I’ve now run two promotions, each for two weeks. In the first, I gave away a $10 Amazon gift card (drawing 593 entries from 11/30 to 12/14/2011). In the second, I gave away a collection of 40 used books (bringing 343 entries, from 12/15 to 12/28/2011).

I didn’t really think much before launching the first giveaway, but was pleased to find that a substantial number of new followers appeared to be teachers (my target audience). However, I decided that my second giveaway would offer a prize that would be uniquely attractive to classroom teachers: a set of 40 used young-adult novels for a “classroom library” (I expected this prize to be less attractive to non-teachers).

Unfortunately, neither Facebook nor Hooplasoft (the provider of the “app” which powers the giveaways) provide any way to determine a new follower’s profession (or other information, except what’s publicly visible to non-friends on Facebook).  The relatively small number of participants and the expected seasonal “lull” during the winter holiday period combine to make any statistical analysis meaningless.

LessonIndex.com‘s Facebook page attracted a total of 812 new followers (rising from about 900 followers ON 11/20 to more than 1,700 followers on 12/29/2011). Estimating the total cost of the promotion at $100 (including the cost of prizes, shipping, and my time), I’ve added 800 new followers at a cost of about 12.5 cents each.

Don’t let that confuse you: they’re not  often not relevant. Here’s why.

This week, while viewing the Google Analytics Dashboard for my LessonIndex.com web site, I noticed that during August, the bounce rate had increased by a few percent, and average pageviews per visitor had declined slightly.  (“Bounce rate” refers to the percentage of visitors who view just one page at a web site.)

And those rates might seem dismal to many folks: 90% bounce rate, 1.3 pageviews per visitor. For an e-commerce retailer, or a community forum web site, these would be horrific figures — but for LessonIndex.com, they’re fine.

LessonIndex.com is a web directory site, and most visitors are referred by search engines, arriving directly to a specific “literature title” page. I’ve designed these pages to be self-contained, so that a teacher searching for a Huckleberry Finn lesson plan immediately sees all the related resources on a single page. She never needs to view any other pages at LessonIndex.com, but will click on links to the resources she needs, on other web sites.

Likewise, customers find many e-commerce retailers’ web sites through search engines, often while searching for a specific product, and the search engines often deliver the customer directly to the page describing the product the consumer wants.  Of course, to complete a purchase transaction takes several extra steps (add to cart, check out, fill in form, payment, confirm), but most visitors will still exit the merchant’s web site immediately, resulting in “bounce rates” of 60% to 80%, with average pageviews-per-visitor often under 2.

And an online community forum may also draw significant traffic from search engines, with visitors shown a specific discussion thread that answers their question (or isn’t relevant); again, the bounce rate might be over 50%.  However, visitors who stay and explore the community forum site often view many different pages, so even with a bounce rate over 50%, the average pageviews-per-visitor is often 3 to 5.

But the raw numbers can be highly misleading, because they combine all sources of traffic into a single metric.  As I mentioned, most visitors to LessonIndex.com (90%) are referred by search engines, and arrive on a specific literature-title web page that matches their search phrase.  What about the other 10%?

Some visitors (6%) are referred by other web sites which link only to the home page, and others (4%) type the URL directly into the browser window.  When I “drill down” to view data only for the home page, the bounce rate drops below 40%, meaning that “more often than not,” visitors click through from the home page to a specific literature-title page at the site.

So what happened that made my “bounce rate” increase, and my “average pageviews per visitor” decrease?  During August, search engine referrals increased faster than other sources of traffic (rising from 87% to 90% of total traffic).

That’s an important piece of information: I’d prefer to have a more diverse mix of traffic sources, to reduce the impact of changes in search-engine algorithms.

But when I adjust for this change, the “bounce rate” and “pageviews per visitor” haven’t really changed at all.

Finally, it’s critical to remember that nearly all of the data reported by Google Analytics are “intermediate metrics,” which can easily be manipulated in ways that don’t actually affect the site’s more meaningful measures — including “profit.”   (Lies, damned lies, and statistics.)

To date, I’ve only been able to identify one merchant who began collecting any state’s sales tax after enactment of this law: Amazon made a strategic decision to “collect the tax and sue” in New York, after its retroactive enactment of the law in 2009.  Amazon hasn’t repeated that strategy elsewhere.

In June, I posted my question on a popular affiliate-marketing discussion forum, asking if any publishers or retailers could identify any companies which began collecting sales tax in any state as a result of the “Advertising Nexus” issue. Nobody could name even one.

I also left a phone message and sent an email to Assembly Member Nancy Skinner, the law’s sponsor in California:

Ms. Skinner: I left a phone message, but thought I’d clarify my question. As you know, I’m upset about the “Advertising Nexus” tax law, which forced Amazon to stop paying me for advertising on my web site.

