Archive for March, 2008

Deceptive marketing and lead generation

Thursday, March 27th, 2008

valueclick logoMy most recent article for The Industry Standard is up on the site now: What the ValueClick settlement means for the future of lead generation. Why don’t you go read it? And hey! Why don’t you leave a comment if you have something to say.

For those of you who don’t know the background to the story, ValueClick just recently agreed to pay $2.9 million to settle the FTC allegations that they were doing bad things with their business, including:

1) Lying to consumers, advertising free offers, but then requiring consumers to pay or purchase to qualify for those “free” offers.

2) Violating federal law, specifically, the CAN-SPAM act.

3) Not securing customers’ financial data, even though they promised to secure it.

The press release from the FTC with the complete list of charges is here.

ValueClick will admit to no wrong-doing. Here’s what ValueClick says about the charges:

“The FTC alleged that the Company utilized deceptive marketing practices that violated the CAN-SPAM Act and FTC Act. In an effort to resolve this matter, ValueClick agreed to a settlement payment of $2.9 million without an admission of liability or conceding that the Company violated any laws.”

Having worked in the lead generation industry for years, I know that this is not the norm in lead generation and that most lead gen companies follow solid business practices; but yet, these types of scams do happen fairly frequently. Lead generation is a big business in the U.S. (see images below) and gettng bigger as companies realize the value of generating data that can provide specific metrics and ROI. So companies will use many different tactics – not all of them aboveboard – to generate leads for their clients.

If you’re doing lead generation through a third-party provider, make sure that you get them to explain in detail the following things:

1) What the environment looks like in which they will be generating leads. If they are creating a registration form, make sure that they show you what it looks like.

2) How they are generating the traffic that drives the leads.

3) If they are doing “co-registration” to generate their leads. Co-registration is the practice of including a check box at the end of another registration form so as consumers register for one thing, they also can “opt-in” for your thing, too. If they are doing co-registration, find out if the box is pre-checked, and if it is, run the other way.

4) Ask for a client reference – they should be willing to let you talk to someone else who has used the service and found it reputable and helpful.

Here are those lead generation numbers that I promised. This image is taken from the BtoB Magazine’s Interactive Marketing Guide for 2008, which has a lot of great online advertising data.

Lead generation statistics

New B2B online advertising data out this week

Thursday, March 27th, 2008

BtoB interactive marketing guideBtoB Magazine just released its Interactive Marketing Guide for 2008. (PDF here) The 36 page guide features a lot of great data about the state of online advertising, including the following gems:

– In 2007, U.S. marketers’ best performing advertising tactic was search engine optimization (SEO) at 57%, followed by behavioral targeting (44%) and email house list (42%). Rich media ads, which rated at 28% last year, trailed the list at 7% in 2007.

– In 2008, U.S. ad spending will break out like this:
         – Search: 40%
         – Display ads: 21.5%
         – Classified: 17%
         – Rich media/video: 9.5%
         – Lead generation: 8.3%
         – Sponsorship: 2%
         – E-mail: 1.8%

– 82.4% of marketers plan to increase their email marketing this year, compared to 2007.

– In the U.S. spending on online social networking advertising by marketers is on the rise with the following growth:
         – 2006: $350 million
         – 2007: $920 million
         – 2008: $1.56 billion
         – 2009: $2.02 billion
          -2010: $2.4 billion
         – 2011: $2.7 billion

There’s lots of other interesting data in the report, as well, so check it out.

Washing an iPod

Wednesday, March 26th, 2008

Yesterday, I accidentally washed Chris’ iPod. I went into the washing machine to pull out the clean clothes and something clanked. You know that sound you hear when you know that something was left in the pocket of a pair of pants, and you fear what it might be? You hope it was just a penny, but worry it could be a lipstick…you just aren’t sure which way it will go until you find the culprit.

Here is the iPod post-wash. (Notice how it looks perfect.)

 iPod post wash

I was hopeful that the iPod would survived the wash when I saw how great it looked.

No such luck.

Moral of the story: Don’t wash your iPod.

Update: Jason Meserve just sent me a link to this podcast: I washed my iPhone, now what? Apparently this is more common than I thought!

4 reasons media companies are so far behind in social media

Tuesday, March 25th, 2008

I just got done reading this interesting article “Media execs are asleep at their own wheel” over on the Go Big Always blog written by Sam Lawrence. Sam’s observations about how the long-time tech media companies are way behind in adopting social media – and in the way that they adopt social media once they make the decision to do so – are right on. To quote the post:

“Yes, I get their business model: serve as many pages as possible so they can have enough media “inventory” to sell lots of ads. And then there is subscription. That’s when you collect names through registration forms so you can market the lists and/or prove your readership demographics to advertisers. This is basically the old print media model online. And it, like other old-fart models, is stuck a decade behind.”

I completely agree with Sam – traditional tech publishing companies don’t get it and haven’t adjusted to the online business models. But although I agree with Sam, I actually have a bit more tolerance for their slow transition because I understand what motivates them and what’s holding them back.

