Tag Archives: freemium

How to get help with online marketing for small businesses

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Last week I was invited to a networking event hosted by Rob Tyson of The Tyson Report and Triberr.

As regular readers will know, I am interested in small UK businesses, mainly because my grandfather started a small shop in Camberwell shortly after the war, which my dad looked after until retiring some five years ago.

I’m acutely aware that small businesses need as much help they can get, and in some ways the Internet has created a level playing field, but small businesses struggle with the complexities of the Internet and it takes too much time to research the necessary material.

Step forward Rob Tyson. Rob has created a subscription based website which helps small businesses understand the nuances of Web marketing.

His website is based on a freemium model – a lot of content is free, the first month costs £1 and thereafter it’s £19 a month.

I spoke to Rob at the event, not for as long as I’d like because there were lots of others there, and he seems a genuine guy who wants to help small businesses. I asked him what his long term plans are, and whether he would help large companies, and he said that he wants to focus just on smaller companies at the moment – usually less than a dozen people, running a business as well as a website.

At the networking event was a wedding photographer who has reduced his marketing spend (at one point he was spending 50% of his revenue on marketing) through Rob and a charming lady who is setting up a London tour guide business and needs help promoting it online.

I’ve read Rob’s blog, and it’s straight up, direct content. There’s no fluff, and something to take away from every post.

If you’re a small business, I recommend following Rob on Twitter and taking a look at his site.

 

LinkedIn’s future looking good

LinkedIn have had a third quarter and with quarterly revenues up 81% to $252m, they are set to have annual revenues of $1bn.

It’s still staggering how on revenues of $252 million they still only make less than 1% profit of $2.3m, although being fair to them, their EBITDA is $56m – 22% of revenue.

Their income is split as follows:

  • 55% Hiring Solutions (recruitment)
  • 25% Marketing Solutions (advertising)
  • 20% Premium Subscriptions (sales and headhunting)

This is a healthy mix – I’m still concerned how many Internet businesses are based on an advertising model. It works so well for some (Google), not necessarily for others (Facebook) and I prefer mixed models where it’s closer to a freemium or retail model (Spotify, Amazon and LinkedIn).

LinkedIn have successfully implemented the freemium model perfectly – most users can get value from the site without paying a penny. Users who want more information about other people’s profile, or want to contact people they’re not connected to, or look at who’s been looking at their own profile, can upgrade.

LinkedIn has become synonymous with Internet based recruitment and B2B business networking. Two thirds of LinkedIn’s revenue comes from the US, so there’s still huge opportunity in Europe and Asisa (22% and 7% respectively). To continue the B2B toolset acquisition, I would expect them to buy an events organiser such as EventBrite.

A look at New York Times digital revenues

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Digital

Digital businesses include NYTimes.com, BostonGlobe.com, Boston.com, About.com, other Company Web sites and related digital products. In the third quarter of 2011, total digital advertising revenues decreased 4.5 percent to $74.8 million from $78.3 million. Digital advertising revenues at the News Media Group increased 6.2 percent to $50.3 million from $47.4 million due to growth in retail and national display advertising. Digital advertising revenues as a percentage of total Company advertising revenues were 28.6 percent for the third quarter of 2011 compared with 27.3 percent in the third quarter of 2010.

In the first nine months of 2011, the Company’s total digital advertising revenues increased 0.9 percent to $242.9 million from $240.7 million. Digital advertising revenues at the News Media Group increased 12.2 percent to $162.4 million from $144.7 million. Digital advertising revenues as a percentage of total Company advertising revenues were 28.2 percent for the first nine months of 2011 compared with 26.3 percent in the first nine months of 2010.

Paid digital subscribers to The Times digital subscription packages, e-readers and replica editions totaled approximately 324,000 as of the end of the third quarter of 2011. In addition to these paid digital subscribers, as of the end of the third quarter of 2011, The Times had more than 100,000 highly engaged users sponsored by Ford Motor Company’s luxury brand, Lincoln, who have free access to NYTimes.com and smartphone apps until the end of the year, and approximately 800,000 home-delivery subscribers with linked digital accounts, who receive free digital access. In total, The Times had paid and sponsored relationships with over 1.2 million digital users as of the end of the third quarter of 2011.

