Informational products have always been an interesting beast, there is certainly value in information as Google has completely solidified, but what is it worth and who should actually buy it? That is a tough question to answer, but it is a question that so many so eager to fulfill.

Why they suck

We all need information. That much is fact, but the question is not “do we need it” but rather “who is best to give us this information?”. Often times we buy from people we have heard of, not people who are actually the authorities in any given field. This is the same reason that Tiger Woods is paid millions to represent Buick, when we all know that Tiger Woods is not the best mechanic on the face of the earth (among other things). While this is not always the case, it seems that far too frequently the people who are least qualified to be creating and promoting an information product are the leaders in the pack.

Who makes money

Importantly, the often is not the person who ends up buying the product to fulfill a need they think is currently unmet. Many of these products prey demographics who shouldn’t be shelling out the $50, $500 or $5,000 to “get started” when they could instead be paying off Credit Cards, Loans and other things that are absolutely eating them alive. So many times it seems that informational products pitch “How To’s” based on theory, models that no longer work or BOTH. So who really makes money off of these products? It’s often times JUST the information product producer who leaves little value on the table that can be quantified by customer.

Apologies

Here is where I directly apologize to you and the community as a whole. Not because I have created an information product and charged for it (I haven’t), not because I have made money from informational products (I have..), but mainly because I have subjected my audience to the same flavor of bullshit that has been floating around in the performance marketing industry for the past6 months more than ever. I am sorry for sharing information products that made me money because now I feel like I have done a disservice to you.

From here on out, I promise to more heavily screen the people and offers that I connect you to and make sure that the value is easily quantifiable for YOU before wasting your time talking about it. I hope that you can forgive me for buying into the hype a little bit, I just wanted to set things straight.

1. Becomes popular seemingly overnight (o views to 2 million in a week)

2. Creates a culture or “meme” around the content. Covers for songs, spoofs etc

Interestingly enough I came across a piece of content that fulfills both of the above “viral” components; but I think it would be even more interesting to break down the why for this particular piece of content. WARNING: Profuse cursing

Viral Breakdown

So let’s dig into 5 main reasons this video was able to collect several million views within only 4 days (nearly 1.5 million for this exact video at the time of writing, but several duplicates are cropping up on YouTube), why people started to do covers for this video and the heck do people even care about it in general?

1. Shock value

One of the first things you will notice about this video is how “in your face” it feels. It doesn’t ease into its purpose so much as it jumps in head first, making a big splash and getting every ones attention. From the color scheme, the washed video effect to the giant red “FUCK YOU” that shows up a few seconds in; this video smacks you over the head in a way that most videos fail to capture (for better or for worse).

2. Polarization

The other thing about this video is that it will completely polarize the people who watch it. You either love this video because you think it is absolutely hilarious, or you hate it because it is.. well vulgar, demeaning and gives a “we don’t care about ANYONE” kind of attitude. There isn’t a lot of in-between, and polarization drives discussion, pageviews and awareness.

3. Taboo

We aren’t supposed to like things such as this video, and for that reason many of us do. Like it or not, there is still a lot of money in the adult entertainment industry with part of the allure for many shoppers being the very fact that they aren’t supposed to have/like/watch/participate in whatever the content etc is. Again, this type of behavior just drives more traffic and therefore more awareness.

4. Emotion

This is one of the intangibles for marketers to calculate, which basically is my way of saying I am guessing; but it is not a far stretch to think that a certain percentage of people watching and sharing this video have some kind of emotional motivation to do so because they feel an emotional connection to the story. Did the event portrayed in the story happen to you? You might be tempted to shoot it in an e-mail to your ex. What about one of your friends? You may want to share it on their Facebook wall to make them feel a little more satisfied with the less than stellar situation they just went through. Either way, there are plenty of emotionally driven reasons why someone would share this video.. it is just a lot harder to measure.

5. Scarcity

This one is interesting because the video appears to be part of a pre-launch for a very real song and album and was posted by the “artist” themselves. The lack in ability for customers to buy now does kill  the opportunity to buy the song immediately, but what if they just can’t get the song out of their head? What if YouTube might take it down do to the shock value and polarization of its audience? These things force a video to move sideways into new social graphs through duplicate content (reposting of the same video which is common on YouTube), or the fact that it forces people playing it on repeat to have YouTube open which could then expose their friends to the video version of the song which is almost always the “richest” form of online experiences.

