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The stuff I learnt from Markus

You may think that Markus must spend a lot of $$ to maintain his site. A picture of server farm may be popped up in your head. Hahaha… all he needs is just 1 web server and 3 database servers. This is the cost that you and me can afford. No bother to write your business plan and wait for VC $$ nowadays.

Here are some quick tips for Markus

1. You need a lot of RAM. RAM is cheap, go ahead to power up your box with tons of RAMs please!
2. Markus uses Akamai CDN to offload the bandwidth of fetching images across different locales.
3. Separate R/W database operation.
4. Markus uses one database as master for write and 2 databases as slave to handle the searches (read). According to him, radius-based searches demand lots of resources. “If you have one system to do just one thing, it will do it much efficiently.”
5. Markus put RAM to both web and db servers. “If you can load your whole db in the RAM, do it!”
6. Optimize the db access is the key to handle lots of requests.
7. Denormalization is necessary if you want to reduce the number of joins that can potentially slow down your queries.
8. PlentyOfFish.com is purely based on “Word of Mouth” marketing. Do things right, your users will spread it out for you. Cheapest marketing strategy ever!
9. PlentyOfFish.com is FREE site. Because it is free, it doesn’t have high requirements like uptime. It can be down without much issues.
10. PlentyOfFish.com solely monetized from advertisement like Google Ads. Just this, Markus is making around 10 million annually. Amazing!
11. PlentyOfFish.com is purely using Microsoft solution like IIS, ASP.NET and SQL Server. In fact, you can build it using other solution like Apache, Spring, MySQL

I love to see how people like Markus beat down the giant like Match.com. One man beats hundreds of people with simple system settings. Incredible! Folks, there is no excuse whining no $$ to start your business!

Although it sounds easy for Markus during the interview, there are areas the interviewer didn’t cover:

1. PlentyOfFish.com webfront is not looking good. How could it attract the first set of users in the first place? FREE
2. If you go to a FREE site without data, you may leave it right away. How PlentyOfFish.com attracts the first real user? Did PlentyOfFish.com crawl competitors’ data to power his site as bootstrap?
3. PlentyOfFish.com purely makes $$ from Google AdSense. However, according to John Chow, Adsense is not a good place to make $$. Why is that?

What possibly may go wrong for his approach:

His database architecture is traditional master-slave approach. It can offload the read but not write operations. Obviously the master becomes the write bottleneck and a single point of failure. And as load increases the cost of replication increases as well. Replication costs in CPU, network bandwidth, and disk IO. The slaves fall behind and have stale data. The folks at YouTube had a big problem with replication overhead as they scaled. This problem can be tackled by shard/ federation. I will discuss this topic later.

1. Audience segmentation
2. Targeting
3. Positioning

Audience Segmentation

We normally segment our audience based on the following characteristics:

1. Geographical - location like country, dma, city, zip
2. Demograhical - gender, age, income, education, culture and job.
3. Behavioral - online/offline shopping behavior, web usage, website loyalty, prior purchases.
4. Psychographical - social class, lifestyle, personality, type

For a market segment to be useful to marketers, it should meet some certain criteria:

1. Measurable and obtainable
2. Accessible with minimum of cost and effort
3. Large enough to be profitable

Targeting

How to target the segment you chose? There are many ways that you can do it: email, banner advertising or viral marketing. Here I will not go through each of them. I will focus on banner ad with behavioral targeting. The idea of advertisement is to drive more sell and profit to the company. To do that, you need to be targeted in order to make the advertiseing dollars you spent more effective. Segmentation is a good start. After that, you need to understand that the buying cycle of your product. It normally drives from customers’ needs. If there is a need, users normally start to do the information gathering and the buying window is open at that time. If you successfully push your relevant ads with the right message to them at that time, there is good chance they will react on your ad. The idea is simple but in practice it involves a lots of work. First, we need to gather enough information to segment our users. Normally, online traffic stream doesn’t contain demographic and psychographic info. That is why big giants like Google pay top dollars to buy the social networking site. They are not buying their tech but the huge user-based and site-stickiness.

1. Undercount the conversion (both click and view-based). However, vast majority of conversions (70-90%) occur within 24-hour window of the corresponding click or impression and there are not too many people delete cookie daily. So, the impact is not that much.
2. Underestimate the frequency and overestimate the reach
3. Users may continually fall off the profiled segment and behaviorial targeting. If the trend continues, that may translate to less available profile inventory, which could result in higher prices or under-delivery. Nonetheless, cookie deletion should not diminish the value of the targeted impressions that publishers are currently able to deliver. There are even an argument that cookie deleting may actually increase the value of targeted inventory since recency is a dominant driver of effectiveness in behavioral targeting.

Some studies suggest that you need seven contacts with a customer to make a sale. Retargeting is an invaluable tool for developing that relationship with prospects.

Case Studies:
During the campaign, DrapeStyle experienced a 38% increase in clicks. Previous site visitors who were retargeted converted into sales an astounding 5.5 times more often than prospects who were only targeted through DrapeStyle’s paid search campaigns. Moreover, DrapeStyle’s CPA (defined as sales or brochure requests) fell approximately $50 to an extremely cost-effective $2.80 when search and retargeting were combined. In summary, during a four-month period, the company invested $80 for retargeting and gained $22,500 in revenue. DrapeStyle’s retargeting campaign highlights the key benefits of adding retargeting as an extension to current online advertising and traffic-driving methods.

Reference

• http://www.retargeting.com
• http://www.fetchback.com