Tag Archives: online marketing

11
Nov

Marketers look to be succeeding with customer data and have pressing needs to consume more

Posted by | Categories Social Media | Tagged , , , , , ,

During Facebook’s Q3 2014 Earnings Conference Call, Mark Zuckerberg, CEO reported $3.2 Billion gross revenue for the quarter, and a 64% year over year increase in their advertising business. In contrast, Google, as Patrick Pichette, Senior Vice President and CFO reported during its Q3 2014 Earnings Conference Call, experienced merely a 20% year over year increase in total revenue from its Sites business and only a 9% year over year increase in its Network revenue.

So it looks like a fair question to ask what’s up at Facebook? From a teaser summary this writer found on the web site for MIT’s Sloan Review, titled How Facebook is Delivering Personalization on a Whole New Scale, Blake Chandlee, Vice President of Global Partnerships at Facebook pointed to customer data as a very valuable asset Facebook has, apparently, learned to monetize much more successfully than Google.

Customer Data includes “[o]nline [c]hatter” (quoted from another short summary on the MIT Sloan web site, this one titled “Online Chatter is Big Data Gold”. The short piece was written by Leslie Brokaw and published online on October 27, 2014). Online Chatter is the stuff users produce when they post to alerts, interact with friends, etc on Facebook. All of this takes the form of unstructured data, which, in turn, has to be manipulated and given shape with tools developed for the big data trend.

The tools are not the subject of this post. Rather, what this writer finds to be important is how Facebook’s reported growth is emblematic of the success its customers have achieved using this “online chatter” to their advantage. Unstructured data, precisely as the MIT Sloan precis presents it, is becoming a very valuable asset.

One can argue this trend is not new. As far back as year ago, ostensible Facebook competitors AT&T and Verizon were said to be jumping into the same market (interested readers may want to check out an online article titled AT&T joins Verizon, Facebook in selling customer data). But not all customer data is the same. It isn’t likely either Verizon, or AT&T can produce the same treasure chest of “online chatter” to rival Facebook.

But Twitter certainly can and appears to be moving in the right direction with an announced first partnership with IBM. We just published a post to this blog yesterday on this announcement.

Google certainly has an enormous repository of a type of unstructured data in its GMail service. Assuming they have access to a comparable capability to anonymize the data, then, one might argue, they are prepared to go toe-to-toe with Facebook. But the contrasting sales growth numbers from the two quarterly reports mentioned at the top of this post point to a looming problem for Google — email just doesn’t seem to be producing as useful a set of customer data. How else to interpret the differences in growth? Pity Google + is not doing better. Google + failure is a big deal and likely to emerge as a major obstacle Google will need to fix.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

11
Aug

Twitter and Other Cloud Businesses Benefit from Investor Enthusiasm

Posted by | Categories Cloud | Tagged , , , , , , ,

Twitter and its Cloud business peers are benefiting from highly enthusiastic investor sentiment. Investors appear disinterested in a widening distance between GAAP and non GAAP earnings results for these businesses.

Sandra Ward illustrated some of this disconnect last Saturday, in an article published in Barron’s Online titled Twitter’s Results: Less Than Meets the Eye. She writes: “Using generally accepted accounting principles, or GAAP, Twitter (ticker: TWTR) lost 24 cents a share in the second quarter, but it played up a non-GAAP measure that showed a two-cent profit, versus the consensus of a penny loss.”

As of the date of this blog post, August 6, 2014, a loss of $.24 per share for Twitter, amounts to $141.585 Million, USDs. This loss is actually 45.38% of all of the revenue ($312 Million, USDs) Twitter generated for the quarter. One would think investors would care about a company losing almost a dollar of every two it brought in for the quarter, but they appear not to have cared. By the time trading resumed on Monday, August 4, Twitter closed at $43.45, a mere 1% below its closing price on Friday, August 1, 2014.

While the primary driver of investor appetite for Twitter still alludes this writer, it is, perhaps, safe to assume a lot of momentum can be attributed to investor satisfaction with the non GAAP presentation of the same quarter’s results, namely the mirage of the 2 cent profit Ward notes in her article. Perhaps investors are now convinced management has “gotten the message” and subsequent quarters will continue to show profits, albeit on a non GAAP basis. Hasn’t this been the case with Facebook, which is often characterized as a direct competitor to Twitter? After all, quarter after quarter, Facebook has reported profits over the last couple of years.

