Online mediums 'becoming more credible for direct marketing'

I came across this article claiming that online channels such as email marketing were now becoming credible enough to rival offline channels like direct mail. There may be some merit to this observation, but there is one critical component that will always cripple email marketing when compared to offline mediums like direct mail, and that is the ability to get a list.

In direct mail, marketers have always been able to purchase a variety of mailing lists from brokers and other list owners/providers. Direct mail marketers never had to contend with the problem of developing or building a list every time they wanted to do a campaign outside of simply purchasing the correct list from someone. If they purchased a list they never had to worry if everyone on the list was "opt-in" or all the legal problems that were caused by the idiots in our Congress with the CAN-SPAM act of 2003 that did nothing to stop really egregious spammers, but added all kinds hurdles for small businesses to overcome.

However email marketers have all of these problems and more to deal with. First, they have to actually build a list name by name of opt-in subscribers. Now to be fair, some magazines will send out email marketing messages to their subscribers on your behalf, but they will never give you those names to mail your campaign to as direct mail list providers do. Therefore, while you can technically still do a campaign without building a list first you are severely limited in your control over how the piece looks and works. This of course takes a lot of power out of how well an email marketing campaign can and should work.

The second problem you face assuming you can get a list from anyone is to know if the entire list is really opt-in. If you fail to do this and someone that gets your email marketing messages files a CAN-SPAM complaint against your company you could be facing some stiff fines and penalties and possibly even criminal charges.

Therefore, it seems to me until a source of 100% verifiable opt-in lists can be purchased from a source and you can send your email message directly to the user rather than through a proxy and not have to sweat out the heavy hand of government coming down on you every time you send a campaign then email marketing will never be as accepted or as easy to perform as direct mail.

Email marketing has wonderful advantages in terms of customization, branding, speed, tracking, and response that direct mail will never be able to rival. Unfortunately, the problems with SPAM, morons in Congress and technical limitations will always keep email marketing a second tier marketing option unless you build your own list to market to or the laws and technology make it more feasible.

Email and Direct Mail Marketing - Weak Combination

I read an article today where an expert claimed that combining email marketing and direct mail could be very beneficial for a business. You can read the full article here. I found this combination of channel marketing very weak.

First, with direct mail you never know how many people actually received your piece and what the response rate was unless you have some type of unique offer and can track when people call or respond in some way to that offer. If after mailing out a piece like this you then follow it up with an email you have some fundamental problems...

1. Opt-In: Is the list you are emailing to 100% opt in email addresses? If not, you are breaking the law. Unless you are mailing to your own customers and/or opt-in list the email portion is probably not opt-in.
   
   
2. Spam Blockers: You are going to have a portion of your messages sent via email shaved off by spam blockers. Therefore, you have no concrete way of insuring that everyone gets both pieces from your campaign and hence is responding because of receiving the 1-2 combo piece.
   
   
3. Measurable: If someone responds to either your email or vice versa if you do it the other way around, how do you know that they are responding because they received BOTH pieces; hence being rewarded for combining channels. You may just as easily won that customer with only one of the pieces.
   
   To accurately measure this type of campaign you would have to know for certain the prospect received both pieces and responded after receiving the second piece. This would be very hard to guarantee with a campaign and channel choice like this.

A vastly improved model is using direct mail or direct response ads and driving the person to a web site. Once the person receives the mailing if they then click through and go to the web site you can be assured they performed that action because they received the post card. If the portion of the site you direct them to is a specialized landing page you can track the entire encounter and measure how many people converted from your landing page. This would be completely measurable from beginning to end and work better than the proposed plan above.

An alternative of my strategy is using email (from a 100% opt-in list) and tracking how many people clicked through to a specialized landing page and eliminate the direct mail component entirely.

Combining email and direct mail will not achieve the results this expert claims. It is filled with a variety of problems and will most likely be a large waste of money.

The Financial Meltdown

It is hard to turn on the TV in the last week without seeing another catastrophic meltdown in the financial services industry. AIG, Fannie Mae, Freddie Mac, Lehman Brothers and the pile of corpses continues to grow.

Many are saying this crisis dwarfs the S&L crisis in the 80s and is more akin to the Great Depression than we would like to believe. The credit crunch is killing the real estate and credit markets. One of the issues businesses being unable to borrow money for operations. Unfortunately there is no easy fix here.

