Everything seems to be moving to the Internet and as an industry, it is definitely flourishing. But not everyone who advertises on the Internet is benefiting from this change. In fact it has become an extremely difficult arena for many companies to succeed in.

And that brings me to a story.

Gary Halbert-Copywriter

It’s been said that Gary Halbert, the great copywriter (actually one of the greatest copywriters of all time) was at a seminar teaching people about how to be good copywriters. He gave a scenario where if everyone in the audience owned a hamburger stand and he decided to put one right across the street, what advantages would they like to have in order to compete against him?

Everybody gave all kinds of answers such as:

“I would use the tastiest, freshest hamburger meat!”

“My prices would be the lowest!”

“I’d pick the busiest location!”

“I’d want a world famous recipe!”

“I’d offer customers credit, so they can pay later!”

“I’d have more staff to serve more people faster!”

“I’d sell my burgers wholesale!”

Apparently Gary listened patiently to all of their answers until everyone had finally given their turn. “Okay, he replied, smugly smiling the weathered, all-knowing grin of an old master.

“I’ll give you every single advantage you have asked for… I only want one advantage and, if you give it to me, I’ll whip the pants off all of you when it comes to selling burgers!”

Apparently everyone was listening very intently as he gave his final answer

“The only advantage I want is… a starving crowd!”

The previous quotation was taken from a book called “The Niche Marketing Black Book” from MarketSamurai.com. These guys have an interesting product that delves into how to find niche markets on any subject and use it to your advantage in marketing. It’s a well-written book and I highly recommend it but, I disagree with the previous story.

I hate to be the one to disagree with the great Gary Halbert, one of the most revered marketers of all time, but something doesn’t quite fit. Why doesn’t it fit you ask?

The reason is because I’ve just seen that exact scenario played out last weekend where 2 hamburger stands were right across the street from each other and the story wasn’t as Gary described it.

You see, earlier in the day I had taken my boys sledding in the snow in the nearby mountains. It was a brisk cold day that was perfect for sledding. After a few hours of getting bumped around and having a great time, we had had enough and headed home. Everyone decided they were quite hungry so I called my wife and told her we were going to get something to eat on the way home. I asked the boys where they really wanted to go and a few of the popular fast food joints came to mind. Wendy’s seem to be at the top of the list until one of the other boys saw a sign for In-N-Out Burger and we deided to go there.

IN-N-OUT BURGERS

As soon as we got near it we noticed an enormous line of cars waiting to go through the drive-through. We could tell that inside, many people were standing around with no place to sit. It was going to be hard to find a place to park but we had made up our minds, we really liked their fries and that’s where we determined to go.

We could already taste it.

As we waited for the stoplight to turn into the establishment, I turned my head to the right and saw Burger King sitting right there on the opposite corner. Not a single car was in line at the drive-through. There was only four or five cars in the parking lot and the place looked mostly empty.

I pointed that out to the boys that we had the option to go there, but we had already made our decision. We went through the light, turned the corner and found a parking spot, went in, ordered our meal, waited 10 minutes for a table to open up, scarfed down those delectable fries and headed home completely happy that we made this choice.

But the image of a totally packed restaurant right across the street from an almost totally empty one selling almost the exact same product has haunted me ever since.

Why would one company, In-N-Out Burger, who spends almost nothing on advertising have 10-20 times the customers of Burger King (who spends millions on advertising) on the exact same day under the same conditions? Is their food that much better? Do they have a bigger selection? Do they have a better image, brand, logo, marketing campaign, customer service, etc?

Most people would say that in almost every case, Burger King beats them. Burger King has a far bigger selection of food items. They spend far more money in advertising, their logo was designed and refined through endless focus groups over several years. They have top of the mind awareness on all kinds of television ads as their smart aleck King does all sorts of goofy things to people.

The Burger King Bar?

So why is In-N-Out Burger literally bringing home the bacon while in this case, Burger King was barely serving anyone?