Source: The New York Times Company

My interpretation

  • In the last quarter, there were 1.2 million registered users, of whom 324,000 paid something, and 100,000 were paid for by Ford (a great subscription model as long as there are no catches for either party) and 800,000 were covered by their print subscription. In other words, they have a churn of about 25%.
  • The site has 45 million unique visitors per month as of January 2011 – it’s interesting that they use comScore to quote that 45 million. ComScore use an estimated data model, as opposed to NYT using their own actual data.
  • Anyway, 45 million unique users and 324,000 have paid something – that’s a conversion rate of less than one percent, however paid for content is still very much in its infancy.
  • Those 45 million users probably don’t include Smartphone users or e-readers (hats off to ComScore if that can get that data, however I suspect they can’t).
  • Doing some extremely rough sums, subscriptions are 99 cents for the first 4 weeks and then $3.75 per week thereafter. Let’s ignore the special offer price and let’s assume Ford pay a full $3.75 per user. Ignoring the print subscribers who get the digital edition for free, that’s a total revenue of $1.59 million per week. Let’s assume NYT earned this revenue throughout the entire quarter (12 weeks), that’s a total of $19 million for the quarter.
  • Digital advertising across the group (and this includes a number of other websites and newspapers) generated $74.8 million.

Lessons to take away from this quarterly statement

  • The premium digital content model still has a way to go – advertising still generated four times the revenue as subscribers.
  • ‘Wholesale’ or ‘sponsored’ user bases are key drivers for the number of paid for subscribers – Ford pay for 100,000 users and NYT have 324,000 paying individual subscribers. Think of the effort that goes into the Ford deal compared to the direct to consumer sales effort.

31 tips from Bill Boorman to increase Twitter followers

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If you and I have ever had the chance to discuss Twitter, you’ll know I’m not exactly pro-Twitter. I question its true marketing value or longevity. However I do have a fixation for non-celebrity individuals who have a few thousand followers, because they are clearly effective at marketing in the Twitter-space.

I regularly attend a few MeetUps and last night I went to one that I’d been looking forward to for a while – a talk by Bill Boorman who has some 8,500+ followers on Twitter. Bill is quite infamous for “saying it how it is” and his social media expertise for his own company.

Fundamentally, Bill likens Twitter to a local pub, where you can hear and join in everyone’s conversation. You wouldn’t walk in and try and sell something direct (OK, forget the rose sellers for a second). And you would be quite subtle when joining a conversation.

Here were his other main points:

  1. Don’t plan too carefully; just build activity. Interestingly, I’ve heard that Facebook don’t have a strong content plan – they try not to plan too much because they prefer to be more market driven and quick to respond.
  2. Bill came to the stage wearing a T shirt with a hashtag, @billboorman and on the back, his web address. And a hat (without any branding). I’m not sure many people could get away with that (outside of San Fransisco), but his point was to stand out from the crowd and be different.
  3. Use Tweetdeck to tag specific groups
  4. Look to give advice to others, and be nice to others
  5. Make your avatar different so that you stand out in people’s timeline
  6. Be real – as you are in real life. Don’t try and have a ‘digital persona’
  7. Use tweet cloud for specific events and hash caster to follow events
  8. Google “random twitter statistics” and use those as content
  9. Use Socialbro for statistics
  10. Whilst Bill doesn’t claim to delay his tweets, he recommends tweeting first thing in the morning (7-9am), lunchtime and 4.15pm to 9pm. I.e. when people have some spare time.
  11. Tweet less than 100 characters so that your tweets can be retweeted
  12. Find Tweet chats and join in the conversation – think of the pub analogy again
  13. Be different, don’t be normal
  14. Talk to ten strangers every day
  15. Bill’s view of social media and making money: “We give away [on social media] the stuff people used to charge for, and charge for the stuff people really need.” He talked about a plumber who puts up YouTube videos on how to do plumbing, and provides contact details if you really need a professional plumber. I guess it’s the plumber’s version of freemium!
  16. Don’t read any books on social media…
  17. Do read “How to leave Twitter” though
  18. 3,000 followers makes you think you’re important, 4,000 followers makes you realise you’re not
  19. Bill’s knowledge of hash tags was very good – he was quoting specific hash tags to use for specific content
  20. Think in terms of searches – products and services should include the location, such as #london
  21. Use replyz to engage in conversations
  22. Use promoted words through pay per click, not hashtags because you’ll annoy users
  23. Brands need to be specific and engage in a conversation – think back to the pub analogy
  24. If brands do just want to have a robotic data feed, then fine, but their profile needs to indicate this and answer via another Twitter account
  25. How brands reply is the most important factor for brands
  26. Don’t auto-update between LinkedIn and Twitter (I guess this is for users who tweet more than say, 5 times a day)
  27. Use Listorious and Formulist to automatically create and update lists of users. Then set advanced rules such as ‘Who has checked in more than 3 times at a specific venue’ in FourSquare.
  28. More tools: Followerwonk and Twollow
  29. To attract mass followers, use Tweetadder
  30. Brands need to be careful of negative publicity and deal with it quickly, not just 9-5, and Bill gave an example of British Gas. He also described how tweeting whilst being made to wait on hold on the phone was a great way to get attention
  31. To get a dormant Twitter account, try to contact @Twitter

