Freelance Consultant's Diary

Online media has low startup costs and that means that barriers to entry are low. Plus, it is highly technology-intensive. The technology literally changes every day. This is both good and bad news for nano-publishers. So while non-technical people will find that most tools needed for succeeding at online media business are fairly easy to use and do not require a deep understanding of underlying technology, there will be times when you will be frustrated by crooks who are either technologically advanced or simply employ only dishonest business practices. For instance, your affiliate income may be wiped out or lost because some crooks have planted spyware on millions of computers. So while your visitors may be on your website and click on a link that contains your affiliate ID, the commission will go to a crook (this may not happen if you work with a reputed company like Commission Junction or LinkShare ). Similarly, while you might actually believe Google or Yahoo and try to develop...

Every time a company issues a press release, it is officially communicating with the rest of the world. A press release will be used by the media and what you say in a press release can have a huge impact on the image of your business. In this article, I want to discuss how a press release has to be an integrated effort rather than something that only the marketing communications or press/media relations people do. Let us take a look at a press release by Merck yesterday. As you know, Merck has had a major problem with its image since the recall of Vioxx, a drug for arthritis patients. (Related article: Merck's flawed Vioxx recall strategy ) However, the day the media all over the world was reporting that as many 140,000 Americans have been injured by Vioxx, Merck's Senior Vice President and General Counsel Kenneth C. Frazier proudly boasted in the press release, "We have stated previously that we intend to defend these (Vioxx class action) lawsuits vigorously." Merck...

A company called Marqui is attracting a lot of buzz lately. Almost everyone is talking about it. Or in other words, they have achieved what they wanted to achieve by budgeting a mere $200,000. So how are they using Guerrilla marketing? Marqui sells a web-based service for communication management by an enterprise. To create awareness about its products and to highlight successful case studies, the company is paying a meager $800 a month to 15 bloggers to write about Marqui (company, offerings, etc.) and/or success stories, put links, and display an ad. How did the buzz start? Google is the only major company right now that treats bloggers with respect and helps them make a living with blogs (through online advertising through its AdSense program). The number of online publishers (sometimes referred to as nano-publishers) that make a living with blogs is rapidly growing as several blogs compete with large media companies and attract more traffic than companies with multi-million dollar ...

As an online publisher, there is a tendency to associate higher income with higher traffic. Many publishers get obsessed with higher traffic and spend enormous resources to drive traffic to their websites. Almost all search engine optimization (SEO) firms essentially try to convince you that traffic creates value. (Related article: Growing traffic without paying a SEO firm ) In building the online media properties in the eCreativa network , we have learned that while more traffic is not necessarily bad, the kind of hysteria that drives some publishers to grow traffic may be a waste of valuable resources. In our experience, quality of traffic is more important than quantity at least when your goal is to generate revenue (which should be the case if you are a business and not a hobbyist). Let us review some case studies in our network to illustrate the point: Vioxx/Celebrex/Bextra recall : This publication was launched when Vioxx (a pain relief drug used by arthritis patients that was re...

During the month of November-December 2004, we worked on launching a complete section on Vioxx recall to help our readers find unadulterated and unbiased information on what their medical and legal options are. Since we are neither affiliated with a drug firm nor a law firm, our readers have responded positively and now the Vioxx recall news center, which has since converted to Vioxx/Celebrex/Bextra recall news center, is #1 (or on page one) in search results in most major search engines like Google, Yahoo, and MSN. We are very proud of our success because we got the timing right and we have been able to leverage the enormous spending by law firms on online advertising seeking Vioxx victims to join Vioxx class action lawsuits . We learned a lot of things from our adventure in the world of Vioxx/Celebrex/Bextra . And we have decided to apply the same learnings to another area that has heated up since 2005 began: Social Security privatization . We launched a news center (in form of a b...

The amount of money we spend on healthcare in America is a mind-blowing $1.7 trillion and it typically grows at 2.0-3.0X GDP. For instance, it grew 7.7% in 2003, according to the latest data released last week. On a per capita basis, health spending increased by $353 to $5,670. Health spending accounted for 15.3 percent of Gross Domestic Product in 2003, outpacing growth in the overall economy by nearly 3 percentage points. These are very impressive numbers, and remember, this is the situation when as many as 45 million Americans have no health insurance. Here are a few more eye-popping statistics about the US healthcare system: Private payers (primarily private health insurance and payments by individuals for co-pays, deductibles, and services not covered by insurance) funded more than half of national health expenditures in 2003, or $913.2 billion. Private sector spending growth was 8.6 percent. Private health insurance premium growth was 9.3 percent. Out-of-pocket spending for healt...

