Investors Not Needed, Just a Site With Ads
By Yuki Noguchi
Washington Post Staff Writer
Friday, July 28, 2006; A01
For hundreds of thousands of people, the dream of making an Internet fortune works like this: Earn pennies at a time in exchange for allowing Google Inc. or Yahoo Inc. to place advertisements on a personal or small-business Web page.
Take Andrew Leyden, former House Commerce Committee counsel and founder of a dot-com venture that failed, who started PodcastDirectory.com, a search engine for podcasts. As the site's popularity rose from a hundred hits a month in 2004 to nearly a million now, Leyden started making the equivalent of an entry-level government worker's salary -- $30,000 to $40,000 a year -- simply because people clicked on ads. That allowed him to work at home in Chesapeake Beach, Md., trying to make more money by attracting still more traffic to his site.
"I went from literally 26 cents a week or something like that to several dollars an hour," he said, by using Google's AdSense software, which solicits bids from marketers who, in turn, pay to run ads on his site. "I get paid while mowing the lawn. I get paid while cleaning the garage. I get paid driving my wife to her office, buying groceries, seeing a movie, playing video games, or just surfing the Internet. That's really the nice thing about AdSense: No matter what I'm doing, people keep clicking and I keep getting paid."
A decade ago, the Internet dream was to score through venture-capital financing and by raising cash in public stock offerings. Now, people with creative ideas can get rich relatively quickly by permitting advertisers to piggyback on any Web site that attracts a lot of viewers. Technology can direct ads to more and more specific audiences, rewarding entrepreneurship on the smallest scale -- even Web pages filled with obscure and homemade content.
"We have a segment of customers called hopeful hobbyists" who have Web sites devoted to anything they might care about, from crochet to sailing, and who hope to eventually make enough money to quit their day jobs, said Willan Johnson, vice president of Yahoo Publisher Network, which launched a test version of its software last year.
David Miles Jr. and Kato Leonard, two 20-year-olds in Louisville, say they collect $100,000 a month from their year-old site, Freeweblayouts.net, which gives away designs that people can use on MySpace social-networking pages. One couple blogged about their home reconstruction and made money to help pay the mortgage on their new house. Jock Friedly's business, Storming Media LLC, allows users to download public documents; he used the money his Web site made on ads for new online ventures.
Companies like Google, in turn, also find profit in such sites. In the second quarter, Google got $997 million, or 41 percent of its revenue, through the network of Web sites that host ads through the AdSense system. Its software, like Yahoo's, prices ads based on popularity. When users click the ads, the software keeps detailed records, including the number of page views and the amount of commission the site's host earns from the ad -- all of which Web site owners can keep track of by logging on to their accounts. Every month, Google pays publishers by check or direct deposit.
Ad publishers must be approved through Google, to ensure that the ads don't subsidize pornography or gambling, or contain material that is racist, violent or related to illegal drugs. Among other things, Google says it watches to make sure people don't inflate their revenues by clicking on their own ads -- a practice known as "click fraud" that has plagued online marketing.
The popularity of making money this way also has led to creation of "made-for-AdSense" Web pages that contain little content and lots of ads, which critics say clutter the Internet and divert online searches.
The system depends on the cooperation of advertisers, who have to see that their money is well spent, said Jennifer Slegg, an online publisher who is a consultant on AdSense and Yahoo Publisher Network, and who makes roughly half her income from AdSense ads.
"I hear tons of stories about people who were facing bankruptcy but now are able to pay off their houses in full," she said.
The biggest moneymakers tend to be people who started sites to document their passions. Matther Daimler, 28, developed an obsession with finding the most comfortable seats on the long airline flights he took for business. He would look at a better-situated traveler and think: "He has more legroom. I want that seat next time."
In 2001, he took to cataloguing on his SeatGuru site all the seats on his usual United Airlines flight, rating them for best legroom, the most recline, access to video and audio entertainment, and proximity to different types of laptop power sources. Soon, at the request of people who read his site, he started taking information on other flights. He now keeps track of seats on 34 airlines.
