Here's the next email Blair said he'd be sending me. I hope you've all been working on your 30-second pitch.
Hi Paul,
It's one of the most famous scenes in the movie "E.T." - the young girl, played by Drew Barrymore, lures E.T. from the house into the garage by laying out bits of candy every few steps. E.T. nervously follows the promise of candy, and feels safe in doing so because he gets to move step-by-step.
A much smarter move than clubbing the alien over the head and dragging him into the garage, don't you think? Now, let's make the comparison... ever feel clubbed over the head by someone's 30 elevator second pitch? I know I have.
You may have experienced a 30 second pitch from someone that, somehow, crammed an entire 60 minute sales presentation into that 30 seconds. WRONG!
The purpose of your 30 second pitch isn't to sell your audience, but to lure them in.
A couple of days ago I told you how to quickly boost your credibility in your pitch. What was REALLY COOL was some folks took the idea and ran with it, tweaked their pitch and sent them back in. You may be doing some more tweaking to your pitch today ;)
Let's talk about another step of a winning 30 second pitch... how to keep your audience's interest and momentum and make it safe for them to move forward from the pitch to the next stage of conversation.
The 3 Pillars of a Persuasive 30-Second Pitch
1. Credibility - in the last email you learned how to provide proof building stats (how long you've been in business, how many happy customers, etc)
2. Promise
What kind of results do you actually provide your customers?
Loan officer - "...reduce monthly mortgage payments, sometimes by as much as 12%."
Supplement salesperson - "...provide energy to actually get through and enjoy the day without hitting that mid-day crash."
Travel agent - "...place couples in romantic, adventuresome, and exciting locations."
So much more compelling than "I do loans," or "I help you stay healthy." Include your "promise" in your pitch and you'll find more people perking up wanting to know more about you.
One thing to keep in mind here is to avoid actually telling folks what you do... instead, focus on what you help folks achieve. You only have 30 seconds, use the time to create a compelling end result rather than the process you take them through to get there.
So, there's the bits of candy that lead them in. How to make them feel safe...
3. Risk removal
In the next email I'll cover this aspect. In the meantime, focus on what results your audience is looking to you for.
That's what you highlight in your pitch.
Saturday, August 30, 2008
Sunday, August 24, 2008
Credibility in 30 Seconds
How ironic that I'd get an email from Blair Singer while at the same time just finishing up Ricardo R. Bellino's book, "You have 3 Minutes!" Bellino is the Founder of Trump Realty Brazil and Donald Trump's original Apprentice. Blair wrote:
The 3 Pillars of a Persuasive 30-Second Pitch
1. Credibility
Let's face it, if you want to win someone over you need to have credibility. How do you show that you're credible in 30 seconds or less? Give them some proof...
- how long you've been in business
"For the past 8 years...
- how many people you've helped
"I've helped 62 families..."
Pretty simple to do but often neglected. By not mentioning these facts you're doing yourself a massive dis-service.
Your experience and your success stories are very compelling assets that set you apart from others in your industry.
What to do if you're new to your industry? Borrow credibility.
"For the past 8 years my company..."
"As reported in Time Magazine and on Oprah..."
As you can see, it's pretty simple to inject credibility into your elevator pitch. Once you do, you'll find more of your prospects paying attention and asking more questions.
In the next email, we'll cover the other 2 pillars...
2. Promise
3. Risk removal
Take the time now to go back to your 30-second pitch and, if you haven't already, inject some credibility into it.
I'll be sure to post Blair's next email.
How ironic that I'd get an email from Blair Singer while at the same time just finishing up Ricardo R. Bellino's book, "You have 3 Minutes!" Bellino is the Founder of Trump Realty Brazil and Donald Trump's original Apprentice. Blair wrote:
The 3 Pillars of a Persuasive 30-Second Pitch
1. Credibility
Let's face it, if you want to win someone over you need to have credibility. How do you show that you're credible in 30 seconds or less? Give them some proof...
- how long you've been in business
"For the past 8 years...
- how many people you've helped
"I've helped 62 families..."
Pretty simple to do but often neglected. By not mentioning these facts you're doing yourself a massive dis-service.
Your experience and your success stories are very compelling assets that set you apart from others in your industry.
What to do if you're new to your industry? Borrow credibility.
"For the past 8 years my company..."
"As reported in Time Magazine and on Oprah..."
As you can see, it's pretty simple to inject credibility into your elevator pitch. Once you do, you'll find more of your prospects paying attention and asking more questions.
In the next email, we'll cover the other 2 pillars...
2. Promise
3. Risk removal
Take the time now to go back to your 30-second pitch and, if you haven't already, inject some credibility into it.
I'll be sure to post Blair's next email.
Wednesday, August 13, 2008
Understand Social Networks and Make Them Work for You
By Melissa Busch, associate senior edior, FundRaising Success
Although this article is written for the non-profit organization, I believe the principles apply to the for-profit organization as well. This article originally appeared in the June 4, 2008 issue of FundRaising Success Magazine.
Not all social networks are created equal. And nonprofit organizations need to know the differences between them before they can get one to work for them. A social network can be a useful tool for a nonprofit, providing an arena for meeting potential supporters and contacts. Also, it provides individuals or organizations an outlet for spreading their messages to broader audiences. But before nonprofits can use social networks effectively, they have to understand the options, said Steve MacLaughlin, director of Internet solutions at Blackbaud, during the session “What Social Networks Should Be Doing for You” at The Blackbaud Interactive Internet Symposium held on May 22 in New York.
Read the rest of the article by Clicking Here To Continue or by copying and pasting the following URL to your internet browser http://content.dynamicmessenger.com/napco/?je4hZRSAfKn7tbccgGxqABaoec0pcnkTj&http://fsg.fundraisingsuccessmag.com/story/story.php?sid=107470&var=story
By Melissa Busch, associate senior edior, FundRaising Success
Although this article is written for the non-profit organization, I believe the principles apply to the for-profit organization as well. This article originally appeared in the June 4, 2008 issue of FundRaising Success Magazine.
Not all social networks are created equal. And nonprofit organizations need to know the differences between them before they can get one to work for them. A social network can be a useful tool for a nonprofit, providing an arena for meeting potential supporters and contacts. Also, it provides individuals or organizations an outlet for spreading their messages to broader audiences. But before nonprofits can use social networks effectively, they have to understand the options, said Steve MacLaughlin, director of Internet solutions at Blackbaud, during the session “What Social Networks Should Be Doing for You” at The Blackbaud Interactive Internet Symposium held on May 22 in New York.
Read the rest of the article by Clicking Here To Continue or by copying and pasting the following URL to your internet browser http://content.dynamicmessenger.com/napco/?je4hZRSAfKn7tbccgGxqABaoec0pcnkTj&http://fsg.fundraisingsuccessmag.com/story/story.php?sid=107470&var=story
Tuesday, July 29, 2008
5 Best Practices to Profit From Business Blogs
By Britt Brouse
Blogs are picking up speed as a channel for winning better organic search results, converting more prospects and developing a more humanized, authentic brand. “Blogs are still not quite here yet in the majority of businesses, but the adoption is becoming quick because people are starting to finally recognize that this gives you a way to humanize your business … and get back to people-to-people interactions,” says Chris Baggott, CEO and co-founder of Compendium Software, a blog software provider based in Indianapolis.
