establish meaningful relationships with men and women who, eventually, would buy.
2. Grow relationships exponentially by giving readers incentives to recruit others.
3. Offer unqualified customers an honest, durable value exchange (quality content that they actually wanted for their eventual purchase consideration).
4. Net sales — be there with a compelling call to action when time was right.
5. Prove a profit,  spend less on producing and distributing content than he’s netting in gross sales. In other words, preserve margin and hold the line on “cost per order” (CPO).

And that’s precisely what Hrastnik did.

First, Hrastnik acquired email addresses and mailed them a legitimate overseas vacation sweepstakes offer.  This built his opt-in list.  As part of this promotion subscribers agreed to receive newsletters.  Information on what they really, truly want and can use to improve their lives — immediately.

Segmented by gender, these included very topical content focused on successful courtship, beauty tips, weight loss tips, celebrity gossip that resonated with women. Men received well-written, boldly designed newsletters on grooming tips, gadget articles, automotive and sports content – the kind of stuff that men typically consume, and not only consume but appreciate and share.  And just to spur things on a bit Hrastnik kicked it up a notch.  He allowed the subscribers / sweeps participants to increase the chance of winning by making referrals.  If you referred friends your chances of winning a prize increased.

Here’s the rub:  most contest-applicants stayed on.  They liked the newsletters and agreed to receive occasional promotional messages from Hrastnik’s company.   Of course, they demonstrated a clear level of tolerance — unsubscribing like mad when receiving calls-to-action/promos more frequently than three times per month.

Oh, and sales increased…

Sales increased.  You remember sales right?  Sales that were directly attributed to this campaign began to roll in within a few months time.  A few days?  No.  A few weeks?  No.  But Hrastnik was patient.  He made serious investments in hiring writers, graphic designers, etc. to create his e-mail and Web publishing empire.  He made a wager.

Important to repeat:  the closest his content came to talking about bedding and mattresses (Hrastnik’s product) was with articles on dream interpretation… which were a big hit by the way.

What’s the secret sauce?  It’s direct response.  Database marketing.  But in a challenging, multichannel environment. For Hrastnik it was sink or swim.  And he did a few laps.

You already have the answers…

Like Hrastnik, you probably already have the answers.  No, not what you read on blogs from social media gurus.  I’m referring to what has always, traditionally worked for your company.  Was the story that I just presented cool?  Sure.  But was it from another planet?  Was Hrastnik’s idea completely foreign?  No, it was a sweepstakes used as bait to create a list that he mailed to.

Hmm… maybe that’s why he knew it would work.  Because it always has in the past.  It’s called direct response marketing and just needs to be applied on the Web.

I find it really interesting that a “long-form content” focused company (a direct TV seller) is essentially transferring its best practice to the Web.  But in a different way.  Long form, selling-based video — their specialty — doesn’t translate to the Web in practical ways.  Attention spans are too short.  Hrastnik played to that characteristic by creating short, valuable bits of relevant, useful content.  Then super-charged it with sweeps and calls to action.

Hrastnik and his crew are mastering the Web like no other direct TV company I’ve found here States-side.

Never give up

Worth noting, Hrastnik innovated.  He was faced with a daunting task and didn’t give up.  He dove into uncharted waters.  He took a risk.  But he, of course, held full accountability for his actions… and his risk was a calculated one.  He was a true intra-preneur.

This is just one example that I’ve been researching and I hope to bring others to ReveNews’  readers soon.  And email is not the only means to execute content marketing strategies.  But it sure is an accessible, familiar, cost-effective device to start with.  Good luck!

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Case Study: Email Is Social Media

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Last week I opened the discussion on how to integrate social media with traditional marketing by not integrating it at all — yet still get more out of marketing strategies as a whole.  I’m back with a case study to prove that all media is social media — and how realizing this frees our minds and bodies to fire on all pistons.  To act.  To improve our Web marketing output.  To reliably produce more results and fatten our paychecks.