I will use Pfizer/Celebrex case study to highlight two major points: Distractions are disastrous for any business, particularly when senior level executives are distracted. A strategy that is developed in a hurry without proper input from independent thinkers may actually result in a "strategy vacuum". Pfizer's poor Celebrex strategy Let us go back to September when Merck recalled Vioxx . Tempting as it was, Pfizer aggressively started to court Vioxx patients through direct to consumer advertising . This was a poor choice made since it was not only Vioxx that was being scrutinized, the whole class of drugs (called as Cox-2 inhibitor) was under investigation by the FDA and other agencies worldwide. To make things even worse for Pfizer, at least two reports were released in December 2004 pointing out to adverse side effects of Celebrex and another Cox-2 drug sold by Pfizer called Bextra. At that time, at the request of FDA, Pfizer agreed to pull of all direct-to-consumer ad...

For the second half of 2004, we monitored very closely the performance of about 15 online media properties in the eCreativa network and what we noticed was that Google was slipping in terms of driving traffic to our properties. Prior to that we used to think that Yahoo and MSN were also-rans since Google was driving over 75% of the traffic. Our argument was that unless you had an email address with Yahoo or Hotmail or you were looking for weather or stock market performance, you would not bother with searching at Yahoo or MSN. But then we started to see that we were getting a lot of traffic from both Yahoo and MSN. That is when we started to monitor the quality of results improving significantly in both search engines. It was around the same time that Yahoo started to go aggressively after blogs (we launched about half-a-dozen blogs during this period) and we were amazed by the speed at which Yahoo indexed blogs and websites that the blogs pointed to. (Related article: Value of blogs ...

I have been talking about the ongoing structural transformation of the US economy and how despite an across-the-board improvement in most macro-economic indicators, the jobs have not come back. It seems that we have done everything we could possibly do (I still find it amusing that some politicians and economists actually tried to sell tax cuts as a way to create jobs in the US) and offshoring continues to grow faster than ever. While offshoring is painful for my fellow Americans, I also believe that market forces are working at full speed and they are creating tremendous new business opportunities for enterprising people. (Related article: How to deal with structural changes in the American job market? ) Offshoring or outsourcing to offshore companies works According to a Duke University/Archstone Consulting study that examined the results and offshoring initiatives of 90 large companies with average revenues of $21 billion, 72% of offshore implementations met or exceeded their expec...

The US trade deficit data released yesterday confirmed that the dollar is not likely to get strong any time soon, particularly because no policy change is on the horizon. Our Treasury Secretary John Snow seems to have no clue what he is talking about. To blame other countries for our trade deficit problem simply means that we don't want to take responsibility, we have no control over our economy, and we desperately need help from other countries. Snow implies that somehow other countries (European Union and Japan) are not working to drive growth in their countries - a laughable hypothesis. In other words, Snow seems to have no clue how to reduce the US trade deficit. But a weak dollar is not necessarily bad for everyone, as I had pointed out in my previous article on how to benefit from a weak dollar . To understand the extent of dollar's fall in last two years, just look at the data. Two years ago, a dollar got us 0.95 Euros. Now, we get just 0.75 Euros. Analysis done by iProc...

That is exactly what a recent US government study finds. We have always been made to believe that we have a free market and because of prices that are determined by market forces, pharmaceutical companies can invest more into R&D and develop new drugs that are then made available to Americans first. But new research by the government proves both the government and the pharma industry wrong. (Related article: Why drug prices are high in the US ?) While I have been arguing for a long time, for somewhat different reasons. that the US pharmaceutical industry needs a makeover and the CEOs have to take charge by focusing on business model transformation, it seems that now there is another important reason why pharmaceutical companies need to reevaluate their strategies to find out what are they doing wrong. My advice has fallen on deaf years and what I still see is a bunch of whining CEOs who are relying on regulatory and public policy changes as a way to revive the sector. (Related arti...

As has been discussed before in the context of falling incomes in America, an area of growth for most businesses is in providing luxury for the masses . I have discussed two businesses that do it extremely well: Bath & Body Works and Victoria's Secret . Following a similar strategy, Walmart announced recently that it will sell the Linspire laptop at less than $500. So I was not surprised when Apple Computer announced that it will embrace the "luxury for the masses" strategy. The company has introduced a desktop computer that is less than $500, plus it is also introducing lower-price versions of its other popular consumer electronics products like iPod. (Related article: As incomes fall, American consumers cut spending ) What does it mean for you? If you are a provider of hardware/software/peripherals/services that are platform-independent then this is great news for you since it will bring more PCs (and other electronic devices) to homes. Most management consultants b...

