Diorex

This post has nothing to do with internet marketing other than it might teach some lessons on user experience and choice.

I travel quite a bit and am a little cheap but like to stay in nice hotels - my solution for a long time has been Priceline.com. I get to select an area in the city I am visiting and then a star level and then choose my own price.

Through some experimentation I have found that if you look daily starting about 2 weeks before a trip you can often get the price you want at the star level and location you want within about 3 days. Waiting until the last minute actually seems to cause the price to go up a little.

So I am in Chicago every other weekend it seems and I have gotten into the routine of using Priceline to stay on Michigan Avenue close to my destination. Just counted and I have now stayed 15 times in the last year and never paid more than $69 a night for my hotel choices - typically getting Hilton and Hyatt type hotels.

Anyway over time, I have found some hotels that just dont work for me - my aircard is in a dead spot or the fitness room is crap or they want $18 for me to workout or they dont have a desk or in one instance the star level was just wrong. I have also found some hotels that are perfect for what I am looking for - maybe free wifi or closer to my destination or really nice free workour facilities.

Now I realize that I am not the typical priceline user since I tend to stay in the same area repeatedly and thus see a larger sample than the normal user.

Some suggestions I have for Priceline to improve their service:

Allow me to establish criteria I want - Free Wifi, Free Workout Room (maybe even a star level on workout room), Only a king bed, indoor pool, etc.  If I am bringing my kids, I require 2 double beds and probably an indoor pool, if it is me and my wife on a weekend getaway I want a king…  Right now I get stuck with what I get stuck with - and since I am paying a low rate, the hotels have no incentive to accomodate my change request. This variability keeps me from using Priceline on certain trips and almost certainly has first time users left unsatisfied so that they will not return. In most instances, if i have certain requirements I am happy to pay a little more to get what I need. A bargain room that does not meet my needs is a bad customer experience. Ultimately it means that I cant use Priceline when I would…

Allow a radius request around an address - In the spring I am ok with being a mile away from where I am going and walking - it is actually a nice thing. In the dead of winter, I end up taking a $10 cab ride to and from the hotel - with a radius search I might prefer to spend that $20 a day on lodging but be very close to my destination. As it is now, I can spend more and still be a good distance away - so I have no incentive to spend more - allow me to target especially in the big cities like DC, NY, Chicago, Miami etc…

Allow users to opt out of getting a hotel ever again - I was getting a consistent great rate on 3.5 stars hotels (which are usually suite hotels like Hilton Garden or Embassy) until one time I got a hotel that was at the extreme edge of the zone, was 80+ years old, the rooms reaked of smoke, the workout facilities were rusty, the room temparture was a choice of 60 or 80, it was off the beaten path and had no cab stand etc etc… A really bad experience in what had at one time been a 4 star hotel but was now categorized as a 3.5 stars - my rating would have been 2 stars. So in essence a single bad experience in a star level I was getting excellent value out of has forced me to remove that zone and star level from my bidding because I would not want to risk getting that experience again. If they allowed users to proactively opt out and provide some reasoning, they might be able to better filter. Sure they get paid either way, but one bad experience is probably enough to prevent an average user from returning. Maybe you have already lost the first few customers, but no reason to continue the cycle by not allowing some sort of filtering.

If Priceline would allow the user a little more control - they would get even more of my business. As it stands now, I cannot use them on trips with the kids, or even romantic weekend getaways with my wife, it is not an option for family vacations, or anything at all where I am overseas. So I typically end up paying 2-3x what I would have paid on priceline to get what I want. I am ok with that, but I would love to pay priceline a premium over the lowest possible rate to get what I am looking for.

Imagine that i could get the same room by pure random chance like I frequently do for $70 a night, but because I have specific needs (wife travelling with me and we want a king) I am happy paying $85 to know I will get what I want. Priceline gets much larger margins (that room is often available for $70 - now they are just charging more for it) and has much happier customers who will use them over and over again.  Their hotel partners are probably also more pleased because they have fewer disgruntled guests and more guests in general because people now feel more comfortable using priceline knowing they have some control over what they will get…

I am mostly a technology idiot which is why I have never bothered to change my profile layout or even to spend 5 minutes fixing my feed button - which to my knowledge has never worked. Anyway, I think it is now fixed and would appreciate anyone who managed to figure out how to subscribe the old way to change the feed so I can see how few people are out there reading my ranting and raving.

