Monthly Archives: March 2012

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Making money on mobile. Multiple barriers but some success.

This piece on mobile advertising and marketing ended up running rather long, but it is broken up into three sections for easy viewing:

If you want to go right to the success cases, feel free, but I hope you will find some useful information in all the sections on things to consider before you jump into mobile advertising and marketing.

Creating monetizable events on phones is difficult.

Phones are not easy to make purchases on.

Amazon and Apple have solved this issue to some degree by getting you to enter your payment information via a computer when you setup an account or make purchases, and subsequently it only takes a click or two to make a purchase on your phone. But if you are coming to an entirely new site and are trying to enter all your personal and credit card information, you know how difficult it can be. Small screen size and less than precise input devices increase the friction in purchases to the point that many people give up.

Purchasing on phones is not a habit.

Difficulty alone stops most transactions, but there is also the issue of phones seeming less secure or at a minimum the process is just new. As humans we are creatures of habit.  Text messaging and social networks have allowed us to use our phones to communicate with friends and family as well as the broader world. But when we actually want to make a  purchase, most of us have the option of forgoing intense research and purchases until we are on a more familiar and capable device. If you want to purchase a new TV online, are you going to use your phone to research the options? Possibly, but most of us will do the research and especially the purchasing on a regular computer . This may change as tablets become more the norm, but mobile is still more of a social, entertaining experience vs the place you go to make purchases. Even when we start using tablets as our primary computer, the mobile element will not be the key element. If you make a purchase on your tablet while sitting on your couch, is that any different then making the same purchase on a notebook computer?

Display ads are not effective on mobile devices.

While many of us are using our phones to access the Internet more than we are using our computers, the ad industry has had considerable difficulty finding ways to effectively advertise on mobile. Take the example of games. Games have done incredibly well on mobile. It is easy for a person to just launch an app and play a game when they have a couple minutes of free time. Display ads are common in ad supported games, but a review of developers discussing mobile ad revenue shows that the money made on mobile ads in minimal. Even beyond games, consumer are used to simply ignoring display ads, and it is likely that the minimal clicks on mobile ads are often misclicks. We are talking about small screens here.

Three examples of mobile struggles.

Newspapers

No industry is more desperate to find new ways to monetization in the digial world than the newspapers. Their monopoly on local coverage has been erroded by social networks and greater access to niche content. While most newspapers have maintained a substantial reach by having a comprehensive Internet pressence, digital ads and services produce less than 20% of what print ads do. Despite the desire to find new revenue models and more people accessing their content on phones, less than 1% of newspaper’s revenue is coming from mobile

Facebook

Facebook’s recent IPO filing indicated they have no revenue from mobile. Here you have one of the most successful social networks, that is valued at close to 100 billions dollars, and they get zero revenue from mobile. In the past two week Facebook has gotten agressive about mobile and advertising in general, but their slow movement into this area points to the fact that mobile doesn’t have an easy path to monetizing attention. Since Facebook revenue ultimately comes down to advertising, it is worth noting that while Google might not know as much about us, search usually signals intent in the moment. Intent is much more valuable for lead generation and sales then just knowing what I “Like”. Facebook might get into the search business, but without it, it will be tough for them to compete with Google for some of the most lucrative ad purchasing verticals including on mobile.

Social Ad Networks

My final example is from personal experience. Cross platform ad networks value mobile clicks significantly less than those made from a computer. I run MyLike ads on the @free Twitter account, so I have quite a bit of experience with their network. For several months, MyLikes was paying just 2 cents per mobile click while at the same time paying as high as 35 cents for a click made via a user on a computer. They did this because advertisers, particularly those who were looking for a specific action from their ads, like a sale or a sign-up on a lead form, were unhappy with the performance of mobile users. MyLikes has since stopped the payment differentiation and made all clicks equal. Their justification for changing back to equal pay was the branding benefits of ads.

Where mobile does work.

Local

The idea with mobile is that you can be reached anywhere. Many retail business and services have to get you to leave your house to visit them. If you can be reached while you are already out and about, these businesses have already overcome the first step. For mobile, very basic SMS texts tend to be a powerful way to reach people on their mobile devices. Local businessess, particuarlly restaurants, have had success running SMS text lists. The most effective campaigns combine mobile delivery of messages with discounts and free offers to get customers in the door, make them familiar with local businesses, and get them into new routines.

