Monday, July 30, 2007

Trouble in High-End Prince George

I just found a great story on the Western Standard site in which Edmonton writer Ric Dolphin tells a fascinating first-person story about a sure-fire business he started last year.

“To Prince George and back” tells how Ric and a partner opened up a “higher-end consignment store” for furniture, art and antiques in the boomtown of Prince George (pop. 80,000) , in the B.C. interior.

The story recounts the reasons he thought it would work, and all his startup hassles. I’ve worked with Ric before, and it’s all written in his vigorous, personal style that’s a treat to read.

Check the story out here.

Like many entrepreneurs, however, Ric misread his market. Here’s how it ends:

"As summer turned to fall and then winter, as the effluent from Canfor turned into a crystalline fog that hung over the downtown bowl like a toxic Slurpee, and as my store at 15th and Central struggled, these pessimistic realizations scared away the bluebirds of an earlier time. Customers liked the store--if I had a dollar for every time I heard the phrase, "Just what Prince George needed," I'd be rich--but there weren't enough of them. Despite a visible location on a busy commercial avenue; despite radio, newspaper and mail-out advertising; despite positive word of mouth, our sales remained flat and profit elusive. Moreover, the supply of consignment items, which was to be the backbone of the business, was of insufficient quality or quantity. After six months, my partner--the guy with the money--decided to cut his losses and Nicestuff Quality Consignment closed its doors.

"Faced with unemployment and indulging in what the shrinks would call transference, I began reciting the cruel jokes about poor old P.G. and blamed the ball-cap-wearing, pickup-driving Value Village addicts who wouldn't know quality or beauty if it bit them in their baggy-assed jeans. One tries to raise the tenor of their miserable little lives . . . et cetera. …

"So, enough transference. The store didn't work because Prince George is not a large enough market for such specialized trade. We feared this might be the case and were proven correct. Despite the smell, I rather liked Prince George. The surrounding mountains, forests and lakes are beautiful, the winter isn't quite as harsh as Edmonton's and the populace is friendlier. Unfortunately, I don't think the city has much of a future. But then I have sometimes been known to be wrong."

Best-Ever Entrepreneurship Quotes: Week 43

Here is for your motivational Quote of the Week, personally selected to get your week off to an empowering start.

"You are the agent for your customer."

Wal-Mart founder Sam Walton, 1918-1992.
From his 1992 book, Made in America: My Story.

Such a simple statement, yet oh so powerful. Are you "the agent" for your customers? Do you always strive to give them the best value, the most worry-free service, and reason to trust you forever?
And if not, why not?

Friday, July 27, 2007

Six Steps to Raising Cash

In an article today at imediaconnection.com, Wall Street consultant Jeff Stone of Crescent Fund offers six guidelines for business owners seeking to raise funds for expansion. You can click here to read the original post, or read my summary below.

1. “Create a comprehensive document that demonstrates how the initiative that requires funding is aligned with the company's overall strategic plan. How exactly will the money be used, and which strategic objective will it help to meet?”

2. “Establish precisely how much money is needed to accomplish the endeavor.” Not knowing how much you need is a sign of poor planning and could lead to a shortfall or poor execution.

3. “Determine which type of financing works best: debt or sale of equity." Keep in mind that "debt successfully serviced means being able to postpone the sale of equity until a succeeding stage of growth when the business has become much healthier” - and when you can hopefully sell less stock for more money.

4. “Provide accurate, timely and complete information to investors, including an honest expectation of return on investment.”

5. “Never proceed with the planned venture until the full amount of necessary capital is in the bank.” Undercapitalization, says Stone, is both common and dangerous. “Many companies procure a portion of the capital needed and then rush into implementation in the hopes of raising the remainder along the way. In almost every case, the economy works against them, and the shortfall turns the entire project into an unrecoverable investment.”

6. “Never raise more money than needed to meet the objective.” Selling more equity than required dilutes your ownership position. And why pay interest on unneeded funds?

According to Stone, long-term business success boils down to “simple good business practices revolving around an intelligently crafted plan and a series of smart financial decisions that align each expansion phase in the direction of the long-term strategic goal.”

