Performics is the performance marketing division of DoubleClick, which provides technology and services that empower marketers, agencies and web publishers to work together successfully and profit from their digital marketing investments. Our focus on innovation, reliability and insight enables clients to improve productivity and results.
Since 1996, DoubleClick has empowered the original thinkers and leaders in the digital advertising industry to deliver on the promise of the rich possibilities of our medium. Today, the company's DART and Performics divisions power the online advertising marketplace. Tomorrow, we will continue to enable clients to profit from opportunities across all digital advertising channels as consumers worldwide embrace them.
DoubleClick has global headquarters in New York City and maintains 21 offices around the world to serve its more than 1500 clients.
The corrected release reads:
ONLINE MARKETERS CAN EXPECT BIG NUMBERS THIS HOLIDAY SEASON: PERFORMICS 50 PREDICTS GROWTH OF 53% FOR ONLINE SALES OVER LAST YEAR
Growth in search engine marketing continues unabated, with year-over-year conversions, search spend, and impressions displaying increases of nearly 50%; active keywords have grown by a robust 58% and total clicks by 32%. The Performics 50, a representative index of well-managed paid search campaigns designed to monitor the growth of paid search advertising, indicates much of this growth is due to online marketers' increased knowledge and sophistication of search engine marketing.
The Performics 50 forecasts that sales during the forth quarter will surpass last year's sales by 53%. As a general rule, marketers can expect to see Q4 activity equal to the sum of Q1 and Q2 activity. In other words, sales during the fourth quarter of this year, which includes the busy holiday shopping season, are likely to equal the combined sales of the first half of '06 (Q1 and Q2). The same holds true for budgeting and marketing costs.
"Online marketing is passing over a huge hurdle," said Cam Balzer, director of search strategy at Performics. "Experienced SEMs and program managers are harnessing the full value of search and realizing that maintaining an aggressively managed campaign onlineCoone that drives online sales, offline sales, increases brand awareness and maximizes your search budgetCois critical to overall marketing success. This potentially means big business for the final quarter of 2006 and the upcoming holiday season."
The Performics 50 identified an increase in competition for higher-priced and more popular keywords in the last quarter as well as marketers mining the 'long tail' of key terms to balance out their keyword portfolios. This type of program management led to a relatively stable cost per keyword (CPK) environment, increasing only $.14, or less than 0.5%, from first quarter averages, and demonstrates online marketers' aptitude for mounting, targeting and maintaining complex search engine campaigns.
Marketers can analyze and combine their first and second quarter budgets in order to determine their likely spend for all of the fourth quarter. Additionally, October is the optimal time to detect and correct any campaign variances in order to capitalize on the holiday rush. Intervention at this time can prevent substantial loss and improve November and December revenue.
Please go to www.performics.com to download a complete copy of the Performics 50.
About Performics
Performics is the performance marketing division of DoubleClick, which provides technology and services that empower marketers, agencies and web publishers to work together successfully and profit from their digital marketing investments. Our focus on innovation, reliability and insight enables clients to improve productivity and results.
Since 1996, DoubleClick has empowered the original thinkers and leaders in the digital advertising industry to deliver on the promise of the rich possibilities of our medium. Today, the company's DART and Performics divisions power the online advertising marketplace. Tomorrow, we will continue to enable clients to profit from opportunities across all digital advertising channels as consumers worldwide embrace them.
Sunday, September 9, 2007
Pyramid Power? No, say execs at music download firm BurnLounge. They see 'concentric marketing' as key to sudden sales surge
In less than a year, it has caught on with such industry heavyweights as deejay Rick Dees, Justin Timberlake and Kanye West, and attracted such advertisers as Cadillac and Nokia.
Moreover, it has enlisted an online army of more than 40,000 retailers known as "burn team members." They sell music for downloads, and the retailers share commissions with those who enlisted them.
Founded by Chief Executive Alex Arnold, Chief Operating Officer Ryan Dadd and Chief Creative Officer Stephen Murray, the company combines iTunes-type music downloads and eBay-style retailing with traditional multi-level marketing.
But could BurnLounge's business model be the cover of an old tune: the pyramid scheme?
BurnLounge's Arnold bristled at the suggestion that his company's multilevel marketing--he prefers the term "concentric sales"--could tip into anything illegal.
