Beruflich Dokumente
Kultur Dokumente
2012, 2ND EDITION, R513A - A COMPREHENSIVE GUIDE TO RECOGNIZING AND AVOIDING SCAMS WHILE ONLINE: SPAM, SECURITY AND DOING BUSINESS ONLINE
PREFACE .................................................................................................................................................. 9 INTERNET USERS HANDBOOK, 2012, 2ND EDITION, R513A .................................................................. 9 A COMPREHENSIVE GUIDE TO RECOGNIZING AND AVOIDING SCAMS WHILE ONLINE: SPAM, SECURITY AND DOING BUSINESS ONLINE ........................................................................................... 9 BACKGROUND ..................................................................................................................................... 9 INTERNET WORLD STATS..................................................................................................................... 9 EDUCATE YOURSELF .......................................................................................................................... 10 LET US TAKE, FOR EXAMPLE: ............................................................................................................. 10 SPAM AND SPAM LINKS..................................................................................................................... 11 INTERNET USERS HANDBOOK, 2ND EDITION, R513 ............................................................................ 12 INTERNET USERS HANDBOOK, 2013, 3RD EDITION, 3 VOLUMES........................................................ 12 1. OUR HANDBOOK AND ISA GROUPS .................................................................................................. 13 THE HANDBOOK HAS A TWO-FOLD OBJECTIVE: ................................................................................ 14 THIS HANDBOOK IS FOR THOSE THAT WILL HELP THEMSELVES! ...................................................... 14 INTERNET SCAMS ANONYMOUS GROUPS ......................................................................................... 15 2. DEFINING SCAMS AND FRAUD ......................................................................................................... 17 2.1 IS IT TOO GOOD TO BE TRUE? ..................................................................................................... 17 2.2 DOES THE OFFER PASS YOUR DUE DILIGENCE TEST? .................................................................. 18 2.3 WHAT IS THE OWNERS TRACK RECORD?................................................................................. 18 2.4 NON-DELIVERY ............................................................................................................................ 18 2.5 LACK OF SUPPORT ....................................................................................................................... 18 2.6 LACK OF ACCESSIBILITY................................................................................................................ 19 2.7 SCAMMERS ARE SPAMMERS TOO ............................................................................................... 19 2.8 ARE TRAINING, TOOLS AND RESOURCES PROVIDED? ................................................................. 19 3. DO YOUR OWN DUE DILIGENCE ....................................................................................................... 20 3.1 WHAT IS DUE DILIGENCE? ........................................................................................................... 20 3.2 12 SIMPLE DUE DILIGENCE MLM INVESTIGATIONS ..................................................................... 22 3.3 HOW TO CONDUCT ONLINE DUE DILIGENCE - BRUNO ............................................................... 24 3.4 DUE DILIGENCE TOOLS ................................................................................................................ 27 4. INTERNET CRIME IS BIG BUSINESS.................................................................................................... 29 4.1 2008 INTERNET CRIME REPORT................................................................................................... 29
CONTENTS
4.2 INTERNET FRAUD, SCAM AND CRIME STATISTICS - 2009 ............................................................ 29 4.3 FBI INTERNET CRIME REPORT 25/02/2011 .................................................................................. 32 4.4 TOP INTERNET SCAMS OF 2010................................................................................................... 33 4.5 SOME BASIC DEFINITIONS ........................................................................................................... 37 4.6 SEARCH ENGINE PAGE COUNTS 11/09 ........................................................................................ 38 4.7 INTERNET WORLD STATS ............................................................................................................. 38 4.8 SO WHAT IS THE KEY TO SCAM AVOIDANCE? ............................................................................. 39 4.9 BUYING IS NOT A RATIONAL DECISION........................................................................................ 39 5. INTRODUCTION TO INTERNET SCAMS AND FRAUDS ......................................................................... 40 5.1 WHAT IS A SCAM/FRAUD?........................................................................................................... 40 5.2 WHAT IS THE PROFILE OF SCAMMER? ........................................................................................ 40 5.3 THE PSYCHOLOGY OF CONMEN AN INTERVIEW ....................................................................... 40 5.4 SCAMMERS PLAY ON YOUR EMOTIONS ...................................................................................... 44 5.5 OUR VULNERABILITY TO CONFIDENCE TRICKS ............................................................................ 45 5.6 THE PSYCHOLOGY OF BEING SCAMMED (VICTIM) ...................................................................... 45 6. COMMON INTERNET SCAMS ............................................................................................................ 47 6.1 ADVANCE-FEE FRAUD .................................................................................................................. 47 6.2 ADVERTISING SCAMS................................................................................................................... 47 6.3 AUCTION AND RETAIL SCHEMES ................................................................................................. 48 6.4 AUTOMOTIVE FRAUD .................................................................................................................. 49 6.5 CLICK FRAUD................................................................................................................................ 49 6.6 CLOUD COMPUTING SCAMS ....................................................................................................... 53 6.7 COUNTERFEIT POSTAL MONEY ORDERS ...................................................................................... 54 6.8 COUNTERFEIT CASHIERS CHECK SCAM.................................................................................... 54 6.9 CASH THE CHECK SYSTEM ........................................................................................................... 55 6.10 CALL TAG SCAM ......................................................................................................................... 55 6.11 CHRISTMAS/HOLLIDAY SCAMS .................................................................................................. 56 6.12 DATING SCAMS/ROMANCE SCAMS ........................................................................................... 57 6.13 DIRECT MAIL AND TELEMARKETING SCAMS ............................................................................. 58 6.14 DOMAIN NAME RENEWAL SCAMS ............................................................................................ 62 6.15 EMAIL SCAMS ............................................................................................................................ 62 6.16 FOREX SCAMS ............................................................................................................................ 65
6.17 GUARANTEED SIGN UPS ............................................................................................................ 66 6.18 IDENTITY THEFT ......................................................................................................................... 67 6.19 INTERNATIONAL MODEM DIALING ........................................................................................... 68 6.20 INTERNET FRAUD/SCAMS .......................................................................................................... 69 6.21 INVESTMENT SCHEMES/ STOCK MARKET MANIPULATION ....................................................... 69 6.22 MARKETING AND RETAIL FRAUD ............................................................................................... 70 6.23 MATRIX SCHEME SCAMS ........................................................................................................... 70 6.24 MICROSOFT BETA TEST HOAX ................................................................................................... 72 6.25 MONEY TRANSFERS FRAUD ....................................................................................................... 73 6.26 NIGERIAN HOAX SPAWNS COPYCATS ........................................................................................ 74 6.27 PAYPAL FRAUD .......................................................................................................................... 75 6.28 PHARMING ................................................................................................................................ 75 6.29 PHISHING ................................................................................................................................... 75 6.30 PTR/PTC SCAMS......................................................................................................................... 81 6.31 PURCHASE SCAMS ..................................................................................................................... 82 6.32 REMOTE ACCESS COMPUTER SCAMS ........................................................................................ 83 6.33 RE-SHIPPERS .............................................................................................................................. 83 6.34 SEO INTERNET MARKETING FRAUD ........................................................................................... 84 6.35 SMISHING .................................................................................................................................. 86 6.36 SPOOFING.................................................................................................................................. 86 6.37 SOCIAL NETWORKING DANGER ................................................................................................. 86 6.38 SKYPE SCAMS............................................................................................................................. 89 6.39 TICKET FRAUD............................................................................................................................ 89 6.40 TWITTER SCAM .......................................................................................................................... 89 6.41 TVI EXPRESS WORLDWIDE SCAM ALERT ................................................................................... 91 6.42 WORK-AT-HOME SCHEMES/BUSINESS OPPORTUNITIES ........................................................... 91 7. THE $1,000,000 PER DAY PTC/PTR SCAM ......................................................................................... 93 7.1 RETIRED AND BORED ................................................................................................................... 93 7.2 MY BIGGEST PTC/PTR ACCOUNT PCASH................................................................................... 94 7.3 MY USD 1M OR MORE PER DAY STRATEGY ................................................................................. 98 7.4 PUT ON OUR BUSINESS HAT ........................................................................................................ 98 8. PREPARING TO DO BUSINESS ONLINE? ............................................................................................ 99 8.1 PLANNING TO DO BUSINESS ONLINE?......................................................................................... 99
8.2 GENERAL ASSUMPTIONS ........................................................................................................... 100 8.3 WHAT IS AN ENTREPRENEUR?................................................................................................... 101 8.4 INVESTIGATE WHY ARE YOU HERE?........................................................................................ 103 8.5 HOW MUCH DO YOU KNOW ABOUT LEADERSHIP? .................................................................. 104 8.6 DO YOU HAVE A PASSION FOR BUSINESS? ................................................................................ 104 8.7 BELIEVE IN YOURSELF AND BOOST YOUR SELF-CONFIDENCE ................................................... 104 8.8 COMMITMENT .......................................................................................................................... 105 8.9 HOW ABOUT ATTITUDE? ........................................................................................................... 105 8.10 DO YOU HAVE A FEAR OF FAILURE? ........................................................................................ 105 8.11 ARE YOU A PROCRASTINATOR? ............................................................................................... 106 8.12 ARE YOU READY TO ACCEPT THE RISK? ................................................................................... 106 8.13 HOW MUCH DO YOU KNOW ABOUT THE FOLLOWING TOPICS? ............................................ 106 8.14 STEPS TO A GREAT BUSINESS PLAN ......................................................................................... 107 9. FOLLOW YOUR PASSION ONLINE BUSINESSES............................................................................. 110 9.1 COMMON QUESTIONS WHERE DO I START? WHAT IS BEST?................................................. 110 9.2 WHAT ARE YOUR INTERESTS? ................................................................................................... 111 9.3 THE IMPORTANCE OF PASSION ................................................................................................. 111 9.4 WHAT ARE THE BEST TYPES OF INTERNET BUSINESSES? .......................................................... 112 9.5 FIVE PERFECT 'SPARE-TIME' ONLINE BUSINESSES ..................................................................... 112 9.6 WHICH IS BETTER, A PRODUCT OR A SERVICE SITE? ................................................................. 115 9.7 10 REAL WAYS TO MAKE MONEY WITH YOUR WEBSITE ........................................................... 118 9.8 INTERNET BUSINESSES THAT ARE PRONE TO FAILURE .............................................................. 120 10. AFFILIATE, PYRAMID AND MLM PROGRAMS ................................................................................ 122 10.1 WHAT IS AN AFFILIATE PROGRAM? ......................................................................................... 122 10.2 TYPES OF AFFILIATE WEBSITES ................................................................................................ 125 10.3 DEFINING A GOOD AFFILIATE PROGRAM ................................................................................ 128 10.4 ISSUES WITH AFFILIATE MARKETING ....................................................................................... 129 10.5 PYRAMID SCHEMES ................................................................................................................. 133 10.6 MULTI-LEVEL MARKETING PROGRAMS ....................................................................................... 139 10.7 Matrix Schemes ........................................................................................................................... 143 10.8 TIPS FOR CONSUMERS AND BUSINESSES .................................................................................... 144 BEWARE OF ANY PLAN: ................................................................................................................... 144
10.9 FOR THE I DONT DO MLM READERS............................................................................................ 146 10.10 EBAY POLICY MLM, PYRAMID, AND MATRIX PROGRAMS.......................................................... 146 11. MANAGING YOUR ONLINE BUSINESS ........................................................................................... 147 11.1 GET COMFORTABLE................................................................................................................. 147 11.2 WORKING AT HOME ................................................................................................................ 147 11.3 SELF-DISCIPLINE....................................................................................................................... 148 11.4 MANAGING YOUR COMPUTER AND SOFTWARE ..................................................................... 148 11.5 MANAGING YOUR TIME AND COMMUNICATIONS.................................................................. 152 12. WHAT IS SPAM AND ITS IMPACT? ............................................................................................. 158 12.1 WHY SPAM? ............................................................................................................................ 158 12.2 HOW TO AVOID THE SPAM FILTERS ........................................................................................ 159 12.3 ALL I WANT TO DO IS SEND AN EMAIL AND MAKE SOME MONEY .......................................... 161 12.4 FIGHTING SPAM ...................................................................................................................... 162 12.5 WHAT HAPPENED TO SOCIAL ETIQUETTE?.................................................................................. 163 12.6 FIRST LEGAL CASE FELONY - SPAM .......................................................................................... 166 13. ADVERTISE YOUR BUSINESS.......................................................................................................... 167 13.1 ONLINE ADVERTISING.............................................................................................................. 167 13.2 ADVERTISING AIDA ............................................................................................................... 168 13.3 HOW TO CREATE NO-SPAM HEADLINES.................................................................................. 169 13.4 HOW TO ADVERTISE WITHOUT SPAM ..................................................................................... 170 13.6 TESTING AND TRACKING YOUR STRATEGIES ........................................................................... 173 13.7 SEARCH ENGINE OPTIMIZATION (SEO) .................................................................................... 174 13.8 BUILDING YOUR KEYWORD LISTS ............................................................................................ 175 13.9 WHY SEARCH ONLINE ADVERTISING IS VALUABLE .................................................................. 177 13.10 COSTLY SEARCH ENGINE OPTIMIZATION MISTAKES.............................................................. 178 13.11 HOW WEB ADVERTISING WORKS .......................................................................................... 179 13.12 IS THE ONLINE ADVERTISING INDUSTRY SHRINKING? ........................................................... 181 13.13 LIST BUILDING ....................................................................................................................... 183 13.14 BLOGS AND ARTICLES ............................................................................................................ 187 13.15 INCREASING BLOG TRAFFIC ................................................................................................... 189 13.16 EMAIL MARKETING ................................................................................................................ 191 13.17 FREE FOR ALL (FFA) & CLASSIFIEDS ....................................................................................... 194
13.18 PAY-PER-CLICK ADS................................................................................................................ 195 13.19 SAFELISTS .............................................................................................................................. 197 13.20 TRAFFIC EXCHANGES (TE) ...................................................................................................... 201 13.21 HOW TO INCREASE YOUR SALES UP TO 500%... .................................................................... 204 13.22 HOW TO KEEP YOUR #1 RANKING ......................................................................................... 205 14. FOREX (FX) FOLLIES - A GAMBLERS HEAVEN ................................................................................. 206 14.1 WHAT IS FOREX (FX)? .............................................................................................................. 206 14.2 BENEFITS OF FOREX TRADING ................................................................................................. 207 14.3 FOREX BROKERS ...................................................................................................................... 208 14.4 THINGS TO AVOID ................................................................................................................... 209 14.5 WARNING SIGNS OF A FRAUDULENT BROKER......................................................................... 209 14.6 THE FOREX CURRENCY PAIRS .................................................................................................. 210 14.7 THE TRADING PLATFORM ........................................................................................................ 212 14.8 FOREX CHARTS AND INDICATORS............................................................................................ 212 14.9 FOREX EXPERT ADVISORS AND ROBOTS .................................................................................. 213 14.10 THE FOREX MINDSET ............................................................................................................. 214 14.11 TYPICAL FOREX HEADLINES ................................................................................................... 216 14.12 FORGET THE FOREX HYPE ...................................................................................................... 221 14.13 IS FOREX A GAMBLERS HEAVEN? .......................................................................................... 221 14.14 MY FOREX EXPERIENCE ......................................................................................................... 222 15. PLAN AND PREPARE ...................................................................................................................... 225 APPENDIXES......................................................................................................................................... 227 A. EMOTIONAL TRIGGERS OR POWER SELLING WORDS..................................................................... 227 B. COMMON SCAM AND SPAM WORDS............................................................................................. 229 C. SCAMS AND CONFIDENCE TRICKS ................................................................................................... 233 TERMINOLOGY ................................................................................................................................ 233 NOTABLE SCAMS AND CONFIDENCE TRICKS ................................................................................... 233 PYRAMID AND PONZI SCHEMES ...................................................................................................... 234 CONFIDENCE TRICKS IN MEDIA ....................................................................................................... 234 SEE ALSO.......................................................................................................................................... 234 D. SCAM AND SPAM COMPLAINTS ..................................................................................................... 235 REPORTING INTERNET FRAUD ......................................................................................................... 235 OTHER SCAM/SPAM RESOURCES, REFERENCES OF INTEREST ........................................................ 236
E. BANNED, SCAM AND WATCH SITES ................................................................................................ 237 GLOSSARY OF COMMON INTERNET TERMS ........................................................................................ 238 GLOSSARY OF COMMON FOREX/INVESTMENT TERMS ....................................................................... 281 ABOUT THE AUTHOR .......................................................................................................................... 304
PREFACE INTERNET USERS HANDBOOK, 2012, 2ND EDITION, R513A A COMPREHENSIVE GUIDE TO RECOGNIZING AND AVOIDING SCAMS WHILE ONLINE: SPAM, SECURITY AND DOING BUSINESS ONLINE
Registered owners of this handbook are entitled to receive our 3rd Edition Free. Currently planned at 3 Volumes
Internet Crime Security Threats Internet Crime Scams and Fraud Related to Risk Management and Doing Business Online
BACKGROUND
2009. UCLA professor Leonard Kleinrock said: Its the 40th year since the infant Internet first spoke. The fridge-sized computer that sent the first email 40 years ago (1969) But crashed after just two letters were received. Kleinrock, who led the team that first got two computers to communicate online via a network called ARPANET, added: The Internet is a democratizing element; everyone has an equivalent voice. There is no way back at this point. We cant turn it off. The Internet Age is here The computer expert could never have imagined that the fledgling Internet one day would give rise to Facebook, Twitter and YouTube. He referred to spam emails, online scams and malicious software spread by crooks as an unexpected dark side of the Internet. The net is penetrating every aspect of our lives, Kleinrock told a audience of about 200 people in Los Angeles. The World Wide Web, www, or the Internet as we know it today was released 1991. Zakon Timeline Professor Kleinrock went on to say As a teenager, the Internet is behaving badly, the dark side has emerged. The question is when it grows into a young adult, will it get over this period of misbehaving? Daily News Los Angeles The handbook, first published 2009; started to address the dark side of the Internet as it impacts every online user; the student young or old whether online for socializing, gaming, research, shopping, studies, or all of the above. Every business online from an individual start-up to the world largest corporations face the risk of online security threats, spam, scams or fraud. Even Government bodies and organizations cannot avoid the increasing dark side of the Internet. Countries are able to hack into almost every system or network if not all, for internal spying. The dark side has always been around, but as the Internet user base grows, so does Internet Crime in the form of Security Threat and Scams and Fraud primarily through the social networks. Are your employees online during working hours for personal affairs?
World Internet Usage and Population Statistics; June 30, 2012 Population (2012 Est.) 1,073,380,925 3,922,066,987 820,918,446 223,608,203 348,280,154 593,688,638 35,903,569 7,017,846,922 Internet Users Dec. 31, 2000 4,514,400 114,304,000 105,096,093 3,284,800 108,096,800 18,068,919 7,620,480 360,985,492 Growth Internet Users 2000-2012 Latest Data (%) 167,335,676 1,076,681,059 518,512,109 90,000,455 273,785,413 254,915,745 24,287,919 2,405,518,376 3,607 842 393 2,640 153 1,311 219 566
World Regions Africa Asia Europe Middle East North America Latin America / Caribbean Oceania / Australia WORLD TOTAL
The rise and popularity of Social Networking sites aided by the tremendous growth of mobile device access to the Internet has helped accelerate the growth and reach of Internet Crime. Yours personal devices and those owned by your spouse, sons and daughters, your business, agencies and even your government are at risk. As the Internet continues to multiple its user base, awareness of these various risks also grew. Groups, websites, Blog and Articles attempt to spread the word. Some focus on a particulate type of scam, i.e. Nigerian Letters, PTC Investigations, MLM, Email fraud, Identity theft, etc. As they try to make us aware; many have taken up the difficult task of maintaining lists of banned sites. Until Internet Users Handbook, first published, in 2009 as a support guide for the Internet Scams Anonymous (ISA) Groups. No one book, group, company, organization or website had addressed the bigger problem that is anyone that has an email address and logs onto the Internet is or may be exposed to any and all to the various online scams and/or malicious viruses. That email from an old friend that has not heard from in years opens with nothing but a dangerous link. That connection can either steal your keystrokes, passwords and/or identity; or it may simply disable your device or network.
EDUCATE YOURSELF
Educate yourself about Internet risk and risk avoidance. Learn to recognize the signs that may appear in the email headlines from an unknown source, the mysterious free download, the fake bank emails rather than simply pass them to someones outdated lists. Offline, the scammers usually spread their scam one-on-one with their potential victims; however, the Internet with a rate of growth nearing 50% per year of new users or Newbies, the scammers have found a haven for Internet crime. One scam or virus can reach thousands, if not hundreds of thousands of users or devices.
10
A recent Facebook malware disguised as a message allowing the member to operate a Dislike Button to go along with the like button. Activating this option then sent all of the members online activity, passwords, accounts information to the malware author. Your child could have activated this without out your knowledge leaving your computer and activities totally exposed. It spread virally. Sophos Naked Security Perhaps the children, even adults play games online. Other than the fact that the scammers are always looking for information and your credit card information, that next Free Game may contain a virus to shut down your computer or network. Children are exposed to inappropriate material. Most recently, the death of Whitney Houston popular to young and old alike created another virus. Warning: Whitney Houston autopsy video links on Facebook are not what they seem and led to a virus download of a fake adobe flash update from a bogus page. Sophos Naked Security While we cannot learn how many different user or newbies are here for socializing, games or both, we do know that when the world economy turns down, Internet crime goes up. As individuals turn to the Internet for a quick fix to their financial woes, the unemployed as well as the senior citizens that seek to increase their retirement income. Scammers are excellent salesmen; they anticipate your problems, answer your questions and stand ready to take your last dollar with false promises of overnight cures. Check your email. Even if you were not looking for such, the email headlines will entice some to open and read and take that chance of earning a quick dollar. If a single web expert can set up 15 authentic new websites per day, how many site can several scammers set up in a day? Multiply that by the unknown numbers of scammers! It is easy to see the value of knowledge over that of list service and reviews. Legitimate offline businesses are turning to the Internet to globalize their business. Many of them may be startups operating out of their garages or kitchens often, without some research, we cannot see. Larger companies often do have Internet policies for matters of email usage, socializing during working hours, but research indicates that few have risk management policies that address Internet crime and spam. A investigation of your local schools, universities or alumni will show the same result
11
12
13
Too many newbies turn to the Internet as a last resort to solve their financial crisis; be it out-of-work, excessive debt and related Further, most of our new users lack the business skills and a basic understanding of just how much impact that Scams would have on their potential for a successful online business. More and more businesses are taking advantage of the low cost Internet advertising and the affiliate models, so readily found online, but most fail to understand or include online spam and scams in their risk management plan. Our Internet Users Handbook along with our various Internet Scams Anonymous Groups help fill the void with a broad approach to Avoiding Internet Crime while Doing Business Online. While This Handbook was originally prepared originally as resource for our Internet Scam Anonymous (ISA) Groups, Its value serves a much greater audience, truly a one-of-akind Handbook and Resource for All Internet Users, Individuals, Businesses and Risk Managers that want to start, attempt or grow an online business. The handbook is largely written for the individual user reading, but Business and Risk Managers will find this a valuable resource for formulating their own Internet Usage and Risk Management Policies. Our goals are to combat these crimes by showing our members how to recognize and control their emotional propensity to participate in these scams. With one hand, we seek are helping to protect the members or readers, with the other we are helping by provide them with the tools to succeed online.
14
Our Testimonials show that owners, members and affiliates that use this Handbook have one of the most comprehensive references available regarding Scams, Spam and all aspects of Doing Business Online. It is a compilation of years of experience and the Best of the Net, Articles, Blogs, Tools, Tips and How-To and other Resources for newcomers (Newbies), as well as seasoned veterans (but still able to learn new tricks). The use of the strategies and techniques offered herein is supported by our ISA Group members that participate and share their online experiences. If you are new to business, or online, then arm and prepare yourself for success online. Learn the business. As we study Scammers and their schemes, we find that they are Masters of Persuasion and the use of Spam. Microsoft advises us that over 97% of the emails the received each day are unsolicited. Another source says it is at least 60%. The problem is so big that it ties up both individual and organizational systems with junk, Spam. I am reminded of the garbage in garbage out days! To help resolve this problem, Internet Services Providers (ISP), email providers, advertising agencies and even Instant Messaging (IM) sites are all trying to reduce spam and scams by various blocking or screening strategies. However as a result, even legitimate email is sometimes spam blocked, because of a selection and use of the wrong word A great number of, networks, blogs, articles and groups do a great job dealing with various segments of Internet Crime. Much of their work has been complied herein as The Best of the Web, for I could not have said it better. Of course there are many others included that ranked high in our hundreds of searches. Throughout this Reference Handbook, we recognize and appreciate the contributions that these and others have made to the subject of Internet Crime, or Cybercrime, as well as Starting and Growing a Successful Business Online. Every effort has been made to respect copyright issues; sources have been identified, etc.
15
Elsewhere in this Handbook, we speak of the seniors trust in what they read, and the false promises offered by the Scammers. Online, we can forget the put it in writing for me. TIP: A word of caution as you progress online; everything and anything you see online can be fabricated, from fraudulent websites, emails that look like they came from the original source, payment proofs, and testimonials, all! We do not promise great wealth here, but we do offer you an opportunity to get on the right path to success, and to show you a strategy to control your emotional propensity to join these various scams and frauds. We stress doing your own due diligence to avoid the mistakes that I have made. We are especially concerned for those newbies that can least afford it, from wasting their limited resources on Scams. To sum this up, we are about business, your business. Again, This Handbook for all practical purposes is a Business Handbook, taking you from personal assessment, start-up, growth, operations, and the management of business risk. In this case, we focus on scams and spam risk.
16
17
2.4 NON-DELIVERY
The site does not work, leads and links promised are not provided, and automated systems do not provided the stated results. Payouts are not received within the stated timeframes. The site is often off-line for non-payment of hosting, or whatever. One of the top consumer complaints
18
19
20
THE DUE DILIGENCE PROCESS CAN BE DIVIDED INTO NINE DISTINCT AREAS:
Compatibility Audit Financial Audit Macro-Environment Audit Legal/Environmental Audit Marketing Audit Production Audit Management Audit Information Systems Audit Reconciliation audit. Wikipedia
Offline:
Buyers I want to make this large purchase and dont want to wait; but my banker, accountant, lawyer or someone requires that I have a Due Diligence done by a third party unrelated to the transaction. Costs are usually borne by the Buyer. Can be and usually is a long-drawn out process. In my experience, it is surprising how many big money players also react on emotion, save time, save the cost of doing their Due Diligence, only in the end to lose it all. Big enough money to pay cash so no DD requirement was imposed by another, i.e. lawyer, banker, etc. Example, if the seller creates a sense of urgency or perhaps demand, then Buyers are more likely to react more with emotion than reasonableness. A wealthy Malaysian Chinese Buyer wanted to do business with a Vietnamese Seller. The Agreement was drawn up in only 1 language, that of the seller, the buyer didnt have it translated into his own language, therefore didnt understand the fine print. The fine print contained a clause that the caused the buyer to default and forfeit millions in his down payment. Greed, stupidity, a scam, perhaps!
Online:
I want to join this program. I have no idea whether it is a scam, but it sounds great, but my online adviser (Dr Don) says slow down, and do your own Due Diligence. Fast process, can be done in less than a few minutes to an hour. Cost is zero. Why Not! Better Safe than Sorry Due Diligence can vary with the business type and the purpose. Some for legal, tax, financial, IT, operations, management and the list grows. In simplest terms for us; it means doing our homework.
21
Our objective is to avoid a fraud or scam, and to join a successful program. If it is a new site, then a Google search will provide us with no help. A Whois search may help us find who the owners to enable us to do further research. We need to know who the owners are, how long they have been in business, what is their track-record, are there any legal actions against them. Are customers or affiliates complaining, and have they ever been accused of a Scam or a Fraud? Right away, you can see that this process will slow you down. And sadly, most of you will not bother. While it is much faster than doing an offline due diligence process, it is our objective to slow you done enough to help control your emotional spending. Remember, many of your friends will also offer you something that they, themselves have not investigated; we will support them by joining, then we all lose.
22
Zealots" and only look for appropriate information. A good MLM Detective will ignore 99% of their BS!
23
24
This is vital to your business decisions. 90% of the information you need to know can be found on-line. You just have to know where to look for it, and how to look for it. I will show you how you can develop your own profile on anyone or any business on-line free Example on a property investment acquisition: I contacted an individual who had placed a classified ad through an on-line newspaper under real estate finance/services for hard money lending, private moneylenders. I was really just trying to get a feel for the market in that specific area of the country. I do this by contacting various types of real estate professionals such Agents, brokers, title companies/escrow, private/hard moneylenders, bird dogs, wholesalers, etc. When I call, I get their personal name and the company name they work for (if any). If its a company its usually an LLC which is very common in the real estate industry or another type of corporate entity. Many times, people talk fast or not very clear on the phone. Therefore, I always have them spell out their name and company name and have them provide me any additional contact numbers that they can provide should I need to speak with them at another time. When the subject I am speaking to on the phone tells me the name of the company he or she represents and it is a corporate entity such as an LLC, S-Corp, partnership, etc. I know right away I can get the corporate members names within a few minutes. I will first go to the states web site in which the individual claims to conduct business in and lookup the entity online by the name of the company. Just about all the states in the US have free online searches at their web sites where you can lookup information about a corporation by company name or agent names. Just go to your favorite search engine like Google or MSN and type in the name of the state and corporations. Example Arizona Corporations, Texas Corporations, Nevada Corporations. The search engines will typically return the results youre looking for within the first two organic search result listings. Once you get to the states web site you will need to find where on the web site you can look up a Corporation. Usually it will just read Look up Corporations. Type in the name of the company and you can find out all corporate members, addresses, resident agents, corporate status- good standing- dissolved, revoked, etc. What I typically do is find out if the name the subject provided to me on the phone is indeed an actual member of the corporation, and then I run his or her name through the states database and see if he or she is involved in any other types of corporations. I find that is quite common to have members involved in several corporations. Sometimes you will not find a companys name in the specific states database. There could be a few reasons for this. The company may be a sole proprietor, or the company is registered in another state but has not filed as a foreign entity in the state they are doing business in. Sometimes companies operate this way. In this case it would be wise to search the Nevada and Delaware corporation web sites to determine if the company or agents are registered in either of those two states.
25
There are a great number of corporations that register in Nevada and Delaware simply because of the asset protection. It is difficult to pierce the corporate veil under the laws of those two states and that alone drives many, many companies to register in those particular states. I then run the companies name and agents name through online courthouse records in the specific county where they are residing in or conducting business in. Again like with the states, most counties have some type of information that is accessible online. Civil, family law and criminal filings are what you would most be interested in. You can go to the National Association of Counties by going to- http://www.naco.org and look up the county of your interest and you will go to their web site and see what kind of records that are accessible on-line for you to search. If you dont know the name of the county, you can locate a County by just knowing the City and State by going to the US Census Bureau and searching their database located here: http://quickfacts.census.gov/cgi-bin/qfd/lookup?state=01000. Or you can locate a County by Zip Code by searching this database by just entering a zip code http://www.usatrace.com/Search.html As soon as you locate the counties web site that you want to search just run the subjects name and company name through the various online databases. It can be very interesting to what you might find through courthouse records. You should also run the subjects name, company name, and phone number, any addresses separately through Google- Using each category- Main Google, Google Groups, and Google News. I typically run the above search criteria through Google to see what I can find and where it links. You can also verify if any address is a mail drop (like Mail boxes Etc.) or if it is actually a street location by using a free database search located here: http://www.finaid.com/scholarships/maildropsearch.phtml
26
there. If I find a website where the contact number I entered into Google shows up, I find out who owns the web site by searching the Whois directory located here- http://www.betterwhois.com I may find another name or indeed find out my subject owns this particular web site. I start developing my profile of the business and the subject themselves by initially starting with a simple phone number. I can find all kinds of interesting things by simply running a search through Google with the subjects contact telephone number. I then ran the company name that the subject had provided me by going online at the specific states website where I can look up and find out information about corporations. This will allow me to verify or reveal agents names. Sure enough he was a member of the corporation. However, the last name he provided to me was spelled and pronounced much differently than what was revealed with the corporation search. It was way off. I then went to the respective county web site to search online for civil and criminal records on the subject. I knew which county to search based on the subjects phone number and the zip code that was returned for the subjects address revealed in the corporation search through the states website. I found numerous civil filings on the subject regarding business dealings including an Exparte filed for a wiretap on the subjects phone number as well as family law cases involving domestic violence. I also found a criminal case-. Possession of marijuana Now it does not take a rocket scientist to make up ones mind if they would like to enter into a business relationship with this subject. There is a greater possibility that I might have issues with this individual and things may not work out so well in the future. There are many scenarios of why you would need to conduct due diligence on an individual or company. However, remember you should always verify or reveal information on an individual or company prior to entering into a business relationship. Frank Bruno
27
28
29
regarding the rapidly expanding arena of cybercrime. These statistics have the advantage of the FBI's expertise, but the weakness of being 1 to 2 years out of date. To overcome this, we have added our own tracking system statistics to update the FBI / IC3 statistics.
