VoiceAmerica Interview

This week I had the opportunity to do a radio interview with Stephan Jacob of the VoiceAmerica Talk Radio network. It was great to introduce Stephan’s listeners (many of them entrepreneurs) to Liquidation.com, and to offer tips for how to build an online business. In the hour-long format we had the chance to cover a range of topics, including social media, analytics, and how to successfully source product online.

Check out the interview here and let me know your thoughts.

Book Review – “The Long Tail”

Long Tail Book CoverAlthough I’ve been peppering my conversations with the phrase “the long tail” for nearly two years, only recently did I get the opportunity to actually read the book that spawned the term. On a recent vacation to Sanibel Island (when I tend to do most of my “pleasure” reading), I devoured Chris Anderson’s book in about a day-and-a-half… record time by my modest standards, and with good reason. “The Long Tail: Why the Future of Business is Selling Less of More” is a truly phenomenal book that should be required reading not just for people who make their living in fields related to the Internet, but for anyone who wants to understand the cultural and economic forces that are shaping every aspect of our lives today.

The basic premise behind “the long tail” is that, in certain industries, the ability to marginalize manufacturing, distribution and storage/warehousing costs makes it possible to generate significant revenue by selling small volumes of many products. Collectively, sales of these less-popular products can rival the sales for the handful of popular products that typically sell in high quantity. This phenomenon is depicted in the graphic below, with the red area representing the “popular” products and the yellow area representing the long tail, so named because it stretches almost infinitely to the right.

Long Tail Graph

Anderson provides many examples of products and industries that follow this distribution, but the music industry is perhaps the easiest to understand through this lens. Historically, the music industry has been “hit-centric,” with most of its money made by selling large quantities of songs and albums from a handful of artists, and largely ignoring everyone else. This hit-centric approach has shaped everything from which acts to sign, to which format a radio station should follow, to which titles make it into stores. As evidence of this phenomenon, according to Anderson the average Wal-Mart carries 4,500 unique CD titles, representing less than one half of one percent of all titles available. Among the main reasons for this are the high costs associated with shelf space, and the need to rapidly turn over inventory.

In contrast, Apple’s iTunes – because all of the songs are digital and require no physical storage space or distribution channels – can offer a near-infinite selection of titles, thus capitalizing on a segment of the market that was heretofore ignored or deemed too expensive to pursue. Apple is thus capitalizing on the long tail whereas its brick-and-mortar competitors cannot. Similar shifts are happening in other media as well, including movies, books, and television.

Although I had never thought about iTunes through the prism of the long tail analogy, I have referred to the long tail often as it applies to Google and eBay. For the former, the long tail (from an advertiser’s perspective) represents that vast number of ultra-specific paid search terms that typically garner little traffic, but that tend to be very high converters when clicked upon. The latter (or any auction marketplace), provides the ultimate case study for the impact of the long-tail, as it brings together buyers and sellers of unique and obscure items in a way that would not be possible or practical in the physical world. Neither would be possible without the removal of traditional economic barriers afforded by the Internet and its associated technologies.

While the economic theory posited by the book is fairly heady stuff, Anderson succeeds by providing countless real-world examples that help bring the point home for the layperson. In so doing, he connects the dots for a number of trends and developments that are usually discussed in isolation, such as the growth of TiVo and other time-shifting technologies, the rise of user-generated content, the death of FM/terrestrial radio, and the growth of social networking sites like Facebook and Myspace. In this regard, “The Long Tail” is akin to a capstone course in college, providing a common thread that weaves together multiple theories and views detailed in other works, including:

While I loved the book, I have a few, minor nitpicks. First, Anderson never mentions YouTube, and seems to almost go out of his way avoiding the mention of the site when describing the viral explosion of the “Lazy Sunday” video a few years ago. YouTube has had a profound impact on a number of the topics that Anderson discusses, so its omission is curious. Second, he describes Myspace as a networking site for bands and their fans when, in fact, the site is popular with a much broader audience. Admittedly, this misclassification may owe more to the fact that the book was published in 2006 before Myspace truly exploded. Finally, I think the book suffers by not specifically incorporating the equally-impressive work of John Battelle’s book “The Search,” which describes how Google – and search in general – has transformed our society. Battelle advances the notion that the cumulative search logs that Google controls comprise a “database of intentions” representing our societal values, attitudes and mores. It would have been nice for Anderson to examine the implications of this database of intentions for various long tail businesses and industries.

That said, the book is fantastic, and a must read for anyone.