I believe I’m about to reveal to you a secret that is so essential and is so completely and totally relevant to the world of Internet marketing (and marketing in general) that you need to take great heed to this message. This is so simple yet so powerful that I believe it makes all the difference between the two Burger places I’ve just mentioned.

You see, although I really like In-N-Out Burger’s hamburgers and especially their fries (but only when they’re hot) their food is really not THAT much better than Burger Kings. I mean we’re not comparing Burger King to PF Chang’s here, we’re comparing it to another hamburger place. All the major fast food chains offer burgers that are only slightly different in taste (although I know that some people disagree with that over-generaliztion and have sworn allegiances to their favorite brand. I’m just glad that McDonald’s finally recently improved the taste of their burgers. I refused to eat there for years!).

The prices aren’t that much different. The selection is incredibly smaller because they don’t offer a $.99 value meal, chicken strips, salads, and endless assortment of side dishes, kids meals, tofu options, anything vegetarian, etc. They basically only have three sizes of the same hamburgers, one size of fries and the usual brands of drinks and some shakes. Thats it. And it all fits on a small menu just above the order takers head.

They were located right across the street from each other so that can’t be a real big factor, in fact, I got off the freeway on the same side of the street as Burger King and had to cross the street to get to In-N-Out Burger, so that rules that out. They weren’t offering hamburgers at wholesale or on credit, they actually have less room to eat in and people were standing around, the company isn’t new (since 1948) so it’s not one of those phenomenons relating to something brand-new and exciting.

So what is it that makes it so successful and have more people eating there?

You see, Gary Halbert was wrong. Both of these places had the exact same customer base: starving crowds of people. They were all driving by the same street. There were no special signs anywhere advertising a reduction in costs or free fries with their order (there actually may have been some on the Burger King place-those kinds of signs are always there). They were all looking for a quick and tasty meal but 20 times more people chose In-N-Out Burger than Burger King.

Gary Halbert was right if you were thinking about wanting to establish a business and deciding which business to go in. Yes, of course, you would want to find one where people are clamoring for your product. But I believe he is incorrect in this instance when comparing competitive strategies between those in the same industry. They already have the same crowd of starving customers.

And that brings us full circle to the beginning of my discussion-why do some companies who market on the Internet succeed while others don’t? How do some companies manage to spend a fraction of what another does and get tremendously better results?

If you thought trying to find your ad in a newspaper was difficult, it can be far worse on the Internet. One of the things that is so appealing to those who want to advertise or market on the Internet is its low cost. In many cases it’s extremely low. There isn’t the giant expense of television towers, radio waves, huge printing presses, etc. to get the message out. Everyone with computer access can market on the Internet.

But that low-cost alternative can be extremely expensive. For many people, some estimate well over 90%, they don’t succeed in getting their message across. They waste their time and effort and how much does that cost?

Just send me your basic information, and I’ll reply with an answer that has tremendous impact on your Internet marketing decisions, in fact all of your marketing decisions. In fact, some of you may not choose to market on the Internet at all after reading what I am about to reveal, its that powerful.

I promise I won’t spam you, that’s not my goal. My goal is to help companies market themselves on the Internet, not use subversive or illegal tactics to accomplish this task. and if you don’t like information, you can always delete and it’s easy to opt out of getting any more e-mails from me.

I just think it’s essential that people understand this vital principle of marketing can not only save you hundreds or even thousands of dollars, it will help you find more targeted customers, ones that are looking for you.

Once you realize this, it can totally set you free and save you a fortune. I mean think about it, In-N-Out Burger is an old company, with an old-style, a limited product offering that doesn’t hardly advertise anywhere. Yet it creams its competitor right across the street because it understands one principle of marketing and has stuck with that principle. It hasn’t gotten diverted into endless options and programs. It has a brand and sticks with it. It knows where it fits in knows where it doesn’t.

I look forward to hearing your comments about this principle. Just fill out the form to the right and I will get back to you soon.

