The Fourth Generation of Internet Marketing (3) IM Marketing

I see the light of hope: this could be used to have people subscribe to newsletter.

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[+] Another way to replace email marketing

When email becomes a very unreliable communication tool, is there any effective way to distribute information besides RSS? Look into your daily life, are there any other common communication tools?

You may immediately think of Instant Messenger (IM). Yes, in this prospering Internet age, everyone has at least one IM open on his desktop. In some sense, the use of IM even has replaced email.

Just think, if you can inform your clients via MSN Messenger or Yahoo! Messenger as soon as your website has new products or new services to be released. It could be much more efficient than email or RSS.

For emails and RSS, they have to wait for people to receive them. However, if you send information through IM, a message box will pop up directly on the user's desktop. Normally, people will take a glance at the IM message that pops up while leaving email unread for a while.

In August 2006, when I was thinking hard about the alternative solution to the newsletter marketing, MSN Messenger came up to his mind very soon. Almost every white collar was using it, and the user group was pretty much the same with that of Digital Wall. I then started to look for a feasible plan.

[+] The possibility to use MSN Bot

The most awkward way is to register an MSN Messenger account and ask the newsletter subscriber to add this account into his MSN Messenger contact list. Each time the website is updated, messages with the URL of new articles will be sent to those readers.

But that will bring about several problems: 1) Obviously, the messenger contact list is going to be extremely long. I have over 140,000 readers. But what is the maximum number of contacts Microsoft allows? It is not possible there is no such a limit, isn't it? 2) It's never going to happen to send IM messages to readers manually! How much time will that costs! 3) If I send out thousands of notification messages to subscribers within a certain period of time, how could it be possible that Microsoft's servers would not block me as a spam message publisher?

Many people may know that such kind of IM has robots, so does MSN Messenger, which is called 'MSN Bot'. MSN Bot is actually a program-controlled account. You may chat with it after you add such account into your own MSN Messenger contact list.

Some MSN Bots have rich functions. For example, if you ask it an English word, it will give the translation in other language. And some other MSN Bots can do map searching, etc.

Microsoft also encourages the development of Bot. If you are interested, you can take a look at this interesting MSN Bot developing contest:

https://www.robotinvaders.com/main/Default.aspx

I see the light of hope: this could be used to have people subscribe to newsletter.

[+] Limitations by using MSN Bot

Website operators can release MSN Messenger accounts which are actually MSN Bot programs. Subscribers then add that kind of account to their MSN Messengers. Message publishing is accomplished by sending messages to everyone's IM by the program.

However, that solution is not perfect. Microsoft still blocks large amount of message publishing. Sending messages separately in separate hours may be a way to get around. However, problems still exist when the number of readers is huge, because it might be a week later when the last reader receives the message.

It then comes to my mind that, would logon notification work instead of IM message publishing? As we all know that MSN Messenger will give out notification when contacts log on. Therefore, as long as operators set up logon and logoff time schedules for the MSN Bot, subscribers will be notified automatically.

The effect is much worse than sending messages directly. Since Microsoft still has maximum limit on the number of contacts, this method is not suitable for the case of large number of subscribers. If those limitations could not be solved, this method will be restricted.

It is still possible to get around the limitations posted on the amount of MSN message publishing and the number of contacts. In fact, Microsoft has special authorized enterprises across the globe. As long as operators pay them for sending large number of messages, those limitations could be overcome. However, small websites need cheaper solutions.

[+] The twilight for IM marketing

Either developing MSN Bot or paying for sending messages is beyond the capability of ordinary website operators. At least the cost is much higher than the relatively low-cost email marketing. However, the situation is changed with the advent of Microsoft Windows Live Alerts.

This service is for the content subscription service through Windows Live Messenger (the former MSN Messenger). For example, the user will be informed by the Messenger when MSNBC news is updated.

Windows Live Alerts：http://alerts.live.com

Subscribers can set up time slots to keep from beiing disturbed by messages during work. They can also set messages to be forwarded automatically to their email boxes when they're offline. Finally, the role of IM has been shifted from a communication tool to a content publishing tool.

If you are a content provider, you can apply to become a Microsoft content publisher in order to be assigned a unique subscription URL. By simply clicking the URL, users will get into the subscription process and receive messages from you.

The instructions for how to become a content publisher can be found at: http://signup.alerts.live.com

This service is still on test. Therefore, all applications are sent to the U.S. headquarters. Processing one application needs a little time. It's not known yet whether there is any limit for the number of subscribers allowed for individual content providers.

[+] The Fourth Generation of Internet marketing: Rights in the users' hands

We can imagine that content subscription through IM will increase rapidly. We are more excited to see that Internet companies have opened such platform for website or Blog operators. IM will become the channel for the new generation of content aggregation and publishing.

If you run an eCommerce site, as long as people are willing to subscribe to your Windows Live Alerts, why not sending out discount information through this channel? Of course, it will become more competitive because every website runner can send messages to Internet users through it.

Internet marketing has evolved to its fourth generation with RSS and IM subscription as the major tools. We should keep in mind that from the first to the fourth generation, the power of choice has been gradually transferred to Internet users' hands, and that is an everlasting marketing law in the Internet age. (
2007/01/07 - By Digitalwall.com - Way to
China Internet/Telecom )

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- Today in History

Web 2.0 Finale (3) Finally blended in Web 1.0 - 2008/01/06

The Fourth Generation of Internet Marketing (3) IM Marketing - 2007/01/07

The Fourth Generation of Internet Marketing (2) RSS Tracking

"The personalized RSS Feed subscription URL" is the ultimate solution to the issue of user tracking.

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[+] The preciseness challenge for RSS subscription marketing

As a matter of fact, RSS subscription marketing is not able to track users' activities because of its open feature. Currently, most of website operators provide open RSS Feed URLs that could be obtained and added to the reader software by everyone.

The idea of one-to-one marketing, the most advocated personalized marketing in the Internet age, thus collapses because website operators are not able to identify subscribers, not mention to track and analyze their post-subscription behavior. That is the preciseness challenge for RSS subscription marketing.

Before we find solutions to that problem, let's look back at how previous Internet marketing tracks subscribers. First of all, newsletter subscribers have to leave their email addresses or register to become members. Therefore we have the basis to identify users: user name or email address.

When a website operator sends out newsletters or marketing emails, the typical way is to insert a transparent image in the email in order to track whether the user has opened this email. When the image is displayed on the user's screen, the server on the operator's end will create an access record.

The image is imperceptible since it's transparent. Actually, the user's email address or user name has already been sent back to the server at the moment when the image is displayed. Therefore, the website operator knows which user has opened this email.

After identifying who has opened this email and comparing with the user's registration information, it is not a problem at all for the website operator to obtain information such as the gender ratio of the user group, its age distribution, even previous website shopping records of the user, etc.

[+] The tracking method of traditional email marketing

In addition, the email sent out may have many links in it, which in fact may carry the reader's personal identification information such as the user's name or email address. When the reader clicks on these links, the operator will know which member has clicked on which link.

Therefore, it is completely possible to analyze which members open the marketing emails after they receive them, which links they click on and what they do on the website. The similar system can even track how many times the reader forwards the email to others.

For a user of the Internet, the above sounds horrible, doesn't it? Such things are taking place in your daily life but you are just not aware of them. However, current anti-spam mail systems are becoming smarter. They start to help you filter those images that contain tracking technologies.

At the beginning, the anti-spam mail technology is used to get rid of spam mails. But nowadays, even the most honest website operators are severely impacted. Sometimes, even the registration confirmation email or inquiry email for recovering the user's forgotten password could not be delivered, not mention those marketing emails.