With minimal setup costs, the benefits of starting a blog are just as powerful for small and large companies—with small companies pulling more search traffic and large companies expanding their brands. Like with any new marketing initiative, it is necessary to have a good plan in place. The practices discussed below illustrate how to get started with and manage a highly effective company blog.
1. Prepare a Strategy“It should be organized, you should have some kind of blog editor, and you should have multiple authors that you’ve chosen and vetted because they write well and have something interesting to say,” says Debbie Weil, Washington, D.C.-based corporate blogging consultant and author of “The Corporate Blogging Book.” Open up authorship to employees other than the CEO or public relations representative. “This is not just PR; it’s people that are really hands-on and involved with the product, service or company, and they’re telling readers something that they can’t get elsewhere,” Weil says.
For content strategy, Baggott advises using search keywords to brainstorm topics. “What are the terms that people are typing in that you want to win? Then blog on those topics … You tell real stories and humanize the company, but just make sure you use keywords in your blog post,” he says. Don’t write only about your product; develop posts with your demographic in mind. “If you are Clif Bar, you could blog about bicycle racing, hiking or outdoor activities—things that people who buy Clif Bars are interested in,” Weil says.
2. Focus on SearchBlogs are frequently updated and can beat your homepage in terms of winning organic search results. To organize your content, and provide focused results, Baggott advises looking at each blog entry as a search landing page. “Just like if we were doing PPC [pay-per-click] ads, we’d have a specific landing page for a keyword phrase. You know where [visitors] are coming from, so you provide a page that directly reflects what their search query was,” Baggott says.
Specific content will get the best results. “The more content the search engine sees that is specific to a topic, the more likely they are to serve up that page,” Baggott says. To achieve focus, he recommends organizing blogs around topics—not authors—and to create precise page and blog titles. Most importantly—keep updating. “Search is a content-driven business. The more content, the more likely you are to be found,” Baggott advises.
3. Convert With a Call to ActionWhether you’re an e-commerce retailer driving online sales or a B-to-B company generating new leads, it is vital to include calls to action throughout your blog. “What good does it do a business to have readers if they don’t convert?” Baggott asks. The content and the call to action go hand in hand. “If the blog is interesting, has useful content and fulfills the prospects’ need, they will click back to your homepage and say, ‘They seem to be leading experts on this product—and what the heck—I will buy my product from them,’” Weil explains. Therefore, there should be clear links back to your homepage or online product pages throughout.
Weil believes that some of the best calls to action on blogs are content-driven premiums such as whitepapers, webinars, reports and demonstrations. She advises marketers to put an employee’s contact information on the digital premium to drive any potential sales. Another benefit to offering premiums is building your e-mail list by requiring a valid e-mail address for each download.
4. Integrate Social MediaBlogs also allow companies to test-drive Web 2.0 media outside of their corporate sites. “Blogging is a piece of the bigger social media phenomenon, which includes community, user-created content, video, networking and micro blogging ... Blogs are a great platform for most of the social media tools that people are experimenting with,” Weil says. Southwest Airlines’ blog is a good example; it includes Flickr photographs, employee entries, videos, a survey, company information and options to share content from Southwest through other social networking sites.
Weil sees blogs as a sort of next-generation Web site and an indicator of where Web use is heading. “In a couple of years, you’ll go to any corporate homepage and you’ll expect something there that is fresh, real, where you can leave a question and learn something that is not just that static corporate speak about the company,” she explains.
5. Track and Measure ResultsLike any other marketing tool, blogs have measurable results. “You need to use the same analytics that you’re using on your Web site. Where’s the traffic coming from; what are they doing when they get to the site; and where do they go when they leave the site?” Baggott says.
One example Baggott gives of closed-loop ROI on a search is a customer who searched for a brand of liquor locally and found his client’s blog for a liquor store. Posting about a specific product, the store was seemingly the only one in the area carrying it and won the search and the sale. “It’s a good story of posting on a product, winning the search on the product and the customer coming in to buy the product. There’s a closed-loop ROI right there, and that happens every day with blogging,” Baggott concludes.
By Britt Brouse
Blogs are picking up speed as a channel for winning better organic search results, converting more prospects and developing a more humanized, authentic brand. “Blogs are still not quite here yet in the majority of businesses, but the adoption is becoming quick because people are starting to finally recognize that this gives you a way to humanize your business … and get back to people-to-people interactions,” says Chris Baggott, CEO and co-founder of Compendium Software, a blog software provider based in Indianapolis.
With minimal setup costs, the benefits of starting a blog are just as powerful for small and large companies—with small companies pulling more search traffic and large companies expanding their brands. Like with any new marketing initiative, it is necessary to have a good plan in place. The practices discussed below illustrate how to get started with and manage a highly effective company blog.
1. Prepare a Strategy“It should be organized, you should have some kind of blog editor, and you should have multiple authors that you’ve chosen and vetted because they write well and have something interesting to say,” says Debbie Weil, Washington, D.C.-based corporate blogging consultant and author of “The Corporate Blogging Book.” Open up authorship to employees other than the CEO or public relations representative. “This is not just PR; it’s people that are really hands-on and involved with the product, service or company, and they’re telling readers something that they can’t get elsewhere,” Weil says.
For content strategy, Baggott advises using search keywords to brainstorm topics. “What are the terms that people are typing in that you want to win? Then blog on those topics … You tell real stories and humanize the company, but just make sure you use keywords in your blog post,” he says. Don’t write only about your product; develop posts with your demographic in mind. “If you are Clif Bar, you could blog about bicycle racing, hiking or outdoor activities—things that people who buy Clif Bars are interested in,” Weil says.
2. Focus on SearchBlogs are frequently updated and can beat your homepage in terms of winning organic search results. To organize your content, and provide focused results, Baggott advises looking at each blog entry as a search landing page. “Just like if we were doing PPC [pay-per-click] ads, we’d have a specific landing page for a keyword phrase. You know where [visitors] are coming from, so you provide a page that directly reflects what their search query was,” Baggott says.
Specific content will get the best results. “The more content the search engine sees that is specific to a topic, the more likely they are to serve up that page,” Baggott says. To achieve focus, he recommends organizing blogs around topics—not authors—and to create precise page and blog titles. Most importantly—keep updating. “Search is a content-driven business. The more content, the more likely you are to be found,” Baggott advises.
3. Convert With a Call to ActionWhether you’re an e-commerce retailer driving online sales or a B-to-B company generating new leads, it is vital to include calls to action throughout your blog. “What good does it do a business to have readers if they don’t convert?” Baggott asks. The content and the call to action go hand in hand. “If the blog is interesting, has useful content and fulfills the prospects’ need, they will click back to your homepage and say, ‘They seem to be leading experts on this product—and what the heck—I will buy my product from them,’” Weil explains. Therefore, there should be clear links back to your homepage or online product pages throughout.