What is likely to be of greater concern than this excessive investor enthusiasm in this social media business bleeding cash, (which has now opted to highlight its results, as expressed according to non GAAP) is their complacency. Maintaining confidence this business “will eventually get it right”, simply as the result of throwing cash at its problems, doesn’t make sense to this writer. When one looks at the overall market for these types of publicly traded businesses, one likely will conclude the whole sector is simply too inflated, at least at present.

Disclaimer: I am neither invested in Twitter, Facebook, nor any other social media cloud business at this time.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

8
Aug

PPC Online Advertising May No Longer be the Solution for Products Targeted at Specific Market Niches

Posted by | Categories Online Marketing | Tagged , , , , , , ,

Back in the late 1990s, a number of advertising agencies (Poppe Tyson and ModemMedia being just two) extolled online marketing as uniquely capable of providing marketers with a method to truly personalize presentations of product promotional information for highly specific market segments. Poppe Tyson’s promotional literature talked about something called “the considered purchase”, meaning a type of lengthy consideration a certain cut of buyers will undertake to carefully study potential solutions to a burning need, and why online marketing was the perfect venue to provide these prospects with information tailored, specifically, to appeal to them, and them alone. The epitome of this notion is the concept of “Marketing 1to1”, which Don Peppers and Martha Rogers, Ph.D, coined around the same time.

But now, in 2014, all of these notions may amount to little more than hyperbole, at least if an article titled How Facebook Sold You Krill Oil is credible. The article recounts the efforts of a Mr. Joao Rodrigues to determine if a marketing campaign on Facebook, which he has been considering for his product, something called Mega Red Fish Oil, would ” . . . help him find people who were already buying fish oil or other products that suggested they were concerned about the health of their hearts, and perhaps persuade them to switch to his brand.” (quoted directly from Mr. Goel’s article, as published on the New York Times web site)

As I read it, Mr. Rodrigues’ question is never directly answered by the team from Facebook, or the agency recommending the Facebook network of web sites as the perfect venue for Mr. Rodrigues to obtain the reach he required. But implicit to the rest of the article is the notion he cannot obtain those results, at least not through promoting his product on Facebook.

All of this should certainly be a big deal for anyone thinking about an investment in Facebook, or in any of its competitors. The enormous market capitalization each of these companies has achieved is built upon a set of assumptions likely to include a conviction they are uniquely capable of delivering a winning solution to Mr. Rodrigues’ requirement. If they are not able to deliver, as expected, and some significant portion of potential advertisers begin to realize this limitation, and opt for other methods, this same market capitalization may deflate very quickly.

Disclaimer: I have no investment in Facebook, nor in any of its peers

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

30
Jun

Gallup Poll Results on U.S. Consumer Buying Habits Support a Skeptical View of Social Media Business Valuations

Posted by | Categories Social Media | Tagged , , , , , ,

Public companies in the Social Media business (facebook, Twitter, LinkedIn, Google, etc.) have all implemented global business strategies. Nevertheless, some substantial proportion of the business plans for each of these businesses, over the next near term, depend on sales to advertisers for the U.S. consumer markets. But the results of a Gallop® report on the buying habits of U.S. Consumers, published on June 23, 2014 may point to excessively optimistic revenue forecasts in these plans, and, in turn, even more inflated business valuations than previously appeared to be the case.

Here are some important points coming out of this report:

  • 62% of a cross section of respondents to the survey reported Social Media had “No influence at all” on their purchasing decisions. Two caveats on this statement should be noted: 1) the numbers of respondents from each of four groups — “Millennials”, “Generation X”, “Baby Boomers”, “Traditionalists” — are not included in the article about the report, which is now widely available to the public (a link to the article is included in this post) and 2) despite a landing web page for the report, itself, the landing page does not offer the visitor any access to the report, so it is not possible to explore the report, at least at the time this post is being written
  • But this percentage drops to 48% of “Millennials” who responded to this survey. “Millennials” are defined as people born after 1980.
  • Only 5% of a cross section of respondents reported social media exerted “A great deal of influence” over their purchasing decisions. The percentage rises by 40%, to 7% when only responses from “Millennials” are considered.

