Why Sopa is a Bad Idea

One of the best videos of the year.... 

http://www.ted.com/talks/defend_our_freedom_to_share_or_why_sopa_is_a_bad_idea.html

The legislation currently before Congress is in danger of disrupting your use of the internet.  It pushes the enforcement of file sharing onto the legitimate users of the web.  Punish the 99% to get at the 1% that is not following the rules.

Richard Buckminster Fuller was born at Milton, Massachusetts on this day in 1895

We are called to be architects of the future, not its victims.

Sometimes I think we're alone. Sometimes I think we're not. In either case, the thought is staggering.

Every time man makes a new experiment he always learns more. He cannot learn less.

Human beings were given a left foot and a right foot to make a mistake first to the left, then to the right, left again and repeat.

In order to change an existing paradigm you do not struggle to try and change the problematic model. You create a new model and make the old one obsolete.

It is essential to release humanity from the false fixations of yesterday, which seem now to bind it to a rationale of action leading only to extinction.

Dare to be naive.
All from R. Buckminster Fuller, 1895 – 1983

Google+: What Does It Mean for Marketers?

Another great article on Social Media... Written by Anna Maria Virzi, it raises some interesting questions. Google does not have a great track record whn it comes to social media. Google Wave bombed. Google Buzz ran into a "buzzsaw" with its privacy issues. Will Google + change the way we look at social media?

Google+: What Does It Mean for Marketers?

Will Google ever get social media right?

That question has marketers buzzing since the search giant last week rolled out Google+, its latest venture into social media and a potential Facebook competitor.

Marketers are divided over Google's chances for social success. Some contend that social media is not in the DNA of its tech saavy, performance-driven organization, while others counter that Google has enough money and talent to succeed in social – if not this time, maybe another time.

One thing's clear: Google has finally got people talking, rather than yawning, about its social strategy. Ford's Scott Monty helped to fuel that discussion when his team created two accounts on Google+ – Ford Motor Company and Ford Europe – to test the platform. Ford's plans included offering video and group chats with some of its followers on Google+.

However, brand marketers will have to wait out on the sidelines in the coming months. ClickZ Managing Editor Zachary Rodgers learned yesterday that Google told brands to hold off from using the service until it releases business profiles later this year.

"Interestingly, Google has chosen to use their old-fashioned limited test rollout to friends and insiders rather than a social media invite everyone-at-once approach," said Heidi Cohen, president, Riverside Marketing Strategies and ClickZ Experts contributor, in an email interview with me. Indeed, that strategy worked when Google introduced Gmail in 2004.

What exactly is Google+? It's an assortment of features with titles such as +Circles, +Sparks, +Hangouts, and +Mobile.

Consider +Circles: it is designed to give an individual more flexibility than Facebook to identify who they want to associate with in a particular group. Problem is, as Search Engine Watch Director Jonathan Allen points out, it can be tough to categorize relationships. "Personally speaking, it has already been a challenge to decide whether I differentiate professional friends from personal friends, or work on the basis that they are all ultimately friends," he wrote last week.

Google doesn't have recent history on its side either. Google Wave, promoted as a tool for use in "conversation and collaboration," was more like a ripple. And Google Buzz came under criticism for violating the privacy of Gmail users; it initially created a network of Buzz friends from a person's Gmail account. And once someone activated Buzz, those names were made public. (Google allocated $8.5 million to fund privacy education as part of a settlement to a class-action lawsuit brought by some Gmail users.)

Google+: The Promise for Marketers

The marriage of search and social holds great promise for many reasons. And Google's in a position to make that happen, says Bryan Eisenberg, managing partner at Eisenberg Holdings and ClickZ Experts contributor.

Consider this example: let's say Eisenberg wants to take his 6-year-old child to the movie, "Cars 2," and searches for movie reviews on Google. And if that search shows reviews from his preferred social circles, those reviews would be more relevant than one written by someone with different likes and interests. In addition, he said, people typically see only a small percentage of their friends' tweets and status updates on Twitter and Facebook.