BACKGROUND
The statistics for the current Top 10 frauds and scams list can be found below. A description of these scams is on this page. The greatest challenge in assembling a list and statistics of the frauds is that most fall into several categories. Consumers may characterize crime problems with an easier broad character, which may be misleading. For instance, a consumer that gets lured to an auction site which appears to be eBay may later find that they were victimized through a cyber-scheme. The scheme may in fact have involved SPAM, unsolicited email inviting them to a site, and a spoofed website which only imitated the true legitimate site. The aforementioned crime problem could be characterized as SPAM, phishing, possible identity theft, credit card fraud or auction fraud. In such scenarios, many complainants have depicted schemes such as auction fraud even though that label may be incomplete or misleading. The Internet Crime Complaint Center, in 2009 released its latest annual report on victims' complaints received and referred to law enforcement. From January 1, 2008 December 31, 2008, the IC3 website received 275,284 complaint submissions. This is a (33.1%) increase when compared to 2007 when 206,884 complaints were received. These filings were composed of complaints primarily related to fraudulent and non-fraudulent issues on the Internet. These complaints were composed of many different fraud types such as auction fraud, nondelivery, and credit/debit card fraud as well as non-fraudulent complaints such as computer intrusions, spam/unsolicited email, and child pornography. All of these complaints are accessible to federal, state, and local law enforcement to support active investigations, trend analysis, and public outreach and awareness efforts. From the submissions, IC3 referred 72,940 complaints of crime to federal, state, and local law enforcement agencies around the country for further consideration. The vast majorities of cases were fraudulent in nature and involved a financial loss on the part of the complainant. The total dollar loss from all referred cases of fraud was $264.6 million with a median dollar loss of $931.00 per complaint. This is up from $239.1 million in total reported losses in 2007. Other significant findings analyses of referrals include:
30
Non-delivered merchandise and/or payment were, by far, the most reported offense, comprising 32.9% of referred complaints. Internet auction fraud accounted for 25.5% of referred complaints. Credit/debit card fraud made up 9.0% of referred complaints. Confidence fraud ("con men"), computer fraud, check fraud, and Nigerian letter fraud (Also called "Advance Fee Fraud" or AFF) round out the top seven categories of complaints referred to law enforcement during the year.
DOLLAR LOSS
Reporting a Dollar Loss, The Highest Median Losses Were Found Among Check Fraud ($3,000), Confidence Fraud ($2,000), Nigerian (West African, 419, Advance Fee) Letter Fraud ($1,650)
AMONG PERPETRATORS
77.4% were male and 50% resided in one of the following states: California, New York, Florida, Texas, District of Columbia, and Washington. The majority of reported perpetrators (66.1%) were from the United States; however, a significant number of perpetrators where also located in the United Kingdom, Nigeria, Canada, China, and South Africa.
AMONG COMPLAINANTS
55.4% were male, Nearly half were between the ages of 30 and 50 and one-third resided in one of the four most populated states: California, Florida, Texas, and New York. Males lost more money than females (ratio of $1.69 dollars lost per male to every $1.00 dollar lost per female). This may be a function of both online purchasing differences by gender and the type of fraudulent schemes by which the individuals were victimized. Email (74.0%) and webpages (28.9%) were the two primary mechanisms by which the fraudulent contact took place.
31
2008 PATTERNS
In 2008, that ranking has changed considerably - Lottery scams are number 1 followed by Auction scams, non- delivery and check fraud. LOTTERY SCAMS INTERNET AUCTION FRAUDS CONFIDENCE - NIGERIAN ADVANCE FEE FRAUDs (AFF) PHISHING AND PHARMING FOR IDENTITY THEFT "PASSIVE RESIDUAL INCOME" SCAMS CHECK (COUNTERFEIT) FRAUDS WORK-AT-HOME SCAMS MATRIX / MULTI-LEVEL MARKETING AND PYRAMID SCHEMES PROPERTY MORTGAGE AND INVESTMENT SCHEMES FINANCIAL INSTITUTIONS SCAMS
32
As I see it, one of the key differences in offline business at least in the United States, is that we have the lawyers, the courts, the consultants, Federal Trade Commission, Consumer Protection Agency, Federal and State agencies and others almost stepping on each other to protect the consumers, and when in doubt rule in favor of the consumer. Yet we still are scammed. Some of the same is effort is being applied to Internet Crime; however, other countries from which these crimes are being initiated are not coming onboard. Internet Cyber Laws, but Scams and Spam are a worldwide problem, and we are a long way from getting worldwide attention. TIP: Complaints: We can file a complaint and become a member of the Statistics; you have a better chance of learning how to recognize and avoid such scams in the future; than getting your money back. In business, I used to say, put it in writing; then I could ask anyone of the experts vet the writing. Online, we do not have the face to face, and more often than not, the names, the legal entities, etc. to locate. Even if you have their names, it seems impossible to get access to them, and maybe it is a fictitious name or address. Now I say - do not believe all, if anything, that you read on the Internet with regard to doing business and/or making money on line. Any webpage can be fabricated, false testimonials, false payouts. On the web do not believe everything you read... As for me, sure, I have been scammed and have invested in excess of $50,000 so that you do not have too. Perhaps you have been scammed too and I suspect that many of the top gurus have also been scammed somewhere in their Internet learning curve. So what to do: join the scammers, or organize ourselves to help our members recognize Scammers and their Programs for what they really are A Scam preying on those that can least afford to lose their money. Help spread the word. I am sure all of us, individuals and business alike would like to make a quick buck or two to cure a cash flow problem. However, like most of you, I am not interested in taking money from or ripping of my mother, father, other relatives, or other people. Therefore, I have chosen to use my experiences and resources to help spread the word, educate them and help them reduce their chances of being scammed. Since you are here - you can help me, we can help each other.
33
While Ms. Clarke is trying to protect herself, she still illustrates a disturbing trend: more and more Internet users are buying into online scams. The FBI reported that the Internet Crime Complaint Center (IC3) received its 2 millionth complaint in November. The IC3 has been the go-to site for online fraud victims since 2003, but, according to Jennifer, most people probably havent heard of that. In fact, themselves a victim of identity theft in 2006, the Clarke family admitted theyd never heard of the IC3 or thought to report the incident. We just moved across town, says Jennifer. The year 2010 has been one of the worst years for online scams, with a 111.4 percent increase of malicious website creation since 2009. Websense, the leading information security company, made their online scam statistic findings public. Websense reports that this year, 79 per cent of malicious codes were found on legitimate, trusted websites such as search engine Google or blogging center WordPress. While email scams decreased by 0.7 percent, nearly 90 percent of fraudulent emails referred the reader to a malicious site, and 9 percent of scams still happen through email alone. Scammers are getting smarter. The invention of Search Engine Optimization (SEO) strategy means viruses can be directed towards a target audience, not just sent in all directions via email. SEO strategizing means a scammer can write a malicious code into a website and then add keywords, or tags, to the page. These tags are what major search engines like Google or Yahoo see during a search. Theyre also what are often displayed when the results of a search load. Using SEO strategy, the scammer can make sure their malicious page will appear near the top of the search results. Victims are actually downloading viruses during innocent web browsing and searching. 52 percent of data stealing attacks this year happened over the Internet. Once a virus has been downloaded from a malicious website or email, it wreaks havoc on computer systems. While most virus symptoms look the same the computer runs more slowly, numerous popups appear, some programs just wont run there are actually many different types of virus programs.
TROJAN HORSES
One of the most common virus programs is called a Trojan horse, named after the Greek myth. This is a virus that looks like a legitimate program, so users are tricked into downloading it and using the software. Trojan viruses gain unauthorized access to computer systems and are what cause those popups to appear, even when users are not surfing the Internet. Other common viruses include program viruses, which (much like Trojans) come in the form of a fake computer program often accompanied by an .EXE file extension. These viruses affect other programs in the computer.
STEALTH VIRUSES
Stealth viruses hide from antivirus software, concealing themselves inside other files, altering their file size, and other tricks to look like legitimate files. Boot sector viruses infect disks, and spread when a person lets their friend borrow a computer CD. All of these are classic viruses which can usually be caught with a good antivirus software or spam filter.
34
Unfortunately, though, antivirus software cant do everything. Virus writers wanting to steal information, or computer hackers, are evolving as fast as the software trying to shield them out. New viruses include names like article X viruses and Java control viruses, which can attack a computer through web browsers alone, just by having an unsuspecting user visit a website. These are especially devastating to users who dont disable pop-ups or block unknown Java programs from running. A new version of stealth viruses is also emerging, called polymorphic viruses which alter their coding, or virus signature, every time they infect a new file. This makes it very difficult for an antivirus program to even detect the problem, let alone delete it. Some protection programs dont even have the capacity to delete certain viruses, such as macro viruses, which infect any program or file which supports a macro programming language. Such programs as Microsoft Word or Excel support macro languages, and if infected, each document produced is also infected. These viruses can even travel if the unsuspecting user emails the document to friends or family. The goal, for a majority of these viruses, is to steal data. Keystrokes can be recorded, passwords extracted, or identification compromised. In one of the worst cases of data loss, Massachusetts South Shore Hospital reported the data loss of over 800,000 patient files from their systems this year 14 years worth of records. These records included patients full names, birthdays, addresses, phone numbers, drivers license numbers, SIN numbers, medical record numbers, bank account and credit card information, as well as diagnoses and treatments. South Shore Hospital referred to this loss as only a small subset, prompting negative reactions from many victims involved, but the dark reality is that there just isnt a lot that can be done. Another notable online heist this year came when hackers managed to expose the emails of online iPad users; some of these victims included government officials, military members, and the Department of Defenses advanced research team.
WIRELESS NETWORKS
Wireless Internet created an entirely new problem: Wi-Fi attacks. Open-access Wi-Fi points are becoming a huge problem. These free Wi-Fi points appear in airports, along train track routes, and even inside local Starbucks cafs. Because theyre open to everyone, experienced hackers can pose as coffee drinkers reading newspapers online while easily downloading banking information from the computer across from them. The new iPads, which are like portable Wi-Fi stations, are prime targets.
EMAIL SCAMS
One new email scam this year involves false emails that appear to be from a friend or family member, claiming the sender is stranded at an airport and needs financial assistance to get tickets home. Another new strategy is to embed malicious code into the email itself, so a user needs only to open the email to get scammed; no reading of material, external links, or attachments needed. Spam filters and antivirus programs have their metaphorical hands full trying to keep up with the new technology.
35
WORMS
One thing that can be expected, at least, is a worm. Every year, antivirus software producers prepare for the possibility of a dreaded worm. Its like the computer equivalent to a pandemic. Worms are viruses that dont need to attach themselves to any programs; rather than stealing information from a computer, they can corrupt entire networks of computers, a sort of mass infestation virus that networks and copies itself to new networks wherever it finds them.
STUXNET
This years surprise was Stuxnet, which became the first virus to affect industrial control mechanisms. Stuxnet not only impacted computers, it impacted nuclear power plants, dams, water treatment facilities, and factories in 155 countries. Stuxnet did the most damage in Iran, Indonesia, and India.
SCAREWARE
Another surprise this year was the massive hike in scareware programs. Scareware means fake antivirus, or spyware, programs that are actually malicious a cruel and ironic take on Trojan or program viruses. 40 percent of all false antivirus programs to date were created this year alone. Thats a scary number, but more terrifying is the thought of how theyre downloaded. While some scareware viruses market themselves through traditional pop-ups or advertisements, the growing trend is for coldcallers sometimes the hackers themselves to call victims and deliver a presentation by phone, asking customers to buy the product.
36
However miniature they appear on the screen, these are real browsers, and malicious webpages can still appear, downloading viral contents or uploading personal information. McAfree warns consumers to watch out for any open Wi-Fi networks, even if the browser in question is a mobile phone.
Meanwhile, some nations are taking action. The European Network and Information Security Agency (ENISA) are testing cyber defense teams in 21 participating European Union nations. The EU has already set up a Cyber Crime task force in Europol, along with a Cyber Crime Training and Education Group. ENISA hopes this will be the first of many cybercrime force tests, and is planning to run joint exercises with the US or NATO.
EDUCATION
The best way to avoid scams is to be educated. Online shoppers should price check everything carefully; some products have labels such as the lowest price on them, which are simply not true. Shoppers should also be wary of fine print, as some online shops have costly return policies.
Internet
Scam Anonymous
Fraud
The Internet is a combination of several media technologies and an electronic version of newspapers, magazines, books, catalogues, bulletin boards, and much more. This versatility gives the Internet its power. A fraudulent business scheme; a fraud, swindle. Having an unknown or withheld authorship or agency: an anonymous letter; an anonymous phone call, anonymous group Having no distinctive character or recognition factor: "a very great, almost anonymous center of people who just want peace" A deception deliberately practiced in order to secure unfair or unlawful gain. A piece of trickery; a trick. One that defrauds; a cheat. One who assumes a false pose; an impostor. A Scammer
37
A rip-off (or rip-off) is a bad deal. Usually it refers to an incident in which a person pays too much for something. A rip-off is distinguished from a fraud in that a scam involves wrongdoing such as fraud; a rip-off, on the other hand, is in the eye of the beholder. In one of his standup comedy routines, Dennis Miller jokes about seeing an ad in the National Inquirer: "Learn How to Avoid Ripoffs - Send $ 5."
Note: Both Yahoo and Bing distinguish between rip-off, rip-off, or rip off. Google provided the same result for all combinations The online money at risk may not be as great as a real estate scam, college degrees, or other big ticket scams; but to a mom and pop, retired, or single parent that are looking to make money online, the scam dollars can add up. I lost $ 1,000 on just one scam plus miscellaneous costs. This is not to say that the big-ticket scams are not being pursued online. To be fair to the numbers above, we cannot easily identify how many of these pages are actually scamming sites because many of the pages include blogs or articles dealing with the subject. It is safe to say the number of scam sites will still be in the millions. We have a better chance of understanding the various scams than we do of identifying each scam site. Yes, there are legitimate ways to make money online. However, certainly there are more scams than winners. Further, the numbers of people that are new to the net are growing everyday as you may see from the following section:
38
InternetWorldStats
If my math is correct, that is a current average of nearly 44% growth per year. As we push the Internet worldwide into our school systems and our households, the numbers will likely grow at even a faster pace than previously experienced. Yes more New Users and more new Scams and Scammers. Scammers are largely unregulated, hard to prosecute and in many cases it is hard to get a true identity or location.
39
40
To find the answer, perhaps we could talk to a police officer or a criminologist. But someone with a lateral take is magician Nicholas Johnson. He reckons that both magicians and scammers use the same box of tools: psychology and sleight of hand. Nicholas Johnson: I think what I love most about con artists and the world of scammers is that they are criminals who manage to get their victims to hand over their possessions freely. Most thieves and robbers and the like, tend to use force, or deception, in order for them to take things, whereas a con artist manages to get their victims to freely give up their stuff. And I think that is what really fascinates me the most. Damien Carrick: What makes people susceptible to con men? Nicholas Johnson: The main thing that really makes people susceptible to con artists is the idea that we are going to get something for nothing. Therefore, it really buys into our greed. It buys into sometimes our lust, and at the same time, sometimes even our sense that we are going to do something good. So we're going to get a great feeling from helping someone out, we're going to make some money, we're going to meet a beautiful girlit really ties into our basest desires, and that's what the con artist relies on. There was a study done in the UK just in train stations. They would go up to people and ask them to do a survey, and said 'If you could just answer these ten questions, we will give you a free pen at the end.' And one of the questions was 'What is your security number?' your PIN, or your email number and so on. In addition, a whopping percentage of people were more than happy to hand over that information to a complete stranger in a train station, in exchange for a free pen, because the person looked like they were official Damien Carrick: Not much of a bargain. Nicholas Johnson: Not much of a bargain, no, it was a nice pen, though. [On stage: I think it is important that if you are going to be a con artist that you learn how to lie to people. So what I thought we should do is actually bring up here on the stage some of the best liars in the room and see whether we can spot who's really good at it, and who's really bad at it. So I am just going to have a look. Just by looking at people who here looks as if they may be a good liar. So we are looking for people with sort of cold, dead eyes, the kind of people who would just stab you for your Metlink card. Oh, right there, brilliant, fantastic. Come up, and give him a big round of applause. Fantastic ...] Most con artists rely on this idea that the victim is in control. The victim is the one who is controlling the situation. So a great example of that is the classic Nigerian email scam, the person who writes to you and says, 'I've got this money that I need to get out of the country, and I need your help.' So you are in control, you can help them, you can do a good deed, you can make some money, you have got this fantastic opportunity, and the con artist needs your help. It is not the con artist doing you
41
a favor. So really, you feel like you are the one who is controlling the situation when really it is the con artist who knows the real deal. On stage: That is a good guess that is a very good guess, but it is not a correct guess, you owe me $2. No, no, no, we will settle up at the end of the night that is fine. OK? What you really should have done is to actually bet on this one over here, but it's completely up to you whether you want to call me a liar and bet over here or whether you want to go with my choice, which is right there. So what is it going to be? Are you going to bet there, or are you going to bet there? Am I telling the truth, or am I lying? OK, you do realize I am a con man, that is $4 you owe me, OK, it is actually right there.] Damien Carrick: Now you cut your teeth around carnival people and circus people, but have you also spoken to, or learned skills from the Real McCoy, the actual con men, the actual criminals? Nicholas Johnson: Yes, I think the real con artists are the people who can really teach you the most. You can read books about it, you can talk to people who have had experience, the victims, but unless you can really get inside the mind of a con artist, you really will not ever understand exactly how it works. I've communicated a lot with some of the Nigerian scammers, the people who write those emails, because if they think maybe they're going to make a few dollars, they're always happy to spill the beans. And it is amazing that most of those people see it as a legitimate job. For them it is a bit like being a telemarketer, they are just working in an office, in a cubicle, sending out emails, trying to get leads just like a salesperson. Damien Carrick: And they were happy to have an email dialogue with you? Nicholas Johnson: They were, yes, but obviously they were fairly cagey about exact details of who they were and what they were doing, but I was surprised, many of them admitted that they were working for organized crime figures and organizations in their home country of Nigeria. Many of them were quite happy to say that they worked on commission and they made a bit of money based on how much money they brought in, and they were quite upfront about it. I think for a lot of con artists they are very proud of their work, and they like people to know exactly what they have gotten away with. Nicholas Johnson: Yes, it is interesting the justifications that con artists use. Some say it is a job, just like any other, 'I'm no different from a used car salesman, I'm selling a dream instead of selling a car.' So I like that one. The other explanation is, 'You can't con an honest man.' Now that is this idea that because you are buying into people's greed and their gluttony and their lust and so on, that those people are guilty. The victim is just as guilty as the con artist, and therefore they get what's coming to them.' Of course we know that is just not true and that it is really just an excuse that they are using.
42
Damien Carrick: Tell me about some of these short cons that the Australian people that you have spoken to engage in. Nicholas Johnson: Sure. My all-time favorite one only makes the con artist a few dollars every time he does it, but I absolutely love it. These guys used to go door-to-door in the 1970s selling light bulbs and they would offer to replace every single light bulb in your house, so all your old light bulbs would be replaced with a brand new light bulb, and it would cost you, say $5, so a fraction of the cost of what new light bulbs would cost. So the man comes in, he replaces each light bulb, every single one in the house, and does it, you can check, and they all work, and then he takes all the light bulbs that he's just taken from the person's house, goes next door and then sells them the same light bulbs again. So it is really just moving light bulbs from one house to another and charging people a fee to do it. But there are all sorts of those homemaker scams, people offering to seal your roof so they say, 'We'll put a fresh coat of tar on your roof', or 'We'll re-seal your driveway'. In actual fact, all they do is get old black sump oil and smooth it over the roof or smooth it over the driveway. You come home and it looks like wet tar, and so 'Don't step on it for 24 hours', and of course, 24 hours later, they are long gone with the money, and you are left with a sticky, smelly driveway. Damien Carrick: You have spoken to some of the con artists. Have you ever spoken to any of the victims? Nicholas Johnson: I have. I have spoken to a lot of victims. I get a lot of emails from victims and for me, I really love the world of the con artist and I have a real grudging respect for what they do, and I love hearing the stories. But hearing from the victims, you really realize that these scams have a real financial and emotional impact on the people involved. I spoke to a man just the other day who'd lost $5,000 investing in what he thought was an Internet marketing company, and it was just a scam, it was basically an Americanbased pyramid scheme where the only way you make money is of course to try and convince other people to sign up to the scam. And he was absolutely heartbroken. He could afford to lose the money, for him it was only a few thousand dollars, but it wasn't that he lost the money that upset him so much, it was the fact that he really lost control, that he thought he was in control of what was going on, and that he really felt like that he couldn't trust the Internet, couldn't trust other people making particular offers to him, that he couldn't really trust himself and his decision-making abilities. And that's really I think for a lot of people, where they feel the hardest hit. [On stage: All right, so we are going to bet them. Here we go. You bet $1 and then I see your dollar and raise $10, then you bet $10 I bet $100, and then I bet $1,000, then it will be your shoes, I bet my jacket, you bet your wife, I bet my first-born child.
43
We put everything we own on the table, I reach into my pocket, put my last dollar down on the table and call, what do you have?' Two sixes. Yes, I think I have you beat, because I have one, two, three, four, five, six of a kind. Six kings, ladies and gentlemen. Give him a big round of applause though anyway. Thank you very much for playing. Thank you.] Damien Carrick: When I saw your show the other night, you hammered a nail up your nostril and it was horrible, it was funny, and it was compelling. And how common are scams involving that kind of physical illusion, and what kinds of motivations do they have? Nicholas Johnson: Sure. What you're referring to there is what they call 'psychic surgery', so you'll see photographs of people and video of people reaching inside somebody's stomach, blood spurting everywhere, they'll pull out a tumor which they'll throw into a bowl, wave their hands over the person's stomach and they're instantly as good as new and restored with absolutely no cut whatsoever. Or in the case of the nail in the head, they will get a nail and actually hammer it into somebody's face, just below the nostrils, that is sticking out horizontal. You maybe get a pair of forceps and sort of force them in there and pretend to pull something out, and these kind of gruesome, disgusting displays are so compelling to watch and so intense to experience that people feel that it must be doing you some good, it must be medical and it must be worth paying for. And sadly, lots of people hand over cash for these bogus operations. ABC.NET.AU/Law Report
44
Not to worry, Let me offer you an unconditional guarantee; Or how about I will double your money back. (Who, What, Where, When and HOW)
SCARCITY CUES
Scams are often personalized to create the impression that the offer is unique to the recipient. They also emphasize the urgency of a response to reduce the potential victim's motivation to process the scam content objectively.
45
46
47
Warning Signs
You receive a call from a business directory or other publication youve never heard of, confirming your entry or advertisement. You receive a document in the mail that appears to be an invoice from a publication youve never heard of. The caller claims that the government requires you to be registered in their register. The caller reads out your listing or advertisement and you recognize it as a listing you put in a different publication.
Do Your Homework
If you think that the publication is a legitimate one and you may have authorized an entry, ask for proof of its existence. You should also make sure you keep written records of authorizations for advertising or directory entries so that if you receive an invoice or a telephone call, you can go back to your records to check it. Always get proof of the entry before paying anything. You do not have to pay for any directory entry that you did not specifically authorize in writing. Another way to look into the legitimacy of the directory is to ask for details of other local businesses who have previously advertised and check with them that they received what they paid for.
Decide
Never pay for an advertisement or entry you didnt authorize. If you receive a telephone call or an invoice that comes from a publication you have never heard of, or that you dont remember putting an entry in, dont pay or give out your details until you have looked into the matter further. Report Them If you have received a fraudulent directory entry or advertising invoice or phone call, or if you have sent money to pay for an entry or advertisement which you now realize is a scam, you can report it through the SCAM watch website. You should also spread the word to your friends, family and colleagues.
48
Sometimes fraudsters will combine phishing to hijacking legitimate member accounts on eBay, typically with very high numbers of positive feedback, and then set up a phony online store. They received payment usually via check, money-order, cash or wire transfer but never deliver the goods; and then they leave the poor, unknowing eBay member to sort out the mess. In this case, the fraudster collects the money while ruining the reputation of the conned eBay member and leaving a large number of people without the goods they thought they purchased.
THE BUYER
In another type of fraud, a fraudster contacts the seller of an automobile, asking for the vehicle identification number (VIN), putatively to check the accident record of the vehicle. However, the supposed buyer actually uses the VIN to make fake papers for a stolen car that is then sold.
49
50
president of Alchemist Media, a search-engine marketing firm based in Los Angeles that specializes in fraud protection. "Technology is continuing to be developed that can exploit this pricing model at incredibly high volumes.
COVERT CLICKS
Human operations can be more difficult to detect because a wide network of people can click on ads from different computers across many regions, without a steady pattern. According to a report in the India Times, residents are being hired to click paid links from home, with the hopes of making between $100 to $200 per month.
51
In other instances, the source of bogus clicks can be much closer to home. Joe, the chief executive of an Internet marketing company, enjoys clicking on his rivals' text ads on Google and Yahoo because his competitor must pay as much as $15 each time he does it. Eventually, such phantom clicks can add up and drain a rival's budget. "It's an entertainment," said the executive, who asked to keep his name and company anonymous. "Why do you run into a store without dropping a quarter in the meter? You know it's wrong, but you do it." LATEST ON CLICK FRAUD The latest scam to hit the headlines is the multi-million dollar click fraud, which occurs when advertising network affiliates force paid views or clicks to ads on their own websites via spyware; the affiliate is then paid a commission on the cost-per-click that was artificially generated. Affiliate programs such as Google's AdSense capability pay high commissions that drive the generation of bogus clicks. With paid clicks costing as much as US$100 and an online advertising industry worth more than US$10 billion, this form of Internet fraud is on the increase.
SOFTWARE
There are those who use automated clicking tools, such as robot programs, to click on PPC listings.
52
PAID CLICKERS
In some Asian countries, people are often paid to click on PPC ads for hours. Many do not know why they do it, and do not care. The only important issue is that they will be well rewarded for their efforts. If you do a search on any search engine you will see plenty of sites offering to hire people for just this purpose. Type in 'earn rupees clicking ads' in Google and you get quite a few leads. Most PPC networks have measures in place to protect you against click fraud. Yahoo's Overture tracks more than 50 data points, including IP addresses, browser info, users' session info and what they call "pattern recognition." They have a "proprietary system" in place for detecting fraud and a specialized team that monitors things and works with the advertisers to stop it. Google offers suggestions to avoid click thru fraud, such as "using negative keywords" to keep your ads from showing up for products and services that are unrelated. They also suggest adding tracking URL's to your links so you can track the traffic coming from Google. If you go through your log files, you'll be able to see your Google traffic at a glance. If you suspect fraud, Google asks that you contact them right away, because they have a team of researchers that will investigate. They also take action to block future impressions from anyone they identify as committing click fraud. Like Overture, they also have "proprietary technology" that distinguishes between normal clicks and invalid ones. Google never bills you for any "bad clicks" that are caught by their system. All honest website owners need to be alert to any "suspicious activity" by researching their server logs or stats. If you're experiencing a lot of clicks and no sales you'll also want to take a closer look. You need to watch for any spikes in traffic, usually on one keyword or phrase and coming from only one PPC source. You need to measure and track all of your PPC accounts closely. A variety of new services have opened recently to help combat the click fraud problem. Some of them also offer web analytic tools that help improve your advertising productivity. You may want to look at these outside services to take care of problems for you. Here are some links: Click fraud is not going away anytime soon. Most probably, it will get worse before it gets any better. It's up to you as a vigilant website owner to do what you can to keep your PPC advertising costs down. You can't stop it, but with the right tracking in place, it can be managed and controlled, and hopefully kept to a minimum. InternetWorldStats
53
One common cloud computing scam involves Google docs. Phishers use this tool to lure users into sharing their personal information. Google spreadsheets can be used to create forms to collect information, and often look like they are from well-known, reputable companies when they are not. A red flag to watch out for is the URL linking to the scamtastic Google doc; it usually contains the command word formkey, followed by an equal sign and a randomly generated identifier link. Do yourself a favor and do not click on the link or enter personal information in any of the documents or form fields. AlertPay
54
The owner is instructed to cash the check and wire the difference back to the student so that they can travel to the U.S. The photos often include a young man in graduation uniform from his college. (Note: U.K. colleges are the equivalent to high schools, not universities. One photo includes a rather dumpy, depressed looking girlfriend who must be aware of the scam.) Because of the lag between the cashing and clearing of the check, the owner does not realize he/she has been had until their account is debited the counterfeit cost and the wired sum. Greedy owners may even decide to keep some of the check, only to be had themselves later. It is best not to respond to this type of email and requiring background checks before cashing first rent payments.
55
company picking up the product, which in turn has no knowledge it is participating in a fraud scheme. The cardholder then notices a charge in his card and generates a charge back to the unsuspecting merchant.
CHARITY SCAMS
"Common ploys include phone calls and spam emails asking you to donate to veterans charities, children's causes and relief funds for the latest catastrophe."
FREE IPADS
Facebook, Twitter or other social media version of the ruse, users are asked to "take a quiz to win a free IPad and must supply their cell phone number to receive the results. In actuality they are signed up for a cell phone scam that costs $10 a week," McAfee said. Here's the rest of the company's "12 Scams of Christmas" list:
GRINCH-LIKE GREETINGS
Involving e-cards Electronic cards can save paper and postage, but "cyber criminals load fake versions with links to computer viruses and other malware instead of cheer ... Computers may start displaying obscene images, pop-up ads, or even start sending cards to contacts that appear to come from you." Google admitted for the first time its "Street View" cars around the world accidentally collected more personal data than previously disclosed including complete emails and passwords potentially breathing new life into probes in various countries.
HOLIDAY-THEMED SCREENSAVERS Jingles and animations are an easy way for scammers to spread viruses and other computer threats
especially when links come from an email or IM that appears to be from a friend."
56
personal identity; try not to access bank accounts, for example, or give your credit card number online while using public Wi-Fi. It's a good rule for every day not just for the holidays.
SMISHING
You've heard of phishing? "Smishing" is when a phishing SMS, or text messages, arrives on your cell phone, wanting you to bite. "These texts appear to come from your bank or an online retailer saying that there is something wrong with an account and you have to call a number to verify your account information. In reality, these efforts are merely a ruse to extract valuable personal information from the targets".
TRAVEL SCAM
"Help! Ive Been Robbed" "This travel scam sends phony distress messages to family and friends requesting that money be wired or transferred so that they can get home."
TWITTER SCAMS
Offer dangerous links to high-paying, work-at-home jobs that ask for your personal information, such as your email address, home address and Social Security number to apply for the fake job."
57
The scenario commonly revolves around a tragedy having befallen the scammer, and he/she desperately needs money. After spending time communicating and building a relationship with the victim, the scammer will ask for help in the form of money. Most online dating services have a hard time dealing with scammers, outside of issuing warnings to their users to be alert for anyone you have never met asking for money.
COLD CALLS
You may get a call from a stranger who got your number from a telephone directory, mailing list, or "sucker list." The latter refers to lists of consumers who have lost money through fraudulent prize promotions or merchandise sales. These lists contain names, addresses, phone numbers, and people who have responded to telemarketing solicitations spent other information, such as how much money. "Sucker lists" are bought and sold by unscrupulous promoters and "list brokers".
