I want to share with you a theory I’ve been developing over the past few years.  It’s a work in progress, my own opinion based on multiple elements, and I think, fascinating!

Let’s start with a working definition (the tough part that initially will sound like greek) and then pick it apart with stories & pictures (the fun part).

The Rosetta Stone ™ Effect is a brand marketing phenomenon where a product’s high perceived value influences consumers to purchase and then recommend the product regardless of actual value gained from it.

As a quick aside, I’m not the first person to use the phrase “Rosetta Stone Effect.”  June Cohen, Executive Producer of TED Media, the creators of the wildly popular TED talks, used the phrase in describing TED’s crowd sourcing of translation for their videos and other materials.  While I’m referring to the language software, I’m pretty sure June was tipping her historian hat to the original tablet.

I first started to notice hints at this effect while working at Transparent Language, a small shop competitor of Rosetta Stone.  I’m no longer at the company and don’t intend this article for product bashing.  If anything, it’s a big business model compliment.

Transparent’s consumer flagship, Byki, operates on a freemium model.  That is, they give it away for free and a certain percentage of users will ‘upgrade’ to the paid version.   That’s a hard offer to beat, but their brand is relatively unknown compared to the mighty yellow box of Rosetta Stone.  But it’s not just a strong brand, it’s a BRANDOSAURUS and when your brand has teeth- weird things start to happen.

Part I – The Purchase

Millions of people purchase Rosetta Stone. Have you?  It’s very likely that you have, as Rosetta Stone is a high powered marketing machine.  The $45 million in sales & marketing is roughly half of the $91 million in revenue for that same period.  We’ve all seen the television ads, kiosks in the airport, and maybe even heard the ad on Pandora internet radio.

Operating Expense, From S-1 Filing, 2006

Rosetta Stone’s products are also anything but cheap.  As of May 2011, the basic Level 1 Spanish is $179 and a full set of Levels 1,2,3,4&5 sells for $479.  Additionally, 3 month online access starts at $199.  (Source)

Instead of driving people away, the high price tends to appeal to people in two ways: First, many people equate price with quality or value.  Do expensive jeans last longer? Will expensive razors cut you less frequently?  We know this isn’t always true, but it’s not always easy to distinguish between the two.

The second appeal of the higher price of Rosetta Stone ties into level of commitment.  The more you spend on software to learn French, the more serious/committed/dedicated you are to actually learning the language.  Is this true?  Worth a collegiate study maybe.  It seems likely that the difference between prices will be most apparent comparing free vs paid.  My instinct tells me that the higher spend doesn’t end up equating to higher success rates and most of the people I’ve talked to confirm this.

Image Source: Emperor's New Clothes (Wikipedia)

The subject of commitment to personal learning is a huge topic.  With so many contributing factors, it’ll have to be more fully addressed in a separate post.  For the current issue, I propose that people are hoping that the more they spend the more they’ll “stick with it.”

The Emperor’s New Clothes, a fable from the school days of nap time and glue projects, may have a modern equivalent in Rosetta Stone software.

What happens if the product doesn’t work?  Being wrong about a $0.99 song on iTunes can make you feel a little regret.  You might be more grumpy if you paid for movie tickets only to find out that the preview contained the only actual funny parts.  How about a $500 purchase?

There is a typical response I continue to hear from people who have purchased Rosetta Stone.  “I liked it, learned some words, but never really got far.”  They very clearly spell out that it’s their fault, not the software that is at fault for not continuing.

In a way, there will always be personal fault found when engaging a learning tool.  Often you get out of it what you put in it.  And putting in large amounts of cash don’t fit into that equation.  It’s the Mr Miyagi elbow grease that shines cars (wax on, wax off).

Personal digs noted, I propose that there is still fault left over.  It is then significant that users assume it all on themselves- especially in a day and age of passing the buck.  But perhaps, this behavior is explainable.  After all, who could blame you for not having the time to memorize those phrases?  The social pain then weighs heavier on the potential embarrassment for being duped in the marketplace.

Part II – The Recommendation

The second part of the Rosetta Stone ™ Effect is the huge amount of recommendations.  Many of these referrals come from people who haven’t even used the product, but heard or saw advertising:

Image Source: Yahoo! Answers

Other recommendations come from people who heard ‘something’ about it from a friend- potentially the same friend mentioned above who never actually found success with it .  And it’s this instance that most intrigues me.  Not only could someone buy the Emperor’s New Clothes, but they then recommend it to friends.

