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The Gloom, Doom and Slight Ray of Sunlight Regarding the Internet
By Robert Skrob | March 17, 2010
For 6 years, a select group of information marketers have been “by-invitation-only” subscribers to Dan Kennedy’s Information Marketing Special Reports and Info-Marketing Letters. Now, for a limited time, Dan has opened his vault to make these available to you.
If you’d like to find out more about the archives, visit www.DKArchive.com. Here is an excerpt from Volume V, Number 4 of the archives. I’m sure you’ll find it valuable and enlightening.
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As I discussed in the last issue, most of the trend news regarding Internet marketing is, these days, gloomy. Online commerce is still growing but not nearly as quickly as it once did; in the U.S., total retail sales for 1st quarter of ’08 came in at about $990 billion with Internet sales at about $30 billion, just 3% of the total … and growth for the most recent 3 calendar quarters has been about 3%. From 2003 to 2004, sales growth was 25% from 2007 to 2008, its forecast as low as 5%. E-mailers can expect to see their open rates continue to fail as Road Runner, AOL, and Yahoo continue to increase spam screening. The bright spots are for those interested in or focused on doing business outside U.S. borders. The U.S. is home to only 19% of all Internet users, and the growth and growth potential is elsewhere. While about 75% of the U.S. population is already using the Internet in one way or another (= saturation), only 12% of China’s population is—although that is 160 million; and only 4% of India’s population—42 million. These explosively growing economies and business communities have gigantic populations, thus enormous numbers of new users arriving and yet to arrive, and a thirst for ‘made in America’ information and entertainment. (Source: The Futurist).
As I see it, the greatest virtue of the Internet as media: near zero barriers to entry, business start-up costs under $500.00, and nominal cost of use (although somewhat illusory, if you consider buying traffic or manual labor) is also its greatest drawback, producing massive clutter, confusion, consumer overwhelm, and price-cutting competition. One of its current uses in our industry that is most interesting is not in selling things but in being the deliverable itself, with interactive community sites as the business. Another trend to be aware of is the increasing willingness of Internet users to be actively engaged in dialogue … for example, visits to ‘question and answer websites’ are up 118% from a year ago, although visitors to Yahoo Answers accounted for 74% of that activity. (Source: Research Alert, Hitwise).
Finally, in the bad news department: more on my long argued position that counting clicks is silly. Recent studies by AOL and other research groups found that just 6% of Internet users account for more than 50% of all clicks on display ads/banner ads … and the heaviest clickers earn less than $40,000.00 a year and account for less than 15% of online commerce. The relationship between clicks and sales just isn’t there, and is becoming harder to predict or substantiate. Microsoft’s ad network and Google—which earns most of its income from pay per click—are busy devising different payment models for search engine advertising. (Source: Business Week, 3/10/08).
ABOUT THE AFOREMENTIONED SOCIAL NETWORKING & COMMUNITY SITES … AND BUSINESS STRATEGY … Marc Bell brought Penthouse Media out of bankruptcy just 4 years ago for $52 million. Its magazine, once the racier, edgier rival to Playboy, has been made over with a less explicit approach, its newsstand covers now akin to the Sports Illustrated bathing suit issue (or many women’s magazine covers!). But it’s a tame front for a carefully constructed portfolio of 20+ adult social networking sites, assembled or purchased at a cost of over $500 million, including AdultFriendFinder—boasting 22 million active members. Think of it as Match.com. for people seeking sexual hook-ups, searchable by activity preference or fetish, chock full of more interesting photos than at Match. It alone brought in $285 million last year. Surprisingly, Penthouse Media also recently acquired BigChurch.com, a site for Christians seeking ‘prayer mates’ and ‘friends,’ it with 45 million active users. Next up, going public with hope of raising $250 million in the IPO, to retire debt used for these acquisitions, to free up cash flow to acquire more.
Like Tupperware, PM is far from a sex magazine publisher; now a process expertise company simultaneously seeking to dominate its original niche with offline/online cross selling but also branch out to other product and audience categories. Whether PM can prosper as a public company is questionable—Playboy hasn’t. But its directions are, well, provocative.
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If you enjoyed this excerpt, you may want to review the entire Dan Kennedy archive. It is available for a limited time at www.DKArchive.com. Every one of the 72 issues is packed with advanced, specialized, experience-tested insights into what it takes to succeed within the info-marketing business. Visit www.DKArchive.com to reserve your copy.
Topics: Information Marketing | 5 Comments »
March 17th, 2010 at 7:16 PM
Wow!
You guys are supposed to be the BEST, This is crap. Fully justified lines, no damn paragraphs???
I can’t be bothered reading it.
You’ve depressed me. I thought you were better.
March 17th, 2010 at 8:46 PM
Norm has a point Robert. That is pretty difficult to read. Just a thought for those of us with older eyes.
March 18th, 2010 at 7:15 AM
Thank you for letting me know.
I posted this myself. I’ve been out sick the last 3 days and got this up quickly. In fact it was the only thing I did yesterday.
For some reason justified paragraphs is the default for this Word Press template so I have to manually left justify each post. Yesterday I cut that corner.
Thank you for letting me know that is important. I’ll go back and do it now. The paragraph spacing is how Dan Kennedy had it, I’ll see if I can edit in a couple breaks to make it read easier on the screen.
Best wishes.
March 18th, 2010 at 7:18 AM
That’s a bit better. Thank you Norman. Best.
March 18th, 2010 at 1:47 PM
Great post Robert.
You mention the down side of PPC but there are plenty of marketers online making a great living.
Dan has never been a great fan of online marketing and barely uses it to it’s potential.
He is however bringing on top people on to his team as he seeks how to use it properly.
I think he will have a different perspective now that Frank Kern is on board his programs.
Barrry