Know-How Exchange : Strategy

我认为这是一个非常整洁sight.

I see a great deal of potential to it.

And, I think by posting this you have just started the process of marketing this to MarketingProf.com.

I don't know, but I would like to know more about it.

I am glad to answer any questions. Feel free to post questions here for group consumption, or email me directly at [email deleted by staff].

Questions would be helpful.

I went through the online demo and think you have a very clever concept. So here are the questions:

1. How are you going to create awareness on the parts of both the advertiser and consumer targets? This is essentially a publishing model, in that you have two different audiences -- advertisers and subscribers. Reaching those two audiences is not going to be easy or inexpensive. You'll need a very strong marketing plan that includes significant up-front investment to generate awareness among both audiences.

2. How are you planning to finance the venture? Unless you can demonstrate that the whole thing works, it's not likely that you'll be able to get the financing you'll need to get this off the ground. Is there some way you can test the concept without spending a lot of money? (I'm assuming you're not planning to bet the ranch on this with your own money, right? That's not a rhetorical question, just a question.)

3. Why MarketingProfs? What makes MarketingProfs the right partner for this effort? What does MarketingProfs bring to your party?(Full disclosure: I am NOT an employee of MarketingProfs, despite the designation "staff response." I am an independent consultant who has been involved with MarketingProfs for selected and well-defined projects.)


There are probably a dozen other questions, but these are the ones that immediately come to mind. Let's start with these.

Excellent questions! Thank you.

First, my initial target audience are people who fall into both categories as advertiser and consumer. A prime example would be a blogger. But also keep in mind that every "advertiser" is also a consumer. So my efforts are focused on advertisers first, and consumers will follow.

A very important component in the marketing effort will be the Mindshare Wholesaler program. A Mindshare Wholesaler is like an advertising agency. The wholesaler makes 15% on their client's spend at MyMindshare. In addition, the wholesaler can also convert referral credit into dollars that come from their client's spend at MyMindshare.

Here is how it would work for MarketingProfs:

First, MarketingProfs promotes MyMindshare to its readers, generating referral dollars ($5 for each good standing member of MyMindshare referred). Then MarketingProfs goes to advertisers with whom it has a relationship and says, "Here is a place (MyMindshare) where you can reach our readers in a highly targeted, direct, and purely pay-for-performance and permission-based manner. Not only that, but 100% of your spend will go to the people you are trying to reach, and you are in complete control of who you want that to be, and how much."

For MarketingProfs, it's another way to monetize their membership in a way that benefits their membership.

Today, I can set all this up for MarketingProfs. I just need somebody to work with, to answer questions, and demonstrate the system. I will do all the work AND the whole thing can be up and running at no cost.

Your questions are excellent, which means you are far from dense.

What I do is model different scenarios/assumptions in a spreadsheet, and then when actual data comes in, I plug the variables into the model to get clear picture of reality and how it compares to my assumptions.

Let's play with the numbers that you present. If MarketingProfs refers 50,000 people and they all become Good Standing Members (validated using PayPal), then it would have $250,000 in referral credit. Keep in mind that those 50,000 are bona-fide people who can be qualified any way an advertiser wants in MyMindshare, and lets assume that MarketingProfs referred good quality people (like it's typical user).

现在的10广告商。让我们假装Lis)trak is one of them (they are currently running a display ad on Marketing Profs). Let's say the CPC they are willing to pay is $.10 (I'm just guessing; with a little research I could find the going rate). And let's say they have a $5,000 budget, which means they have enough to reach all 50,000 of Marketing Profs referrals. Listrak pays MarketingProfs $5,000, and MarketingProfs transfers $5,000 (that's from the $250,000 referral credit) from it's MyMindshare account to Listrak's MyMindshare account, and places a $.10 bid targeting those 50,000 people.

Let's say all 50,000 people accept the bid. If all 50,000 people cash out their $.10, then I (MyMindshare) would be on the hook for $5,000. This scenario is why a $10 minimum is required to cash out.

Now let's multiply this exact scenario across 10 advertisers -- each with a $5000 budget and $.10 CPC. MarketingProfs makes $50,000 cash, each referral makes $1.00, times 50,000, so I am now in the hook for $50,000. But it's a potential future liability on my books because of the $10 minimum.

Now, let's multiply the scenario times 10, when the referrals can all cash out.

