Show me the Money

Currently, looking for the money in social media marketing is like asking directions in a foreign land when you don’t speak the language and don’t know how the locals connect and communicate.

Social media is commonly defined as comprising “primarily Internet-based tools for sharing and discussing information among human beings.”

As an online marketer you want to hear about ad copy and conversions. Everyone – your audience, customers, and your employees – wants you to listen, connect, and collaborate. You want to control the conversation so people click. They want you to understand there is so much more – including profits.

Here are three models that are working and speak to business in terms it can understand – cost savings, marketing, advertising, customer service, and lead generation – as well as terms it may not yet understand like passion, heart, transparency, sharing, not controlling, and being there for your customers. These are business models that go beyond mere advertising.

Business Model 1 – Social Product Development

Why hire employees to develop new products when you can have the audience do it with you, and both of you get paid? Even better, what if you could involve all of your audience to share, participate, and spread the word, and get them paid as well?

This is the new world of virtual currency or creating value out of traditional points systems. T-shirt maker Threadless.com allows people to judge, promote, and even get their picture taken wearing a t-shirt, and rewards them with points each step of the way. Points can be redeemed for cash.

While MetaCafe and others have tried to incentivize content creators by paying them a fee based on ads, Threadless.com takes it to a new level where the creators and fans of their T-shirts can help spread the word and generate sales.

How They Do It

Designs are submitted to the community and printed by Threadless, who shares some of the revenue with the creator. Each action is tied to some form of currency; some of it is monetary, yet in social networks much of the social currency is how people view your reviews, your creativity, and support it.

By incentivizing certain actions and maintaining an active community, they unleash the genius of their audience and profi t.

  • Incentivize the product creators: they invite people to submit T-shirt designs. If it is selected, the person can win up to $2500, or maybe even $10,000 if it is selected one of the Best.
  • Pay the slogan creators: submit a slogan and win up to $200, so you don’t have to be able to draw to win.
  • Incentivize consumers to spread the word: Members of this social community can recommend t-shirts via email, or traditional affiliate links, and earn two credits (about $3) per sale. If they get their picture taken with their favorite T-shirt and submit it, they get one credit ($1.50). If the picture is used in the main site for promotion, they get 10 credits ($15.00). Considering t-shirts run $9-$30, that is a significant bounty for a small action.
  • Reward people for taking action: The key to Threadless is the fun community. Just paying people to promote and create is one thing; rewarding them for good behavior and excellence is the new way of product development.

Business Model 2 – Direct Response Media: Ads and Performance Marketing

This is the most common model in use, with businesses basically trying to fit the traditional marketing world onto social media with mixed results. When matched to the right audience, this can be very effective. Still, targeting will almost always decrease the overall size of the audience you are reaching, so numbers are not off the charts.

Direct media is the evolution of traditional direct response media (direct mail, DRTV, etc.) and Internet direct response like pay per click and affiliate programs into the social media space. The goal is to get a sale, and these folks have been posting ads, manipulating search engines, and building links.

How They Do It

  • Use personality to create buzz: Create buzz about product by using audio and video-driven business personalities, driving people from social media portals like Facebook and MySpace to their own sites, and even social networks, to create ongoing business.

Gary Vaynerchuk, WineLibrary.TV: Gary combines a video show about tasting wine with ongoing presence in many social networks. He drives people from these networks to his own Wine social network, Corkd.com (he bought it after being successful) and drives retail sales through WineLibrary.com, among other sites.

Gary’s personality plays against traditional wine snobbery and drives sales. Personality is essential, because in social media, how they remember you is the most important thing”and if they remember you. For retailers,this means driving repeat visits, which the video, social networking and marketing continually generate.

  • Develop new direct response ads: Allow people to interact, watch, and make selections within the advertising itself. Instead of an ad inciting people to click and leave the space they are at, these ads invite people to stay where they are, browse, and buy.

MyWeddingFavors.com has an affiliate program that uses video and a special video widget from Qoof.com. Affiliates place these ads in social media spaces, where videos can be played right on the page.

People can choose, watch, and explore while they are in the middle of their own social media experience. Basically the performance based marketing invites them to engage and interact with the ad, and pulls them away from what they are doing BEFORE sending them to the eventual site to buy the product.

Other tactics include:

Buying low cost advertising ($0.50 – $20 CPM) space on a variety of social media through ad networks. Ad buys are mostly based on straight ROI. Clickthroughs are very low. Branding ads are rarely successful.

Posting consistently to blogs, social bookmarking sites, video sites, and tag these posts with keywords in the title, tags, and description to drive search traffic.

Do performance marketing deals and pay others to promote and pay a bounty for a lead or sale. If the ad does not perform, no one gets paid. Lead generation is dominant here, especially to targeted audiences where it works best; because people are often more open to inquiring than to buying.

Business Model 3 – Customer Relationship Management and Employ Retention Management as Social Support Media

Many smart companies are using social media to better engage with their customers, and some to better engage with their employees. But social media canal so be used to manage customer relationships as well.The social media business model is very simple. Your content is your marketing tool. Sois your contact with people, either directly or watching over the discussions, questions, and interactions around your product, your brand or inside your company.

How They Do It

Zappos empowers its employees through an innovative training program which allows them to go out, via Twitter, and be available to answer questions from people and customers. A whole book could be written about Zappos customer service, and in fact it has, by the employees of Zappos (you can find it on their website). Giving employees technology will not solve your problems; inviting them to be passionate about your business does!

The key issue is trust; good employees find good customers if you teach them. Zappos sees employees as assets and ambassadors, not as a cost of doing business, and it shows. They are not afraid of how powerful their employees can become, and in fact, encourage it.

Many smart companies are improving communication and efficiency within their own company with social media, as a way to improve communication internally. Social media technologies like microblogging enable employees to follow each other for specific projects, and gives management an excellent tool to keep an eye on the growth of the business.

Best Buy claims it has drastically improved employee retention with social media. Technical firms like Cisco and Intel swear by their internal social media initiatives that foster ideas and feedback, while saving money and time. Financial firms like Wells Fargo are seeing better production by employing some social media within the company.

As you can see, there is money in terms of sales, yet also in terms of savings in social media. It is not just an advertising game, and it is one that can change business.

Be Unique

If you want to find the money you have to create your own business model. One that deals with your goals while building a relationship with your audience (and employees) that can reduce expenses and build sales year after year if you manage it right…or better yet, moderate it instead of manage it.

Social media demands a blend of heart and business savvy. You cannot have one without the other; if there’s no business, we should all ignore social media right now (like most of you, right?). If there’s no heart, if no one shows up as customers and employees get bored being employees,nothing really happens. Put the two together and you may find the magic, and profits, you are looking for… because it is the new game and it is happening right now.

Incentivize Your Audience

Budgets are tightening, and advertisers need to boost ROI- fast. The social Web is gaining value not only as a medium that delivers measurable results, but also as a resource for gaining insight a company can use to make all of its advertising (TV, print, online) more effective, to increase ROI across the board.

Social media is known for its wealth of useful information. Using relevant analytics can pinpoint audiences and learn more about them. Need to reach adults who are interested in European travel? How about people in Los Angeles who like spy novels? Done. You can even aggregate more information along the way and optimize your ads as you go, to fine-tune your reach and make your campaigns more effective.

But as important as such targeting is – and it is significant – there’s another valuable aspect to social media: the level of engagement of the consumers with the social “medium” itself (compared with any other medium – TV, radio, print or even traditional online).

People choose to spend time on social sites. They’re not passive observers – they’re active participants. They’re playing games, sending messages, reading blog posts, poking their Facebook friends, commenting on someone else’s photo, and the list goes on. They’re typing, thinking, laughing, and conquering their enemies (only in the games, we hope). They’re engaged.

Use social media to provide access to enough data about demographics, traffic, interests and social actions to pinpoint a target audience and understand them better, and the attention that users give to this medium while they’re engaged.

What you get is the potential to gain unprecedented levels of information about your audiences and your messages by offering people incentives to give some of that attention to you.

The Payoff: Increased ROI

The idea of incentives isn’t new. Most of us have handed over our contact information for the chance to win a trip to Hawaii (or name your destination), or responded to a handful of survey questions to get a free soda with our next meal. The virtual world is no different. In this virtual economy, people still have wants – someone playing a game wants extra points, someone with a virtual pet wants extra gold to buy toys for it, someone in love wants to send a gift of a dozen virtual roses.

The new opportunity for advertisers is to apply the principle of incentives that we’re all familiar with offline to the virtual economy. Offer game points, gold for virtual pets, or a free gift, in exchange for taking a certain action.

It’s in this action where the real gold lies, thanks to the two characteristics of social media mentioned above. No longer are the actions limited to collecting a consumer’s mailing address or surveying for opinions that aren’t tied to any demographics.

The action is to view your ad (banner or video) and answer a few questions about it. The incentive is whatever the publisher is offering as a reward (the points, the gold, the gift, anything).

The payoff to the advertiser is intelligence that will help you increase ROI within all types of advertising.

