Adam Jewell - Search & Affiliate Marketing

There is some business value in social media but for most large corporations, it seems to be more of a distraction than anything else. Twitter.com (www.twitter.com) and Facebook (www.facebook.com) are the two big social sites at the moment now that the MySpace (www.myspace.com) craze has died down.

In a recent Best Buy job posting, Best Buy put a requirement in it to have a Twitter account with 250 followers. Chances are if you have a Twitter account and 250 followers, you’ve been on Twitter for a while and have something to say that people might be interested in. On the other hand, some percentage of the Twitterverse is just a bunch of bots with fake pictures that scan user messages (Tweets) and follow them in the hope that they’ll be followed back and be able to hawk MLM, weight loss, penis pills, porn or something else. Many times, however, if you get followed right back it is just another bot on the other end.

Companies might do well to see if people are knowledgable in social media but requirements for a set number of followers on Twitter or friends on Facebook seems a bit odd.

Simply by posting nonsense messages on Twitter about weight loss, work at home, MLM and other high spam areas you can build up a worthless profile with lots of bots following you that will fulfill the requirements laid on out the job but be meaningless and absolutely useless.

People who really understand these types of things are the ones companies like BestBuy should be hiring especially if they don’t yet have anyone there who does.

The other question it begs is WHY? Why would it matter how many followers a person has on Twitter? The WHY question needs to be asked a lot more in business these days. It seems like 90% of the stuff most businesses do is unnecessary, unneeded and a big waste of time. Welcome to the Internet!

You can go follow BestBuy on Twitter.

Recently, the online retailer Zappos (www.zappos.com) decided to hire an agency. They put out an RFP to 16 agencies. Even 16 agencies seems like a lot. When word got out that Zappos was searching for an agency, lots of other agencies wanted the chance to pitch. In the end< Zappos said sure, why not and opened the pitch to more than 100 agencies. Apparently one of them (Ignited) was upset that Zappos did not seem to spend much time reviewing the pitch.

To evaluate even four agencies takes a lot of time, let alone more than 100! There is no possible way that anyone (or at least the add-on) agencies beyond the original 16 should really have expected to get serious consideration. In a process like this, it is just not practical for a company to go through that many proposals in any kind of detail.

In pitches I’ve been involved in, there are usually at most 5 agencies in the consideration set who may receive serious consideration from a client. From an agency perspective, how woud anyone think it made sense to be one of 100 agencies to pitch Zappos or most any other business for that matter? Granted, times are tough and if the agency has excess capacity, then maybe it makes sense to put some resources toward this pitch, however, pitching Zappos is likely to be unlike pitching most other accounts. Zappos has a unique culture, a unique way of operating and is extremely savvy in the socaial media space. They’ve run a huge affiliate program for years and have built one hell of a brand seemingly without to much outside help.

(Prospective) clients almost always get a great deal during the pitch proces cause they get some many cool new concepts and ideas. That just how the whole pitch process works. If they had sent out an RFP to 100+ agencies and not made that clear to all who received the RFP, then maybe the agencies would have a legitimate gripe about not getting as much attention as they would have liked. It sounds like the agencies all requested to be part of the selection process, to which Zappos agreed and informed the agencies of the tight turnaround time and the stiff competition.

Unless your company is going to spend a year evaluating agencies, there is no way it is worth trying to take the time to view proposals from 100+ agencies and even 16 may be a bit much. If you are an agency, chances are it is not worth your time to throw your hat in the ring when 100 other agencies are pitching for the same business unless it is to get your employees experience in developing pitch materials.

Finally, in ANY pitch in ANY business, the client is usually thinking WIIFM - What’s In In For Me? If that is not clear in the first few pages (or even first page) of a proposal or RFP response then the client will probably not continue through the proposal especially if there are 99 more of them to go through.

When you run online media programs do you know what you are really getting or paying for? Over the years behavioral targeting or “BT” as it is often referred to in the industry has become an extremely popular method of targeting these programs.

