Disqus - Latest Comments for acfou

Re: Facebook Ads Perform Half as Well as Regular Banner Ads [STATS]

acfou — Tue, 01 Feb 2011 07:09:02 -0000

Confirmed and corroborates the numbers I reported back in 2009 -- 0.01% - 0.05% click-through rates which correspond to effective CPMs of $0.01 - $0.19. Any advertiser paying $1 CPMs or more is paying 5x - 20x more than they should be.

http://go-digital.net/blog/...

Re: Report: Facebook Ad Performance Is Abysmal

acfou — Mon, 31 Jan 2011 18:01:20 -0000

yep, confirmed, the click through rates have not changed much since 2009 when I documented they were 0.01% - 0.05%

see blog post on Facebook Advertising Metrics and Benchmarks -- http://bit.ly/EhiW9

Re: Groupon Smashes Sales Records with Nationwide Gap Deal

acfou — Mon, 23 Aug 2010 08:53:12 -0000

Great points Mike. I did see a promotion that did work very well for the restaurant. Capital Grille here in NYC was doing a wine tasting series, where they offered unlimited tastings with dinner for $25. Every few weeks, they would feature a different flight of 10 wines from different areas of the world.

I DO think this promotion worked well because on average customers may order a bottle or 2 for dinner, resulting in an average per person of say $10-$20. The "unlimited" promotion was per person and it was $25 each. They would have effectively lifted the average spend per customer on wine.

So this promotion stands on its own merits and does not rely on the "halo effect" of customers maybe buying more while they are there, or other customers coming into the restaurant who may not have come in normally, and given the margins on wine, even at $25 for unlimited "tastings" they would still be profitable.

Your comments are right on, and Gap does seem to be experimenting heavily -- which is good. But hopefully they will hone in on the kinds of promotions that are net money making and can stand on their own instead of potentially loss-leading ones.

Re: Groupon Smashes Sales Records with Nationwide Gap Deal

acfou — Mon, 23 Aug 2010 08:46:39 -0000

Agreed.. this will be a very interesting case study ...

The following scenario -- people bought the $50 groupon for $25 and then went to the store to buy clearance items at 30 - 80% off -- will result in Gap netting something south of what even their margins will support.

So yes, advertising does cost money, but advertising is also supposed to drive more sales and profits than the cost of said advertising. Otherwise, if you advertise, and you lose money, why advertise at all?

Re: Groupon Smashes Sales Records with Nationwide Gap Deal

acfou — Sat, 21 Aug 2010 07:21:25 -0000

Thank you ... and thanks for sharing your insights too ... I agree, your example is a great example of launching a brand through digital and social channels... when compared with traditional channels like TV, print, and radio, you certainly got a far, far, better return ...and yes, these types of super-deals are really great for new brands who need to achieve awareness quickly. Subsequent to the initial "flash" the brands must work hard to keep the customers coming back and buying more -- and a lot of that has to do with the quality of their product or service. For example, restaurants can use Groupon to get people to taste and experience them, but if their food, ambiance, and service were not up to par, those initial customers are unlikely to return. Same here.

For a big huge brand like Gap, with practically 100% unaided recall and stores in practically every city, their longer term challenge may not be solved by a "flash in the pan" promotion such as this one -- which was costly while the longer term outcomes remain uncertain. But in the greater scheme, like I said before, if they took TV dollars to spend on this, they would have made a wise move -- at least they have captured half of the spend -- consumers already spent the $25 and they are unlikely to forget to use it, so they will go to the stores. The halo effect will be "gravy."

thanks for your comments...

Re: Groupon Smashes Sales Records with Nationwide Gap Deal

acfou — Fri, 20 Aug 2010 17:22:44 -0000

1. but not all at the Gap -- and if $606 is ALL they spend, what portion of that do you think they will spend at the Gap?

2. Yes, there is breakage, but most of the nature of the breakage is someone giving a gift card at christmas that then gets lost and forgotten in the sock drawer -- that is not applicable here because the person who bought it wanted the $50 of merchandise for $25

3. agreed -- but anything north of 0% for Groupon means Gap loses even more

4. agreed -- and IF the $25 worked this time, will you ever go back to Gap again? -- the "halo" argument is flawed for just this reason.

