NY Times on Pay to Click Fraud

Here is a story I came across done by the NY Times on pay to click fraud. They were one of the papers that did an extensive write up about this a few years ago. Here are my past comments on pay to click fraud To catch some readers up essentially what click fraud is is advertisers paying money for pay to click advertising where the people clicking on the ads are getting financially compensated and therefore are not really potential customers.

How does this situation occur?

In short I can set up a web site and choose to sign up for Google Ad Sense where I display ads that are paid for by other people on my site. When a visitor to my site clicks on one of those ads I get paid a small fee by Google for delivering the person that clicked on the ad. Now in an honest world people set up good content and advertisers support that content development with ads. People that are interested read, watch, or listen to the content and support the advertisers by clicking on the ads. Everybody is happy, sort of.

The problem occurs when one person really wants to cheat the system. They put Google Ad Sense on their web site and use either automated software or worse a large network of individuals to go to their web site and click on those ads. Every click earns them some coin. Google and Yahoo as well as other advertising providers have forensic departments and ways of supposedly figuring out which clicks are fraudulent and which ones are not. I won't spend a lot of time discussing the massive effort this must take or the obvious mistakes that must occur. I think most of my readers are smart enough to figure out the obvious problems in supposedly catching all the fraudulent clicks.

However like email spam the main issue here is economics. There is a financial motivation for people to set up sites, display ads, and find ways to generate clicks both legitimately and fraudulently. The one power on the planet I have utmost respect for is the power of economics. As long as their is economic gain to be had people will find a way to subvert and move around almost any type of blockade or system created to stop them from doing said activity. Simply put no matter what Google or Yahoo do they will never stop click fraud because the financial incentive is there to subvert any protections they put in place.

However one option not explored is to remove the financial incentive. If advertisers weren't paid by the click or Ad Sense didn't exist then the only money to be made would be by Google or Yahoo themselves and it becomes pretty simple to figure out who benefits then.

The issue however is a complex one because some people completely support their web businesses on ad revenue. These individuals provide excellent in demand content that people will read, watch, etc. and then support the advertisers. I am not suggesting this model go away I am simply saying that as long as dishonest individuals have an economic incentive to perform or encourage click fraud this will be a problem.

Right now Google has a methodology in place to track the quality of landing pages and ads. Poor ads and landing pages will pay more money for advertising and ultimately could find their ads disabled if they are too poor. Perhaps a model that evaluates the content on web sites where people will display ads is a good idea. I realize this is subjective and who gets to decide the standards, but we have all seen "web sites" that are simply parked domains loaded up with advertising links. This type of thing is not good content.

There is a distinct probability that those sites are major sources of click fraud because their isn't really any content of value on said site. It is simply taking advantage of a domain name and maybe the owner is perpetrating fraud by using automated software to go to the domain and generate clicks or writes a virus that infects computers to go generate these clicks. The hardest to detect is when the domain owner sets up a willing network of individuals to go and click on these ads. This last scenario looks like a real people doing a legitimate click through.

Therefore, I am suggesting two key things. One, as long as economic interest is there to perform click fraud it will always occur and the only way to completely stop the fraud is remove the economic interest. The second key take away is that a good first step to removing the economic motivation, at least, partially, is to judge content. Quality content providers get ads and poor or non-existent content does not. How one judges content and what is quality is an argument for another day.

Social Media Breakfast Toledo Number 2

If you missed the first Social Media Breakfast in Toledo on May 1st, than you missed an amazing event! We had an incredible turn out and delivered some really good information to small business owners on how to ride the Social Media Wave to help them market better and become more successful. If you missed that event I encourage to NOT miss number 2 which is in two days!

Techrigy Founder/President Aaron Newman will discuss the social media platforms and monitoring tools available; brand names, trends and other examples of what can be monitored; ways to measure and analyze your results and related topics.

Social Media Breakfast-Toledo #2 is 7:30-9:30 a.m., May 1, at Toledo Elks Lodge #53, 3520 Holland-Sylvania Road, Toledo. Registration by or on 5 p.m., April 29 is $15, and $20 afterwards. To pre-register, visit http://smbtoledo.eventbrite.com. Seating is limited to the first 100 registrants.

