Exit Stage Right

“Eric, join us in the conference room with the other directors please”, asked my CMO at the now defunct company Impower out of Princeton NJ. This meeting was how the company was having cash flow issues and the CEO wanted all of the directors to take a 20% across the board pay-cut.

Well, my mom didn’t raise a complete fool and I neglected to volunteer for the pay cut, but the company was in such dire straits that they cut my salary anyway. “Of course it was by accident”, the CFO explained to me as he reversed the problem.

“Enough is enough and my time with this .com is over”, as I confessed to one of my employees Angela E. So, like any good job hunter with no severance and a need to move fast, I went to Monster.com and submitted my resume on a job. It was a lark, but the job description went like this:

VP Online Advertising
DLJdirect
Weehawken, NJ
Pay: Big salary+bonus
(you didn’t think I’d actually reveal my comp, did you?)

You know what, I got the job after our HR director Lauren T. pulled my resume out of the scrap heap and walked it into the then current CMO, Debra Isenberg. Debra picked up the phone and asked me “What the hell are you doing at Impower?” and my answer was trying to get out.

Well, a few interviews later I landed a job with CSFBdirect, which was rebranded from DLJdirect the day I walked in the door. I couldn’t tell the difference between a money market and a mutual fund, but I knew how the Internet works and I sure as hell could bring in online sales. Unfortunately, the first major problem went like this:

About two weeks into the new job, I was wandering the halls in Jersey City trying to find the men’s room, when Debra stops me and says “Meeting in my office in 5 minutes. There is something wrong with the AOL Personal Finance Deal and you need to fix it!”

DLJdirect signed the AOL deal with the assumption that AOL would bring in accounts just liked it did earlier when the company basically was built on AOL and Prodigy. Well, I couldn’t turn the numbers around because we were up against three other brokers, but I did increase the sales by bending up the conversion into sales from clicks. In the end, we renegotiated the deal and extracted some value from the contract before it was ultimately cancelled over a lunch meeting at a lovely Greek restaurant in lower Manhattan.

In January 2002, having survived a few rounds of layoffs, the Bank of Montreal acquires CSFBdirect and begins the rebranding process to Harrisdirect. I am happy to report at this time, that I do now know the difference between a money market and a mutual fund because I passed my Series 7. We launched an ad campaign in May 2002 around the glorious Elsie Lee online ads (that’s a blog for another day).



Growth was moving along, but by fall 2004 we had an executive management change and over the years lost valuable ground in the share grab game. What was once the leader/inventor of online brokerage was now far behind others. Finally, when it looked like the business finally changed for the better, Harrisdirect was acquired by another online brokerage firm.

What went wrong you ask? I guess as an online advertising person you would say, “sure it was a lack of spending in advertising to generate the accounts”, but that’s not the correct read on the situation.

Nothing went wrong at all.

First, the product that was built was best in class. Even at the end we won #1 Discount Brokerage Firm from SmartMoney in August 2005. You know what else was built, a great customer service team that not only spanned the actual client services team, but also permeated through marketing, product, trading, compliance, legal, and operations. Finally, it had an unbelievably great team of people, people that I will truly miss who really tried to make a difference.

In the end, why do you go to work each day for a corporation? Is it to change the world for the better? How about, promote a product you are very proud of? How about just something simple as, I need to do something and I may as well get paid.

You see, 15 years in the corporate world taught me a few things. One of them is, you need to get high enough up the food chain to protect yourself and really make a difference. Even a Managing Director at Harrisdirect wasn’t high enough (not bad for a 10 year veteran of the telecom world huh?) because you can be let go in the end.

So, you know what you are left with if you can’t get high enough in the corporate world? Friends, family, memories, hopefully some cash, and integrity. Nothing wrong with that.

Nothing went wrong at all. In the end, consolidation will continue just like it has in the telecom world where SBC can swallow up my former company AT&T.

As you might have guess by now, today was my last day at Harrisdirect after 5 years of hoofing it into Jersey City NJ. The one thing I won’t miss is that awful commute. You know it is not so weird, not being employed by corporate America. In fact, it is a relief.

Thanks for the memories everyone. Thanks to Scott A, Lauren T, John C, Charlotte F and the rest of the crew that spent this afternoon drinking with me in Baja.

If you want to find me, you should know by now where I’ll be. I’ll be right where I’ve always belonged; here on the Internet.

PardonMyFrench,

Eric

You Mean Someone Else Manages Your Homepage - BAH HUMBUG

I had a meeting a few weeks back with a fellow internet advertising executive and she told me that she had no control over the promotion on her company's homepage. I was completely surprised that she would allow this to happen. In fact, not only did she not have control over her homepage, she also had no involvement in retention of her clients.

Before we tackle organizational design and retention marketing on the web, let's talk about how NO internet advertising executive should allow someone else to manage the sales from their own website.

I read a while back on emarketer that 15% of marketing executives listed their homepage as having the highest ROI. 15% doesn't sound like much, but it was the third highest ROI and 2 notches ahead of advertising (direct sales was #1). So, why would you let someone else in the marketing organization manage your homepage sales?