"I would call it more of affiliate marketing meets fan-to-fan promotion."
Multilevel marketing can be tricky terrain. Even successful mainstream multilevel marketing firms, such as Herbalife International Inc., have wound up in legal hot water by not managing their operation correctly.
In order for a multilevel marketing model not to be considered a pyramid scheme, the majority of the proceeds from sales must go to the retailers, not to those who recruited them.
The deal
The business works like this:
Users create pages where they post and sell artists' music of their choosing for buyers to download. Downloads of a song typically go for 99 cents. Each participating artist signs a non-exclusive, one-year license agreement with BurnLounge and gets between 50 percent and 70 percent of the revenue generated by sales of their songs.
Of the remainder, BurnLounge corporate takes 60 percent while the retailer who sold the song gets 40 percent. However, the retailer must give 20 percent of his take to the one who recruited him. The recruiter must pay a percentage of his take to the one who recruited him, and so forth.
In addition, each retailer gets a $50 bonus for each new retailer recruited; all retailers are part of a "Burn Team," directly tied to the person who recruited them.
"You get rewarded for your team's sales. Music is a fairly low margin product, so you are earning pennies and cents--a little bit of a lot of people," Arnold said. "That's the beauty of it; nobody makes that much money on a single album sale."
BurnLounge is not a pyramid scheme because financial success for the retailers is not solely dependent on recruiting others. A pyramid scheme relies on enrolling new sales people in order to make money. However, there are elements that resemble those traditionally associated with pyramid schemes, including recruitment presentations in hotels and special events designed to entice potential sellers.
But Arnold pointed out that rather than a commodity or a line of products, BurnLounge sells various music that's highly segmented and user-specific. Small, independent bands are the linchpin of BurnLounge's content library.
In fact, the increased exposure and payment for the legal downloads is luring hordes of garage bands and their followers. BurnLounge already has almost 2 million tracks posted for purchase. Every user can configure his download page to promote bands of his choice, so the more friends and fans who sign up, the bigger his potential audience.
True believers
Not surprisingly, most of those involved with BurnLounge are true believers.
Robby Welles, a former real estate agent who now hosts BurnLounge recruitment seminars at hotels and other rented spaces, started an online download store in January.
Welles said he was skeptical when a friend asked him to attend a BurnLounge presentation, and that he resisted multiple invitations. Finally, in return for dinner and drinks, he agreed to go.
"My first reaction was, 'Thanks, man, but I don't have time for anything like that'," Welles said.
After the presentation, Welles said he was impressed and signed up right away. He said that within three months he had left his job to focus on his stores and now has more than 4,000 members on his two "burn teams."
"I heard who was involved and I felt my reputation was no longer on the line, that it was legit," Welles said. "The company is changing the direct sales industry because it's making it cool and fun. The money's good and it will just keep getting better."
Moreover, it has enlisted an online army of more than 40,000 retailers known as "burn team members." They sell music for downloads, and the retailers share commissions with those who enlisted them.
Founded by Chief Executive Alex Arnold, Chief Operating Officer Ryan Dadd and Chief Creative Officer Stephen Murray, the company combines iTunes-type music downloads and eBay-style retailing with traditional multi-level marketing.
But could BurnLounge's business model be the cover of an old tune: the pyramid scheme?
BurnLounge's Arnold bristled at the suggestion that his company's multilevel marketing--he prefers the term "concentric sales"--could tip into anything illegal.
"I would call it more of affiliate marketing meets fan-to-fan promotion."
Multilevel marketing can be tricky terrain. Even successful mainstream multilevel marketing firms, such as Herbalife International Inc., have wound up in legal hot water by not managing their operation correctly.
In order for a multilevel marketing model not to be considered a pyramid scheme, the majority of the proceeds from sales must go to the retailers, not to those who recruited them.
The deal
The business works like this:
Users create pages where they post and sell artists' music of their choosing for buyers to download. Downloads of a song typically go for 99 cents. Each participating artist signs a non-exclusive, one-year license agreement with BurnLounge and gets between 50 percent and 70 percent of the revenue generated by sales of their songs.
Of the remainder, BurnLounge corporate takes 60 percent while the retailer who sold the song gets 40 percent. However, the retailer must give 20 percent of his take to the one who recruited him. The recruiter must pay a percentage of his take to the one who recruited him, and so forth.
