Diorex

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.

After much thought and consideration I have decided to resign my position at Yahoo. I know I never applied, nor was I interviewed or hired, but eventually everyone who is anyone at Yahoo must resign and I just wanted to get out in front of the rest of the crowd. The mass Exodus of Jeremy Zawodny, Jeff Weiner, and now the Founders of Flickr within days of the Google announcement is the sign that the most senior people across the board are voting with their feet - they have either made their money already and want to work on more fulfilling projects or they realize that Yahoo is never going to make them rich.

Seth Godin has written about sometimes quitting is the right thing. We teach our kids not to be quitters, but the honest truth is that you sometimes must quit something that is holding you back before moving on to even greater heights. I suspect that Yahoo is aggressively holding back its top talent and now is about to have a huge vacuum of talented leaders just at the time they need them most.

As I was reading through the SEC posting about the Google Yahoo search deal, (Nicely summarized at TechCrunch) I ran across one tidbit I find very interesting and something Google may not have thought all the way through.

This line in particular: “Yahoo! also has sole discretion to decide on which pages to display ads provided by Google”

Any advertiser with a grain of metrics turns off the Yahoo content network due to the huge volume of non-converting clicks.

Google is also known to allow partners to serve search ads in some really strange places as search not content.

So if Yahoo wanted to hurt Google - My quick read saw nothing that says Google has a buyout right - I would just serve search network ads to the Yahoo content network.

Advertisers would start seeing their Google returns diminish greatly, Google makes it almost impossible to opt-out of specific advertising partners, and most advertisers do not even know that the search network is an option that can be turned off. If in mass, advertisers lowered bids by even 5%, that would take a huge chunk out of Google’s revenue and stock price, almost certainly triggering some articles about how Yahoo seems to be a better ROI for advertisers etc.

Probably will not happen, but what if…

Yahoo tries hard. So does the cheesy guy at the bar, does not mean either of them ever scores.

We recently ran the Yahoo Tune-Up that was available in one of our accounts. (SERoundtable talks a little about it here.)

This was a totally wasted effort, it was so off base that we just had a good laugh and moved on.

For instance:

This is obviously not ready for primetime and shows just how in touch Yahoo’s engineers, business managers and customer service people fail to even understand their own product.

So early this week, we noticed on a few of our most profitable terms that our impression volume went through the roof. Like 10x the average daily volume and 8x the highest daily volume in the last 6 months.

On these keywords our clicks went up by approximately 50% of previous levels and our sales volume did not move one iota. Meaning that on 1/3 of our clicks we were getting zero conversion!

So we call up our friendly Yahoo account rep. Who is in an ‘important meeting’ but breaks away to say “fluctuations can and will occur” then says she will look into it. 6 hours later (after we have essentially turned off our account because cost per sale is higher than our total revenue) she dashes off a quick one line email to the tune of “I am having our click quality team (just try and get any of your account reps to say the word fraud, honestly try) look into the matter and they will have an answer within 5-10 days, but our click detection algorithms are the best in the business (another good one, that is like being the best looking girl at the over 300 pound Weight Watcher session).”

Whoa…I was not even terribly concerned with the fraud, I will take the refund, but I just wanted to alert them to the problem of someone figuring out a way of their best in class system.

The next morning we call Yahoo again and get sent directly to voice mail, we then go to her manager who will “call you back as soon as possible”. Finally come late afternoon we call the standard 888-Yahoo-SM phone number and finally speak to someone on our 3rd call who apologizes profusely and goes and gets the manager to call back. The 2nd person we spoke with actually said “that is not my problem” the 1st person said she would get it fixed in 15 minutes and call us back, an hour later the extension she gave us is a dialtone and noone has even heard of her. (Seems like the penalty for trying to help someone out at Yahoo is pretty severe).

So I finally get the manager on the phone. He of course apologizes and says this is not how customer service is supposed to work and that this will be used as a training example, blah blah. Yet he actually says that 5-10 days our rep quoted us is probably the low end of the scale and that with the holiday coming up next week that we probably will not hear anything until afterwards.

He then goes so far as to say, it is funny none of the other ”major” accounts in your vertical have noticed anything. I am tempted to explain why, but decide it does not matter and is not worth the efffort.

The bottom line is that he is totally unable to help us. He is apologetic, but really does not seem to care.

So we are left to our own devices. We ended up putting their Yahoo analytics on a single high volume keyword to track referrers. We accidentally forgot to properly install the conversion pixel, because that is none of their business. Less than an hour later, we had a single referrer that had more than double the volume from Yahoo itself, without so much as a click through on that page.

