aggregating eyeballs
TRANSCRIPT
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What We’re Going To Cover
1) Introductions
2) What do you want us to cover?
3) Planned agenda
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Our Goals1) Flexible Strategic Framework
To give you a framework for thinking through long-term strategiesregardless of rapid changes in technologies or marketplace demands
2) Actionable Tactics
Light on theory (except when necessary for strategic thinking), heavy on practical best-practices, what/how-to-do, case-studies
3) Brain Dump
Packing our combined experience in online strategy and marketinginto one day
4) Mini-Case Studies
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Planned Agenda1) What Is Web 2.0?
2) The Challenge of Aggregating EyeBalls
3) Overall Strategy - Content, Community, Commerce
4) Attracting EyeBalls - how to capture their attention
5) Engaging EyeBalls - how to retain their interest
6) Monetizing EyeBalls - converting clicks into cash
7) Serialpreneurship - strategies for business success
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Suggested Books, Solutions, Resources
www.BooksThatMeanBusiness.com
www.WhatWeRecommend.com
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(1) What is Web 2.0?
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Web 2.0 DefinedWeb 1.0
- Corporate brochure sites
- One-to-many messaging
- Limited Interactivity (fill in a form)
- Limited sharing (email a friend)
- Limited customization
Web 2.0
- DIY publishing – blogging, podcasting
- Social networking - social-castingTwitter, Facebook
- User-Generated Content (UGC) Amazon, YouTube
- Sites with community functionality (CCC Strategy)
- Customizable media consumption -personalized music playlists, iGoogle, Netvibes
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Web 2.0 Technologies EnableNew Ways To
1) leverage your content to increase awareness
2) increase engagement to maintain attention
All Designed Toward One End
3) maximize monetization
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Web 2.0 Catch-Phrases
• Social Media
• User-Generated
• Interactivity
• Shareability
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Social Media• Customizable, portable, shareable - what makes it
“social” is the constant-connection to the Web and thus to community of “friends”
• Psychology - people want to be seen as cool – on the cutting-edge – they want to be the one that found it –they rush to share it with friends – “forward this article”
• Creating the buzz - as a marketer, your job is to make the “message” compelling and using the “media” to make it easily shareable
• Remember that social media is only one arrow in your quiver – it’s just a tactic, not a strategy
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Social Media Time Bomb
Opportunity: social media can explode your business- Positive viral exposure, very quickly
OR
Risk: social media can explode in your face- Lose control of your brand with one viral comment
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Risks and Benefits of All Social Media Tactics
Risk (cost): Investing time, energy, money
Opportunity: Expanded reach to potential target audiences
Risk: Opening yourself up to or inviting criticism
Opportunity: Being there to defend yourself/your brand (crisis management) – and being able to take control of public perception of your brand (positioning)
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You Have No ChoiceYour brand is at risk – it either:
• will never get off the ground because it will be drowned out in all the clutter of others who embrace social media
• will be damaged if you lose control of your message to the masses of consumers – or even competitors
• Example: negative Amazon comment from competitor
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Social Media Straight-Talk
• Be realistic about costs and resources necessary
• Social media is not free – time, energy, money, skills, experience
• Myth of Instant Viral Success – few and far between – flash in the pan - might take you two years to be an overnight success
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Strategy Overview• Overview of the online landscape
• How to drive quality, targeted eyeballs at the lowest possible course
• Keeping eyeballs glued to your site
• Squeezing as much revenue out of those eyeballs as you can
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(2) The Challenge of Aggregating EyeBalls
• Increased User Control – when, where, how they consume – time-shifting, ad-nixing
• Media fragmentation – highly concentrated media buys (Super Bowl ads, TV networks) to micro-buys (keywords)
• User-Generated Content – DIY publishing dilutes the power of branded content
• Shift Online – unlike traditional media which captures for at least a limited time – online your competition in the marketplace of attention is only one click away
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Increased User Control
• Technology is enabling users to consume their media whenever (time-shifting) and wherever (multi-platform) they want
• User-Generated Content (UGC) – they not only want to consume but create content
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Breadth of Consumer Control• Choice of content they want to consume
• Which ads they want to consume (ex. search on Google)
• Place and time that content is delivered
• Influence the development of brands through user-generated commentary – consumer flexing their muscles, while marketers lose control
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Fragmentation of Media Consumption
1960s
Newspapers
Magazines
Broadcast TV
Radio
Eight Track Tapes
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More Media Choices1980s
Plus…Cassette Tapes
WalkmanCable TV
Personal ComputerConsole Video Games
PC Video Games
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Media Channel Explosion2000s
Where have all the eyeballs gone…
Email MP3 players Text messagingCD player Tivo/DVR Instant messagingSatellite TV Slingbox Download moviesSatellite radio iPod PodcastsInternet Blogs Social networksCell phone Online Video Mobile gamesDVD player Mobile Internet Digital signage
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More Choice, Less TV
Piper Jaffray, 2007
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Multi-tasking More, Less Focused Attention
Piper Jaffray, 2007
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Time-Shifting, Ad-Nixing
Piper Jaffray, 2007
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Consumers Shift Online
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Ad Dollars Follow Consumer Eyeballs
Global Online Advertising Spending To Grow from $32 billion in 2006 to $80 billion in 2011 according to Piper Jaffray.
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The Attention Economy: At Home
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The Attention Economy: At Work
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Demographics Online: Age
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Demographics Online: Income
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Summary of Trends• Search advertising will increase in importance as
consumers control their selection of “content”
• Consumers will design their own content and programming – the user, not content, is king
• Users will select products/services more based on reviews, ratings – which will impact advertising – move to social media
• Video will be ubiquitous
• Multi-tasking and multi-channel will be the norm
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(3) Web 2.0 Strategy
1) Content – attract visitors – with relevant, current, compelling content (includes sticky functionality, FB apps)
2) Community – engage visitors – retain interest –get them as involved as possible in an active community
3) Commerce – monetize visitors - advertising revenue, subscription fees, e-commerce purchases, lead generation
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Seeding Your Community
CONTENT
COMMUNITY
COMMERCE
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The Rise of CCC Sites• CCC Sites – blend content, community and commerce to
create compelling user experience – a majority of sites will use this strategy to some degree
• Users can communicate with one another through social media functionality
• Decide for themselves which content they’d prefer to consume
• Create their own content – ratings, reviews, recommendations, other commentary, video/photo uploads
• Participate in commerce related to the context of the community in which they are participating
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CCC ObjectiveIf you are going to spend the resources toget visitors to your site:
• Create a good customer experience
• Keep them engaged, which will…
• Increase monetization opportunities
• Get them to come back for more
• Tell others
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CCC Site Strategy
1) Corral the fish - aggregate pools of “consumers”
2) Keep the fish swimming – open up to third-party apps – OPF –other people’s functionality – makes Facebook sticky
3) Stir them up – toss in some “content bait” – and allow them to participate – comment, rate, create - video channel strategy
4) Get them to attract other fish – grow the network virally to increase ad inventory – increase monetization opportunities
5) Allow advertisers to fish in your pool- tag and organize into groups that can be sliced and diced and marketed to by advertisers- demographic, psychographic (interests), and actual behavioral (ex. Facebook advertising)
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Content Creation and Consumption
• Media consumption and creation is now in the hands of the consumer
• Web and other technologies (wireless devices) enable users to pick and choose and surround themselves with the content they want
• Enable “experience personalization” to retain eyeballs (widgetized homepages –Netvibes, iGoogle); desktop widgets; and eardrums (audio playlists)
• Replace other forms of content consumption– traditional media such as television, magazines, radio – even other types of Web sites (Web 1.0) that don’t provide interactivity and personalization
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Controversial Bait• News content – text stories/photos/videos - facts, not commentary – used
to seed discussions on social sites and generate user commentary
• Entertainment content – news and gossip
• Political content – naturally controversial and good starting point for lively debate
• Social media enables us to discover, explore and get at the truth (ratings, recommendations, related articles)
• Collaboration between traditional media (facts) and bloggers (opinions) –need both to flesh out the “truth” – fill in the gaps
• The Wisdom of Crowds – no longer trust one source (especially if it’s the advertiser) – there is strength (credibility) in numbers - The Subway Example
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Storytelling 3.0• Technology has enabled us to be collaborative storytellers
• Concept of Storytelling 3.0
– Storytelling 1 – Oral Tradition - cavemen around a fire boasting about the hunt
– Storytelling 2 – Printing Press – Guttenberg’s technology – enabled mass distribution of ideas – TV, Radio, and Web 1.0
– Storytelling 3 – Web 2.0 Interactivity – making comments, recommending products, sharing playlists
• Storytelling 1 and 2 – usually one-to-many
• Storytelling 3 – is many to many – but needs a starting point
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Who Tells Stories?Everyone tells stories.
• News outlet plays the role of story-starter by publishing a text article, photo or video
• A citizen journalist / blogger adds to the story with their observations
• Any site visitor can comment on the story
• Brand advertisers pitch their story
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You’re In The Storytelling Business
• Think broadly about what a “story” is – it’s any piece of information
• As a Web site publisher, you want to be seen as the go-to place to read a certain type of “story” – either that you write yourself or that you aggregate
• The Brochure Sites of Web 1.0 are no longer effective
• People expect free information that they can comment on and then they’ll buy from you or keep coming back if the site experience is good
• You want as many visitors as possible to come to your site to: – keep up with the evolving story– add their commentary to evolve the story
• The more the story is viewed and commented on – the more opportunities to monetize with ads or sell the visitor a product/service
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Technology Facilitates Storytelling
• Now anyone can be a publisher (a storyteller) – so competition for eyeballs is fierce - blogging, podcasting, video, print-on-demand
• The ratio of publishers-to-readers has increased dramatically due to Do-It-Yourself (DIY) publishing technologies
• Bloggers, visitors to social media sites, anyone in the digital conversation – can keep a story going in an iterative, viral process
• Commentary – reviews, ratings – affects the brand story (product) or the publisher story (the outlet that disseminates the story)
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Test Your Content Bait• What site content makes people come and stay at your site?
• Which blog entries get the most links?
