Archive for April, 2008
IAC earnings, Todays Online Economy
Posted by Jamie Hutson | Filed under Small Businesses, advertising, analytics, marketing, measurement, revenue models, web 2.0
IAC reported its first quarter earnings today, with revenue up 22% and income up 15%, you could say that they had a very good quarter considering the gloomy shadow over the economy in that period. Most of this is due to their Media & Advertising division which saw a 192% increase in income. The Media & Advertising division consists of ask.com, CitySearch and Evite along with their other online properties (exluding Match.com). This substantial growth can be contributed to a few things, but most notably I would point out this shows that the online advertising space is positioned to grow very nicely, particularly in the current economic climate.
The fiasco resulting from comScore’s under reporting of Google’s clicks was a good representation of how the internet is still new to many big players. ComScore, regarded as the primo player in online measurement published a report that tanked Google stock, sent online agencies and publishers into a panic and threw a shroud of false gloom over the entire industry.
While our company has seen a cutback in spending from some of our advertisers, and hesitancy from new clients to invest their marketing in a new space, for the most part we have seen healthy earnings growth, an expanding customer base and a large increase in traffic. A good friend of mine running a leading e-tailer of health products and services saw revenues up 38% yr/yr in Q1 of ‘08. Our company doubled revenues over first quarter 2007. Online is up and its good.
Today the US economy reported a modest .6% growth. “NOT TECHNICALLY A RECESSION”, “THE US ECONOMY SLUMPS THROUGH 1ST QUARTER”, “INVESTORS SEE RECESSION, WALL STREET DEPRESSION” - those were the various headlines across the internet. I did a quick search and found that every major news outlet had some sort of dreary publishing of this not so bad news. The Dow is up .9%, the NASDAQ is up .4% but everyone is running around declaring the bad news.
People are smarter than this (some people anyway) but its hard to ignore the warnings. I see people making smart decisions with their marketing money, which is basically me saying “I see people spending their marketing money online.” The yellow pages are dead, and even the YPs are building their online presence. Google’s huge numbers are back in peoples mind and small businesses want to be a part of that success. Money is being spent, and thus money is being made - online. Thats where the people are going and thats where the budgets are beginning to gravitate.
I saw a segment from Lewis Black last night where he was mocking the younger generations for spending hours online each day. I like Lewis Black, but he went on a rant that just was not funny to me. He sounded like someone from the Prohibition era talking about how young people spend all their time in bars, drinking. Well Lewis, its not just young people, and we aren’t just making fake friends on MySpace. We (meaning people who use the internet) are finding information, researching purchasing decisions, exploring entertainment (music, video, even TV) and building our network of contacts. I find it ironic that you can watch Lewis Black on YouTube, talking about how people waste their time on YouTube. Hey Lewis, how would you feel if I told you that 30% of the people who watch you speak, are watching you online??
Lewis Black has nothing to do with what I’m talking about, but everything. The online economy is heating up, profits are up, more people are online and more transactions are being made and researched online then ever before. The majority of these companies are seeing great profits and surging business opportunities. The old market is not what it used to be - The World is Flat and we can’t just keep measuring things they way we used to, otherwise everything will look all messed up.
Kind of like when the economy shows a better than expected growth rate, and thats a bad thing… what if we excluded all these online and new media companies from that number - how bad would it be then?
Engagement! (ooh buzz word)
Posted by Jamie Hutson | Filed under analytics, marketing, measurement, sharing applications, social media, web 2.0
The term engagement is flying around pretty freely these days. How do we measure engagement? Can we measure engagement? What exactly is engagement? Well, if none of these people know, then how do we go about defining it, measuring it and building a model to capitalize on engagement?
My take on engagement falls similarly to what Lester Wunderman wrote about engagement. I would define engagement as: Choosing to interact or involve yourself in something. That something can be a website, a brand, a store, a blog, or a television station. The interaction or involvement can be a comment on a blog, a post in a forum, a complaint or experience card in a restaurant, changing the TV chanel, speaking with a floor salesperson at Target. Engagement is interaction with a brand or service by choice.
The web, especially 2.0, as brought the world the ultimate (to this point) platform for engagement. People spend hours a day online, engaging themselves with different brands, different sites and people from all over the world. Search engines allow us to target our engagement even further - they bring us a higher degree of engagement, we make a conscious decision to search for a topic, and then choose to visit one site over the other and spend our time engaging that site.
I believe this engagement will soon be the best measure of an advertisers campaign online. I’m not quite sure how it will work, but measuring engagement is a great way to get a sense of if and how people are interacting with your online campaign.
