To be fair to HITT, I once again post my customer update.
By the way, couldn't get into RB for a few days so I'm sure I missed some exciting posts from hyperactive bashers and blind buyers. Just the same, here is the latest...
To refresh, I currently have no position in HITT and have not had a position since I sold at $19+ on the last run. My reason for posting today is to do something that very few longs or shorts have done, and that is to discuss the actual business that HITT is in.
6 weeks or so ago, I purchased a sponsorship for $99, and a keyword for $99. While I knew my keyword would not generate much traffic, I had (have?) higher hopes for the sponsorship program.
My account rep, who willed be named "Ms. X", tried to explain the program to me. It is quite confusing. Today, she confessed that it took her some time to get a handle on it herself. We laughed. ha. ha.
Anyway,for those of you who don't even know what Hits Galore does, here is the lowdown.
1) Keyword placement - You buy a keyword in the search engine. I bought "family", realizing that it wouldn't be a popular word on biz to biz engine. Nonetheless, worth a try if they are going to be as large as they hope. $99 per keyword. You bid on how much each click will cost. I bid .01. We are listed 4th on the page because of this bid.
2) Lifetime banner placement - You get listed in the directory, send them a banner, and they rotate your banner on their site for infinitum (or as long as they are in business.. whichever comes first). I checked my stats today. Over the past six weeks, my banner has received only 41 displays and received 4 clickthroughs. 10% is an excellent click ratio, but statistically insignificant with this few impressions. I expressed my concern to Ms. X about the lack of displays. She replied, "We have THOUSANDS of banners to show". So while they promise lifetime banner placement, I don't believe anyone will ever get enough traffic from these banners to make any difference in their business model. The FREEBIE is just a hook to get you to become a sponsor. Which leads me to ....
3) Banner Sponsorship - alrighty.. basically, what we have here is a new form of network marketing, without the downline over-rides. Here is how it works. You pay Hits Galore $99. This provides you with 200 opportunities to sign up new sponsors. They set up a page with your code on it.. for example, hitsgalore.com
this is NOT my page.. just a random customer. But they all look the same with a different ID# attached to it. Initially, I was told that THEY would generate all the traffic to this page for me.
Go to hitsgalore.com
If you reload, you will see that the name under the Free Banner ad in the middle of page changes every time. They rotate all the sponsors here so it is random who gets a signup through this means. Whenever our name shows up, we get an email showing that someone has requested Free Lifetime Banner Placement (FLMP), and that Hits Galore will follow up with them to sell the sponsor package to them. If Hits succeeds in getting $99 out of these prospects, then we get $25. We can have them sell up to 200 new sponsors for us.
Initially I was told the closing ratio was about 50-60%, I believe. Now they are saying 25%. We have had only 6 FLMP signups so far and none have closed. Ms. X suggested that while they will rotate a banner with our code on the above page, it is best if we do some promotion on our own. Fair enough.. I'll give it a shot. Unfortunately, they do NOT provide 468 x 60 size banners, which are standard size for the industry. Instead, they have a completely different size which no one but them uses. I have put in a request for standard banners and hope to have something in the next few weeks to try on my site. In the meantime, I am making one of my own.
I asked Ms. X how many sponsors does Hits Galore currently have. She replied "thousands". She didn't know for sure, but guessed almost 5 figures. THERE is the revenue stream that we are seeing reflected in their statements. 5000 new sponsors=$500,000. Swallow that and analysis follows...
So what did I deduce from my 10 minutes on the phone with Ms. X? A couple things...
First, Hits Galore's search engine has a lot to be desired. It is laden with multi-level marketing schemes. I also gathered that they get very little traffic, thus the low banner displays and clickthroughs. She indicated that they are "just beginning", for whatever that is worth. They are very excited about the radio commercials.
Secondly, and more importantly, Hits Galore is NOT a search engine. Listen closely now. Hits Galore is in the business of SELLING BANNER SPONSORSHIPS and GETTING OTHERS TO SELL BANNER SPONSORSHIPS. This is it folks.
Free Lifetime Banner Placement? All to entice people to BUY a sponsorship
Keyword Placement? A side business. Never intended to be their primary model from what I gather. Rather, if you buy keywords, they will try to sell you on BANNER SPONSORSHIPS.
Local City Editors? Multiply the number of people selling BANNER SPONSORSHIPS.
From what I can tell, and this is ONLY my opinion... Hits Galore is in the Multi-Level Marketing business, without the benefit of a further downline. You buy a product and attempt to resell that product to others. A friend tells you and you may tell 200 friends. If they buy, you make money. If not, oh well.
While it appears that Hits Galore is currently successful with this model, I am not certain that it can sustain itself. It remains to be seen if they can continue to multiply the number of sponsorships.
I have tried to be objective regarding my analysis. I will NOT take up another position in HITT. I will continue to try and generate revenue from my sponsorship as I have nothing to lose.
Not bashing. Not hyping. Take it for what it's worth.
Mayor |