Your survey can be designed to measure consumer perception:

Awareness – Who has heard of my brand?
Attitudes – How do people feel about my brand?
Favorability – Do people like my brand?
Intent – How likely are people to purchase my products or services?
Preference – Do people prefer my brand or products over others?

The right analytics partner can couple those results with user demographics like age, location and gender, along with interests and social actions. For example, anonymous User A is a 45-year-old woman who lives in St. Paul, reads murder mysteries, plays Scramble on Facebook and says she is “very likely” to see the next James Bond movie.

That is a significant amount of actionable intelligence for any company. In our fictional example, using aggregate (and always anonymous) audience information, the movie studio might discover that while it’s been concentrating ad dollars on reaching the male audience, perhaps there’s value in targeting females that match certain demographics.

Beyond its significant value as an advertising channel in and of itself, the social web is becoming a giant testing ground for companies to discover who their audiences are and how to more effectively reach them – from any medium.

The social space is evolving into a place that offers advertisers an efficient way to understand audience behavior and perception – and to reach people with precision targeting like we’ve never seen before. You couldn’t ask for a better incentive to get social.

Owning Up

Social media technologies can be a powerful tool, but it’s important to know who within your organization should be taking the lead for your social media marketing strategy, which includes responsibility for everything from budgeting to staffing.

It’s commonplace for executives and managers to ask about social media leadership and inquiries stem from the growing desire to get involved with communities of customers, partners, and employees.

However, this question of who within an organization “owns” a specific community isn’t easily answered because it’s really three complex questions that need to be answered first: who interacts with the community; who pays for it; and who champions it?

Who Interacts with the Community?

Organizations have many questions when they get started with social media. They want to know who will write the blog, who will run the forum, who will manage the Wiki. These are all good questions about who you entrust with the responsibility of being your spokesperson to a specific community.

Some companies, such as General Motors, have high visibility bloggers (like GM’s Vice Chairman Bob Lutz). Other companies have a general manager overseeing its community efforts (like Intuit’s Scott Wilder). And other businesses field an team (like Southwest Airline’s Nuts About Southwest blog, which includes contributions from a diverse group of employees including Gordon Guillory, a Structures Mechanic in the Heavy Maintenance Department).

These different approaches show that any employee can interact with communities that they never deal with face-to-face with in their regular work. Community contacts shouldn’t be determined by title or department, but rather, by the mindset and judgment of the person in the job. It must be someone deeply passionate about developing that specific relationship – even if it means challenging long-held corporate culture and standards.

Natural places to look for these individuals are in marketing, public relations, and corporate communications. But don’t overlook customer support, market research, and product management as well.

Who Pays for Community?

The easy answer is that it depends on the goal of the community and who benefits most from the community. For example, a company may form a community for the express purpose of gathering insights into its customers. In this case, market research could work with vendors (such as Networked Insights, Passenger, or Communispace) to create a private community that can be polled and asked questions. These interactions can be used to supplement other sources like surveys and focus groups. In this example, it’s clear that market research should fund the community. However, companies can also allocate back the expense to other departments that also tap into that community for insights.

Communities can also be formed to provide better support. For example, through the use of discussion boards where customers, as well as company representatives, can answer support questions, the customer service department can eventually see decreased costs. In that case, customer service should pay for the community, as well as provide focus and direction.

One circumstance demands additional detail — when the IT organization should pay for (and control) community. IT usually gets involved when there’s a need to have a company-wide adoption of social and collaboration technologies. Historically, this has meant enterprise deployment of collaboration platforms like Sharepoint. In contrast, most social technologies are point solutions, designed for easy adoption by business users and requiring minimal IT involvement. IT typically becomes involved in social technologies when integration is needed into existing corporate systems and databases, where the role IT plays is one of ensuring security and systems maintenance. At some point, there will be enough point solutions where IT may also need to get involved to ensure corporate consistency in identity, data structures, and security, as well as in vendor and platform selection.

In the end, who pays for and thus controls the community should be fairly easy to determine because the formation of the community should be based on concrete goals that benefit the organization. If the goals are unclear, then the question of who pays for the community is the least of your worries.

Who Champions Community?

Deploying social media and creating communities is hard work that often challenges long-held company beliefs and cultures. But social media and community managers typically are younger, and earlier in their career, and thus they don’t always have the skills or the clout to be a change agent within an organization.

What’s needed is the third area of community ownership – executive sponsorship. Take for example Ben and Jerry’s. CEO Walt Freese is deeply involved in social media at the ice cream maker and not because he thinks it’s cool, but rather because he believes social technologies are crucial to deepening relationships with core customers – the lynchpin to increasing customer lifetime value.

Freese’s office title is Chief Euphoria Officer and he is the bearer of the social media torch inside the company, encouraging the integration of social media into all aspects of customer relationships, from marketing to customer service.

And at H&R Block, Paula Drumm, vice president of Interactive Media, has been the executive champion. She’s been educating executives while steering her team to engage with customers in multiple social media channels. Like many companies, H&R Block executives are conservative and come from a generation that’s generally skeptical about social technologies. Drumm’s change management skills have helped the company become a model of how to develop customer relationships with social media.

A key skill of this champion is the ability to understand far and how fast to push. In Naked Conversations by Robert Scoble and Shel Israel, the authors write about the importance of understanding the “corporate membrane” – how to stretch it to accommodate social media but not to the point of breaking.

The hard part of about this particular question is that it’s hard to appoint someone into position — usually, this person volunteers because they see the need and have the passion and energy to lead change within the organization.

Everyone owns Community

It’s a mistake to treat community as a separate, distinct asset because you’re talking about relationships that are core to the form and function of a business. In the end, everything that a company does flows through some sort of process that touches a relationship be it with a customer, partner, or employee. Thus, there’s opportunity for everyone in the company to own a piece of community, if only they are given the chance to do so.

I believe that a company that can spread the wealth of community involvement and ownership widely throughout a company will always be better positioned to win than one that doesn’t. After all, all companies want to be closer to their customers.

So, think hard not only about who will own community today in your organization, but also who is best positioned to open and share that ownership throughout the entire organization. The future health of your company may well depend on it.

Participation Is Not Passive

Elvis has left the building and he took the audience with him.

The only people left are fellow participants. Social media has made everyone an author, creator, director, developer, editor, critic and media outlet. There are millions of voices, but they are all saying the same thing – listen to me.

Participants do not consume passively. They do not sit silently ready to have their eyeballs converted into cash. Participants participate. They create their own original information, entertainment and art. They remix their own version of mainstream pop culture – copyrighted or not. They post their thoughts, publish their fears and fact check faster than any newsroom. They share with their friends to discover the quirky and interesting, making it an instant blockbuster- at least for 15 minutes.

Participants have ideas to be declared. Each of them is a market of one. Collectively they are a trend, a publishing powerhouse and a voice to be heard; a voice that has something to say. Participants have changed the way media is published and interactions are monetized. But more broadly and importantly, they have changed the flow of global information from top down to bottom up. They are changing the tone and tempo of the conversation.

Who’s Listening

While there are so many buzzwords surrounding this topic – social media, Web 2.0, conversation – many are overused, misused and misinterpreted.

The word conversation comes up over and over, but it’s a concept that is as old language itself – maybe even older. It is not a new construct invented by the social media advocates.

And while the medium for conversation has changed and evolved over time, the fundamental human need for conversation remains the same. We want to connect to each other. We want to express ourselves. We want to hear authentic voices engaged in a dialogue with us. Everyone wants to be heard and feel valued.

But who is doing the talking is also important. The conversation between customers and businesses must include people that are empowered by businesses to make decisions. This is not just about your support staff or marketing department interacting with customers. CEO’s, vice presidents, product managers, and other executives must be part of the conversations.

The Art of Conversation

It’s also what is said and how it is said that is key. With social media, you must treat these conversations as you would any face-to-face interaction – act like you would at a dinner party. After all, this is a social setting like any other. You say what you would say in any face-to-face conversation at a dinner party. Respond respectfully to criticism. Escalate the feedback. Act on it. Thank people for compliments. Elevate them. Ask them for more information. Reward them for their efforts. Empower them to spread the word.

That all sounds great, but ultimately for businesses, it’s about the return on investment or quantifying revenue generated by these conversations. At this point, it’s hard to put a specific value on a human connection or word or mouth. But imagine the value if all this “idle chatter” was publicly documented, archived and spread around to thousand of friends and connections. With social media and the web, it is.

The return on investment is nothing short of identifying your weaknesses in a rolling and real-time focus group. It is finding your friends in the marketplace and turning them into evangelists for your product or service. It is the new marketing – one-on-one influence of your market.

More importantly though, it’s beyond influencing your market; It’s about your market influencing you – shaping your product or service. It’s about making your stuff worth having a conversation about.

Getting Started

First, do some homework. Read some books – The Cluetrain Manifesto and Naked Conversations – are a good start. Then move on to Blink and Now is Gone. Then get off the beaten track. Start using the tools and services your market is using – Facebook, MySpace, Twitter, Seesmic and FriendFeed, to name just a few.

