Huffington Post agrees to $315 million buyout from AOL

Nah. There's virtually no cost in doing those Nigerian emails. If they send out a million of them and they can make a thousand bucks off one person, it's a roaring success. So a .000001% success rate more than pays the bills.

With our online ads, we aim for around a 2-3% click rate, and a 2-3% conversion rate. So 2% of the people who see the search engine ad actually click on it. Then 2% of the people who clicked actually buy. So that's around a .04% success rate.

Now, on average it might cost us $.15 every time somebody clicks an ad, so you have to figure 98% of the time we are wasting $.15. It might cost $15 to get one sale in this instance.

Anyway, my point is nearly everybody at some point "falls" for online advertising. In my example it's .04% of the time, which seems ridiculously rare. But over the course of billions of searches, the numbers add up. And it's far, far less rare than the people who get suckered in by Nigerians.

 

It gets really crazy with more high-end words. The keywords "Mesolothimia lawyers San Diego" costs the top advertiser $51 EACH TIME somebody clicked on that ad. That's just for clicking on the ad, not making a sale. If typical, it fails to make a sale 98% of the time. So they may pay $5000 to Google just to get two customers.

But you can see how those two customers could easily be worth it.

 

http://www.guardian.co.uk/media/2011/feb/07/huffington-post-who-gets-money

Good for Ariana. I'll be interested to see how much of her $18MM she gives to the Federal Government, since she is such a supporter of more government control, higher spending and sharing the wealth.

 

lmao! Well, they say marketing is mostly trial and error. I'm counting this one as "error."

It's all about meeting demand. If you absolutely need a burgundy-colored recipe binder to make your mom happy, and you see one of our ads for "burgundy-colored recipe binder" next to a bunch of normal search listings and ads for just "recipe binder", you might be pretty tempted to go for the one that cuts through the clutter.

But 10 seconds later you'd probably forget that you clicked on our ad and not the organic listing. You'd just remember "clicking on the one that seemed closest."

You were a sucker for advertising, but your mind quickly discounts that it ever happened. Because we like to think we can't be suckered. It's the other guy who gets suckered, not me. I'm too smart.

That's how advertising works. Over and over and over.

 

Who do you use for click ads? I'm considering doing some, although I think facebook ads might be more beneficial for my market.

 

We find Facebook advertising to be a monumental waste of money. I don't know why that is, but it is.

Google advertising has always presented excellent value if you do your research. Bing/Yahoo won't get you nearly as many sales, but it's actually often a better bargain because fewer advertisers use it, so it's bid up less.

Any of these can be ridiculously bad decisions if you just throw money at it. You really need to be smart about it.

 

My target market is exclusively healthcare providers. I've got to look into it, a direct mail campaign will probably be more cost effective.

 

In general, it's a lot easier to refine your message with internet advertising. You can see what converts and what doesn't in realtime. Knowing that 80% of your customers left a particular page they came to without seeing another page on the site, while only 40% did so on another page, is valuable data.

With direct mail, you don't get refined data. People may never open the letter. Or they are turned off by the opening sentence. Or they liked everything about it, but just forgot to call. It's much harder to know what causes success or failure.

If it were me, I'd experiment with online ads, see what works, and then use the lessons you learn to build a direct mail campaign.

 

An interesting thesis: http://pajamasmedia.com/rogerlsimon/2011/02/09/does-the-huffpo-sale-mean-obama-over/?singlepage=true

 

http://www.nypost.com/p/news/business/aol_stock_sheds_huffpo_price_tag_el1sFNDBYfHoytknIKnOJL

 

Gordon Gekko couldn't have orchestrated a more seamless heist.

 

Yeah, the symmetry of the deal impact cracked me up.

 

$315 million for the Huffer, stocks lose $315 in value...

A $630 million net loss as of now. I'm guessing that AOL has bigger plans, because this purchase as of now makes no sense, other than to pay off Huffington and the other guy.

 

no. they don't. they are AOL. like I said they are fucking idiots.