It has become a popular game, even among investors who should know better, to dismiss Twitter based on lack of a business model. But there is a difference between not generating income and lack of a business model. I believe that, in just a few short months, Twitter will show the world that not only do they have a business model, but that theirs is the most sophisticated around. As the founders have admitted, they did not necessarily plan out their success. But the result of their outside funding and considerable valuation is that they have been free to watch and learn what might be possible.
Most publishers talk about the two common monetization streams — advertising and subscribers — as though there are no other options. As many have seen over the last year, dependence upon advertising is a slippery slope in a downturn. Even the incredibly successful Rupert Murdoch is struggling with the model and believes that subscription is the answer.
Last week, Microsoft's Bing and Google announced "search deals" with Twitter, with Bing also making a deal with Facebook, allowing the search engines to show results related to "what is going on right now". They tried to build this and still may, but paying Twitter and Facebook is logical for now as they are rapidly becoming major referral engines to many sites.
In fact, these are traffic deals. Until now Google has been the only company on the planet to make major money by driving traffic to other sites. These deals are Twitter's first steps toward doing the same.
Twitter has a number of experiments in progress that are likely to turn into revenue streams:
Search
Twitter acquired search.twitter.com in the summer of 2008. Of the many applications built on top of the Twitter API, this had shown to be incredibly popular. In fact, it had the potential to overpower Twitter's servers to such a degree that for the first year, they did not put up a search box but hid the feature at the bottom of the results page along with "about us, contact", etc. This search is very powerful, as proven during the recent Iran upheaval when Twitter was one of the only ways to get word out. While Twitter has said that they will not run ads, their users would not object to the monetization of search through an adwords-type solution.
Ecommerce
First Dell and then many other companies have sold millions of dollars worth of equipment through Twitter. If Dell only has, say, 45 of a product left, it does not pay to put up an eBay page. They post it on @DellOutlet, or another of their accounts, and the product sells immediately. I'm sure that if Twitter is not asking now, they will in the future charge a small commission for such direct sales. Who could object?
BTB consumer help
This summer, Twitter and Best Buy started an experiment with @TwelpForce. They have over 13,000 followers and you can ask anything and a Best Buy employee will answer. They've even promoted this through TV. This is the future of customer/vendor communications.
Twitter 101
Twitter 101, another program that launched last summer, is a comprehensive tutorial for companies to do business via the help of Twitter. The more businesses use Twitter, the more ways the company will find to monetize their traffic.
Verified accounts
Twitter is in beta test with verified accounts, enterprise subscriptions that confirm that customers are really doing business with the company they are looking for rather than an imposter or squatter. Twitter will charge businesses a small subscription fee for this service.
Applications
Twitter co-founder Evan Williams has said that Twitter will not have ads. What I think he means by this is that there will not be a banner ad across the top of Twitter's website. However, he has said that applications will be featured on Twitter, and an adwords-type feature currently shows one application at a time on the results page. Applications are the graphical ad unit of the future and if done correctly, will be accepted by the Twitterati.
Thousands of applications have monetization potential. According to GigaOm after "TwitterGate," when somebody hacked Twitter servers, Twitter has considered buying a number of these. And why not? They can get others to do the development and just as they did with search.twitter.com, use the high Twitter valuation to cash in on applications that have proved to be profitable and leverage them against the large Twitter user base.
Network marketing
The larger Twitter grows, the more the connectivity between users benefits all. But there is gold beyond the conversations that are going on. The pure connectivity in itself is valuable. While Twitter may not run advertising, many companies would love to license the right to target people using what is called "birds of a feather" targeting: identifying a group of people with a common interest and then expanding that target by finding others with similar interests. A number of companies are doing this right now, while honoring privacy; they don't have to know who the people are.
As I mentioned at the start of this blog post, most publishers have one or two ways to monetize their efforts. I have outlined at least eight which Twitter will probably use, and there certainly will be many more. That's why I think we all have a lot to learn from this company that "has no business model".
David L. Smith is the CEO of Mediasmith.
