The Next Big Thing - Network Intelligence

Last week I read and listened to two stories that when combined painted an interesting vision of the future. One story shared the results of a contest sponsored by DARPA in which participating teams were to find 10 red weather balloons released at various locations across the United States. The second story was that of Google launching personalized search.

The winning team in the DARPA contest was a group from MIT who used social networking and a multi-tiered affiliate rewards structure to provide a financial incentive that aligned the interests of the team in pursuit of a common goal. In listening to the story on NPR's Science Friday, I recognized the power of leveraging a social network to refine information and create consensus around points of knowledge. I also thought of why multi-level marketing (MLM) compensation plans are so effective at building a channel. Participants were rewarded for recruiting members who were ultimately responsible for providing information that led to the successful location of the 10 weather balloons, so people were rewarded for quality and results rather than on participation alone.

After stripping away the financial incentive, the large social network created to find the 10 weather balloons was a use case of something that has been happening for years on a smaller scale online. Message boards and social encyclopedias are built and ultimately succeed as communities of interest gather around specific topics. The difference here was that the network was not a casual "ad hoc" network created to by a group of individuals trying to create the best encyclopedic entry on a topic of common interest or to share specific knowledge through altruism. The network MIT created to win the DARPA challenge was designed to achieve a specific goal, in part by providing a proper incentive.

The end result was what I am calling Network Intelligence, the aggregate intelligence of everyone in a network that surpasses the intelligence of any individual for the defined purpose of the network.

This is not so different from institutional knowledge; however, the concept of institutional knowledge tends to be historical rather than actionable. You could think of Network Intelligence as that portion of institutional knowledge that is transactional or relevant to a specific purpose that is being acted upon in the present.

Network Intelligence is also what will be taking Google's search to the next level once personalized search becomes "networked."

I was consulting with a friend on Thursday, and he was excited to show me how many pages on his sites had reached the #1 position for various keywords. I then remembered reading about Google's personalized search a week before. We went through his keyword searches on Google using our own computers and found we both received different Google result pages for the same searches. Prior to our meeting, my friend had spent most of his time reviewing his own sites and tracking internal changes over time. I hadn't spent much time visiting his sites in the past. Most of my searching using his industry keywords had been to conduct market research and sign up for offers from other companies.

Where he was seeing his sites and pages in the #1 position for very competitive keywords, I was seeing the same pages in the #3, #4, or #5 position. So our respective search results were indeed personalized based on what we had been searching and clicking on previously within the results page.

(I'm not going to go into all of the SEO and relevancy implications here, but there are now questions to be answered related to how new sites and pages are going to compete under this new methodology . . . at least until network intelligence is applied.)

BUT, what would happen if I had the option to have my friends' preferences and search habits influence mine? If, for instance, I had wanted to follow the same biases of my friend, who is an expert in his industry, could I have seen the results presented in the same order as his appeared?

In order to do this, Google, Facebook, or another aggregator of personalized information would need to create an algorithm to have the search results and preferences of friends influence the results of each other.

Another feature I want to have is to follow the search preferences of specific individuals who have opted in to allow their preferences to be followed. I could then (with the permission of my friends) see which search results were most relevant to them in specific areas. There are huge privacy implications here, but I think the service would work incredibly well as long as specific search terms for which my friends were searching weren't shared . . . or maybe it would be even better if they were.

I would love to know what my friends were searching for online. Oh, the implications on privacy and individual behavior! How would this impact a friend who becomes embarrassed because he is searching for nefarious content? How could this be leveraged for competitive research and corporate espionage? Allowing transparency and the sharing of search habits might change the behavior of those whose public values and private behavior is inconsistent because of positive social influence. Is that so bad? I think that could create one of the biggest safeguards against the viewing of illegal content and pornography. Would people be viewing it if they had opted into a service that let others know exactly what they had been searching for?

But I digress. The first implementation would simply be applying an algorithm to my search results based on the aggregation of my social network. I would refer to this as "social intelligence," but that concept has already been used by Daniel Goleman and others, who have spent the last 15 years defining different modes of intelligence. Network intelligence has already been used by computer scientists, such as Drew Major and others, to explain where "intelligence" resides in a network to manage request routing, caching, and other network concepts. But I think the concept of harnessing the intelligence of a social network (whether formal or informal) deserves the title of Network Intelligence.

The real-time internet, such as watching trending items on Twitter, provides some network intelligence, but the network is too broad to be useful for a specific purpose beyond identifying topics of interest. The REAL value of Network Intelligence is in the network itself--surrounding yourself with the most intelligent and thoughtful people on a broad array of topics to provide you with the most intelligent and insightful information on any subject of interest.

Now, here's the interesting point: How will network intelligence influence the evolution of social networks over time? What will happen to the relevancy of pluralism, multiculturalism, and the value of differing opinions and diverging theories? Won't someone just surround him or herself with like-minded people? Not if the intelligence isn't helpful over time.

Those who provide "bad intelligence" will over time become less relevant as the wisdom of the masses is refined through collisions with new thoughts and ultimately hardened through agreement. Network Intelligence is not static but a concept full of movement and change through "living" knowledge and wisdom. The network accommodates and assimilates new information that it finds useful and "loses" less meaningful information over time.

In the end, I believe the concept of network intelligence will drive us to the pinnacle of human intelligence that can be found through the reasoning of humankind. While I believe there is a higher source of knowledge that a human social network, I don't believe there is anything more powerful that can be created through the integration of human behavior and technology.

Black Hat Marketing Techniques Exposed and Why to Avoid Them

Exposing Black Hat Marketing Techniques

Well, I said nearly a week ago that I would put this post online. This post has implications that go far beyond online marketing and economics into the realms of politics, ethics, and even religion. I'll leave it to the reader to make those connections and associated implications for him or herself.

There is a principle I've found to be valuable throughout my career called "work." I remember sitting in a physics class at Butler Middle School when Mr. Browning said, "you can't cheat work." As a principle of physics, he was absolutely right. And the principle also applies to online marketing and life in general. If you want to succeed in the long run, you have to work for results and to build long-term value.

Yes, you can innovate and find seems and creases to exploit and make money through improved efficiencies. That's a great guerrilla marketing strategy I have employed when creating search-term optimized awards programs, niche interest pages, and directories of user-generated content. But those projects all had something in common--they provided added value to the economic system. Partners, customers, and search engines loved these programs for improving relevancy and access to valuable content.