Daimler and his wife now work full time on SeatGuru, which gets 700,000 visitors a month. About half of the site's revenue comes through AdSense -- $10,000 to $20,000 a month -- and the rest comes from ad deals that Daimler makes with companies directly.
Tracking clicks and the money they earn itself has become a passion for Leyden. "In the middle of the night I'll wonder how much I made," he said, so he'll check his page's status every 15 minutes.
The money that comes in acts like microfinancing for many sites, said Kim Malone, director of AdSense. "We're enabling creativity, 5 cents at a time."
Friedly, for example, started his company in Washington in 2001 to make it easier for contractors, scientists and researchers to find, download and purchase public documents. He reluctantly signed up to put ads on the site. "I was skeptical because when you sell something, you want to focus on the product, not refer people to other Web sites," he said.
But with more than 10,000 hits a day, the income started adding up. "I was surprised by how much we made. It was an excellent supplement to the business, because we didn't have to do a lot."
Friedly has since started PatentStorm LLC, a site where businesses can search patent records, without outside investment. "In essence, Google has turned into a venture capital or an angel investor in my business."
But if Google giveth, it also taketh away, Friedly said. As people put up more sites that compete with his for traffic, the number of hits on his main site has declined.
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Feb 9, 2008
Marketing is all about spreading ideas
ALL MARKETERS ARE LIARS
Seth Godin
Publisher: Penguin
To survive in business, tell people the right stories, says Seth Godin. This simple guidance, which he offers in All Marketers are Liars from Penguin (www.penguin.com) , may seem unreliable and risky, especially in a `low-trust world' we live in. Also, as if to affirm our suspicions, the book begins ominously, with a blunt statement from the author that reads: "I have no intention of telling you the truth."
Let that not deter you, though, from holding on to the little volume; for, you'd soon learn how narrating the facts, features or even benefits won't help as much as stories. There's a caveat: Your stories need to be remarkable, consistent and authentic. "Tell your story to people who are inclined to believe it. Marketing is powerful. Use it wisely. Live the lie," goads Godin.
He offers `a whole new way of doing business' - that of focusing on what people believe in and telling them stories that add to their world view. Interestingly, "Stories make it easier to understand the world. Stories are the only way we know to spread an idea."
Marketing is all about spreading ideas, says Godin. "Spreading ideas is the single most important output of our civilisation ... If you've got an idea to spread, you're now a marketer." What an encouraging thought! But please remember that you are not in charge. Godin says "the biggest myth marketers believe in" is that they have control over the conversation, the airwaves, your attention and retailers.
Why so? Because options are too many; as a result, "everyone will not listen to everything." Also, contrary to common expectation, people are neither rational nor informed. How then do we do business? Follow the two instructions of Godin: "Invent stuff worth talking about. Tell stories about what you've invented."
To help you achieve success, he outlines five steps. The first is about world view, that is, "the rules, values, beliefs and biases that an individual consumer brings to a situation." It is the lens through which we see everything. Our lenses are not the same, which explains why "people can see the same data and make a totally different decision."
A golden rule of Godin is that you shouldn't try to change someone's world view. "Don't try to use facts to prove your case and insist that people change their biases ... Instead, identify a population with a certain world view, frame your story in terms of that world view and you win."
Frame, as Godin explains, is "a way you hang a story on to a consumer's existing world view." Frames use words, images and interactions that reinforce a world view. "If your message is framed in a way that conflicts with their world view, you're invisible." Frames get the attention, but they don't stop with just repeating what people already know. "The best marketing stories are told (and sold) with frames but ultimately spread to people who are open to being convinced of something brand new." Begin, therefore, by looking around for `a neglected world view'.
The second step in Godin gyan is that people only notice `new and different' stuff. Much like frogs, "we are constantly scanning the world around us for changes," says Godin. "No, we can't grab a fly, but we can tell at a glance if there's a new brand of beer at the market or if the mailman got a haircut." Immediately after seeing something new, we look for causation.
