IncTechnology.com > Online Advertising

Online Advertising through Social Media

Alice Osborn — 2008-12-18T14:09:04-05:00

Do your friends trust you? How about your virtual friends? Social media marketers not only want to know who you’re talking to about the latest episode of “Lost,” they want to know how you’re interacting with your friends on your social media sites. If you’re the type of person who consistently uploads, shares, rates, blogs, and, yes, whom your friends trust, you represent a valuable component for the social media advertiser.

According to Forrester Research, 75 percent of Internet users use social media, but less than half actively participate and influence their communities. Monetizing social media has been a challenge, but Lotame, a New York-business intelligence network and iWidgets of San Francisco, have made inroads into this maze by targeting users when they’re in the right mindset.

Advertisers used to think that social networks only appealed to college-age students, but now social media has a reach comparable to the portals, such as Yahoo and MSN, says James Kiernan, vice president of digital media and innovation at New York-based MediaVest Worldwide. "There was a tendency not to acknowledge the [social media] ads as much as traditional ads, but now Facebook and Lotame are making the ads more relevant. All advertisers should consider social media as part of their plans.”

Lotame tries crowd control

Lotame gathers research data for its advertising and publishing clients (Flixster, Photolog, and Bebo) through its Crowd Control platform. The platform builds anonymous profiles of users by their age, gender, zip code, along with their actions and interests on the social media site. In fact, Crowd Control detects whether a user’s mouse is idle or not by recording the time spent looking at the creative content on the screen.

“We look at people, not pages and how they are acting, interacting and communicating on the sites," says Andy Monfried, CEO of Lotame. "We are focused on giving results to our advertisers so they can formulate a plan.” For instance, Lotame could target women ages 21-35 who upload and share content on Flixster, a movie social networking site, and then sell that data to an advertiser who would place their ad on Flixster. For movies, word of mouth is very powerful and Flixster is able to drive interactions with people who are vocal and want to share their opinions. It is within these targeted interactions that advertisers can make the most impact.

“Social media is huge, but it’s important to not look at it as an amorphous thing," says Steve Polsky, president and chief operating officer of Flixster. "You need to get people in the right mindset and catch them when they’re interested in movies -- that’s what we try to offer.”

Lotame partners with consumer goods advertisers and knows to catch users after they’ve checked their inbox and are more passive and receptive to advertising. Says Monfried, “Historically, ads didn’t respect the user and included pop ups and pop unders. We’re driving incredible business for our advertisers and publishers since we’re looking at it differently from everyone else by creating the technology and the means to do so.”

iWidget uses widgets to monetize content

“It’s really really hard to come to a website nowadays because users are using social media and are waiting for their friends to post a link," says Peter Yared, founder and CEO of iWidgets. "Instead of pushing a rock up a hill, you put it where the people are.” iWidgets gets web publishers’ content on social networking sites and also uses video players to integrate targeted offers. In these video players, pre roll clips introduce offers and encourage fans to share these offers with their online friends.

“Online advertising used to be very much like a billboard," Yared says. "Now it’s much more engaging -- your product has a core set of fans and they want to show off your products.”

Successful social media advertisers know how to get users to recommend and talk up their product without ever talking down to their market. And they know about finding the right community of friends to spend their advertising dollars.

Concerns about privacy

With all of this raw data from social media users, it would be quite easy to invade the privacy of consumers. In fact, many Facebook users don’t like how the ads on their profile page advertise weight loss, colon cleanses, and diet remedies because they feel Facebook is lifting data from their profile to specifically target them. This is in a way true. In order for social media advertising to grow and gain the consumer’s trust, it has to protect identifiable information and keep the data anonymous. In fact, respect and trust are what keep the social media community intact since users rely on strangers’ recommendations. “Yes, you can deliver targeted advertising," says Kiernan, "but acknowledge the fact there are controls to preserve consumer privacy.”

Publishing an Effective HTML Newsletter

Alice Osborn — 2008-11-25T13:10:04-05:00

Want a cost-effective way to build your business by nurturing your present and future customers? Then create an HTML newsletter.

In this challenging economy, small businesses should consider the e-newsletter as a vital part of their marketing plan to distinguish themselves from the competition and allow potential customers to get to know them over a long sales cycle. E-mail marketing software providers Constant Contact in Waltham, Mass., and iContact in Durham, N.C., help customers launch permission-based e-mail campaigns through step-by-step templates and easy contact uploads.

“Newsletters create top-of-mind awareness," says Ryan P. Allis, CEO and co-founder of iContact . "It’s important to do e-mail marketing right and branding yourself with your local customer is what an effective permission-based email marketing campaign can accomplish.”

How to get subscribers

Encourage your customers to sign up for your newsletter directly from your website where they can quickly provide their information and choose exactly what kind of information they want to receive from you. Both iContact and Constant Contact provide an archiving function so potential subscribers can view previous newsletters’ content.

Potential subscribers can also sign up for your newsletter via a signup sheet provided at your retail counter, conference, workshop, or presentation. Make sure, though, that on the signup sheet, as well as on your website, you let these signups know what the newsletter will contain and the frequency of your campaigns. Says Allis, “It’s critical that you disclose what they’re signing for so you can sell them the benefits.”