But having a Facebook profile or a presence is not enough. That’s just like walking into a dinner party. The next step is finding someone interesting to talk to. Participate. Find Facebook groups that matter. Search Twitter for people talking about your company, product, service, industry, competitors and pain points. Respond to them. Listen to them. And respond again. You just had a conversation. A dialogue between two participants where one communicates something, the other digests the information and responds.

It’s not magic, but it is magical. It is basic. It is human. And it works.

Content vs. SEO

Hamlet Batista, president and CEO of NEMedia, wants to change your content. He wants to change it so much that he can’t wait to get his search team cracking on it. It’s his bread and butter. And like any SEO outfit, he claims he can get your site optimized and ranking rapidly. But he also has a passion for words. He wants to respect your content – the carefully crafted articles, summaries and reviews you painstakingly labor over. “You have to write the content for the user,” he says. “If they don’t like it, they are going to leave.”

His mantra seems to echo throughout the Internet recently, especially as Google and other search engines keep refining how they rank your site. That means publishers have to keep toying with their optimization. There’s just no way around that, but it also means that some site owners will sacrifice the uniqueness of their content to get the rankings. So, the big question becomes, does doing good SEO cancel out the ability to have compelling content?

Batista points out that about 20 percent of queries people type every day are new keywords. He calls this the “invisible longtail” where there is always a set of new keywords publishers have to optimize for. He calls it a new opportunity. For some sites, just following the SEO 101 rules about using keywords in content and getting your tags and titles in order dilutes the single exclusive thing that makes a site unique – its tone of voice.

Taking a Tone

Attitude is often ignored as more search marketers chase the most recent algorithm changes in Google. But adjusting a site and content accordingly is always going to have only a short-term effect.” It’s important to understand the fundamental nature of how information retrieval works to really be able to get the most out of an optimization project,” LeeOdden, CEO of search and public relations consultancy TopRank Online Marketing, says. However, he adds that, “I often hear content purists confuse attempts at understanding how search engines work with gaming them and it’s just not the same thing. It’s the old debate about whether great content or great links gets you better rankings.”

Odden likens the question to debating which is most important, air or water. “Links and content are both necessary for competitive search marketing efforts. Emphasizing one over the other depends on the situation. Excelling at both is the ideal,” he says.

While understanding all that goes into making search engines tick – in terms of algorithms, methodologies and the importance of link building – is helpful to an overall optimization plan, Odden says that content is equally important.

NEMedia’s Batista goes one better and says that “Content producers don’t use the same words as a content consumer. “He says that users will write in terms of problems, not in keywords. If you’ve been robbed and you search for an alarm system, Batista says that most people will present the problem (“They broke into my house and stole my laptop.”) and not the solution (“I need an alarm for my 4 bedroom house.”). He likens it to the symptoms you relate to a doctor. Most people do not go into a doctor’s office and state, “I have a liver condition; I need Lipitor.”

Going Natural

That’s why some search professionals are advocating more natural language in content whether selling shoes or promoting CRM software. Write content naturally at first and do not worry about the page, suggests Batista, then go through it for keywords, adjusting tags, titles and link building along the way. Don’t get too focused on rankings for all the keywords on the page and neglect a sense of narrative. Batista says a lot of SEO people get too caught up in the technical side of optimization and ignore common sense. Lisa Barone, a senior writer at search consultancy, Bruce Clay, writes that content itself is changing. “It used to be that you go to a page, you open it, you parse it and you index it. Now, Web pages are increasingly based on AJAX. It’s like a Choose Your Own Adventure novel. It’s all little fragments of XTML. Crawling it is a hard thing to think about.”

“Sadly,” says SEO and marketing consultant, Anthony Gregory, “a lot of SEO copywriting is not very charming for humans to read.” He says to “remember that the goal of effective SEO writing is not only to improve your searchability and search engine rankings but also to lure customers to your site.”

Keyword stuffing – the practice of repeating the keywords in content copy until it looks like a gorilla wrote it – is a rejected method these days. He says the search engines have become too smart and can recognize this pretty easily. A site could be labeled as a spam site and create a big headache when trying to get it ranked again. He says that a site full of badly written SEO articles makes the site owner “look greedy and desperate for business.” A talent for writing for the user and the search engines is a rare one, and not one that necessarily comes when hiring an SEO professional.

A Balancing Act

There are some things that an SEO consultant may know that a publisher doesn’t. SEO consultant J. Walker says some search engine algorithms prefer pages with higher word counts. The highest ranking pages in Yahoo averaged 1,300 words per page while Google’s high rankers averaged 900 or so. Not that word count alone will propel your site to number one. She says that unless a publisher is able to pour money into paid ad campaigns, they should hire a copywriter or learn the SEO techniques for themselves.

Some writers struggle with striking the balance and do all they can to help keep a piece of copy optimized – even through adversity. Shailey Motial, a writer for content provider Chillibreeze.com questioned herself when assigned to write copy incorporating the phrase “statistics of home schooled in kindergarten” a minimum of four times in a 500 word article.”Was I corrupting my art?” she asked. “Am I guilty of diluting the form of writing by inserting predetermined keywords? I toiled through my first piece, a little unhappy, and a little lost about what to do. I grumbled, as is natural for all of us faced with change. However, pragmatism soon took over and I realized that my writing was of no use, if it did not get any readers. It had to be noticed and hence using the selected keywords would distinguish my work from the clutter,” she says.

Motial adds that the task involves pleasing a human as well as an algorithm – a unique mandate, perhaps impossible to realize completely. But while she says that links can come and go and be dead tomorrow, good, useful content will never be stale. That’s also why firms test their pages as best they can, testing being another revenue source for SEO companies.

Robert Bergquist, CEO of testing and optimization company WideMile, says that with conversion rates currently at .5 percent to 2 percent, sites can’t afford to not test thoroughly. “What they haven’t learned is what to do once they come into the site,” he says. Batista explains that’s why he puts an emphasis on thorough keyword research and link building.

Beyond that, paying for syndicated copy to post on a site has proven popular for many, especially site owners with product-specific sites that can benefit from articles on their niche or theme. Outfits such as uclick.com, Content Infusion, and YellowBrix which bought out syndicated content pioneer iSyndicate, specialize in selling copy from cartoons to political columns to news of the day. Copyblogger.com also offers a handy list of tips to make you a better copywriter.

SEO and online marketing blogger Andrew Girdwood goes so far as to classify a distinction between SEO and “ethical SEO.” Simply put, ethical SEO is about allowing a search engine to see what your website is about as clearly as possible without any”black” arts like keyword stuffing, confusing URLs, or dubious link building. He quotes Google’s “evangelist” Adam Lasnik, who has said that “our algorithms want to see something that’s a happy medium cleanly between: Extreme A — Not listing relevant terms at all on the page. ExtremeB — Focusing on increasing keyword density to the point that your English/Writing teacher would thwap you with a wooden ruler. Hard. Repeatedly.”

That advice speaks to the difficulty of saying once and for all what is the right balance. Girdwood says some believe all you have to do is reach a certain percentage of keywords per page to rank well – anything over that gets labeled as spam. Lasnik has also said you can’t believe that. “There is nomagic number,” he says. Odden adds that “a combination of content as well as social networking, link networking, public relations and gaining editorial visibility as well as viral and individual link solicitations will all work together synergistically.”

Many believe that while good, natural writing is key, finding good writers is a dilemma. Affiliate marketer Kim Rowley finds good writing in family. She employs her two aunts to help her write fresh copy for her many websites and she keeps a pen and paper by her bed to jot down new content ideas. She keeps her blogs personal because it goes well with the kinds of sites she has on baby clothes, florists, coffee, pregnancy and coupons. She adds that some of the best content she’s received is by asking visitors to submit posts. This way, she says,”the content is true and unbiased.” She also builds content based on traffic stats and can write more for a particular site if there is a traffic spike.

Creating Compelling Copy

There is little consensus on how to write truly engaging copy while hitting all the SEO marks, but some of the key elements include:

  • Write naturally and try to add SEO elements later.
  • Use unique ideas for content instead of relying on cookie-cutter advice from SEO books.
  • Use consistent title and tag information – make it straight forward but descriptive.
  • Narrow keywords to the most strategic ones. Don’t over-stuff with keywords tangential to your topic or theme.
  • Think of the descriptive tag as a story and not just a spot to place keywords.
  • Make sure keywords match what people are looking for.

Matt Cutts, Google’s search guru, weighs in on his blog about content as well, warning that “if you put in time and research to produce or to synthesize original content, think hard about what niches to target.”

Cutts advises not to begin with broad articles about “porn/pills/casinos/mortgages” but with a smaller niche. “Look for a progression of niches so that you start out small or very specific, but you can build your way up to a big, important area over time. There are a lot of niches that just take sweat equity. You could be the SEO that does interviews” Or the SEO that makes funny lists. Or the SEO company that provides WebMasterRadio. Or the SEO that makes podcasting easy.”