Here is an additional recommendation from Yahoo! Answers that I thought was equally entertaining.  The question was seeking the best way to learn a language:

Image Source: Yahoo! Answers

Opening Thoughts

Normally people would summarize and close a topic here.  I want to do just the opposite and instead open this up for discussion.  This observation is far from over and there are elements you might have picked up on that I haven’t.  From broad business theory to experiences with Rosetta Stone, I welcome your insight.

Does a company that spends so much on Sales & Marketing scare you? Or is this ratio the secret sauce of Rosetta Stone- driving brand recognition and resulting sales?

Have you bought Rosetta Stone? Used it? Followed the same pattern, or did you diverge from what I’ve observed?

Update 5/13 – Has the modern social media consumer broken the spell?

The Motley Fool posted an article today titled “Is Rosetta Stone’s Cash Machine Empty?”  It appears Rosetta is having some internal financial issues- enough to peak the interest of investment gurus like Seth Jayson, the author of the article.  This begs the question of how long a company can sustain the high costs involved with branding and selling within the Rosetta Stone Effect?

I work at EF in Cambridge, MA and they’re always hiring.  It’s a great company and I love working here.  That’s not hot air either, as I’ve worked at quite a few companies over the years so I know good and bad when I see it.  EF is definitely the place to be.  From international tours to domestic trips to DC, there’s a lot going on over here!

What is EF? Sometimes it’s best to grab a quick line of text from the website:

“EF Education is #1 in educational travel. With more than 45 years of experience and offices in more than 50 countries, we are the most reputable student travel organization.

Our all-inclusive tours offer the most value, with the lowest prices guaranteed and unparalleled safety and support.”

Whether you’re in Marketing, Sales, Customer Service, Finance or some other profession, I highly recommend you check out the EF open positions.  This is a company that takes care of it’s employees, pushes them to learn & grow, and has a lot of fun while changing the lives of people worldwide.

What’s it like working there? Every day is both challenging and exciting.  We all work hard, but see it pay off in real life dividends.  First and foremost for the folks working in EF Tours, we’re bringing kids to foreign lands on a school trip that will likely impact them for the rest of their lives.  Bridging gaps of culture, language, and geography is a mission that is live and at the front of our minds.  If you get this, then you’ll understand the biggest shared value we all have and are on your way to working here.

And in case your current job is at a company that makes or sells something really boring- there’s an amazing sense of purpose and passion when your company does something with serious positive impact.

Referrals. Will you put in a good for me at EF?  If you’re awesome- absolutely.  You can reach me through this site.  If I don’t already know you, then we’ll need to chat on the phone so I can get a good feel for your skills and personality.  You’ll still need to apply through the EF Career site in addition to any referral I might send.

Questions? Any questions about working on EF? Contact me or post them as comments below.

Facebook advertising is hyper targeted and as a result is often much more expensive than the Google Content network.  It’s important to have solid reporting in place so you can make sense of which campaigns are winners.

Facebook has gone through substantial growing pains as they develop their ad network.  From reporting errors to actually doing away with website based conversion reporting (it was too much to support)- it’s not your grandma’s ad network!

There are new social actions that can take place on Facebook ads such as a Like or an RSVP.  The resulting advertising performance report is a mish-mosh (yes, I said it) of trendy new terms that can both overlap and exclude adjacent stats.  It’s then left to us to translate the results into business speak.

The final bit of challenge is that until recently, not everyone at Facebook knew exactly what each stat was or how they were related.  So I’d Google Search the heck out of the situation- coming up with less than helpful docs, like the Facebook Ads Report.  No offense to FB but the thing was definitely created by someone who’s never had to calculate a CPL for a Facebook ad campaign.

There is a help file that gives the run-down of *most* terms in your Facebook Advertising Performance Report. Go there for definitions of things like Impressions & Spent. Just in case you didn’t know.   To their credit they do label Social Conversions- which we’ll expand on in a second.  Conversions, though, is neglected- leading everyone to wonder which conversion this column refers to…

Thankfully they’ve hired hotshots to deal with inquisitors like me- and now we can all have answers!

First things first, all conversions are SOCIAL conversions now, and they happen on Facebook.  As I mentioned above, Facebook rather quietly did away with their embeddable conversion code.  It was a great thing- being able to see how many people came from FB and then converted on your site.  Unfortunately, they quickly realized that they weren’t up to the task of supporting this level of reporting- probably because they’d have less time to harvest their crops on FarmVille.  It also makes sense because you can use unique landing pages or Google Analytics to track Facebook conversions on your own site.