Weil believes that some of the best calls to action on blogs are content-driven premiums such as whitepapers, webinars, reports and demonstrations. She advises marketers to put an employee’s contact information on the digital premium to drive any potential sales. Another benefit to offering premiums is building your e-mail list by requiring a valid e-mail address for each download.
4. Integrate Social MediaBlogs also allow companies to test-drive Web 2.0 media outside of their corporate sites. “Blogging is a piece of the bigger social media phenomenon, which includes community, user-created content, video, networking and micro blogging ... Blogs are a great platform for most of the social media tools that people are experimenting with,” Weil says. Southwest Airlines’ blog is a good example; it includes Flickr photographs, employee entries, videos, a survey, company information and options to share content from Southwest through other social networking sites.
Weil sees blogs as a sort of next-generation Web site and an indicator of where Web use is heading. “In a couple of years, you’ll go to any corporate homepage and you’ll expect something there that is fresh, real, where you can leave a question and learn something that is not just that static corporate speak about the company,” she explains.
5. Track and Measure ResultsLike any other marketing tool, blogs have measurable results. “You need to use the same analytics that you’re using on your Web site. Where’s the traffic coming from; what are they doing when they get to the site; and where do they go when they leave the site?” Baggott says.
One example Baggott gives of closed-loop ROI on a search is a customer who searched for a brand of liquor locally and found his client’s blog for a liquor store. Posting about a specific product, the store was seemingly the only one in the area carrying it and won the search and the sale. “It’s a good story of posting on a product, winning the search on the product and the customer coming in to buy the product. There’s a closed-loop ROI right there, and that happens every day with blogging,” Baggott concludes.
4 Tips for Testing Direct Mail Tweaks Online
By Britt Brouse
As direct mail marketers continue to build their e-mail files and online presence, the Web becomes a viable channel to test certain tweaks, which don’t always make it into the mailstream. Licinda Mytych, marketing manager for Agora Publishing’s International Living, began testing direct mail ideas online about four years ago and sees it as an excellent way to get inexpensive results before investing in direct mail.
“We have to be smart about it—online and direct mail are totally different markets—so you’re not going to put all of your eggs in one basket and devote yourself entirely to online marketing. It will help you read indicators. And then you can test direct mail, and you can do it in a smarter, more cost-effective way,” she explains. The tips below outline some examples of how to bolster your mail program with digital tests.
1. Use Lists to Your AdvantageLists can make or break your online tests. “We’ve found that lists that work great in the mail don’t often work great online and vice versa,” Mytych says. The differences in response between lists can be dramatic. “For us, it’s the difference between paid and unpaid recipients. We test to our free e-letter subscribers first, and that is a world of difference compared to testing to paid, direct mail-sold names,” she explains. Mytych suggests controlling this variable by finding or renting paid direct mail files that also contain e-mail addresses.
2. Stick to Copy TestsDesign is not the focus of Mytych’s online testing because HTML allows for so much more color and graphics than print, at almost no added cost. Copy, however, is very simple to test—especially in the subject line—which, like an outer envelope, has a limited amount of time and space to either get a reader engaged or drive a message into the trash. To generate the most effective subject lines, Mytych advises following the four U’s: “Always ask yourself if your subject line is urgent, unique, useful and ultra-specific” she says.
3. Vary Your PremiumOnline is a good place to test new topics or content for editorial premiums, and new premiums altogether for promotional items. International Living also tests the positioning of the premium within its offer. “We’re talking right now about testing multiple premiums with our two-year subscription offer to get people to convert to the two-year over the one-year sign-up. If that works, then I’m going to want to put that out in the mail as a possible test,” Mytych describes.
4. Fine-Tune Your Offer“Right now our testing involves delving into getting the best offer that’s going to appeal to the target and to evolve the package. That’s why we do a lot of testing online,” Mytych shares. She recently tested one- and two-year subscription offers at a higher price per issue versus an auto-renewal subscription offer at a lower price per issue. “We’ve been able to test into a lower price point and also test which auto-renewal offers worked the best,” Mytych says. The auto-renewal at a lower price point won online, and it currently has control status in the mail.
By Britt Brouse
As direct mail marketers continue to build their e-mail files and online presence, the Web becomes a viable channel to test certain tweaks, which don’t always make it into the mailstream. Licinda Mytych, marketing manager for Agora Publishing’s International Living, began testing direct mail ideas online about four years ago and sees it as an excellent way to get inexpensive results before investing in direct mail.
“We have to be smart about it—online and direct mail are totally different markets—so you’re not going to put all of your eggs in one basket and devote yourself entirely to online marketing. It will help you read indicators. And then you can test direct mail, and you can do it in a smarter, more cost-effective way,” she explains. The tips below outline some examples of how to bolster your mail program with digital tests.
1. Use Lists to Your AdvantageLists can make or break your online tests. “We’ve found that lists that work great in the mail don’t often work great online and vice versa,” Mytych says. The differences in response between lists can be dramatic. “For us, it’s the difference between paid and unpaid recipients. We test to our free e-letter subscribers first, and that is a world of difference compared to testing to paid, direct mail-sold names,” she explains. Mytych suggests controlling this variable by finding or renting paid direct mail files that also contain e-mail addresses.
2. Stick to Copy TestsDesign is not the focus of Mytych’s online testing because HTML allows for so much more color and graphics than print, at almost no added cost. Copy, however, is very simple to test—especially in the subject line—which, like an outer envelope, has a limited amount of time and space to either get a reader engaged or drive a message into the trash. To generate the most effective subject lines, Mytych advises following the four U’s: “Always ask yourself if your subject line is urgent, unique, useful and ultra-specific” she says.
3. Vary Your PremiumOnline is a good place to test new topics or content for editorial premiums, and new premiums altogether for promotional items. International Living also tests the positioning of the premium within its offer. “We’re talking right now about testing multiple premiums with our two-year subscription offer to get people to convert to the two-year over the one-year sign-up. If that works, then I’m going to want to put that out in the mail as a possible test,” Mytych describes.
4. Fine-Tune Your Offer“Right now our testing involves delving into getting the best offer that’s going to appeal to the target and to evolve the package. That’s why we do a lot of testing online,” Mytych shares. She recently tested one- and two-year subscription offers at a higher price per issue versus an auto-renewal subscription offer at a lower price per issue. “We’ve been able to test into a lower price point and also test which auto-renewal offers worked the best,” Mytych says. The auto-renewal at a lower price point won online, and it currently has control status in the mail.
Social Media: Marketing Myths and Universal Truths
Online communities present great opportunities to raise funds and spread the word about your mission, but what is fact and what is fiction in this complicated medium?
By George Krautzel
Editor’s Note: This article was originally written for for-profit e-marketers, but the information is equally applicable to nonprofits looking to increase their presence and fundraising power online.
