Creating Wealth at the Cutting Edge

“Just as energy is the basis of life itself, and ideas the source of innovation, so is innovation the vital spark of all human change, improvement, and progress.” – Ted Levitt

The April tragedy at Virginia Tech raised many issues about the role technology plays in communication. One example: The school’s student newspaper identified 12 of the dead students before the national media had the names. They were able to do it because their reporters were smart enough to scan the “walls” on Facebook, the popular social networking site, for memorials to victims on student websites.

We lament the two-hour gap that occurred between the first round of killings at Virginia Tech and the warning sent out to students by the administration. Still, getting a cautionary message like that out to so many students so quickly could only have happened in the last five years. And had the administration been capable of utilizing text messaging – a fairly recent phenomenon – they could have gotten the message out that much faster.

As The Wall Street Journal pointed out in a recent article, automated Internet-based services have changed the way we broadcast messages. People no longer need to be listening to radio, watching TV, near a home phone, or even logged on to e-mail to get important information.

“We’ve never had a culture that was more accessible to being informed,” Gerard Braud, a communications consultant, told the paper.

Having access to more and more information means there is a growing need to have that information sorted and culled and then explained and/or interpreted.

I spoke to David Cross, Senior Internet Consultant to Agora Inc. (ETR’s parent company), and Alexis Siemon, ETR’s Search Engine Marketing Specialist, about the biggest trends in information technology. Here are some of the innovations they suggested we keep an eye on:

• The Television/Internet Connection

Joost.com, founded by Niklas Zennstrøm and Janus Friis (of Skype fame), combines television and the Internet. Viewers will be able to watch broadcast-quality TV shows online, with all the flexibility of the Internet – chat and instant messaging capabilities, hundreds of searchable shows, and no programming schedules. Not only will Joost offer a “new way to watch TV,” it will give advertisers a chance to reach a global audience.

• Searchable Sound

As audio and video are becoming more and more ubiquitous on the Web, the ability to create indexed content from sound is getting closer. We’ve already seen early examples of indexing podcasts. Podzinger.com, for instance, is a service that allows visitors to search podcasts by keywords.

• Search-Engine Specialization

Google, Yahoo, MSN, et al help millions of users sift through massive amounts of online information to find what they’re looking for. And these major search engines are always looking for ways to help people improve the likelihood that their searches will result in meaningful results. One innovation that’s not far away is user search “stores” (like Amazon’s “people who searched for ‘pen’ also searched for ‘paper'” function).

• Contextual Advertising

As the Internet and television become more intertwined, we are likely to start seeing ads targeted to viewers’ personal preferences. Two technologies to watch are Apple’s new TV and Comcast (with a set-top box that is essentially a networked computer with an IP address).

It is already technically possible for two people watching the same program to receive different advertising or product-placement images on their screens. Your cable provider knows what shows you watch – and if they combine this information with, for example, your supermarket purchase history (from your “loyalty” card), you would get to see an ad for your favorite brand of beer, while I would see one for my favorite red wine.

Likewise, the proliferation of PDAs and Web-ready cellphones and the growing availability of wireless Internet could make it possible for local businesses to advertise to people walking or driving past their doors. And as digital billboards become integrated with wireless technology, we will see (rather like the newspapers in Harry Potter’s world) real-time news and advertising updates as we walk down the street.

With all these options (and more) becoming available, the information industry is a much more complicated creature than it was just a few years ago. And those complications offer up plenty of opportunities for you to profit.

Think of the information industry as a spectrum. At one end, you have simple data – raw numbers and plain facts. As you move along, you have information with added value: news reports, for example, which, by nature are selective. Farther along, you have opinion-based information: Fox News programs, ACL newsletters, etc. Still farther along, you have how-to publications: information products that show new enthusiasts how things are properly done. And then, at the far end of the spectrum, you have advisory publications – publications like ETR that turn data and news and opinion into actionable advice.

It is at that far end of the information spectrum where the greatest opportunities lie. And people who understand that – and are familiar with the Internet’s communication capabilities and technological possibilities – can become pretty wealthy pretty fast.

Given so much new technology, the challenge is to figure out how to use it.

Today’s Internet is providing us with more channels – roadways or paths – of human interaction. These channels do not, in themselves, bring business or profits. What they give us are new ways to reach our customers. (The reason direct marketing through the Internet is so profitable is because it harnesses the true power of many of these channels.)

The Internet has not changed what motivates people to buy from you. But it has made it easier for you to put your message in front of them… easier for them to say “yes” to your offer… and faster for you to deliver your products to them.

But you still need to have products that people will buy.

The key benefits the Internet has brought to information publishing are low cost and ease of customer communication.

In the old days, for example, because of the cost of postage, Agora Inc. and its affiliates contacted subscribers to their investment advisory newsletters an average of only 24 times a year. Today, because of e-mail, the number of those contacts has been bumped up to 1,000. Companywide, Agora sends out more than a billion e-mails to prospective and existing customers each year.

That increased customer contact translates into more back-end sales… which is where you make most of your money. You draw in customers with a free or low-cost front-end product, and then you sell them a range of variously priced back-end products.

Information products lend themselves especially well to this approach. When people learn that they can trust your advice (through a free e-newsletter, for example), they are eager to buy more from you. Some will buy all you have.

Let’s say you’ve written a book on a subject you’ve developed expertise in. From that book, you create a special report that highlights the best that book has to offer. You sell that report on the Internet for $10, $50, $100… or even give it away. The price doesn’t matter, because the purpose of the report is to draw in customers – to capture names that you will contact via e-mail to sell back-end products.

This is where you’ll want to have mastered all the new communication technology that’s becoming available. The more avenues you have for reaching customers, the better.

As new customers respond to your report offer, you give them more stuff for free. You offer them an e-zine, occasional updates, or more reports. And you communicate with them as often as possible.

Once you’ve developed a strong line of communication with customers, you can start selling them more information products based on your original book. Create more-expensive back-end products, such as webinars, teleconferences, live seminars, and “thinly sliced” reports that expand on single key ideas from the book. Eventually, each one of those ideas can even develop into its own programs.

The profit margins from sales like these are huge, because the Internet makes the cost of contacting customers – as well as the production, storage, and delivery of information products – so low.

[Ed. Note: Take advantage of the vast array of communication methods available to you, and learn how you can turn your passion, background, or expertise into a profitable, Internet-based, information-publishing business at ETR’s upcoming 5 Days in July Internet Conference.] [Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]