B2B/B2C online strategy and enterprise eBusiness blog

Today we launched an updated look and feel to SuperMotors.net (a site which I’m one of three owners of and work on in my spare time as a hobby):

New ad size: 300×250

In addition to new features and functionality added to the site, we’ve also incorporated 300×250 banner ads. Since I run this site as a hobby-based business, it’s important that we generate revenue from as many different sources as possible in order to pay for operational costs.

How will the economy impact banner ad revenue?

With the economy going the way it is, we’ve seen a text link-based company (ZTMC Marketing) pull ads from our site due to client cut backs. Fortunately, we are diverse in our implementation of ad networks. We run ads from Tribal Fusion, ADSDAQ, Casale Media, Google AdSense, ShoppingAds, and Text-Link-Ads.

This is part of the reason we’ve expanded to offering the 300×250 banner ad size (in addition to 728×90 and 160×600). We now have additional inventory heading into the first of the year when our traffic typically peaks (due to enthusiasts staying indoors during the winter months).

Sony is closing the doors on its ImageStation online photo hosting product. This is an interesting move and makes me wonder exactly how much money they were losing on this venture. Quantcast has ImageStation.com ranked at #2,994 with an estimated 790,000 unique visitors per month. With the combination of products (coffee mugs, calendars, etc.), premium memberships, and traffic to the site, it’s amazing that they are completely shutting the service down.

ImageStation has been around for quite some time and was always one of the larger sites funded by deep-pocket companies that we (SuperMotors) had to look at for competition and feature comparisons. I guess when you’re up against the likes of Shutterfly (4M uniques/mo), KodakGallery (7M uniques/mo), and Photobucket (16M uniques/mo), at only 790K uniques/mo, you are in a very distant 4th place. Not to mention the other services out there that offer photo hosting.

David vs. Goliath
This presents an interesting challenge for significantly smaller sites like ours without the deep-pocket funding. Is this a sustainable business model? How do you capture market share against companies offering arguably similar services? For us, being a part-time venture, the biggest challenge is finding the time to add value to the site and continue to improve it. We are sitting on several months of work that has yet to be launched due to the commitments of each of our collective day jobs.

At the end of the day however, we offer a very niche service to automotive enthusiasts. While photo, audio, and video hosting remain the core of the features offered, the added bells and whistles that make us unique will always set us apart from larger sites like the ones mentioned above. They cater to the masses and as a result, have to be generic in nature of their service offering. We continue to add services and features to the site that specifically support the automotive enthusiast.

Still though, it would be nice to have a name like Sony or Kodak bankrolling the operation.

AuctionAds.com (which we’ve been running on SuperMotors) was purchased by Media Whiz last week.

This makes me happy because we’ve been running AuctionAds for about a month and while initially we were receiving a 1.5% CTR, these days it’s down to a paltry 0.58% CTR. We are still serving the same amount of unique visitors and traffic to AuctionAds which suggests their caching system is drastically suffering. We dynamically supply keywords to the AuctionAds code to generate eBay ads that are closely aligned with the content being viewed on various pages of SuperMotors. The end result, when it works, is a highly-relevant ad which in the beginning, generated 1.5% CTR. In the display advertising world, this is quite high.

Media Whiz also owns Text-Link-Ads.com, which is a highly reliable service (albeit completely different technology) with great support. With 100% ownership over AuctionAds now, I hope they can take AuctionAds to the next level of service that it desperately needs to be a success. Right now, we continue to run the ads because they do not replace our existing ad inventory.

When AuctionAds can’t find a match, it displays the “most popular” eBay ads which typically end up being Coach handbags and designer purses — hardly relevant to our demographic of automotive enthusiasts. The continued success of AuctionAds will be an improved caching system first and foremost before any other bells and whistles. Once they nail the caching system down, then it will be almost like printing money.

This afternoon we received our beta acceptance (which we applied for a couple weeks ago) e-mail from ADSDAQ:

This comes at a perfect time for the ad networks we’re now involved with on SuperMotors. In the past week, we have signed on with Casale Media and CPX Interactive (on top of Tribal Fusion, AuctionAds, Google Adsense, and our own in-house ads).

What’s also interesting is experiencing the different interfaces each ad network has developed. Tribal Fusion’s is very, very outdated and lacks reporting and information that I’d really like to see. However, according to this article, it looks like a new campaign manager is on the way for Tribal Fusion.

I’m really excited to put the ADSDAQ system to the test and help it centrally manage all of our ad networks while simultaneously maximizing our revenue potential. I’ll post more feedback on ADSDAQ after the beta period starts as well as my experience with Casale and CPX after we have a couple weeks of traffic under our belt with these two additional ad networks.

Tribal Fusion continues to be our #1 performer to date. I’m looking forward to seeing if these other networks give Tribal Fusion a run for their money. Even if they don’t, we will have a much more diverse ad network strategy, which is always a Good Thing.