RSS is an emerging way to keep in touch with users. But its anonymity bothers operators a lot. However, operators are still able to track users' reading behavior as long as they make some changes to the RSS subscription method.

The key point, which I believe, is called "personalized RSS Feed URL".

[+] Introducing "personalized RSS Feed"

You can find the typical open RSS Feed on many websites, such as:

Digital Wall (English version): http://english.digitalwall.com/rss20/rss_eng.xml

Obviously, this kind of RSS subscription website doesn't have personal identification information. When 30,000 users subscribe to the above websites through their RSS reader software, the operator cannot tell who they are.

If the URL of RSS Feed is changed to:

http://english.digitalwall.com/rss20/rss_eng.may@yahoo.com.xml

Do you notice that I added a personal identification information - email address in the RSS Feed URL? In other words, "personalized RSS Feed URL" is the ultimate solution to the issue of user tracking, that is, to issue each person a different RSS Feed.

Website operators should use the personalized RSS Feed URL instead of the open one. Those who want to become subscribers have to register as a member or leave email addresses in order to obtain the unique RSS Feed. It is up to the user to choose from email subscription or personalized RSS Feed.

Website operators might be afraid. Will that establish an obstacle to subscription? I have to point out that operators used to ask users to register membership or leave their email addresses to become subscribers. What is the difference from the personalized RSS Feed?

It's easier for the website operators who already have newsletter subscribers or members to transit from email subscription to RSS subscription. By creating a unique RSS subscription URL for each user, the operator can inform the user of this option every time when he logs in.

The subsequent analysis of users' reading behavior is similar to that of email marketing. As long as the user is identified, it is easy to perform any analysis. So far, a RSS advertising market is emerging: to insert advertisement in RSS Feed according to the user's identification information.

[+] The privacy issue

The above proposal might be rejected by fundamentalists who think that it violates the idea of RSS open message publishing. Years ago, when emails were used as spam mails for the first time, fundamentalists reacted drastically, but spam mails became part of our daily life at last.

In fact, most things prevail out of commercial demand. It has been at least seven years since website operators started to do user analysis through their email reading behavior, not mention that Amazon started very early to analyze users' shopping habits through their website surfing behavior long time ago.

Will that violate the right of users' privacy? It is the same to ask whether the email tracking technology violates the right of privacy. Now that the former has existed for such a long time, probably the latter will develop rapidly as long as there is strong commercial demand.

The difference is that basically the control is retained in readers' hand with RSS subscription. As long as readers find out that the content is not good or the advertisement is too much or even the update is too frequent, they can keep themselves from disturbance by simply unsubscribing from the reader software. This feature will constrain operators who use RSS marketing not to abuse it. (
2006/12/24 - By Digitalwall.com - Way to
China Internet/Telecom )

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Prev : The Fourth Generation of Internet Marketing (1) RSS Marketing


Next : The Fourth Generation of Internet Marketing (3) IM Marketing

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- Today in History

Web 2.0 Finale (1) An Inherent Problem Unsolved - 2007/12/23

The Fourth Generation of Internet Marketing (2) RSS Tracking - 2006/12/24

Dream of "Digital Furniture" Store - 2003/12/28

The Fourth Generation of Internet Marketing (1) RSS Marketing

Is there still any reliable way to distribute information in the disordered world of Internet?

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[+] Emails are not reliable

In a busy office, Chen is confirming with the client on the phone whether the price list has been received which is just sent by fax. Fax as an outdated technology is not so reliable. Loss of documents happens from time to time. Telephone follow-up is therefore necessary.

Meanwhile, Li, who sits next to Chen, is apologizing on the phone to the client, because he had thought the client had received the email he sent out, but obviously the client does not. The client is outraged. Li ensures that the email has already been sent out. Although feeling aggrieved, Li has to make apology.

Ms. Zheng, who sits behind, has just purchased a purse from the net. The browser shows the transaction is successfully completed, but she still has not received the confirmation email from the online shopping site. She calls the customer service, they send the email again, but she still fails to receive it.

Secretary Tao wants to subscribe to several newsletters to learn more industry knowledge. The website indicates that the registration won't be successful until she clicks the link in the confirmation email. But she does not receive it even after waiting for the entire afternoon. So, she wants to change the email address, but is not allowed to login to do so because she has not obtained the membership yet.

The company's IT manager has just sent out an email, stating that the anti-spam mail system he recently brought in performs extremely well, and saves a lot of money for the company to process spam mails. The others are going to an uproar at that, because bunches of their emails have been filtered by the system.

[+] Worries of website operators

Ironically, people who purchase anti-spam software to get rid of the increasing spam mails often find friends' emails in the spam mail box. The software is useless if the user reduces its sensitivity, because by doing so, he has to filter hundreds of spam mails by hand every day.

From the perspective of the website operator, the traditional website design is based on the principle of 'emails are going to be received'. However, now they have to reconsider the website design and additional service costs under the assumption that emails could not be received.

I used to see an shopping website teaching users how to set up the white list function in their Yahoo! email box to receive member newsletters and marketing messages from the website. The power and effect of marketing has been largely reduced by doing so, because few people will bother to set up that function.

Realizing that email as a way of Internet marketing is doomed to fade away, I have studied the ranking methodology of search engines since early 2005, and wrote three articles entitled "The Third Generation of Internet marketing: Search Engine Marketing" in April of the same year, and used the skills in those articles till now.

Improving the ranking on search engines will help websites to constantly attract visits. But that is only helpful to obtain new clients. For the old ones, email is still an important tool, but becoming increasingly ineffective. It is really worrying to see the reach rate of the newsletter keeps going down.

[+] Microsoft IE 7.0 paves the way for the prevalence of RSS

The first generation of Internet marketing is the purchase of the website banner advertisement starting from 1998. The second generation refers to the email marketing coming afterward, while the third generation is called search engine marketing. Then what else to do after all of the three approaches have been used up?

Or I should ask in this way: in such a disordered Internet, is there still any reliable way to distribute information? I used to count on the newly emerging dissemination method - RSS. My website - Digital Wall - started to provide RSS subscription in 2004. Currently, the pageview of RSS almost accounts for half of that of the website.

In spite of that, RSS is still a subscription method difficult to explain, and needs to install special reader software. It sounds difficult to expect ordinary readers or consumers to download and install certain software in order to subscribe to newsletter.

In addition, I think that the user interface of RSS is a big issue. In the instant when the visitor clicks the 'RSS' or 'XML' icon, the XML markup language pops up, and that is too overwhelming to make the subscription intuitive.

The good news is that Microsoft IE 7.0 has embedded RSS subscription function and provides more user-friendly interface and gets rid of the long strings of XML. With the gradual update of the browser version, users will no longer need to download and learn how to use additional readers.

[+] Those who can analyze RSS users will grasp business opportunities

Although the subscription procedure of RSS is not so intuitive, website operators at least do not need to write user instructions for different RSS readers, instead they can only provide the illustration for IE 7.0. Therefore, operators should be prepared with the advent of IE 7.0 as soon as possible.

It can be seen that, for website operators, RSS subscription will gradually replace email. While for users, RSS is a way to regain the right of use, because they can receive the latest messages without leaving any information on the website.

However, that brings a new problem for website operators. Before, receivers' activities could be traced by the hyperlinks embedded in the email, such as whether they kept shopping on the website, whether they were male or female, how old they were, etc.