Social-media marketing opportunities proved to be viable additions to existing online advertising strategies for many of the top brand marketers in 2007. But the seeming complexity of these opportunities and the variety of social-networking sites and online communities available still are difficult hurdles for many marketers to clear.
Challenges such as structuring the appropriate campaign for target audiences, measuring engagement and results, and proving ROI still remain for social-media marketing. But many of these perceived challenges are, in fact, based on myths rather than real-life truths about the potential for success.
What is social media?
At its highest level, social media is defined as the online technologies and practices that people use to share opinions, insights, experiences and perspectives with each other. The focus of the interactions can be personal interest, consumer-oriented or business-to-business.
Marketers are adapting to social media in a number of ways. Tactics include transforming customers into fully vested brand champions by adding social-media tools — like blogs, discussion forums and wikis — to their existing Web sites, as well as exploring existing online communities that can offer the ability to target audiences beyond existing customer bases.
The world of social media can be an extremely valuable tool in targeting prospects — as many marketers have discovered. According to an October 2007 survey of 116 senior marketing professionals, San Mateo, Calif.-based digital marketing optimization solutions provider Coremetrics discovered that 78 percent of respondents view social-media marketing as a way to gain a competitive edge. Yet, only 7.75 percent of total online marketing budgets are allocated to social-networking sites. This disconnect between the recognized value of social-media marketing and current budget allocation reflects the perceived risk and learning curve that marketers associate with advertising through any new medium. But a closer look at some of the myths and truths of social-media marketing shows that many of these risks can be minimized through a deeper understanding of the opportunity at hand.
Myth: Social media requires a radical change from the current online advertising approach.
Truth: Many of the same principles, and even the same advertising units, that apply to standard online marketing campaigns can be reapplied and repurposed for social-media campaigns. Since users of these social-media sites are generating significant volumes of content that is highly specific to their needs and interests, ad-targeting systems on the sites that ensure relevancy between advertising and user-generated content can supercharge online inventory for an advertiser.
Myth: There is no proof that social-media sites deliver the same ROI offered by traditional Web sites.
Truth: Social media, especially in a B-to-B setting, not only is helping advertisers listen to conversations their customers are having online, but it also is helping them integrate into these conversations in ways that are welcomed and valued by users. For these advertisers, results of social-media campaigns go beyond mere engagement to include measurable ROI that matches and sometimes rivals their success with traditional Web site advertising. For example, Information Builders, one of ITtoolbox’s advertising partners, achieved 750 percent ROI and surpassed its lead-generation goals through a series of whitepapers that demonstrated its thought leadership and technical expertise with decision makers and influencers in the ITtoolbox community.
Myth: Social-media sites are good for consumers, but the options for the B-to-B marketer are minimal.
Truth: The basic principle behind a social-media community is to bring together peers to share experiences and knowledge. In the business environment, social-media sites can be used to help professionals make better decisions, from IT purchasing to health insurance benefits. In fact, research shows that purchasers are turning to user-generated content sites to help make their purchasing decisions.
For example, the 2007 ITtoolbox/PJA IT Social Media Index: Inaugural Survey Results shows that executive decision makers spend an average of 3.5 hours a week consuming or participating in social media — the highest usage profile of any IT audience. And that nearly two-thirds of IT professionals surveyed believe that social-media content and user-generated tools have made for a more informed purchasing decision; more than three-quarters believe they have made their lives more efficient.
Tapping into B-to-B, user-driven communities allows advertisers to reach an attentive target audience and leads to positive marketing results.
Myth: The barrier to entry in social-media marketing is too high.
Truth: Marketers can lower the barrier to entry for social-media marketing by taking advantage of existing online communities focused on their businesses or industries. Rather than undertaking the creation of their own online communities and social-media tools for their existing customers — which can be a significant drain both on time and money — advertising with existing social-media sites both lowers costs and allows marketers to reach out to new customer bases.
Myth: It’s hard to ensure brand consistency across social-media sites.
Truth: Social-media marketing, like any other marketing campaign, doesn’t afford the opportunity to control every message focused on a particular brand. However, safeguards can be implemented to help with brand consistency. These safeguards include careful selection of the social-media site to ensure that the community’s focus and tone is aligned with the brand; a thorough review of the community’s moderation policies; and, perhaps most importantly, active engagement with customers in the community.
By monitoring and taking part in conversations where they are advertising, marketers can address any concerns or negative feedback about the brand that may be expressed by members of the community. And, by exploring social-media sites in the target market before pursuing a campaign, marketers can ensure that target sites include high-quality, user-generated content and focus is aligned with the corporate brand.
Conclusion
Social media and online communities offer marketing opportunities that have the potential for high ROI. In many cases, the campaigns and creative content already being used in standard online opportunities can be repurposed for a social-media marketing campaign to achieve superior results.
Online communities present great opportunities to raise funds and spread the word about your mission, but what is fact and what is fiction in this complicated medium?
By George Krautzel
Editor’s Note: This article was originally written for for-profit e-marketers, but the information is equally applicable to nonprofits looking to increase their presence and fundraising power online.
Social-media marketing opportunities proved to be viable additions to existing online advertising strategies for many of the top brand marketers in 2007. But the seeming complexity of these opportunities and the variety of social-networking sites and online communities available still are difficult hurdles for many marketers to clear.
Challenges such as structuring the appropriate campaign for target audiences, measuring engagement and results, and proving ROI still remain for social-media marketing. But many of these perceived challenges are, in fact, based on myths rather than real-life truths about the potential for success.
What is social media?
At its highest level, social media is defined as the online technologies and practices that people use to share opinions, insights, experiences and perspectives with each other. The focus of the interactions can be personal interest, consumer-oriented or business-to-business.
Marketers are adapting to social media in a number of ways. Tactics include transforming customers into fully vested brand champions by adding social-media tools — like blogs, discussion forums and wikis — to their existing Web sites, as well as exploring existing online communities that can offer the ability to target audiences beyond existing customer bases.
The world of social media can be an extremely valuable tool in targeting prospects — as many marketers have discovered. According to an October 2007 survey of 116 senior marketing professionals, San Mateo, Calif.-based digital marketing optimization solutions provider Coremetrics discovered that 78 percent of respondents view social-media marketing as a way to gain a competitive edge. Yet, only 7.75 percent of total online marketing budgets are allocated to social-networking sites. This disconnect between the recognized value of social-media marketing and current budget allocation reflects the perceived risk and learning curve that marketers associate with advertising through any new medium. But a closer look at some of the myths and truths of social-media marketing shows that many of these risks can be minimized through a deeper understanding of the opportunity at hand.
Myth: Social media requires a radical change from the current online advertising approach.
Truth: Many of the same principles, and even the same advertising units, that apply to standard online marketing campaigns can be reapplied and repurposed for social-media campaigns. Since users of these social-media sites are generating significant volumes of content that is highly specific to their needs and interests, ad-targeting systems on the sites that ensure relevancy between advertising and user-generated content can supercharge online inventory for an advertiser.
Myth: There is no proof that social-media sites deliver the same ROI offered by traditional Web sites.