Here’s an example of how we’ve used Flash to implement improved video playback on SuperMotors. It’s YouTube-like, and we still need to add in some additional sharing capabilities, but it’s a major improvement over our previous method of only allowing viewers to download videos (as opposed to playing them directly in their browser or embedding them within a page on another site).

This post over at Brand Story got me thinking about how similar this topic is to strategic inflection points (from Only the Paranoid Survive by Andrew S. Grove). I work in an industry where competition from product imports (from China) are a serious threat to our business. The discounts at which their products are sold are very challenging to compete with. Fortunately, we think we have disruptive innovations in the works, but reading the post at Brand Story really got me excited — primarily because what we’ve got coming up over the next couple years is really exciting, and we’re doing it right. There are however, downsides to new innovations that must be taken into consideration, namely tunnel vision.

Fortunately for our industry, competing profitably at much lower costs is not the end-all, be-all of business strategy. Driving costs down is certainly always top-of-mind when competing with imports and when dealing with retailers who private-label imported products to directly compete with your brand-name products. At the end of the day however, and this may be the case for several other industries, you’ve got an industry with a plethora of products and brands, all similarly priced, but giving the consumer serious information overload and confusion (ever tried shopping for blinds and shades in a retail store? ).

Avoiding tunnel vision: Consumer insights are your friend!
Disruptive Innovations, while game-changers, cannot get away from the fact that consumers still need to understand how to shop your category and ultimately make a decision to buy. A lot of new product development may lead to tunnel vision — being so focused on that great new feature, huge cost savings, adopting a “me too” product (playing “catch-up” to other competitor innovations), or a new type of product altogether, that sometimes the “big picture” is lost for consumers.

Tunnel vision is really hard to see while you’re in development mode. You may begin to see it after the product is ready for consumer testing and you are able to take a moment and step back from the nitty-gritty and see just how consumers respond to what you think is an innovation. From a web development standpoint, it’s very easy to get lost in the cool, new features of a website and completely forget that the consumer must actually find their way to your site at first, be aware of the new technology, and know how to navigate to this area of your site.

Don’t forget the marketing
Worse yet, consumers may respond quite well to the innovation itself during the consumer insights session, giving you the reinforcement you’d be hoping for — but your innovation may tank in the marketplace. The branding, marketing, advertising, and/or overall awareness will help bring your disruptive innovation to its full potential.

Sometimes, this is the most critical component. You may have the best product in the world, but if nobody knows about it, or it’s buried in an aisle of other similarly confusing products, then you’re back to square one. Don’t forget to think “big picture” when it comes to consumers — it’s very easy to get lost in the industry competitiveness. Consumers insights and evaluating all aspects of the innovation are critical to success. This applies to many businesses, not just manufacturing companies — web companies are just as guilty (Google is a major offender: I just discovered Google Browser Sync, nearly a 1-year old product and I love it! But where’s the marketing for it?).

The other day we started experimenting with AuctionAds.com’s real-time, targeted eBay auction ads. What I didn’t realize was that I could supply any keyword in the AuctionAds (AA) code so that the keyword would generate eBay ad links in real-time as the AA ads were served. So, I was setting up individual ads in their campaign manager for 1978 Ford Bronco, 1979 Ford Bronco, 1980 Ford Bronco, etc. I was testing the ranges of years that Ford Broncos, Ford Excursions, and Ford Crown Victorias were in production (70’s, 80’s, and early 90’s). This mean for a lot of ads and a very time-consuming setup process.

Then I read about their WordPress plug-in. All this was was a way to allow WordPress users to dynamically insert keywords into the AA ad code. This provided even more relevant ads for bloggers because they could provide keywords that were relevant to the post/article they were writing.

So, we did something similar on SuperMotors. Instead, we dynamically insert targeted keywords based on the year/make/model or make/model of a registry entry, album section, or individual image or video posted by our user (you may need to scroll down on a couple of these links to see the AA ads). This eliminated my need to individually setup ads in our AA account, so I simply created a global campaign in our account that these targeted ads would run under. Targeted ads (on SuperMotors) have always outperformed generic ads by leaps and bounds with our visitors. Since the automotive crowd are generally heavy eBay’ers, we are hoping with this tighter, more strategic integration of ads throughout the site, that we see increased click-through rates and revenue.

High Click-through Rate (CTR)
We are pleased with the 1.55% CTR thus far during our test. Now that we have an expanded implementation of AA ads, we’ll see more impressions (and presumably a slight drop in CTR). Regardless, due to the highly-relevant ads, the CTR of 1.55% is much higher than Google (which ranges from 0.10-0.15% CTR on a daily basis for us). Many of the automotive items are higher-ticket items, so we should also see a fairly decent revenue share on items sold.

More updates on AuctionAds.com as we get further into the month.

As a result of reading the hype around AuctionAds on this post, we’ve added AuctionAds to the SuperMotors ad system. Our experience with programs like Commission Junction have yielded no revenue, which is surprising considering our ability to specifically target our site visitors with ads that are highly relevant to the vehicle information they are viewing on SuperMotors.