The number fourHere are four reasons why I think that traditional media companies are so far behind in adopting social media:

1) They are still trying to support a print circulation model. Historically, in the tech trade publication world of IDG, what was formerly CMP Media, and Ziff Davis Enterprise, it has been all about getting a qualified audience to support a print magazine. The subscribers to these companies’ various print titles don’t pay to receive copies of the print publications, instead, they trade detailed demographic data to prove that they are worthy of receiving the magazine. The publications, in turn, provide the demographic data to advertisers to demonstrate that they have the “qualified audience” to warrant the vendor spending $50k+ on print advertisements.

The secret is this – it’s incredibly expensive to qualify this audience. Every year, magazines lose thousands of subscribers who don’t re-qualify. So circulation managers are constantly trying to recruit new, qualified readers for their magazines. This is costly – and traditional media companies have started to use every online audience touchpoint that they can to try to continue to qualify audiences, including social media registration forms.

2) It takes a long time to make the necessary infrastructure changes. One issue that the tech publishing companies have is that they are stuck with legacy systems that were created before the term “social media” even existed. While blogs that are newcomers on the scene were built from the ground-up to support social media, the big publishers are struggling to make the smallest changes to their massive publishing systems that will allow them to play in the social media space. These companies have millions of pages of content – all stuck in ancient content management systems that they adopted in the 1990s. This digging out of legacy technology and making the transition to Web 2.0 technologies is not going to happen quickly, easily or at a low cost for these companies.

3) The leadership doesn’t even know what social media is and/or doesn’t have time to stay on top of the latest developments. There are a lot of really smart people working in big media companies – and there are also a lot of really outdated people working in these companies. Much of the leadership in the tech media industry reached the level at which they are at by mastering print readership models – very few of today’s leaders are visionaries promoted to the top because of their success online. There are of course exceptions; but if you were to discuss social media with the majority of the executives at traditional tech media companies, they would mention blogs and message boards – and that’s about it. And with the precarious state of many of the tech publishers at the moment, few have time to stay on top of the day-to-day changes and developments in social media – most are trying to just stay afloat.

4) They are afraid of social media. Although these tech media companies will talk about the “separation of church and state” – meaning the fact that their writers are in no way influenced by their advertisers – the truth is that the media companies are terrified of what will be said by users about their advertisers once the barriers are opened up. Media companies know that they will not be able to control the conversation with a heavy hand, but they still want to maintain some semblance of control so as to not completely alienate advertisers. Until media execs feel comfortable with this fine-line, they will not be able to whole-heartedly embrace social media.

(Disclosure: I was formerly an employee for IDG’s Network World and Ziff Davis Media; and am currently a consultant to Ziff Davis Enterprise.)

Photo by Cappellmeister

More on starting a company in an economic downturn

Friday, March 21st, 2008

Yesterday, The Industry Standard published an article that I wrote about why it’s a good idea to start a company in a recession. The article is here. (You should probably read it if you want to follow the rest of this post.)

Hacker News logoThis article generated quite a bit of buzz on Y Combinator’s Hacker News, so I wanted to take a minute to respond to some of the comments. Here’s the link to that chatter.

– The most common disagreement with the article seemed to be that many of the points that I was making about why it would be good to start a company in a recession also apply to starting a company in a boom. I agree completely. However, we unfortunately are not in a boom at the moment – we’re in (or entering into) a recession. The viewpoint of the article is “since we’re in a recession…” not “if you could pick between recession or boom…” I wholeheartedly agree that if you could set your ideal conditions in which to start a company, a boom would be the time.

– One commentor wrote: “start a company at a time and a place where there are no constraints and even the biggest idiot can be successful.” I disagree with the notion that there is ever a time that there are no constraints on a start-up. If there aren’t constraints, there should be. And this is the point I was trying to make. In a boom, start-ups don’t always SEE the constraints as readily or operate with restraint – but they should if they want to be using best business practices and give themselves the best chance of success. A recession forces those contraints on a start-up – but those constraints aren’t BAD. They help set good patterns and behaviors for running a business.

– In my opinion, it is not true that there is ever a time or place that “even the biggest idiot can be successful.” Successful idiots – especially in the world of start-ups – are rare.

Finally, various commentors suggested three other reasons that it’s a good idea to start a company during a recession and I wanted to include them here because I thought that they were worth mentioning:

1) “Your competitors will go bust.” -m0nty

Another commentor put it this way:

“Because the well-funded riff-raff drops out sooner.” -edw519

2) “Businesses that increase market efficiency in novel ways seem, to me, more likely to succeed during a recession. This is so obvious that I’m surprised the article didn’t mention it.” -mkn

3) “Also could get one more attention — maybe — because the media won’t necessarily expect anyone to be doing anything positive. Recessions are one big moan, and the ‘yipee!’ of a startup will stand in stark contrast.” -sabat

Thanks for all your commentary – keep it coming.