There are many diferent definitions of “BT” and what media vendors call BT. Some are as simple as tracking people who come to a website and do or do not perform a specific action. When the person visits a site within the ad network, that person is shown banners for the site that is running the media campaign. A company might want to follow people around the web who have been to the site and not checked out with the shopping cart, they might choose to (re)target all consumers who have been to a website or even specific pages of a website.

Some more advanced types of behavioral targeting may pick up demographics of an individual including age, sex, marrital status and income among other things who have been to certain sites or categories of sites and have (or not) performed certain actions online and target those consumers with ads for a particular product or service.

If you have a home computer and your wife shops at Lane Bryant, when you log onto the computer and get shown Lane Bryant ads on all the sports sites you visit, it is because one or more ad networks are tracking and recording the activities perfomed by the Internet browser on your computer.

Typical click-through rates on banner ads these days are about as close to zero as you can get in most cases. This is especially true for banners on general content sites. Even banners that are behavioraly targeted often get click-through rates just that are just a fraction of 1%.

In traditional media where nothing (or very little) is tracked and it is primarily demo targeted impresions that are purchased, there is no expectation of any direct response to the ads since they are simply broadcast to consumers.

With all the tracking capabilities available on the Internet it is possible to show the return associated with banner advertising. Whether it is a good investement or no depends on how it is measured. When you run a PPC search campaign on Google, Yahoo!, MSN, Ask.com or one of the other 3rd tier engines, the success of the campaign is generally measured by the amount of sales revenue generated in relation to the amount spent on advertising. Sales are only tracked when people click-through the ad and subsequently make a purchase, fill out a lead form or perform some other activity that takes them a step or two closer to completing a transaction.

In order to justify the cost of media campaigns when nobody actually clicks on the ad, the “view through” metric was concocted by the ad networks and media companies to attribute credit to the media campaign. If someone merely loads a page with an ad on it (whether they view it or not in many cases), the ad server sets a cookie and if a person subsequently makes a purchase within the duration of the cookie window (typicall 30 to 90 days), then the media campaign is credited with the sale.

This brings up the question - if the consumer has already been to the website and not made a purchase, would they have purchased regardless of whether or not they were subsequently exposed to the banner ad? It is likely that there is some lift, but it it anywhere near enough of a lift to justify all the costs associated with a media campaign?

While there are tons of “studies” that say banner/online media is effective (all put out by the the ad networks and companies that stand to profit when you buy online media), it doesn’t seem than any neutral party has evaluated whether onine media really has a significant effect on consumer behavior.

If anyone really wanted to test out the effectiveness of online media, at least from a retargeting perspective, they could run a test in the following manner.

Pick a site with significant site traffic such that a large retargeting pool would be available.
Setup the campaign as one normally would with all the different actions and behaviors that result in a consumer falling into the retargeting pool
Serve the banner to half of the people in the retargeting pool
Set the cookie that would normall be set when a person views a banner but not show the banner to the other half of the retargeting pool
Look at the difference in behavior between the people who were exposed to the banner and those who were cookied as if they say the banner

If there is a significant lift in sales or other conversion events associated with the portion of the retargeting pool who were served the banner and not just cookied, then we can infer that the media campaign had a positive effect on consumer behavior and quantify the value. If there is no statistically significant difference between the two groups of consumers, then we conclude that the media campaign had no positive effect on consumer behavior.

Other variables including the creative, the number of impressions served per person and the frequency with which they were served and the length of the campaign would obviously affect the results, however the campaign could be let to run long enough to determine at what threshold of campaign frequency and duration is required to see some noticable difference. Is there an ad network out there that would run an experiment like this and agree to publish the results regardless of what they were? Probably not since it could rather conclusive prove that either onine media does not work or that the size and scope of the campaign would need to be so big that all but the largest brands with multimillion dollar budgets would be wise not to invest in an online media campaign.