But I’m open to learning more about [how] California and other states benefit from this law. Specifically, could you name ANY online retailer which began collecting ANY state’s sales tax because of an “Advertising-Nexus tax law”?

I’ve only been able to identify one: Amazon made a strategic decision to “collect the tax and sue” in New York, though it hasn’t repeated that strategy anywhere else.

Surely North Carolina or Rhode Island should be able to identify some merchants who started collecting sales tax for those states after the Advertising-Nexus law was passed there. But they won’t say.

I’m not even going to be picky: I’ll include any merchant who changed their sales tax policy “near the time of” any PROPOSAL regarding an Advertising-Nexus bill, even 18 months before or at any time since, and even if the bill didn’t pass.

I’ve posted the question to several experts, who’ve all said the same thing: “That’s an interesting question.” Nobody has been able to identify a single merchant (other than Amazon in New York) who has begun collecting sales tax in ANY state, in a situation in which it could conceivably be argued that an “Advertising Nexus” proposal might have been a factor.

I would appreciate if you could identify any merchants you’re aware of, who have begun collecting sales tax for ANY state as a result of the “Advertising Nexus” issue being raised.

Ms. Skinner has not responded.

I’ve noted in other posts here that I believe that these laws are unwise, ineffective, and unconstitutional. They’ll eventually be stricken down by federal courts (but as legislators have noted, any taxes collected during that time would be kept by states). There are several much more effective, fair, and legally plausible strategies if states actually sought to force out-of-state retailers to collect sales tax. (Since those other strategies would actually be fair and effective, few legislators dare to propose them, and no lobbyists will support them.)

But given the precarious financial situation in California and other states, and my personal belief that out-of-state retailers should be required to collect sales tax for all states which impose them, I’d love to see some benefit from these laws. Seeing such benefits might reduce the sting from losing 26% of my advertising revenue on July 1.

But so far, the only effect of these laws has been the termination of advertising relationships with many thousands of web publishers (small businesses) in each state, shifting revenue away from states which enact “advertising nexus” laws, and thus reducing those states’ income-tax revenues while collecting no additional sales taxes.  Some of these small businesses have actually moved to other states, in order to retain their advertising relationships — thus shifting jobs, payroll taxes, and 100% of their income tax to other states.

Please prove me wrong: please identify any company which began collecting sales tax in any state as a result of any Advertising-Nexus Tax Law (“Amazon Tax”).

Today, when I tried to submit a comment to a Facebook post, a pop-up window informed me that I have been temporarily “blocked” from posting comments, due to “abuse.”

The nature of the “abuse” wasn’t specified, so I had to think back: what have I done lately, and specifically what have I done differently recently?

My conclusion: over the past few days (especially during the three-day July 4th weekend), I’ve been more active in posting comments expressing an “opposing view” regarding a “political” topic (education reform and high-stakes testing).  I’ve tried to be polite and factual, but I’ve been challenging misrepresentations used by proponents of “education reform.”

Today’s example (which triggered the “block” message) is how education reformers are misrepresenting the National Education Association’s (NEA) policy, adopted this weekend, acknowledging that “student learning” should be included as part of teacher evaluations.  The NEA was extremely clear that “student learning” is not properly measured by any current standardized tests, and that such results from these flawed tests should not be used in evaluating teachers. Some education-reform advocates are misrepresenting the NEA policy as supporting the use of standardized tests in teacher evaluations.

What I suspect is that when I commented on posts by these education-reform advocates, they or their other “followers” responded by flagging my comment as “abusive.” What I don’t really know is whether these people actually viewed my comments “abusive,” or whether they simply disagreed and wanted to express their displeasure.

Remember that although Facebook lets us “Like” a post or comment, it doesn’t provide a “dislike” or “disagree” or “thumbs down” feature. (I’ve blogged recently about how Facebook may be transforming the meaning of the words “friend” and “like.”)

If someone disagrees with a comment, they have two options: post a response (which requires thought and effort, and which might lead to further exchanges of information or ideas) or simply “flag” the post as abusive.  Nobody reviews these reports for accuracy or motive, but instead Facebook has algorithms which automatically block activity after a certain number of reports; the same is true for nearly all large online communities.

This is a clear message that my personal interest in certain “political” topics, and my desire to correct errors and engage in discussion, are triggering reactions which are interfering with my professional use of Facebook.

The immediate effect of this experience is that I’m going to stop posting comments that reflect disagreement or opposing views, or which challenge factual misrepresentations in Facebook posts or other peoples’ comments. I’ll disengage from discussions beyond the enclave of people who mostly agree with me.  I’ll “unfriend” a few people, and I’ll “unlike” a bunch of Facebook pages.  I’ll say less, and I’ll hear less, and we’ll all exchange fewer ideas.

