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Tuesday, May 18, 2010

Making Social Media Marketing Easier for SMB's

BizBrag Logo

I recently attended a webinar hosted by SalesBlogcast that featured social media company BizBrag. My reason for attending was to learn how small and medium sized-businesses can take advantage of social media. Based on our Local Commerce Monitor research, 32 percent of SMBs said they plan to use a social site, while 31 percent indicated they plan to place links or ads on social media sites. What previous waves of LCM data have shown is a high desire for social media but lower actual spending, indicating a pent-up demand to spend in this category. My theory has always been that social media is often intimidating to those less familiar with Facebook, Twitter, LinkedIn, blogging and posting news features. All these activities take time and a certain level of technical expertise to manage them while also running a business.

Enter BizBrag. CEO Brian Smith made it his mission to try to develop a single platform where SMBs can manage all their social media activities including e-mail marketing. “With so many social media outlets, with varying ways of inputting data and broadcasting information, BizBrag’s goal was to create an easy to use all-in-one platform. The goal is to help small businesses create ways to draw activity to their Web sites by creating more ways to be found on search engines via blogs, news articles, and social media posts.” Small businesses create a BizFolio that shows all their activity and provides a simple description of the company. The dashboard feature allows the company to create news articles and posts about their company showing them where they can post their information. Enter a news story (Called a Braggit), check a few boxes on where it can be posted, upload an e-mail list, and then hit submit.

Bizbrag Example

BizBrag is two months out of beta and now gaining speed with 1,000 advertisers signed on since going live. Leveraging its social media expertise, BizBrag has been active in working its social media network to get the word out to SMBs. Smith pointed out, “if the pace of inquiries and new advertisers signed on in the last two months is any indication, we seem to have hit the mark with small businesses trying to figure out an easy way to start and manage a social media campaign.”

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Local media properties should be doing this....or partner with these folks.

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Wednesday, May 12, 2010

Think Social Media is a fad?

Finally something is more popular on the web than porn!

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Monday, May 10, 2010

Groupon Business Model for Local Search

musk scratching head

Huh?

We've written before that we think group-buying site Groupon is huge, even cheap at $1.2 billion.

TechCrunch broke some numbers about Groupon's financials, but only managed to confuse us even more.

TechCrunch writes that Groupon's estimated 2010 "revenue" is $350 million and that it makes "$1 million or more per week in pure profit".

We've heard every number for Groupon 2010 revenues, from $100 million to $300 million.

In valuing the business as cheap at $1.2 billion, we picked the conservative $100 million number. Outside of the fact that putting some numbers on a per-week basis and some on a per-year basis doesn't make understanding the business easy, the problem with estimating the size of Groupon's business is the difference between actual revenues and "gross merchandise sales."

What's the difference?

Groupon partners with local businesses and sends them customers. So when you buy a deal on Groupon, the majority of that money goes to the partner business, not to Groupon (or rather, not for long). All the money that flows through Groupon should be called "gross merchandise sales." But Groupon needs to meet and exceed its costs to generate profits not from gross merchandise sales, but from the cut it takes.

Is the $350 million per year gross merchandise sales or revenue?

What's more, "$1 million per week" (let's round that to $50 million/year to avoid headaches) in "pure profit" sounds great, but "pure profit" is a concept with no meaning.

Is that net profits? Is that free cash flow? Is that EBITDA (earnings before interest, taxes, depreciation and amortization)?

Now, we've also heard that because Groupon is so popular, it can afford to take a huge cut of the money that goes to partner businesses, even after providing steep discounts. We heard the cut is as high as 30%.

If the average cut is 30%, that would explain a lot. The $350 million number could be gross merchandise sales and the $100 million number could be revenues. But that would make the $50 million "pure profit" number very unlikely, if that denotes net profits.

50% net profits for a discount site? Seriously? If that denotes free cash flow or EBITDA, we can talk.

Or we could work our way up from the $50 million/year figure. If that denotes net profits and the $350 million/year figure does denote revenue, that would give the business a net profit margin of roughly 14%, which is still very high for a young discount business but a lot more believable. Using the 30% cut figure, that would put gross merchandise sales around $1 billion.

If we had to guess between those two, we would say the $350 million number is gross merchandise sales and $100 million is actual revenue. Our instincts tell us if Groupon had hit a $1 billion run-rate in gross merchandise sales already, that press release would've already hit our desk eleven times.

From that we would guess the $50 million "pure profit" number is actually EBITDA, which is nothing like "pure profit," but 50% EBITDA margins would still be very good for pretty much any business, especially a discount site. Or the number was made up.