5. n/a

Re: Groupon Smashes Sales Records with Nationwide Gap Deal

acfou — Fri, 20 Aug 2010 10:18:49 -0000

Thanks Glenn... yeah, they could market this themselves just like JetBlue did last year when they just tweeted their All-You-Can-Jet-Pass deal on their own twitter account and got 31 million search results and 10 million blog mentions in the first 7 hours

http://bit.ly/AGpvi

This promo was great for Groupon and great for consumers. Whether it was great for Gap remains to be seen.

Re: Groupon Smashes Sales Records with Nationwide Gap Deal

acfou — Fri, 20 Aug 2010 06:36:39 -0000

Definitely possible that some merchants have such incredibly high margins they can support something like this. But what if the people who bought this deal walked into a Gap store and went straight to the Clearance section (30 - 80% markdowns) and only bought clearance items and only to the $50 limit?

When does the margin become untenable? When does volume no longer make up for slim margins? (perhaps when it is negative margin)?

Re: Groupon Smashes Sales Records with Nationwide Gap Deal

acfou — Fri, 20 Aug 2010 06:10:19 -0000

Same here... I haven't shopped at Gap for years. This will get me into a Gap store -- but only to buy exactly th $50 I have already spent -- so I can walk out with $25 of free merchandise. Hey, it's free money to buy my visit. Thanks Gap!!

Re: Groupon Smashes Sales Records with Nationwide Gap Deal

acfou — Fri, 20 Aug 2010 06:07:43 -0000

Thanks Spence. Great additional points I did not consider -- they can indeed spend the $50 on clearance items in regular Gap stores.

And yes, the "deepness" of this particular discount may attract a particular type of customer that may not lead to repeat visits or sales or purchases much above the $50 they have already spent.

Re: Groupon Smashes Sales Records with Nationwide Gap Deal

acfou — Fri, 20 Aug 2010 06:04:55 -0000

Hi Flair

the argument for "the halo effect" (they may buy something else when they get into the store) is well worn, old, and may be true in some cases. There will be others who want to maximize their percentage savings by buying as few cents over the $50 as possible.

There have been so many dramatically failed marketing campaigns that yes, they do happen. And they usually just fire the CMO afterward -- hence the average 1.5 yr tenure of CMOs.

And yes, if the customers are happy they will buy more. But using a restaurant Groupon example, the deep discount of the Groupon may get me to try a restaurant, but that doesn't guarantee I will like it or ever go back. I like the deep discount of the Groupon at the beginning. If and only if the restaurant serves great food, has a great atmosphere etc. will I even consider liking it, let alone going back to it.

Re: Groupon Smashes Sales Records with Nationwide Gap Deal

acfou — Fri, 20 Aug 2010 05:58:34 -0000

OK... if they had the margin to support it, great. If they didn't have to pay Groupon anything, awesome. But it's still $7.5 million worth of free money and merchandise walking out the door. Whether there will be any "ripple effects" going forward and anyone coming back to Gap without the free money, only time will tell.

If you offer me free money to get free merchandise from your stores today; I'd use it and get it today. But I will forget about you tomorrow.

Re: Groupon Smashes Sales Records with Nationwide Gap Deal

acfou — Fri, 20 Aug 2010 05:55:01 -0000

Yes, I looked at NYC alone. But Erica got the overall US number of 300,000 -- and that meant $7.5 million in lost revenue (at the time of her writing) -- it was a popular deal with 7 hours remaining at that time so it would have topped $10 million by day's end for sure.

Re: Groupon Smashes Sales Records with Nationwide Gap Deal

acfou — Fri, 20 Aug 2010 05:52:06 -0000

both Mike's (or the same) told me to stick with healthcare? (echo)

Re: Groupon Smashes Sales Records with Nationwide Gap Deal

acfou — Fri, 20 Aug 2010 05:51:31 -0000

Hi Mike (Mike Weber?)

Gap has NOT had 300,000 people walk through their doors -- yet. They are likely to have that because of this promotion. But what portion of that would be customers who did not know about GAP already? And of those people who have "crossed the Gap off their choices list" how many of them will spend much more than the $50 they have already purchased through this promotion?