58
They are invaluable to scam artists who know that consumers who have been deceived once are vulnerable to additional scams. Telephones create economies of scale by allowing a single caller to target a large number of victims in a short time and at long distances. Offenders maximize proceeds by focusing on target-groups most easily victimized, and by making large numbers of calls quickly, focusing on those who appear susceptible and hanging up on those who resist. Fraudulent telemarketers and sellers may reach you in several ways, but the telephone always plays an important role. You may not know it, but if you get frequent hang-up calls, they are probably telemarketers. In order for them to have the maximum number of calls each hour, they dial ahead. They are on a call, but they are dialing the next two calls. If the current call stays on the phone longer, the future call goes to your house, but when you pick up, it hangs up. Then, when they get done with the current call, they call you back. Even if you have caller ID, it will say "no data sent", as they use blocking features. Some people have had their phone numbers changed because they thought they were being harassed by calls, when the truth is that it is just telemarketers working it so they will have the greatest ability to get people to spend money. They are not concerned with the inconvenience to you or any other discomfort this practice may cause you. A computer known as an auto dialer or predictive dialer is dialing the majority of these telemarketing calls. Predictive dialers can dial 3-5 numbers simultaneously and can make as many as 500,000 calls between 8 a.m. and 9 p.m. If you are not home; or if the computer gets your answering machine, your number will be put back in the database to be called again later.
CONTEST LEADS
Fraudulent telemarketers often purchase Leads or prospect calling lists, which identify individuals who have entered a contest by filling out a personal data card, from "lead brokers". The data cards generally contain your name, address, phone number, and age. Usually you lead them right to you when you fill out these draw ballots or enter contests at fairs, trade shows and restaurants.
DIRECT MAIL
You may get a letter or postcards saying youve won a prize or a contest. Such companies get leads from the bulk mailing of entry forms with an easy crossword and a $3-5 entry fee or from a "scratch and win" ticket. Instructions tell you to respond to the promoter with certain information. Such leads may get a follow up call because they now know that you are prone to such gimmicks. You will be called by a salesperson that may use persuasive sales pitches, scare tactics, and exaggerated claims to deceive you and take your money.
59
When family members of elderly telemarketing fraud victims have done a search on the Internet for some of the names used in the sweepstakes material, found next to piles of cancelled checks, they invariably find large corporate list management and sales firms that purport to be one thing but appear to be another. It should be considered aiding and abetting a criminal enterprise when it is determined that commercial list managers purposely compile and then sell lists of vulnerable victims as part of their business model. List categories by these firms are not benignly collected demographic profiling, based on product interest of everyday goods and services, but are actively generated campaigns geared, coincidentally, towards the psychological traits, which scammers are seeking in their victims.
60
EMAIL
Commonly known as "junk email," "bulk email," or "spam," unsolicited commercial messages are flooding the Internet each day, ending up on desktops everywhere. Although some of these messages are from legitimate marketers, many are fraudulent solicitations from scam artists who make promises they have no intention of keeping. Spammers and scammers often hide and confuse their identities by obscuring their URLs.
LAND SALES
Their land sales solicitations allegedly misrepresent that buyers have contacted them with an interest in purchasing land similar to that owned by you; that they are qualified to sell real estate; and that if you call a specified number you can "sell for cash today." Consumers who call then pay several hundred dollars, but in most instances, they never sell your property.
MONEY
"Mooch lists" can contain a disturbing amount of personal information about past victims full name, address, phone number, even bank-card numbers and the amount they've spent on previous scams. Some lists even rank victims based on their perceived vulnerability. Others might include helpful scamming tips: "Mention religion. This person loves Jesus!" People on these lists have been victimized at least once by a telemarketing scam and are susceptible to being victimized again. A list used in a reverse boiler-room event included people who had lost a few dollars up to more than $30,000.
61
SWEEPSTAKES AWARDS
Their guaranteed award solicitations falsely represent that you are "absolutely guaranteed" to receive one of several valuable awards, such as a car, a vacation, or a cashier's check for several thousand dollars, and that you will receive the award without obligation to pay any money. In fact, when you call to claim your "awards," you find that you must send several hundred dollars to purchase a product or to cover shipping and handling costs in order to receive it. Even then, when you send the money, you often never receive the promised award.
VACATION OFFERS
Their vacation solicitations promised you a vacation with no obligation to make a purchase or payment when in fact; you must send several hundred dollars to purchase a travel package and often must pay even more money to take your vacation. TIP: While many of the forgoing scams are offline scams; but moving online for the bigger population and a faster spread through social networking
GREETING CARDS
The email recipient receives an electronic greeting card containing malware (malicious software). The cards, which are also referred to as e-cards or postcards, are being sent via spam. Like many other Internet fraud schemes, the perpetrators use social engineering tactics to entice the victim, claiming the card is from a family member or friend. Although there have been variations in the spam message and attached malware, generally the spam directs the recipient to click the link provided in the email to view their e-card. Upon clicking the link, the recipient is unknowingly taken to a malicious web page.
IMPOSTERS
Fraudulent emails misrepresent the FBI and/or Director Robert S. Mueller III and give the appearance of legitimacy due to the usage of pictures of the FBI Director, seal, letter head, and/or banners. The
62
types of schemes utilizing the Director's name and/or FBI are lottery endorsements and inheritance notifications.
SPAM EMAIL
Spam email, which claim to be from an official of the U.S. military sent on behalf of American soldiers stationed overseas. The scam emails vary in content; however, the general theme of each is to request personal information and/or funds from the individual receiving the email. These spam email messages are hoaxes and should be immediately deleted. Consumers need to be wary of unsolicited emails that request them to take any action even if that means just clicking on an attachment. It is possible that by "doubleclicking" on attachments to these messages, recipients will cause malicious software e.g., viruses, keystroke loggers, or other Trojan horse programsto be launched on their computers. FBI
MC139 SP NOTICE: eBay Ask Seller a Question or Contact eBay Member Alert
Dear xx, Our records show that you recently contacted or received messages from weatherby3cycling through eBay's messaging system. This account was recently found to have been accessed by an unauthorized third party, who may have used the account in an attempt to defraud other members. We've taken action to restore this account to the original owner, but wanted to let you know to be suspicious of any communication you may have received from them. Nothing is wrong with your account at this time this message is just being sent as a precaution. If you have received any messages
63
from weatherby3cycling that appears suspicious, please feel free to forward them to us at spoof@ebay.com for review.
Warning
Learn the procedures of say eBay, pay attention and verify everything before you send your money. I looked up mail2pal.com in Whois.com and the owner was not related to PayPal TIP: When PayPal sends an email to you, it is addressed to PayPal emails are from service@paypal.com, service@intl.paypay.com, or sendmail@paypal.com
64
Even links that go to real-looking pages can be fake. Never click a link in a suspicious email. Sign in through the usual process. If you suspect an email is fake, please forward it to us at spoof@ebay.com. You can learn more about recognizing and dealing with spoof emails. Need more help? Contact us directly using the customer support options on the right side of the page.
SIGNAL SELLERS
It seems like a new company springs up every day that has the signal service to beat all signal services. They profess to be able to sell you information on which trades you should make. These signal sellers usually charge a daily /weekly /monthly fee for their service and usually do not offer anything that will help improve your trading. There is no such thing as having a magic key to the market and if there were, why would you sell it?
MIRACLE SOFTWARE
There is no software that will figure out the Forex market for you. However, a quick Google search will turn up plenty of software sellers that say otherwise. Some companies out there are selling their special packages for upwards of $5,000 and many times it turns out to be something that you can find on the Internet free. It is generally not advisable to buy any type of Forex software that will tell you which trades to make. Popular Forex Scams It is an unfortunate reality...the number of Forex scams is increasing every year, mostly due to the Forex market being under-regulated when compared to the other financial markets like the stock market. Many "snake oil" scammers prey mainly on the gullible that have not done their research and are desperate for a "get rich quick" solution. They tell you to join their services and cajole you with overthe-moon promises such as making thousands of dollars with little capital to invest and no work. They even show you fraudulent but professional looking screenshots of past trades highlighting the profits made and can seem very convincing. Of course not all the companies that provide trade signals are scams, but from personal experience only a third of the service providers are honest and profitable.
65
66
If you have your own website or blog, you MUST promote it to achieve visitors and more importantly sales. Visit our site today and learn exactly how you can best promote your website using methods that have been proven to work for millions. Buzzle
67
on at least one mass-mailing list, not to mention guaranteed to be given abundant similar opportunities with more advanced scams in the future.
WHAT TO DO IF YOU HAVE RESPONDED TO A PHISHING SCAM? Report The Incident To The Proper Authorities:
If you have given out your credit card information, contact your credit company right away. The sooner a company knows your account may have been compromised, the easier it will be for them to help protect you. Contact the company that you believe was forged. Remember to contact the organization directly, not through the email message you received. Or call the organization and speak to a customer service representative.
68
consumers into paying to view content on their web site. Often these sites purport to be free and advertise that no credit card is needed. They then prompt the user to download a "viewer" or "dialer" to allow them to view the content. Once the program is downloaded, it disconnects the computer from the Internet and proceeds to dial an international long distance or premium rate number, charging anything up to US$7-8 per minute. An international block is recommended to prevent this, but in the U.S. and Canada, calls to the Caribbean (except Haiti) can be dialed with a "1" and a three-digit area code, so such numbers, as well as "10-10 dial-round" phone company prefixes, can circumvent an international block. One example is www4.bux.to
PUMP-AND-DUMP SCHEMES
False and/or fraudulent information is disseminated in chat rooms, forums, Internet boards and via email (spamming), with the purpose of causing a dramatic price increase in thinly traded stocks or stocks of shell companies (the "pump"). As soon as the price reaches a certain level, criminals immediately sell off their holdings of those stocks (the "dump"), realizing substantial profits before the stock price falls back to its usual low level. Any buyers of the stock who are unaware of the fraud become victims once the price falls. When they realize the fraud, it is too late to sell. They lost a high percentage of their money. Even if the stock value does increase, the stocks may be hard to sell because of lack of interested buyers, leaving the shareholder with the shares for a far longer term than desired.
69
If you want to invest wisely and avoid frauds, you must get the facts.
The types of investment fraud seen online mirror the frauds perpetrated over the phone or through the mail. Consider all offers with skepticism. Do not use your credit card number and CVV number to buy products from online lesser-known merchants.
70
matrices and 33 matrices. There are matrices of unlimited width and matrices that feed into other matrices. In fact, there are as many combinations of matrices as there are ways you can put people into a matrix. You can create almost any type of pay plan with a matrix and there are many, many kinds of plans. There is nothing dishonest about this arrangement, in fact it is one of the few plans that actually pays out less than it brings in, which makes it sustainable. This is good for you and good for the program owner since it means that theoretically the matrix can continue forever. Matrix plans are extremely flexible which are why there are so many variations on the matrix theme. Because you can create almost any kind of pay plan with a matrix they can be created good, no so good and even downright bad by those who let greed overcome them. The pay plans of matrices can be as different as night and day. But, the matrix plans do all have one thing in common. They all rely on the statement If everyone does the same thing. Ask yourself when is the last time you remember that everyone did the same thing. I think youll come up with the same answer that I did Never. So, there are some things you need to know about matrix programs before you join one. The first thing is how things work when everyone does the same thing and the other is how to tell a good matrix from a bad matrix.
71
The difference is that the people who make money in matrix plans know that everyone wont do the same thing and that it takes a huge amount of time and effort to fill a matrix and keep it filled. Those who lose money in matrix pay plans are the majority of people who sign up and then think that someone else will fill up their matrix because others will do the same thing they did and there will be enough spillover to go around. As youve seen it just doesnt work that way. If you dont want to be one of the people who have lost money in a program with a matrix pay plan then always remember that the only way you will be successful with any program is to put a lot of work into it. There is no such thing as a lazy mans way to get rich and dont expect that everyone will do the same thing. The only way to become successful at anything is through hard work and effort. Dont expect others to do your work for you because they wont. Period. If you do get into a matrix and there is someone else who is working as hard as you in the matrix then that is just icing on your cake. MatrixSchemeScam
72
make them the largest Internet Company and in an effort make sure that AOL remains the most widely used program, Intel and AOL are running an email beta test. When you forward this email to friends, Intel can and will track it (if you are a Microsoft Windows user) for a two week time period. For every person that you forward this email to, Microsoft will pay you $203.15. For every person that you sent it to that forwards it on, Microsoft will pay you $156.29 and for every third person that receives it, you will be paid $17.65. Within two weeks, Intel will contact you for your address and then send you a check. I thought this was a scam myself, but a friend of my good friend's Aunt Patricia, who works at Intel, actually got a check of $4,543.23 by forwarding this email. Try it; what have you got to lose????
Example
Dear Sir/Madam, XX is a small scale company in XX. We supply XXX to clients in some countries. We have reached big sales volume in the Europe as a starter, and now we are trying to penetrate the US/Canada market. Quite soon we will open representative offices or authorized sales centers in the US and therefore we are currently looking for people who will assist us in establishing a new distribution network there. The fact is that despite the US market is new for us we already have regular clients also speaks for itself. The international money transfer tax for legal entities (companies) in XX country is 25%, whereas for the individual it is only 7%. There is no sense for us to work this way, while tax for international money transfer made by a private individual is 7%. That is why we need you! We need agents to receive payment for products in money orders, check or bank wire transfers) and to resend the money to us via Money Gram or Western Union Money Transfer. This way we will save money because of tax decreasing. JOB DESCRIPTION? Receive payment from Clients Cash Payments at your Bank Deduct 10%, which will be your percentage/pay on Payment processed. Forward balance after deduction of percentage/pay to any of the offices you will be contacted to send payment to (Payments are to be forwarded either by Money Gram or Western Union Money Transfer). How Much Will You Earn? 10% from each operation! For instance: If you receive 7000 USD via cheques or money orders on our behalf. You will cash the payment and keep $700 (10% from $7000) for yourself! At the beginning your commission will equal 10%, though later it will increase up to 15%!
73
Advantages: You do not have to go out as you will work as an independent contractor right from your home office. Your job is absolutely legal. You can earn up to $30004000 monthly depending on time you will spend for this job. You do not need any capital to start. You can do the Work easily without leaving or affecting your present Job. The employees who make efforts and work hard have a strong possibility to become managers. Anyway our employee never leaves us. MAIN Requirements: 18 years or older legally capable responsible ready to work 24 hours per week, with PC knowledge email and Internet experience (minimal) and please be informed that everything is absolutely legal. If you are interested in our offer, please reply to the following email address: XX@XXXXX with your; (1) Your full names: (2) Contact address: (3) Tele/cell numbers: (4) Occupation: (5) Age: (6) Sex: Thanks for your anticipated action. And we hope to hear back from you soon.
74
6.28 PHARMING
Pharming is the exploitation of vulnerability in the DNS server software that allows a hacker to acquire the domain name for a site, and to redirect that website's traffic to another web site. DNS servers are the machines responsible for resolving Internet names into their real addresses - the "signposts" of the Internet. If the web site receiving the traffic is a fake web site, such as a copy of a bank's website, it can be used to "phish" or steal a computer user's passwords, PIN or account number. Note that this is only possible when the original site was not SSL protected, or when the user is ignoring warnings about invalid server certificates. For example, in January 2005, the domain name for a large New York ISP, Panix, was hijacked to a site in Australia. In 2004 a German teenager hijacked the eBay.de domain name. Secure email provider Hushmail was also caught by this attack on 24th of April 2005 when the attacker rang up the domain registrar and gained enough information to redirect users to a defaced webpage.
6.29 PHISHING
"Phishing" is the act of attempting to fraudulently acquire sensitive information, such as passwords and credit card details, by masquerading as a trustworthy person or business with a real need for such information in a seemingly official electronic notification or message (most often an email, or an instant message). It is a form of social engineering attack. The term was coined in the mid-1990s by crackers attempting to steal AOL accounts. An attacker would pose as an AOL staff member and send an instant message to a potential victim. The message would ask the victim to reveal his or her password, for instance to "verify your account" or to "confirm billing information". Once the victim gave over the password, the attacker could access the victim's account and use it for criminal purposes, such as spamming. Phishing has been widely used by fraudsters using spam messages masquerading as large banks (Citibank, Bank of America) or PayPal. These fraudsters can copy the code and graphics from legitimate websites and use them on their own sites to create legitimate looking scam web pages. They can also link to the graphics on the legitimate sites to use on their own scam site. These pages are so well done that most people cannot tell that they have navigated to a scam site.
75
Fraudsters will also put the text of a link to a legitimate site in an email but use the source code to links to own fake site. This can be revealed by using the "view source" feature in the email application to look at the destination of the link or putting the cursor over the link and looking at the code in the status bar of the browser. Although many people don't fall for it, the small percentage of people that do fall for it, multiplied by the sheer numbers of spam messages sent, presents the fraudster with a substantial incentive to keep doing it. Anti-phishing technologies are now available. In the field of computer security, phishing is the criminally fraudulent process of attempting to acquire sensitive information such as usernames, passwords and credit card details by masquerading as a trustworthy entity in an electronic communication. Communications purporting to be from popular social web sites, auction sites, online payment processors or IT administrators are commonly used to lure the unsuspecting public. Phishing is typically carried out by email or instant messaging and it often directs users to enter details at a fake website whose look and feel are almost identical to the legitimate one. Even when using server authentication, it may require tremendous skill to detect that the website is fake. Phishing is an example of social engineering techniques used to fool users and exploits the poor usability of current web security technologies. Attempts to deal with the growing number of reported phishing incidents include legislation, user training, public awareness, and technical security measures. Almost half of phishing thefts in 2006 were committed by groups operating through the Russian Business Network based in St. Petersburg.
PHISHING TECHNIQUES
People have a built-in reaction to things that seem important. Subjects lines worded to arouse anxiety usually prompt immediate action. An email with the subject: "to restore access to your bank account ..." will usually get instant attention and prompt most people to click to read what happened. Everyone can help educate the public by encouraging safe practices, and by avoiding dangerous ones. Unfortunately, even well-known players are known to incite users to hazardous behavior, e.g. by requesting their users to reveal their passwords for third party services, such as email. Wikipedia
PHISHING EXAMPLE
Reply |Donald Loan Investment Company Show details 6:37 PM (11 hours ago) tolic@mail2world.com to (Empty) date Wed, Nov 4, 2009 at 6:37 PM subject Loan Offer reply-
TIP. GMAIL Warning: This message may not be from who it claims to be. Beware of following any links in it or of providing the sender with any personal information. Learn more ATTN: (Empty)
76
My names are KLARK DONALD; I am a certified loan lender. I offer secured and unsecured loans to individuals and companies at low interest rate. I offer long and short-term loans. My firm has recorded many breakthroughs in the provision of first class financial services to our clients especially in the area of Loan syndication and capital provision for individuals and companies. In general, we offer mortgages, home loans, car loans, hotel loans, commercial loans, construction loans, start-up- working capital loans, business loans and bad credit loans, etc., at 0.5% interest rate. We would love to fund projects at hand and offer personal loans as well to you, your firm/partners and clients. We offer the right solution to your financial needs. We stand apart from other lenders because we believe in customer service and we stay with you until you get the results you want. We are a group of energetic and experienced loan professionals with through knowledge of financial markets. We have many partners in real estate; banking and technology fields that can assist obtain financing. Almost all of our businesses are through referrals by satisfied and repeat customers. We have brought ailing industries back to life and we back good business ideas by providing funds for their upstart. We have a network of Investors that <DIV> are willing to provide funds of whatever amount discreetly to individuals and organizations to start business and operations. As the leading provider of Commercial, Business and personal loans to individuals and corporations nationwide, we offer the right kind of financing in less amount of time it will take with traditional lenders. In our bid to be useful to you, Funds (Loan) will be electronically wired into your State account, which will be provided by you. Interested Persons should fill out the Application Form below. Application Form: Donald Loan Investment Company
77
people are still susceptible to psychological trickery. And although the phone phish is still alive and well, the phishing we really have to watch out for these days takes place over the Web. THE EMAIL PHISH The most common kind of phish today is carried out by email. A message arrives in your inbox cautioning you about a security breach in your financial service provider's system, or maybe just to tell you that your account is about to be suspended due to lack of activity. The message asks that you log in to the website immediately to change your password as a precautionary measure. Click the link; and you will be directed to a fake website that looks identical to the official bank's website. The moment you key in your "current" username and password, the criminals behind the scam will have all they need to clean out your bank account. And unless you log on to the real website within the next few minutes and change your password again, that is precisely what they will do. Most banks are well aware of the risks of email phishing. Nonetheless, you can help stem the menace by forwarding any email that you receive to your bank's customer service center. This will allow them to investigate the origin of the email and (hopefully) take action against the perpetrators.
78
According to the most recent version of Microsofts Security Intelligence Report, more than 97 percent of email messages sent over the Internet are unwanted, have malicious attachments, are phishing attacks, or are spam. Adapted below are the companys recommendations on how to avoid getting caught by the phishers, and what to do if your online identity is compromised by thieves?
79
It's really quite a clever scam in that the con artist is actually referring to the contest as "Own0" -- the extension at the end of the fake AlertPay URL (what appears after "alertpay"). This subtle move is just enough to convince people that the URL is legitimate when, again, it is NOT. It's also important to note that the alleged "AlertPay Facebook assistant's" post is not well-written. Although we are far from the best writers in the world (there can only be one Hemingway), but we do pay much attention to spelling, format and grammar.
How It Works
If you click on this link, it will whisk you away to a FAKE AlertPay login page and you will be prompted to enter your login credentials. It will appear that the page is reloading and will actually redirect you back to the original login page. Why the reloading? Probably to confuse you! After entering your credentials and clicking on the login button, the scammer is actually recording the information you entered into the "email" and "Password" fields. Once they capture those details, they can come straight to our website and gain access to your account to do what they please. You do not want this, so do not click on the link. If it does not say "AlertPay" or "AlertPay.com/ [name of one of our sub-pages], avoid clicking on it at all costs Furthermore, our Security team is highly skilled in the art of busting people like this, but this is no excuse to be complacent. Your knowledge of these things is ultimately your responsibility so please do a little homework on the types of scams that can (and do) take place regularly in the online world. We are not trying to scare you all, but we believe we need to be blunt and just a little frightening to communicate the gravity of these types of scams. AlertPay
80
81
When that period is reaches the Cashout tab never comes. Online contact and emails are never replied to unless they just want your money. I did get a reply form one company that when I advised them that I wanted to upgrade, but that I have found their name on a Scam List; they came back and said they were not a scam and that they pay according to the terms of their site. Often your site; will never be upgraded even though you have already paid for an upgrade; once again, contact and emails will not be answered. Site offering computers, cameras, etc. are Scams and never send the merchandize. Sites offer 100% refund or guaranties if the site is not upgraded within a certain period are Scams. Most sites can be upgraded in minutes once the payment is accepted, if you think about it. Some sites, when a payment request is made; will respond back to you that they have changed their system, and that if you fund an additional fee called a trade fee of .1 to 1 percent they will send your money immediately. That is another Scam. If you pay for an upgrade, keep your receipts and other details, in order to claim or file a dispute with the payment gateway: PayPal, Alert Pay, etc. I believe this is why many sites can no longer do business with PayPal because of the complaints. Sites that monitors these types of sites, will advise you that any site that offers you more than $1.00 to read and email is a scam. I would change that and say forget any site that offers you more than $0.50 cents. These same reporting sites also advise that if the sites dont offer you a Forum to communicate with them is probably a Scam. I would change to that because even if they have a Forum, they may not allow you to entry a reply or complaint as discussed elsewhere herein. Another group of Scam sites that I had offered Live Messenger, but you couldnt access it. I guess the owner wanted his sites to look more legitimate. These same sites also changed the contract them categories to include a category for nonpayment; however, no replies have ever been received by me for such requests
82
internationally to Lagos, Nigeria. Could you get back to me with your website so as to forward you the list of my requirements as soon as possible? Regards, Most likely, a few weeks or months after the merchant ships and charges the Nigerian credit card, he/she will be hit with a chargeback from the credit card processor and lose all the money.
6.33 RE-SHIPPERS
Re-shipping scams trick individuals or small businesses into shipping goods to countries with weak legal systems. The goods are generally paid for with stolen or fake credit cards.
83
TIP: These Types Of Communications Usually Have Many Grammar And Spelling Mistakes. (Most have been corrected here for ease of reading and understanding)
84
in the industry as FFA's (free for alls), classifieds, 404's (errors), not founds (pages which no longer exist), or foreign language sites. It is well known amongst online marketing experts, there are less than 12 working search engines and directories on the Internet today. Some companies take advantage of the uninitiated website owner promising top rankings for $29.95 or something similar. Beware of such promises - if it sounds too good to be true, it usually is. That $29.95 will typically buy an automated submission to 10,000 "engines" that nobody ever visits or possibly even result in a domain ban for over submitting. Once the $29.95 campaign is finished, so is your domain. There is no such thing as #1 ranking in all search engines or "it only takes 2 weeks and $29.95". Getting top search engine ranking doesn't "just happen". SEO fraud is obvious when they guarantee rankings. No one can guarantee rankings. Some people are better at SEO than others, but no one has direct control over how search engines rank (unless you want to pay for top listing).
CONTENT
Half of SEO is content. If you want a higher ranking, you need content that people want to read. If your SEO firm doesnt provide this, and they wont find the proper keywords, they really arent SEOs. SEO is an ongoing process. No one can SEO your website within a month, and expect it to receive high rankings. Dont be fooled. High ranking is not easy, and onetime fees are a waste of money unless you or the SEO Company plans to make weekly changes. Beware Of Fraud!
85
Affordable Search Engine Optimization Service.com guarantees it will make the strongest effort to achieve top search engine placement for your chosen targeted keyword phrases on the top five search engines: Google, Yahoo, MSN, AOL and Ask.com. Our primary goal is to increase your sales, not just rankings and traffic. We know that our success as a marketing agency depends on your success. In order to keep you as a satisfied client we will do everything within our control and within search engine guidelines to make your online marketing efforts a success. Click this link for more information about SEOs AffordableSEO
6.35 SMISHING
This brings us to 2010s biggest threat: smishing. Online users usually know the term phishing, which refers to email-related scams. The term has been around since the original Nigerian charity donation warnings. email hosts have long since armed themselves with spam security, such as filters, email address blocking, and virus scans to attachments. Its becoming harder and harder to scam through emails alone. Thats where smishing comes in. It stands for SMS text messages. Thats right: viruses can also be downloaded onto cell phones. With many consumers now equipped with Blackberries and smart phones, its a whole new world. Hackers can set up an automated dialing system, which will obtain phone numbers from anywhere in a specific region or area code. The dialing system can also call these numbers with an automated message, another type of scam now labeled vishing, or voice message phishing.They often work the same way as regular email scams: the victim receives a call or text message claiming the victim must renew their bank card or make some sort of deposit. The messages then ask that personal information be keyed into the phone, claiming to be from a telephone banking service. Phone numbers can also be obtained from previous victims contact lists, so phone scams can grow exponentially. Worse, numbers can be obtained from the banks or credit unions themselves, once victims give the hackers access by handing over the required personal information. SamTitlston SEO
6.36 SPOOFING
E-mail spoofing is the forgery of an e-mail header so that the message appears to have originated from someone or somewhere other than the actual source. Distributors of spam often use spoofing in an attempt to get recipients to open, and possibly even respond to, their solicitations. Spoofing can be used legitimately. Classic examples of senders who might prefer to disguise the source of the e-mail include a sender reporting mistreatment by a spouse to a welfare agency or a "whistle-blower" who fears retaliation. However, spoofing anyone other than yourself is illegal in some jurisdictions. TechTarget
86
THERE WAS ONCE A TIME when the only kind of virus one had to worry about was the kind that landed in our email inbox with a subject line like "I Love You" or "Britney". But email anti-virus software and firewalls have come a long way since then. That said; the threat of malware malicious software nonetheless remains a clear and present danger. While email viruses are a thing of yesteryear for most end users, the new vector of attack is the Web itself: worms and Trojans that download themselves to users' hard-drives before wreaking havoc on their computer networks. Research by www.webroot.com earlier this year found that 85% of all new malware originates from the Web, but that only 15% of organizations actually have any Web security measures in place. One may ask how this malware spreads without the use of email systems, and the answer is simple: social networking. These are the top three threats that your organization should be aware of.
HEADLINE HOOKING
Headline hooks are essentially short bits of juicy gossip that are propagated via social networks like Twitter and Facebook, They are used as bait to drive users to fake virus-scan web pages. The headlines might tout the resurrection of Michael Jackson or the death of the pope, but the result is the same: when users land on the fake virus-scan pages, they are told that they have been duped and infected with a Trojan. They are then asked to run Windows PC Defender to clear the infection.
87
Everyone is excited about Googles own social networking site, Google+. The only way you can sample the new service is by invite only. Im sure you can see whats coming now. Thats right scammers have discovered a way to create fake Google+ invitations. They come through email, even Facebook. Heres what to do in both cases dont click on any links because they will take you somewhere you dont want to go. With email, make sure to check the identity of the person sending the email. If you dont know the recipient, dont open or click on any links. If it appears to be from a friend, email them and ask if they sent you an invitation to the new service. With Facebook, if you may receive a message that appears to be an invitation to Google+. You will be asked to allow third-party access to your account. The safest thing to do is to skip this altogether and deny access to your account since if you grant access, the third party can post on your wall and send messages to your friends. To learn how to disable problematic apps like this, watch this video from Sophos: Other scams to look out for through Facebook include the infamous Koobface worm and Facebook login pages with a URL that differs from www.facebook.com. AlertPay
Internet security, malware and anti-virus developing company Sophos today revealed that a new breed of Facebook Dislike Button trick takes you to a page where a hidden JavaScript code will be installed to your Browser or directly to your system32 folder. Once the JavaScript installed to your computer it sends all the activities of you on your computer to the author.
88
Sophos also mentioned that, so far the damage done by genie tool is unknown, but its my duty to inform to my reader about this malware. Ignore if you receive such message or delete it immediately. Dont forget to report message as Spam.
89
Malicious hackers, also known as "black hats", compromised some accounts and launched a viral scareware campaign in which they used Google's URL shortening service, goo.gl, to hide the true location of the link. They tweet the link along with a text that says "Cool" or something equally nonthreatening. When someone clicks on the shortened link, they are whisked away to an unknown location (thanks to said shortened URL) and scared into downloading and paying for a "Security Shield" program; they are told that their computers have been compromised and the only way they can thwart the problem is to download and pay for the security software. The goal of this scam is to get tweeters to click on the link, download a file and pay for a bogus security program. The problem with this is that it's too easy to click on the link. Why? Because most of the link is hidden from view. Since Twitter only allows tweeters to post a specific number of characters, URL shortening services have popped up to allow people to post their status AND a link without going over the character limit.
SAFETY TIPS
Despite the absence of security tips in the articles we reviewed for this blog, we've come up with a handful to help you stay safe and secure when tweeting and using social media:
90
91
the materials or information that would be needed to make the work-at-home opportunity a potentially viable business. Often, after paying a registration fee, the applicant will be sent advice on how to place ads similar to the one that recruited him in order to recruit others, which is effectively a pyramid scheme. Other types of work at home scams include home assembly kits. The applicant pays a fee for the kit, but after assembling and returning the item, it is rejected as substandard, meaning the applicant is out of pocket for the materials. Similar scams include home-working directories, medical billing, data entry (data entry scam) at home or reading books for money. The latest work at home scam is very elaborate, which includes an entire website dedicated to feigning the existence of a fake organization. Example: Timothy Scott (not his real name) emails to offer a job with the so-called Travis Gilbert Foundation. To lure gullible participants, they offer unrealistically generous salaries for part-time unskilled labor. (If they were real opportunities then naturally such positions would fill quickly without the need to email the offer to thousands of strangers.) The main responsibility of this well-paying job is to be a middleman for "donations" which are intended for victims of natural disaster. In this capacity, it gives the scammer an excuse to ask for bank account numbers (allegedly to deposit "donations" into the victim's account for redistribution) as well as the victim's SSN and DOB (allegedly to fulfill the typical paperwork obligations of a new employer). Once these vital numbers have been disclosed, the criminal uses that information to monitor account balances. On the day that a larger than normal amount appears in the bank account, such as a weekly pay check, for example, then the account is drained. Generally the scammer will feign to be located in a country other than where he is located. Example: Travis Gilbert Foundation's website lists an address in The Netherlands, but the registration of the domain name is in Beijing. In addition, victims in Western countries are targeted by using a non-threatening pseudonym like Timothy Scott, which does not sound so foreign, while the domain name tgilberthome.org is actually registered to Li Xiang.