Here is a “For instance”, if Coca Cola creates a virtual world, and they measure engagement by counting how many people create an avatar, and then compare that to how many of those people come back and use that avatar again, Coca Cola could then measure engagement as a function of ‘# of avatars, frequency of use, and abandonment.’ (Lets say: 1000 avatars created; 600 came back 2 or more times; 200 never came back; your level of engagement could be 600/(1000-200) or .75.) This can be interpreted however you want (in this world of spin we live in - who knows..) perhaps you could use this to say that 75% of the people who responded to your promotion where “relevantly engaged” and 20% were not. I don’t know if this makes any sense to marketers and I’m sorry if I lost you…
Or you could measure engagement by counting interactions purchases, perhaps a redemption of a coupon.
I found myself using engagement in a pitch to an advertiser today, he asked me what I meant by engagement. I said “a website visitor choosing to interact with the site or to take an action that wasn’t necessarily related to why they found themselves on this site.” (I was referring to user submissions as engaging).
After all this I think that maybe engagement is just a different way of saying Web 2.0.
Weekend Tidbits and Discovery
Posted by Jamie Hutson | Filed under Local Search, Mobile, Mobile Web, Syndication, advertising
I came across a few new interesting things this weekend. Here’s a quick overview as I’ve got a busy day and I’m stealing time right now…
Outside.in (http://outside.in/) Outside.in is an interesting example of aggregating local news and information. I discovered some new things happening in Providence, that I wasn’t aware of. It does a pretty good job of collecting different stories from different perspectives and on a variety topics, all focused around local. It does not, however, do a particularly good job facilitating an experience in Providence beyond the discussions being had on their page. Again, their revenue model seems to be based on supplying relevant content and serving your standard skyscraper ads from national brands (that don’t seem to be well targeted).
They claim to have discussions on 11,860 towns and neighborhoods on their site, but most of them seem to be large towns/cities in the Northeast / West Coast. (nothing new there). Anyway, an interesting take on local and I’m intrigued to see where they take it or what I can learn from it.
NY Times Mobile Real Estate: I noticed this ad on the back page of the Business section this morning as I was reading with my coffee. It basically allows you to text the number of a listing in the NYT to their number and it sends you back more details and a link to that listing’s mobile site. I tried it out, but the first listing I sent returned “We’re sorry but that listing is not available in NYT Mobile,” I tried it again and voila! it sent me the name of the property, the location of the property, the price, the listing agent and a link to the mobile site for that listing. The link took me a mobile site about the listing, and had every little detail I could want about the property (photos, taxes, schools, etc).
I think its a somewhat cool implementation of mobile for the NYT, however its not very out of the box. I am still tied to looking up these listing numbers either in print or on their website. A better and perhaps more useful application would be to incorporate location based services into this app and have it feed you back listings in your area. I walk to Chelsea and say, “I want to live here” and the NYT (or anyone else) tells me what is available literally in this area.
Those are my thoughts for the morning, what do you think?…
Targeted Traffic, Bounces and Your Dollars
Posted by Jamie Hutson | Filed under Local Search, advertising, analytics, marketing, measurement
Today’s post comes after a hectic week, many miles of travel and a post by Seth Godin (Silly Traffic).
His post talks about a 75% bounce rate and the value of doing the best you can with the other 25% of the people who actually stay on your site. While I agree that maximizing conversions with the bulk of your traffic is important, a believe that in this day of niche and segmentation you shouldn’t be operating (and probably won’t be for long) a website that turns away 3 quarters of your potential traffic.
We run online city guides. Naturally we target our SEO and our paid links to reach people searching for what our content is all about. For the keyword “Restaurants in Providence, RI” our bounce rate for organic clicks is 8.3% (according to Google Analytics) and our PPC bounce rate for that keyword is even lower - 4.4%. I know those are really good numbers, and we do have entry keywords that bounce 40-50% of potential traffic (sitewide the bounce rate is 38%), but our top 20 keywords all have bounce rates under 12%.
My explanation of this is targeting. While some websites might have hundreds of thousands of pages and millions of products - tons of information, our sites have specific, segmented content that is designed to reach people searching for exactly what we offer. I don’t think any lightbulbs are going off in anyone’s head here, and I’m certainly not the first person/website to target specific traffic, but what are people doing with a website that turns away 75% of your traffic?!?
If you have a site about golden retrievers, and you target your SEO keywords and placement towards anyone searching for dogs, you are missing out on your core audience - golden retriever lovers. I feel like this is right up Seth’s alley, and was I very surprised to read his last post. He brings up excellent points in the second half of his post, but he seemed to contradict himself a bit.
75% of all unfocused visitors leave within 3 seconds.
He then says that “unfocused” could mean a digg link or even a Google search, but that 75% is ok.
The beautiful thing I’ve found about the internet is that you can get people to your site, targeted, focused people, by optimizing your site for certain keywords - in other words, focused traffic. Well I’m quite sure that more than 75% of people searching for “Siberian Buddhist Colonies” would bounce if they came across my site, but why would they come across my site looking for that.