Conclusion

Ultimately there have already been covers done for this song by various artist (some actually pretty decent replications) because those artists want to be associated with the meme and cash in on the fringe brand associations. So the question is here, how can you deliver shock, polarization, taboo, emotional and scarcity components to your next promotional push in order to hit mainstream awareness?

Think you need a business plan to have a successful website/web service? The statistics would actually indicate otherwise, as the most successful websites were from people who were able to ship a product out of the door for an audience to start using and then iterate upon.

“Winners Ship”

This is what I keep hearing like a broken record from people who know what it takes to make it work online. Are you worried about having all the features your clients might ever want? You are going about it completely wrong, what you should be doing is focusing on key features that work – and work really well. Beyond adding clutter and delaying your launch, feature bloat can actually detract from whatever primary pain point your service is supposed to alleviate.

Pick the top 3 or so features that are core to your service working and make sure that the value of each feature is incredibly clear so that a user has no doubts at all as to WHY your service exists in the first place. If a customer can’t quickly identify the value in your service then all is lost anyway.

Link > Plan

So if you axe the business plan and try to not over think your new service, how are you supposed to go out and try to acquire funding for your start-up? Y Combinator jokingly says that they value a company by “adding 500k in value for each engineer and subtracting 250k for each MBA” because investors today want to see progress on an idea, not just a bunch of words around how good an idea might be. So what do investors care about these days instead of just a business plan? A link to a (mostly) working product that has a little bit of traction in the marketplace. The cost barrier to entry for a new web service has been lowered to much that investors need to see this level of success before investing because they have the luxury of being more picky.

You may or may not have heard that Twitter is rolling out their own official “Tweet” button for content sites, among others, to use for their audience to publish their content into the Twitter stream. A move like this from Twitter is important because it directly effects the many companies that publish Retweet type buttons to blogs etc in order to track and aggregate trending articles across a variety of niches. TweetMeme, arguably the largest of these aggregators isn’t being completely left out in the cold though since Twitter has paid to use some of TweetMeme’s backend code to facilitate this new feature.

Brand or Platform?

The most interesting part of this new product to me however, is figuring out whether or not this product is more about platform or brand control. The investors in Twitter have been saying for over a year that Twitter application developers need to “stop filling holes”. By that they are referring to the innovation coming out of many developer hot beds to fix the obvious gaps within the Twitter ecosystem. While you might think Twitter would appreciate all this innovation from its development community that made Twitter so popular to start with, but in fact Twitter has been gradually tearing apart the development community in order to deliver an end to end experience that consumers love.

This is in part motivated by control influences, but I feel that this is a big play by Twitter to control their brand across the web. If you have been noticing or not, Twitter has been implementing a refreshed sense of design across every product within their portfolio to deliver a clean and simple experience regardless of what platform you are using. This new button is no different in that the design, delivery and aggregration is now all under the control of Twitter itself instead of a 3rd party.

What are your thoughts? Do you think Twitter is being fair with gradually consuming each outlet of their data to control the user experience, or should 3rd parties be encouraged to compete against Twitter itself to add features and usability?

Enjoy!

As entrepreneurs, we can often relate our business passions to that of our lives with a significant other. We put so much effort into things we like to try and see them succeed and grow into something truly amazing. Today I was listening to my iTunes when @MichaelBuble’s song came on ” Just Haven’t Met You Yet” and I couldn’t help but draw the similarities between an entrepreneurs quest to build something amazing and the human desire to find someone you love to spend your life with.

“I promise you kid, I give so much more than I get”

Starting a business isn’t easy at all – in fact I can say without a doubt that starting not one, but two businesses so far it has been the most challenging thing in my life. Every time you decide to put yourself on the line financially, emotionally, and mentally you run a huge risk of being hurt, battered and depending on the level of risk you might even feel broken by the end. But what entrepreneurs see is amazing OPPORTUNITY that makes the risk all worth it. If you aren’t this person out of your circle of friends, chances are that you know at least one or two who seem not only willing, but EAGER to do this kind of thing.

But what is incredibly important about entrepreneurs like us is that we are willing to take that risk. No risk, no reward.. this saying has always been true and always will be. I know that I wake up every morning and ask myself “Why am I doing this? Why am I putting all my chips on the table to try and do this?”. But every day I keep working at it because I know deep down I am far from satisfied with the status quo – I want to build something truly amazing.

Interviews are daunting, and quite frankly they suck. With the economy how it is, what is a potential employee supposed to do in order to differentiate themselves from the rest of the applicants? In a word: Personal Brand.

