Website traffic estimation: My excel forecasting model (Part 2)

Due to the number of inquiries after my first posting "Website traffic estimation: is there..." I've decided to share my forecasting excel model.

To download: http://www.scribd.com/doc/7668443/Traffic-Estimation-Model-1

Traffic Estimation Model 1 - Upload a Document to Scribd

IMPORTANT

1) Linear Function: y = 8E+09x + 49771
2) 2nd degree polinomic function: y = -1E+13x2 + 1E+10x - 3272,2
3) For the part of the curve that corresponds to websites with an Alexa traffic rank below 100.000, the function used is an average of the polinomic and linear functions

Two functions are used to calculate traffic. This could be upgraded, corrected and improved with more data points or sources of datapoints.

Please if you know any public source of reliable data of historic data on traffic, or have any comments email me at pedroneiraf@gmail.com

4) Cells with yellow background ARE NOT Alexa's 3 month average reach. This input was distorted, so before inputing the data directly from Alexa, it has to be corrected
5) The way in which this data is "corrected" is by a simple cross-multiplication aproximation to the nearest upper value in the list (the closest upper white cell).
6) This function will not work well for recently created websites.
7) This material is for non-commercial use only. Any usage of these functions or part of this excel sheet should quote the source.


The results I've got so far with this function have an average error of 7%, although it has to be said that in some cases, the error might be up to 40%. It has worked for me so far 80% of the time with an error of less than 15%, which is more than acceptable considdering the errors wound in other tools like the web Traffic Estimate. If you have a website and know your numbers, just compare and see the difference.

Please, this model is just a starting point, that needs to be upgraded, corrected and improved with all your comments.... Any suggestions ???

Copyright MBA Internet Marketing Manager

Word of Mouth Marketing in Internet 101 (WOMM 101)

WOM = Word of Mouth

WOMM: Word of Mouth Marketing

According to the Word of Mouth Marketing Association Word of Mouth Marketing is defined as:

"Giving people a reason to talk about your products and services, and making it easier for that conversation to take place"

Uhh?? … Sorry but … Isn’t that definition, in one way or another, just the goal of almost any advertising marketing campaign?? … I was a bit disappointed. After not so careful consideration, I decided to research a bit on the subject and share my opinion in this post.

Basics of Word of Mouth

To start, I went to see WOMM Wikipedia’s definition and things got a bit better. Some of the things that are very descriptive about word of mouth marketing mentioned on this definition are: WOMM is more credible than other forms of marketing and that deliberate efforts to fake or generate WOM using deceptive practises, usually don’t work out (or have the opposite effect: negative WOM)

To that, I could add the following about Word of Mouth..

Word of Mouth Marketing (WOMM) has always been considered one the most powerful marketing techniques. It has three main characteristics that make it very different from other more traditional marketing channels:

1.- Very difficult to control
The usual way that all marketing campaigns go is FROM the advertising company TO the end consumer. The company tries to communicate something through advertising, whatever the marketing goal might be: brand awareness, increasing consumption, change from a rival brand, etc. If the end consumer “buys” the message, then the campaign has achieved its goal. The powerful effect that a WOMM campaign has is that it’s based on the premise the company will not be the one transmitting the message, but another consumer. Anything transmitted from one consumer to another about a product, a brand or a person will be many times more effective than something transmitted directly from the company…. And that is exactly is where the risks and rewards lie: the message transmitted will be much more powerful… but you can’t control it…

2.- If successful, it might be the most effective marketing tool
The outcome in a TV/Radio Ad campaign can be very predictable. It might be better or worse depending on which media is bought or on the creativity of the campaign but the final outcome in terms of sales tends to be unsurprising. On the other hand Word Of Mouth Marketing campaigns can result in tremendous successes or incredible failures, given that WOM can be extremely positive or terribly negative for a company.

Some examples of very effective WOMM Campaigns are the iJam 5Js and the “Yo amo a Laura” (see video below)

Examples of WOMM campaigns with terrible outcomes, mainly for trying to fake WOM, are the Subservient Chicken and Josh Friedman’s blogging about the movie “Snakes on a Plane”.

3.- If successful, it might be the most Cost-Effective marketing tool.

Usually, the best WOMM campaigns are very cost effective… if successful. Some of the best campaigns start with a blog post from a very recognized and influential person, a kind of “Homemade” video on YouTube, an e-mail or some other way of viral marketing. The production and media buying cost of these marketing channels is generally much lower than producing and airing a TV Ad, or o buying tons of pages in specialized magazines.

On part 2 of this post I’ll continue with my view on What are the basic elements for a successful Word of Mouth Marketing Campaign.