Nearly 80 people attended the inaugural Social Media Breakfast-Toledo April 3. Those who cannot attend the May 1 event can watch it stream online live at http://www.ustream.tv/channel/social-media-breakfast-toledo.

The train is leaving the station, question is will you be on it. Register here

What was old is now new

Here is another column by Karen Gedney about the principles of online copywriting being really about the old school of copywriting. I couldn't agree more. Karen is right on the mark talking about how too many online "copywriters" are suddenly discovering how effective some of the old school techniques of direct response copywriting are in an online world.

I recently read a quote by Jeffrey Gitomer...

"If you want to read something new then read something from 100 years ago"

Excellent observation. It seems for too many years individuals involved in the advancement of technology and the Internet kept arguing that the Internet changed all the rules. Please don't misunderstand me; the Internet has broken a lot of traditional long standing rules, but some rules have never changed. What has not changed is business principles about what it takes to run an effective business, i.e. finding good sources of products, high customer service, sharp marketing, good business development, strong sales, etc. is what it takes to run any business on the web or off.

In the same vein is direct response copywriting principles. The principles of good copywriting are based on human psychology. Those principles of what motivates people to take action hasn't changed in hundreds or even thousands of years. Copywriters from yester-year understood this and simply applied those techniques to the new medium. Modern copywriters who didn't have this understanding about history have made the mistake of believing that the new economy and medium of the Internet has changed the principles of copywriting. Not so.

One of the best books ever written about copywriting in my humble opinion is Tested Advertising Methods by John Caples. This book was orginally written around 1923 and has gone through multiple revisions, to update the examples but not change the techniques. The principles of what works has not changed in almost 100 years. If you want to become an effective direct response copywriter then go back and study history first.

Dirty Secrets of Internet Based Copywriting

I read this article in Brandweek that had an interview with copywriter Karen Gedney. I wasn't sure where the article was going based on the title, but she is dead on the mark with her observations.

I completely agree with Karen's positions on items, but I think the best dirty secret of online copywriting is...

Online direct response copywriting is the same as the old offline direct response copywriting.

Karen does an excellent job in the article of pointing this out with actual examples. The media is different, but the techniques and strategies one uses to motivate a person to do something are not any different. There are definately some tweaks you must adapt to in terms of technology limitations and media differences, but at the end of the day the way you motivate someone online with "online direct marketing copywriting" is the way you have always motivated them from a copywriting and direct response point of view.

All the people that have come out and published books about online copywriting are simply taking old ideas and re-packaging them. That is not innovation. Now if you decide you need someone that can do both direct response copywriting and SEO copywriting, now you may have something and need someone with a different skill set. You need a skilled direct response marketing and SEO copywriter. That combined skill set is not shared by all good direct response copywriters.

There are some extremely good direct response copywriters out there, but they don't necessarily have the SEO skills to give a company the double bang they do often need in an online environment. However if you don't require the SEO angle on your copy, perhaps because it is an email marketing campaign or you use other advertising like pay to click ads to drive traffic then hiring the best direct response copywriter you can find regardless of their SEO skills makes great sense.

The bottomline is just don't get sucked into the belief that online copywriting outside of the exception I noted above is somehow different to the point that you can't use a good copywriter, even one that doesn't advertise being an "online copywriter" a good direct response copywriter regardless of his/her background in online promotions is worth their weight in gold.

First Toledo Social Media Breakfast - Total Success!

The first Social Media Breakfast Toledo was a stellar success! We had 79 people attend and 67 who watched the live stream online. The tweets and other positive comments starting rolling in almost immediately. Everyone had a great time and said they would be coming back for the next one which is on May 1st, at the Elks Lodge #53. Hope to see you there!


Our Panel of Speakers, from the left...

Victoria Kamm
Dave Rigotti
Allen Mireles
Damian Rintelmann

Here I am facilitating the panel...


Here are some of the attendees...





Don't miss the event next month; we have a great speaker you won't want to miss...

