Monday, March 8th, 2010

Two Tips To Get More Followers on Twitter (from 140 | The Twitter Conference)

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I’m sitting here at the “140 | The Twitter Conference” in Seattle, WA and Jason Preston of Parnassaus Group mentioned these two tips for growing your followers on Twitter:

Contests

“Contests work” — Offer a prize. Ask people to follow you and retweet the contest.

The cost to acquire a Twitter follower has averaged about $7 per 100 followers in Preston’s experience.

Twitter Contest Examples

Jason said Parnassus Group used a contest for what the t-shirt for a Twitter conference should say (with the winner being offered a free conference pass and t-shirt).

As part of the contest, you had to tweet your submission and follow the conference the twitter account (@tweethouse).

Parnassus got a couple of hundred followers as a result of the contest (which again he says worked out to about $7 cost to acquire each Twitter follower

Another example: Someone offered a MacBook Air and got 2,500 followers (that cost to acquire a Twitter follower was closer to $1 per follower)

Follow People Using Tools Such As TweepSearch

Searching for people who are relevant to you or your business (based on location or products) and follow them. Reason: There are a lot of people who have their accounts set up to automatically follow you back.

If you’re targeted on your outreach you will land on the inbox of people interested in your business. He recommends TweepSearch (in beta).

With TweepSearch you can type in search term and easily find people to follow (and then hopefully they follow you back). If you’re looking for followers from a certain location, type in the search term followed by the location (e.g. “Jewerlry: San Francisco”)

I’ll keep posting other info from this event.

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Saturday, March 6th, 2010

It’s The Freeconomy, Stupid!: Free As a $300 Bil. Business Model

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I finished a few books on my trip to Europe last week and one of them —  Free by Chris Anderson — was chock full of stats that I found myself dog-earing throughout my flight.

“Free” is a must-read if you’re passionate about the Internet, or just business in general.

I’m gonna keep this simple and just list out some good nuggets (which are mostly stats).

Let the “freeconomics” begin!

The “Freeconomy” Is An Estimated $300 Billion Market

The Free Economy is roughly a $300 billion per year market.

By his own admission, Anderson defines this loosely, including revenue generated from businesses driven by giving away most of their products or services (e.g. TV, Radio, online advertising Web sites, etc.).

Two sub-economies have emerged in place of money on the Web (though they can later lead to money)

1) Reputation Economy – This is best measured by Google’s PageRank which rates on a scale of 1 to 10 how important each Web site (and each page on a Web site) is, according to Google’s secret algorithm.

2) Attention Economy – This is best measured by the traffic a Web site receives (traffic being measured by number of visitors and page views)

To calculate the Economic Value of your Web site (i.e. how to help turn your Reputation & Attention into CASH), Anderson suggests this formula:

(The traffic your page rank brings from Google’s search results for any given term) X (The keyword value for that term)

note: while he doesn’t clarify how to calculate “keyword value,” I’d suggest you could use AdWords.Google’s CPC)

General Web Statistics Related to Freeconomics

• The net deflation rate of the online world is nearly 50% (whatever it costs a business to run a Web site now will cost half as much in a year).
• The Web has around one trillion unique URLs, according to one Google estimate
• There are 12 million active blogs
• It costs around $.25 to stream one hour of video to one person (a year from now it will likely be around  $.15)

User-Generated Content Statistics

• Around 1 in 10,000 Wikipedia visitors are active contributors.
• YouTube has around one in a thousand users uploading their own videos (meaning the rest are just downloading (viewing) videos
• Most online volunteer communities thrive when just 1% of them contribute

Two Cool Social Media Statistics

1. The average number of friends for MySpace members is around 180
2. Facebook applications receive around a $1 CPM ($1 per 1,000 page views) for advertising revenue.

Interesting Free-Related Trials & Experiments Anderson Mentions

The Case of $.15 Cent Truffles Versus Cheap to Free Hershey’s Kisses

Dan Ariely (Predictably Irrational) took two kinds of treats: Lindt truffles from Switzerland and Herhey Kisses and offered them for sale to students:

When they priced the Lindt truffles at $.15 and the Kisses at $.01

• 73% chose the truffle
• 27% chose the Kisses

When they lowered both prices by $.01 so that the truffles were $.14 and a Kiss was free

• 69% chose the Kiss

Conclusion: While both products’ prices were lowered by the same amount ($.01), the introduction of free as an option reversed the students’ preference.