The right balance may be yours to define. J. Walker says that “SEO methods are specifically designed to increase traffic to your website. Marketing techniques are designed to keep that traffic on your website, and encourage visitors to make a purchase. Your challenge is to find the delicate balance between them.”

Leagues of Their Own

Since the days of the gladiators, sports fans have had an irrational bond with their favorite athletes and teams. Feats of athleticism evoke eruptions of euphoria or a tidal wave of tears as a game’s final play unfolds.These strong emotions create an indelible brand loyalty that remains long after the season ends.

Marketers are learning to exploit these relationships in new ways by expanding the scintillating sights and sounds of sports beyond television highlights to broad online distribution. By enabling fans to personalize their interactions with multimedia content and by bringing the game to their favorite arena – be it a social website or a personalized Web page – sports leagues are creating new online marketing opportunities that are increasing revenue. Typically, online merchandising of memorabilia and apparel is not handled by sports leagues’ online properties and is therefore not addressed in this article.

Sports leagues and their broadcast partners have historically been conservative in granting permission to use video and audio from games online. This idea was based on the belief that making highlights or live broadcasts available dilutes the value of live games and would reduce advertising revenue and attendance. For example, in the late 1990s, local radio affiliates streamed broadcasts of baseball games online for free. But within two years, Major League Baseball ended the process, allowing audio webcasts to be streamed only through the MLB.com website through paid subscription services.

Baseball continues its policy of charging to listen togames online today. Dinn Mann executive vice president of content for major league baseball, says the league listened to fans and for the 2008 season reduced the price of a season audio subscription by $5 to the former price of $14.95. “We tipped our cap to fans who complained,” he says.

Requiring customers to pay for live audio provides an alternative revenue stream, according to Mann. “Having a subscriber base and not relying entirely on advertising is of strategic importance,” says Mann. Subscriptions,which require submitting an email and physical address, provide an avenue for MLB to pursue online and offline direct marketing.

Major League Baseball also charges for video streaming of live games and restricts viewing to any games that are “out of market” from where the customer lives. This protects the lucrative contracts with cable companies and local TV stations that are the bread and butter of their revenue. Baseball game viewing- despite the lengthy 162 game schedule – remains largely a pay-per-view world, Mann says, because “some things are still worth paying for.”

This year is the first time that baseball fans can watch archived broadcasts of full games for free, something that MLB is”experimenting with,” according to Mann. The archived games do not feature advertising, but MLB is “exploring the right relationship,”Mann says.

Growing the Audience

Sports leagues are now taking a page from online marketers’ playbooks by encouraging consumers to personalize their experience in interacting with content. Instead of going the affiliate marketing route, the digital sports media companies are focused on partnering with social networking sites and other media companies that have established audiences of fans. The strategy is to encourage consumers to link to and save content on the sites where they visit on a daily basis, enabling fans to mash-up multimedia content to create something new from existing content. Marketers who join the roster of their online partners will gain a share of the spoils in growing their audience and reaching a new generation of fans.

At the start of the 2008 season, MLB.com announced a partnership allowing Yahoo.com to stream games and highlights.Yahoo will also sell ads against both pay and free content, although thus far the video has been distributed largely without ads. Through this agreement, MLB.com gets access to Yahoo’s large audience and the two companies share revenue from any transactions facilitated through Yahoo.

Professional and collegiate sports leagues have learned that embracing younger audiences on their home turf is the quickest path to rapidly growing an audience. The NCAA, in partnership with CBSSports.com, opened the video streams of its college basketball championship tournament to a wide variety of publishing partners with great success. This enables fans to see the content where they want it delivered.

Just a few years ago, video streams of March Madness games were protected from the majority of the population as if they were enriched uranium. The subscription service generated just $250,000 in revenue annually. But over time online distribution was proven not to be hazardous to the health of television advertising revenue. Subscription fees were replaced with free streams, and then the NCAA/CBSsports.com embraced social networking (See sidebar).

Free live game webcasts have paid huge returns, according to Jason Kint, senior vice president and general manager of CBSSports.com, which manages the online video distribution of the NCAA tourney. CBS Sports created an embeddable media player that contained multiple advertising locations, in-stream ads, and fixed positions sold to sponsors.

Online “consumption is additive and not cannibalistic”of the TV audience of live college basketball, Kint says.The streams were primarily delivered to people who didn’t have access to TV, including office workers. The media player’s “Boss Button,” which instantly hides daytime viewing at the office, was clicked more than 2.5 million times, according to Kint.

People will continue to watch games on TV if they can,he says, as the final championship game was the most watched game on TV and had the smallest proportional share of online viewers. Industry watchers speculate this type of arrangement may lead to new relationships between those who promote other events, such as concerts or entertainment awards shows and affiliates who can deliver a targeted audience.

Content owners looking to maximize their audience for ad-supported content should also spread it far and wide, Kint says. “Don’t expect users to come to a URL – bring the content to them.”

Like its collegiate counterpart, pro basketball also recognizes that working with existing online communities enhances rather than endangers its own digital efforts. For the past two years the NBA has “embraced the idea of distributing content beyond NBA.com” and is partnering with video sharing and social networking sites, according to NBA’s Vice President of Interactive Services, SteveGrimes.

Grimes says working with video sites such as YouTube, Joost and Hulu and social networking sites such as Facebook, Beebo and MySpace has increased fan engagement. The NBA makes highlight videos available to publishers such as Hulu and Joost to strengthen its brand awareness among younger audiences who are consuming a greater majority of their video online.

The NBA is encouraging fans to create their own highlight reels by mashing up content available only on NBA.com and embedding it on their social networking sites. “Fans that love the NBA will come to NBA.com, but those who like it will visit other sites,” Grimes says.Widgets that enable sharing of content are delivering interactivity to sports media. NBA’s widget page (www.nba.com/widgets/) contains embeddable code for showing highlights, up-to-date-scores and photos. The NBA has sponsorship deals with companies including Lenovo and TMobile for some of its widgets to gain revenue from content that sits on other sites, Grimes says. The league has also launched a fan application on Beebo to reach its audience.

“(Sports) sites are starting to realize the power of how content can be aggregated across the Web (using widgets),” says Tad Greenleaf, the media team lead, for Omniture Consulting. Greenleaf, whose company has measured fan engagement for the websites of all of the professional leagues, says that while some leagues have hesitated on widgets and distributing content to other sites, they will do so as long as they can maintain some control.

By contrast, MLB has not released any widgets as yet because “we haven’t reached the point that the content needs to reside on their (fans) pages,” says MLB.com’s Mann. “… We have taken a long term view and not just rushing to the tool of the day.”

Measuring Success

Most of the sports leagues are more concerned about building traffic and fan engagement than selling tickets or jerseys through their partnerships with publishers, according to Ominture’s Greenleaf. His company built a social networking website for the Indianapolis Colts (www.mycolts.net) that greatly increased traffic to the NFL’s Colts site by enabling fans to comment, share content and create their own blogs. The leagues want to measure views of videos to see how they can be used to retain consumers, Greenleaf says. “How much can a piece of content drive people into the site, or are they hitting and leaving?” He says sites want to see if the relationships have “velocity” and are encouraging users to “dive deep” into the sites.

Greenleaf says another strategic play is for leagues to buy keywords about teams, players or about timely topics in the news because the leagues “don’t want them going to other places on the Web.”

“The key thing is that you need to control [the environment] if you are the owner of the content,” says Robert Tuchman, the President of TSE Sports and Entertainment, which develops corporate marketing programs around sports. Tuchman says those who market sports leagues have yet to capitalize on the legion of diehard fans that follow their sport. “They have to get behind their existing market or other organizations will control their inventory.”

Tuchman says while social networking around video highlights is the hot topic today, it should be part of a larger strategy that integrates all media. “Social networking is just one aspect. You need to sell combined media packages” that include TV, print and outdoor, according to Tuchman.

Scoring With Mobile

The days of learning how your team fared by reading the morning paper are long gone. Now fans want to know about scores, injuries and trades immediately, and the league sites are marketing to this perceived need. Through mobile-device enabled websites (WAP) and SMS and text-messaging services, sports leagues including the NHL, NBA and MLB are generating revenue from on-the-go consumers.

For the 2008 season, MLB.com added video alerts to its text alerts subscription service. The alerts highlight great catches or home runs from a fan’s favorite team that will be sent to handsets within three minutes after a play happens. The NBA’s “mobile to go” service offers team and player text alerts as well as a service customized for fantasy league fans.

Quattro Wireless launched the mobile version of the NFL Draft site for the annual draft, which took place in April. The site, which included photo galleries,articles, draft prospect pages, player analysis, and the full draft order, was updated in real-time as the college players were selected by NFL teams.

“The NFL is trying to continue to give their fans more coverage wherever their fans may be,” Lars Albright, vice president of business development for Quattrosays. “The NFL found that the draft is turning into something of an event … It’s becoming a marketable event.”