Since RSS is based on open subscription, registered members do not need to leave any information. Therefore, operators are not able to know who the subscribers are, not mention to analyze their activities after receiving new messages. Operators are nearly uninformed, because they can only measure the result of the marketing on the basis of RSS pageview.

If any website operator could solve the issue of RSS subscriber behavior analysis regarding to Internet marketing and website operation, they will grasp huge business opportunities, because the email marketing has faded away. In a user-as-king era prompted by browsers, RSS will become the new mainstream. (
2006/12/17 - By Digitalwall.com - Way to
China Internet/Telecom )

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Prev : Great Future of Wireless Broadband (4) WiMax, 3G and 4G


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- Today in History

The Fourth Generation of Internet Marketing (1) RSS Marketing - 2006/12/17

Internet and Books (2) the Supply for Content Exceeds the Demand - 2005/12/11

VoIP (4) Dual-network Handsets Will Die of Subsidies - 2004/12/19

VoIP (3) Phone Number Is Vital - 2004/12/12

New Era of Online Advertising (2) from Exposure to Deal

In the future, a number of advertising models, including the traditional online advertising, keyword advertising and commission-based advertising, will coexist on the Internet.

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[+] Who on earth are viewing and clicking online ads?

Advertising, which, in a sense, is a joint game of the media and ad clients intending to fool consumers around, seems increasingly unable to adapt to the current time. With the rise of the interactive media led by the Internet, the say has been returned to consumers. As a result, raising the eyeballs of consumers is increasingly turning into a mission impossible.

Each time I give a lecture about online marketing, I always make a survey about the audience and ask those who have clicked any online ad within the past half year to raise their hand. There always have been very few hands raised in a large classroom. That explains why the ad click rate on portals' home page is lower than 0.1%.

Think about yourself: have you ever clicked any online ad within the past half year? Or, have you paid any serious attention to any online ad at any part of a web page, even though you never clicked it? Ask those around you the same questions.

If neither you, nor I, nor he, nor she is viewing ads, who on earth is? With my observation, I am able to provide a simple answer: "those who do view online ads are a strange group of people." Whenever I make such a conclusion, the audience would smile understandingly.

Yes, such people are born to view online ads. They have a gene inside their body to drive them to notice and click ads on web pages. Besides, advertising professionals view ads too, mostly out of job habits, instead of personal liking. Others just do not view ads, and there is no reason for that.

[+] Keyword advertising: the model that charges by results

The keyword advertising is the hope for online ads whose click rate is as low as 0.1%. This adverting model, which is Google's source of revenue, is one of the most important inventions in the history of the Internet. By linking ads with key words used by searching activities of Internet users, it raises the click rate to 5% and even higher.

The reason for the low click rate of traditional online ads is the irrelevance between the contents of ads and the web pages that the user is viewing. Channel-specific advertising (for example, ads for 3C commodities on a technology channel) might help to lock on the wanted users, but it is far less accurate than the keyword advertising.

The tide of the keyword advertising explains that the result is what ad clients really want. Brand building is very important, but whether it has to depend on, or even mainly on the Internet is another question. The building of a brand is not the accumulation of many ads displayed.

Companies which can directly satisfy that demand will win the favor of Internet users and ad clients. However, this does not mean that traditional online advertising models will disappear. They will manage to maintain a certain market share, but will not be able to stop the aggressive attacks of the keyword advertising.

According to Online Advertising Revenue Report 2005 released by the Interactive Advertising Bureau (IAB), the revenue achieved by the keyword advertising of search engines accounted for 40% of the industrial total, slight above the number of 39% in the previous year and indicating a stable trend.

[+] Turning to the channels: to pay in accordance with actual results

The most distinct feature of the keyword advertising is its click-based charging model. How much to pay for each click and where your ad will be put on the web page depends on the price you offer in an open bidding process. The higher your price is, the better the position will be.

This, however, is not exactly what ad clients want. They have never given up the idea of "pay in accordance with the number of deals resulting from the ad". Those who click the keyword ads and are led to the websites of an ad client might not do what the ad client wants them to do, such as buying products, registering as a member, and etc.

With the blood of innovation, Google is planning to cater for that call and start its trials. You might have already noticed that the banner or text ads of the FireFox browser or Google's Picasa (picture management software) are already available on many websites.

Ad clients are charged only when the software is downloaded and installed by users (who can use the service free of charge, as Google will pay the website owner). No charge for ad playing, or ad clicks-only for download and software installation.

That model can be further extended to allow charging only for products sold, or members registered or newsletter subscribed to. This is inevitably going to drive the focus of the online advertising to move from the media identity featured with exposure to the channel identity featured with real deals.

[+] Traditional online advertising is not going to be replaced completely.

This advertising model might not be suitable for some commodities, just like the keyword ads model is not suitable for every product. What can be predicted is the ad price for each deal will be higher than that for each exposure time or each click in traditional models.

As a matter of fact, there is a normal correlation between the click rate and the conversion rate (the number of clicks divided by the number of deals achieved). Both the ad client and the ad seller have something to gain. The key is whether the ad client is from an industry lucrative enough to pay the higher deal-based ad charges.

In the future, a number of advertising models, including the traditional online advertising, keyword advertising and deal-based advertising will coexist on the Internet. There's not such a thing as the best advertising model in the world, only the most suitable model for oneself. Anyhow, more options are not a bad thing for ad clients. (
2006/07/23 - By Digitalwall.com - Way to
China Internet/Telecom )

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Prev : New Era of Online Advertising (1) from Media to Channels


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- Today in History

New Landscape in China's Telecom Market (7) The Pricing of 3G Value-added Services - 2008/07/27

New Landscape in China's Telecom Market (6) Insight into 3G Price War in Taiwan - 2008/07/20

From Idea to Business (2) How to Estimate Your Income and Cost? - 2007/07/22

New Era of Online Advertising (2) from Exposure to Deal - 2006/07/23

Ultimate Mobile Device (5) Universal User Experience - 2005/07/24

Media, Community, and Blog (3) Deconstruct Blog

We can treat Blog as a "personal publishing system."

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[+] Blog is about keeping a diary online.

"Blog" can be translated to Chinese as "Wang Zhi" (literally "online journal") semantically, or "Bu Lo Ge" phonetically. In China it is also known as "Bo Ke". If we follow the semantic translation, we can know that Blog is actually about writing journals via the Internet. You can keep your diary on a website that offers Blog functions.

What to write about then? Well, you can write whatever you feel like, from petty things in daily life, thoughts about work, gourmet's reviews, to dating experience and a great many. If you feel it's a bit unorganized this way, Blog websites also provide categorization facilities to help you arrange your articles. Some of them allow you to upload photos or to choose your favorite layout.

We can treat Blog as a "personal publishing system". All major news websites have a publishing system at the backend to allow editors to publish their news articles to the webpages of the websites. Blog websites provide such function to ordinary users so that they can publish their articles on the websites too.

Once you register an account on the website providing Blog service and select the layout your desire, you can start writing your own diary. This kind of free Blog website will usually attract a lot of people to write journals on it. These many journals will then be grouped into different categories, giving a sense of tribal units, which makes "Bu Lo Ge", meaning tribes in Chinese literally, a vivid translation.

There are also paying Blog services offering sophisticated facilities, huge capacity and personalized URL's. You can have functions originally designed for large-scale news websites with affordable monthly subscription. Seeing this, I cannot but sigh with envy: I could have spared a lot of efforts should Blog have been available at the time when I was writing the program of my personal website Digitalwall.com.

In fact, Digitalwall is a kind of Blog. Although there is no such term as Blog when my websites first appeared, if you put aside the technical issue, you'll find that they are absolutely a Blog whether in terms of practice or substance.