The story I’ll tell involves a marketer becoming a full-fledged, content-focused email publisher to the masses — people this marketer knew would not be customers in the near future.  The bet was they would eventually buy.  All that was needed was to keep them engaged long enough to earn consideration.  And prospects did convert when the guy who hatched the idea mixed direct calls-to-action into his “content marketing” fold.

So, through this short story, let’s learn how to:

• Acquire new customers with “ethical bribes”
• Use content and a publishing model to net sales you’d otherwise not get – and make a profit
• Grow your e-mail prospect list organically
• Generate incremental Web sales
• Take what you already know works and apply it to make social media pay dividends

Acquiring new customers with “ethical bribes”

Marketing ploys, gimmicks, value propositions.  Whatever you call them.  They’ve worked for decades and still work today.  But we often forget this when working in the world of digital marketing.  And that’s a mistake.

I study, lecture and write a lot about using the concepts of relevancy and utility to capture customers’ need states and deliver value that boosts profit.  (lately using examples of mobile and social media in banking)  And I keep re-discovering the fact — in my experience and what I’m learning from others.  Classic “old school” marketing techniques work very well in new, emerging (“social”) marketing realms.

The reasons people buy more, more often and from the same brand aren’t new.  What is new?  Discovering ways to nurture latent demand and capture it using the Internet.  Using the opportunity to interact — not just listen and continue spewing out crafty messages.  To interact in an organized way.  That’s the challenge.

If this sounds familiar it should.  By gosh, I’m writing these words at ReveNews, where affiliate marketing has been part of the game for over a decade.  And if anyone can appreciate leveraging old tricks in new realms it’s affiliates.

So how about acquiring brand spanking new customers with email?

As promised, I’ll now discuss a fascinating case study from Eastern Europe.  This good example of what I’ll prove to be “social media marketing” demonstrates how one large multi-channel marketer is creating Web buyers out of thin air.  And that’s not hyperbole.

This retailer is nurturing leads over many months’ time and cost-effectively netting sales from buyers they’d otherwise never have had a chance at acquiring.  Incremental sales.  They’re using what I’ll call “ethical bribes” to get the job done.

What’s the candy?   Content.

Marketers are publishers… but…

Break-away success demands that we publish.  But please be clear:  the Web marketing community is filled with advice on using content to create profits.  From sleazy, short-term focused “article marketing” to search engine optimization (SEO).  And lately many experts are encouraging a “content marketing” to create buzz, engagement, conversation or consideration.  No-no.  This isn’t what I’m talking about today.

Publishing is a familiar concept but not to most marketers.  True publishing is quite different.  Yet trailblazers are investing real dollars in publishing models and marrying them with direct response concepts.  And that’s what, historically, works on the Web.  It’s a true blending of “old meets new” with an interactive twist.

The most successful businesses are realizing that consumers use everything from “Web 1.0″ tools like email to instant messaging and everything in between — “socially.”  And everything digital – not just shiny new “social media” — is social.  Social media leadership largely requires appreciation of, and acting on, traditional direct response concepts.  Not “branding” but direct response.

Double your fun

This story isn’t just about growing sales through profitable use of email (a social marketing tool).  It’s also about how to grow sales organically.

My case study from across the pond involves an old-fashioned direct TV marketer publishing — sharing valuable stories, tips and tricks.  But publishing in ways that give prospective customers, themselves, reason to recruit new readers (prospects) into the system.  “Viral.”

Indeed, providing customers and prospects with an incentive to market for the company itself… to grow their prospect list organically. The ethical bribes I refer to.  Ready?

Hardcore soft selling

Here’s a guy who’s hardcore when it comes to soft selling. Meet Rok Hrastnik, International Web Director for Direct TV (“home shopping” — we call them “infomercials” in the US) Goliath, Studio Moderna.  Think of them as the Guthie Renker of Eastern Europe.