Under no circumstances should you disclose your contact list to anyone, but consider broadening your contact base by a partnership with another comparable business. You can publicize their event or workshop on your newsletter and they can do the same for you.

What your newsletter should contain

First get the basics right with a clear subject line that reveals your company’s name. The line can be creative or more straight-forward, but it must set up the reader’s expectations of what’s to follow. Allis says that once a subscriber opens the newsletter then you can continue to build your list, expose them to links, send valuable content, and get people to become clients to take action. Taking action includes customer purchases, visits, and donations. “What matters is engagement with your customers, not size, “Allis says, “You need to know what percentage of your clients are clicking through.” He suggests using list segmentation for a specific promotion and integrating video and e-mail links with social media tools such as Twitter and Facebook so you can receive more viral views of your content and receive higher click-through rates.

Next, figure out what you want to say. “Write great content," advises Eric Groves, senior vice president of worldwide strategy and market development at Constant Contact. "Stop writing about you and write about what you know. Make their experience on your newsletter fun and always have something that customers are interested in. Consider attributing survey questions to your customers to get them engaged."

How the information is presented is also important. "Make your layout look professional," Groves says. "A reader’s eye can’t digest content as if they were reading a book, so include white space and graphics. We make it easy to match your colors so your branding stays consistent.”

Groves suggests using third party content from other newsletters, with their permission, of course. RSS feeds and websites can add to your content to make your newsletter more professional.

Cheap marketing tool

Rock Blanco, CEO of Prime Numbers Technology in Medfield, Mass., a year-old travel database company would be “lost without” his Constant Contact-generated newsletter. He communicates industry trends, products, and news via his newsletter, which also serves as his public relations champion. “One hundred percent of my sales and marketing effort is managed by Constant Contact,” Blanco says. By observing his click-through rate, he’s able to assess where his subscribers are spending their time. He also uses Constant Contact’s survey function to generate advance and specific customer support for his new products.

Everyone can afford to send an HTML newsletter with iContact and Constant Contact pricing their monthly fee below $20 per month for 500 contacts. Both companies also offer a free trial.

iContact and Constant Contact give their customers numerous tools via tutorials, webinars and videos to meet their marketing needs and make them successful. “We’re here to increase the lifetime value of your customer base,” says Allis.

Rich Internet #$%?!2* -- Mistakes to Avoid

Jodi Mardesich — 2008-07-30T11:23:20-05:00

Rich Internet applications are the cornerstone of Web 2.0, the next generation, truly interactive Internet. They go beyond first wave HTML applications to offer better interactivity, speedier and more satisfying user experiences that keep customers around longer, as well as a way to differentiate your brand on the Web.

If your company’s core interaction with customers is online, rich Internet applications can prove worth the effort and expense. “Being able to differentiate the experience online is a huge win,” says Ron Rogowski, principal analyst with Forrester.

New programming and design tools such as Ajax --which stands for Asynchronous JavaScript and XML -- and Adobe Flex, a set of technologies used to build cross platform applications with the widely-adopted Flash multimedia software, are facilitating the creation of these rich applications. And unlike desktop applications, rich Internet applications can put more computing power on the client and create a seamless interaction without requiring a software download or creating possible version control headaches in the future, as desktop applications do.

Improving user experiences

A better online experience means fewer abandoned shopping carts, more sales, and more business. Rugsale.com has a “shop together” function that replicates the experience of two people shopping in a store, where they can separately look at items and then show them to each other and talk about them later -- albeit through browsers. Companies like Rugsale.com want to increase sales and minimize returns, so allowing people who will share a purchase to collaborate on that purchase online is a plus, Rogowski says.

Companies don’t need to worry about the bandwidth needs of rich Internet applications: The majority of homes have broadband connections. According to Gartner, 60 percent of U.S. homes have broadband, and by 2012, it will be even more common, as 77 percent of households adopt it. And even those people who don’t have broadband at home likely have it at work, Rogowski says, so connection speed becomes less of a hurdle to the implementation of rich Internet applications.

However, along with the flexibility of these new tools to improve user experience on your business website comes the chance of making design mistakes that end up frustrating your customers. “The root of the problem with building rich Internet applications is that designers try to do too much, making them more complex than they need to be,” Rogowski says. These design mistakes include hiding content and navigation, going overboard with animation motion, not offering helpful interactive cues, and making the applications too complex.

