PardonMyFrench

Politico, Compete Study Rains on Social Networking Parade

Political news site The Politico just published a study it completed with Compete.com which looked at web surfing behaviors of people who visited the current crop of Presidential contenders' websites.  While some of you readers might be saying to yourself, oh great another political marketing post that I'll just ignore, I think you should spend a little more time studying the article and the results.  If a political marketers has challenges with social networking, then perhaps maybe you should rethink your strategy too.  The article called Campaign seek measure of internet success has some great quotes in it and a link to a table to run some of your own comparisons.  Here are some highlights from the article...

• Some of the more newsworthy efforts have focused on campaign-created MySpace, Facebook, Meetup and YouTube pages — and so far, the payoff has been difficult to measure.
• But the results reveal interesting online habits among the politically attuned. A significant number get their news from mainstream media versus political blogs. YouTube, meanwhile, is one of the most reliable ways for candidates to communicate directly to voters. But the candidates’ official Meetup, Facebook and MySpace pages appear less effective at that.
• Half of those tracked by Compete visited MySpace in September, and 54 percent visited YouTube. Nearly two-thirds went to Wikipedia, a quarter logged on to Facebook and 7 percent visited Meetup.
• Meetup, the darling of the 2004 election cycle, barely registers with any candidate other than Internet phenom Rep. Ron Paul (R-Texas)
• Two percent checked out the candidates’ MySpace pages, and 1 percent hit his or her Facebook page.
• YouTube is in a different league, with 16 percent of its readers visiting candidate-specific pages
• The political readers captured by Compete were much more likely to get their news from a mainstream source than from political blogs. Forty-eight percent went to CNN, followed by Yahoo News, The New York Times, The Washington Post, Fox News, USA Today and, to a lesser extent, Politico.

So are these social networks all hype?  Well for politics I think they are over hyped, but they do serve useful purposes in connecting people.  While for advertisers, they provide a cheap and often free way of advertising.  Plus, the word of mouth potential of course is always there.

However (and that's a big however), as an acquisition vehicle I don't think the majority of advertisers have quite figured out how to use them.  Sure for every Ron Paul advertiser there are thousands of other advertisers that don't have the right message or product to move the social networking needle. 

This study clearly shows for the majority of political advertisers that they should put the spending back towards more traditional internet mediums.  Besides that I think advertisers should really think of social networks as a CRM vehicle (yes I wrote that).  That's really where your strategy should be moving towards and less of an acquisition vehicle.

PardonMyFrench,

Eric

Financial Services Marketing 101

Let's say you are a brand new website that is blogging in the financial services industry.  You enter an already crowded field with goals of changing the way the industry disseminates information to the average investor.  Of course you have plans of gaining huge market share of the financial services industry's online media business because you've seen the list of top advertising and guess what, financial services makes up a large % of the top buyers.  On the day you launch with much fanfare, you announce on your site that you've generated 40K uniques which looks like a good number, but is it really?

40K Unique Impressions for a Blog

If I had 40,000 unique impressions on my blog, I'd be the happiest person around because 40K for a blog is really a big number.  At 40K a day, assuming a .1% CTR and a CPC of $5, I'd generate $200 per day in advertising revenue or $6,000 per month.  Not bad numbers but enough room to grow and perhaps I'd quit my multiple jobs and boost the traffic and revenue (not really because I like my political advertising career as well as working with my financial services clients).  Of course, the numbers used above are generous, especially 30 days in a month for forecasting.  As anyone who markets in the financial category knows, the traffic and activity on the weekends goes to almost zero.  So, if you had a blog with 40K per day, that would be an impressive number.