Audience Acquisition

You might not make the sale with mobile, but it is a good venue to start acquiring potential leads.  Sales funnels (how you get from first exposure to actual sale) vary greatly, but if you can get a potential customer to “Like” your Facebook page, follow on Twitter or signup with your email or SMS text list, you have started the process. That connection can lead to multiple touch points, build awareness and give you a venue for a call-to-action. In many cases, you are not going to get these connections with display ads. The “ad blindness” I talked about ealier still applies. There are effective ways to get these connections including providing compelling content, curating your industry, running contests or even paying for in-stream ads. In-stream ads can now be purchased on Twitter as well as Facebook, or if you are looking for a lower cost option, you can work with 3rd party brokers or even publishers. My startup @free has built both our audience as well as our own revenue model on in-stream advertising and sponsorships.

Phone Calls

Google continues to be on the cutting edge of what works in advertising, and they are doing it by going back to the future. While restaurants have been successful using SMS coupons and free offers to get people in the door via mobile, this approach doesn’t work as well for less universal services (i.e. everyone eats each day, we don’t need a plumber each day). For most industries, intent is extremely important. Google has solved the issue of actually creating leads and sales on mobile by allowing the call-to-action to be a phone call. Real sales are being generated by this method. Fortune has an excellent article on the subject. Here are a few of the businesses experiencing success with Google mobile ads:

Naturally, the approach has proved popular with firms that have long relied on call centers to generate new business. Take Esurance, the San Francisco-based auto insurance firm that provides services online. The company says that click-to-call ads have improved the efficacy of its marketing campaign some 25%. While it won’t release specifics, it says calls coming from such ads were more likely to result in sales than typical phone inquiries. “So many people want their final transactions to be over the phone,” says Esurance Director of Online Marketing Tolithia Kornweibel.

1-800-Flowers (FLWS) is another example. The company says it’s customers were two or three times more likely to click to make a phone call from a handset than to click on anadvertisement on a desktop computer. Cable provider Comcast (CMCSK) has found the same to be true. Since starting to use mobile ads in June last year, the company says it has seen a surge in mobile sales, with 270% greater click-through rates on mobile than desktop devices. Mobile advertising now drives more than 10% of the company’s online sales, up from virtually nothing last year.

While these examples are for businesses who have call centers, local businesses can also take advantage of the phone call option because the number of potential customers is much smaller and can easily be handled by your existing sales teams or even just taking the calls directly as a small business owner.

Mobile is obviously a substantial growth area, but knowing what technology to use to reach users in a meaningful way is a key consideration in actually making mobile work for your business and industry.

 

Groupon Affiliate Program Pin to Pinterest

Groupon is the first merchant to facilitate & encourage their affiliates to pin on Pinterest.

In the last month there has been a considerable amount written about affiliate links and Pinterest. While Pinterest did use Skimlinks to modify user submitted links to add affiliate codes, they stopped that practice even before my initial blog post on the subject.

Today a Groupon Affiliate manager sent an email to affiliates encoraging them to pin Groupon offers to Pinterest.

Anytime you see a deal that you’d like to pin to your Pinterest boards, all you need to do is click the button, and it’ll get pinned with your affiliate tracking intact!

From the Groupon Email

This is accomplished by using the Affiliate Link Generator bar. Affiliates sign into their Groupon account and then can share directly from the offer page to a variety of social networks with just one click. Now Groupon has added Pinterest into the mix.

Your affiliate tracking link will be passed through, and anytime someone re-pins your pin, your affiliate tracking link will remain intact! Don’t forget, we have a 30-day cookie as well, so even if someone doesn’t buy what you pinned, you’ll still get credit for any purchase they make within 30 days of your initial referral.

I spent 30 minutes searching Google for affiliate programs that encouraged pinning, but I didn’t find any. As a personal user, I am not thrilled that the pins I see will now be influenced by affiliate programs, but at the same time, the follow/unfollow model of Pinterest means that I am never more than a couple clicks away from unfollowing someone who posts excessive affiliate links. In addition, the email from Groupon did at least show an understanding of how Pinterest works. It began:

I am, admittedly, a Pin-aholic. I’m pretty big into sewing and crafting, so Pinterest has been a great place to consolidate my inspiration. I also set up a board where I pin pictures of places I’d like to visit, and as it happens, quite a few of those places are culled from Groupon Getaways.

So I thought, wouldn’t it be great if I could pin a Groupon Getaway onto Pinterest, with an affiliate link intact? And that’s when we came up with the idea to add a Pin It button to our Affiliate Link Generator!