Thursday, July 26, 2007

Selling in Person

Markham, Ont. marketing consultant Keith Thirgood offers great advice today on selling in person in the latest newsletter from his firm, Capstone Communications.

Since the article doesn't seem to be online at their website, http://www.capstonecomm.com, I will paraphrase.

Thirgood’s starting point is a question from one of his clients: how should sales people use sales and marketing materials when meeting with clients?

If you're talking to a large audience (10 plus), Thirgood suggests using PowerPoint to illustrate key points. (That's "illustrate," he insists: “Don’t reproduce every word of the presentation in heavy, tedious slides.”)

But with smaller audiences, PowerPoint is inappropriate – even uncomfortable, when pitcher and prospect are both staring at a computer screen instead of making eye contact.

“Printed materials that the salesperson can hand to the prospect, write on, circle important points on, etc., are more effective,” says Thirgood. “These sales support materials should be clean, simple, colourful and of a personal rather than ‘corporate-speak’ nature.”

Save marketing brochures and spec sheets till the end, he adds – they're usually too formal and complex to make good sales tools.

But they do have a role to play. Near the end of the meeting, the salesperson should gather the sales sheets he or she has been using, and with great dignity, “put them into a company-branded presentation folder along with spec sheets, the corporate brochure anda pre-done sales letter.”

Assemble your package carefully, says Thirgood. “Make it like a gift, not a rushed afterthought. Make it feel like something of value. This way the package is more likely to be kept and the spec sheets passed on to their technical staff for evaluation.”

In sales, it’s the little things that make you stand out.

Monday, July 23, 2007

Best-Ever Entrepreneurship Quotes: Week 42

Here's for your motivational Quote of the Week, personally selected to get your week off to an empowering start.

To celebrate the biggest marketing event of the year, here’s a quote from J.K Rowling’s Harry Potter and the Deathly Hallows:

“Just because it's in your mind doesn't mean it's not real."

I won’t spoil the book for you by telling you the context. But it’s a key thematic line that should resonate with anyone who believes in hopes, dreams and visions – the hard currency of any entrepreneur.

Sunday, July 22, 2007

Snarky or sincere?

Some people have said they like my blogposts better when I'm being snarky than when I'm being my naturally positive and sincere self.

If that's the case, let me direct you to the latest post on our sister site, Selling to Small Business, where I surgically criticize a little outfit called Dell for messing up its latest pitch to Canadian small business. There may even be a few positive marketing lessons to learn from this post - although no Canadian entrepreneur I know would make as many mistakes as Dell does in this four-page brochure.

Click here for the link.

Saturday, July 21, 2007

The Talkative Juror

I didn't intend to blog again about Conrad Black, since he's not so much a Canadian entrepreneur as an anti-preneur. But Toronto Life's stalwart Black-watcher, Doug Bell, has a scoop of sorts in his blog: a series of email conversations with a talkative juror from the Black trial.

Among Jean Kelly's comments:

On the lawyers in the case: "Greenspan was the worst by far, just as arrogant as Mr. Black. I would have to say that other than Ron Safer, Patricia Holmes and Julie Ruder, nobody really impressed me. "

On the non-compete clauses: "Non-competes are a common practice in the industry. We saw many similar cases involving executives from a defense witness...

"Don’t get me wrong: I do believe Mr. Black did wrong by the shareholders. The transactions he was acquitted on had proof that they were approved and disclosed. Although late and vague, the “paper trail” was there. There was also the issue of a signed, legal, binding document. Nobody forced the buyers to sign the papers at closing. I think this should be a civil case, and from what I’ve read, it is. I hope they get some of their money back."

On Conrad himself: "I believe Mr. Black thought it was his company, he made all the money for the shareholders and thought he deserved some for himself. I truly believe he thought he had every right to take that money and, with the committees he assembled, had a green light all the way."

On the "obstruction of justice" conviction: "Defense tried to say that Black wasn’t aware of the court order at 10 Toronto Street. That’s just bogus. Pointing at the cameras was bad enough; actually carrying out the boxes himself was what did it for me."

Lots of other good stuff - but read the "comments" that follow that article at your own risk. A lot of people who followed this trial should be spending more time outdoors...

Click here for Doug Bell's full article.

