Above is one of my favorite scenes from Wonder Boys (2000), about a writing professor who can’t seem to finish his new book because he keeps writing so many different parts. Now, at over 2,000 pages long, he sees no end in sight. I see this problem in the world of startups quite a bit. Growing startups see someone else doing something that is gaining traction, and then they add that use case to their company as well. Instead of sticking with the earlier choice of their business’s direction, they now try to remove that direction and accommodate more choices. Need I remind you of every company launching their own daily deals arm, or Facebook copying every social startup ever.

For growing companies, it’s a very common feeling in a business to always be jealous of what another business has and neglect all the things your business has going for it that the other one does not. But it is still wrong. You made a choice, and it looks like it’s working. Don’t undo those choices you made and ruin your growth. For companies with some growth, the lure of an attractive market segment can be overwhelming at times, but choosing to focus has more advantages. The first is that you develop a concrete brand for your customers. They know what you stand for, and what you are trying to achieve. What the risk of expanding too early? For growing companies, the main one is alienating your core customers. Let’s say you operate a luxury good, and to expand your market potential you offer a lower cost offering. What your brand used to stand for (exclusiveness, personal service) changes as the market is expanded. Those core customers may no longer identify with your company of your other customers and may now seek alternatives. What also happens is all that thought and development time that went into the expansion did not go into your core business.

I would argue you should choose to focus on one use case for one customer segment for as long as humanly possible as a growing company. That runway ends when you anticipate either a technology shift away from your use case (for Dropbox, that would be something like less reliance on files due to cloud services in the future), you are running out of ways to add value to your core segment’s core use case, or your use case stops growing for that segment (note: this is different from the game theoretical or innovator’s dilemma problems of more established companies where action should be taken quicker, but isn’t). I think a lot of startups fall into the trap of “this isn’t a large enough market”, as if acting like venture capitalists responding to their pitch. First off, market size only matters if you capture a meaningful piece of a market, so you should focus on capturing a meaningful piece first. That will also give you a much better understanding of how big the market could be. Second, you are most likely not a VC. You don’t need a home run to be successful. VC’s do, because most of their other investments will fail.

To wrap up, starting a business a is a choice, and you should make sure the product of your business reflects strong choices as well. You need to give that product a chance to show you made the right choices, and if you did, don’t second guess your direction because another business has made some good choices as well.

No replies are not a good idea for big companies and especially startups because you want to leave open any opportunity for a user to provide you feedback or ask questions. Giving your users a no reply tells them you don’t want to hear from them and don’t think their opinions/issues are important. They are also a little more likely to end up in spam folders. CampaignMonitor has a great write-up on this, so I won’t belabor the point.

What I want to do is go deeper and talk about customer service and variability. There are five types of customer variability in services:
Arrival: when someone wants a service
Request: what someone wants from the service
Capability: someone’s ability to perform a task required of the service (particularly in self-service)
Effort: how much effort someone is willing to put in for a service
Subjective Preference: someone’s opinion about how a service should be delivered

In service, there are two strategies for dealing with customer variability: accommodation and reduction. Accommodation is accepting customer feedback/interaction wherever the user tries to initiate it (email replies, chat, phone, twitter, etc.) and adapting to it. This leads to the best experience for customers, but also costs more and is more complex to do as you have to monitor/staff multiple channels. Reduction is the opposite: defining one way customers can do things (prix-fixe menus, noreply, hours of operation, iPhone only). This is very cheap and simple to manage, but leads to a worse experience for customers.

A restaurant is a type of service that can either reduce or accommodate variability in many ways.

How they reduce variability:
Maintain and publish hours of operation
Manage inventory through reservations
Special prices at off-hours
Prix fixe menus to eliminate choices for customers

How they accommodate variability:
Self-service salad bars and buffets
Train workers to host, wait, tend bar, and bus tables depending on which type of work is needed
Allow guests to stay as long as they want
Allow customers to set tips based on service

Both are totally viable strategies, but for customer feedback, I find that reduction strategies just don’t work because you eliminate feedback from certain types of customers i.e. those that don’t fit your preferred method for communicating with you. Those are probably the customers you need to learn more about. Also, for a reduction strategy to be successful, it pretty much requires great training of your customers. This is really hard to do unless frequency of interaction is high or the penalty for breaking the rules is very severe. In an app or website’s case, it is easy to train someone how to use the app because hopefully they are a weekly active user, but much harder to train them how to deal with a problem with an order, as that (should) happen very infrequently.

So, not only should you think twice before setting a no reply, but also you should think about your strategy and whether you’re attempting to reduce or accommodate variability or your customers and why.

For those that aren’t familiar with the player in football, a fullback is an offensive player who is primarily a blocker for running plays. On running plays, the offensive line opens a hole for the running back. The defense tries to close that hole by running into the hole. What a fullback does is go through the hole before the running back and pushes everyone out of the way so the running back can get through and and make a big play. If things go well, all you see if a running back running into the endzone without even being touched. The fullback is a crucial, but under-appreciated position in football because all attention is given to the person making the big play. But, in front of almost every great rusher there was been a fullback clearing a path for them.

So what a manager should do is learn about an opportunity from a star employee and clear a path organizationally for that employee to seize that opportunity for the company. The manager could come out a little bruised, but the employee hopefully scored a touchdown for the company.

Anyone else have any good analogs to management?

A second, but related point, is the emergence of the niche marketplace. Venture capitalist Andrew Parker has a post called The Spawn of Craigslist in which he shows how the behemoth marketplace Craigslist is getting slowly disrupted in a vertical-specific way. Venture capitalist Chris Dixon expands on this idea, saying that the only way to be successful as an online marketplace now is to take a vertical-specific approach.

Together, these venture capitalists describe a future in which there is a specific app or specific marketplace for every need a user might have. Instead of going to Craigslist to find an apartment, movers, a maid, a freelance web designer for your home business, a date, and last minute tickets, a mobile user would instead have an app for Padmapper, TaskRabbit, Pathjoy, ODesk, HowAboutWe, and WillCall. The key to being a successful venture capitalist then shifts from finding businesses that tackle very large markets e.g. Craigslist to finding businesses that target markets that could be much bigger with unbundling e.g. Airbnb.

All of these VC’s are clearly smarter than me, but I take a somewhat contrarian view here. I hope the above example points out the main problem with this theory. In the above picture, in order for this mobile user to accomplish his/her goals, instead of needing to just know about and have an app for Craigslist, s/he now needs to know about and have apps for six separate businesses. One other thing venture capitalists agree on is that mobile app discovery is hard, and that the amount of apps mobile users will download and use is limited by both device memory as well as human memory. This same problem faces the sellers of services on marketplaces. With no aggregate marketplace, it may be harder for a seller of multiple services to know which ones exist for which product/service they are selling. Marketplaces thrive on a multitude of buyers and sellers. Unbundling of marketplaces makes building that two-sided network harder.

Something has to give here. You can’t have a future where everything is accomplished online via a mobile device, consumer’s preference on mobile is for apps, there will be hundreds of specific services for anything a user needs that are more powerful than aggregate services, app discovery is difficult, and people will only have 41 apps per phone. I think there is some sort of equilibrium here. Even if app discovery is solved (and that’s a hard problem), the rate of successful unbundling certainly seems like it has to be limited by 1) the amount of space on someone’s phone, and 2) user’s inability to be aware of hundreds of niche services they may need at any time. If you think a recommendation engine could solve this with big data, I recommend you read this article about how successful that’s been for other services.