Most black hat marketing strategies drive results through unfair or unethical practices by ultimately attempting to cheat work. And what most of these approaches share in common is that they are only effective for a short time before they are exposed or lose their effectiveness (requiring just as much or more actual work than legitimate marketing methods).

Here are a few examples of black hat marketing to consider:

The Bump

A bump is an offer added to the end of a lead or CPA offer to essentially get people who have just signed up for something to (usually unwittingly) sign up for a second or third offer as well. When implemented, the bump offer usually appears as a required step in completing the initial registration process. Typically, this offer is pre-selected on the first confirmation page with "hidden" billing terms. In essence, the customer is now being billed for two different offers by completing one. Credit card information entered for the first offer is usually shared with the owner of the second offer as well, so the user doesn't have to go through more than one registration process (or see that they are actually going to be billed for subsequent offers).

I think Classmates.com was the first company I saw effectively employ a bump offer when signing up for a free site membership. Upon completion of the registration, the site made it appear that you needed to complete a credit card application to before the process was completed. This offer was presented as a way to receive access to their premium services or to receive a $15 credit. They implemented this offer back in 1999, so the details have become fuzzy in my mind. I just remember being mad when I clicked through and saw what they wanted me to do. This old bump offer, however, wasn't nearly as slick as current bump offers. You still had to complete a second form rather than being opted in automatically to participate in the offer.

Shared Billing

This is very similar to a bump but comes in a few different forms. Many offers I've seen recently promote free access to a premium service. The catch? To receive the free premium service, you must sign up for one or more partner offer. Similar to the bump, you are often caught in a seemingly never ending cycle of registrations to get what you thought was a straightforward offer. Those who are most effective include a page where you can sign up for multiple offers and then enter your billing information once for all of the offers.

This practice of sharing credit card information across vendors is dangerous. It also tricks the consumer who is just trying to get a free offer into paying for service he or she doesn't want or need through a confusing registration process.

You can read about one such program, run by Affinion, that was recently exposed and featured on Good Morning America among other media outlets: Co-registration probe. Evidently, companies including 1-800-Flowers, Orbitz, Shutterfly, VistaPrint, and more than a dozen other companies made more than $10 Million from this program. Classmates.com is included in the $10 Million circle. Dozens of other companies earned more than $1 Million from the program.

Advertising and Referral Arbitrage

This is a rather simple and unsophisticated tactic that employs PPC advertising and SEO pages to generate incremental advertising revenue from Google AdSense and other advertising networks. The tactic usually consists of creating SERP (Search Engine Results Page) spam pages tied to specific keyword where advertisers are paying a high cost per click. The trick is to then get traffic to these pages that have little value in themselves and then get people to click on the ads.

You've probably visited dozens of these sites. Most make little sense or are simply directories of keyword categories with advertisements. What's wrong this this tactic? The "marketer" is not adding any value and is actually frustrating the customer who is looking for legitimate, valuable content. The advertisers also lose because their ads are getting additional clicks from customers who are tricked into clicking on ads rather than actual product links.

In the past, I have literally clicked through up to a half-dozen lead referral and directory sites before getting to a page where I could actually purchase the product I had search for in the first place. Far from adding value or efficiency, the companies that run these sites are simply inserting themselves as "value sucking" intermediaries.

Cookie Stuffing and Other Affiliate Fraud

You're on a site looking for a new phone service because you're not happy with the one you have. You find a site that lists six competitive services. You click on one to check it out. The site you are on is an affiliated site of the six services you are comparing. They have signed up to receive a commission from each of the six competing phone companies any time someone they have referred makes a purchase. But they want to be sure they get credit for making the sale . . . whether or not they actually do. So instead of setting a single cookie that tracks the affiliate click to a single company, they run a script that sets cookies for ALL SIX COMPANIES before handing the customer over through the first link. They may also set a few cookies for phone conferencing or other phone-related products as well just for good measure.

What's more? The site is most likely masquerading as a review site, so you believe you are getting an impartial review of the products in question. In this case, all of the products probably sound great, but the service that provides the best commission probably sounds just a little bit better.

Promoting Products and Services with Little or No Value

Take a look at the affiliate offers on ClickBank.com when you have a little time or want a good laugh. Many of the offers are nothing more than publishing free online content as eBooks or aggregating and selling videos from YouTube as a "video tutorial series." These companies make sure they charge enough for these "products" that they are able to enlist greedy or gullible marketers to push their offers. Is an eBook on how to assemble your own windmill really worth $700? Even when those instructions are found on the Internet for free?

Carefully research any product or service you promote, so you aren't unwittingly associated with a scam or even a horrible product. Chances are, those who sell such deceptive and valueless goods will not survive long enough financially to get around to paying you for your marketing services.

How Black Hat Marketing Poisons the Well

So, what's the big deal?

There are three main reasons to avoid black hat marketing: 1. personal or corporate integrity, 2. buying into a fraudulent ecosystem, and 3. sacrificing long-term success for short-term fixes.

Personal or Corporate Integrity

Do you really want to be associated with any of these tactics? I hope not. I was talking with someone last week who participates in advertising arbitrage. A comment he made when I explained that he should add valuable, unique content to the optimized pages he had created was, "that sounds like work." I can't think of any better personal indictment or clear sign of a lack of integrity than the stated desire to get something for nothing. Someone I admire recently shared something his father had taught him: "any deal that is too good is stealing." He was evidently arguing for the principle of fair value exchange, someone fewer and fewer people seem to embrace.

Buying into a Fraudulent Ecosystem

I've ranted a few times about this point already, so I'll be brief here. Once you engage in black hat marketing practices, you are damaging the economic engine for the industry that is paying your bills. You are also swimming with sharks and shysters who are also trying to do the same thing. The borderline between what is ethical and what is legal can quickly become blurred, and you may find you have been treading on the wrong side of that line.

Another risk is that all of the revenue you are "earning" may never actually make it into your bank account. Why? Merchant accounts in shady industries are often frozen or suspended, marketing partners may not pay in a timely manner, and many companies that sell products or services that are "too good to be true" will fail financially or be shut down. This is an ecosystem in which you can't afford to participate, even as a little fish.

Sacrificing Long-Term Success for Short-Term Fixes

Yes, any company can get drunk off of their own bad revenue. Such a drunken stupor nearly always results in bad decisions that stifle the long-term success of the company.

