The Evil Marketer

In part 1 I set forth a basic argument that word of mouth or influencer marketing (or open source or citizen marketing or any number of related terms), while always the most powerful marketing technique has thus far been an off-grid activity usually unmeasurable (and thus unmanageable as far as ROI is concerned) by us evil marketers. Because the internet and associated technologies now enable the tracking and management (to a limited degree) of influencers, the time has come for an organized influencer network that should behave in much the same way as an ad or affiliate network.

There is one major reason such a thing has not yet been created — as soon as you create a system to reward people for promoting brands it’s going to devolve into a situation where the “recommendations” carry just as much weight (and sometimes less) as a normal advertisement. In other words, open up an influencer program to anyone and any brands, and you end up with a basic affiliate network. Affiliate networks are great, but they inherently suffer from the same problem as other traditional online advertising in that ads may be convincing, but we don’t inherently trust them. There are few exceptions to this, and those fall into the realm of affiliate links disguised as blog posts or other such “stealth” endorsements (with a small percentage of those being legitimate recommendations that simply run through an affiliate link).
The influencer network would have as its publisher base those select people from each vertical who command enough respect and trust that they can act in the same role as a “paid” or “celebrity” endorsement. These marketing relationships occupy the one, most valuable niche in all of advertising — obvious advertisements that consumers still inherently trust (at least when compared to normal advertising).

The influencers in the network would choose the brands they wish to endorse (at least initially), based on genuine respect and love for the brand, but would be compensated for that endorsement. The method of endorsement and compensation for it could vary widely based on vertical and influencer “level”; a rating and/or trust system would be in place for users (both inside and outside the network) to vote in various ways to change that level.

The devil’s in the details of course, and here are a few of them:

• The influencer would need to promote products or brands in a mostly measurable way, via tracked links, coupon codes, printable coupons, or email subscriptions; they would also need to brand their site/sites in a way that is agreeable to both influencer and advertiser
• The influencer could set desired rates and promise a certain level of traffic; these rates would generally be a paid contract over a certain term, but could include bonuses based on CPA or CPC
• The influencer must agree to never promote rival products or brands while under contract
• A rigid approval and vetting process would need to be in place for entry as an influencer; applicants would need to show proof of influence as well as traffic and/or previous affiliate commission numbers, and the applicant would need to concentrate on one vertical
• A network managed by one individual but consisting of several sites and blogs could apply as an influencer and thus use its aggregate influence under one influencer account

You have questions, I’m sure. Here are answers to some of them:

Isn’t this the same as traditional sponsorship or endorsement deals available in offline advertising?

Yes, but with a crucial difference: offline endorsements and sponsorships are always celebrities or media with a mass appeal and almost always concentrate on pure brand marketing. An online influencer network would allow advertisers to get endorsements from very niche markets, and could even target local markets just as easily, all in an open marketplace that had the full weight of ROI measurement behind it and thus turn endorsements into direct marketing.

How will an advertiser know to trust the impact of an influencer?

The network’s main concern will be managing the value of influencers, and can do this with metrics from previous relationships as well as ratings from other inflluencers and consumers. Advertisers can always sign short term contracts to “test” the influencer, and the results of that test will be a part of the influencer’s value moving forward.

How will the influencer network make money?

By charging a percentage of each contract to the advertiser, as is common in affiliate networks.

How is this different from an affiliate network?

There is some crossover, but affiliate relationships are almost always CPA and put the burden of risk on the publisher despite what potential influence they bring to the table. An influencer network puts the burden of risk back on the advertiser but softens it via the metrics that online advertising gathers. It creates a much more formal relationship between publisher and advertiser as well.

Aren’t there sites and blogs already doing this?