In addition, each retailer gets a $50 bonus for each new retailer recruited; all retailers are part of a "Burn Team," directly tied to the person who recruited them.
"You get rewarded for your team's sales. Music is a fairly low margin product, so you are earning pennies and cents--a little bit of a lot of people," Arnold said. "That's the beauty of it; nobody makes that much money on a single album sale."
BurnLounge is not a pyramid scheme because financial success for the retailers is not solely dependent on recruiting others. A pyramid scheme relies on enrolling new sales people in order to make money. However, there are elements that resemble those traditionally associated with pyramid schemes, including recruitment presentations in hotels and special events designed to entice potential sellers.
But Arnold pointed out that rather than a commodity or a line of products, BurnLounge sells various music that's highly segmented and user-specific. Small, independent bands are the linchpin of BurnLounge's content library.
In fact, the increased exposure and payment for the legal downloads is luring hordes of garage bands and their followers. BurnLounge already has almost 2 million tracks posted for purchase. Every user can configure his download page to promote bands of his choice, so the more friends and fans who sign up, the bigger his potential audience.
True believers
Not surprisingly, most of those involved with BurnLounge are true believers.
Robby Welles, a former real estate agent who now hosts BurnLounge recruitment seminars at hotels and other rented spaces, started an online download store in January.
Welles said he was skeptical when a friend asked him to attend a BurnLounge presentation, and that he resisted multiple invitations. Finally, in return for dinner and drinks, he agreed to go.
"My first reaction was, 'Thanks, man, but I don't have time for anything like that'," Welles said.
After the presentation, Welles said he was impressed and signed up right away. He said that within three months he had left his job to focus on his stores and now has more than 4,000 members on his two "burn teams."
"I heard who was involved and I felt my reputation was no longer on the line, that it was legit," Welles said. "The company is changing the direct sales industry because it's making it cool and fun. The money's good and it will just keep getting better."
Saturday, September 8, 2007
MTV Rallies Together Online Sales Forces
Mansfield said that MTV Networks Online's breadth of offerings would he compelling to advertisers looking to reach markets that ranged from "cradle to older adults." Mansfield will lead the centralized ad sales force to help advertisers make buys across all online properties. She noted that the group would continue to work with the cable TV ad sales groups to create innovative packages for advertisers who want to advertise on different platforms, a process that can be confusing to some advertisers.
"I think some advertisers are getting it now, but it's an education process," said Mansfield. "As sales people, we need to be prepared not only to educate our advertisers to all the opportunities that are available on our sites, but also really listen to what their needs are, whether it's creating high-profile events on the Web or doing advanced targeting."
"The opportunity to work with advertisers across all of our businesses and to really understand the unique needs of advertisers in the online space is the reason why we wanted to get these guys together," said Fred Seibert, president of MTV Networks Online. "Peggy comes from a very eclectic background, having worked in print, TV and online. She has not only the online experience, but the traditional media experience that allows her to understand the unique needs of clients in a new space."
"I think some advertisers are getting it now, but it's an education process," said Mansfield. "As sales people, we need to be prepared not only to educate our advertisers to all the opportunities that are available on our sites, but also really listen to what their needs are, whether it's creating high-profile events on the Web or doing advanced targeting."
"The opportunity to work with advertisers across all of our businesses and to really understand the unique needs of advertisers in the online space is the reason why we wanted to get these guys together," said Fred Seibert, president of MTV Networks Online. "Peggy comes from a very eclectic background, having worked in print, TV and online. She has not only the online experience, but the traditional media experience that allows her to understand the unique needs of clients in a new space."
Consumers Punishing Physical Stores for Sins of Online Counterparts
"Retailers have been very slow to understand that, to the consumer, it's one brand," said Paula Rosenblum, a retail technology analyst for the Retail Systems Alert Group. "They're not structured for it. They're not compensated correctly for it, and, in many ways, their technology isn't set up to accommodate that."
Jupiter Research retail analyst Patti Freeman Evans said customers have a very high expectation of shared information, expecting, for example, store employees to know what they did online. Such data sharing rarely exists.
"Though retailers philosophically understand that they want to be there, it's very expensive to change those systems, to change their operating programs, to change their compensation packages in a way that really significantly is going to impact the way they do business," Evans said.