One day Rok got tired of watching his home goods-focused Web sales just puttering along or, for some brands, dwindling. Competitors were intercepting his customers (as they were on way to making a purchase) by using search ads. Pretty commonplace.

Hrastnik’s boss also tasked him with generating incremental sales, not just leeching sales generated by all the TV ads the company runs throughout Europe.  That wasn’t allowed.  Can you imagine?  “Go sell mattresses on the web from scratch.”  Ugh!  Those are challenging marching orders.

After suffering through poor readership and sales from his email “newsletters” (email messages talking endlessly about his product) Hrastnik decided to take a risk.  But a calculated one.

His response was nothing short of becoming a full-fledged, content-focused email publisher to the masses — people who he knew would not be customers in near-term.  And Hrastnik’s bet paid off.  Sure enough, his readers began to buy his mattresses, bedding and sleep-related home goods when he mixed direct calls-to-action into his content marketing fold.

How did he do it — exactly?  Stay tuned for all of his secrets revealed.  The guy is gutsy.

Put integration on the back-burner

Until I return, consider this:  a “long-form content” focused company (a direct TV seller) has some serious best practices already developed.  They do informercials and that’s a mature business.  They know how to sell and sell lots.  But the challenge isn’t so much to integrate the Web-side with the traditional business.

Remember, for Hrastnik (and likely your business) success is defined in incremental sales.  You know, being able to eat tomorrow!  Right?

And information doesn’t just create sales.  Look at infomercials: tons of information, but what makes them work?  Simple calls to action — something that “social media” gurus claim is a no-no.  Sorry, gurus but you’re busted.

Perhaps like your business, Hrastnik’s company lives mostly in world where marketing is already going on.  His world is a TV-based world where selling takes 30 minutes.   Think about that for a minute.  Talk about opportunities for customers to tune out!  So transferring to the Web isn’t like eating cake.  You can’t just throw up informercial videos on the Web or scatter them across YouTube and call it a day.  Incremental sales takes work — more work than just providing information.

Here’s my point: Hrastnik’s business (in fact, all “infomercial” businesses) has mastered the TV-delivered, content-focused sale.  And while they’ve been quick to throw up Web sites and point TV shoppers at them what about creating incremental sales using the Web — using tools already available?  That’s the real opportunity.  Right?  That’s the challenge.  And that’s where Hrastnik hit it out of the park.

Stay tuned!

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The eyes of Google haven’t ignored the rise of the iPad or the noise being made by Amazon’s Kindle device. Instead, the search company is looking ahead to how it can get into the digital book game.

Under a plan that came to light this week, Google will allow users to buy books through its book search system and partner with publishers to sell on the site with a revenue sharing system. Google Editions is expected to launch in June or July.

Two factors which can potentially make this a game-changer in the e-book world (one in which Amazon once thought it was a safe leader) are the percentages of revenue that Google decides to share with publishers and the “device” it decides to display the books on.

Many observers see Google’s reader being another cloud-based application, which would take the grip away from the hardware-based solutions offered by Amazon and Apple.

“This levels the retail playing field,” Evan Schnittman, vice president of global business development for Oxford University Press, told the Wall Street Journal. “And as a publisher, what I like is that I won’t have to think about audiences based on devices. This is an electronic product that consumers can get anywhere as long as they have a Google account.”

Interestingly enough, Fast Company’s analysis of the situation concludes that the hardware is a must and that’s why Amazon can stay ahead.

The percentages of revenue sharing is where the real racket could start with Amazon and Apple. Who gives the best deal to publishers is most likely to secure the best rights for the best books from publishers looking at their bottom line. Under Google’s payment scheme, publishers will receive about 63 percent of the gross sales, and Google will keep the remaining 37 percent. Google’s billion-dollar ability to negotiate good terms is what sets it apart. eWeek.com sees that as one reason why Google is already the winner before the fight has even started:

“Google intends to share the majority of its profit with partners to help it roll out its service in as many places as possible. It’s another smart move. Although publishers are making strong profits on their deals with Apple and Amazon.com, they’ll naturally migrate to the ebook platform that will deliver the best return.”