They most likely wouldn’t and if our team is doing our job, they won’t. We want targeted traffic on our sites. People searching for the information our advertisers are paying to have found. So perhaps Godin’s point is overall correct, that you need focused traffic to succeed, but suggesting that it is wise not to worry about a 75% bounce rate is contradicting the whole point of search engines - to find what we are looking for.
We have succeed by building targeted and focused traffic on our sites, and by keeping our visitors on our site longer to maximize potential exposure to our advertisers. Ultimately in our space (my thoughts), you need to build a website that gets focused traffic, maintains a low bounce rate (<20%) and retains these visitors for an extended visit session with quality related content.
Our advertisers’ success is driven around our ability to provide them with targeted leads, and focused traffic. But if 75% of our traffic left in 3 seconds, our advertisers would not be far behind.
A Mobile Weekend
Posted by Jamie Hutson | Filed under Local Search, Mobile, Mobile Web
I spent this absolutely beautiful weekend in NYC. My college roomate’s 25 birthday party Friday night, and an afternoon and evening of exploring the upper east side with my girlfriend. Almost everything we did was facilitated by my mobile device (Verizon BlackBerry 8830). I love this phone, its my second BlackBerry and a HUGE upgrade from my last.
Regardless of the device, we used it for just about everything we did (even a bit of navigating in Central Park). On the train we read about a dozen different reviews to get a sense for what we were in for. We used its GPS functions to give us directions to the Club we went to Friday night (Azza @ 55th and Lex), after we got in the cab. Saturday, we looked up the Pope’s schedule using the browser (yes we saw him in the flesh, along with his 4 block motorcade). Then we found an excellent Brasserie on 79th Street using the Google Maps App. As we waited for our food, we looked at a Map of Central Park to figure out the best path for where we were heading (Belvedere Castle - man what a beautiful day). On our way home, we looked up Movie Showtimes.
The point of this story is that in the past 48 hours I used a mobile device to facilitate 3 transactions, and to find and research essential information that I otherwise would have had to look up prior to leaving my apartment. Each one of those was an opportunity for an advertiser to reach me, while I was interested, while I was about to make a purchasing decision, literally at that moment. How valuable would it have been to the Brasserie across the street from the one I found online? - $38. How much was it worth to Azza to get us there and not have us stop somewhere else? - way more than $38.
Why are people still so bearish about mobile? Nearly everyone in NYC has a mobile device capable of using the internet, millions of people are purchasing them everyday, and the state of Mobile in Japan and in Europe is way ahead of ours. And the Instant return for advertisers must be so appetizing to marketers.
The iPhone, BlackBerries, and all the new broadband capable mobile devices are facilitating easier access to valued information via the mobile web. Once marketers figure out how to reach this growing base of mobile users (which they are beginning to , see Amazon), its going to get hot. And quickly. Mobile has to be the next arena of growth, because everyone else is doing it.
Almost everything I do, I use my mobile device to help me do it better or faster. I read the news, blogs and email. I get directions to my appointments and meetings, I get the latest scores on demand.
There is so much that I do that I am transitioning to my phone. Remember when people started transitioning to the web? I see that happening with mobile.
Defragmentation of Local
Posted by Jamie Hutson | Filed under Local Search, Small Businesses, advertising, marketing
Local search is entirely too fragmented.
Searching for a restaurant can be time consuming, boring, and down right frustrating. Local guide sites are just not up to speed with the pace of the internet, and many are way behind. I want to find menus, dress codes, price ranges, and interior shots of potential restaurants.
I am planning a trip with my girlfriend to visit my grandmother in Wilmington, NC. Now I wasn’t expecting much of a restaurant guide, but even so I was disappointed. There is no concise guide, there is no focused listing page. Different sites had different listings for the same restaurants - it was a disaster. Of course Wilmington is not the social capital of North Carolina, but it is home to about 65,000 people. What do these people do? There wasn’t anything resembling a thought out online guide to things happening in the area.
Of course this is what I do for a living so I can be picky.
Our next stop on our road trip, my birthplace, Hilton Head Island, SC. There was a glimpse of hope here as we found one site - hhidining.com. Upon closer inspection this was merely a half baked attempt by a local magazine to transition online. It succeeded about as well as anything done half heartedly usually does.
Here lies the fundamental problem, how do we aggregate all of the local information that is scattered across different mediums, in a variety of locations on and off the web, all across the country. Local is so fragmented and there is only so much you can do using a nationally built database of local businesses (see any form of online yellowpages) and there are several companies that focus completely on syndicating their local information.