What not to do with rich Internet

Don’t make customers work to get to content. Interfaces should be designed to expose contextual details without cluttering the page or forcing users to lose the flow of what they’re doing. Don’t make it into a game, with customers having to search for navigational elements. “Some rich Internet applications go to the opposite extreme of forcing users to hunt for content and navigation that they might not even know is there,” Rogowski says. If users miss the navigational elements, you lose the benefits of your application. “Rich Internet applications help users stay engaged as they move smoothly through complex processes like projecting their net worth at retirement or configuring a luxury auto,” Rogowski says.
Don’t go overboard with animation and motion. Development tools make it easy to incorporate animations onto webpages. They also can expose additional information on an item when a customer rolls the cursor over text or an image, bringing up a window that layers on top of the page, without having to refresh the whole page or open a new one. While animations can be used to create interest, if overused they can end up being distracting. Ditto motion. “Sometimes the movements associated with opening and closing this content can be distracting,” Rogowski says. When used correctly, motion can bring up just the information a customer is looking for, without requiring him to open a new page, and potentially get distracted or lost.
Don’t confuse customers with poor interactive cues. Make it clear which text or images are active, by coloring the text, or providing an icon that suggests a customer could delve deeper, so that customers don’t have to guess how to navigate. “Users should be able to quickly discern what’s clickable and what’s not,” says Rogowski.
Don’t make applications too complex. Don’t try to cram too much onto the page. Companies often make the text too small, and therefore unreadable. “People would rather scroll than squint,” Rogowski says.

How to use rich Internet effectively

Rich Internet applications can be designed effectively by creating a “persona” that takes into account what the user will be doing on the site. Rich Internet applications don’t provide a lot of benefit if people can’t figure out how to use them. In addition, to get the most out of an investment in rich Internet applications, test the application with people who are actually going to use it. Don’t wait until the application is finished. Test it throughout the design process. For a small company that doesn’t have the budget for extensive usability testing, an option is to find a guinea pig at your local Starbucks.

“Rather than exposing the complicated process, make it simple for your customers,” Rogowski says. By not giving good interactive cues, you defeat the purpose. “The simpler the interface, the more powerful the tool,” he says.

Online Video Ads: How to Use Them

Minda Zetlin — 2008-07-30T11:18:48-05:00

You're browsing the Internet and you see a link to an article or video that interests you. So you click on it, but instead of getting the content you wanted, the site begins loading a video ad. What do you do? Chances are you immediately start looking for the link that reads "Click here to skip this ad."

More than half the respondents in a BurstMedia survey say they stop watching an online video if they encounter an ad, and 15 percent say they immediately navigate away from the site altogether. The message is clear: users don't like "pre-roll" video ads. Why do so many big companies continue using them?

Fifteen and 30-second pre-rolls are a holdover from television advertising, according to Glenn Pingul, vice president of marketing at the online video advertising company Mixpo. "That was taken from broadcast, where ads originally were 60 seconds, but then were cut down to 30 and 15 seconds to make them more affordable."

But whether or not these ads are effective on television, they rarely are on the Internet, Pingul says. "Just taking a 15-second commercial and repurposing it for the Internet doesn't take advantage of the benefits online video can offer."

Smarter than the big guys

The fact that so many big companies are stuck on 15 or 30 second pre-rolls means there's an opportunity for smaller and smarter companies to use online video more effectively than their larger competitors, even if their budgets are tiny by comparison.

What's the best way to take advantage of this opportunity? Begin by creating ads that are low on glitz and high on content, offering real information about your product or your company rather than high production values.

That's what Li Read did when she needed to use the Internet to reach potential customers who were mostly very far away. Read is managing broker of RE/MAX Salt Spring on Salt Spring Island near Vancouver, but 80 percent of the home buyers there come from outside Canada. "My buyers for the last seven or eight years have been 100 percent non-local," she says. Advertising in local papers and radio stations is obviously useless, so instead she uses online video ads both to create a slide show "walk-through" of homes for sale, and to help customers get to know her. Read also uses a video ad in which she talks about herself and her home-buying philosophy.

"It's my signature to the world," she explains. "Ninety percent of people start their property search on the Internet, but does that mean the old values of loyalty and connecting with customers have no value? If you're displaying who you are, that you know the inventory and you love what you do, I do think that can make them see you're trustworthy."

The video ads are fairly new, and Read can't say for sure whether they've led to any specific sales. However, 0.58 percent of people who see an ad for her properties click on it to play the video, and 1.69 percent of those who see the ad about herself do so. This compares with a traditional online advertising conversion rate of 0.1 percent, according to Pingul.

Give the user control

Another way to beat out the big guys is to give the user control over the video ad experience, and thus avoid the resentment that pre-rolls often inspire. With this in mind, Pingul favors "in-banner" video ads that run in one section of the page, rather than taking the user away to another page. "In our platform, advertisers can set video ads to auto-play when a page is loaded," Pingul says. "They can play video and audio, video only, or they can be click-to-play," Pingul says. "We test all three options, and we don't recommend autoplay with audio on. Users shouldn't be forced to consume something unless they've asked for it."

Giving the user options also allows you to test many aspects of your ad's performance -- something every successful online video advertiser must do, according to Pingul. Ideally, you should be able to measure everything, including how many people click to play the ad (if click-to-play) or deliberately turn on the audio, how much of the ad they watch, how many of them share the ad by sending a link to someone else, and how many take an action suggested in the ad, such as clicking a link to send an email requesting more information.

Ask them to do something

That call to action should be an element of every online video ad, according to Pingul. "That's the most important point about online video advertising," he says. "The key is to determine what you want the video to accomplish -- to drive leads or create actual sales. Whatever it is should be front and center in the video."

