January 14, 2001
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*** MarketingSherpa's MarketingToWebMarketers.com ***
Practical Marketing News for Agencies, ASPs & Suppliers to the
Web Marketing and Advertising Business
Dec. 14, 2001 - Vol. II, Issue 1
FREE subscriptions at http://www.marketingtowebmarketers.com
1. NEWS: Viral Campaigns, Engage, Gloom & High Hopes,
New Ad Exchanges, Marketing Contests
2. More Headlines
3. CASE STUDY: Lounge Lizard Agency Grows Billings From Zero
to Multi-Millions with Text Ads in Email Newsletters
4. SHOW REVIEW: Networking & Tears at AIM's Russian Tea Room
Charity Event
*****
NEWS
*****
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* Client-Side Demand for Viral Campaigns to Grow in 2001
Survey results from MarketingSherpa.co.uk, a newsletter for
British Internet marketers bore out the trend that agencies
have noticed on both sides of the Atlantic. As an account
supervisor at a major SF ebusiness consultancy told us, "Our
clients keep asking for viral campaigns because they think
it's going to be cheaper. It's a penny-pinching measure."
Damian Bazadona, Partner at Cyber NY Interactive, says, "Who
doesn't want it? Viral marketing is word of mouth on
steroids. But there's obviously no guarantee for it and
clients don't always understand that. It's not something to
turn to just because you don't want to spend the money on
other marketing." Now that viral is the buzzword of the
moment, we predict agencies will be forced to spend a lot of
time in 2001 educating clients about what viral marketing can
and cannot do. At the same time, viral campaigns hitting an
increasingly saturated world will begin to see declining
results just as banners did a few years ago.
Survey story:
http://www.marketingsherpa.co.uk/sample.cfm?contentID=1334
* Engage's HR Practices Could Cost Sales Down the Line
Engage's sales force has been reportedly "paralyzed" for the
last few weeks as word of the Company's fourth round of
staffing cuts within the past year spread. Many feel Engage's
HR department should take some of the blame for sales losses,
because communication about lay-offs was reportedly handled in
a way to maximize confusion and fear. One staffer (who
declined to be named) told us, "We got a press release first
thing in the morning saying 550 people would be laid off, but
HR didn't get around to calling people for hours or in some
cases days. So the sales force literally didn't know if they
had jobs. Nobody called to say, 'You're ok' for a long time."
Another sales staffer said, "Some people have been laid off
without their managers being consulted or even told
beforehand. This is not a people-friendly culture. I can't
imagine anyone here who is not looking for a job." (It's
worth noting both of our sources did NOT lose their jobs.)
While we have been fans of Engage for many reasons in the past
(especially their great show tchotchkes), you gotta wonder
what the company's HR department is thinking. Lots of dot-
coms are having lay-offs these days. The key is to handle
them in such a way that remaining staff morale remains high,
and departing staff, who might be clients someday, are still
fans of the company. The way this round of lay-offs has been
handled could hurt sales for some time to come.
http://www.engage.com
* Despite Industry Gloom, Internet Marketing-Related Companies
Receive Funding
Over the past month, news on the online marketing vendor front
has been schizophrenic to say the least. Engage,
MessageMedia, Advertising.com, LivePerson and LifeMinders
among others have made substantial staff cuts due to what
MessageMedia calls, "softening industry conditions" and
investor pressure to become profitable more quickly.
Related advertising-based media are also feeling the pinch.
Larry Chase of Web Digest for Marketers has reacted by
announcing pricing cuts. Andy Bourland of ClickZ has openly
proclaimed the need for e-publishers to find alternative
revenue streams ... quickly. Anne Holland, Publisher of
MarketingSherpa (our parent company) told us many i-ad
industry vendor's media buyers are still chewing over their
first quarter ad buys, "Usually people are starting to make
second quarter decisions by now, but in this marketplace
everyone's dragging their feet."