Thursday, July 19, 2007

Telling friends from foes

I’ve just been talking with some young entrepreneurs in the third year of their business who say that when they started, they had no end of friends and other contacts warning them not to go into business. “You shouldn’t go into business with a friend,” they said. “You shouldn't work with such a new type of product. You shouldn't take a chance.”

They didn't listen, of course, so they're right in the middle of it: living the dream, dodging the cash-flow monster, falling slightly behind their projections as they slog through the swamplands of “doing just well enough to keep going, not well enough to relax.”

My question is: were those friends doing them a favour or a disservice by trying to warn them off?

I’ve met many entrepreneurs over the years who would have been much better off if someone close to them had taken them aside much earlier and said, “This business of yours is a crummy idea. Forget about it.”

Instead, many people think they're doing their friends a favour by saying, “this cheese dip is great. You should sell it through Safeway,” or, “You have such a flair for decorating. Why not do this as a business?” Most of these people have no idea what’s involved in starting a business – or how trivial the new product or service is compared to your need for business savvy, raising startup capital, marketing ability, perseverance, networking, using contacts and maintaining relationships, managing people, etc.

But then, it’s not their money.

Don't let either the eager beavers or the nay-sayers determine what you're going to do. By all means, listen to both sides. But make them work harder for the privilege of telling you what they think.

Ask them to back up their statements. Why do they think you should open up your own store: do they know anyone who has done that successfully? Why does Uncle Fred think you shouldn’t go into the landscaping business – does he have first-hand knowledge of how tough it is?

When you turn some of the “noise” around your business idea into information, you are bound to make better decisions.

Europe's Best Opportunity?

My daughter just got back from a cruise of the Baltic Sea region (verdict: rainy, cold, absolutely fascinating!). She was especially keen on Estonia, a country she had barely heard of. In fact, since it has been dominated by Russia/the Soviet Union for most of our lives, few of us know much at all about Estonia or its neighbours, Latvia and Lithuania.

InfoExport Canada, the federal agency that helps exporters, is hoping that will change fast. It’s urging Canadian entrepreneurs to catch on to the opportunities presented by these three “Baltic Tigers.”

“Since accession to the European Union in 2004, these countries have posted the highest growth rates of any member country. So it comes as no surprise that American, European, Nordic and Asian companies have set up shop there to sell, invest and use these three countries as launching pads to the more than 640 million consumers in Russia and the EU.”

Canada's ambassador to Latvia, Lithuania and Estonia, Claire Poulin, says now’s the time for Canadians to do business there. "They have only been independent for 16 years, which is very little in the history of a country, so what they have achieved so far is nothing short of amazing."

Estonia is now Europe's leader in e-government and e-education, and Lithuania is a transportation powerhouse. "For Canadian companies, some of the biggest opportunities in all these countries can be found in construction and building products (including green building products), the agri-food sector, information and communications technologies, and energy and environment," says Poulin.

She says the infusion of massive infusions of EU 'structural funds' are fuelling a boom in residential and commercial construction, as well as energy, railways, roads and IT.

“Since the EU funding won't last forever, Canadian firms might want to explore this potential right now,” says InfoExport.

A caveat: Fifty years of Soviet rule left a legacy of corruption. ‘As the Baltics start to meet EU standards, corruption is getting harder to hide," says Poulin. "These countries are working hard to assure foreign companies that these are very good places to do business.’"

Overall, says Poulin, “Income and corporate tax rates are low, and EU and NATO accession has given these nations a boost of confidence. There are too many opportunities to ignore.”

For more information, contact Irena Cirpuse, Canadian Embassy in Riga, and go to http://www.infoexport.gc.ca/.

Wednesday, July 18, 2007

If your message is important...

I got an email today from a name I didn’t recognize with the subject heading, “Message.”
This was right after deleting more than 100 spam messages, many of which had subject heading not unlike that one.

For some reason, I opened this one e-mail before deleting it (even though I was 80% sure it was an invitation to buy some medical product that medicare doesn’t cover). I was glad I did. It was from an assistant to a Canadian entrepreneur with whom I am meeting in a few days. She was asking if we could change the meeting time.

Here’s what I wrote back.