If I had to guess, I would surmise that user unbundling will not be a trend in and of itself, even if it is a trend in technology startups building new businesses. Unbundling will continue when either 1) the frequency of the activity that is being unbundled is high (my standard would be weekly), or 2) the advantage of the unbundling is exponentially more valuable than the bundled version of the same activity. For criterion 2, that advantage will also be a moving target where the advantage has to become greater and greater to justify phone/brain space as more apps improve their utility. Number of apps per phone will continue to grow, but a decreasing rate, and with that growth, there will be a decreasing state of awareness for both apps that are on a user’s phone and ones that are not. If you doubt this, just think of how many websites you visit regularly. Think hard. It isn’t that high, is it? Now think about apps? Even less? Me too.

So, what does this all mean? Well, my take is that high frequency services like chat or picture taking continue to become unbundled from any aggregate services consumers use for them because of the ability of mobile to create superior user experiences for succinct actions. But, marketplaces that aggregate niche activities that users need only occasionally can continue to thrive e.g. eBay and Craigslist. One should expect only a handful of the dozens of services hoping to disrupt Craigslist or eBay or Amazon to survive, because of fantastic user experience or a high frequency of use. Finally, one should not be so quick to anoint the niche marketplace model as the emergence of mobile presents as many limitations to their success as it does opportunities for growth.

The way we receive and share news online is wrong. But it’s not our fault. All the main ways to receive and share newsworthy content have fundamental flaws. Now, I won’t take this space to rail on blog culture and how it’s a 100 articles a day of recycled press release garbage (I could, but I won’t). Instead, I’ll make the argument that I think we’re all going to have to accept that news is going to be the way it is for some time to come. That is, at a fast and furious pace, without a lot of context, and largely filled with what companies want to get out instead of what they don’t want to get out. As Rocky Agrawal said, and I’m paraphrasing here, “Quality news is like luxury airlines. If there was a market for it, it’d already exist.” With acknowledgement of that fact comes responsibility. If not the New York Times or TechCrunch, who is going to provide the context we need to make news more actionable and educational? No, the answer should not be MSNBC or Fox News. The answer is that it has to come from us, the readers.

This makes sense, right? One could argue the internet’s main disruption is its empowerment of the individual. And many individuals do provide context to the news in a way that is meaningful. Popular bloggers provide context to news all the time. In my industry, this certainly happened during the recent tech IPO’s, from Rocky Agrawal’s trashing of Groupon’s IPO in a completely analytical way to Mark Cuban’s defense or Facebook’s IPO to Bill Gurley’s examination of LinkedIn’s successful IPO.

But, as you can probably tell, these kinds of interpretations of key pieces of news are rare, and the exception. Most news gets posted and forgotten without any interpretation at all. Yet, a correct interpretation is where all of the value of news is in a professional context. If you can’t answer “what does this mean to me?”, then it wasn’t worth reading it. Further complicating the problem is the abundance of news and news sources today. What publications and bloggers should you read? Which articles from them? These questions are left up to you to figure out.

Before we dig deeper into the current problem, let’s do an extremely simplified (and in many ways, probably wrong) history of online news…

Online News Phase 1: Professional Curation of Content

In the early web, most people received news from newspaper sites like Chicago Tribune or portals like Yahoo. Content was surfaced to users the same way it was before the internet; an editor decided what was important. Users read what looked interesting, and went on their way. Content contained various levels of depth and context. Some of it was high quality, and some of it was just timely.

Online News Phase 2: Crowd-sourced Content

With the rise of blogging, a technology that existed for years but suddenly exploded in usage with the emergence of easy publishing tools like Blogger in 1999 and WordPress in 2003, editor-curated content suddenly had competition from thousands of non-professional, news-focused blogs, which were focused less on depth of content and more speed of delivery. Portals and news sites needed to adjust and did, using their capabilities to re-work the editorial cycle so that by the time their articles were published, they weren’t already “old news”. Content with more depth and research was de-prioritized. Blogs also provided opportunities for the community comment on stories, but comments stayed at the bottom of blogs and were public, but not easily share-able.

Online News Phase 3: Crowd-sourced Curation

With the rise of so many more potential news sources online, it became harder to find the right content to view. Quickly, the internet responded to this problem. Digg launched in 2004 to help users share and discover the best content. Digg was primarily a vehicle to keep up with the latest and greatest news, and featured a home page that showed the most submitted stories from Digg users. Reddit launched soon after with its mission to be the “front page of the internet”. More news surfaced and was shared than ever before.

Online News Phase 4: Social Networking

Digg and Reddit exploded in popularity among the tech elite, but became closed doors in a way to less savvy internet users. These sites formed tight-knit communities and gamed algorithms to provide certain content an extreme amount of visibility while most content stayed completely hidden. This was great for superstar bloggers in technology and politics, but felt impenetrable for quality writers not as devoted to building networks or writing about the latest technology fads. It also juxtaposed political news with funny internet .gifs, creating a confusing experience for a normal person that lacked direction.

In 2006, Twitter emerged, and combined easy publishing and curation into one format, with some lightweight commenting as well. With only 140 characters max, content was concise and easily digestible. No need to set up a blog. It took seconds to sign up and post. Twitter also easily allowed you to build a network where you could follow other users to see their content and easily comment back and forth. You curate your own feed of users and news, and don’t have to rely on Digg power-users.

Twitter has its problems as well though. With only 140 characters, most news is shared just as a link, with no context at all. This is no better than Digg or Reddit were. Again, a ton of news is shared, but very little is discussed.

Online News Phase 5: Crowd-sourced/Social Context?

So, what’s the next phase for online news? Well, I certainly hope, and will make the argument it will be, crowd-sourced context. Crowd-sourced context means that the meaning of the news and its importance will be derived and examined by its readers, and communicated for everyone else to enjoy in an ongoing conversation. Our immediate reactions to stories should go from our heads to a feedback loop on the news that is immediately shared with others. They should be recorded and contribute to an enhanced understanding of the news and its importance. Enter Quibb. Quibb is a new website where users share what they are reading for work and comment on what their colleagues are reading. It offers an easy way to discuss news with colleagues outside of the traditional blog comment environment, and catalogs all of this into a stream of noteworthy articles for your job. In the future, I can see this being the de facto way people catch up on news in their industry as it’s curated by you and your peers and you get the context for why people think these articles are noteworthy.

Why is crowd-sourced context the future? Well, as described above, the main ways we share and comment on news are broken. Commenting on blogs is something most people won’t do out of some sort of fear, but even if they did, those comments are only heard by people who scroll to the bottom of the page. Unless your peers go to that page, they have no idea you read this article and posted a response. Twitter is broken in another way; it only gives you enough space to really just post the link to an article. You get no context, and no opinion of why the person tweeted it. Digg and Reddit surface the most popular news content, but seem completely impenetrable for non-geeks, and again, lack discussion. Sites focusing on crowd-sourced context can deliver the news that’s important to you, why it’s important, and can make sure your team or your peers read the same thing and can also contribute to why that news is important. Comments could be public or only shared to your network.

Note: Quibb is in invite-only mode, but you can apply for membership via me to get a speedy acceptance.

