Marketers and Bankers -Internet Gambling

In June, we posted a story about how US Federal prosecutors were busy arresting CEO's of London-based public companies that operated online gambling enterprises. We facetiously suggested that as long as the justice department has nothing better to focus on than internet gambling (is it because this worldwide business is encroaching on Las Vegas public companies??)--why not go after the investment bankers that took these companies public, such as Goldman, Deutsche Bank and Merrill and the rest. After all, they'd already pounced on advertisers and their agencies for facilitating the promotion of these 'illegal enterprises'

Well, it seems that George Bush's team of Elliot Ness wannabees took my suggestion to heart--as the front page news story today focuses on subpeonas issued to a variety of global investment banks that have underwritten an assortment of companies. Now, I guess its a matter of time before Fidelity and larger institutional investors are subpeoned for buying the issues for their various portfolios. Then the FBI will need to arrest the individual investors that own Fidelity funds.

In a world where our National Guardsmen, who sign up to protect the borders and cities of the US are shipped off to fight battles in Iraq and other foreign lands..and come back without arms and legs..it begs the question as to who should be prosecuted for sending them there. After all, the entire campaign in Iraq was precipitated by George Bush and Co. telling everyone that there was a clear and present threat of WMD's and that Iraq was on the verge of attacking the free world. He and everyone close to him knew that Saddam Hussein didnt have WMD's, other than his bad breadth and the entire story about WMD's was a lie. It was simply a strategy to exploit fear and get Americans to buy into the crappola. And there's plenty of documentation that we've all read that indicates all kinds of fraud was committed by making those representations and putting our children in harms way. Sort of odd that no White House staff member and only two or three Congressmen or Senators have children serving in Iraq.

New campaign slogan for '08--Anybody But Bush

Run A Sweepstakes At No Cost

Gadzooks!..Come to my site and win a prize!... Kudos to WSJ..today's edition is chock full of ideas..
You've always known that running a sweepstakes as part of your marketing strategy was a good idea, but you're either too small a business to afford it, or you don't have the resources to manage it..... Time for Caffeine!!!

Here's how it works---according to today's column by Gwen Bounds

Making Big-Time Promotions
Available, Affordable

Sweepstakes Operator
Offers Online Contests
For Small Firms' Sites
January 16, 2007; Page B11

This week, a new low-cost Internet service launches that lets small businesses run sweepstakes for items such as plasma TVs, trips and diamond rings on their Web sites as a way to attract visitors and cull valuable marketing information from them.

The service, nicknamed Caffeine, helps users design and run these promotions without having to pay for the prizes or do the legal legwork needed to operate the contests.

A sample promotion for Fathead LLC using the new Caffeine service.

Big companies often use sweepstakes and giveaways to woo consumers, and research shows such programs make Web sites "sticky" so visitors are more likely to make repeat visits and spend more time looking around. They're also a good tool for enticing consumers to proffer personal information such as age, location and gender. However, most small businesses don't have the finances or resources to offer such promotions.

Caffeine was developed by a Detroit-based company, ePrize LLC, which runs interactive promotions for behemoths such as Disney, Coca-Cola and Procter & Gamble. With the launch of Caffeine, ePrize is seeking to capitalize on a growing online movement toward pay-per-action advertising.

Unlike the traditional pay-per-click model, small firms using Caffeine don't pay a dime until a visitor clicks on the promotion and registers by providing identifying details, including an email address, that the business can then use in marketing and research efforts.

"We're trying to democratize the promotions business," says ePrize Chief Executive Josh Linkner.

Here's how Caffeine will work: Business owners go to the Internet site www.caffeinenow.com and choose the prize they want to offer from different categories. Some samples: a two-year BMW Mini Cooper lease, a kitchen makeover, and a $10,000 Amazon shopping spree. Promotions are designed from various templates that include animated scratch-and-win cards and virtual slot machines. It takes about 10 minutes to get a customized banner, which businesses then place on their own homepage or other advertising outlets including search engines.

Businesses pay Caffeine $1 for every qualified customer lead and 15 cents per repeat visitor, though they can implement restrictions. A Seattle coffee shop, for instance, can decide to only pay for names of contest entrants within, say, a 20-mile radius. And owners can also set a limit on how much they want to spend with Caffeine. However, Caffeine will continue to store all entrant information in case a business ever wants to purchase more sales leads or broaden its reach. There's also a coupon-builder option; businesses pay five cents each time a coupon is downloaded.

One early beta tester of Caffeine is Fathead LLC, a Livonia, Mich., maker of life-size peel-and-stick sports images. The company chose a promotion that gives away a trip for four to an unspecified sporting event and is collecting about 100 entrants a day.