When I first joined Harrisdirect back in 2001 when it was known as CSFBdirect, the homepage acquisition box consisted of a text ad with a $75 offer in it. Sales you can imagine, were dismal from this unit. However, I was able to convince the executives in the company that this should be replaced with a photo and graphic promoting our latest acquisition offers; this image was also closely aligned with the rest of our online campaign. Now, I can't report the actual number because my friends at the company actually read this blog (will you please drop me a message here), but let's just say that the sales turned out to be our 2nd highest internet advertising channel. Plus, if you actually understood how many hoops we had to jump through to get the image changed, you'd guard that placement with a couple of hungry pitbulls.

You know the other great aspect to owning the homepage sales is that they don't come with any media expenses. Sure, you might have some miniscule creative charges for designing the page and people hour to change/host. However, any media buys you are conducting will have media and ad servering expenses layered in with the respective buys.

Do you still need convincing? Ok, well now take a look at your weighted average cost per acquisition. If you have ownership over the homepage sales then you would be counting any sales from that channel with a next to zero cost while the remainder of your internet sales buy will have media and ad serving cost. No matter how efficient your media buy is, including the homepage sales with a next to zero cost will make you look that much smarter. And after all, making your numbers will make you look smart and that's what this is all about anyway, right?

So, go out and grab ownership of the homepage or promotional box. Do what ever you need to (of course within reason) to convince the powers that be that it is good for the company to have everything synched up on the internet. You know, drop a buzz word like "branding" (hah) and message consistency, and perhaps the owner of the promotional box will be happy to off load some of their work. Once that happens, watch your sales go up and your CPA go down.

That's my early Christmas gift to you. You can thank me later with a little

PardonMyFrench,

Eric

Revisiting Latency

A few weeks back I wrote a post explaining the virtues of latency and why it is key to online campaigns. However, like a cheap romance novel, I left you hanging at the end with how to interpret those latency numbers.

So, let's say that you are an online purveyor of widgets and you let your ad server tag your widget confirmation page. So, here's what you should be seeing:

• Number of direct widget sales
• Number of indirect or view thru widget sales
• Plus, you should be able to see the average time it takes to complete the widget sale or the latency time.

So, armed with a good calculator you add up your total sales and determine the % of direct widget sales and indirect sales. Now what? Well, here's your first quiz.

Quiz Question #1 - Is a 0%-5% indirect sales number good?

Answer #1 - Maybe not. Since a majority of sales should not be occurring in the same session (hell I abandoned a Target.com shopping cart tonight because their site was slow), you either have a tracking problem (dropped tag) or a placement that does not allow dropping a cookie at the impression level (paid search campaign on Google).

Quiz Question #2 - Is a 95%-100% indirect sales number good?

Answer #2 - In my experience, definitely not, but that doesn't necessary mean that the buy is bad; it just means you better research why you are advertising on the site. Here's why.

Since the indirect number is based on an impression seeing your ad it is assigned by your ad server and even though the sale occurred, you can't be 100% sure where the sale came from. Unless, you think that nobody is clicking on any of your ads and the sales are just magically appearing on your site from say, a television campaign (I'd love to see your widget spokesperson). Plus, when you add another site to your mix, you might see those sales originally assigned to your favorite site being assigned to the new site.

Quiz Question #3 - How long should you leave a window open to count a sale?

Answer #3 - It depends on what you're selling and what the placement is. For example, in two industries I've worked in, approximately 85% of sales occurred within 30 days and the majority of sales within 15 days. However, I've seen the vast majority of sales from my paid placement efforts occur within 2 days. So, I set my display advertising window at 30 days and my search advertising window at 2 days.

Quiz Question #4 - Should you pay a CPA for an indirect sale?

Answer #4 - I always did and in fact, I paid out on a 30 day window which seems awfully generous. However, if you've negotiated CPA (cost per acquisition) deals you'd like to get as much visibility as possible; you know for that branding thing which you denied occurs when you negotiated the CPA deal in the first place. The best way to get as much visibility is to count all legitimate sales and give the credit where it is due.

Ok, enough with the quiz. One more latency issue you need to watch out for is a sudden drop off in sales at a particular site when you add another site into the marketing plan.

Let's say you have a very successful acquisition campaign on www.nytimes.com that has been running for years and then you add in www.msn.com. All of a sudden that same creative, offer, landing page combination on www.nytimes.com no longer pulls the same way. Is it that the readers just stopped clicking on your ads or perhaps every Times reader has purchased your widget? Nope. The site has an audience overlap and those lovely www.nytimes.com view through sales just became direct sales on www.msn.com. Time to panic? Well maybe, but first determine what is really happening on your ad buy. Perhaps, you'll find that internet advertising has other uses besides acquisition, maybe even a little branding.

That's it for this week and I need to get going so I can finish burning a few more bootleg CDs. Take care and

PardonMyFrench,

Eric