10:30 would be fine, Marianne (not her real name). Thank you.
One tip? In future, try to use a more detailed or individualized subject heading than "message." I get 300 spam messages a day, many of them entitled "subject heading," and I almost erased yours without looking at it. Fortunately, some eerie "sixth sense" told me not to.
(Sorry to be so pedantic.)
Rick


Of course, this isn't just about e-mail. No matter what your message is, or what medium you use, you must make sure it stands out. Be aware of the context in which it will be received. And make sure the intended recipient can quickly identify it as genuine and important. Or be relegated quickly to spam.

How to Advertise Yourself

Maxwell Sackheim’s How to Advertise Yourself is a compact gem of a book. I picked it up a few years ago at a garage sale here in Cottage Country and have dipped into it again and again.

Published in 1978, it distills the man’s life lessons from 70 years of writing ads on Madison Avenue. He believed the secret of success is being able to sell your ideas to the rest of the world – and what entrepreneur could disagree?

Here are Sackheim’s five steps to help you sell yourself, your appearance, your thoughts, words and experiences to any individual or group:

1. Know your merchandise (analyze yourself as a product)
2. Attract favorable attention (your dress, your voice and your greetings are your “headlines,” which attract or repel)
3. Keep ’em interested (half an argument seldom completes a sale)
4. Be convincing (every statement you make must be above suspicion)
5. Get action (the enemies of action are Indifference and Inertia)

Here’s my favorite part of the book (from the chapter, “Be Convincing”):
To convince people, what you are offering must evolve around some basic human
want. There must be a good and sufficient reason why you think it is better than
what your competitor is offering….

Don't dwell on your reputation, your past achievements, your abilities. Your past accomplishments may be a comfort to you, but they cannot help your prospect unless they are translated into his needs.

Your prospect must be made to feel that he is the one who will benefit the most, get the best of the bargain, win all or most of the advantages. Make him feel that what you are getting out of the transaction is small compared to his gain. Keep suggesting that the whole proposition was designed to benefit him and that what YOU get out of it is a byproduct of what he wants and needs most.
Sackheim was a pioneer in advertising and direct marketing. He helped launch the American Express credit card. His direct-mail ad, “Do You Make These Mistakes in English?” ran for 40 years. He was elected to the Advertising Copywriters Hall of Fame in 1975.
He knew his stuff.

Monday, July 16, 2007

Catching Up with Conrad Black

The Globe and Mail had one of those “chat online with our reporters” today at noon (EDT) to go over readers’ unanswered questions in the Conrad Black affair.

Having not followed the trial that closely, I learned quite a bit from the transcript, which you can find here. The two reporters on the hot seat today were Jacquie McNish (a National Newspaper Award winner with whom I worked years ago at the Financial Times of Canada), and Paul Waldie.

1. The Surly Secretary
Question: How can Black be convicted of obstruction of justice in the U.S. for an act that he committed in Canada?
Paul Waldie: The issue came down to whether Lord Black was obstructing investigations by U.S. authorities. That included a grand jury probe, an investigation by the U.S. Attorney's office and an investigation by the Securities and Exchange Commission. All three were underway when Lord Black took the boxes.
The real problem for Lord Black was that his secretary, Joan Maida, did not give any compelling testimony during the trial as to why the boxes were taken. She was contradictory, vague and combative.
Her testimony, the fact that there were three U.S. investigations and the security camera video hurt Lord Black on this count.

Undone by Arrogance
Question: Do you believe that Black's unbounded arrogance proved to be his own undoing?
Jacquie McNish: Yes…. The same single-minded sense of destiny that drove Lord Black to build the remains of the old Argus conglomerate into one of the world's largest newspaper companies, also blinded him to the corporate governance movement that eventually overpowered him.
I truly believe that if he had bowed to his rebelling shareholders in 2002, he could have avoided this criminal trial and verdict.

The Directors’ Dilemma
Question: Do you not think that more people now will think twice before accepting directorships, particularly if they are financially well-endowed?
Jacquie McNish: Conrad Black and his executives were not the only people on trial in this case. The spotlight was also on the conduct of Black's directors, lawyers and auditors who failed on several occasions to question or sound the alarm about a number of transactions that were at the heart of the case.
The Black trial painted a picture of a dysfunctional board of directors who "skimmed" key documents and never questioned deals that screamed for scrutiny… The embarrassment and lawsuits they have suffered as a result of this case is the final nail in the coffin to compliant boards…
As result of these consequences, only strong-minded directors who understand their legal obligations are going to be inclined to take directorships on public companies.