"We spend a lot of money trying to get people to our Web site through advertising and we want to collect data on people who visit the site and aren't buying then -- but might be interested in doing it later," says Aaron Chestnut, Fathead's vice president of marketing.

There are drawbacks to Caffeine. It is not a pure pay-per-sale advertising model, and people entering the promotions may not have any intention of ever buying a company's wares. Plus, entrants of Caffeine promotions can "opt out" of having their information used for marketing purposes -- standard practice in sweepstakes, Mr. Linkner says -- but a business still must pay for the sales lead. Mr. Linkner says that while such leads are "not as valuable," he believes they are still worth something because they represent traffic and provide a business with information about who is visiting its site.

Also, prizes are doled out via "pools," which means multiple businesses may run promotions for the same gift item. So, just because a business advertises a satellite radio giveaway, doesn't mean one of its customers will necessarily win that item. There is no limit on, or disclosure of, the number of applicants.

A challenge for Caffeine will be integrating its service with existing advertising opportunities. To that end, the company is in talks with Yahoo Inc. about a possible alliance where Yahoo will include Caffeine as an option for businesses buying keywords for Yahoo's search-engine advertising.

Mr. Linkner of ePrize hopes this may one day distinguish ads using Caffeine on the sponsored results of search pages. "If I'm searching for 'drycleaner' and see one with 'chance to win,' I'd probably rather go to that Web site," Mr. Linkner says. Yahoo declined to comment on the talks.

To promote Caffeine, ePrize already has signed up a handful of partners including localbiznow.com, a search-marketing firm for local businesses, and a couple of search-engine optimization and advertising firms in ePrize's own backyard of Michigan.

Eric V. Melin, president of SpiderSplat Consulting Inc. in Boston, hasn't tried Caffeine, but he says he thinks the concept is "a natural," particularly if it's integrated into the services from the likes of Yahoo and Google.

"Promotions are a great way for small businesses to make their site separate out from the crowd," says Mr. Melin, whose search-engine-optimization firm serves large and small clients. "Another thing that tends to happen with a promotion is that people will email the link to all their friends. It's a viral effect."

That's what Jeff Broaddus, owner of Quality Cleaners in Royal Oak, Mich., hopes. He's been testing Caffeine as a way to differentiate his service by promoting a $20 Gap gift card giveaway and a $1,000 Nordstrom's shopping spree on his site, myqualitycleaners.com¹. Mr. Broaddus thinks the contests could induce loyal customers to send him referrals. "That's the lifeblood of small businesses," he says.

Write to Gwendolyn Bounds at wendy.bounds@wsj.com²

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Managing Expectations

Great article by WSJ's Jared Sandberg in today's edition i.e. why over-estimating deliverable schedules can make you look like a star..But there are caveats to this strategy, and managing expectations is a tight rope to walk on.. Here's an excerpt--the link brings you to WSJ online and you need to be a subscriber to access the entire article...

Why Preparing Others
For an Effort's Failure
Can Bring You Success
January 16, 2007;

To understand how Tony Sharpe approaches managing expectations, consider what happened in "Star Trek": Captain Kirk's grumbling engineer, Montgomery Scott, admitted that in order to be viewed as a "miracle worker," he had padded his time estimates for finishing jobs so he could handily beat them.

"That's pretty much how I manage my clients' expectations," says Mr. Sharpe, an advertising executive. He might tell clients that certain work may involve extra time or money, or that he might not be able to do it at all. "Then I come back with it done," he says.

Asked why he does this, Mr. Sharpe responds that the tactic helps him ensure that there will be only good surprises, which can help "keep clients from getting mad at us." As long as the results are positive, he says, "they won't even notice you're crying wolf."

In January, the clock starts ticking for all kinds of company measures, from budgets to performance reviews. The next 11 months are spent trying hard to manage expectations about how these things will turn out. In a system where the facts don't govern opinions nearly as much as expectations do, failure to manage those expectations properly can turn success into failure or a well done deed into a disappointment.

That's why, for example, a company that has just reported a 4% gain in net income compared with a year earlier might still suffer a drop in share price. And it's why rain-making employees can lose their luster compared with laggards who surprise everybody by showing some small evidence of a pulse.

When Joe Glavin managed a software development group, a project manager who was developing record-keeping software for him kept reporting that everything was "Going great!" But a week before the scheduled rollout, the project manager "behaved as if he was being chased by a loan shark," says Mr. Glavin, and then finally admitted that the whole system was unusable. Mr. Glavin ended up getting burned, and the project manager "never got a management assignment again," Mr. Glavin says.

You would think the tactic of managing expectations downward would be so obvious that it wouldn't work. But, as Wendy Wood, a professor of psychology at Duke University, notes: "You can be a physicist and study gravity and still fall down."

