I’m taking tonight off, we put in an offer on a house yesterday and there were 3 other offers that came in. Ours was not selected.
On the positive side, my new project with Christopher Penn will launch this Thursday. If you are into anagrams, here’s the new name:
Will Herman sent in a comment on my post bemoaning the end of the pay per click advertising (PPC) gold rush and asked if Pay per Action will replace Pay per Click. There’s been a lot of hype in the past couple of weeks and Google recently moved in that direction by allowing PPC in their content network as opposed to pay per thousand impressions (CPM).
My thoughts here are still evolving, but here’s the best I have so far:
Good question… my only answer so far is… maybe. It’s getting more complex across the board. On one hand you have the advertiser that would love pay-per-action, and on the other side the media property that would prefer to get paid per thousand impressions and leave the risk of ads being relevant or not to the advertiser. Clicks have been a happy medium, with click fraud only being a minor concern.
Paying for conversion shifts more of the risk to the media property – if my advertisers have terrible landing pages I’m not going to get anything – worse yet, they get the impact of their brand on my page for free. These types of affiliate deals are fairly common already, but because of the “free rider” branding most pubs have been very picky about who they will allow to ride side-by-side with their brand.
Most of the current deals like the one described above is a variation though – the affiliate is doing the advertising on behalf of the brand that is selling and the affiliate gets paid when they bring in deals – basically outsourcing a portion of the marketing function. I guess you could say the with a google pay-per-action campaign the marketing is now coming through the source rather than a contractor (rather than someone else coming up with a message for you, now your message goes out into uncharted waters).
I think the market will handle this – qualified leads are worth significantly more than clicks. To use the previous discussion, while I’m not willing to pay $5 for a click, I’d gladly pay $200 for a name that has been pre-qualified through 5 questions, is in the US, and is a confirmed identity with a corporate email address.
This shouldn’t be a tough sell to the media property – they can choose between getting paid a nickel for a click or $100 for a conversion. Publishers will eventually not have to sell advertising space, but rather manage it. They no longer have to worry about empty space, but rather non-performing ads. Sadly, I think this is beyond the core competence of most publishing organizations (think about this – that’s one of the benefits of AdSense now – the publisher does no work at all besides initial setup).
For the savvy publisher this would just be a matter of testing, and now that I think about it Google could arbitrage that since they already have the stats (I don’t know? Is that evil? Gambling? Insurance? All of the above?). So the bottom line is I don’t see pay per action getting big until the tools to do it are as simple as adsense – which I think could happen in as fast as 1 year if Google decides to “work the float”.
This is yet another sign that the land grab is over. The days of farming out 20,0000 keywords at a nickel a pop are over. Just as in adwords the benefits now will be driven to those who can write relevant ads that get (what we consider now to be) exceptionally high click-through rates. The creepiest part of this is that it’s all driving users to increase the level of relevance of their ads – playing into Google’s hand and wallet at the same time.
There are many hackneyed sayings about the cynics being the only true romantics. Most of them revolving around some variation of “the reason many people are cranky is because their optimism is constantly challenged by the seven deadly sins of those around them”. I’ve also been doing some reading about the cyclical nature of human attention and interest and there are many patterns that emerge. One recurring theme is the Tragedy of the Commons. The basic idea is that if there’s stuff out there for free, it’s going to get ruined. In fact, you might want to check out that article before reading on, as it’s something that you should become familiar with if you haven’t already.
The tragedy makes some bold points – without attaching economic cost, you begin to have problems. As much as it goes against our charitable nature, it’s important that things have cost attached to them, and in fact, that cost needs to be high enough to discriminate between other ways to deploy or purchase resources.
A good example – a couple of months back there was some hype about Starbucks paying 2 cents a day or some other pittance to coffee farmers. The not-so-huddled masses gathered and said they should be paying a “fair” wage. Granted, the poverty level in many countries is one of the most important problems we have to face, but throwing money at it will not solve anything. Coffee prices are low because there’s too much of it on the market, paying more for coffee nobody wants will only entice more people to grow coffee, making the situation worse.
A similar problem – standing on the side of a busy intersection with a sign asking for money can be a profitable venture. For the first time I saw two people fighting over turf by the Alewife T Station during the rush hour. I’m not saying that the homeless should be ignored, I’m saying that throwing money at them will probably not change anything for the better.
So, what got me on this rant? A post yesterday about people making death threats against other bloggers. When there’s no cost to doing business in the commons, eventually neighborhoods will get run down. There will still be many great places to spend your time, but there will also be parts of town you don’t want to be seen in.
For me, this is the end of my Golden Age of the Blogosphere.
I reached a tipping point with a number of paid search campaigns over the past month. More than one client has thrown in the towel at click prices that have increased 100x in the past year. This made me think more about relevancy – the old model was to cover as many keywords as possible. The new price points make that no longer feasible. At 5 cents a click you can deal with a 1% conversion rate. At $5 a click your expense has gone from $5 to $500 per lead (and that’s assuming a 1% conversion rate, which is well targeted, all those marginal ones down at 0.5% are now edging into $1000). Unless you are selling medical devices or airplanes it’s time to start looking at blogs, vertical publications, or just about anything else.
