You really have to wonder what axe some of the large consulting firms have to grind, as the only other explanation is that they are utterly ignorant of the world in which they live.
Take this wonderful example from Deloitte’s Media Predictions:
Growth in online advertising could be stymied this year due to the lack of a standard measurement system and growing antipathy to online ads, according to accounting firm Deloitte’s Media Predictions 2008 report.
But the prediction likely to resonate the most locally was the potential knock-on effect from not having a system to measure the effectiveness of online ads.
Damien Tampling, head of Deloitte’s Australian technology, media and telecommunications team, said “This is beginning to cause issues as more and more organisations advertise online and want to compare the return on investment across different channels, websites, time periods and territories,”
Come again? Where have you been? Anyone who has used any of the wide variety web analytics products out there (we happen to use Google Analytics which is both free and excellent) knows what a load of bollocks this is.
We measure almost everything.
You can trial enhancements you believe they’ll improve your sales performance: it doesn’t matter if they work or not as you keep the ones that do and ditch the ones that don’t. Nothing is sacred. It affects every part of an organisation from Sales and partner relationships, through programming to design and interface. There is usually little to argue about because the statistics speak for themselves.
Every Google click both paid and organic is measured. Every partner campaign is measured for traffic, sales, conversion and efficiency. This affects much much more than just marketing campaigns. We know where people come from, how long they stay, what they buy, what they engage with and what they don’t, we know how people arrive at our sites and where they leave and why.
This is just one tiny example of one screen from just one of our sites:
And before anyone says this is search not online ads, well, search ads are ads as well, and we monitor with the same effectiveness any online material be it ads, links, partnerships or just customer behaviour.
Yet Deloitte’s says you can’t measure.
Go figure.
I’m really not into management theory as they always seem to come in and out of fashion, but this book was so great I bought a copy for everyone in our tiny team. I liked it most perhaps because we seem to be doing much of this already and nobody has ever heard of us and I liked it too because it wasn’t opinion masquerading as fact but was based on intensive long-term research.
The strongest analogy in the book tries to get you to imagine a huge, heavy flywheel. It’s a massive, metal disk mounted horizontally on an axle. It’s about 100 feet in diameter, 10 feet thick, and it weighs about 25 tons. That flywheel is your company. Your job is to get that flywheel to move as fast as possible, because momentum — mass times velocity — is what will generate superior economic results over time.
Right now, the flywheel is at a standstill. To get it moving, you make a tremendous effort. You push with all of your might, and finally, you get the flywheel to inch forward. After two or three days of sustained effort, you get the flywheel to complete one entire turn. You keep pushing, and the flywheel begins to move a bit faster. It takes a lot of work, but at last the flywheel makes a second rotation. You keep pushing steadily. It makes three turns, four turns, five, six. With each turn, it moves faster, and then — at some point, you can’t say exactly when — you break through. The momentum of the heavy wheel kicks in your favor. It spins faster and faster, with its own weight propelling it. You aren’t pushing any harder, but the flywheel is accelerating, its momentum building, its speed increasing.
This is the Flywheel Effect. It’s what it feels like when you’re inside a company that makes the transition from good to great.
Why does the Flywheel Effect work? Because more than anything else, real people in real companies want to be part of a winning team. They want to contribute to producing real results. They want to feel the excitement and the satisfaction of being part of something that just flat-out works. When people begin to feel the magic of momentum — when they begin to see tangible results and can feel the flywheel start to build speed — that’s when they line up, throw their shoulders to the wheel, and push.
We have been pushing our own little flywheel for about 7 years. It has some momentum now and a tidy little team behind it all pushing in the same direction. We hope our developments over the next 3 years or so will create our own breakthrough effect.
Wish us luck!
If you are an Internet Producer or Project Manager and you work on a Mac, you are often testing new sites that reside in development environments and in order to access these you’ll have to learn how to add ‘Host file’ entries to your Mac so you can even see the sites.
The problem is, when you search online for how to do this you’ll primarily come across a whole bunch of Linux Geeks who’ll tell you what to do but not precisely how to do it. They say things like “Just edit the hosts file in the etc directory and you are done”. Right. And where is that? The typical Mac has well over 100,000 files on it these days and that’s like looking for a needle in a haystack.
So after some teeth-grinding, here’s a step by step guide to what to do:
1. Open the TERMINAL application from Applications > Utilities
2. Type this into terminal
sudo open /etc/hosts
3. It then immediately asks for your mac administrator password so enter that now
4. This opens your hosts file for you. Nice huh?
5. Apple Command click on the name hosts in the title bar of the window to go back one directory to the one called etc so you can locate the file called ‘hosts‘ and then open this in a text editor like TextMate.