• You never know what will work – you must meet the changing needs of your prospective visitors
• Must make initial assumptions, but then future decisions informed by actual results
• Results eliminate argument – is our content a commodity? I’ll tell you what it’s worth – what the market values it as – by telling you how many people read it – advertising is the proxy
• Constantly learning organization, feedback loops
• Must test on an ongoing basis due to the volatile nature of the online space
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Content Aggregation• Niche sites – or niche channels within sites – trying to
become the “go-to” place
• Fighting against the fragmentation of media discussed earlier
• Do away with the need for a visitor to go anywhere else
• Or at least to start with your site as a jumping off point– hyper-local papers – blogs as aggregators of related links
• Concept of Content Curation – overseeing the aggregation of content
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Content Syndication• Most people aren’t going to remember or take
the time to type in your URL
• They will discover you – perhaps from your content embedded in a widget that links back to your site
• RSS technology enables syndication of your “headlines” which then link back to your site
• Use bait to snag the fish and pull them into your pool
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How Content Syndication Works
• Syndicators aggregate content by licensing it from content providers (AP, Getty Images, newspapers, magazines, broadcasters)
• Paid/reseller or ad-revenue share models
• Web publishers can then obtain feeds or clips of stories, images, video related to topics on your site
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Content Syndicators• www.Daylife.com
• www.Mochila.com
• www.kit-digital.com (aka www.Roo.com)
• www.ClipSyndicate.com
• www.JamboTV.com
• www.Voxant.com
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The Psychological Drives Behind Social Networks
• Sense of belonging – to a tribe – safety – it’s a basic need on Maslow’s Hierarchy of Needs
• Need for self-expression (to tell their story) –people create profiles to express who they are –you must give them the ability to create content through commentary
• Need to be seen as important – give them the ability to influence others – recommend, chat, rate – give people power – give them voice –“I have a say”
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Technology Enables Communities
• Even sites that aren’t primarily social networks are looking to add community features to get their audiences engaged and retain eyeballs
• One vision of the future of newspapers - hyper-local newspapers online – local search engine and social network
• Examples of enabling technologies: KickApps, Ning, Ripple6
• Can pick and choose functionality like user registration, invitations, message posting, and reviews, as well as third-party applications
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Commerce: Avoiding the Web 1.0 Debacle
• The harsh reality of the Internet Bubble of 2000 was that attracting eyeballs isn’t enough
• What is the business model? Commerce.
• Community facilitates trust - helps you avoid the “hard sell” – users recommend and refer products to each other – word-of-mouth is more credible since the source is not an advertiser
• Amazon recommendations – an early form of social media
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Commerce Broadly Defined:Online Business Models
1) Advertising model (Google, portals, newspapers)
2) Subscription model (Wall Street Journal Online, application service providers – Salesforce.com)
3) E-Commerce model – buying and selling stuff
4) Affiliate model – selling other people’s stuff
5) Lead Generation model – selling leads
You Must Diversify Beyond the Ad Model!
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(4) Attracting EyeBalls• Marketing is all about aggregating (quality) eyeBalls
– prospects that have a high chance of “buying” (purchasing, subscribing, staying to read)
• Focus marketing resources (time, energy, money) effectively to find prospects among the masses
• Entice prospects to raise their hands – self-select –preferably give you permission - so you can engage with them – offering a compelling bribe
• Bottom line: Get Attention and Getting Them to Take An Action
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Common Pitfall• Too many clients spend too much time building a pretty Flash
site and not enough on marketing (hopefully, with DIY solutions and templates, this will change)
• Visitors focus on text – design mostly just needs to be clean (FB) - there are lots of professional-looking free templates out there
• Before I worked with them, many of my clients have spent millions and months on design and development and then expect visitors tocome without spending on marketing
• Resource allocation rule of thumb - spend 5% of your resources on site build and 95% on marketing
• Of course, you want A-level site, and A-level marketing, but many succeed by having B-level site and A-level marketing (and then you evolve the site to A-level)
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Marketing Strategy and Tactics
• Marketing Strategy versus Marketing Tactics
• Strategy – planning who to target and how to position
• Tactics – marketing activities that cost you time, energy, money
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Position Yourself Through Content• Your content positions you as an expert or go-to place to
solve prospects’ problems
• Whether you are a newspaper or an entrepreneur, you want to be a trusted source of information/advice that is relevant to your target audience
• In a world that has lost confidence in government, news media (perceived bias), financial markets – you and your site must be seen as trusted advisors
• Everyone has to carve out a niche of expertise
• Ex. YouTube is the place to go for funny UGC – but also expanding into premium content – want to be the go-to place for all video
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Nintendo Wii: An Example in Positioning
• Gaming console: original perception – just another gaming console – for entertainment
• Educational platform: added AP content on an interactive globe of the world
• Fitness solution: Wii Fit – “combining fun and fitness”
• Think of their target. Parents who buy the console and want to entertain, educate and get their kids fit.
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Nintendo’s Educational Positioning: AP Content
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Positioning: Reputation Management (1)
• Monitor your online reputation - Google Alerts – reputation management – find out what people are saying about you – or other topics of interest
• Give your brand a human face – Facebook, Zappos on Twitter
• Directly contact negative bloggers – by phone if you can – and try to resolve diplomatically –though they typically won’t take down old posts
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Reputation Management (2)• Maximize positive references about your brand -
flood Google with positive press about yourself by blogging about yourself – promoting your bio – flush out the haters and the competitions’ comments
• Sub-domain strategy – for SEO, Google (earth.google.com), HowStuffWorks, CraigsList – own more eye-space on Google results – ex. blog.yoursite.com
• Start more sites about your own business and more links back and forth
• Set up a Wikipedia business page and AboutUs.org –heavily linked
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Reputation Management (3)• Dominate by sending press releases with
targeted keywords– www.prweb.com– www.emediawire.com– www.prnewswire.com– www.businesswire.com/
• Set up profiles on social networks – FB, MySpace, LinkedIn, Yahoo, ITToolBox.com
• Squidoo – expert via articles
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Planning and Executing• Think through your strategy
– Target audience – who is your ideal customer?– Positioning – what do you want them to think about you?
• Know your target audience and their digital behavior (EMarketer, Nielsen)
– Are they really using Twitter?
• Prioritize tactics to test based on digital behavior and most wanted response
• Test constantly like a direct marketer
– Media outlets, platforms, ad creative, offers, landing pages
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Migrating EyeBalls
• Follow the migrating eyeballs (and eardrums)
• You have to know where they are if you want to snag them
• Overview of platforms/technologies where you might find relevant eyeballs
• Start by knowing your media choices
• Tactical suggestions in next sections on Attracting, Engaging, and Monetizing
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Where Have All the EyeBalls GoneGoal: To make you aware of all of the outreach
options that you might want to test
• Blogs• Email• Widgets• Podcasting• Video• Social Networks
•Mobile (iPod apps)• Twitter• Wi – Fi• E-Book Readers (Kindle)•Time/Place-Shifting Technologies (DVRs/SlingBox)
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Attracting EyeBalls With Content• We discuss blogging and podcasting in this section on
Attracting EyeBalls
• But the two media forms (text, audio) can just as easily be categorized under Engaging EyeBalls as well
• By creating (or even curating) any content and putting it out there, you are making a positioning statement about yourself as an expert
• We will discuss online video in the next section on Engaging EyeBalls as it has proven to be an extremely engaging media (lean-in versus lean-back – the addictiveness of YouTube)
• Realize that content is the core of any strategy – and is critical to attract, engage and monetize
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Blogging • Blog – short for Web log – an online “journal”
frequently updated
• You attract eyeballs by “putting yourself out there” by blogging – positioning yourself as an expert in something
• About anything – celebrity gossip (Gawker), political commentary (Huffington Post), technology news (TechCrunch)
• Constantly posted entries displayed on website in reverse-chronological order
• Big debate in media about how many eyeballs are being sucked into the blogosphere
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A Rose By Any Other Name• In Romeo and Juliet, the feuding Montague and Capulets, Juliet
asks: “What’s in a name? that which we call a rose by any other name would smell as sweet…”
• In the 17th Century French playwright, Molière’s The Bourgeois Gentleman, Monsieur Jourdain discovers that he has “been speaking prose all my life, and didn’t even know it!”- prose as opposed to poetry with rhyme and meter
• “Most Web surfers don’t even realize they are reading blogs. The distinction between blogs and mainstream media is blurring rapidly.”
– David L. Sifry, founder and chairman, Technorati (blog search engine), April 2007
• Is The Huffington Post a blog?