What if you just want to build visibility for your company or your brand? "You can do that too," he says. But he still thinks it's important to have a specific idea of what you want your ad to accomplish, and specific actions you want your viewers to take. "There should always be some direct response you're asking for," he says. "Don't create an ad that doesn't have a goal."

Marketing Your Business on YouTube

Renee Oricchio — 2008-07-30T11:13:48-05:00

When most people think of YouTube, most likely they think of guys dancing on treadmills and bootleg clips of Stephen Colbert, from Comedy Central’s Colbert Report.

Charles Smith, a pottery artist from Mobile, Ala., thinks about the tens of thousands of people worldwide who have clicked on his videos to watch him create works of art on his pottery wheel only to break them up at the end.

“You’ve got to have a gimmick, so I broke up the pots,” says Smith, who says about 90 percent of that traffic is students, but 10 percent is actually generating sales.

Before YouTube, Smith’s ability to market his pottery was limited to driving from town to town hitting as many art shows as possible and hoping for that occasional local news feature story to generate business.

“Now I don’t have to go to the art fairs as much. It’s too expensive with the price of gas anyway. I’ve got the website and YouTube. It’s so much better. I’m hearing from heavy collectors and galleries who’ve watched my videos. You never know who’s watching them. I’m hearing from people as far away as Japan. It’s a great tool and best of all – it's free,” says Smith.

Michael Miller, author of YouTube for Business: Online Video Marketing for Any Business (Que 2008), points to Smith as a perfect example of how a small business owner or entrepreneur can hit it big on YouTube. “YouTube gets 20 million viewers a month. That’s a really big market to tap into and there are no placement costs. It’s low cost and high potential,” says Miller.

However, if you think it’s as simple as uploading a commercial spot or corporate video and waiting for the e-mails to pour in demanding your products or services; think again. “The people who fail on YouTube are the people who don’t understand the community aspect of YouTube or what attracts viewers,” says Miller.

Attracting eyeballs

Eighteen months ago when Charles Smith put up his first pottery video that has since generated more than 37,000 unique visitors, he instinctively knew what he was doing by coming up with a gimmick. “YouTube viewers want to be entertained,” says Miller, who offers three categories of videos that generate traffic.

Informational videos. The Stone Brewery out of Escondido, Calif. sets a great example of this strategy. The little independent brewery has more than a dozen or so videos posted on YouTube featuring various behind-the-scenes tours of their operation led by Brewery owner, Greg Koch. It’s an engaging way to connect with the story of the brewery and thus, get interested in their beers. His videos generate typically between 1,500 and 2,000 visitors.
Educational videos. Charles Smith’s how-to instructional videos demonstrating his pottery wheel highlights this successful approach. “A lot of people come to YouTube wanting to learn something. They might run a search for ‘how to build a bookcase’, for example. So if you sell auto parts, you might put together a tutorial how to change your oil. The result is driving traffic from the video to your website,” says Miller.
Entertainment videos. One of the greatest successes of guerrilla marketing on YouTube would have to be Blendtec, based in Orem, Utah. Blendtec sells high end industrial strength blenders so strong they are touted to be able to blend just about anything. Their series of videos on YouTube -- called “Will it blend” -- are wildly popular with some of the pieces generating more than five million viewers. Each quirky piece features an attempt (almost always successful) to blend something both odd and tricky; like hockey pucks, an iPhone, glow sticks, marbles, even a rake handle.

Getting noticed on YouTube

Producing an engaging video for YouTube is just the first step in launching a successful marketing campaign on YouTube. With 20 million viewers a month and literally millions of videos to choose from, it’s easy to get lost in the crowd.

Here are some tips for making your company’s videos rise to the top and leveraging them to help your business:

Participate in the YouTube community. People forget that YouTube has an active community, similar to eBay. Miller suggests getting your name around by commenting on other videos and joining existing topic-oriented groups or creating one if there isn’t one in your niche area.
Make sure your videos direct visitors to your site. Tens of thousands of viewers watching your videos sounds great, unless they have no direction to find your business afterwards. Make sure you include your Web address and other company contact information. Miller recommends creating a special “landing page” for viewers coming to your site from YouTube. It should have a similar look and feel to YouTube and intuitive navigation to close the deal on transactions or gathering client leads; whatever your marketing objective may be.
Using the right production values. Believe it or not, spending too much money producing the video is more of a problem than spending too little. “If you look too slick, it may work against you. Most YouTube videos are shot with a $300 camera. YouTube videos are 320 x 400 pixels. You could spend $100,000 on a video, but no one is going to see it,” says Miller. Less important is the equipment, while more important is technique. “Talking heads, stationary shots work best. That’s why spots like Blendtec work so well. It’s a guy standing at a little table with a blender. Audio, however, is something people don’t think enough about. If you’re using a camcorder with an external mic input, use it. Invest in a decent microphone,” says Miller.
Choose your keywords carefully. There’s only one way viewers find you on YouTube and that’s the site’s search engine. Using the right keywords is essential. Choose words that best fit your subject area and niche. Keywords should draw in a broad enough audience to get the exposure you seek, but not too much. With 20 million viewers passing through the site, businesses should use words that weed out traffic too. “I know of a realtor in Florida who uses YouTube. For her, she doesn’t want 100,000 hits. She wants nine good hits,” points out Miller.