Patrick Giammarco, owner of PWG Marketing has put together a team of marketing and PR professionals to organize and plan Social Media Breakfast events in Toledo. “I came across Social Media Breakfast just before the holidays and made it a 2009 goal to start the event in the Glass City,” says Patrick Giammarco.

The Social Media Breakfast was founded by Bryan Person in August 2007 as an event where social media experts and newbies alike come together to eat, meet, share, and learn. “Things have progressed rather quickly. I started a discussion thread on the Ad Club of Toledo LinkedIn group and, within a couple of hours, had three people express interest in helping to plan SMB events in northwest Ohio. Today, the planning committee consists of nine other people,” says Patrick Giammarco. “We’ve been meeting for about a month and are pleased to announce the inaugural Social Media Breakfast Toledo will be held April 3, 2009.”

Social Media Breakfast Toledo planning committee:

• Julie Cantu
• Kevin Cesarz
• Janeile Cudjoe
• Mike Driehorst
• Patrick Giammarco
• Victoria Kamm
• Tim Langhorst
• Allen Mireles
• Steve Robison
• Michael Temple

About Social Media Breakfast Toledo Social Media Breakfast Toledo is a place where people of all levels of social media knowledge can come together to meet, share & learn how to utilize social media to connect & profit. Marketers, PR pros, entrepreneurs, bloggers, podcasters, new-media fanatics, and online social networkers are all welcome to attend.

Only 200 seats available! Register now for the Social Media Breakfast Toledo premier event April 3, 2009.

Web Analytics vs. Business Know How

I read a recent article published by a company from Australia. You can read the article here. The author raises the issue that digital marketing campaigns are becoming more useful through tracking because of the improved analytics programs that are now available.

For example, in the article he gives a case of a person that goes to a web site via a pay to click ad, but doesn't buy. He later returns via a direct mail campaign and finally submits a form showing interest. His argument is that the person was not really a lead until he submitted the form, but most analytics programs would have targeted him from pay to click ad. What part of the campaign was responsible for making him a customer?

First, in advertising it often times takes multiple touches before someone will buy. Therefore, simply saying that the last item is what turned them into a customer is really incorrect. It might and most likely was a combination of multiple advertising messages. Unfortunately determining that is a business decision, not an analytics decision.

The point is that in any direct marketing analytics is very important, but how you interpret those analytics is what gives you real decision making information. Not everyone will use the same criteria to interpret something.

The author also seems to suggest that there is technology that is available to track a person from beginning to end. How exactly would someone do that if you are doing both offline and online marketing? The methods for tracking a unique person on a web site are flawed at best. I know hard core analytics gurus will argue with me on this point, but it is true. There is no definitive way to determine that a specific person with identifiable concrete information about their identity visited your web site through a certain channel and then later returned through another channel that isn't even online, unless they fill out some type of form or request some type of report or something, but that isn't analytics telling you that. CRM systems can get close on some of this if you have the rigtht business systems in place, but again the interpretation of analytics is an excercise in business decision making.

I agree with the author to a point that their are technologies available that will help track a prospect from beginning to end, but how you interpret data, what specific technologies you use, and whole host of other variables will determine the true effectiveness. Thankfully I believe we are still a very long way from replacing all people with analytics programs and computerized decision making software. For now anyway analytics is a tool and should be used, but don't put too much stock in it. It is simply one more piece to a very technical puzzle of direct marketing.

Is Direct Mail Dead?

I saw a recent report in Ad Week that was discussing the decline and eventual death of direct mail. You can read the story here. I found the arguments that the writer made accurate, but it made me wonder if there is still a role for direct mail in our digital world.

The article says that the economic circumstances are certainly adding to the issues and that direct mail may bounce back somewhat after the economy improves. It said most marketing managers were focused on digital channels to get their message out because it was lower cost.

A few questions...

1. Is it really a lower cost?
2. Is it as effective?
3. Is there a role for direct mail in this digital world?

Let's start with the first question, is it really lower cost. From the perspective of having to print and pay for postage, yes it is certainly cheaper. However, in direct mail you used to always be able to purchase lists and hence always had someone you could mail to. With email marketing you must develop a list. I know there are services out there that allow you to use their lists, but this has a ton of disadvantages which I will discuss in a future post. Therefore, when you factor in the cost of developing a list, paying for copywriting, and set up, as well as distribution it is far from "free" or even cost effective. Is is cheaper than direct mail, yes, probably, but I wouldn't call it low cost. Now since we know you have actual hard costs and those aren't probably as low as we believe they should be we come to the next question.