Wednesday, October 28, 2009
Tuesday, October 27, 2009
Facebook Driving Sales for Small Businesses
Reporting from San Francisco - Charles Nelson, president of Sprinkles Cupcakes, the Beverly Hills baker to the stars, doesn't have a Facebook profile. Nelson, who works seven days a week, has no time for chatting online with Facebook friends.
But Nelson is logged on to Facebook all the time. That's because more than 70,000 people have declared themselves fans of Sprinkles’ Facebook page, which has its own "vanity URL" at www.facebook.com /sprinkles.
Each day on the website, Sprinkles announces a secret word, such as "ganache," or "bunny," or "tropical," or "love," and the first 25 or 50 people to show up at any of its five stores and whisper that word get a free cupcake.
"On Facebook, we can ask our customers what's the next location they want," Nelson said. "What do they think of our next flavor? It's an amazing way to communicate with our fans."
Facebook is not just for friends anymore. The free social networking site -- blocked in many workplaces as a potential time-waster -- is increasingly becoming an inexpensive marketing tool for small businesses.
Sprinkles is among a growing number of mom-and-pop businesses taking advantage of a relatively new program on Facebook, one that allows them to claim their name, become visible even to folks who aren't on the site, and stay in close contact with their customers. The business, in effect, can act like any other person on Facebook, posting status updates and seeing what its fans are doing.
Facebook doesn't break out figures for small businesses but says it has 1.4 million business "pages," with an average of 100 fans per page. Facebook Chief Operating Officer Sheryl Sandberg said in a speech in New York last month that every day, 10 million people become fans of pages. (Many of those pages are for random concepts, such as the beach, or laughter, or even one called "I don't sleep enough because I stay up late for no reason," which has 3.5 million fans.)
Businesses need to go where their customers are, and increasingly these days, that's on Facebook and other social media sites, analysts say. More than 300 million people have signed up for Facebook, and half of them visit the site every day.
"Over the past two years, we've seen this increasing uptick in businesses realizing that their customers are on Facebook," said Tim Kendall, Facebook's director of monetization product marketing. "If they can create a presence in Facebook that allows customers to connect with them, it can be a way to strengthen that connection and also to find new customers."
Plenty of other sites are also wooing small local businesses. The review site Yelp, Citysearch and a host of Yellow Pages sites are all making a push.
And typically, businesses don't stick to one site such as Facebook. Instead, they spread their presence across the social media landscape, including MySpace, Twitter and LinkedIn. Increasingly, these sites connect with one another so that a status update on Facebook becomes a tweet on Twitter, or a blog post could be pushed out to several sites.
"Companies don't have a lot of resources to create their own website," said Jeremiah Owyang, a social media analyst at Altimeter Group. "Using these sites where the customers already are in their communities makes a lot of sense."
Janet Rothstein, who runs a jewelry shop in Beverly Hills, used a company called MerchantCircle as her gateway to the online world, and she has since obtained a Facebook vanity URL for her page, where she has 63 fans. Having an online presence in so many places increases the odds that when someone searches on Google, they will find her.
Facebook is increasingly finding itself a rival of Google. It believes it can offer more relevant search results because the content is coming from people you know and trust, especially in the hotly contested field of local advertising.
"We are naturally really well-positioned to create a lot of value for local businesses," Facebook's Kendall said. "When you think about how you learn in the off-line world about local businesses and services, which cafe, which dentist, you learn a lot of that from the people you trust and are friends with. Facebook is able to streamline that process a bit."
Yet Google remains the king of search, and Facebook says its pages frequently turn up in the Google search results.
That's important, said Avichal Garg, a former Google employee who now owns PrepMe, a Palo Alto company that offers online test preparation.
His Facebook page drives traffic and sales because "it ranks well in search and people use search for companies they haven't done business with before," Garg said in an e-mail, noting how Facebook has brought in about 5% of his new business. "Facebook is a trusted domain so people click on it and when they see the faces behind the company name, they know we're legitimate."
"Having the vanity URL and presence on Facebook and Twitter really help," Garg said.
Social media help companies take control of "the Google resume," said Adrian Lurssen, a vice president at JD Supra, an online legal site based in Marshall, Calif. When people search for your company -- or for what your company sells -- you want your site to turn up in the first 10 results, or the first page Google delivers.