I am aware of a company that was making money on ads that promoted trivia quizzes, IQ tests and that like that found it very difficult to ween themselves from the revenue these ads provided. What seemed like innocent ads were actually powerful and deceptive tactics to get people to sign up for paid services to receive the results of their quizzes. Wouldn't you want to give your cell phone number to receive your IQ results if you just spent the last 20 minutes completing the evaluation? Evidently, lots of people wanted the results of their quizzes. The fact that they were signing up for a monthly recurring bill was hidden in the small print.

They were so successful with their offer that they were willing to pay an $8 CPM (Cost Per Thousand impressions) to any website publisher who would run the ads. But it didn't last. After some time, they decided (probably with help from the FTC or FCC) that they needed to make the terms of service in the small print more obvious. This reduced their conversion rate and the rate they were willing to pay for CPM advertising. They were probably still getting tons of complaints and credit card chargebacks because they soon added a phone text verification to the process. This again drove down the conversion rate and CPM they were willing to pay.

Meanwhile, the website publishers who were making money on these offers were reluctant to shuck the ads from their sites, even after receiving angry complaints from site visitors. Why? Because they had gotten drunk off the revenue and didn't have a good revenue replacement. And the downward spiral continued. The publishers with foresight focused on improving their services to get more qualified visitors and expand their advertising inventory. Those that reacted poorly focused on increasing the number of ads units on their sites and on other short-term strategies to temporarily prop up revenue that had been too good to be real and sustainable.

In another instance, I worked with someone who was promoting his product through a bump offer. In the end, he had so many credit card chargebacks (for what could have been successfully marketed through legitimate methods) that the merchant account provider assessed him with a huge fine and canceled his account with more than $20,000 in frozen funds. After several months it appears he will be able to collect most of the money that was frozen in his account, but the cost of the lost cash flow was tremendous. In the end, the decision was made to shut down the site rather than open a new merchant account and start over.

Conclusion

After reviewing the tactics listed here and several others, I am still of the opinion that there is no free lunch when it comes to internet marketing. I don't believe people who engage in these practices will ever enjoy long-term success. Instead, they will continue to hurt consumers and the economy at large as they exploit their next opportunity and execute their next scheme. They merely understand how to combine technology with the art of deception to line their own pockets at the expense of customers and the very companies they promote. They engage in changing the dynamics in a zero-sum game, where if they succeed everyone loses.

Is social advertising a house of cards?

Chris Lee, the owner of Heritage Quest and a former colleague of mine at Ancestry.com, passed along an interesting read this morning, and article entitled "The Digital Economy's Coming Subprime Crisis (And What You Can Learn From It)," a Harvard Business School article written by Umair Haque.

Interestingly, the article's URL is facebooks_scam_ads_and_the_loo. This is an ongoing issue that Facebook has been addressing with partners but hasn't taken head on itself. Here's a quick example: Facebook suspended dozens of applications a couple months ago because of noncompliance with the company's new advertising terms and conditions. A new application quickly appeared showing where Facebook itself was still serving and profiting from these same ads that they had used as justification for suspending the applications of their "development partners."

As someone who lived through the .com bomb, I see several of the same symptoms today that were prevalent then when advertising rapidly declined. I love this article from an economic perspective, but the evidence is also easy to see when buying and selling advertising:

1. New ad networks are constantly popping up (how many can be supported by the economy?)
2. New "models" provide no incremental value but are simply created to get ads in front of consumers. Anyone remember eTours.com in 2000 or alladvantage.com in 1999?
3. Some ads are pervasive across the internet. Can anyone really be making a profit with ads that are presented millions of times per day to a broad swath of consumers? Maybe for a few weeks . . . but the diminishing returns will certainly turn to losses very quickly.
4. Finally, there is the problem of an investment-funded economy. Companies that have received investment often use that money to prop up metrics that don't equate to revenue, such as registration or visitor numbers. An economy that is not based on real value exchange will always decline.

Great read. It also ties in nicely with what I wrote about a couple weeks ago on Competing in a Down Economy.

For those who are trying to market your site or products in the current online environment, I'd love to get your thoughts on this.

Using Interactive Marketing to Compete in a Down Economy

Yesterday, Cydni Tetro, the CMO of FamilyLink.com shared that a VC she met with said, "flat is the new up" when referring to revenue trends. It seems that everyone I've been talking with lately has a company that falls into one of three camps:

1. Well positioned in a declining market.
2. Maintaining sales at a higher cost than the past.
3. Experiencing growth because of their position in a growing market.

In healthier times, I would expect to see more companies in a fourth category: companies aggressively growing within an expanding market; however, I'm not aware of these firms today. One of the challenges of a down economy is that the rate of innovation tends to slow. Instead of adopting "reinvent or die" as a mantra, companies are hunkering down for survival and trying to maintain their current revenue and market share positions with as little investment as possible. Since the "entire economy" is down, they believe that maintaining their revenue position and market share is an adequate goal. And for the most part, they are right.

But, whenever there are challenges in the market there are also corresponding opportunities. Why? Because each company will react to those challenges differently. The variables by which success has been measured and through which success has been achieved will start to move unpredictably, and companies can see success turn to failure overnight if they are not vigilant and adept at adapting to these fluctuations.

This was certainly the case for Ancestry.com after the Internet bubble burst in 2000 and 2001. Ancestry.com could have easily become another casualty and gone the way of pets.com, but we were always looking at our bottom line and were able to use interactive marketing to continue to improve the position the brand and service. We had visibility into what was happening in the market and with our online marketing. We were thus able to implement programs and tactical changes to maintain market share at the same time the online economy was in rapid decline. The big difference then was that online activity and purchases were actually increasing at the same time businesses were failing, causing an overabundance of cheap ad inventory. Ancestry.com was able to increase their "interactive dragnet" at the same or lower cost than before. This is one of the key reasons the company is in the position it is in today. But today, the challenge is that online spending is flat or in decline at the same time competitive pressure is increasing. The remedy today is a little different.

Interactive Marketing in Red and Blue Oceans

Here is a sample scenario in terms of interactive marketing, but the same applies elsewhere (in a cause and effect sequence):

In this scenario, the economic pressure creates an increasingly bloody "red ocean."