92
93
EXPERIENCE
Membership has nearly tripled since I joined this site. Note the claimed payouts of over 62 Trillion, and all this with only 2300 emails and 30 banner ads. Payouts of 62,093,832,222.00 divided by 7,608 members give an average payout to each member of $816,000. Not bad it if were true. But it is not, the payout number increases with each request for payment, but no money changes hands, only the tot board changes. Of course, this is not real, but seeing the numbers get so high, it became a game, a diversion, and sort-of addictive (how high can I go). As you will see, this site and others became a part of my Welcome to My USD 1M or More per Day Strategy. On paper, I was making money with this site, lots of it at a time when I was getting nothing from my other sites or advertising efforts. I accumulated a downline of 58 members. Clearly, this was a winner, by all measures, except that No Payments were received.
94
Even with my mentality that if you owe me a million, then 1% or $10,000 would be great, since although I would have like to have received something, but didnt really need the money. However, I have learned that scammers dont give up a dime. There is none of this take a little bit now and I will send the balance later stuff. You have no contact with your downline, only the name and a $2,000 bonus tally. For that matter, the downline could be random generation of name to fill a list to keep you in the game. Since most of these scammers, as I have learned, own several sites, the same downline name probably shows more than one site. The home page says payment will be made via different payment gateways. However, PayPal is now missing from the home page. A new name Liberty Reserve is shown. Liberty Reserve came on strong and became the primary gateway for several other sites and No PayPal.
UPGRADE EXAMPLE
When you upgrade your free membership to a Gold Membership, you will receive the following benefits: Free Referrals (3 x) - Your referral URL will be randomly inserted for surfers visiting the web site without a referral URL. 10,000 PTC Worth $10,000 monthly (?? If each PTC is worth $10,000, Why only $10,000 per month?) 10,000 banner impressions monthly $20,000 solo paid email to all monthly
ADVERTISING
Are you interested in advertising with our company? Below are the different types of advertising services we provide. We offer many options and are confident; you will find one to fit your needs. How it works: Click one of our advertisings from below. If these advertise allow targeting - select your target groups. When you are done you will have the price that you need to pay, calculated. After you have paid for your ad package, please fill out the "Order Form" on the last step to complete the advertisement ordering process. Complete all the information requested on the form then click submit. Once your payment has been confirmed, we will process your order immediately.
ADVERTISEMENTS
A Paid-email to Members of our Program All of the people who are receiving the email have all requested it, thus giving you, the advertiser, and a great selection of interested viewers. 20000 USD solo paid email to all 60 sec (pcash) - $2.00 30 x $20000 solo paid email to all 60 sec (pcash) - $55.00 10 x $20000 solo paid email to all 60 sec (pcash) - $20.00 PAID TO CLICK Banner 468 x 60 Exposures have a unique price per click and will last until the purchased number of clicks has been reached.
95
These are UNIQUE VISITORS as each user may click only ONCE per ad these ads are visible in the members paid2click area. 1,000 PTC Worth $10000 40 sec (pcash) - $0.50 10,000 PTC Worth $10000 40 sec (pcash) - $2.00 100,000 PTC Worth $10000 40 sec (pcash) - $5.00
COST OF ADVERTISING
From the above cost, where is the money? You can buy $ 20, 000 USD solo paid emails to all members, running 60 sec (pcash) - $2.00. If my math is correct $2.00 / 20,000 = .0001 cent. So how can anyone stay in business if each member receives $ 20,000 to read a $.0001 ad?? The fascination continued During my time with this project, I noted that most of the ads and emails were self-promoting or cross promoting between similar sites, probably from the same owner. So where is the revenue?
LIMITATION OF LIABILITY:
pcash.info will not be liable for lost profits, lost business opportunities, or any other indirect, special, punitive, incidental or consequential damages arising out of or related to this Agreement or pcash.info program, even if pcash.info has been advised of the possibility of such damages. Furthermore, pcash.info aggregate liability arising under this Agreement will not exceed the amount of the total fees paid or payable to you under this Agreement. The provisions of this Section survive termination or expiration of the Agreement.
PAYMENTS
Affiliates may earn by receiving paid-emails and visiting the advertiser websites after they have entered their member ID in the area on the website provided by pcash.info. Affiliates may earn by referring new affiliates to the pcash.info program. Affiliates will earn a percentage of advertising revenues collected by pcash.info. Affiliates will be paid via PayPal / eGold. pcash.info will pay affiliates when their balance reaches the minimum payout rate set by pcash.info. Once the member has reached payout they may request payment. Payments will be made within 30 days or a reasonable time after.
96
PAYMENTS/CASH REDEMPTION
Cash redemption for PCash starts at $ 500,000 and is easy to reach (as most sites will claim). The amount of minimum earnings required before you can make a claim will decrease with an upgrade. PCash claims they will send the redemption within 48 hours. For most sites, this payout period can be shortened with the level of an upgrade. So if you want your money faster, you are motivated to upgrade. Also an upgrade will provide you with some x number of free members to help build your downline. TIP. Clearly PCash and other sites are offering a Cash Payment Redemption link which will pay you with x dollars within x hours or days, but forget what the Home Page says. Read the fine print from the Terms which reveals something different.
TERMS
pcash may, at any time, choose to edit, add and/or delete portions of this agreement and impose changes without prior notification of its affiliates Payments will be made within 30 days or a reasonable time after. Tip. Dont confuse the Earnings with Cash Payments. Pcash.info, unlike some other sites, does tell you that you will earn a percentage of revenue, not full cash value. But, as you will see when you do your Due Diligence; nobody will get anything if their daily revenue is only $4.00. Most of these sites seem to confuse the word redemption with a cash payout. Using some of your cash value to place an ad will usually be redeemed within 24-48 hours. Once an upgrade and a payment request has been made, lets say for a 48 hour redemption, many sites then report that your payment will be made within the redemption period once your account is 30, 60 or 90 days old; and not the immediate 48 hours that you thought that you had upgraded for. If you read the Home page, Terms, Upgrade and the Frequently Asked Questions (FAQS), you will typically find many inconsistencies between them. For example, the front page does not mention PayPal anymore, but when you complete the user profile; the only payment methods are PayPal and EGold. Most of these PTR/PTC sites use only PayPal and E-Gold, but it appears that many are now switching to Liberty Reserve. If you contact them online, you will not get a reply, and if you contact them by email, you will not get a reply.
HONEST MEMBERS
I particularly love the Fast Payments for Honest Members What a lie! With the amount of money I earned on the site, I should have been getting $500,000 every 2days. See my earnings of over $ 180,500,000, Amazing isnt it.
MY EARNINGS
You have directly earned: $ 92,600,000.0000 You have earned from your Downline: $ 84,786,000.0000
97
Your account balance after all transactions: $ 3,022,000.0000 When the minimum amount for a payout has been earned; in this case $500,000, you can click the Request Payment link, complete the request and you are greeted by the following message Your message has been sent. We will contact you soon. No messages regarding the payment request were ever received, and its seems that as soon as you request a payment, the Payouts Increase, even though no money has actually changed hands. So is any of this realistic Of course not, but watching your earnings increase and increase by $20,000 can be addictive, especially, if you have not seen earnings on other programs. With this information, it is easy to see, that pcash.info claims to have paid out 62 trillion when it has an estimated value of less than $3,000. Ad revenue is estimated at less than My *USD 1m or More per Day Strategy $4.00 per day. How to pay you $20,000 per ad?
98
99
be an accurate estimate. Studies that examine entrepreneurs who have had training and/or education in entrepreneurial skills consistently show a much higher success rate (as high as 80-90%). While we are here to learn to avoid scams; we are also here to help you succeed. Take your time and see what skills you can improve. Those of you that have joined us, and are already successful online, great, we can use your help. Others, use this section to help determine your needs and to develop your plan of action. With proper planning, learning, mindset and treating your business as a business, you can significantly increase your potential for success. In following sections, we will help you to identify, understand and avoid the Scams. Avoiding Scams will further increase your opportunity for success, but using your resources where they can help you instead of filling the scammers pockets. Business failures are difficult to track because the facts vary with the source and the way the numbers are gathered. For example, we can measure the number of Offline Businesses that start within a year or two and deduct those that do not renew their business license. However, no license is required for an Online Business. While we can document the change in the number of bankruptcies, but just because a business did not renew their license does not mean the business went bankrupt. All we know is that the business may have closed for some reason; wrong business, wrong or obsolete product, timing, lost motivation, divorce and for that matter any reason will do. Online hobbies can be ceased at any time no paper trail.
100
Your capital investment for an online business is much less; but that does not mean or guarantee that you can or will be an overnight success, as others would have you believe. Unlike offline business, you are not so concerned about matters of government regulations, policies and politics, brick and motor location, capitalization, payrolls, etc. As said before, those that have some basic business skills or background, training and an entrepreneur sprit have a much greater chance of success and are better suited for business. Add to that, those that have a plan; i.e., business, financial, and marketing plans have a significantly better chance of success. Offline entrepreneurs may have a passion, interest or idea, a product or service that they feel can be marketed online. Those that start online may also have an idea, product or service, but the majorities are just looking for extra money. They most likely become an affiliate of someone elses product or service. A fulltime commitment is better that a part-time effort for any business. Regardless of the type business, you undertake, you should understand your suitability to go into that business, assess your strengths and weaknesses, what are you needs, and what is your understanding of the risks. The Scammers will tell you, you do not need money, or not that much, and that they will do everything or most of the work for you. Just sit back and collect your money. If you believe that, then you may as well stop reading further. In business, we must understand ourselves, what is involved. Some of you want to be your own boss, or you have already started your business, some of you are retired, or work at home moms, whether online or offline. Maybe some you want a change of career or just want to supplement your income. Look at the following and be honest with yourself. Many items are applicable to the offline business, but some for both. Consider them, i.e. what can you do, what do you know, what are your interests, can you do it online?
101
Reward Orientation: Desire to achieve, work hard and take responsibility, but also want to be rewarded handsomely for their efforts; rewards can be in forms other than money, such as recognition and respect. Optimism: Live by the philosophy that this is the best of times, and that anything is possible. Orientation to Excellence: Often desire to achieve something outstanding of which they can be proud Organization: Are good at bringing together the components (including people) of a venture. Profit Orientation: Want to make a profit; but the profit serves primarily as a meter to gauge their success and achievement. John G Burch Business Horizons, 1986
CHALLENGES OF AN ENTREPRENEUR
Uncertainty of Income Cash Flow Management Risk of Losing Your Entire Investment Long Hours and Hard Work Lower Quality Of Life Until the Business Gets Established High Levels of Stress, In-laws (Now or Future) Complete Responsibility Are You Easily Discouraged? Do you feel personally stressed and feel threatened under pressure Constantly stake personal reputation and tend to give guarantees. Be hard yet more flexible and more streetwise than a corporate executive. Be good at multitasking able to do everything. Intermittent, unpredictable income Self-Discipline, Patience, Listening, reading Personal technological competence, Internet The buck stops with you! Think of new ideas and deliver them to the market and make a profit. Provide leadership to his team against established competition with minimal resources. Raise finance without a track record, collateral or internal experts. Pay staff first; you get paid when it is prudent to do so. Be prepared to lose everything if things go wrong
ENTREPRENEURSHIP OPPORTUNITIES
Create your own destiny Do what you enjoy
102
Fulfill your vision, Doing and to have ambition and fun at it Passion Contribute to society To be recognized for your efforts Make a difference Reap unlimited profits Reach your full potential
103
104
The key is to be true to yourself, to be true to the very best that is in you, and to live your life consistent with your highest values and aspirations. Brian Tracy
8.8 COMMITMENT
A pledge to do, an obligation Something pledged, especially an engagement by contract involving financial obligation The state of being bound emotionally or intellectually to a course of action or to another person or persons What one has, one ought to use: and whatever he does he should do with all his might Marcus T. Cicero A person with half volition goes backwards and forwards, but makes no progress on even the smoothest of roads - Thomas Carlyle
105
Your effective decisions are limited by your knowledge and understanding of business
106
Spam Licensing Record Keeping - Track Your Sites, Ids and Passwords Financing Capital/ Other Expenditures - Desk, Computer, High Speed Internet Provider, Printer, Supplies Technology - Keep Your Computer Running Cash Flow Management - Some Sites Charge A Monthly Fee Competition - Big Boy Affiliate Marketing Taxes Employees Benefits/Perks Suppliers - Affiliate Products, Shipping, Payment, Legitimate Health Community - Online Communities and Groups Social/Ethical Issues - Spam, Social Networking Scams TIP: If you have taken the time to go through the preceding and have been fair and honest with yourself; then take the time to make a Plan of Action for Your Personal Development. Take little steps, but DO take the first one.
107
New or affiliate
How are you going to market, where, how many times, what is budget, measure results, Marketing Plan
Financial Plan
108
The forgoing is another example of various online resources to help you, free. However, if you do not take the time to make and use a plan, at least prepare a schedule of things to do, and allocate the time for each task. Big jobs can be broken into daily tasks.
109
110
Online should not be much different: What is your passion? Then Google find product or services that help fulfill your passion. Pick perhaps 3 or 4 and do your own due diligence, Join 1 or 2 and take responsible for your decision
ONLINE
This in itself creates a full range of online service providers; designers, programmers, graphic designers, website developers, online marketing specialists, payment gateways, hosting and copy writers. eCommerce provides a fairly cheap way of gaining exposure for your product. Just for fun; a search for Online Shopping sites = 13,000,000, while a search for Online Shopping Websites = 48,800,000 so go ahead, get your own shopping site. Of course you may have a niche product such as one successful eBay marketer that sells only Big Mens Clothes. Perhaps you are a writer; you can take advantage and ease of being a self-publisher. There is a great demand for Informational sites. Blogs, forums, online news, e-magazines, almost anything that where you are a specialist. Freelancing is an option to consider. Even songwriters introduce themselves and their music online. Many of these free writers, bloggers, etc. are all trying to steer you to a favorite of theirs, so free is free, but do your homework. Therefore, there are many different types of successful online businesses. For almost any product, or service that is offered, there are types of online businesses. Many of these types of online business are very successful. To succeed in any business, you must have a good business plan, be hard working, offer a good product at a fair price, and offer great customer service. WSI Corporate
111
I have a passion for eBusiness (hence this site). The reason I wanted to start this guide was to (yes, hopefully make a little extra money) but also to help other people start web businesses of their own. Not necessarily to become millionaires or retire at the age of 30 or any of that, but to maybe help make ends meet, or maybe provide a little extra cash so they can save for their daughter's education, or provide a little bit of passive income so they can retire a few years early. Not everybody who starts an Internet business is going to be able to give up their day job and to do it full time like I do. However, I am certain most of you can; at the very least, create some incremental revenue for yourselves. When I meet people and tell them what I do, they say, almost without exception, something like "That sounds great, I wish I could do something like that." I tell them that they can, anybody can, and you just have to be willing to try it. When I mention this people; generally they say something like, "But I wouldn't even know where to start." Therefore, I put this guide together so that when people say that, I can just hand them a business card with this web address on it and say, "Now you do" ThreeBusGuide Sure you may have an interest or an idea, but you dont have the resources to develop them online. You can always try the same avenues of getting money as the off liners; friend, family, relative, partners, banker, etc. But online, most just turn to the net to supplement their income or to make a quick buck as promised by the scammers. Unfortunately, they lose to the first scam the sounds like it solves their problem It has little to do with their real interest; their interest is making money to pay bills, send the children to college, and improve their lifestyle and retirement. TIP: You are more likely to succeed in a business that you have some interest in and are passionate about. You are less likely to become a victim of a scam.
112
minimal amount of time and effort. If you have an Internet connection, you can get started on the road to having the Internet pay for your mortgage, car payment, kids' college tuition, or even that special vacation you have wanted. Now, do not worry that you have to be a tech whiz to start a business online-I am a complete techno-dunce. A perfect part-time business would have to be very easy to start, require little time and money and no technical expertise, be easy to maintain with just a few hours a week and have a proven track record with a high probability of success. There is actually one other important criteria--it has to be perfect for you! Experience has taught me that it is different strokes for different folks, and there is no "one size fits all" perfect business. You are much more likely to be successful if you do something you find fun and interesting. With that in mind, here are five of the best ways to make extra cash moonlighting on the Internet:
AFFILIATE MARKETING
This may possibly be the absolute laziest way to make money because it doesn't require you to have a product, make a sale or ever have any interaction with customers. This is essentially a "referral" business, or as one of my book contributors likes to call it, "passionate recommendations." Basically, you can get paid a referral commission just for sending people to sites (or vendors) that are set up to pay affiliate fees once a sale is made. The vendor does all the selling, fulfills the purchase and handles any customer service issues--and you just collect your check.not bad! Some people choose affiliates based on whom or what is paying the highest commissions and that certainly is a viable option. Most people opt to choose products or goods they are passionate about so that the process is much more fun and engaging. Insurance and credit card companies pay high commissions for referrals that convert to customers ($40 to $150 and up), but the competition is fierce. It may pay well, but is this something you'll enjoy doing for the long haul? Alternatively, you could take a look at your hobbies and other things you enjoy and see which affiliate programs are good matches. As always, do your research to verify the viability of your market. A good place to look for ideas (and downloadable products just waiting for an affiliate) is ClickBank.com.
BLOGGING
This business is best suited for folks who enjoy communicating about a particular subject. Think of blogs as journals of sorts. Although you can have a personal blog, writing about a particular topic will have a higher chance for financial success. The range of topics is virtually endless--photography, sports cars, parenting, dieting, star gazing, the latest gadgets, Hollywood gossip--you name it, as there are blogs on just about everything you can imagine. Don't worry about competition. Folks who read one blog are apt to read others on a topic they're passionate about, as long as you have something interesting to say. Once your blog starts getting traffic, you can make money passively with things like AdSense (Google's ad revenue sharing plan) or actively by doing a little bit of affiliate marketing.
113
You can see both types of moneymaking strategies at SparkleCat.com, which is a blog about a person's cat. What makes it interesting is that it's written from the cat's perspective and often refers to her "human." At the top of the page are Google AdSense ads, and sprinkled throughout are suggestions for things like cat furniture and premium cat food, which are tied to an affiliate program. Pretty cool, no?
EBAY
One of the largest online marketplaces makes it a piece of cake to get your own business going. You can open an account and start making money within hours on eBay! While I dislike that whole "sell your garbage on eBay" thing, there is some validity to it as many people get their start on eBay by selling items from their garage or attic that pre-eBay would have been thrown out. This approach is fine, but where is the business once you run out of those items? If you want to create an eBay business that doesn't require tons of time and effort, you need to leverage products that can be sold over and over again. This is one of the reasons I'm not a fan of the "eBay seller for these" kinds of opportunities, where you sell things on eBay for other people. You get access to stuff people want to sell, but because each item is unique you have to work to list each and every one. There's no leverage there! Take a look at some of the largest eBay Power Sellers and notice how they specialize in very specific products (iPods, cell phones, dog grooming kits, etc.). This allows them to leverage their efforts. A listing is created once, and money is collected over and over again. Unlike information marketing, this business requires the handling of physical goods, but even that can be automated, so it shouldn't prevent you from considering this idea.
INFORMATION MARKETING
We're in the information age, and the Internet provides you with the ideal medium to exchange knowhow for money. Do you know the best fishing holes? How to play guitar? The secrets to a successful marriage? A recipe for moist and delicious brownies? A trick for saving gas? Think about your career, your hobbies and your interests. Virtually anything you know can be turned into extra cash. And don't worry if you think you're not an expert--as long as you know more than the average person on the topic, that information is valuable. However, if you do not believe you know anything those others would pay for (highly unlikely); you can take someone else's know-how and make money that way! It could be as easy as interviewing a veterinarian to help you create a dog-training product. Ninety-two percent of people go online looking for information, and you could be one of the many people cashing in on selling it.
YAHOO! STORE
This business is very similar to eBay in the sense that it's a monster-sized marketplace but more similar to a store in the true sense of the word. Think having your own retail outlet but without the hassles of rent, employees, utilities and all the other expenses of a traditional brick-and-mortar store. The neat thing is that it can be as hands-on or as hands-off as you want it to be because of companies called drop-shippers, which can do most of the work for you. In fact, you don't even pay for the inventory until
114
you make a sale. How cool is that? Most people think the hard part of this business is creating your virtual store, but nothing could be further from the truth. Yahoo! has made the templates and wizards so easy that, dare I say, even a caveman can do it! The best way to ensure your success is to do your homework and research what products people most want to buy. You need to find a niche. Once again, start with things you enjoy. Let's say you love fishing. What products do fishing folks want to buy most? (Or get even more specific, like, what are bass fishermen looking to buy?) Then the task is to find the right source of those products so you can carry them in your Yahoo! Store. In most cases, you'll be able to pull pictures and product descriptions directly from your sources and plug them right into your store. Yanik Silver
115
organizations. The #1 money earner (my upline) at that time was making about $100,000 each month (I saw his checks with my own eyes). He had 1,000 distributors and 10,000 customers in his organization. The leader of my former team (in the service company) was making about $30,000 each month. This guy had at LEAST 10,000 distributors and tens of thousands of customers. My jaw dropped when I realized this. In my product company, it was easier for me to help others be successful. In the first service company that I was in, you'd never make any decent money unless you were able to recruit large numbers of people into your business. So what about people who weren't that good at recruiting? In my first product company, I noticed that each time I or one of my distributors got an additional customer that equated in several additional dollars in RESIDUAL income. In that company, I was making $100 per month in residuals with just 16 customers. In my service company, I had 20 customers and made about $5 in residual each month. In my service company, your residual never amounted to much unless you had a huge organization that was at least 6 levels deep. The problem with this is that most people will NEVER see 6 levels in their organization. And in home-based business it is critical that people make enough money to keep them in the game until they either "wake up" and start producing, or eventually recruit a superstar. There was a huge difference in the attrition rate. Because almost nobody made CONSISTENT money in my service company (recruiting bonuses don't count. These are promotional. In network marketing, the only income that REALLY matters for longevity is a residual check from real customers); the attrition rate was the typical 90% that exists in MLM. In my product company, that attrition rate was much closer to 50%-60% percent. The people that I brought in made more money. This was what struck me the most. Due to where I was mentally at that time, I never had much success in that product company due to my own unwillingness. However, I learned THE most valuable lessons of my entire network marketing career. One of them was that I noticed was that due to the compensation plan, EVERY person that I ever brought in made money--that was not the case with my service company. Because of this, even when people quit, none of them could say that they had not made money and this helped to not put a strain on my friendships as people decided not to do the business anymore. Now, please understand that this is NOT a cheerleading article for product companies vs. service companies! I am comparing two very specific experiences from two companies that I have personally done business with. If you were to choose a random service company and a random product company and compare the two, you would find a great deal of variation as far as which one was "better"-and that is my point.
116
There is no "hard and fast rule" of "which is better" when it comes to the service companies vs. product companies debate. As a matter of fact, as soon as I hear anyone, and I do mean ANYONE going in the direction of making the argument one way or another I immediately know that I am dealing with an amateur that does not get the bigger picture of the network marketing home-based business world outside of their company. So should you. LawrenceCole
117
The company made no attempt to reconcile the matter; then claim backs the shipment, since no one was there to accept it, etc. Failed. Lost $500. Nobody helped or even read their emails. XXXXXXX Chocolate, similar problems, wanted a US Address, willing to ship to local and reship, lots of workarounds, helpful, but for $1300 I passed. I had already joined, but wasnt made aware of the problem until I tried to upgrade, and then only after I had made the order and they wanted to ship. Most of the better, organized product sites, advise you in advance before your signup that they do not do business here or there. Check the FAQs and Terms. Most products pay better, if you can manage your shipments, etc. For me, I have learned that I prefer to babysit paper as opposed to products. Make sure the company can do business in your country.
AFFILIATE PRODUCTS
Find quality products and services that offer a commission and sell them on your site. Be sure they are relative to your site and if possible try the product out first so you can give a personal recommendation. Personal recommendations can help increase your sales. You can find affiliate products at AffiliateSeek, Clickbank, and AffiliateTips.
118
DONATION BUTTON
You see this more and more often these days. People offer a lot of free resources and content on their sire and ask for donations from the people who utilize this information. You can get the buttons directly from PayPal and place them on your site. To do this, you must provide quality content and value to your visitors so they feel a donation would be appropriate.
DROPSHIP SALES
Dropship means you can sell products without having to ship them or stock them. You find a company that offers drop shipping, sign up with them and start selling their products on your blog. Anytime you get an order, you send it to the main company and they ship the product out to your customer. The customer will think the product came from your store and you get a portion of the profits. You make money simply by taking orders and the dropship company does the rest. Dropship companies will usually require a membership fee, either monthly or annually.
EXCLUSIVE ACCESS
Offer private content, forums, classes, etc. to members only. Charge a monthly or annual fee for this membership. People will pay for valuable information they can't seem to find anywhere else.
GOOGLE ADSENSE
This is not my favorite but it does work well for some people. What this entails is placing numerous ads on your site, chosen by Google. Anytime these ads are clicked on, you will get paid a portion of what the advertiser has paid Google. Google will choose ads that are relevant to your site's contents. So, what this means is that if you sell jewelry Google will place ads on your site to other people who sell jewelry and related products. So, in essence you are sending people to your competitor's sites. Although I do not agree with this, many people claim to make a good chunk of change each month using Google AdSense!
SELL ADVERTISING
Offer advertising space on your blog. You can offer text ads, banner ads and even video and audio ads. You can charge monthly and annual fees to give your customers a better value.
SPONSORED REVIEWS
Companies like Blogvertiser will connect you with advertisers who will pay you to write reviews about their products and services and place them on your site. You will have the option of accepting or declining any deals the advertisers offer. Other sites that offer this service are PayPerPost, SponsoredReviews and ReviewMe.
119
The methods above might not make you rich, but they can earn you a good income or add to your existing income. Some of these methods might not be for you but it could be worth your while to check them out. David
120
Chances are that you will struggle to make a profit in year one. It's not all doom, gloom though for those of you who do have the right idea the world is your market place, and growth can be dramatic once you move into profits. InternetBusFranchise
121
Wikipedia TIP: As you review the various materials and references, you may note that many references are still confused and treat any multi-tier program or MLM as a pyramid it is not, as we hope to clarify for you herein. Again, as in the previous section, try to find something that interests you and do your own due diligence. From the illustration, you should be able to see that the affiliate is the middle man/woman that exists between the customer and the seller. Other names include associate, broker, agent, dealer, etc. Affiliate program marketing is one of the best ways for newbies to learn how to make money on the Internet and to make a lot of money with. There are thousands and thousands of ordinary people, who are making an extraordinary living from affiliate program marketing. For the newbies affiliate program marketing is when you go to a company A, who sells a product or service. You complete the quick application process. The company approves your application. The company provides you with a unique link. This link contains your own unique affiliate ID. It is up to you to market this product and when you make a sale you get a commission on the sale. Dont worry about
122
how to make a sale. It can be done without moving from your couch. To join the affiliate marketing program is free. One of the things you may be wondering about is where do I find these companies to become affiliated to? The best way is to go to a search engine on the net and type in Affiliate program marketing directories. You will find thousands and thousands of companies who would kill to get you to market their products or services. The one that I like and use is at clickbank.com. It has a great selection (thousand) of products to market.Clickbank.com also guarantees that you will get paid your commission. They also have a 30 day money back guarantee on the products.
SELECTING A PRODUCT
Now selecting a product is one of the most important aspects off affiliate marketing: To start select a product that now and have interest in or are passionate about. This will make it easier for you to market. Do same research on the product. See if it is popular and does what it claims to do. Look at the commission that you will be generating. It can be anything from 25% to75%.It takes the same effort to make 25% or 75% commission. I would take the 75% commission product. Last but not least. All affiliate program marketing programs are in essence the same, but do differ in some small ways and these small differences can make a big difference in money. Most affiliate program marketing programs are in essence the same, but there are some small differences and these small differences can make a big difference. The difference comes in the amount of money you can generate per month. The first and one of the major differences between different affiliate program marketing programs is, is in the amount of commission that are paid to you. This could be from 25% to 75% it takes the same effort to sell a 25% or 75% commission product. There are lots of programs that pay 75% commission and the product cost more than $100.I know which program I will be promoting. The major reason being the fact that it takes the same effort and expenses to make a lot more money. Dont fool yourself making money is what it is all about. The next kind of affiliate program marketing program to consider is membership websites or as it is also know a residual income program. Here you are marketing membership to an affiliate marketers program or website at a monthly subscription. When people join the program through your efforts, you receive a commission for your sale, but it does not stop there. You also get a percentage of the subscription fee of these members who joined because of you. This you get every month for as long as the person stays with the program. You work once and are paid forever.
123
There are even same of this affiliate program marketing programs that gives you commission on the subscription of the members who joined the members who joined you. This adds up to a lot of money. This is cold leverage, doing more with less. The next difference comes in the form of customer care and training. This is the biggest difference between the different affiliate program marketing programs. This one can make or break you, so focus. The good programs will have great customer care and would bend over backwards to help you succeed. This will come in the form of pre-written solo-ads-mail, training video's etc. The great programs will have all of the above plus a plan that you can follow to make a success of your Internet business. This is a win, win situation if you succeed and make money they succeed and make money. AffiliateProgram Sometimes it can be an automated marketing program where a Web advertiser or merchant recruits webmasters to place the merchant's banner ads or buttons on their own Web site. Webmasters will receive a referral fee or commission from sales when the customer has clicked the affiliate link to get to the merchant's Web site Web site to perform the desired action, usually make a purchase or fill out a contact form. The most common types of affiliate programs include pay-per-click, pay-per-lead, and pay-per-sale.
124
ADVERTISERS
Different advertisers offer different types of affiliate programs. If you join a search engine affiliate program you most likely will be placing text links or banners to their advertisers and you'll work on a pay-per-click fee. email list affiliates promote email newsletters and are usually paid when a person joins the advertised opt-in email list. Being an affiliate of any merchant usually means you are paid a commission per sale on the advertiser's Web site. Pay-per-click affiliate programs pay the least amount, as affiliates are often paid per thousand clicks (CPC).
PAY-PER-LEAD PROGRAMS
Pay-per-lead programs are when you provide the links to downloads, trial offers, email optin lists and so on. Depending on the advertiser you may be paid per lead generation or you may not be paid unless the user subscribes and pays for a full service from the advertiser. Again, you may also receive fees for both instances.
125
PAY-PER-SALE AFFILIATE
Pay-per-sale affiliate programs (also called revenue sharing) usually offer the highest commissions, and you will typically receive a set dollar amount per sale or a straight percentage of the total sale. Because a user has to purchase something, you may find this program best suited to high-traffic affiliate sites.
126
Choose affiliate programs that complement your Web site content. If your site is all about sports, then chances are you'll want to skip on setting up a co-branded Web store for cartoon themed car accessories, for example. Also, if affiliate programs offer customizable banners, buttons or splash pages that can be edited to reflect elements of your own site design, be sure to take advantage of those options. Don't be afraid to play the field and try a couple affiliate programs, or opt out of one and choose another if you're not seeing any results after time. Results are going to be based on how much traffic your own Web site gets. If your site serves only a couple visitors a day, you can't expect high click-through numbers.
127
commission because they might not provide support and tools to their affiliates. If this is the case, make sure you determine if this program will be too high-maintenance for you before joining. Pay-per-click programs offer the lowest dollar value for conversions, and you will need a higher click through rate to earn money. Pay-per-lead and pay-per-sale programs will usually offer a higher commission, but you will have less visitors clicking through to complete the transactions, so you need to have many unique visitors. Use your own traffic and reporting tools to determine which type of program will have a better chance of success on your own site. WebOPedia
RELIABILITY OF PAYMENT
Research on how reliable the affiliate program is at paying its affiliates. When you are in business, you will have some ongoing costs, such as marketing your business, and driving traffic to your affiliate website. You will therefore need to have constant payments to help you with the cash flow. Equally important is how frequent the program pays its affiliates. You would not want to wait months before you get paid.