How Does “Name Your Own Price” Work As A Business Model?

Matt Mason, author of Pirate’s Dilemma, allowed visitors to his Web site to name their own price upon checkout of downloading his ebook (with $5 via Paypal as the default option)

Results: 6% of the 8,000 people who downloaded the ebook agreed to pay an average of $4.20 each (generating a couple of thousand dollars) (interesting note: Mason estimates he received $50,000 in lecture fees as a result of the publicity of his exercise).

Hope you enjoyed some of these freeconomics!

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Saturday, March 6th, 2010

Four Simple Steps On How To Become An Expert

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I heard a cool thing listening to a GetAltitude interview of Brendon Burchard by my business partner Eben Pagan in my car this week– Brendon mentioned four things an expert needs to do to be successful.

I love frameworks so I’ve listed the four items that Brendon mentioned below along with my take on each.

Listing just the framework felt dull so I decided to give an example of each step using the topic of “Social Media? (since Social Media “Experts” are high in demand these days).

Enjoy!

Four Steps On How To Become An Expert:

1) Tell People What to Pay Attention To

An expert needs to break down the abundance of information available to most people into just a handful of key bullets.

For example, if you’re an expert social media, you might suggest to your listener that the four social media tools to focus on are:

• Facebook
• YouTube
• Twitter
• Your blog

2) Tell People What Things Mean

You need to tell customers what things mean and why they are important.

Continuing on the Social Media example, you would tell your audience that social media is critical to their business because it can generate half of their Web site traffic.

And this traffic can be unpaid (i.e. you don’t have to pay direct advertising costs to do it).

3) Tell People How Things Work

Experts should focus on how different pieces of something work…as well as how they all work together as a whole.

For example, you might tell your customer that the different Social Media platforms work in the following ways:

• Facebook helps your business by allowing you to offer product launch information and discounts to your Facebook “Fans.”
• Twitter is most useful in terms of listening to what users are saying about your brand and having a conversation with them when appropriate
• YouTube can help grow your business through a channel you create with Web video commercials
• Blogs are most useful for your business as a content delivery platform through which your team shares medium-length content about the direction you see your business and industry heading.
• Overall: All four of the above can work in concert with your blog acting as your centerpiece promoting your Facebook Fan page, Twitter address and URL for your YouTube videos.

4) Show People The Future

A good expert shows their audience the future.

E.g: You can tell your audience that you predict that their Web site will have the following as the top five traffic sources by the end of 2010 if they follow your advice:

1. Facebook
2. Google (the current #1 traffic generator for most Web sites)
3. Twitter
4. Blog
5. Facebook

If you work on these four things, there’s no doubt you’ll improve your reputation as an expert in your field.

Thanks for the idea, Brendon!

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Friday, March 5th, 2010

Facebook's Revenues & Highlights From Wall Street Journal Profile

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It’s amazing how much momentum Facebook is generating these days. The press is certainly going wild.

Earlier this week, InsideFacebook shared some revenue estimates.

Based on their estimates, as well as one mentioned in the Wall Street Journal today and past ones from Starup Review and Don Dodge, here’s a very rough estimate of Facebook’s revenues since its founding in 2005:

Today’s Wall Street Journal cover story had these highlights about Facebook:

CEO Mark Zuckerberg’s Management Style

• He is short on praise and believes that getting the product right should be its own reward
• He is clear and purposeful on vision: believing that Facebook’s promise has to do with facilitating people’s ability to share almost any and everything with anyone at any time via Web sites, mobile phones and even videogames
• He is a micromanager
• In Facebook’s earlier years, Zuckerberg ended meetings by pumping his fist in the air and leading employees in a chant of “domination.”
• Zuckerberg believes he has a special capacity for delaying gratification (and that will be helpful in holding out on an IPO)
• Good listener: He’s met with Intel CEO Paul Otellini and Oracle President Charles Philips and keeps a long list of advice on his Blackberry
• Zuckerberg controls votes for three of the five board seats

Facebook passed up on two acquisition offers:

• Yahoo’s $1 billion offer in 2006 and
• Microsoft’s offer of $8 billion or more sometime later

Facebook Financials and an IPO

• Facebook’s revenue could hit $1.2 billion to $2 billion this year (2010)
• It has been cash-flow positive (enough to pay its 1,200 employees and overhead) since 2009
• Timing of an IPO: Board member Jim Breyer told a German audience last month that an IPO would not happen in 2010

Zuckerberg is clearly in control of the business

• Zuckerberg owns more than a quarter of Facebook’s stock
• Zuckerberg has control over 3 of the 5 board seats

I expect Facebook’s press to escalate further leading up to a likely IPO this year or in 2011; in what would likely be the largest Internet IPO since Google.

