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Sunday, March 30, 2008

I get approached by a lot on online business looking to outsource their ad sales.

Well, I say outsource their ad sales but, basically, they don't have any to outsource.

What they all really mean is... "I want you to sell advertising for my unproven Web 2.0 business but I haven't any cash to pay you".

There's a great article in today's Sunday Times The new dotcom boom which gives some insight into this.

Whilst drawing some parallels with the last dot-bomb bubble, most notably the growth of start-up networking events, it's recognised that there are a some differences this time round.

Today, it's typcial of Web 2.0 start-ups see their exit through a strategic buyer rather than an IPO. VC activity is up but no-where near the feeding frenzy heights of last time around. One reason could be that it's so much cheaper to actually start up a Web 2.0 business today.

"Lastminute used to cost millions of pounds every year in technology," says Hoberman [Brent Hoberman of Lastminute.com and wayn.com]. "Now it is far cheaper." How come? "Moore's Law. Everything becomes cheaper and faster." Can you set up for 20,000? "Absolutely," says Clegg [Judith Clegg of the Glasshouse, the company that runs Second Chance Tuesday]. "Less, perhaps."

Add this to the fact that most Web 2.0 start-ups' business model is based solely on advertising revenues and you start to see why we get approached by so many people to sell advertising on commission.

The problem is that none of these start-ups have anywhere near enough traction to make a CPM model pay. So, to fill the void, there's this vague idea that someone can just make a few phone calls and drum up a quick ad deal for their "next big thing".

Sure, ad spend is moving rapidly online. However, as the article points out "with lots of social networking sites all seeking advertising money, some kind of shake-out is due."

Web 2.0 businesses typically work on some low value/high volume model (which could be be that a directly listing fee, monthly or annually subscription or CPM ad revenues). The trouble for us is that these models just don't work well with telesales (which needs at the very least a medium value proposition) unless you're prepared to buy business in a land-grab.

If you're looking to self-fund and grow covering your sales costs (outsources or in-house) from revenue then you either need a higher value offering or a small number of partnership deals which will bring the long term revenue scale you need.

So, now you know, please... stop calling me ;-)

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Posted by: David Regler @ 5:29 pm |  1 comments  | Links to this post  

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Saturday, March 01, 2008

Can you remember that line from Joe in Reservoir Dogs - "Let's go to work"

What a great film!

There's this theme that runs through some of my favourite films. Films like Ronin, Heat and, of course, Reservoir Dogs.

In all these films there's this core team of experts who come together to execute a plan.

That's something I completely identify with because it's at the heart of what we do; we pull together a team of seasoned experts, usually formed around a core team who we have worked with previously, to make it happen.

Our clients use us because we just "get to work".

It's something I've always enjoyed about people who are real experts at what they do; the straight-forward way they effortlessly deliver.

Whether we're talking about a builder, plumber or sales person, you know when you're with someone who's an expert in their field. And we're not talking about "book smart" here, I'm referring to the seasoned, battle-scarred expert who's earned their stripes in the trenches.

"Workman like" is a good term for it. No fuss, someone who quickly knows what needs to be done and gets organised to do it. Simple.

In fact, one of my favourite client testimonials pretty much sums it up:

"David is easy to work with, he understands how to get results and he delivers."

Let's go to work...

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Posted by: David Regler @ 4:03 pm |  0 comments  | Links to this post  

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