AOL is betting on an acquisition as a play to drive hits through free media. AOL paid $315 million for the Huffington Post, this represents a huge payday for Arianna Huffington, who owns a significant stake in the Post.
The Huffington Post is yet another in a long list of specialist websites that AOL has acquired recently. Huffington is by far the largest and could serve to bring a very large audience of news readers to AOL.
Arianna Huffington explains the merger this way, "By combining HuffPost with AOL’s network of sites, thriving video initiative, local focus, and international reach, we know we’ll be creating a company that can have an enormous impact, reaching a global audience on every imaginable platform."
So the real question is, will AOL truly leverage this and its other recent acquisitions into a viable patchwork of online content? Or will it simply write off yet another huge loss a year or two from now?
Tuesday, February 15, 2011
Monday, February 7, 2011
Social Media ROI
How do you calculate ROI for marketing dollars invested in social media? The author explains the process like this:
1. Describe the possible investment
2. Sketch out the rationalze
3. Develop a marketing/sales funnel
4. Hypothesize how the initiative might work through the tunnel, resulting in an estimated range of dollars produced.
5. Share ROI information with decision makers
6. As the initiative progresses, assess how well the step 4 hypotheses is supported by reality
The alternative to this approach is to use the "gut feel" method used by as many as two thirds of top managers. What I find interesting is that this six step "process" is doing little more than applying a process to the "gut feel" method, with a single exception. Step 6 calls for a reality check to ensure that ROI is what was expected so the initiative can be quelled if not working.
The single best take-away from this article is the point that now is the time that marketing departments should be experimenting with the different forms of social media to build meaningful metrics that may be used in the future to determine what should be invested in social media.
1. Describe the possible investment
2. Sketch out the rationalze
3. Develop a marketing/sales funnel
4. Hypothesize how the initiative might work through the tunnel, resulting in an estimated range of dollars produced.
5. Share ROI information with decision makers
6. As the initiative progresses, assess how well the step 4 hypotheses is supported by reality
The alternative to this approach is to use the "gut feel" method used by as many as two thirds of top managers. What I find interesting is that this six step "process" is doing little more than applying a process to the "gut feel" method, with a single exception. Step 6 calls for a reality check to ensure that ROI is what was expected so the initiative can be quelled if not working.
The single best take-away from this article is the point that now is the time that marketing departments should be experimenting with the different forms of social media to build meaningful metrics that may be used in the future to determine what should be invested in social media.
Transparent Marketing
I thought it interesting to write a little piece on Domino's Pizza and their somewhat recent (early 2010) transparent marketing campaign. Domino's realized in early 2010 that their pizza tastes like garbage, had for a while and they were seemingly the last to know.
Domino's posted a loss of $67 million in 1991. By 1996, through sweeping changes, Domino's was back on track with earnings over $50 million on revenues of $2.8 billion. For the next decade or so Domino's slowly lost market share to Pizza Hut and Papa John's.
So in early 2010 Domino's took on a transparent marketing strategy to tell everyone how bad their pizza is and how they're working to make it better.
This is a good example of shifting your marketing away from purely an advertising strategy to more of a marketing and public relations strategy.
Domino's posted a loss of $67 million in 1991. By 1996, through sweeping changes, Domino's was back on track with earnings over $50 million on revenues of $2.8 billion. For the next decade or so Domino's slowly lost market share to Pizza Hut and Papa John's.
So in early 2010 Domino's took on a transparent marketing strategy to tell everyone how bad their pizza is and how they're working to make it better.
This is a good example of shifting your marketing away from purely an advertising strategy to more of a marketing and public relations strategy.
Tuesday, February 1, 2011
Cashing in on the Long Tail
I currently work for a Tech company. I started five years ago almost to the day. Our offerings at the time were largely ruled by network management for our client base. Typically we spent several hours a week onsite at the client to manage all things related to their technology needs. Our revenues at the time were largely driven by our engineers billing hours to the clients. This is a tried and true model that has endured for years for many professional services organizations.
In early 2008 we acquired a company that specialized in an offering called Managed Services (MSP). This was the start of our shift to cloud offerings and our first venture into a business model that was capable of venturing down the long tail. Today we are primarily and MSP as well as managing a Data Center that enables us to offer Cloud services to companies of all sizes from one and two person shops up to hundreds of simultaneous users.
I consider the small 1-5 person companies in the long tail for a tech company of our size. After reading The Long Tail I would like to see us expand our current offerings to include cloud based services that individuals could use. If we were to offer something like cloud based data backup or smartphone integration services to individuals this would move us into a much larger market. Automation of this entire process so that software could handles the entire purchase, setup and billing would enable complete electronic delivery and lower per unit cost to near zero.
In early 2008 we acquired a company that specialized in an offering called Managed Services (MSP). This was the start of our shift to cloud offerings and our first venture into a business model that was capable of venturing down the long tail. Today we are primarily and MSP as well as managing a Data Center that enables us to offer Cloud services to companies of all sizes from one and two person shops up to hundreds of simultaneous users.
I consider the small 1-5 person companies in the long tail for a tech company of our size. After reading The Long Tail I would like to see us expand our current offerings to include cloud based services that individuals could use. If we were to offer something like cloud based data backup or smartphone integration services to individuals this would move us into a much larger market. Automation of this entire process so that software could handles the entire purchase, setup and billing would enable complete electronic delivery and lower per unit cost to near zero.
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