40K Unique Impressions for a Financial Services Site

As someone who managed the online advertising for the 17th largest US internet advertiser (see Harrisdirect's rank for the month of September 2005 which is the last month of activity before the acquisition), 40K number is really, really low.  To even make an impact, you would need to generate at least 1 million uniques per day and then at that level, you'd be almost an after thought on a media buy.  Why is that?  A couple of reasons:

• There is huge overlap in viewers in this category with duplication rates of small sites with the big financial publishers approaching 70% and sometimes higher.  That means, you can find your audience elsewhere and probably for much lower cost.  I've personally canceled deals with publishers, because their rates were too high and their audience duplication rates were nearing 90%.
• Even though a lot of financial advertisers will buy big branding units like CBS MarketWatch's Intro. Message (coincidentally TD Ameritrade today), the bulk of their advertising is geared toward hitting strict cost per account numbers.
• If I had to be generous with advertising metrics, I'd say a 0.1% CTR with a 2% conversion rate of those clicks into new accounts.

So, using those numbers based on 40K uniques per day, you are looking at 0.8 new accounts per day or 24 per month.  Layer on top of that the $5 CPC which again is very generous and you are looking at a Cost Per Account of $250.  Neither the number of accounts or the CPA will make the cut and this assumes that there are no other advertisers rotating in.  In order to make an impact, you need to at least increase those numbers by a factor of 25 and if you wanted to rotate in multiple advertisers, that would have to be by a factor of 100.  That translates into true-believers 4 million uniques per day. 

If bloggingstocks.com wants to make an impact in this category, that's the type of numbers you would need in order to have marketers sit up and take notice.  These are generous because I didn't even investigate the true end goals of trade volume, assets under management, etc that financial advertisers are looking for in their media buys.

Differentiating bloggingstocks.com from the rest of the already crowded industry is an uphill battle.  Not only are you fighting already established publishers, you need volume to have big marketers pay any attention.  These are the realities of being a player in the financial services industry.

PardonMyFrench,

Eric

AOL Blogging Stocks - Umm Why?

I guess I've become a bit of a dinosaur after 5 years in marketing in the online brokerage space, but I don't understand the hoopla surrounding AOL's supposed big move into blogging stocks.  As written over at Business Week in AOL Launches New Network of Financial Blogs, AOL hired bloggers to write about product announcements, earnings releases, and commentary on stocks in their blog roll.  This was a big idea of new AOL employee, Jason Calacanis and Weblogs.  And over at Micro Persuasion, Steve Rubel thinks that this will cause more corporations to use blogs as a communications tool. 

Hmm, PardonMe if I don't get too excited about this because, umm it has been done already over at The Street.com/RealMoney.com, on TV with Jim Cramer's Mad Money (same guy from the Street.com), Motley Fool, and like 1000s of analysts worldwide.  Plus, if you want people commenting about stocks, you could always visit Yahoo Finance's Message Boards or Google Finance.  Repackaging news content around specific stocks sounds like it hasn't been done, but doesn't that how most financial sites including online brokerages organize the news now? The answer true-believers is YES!

There is a lot of discussion on whether they can hold the stocks or not that they blog about.  I personally stayed awake long enough while taking my Series 7 to learn that you don't EVER want to be perceived as influencing stock.  How you go about that is up to your legal and compliance team's advice.  To put it in perspective, I was politely told 5 years ago that I could have my own website and blog, but I would need to submit it for legal review prior to posting.  That way, it would be difficult to show I influenced trading; plus, I had legal and compliance approval for communicating with the customer.  In the end, I didn't want to assume the risk, so I didn't start my blog until after I left (by the way, I left as a Managing Director and one little test away from a Series 24).  The influence perception is about risk management and whether you are trusting the information you are getting. I hate to say it, but I think this is just a poor PR ploy to generate attention regarding their governance (ho-hum).

This information is already widely available on any number of sites, including my personal choice for investing, Fidelity.com.  So, having bloggers enter an already crowded field, repackaged in a pseduo Web 2.0 wrapping is really not needed and not breakthrough.  If you were really interested in true financial bloggers, then spend a little time with Motley Fool or Real Money.com.  In fact, RealMoney has original Wall Street bloggers, Jim Cramer and James "Rev Shark" De Porre. 

As one financial services advertiser once said in a TV commercial (and I believe got slapped around by the NASD for it), let's put some lipstick on this pig.  And, that's what is happening here with bloggingstocks.com.

PardonMyFrench,

Eric