Social Clicks – Early on I had been told by FB that these were social conversions on ads that pointed to Facebook Fan pages, but that’s not true.  Social clicks AREN’T conversions, and are literally just any click on ads that are showing you names of friends who have also liked that page.  So this can be more associated with the Social %” and “Social CTR” columns.  It’s just a click buddy!

Actions – This is for conversions that occurred directly on the ad itself.  So someone became a fan of your page or RSVP’d to your event (or even installed your app) without clicking through to your page.

Conversions – The total number of conversions (like, event, app) that occurred within 28 days of clicking or viewing your ad.  Conversions does INCLUDE Actions, so don’t add them together.  Also keep in mind they’re taking credit for 28 days of fannage, which is something display networks love to do.

There you have it! Conversion data coming out your ears. 

It’s important to evaluate a new pair of hiking boots while you’re still in the store.  There are 3 important checks that will go a long way toward ensuring your new boots are right for you.

1. Socks Are More Than Puppets

The first check is to try on the boots while wearing hiking socks similar to what you would wear when hiking.  The Smart Wool shown above are my favorite.  The boots should feel comfortable while standing.  If they are uncomfortable now, don’t assume “breaking them in” will fix this.  If you’re uncomfortable wearing demo socks and don’t want to buy another pair just to try on boots, bring a pair from home!

2. Test Drive Those Inclines

The second check is to walk UP a sloped surface.  Top outdoor stores will have a “boot ramp” to help simulate this.  As you walk up the ramp, pay close attention to the action of your heel in the boot.  While a little give is okay, you do not want your heels to move up and down against the back of the boot as this will turn into a painful blister when hiking.

Now walk down the inclined surface.  This simulates walking down a mountain and your foot should not slide forward pushing your toes into the boot.  If your boot is tied tightly and your toes still touch the front of the boot while descending those boots are not for you.

3. Many Feet, Many Brands

The last tip is to try on as many different boots AND brands that you can.  Just like with running shoes, boots come in many different styles. No matter what a name a particular boot has, it’ll be similar in design and fit to other boots of the same brand.

North Face boots will fit drastically different than Asolo.  The price is not the important part of brand comparison, the fit is.  Price will generally tell you how rugged the boot is, but there’s no sense in shelling out premium dollar for a brand name.  Try on multiple boots from different brands- and in different stores.  You’ll find they carry slight differences in products.

In my experience, I’ve found Asolo to be amazing boots and fit my somewhat wide, hobbit feet extremely well.  I bought my Asolo Fugitive GTX boots at Eastern Mountain Sports (@EASTERNMNTN) in Nashua.  They’re pricey, but were the first boot that my feet felt naturally comfortable in- ever.  North Face boots have worked great for my wife’s small slender feet.

It’s a very personal and unique fit you’re going for here.  No one can recommend on fit, only price, durability and the rest- Just remember that 3 miles from the trail-head, after a long day of hiking, price isn’t going to matter if your foot is a giant blister.

With these 3 quick tips in mind you can grab a pair of socks and hit the stores.  You can be confident that the perfect fit is out there and it’s waiting for you to take ‘em on the trail!

I was listening in to a YouTube webinar by the Google team today. One of their slides caught my eye and listed key online shopping dates from 2009.

While I’m mostly playing in B2B these days, this clean look at the mess that is online holiday shopping is an excellent guide for coordinating your multi-channel promotions:

If you’re curious about the content of the webinar, there was a lot of fluff about how “people are excited about the holidays.”  I’m glad they reminded me…

But to their credit, the main point was integrating YouTube into your total digital & social presence. Bombay Sapphire was praised for doing this well- and making it look good too:

Every now and again I have an “Ah-ha” moment. It’s the personal, dramatic pause that starts you immediately contemplating life, love and the outlook of the New England Patriots.

This particular event is brought about by technology: I’m currently riding the MBTA commuter rail out of Boston and blogging on my new iPad.  Tweeting from my iPhone was big, and this seems like the next phase in the mobile evolution.

I’ve been reading “Startup” by Jerry Kaplan- it’s the fascinating story of the development of pen computers in the 90s.  These 4lb writing tablets utilized a digital pen and spurred the industry through many steps to the device, 20 years later, that I currently write this post on.  The book warrants it’s own post when I’m finished- and ironically, a keyboard to write it!