6. Type or paste in the new hosts entries. They’ll be in a format like an IP address followed by the various domain entries separated by spaces
eg 2.3.202.201.68 websitename.com www.websitename.com dev.websitename.com
7. Save and close the window
8. Go back to Terminal and type
lookupd -flushcache
or, if you are using Leopard, type
dscacheutil -flushcache
9. Close Terminal and you are done. Now that was easy, wasn’t it!
We have some concepts in development whose success (or not) depends on the assessment of whether travellers will continue to use internet cafés for the next five to ten years or if mobile internet access internationally will supersede them.
So on a recent extended trip to Europe I decided to test the Telstra 3g service that they hype so much on TV. How good was the coverage, how fast was it internationally and how much did it cost?
I think it is almost certain that over the coming years this technology will get built into all laptops so that takes care of the basic access issue but would travellers use it? Was it good enough?
The simple answer is yes it is. I rarely didn’t get coverage anywhere in Italy or Greece, even on the islands and the speeds were acceptable, something like using a 56k dial-up modem about 10 years ago. While fast broadband speeds would be nice, this is just good enough to access most travel content and sites while you are away.
So, until this point I was deliberately avoiding the price, to try to focus on the service and yes, it was good enough and convenient enough that I wouldn’t want to head down the road to a local internet café.
But, and here is the BIG but, then I got home to my bill.
$8,600 for 6 weeks access.
And it got worse. Looking through the bill there was little or no logic to the charges: sometimes I’d be online for an hour and get charged $1.86 (nice) and the next day in the same location at much the same time I’d get charged $776.13.
Right.
So they can’t even come up with a model that is at least simple and understandable. Like $2 a minute or something. At least that way you’d be able to budget accordingly. So let’s assume access charges drop by 90% over the next 5 years, would I then use it? $860 for 6 weeks as a traveller? Not a chance. As a businessman? Unlikely. I’ll just use the internet cafe down the road at $5 an hour.
I estimate international access prices are going to have to drop by 99% to make this viable for international travel and this is unlikely inside of 10 years unless there is some major new player like Google offering free Wi-Fi access globally.
Internet Cafe’s will move to WiFi over the years but 3g isn’t a meaningful option for travel inside any meaningful timeframe.
One of the best investment strategies for online companies I heard of recently was a VC fund based in NY who approached us asking if we wanted to sell a stake in one of our companies (we didn’t). But when I asked them how they heard about us they said they had invested in hitwise.com the company specialising in online competitive intelligence and hence had access to data on who was making waves out there. Then they approached the best of these.
Simple and clever.
I’d bet that Google is following the same strategy with their purchase of Urchin (the product they turned into Google Analytics) and then offering it for free. Apart from being a great product, can you imagine the data they are collecting? Phew!
For those of us with less deep pockets one tool we use to monitor our competitors is Alexa.com, a company owned ironically by Amazon.
I’ll get to the irony at the end.
Now, all web traffic is not created equal:
Figure 1 ~ WorldNomads.com
We are the blue line and when you see one of your competitors (the red line) do a blip like that, you have to ask, should we be worried? Answer: well, yes and no. It was certainly worthy of investigation and we uncovered the fact that they had just added an application to Facebook.com.
Figure 2 ~ Facebook.com
Look at that SPIKE. That is a doubling of traffic and reach since February of this year. I’m please those aren’t our servers!
Obviously this was driving vast amounts of traffic but a closer examination of that traffic reveals that little of it sticks so they have tsunami of new members to support who aren’t active or engaged with their brand.
Sigh.
Now, even when you are facebook it is worth keeping your ego in check with a view to your own competitors:
Figure 3 ~ yeah, that’s mySpace.com up there at the top.
Now, lets put Amazon on there. That’s them in green.
Figure 4 ~ Amazon.com.
Ouch! I found this one the most fascinating trend. What could possibly be causing their traffic and reach to halve? Their brand is still strong and trusted, they are one of the names you immediately think of when you want to buy something online, and they have vast global reach.
The rise of the micro-national
My instincts tell me that probably this decline has been caused by two things: the explosion of niche online retailers selling globally combined with Google Adwords (SEM), a mechanism that is phenomenally efficient at connecting customers with companies no matter how small you are.
The global implications of this trend are yet to be fully understood, but I think they have a loooong way to go yet.
Imagine you are a fisherman visiting your usual fishing ground and you bring in an unusually good catch of sardines. That means other fishermen in the area will probably have done well too, so there will be plenty of supply at the local beach market: prices will be low, and you may not even be able to sell your catch. Should you head for the usual market anyway, or should you go down the coast in the hope that fishermen in that area will not have done so well and your fish will fetch a better price? If you make the wrong choice you cannot visit another market because fuel is costly and each market is open for only a couple of hours before dawn—and it takes that long for your boat to putter from one to the next. Since fish are perishable, any that cannot be sold will have to be dumped into the sea.