Yes, of course. The problem is that the advertiser is responsible for finding these sites, working out the contract, and managing the relationship, and publishers don’t have a central place to go to find all of these advertisers. There are a handful of existing ad networks that claim to do sponsorship deals, but they are usually with their own properties. Furthermore, offline mass marketing endorsements are easy in the sense that the advertiser already knows who to approach; online verticals are made up of hundreds of niches, all of which may need a certain “spin” on the marketing effort, and it would be nearly impossible for any agency to find and rate all of them. A standard as well as a network is needed to coordinate this.

Do these endorsements always need to be online?

No, and that’s where things get really exciting. Online advertising is finding ways to move offline, via mobile phones, GPS, instore linkups with online content, and more. And that’s just the beginning.

To discover more about the potential future of influencer networks, stay tuned.

Love,

The Evil Marketer

This is first in a short series of posts that describe the Evil Marketer’s proposal for an influencer network; a radical new concept that could affect the way many of us experience marketing and brands based somewhat on the idea of “open source marketing” or “citizen marketing” introduced by other authors.

When yours truly thinks of the ideal marketing scenario, there are 3 core issues to consider and another, like the one true Ring, that rules them all. The three are:

1. Right Product
2. Right Time
3. Right Incentive

Almost every aspect of online marketing revolves around these three core principles. Google AdSense is a perfect example. It, by its very nature, already has #1 and #2 covered — the user is looking for the product right now (Right Time), and Google does its best to find the best match for what the user is looking for (Right Product). If the user sees a link that guarantees x% off, or if instead they find the merchant through a combination of Google and a coupon site, then all 3 are covered — a marketer’s perfect storm. All that’s left is to convert them quickly. Because if it’s not quick, there is always the potential for the One That Rules Them All to intervene:

Wife: Whatcha doing?

Husband (finger hovered over the “Order” button): About to buy a new X. The price is right, I need it ASAP, and I even found a 10% off coupon.

Wife: Just as long as it’s not Brand Y. My Dad [who is an expert on X’s of all kinds] says its the worst on the market and only suckers buy it.

Husband: Oh. I better keep looking then.

I am, of course, talking about the influencer.

Influencers aren’t always steering people away from products; in fact the internet has grown the positive aspect of the influencer more than anything else in history. What is the one thing in the above scenario that would have prevented Husband from listening to Wife after the damning opinion of Dad-in-Law the influencer? If Husband has seen a series of 5 star reviews at Amazon, headed up by a top 100 Reviewer who said that Brand Y made the best X he’d ever purchased.

Influencers come in a variety of shapes and sizes, but they have a few things in common:

• They have more influence in certain niches/verticals than in others
• Their influence can be weakened or enforced greatly by the results of their recommendations
• Their scope of influence can vary widely, from one friend to millions of people
• Their influence can drop if they are being compensated for their recommendations (but not always!)

And one final commonality — the influencer and his or her recommendations, despite being the most powerful marketing force on the planet, have been almost entirely hidden from a marketer’s view or measurement.

Until now.

No, we can’t listen in to your private conversations and track a friend’s recommendation of a new movie to the actual ticket sale — yet. But most online word of mouth type marketing and all affiliate marketing (much of which is based, in some part, on an influencer recommending a product) can now be tracked, and as soon as mobile marketing takes the next step and starts letting you refer products and services and movie tickets to your friends via a trackable coupon or other incentive, then we will be watching over your shoulder, dear consumer.

The problem is that most of this is still de-centralized and segmented; Amazon reviewers, mobile marketing, social network members recommendations (especially recommendations from those with a lot of “friends”) — none of it really works together so an advertiser has a clear sense of where the influencers live and more importantly, how to get them talking about their products.

In part 2 I’ll discuss how these influencers need to stop giving away their “influence capital” for free and start monetizing it, and how a centralized network (or series of networks) needs to be developed for advertisers to strike deals with these influencers in way that doesn’t decrease the trust the influencer has gained.