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Bloggers Grabbing EyeBalls
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Increasing Number of Bloggers
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Key Blogging Statistics
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Where Blogs Fit In To Overall Internet Activity
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Blogging Terminology (1)• Blogosphere – the online community of
bloggers
• Blogswarm – when a news item captures the blogosphere’s collective attention and dominates the online conversation generated by thousands of bloggers for a time, which might jump it into mainstream media– your goal is to generate such buzz in a niche
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Blogging Terminology (2)• Blogroll – a list of blogs usually placed in the sidebar of a blog, acting as a
list of recommended blogs – become the go-to place that aggregates content links– Obviate the need to go anywhere else but to you
• Permalink – the unique URL of a single blog post – instead of linking to the main page of the blog
• TrackBack – a system allowing bloggers to see who has written an entry on one of their original posts – the system sends a ping between blogs, which provides the alert
– A reader of the original blog can read a comment about the current blog entry which was written on someone else’s blog
– The blogger commenting on the original blog entry shows to his readers a link back to the original blog entry
– The goal for you as a marketer is to keep the conversation going
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Blog Back-ends and Front-ends • Blogging platforms: Google’s Blogger.com; WordPress, TypePad,
Moveable Type
• Content Management System (CMS) – the back-end - application to create, edit, manage, publish digital media – text, image, audio, video files
• Theme templates – the front-end - pre-fabricated looks-and-feels to present site content. CSS-based code which controls the visual elements of a site/blog
• CSS – cascading style sheets – a coding language (HTML, XML) used to add style (fonts, colors, spacing, layout) to web pages– separates document content from document presentation –enabling modifications to easily “cascade” throughout the entire site for theme consistency
Note: You may want to use blogware to create static websites instead of blogs
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Starbuck’s Blog• Built website - MyStarbucksIdea.com
• Submit suggestions to be voted on by others
• Most popular suggestions are highlighted and reviewed
• Blog component – “Ideas In Action” Blog– updates to users on status of changes suggested – ex. introducing new breakfast sandwiches
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IBM’s Blogs• Whereas Sun Microsystem’s CEO, Jonathan
Schwartz, blogs as an individual, IBM has a network of employee blogs
• Write about their experiences, what they’re working on, any other topic
• Highlight the people behind the products
• Conveys IBM’s dedication to transparency and enthusiasm
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Write it once, and publish it in multiple places and in multiple media forms
• Blogs
• Podcasts (MP3 audio files and hard-copy CDs – Gleeck’s “thunkfactor”)
• Videos
• RSS distribution of all of the above files
• E-Book: Synthesize blog content into an e-book/special report and offer it to capture email addresses
• Print Books – Print-On-Demand (POD)
• Seminars (ex. financial advisors)
Leverage Your Content
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Why Create Multiple Media Forms
• Not only to increase distribution through syndication
• Also to maximize media consumption potential
• Don’t focus only on:– how YOU like to consume content; or – how you think your audience wants to consume it
• Make your content available in all formats to meet all potential consumers’ media consumption preferences
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Variable Media Consumption Preferences
Missed opportunities if you don’t meet the needs of all media consumer types:
• Readers – books, e-books, blogs
• Listeners – podcasts, CDs – enables multi-tasking
• Watchers – video
• Experiencers – seminars
• Interacters – AP Interactives – digital storytelling
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Podcasting
• Audio digital-media files distributed over the Internet via downloads
• Create content for those who want to take it on-the-go and listen on iPods
• Podcasts are simply another type of file that can be distributed via RSS
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Creating Podcasts (Software)• Record your podcasts over Skype
– software that allows users to make telephone calls / video chat over the Internet free to other Skype users
– calls to landlines / mobile phones made for fee
• Hosting and record calls by pairing Skype with Pamela (www.Pamela.biz) – with multiple people in multiple locations – 3-4 people max to avoid poor recording – speaking
over one another
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Creating Podcasts (Hardware)
• Lavalier microphone with clip (if lecturing)
• Plantronics headset (if interviewing)
• Digital Recorder – Marantz Professional PMD620– can record on SanDisk flash card (if lecturing)– or via Pamela (if on computer)
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Where To Buy Audio Equipment
• www.BHPhotoVideo.com (33rd and 9th NYC )
• www.Plantronics.com
• www.Marantz.com
• Amazon.com
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Distributing Podcasts
• Make them available on your site, and
• Submit them to Apple’s iTunes
• get widest distribution possible
• Give them away free or sell them
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Content Is King, But Traffic Is The Emperor Online
• Online Existentialism – if no one knows you’re there, you don’t exist
• Distribution
– potential to grab eyeballs
– consumer product goods companies buy limited shelf-space (attention) in retail outlets
– on the web – the shelf is endless
• Traffic
– a bad thing when sitting in a car
– the only thing when your site is sitting in the middle of the Web desert
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RSS Defined• Blogging “gets you out there” – RSS “gets you out there” even more
• Real Simple Syndication – a family of Web feed formats used to publish frequently updated content – blog entries, news headlines, podcasts
• Syndication – write it once, make it available to be published in multiple places
• RSS technology enables an individual or site to pull in and read or display content
• Subscriber – an individual who adds a blog feed to a feed reader like Bloglines or in iGoogle - obviously you want to maximize subscribers –more eyeballs
Add New York Times RSS Feeds
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The Two Sides of the RSS Coin
• RSS feed – the file containing the content –it may only contain the title of the post or the headline, plus the first few lines of the text (or the entire post) plus a link to the full piece of content (post or article)
• RSS Aggregator (aka RSS reader) – the technology - software or online service allowing someone to read an RSS feed
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What is Twitter?• Website and service that enables short text messages
from cellphones to be sent to groups of friends, target audiences
• Originally personal – to broadcast current activities and thoughts
• Mobile blogging
• Individual text messages called “tweets” – short message service (SMS)
• Messages can be sent via instant messaging, Twitter website, MySpace page, third-party Twitter apps
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Twitter Basics • Set up a username
• When you send an SMS text message to Twitter, your message will be broadcast to whomever is choosing to follow you
• Message shows up on their cell phone
• Answer “What are you doing right now?”
• Increase face-to-face networking possibilities – “I’m XYZ bar.”
• 140 characters or less
• Follow username or Leave username
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Twitter Census (1)
• Know the digital behavior of your target
• The Pew Internet and American Life Project, February 2009 – report titled “Twitter and Status Updating”
• Only 11% of online American adults are tweeting
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Twitter Census (2)• Average age of status updaters:
– Twitter, 31– MySpace, 27– Facebook, 26– LinkedIn, 40+
• More ethnically diverse
• More likely to live in a city
• Twitter is an extension of other social networking– 23% of social network users tweet– Only 4% of non-social networks do the same– So maybe you’re capturing your target audience by focusing on
social networks? Better return on your resources?
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Zappos CEO Twitters• The Amazon of Shoes – expanding to clothes, bags and other
accessories
• Tony Hsieh first use Twitter to randomly give away a free pair of shoes
• Positioned as customer service - customer-centric if the CEO twitters instead of yachting
• Promotes customer-centric values - transparency
• Serves as evangelism activity
• Incredible word-of-mouth
• 155,000 followers
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ZapposUsing Twitter for Marketing
• 400 employees on Twitter
• Company offers Twitter classes
• No employee guidelines just use good judgment
• Shows customers that they are real people
• Show positive, personal corporate culture
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Twitter Tips from Tim Ferriss• Maniac about measuring – scientific approach
to business – uses a dozen tools to track metrics on his blog
• “I like data and enhancing performance through following the numbers.”
• Best times to tweet for maximum impact – 4:30–6 pm ET
• Most-clicked headlines – ask open questions or use the words: how to, best, most, worst, great
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Dell’s Use of Twitter• Effective way of communicating with consumers
• Claim to have tracked $1 million in sales over year and a half period attributable to Twitter
• Followers of Dell’s tweets receive messages when discounted products are available
• Can click over to purchase or forward info to friends
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Attracting Eyeballs:Driving Quality, Low-Cost Traffic
• Before you can engage eyeballs, you have to get them to your site
• How do you make them aware that you exist?
• How do you get them to “sample” what you have to offer? (Back on your site, or out in a widget)
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Tactics To Attract EyeBalls• SEM (buying keywords)
• Media buying (banners)
• Affiliate Marketing
• SEO (text/video tagging)
• Link-Building (Google weighting)
• Social Bookmarks
• Social Network Marketing
• RSS (getting subscribers)
• Video Submission
• Article Submission
• Commenting
• Viral Widgets
• Mobile Apps (WAP)
• Mobile Advertising
• Location-Aware Technology
Note: Of course, some of these tactics can be used to attract AND engage The distinction we make is between getting them to your site, and engaging them once there.
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Good vs. Bad Traffic• Common pitfall: not monitoring the quality of the
traffic you are buying or otherwise driving to your site
• Ex. Banner on Site X might send more traffic than Banner on Site Y, but even assuming same cost-per-visitor, might not generate same revenue-per-visitor
• Measure return on investment – but with SEM, keep in mind that incremental traffic might cost more and more
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In the Past, Display Ads Dominated
• Before the bubble, banner dominated – display advertising
• Display ads – graphical ads that present ad message in form of box-shaped banner
• Display generally thought of as brand advertising vehicles – but also direct since hyperlinks
• Migration from CPM to CPC to CPA
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Display Advertising• Banners, skyscrapers, interstitials,
buttons, rich media
• Formats have changed from fairly static to flashy, moving ads
• Think of display as both an advertiser (buying space) and a publisher (selling space)
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Banners• Banner is usually in the form of a box that contains graphics, text, and
sometimes animation
• Placed at the top or the bottom of a Web page
• Basic banner ads take the form of static image that links a user to an advertiser’s Web site
• Recently, banner ads take the form of rich media with dynamic audio and visual components
• The Internet Advertising Bureau (IAB) provides industry acceptedspecifications for size and pixel dimensions
• Pixels - the basic unit of the composition of an image on a television screen, computer monitor, or similar display. A VGA (video graphics array) screen in high-resolution mode consists of 640 X 480 or 307,200 pixels.
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Banner Sizes
IMU = Interactive Marketing Unit
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Skyscrapers• A skyscraper ad is a vertically placed graphical
banner that runs on the right or left side of a Web page
• Skyscraper ads are typically more effective than banner ads and have become one of the most popular display formats
• Google tip: left skyscrapers generally have higher CTR – users are used to clicking on left navigation bars – see where Facebook advertisements are
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Skyscraper Sizes
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ButtonsA button ad is a small graphical ad that is usually placed toward the middle of a page on either side of the featured content
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Interstitials: Pop-Ups, Pop-Unders
• Interstitial ads (commonly known as pop-ups or pop-unders) are graphical ads that display in a new browser window or an ad that loads between two content pages
• A form of interruption marketing (as opposed to permission marketing) and the invasive nature of these ads has made them unpopular among some consumers
• Interstitial ads have a much higher response rate – thus commanding higher ad rates - than traditional banner ads
• However, the role of interstitials as an advertising medium has diminished over time as a result of the widespread adoption of pop-up blockers in browsers
• Despite high response rates, surveys have revealed that they can generate very negative reactions on the part of visitors – poor user experiencethat can negatively affect brand
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Annoying But Sometimes Effective Pops
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Rich Media Ads –The Moving Banner
• Rich media ads leverage technologies such as Flash and Java to deliver ads, which include dynamic motion and features, such as video, audio, and animation
• Some rich media advertisements are very much like television advertisements, with full video and audio, while other rich media ads include user interaction such as interactive games
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Benefits of Rich Media Ads• Better able to engage the user through use of sound,
animation, and interactivity
• Can create a more lasting brand impression
• Increased engagement leads to noticeably higher click-through rates than static display advertising - providing advertisers higher ROI
• Most research points to static display banners having click-through rates below 1%, while rich media ads have click-through rates of 2%-6%
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Pricing Display Ads• Web site owners (publishers) sell space
on their sites on a CPM basis
• CPM stands for cost per thousand impressions (M is Roman numeral for 1000)
• Impression occurs each time a given advertisement is served and seen by a user
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Simple Example of a CPM Advertising Deal
• The total price paid in a CPM deal is calculated by multiplying the CPM rate by the number of CPM units
• For example, one million impressions at $10 CPM equals a $10,000total price
• 1,000,000 / 1,000 = 1,000 units
• 1,000 units X $10 CPM = $10,000 total price
• The amount paid per impression is calculated by dividing the CPMby 1000. For example, a $10 CPM equals $.01 per impression
• $10 CPM / 1000 impressions = $.01 per impression
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The Evolution of CPM to CPA• Before the Internet bubble burst, dominant form
was display ads
• Display ads have evolved due to advances in rich media
• However, more drastic has been the shift in pricing models
• CPM (cost per thousand impressions) to CPA (cost per action – or cost per acquisition)
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The CPA Model• Under the CPM model, a user does not have to click
through the display ad in order for the advertiser to be charged
• It is enough that the advertisement was served and the user had a chance to see the ad on the web page for the advertiser to be charged per impression
• More prominent now, pay-for-performance advertising, whereby payment by the advertiser is only triggered by a mutually agreed upon activity
• CPA = Cost Per Action
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Paying for Different ActionsAction can be anything from:
• a click-through to a site (CPC – cost per click)
• a registration (CPR – cost per registration)
• or an actual sale, also known as cost-per-acquisition (CPA) of a customer
Keeping it simple, think of the following dichotomy:
• the CPM model applies to branding efforts (i.e., building awareness of your brand)
• all of the other models (CPC, CPR), which are cost-per-action (CPA) models, relate to direct response advertising (i.e., driving traffic to the site).