On the other hand, every single interactive ad agency
MarketingtoWebMarketers has spoken with in the past 60 days
has said business is booming. Most offline companies who
advertised online in 2000, have expanded the percent of their
budget they plan to spend online in 2001. Also, every day
sees hundreds more offline marketers with big budgets around
the world, begin to get Internet religion. So the agencies,
such as Carat, that serve them are opening new branches like
crazy.
Some vendors are also getting funded. Last week e-Dialog got
$10.5 million second round funding, while WebSideStory, Inc.
pulled in $7.5 million in equity. Now they just have to
handle the P2P and everybody will be happy.
* Yet More Ad Exchanges Surface Online
Just as Line 56 reports that the majority of B-to-B online
exchanges are sitting empty of orders, not one but three more
Web-based ad exchanges have surfaced:
1. EngineHouse Media, an Internet advertising company, has
launched AdOctane, a site where media buyers can receive ad
placement quotes from over 300,000 online and offline media
properties. EngineHouse originally developed AdOctane for its
own media buyers to use. http://www.adoctane.com
2. Cuica, an e-advertising infrastructure company, launched
CuicaExchange a "dynamic online advertising marketplace."
Cuica claims the marketplace already has "thousands of
outstanding deals" just waiting to be snapped up by media
buyers. http://www.cuicaexchange.com
3. AdOutlet, who've "revolutionized" the media buying industry
since 1998, now allow cable TV, TV and radio media sellers to
private-label AdOutlet to sell and manage inventory more
effectively from their own sites. http://www.adoutlet.com
Are any of these systems better than the rest? And, how long
will these privately-held companies be willing to hold out if
sales don't come rolling in? We don't know. We do think,
however, that being a media buyer just got a lot more
complicated.
* Agencies Rush to Get Entries into Contests
Yes, it's that time of year! Agencies and Web developers
around America are filling out entry forms for Best of
contests. Top two this week:
2001 i.merchant Awards -- run by Catalog Age, this contest is
open to any online merchant site that's been in continuous
operation since Jan 1, 2000. Deadline to apply is Jan 26th
2001. http://www:catalogagemag.com
7th Annual Tenagra Awards for Internet Marketing Excellence --
it's kind of amazing to see "7th annual" in relation to this
industry, huh? Deadline to apply is Feb 20th 2001 at
http://awards.tenagra.com
*****
MORE MARKETINGSHERPA.COM HEADLINES
*****
* SPECIAL REPORT: Top 10 B-to-B Internet Marketing Tactics That
Worked Best in 2000
http://www.b2bmarketingbiz.com/sample.cfm?contentID=1300
* How Moreover Got 100,000 Web Sites to Carry its Headline
News Service
http://www.contentbiz.com/sample.cfm?contentID=1327
* Brian Hecht Talks about Being a "Post-Bubble Dot-Com CEO"
and What's Working for eNews
http://www.contentbiz.com/sample.cfm?contentID=1326
* Ameritrade Plans to Slash Ad Spending for OnMoney
http://www.financialmarketingbiz.com/sample.cfm?contentID=1323
* Special Report: Best Practices in Internet Marketing to
Small Businesses
http://www.marketingtosmallbiz.com/sample.cfm?contentID=1309
* Archives of past MarketingtoWebMarketers Issues:
http://www.marketingtowebmarketers.com/archives.cfm
*****
CASE STUDY: Lounge Lizard
*****
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* Interactive Agency Lounge Lizard Gets 4-5% CTRs on Email
Newsletter Text Ads
CHALLANGE: Ken Braun literally started his interactive ad
agency, Lounge Lizard Worldwide, while commuting back and
forth on the Long Island train to his old Creative Director
job at iXL. He says, "I built it from nothing working on my
laptop, an hour and a half each way every day." As a self-
funded start-up, Lounge Lizard needed a highly economic way to
get the word out.