Nelson of Sprinkles agrees. Fans of his cupcakes (actually, his wife, Candace, is the pastry chef) shower Sprinkles with praise -- and word-of-mouth buzz. Their Facebook friends all see when they comment on Sprinkles' page. "You're looking for customers but you're really looking for advocates," Nelson said. "We've never had paid advertising in five years of being open."
Reprinted from http://www.latimes.com/business/la-fi-facebook-smallbiz27-2009oct27,0,7371262.story
But Nelson is logged on to Facebook all the time. That's because more than 70,000 people have declared themselves fans of Sprinkles’ Facebook page, which has its own "vanity URL" at www.facebook.com /sprinkles.
Each day on the website, Sprinkles announces a secret word, such as "ganache," or "bunny," or "tropical," or "love," and the first 25 or 50 people to show up at any of its five stores and whisper that word get a free cupcake.
"On Facebook, we can ask our customers what's the next location they want," Nelson said. "What do they think of our next flavor? It's an amazing way to communicate with our fans."
Facebook is not just for friends anymore. The free social networking site -- blocked in many workplaces as a potential time-waster -- is increasingly becoming an inexpensive marketing tool for small businesses.
Sprinkles is among a growing number of mom-and-pop businesses taking advantage of a relatively new program on Facebook, one that allows them to claim their name, become visible even to folks who aren't on the site, and stay in close contact with their customers. The business, in effect, can act like any other person on Facebook, posting status updates and seeing what its fans are doing.
Facebook doesn't break out figures for small businesses but says it has 1.4 million business "pages," with an average of 100 fans per page. Facebook Chief Operating Officer Sheryl Sandberg said in a speech in New York last month that every day, 10 million people become fans of pages. (Many of those pages are for random concepts, such as the beach, or laughter, or even one called "I don't sleep enough because I stay up late for no reason," which has 3.5 million fans.)
Businesses need to go where their customers are, and increasingly these days, that's on Facebook and other social media sites, analysts say. More than 300 million people have signed up for Facebook, and half of them visit the site every day.
"Over the past two years, we've seen this increasing uptick in businesses realizing that their customers are on Facebook," said Tim Kendall, Facebook's director of monetization product marketing. "If they can create a presence in Facebook that allows customers to connect with them, it can be a way to strengthen that connection and also to find new customers."
Plenty of other sites are also wooing small local businesses. The review site Yelp, Citysearch and a host of Yellow Pages sites are all making a push.
And typically, businesses don't stick to one site such as Facebook. Instead, they spread their presence across the social media landscape, including MySpace, Twitter and LinkedIn. Increasingly, these sites connect with one another so that a status update on Facebook becomes a tweet on Twitter, or a blog post could be pushed out to several sites.
"Companies don't have a lot of resources to create their own website," said Jeremiah Owyang, a social media analyst at Altimeter Group. "Using these sites where the customers already are in their communities makes a lot of sense."
Janet Rothstein, who runs a jewelry shop in Beverly Hills, used a company called MerchantCircle as her gateway to the online world, and she has since obtained a Facebook vanity URL for her page, where she has 63 fans. Having an online presence in so many places increases the odds that when someone searches on Google, they will find her.
Facebook is increasingly finding itself a rival of Google. It believes it can offer more relevant search results because the content is coming from people you know and trust, especially in the hotly contested field of local advertising.
"We are naturally really well-positioned to create a lot of value for local businesses," Facebook's Kendall said. "When you think about how you learn in the off-line world about local businesses and services, which cafe, which dentist, you learn a lot of that from the people you trust and are friends with. Facebook is able to streamline that process a bit."
Yet Google remains the king of search, and Facebook says its pages frequently turn up in the Google search results.
That's important, said Avichal Garg, a former Google employee who now owns PrepMe, a Palo Alto company that offers online test preparation.
His Facebook page drives traffic and sales because "it ranks well in search and people use search for companies they haven't done business with before," Garg said in an e-mail, noting how Facebook has brought in about 5% of his new business. "Facebook is a trusted domain so people click on it and when they see the faces behind the company name, they know we're legitimate."
"Having the vanity URL and presence on Facebook and Twitter really help," Garg said.