Sports leagues and news services originally charged subscriptions for notifications to mobile phones and handhelds, but they are starting to shift to ad-supported services, says Eric Eller, senior vice president of products and marketing for Millennial Media. Eller, whose company operates two mobile advertising networks (CPM and CPC) that aggregates demand, says one of the big trends is in-game mobile marketing.

For example, during a game, fans in attendance can be shown messages on their mobile phones that are linked to messages being shown on the big screens that sit high atop the stadiums, Eller says. Mobile phones “will play an important part of sports marketing around events,” he says.

Sports leagues have learned that by making highlights more widely available and engaging on their favorite online destinations, they can grow both their television audience and put more fans in the seats.

AOL’s Advertising Aspirations

What a long, strange trip it’s been for AOL.

The more than 20 year old company that was once at the forefront of Internet community building and defined the online experience for many early Internet adopters, is now experiencing a bit of an identity crisis.

AOL has moved far beyond its famous “You’ve got mail”catch phrase/punch line/movie title. So, then how does AOL define itself ? Is AOL an Internet provider, a media and entertainment company, an ad network, an email provider or a Web portal?

While it’s all of those things in one fashion or another,the company is working toward positioning itself as just one thing – a next generation ad network.

“AOL has reinvented itself so many times. It is hard tokeep track,” says Adam Schlachter, senior partner at media and communications consultancy Mediaedge:cia.

AOL’s ad strategy comes at a time when Jeffrey Bewkes,CEO of Time-Warner, acknowledges there is no future in the dial up Internet. There is increasing pressure as media companies and Web portals aplenty are starting and the future is buying or promoting networks as the next step toward”one-stop” shopping for ad buyers.

Acquisition Spree

In an attempt to reinvent itself, AOL has spent about $1 billion acquiring ad-centric companies over the last several years. (See sidebar). AOL’s first big step into the ad market was its 2004 purchase of Advertising.com for $435 million. Advertising.com made a name for itself selling ad space on websites at a time when few were doing it and is the largest third-party display advertising network.

In 2007, AOL bought contextual advertising company Quigo. It alsosnapped up Tacoda, a behavioral targeting company. It bought Third ScreenMedia, a mobile advertising network and maker of mobile software. It also acquired Germany’s Adtech AG, an international online ad-serving firm and added Lightningcast to its roster of companies. Lightningcast delivers advertising for on-demand, live and downloaded video content on the Internet.

The buying spree continued this year. In February AOL acquired Buy.at, an independent affiliate network based in the United Kingdom, with more than 9,000 international affiliates and merchants such as Butlins, Carphone Warehouse, Capital One, Egg, John Lewis, M&S, Powergen, TMobile and Virgin Media.

In March AOL made a step into the Web 2.0 world by acquiring Bebo.com, the fourth largest social networking site, for $850 million. With more than 40 million members, Bebo’s user base is a far cry from the space’s leader MySpace with 109 million.

The Platform Play

AOL’s Platform A division brings together all of AOL’s ad-related silos under a single umbrella. Formed in September 2007, the division has already experienced a series of executive shakeups. Since November, several Platform A executives have exited including Kathleen Kayse, vice president of marketing; Lance Miyamoto, head of human resources; and Dave Morgan, chief ad strategist.

Curtis Viebranz, CEO of Tacoda, who was brought in as president of Platform A, was removed in March. Lynda Clarizio, a nine year AOL veteran that was previous president of Advertising.com, took over the reigns of Platform A.

Clarizio, for her part, has reportedly jumped in with both feet. She is known to have reveled in the start up culture of Advertising.com. PlatformA insiders say she is looking to infuse the many AOL ad groups with that same startup work ethic. And up until recently, the acquired companies had so many department heads with similar roles that many insiders claim various parts of Platform A were essentially competing with themselves for the same clients.

Clarizio has publicly said she will structure teams so that there is only one sales team, technology team, product and operations team, marketing team and publisher services team. She has also combined the overlapping search marketing efforts by Advertising.com and contextual targeting shop Quigo.

In recent interviews with the media Clarizio focused on the short term goals of the group, rather than the executive turnover and claims of integration difficulties.

“As our technology has continued to advance, we’ve gotten better and better,” Clarizio told the Associated Press.”We can handle a lot of demand from advertisers.”She also told the Washington Post that “this is probably the most dynamic industry in the world right now, the online advertising space. To compete effectively in this space, you have to be constantly pushing, innovating new products.”

Some analysts are giving AOL the benefit of the doubt as it works though integrating all its acquisitions.David Hallerman, an analyst at New York-based eMarketer, says, “It takes a while. This is not just buying technologies. It’s buying human constructs, and it takes a while to work out.”

While Platform A is still in its early stages, its reach is already significant when accounting for all the once-disparate units. According to comScore MediaMetrix, Platform A counted 167 million unique visitors in February 2008 and claims 90 percent of the U.S. online audience. However, AOL as a whole, however, ranks fourth as a Web portal, behind Google, MSN and Yahoo.

AOL’s ad revenue is still growing but not at the same clip as previous years. Its ad revenue for 2007grew 12 percent, off the 37 percent growth AOL experienced in 2006 and the 38 percent growth in2005, according to eMarketer.

“AOL appears to be feeling pressure from aggressive sales targets set against the backdrop of a slowing economy,” says Greg Sterling, analyst at Sterling Market Intelligence.

Advertising.com recently lost its biggest advertiser, University of Phoenix, whose ads accounted for $215 million in 2007 and $157 million in 2006- that’s about 17 percent of AOL’s ad revenue growth last year.

There has also been repeated speculation that Time-Warner may sell off AOL and that the recent acquisitions and formation of Platform A is meant to make the company look more attractive to potential buyers or as a spin off company.

And with Microsoft’s bid to buy Yahoo rejected by Yahoo shareholders, AOL is once again mentioned as a potential merger partner with both of those companies as each seeks to thwart Google’s continued dominance online.

Last September there was talk that Platform A itself could be spun out and become public with an IPO. There was also wide spread speculation in the blogosphere that with the dial up business and its Web portal stagnating AOL might change its name to Advertising.com in an effort to clarify its focus to outsiders.

A Big Plan

A key element in AOL’s ad network strategy is the purchase of Bebo.com. Some industry observers say that in a best case scenario, Bebo can leverage the behavioral targeting capabilities from several of the PlatformA companies to better target certain demographics,and will be able to scale to reach a larger audience with AOL’s Instant Messenger.

While revenue from ads on social networks is likely to reach $1.6 billion this year – up from $920 million in2007 – the lion’s share of that money was from MySpace and Facebook.

“It’s hard to know what AOL is getting,” says Ryan Jacob of the Jacob Internet Fund, a firm that invests in Internet companies.

At the time the Bebo.com/AOL deal was announced inApril 2007 there was some debate in the press that AOL was overpaying for the network, given that Bebo’s traffic over the preceding three months had been relatively flat.The Silicon Alley Insider reported that many AOL senior managers were against the deal and that AOL president Randy Falco and COO Ron Grant alone pushed hard for the acquisition. AOL did not speak with Revenue regarding those issues.

In 2006, AOL’s first attempt at dipping into the social network pool (the launch of AIM Pages) was labeled by industry watchers as a misstep. The project was reportedly slow, weighed down by ineffective JavaScript and patched together from up to seven AOL systems. AOL replaced it with a simpler AIM Profiles platform within six months, aping a Facebook look. Since AOL merged AIM Profiles with its extensive Member Directory it gets about 170,000 page views a day, says comScore, however Facebook gets about 1.2 million. “As soon as it bombed, no one wanted anything to do with it,” an anonymous AOL product manager told TechCrunch.

AOL has also faced challenges on the search front. In2007 AOL went from a results page with links for copy, images, song files and other elements to a cleaner page that looked more like Google’s. Reportedly, the reasoning behind the change was that the diversity of search results was slowing down the pages from loading and that had an impact on revenue per search.

But revenue on search in the new format actually dropped to $156 million from $232 million in a previous quarter.

At the time, the top brass at Time-Warner claimed the search improvements would be good for traffic growth. But traffic in the following four months dropped with unique visitors down 0.2 percent from March to May 2008, to 30.6 million in November 2007 from (what), according to comScore.

“It’s troubling that they didn’t know what the impact of the search change would be,” Richard Greenfield, analyst at Pali Research, says. “This raises serious concerns about their ability to run the business and turn it around.”

The Transformation

From a content and functionality point of view, AOL maintains a variety of strong offerings. Its Truveo video search engine sports 100 million videos to search and is on track to total 1 billion by 2009. Its TMZ.com gossip site is on fire with 10 million visitors per month and a spin off TV show. AOL Music’s free music has an array of videos, news and concert tour information and is second only to Yahoo’s music portal.

AOL TV is the only site that hosts shows from all four of the major broadcast TV networks.

One AOL insider, who asked not to be named, says part of the problem is that AOL is unlikely to gain the same type of dominance it once enjoyed and being held to that old standard is unrealistic.