In Facebook’s 10Q filing with the U.S. SEC, dated April 25, 2014, for the three months ended March 31, 2014, 45% of total global business revenue for the quarter was reported for the United States market, alone. The sources of revenue are clearly defined in this report as follows: “We generate substantially all of our revenue from advertising and from fees associated with our Payments infrastructure that enables users to purchase virtual and digital goods from our developers with applications on the Facebook website.”

Given the claimed results included in Gallup’s report, it might make a lot of sense for investors to recalibrate the cost of an investment in Facebook. In the opinion of this writer Facebook is grossly overvalued, as are most of its peers in this segment. Online advertising is simply better suited to the promotion of tangible items, or intangibles highly dependent on tangible factors, (for example, geographical location) than it is for purely intangible offers.

Since the range of items suitable for online promotion is, therefore, limited, the extent to which valuations have been inflated is even more extreme than this writer previously assumed to the be case.

Disclaimer: I have no current investment in any of the businesses mentioned in this post

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

14
Apr

IBM Acquires Silverpop — Just How Big a Market is Online Product Promotion?

Posted by | Categories mature tech business | Tagged , , , , , , , , ,

On April 10, 2014, IBM® published a press release about its intention to acquire Silverpop. Perhaps it will be useful for readers to consider the importance of this acquisition from a couple of different angles:

  1. How, if it all, could Silverpop leverage other components of IBM to deliver substantial return on this investment?
  2. How big a market are we talking about when we consider Silverpop’s niche?

1) Does Silverpop’s stated business model promise to leverage other IBM components? and does this synergy look like a promising, substantial, net positive contributor to IBM’s bottom line?

The answer to the first question is “yes”:

  • Silverpop presents what I would read as the core of its market message in a short video available for viewing on its web site. This video (which speaks to the efforts of marketing communications teams within a larger business) contrasts the telltale emblems of a mediocre marketing campaign (without Silverpop), to a personalized campaign, targeted to prospects (presumably with Silverpop’s software). IBM’s Watson could be the perfect complement for Silverpop, promising to provide a much higher level of personalization than could be achieved via other methods.
  • Cognos, and other pieces of IBM’s data analytics offer can add more value to Silverpop as clients look for metrics on campaign performance, and more
  • finally, a quick glance at Silverpop’s client list reveals a number of firms where IBM’s consulting teams are likely to be already established, and trusted providers.

Should IBM provide Watson and its data analytics tools as a backend to Silverpop, then corporate marketing communications should be able to produce, over time, a number of useful case studies, success stories, etc. illustrating how this backend played an essential role in the effort.

How big is Silverpop’s market?

The answer to this question is, in my opinion, “not big enough”. I point to an article written by Jack Hough, and published on the Barrons web site late last month: Google, Facebook, Twitter: Not Enough Dollars to Go Around. Keep in mind: Silverpop’s niche is a subset of the online advertising market, and, necessarily, of a much smaller size. Further, Silverpop has a couple of competitors in its market, Marketo and Oracle’s Eloqua. So, even if one assumes Silverpop emerges as the market leader, the actual contribution to IBM’s broad revenue performance may not be substantial.

Bottom Line

Nevertheless, IBM needs methods of demonstrating the power of Watson and its data analytics tools to the much larger enterprise business market for business intelligence solutions. The Silverpop acquisition promises to give them another show piece for this effort.

Disclaimer: I have neither a position in IBM, nor any verified statistics to substantiate claims I make in this post

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

25
Mar

EMail Marketing for Small to Medium Sized Businesses Shows Some Troubling Signs of Diminished Usefulness

Posted by | Categories Online Marketing | Tagged , , , ,

My recent experience, on behalf of clients, tells me email marketing remains one of the most important online promotional tools available to Small to Medium Sized Businesses (SMBs), here in the US.