Is it effective? Because everyone today wants to get into the digital marketing game everyone has some type of newsletter or promotional email mailing. Many of us subscribe to those. Add this email on top of the tons of messages you normally get everyday and if you are like most people you have waaaay more email than you can reasonably keep up with. Now keep in mind this is the email you said you actually wanted. What about the email that comes that you don't care about? The point is that we all get so much email and our attention is focused in so many directions that I am not sure email marketing is always super effective, at least most email the way it is currently executed.

Before someone writes to me and says "hey, you are an email marketing guy" don't misunderstand me. I believe email marketing can be very effective, but it must be done very well, be branded, have superb copy, and be very well executed with a great list. We are simply too short on time to react to email that isn't well put together. Therefore, to summarize you need the following...

• Branded Email
  
  
• Email Marketing Lists
  
  
• Email Marketing Copywriting

Now the last question, is there a role for direct mail? As people move to digital from direct mail there will be more opportunity to have your mail you do send stand out more. Because people will be getting less mail the mail that does come will probably get more attention, seems logical, right? Well, I would use direct mail to drive people to my web site where I would then use excellent copywriting to get them to take action. I will argue that my direct mail coming in a less crowded space and being augmented by my online marketing efforts will actually outperform a pure digital marketing campaign. Someday I will find someone to pick up this challenge and we can see who is right. In the meantime this is a strategy I am not ready to toss to the curb just yet and my clients will still be getting the benefit of it.

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.

Dot Com Crash - Here we go again?

In previous posts I have shared some of my past experiences including my very rough ride through the 1990s dot com rise and fall. While it was a bit painful at the time I wouldn't trade this experience in for anything as it helped me shape who I am today and the philosophy I use when working with clients. I was inspired to write this post by another awesome blogger who publishes a blog called The Digerati Life.

There is a quote by Robert Penn Warren...

"Those who don't remember history are condemned to repeat it."

I believe this to be so true. In the 90s we had a dot com bubble that eventually popped after that or even during that we had a real estate bubble that has now popped. What is it about Americans and our love of bubbles! It seems we are always looking for a fast and easy buck, but it seems only the first ones in the bubble ever make out and many of them end up losing because they get greedy and come back for more and end up losing it all. I can sympathize.

Anyway now that the real estate bubble has popped I am wondering if we are going back to technology to create a new bubble. I know I am going to do my best to educate my clients not to do this, but as Robert Penn Warren's quote tells us...know your history. For those thinking of the next Internet gold rush here is a video, which I originally saw on The Digerati Life blog...




While the video is funny it rings with an element of truth. Learn your history when it comes to the Internet it just may save you from some stupid choices down the road. However if you don't learn it, the good news is that you can come and hire me to clean up the mess and I will make a pile money! I have decided this time around instead of jumping in the actual Internet gold rush I will just sell the rest of you picks and shovels :)

Music Industry Is Missing The Train... Again!

For years the music industry pretty much ruled with an iron fist. They decided when and how to release music no matter what the consumer wanted and in what format. They would put a bunch of crappy music on an album with one good song and force the fans to buy the entire album for that one decent song. They also decided who would be blessed with star status, whose music would be reviewed and who would get lucrative recording contracts. Then the Internet arrived...

The music industry chose to ignore this and file sharing grabbed a hold of the market and after years of piracy and demands by music fans finally they [music industry] were forced kicking and screaming into the Internet age by releasing music one song at a time for .99 cents each. Many of us Internet industry guys watched this and marveled at the sheer power of the Internet to force change where it was needed.

However the music industry decided it might move into the Internet age, but it wasn't going to be nice about it. They have and continue to develop extremely draconian policies and security to stop piracy. I can understand after the entire Napster era their need for this, but they are again missing the train.