Before the dot com bubble burst in 2001, AOL’s userbase at its height was estimated to be more than 27 million people (it’s now about 10 million) all paying about $19 per month to stay connected. Its biggest coup was the much ballyhooed merger with Time-Warner in 2000. However, things quickly soured and by 2002, the combined company wrote off $99 billion. And, by 2003 the media giant had removed the”AOL” from its name and AOL head Steve Case from his chairman’s seat.

In 2006 AOL seemed to be making a comeback. It became free (it’s all ad-supported) and saw 46 percent ad-revenue growth in a single quarter, 49 percent the following quarter. Its stock seemed to spring back, too, rising as much as 40 percent in a six month period. At it’s height in 1999 AOL’s stock hit about $147. It currently hovers around $15 per share. AOL revenue in 2007 was $5.2 billion and its websites still draw 112 million visitors per month. Plus, it continues to have one of the most recognizable brand names on the Internet.

“If you just look at what AOL has accomplished in the last three years, it is amazing,” the source says. “I just don’t know how anyone can see that as failure. Most companies would kill to have achieved this level of success in online advertising.

The Changing Digital Landscape

2008 has shaped up to be a crazy year for online advertising – the writers’ strike drove people online and the presidential election and the Olympics are causing advertisers to boost spending in a down market. The timing of these factors has altered media behavior – making the business of online media anything but typical for the year.

How the advertising dollars that moved online in 2008 will be spent is a matter of much debate. Reports indicate that because the digital landscape is changing, advertisers are finding that the tried and true initiatives that performed well a few years ago are now considered passe.

As more and more individuals become their own tastemakers, advertisers need to take into account how users consume information. The days of pushing content have given way to users pulling the content that they want – making it tricky for companies to get a hold of their potential consumers.

At the end of 2007, AdTech and MarketingSherpa surveyed 421 Internet marketers about the tactics they would try out this year and where they plan to spend their budget in 2008.

In terms of the initiatives that marketers plan to increase more than 5 percent of the budget on in 2008, 32 percent of marketers cited PPC, 27 percent of marketers said they’ll increase their spend on behavioral targeting and 26 percent will spend it on rich media.

The survey found that viral marketing and advertising on online video sites, mobile phones and virtual worlds are among the emerging trends that marketers plan to check out this year. Marketers say they are encouraged to try out those tactics for the first time by their agencies.

Ninety-three percent say agencies suggested an increase in spending or begin spending on viral video; 87 percent were urged to spend on viral marketing using networking sites; 60 percent were asked to try wireless ads on mobile networks; and 62 percent said agencies advised advertising in games and virtual worlds.

In March, PQ Media reported that total spending on alternative media – including expenditures on online/mobile, lead generation advertising and consumer-generated media – is predicted to grow 20.2 percent to $88.24 billion in 2008.

Clearly, how companies approach their ad budgeting is going through a major metamorphosis. Of course, online marketing plans and their budgets depend on several factors – including the type of company, product, audience and goals.

The Big Trends

In terms of how advertisers budget their marketing plans, three trends have been shaking up the status quo in 2008 – paid search, social media and ad networks.

The biggest change in the last couple of years is that search ad spending continues to increase – it is expected to rise 32 percent this year to $15.5 billion in the U.S, according to J.P. Morgan Chase.

Some industry watchers call search the greatest advertising medium of all time and many marketers agree. However, Jake Fields, president and creative director of Treeline Interactive, warns that marketers need to be careful because it is easy to waste budgets buying keywords. Fields recommends Spyfu.com, a tool for finding competitors’ keywords.

The rise of social media is one of the dramatic differences between 2007 and 2008. Although a recent Forrester Research report indicates that spending is still relatively small, companies are benefiting from what it offers: consumers contribute brand messaging as opposed to only passively receiving communication from marketers.

There are many ways for new publishers as well as established brands to leverage social media. They could create buzz on a social network before the site launches or do some ad buys on social networks sites, which are cheaper than buys on traditional content like CNN because traditional advertisers are weary of social networks.

The Northern California ski resort, Northstar at Tahoe, has a campaign that encourages customers and staff to post videos and photos with the tags “Northstar, Tahoe” on social media sites such as YouTube and Flickr – with the prospect of being featured on the Northstar site or even the possibility of winning complimentary services. Fields explains that this initiative enabled Northstar at Tahoe to quickly expand its presence within these social media sites from a couple hundred entries to thousands of social media posts that positively represent their brand.

Also gaining traction in 2008 are advertising exchanges, which allow advertisers to bid for impressions on a CPM basis. Cam Balzer, vice president of emerging media at DoubleClick Performics, explains that ad exchanges bring the benefits of search marketing to display advertising – namely, the ability to test a large number of placements (an ad of a particular size on a particular site or even site section) dynamically (no minimum or locked-in budget), to bid more for placements that are driving strong ROI and less for placements that aren’t working.

More and more display inventory of an increasingly high quality is becoming available via advertising exchanges, and this trend should continue as publishers get comfortable with selling inventory in this way.

Balzer says that for a minimal investment, companies can test various approaches to building awareness of their brand. They can secure a large number of impressions at a low CPM to increase reach. If they are also selling advertising on their site, they could sell ad inventory via an exchange to improve the CPM yield of their site.

Regardless of whether companies attempt to leverage one or all of the big online marketing trends for 2008, the ever-evolving interactive space is moving away from cookie cutter campaigns that seem too inflexible to yield results.

To rise above the clutter, companies need to aggressively try the latest tactics like product placement in games and paid ads on networking sites. Mixed approaches are required – recent research finds that when search and display advertising are combined, clicks increase after people see the display ads.

Because there is no silver bullet, marketers need to constantly analyze and optimize their mix. Fields says that campaigns are all a matter of trial and error – it is important to try, pull back, measure, analyze, and then try again.

Kristopher B. Jones: The Small-Town Big Man

His speech is peppered with “awesome” and “ready to rock and roll,” as if he were fresh out of high school. He’s only 32 but he feels luck has a lot to do with his good fortune. He took what was basically an idea to sell jam and turned it into a successful online marketing company.

But we’re jumping ahead. Jones is a small-town fellow. He grew up around the quiet northeastern Scranton, Pa., region – in towns with quaint names like Forty Fort and Wilkes-Barre. He still lives in basically the same area where he was raised and headquarters his business not far from those same stomping grounds.

He knew early on that he wanted to be in public service – drawn to the tantalizing returns of politics. After graduating high school in 1994, he got a full scholarship to Villanova University to study experimental psychology in 1998 after graduating from Penn State, but questioned whether he really wanted to be a clinical psychologist.

During that period, his brother Rick called and asked, “What do you think about selling grandma’s Mississippi mud over the Internet?” Jones says while he was the resident computer guru in school and was sitting on a lot of school and credit card debt, he was pretty committed to going to law school. He decided he would finish out his law degree and start this gourmet food business.

Grandma’s Mississippi mud was actually a kind of jelly he had eaten as a kid. He calls it a kind of gourmet dip. He typed the ingredients into the Web and out came the popular Northeast dip called pepper jelly. But Jones didn’t want to sell just another pepper jelly. In the end – and after consulting a friend in the food business – they decided on “Grandma Jones’ Originals Pepper Jam.”

It Started With the Jam

That, Jones says, was when his entrepreneurial spirit came out. He could point to other adventures in his business past – the lawn business he had in school and the 1-900 psychic service he started, even day trading – but they never really made any money.

The pepper jam, on the other hand, had legs. Through contacts in the gourmet food business, it started to get some traction. The business was started in 1999. “My brother was the creative side and he had all these flavors he wanted to do,” Jones says. “It all happened pretty quickly. I was going to do all the marketing. I drove the branding and launched the website called pepperjam.com. We personalized it with pictures and stories.”

Soon they realized in order to get traffic and sales, they needed to rank higher in the search engines. The most obvious way at the time was to cycle in fresh content. So, they then came up with the idea to interview famous chefs and put those up on the site. In the end, they posted interviews with the likes of Paul Prudhomme, Emeril Lagasse and Jorge Bruce, to name just a few.

Bruce sampled the product and loved it. At the time Bruce was looking to hire a consultant to get his brand and other chefs online, Jones said. “I will try to cook with this product,” he told Jones. “He may have thought we had offices when we were really operating out of a kitchen,” said Jones. Bruce suggested QVC. “I went into shock,” says Jones, “and had to put the phone on the bed and take a breath a minute. At the time, he was the highest-grossing chef on QVC.”

The chef interviews were getting a lot of traffic now and the question of how to monetize it all became important. That’s when Jones joined LinkShare and started adding affiliate links (his first check from ValueClick was for something like $37). He was just about to leave for law school and was trying to make money through affiliate marketing when in early 2000, he says he began his marketing journey in earnest. “I still own 50 percent of the gourmet food business,” he said. His brother told him to take the marketing business and he’d handle the product. “I knew that the Net marketing side of this requires work. I just started to build out websites – build out content based on a theme. My first was cookware.”

Also in 2000, he adds, Google came out with AdWords. “I was generating close to $100,000 per month in affiliate profits,” he said. He was doing this while doing his consulting work and serving as law school class president two years in a row.