Most commentators believed that Pinterest was not at legal risk for their decisions to not disclose affiliate links being put into pins. The thinking was that Pinterest was not uniquely promoting monetized content over other content. That isn’t the case with affiliates using Groupon. They do have a financial incentive, and the email that was sent by Groupon didn’t encourage any type of disclosure of the financial relationship. Using Pinterest as encoraged by Groupon could put individual affiliates at legal risk.

 

Pinterest now using Zendesk to help answer Pinterest questions

Have questions for Pinterest? Pinterest is now using Zendesk to address users’ questions & issues.

Are you waiting on a response from Pinterest? Don’t feel too bad if you haven’t heard back. Pinterest has managed to scale their site with rapid user growth, but scaling customer support has not been as easy.

Pinterest has been inaccessible in a way that few businesses can be. It is not just that you, one dedicated user, can’t get a response. Some of the biggest brands in the world want to get some personal attention from Pinterest, and they aren’t getting it.

In order to deal with this lack of communication, Pinterest is now offering a support section, powered by Zendesk, to address user issues. Yesterday, Lauren Orsini of Daily Dot was the first to cover the specifics of Pinterest’s new support option. While Zendesk offers a number of options for aggregating and addressing frequently asked questions, the core of the product comes from increasing the efficiency of actual people processing issues. Given the small staff Pinterest has (last reported at under 20), it is difficult to imaging that a ticketing system will resolve the lack of communication, but it is a first step. It is possible that the ticket system will largely be used to populate the FAQ section of the support pages. If that is the case, Pinterest should likely provide some type of disclosure of this. If individuals aren’t going to get responses from tickets, those users who have already spent hours typing multiple emails to Pinterest are unlikely to want to repeat this frustration with the Zendesk ticket system. Facebook has dealt with user support and moderations issue by using third party contractors hired through 0Desk. It is possible Pinterest is deploying something similar.

Lauren from the Daily Dot provided a good overview of the new system:

Now, pinners can use the support center to discover “Instant Answers.” The FAQ is divided into two sections: one for the “basics,” another for “sites, brands & businesses.”

That separation is itself a revealing step in Pinterest’s evolution—an acknowledgement, however quiet, that businesses large and small, not just individuals, are active on the site.

Despite Pinterest quietly launching the support page, Lauren’s article indicates the number of tickets already sent to the system could be as high as 11,000, but is at least 4,000.

Our tipper, Hutchison, opened ticket #7308 on Friday, and hasn’t heard back.

When the Daily Dot used the ticketing system to ask for a comment, our ticket was #11065. If Pinterest is labeling tickets numerically, that means Pinterest’s small staff is fielding more than a thousand requests a day—and that was over a weekend.

Zendesk integrates with social media, but has Pinterest gotten too big to use these channels?

A centralized place to discuss and post Pinterest information is likely the best step for a company that has as many users as Pinterest. But I wanted to briefly look at how Pinterest has used their social media accounts up to this point. The bottom line is that you likely shouldn’t waste your time trying to communicate with Pinterest via social media.

Blog

Pinterest hosts their blog on Tumblr. I went back through the comments since October, and there wasn’t a single response from someone at Pinterest despite hundreds of questions being asked. I finally found an actual response from Pinterest in September. As you can see from their Discuss profile (the software that they use for blog comments), they haven’t post a response in six months.

Twitter

The last @message response from Pinterest’s Twitter account was in December of last year. Since then messages to Pinterest’s Twitter account didn’t get any responses. In the first three months of this year, Pinterest has only made seven tweets total.

If you look at the Pinterest’s timeline, you will see frequent @messages addressing user questions all the way up to the summer of 2010. After that point, it seems Twitter was no longer a way to contact Pinterest with issues.

Twitter is often thought as a backdoor way to get more traditional companies to finally respond to questions and issues. In Pinterest’s case, it doesn’t work.

Facebook

Despite their one million plus fans on Facebook, Pinterest rarely uses this venue to even update users on changes to the site. Pinterest has only provide two updates on their wall (granted both are in 2012), and despite 500+ comments with each update, no one at Pinterest followed up on any questions or issues.

Pinterest making user issues a priority.

I called Pinterest to get a comment on their overall approach to communicating with users and their new use of Zendesk, but given the topic we are discussing, it wasn’t surprising to find their voice mail box was full. Pinterest has done an amazing job with their product. They focused on what was, and is important: creating a great user experience. While it would be great if they took calls from reporters and writers, we really don’t matter as much as users. The vast majority of users never have any issues with the service and don’t even realize that Pinterest is unresponsive to questions. Only when user have a serious issue do they realize that they really have no options to resolve it. Hopefully Pinterest’s use of Zendesk will provide some remedy to the previous lack of communication options.