ROI
WIRED Sees a Future in “The ROI of Free”
Chris Anderson, editor in-chief of Wired and author of the bestselling book-turned-Web 2.0-buzz-phrase, The Long Tail, launched a juicy cover story today.
In “Free! Why $0.00 is the Future of Business” — which, as one might expect, is available for free at Wired.com* — Anderson argues that, across industries, businesses are baiting new customers with free stuff.
Of course, that’s nothing revolutionary. But it is evolutionary in the sense that we’ve come to expect some level of “free” something. In fact, we’re willing to pay top dollar for “free”! (Here’s how Ryanair does it.)
Back in 2002, Bryan evangelized “The ROI of Free“…
“An innocuous question can hit you where you live. I should have expected one day someone would ask me, “How do you measure your ROI for that?”
How does someone who writes “ROI Marketing” justify publishing so much content for free? Do we charge for advertising, rent our list, or bombard those names with commercial offers? No. In fact, Jeffrey, my brother and partner who handles such things, estimates we’ve invested about $100,000 developing free content for our newsletter, free whitepapers and other publications. How do we measure its ROI?
As our CFO will tell you, that $100k figure is nothing compared to what we’ve spent since “The ROI of Free” was published. Still, our dedication to free content remains — and for good reason.
Much like he did with The Long Tail (which also began as an article), this latest piece is Anderson’s way of cleverly cross-promoting-in-advance his upcoming book, FREE, which won’t be available in 2009. Looks like Anderson’s on his way to generating some positive word-of-mouth for the magazine and the book.
Has your business discovered the ROI of Free?
*Putting their money where your mouth is, WIRED will send you the print edition of its March 2008 issue for free — so long as you’ll offer a name and mailing address in exchange. 
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Written by:Robert Gorell
How Viacom Could Have Avoided the Writers’ Strike
In a move that should add fuel to the debate over the writers’ guild strike, MTV Networks has announced that all episodes of its grotesquely funny cartoon satire hit, South Park, will be shown in their entirety online. MTV’s decision to host the South Park archives online for free comes just over a month after they did the same thing for The Daily Show with Jon Stewart, resulting in significant boosts to traffic and ad revenue.
While the move is win-win for its creators, Trey Parker & Matt Stone (also the writers), their lawyers, Viacom (MTV’s parent company), the advertisers and the fans, what’s striking, so to say, is that South Park is the only show on MTV’s roster sitting on a contract for a 50/50 digital ad revenue share.
Although it was smart of Viacom to ink an online revenue share with the people behind South Park, it seems odd that such offers aren’t available for writers of The Daily Show or The Colbert Report, both of which are huge ad-money makers and award winners for the company. Here’s what Viacom told The New York Times back in August when South Park’s $75 million deal was penned:
“Doug Herzog, president of MTV Networks Entertainment, acknowledged that the 50-50 digital deal, which was approved by Philippe P. Dauman, Viacom’s chief, would set a precedent. If this is seen as a bold stroke, all the better, because it’s going to take bold thinking to move ahead,” he said. But he said it was justified by the “South Park” team’s stellar track record and by the changing balance of power between the buyers and creators of entertainment.
[…] Adding to the likely interest in the revenue-sharing pact is that digital income is one of the key issues confronting negotiators for the Hollywood studios and the guilds representing writers, directors and actors, who want to ensure they are compensated fairly for their work for the Web, mobile devices and other technologies still in their infancy.
“Talent will look at this and say, ‘Why not us?’ ” said Warren Littlefield, a television producer and former president of NBC Entertainment. “Unfortunately, what you’ll probably find is the response is, ‘We’ll tell you why not you: because you haven’t achieved what they’ve achieved.’ This is based upon a decade of proven success; it’s not a deal that’s made on the come, it’s not a deal made with an established creator who’s about to create something new. It’s 10 years in.”
While it’s nice that Viacom has finally discovered how to leverage “the ROI of free,” many fans — and certainly the writers — have a hard time viewing the media giant’s selective awareness of online marketing as anything but greedy. So, what do writers for The Daily Show, now in its 11th year, really have to say to the execs?