Second to the fundamental question (how do we aggregate), how do you monetize this information effectively. Do you use a local salesforce, in the streets calling on these businesses? Or do you attempt to build traffic organically and use advertising and lead generation/affiliate programs to produce revenue? Well we’ve seen several companies (read: any version of the yellowpages) try to use the latter method (search for local restaurants and you will more often than not find Chili’s and other franchise ads). They serve large, intrusive ads all over the page, and generally do an ok job of listing local restaurants. Out of date listings often find their way into these pages.
There are very few businesses focusing on local search in mid-size markets. But is this because the markets are not ready for local online? Possibly, however I don’t believe that to be the case. I believe it is the issue of local businesses (existing media entities - mostly print) not understanding the value of local search. How do local papers leverage the value of their online properties? Most often, simply not well.
The point to this ramble is a basic question: What is holding people back from expanding into all of these untapped markets? There is surely value here, and eyeballs from these captured searchers have inherent value of there own. Small businesses are now craving concise online guides to their small cities, more and more businesses are transitioning their ad budgets online, and there are more internet users than ever before. But who is to create these guides and profit from their value…
Spare 76 Cents
Posted by Jamie Hutson | Filed under Life
Spare 76 cents, save a tree and manage your ideas better - download Darren Herman’s book Coloring Outside The Lines.
I’ve read the last two chapters a dozen times, and if you read his blog, you’ll recognize a few thoughts. Check it out, it motivated the crap out of me.
Cling Wrap
Posted by Jamie Hutson | Filed under Life
Your product should work like cling wrap.
Cling wrap is simple. You pull a piece off the roll, tear using the built in cutter and you wrap it over the thing you want to cover. It sticks automatically, its clear (or at least translucent) and it just works. No tape, no plastic to clean.
You shouldn’t have to walk people through it, you shouldn’t have a 42 page help document, you shouldn’t have to guide people to certain points on your website. It should be easy and straightforward.
Is your process simple, is your product easy? It should be…
Posted by Jamie Hutson | Filed under Life, sharing applications, social media
I was Just doing some late evening reading here and I discovered this post by Andrew Parker.
It speaks of twitter, which I have been admittedly skeptical about. Until now. I am posting the video I found there below. After watching this I am going to join the twitter phenomenon and see what its all about.
Twitter in Plain English from leelefever on Vimeo.
How cool is that animation? Very cool if you ask me. Ha, social social social, just like the Roaring 20’s.
What Do Small Businesses Need?
Posted by Jamie Hutson | Filed under Local Search, SMBs, Sales Channels, Small Businesses, advertising, marketing
The latest question I’ve posed to myself and my company, What Do SMBs - Our Customers need? There are many answers, but there are only a few that we can provide to them. What to SMBs need from the internet might be a better question to ask me, so we’ll go from there.
Small Businesses need a cost-effective, results oriented marketing plan to transition their budgets online. The number of options is growing rapidly, but the value they need remains the same. The question is now how should they best approach their solution? Large market players (CitySearch, YellowPages.com, Yelp, etc) are beginning to diversify into smaller markets, but their models are designed around an easy to reach critical mass (read Large Market). But where do local businesses outside of major metro areas turn? Companies like mine.
Our company provides a mix of Lead Generation and Brand Advertising. We offer traditional Lead Generation forms on each business’s profile, multiple branding opportunities across each category, and click-throughs. We provide a short-term ROI and many great value-adds to increase the effectiveness and return for our clients.
Small Businesses need something that works for them, the first time, with a short learning curve. Make it easy, make it quick, make it work. Thats what we are trying to do better everyday. Make our website work better and faster for our customers. We do this by measuring our site, adjusting the layout, increasing our Search Engine Placement and building our traffic.
Our traffic is up, see the chart below (see my previous post Analytics, Where did you get these?, for my thoughts on the actual numbers), our customers are happy and we are feeling pretty good about what we are doing. But its not good enough. Its not easy enough, and its not fast enough.
Local businesses need help doing everything. They spend enough time dealing with employees, and payroll, and taxes, and banking, and and and. They shouldn’t have to spend hours dealing with their marketing. That IS after all, what they are supposed to be paying us to do for them. That is my job, and every marketer’s job that is trying to reach local businesses. Its our job to make their lives easier. If its not easy to sell, its because it isn’t easy enough, or fast enough, or simple enough for the small business to get. And that means we aren’t doing our jobs.
Small businesses need us to do our jobs better; to make their marketing decisions easier. We are the experts (or should be) and your product should have that level of trust built into it. This is coming from a Small Business owner, and a marketing provider. In our experience, it needs to be easy, it needs to be quick and it needs to work. If it does those things well, it will have the trust built in that you need to sell it and the SMB needs to make a decision.
Small businesses need to trust that their marketing (money) is working for them.