SIDEBAR: Other Benefits to Using YouTube

Rising through the ranks. Now that Google owns YouTube, there’s the added benefit that a video on YouTube automatically goes into Google’s search engine. Videos tend to catapult to the head of the line. It’s a great way to increase your site visibility in the rankings.
Spare your own site the bandwidth drain of streaming video. For some companies, generating new business or exposure via YouTube may be low priority. However, some are finding it’s a great place to park video clips using YouTube’s bandwidth with a simple link from the corporate site.
Create your own channel and customer base. Anytime you post a video, YouTube creates what is called a profile channel. Viewers can subscribe to that channel. Businesses can then send out e-mails to those subscribers.

Stop E-mail Marketing from Resembling Spam

Jodi Mardesich — 2008-05-26T10:21:28-05:00

Using e-mail marketing effectively can increase business, especially if the lists you target contain former customers who might be interested in hearing about sales and new products. A well-crafted, targeted e-mail can receive a 10 percent to 15 percent response rate or more, according to Gartner. However, taking the wrong approach -- sending out mass e-mails -- is tantamount to walking a tightrope. Any unsolicited bulk email is considered spam, and can turn off customers or result in Internet service providers (ISPs) blocking your e-mails in the future.

On the positive side, sending e-mail is practically free. Costs can be lower than $1 per thousand emails sent, compared to average costs of $15, $500, and $1,500 per thousand impressions for online display ads, direct mail, and television ads, respectively, says Julie Katz, an analyst with Forrester Research.

On the negative side, e-mails may be blocked by the recipients’ spam filters and not make it through. More than 15 percent of permission-based e-mails are blocked due to poor e-mail hygiene, according to Gartner, and that rate may increase as spam filters get tougher in the future.

Make sure your e-mails get read

Here’s how to ensure e-mail marketing reaches targeted customers and avoids the spam inbox:

Make sure that recipients want to hear from you. Move to an opt-in policy, rather than an opt-out policy, Gartner says. “Avoid sending e-mail to customers unless you explicitly ask them permission to do so,” says Peter Firstbrook, Gartner analyst. Some experts advise adopting a “confirmed opt-in” policy, where subscribers must return an invitation before they are cleared to be added to a mailing list.
Create lists wisely. Never buy e-mail addresses from another company, advises Chris Thompson, a volunteer with the Spamhaus project. “No legitimate company will ever sell you a list of 'opt-in' e-mail addresses,” Thompson says. “Anyone selling you lists of e-mail addresses is very simply a spam outfit.”
Tend your lists. Respect customers’ wishes and quickly remove them from lists if they unsubscribe, checking this at least once a week. “If outbound e-mail programs and e-mail servers are not meticulously managed, then it is likely that normal business e-mail will be disrupted by business partner and consumer spam filters,” Firstbrook says. This needs to be addressed company-wide, from all departments participating in e-mail marketing.
Stay out of spam inboxes. Don’t look or act like spam. Spam filters look for certain words, phrases, or spelling, such as words spelled out in all capital letters. Embedded images, especially those retrieved from a Web server, or large files sometime trigger spam filters. So does the use of carbon copy or blind carbon copy. “Some ISPs will increase the spam score of e-mail that is not specifically addressed to the actual recipient,” Firstbrook says. “You can manually check your e-mail against some open-source solutions to see if they will trigger false positives.”
Don't alienate your ISPs by racking up complaints from those receiving your messages. It’s super easy to report spam; with some ISPs, it’s a one-click move. Monitor complaints. E-mail marketing software can automate this.
Don’t alienate customers. Some customers will report e-mail as spam simply because they don’t like it. “That doesn't affect our listings,” says Spamhaus’ Thompson, “but it might affect the sender's deliverability at specific ISPs.”

Let recipients know who sent it

Authenticate your e-mails so that recipients can verify who is sending them. Some companies are providing services that improve delivery rates and responses because they have trusted relationships with ISPs and public networks. Pet supplies retailer Petco recently claimed it saw a 40.5 percent improvement in click-through rates and an increase in profit of 3.5 cents per e-mail since it began using third party email authenticator Goodmail Systems.

It's not always easy, and senders need to be careful to provide satisfying content to subscribers, making sure that unsubscribes work, and that technical parts of e-mail delivery are also obeyed so that they don't annoy the postmasters of receiving networks, Thompson says. “But done properly, non-spam bulk mailing can be highly effective at retaining customers and enhancing customer satisfaction.”

Tech Talk: Startup Improves Online Ad Strategy

Elizabeth Wasserman — 2008-05-19T13:39:29-05:00

Smartsheet.com, a Bellevue, Wash.-based software startup, launched its first product in the fall of 2007 -- online team task management tools. The business, which has just 12 employees, had to be smart with its advertising dollars. Vice President of Marketing Maria Colacurcio tells IncTechnology how it revised its online ad strategy to get more bang for the buck.

