Mark Cuban issued an open challenge on his blog this week for ideas on helping the movie industry come up with a new customer acqusition model.  According to Cuban, the current economics are killing the industry, with studios commonly spending $8 to $12 per customer for an opening weekend movie run.

Why not the Value Per Action advertising model?  Instead of interrupting and annoying me with wasteful movie advertisments, billboards, banners, etc., why don’t the studios bring me directly into the value of their advertising by sharing back a portion of the advertising fee with me each time I book a ticket online.  Get rid of the waste and inefficiency of traditional advertising and use your ad dollars to drive demand in a risk free, verifiable fashion.  The system could work very similar to the initial Jellyfish.com retail shopping experience.  

I would propose the following:

1. Partner with Fandago, Moviefone, Movietickets.com and other online ticket services to leverage their ticketing infrastructure
2. Integrate the Jellyfish VPA sharing concept within this online ticketing system and promote a new online ticket service (VPAMovieTix.com)
3. Allow the studios to bid for sales using their advertising dollars, driving demand with pricing promotion in this new risk free channel

For example, I want to take my kids to a movie this weekend and visit VPAMovieTix.com.  I look for the latest childrens’ movies, watch trailers, read reviews, etc., and select which movie tickets to buy.  When I buy, the site gets paid a commission for the sale (the per sale advertising fee paid by the studio) and shares back at least half of that commission with me to lower my effective price.  In this way, I directly benefit from interacting with the movie advertising and have extra money in my pocket to buy more popcorn (how the theatres make most of their money, I believe).  The studios get an efficient channel and could spend lots more to drive demand for movies that weren’t hitting their numbers, and less for blockbusters that were doing well.  And again, all of this advertising would be risk free because the studio would pay only for sales and they could directly set what they want to pay per customer.   

Once this system is up and running there are a number of powerful means to drive additional demand.  These include:

• Syndication: Click on a banner and watch a movie trailer or advertisement; buy your ticket for this coming weekend and get a cash discount
• Promote to Friends: Get your friends to book their tickets at VPAMovietix.com and earn revenue
• Push Recommendations: VPAMovietix.com knows what movies you like and could suggest new movies that you might be interested in (with your permission and with a cash discount if you buy a ticket)

These are just a handful of possibilities, but I think they represent the potential when you connect the end consumer directly to the advertising value chain using Value Per Action advertising.  This is one way that the movie industry and others that are seeing diminishing returns with traditional interruptive advertising can adapt to the reality of today’s marketplace and empowered consumer. 

There are a lot of job-seekers out there vying for my attention. Why then do they seem to put so little time into the process? We’re a vibrant Internet company caught up in the excitement of executing on some really big ideas. The last thing I want to do is read a bland resume that feels like it’s been sent out to dozens of non-descript companies. If you’re sending me a resume, you’re interrupting me, and I’ve had many years of practice at ignoring disruptive advertising. (Thanks flashblock! Thanks TiVo!) As a job seeker, the last thing you want to do is get dismissed in the first few seconds.

If you send me a resume, here are a few things you can do to compensate me for my time:

• Customize your cover letter — I’m passionate about what I do (and what Jellyfish is doing) and I’d love to know that you are too. If I can see that you put thought and energy into the cover letter, I’ll respond in kind.
• Check your grammar and spelling — C’mon, if you don’t care enough to do this, what do you care about?
• Put relevant resume items first — If your objective is generic, drop it. Why waste my time telling me you want a position that utilizes your prior experience? Is your education important to me? If not, why is it first? Personally, I’m interested in your skillz. Show me some projects that got you fired up. Maybe they’ll get me fired up too.

If job seekers took the interruptive nature of their requests to heart and spent time individually talking to me, reviewing resumes would be a lot more rewarding. I can dream…

The power of Woot.com.  For the uninitiated, Woot is a great online service that offers up a single deal each night at midnight.  The service was two years old yesterday and to celebrate they decided to sell- you guessed it -a Bag of “Random Crap.” 

I’m not sure exactly what was in each of these bags, but they offered up 4500 of them at $6 a pop ($1 plus $5 shipping) and they sold out last night in less than 2 minutes.  I think this speaks volumes for the power of a good deal and the ability to entertain people through commerce (ala QVC). 

I listened to a talk by John Bresee, the President and Co-founder of Backcountry.com, recently and he mentioned the Woot model and how they have emulated it at their deal site Steepandcheap.com to great success.  According to Bresee, the site was launched with a single e-mail to the Backcountry.com user base and has grown in a little over a year with zero marketing to a 14,000 Alexa rating (Woot’s Alexa rating is 780).  Not too shabby. 