-thanks to Stephen H. for the pointers on how to fix this - which was almost idiot proof

Could not figure out how to do comments so that might not get done unless someone can point me in the right direction…

In response to some recent Twitter comments (@Diorex if you care to follow along at home…) about trying to disintermiediate networks and working directly with the advertiser I was surprised at the number or DMs, IMs and Emails that I received from people about how they are having a hard time finding contact information for the offer they are running.

This got me thinking… Advertisers are in the business of finding affiliates. If they are making it tough to find and contact them it really makes me question why?

If an advertiser is hiding behind a private whois, is unwilling to post an email or phone number for customer service or will not give a customer service call center a contact number for legitimate queries - what are they hiding from?

Sure lots of advertisers are afraid of the FTC because they are running offers of questionable legality - but the FTC can pierce these minor veils almost immediately if they want - going after payment processors or server hosting facilities or tracing credit cards or other financial transactions to the source. And if an advertiser is seriously worried about the FTC, then why aren’t you? You think if the FTC knocks on his door that you are gonna get paid?

Other advertisers try to keep a low profile because they don’t have a real business presence. Setting up an office, getting a phone and having someone to answer it are pretty basic principles of those serious about running a business. Some successful internet businesses are run out of garages and off cellphones, but not that many. I can see not being terribly proud of working out of your mom’s basement but as an affiliate why would you work with someone who is unwilling to make even the slightest investment in their business? What makes you think they care at all about yours?

The main reason I see advertisers hiding is because they are up to no good - they dont want people to know they are the same guys who skipped out on another network and owe hundreds of thousands. Just rebrand, relaunch and you are on your way again. Every successful affiliate I know of has been screwed at least once by an advertiser not paying a network and then the network not paying them.

In essence the real question in my mind is why would you even consider running traffic and spending money investing in someone elses business if they are hiding or making it hard to have a business conversation with them?

Maybe there is a very legitimate reason an advertiser has for staying in the shadows, but for the life of me I cannot figure it out.

My favorite conference every year is usually Ad tech SF. Anyone else headed that way? Have a jam packed schedule but would love to meet up with some people. Drop me a message and I will try and set up a few meetings.

As internet marketers we don’t often think about the offline marketing gimmicks that have worked for decades. One of my favorite gimmicks has a new wrinkle which has me thinking about ways to take advantage of it - namely rebates.

I recently upgraded a phone and had to pay $50 with a $50 mail in rebate. We are all aware of how this works. A decent percentage of people dont redeem the refund or dont follow the directions or miss the mail in date and thus dont qualify for the rebate.

I went to wikipedia (everones source for useless stats) and found this:

Some redemption estimates

• BusinessWeek recently estimated a return rate of 60 percent. Some estimates have been as low as 2%. For example, nearly half of the 100,000 new TiVo subscribers in 2005 did not redeem their $100 rebates, allowing the company to keep $5,000,000 in additional profit. [3]
• PC Data in the Reston, VA estimates between “10 and 30 percent”. ^[19]
• PlusNetMarketing in Wilmington, DE quotes 80% [20]
• A representative in 2005 from The Marco Corporation stated“In some cases, we do have redemption programs that go as high as forty to fifty per cent, but generally it’s about one to five per cent”. In the same article, John Challinor, advertising manager for Sony Canada remarks that “The industry average is less than ten percent….and it can be as low as one percent. [21]
• NPD Group, a marketing firm, estimates 50% to 70%

My take on this data is that marketing groups with no insight into the data are estimating high, but companies that actually pay out the rebates know the real numbers, which is in the very low end of the range.

My experience is this - we had a retention problem on a particular marketing channel for Satellite leads - they converted to sales, got installed, but cancelled the service within the chargeback period costing me a lot of money. So I put in a $100 rebate for customers who mailed a photocopy of their 6th bill to me (what got me past chargeback stage). We only offerred this to customers from one marketing channel, but here is what happened:

• My Conversion rate went up as people thought they were getting a free triple rebate (at the time there was a $50 rebate from Dish) - so I got more sales each cheaper than before from the channel
• My retention rate went way up - chargebacks on these customers went from 12% to 5%! so this solved the problem I had.
• Out of about 700 customers on this program - I set aside $30,000 for claims (roughly 40%) and only paid out about $2000 in claims. So 20 out of 700 (under 3%)claimed a $100 rebate.