People like @Garyvee have been promoting personal brands as a way to get to the next level, but what about if you can’t afford to jump right into the lush lifestyle of a talent agency representing you with speaking deals, book gigs and other lavish luxuries that people in that caliber are enjoying from their personal brand? What if, as crazy as it sounds you need to “take the deal” as Seth Godin says and go for a ‘regular’ job to earn more money?

All Hail the Personal Brand

While some employers may be timid about hiring an up and coming personality that is building their brand, the smart employers also know that the value you can bring to the table far exceeds the risk of losing you to bigger and better things. How will they know this? Because someone who is working on building their personal brand through blogs, social media, forums and other forms of communication really understands what is going on in the technology, marketing, communication, pr etc.

Personal brands are a great way to showcase your creativity, enthusiasm for whatever category you want to work in and give a potential employer some insight into who you ARE as opposed to just what you can DO. Personalities are equally as important as abilities to many employers, how are you building your brand?

The Good Stuff

What I was amazingly interested in however, was the contrast between the conversions of clicks to leads that stem from a very warm (and large) e-mail distribution list that has a) heard of Shoemoney before and b) has been communicated to by the list owner. Luckily enough, non other than Mr. Jonathan Volk of JonathanVolk.com decided to openly use a Bit.ly link with his e-mail push which meant we were able to peak into the results.

Bit.ly is a great way (mostly because of accessibility and free cost structure) to track the number of times your link is clicked, when that is, where its from (application) and what country. However, when doing a very public e-mail push, you are going to get called out on it from time to time.

Quick Background

So first things first, how did Jonathan Volk build up this e-mail list.. and how big exactly is that list? Jonathan Volk, Jeremy “Shoemoney” Schoemaker, Frank Kern, Andy Jenkins and a laundry list of others all operate in the affiliate marketing space to a certain degree. Because of that, they have a large audience that overlaps with each other and at the very least has a very similar set of actual needs. When Jonathan Volk wrote an eBook about effectively advertising with Facebook and other affiliate marketing promotional methods, he was able to leverage his existing relationship with people such as John Chow, Shoemoney to pump his eBook to a ready, willing and eager audience while providing value in exchange for a nifty e-mail address.

Jonathan decided to chime in on my Twitter conversation with John Chow to make sure it was stated that he pulled off this e-mail list for JUST the cost of 3 iPads as Chow has stated…

But there were certainly more promotional methods than just this for Volk, but tapping into lists such as Shoemoney, Kern, Chow and Jenkins was a good way to capture the low hanging fruit. I know for a fact that he also used some Sponsored Tweets to promote his book to the affiliate marketing space. (side note: I plan on covering Sponsored Tweets pretty in-depth very soon).

The 150x ROI

The rule of thumb in the list building business is that a targeted e-mail list provides about $10 of profit per year for each subscriber depending on how effectively they are marketed to. So to figure out the total value return of this list for Volk, lets do some simple math that rounds up on the cost of promotion and down on the number of subscribers.

Subscriber Value: $10

Subscribers: 10,000

Average Subscriber Validity: 3 years

Lifetime Value of Subscriber: $300,000

Cost of acquisition: (3 ipads at $500 ea. ) = $1,500 + (sponsored tweets0 = ~$500 : $2,000

With these quick and dirty numbers, Volk can expect to get up to a 150x return on his $2,000. Not a bad return at all if I may say so myself!! So what about this particular launch that we have click and conversion numbers from?

Warm & Communicative vs. Cold & Direct

Volks list produced 1,629 clicks over a roughly 1 week period and two mailings out of list that is known to be at least 10k.

Click through ratio? (clicks/emails) = 16.29% or lower for an “active” list

Number of leads generated? 824.

Conversion Ratio? (leads/clicks) = 50.58% HOLY SHIT THIS IS GOOD

Cost per conversion (cost per lead/conversions) = $2.43 per lead, but has a much longer lifetime value

What were my results with my leads generated through advertisements?

I generated 588 clicks over roughly the same period of time as Volk, relying primarily on SponsoredTweets for Traffic with a total cost of $25.86

Click through ratio? This is hard to tell because I just used Bit.ly and we don’t know view/click data

Number of leads generated? 23

Conversion Ratio? (leads/clicks) = 3.9% MASSIVE DIFFERENCE

Cost per conversion (cost per lead/conversions) = $1.12

Summary

What is amazing about the difference in lists compared advertising for lead generation is the conversion of leads into your relevant product, service or affiliate offer. If you have a list that you have build of good will with in the community you are going to see a MASSIVELY better response rate from your audience and a much larger return.