Many are wondering when is the devastation in the financial services industry going to drag the rest of the economy into the pit with it? I don't think anyone knows for sure if or when this will happen.

While many may never admit this I believe the Internet is going to play a significant role in helping the economy avoid total catastrophic meltdown. I am not suggesting that we won't have a recession or that it won't be painful for many people, but I believe the Internet will make it less painful. Here are a couple areas...

• Lending: With web sites like prosper.com and kiva.org liquid capital may still be available to some groups. It just won't be going through a bank. I don't say this is a perfect market, but it will serve the purpose of bringing borrower and lender (no matter how small) together in a market for credit that could not have existed 15 years ago.
  
  
• Retail: This is a two for one bonus. Retail is assisted by being able to create more channels to get product into the market for established stores. For other retailers the Internet aggregates small groups of buyers in specialty products in way that simply wasn't possible before the Internet. In marketing we referred to these groups as target markets that were too small and dispersed to target effectively or too small to be profitable. The Internet has changed that. Now these groups can be reached effectively via the web and using the Internet what was tiny groups have become bigger and more viable as a profitable group.

Now this doesn't mean that a recession still will not pull everyone down, but I suspect the recovery period will be quicker and not everyone will be hit as hard. The other thing I would suggest is using the Internet to create multiple streams of income for yourself or your business. I will be writing more about how to do that in future posts and articles.

Adobe, Google, and Yahoo Working To Make Flash Search Engine Friendly

Adobe made an announcement that it will team up with Google and Yahoo as well as other search providers to create advances and technology that will make Flash content more search friendly on the web. The release says they are working with Google and Yahoo, but it is sketchy on the details of exactly how it will do this. While I applaud all companies involved for attempting to collaborate and advance the end user experience I believe this will not be the panacea for Flash and SEO that everyone has been hoping for.

First, one of the greatest secrets in the world next to what really goes on Area 51 is how, exactly, Google indexes and ranks its search results. Google keeps this secrecy on purpose because it doesn't want people like me to manipulate its results. Fair enough. However for true SEO improvement to take place I believe all companies involved will have to divulge a lot more secrets on how things work than anyone involved is actually willing to do. Second, indexing content that is Flash based video and audio will probably still be difficult if not impossible. With so much content now becoming audio and video this still leaves a gapping hole in the true indexing of Flash based content for the future. This will mean you will still need to create search friendly pages that show up well in the indexes to get the video and audio content on them to be used by visitors. Content is still no good if users can't find it.

About a year ago I published position paper on the weaknesses of Flash in building up the marketing effectiveness of business web sites. You can download and read that paper here. In this paper I discuss not only the search weaknesses of Flash content, but also many other issues that will not go away even if Flash content becomes 100% search friendly, which I don't believe it will. Certainly being SEO friendly will help, but it is not the silver bullet everyone is hoping it will be. I encourage everyone that reads this post to read the position paper and consider if you believe I am right or wrong.

Michael Temple

According to today's Wall Street Journal CBS has made a $1.8 billion dollar offer for CNET Networks Inc., which is 22 times earnings! CBS apparently has issued this offer as a way to boost its own sagging earnings by generating Internet buzz.

This is very sad on multiple levels. First, while many may like CNET it is a generic site on technology news. It doesn't really have anything terribly unique about it. There are plenty of other sites that offer similar information and news. While there is value in the domain name, traffic, and current content I don't think that it is worth 22 times earnings.

The only reason the domain name is worth anything and it gets any traffic is because of the content. Unfortunately because most of the content is about technology it has a very short shelf life and quickly becomes outdated. If you did nothing to update it the domain and traffic would quickly lose any value. Therefore it is up to CBS to continually add to content and remove outdated stuff.

Why do I point out the obvious? Because CBS is a news organization! They find and develop information everyday. Why in the world don't they simply start a new site on this topic, create their own content and build it up into a high traffic site with some brand value?

Instead they will pay 22 times earnings for something that is deteriorating in value as they are signing the contract. I work with new businesses all the time that start new web based businesses and build up the content from scratch and eventually have the traffic, value, and earnings they want. Sure, this approach takes a little longer, but it also doesn't cost 1.8 billion dollars!

This just looks like a dumb business decision with too many people not questioning the "why" of the decision before they plunge headlong into actually executing it. I would never advise my clients to do this. I wonder if the story of what a dumb decision this will turn out to be is going to appear on their nightly news.

