Unlimited Disk Space, Unlimited Bandwidth, Unlimited Websites but Really?

How unlimited is "unlimited"? Remember "If it sounds too good to be true, then it probably is!" It's all about enticing one to use a product or service. Food and cosmetic companies give out free samples in hopes that you're going to enjoy the sample and buy the product. Automobile companies offer free test drives betting that you are going to enjoy the car and make a purchase. Other companies are much more creative and perhaps a little sneaky about how they entice you to use their products or services. German born physicist Albert Einstein said, "If the facts don't fit the theory, change the facts." How can a company afford to offer unlimited disk space, bandwidth or websites?  In truth, they can't.  Instead they change the facts by changing what the limits are based on. Instead of limited disk space, they limit:

• the number of files one account can store,
• the number of databases,
• data transfers.

All of these solutions will have the same effect of limiting resources. Don't forget about those legal notices that we so often ignore. I mean who wants to spend a half an hour reading some long winded legal mumbo jumbo when all you want to do is lock in this great deal you're getting before it goes away.

Ever wonder why legal policies and disclaimers are so lengthy and redundant. The answer is in the details. Omit one seemingly insignificant requirement and what you have is one enormous loophole. One missed detail could mean the difference between a good deal and a rip off. I woke this morning to a brilliant example of the consequences of my inattention to detail. Last night, I beamed with joy at my daughters Facebook status update exclaiming her happiness. The second child of three she never tried to compete with her older sister, the athletic and scholastic genius. Instead, she took on a common role for middle children, affectionate rebel and drama queen. She longed to look the part of her rebel role complete with body piercing and tattoos. As any parent will tell you, bribery and negotiation are the best way to handle a rebellious child.  Worn down from years of constant nagging, I finally resorted to bribery, giving her permission to pierce her nose when she made the schools honor roll.

Leave it to my little rebel to find the loophole in our arrangement. Summer school, where all you need to do is show up, flash that dazzling smile and bat your eyelashes at the young teacher fresh from college to be the best student in the class. Yes, she made the honor roll in summer school and yesterday claimed her prize. A sparkling new piece of jewelry stuck through my baby girl’s perfect little nose! While I meticulously detail the agreement for my eleven-year-old stunner, master manipulator and cunning negotiator, I have a newfound respect for the long, seemingly superfluous legal policies and disclaimers once loathed. Let this be a warning to parents everywhere to close those loopholes!

Now getting back to the topic at hand, the unbelievable deal you are being offered with "UNLIMITED" this and that.  Loopholes work both ways.  A loophole can offer a way around an agreement like my nose piercing rebel, or it can be the way around the offer entirely.  By putting thousands and thousands of websites on a single server, sharing a single IP address you are in effect limiting the resources you are providing.  Your website will run slow, hang and fail to connect sending potential customers to your competitor that didn't take advantage of the same unlimited offer. Ready, here's the kicker...the loophole buried deep in legal jargon.  "In the event the bandwidth or disk space usage presents a risk to the stability, performance or uptime of our servers, data storage, networking or other infrastructure, you may be required to UPGRADE or we may take action to restrict the resources you are utilizing." That's right RESTRICT resources, right there in print. There goes your great deal and after you have put in hours and hours of time and money moving everything over to utilize this deal that was just too good to be true.

Yelp Advertising Rip-off Small Advertisers?

Yelp!

That word could be coming out of the mouths of small-business owners when they hear how much the online reviews site is overcharging them for advertising. At a time when much online advertising is being sold for 60 cents per thousand impressions (CPMs), Yelp is charging some local advertisers $600 per 1,000 impressions.

That’s not a typo. Yelp is charging small businesses 1,000-times the standard online CPM rates for local ads that appear on Yelp. Even when compared to its own ads for national advertisers, the company is charging a 100x premium.

This is the type of ad a national advertiser would buy: According to a source who has purchased this type of ad on Yelp, the rate is about $6 per CPM. This ad unit works like most online ads: when someone clicks on it they are taken directly to the advertiser’s site or a specialized landing page.

Now consider the types of local Yelp ads that small businesses buy:


In this scenario, the ad goes to the advertiser’s Yelp review page. That’s a page where users are free to leave any kind of review for the business, including ones that trash it. That ad runs about a $600 CPM. Yelp is currently in its quiet period while it is preparing for its initial public offering and did not comment for this story.