Truth: Social media, especially in a B-to-B setting, not only is helping advertisers listen to conversations their customers are having online, but it also is helping them integrate into these conversations in ways that are welcomed and valued by users. For these advertisers, results of social-media campaigns go beyond mere engagement to include measurable ROI that matches and sometimes rivals their success with traditional Web site advertising. For example, Information Builders, one of ITtoolbox’s advertising partners, achieved 750 percent ROI and surpassed its lead-generation goals through a series of whitepapers that demonstrated its thought leadership and technical expertise with decision makers and influencers in the ITtoolbox community.
Myth: Social-media sites are good for consumers, but the options for the B-to-B marketer are minimal.
Truth: The basic principle behind a social-media community is to bring together peers to share experiences and knowledge. In the business environment, social-media sites can be used to help professionals make better decisions, from IT purchasing to health insurance benefits. In fact, research shows that purchasers are turning to user-generated content sites to help make their purchasing decisions.
For example, the 2007 ITtoolbox/PJA IT Social Media Index: Inaugural Survey Results shows that executive decision makers spend an average of 3.5 hours a week consuming or participating in social media — the highest usage profile of any IT audience. And that nearly two-thirds of IT professionals surveyed believe that social-media content and user-generated tools have made for a more informed purchasing decision; more than three-quarters believe they have made their lives more efficient.
Tapping into B-to-B, user-driven communities allows advertisers to reach an attentive target audience and leads to positive marketing results.
Myth: The barrier to entry in social-media marketing is too high.
Truth: Marketers can lower the barrier to entry for social-media marketing by taking advantage of existing online communities focused on their businesses or industries. Rather than undertaking the creation of their own online communities and social-media tools for their existing customers — which can be a significant drain both on time and money — advertising with existing social-media sites both lowers costs and allows marketers to reach out to new customer bases.
Myth: It’s hard to ensure brand consistency across social-media sites.
Truth: Social-media marketing, like any other marketing campaign, doesn’t afford the opportunity to control every message focused on a particular brand. However, safeguards can be implemented to help with brand consistency. These safeguards include careful selection of the social-media site to ensure that the community’s focus and tone is aligned with the brand; a thorough review of the community’s moderation policies; and, perhaps most importantly, active engagement with customers in the community.
By monitoring and taking part in conversations where they are advertising, marketers can address any concerns or negative feedback about the brand that may be expressed by members of the community. And, by exploring social-media sites in the target market before pursuing a campaign, marketers can ensure that target sites include high-quality, user-generated content and focus is aligned with the corporate brand.
Conclusion
Social media and online communities offer marketing opportunities that have the potential for high ROI. In many cases, the campaigns and creative content already being used in standard online opportunities can be repurposed for a social-media marketing campaign to achieve superior results.
Monday, July 28, 2008
Is a Fungus Among Us?
Beware employee theft of trade secrets, intellectual property and clients
Author, direct marketing guru, and always entertaining Denny Hatch focuses on a major story in the news and shows how businesses can take advantage of—or avoid the pitfalls from—the lessons to be learned in terms of marketing, sales, PR and communications.
Here are two stories about people working for two businesses—an employee in one and members of the board in the other—who knew a lot about their respective companies.
Both allegedly annexed a core product and went into competition with it.
Both cases have resulted in lawsuits and countersuits.
A person that would do this to an employer is a fungus—a parasitic organism that obtains nourishment by locking onto a host and sucking it dry.
What can you do if such a person is loose in your company?
If you have an idea for a new product, do you develop it and then offer it to your current employer? Or do you surreptitiously shop it elsewhere?
If so, why?
A Personal Digression
In 1964 I got a job selling advertising for Library Journal, a magazine published by R.R. Bowker. At the time, book publishers produced seasonal catalogs—usually fall and spring—which were mailed to the Bowker editorial department as well as to booksellers, wholesalers, agents, foreign rights buyers, schools and libraries.
Arriving in the mail at different times, these catalogs came in various sizes and shapes and were stuffed into files, where they spilled out and were a perpetual nightmare to keep current. I figured a better information system had to exist, one that was more efficient, user friendly and less costly to the individual publisher, who was spending a fortune on composition, printing, binding and mailing.
At a client’s office, I discovered how British publishers dealt with the problem of catalogs. In the waiting room was a multivolume set of fat, paperbound books—a compendium of publishers’ catalogs bound together alphabetically. It was produced and shipped by The Bookseller—the British version of Publishers Weekly. From this I came up with the idea for “Publishers Combined Seasonal Catalogs”—same format as the U.K. product, same concept—and quietly floated the idea to a number of my clients who advertised with Library Journal.
Some publishers loved it. They immediately saw that by participating in this format (1) their catalogs would not be lost in an overstuffed file drawer and therefore would be far more easily accessible, and (2) this co-op binding and distribution system would save considerable money. Further, they could produce overruns for their sales representatives and as giveaways at the American Booksellers and Library Association conferences, as well as regional gatherings.
While others hated it, feeling that they would lose their individuality, enough said they liked the idea to make it a viable business. What’s more, once established, other publishers would see the wisdom of the product and come on board. For Bowker, it would represent a brand-new profit center with virtually no editorial expense that could be sold as an add-on by existing sales representatives.
I put together a business plan, designed a cover, made a crude mock-up of the product and sent it in to top management. Word came back from the board meeting that everybody loved the idea, but Library Journal—and its sister publication, Publishers Weekly—was undergoing a redesign, so nobody could get to this project for at least six months.
My salary at Bowker—the junior number three guy in a two-man office—was peanuts. When a very good offer for a job with another company came in, I was immediately interested. I went to Bowker’s VP of advertising and asked him where the catalog project stood, since I had just received a job offer.
“We want to go ahead with it,” he said, “but the redesign of the magazines is taking longer than we thought.”
“If I stay at Bowker and help launch this new catalog project, could I count on getting a piece of the action?”
“We don’t do that,” he said. “You have your salary.”
The idea was worked up with the full knowledge of my employer. I would have had no compunction about shopping the idea elsewhere. But at the time, only two other companies served the book industry, Kirkus Reviews and H.W. Wilson, which published a bunch of directories. Only Bowker had the clout and the contacts to get this show on the road.
I quit. Dunno whatever happened to the idea.
Barbie v. Bratz
I was astonished to discover that Barbie is 47 years old, and that, for all the competitors that tried to knock her off her pedestal over the years, Mattel’s savvy design and marketing staff swatted them all down. In 2005, the Barbie doll franchise brought in $3 billion.
One of the premier Barbie designers was Mattel’s Carter Bryant, whose Cinderella-like Grand Entrance Barbie sent adult collector Kristina Frazier-Henry into orbit. Frazier-Henry of Indiana is a serial blogger who has written 1,325 reviews on Epinions.com under the handle kristinafh. Her take on Grand Entrance Barbie:
I am a fanatical Barbie collector. Fanatical in the way that I would rather have an NRFB (that’s Never Removed From Box) Barbie than just about any other gift. Surprised? Yeah, thought you were.