John Oliver: “…all our Daily Show clips were pulled off YouTube by Viacom, who is suing them for a billion dollars. That was not at our instigation – we were happy for people to watch the clips. But instead they wanted to set up a website where they can sell advertising while the clip is buffering, although I thought we were at the point where clips don’t need to buffer anymore. So you have to watch a commercial for thirty seconds or whatever. So they’re clearly making money on that; they’re also clearly making money because they’re suing YouTube for a billion. So that seems quite strange when they’re saying, ‘Well, there’s no money to be made off the internet but we’re suing YouTube for a billion dollars.’ That takes spectacular ba…”
…what I think John’s trying to say is that, well, this YouTube video sums it up.
Even The Daily Show’s friends (colleagues?) in the “real” news media are hearing the echoes from this void. NBC News anchor Brian Williams writes…
Jon Stewart and his colleagues in comedy — along with the writers who support them — serve an invaluable purpose by skewering the pompous and deflating the egos of the high and mighty. They function almost as a separate branch of government. We need them, and we miss them.
But Slate.com’s Dana Stevens said it best:
…The Daily Show is the ultimate Web-ready television show. It’s divisible into discrete chunks (the headlines at the top of the show, followed by reported segments and interviews) that tie in to the political and cultural conversations of the day, and those chunks can easily be collected, shuffled, and exchanged among friends like trading cards.
It’s unfortunate that it’s come to this. In a strike, everyone loses. Had Viacom invested in online channels years ago, they wouldn’t be awkwardly wading through bad word-of-mouth as they sue YouTube and play favorites with their writers.
This is a branding problem, wrapped in a PR problem, spawned by a marketing problem. But the good news for Viacom is that it could all end tomorrow with an online revenue share agreement.
[Picture taken from myyearofnewthings on Flickr. Originally seen at TechCrunch.]
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Written by:Robert Gorell
EBay Lowers Reserve on Skype
Let’s say you need to unload a promising-yet-way-overestimated tech company you bought for $2.6 billion in 2005 dollars. Where do you turn — eBay? What if listing a “Buy it Now” price isn’t an option? What if you are eBay?
The New York Times has some bubble-bursting hindsight on the broader effect of eBay’s soured Skype acquisition.
Skype earned $90 million during the second quarter of 2007, far below eBay’s projections. EBay said in a regulatory filing that the charge was “the result of the updated long-term financial outlook for Skype.”
The Skype deal helped to initiate a renewed acquisition frenzy in the online world, and a return to what some call a bubble mentality. After the spectacular dot-com flameout seven years ago, Internet executives pledged to begin judging technology companies by revenue rather than by something as ephemeral as “eyeballs,” or traffic on a Web site.
But somewhere along the line, the high-tech industry reverted to its old form.
“We are almost going back to year 2000 types of errors,” said Aaron Kessler, a senior Internet analyst at Piper Jaffray. Internet companies “are buying users instead of revenue and profitability. That’s what eBay did for Skype. They saw a great asset with tons of users but no clear monetization path.”
How bad’s the bleeding? Ebay says it’s $1 billion-bad. Silicon Ally Insider’s Henry Blodget says it’s probably $1.4 billion-bad. And, on The Next Big Thing blog, Don Dodge even adds Skype to his list of “Worst Billion Dollar Acquisitions of All Time”. Says Dodge:
I wrote a post “The 10 Worst Billion Dollar Internet Acquisitions of All Time” Skype didn’t make the list at the time because it was too early to tell. Not anymore. It takes a spot very high up on the list. AOL, Lycos, and Excite are still the clear leaders in this dubious category.
If you’re reading this, eBay, we may not be able to provide much comfort — but here are some tips for selling “it” on eBay.*
[*Please Note: The term “it” may not apply to “IT”.]
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Written by:Robert Gorell
Is Your Lead Generation Site Proposing Marriage on the First Date?
It was truly one of the scariest forms I’ve ever seen. It was an example Patricia Hursh of SmartSearch Marketing gave at Search Engine Strategies, Toronto. It was a form a B2B site (pictured) that was, like, 9 pages long, and asked everything from your company’s annual sales to your budget for the year to the social security number of your first born.