However, I’m hoping for better results with AuctionAds because we have the ability to create very targeted ads that are relevant to what our visitors are looking at on SuperMotors. For example, I created a campaign for “Ford Bronco” and am able to setup individual, targeted ads in AuctionAds for each keyword I want. So, to start off, we are have ads running that target “1978 Ford Bronco,” “1979 Ford Bronco,” …all the way up to 1996 Ford Bronco.

Highly Targeted eBay Ads with AuctionAds
With the ad system we’ve built on SuperMotors, we can serve up ads targeted to the year, make, and model of content being viewed on the site. So, if you link to a page like this (a picture of a 1988 Ford Bronco), you’ll be able to see the relevant eBay ads served up by AuctionAds for 1988 Ford Bronco items (You may need to refresh the page depending on the rotation of ads — we’re only serving up 160×600 AuctionAds at this time).

Our fingers are crossed that these highly-relevant ads translate to clicks and sales. We’ll run this test for 2-3 months and slowly expand the selection of AuctionAds and year/make/model targeting we do. My favorite feature is the ability to specifically select the keywords in AuctionAds, so you know you will get relevant results based on where you’re running your ads on your own site. This makes it an incredibly powerful tool for us — provided that it produces revenue, of course.

A few weeks ago while analyzing the results of an internal test on a new web design we’re testing, it was brought up about how manufacturing is guided by Six Sigma standards. It was suggested the website live in a similar realm of excellence.

What is Six Sigma?

Six Sigma is a rigorous and disciplined methodology that uses data and statistical analysis to measure and improve a company’s operational performance by identifying and eliminating “defects” in manufacturing and service-related processes. Commonly defined as 3.4 defects per million opportunities, Six Sigma can be defined and understood at three distinct levels: metric, methodology (DMAIC/DFSSstructured problem solving roadmap and tools) and philosophy (Reduce variation in your business and take customer-focused, data driven decisions).

Can Six Sigma be applied to web development, design, and usability?
This is a very logical question. Yes, it can be applied, but achieving it is another issue altogether.

Pulling from Jakob Nielson’s November 2003 post, Six Sigma engineering relies on a five-step process called DMAIC (Define, Measure, Analyze, Improve, and Control). He was really ahead of his time in this article. A google search does not pull up much information on applying six sigma to web development, design, or usability. This tells me the concept has not been discussed too much and it makes sense — the web is still in its infancy, and the more experienced developers within organizations today are now moving into upper management where they are beginning to look at the website from a higher view within the company.

As the web becomes more of a vital tool for most businesses today, upper management (who often times knows little about how exactly a website goes together or how to build a successful site) is seeing the value in applying other business practices and methodologies towards the design, testing, and execution of their websites.

Why Six Sigma is difficult to achieve in web development today.
In manufacturing, the amount of variables encountered in an assembly line is not as vast as a complex website. Manufacturing doesn’t deal directly with consumers, either, and the manufacturing process has very strict processes and tolerances for how things are assembled.A website is dynamic in nature and also navigated and operated by your customers — customers who may not know a thing about your product and have had no training on your website. Manufacturing lines are staffed by duty-specific workers, trained to perform specific tasks accurately and efficiently.

A website on the other hand can be navigated in millions of different ways and combinations by millions of different people. Testing each of these combinations is impossible and will result in you testing your website into eternity without ever releasing it to the market. Add on top of this a team of people who are most likely very diverse in their backgrounds: developers, designers, and marketers — each come with their own education and experiences and often time have no visibility into what their other team members’ job responsibilities really entail (how many developers do you know that can truly do graphic design? how many designers do you know that can write complex database queries?).

Accept the variables in web development, and apply the concepts of Six Sigma
The key is applying the Six Sigma mentality to web development, design, and usability so you can get the best balance of accuracy and conversions. The problem most developers and designers have is that they get “tunnel vision” and focus exclusively on just one piece of the entire web application. This is a problem for any type of site which has multiple conversion funnels (sales, registration forms, contact forms, etc.).

Next Segments:

1. “Define” in the DMAIC process

More on this topic over the next several days as I cover each phase of the DMAIC process in individual blog posts in an effort to keep the posts spread out and on-topic, rather than one long, rambling post. I’ll provide links at the end of this post as each phase of DMAIC is evaluated.

In regards to yesterday’s post, Tribal Fusion did respond to my e-mail inquiry with the following:

I appreciate your willingness to work with us in maintaining our standard of quality content. To answer your question on how we could potentially work together on user-generated-content, there are two possibilities:

1. All content would be reviewed by staff before it is published live on the site.
2. As you mentioned, YouTube does allow users to flag content as “inappropriate”, and then reviews all flagged content. However, they also mark all uploaded content as inappropriate until it has received a certain number of views. If, in that time, no user flags the image, it is marked as safe. If a user does flag the content, it is pulled and reviewed.

This is good news for us and also a good indicator that they are willing to work with social media sites. We’re working towards a “flag as inappropriate” feature a la YouTube for our user-generated content. More on this as we continue to work with Tribal Fusion. For now, we’re on the right path towards getting back on their network.