(Update: The discussion is continuing here: http://news.ycombinator.com/item?id=142792)

My new gig: The Industry Standard

Thursday, March 20th, 2008

I have been a fan of The Industry Standard for a long-time – I have written about them before, and many of you will remember the magazine version of The Industry Standard as being the fastest growing magazine of all time before the bubble burst, taking The Standard down in its wake. Now The Standard is back, with an online-only site that focuses on a prediction marketplace.

And I’m the newest writer/contributor to the site.

My first article is up now – Five reasons why a recession is a good time to start a company. Go read it, comment on it, let everyone know what you think about it. And then come back to 16thletter and let me know what you think.

Industry Standard article

March Madness & the Internet

Wednesday, March 19th, 2008

NCAA TournamentI have always been a fan of March Madness. I grew up in upstate N.Y., loving the Orangemen, and the NCAA Tournament was always a light in the middle of a gloomy month. I don’t follow college basketball the way that I used to, but I still get a thrill out of tournament time (although I am not as excited as my friend Kim), especially when I pick a bracket and have a stake in who wins each game.

So I am really happy that my cousin Jeff is running “The Great Family Challenge,” this year, made possible by the new online bracket tools that CBS Sports offers. This tool is really cool – you can set up your own tournament, invite people to enter, and the tools do all the tallying for you. This is so much easier than the days when you passed around photocopies of the brackets and the organizer had to tally everything by hand.

Who are you routing for? I have UCLA to win.

Extend your personal network today – especially if you're an entrepreneur

Tuesday, March 18th, 2008

I’m not one for networking. In fact, I’m a little bit shy. You probably wouldn’t think that if you met me, but it’s true. On my way to an event when I know that I have to meet a lot of new people, I am getting myself psyched up for it. Afterwards; I relax. Or sometimes collapse.

So this advice is not given lightly.

Go network. Do it now. Especially if you’re an entrepreneur.

HandshakeI have to admit, I was a networking doubter. Reconnecting with people who I haven’t seen in years, reaching out to people who are nearly strangers…these things are daunting. But since I started Pure Incubation, every single time that I’ve talked to someone or met with someone in an effort to extend my personal network, it’s helped my business.

Today I met with a finance guy who I worked with about four years ago. He helped package up the financials for Connexus Media back in 2004 when it was sold to Ziff Davis. I got in touch with him because it seemed like it would be a good idea to get him involved now so that he will have an understanding of my businesses for when I might be ready to sell or raise some capital for one of them.

This meeting was fantastic. Not only was he enthusiastic about what I was doing (which was very encouraging) but he offered to help out with advice and direction until I need to bring him on board. Along with that, he has his own ecommerce business that is totally interesting and he inspired me with some stories about how he is making money selling marshmellow roasting sticks (his biggest money-maker) and furniture made from old skis.

Networking might be difficult for you, it might not come naturally, but extend your personal network today. Send an email or give a call to someone who you either know or admire, and see where it leads.

Photo by Mykl Roventine

FriendFeed: Feeds, feeds everywhere

Friday, March 14th, 2008

I don’t yet have an opinion about whether FriendFeed is good, bad or indifferent (although I know there are a lot of other people who do). I joined yesterday and very few people who I “know” are using it, so I didn’t take a long time looking it over just yet. But what I did see is this potential issue of many feeds feeding the same thing (via my Facebook mini-feed):

FriendFeed on Facebook

It appears that the way I set things up, my blog is updating my Tumblr is updating my Twitter. And all are updating FriendFeed, which is updating Facebook…this could get ugly. Couldn’t it? And I am not even using all of the social networks. But I imagine that the same thing would happen if I update Flickr – or any other service that I use that feeds to multiple sites.

How do I manage all the feeds that are feeding and cross-feeding everywhere? I don’t think that this is really a FriendFeed problem, per se, it just brought the issue to light for me.

Happy Pi Day!

Friday, March 14th, 2008

Pi DayMarch 14 is Pi Day, celebrated by math lovers, math teachers, and mathletes of all kind around the U.S. I am celebrating because this blog is named after pi  – the 16th letter of the Greek Alphabet.

I have never “celebrated” pi day before, but trust me – some people are avid fans. At piday.org, you can read up on all the fun activities that people have planned, watch pi raps, and send happy pi day post cards. Here are some other ways that people are celebrating the holiday:

“At my school we are making pi shirts with fun expressions like “Cutie Pi” or “Easy as Pi”. It will be very fun because we get to bring in pies too!” – Kyra

“I will recite all of the digits of pi that I have memorized (I know 113!), watch the excellent indepenedent film “Pi” (from 1998)! And eat lemon pie, Yum!” – Jared

“pi day has been celebrated by my family for years since we came from sweden. we turn off all the lights and pray in a circle. sometimes we eat pie or have fun pie fights with my little cousins. Pi day really does make the world go ROUND!! ” – Chris

“saying PI to everyone I greet.” – Kisa

Happy Pi Day! And if you plan to celebrate, please leave a comment to tell us all how.