I for one will go to the store and spend as close to (but not over) the exact $50 and leave. Any more than I spend over the $50 means the $25 savings becomes a smaller and smaller percentage.

Furthermore, who wouldn't walk into a store that gives them free money. If advertisers had to "buy" customers and their products can't stand alone, then there's a problem. And there's been too much other longer term evidence of retailers languishing and then trying desperate measures which are not well thought through that gets customers in the door but has little or negative long term impact -- think Macy's "sales" -- they do it so often that most people don't go to Macy's UNLESS there is a sale. And even then, they may only buy the sale items.

Re: Groupon Smashes Sales Records with Nationwide Gap Deal

acfou — Fri, 20 Aug 2010 05:40:44 -0000

Hi Mike,

if you accuse others of "lack of backup" then it might be wise to actually have backup yourself instead of

1) "I've heard $606" -- and that whole $606 is not attributable to a flawed marketing campaign such as this -- either the family was going to spend that anyway (in which case the waste of the $25 was unnecessary) or this promotion would have driven a trip to the store where a portion of the supposed $606 would be spent, again making your point moot.

2) hoping that people don't redeem is a classic (flawed) argument of the gift card business -- relying on "breakage" as a business model; If people really liked the deal (and they do in this case) they will likely use it, and before Nov 19, and there will be negligible breakage to compensate for the lost revenue

3) yes, Groupon won big -- a big, well known advertiser gave an unbelievable deal. It was free publicity for Groupon and free money for consumers. I wish more big advertisers would fund the PR campaigns of startups and give free money away for my kids' back to school. Yay! I didn't say it wasn't good for Groupon or the consumer. Groupon may have even taken NOTHING instead of "the 50% Groupon normally requests" because they got so much publicity from it. Phew,Tthen Gap may have lost less than the 100% of the $50 (50% to the consumer, the other 50% to Groupon)

4) After a consumer takes advantage of the free money, do you think they would "think GAP" the next time if there weren't free money involved? But one true statement you said in your whole post is the comparison to TV or magazine ads -- this is definitely LESS of a waste of money than those other forms of media AND they have the benefit of consumers showing up in stores!

5) uh, what? (irrelevant, so I won't comment further)

Re: Redefining Viral Marketing

acfou — Tue, 30 Mar 2010 01:50:14 -0000

viral videos (videos that go viral, with no paid support) are as rare as the Siberian lynx.

viral videos where the brand being advertised is known or remembered is rarer still.

viral videos that drive sales and ROI are ...

http://bit.ly/crqjCh

Re: He's a Cute Kid and a Good Kid...

acfou — Tue, 04 Aug 2009 21:14:48 -0000

anyone think the viral video effect was manufactured?

see the evidence collected here and judge for yourself - http://bit.ly/8K9pW

Re: YouTube sei Dank: Chris Brown scheint rehabilitiert

acfou — Tue, 04 Aug 2009 21:03:16 -0000

conspiracy theory: does anyone think the viral effect was too strong to be true -- i.e. it was not substantiated by the detected social intensity?

here’s the evidence, judge for yourself
http://bit.ly/8K9pW

Re: Google gets big company disease?

acfou — Mon, 16 Apr 2007 10:16:27 -0000

so we took matters into our own hands and built http://FlickrCash.com to enable anyone to use Flickr as a serious business resource for stock images -- by archiving licenses for public inspection forever.

Most sophisticated Flickr/CC mashup yet
http://creativecommons.org/...

Re: I Canceled My Basecamp Account Today

acfou — Mon, 09 Apr 2007 15:04:24 -0000

Hi Douglas,

I support your point of view... and here is another tidbit from my days at American Express - to test the "users don't scroll" theory. I had different URLs encoded in links at the top of the email and ones at the bottom, well, well, "below the fold." And the ones at the bottom were clicked just as well as the ones at the top. It speaks to the quality and pertinence of the content. If your content is not relevant, the user knows within the first screenful and therefore abandon without ever having to read more. My emails which contained resources, tips, and how-tos for small business cardmembers, rather than flat out ads or advertorials, always saw a good amount (i.e. up to 70%) of the clicks come from links at the bottom of the email.

I also have tried basecamp for a client project, and while we did post many documents to the library/repository, I ended up making the client change to google documents instead. thanks for your comments.

best,
Augustine