What's more, a $1.2 (the number now appears to be $1.35) billion valuation for $350 million in revenues would be extremely cheap, 3X revenues compared to roughly 10X revenues for Facebook and Zynga, in which Digital Sky Technologies also led the round.

But who knows!

So, as you can see: this is all pretty hazy. We're still very bullish on Groupon and think its valuation was justified at whatever end of the spectrum its financials are, given the market and the brand. But its financial picture is still very hazy.

Who has details? Let us know!

See Also:Groupon And Its Zillions Of Imitators Are Trying To Cash In On A New Group Buying Craze >

 

This may be a more profitable model for local media's attempts at local search. This can be particularly valuable for local media companies with sizable email databases (Groupon sends out daily emails to generate sales). Click on any of the links in this story. The comments on the original articles have some good math analysis.

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Accountability Demands On The Rise

MediaWorks

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Magazines' Pitch to Marketers: Our Ads Will Work -- We Promise

Time Inc. Works With Starcom MediaVest to Guarantee Performance Results, or Run Make-Good Advertising

by Nat Ives
Published: May 10, 2010

NEW YORK (AdAge.com) -- Magazines have always promised their advertisers a certain number of paying readers. Now the industry is moving toward another guarantee: that its ads will work.

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--> One of the industry's biggest publishers, Time Inc., and one of its biggest ad buyers, the Starcom MediaVest Group, are collaborating to develop promises that certain numbers of people will remember ads or take action on them. If a participating marketer's campaign doesn't achieve the promised result, Time Inc. will run free additional ads until it does.

The effort, dubbed the Alliance for Magazine Accountability, will start with select Starcom MediaVest clients. The companies declined to identify those clients, some of whom they said are still being chosen, but Starcom MediaVest's client list includes heavy hitters such as General Motors, Allstate, Walmart and Coca-Cola.

The Alliance will study audience and performance data from outside providers, Affinity's Vista service and Mediamark Research and Intelligence's AdMeasure service, covering the first half of this year, then start making guarantees covering the second half of the year.

"We've been preaching that magazines engage readers like no other media," said Stephanie George, exec VP at Time Inc., which publishes magazines including Time, People, Sports Illustrated and Fortune. "So today, in a crowded media market, when it comes to accountability, the work from this Alliance will help prove magazines' advertising effectiveness."

NBC's moves
The recession, new research tools and increased spending on more easily tracked digital channels have pressured all media to better prove their worth to advertisers -- and that's slowly making performance guarantees more common. In TV, for example, NBC has been guaranteeing audience engagement to some clients in particular deals for several years.

Circulation will continue to be important because it's a valuable metric and benchmark for all marketers, said John Muszynski, chief investment officer at SMGX, a Starcom MediaVest unit where the group's agencies exchange intelligence, test new models and share resources. "However," he said, "as all the other media out there start to bring out more sophisticated, more precise targeting data and accountability metrics, the magazine industry needs to keep up."

The other major magazine publishers, including Condé Nast, Hearst, Bonnier, Meredith and Rodale, only guarantee paid circulation. But since the beginning of the year, two magazines, Scholastic Parent & Child and The Week, have also been guaranteeing performance for marketers making big enough ad buys. Both titles use Affinity's Vista service, which surveys readers on measures such as ad recall and actions they took after seeing ads.

Scholastic guarantees qualifying advertisers, such as Walmart, Panasonic, Discover and Trident, that their ads will generate enough reader action to rank in the top third among the women's magazines that they are using. If an ad campaign's results fall short, Scholastic Parent & Child will issue a 10% refund.

The Week guarantees each qualifying advertiser that its ads will get reader recall scores that rank in the top third of all the magazines in the marketer's media plan. If they don't, The Week will run more ads until the guarantee is met.

Time Inc.'s pledge
The pledge that Time Inc. and Starcom MediaVest are developing is different because it deals with the number of people who recall an ad campaign or take action in response to it, not performance in relation to another title or mix of titles.

The Week's guarantee makes advertisers happy, helps sell ad pages and shores up ad prices, according to Steven Kotok, president at The Week. "We only do it for 12 pages of advertising or more, so a lot of advertisers are running extra paid pages to reach that threshold to get the guarantee," he said. He wouldn't disclose the eight marketers participating.

"In an era when a lot of advertisers ask for rollbacks across the board, the guarantee is what lets us keep rates steady or ask for an increase," Mr. Kotok said. "'We'd love to give you last year's rates,' we say, 'but then we can't give you the guarantee. If you take a nominal increase, we can give you the guarantee.'"