Two other points I learned:

* Conrad and his cronies weren’t just lining their pockets with those “non-compete” payments. At the time, non-compete bonuses were tax-free! So their strategem was nearly twice as profitable as using additional salary or performance bonuses out of the company.

* While Conrad already has lawyers working on his appeal, Waldie notes that the track record of success on appeals in the U.S. is very poor for defendants in criminal cases. One reason: “George Bush has stacked these appeal courts with judges who are generally tough on crime.”

It's the final irony: Conrad Black hoisted on the petard of the neo-cons.

Read the full story here.

Reflections on DataMirror

I’ve never quite understood what data-automation firm DataMirror Corp. does. But I’ve always admired its CEO, Nigel Stokes.

Before the age of 40, he had built a database consulting company, Nidak Associates, taken it to the PROFIT 100 list of Canada’s Fastest-Growing Companies, and then sold it (to Ottawa tech giant SHL Systemhouse). He then founded Markham, Ont.-based DataMirror, which produces software that integrates inventory, point-of-sale and other commercial data. The company now has more than 2,200 customers, including Tiffany & Co., Ricoh and Imperial Tobacco.*

I often thought about investing in DataMirror, not because I understand it, but because I think Nigel Stokes is 10 years ahead of everyone else.

Shoulda, woulda, coulda…

Today IBM announced an agreement to buy DataMirror Corp. for $170 million. Its $27- a-share bid amounts to a premium of nearly 20% over the shares' recent price of $22.61.

IBM says the combination of DataMirror technology and IBM's information-management software will “help customers bring real-time data analysis closer to actual business processes, allowing them to be more competitive and to generate more value from their information.”

You'll get no hand-wringing about evil foreign takeovers from me. This is how the system works. Entrepreneurs create innovation, work out all the bugs, then sell out to bigger firms that can create more value with that asset because they can disseminate the technology more easily.

Better still, it frees up the entrepreneur to go out and start another business, thereby beginning the cycle again. Except that this time, he or she has more money to do it with. (Stokes, who is still only 52, will receive some $53 million for his DataMirror shares.)

Congratulations, Nigel, and good luck. We’ll be watching. Even if we don’t always understand…

* DataMirror itself says: "Our solutions encompass virtually every kind of data integration technology—spanning mainframes, midrange servers, and mobile devices—allowing organizations to provide real-time data integration between all systems that create and store data." I hope that helps.

Best-Ever Entrepreneurship Quotes: Week 41

Here's for your motivational Quote of the Week, personally selected to get your week off to an empowering start.

This week, marketing advice from advertising pioneer Maxwell Sackheim’s 1978 book, How to Advertise Yourself.

“There are countless ways to advertise effectively… Courtesy is advertising. Promptness is advertising. Tolerance is advertising. You can advertise favorably even when you must say no, if you say it graciously. These things cost nothing but they are the essential ingredients of successful, personal advertising.”

(Besides being a direct-mail innovator, Sackheim was co-founder of The Book of the Month Club. Before you laugh, keep in mind that the Book of the Month Club involved selling and shipping products to people who had never ordered them – and payup was nearly 100%.)

Wednesday, July 11, 2007

Ed Mirvish, a true giant

I just checked the website of Canadian Business Online. It contains 118 references for Conrad Black - and zero for Ed Mirvish.

Sir Ed, who died this morning just two weeks shy of his 93d birthday, was a Canadian retailing icon and a cultural impresario. He made many mistakes, but he made things happen - as opposed to Conrad Black, who despite his headline-grabbing dealmaking really just buys and sells properties that other people have built. (The sole exception of which I am aware is the National Post - although it was certainly built on top of the pre-existing Financial Post daily.)