That does not seem like something that should have actually been rocket science for Yahoo to figure out. 10x impressions was the first start, how hard is it to isolate impression volume by IP and flag suspicious volume, especially when an advertiser brings your attention to it.

So based upon our experience with Yahoo who did not think there was a problem, we decided not to alert them to the non-problem url, we figure in a few days the ‘major players’ who don’t monitor their account nearly as closely as we do will see the decrease in conversion and raise bloody hell. Our result was almost immediate, conversion rate recovered and impressions fell back to normal levels. Problem solved, except for the problem.

Hey guys - a little help please.

Yahoo is rolling out the ability to Block Domains in the near future. The only problem is that we are having a hard time getting visibility into the domains we might want to block.

Google has long had the &site={placement} tag that will pass the referring domain so we could track conversions.

Something Yahoo does in their redirects keeps us from knowing where a huge percentage of the Yahoo traffic originates from. I’m not the servers guy and I did not understand the Swahecian Tech dialect he spoke trying to explain the issue.

We have of course asked our Yahoo reps who are normally pretty helpful, but they seem to be clueless here.

Does anyone know of a tag we can put into the landing page URL that will allow us to collect the referring page in Yahoo?

Last year, I was invited to a Yahoo summit called Meet the Sponsored Search at their HQ in Sunnyvale, which was a first look for Top Advertisers and Company Reps to see the product. It was a fairly intimate setting, with maybe 150 guests, 50 or so Yahoo people, many of whom were at the VP level or higher.

They solicited feedback (and apparently ignored much of it…) about various products and introduced us to lots of Yahoo executives.

I remember thinking at the time that Jerry Yang was personable and outgoing. He seemed approachable and knowledgeable about the topic (no surprise), but in a non-technical way. At least the time we were in the room with him, he acknowledged that there were better ways to do things and that Yahoo had missed the boat after essentially having a monopoly on the technology to begin with. He seemed to grasp that they had squandered an almost impossibly large lead in the space, but that they were committed to getting those users back. Everything out of his mouth was polished and sincere. He looked like a billion dollars and acted like it as well.

We had lunch with Terry Semel and he spoke to the crowd of advertisers in a way that made no sense to the assembled group of power marketers. He said things like his engineers had come kicking and screaming about the need for panama and made him authorize this change. The next thing out of his mouth was stating that the New Sponsored Search (2 very conspicuous words we did not hear from a single Yahoo employee all day - Panama or Google) was the #1 engineering priority for the company.

It was almost as if he had been handed some cue cards on hot buttons he needed to hit. there was no passion or conviction in his voice. He said what someone had told him we wanted to hear, but not very convincingly. Subsequently, he was invited to press the flesh with a few of us. This was an opportunity to talk to about 10 of his largest and most influential advertisers (all were major name brands as I recall) and he seemed bored and unexcited about his product. After he left us, one of the advertisers remarked offhand “It is almost as if he is being forced to do Panama rather than he sees the potential opportunity.”

The stark contract between the two personalities was striking. Terry Semel in his power suit being hassled to speak to his most important clients, looking bored and restless as if there was something far more important for him to be doing than interacting with them. Meanwhile there was the incredibly well dressed but casual and hip Jerry Yang, who just got it. Who understood that the people in the room were important to his company and that our feedback and ideas could help make the launch better.

I, for one, think Yahoo will be far better off under one of its original founders. I suspect that the engineers will once again run the company and that the suits will need to polish up the resume. More important, I don’t think Yahoo will feel like its number one priority will be in pleasing Wall Street and telling them what they want to hear. In a perverse way this is probably the best thing for the company. Focus on the users and let the revenues and profits be secondary.

Yahoo is in the midst of launching its new Panama system. Without meaning to burst their bubble, I would like to point out a few things they have always done wrong that are not fixed going forward.

1. When is Search Marketing not really search marketing? At Yahoo you can bid on a search term that shows up as content. You have probably clicked on an ad that takes you to another page of just sponsored search results displaying Yahoo ads. The ad is usually on a tail keyword, yet the results being displayed are without fail on the highest paying keyterm. These ads are delivered as sponsored search, not as content. At least with Google, I can bid less through the Content network on the MFA sites. Here I am stuck paying top dollar for a not very well targetted “Search” ad. Example; User types: “Product Keyword” warranty - the ad being displayed says something like - “Get Warranty Information…”, user clicks, then comes to a page that says “The best results for Product keyword Warranty are:…. So user clicks the first item, thinking that is the best result. Only problem is that the ads shown are the sponsored results for the much higher paying “Product Keyword” It is a bad user experience, and a bad advertiser experience, because the original query and intent of the user was not commercial in nature and therefore unlikely to convert….