OK, I made up that last one, but it really was that bad. The even scarier thing is, I’ve seen hundreds of forms like it.
When someone does a search and lands on your website, they might have some familiarity with you if you’re a well-known brand. Or, more likely, they have little-to-no awareness as to who you are and what you do. Basically, you’ve just met. So, why ask for so much personal, sensitive information on this first meeting? Are you proposing marriage when you should be asking him/her out for coffee?
Part of the problem is, the only way many B2B or lead generation sites measure success is by the number of people who fill in a lead form. That’s a pretty big step. Many visitors to your site won’t be ready to make that kind of a commitment to you yet. So, do you just write them off? Do you consider that a failed conversion?
Don’t forget, there are other micro-conversions to consider. Your visitors might agree to a cup of coffee, or a short “date” to find out more about you. Examples of these types of conversions could be as simple as someone taking the time to read your ‘About Us’ page, or watching a short product video, or signing up for your newsletter. These are conversions. You should be planning and measuring them.
When trying to measure the ROI of your website, you need to take into account the ways you engage prospective customers when they’re earlier in the buying process. Yes, some people are ready to start some sort of relationship with you; meaning, of course, that they fill out the lead form. (You’re only asking for the least amount of information, right?).That’s a measurable success. But don’t forget those who were engaged enough to spend some time on your site, gather information, watch a video, download a whitepaper, sign-up for a newsletter, and so on.
All these micro-conversions indicate your visitors are at least engaging with your brand. They may only be willing to commit to a cup of coffee right now, but that’s an encouraging first step!
Several of the B2B panelists recommended this report by Enquiro. (Notice the wonderfully short registration form ) I haven’t read it yet, but it got high marks from the panel. Let me know what you think!
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Written by:Holly Buchanan
Holy Traffic Cost Inflation: Paid Search ROI Down 43%!?
With paid search, even the most shocking news isn’t really. Consider these figures just in from ClickZ:
Despite continued growth in search spending, ROI on search campaigns in Q1 was down 43 percent since last year, according to the latest search trend report from DoubleClick’s Performics unit. That makes sense when you think about it, since more and more advertisers are competing for the same limited pool of clicks, bidding up prices and squeezing their margins in the process. The winner in this bidding war is Google. The losers: everyone else.
. . . average cost per click and cost per keyword both spiked. Campaigns included six times as many keywords with a cost per click above $1 and used 54 percent more keywords than they did a year ago.
Isn’t it time marketers finally looked beyond paid search, and focused on organic? As overall traffic costs rise, businesses should take conversion more seriously; not just as a metric, but as an integral part of their strategy. What makes people convert? Well, relevant content that answers the visitor’s questions–and in her own language–is a start. As it happens, that’s also what boosts organic rankings.
Building a site that gets organic results and converts takes dedication–and may not come cheap–but it’s the surest path to ROI.
Has traffic cost inflation been a wake-up call for your business?
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Written by:Robert Gorell
Investors, Speculators, Shareholder Value, and Other Half-Truths
Business Week columnists Clayton M. Christensen & Scott D. Anthony make some pretty provocative comments about maximizing shareholder value in their column “Put Investors In Their Place: Why pander to people who now hold shares, on average, less than 10 months?”
For instance…
Perhaps it is time for companies to adjust the paradigm of management responsibility:
“You are investors and speculators, not shareholders, and you temporarily find yourselves holding the securities of our company. You are responsible for maximizing the returns on your investments. Our responsibility is to maximize the long-term value of this company. We will therefore act in the interest of those whose interests coincide with our long-term prospects, namely employees, customers, the communities in which our employees live, and the minority of investors who plan to hold our securities for several years.”
They continue to argue for restructuring public companies. Whether or not you agree, it’s worth a read.
I’m sympathetic to the argument that management has to act in the long-term interests of not only of shareholders, but of the company’s greater constituency. It’s a higher standard than mere shareholder ROI, and more difficult to manage, but it reduces volatility and forces management to focus on what matters.
Wouldn’t it be nice if companies could focus on what matters, and not simply on this quarter’s results?
Instead of acting like John Wayne, management should be more like Einstein at the OK Corral.
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Written by:Jeffrey Eisenberg