Ed Mirvish, of course, stuck to his knitting - his tawdry, beloved Honest Ed's, which may have been the world's first discount department store, and the theatre. He didn't grab headlines. He didn't expand his retail concept across Canada (although he had many offers). He merely saved (and expanded) Toronto's (and thus Canada's) live-theatre scene. And his single store survived the shakeout in Canadian retailing that saw everything from Towers and Bi-Way to Eatons and Simpsons wiped out one by one.

Simple, plain-speaking and embarrassingly self-promotional, Ed never got the respect he deserved. The media today have focusing on his "city-building" contributions in saving Toronto's Royal Alexandra Theatre and building the daring Princess of Wales Theatre. Sure, he proved that business can make a valuable contribution to the culture of a nation. But the media seem reluctant to portray him as a hero for running a tawdry, Vegas-looking discount store.

Even though Honest Ed's has lasted 59 years. Even though it has set a wonderful example of how a business can create long-term value for its customers and give back consistently and generously to its community. And even though Ed proved that business can be fun.

While the world waits to hear the final fate of Conrad Black, the verdict is in on Ed Mirvish. He was a builder and entrepreneur par excellence. And he will be missed.

Update, July 22: The day after I wrote the above post, CanadianBusiness.com actually mentioned Honest Ed - in their retailing blog, written by Zena Olijnyk. Funnily enough, she wrote about what the store meant to her as child. Not about Ed as an innovator. Not about the store as a trend-setter, or even (later) as a niche retailer that knew its market better than anyone. In a country bereft of disruptive, entrepreneurial vision, I think CB missed the story.

Monday, July 09, 2007

Canadian Entrepreneurs create top website, sez Time

Congrats to Canadian entrepreneurs Leonard Brody and Michael Tippett, co-founders of Vancouver-based NowPublic.com, which has just been named one of the top 10 news and information sites by Time Magazine.

As readers of my PROFIT Magazine article "The Ultimate Newsroom" read earlier this year, NowPublic brings together "citizen journalism" with web 2.0 interactivity to create a new, independent source of news. With 97,000 members, it is now partnering with "mainstream" media outlets such as Associated Press to bring news to the world from where it happens, as soon as it happens. (Click here to read my original article.)

Time's figure of 97,000 members represents a 75% increase over the 60,000 I reported in February, so there's something viral going on here.
(UPDATE: A promo box on NowPublic's site claims 110,000 members.)

"Nowhere are the merits of citizen journalism more apparent than at NowPublic," says Time. "At this 'participatory news network,' a.k.a. bastion of 'crowd-powered media,' anyone can write a story, or upload images, audio or video. Whatever gets the most votes from the reading masses—the site gets about 1 million unique vistiors per month—ends up as the lead story."

It also quotes Brody: "We wanted to build a next-generation wire service that counted for the accidental bystanders, the storm chasers... And with digital capturing devices now in the average person's hand, they can be first when there's breaking news."

Personally, I still find the site a little heavy on trivia, but I'll let you be the judge. Visit NowPublic at http://www.nowpublic.com/

Its top stories at this hour:
Tucson kids go public with personal stories
Discovered! The 8th Wonder of the World
Photography Banned in Downtown Rockville, ...
Judges OK warrantless monitoring of Web use
Canada tokes at 4 times world average: UN

Best-Ever Entrepreneurship Quotes: Week 40

Here's for your motivational Quote of the Week, personally selected to get your week off to an empowering start.

This week, we offer not so much a famous quote as a simplistic formula. But I believe there is great power in simplicity. I also believe that one of the biggest problems facing entrepreneurs is an ability to FOCUS their vision or their efforts.

So here is your mantra for the week:

FOCUS =
F-ollow
O-ne
C-ourse
U-ntil
S-uccessful

Wednesday, July 04, 2007

Cluing in to Search Marketing

I’ve found that many business owners (like many other marketers) are still confused about search engine marketing: what it can do and why it works. In his company’s blog last week, Gord Hotchkiss, CEO of Enquiro Search Solutions in Kelowna, BC, offers one of the best illustrations I’ve ever seen of the power of search marketing.

Warning: some of Gord's analysis is heavy going for non-professional marketers. But if you stick with it, you'll have had a free, cutting-edge course in Internet marketing with a huge potential payback.)