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Tuesday, February 23rd, 2010

How Consumers Interact With Social Media Sites (Facebook Dominates)

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I’m very interested in any data to help businesses maximize their return on investment with social media.

So I was happy to see ForeSee Results publish some simple findings recenty in their Key to Driving Retail Success with Social Media: Focus on Facebook (note: this is a PDF file that you download).

They surveyed 10,000 visitors to the top 40 online retail Web sites.

Some highlights I found in this brief report are:

• 69% of online shoppers use social media sites (social media users)

Of online shoppers who frequent social media sites:

• 61% friend or follow 1 to 5 retailers or brands
• 21% friend or follow 6 to 10 retailers or brands
• 10% friend or follow 11 to 20 retailers or brands
• 8% friend or follow more than 20 retailers

Note: “Friend” and “Follow” refer to customers agreeing to have an online connection with a retailer/brand.

The report asserts that:

“Site visitors who also interact with a company on a social media site are more satisfied,more committed to the brand, and more likely to make future purchases from that company.”

Facebook is the dominant social network for People Visiting Online Retail Sites

The table below indicates how dominant Facebook has become — it’s more than twice as popular as #2 YouTube and more than 3X as popular as MySpace.

While Facebook is clearly dominant, the report points out that 25 of the top 100 online retailers do not have any formal Facebook presence.

And finally, here’s some insight into why consumers interact with businesses through social media.

The Top Three Reasons Customers Interact With a Business’s Social Media Site:

1. To Learn About Sales or Special Offers (49%)
2. To Learn About Products (45%)
3. To Get Customer Support (5%)

I’ll continue to share whatever I find on improving your ROI through social media.

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Saturday, February 20th, 2010

Wooden’s “7 Things to Do” (To Succeed in Life)

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I was captivated by John Wooden’s childhood stories, especially what his Dad taught him.

In Wooden: A Lifetime of Observations & Reflections On & Off The Court by John Wooden with Steve Jamison, Wooden says his dad gave him a piece of paper with a list of things that would guide him for the rest of his life.

He would use this guidance to shape his career, marriage and general philosophy.

The list was titled: “Seven Things to Do.” And when Wooden’s dad handed it to him, he said, “Son, try to live up these things.”

Here are Wooden’s Seven Things to Do (with short comments from me after each):

Seven Things to Do

1. Be True To Yourself

At the end of the day, there is no one whose opinion matters more than your own…so be true to yourself.

And Wooden warns you not to get caught up in how you size up to others:

“Don’t compare. Don’t try to be better than someone else. But whatever you’re doing, try to be the best you can be…”

Keys to being true to yourself include:

• Be self-aware
• Understand your values
• Be honest with yourself

2. Help Others

The old saying: “Give and you shall receive” is a powerful one.

While your motivation for helping others should not depend on others helping you back, it is surely true that you will receive back more help when you take a giving attitude.

Think of this: If we all practiced helping others, we all would be helped…and we surely all need help at some point in our lives!

3. Make Each Day Your Masterpiece

I love this one. A “masterpiece” of a day is of course different for all of us. As Wooden points out:

“Don’t measure yourself by what you have accomplished, but by what you should have accomplished with your ability.”

And he warns: “Never mistake activity for achievement.”

And Wooden echoes his #2 Thing to Do (Help Others) with this quote:

“You can’t live a perfect day without doing something for someone who will never be able to repay you.”

4. Drink deeply from good books (Wooden’s favorite is the Bible)

Wooden believes reading is a key to success (you may recall that my other hero Charlie Munger echoed the same sentiment when he said:

“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none, zero.” (read here for more Charlie Munger quotes)

Wooden reads the bible regularly and has said that if there were just one book someone had to read, it would be to read a little bit of the bible every day.

5. Make friendship a fine art

Friendship and family (which I find Wooden uses interchangeably) are key to success in life, but they require some work.

Wooden has these tips on friendship:

“ Friendship comes from mutual esteem, respect, and devotion. A sincere liking for all,”

6. Build a shelter against a rainy day

Pretty self-explanatory…however, I don’t think Wooden means this literally.