I wonder if Woot has a data feed for their Bags O’ Crap so we can get them on Jellyfish             

Mike Shaw, the ABC President of Advertising Sales wants to develop technology to disable the fast forward button on DVR’s, forcing tv viewers to sit through commercials when viewing shows on their DVR’s like Tivo.  According to Mr. Shaw, people need to understand that “you can’t skip commercials.”   

Amazing.  Why are these guys using technology to try to force time-constrained consumers to watch untargeted ads?  Instead, let’s use technology to precisely target advertisements that actually have value to me as an individual.  Think, for example, about the potential of a partnership between Tivo and the networks that delivered targeted VPA (value per action) advertising to me based upon my viewing habits.     

The old model of cramming shotgun style ads down peoples’ throats is going to lose in the attention economy.  

It has been just over a week since the Beta launch of Jellyfish.com was announced in the Wall Street Journal and we’ve been extremely pleased with the great coverage and feedback we’ve received to date. You can review a summary of some of the Jellyfish media coverage here.

Many of the articles and blog posts highlighted the great potential of Value Per Action (VPA) Search Advertising to be a major disruptor to the Pay Per Click model. This was an important goal of our beta launch: get people talking about VPA and thinking about better ways to connect buyers and sellers online.

Our mission at Jellyfish is to bring consumers directly into the value created by the advertising auction for their buying attention, and many of the articles and posts recognized the huge potential this represents. I think Aneil Weber summed this up nicely with the following comments on Jellyfish:

This is the model that brings the buyers interest into the equation. Basically, by altering the commission to Jellyfish, retailers are essentially “bidding” for our business. Jellyfish makes it really easy to figure out which retailer is the cheapest based upon price and commission pay out. Instead of just bidding to get in front of our eyes, these retailers are bidding for our actual business via virtual negotiation.

This is the power we see in our VPA search advertising; the consumer directly benefits in lower pricing through a behind-the-scenes advertising auction that is risk free to retailers. With today’s report that advertisers are reducing spending because of PPC click fraud, this couldn’t be more timely in my opinion.

I also wanted to highlight and respond to some of the negative feedback and challenges to the Jellyfish model we’ve seen.

1. Cash back isn’t new, you guys aren’t anything revolutionary. I agree that cash back, deal sites, coupons, etc. have been around for some time. And we’ve never claimed at Jellyfish that the concept of cash back (ala eBates or FatWallet) is something we’ve invented. It isn’t. What we are trying to do is MUCH different and more radical than a simple cash back site that contains a directory of links to stores and static cash back percentages. The critical difference in the Jellyfish model is that we’ve incorporated cash back into a dynamic search marketplace, where stores compete for attention at a product level using cash back in much the same way they bid for attention at the Pay Per Click engines like Google, Yahoo! and Microsoft. Google started its PPC auction at .01/click and many of the keywords are orders of magnitude more expensive now. As that competition happens at Jellyfish, consumers will share at least 50% of the gains. This is much different than simple cash back affiliate marketing.
2. Your Search Functionality isn’t Great and You Have Limited Products.As I mentioned in my VPA post announcing Jellyfish, we wanted to be first to market with this concept and we made the decision (like many companies) to launch in beta with limited search functionality and products. I’ll continue to keep you updated on our progress, but we’ve already made substantial changes to our search features and are adding new products on a daily basis.
3. The Savings Aren’t That Substantial. See my answer to number 1. The bidding has just started. I’m very excited to see what retailers that are pulling back on their PPC advertising will do in our risk free channel.
4. Paying People is a Gimmick. People comparision shop online in large part to compare prices and find the best value. I personally don’t think that creating an advertising model that automatically lowers prices vis a vis other shopping search engines is a gimmick.
5. Retailers will Just Jack Up Their Prices and Commission Levels. I’ve seen this several times in blog comments, but this really isn’t possible. We sort results by net price which factors in both the store price and the total cost after our cash back. Thus, the old method of “let’s raise our prices and constantly kick out coupons” won’t work on Jellyfish. This is yet another difference from a simple cash back site.
6. Google, et al. will Copy You. Not necessarily a bad thing I agree with Om Malik that Google Checkout is simply Google’s first step to CPA, but I think changing how your company makes money is something that none of the major engines is going to do overnight and certainly not because of a start up like Jellyfish.
7. People are Lazy and You Won’t be able to Curb their Habits. This is our key challenge in my humble opinion. We are banking on the fact that when you have your credit card in your hand online, you are going to think of Jellyfish and wonder “why would I buy anywhere else?” But you’re right, Mr. Naysayer, without lots of people buying, Jellyfish will never reach the game changing status we hope to attain. I’ll certainly keep you updated on our progress.