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What Are You Buying
• We are in the attention economy, fighting over eyeballs and actions, so the more “engaged” the action we are buying, typically the more costly it is
• A click typically will cost an advertiser less than a registration, which in turn will cost less than a sale
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Interplay of Web Advertisers and Web Publishers
• Keep in mind that if you are monetizing via the advertising model, you may be playing the role of both an advertiser and a publisher in the online ad market
• Online advertisers buy media (ad inventory – space) on publishers’ sites to get exposure and drive people to their sites
• Online publishers sell media (ad inventory – space) - monetize the traffic to their sites via advertising that they sell on their site to advertisers
• The expectation is that web publishers will be able to buy traffic low and sell it high to advertisers – or otherwise monetize that traffic through sales
• Arbitrage – buying and selling to profit from price discrepancies
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Search Engine Marketing• Online marketing tactic – to increase a site’s
visibility in search engines such as Google, Yahoo!, MSN, Ask
• SEM can be divided into search engine optimization (SEO) and pay-per-click (PPC) advertising (aka “paid placement”)
• On a SERP (search engine results page), left side – “organic” results – and right side – “paid” results (aka
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Example of Text Links on Search Page
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Text Ads: Google’s Bread and Butter
• Text ad is typically a few words with a hyperlink that are contextually relevant to the content on a page
• Text ads can appear on search pages or content pages
• Can be driven contextually or behaviorally
• For example, if a user is on a page with a story about hiking, he may see a text ad for a sporting goods company
• Text ads are typically sold through intermediaries (aka ad networks), dominated by Google through its AdWords program as well as the ad networks such as Yahoo, MSN, Seevast, MIVA
• Text ads can be priced on a variety of pricing models, includingCPM, CPC, or CPA
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The Success of Search
• Why is it so effective?
• It matches products/services with the specific needs of a user at the exact time when they are looking for the information
• It’s the Yellow Pages, but trackable, measurable, actionable (interactive).
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How Do You Do PPC?• Sign up for Google, Yahoo, MSN – again, test all
• Generate a keyword list – the SEs help you with this
• Set bids – what you are willing to pay for clicks
• Monitor performance by checking CTR, ROI – per keyword
• Modify bids or eliminate words based on performance and the objective of your campaign
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Contextual Ads• Only about 5% of all pages served online are search
engine results page.
• Other 95% are content pages – news stories, blogentries, space around a video player (companion ads), etc.
• What ad to serve? SE does a page scan, determines context from the words it “sees” on the page, and then serves contextually relevant ads
• Ex. If page about baseball, then serve ads from sports-related companies – memorabilia dealers, ticket sellers
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Text Links on Yahoo!
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Behavioral Ads
• Ads based on user behavior
• Ex. If visitor to site visited a certain number of auto-related sites in certain time period before, then might be served car ad
• Behavioral ad networks – AOL’s Tacoda(shuttered), AudienceScience
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Behavioral Targeting Technology
• Behavioral networks sign up publishers (web sites) to participate in their networks
• They tracks users as they click around on sites in their network
• Tracking conducted on anonymous basis –know where you’ve been but not any personal information about you
• Big Brother is watching - He just doesn’t know your name
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Search Engine Optimization• A site’s left-hand placement in SERP is result of SEO efforts
• Begins with design of site and is ongoing
• Objective – to make it easy for SEs to find and index all pages of your site
• Vast majority of sites online are not SEO’d and thus “invisible” – SEseither can’t find them at all or not SEO’d so that they have a shot at first-page placement
• The Importance of Link-Building: Google algorithm gives heavy weight to number and quantity of in-bound links as a proxy of relevance/quality– Article submissions– Blog link-backs
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How Do You Optimize?• Choosing the right words – just as in PPC – must find
words/phrases that people search for
• Placing the words correctly – the right keyword density –not too much so that it seems like “spamming” to the SEs
• Keywords must be placed in metatags – the sections of the code that describe the content - text, images, video -on a page
• Common misconception – SEO traffic is “free” – not so, Webmasters must spend significant time/effort to build/maintain an optimized site
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Media Buying: In-House or Outsource?
• Although often outsourced to ad agencies / SEM firms by large firms, still need resources internally to oversee
• Example: iMarketing / Wall Street Journal Online
• Must keep agency aware of ongoing promotions, site modifications, other issues that could inform their media buying so that it is cost-effective
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Media Planning and Buying
• Planning of media strategy and creative development
• Implementation of campaign – media buying and ad serving
• Campaign analysis and optimization
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Phase I: Media Planning • Examine client objectives and develop strategy
to meet those goals
• Targeting – where to buy media
• Creative group will develop online creative ads (banners, copywriting for sponsored links, promotions)
• Positioning – what to say – the story –messaging
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Phase II: Campaign Implementation
• Agency approaches media outlets (inventory owners) to negotiate rates for ad placements
• Purchases the ad inventory – keywords, display ads, rich media
• Agency arranges for placement of ads on various sites – either directly or through an ad network such as Google/Yahoo! if SEM
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Phase III: Analysis and Optimization
• Agency conducts campaign analysis to measure effectiveness of advertising efforts
• Metrics – unique visitors generated, registered users, purchases
• Data to provide insights into current and future campaigns
• Return On Advertising Spend (ROAS)
• Optimize campaign – spend future dollars effectively
• Which sites, which offers, and which ad creative drove best quality traffic
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Branding Metrics• Reach – the fraction of a specific market category or
demographic group that advertisers can access at least once during an ad campaign
The percentage of total target market that advertiser can expose to their brand
• Frequency – number of times a person is exposed to an ad
Not enough to simply reach audience, must expose them to your message multiple times to cut through the clutter
Must make them aware that your brand exists, and then get them to take the desired action
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Article Submission Tactic (1)• Blog entries can be turned into articles
• If you’re selling something (e-commerce model), don’t make your articles a hard-sell pitch
• Again, position yourself as an expert
• Ex. I sell children’s books and music CDs – my articles are:
• 27 Ways To Get Your Child Hooked On Books• The Benefits of Music on Child Development• The Mozart Effect: Fact or Fiction?
• Insist on byline and links back to your site
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Article Submission Tactic (2)• Contact web site owners directly
• if they have lots of relevant, targeted traffic this might be worthwhile
• check Alexa or Quantcast to see how much traffic they’re getting
• Submit through article syndication directories
• Google the phrase “free article syndication directory”
• www.ideamarketers.com• www.ezinearticles.com• www.articlesbase.com
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Include Your Link-Back Request At The End of the Article
This article is copyrighted; however, please feel free to distribute it or post it on your blog/website. Please do not alter it in any way. Please acknowledge us as the source by inserting a link back to our homepage at: www.myhomepage.com.
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Getting Credit Once Finding a Posting and (More-Importantly) a Link-Back
Dear Sir/Madam:
We see that you've posted our articles on your website/blog. We welcome the exposure; however, given that it is copyrighted material, we request a link back to our site directly underneath the byline where it says “By Paul Borgese”.
Please insert the following:
To find out more about Paul Borgese's children's CD, Even the Monkeys Fall Out of the Trees, visit www.PaulBorgese.com
Please email us when this is inserted.
Thanks for your cooperation.
Sincerely,Paul Borgese
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What is Squidoo?• Site enables anyone to easily setup for free a single
page on a topic – interest, expertise
• Founded by Seth Godin – Purple Cow, Permission-Marketing
• Network of user-generated “lenses” – individual pages
• Lenses highlight your perspective, recommendations, expertise
• Thousands of articles on various of topics
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Benefits of Having a Lens• Positions you as a sharer, an expert
• Enables quick Google indexing – web spiders visit it often as it is, like a wiki – like Wikipedia –constantly updated by many people
• Gets you higher Google rankings
• Ad revenue shared with content creator, charities– currently, 5% charities, 50% lensemaster, 45%
Squidoo
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Squidoo Tactics (1):The Key is Keywords with Google Trends
• Use popular niche keywords to label your pages
• Use Google Trends – compare the world’s interest to your topics of interest
• How often keywords (topics) are searched on Google
• Shows frequency in Google News – aggregated news
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Squidoo Tactics (2)• Provide links, feeds, lists to those trying to learn about
topics
• Links to Flickr photos, eBay auctions, YouTube videos
• Lensmasters are encouraged to promote personal agendas, expertise, causes, products, opinions – but still don’t advertise, educate
• Include your bio and links to your site
• Create Squidoo mission as customer-centric – how you can help your audience
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Squidoo Tactics (3)• Promote affiliate products – selling OPP –
other peoples’ products for a commission
• Grab email addresses by offering something of value – a special report
• Link lens (Squidoo page) to a blog so once you attract the eye (interested visitor), you can capture it
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Squidoo Tactics (4)• Update lenses when you update your blog
– maybe not as often – make sure you don’t dilute the focus of your lenses
• Join related Squidoo Groups to promote yourself
• Update the intros to your lenses every few months to make content look fresh
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Cloud Computing• Web 1.0 - buy software (physical disks) and run it
on a local server (or your PC)
• Web 2.0 - Software-as-a-Service (SaaS) – free, freemium, subscription (lease) models
• Benefits: – access apps/utilities from anywhere– collaborate in real-time– store and manage files
• Risks: security, scalability, reliability – gmail down for four hours
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Start A Business Now with No-Money Down
• Simple formula for starting a business nowadays
– Pick a niche
– Find products to sell (your own or affiliate marketing)
– Pull together inexpensive, off-the-shelf technology
• Examples of Cloud Computing Solutions
– GoogleApps (replace MS Office plus sharing apps like GoogleDocs
– OpenOffice.org (replace MS Office)
– Salesforce.com (free/inexpensive CRM)
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Social Bookmarking• A cloud computing application
• Web 1.0 – you added interesting sites to a bookmark or favorite – but it was tied to one computer – what about accessing it from your computer at home?