The push toward performance guarantees from a major publisher such as Time Inc. suggests such promises could become much more common for magazines -- especially if it proves to help ad sales.

But how these guarantees are executed will determine how much they benefit magazines and advertisers, said Scott Kruse, managing director and director of print at Group M, another major ad buyer. "In theory, this sounds like a positive, but there are going to be a lot of questions around methodology and the nature of the guarantees," he said. "It's one thing to do it on a smaller title like Scholastic or The Week, but when you do it across a major publisher, it could become a lot more complex in terms of how you manage that, how the methodology is based and the methodology for the make-goods if the guarantees aren't met."

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Most TV is still bought on these crazy demos: 18-34, 18-49, 25-54, etc. How can you be accountable for response or action when you consider how different a person aged 25 compared to a 54 year-old? I preach a good 1st step for local TV stations would be to tie on-air campaigns more to their various digital assets. The integration could provide some quantifiable methods for accountability. Yeah, it's more work than just delivering a CPP, but as Time Inc. has found out, accountability is the only way to grow long-term.

Posted via web from Randy's Stuff

Wednesday, May 5, 2010

Imagining the Internet

he who lights his [candle] at mine receives light without darkening me.'] Ideas spred like fire. You can't 'own' fire.

As Doc Searls has said, "intellectual property is an oxymoron." This is one of the great characteristics of the Internet - the sharing of ideas.

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Where your traffic comes from

By Geoffrey A. Fowler

The Web 2.0 Expo kicked off in San Francisco on Tuesday with a discussion that would be unthinkable without social media: How Web publishers can be successful without Google.

AFP/Getty Images
Google headquarters in Mountain View, Calif.

The panel, moderated by the Journal’s Jessica Vascellaro, noted that many news websites today are addicted to Google’s search engine, which in many cases is their single-largest driver of traffic.

Yet the traffic they get from social media sites such as Facebook and Twitter is growing much more quickly these days. For example, newspaper and magazine publisher Hearst is seeing traffic from social media sites grow at a 250% annual rate, said Heidi Perry of Share This, a company that integrates sharing capability into thousands of big and small publishers, including Hearst.

Moreover, traffic from Google tends to take a U-turn, said Tristan Harris from Apture, a company that helps sites figure out how to hold onto traffic once they get it. Some 30% of top news sites’ traffic comes from Google and about 30% of it goes quickly right back to Google, he said. “What good is all of this investment you make in driving traffic to your site from Google if it goes right back to Google?” he asked.

Users who find content through social media tend to stick around longer and are more valuable, argued the panelists. That’s one reason so many of them are latching on to Facebook’s new “like” function, which not only gives users a way to share and interact with content, but also helps publishers’ content show up in Facebook’s own search function.

But beware Facebook and Twitter, too, as they seek new ways to drive their own search and advertising businesses.

“We are in a period where there is definitely an anti-Google sentiment” among publishers, said Mr. Harris. “But are we going to be in a position again in a five years when Twitter and Facebook own our destiny too?”

Rather, he said, publishers should “control their own destiny,” by trying to keep people on their own sites for as long as possible, and getting people coming back more often to look for information.

Follow Geoffrey Fowler on Twitter @geoffreyfowler (www.twitter.com/geoffreyfowler)

This strikes me as strange. I get how publishers have a love/hate relationship with Google. And there certainly is nothing wrong with working to have your readers spend more time with you. But Mr. Harris has a wrong paradigm, in my opinion. Traffic coming to you from Facebook and Twitter is primarily from a publisher's READERS finding your content so compelling they share it! What's wrong with that?

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Tuesday, May 4, 2010

7 Actionable Facebook Tactics for Marketers

Actionable Analysis

7 Actionable Facebook Tactics for Marketers

By Heidi Cohen, ClickZ, May 3, 2010

Facebook has grown too big for marketers to ignore. Over 117 million Americans visited Facebook in March 2010 and the average visitor spent almost seven hours during the month on the site, as tracked by Nielsen. According to comScore, from March 2009 to March 2010 Facebook's unique visitors increased about 90 percent and its average minutes per visitor increased almost 50 percent.

To show that there's been a tipping point, traffic to Facebook has exceeded traffic to Google since the week ending March 13, 2010. From a marketing perspective, it's important to note that Facebook, like Google, has become a major referrer of traffic. For example, Starbucks has over 7 million Fans (or, in Facebook-speak, "people who like it"). Furthermore, Facebook is the most searched term across search engines, according to Experian Hitwise. Marketers should also note that Facebook is becoming device indifferent. While computers are the preferred device for checking Facebook, 46 percent of the under 35 demographic use their mobile phone to access Facebook, based on Retrevo's October 2009 Gadgetology Report.