Social media help companies take control of "the Google resume," said Adrian Lurssen, a vice president at JD Supra, an online legal site based in Marshall, Calif. When people search for your company -- or for what your company sells -- you want your site to turn up in the first 10 results, or the first page Google delivers.
Nelson of Sprinkles agrees. Fans of his cupcakes (actually, his wife, Candace, is the pastry chef) shower Sprinkles with praise -- and word-of-mouth buzz. Their Facebook friends all see when they comment on Sprinkles' page. "You're looking for customers but you're really looking for advocates," Nelson said. "We've never had paid advertising in five years of being open."
Reprinted from http://www.latimes.com/business/la-fi-facebook-smallbiz27-2009oct27,0,7371262.story
New York Times calls Search Marketing Most Powerful Marketing Ever Invented
"Traditional Web search is a business that practically mints money, and for two reasons. First, without Google, Yahoo, Bing or Ask, the Web would be an inscrutable jumble of bits. These services are so vital that they are used more than 450 million times a day in the United States alone, according to comScore.
Second, and equally important, search advertising is probably the most effective form of marketing ever invented. Because search queries telegraph a user’s intent with precision, they make it possible to match people with the right ads at the right moment. As a result, advertisers are willing to pay handsomely to peddle their wares in front of someone who types “iPhone deals” or “Maui hotels” into Google."
Miguel Helft New York Times October 25th.
Small businesses can increases their sales by using a combination of advertising with organic search strategies. Panorama Press in Woodstock, Georgia has helped many clients increase their leads appointments and sales by aggressively launching specialized websites and promoting these websites through cutting edge marketing techniques.
Research has shown that 70% of internet searchers will only look at the internet search results that are organic( Non-advertisements). Obviously you may be missing a large potential pool of prospects if your company is not showing up regularly in internet searches fro your category. The good news is you can make changes and see results in a few weeks.
For more information on the Panorama Press program- www.panoramapress.net
Second, and equally important, search advertising is probably the most effective form of marketing ever invented. Because search queries telegraph a user’s intent with precision, they make it possible to match people with the right ads at the right moment. As a result, advertisers are willing to pay handsomely to peddle their wares in front of someone who types “iPhone deals” or “Maui hotels” into Google."
Miguel Helft New York Times October 25th.
Small businesses can increases their sales by using a combination of advertising with organic search strategies. Panorama Press in Woodstock, Georgia has helped many clients increase their leads appointments and sales by aggressively launching specialized websites and promoting these websites through cutting edge marketing techniques.
Research has shown that 70% of internet searchers will only look at the internet search results that are organic( Non-advertisements). Obviously you may be missing a large potential pool of prospects if your company is not showing up regularly in internet searches fro your category. The good news is you can make changes and see results in a few weeks.
For more information on the Panorama Press program- www.panoramapress.net
Using Twitter Can Increase Your Sales -Two Examples
Contribution from Jason Morgan Social Media Consultant
I wanted to share 2 examples of companies that have been able to share a very clear ROI from their social media efforts. If the two small businesses below can calculate social media ROI so than can your multi-million dollar company. The examples below aren’t exhaustive and of course there are things that can be improved upon. The important thing to realize is that there are companies out there that are able to measure ROI from social media.
For those of you who are not familiar with Naked Pizza it’s an all natural pizza place in New Orleans that actually makes pizza that’s good for you. What’s interesting is that Naked Pizza has been using social media tools such as twitter and facebook to reach out to customers and to generate a positive ROI from their efforts (yes dollars). In fact, Naked Pizza has a giant billboard outside of their store which encourages passerby’s to follow them on twitter. Jeff Leach, one of the co-founders of Naked Pizza says that he was able to drive 15% of daily revenues with Twitter; of those 15%, 90% were new customers! A few months ago Naked Pizza broke it’s one day sales record using social media, here are some stats from that day:
* 68.60% of total dollar sales came from customers who said they are “calling from twitter”
* 31.40% of customers did not mention twitter
* 41% of total tickets were from twitter customers
* of the 26 new customers, 22 (85%) were from twitter
That’s example 1, here’s example 2.