A few weeks ago, Gord accused Ontario Tourism of not having a search strategy. Responding, the provincial agency claimed to have "an extensive search program". If that's true, Gord maintains, you can't tell from the results. Ontario Tourism’s site didn't show up when Gord Googled such key terms as Ontario vacations, Ontario resorts, Toronto vacations and Ontario holidays.

“This proves too good an example of the disconnect I see all the time," writes Gord: "managing a search campaign to budgets, not objectives. I stand by my original claim: Canadian advertisers aren't clueing into the power of search.”

Ontario Tourism’s spokesman claims to be buying thousands of "targeted keyphrases" and using heavy geo-targeting to focus on prime markets. That makes sense, says Gord, if your budget is limited. "“But in this case, are budgets really limited?"

"Let me share some things I was able to dig up on the site. First of all, Ontario Tourism is doing print (lots of print) and TV (lots of TV). The goal? To drive people to their website. Full-page 4-color ads are running multiple times in over 70 dailies and weekly newspapers and 9 magazines. One 4-color full-page ad in the Toronto Star would run about $54,000. Circulation of the Toronto Star is 350,000 (on an average day). An excellent conversion rate for a newspaper ad would be 0.5% That means, ideally, 1,750 people would actually visit the Ontario Tourism website. That would be a cost per visitor of $30.85. If the ad doesn't work that well, the average cost climbs dramatically. And you pay whether or not the ad works.

“Now, courtesy Yahoo Canada and a recent survey, let's look at what actual travelers cite as the most important influencers in making travel plans. Search and websites are tied for number one and two, used by 51% of respondents in a recent survey. Newspapers and print? Only used by 7%. But yet, only 2.1% of Canadian ad budgets get spent on search, and 42% gets spent on Newspapers and Magazines."

“So, where is Ontario Tourism in the search results? They're only geo-targeting the prime markets, and then only for a 3-month period (April through June). Only 1 of
the 7 highest traffic key phrases I found (using an Ontario IP) returned an ad or an organic listing for Ontario Travel (the site also hasn't been organically optimized). More specific phrases, like Ontario Summer Vacations or Ontario Wine Getaways, did return more ads. But by bidding on specific phrases (even thousand of "long tail" ones) and not on the more popular ones, Ontario Tourism is catching less than 10% of all the people using search to plan a vacation in Ontario. And unless you're in the top sponsored ad locations (which few of the ads I saw were) you're actually only being seen by a small percentage of those searchers (usually 10 to 30% of them) on the results pages you do appear on. So, according to 97 out of 100 people who are using search to find the official site for Ontario Tourism, they're not "doing search".

"By the way, you could maintain top spot in Google and Yahoo for all the top traffic phrases for less than $2 per visitor. Remember, that ad in the Toronto Star cost, at a minimum, 15 times that!

“Is it really "smarter" to ignore 97% of the people who are actively searching online to find you so you can spend more money running ads in newspapers for the 99.5% of people who have no interest in your site at all? And the real irony here is that if people don't click on a search ad, you don't pay!

"Take a fraction of that budget from the Toronto Star and blow out the geo-targeting and time parameters and go for the high-traffic phrases. After all, there might be people in Saskatchewan or Nova Scotia that are planning a trip to Ontario. Or, perhaps they're planning their trip in September, or February. If not, it's not costing you anything. Try getting the Toronto Star to offer the same pricing model!

Note from Rick: At heart I’m a print guy, so I know the value of media advertising. But if your market is actively using the Net to make its buying decisions, you must be exploring these pay-per-click models (e.g., Google AdWords). They may or may not work better than what you're doing now, but they're certainly promising. And experimenting with them costs you almost nothing. Go ahead, get started.

Or click here to read Gord Hotchkiss’s full post.

Monday, July 02, 2007

Best-Ever Entrepreneurship Quotes: Week 39

Here's for your motivational Quote of the Week, specially selected to get your week off to an empowering start.

In honour of Canada Day, here's a gem from one of Canada's earliest and foremost satirists:

"The poor man of one idea is always in danger of being laughed at by those who have none."
Robert C. (Bob) Edwards, editor, the Calgary Eye Opener (1902)

(He's the same guy who wrote: "I know what a statesman is. He is a dead politician. We need more statesmen.")