假设MarketingProfs 100广告商a $5,000 budget at $.10 CPC. That's $500,000 that goes to MarketingProfs. Since it has only $250,000 in referral credit, it has to deposit $250,000 in its MyMindshare account. Because MarketingProfs is a Mindshare Wholesaler, it gets a 15% discount on deposits, so they only deposit $212,500. At the end of the day, MarketingProfs makes $287,500 on this deal.

The referrals now have $10 in their account that they can cash out. When they cash out, they will be charged a 15% admin fee, so I (MyMindshare) am on the hook with a real liablility of $425,000, with only $212,500 in the bank. I end up $212,500 in the hole.

Sounds like a losing deal for me.

Here is how I make money.

Think of that $212,500 as my cost of acquisition of members. MarketingProf's advertisers are not the only advertisers who are interested in those 50,000 people. Also, advertisers will continue to bid for the mindshare of those 50,000 after the cost of acquisition has been covered. That is when I make money.

Also, at MyMindshare, there are other things that members can do with their revenue than cash out. They can use the revenue to place their own bids (e.g. classifieds) and they can donate revenue to causes. We might do a deal with MarketingProfs whereby members can use MyMindshare revenue to pay for premium services. Etc.

MyMindshare's business model is very much like an insurance company or bank. Funds are deposited or premiums are paid; funds get loaned out or paid out; profit is made on the spread in the time between the in and the out.

That being said, the potential for abuse is enormous (as we have learned in the latest financial meltdown). It requires absolute integrity, honesty and transparency, which is why I don't mind posting the business model in a public forum.

Thanks. That does make it more understandable.

I continue to believe it's very complicated, and that's one problem you'll have to wrestle with in order to present it in a digestible way.

The bigger problem I see is that you'd basically be asking your wholesalers to be doing the marketing for you. And because those wholesalers are not really in your business (they have their own businesses), this will be a distraction for them. It will take them away from their core businesses and their bread and butter.

There needs to be some way for you to take over the marketing function and not wait to find a wholesaler who will do it for you. It's priming the pump, and it's also taking control of your own destiny, rather than leaving it up to a bunch of wholesalers for whom this is a nuisance and a distraction -- albeit a potentially profitable one.

Finally, your wholesalers will feel some allegiance to their customers (also your consumers) and will not like the idea that these customers can't get their earned credits until they amass $10 worth. The slippage will be enormous (i.e., only a very small fraction will ever be able to redeem), and that could generate some ill will that will tarnish the wholesaler and potentially turn loyal customers into defectors for them.

I'd be interested to know if others share these concerns and if there are some good solutions that would address them and save an otherwise good concept.

A final point: Your wholesalers will want to know what assurance they have that you'll be around to fulfill the obligations and payoff the earned credits, given that you're operating at a deficit for quite a while. There may even be some laws or regulations about funding the contingent liabilities. Are you prepared for that?

Very good points.

You are absolutely right with regard to publishers as wholesalers, and specifically for publishers who do not do their own advertising sales.

Online marketers like SEO operations would make good wholesalers because they simply add MyMindshare to the list of products/services they offer their clients. But they would only make 15% of their client's spend (like an ad agency). They would not have the referral revenue that a publisher can generate.

I can see dropping the $10 minimum cash-out when cash flow is established and stable. Because I don't have $1million backing, I have to be very careful about balancing inflow and outflow.

It may be too risky at this early stage to push the referral program; it's the one thing that can run up liabilities very quickly ahead of revenue.

This brings me back to one of the questions I asked originally:

How are you planning to finance the venture? Unless you can demonstrate that the whole thing works, it's not likely that you'll be able to get the financing you'll need to get this off the ground.

There are no free lunches. Nobody is going to invest in this until they see how it's going to benefit them -- not a wholesaler or an angel investor or a venture capitalist.

Is there some way you can test the concept without spending a lot of money? Have you looked at constructing a concept test and letting a professional market researcher develop some estimates and projections? Somehow you have to "try it" and develop some hard data that will make someone sit up and listen.

只是讲述一个好故事,简化,当然可以-- isn't going to cut it.

If you haven't already read the MarketingProfs How-To Guide titledWhy Most Small Businesses Fail, I'd recommend you do so. There is also aseminaron the same topic, and you might want to spend the hour or so it takes to listen and digest what it has to say. I think these materials might prove to be useful resources for you.