Love,

The Evil Marketer

There is a healthy (or unhealthy as the case may be) majority of traditional advertising analyst types who simply don’t understand what is happening right now in marketing. They see all this web 2.0 innovation, consumer generated media (CGM), massive shift in publisher power, rise of social networking, less control over brand, etc, as a “fad.” If you’re one of these unfortunate souls please take a moment to listen to the Evil Marketer give you the low down on the paradigm shift going on in your industry to which you are somehow recklessly oblivious.

Here’s a very good example of the arguments that these pundits raise in defense of their position. Let’s break them down one by one and show them the error of their ways, shall we?

1. “…it’s hard to imagine how there won’t eventually be a backlash against ubiquitous user-generated video clips, blogs and the like.”

Good point. I mean, there has certainly been a backlash against all those billions of informational web pages out there that users can access for free on their own time. It’s just too much information and too easy to find and almost always gives me exactly what I am looking for! People are turning off their computers and flocking back to the library and the Yellow Pages in droves. I’m sure people will grow tired of endless, free entertainment that is unavailable anywhere else and manages to speak to them in specific ways no other media ever has in the history of the world. They’ll just throw up their hands in frustration at all that entertainment and go back to watching Matlock.

2. “At what point do we have social saturation when every person and every marketer tries to film every idea they’ve ever had? The best content will always rise to the top but there will be a ton that probably won’t get covered and people may stop posting when it becomes evident that nobody is interested…”

Yes there is something wrong with a world where everyone is free to create art and get it seen by billions of people. And we all know that TV and movie and music production companies are experts at producing great content that appeals to every person. Please. The point here is there is an audience for almost anything, no matter how small. And artists will create art even if no one cares; it is the nature of who they are. They will not stop, and if anything their output will grow because somewhere out there is someone who will like what they produce.

3. “…what ‘You’ need to do is actually generate profits and revenues in order to have a real say. And it’s unclear just how effective ‘You’ will be.”

Ah, this is the crux of their argument: if you produce some crap that only 5 people watch then you can’t monetize that and it’s essentially worthless. Stop thinking in traditional mass media terms people! Of course you can’t monetize an audience of 5. But if you have a million videos that each has an audience of 5, not only can you monetize it, you can target your marketing like a laser AND measure response in real time all the way to purchase. Not to mention much of the “advertising” will be the content itself, tailored in a very specific way to a very niche audience, produced for FREE by your own customers. How can you not get that?

4. Here’s a longer excerpt supporting their argument in #3:

To wit, one of the most buzzed about online videos, of two Chinese kids lip-synching to “I Want It That Way” by the Backstreet Boys, has been viewed about 1.3 million times on YouTube since the video was added to the site in November, 2005.

Meanwhile, a show like NBC’s “Studio 60 on the Sunset Strip” or CBS (Charts)’ “Smith,” which was the first cancellation of the fall TV season, are branded as failures even though they generated nearly 10 million viewers a week and are supported by advertising.

Oh my God can you be more clueless? You’re actually comparing the relative strength of a stupid video 2 guys in China made with a webcam with shows starring recognized actors, produced for millions of dollars, written by a team of professionals, and which were probably tested before audiences for weeks??? The point is that a million people have watched that video even though it cost nothing to produce and starred nobody. It wasn’t monetized because people like you haven’t figured out the best way to do it yet. As soon as YouTube gets off its ass and starts running 5 second pre-rolls to its most popular videos, a video like that could generate millions in revenue — again all of it tracked down to the timestamp of purchase. And it might only cost you per click (or maybe even, dare I say it — CPA).

5. “But so far, the amount of money people are making is negligible.”
followed by
“YouTube probably will be a winner [as well as MySpace].”
followed by
“But the scores of startups that have cropped up in the past two years to challenge the YouTubes and MySpaces may find it difficult to profit from ‘You’ no matter how creative ‘You’ are.”

Ok, first you argue that you can’t make money distributing CGM. Then you say that YouTube and MySpace actually will make money. Then you qualify that by saying no one else will. That sound you hear is the Evil Marketer sighing very deeply.