Any one of these 3 things would have been a huge win for me, but altogether this was much more than I expected. I dont exactly remember why we stopped doing it, and by the time I knew it was a huge winner I had left the dish business.

So fast forward to today’s mail… I get my ‘rebate check’ in the mail and it is actually a bright orange prepaid ATT gift card. No idea how long they have been doing this, but this is an awesome idea. You see a lot of gift cards end up expiring before the balance is used, or someone spends $44 on the card and then forgets about the balance or throws the card away or just loses the card. Mine is good for 90 days and then the balance belongs to ATT.

So take the fact that say maybe only half (maybe considerably less) of people redeem the cards, then say 10% of the money rebated is never redeemed - source is old newspaper article. So now ATT only has to pay out $25 in gift cards per sale, and then only $22.50 of that is actually spent! - what if the real numbers are like 10% redeemed and 20% unspent - that works out to $4 in cost for a $50 rebate!!!

My thought is how can i use this in my marketing? If I am already charging, maybe charge more and offer a rebate on the difference. What about a get this product (a $XX value) for free? or a buy 2 get 1 free special? or advertise a ridiculously overpriced product for a ridiculously low price - say a $5 gizmo with advertised price of $1.00 and charge $19.95. Lots and lots of choices.

To do this you will need to have the point of sale relationship - affiliate probably wont work. I suspect there are also different laws in different states you might need to research, but the long and short of it is that thinking outside the box on this is a way to make an otherwise moneylosing program a winner.

What other old school offline marketing can/should be used online? Still trying to figure out how to put a “free prize inside” into an online campaign.

I just learned that our 125th employee is starting tomorrow and that really made me stop and think about some of the things that helped us grow so fast (as well as some of the obstacles and roadblocks).

A few things that I think every business needs:

Team: No single person can scale to where we are, it takes a team of managers and visionaries. All of whom must have their own skills and talents, someone to pay the bills, negotiate the lines of credit, a lawyer to negotiate contracts, tech team to build the wild and crazy ideas that the marketing folks come up with, as well as a strong character to hold the whole ship together and chart a course. One of the major differences I see between lots of affiliate marketers and what we do is the existence of that team.

Focus: Our periods of the most rapid growth have been when we have focused on a specific objective. Launch this project, pursue this oportunity, fix this problem. Whereas when we get in phases where the team is working on lots of different project, our productivity suffers. With more people we can now cover more than a few projects at a time, but by my count I am working on 9 major projects right now, and none of them are getting the proper focus as if we only had 4 or 5. One of my shortterm goals is to put some of these on the backburner and get back to focusing on specific items.

Long Term View: My biggest problem with most affiliates is that they seem to have a flavor of the month - recently it has been Acai and Grants, in the past it has been ringtones or MFA sites or arbitrage etc. Sure these opportunities are lucrative and the cash spends just like everything else, but these are quick hits that often last only for a few months. One criteria in our decision making has always been how does this help grow the long term valuation of the business.

Scale and Scope: We do not put resources into projects that cannot scale, for us 6 figures a month is about the bare minimum we would accept, and then only on a developmental project. If a project does not have the potential to do at least that within 90 days, then we move on. Similarly with scope, we dont want to pioneer brand new business models or new projects that do not play on our core competencies. Just because I can build the next great iphone/twitter/facebook application does not mean I have any advantage there. We know we have an edge when it comes to analytics, testing, and paid search - so that is where we should be investing our time and effort.

Diversity: A few years back Google was something like 70% of our profit, with the other 30% pretty much Yahoo and all of the revenue coming from a very small number of suppliers. We made it a focus to get diversified, today Google is our 3rd largest marketing channel. We have signifcant revenue streams from multiple suppliers and we have back up customers for all of our major verticals. Still working on further diversifying, but eventually all middlemen get squeezed and so we have worked really hard not to be in the middle whenever possible.

