Archive for November, 2007

Web 2.0 Needs To Be About the Benefits

Wednesday, November 28th, 2007

I’ve written several articles about the problems that web 2.0 is facing if it is looking to break into the mainstream. A small number of companies, most notably Facebook, are doing a good job of ushering in these technologies without scaring regular folk with complicated terminology.

So what’s the next step?

Let’s talk benefits, not technologies. Once the benefits are apparent, the ‘intimidation factor’ of web 2.0 terms will be eliminated. Subsequently, non-savvy users will be more likely to adopt the technologies and take advantage of their potential.

In other words, tell me how I can:

  • Make cheaper phone calls. Don’t tell me about VOIP.
  • Create my own personalized channel of content. Don’t tell me about RSS.
  • Collaborate on projects or documents with colleagues. Don’t tell me about wikis.
  • Add functionality to my blog or website without any technical knowledge. Don’t tell me about widgets.

Like I say, people will eventually acknowledge the terms, but for now, the benefits are what need to come to the forefront. Once this can be accomplished, useful web 2.0 sites can climb into the spotlight and showcase their value.

An interesting point to note is that a large number of Internet users are already taking advantages of these web 2.0 technologies and they don’t even know it.

What Web Statistics Do You Measure?

Tuesday, November 27th, 2007

Web StatsNearly all website owners monitor their statistics and traffic levels. This is essential to gauge the success and growth of a website. From a business perspective, it is necessary for calculating the ROI of a given marketing initiative. From a personal level, it is encouraging and motivating to watch traffic climb over time. The gratification from hours of hard work speaks for itself in numbers.

Every type of website measures (or should be measuring) different statistics depending on the nature of the site. A blog and an e-commerce site, for example, should not be tracking the same numbers. The former is probably focused around RSS subscribers and page views, while the latter is focused around conversions and sales.

From a personal standpoint, I am mostly focused on RSS subscribers and unique visitors for Mapping The Web. I’m not so focused on page views, as I choose to display entire posts. This eliminates visitors from having to read a snippet, then click to read the rest. Also, I always make a note of checking inbound links and traffic, as well as search traffic. These important sources let me know where my visitors are coming from.

Having said all that though, I still think that a majority of website owners are focused on 1) page views, and 2) unique visitors.

Sites that rely heavily on AJAX technology and “on-page” interaction are an interesting case. Take Google Maps, for example. If you are simply measuring page views, you might only record one per visitor. However, the length of time that that visitor spends on a given page is likely to be significantly higher than on most sites – say, 3-5 minutes. For this reason, a site like Google Maps might want to measure average stay (in minutes) or some other ‘attention’ statistic.

Websites that engage in offline marketing tactics and campaigns should be looking at geographic data. In other words, what city and/or country are visitors coming from? Is there any correlation with the offline strategy? There should be. If not, a re-evaluation of the campaign is necessary.

Keep in mind that statistics can be deceiving at times. Some sites boast higher numbers than actual, in an attempt to appear larger than reality. Furthermore, the misuse of terms can skew perception as well. During the 90’s, the term “hit” was used universally as a substitute for what we now know as a “page view”. The problem was that a “hit” described (by definition) the loading of any file, whether it be an HTML page, an image, or a video. In other words, if you had an HTML page that contained 100 images, one page view might also be classified as 101 hits. What a sham. Companies used this common misunderstanding to boost numbers and create false impressions. Eventually the term was dropped after Internet users discovered the truth. Nevertheless, people still use the term today – once again, usually describing a page view.

More recently, problems (and even anger) have arisen around RSS subscribership. FeedBurner is the big gun in this area, and most big blogs choose to display the company widget. Critics are arguing that given tallies are inaccurate at best and do not accurately reflect the readership of a blog. This many be true to some extent, but it does give you a general idea of the overall popularity of a given blog.

If you are looking to implement a web statistic or analytic service on your website or blog, I would highly recommend Clicky or Google Analytics. Both are free services and offer an incredible array of features. Clicky is my personal favourite, but I’ve used Google Analytics on the occasion and it’s been great too.

So… what statistics do you measure and why?

Advertising Isn’t a Revenue Model

Monday, November 26th, 2007

I know it’s a bold statement that isn’t entirely true, but let me explain. Obviously, a large number of successful companies can call advertising their revenue model, but this is only after siginificant traffic growth. The number of new start-ups that launch with an advertising model in mind, compared with the number that can actually sustain such a model is minimal. I would consider it a generous estimate to say 1% or so can do it.

Let’s do a little math experiment (using some basic assumptions)…

Company XYZ has 3 full-time employees. Let’s also say that they have no other expenses as they run out of a makeshift basement office. Assuming an extremely modest salary of $50,000 a year each, the company needs to generate revenues of $150,000 a year just to break even. Keep in mind that we are assuming no other expenses exist, even though hosting, bandwidth, and other factors should (in theory) play into the equation.

So, in order to break even, the company needs to generate $150,000, or $12,500 a month, or $417 a day. That doesn’t seem too unrealistic. Now, let’s assume that the website can achieve a $5 CPM, which is relatively good for a small company. The company would need to generate 83,000 page views per day just to break even. This is where many begin to realize that monetizing via advertising is much harder than it seems. From a monthly perspective, that’s 2.5 million page views per month. That’s a significant number. Once again, keep in mind that this is assuming no other expenses and doesn’t include a lifestyle of luxury.