"Unlike virtually any other living being (or even most computers), humans insist on finding a theory to explain what happens to them." That way, we "refine our superstitions," explains the author. "We need to see explanations when there are none because our brains are too restless to live with randomness. In the face of random behaviour, people make up their own lies." But lies can't sustain a successful marketer; he has to be authentic.
The third step is to realise that first impressions start the story, because consumers keep making snap judgments "to survive the onslaught of choices." Isn't it, therefore, enough if a company works only to get the first impression right by, say, sprucing up the front office, or answering the telephone on the first ring? No, says Godin. "We have no idea at all when that first impression is going to occur. Not the first contact, but the first impression. That's why authenticity matters."
Incredibly unputdownable.
http://BookPeek.blogspot.com
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Copyright © 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line
Seth Godin
Publisher: Penguin
To survive in business, tell people the right stories, says Seth Godin. This simple guidance, which he offers in All Marketers are Liars from Penguin (www.penguin.com) , may seem unreliable and risky, especially in a `low-trust world' we live in. Also, as if to affirm our suspicions, the book begins ominously, with a blunt statement from the author that reads: "I have no intention of telling you the truth."
Let that not deter you, though, from holding on to the little volume; for, you'd soon learn how narrating the facts, features or even benefits won't help as much as stories. There's a caveat: Your stories need to be remarkable, consistent and authentic. "Tell your story to people who are inclined to believe it. Marketing is powerful. Use it wisely. Live the lie," goads Godin.
He offers `a whole new way of doing business' - that of focusing on what people believe in and telling them stories that add to their world view. Interestingly, "Stories make it easier to understand the world. Stories are the only way we know to spread an idea."
Marketing is all about spreading ideas, says Godin. "Spreading ideas is the single most important output of our civilisation ... If you've got an idea to spread, you're now a marketer." What an encouraging thought! But please remember that you are not in charge. Godin says "the biggest myth marketers believe in" is that they have control over the conversation, the airwaves, your attention and retailers.
Why so? Because options are too many; as a result, "everyone will not listen to everything." Also, contrary to common expectation, people are neither rational nor informed. How then do we do business? Follow the two instructions of Godin: "Invent stuff worth talking about. Tell stories about what you've invented."
To help you achieve success, he outlines five steps. The first is about world view, that is, "the rules, values, beliefs and biases that an individual consumer brings to a situation." It is the lens through which we see everything. Our lenses are not the same, which explains why "people can see the same data and make a totally different decision."
A golden rule of Godin is that you shouldn't try to change someone's world view. "Don't try to use facts to prove your case and insist that people change their biases ... Instead, identify a population with a certain world view, frame your story in terms of that world view and you win."
Frame, as Godin explains, is "a way you hang a story on to a consumer's existing world view." Frames use words, images and interactions that reinforce a world view. "If your message is framed in a way that conflicts with their world view, you're invisible." Frames get the attention, but they don't stop with just repeating what people already know. "The best marketing stories are told (and sold) with frames but ultimately spread to people who are open to being convinced of something brand new." Begin, therefore, by looking around for `a neglected world view'.
The second step in Godin gyan is that people only notice `new and different' stuff. Much like frogs, "we are constantly scanning the world around us for changes," says Godin. "No, we can't grab a fly, but we can tell at a glance if there's a new brand of beer at the market or if the mailman got a haircut." Immediately after seeing something new, we look for causation.
"Unlike virtually any other living being (or even most computers), humans insist on finding a theory to explain what happens to them." That way, we "refine our superstitions," explains the author. "We need to see explanations when there are none because our brains are too restless to live with randomness. In the face of random behaviour, people make up their own lies." But lies can't sustain a successful marketer; he has to be authentic.
The third step is to realise that first impressions start the story, because consumers keep making snap judgments "to survive the onslaught of choices." Isn't it, therefore, enough if a company works only to get the first impression right by, say, sprucing up the front office, or answering the telephone on the first ring? No, says Godin. "We have no idea at all when that first impression is going to occur. Not the first contact, but the first impression. That's why authenticity matters."