In recent weeks there has been a lot of buzz about the growing power of bloggers and the enormous benefits of blogs (Related article: Blogs become preferred content marketing medium among marketers ). Of course, there was the cover story in Fortune magazine and commentary by Fool.com. There have been numerous other articles in the mainstream media. But what really excites us is that Parnassus Ventures is organizing a Blog Business Summit. In other words, the blogosphere is heating up. Of course, the most exciting day will be when advertisers and marketers actually start making sales calls in the garages of many powerful bloggers. That will truly be the day when democratization of the Internet will happen. It is no secret anymore (at least among those who care to keep on top of business trends) that blogs have a lot of clout these days. In some cases, they can make or destroy a product. We ourselves have seen enormous success with blogs in our network. The most noteworthy is, of course,...

There is some good news for companies in the business of fighting Spam. As a management consultant , while I do not completely trust data provided by companies that also offer a solution to the problem, I am willing to believe to some extent what MX Logic is saying: "...one year after the Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act went into effect, on average 97 percent of unsolicited commercial email over the past year failed to comply with the federal anti-spam law." In fact the company reports that the overall volume of Spam increased in 2004 and will continue its growth in 2005. I had always known that the direct marketers made the CAN-SPAM Act extremely weak when it was passed and like many other experts, I was never convinced that Spam could be fought with regulations. While we still produce the largest amount of Spam right now, I would not be surprised that Spam moved offshore if we tighten our laws too much. That is why I am not ...

While the economic recovery in the United States has been impressive (obvious from most economic indicators), there is one area that is among the most important, but has shown no major improvement: new jobs created. According to latest statistics, only 2.2 million new jobs were created in 2004, the best showing in five years but much lower than a previous administration forecast of 3.6 million new jobs. According to Challenger, Gray & Christmas, last year American companies cut as many as one million jobs, either to stay competitive or because they jobs were offshored . We have done everything in our arsenal (including massive tax cuts that have fundamentally damaged the American economy and will it continue to hurt its competitiveness for years to come) but job growth remains, at best, anemic. (Related article: Structural changes in American job market impede new job creation ) Reasons why job growth is not likely to improve The kind of job growth that we saw in the 90s may not ha...

The news that Sirius and Microsoft are collaborating development of video applications for a new mobile video platform may seem like just one more way in which Microsoft wants to be part of the digital lifestyle, but in my opinion it is something more than that. Satellite radio and a whole bunch of associated hardware/software actually represent what my good friend Ed Zander , CEO of Motorola, calls "Seamless Mobility" (at home, at work, in the auto, and out in the world). As a management consultant , it is definitely going to make my life easy. Sirius and Microsoft are making a small start - two or three channels targeted at children. But the possibilities are enormous, particularly in a world where use of air travel is declining (Related article: Airlines in America continue to struggle ) and an automobile is the preferred vehicle in a post-9/11 world. I would not, therefore, be surprised if an automobile simply becomes an extension of digital home/office allowing us acces...

When Delta Airlines announced a business model transformation , I had welcomed it since as a management consultant I know that there was no other way the firm could survive. But now that all other major carriers are going to match the pricing of Delta Airlines, not only does it mean that airline sector losses will skyrocket, it will start a price war that can only mean that consolidation in the sector will be the next wave. I cannot imagine how else can an airline manage to have such lower prices without doing much to the cost structure. When Delta Airlines announced its plan, it was obvious that they had made major improvements in their cost structures. I am not sure if other airlines have made the same changes in their business model. The US airline sector is completely directionless and there is ample evidence that most airlines do not have a strategy. The 10 largest carriers had losses of $20 billion in the past four years as competition from discount airlines forced them to lower ...

While working as a management consultant for a $1 billion consumer products goods (CPG) company, I discovered that Wal-Mart was not only their largest account (~$125 million annual sales), there was no other account that was even $10 million. So when their vice president of sales said that when Wal-Mart asked them to "Jump", all they asked was "How high?" This story illustrates exactly what is happening with manufacturers who are trying to incorporate RFID technology due to pressure from retailers. (Related article: How to develop a RFID strategy ?) It is no secret that the push from retailers is coming primarily because of the billions of dollars in expected savings from using RFID tags. However, at this time, incorporating RFID into the business operations of a supplier is added cost (which includes not only the cost of tags, but also associated hardware). For some suppliers, this cost per unit can be anywhere from $0.10 to $1.00. Or in other words, considering ho...

Nothing excites a management consultant than helping a company with its business model transformation. So when I heard the news of IBM selling off its PC business to Lenovo, I knew it was the final step in the business model transformation (products/services to high-value solutions) of the company. (Related article: The pharmaceutical companies in the US badly need business model transformations ) Now comes even bigger news of Delta Airlines announcing a business model transformation even though the company only used the term "transformation". Apart from another attribute that I love as a management consultant: simple (a word used several times by the company), Delta says that it will make other changes "...including improving customers’ online experience at delta.com, revising its onboard food product and unveiling new employee uniforms, as part of an ongoing company-wide overhaul to make the passenger experience more comfortable, affordable, simple, stylish and inviti...