A shelter could be physical, financial or emotional…family and friendship, afterall, are perhaps the most valuable shelter to be building in your life.

7. Pray for guidance and count and give thanks for your blessings every day

Wooden certainly believes in a higher power — here’s a video of Wooden reciting a relevant poem (Wooden loves to write poetry).

More John Wooden Videos:

To see more of Wooden, check out this cool talk by Wooden at the TED conference and a John Wooden profile on Charlie Rose (including interviews with Bill Walton and Bill Russel).

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Saturday, February 20th, 2010

Leadership Lessons From John Wooden

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A hero of mine is John Wooden who describes himself simply as a teacher; and who is known by many as the former UCLA College Basketball coach with perhaps the most successful track record in the history of sports.

Some of Wooden’s Records:

• Won 10 NCAA Championships (in 12 years)
• 88 Consecutive victories
• 38 Consecutive NCAA Tournament victories
• 4 Undefeated full seasons
• Won 905 games & Lost 205 (won 81.5% of all games) over 40 years

Teacher Wooden turns 100 this year and I’ve decided to share some of my favorite nuggets of wisdom from him in this series of postings (note: Teacher Wooden died on May 4, 2010, just short of his 100th birthday).

1. Seven Things To Do (from Wooden’s father)
2. Eight Steps To Success
3. 15 Building Blocks (with quotes) From “Pyramids of Success”
4. The Top 10 Searches of “John Wooden” Topics on My Blog

What can Wooden’s lessons do for you?

If you practice these learnings I believe that you will be more successful in business and in life.

I recommend you read any John Wooden book you can get your hands on. I’ve read these so far and can recommend them all:  (and I use them as resources for my series):

• Coach Wooden’s Pyramid of Success by John Wooden & Jay Carty
• Wooden on Leadership by John Wooden & Steve Jamison
• Wooden: A Lifetime of Observations & Reflections On & Off The Court by John Wooden with Steve Jamison
• Practical Modern Basketball by John R. Wooden

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Tuesday, February 9th, 2010

Are You Missing The Boat on Performance Advertising?

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The popular and talented Lisa Riolo stopped by my virtual office the other day to talk about Performance Advertising, why it’s important to your business and her new Impact Radius startup.

Here’s our Q&A:

Q: Hi Lisa, what is your definition of Performance Advertising

Most everyone understands how “advertising” works.  The difference with a performance model is primarily how the pricing works.

When the media with the audience (sometimes called the publisher) agrees to receive their revenue after the advertisements generate results (meaning the consumer actually responds to the ad and, usually, buys something)–you’ve got performance advertising.

This approach creates a lot of accountability within the advertising model and let’s everyone involved measure their effectiveness in promoting and selling products.

Q: You have enormous experience in this space…would you walk us through the history of performance advertising (at least the major milestones)?

Sure.  About ten years ago–performance represented about 5% of the total spend in advertising for both online and traditional media.  In the time since, the processes used to buy and sell traditional media haven’t changed much.

Performance advertising online, on the other hand, has grown substantially and now represents more than 60% of the spend.  Why the difference?

Affiliate networks, which aggregates the companies willing to advertise on a performance-basis, started gaining real momentum in the late 90s and early 2000s.

Search engines have also played a key role by opening up greater distribution of ads to a proactive audience.

Offline media hasn’t had a centralized location to discover the real value of performance deals.  Instead, the brokers often times pocket up to half of the money being offered for a sale or lead.

Further, I think technology was a big factor in the enormous growth online. Not only do we easily track consumer response online, we deliver the associated data and metrics real-time.

So, the speed of optimization (which is critical to effective performance advertising) is rapid–especially compared to traditional media.

We were amazed to learn that traditional media, which is equally metric-driven as online, waits days, sometimes weeks, to see the data associated with a performance campaign.

Our objective, with Impact Radius, was to deliver the same type of technology that online advertising considers commonplace to offline media.

If all of performance advertising were to have a single technology platform to manage their relationships–the opportunities for growth are exponential.

Q: Which types of businesses should care about Performance Advertising and why?

On the advertiser-side, any business that has established basic awareness of its brand and products should take a serious look at running performance campaigns.

Media partners (meaning companies with media properties that generate some revenue through advertising) should, at the minimum, run some ads on a performance-basis in order to continually establish the baseline value of their ad inventory.

I’ve had so many business-owners, after hearing about this model, say that all advertising should be priced with a performance component.