7 Actionable Facebook Tactics for Marketers

While Facebook was initially used by entities with small budgets, such as advocacy and not-for-profit organizations, now, everyone's using it. Facebook is a "must have" for every marketer whether you're a retailer, brand, or media entity. Even companies in regulated industries, whose legal and compliance hurdles make social media a challenge to implement, are using it. For example, TIAA-CREF, a well established financial services company, just launched its "Raise the Rate" campaign on Facebook.

But Facebook requires a different approach from other forms of marketing messaging and engagement. To develop and expand your Facebook marketing strategy, here are seven actionable tactics:

  1. Publish on Facebook to create interactions with and among your fans. Think like a gossip magazine to give fans something to talk about. Focus on information that's important and interesting to your audience. For example, Live Nation uses Facebook to discuss music and concerts, not to explicitly push ticket sales.

  2. Give people a reason to join. To this end, use virtual gifts, coupons, contests, and insider tips. While in many ways, these alternatives aren't very different from offline promotions, they require a different lens to ensure that you're not perceived as just promoting your services. For example, Einstein Bros Bagels runs a "Shmear Campaign" to grow fans on Facebook.

  3. Use Facebook to expand relationships with your prospects, customers, and fans. Many marketers use Facebook to expand their pool of prospects. This can be extended to responding directly to fans when asked or recognizing personal events such as birthdays. For example, The Denver Post, an older media format, is using Facebook to expand the reach of their classifieds.

  4. Make Facebook communications conversational. Act like you're talking to real people, not just spewing corporate-speak! Despite its extensive reach, Facebook isn't a broadcast medium. Here are a few recommendations to guide your interactions:
    • Listen carefully to what's being said before joining the conversation.
    • Let consumers talk to each other when they're discussing your company and products. Other customers may answer their questions before you have to. Curb your impulse to respond to every comment.
    • Actively participate without each comment being inwardly focused on your firm. Remember, no one likes someone who only talks about themselves.
    • Only remove inappropriate content. This doesn't mean anything at all negative about your company or brands, but rather abusive or foul language.
  5. Leverage supporting marketing and collateral to promote your Facebook presence. To support your firm's Facebook efforts, it's critical to promote it across your other media and communications. In addition, make sure that the content on your website and other channels can be shared on Facebook easily. This helps expand your reach and prospect base through friends of friends.

  6. Give your Facebook initiatives sufficient support to succeed. This translates into dedicating sufficient headcount to develop content and participate on Facebook and having sufficient content that's targeted to Facebook's unique needs. It also means having management support for these efforts, as well as establishing company guidelines for employee participation.

  7. Measure your Facebook marketing efforts and their impact on your business goals. Among the salient metrics to track are the number of fans and sales. With Facebook, it's important to look deeper to determine how many new prospects you've acquired, the level of interaction and advocacy for your product offering, the impact on your purchase funnel, and the amount of earned media generated.

Facebook has proven to be much more than a passing fad. Many organizations now realize that it has turned into a powerful marketing medium, so long as you do the required planning and integrate it properly with the rest of your marketing and overall business strategy.


Biography
Heidi Cohen

Heidi Cohen is the president of Riverside Marketing Strategies, an interactive marketing consultancy. She has over 20 years' experience helping clients increase profitability by developing innovative marketing programs to acquire and retain customers based on solid analytics. Clients include New York Times Digital, AccuWeather.com, CheapTickets, and the UJA. Additionally, Riverside Marketing Strategies has worked with numerous other online content/media companies and e-tailers.

Prior to starting Riverside Marketing Strategies, Heidi held a number of senior-level marketing positions at The Economist, the Bookspan/Doubleday Direct division of Bertelsmann, and Citibank.

Since 2002, Heidi has been a member of the faculty of NYU's master of science in integrated marketing program, where she received NYU's Outstanding Service award.

Heidi is also a popular speaker on current industry topics.



Archive

Noting revolutionary here, but it's nice to have all these on one page.

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Monday, May 3, 2010

Not More Wall Street Bashing

"Why Are 25 Hedge Fund Managers Worth 658,000 teachers?" A poignant question that was recently posed to me on Twitter, it makes your head — and your heart — hurt.

A question shared by Umair Haque. It's not Wall St. bashing, it's a value proposition for the 21st Century.

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