Own the mission critical stuff: we have never considered outsourcing any of our tracking or analytics, we built it from the ground up to meet our needs. We dont outsource our creative or any of the key IT functions, it costs more to have them in house, but well worth them knowing our systems inside and out. The contrary is true as well - we could build a better email delivery system, or better call center etc, but we get 95% of what we need from a vendor without the fixed costs. Basically if it is proprietary and critical we build it otherwise we outsource. Also when we build, we duct tape it together first and then gold plate it later. Nothing ever ends up where it started on the whiteboard.

Perspective - of late I have been killing myself with busines travel and work. I am logged in 24/7 and was not taking time for myself or my sanity. I have a great team working for me and they can pretty much cover for me and make 95% of the decisions without my input and importantly they know when they are over their head. I am going to start stepping away and recharging my batteries more frequently. I am going to every continent other than Africa and Antartica in the next 4 months, so hopefully that will offer some perspective. In the past when I have stepped away, I have come back with a burst of creative energy. Letting go is never easy, but it is often necessary.

Kind of a random rambling post, but hopefully their are some nuggets in here.

I have tried to use twitter and just dont get it… I update my Facebook status pretty much constantly, yet I never remember to update Twitter. I dont really follow anyone and dont understand what that means… Maybe I am just old and uncool, but does anyone have a Dummies Guide to Twitter blog post or somesuch.

I keep hearing it is the next big thing and dont see it, which tells me I am not using it correctly.

twitter.com/diorex if you want to hear the inconsistent bitching and moaning I do on twitter… Who knows maybe someone will throw up a good link on ways to use it and I will make it worth your while.

Had an issue with Google today that pissed me off so much, I decided to blog about it so that others can avoid the problem.

Basically we had a server issue this morning and while everything was being sorted out, we went to all of our PPC campaigns and paused the traffic so we were not paying for clicks that were gonna go nowhere. Google makes this very easy, you can click the little white button under pause on the summary page which selects all of your campaigns and then click on pause and it is basically a quick way to pause lots of campaigns.

Once the problem was fixed we reversed the process by clicking the white button and clicking on resume, quick 30 second restart to the account.

About an hour later, one of my analysts noticed that an ad campaign that we had not run traffic to in over 2.5 years was getting clicks. We then saw that half a dozen or more of our Deleted campaigns had somehow received clicks and impressions - one campaign at almost $10 per click. To make it worse, our tracking link scheme had changed and all of these clicks were either going to dead pages or to websites we dont even own or have relationships with anymore.

We quickly paused all of these campaigns and sent a note to our Google reps letting them know about the problem with their system and asking for a credit for the $3200 or so in clicks we got on these deleted campaigns due to their system error.

A few hours later, we got a nicely worded note that said in the event of “user error” Google would offer us a one time credit of half of the problem.

Hold on a second - User Error? From the campaign summary screen the status of each of these campaigns reads in big red letters as it did before, during and after the issue - DELETED, from the ad group summary screen each adgroup had a status of “Ad Group Deleted” once again in red letters, and from the individual adgroup pages, right next to the ad box, it once again said Deleted in red letters. So on three screens I see prominently displayed in red a notice that the campaign, adgroup and ad are all deleted. I am very definetly not seeing user error here.

Google explained that since I had selected all campaigns and hit resume that they interpreted the request to apply to all ads in the entire account regardless of campaign, adgroup or ad status.

Quick aside on Webster’s dictionary definitions of certain words -

Deleted : to eliminate especially by blotting out, cutting out, or erasing

Resume: to return to or begin again after interruption

The first word clearly implies permanent, the second clearly implies restarting after a break (which could also be considered to be a pause).

Google does not allow users to actually DELETE a campaign, despite flagging campaigns as such, in fact for their purposes there is little real difference between Delete and Pause.

The money means almost nothing, it was a tiny fraction of my spend with them today and will hardly affect my profits at all. The principle on the other hand means quite a bit.

Here is a company that holds itself out as holier than thou, yet at every turn seems to be willing to compromise its principles, which is a big part of the reason most advertisers I know are rooting for Yahoo, or Facebook, or Microsoft or pretty much anyone to actually compete with Google. They are a monopoly and act like one frequently.

In closing (and the reason for the post in the first place - other than to vent some frustration), how can you prevent this from happening to you?