1. Fewer consumers are looking for your product that is clearly an unnecessary purchase.
   
2. You chase these customers with more advertising dollars to maintain revenue and market share.
3. Your advertising rates increase.
4. Your cost per acquisition increases.
5. Your competitors increase their advertising spends.
6. Everyone starts getting "cute" to exploit perceived gaps, creating wide swings in cost and performance.
7. Soon, you or your competitors decide the increased cost isn't worth the return and decrease spending levels.
8. Costs temporarily come back down below previous levels.
9. You or competitors jump back in with more money because costs are now lower.
10. The cycle continues . . .

This is the issue with advertising dollars in the "bloody ocean." (If you haven't heard about red and blue oceans by now, where have you been hiding?) The challenge is that when consumer demand goes down, it actually costs more to reach potential customers because of increased competition for scarce or effective advertising inventory. Economic theory would state that, overall, when the economy declines advertising rates should also also decline because fewer companies can afford the same ad rates. Demand for advertising inventories should decrease, leaving an excess supply, which should drive down costs. However, as outlined in the above scenario, this is not the case in a very competitive market . . . until competitors in the bloody ocean simply can't afford to pay existing rates. So, how can you compete effectively when you and your competitors are tempted to act irrationally? What should happen is the following: Pursue a "blue ocean" marketing strategy:

1. Fewer consumers are looking for your product that is clearly an unnecessary purchase.
2. You take the time to identify advertising strategies over which you have the most control and the least exposure to competitive pressures.
3. You maintain or decrease your red ocean spending strategies, such as PPC search ads, sponsorships, and display advertising. You don't want to just turn these off, but you don't want to focus on these strategies to maintain market share at the same time your competitors are becoming more desperate and may drive up marketing costs for these programs. Give these strategies time rather than money, and you will likely see your advertising rates decrease.
4. Advertising rates maintain or decline based on your decision not to escalate spending.
5. Now, you focus on creating a "blue ocean" marketing strategy. You should always be doing this anyway, but this is more important than ever in a declining market or in a weak overall economy.

Swim into the Blue Ocean

The following are five strategies to creating some "blue ocean" from an interactive marketing perspective:

1. Engage in joint marketing initiatives. Join with companies with related products to share marketing dollars through product bundles, barter advertising, value added free trials, or other joint efforts. You are now increasing visibility of your product or service without incremental cost. You are also focusing on strengthening your market position through strong partner relationships. This is a great long-term strategy.
2. Go after the long tail. Instead of concentrating on current interactive marketing, where competition has been fiercest, expand your advertising efforts to include a longer tail or into a market that is less competitive.
3. Focus on relationship programs. Affiliate programs, friend referral programs, and social marketing are extremely low risk. All of these programs are free or straight pay for performance based on actual customer acquisition (rather than impressions, clicks, or other metrics). If you can't motivate your customers to share your product with their like-minded friends, your problem may be much deeper than your interactive marketing strategy. Similar to joint-marketing initiatives, these programs provide you with a long-term strategic advantage. A customer who invests time and effort to share your product with someone else far more likely to become "bonded" to your brand than someone who doesn't. The same goes for those who invest time optimizing affiliate links or talking about your service on Facebook or Twitter.
4. Focus on business model innovation for thought leadership. Can you make your business model more attractive or implement a marketing strategy that generates buzz? Similar to engaging with partners, any strategy that leads OTHERS to talk about your product and participating in your marketing strategy stretches your advertising dollars. If you have a CD-ROM product, consider an online offering. If you have an online offering, consider making more of your service available for free.
   
   Don't just make a change (i.e. providing your service for free for a limited time or implementing an ongoing customer competition with weekly winners), but tell everyone about it. Bloggers, analysts, and even the press are likely to pay attention to anything that is novel related to business model innovation. In mature markets, this is one of the BEST strategies to create a strategic barrier. Ask yourself: "How many of my competitors can afford to change their business model right now?"
5. Think guerrilla warfare. Consider using Compete.com, Keyword Spy, Spyfu.com, or another service to gain insight to your market segment and gain an idea of how your competitors are reacting to the economy. Competitive insight and careful analysis of data and trends are important activities that can give you a competitive advantage during difficult times for your market or the economy at large. See how you can improve your online presence using free and low-cost services, such as free download services, social media, participating (thoughtfully) in forums and message boards, etc.

As with any economic disturbance, you also need to be able to separate the effects of the economic downturn from other factors that may also be hurting your sales. I'll write another blog entry about how this is done, but it begins and ends with having excellent business analytics.

Taking the time today to invest in interactive marketing relationships and experiment with blue ocean strategies will ensure you are properly positioned to get the biggest gains when the market rebounds.

Incomplete Experience Paths - A Marketing Nightmare

I just took the time after several months to fix an update issue I was having with some software drivers on my computer running Vista. Here was the scenario:

The HP Update program that was supposed to provide software updates wasn't working. Every time I would try to download an update, it would download but fail to install and would end with the following message: "HP Install Canceled" and a red "X" next to each update I had been prompted to install.

Finally, a few months ago, a new update appeared with the name: "Urgent! HP Install Canceled Issue Fix." It sounded like it was just what I needed to get the other updates to install. The problem was that the bug that the software solution promised to remedy was blocking the installation. Cruel irony.

Well, I was prompted today to download and install this update again and went through the trouble of researching a solution. The solution was simple enough: I had to run the HP Update software as the computer's administrator. No biggie, but what a broken customer experience! Here are a few of the most offensive experience gaps I have seen over the years. Most of these could be prevented easily with a little more review and preparation. But mistakes do happen.

• Incomplete messages being sent to customers. One of the most effective messages we ever sent at MyFamily.com to millions of users was an incomplete message that said "Today is April 18." Many people clicked to see what was special about April 18. Some expected it was part of a stealthy promotion we were running, but it was just some incomplete code that was rolled live. In the end, we looked rather foolish when we explained to customers what had happened.


• Missing calls to action or response links. Every communication with a customer should invite them to take action. Newsletters are the worst offenders in this area. Newsletters are to inform, but they should also invite customers to do something. One of the most important steps to take when writing any newsletter is to segment your customers from your prospective customers to give each group a different call to action. A subscription service, for example, should always include invitations to non-members to join their service in each newsletter and then customize the newsletter for current subscribers with messages about how service improvements have increased the value of their membership. This is a simple concept that is easily done and often overlooked.


