Social Media Advertising: Does it work?

As I shared earlier this week, I’ve been experimenting with social media advertising on Facebook.  The results to date have been, how do i say this politely, appalling.  I knew from my prior research that the clickthroughs would be lower than paid search on Google but given the lower expected cost per click and and larger number of impressions, I figured we might “make it up in volume”. Here some interesting articles I’ve compiled while I try to assess the effectiveness of this campaign and my future with social media advertising. Ad Gurus Find The ‘Real Value’ Of Online Advertising Remains Elusive What’s the future for social network ads? Reach versus Engagement, part II (full post) Quick Case Study on Facebook Advertising The Facebook Ad Experiment — 5 Recommendations for a Successful Campaign Facebook Ads: Ineffective or Fraud? Social Network Advertising Must Change for Brands Results From My Facebook Ad Campaign As you can see, the jury is still out for social media ads and only more testing will help us discover the truth. Have you read any good...

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Making a bad decision on purpose: option value and social search

Am I going soft? I’ve been dabbling with paid search on one of the major social networks.  The interesting thing is that we decided to press forward despite the fact that our “back of the envelope” calculations using an optimistic lifetime value estimate projected that this campaign will end up underwater. I frequently rant about the value of running the numbers first but in this case we decided to “do it for strategic reasons”.  More specifically, this campaign had high option value.   In a situation like this, a simple ROI calculation may not be enough.  Conventional projects with predictable outcomes can use straightforward estimates.  When venturing into the unknown where the risks are greater and the future is uncertain, people often use real options as a way to capture the potential value of an opportunity. So in this case, paid social search is a good fit for thinking about option value.  Despite a lousy initial estimate, there is great potential in the medium.  If this works, it could open up a big, new promotional channel.  It could also be a bust.  We’ll never know unless we try it. So can you think of any high risk projects that have a small chance of a exponential...

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Year-over-year performance – how do you measure it?

My experiences in fast-growing companies revealed a variety of ways people measure growth.  The one that always gives me heartburn is year-over-year growth.  It is frequently stated as a ratio of your current performance to same month or quarter in the previous year. Here what makes this challenging: What happened last January?  Any big  customers wins? Or losses? Is your business seasonal?  Did any business slip a month or two? Any economic shocks (think last October when everything stopped for a few days) How many days in that month again?  (Yes, last February had 29 days) Beware of these comparisons.  I prefer measuring the change in the annualized or quarterly run rate.  These numbers are less susceptible to one-time events and/or optimistic interpretation. To quote a Wall St. friend, we live in a second derivative world.  The change in the growth rate both thrills and scares people.  I am suggesting that you look at the underlying numbers carefully and make sure they are not full of special factors that skew results.  Most businesses have a natural rate of growth based on its core customers and markets.  Talented managers can change the slope of the curve while pretenders manipulate the numbers.  Be careful out...

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Nine things to consider when starting an affiliate marketing program

So how do you start an affiliate marketing program? As ubiquitous as affiliate programs are, I couldn’t find any great online content about getting started.  I was looking for something pretty simple like a checklist or PPT with the key questions and considerations.  Over the last 6 weeks, I’ve interviewed a series of “experts” to expand my understanding of the subject. So here is my “affiliate marketing checklist”: Types of partners – One size program may or may not “fit all”.  Some partners will need more hand holding and information before signing up. Size of partner universe – There always seems to be more ideas of potential partners than resources to contact them all.  I suggest building a big list (prospect universe) and contacting a couple in each category to eliminate the ones that don’t make sense. Revenue share – The marketplace for affiliate programs is very competitive these days.  Referral fees can range from 2 to 20%.  My opinion is that you want to be aggressive.  Remember it is better to have 80% of something than 95% of nothing. Competition – What are they doing and how are they doing it?  Is there any evidence of success?  How will you differentiate your offering? Affiliate network/tracking/reporting – Sites like Commission Junction and Linkshare offer a broad network of potential affiliates at a cost (as much as 30% of revenue) as well as payment and tracking infrastructure.  You need to think about whether or not the value of their distribution exceeds the cost.  If you decide to “roll your own”, then you can use a product like iDevAffiliate. The upside is its low cost but you will then have to recruit every affiliate on your own. Branding – What will you call your program and/or your partners? Ongoing support – Who will manage the affiliate relationships once they are signed up. Marketing materials/collateral – There is a variety of logos, web pages and PPTs you will need to promote and maintain the program. Set proper expectations – This is an indirect sale.  Even after you close a partner, it will take time to get them engaged and actively promoting your product or service. I hope this is helpful  Please let me know if you have any...

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Are the good things in life really free?

My life has been taken over by free (or almost free) things.  Here are some examples: We decided to use WordPress for a company knowledgebase rather than purchasing from a leading a SaaS vendor. We finished a webinar that yielded over 1,800 signups.  We used Gotowebinar ($99/month) and emails our house list (~$400).  That is $0.28 per lead for those keeping score at home (about 50 to 100 times less than most B2B marketers expect). Organic search and social media are the fastest growing parts of referrer traffic at Tangyslice and Firstgiving. I chatted on Skype with my parents during their recent trip to Costa Rica. I sold my wife’s minivan (ok, snicker away, it was my idea) on Craig’s list. After flailing for months without a calendar or contacts on my phone, I discovered Google sync for my Blackberry I stopped reading the daily newspaper now that I seem to get all my news through free RSS feeds. Are you feeling the power of free?  Any other great free stuff to...

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