4_Cases

[|Andreas Weigend] MBA 267, Spring 2009-B Haas School of Business, University of California at Berkeley
 * Marketing 2.x: The Social Data Revolution**

=**Class 4: Cases**= April 16, 2009 Audio recording and transcript: [|mp3][|transcript]

=**Objectives**= = = =Introduction - History of Web Marketing= //**Web 0 (pre-Google)**//
 * 1) To understand the reasons for an unconventional success story in the big business of real estate
 * 2) To contrast Mark Choey's proactive approach with Web2 tools (the blog SFNewDevelopments.com is one of the reasons his company took off) again the reactive approch large firms like Dell find themselves forced into)
 * Exemplified by the DoubleClick model
 * CPM was the primary ad model
 * Cost per 1000 impressions
 * Difficult to track how many impressions were actually delivered
 * Ad buyer did not have transparency into what they were buying
 * CPM was a holdover from the newspaper model
 * Indication of how new technologies often rely on parts of older technologies until the new tech is fully understood
 * Limited automation in the DoubleClick advertising model
 * Used a large salesforce to sell ads
 * Similar to the "relationship" sales model of radio, TV, newspapers
 * See Google's automated model in Web 1.0 (below)
 * Ad.com (bought by AOL) introduced the CPC ad model to reduce the risk for advertisers
 * Cost per click
 * A click is more valuable than a simple impression
 * 1000 impressions might yield only one click (depending on product or industry, perhaps 100:1)
 * CPC is much more measurable for both advertisers and the search engine/portal/etc. that delivers the ad
 * Click fraud ultimately became a large problem
 * Individuals paid to click on ads - drives revenue for the search engine
 * The advertiser pays for a click that was completely meaningless and fraudulent
 * As a reaction to click fraud CPA has now gained prominence
 * Cost per Action
 * e.g. American Express might pay a set amount per customer signed up through an advertisement
 * Other businesses might pay a set amount per user registration
 * CPA provides flexibility to let the advertiser select the action that is important to their business
 * Flexibility to negotiate the rate to be paid for each action
 * Because actions can vary wildly between companies and industries, there is less uniformity in bidding than in the CPC model
 * Traffic in Web 0 was dominated by portals
 * Yahoo, MSN, Excite, etc.
 * Expect users to come to main landing pages
 * Focus on building content networks to keep users within a portal network
 * //Web 1.0//**
 * Exemplified by Google
 * As opposed to Web 0's portal strategy, Web 1.0 sees consumers using search engines as a launch page and navigating through searches
 * Some ad models that were intrusive to users
 * Banner ads
 * Spam and untargeted email
 * Pop-ups and pop-unders
 * Search engine optimization (SEO) and search engine marketing (SEM)
 * Cottage industry of consulting firms that could maximize search engine results for companies
 * SEO = maximizing a company's search ranking in the organic search engine results (http://en.wikipedia.org/wiki/Search_engine_optimization)
 * SEM = purchasing ad keywords on a search engine through programs such as Google's AdWords (http://en.wikipedia.org/wiki/Search_engine_marketing)
 * In Google’s interest to make it easy for people to bid and track keywords
 * Made the system self-service as opposed to DoubleClick’s salesforce
 * Google recommends other search keywords to generate more ad buying (drives up price and usage)
 * AdWords
 * Totally automated
 * First bid is a guess
 * Build data over time as to how clicks convert into customers or revenue or other metrics
 * Refine the bid strategy over time
 * 2nd place auction price is paid
 * Andreas' AdWords example:
 * Campaign for Swiss Air
 * Bid on “Cheap flights Zurich” keywords
 * Swiss Air's ad loaded on that keyword search
 * CTO praises his group's understanding of Web advertising
 * CEO clicks on the ad
 * Andreas had it rerouted to www.weigend.com
 * Stats:
 * Google has ~10M advertisers
 * Amazon has 1M affiliates
 * Pedro's insights from his summer at Google:
 * High-touch model for top advertisers
 * 2nd tier advertisers = consolidated through Google's account managers