Technorati Tags , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

The Ultimate Positioning Machine: Leveraging the BMW Brand to Sell the Pontiac G8

While watching the Kansas-North Carolina game last night (what a game, by the way), I saw an interesting ad for the Pontiac G8 that positions the car in a most unexpected fashion. Here’s the ad if you haven’t seen it:


At first blush, it seems odd that Pontiac would compare the G8 to any BMW model, much less a 5 Series. The G8 has a price tag that starts below $30,000, while the BMW 5 Series is closer to the $60,000 range (as much as $80,000 nicely equipped). From the outset, the commercial acknowledges that this is an odd comparison, yet goes on to explain that the G8 beats the BMW 550i in speed, power, legroom, shoulder room, and overall passenger room.

So why this approach? The BMW brand represents status and prestige, while the Pontiac brand represents — what exactly? It would seem unlikely that there is a large base of consumers who are deciding between the G8 and the BMW 5 Series for their new car purchase, so why sell so hard against a car that is likely out of reach for most of Pontiac’s target customers?

The answer has to do with Pontiac’s ability to leverage the aspirational nature of the BMW brand to position its own product. The typical approach would be for Pontiac to compare the G8 to other cars in its own category (sedans below $30,000), such as the Chrysler Sebring, the Mercury Sable, the Buick LaCrosse, or the Saturn Aura. Unfortunately, by and large each of these models stands for — nothing. Thus, making performance comparisons between the G8 and any of these models is like making taste comparisons between French’s yellow mustard and Heinz yellow mustard. Ultimately, the products and brands are not differentiated enough for the comparison to be meaningful to the consumer.

So, rather than attempting to make such comparisons, Pontiac instead chose to point out that the G8 compares very favorably to a much pricier, more luxurious car. By referencing the BMW 5 Series, Pontiac provides consumers with context that allows them to understand where the G8 fits into their preexisting schema of car models. In so doing, they are able to reinforce the value proposition of the G8 – specifically, that you get the spaciousness and power of a luxury car at a fraction of the price. In essence, Pontiac is positioning the G8 as the “BMW of moderately priced sedans,” hoping that this message will resonate not (necessarily) with luxury car buyers, but rather with those consumers who might otherwise choose a Sebring.

Although I find the quick-cut nature of the creative a bit incongruous with the goal of conveying moderately-priced luxury, I applaud Pontiac for taking a unique approach. The lesson here for marketing and advertising professionals in all industries is to look beyond their standard frames of reference when attempting to make their brands and products memorable and meaningful for consumers.

Technorati Tags , , , , , , , , , , , ,


I recently came across a very clever website that pokes fun at the fundamental rift between the “creative” and “sales/marketing” groups within an organization. As folks from either group can attest, the process of creating mutually agreeable marketing collateral, be it a one-sheet tradeshow flyer or a 30-second television spot, can often seem more difficult than negotiating peace in the Middle East. Accordingly, the final product is often riddled with design compromises that make it weaker than if it were designed by either group independently.

This video takes a humorous look at this struggle from the designer’s perspective. I must admit, I’ve been guilty of a few of these infractions, and must also confess an odd fondness for the starburst. I found the video on YouTube, but you owe it to yourself to check out the entire website at http://www.makemylogobiggercream.com.


Technorati Tags , , ,

Waiting for gBay


In what has become an anticipated and beloved annual rite, on February 2nd of each year thousands of people descend on a small Pennsylvania town to see Punxsutawney Phil. According to local lore, the presence or absence of the renowned rodent’s shadow on that day can predict the weather in the ensuing six weeks.

Far less beloved yet equally anticipated is the announcement of eBay’s annual fee changes for sellers, which in recent years has been made at approximately the same time that Phil is making his trek from Gobbler’s Knob to Punxsutawney. This year was no exception, and, as has become tradition, the seller backlash was both severe and vocal.

This year’s changes saw auction insertion fees drop by 16-25% depending upon the starting price of the listing. What has sellers outraged, however, is the corresponding increase in the final value fees (FVF) that eBay collects on closed auctions. On the low end (items selling for between $.01 and $25), the percentage increased from 5.25% to 8.75%, a relative increase of nearly 67%. For items closing between $25 and $1,000, the FVF is 8.75% for the first $25, and increases from 3.25% to 3.5% on the remaining balance. (For the record, sellers are also outraged by eBay’s changes to its feedback policy – which now prevents sellers from leaving negative feedback for buyers – but I’ll save that for another discussion).