Photo: Santosh Dawara
This, in a nutshell, was the situation facing Kerala’s fishermen until 1997. The result was far from ideal for both fishermen and their customers. In practice, fishermen chose to stick with their home markets all the time. This was wasteful because when a particular market is oversupplied, fish are thrown away, even though there may be buyers for them a little farther along the coast. On average, 5-8% of the total catch was wasted, says Robert Jensen, a development economist at Harvard University who has surveyed the price of sardines at 15 beach markets along Kerala’s coast. On January 14th 1997, for example, 11 fishermen at Badagara beach ended up throwing away their catches, yet on that day there were 27 buyers at markets within 15km (about nine miles) who would have bought their fish. There were also wide variations in the price of sardines along the coast.
But starting in 1997 mobile phones were introduced in Kerala. Since coverage spread gradually, this provided an ideal way to gauge the effect of mobile phones on the fishermen’s behaviour, the price of fish, and the amount of waste. For many years, anecdotes have abounded about the ways in which mobile phones promote more efficient markets and encourage economic activity. One particularly popular tale is that of the fisherman who is able to call several nearby markets from his boat to establish where his catch will fetch the highest price. Mr Jensen’s paper adds some numbers to the familiar stories and shows precisely how mobile phones support economic growth.
As phone coverage spread between 1997 and 2000, fishermen started to buy phones and use them to call coastal markets while still at sea. (The area of coverage reaches 20-25km off the coast.) Instead of selling their fish at beach auctions, the fishermen would call around to find the best price. Dividing the coast into three regions, Mr Jensen found that the proportion of fishermen who ventured beyond their home markets to sell their catches jumped from zero to around 35% as soon as coverage became available in each region. At that point, no fish were wasted and the variation in prices fell dramatically. By the end of the study coverage was available in all three regions. Waste had been eliminated and the “law of one price”—the idea that in an efficient market identical goods should cost the same—had come into effect, in the form of a single rate for sardines along the coast.
This more efficient market benefited everyone. Fishermen’s profits rose by 8% on average and consumer prices fell by 4% on average. Higher profits meant the phones typically paid for themselves within two months. And the benefits are enduring, rather than one-off. All of this, says Mr Jensen, shows the importance of the free flow of information to ensure that markets work efficiently. “Information makes markets work, and markets improve welfare,” he concludes.
So what has all this got to do with Surecan and the Footprints Network?
Well, personally we dislike the term charity as this suggests a handout and, as is clear from the above, the free market has done more to alleviate poverty in the last 20 years than the trillions of dollars spent in aid. But as the above clearly demonstrates, most people on earth are savvy enough to help themselves given half a chance and our focus is to ensure that they have the means to do so.
So, what is a company that builds and runs online businesses doing at the Global Ecotourism Conference in Norway? Well, the people at Surecan are all about ideas, life would be far too dull were it not. That’s not to say all of our ideas work but, hey, when you are at the forefront of the online world then that’s no surprise.
We tend to work from experience and instinct (or from Gut feeling) and the Footprints Network is one idea whose time is now.
The peculiar thing about ideas though is the fact that you can often only seem to work out why they work after the fact. We have developed and evolved footprints over the last two years and it was only when we were invited to present it to this conference that we actually had to aticulate why it works so well, and, like all the best ideas, it is astonishingly simple.
I am simply amazed that nobody from the local press in our home country has picked up on what we are doing as it’s a great story of Australian innovation and one that is surely destined to truly be a phenomenon.
As a company delivering business ideas and working with some pretty complex technology, we love to see solutions that are often just as effective at the other end of the spectrum. This concept was done to promote a book launch. What we love about it is that all the work and effort was in the thinking and imagination. The ‘technology’ such as it was, was very basic html and a digital camera.
Incredibly compelling and effective, it was another example that got e-mailed around the world and one that was a far cry from the complexities offered by advertising agencies. I’m sure that necessity is the mother of innovation (as well as invention).
From a marketing perspective, it is sometimes it is hard to predict what will and won’t work online, but it is often the case that the simplest things are the ones that get sent around and create ripples (popularly known as ‘viral’ effects). Here is the footer in one of our partners e-mails. I wonder how many people actally read it?
We’ve been arguing for weeks: does anyone ever read these legal footers? Our lawyers reckon that they do and that it’s really important that it fulfils all the requisite legal obligations and safeguards us from any legal shenanigans. Everyone else in the business is convinced that we could quote a passage from ‘The Cat in the Hat’ and no-one would give a monkey’s! So, if you’re honestly interested in this kind of thing or are desperately in need of a little sleep… read on. The information in this internet email is copyright, confidential and is intended solely for the addressee(s). If you are not the intended recipient please delete this message from your system and contact us at postmaster@i-to-i.com to explain why you’ve been hacking into other peoples email accounts. To the addressee(s): we can not guarantee that this message is either private, confidential or remotely interesting as it may have been altered without your or our knowledge. Nothing in this message is capable of, or intended to, create any legally binding obligations on either party or be used in any legal proceedings whatsoever. Any use of bad grammar, shoddy spelling or tired clichés should not be seen as an indication of our abilities as a company.
Gotta love it.