• Missing links. Here is the most obvious lesson of all. If you want someone to get to something on your website, you should promote it . . . or at least link to it. Early in my days at Ancestry.com, I implemented a redesign of the homepage with input from several stakeholders. I reviewed the design with Paul Allen, and he wanted to reduce the clutter on the page further by removing more links. One of the links that was cut was the link to the "Learning Center." A few weeks later, Paul came to me wondering why our traffic to the learning center was down so dramatically, why nobody was visiting it anymore. I explained simply that more people are likely to click on a link that exists than one that doesn't exist.


• Including a incorrect link or phone number. Always visit every link and call every phone number you include in any promotion piece. Don't just visually look at the link and type it into a browser. Copy and paste the link to make sure you are using EXACTLY what is included in the promotional piece. This is especially critical if it is going out in print. A wrong phone number is worse than not including one at all. Get someone else to call the number as well to make sure the number is correct and that the complete customer path and experience is in place BEFORE printing or sending out a promotion. I was once ultimately responsible (although the initial error was not my own) for a religious-oriented direct mail piece that included a phone number for a phone hot line that wasn't exactly "religious." We negotiated to have the number redirected to us for the duration of the campaign, but not before a few customers had already called the wrong "service."


• Customer service being left out of the loop. This includes your online FAQ or help links. Customer service needs to know about changes to your product or service that might impact customers. You can embarrass your entire organization by not letting the customer service department know about current bugs, challenges, or anything else that customers may contact them about. You should never find yourself in a meeting addressing customer issues and experience the following scenario: Someone from support explains an issue they are starting to hear about from customers and someone else says, "Ya, we've been working on that. It's a known problem." That statement is evidence that communication was missing and that information is flowing in the wrong direction. Transparency is the right solution.


• Dead end experiences. How many promotions have you run on your web site? What do you do when one promotion ends and another begins? What about price promotions that may be sitting in someone's email inbox for next three months? What experience will they have when they finally get around to opening it and clicking on a link? This point could use three or four examples, but consider the following principles when designing pages or experiences:
  
  1. People can likely get to a page on your site through multiple paths, including directly from a search engine. Unless the page is a targeted landing page, you probably want to include full navigation.
  2. Links can live forever. Never just take down a page or promotion. Either replace it with something more recent or use a friendly redirect to tell your customers (and search engines) where they should now be looking.
  3. Clearly let customers what to do next in any sequence, such as a sign up path. Don't accidentally hide the link you want them to click by turning it into an inconspicuous text link with a beautiful style that doesn't make it look like something they should click.
  4. If someone starts down a path (such as conducting a search) make sure they can get back to start again without using the browser's back button.

At the end of the day, an incomplete experience path can actually do more damage than frustrating your customers and potentially lower your revenue. Incomplete paths are likely to damage your brand in the eyes of your customers, turn customers into enemies, and leave you looking like an idiot. Been there, done that.

Marketer, can you respect yourself in the morning?

I've had an interesting week this week to say the least. Don't worry. I haven't had an affair as the title may suggest. I've just been thinking about self-respect and what compromises in ethics and morality marketers are willing to make for themselves and their clients.

Asked by a couple of friends to help them market their products, I've been introduced to an underbelly of marketing I had never really recognized in the past. I guess I've had the blessing to always market legitimate products to customers whom I respect appreciate. Have I just been blissfully ignorant and naive about other approaches to marketing? Perhaps. But now I'm a bit saddened.

To keep this blog entry short (OK, relatively short), I'm going to go straight to a list of practices that may lead to unsettled nights and waking up with regret and a loss of self-respect as a marketer in the morning. The list also serves a dual-purpose of showing you what to look for when identifying online scams, so you don't fall prey to their deceitful practices.

1. There is no way to contact the company or the only means of communication excludes the possibility of talking to a live person. Real companies respect their customers and want to help them when challenges arise.


2. You search for the product or brand and see it associated with the words "fraud" and "scam" repeatedly. Anyone who has a bad experience with a product or company may be vindictive and go overboard to hurt the company; however, thousands of hits in association with the word "fraud" or "scam" can't be a good sign.


3. You've never heard anyone say anything good about the product or service beyond hype in marketing messages. This is related to my blog entry a couple weeks ago about delivering a "remarkable product." An absence of positive reviews is not necessarily an indictment, but it means you should be careful with your expectations.


4. The product is marketed using questionable practices. If you see ubiquitous ads for a product everywhere but have never heard of the product again shows a bad ratio between marketing presence and satisfaction. the next few points outline some specific marketing practices to look for.


5. You learn about the product through spam. Spam includes unsolicited email, unrelated message board postings, and "friends" who push affiliate links via social networks. Twitter has become notorious for social spam, but I've seen a positive trend with fewer spammers following me lately.


6. The product is marketed heavily on Clickbank. I hate singling out an affiliate network here, but Clickbank is notorious for allowing scams to advertise through its network. It appears that everyone is in on the scam, including publishers, affiliates, and Clickbank itself. Does that make activity in Clickbank an "un-virtuous circle?" Maybe an "immoral circle?" It's definitely not vicious to anyone but the consumer.


7. The product promises are too good to be true. I had to throw this one in here. There are many companies that continue to market the "promise" of their product rather than the reality of what the product may actually do for you. Outlandish claims and hyperbole are sure-fire indicators that an unscrupulous marketer is behind the message.


8. The value exchange is unreasonable. Good products cost money. So does excellent information. But lots of scams are just over the line from overpriced products, including information that is freely available online repackaged as an e-book.


9. Something free requires a credit card or cell phone number for delivery. The cell phone number signup scam is relatively new, an "innovation" related mobile apps and social media ads. Read the fine print on any "free" offer that requires you to provide a credit card number of cell phone number. With mobile phone delivery, you may be allowing them to sign you up for a monthly subscription that is billed to your cell phone number. Slimy!


10. The company treats its customers with disrespect or contempt. While this is a fairly common practice in today's course society (I once heard the former CEO of eBates.com jokingly refer to his customers as "cheap a** bast****" during a presentation), companies that run scams tend to antagonize and intimidate their customers rather than listening and helping them. They are harshest in their enforcement of refund and cancellation policies . . . until you threaten to report the company to the FTC or Better Business Bureau.