Michael Temple

Retirement - Internet Style

The other day my accountant informed me that he sold his practice and was moving on to do something else. Doh! He was a very good accountant. He called me up and wanted to meet, which I thought could only mean bad news. As it turned out he wanted to start an Internet business rather than retire. In my grandparents generation if you were standing in front of the door after the retirement party you would probably suffer high impact injuries from them running over you on the way out the door!

Today, with the Internet, people are finding new ways to spend retirement. They are deciding that running a small Internet based business is a great way to earn some extra cash and keep your mind sharp. I love the idea! I am a looooong way from retirement, but I seriously doubt I will ever retire in the traditional sense. Sitting on a beach, even a really nice beach, day after day doing nothing would drive me insane.

Fortunately the Internet comes to the rescue of ADD riddled Internet junkies everywhere by giving business opportunities to retirees and others. For a fraction of the cost of starting a bricks and mortar store you can start an Internet based eCommerce site. Retail not your style, no problem, start a content based site and sell ad space or membership subscriptions. The capital to start such a business is very minimal and by minimal I mean as low as a few hundred bucks. It is easy to run and easy to manage. You can do it with a laptop computer and Internet connection. It may take a few skills that you don't currently possess today, but even those can be learned in a relatively short period of time.

Here is a check list of items to consider before embarking on what could be a seriously cool retirement...

1. Be realistic: While I never want to be classified as a dream crusher please be realistic about what you want to start and how fast and big it will grow. As the dot bomb era taught us growing into an Internet giant and surviving only happens to a few of the start ups. Starting out and saying you are going to create the next eBay is probably not realistic. Not impossible, but unlikely, so don't set yourself up advance for failure.
   
   
2. Don't Quit Your Day Job: It is possible that you hit the perfect combination of variables and your Internet business starts dumping cash into you lap over night. However the odds are definitely against you on this. Be sure if you are indeed retired that you don't risk the 401(k) funds on this venture. A couple thousand bucks is probably ok. A couple hundred thousand dollars probably not a good idea. If you are receiving a pension or proceeds from retirement investments then you are probably ahead of the game. Take a few hundred or couple of thousand bucks and set it up. You can live off your monthly proceeds while you are building the business. If you are working a full time job and you need the money make sure you don't quit until you have replaced the income, common sense.
   
   
3. Learn the Skills: Be willing to learn the skills to do the work on your own. It is fine to outsource some of the work like programming or design, but you should know how to do your own marketing and web site updates yourself. Once the business is producing revenue it is fine to bring in some big gun talent to help grow the business, but not when you are starting.
   
   
4. Spend the Time: Be willing to put the elbow grease into your business at the beginning. If you create a site and head back out to beach and expect to simply check your bank balances once a month and spend the money you might be disappointed. You have to put the time in to set up, manage, and build this business just like any other. Just because it is located on the Internet doesn't mean the rules of building a business are suspended or go away.
   
   
5. Have Fun: Make sure this is a business that is fun to do. The best are hobbies that you can turn into a cash generator on the web. I have a friend who is a photographer, a pretty good one, and he uses his blog to post pictures and his web site to sell some of his prints. He loves doing it, doesn't require it to support his entire lifestyle, and has a blast at it. If you hate doing it then go back to simple retirement and walk away. That kind of misery isn't worth it even when you must work for a living.

Making money on the Internet is easy to do and can be a cheap, fun, and lucrative business opportunity. It can totally re-define what it means to be "retired". It is truly a marvelous world we live in when a laptop and Internet connection can so dramatically re-define what it means to be retired or working.

Years ago I had a friend in the real estate investment business that said you could lock him in a dark room with a telephone and he would make money. His point was that by using the phone and making deals he could find a way to make money.

Today I can say the same thing. I can be locked in a room with a laptop, Internet connection, and a cell phone and I will find a way to not only set up but grow a fantastic business and make money. It doesn't matter if I am in my working years or "retired" the opportunities are the same. Want to learn more check out some of the info on my web site.

Asian Micro Lending - Internet Style

Back in the early 90s there was an article written up in the Wall Street Journal about a Korean family business that was re-building after the riots in L.A. During the profile they discussed how the family had immigrated to the U.S. and through micro loans from their church they started their business, bought their home, and fulfilled other lending needs. Apparently that had never used a bank. All the families of the church pooled money and did this for everyone in the church. I was fascinated with the concept of this Asian micro-lending concept and have tried to find information about it on and off for years.