According to a rate card forwarded by a business solicited by Yelp, this is what the company is charging. Note that these are general rates for Yelp, not specific CPMs for the advertisers shown:

    $300/mo – includes 500 targeted ads per month
    $540/mo – includes 1200 targeted ads per month
    $825/mo – includes 2100 targeted ads per month
    $1100/mo – includes 3000 targeted ads per month

It’s common for more targeted inventory, such as the type that Yelp provides, to command higher CPMs. But triple-digit CPMs are extremely unusual. (Yelp’s rates vary based on category and demand.)

At the high end, it’s a $600 CPM. At the low end, that’s a still eye-popping $367 CPM — more than 10-times the rate of a Super Bowl ad.

To make matters worse, Yelp requires a 12-month commitment for these rates. (The representative offered this business higher rates for a six-month commitment. Yelp also offers 3-month agreements.) Even if Yelp doesn’t deliver your business a single customer, you’re on the hook for $3,600.

For comparison, Facebook only requires that you set your budget to $1 a day and does not have a commitment. A business could try it for a week, see if it performs and then decide.

Even as Groupon’s toughest critic, I can list scenarios in which it makes sense to run a Groupon. I cannot think of any scenarios where I would advise businesses to advertise on Yelp at these rates.

For online advertising, I strongly recommend against commitments and impression-based advertising. For a restaurant, a service like GrubHub makes more sense. You only pay if someone uses the service to order and there’s no commitment. Such services typically charge restaurants 10-20 percent of the value of orders they send.

Despite ostensibly being an Internet company, Yelp’s business model is closer to that of yellow pages companies: sell a questionable value proposition to many who don’t understand what they’re buying. While it may work in the short term, as the stocks of yellow pages companies show, it’s not a long term proposition. SuperMedia is down 92 percent since it debuted. Dex One is down 94 percent.

Combined, those companies have a valuation of $145 million. Yelp is reportly seeking to raise $100 million at a valuation of $1 billion to $2 billion. (Not that I would advise investing in SuperMedia or Dex One.)

Yelp’s rates for national advertisers aren’t way out of line. Unfortunately for Yelp, local advertisers account for 70 percent of its revenue.

In its latest S-1, Yelp reported strong revenue growth that earnings increased 74.5 percent year over year and 11.7 percent from the previous quarter.

But given the flaws in Yelp’s core business model, it won’t be long before investors and advertisers are leaving one-star reviews.

February 6, 2012 1:22 PM
Rakesh Agrawal
Read article in its entirety

Rocky Agrawal is an analyst focused on the intersection of local, social, and mobile. He is a principal analyst at reDesign mobile. Previously, he launched local and mobile products for Microsoft and AOL. He blogs at http://blog.agrawals.org and tweets at @rakeshlobster.

Internet Market Consulting: Hosting $3.95, useless backups $19.95, a functional well-managed website priceless!

Internet Market Consulting: Hosting $3.95, useless backups $19.95, a functional well-managed website priceless!

Google Page Layout Algorithm

Google recently launched algorithmic change that looks at the layout of a webpage and the amount of content above the fold. Above the fold is a term used to describe content that is visible when a webpage first loads. Aimed at providing better search experience by providing Google users with high quality search results and eliminating websites that require visitors to scroll through page after page to reach actual content. Read more... Need help navigating the murky waters of Website Promotion? Give us a call (877)343-4622 we are here to help.

Designers Beware: 10 Warning Signs of a Bad Client

No other force has more power to make or break the spirit of the web designer than the all important client. The good ones make us love our work and the bad ones can make us wish we were dead. Sometimes when it gets really bad, we have to fire a client. But wouldn't it be great if we could tell the good ones from the bad ones right away and avoid them like we would bad fruit at the market? I don't think it will ever be quite that simple. There will always be a few bad apples that sneak in under the radar. But over the years I've learned a few warning signs that are dead giveaways for hard-to-please, controlling, whiny and/or needy clients. If you come across a potential client with one of these, think twice about the project. If they have two or three, run the other way.



1. Client who claims their last designer just couldn't quite give them what they wanted

Admittedly, there are some situations where this is a valid claim. Most of the time, though, this client is controlling and hard-to-please. It may seem a little awkward but it's important to probe them for some details about their relationship with the previous designer. Ask if you can see some of the rejected work. Find out how many iterations they went through before the client gave up on them. If the client is willing to give you this information, you should know pretty quickly whether or not you should pass on the project. If they won't, proceed with extreme caution.