11. The company cares more about revenue than satisfying the needs of the customer. I almost left this one out but had to include it on principle. It actually represents a conundrum. There is no ability to satisfy customers if a company can't make money, but a company has no "right" to be in business if it isn't serving the needs of customers. I still maintain that the best path to profitability is identifying a customer and then working passionately to serve the customer's needs. Any company that has a sole focus on revenue or "what customers can do for us" is looking at customers as a means to an end. Serving and hopefully delighting customers is how a company succeeds. A focus that is too heavy on revenue often leads companies to abandon their most valuable advocates while they "step over a dollar to pick up a dime."

A rule of thumb I have often used is answering the following question: "Am I afraid of my customers or do I embrace them?" There are lots of possible variations on this question, such as "How excited am I to tell people about my product and service?" The point is that any marketer who fears his customer is likely in a tough position because either the product or service he is marketing isn't delivering on its promise or it has been marketed in a deceptive manner.

So, when you are marketing a product or service, are you ensuring yourself a peaceful slumber or are you going to wake up in the morning wondering what on earth you were thinking the night before?

Marketing ethics fell through the floor right before the dot com bubble bursting, led by loyalty programs, lead brokers, and referral services. I hate to say it, but as an interactive marketer it's feeling a lot like it did about 10 years ago. Will we wake up and opt for self-respect or keep building a house of cards one compromise at a time?

Great vs. Proper Expectations

Poor Pip! Getting his expectations dashed again and again. Dickens understood the rarity of achieving grand expectations. So many of us in business want to set grand expectations on behalf of our customers that we do so without contemplating what will be necessary to deliver on our brand or product promises.

Establishing great expectations in the minds of customers only to dash them again and again is setting ourselves up for failure. The concept is similar to what Alan Greenspan termed "irrational exuberance." Setting an escalating set of expectations where little or nothing is actually delivered is in fact asking customers or clients to suspend disbelief and act in an irrational manner to continue to buy into a dream with little or no actual evidence.

Someone I admire reminds me often to "under promise and over deliver." I've heard that time and again in my career--as an excuse to pad numbers, to extend product development time lines, or to justify when a product that is really poor is "good enough."

The Bible's parable of the two sons, found in Matthew 21:28-32, does a great job of setting the table for this marketing principle:

But what do you think? A man had two sons, and he came to the first, and said, ‘Son, go work today in my vineyard.’ He answered, ‘I will not,’ but afterward he changed his mind, and went. He came to the second, and said the same thing. He answered, ‘I go, sir,’ but he didn’t go. Which of the two did the will of his father?" They said to him, "The first." Jesus said to them, "Most assuredly I tell you that the tax collectors and the prostitutes are entering into the Kingdom of God before you. For John came to you in the way of righteousness, and you didn’t believe him, but the tax collectors and the prostitutes believed him. When you saw it, you didn’t even repent afterward, that you might believe him.

Brands that make promises they cannot keep disappointing their customers and don't meet the expectations of those who want to believe in them. Nearly every brand or product is able to "talk the talk" of what people want to hear. But brands that get caught up in superlatives and ever-increasing promises are LEAST likely to satisfy the needs of their clients or customers. Why? Because they make too many promises.

Let's face it: most of us can only do two or three things extremely well. Very few are the renaissance men who can fence, write fine poetry, calculate the circumference of the earth, as well as sing and dance professionally. Yet we are more than willing to make those types of claims for some of the products we sell.

The following is a list of 10 recommendations to help anyone avoid the trap of over promising and under delivering:

1. Describe your product as it really is and not as it will be. I just love how people issue press releases with "forward looking statements" in an effort to create noise in the marketplace. If you can't sell what you say you have, you don't have it.
2. Don't pre-announce a product or service. Although you may find an exception or two, such as dispelling rumors or announcing progress on a public program, prematurely announcing a product or service is like crying wolf and creates a "sigh" on the part of those who are awaiting the real news. Also, pre-announcements often decrease the novelty of the actual release of a product or service. A good rule of thumb is to only announce a product or service you can link to or actually sell.
3. Avoid superlatives. Very rare is the product that is actually demonstrably the fastest, best, longest-lasting, or even most recommended. These terms can easily be replaced by lesser terms, such as: great taste, less filling, excellent value, speedy, etc. Superlatives are often counter-productive because they create a question in the mind of the consumer, such as: "Is this really the fastest courier service available?" Superlatives are great to establish a sense of humor or unique niche position, but few brands can afford taking that risk.
   
4. Remember there must be a fly in the ointment. People tend to have a built in "crap-o-meter" to tell them when something is just too good to be true, and they resent being misled. Any properly written unique selling proposition includes a trade-off on the part of the customer, what they are willing to give up when purchasing your product. Don't be afraid of that part of your value proposition. For instance, Little Caesar's Pizza is all about value. "Hot and ready" is a long distance from "gourmet specialty pizza." Little Caesar's doesn't mind that its customers are in on that little secret.
5. Let customers tell your story. This is probably my favorite insight. You are far less likely to make extraordinary claims if you leave the story telling to your customers. They can describe what they were looking for and how you or your product filled their need much better than you can. And they are more believable as well. Customer quotes in press releases are rare but can also be very effective.
   
6. Let partners tell your story. Similar to customers, business partners can also reinforce your position in the value chain. Think of it as a company that makes staplers making a recommendation of another brand for staples based on the experience of their customers. That's a much stronger endorsement than a company that says, "buy our ink and our paper to use in our printer."
7. If you are describing a product prior to release, only describe the core or most basic features. Many product roadmaps shed features as they progress. You don't want customers sold on features that don't make it into the final release.
8. Always hold something back as an element of surprise. As a corollary to #7, the element of surprise can delight customers and keep your competition off balance. Describing a new product or service in too much detail prior to launch leaves little room for your audience to be delighted.
9. Avoid communicating specific dates when possible. Launch ahead of schedule when a date has been set (easier said than done). Public companies have less latitude when "over delivering." The Street rewards companies for doing what they say they will do, not necessarily doing more than promised. Startups and more entrepreneurial ventures can beat expectations every day if they want by simply never committing on a date. Part of the secret of exceeding expectations when it comes to timelines is to never communicate the timeline itself. A product that bursts on the scene from "nowhere" will typically carry more mystique and have much lower hurdles for acceptance than a product that has been anticipated for the last five years.
10. Listen to your customers and focus on what they need most rather than every possible feature. You can exceed your customers' expectations by just showing that you listen to them. Most customers in today's chaotic environment are still shocked to find a company that listens to and addresses their biggest needs. Small demonstrations of understanding and respect for the customer will cover a multitude of inadequacies in other areas.