To understand how these changes affect sellers, I’ve put together the following table that shows the fees incurred in the old and new pricing structures assuming that an item opens at $.99 and sells for $40:

In this example, eBay fees on a $40 auction increased by $.86. While this may not seem like a lot to the eBayer who occasionally lists items that she finds in her basement, that $.86 actually represents a relative fee increase of 44%! For professional eBay sellers – many of whom operate in high volume, low margin categories like CDs and books – this increase might as well be a death knell for their businesses.

In response, many professional eBay sellers banded together last week to boycott eBay. Whereas coverage of previous such efforts was mainly limited to industry pubs like AuctionBytes, this year’s boycott garnered lots of national attention in the consumer publications and on many of the morning talk shows. And, while outlets like USA Today reported that the boycott caused a 13% drop in eBay’s listing count, eBay denies that the effort had any impact at all. In separate quotes attributed to both eBay’s Jose Malabo and eBay’s Jim Griffith, both men said that the boycott “hasn’t had any impact on our listings.”

These statements – and the fee increase itself – smack of both arrogance and myopia on the part of eBay. For years, eBay has held a monopoly in the online auction space… and knows it. Accordingly, in the past when the business hasn’t scaled as quickly as desired, or when a disastrous acquisition (see Skype) started to drain the coffers, fee increases have always been a convenient safety valve to make the revenue picture rosier. “Sure, sellers might get mad,” goes the thinking, “But who cares? They’ve got nowhere else to go.”

Unfortunately, this thinking is right on the mark. Most eBay sellers don’t have a lot of other venues that offer the same options and upside as eBay. For all its warts, eBay offers sellers immediate and reasonably cheap access to millions of buyers around the world, providing a market for mass-produced and long tail items alike. This can’t be said of the two venues most frequently cited as eBay alternatives – Amazon.com and a standalone website.

In the case of Amazon, there is no true auction platform, which makes it harder to find a market for some of the niche products sold by eBay Powersellers. Additionally, seller listings on Amazon appear alongside merchandise from Amazon.com itself, so these merchants are at a significant disadvantage from the get go. (Ina Steiner had a really interesting interview recently with Amazon’s director of business solutions Matt Williams — check it out here.)

As for moving off eBay and creating a standalone website, most large eBay sellers have already done this. In fact, ask the biggest eBay sellers and they’ll tell you that, given the small (sometimes negative) margins they realize on eBay, they view the platform as little more than a lead generation tool. Once they acquire a new customer via eBay, these sellers hope to recoup their initial loss by migrating customers’ future purchases directly to their websites. This is a tough road to hoe, and can take a while to pay off.

The other problem with the standalone website approach is that there is no “built-in” traffic like they get with eBay. To get eyeballs to their websites, these sellers must pay for traffic through sources like Google and Yahoo (or do a real bang-up job with search optimization). When factoring these traffic-driving costs, along with site maintenance costs, the margins these sellers realize may actually end up worse than on eBay, and with far less scalability potential.

For these reasons, the threat of an eBay boycott today is met with a collective yawn by the folks in San Jose. Not until a viable alternative surfaces will eBay have any reason to worry.

So what company can offer such an alternative? Just as the answer for almost any question asked of a child by a Sunday school teacher is “Jesus,” the answer to this, as most, questions about e-commerce is “Google.”

Google already has all of the pieces to mount a serious challenge to eBay’s dominance. With Adwords, Google basically owns the paid search space, and can drive as much traffic as it needs. Google Product Search offers a top-notch comparison search platform that can be leveraged. Google Base offers an open method for sellers to upload large quantities of data (like product feeds). With Google Checkout (a Paypal competitor), Google not only earns a percentage of each sale, but also has visibility into the payment stream, potentially allowing them to offer advertisers a virtually foolproof CPA advertising system. The only thing currently lacking is an auction engine, which I don’t believe will stump the eggheads at Google Labs.

Waiting for Godot

I am hardly the first observer to point this out, which begs the question, “What is Google waiting for?” I must admit that I don’t have the answer. With Meg Whitman’s departure, middling financials, and sellers in an uproar, the time seems to be right for Google to make a strong play for the disenfranchised Powerseller. Yet, so far, Google has been mum.

Stay posted… I think this is about to get interesting.

Technorati Tags , , , , , , , , , , , , , , , ,

Reports of My Death Have Been Greatly Exaggerated

You still there?

It’s more than a little ironic that, following a post about the need to achieve a good work-life balance, I’ve gone almost three months in between posts to bloggerwocky. For what it’s worth, my home and work lives have been great in the nearly 90 days since I last posted. I simply haven’t been able to find the time to keep up the blog, unfortunately.