In regards to me having a much lower cost per conversion for this particular push, it is important to note that while Volks cost if confined to this case study alone would be more than double what I paid, he will have the opportunity to repeatedly market to this audience for a return that is many, many times larger than what I may generate through this study.

Building a List

How can you build a list and start cashing in the huge return that people like Volk are reaping the benefits of? Here is a check list of things to remember when pursuing this opportunity.

1. You absolutely MUST provide value to your market (doesn’t matter if it is Dog tricks or Car Cleaning) in exchange for their opt-in e-mail.

2. You need to establish connections with as many people related to your targeted industry as possible. This is going to give you a much wider audience and essentially allow you to cherry pick the most active and highest paying users from your competitors list for years of marketing success.

3. GET YOUR LIST STARTED TODAY. Getting it started as soon as you possibly can allows you to compound your results and start seeing the power of list building, lifetime returns and a “list ATM” that so many affiliate marketers are used to at this stage in the game. If you are looking for a high quality service provider to use, Aweber comes highly recommended and gives you the first 30 days for ONLY ONE DOLLAR.

Click here to get the massive Aweber deal and start building your client base today.

]]> http://thecollegestartup.com/2010/07/24/warm-leads-vs-cold-leads-case-study/feed/ 3 http://thecollegestartup.com/2010/07/12/ads-vs-premium-vs-freemium/ http://thecollegestartup.com/2010/07/12/ads-vs-premium-vs-freemium/#comments Tue, 13 Jul 2010 01:52:58 +0000 Travis Ketchum http://thecollegestartup.com/?p=451 With all the fanfare surrounding Hulu after it’s launch (especially in the College scene) as a free LEGAL way to watch premium TV shows (movies are available too, but have traditionally been lackluster). As Netflix got serious about their “Watch Instantly” offerings, many people found themselves signing up for the $9.99/month because it brought many students armed with their existing xbox 360 to get quality content onto their TV’s in a way that wouldn’t have the schools IT department knocking on their door and/or turning off their bandwidth.

So what is Hulu’s response to the higher resolution Netflix offerings? Hulu has notoriously been a completely free offering which was monetized through targeted advertisements, so it was only natural that Hulu would try to have more users (or at least more active) by offering higher quality resolution video across more devices (read: iDevices), and that service came under the name of Hulu +. “Great!” you may be thinking, and at a price of $10/month for recent episodes presented in High Definition it sounds fair.. until you realize that they STILL HAVE ADS.

Hulu has proven more than once that they are driven completely by the content owners (read: taken by the balls), so much in fact that the content owners are arrogant enough to think that with the age of the internet, we as consumers are stupid enough to pay for ad laden content. Hulu is even on record for pleading with ABC to NOT launch their free application on the iPad that gives users access to recent, quality content without an added fee.

Recently, according to ComScore, Netflix has edged out Hulu in traffic across their domain. While ComScore is not a greatly reliable source for accurate information, their trending data is a great gauge for how consumers are voting with their dollars. Why isn’t Hulu absolutely CRUSHING IT with a freemium model right now? Hulu could easily be syndicating their Advertisement laden content across as many devices as possible at standard definition, with an upsell of advertisement free and higher resolution content. In the Internet age, customers are voting that with ads the content should be free, and with a fee it should be high quality and delivered without advertisements.

Freemium is an amazing way to drive user base, upsell opportunities and other revenue generating procedures that continue to drive value for the consumers in exchange for their usage and/or their dollars.

As I mentioned in my HasOffers open house post, I had the change to meet Jeremy Schoemaker (better known as “Shoemoney”) which was a little different experience than I had anticipated.

First thing’s first: Online persona and Offline persona are usually two different things.

Shoemoney is a pretty damn genuine guy, and he doesn’t dance around the fact that his persona online is out to polarize popular opinion. What happens when you polarize an audience? You get debate, traffic and page views; in a word “genius”. Additionally, while Shoemoney knows that he is a idolized in the Affiliate Marketing / Blogging space to the point of minor rockstar-dom he can keep his cool and bullshit with everyone else.. because at the end of the day he is just another guy enjoying a little Captain Morgans.

The Shoemoney Team

I have been lucky enough to deal with the Shoemoney team before meeting them in person (@ddn @tighb @shoemoney primarily) and found that they take a no-nonsense approach to projects, people and business. In person wasn’t much different and I really hope that I have an opportunity to work with them again.

Have any of you met Shoemoney or his team? If so, what did you think?

http://www.shoemoney.com