One of the authors of the Gomez report, Jessica Bryan, said the change in consumer perception is strong, and, often, it's not at all fair. That lack of fairness manifests itself in consumers blaming retailers for many parts of the online experience that are beyond the retailer's control, ranging from slow response time (which might be due to overall Internet traffic, the customer's computer or the customer's connection speed) to checkout issues (which the retailer likely has outsourced).
"The retail brand today transcends the channel," Bryan said. "When [customers] have a poor Web experience, as in poor page loads [or] unsuccessful transactions," it's taken out on the storefronts, too. "Consumers don't understand the complexity of delivering an optimal Web experience," she said.
Rosenblum said that even though e-commerce sales are soaring—Jupiter is projecting about $32 billion in online purchases this year—it's a footnote to overall retail sales of about $1.2 trillion. Jupiter projects that online sales will represent about 6 percent of many retail chains' holiday sales and about 5 percent of their total annual sales.
"If it's 6 percent of your business, it's hard for these guys to put in the kind of money they need to put in to create the right online experience," Rosenblum said.
On Nov. 2, the National Retail Federation released its own customer service survey , which placed Amazon as the best merchant (online and offline) for customer service. Analysts argued that Amazon's online-only status is the reason it can strategically justify spending so much online to deliver that level of customer service.
Jupiter Research retail analyst Patti Freeman Evans said customers have a very high expectation of shared information, expecting, for example, store employees to know what they did online. Such data sharing rarely exists.
"Though retailers philosophically understand that they want to be there, it's very expensive to change those systems, to change their operating programs, to change their compensation packages in a way that really significantly is going to impact the way they do business," Evans said.
One of the authors of the Gomez report, Jessica Bryan, said the change in consumer perception is strong, and, often, it's not at all fair. That lack of fairness manifests itself in consumers blaming retailers for many parts of the online experience that are beyond the retailer's control, ranging from slow response time (which might be due to overall Internet traffic, the customer's computer or the customer's connection speed) to checkout issues (which the retailer likely has outsourced).
"The retail brand today transcends the channel," Bryan said. "When [customers] have a poor Web experience, as in poor page loads [or] unsuccessful transactions," it's taken out on the storefronts, too. "Consumers don't understand the complexity of delivering an optimal Web experience," she said.
Rosenblum said that even though e-commerce sales are soaring—Jupiter is projecting about $32 billion in online purchases this year—it's a footnote to overall retail sales of about $1.2 trillion. Jupiter projects that online sales will represent about 6 percent of many retail chains' holiday sales and about 5 percent of their total annual sales.
"If it's 6 percent of your business, it's hard for these guys to put in the kind of money they need to put in to create the right online experience," Rosenblum said.
On Nov. 2, the National Retail Federation released its own customer service survey , which placed Amazon as the best merchant (online and offline) for customer service. Analysts argued that Amazon's online-only status is the reason it can strategically justify spending so much online to deliver that level of customer service.
Friday, September 7, 2007
Save the date: an online calendar service is the next crusade for one serial software entrepreneur
JEREMY JAECH'S schedule is packed. A serial entrepreneur, Jaech has had two previous software companies that did so well, they sold for enormous profits. The most recent was Visio, which Microsoft purchased in 2000 for $1.5 billion. In June, Jaech launched Trumba Corp. with the help of four co-founders and $4.75 million in funding. This latest Seattle-based venture offers OneCalendar, an online service that makes it easy for users to manage their schedules, e-mail upcoming events to groups and share their calendars with others.
The concept of a group calendar isn't new, yet Jaech is confident the timing is finally right. "You really need an always-on connection to the internet for this to work really well, and now over 50 percent of internet-connected households are broadband-connected," explains Jaech, 50, whose strategy for success is recognizing shifts--along with room for opportunities--in the marketplace.
With Trumba's 2006 sales projected to hit $12 million, you just might want to pencil Jaech in on your calendar of entrepreneurs to watch.
The concept of a group calendar isn't new, yet Jaech is confident the timing is finally right. "You really need an always-on connection to the internet for this to work really well, and now over 50 percent of internet-connected households are broadband-connected," explains Jaech, 50, whose strategy for success is recognizing shifts--along with room for opportunities--in the marketplace.