CAMPAIGN
Braun immediately invested in text ads in email
newsletters. He says, "I combined direct response copy with
Madison Avenue copy. Then I tested sponsorships in targeted
newsletters that people looking for banner designers read.
Then, every single dollar I made, I put back into
advertising."
Braun's text ad advice: "Each sentence is a headline, a direct
response headline. You're not just rambling about your
services. You can't lose them at the third line if you only
have six lines! So you have to make that first sentence
intriguing enough to read and to go to the second sentence,
and so on. I also try to use teasers. For example one ad
started, "Your ugly Web site is scaring customers away -- get
help!"
Initially Braun bought space in newsletters such as BannerTips
and WilsonWeb's Web Marketing Today that smaller clients would
see. As his company grew big enough to handle larger
accounts, he changed media buying patterns. He says, "In the
beginning we were doing banner ads for a couple of hundred
dollars. Now we have bigger talent, so we moved the
sponsorships to a bigger audience. We're thinking about
testing Industry Standard, Business 2.0 and MarketingSherpa
where you'll reach people building half million dollar or more
sites."
In order to supplement text ads, Braun also tested a broadcast
campaign to YesMail's opt-in lists, search engine
optimization, a booth at an Internet World show and banners.
RESULTS
Braun's direct response text ads have consistently
pulled up to 5% clickthrough rates -- about five times the
B2B industry average. His best performing banner, which read
in large red type, "ORGASMIC BANNER DESIGN" got a 16% response
rate its first month and continued to pull strong CTRs for
more than a year.
The Company's other marketing tactics, with the exception of
search engine optimization, were less successful and have been
discontinued. Braun says, "I don't think YesMail's email
lists of people interested in Web marketing were real decision
makers." He adds, "When you have a booth at Internet World,
you just get solicited by the other salespeople there."
In just two years Lounge Lizard Worldwide has gone from being
a commuting-time hobby to a multimillion dollar company, with
name brand clients including AOL, American Express and Disney
Interactive.
The Company's site gets about 5,000 unique visitors a month,
of whom about 70 are Web marketing decision-makers with
serious interest in services. Braun notes, "What's really
funny is half of the enquiries are not from the US. The
Middle East is particularly hot right now."
http://www.loungelizard.com
*****
SHOW REVIEW: AIM's Russian Tea Room Charity Evening
*****
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* Networking & Tears at AIM's Russian Tea Room Charity Event
Proving they're big softies after all, more than a few of
Internet advertising players at AIM's Russian Tea Room event
last week, teared up at the National Center for Missing and
Exploited Children's announcement that the industry "has
increased the recovery rate of children from 62% to 93%."
Then everybody went back to doing what they had really come
for -- networking their brains out. An unusually high number
of the 100+ attendees were from outside the New York area. We
overheard a lot of people at the bar making comments like,
"What time's your plane tonight?" Beth Ketzner, President
NameBank International, told us she'd come up from Baltimore
just to attend the evening's event.
The crowd was definitely older, and more serious about getting
business done than you would find at a New York New Media
Association meeting or typical trade show party. One attendee
told us, "There's a refreshing lack of Prada and BCBG shoes.
It's a healthy mix of senior managers. People are not here to
get tanked. They are here to do business."
In fact, FuckedCompany.com Founder Philip Kaplan (aka "pud")
was just about the youngest person in the room.
Interestingly, although our friends in the press pool
converged on him immediately, few other attendees seemed to
know who he was.
For you food hounds, be very, very sorry you missed this one.
We're talking filet mignon, caviar, smoked salmon and mashed
potatoes spiked with horseradish (much tastier than you might
think.)
And yes, the Tea Room looks great after its recent renovation.
Definitely a location you should consider when next planning a
corporate party. Lots of red velvet, hundreds of candles,
funky stained glass patterns on the ceiling. Plush baby, real
plush.
http://www.interactive.org
http://web.russiantearoom.com/
*****
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