State of the Industry: Michael Hemsey
By: Michael Hemsey, Kobie Marketing
October 21
While it is tempting to claim that the recession has been tough on many in our industry, the fact is that the recession, based on Economics 101, has also been just. What do economics have to do with it? Bob Garfield, author of “The Chaos Scenario,” explains: “Twitter, Facebook and YouTube have altered human behavior on a grand scale. Two and a half years ago, Google paid $1.65 billion for YouTube.
The 2008 payoff: about $90 million in ad revenue -- which might (but probably won't) cover the costs of copyright-infringement litigation and certainly won't cover bandwidth charges. Facebook, whose 2007 valuation of $15 billion has shrunk to about $3.7 billion, had 2008 revenue estimated at $300 million. And Twitter had $0.” Thus, Garfield continues, the mantra: “We have the audience. All we need is a business model. As if adequate revenue were somehow guaranteed by physics or heavenly deity. It isn't.
I've pored over Isaac Newton and the Ten Commandments. There is no ‘Thou Shalt Monetize.’” Whether you’re a sponsor or service provider of a loyalty and rewards program, can you state that your program is meeting your financial projections and bottom-line ROI? One innovative, if bucolic, example of coping with the fact that monetization and bottom line results are no longer guaranteed – through a loyalty program or otherwise – comes from a Dayton, Ohio café owner’s approach to pricing his menu: the customers simply pay what they want. When the meal is finished, customers have to look the owner of Java Street Cafe, Sam Lippert, in the eye, and say what they think their meal was worth.
Doesn’t that sound like an idyllic approach for new business proposals, contracts and RFPs? (Are the crickets chirping?) Read the full article below.
State of the Industry: Michael Hemsey
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