“Once I had money, I wanted to do something with it,” he says. He put all the cash he had been earning while in school into this single idea – to turn his super-affiliate status into a new kind of marketing business – pepperjam.com. “We got an office. I hired my best friend as COO. We knew we could hire smart, young professionals and could help these businesses that were coming online and had no clue what affiliate marketing was,” Jones says.

Getting Into the Affiliate Game

2003 was the breakout year. Jones didn’t realize the impact his company was having until he went to his first LinkShare symposium (they got invited through Overstock.com). “We went to this event not knowing anybody and thought no one knew who we were,” he says. “My attitude was, ‘I’m a super-affiliate, let me manage your affiliate program.’ We were blown away.” When a merchant rep found out who he was, she hugged him. “You’ve been making us so much money,” she told him and introduced him to a whole bunch of merchants. “We were very well received,” he says.

With that boost in his pocket, Jones parlayed that excitement into a new small office and started to hire employees. From 2003 to 2005 he built his client list. From 2005 on, he says, it took on a life of its own. In 2006, the company was about 28 employees. Then pepperjam made Inc. magazine’s list of the 500 fastest-growing companies in the U.S. It was the only affiliate marketing company on the list. “As a search engine marketing agency, we were one of three with iCrossing and MoreVisibility.” All he could say was, “It was just a big party. We’re pepperjam, we’re in the black and we’re an Inc. 500 company.”

While still nurturing a desire to serve in a public way, he was invited to speak at a conference for the first time in 2004. He’s been hooked ever since and speaks quite often all over the country. It kind of feels like he’s class president all over again.

Somewhere amid all this work, he did manage to get married – to someone who works for the company. He said while his wife, Robyn, and he did attend the same high school, they weren’t pals. One night when home from school for a spell, his COO and he went out for a drink and spied her. They remembered her from high school. Jones sat back and watched his COO walk over and try to flirt with her. Finally, Jones joined them and he said they hit it off right away.

“She kind of asked me out after 60 seconds,” he says, “and here she was talking to my friend for the last 15 minutes; but we’ve pretty much been together ever since.” She wasn’t happy at her other job and Jones asked her to work for Pepperjam.

“I know you don’t want to work for your boyfriend, but I’ll have you work from home and write an employee manual or something. We can have you write out some client case studies,” he remembers telling her. After about a month, she began to come into the office and has been with the company for two years.

Growth Spurt

Jones says there has been a lot of interest to be acquired and from venture capital money. Last year, with about 50 employees “we had to think about crossroads – and decided to focus on our own technology,” he says. The company decided communication in this industry was the problem. “It is difficult to get in touch with your affiliates to admonish or to praise them,” he says. There was a lack of affiliate transparency. “We said, ‘We will tell you who are the key affiliates and can protect your brand.'”

This led to the notion of launching a Pepperjam network. Jones worked and consulted with hundreds of affiliates and merchants to preview the network – robust players such as Affiliate Classroom’s Anik Singal, and super-affiliates Lee Dodd and Jeremy Schoemaker, to name a few.

In January 2008, he launched pepperjamNETWORK. This essentially turns Pepperjam.com into a technology company with exclusive merchants such as luxury brand Judith Leiber, clothier Ben Sherman and Jelly Belly. Jones sees this as a super-transparent network that can be an alternative to the big three – LinkShare, Commission Junction and Performics – as well as an alternative to ShareASale. “We are not going up against the big three networks,” he added. “They are much better financed than us and bigger. There is still only one investor in pepperjam and that is me.”

Jones proudly says pepperjam.com now has about 105 employees in a 13,000 square foot floor of a building in Wilkes-Barre. He has five executives and 15 senior-management-level people. He has divisions now – online media planning and buying, search engine marketing, pepperjamNETWORK and full-time salespeople – their first. In the next 18 months, he predicts 300 employees. But he thinks of everyone as family. His wife is director of affiliate marketing; his bulldog is in the office every day. He doesn’t want it to be a corporate environment – there’s Free-Pizza Fridays, ping pong and “Guitar Hero” on the floor. In early 2007, they launched a corporate blog where a randomly chosen employee is given less than 30 seconds’ advance notice to come up with a presentation to be videoed and then posted to the site (some can be found on YouTube; some featuring Roxy the bulldog).

Amid all this success, Jones was approached in the early summer of 2007 by publisher Wiley to write a book on SEO and search marketing. “Search Engine Optimization: Your Visual Blueprintâ„¢ to Effective Internet Marketing” will be published this spring. “In fact,” he said, “I had always dreamed of writing a book in college. I always thought, how can you make a difference? I can join the clergy, be a great father or write a book.”

If that isn’t enough on his plate, Jones and his wife are expecting their first child in August. That’s not going to slow him down. “We are very focused on building out what we are creating,” he says. “We have a bunch of families now; we’re not just a small family anymore. I’ve always been the kind of person that believes that my time hasn’t come yet. I want to focus on being a great father, and from a business standpoint we want to become a great affiliate network. I want to see where we take it.”

While the future seems like a busy one, Jones notes that “pepperjam has just started.”

Video Validation

All of the predictions that 2007 would be the year of online video came true in spades – it rapidly gained in popularity as a medium last year and its momentum continues today.

The long-lasting Hollywood writers’ strike possibly hastened the migration of people to pass their time visiting online video sites due to the lack of television programming. It’s not just old episodes of “Grey’s Anatomy” they are watching online, but all sorts of content.

A Horowitz study found that news segments and nonprofessional online videos are among the most viewed programming (see bar chart on page 036).

A December study conducted by BurstMedia, a provider of advertising representation, found that approximately seven out of 10 respondents (72.1 percent) have viewed online video content. Although young people represent the largest segment of video watchers, a majority of all age segments have watched it – including over half (58.6 percent) of respondents 65 years and older.

To capitalize on the opportunity, new video offerings are popping up all the time that provide innovative twists on everything from programming to platforms. In March, FastCompany.TV, an online video network that covers technology trends and products, launched. Renowned blogger Robert Scoble serves as managing director, and his popular daily video series, ScobleTV, is one of its several programs.

Seesmic, a platform that uploads more than 4,000 videos per day, has Flash-based social features aimed to enable conversations between users. Participants record short videos in which they ask a question or express their opinion. Other users then record and upload replies to the videos, facilitating a back-and-forth exchange.

Video Revolution

Online marketers were quick to join the video revolution – eager to try out the best ways to leverage its versatility to enhance their interactive efforts. These marketers are moving quickly with good reason – a February 2007 study by The Kelsey Group found that online video converts well. Of the 501 adults asked about whether they had viewed a video ad on the Internet, among the 59 percent who said yes, 43 percent checked out a website, 22 percent requested information, 18 percent went to a store and 15 percent made a purchase.

Jim Kukral, an online marketing consultant, explains that people watch online video because they want to absorb information in the least taxing format possible.

He believes that the easier things are for consumers, the better conversions will be, which is why he thinks online marketers should not just be taking advantage of video, “they should be leading the charge.” Kukral himself is so bullish on video that he has vowed to only create video or audio content as opposed to text posts for his blog in 2008.

Mark Wielgus, founder of the site 45n5, is another online marketer pleased with his foray into video. Beginning on January 1, 2008, he pledged to create a video every day for 365 days in a row – even weekends – with the intention of gaining a voice and being a personality on the Web. The videos, like his site, offer guidance and chronicle his own quest to make money online.

Wielgus has different theme days; for example, The Road to Affiliate Summit Sundays, and ShowYourAdHere Mondays. Of the approximately 100 videos he has up on YouTube, he gets about 300 to 400 views per day. One of the lessons he has learned is to include an overlay of 45n5.com at the bottom of each of his videos so that he doesn’t miss out on the branding opportunity when they get distributed.

Promoting Products

Buy.com was an early adopter of online video and has seen tremendous results from its video program, BuyTV. The half-hour on-demand weekly show launched in May 2006 on its site and through distribution partners like iTunes and YouTube, and is also available on broadcast television.

BuyTV showcases the latest in high tech gadgets and Buy.com’s most popular shopping categories. While viewers watch a segment, they are able to make a purchase by clicking a button next to the video.

Buy.com’s vice president of marketing, Jeff Wiscot, and Marketing Director Melissa Salas, who is one of BuyTV’s hosts, say video is effective for selling to people who are not particularly tech-savvy – because they can see an explanation of a product’s features and how the product works. Salas notes that it’s a good tool for electronics, which sometimes require longer purchasing decisions.

Although Buy.com can’t release specific metrics, the company says video has helped conversion rates drastically – in some cases up to a multiple of seven. As an example, Wiscot says that if the company were running an MP3 player promotion with a 2 percent conversion, it could go up to 14 percent on the high end if BuyTV put up a video about it.

Last fall, Affiliate Summit co-founders Shawn Collins and Missy Ward launched WeViews.tv, a video reviews site of products and services that range from the Garmin Street Pilot to iTunes.