With Trumba's 2006 sales projected to hit $12 million, you just might want to pencil Jaech in on your calendar of entrepreneurs to watch.
Online promotions boost beveraqe sales - Brief Article - Statistical Data Included
The greatest marketing machines in the real world are solidifying their places in the cyberworld. Both Coca-Cola and Pepsi-Cola are forming alliances with heavy-hitters of the Internet.
Coca-Cola and America Online have announced plans to form a $100-million alliance for advertising and promotions. The agreement will "activate advertising and promotional initiatives across grocery shelves and into cyberspace, according to Brand week.
Coca-Cola said it was in the "final stages" of forming strategic alliances with unnamed Internet companies.
Pepsi-Cola and Yahoo! announced a joint online and offline promotional program, Pepsi Stuff.com. The Pepsi Stuff.com program will enable consumers to earn digital awards and discounts online from promotional partners through an under-the-cap promotion scheduled to appear on 1.5 billion single-serve bottles of Pepsi, Diet Pepsi, Pepsi One, Mountain Dew, Diet Mountain Dew and Wild Cherry Pepsi. The five-month promotion is expected to launch in August 2000.
Through these Internet marketing agreements, drug stores will be able continue growing the carbonated beverage category.
According to ACNielsen data for the 52 weeks ended May 13, the regular carbonated beverage category experienced sales of $583.8 million in the drug channel.
For the 12 weeks ended May 13, sales of carbonated beverages in drug stores were up 21.5 percent to $186.2 million, making drug stores the fastest-growing mass channel tracked by ACNielsen for that period. During the same 12 weeks, sales in food stores increased just 3.7 percent to $2.65 billion, while convenience store sales increased just 3.5 percent to $1.11 billion. Sales in the mass merchandise channel increased only 1.6 percent to $226.9 million for the same period.
Connecting with consumers
Through Yahoo!, Pepsi's popular "Pepsi Stuff' promotion will become interactive, allowing consumers to collect points under the caps of 20-ounce and one-liter bottles of Pepsi and Mountain Dew products and quickly redeem their points online for digital and hard-good prizes, as well as discounts from leading manufacturers and retailers. Pepsi Stuff.com also will feature auctions of rare items from Pepsi and its pro. motional partners.
Pepsi and Mountain Dew product bottles will have a "Pepsi Stuff.com, Powered by Yahoo!" logo on labels to alert consumers to the promotion. In exchange, Yahoo! is scheduled to receive logo placement on point-of-purchase materials that will be placed in about 50,00 retail stores nationwide
Coca-Cola and America Online have announced plans to form a $100-million alliance for advertising and promotions. The agreement will "activate advertising and promotional initiatives across grocery shelves and into cyberspace, according to Brand week.
Coca-Cola said it was in the "final stages" of forming strategic alliances with unnamed Internet companies.
Pepsi-Cola and Yahoo! announced a joint online and offline promotional program, Pepsi Stuff.com. The Pepsi Stuff.com program will enable consumers to earn digital awards and discounts online from promotional partners through an under-the-cap promotion scheduled to appear on 1.5 billion single-serve bottles of Pepsi, Diet Pepsi, Pepsi One, Mountain Dew, Diet Mountain Dew and Wild Cherry Pepsi. The five-month promotion is expected to launch in August 2000.
Through these Internet marketing agreements, drug stores will be able continue growing the carbonated beverage category.
According to ACNielsen data for the 52 weeks ended May 13, the regular carbonated beverage category experienced sales of $583.8 million in the drug channel.
For the 12 weeks ended May 13, sales of carbonated beverages in drug stores were up 21.5 percent to $186.2 million, making drug stores the fastest-growing mass channel tracked by ACNielsen for that period. During the same 12 weeks, sales in food stores increased just 3.7 percent to $2.65 billion, while convenience store sales increased just 3.5 percent to $1.11 billion. Sales in the mass merchandise channel increased only 1.6 percent to $226.9 million for the same period.
Connecting with consumers
Through Yahoo!, Pepsi's popular "Pepsi Stuff' promotion will become interactive, allowing consumers to collect points under the caps of 20-ounce and one-liter bottles of Pepsi and Mountain Dew products and quickly redeem their points online for digital and hard-good prizes, as well as discounts from leading manufacturers and retailers. Pepsi Stuff.com also will feature auctions of rare items from Pepsi and its pro. motional partners.