The Internet has made Crowdsourcing Viable

Crowdsourcing has replaced a number of those internal design teams with consumer created designs and products that businesses only then produce when enough orders have been placed, thereby greatly reducing the risk (Boutin, 2006).
Since the Internet is “likely to reinvent tried-and-true models” (Rappa, 2009) the purpose of this study is to expose this trend to businesses that are unaware of its impact so they may decide whether they must adapt to it or not. This is a review of 3 articles written on the subject of crowdsourcing and what they have discovered on the subject.

The first site under review is from Wired.com with an article entitled “The Rise of Crowdsourcing” (Howe, The rise of crowdsourcing, 2006). The article covers the subject of crowdsourcing from four different examples. It starts off with a story about the project director at the National Health Museum in Washington DC named Claudia Menashe. She needed some photos of sick people and several years earlier had run across a stock photo collection by a photographer named Mark Hamill out of Manhattan Beach California. There was some discussion about the price of the photos and since it was for a nonprofit organization he gave her a discount equal to about half what a corporate client would pay and thus a total sale of approximately $600. After several weeks the offer was refused because Claudia had found a company called iStockphoto, which sold photographs for approximately $1each.

The article goes into fairly detailed information regarding iStockphoto and how it shook up the stock photo industry. The main reasons given were the fact that digital cameras have greatly improved an average photographer’s ability to get a somewhat decent photograph, thereby opening the door to millions of would-be photographers. These photographers can easily contribute to iStockphoto’s archives because of the Internet and the fact that there was no loss in quality because of film production or scanning and that makes them very competitive in this creative industry. Combining a digital image with a program like Photoshop, which allows for infinite alteration, the article then claims that the day of the high-priced photographer is almost dead.

The last piece of the profitability equation in the photography world was a micro-payment system that allowed these new photographers to be able to receive a commission on every purchase. For example, instead of selling one photograph for $100 they would sell one photograph 100 times at a dollar each. The professional photographers have had to dramatically change their business model and even made statements such as “I just don’t see much of a future for professional stock photography.” (Howe, The rise of crowdsourcing, 2006, p. 1)

The next story called “The Packager” shows how viral videos have made a dramatic change in VH1, the music television station (Howe, The rise of crowdsourcing, 2006, p. 2). They created a program called “Web Junk 20″ which featured the 20 most popular videos shown on the Internet in a particular week. This became a way for the station to provide entertaining programming at a substantially reduced rate and in the process, increased viewership because the people producing the videos are the ones watching the show. In other words the viewers create what is viewed. This user-generated content is then part of a large award ceremony each year to spur competition and increase viewership.

The third article on crowdsourcing is called “the Tinkerer” (Howe, The rise of crowdsourcing, 2006, p. 3). It talks about a company called InnoCentive which posts difficult scientific problems on their website and anyone in the network can take a shot at cracking them. Those on the network must be approved to provide information on such a subject and it is not open to everyone on the web. Those who do solve the problems are paid anywhere from $10,000 to $100,000 per solution and more than 30% of the problems have been solved this way. This proved to be a significant savings over in-house research firms and a greater increase in the number of problems solved. Other similar companies are using crowdsourcing networks that allow companies to find and hire retired scientists for one-off assignments. It also shows how using crowdsourcing has improved the profits of Proctor and Gamble and increased the number of new products it produces.

Crowdsourcing Effects All Businesses

The last of the four articles is called “The Masses” (Howe, The rise of crowdsourcing, 2006, p. 4). It shows that by using a web-based marketplace, companies can find people to perform tasks that computers are generally lousy at, like: identifying items in a photograph, skimming real estate documents to find identifying information, writing short descriptions, transcribing podcasts, etc. He gives a number of examples of companies who have used this technology such as Amazon.com, Alaska airlines, and one called iConclude outside of Seattle Washington. It shows how this last company reduced its expenses for a particular project from $2000 down to just $5 by using crowdsourcing.