I hope this list helps you delight your customers by easily exceeding their expectations.

Delivering a Remarkable Product

Something happened when Apple first released the iPod, and it had everything to do with the product and everything to do with marketing. Apple released a "remarkable" product. By remarkable, we're talking about the very definition of the word--something people want to talk about.

Very few are the truly remarkable products today, products that create such a passionate following that anyone who owns or uses the product feels compelled to share it with others. The iPod was not without faults and detractors. With its relatively soft screen and temperamental body, the product was not exactly durable and solid. But it delivered an excellent user experience from the moment someone opened the box.

Soon the product was everywhere: the prize of nearly every sweepstakes or giveaway, on television, in the news, and in the ears of hipsters and techie geeks on the college campus. The clean and elegant white body and matching white ear buds were synonymous with modernity itself.

A few years passed, and Apple did it again with products called the iPod Touch and the iPhone. Some people ran out and bought the iPod Touch as soon as it was released, but more waited for the impending launch of the iPhone. I can name the first five people who brought their iPhones to work because they also brought with them a conversation piece, an audience, and a major distraction. They were anxious to share their new "everything gadgets" with everyone around them. Within a few days, the gesture of pinching and spreading thumbs and index fingers was synonymous with viewing images on Apple mobile devices. It was elegant, intuitive, and simple.

Why do I bring up these examples here? I'm not an Apple lover. I have never even owned any of the products I just mentioned. But I do recognize excellent marketing. And excellent marketing always starts with an excellent product. Today, however, an excellent product is not enough. Products that really succeed need to be remarkable.

Think about it this way. Word of mouth advertising with a remarkable product is a multiplier. Your customers do all of the heaving lifting for you and multiply the impact of your marketing dollars.

Another way I like to describe it is that every dollar spent on delivering a good product (R&D, design, packaging, etc.) is a dollar spent on marketing. Surely, developing an excellent product begins and ends with marketing (from research to go-to-market strategies); however, most companies skimp somewhere in the middle, when the product is actually being developed.

But don't people talk about other products? Certainly. But they are either comparing them with superior products or explaining why they regret a purchase decision. For example, "well, my SanDisk player works for me, but it sure isn't an iPod." Or, "I'll never buy a Zune again. My next mp3 player will be an iPod."

Surely, the quickest way to go out of business is to launch a terrible product and then tell everyone about it. You will likely achieve one generation of customers, but you won't get any others. Why? Because by the time you're ready to reach the second generation of customers, they are wise to your business. Consumers are smart. They talk to people. They conduct research before making decisions.

Some will buy on impulse, but they will feel deceived when they run into issues and then read the feedback from other former customers. That can be worse than never having made the sale in the first place.

Sometimes you will hear people talk about getting a product to market that is "good enough." There is another concept in the marketplace that is often misunderstood when people talk about products that are "good enough." These products aren't junk. What is meant by "good enough" is that they have only the functionality that consumers actually want. They are simple and cheap to produce and deliver on their key value proposition extremely well.

Again, the concept of a product that is "good enough" is not that it barely passes some low quality threshold but rather that is has enough functionality to be a hit with consumers, and can compete with and replace other more expensive and sophisticated solutions based on a simple value proposition. The case study of the Flip camera designed by Pure Digital Technologies is a brilliant example.

You can read the article from Wired Magazine by Robert Capps called The Good Enough Revolution: When Cheap and Simple Is Just Fine. Mr. Capps was not the first to recognize this trend or even this market example, but his article is a great read.

The example of the Flip camera is what Clayton Christensen calls a disruptive innovation. Instead of carrying on in an arms race of features and functions (speeds and feeds), Flip came into a mature market and started over with a product that was simple and elegant. In essence, they hit the reset button and in the process captured 17% market share nearly overnight.

The key wasn't just producing a "cheap and simple" product. The secret again was in producing a remarkable product that people wanted to share with others. And it worked.

The next time you are asked or tempted to market a product that doesn't add unique value to the current set of solutions in the market or is clearly inferior to existing options, just ask yourself, "how fast do I want to fail?" You will do a lot of heavy lifting to acquire each new customer, since you will have to reach each one yourself. And at the end of the day, you may just end up right where you started--looking to develop a product people may actually want to buy.

The companies that win never ask, "Who (or how many) can we get to buy our product?" That question is asked by someone with a product that is looking for a market.

Successful companies know better than to launch a product they only hope will succeed. Those that win ask, "How will our product be talked about by our core customers?" Subtle difference? I don't think so.

Brandishing Credentials and Unique Competency

Degrees, certifications, licenses, and credentials are required for several professions because they demonstrate a certain level of knowledge, competency, or experience. Sometimes a credential is required to protect potential customers from incompetence and fraud. Sometimes a credential simply establishes a threshold of expected performance.

When it comes to business, organizations and individuals earn credentials over time, but most of these credentials are never framed and hung on a wall. And what's more, the company or individual with this credential isn't really in control of which credential they earn. Sometimes a company will seek and attain a certain strategic advantage or unique competency because of brilliant strategy and careful planning; however, a more likely scenario is that a unique competency will emerge over time that qualifies the company to provide a service or product that other organizations aren't capable of providing. When that happens you have achieved a market credential. Congratulations!

Brand Credentials Are Granted Not Earned

That works for companies, but what about brands? What credentials does a brand have? The answer isn't typically found in what a company or brand line pursues but rather in what consumers accept and embrace coming from the brand. In the case of a brand, a credential is both a unique qualification and also a limitation. Earning a credential as a great athletic shoe brand, for example, may not qualify you to start manufacturing footballs under that brand.

An example would be consumers embracing Nike as an athletic clothing brand (beyond shoes) but rejecting Converse or another shoe brand in its efforts to expand its brand beyond footwear. Surely both companies can create good product designs and engage labor to manufacture inexpensive products. But that is where the parallel ends. The real question isn't so much what the company can produce but what customers expect them to produce and whether those customers will allow a brand to succeed with any given product or service.

Great Products and Services Establish Credentials

Again, the brand credential isn't so much a competency a company can earn but more a unique mind space that is granted to the brand by the market. Historically it has been the job of marketing and advertising to convince the consumers and clients that a brand had "street cred," but recently that job has shifted increasingly to product managers and designers. With the proliferation of information and increased accessibility to that information, products themselves carry more of the marketing responsibility than ever before.