• Web 2.0 – social bookmarks are virtual bookmarks
• Enables – discovering what’s new– discovering what’s popular (voting)
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Organizing and Sharing Your Favorites
• Just as social networks organize like-minded or clans (clouds) of people and enable sharing amongst them
• Social bookmarking services enable the organization and sharing of related content (sites, pages, articles, blog posts)
• Delicious.com - first virtual bookmarking service
• Other popular ones: Digg.com, Reddit.com, StumbleUpon.com
• Your collection of social bookmarks tell people who you are – your interests, your expertise
• Become known as a go-to aggregator on a topic – same strategy as portals
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Marketing Application of Social Bookmarks
1) Produce and/or Aggregate Compelling Content
- the core of any successful online strategy
- the marketplace of ideas – if it’s good, it will be shared
2) Enable social bookmarking around your content via plug-ins
- you used to have drop in the icons/functionality for each service individually but now too many
- ShareThis (WordPress plug-in)
- combines “e-mail this” with social bookmarking services
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Commenting• Be active on OPB’s (Other People’s Blogs)
• Make sure it’s not a sales pitch but that you are giving value-adding comments with link backs
• Mention your articles
• Offer free special reports / ebooks
• Hire low-cost help to generate comments -www.eLance.com
• Use comment-tracking platforms like www.BackType.com
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Range of Social Media Tactics
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Where Should I Spend My Marketing Resources?
• Test
• Monitor
• Improve
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(5) Engaging EyeBalls• #1 Engagement Tactic – provide great content
• Engage by:
– having compelling, relevant, timely content
– enabling Web 2.0 interactivity - UGC, sharing, customization
• After attracting them, convince them to spend time/attention (ad revenue) or money (e-commerce) on your site
• Once you spend resources to attract and sell them once, you want to leverage that investment in acquiring them by:
- selling them multiple times;- retaining them – getting them to come back for more - getting them to refer others
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Digital Consumer BehaviorIn Web 2.0, people are doing one of three things:
1) Searching (actively looking)
2) Discovering (randomly stumbling upon)– aka surfing
3) Sharing
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Goals of Digital Marketing
Facilitate the three activities via digital tactics
1) Tactics that facilitate search - SEM, SEO, link-building, video/article submissions to SEs
1) Tactics that facilitate discovery – additional pageviews(related articles) or video views (playlists)
3) Tactics that facilitate sharing - facilitate viralness, embeddable widgets, commenting
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Tactics To Engage EyeBalls (1)
• Compelling Content – blog, podcasts (covered above), video (covered here because high-engagement media)
– Provide a core of your own content– Supplement with syndicated content
• Site Design / Automation / Navigation
• Landing Page Optimization
• Copywriting
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Tactics To Engage EyeBalls (2)
• Community-Building
– Build your own social network– Other People’s Networks (OPN)
• Email – ongoing contact (give them a sample)
• Free special reports/whitepapers(let them take a sample with them)
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Basics of Site Development• Design – framing your content so that it is clear, credible, and inviting
- Don’t Make Me Think by Steve Krug
• Automation - so you can focus resources on marketing
- The 4-Hour Work Week by Tim Ferriss
• Navigation – organizing your site content so that it’s easily discoverable
- Designing Web Usability by Jakob Nielsen
• Landing Page Optimization – friction-free transactions
- Landing Page Optimization by Tim Ash
• Copywriting – sales copy as opposed to informational content (news sites)
- Cash Copy by Jeffrey Lant
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Two Keys To Effective Design1) Clarity
– no clutter, sufficient white space– quickly answer the question – WIIFM?– simple navigation
2) Credibility – professional look– avoid freeware that comes with ads– trust badges – halo effect – borrow clients’ credibility
- client logos if you are a service provider- VISA, Mastercard, Amex logos if selling products
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Automationwww.WhatWeRecommend.com
• Web Site Development Solution
• Shopping-Cart Solution
• Autoresponder Solution
• Email Newsletter Solution
• Digital Salesperson Solution
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Navigation• Choice is typically bad – especially when close
to transaction point
• The confused mind does nothing – Fred Gleeck
• Why left a left skyscraper nav bar might be right for you– eye-tracking studies– you won’t run out of room like you will with a top
horizontal banner nav bar
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Take A Look At This
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Where Did Your Eyes Go?
• Where users focus attention – Google the phrase “Google eye-tracking”
• People do quick scans – headlines, bolding, images
• Upper left and down left nav
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Google Eye-Tracking Study
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Landing Page Optimization• Don’t focus resources acquiring traffic (spend time, money, energy) without spending even more resources to:
- capture attention- convert browsers to buyers
• Start with GOOD DESIGN BASICS but…
• Let NO ONE (not even “professional web designers) EXCEPT YOUR CUSTOMERS determine what your site ultimately looks like by…
• TESTING for constant and never-ending improvement (CANI) to maximize conversions
• Test radically different versions and then hone down
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A/B and Multivariate Testing Elements
Test:
- Ad Creative - Google AdWords text- display ad look
- Headlines
- Copy
- Images
- Offers
- Element Placement – ex. call-to-action buttons
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Advanced LPO
• Tailor landing pages to keyword purchases, different sales channels
• Serving based on day-parting – ex. copy-heavy pages (long sales letters) perform better after hours
• Shopping cart abandonment rates
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Google Website Optimizer
• Free Google tool
• Enables you to listen to your visitors, increase conversions, eliminate guesswork
• Ties in to Google Analytics which enables you to monitor site activity – bounce rate
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Copywriting
• Focus on customer, don’t beat your chest
• WIIFM?
• We help people who…pain, fear, worry
• Convert features into benefits – “so that”
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Writing Effective Headlines• Bolder, bigger fonts – upper- and lower-case to make easier to read
• Headlines for different segments of long blocks of test – break it up to make inviting to the eye
• Don’t sound like an ad – add value– Not “Incredible New Diet” – but instead, test:– 5 Way To Lose Weight Quickly and Easily
• How-To / Actionable Advice– people are searching for answers to problems – even if the problem is: I’m bored, what
should I do? (answer: YouTube)
• Short, easy-to-read headlines with subtitles – to provide more info after catching eye - problem/solution
• Ask a question that gets at pain– Are you struggling with selling?
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Engaging Through Online Video
• Users expect video experience
• Top 4 most popular categories – news, movie previews, music videos, amateur (YouTubish) videos – then TV shows
• Used to:– Cross-promote TV shows, movies, music sales– Promote products/services– Generate ad revenue
• Monetized via:– In-stream ads (pre-, post-roll, interstitials)– Companion (display) ads – that might or might not match the in-stream
ad– Overlays
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I Want My YouTube
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How To Monetize VideoVia Advertising
• Advertising (various ad units)
– In-stream ads (pre-, post-roll, interstitials) aka in-line, linear ads
– Companion (display) ads – that might or might not match the in-stream ad – stays static throughout the ad
– Overlays – Google AdSense for Video
• Sponsorships (AP Today-In-History)
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In-Stream Video Ad with Companion Display Ad
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Video Sponsorship for a Movie on Break.com
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Google AdSense for Video: Overlay
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Video Used to Promote
• Video player viral widgets to showcase content and draw users back to content on a destination site – a taste of content
• Promotion for E-Commerce (Buy.comaffiliate program)
• Get a political message out
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World Leaders Using Video To Get Their Message Out
• Barack Obama – videos on his own site (BarackTV) – and YouTube channel – most popular is him dancing on Ellen DeGeneresShow
• Queen of England – her visiting poor people –I’m not just sitting in the tax-payer paid-for palace
• Queen Rania of Jordan – won YouTube Visionary Award – her goal is to help prevent Muslims and Arabs from being stereotyped
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Video Widgets Provided By Buy.com for Affiliate Marketers
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Video Channel Strategy
• Capture and retain attention through vast libraries of video archives
• Cater to different interests that are categorized for easy access
• Get the extra video stream – incremental views mean more ad dollars
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AP’s YouTube Channel• Redesign of our channel on YouTube to
– Categorize
– Optimize so it is discoverable
– Facilitate viewing of that incremental video – if you liked this video, you’ll like this one - recommendations
• Promote subscribers so we get repeat visitors and enable functionality
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YouTube Honors• Based on various merits:
– Most Views – Most Discussed (comments)– Top Favorited– To Rated
• Honors broken up by categories (Comedy, Music, How-To), and ALL (overall)
• Benefit: great placement – gets you attention and translates into more views
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Make Your Own Video Ad• Conversion rates – double and triple – consumers
want to see products in action
• The Snuggies – The Blanket With SleevesVideos on YouTube; on their own site – have sold 4 million units
• As Seen On TV products making a killing – taking advantage of low TV ad rates – moving from 2 am to prime time
• Book on producing inexpensive, quality video -YouTube Moviemaking by Bill Dyszel
– Tip: make sure you produce quality audio
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YouTube Marketing Basics (1)• Design your channel – choose color scheme,
upload logo
• Provide a call to action – donate, give us feedback, check out our website
• Create and post videos regularly – get users talking and participate in the conversation
• Be authentic – don’t be unprofessional but be genuine
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YouTube Marketing Basics (2)• Tell an ongoing story to retain visitors
• Respond to current events
• Tag and title well – add relevant keywords to make your videos more discoverable
• Use your video description field and branded banner URL to drive users to your website
• Embed your video in your site and in response to blog entries
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Blendtec Leverages YouTube
• “Will It Blend?” – CEO Tom Dickson attempts to blind various objects (iPhone)
• Low-cost, instant viral hit
• Report of “five-fold increase in sales”
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Email Marketing (1) • Recall an earlier slide on top 2 tactics used by
marketers• Email Marketing (72.6% of respondents)• Email Newsletters (60.8% of respondents)
• Constant flow of attention: you want to grab space in prospects’ email inbox
• Name-Squeeze – capture email addresses by offering something of value (ex. www.7SellingSins.com)
• Come up with a compelling bribe – exchange name for value – access to premium content, a free report
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Email Marketing (2)• Permission-Marketing (Seth Godin)
- not Interruption Marketing - double opt-in
• Content-To-Ad Ratio – at least 3 to 1
• Email Newsletter Solution (RSS-to-Email-Newsletter Converter), Auto-Responder Solution
• www.WhatWeRecommend.com
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CAN-SPAM
• National standard for sending commercial email
• Enforced by the Federal Trade Commission
• Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003 (updated in 2008 to clarify)
• To control spam
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Main Provisions of CAN-SPAM
• Email Newsletter/Auto-responder solutions comply (www.WhatWeRecommend.com)
• Unsubscribe compliance – “clear and conspicuous”, operable unsubscribe mechanism present in all emails
• No misleading sender or subject lines
• Opt-in (Double Opt-In)
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Two Communities Strategies
• Build and grow your own community
• OPAE: Other People’s Aggregated EyeBalls– Dip into someone else’s pool of fish – Facebook
page
• Not mutually exclusive – you can do both
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Keys to Successful Community-Building (1)
• Community Strategy - focus on a niche topic – define the community’s purpose (positioning) and audience (targeting)
• Have a community manager (a la About.com) to:
(1) keep the conversation going, and
(2) monitor to ensure appropriate content is uploaded – your brand is at stake
• Go for the registration – but remember, adoption is the key – active users
• Content bait
• Multiple options for user self-expression (UGC)
- text commentary - uploading video- sharing functionality- take-it-with-you embedding functionality (a la YouTube)- ratings
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Keys to Successful Community-Building (2)
Choose an off-the-shelf community platform solution:
– KickApps.com powers NPR.org
– Ning.com powers Spill.com (movie review site)
– Gannett’s Ripple 6 powers MomsLikeMe.com
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Questions To Ask When Choosing A Platform (1)
• What are my community’s objectives?
