Monthly Archives: April 2010

Sorting smokers

Today’s announcement that cigarettes are going up to $17 a packet made me consider what people would save if they quit smoking and put their savings on their mortgage. Here’s what I found out by using Sorted’s calculators:

If you smoked a packet a day that’ll cost $238 per fortnight in 2012.

If you have a mortgage of $200,000 at 7% interest you’ll need fortnightly repayments of around $652 to repay it over 25 years.

The interest you’d pay over on that mortgage over 25 years is $223, 861. That’s just the interest.

If you quit smoking and put the money you spent on cigarettes into your mortgage repayments you’d make repayments of $890 per fortnight.

The result of this wee action would mean you’d pay $107,482 in interest and pay off your mortgage in just 13 years and 4 months.

That’s a saving of $116,379.

Visit Quitline now.

Bidding Bon Voyage to Bebo

This week’s announcement from AOL that they’re likely to sell or close Bebo after paying US$850 million for it early last year did not surprise me. AOL are legendary for muddling even the best of products and for the last 12 months I’ve seen Facebook really outperform Bebo on a number of levels. And for me, a core level is advertising.

In early 2007 I began running ads for some of my clients on Bebo. This new player on the local social media scene had quite simply exploded with Kiwis aged 12-24 and I was keen to get my clients’ sites noticed here.

The journey to get ads to air was very drawn out. At that stage Bebo didn’t have anyone on the ground in NZ so I had to go all the way to Jim Scheinman, the CEO in San Francisco, to get some sort of traction on who and how we could get our ads rolling.

In the end the solution was to use Google’s Placement Targeted Network. Now I was absolutely happy with that. Using Google I could easily optimise exposure and cost. After all, a site receiving hundreds of millions of page impressions was ripe for the picking and low cost high exposure advertising was underway.

Subsequently, we had a number of really successful months running ads for our clients on Bebo until it all went to pot when Bebo enlisted TVNZ’s help as their NZ media sales partner. All of sudden a complex middleman was here using a CPM model for buying ad placements on Bebo. It just didn’t work.

So we stopped advertising on Bebo. Our clients couldn’t afford it.

Fortunately at this time another social media site called Facebook was building real momentum in New Zealand.

Facebook had learnt a thing or two about surviving online and invested in creating an ad management console that enabled people to manage their own advertising just like Google. We tried it with a few of our clients and it worked. And it still works for us every month.

Now I know we’re only ‘little old New Zealand’, but I can’t help think that that very simple decision of keeping the ad logistics simple and enabling a long tail of advertisers to fill these vast voids of ad inventory was a pointer to why Bebo is melting and Facebook is solidifying its position as the global player in social media.