Google also has had a relationship with Bazaarvoice to integrate customer reviews into search results, according to Eisenberg. So Google+ should be able to build upon those connections.

What about potential barriers to consumer adoption? Eisenberg doesn't believe that's an issue either. "Every single [Android] phone that's activated – there's one-half million a month now – comes with a Gmail address that's automatically set up by Google Buzz," he said.

Eisenberg says Google will triumph over Facebook because Google's efforts are built around an open network compared to Facebook, which is a closed network.

And if Google doesn't get it right this time, it has the resources to refine its approach. As of March 31, Google had $36.7 billion in cash on hand, according to its earnings report.

Google+: Out of Its Comfort Zone?

Not everyone is convinced that Google can and should compete with Facebook.

"In order to have a social network, you need a network - not just the technology to power it. Google has long had the largest user base online, but never the largest subscriber base, which means they have very little knowledge of who (or where) their end users are. And Google end users are very uptight about privacy, so trust is an issue for them," observed Mike Grehan, VP and global content director at Search Engine Watch, ClickZ, and the SES conference series.

Because Google has been an innovator in search, he finds it odd that it's giving so much attention to a non-core area of business. "Developing what is virtually a Facebook clone is certainly a departure, if not a lack of direction - certainly a lack of innovation. I doubt that Facebook has plans to launch a web crawler any time soon," he said.

Instead, Google may be in a better position to compete with LinkedIn and its business users. "With [Google's] presence in the online apps space/SaaS and the cloud (Google Docs, etc.) it may have been a better idea to develop a community around that," he said.

"Given that companies such as Facebook and Twitter have yet to show signs of substantial revenue generation, whereas Google is loaded, it does beg the question why they're doing this – just to keep up with Mark Zuckerberg? Just because they can?" Grehan asked.

What Does Google+ Mean for Marketers?

Google is discouraging businesses from setting up Google+ accounts right now, so there's not a lot that brand marketers can do today. However, marketers (you are human, after all) can try to get an account to better learn how the service works.

Riverside Marketing's Cohen said that while it's too early to forecast how Google+ will evolve, she identified three important marketing considerations to keep in mind. She advises:

1. Test it out. While it's too early to say how well it will perform when released to the public at large, every marketer should be clamoring to get onto Google+ to test what it does and doesn't do.
2. Review how Google+ works with other Google tools. Google+ builds upon the functions offered by other Google social and non-social applications and platforms. Of particular note is its integration with Google's Android operating system.
3. Watch for changes in Google's search algorithms. Since Google is the dominant player in the search space and social media has increasingly had an impact on search, Google+ will cause changes in search, especially real-time results.

Google Offers Versus Groupon: The Portland Throwdown

Below is great article on Google's new Google Offers service. Written by Rocky Agrawal, here is a link to the original article.

Google Offers Versus Groupon: The Portland Throwdown

Google Offers just finished its first month. Google has been testing its Groupon compete in Portland and I’ve been closely tracking the results.

Doing a head-to-head comparison like this is a bit difficult because the two companies run deals differently. Groupon runs multiple deals each day. Many Groupon deals span multiple days, with some running for three days. Google Offers on weekends ran for two days. For each run, I picked a representative deal from Groupon and compared it with the deal from Google.

I looked at 24 deals from each company. For these deals, the median deal value for Google was $1,987 compared with $8,900 for Groupon. In its first month, Google grossed $129,000 compared with $331,000 for Groupon. Five of the Google Offers grossed less than $1,000; all of the Groupon offers exceeded this. This is to be expected given Groupon’s longstanding presence in the market; Google hasn’t had the time to build a large subscriber base. Actual Groupon revenue (across all deals) would be significantly higher.