Monologue from The Devil’s Advocate (1997), starring Al Pacino and Keanu Reeves (Warning: contains language)

In the business world these days, most startups seem to follow a similar formula to attempt to have success. Every press release will say something about a company’s “millions of downloads” or “10 million users”. Savvy journalists call these “vanity metrics”, in that they make you feel good and on the surface might impress people, but they don’t really mean anything (what metrics do mean something is another blog post entirely, but they usually start with “active”). They’re also easy to manipulate with money. It’s easy to get a million people to buy a $1 gift card if you’re paying them $10 to do it.

On the entrepreneur side, the tactic is typically described as “fake it ’til you make it”. A less suggestive name that still applies if you aren’t faking anything can be called “get hype”. Whatever you call it, it’s almost universally accepted as a good strategy. I don’t necessarily disagree that it can be. But, I think it might be on its last legs as a viable strategy for a growth business. The speed of business today is, well, let’s just say it’s hard to keep up with. The reason entrepreneurs fake it ’til they make is that, like puffery, as much as people know it’s bullshit, the tactic works. Blogs and other media outlets print those stats, potential investors, acquirers, and users read them, and the stories drive sign-ups, fundings, and acquisitions. The problem is that those three groups also can form another group: your future competitors. And, a future competitor adopting your strategy, or, put in a less polite way, cloning you, becomes almost a guarantee. It used to take years for this to happen. Now, it takes weeks.

Now, your little project that may or may not have some traction (and you’re telling everyone it does) becomes a “space”, and, before you know it, you’re in a race. A race where you don’t know what the track looks like, don’t know what the rules are, don’t know if your competitors are running or driving a Ferrari against you, and don’t know what you win if you get to the end first. Sound ridiculous? Well, let’s look at a case of it happening right now.

In my Design and Business Inspirations post, I wrote about Postmates, an on demand service for same say shipping. Postmates, originally a B2B business, was having trouble getting business customers with existing relationships with FedEx, UPS, and the like on board. But, they noticed that affluent San Franciscans were using the app to request food from places that didn’t deliver. They pivoted their service to “Get It Now”, a consumer app to request food or product deliveries from local businesses, delivered by bike messengers looking for extra gigs. They started getting some usage, shot out a bunch of promotions to drive even more usage, and hit the press on May 17th about their successful pivot. They picked up a few more stories from a couple more places, and things were looking good. Investors surely saw these stories. They’re now in a good spot to pitch to investors about a Series A to help launch this in more cities.

If you go back to that original piece of press though, you’ll notice Postmates wasn’t the only company mentioned. Here is way the “get hype” strategy starts to hurt. The press loves to compare. And every company these days, if they’re not already reading the blog your press is in, is monitoring mentions of their brand in press (see my How to Track Your Brand Online post for how). The competitive response happens in record time for Postmates. On June 21st, TaskRabbit launches DeliverNow, a direct competitor. On August 1st, YCombinator-backed Instacart launches for one-hour shipping for groceries. On August 5th, eBay launches eBay Now for same day shipping on all products. On September 6th, Business Insider declares same-day-shipping the next billion-dollar startup opportunity. This all happened in four months. Soon, it’ll start happening even faster. Postmates still has not even raised that Series A yet.

Now, one could make the argument here that this was bound to happen whether Postmates existed or not, and that all this competition actually helps raise their profile (a picture of Postmates’ CEO in sunglasses was the lead picture of that Business Insider article). You may be right. But, I bet it makes fundraising that much harder when every investor asks you how you’re going to compete with TaskRabbit and Instacart and eBay and Amazon and Shutl and numerous others. It’s really hard to tell if hype helped or hurt their chances of success. This is just one example. If you’re a geographic business and go after a “get hype” strategy, prepare for competition to pop up in other areas and countries copying your business before you even get there.

Okay, sorry for the long rant, but it’s needed to show there’s another strategy that Mr. Pacino more than adequately describes in the above video. If, instead of focusing on convincing everyone you’re successful in order to become successful, you actually spend the time doing other things that make you not have to pretend, what can you do? I call companies that do this silent killers, because you don’t know what they’re doing until they’ve already crossed the finish line and you weren’t even in the race. If you’re a silent killer, you can actively not seek press, actively not publish your numbers, drop that PR agency entirely and not alert future competitors as to what you’re up to. This allows you to build a defensible business before anyone knows what you’re doing and get a real headstart on any future competition.

Now, it’s hard for me to describe a good example of this for a current startup (if so, they wouldn’t be very silent now, would they?), but I can tell you about an example from the tech world. The press loves to talk about the tech giants, even though the giants change all the time. First, it was Apple and Microsoft. Then Google and Yahoo. Then Microsoft and Google. Then Apple and Google. Now, Google and Facebook. Facebook used a “get hype” strategy to achieve $100 billion valuations in private markets with many pundits suggesting they would crush Google despite profits a tenth of Google’s. Instead, Facebook’s hype crashed its IPO, and its market cap is over 50% below peak valuations. Every other “get hype” IPO has suffered similar fates (Groupon and Zynga, most notably).

Facebook’s stock performance since its IPO (graph courtesy of YCharts)

Meanwhile, two silent killers have thrived. Amazon, which has been around for longer than Google, but until recently, has never been much discussed as a tech giant, wasn’t fighting it out in the press for mind share dominance. Instead, they acted like a silent killer. They had some engineers in South Africa innovate on cloud computing, entering a web services business with entrenched competitors that they totally out-innovated. With a debut in 2006, Amazon Web Services is now a $2 billion business, and one which no traditional web service company has been able to catch up to, despite having been working on web service solutions for tens of years longer than Amazon. Amazon Web Services was a not a “get hype” strategy. In fact, it probably couldn’t be. Most people still have no idea what cloud computing is. And that helps Amazon, because it means not just anyone can copy their strategy, because most don’t even understand it.

Amazon’s stock performance since launch of AWS in 2006 (graph courtesy of YCharts)

Another example is LinkedIn. LinkedIn launched as a business social network well before Facebook and grew steadily for years while MySpace and Facebook secured all the headlines. Instead of just growing users via a “get hype” strategy, it grew a business as well. While CareerBuilder and Monster spent billions trying to entice job seekers to post their resumes online for job openings, LinkedIn figured out that network referrals, not application processes, create the best candidates, and built tools for recruiters based on that premise. LinkedIn users gladly gave the company their resumes as content to build their profiles. LinkedIn IPO’s well before Facebook did, and their stock price jumped from a $35 offering to over $100 on the first day. After delivering solid results quarter after quarter, its stock price is at $120, whereas Facebook is down over 50% from its IPO price, and Monster’s stock is down from a peak of $57 to just $8.50. Other silent killer IPO’s have performed well also (examples include Zillow and Palo Alto Networks).

Now, this is not to say that the silent killer approach is for everyone. For example, as much as he may have wanted to, there is no way Jack Dorsey, the founder of Twitter, could have grown Square quietly. There are just too many eyes on him. Nor do I want to imply being a silent killer is a strategy you can pursue forever. Amazon is certainly no longer a silent killer, nor could it stay that way after it disrupted web services with AWS and content distribution with the Kindle. But for most companies, no one cares what you’re up to until you try to make them care. Using hype to make people care is a strategy you should carefully consider the pros and cons of in today’s environment. You may be better off building a silent killer and shocking the world when you’ve already won a multi-billion dollar race no one else knew had started yet.