6. “‘This idea of having customers generate ad campaigns would be a good idea if it really was consumers,’ said Stevens. ‘People winning these contests are not coal miners, cab drivers or people who sell shoes at Bloomingdale’s. They are people at small agencies or independents.”

And your point is? That this whole CGM thing won’t work because a shoe salesman can’t produce a winning SuperBowl commercial? Not only are you obviously wrong about the potential influence of CGM, you’re also wrong about the power of that shoe salesman, and THIS is where you are really missing the boat.

Let’s take a look at a lifetime shoe salesman; we’ll call him Frank because I suspect that’s what his real name is anyway. Maybe he’s making what, 40k a year? How much knowledge does he have about shoes? How much influence does he have when a customer comes in and needs to make a decision? If he could more efficiently monetize that knowledge and that influence somehow, do you suspect he could make a lot more? I do. The system may not yet be in place for this, but I believe one day there will be organized networks of influencers like the guy who’s sold 50,000 pairs of shoes in his lifetime. If I’m looking online for a pair of shoes and there was a network in place to allow Frank to assist me in a decision, and if he was paid a flat rate by a specific online store just to have access to him plus a commission on the shoes he sold (all trackable of course, including what pair of shoes the customer originally wanted and even what ad they clicked on in the first place to get to the site), not only would he be making a lot more money selling a lot more shoes (from home), but I would be willing to continue to buy shoes from that vendor there just so I could get Frank’s help, because I like Frank and he is a hell of a lot smarter than any automated “suggestion” system or FAQ page.

What does that have to do with CGM you ask? Good question.

The point is that the internet allows everyone a way to better exploit and monetize their talent. It has enormous economies of scale, ultimate reach, and requires very little real-world overhead or infrastructure. All advertising is, at its essence, is a way for clever people to get people talking about or interested in a product. Remove the infrastructure required in running a major ad agency, expand your potential customer base to the billions, and tap into the resources of thousands (maybe millions) of smart people, people who have influence and expertise and maybe already love your brand, and only pay them if they produce results.

Or not.

Love,

The Evil Marketer

Feel free to mark today on your calendar as the day Google officially lost the right to claim they do no evil. Via JenSense, they’ve updated their policy to ban sites that use other ad types of the same appearance and color as the AdSense unit on those sites. This essentially means they are telling their publishers that they can’t try similar ad units from other ad networks or affiliate programs if they want to keep using AdSense.

Feeling the heat are we?

As I mentioned just yesterday, there are competitors to AdSense popping up everywhere in the form of private labeled PPC networks, and all of them offer things Google can’t or won’t. Meanwhile Yahoo and MSN are upgrading their networks and leveraging the sweet sweet data they gather from their userbases to deliver better targeted ads, among other things.

As an Evil Marketer, I am torn. I would usually be more than happy to welcome Google to the ranks of evil marketers (if only I could charge dues), but preventing publishers from optimizing their sites — which usually requires some sort of A/B testing of competing ad units — is against the Evil Marketer creed. I’m afraid I can’t endorse this kind of thing. Google has turned into another monopoly trying to ward off competitors, and monopolies aren’t good for anyone.

AdSense rules the PPC world right now, but there is an emerging model that promises to make some dents in their formidable armor. Like all else beautiful in marketing right now, the key is niche-ifying things. If you have a content site with a large community of users, why would you use generic AdSense when you could use your own PPC ads from advertisers you have a direct relationship with? The answer — you shouldn’t. You’re missing a huge cut of the action, better targeted ads, and the opportunity to do innovative things with the text ads that Google may not allow.

Courtesy of Cost Per News, RockStar Traffic is one such case. If you want PPC ads on their pages to reach their sweet sweet demographic of casual mom gamers and hard core gamers, you don’t go to Google and hope the ad makes it there, you just sign up directly and place your bids. As it should be.