The information presented by Wired.com seems to be very reliable and valid. There is no apparent ulterior motive in presenting the information even though there is no documentation as to the sources of the story unless it is the author himself. But there is one person who claims, “that Wired Magazine is a publication of general interest topics although its mission is not clearly stated. What is clear is that Wired Magazine is not a scientific or technical journal” (Lange, 2006). He goes on to say that, although he is writing about a completely different subject than discussed here, that of vehicle theft by circumventing the transponder systems, “Wired Magazine is not a publication bound by scientific foundation nor are the articles subject to traditional protocols of scientific scrutiny such as the “peer review” process” (Lange, 2006). In such a fashion almost all magazines fall into this category and should not be compared with the same level of value as a peer reviewed paper.

The next website under review is from BusinessWeek.com. The article is called “Outsourcing: Consumers as Creators” (Boutin, 2006). It describes a trend that allows customers to help design the products they buy but tells them not to expect to get paid a fortune for their brilliant idea. It goes into a detailed explanation about a company called “Threadless”, a Chicago-based T-shirt manufacturer whose design process consists entirely of an online contest. People from all over the country submit their designs to be voted on by the masses and the 4 to 6 highest-rated designs are then put into production, but only after enough customers have pre-ordered the design to ensure it won’t be a money loser. The winners receive $2000 in cash and prizes but the real motivation is just to see their work worn in public.

Threadless Shirt Designs

For customers it provides a wide range of choices and from the company’s point of view they don’t have to hire a design staff. They only produce shirts that are pre-ordered resulting in dramatic risk reduction. Another example they give is of a Japanese specialty retailer of custom furniture designs that follows a similar pattern. People submit their designs that are then voted on and analyzed by the viewers and goes into production only after they are ordered.

Business Week should be considered quite valid and reliable because of the fact that they have gone to the extent to put up a page of their code of ethics that every writer and journalist promises to follow which is part of the McGraw-Hill Companies code of ethics and The American Society of Magazine Editors (Business Week, 2005). References to their standards are listed on that site.

The next website under review is from Adage.com or Advertising Age. The title of the article is called “Can Creativity be Crowdsourced?” (Schmitt, 2009). This discusses crowdsourcing from an advertising point of view and shows that certain websites like OpenNet.net and Crowdspring.com offer advertising, marketing and design ideas via the crowdsourcing method where, in one example, a network of more than 11,500 creative people from more than 125 countries contributes their designs. A request for a simple logo generated over 1200 submissions.

Many other companies are also reviewed on this site such as those that do graphic bookmarking services; interfaith designers looking for inspiration to solve common design problems; those focused on sharing colors and pallets; etc.
But this article also goes into the discussion of companies fighting such activity. “For marketers, crowdsourcing creative services pose both great risk and rewards.” They even point out that there is even an online organization called “No!Spec” actively trying to educate designers on the perils of participating in these services.

As for the validity and reliability of Advertising Age it must be remembered that this is also a journalistic organization and well established for many years and not a fly-by-night company. Yes, they are writing about something that has had a dramatic effect on their industry but that will also be of value to those in that industry and help them to see what is happening.

In conclusion, the overall theme of each of these articles and stories is the same: outsourcing certain tasks to the crowds or masses reduces costs and increase creativity, thus it is called “crowdsourcing” and could be likened to the ultimate “design by committee”, a phrase usually associated with poor design and needless complexity (Wikipedia, 2009), yet in this case results in the best solution at the lowest cost. The main reason this phenomenon exists is because of the Internet.

It has been said that, “tools does not a designer make,” (Croft, 2007) but having the tool of a computer in the hands of millions of people opens the doors to all sorts of individuals to chime in, whether they have talent or not. But when an artistic person in a poor foreign country creates an acceptable design and only needs to make a few hundred dollars a month to survive, it logically makes it very difficult for someone who needs a few thousand dollars a month to compete.
While there is much resistance to the implementation of this trend, Eric Schmidt probably said it best: “the crowdsourcing of creativity is proving that a great idea can come from anyone, anywhere. The question then is not whether our industry needs to adjust, but how quickly.” (Schmitt, 2009)