128
ADWARE
Although it differs from spyware, adware often uses the same methods and technologies. Merchants initially were uninformed about adware, what impact it had, and how it could damage their brands. Affiliate marketers became aware of the issue much more quickly, especially because they noticed that adware often overwrites tracking cookies, thus resulting in a decline of commissions. Affiliates not employing adware felt that it was stealing commission from them. Adware often has no valuable purpose and rarely provides any useful content to the user, who is typically unaware that such software is installed on his/her computer. Affiliates discussed the issues in Internet forums and began to organize their efforts. They believed that the best way to address the problem was to discourage merchants from advertising via adware.
129
Merchants that were either indifferent to or supportive of adware were exposed by affiliates, thus damaging those merchants' reputations and tarnishing their affiliate marketing efforts. Many affiliates either terminated the use of such merchants or switched to a competitor's affiliate program. Eventually, merchants and affiliates to take a stand and ban certain adware publishers from their network also forced affiliate networks. The result was Code of Conduct by Commission Junction/beFree and Performics,] LinkShare's Anti-Predatory Advertising Addendum, and ShareASale's complete ban of software applications as a medium for affiliates to promote advertiser offers. Regardless of the progress made, adware continues to be an issue, as demonstrated by the class action lawsuit against ValueClick and its daughter company Commission Junction filed on April 20, 2007.
EMAIL SPAM
In the infancy of affiliate marketing, many Internet users held negative opinions due to the tendency of affiliates to use spam to promote the programs in which they were enrolled. As affiliate marketing matured, many affiliate merchants have refined their terms and conditions to prohibit affiliates from spamming.
CLICK TO REVEAL
Many voucher code web sites use a click to reveal format, which required the web site user to click to reveal the voucher code. The action of clicking places the cookie on the website visitor's computer. The IAB have stated "Affiliates must not use a mechanism whereby users are encouraged to click to interact with content where it is unclear or confusing what the outcome will be. Answers
COOKIE STUFFING
Cookie stuffing involves placing an affiliate-tracking cookie on a website visitor's computer without their knowledge, which will then generate revenue for the person doing the cookie stuffing. This not only generates fraudulent affiliate sales, but also has the potential to overwrite other affiliates' cookies, essentially stealing their legitimately earned commissions.
130
Online forums and industry trade shows are the only means for the different members from the industryaffiliates/publishers, merchants/advertisers, affiliate networks, third-party vendors, and service providers such as outsourced program managersto congregate at one location. Online forums are free, enable small affiliates to have a larger say, and provide anonymity. Trade shows are costprohibitive to small affiliates because of the high price for event passes. An advertiser they promote may even sponsor larger affiliates. Because of the anonymity of online forums, the quantitative majority of industry members are unable to create any form of legally binding rule or regulation that must be followed throughout the industry. Online forums have had very few successes as representing the majority of the affiliate marketing industry. The most recent example of such a success was the halt of the "Commission Junction Link Management Initiative" (CJ LMI) in June/July 2006, when a single network tried to impose the use of a JavaScript tracking code as a replacement for common HTML links on its affiliates.
131
February 2006the final stage of Google's major update ("Jagger") that began in mid-summer 2005 specifically targeted Spamdexing with great success. This update thus enabled Google to remove a large amount of mostly computer-generated duplicate content from its index. Websites consisting mostly of affiliate links have previously held a negative reputation for under delivering quality content. In 2005 there were active changes made by Google, where certain websites were labeled as "thin affiliates". Such websites were either removed from Google's index or were relocated within the results page (i.e., moved from the top-most results to a lower position). To avoid this categorization, affiliate marketer webmasters must create quality content on their websites that distinguishes their work from the work of spammers or banner farms, which only contain links leading to merchant sites. Some commentators originally suggested that Affiliate links work best in the context of the information contained within the website itself. For instance, if a website contains information pertaining to publishing a website, an affiliate link leading to a merchant's Internet service provider (ISP) within that website's content would be appropriate. If a website contains information pertaining to sports, an affiliate link leading to a sporting goods website may work well within the context of the articles and information about sports. The goal in this case is to publish quality information within the website and provide context-oriented links to related merchant's websites. However, examples that are more recent exist of "thin" Affiliate sites which are using the Affiliate Marketing model to create value for Consumers by offering them a service. These thin content service Affiliate fall into three categories: Price comparison Cause related marketing Time saving
TRADEMARK BIDDING
Affiliates were among the earliest adopters of pay per click advertising when the first pay per click search engines such as Goto.com (which later became Overture.com after being acquired by Yahoo! in 2003) emerged during the end of the 1990s. Later in 2000 Google launched its pay per click service, Google Adwords, which is responsible for the widespread use and acceptance of pay per click as an advertising channel. An increasing number of merchants engaged in pay per click advertising, either directly or via a search marketing agency, and realized that this space was already well-occupied by their affiliates. Although this situation alone created advertising channel conflicts and debates between advertisers and affiliates, the largest issue concerned affiliates bidding on advertisers names, brands, and trademarks. Several advertisers began to adjust their affiliate program terms to prohibit their affiliates from bidding on those types of keywords. Some advertisers, however, did and still do embrace this behavior, going so far as to allow, or even encourage, affiliates to bid on any term, including the advertiser's trademarks.
132
NASecuritiesExchangeCommission(SEC)
133
PONZI SCHEME
A Ponzi scheme is closely related to a pyramid because it revolves around continuous recruiting, but in a Ponzi scheme the promoter generally has no product to sell and pays no commission to investors who recruit new "members." Instead, the promoter collects payments from a stream of people, promising them all the same high rate of return on a short-term investment. In the typical Ponzi scheme, there is no real investment opportunity, and the promoter just uses the money from new recruits to pay obligations owed to longer standing members of the program. In English, there is an expression that nicely summarizes this scheme: It's called "stealing from Peter to pay Paul." In fact some law enforcement officers call Ponzi schemes "PeterPaul" scams. Many of you may be familiar with Ponzi schemes reported in the international financial news. For example, the MMM fund in Russia, which issued investors shares of stock and suddenly collapsed in 1994, was characterized as a Ponzi scheme. Both Ponzi schemes and pyramids are quite seductive because they may be able to deliver a high rate of return to a few early investors for a short period of time. Yet, both pyramid and Ponzi schemes are illegal because they inevitably must fall apart. No program can recruit new members forever. Every pyramid
134
or Ponzi scheme collapses because it cannot expand beyond the size of the earth's population. When the scheme collapses, most investors find themselves at the bottom, unable to recoup their losses. Some people confuse pyramid and Ponzi schemes with legitimate multilevel marketing. Multilevel marketing programs are known as MLM's, and unlike pyramid or Ponzi schemes, MLM's have a real product to sell. More importantly, MLMs actually selling their product to members of the general public, without requiring these consumers to pay anything extra or to join the MLM system. MLM's may pay commissions to a long string of distributors, but these commission are paid for real retail sales, not for new recruits.
# # # # # # # # #etc.
This example illustrates what is known as a three by four matrix. Each investor pays $500 to the promoter and is told to build a "downline" by recruiting three new members, who then each should recruit three more members. The investor is told that he will be paid $150 for each of the three members whom he enlists at the first level. The investor is also promised $30 commissions for each recruit at the next three levels. Thus, the investor should receive commissions for four levels of recruits below him, each of whom must recruit three more members, hence the name -- a three by four matrix. To the potential investor/recruit this may look like a very appealing opportunity. The pyramid promoter is likely to persuade the investor that he is "getting in early" and that he should consider himself at the top of the matrix. From this perspective, it appears that he can earn $3,960 on an investment of $500, a whopping 792 percent return.
VICTIMS
Now consider the pyramid from the investor/victim's perspective -- after the entire scheme has collapsed around him. The victim, like the first investor, thought of himself at the top of the pyramid
135
but suddenly realizes that he is actually at the bottom, unable to find people interested in the program to build out his downline. He is not alone because mathematics shows that MOST investors will find themselves at the bottom of the pyramid when it collapses. The very structure of this matrix dictates that whenever the collapse occurs, at least 70 percent will be in the bottom level with no means to make a profit. A Ponzi scheme could yield even worse results for investors, because it does not pay out any commissions at all. This can have disastrous consequences, as exemplified by Charles Ponzi's infamous fraud in the 1920's. Charles Ponzi, an engaging ex-convict, promised the Italian American community of South Boston that he would give them a 50 percent return on their money in just 45 to 90 days. Mr. Ponzi claimed that he could pay such a high rate of return because he could earn 400 percent by trading and redeeming postal reply coupons. These coupons had been established under the Universal Postal Convention to enable a person in one country to pre-pay the return postage on a package or letter sent back from another country. For a short time after World War I, fluctuations in currency exchange rates did create a disparity between the cost and redemption value of postal reply coupons among various countries. However, Mr. Ponzi discovered that he could only make a few cents per coupon and that handling large volumes of coupons cost more than they were worth. He stopped redeeming any coupons but continued to collect investors' money. When he actually paid a 50 percent return to some early investors, his reputation soared and more money flowed in from around the country. Mr. Ponzi bought a stylish house in the best part of town and purchased a large minority interest in his local bank, the Hanover Trust Company. Eventually his scheme began to unravel, bringing ruin to the bank and thousands of investors. When Mr. Ponzi began to overdraw his accounts at Hanover Trust, the Massachusetts Banking Commissioner ordered Hanover Trust to stop honoring Ponzi's checks. The bank refused and even issued back-dated certificates of deposit to cover Mr. Ponzi's overdrafts. A few days later, the Banking Commission took over Hanover Trust, and Mr. Ponzi was arrested for mail fraud. In the end, Charles Ponzi owed investors over $6 million, an enormous sum of money for that time. He was convicted of fraud in both state and federal court and served ten years in prison.
AMWAY CORP
In re Amway Corp., another landmark decision from the 1970's, the FTC distinguished an illegal pyramid from a legitimate multilevel marketing program. At the time, Amway manufactured and sold cleaning supplies and other household products. Under the Amway Plan, each distributor purchased household products at wholesale from the person who recruited or "sponsored" her. The top distributors purchased from Amway itself. A distributor earned money from retail sales by pocketing the difference between the wholesale price at which she purchased the product, and the retail price at which she sold it. She also received a monthly bonus based on the total amount of Amway products that she purchased for resale to both consumers and to her sponsored distributors.
136
Since distributors were compensated both for selling products to consumers and to newlyrecruited distributors, there was some question as to whether this was a legitimate multilevel marketing program or an illegal pyramid scheme. The Commission held that, although Amway had made false and misleading earnings claims when recruiting new distributors, the company's sales plan was not an illegal pyramid scheme. Amway differed in several ways from pyramid schemes that the Commission had challenged. It did not charge an up-front "head hunting" or large investment fee from new recruits, nor did it promote "inventory loading" by requiring distributors to buy large volumes of nonreturnable inventory. Instead, Amway only required distributors to buy a relatively inexpensive sales kit. Moreover, Amway had three different policies to encourage distributors to actually sell the company's soaps, cleaners, and household products to real end users. First, Amway required distributors to buy back any unused and marketable products from their recruits upon request. Second, Amway required each distributor to sell at wholesale or retail at least 70 percent of its purchased inventory each month -- a policy known as the 70% rule. Finally, Amway required each sponsoring distributor to make at least 1 retail sale to 10 different customers each month, known as the 10-customer rule. The Commission found that these three policies prevented distributors from buying or forcing others to buy unneeded inventory just to earn bonuses. Thus, Amway did not fit the Koscot definition: Amway participants were not purchasing the right to earn profits unrelated to the sale of products to consumers "by recruiting other participants, who they are interested in recruitment fees rather than the sale of products. PYRAMID SCHEMES IN THE 1990'S The 1990's first brought an important refinement in the law. As the Commission pursued new pyramid cases, many defendants proclaimed their innocence, stating that they had adopted the same safeguards -- the inventory buy-back policy, the 70% rule, and the 10 customer rule -- that were found acceptable in Amway. However, an appellate court decision called Webster v. Omnitrition Int'l, Inc., pointed out that the Amway safeguards do not immunize every marketing program. The court noted that the "70% rule" and "10 customer rule" are meaningless if commissions are paid based on a distributor's wholesale sales (which are only sales to new recruits), and not based on actual retail sales. The court also noted that an inventory buy-back policy is an effective safeguard only if it is actually enforced. While new cases were refining the law in the 1990's, radical changes were underway in the marketplace. Pyramid schemes came back with a vengeance. Like most economic activity, fraud occurs in cycles, and new pyramid schemes exploited a new generation of consumers and entrepreneurs that had not witnessed the pyramid problems of the 1970's.
137
Also, the globalization of the economy provided a new outlet for pyramiding. Pyramids schemes found fertile ground in newly emerging market economies where this type of fraud had previously been scarce or unknown. In Albania, for example, investors poured an estimated $1 billion into various pyramid schemes -- a staggering 43% of the country's GDP. In the U.S., probably nothing has contributed to the growth of pyramid schemes as much as Internet marketing. The introduction of electronic commerce has allowed con artists to quickly and costeffectively target victims around the globe. After buying a computer and a modem, scam artists can establish and maintain a site on the World Wide Web for $30 a month or less, and solicit anyone in the world with Internet access. Pyramid operators can target specific audiences by posting messages in specialized news groups (e.g., "alt.business.home" or "alt.make.money.fast"). In addition, through unsolicited email messages -known on the Internet as "spam" -- pyramid operators can engage in cheap one-on-one marketing. Whereas it might cost hundreds or thousands of dollars to rent a mailing list and send 10cent post cards to potential recruits, it costs only a fraction of that to send out similar email solicitations. On the Internet, you can acquire one million email addresses for as little as $11 and spend nothing on postage. The Federal Trade Commission's current law enforcement efforts reflect this new wave in pyramiding. The Commission has brought eight cases against pyramid schemes in the last two years, and six of those have involved Internet marketing. One recent case, FTC v. FutureNet, Inc., is particularly instructive because it starkly reflects the potential for abuse in hi-tech and newly deregulated industries. FutureNet allegedly claimed that, for payment of $195 to $794, investors could earn between $5000 and $125,000 per month as distributors of Internet access devices like WebTV. The FTC filed suit, charging that FutureNet's earnings claims were false because the company really operated an illegal pyramid scheme. Near the time of filing, FTC investigators discovered that FutureNet had begun to sell electricity investments as well, riding a wave of speculation in advance of the deregulation of California's electricity market. The Commission obtained a TRO and an asset freeze over the defendants' assets and eventually reached a $1 million settlement with the corporate defendants and two individual officers. The settlement requires the defendants to pay $1 million in consumer redress, bars them from further pyramiding activity of any kind, requires them to post a bond before engaging in any network marketing, and requires them to register with state utility officials before engaging in the sale of electricity. The Commission continues to litigate its case against three non-settling individual defendants.
CONSUMER EDUCATION
Law enforcement is the cornerstone of the Commission's fight against pyramid schemes; however, we also try to educate the public so that they can protect themselves. In our educational efforts, we have
138
tried to take a page from the con artists' book and use new online technology to reach consumers and new entrepreneurs. For example, on the agency's web site at "www.ftc.gov", the Commission has posted several alerts regarding pyramid schemes and multilevel marketing problems. The Commission records over 2 million "hits" on its home page every month and receives several thousand visitors on its pyramid and multilevel marketing pages. The staff of the Commission also has posted several "teaser" web sites, effectively extending a hand to consumers at their most vulnerable point -- when they are surfing areas of the Internet likely to be rife with fraud and deception. The "Looking for Success" site is one example. It advertises a fake pyramid scheme. The home page of "Looking for Success" promises easy money and talks in glowing terms about achieving "financial freedom." On the second page, the consumer finds a payout plan common to pyramid schemes, as well as typical buzz words like "forced matrix," "get in early," and "downline." Clicking through to the third and final page in the series, however, brings the consumer to a sobering warning: "If you responded to an ad like this one, you could get scammed." The warning page provides a hyper-text link back to FTC.GOV, where consumers can learn more about how to avoid pyramid schemes.
LOOKING AHEAD
Unfortunately, pyramid schemes are likely to continue to proliferate both here and abroad in the near future. However, we can all help stem the tide by working together. Finally, you can encourage the relevant officials in your countries to combat pyramid schemes by educating consumers and businesses about how to recognize and avoid this type of fraud. This can be particularly important in emerging markets, where experience with investment opportunities may be scarce.
139
IS IT MLM OR A PYRAMID?
TIP: Without your Due Diligence to check out a program before you spend your money, you may be at risk of participating in a pyramid scheme Multilevel marketing plans, also known as "network" or "matrix" marketing, are a way of selling goods or services through distributors. These plans typically promise that if you sign up as a distributor, you will receive commissions -- for both your sales of the plan's goods or services and those of other people you recruit to join the distributors. Multilevel marketing plans usually promise to pay commissions through two or more levels of recruits, known as the distributor's "downline." If a plan offers to pay commissions for recruiting new distributors, watch out! Most states outlaw this practice, which is known as "pyramiding." State laws against pyramiding say that a multilevel marketing plan should only pay commissions for retail sales of goods or services, not for recruiting new distributors.
140
Be cautious of plans that claim you will make money through continued growth of your "downline" -- the commissions on sales made by new distributors you recruit -- rather than through sales of products you make yourself. Beware of plans that claim to sell miracle products or promise enormous earnings. Just because a promoter of a plan makes a claim doesn't mean it's true! Ask the promoter of the plan to substantiate claims with hard evidence. Beware of shills -- "decoy" references paid by a plan's promoter to describe their fictional success in earning money through the plan. Don't pay or sign any contracts in an "opportunity meeting" or any other high pressure situation. Insist on taking your time to think over a decision to join. Talk it over with your spouse, a knowledgeable friend, an accountant or lawyer. Do your homework! Check with your local Better Business Bureau and state Attorney General about any plan you're considering -- especially when the claims about the product or your potential earnings seem too good to be true. FedTradeCommission
141
If you sign up as a distributor, you may be promised commissions or other rewards-for both your sales of the plan's goods or services and those of other people you recruit to become distributors. These plans, often called "multilevel marketing plans," sometimes promise commissions or rewards that never materialize. Whats a worse, consumer are often urged to spend or "invest" money in order to make it.
YOUR RESPONSIBILITIES
If you decide to become a distributor, remember that you're legally responsible for the claims you make about the company, its product and the business opportunities it offers. That applies even if you're simply repeating claims you read in a company brochure or advertising flyer. When you promote the qualities of a product or service, you're obligated to present those claims truthfully and to ensure there's enough solid evidence to back them up. The Federal Trade Commission advises you to verify the research behind any claims about a product's performance before repeating those claims to a potential customer. Likewise, if you decide to solicit new distributors, be aware that you're responsible for any claims you make about a distributor's earnings potential. Be sure to represent the opportunity honestly and to avoid making unrealistic promises. If those promises fall through, remember that you could be held liable. FedTradeCommission
142
HISTORY
The first known matrix scheme is widely believed to be EZExpo.com, which started the popularity of matrix schemes in 2002. By 2003 more than 200 matrix schemes were in operation, including one which had the same owner as the payment processor Stormpay (TymGlobal). Subsequently TymGlobal and Stormpay were accused of running an illegal Ponzi scheme. Stormpay later claimed to be independent of TymGlobal, and they stopped accepting matrix schemes as customers. Although many have since ceased trading, some schemes are still known to be operating worldwide. The payment processor, Stormpay, is no longer trading.
OPERATION
The operation of matrix schemes varies, though they often operate similar to pyramid or Ponzi schemes. Some of the former participants of these schemes consider them to be a form of confidence trick, although others are happy with their purchase. To move upward in the list, a person must wait for new members to join or refer a certain number of people to the list. This is accomplished through purchasing a token product of marginal value: usually e-books, cell phone boosters, screen savers, or other software CDs/DVDs. When a predefined number of people have purchased the token product the person currently at the top of the list receives their reward item, and the next person in the list moves to the top. The rewards for those at the top of the matrix list are usually high-demand consumer electronics, such as portable digital audio players, high-definition television sets, laptop computers, and cellular phones. Reaching the point on the list where you receive the expensive goods is termed "cycling". In many cases, the token product alone could not be reasonably sold for the price listed, and as such legal experts claim that, regardless of what is said, the real product being sold is the "reward" in question in those situations. In these cases, the operator could be charged with running a gambling game or failing to supply ordered products. Steven A. Richards, a lawyer who represents multi-level marketing (MLM) companies for Grimes & Reese in Idaho Falls, Idaho, has stated that often there are no clear legal tests for Ponzi schemes. But if the product sold has no value or very little value, and consumers wouldnt buy it without the attached free gift, the scheme probably runs afoul of federal and state laws. The Matrix List by which the sites receive their name would be what is known as a straight-line matrix, or 1 by X matrix. This is similar to many MLMs that use Y by X matrices to fill a down-line. For example, one situation may be a 1 by 10 matrix for a Sony PlayStation 2 (a common reward). In such a matrix the site would usually sell an e-book for $50 to be placed on the list. After 9 additional people
143
purchased a spot, the first person would receive either a PS2 or cash value equivalent and would be removed from the list. The person who had been second would move up to the first spot and an additional 10 people would have to purchase in order for this person to receive a PS2. It is this orderly movement which has also given the name Elevator Scheme to these sites as people would move up the elevator (escalator, ladder) to the top at which they would then cycle out of the matrix. In such a matrix, 9 out of 10 or 90% of all customers will not receive the reward item, because the rules of the scheme are that one reward is issued for every 10 customers that join. (The fact that the reward is issued to the customer at the top of the list doesn't change the proportion of rewards given to customers signed up.) Supporters claim that additional revenue streams from advertising are used to keep the lists moving. However, detractors claim that it is impossible to generate enough outside revenue. If the entire world were to join the list, 90% of the world would be unable to cycle if the site did not draw sufficient alternate revenue streams. Adding more people to the list does not change the fact that the majority would receive nothing without these streams. Additionally, the amount of time needed before a given individual will receive the product in question is often mistaken. In a matrix in which 10 people are required before it will cycle, the first person to join only needs 9 additional sign ups, but the second person needs 18 additional sign ups, 8 more for the person above him, and then 10 more for himself. The third person on the list likewise needs 27 additional signups, 7 for the person on top of the list, 10 for the person directly above him, and then 10 for himself. And then the number of people required continues to grow for each new person joining the list. For the 10th person to cycle it would require 100 people total, and 1000 for the 100th, and so on. Wikipedia
144
THAT DELAYS MEETING ITS COMMITMENTS WHILE ASKING MEMBERS TO "KEEP THE FAITH."
Many pyramid schemes advertise that they are in the "pre-launch" stage, yet they never can and never do launch. By definition, pyramid schemes can never fulfill their obligations to a majority of their participants. To survive, pyramids need to keep and attract as many members as possible. Thus, promoters try to appeal to a sense of community or solidarity, while chastising outsiders or skeptics. Often the government is the target of the pyramid's collective wrath, particularly when the scheme is about to be dismantled. Commission attorneys now know to expect picketers and a packed courtroom when they file suit to halt a pyramid scheme. Half of the pyramid's recruits may see themselves as victims of a scam that we took too long to stop; the other half may view themselves as victims of government meddling that ruined their chance to make millions. Government officials in Albania have also experienced this reaction in the recent past.
THAT ATTEMPT TO CAPITALIZE ON THE PUBLIC'S INTEREST IN HI-TECH OR NEWLY DEREGULATED MARKETS
Every investor fantasizes about becoming wealthy overnight, but in fact, most hi-tech ventures are risky and yield substantial profits only after years of hard work. Similarly, deregulated markets can offer substantial benefits to investors and consumers, but deregulation seldom means that "everything goes," that no rules apply, and that pyramid or Ponzi schemes are suddenly legitimate.
CONCLUSION
As we continue to pursue pyramid schemes, we would be delighted to coordinate our efforts with law enforcement in your countries. It is only too evident that the expansion of fraud across borders and on the World Wide Web means that no one agency or country can work effectively on its own. We must be collectively vigilant in order to protect the integrity of our marketplaces and the pocketbooks of our consumers. SpeechFTC-IMF
145
PYRAMID SCHEMES:
These schemes often ignore the actual selling of products and services, and concentrate on the income you can earn by recruiting new distributors. Pyramid schemes might not involve selling products.
MATRIX PROGRAMS:
These programs involve the exchange of money primarily for being added to a waiting list for a product. If you're at the top of the list, you receive a product when a set number of people join after you join.
146
147
11.3 SELF-DISCIPLINE
A favorite of the work-at-homers: Work in your pajamas, shorts or whatever. Sounds great, but I recommend that you treat your online venture like any job. No, you do not need a tie, but get up shower and shave, brush your teeth (you get the point ladies) Whether full-time or part-time treat your online job as a business and not a hobby. Your advantage is that you can do it at home. Great: No buses, no traffic and none of all those other inconveniences that you put up with in having to leave the house for an outside job. You will feel better, work better, and be more productive
WINDOW EXPERIENCE
Whether you are buying a new computer or using and older one; check your Windows Experience Index base score to see what you might do to improve your computers performance Go to Start Control Panel, System and Maintenance, Performance Information and Tools; Check Your Computers Window Experience Index Base Score. Click on Window Experience Index link The screen will advise you of the weak points in your computer that you might make an upgrade to improve performance, again check the memory. Usually, the memory and graphics will be your computers weak points. Again, if you are buying new, be sure to check this before your leave the shop.
VIRUS PROTECTION
A necessary starting point to maintain and protect your computer. A computer virus is a computer program that can copy itself and infect a computer. The term "virus" is also commonly but erroneously used to refer to other types of malware, adware, and spyware programs that do not have the reproductive ability. A true virus can only spread from one computer to another (in some form of executable code) when its host is taken to the target computer; for instance because a user sent it over a network or the Internet, or carried it on a removable medium such as a floppy disk, CD, DVD, or USB drive. Viruses can increase
148
their chances of spreading to other computers by infecting files on a network file system or a file system that is accessed by another computer. Most personal computers are now connected to the Internet and to local area networks, facilitating the spread of malicious code. Today's viruses may also take advantage of network services such as the World Wide Web, email, Instant Messaging, and file sharing systems to spread. Wikipedia As an active online user, you must protect your computer and files from any such attacks. Windows defender helps, but I prefer to supplement windows features with a third party solution. While there a many paid commercial and free software available to you, I have had satisfactory results for a free program for personal use offered by Avast, although I have since upgraded to full-protection. This software program automatically runs in the background and is updated to keep your virus detection current. Free version available. Avast New computers normally come with a trial version of virus software leaving it up to you to accept and upgrade or not. I usually delete that program and install Avast.
SLOW COMPUTERS
The daily use of your computer will result in various defragmented files; i.e. a piece of the file here and another there. To improve the computers performance, it is necessary to periodically clean your computer hardrive; usually the C drive. Then defrag your registry and your computer drives. However, Windows will defrag the drives, but does not defrag the registry.
WINDOWS TOOLS
Windows Update Keeping your computer software updated can reduce your changes of a getting a computer virus, better operation and performance. Window update can update both windows and other Microsoft problem as the same time Go to Start lower left hand windows logo All programs Find Windows Update Click and let it run If you leave your computer running all night, you can set the update software to update the computer automatically; however, it will reboot itself to install the changes. Therefore, if you have Forex trades going, then your Forex sites will be offline until you open them again. If there are a lot of updates, then it is recommended that you run the update program again to get updates to the updates. Change happens! Window update can update all your Microsoft products
RECYCLE BIN
When you delete a file from your computer, it is temporarily stored in the Recycle Bin. This usually gives you an opportunity to restore the file to its original location if you discover that the file should not have been deleted.
149
To permanently remove files from the computer and reclaim any hard disk space they were using, you need to permanently delete files from the Recycle Bin. You can choose to delete individual files from the Recycle Bin or empty the entire Recycle Bin at once. Click to open Recycle Bin. Do one of the following: To delete one file, click it, and then press DELETE. To delete all of the files, on the toolbar, click Empty the Recycle Bin. You can also empty the Recycle Bin, without opening it. Right-click the Recycle Bin, and then click Empty Recycle Bin. To permanently delete a file from your computer without first sending it to the Recycle Bin, Click the file, and then press SHIFT+DELETE.
DISK CLEANUP
If you want to reduce the number of unnecessary files on your hard disk to free up disk space and help your computer run faster, use Disk Cleanup. It removes temporary files, empties the Recycle Bin, and removes a variety of system files and other items that you no longer need. Click to open Disk Cleanup. In the Disk Cleanup Options dialog box, choose whether you want to clean up your own files only or all of the files on the computer. If you are prompted for an administrator password or confirmation, type the password or provide confirmation. If the Disk Cleanup: Drive Selection dialog box appears, select the hard disk drive that you want to clean up, and then click OK. Click the Disk Cleanup tab, and then select the check boxes for the files you want to delete. When you finish selecting the files you want to delete, click OK, and then click Delete files to confirm the operation. Disk Cleanup proceeds to remove all unnecessary files from your computer. Disk cleanup can also delete the files in the recycle bin
150
One Vendor with various free tools, including both registry clean up and defrag, that work well for me may be found at Auslogics. Auslogics is easy to use, fast and nice graphic interface for the Disk Defrag, registry cleaner, etc. Again, recommend performing the defrag more than one, as each pass defrag the majority, but another pass may find more. For the amount of work that I do online, I often need to defrag at least once a week with maybe 2-3 passes While you are there, see the other products Auslogics has to offer. I like their Boost Speed Program.
For the more computer savvy: Got to the Widows logo located at the lower left corner. Type msconfiq in the bottom box. The link will show in the window under Programs. Click and this will bring up a new screen Click the Start-up tab and unclick those programs that you dont need at start-up. Keep your Microsoft, virus and related programs. Click Apply and restart your computer. Try it, if you are uncomfortable, then do nothing and let someone else do it for you. Do so, at your own risk.
UPDATE CHECKER
Update Checker updates other programs on your computer for better operation and performance
ROBOFORM
Just managing your affiliations, traffic and other sites, providing signup details for a new site, remembering user name, ids and passwords name for logins can be very time consuming. Window, Google and other offer some help, but the long standing, best rated software that I have found and use is RoboForm RoboForm includes a password generator which is convenient to generate and save different passwords for multiple sites, as has been recommended herein. If you maintain a lot of sites, as I do, then the upgrade is great, but not necessary. Upgrading enables you to click and the site loads and logs you in. The free version will log you in after you have loaded the site. While you are there see what else http://download.cnet.com has to offer for free
151
SUCCESS OFTEN COMES TO THOSE WHO LOOK, FEEL AND ACT THE PART.
Success radiates through others. If you feel good about yourself, then your chances of success improve. In most cases, to be successful, you need to surround yourself with good people. However, since you are most likely working alone, surround yourself with the proper tools and equipment to make your feel successful. Just as you need to keep yourself informed and up to day, you also need to keep your computers and equipment running at its top performance. Get comfortable and enjoy your online experiences.
SKYPE
Skype is probably one of the best online VOIP solution offering message, telephone and video. Great to for building relationship, directly answering questions and perhaps training with your sponsor or downline. I use it sparingly and dont leave it on. If one, you keep getting popup for so and so ins online.
EMAIL
I should have been paying more attention to this chapter as I will discuss later. Managing your email is a large part of managing your business after you have everything setup.
152
What to do when email that you want keeps showing up in your junk mail, instead of your regular mail folders? We have spent some time talking about scams and spam mails, but when you are in business you need your mail, when you are sending mail, you want it to get to the other party. What is Whitelisting? How do you dispose of the spam or junk mail that is overloading your junk mailbox and inbox? Why are most sites now recommending the use of Gmail; its advantage and disadvantages?
WHAT IS WHITELISTING?