Doll Description
This Grand Entrance Barbie is the first collector doll designed by Carter Bryant. It came out in 2001 and was met with a lot of oooh’s and ahhh’s from the adult collecting world. Here’s why.
Close your eyes and imagine an elegant ball. Your hair is blond (natural of course) and shiny. There’s no frizz to be had. The sides of your hair are gently gathered back while the back of your hair is curled in waves and lays gently across your shoulders.
Your gown is a steel blue taffeta creation made by designer Carter Bryant. The bodice is fitted and compliments your elegant waist. Underneath your gown is a thin, slip-like layer of tulle the color of ivory. Sewn into the middle part of your gown is a creamy pink silk sheath. The way the light shines off of the creamy pink makes a total stranger want to come over and touch you.
A Sabbatical
In 1998, Carter Bryant decided he needed a hiatus from Barbie and the fast life in Los Angeles. He returned to his roots in Springfield, Mo., and moved in with his parents. Driving by a local high school, Bryant claimed that he saw some local high school girls “wearing kind of, you know, oversized clothes, big, baggy jeans ... just got me to kind of thinking, you know, wouldn’t it be cool if there were some characters that kind of accurately represented today’s teenager.”
He dashed home and made sketches for a new doll to compete with Barbie. Its name was Bratz, described by Margaret Talbot in a 2006 story in The New Yorker titled “LITTLE HOTTIES: Barbie’s New Rivals,” as a design that “showed a face in which the lips and eyes were cartoonishly prominent and the nose was vanishingly small: it was as if the doll had undergone successive rounds of plastic surgery.”
Back to L.A.
In 1999 Bryant returned to Mattel as a Barbie wardrobe designer but continued to refine Bratz, which he presented to Isaac Larian, president of MGA Entertainment—a minor, money-losing electronic games company located in the San Fernando Valley of northwest Los Angeles.
The story gets murky as to who did what when, but a Mattel phone record paper trail indicates that Bryant was working on Bratz and talking to Larian from his Mattel office until he handed in his notice in October 2000 and went to work for MGA.
Bratz was launched in 2001, caught on big and began generating $1.25 billion a year in sales while the Barbie business declined some 12.5%. In 2006, Mattel decided it had been ripped off and instituted a lawsuit. Among the charges made by Mattel was that former employee Bryant’s 3% royalty on Bratz brought him $30 million.
Bryant and Mattel settled out of court, but Mattel is going after MGA in a trial that started last Tuesday. Meanwhile, MGA is countersuing Mattel.
The question here is not about dolls—or even this trial—but rather about a corporate culture that causes a creative employee to take a hot idea to a competitor, rather than bring it in-house and jointly reap the rewards.
Craigslist v. eBay
As readers know, I am no fan of eBay. Last Feb. 7, this cranky little e-zine published, “Should Congress Shut Down eBay? Is this auction site the world’s biggest criminal conspiracy?” I wrote:
If my numbers are remotely correct, it means that eBay is the supreme enabler of counterfeiters, forgers, hooligans, miscreants, petty crooks, pirates, rapscallions, reprobates, rogues, scallywags, scamps, scoundrels, swindlers, thieves, thugs and villains on a scale heretofore unimagined in human history.
If my numbers are correct, eBay is perpetrating the largest, most pernicious worldwide criminal conspiracy and fencing operation the world has ever seen.
If my numbers are correct, eBay is costing consumers whose homes have been burglarized—and businesses and copyright holders of all sizes whose property has been plundered and who have lost legitimate sales—billions upon billions of dollars, not to mention the insurance companies that have paid for the losses.
I am no fan of Craig Newmark and his Craigslist, a Web enterprise that seems bent on (1) taking over the classified advertising business and (2) putting traditional newspapers out of business. My problem is not that Craig Newmark is unhorsing a vestigial medium, but rather his service in 100 cities on five continents is mostly free. The free market, freebooting buccaneer in me screams, “For Pete’s sake, if you’re going to revolutionize an industry, do it to serve customers and make a killing while you’re at it!”
Now these two highly questionable organizations are in a fascinating death struggle.
In 2004, eBay bought out a former employee of Craigslist and wound up with 28.3% ownership. The two companies said that deal would allow eBay and Craigslist to “share expertise, resources and creativity.”
“Craigslist is an excellent example of how the Internet brings people together,” said Meg Whitman, president and CEO of eBay. “Whether it’s to trade goods, help neighbors or speak out on important issues, Craigslist has become the online gathering place for local communities.” eBay was given two seats on the Craigslist board.
Fast forward to the next year, 2005, and eBay announced that it was starting Kijiji—a series of 50 Web sites around the world offering free classified ads in direct competition with Craigslist. Alex Kazim, senior VP of eBay’s new ventures, proudly announced, “Kijiji builds local communities online, giving neighbors a way to come together around local needs and interests.”
On April 30, 2008, eBay filed a 29-page complaint against Craigslist in the Delaware Court of Chancery, claiming in essence:
NEWMARK AND [JIM] BUCKMASTER [CRAIGSLIST CEO]CRAFT A PLAN TO DILUTE AND DISENFRANCHISE EBAY
Let me say, if I were Craig Newmark and Jim Buckmaster, I would sure as hell do everything possible to disenfranchise eBay after buying into the company, learning the business and starting a competitor.
Craigslist filed a countersuit suit in California State Superior Court in San Francisco requesting a jury trial with the following complaints:
* UNFAIR AND UNLAWFUL COMPETITION UNDER CAL. BUS. AND PROF. CODE §17500
* FALSE ADVERTISING UNDER CAL. BUS. AND PROF. CODE §17500
* CALIFORNIA TRADEMARK INFRINGEMENT AND UNFAIR COMPETITION
* CALIFORNIA PASSING OFF AND UNFAIR COMPETITION* DILUTION UNDER CAL. BUS. & PROF. CODE §14200
* BREACH OF FIDUCIARY DUTY
A Personal Digression
In the 1960s, I was at Grolier Enterprises, which was run by four dynamos: founder Elsworth Howell, whose real love was judging dog shows; VP Bob Clarke, a lovely human being who started in the Grolier mail room and died young; Ed Bakal, a rough-hewn ex-paratrooper; and Lew Smith, a brilliant, low-key marketing genius who went on to become Lester Wunderman’s creative director.
Grolier’s business at the time was selling Dr. Seuss books to kids. The competition was Weekly Reader Book Club and Scholastic’s paperback book clubs. All sold books to students in classrooms through the teacher.
Using the Scholastic paperback model, a guy named Joe Archie started the Willie Whale Book Club. Elsworth Howell watched it grow and told Archie he was interested in buying Willie Whale. They signed confidentiality agreements, and, stupidly, Archie laid out his entire business plan, MO and results for Grolier to see. Whereupon Howell told Joe Archie that he had decided not to buy Willie Whale and started the Peter Possum Book Club offering children’s paperback books in direct competition with Archie and Scholastic.
Archie sued and lost.
