March 29, 2013

Viral Marketing Pointers


Recently I gave an presentation on what is viral marketing.And How it started and how it works. This post is an helping hand to those who wish to study more on this topic of Viral Marketing. This are some pointers on which a you should concentrate while studying viral marketing as it is important part of social marketing. I will write a detailed post on same subject in coming weeks.

Viral Marketing: Definition

What is Viral Marketing??
Viral marketing is an idea that spreads--and an idea that while it is spreading actually helps market your   business or cause.
Viral marketing, viral advertising, or marketing buzz are buzzwords referring to marketing techniques
They use pre-existing social networks and other technologies to produce increases in brand awareness 
Also to achieve other marketing objectives through self-replicating viral processes, just to the spread of viruses or computer viruses.


History

The emergence of "viral marketing," as an approach to sales, has been tied to the popularization of the notion that ideas spread like viruses.
The term was popularized by Rayport in the 1996 Fast Company article "The Virus of Marketing”.
Tim Draper and Steve Jurvetson 1997 to describe Hotmail's practice of appending advertising to outgoing mail from their users.
1995-2000  Hotmail went from zero to 30 million users with a then-revolutionary viral email ad "Get your own free email at hotmail.com"

Characteristics

Facilitates and encourages people to pass along a marketing message
Viral marketing depends on a high pass-along rate from person to person. 
If a large percentage of recipients forward something to a large number of friends, the overall growth snowballs very quickly.
If the pass-along numbers get too low, the overall growth quickly fizzles.
If successful, it spreads like a 'virus' and grows exponentially

Basic Method of doing it.

Delivered by word of mouth or enhanced by the network effects of the Internet and mobile networks. 
Viral marketing may take the form of video clips,
Interactive Flash games, eBooks, images, text messages, email messages, or web pages. 
The most common utilized transmission vehicles for viral messages include: pass-along based, incentive based, trends based.
However, the creative nature of viral marketing enables endless amount of potential forms that can be utilized for transmitting message

Viral Marketing > What is it not

Evangelism marketing: Your customers love you so much that they will tell others about you. Highly profitable and targeted, but also fairly focused and controllable.
Influencer marketing:  Tightly targeted campaigns, often conducted offline, to get a very small, highly-influential demographic/psychographic to use your product, hoping the masses will then copy them slavishly.(Celebrities, ultra-trendy youth, ...)
Buzz marketing: A type of PR whereby you engage in either publicity stunts or plant content (Blogs, articles, message board postings) hoping to get a "buzz" generated about your brand. Often used as part of the "seeding" campaign to help get the word out about a new viral ad.

The Six Simple Principles of Viral Marketing

Gives Away  Valuable Products or Services
Provides for Effortless Transfer to Others
Scales Easily  from Small to Very  Large
Exploits Common Motivations and Behaviours
Utilizes Existing Communication Networks
Takes Advantage of Others’ Resources

Viral Marketing >Why People Forward/Share

An online survey revealed the following reasons to forward:


Make people laugh
Recommend something
Competition (join or help you win)
Earn you some money / reduction
Call for charity, noble cause
Join a petition
Chain mail
Prank
Self-appreciation

Courtesy : The Six Simple Principles of Viral Marketing.  DR.   RALPH F.  WILSON 
EMAKINA: Viral  Strategies and Buzz Marketing


March 12, 2013

What are effects of eBay's Acquisition of Paypal ?

I have just given a presentation on merger and acquisition of Paypal by eBay.This is a transcript of the presentation, it can be used as a pointer in further studies.

eBay- An Introduction


  • AuctionWeb was founded in San Jose, California, on September 5, 1995, by French-born Iranian-American computer programmer Pierre Omidyar 
  • eBay Inc. provides online platforms, tools, and services to help individuals and merchants in online and mobile commerce and payments in the United States and internationally
  • A multi-billion dollar business with operations localized in over thirty countries
  • On April 18, 2012 eBay reported a 29% Q1 revenue increase to $3.3 billion compared to their Q1 in 2011. Net income was reported to be at $570 million for the quarter



Key Dates : Ebay



  • In November 1996, eBay entered into its first third-party licensing deal, with a company called Electronic Travel Auction to use SmartMarket Technology to sell plane tickets and other travel products.
  • The company officially changed the name of its service from AuctionWeb to eBay in September 1997.
  • In February 2002, the company purchased IBazar, a similar European auction web site founded in 1993 and then bought PayPal on October 14, 2002.
  • By early 2008, the company had expanded worldwide, counted hundreds of millions of registered users, 15,000+ employees and revenues of almost $7.7 billion


PayPal- An Introduction

  • PayPal enables any business or consumer with an email address to securely, conveniently, and cost-effectively send and receive payments online.
  • It builds on the existing financial infrastructure of bank accounts and credit cards to create a global, real-time payment solution.
  • It delivers a product ideally suited for small businesses, online merchants, individuals and others currently underserved by traditional payment mechanisms.


Key Dates: Paypal

  • 1998: Peter Thiel and Max Levchin found Field Link, soon renamed Confinity.
  • 1999: Confinity launches first version of the PayPal electronic payments system.
  • 2000: Confinity is acquired by X.com Corporation.
  • 2001: X.com makes initial offering of stock on NASDAQ; firm is renamed PayPal Inc.
  • 2002: eBay Inc. acquires PayPal for $1.5 billion in stock

Why PayPal was sold ?

  • Competitive Landscape: eBay was in talks to make Billpoint (a credit card processing service) free to all eBay auctioneers.
  • Billpoint had small market,but this subsidy would have undercut PayPal in its core market at a point when the company had not yet broadly diversified outside of auctions.
  • Mutual Dependence with eBay: At the time of the sale, 70% of all eBay auctions accepted PayPal payments, and roughly 1 in 4 closed auction listings were transacted using the payment service.
  • Regulatory Risk: The company had to apply for money transmitter licenses on a state-by-state basis once the FDIC established that it was not a bank
  • Regulators, such as NY Attorney General Eliot Spitzer, sought to challenge the company’s business practices.
From Eric M. Jackson article
Benefits to  PayPal

  • PayPal is a diversified business that generated only 33% of its revenue from sales in eBay’s marketplace
  • It’s accepted as a payment method with gigantic merchants such as Home Depot and Dell.
  • The company is also on sure legal footing.
  • A decade ago, over two-thirds of its revenue came from eBay auctions.
  • A decade ago, there were still lingering questions as to whether some regulatory body would try to shut it down.

Image courtesy: www.trefis.com


 Benefits to eBay


  • eBay’s core business getting tough fight
  • PayPal's revenues have grown at about 25% over the past two year and experts expect it to continue growing at similar rates in the near term.
  • PayPal contributed $1.37 billion in sales, or just over 40% of all of eBay Inc’s net revenue
  • PayPal constitutes 46% of the price estimate for eBay's stock.
  • Merchant services contributes about 65% of PayPal’s Total Payment Volume
  • Some notable customers include Barnes & Noble, Dell, and NorthWest Airlines