This move by Google also begs the question whether they will utilize the Google Affiliate Network to further their advantage over Amazon.

The bottom line is going to put Google’s ubiquity, the continued adoption of its online applications and its buying and negotiating power against Apple’s iBookstore/iTunes model and hardware cache. Amazon has its inventory, but is saddled with a device that doesn’t have the robust abilities of either Apple’s alternatives and Google’s grip on the web.

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Google Takes Aim at Amazon with Editions

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The reports of first quarter of 2010 advertising activity are coming in and the news is surprisingly good. European-owned Publicis Groupe, the world’s third largest communications group and second largest media agency, just reported quarterly revenue that “exceed even our most optimistic forecasts,” says Chief Executive Maurice Levy. The group showed growth of over 8 percent, including a more than 3 percent increase in first quarter organic revenue.

The strongest area of marketing for the company? Digital, of course, which grew more than 15 percent in Q1. Digital marketing is now 27 percent of Publicis’ total revenue. Razorfish, a Publicis digital marketing agency, saw growth of 8.6 percent. Levy stated,

“This is why we chose to commit to digital at a very early stage, and strongly, in anticipation of the necessary transformations our business would undergo given the in-depth changes to society.”

Translation: The online world is leading the advertising charge, so why fight it?

In support of the numbers from Publicis, its media unit, ZenithOptimedia, just issued a report indicating that, for the first time, the Internet beat out magazines in advertising spending in 2009. Online ad spending was a record $6.3 billion in the fourth quarter of last year. Online advertising for 2009 was $22.6 billion vs. $19.5 billion for magazines. Separately, ZenithOptimedia has forecast global advertising growth in 2010 of over 2 percent

While this doesn’t suggest a complete recovery for the advertising business just yet, it is indicative of a significant up-tick, and it bodes well for the rest of this year. Major global communications agencies like Publicis are often harbingers of the industry. Havas and Omnicom, two other major agency groups, also reported organic revenue growth for Q1 recently.

Growth at these major agencies is important for another reason: it shows big clients are spending again. These clients set the tone not only for ad spending, but also by demonstrating where the majority of ad dollars are being spent. If the strategy of big advertisers is to invest more dollars in digital marketing, other marketers are sure to follow.

Clearly, digital is the most robust area of marketing spending today. As a remarkable example, Ad Age magazine recently reported that the major consumer products company, Reckitt Benckiser, will buy $40 million worth of web video in 2010, which is expected to be the largest single buy ever. This is twice the amount of Reckitt’s 2009 commitment. The 2010 expenditure will include global video marketing. The company markets such brands as Clearasil, Lysol, and Woolite.

If a recovery is on the way, you can be sure of one thing: digital will lead the way.

Continued here:
Publicis Growth Indicator Advertising Recovery Being Fueled by Digital

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The reports of first quarter of 2010 advertising activity are coming in and the news is surprisingly good. European-owned Publicis Groupe, the world’s third largest communications group and second largest media agency, just reported quarterly revenue that “exceed even our most optimistic forecasts,” says Chief Executive Maurice Levy. The group showed growth of over 8 percent, including a more than 3 percent increase in first quarter organic revenue.

The strongest area of marketing for the company? Digital, of course, which grew more than 15 percent in Q1. Digital marketing is now 27 percent of Publicis’ total revenue. Razorfish, a Publicis digital marketing agency, saw growth of 8.6 percent. Levy stated,

“This is why we chose to commit to digital at a very early stage, and strongly, in anticipation of the necessary transformations our business would undergo given the in-depth changes to society.”

Translation: The online world is leading the advertising charge, so why fight it?