One explanation for why managing expectations downward works so well may be the psychological phenomenon of "anchoring," or the tendency to overvalue an early piece of information, such as an expectation set by an employee. Even as new information surfaces, notes Max Bazerman, a professor of business administration at Harvard Business School, "We adjust insufficiently. Wherever we start from has a significant influence on our final estimate."

Research also suggests that the penalty for missing expectations can be greater than the benefit for beating them. In his research on promises, Nicholas Epley, assistant professor of behavioral science at the University of Chicago's Graduate School of Business, concluded that while breaking a promise is bad, "exceeding a promise is often not worth the effort." In other words, he says, people sometimes value beating expectations little more than meeting them.

That's why managing expectations downward is so widespread. "The chips are stacked against us," says Prof. Epley. First, employees, investors and bosses don't normally expect failure, so expectations are generally high. Second, "the loss from that already high expectation is going to be that much more painful."

Melissa Marsh, an IT project manager who works on deploying new software systems, concurs. "You project the worst-case scenario publicly, when you fully anticipate that you will be able to bring the system up earlier," she says. After all, she says, to deliver 99% of what you promised only leads people to sorely miss the remaining one percent.

"There are a lot of opportunities to disappoint people," she says, "and it can be really difficult to impress them."

• Email Jared Sandberg at jared.sandberg@wsj.com

Marketing Pizza-

Let's just bag it all and open a pizzeria. Its a cash business, and the margins are great.

But be careful if trying to be innovative in the course of marketing--you might attract the wrath of lunatics.. Case in point--The brouhahaha over Pizza Patron--a 59-store franchise based in Dallas that is promoting "pay in pesos" in its East Dallas locations---to accomodate customers that are on the cusp of the Tex-Mex border ..
Its actually a brilliant idea--as demonstrated by the increase in sales since the promotion was launched. The fact that the company is now receiving all kinds of complaints from anti-immigration zealots--including the Washington, DC-based Center for Immigration Studies is appalling.

And if you ask me, its anti-American.
The entire foundation to our country is based on the melting pot philosophy. And a private enterprise working to accomodate customers ease in paying for products/services emodies the entire foundation...
Shame on those that take exception to Pizza Patron's innovative business strategy.

What is "Best Practices"

Great insight from Razorfish's David Baker...Below excerpt from this week's MediaPost

THE BUZZ PHRASE FOR YEARS has been, "let's apply best practices" to help improve our e-mail or online programs. We go through the same motions, we look at what has worked for others and try to repurpose the key call-outs for our own programs.

I'm as guilty as every other strategist or consultant in our space who makes "best practices" presentations to clients, spouting every statistic in the book to describe the consumer/marketer landscape and what works. But when push comes to shove, and I have to show five "best practices" examples of relevancy in e-mail programs, triggered e-mail programs, surveys, opt-in registration pages, or media creative... I grit my teeth and smile and present work from the industry to show what others are doing. Does that make it "best practices," though? I've seen three presentations from e-mail vendors in the last month about "best practices," and I find them less and less useful.

Best practices are like benchmarks. They are very personal and contextual. Applied incorrectly, best practices can become handcuffs. Let's face it, you can't build a differentiated business or strategy around some other company's work. While I don't completely discount looking at what's happening with your competitors or others in the online marketing space--and I've stolen an more than an idea or two that way myself--too many marketers and consultants have a copy-and-paste mentality these days. We're 10 years into this channel, and there are very few things that we haven't tried in e-mail marketing. Yes, the landscape has changed; we have more robust technology, better reporting, more dynamic abilities, a more complex delivery environment, and a more complex consumer to reach. However, the principles of what works in marketing have not changed. Honestly, I still refresh from best practice presentations from years ago and chuckle when I see the same content re invented today.

I tend to scoff at people who tout the "best practices" as a test-and-learn approach. They remind me of the consultant who did a brainstorming session and wrote everyone's comments on a large sheet of paper. After the session he walked out of the meeting and left the sheet with all the critical feedback on it behind. What's worse, he never realized his mistake or called up to ask for it. We felt cheated, as is the case with most "testing" strategies.

When you've been in the space long enough, you have already learned or figured out 80% of what you need to do to be successful at e-mail and integrating it into your interactive or customer relationship programs. The value you bring is your ability to apply it as quickly and efficiently as possible. This is called "applied learning".

As marketers, we are so tasked with production-side marketing that we are relying on artificial creativity to spawn our programs. We need to build interruption exercises into our routine to infuse creativity into our programs.

While many folks make a living off copying other programs and tactics and re-applying them in a different context, the best marketing programs don't rely on best practices alone. They rely on a mix of discipline, business rules, creativity, and timely intervention to reinvigorate the programs and teams.