Elizabeth Wasserman: How did you first advertise your business and products?

Maria Colacurcio: We started out doing primarily paid search on some generic terms. But we weren't getting the results we wanted.

Wasserman: What was wrong with it?

Colacurcio: The market we're in is very noisy. You have everything from online project management at the more complex end to the wiki market and free form collaboration at the other end.. Everyone is pounding on the same message: Collaboration. We were trying to figure out a way to differentiate ourselves and have a voice in the market. So we decided to look at our customers -- at what pain points they have and what problems they're trying to solve. Instead of saying, "Collaborate more efficiently," we'd say, "How is our customer in HR struggling in terms of collaboration?" They're dealing with the hiring process and have to deal with consolidating information from hiring managers, new employees and upper management. They have to keep track of job postings, resumes, interview notes and references. They need to streamline the hiring practice and that's how we could help. So we wanted to leave a very generic model and go to a very specific advertising model to reach more qualified potential customers.

Wasserman: So what new techniques did you try?

Colacurcio: The first was going from specific to targeted. Instead of having one landing page or five generic landing pages that we'd send everyone to, we started splitting out specific landing pages and now have between 40-50 landing pages. They're targeted at really different audiences. One could be targeted at an events manager. Another could be targeted at someone planning a trade show, and trying to streamline processes and make them more efficient. Once we had these 40-50 landing pages, we had to figure out how we could really optimize the landing pages. That's when we undertook a multi-variate testing project with Widemile. We didn't want to have to test each one -- because that would be a really big project to take on -- so we picked out top five.

Wasserman: What is multi-variate testing?

Colacurcio: Multi-variate testing consists of testing multiple elements in a webpage very quickly to identify the optimal combination. We had six elements that we were testing. One test element, for example, was a quote. We tested how effective a customer quote on the landing page was as opposed to an industry analyst quote. The customer quote might be, "I've used this product and it's been great." The analyst quote might be, "I've vetted Smartsheet and it's a great company." What we found was that the analyst quote was much more powerful. They felt much more comfortable that we were vetted by analysts as opposed to by a customer.

At the end of the day, we tested over 1,000 different combinations. As you can see, it’s not practical to design and build over 1,000 discrete webpages, and that’s the beauty of multivariate testing. We were really able to discover the ideal landing page and which factors are most important. What you find is that things like big blocks of copy don't really make a difference. People don't read them. People do read captions under a picture or a diagram. They think that's important so that is a great place to have a couple of sentences of copy.

Wasserman: What results have you seen?

Colacurcio: We've seen twice the number of conversions of people who click on our ad and are converted into customers. With our product being a software-as-a-service, people can sign up to try out product or sign up for an account right there. We're still spending the same amount on Google Adwords. But while before we were seeing a conversion rate between 4-5 percent, after the testing we saw a conversion rate of 6-12 percent. It pretty much doubled.

Wasserman: Why is it so important for new business to get a bigger bang for the buck through advertising?

Colacurcio: As a new business, there is so much value out of online advertising and paid search. As a small company, we really wanted to make sure we were optimizing every dollar. If I’m spending a lot on the Google side, I want to make sure I'm doing everything I can to capture those people and get them to try our product. It's an investment that's absolutely worth making.

The New Advertising Medium: Social Media

Anand Rajaraman — 2008-04-03T11:08:32-05:00

A recent piece in the Economist raises a provocative question: social networking sites such as Facebook, MySpace, and Bebo have grown tremendously in usage, but are they viable businesses? In other words, is it possible to monetize these services in an effective fashion? To answer this question, it helps to take a step back and look at the monetizability of social media as a whole.

Since most social media sites rely on advertising revenues, let us restrict ourselves to advertising as the monetization mechanism. Regardless of the ad model used --cost per impression (CPM), cost per click (CPC), or cost per action (CPA) -- advertisers value three key measures: reach, frequency, and targeting. Many social media sites certainly score high on reach and frequency, but how do they fare on targeting? Targeting is key, because it determines the CPM rates advertisers are willing to pay. And CPM rates vary very widely: from $16-20 for TripAdvisor to $0.10 for Facebook and MySpace.

What drives such a wide divergence in CPM rates among social media sites? Are the low rates at social networking sites a transient aberration, with higher rates around the corner?

Is there a simple model to predict the targetability of different forms of social media?

Remarkably, there appears to be a single factor that explains a great deal of the available data. Consider the difference between a Facebook profile and a TripAdvisor travel review. A typical pageview on the former is by someone known very well to the creator of the profile -- a close friend or acquaintance. On the other hand, a TripAdvisor travel review is seen by people completely unrelated in any way to the person or persons who wrote the reviews on the page.

We quantify this distinction with a measure called “affinity.” The affinity of a social media service is the average closeness of relationship between a content creator and someone who views that content. The affinity of Facebook is very high, while the affinity of TripAdvisor is very low.

