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  • Michael Krakovskiy 6:01 pm on May 21, 2012 Permalink | Reply
    Tags: , , advertising equivalent, Advertising network, advertising professional, , car commercials, , , , , Consumer fraud, cut rate ad networks, Electronic commerce, , , FDA Phase, , hot search keywords, , , , IPO, , pretty sophisticated algorithms, , , web farms   

    On Facebook Advertising 

    Two things happened recently: Facebook’s IPO fizzled and there was a slew of articles and blog posts about how Facebook ads are ineffective. The majority of the articles follow the same song and dance: we spent $250, got some likes from random people and nothing changed. The one standout it GM dropping Facebook ads. GM’s budget was 10 million dollars, and the way I understand it, this is their equivalent of $250 for a small business.

    While I personally dislike Facebook tremendously and want it to fail, I think that the FB ad-bashing articles are off base. Facebook ads are a great deal. I am not an advertising professional, but I drank with a lot of them and I think picked up a reasonable amount of knowledge about the industry. I also stayed at … hmm, can’t remember the name of the hotel, but this is a reference to the TV ads where people say “well, I’m not a [professional that has to be very smart and skilled] but I stayed at [name of the hotel]”.

    There are many, many bad deals in advertising. There are big-name websites that have “respectability” plus a huge saleseforce. These guys can charge $15, $20, $30, sometimes even $50 per 1000 banner impressions. cost for 1000 impressions is called CPM: cost per M where M is the Roman numeral 100. At the higher price you get gigantic custom ads known by a variety of names: browser crashers, godzillas, superskyscrapers, page fuckers, etc. There are also “sponsorships” where dumb companies buy little badges on new sites with next to no traffic.

    How do these things get sold? Well, the agency people who control how the ad budget is spent are often young and get a lot of free drinks. Also, ad sales people are very good at what they do.

    Then there are cut rate ad networks that have 5-20 cents CPM. The traffic for these comes from all kind of low quality sites: lyrics websites, guitar tab sites, all kinds of web farms, dating sites, porn and near-porn sites and the like. Big sites sometimes buy traffic from these sources when they don’t have enough “inventory”, but they’ve already sold a lot of high CPM ads. These are a pretty bad deal, and I suspect much of the traffic is simulated by bots. It is cheap and there’s a lot of it though. Targeting options are pretty weak with the exception of plentyoffish.com: POF allows for very detailed targeting. If you want to target only Canadian redheads between the ages of 18-22 – you can.

    Google ads are a better deal: you are targeting people that are searching for something. Google has pretty sophisticated algorithms for detecting fraud, but I suspect click fraud is still rampant. Google’s predominant model is charging per click instead of per 1K impressions, and you have to compete with other people for hot search keywords. For instance, ambulance chasers pay ridiculous money for “mesothelioma” keyword. Mesothelioma is a type of cancer caused by asbestos, and layers apparently can make crazy money suing on behalf of people who have it. A click on an ad can fetch as much as $10 or more. There are many other expensive keywords where even a single click is worth paying actual humans to click on them from time to time. There are also pity clicks and punitive clicks: sometimes people click ads to support sites that they like and to punish ones advertisers they don’t like.

    Facebook ads by my estimation cost about 1/10th of Google’s, almost in the low quality network territory. The targeting is amazing though: Facebook knows a lot about what people are interested in and lets you have a sniper-like precision of putting your ad in front of them. Do you want New Yorkers who are into planted aquariums, fishing and knife sharpening? If there are 10 people like that you can reach them on Facebook for a few bucks. Unlike Google users who are searching for something, Facebookers are there for ogling hot people and playing Farmville. They tend to ignore the ads, but you can get an even better deal by buying CPC ads. Massive click fraud is difficult on Facebook, most of these clicks are real.

    There are many things about advertising in general that are mysterious: starting with the “if I almost never click on ads then who does” to “do tv and magazine ads actually make me buy anything”. Are funny ads where you remember the joke but not what was advertised worth the money? Are people swayed by car commercials? How about those Coca Cola billboards? How about those ads in New York taxi cabs and ads that annoy in general – are they effective? QR codes ( http://wtfqrcodes.com/ ) – are they the advertising equivalent of “free public wifi” zombies? I have a hunch, but I don’t really know.