2. Client with computer skills that are grossly lacking

Clients who are extremely computer/web illiterate suck a lot more time than ones who know their way around. Keep that in mind when you're quoting a job for this client. Sometimes I've even found that a client's frustration with technology can be transferred to the designer—a kind of guilt by association. The last thing you want is to coddle a client through a project only to have them bad mouth you to all their friends because they're frustrated with the technology.



3. Client with "a little web design experience"

You've probably run into this client before. He's the guy who built his last website in Front Page and can't understand why the project is going to take so long and cost so much. He knows just enough to question every decision you make. If this client starts out on a controlling note, you're probably doing good to pass on the project. If you decide to chance it, it's important to establish yourself as the expert early on in the process. Don't leave any room for doubt. Do your research and be prepared.



4. Client who offers a percentage of their business as payment

I went for this one a lot when I was first starting out. Don't do it! People with million-dollar ideas and no money are a dime a dozen. You should get paid for what you do. Also, keep in mind that if the website ends up being a huge success, you're going to be first in line for the upgrade and support work anyway. That's true whether you get paid for the initial project or not.



5. Client who insists on three or four different design mockups

Clients who love options are usually clients who love control. Clients who love control can quickly become time-sucking, make-you-wish-you-were-dead, demons from Hades. Be wary of this client. He's the sneakiest and hardest to read of them all. Sometimes everything ends up just fine. The client quickly chooses an option and you're on your way. Other times you end up with a nine month project that should have been finished in two.



6. Client with the flowchart

Sometimes clients who bring flowcharts to the first meeting are just highly organized and efficient individuals who want to make your job as easy as possible. If this is the case you'll know right away. When the client is saying things like, "You're the expert, but we put these together to give you a better understanding of how our business works", etc. You have nothing to fear. But when you get a stack of paper with every detail of the website pre-planned, you are dealing with a control freak, and potentially your worst nightmare. It's not worth. Let the project go to some other poor shmuck.



7. Client with a big IT department and no marketing department

The company that has a lot of IT workers and no marketing department will almost certainly clash with your ideas about design. In my experience, the IT department in a company likes to have control of the website because they view it as part of their territory. Right away you're dealing with an issue of clashing egos. And with no marketing department there to balance the situation out, you end up with an overdose of type A personality that's no good for anyone. Be careful with these types of clients.



8. Client who thinks Network Solutions or their ISP is your competitor

A client who thinks you are in direct competition with cookie-cutter website solutions and local ISPs is probably not going to value your work very much. Dealing with clients like this always makes for a strained relationship. They may be willing to pay your fee because they "don't have time to mess with the other solutions", but they will always view you as a necessary evil. That's not exactly the type of business relationship you should be looking for.



9. Client with no previously created promotional content

Clients who blatantly disregard the value of marketing and advertising are many times frustrating to deal with. To start, they have no previous experience working with creative agencies, so everything is a learning process. Also, the lack of raw materials makes it difficult to get started. And once you do get started every piece of content you need will take extra long to get because it has to be created from scratch. If you're going to jump into a project with a client like this, make sure you're ready to spend some extra time or hire a copywriter to produce the content for you.



10. Client with a current website that was designed by a family member

This is never a good situation. There are always a lot of feelings involved and hoops to jump though. It's especially bad with the previous designer/family member is part of the decision-making group for the new design. I've been in meetings like this where pride and ego end up splattered all over the conference room. It's not a pretty sight and I don't recommend it for the weak stomached. Don't go for this project unless the family member is completely out of the picture. And I don't mean dead, because then you're looking a whole new set of issues.



by: Matthew Griffin

Click-Jacking

Feds charge seven men in 'click-jacking' scheme

 By David Sarno, Los Angeles Times

In a reminder to consumers to be careful what they click on, federal authorities have charged seven men with infecting millions of computers with a virus-like program that tricked users' Web browsers into navigating to phony pages stocked with ads, earning the defendants as much as $14 million. In a type of online fraud known as click-jacking, the malicious software waited for users to click on links to popular sites like Apple's iTunes or Netflix.com, and then quietly redirected their browsers to similar-looking sites larded with online ads — ads that allegedly earned the defendants cash each time they were displayed.

HTML 5 Standardization

HTML5 is all the talk. While many features are going to be great there is still so much work needed to provide standardization. I'm excited but with all of Google's algorithm updates, the constant flux in the quality of search engine results I am apprehensive that the www is going to be further splintered. Apple's Mobile operating system (iOS) and now Google's involvement in the creation of HTML5, not supporting many of the XHTML standard code the cost of quality website design with consistent website browser rendering is going to double if the Giants do not start working together.