I hope to change that in the coming months, and am starting with a post about the seller fallout from eBay’s recent fee hike. Please let me know what you think about eBay’s recent moves, and what you’d like to see me cover in this space in future posts.

A Cautionary Tale About Work-Life (Im)Balance

Earlier this month I was checking out ComparisonEngines.com, the informative and in-the-know blog authored by Brian Smith. Over the last few years I’ve gotten to know Brian pretty well, and have found him to be one of the more astute commentators about not just the comparison engines space, but the larger e-commerce ecosystem as well. I highly recommend that you bookmark his blog.

Ironically, what I found most interesting on Brian’s blog in this case contained none of his trademark commentary. Instead, he had just a link (and the word “Wow”) to a recent Fortune Magazine story entitled “Confessions of a CEO” that, in looking at the struggle to reach a satisfactory work/life balance, basically speaks for itself. Yet, since my writing lacks the elegance of Brian’s brevity, I thought I’d spend a few paragraphs offering my take on this story.

I’ll briefly summarize the article, but you really owe it to yourself to read it in its entirety. The story details the life of Dominic Orr, a Silicon Valley superstar who meteorically rose through the ranks at Hewlett Packard before becoming the CEO of Alteon WebSystems, a data networking company. Logging 18-20 hour days, Orr ultimately sold the company for $8 billion. Yet, along the way, he managed to alienate his wife and two children, a fact that was dramatically underscored when his then 15-year-old son, Alvin, systematically destroyed Orr’s Infiniti J30 as both a cry for help and a desperate attempt to get his father’s attention.

Were this a movie, the demolition of Orr’s car would have been the wakeup call, after which he would make a radical life change and set to fixing all that was wrong. Orr’s is no Disney story, however. Although it got Orr’s attention, Alvin’s outburst didn’t immediately change anything. Rather, only after a divorce and nearly ten years seeing a therapist is Orr any closer to his goal of dying “a complete man.”

Orr’s story should serve as a cautionary tale for us all. At a time when technology – laptops, cell phones, Blackberries – enables us to be constantly connected to the office from virtually anywhere, the separation between work life and home life has become increasingly blurred. For many of us, this blurring manifests itself in the form of furtive glances at the Blackberry while at the school play, soccer games interrupted by cell phone calls and similar attempts to serve two masters. In Orr’s case it was far more extreme, as he effectively sacrificed his family in the pursuit of success at work.

So where did Orr go wrong? While he made many mistakes, his biggest was measuring his success one dimensionally. Considering that most of us spend more than half of our waking hours at work, this is an easy mistake to commit. In attempting to quantify our success, we usually look at how we measure up to others around us – Who earns the most money? Who has the corner office? Who wields the most power? In so doing, we will almost never find that we are the best. Someone will always work harder, longer, or better than you.

Yet, how you measure up at work is only one part of the equation. It is of at least equal importance (and more in most cases) to achieve success outside of work. This includes your success in everything from personal relationships to health and fitness to hobbies and interests. To excel in any one aspect of your life at the expense of the others is usually to your detriment when measuring success in the aggregate. True success is only attained when all aspects of your life work together in concert.

So how do you achieve such balance? By keeping the proper perspective, and by making smart sacrifices. While I may never become the CEO of General Motors or an Olympic runner, I can carve out a nice career for myself, run a couple times a week, and enjoy a great family life. Could I be more successful in my career if I stayed at work longer rather than coaching my daughter’s basketball team? Perhaps, but the extra money and prestige I could earn pales in comparison to the joy of seeing an eight-year old score her first basket.

Each of us engages in a similar internal negotiation, trying to weigh what is and is not important in the greater scheme of life. If any good comes out of Orr’s experience, it is the reminder that the price of ill-formed decisions is often paid many years later. To avoid paying so dearly, we must continually re-evaluate the choices we make along with the yardstick we use to measure our success.

Technorati Tags , , , , ,

Happy First Anniversary, bloggerwocky!

You may have noticed that the frequency of my posts has diminished somewhat lately. I started a new job in late October, which seems to have cut into my time. Funny how that happens…

Regardless, there’s a lot going on right now in the marketing, advertising and media industries, and a lot to talk about. I expect to be posting more more frequently in the weeks and months ahead.

On a related note, I just realized that, on November 11, this blog celebrated its one-year anniversary. It’s been a fantastic year personally and professionally, and this blog has given me a great opportunity to share my views during a very exciting time in the industry.