Reid suggests that individuals create their own story highlighting their competitive advantage as business professionals, which I agree with. One way he suggests to do that though is to basically create your own title. So, instead of making your LinkedIn headline “Online & Interactive Marketing Director at GrubHub”, he suggests it read more like “Experienced Marketing Manager in Online Marketing and Product Strategy”. I disagree with this suggestion entirely. My reasons coalesce nicely with my Personal Branding’s Not About You post, so I’ll reiterate a couple of those points.

First, I’ll tackle the entrepreneur case. If you are currently running your own business, it should be your goal to get that brand in front of as many people as possible. That means your optimal title would not be “Entrepreneur & Blogger” but “Founder, MyAwesomeStartup.com”, just so people see that URL. Second, if you’re not an entrepreneur, one of the key competitive advantages an employee or potential employee can have is showing other potential employers that they can be dedicated to the company they work for. So, if I know someone works for a certain startup, and has a title on LinkedIn that doesn’t mention it but only mentions things about them specifically, I know their heart’s not in that startup. That makes me question whether their heart can be in any company, or are they just all about themselves.

Part of what you are selling if you are looking for a job is that you can become part of a whole, and the best way to demonstrate that is by showing you’ve done that before. Optimizing your LinkedIn to be less company specific shows the opposite, and raises some flags. Employers want to know that you can work well with a team and develop a passion for their brand and not just your own personal brand or your side projects. These days, with personal branding being all the rage, many people can’t do that, which makes it precisely one of the competitive advantages Reid suggests you harvest in your career.

I think this logic is flawed in a much more dramatic way than just assuming every new technology space will be winner take all. In the emphasis to win ever-emerging new markets in technology, one of the main questions that is frequently lost is what is the prize in winning. The prize should be profits, but I think many companies are going to realize that’s not necessarily a given. Look at Groupon. I think it’s fairly consensus that it “won” daily deals, but at the cost of winning, they struggle to find any actual profit from it despite 50% margins. Their value is now less than what Google offered to acquire them for. And the “losers” of daily deals are in worse shape. Living Social is bleeding money and trying to get into any other business besides daily deals to find profits. BuyWithMe was liquidated, and Gilt is laying off people left and right.

A similar situation has now emerged with check-ins. Foursquare “won” that market, beating out competition from Gowalla, Loopt, and even Facebook to a certain extent. Sure, it got them a $600 million valuation, but they just pivoted to a local recommendations app (read: Yelp competitor) where its business model comes from paid recommendations by national chains. Not only is this change baffling and frustrating/contradicting for foursquare users, but it is unlikely to be source of profits for its investors as Yelp as a market comparable of $1.2 billion. At best, venture capital investors will double their money, and that “best” is very unlikely. The prize of winning the check-in game seems to be abandoning all the data check-ins create to shill corporate branding to users to used you in the first place to support local businesses.

This emphasis on “winning” can be very dangerous for young companies. First, it creates a rivalry that prevents competitors from learning from and working with each other when necessary. Second, it creates an emphasis of growing a business to build market share instead of to build future profits. Market share doesn’t matter if the market doesn’t have any value. These mistakes can be very hard to recover from, and we have some cautionary tales in the market currently that should remind us to stop harvesting a “winner take all” mentality and start thinking about how to develop your business to make long-term profits.

Everyone in New Orleans will define lagniappe the same way, as “a little something extra”. The real meaning’s a bit more complicated than that. For example, the other day I ordered from Leona’s on GrubHub. Every time you order, no matter what you order, they add in at least one of these mini-cupcakes they make for free. First off, they are delicious. Secondly, there’s no message about it, and you didn’t have to pay anything for it. It’s just there for your enjoyment. That’s lagniappe, that little something given to you for free that you weren’t expecting but is such a treat to find. This type of practice is common in New Orleans, but you rarely see it elsewhere outside of the extremely common baker’s dozen or the fortune cookie in Chinese restaurants, which, because they’re so common, are expected and therefore no longer really lagniappe.

This type of practice creates such an overwhelmingly positive impact on the experience, I don’t understand why the practice in business seems to stay limited to small shops in New Orleans and bakeries. A small gesture can go a long way in creating a memorable experience with your customer, and whether you deliver food, make doughnuts, or do management consulting, there is always a way to give lagniappe. So, what little something extra are you providing your customers? How can you give lagniappe?

With Black Friday this year, I thought I’d see what I could pick up for myself online with the deep discounting going on. Shopping online was a breeze. I could do it at my own pace, search exactly for what I wanted, and not have to deal with any crowds. Why anyone is camping out in front of stores for this day I’ll never understand.

Unfortunately for brands, marketers seem to be getting just as irrational as the bargain shoppers they’re attempting to exploit. For this blog post, I’ll use Bonobos as an example. I made my first purchase on Bonobos.com over six months ago, after seeing an ad on Facebook.com offering $50 off my first purchase. Bonobos is known for making pants that fit the American male better than European designers. When I browsed the site, I noticed that even with $50 off, the pants were still too expensive for my liking. As a result, I purchased some shirts with my discount. Since then, I have been back to the site a few times to see if their prices have lowered, and they never have.

Bonobos has used an advertising device called retargeting aggressively since that point in time. What retargeting does is identify someone like me who has come to a website, but did not buy. Then, wherever else I go on the internet, Bonobos will attempt to show me ads. In this case, they show a discount of some sort to entice me to return. It is a good strategy, but it has never worked because the prices are still too high.

On Black Friday, browsing another site, I see a retargeting ad for Bonobos promising 20% off. It is more aggressive than what they offered previously, so I click on it. When I arrive at Bonobos, I see a message about their Black Friday deals, which are $15 off a $100 order, $40 of a $200 order, and $150 off a $500 order. To compare directly to the retargeting ad, these discounts are 15%, 20% and 30% respectively. I browse the selection, and it’s still too expensive for my tastes. I leave the site, and browse the web a little more. While on Twitter, I see someone I follow recommend Fab.com. Fab sells all sorts of design products at deep discounts for limited periods of time.

Designers will let Fab sell their items at a discount to build awareness of their brand among their vast email list and to relieve themselves of unsold inventory. This makes sense, as the cost of production is a sunk cost, and any price you can receive for these goods is better than having them take up space in a warehouse. I had heard of this site before, and thought it might have some solid deals for Black Friday, so I sign up. As I scroll down the page, I notice a deal for Bonobos, which is 40% a select group of items. This brings their prices down to an affordable level for me. Fab had my size, so I purchased some pants.

These same items were available on Bonobos.com, but for about double the price. I wondered why Bonobos would be willing to let another site charge a lower price, in which case Fab collects all of the customer information, so Bonobos does not begin to develop a personal relationship with the customer. They’re likely also making drastically less from Fab than through a direct buy on their site.

I think, in this case, Bonobos was operating under an assumption that if they insert a third party between this lower price and their brand, it would not harm their ability to charge more in normal cases than if they advertised these prices on their own website. I also think they might have been trying to lure new customers from Fab. They are able to brand these prices as from Fab, and not from Bonobos.