“Our Portland trial is going very well for us,” said Eric Rosenblum, director for Google Offers. “Our intention was to start learning how to source great deals, provide excellent merchant and customer service (including phone and email support), and deliver value to our customers, and we are certainly doing that. In terms of our commercial results, the majority of our deals in month one either outperformed or were in-line with our expectations while around a quarter underperformed. Our total units are above where we had projected, but we still need to get better about predicting performance.”

One significant difference was the median sale price. Google’s median sale price was $10; Groupon’s was 4 times that at $40. This was the result of Groupon having a higher percentage of services and activities such as rock climbing and screenprinting classes.

Cash sells best

An area of concern for deal companies is that the deals that generate the most revenue are the ones that are least sustainable for businesses.

The most popular deal in the month for Google Offers was an offer for $20 worth of merchandise at Powell’s Books for $10. 5,000 Powell’s vouchers sold out in a matter of hours. Powell’s is a Portland institution and the deal was the equivalent of selling cash for half off; there’s no reason not to buy one.

The next day, Google ran an offer for personal training and fitness classes. That deal sold 9 units. The worst performing deal over the course of the month was an acupuncture deal that sold 5 units over 2 days. Google grossed $300 on that deal.

Although Google would not comment on specific deals, I expect that the Powell’s deal was heavily subsidized by Google in order to build its mailing list. Rosenblum did say deal subsidies are something they would consider for appropriate merchants. I can’t think of a more appropriate merchant.

The worst performing Groupon that I tracked grossed $1,440 and the best performing deal grossed $44,000. Excluding the Powell’s deal, which grossed $50,000, the best Google Offer grossed a bit more than $23,000.

The closer a deal is to a cash equivalent for an everyday need, the more it will sell. 3 of the top 5 grossing Google deals were for restaurants; another was for 62% off GoKart racing. (That was the one deal that outperformed my expectations.)

Deals like dentists, guitar lessons and medical services (one Groupon offer for a breast exam sold 12 units) are more sustainable for businesses but are low frequency activities. Groupon has a large enough mailing list that it can still generate significant revenue off deals that are sustainable for businesses. But it also means that they will have to keep growing their list rapidly as people tire of such deals.

Offer restrictions

Google Offers generally had more restrictions than offers on Groupon. While this may sound like a bad thing, I believe it’s better for the ecosystem long term. An offer for Le Bistro Montage restricted the deal to weekend brunch. This is a new product offering for the restaurant, so it serves to expand awareness versus potentially displacing existing business. An offer for a Mediterranean cafe wasn’t valid for lunch.

A deal for a barber shop was “valid only for barbers Brian or Jennifer.”

In at least one case, I thought the restrictions went overboard. Here are some of the restrictions for a deal at an Italian restaurant:

Reservations required and subject to availability. 24-hour cancellation policy applies or you’ll forfeit your voucher. Not valid during holidays, on happy hour prices or at the Jade Lounge. Must mention Google Offers when making reservations.

Although the intent is to smooth demand, these are unusual restrictions and I worry they could create a bad customer-service dynamic as consumers who purchase the deals and don’t read the fine print try to redeem them.

The final deal of the month didn’t get a lot of traction because of its low value. It offered $6 worth of Vietnamese food for $3. The description noted that a small bowl of pho is $6.50, large is $7.50. For a deal seeker, that’s an unattractive deal because they would have to pay additional cash out of pocket. For many consumers, prepurchasing a voucher to save $3 hardly seems worth it.

Sales process

A common complaint about Groupon from merchants is that they weren’t made aware that they could cap a deal or that a cap was ignored. We published an email from a former Groupon employee who stated that some salespeople low-balled volume estimates to get merchants to run deals uncapped.

The feedback I’ve received from merchants about Google Offers in Portland indicates that Google sales tries to ensure that the deal structure is suitable to the business’s needs. (But then again, this was the launch of the service, so you’d expect Google to be extra vigilant). One merchant mentioned that Google asked if she wanted to restrict the deal to new customers only. (She opted not to.) Another merchant told me that while she wouldn’t consider running a Groupon, she was considering a run with Google Offers. She liked having the flexibility to restrict the offer to just breakfast, a time when most people aren’t aware that they’re open.