2. So I find this crap arbitrage site where I never want my ads to show, at least in Google, I can opt out of showing my ads on that site, since I understand that they are probably driving lots of deceptive traffic. At yahoo, I am stuck paying top dollar for the crap traffic. Let me opt-out. Yes I know Google has domain parking that I cannot easily opt-out of, but that is a much smaller issue and something I wish they would fix as well.

3. Content - I was invited to Yahoo’s “Meet the New Sponsored Search” conference in Sunnyvale back in June along with 75-100 of Yahoo’s biggest advertisers and agencies. They pulled out the big guns, Jerry Yang, Terry Semel and lots of other Yahoo big wigs talked to us. At one point, one of the Yahoo’ies asked how many were using the Content Network. One hand went up, and he qualified that by saying the advertiser made him do it. Yahoo has damn near the most powerful portfolio of internet sites, from jobs, to mortgages, to finance, to entertainment, to mail… and any number of other well trafficked pages. Yet, yahoo refuses to allow advertisers to target this absolutely fabulous traffic without adding in the 99% of other absolutely horrible crap. I would love to have my adds show on some of these Yahoo branded pages, but it is an all or nothing with them. At least Google allows me the chance to say I just want Google search traffic, and I do not want all the 2nd tier aggregators to display my ads.

4. Fraud - I can think of numerous times when a keyword went from having 3 clicks in 5 months to getting 700 clicks in a single day. Yahoo’s standard response is that “traffic fluctuations, can and will occur, and I should protect myself with a daily budget.” NO NO NO - Fraud does occur and you need to pull your head out and admit it when it does. I have never failed to get a courtesy credit after much hair pulling. How much other small scale fraud occurs without me catching it? I have never once gotten a courtesy credit without having brought it to their attention. My CPC is significantly higher for similar positions in both MSN and Google, mostly because it converts at 2-3 times the rate. Get rid of the fraud and i will bid more for the traffic. You get to keep 100% of that money on the traffic I want anyway. I love MSN because the fraud is almost ZERO!

5 Editorial - a competitor and I can both have the exact same product, with essentially the exact same text on a landing page, yet they can bid for terms that I cannot. Not because it is a protected term, but because the editor that saw one ad thinks differently than an editor who saw the second. In one of my first very big campaigns, I sent 40,000 terms and got 10,000 rejected. Over the next 3 months I got all by 800 listed. I did not do it by rewriting landing pages or ad copy, I just re-submitted the ads every 2-3 weeks and got a few hundred in each time. Same ads, same landing pages, different results. Panama is not making this any better, I just get some traffic for 2 days while they wait to disapprove my ad. I hate this system, but at least the other way made far more sense. If I can point to a virtually identical ad, I should be able to get mine approved (or the other removed). Just make it a fair playing field.

6. The Promise - Yahoo is like the little kid who keeps promising he will behave better. After awhile you just stop believing him. I know that Panama is going to good for my business and just about anyone else who reads this because we understand Google. That does not mean Panama could not have gotten Yahoo back in the game. They are a second tier player and the last place I roll out any new campaign. Panama is just sticking a finger in the damn. The advertiser money is still going to flow elsewhere.

As I was about to share an opportunity I found last week in Overture vs Panama on bid strategy, I noticed that the bid prices in the Overture Tool are no longer being displayed.

If you are bidding on a keyword currently, you can now see a range in the old interface, just like in the new one. Oh well, guess noone would be interested in the hole I had been using since it is no longer available.

This makes researching new niches quite a bit harder. Now you might only see the number one brand name guy who is willing to pay $6.00 a click, but you have no idea if number 2 is $5.99 or if it is $.25 per click.

I guess I knew that this gravy train was coming to an end….I am gonna miss this data.

I have yet to see anyone really mention this on other blogs, but the Overture search suggestion tool is replaced in the new interface. It is now much more Googlish, which I get very little use out of. It provides trends and graphs, but does not provide any numbers for estimated searches.

I think anyone using Overture for search stats without modifying them in some way is crazy, but at least the numbers were there and fairly easy to get at for discussion purposes.

I have used some of the other “pay” tools, and have yet to really get a feel for a multiplier on those numbers. With yahoo, experience and testing had shown me how to estimate the potential search size of a niche.

I have converted and non-converted accounts, and I still log into the dead non-converted account to see the search numbers. I am not at all looking forward to the day where I cannot go type Justin Timberlake into overture and see that 5 million searches were done for tickets and XXX done for his name, and XXX for his new album etc. That data gives me ideas. Ideas turns into revenue for Yahoo, even if it does not make me any money at all.

To me this is invaluable data in deciding which niches are deep enough to pursue. Yahoo! I would pay for this data (if it was accurate, but that is another topic).