A Whitelist is a list of email addresses or domain names from which an email blocking program will allow messages to be received. email blocking programs, also called a spam filters, are intended to prevent most unsolicited email messages (spam) from appearing in subscriber inboxes. But these programs are not perfect. Cleverly crafted spam gets through, and a few desired messages are blocked. Most Internet users can tolerate the occasional unsolicited email advertisement that a spam filter misses, but are concerned by the thought that an important message might not be received. The whitelist option is a solution to the latter problem. The list can be gradually compiled over a period of time, and can be edited whenever the user wants. Some spam filters delete suspected junk email messages straightaway, but others allow the user to place them in a quarantined inbox. Periodically, the quarantined messages are observed to see if any of them are legitimate messages. This option is used by some Webbased email clients in place of, or in addition to, a whitelist.
GMAIL
From your junk mail folder, click the email and click the NOT SPAM tab. To have future emails from the same originator go directly to your INBOX, click the email and go to the MORE Tab.
153
This will bring an up a drop-down menu, Select FILTER MESSAGES LIKE THIS. A new screen will show your selected email and others from the same source. Click NEXT STEP which will bring up the CREATE FILER screen. Select NEVER SEND IT TO SPAM You can apply of all message if there are any. Finish by clicking CREATE FILER
DISADVANTAGES OF GMAIL
You cannot do sorts, and search results seem to vary from the messages in Gmail from those imported in Outlook. You cannot query junk mail. I prefer the features offered by Microsoft Outlook at this time. However that are some other good ones, try a Google search for your choices. TIP: Since Gmail will retain all of your email, then anyone that hacks your Gmail account, which happened to me, will have access to all of your user IDs and passwords See also your Google Dashboard
REMEDY
Print and maintain an offline file of all accounts, add to RoboForm. Search for User Id and Password emails, and delete them from your Gmail history. Change your passwords and Ids frequently. Use different passwords and Ids on your financial and personal accounts TIP: You can delete from Gmail, but you must also delete from Google Dashboard. TIP: emails that are caught in the Gmail junk mails folder will not get through to your or Microsoft Outlook Access your Gmail Junk Mail folder to screen the emails; move the ones you that you need to your inbox
154
LOGINS
Many sites expect you to login or read mail to keep your account active. Some offer a vacation mode which will keep your active, but relieve you of the daily email traffic. Most require you to login in to repost your ads for the day, as the ads are only good for 24 hours. If you are trying to make money off these sites, rather than just use them to advertise your products; then you need to surf their site, some require you to surf x number of sites per day to earn from your downline or to post your ad. Joining one site often leads to joining another and another, until there is no way that you can keep up and read all the mail, or surf daily.
BOXBE
This Free Service site has been banned by many traffic sites; but maybe there is a message there. I just want you to be aware of it, what does and how it might impact or benefit your business and good selves.
155
The best you can do is try to visit each of your sites once in a while, surf a little, manage your credits and read some of their emails. TIP: If you have a particular site or probably several that you want to use daily, then you can monitor your junk mail for those sites, and have them filtered to your inbox. See Whitelisting instructions above. Remember, if you are using Microsoft Outlook and perhaps others, email links for credit will not work while that email is in your junk mail folder. Move it to your inbox Once you sign up for these various traffic sites, the mails keeps coming, unless shut them off by going on vacation. Your terms and conditions of the site say that you are willing to read others members email, in exchange for posting your own ads, banners, etc. With so much email coming in each day, you need a methodology to deal with it, since obviously you will never keep up. As I said, I joined many programs for evaluation; some of the confirmation email will show up in my junk mail folder, perhaps before you have whitelisted the source. Further, I may not remember the site names or the source, because some of these jokers dont make it easy for you; i.e. Site XXXa email will come from XX@xx .xx, or a person you never heard of. So then you are stuck with who is XX@xx.xx and is this Site one that I wanted? Still others send email like confirm your site when you never signed up in the first place. TIP: Start With Your Primary email Folder. Search for the Keywords: Welcome, Admin, Support, Confirm, Activate, Validate and Password. Check the junk mail folder for others From your search, take the action required to activate your new accounts.
Save the settings, User Ids and passwords to RoboForm and print the emails for your files. Since you have completed the action required on these emails, they should be deleted Search the remaining emails by site name. You can then delete all email from that site or Click 1 or 2 or all to get the credits you need, and delete the balance. Some site offer promotions, promos codes, others warn you if you site credits are running low. Most of the traffic sites require you to log in daily to post your ads. TIP: If you really want to reduce your Inbox and Junk Mail boxes and start over because you went on vacation, took a break, or whatever; then Search for solo. This will cover the majority of your traffic exchange mail. Delete them form the primary folder and then remember to delete your Trash. I had over 300,000 emails in Gmail with solo.
156
SPAMMER KEYWORDS
The scammer/spammers are perhaps younger and smarter many of us as they now use the same keywords that we use to sort our email; Welcome, Admin, Support, Confirm, Activate, Validate to flood our emails by using the words in the From list or the Titles
157
158
Spam can be used to spread computer viruses, Trojan horses or other malicious software. The objective may be identity theft, or worse (e.g., advance fee fraud). Some spam attempts to capitalize on human greed whilst other attempts to use the victims' inexperience with computer technology to trick them (e.g., phishing) Wikipedia According to a recent Microsoft report, 97% of the email that is sent each day is unsolicited, virus or spam mail. Another says that it is 60% spam. As such, nearly everyone, as you will see, is on a Spam Watch. Everyone for Internet Service Providers (ISP), to Instant Messaging, (IM) to email providers is trying to find ways to stop the mail from getting through. The problem created by this change of mentality, is that every email is treated as guilty mail until proven innocent. Your good email may be filtered out for the choice of a wrong word. Anyone, even as a prank, can label your email as Spam, and give you the headache of a lifetime. Your ability to recognize spam can help you reduce yourself from being a victim of a Scam, and give you a better chance of getting your own marketing email through to the intended receiver. Further, it will reduce your likelihood of being penalized for being a spammer.
SELECTION OF WORDS
Many spam filters work by analyzing the email based on its content and the words used. Many words - such as free, sex and so forth -- are very heavy spam trigger keywords. Your priority should be to avoid such words while keeping your newsletter as professional as possible. Later in this article, I will show you a technique that I use to help me detect words that could trigger spam filters that I may have missed.
159
and try to stick to a maximum of 2 or 3 different font types and sizes. Overly large sized fonts will surely add to an email being flagged as spam, as will too many images (not enough text). Try and use a short and simple style sheet rather than using font tags excessively. Most spam filters don't appreciate a multitude of font tags and inline formatting, and the more primitive filters can't detect style sheets so they will not penalize as easily.
CONSISTENCY IS KING
Use a template if you plan on sending newsletters consistently. This will make sure that all your newsletters look and feel the same. It will also add a touch of professionalism and branding to your newsletters. Whilst not directly affecting spam filters, this will enable your readers to distinguish your newsletter instantly, thus not reporting it as spam accidentally. Some spam filters work by querying a spam server, whereas others report individual emails as spam. If your email gets reported as spam, then more than likely multiple spam filters will flag your email. Being consistent with your timing of the newsletter also helps. For example, if you send a newsletter once per month (I personally do not recommend you send out any more than this, unless you have something interesting to say), then aim to send it out at the same time, on the same day each month. Once again, your potential readers will learn to expect your email, adding professionalism and often improving open rates, also reducing accidental spam flagging as well.
160
I also have a couple of email accounts with different web hosts that have spam filters in place. In particular, they mostly use spam assassin -- a popular piece of spam filtering software. Spam assassin is useful because every email that it flags as spam is given a report and a list of why that email was considered spam. I also have a local spam filtering application called No Spam Today! For Workstations, that runs a local copy of spam assassin on my PC. It acts as a very close replica to the same software used on thousands of servers world-wide, by sending myself copies of the newsletter No Spam Today! -- Using the spam assassin checking techniques -- gives me feedback as to why my email may have been flagged. If I have used words or formatting that I should not have, or if I have included too many images, etc. InterSpire
161
You are not to discuss ANYTHING to do with making money in your mails. Leave that to the site to sell for you. Your job is simply to get people to click your links. Buzz Bee See Appendix B for words that are not to be used in your headlines if you want to avoid the spam blockers
162
profile's sidebar and our Trust and Safety team will check it out to see what needs to be done." To stop users from simply using the spam feature as a weapon against others they don't like, Twitter said that "no automated action will be taken as a result of reporting a user as spam." That said, users who click the button would automatically have the profile blocked from following or replying to them. Twitter's decision to add a "Report as spam" button is just another way the company is trying to combat spam accounts. It's fighting an uphill battle. Out of my more than 12,000 followers, I've found several that do nothing but spam users. That said, I do believe that the "Report as spam" feature will be quite helpful in limiting that going forward. Of course, all that depends on our willingness to report others. I'm all for it. Are you? D Reisinger
REDUCING SPAM
It seems like anybody, including your competitors, can report anyone for spam - by mistake or prank. You risk losing or tying up your email accounts and websites. Yahoo offers you a spam button to report those people who are not on your contact list that might find and contact you.
163
Each of these has one form of payment or another for Likes, Q&As, referrals, etc. Each allows the creation of Groups by upgraded members for a particular programs or cause of action. Members can create posts and /or comments for sharing. I still see these sites as relationship building among members having a common interest of sharing their businesses online. The polarity of this concept continues to lead with new sites cropping up trying to learn and improve on the other. While it is nearly impossible to keep up with them all especially for those that seek to have their earning pay their monthly fees, it is this focus on monthly fees that drives members resort to any tactic that might produce a like, a point, or whatever for a question, a video offering or activity. All too often, these activities and like or vote sharing reduce the effectiveness of social Internet marketing because the questions, the videos and activities are NOT related to business or building relationships except in blocks of I will like you if you like me or please vote for my video. For many, there is little real reading or learning except to earn the point, the like or . One of my groups Swom Success with over 16,000 members used to be a hive of activities as to how to Swom, learn, connect and network with others. The tips are among the best for Swomming and networking, were praised and referred to others, but nowadays few even take the time to read them It is this concern to earn the monthly fee where many members lose their focus. Members have resorted to thinking small, tying to meet the monthly fee, rather than thinking big networking and marketing their business opportunities. The value of the relationship has been lost to many, or never understood, as does the real money which may be made from their bizop, product or offering. Some member focus so much on earning their monthly fee, that they spam us for votes, likes, watch my movie, and their FREE offer sites to make money online. Others are upgraded one month and then downgraded the next losing all benefit of the upgraded membership, and further reducing their marketing potential to other Upgraded members. They have truly lost the Big Picture and the Art of Thinking Big, Their mindset has changed! For others of us, the value remains; the networking and relationship building continues and improves, learning continues and business (as intended) is conducted. However, we still have to spend too much time policing our groups, posts etc., to try to retain the focus. Attempts to retain the purity of the concept and to eliminate the spam falls on deaf ears.
164
In other words, stick to the subject, do not introduce another program, i.e. do not introduce program B in program As group. I recall a post to my Swom Success Group, a popular group for how to Swom where a lady recommended that the members go to a competing group following a different strategy. Spammers post their comment without regard to the originators or subject of the post. They may make the same post several times in the same thread of conversation
Post Example 2:
Welcome to SWOM and my SWOM SUCCESS GROUP, my pleasure to connect with you. Our sister site BIZOPPERS bizoppers.com/?r=36756, is a natural for you, and your Double Upgrade to Gold is our best value. FOCUS on your wall or PROFILE tab, Respond to all Posts and Use our Daily Plan for Success. See Income and FAQ tabs. Log into our group, Read and Copy the Tips to your Desktop, Introduce yourself and look for connections. Gold Members get paid for "Like(s). Enjoy Judith Comment: Good morning Mary, happy gold bizopping one like for sweet music for you, hope you visit my video tnx bizoppers.com/videos/17369 Remarks: Instead of Welcoming the new member Judith, this member ignored the member to whom the my post was made (Judith), but the comment was made to another commenter (Mary) and has nothing to do with the Subject Welcome
Post Example 3:
From Kathy Youla (Swom)> "Hi Dr Don, everyone is interested in the new Google plus project should perhaps read this first, there is a new phishing scam going round based on the new site blog.alertpay.com/2011/07/alertpay-scam-prevention-evenmore.html? Comment: Hello there, simply click on my picture and see my profile for the best money making program - do not wait click now and get the full details. Remarks: Need I say more? This one is not even addressed to anyone.
165
Some members repeated ask me to join the same program, which if that had read my profile, they would have seen I am already a member. The old offline tale of making 5 calls to make a sale does not work online. Online, it is easier just to call it Spam Some member repeats the same post several times or several different posts at the same time. Sort of overkill I would think. Monopolizing someones profile with your own interests does not help. Check a spammers profile and you wont see interaction; all you will see are posts after posts. Where is the relationship building?
166
167
168
D Detail Provide details A Action Call for action Create an urgency to act now. Creating a successful ad will take a great deal of time and effort. You'll need to write it and re-write it over and over again before you come up with a great ad. We all know the importance of a powerful headline. However, writing a great headline is not as easy as it sounds. An effective headline will literally force your potential customers to learn more. It will instantly ignite a certain emotion and intrigue them to read on. In order to write an effective headline, you must learn how to use specific words to achieve a specific reaction.
THE HEADLINE
Before writing your headline, you must first learn a little bit about the basic human motivators. According to psychologist Abraham Maslow, human behavior is always the result of one or more of five basic needs. He listed these needs in a sequence that he refers to as "the hierarchy of human needs." He believes that until a less important need is met; there will not be any desire to pursue a more important need. Below are the five human motivators, beginning with the basic needs and continuing to the most important needs. Physiological Basic human needs include hunger, thirst, shelter, clothing and sex. Human need for physical, emotional and financial security. Human need for love, affection, companionship and acceptance. Human need for achievement, recognition, attention and respect. Human need to reach their full potential.
Self-actualization
When you are aware of the basic human needs, you can incorporate these needs into your writing. A great headline will appeal to your potential customers' emotions. You must feel their needs, wants and desires and write your headlines with passion and emotion. When writing your headlines, keep in mind, you only have a few seconds to grab your potential customers' attention. If your headline doesn't immediately catch their attention, they'll simply move on and never return. Below are several different formulas used by professional copywriters to write compelling headlines?
169
free Spam software. They tell us what not to do, tell us how to do how to eliminate Spam, but they dont tell us how to be creative without using Spam. This reminds me of being in business; when managers come to you with their problems, but they dont offer a recommended course of action or alternatives to solve the problem. Therefore, our challenge remains, how to Write Headlines and Advertisements without using Spam that will still motivate the reader to click. Maybe someone that joins our group will have an answer for us all.
AVOID CAPS
Just because you think your message will be loud and clear in all caps doesn't mean it will actually make it to your recipient. Spam blocker software and email filters are designed to look for capital letters and will immediately flush your email.
AVOID REPEATING THE SAME WORDS AND PHRASES OVER AND OVER.
In advertising, you're taught to use a subtle message while driving home points within your copy. You can do this without being repetitive. Many people Buy Diet Pills and when they run out they Buy Diet Pills and what could be better than if you Buy Diet Pills. This is another tip off to spam and spam blocker software and email filters will catch it. Send your message to yourself using spam blocker software. If your own spam blocker software catches the email, chances are it's going to be caught by someone else's. Play around with your message until you receive it without your spam blocker software or email filter catching it. When it arrives in your inbox without being caught; you are ready for your email ad campaign to begin. Advertising-About
170
BANNER ADS
Affiliate posts and advertisement for your business in exchange for compensation when the banner ad produces a desired effect such as generating website traffic or generating a sale. The terms of these agreements are determined beforehand and are generally based on a scale of pay per impression, pay per click or pay per sale or lead. Now that you understand what banner ads are, it is also important to understand how they can be overused and appear to be spam. Judiciously placing your banner ad on a few websites which are likely to attract an audience similar to your target audience is smart marketing, placing your banner ad on any website which will display the ad regardless of the target audience can be construed as spam. Internet users who feel as though your banner ads are everywhere they turn will not likely take your business seriously and are not likely to purchase products or services from you because of your banner ads.
EMAIL CAMPAIGNS
Email campaigns can also be very useful tools in the industry of Internet marketing. These campaigns may involve sending periodic e-newsletters filled with information as well as advertisements, short, informative email courses or emails offering discounts on products and services. Loyal customers who opt into your email list will likely not view these emails as spam and may purchase additional products and services from your business as a result of this marketing strategy. Additionally, potential customers who have specifically requested additional information on your products and services will also find this type of marketing to be useful. However, email recipients who did not request information are likely to view your emails as spam. Harvesting email addresses in a deceptive manner and using these addresses to send out mass emails will likely always be considered to be spam.
MESSAGE BOARDS
Finally, message boards provide an excellent opportunity for business owners to obtain some free advertising where it will be noticed by members of the target audience. If the products and services you offer appeal to a specific niche, it is worthwhile to join message boards and online forums related to your industry of choice. Here you will find a large population of Internet users who may have an interest in your products. You might consider including a link to your business in your signature or posting the link when it is applicable to the conversation. However, care should be taken to carefully review the message board guidelines to ensure you are not doing anything inappropriate. This technique is smart marketing. Conversely, replying to every message with a link to your website when it is not relevant to the conversation is likely to be construed as spam by other members. Once they begin to view your posts as spam, they are not likely to visit your website via the links you post. Howtoadvertsizewithoutspam
171
PURCHASING MEDIA
Similar to pay per click options the key is to understand your conversion rate. Most media is purchased on a CPM basis. That's the cost per 1000 impression of your ad Google offers a contextual advertising network and depending on your budget there are many full service options available. Media for performance-based campaigns may be complex, but just be sure to make more than you spend.
EMAIL MARKETING
Collect email addresses from your users to keep them up to date on specials and other options. Email marketing is still one of the most cost effective and best ways to keep in contact with customers.
PROMOTIONS
I have one friend that makes his entire living off of an email list that he gives great Promotions of new products and services. It is sort of an early adopters program. Until I saw this, I never knew how effective they could be. Offer something unique that your audience wants regularly on your site. Hubpages
172
AD TRACKING SERVICES
LinkCounter A free service that tracks the clickthrough rates of your links. In addition to tracking your links, LinkCounter hides the URL of the link destination. This will prevent users from removing or changing your affiliate ID when visiting an affiliate site through your link. HyperTracker The PRO version of HyperTracker contains a number of advanced features including: unlimited advertising campaigns, tracking of sales and actions, special scripts that let you promote your own website address in your campaigns and much more. Adminder An online tracking system that will enable you to track an entire advertising campaign. It will enable you to see how many visitors were generated by each of your ads, keep track of sales that were generated by each ad and calculates the cost-per-click, cost-per-sale, and click-tosale ratios for each ad
173
If you'd rather not use any of the products and services listed above, you can use some alternative methods. Below is some example tracking methods you can use to track your response rates:
EMAIL
Track your email responses to specific ads by using the email subject. Select a specific word to be placed within the email subject for each ad. Although you can request that a certain word be placed within the email subject, many times it won't be supplied. To avoid this problem, you can create a special email link that will automatically fill in the subject when clicked on. Your link should look something like this: mailto:you@yourdomain.com?subject=ad1 Testing and tracking your strategies is an essential part of doing business. By concentrating your efforts on strategies that produce results, you can not only increase your sales, but you'll also save yourself a great deal of time and money. WebSourceNet TIP: AIDA is a standard (Advertising 101) for most advertising, but unfortunately, most of the headlines created will not pass through Scam/Spam Filters. What to do? Most Scam/Spam Experts Will Advise To Avoid the Use Of Scamp/Spam Words, So Our Challenge Is To Create Headlines And Ads That Motivate The Viewer To Click And Go To The Website And Let The Website Sell Their Program, Guarantees, etc.
174
success of a web page or website. A high search engine ranking is regarded as a more effective advertising tool than paid advertising. Among the plethora of strategies adopted by SEO specialists to ensure top search engine ranking are preparation of pertinent content, selection of the most appropriate keyword or key phrases for your product or service, implementation of meta tags, HTML validation and link building. Nowadays, a lot of SEO specialists are in the scenario to offer search engine ranking services. Many of them guarantee top search engine rankings. However, search engine ranking proves effective and beneficial only when professional and knowledgeable SEO personnel do it. Before you approach a SEO firm or SEO specialist, make a thorough analysis regarding its professionalism and Ethics. Be sure they prepare content-rich information and adopt the most sophisticated SEO tools to optimize your website. There are certain SEO firms that offer search engine ranking services for low rates. Hence, before choosing such firms, their quality of service must be checked. Further, make sure that the SEO firm that you have chosen solely engage in SEOrelated works, and does not treat it as a secondary.
175
Building an accurate keyword list is critical to the success of your search engine marketing efforts. Successful search engine marketers develop their keyword list first, and then build a single, highly relevant web page for each keyword phrase.
TYPES OF KEYWORDS
Before you being to create your keyword list, its helpful to understand the different types of keywords people use in search engines:
GENERIC KEYWORDS
The most basic words used to describe a product or service category, such as digital camera and accountant.
TARGETED KEYWORDS
Keywords that apply to one and only one product or service, such as Coolpix 2100 and tax accountant. As you build your keyword list, it will be important to brainstorm all three types of keywords, as each one has a unique purpose. Generally speaking, home pages are optimized for generic keywords, product category web pages are optimized for descriptive keywords, and individual product pages are optimized for targeted keywords.
BRAINSTORM
To start the keyword selection process, sit down with other people in your company and try to think of a few words and phrases that best describe your site, company, and products. Ask each person to come up with at least 50 keywords the more the better. If youre a one-person company, then ask your friends and relatives for help. You may also want to look at your internal search data for keyword ideas. If your web site has internal search functionality, mine that data to uncover phrases your customers use to describe the products or services they are looking for. Most importantly, ask your customers what terms they use when searching for specific products. Getting this feedback from them is crucial, as they will probably have a different, and possibly more accurate, idea of what keywords your potential customers are using.
176
You can take this process an extra step by incorporating fee-based tools like Wordtracker by Rivergold Associates Ltd. Wordtracker works in a similar fashion to Yahoo! Search Marketings Keyword Selector Tool, but offers additional options at prices starting at around $7 per day.
BE DESCRIPTIVE
Once you have your initial keyword list in place; expand on it as much as possible by adding descriptive and specific terms to each phrase. Including colors, geography, or location, plus brand names and model numbers will enable customers to find product pages more easily when they conduct searches. The more detail you can provide, the better results you will achieve.
BE RELEVANT
One of the most common mistakes people make in brainstorming keywords is including non-relevant keywords. Words such as weight loss and Brittany Spears may be highly searched, but if they are not relevant to your business, you should not include them in your list. In fact, you will be penalized for keyword stuffing by using these words.
177
getting audio or video news and information simple and fast. Keyword based video advertising will get increasingly popular as the cost of broadcasting that video over the Internet falls and as more and more people can see that video clearly (as a result of increasing access speeds). How neat would that be if we could see a video of the product or service before we actually bought it, or see the people behind the company that sell us that "catalytic converter". Online advertising via video feeds to your cell phone from live or recorded messages are only a moment away. Technology is moving so fast even the online advertising industry can barely come up with applications that meet the changing (and better) Internet technologies. The future of online advertising looks bright and very exciting to be sure. It is up to you to make sure you understand the changes that are taking place and up to you to become part of the online advertising boom.
KEYWORDS SPAMMING
(Repeating the same keywords): Never use keywords spamming or stacking. The search engines will downgrade and penalize your website for doing this. Instead, use keywords rich content on your page.
178
E-COMMERCE SITES
E-commerce sites - sell things. E-commerce sites make their money from the products they sell, just as a brick-and-mortar store does.
CONTENT SITES
Content sites -create or collect content (words, pictures, video, etc.) for readers to look at. Content Web sites make their money primarily from advertising, like TV stations, radio stations and newspapers. Banner ads the ads you see at the top of almost all Web pages today. In 1998 or so, banner advertising was a lucrative business. Popular sites like Yahoo could charge $30, $50, even $100 per thousand impressions to run banner ads on their pages. These advertising rates provided fuel for much of the venture capital boom on the Web.
179
The economic principle of "supply and demand" works the same way on the Web as it does everywhere else, so the rates paid for banner advertising began to plummet. Today, if you shop around, you can buy banner ads from thousands of Web sites or brokers for 50 cents or so per thousand impressions -which are exactly what they are worth to a person who is trying to sell something with banner ads using a direct sales model. But for most other Web sites, there is very little money to be made from banner ads. In order to charge more than 50 cents per thousand impressions, Web sites have to offer ads that either: Have a lot more branding power or Get a much higher click-through rate
Pop-up and pop-under ads annoy many users because they clutter up the desktop and take time to close. However, they are much more effective than banner ads. Whereas a banner ad might get two to five clicks per 1,000 impressions, a pop-up ad might average 30 clicks.
180
Therefore, advertisers are willing to pay more for pop-up and pop-under ads. Typically, a pop-up ad will pay the Web site four to 10 times more than a banner ad that is why you see so many pop-up ads on the Web today.
FLOATING ADS
If you have ever been to a Web site that uses them, you know what "floating ads" are. These are ads that appear when you first go to a Web page, and they "float" or "fly" over the page for anywhere from five to 30 seconds. While they are on the screen, they obscure your view of the page you are trying to read, and they often block mouse input as well. Floating ads are appearing more and more frequently for several reasons: They definitely get the viewer's attention. They are animated. Many now have sound. Like TV ads, they "interrupt the program" and force you to watch them. They can take up the entire screen. From a branding standpoint, they are much more powerful than something like a banner ad or a sidebar ad they cannot be ignored. They have a high clickthrough rate, averaging about 3 percent (meaning that 30 people will click through for every 1,000 impressions of a floating ad). The high click-through rate, as well as the greater branding power, means that advertisers will pay a lot more for a floating ad -- anywhere from $3 to $30 per 1,000 impressions depending on the advertiser and the ad Because they can pay a lot of money, Web sites are willing to run floating ads. The only problem with floating ads is that they annoy people. Some people become infuriated by them, and will send death threats and three-page-long rants via email. That is why you do not yet see them everywhere. The annoyance problem points out something interesting about advertising, however. When pop-up ads first appeared, they bothered lots of people and you did not see them on very many sites. After a while, people got used to them and stopped complaining, and now pop-up ads can be found on tons of sites. As people get used to floating ads, they will become more common.
WHY YOU SEE SO MANY ADS ON WEB SITES TODAY? IT IS EITHER: LOTS OF ADS
Switch over to subscriptions (hope you can get 50,000 people to subscribe -- no easy task).
OR GO OUT OF BUSINESS
A Web site is a business, and it must cover its expenses to survive. HowStuffWorks-Bain
181
More and more business people understand the power and simplicity of search engine marketing and how online advertising benefits their business (in terms of sales). So yes the US economy is shrinking, ever so slightly, however online advertising (specifically search) continues to grow. The world of online advertising can be divided into a several different advertising options. These options are not exclusively the only areas from which to choose, however they represent the most popular areas within the online advertising menu.
182
search. Classified ads run at a cost per space and not for visitors directed to your website so again you are paying per thousand page impressions whether people click on your ad or not.
LEAD GENERATION: 6%
Lead generation 6% of all advertising spending last year, or over $1.4 billion dollars. It is interesting to see Google use lead generation in some cases since we all know Google is getting short end of the stick on their paid keyword based advertising (per click). How do we know that? Well if I am a company and I spend $1 to make $3 from traditional advertising (TV, radio, newspaper) and now I am spending money with Google to the tune of $1 for each $9 in revenues then it stands to reason that Google is getting the sorry end of the stick compared to the cost of traditional advertising. Some argue this is exactly why keyword based search advertising is destined to grow.
RICH MEDIA: 4%
4% of all spending last year or almost $1 billion dollars. This sort of relates to display ads, except that these ads are video targeted and most networks know that the targeting aspect alone will improve conversion rates. In advertising, the better the targeting, the higher value and the greater the advertising revenues. Could this be why Google bought YouTube for over $1.5 billion dollars?
EMAIL: 2%
Holding on at 2% of total online advertising last year. Hard to believe email advertising accounted for $500 million dollars in revenues last year. That is a lot of money spent on email advertising. eMarketer
183
OPTING IN
There is one very important thing you should remember about list building and that is permission. It is considered an unethical practice for a legitimate online business such as yours to include email addresses of people to your list when they did not agree to such an arrangement. Without an express permission from these people, your email messages, no matter how well intentioned, will be viewed as spam. Effective list building involves permission-based marketing which comes in the form of the opt-in listing. The opt-in list is simply a list of email addresses of people who agreed to a specific offer you made. Without this explicit expression of acceptance, you cannot and should not include these individuals in your list, no matter how tempting or valuable they are.
184
185
your current subscribers to forward your email newsletter to others. Following these MLM list-building strategies will help you attract qualified and educated MLM prospects. Techniques
I'm going to describe a few ways to get started below. If you don't understand some of the things that I talk about mention, don't worry I will do my best to clear things up for you in upcoming articles. And remember if you have any questions you can contact me at any time. Just use the link in my author box to visit my blog. Let's get started...
186
187
some of the basics in SEO words, where to promote your blogs, websites, or articles you write online for like ehow, or other writing sites.
INSTRUCTIONS
Use good SEO words. This is one of the most important ways on driving traffic to your sites, and promotes your work. Search engine optimization is using search friendly words that are familiar with what you are writing, or product you are using to sell. If you are going to drive in traffic to your sites, you need to understand simple terms of SEO words. For help, use Googles search-based keyword tool. This will help beginners to writing online, or blogs. Sometimes it can be difficult, and easy, it takes time adjusting. It is very important if you want to make money on the Internet. This will help promote more traffic to your blogs and articles.
188
I retreated to my 1-on-1 networking, just me and my computer. I knew the computer and it knew me and my frustrations. Although I belonged to several social networks including a paying Direct Matches, now called myNetworkingPro, I could not find the satisfaction that I was looking for in trying to interact with these members. For the most part, unless they were really social, the interaction was more of spam and link pushing than trying to get to know me and interact with me. As of this writing, myNetworkingPro has gone into Phase2 with a cleaner interface, improved communications, etc., and is now considered a must-have social business network and is the largest such site online. Swom became my first real social business network where I took an early position and leadership role in helping others focus on business, connecting and interacting with others. Since then I have added several others all of which support our ISA Groups: Swom, BizOppers, Fast Business Network (formally Sonar 247), ISMmagic, myNetworkingPro and APSense. While these sites all have different personalities, benefits, etc., the members all represent leads, FREE Leads for your business opportunities. While the previous post Use social networks to promote your work closed with If you want to make really good money, I wouldn't rely on that alone, though. I havent found the statistics as yet, but I feel that these social business networks are increasing market share as advertising resource that cannot be ignored.
I am sure not many might admit it, but every member that you connect with is a potential Lead for your business ops, but like many downlines, the numbers mean little, unless you learn to cultivate them. Unlike neighbors, that you cannot always choose, members can be connected and disconnected. (I disconnect with the spammers and link pushers) Be sure to consider Social Networks as one of your better resources. Where else can you talk and interact with your leads.
189
It's important to understand that simply submitting your blog to search engines doesn't mean your pages will appear at the top of a Google search results screen, but at least your blog will be included and will have the chance of being picked up by a search engine.
190
DON'T BE SHY
The most important part of the blogosphere is its community and much of your success as a blogger will be tied to your willingness to network with that community. Do not be afraid to ask questions, join conversations or just say hi and introduce yourself. Do not sit back and hope the online world will find you. Speak out and get yourself noticed. Let the blogosphere know you have arrived and have something to say! BloggingTips
191
During the past three years online, I've learned some great ways to do just that. Today I'd like to share them with you. Don't worry; I'm not going to tell you to spend days and days at free classified sites or newsgroups. The methods I will be sharing with you are much more powerful. So how does the costconscious marketer get the best free and low-cost exposure? Simple. By utilizing various forms of the best free marketing tool ever invented... email! There are many ways to utilize email marketing. For the most part, email marketing can be broken down into two distinct categories... Targeted and Untargeted. First, I'll touch on the untargeted, just to show you why it is a waste of time.
