Friday, August 21, 2009

Why I believe in social networks like facebook and twitter

A real business success story – including Twitter, Facebook and half a million Euros

Are you curious, maybe even still skeptical about Facebook and Twitter? Are you of those who have been wondering about what the real advantages of social networks are? Have you been asking yourself what the hell all that buzz is about anyway? Yes? Good! Because here is my answer, including a real business success story, half a million Euros and the importance of being always on!

First of all, here’s a little background information, because this is where our story begins: At the beginning of June, the holding group Arcandor filed for insolvency. At that point, nobody knew for sure what would happen to its subsidiaries Thomas Cook, Primondo and Karstadt-Quelle. We were especially worried about the future of Karstadt-Quelle, a major retailer and one of our biggest advertisers. So we had to make a decision: Either shut down the Quelle affiliate programme, like most of the other networks did – or continue it, and take the risk.

We truly believe in the internet as the most successful and efficient sales and marketing channel – and it was this belief, which made us continuing the Quelle programme. Also, we didn’t want to let down one of our best partners during this tough time. However, we knew that we would have to get in touch with the insolvency administrator immediately. We needed to learn what their next steps were to be, get clarification on the potential risks, and also their confirmation of payments. So we assumed risk, continued the programme and informed our publishers about our intentions and what it would mean for them. At the same time, we tried to get in touch with the Arcandor insolvency administrator via our lawyers and account managers – without any success.

On June 11, I took a look at the Linkmafia blog, a personal German affiliate marketing blog, written by our employee Denis Maibaum, and read the following statement: “I think it’s cool that we don’t shut the Quelle programme, but keep it open for our publishers […] Supporting a client in tough times cannot be wrong. And Quelle is still a major retailer brand, which just won’t disappear from one day to another.”

This blog post motivated me to go public with the whole story – so I personally got in touch with the Quelle insolvency administrator via Twitter. That’s what I wrote:

June 11 at 6:30pm • via Twitter
Thomas Hessler: @arcandor-insolvenzverwalter: We believe in online!

My tweet caught the attention of Paulus Neef, founder of Pixelpark, so he contacted me on Facebook:

June 11 at 10:22pm
Paulus Neef: Hi Thomas – what’s your idea? Maybe I can help. I know him…

June 12 at 12:15pm •
Thomas Hessler: thanks paulus. we’re running about 40 affiliate programmes for arcandor subsidiaries, quelle and karstadt are among them. we were supposed to shut them down because of the announced insolvency, but we really believe that online channels are the most important assets of arcandor right now, so they should definitely survive. it would be pure madness to shut down arcandor’s most efficient sales channel. I think mr piepenburg [the insolvency administrator] would be really grateful for that bit of information. we need a clear statement of him, otherwise we can’t longer take the risk here.

Only a few days later, one of the Arcandor board members got in touch with me and asked for a conference call with the zanox board. At the end of June, the call took place; we discussed the current situation and our cooperation. Only two weeks later, we received the official payment confirmation of 500,000 Euros.

Quelle is still one of our best-performing advertisers and we were even able to enhance the success of our cooperation during the last couple of weeks. The story isn't even over yet, we'll cross our fingers for all of them.

Well, if this isn’t a real business success story on Web 2.0!
See you soon on facebook ;-)

P.S. meanwhile the story of Quelle is over and the company went insolvent


Or if you like numbers more, watch this video:

1 comment:

Martino Matijevic said...

Thomas, that is a great story and I deffinitely agree with you that online is one of the most and cost-effective sales channels for merchants in financial difficulty.

However, as you rightly pointed out, this is risky for yourself and for affiliates and while you as a multimillion network can afford such a risk, many affiliates can find they have lost a large part of their earnings if the merchants closes and does not pay.

In the case of WhichBudget, where we promote airlines, the risk is even greater, as it involves passengers. We understand an ailing airline needs all the support they can get, but if we promote them and they fail, we have contributed to some of those hundreds of stranded passengers.

Take Sky Europe as an example (not with Zanox!): first they stopped paying commission (and did not honour previous sales owing us 10s of thousands of euros), then they went bust. If we promote them, people assume we endorse them, hence they loose trust in us once the airline leaves them stranded.

Martino Matijevic
CEO, WhichBudget