Apparently this type of micro-lending is very common in Asia and also in the Middle East and I am guessing other countries in Africa also have similar systems. What is interesting about the concept is that it appears to be systematic and as reliable as banking is in the U.S.

I am also fascinated by the concept of how the Internet re-makes old industries or finds new ways for them to work more efficiently. There are far too many examples to go through, but you know many of them by name like eBay.

When you take the Internet and mesh it with this concept of Asian micro-lending you get web sites like Kiva.org and Prosper.com, both are micro-lending sites that utilize the Internet to match borrowers and lenders together. Both sites have received national recognition and a basic search on Google will uncover tons of articles and blogs on both.

I don't really want to discuss these sites again as it has been discussed much better by others. I do want to discuss how another industry is in danger of having the Internet kick its tail if it doesn't get its act together.

The banking industry right now is going through a serious credit crunch. Lack of liquidity by banks as well as shedding bad debt is causing them to become stingy with their lending practices. Just a year or so ago people with decent or good credit could get all the credit they wanted. Now they are struggling to get the bank to come up with similar terms and coming up empty.

Everyone has probably heard that necessity is the mother of invention. Well the concept of micro lending over the web is here and if the banks don't find a way to open up their purses a little wider they will find a bite being taken out of their backside by these micro lending sites.

Banks that believe the loyalty from their clients because of the relationship and the a face to face transactions may be surprised how quickly that loyalty vanishes in the face of need. The need for cash will outweigh those factors and people will move to the micro lenders. Now some may return when the credit crunch is over, but many will be perfectly content to stay put. Some will actually prefer the new method. The micro lending may really take off and hurt banks over time.

During the Depression a similar credit and liquidity crunch occurred, no, I am not that old, and it caused people to become innovative. People started using barter and actually printing their own money that could be used within their groups. The point is that when government or industry don't step up and help in rough times people will find their own solutions. This is a good thing. In my humble opinion it has been a talent woefully lacking in modern society.

Now with the modern Internet if the banks don't step up and take the lead people will again become innovative and move around them. I have read numerous stories on the Internet in the last several weeks or months of small businesses and people already using these sites because their banks wouldn't give them the cash they needed.

Interestingly many of these stories have a variety of quotes from the person that received the loan. These people sound so grateful and talk so highly of how "these people" stepped up and helped them in their time of need. Many say they will gladly do it again and the terms and ease of getting the money made the experience very nice.

Uh oh, bad news for banks. I don't hear too many people gush this type of love for the bank even in good times. The banks may be shocked at how little loyalty and love they really do enjoy from their customers.

As an open message to the banks, you guys better get your act together. The Internet has already made minced meat out of many other industries that failed to heed the call of the consumer. You appear to be next. You may wake up one day and find banking is only a minor activity for people and that most small businesses and consumers have embraced an age old concept from Asia, with a mixed in modern Internet and made you obsolete.

Ad Dollars Focused on Specialty Sites

The Wall Street Journal had a special technology pull out section today and in there they cited some interesting stats about where ad dollars are being spent. According their stats here is how ad dollar spending breaks down...

44% with Internet Companies, i.e. Monster, Google, specialty interest sites, etc.
33% Online Newspapers
10% Online Yellow Pages
9.3% Local Television sites

This year (2008) local online advertising is expected to rise 48% according to Media research firm Borrell Associates, led by growth in car, job, and real estate ads.

The numbers don't surprise me at all. For years Internet marketing consultants, like myself, have been telling web site owners that content is king. The more content you have the better you will do in search engines, getting inbound links, and now it appears ad revenue. The fact the yellow pages still squeaked out 10% DOES surprise me. I can't imagine a more outdated advertising venue than the phone book and to simply take an outdated advertising medium and put it on the web and still get 10% of the dollars seems a bit surprising. However I am reasonably sure that number will continue to fall as more dollars are allocated to specialty sites and online newspapers.

For those you out there that are content producers you better put on shades because the future is going to be bright. For those you out that think you build a web site once and update or add to it once every 34 years whether it needs it or not better get your act together. Content is the growth potential of the future. Either learn how to create it or buy it. If you don't the power of online economics will make you a dinosaur headed towards extinction.