Now for the key observation: There is an inverse relationship between the affinity of a social media service and its targetability. Why is this true? The act of viewing a Facebook profile gives us very little information about the viewer, other than the fact that she is friends with the profile creator; when someone views a TripAdvisor travel review, she is definitely interested in traveling to that location.

There is a strong inverse proportionality between the affinity and the targetability for several forms of social media, with a couple of outliers. We’ll get to the outliers in a moment; for now, note that social networks and photo-sharing sites have even higher affinity (and therefore lower targetability) than e-mail. This is because we often e-mail people we don’t know or know only in passing. Instant messaging (IM) has the very highest of affinities: my IM buddy list includes only my very closest friends, who I trust with the ability to interrupt me any time of the day. (See graphic at my blog.)

What about the outliers? Video sharing sites, such as YouTube, have low affinity, because the majority of people see videos posted by people they don’t know. However, the targetability is lower than we would expect, because of a compensating factor: herding. Most people see videos featured on lists such as “Most Popular,” which reduces the targeting value of such videos. This is also true of social news sites, such as Slashdot and Digg.

A couple of caveats:

This is a broad brush-stroke, and individual services might well differ from the overall category. For example, popular blogs have much lower affinity and therefore much higher CPMs than the typical blog.
Targetability is not the only factor determining CPM; there are others. For example, certain viewer intents are inherently more valuable than others.

But with these caveats, this simple model is highly instructive. We may conclude that the CPM rates of IM services will not exceed those of social networks, which will not exceed those of e-mail. These are inherently low CPM businesses.

What can social media sites do to increase their CPMs? There appear to be two options:

Create sections of the network that are more topic-oriented, and less about individuals. For example, band pages and groups on MySpace, and Facebook groups.
Mine individuals’ profiles, or their off-site behaviors, to target them behaviorally rather than contextually. This approach carries with it dangers of privacy violations, as the Facebook Beacon fiasco demonstrates.

If social networks are to become a viable business, and therefore a viable advertising medium for businesses, particularly small and mid-sized companies, they need to aggressively pursue one or both of these approaches. Of course, it may be possible for some services to sidestep this question entirely and develop business models that don’t depend on advertising. We haven’t seen such a model emerge yet, but there is so much creativity and ferment in this space that it might just happen.

Anand Rajaraman is co-founder of the search engine Kosmix. He also sits on the board of several technology companies and currently teaches at the Computer Science department of Stanford University.

Tech Talk: Online Video Helps Travel Website

Elizabeth Wasserman — 2008-03-31T10:23:53-05:00

WeNeedaVacation.com is a Web-based travel business started in 1997 in Wellesley, Mass. to help match vacationers with rental properties in resort locations. Founders Joan and Jeff Talmadge now have seven employees and list more than 3,500 properties on Cape Cod, Martha's Vineyard, Nantucket, and in Florida. Jeff Talmadge tells how digital video is adding a new dimension to his business.

Elizabeth Wasserman: Tell me about your business.

Jeff Talmadge: We advertise private homes or condominiums on behalf of homeowners on the Cape and Islands off the coast of Massachusetts and Florida They pay us to advertise. We use the classified advertising model. Our goal is to find as many vacationers to book those homes as possible. Our success is directly related to how well we can attract vacationers to our site versus other competitive sites. Their interest is what ultimately makes the homeowners happy because they get the booking.

Wasserman: Why did you decide to deploy video on your site?

Talmadge: It was a very exciting and difficult and yet exhilarating decision. Since beginning of our site 10 years ago, we’ve prided ourselves on being able to take the latest technology and provide it to homeowners and vacationers. We’re always looking for something that gives us the technological edge. Technological edge, in turn, gives us an edge in capability and performance. Video came about due to an awareness that the whole social networking world was exploding in front of our eyes. We wanted to be a part of that. Last year, we did a photo contest to dip our toe in that water. We had thought about video in the past. We had been approached by the classic virtual tour companies. It sounded too expensive. Didn’t see how anybody could make any money at it. We just put it on the back burner. Then we got a call from Fliqz and the rest is history. They really made it so easy and affordable.

Wasserman: What were some of the challenges?

Talmadge: We had a really tricky problem figuring out how to make it financially sensible to us. We wanted to be able to charge for it. And yet charging too much would be kind of like shooting ourselves in the foot. We felt in essence there were benefits to our two main constituents. Vacationers more and more need a vacation with the stresses of life. Our name is poetic. The more information they have about a property before they go, the more confident they are that they’re making the right choice. With over 3,000 homes on the Cape and Islands alone, there is a dazzling array of homes. Which is the best home for me and my family and my set of friends? Over the years, we’ve included the addition of many pictures, snapshots, still photography and that’s been wonderfully helpful. We even have a photography service to go out to a home and really make it sparkle. But there’s nothing like video to make a vacationer feel like they’re there. It’s the next best thing driving to the home.

Wasserman: Do homeowners shoot their own video? How does it work?