Unfortunately, they also doubt that the media will agree to run ads on a performance basis.  So, finding a willing media partner is usually the challenge for a smaller or new business trying to sell their products and services.

This is why it makes sense for an advertiser to list their “offer” with a company like Impact Radius.  It’s easier to discover media partners that will promote them on a performance basis.

That said, either company (the advertiser or the media partner) can usually get a deal in place if they are willing to add a performance component.

It is the metric driven approach and the resulting accountability that brings a negotiation together.

Q: Can you share any success stories of businesses using Performance Advertising?

I love to reference companies like Zappos and Netflix as great examples of online businesses that built their original customer acquisition strategy on a performance advertising model.

Each one of these companies let performance-pricing drive their early advertising efforts and partnered with companies large and small to refer new customers.

Perhaps more interesting, though, are the companies that earn significant advertising revenue on a performance basis.

Many companies recognize that Google makes a lot of money advertising within their search engine.

Google doesn’t charge for eyeballs, though.  Google only charges its advertisers if consumers actually respond to an ad and click through.

The measured response and resulting fees makes that a performance advertising model.

Other companies, like Upromise, earn revenue not only for sending visitors to an online retailer like Zappos, but because those visitors actually complete a purchase.  Upromise takes a portion of the money earned on a performance-basis and sets it aside for a child or grandchild’s college tuition.

What I find most exciting, though, is that TV, radio and print media are (to varying extents) struggling to generate ad revenue.

In doing market research for Impact Radius, we discovered that many of these media companies will run more ad inventory on a performance basis than was previously believed.

The media companies understand that if their audiences respond to ads and generate new sales for the advertisers they can earn big dollars.  Local newspapers can get a piece of every coupon redeemed or every phone call made.

Q: What are some Performance Advertising tips that you can provide businesses out there?

Advertisers, when approaching media partners, should start off with a “hybrid” pricing model.

Spend some up-front money on placement and add the performance element (e.g. $5 for every incoming phone call or 5% of all merchandise sold) on the back end.  Track the results and make sure both sides have access to the performance reports.

Once your local radio station starts getting reports showing their effectiveness at driving sales or leads–they can optimize their efforts.  This approach gets everyone aligned and working toward the same end objective.

As a deal grows, it makes sense to utilize a third-party tracking technology.

This is also a relationship business.  It is critical, for the model to work, that both advertisers and media partners are in direct communication.

Nobody should be in the dark about your partner or its capabilities.

Q: Who are the main players in the Performance Advertising space right now?

In the online world, most all advertising is managed on either a CPA or affiliate network.

The upside of this is that most of these networks do offer the ‘trusted’ third-party tracking technology.

The downside is that the partners do not work together directly and, in the case of the CPA networks, are completely hidden.

The biggest companies selling merchandise or acquiring new customers (i.e. with performance advertising campaigns) include nationally recognized brands like Amazon and eBay.

There are a lot of small to mid-size businesses, and even start-ups, that build performance advertising into their plans.

There are literally thousands of companies, from bloggers to coupon and deal sites to media brokers, that get paid on a performance basis.

Q: How is Impact Radius positioned in the Performance Advertising market?

We’ve brought the tools and technology to both online and traditional channels–and have introduced a “clear box” philosophy that ensures direct negotiation and communication.  We can track online, call and promo code conversions.

What is also unique about Impact Radius is that we’ve automated all of the processes involved with ad placement, deliver of the data and the exchange of money.

Media partners are excited, for a number of reasons, including that they can paid for the results they’ve driven as often as daily.  This improvement in cash flow gives them significant potential for accelerating growth.

Q: I understand Impact Radius has some unique capabilities — that said, who do you consider Impact Radius’s closest competitor?

Some people have said we’re a better alternative to the affiliate and CPA networks.

I do think we’ve improved on some of the standard product features you’d find in a network, of course.

But the biggest adoption I think we’ll see are the private relationships that migrated off network.  The private, in-house relationships are usually kept off network either because of the costs or rules established by the third-party.

So, we really compete with in-house solutions since we’re providing the flexibility and controls of their internal tracking with the added scalability and features usually found only within a network environment. And our pricing is aligned with the advertisers and media partners interests.

Q: What’s the best way for someone to get in touch with you or Impact Radius?

Visit the recently unveiled Impact Radius or you can find me on Twitter @lisariolo or at my blog.

Thanks, Lisa

My pleasure.  I look forward to sharing more in the future.  Until then, wishing you and your readers continued prosperity!

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