I was interviewed (in my home office) and featured in a news segment on KTVU-2 news last night; you can view the segment here (but you’ll need to wait through a 15-second commercial before seeing the 2-minute, 15 second segment).

I was also interviewed today (June 30) by KPIX-5 for broadcast on tonight’s news.

I’ll start by sharing today’s example (quoting directly from the merchant’s description of its affiliate program):

“…. Payments are made once the affiliate [publisher] has earned more than $100. If an affiliate fails to earn more than $100, they are never paid. Subsequently, payments of the balance are made roughly every 45 days as long as the balance is over $100. Payments are made only via PayPal. …”

This merchant sells a “web service” priced from $24 to $199 per month, and promises to share 50% of the first month’s payment plus 5% for each additional month, for the life of the account.  For the $24 monthly package, the publisher (affiliate) would earn $12 the first month plus $1.20 for each additional month.

To meet the $100 payment threshold quickly, the merchant’s advertising on the publisher’s web site would need to drive at least eight new customers.  (Even assuming a 100% renewal rate, the $100 payment threshold would be met after five months from six new customers, or after 12 months from four new customers, or after 19 months from three new customers.)

Why this is a Bad Idea:

First, most experienced web publishers (affiliates) have experienced payment defaults from one or more merchants (they’ve been “burned”).  Most publishers have also seen merchants shut down before the payment threshold could be met.  These publishers are reluctant to carry any new performance-based advertising, especially for merchants with “in-house” affiliate programs.

An absurdly high payment threshold is a big “warning sign” for these skeptical publishers.  Some publishers will even view this as a sign of hostility or distrust by the merchant, or as a sign that the merchant doesn’t consider the affiliate program to be important.  It can also be perceived as a signal that the merchant isn’t confident about its own ability to convert or retain new customers.

Most “in-house” affiliate programs set a payment threshold of $50 or less (often $25).  Even those amounts can be perceived as unreasonable, if a publisher isn’t sure how successfully the merchant can convert traffic drawn from performance-based advertising. That’s a huge reason why most publishers prefer to work with “affiliate networks,” which usually combine advertising fees from multiple advertisers to meet their payment threshold.

Today, I read a Facebook post which both criticized and linked to a news article.  Then, after someone “Liked” that post, the person who’d posted it wrote: “A little confused–do you ‘like’ the [article] or my comment???”

Facebook has quickly transformed the meaning of two words: “Like” and “Friend.”  There is only one way to “connect” to someone on Facebook.  To connect with a person, you must “Friend” them; to connect with a Facebook “page,” you must “Like” it. You’ll only see posts in your Facebook “newsfeed” for folks you’ve “Liked” or “Friended.”

But of course, not all of my 400 Facebook “Friends” are really my friends, in any traditional sense. A few are family or friends; many are acquaintances; and many are people I’ve never met or interacted with outside of Facebook, but who share my interests.  (Sometimes I even “friend” a frenemy, to keep an eye on what they’re saying and doing on Facebook.)

Nor do I like all of the Facebook “pages” which I’ve flagged with the “Like” button. Instead, I mostly would just “like” to see what’s being posted on those pages.

Recently, Facebook has begun shifting the terminology for some activities from “Like” to “Share,” which is more accurate.

Complicating matters further, Facebook offers only two ways to signal your reaction to a particular post in your newsfeed: you can “Like” the post (and/or one or more of the comments to the post), or you can post a comment yourself.

But when I click the “Like” button for a post or comment, it doesn’t mean that I actually like (or agree with) what’s being said in a post or comment (or in a linked article).  Instead, I just appreciate that specific factual information (or an opinion) has been shared, even if I don’t agree with the message. Often, I “like” posts and links that reflect ideas that I find offensive and upsetting, because I believe it’s very important to listen to a wide range of views, and to know what others believe.

Some online communities offer different ways to signal a reaction to a post: some provide a “thank you” button, while others allow readers to click on either a thumbs-up or thumbs-down icon.

Using terms like “friend” and “like” creates confusion for many Facebook users, and leads to misunderstandings about what we mean when we use Facebook.  It’s quite possible that we’ll just accept these new, more ambiguous meanings for these words, which means that Facebook has helped transform the English language; it’s also possible that we (and/or Facebook, or its competitors or successors) will simply adopt or invent different words to use.