• What social media features do I need to meet my objectives and provide an addictive user experience?
• What tech resources do I need to build AND maintain?
• How long will it take to get it up and running?
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Questions To Ask When Choosing A Platform (2)
• How much will it cost?
• What’s the solution-provider’s business model? Will they serve ads?
• How will I measure success? What are my success metrics / KPIs? (Key Performance Indicators)
• Does the platform solution have the necessary community management and reporting functionality?
• Listen and iteratively modify content/functionality to keep meeting the needs/interests of the community
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Community Functionality To Engage EyeBalls
• User Profiles
• Self-Expression
• User-Empowerment
• Portability
• Self-Publishing
• Multimedia Self-Expression
• Community Chat
• Shareability
• Content Customization
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Facebook, MySpaceAdvertising/Marketing on Social Networks
• Can buy display/PPC ads – low conversion rates, but maybe highly targeted?
• Promote yourself as an individual – think of yourself as an expert in a niche
• Promote yourself as an entity - a brand, music group, company, charity
• Find influencers who have already aggregated your target audience and connect like crazy – dip into the pool they’ve already formed
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Your Facebook Presence• “Profiles” – for individuals – “personal” FB versus
pictureless, “professional” LinkedIn
• “Pages” – artists, businesses, brands – if in business, we suggest both
• “Groups” – based on shared interests, activities – in marketing, psychographics – better ad targeting
• Not to argue with Michael Corleone, but it’s not just business - it’s business AND personal
• People want to do business with other people
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Burger King’s Whopper Sacrifice on Facebook
• Application that allows users to delete 10 friends in exchange for a free Whopper coupon
• 20,000 users adopted app
• shut down quickly for privacy concerns
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Final Thoughts on Communities• Niche communities are the future – an extension of
long-standing traditional professional associations
• Communities evolve– You will learn what they want over time– User needs/wants will change over time
• Three-Step Feedback Loop1) Listen (monitor, measure)2) Modify3) Repeat step 1
• Iterative Process – the idea/business you started with might not be the one you ultimately succeed with
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Simple Success Online• Success = making more money on each visitor
that comes to your site (revenue) than it costs to attract that visitor (expense)
• Buying Traffic – search engine marketing -through the infomediaries – Google, Yahoo
• Engaging Traffic – social media marketing on MySpace, Facebook, YouTube, etc.
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Test Everything• You never know what will work
• Must make initial assumptions
• But then future decisions informed by actual results
• Results eliminate argument
• Constantly learning organization
• Feedback loops
• Must test on an ongoing basis due to the volatile nature of the online space
• Who should design your Web site? Your customers. Landing Page Optimization.
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Rapid, Iterative Market Research• Your business as a science experiment
• Research first - ask others how they did it so you can emulate them when appropriate
• Pattern recognition – it worked for them, will that strategy work for us?
• Then ask the marketplace
• Hypothesis, Test, Results, Analyze, Refine
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Engagement Marketing• Traditional media – pushed out to
consumer – interruptive – no way for user to interact with the content
• Internet requires active interaction – even if just user decision as to where to click
• Goal is to get users to engage deeply with your brand
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Forms of Engagement Marketing
• Interaction with an online ads or widgets
• Viewing rich media, slide shows, video, audio –any content that retains attention
• Web site functionality – typing search queries, customizing music playlist, selecting videos
• Taking a survey, rating products, writing recommendations
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Examples of Engagement Marketing
• MyCoke.com– users could redeem Coke points for ringtones, music,
sporting events- Download screensavers, videos, chat with friends
• M&Ms– Watch M&M videos and commercials– Play interactive games– Download screensavers– Send animated M&M greeting cards
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Benefits of Engagement Marketing
• The more involved in advertisers’ media, more likely to buy and remain customer
• Enables advertisers to collect consumer registration data for follow-up, market research, feedback to new product dev.
• Advertisers can watch trends in demand and modify promotions accordingly
• Online video is more engaging than TV – lean-in versus lean-back
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Media Fragmentation: Engagement Marketing and Online Video
• Interactive online video – users expect it
• Social media sites – social networks/video sites – taking time away from other popular media activities – TV, magazine, newspapers – even Internet as a whole
• Media fragmentation – better for targeting (advertisers); harder to sell mass advertising (publishers)
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What’s a Widget?• Web widget - snippets of code that a user can
easily embed in a Web site (ex. a YouTube video)
• Desktop widget - small, downloadable programs that reside on a desktop
• This code or program brings in “live” content –news, ads, links, images, videos – from a third-party site without the Web site owner having to update it
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Example: Widgets for Music Site
• Allow users to receive constantly updated music news via RSS feeds
• Access personalized music radio stations
• Search songs or other music-related information so they can discover new music
• Widgets can be seen as dynamic, rich media ads that can spread a brand virally
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Why Embrace Widgets (or any other new technology)
• FEAR– it’s the trend – you don’t want to be left behind
• But is it a fad? More control in hands of users –they want to be able to surround themselves with slices of media they want to consume
• HOPE – follow, retain, engage visitors – keep in front of their eyeballs
• Widgets out beyond your site may drive traffic back
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Are Widgets A Fad?• Not enough to invest in widgets just because everyone
else is doing so
• Widgets are only one manifestation of the user engagement trend
• The power of content consumption choices in hands of users and isn’t going to reverse
• Technology at low costs so everyone who wants eyeballs can do it and will do it
• Like online video, users will expect your sites to be fragmentable
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Personalized Start Pages• iGoogle, Netvibes, Pageflakes – allow users to
customize their media portals
• Days of getting users to type in your URL may be over
• Successful marketers will enable their users to consume their sites content wherever it is most convenient for them - portability
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Four Key Components toWidget Success
• Content
• Technology
• Distribution
• Monetization
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1) Compelling Content• Must be useful, entertaining – compelling -
to be initially employed, used on an ongoing basis, spread virally
• Content could mean 1) text/audio/video; or 2) functionality (a search box)
• Competing with millions of other applications – low barriers to entry
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2) Technology• You can do it yourself or use a developer
• If you employ a developer, three issues to address in the selection process:
a) Scalable Back-End Platforms
b) Robust Reporting Capabilities
c) Distribution Control/Monitoring/Tracking
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a) Scalable Back-End Platforms
• Widget provider serving the applications must be able to scale if you are successful
• Horror stories of start-ups that have been wildly successful only to see servers crash
• Demand is difficult to predict but prepare for success
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b) Robust Reporting Capabilities• Require detailed reporting that enables you to know
where your widgets are being distributed – and who are the power-distributors
• Want to understand which content is being adopted rapidly, and which is being ignored
• Information that will help you focus future widget initiatives – feedback loops as to:
– what content users find interesting– develop widgets that maximize user involvement– focus efforts on target demographics, markets and power-
distributors (aka influencers)
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c) Distribution Control/Monitoring/Tracking
• You want your widgets to spread virally; however, you might want to have some control and ability to disable
• Example: AP being able to “kill” a story if known facts change
• Example: Consumer brand being able to disable widgets if consumer backlash for whatever reason – perhaps if found distasteful
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3) Distribution• Creating a widget doesn’t ensure its distribution
• Less than 1% of all widgets created are adopted by 1 million users or more
• Widgets are easy to create
• On the Web, content supply outstrips demand
• Buying initial distribution – downloadables
• And leveraging the networks of widget developers / advertising networks / social networks is essential
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4) Monetization
• Widgets as ads - a way to get exposure for your destination site where you monetize
• Inserting ads in widgets
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Widget Case Study: DDNI• Thin margins on laptop sales – 5-7%
• Acts as agent for OEM laptop manufacturers to find additional revenue streams
• Desktop widgets – offering affiliate products, sponsorships
• Tactic – aggregating video - YouTube Killer –snag the eye before it even goes on the web –capture it on the desktop
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(6) Monetizing EyeBalls
1) Advertising model (Google, portals, newspapers)
2) Subscription model (Wall Street Journal Online, application service providers – Salesforce.com)
3) E-Commerce model – buying and selling stuff
4) Affiliate model – selling other people’s stuff
5) Lead Generation model – finding targets to pitch stuff to
You Must Diversify Beyond the Ad Model!
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Measuring Advertising Effectiveness
Web Analytics – the activities and software solutions related to:
– Tracking– Collecting– Measuring– Reporting– Analyzing
the relevant quantitative Internet data to optimize digital marketing initiatives
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Web Analytics Optimization Goals
• Attract more – especially more-qualified -visitors
• Engage and retain visitors
• Increase sales conversions – turn browsers into buyers, or casual users into power users
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How Companies Actually Use Analytics
• Track trends in traffic volume
• Conversion rates
• Click-through rates (CTRs)
• ROI (return on investment) or ROAS (return on advertising spend)
• CPA (cost per action)
• Number of online sales
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Digging Deep Into Analytics Can Reveal Gold (1)
• Track the performance of online marketing initiatives, such as pay-per-click keyword buys, banner ads, emails, and affiliate marketing programs
• Track how a visitor navigates a Web site
• Analyze conversion by product, price, customer source, search word, navigational path
• Analyze abandonment trends – within which sections/specific pages of the site to visitors leave
• Identify the referral source of site traffic
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Digging Deep Into Analytics Can Reveal Gold (2)
• Measure the effectiveness of any process, such as the checkout process
• Identify online processes that have high abandonment rates
• Identify products that are viewed by the same visitors, and correlate the data with browsing behavior and sales conversions
• Analyze how visitors navigate through a site, identify the pages they view most frequently, and correlate the data with sales conversions
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Measurement: Don’t Be Lazy About It
• The reason marketers should like the Web is that all activity is measurable
• Less art (guessing) about what works and more science
• “What gets measured gets managed.”– Peter Drucker, management guru
• “Results eliminate argument.”– Fred Gleeck, Internet marketing guru
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Common Web 1.0 Metrics• Revenue Per Visitor
– ultimately the only things that matter are RPV and CPV
• Bounce Rate
• Unique Visitors
• Registered Members
• Active Users
• Pages-Per-Visit
• Page Views
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Bounce Rate• Percentage of single-page visits
• The first “conversion” point is – do they stay more than one page?