[+] The Blog spirit echoes to the calling of the me generation

This is a time of the "me generation", and "We the Media" is very much the embodiment of the time. Yet there is a difference about Blog. With Blog, people are not only free to speak whatever their want, but their words and ideas can be "published" onto the Internet, which has become a sort of mass media, in a very inexpensive way.

In the past, without being reported by the media, there is no way that your words and thought can be known to the world. The mass media even have the right to "interpret your words" and to "garble your statement". Now you don't need to cope with these reporters and intermediaries any more. You can write whatever you want to the world.

Blog also stands for a belief about life, the essence of which "I think, I write, and I reflect upon myself". This is the purpose of keeping a diary, and there is nothing extraordinary in it. Regular writing on the Net naturally prompts one to review and introspect oneself.

The beauty of Blog is that it allows users to give responses and to create links. Readers can voice their thoughts about your articles; links can be set up to connect two different Blogs. If you refer to someone's article in yours, you can build up links between these two through standardized procedures.

Are there other forms of Blogs in addition to diaries? The answer is definitely positive. Blog is a "personal publishing system" for individuals. Some Blog websites are operated as if they are news media. They release news articles regularly through the efforts of "volunteer reporters".

Usually Blogs offer RSS subscription. Once you have RSS reader installed and the RSS feeds of your favorite Blogs configured, the reader will capture the most updated articles for you. It is very much like email newsletter subscription, except that you don't need to leave your personal information even email address.

[+] Blog meets the criterion of Quality Content

The difference between a Blog and a traditional online forum is that the latter is similar to a "public hall" where anyone can come and talk. On the other hand, a Blog is more like "a private room"; you are welcome to pay a visit, and maybe give some opinions on the decor.

Compared with the casual chatting, small talking or even spamming in online char rooms or forums, the content on Blogs is at least the efforts of Bloggers, no matter they are good in style or not. The subjects of Blogs are of a wide variety; so that readers can easily find some things that they have feeling for. As it is "a private room" of the Blogger, s/he will surely pay more attention to writing.

Maybe we can say that the development of the Internet during these years has led to the maturation of standardization of technology and the decrease in bandwidth and storage cost, which has enabled individuals to create their own Internet media. These small websites may not be as fancy as big Internet media run by deep pockets, yet they are complete in every sense.

For Blog service providers, the whole websites were made possible by joint efforts, the content is finally qualified as attractive in some way. Yet there are still obstacles lying ahead. There are still costs of bandwidth, machines and equipment. Are they to be covered by selling advertisements or by subscriptions? These problems remain to be solved. (
2005/03/20 - By Digitalwall.com - Way to
China Internet/Telecom )

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Prev : Media, Community, and Blog (2) The Dream of New Media


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- Today in History

Great Changes in Wireless Internet Industry (3) Nokia's Strategy - 2008/03/23

Predictions on China Internet Market (5) Search Engines - 2006/03/26

Media, Community, and Blog (4) Production-Marketing Relations - 2005/03/27

Media, Community, and Blog (3) Deconstruct Blog - 2005/03/20

Stop Internet Marketing (3) All Determination; No Distribution - 2004/03/21

3G Time Comes (3) SMS, Email and MMS - 2003/03/23

Media, Community, and Blog (1) The Beginning of the Story

If you think this is something new, then you are very wrong.

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[+] Is it a new breed of media or same old stuff in new packaging?

One day, I saw a Chinese ID on MSN. The literal translation of that ID would be "new breed media." Out of curiosity, I just could not but ask where it came from, and found out that it was the Chinese title for a newly published English book, "We the Media."

My response was a bit cynical. I said to him that it sounded like some new breed of bubble. My friend, the ID owner, is also a forerunner in the Internet business for some eight years. His only reply to my sarcasm was a burst of laughers.

For those who haven't gone through the complete journey from boom to burst to boomlet of the Internet industry, they may not be able to understand how we daring Internet vanguards feel. The big dream of new media, power from the grassroots, the power of decentralization to resist against traditional media domination, media of and by the people, and a more just society….

If you think the trend of "We the Media" (some say "civil media" or "republic media") headed by Blog is a completely new idea, then I'll need to beg you to forgive my bluntness.

I say, whatever is in your mind had been in our minds before. Though we might not always find the answers, but the sharing of experience may help you avoid detours and save some time in groping your way out. So I would like bring up the history again here.

[+] Talking about history

In 1993 when the Internet was just to make an appearance on campus in Taiwan, I was writing web pages using HTML. Back then only a couple of students at my school had an email account. In 1996, there was the book "Megamedia Shakeout", which foretold the massive impacts of digital media on the telecommunications and media industries. I took it as my bible and read it over and over.

In 1998, we saw the rise of the portals, which had made quite a few college students young entrepreneurs. This new business, which claimed to be prospective new medium surviving on online advertising revenue, never spent a dime on hiring its own journalists. All the news content was transplanted from traditional media, or we could say, second-hand content.

In 1999, we saw the emergence of online communities. These website operators were thinking that, since content provision was expensive, why didn't we let the online users to take care of it? That was why we saw the appearance of a vast quantity of forums, personal newsletters, and communities composed of schoolmates or people sharing common interests. The website operators then turned to see themselves as platform providers.

In 2000, there was the closing down of the first pure Internet newspaper in Taiwan "Tomorrow Times," which hired a large number of in-house journalists to produce its own news content only for the Net. On hearing the news, I was so upset that I put on one big Chinese character of the meaning "morning" on the homepage of my website "digitalwall.com," with white text on black background, a classic color design used for funeral affairs in ethnic Chinese societies.

In 2001, the bust of Internet bobble continued to give hard time to the industry. Portals found out that it was impossible to survive only on advertising revenue. Then we saw Yahoo! in the U.S. which took the lead to declare that it would bring down the ratio of revenue from advertising and strive to create revenue streams other than from advertising. Some wondered what kind of media company it is if it does not need to rely on advertising revenue?

In 2003, Microsoft announced the closure of MSN chatting room worldwide, with the reason that it was close to impossible to manage the unchecked spreading of pornographic messages. Well, anyone who had some idea about what's going on knew that it was because running an online community was expensive in terms of bandwidth cost. Moreover, it generated the least advertising revenue (anyone who's engaged in chatting would not care a bit about advertisements.) Porn was but an excuse; the real purpose was to drive the cost down.

In 2003, the online advertising market revived with strong stamina, but there was no one in the business who would like to rely solely on advertising revenue any more. Even the newspapers which suffered the most from the rise of the revolutionary Internet, their Internet subsidiaries had to explore additional income pipelines as well, such as to sell something online, offer ringtones or pictures for download in mobile phone.

In 2004, the emergence of Blog stirred yet another round of discussions on the possibilities of new media, which is why we saw the publication of the book "We the Media." We were not surprised to find that the Blog wave started from the campus, and that in the beginning the most enthusiastic Bloggers were students. Reporters thronged to interview these rising stars....

[+] The nature of media can never change

Now you may be able to understand why I teased my friend about the new breed of bubble. I absolutely agree with every one of you that the forms of media are changing, but I have very big questions with the saying that "the nature of media is changing."

There is no change in the nature of media. A media company, as any other business under the capitalist system, is constantly under the pressure to make profits. This does not change. You might have the ambition to start a revolution in the beginning, but when examined by investors in every detail, you would be forced to do quite a few things that you didn't want to.