In addition to making videos for the site, Collins and Ward ask users to be “consumer reporters” and contribute their own video reviews, which Ward thinks enables affiliates to get their feet wet in video without the trouble of building and marketing their own site. If WeViews.tv accepts and publishes the video, the submitter receives $10, a model similar to Nuuvy.com’s.

WeViews.tv videos feature what Collins calls a “subliminal call to action” by including the URL for the product at the bottom of each video. For example, the video that reviews Sirius Stiletto portable satellite radio has the URL, www.weviews.tv/stiletto.

Collins says the overall typical conversion rate for products is about 10 percent. Ward has had good experience with shoes; noting that both the Chinese Laundry and Ugg Slippers videos have been the biggest – converting at nearly 16 percent in December, and the Oakley Thumps sunglasses converted at 12.5 percent the same month.

On the WeViews.tv site, transcriptions of the videos are posted with product specifi cations added to the text to provide more details. Collins explains the text is keyword-rich and therefore gets indexed in Google fairly high.

In the future, WeViews.tv might make the videos clickable, and Collins says he could use a vendor like WebVideoZone or Bubble- PLY to do that. Currently the videos are powered by Revver – a service Collins likes because of the quality and because it syncs in well with WordPress blogs.

Revver’s senior vice president of business development, Brian McCarthy, explains that Collins and Ward upload their reviews to Revver and then post them on the WeViews.tv site. Revver delivers ads within the player and shares that revenue with them. Any revenue WeViews.tv makes through ads on the browser page they keep for themselves. Because the WeViews videos are in the Revver library, they are syndicated out to the Revver network for additional distribution.

Video Is Versatile

A different type of product that Collins promotes through video is the conference he co-founded, The Affiliate Summit. Because conference registration isn’t an impulse purchase, Collins says he works on numerous touch points to sell people.

Users who want to watch sessions from the Affiliate Summit are required to double opt-in to the weekly Affiliate Summit newsletter, where content supplements the videos in an effort to sell the prospects.

Viewers can then watch full sessions from the conference at the Affiliate Summit site, which is hosted by Fliqz.com. Each video includes an Affiliate Summit logo in the bottom right that’s clickable to the registration page. But because there is no indication that the video is clickable, Collins does not have specific conversion information.

Kukral also makes promotional videos. In 2007, he made five simple videos to promote his online marketing consulting business and uploaded them to YouTube. Kukral now gets three to five calls a week from people who say they found the videos by searching for the terms “online marketing” on YouTube.

In January, Kukral launched The Daily Flip, a show about online entrepreneurism and marketing that features tips, tools and reviews of products. Kukral films each show using a Pure Digital Technologies Flip video camera, which he says proves the point that anyone can make good video with inexpensive equipment.

Pure Digital gave Kukral a Flip camera to create a promotion, which Kukral set up for the day of the Super Bowl. During half time, he posted a video on his blog with a phone number and the first person who called won the camera. The promotion’s goal was to drive people to his site and subscribe to his videos.

Kukral says there is a number of ways to monetize The Daily Flip, including sponsorships, partnerships with networks, commercials and pre- and post-roll ads in the videos. If the site gets enough traffic, he could become a YouTube Partner and YouTube would sell ads for the site that are contextual and give him a cut.

Like his consulting business, Kukral promotes the program through video-sharing sites. He recommends TubeMogul.com as a quick way to upload videos to several sites at one time. Although there are more than 100 video-sharing sites, Kukral pays the most attention to YouTube because of its 31 percent market share of all video sites on the Web.

Although entertaining videos have been among the most popular ones on the Internet, videos that solve problems are also sought after. For this reason, Kukral recommends VideoJug.com, which is an instructional site that teaches people how to do things such as how to use a Pilates balance ball. Many of the videos featured on VideoJug are professionally made and don’t credit the creators, but there are some user-generated areas on the site that give producers an opportunity to brand themselves.

In February, three ex-Googlers launched Howcast, a site that features both professionally shot and user-generated instructional videos. The video ads are in the form of clickable overlays that pop up in the bottom part of the screen. Each video is tagged by topic and each one has a visible script, which make them searchable. A cookware company could purchase spots in the how-to-fry-an-egg video, for instance, or buy paid links in the list of necessary equipment that is part of the video.

Adding Existing Video

Online marketers don’t need to create video to promote their products; they can add merchant videos to their sites to enhance their site’s content, give it a more professional appearance and potentially push it up in the search engine rankings.

James Nardell, an affiliate manager for AMWSO, an affiliate marketing and affiliate program management company, says that he has seen video help with conversion for programs such as Gaiam, an organic and green-living lifestyles company; and Panda Security SA, an antivirus software company, which has cartoon videos that explain how viruses work.

Nardell, Gaiam’s affiliate manager, says that Gaiam has affiliates who have added videos to their sites and the conversion rates have increased by a staggering 80 percent, according to tracking through LinkShare. Gaiam realized that the affiliate channel was a great way to utilize their extensive inventory of video content.

Dori Schwaiger is a Gaiam affiliate who, with her daughter, runs TopHealthSpot.com, a coupon site that focuses on wellness and health. When she built the site in late 2006, she began integrating video and, with the help of Nardell, designed a “health videos” tab at the top of her site, which she says people go to directly.

Schwaiger attributes the approximately 46 percent improvement in sales of health videos during 2007 to the “health videos” tab as well as to the Gaiam product name – users find her site because they optimize the site for those keywords.

In the “health videos” section, there are previews for each video so people know what they are buying, which Schwaiger believes is important for conversions. Nardell agrees that video works best when it is preselling content – it provides a brief example of why they should buy the product.

Schwaiger uses it as much as she can on her site, including video from Drugstore.com and Mochila. Even though it eats up her bandwidth, she says it’s a wonderful tool.

She says it is easy to add video to her site through the WebVideoZone system. It hosts videos and makes it simple to customize the video files by adding text links to the video player, graphics that get displayed on the video player and URLs that redirect when the video has finished playing.

With WebVideoZone, affiliates add their unique affiliate ID code via a form, and cut and paste the resulting HTML code into their website. Once the code is added, the video is available on demand on the site as a stand-alone video player, all of which is an affiliate link.

Gaiam’s Nardell says that once affiliate managers come up with video creative for their affiliates, they can change the video via the WebVideoZone control panel at any time and the video automatically updates on each affiliate site.

Video Widgets

Qoof, a video commerce platform that matches e-tailer videos with Web publishing channels, enables the affiliate community to leverage video widgets. Qoof offers a rich media video widget that is Flash-based and focuses on on-site sales. Product information is available through the widget, and embedded video shopping functions like price comparisons reduce the chance for a potential buyer to leave the site in search of more information.

Jonathan Stefansky, executive vice president of sales and marketing at Qoof, says that it’s easy for affiliate managers to create different widgets tailored for specific programs. They can make changes on the back end with the latest data, which auto-updates affiliates’ widgets so they can offer the newest promotions. Although he can’t share specific numbers of his clients, he generally sees five to 15x higher clickthrough rates than banners or text-based affiliate links.

Qoof has integrated its widget as a Flex Link in LinkShare, which makes it easier for affiliates to grab the widget code to embed in their websites or blogs the same way they would grab code for banners and text-based links.

Video-Sharing Sites

Another way that publishers can monetize video is to add videos from video-sharing sites like Adotube.com, Blinkx, Magnify.net and Revver to their own site.

For example, affiliates can post a video from Revver on their site or social network page, or promote it through email, sneakernet or peer-to-peer sharing.

Revver earns revenue from selling pre- and post-roll advertisements within videos.

For sharing videos, Revver affiliates earn 20 percent of the advertising revenue – the remaining revenue for each video is split 50/50 between the video creator and Revver. It is made possible by a RevTag, a video file that is promoted by an affiliate that contains information about the video being played and about the affiliate.

In addition to the commission-earning possibilities, adding video from a video-sharing site can help publishers add relevant information to their site. If a publisher has a home improvement site, they could choose video from the Ask- Builder.com channel on YouTube where Tim Carter, a You- Tube partner, offers his videos.

With Google AdSense Video units, affiliates can add video from YouTube Partners to their sites and earn revenue on the ads. The ads are paid on either a CPC or CPM impressions basis. Publishers can choose the type of ads in video units – they can be contextually targeted or they can choose from a list of categories like music or technology, or choose to serve content from a specific YouTube partner.

Affiliates install an AdSense player in their site and customize its size, theme and layout. They can choose to have Google/You- Tube determine the best type of videos to show on their site by analyzing the content, or affiliates can choose individual content providers or select categories of content.

Video’s Future

While 2007 is being called the year of online video, industry watchers say it’s just the tip of the iceberg. Revver’s McCarthy lists some of the reasons he thinks it’s just getting started: bandwidth is coming down in cost, more content is coming online and being indexed well, and video quality and advertising continue to improve.

There’s more than one way to cash in on the video revolution. Online marketers are creating their own video as well as leveraging existing video to enhance their programs and improve conversions. And like all uncharted territory, there is much trial and error. Still, it’s clear that video is not going away and marketers that incorporate the medium are benefiting.