Related articles on other blogs:

1. “Language Matters: Name Your Feature Carefully” (Actiance blog)
2. “Entrenchment: ‘Befriend’ vs. ‘friend’” (Meaningful Games blog)

On January 1, 2011, I “launched” LessonIndex.com — which I believe is already the most useful and relevant directory of Literature Lesson Plans for K-12 teachers.

After gathering data from many sources and launching this version of the site as a “proof of concept,” I’m turning back to refine the ontology, database structure, and import scripts so I can expand the site to include resources for all K-12 content areas.

Some relevant links for my new site:

• Short Index page (with links to directory pages for about 200 literary works);
• Big Index page (with links to directory pages for each of 2,034 literary works);
• blog.LessonIndex.com, which provides update information, suggestions for publishers and merchants, and a list of the “Most Frequently-Taught Works” (works with the most resource links).

Unfortunately, I’ve “stalled” with this project, mostly because of the incredible “loss of incentive” caused by the probable enactment of an “Advertising Nexus tax law” in California. If enacted, the law will force Amazon and other out-of-state retailers to terminate their advertising in California, wiping out much of my advertising revenue overnight.

I’m still doing some organizing and planning work, and I’m making some major updates to the database that “drives” the site, but I’m only allocating a small part of my time and effort to the project.

Despite my ambivalence about the financial outlook for LessonIndex.com, traffic and revenue have continued to grow nicely:

Lost Advertising (and Tax) Revenue: Within hours after the governor signed the bill into law, Amazon and Overstock terminated their advertising relationships with all Illinois web publishers.  Hundreds of other merchants are also expected to do the same (as they have in New York, North Carolina, Rhode Island, and Colorado).  This will shift hundreds of millions of dollars in advertising revenue from Illinois publishers to publishers in other states and offshore, thus shifting tens of millions of dollars of income-tax revenue from Illinois to other states and nations).

Unlike other states, Illinois didn’t assert immediate or retroactive effect, so Amazon and Overstock were able to give publishers a one-month “grace period” before these advertising relationships end.  (As a pessimist, I suspect that dozens of less-ethical merchants will deliberately delay their similar announcements until a few days before the law’s effective date).

Fleeing Businesses: As in other states, larger web publishers are planning their exodus from Illinois in order to avoid the law’s devastating impact.  Today, FatWallet announced that it will move out of Illinois, taking 55 jobs, and Coupon Cabin announced today that it’s exploring moving its offices to Indiana.

Carrion: Wal-Mart, Sears, and Barnes & Noble immediately invited Illinois web publishers to carry their advertising instead of Amazon’s.  But these companies offer lower advertising fees (and draw much lower conversion rates) than Amazon — and their web sites push customers into local stores (for which publishers aren’t paid any advertising fees).

In addition to their skimpy advertising rates, all three of these companies combined offer fewer than half as many products as Amazon, and provide much more limited product information. In my main niche, these three merchants combined offer fewer than 20% of the products which Amazon now advertises on my site.

Why Do I Care? I live and work in California, so the Illinois law doesn’t directly affect me (in fact, it might bring me a tiny slice of the advertising revenue lost by Illinois publishers). However, if California enacts its pending “Advertising-Nexus” bill, I’ll immediately lose the 26% of my total advertising revenue that comes from Amazon.

________

Update (August 2, 2011):

Both Coupon Cabin and FatWallet moved their offices and jobs out of Illinois, in order to maintain their advertising relationships with retailers without nexus in Illinois. The State of Illinois forced these companies to choose between staying in Illinois (with reduced revenue and layoffs, forced by the state) or taking all the jobs a few miles to a nearby state (and continuing to grow).

In both cases, the new offices aren’t very far from the old offices: FatWallet’s offices (and 55 jobs) moved about 5 miles from Rockton, IL to Beloit, WI, while Coupon Cabin moved about 15 miles from Chicago IL, to Whiting, IN).

While Illinois has certainly lost payroll taxes and corporate income taxes, employees didn’t have to move their homes: most employees can continue to live in Illinois while working in the other state, if they’re willing to accept both the increased commute cost (probably losing any public-transit options) and the income-tax hassles affecting folks who live in one state while working in another. Of course, employees living in Illinois won’t be allowed to “telecommute” (work from a home on some days), which will likely increase their commute costs further.

Over time, some current employees will move (to reduce commute expenses and tax hassles). When other employees quit, and as new positions are created, those jobs will go to local workers who live near the companies’ new offices in Wisconsin and Indiana.

A related note: As expected, California enacted its own “Advertising Nexus” tax law, and just as they did in Illinois and other states, Amazon and other out-of-state retailers terminated their advertising relationships with California web publishers. I’ve lost more than 26% of my advertising revenue, though I’m working hard to try to recover a small part of that lost revenue from other advertisers (all paying lower rates, and some less ethical).