Pepsi and Mountain Dew product bottles will have a "Pepsi Stuff.com, Powered by Yahoo!" logo on labels to alert consumers to the promotion. In exchange, Yahoo! is scheduled to receive logo placement on point-of-purchase materials that will be placed in about 50,00 retail stores nationwide
Nexus and the 'net - Tax - states urge Congress to pass Internet sales tax
Should businesses have to collect sales taxes for states in which they have no physical presence? Riding the coattails of interest surrounding the soon-to-expire Internet Tax Non-discrimination Act, a growing number of cash-strapped states are pushing to get Congress to say yes.
While the act primarily addresses taxes on Internet access charges--not sales--the bill has become a catalyst for the long-running debate about how and when companies must collect state and local taxes. "It's not just going to be about extending the legislation," which is set to expire November 1, says Jeff Friedman, tax partner with KPMG LLR "We expect to see bills and amendments introduced to expand the protections for E-commerce, and possibly to redefine nexus," potentially making a company's physical location irrelevant to its tax obligations.
Currently, most companies do not have to collect sales tax for states in which they do not have a presence, thanks to a 1992 U.S. Supreme Court decision that said managing the myriad and ever-changing rules on all state and local taxes would be too burdensome.
In an effort to get that decision overturned, however, this spring 13 states passed laws to adopt the agreement drawn up by the Streamlined Sales Tax Project (SSTP), which aims to standardize definitions of taxable goods across states and limit each state to two sales-tax rates, thereby defusing the burden argument. According to Neal Osten, a director for the National Conference of State Legislatures, project backers are hoping to get a bill before Congress by next fall seeking authority for states to require all out-of of-state sellers, including Web-based ones, to collect sales tax.
"Businesses would benefit from the simplification," says Douglas Lindholm, president and executive director of the Council on State Taxation, which represents 550 multistate corporations on tax issues. However, he says, the reform should include congressional action to stop states from using the same logic to pad their income-tax bills. "If you set physical presence aside as a standard for sales-tax purposes," says Lindholm, "the big unanswered question is, what is the nexus standard for business-activity taxes?"
RELATED ARTICLE: GETTING TOGETHER: States adopting the SSTP agreement.
1. Arkansas
2. Indiana
3. Kansas
4. Kentucky
5. Minnesota
6. Nebraska
8. Oklahoma
9. South Dakota
10. Utah
11. Washington
12. West Virginia
13. Wyoming
While the act primarily addresses taxes on Internet access charges--not sales--the bill has become a catalyst for the long-running debate about how and when companies must collect state and local taxes. "It's not just going to be about extending the legislation," which is set to expire November 1, says Jeff Friedman, tax partner with KPMG LLR "We expect to see bills and amendments introduced to expand the protections for E-commerce, and possibly to redefine nexus," potentially making a company's physical location irrelevant to its tax obligations.
Currently, most companies do not have to collect sales tax for states in which they do not have a presence, thanks to a 1992 U.S. Supreme Court decision that said managing the myriad and ever-changing rules on all state and local taxes would be too burdensome.
In an effort to get that decision overturned, however, this spring 13 states passed laws to adopt the agreement drawn up by the Streamlined Sales Tax Project (SSTP), which aims to standardize definitions of taxable goods across states and limit each state to two sales-tax rates, thereby defusing the burden argument. According to Neal Osten, a director for the National Conference of State Legislatures, project backers are hoping to get a bill before Congress by next fall seeking authority for states to require all out-of of-state sellers, including Web-based ones, to collect sales tax.
"Businesses would benefit from the simplification," says Douglas Lindholm, president and executive director of the Council on State Taxation, which represents 550 multistate corporations on tax issues. However, he says, the reform should include congressional action to stop states from using the same logic to pad their income-tax bills. "If you set physical presence aside as a standard for sales-tax purposes," says Lindholm, "the big unanswered question is, what is the nexus standard for business-activity taxes?"
RELATED ARTICLE: GETTING TOGETHER: States adopting the SSTP agreement.
1. Arkansas
2. Indiana
3. Kansas
4. Kentucky
5. Minnesota
6. Nebraska
8. Oklahoma
9. South Dakota
10. Utah
11. Washington
12. West Virginia
13. Wyoming
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