Reality Digital is an SF based company that offers clients an online community platform to engage with their users. Reality Digital has been using social media (mainly twitter and facebook) to help get new clients and to increase the number of prospects/leads. Here are some stats from their social media efforts (found on Computerworld)
* Total investment for social media programs (including technology costs and PR agency hours): roughly $3,000 per month
* Total sales leads generated in April, May and June: 72
* Average sales leads per month: 24
* Average cost per sales lead: $125
* Lead conversion to sales opportunities: 11.1%
* Lead conversion to closed deals: 1.4%
Reality Digital didn’t give an exact number for how much money they are making but Lawrence Mak, the marketing manager said:
“Given the typical size of our deals, the annual cost of our social media programs is covered by revenue from one closed deal (annual contract). Because we started our social media program only three months ago, I consider it to still be in ramp-up phase. I expect cost per lead and conversion metrics to improve as the program matures over the next three to six months.”
So there you have it, 2 examples from 2 different companies that are using social media and are able to measure ROI. These 2 companies don’t have multi-million dollar budgets so what’s your excuse for not measuring your social media ROI?
For more information www.jmorganmarketing.com
I wanted to share 2 examples of companies that have been able to share a very clear ROI from their social media efforts. If the two small businesses below can calculate social media ROI so than can your multi-million dollar company. The examples below aren’t exhaustive and of course there are things that can be improved upon. The important thing to realize is that there are companies out there that are able to measure ROI from social media.
For those of you who are not familiar with Naked Pizza it’s an all natural pizza place in New Orleans that actually makes pizza that’s good for you. What’s interesting is that Naked Pizza has been using social media tools such as twitter and facebook to reach out to customers and to generate a positive ROI from their efforts (yes dollars). In fact, Naked Pizza has a giant billboard outside of their store which encourages passerby’s to follow them on twitter. Jeff Leach, one of the co-founders of Naked Pizza says that he was able to drive 15% of daily revenues with Twitter; of those 15%, 90% were new customers! A few months ago Naked Pizza broke it’s one day sales record using social media, here are some stats from that day:
* 68.60% of total dollar sales came from customers who said they are “calling from twitter”
* 31.40% of customers did not mention twitter
* 41% of total tickets were from twitter customers
* of the 26 new customers, 22 (85%) were from twitter
That’s example 1, here’s example 2.
Reality Digital is an SF based company that offers clients an online community platform to engage with their users. Reality Digital has been using social media (mainly twitter and facebook) to help get new clients and to increase the number of prospects/leads. Here are some stats from their social media efforts (found on Computerworld)
* Total investment for social media programs (including technology costs and PR agency hours): roughly $3,000 per month
* Total sales leads generated in April, May and June: 72
* Average sales leads per month: 24
* Average cost per sales lead: $125
* Lead conversion to sales opportunities: 11.1%
* Lead conversion to closed deals: 1.4%
Reality Digital didn’t give an exact number for how much money they are making but Lawrence Mak, the marketing manager said:
“Given the typical size of our deals, the annual cost of our social media programs is covered by revenue from one closed deal (annual contract). Because we started our social media program only three months ago, I consider it to still be in ramp-up phase. I expect cost per lead and conversion metrics to improve as the program matures over the next three to six months.”
So there you have it, 2 examples from 2 different companies that are using social media and are able to measure ROI. These 2 companies don’t have multi-million dollar budgets so what’s your excuse for not measuring your social media ROI?
For more information www.jmorganmarketing.com
Wednesday, October 21, 2009
Plan Your Advertising Carefully
Many small business owners fall into the easy trap of trying to advertise in too many places. It is tempting to try to place advertising in as many publications and marketing vehicles as possible. The thinking is that each publication/or media vehicle reaches a different audience and you do not want to miss any customers.
With limited budgets this spreading of marketing dollars actually dilutes the impact of your advertising. Research study after study shows that you need to be consistent and frequent with your advertising to maximize results. It is much better to advertise more frequently in fewer publications to get the results you want.
With limited budgets this spreading of marketing dollars actually dilutes the impact of your advertising. Research study after study shows that you need to be consistent and frequent with your advertising to maximize results. It is much better to advertise more frequently in fewer publications to get the results you want.
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