If history repeats, my bet is that both Mattel and Craigslist will lose.
Takeaway Points to Consider:
* As an employee, you come up with a great idea for a new product that could be a moneymaker. Do you trust your current managers enough to give them first dibs? Or would you keep it secret and surreptitiously offer it to competitors?
* As an employer, do you encourage new ideas from within and—if they come to fruition—are the creators rewarded?
* As an employer, do you engender trust among those who work for and with you?
* If not, why not?
* If an employee is drawing salary and benefits, then according to United States copyright law, if “the work was done within the scope of his employment (whether the work is the kind he was employed prepare; whether the preparation takes place primarily within the employer’s time and place specifications; and whether the work was activated, at least in part, by a purpose to serve the employer), then the work is a work for hire and the employer is the initial owner of the copyright, rather than the employee who actually conceived and fixed the expression.”
* Carter Bryant maintained that he conceived and developed the Bratz doll when he was at home in Missouri and not in the employ of Mattel. Therefore, he reasoned, he owned it and had the right to sell it to MGA.
* Employers and employees alike are urged to look carefully into the pros and cons of noncompete contracts.
* If you’re working up a new idea on your own, always use your personal computer and cellphone. Don’t leave a digital trail of memos, notes, proposals or e-mail exchanges on the company server. Do not use the company phone to make calls or receive calls about your project. Do not leave a paper trail in your filing cabinet.
* If you swim with sharks, chances are you will be eaten.
Beware employee theft of trade secrets, intellectual property and clients
Author, direct marketing guru, and always entertaining Denny Hatch focuses on a major story in the news and shows how businesses can take advantage of—or avoid the pitfalls from—the lessons to be learned in terms of marketing, sales, PR and communications.
Here are two stories about people working for two businesses—an employee in one and members of the board in the other—who knew a lot about their respective companies.
Both allegedly annexed a core product and went into competition with it.
Both cases have resulted in lawsuits and countersuits.
A person that would do this to an employer is a fungus—a parasitic organism that obtains nourishment by locking onto a host and sucking it dry.
What can you do if such a person is loose in your company?
If you have an idea for a new product, do you develop it and then offer it to your current employer? Or do you surreptitiously shop it elsewhere?
If so, why?
A Personal Digression
In 1964 I got a job selling advertising for Library Journal, a magazine published by R.R. Bowker. At the time, book publishers produced seasonal catalogs—usually fall and spring—which were mailed to the Bowker editorial department as well as to booksellers, wholesalers, agents, foreign rights buyers, schools and libraries.
Arriving in the mail at different times, these catalogs came in various sizes and shapes and were stuffed into files, where they spilled out and were a perpetual nightmare to keep current. I figured a better information system had to exist, one that was more efficient, user friendly and less costly to the individual publisher, who was spending a fortune on composition, printing, binding and mailing.
At a client’s office, I discovered how British publishers dealt with the problem of catalogs. In the waiting room was a multivolume set of fat, paperbound books—a compendium of publishers’ catalogs bound together alphabetically. It was produced and shipped by The Bookseller—the British version of Publishers Weekly. From this I came up with the idea for “Publishers Combined Seasonal Catalogs”—same format as the U.K. product, same concept—and quietly floated the idea to a number of my clients who advertised with Library Journal.
Some publishers loved it. They immediately saw that by participating in this format (1) their catalogs would not be lost in an overstuffed file drawer and therefore would be far more easily accessible, and (2) this co-op binding and distribution system would save considerable money. Further, they could produce overruns for their sales representatives and as giveaways at the American Booksellers and Library Association conferences, as well as regional gatherings.
While others hated it, feeling that they would lose their individuality, enough said they liked the idea to make it a viable business. What’s more, once established, other publishers would see the wisdom of the product and come on board. For Bowker, it would represent a brand-new profit center with virtually no editorial expense that could be sold as an add-on by existing sales representatives.
I put together a business plan, designed a cover, made a crude mock-up of the product and sent it in to top management. Word came back from the board meeting that everybody loved the idea, but Library Journal—and its sister publication, Publishers Weekly—was undergoing a redesign, so nobody could get to this project for at least six months.
My salary at Bowker—the junior number three guy in a two-man office—was peanuts. When a very good offer for a job with another company came in, I was immediately interested. I went to Bowker’s VP of advertising and asked him where the catalog project stood, since I had just received a job offer.
“We want to go ahead with it,” he said, “but the redesign of the magazines is taking longer than we thought.”
“If I stay at Bowker and help launch this new catalog project, could I count on getting a piece of the action?”
“We don’t do that,” he said. “You have your salary.”
The idea was worked up with the full knowledge of my employer. I would have had no compunction about shopping the idea elsewhere. But at the time, only two other companies served the book industry, Kirkus Reviews and H.W. Wilson, which published a bunch of directories. Only Bowker had the clout and the contacts to get this show on the road.
I quit. Dunno whatever happened to the idea.
Barbie v. Bratz
I was astonished to discover that Barbie is 47 years old, and that, for all the competitors that tried to knock her off her pedestal over the years, Mattel’s savvy design and marketing staff swatted them all down. In 2005, the Barbie doll franchise brought in $3 billion.
One of the premier Barbie designers was Mattel’s Carter Bryant, whose Cinderella-like Grand Entrance Barbie sent adult collector Kristina Frazier-Henry into orbit. Frazier-Henry of Indiana is a serial blogger who has written 1,325 reviews on Epinions.com under the handle kristinafh. Her take on Grand Entrance Barbie:
I am a fanatical Barbie collector. Fanatical in the way that I would rather have an NRFB (that’s Never Removed From Box) Barbie than just about any other gift. Surprised? Yeah, thought you were.
Doll Description
This Grand Entrance Barbie is the first collector doll designed by Carter Bryant. It came out in 2001 and was met with a lot of oooh’s and ahhh’s from the adult collecting world. Here’s why.
Close your eyes and imagine an elegant ball. Your hair is blond (natural of course) and shiny. There’s no frizz to be had. The sides of your hair are gently gathered back while the back of your hair is curled in waves and lays gently across your shoulders.
Your gown is a steel blue taffeta creation made by designer Carter Bryant. The bodice is fitted and compliments your elegant waist. Underneath your gown is a thin, slip-like layer of tulle the color of ivory. Sewn into the middle part of your gown is a creamy pink silk sheath. The way the light shines off of the creamy pink makes a total stranger want to come over and touch you.
A Sabbatical
In 1998, Carter Bryant decided he needed a hiatus from Barbie and the fast life in Los Angeles. He returned to his roots in Springfield, Mo., and moved in with his parents. Driving by a local high school, Bryant claimed that he saw some local high school girls “wearing kind of, you know, oversized clothes, big, baggy jeans ... just got me to kind of thinking, you know, wouldn’t it be cool if there were some characters that kind of accurately represented today’s teenager.”