The iPad has a large keyboard, especially when turned on it’s side like I have it now.  It’s not all that easy because my fingers are used to resting lightly on the “home row.” Rest your fingers on this puppy and you get baby speak, as if a baby were slamming his fist on your laptop!

Wow! This WordPress app just crashed- thankfully it occurred *after* I just clicked save.  So with that in mind, I’ll count my blessing and end this post from the tech frontier!  

Passwords are great! They keep thieves out of bank accounts, ex’s out of Facebook accounts, and spies out of virtual vaults filled with top secret information.

This is true, assuming your password isn’t actually “password” or some other easily guessed word.  ZDNet did an analysis of a recent RockYou.com server breach and found that the most used password wasn’t actually a word.

It’s “123456″  Can you believe it?  I mean come on people, 123456?!

The rest of the most frequently used passwords are equally ‘fascinating’ from a human behavior perspective.  Check out the rest of the list from the ZDNet article.

The different variations of 123456 aren’t too surprising and for YEARS we’ve known that *everyone* uses “password” for their password.  I suppose I’m not so shocked to see it still on there.  “Princess” is a little funny as is using your own name (at least you won’t forget it right?).

But “monkey?” Seriously? 15,294 RockYou.com users all picked that one.

In an effort to protect people from their own laziness, many networks require that you add extra elements into passwords such as symbols and numbers.

Adding a number increases the possibilities of each character in a password.

For instance, if your password was only one character long and it was restricted to the simple alphabet, there would be 26 different possibilities for that password.  If that same one character password included both alphabet and numbers, you now have 36 different possibilities. (Don’t forget that “0″ zero counts for numbers!)

Now, typically you’re required to make a password at least 6 characters long. Using the above policy of letters and numbers, a minimum 6 character password with letters and numbers (not case specific) would result in:

1.0314424798490537e+28 possibilities!  (Calculator) What’s that look like without the scientific notation?

10,314,424,798,490,536,936,184,856,096 (Converter)  (Lot’s of passwords for your ex to try!)

That’s a pretty secure looking number! You can see why passwords encourage and sometimes force you to have both letters and numbers.

The problem is that there are a multitude of password crackers out there. These simple ap

plications are designed to figure out your secret as quickly as possible!

These little tools have bad-ass hacker names like “Cain & Abel,” “John the Ripper,” and “THC Hydra.”  And the easier your password is the quicker they get the job done!  Sometimes they’ll even start with the most popular possibilities because they know so many people use them! (That means you, Mr or Ms. I-Use-123456-As-My-Password!)

As tools to break passwords get stronger, network administrators realize that passwords have to get stronger.  Rather than leave your bank account password up to the peasants, they’ve instituted marshal law on your creativity.

Here’s an extremely heavy password policy from a financial company:

Are you overwhelmed yet? You’ll need to create something between 8 to 12 characters long with at least one upper case letter, a lower case letter, a number, and a symbol.

Furthermore, don’t even think about repeating too many of these characters!

Oh and by the way, as soon as you come up with something clever, that you’ll actually remember, the password will likely expire and you’ll have to invent something totally new!

And it’s this last part, the time before expiration where they really get you.  Because unless you can figure out a password creation system that is flexible for monthly changes

(that you can remember), then you’re doomed to either write it down somewhere or click on that “Forgot Password” link of shame every time you want to log in.

When I quizzed Twitter about this frustrating trend, a few tweeple chimed in:

• @RichKolb said “Sites that don’t allow symbols are what frustrate me, the stronger the password the better!”
• @DigPhil said “TD Bank; hides your username as you type”
• And also a thanks to @Brett_Ski for the RT.

First of all, Rich, you’re a monster! It’s people like you that will drive our network admins to require a blood sample along with a 24 digit code! haha!  He must have a cool system down that works well with the latest requirements.

Rich brings up a good point though. Almost every site you go to has different requirements and once you’ve got a $up3r password figured out, it’s hard to go back to just letters and numbers!

It’s craziness like this that drives people to use RoboForm and the multitude of other pas

sword management tools.  These solve the immediate problem of remembering all of your passwords, though I’m sure information security experts cringe at having all of your eggs in one basket!

I’d like to thank Phil for pointing out how extreme TD Bank has gone by hiding not just your password but your user name as you type! You’d better be sure of those typing fingers!  One false move and you get the “wrong password, idiot screen.” Three false moves and you might just be locked out!

The future… What’s a blog post without a hat tip to the future?  I’ll bet you that just as our grandparents are amazed that we have to use passwords, our grand children will be too! (If you already have grand children, then insert 2+ generations.)

