Now here's one last article that reiterates
the points of the previous two messages- the point being
that "branding" in and of itself is not the solution
to directing enough traffic to a website to generate
enough volume to be able to raise the advertising
rates for ad placements on the site and in the services.
The "Volume" models based on "branding" just have proven
thus far to be failed experiments if making money
ie. earnings is the ultimate goal, as it should be, of
a business.
Actually PNL will ultimately be more successful via
third party marketing, that is establishing itself
via its associations with already recognized branded
companies.
Again, I suggest you discuss,
agree, disagree with what issues I raise or simply
ignore them. Personal insults aren't necessary
or appropriate.
I'm not arguing that PNL will ultimately
be successful or not. In my opinion though, PNL
has engaged upon a very complex and tall order
that needs a long run way for the plane to take off.
IMO PNL is still giving away tickets to fill the plane.
PNL is working hard to get there, hopefully
soon, their attempts to comes up with means other than
lost ticket sales will generate, at least, enough money
to purchase the plane's fuel.
Sorry, if my point of view offends, but rather
than reply with insults, point out to me where
I'm wrong or mistaken.
z
=============================
Branding vs Third Party Marketing
Re-engineering e-tail
Cyberstock Investor Report 01/22/2000 7:00 PM
By Matt Ragas
ragingbull.com
"...Think about the dilemma an e-tailer faces. Spend millions on marketing and your
losses mount, but your sales growth continues and some of your shareholders
are appeased. Or, concentrate on the bottom line and cut back your marketing
spending, and investors punish you for no longer showing generous top-line
revenue growth. Either way, the end result is that product margins are constantly
under pressure. Talk about a business model tinkering on the verge of being broken!
Pure-play e-tailers focused on commodity categories such as books, music, and
software seem to be engaged in a war they simply can't win.....
.....But back in May of last year, Global Sports CEO Michael Rubin hatched a new
business model for his firm after investigating the numerous pitfalls of establishing an
Internet presence. Rubin quickly learned that the costs to establish a new e-tail
brand from scratch were atrocious, and that traditional sporting goods companies
were largely unwilling to shoulder the costs of operating a Web division. At the same
time, pure-play sporting goods e-tailers like Fogdog (FOGD) and Gear.com
were burning millions of dollars in an attempt to build their brand and customer
base. To complicate matters further, many sporting goods manufacturers were
unwillingly to sell their products to these unproven e-tailers. Rubin came to the
conclusion that there was a sizeable business opportunity lying in all this online turmoil.
Thus, the complete re-engineering of Global Sports began.
....Think about the brilliance of this game plan for a second. Global Sports is now able
to leverage the established brand names of The Sports Authority (TSA),
Oshman's Sporting Goods (OSH), and The Athlete's Foot, among others, which now
become part of Global Sports' e-brand portfolio. In addition, these agreements all
require the offline sporting goods companies to promote their Web sites in all
of their stores and in offline advertising. These marketing activities directly benefit
Global Sports, and cut down on the company's own marketing spending enormously.
...The jury is still out on whether Global Sports can actually make this model work. I
can write all day about the inherent cost savings and benefits I see, but the proof
will lie in the execution...." |