The short review of history above outlines the development of Internet media and online communities, with one single point highlighted: it costs too much to produce content exclusively for the Internet, which makes it very unattractive. The cheapest way is to let Internet users produce the content. Blog, to a certain extent, coincides with this idea.

Here we see three issues. Firstly, why is the cost of pure Internet content so high? I will give an explanation to this question that nobody ever tries to answer. Secondly, what about the quality of the content generated spontaneously by Internet users? Lastly, why is it unlikely to support an Internet media company solely by online advertising revenue?

I will explore the nature of Internet media from these three dimensions, and at the end talk about the possible appearance of the currently so-called new media that may be revealed after the investigation. I would like to see the prosperity of Blog, but if you think this is something new, then you are very wrong. (
2005/03/06 - By Digitalwall.com - Way to
China Internet/Telecom )

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- Today in History

Great Changes in Wireless Internet Industry (2) Yahoo!'s Strategy - 2008/03/09

Great Changes in Wireless Internet Industry (1) Google's Strategy - 2008/03/02

Predictions on China Internet Market (2) Subscriber Number Is King - 2006/03/05

Media, Community, and Blog (1) The Beginning of the Story - 2005/03/06

Stop Internet Marketing (1) All Market; No Marketing - 2004/03/07

3G Time Comes (1) What Is 3G? - 2003/03/09

A Word of Advice for Small Online Stores

Trust me, you don’t need password protected membership, shopping cart, or newsletter for your site.

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[+] Don't take things for granted, please

With the re-emergence of eCommerce, many people find it a temping idea to set up a website to do business. To take advantage of this market demand, many system vendors have in store all-around eCommerce system, a.k.a. online store solution, which instantly becomes the choice for many as the cost is highly affordable.

Systems of this sort often come with such three features as newsletter, shopping cart, and online payment, whose presence is, obviously, for the shopping convenience of consumers. Behind the scenes, these three customer-friendly services correspond to three website management functions: membership management system, merchandise management system, plus online credit card payment system.

These three sets of services are must-haves for many beginners of online store operations. So much so that new comers order these three functions by reflex. So much so that system vendors have had these functions packaged into a ready-made item. It makes perfect sense. After all, who are we to challenge what world-renowned eCommerce companies have been doing successfully for quite a while. After all, it's only natural to copy.

What slipped the minds of these smaller online stores is that size matters, so does market position, when it comes to website designs. What works just fine with large websites like Yahoo! and Amazon does not always suit smaller ones.

For example, has it ever hit you why we need to provide an ID and a password to our customer when we sell stuff on the Net? If it has, do you know the answer to this question? If you don't, what makes you think your website needs them?

[+] Smaller online stores should give up ID and passwords

With accounts, login names, and passwords comes the requirement that consumers must register for membership before they can shop in online stores. This means consumers must take time to fill in details about their gender, age, income or even social security number. The question is: why are these hassles impossible in the real world but indispensable in the virtual one?

Has it ever occurred to you that many consumers go on to other online store just because they want no part in the filling-out process on yours? How many who managed to go through the process forgot their ID and password in their next visit and were shut out?

For large online stores like Yahoo!, whose services are aplenty, it makes much more sense to required mandatory registration because people re-visit the website a lot so that it is less likely for the vital info to slip their minds. That is only the kind of convenience that Yahoo and its likes offer and the brand image that they project can make all the intolerables somewhat endurable.

As a stark contrast, there is no way smaller online stores can offer those perks to justify their obsession with ID/passwords. Since hits are mostly flukes, there is no predicting when this particular consumer will come again. If he/she returns, say, six months later, I guarantee he will have forgotten all about his ID and password.

[+] What good are the ID and password

For B2C eCommerce website runners, IDs and passwords are what they need to identify customers on the Net. By tracking the same ID/password combination, online store owners will be able to analyze the combination holder's buying behavior. That understanding, in turn, helps runners decide what products to recommend.

For consumers, registration serves the sole purpose of not having to fill-in personal data every time one log onto an online store.

However, small online stores would be risking driving customers away every time they require registration of web surfers knocking on their doors. Hence the question, how can an online store balance its own need to keep track of consumer behavioral pattern and the convenience of a registration-free shopping environment for buyers? That's a question we should all think about.

[+] Ill-designed shopping cart feature

The one who invented the online shopping cart function must have been a genius, because he took advantage of the easy-to-grasp notion of a shopping cart, which works just as well in the virtual world of Internet as in the physical world. Those who have difficulty figuring it out right off the bat should pay the nearest clinic a visit.

Big or small, most current online stores are featuring ill-designed shopping cart functionality. Online shoppers will find that one has no instant on-screen access to the contents of one virtual cart. You must click on "check cart" link icon to find out.

That click will lead you to a new webpage on which the contents of your shopping cart will be shown. After that information, you will be presented with a choice between checking out or continue shopping. With the former, it is clear what it means. But with the latter, what does it really mean to "continue shopping" ? What is the next webpage if I go for this option? Back to the previous product page or to the homepage?

That's not how it works in the real world. In the real world, you get to see what's inside your cart any time you feel like it, down to every second. If that is any indication, a desirable virtual shopping cart should be able to show cart contents and products on display on every webpage at all times, instead of requiring users to jump between different webpages.

[+] What are newsletters for, exactly?

Many a small-fry online stores publish newsletters, hoping that those who don't buy will at least subscribe to the newsletters. The subscription will leave a trail that online stores can retrace by, say, sending promotion e-mail. But that's only wishful-thinking, considering that oftentimes the websites are so small that nobody even bothers to subscribe to their newsletters. This never fails to empty a good bowl of icy water all over whoever produces those newsletters.

Come to think of it. If you'd like your newsletter to enjoy a decent number of subscriptions, you might want to publish it on other larger website. That makes much better sense, doesn't it? After all, when few people visit a website, it's only natural that fewer will subscribe to publication on it. And that brings us back to the fundamental question of why does an online shopping owner need to publish a newsletter?

The above are three main frequently made mistakes on the part of small and relatively small online stores and my advice to them. For those who are set to enter eCommerce, remember this: imitation of past success in the ignorance of why your predecessors succeeded can be risky; innovation may not always pay off, but when it does, it does big-time. (
2004/11/14 - By Digitalwall.com - Way to
China Internet/Telecom )

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- Today in History

Mobile TV Market (1) Cell Phone plus TV, the Dream of Everybody - 2007/11/18

Great Future of Wireless Broadband (2) Public WiFi is Not Enough - 2006/11/19

Great Future of Wireless Broadband (1) Living in the WiFi City - 2006/11/12

Google's Choice (1) Lessons for Portals - 2005/11/13

A Word of Advice for Small Online Stores - 2004/11/14

Three Musts of Digital Content Biz (4) Pricing by Consumers' Budget

The essence of digital content business is to turn fickle income into a stable one.

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When a certain type of digital content is finally equipped with three musts of digital content business that are the monthly fees, the community, and the real-time connection, most clients will choose to pay a monthly fee, but that doesn't mean that a company is denied the options of a multitude of pricing strategies.

The most vivid example is online game. At this point most gamers pay US$10-12 for a monthly fee card to store value in and play within 30 days of depositing of value. This makes more sense to hard-core gamers who play the game as frequently as they can, usually daily.

For less addicted players, they have the option of paying US$5 for a card carrying 150 points of playing rights. For every entry of the game, 20 points will be deducted for the right to stay logged on for one day. Consumers will do the math. For a player who habitually logs on 18 days a month, buying a monthly fee card is the better deal.

By providing these two different ways of paying for log-ons, game companies have proposed the distinction between frequent gamers and less frequent ones and treat them accordingly. Frequent players are credited with guaranteeing constant income for game companies and are therefore rewarded with lower fees than that of less frequent players.