Copyright MBA Internet Marketing Manager

(Part 2) Amazon vs eBay. Selling on Amazon or selling on eBay? Which is the best option for online vendors

Coming from Online retailing Amazon vs eBay. Selling on Amazon or selling on eBay? Which is the best option for online vendors (Part 1)


• Fulfillment by Amazon:

Since the beginning, Amazon invested heavily on automated fulfillment and distribution centers. This is one of the main reasons eBay has been able to expand faster (geographically) than Amazon. eBay is a 100% online business while Amazon has to invest time and resources to build its fulfillment centers. Anyway, coming back to the point of view of an online vendor this is a very important difference between the two platforms: Amazon offers the possibility to outsource the fulfillment (storing, picking, packing and shipping) while eBay doesn’t. Amazon calls this service “Fulfillment by Amazon FBA”

• Return policy / Guarantee:

This is one of the most important differences between the two platforms: Amazon has a full guarantee designed to protect the buyer while eBay does not. This might not seem too important but it is on the long run, because it’s a way to autoselect the kind of buyers and sellers you want to have in your marketplace. Amazon’s guarantee is the “A-to-Z Guarantee protection”.
The guarantee obliges any seller to refund or resend the item to the buyer in the event of a claim. This is designed to offer confidence to buyers so they know that they anything they buy on Amazon or from an Amazon third party seller will be as described. Sellers that don’t comply with Amazon’s minimum ratios of client service, by failing consistently to refund/resend items to buyers eventually will not be allowed to sell on Amazon. This means that only good quality service sellers will be allowed to remain selling on Amazon. What Amazon is doing with this is very clear: It’s eliminating one of the most important reasons that kept buyers from buying online, which is fraud/forgery. eBay does not function like this at all, eBay is not responsible of what the seller does or sells. This is why there have been so many claims of false luxury goods of the most prestigious brands being sold on eBay but the problem continues. The way buyers can penalize bad sellers in eBay is through reputation (giving a bad feedback) or through eBay’s Resolution Center which depending on the case and the allegations, can take some time.

All this explanation of the way each platform tries to protect its buyers from forgery/fraud is just to show you how it directly affects the sellers. Sellers of fake items or items with a very low quality won’t go to Amazon because they know that they will have to pay the buyers in case of claims or they will be kicked out of the marketplace. The outcome of the guarantee, besides obviously protecting buyers, is that Amazon is self-selecting good quality sellers for its platform.

SELLERS Perspective	Amazon	eBay
Fees	MORE EXPENSIVE - Listing Fee: Low for volume - Commisions: High 15% Better for high volume // High rotation items	CHEAPER - Listing Fee: Low for individual listings - Commisions: Low 8% Better for High price // Low rotation items
Format	Fixed Price Format	Fixed price + Auction Auction: Better for Antiques and Collectibles. Ebay moving into Fixed Price direction
Average sale Price	BETTER Buyers pay more on average for the same items	WORSE More price competition
Payment Methods	LESS OPTIONS BUT EASIER TO MANAGE If Amazon can't collect the payment, the seller doesn't have a sale, and the item remains listed.	MORE OPTIONS BUT MORE COSTLY eBay sellers can accept PayPal, money orders, cashier's checks or cash. However, they're responsible for managing collections, which means investing more time and labor into each transaction.
Return Policy	WORSE Tight claim and quality control. If many clients solicit returns, they can be kicked out of Amazon	BETTER Not obliged to return. The only penalty could be a bad feedback
Shipping / Fulfillment	BETTER Amazon fixes the shipping credit, per category, regardless of what actually the shipping cost ends up being	WORSE Seller fixes shipping price, but supervised by eBay (to avoid overcharging)
Client Follow Up / Marketing Info	WORSE Sellers are not allowed use the contact information for follow up marketing actions. This is a big setback for any seller because in each transaction, the seller is selling an item, but the customer is acquired by Amazon, not by the seller.	MUCH BETTER Billing information is managed by the seller itself. The seller can decide what to do in terms of follow up marketing actions. The long term relationship will be between the seller and the client, not between the platform and the client.

Conclusions and final thoughts

• Although in general Amazon seems to have better quality of service and a more options for sellers, It’s more expensive and doesn’t allow follow up marketing actions; two things that are not trivial for sellers. In other words, It might be better… but at a cost.
• The other very important point is that the clients of both platforms tend to be loyal to their marketplace, which means that if you’re a seller on eBay and decide to start selling on Amazon, you’ll reach millions of NEW customers. Sell on both platforms, you have nothing to lose, only millions of new customers to reach.
• As a final conclusion, I could argue that both platforms should be used only to generate incremental sales, and not become the only source of income. To be so dependent on only one sales channel, has always proved to too risky….

Related content: eBay vs. Amazon, the Buyer's perspective

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