Incredibly unputdownable.
http://BookPeek.blogspot.com
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line
Youth icons of today
Mahatma Gandhi
Independence Day slid past Mumbai under a cloak of security amidst fears of terror attacks. Yet, it was interesting to listen to the results of an exhaustive youth survey done by The Hindu and telecast on a leading TV channel.
Guess who today's youth regard as their icons? The first place goes to Mahatma Gandhi. Second place to Indira Gandhi, and then, among others, (no, not another Gandhi) President Abdul Kalam. Well, if these are the youth icons, the future looks bright for our India.
One is reminded of an MTV survey done a few years ago, where the most popular singer for the youth turned out to be Mohammed Rafi. The enigma that is India!
Fizzing up Pepsi
Just when you thought the fizz was going out of the cola manufacturers comes the news of Indra Nooyi's elevation as head honcho at Pepsico Inc.
Suddenly, everyone couldn't stop talking about her birthplace, her school, her college, her first job ... For Ms Nooyi, it really is a great achievement. And for all of us, a matter of pride and joy. So who's going to grab the limelight by being the first to get her on a public platform in India? One thing is for sure, the venue will not be Kerala!
Meanwhile, Pepsi seemed to take the wind out of the sails of its opponents by saying it would conform to any standards laid down in India. Now could you please help by letting these standards be notified?
Thanda Coke
Coke left us all `thanda' with the publication of the test results it had got from a British lab. It selected and sent the samples and sponsored the announcement.
Guys, this is like a newspaper producing a bunch of completed questionnaires for National Readership Study Council to tabulate and announce as its readership results. Or like another newspaper fixing the time and date for Audit Bureau of Circulation's surprise audit. Give us some credit and go easy on the `tadka.'
Jet turbulence
Jet Airways account - up for grabs
India's showpiece airline, Jet Airways, seems to be flying through turbulent weather. And it's not just the Sahara deal, or the news about the security guard being caught as an alleged terrorist or the endless wait for the Americans to clear it for landing in the US.
Jet has parted ways with Network, its advertising agency, after a rather long and seemingly mutually beneficial relationship. Industry watchers will recall that Lintas (now Lowe) launched the advertising of Jet and then the entire basket of duties was entrusted to Network, a Mumbai-based agency. The agency grew with the client and seemed to be doing a pretty good job. Yet, you never know when and why relationships end. Some of the top agencies are vying for this mega (in the region of Rs 50 crore) account. May the best agency win!
DNA Abba
As part of its first anniversary celebrations, DNA is sponsoring the shows of the pop group ABBA in Mumbai. The advertising almost made us believe that DNA had achieved the impossible and got the famous four members of the group back together for their shows. No such luck. This is an "imitation Abba." A group that dresses like the original, sings all their songs and even calls itself Abba. A friend who heard them play in Malaysia said they did a rather sensational copycat act. Abba must be probably one of the rare groups that fired the imagination of the oldies in the Seventies and remains popular with their children today. And to think they haven't had a new number out for about thirty years! That's class for you. We are going to be giving you a closer look at the inaugural show that was for invitees only. Watch this space.
Hold your head high
Leo Burnett's new commercial for HDFC Standard Life is a welcome change for us. The insurance company seems to have a mega budget and has been effectively bombarding us with their messages. Yet, its first commercial (obviously their favourite) shot at a railway station almost over-played the "hold your head up high" theme.
Each time we saw the elderly father look up at the sky with his head held up high and step out from the compartment of the train, we held our breath. Ever tried getting out from a long-distance train with your head help up? Don't try it. Unless you want to examine the platform at very, very, close quarters.
Victoria
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line
Independence Day slid past Mumbai under a cloak of security amidst fears of terror attacks. Yet, it was interesting to listen to the results of an exhaustive youth survey done by The Hindu and telecast on a leading TV channel.
Guess who today's youth regard as their icons? The first place goes to Mahatma Gandhi. Second place to Indira Gandhi, and then, among others, (no, not another Gandhi) President Abdul Kalam. Well, if these are the youth icons, the future looks bright for our India.