This is the beauty of the digital content business. It used to be that game companies needed to develop standalone game one after another and have then packaged in a box and sold on the market. As there was telling a particular game would be a hit or not before launching, game companies were subject to very unstable inflow of revenues. Here is where new online game business can come to their aid. That is, the whole point of converting to digital content is that such business can help induce a periodic, say monthly, cash in-flow.

This is an idea that must sink in for the digital content business to make sense. By selling digital music song by song and digital publications book by book, even digital content business can not bring in stable and sustainable income. Therefore, digital content operators must endeavor to increase the number of monthly subscriptions so that they can rake in monthly income the way telcos do.

But for those who aren't willing to pay a periodic fee, we should have something for them. Take the IT home newsletter from the previous article for example. For people who are only interested in certain standalone articles and won't pay US$50 for an extended subscription, IT Home newsletter service offers them the option of calling a number (not toll-free) to get a temporary set of account and password, with which one can log in to read one article. The phone bill will cost you about US$ one cent per minute. To read a second article, of course, you'll have to dial again.

As far as content producers are concerned, all the production cost are calculated on the basis of a book, a song, a movie, an article, a speech, so on and so forth. This is in stark contrast with consumers' demand to be charged by the month. How can this difference be reconciled?

To locate the answer, we must look into the value chain that threads up the entire digital content industry. As illustrated below, the answer to the problem is division of labor. That is, the role of content producer and that of content distributor should be assumed by separate enterprises.

As indicated by the illustration above, an Internet book renter can charge a monthly fee of US$10 or so for unlimited access to its book collection. Every time a book is ordered and read, the renter will pay about US$30 cents to the author or the publisher. By adopting this division of labor, the issues of charging the consumers and rewarding the producers can at gotten around at the same time.

Even so, websites might be worried that a system that grants free access to all the books all the time by charging only US$10 a month might leave the business vulnerable to consumers who set his heart on taking advantage of the website. But let's now forget that there are only 24 hours in a day. How many books do you suppose one can read in a month?

The monthly fee of US$10 is but an assumption of mine. Websites in their real operations have the liberty of setting up price they find reasonable. But this liberty is as much a curse as it is a blessing for such websites, because if one charges too much, consumers would find it too expensive and won't come, but if one charges too less websites will not be able to profit as planned from the business. To find the right price, there are a number of strategies.

As illustrated above, the rates are one book for US$4 and unlimited access to the entire book collection for US$10 in this particular instance. However US$10 a month on books might pose as a burden for many. That's when US$6-7 for two books of choice comes in as such rate is in the midst of two extremes and should serve as a good compromise.

The figures here are but examples. They are to show that when setting prices for digital contents, we need to first make out the target price range on the basis of consumers' average spending on the commodity. Also, we should help ourselves to some distinction of users of varying frequencies. Such strategy can be of use to operations of other digital contents than eBooks.

The introduction of monthly payment and real-time connection can help us break the chains of selling containers but it also sets us up for the crisis of price war. Image a competing eBook rental service charges only US$8 a month when it sees you charge US$10. Once such price war begins, it will not stop until people get hurt.

At a time like this, let's not forget that once digital content business adopts the monthly payment model, its success hinges upon maintaining long-term relationship with its subscribers. That is, how can the website make consumers stick around in the fact of price competition by peers? To do that, website operators must really put their hearts to their businesses. More importantly, they must resort to the force of community to make consumers stay.

Besides, the uniqueness of the digital contents is also a key. That is, even TV news broadcasters know that nothing beats a scoop, an exclusive piece of news. The same applies to digital content business. How can I give what other can't? How can I give the same thing faster than other? These are the things that should be on the mind of digital content sellers.

Post Script: This article uses eBook as an example. But the bottleneck of eBook operations lie not in the pricing but in the fact that PC monitors have too low a resolution to serve as an appropriate platform for an extended time of reading. That is what results in its low market acceptance. But we won't touch upon that issue here. (
2004/10/03 - By Digitalwall.com - Way to
China Internet/Telecom )

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- Today in History

The Web 2.0 Revolution (6) Struggle of the Press Industry - 2006/10/08

It All Boils Down to Brand Names - 2005/10/09

Crime and Punishment of P2P (2) Fire of Greed - 2005/10/02

Three Musts of Digital Content Biz (4) Pricing by Consumers' Budget - 2004/10/03

Corporate Website a Handful (2) Division of Labor How? - 2003/10/05

Three Musts of Digital Content Biz (2) Stop Selling "Containers"

No business beats printing bills to collect fees at set internals.

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In the digital content industry, PC game companies are among the first to stop selling the "containers," realizing what the Internet is all about. Earlier on, PC game companies made and sold games for playing on a standalone PC. That was a time when consumers got carton-packaged games, had the game installed, and played it by themselves at home.

Like I said, it could cost quite a lot to dispatch the containers through the retail network. A game software could thus easily cost up to US$30 or more, a price pretty daunting to students that made up the bulk of game consumers. This then gave rise to an army of pirated softwares circulating on campus for students to "share."

In the online game era, a software disc sells for only a tad more than US$1, meaning the game company practically gives away the disc free of charge as the price barely covers the costs of distribution and packaging. But the disc contains only software for consumers to install at home. To play, they must pay for connection to the game server by purchasing stored-value card or a monthly-fee card.

Since emergence of this business model, piracy has been snuffed out, as in this case, the purchase of the packaged game discs marks not the end of a transaction but the beginning of what should be an extended span of stable monthly fee inflow. Such customer relation can go a long way in helping pay for game development and content updates.

In fact, the new online game business model is a picture-perfect example of the convergence of the three musts of successful digital content business, which are a monthly fee, a community, and a real-time connection. The monthly fee helps companies rid themselves of the habit of selling containers; the existence of a community helps make players stick around, and the real-time connection helps consumers get over the obsession of tangible ownership.

Among other examples of success, Global Chinese Competitiveness Foundation (GCCF), founded by Dr. Zi-yi Shi, specializes in the provision of corporate management know-how to newsletter subscribers who pay an annual fee of US$80 or so for the right to search and read from a pool of over 10,000 continuously updating articles. This service has been in existence for over four years.

As to the question of whether newsletter makes a profitable business, many creative attempts have been made to find out. It'd be hard to argue against the reasoning that if a newspaper can be sold for a price, there is no reason why newsletters can't. However, any one who has tried would tell you that it's really difficult, if not impossible, to profit from sales of newsletter, especially when you try to sell them on a copy-by-copy basis.

Just imagine. If GCCE had attached a tag price to every single digital copy of newsletter, as in US$3 for a copy of newsletter on the topic of "six-sigma" and another US$3 for a copy of newsletter on "paradigm of leadership", you do the math, this business would not have gotten this far.

Another case in point is the IT Home newsletter that goes back a long way in Taiwan. Previously known as PC Home newsletter, IT Home newsletter's subscriptions hit 380k at one point before tapering off. What made the difference was the presence and absence of charge.

Following the traditional way of newspapers, IT Home newsletter should have been charging a daily fee the way daily newspaper charges US$30 cents a copy. But IT Home knew better and charged an annual fee of some US$50, which guaranteed daily delivery of newsletter to the subscriber's appointed e-mail account.

The annual-fee strategy proved a success as IT Home newsletter broke even in 2001. Other than the annual fees, IT Home newsletter also profited a great deal from leasing out ad spaces. IT Home newsletter's prevail corroborates my forecast five years ago. That is, I have foreseen that only newsletters that charge for reading can only boast ad spaces that are valuable. The rationale is simple. Only when the viewers are paying to read will advertisement clients take this media seriously.