Business, government, and military have been experimenting with cards, scans, and all sorts of identification tech for decades now.  Depending on how well these tools play with privacy avengers, passwords may go the way of 3.5″ disks!

Note on Comments: If a site is frustrating you with their password policies, feel free to hate on them in the comments!

A few minutes ago, while logging into Google Adwords, a friend & coworker Emilie (@EmilieKBaker), did a double-take then asked me a question:

“How do you spell customer?”

“C. o. z. t-” started my joking response.

“No seriously. Take a look at this!”

It’s then that she showed me the splash image for a video on the Google AdWords homepage (seen below).

How long does it take you to see their goof?  Hint: It’s not the tiny text!

“Attact more costumers” Really Google?

Now I’ll give them a free pass on costumers, as that is a real word and wouldn’t be underlined by SpellCheck.  I wonder how many levels of engineers it passed through before being approved?

However, I can’t give them an excuse for “attact.”  Even as I write this quick blog article, the word attact is being underlined every single time thanks to WordPress.  (And it’s getting just a little annoying, haha.)

To see the blunder yourself, visit www.adwords.com.  After you get redirected around the planet, you’ll see a video on the left hand side with the goof.  If you’re an adwords regular, however, you’ll need to login with a browser you don’t normally use to view the site as you’ll be cookied and shown a different page with a static image instead of a video.

This is a fun reminder that the bigger you are, the more important your use of SpellCheck becomes… Cheers!

The other week I attended the 140 conference (#140conf) in Boston. It was an excellent event run by Jeff Pulver at locations around the world.  The focus is the real time web and the implications it has on the future of how we engage and utilize technology.

In their words: “The #140conf events provide a platform for the worldwide twitter community to: listen, connect, share and engage with each other, while collectively exploring the effects of the emerging real-time internet on business.”

My favorite part of the conference was meeting many of the attendees- who all had wildly different stories but spoke the same language- @twitter, real time, now, and of course, future.  One of the people I met was Alexis (@akarlin) from Neolane (@neolane).

Neolane, in their words from the Twitter bio, “provides the only enterprise marketing software designed to manage, automate & optimize programs across channels.”  That’s a hefty mission!  I haven’t seen their stuff yet, but if Alexis Karlin is any indication as part of their crew- I’m sure they’re probably achieving it.

I was asked to speak quickly on video about what I thought a social CRM was.  Neolane is exploring the idea of bridging their mastery of email marketing with the social scene:

I’m familiar with the concept of a Social CRM thanks to another remarkable person, Margaret Donnelly (@mwdonnelly) of JitterJam (@jitterjam).  JitterJam is a quickly growing Social CRM solution that I’ve had the fortune of utilizing at my last company, Transparent Language.

The realm of social CRM is growing quickly as many vendors begin to see the importance of blending social with their other marketing efforts.  The idea is to have a single interface that allows you to manage the variety of channels that your customers are using to interact with your business.

JitterJam, from their website, “helps your consumer-facing brand or business capture relevant conversations on the real-time web and turn them into lasting and trusted customer relationships.”

Their solution is being utilized by companies large and small.  Recently I discovered that the indoor skydiving facility that I used to work at, SkyVenture New Hampshire, is using JitterJam because their Facebook activity was marked with a tiny JJ logo.  What a small world!

As social media becomes intertwined in overall marketing efforts at companies around the world, it will be fun to watch social CRM solutions evolve.  The best ones will be both easy to operate and seamless with the overall marketing campaign.

The rumor is true: Facebook is down.  Or was, depending on when you read this.

But not the Facebook blog: http://blog.facebook.com/ It’s still churning away, doing relatively nothing- probably because nobody really reads the Facebook blog…

Over 300 servers don’t really matter much right now do they?

WHY IS/was FACEBOOK DOWN?

Al-Qaeda is claiming responsibility on their Twitter username.  But did they really do it?  In the same week that a 17 year old Australian kid unlocked a Pandora’s box of whammy on Twitter, it’s not too hard to picture a 13 year old pressing Control Alt Delete and somehow putting out the lights on facebook.com.

So what does this mean for you and me?  Not much really.

What does it mean for World Peace & Saving the Planet? Not much either.

Some guy, somewhere, will flip a switch- or write some impressive code and fix this situation.  Until then, we wait with baited breath and try to remember our MySpace password.

UPDATE: I’ve permanently forgotten my MySpace password and the email I used it long gone.

UPDATE UPDATE: Facebook is back up.  Yay for world procrastination!