Now I am no sound recording genius, but I quickly figured out that music that was compressed from CD into MP3 format lost some of its quality and sound. I found as did probably many others that the sound quality just wasn't there.

However the market was quick to develop a solution, a software company developed a special plug in that as music is played from your favorite MP3 player jukebox software that it essentially "re-processes" the music and really brings it a lot closer to its original sound. I have no idea how this works nor do I care. I just know that it does work. The company that invented it used the Internet to distribute said software to everyone. Life was good.

However in an effort to again be idiots the music industry has put protections on music you download so that this third party application can't re-process the music and so it sounds terrible if you are used to hearing it the old way. Essentially they have stopped the players from feeding the music through this processing software because they believe it could jeopardize their iron-fisted grip on the Internet music market. Unfortunately customers like me who have already paid for this music and essentially own it for private use are unable to play it in a format that makes it better. They have seriously diminished my and many other's customer experience so that they could keep iron fist control of the industry.

Now if that isn't bad enough most of the players won't or can't allow users to burn this music to a CD. Again the whole piracy issue. As if I am really going to rip thousands of CDs and distribute them worldwide for my own profit potential, really, get real.

So again music that I bought online is again controlled in another fashion to "protect" the industry. So let's summarize, shall we, they were forced onto the Internet, which they reluctantly entered, but then decided to be as absolutely unhelpful and restrictive as possible.

Unfortunately this won't stop creative programmers from finding a way around this and when they do the music industry will again be forced to make changes, but not before they miss the train again. You see this draconian security they are using here is simply a way to make the Internet market a little less attractive than buying that CD in the store. Another very feeble attempt to hang onto their control and power and force the consumer to adopt to them instead of the other way around. One would hope that one day they will get smart enough to realize in the Internet age it really is about the customer and not your pathetic control that matters.

When software companies and innovative programmers find a way to again work around the fools in the music industry they will again be behind the curve and not in front of it. They will again be playing catch up. If they would simply find ways to make the customer experience number one instead of number 306 on their list of priorities they wouldn't have so many people trying to stick it to them.

At .99 cents per song, even hard core pirates have to acknowledge that it might just be easier to do it the right way instead of constantly dodging the music industry law suits and harassment's. Unfortunately when music purchased over the Internet is inferior, consumer will simply seek out alternatives, i.e. non-protected, i.e. non-Internet purchased music.

Too bad that means most likely pirated music which doesn't have the security and therefore isn't subject to all the restrictions. It is superior and superior product leaves the market wide open for pirates to keep doing what they are doing and you will have plenty of consumers willing to skirt the law to get the "good stuff".

To quote Mr. Smith from the Matrix 3... "Do you know what that sound is Mr. Anderson? It is the sound of inevitability!" In an open message to the morons running the online music industry...

That sound of pirated music is the inevitable sound of change and it is coming for you. You can be ahead of the curve or behind it the choice is yours, but know that the Internet and willing consumers are a powerful economic force that will and has changed many industries, including yours.

Internet Marketing Finds Offline Advertising Important

A new study recently completed by Jupiter Research revealed that 67% of online searches were driven by offline advertising channels, such as TV (37%), Word of Mouth (36%), Magazine ads (30%) with the balance coming from other sources.

In addition, 39% of the above cited searches converted into actual sales. Now that is impressive! One other interesting note about the study is that apparently after viewing the advertising the primary key word used in the search engine was the company name (44%) followed by other key words related to products or services (24%) with the balance coming from other items like company slogans or other product names/advertising.

I found the study very interesting for a number of reasons. First, it validates a strategy I have been advocating for years. On of my suggestions to many companies is an aggressive offline advertising campaign with the stated purpose to drive traffic to the site. My primary offline advertising has been direct mail and display advertising, which has worked very well for my clients.

Push vs. Pull

I believe this strategy is so powerful for a couple of reasons. First, mass market advertising has two principles to make it work, one that it is frequent enough for people to remember the ad and number two be memorable enough to have someone take any type of action. A key principle is that mass market advertising is very much a "push" type advertising where you are pushing your messages to people. Internet marketing is different in the sense that it is, in most cases, a "pull" type advertising meaning that the person is actually seeking you out and listening and absorbing your message.