According to the Twitter Blog, Twitter just closed another round of financing with Benchmark Capital and Institutional Venture Partners. While the revenue stream is still a mystery and yet to be tapped, this sounds like it will give the Twitter team of 29 people room to grow and create a strong platform for a bigger ecosystem to develop around Twitter.

As the end of the year approaches, it is time to look into the crystal ball and make predictions about what will happen in the industry in the upcoming year in 2009. Given the state of the economy it is going to be a wild year with lots of opportunity for those who choose to take advantage of and a grim year for those that choose to ignore the Internet and the way it has fundamentally changed commerce.

Predictions for 2009:

1) Many companies will go bust because a recession/depression and the associated decrease in consumer demand, the credit crunch and other economic forces will separate the smart, focused, efficient businesses that have adapted to the web from those that simply refuse to see what is right in front of their own noses.

2) Pay for performance (aka affiliate marekting models) will continue to thrive and maybe, just maybe, the corporate folks will take off their blinders, stop “branding” and start listening.

3) Big global media agencies and the media properties they spend a lot of money with will struggle. Agencies and media properties will lay off tens of thousands of people because they are unable to adapt to the new consumer driven marketplace.

4) There will be little if any growth in most online advertising including search and online display media and there will be huge opportunities to stock up on the stocks of the likes of Google, Yahoo!, Amazon and other online pure plays that will be the future of the economy. That lack of online advertising spending growth will not be due to lack of opportunity but the lack of companies to figure out how to effectively use the medium in front of them.

5) 2009 will be the “baby boom” for Internet companies. With potentially millions of layoffs in all sectors and tens or hundreds of thousands in the tech & Internet sector, there will be lots of fresh fertile minds with no mindless job sucking the life out of them who will stop looking for a job and instead create their own opportunities and build new companies.

6) Lots more companies will test the waters of social media only to be able to track little to no ROI from social media. Since social media is still considered “experimental” and it is hard to quantify the value, enthusiasm for it will wane even though tracking the value of billions spent on traditional media is something most companies are unable to do.

7) Companies that utilize the search data in front of them, rebuild their sites (and maybe their businesses) based on search data and personas and deliver sites, products and services demanded by the marketplace will thrive and may grow exponentially.

YouTube and other video sites will start to have some real live shows and “channels” that can attract real advertising revenue that may deliver an ROI for the advertisers.

9) This will be the make or break year for smaller online agencies. A tight economy will force them to get their shit together or go out of business unless they purposely choose to stay small and focused on core services that are demanded by the marketplace.

10) Omniture and to a lesser degree other analytics vendors will be acquisition targets simply because of all the data they have and will be able to command a nice premium over their current stock or estimated private values.

11) Microsoft will continue to struggle on the web but may be able to buy other companies that will being in fresh thinking, new minds and new perspectives that can help them be less dependent on packaged software sales.

12) The X-Box may become Microsofts strongest foray into the online world and enable Microsoft to finally get a foothold in the Internet even though their search business will continue to flounder.

13) CPG, financial and other large companies with huge brand budgets will continue to struggle online. When the top management is either replaced or becomes willing to listen to the up and coming Internet savvy junior level employees or consultants, there will be a HUGE demand for quality site design, development and marketing services that actually help sell cases and financial services products.

14) The number of research and analytics tools available in the marketplace will continue to explode. Some will be very useful but only a select few people and companies will be able to figure out how to use the data in front of them.

15) The basics of the Internet won’t change and the companies that embrace them will thrive. The basics include: fast download times, relevant ad and website copy, creating sites and businesses based on consmer demand and not on “branding” push, simple, easy to use navigation and site design and adopting a conversational approach to marketing (instead of just talking about it).

If you want to thrive in 2009, just get back to basics. Remember that your Internet marketing should start with your site, not with your marketing. Make things fast, easy and intuitive for those people you are trying to reach or sell to. Re-read the ClueTrain Manifesto and pay attention. It is more accurate now than ever.