I have been receiving a weekly newsletter from Sam Perera at Noverra Capital Partners which is – from what I can tell – a boutique investment bank with a small fund to make acquisitions with offices in Toronto and Vancouver.  They look to be a cross between a Capital West and Yellow Point Equity Partners and despite having attempted to develop a bit of a network in both cities so far in my career – I would not have heard of them had I not been receiving the newsletter.

Sam’s Friday Finance Weekly offers a bit of candid conversation around what’s going on in the world of finance.  He typically discusses the facts around a few stories that had been in the news that week, provides his own take on the issue, and then finishes with a touch of humour.  I find most of his posts interesting and witty, even though he seems to have a soft spot for weaving Lindsay Lohan or Kim Kardashian into the storyline a bit often.  Bottom line however is that I take the 4-5 minutes each week to read them and as a result, Noverra is a top-of-mind firm for me in this space.

What I don’t understand is why these newsletters are not featured on the Noverra website.  They have obviously been signed off on by a partner in the firm – so why not have them posted publicly?  Looks to me like some in the firm still view the website as a one-way communicator and not the appropriate place to be generating two-way conversation.  Most of what I have been reading and learning over the last 15 months when it comes to online marketing strategies tells me that the online billboard website is going (albeit slowly) the way of the dodo bird.

Interesting tidbit – Sam is a Sauder MBA grad.  My gut tells me he took Paul Cubbon’s internet marketing course before graduating…

Did you know that today is Cyber Monday?  Came across a few articles today that claim today is the day with the highest online purchases of the year.  What I found most interesting about this was that the concept of Cyber Monday was ‘created’ in 2005 by the National Retail Federation  after they noticed a big spike in online purchases on the Monday after Black Friday.  Sounds like somebody at the NRF was able to leverage a trend in and turn it into a real marketing platform….

What I didn’t agree with in some of the articles was the rationale for this phenomenon is that WAY BACK in 2004 people didn’t have the internet at home as commonly as they do today – so when they went into the office and had their internet connection back they flocked to online vendors.  That doesn’t sound right to me.  I’d wager that anyone comfortable buying anything online in 2004 probably had the internet at home.  I think its far more likely that this naturally occurring phenomenon began because everyone sits around the water cooler Monday morning bragging about the deals they got over the weekend.  Susie tells Jimbo about some sweet price she got on a flatscreen TV and Jimbo flies to bestbuy.com to see if he can get the same deal sans the ridiculous lineup.

Found a great slideshare contributor in David Teten who is the managing partner of VC firm ff Venture Partners and co-author of “The Virtual Handshake: Opening doors and closing deals online”.  Looks to be a great source of information and insight on the online trends with respect to VC/PE investing….

… but I digress.  David also maintains a blog where there is a great interview he did with PE firm MCM Capital about how private equity firms use social media to build grow their pipeline and source capital.  MCM has incorporated Facebook, LinkedIn, an RSS feed, and a weekly blog into its website to a number of ends.  They ask themselves 2 questions when creating content; how does it help the firm and how does it improve the likelihood that someone will find them. MCM has also targeted a top 100 rank for select search terms which may sound good, but as empirical evidence shows, not landing on the first page of results on a search is disastrous for your web traffic.  My sense is that a goal for any firm should either be top 10 or bust.

The interview presents real data around website traffic and page views – both of which increased however this is not really a good metric for ‘helping the firm’ – but the stat that really jumped out at me was that their deal flow had increased by 150% in 6 months since implementing these strategies.  Deal flow is the lifeblood of any good VC/PE firm and leveraging online strategies to widen the funnel for potential deals sounds like

There is a clear link here between building the investment opportunity pipeline and “widening the funnel” of potential customers as is commonly discussed in a marketing course.  The interesting difference in this case is that the funnel for a VC/PE firm actually refers to its products (target acquisitions) and not its customers (which in the traditional sense would be the LPs).  I wonder if there are other business models that would benefit from a widening funnel on the product side?