Utilizing a relatively low cost offline channel to influence people from the "push" mentality to the "pull", i.e. your web site you change the psychology of the situation 360 degrees on the spot. Now add to that the power you have on your web site with the rich multi-media, such as video, audio, strong copy, testimonials, information collection tools, etc. and you have one very powerful marketing vehicle on your hands.

Strong Strategy for Local Marketing

This strategy works very well for companies that operate in a limited geographic area and it doesn't pay for them to obtain visitors and inquiries from other geographic areas outside of their area of operation. However as this study indicates it also works for companies that use the strategy to drive traffic to a site regardless of geographic operation.

Now to make this strategy work well, especially if you use direct mail or display advertising as I have is to...

1. Use a strong headline to get attention
2. Use the company name in the headline
3. Use well written and hard hitting copywriting and direct response strategies.

Without a strong headline you will never have anyone even notice your ad, which will make it a waste. Not using your company name in the headline is also a big mistake according to this study since a bulk of the searches done after viewing offline advertising were on the company name.

Finally, failing to use persuasive and well written copy for your ads and direct mail packages will not convince someone that taking the time to even sit down and search for your company is worth their time. You need to give them a reason, benefits, and irrestable offers to take time to actually sit down and search out your site.

If you accept the findings of this study it will have a dramatic impact on the convergence of Internet marketing and offline advertising, which some of us have known for a while now, but it is good to have your strategies validated by others, even if they are bit late to the party.

Michael Temple

Open Source vs. Pay to Play Software

A new article in InfoWord wonders if open source software will eventually take down the big pay to play software companies/applications from Microsoft, Oracle, and SAP. The article goes on to state they don't believe this will happen.

Personally, I love open source software and whenever I get a chance I have my developers develop web based applications in PHP with MySQL. I think the open source movement is an excellent one for a variety of reasons. First, from a security standpoint with so many companies and individuals working on applications a lot of the security holes that appear in Microsoft applications find a way of being worked out in Open Source. Now obviously this isn't always the case, but more times than not you don't have the same types of security problems with open source as you do with other vendor specific applications.

Second, open source applications can work extremely well. I have several open source tools that I use on a daily basis and even a few I openly recommend to clients for specific purposes. In these specific cases I find it difficult to even find a pay to play application that works as well.

However, sadly, I have to agree with the writer of this article. I don't believe the open source movement is going to eliminate the vendor specific applications anytime soon. For several reasons. First, at the end of the day we have a market economy and it takes money to continually develop, improve, and market a software application. The open source movement is one of volunteers and voluntary collaboration and while this does work for the open source movement many IT directors and corporate managers will not be willing to risk their butt on applications that may not be supported or have regular production schedules associated with them. There is an old saying that nobody ever got fired for buying IBM. This saying developed because at the time IBM had the best systems in the world and gave outstanding support to their clients and buyers knew that if they had a problem that IBM would fix it.

Unfortunately open source can't compete with that... yet. Many times if you have an open source application and need help you must spend a great deal of time posting and reading in various communities to find a solution to a problem and sometimes you never find one. Now this happens with Microsoft applications as well, but if you need it you can call a company that can offer support. They can offer this support because they are making a profit on the sales of their application and the corresponding support contract.

In addition, open source programs are released as people work on them and don't have specific releases and dates for releases. This makes it very tough on the company that needs to carefully plan upgrade schedules and roll outs to users. In addition, if a feature or problem is present in an application often times there is no guarantee when or if a new release will come out that will address the problem, which creates a problem for managers when they must answer to their bosses, boards, and shareholders.

I believe the strongest contribution that open source provides to the market is its ability to scare the pay to play vendors into constant improvements and innovations in their products. They know that if they fall asleep for even a little while that the open source guys can and will be there to eat their lunch. I love the fierce competition these guys must endure to stay alive because it ensures that we the consumer always have the best products and applications to choose from which is a fundamental principle in economics.

I will always use and endorse open source programming and movements, but I simply don't think they will eliminate the pay to play vendor. However if they keep that vendor on his toes and constantly innovating then they have provided a priceless service to the industry.