References

• Boutin, P. (2006, July 13). Crowdsourcing: consumers as creators. Retrieved Oct 17, 2009, from Business Week: http://www.businessweek.com/innovate/content/jul2006/id20060713_755844.htm
• Business Week. (2005, Apr 20). The businessweek code of journalistic ethics. Retrieved Oct 23, 2009, from Business Week online: ethics statement: http://www.businessweek.com/ethics.htm
• Croft, J. (2007, Sep 30). Tools do not a designer make. Retrieved Oct 23, 2009, from Jeffcroft.com: http://jeffcroft.com/blog/2007/sep/30/tools-do-not-designer-make/
• Howe, J. (2009, Sep 1). Goodbye to all that … and hello to all this! Retrieved Oct 17, 2009, from Crowdsourcing: http://www.crowdsourcing.com/
• Howe, J. (2006, June). The rise of crowdsourcing. Retrieved Oct 17, 2009 from Wired: http://www.wired.com/wired/archive/14.06/crowds.html?pg=1&topic=crowds&topic_set=
• Lange, J. (2006, Oct). A review of wired magazine article “pinch my ride” by Brad Stone. Retrieved Oct 23, 2009, from Langetech.net: http://www.langetech.net/uploads/Response%20to%20Pinch%20My%20Ride%2010.03.06.pdf
• Rappa, M. (2009, Jun 1). Business models on the web. Retrieved Oct 17, 2009, from Digital Enterprise: http://digitalenterprise.org/models/models.html
• Schmitt, G. (2009, Apr 16). Can creativity be crowdsourced? Retrieved Oct 17, 2009, from Advertising Age: http://adage.com/digitalnext/article?article_id=136019
• Wikipedia. (2009, Sep 17). Design by committee. Retrieved Oct 24, 2009, from Design by committee, wikipedia, the free encyclopedia: http://en.wikipedia.org/wiki/Design_by_committee
• Winkler, R. (2009, Apr 2). Marketing basics. Retrieved Oct 17, 2009, from Reuters: http://www.reuters.com/article/SmallBusinessLaw/idUSTRE5314ME20090402?pageNumber=3

(This article was an assignment for the Masters Degree in Internet Marketing course at Full Sail University, Oct 2009)

1-Do you need additional sales or customers for your business? Believe it or not, some people don’t need additional sales and are doing fine just supporting their existing customer base.

2-Do you have a website or a least a webpage to show your business on the Internet? While every business may not need a full fledged website, we can’t think of anyone (nor can most business publications including BusinessWeek.com) who can’t use a least a webpage, a single page of basic information to be accessed with the quick search.

3-If you do have a website, how is it performing for you? Are people able to find it? Are you generating leads on a daily or hourly basis for your products or services?

4-Supposing again that you do have a website, how are you marketing it? The reality of placing an unanalyzed website on the Internet is akin to the phrase, “if you build it, they won’t come!”. Every website must follow basic search engine optimization techniques (SEO) in order to be found.

5-If you have tried marketing your website in the past what have you found that worked for you?

6-Are you taking advantage of the latest in social media such as: Twitter, Facebook, MySpace, LinkedIn, YouTube, etc. to bring in additional sales?

7-Do you realize that it is now very easy to use geo-targeting technology to market your business to local customers only? You don’t have to go to the expense of trying to broadcast to the entire world and since 62% of all people who search for businesses or products on the Internet are looking for local providers anyway.

Our company can help you in every single one of these areas. If you currently have a website we’ll take a look at it and see how it is performing. If you don’t have a website, we can create one for you and have members on our team with the capability of creating any type of website from the simplest of HTML landing pages to complex e-commerce monsters.

We will then give you a proposal for which basic Internet marketing avenue we recommend pursuing to attract more customers and business.

We also have a number of interesting methods and programs to market your business to local customers only. This can be a profoundly powerful source of income and sales for you.

Please give us a call today at 775-722-4949 schedule a free, no hassle analysis of your current Internet marketing programs and our recommendations of how to make it better.