This is the ultimate example of "actions speak louder than words." You can say all you want about a service or product, but gone are the days where clever marketing can overcome the weaknesses a poor product or user experience.

One of the most important questions to ask yourself when bringing a new product or service to market is: "Do we have the credentials to bring this thing to market?"

Thinking about it just for a moment provides a simple explanation for some of the biggest product failures in history: Levi's moving into men's suits, Polaroid expanding into digital photography, Pond's toothpaste, Frito-Lay Lemonade, among others.

The Dangers of Playing the Field

Many companies--especially those that are young, hungry, and entrepreneurial--try to be amenable and amoeba-like, changing shape (or stripes) with each new opportunity they encounter. While keeping options open can be a laudable objective, it is a hurdle when it comes to establish brand credentials.

Finding Your Brand Credentials

Here are a few questions to ask when trying to uncover your unique brand competencies or credentials:

• Who are your current customers or clients? (size, industry, geography, etc.)
• What do your customers hire you to do?
• What substitute products did your customers consider? (Learning about your cusotmers' consideration set is one of the best ways to discover your brand credentials.)
• Why have you lost sales to your competition?
• Do any of your current activities worry your existing clients or customers?
  

Answering these questions will help you start understanding your current brand credentials and also the areas where you can expand your "street cred" to other areas.

Blue Ocean Strategy

The concept of "blue ocean strategy" or moving to the open sea that is unbloodied from intense competition is one of the most misunderstood concepts I have been confronted with in the last few years. The concept isn't to disavow your current customers and find a new Shangri-La where the waters are peaceful. The concept is to build off of your strength and find adjacent or analogous markets where your product may be preferred in the consideration set. This requires your credentials with one market to extend to to an adjoining market (not too big of a stretch for most brands).

The biggest risk in pursuing any branding or marketing strategy is offending current customers. They think they know you. They also think you are providing products or services for them. Stray too far and they may feel betrayed or at least concerned that your efforts aren't going to provide them with any additional benefit.

Remembering Your "Love Group" -- A Bird in the Hand

Here are a couple of worn out idioms that are marketing truisms. The first is a temptation to be fought, and the second is a saying to be embraced:

"The grass is always greener on the other side."
"A bird in the hand is worth two in the bush."

Another way of saying this is to never turn your back on those who love you. You have a group of people who love you. They like the benefits you provide and are willing ot put up with your quirks and shortcomings to receive those benefits. One of the biggest temptations marketers (typically driven by CEOs or CFOs looking at the numbers) will have is to enter a more lucrative market.

Just by the sound of it, it makes sense. Why settle for peanuts when you could own the plantation? But guess what? Nine times out of ten moving into a new market is a risky gamble that doesn't pay off. Why? Because someone else is already servicing those customers or clients and you don't have the credentials to compete. If you did, those potential customers would have already come knocking on your door.

Typically your best course of action is to get closer to your existing customers and then find more people just like them.

Your Personal Brand

I'll expand on this concept in the future, but you should also consider your personal brand. What do YOU have the credentials to do and provide to an organization, client, or partner? How are you going to compete?

In reality, there aren't too many options. You have to work on your credentials every day. Here are the three unique ways I have found to compete in my personal career:

• Knowledge (demonstrating decision making and strategic skills and benefiting from the asymmetric nature of information)
  
• Talent (delivering higher quality, craftsmanship, or competency)
• Speed (executing faster)

Beyond these, I can't think of too many actual advantages from a value perspective. Talent would include most "soft skills" or "people skills." If you find yourself mediocre in all three areas, you had better make the effort of earning some credentials.

Brandishing your personal credentials or those of your brand at every opportunity is the best way to let others know who you are and the benefits you deliver.

What works for a company or brand will also work for you as an individual.

Hello World

I'm not a developer, but I understand that for many the first program they ever wrote was a program to get the words "hello world" to display on a monitor screen. In my mind I see these words in the upper-left corner of the screen in monochromatic green on black telling the developer they have succeeded in creating something.

We all have a need to create--to synthesize the world around us and come up with something new. Whether it is a jarring new explosion in creativity or the results of more subtle exercises, such as "piggybacking" or "piling on" or "standing on the shoulders of others," we all have a desire to make our own mark on the world.

Although I've been marketing online for more than 13 years now, this is my first attempt to create what I have previously believed to be somewhat narcissistic or self-aggrandizing: a personal reflection on what I have learned during my online marketing career. Instead of increasing my personal profile I have spent all of my time dedicated to building the profiles of some pretty innovative brands, including Ancestry.com, Move Networks, and FamilyLink.com.

Paul B. Allen, a co-founder of Ancestry.com and the founder and CEO of FamilyLink.com once shared the concept with me of "value creators" vs. "value managers." My role has always been that of building value for companies that are nascent in creating their brand identities. I've learned that the best seemingly organic paths for value creation tend to be well-planned and executed and that most examples of serendipity or "dumb luck" actually obey the principles of common sense. Like my seventh grade physics teacher, Mr. Browning taught me, "you can't cheat work." There are very few shortcuts to good marketing and long-term success, but some have managed to discover the principles that lead to success unintentionally or even by mistake.

If you want to learn from my past experiences and current challenges, I invite you to follow along. If you want to participate in a dialog of ideas, I encourage you to extend yourself. If you desire to gain an understanding of the principles and concepts that make marketing work (especially online marketing), I encourage you to weigh my contributions carefully. You might decide I have something worth reading.

The following are a few of the concepts I will be exploring and expounding upon here in my little corner of the Internet:

• Marketing strategies that are really strategic
• Interactive marketing that actually creates interactions
• Using common sense to understand likely customer scenarios and responses
• Projection, patterning, and invitation as methods to reach customers on a psychological level
• The balance of art and science that is marketing
• Creating layered campaigns that amplify across customer segments and channels
• Managing marketing initiatives, such as PPC, SEO, affiliate programs, partner programs, and email
• Designing effective ads for different online channels
• How to get a blank check for your marketing budget
• Playing the averages to achieve both low cost and high volume
• Focusing on creating a remarkable product to stretch your marketing dollar
• And much, much more . . .

That's probably enough for a first blog post. I'll be adding a lot more this week, including some tutorial content on PPC and Affiliate Marketing. You can also look forward to some lists of best common sense marketing practices and the biggest mistakes you will want to avoid.

Hello World