Archive for the “economics” Category

Everybody loves advertising, so I figured I’d share some tips about advertising on Facebook that have accumulated on my plate after a few different jobs and consulting projects using them.

o. You can get started with Facebook ads on the cheap. Anybody can run ads on Facebook on a CPC or CPM basis (and I’ll wager that they’ll roll out CPA after a while) with a few dollars and half a clue.  Results improve with additional dollars and clue.

1. Facebook ads are not behavioral, and they’re not search ads either. In the main, you can target Facebook ads at facebookers based on what’s in their profiles – location, age, relationship status, gender, employment, stuff they like, etc. This info is self-reported and subject to the categories that Facebook has created. This is not the same as search ads that target people based on what they just an instant ago typed into a search engine.  Adjust your expectations accordingly.

2. There’s some serious freshness bias. I’m willing to bet that the first (full) day you run an ad, you’ll get more impressions and more clicks than any other day after that.   I don’t know for sure why that is (or even if it’s universally so) but I suspect that the ad serving system is biased towards newer ads.  It’s also possible that the Facebook community gets immune to your ad very quickly.  In any case, I find that making small modifications to you ads on a weekly or even daily basis can help mitigate this effect.

3. It’s got nothing to do with advertising, but you can use the Facebook ads interface – for free – to do some quick and dirty market sizing. Just go in as if you were creating an ad, and play with the targeting options to get exciting factoids like the number of people on Facebook who are single, in your geographic area, and like dogs.  You can get all that info without even writing any creative or paying for any ads.  But be careful about generalizing this info as Facebook adoption isn’t uniform around the world or across demographics.

4. Help is available – for a price. Facebook has some ad service people who will talk to you if you’re buying at least $15k/month in ads. Furthermore, they will under some circumstances provide you with a “business account” – a separate login to the ad system that’s not linked to anybody’s individual profile, a definite plus for businesses.  On top of that, sometimes they can be convinced to provide a bulk ad upload capability.  This would seem to be in their interest as it lets customers run lots and lots of ads.  Note that in order to run ads promoting your fan page, you’ll have to make the business account a page admin, which you can do only by email address, since the business account doesn’t really have a profile.

So do I recommend Facebook ads? I’m not going near that question, I’m just sharing some things I’ve discovered.  Do your homework, test a little, double down if it’s working for you.  Advertising is key to Facebook’s world-domination revenue goals, and in the short time that I’ve been working with Facebook ads, I’ve seen them invest a lot in the capability.  While they still have some distance to go, they provide some opportunities that you can’t get with seemingly similar search ads on the more mature Google and Yahoo ad networks.  And, I might add, Facebook’s ad system is parsecs ahead of LinkedIn’s.

Your mileage will vary, but I hope you’ll share what you find too.

Well, here’s one thing that doesn’t seem to be in evidence in Sicily: a burbling startup scene.  I dropped in at Web Innovators 26 (it seems only yesterday I was at Webinno18) at the Royal Sonesta to check out the demos and pitches.  As usual, there were some “main dishes” that got longer demo spots and some “sides” that got 15 seconds.  All had tables and the big ballroom was packed.

Maybe it’s the recessionary times, but I noted that the companies on offer seemed to cluster around the more basic of human needs.  Not to say they weren’t smart and sophisticated ideas.  Here’s a rundown, and then I’ll get to the strange underwear theme that ran through the evening like an elastic waistband.

Birchbox, a “new concept in beauty retail” that sounds just a little bit like a fancy coffin.

Chargify, a recurring billing service for serial entrepreneurs who have better things to do than worry about dunning and fraud.

DoInk, a community of “artists, animators and doodlers” reusing one another’s artwork to create animations and drawings.  they ran away with the audience choice award by a wide margin, and many tweets reminded people to “show this to the kids.”

JitterJam, some “web-based social marketing software”

manpacks, just what it sounds like, automated underwear delivery for “busy men”

Milabra, a “Visual Intelligence Platform” that serves up ads based on the color and content of a website’s imagery. Smart MIT guys, cool technology, kinda sluggish demo.

RelayRides, like Zipcar but with your car. Or maybe like Circle Lending but with your car. I like the idea that they allow more driving with the existing fleet of cars.

Trustmarker, a provider of “digital trustmark networks” which are, um, those things, you know, like verisign, but your own. I think.

Marketeers have heard endless variants on Maslow’s Hierarchy of Needs and the philosophy of selling “medicine, not vitamins”  but I thought this was largely (not entirely!) a refreshingly down to earth bunch of startup ideas.  What’s more basic than entertaining kids, feeling good about how you look, building trust, and getting around town cost-effectively?

But those concepts are as often as not boring or undifferentiated.  And that’s probably why what’s arguably the most absurd of the ideas – manpacks – was the one that everyone, even the other presenters, was taking about.  As the Lorax pointed out, you do not need a thneed, and as I am pointing out, if you’re too busy to pull together some underwear, you need to re-think your business.  But the image of busy (or more likely, lazy) men ordering a tailored internet subscription to their, um, unmentionables, has a strange appeal.

Manpacks is the youngest of the webinno companies – the only one founded in 2010 – and it’s already got a bunch of press.  I have no idea if it has or deserves any customers.  Maybe it’s just a brilliant publicity stunt for some other business, but it helps us ask two good questions…

1. does your business actually solve a real problem?

2. have you built a story around it that would make anybody care?

A lot of the people who said that microblogging or Twitter was the Big Thing of 2008 or 2009 are saying that location or Foursquare is the Big Thing of 2010 or beyond.  I don’t know if Foursquare is played yet, or if Twitter already has jumped the shark, but I’m starting to worry that the actual, physical concept of location might be on the way out as businesses evaporate from downtowns, especially in my own Central Square.

