The online ramblings of Dylan Bland

Lance Wiggs posted today about someone stealing content from his blog for the purpose of republishing the content on their own site to generate revenue from the associated Google Ads.

The offending site responded positively to Lance’s request to remove his content but also pointed out that their actions were not dissimilar to the actions of Google with their Google News service. (FYI Google News is a new aggregation service that pulls headlines from a variety of publishers so you can get all your news from the one place).

It reminded me of a comment one of the Mighty Ape developers made last week in response to Stuff.co.nz displaying an ad that temporarily took over the entire screen thus masking the content for a few seconds. I’m paraphrasing here but it was something along the lines of “Screw you stuff - switching to Google News.”

So…just because Google News pulls the content in a similar way to the site that Lance took offense to…does that make it right?

I’d argue it doesn’t.

Google News takes traffic away from publishers by “stealing” and republishing content within a news aggregation site where the original publisher has no opportunity to make revenue from ad sales.

Content is expensive to produce. Hiring researchers, reporters, editors and photographers isn’t cheap and in today’s world of declining newspaper sales these publishers will be looking more and more at recouping their investment through online ad sales. Some might stay that Stuff and the nzherald accepting ads that temporarily take over the entire screen may seem daft and short sighted and they’re probably right, but on the other hand some might argue that publishers who pay money to create their own content cant afford the luxury of having that opinion. Wages need to be paid somehow.

In conclusion I’d argue that Google News takes traffic and eye balls away from the publisher…thus reducing their revenues. If I were a publisher I’d be nervous.

Imagine the final 2 minutes of an online auction for a brand new Nintendo Wii with an RRP of $399. The leading bid is just $100. Sounds compelling…yes? You’d consider placing a bid…yes?

If this sounds like you then head over to swoopo.com and more recently planetbid.co.nz and you’ll likely find such an auction…but with an evil twist.

In the case of planetbid.co.nz each bid costs you $1.49 and the bid increment (the amount the sale price raises with each bid) is just 11 cents.

Do the maths: an auction with a leading “bid” of $100 has already earned planetbid a massive $1,354 from bidding fees (divided $100 by the bid increment of 11 cents and then multiply that number by $1.49 which is the cost to place a bid). On top of that, the winning bidder must still purchase the Wii for the leading bid price of $100.

This is an evil business model but what’s really interesting is the psychology at play.

Let’s have a look.

Stage 1: at the beginning of the auction when the leading bid is below say $100 people sniff an opportunity to get a $399 Nintendo at a bargain price - a free lunch if you will. A flurry of bids follow.

Stage 2: the middle of the auction where a handful of bidders have made a small to moderate financial commitment to the auction (remembering of course that each bid has cost someone $1.49). At this point some bidders will see the train wreck ahead and will pull out - cutting their losses.

Stage 3: the end of the auction where, perhaps even unwittingly, two, three or four bidders have placed a large number of bids and in doing so have made a substantial financial commitment. This is where loss aversion kicks in and bidders are no longer bidding to win but are bidding not to lose. They’ve dug themselves a hole and are unwilling to let go. These bidders may have each paid $30, $40, $50 or more in bidding fees and if they lose now they’ve simply thrown their money away. The momentum of the auction combined with an intense fear of loss also brings out blind optimism. When looking at potential loss in the face bidders cling to the hope that everything will turn out OK and the other bidders will drop out before they do. The alternative, to withdraw now, is to accept a sure financial loss - a deeply unattractive option to many people.

Evil. For every auction run there’s only one winner and many many more losers - in the true sense of the word.

As you may have noticed yesterday’s post was my first post in a little over a month…curiously about the same amount of time I’ve been on Twitter.

Follow me @dylanbland

This week I’ve been doing some work with the team over at Mighty Ape to improve some of the site’s key conversion points.

The exercise really highlighted to me how similar building a web site is to building an America’s Cup yacht.

I’m serious.

A web site is like a yacht. It gets designed, built and launched. All things going to plan it does what you designed it to do.

And then the tweaking begins. The optimization.

Teams in the America’s Cup spend hundreds (or more?) of hours testing different sails, different rigs, different bulps and different combinations of all of those things until they settle on a combination that might go a couple of seconds faster round the course than the boat you originally launched.

And so it is with web design.

If you change the copy on this page how many people click through to this page? If you change the colour of this text how many people click this button? If you change the size of this button how many more people click it? And so it goes on.

Just as it is on a yacht you may only milk an extra 2 or 3% but over the course of a year that may add up to a significant increase in people joining, people buying, people making an email enquiry or whatever it is you want people to be doing on your site.

Tweak the boat. Tweak the boat…

A little earlier this year Shane, Simon and I set aside some time to design and build a mobile version of Mighty Ape which launched yesterday.

If you have a web-enabled mobile phone you can check it out at m.mightyape.co.nz.

Building a mobile site was no different from building a regular web site except that you must consider that a) people spend less time on mobile sites, b) people load fewer pages on mobile sites, and c) you have a much smaller canvas to work with.

These constraints forced us to be crystal clear about how we wanted customers to use the site (not a bad thing!). Building every possible feature and page just “because we can” wasn’t an option. We settled on two key objectives: 1) the ability to place orders, and 2) news and releases lists to keep customers informed and to encourage daily visits. We snuck in a few extra things such as checking the delivery status of past orders, but these were secondary objectives that didn’t make it out of the footer.

To achieve the objective of daily visits you’ll find “latest news” “recent releases” and “coming soon” on the home page. This content will change several times per day and is driven directly from the main MA site. To achieve the objective of accepting online orders we obviously added the shopping trolley/cart and the ability to search the database of over 1 million products. We deliberately left off browsing the category tree as it doesn’t work with the whole idea of respecting people’s time and data constraints as described above.