But I’ve noted some technical limitations, which lead me to recalibrate, upwards, the amount of effort required to put together a truly productive email marketing campaign for SMBs. It may be helpful to frame the obstacle as follows:

Email marketing is no more, no less than a method of engaging with market participants who, at some level, should be considered sales prospects. So the only meaningful performance metric I know of for this type of campaign is the number of responses received from recipients.

If an HTML email marketing campaign touches 1K recipients, but stimulates only 5 responses (1/2 of 1% response rate), then, it is surely safe to conclude the campaign required a considerable amount of effort vs. the return. An SMB with a 15K email address database can only run a campaign, like the above, 15 times. If the pool of responses at the conclusion of all 15 campaigns amounts to only 75 responses, and sales closes 5 – 7 $10K orders from all of the effort, then it may be safe to conclude the return on investment is marginal (of course all of this depends on the annual revenue produced by my hypothetical SMB, average sales price, etc.).

Usually, I will advise a client to then look to a tool like VisualVisitor, which can be configured to identify web site visits resulting from a click on a special hot link included in an HTML email message, to point out recipients who opted to visit a web site in lieu of actually responding to the email message. This method exposes additional opportunities for sales teams. The additional benefit from this approach can be considerable.

But HTML emails are required to obtain the added benefit from implementing links with VisualVisitor tags. In my opinion HTML emails contribute, substantially, to recent ineffectiveness of email marketing campaigns for my clients. Markets are looking for a personal email message, which is best achieved with plain text. I haven’t yet experimented with adding VisualVisitor tagged links to plain text email campaigns and have no plans to do so in the near future.

I do plan on speaking with the technical team at VisualVisitor to see if there is any precedent here. In other words, has anyone used the tags in plain text email messages? If you have an interest in this topic and would like to follow it, please contact me.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

12
Feb

Tagging Mass eMail Campaigns to Track Visits by Recipients to Target Web Sites and Pages

Posted by | Categories email campaigns | Tagged , , , , ,

Online marketing is a big business, powering the efforts of large and small businesses, alike. The objective is to cash in on the potential benefit of a very low cost direct marketing campaign, light on the printing and mailing cost, but high on the return on investment. But for one reason or another these efforts often fail.

The missing piece is the otherwise anonymous nature of communications across the internet. The network powering web pages, Ethernet over TCP/IP, simply doesn’t support the handshaking, error checking, etc., which would be required of a data communications protocol capable of supporting the type of clear, point-to-point communications online marketers definitely need. Ideally, such a system would help consumers learn more about just who is responding to a mass email, etc.

Enter VisualVisitor and Salesforce.com. These two cloud solutions can be used, together, to provide any size business with a very effective method of sending targeted mass emails and tracking web site visits by specific campaign recipients.

Certainly some mass email management services can make similar claims. In other words, a service like iContact® offers subscribers the option of tagging campaigs to show:

  • eMail opens by recipient
  • and clicks on web page links by recipient

But what iContact, and comparable solutions, cannot do, is indicate visits by email recipients over time. Nor can these services provide web site visit information of email recipients clicking on embedded links who then proceed to look at other pages on a website. For any business marketing intangibles and complex solutions, this latter information is very important and highly useful.

I can personally attest to the usefulness of VisualVisitor and Salesforce.com for the purpose of closing the loop on 1) Who received my email campaign?, 2) Which campaign recipients came to my web site? and 3) What’s the historical record of visits to my web site by these recipients?

If you would like to learn more about how these two SaaS offers can be used together, please contact me.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

16
Jan

Tools Like VisualVisitor Promise to Boost the Value of Online Marketing Campaigns for SMBs

Posted by | Categories Online Marketing | Tagged , , , , , ,

With increasing frequency industry analysts are drilling down to some disturbing characteristics of online marketing. Not the least of these is a pessimistic, but nonetheless popular, conclusion about the likelihood of engagement with website visitors — or the lack of it. The unfortunate consensus is website visitors are much less likely to engage with online promotions than promoters would hope them to be.

Solutions like VisualVisitor can be very useful tools for online promoters in need to accelerating the timing of opportunities to engage with website visitors. If lead generation solutions like Marketo and Oracle’s Eloqua can attract substantial investor interest, I can’t help but think businesses like VisualVisitor will soon follow.