In support of the numbers from Publicis, its media unit, ZenithOptimedia, just issued a report indicating that, for the first time, the Internet beat out magazines in advertising spending in 2009. Online ad spending was a record $6.3 billion in the fourth quarter of last year. Online advertising for 2009 was $22.6 billion vs. $19.5 billion for magazines. Separately, ZenithOptimedia has forecast global advertising growth in 2010 of over 2 percent

While this doesn’t suggest a complete recovery for the advertising business just yet, it is indicative of a significant up-tick, and it bodes well for the rest of this year. Major global communications agencies like Publicis are often harbingers of the industry. Havas and Omnicom, two other major agency groups, also reported organic revenue growth for Q1 recently.

Growth at these major agencies is important for another reason: it shows big clients are spending again. These clients set the tone not only for ad spending, but also by demonstrating where the majority of ad dollars are being spent. If the strategy of big advertisers is to invest more dollars in digital marketing, other marketers are sure to follow.

Clearly, digital is the most robust area of marketing spending today. As a remarkable example, Ad Age magazine recently reported that the major consumer products company, Reckitt Benckiser, will buy $40 million worth of web video in 2010, which is expected to be the largest single buy ever. This is twice the amount of Reckitt’s 2009 commitment. The 2010 expenditure will include global video marketing. The company markets such brands as Clearasil, Lysol, and Woolite.

If a recovery is on the way, you can be sure of one thing: digital will lead the way.

Originally posted here:
Publicis Growth Indicates Advertising Recovery Being Fueled by Digital

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In his post about Foursquare last October, David Lewis said Foursquare had “some serious weaknesses,” but he admitted, “It’s worth keeping an eye on it.”

Well suddenly, Foursquare seems to be breaking out of its status as a cutesy, fun mobile-enabled game. It has just been discovered by the likes of Bravo TV, HBO, the History Channel, Warner Brothers, and Zagat, according to Advertising Age. The magazine says “These new deals represent an entertainment trifecta for Foursquare – network TV, cable TV and movie studios.”

It’s true that when big advertisers discover a new media channel, it tends to legitimize the channel for other advertisers. My last post about Pepsi snubbing Super Bowl ads in favor of Facebook speaks to that. So is this the beginning of Foursquare’s coming out party?

Obviously, Foursquare co-founder Dennis Crowley would like to think so. He sees entertainment brands as having significant potential for the company because of changes in viewer behavior. He believes consumers now watch shows on television “with computers on their laps or phones in their hands – multitasking while they watch, communicating about the content, or just killing time during commercials.”

This kind of behavior plays nicely to Foursquare’s shtick: users and friends checking in with each other from specific locations, making lists of favorites and sharing them, winning points for checking in, and winning badges for participating in new experiences. It all may sound a little juvenile, but think of it as a GPS-enabled Twitter combined with enticing rewards. Obviously, some very big advertisers are testing Foursquare to see if it will work for them. Exactly how these advertisers will use Foursquare, or benefit from it, is part of the test.

There are already some advertisers who are proving that Foursquare can pay off. Zagat, a guidebook that rates restaurants, is probably one of the better examples because what Zagat does fits so well with the concept of Foursquare. According to Advertising Age, “[Zagat] has populated five cities with tips that share their expertise – things like drink deals, the best times to dine, and what entrees to order. By checking in at Zagat-rated locations, users can unlock a new ‘foodie badge’ and those that frequent a place most often might be featured on Zagat.com…”

Zagat has an iPhone application that allows users to access content about and ratings of restaurants. It also offers the ability to make OpenTable reservations for those restaurants that accept them directly from the app. But Zagat’s Ryan Charles told Advertising Age that iPhone and other smartphone applications are just the beginning. Foursquare is “a natural progression. There is an obvious synergy between Zagat’s expertise in helping people make quick, informed decisions and Foursquare’s location-based platform.”

Will this latest buzz get Foursquare over the hurdle of being an intriguing if inconsequential technology? And will the current interest from big advertisers help transform Foursquare into a major player capable of displacing Twitter? It’s too soon to tell – but one way or the other, chances are Foursquare will become a player that online marketers will be have to take seriously.

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Foursquare, Seriously

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