First off find all the deleted campaigns or adgroups in your account, then go and change the maximum bid to $.01. That way if you accidentally resume something you have deleted you will probably get very few impressions or clicks.

Pretty easy actually but it should not be required.

They basically tricked us out of $3200 from in a few hours and who knows how much from others over time, by being intentionally deceptive about the function that is pretty universally understood to not mean temporarily. When was the last time you thought, I ought to hold on to this item in case I need it again, I will just delete it.

Have yet to really see anyone screaming about this, but then again I have not been looking that hard…

I was in SF this week meeting with both Google and Facebook and as a throwaway Google dropped the bomb that they are no longer allowing multiple domains in the same adgroup. Adwords Blog talks about it here.

What this means to the average affiliate marketer is that you no longer can test which Display URL (DURL) works best for you.

Lets take an extreme made up example of a dating site with the goal of a credit card sign-up.

If your DURL is FreeSex.com then you will get lots and lots of clicks which Google loves and thus your CPC will go way down but your conversion rate will be horrible since the DURL implies free when a sign-up is required.

What about a DURL of FatUglyChicks.com? You probably get very few clicks, meaning your CPC goes up, but someone desperate enough to click on that ad is probably pretty likely to convert since they have been somewhat pre-qualified.

This is nothing more complicated than an algebra problem - does lots of cheap clicks with a bad conversion work better than more expensive clicks with great conversion. As a marketer you really only care about the bottom line here.

This is an extreme example, but for a dating site there are literally millions of different possible combinations for URLs - some of which are naturally more likely to succeed than others.

Google used to allow you to test lots of URLs in a single adgroup and rotate those ads to get equal impression so that you could determine which URL worked best for your metrics.

The new revised version of the DURL policy now requires you to set up different URLs in different adgroups - meaning that even though you might be bidding on the same keyword that Google’s algorithm now decides your quality score and will not evenly rotate them and ultimately end up serving the ad that meets Google’s best interest.

Unfortunately this is short sighted for Google. I have a URL that is awful - no one would think it would win in a test, yet for some reason it resonates well with consumers and qualifies them and induces them to click frequently as well as convert - great combination.  Without testing, we never would have found this hidden gem that allows us to pay Google millions of dollars per month. Without testing, Google would have chosen a better clicking DURL and I would have never optimized my business - which ultimately optimizes Google’s business.

Any one else concerned about this change?

After my last post about the abundance of Google Cash and Obama Money schemes showing on Facebook, I had a really strange conversation with the girl who cuts my hair yesterday.

We were talking about what I do and then we drifted to Facebook and she asked the question - Can a normal person really make money on the internet like those ads say? My immediate response was “no, not really”.

I spent the next few hours thinking about this and came to the conclusion that a normal person is destined to fail.

My thoughts in no particular order:

• The average person does not have a few thousand dollars of risk capital to test with that if lost does not affect their standard of living
• The average person making money in the internet business might be a dumbass, but they are typically highly intelligent dumbasses.
• The average person has almost no technical acumen of how anything internet related works
• The average success on the internet failed many times before succeeding - I am one of the rare guys I know of who made the first website and domain I ever started work - most people give up too quickly to succeed.
• The average person is unwilling to learn the math behind testing as it is “too hard”
• The average person is probably unwilling to break out of their shell and push hard for a payout, white label, and other requirements to succeed
• The average person is not creative enough to find a new way to succeed - not saying you need the baility to draw, but rather the ability to think outside the box.
• The average person wants to be shown how to do something rather than figure it out - almost no one who buys ebooks makes any money - sellers maybe?

I am sure I had lots more thoughts/opinions about this, but as I write this I solidly believe that most of the people succeeding in the internet have traits that make them not the average person - not even the average person trying to succeed on the internet (put internet marketer in place of average person above) - intelligence, analytical ability, perseverence, critical thinking, and lots more.

To be honest, by definition a successful person is not average and thus someone who is average has the cards stacked against them from the start. For every 10,000 people who sign up for adwords or wicked fire or the Google cash system or buy a book on internet marketing - the vast majority never even had a prayer of success from day 1. Hundreds who did have a shot will fail out of laziness or stubborness or lack of capital etc. The few who do succeed were probably not lucky.