If you want to do this sort of thing yourself there seem to be plenty of solutions popping up. Quigo has one, and ValidClick offers one that has click fraud tech built in; there’s that innovation I mentioned. Is this the beginning of the end of AdSense domination? Probably not, but certainly some of the larger publishers may consider this option.

Love,

The Evil Marketer

Courtesy of Andy Beal , marketers are finally finding a way to use email to market that doesn’t make everyone detest us. I generally stay away from email marketing, mostly because I don’t respond well to it myself. One of the few places it works is when it’s included seamlessly in a newsletter from a trusted source. Amazon does this well, for instance — they rarely email me but when they do it’s almost always to let me know about something I actually want to buy. They have led the way in leveraging the information they gather; information that is submitted for free from its users, of course.

Social networks are an ideal place to turn what is usually an obnoxious way to grow an email list — finding third parties to get users to opt in — and turned it into exactly what it should be: allowing the niche and its alphas to determine the best newsletters that speak to the community, and encouraging the community to sign up. Advertisers just have to find these communities and work with them to find out what content they want, then cross promote or upsell or even sell third party ads in the newsletters that contain that content.

This is just the first step — next step is allowing the members of the community who gather emails to get a commission per email gathered. This allows the newsletter to not only command the attention of a particular niche, but allows the individuals within that community to push the newsletter to other closely related niches, and even give the advertisers ideas about new content to add to speak to those niches as well.

You can all see where this is headed, my evil friends. The final step is allowing the newsletters to easily include content from the influencers as well as allowing different versions of each newsletter to be distributed to different niches automatically based on the source of the original email (and that source’s place in various communities). Throw RSS into the mix, along with competent data mining of open and response rates for various newsletter sections (based on niche interests, source of original sign up, number of downline referrals from recipient and what their niches are, etc), and you’re getting close to where things are going to be — the advertiser no longer publishes the newsletter at all; the community does all the work to push the products in exchange for a cut from the users they originally referred, and because the commission hinges on converting that downline, they work harder to prepare content that persuades those users to convert.

More food for thought,

The Evil Marketer

This is first in a series of short vignettes from what the Evil Marketer sees in his marketing crystal ball. The names have been changed to protect the evil.

Chapter 1: The Influencers

From the text logs of IPhone 4.3 Influencer Network, March 2, 20XX:

Session begins at 13:05:24

Subscriber 146766: yo dood thx fr the engmt ring ref — she totally frkd!

Subscriber 146777: no prob, i commd 250cr for that and kay’s bumped me to lvl 3 influencr

Subscriber 146766: swt is that your top lvl?

Subscriber 146777: in jwlry vert, bluenile and zales still at 2

Subscriber 146766: amy just made 5 at saks.clothing she gets top comm, coupn rights and 2 items/mo

Subscriber 146777: grl verts are all better bt hard took me 50 refs to get to 2, been at 5 at nintendo.fantasy frver

Subscriber 146766: cn u get me a coup for new zelda/

Subscriber 146777: 1 sec

Subscriber 146766: (System Message) Coupon Available from authorized user SkaRulezzz / 10% off entertainment.games .nintendo.fantasy title: Zelda Reborn Again / click to accept…

Subscriber 146777: (System Message) Coupon Accepted! You have earned a commission of 1 credit for coupon acceptance and will receive 15 credits for purchase within 3 days. You are currently a level 5 Influencer in entertainment.games.nintendo.fantasy. Click to convert credits into Paypal or MyBrands merchandise…

Subscriber 146766: swt thx dood u need any gear? 4 more refs gets me to 3 at bb, dbl comm for audio

Subscriber 146777: m me lata gonna troll the mall c if i can get some ez refs

Subscriber 146766: lata

Session ends at 13:10:02

DRM and all its ramifications and iterations are a marketer’s enemy, my friends. That’s right — not only is it bad for consumers, it’s also bad for us. We all know why it’s bad for consumers — it simply takes away the rights they should have to the content they purchased and then tries to re-sell it to them. It’s ridiculous and it’s based on an old paradigm that no longer exists.