One complaint about Google Offers that was reported by Business Insider is that Google sales reps have implied that running an offer would make them #1 in Google search results. Google spokeswoman Jeannie Hornung said, “We have a training process in place for sales people that has made and continues to make it very clear that Offers has nothing to do with search. As we said before there was clearly a misunderstanding.”

I believe that Google won’t let Offers influence search results. I’m equally certain that when you build a large sales organization, some people will try to close deals by implying things that aren’t true. Google’s reputation in search is too important to damage. Any perception of such tying would also raise antitrust concerns. Google would be well served to make it very clear in its merchant help center and its merchant agreement that search results are not helped by running an offer. If it were my product, I would have merchants specifically acknowledge that they understand that Offers doesn’t generate an SEO benefit.

Conclusion

It’s still the early days of the daily deal business and Google has put out a very credible beta in Portland. Thirty days in, I stand by my claim that there’s not much that is original here.

I believe that they’re striking a better balance between merchant and consumer value than Groupon. The additional restrictions mean that merchants aren’t just selling cash at a substantial discount. Another key differentiator for merchants is more generous payment terms. Google pays out 80% of the merchant’s share in about 4 days and the remainder (subject to chargebacks) in about 90 days. Groupon pays out 1/3 in 5 days, 1/3 in 30 days and 1/3 in 90 days.

Hungry or Bored?

"Groupon just introduced a smartphone application for Chicago users called Groupon Now, which offers deals near where the person happens to be. The application has two buttons, one if you’re hungry, the other if you’re bored. Any publication, Web site or marketer that can control where people go when they ask themselves these questions on a dull Saturday night has a shot at dominance. "

I saw this in an interesting article from David Streitfeld in the NY Times.

I have often wondered whether or not Groupon is a long term player or a simple fad. The competition for the "half price" model is fierce and it seems like every week another company launches their version. Low start up costs make this play an easy business feild to enter.

But the idea of Groupon Now shows that Groupon is not resting on past success. In much the same way they innovated the original concept of "paid couponing", they continue to redefine the marketplace.

"It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change."

-- Charles Darwin

White Hat / Black Hat - Which SEO Program is Right for You?

The Dirty Little Secrets of Search

I am amazed that I still come across ads for SEO that programs that promise "the number one position on organic search results within 3 days!". If this were possible, wouldn't everyone be in the number one position?

A great article recently in the NY Times highlights some of the differences between White Hat (good) and Black Hat (bad) marketing.

All search engines use a proprietary formula to rank web sites. Black Hat marketing refers to the process of using shortcuts to circumvent and manipulate the ranking system used by search engines.

This is important to search engines. Contrary to popular opinion, search engines do not care where "our site" ranks in their results. Their primary purpose is to deliver the most accurate results to their visitor. If I am searching for "used cars", the search engine takes a multitude of factors into consideration prior to displaying the results that they compute are the most salient to the search I conducted. They maintain traffic to their site by producing the best results for their users.

And no one knows the "magic formula" for rankings, but we do know that factors like pertinent content married to keywords is one important factor. And much like high school, the more popular you are (traffic), the more traffic the search engines want to send you. Another key factor that increases your rankings is links to and from other web sites. In the NY Times piece, they noticed that a large national retailer, J.C. Penney consistently placed at the top of rankings in a extraordinary number of product categories.

The New York Times asked an expert in online search, Doug Pierce of Blue Fountain Media in New York, to study this question, as well as Penney’s astoundingly strong search-term performance in recent months. What he found suggests that the digital age’s most mundane act, the Google search, often represents layer upon layer of intrigue. And the intrigue starts in the sprawling, subterranean world of “black hat” optimization, the dark art of raising the profile of a Web site with methods that Google considers tantamount to cheating.