I am going to use this blog as a means to learn more about trends in the capital markets and their use of social media and online communities.  My gut reaction in thinking about this is that this world is based on personal relationships and connections and online marketing can’t really play a major role.  But my head tells me there is a fit in there somewhere and I hope to find some innovators who have been successful thus far.

I am particularly interested in VC and private equity firms that are actively engaged online and are leveraging their online presence to generate offline deal flow or even fundraising.  Its hard for me to imagine an LP making an investment in a fund based primarily based on the fund’s online presence.  However my hypothesis would be that capital providers who are top of mind for potential LPs have more success raising capital for their funds than others and therefore an effective online campaign would be focused on building/maintaining “brand” awareness.

Another question is that these firms typically want people talking about their portfolio investments – not necessarily the fund itself – so are there funds out there that use SM to drive traffic to their investee companies?

Time to do some research…

I decided to time travel for my book review and read Permission Marketing by Seth Godin which was written in 1999.  I thought it would be interesting to look at the world from the perspective of someone who was immersed in online marketing at a time when I personally did not have an email address (or maybe I did but I certainly didn’t use it).

Permission Marketing centres around direct marketing and the interaction that takes place online between marketers and consumers.  It analyzes how the internet has been used (and abused) by marketers.  The idea behind Permission Marketing is straightforward: paying attention to something is a conscious act that requires a conscious effort.  Therefore if a marketer can get a consumer’s “permission” to engage in the selling process, the consumer has already made a conscious choice to participate.

Godin juxtaposes Permission Marketing and Interruption Marketing as polar opposites.  He calls interruption marketing everything from TV and radio ads to email blasts and banner ads on websites.  The bottom line is that they are one-way communicators and that they don’t get consumers to pay real attention to the company/product.

By the tone of the book, and just from general knowledge, it is clear that when this book was written many companies considered email blasts the wave of the future; the new lower cost direct mail campaign!  Godin presents some pretty incredible statistics around what these campaigns actually did cost marketers and the figures are in the hundreds of millions.

An interesting point made by Godin is that marketers should focus on their share of the customer, not necessarily market share.  This is an interesting concept and something that I had never heard before.  It seems to borrow from a well known truth that it is easier to sell to existing customers than it is to acquire new ones.  Godin refers to this share-of-customer as building a ‘Permission Asset’ which is critical to building a relationship with customers.  Godin even remarks that businesses should expect to reward their customers for their attention, even if a sale is not made.  This is an interesting concept as it does not sound like an initiative that would generate positive returns in the traditional sense.  I have tried thinking of examples where this strategy has been employed and the only thing that crosses my mind are those pop-up customer satisfaction surveys that promise some kind of incentive for completing a 5 minute (it always takes 15) minute survey.

One of the sections discusses how marketers often attribute business or campaign success with website traffic and hits.  Without ever having been directly involved with tracking online traffic for a particular website or campaign, my sense is that many businesses continue to use this metric as a gauge of success.  It was one of the few areas of the book that I felt was still the same today as it appears to have been 12 years ago.  Intuitively, there is still value in traffic and hits and I imagine that this will always be the case.  The difference between the ‘99 marketer and today’s marketer is likely that the ‘99 marketer may have simply been happy (and received a bonus) based solely on increased traffic whereas today’s marketer would be more concerned with a conversion rate of those visitors.  If this is true, then Godin’s claim that “every commercial website … should be 100 percent focused on signing up strangers to give you permission to market to them.” (p.160) would have come true.

I found myself saying “of course that’s that way it should be done!” a number of times while reading Permission Marketing.  Strategies such as educating consumers about your product/service, making communication personal and relevant and creating a dialogue seem painfully obvious in developing online marketing campaigns.  The fact that these, and other, tactics appear (at least to me) as being cutting edge at the time was surprising to me.

I wonder what Permission Marketing 2.0 would look like?  User generated content seems to be the natural extension of engaging consumers in a conscious, two-way dialogue.  How long (or is it already happening?) will it be before marketers turn to their users to come up with their next campaign?