One simple word……REVENUE

Typical areas of interest:

Counterfeit product marketing or sales
–product
–coupons
–manuals
Unauthorized agents/sales posing as representatives
Traffic Diversion Schemes and SEO
Document Leakage
Reputation
False Endorsement claims
Identity theft

For consumer products it has been estimated that there is a 1 trillion dollars in the market annually or 10% of GDP of purchased goods that are illegal counterfeit. Let’s put that in terms of your revenue. If 10% a company with a 3.5 billion dollar revenue stream was being stolen by counterfeit activities ($350,000,000), don’t you think management would much prefer to have that stream of revenue go to the company or shareholders?

Some may think that traffic diversion may not cost the company anything, but if you take into account your conversion ratios of how many customers come to your site and actually purchase goods or services, you can relate that back to a revenue number as well.

– Average monthly online visitors to your site 50,000
– Average monthly visitors diverted 10%, 5000
– Conversion rate to offending sites 1.5%
– Average monthly customers lost (5000) * (.015) = 75
– Annual loss of 900 customers
– Value/Customer $125
– Total cost of online diversion to competition $112.5K
If $112,500 in cash was missing, would you investigate?

These are just a couple of examples of how you can quantify the cost of ignoring the risks around social media. Start evaluating your company based on where you have seen your name in social media and what types of products or services you offer. How easily would they be subject to any of the above scams for diverting your companies cash?

1. “We meant to do that” – a response when we pointed out that a site a client built (who claims to do web development on the higher end levels) wasn’t visible in Google.

2. “We have too much business” – their continued rebuttal which I found incredibly odd in general, but especially in a down economy. I’ll be sure to check back in with them in 3 months.

3. “We didn’t have any business in January, so we are not going to do any advertising in February” – well, you can see where the flaw is in this one if you know about my rants, but more importantly, the client was on vacation all of January so his phones were not answered. You know how I feel about that.

4. “The internet has only been around for 10 years.” This came from a guy who sells interactive advertising.

5. “There’s not a whole lot of people using the Internet yet.” Self explanatory.

6. “I don’t think we should deal in that social media stuff.” – This from someone who has no ranking in Google for his own name, but there are over 10,000 NEGATIVE posts ABOUT him in Google. 

Got anymore? Share them here!

And, let me also offer up a pre-response rebuttal to anyone that uses the “do you know how much spam I get in a day” argument because (a) we get over 200 pieces every 4 hours – which is not uncommon for those of us that are heavily involved in social media and interactive advertising for our clients as we are forced to subscribe and leave our email for thousands of sites and advertisers and the like to do our appropriate job of finding AS MANY outlets to reach their clients/customers as possible, and (b) it really takes like less than a second to scan and see what is spam and what isn’t so how much time are you REALLY losing. Let me also add to those that love to banter back the whole “cost” issue (usually people that really don’t know anything about bandwidth or email server space, and 9 times out of 10 are freemail users who miss the point completely – yes, you AOL, HOTMAIL, and GMAILERS, this means you…) because a media outlet should be already invested in a surplus of backup and space due to heavy inquiry from PR as well as customers. But more importantly…

Here’s the crux. There is a symbiotic relationship between writers/producers and the public relations professionals that is often misunderstood and unappreciated from both sides of the fence. For media professionals that fall outside the “news” category, a large amount of your story ideas and delivery depend on the PR companies feeding you information in form of release, inquiry, or even direct access to the top dogs that you need quoted in your story to make it more impressive. That being said, I would think that part of your very job description and daily task would be to sift through thousands of emails and (for those old schoolers) faxes. So, why then if you get something that isn’t a good fit, do you feel the need to flame the sender? Even more to my point, if you are SO limited in your time, then how did you find time to send a mean email?

