Entries Tagged 'Think about it' ↓

I would imagine Blogging 101 graduates would frown on this long and complicated subject line. Truth is, I don’t love it either. But I’m too confused to think of anything simpler.

I’m reading about Yahoo’s massive new advertising campaign that is about to launch. Yahoo is buying tens of millions of dollars of advertising from competing media companies with 2 goals in mind 1) reposition the brand to a dwindling consumer base and 2) reposition the brand to advertisers, reminding them how many of us they still reach.

A media company like Yahoo spends 10+ million in advertising with competing media companies, like USA Today. All with the hope of grabbing the consumers’ attention away from USA Today and over to Yahoo. If the advertising works, they will go to other advertisers and ask them to spend $10+ million advertising on Yahoo. Maybe USA Today would be interested in buying ads on Yahoo. They can get their users back.

Why do advertising sellers buy and sell ads to/from each other? In this case, advertisers are no longer convinced that Yahoo has control over enough of what they want…our time and attention. Likewise, advertisers are not sold on USA Today having enough control over our time and attention. If they did, USA Today wouldn’t have to resort to taking ads that help grow their competition.

The whole process makes very little sense. The only thing that makes sense is this: Everybody wants to either buy our time and attention or demonstrate that they have control over our time and attention. Yahoo is willing to spend millions just to try to convince advertisers they still got us. The point of all this? The value lies within us. We are who advertisers want. We are who media companies want. We are in control. If we seize it. Paying consumers makes a lot more sense than paying competitors to share their consumers.

Have you ever seen a Bed Bath & Beyond ad on TV? In a magazine? On the web? I haven’t. Yet they have the biggest brand recognition in the space and enjoy industry leading customer loyalty. How do they do it?

Instead of giving their marketing budget to NBC or Martha Stewart, they give it to their customers. Every week in the mail they send a coupon for $5 off or 20% off any item. I went in with my wife a few weeks ago to by a new set of pots and pans. BB&B had what we wanted on sale. They also had an offer of a $50 gift card if you spent over $500. And we got 20% off the entire deal from the coupon. As we were checking out (with a $100+ in other merchandise that we happened to pick up) I giddily said to the guy working the register “Add in the $50 gift card and you guys paid me over $100 to buy these pans. How can you afford to do that?”

And he said: “Have you ever seen a Bed Bath & Beyond advertisement? We’d rather pay you. Have a great day.”

[Admin note: Sorry for the unexpected silence over the past week.]

This week, Digital Sky offered to invest $200 million in Facebook at a $10 Billion valuation. What makes Facebook worth $10 Billion? They haven’t found a sustainable business model and lose millions every month, so what makes them so valuable?

It’s because they have YOU. And not only do they have you, but you tell everyone you know about Facebook. For free.

A web company like Yahoo had to spend more than $100 million on advertising with competitors like NBC and USA Today to get their brand in front of you and your friends. Facebook gets you to market their company to your friends and family for free. And your recommendation is MUCH more valuable than what NBC can offer via a commercial. That’s why Facebook is such a great investment. They have you, and you voluntarily market their brand to people you know who trust you and value your opinion.

I’m not saying this to demonize Facebook. On the contrary. It’s brilliant. I’m an active Facebook user. If you are like me, you gets lots of value out if Facebook…keeping up with friends, networking, sharing experiences. It’s fun and may be an important part of your life as it is mine. They’ve got a great product that has helped to make the world smaller and easier to navigate. I just want you to stop and think about why they are worth so much. It’s because they have create a brand that naturally and organically collects people together and gets them to spread the word.

If Facebook is worth $10 Billion because they have us….lets collect ourselves on our own and see how much we can be worth.