Can news stories be sold on the Net for a price? If past experiences are any guide, the answer is yes. In 2001, UDN.com, a website maintained by a widely-circulated newspaper United Daily in Taiwan, launched a pay-to-use database service that provides access to back-number newspaper stories for an annual fee of some US$70. For that much money, subscribers can try your luck at finding reports and photos that might be of interest to you during the past 15 years in Taiwan.

What most consumers are not aware of is that while a newspaper contains many stories, there is inherent logic as to how these stories are arranged and picked as headlines. That is, a newspaper in print form is an integrated existence that can not be randomly.

These stories, once close-knit on conventional paper carrier, have to be broken apart on the Internet. When stories concerning earthquake during the past 15 years are retrieved from the UDNdata.com, they all stand independent of the daily edition of newspaper to which they originally belonged.

Given this nature of digitized existence of news stories, charging an annual or a monthly fee is the only plausible option for digital news newsletter business. Since consumers are looking after a standalone story instead of a whole digital copy of newspaper which contains many other stories that he/she doesn't want, selling an entire digitized newspaper to him/her would be out of the question.

The honors of pioneering in the field of pay-to-read digital magazine in Taiwan goes to cite Publishing's electronic magazine publishing net, which works by digitizing contents of paper-based magazines and having consumers pay to download these digital contents to read via reader software.

As these digital magazines are merely intangible copies of the real magazines, consumers are therefore offered the options of buying a whole magazines' worth of contents or subscribing to the digital magazine service for six months during which time one can search the texts and make personal notes on the virtual magazines, something not allowed by reading the paper-based magazines. The one thing that these various digital magazines have in common with their real-world twins, besides their variety, is that they cost about the same. That is, just because it weighs nothing does not mean that it costs nothing.

Interestingly, the electronic magazine publishing net also sells back-number magazines. Like in the real world, these outdated digital magazines also come in lower prices than the latest edition. I must point out that the whole idea of selling back-number magazines on the Net is a bit ridiculous if your memory of what I mentioned earlier is still fresh, because there is no reason why the news stories printed and stapled together as a magazine in the world still need to remain in one another's company now that they do not take up physical space any more, unless the seller is still bound by the belief in containers.

Something that also should not hold back digital magazine sellers is inventory. The paper-based magazines can take up a lot of space in the warehouse if they remain unsold till the end of the month. That's why sellers sometimes go on sales to clear them out in cheaper price. But in the case of digital magazines, the hassle of inventory simply does not exist if you ask for one. Given that, the thought of selling back-number magazines, at a lower price, makes little sense.

The reality that there is a demand for old magazines is due in large part to the fact that readers need access to one of the articles in a particular issue of a magazine that he or she missed. If this is true, then forcing people to buy the whole thing, especially a digital one, is undesirable, even if there is a discount. The sales of past issues of magazines, if necessary, should consider having the contents broken down into individual articles and then regrouped into one big database to which the access will be charged for a fee.

Old-school content businesses relied so long and so hard on selling via such hardware as paper and compact discs as content carriers that it never occurred to them that they had the option of dividing content into smaller units for sales. They have been in the company of the hardware, which can't be divided and cost a price to make and transport, for too long, that they treat content the same way one the Net.

If the aforementioned examples have taught us anything, it's that digital content sellers should give up the mentality that their products must be sold packaged in a "box" or "container." Sellers of any type of digital content, music, movie, book, course, you name it, must help themselves to the freedom of Internet, and the sooner the better. (
2004/09/19 - By Digitalwall.com - Way to
China Internet/Telecom )

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- Today in History

The Next Step for Web 2.0 (3) Collective Will Is the Cornerstone of Everything - 2007/09/16

The Web 2.0 Revolution (4) the Google Paradigm - 2006/09/17

The Web 2.0 Revolution (3) Advertising Revenue is Not Enough - 2006/09/10

Envisioning China's 3G Market (3) Systems & Markets - 2005/09/11

Three Musts of Digital Content Biz (2) Stop Selling "Containers" - 2004/09/19

Three Musts of Digital Content Biz (1) Content is Cheap - 2004/09/12

Stop Internet Marketing (2) All Action; No Reaction

Consumers are jaded on or off the Internet.

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Stimulus, reaction; stimulus, reaction... This description should not find you baffled if you knew that it is the traditional Internet marketing I am trying to depict. This simply is how consumers have been treated for a long while.

Let me elaborate on how consumers get impatient and finally jaded with this seemingly unending process of stimulation and reaction, a process that has seen the Internet read and treated as a medium and a marketing channel for at least the past five years. This, nevertheless, is an approach that has been survived by the newest expectations of Internet marketing.

In Taiwan, the year 1998 marked the roughly simultaneous establishment of five major commercial portal sites as well as a number of mid-size content websites that might be smaller yet collaborated to form an advertising network. Online advertising, as a concept, has since been commercialized, meaning any salesperson would be able to show you the price list of Internet banner ads any minute now.

Earlier on, the advertising banners posted on portal sites could register a click rate of at least 10%, meaning that out of every 100 persons who laid eye on that page, ten would actually click on the ad. Some ads with more sensational copywriting or more alluring gifts might even make it above 20%.

These click rates, however, proved to be short-lived as they dropped to less than 2% within one short year and then to about 1% after another. The hit rates thrived and then tapered off for the simple fact that Internet ad's attraction wore off as time went by. After all, the initial attraction stemmed from the novelty of the Internet as a never-before-seen media, not from the ad content itself.

Starting 1999, the free newsletter service as a power ad tool began to gather attention, as eCommerce website owners found that ads inserted into newsletters got more click-ins than website banners and were capable of achieving a click rate of some 10%. Better, these inserts are at eCommerce websites' liberty to be sent to consumers, making them a more effective promotional tool.

In just one short year, however, this figure has fallen back down for the same reason. That's when the eCommerce website owners found that they must introduce database marketing to differentiate between newsletter subscribers that belong to different demographic categories along the lines of age, gender, and income, and then send ads of different contents or styles accordingly, to improve click rates.

Such strategy has given rise to eDM. Due to the fact that portal sites come with a large number of members, however, even the highest level of precision in data analysis, cross reference, and client targeting could not revive click rates to above the 10% mark.

Entering 2003, when the SARS outbreak pushed up concurrent Internet user count, people suddenly picked up the habit of shopping online and more people realized that they could start a small business for extra income. The bad news, however, was that with people of this mentality growing in numbers, junk mail became an almost intolerable nuisance to many.

I myself have an e-mail account that I have used for seven years. With this e-mail account, I have purchased plane tickets, handsets, books, and movie tickets. Every week or month, like a clock that does not need new batteries, eCommerce websites I have patronized mail me newsletters, either to send regards or messages of discounts.

As time goes by, I have lost track of the things I've bought over the Net and the newsletters could well have inundated my place just as the owl mail flooded the house of Mr. Dursley in the first installment of Harry Potter franchise were it not for the fact that all of these commercial prints existed formless.

It turns out that every eCommerce website thinks it a good idea to prompt me to buy more by sending me newsletters; worse, I never missed any of this junk mail given that this e-mail account has been there forever.

Newsletters of this sort come in every day like there is no tomorrow. In fact, it has gotten to a point where I have to routinely delete over 500 e-mails tagged "unable to handle" manually, and by routinely I mean every single day. Here I am talking about a huge chunk of mail mass that comprises junk mail, eDM from eCommerce websites, and free newsletters whose sheer number snuffs any possibility of me reading them.