    What I do know is that compared to other options FB advertising is a pretty good deal at current pricing.

     
  • Michael Krakovskiy 5:01 am on January 27, 2010 Permalink | Reply
    Tags: , , Craigslist, , Electronic commerce, , , , Michigan, , ,   

    eBay and The Michigan Deposit Scam 

    eBay is such a horrible hassle these days. I tried selling a few things recently, and between the horrible UI, all the hassles with payments, answering questions and shipping it turned out to be a huge waste of time.

    I am sitting on a small fortune of items I would like to get rid of, but I don’t want to deal with strangers on Craigslist or going through the eBay rigomarole. An ideal solution would have been an eBay drop-off shop, but it seems that these went the way of the Dodo.

    eBay drop-off store is an idea that many have tried, but it turned out mostly like Seinfeld’s Michigan deposit scam.

    In one episode Newman keeps trying to find a way to make a scheme that would bring New York cans and bottles to Michigan, which has a 10 cent deposit instead of New York’s 5 cent one. Kramer keeps telling him that it would not work due to the transportation overhead, but finally Newman figures out a way to get a postal truck for free.

    It seems that the time overhead is so high on running an eBay store is so high, that most of the bigger ones that tried it went out of business.

    In reality the Michigan deposit scam is against the law, but it actully costs the state 14 million a year in lost revenues. It’s doable.

    eBay is showing Twitter-like incompetence in serving its customers. While Google gives its customers huge amounts of storage, email, and software for free, eBay can’t seem to provide free image galleries and other useful services, selling out its customers to an unsavory bunch of third party providers. Image storage is not a very difficult technical problem, and neither is url shortening, but eBay and Twitter are still in the dark about it.

    Instead of making selling on eBay easy, developing drop off stores, and making its service better eBay seems to be focused on buying and selling unrelated busenesses for billions of dollars (and losing money on it).

     
  • Michael Krakovskiy 10:59 pm on December 23, 2006 Permalink | Reply
    Tags: ad server, , Amazon Associates, , Carly Fiorina, , , , Electronic commerce, Omakase, , stock broker, Tony Burdain, ,   

    The Gift of PR 

    When you are working with true professionals, one of the best things to do is to ask them to choose for you. Japanese have a special word for it – “omakase“. When you say “omakase onegaishimasu” in a sushi bar, the chef will create a custom meal for you, based on the freshest and the best ingredients available at the moment.

    If you ever give your money to Warren Buffet, your hair to Jonathan Antin, your floundering computer maker to Steve Jobs, the choice of where and what to eat to Tony Burdain — they’ll do a good job. Doing the same with any stock broker (is likely to churn your investments or worse ), the Supercuts barber (might style you ala Gates) , Carly Fiorina (might make poor H and P spin in their graves some more) is a capitally bad idea.

    For a while I’ve been running Amazon’s “omakaseTM” ads on my blog, and I’ve got to tell ya, they stink. I, personally, would fire the business dev suit running (or rather running into the ground) Amazon’s Associates program. This person is never going to be fired, because by it’s nature, Amazon Associates is an amazing thing, one of the best business ideas that Amazon ever implemented. It’s like an Abrams M1 tank – even a drunk moron can drive it around and do a lot of very impressive damage, but it takes a highly trained soldier to really unleash it’s true destructive capabilities.

    I am very disappointed in Amazon Associates products, especially omakase, and because of that I am building my own Amazon Associates ad server in my spare time. Lately I haven’t had much spare time, so the project is moving rather slowly. I’ll be pulling omakase ads off though, and meanwhile I’ll replace it with a holiday gift for my readers.

    I will replace the ads on my website with promos for some blogs and websites of my readers (as well as some of my favorites). Do you you have a site you’d like to promote? Comment here or send me an email. Suggest as many as you want. If you have some “creative” – that’ll help. And if you won’t suggest anything (as it usually happens when I ask for suggestions) and make me feel very sad, instead of promoting your sites, I’ll do the same with all the splogs that sometimes spam me. At least they take the time to leave a comment.

     
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