So does this mean that paid search has hit it’s peak? Unless newer customers come in with a higher threshold for pain than mine, there’s no more money to get…
It’s sunday, so that means The M Show will be rolling out later today. Some other interesting stuff:
I just finished reading a paper talking about applying the Long Tail to branding, rather interesting. Any blog that considers the Second Law of Thermodynamics relevant to Marketing is worth my time.
Project code name “Coffee” is scheduled to launch on Thursday if the current pace continues.
Bum Rush the Charts did crack the top 100, congrats to Christopher Penn and everyone else involved with the program. Looking forward to hearing the final numbers.
Chris Pirillo pointed me to this via twitter and then it hit me as a brain buster – until now computers could only hear, this guy has made them able to LISTEN.
Tomorrow (Thursday) is Bum Rush the Charts. Here’s the story:
A bunch of us who blog, podcast and vidcast want to show that focused, relevant content is the new king. We want to see how much impact we can have on iTunes and raise some money for a good cause at the same time.
The track to buy is called “Mine Again” by Black Lab.
As all Marketeers love stats – here are the critical ones:
On a 99 cent purchase of an RIAA artist:
– 19 cents goes to Apple
– 75 cents goes to the label
– 5 cents goes to the artist
On a 99 cent purchase of Mine Again on March 22:
– 14 cents goes to Apple
– 5 cents goes to the scholarship fund directly
– 40 cents goes to the band
– 40 cents goes to the scholarship fund via Black Lab’s donation
Click here to Bum Rush The Charts and make a charitable donation.
Here’s another special for you – I’ll be gifting the track to up to 50 subscribers to The M Show insider, the email newsletter of The M Show podcast. You can sign up on the homepage of the best business podcast.
How high with the track go? Keep your feet on the ground, and your head in the stars!
“Stay on message” or “What is our messaging” are tired old marketing phrases. Spending a lot of time crafting the first paragraph of your boilerplate company description, or for your website or press release is boring stuff. I’ve been thinking more about Jordan’s Furniture and other experiences that make me want to buy one thing over another.
I stick to a high protein diet because my body doesn’t seem to handle processed flour or sugar very well. As a result I tend to get tired of eggs for breakfast 7 days a week and have a protein shake instead. I was at the local nutrition store and they were out of the magic powder I normally buy. The guy working there said I should try another brand since the one I buy is from a company that does more marketing than research and they don’t have the best reputation.
On a side note – here’s a missed opportunity. I asked if they had samples of other products and he said no, but there was a money back guarantee. Like I’m going to buy some 5-gallon pail and take the time to drive it back to the mall if it tastes like oatmeal sludge. If they just had one open and I could give it a try, I could be riding another brand now.
The young man looked like he was student-aged and I would say of average build (except now it seems that means 15 lbs. overweight), as in pretty good shape. This was at lunch near work and there’s a similar store near my home (run by a different company though). I found the massive container I needed of my fave and went up to the register. The dude working here was about 6 ft. and probably around 220lbs, and could easily crush a monkey skull with his bare hands (i.e. jacked). He asked how I liked the Syntha6 and I said it tasted good. He said he really likes the products from that company and he’d have to try it. I’m no longer concerned if I’m with the right product.
For the past 5 years I’ve had a major shift in my philosophy towards work and education. Forget being well-rounded – find one thing and do it better than anyone else. I was excited to see that Seth Godin has a new book coming out and a blog to go with it. If you are a fan, check out The Dip.
It’s Sunday and that means a new M Show…
I ran into my first Wiki Spam today. That’s my brainbuster – Spiki
Here’s why you should listen to the show: (Go there now)
M Show 142 – Massive, Clothes, Racing Against the Clock
Intro – Julien Smith from In Over Your Head
News:
Massive Running the Game
Time to look like The Economist
L.L. Bean – Web beats Stores
Boston Now – Coming soon
Ben Edelman continuing to rock the house.
Talk:
Worn out clothes
Idiocracy
Wiki Spam – Spiki?
Entertainment:
Racing Against The Clock
Support the M Show by using this link to shop at Amazon
Feedback to john@TheMShow.com
Today was one of those days where I had no events running so I was able to try and tame the paper snowbanks that had built up around my desk. I have a bad habit from a prior startup of just throwing invoices in the trash until I get a personal call or notice. Every day I say a prayer of thanks that I’m no longer in an environment like that (and of course M Show Productions, LLC pays bills realtime thanks to the miracle of PayPal and the internets).
My drive home was a disaster, snow has been falling since lunch, and unfortunately my new Garmin died on me this week so I had to ship it back for repairs. I think that BJ’s actually sold me a unit that had been returned b/c there were already some locations loaded on it. I’ve returned a bunch of stuff to BJ’s though so I thought I would cut them some slack, and it has worked fine for a month so I don’t think it has anything to do with that.
Obviously I’m rambling here after a busy week at work, have a good weekend!
-J