It was not too long ago that I had outlined the essentials of leadership . Using that yardstick, I have been trying to assess the performance of some of the CEOs in the pharma sector, and more specifically Merck CEO Raymond Gilmartin and Pfizer CEO Hank McKinnell. I am quite disappointed with the performance of Gilmartin who is responsible for a flawed Vioxx recall strategy and has provided, like Martha Stewart, a classic example of how to destroy shareholder value . I had expected that Hank McKinnell would set a better example and learn from the mistakes committed by others. I initially hypothesized that Pfizer will be hurt by its poor risk management strategy . Now it seems that Pfizer has no risk management strategy. In an interview with USA Today in response to the question, "What happens to you financially as a consequence of withdrawing the Celebrex ads?", McKinnell says, "We haven't even thought about that. " I hope McKinnell was not telling the truth sin...

The latest statistics on online holiday shopping are remarkable for a couple of reasons: Internet does change everything; it just takes somewhat longer than some visionaries in early 90s predicted. A YOY increase of 25% is remarkable but remember that it is simply a channel shift. So it mostly benefits online-only retailers while those retailers that have both offline and online businesses will see mixed results. While margins on online sales are relatively higher, if the sales came at the expense of offline sales, they need a change in their channel strategy. Early skeptics had hypothesized that apparel/clothing are what draw people to malls, and other than what was already being sold through catalogs, there was not much growth potential in this category. Apparently these skeptics were wrong. It is the largest category at this time. Another interesting category that is seeing tremendous growth is jewelry. Even Amazon.com mentions that it was a high-growth category for them as well. Wh...

Some sobering statistics have emerged from the Relemail Email Privacy Survey conducted in November 2004. In other words, while it may be too early to declare the demise of email marketing , as management consultants have been pointing out for over an year now, the days are definitely numbered. Let us review some of the key findings of the study: 83% of users have avoided subscribing to an email newsletter because they weren't sure they could trust the publisher 78% do not always believe companies' own email privacy statements 87% believe they have received spam from an organization that collected, and then sold, their email address 96% say email privacy is important to them 80% say they have tried to unsubscribe from an email newsletter and found that the unsubscribe did not work So what is likely to replace email marketing? This is a question that your current email marketing provider is unlikely to answer in a way that serves your best interest. On the other hand, you might a...

The pharmaceutical sector in the United States has taken a lot of beating in recent months, particularly after Vioxx recall in September 2004. Now there is already speculation that Celebrex and Bextra may be recalled as well. And the latest one is about Eli Lilly that it might have known as early as 1988 that Prozac was a dangerous drug and this is likely to lead for renewed calls for Prozac recall . Apart from the billions lost in shareholder value, there will be another change: the drug approval process may become more difficult. In other words, the cost of drug development will go up further, making it more difficult for pharmaceutical firms to keep their costs under control. As FDA becomes more cautious, drug applications will get bogged down in the federal bureaucracy not only in the United States but elsewhere as well as confidence in the FDA takes a nosedive. And that's not all. A longer drug approval process also reduces the time for the drug to keep its patented status. Wh...

A lot of business executives fail to understand why a product that they thought would change the world actually turned out to be a total failure. Then they come up with excuses like "It was ahead of its time," or even worse, they blame the customer and joke that the "Customers don't get it." Nothing could be worse than that. If your product doesn't sell, the problem is not with the customer; the problem is with you, your product, and your company. Or in other words, I am still frustrated that despite the iProceed mantra that "You don't exist without your customer," companies still continue to ignore what really matters in business: customers . So it was no surprise that Jurgen Schrempp, the chairman of DaimlerChrysler, is "befuddled by the complaints about such seemingly inconsequential matters and cup-holder size and air-conditioner velocity". The point to learn here is that no matter what your smartest engineers think, it is the cus...

There is a lot of encouraging news for nano-publishing companies like eCreativa Network that operate some combination of blogs ( MYNIPPON lifestyle blog , LuvCube love blog , Lindisima Latina Blog , Management Consultant , eBusiness blog , Mujer Cristiana , Consultant Blog , MYNIPPON update blog ) and websites ( iProceed Strategy , MYNIPPON lifestyle , LuvCube Find, live, and enjoy love , eCreativa , and Lindisima Latinas ). There is also some great news for companies that no longer believe in email marketing and have switched to real simple syndication (RSS) as a way to bond with their customers/readers. Two surveys by the Pew Internet & American Life Project in November show that: 8 million American adults say they have created blogs; Blog readership jumped 58% in 2004 and now stands at 27% of internet users; 5% of internet users say they use RSS aggregators or XML readers to get the news and other information delivered from blogs and content-rich Web sites as it is posted onlin...