Despite the cowboy outlaw connotations, black-hat services are not illegal, but trafficking in them risks the wrath of Google. The company draws a pretty thick line between techniques it considers deceptive and “white hat” approaches, which are offered by hundreds of consulting firms and are legitimate ways to increase a site’s visibility. Penney’s results were derived from methods on the wrong side of that line, says Mr. Pierce. He described the optimization as the most ambitious attempt to game Google’s search results that he has ever seen.

The study went on to find that each of the pages on J.C. Penney were linked to an incredible number of web sites. Further investigation suggested that many of the links were to web sites that had nothing to do with the product being searched and in some cases the links were coming from web sites that appear to have been abandoned.

"Some of these sites seem all but abandoned, except for the links. The greeting at myflhomebuyer.com sounds like the saddest fortune cookie ever: “Sorry, but you are looking for something that isn’t here.”

The result? Google stepped in and enforced its rules and gave JCP a 90 day "timeout". The items being indexed by search results plummeted from first, second or third place to page three (70th place or worse). And since 95% of all searches end on page one of the results, it is hypothesized that sales dropped accordingly.

In other words, one moment Penney was the most visible online destination for living room furniture in the country.

The next it was essentially buried.

PENNEY reacted to this instant reversal of fortune by, among other things, firing its search engine consulting firm, SearchDex. Executives there did not return e-mail or phone calls.

In short, circumventing the rules imposed by search engines can mean the death of your web site if it relies on SEO results. For more information on how JCP weathered this storm, read 90 Days Later, J.C. Penney Regains Its Google Rankings.

BlackboardEats... A Twist on Groupon?

BlackboardEats. Another Groupon clone?

I don't think so. It is more like an online Val Pak clone disguising itself as a social network. Unlike Groupon et al, you don't pay $10 to $20 for a $20 to $40 gift certificate. Instead you pay $0 to get a passcode (we used to call them coupons) for a restaurant deal.

Today it is for Aburiya Toranoko - : three-course prix fixe and a bottle of sake for $35.

Aburiya Toranoko

243 S. San Pedro St. (between E. 3rd St. and E. 2nd. St.), Los Angeles (Downtown), CA 90012; 213-621-9500 www.toranokola.com $$$

MEMBER: Jeffrey Davis

three-course prix fixe and a bottle of sake for $35*

*available daily during dinner; not every person in the party must purchase the prix fixe; max party: 6; dine-in only; not valid with any other discounts or promotions; please note: a passcode grants you access to this exclusive menu; meal must be paid for at the restaurant; see menu below review

PASSCODE: 2835jeffrey

PROMOTIONAL DEAL EXPIRES AT CLOSE OF BUSINESS ON: June 17, 2011

Tips must be based on the pre-discount total.

Passcodes are good for one use, and only one can be applied per party.

You will also receive an email confirmation including this information.

Visit MyBlackboard to view your Passcode.

I like the fact that that it specifies "Tips must be based on the pre-discount total."

Currently offering deals in LA, NY,San Fran with Chicago coming soon.

I found BlackboardEats in an article by Tricia Duryee.

"... but unlike like the Groupon and LivingSocial sites, which are founded on being a platform for local businesses to advertise, BlackboardEats is based on editorial reviews.

Its staff of writers–who come from publications such as Food & Wine, Bon Appétit, Gourmet and DailyCandy–review establishments anonymously and don’t accept complimentary meals. In return for running the review, the site asks that the restaurants offer a discount to its readers.

“We aren’t a deal site,” she said. “We are more of an insider’s club for culinary enthusiasts. All of our content is handpicked by food editors…We send in reviewers anonymously and they [restaurants] don’t have approval rights. We don’t touch the revenue to ensure quality.”

Instead it makes money from advertising, which in addition to display units, also includes very clearly marked sponsored offers that are more similar to a Groupon offer."

Time will tell if the concept catches on. Good luck.