EZINE ADVERTISING
I'm a big fan of Ezine advertising and regularly utilize this low budget technique. I'm not just saying that to drum up advertisers for my own newsletter, actually I have a waiting list of about a month just to get an ad in here. Why? Quite simply, email advertising works! Take a look at the advertising section of your favorite email Ezine. The reason there are so many ads there is because the advertisers get results. Not only do you reach your target audience, you reach
192
them by the thousands. Of all the online marketing methods available, Ezine advertising could be the most effective. Many larger companies are just starting to realize this and are entering into this exciting new advertising medium. Compared with the high costs of web site banner advertising, Ezine advertising is a bargain. One-step better than "advertising" in Ezines, is actually publishing your own. If you are not already publishing your own e-newsletter, I highly recommend you do so. It is much easier than you might imagine. Your customers and prospects will constantly be "in touch, your Ezine can keep them abreast of new products, and services as you make them available. You can also generate income offering classified or sponsorship advertising if you wish. Unlike traditional newsletters, there are no printing or postage costs. Since your own cost is zero, you can offer free subscriptions, thus insuring a steady flow of new prospects. To get started publishing your own Ezine, you do not need to pay for list management. You can manage and deliver your Ezine yourself with a good email program like Qualcomm's Eudora or Pegasus Mail by David Harrris. These are the best email programs available on the Internet and they can be downloaded for free at the following URL's http://www.eudora.com, http://www.pegasus.usa.com Once you have your email program installed, practice mailing to a few people at once by using the BCC (blind carbon copy) feature. It's important to use the BCC field when mailing to a list. This insures that everyone on the list does not see other email addresses on the list. No one wants their email address publicized all over the net. After you have perfected your emailing skills, all you need is some subscribers. That is easy; simply post a message announcing your newsletter to the "NewList Announcement List". Full details on posting are here: http://scout.cs.wisc.edu/scout/new-list/format.html
193
To find some discussion groups on your particular area of interest, visit http://www.egroups.com. While you're there you can even start a group of your own! Now that you are armed with the facts about email marketing, go out and start your email marketing campaign today! And remember, whatever email marketing method you choose, be sure that everything single email you send out includes your URL and a brief description of exactly how YOU can be of service to anyone who may be reading that email! JimDaniels
GO TO THE CATEGORY
Go to the category that you are considering and check out other ads listed. See how they are set up. This will also show you if they furnish active links and how they are set up. If the site does not provide active links then you have to include your site URL and/or email address in your text if appropriate.
When reviewing the ads, check to see if any are similar to your ad. If so, consider changing your headline or wording to make it a little different. Also check the sequence of dates of the ads (if the dates are listed) to see whether your ad will be entered at the top or the bottom of the list. Many of the sites rotate, with the oldest falling off as new ones are added.
194
Some sites also offer upgraded or premium ads. For an additional nominal amount they will list your ad with a color headline and your ad will stay at the top of the category you choose for a predetermined period. Some of the upgrade offers are pretty good and insure that your ad will not get lost in the hundreds of other ads that may be in the same category. Remember, your goal is to create traffic to your web site or inquiries regarding your product and/or services. This is just one of a number of avenues to use in your marketing plan. You should also include paid advertising, direct email (not spamming), and targeted advertising in Ezines such as the one you are reading. JoeRienbold
195
CHALLENGES
As marketers fall over each other to reach the growing online audience, hosts of challenges remain for them. Because online advertising is a new frontier, marketers often find themselves crossing ethical boundaries for users. email advertising led to spam, or unsolicited email, which has almost ruined the email experience for many people. Advertisers also started using pop-up or pop-under ads that served an ad in a new browser window, forcing people to close the window and view the ad. That led to people using popup blocking software, now a standard feature in the Firefox and Internet Explorer browsers. Advertisers have had to worry about being associated with these types of ethically challenged ad methods online, along with adware and spyware companies that deliver ads via software that's loaded onto unsuspecting people's computers. In one example, ads sold by Yahoo in its search-advertising network ended up being served through adware companies unbeknownst to the advertisers. So their ads showed up through adware companies that might have upset viewers -- not exactly a good forum for selling or promoting a product. Advertisers also face the challenge of gauging just how many people have viewed online ads. Tracking ads online is a tricky proposition, despite the Internet's claim to better trackability. The problem is that it's difficult to gauge how many unique people are actually viewing an ad, versus the same people viewing the ad multiple times on different computers, or automated Internet spiders or bots that scour the web for search engines. Pay per click (PPC) is an Internet advertising model used on websites, in which advertisers pay their host only when their ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market. Content sites commonly charge a fixed price per click rather than use a bidding system. Wikipedia The article was sourced from Internet World Stats which is also a great resource for targeting your advertising marketing campaigns. Internet World Statistics provided the scope of the user and scam problem in an earlier section. The following breaks down the data for further analysis and as a useful tool for your target marketing where to place adverting, who you are trying to reach. Click the link for an additional break down of the data. Internet World Stats
196
13.19 SAFELISTS
ARE SAFELISTS SAFE?
If you are like me, you are ALWAYS on the lookout for an easier way to sell your products, get people to join your opportunity, or subscribe to your Ezine. Today we take a look at how to do that using safelists. Safelists CAN BE one of the hidden gems of Internet marketing. You can sell any product or service with safelists, but if you are a member of SFI, Cash Evolution, or another opportunity-oriented program, pay special attention. If you've ever wondered "Do people really READ that mail?" or "Isn't that just a trick to get my email address?" then read on. Today we look at the good, the bad, and the ugly when it comes to safelists. Here is a situation that happens every day. A person, much like you or me, who wants to quit the dayto-day grind of working for someone else, joins an affiliate program. Alternatively, maybe they create an eBook. Or maybe they invent a product they want to sell. In any event, they are now entering the world of Internet marketing. That is right folks, 97% of us will fail online. The only sure way to become one of the 3% (no, I am not selling an eBook) is to use EVERY tool to your advantage. Let's look at one of the lesser known, yet more powerful, tools available.... safelists.
WHAT IS A SAFELIST?
A safelist is an email mailing list that people join (of their own free will) which enables them to send email offers to all the other members in exchange for agreeing to receive email from those other members. So you get to mail, but you have to agree to receive mail too. And no one gets spammed. Some safelists are free while others charge a small annual fee. Those that charge a fee often offer you the ability to send mail without having to receive any. So how does this crazy arrangement work? Don't people just sign up with a Yahoo account and never read the mail in order to get to send mail? Today, safelists have grown up. It had to happen. After all, every advertising medium started out rough and then became more polished.
197
198
see the same ad seven times in order to buy), in addition to the many new people who join the safelist every week. It doesn't matter if you are sick to death of your ad. It matters that your ad works. When it stops working, pull it. Until then, if it ain't broke ... don't fix it.
199
It is free to email to the whole list you can mail to Fills your email box with thousands of offers from all free and paid subscribers. other subscribers. Email to thousands immediately Pays commissions on referrals No tracking of ads provided email once a week only
200
Cons
Email the list (free and paid) every day or Most customers will not see your ad at all. People on these lists are more concerned about others every2days seeing their own ad, than seeing yours. Does not require you to receive other email ads Lose money if you paid to subscribe, but did not get from subscribers. any sales. Membership fees are low Tracking of your ads Pays higher commissions Personalize your messages This is just a general list of safelist features; however, each safelist has its own unique features and benefits.
201
Traffic exchanges usually enforce a credit ratio, meaning members earn a certain amount of credits for visiting one member site, and each credit is translated into one page view. Ratios can vary from program to program so before registering for a traffic exchange it is wise to check out their ratio first. A ratio of 1-1 is best, that way you will get your page viewed once for every (1) page you view. All traffic exchanges have specific viewing times of all member pages. These viewing times can range from 10-30 seconds, so whilst surfing the system, every page that is shown to a member will remain in view for 10-30 seconds, you will not be able to proceed to the next site until the specified time has passed. Most traffic exchanges have a toolbar at the top or bottom of the page that has a timer on it so you can see when the timer reaches 0 and it is ok for you to continue on to the next page. This is put in place to make sure each member site is promoted equally and fairly. If you try to go on to the next page before the timer reaches 0 you will be penalized in some way, the penalty varies from exchange to exchange. To make surfing traffic exchanges a little more interesting, some services offer different ways to surf such as, playing games for credits or listing to radio stations whilst surfing. If you do not want to surf manually for credits you can purchase them, again prices vary. Many traffic exchanges are free to join but also have Pro versions that allow you to generate more credits from referrals. Always thoroughly check out what is available in the Pro version when you first sign-up.
202
Yep, your time is going to run out and the surfer will move on to the next page without having read a word of your page. How can this be avoided?
203
Website rotators make adding, editing or deleting your URL's so much quicker and easier. All you need to do is put the URL's of the websites you wish to promote into your rotator, then the rotator gives you 1 single URL to use on your traffic exchanges. This changes the equation dramatically. Now, if you have the same 10 TE's and the same 5 websites, when you want to make changes, instead of having to go to 10 sites and make 5 changes on each, you will only have to make 1 change on your rotator. The website rotator will rotate all 5 of your websites using 1 single URL. There are many rotators available online such as Free Rotator, TPM Rotator and HotScripts to name a few. I have recently started using Page Swirl; this rotator is a free service with options to upgrade to the paid service if you wish. I like this rotator because there are no pop-up or ads, it is totally transparent so no one will know you are using a rotator and you get up to the minute stats. This rotator is simple to use and most of the changes you wish to make to your URL's can be done in just a few clicks. When you are adding your rotator URL to the traffic exchanges, remember to check the terms of service, as some traffic exchanges prefer you to use specific rotators or their own rotators. Squidoo TE
QUESTION: "ARE YOU SICK AND TIRED OF WORKING FOR SOMEONE ELSE?"
Headlines written in the form of a question are very effective, as they appeal to your potential customers' emotions. When they read a headline written as a question, they will answer the question in their mind. If the question identifies a specific need, want or desire, they will read on.
204
TESTIMONIALS: "INTERNET MARKETING EXCLUSIVE IS PURE GENIUS -- OUR SALES HAVE INCREASED BY 40%!"
Headlines written in the form of a testimonial are very effective, as they instantly begin building trust. When writing your headlines, certain words, when combined together, will literally draw your readers' attention to your ad See List for "Power Words" that consistently work. Just as certain words ignite different emotions, certain subjects have a broader interest than others do. Some of the most popular subjects include wealth, love, health and safety. Take your time and try the different formulas according to your needs. Use a combination of the power words and write a headline that sells. By learning the art of writing headlines that focus on the basic human needs and emotions, you can increase your sales considerably. WebSource
205
206
rate of a currency versus other currencies is a reflection of the condition of that country's economy, compared to the other countries' economies. Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Overthe-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period. Until the late 1990's, only the "big guys" could play this game. The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with! Forex was originally intended to be used by bankers and large institutions - and not by us "little guys". However, because of the rise of the Internet, online Forex trading firms are now able to offer trading accounts to 'retail' traders like us. All you need to get started is a computer, a high-speed Internet connection, and the information contained within this site. BabyPips.com was created to introduce novice or beginner traders to all the essential aspects of foreign exchange, in a fun and easy-to-understand manner. BabyPips
24 HOUR MARKET
Since the Forex market is worldwide, trading is continuous as long as there is a market open somewhere in the world. Trading starts when the markets open in Australia on Sunday evening, and ends after markets close in New York on Friday.
HIGH LIQUIDITY
Liquidity is the ability of an asset to be converted into cash quickly and without any price discount. In Forex this means we can move large amounts of money into and out of foreign currency with minimal price movement.
LEVERAGE
Forex Brokers allow traders to trade the market using leverage. Leverage is the ability to trade more money on the market than what is actually in the trader's account. If you were to trade at 50:1 leverage, you could trade $50 on the market for every $1 that was in your account. This means you could control a trade of $50,000 using only $1000 of capital. Typical 100:1 leverage is used
207
CHOOSING A BROKER
There are many Forex brokers to choose from, just as in any other market. Here are some things to look for:
LOW SPREADS
The spread, calculated in "pips", is the difference between the price at which a currency can be purchased and the price at which it can be sold at any given point in time. Forex brokers don't charge a commission, so this difference is how they make money. In comparing brokers, you will find that the difference in spreads in Forex is as great as the difference in commissions in the stock arena. Bottom Line: Lower Spreads Save You Money!
QUALITY INSTITUTION
Unlike equity brokers, Forex brokers are usually tied to large banks or lending institutions because of the large amounts of capital required (leverage they need to provide). Also, Forex brokers should be registered with the Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). You can find this and other financial information and statistics about a Forex brokerage on its website or on the website of its parent company. Bottom Line: Make Sure Your Broker Is Backed By A Reliable Institution!
208
TYPES OF ACCOUNTS
Many brokers offer two or more types of accounts. The smallest account is known as a mini account and requires you to trade with a minimum of, say, $250, offering a high amount of leverage (which you need in order to make money with so little initial capital). The standard account lets you trade at a variety of different leverages, but it requires a minimum initial capital of $2,000. Finally, premium accounts, which often require significant amounts of capital, let you use different amounts of leverage and often offer additional tools and services. Bottom Line: Make Sure The Broker You Choose Has The Right Leverage, Tools, And Services Relative To Your Amount Of Capital.
209
But the Commodity Futures Traders Commission (CFTC) has developed warning signs to help traders protect themselves from unscrupulous dealers. All traders should be aware of these signs and report this type of activity to the CFTC or the National Futures Association.
SIGNS
A company that guarantees large profits A company that promises little or no financial risk A company that claims to trade in the Interbank market A company that refuses (or delays) giving their performance track record A company that engages in high-pressure tactics Any company that encourages quickly transferring money by overnight delivery or the Internet Any company that contacts you by unsolicited phone calls, particularly using offshore salespersons Not every company that engages in these activities is fraudulent. However, any type of high pressure sales activity, particularly involving the transfer of cash, is a cause for concern. And, of course, any opportunity that sounds too good to be true should also be cause for concern. A trader can investigate a brokerage firm that they suspect could be engaged in fraudulent activity. Any individual can perform a search on the National Futures Association online directory. The NFA will have information (including complaint and disciplinary history) on every member broker. This information can be very useful. However, since membership is voluntary, some legitimate companies do not belong to this organization. Otherwise, a trader can check on a company through the Commodity Futures Trading Commission (CFTC), the Better Business Bureau, or Consumer Protection Bureau. WarningSigns
210
211
MACD
MACD is the most famous indicator, which is built on the basis of difference of the average values. This indicator was suggested by Jerald H. Appler as the difference between two exponentially smoothed averages (EMA). MACD is the most effective under conditions when
212
the market swings with high amplitude in trading. The most frequently used signals of MACD are intersections, overbuying/overselling states and divergences.
213
Forex system sites; a good broker will give you the proper disclosures and documents for you to read, understand and sign. Nothing can be guaranteed! Take the advice of most brokers or experts and practice using a demo account for 3-6 months or until you have a good understanding of the platform, the charts, the indicators, and are experiencing a high probability of success in your trades. Be aware the money used in the demo account, call it USD5,000 is probably more than you will want to invest, so no matter what the result, scale the result down to the size of your investment.
214
ACCEPT RESPONSIBILITY
All the best traders know that no one else will give them success and there on their own Most new traders however think they will win by following a cheap piece of software, so they buy one of the numerous Forex robots or laughably named Forex Expert Advisors and think they will make money with no effort, guess what? They all Lose Money! If you want to win you have to accept you need to get an education and this is needed to give you confidence in what youre doing, because if you are not confident you won't be disciplined and will lose
DISCIPLINE
All the best traders know they are going to lose money at some point and their aim is to keep losses small, they don't mind losing because they know they are going to hit trends again and run them, to cover their losses. To win you need to be disciplined, keep your losses small. This is hard for most traders, they take losses personally and let them get out of control and lose. If you want to be a winner learn to take them and your time will come, when trends and profits reemerge.
COURAGE
All traders have the courage to make their own trading decisions, are prepared to standalone, and against the majority opinion, while this can be uncomfortable, keep in mind 95% of traders lose so its the best place to be!
REALISM
The best traders are trading Forex for long-term gains and they have realistic expectations about how much money they can make. Don't try to hurry profits and expose their accounts to unnecessary risks. Many new traders think theyre going to double their account in a few weeks or get rich quick but consider this - the best traders in the world aim for 50 - 100% per annum, in terms of compound growth so if you achieve that, youre up there with the best.
215
If you can get the right Forex mindset, you can enjoy currency trading success and earn a great second or life changing income. Always keep in mind in Forex trading the trader doesn't get beaten by the market, he beats himself.
AFFILIATE HEADLINES
According to your fellow affiliate headlines for their various Forex Programs, its simple, just click, walk and way and you never lose. Whether you have been online or you are new to the Internet, and you are seeking to earn extra income, make money; your email will bring you hundreds, if not thousands of offers including Forex affiliate offers. Taken at face value, the headline offers are almost irresistible to your emotional needs or passion to find something that will make you money. By now, you should have learned to recognize the obvious signs of false and misleading advertising. These are your fellow affiliates trying to catch your eye with non-compliance spam, untrue email headlines - they want your money!
216
Want to break out from the boring and frustrating routine of hard work and no money (but frequently a lot of debt!) Want to start making money today, not 2 months from now! You Need To Know ABSOLUTELY NOTHING About The Forex Market Or Forex Trading To Benefit Day In And Day Out From FAP Turbo's Cash Producing Power... Living A Worries-Free...Debt Free... Luxury Life Is a Reality No One Should Pass We are giving a select group of people the opportunity to live the dream that EVERY single trader in the world has: trading with an automatic Robot that doubles cash every month! You Will Experience The Real Deal...You Will Experience The LIVE Proof....And You Will Experience Why FAP Turbo Is Not Just A Claim...But One Of The Most Profitable Forex Robot In Existence... 100% No Questions Asked Money Back Guarantee... GIVE Me The FAP Turbo Details NOW!
IVYBOT HEADLINES
Attention! You Are About To See a New, Never Before Released Program that Makes Millions! Would You Like A Sneak Peak? WHY THE IVYBOT? Developed by Ivy League Graduates, 4 Separate Robots at 1 Price, Free Robot Upgrades, 100% Hands off Trading Robot, No Experience Necessary, Most Profitble of All Robots $ 500 Turning Into $ 3,736 - In 30 Days, - $ 2,500 Turning Into $ 9,733 - In 45 Days $ 5,000 Turning Into $ 17,154 - In 60 Days, - $ 10,000 Turning Into $ 36,391 - In 90 Days Now It Is Time To Get Real.... Are You Ready? Come See the Results, Be a Part Of The Phenomenon, Watch the Exclusive Webinar. 100% No Questions Asked Money Back Guarantee...
COMMENTS
Personally, I prefer having the choice of monitoring several trades and yes you can make trades with your broker outside of those initiated by the robot, or you can double up or more on their recommended trade if you like it. Remember with Forex MegaDroid, you can trade only trade one pair: EUR/USD. If for example, the EUR is strong against the USD, then EURO may be strong against other currencies as well. I never like just putting my money into just one revenue source. Depending on your Broker, you can double up on the trade if you like what the expert is doing, or you can trade other pairs at the same time. How much you can trade, depends on your deposits and the size of the trade. If you are on a limited budget, then maybe you can only make one trade. If that trade is going against you; then you will not have money to counter-trade or to protect yourself. This Ad also says No Experience Necessary and Most Profitable again. Since these guys are a new bot, how can it be established that they are most profitable over time?
217
If all trades are International; how are these how are these guys doing so well? Then I must be doing something wrong, as you will see As discussed in the following, IvyBot has and continues to be a loser for me. Now whenever IvyBot want to make a trade, and I am not there to watch the trade, I feel I am at risk. I have no confidence in IvyBot; or their support system. If IvyBot is making multiple trades, some of which are profits; take your profit to help offset your losses, before you leave or shut down the computer. If there are no trades; one way to protect yourself, is to click the Expert Advisor tab, before leaving your computer. This will keep Ivy from executing trade while you are gone and you may want to leave the computer running, if you have other trades, or whatever Smiles, I understand that the word whatever was recently voted the United States most annoying word? I wonder what was second. IvyBot tale of set it up and "Just Walk Away - doesn't work. Leave the computer and let the Bot do its thing - doesn't work! Obviously, after taking such a loss on my first trade; I have been trying to dig my way out of the hole. The other day, I finally reduced my loss to something less than 50% (sounds a little funny, but going from 82% down to 50% down is a reduced loss). I left the computer and IvyBot running and retired for the night. The next morning, I found the Ivy has struck again during the night on another bad trade (a buy, instead of a sell), and I had lost 56 pips before it shut itself down. Talk about losing money while you sleep, and another DO NOT Just Walk Away lesson. Take your time to learn about the platform, orders and charts, etc. For those of you are still laughing, youre correct, I didn't know I could "right click" on the order number and close it or modify it. Let us call it a good first trade mistake and an expensive lesson. See the video link above
218
..http://www.forexpeacearmy.com/metatrader_expert_advisor/ivy_bot/demo Thanks, IvyBot team" Of course, I felt that this autoresponder form of response was less than humane and certainly lacked the personal touch that a client who had just lost 82% of his portfolio should have received. I guess the Ivy League School's do not teach customer relations or basic business. After some, more follow up from me, which included a constructive review and evaluation of their site; the errors of omission, the conflict between their videos and printed matter, etc., guess what after all my efforts, I finally got another reply: "We're very sorry you are having difficulty. We are seeing much better results than this. Please make sure you are using a recommended broker and that you are using default settings. We are seeing results much like at this site. ..http://www.forexpeacearmy.com/metatrader_expert_advisor/ivy_bot/demo Thanks, IvyBot team" I would have expected something like, "Thanks for your input, we are working it, we will get back to you soon", etc. Fundamentally, I just wanted to know what went wrong; my IvyBot are properly configured, per the video; and once set up "Just Walk Away" which they "hype" several times on their site. My mistake - I did walk away, expecting that the system would take care of me, and protect me against such an "extraordinary" loss. I found an article on the web saying that IvyBot doesn't use a "Stop Loss" and upon pressing IvyBot, they claim they have an internal trigger that doesn't show on the order. I guess the trigger did not work in my case. Since this experience, I do not walk away and have watched other Ivy trades that were going bad, and then were cut short. This has left me with the impression that this is a Manual "Close Order" rather than the so-called robot doing it thing. Manual must have been asleep at the switch on my 1st order. The experts will tell you to use a "demo" account, practice until you are profitable for most of the time, before going "live. Again, this is great advice for learning the platform, orders and charts. Too bad, I am from the old school of OJT (On the Job Training). I guess I like my knuckles cracked a few times, and when you are "live, you pay more attention - least I do now. It is a job, not a hobby; it real money not play money. TIP: This Is Where I Should Say Do as I Say and Not As I Do; Practice With the Demo Account Take a meal break before you set up your trades and decide to take your profits and/or losses or let them ride.
219
If you leave the computer running as I said before, the IvyBot can get you while you are gone. We all would like to believe a bad trade can be offset by a good one. However, I am still waiting the really good one, up 206 pips (EURJPY) or 56 pips (USDJPY). TIP: Read and Listen, Join Forex Forums. One misspoken word or a decision can rile the markets.
MEGADROID HEADLINES
No Forex Broker in the World Will Ever Know You Are Trading With Forex MegaDroid; No Forex Broker Will Ever Be Able To Stop Forex MegaDroid From At Least Quadrupling Every Dollar You Deposit; setting a new standard in automatic FOREX signals is FOREX MegaDroid. What separates it from the rest is the 38 years of experience the creators have trading FOREX & the software is undetectable by FOREX brokers (which is why most systems don't work). We decided to give this baby a try using a free account prefunded with $ 25. In 30 days we had generated nearly $ 1,250. And all we did was enter the trade when it said and exit when we wanted to pocket the cash! You don't have to baby sit your trades at all... You don't use any form of judgment.... You can fit it around your 9 - 5 (if you have one)... You just spend 5 minutes setting up the software, and then let it automatically give you advices and be off for the day... Forex MegaDroid HAS Proven To Spit Out Unheard Of, Industry Breaking Performance, YEAR AFTER YEAR...Steadily And Consistently Producing As Much As 100% NET Profit Per Month... Not Only Has Forex MegaDroid Withstood the Test of Time in the "Old" Market Reality... Because of RCPTA Technology, it has adapted to the NEW Market Reality to the Tune of OVER 100% NET Profit per Month... 100% No Questions Asked Money Back Guarantee...
COMMENTS
I strongly disagree with their statements You don't have to baby sit your trades at all, You don't use any form of judgment, You can fit it around your 9 - 5 (if you have one), You just spend 5 minutes setting up the software, and then let it automatically give you advices and be off for the day MegaDroid only trades one pair; the EUR/USD. I dont know how these jokers claim to have funded a free account with $25 and claimed to have made$ 1,250? I have not seen MegaDroid initiate enough trades to earn that much on a $25 bill. Ok someone tell me I have been out of the country too long. Demo accounts are usually pre-loaded with $5,000 or more. This $5,000 package gives you a false sense of earning lots of money, which you will not earn, especially if you only fund your account with $50-500. My first trade with MegaDroid resulted in a minor loss (4.5%). What was strange was that I like the trade, would have made it myself; but the robot cut it off early and did not cover the spread. The next
220
two trades were profitable but small; again barely covering the spread. Some of the EUR/USD trades available that I thought the bot should have participated in it did not. Over the last 3 days 12-15 October the EUR has climbed through the roof while all the experts said to sell. My mistake was listening to the experts and was heavily invested when I should have done my usual thing. Instead of realizing this steady increase and taking advantage of it MegaDroid did nothing, unless there was some wrong with my machine. No Buy trades were made WARNING, Broker FXDD (or any broker) will not let you continue your losses while you wait for the market to come back. It will execute a StopOut that will close All your transactions (winners and losers) once your equity is gone.
221
222
I am comfortable to discuss my experiences, mistakes, etc. If you decide to venture into Forex, I hope that you will learn and gain from my mistakes and not repeat them. Let there be no question about it, it is dangerous, fast moving and yes - you can lose everything fast; it is a gamble. Later I will tell you why I love it. While most sites offer you a demo account, you will need a broker to trade live. If you read the fine print offered by your broker; then the real picture, the real risks are explained, and all of the hype provided by the site and their affiliates will be dispelled. Regardless of what you have been sold or led to believe, you can lose and lose big fast in Forex trading. I lost 82% of my investment on my very first trade! Most brokers are regulated; site owners and affiliate are not. Regulated The experts will tell you to use a "demo" account, practice until you are profitable for most of the time, before going "live. This is great advice for learning the platform, orders and charts. Too bad, I am from the old school of OJT (On the Job Training). I guess I like my knuckles cracked a few times, and when you are "live, you pay more attention - least I do now. It is a job, not a hobby; it real money not play money. TIP: This Is Where I Should Say Do as I Say and Not As I Do; Practice With the Demo Account TIP: Take a meal break before you set up your trades and decide to take your profits and/or losses or let them ride. I lost money just going to the toilet, but at least I was a bit relieved, while my wallet was also relieved of some cash. If you leave the computer running as I said before, the IvyBot can get you while you are gone. We all would like to believe a bad trade can be offset by a good one. However, I am still waiting the really good one, up 206 pips (EURJPY) or 56 pips (USDJPY). TIP: Read and Listen, Join Forex Forums, Etc. One misspoken word or a decision can rile the markets. Recently while still trying to recover from the Sept 29-1Oct AUDUSD market which went rapidly north of nearly every expert and Bot order to " SELL" Hype: Does it make sense; use your gut and your brain. IvyBot should put out some Affiliate Guidelines for advertising; the "the IvyBot program that never loses, or the most successful Bot available" What an insult to the professionals who have been doing this for years and years, who may have their own bots or strategies. Where is the track record for IvyBot?? For that matter, even the IvyBot Program oversells itself. Let us not forget, IvyBot needs a support system makeover. Lastly, for now, make your own decisions. Experts are there like consultants; do not take their advice and blindly follow them; you will lose. IvyBot has made a few decisions that I did not agree with so when they enter a trade, I usually cancel the order; then make an opposite order and continue my recovery from my original loss. Sometimes when you see the charts, it is better to do nothing, regardless of what the experts say. Learn how to read the charts.
223
224
225
time to learn more each day. A particular subject of interest should supplement with your own online search. It was easy to show and recognize that Scammers play to your emotions by their use of persuasion, trigger words and spam. We all have some trigger that will get us thinking and a willingness to take the action offered by the scammer. Everyone would like to think that the next deal to be the one that will cure our ills or greed. Spam is a major contributor to the spread of Scams. Entry cost and advertising costs are minimal and the penalties few. New sites and email addresses are freely available to further these scams. Further because it reduces the productivity of both individuals and organizations by jamming their systems with junk. Further, because of the size of the problem, Spam has attracted everyones attention and has a priority greater than the Scams it represents. Perhaps some feel that the reduction of spam will reduce the Scams. These Lets Stop Spam methods have affected both the scammer and the legitimate business. These scammers can keep going, but business cannot simply change their sites and email addresses without further affecting their own business. The reduction of spam alone does very little to help the individual who is simply trying to find a way to makes ends meet; especially those that have limited resources to apply to the task. A scammer will take your last dollar and does not give change. The Advertising section shows you how to prepare your advertising and to avoid the spam blockers and being a spammer. The challenge remains; how to grab the customers attention, without the use of spam trigger words used by everyone else. The Handbook has demonstrated that just by doing your own due diligence is the cheapest and easiest way to avoid the Scam. A simple search, with Google or other search engines, will help uncover the problems of a given site. Additional due diligence tools dig deeper into ownership and other problems. For that matter, learning how to do a simply search is quicker than scanning a list for banner or watch program. One of the best ways to avoid the scam is too slow down and take the time to check out the site. Other sections of the Handbook covered Affiliate Programs, MLM, Pyramids and Networking Programs, with special sections for Paid-to-Read/Click and Forex Programs. There are so many sites and scammers, that no list from anyone can possibly keep up. Some tips and tools to manage your time, email and office were included to round out our objectives. The Glossarys are a simple, easy-to-read resource for quick answers Thank you and Welcome! It is my pleasure to champion this cause. With your help, we can grow as an Association, and take a large chunk out of this bad apple. You have the signs; hopefully you understand them, and will reduce or avoid the scam in the future. Take advantage of the references and resources offered herein as well as the support of your fellow members in our group sites.