He dashed home and made sketches for a new doll to compete with Barbie. Its name was Bratz, described by Margaret Talbot in a 2006 story in The New Yorker titled “LITTLE HOTTIES: Barbie’s New Rivals,” as a design that “showed a face in which the lips and eyes were cartoonishly prominent and the nose was vanishingly small: it was as if the doll had undergone successive rounds of plastic surgery.”
Back to L.A.
In 1999 Bryant returned to Mattel as a Barbie wardrobe designer but continued to refine Bratz, which he presented to Isaac Larian, president of MGA Entertainment—a minor, money-losing electronic games company located in the San Fernando Valley of northwest Los Angeles.
The story gets murky as to who did what when, but a Mattel phone record paper trail indicates that Bryant was working on Bratz and talking to Larian from his Mattel office until he handed in his notice in October 2000 and went to work for MGA.
Bratz was launched in 2001, caught on big and began generating $1.25 billion a year in sales while the Barbie business declined some 12.5%. In 2006, Mattel decided it had been ripped off and instituted a lawsuit. Among the charges made by Mattel was that former employee Bryant’s 3% royalty on Bratz brought him $30 million.
Bryant and Mattel settled out of court, but Mattel is going after MGA in a trial that started last Tuesday. Meanwhile, MGA is countersuing Mattel.
The question here is not about dolls—or even this trial—but rather about a corporate culture that causes a creative employee to take a hot idea to a competitor, rather than bring it in-house and jointly reap the rewards.
Craigslist v. eBay
As readers know, I am no fan of eBay. Last Feb. 7, this cranky little e-zine published, “Should Congress Shut Down eBay? Is this auction site the world’s biggest criminal conspiracy?” I wrote:
If my numbers are remotely correct, it means that eBay is the supreme enabler of counterfeiters, forgers, hooligans, miscreants, petty crooks, pirates, rapscallions, reprobates, rogues, scallywags, scamps, scoundrels, swindlers, thieves, thugs and villains on a scale heretofore unimagined in human history.
If my numbers are correct, eBay is perpetrating the largest, most pernicious worldwide criminal conspiracy and fencing operation the world has ever seen.
If my numbers are correct, eBay is costing consumers whose homes have been burglarized—and businesses and copyright holders of all sizes whose property has been plundered and who have lost legitimate sales—billions upon billions of dollars, not to mention the insurance companies that have paid for the losses.
I am no fan of Craig Newmark and his Craigslist, a Web enterprise that seems bent on (1) taking over the classified advertising business and (2) putting traditional newspapers out of business. My problem is not that Craig Newmark is unhorsing a vestigial medium, but rather his service in 100 cities on five continents is mostly free. The free market, freebooting buccaneer in me screams, “For Pete’s sake, if you’re going to revolutionize an industry, do it to serve customers and make a killing while you’re at it!”
Now these two highly questionable organizations are in a fascinating death struggle.
In 2004, eBay bought out a former employee of Craigslist and wound up with 28.3% ownership. The two companies said that deal would allow eBay and Craigslist to “share expertise, resources and creativity.”
“Craigslist is an excellent example of how the Internet brings people together,” said Meg Whitman, president and CEO of eBay. “Whether it’s to trade goods, help neighbors or speak out on important issues, Craigslist has become the online gathering place for local communities.” eBay was given two seats on the Craigslist board.
Fast forward to the next year, 2005, and eBay announced that it was starting Kijiji—a series of 50 Web sites around the world offering free classified ads in direct competition with Craigslist. Alex Kazim, senior VP of eBay’s new ventures, proudly announced, “Kijiji builds local communities online, giving neighbors a way to come together around local needs and interests.”
On April 30, 2008, eBay filed a 29-page complaint against Craigslist in the Delaware Court of Chancery, claiming in essence:
NEWMARK AND [JIM] BUCKMASTER [CRAIGSLIST CEO]CRAFT A PLAN TO DILUTE AND DISENFRANCHISE EBAY
Let me say, if I were Craig Newmark and Jim Buckmaster, I would sure as hell do everything possible to disenfranchise eBay after buying into the company, learning the business and starting a competitor.
Craigslist filed a countersuit suit in California State Superior Court in San Francisco requesting a jury trial with the following complaints:
* UNFAIR AND UNLAWFUL COMPETITION UNDER CAL. BUS. AND PROF. CODE §17500
* FALSE ADVERTISING UNDER CAL. BUS. AND PROF. CODE §17500
* CALIFORNIA TRADEMARK INFRINGEMENT AND UNFAIR COMPETITION
* CALIFORNIA PASSING OFF AND UNFAIR COMPETITION* DILUTION UNDER CAL. BUS. & PROF. CODE §14200
* BREACH OF FIDUCIARY DUTY
A Personal Digression
In the 1960s, I was at Grolier Enterprises, which was run by four dynamos: founder Elsworth Howell, whose real love was judging dog shows; VP Bob Clarke, a lovely human being who started in the Grolier mail room and died young; Ed Bakal, a rough-hewn ex-paratrooper; and Lew Smith, a brilliant, low-key marketing genius who went on to become Lester Wunderman’s creative director.
Grolier’s business at the time was selling Dr. Seuss books to kids. The competition was Weekly Reader Book Club and Scholastic’s paperback book clubs. All sold books to students in classrooms through the teacher.
Using the Scholastic paperback model, a guy named Joe Archie started the Willie Whale Book Club. Elsworth Howell watched it grow and told Archie he was interested in buying Willie Whale. They signed confidentiality agreements, and, stupidly, Archie laid out his entire business plan, MO and results for Grolier to see. Whereupon Howell told Joe Archie that he had decided not to buy Willie Whale and started the Peter Possum Book Club offering children’s paperback books in direct competition with Archie and Scholastic.
Archie sued and lost.
If history repeats, my bet is that both Mattel and Craigslist will lose.
Takeaway Points to Consider:
* As an employee, you come up with a great idea for a new product that could be a moneymaker. Do you trust your current managers enough to give them first dibs? Or would you keep it secret and surreptitiously offer it to competitors?
* As an employer, do you encourage new ideas from within and—if they come to fruition—are the creators rewarded?
* As an employer, do you engender trust among those who work for and with you?
* If not, why not?
* If an employee is drawing salary and benefits, then according to United States copyright law, if “the work was done within the scope of his employment (whether the work is the kind he was employed prepare; whether the preparation takes place primarily within the employer’s time and place specifications; and whether the work was activated, at least in part, by a purpose to serve the employer), then the work is a work for hire and the employer is the initial owner of the copyright, rather than the employee who actually conceived and fixed the expression.”
* Carter Bryant maintained that he conceived and developed the Bratz doll when he was at home in Missouri and not in the employ of Mattel. Therefore, he reasoned, he owned it and had the right to sell it to MGA.
* Employers and employees alike are urged to look carefully into the pros and cons of noncompete contracts.
* If you’re working up a new idea on your own, always use your personal computer and cellphone. Don’t leave a digital trail of memos, notes, proposals or e-mail exchanges on the company server. Do not use the company phone to make calls or receive calls about your project. Do not leave a paper trail in your filing cabinet.
* If you swim with sharks, chances are you will be eaten.
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