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…