One is reminded of an MTV survey done a few years ago, where the most popular singer for the youth turned out to be Mohammed Rafi. The enigma that is India!
Fizzing up Pepsi
Just when you thought the fizz was going out of the cola manufacturers comes the news of Indra Nooyi's elevation as head honcho at Pepsico Inc.
Suddenly, everyone couldn't stop talking about her birthplace, her school, her college, her first job ... For Ms Nooyi, it really is a great achievement. And for all of us, a matter of pride and joy. So who's going to grab the limelight by being the first to get her on a public platform in India? One thing is for sure, the venue will not be Kerala!
Meanwhile, Pepsi seemed to take the wind out of the sails of its opponents by saying it would conform to any standards laid down in India. Now could you please help by letting these standards be notified?
Thanda Coke
Coke left us all `thanda' with the publication of the test results it had got from a British lab. It selected and sent the samples and sponsored the announcement.
Guys, this is like a newspaper producing a bunch of completed questionnaires for National Readership Study Council to tabulate and announce as its readership results. Or like another newspaper fixing the time and date for Audit Bureau of Circulation's surprise audit. Give us some credit and go easy on the `tadka.'
Jet turbulence
Jet Airways account - up for grabs
India's showpiece airline, Jet Airways, seems to be flying through turbulent weather. And it's not just the Sahara deal, or the news about the security guard being caught as an alleged terrorist or the endless wait for the Americans to clear it for landing in the US.
Jet has parted ways with Network, its advertising agency, after a rather long and seemingly mutually beneficial relationship. Industry watchers will recall that Lintas (now Lowe) launched the advertising of Jet and then the entire basket of duties was entrusted to Network, a Mumbai-based agency. The agency grew with the client and seemed to be doing a pretty good job. Yet, you never know when and why relationships end. Some of the top agencies are vying for this mega (in the region of Rs 50 crore) account. May the best agency win!
DNA Abba
As part of its first anniversary celebrations, DNA is sponsoring the shows of the pop group ABBA in Mumbai. The advertising almost made us believe that DNA had achieved the impossible and got the famous four members of the group back together for their shows. No such luck. This is an "imitation Abba." A group that dresses like the original, sings all their songs and even calls itself Abba. A friend who heard them play in Malaysia said they did a rather sensational copycat act. Abba must be probably one of the rare groups that fired the imagination of the oldies in the Seventies and remains popular with their children today. And to think they haven't had a new number out for about thirty years! That's class for you. We are going to be giving you a closer look at the inaugural show that was for invitees only. Watch this space.
Hold your head high
Leo Burnett's new commercial for HDFC Standard Life is a welcome change for us. The insurance company seems to have a mega budget and has been effectively bombarding us with their messages. Yet, its first commercial (obviously their favourite) shot at a railway station almost over-played the "hold your head up high" theme.
Each time we saw the elderly father look up at the sky with his head held up high and step out from the compartment of the train, we held our breath. Ever tried getting out from a long-distance train with your head help up? Don't try it. Unless you want to examine the platform at very, very, close quarters.
Victoria
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The Google trail
Abhinav Ramnarayan
It isn't just the big players who are benefiting from Google AdWords and AdSense. A whole network has arisen, including advertisers ranging from SMEs to MNCs, hosts from large publishing portals to individual bloggers, and, of course, the 50 million Internet users in the country.
A BLOG GOOGLE RUNS ADS on, which makes money for the blogger. - Bijoy Ghosh
Try typing `jobs' on Google search, and you might be in for a surprise — on the sponsored links column, one of the ads is by competitor Yahoo!
That is probably why Murugavel Janakiraman, Founder and Chief Executive Officer, Bharatmatrimony.com, comfortably maintains relations with both companies — Yahoo is an investor in his portal, while the other provides advertising space for the matchmaker.