I want to thank everyone who’s taken the time to read and comment here. If you like what you’ve found on this blog, tell a friend, bookmark it, sign up for the RSS feed, digg it, add it to del.icio.us. or anything else you can to help get the word out.

Here’s to a great second year!

Putting Your Money Where Your Mouth Is (Lifelock TV Ad)

One of the best ways to strengthen your value proposition for potential consumers is through testimonials. When faced with a choice, many people look to the experiences of others to help inform their decisions.

Usually, the best testimonials are provided by people who are seen as impartial. We put our greatest trust in those people who we believe are providing an honest opinion without compensation or other consideration. For this reason, CEOs and other corporate figureheads are usually lousy choices to make product claims in marketing and advertising efforts. We simply don’t expect them to be objective, and thus can’t truly believe everything they say.

There are occasional exceptions to this rule, however. I recently watched a somewhat remarkable ad for Lifelock, an identity theft prevention service that offers what I would consider the ultimate testimonial. In the commercial, Lifelock’s CEO, Todd Davis, shows his confidence in the product by giving out his real social security number (457-55-5462) to countless passers-by in a downtown metropolitan setting and daring identity thieves to try to use it to their advantage. He goes a step further by painting his social security number on the side of a truck that drives through the streets of the city announcing his SSN over a PA system. A visit to the Lifelock website reveals a continuation of this theme, with Davis’ testimonial appearing prominently on the homepage as well as on several additional pages of the site.


Although I think the problem of identity theft has been significantly overstated in the media, I do find this commercial extremely impressive. If you assume that the average consumer does have some trepidation over the possibility of identity theft, Davis’ bold example leaves no doubt in consumers’ minds about whether the Lifelock service works. By putting his money where his mouth is, Davis earns immediate credibility.

Let me hear from you… What other examples can you think of in which corporate spokespeople offer compelling, trusted testimonials in their companies’ ads?

Technorati Tags , , , , ,

“Mad Men” on AMC — The Best TV Show You’re Probably Not Watching

Mad Men Header

Although you’ll hear more buzz around shows like the Grey’s Anatomy spinoff “Private Practice” (ugh) and “Cavemen” (double ugh), “Mad Men” on AMC is the best television show you’re not watching right now.

Set in New York in 1960, “Mad Men” focuses on the fictional Sterling Cooper Advertising Agency and the imperfect group of men and women who work there. Created by Matthew Weiner – executive producer and writer of The Sopranos – the series brings to life a time when ad men wielded virtually unchecked power as they set the agenda for the wants and needs of Americans. In the process, “Mad Men” shines a light on gender roles, sexual mores, race and social issues of the time.

Don Draper
(Jon Hamm)
Pete Campbell
(Vincent Kartheiser)
Peggy Olson
(Elisabeth Moss)

A cast of well-written, deep characters makes the show extremely compelling. The show’s protagonist is Don Draper (Jon Hamm), a deeply-flawed yet brilliant creative director who churns out winning copy as often as he lights a new cigarette (which is to say, very often). Outrunning a shameful past, Draper has reinvented himself as a hard-charging advertising executive, going so far as to change his name and disown his family to start anew. Yet, even his new persona is not what it seems, as he leads a double-life as a womanizing, urban businessman during the week, and the patriarch of an idyllic suburban family on the weekends. Nearly as compelling as Draper is the character of Pete Campbell (Vincent Kartheiser), a spoiled rich kid account executive whose immaturity, insecurity and bad judgment often overshadow his sound advertising instincts. Draper’s bright but starry-eyed secretary Peggy Olson (Elisabeth Moss) also serves as a head-shaking reminder of just how far women have come in the workplace in the last 50 years.

From a marketing and advertising perspective, “Mad Men” incorporates many references to classic campaigns, including Volkswagen, Lucky Strike and the political campaigns of Nixon and Kennedy. Ironically, the producers of “Mad Men” have had difficulty incorporating product placements into the show, as its often risqué content has scared away many advertisers. As I write this post, AMC is looking to find a sole title sponsor for the season’s final episode.

My first reaction when learning of this series was, “AMC has original programming?” (truthfully, I needed help finding AMC on my cable system). However, give the show a chance and you’ll find yourself addicted quickly as well — regardless of how you feel about marketing and advertising.

Hint: If you like instant gratification, you can find all of the back episodes of “Mad Men” on your cable or satellite system’s on-demand programming menu. I was able to get caught up on the entire first season within just a few days.

Technorati Tags , , , , , , , , , , , , ,