• Measures visit quality – either:– unqualified/quality traffic– poor user experience
• Google Analytics will give you bounce rate stats
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Unique Visitors (UVs)• Count of how many different people access a
Web site in a given period of time – usually per month
• If user leaves and comes back to a site five times during measurement period, person still only counts as one unique
• UVs determined by the number of unique IP addresses on incoming requests that a site receives
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Active Users• Even though an individual may visit or even
register may not mean that they are actively using the site
• Number of active users and amount of activity will determine amount of ad revenue and perhaps sales
• Activity measured by pageviews and engagement metrics (ex. Time on site)
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Pages-Per-Visit and Pageviews
• Pages-per-visit – average across all visitors
• Pageviews – aggregate number of pages viewed by all visitors – usually measured per month
• If ad model, pageviews determine number of ad impressions (ad inventory available for sale on a CPM basis)
• PVs driven by quality of user experience
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Engagement Metrics• New interactive (Web 2.0) technologies such as
video and widgets force Web publishers to rethink what to measure
• Visitor may only hang out on one page but be very engaged with a video or widget
• Such a visitor who watches a lot of video or comments/rates/generates content may be more valuable than a high-pv browser
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Social Media Metrics• Time On Site (TOS)
• Number of mentions on blogs
• Number of positive/negative ratings on products
• Number of comments on content
• Number of pieces of UGC uploaded (ex. video)
• Click-thrus to site
• Return On Investment (time, money)
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Google Metric Tools
• Google Trends - compare the world’s interest in your favorite topics. Enter topics to see how often they are searched on Google
• Google Analytics – where your visitors come from, how they interact with your site, which keywords, ads, referrals, campaigns are generating greatest ROI
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Audience Measurement Services
Sites/services that provide traffic, demographic information
• Alexa
• Quantcast
• Compete
• Nielsen/Netratings
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Engagement and Ad Dollars• If activity can be tracked, web publishers may be
able to command higher rates for engaged visitors
• Most inexpensive web analytics tools not able to track such metrics
• Most tools can’t track new technologies such as AJAX thus distorting user activity/value
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AJAX• Shorthand for “Asynchronous JavaScript and XML”
• Development technique for creating interactive web applications
• Make web pages feel more responsive by exchanging small amounts of data with the server behind the scenes
• Entire web page does not have to be reloaded each time the user requests a change
• Increases page’s interactivity, speed, functionality, usability
• Not a simple pageview – hard to measure
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How To Value A Web Site• October 2007, Microsoft takes $240 million equity stake
in Facebook – values networking site at more than $15 billion
• Before the Internet Crash, investors thought that eyeballs = cash
• But traffic didn’t translate into long-term viable business model
• Now, VCs more careful – they know that attention is everything, but eyeballs only potentially = cash
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Life-Time-Value of Visitors• The bottom-line measurement of monetization
effectiveness
• Average advertising spend necessary to drive one visitor versus the total revenue generated by an average visitor
• General marketing rule of thumb: it costs much more to acquire than retain a customer
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Tread Lightly with Advertising • Revisiting advertising from the publisher
perspective (as opposed to the advertiser perspective)
• User experience first, monetization second
• Don’t bombard with ads – find the right balance
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Advertising Networks• Brokers, matching advertisers with web publishers and
take their cut
• Google controls it’s own traffic through search toolbar –no need to share that revenue with its network of publishers
• Others: Yahoo, Rubicon (network of networks), MSN, MIVA
• Publishers should pull in multiple feeds – technologies that cascade ads to maximize revenue – serving highest eCPM ads
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Niche Sites Monetize Well
• Bucking the trend
• Sites that create and aggregate content about topics like sports, business, health
• Highly targeted eyeballs which advertisers are willing to pay higher CPMs for
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Affiliate Marketing
• Merchant
• Affiliate marketer
• Networks
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Affiliate Networks• Once you aggregate like-minded eyeballs,
maximize monetization by selling them multiple products/services
• Find products/services your audiences want– LinkShare.com– CJ.com (Commission Junction)– Google Affiliate Network– ClickBank.com (digital products)– ShareASale.com– WebGains.com
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Desperate Times, Desperate Monetization Methods• Cash-strapped teacher sells ads on tests
• San Diego high school, calculus teacher sells ads on exams to cover printing costs
• Inspirational quotes sponsored by local businesses or ads
• DesperateTimesDesperateMeasures.com
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Case Study: Obama Online (1): Fundraising Results
• Goals – raise money, raise awareness
• According to the Washington Post, Nov. 20, 2008, in his 21-month campaign, raised more than $500 million
• Average Obama donor gave more than once – 3 million donors with more than 6.5 million donations
• Micro-fundraising - 6 million were in increments of $100 or less - average online donation was $80
• Raised millions from traditional well-connected fundraisers, but the bulk of the more than $600 million was raised online
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Obama Online (2):Tactics Used
• Gathered list of 13 million email addresses
• Aides sent 7,000 different emails, segmented/targeted at different levels of donors – total of 1 billion emails sent
• One million people signed up for Obama’s text-message program
• Supporters received 5 to 20 text messages per month depending on where they lived and kinds of messages they opted to receive (segmented by states, regions, zip codes, colleges)
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Obama Online (3):MyBarackObama.com
• Obama’s own social network
• 2 million profiles created
• 200,000 offline events planned
• 400,000 blog posts written
• 35,000 volunteer groups created
• On their own MyBO fundraising pages, 70,000 people raised $30 million
• Supporters trained to collect small-dollar donations from friends, relatives, co-workers
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Obama Online (3): Tapping Into Other Social Networks
• Obama had 5 million supporters in other social networks
• Maintained profiles in 15 online communitiesincluding BlackPlanet (MySpace for African Americans) and Eons (Facebook for baby-boomers)
• FB supporters created a popular group called Students for Barack Obama – so effective, senior aides made it official part of campaign
• 5.4 million FB users clicked on an “I Voted” button to let FB friends know that they went to the polls – peer pressure online
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Obama Online (4):BarackObama.com
• Content development team
• Staffers ran ad campaigns online (ex. FB)
• Analytics team measured traffic to the site
• Tracked which ads at what time drew most traffic
• Tracked what emails got opened and read most
• Obama’s online campaign wasn’t outsourced as most are – all done “in-house” by staffers
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Obama Online (5):Keeping the Conversation Going
• Transition site, Change.gov, put up two days after he was elected
• Radio addresses will be videotaped and archived on YouTube
• Email with subject line: “Where we go from here” – detailed, four-page survey asking supporters for their input on moving forward
• Requesting community volunteers
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Glossary of Terms
• Advertising Inventory: the space on a site that is sold to advertisers that wish to promote their brands or drive traffic back to their sites.
• Advertising Network: companies such as Google and Yahoo!, which serve as intermediaries between a group (network) of web sites (which want to host advertisements) and advertisers which want to run advertisements on those sites.
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Glossary of Terms• CCC Sites: the three Cs stand for Community, Content,
and Commerce – such sites provide users with the ability to: (1) communicate with one another through an online community platform; (2) decide for themselves which content they’d prefer to consume as well as create content (user-generated content) such as rating, reviews, recommendations; and (3) participate in commerce related to the context of the community in which they are participating.
• Click-through Rate (CTR): The percentage of those clicking on a link out of the total number who see the link. For example, imagine 10 people do a web search. In response, they see links to a variety of web pages. Three of the 10 people all choose one particular link. That link then has a 30 percent click-through rate.
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Glossary of Terms• Contextual Ads: Contextual or content inventory is
generated when listings are displayed on pages of Web sites (usually not search engines), where the written content on the page indicates to the ad-server that the page is a good match to specific keywords and phrases. Often this matching method is validated by measuring the number of times a viewer clicks on the displayed ad.
• Conversion Rate: The relationship between visitors to a web site and actions consider to be a "conversion," such as a sale or request to receive more information. Often expressed as a percentage. If a web site has 50 visitors and 10 of them convert, then the site has a 20 percent conversion rate.
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Glossary of Terms• Cost Per Click (CPC): same as Pay-Per-Click
(PPC) advertising model in which an advertiser pays an agreed amount for each click someone makes on a link leading to their Web site.
• CPM: advertising model in which an advertiser pays an agreed amount for the number of times their ad is seen by a consumer, regardless of the consumer's subsequent action. It is the model heavily used in print, broadcasting and direct marketing, as well as with online banner ad sales. CPM stands for "cost per thousand," since ad views are often sold in blocks of 1,000. The M in CPM is Latin for thousand.
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Glossary of Terms• Organic Listings: Listings that search engines do not
sell (unlike paid listings). Instead, sites appear solely because a search engine has deemed it editorially important for them to be included, regardless of payment. Sites can better their chances at ranking high in organic listings by conducting effective search engine optimization.
• Pay-For-Performance: Term popularized by some search engines as a synonym for pay-per-click, stressing to advertisers that they are only paying for ads that "perform" in terms of delivering traffic, as opposed to CPM-based ads, where ads cost money, even if they don't generate a click.
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Glossary of Terms• RSS (Really Simple Syndication): a syndication format,
which can be used by individuals to subscribe to feeds of information such as news or blog entries that will then flow into a newsreader or widget so that they do not have to visit the site where the content was originally posted in order to view it.
• Search Engine: Any service generally designed to allow users to search the web or a specialized database of information. Web search engines generally have paid listings and organic listings. Organic listings typically come from crawling the Web, though often human-powered directory listings are also optionally offered.
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Glossary of Terms• Search Engine Marketing (SEM): The act of
marketing a Web site via search engines, whether this be improving rank in organic listings, purchasing paid listings or a combination of these and other search-engine-related activities.
• Search Engine Optimization (SEO): The act of developing/modifying a Web site so that it does well in the organic listings of search engines.
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Glossary of Terms
• Search Engine Results Page (SERP): After a user enters a search query, the page that is displayed, is call the search engine results page.
• Search Terms: The words (or word) a searcher enters into a search engine's search box. Also used to refer to the terms a search engine marketer hopes a particular page will be found for. Also called keywords, query terms or query.
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Glossary of Terms
• Web 2.0: the popular term used to describe the technologies and functionalities of the second wave of the Web. Web 2.0 is not a specific technology, but rather refers generally to functionality related to user-generated content, RSS, video, widgets, and other highly interactive online media.