I wonder if this is the right strategy or a sophisticated form of mental accounting. In this case, they were willing to offer a known customer like me less of a deal for going direct than through going through a third party where they have to pay Fab a part of the sale. Bonobos would have made more revenue by showing these prices directly on their website, and would also have been more likely to make the sale. They are lucky I saw this deal on Fab. They almost lost a sale on inventory which they are desperate to rid of.

Disregarding Fab entirely, I also did not understand why the retargeting ad and the Black Friday deals on Bonobos.com advertised such different promotions. One could make the argument they were testing which offers were more impactful. This type of test is much easier to do with A/B testing. Furthermore, if you are testing, you would want to complete that test well in advance of a big event like Black Friday so you know you are using the promotion which is most impactful. It appears Bonobos is advertising irrationally, using mental accounting to justify different offers in different advertising locations, even though, in many cases, they are reaching the same potential customer and just confusing them. There should be no reason they are willing to spend 40% to drive a sale on Fab, and anywhere from 15%-30% based in volume or 20% via retargeting for, in many cases, the same merchandise.

I feel guilty for beating up on Bonobos because they’re a good company, and their site went down for Cyber Monday, but hopefully they learn to present a consistent promotional strategy that aligns with their goals and their profit margins.

1) spend money on awareness advertising initiatives

2) create an environment for awareness

For the former, we identified a few affordable ways build awareness and spent money cost-effectively. For the latter, it was all about being out and about. Going to events, posting comments on blogs – anything that you get your name and your brand noticed, hopefully with a bit of a story behind it. A big thing is getting the rest of your employees to do the same.

Once you start to spend money on awareness advertising initiatives, it doesn’t matter how effective that initiative is; it will build awareness for one group guaranteed: salespeople. Particularly salespeople for other advertising companies. Most marketers probably consider this annoying because they are now inundated with cold calls and emails about a ton of marketing initiatives on which they don’t have money to spend. But this phenomenon presents a huge opportunity for the startup marketer. That opportunity is counterselling. It functions primarily the same way you would want to convert your target market: awareness leads to consideration which leads to trial.

So now you have a targeted group of potential customers emailing and calling you to find out more about your business. Who cares if they ulterior motives for that behavior? They’re still potential customers. So what I did is I responded to them. I thanked them for their emails. I set up phone calls. What did I do on those phone calls? First, I pretended I had money. Second, I told them the truth in that I had very little time. Lastly, and most importantly, I countersold.

Now, I want preface this by saying I am not a natural salesman and that I’m not saying all startup marketers need to become salespeople. The beauty of this group of potential customers is that their job is to listen to potential clients. And once you are on the phone with them, you are a potential client.

So what is counterselling and how does it work? Well, if a salesman is any good at their job, on that phone call their main job is to ask a lot of qualifying questions to make sure you can be a successful client for their company. These will vary by company, but mainly their intention is to make sure they aren’t selling forks to an ice cream shop kind of stuff. What these questions do though is give you a chance to tell the story of your company: how it was founded, the value proposition, a funny anecdote about how some people are using the service, and ideally, something that makes the company look bigger than it is.

Now, I know what you’re thinking. Sounds a lot like one-to-one marketing. I need a million users not to get fired. I don’t have time for this. Well, firstly, one customer is better than zero customers, and two, it’s isn’t one-to-one, and I’ll tell you why. The goal of your answers to their qualifying questions should be two-fold. First, you want to get the salesperson excited about trying your product him or herself. This is much easier to do than for normal users as it helps them qualify your product as a good potential sale or not, and they think it will impress you that they’ve used the product, making it more likely they can close.

Second, you want to sell the salesperson on the fact that you’re a serious potential deal. This is not hard as salespeople are notoriously optimistic, and because you pretended you have money, their biggest obstacle. What this second objective accomplishes makes sure of is that this salesperson at least tells one other person at their company about you i.e. their boss, and more likely, their entire sales team. The reason for the latter is because he wants to protect himself from one of his team members also calling on you and stealing his sale. So what you have after one call is basically a brand evangelist at that company.

Now, I don’t want to create the illusion that this always works, but it’s been pretty effective for me at enticing trial of the service. And if your product is good, trial can very easily lead to a repeat customer or a few repeat customers at that company. Also, I want to make sure you know that this is a good thing for the salesperson. They get to tell their story more often as well, and have a shot at convincing you they normally wouldn’t have gotten.

I also want to mention that the sales process does not stop there for this company. They are going to come back with two things (lots of dualities in this post I’m noticing):

1) a more serious meeting/proposal

2) some feedback on using your product.

It’s important to take both very seriously. If you dismiss the first, you will not have a repeat customer out of spite. If you dismiss the second, you’re just a bad marketer. I’ll assume you’re taking care of the latter, so let’s discuss the meeting/proposal in more detail below.

When a salesperson asks for a meeting or sends a proposal, it’s important to respond with something. First off, taking a meeting is not a bad idea if it’s genuinely a solution you may consider. You can learn about costs and implementation and add it to your marketing plan once you are ready for it and/or have the funds. But you may decide there is no value for you to taking the meeting. In this case, you have to handle things gracefully to keep them on your side. I generally like to blame things on the boss, saying that we re-prioritized some things and won’t be able to consider this for another six months. Something like that. Always thank them for their time and give compliments about their service.

All a salesperson wants is a fair shot at your business. So make sure they know they got one, and you can use counterselling to effectively build awareness, consideration, and trial within other companies.

For this post, I’d like to talk about a specific type of user, or a specific type of girlfriend. This is the user that’s been a few times, and they are into it. They love what you’re doing. They’ve professed their love to all their friends. They love it so much that they want to spend more time using your site. This is great, right? Exactly what you wanted. Check. Got this one covered. Let’s go after the users who are less engaged.

Not so fast. A specific type of problem can arrive with these types of users, if you’re lucky enough to get them (and you are lucky to get them). Let’s say your site is designed for “get in, get out” type of use, and it does that well. Well, these users have been there, done that many times. They want more. And you’re not designed for that. They’ve read the About Us page, liked your Facebook page, read your blog, all that. They’re actually thinking to themselves, “I like this site so much. How could I spend more time with it?” Sound familiar? You’ve got yourself a clingy girlfriend.

The problem with these types of users if you’ve designed your site so well for them that they outgrow it too quickly. There are some key ways to keep the engagement high without them over committing and burning out on you though. Coincidentally, many of these tactics are used during the onboarding process for websites/mobile apps, but they are just as, if not more effective, post-order for these types of users specifically. It is helpful to think of it as if you are continuing to onboard these users even though they are most sold on the product, and if there is no additional way to onboard them, you need to invent some. A few key tactics I’d like to describe for this:

“What you can do now” suggestions – Has the user completed an order? Don’t consider the session over. Tell them they can now that they’ve completed whatever the task was they completed. It’s very similar to a quality onboarding process. Some suggestions:

Invite friends
Fill out your profile
Visit your Facebook page
Go to your Twitter account
Read your blog

Great example (post-onboarding): LinkedIn
Status bar suggests other way to complete your profile.

Great example (onboarding): Dropbox
Checklists that are stricken through once completed.

“Post-usage” features – Another way to keep this type of user engaged is to create some sort of mini-experience post order for them or asking them to take a more active role in the site. They should be designed as ways to lose time. Some suggestions:

Games
Asking them to moderate content
Shuffle of non-personalized content
View what others have ordered
View statistics for the site for the day/week/month

Great example (post-onboarding): Quora
No picture. When Quora was inundated with new users, it manual review process for each answer was running way behind. So, for many users that had show good engagement, Quora began asking users to review answers on the sidebar of the home page.