But the Evil Marketer doesn’t hate DRM because it’s unfair. I hate it because it restricts one of the most powerful word of mouth distribution systems ever created. Step back for a moment and let’s forget we’re talking about DRM. What if, my evil friends, I told you that I had devised a system to help advertise music (and other digital artistic content) that:

• Didn’t cost anything
• Was built on a platform others had supplied for free — and constantly upgraded and improved
• Encouraged users to advertise for you, but with no compensation for that referral
• Allowed for easy cross-promotion among similar artists and genres
• And finally, resulted in sales of music that were easily tracked to these referrals and cross-promotion, and didn’t cost anything in materials to get the product to the consumer

The only downside? Sometimes people would give the music away for free to people who may have otherwise purchased it. But since that’s been going on since the invention of the tape cassette and VCR, and the only difference is the scale of that potential loss, we just need to make sure it doesn’t get out of control by giving honest users an easy way to purchase at a fair price.

And that’s just the surface, folks; that’s just things as they stand now. How great will it be when we can more easily insert 5 second ads into the shared content, or add further analytics to the chain of distribution, or any number of advances that are just around the corner that will let people always have instant access to every piece of music every created, while further tying the demographics of those listeners (based on genre and all the other juicy private data we’ll be gathering) to cross promote products from other verticals?

I’d be more angry about DRM if I wasn’t so sure that its days were numbered and inexorably linked to an old guard that is slowly dying out. I just wish their deaths were quicker. The sooner they get out of the way and free up content so that we can measure and monetize it more efficiently, the better.

AT&T announced today that it’s going to kill off the Cingular brand. That’s right — probably the most recognized mobile brand in the US, certainly among younger consumers, will soon disappear forever. It’s never easy for yours truly when a brand dies; when I think of all the time and energy invested by fellow evil marketers nurturing a shiny new brand from infancy, through the awkward tweens all the way to maturity, I get a little verklempt.

Oh Cingular I barely knew thee!

Though your claims of “Fewest Dropped Calls” were probably a load of crap and your customer service sucked so bad that New York booted you off the BBB list, your brand was so powerful that you still became the #1 US mobile carrier. Of course it helps that you gave us evil marketers such a healthy budget to work with — according to your quarterly reports, you spent nearly a billion dollars in the first 3 quarters of 2006 to acquire just over 4.6 million customers.

That’s $217 per new acquisition!

I wonder what percentage of my bill each month is for you to fool people into switching to your sub-par service? Don’t get me wrong — like any evil marketer I will gladly pay more for my products and services so that my money can be frittered away being dumped into outdated marketing efforts. After all we’re all having trouble justifying our ad budgets these days — the days of the wildly expensive and almost completely ineffective 30 second tv spot are numbered. We can get trackable, measurable returns from online advertising but those damn publishers don’t charge enough! How the hell are we supposed to spend $217 per new acquisition online with CPM inventory drying up??? We like CPM — it’s almost like tv ads, so it’s more comfortable and less scary than all those new, complicated online methods we have to deal with.

Don’t panic, my evil brethren. I’ve got the answer for you. Average ad buys may be plummeting, but there are so many more ways to spend our ad budgets online. Take affiliate marketing — you can pay a set price per acquisition and spend as much as you want. Believe me, if you offered a $200 bounty for new customers via one of the affiliate networks, you will be overwhelmed with niche affiliates pushing your brand on every person who hits their site, and the message will be targeted for that niche specifically. Mob marketing, my friends, is the future. What a “brand” is in this model will scare you — but we’ll talk about that later.

My one piece of advice for today is, to paraphrase Kubrick — learn to stop worrying and love the mob.

Love,
The Evil Marketer