I found it interesting that it took an hour before someone asked Bill what he does for a living. I knew he was in recruitment and sort of assumed everyone knew, but his recommendations above were very generic.

Another impressive point was that Bill spoke to 45 minutes and had a break before answering questions. He then had 50 minutes of questions which is very rare at a MeetUp. I went up to him at the end of the session and said I thought 50 minutes of questions was outstanding and he answered that he only does it for the engagement, not the initial ‘How to’ part – and I think that’s a key point in social media.

I thought about Bill’s comments on the way home and will try to implement them to double my followers from 200 to 400 in the next 8 weeks and see if they are valid – and report back here. If you are a Twitter fan, you should either contact Bill on Twitter, or find out where he’s speaking.

Stinging nettles? There’s an app for that

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Although I love the outdoors, I haven’t been stung by stinging nettles for years. Until this weekend, when I went actively looking for small boxes in stinging nettles around the parks near to my home.

It’s all been part of an activity called geocaching. I’d heard about it from my niece whose Scout troop look for geocaches whenever they go camping or on a day out.

Geocaching is a simple concept – it’s a real world treasure hunt game. There are over 1.5 million caches around the world. You can go to the main website, geocaching.com, or use one of the iPhone/ Android apps and look for a cache near you. The site runs a ‘freemium’ model – you can play for free or for advanced features you need to pay a small charge.

I live in North West London and there is at least one geocache in every park near my house. There was even a cache at the end of my road – the one photographed above. Caches range from ‘micro’ size – the size of a 35mm film canister, all the way to a ‘large’ box. Inside the cache is some paper to write your name and a short message, and in the larger containers there are other objects. The rules are that you can remove an object if you replace it with an object of more value.

I’m always in favour of any activity that gets children away from the television, and part of geocaching’s success is that because there are so many places to find, it’s easy to have a spare hour on the weekend to pop out and find a cache.

There’s no policing or moderation of the system – so there’s nothing to stop you going to the website and claiming you’ve found all 1.5 million caches. But that’s missing the point – it’s a game, and the fun is really in finding the boxes more than the website components.

We found five geocaches this weekend (and couldn’t find a sixth, in the closest park to my house). It felt quite addictive and fun for all the family – including the dog who I don’t think we’ve ever walked so far. Just be careful of the stinging nettles.

Spotify Premium

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I had a new hard drive installed in my laptop this week and when I re-synced my iPhone I lost all my MP3s.

I don’t understand how Apple can produce such a great phone, with great synchronisation with a number of computers, but be so damn awful with keeping my music catalogue together. That’s my frustration over and done with.

I decided once and for all to upgrade/buy Spotify so that I can use it on my phone. I’ve used Spotify regularly on my laptop and home PC (I should enter an award for the most varied music styles in a single playlist) for ages and even before wiping my iPhone, it was frustrating only have a couple of dozen, old MP3s available on the phone.

In fact Spotify is so good that I’m considering changing our in car stereo to one that accepts a line-in (i.e. from the headphone socket in the iPhone) rather than an iPhone specific connection – to make it futureproof.

A major advantage of the iPhone app is that it downloads the music to your phone rather than streaming it – which means you can carry on listening without an Internet connection.

The one remaining issue in the house is that with the kids starting to get MP3 players of all shapes and sizes (and budgets), Spotify is only useful to my wife and I. The kids still require me to buy MP3s for their devices.

We think of music as ultra portable nowadays, but in reality, compared to records, tapes and CDs from the past, you can’t swap music as easily as you used to, when music really was social!

Spotify Freemium rebalance

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I see that Spotify is trying harder and harder to convince more subscribers to pay for the service, rather than rely on advertising income.