Great example (onboarding): Hunch
Hunch asks random questions to get to know you better. They have thousands of them.

“Did you know/Ideas for next time” suggestions – This can be a great time to educate users on features that are for more advanced users, additional use cases for the site, or even company background. Some suggestions:

Download our mobile app
About us
Related content OR Expose different product category
Advanced feature tutorial
Charities you support

Great example (post-onboarding): Chegg
Chegg asks to plan a tree on your behalf after an order.

Great example (post-onboarding): Qwiki
Qwiki suggests different Qwikis to view after finishing a Qwiki.

Unrelated, I’m thinking of changing my name…

As I interviewed candidates for GrubHub’s Marketing Engagement Manager position, the topic of foursquare came up often. Naturally so, as their platform popularized the application of game mechanics to develop engagement of users on websites and mobile apps. But what many people don’t realize is that foursquare’s engagement strategy is much more than badges and mayorships. The evolution of the product is a great example of a long-term engagement strategy.

So I had our job candidates walk me through what their engagement strategy has been from the launch of the application until today. Our interview candidates provided some fantastic analysis of their tactics with very little prompting from myself, so I thought I’d show case what I plus a few interview candidates described as the evolution of foursquare’s engagement strategy (portions of this program not affecting the outcome have been omitted for brevity’s sake).

Stage 1
Start Time: March 2009
Tactic: Badges
Target audience: Early adopters
Scenario: So, an early adopter has this app which lets him check-in to venues to let his friends know where he is. He’s out and about a lot and so are his friends. But most of his friends don’t use foursquare yet. So why should he bother? Well, early adopters value being the first to hear about and use new services. What appeals to them is status. Unlocked badges provide that status. Discovering badges before others create bragging rights. Since unlocking badges broadcasts that activity to Twitter by default, this serves as a great online sharing tool.

Stage 2
Start Time: March – May 2009
Tactic: Mayorships
Target audience: Early adopters

Mayorships launched during the same time as badges, but they play a larger role later in the diffusion process. After the early adopter and his friends unlock all of the badges, those badges cease to represent the status they used to represent. They also fail to reward checking in to the same place more than once. Mayorships are even more exclusive rewards that not only need to be unlocked, but also maintained by continuing to check in frequently. Mayorships also add an element of competition, since a venue can have only one mayor at a time. This competition and even more exclusive status keeps the early adopter coming back. Mayorships also serve another purpose. While they fuel online sharing just as badges do, they also are more likely to fuel offline sharing, particularly to the local businesses themselves e.g. “I should get a free drink here. I’m the mayor after all.” This is first reported as happening on May 26th of 2009.

Stage 3
Start Time: January 2010
Tactics: Special Branded Badges
Target audience: Brands, Early adopters, Early majority

Post-funding Twitter no doubt received some good advice form angel investor Jack Dorsey about the success brands were having on Twitter not only themselves, but for Twitter by driving awareness and new usage. On the heels of this, foursquare, thanks to its business development virtuoso Tristan Walker, started partnering with brands for branded, unlocked badges. The brands promote foursquare to new audiences (I doubt many Bravo! watchers were on the service previously), and brands develop a positive appeal with the early adopters already on the service. This tactic provides the early adopters with some much needed new badges to attain, as they have all the old badges, and mayorships have gotten too competitive in some cases. This tactic also provides foursquare with some revenue.

Stage 4
Start Time: April 2010
Tactic: Specials
Target audience: Local Businesses + Early majority

With mayorships requiring so much effort, local businesses wanted to offer rewards to those bestowed the title of mayor. Previous to this tactic, foursquare could add specials manually, but in April of 2010, they launched a platform for engagement of local businesses to create their own rewards within the foursquare platform. Local establishments could offer specials for the mayor as well as for other check-ins. This engaged local business, who saw an opportunity to create loyalty without a complicated system. This also incentivized check-ins for an early majority for which the non-physical, status-based rewards of badges and mayorships had little appeal, and who didn’t have a need to inform their friends of where they were. Specials make foursquare a viable one player game without using game mechanics.

Stage 5
Start Time: March 2011
Tactic: Personalized Recommendations
Target audience: Majority

As check-ins become a commodity, and as daily deals become more and more local, foursquare knows they can’t outdeal the competition for the hearts of consumers. But all of these engagement strategies are paying off, as foursquare has now amassed a large database of check-in data it can use to power a new personalized recommendation system. Instead of telling foursquare where you are, it can now tell you where you should go, based on your check-in history and those like you, creating a much larger value proposition than letting your friends know where you are.

Stage 6
Start Time: ?
Tactic: ?
Target audience: World domination

So with this next, yet to be defined stage, I asked our interview candidates to suggest where foursquare might go next to engage its user base in its quest for world domination. The answers were fairly similar, and revolved around the concept of the combination of steps 4 and 5 in a proactive way. One could describe it as push-notified, personalized recommendations for local deals. With the launch of Groupon Now, if this is where they want to go, they better hurry.

Twitter

This is probably the section most people know how to do already, but it is where the most mentions originate, so I still include it first. Thanks to Twitter’s home page redesign, most users know they can search Twitter and see all mentions of a brand or keyword. Well, what if you don’t want to keep refreshing Twitter all day? Applications exist for all mobile and desktop platforms to notify you when new comments mentioning your brand or any keywords you want to track exist. My favorite of the free platforms is Tweetdeck, though Seesmic is pretty similar. Tweetdeck in particular also pulls in data from Facebook, Foursquare, and LinkedIn related to your accounts on those platforms, but is not able to scan data mentioning your brand on them due to the lack of public availability. Tweetdeck and Seesmic are available as desktop applications that can be hidden in your tray until you receive a notification as well as all mobile devices. Reply to people if it makes sense and retweet some complimentary remarks.

One note here: Neither Tweetdeck not Seesmic will remain free forever. It’s important to note that there are other players in the space that already charge and may be better suited for your more aggregate monitoring needs, such as SproutSocial, HootSuite, Radian6, et al. This post focuses on free apps, but want to make sure you keep this in mind.

Forums

I know what you’re thinking. People still use forums? Hell yeah they do, and you should know what people are saying about you on them. BoardReader allows you to search all forums for mentions of your brand. What makes BoardReader even more invaluable is the fact that you can subscribe to searches so any time a new mention occurs you are automatically notified. Just perform a search and click the “See Tools…” link at the top to subscribe. My personal preference is RSS (no, it’s not dead), but setting up a personalized home page isn’t a bad idea either. Jump in the conversation if you want, but do it respectfully and don’t hide your connection to your brand.

Blog Posts

There are numerous blog search sites. The important thing to remember is that all of them are good besides Google’s. My personal choice is Icerocket. Just do a search and click the Results RSS link on the left. Pop that into your RSS Reader or personalized home page and you’re set.

News

In reverse of my section on blog posts, Google News actually works pretty well here. Just search your brand and find the RSS link at the very bottom of the page. Rinse and repeat on the RSS Reader or personalized home page.

Backlinks

If you’re asking yourself what are backlinks, well, you should learn some SEO. Backlinks are the most important part of search engines’s algorithm. They determine the authority of your website. SEOMoz has a great post on using Yahoo! Pipes to track new backlinks.