Anyway I’m pleased with how it’s turned out and I’ve already placed my first order from my mobile. If you’re like me and have a short attention span you may even prefer the mobile site to the main site! Visit m.mightyape.co.nz and try it for yourself…all feedback (good or bad) is welcome!

PS: the above may seem all terribly obvious but you’d be surprised how many people I meet that approach building a web site by jumping straight into Photoshop or whatever without giving any thought to what they’re actually trying to achieve. Good web design is so much more than writing clean code or making stuff look pretty!

I’m not in the habit of forwarding on chain emails - however this one that I received today I thought was very good. Enjoy…

A lecturer, when explaining stress management to an audience, raised a glass of water and asked, ‘How heavy is this glass of water? ‘

Answers called out ranged from 8oz. To 20oz.

The lecturer replied, ‘The absolute weight doesn’t matter. It depends on how long you try to hold it. ‘If I hold it for a minute, that’s not a problem. If I hold it for an hour, I’ll have an ache in my right arm. If I hold it for a day, you’ll have to call an ambulance.’

‘In each case, it’s the same weight, but the longer I hold it, the heavier it becomes. ‘

He continued, ‘And that’s the way it is with stress management. If we carry our burdens all the time, sooner or later, as the burden becomes increasingly heavy, we won’t be able to carry on. ‘

‘As with the glass of water, you have to put it down for a while and rest before holding it again. When we’re refreshed, we can carry on with the burden. ‘

‘So, before you return home tonight, put the burden of work/life down. Don’t carry it home. You can pick it up tomorrow.’

…for finding a flat:

I’ve intentionally let the dust settle before posting my thoughts on Ferrit.

What amazes me the most about the whole thing is the loud noise coming from some corners of the New Zealand blogosphere who appear to be delighting in the web site’s failure.

The reasons Ferrit “failed” are obvious - probably even to Ferrit. And sure, if I were calling the shots I would have done things differently. Most people would have. But Telecom isn’t most people and a company that size was always going to go “all in” or not at all. And it’s worth pointing out that Ferrit isn’t the only site taking this approach. Will the same people be so hard on Xero if their dream ends the same way?

It takes a certain type of person/company to put their money where their mouth is and actually give something a go and it’s a lot easier to critisize other people’s mistakes than get out there and risk making your own.

If nothing else, Ferrit gave people something to talk/bitch about. But it also gave a number of small online retailers a real shot at e-commerce; a source of traffic and sales they otherwise may not have been able to afford.

Last month while making a handful of improvements to nzflatmates I thought I’d play around with the prices we charge for GOLD Membership in an attempt to increase our revenues. I learned a valuable (literally) lesson which I thought I’d share.

nzflatmates makes over 90% of its revenue from our members upgrading to GOLD Membership, a highly effective upgrade that dramatically increases the usefulness of the site for flat hunters. Three subscription periods are available: one week, one month and one year.

For as long as I care to remember the prices to upgrade have been $9.95 for a week, $19.95 for a month and $49.95 for a year. There was no real science behind it and I just ran with what felt about right at the time.

Anyway, it occurred to me that our $9.95/week option was eating up our $19.95/month option because it was priced too cheap. If a member upgraded for a week at $9.95 and was unsuccessful finding a flat, he or she could simply upgrade for another week at $9.95 and be no worse off. Given that most people (I should really do some proper analysis) can find a flat within a week or two, at $9.95 it’s worth the risk.

The solution? Bump the price up from $9.95/week to $14.95/week…leave the $19.95/month option unchanged. All of a sudden the $14.95/week option makes the $19.95/month option appear like great value (which it is) and serves the primary purpose of pushing members up to a one month subscription period.

The result? Before we made this change 65% of members opted for the one week upgrade and 30% opted for the one month upgrade. Since we’ve made the change, members opting for the one week upgrade has dropped to just 25% and members opting for the one month upgrade has risen to 70%. Despite the small increase in price of our cheapest subscription period (one week) there hasn’t been significant drop in the total number of people upgrading (I’m not smart enough to work this out properly…taking into consideration natural growth, seasonal effects etc), but most importantly revenue has increased by ~45%. It’s also worth noting that this is another one of those changes where the effort/reward ratio is massive. It took seconds (OK, maybe minutes) to change the prices and it would take days/weeks/months to redesign the site, increase listings or make one of any other possible changes that stood a change of achieving a similar result.

Sadly, maths was never my strong point and I’ve learned this valuable lesson the hard way, leaving quite a lot of money on the table in the process - ouch. If you’re in a similar line of business to me, maybe it’s time to take a look at your own prices and avoid making the same mistake!

Last month I felt motivated to A/B test a key conversion point on nzflatmates in an attempt to introduce some science into how we go about designing pages. This was our first attempt at an A/B test so I thought I’d share what we learned…

For those who don’t know, an A/B test (on the web at least) is when you serve two different versions of the same page to find out which one performs better at achieving the goal of the page. i.e. 50% of your users get page A and the other 50% get page B.

In the case of nzflatmates the key conversion page on the site is the “upgrade to GOLD Membership” page where members are invited to upgrade their free membership to a GOLD Membership for a small fee. This is how nzflatmates generates over 90% of its revenue. How well this page performs can be measured by how many people upgrade to GOLD.

Page A

Page B

We served the two different versions of the page by serving page A to members with an even number Member Number and page B to members with an odd number Member Number. The result? Page B is generating 11% more upgrades than page A. Switching every member over to page B will add a few extra dollars to the site’s bottom line each year, for really not a lot of effort.

So if you’re in the business of building or running web sites I strongly recommend giving A/B testing a go! It can be used to test all sorts of pages…sign up pages, upgrade pages, product pages with “add to cart”, checkouts etc etc. Basically any page where you have a clear action that you want the user to perform.