However, it isn't just the big players who are benefiting from Google AdWords and AdSense. A whole network has arisen, which includes advertisers from SMEs to MNCs, hosts from large publishing portals to individual bloggers, and, of course, the 50 million Internet users in the country. According to a comScore Media Matrix 2005 report, about 80 per cent of Internet users access Google.com.
K. Sundararaman, Acting Sales Head, Google India, sheds some light on how this network works. He says that apart from the ads that appear on www.google.com, there is Google AdSense, which allows individual Web sites to rent out the space on the page.
These Web sites, Sundararaman explains, are selected through `site targeting' that "allows advertisers to choose individual Web sites within the Google content network where they would like their ads to appear ... allowing advertisers to handpick the audience they want to reach."
Managing ad campaigns
Apart from this, the advertiser can specify search-targeted keywords for categories such as broad matches, phrase matches, exact matches or negative matches. This keyword matching system is completely automated. "We suggest using a combination of two or more of these techniques to run an effective ad campaign," he says.
Which in turn means that managing an effective ad campaign with Google AdWords is not quite such a simple project. For example, Bharatmatrimony.com has a three-member internal team that continually reviews the conversion rate of the number of people that click on their ads in other Web sites, the cost of advertising on Google and the relevance of the keywords that the company has submitted, says Janakiraman.
As large clients, they work in conjunction with a team from Google that has been assigned to work with them. The company has bought about 30,000 keywords.
Keywords matter
Similarly, eBay has an internal team that works full-time on the paid search programme with the Google account team, according to Rathin Lahiri, Head - Marketing, eBay India. This is possibly because "paid search is one of the better performing channels and the search customer is an evolved customer," he says.
The revenue model for the Web site is that advertisers pay for the click or impression that they receive.
For ads priced at cost-per-thousand-clicks, an advertiser may pay as low as Rs 10 per thousand, and for cost-per-click priced ads, it may be as low as Re 0.44 per click, according to the company.
The rate of keywords varies, says Lahiri. For example, the keyword `Nokia' would be more valuable than a keyword such as `pencil' — at the end of the day, the rate that eBay pays is a function of the click-through-rate and the cost-per-click. The keyword `Nokia phone' is more valuable than `Nokia blue tooth device' and therefore has a better click-through-rate.
Users big and small
This has opened up a whole market through the AdSense route. And since the tool caters to publishers of all sizes, the company has both large publishers that have content on the Internet such as Sify.com, NDTV.com, and Moneycontrol.com, as well as individual Web site owners.
Deepesh Agarwal, who runs a Web site that provides freeware solutions, receives on an average 4,000-odd daily ad impressions and earns anywhere from $800 to $2,100 per month depending on the amount of traffic and its `quality.'
He has been using the service for three years. Though the first two years didn't yield many results, but the last year has been a good one. In fact, though the Web site was never intended as a money-spinner, it now constitutes the biggest portion of Agarwal's revenue.
Success story
"My traffic is primarily from the US and Canada — about 60 per cent — and the visitors are common computer users looking for free alternatives for paid shareware applications meant for day-to-day computer maintenance tasks," he explains.
But it doesn't even have to get that technical to be a success. Jamshed Velayuda Rajan, a Usability Consultant with Satyam Computers, maintains two Web sites — one in which he writes about himself and his family, and another blog on cricket.
The latter, he expects, will have traffic of about 2,500 to 3,500 people when cricket matches are going on.
Typically, 350 unique people per day, and about 450 to 500 clicks is the count for his two portals combined.
As for the remuneration, he explains, "High value keywords would earn more — if I had a finance blog, for example, I could make as much as $4 for one click.
Since cricket is not a money-spinner in that sense, perhaps between 10 and 30 cents per click." All in all, he has made about Rs 30,000 in the last two years.
Not bad for a man who was looking to have a bit of fun by writing about his life and his family.
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Stories in this Section
Saving face
An issue of premium
John and Jane and strategy mutation
Youth icons of today
Marketing movie brands
The Google trail
Strategist par excellence
Marketing is all about spreading ideas
HARDSELL
For some crunch
Bubble power
Fan club
Sound sense
Self-regulate
Enduring music
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