Now, all of this can be applied to your competition, so if that’s important, replicate these suggestions with your competitors’ brand names for competitive research.

So, now that you know how to track it, what are people saying about you?

In my last post, I talked about evaluating the targeting options available in a media buy, and really making smart choices about how targeted you need to purchase your media. Now I’d like to talk about using data to enhance the media buying process at each step of the process. No, I don’t mean the incredibly irrelevant Nielsen data that you have to pay a bunch of money for, nor do I mean the statistically irrelevant traffic/audience measurement tools that are available for cheaper or free (Comscore, Compete, and Quantcast exist, but they are so wildly inaccurate it is not worth making decisions based on their data).

I’m taking about your data. As a business, you likely have some data of customer lifetime value, historical cost per acquisition of a new customer, conversion rates from paid media sources, and repeat purchase rate. If you don’t have that, use assumptions or make numbers up as you go a long (I’ll explain that in more detail later).

As I said in part 1 of this blog post, every vendor should be able to provide some data of theirs to you about a potential media buy. This typically is an impression number. Impression data basically amounts to an estimated number of the maximum number of people who would see your advertisement. Depending on how they calculate this data (always ask), you may want to adjust the number (if they use a very conservative methodology, you may want to multiply it. If they use a shaky method that is not very conservative, you may want to only count a percentage of it). If you’re buying ads on the exteriors of buses for example, some vendors may use the bus ridership data to provide impression data. Those people may be likely to see the ad before they enter the bus, but this data ignores all of the pedestrians and drivers who also may see these ads. Keep that in mind.

Once you have impression data, you also have a cost quote from the vendor attached to the buy. From this, you can calculate a CPM (Cost /(Impressions/1000)). This is the standard cost measure for media buying, so it’s good as a comparison tool. Frequently, if you’re buying different pieces of media from the same vendor, the impression and cost data is broken out by each type of media. This can help you understand what pieces of media are the most expensive and may not be worth the price (more expensive does not necessarily mean more effective for you).

Once you have this data, you can estimate how many people enter your store, visit your website, call your number, or whatever your goal based on these impressions. That should be your conversion rate. If this percentage isn’t very small, you’re probably over-estimating. For example, one media buying/targeting option might generate a million impressions. I could estimate based on previous buys (or just pull a conservative number out of thin air) that 1% of those impressions visit my website, and from there 2% make a purchase. That equals 200 sales. If you don’t have this data or are a new business, estimate using industry benchmarks or whatever forecasts you have (2% is the ecommerce conversion rate average, for example). If another targeting option using that same approach projects to generate 100 sales for the same price, it’s probably not the option you want to choose of the two.

200 sales?! That’s great! Is it? This is where you should look at how much you paid for those sales, how much you earned from those sales, and how many more sales you should expect from those customers. Cost per acquisition measure how much it cost to acquire each customer. This should be compared to the revenue/profit of that sale and the lifetime revenue/profit you expect from that new customer (if it is a new customer. Keep in mind an advertisement may just drive existing customers back). If those 200 sales or the lifetime value of those 200 new customers equal more revenue/profit than the cost per acquisition, you’re possibly looking at a media buy you can pull the trigger on.

If that is the case, from a negotiation perspective, you’re sitting pretty. You have a deal you can bite on, and can just make some attempts to lower the price to make it even more profitable. A good way to make that attempt is to pretend those 200 sales or their lifetime value do not equal more revenue/profit than the cost per acquisition of the buy. If this really is the case (or you’re pretending it is), you can use this data to arrange a price more to your liking. One thing salespeople are not equipped to do is argue with your company’s data. If your data says this buy is not going to be profitable (or you’re pretending the analysis says that), they have to assume they won’t receive the sale unless they make it more enticing. This is one component not covered in Tim Ferriss’s ad buying negotiation tips that absolutely should be. Salespeople are not typically very analytical, so even if there are holes in your data, salespeople are not going to question your assumptions.

Once you’ve negotiated a better deal using data, it’s time to collect real data on how the media buy is performing. Is it profitable? Should I do it again? These are questions I hear a lot from advertisers they can know themselves with a little planning. Most advertising campaigns (except for extremely established brands) are meant to acquire new customers. At any point of sale, website confirmation process, or phone call, you can typically set up your system to tell if someone is a new customer. When you receive a sale from a new customer, just ask how they heard about you. On our website, any time a new customer places their first order, we have a one question survey that asks how they heard about us, and the answers are pre-filled with our marketing mix. 70% of people respond to that. That’s pretty good data. All you have to do is tally up that data to see if you’re receiving enough sales to justify doing the buy again. You can also track if these customers make repeat purchases. Refine your conversion data and lifetime value data for future buys with this data.

Here is an Excel template that can help get you started.

Data can make media buying a regimented, almost automated process that can come close to guaranteeing profitable media buying purchases. So, I challenge any one currently purchasing media today, what data are you using?

Someone from a company that will remain unnamed reached out to me recently. They were doing their first media buy and knew they were in unfamiliar territory. My original advice consisted of finding out the core components of your audience you think you can use for targeting purposes, and target as well as you can. An easy example is drivers. Solid approaches to reaching only drivers and not many non-drivers is to invest in interstate billboards and radio ads (oh, don’t give me that, you know there’s no reason to listen to the radio if you’re not trapped in a car). Being smart with your money means going after the type of media that has the customer targeting you want naturally built in.

So this person went out and received a quote from the vendor that had the targeting they wanted. It was a ridiculously high quote that definitely needed to be negotiated down. To cover those bases, I linked them Tim Ferriss’s guide to negotiating advertising, which I suggest anyone read through if they haven’t. What I also realized was a mistake in my initial advice. Targeting, up to a point, is certainly essential to making the right choice in media buying and making it cost effective. But it is only appropriate up to a point. If you’re targeting beyond just a certain type of media and are targeting certain parts of that media e.g. not just advertising on the USA Network, but doing it during Burn Notice only, you will pay a premium for requesting that targeting (if they can even do it. Traditional media can be incredibly unflexible).

When considering premium targeting, you have to receive rates with the premium targeting and without and compare the benefits to the cost. Some key questions to keep in mind when using this process: what is the value of the highly targeted media, and what is the value of the less targeted media? If the answer to the latter is zero, then of course you’re highly incentivized to pay for the premium targeting. If the answer to the latter is some percentage of the value of the premium media, compare that to the markup you’d pay for the premium media. It still may be more effective to choose the less targeted media.

An additional question to ask is, if I only choose the less targeted media, what percentage of my media buy will actually hit the more targeted media anyway? This may be hard to calculate, but you can use some common sense assumptions. Essentially, if you feel that many other advertisers are paying for the premium targeting, it would be low. If the media vendor has to check to see if they can do the targeting you’re requesting or if the premium targeting is a significant percentage of overall inventory, it probably isn’t being requested by many other advertisers, and your chances of hitting that premium targeting are higher.

Much of the time, when you run through this decision-making process, you’ll find you don’t need to pay for the premium targeting, but of course it depends on the situation. If you’re finding that you don’t need to pay for the premium targeting, there is an additional step you can take to create even more budget savings and/or increase the amount of media exposure you purchase. That is asking for remnant inventory. Remnant inventory is simply inventory that doesn’t get sold during an advertising time frame. This obviously won’t happen for extremely high coveted media like Super Bowl ads, but for most other media, they are at least a few impressions that go unsold and make the media vendor no money. Because of this, they may be willing to offload this inventory for a very low cost or maybe even for free.