What I am experiencing is a critical phase where consumers have started to feel numb to stimulation. That is, a lot of these e-mails are getting are blown off as useless and go straight from inbox to trash box. We'd be pushing it to claim that this should not be happening. We must realize that "online" marketing is only as effective as the marketing itself can be, despite all the hype and fancy names that Internet marketing heaps onto itself.

The old-school direct marketing, defined by acquisition of a list of target clients and then the mailing of ads right to their mailboxes, has averaged a return ratio of some 2%; by going digital, to one's dismay, the improvement of the ratio is hardly noticeable, if any.

Not in the least being scornful of Internet marketing, I am here simply trying to shed light on the fact that in recently years, when eCommerce has been making its second comeback, many website owners are actually in the thick of eCommerce for the first time and have been innocently buying all the traditions that have been passed down during the past five years. What they fail to realize is that now is a different time and age.

I dubbed this a "blind faith" in the Internet. A lot of people making their first attempt at eCommerce scamper to order newsletter, community, shopping cart, and credit card payment system features. What they fail to reflect on is the question of whether they really need these and whether these functions will give them what they want.

Last but not least: do you really need a website to be in the "eCommerce"?

Advertising or marketing based on the formula of stimulus-reaction will ultimately fall on its face. In fact, it has, signaling that it's high time that one parted with these marketing gimmicks and looked for redemption in brand names. As a pity for most and a bliss for a wise few, this reality hasn't sunk in for many out there. (
2004/03/14 - By Digitalwall.com - Way to
China Internet/Telecom )

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- Today in History

Predictions on China Internet Market (4) Job, Education & Games - 2006/03/19

Predictions on China Internet Market (3) Online News & Blog - 2006/03/12

Media, Community, and Blog (2) The Dream of New Media - 2005/03/13

Stop Internet Marketing (2) All Action; No Reaction - 2004/03/14

3G Time Comes (2) Mobile Internet Is Not the Killer Application - 2003/03/16

Stop Internet Marketing (1) All Market; No Marketing

A marketing that hails advertising but turns a blind eye to building of distribution channels is one-legged. It simply doesn’t get very far.

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Just the other day, a friend of mine forwarded me a letter, which told of a seminar on Internet marketing. The lineup of the lecturers seemed quite impressive, with many of them having been long known as experts on Internet marketing. Some names were familiar and I could tell that the initial involvement of some in Internet Marketing could go back five or six good years.

The curriculum outline, however, told of a different story, as it sadly struck me that the discussion of Internet marketing as a supposedly very important subject has managed to come up with very little new stuff in a span of five to six years. That is, people remain hung up on such matters as how to set up websites, how many different types of Internet advertising there are, how to buy ads more effectively, how to compile a list of potential customers through promotional activities, how to induce forwards, and how to keep track of newsletter subscription and penetration.

Granted, these bits of practical information can prove essential to those who want to plunge into Internet marketing right away since they would want to know how well their newsletter ads would work out and whether it is a good idea to play some interactive game with Internet surfers to collect some names.

Despite these considerations, the reality remains that these courses on Internet marketing only deal with the issues of contacting target clients on the Internet, communicating with them and keeping track of them. Interestingly, these issues are not unique to Internet marketing. That is, one gets to ponder on all these questions when he buys a TV ad slot, since the TV ad agent, too, will let you in on the effectiveness of the TV ad through market research.

What, then, is Internet marketing? Stripped down, Internet marketing is just marketing. Having "Internet" installed in front as a modifier doesn't really say anything except that this particular type of marketing takes place on the Internet. It means as much, or rather, as little as "TV marketing" or "newspaper marketing," if there were really such terms.

We must then revisit the core of marketing. That is, marketing can be broken down into combinations of STP and 4Ps. STP, to begin with, are the initials of Segmentation, Targeting and Positioning, while the four Ps stand for products, prices, places (outlets, distribution channels), and promotions.

Let me be very clear about one thing. By giving you these jargon terms, I am not showing off my knowledge of marketing 101, since these bits of information are to be found in books for anyone willing to make a small effort. What I am trying to say, really, is that I am disappointed to find veteran Internet professionals got so hung up on the "Internet" part that they haven't even covered the basic marketing know-how.

Segmentation, to begin with, can be done using such standards as age, gender, presence/absence of kids, and whether the targeted consumers are in the habit of using skin-care products, to name just a few. That is, one who aspires to sell skin care products on the Internet must choose males or females to be one's target clients. That, my friend, would be segmentation at work.

Then, we must proceed to locating the target market. That is, once the potential skin-care product users have been segmented into such groups as males, females, teenage students, and so on, you might then decide to focus your marketing offense on students as people their age supposedly use the Internet most frequently and influence of the Internet supposedly rubs off on them most effectively.

Later on one might find this group of consumers drawn to effective yet rather cheap products as market research on the Internet shows that these people spend quite some time yet not much money on the Net. With this knowledge, it makes sense for the budding eCommerce website to position itself as a "price breaker."

As such, one might start out selling renowned brand-name products at sub-par prices to gain a foothold. To this end, in turn, one must find ways to source inventories at low costs to produce enough force of price competition. Naturally, the best way to do that is buy in large quantities and sell on slim margins.

With the profit model set come the tasks of picking products that are suitable for sales on the Internet, setting prices that are acceptable for the targeted consuming populations, and finally, deciding through what to have these products sold. As for that last question, one can usually choose among the options of setting up one's own website, registering with an auction website, and setting itself up as a supplier to some portal site and having them do the selling for you.

Such considerations, however, have nothing to do with whether you plan on setting up your store online or offline. Whether you are basing your store along a business street, inside a department, or hawking your stuff squatting on the ground, you will all go through the identical set of considerations. That is, where you can best meet your targeted consumers and how much it costs to maintain one's business model of choice in terms of distribution, rent, and merchandise.

Once these elements are in order, one should then proceed with promotions. For instances, one can have product A and product B sold bundled to prod sales or one can offer a small sample of product D to buyers of product C in case consumers might find product D equally intriguing.

On thing especially noteworthy about the Internet is its ability to carry real-time interaction. That is, whatever your product mix is, you can now very soon how consumers feel about it and adapt/adjust immediately. After all, product mix welcomed in the bricks-and-mortar outlets is not necessarily hip on the Internet. This is when experience must come into play.

The very last in the long list of an eCommerce website owner's concerns should be through what Internet advertising activities to let consumers in on the fact that you have started a new business, how to fathom the effectiveness of these ads, how to manage your website's newsletter, and how to go about managing your clients so that they will become regulars.

By enlisting a product that I am not particularly familiar as an example, as I did above, I was simply trying to demonstrate a point on Internet marketing. That is, Internet marketing is little different from marketing you've always known. Therefore, there is no need to be overwhelmed by fancy wording in Internet ads or by the sophistication embodied by the newsletter system.

The old-school Internet marketing sees the Internet as a media and a media only. That is why people back then concentrated so much on Internet advertising and seemed blind to the fact that the Internet is also a distribution channel, and indeed, such tilting in emphasis on two equally important halves of eCommerce has proved to be unsustainable. (
2004/03/07 - By Digitalwall.com - Way to
China Internet/Telecom )

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- Today in History

Great Changes in Wireless Internet Industry (2) Yahoo!'s Strategy - 2008/03/09

Great Changes in Wireless Internet Industry (1) Google's Strategy - 2008/03/02

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Stop Internet Marketing (1) All Market; No Marketing - 2004/03/07

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