 * The rest = totally automated (AdWords only)
 * Booking.com (largest Google advertiser (1% of volume))
 * Most frequented clickstream is Google >>search results>> (as opposed no navigating the hierarchy of a portal)
 * //Web 2.0 (Social Participation)//**
 * [|Tim O'Reilly's definition of Web 2.0]
 * Exemplified by companies like Facebook, Twitter and Flickr & technologies such as wikis
 * What is a click? How do you monetize it?
 * How do you capture pageviews for Google vs. Yahoo or others?
 * //Dell Online Marketing Example - Sara Nelson//**
 * Dell has 33M site visits per month
 * 2-3% conversion rate (compared to average of 1% in many businesses)
 * Channels: Web site (70% of direct consumer business), email, online ads, affiliate marketing (FatWallet), search (traffic driver to Web site)
 * SEO: "laptops" instead of "notebooks" because that is what people actually search for
 * At one point $17 per click for "laptops" due to HP and Dell price battle
 * Now closer to $1.50
 * Google aligns incentives between themselves, consumers and advertisers – deliver the best information and most relevant ads
 * Feedback loop of implementing experiments and tracking real-world effectiveness
 * Dell has usability experts that track which parts of a web page users focus on through eye-tracking; right-hand side is a black hole
 * Constant Improvement: A/B beta testing, multi-variant testing, creative testing, subject-line testing for email, heat map/eye-tracker testing, focus groups, and online testing community
 * Some of Dell's Web 2.0 initiatives: Idea storm (digg.com set-up where anyone can post ideas), Dell Community (broader online community; blogs, wiki, forums, groups), Dell Lounge (the “cooler” face of Dell, gaming competitions), Dell University (hire college kids to become peer to peer advocates of Dell on campuses)
 * //Mark Choey – real estate impact with Web 2.0//**
 * Was a real estate investor 4 years ago; became a RE agent in SF 3 years ago (no experience)
 * Today has 20 agents; one of the top agents in SoMa
 * Options to gain customers as a new agent:
 * Join Century 21 or other brokerage agency
 * Tap his personal network
 * Craigslist postings
 * He tried all of these and others
 * 80% of real estate buyers go to the Internet first to research
 * Mark decided to build a data aggregation site for SF real estate
 * 25k new condos in SF as of 3 years ago
 * Started researching each condo building (# available, prices, etc.)
 * Aggregate info on his Web site - [|sfnewdevelopments.com]
 * Built in blog style - providing updates on % of units available at each building, weekly updates
 * Google “Infinity condos San Francisco”
 * Infinity building is first listing
 * Mark's blog post from December 2007 about Infinity is 2nd listing in Google (SEO)
 * Traffic converts to emails, then to phone calls, and then to sales
 * Use AdWords to buy ad spots for keywords where his site does not come up naturally
 * Doesn’t compete on “San Francisco condos” – too expensive
 * More detailed keywords at the neighborhood or building level (e.g. "SoMa condos" or "Infinity condos")
 * Built Climb Real Estate Group with another RE agent
 * Google Talk embedded on the Web site - instant chat with a live agent
 * Anonymous communication
 * Consumers expect an email response within 1 hour
 * SF new development leads with data – all listings throughout the Bay Area (as opposed to a broker’s specific listings)
 * Twitter as a microblogging voice – connect directly to consumers (both buyers and sellers)
 * SocketSite is the largest SF real estate blog
 * RedFin trying to simplify the process of buying and selling
 * Trying to squeeze out agents, but RedFin is actually an agent itself
 * Provide info directly to users
 * Still have links to “Find an Agent”
 * Start an offer directly with Redfin and get commission savings
 * Function of a RE agent is different than agents in other businesses (travel, etc.) because each home or apartment is unique and different
 * Trulea Voices - message boards (anonymous)
 * Agents post responses and hope to get emails or calls as a result
 * Mark tried it but did not get any direct calls from Trulea Voices


 * __Global Traffic Statistics__**
 * Pageviews**


 * Unique Visitors**

__**Google AdWords Screenshot**__
 * Time on Site**