The bottom line is that you need us as much as we need you. And, many of you probably don’t know this, but we are also at the mercy of the companies that provide the tools to us. While our agency specifically does the best we can to funnel through every contact and look at their beat and also READ their publication, there are ti

I had a wonderful interview with Tim and we talked about a bazilion things that center around social media and where it’s going. Some of my other points I shared were that (a) companies are now trying to embark on a social media plan, but most do not have a clear strategy that ties into their overall business plan, and (b) many companies want the cool “blogs” and “podcasts” but don’t want to do the work involved to maintain them (nor do they want to pay companies like ours to do it for them, and (c) companies come to agencies like mine and others that offer social media as a service, but immediately want to know how they are going to generate revenue off of it…and really don’t like the answer in most cases…there isn’t any to be had, but social media participation is an insurance policy you can’t afford not to carry.

Great stuff, Tim! I can’t wait for the article on the YouTube lawsuit!

There are so many things to discuss over the coming week with regard to this conference, but a specific highlight of course was finally meeting Chris Heuer, the founder of the Social Media Clubwho truly has grasped not only a vision of social media and it’s impact on business, but more exciting to me personally, the once again realization that this “new media” or “internet world” has completely changed the rules of business, entreprenuership, and the economy.

I was joined by many esteemed panelists including Allan Sabo, Pamela Slim, Max Fose, Celia Blackwood, Kevin Donnellan, and
Ben Gordon.

Last, but not least, Robert Scoble closed out the day with many quips from a blogging fanatic – most importantly, a point that I think many missed but really need to remember is to simply pay attention to your customers. Acknowledge them. Period.

I’ll have more in the coming days to chat about, such as a warning not to dislike ice cream or you may be sued, how companies should see blogs as insurance rather than cost centers, and of course why old schoolers tick me off.

So, you ask, why the heck do I live here now? Well, I’ll tell you, for me, the weather is awful, almost 9 months out of the year in some years (certainly 6 consistently.) (And yes, winters are awful in other places, but I don’t mind cold.) And before you flame, I do truly believe that our six months of beautiful weather is the MOST beautiful you can get away from the water…and I love it.

So, the bigges winner is that the business climate in Arizona, for SMALL/MEDIUM sized businesses is wonderful. I have never lived in a town where businesses truly work together to help generate success, even when it’s your competitor. I wish someone like McKinsey would do a case study on this phenomenon, seriously, because it’s in amazing. Any business would be lucky to at least get their start in a great business climate like Phoenix – where the struggle to get in front of customers and people that can help extend your reach are right outside your front door, always willing to answer an email, and usually willing to grab a drink and share thousands of dollars worth of intellectual property to help another.

I cannot tell you how many times I’m at an event speaking with someone that is seemingly my “competitor” only to get a great cross lead within months, or even a direct referral from them. Businesses in Arizona really do work together to help make each other successful. The owners and employees are empathic about networking, and generating leads for each other, and always connecting. You would never see this in my NY office, and certainly not in Southern California.

So, what’s my ache today about this? The fact that the few larger companies, or ones that gain a large amount of funding, finally, and even the universities and government here does NOT hire local agencies or contractors for the “large” jobs – whether that be advertising, or higher end technology development. Do some research on your own. Who did ASU hire to help “reinvent” their brand after Crow preached about how Phoenix will grow? (It wasn’t a local firm.)

Another group of companies, some of which my agency and my great competitors have done work for over the years at a ridiculous rate to help them get up and running, have just landed investment dollars. Great! We want to see them grow. However; now that they’ve “hit the big time” they’ve abandoned the “smaller” agencies (many of which are not small, and in fact have offices and reach on both coasts to help generate national PR/Web, etc.) for agencies out of town. The oddest part: it’s not agencies in the truly competitive cities like NY or LA. It’s other “small” towns.

So, some will say that I’m mad, because there’s one company in particular that we did some pro bono work for when they were about to file for bankruptcy, and it was some press coverage that got them the recognition to gain funding in the millions last month. Some will say I’m mad because WE didn’t get the job. But, I’ll tell you this…I’d rather some of the other agencies in town that do wonderful jobs (SoapBoxPR, Off Madison Avenue, Lavidge, CK, Moses Anshell, Resnick, to name a few) get the jobs. How can Phoenix truly grow, and keep attracting great talent, if they keep outsourcing to other small locales?

For more information on our services, and to look for the clue of who we are speaking about, go to online advertising agency, Amanda Vega Consulting.