Earlier this week, I noted a bit in xconomy singing the praises of Central Square as a new startup hub, singling out a particular office building and featuring a couple of its startuppy tenants.  I’m all for it, having previously noted Beta House and OpenCoffee among others.  Plus, Central is home to Harmonix Music.  Good news, to be sure.

But the day before that article, Hollywood Express closed their Central Square store, adding to a distressing list of businesses vacating Central Square and its environs.  In fact, I was both pleased and saddened to discover an entire blog devoted to the disappearance of businesses along Cambridge’s Massachusetts Avenue.  Compare for example my February 2009 post on the decline of the furniture cluster to Empty Mass Ave’s post on the same topic in February of this year.  Apparently, we’re all in this together.  Empty retail space around Central now includes the long-gone Gap, Pearl Paint, all those furniture stores, the space next to the Central Square Theater, and I’m sure more.

The other good news is that restaurants seem to be thriving even as retail suffers – Rendezvous, Four Burgers, Craigie on Main and Garden at the Cellar are all great –  but I can’t help worry that we need a bit of everything to make a neighborhood that all those fancy startup types will actually want to inhabit.

We can blame the economy for some closures, especially the furniture stores.  We can blame changes in technology and media for the demise of record stores, video stores and maybe even bookstores. We can blame landlords, that’s always popular.  I think we often forget to blame ourselves for not shopping, working and doing business enough in our own neighborhoods and cities.

Chicago is all about meat.  Chicago Beef hot dogs.  The Bulls.  The Bears.  Mrs. O’Leary’s cow.  So naturally, on a recent semi-professional jaunt with Prof. M, we sought out some excellent vegetarian food with photo power-couple LKB+BEM.  Our destination: Green Zebra.  Our lament: how can there not be a modern American veggie restaurant anywhere near this good in the greater Peoples Republic of Cambridge area?  (Feel free to skip directly to the comments to point our my oversight on this count, I’ll be doing a rollup [sic] of high-end veggie options around Boston in a future post.)

Green Zebra is a real find in an unassuming Chicago neighborhood, not so far from a place that advertises burritos “as big as your head.”  Orthodox vegetarians and vegans be warned, it’s not 100% vegetarian (there’s usually one seafood item on the menu, scallops this time) and there’s plenty of butter, eggs and cheese.  I don’t know how many dishes were strictly vegan, but I didn’t feel overwhelmed with dairy as sometimes happens with Indian vegetarian food, at least in the USA.

We enjoyed an array of small plates and my camera skills declined as the evening wore on and bottles were drained, so I can’t say for 100% certain that these items are exactly as labeled.  They aren’t really in order either, but there were to a plate, delicious and beautifully constructed. I would single out the spinach crepe with oyster mushrooms as a standout, but the field was very competitive.

The waitstaff surely thought us mad, cackling with glee as we divided even the smallest plate in four.  Green Zebra isn’t cheap, it’s certainly a special occasion place, but if you don’t live in Chicago, every time you visit is arguably a special occasion.  Meat eaters might question the bill with “that much for just vegetables?” but we were more than satisfied.  If I had to give a down note in my review, I would say that the place is a little too quiet, as if full of monks gravely consuming their gruel.  Food in general is worth celebrating, and food this good deserves some hoopla.  One could also quibble that the ingredients couldn’t possibly all be local or seasonal (tangerines in Chicago in February?) but I hope that at least some were from the great farms of the midwest.

So… back in Boston, we ponder the conundrum: how can such vegetarian excellence exist in the midst of cattle country and but not here in enlightened liberal studentopolis?

Surely the demand exists.  Students might not be able to afford the likes of Green Zebra often, but their parents must visit sometimes.  Organic food, yoga studios, Buddhist temples, pet spas all suggest affluent vegetarians are about.

Surely the raw materials exist.  Farms and farmers markets thrive.  Locovorism is on the rise.  Even accounting for

Surely the talent is here.  Boston ranks well for both density and quality of restaurants and boasts some top-notch culinary schools.

Surely the business model is proven.  Restaurants are tough business no matter what, but low-end vegetarian restaurants get by, and high-end omnivore joints too, so why couldn’t a high-end veggie place?  Green Zebra seems to have no trouble with high prices and full tables.

I’m at a loss, and it’s Boston’s loss too.  Until then, when you’re in Chicago, be sure to balance out your beef intake with a visit to Green Zebra.

I noticed an ad for a major airline selling the fact that they don’t charge for (the first couple of pieces of) checked luggage.  And as my premier status on various airlines ebbs, I find myself charged even for the first checked bag more and more often.

Despite persistent rumors that they will soon start, no airline that I know of is charging for carryon baggage.  Here’s why I think they’ve got that backwards: Charging for checked luggage encourages people to carry on more and larger bags.

So what, you say?  It’s their own burden to carry and stow the stuff.  Perhaps so, but it also makes the boarding and deplaning processes much longer for everybody, and according to the Flight Attendants Union it also causes thousands of injuries a year to passengers and airline personnel.  The very people who carry on a larger bag because they want to save time by not waiting for baggage claim are delaying everyone in boarding and everyone aft of them in deplaning.

When overhead storage space is free and unassigned (you have no particular claim to the space above, unlike the space under the seat in front of you which seems to be part of your tiny purchased real estate) you get the classic tragedy of the commons as there’s no disincentive to overusing the resource.

In short, airlines are lax about enforcing size and quantity limits on carryon bags when a simple schedule of fees would take care of the problem for them.  And the best part is, if you’re too cheap to pay the additional carryon bag fee, you still reap the benefit of getting on and off the plane faster!