[Please feel free to rip apart my math, point out any inaccuracies, or add any relevant commentary.]

On the whole, what I’m trying to say is that an advertising model is possible to sustain, but it’s rare. Other forms of monetization are much more effective and attainable. With such high levels of competition in every area of the Internet, your ability to capitalize on ads has been greatly diminished. 

As we all know though, many of these companies never intended on monetizing via advertising like they say. Their sole intention was to build traffic and sell off to a major player (Google, Yahoo, Microsoft). This is the typical web 2.0 revenue model. This “hope for the best” strategy is risky, but has paid dividends for a small minority. I wouldn’t recommend it though.

4 Rules for Choosing a Domain

Friday, November 23rd, 2007

At some point in time, many of us are forced to choose a domain for a specific need – whether it be for an online company, a blog, or a web application. Some domains are clever and remarkable, while others languish. I’ve chosen several domains over the years and I’ve come to some important conclusions. Here is a list of the 4 rules I abide by (and advise others to abide by) when choosing a domain name:

1. Must be a .com – Forget what everyone says about .net or .tv or whatever. If you are truly looking to make an impact on the web, a .com is a must. Exceptions can be made for non-profits (a .org is a better choice) and for localized companies/services, where a country specific domain may be chosen.

2. Must be relatively short – I understand that 5 and 6 letter domains are hard to come by nowadays, but that’s not what I’m talking about. As a rule of thumb, I wouldn’t choose a domain longer than 15 letters or so. It may be hard for others to remember. You must also keep in mind that the longer the URL, the more likely it may be misspelled. In other words, if your URL is http://www.firefightersassociationofnorthamerica.com/, you may want to rethink your choice.

3. Must NOT contain dashes – Simply put, dashes are no-no in the world of top-level domains. Unless you’re creating mindless SEO-tailored landing pages, domains containing dashes should be nixed. In all likelihood, you will be driving traffic to the domain without the dashes. Moreover, I find that they take away from the professionalism of the site and/or service.

4. Must be memorable – Generic domain names are not only boring, but also dangerous. Their brand recognition is minimal and customer loyalty isn’t likely to be as strong. Generating a more remarkable, memorable domain name that can be branded is key. The loss in SEO juice will be more than compensated by an increase in brand equity and perception. After all, who’s going to remember a site called http://www.menstailoredsuits.com/? Not me… would you?

I hope this facilitates your quest for the ultimate domain name. If your choice fits all 4 criteria listed above, congratulations.

How do you choose a domain? What criteria do you use when searching for the perfect name?

SmartHippo: A Better Way To Do Mortgages

Thursday, November 22nd, 2007

SmartHippo logoHistorically, if you’re looking for a mortgage, you head to your local bank to get the best available rate. Next you may visit several other competitor banks to find out their rates. Some people even make use of a mortgage broker. In any case, the purchase of a home is usually the single biggest purchase in a given individual’s life. For that very reason, the research and due diligence leading up to the decision cannot be taken mildly. In many cases, people don’t put enough time and effort toward the cause and end up with an inflated rate that puts a severe damper on their finances for years to come.

SmartHippo wants to change the way we think about and deal with mortgages. The goal of the company is to bring transparency to the financial services industry by providing an unbiased look at mortgage rates. How so? Essentially, the site is powered by users. These individuals post rates depending on their profile and geographic location. Banks and mortgage companies can also post rates (SmartHippo becomes a marketing outlet for them). When a user wants to ‘compare rates’, a snapshot of current conditions is generated based on the user’s geography, credit score, equity, etc…

So how does one know if a rate is accurate? Rates receive votes and comments by the community, akin to Digg submissions. Assuming a community-controlled system works, the bad rates will be weeded out and the good rates will rise to the top.

Users can also ‘get a quote’. This is different from comparing rates. In this case, a user enters their criteria and contact information, and instantly gets matched with up to four lenders who will contact them with a personalized offer. Strict security and privacy policies are present site-wide. This allows users to remain anonymous at all times if preferred.

Because the site is geographically-sensitive, users can discuss their experiences with other local mortgage hunters. A forum provides a great place for vent or recommend a given financial service company.

I had the pleasure of chatting briefly with the CEO, upon which I had one issue in particular. It went something along the lines of this: for the most part, people only buy one house during their lifetime. Assuming they use SmartHippo to capitalize on rates and the purchase has been completed, why would they want to come back to the site? In other words, SmartHippo no longer serves a purpose to that individual. “Not so fast…”, he tells me. The company is planning to diversify in other financial services areas, including insurance, stocks, mutual funds, etc… This helped answer my question concerning repeat visitors and site “stickiness”.

Interestingly, the service is free to use. If I’m not mistaken, revenues will be generated via targeted advertising. In addition, SmartHippo is only available to US consumers at this point in time. Ironically, the company is based out of Montreal. Plans have been made to enter the Canadian market in the near future, although the US provides a much larger base at the present time.

I think SmartHippo is a great idea that merits further scrutiny. I look forward to a time when it available in the Canadian market and I can make use of the service. The concept and basis are very new and fresh. It will be interesting to follow adoption and acceptance of the service as the industry progresses from a traditional model to a more current, innovative one.