• Widgets: either (1) snippets of code that a user can easily embed in a Web site or (2) small, downloadable programs - both of which deliver a dynamic content experience to the end user. The widget code or program brings in "live" content – news, advertisements, links, images, video – from a third-party site without the Web site owner having to update it.
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(7) Serialpreneurship
The Secrets of Repeatable Business Success
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Back to Basics• People that start online businesses often forget
that they are running BUSINESSES
• The metric is money (not eyeballs)
• Must have core business knowledge
• The best online marketers are old-school direct marketers who have learned the new tactics but apply the old business disciplines
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Why Study Serialpreneurs?
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Serialpreneurs and Business Plans
Two parts to our discussion on businessplans
– Philosophy – way of looking at the business world
– Execution – the nuts and bolts of building a business plan
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What is a Serial Entrepreneur?
• Criteria for inclusion in the study
• Started at least two or three companies that have been sold or provide them with multiple streams of income
• Action-Intellectual – they did it, and understand and can express how they did it
• Looking for certain patterns – best practices -traits, attitudes, behavior
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The Mindset of Serialpreneurs
• Different mindset when it comes to business plans
• Exit Strategies: begin with the end in mind (ex. KickApps)
• Working on your business, not in it
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S.E.R.I.A.L. Success
Patterns of attitudes, behaviors, actions• Systematize – work on the business
• Emulate – model success
• Resilience – flexible fortitude
• Iterative – constant, never-ending improvement
• Ask – assume, test, analyze, repeat
• Leverage – minimal effort, large impact
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Systematize
• Organizations are about process and people
• Policies/processes so can free up people’s times to make higher-level decisions
• Processes are a way to leverage people’s time
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Google: Taking People Out of the Loop
• Signing up for AdWords
• Take-It-Or-Leave-It Terms and Conditions
• Click “I Accept”
• Cut-and-paste code is provided
• Tutorials Online
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Emulate• No one else is doing this
• First ask yourself why they’re not
• Then really look and find your competitors
• C.A.S.E.
• Benchmarking and best practices
• Find those who are succeeding and go ask them how they did it
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Resilience• Rapidly evolving market demands
flexibility– Low barriers to entry– Global marketplace– Hyper-competitive– Willingness to “buy” customers by giving it
away free
• Fail fast, fall forward
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Rolling With the Punches
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Iterative
• Feedback loops
• Constantly learning organization
• Periodical organizational self-reflection
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The Need for Speed
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Ask• Your business as a science experiment
• Research first - ask others how they did it so you can emulate them when appropriate
• Pattern recognition – it worked for them, will that strategy work for us?
• Then ask the marketplace
• Hypothesis, Test, Results, Analyze, Refine
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Leverage• Making the most out of limited resources
• Financial leverage – borrowing to grow
• Operational leverage – fixed costs, low variable costs (ex. eBooks –massive profits)
• Technical leverage – no longer have to build infrastructure (ex. Zoho)
• Human leverage – social networks – viral loops
• Small amount of resources, big return
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Business Plan Crash Course
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Two Types of Business Plans
• The Hockey-Stick Plan – financing proposal - to attract investors – sales document
• Don’t Buy Your Own BS
• The Bet-Your-Pinky Plan – operating guide – reflects operational reality
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General Business Plan Framework
• Executive Summary
• Organizational Plan
• The Marketing Plan
• The Financial Plan
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Title Page of Business Plan
• Name, address, and phone number of the company.
• Name, title, address, phone number of owners/corporate officers.
• Month and year your plan was prepared.• Name of preparer.• Copy number of the plan.
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EXECUTIVE SUMMARY
• Do not write your executive summary (statement of purpose) until you have completed your business plan
• It is a summary that reflects the contents of the finished plan
• Start with a 30-second commercial though
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Executive Summary (II)
• Your Company (who, what, where, when)• Who your management is and what their
strengths are• What your objectives are and why you will
be successful• If you need financing, why you need it,
how much you need and how you intend to repay the loan or benefit the investor
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THE ORGANIZATIONAL PLAN• Summary description of your business
• Administrative aspects of the business
• Mission
• Business model
• Strategy
• Strategic Relationships
• SWOT Analysis
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Mission Statement (I)• What investors want to know:
– Where you are now (situation analysis)– Where you are going (vision - goals)– How you are going to get there (strategy)
• Mission statement covers first two
• Strategy covers how you are going to get there
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Mission Statement (II)
• Project short- and long-term goals
• Goals – dreams with deadlines
• Specific and numerical
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Business Model• How are you going to make money?
• Buy low, sell high
• Was is your model unique in your industry
• The dot-com disaster – eyeballs without cash
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Examples of Online Business Models
• Advertising model (Google, portals, newspapers)
• Subscription model (Wall Street Journal Online, application service providers –Salesforce.com)
• E-Commerce model – buying and selling stuff
• Affiliate model – selling other people’s stuff
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Strategy
• Just as mission statement explains where you are going, strategy broadly explains how you are going to get there
• Corporate strategy – buy, build, partner
• Strategic relationships are key nowadays
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SWOT
• Don’t BS yourself
• Strengths, Weaknesses – looking inward
• Opportunities, Threats – looking outward
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Situation Analysis• Analyze your industry
• What part does your new company play in this industry?
• What is unique about what you bring to the table?
• Why do people need you?
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Porter’s Five Forces• Competition in the Industry
• Potential new entrants in the industry – barriers to entry – other companies poised to enter
• Power of suppliers – costs of buying low in order to sell high – are distribution costs high?
• Power of customers – are they price sensitive?
• Threat of substitute products
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Market Analysis• How big is it?
• Is their a niche that is being overlooked?
• Current usage patterns
• Is market growing or shrinking?
• Product differentiation – how similar, how different
• Profit margins
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Products or Services (I)• If manufacturer or wholesale distributor of a
product:- describe products- the manufacturing process- info on suppliers- availabiliity of materials
Ex. Aileen’s shoe company – sourcing in China
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Products or Services (II)• If you are a retailer or e-tailer:
– Describe products you sell
– Information on sources
– Wholesale prices
– Handling of inventory
– fulfillment
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Products or Services (III)• Describe your services
• How do you fulfill the services
• Who fulfills them
• List future products or services you plan to provide – think two products ahead – product line extensions
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Intellectual Property
• Copyrights, Trademarks, Patents
- Books, e-books
- Brands, names, URLs
- Software, processes
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Location• Physical or virtual – or combination
• Describe current or planned location
• Project costs associated with the location
• Include legal agreements, utilities forecasts in a Supporting Documents section – major costs
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Legal Structure
• Describe your legal structure –partnership, LLC, C-corporation
• List owners and/or corporate officers describing strengths, contacts
• Include resumes in Supporting Documents
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Management• List the people who are (or will be) running
the business
• Describe their responsibilities and abilities
• Project their salaries
• Include resumes in Supporting Documents
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Personnel• How many employees will you have in what positions?
To start, and project future human resource needs as you grow
• Full-time versus contract
• What are the necessary qualifications?
• How will you find them?
• How many hours will they work and at what wage?
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Accounting and Legal• What system will you set up for daily accounting?
• Who will you use as your tax accountant?
• Who will be responsible for periodic financial statement analysis?
• What legal work needs to be done to set up the company, form partnerships?
• Who will you retain for an attorney?
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Insurance
• What kind of insurance will you carry?– Property & Liability, Life & Health
• Who will you use as a carrier?
• What will it cost?
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THE MARKETING PLAN
• Competitive analysis
• Marketing strategy
• Marketing tactics
• Marketing budget
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Competitive Analysis• Number of competitors in your industry
• Is your industry dominated by a few large firms?
• Market shares of top competitors
• Top 5 competitors with description of offerings, strategies, strengths/weaknesses of each
• Barriers to entry
• Overall market demand for your industry
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Marketing Strategy
• Targeting – who do you want to reach
• Distribution – how will you reach them
• Positioning – what’s the story you want to tell them
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Marketing Strategy Versus Tactics
• Strategy is planning; Tactics are execution
• Tactics cost money
• Tactics: PR, advertising, site development
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Targeting
• Who is your ideal customer?
• How do you reach them? Where would you advertise or get their attention?
• How can you get referrals or make your message go viral?
325
Other Strategic Marketing Issues
• Methods of sales and distribution (stores, offices, kiosks, catalogs, direct mail, web site)
• Packaging – look and feel – quality
• Branding
326
Marketing Tactics• Direct sales force• Direct mail• Email• Affiliate marketing• Viral marketing• Promotions – samples, coupons, rebates, free
trial• Public relations – online presence, trade shows,
press releases, interviews, speaking opportunities
327
Customer Service
• Fulfillment• Customer Relationship Management
System• Handling complaints• Upselling• Gathering testimonials• Getting referrals
328
Implementing the Marketing Strategy
• Deciding between in-house responsibilities and outsourced functions (advertising, public relations, marketing firms, ad networks)
• Determining budget for various tactics
• Feedback loop – tracking ROI
329
THE FINANCIAL PLAN
• The quantitative interpretation of everything stated in the operational and marketing plans
• Do this section after the other two
• Show past, current, projected finances
330
Summary of Financial Needs• How much capital do you have?
• How long will it last?
• What are you using it for now?
• Why are you seeking financing?
• How much capital will you need?
• What will you specifically use it for?
• What is the exit strategy for investors?
331
Financial Projections• Pro Forma Cash Flow Statements
(Budget)
• Three-Year Income Projection
• Projected Balance Sheet
• Break-Even Analysis
332
Pro Forma Cash Flow Statement (Budget)
• Projects what your business plan means in terms of dollars
• Cash inflow and outflow over period of time
• Will show how you will pay back loans and keep operations going
• Shows how much and when cash must flow in and out of your business
333
Income Statement
• Can distort cash-flow reality depending upon accounting policies that address write-offs, depreciation, etc.
• Cash-flow is the true measure
• Income statements – accrual basis for taxes
334
Projected Balance Sheet
• Snapshot of the health of a company
• Project assets, liabilities, net worth of the company
335
Break-Even Analysis• Break-even point is the point at which a company’s
expenses exactly match the sales or service volume
• Total dollars or revenue exactly offset by total expenses; or
• Total units of production, the cost of which exactly equals the income derived by their sales
• Analysis can be done mathematically or graphically
336
Supporting Documents
• Personal resumes
• Owners’ personal financial statements
• Credit reports
• Copies of leases, mortgages, other contracts
• Letters of reference
• Miscellaneous documents – location plans, demographics, competitive analysis, advertising rate sheets, cost analysis