Talmadge: That again was a really crucial piece of puzzle. If we had to do it all, it would slow things down too much. Homeowners are absolutely able and willing to do it. We also have services where we can go out and shoot them. The crucial strategic decision here is: Do we believe with some help from us that our homeowners can do this easily? If they can’t, why bother. We’ll get five, 10, 15, 20 videos shot by us and that’s it. Unfortunately, we decided to start offering this in August. It’s been a bit of a tough sell over the winter. So far we have had a few submittals from homeowners, but the weather was a bit of a showstopper.

Wasserman: How difficult was this to set up?

Talmadge: It certainly took a few days of work. As programming tasks go, it was a piece of cake. Our issues were not at all with the Fliqz platform. The problems were on our end: how do we price it, how do we do it? It’s both a software and a service. They provide a set of components that enable you to upload video to their site and then play that video on your own site. We wanted that to be as easy as possible for our homeowners -- we didn’t want them to have to upload videos directly. So we had to do some programming of our own to get the videos from them to us and then we upload them. What they provide is an upload capability that is programmable. We can do it automatically through API calls, through Web service calls to them. Then once the video is up and encoded, they return their unique identifier to us, and we stick that in our database. We then rebuild our listing as the homeowner submitted it and we add a button that says “Play this video.” The video plays in our little custom player.

Targeted Search -- How to Optimize It

Mary O. Foley — 2008-02-29T10:05:33-05:00

Christine Churchill likes knowing exactly who will be looking at the Google-based text ads she develops.

“If you’re targeting an audience over 55, you might make the type face of the ad a little larger,” says Churchill, the president of KeyRelevance, a Dallas-based search engine marketing firm. “If it’s for women, the ad and the website [being advertised] should carry more detail, and more content, because women prefer to read more details,” she says.

Until recent years, those purchasing ads on Google AdWords, Yahoo or MSN meant writing a one-size-fits-all ad and trying to come up with the best possible keywords and optimization data for that ad to get it the best exposure. But now, the major search engines are offering more customized options for ad placement, such as demographic targeting (age, sex, or ethnicity), geographic targeting, and contextual targeting.

Ads targeted by age, sex, ethnicity

Since 2006, Google has been able to place ads aimed at women on websites found to receive high traffic from female customers. Other search engines have since followed suit. The demographic targeting complements Google's existing contextual targeting functions, which have always allowed an ad for shoes, for example, to be placed next to a New York Times online article about shoes. Googles ads long able to target readers in just one state can now also target just Asian readers. or just adults with no children.

According to a Google spokeswoman, Google does this by plugging data collected by comScore Media Metrix into its search algorithm, and figuring out which websites are frequented by people meeting the desired category. Then targeted ads can be placed at those sites at the request of advertisers. But companies using the service say they also supply some data to Google as part of securing their ads.

The targeted offerings don’t cost companies anything more than other ads, according to Google. Companies are still charged on a “pay per click” fee schedule, where the company pays a set fee -- sometimes just a few cents -- each time their ad is clicked on.

For best results, know thy customer

As with any advertising, targeting the right consumer is the name of the game, so the options offer considerable opportunities for small to mid-sized businesses, experts say. But to get the most out of these offerings, you need to do your homework.

It’s important to refashion your website so that it can collect data on visitors, such as their sex and age, says Frank Travisano, CEO and founder of Impaxion Inc. and Linkateer, two Gilbertsville, Pa.-based providers of search engine optimization, design, and marketing services.

“It always makes sense to do this, for your business, so you know who’s visiting your website.” Travisano also notes that the website must include consent information, so that visitors know that non-identifying information may be shared for advertising purposes.

Armed with this information, your company can figure out which groups to target with its ads, and write or format them accordingly. Then they can be placed where you want them.

The downsides? Privacy may be one. “Hopefully, Google is just using the information [from advertisers] to better serve their ads,” says Travisano. Churchill adds that some of her clients admit to giving phony data to Google about their clients so that the privacy of their customers is protected. However, Google says it is mainly using comScore data, not customer data, to power its targeting.

But overall, those using the new service note that everyone stands to gain. “Google and the others get more dollars per click, and advertisers get a higher value per click,” says Travisano. “It’s a win-win.”

SIDEBAR: Vertical Search Engines

While most small businesses look to Google and MSN’s search engines for the biggest bang for their advertising buck, business-to-business (B2B) vertical search engines may be the up-and-coming place to go. Outsell Inc., a market research firm, forecasts that the B2B vertical search engine market will reach $1 billion by 2009.

What verticals can offer that the big general search engines don’t is context, notes Mark Cordover, CEO of IT.com, an information technology-specific vertical search engine. “If you’re an IT person, and you type in ‘soap’ on Google, you’ll get the kind you wash with, not something in the IT world,” he says, noting that SOAP in IT lingo refers to simple object access protocol. “But if you tell me you’re an IT person, you give me context that lets me give you exactly what you want.”

For this reason, vertical search engines are likely to grow in popularity. They offer businesses the chance to access the critical content they need faster than with general search engines. Also, they offer collaborative opportunities not possible in the general category, says Cordover. “Our users want peer reviews. They want to know who has used something, and what did they think about it. They can get that from us.”