What you need to consider is, back to the earlier question, what is the value of remnant media versus premium or untargeted media? In most cases, it is still a significant percentage of the premium and pretty close to the same as untargeted media from a normal buy. Depending on the medium, there could be zero or a significant difference in the quality of the inventory, so be sure to be sure to evaluate what the characteristics of a remnant impression are likely to buy e.g. for the USA Network, it’s likely not during primetime. But, it might be during Burn Notice re-runs on a Saturday and still hit the initial targeting you were interested in.

A common strategy is to buy some untargeted media and then negotiate any remnant inventory the vendor may have as a bonus. This doesn’t lock them into providing you media, but if they have a request for remnant from someone, they’ll fulfill it versus the media being blank. Since, in many cases, there is little difference between the quality of paid and remnant media, and since many media vendors have a significant inventory that goes unsold, advertisers can significantly increase their exposure with no additional cost. This is also a way sales people at media vendors can circumvent pricing floors without raising too much of a stink.

Excel can come in handy for evaluating the overall effectiveness of a buy that could consist of premium, untargeted, or remnant media, and deciding which buy to go after. My next post will go into more detail about how to use Excel and data to enhance the media buying process as well.

Bibio’s “Pewter In Grey” from his album Fi, 2005, soundtracking a commercial for L.L. Bean.

To back it up a second, let’s talk about where sampling came from. Sampling was born out of the DJ culture of hip-hop of the late 70s and 80s, where rappers would take an old disco or funk beat and rap over it. Rappers didn’t have the luxury of having full bands behind them, and a turntable and a sampler became much cheaper than a bunch of instruments. They might even re-use some of the vocals as hooks. Sampling by DJ’s helped hip-hop explode in the late 70s and 80s, and even revived many of the original tunes that were sampled. In many cases, sampling during this time celebrated the original source. It was a way to pay tribute to a song you loved.

Watch this video to hear how the genres of Jungle and Drum ‘n’ Bass were created from one 6 second sample.

A sociologist I can’t find the name of at the moment once said about Generation X that there most important question in life was no longer “why am I here?”, but “where is that from?”. It was important for Generation X to know and celebrate the source. Many times, the original artist wasn’t so fond of the tribute though, wanting royalties due to copyright infringement. This practice may have led to the change in sampling we see in generation Y.

Generation X grew up just as the internet was emerging, so everyone in that generation is used to finding books in the library to source for their term papers and newspaper articles. The concept of credit or tribute is very deeply ingrained in the mind whether it relates to music or a term paper or an article in a magazine or newspaper. The algorithm of the most popular search engine on the internet is based on academic sourcing, the concept that a link to another website is a list of it as a source. As members of Generation X became publishers, writers, musicians, businessmen, and artists, that concept remained in tact. But what about those who consumed the work of Generation X?

Generation Y has a totally different attitude. Generation Y grew up on the culture of Generation X, only with one difference, the immediate availability of anything they wanted with the internet. Many Gen Y music fans adore the the music of Generation X’s samples, without ever hearing the originals they’re based on. If a Gen Y person wants to read up on something, they don’t go the library and find sources. They read the Wikipedia and are all set. Now, as members of Generation Y become writers, musicians, and artists, sourcing seems to be lost. Generation Y DJ’s are more embarrassed than tickled if you ask them about the sources of their material, and they surely don’t go out of their way to make sure to give credit to their sources. I believe it was the musician and sampling magician Prefuse 73 who once said in an interview (for which I also can’t find the source and am paraphrasing) that kids these days don’t have access to what composers used to have access to. They don’t have a symphony behind them. So they use computers and samples to create a symphony of sounds they can use to compose with. They don’t consider their samples sources, just sounds. Prefuse himself is known as one of first artist of the “glitch hop” or “clip hop” in the early 2000s (terms I know he hates), in which samples are cut so short and so numerous that they are not easily referenced.

“Point To B” from Prefuse 73′s first album Vocal Studies + Uprock Narratives, 2001.

Publishers are as likely to be Generation Y bloggers than Generation X journalism school graduates these days. The former frequently take content from other sources without credit. Even on some of the most popular blogs on the internet, direct quotes are lifted from other websites without links/credit given to that original source. It happened to someone I know recently, on a very high profile blog. It doesn’t help that with the speed of the internet once a story is on one blog, in another ten minutes it will be on a hundred. After that ten minutes, try figuring out which is the original. It’s as if sources are so obscured to Generation Y that they have become irrelevant.

We’ve already seen the effects of this on copyright law. Lawsuits from big corporations are being filed onto in many cases teenagers. We’ve seen it with academics. Schools are banning Wikipedia or the internet in general as sources for term papers. We’ve also seen it with websites. Facebook has been accused of stealing features (and in some cases, code) from other social networks and gotten sued sued. Check-ins and group buying features are popping up everywhere from the original innovators of Foursquare, Gowalla, and Groupon, and the copiers are not even getting sued at all for it (and in Groupon’s case, many of them have been by bought by Groupon). But what about other effects? Will Google’s algorithm cease to be able to deliver relevant results without a tradition of academic sourcing guiding links on the internet? How will the behavior of publishers, musicians, artists, and businesses change now that they have no guarantee of receiving credit for their work?

How can companies innovate in a world where that innovation will be copy/pasted minutes later? How can publishers? How can search engines keep track? I certainly don’t have all of the answers, but companies seem to have the option to embrace not only public feedback on products, but also public work on products, either through API’s or open sourcing of code for website developers, to contests promoting improvements on products or brand new product ideas. An example of this is open source and collaborative work. People are working together on larger projects where there is no credit being given or no financial/artistic merit to be had. Just look at Wikipedia or Mozilla or content management systems like Joomla! or Drupal. Companies can embrace that (Netflix did with their recommendation system, though they did offer a reward. Guess what? A copier of someone else’s idea won.) For publishers and search engines, the proposition is a bit more of a conundrum. Spot.us is a new spin on the publishing model that may work in this environment, but the jury is still out. How will your job change in a world without credit? Are you or your company ready for that change?

Now, I’ll leave you with two examples of music sampling and rip-offs. First, a rip-off.

“Two Months Off” from Underworld’s album A Hundred Days Off, 2002.

“Days Of Our Lives” from Restless People’s self-titled album, 2010. Notice any similarity?

Now, an example of the complicated sample trail. Let’s source the sample(s) from the 1990s hit “Woo Hah!! Got You All In Check” by Busta Rhymes to see how hard this is:

Busta Rhymes “Woo Hah!! Got You All In Check” from the album The Coming, 1996.

Instrumental sample for “Woo Hah!! Got You All In Check” is actually from Galt MacDermot’s “Space” from the album Woman Is Sweeter,1969.

Vocal reference for “Woo Hah!! Got You All In Check” is actually from Sugar Hill Gang’s “8th Wonder” (2:21) from the album 8th Wonder, 1982.

Instrumental sample for “8th Wonder” is actually from 7th Wonder’s “Daisy Lady” from the album Climbing Higher, 1979 (notice the reference in Sugar Hill Gang’s song title as well).