Tonight the new Brandon Flowers album is only available to Premium users. Spotify are [perhaps rightly so] preserving many of the advanced features and new content solely for their tenner a month subscribers.

If I worked at Spotify, I would try and poach experienced ad sales people from traditional radio stations such as Absolute or Global Radio (owners of Capital FM, Classic, XFM and others).

Clearly those stations have a ad sales business model which keeps them afloat. Those radio stations would love to have the CRM information that Spotify has at their disposal, which would further help traditional sales people.

As many people in media have been suggesting for a while, New Media companies have a lot to learn from traditional media companies – many of the business models are the same.

Micro micro payments – the future of content

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Image courtesy of Joe Shlabotnik

Last September I gave an opening speech to the English Premiership clubs discussing loyalty and the future economy of content.

On the latter subject, my personal view is that content cannot stay free for the long term. Our children will look back on the web and ask us what is was like living in a bubble of free video (iPlayer), free radio (any radio station’s website/ iPhone app), free high quality music (Spotify), free text content (over 99% of websites), free storage (YouTube, Flickr, etc.), free search (Google, etc.) – it’s all free free free. I think we will answer our children by saying “Yes, it was a pretty cheap time – companies advertised on these sites, and we thought that covered the costs” – at least, this is the public’s perception.

So what will replace this massive amount of free content and free applications?

At the Premiership event I said that in the future we will have some sort of e-wallet, and each web page that you navigate to, and each search will take fractions of a penny out of your wallet. Listening to music might cost a little more, and video might cost a little more than video. The funds from your e-wallet will be redirected in part to your ISP and a part to the content owner. A bit like local and premium rate phone numbers – some money goes to the telco provider, and some to the company who picks up the phone. My gut feel is that a regular user will spend £10-20 (in today’s money) per month on this e-wallet.

That was all last September, and this week there was an article on TechCrunch (thanks to James at Endava for pointing this out) which described a new service called Flattr, which will adopt a similar-ish model. Flattr’s model is more proactive though – the content owner needs to install a Flattr button, and the user needs to press the button for funds to go to that owner. It’s a start though.

The future – live events funding free content?

Major League Baseball team the New York Mets are suffering falling attendances, despite the attraction of their new $800 million stadium, Citi Field..

The New York Times reports that the average attendance so far this season, after 22 home matches, is 31,892, compared to 38,744 last season. The 18-per-cent drop is puts the Mets second in percentage terms in falling MLB attendances this season. The Cleveland Indians are down 30 per cent on their last year’s average, although this translates to a loss of only 6,585 fans a game, less than the Mets’ 6,852.

Bad weather and poor performances by the Mets are being blamed.

“The problem is last year the tickets were really expensive and the team stunk and that can really stick with fans for a while,” said Jon Greenberg, the executive editor of Team Marketing Report, a sports industry research company.

Greenberg said a trend of new stadiums boosting ticket sales that was evident in the 1990s had tailed away.

“Stadium fatigue sets in much faster than it did before.”

The Mets cut ticket prices by up to 20 per cent after last season – their first at Citi Field – in an effort to pre-empt the “stadium fatigue”. However its monthly report to the MLB’s commissioner’s office in March, showed ticket sales had dropped 40 per cent from the same period a year earlier.

via sportbusiness.com

With more and more content appearing free, or nearly free of charge – such as Spotify and iPlayer, there is a widespread opinion that live events will become more popular.

There are more music concerts than ever before, and these are likely to remain premium, high ticket cost (with a huge reliance on revenue from merchandise and other outlets at the venue).

However, American sport is the first report that I’ve seen which shows that even live events are being hit. This may be due to the recession last year, and this article suggests it’s also to do with team performances.

If I was a media owner distributing my content for free, this article may provide some worrying evidence of having to find yet another business model.

Warner to quit free music streaming

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I have been saying for a while that we currently are at a peak amount of receiving free content on the Internet. We currently receive free news, music, radio, TV, books and podcasts.

This is not commercially viable in the long term. The concept of always finding advertisers to fund this is too risky – it’s the continuous balance of finding an equilibrium of advertisers and content owners.

Today’s news of Warner stopping licensing of free songs on Spotify and other services should come as no surprise. Quite the contrary – we should expect this to ripple through the rest of the industry.

However I will be interested to see if Warner do allow premium Spotify subscribers access to it’s catalogue.

Maybe this is the start of the demise of the ‘Freemium’ business model.