The lack of engagement issue is actually a very big deal for online promoters. Google’s recent investment forays into business sectors otherwise completely disconnected from its core online advertising revenue generation machine leads me to suspect click ads aren’t delivering the profits they used to. If I’m right on this point, then at some level the reason for profit drop has to be attributable to changes in customer behavior. Google’s online advertisers are largely made up of the same SMBs (Small to Medium Size Businesses) engaged with high effort/comparatively low return online promotion campaigns. This base is primed for offers capable of delivering the missing engagement component.

My clients use VisualVisitor to reduce the length of the sales cycle for bigger ticket tech product buys. The website visitor recognition service VisualVisitor provides is especially effective for re-connecting with existing customers. We recently identified a website visit from a past subscriber to one of my client’s SaaS offers. When we reached out to the key customer contact we were pleasantly surprised to find the visit was actually made by this person, who immediately disclosed to us an interest to double the size of an expired past subscription. Needless to say my client was very pleased.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

17
Dec

On Recent Enhancements to the VisualVisitor Anonymous Website Visitor Recognition Service

Posted by | Categories anonymous website visitor tracking | Tagged , , ,

VisualVisitor is a comparatively low cost option businesses can use to mine more information from visits to their websites. At $39.00 per month, the subscription should be within the reach of most businesses. Some recent enhancements to the product are worth a mention.

The visit report template now includes historical information. So sales team are not only notified about current visits, but are also presented with a summary of earlier visits, from the same internet end point, to a given website. Knowing who’s been to your website before, and the amount of time between visits can be useful information. This historical information is also valuable as a method of determining return on investment in email marketing campaigns. The VisualVisitor tagging system can be incorporated into email campaigns, to provide a richer set of data about email recipient behavior.

Customer service organizations should welcome this feature. If, for example, specific information has been exposed on a website to mentor customers about important product features, then a review of historical visit information should determine whether customers are finding the information, and using it as intended, or not. The process of modifying the way information is exposed on a website becomes much easier when data, like the VisualVisitor historical information, is available to test assumptions. Certainly any organization benefits when no more than a few modifications need be made to website branding to deliver a targeted visitor experience. Best of all, less work usually translates into lower costs.

There are many other variations on the above example likely to be attractive to businesses considering a solution like VisualVisitor. A free trial is available, which may be the “right way” to determine whether or not this service fits with the needs of your specific business.

We have clients actively using the service, and can attest to its value.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

1
Nov

Just What Costs are Included in Google’s Traffic Acquisition Costs?

Posted by | Categories Online Marketing | Tagged , , ,

Google’s Q3 2013 earnings report includes an important section titled “Traffic Acquisition Costs”. Google has offered a definition of these costs. The Google definition of Traffic Acquisition Costs is very specific to the “network” component of their revenue. Google’s network affiliates receive payments based upon operational terms governed by contract.

So these costs should directly correlate to the “network” segment of any quarterly earnings report for this business. For Q3, 2013, the “network” revenue component posted a decline in revenue by approximately 1%, but the “Traffic Acquisition Costs” declined by approximately 1.3%. Is it safe to say the network affiliates are under some pressure? How else to account for a reduction in these costs exceeding the commensurate drop in revenue production for this component?

If this is the case, then analysts may want to dig a lot deeper into these numbers. If Google benefits more from its search revenue component, which operates wholly on its own websites, and, further, Google appears to be making very serious efforts to accelerate the efficiency of its network business, then perhaps the value of its pay-per-click and pay-per-thousands of impressions products has deflated more than otherwise appears to be the case. Personally I think this view, that the standard Google ad products are not delivering on their expectation, is the case.

I would add to the above information some observations on the amount of effort Google is expending to ensure the success of SMB advertiser campaigns. Via its “Engage” agency program, Google has been maintaining human support resources, accessible to any advertiser, via telephone contact, for several quarters. This program, alone, likely adds a cost component of some magnitude to their advertising products and, therefore, diminishes the profit margin.

Finally, it would be good to get some ideas as to the costs of the Analytics product. This product has a hefty price tag for enterprise customers, but the free version, which appears to be the method by which most users avail of this product, requires a lot of infrastructure and periodic systems development.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved