Chitika Premium Units - AdSense watch out!
I’m really impressed with Chitika’s behavioural targeted Ads. The Ads show in the context of the blog, and only show when the blog/content is directly relevant. This makes AdSense look like a scatter-gun approach, and surprisingly ham-fisted.
Chitika’s model is based on much less traffic, but it is highly targeted. Moreover, the quality of the click is higher, because the traffic hasn’t been irritated by lots of other irrelevant advertising. This is a bright future for context advertising - where you only get the advertising you want.
Nice to see Google’s monopoly being challenged. If I was Google, I’d do even more with Google Checkout, and make sure that adverts are only served to those likely to buy, so that Ads are served not just on context but on your previous buying patterns. Then you’d only get really useful ads when you need them. You don’t need a holiday ad when you’ve just got back from holiday.
You can see the Chitika Premium Unit in action on this page, by clicking http://baldysblog.com/#chitikatest=mortgage
Turning Customers into Broadcasters
In SEO and SEM we spend a lot of time filling the funnel. The more people we get to your website, the more chance we’ve got of creating a customer. If we’ve done our job properly, 10% of these visitors will turn into paying customers, so the more you fill, the more you make?
Well yes, but if you spend all your time focussing on the funnel, you will forget to make a business so spectacular, that your customers forget to flip the funnel, and shout down it to all their friends. Here’s some reasons why customers might flip the funnel when they use your e-commerce store:
1. Spectacular Fulfillment
Amazon has got this so right. When you get an Amazon delivery, you know it’s Amazon, even without the package branding. You know how to open it, you know that the book, cd, etc., will be perfectly presented. You’re content. It’s almost perfect, but its ubiquity gives smaller players something to aim at. Consider Seth Godin’s experience when he ordered from CD Baby:
Your CDs have been gently taken from our CD Baby shelves with
sterilized contamination-free gloves and placed onto a satin pillow.A team of 50 employees inspected your CDs and polished them to make
sure they were in the best possible condition before mailing.Our packing specialist from Japan lit a candle and a hush fell over the
crowd as he put your CDs into the finest gold-lined box that money can
buy.We all had a wonderful celebration afterwards and the whole party
marched down the street to the post office where the entire town of Portland
waved ‘Bon Voyage!’ to your package, on its way to you, in our private
CD Baby jet on this day, Tuesday, June 18th.I hope you had a wonderful time shopping at CD Baby. We sure did.
Your picture is on our wall as “Customer of the Year”. We’re all
exhausted but can’t wait for you to come back to CDBABY.COM!!
2. Coupons
Coupons are a great way to reward your customers for re-ordering, or for flipping the funnel. Why not give your customers £10 to give away to their best friends? If your product and service is great, your customers should feel great about recommending you to their friends, and even better if their friends get cash benefit.
3. Email Marketing
I do not mean spamming your customers with useless crap. Do not send your customers context-less advertising. This is a serious misuse of email. Email is so overrun with useless communications (even internal business communications have now tipped into meaningless CC drivel that we don’t need), that your emails should be carefully crafted to be extremely useful and targeted. I really don’t mind receiving Amazon emails that have book selections that reflect previous purchases, and I really don’t mind receiving holiday offers from Expedia that reflect when and where I’m likely to go.
Silverjet - a purple cow dies
At the time of writing Silverjet’s shares have been suspended. The trumpeted £12.7 cash injection hasn’t materialised, and with current oil prices, they can’t survive long. Willie Walsh hit the nail on the head on his recent speech in Texas (ironically), where he stated that many airlines are just not set-up to work at $130 a barrel, and the age of cheap aviation is over.
Silverjet is a fantastic company, but it’s business model was defined in a different market, and it serves as a salutary reminder to us all - when the market changes, you’ve got to change or get out.
Questions you should ask if you want to make money online
1. Are you selling a physical or a digital product?
My forthcoming book will be focussed on selling easy-to-shift physical product that people are actually searching for. It’s possible to make good money out of shifting digital product (many of you will be reading this as a free blog though!), but in general the digital market faces certain problems for the budding e-entrepreneur. The main problem is that the content that people really want can already be obtained by suppliers with massive leverage (e.g. Apple - iTunes) or illegally (e.g. LimeWire). You can pitch original content, software widgets, ebooks etc., but you’ve got a lot of work to do in establishing a market that doesn’t already exist.
At least with physical product, you will be shifting stuff that people want, and they know they want it.
2. What barriers to entry are there?
Ideally, you need a market which is difficult to enter or understand. Establishing supplier relationships for exercise bikes, for example, is fairly protracted.
3. Can you get good supply? Agree terms with your suppliers.
Will you be drop-shipping? (The manufacturer holds inventory, and ships when you get an order). Will you be buying stock? If so, can you buy small quantities, and achieve Amazon like JIT shipping.
4. What’s your price advantage? Put together a spreadsheet of prices
Get comparison prices using searches on Google Adwords, eBay, Amazon Marketplace and a price comparison engine, e.g. Froogle, Kelkoo or PriceGrabber. Calculate your likely margin.
5. How much will it cost to get a customer? Estimate the cost of conversion.
This is an approximate estimation, but you can do the following. Create a test page using a free blog tool (e.g. Type Pad, Word Press, or Blogger.com). Create an Adwords campaign, and look for the amount you’re paying for each keyword for each click-through (CPC). Ideally, you should expect around 6-10% click-through rate (CTR) if you’re Ad is well written, and compelling against the other Adwords being served. Of the 10% that clickthrough, you should be aiming for a 10% conversion rate.
Now, these are rough numbers, but I’ve seen them work across a range of industies. So 100 people see your Ad (100 impressions, cost of an impression = zero). 10 people click through (the exact amount you pay for each click-through is determined by a real-time auction with your competitors, but let’s assume £0.20 per clickthrough). 1 person buys, so the cost of the customer acquisition is £2 (10 x £0.20).
If your margin on a tub of vitamins is £6, you’ve just made £4 profit, and you’ve got a business.
Meatball Sundae becomes a crime in the UK
The Times Online reports a huge shake-up in the UK’s consumer protection laws. The new laws cover a wide range of on- and off-line activity, and surprisingly specifically mentions fake blogs, such as those perpetrated by Walmart, L’Oreal and Coca-Cola.
Under the new legislation, companies that create fictional blogs could be fined as much as £5000. Added to which adding spammy comments on other blogs praising your company could also attract a fine of £5000.
It remains to be seen how this legislation will be enforced, but I’d much rather see market forces punishing the perpetrators of Meatball Sundaes
What is robots.txt?
Robots.txt is a standard file that should be installed at the root of your website. It tells search engine crawlers what to index in your site (you might have folders with protected content in, that you don’t want appearing in Google).
You can verify it exists and whether it’s working at Google Webmaster tools.
Google Checkout - time for revolution!
There is a real trojan horse in the otherwise wonderful Google Checkout. It’s so bad, and dumb, that I’d like this page to serve as a protest vote to Google. Google has to change this.
Google checkout is a really easy to use payment system, and its integration with Adwords gives you a better CPC and customer conversion rate. The downside is Google knows too much about your business, and will charge you more for your Ads, because it knows *exactly* how much the lead is worth to you.
But that’s not the really bad thing about Google checkout. The unpardonable sin is that *your customer* can withhold his or her email address.
Now let’s get this straight. You’ve got a prospect to your site. They’ve reviewed your site and your product, and they’ve made a buying decision. At checkout they decide to use Google for handling the payment. You’ve got a customer, right? NO! Google has won a customer, and Larry and Serge intend to keep it that way. Your customer opts out of sharing their email address. So you’ve won a sale, but you haven’t won a relationship.
Google’s determination to deny you direct contact with your own customer is so un-Googleish, I can hardly believe its true.
If you think this should change DIGG it now. Comment here, and make your voice heard!
Florence Balderson becomes Club Penguin addict
Virtual playgrounds are booming according to a recent BBC article. Here’s what Florence thinks about Club Penguin:
It’s fun. I like lots of the games. I need to practice on saving money, instead of spending it on new clothes and wigs that are super-cool.
[Dad: How did you get into Club Penguin?]
When Leonha came round she showed me website and I played the games, and I really liked them, but I couldn’t upgrade my igloo, or buy clothes and wigs, or puffballs and furniture, so I really had to persuade you to give me a year’s membership.
What’s really impressive about Club Penguin is the quality of the graphic environment, and I hope the child protection (the Disney brand lends considerable credibility here). You can’t fault the new marketing approach of Disney - they’ve provided a free playground (currently being enjoyed by 15 million kids), and they’ve got kids talking to kids about how cool it is. But the real masterstroke is monetizing premium membership with must-have digital articles that have a ZERO marginal cost of production.
However, when you review the stats below on membership, you can’t help but a little alarmed at the rampant commercialisation of our kids - particularly when it’s my wallet that’s burning!
VIRTUAL WORLD NUMBERS
Habbo - 90m accounts
NeoPets - 45m accounts
IMVU - 20m accounts
Club Penguin - 15m accounts
Star Doll - 15m accounts
Gaia - 12m accounts
Barbie Girls - 12m accounts
Source: K Zero
Florence is reading this blog as I write, so she can close it (by the way, she also wanted her own Google reference, so Florence this blog’s for you!)
Disney should make it completely free, and they could make some money from advertising
Way to go Flo!
Another plug for Google Webmaster tools
If you want to find out how Google’s viewing the inbound links to your site, and if there’s any problems indexing your site, you should start here: http://www.google.com/webmasters/
Raef fired, and SurAlan’s a great Ad man
I know, I know, I shouldn’t watch programmes like The Apprentice expecting to see good business practice. But this programme’s beyond a joke. SurAlan’s become a caricature of a business model that is dead and dying. Last night’s advertising fiasco is the best example yet of why SurAlan’s world is disappearing.
In case you didn’t watch it (there was a bit of football going on), both teams had to design a branded box of tissues and flog in a TV and newspaper Ad. Lee’s efforts would have scored him a grade D in GCSE English, and the garish orange box won, because SurAlan liked the pack-shot.
This is the old-fashioned TV-industrial complex, where average product is forced upon consumers, until enough average punters yield, and money is made. In the new world, we *should* sell what consumers want, not what we think they want.
Raef’s team produced an ad with narrative, an ad that you might just avoid skipping. Everyone ignored the fact that 80% of TiVo owners skip ads, and that ads must be compelling in their own right to avoid being skipped. I couldn’t believe that the so-called ‘Ad professionals’ also ignored this fact. The reason, of course, is that old media advertisers are clinging on to a dying empire, and dare not admit that a great big orange box shoved in the viewers face, might not work.
Still, it’s damned good television.