226
Success if yours, if you accept our plan and prepare for it and please accept my very best wishes for your continued or future success. Dr Don Yates Sr PhD
227
Easily Easy Edge Emerging Endorsed Energy Save Scientific Secret Secrets Security Selected Sensational Spotlight Startling Strange Strong Sturdy Successful Suddenly Superior Sure Fire Surging Surprise Survival Technology Terrific Tested Timely Tremendous Ultimate Unconditional Uncovered Under Priced Unique Unlimited Unlock Unparalleled Unsurpassed Unusual Outstanding Personalized Perspective Pioneering Popular Portfolio Powerful Practical Professional
Interesting Introducing It's Here Just Arrived Largest Last Chance Sizable Skill Soar Special Special Offer Urgent Useful Valuable Value Wealth Weird Willpower Wonderful You Your Zinger
228
229
Cannot Be Combined With Any Other Offer Can't Live Without Cash Cash Bonus Cashcashcash Casino Cell Phone Cancer Scam Cents On The Dollar Check Or Money Order Claims Not To Be Selling Anything Claims To Be In Accordance With Some Spam Law Claims To Be Legal Claims You Are A Winner Fantastic Deal Fast Cash Financial Freedom Find Out Anything For Free For Instant Access For Just $ For Just $ (Some Amt) For Only $ Fr.Ee Free Free Access Free Cell Phone Free Consultation Free Dvd Free Gift Free Grant Money Free Hosting Free Installation Free Investment Free Leads Free Membership Free Money Free Offer Free Preview Free Priority Mail Free Quote Free Sample Free Trial Free Website Freedom Full Refund Get It Now Get Paid Get Started Now Gift Certificate
Don't Delete Drastically Reduced Earn $ Earn Extra Cash Earn Per Week Easy Terms Eliminate Bad Credit email Harvest email Marketing Expect To Earn Extra Income F Or Free FREE F.R.E.E. Lifetime Limited Time Only Long Distance Phone Offer Lose Weight Spam Lower Interest Rates Lower Monthly Payment Lowest Price Luxury Car Mail In Order Form Make $ Marketing Solutions Mass email Meet Singles Member Stuff Message Contains Disclaimer Million MLM Money Money Back Money Making Month Trial Offer More Internet Traffic Mortgage Rates Multi-Level Marketing Name Brand New Customers Only New Domain Extensions Nigerian No Age Restrictions No Catch No Claim Forms No Cost No Credit Check No Disappointment No Experience
230
Great Offer Guarantee Have You Been Turned Down? Hidden Assets Home Employment Http:// Or Www. Human Growth Hormone If Only It Were That Easy In Accordance With Laws Income Increase Sales Increase Traffic Insurance Investment Decision It's Effective Join Millions Of Americans Laser Printer Passwords Once In Lifetime One Hundred Percent Free One Hundred Percent Guaranteed One Time Mailing Online Biz Opportunity Online Pharmacy Only $ Opportunity Opt In Order Now Order Status Orders Shipped By Priority Mail Outstanding Values Pennies A Day People Just Leave Money Laying Around Per Day Per Week Please Read Potential Earnings Price Prices Print Form Signature Print Out And Fax Produced And Sent Out Profits Promise You...! Pure Profit Real Thing Refinance Home Removal Instructions
No Fees No Gimmick No Inventory No Investment No Medical Exams No Middleman No Obligation No Purchase Necessary No Questions Asked No Selling No Strings Attached Not Intended Off Shore Offer Expires Offers Coupon Offers Extra Cash Offers Free (Often Stolen) Serious Only Shopping Spree Sign Up Free Today Social Security Number Special Promotion Stainless Steel Stock Alert Stock Disclaimer Statement Stock Pick Stop Snoring Strong Buy Stuff On Sale Subject To Credit Supplies Are Limited Take Action Now Talks About Hidden Charges Talks About Prizes Tells You It's An Ad Terms And Conditions The Best Rates The Following Form They Keep Your Money -- No Refund! They're Just Giving It Away This Isn't Junk This Isn't Spam University Diplomas Unlimited Unsecured Credit/Debt Urgent Us Dollars Vacation Offers
231
Remove In Quotes Remove Subject Removes Wrinkles Reply Remove Subject Requires Initial Investment Reserves The Right Reverses Aging Risk Free Round The World Safeguard Notice Sale Satisfaction Guaranteed Save $ Save Big Money Save Up To Score With Babes Search Engine Listings Section 301 See For Yourself Sent In Compliance Serious Cash
Viagra And Other Drugs Wants Credit Card Warranty We Hate Spam We Honor All Weekend Getaway What Are You Waiting For? While Supplies Last While You Sleep Who Really Wins? Why Pay More? Will Not Believe Your Eyes Work At Home Winner You Have Been Selected Winning Your Income
232
233
SEE ALSO
List of real-life con artists List of confidence tricks List of Ponzi schemes Wikipedia
234
235
Simple Secure Passwords Social Media Safety Issues Spyware Statistical Data and Reports on Internet Fraud USA Government
236
237
238
Affiliate Manager: The person responsible for running the merchant's affiliate program. This includes recruiting affiliates, establishing incentive programs, creating media for the affiliates, reporting on sales and paying affiliates. Affiliate Program: Can also be called an Associate Program, Partner, Referral or Revenue sharing program. In such a program the merchant rewards the affiliate for web traffic, sales or leads on a payper-click, pay-per-sale, or pay-per-lead basis. Affiliate programs enable affiliates to leverage their traffic and customer base in order to profit from e-commerce while merchants benefit from increased exposure and sales. Affiliate Program: An affiliate program is a form of advertising, on the web, that rewards the affiliates (self-selected advertisers) for driving traffic to the advertiser (PPC) or for subsequent transactions (CPA). An affiliate program uses a multi-level marketing concept where consumers (affiliates) attract additional consumers. Some affiliate programs are multi-tiered, thus increasing the income earning opportunities for the affiliates (rewarded for their traffic and the traffic of affiliates they recruit). Affiliate Marketers have the option of developing their own in-house affiliate program (Amazon.com and bn.com are examples) or joining one or more of the large affiliate networks (Beefree, Linkshare or CommissionJunction). Affiliates have the potential to earn significant money, if done correctly. This book store is the author's example of an Amazon affiliate. Marketing vehicles may sign up for an affiliate program to use their excess advertising inventory (unsold banners). Since affiliates link directly to the site which sponsors the program this increases the number of links into the site which can have a positive effect on the ranking of the sponsoring site in search engines (good for search engine optimization.) Affiliate links also have a positive branding effect for the sponsoring site. Affiliate Program Directory: A comprehensive listing of merchants' affiliate programs. The directories are typically categorized by industry and include the typical payout or commission rates. Click here for a sample list of affiliate program directories. Affiliate Software: A software program such as Affiliate Wiz for running and managing an affiliate program. This typically includes signing up affiliates, managing links, tracking impressions, clicks, sales, leads. This also includes paying affiliates, etc. Affiliate Solution Provider: 3rd party company that provides an affiliate tracking solution on a hosted basis. Typically an affiliate software solution is hosted by you with your web site. With an affiliate solution provider, they provide the hosting for you. Affiliate Tracking: The process of tracking a link uniquely by affiliate using an Affiliate Link. Aggregator: (News Reader) Aggregator is an application, either for the web, windows, mac, or linux, that aggregates dynamic content (RSS or Atom files) for the subscriber to view. The dynamic content is typically generated by blogs, news organizations or other sources interested in distributing news to subscribers, using the XML format to generate the RSS feed. It becomes an effective means for users to manage their view of updated news across the web. Users control which 'feeds' they subscribe and unsubscribe, this channel is also spam free. Aggregators are one of the web 2.0 technologies. Examples of web-based aggregators include bloglines and NewsIsFree. Algorithm: In the context of search engines, it is the mathematical programming system used to determine which web pages are displayed in search results. Alpha/Beta: The terms alpha and beta refer to releases of software that are typically not ready for commercial use. Alpha refers to the very early release, which is typically very buggy and only released
239
to a few people who are internal to the organization. It is helpful, in development, to get feedback very quickly from the hacker community, or potential customers with the beta version. Releasing a beta version has become standard practice with the evolution of the Internet as a mode of distribution for the software. Companies are also apt to leave releases of products in beta for a while (Google). It is a part of the development model for open source software. API: API refers to Application Programming Interface. It is the interface that gives program developers access to develop programs that work on a particular platform. Thus for Microsoft's Windows platform, the API is win32. To develop a program to run on the windows platform, you must write to the win32 API, thus the win32 API is the software developer's platform for windows. By encouraging other software programmers to develop to your platform, you are able to encourage lock-in as more people become dependent on the platform. A key strategic issue for a software company is whether to develop a developer's community, which builds software to its platform, or whether to keep the development internal to the organization. Architecture: Architecture refers to the planning phase of the software development process, much like architecture refers to the same in the process of building a house. The builders are the coders of the product, once it is architected. This is an extraordinarily important phase of the overall development of the product, and consists of thoroughly understanding and articulating the needs of the users (of the system) and the coders (for the system). This serves as a roadmap for current and future development for the product. Poor architecture may not be apparent during early releases of the product (the alpha and beta phases), but as the product evolves and newer versions are created, architectural decisions will become more impactful to development. This has been cited as a cause for the demise of the Netscape development process. Associate: Synonym for affiliate. Asynchronous/Synchronous Communication: Direct communication, where all parties involved in the communication are present at the same time (an event) is a form of synchronous communication. Examples include a telephone conversation, a company board meeting, a chat room event and instant messaging. Asynchronous communication does not require that all parties involved in the communication need to be present and available at the same time. Examples of this include email (the receiver does not have to be logged on when the sender sends the email message), discussion boards, which allow conversations to evolve and community to develop over a period of time, and text messaging over cell phones. Auction Pricing System: Using an auction pricing system, sellers are not constrained by having to fix a price without knowing what the market will bare (traditional pricing methodology). If a seller sets a price too low, using a classified advertisement for example, the demand will be high and the product will be purchased. The seller, however, will not get the most revenue the market would have paid if the buyers had had to compete for the purchase. The buyer who wanted the product most (willing to pay the highest price) would not automatically receive the product. Conversely, if the seller advertises too high a price, using a classified advertisement, the product will not sell. By allowing buyers to bid up the price from a low price point, the product will sell to the highest bidder (assuming it clears a minimum asking price). The auction pricing system is a dynamic pricing model, much like the reverse pricing model. Game Theory can impact the strategies involved in setting
240
a starting price (for the seller) and bidding strategies for the buyers. Examples include: EBay and QXL.com. Autoresponder: Autoresponders are used to send an automatic email in response to an incoming email message. This allows for the sender to know the email has been received, which is important due to the asynchronous nature of the medium. They are often used by company employees to alert people they are away on vacation, thus delaying a potential response. They can also be used effectively in customer service by indicating to the consumer: The query was received Other alternate means to find information A response timeframe Additional marketing material Note: An autoresponder can also be used to distribute a digital product, as a response to an email request. Average Costs: The average cost of a unit of product is made up of its fixed costs / # units produced, and the variable cost per unit. With digital products, where the variable costs are very small (and in some instances zero), the average cost of the product declines as more units are produced and sold. Thus the market leader for a product typically has the lowest average cost per unit. This allows the leader to have increased margins, and increased flexibility to lower price. This is one of the reasons why first-mover advantage can be so important. Auto-Approve: Affiliate application process whereby all application are immediately accepted/approved upon submittal by the affiliate. This term can also be used to describe the process of automatically accepting all sales recorded by affiliates. B2C: B2C refers to business-to-consumer trade, retail trade. Similarly B2B refers to business-tobusiness, distribution channel (value chain). C2B refers to consumer-tobusiness, and uses a reverse pricing model (Priceline for example). C2C refers to consumerto-consumer, an auction-style model (eBay for example). Bandwidth: [band] Bandwidth refers to the capacity of the connection of the Internet. Typically a user's connection to the ISP is the aspect of the Internet experience with the least bandwidth (last mile issue.) The closer to the Internet backbone, the greater the bandwidth of the connections. Bandwidth is also shared among users of an ISP, thus the activities of one user can have a negative impact on the experience of all other users. File sharing sites have been blocked (by firewalls) from some ISPs (universities) for their penchant for hogging bandwidth. Banner Ad: An electronic advertisement or billboard such as an animated GIF, Flash Movie, JPEG that advertisers a product, service, or web site. Banners: Banners, a form of Internet advertising, were the primary form of advertisements on the web (this is now challenged by text advertisements). The standard banner usually appears at the top of a web page, and will link to a target web page, that may be the homepage of the advertiser or a target page developed by the advertiser that is more directly relevant to the message of the banner (a better use). The IAB has developed banner size standards. Banner Exchange: A banner exchange program is a program designed to allow marketers to exchange banners (a form of bartering) to enable marketers to promote their sites without the outlay of cash. A program typically allows a marketer to display one advertisement, across the network, for every two advertisements it hosts on its site. Unlike a straight exchange with one entity, exchange programs allow
241
for the possibility for the banner to be displayed on many web sites (those sites that participate in that particular network). The Free Banner Exchange Megalist is a good resource for identifying these exchanges. Barrier(s) To Entry: Barrier to Entry refers to the costs incurred for a new entrant to enter a marketplace. Examples include fixed costs such as the development of a factory (for traditional manufactured goods), branding, and lock-in established by current competitors in the form of switching costs. Barriers to entry can also refer to any "hidden" cost established to reduce freedom of choice. Traditional retailing environments that had relied on geography as a competitive advantage now need to build barriers to entry to protect their client base from Internet-based businesses. Barter: Bartering is the trade of goods from one enterprise to another, without the transfer of payments. Many Internet businesses trade their products and services, to avoid payments and / or to stimulate demand, at the early stages of their life-cycle. This has also become common practice for the trade of banner advertisements. Banner exchange programs enable small advertisers to exchange advertising space, but large enterprises are also involved in this practice. Bartering was the means of exchange between traders and customers in markets, before money was developed as a medium of exchange. Bartering is therefore closely associated with very early market development! In the early model, money was developed to make markets more liquid. With the early Internet, bartering was used due to the lack of liquidity of many Internet businesses. Bookmark: Bookmark is a term used to suggest a user saves the location of a web page in order to return to that page in the future. It stems from the bookmark option in the Netscape browser. The dominant browser Internet Explorer has the same option, called favorites. Since it is easier to ask someone to "bookmark" a page than to add a page to a "favorites" list, despite Internet Explorer becoming the standard browser, the "bookmark" term has persisted! Bots: Bots are software programs developed to help the user search the web to identify and compare products for purchase. Examples include: Froogle, MySimon, DealPilot.com, FrictionLess.com, and Epinions.com. They are also referred to as intelligent agents. They are also used as software for Forex Experts Brand: A brand is a product from a known source (organization). The name of the organization can also serve as a brand. The brand value reflects how a product's name, or company name, is perceived by the marketplace, whether that is a target audience for a product or the marketplace in general (clearly these can have different meanings and therefore different values). It is important to understand the meaning and the value of the brand (for each target audience) in order to develop an effective marketing mix, for each target audience. The value of the brand for a web-based company may have heightened importance due to the intangible nature of the web. The economic value of a brand can be determined by looking at what a company is able to charge for a product, over and above a generic alternative product, in its marketplace. Break Even Analysis: Break Even Analysis refers to the calculation to determine how much product a company must sell in order to break even on that product (revenue = costs). It is an effective analysis to measure the impact of different marketing decisions. It can focus on the product, or incremental changes to the product to determine the potential outcomes of marketing tactics. The formula for a break even analysis is: Breakeven point ($) = (Total Fixed Costs + Total Variable Costs) Total Variable Costs = Variable cost per unit x units sold
242
Unit contribution (contribution margin) = Price per unit - Variable cost per unit. Broadband: Broadband refers to the ability of the user to view content across the Internet that includes large files, such as video, audio and 3D. Broadband refers to an increased ability to do so. The term narrowband can refer to the inability to do so. A user's broadband capability is typically governed by the last mile issue, the connection between the ISP and the user. Users increasingly have access to broadband such as cable modem and DSL access. Once broadband is no longer an issue, the web is likely to become much more useful, and users of the Internet will likely change their behavior in terms of what they do with the Internet, as a consequence of being able to leave the connection open all the time, rather than having to dial-in and leave. Browser: A client program (software), such as Internet Explorer, Netscape, or Opera, that is used to look at various kinds of Internet resources. Bugs: A bug is the term used to describe a coding error in a computer program. Bugs can be discovered throughout the development process. As systems are tested with live users (through alpha and beta versions), and systems become more interrelated, bugs tend to surface that were not recognized during the early stages of development. Bugs are also included in commercial products that have already been shipped. Once discovered, companies will use patches to update the software for the users. Bundling: Product Bundling refers to the bundling together of more than one product for a sale. This is very common for digital products, where the marginal costs of each product is very low. If most of the marginal cost is associated with packaging and distribution, this is further reduced when the products are bundled together, as they share the same costs of packaging and distribution. Thus the incremental cost to the firm (i.e. Microsoft) for bundling together additional software products is very small (actually zero aside from any opportunity cost). Thus a suite of products may allow for greater market penetration into different software markets than if the software was sold separately. For software that is not currently used by the consumer, but is purchased through a bundled package, it works to lock-in the consumer once he/she decides to use that category of software. Thus bundled software can ensure strong market positions across multiple markets. Burn-Rate: Burn-rate refers to the amount of money a company spends from month to month (money burnt) in order to survive. Thus a burn-rate of $50,000 would mean the company spends $50,000 a month above any incoming cash flow to sustain its business. Entrepreneurial companies will calculate their burn-rate in order to understand how much time they have before they need to raise more money, or show a positive cash flow. Business Plan: A business plan is a document that articulates a new business idea (and its business model). It is used to gain interest in the business idea for potential investors (Venture Capital investors for example), as well as used as a guide for the team to build out the business. Particular focuses of the plan include the idea itself, the management team, the marketing mix, and the cash flow projections. Business Model: Business Model is the business' value proposition, and how it determines to satisfy that value proposition. Essentially it refers to the entire process of how it intends to do business with its customers profitably. Web sites need to have a specific business model. Many company web sites are operated on a ROI model, presuming the web site serves multiple marketing functions. Alternatively search engines operate with an advertising revenue business model (PPC). In fact Google's entire business model relies on its Google Adwords program. News sites may combine advertising revenue with site subscriptions
243
for a business model. The subscriptions may or may not be paid subscriptions, and the data acquired may or may not be resold to third parties to generate additional revenue streams. Software vendors need to determine whether their business model should focus on the sale of the software, or its after sales support. If the former, this can present potential cash flow problems in the long run as the software requires additional support. Call to Action: Call to Action is the action that is requested by a marketer's content (either from an Internet advertising or web-site copy for example). This may be to click-through to enter a contest, enter a survey to win a free prize, or purchase a product. Caching: Caching is the process used to save web content that is served, for viewing at a later time (cached on the client machine) or for others to view (popular pages, cached at the ISP for others to view who use that ISP to connect to the Internet.) Google also caches content that is available for browsers' to view with the search results. The principle reason for caching is to improve the web browsing experience by increasing the speed web pages can be presented to the client. Caching does not work well if web pages are updated often, as older copies are cached which are then served to browsers. Caching is also an issue for content providers who wish to remove their content from the Internet. They do not control the caching process and thus are unaware of the extent to which the content has been cached across the Internet. Cannibalization: Cannibalization refers to the notion of a company making a business decision that will have a negative impact on either a current product within the same product line or member of a distribution channel (or entire channel, via disintermediation). This type of decision is typically designed to allow the company to survive in the long-term, and avoid having its products challenged by competitors' products as technology progresses. Captive Market: A captive market is a group of consumers who have limited choice in terms of the products they can select/purchase (no choice)! This type of market was common during the production era when there was a limited supply of goods (and greater demand). It occurs when the market is monopolistic, thus there is only one supplier in the marketplace. This is more likely to occur with digital products (Microsoft is a good example of this). It can occur when a marketer has achieved significant lock-in for its installed-based. Thus the switching costs for the consumer to try a competing product become prohibitive. Cash Flow: Cash flow is the collective outcome of all incoming and outgoing cash over a fixed period of time. Having a positive cash flow is critical to the long term survival of the company, in the short term a company can survive with a negative cash flow if this is seen as only a temporary situation. A negative cash flow is also known as the burn rate and is common at the beginning of a company's life. Channel Conflict: Channel conflict is the outcome of developing additional channels between the producer and consumer (often direct in terms of using the web) that targets the same group of consumers. This creates a "conflict" with existing channel members along the value chain, which are concerned with getting disinter mediated. This is a common problem for legacy businesses as they explore the web for commerce. Charge Back: Chargeback is an invalid sale that results in the affiliate's commission being forfeited. Click Fraud: Click fraud comprises clicking on a link that either provides monetary gain for the clicker or adds cost to the marketer whose link is being clicked (a competitor of the 'clicker' for example). This process can be automated. This causes problems for links that are based on a PPC model, and is thus a problem for search engine advertising programs and affiliate programs. The problem is compounded in
244
search engine marketing as the host, who manages the advertising programs, actually benefits from the rogue behavior. Click-through: The action when a user clicks on a link and follows through to the merchant's web site. Click-Through Ratio (CTR): percentage of visitors who click-through on a link to visit the merchant's web site. Client: The client refers to the user end of the web. Thus the web browser (Internet Explorer or Firefox) serves as a client. This is in contrast to the server, which hosts the web information. Client-side Scripting: Client-side scripting is used to present content to the web browser, with which the user can then interact, or content that data from the users' machine interacts (date / time etc.). Client-side scripts rely on the capabilities of the client machine / browser, which contrasts with serverside scripts which rely on the server for functionality. Co-branding: situation where affiliates are able include their own logo and branding on the pages to which they send visitors through affiliate links. Co-branding This is a system that provides your website's content with the look of your partners website creating a seamless transition for the visitor. Commission: Income an affiliate earns for generating a sale, lead or click-through to a merchant's web site. Sometimes it is called a referral fee, a finder's fee or a bounty. Cookies: small text files stored on the visitor's computer, which record information that is of interest to the merchant site. In affiliate software cookies are utilized to track which affiliate the web visitor came from and which banner or link they clicked. They can also store the date/time of the click for purposes of tracking the time elapsed between a click and a conversion to a sale or lead. Cookie Expiration/Cookie Retention: When a cookie is planted on a web browser, a date when the cookie expires is defined. This date is important because affiliate sales can only be recorded before the cookie expiration date. This period will also determine if repeat sales will be recorded. Conversion Rate: Percentage of clicks that result in a commissionable activity (sale or lead). CPA (Cost Per Action): The amount of cost for a conversion such as a sale or lead. CPC (Cost Per Click): Cost of an individual click when paying on a per click basis. CPM (Cost Per Thousand): The cost of 1000 banner impressions. CPO (Cost Per Order): Same as CPA but refers specifically to sales. Customer Bounty: Pays the affiliate partner for every new customer that they direct to a merchant. Collaborative Filtering: Collaborative filtering is a process used to match data of one user with data of similar users, based on purchase patterns, in order to generate recommendations for the user for future purchases. Amazon is a good example of a company that uses collaborative filtering in order to make its recommendations, based on a customer's prior purchases and the purchases of those who have purchased similar products. This is an example of market segmentation, based on customer behavior, rather than the more traditional metrics of demographics and psychographics. Contextual Marketing: Contextual marketing is marketing that occurs in the context of when a person is more likely to be interested in the product/industry. Thus, a page sponsorship can be considered contextual, as the viewer has elected to view the page, and assuming the sponsorship is for a product that is related to the content of the page, the product has the right context (the viewer self-selected to view the content).
245
Text advertisements that are relevant to the content of the web page on which they appear are another example of contextual marketing. An example of this is the advertising programs run by search engines that have advertisements served based on the keywords that the user uses to search. Contextual Marketing is becoming more popular with increasing use of search engine marketing, and will only gain greater strength with the evolution of wireless marketing (mcommerce). Wireless marketing will take advantage of knowing where the consumer is located using GPS. This can then translate into marketing messages that have direct relevance to the consumer as the messages relate to the context of the consumer at the point in time they are being delivered. Chat Rooms: See Discussion Boards Contribution Margins: Contribution margins (or margins) refer to the amount of revenue per product that is available to "contribute" towards the fixed costs and the profit of the company. Since, for digital products, the variable costs are typically very small, or zero, most of the revenue earned from the sale of a product form the contribution margin. Assuming the contribution margin (unit price - unit variable cost) > 0, then the product merits marketing, since the fixed costs are sunk. This also assumes the product does not cannibalize sales from another product in the product line, if so, the opportunity costs need to be considered. Cookie File: The cookie file is a file that resides on the client machine. It contains data passed from web sites, so that web sites can communicate with this file when the same user (client machine) returns. The web site only has access to the part of the cookie file that represents the interaction with that particular web site. The cookie file has caused some issues with respect to privacy. Considering that as consumers, we do not know what information is being stored in the file, we should become concerned! The cookie file was first developed in order to help sites with the transaction process of the web. Without a cookie file, web sites are not able to track a single user's path through a web site, thus a transaction that required multiple pages (as most do) would simply not be workable. Copyright: Copyright refers to the rights provided to the author of certain types of intellectual property, including software. The author uses a license to establish how others can use the software. Even free software will include a license to ensure the work remains free. CPM, PPC, CPC, CPA: [cpm] CPM (Cost per 1,000), PPC (Pay per Click), CPC (Cost per Click) and CPA (Cost per Action) are types business models for calculating the charge for pages (advertisements) being served. CPM is a holdover from traditional media advertising, and does not take advantage of the Hypertext nature of the medium. It charges purely on the number of times the advertisement is served. It does account for branding effects that are not accounted for in the other models. PPC and CPC refer to a cost (payment) associated with each click on the advertisement to the target page. CPA is a cost associated with each lead created from a click on the advertisement (CPL), or each sale (CPS). Both PPC / CPC and CPA are much more accountable means of developing a price for the advertisement, and either are also used for affiliate programs and text advertisements on search engines. They become a variable cost in terms of generating the number of people exposed to the target page (this number is based on the CTR from the host vehicle), the number of leads generated (CPL) or the number of sales (CPS). The downside for the vehicles is they do not control the design of the banner (poor design = low click-through etc.) and they are not rewarded for the branding effect of the banner. Click fraud is also an increasing problem. CRM: (Customer Relationship Management) is a business strategy built around the concept of being customer-centric. The main goals are to optimize revenue through improved customer satisfaction via
246
improved interactions at each customer touch point. This can be accomplished by a better understanding of customers, based on their purchasing patterns and demographics, and better information empowerment at all customer touch points, whether with employees or other media interfaces. Cryptography: Cryptography is the field of securing data. It began with a focus on securing data in transit (data encryption), but has expanded to other areas such as digital cash and authentication (digital signatures and timestamps). The field of encryption pre-dates modern times (frequency analysis) but gained particular significance during World War II as a means to secure data from and listen to the enemy. It has become very important in the information age. A simple example of cryptography is the public key cryptography. The sender and receiver must have both a public key (to read the data) and a private key to encrypt the data. The public key can be made freely available to recipients of a message as long as the private key remains private. Encryption presents problems for governments which need to 'listen' to data transferred over the Internet. Governments need to do this to track illegal money transfers and listen to terrorist chatter for example. Thus governments prefer weaker standards of encryption than those who require data to be secure, such as those requiring legitimate security for ecommerce. Until 2000 the US Government restricted the use of "strong" encryption for export (encryption of over 56 bits in symmetric algorithms). This has now been relaxed somewhat unless the end user is from specific countries (i.e. Cuba, Iran, Iraq etc.) RSA Security - Crypto FAQ is a good resource for Cryptography. CTR: CTR (Click-Through Rate) is the number of times an advertisement is clicked upon over the number of times the advertisement is served. Typical click-through rates have been declining (a click through rate of 1% would be very high). While click through rates help determine the effectiveness of the online advertisement, advertisements also contain a branding impact. The click-through rate will determine the cost of an advertising campaign that was based on PPC / CPC and CPA. CSS: CSS (Cascading Style Sheets) are used by web designers to describe the design of the web page (entire web site.) Rather than rely solely on HTML (structure), CSS allows for more central control such that making one edit in the CSS file can make consistent changes across an entire web site. CSS content can be included as a separate file (pointed to in the header of the web page); included entirely in the header of the web page; or included directly in the body of the web page. CSS also allows for creating different presentations dependent on the media, so a document that is printed out can be printer-friendly versus the same document on screen. Cybersquatting: Cybersquatting refers to the behavior of acquiring a domain name with the principle purpose of reselling that domain name. The resale could be to an entity that would be willing to pay a higher price (typically a trademark holder); or an entity who had previously used the domain name but inadvertently lost it as a consequence of not reregistering. Diffusion Process: The diffusion process refers to the process of adoption of new products by the consumer marketplace. The consumer marketplace is segmented into four groups: innovators (2.5% of population), early adopters (13.5%), early majority (34%), late majority (34%), and laggards (16%). Thus innovators are more likely to adopt a new product earlier than the early majority etc. This has implications for target marketing with new products. Digital Cash: Digital cash is money exchanged only over the network (web). PayPal is a provider of digital cash. Smart cards are also used to provide electronic money exchange, more frequently used outside the US. Encryption is used to maintain the integrity of digital cash.
247
Digital Divide: Digital divide represents the gap between those who have access to the Internet and those who do not. Those who have access to the Internet typically come from wealthier segments of society, and wealthier countries. Access can be defined in terms of access to the physical infrastructure of the Internet, or access via literacy. Access to the Internet itself creates significant advantages to those who have it, further exacerbating the divide. Digital Products: Digital products are intangible products that can be downloaded over a digital network. They have zero copy costs, and users can make perfect copies. The cost structure of digital products (high fixed costs that are sunk, and tending towards zero marginal costs) in conjunction with the above features changes the economics of digital products vs. traditional goods. Diminishing Returns: Diminishing returns refers to the notion that the return that a company receives for additional effort decreases as the number of units / output increases. This is typical of industrial goods, but is in contrast to the phenomena of network effects and increasing returns for digital goods. Diminishing returns explains why industrial companies become more inefficient once they grow over a certain size. Thus firms do not compete as effectively when in a large monopolistic market than they do in an oligopolistic market (car company for example) assuming the size of the market is over the scale limit that traditional firms can operate efficiently. Directory: A directory is a web site that focuses on listing web sites by individual topics; it is a quasi Table of contents. A search engine lists pages, where a Directory (such as Looksmart or The Open Directory Project) lists websites. Discussion Boards and Chat Rooms: Discussion boards allow for asynchronous discussion between 2 or more people over a period of time. Chat rooms are designed for synchronous discussion at one time. Discussion boards are typically available for review, at any time, chat rooms have no data until a chat session begins. Discussion boards are useful to allow many people to become involved in online "conversations" over a period of time. A site that has used discussion boards effectively is slashdot.org. This site is a community that serves as a meeting place for those interested in the advancement of all things digital, as they say: "News for nerds!" The site's content essentially is created by its community, which in turn becomes more closely associated with the site as they are developing the site. Other sites attempt to achieve this without as much success. Slashdot's success lies in its structure: initial discussion content short, but with enough information to establish context, this allows discussion to follow. The ClueTrain Manifesto, while being radical in its approach and view points, makes a compelling case for commercial sites to include a discussion board to allow for conversations among consumers, and between consumers and employees. The Student 2 student aspect of the Wharton MBA Admissions site follows this thesis. The content on this site is content marketing could not pay for, and comes from credible sources. Chat Rooms are useful for gathering people together for "quick" events that are centered around specific topics. They are very good for brainstorming events, and to resolve problems that need quick discussion. Chat rooms are often used in conjunction with discussion boards to satisfy communication needs of the organization. Unfortunately the terms, discussion boards and chat rooms, are often confused, people referring the two as chat rooms. Instant Messaging and blogging are other forms of communication evolving on the web. In fact, slashdot, noted above, is a blog in its truest sense, but behaves very much like a discussion board.
248
Disintermediation: Disintermediation refers to the potential for members of traditional value chains (distribution channels) to become obsolete as the producer markets more directly with its consumers using the web. This occurs with legacy businesses. While channels (using the web) are presumed to become shorter, in reality, the channels actually include different types of intermediaries (infomediaries) such as meta-markets (also referred to as industry portals) that help gather many industry players and consumers into a market space. Disruptive Technology: This is a technology that changes the industry in such a way that previous competitive and business rules change. Since the Internet has had such a profound effect on the fundamental rules of business, it can be considered a disruptive technology. CD technology was another good example of a disruptive technology. When CDs were introduced to the music business, they were a disruptive technology, changing the status quo, and requiring users to purchase new hardware, despite there being a significant installed-base of record players and record collections. P2P, and more recently iTunes are similarly changing the music industry and those that rely on CD sales. Domain Name: A domain name (also known as a host name) is an alphanumeric name that identifies a computer on the Internet. While it is possible to reach computers on the Internet by using the IP address, IP addresses are not easy to remember. Domain names provide an easily referenced way of reaching remote computers. The domain name is the first part of the web address or URL. For example, this web page's domain name is www.udel.edu The Domain Name Service (DNS) stores a database of mappings from domain names to IP addresses and performs lookups for the IP address when a domain name is used in a network request. To avoid network congestion, lookups are performed on root servers with current copies of the central directory. These root servers are further copied by ISPs. To register a domain name for the .com, .org, .biz, .net, .info and .name, you can use one of the accredited registrars, and their resellers. ICANN.org is the accrediting agency that approves resellers and resolves disputes. You can learn about information behind the ownership of a domain name by using the WHOIS service. ccTLDs (country code top level domains, such as .uk, .at and .fr) are handled independently and visiting the country's site is important to understand the rules. Domain names are an important branding tool for a business. Businesses are thus keen to protect their trademarks by acquiring their appropriate domain name(s). Cybersquatting is the behavior of a user who acquires a domain name for the sole purpose of reselling at a higher price. Clearly domain names can have significant economic value, the highest price reported to be $14m. Dynamic Pricing: Dynamic Pricing refers to a fluid pricing scheme between the buyer and seller, rather than the more traditional (and more recent, over the last 100 years) fixed pricing. Dynamic pricing is a legacy from the past that has lost its prominence with the advent of the industrial revolution and mass marketing and mass communication. Before the industrial revolution, most trade occurred in markets, with many buyers and sellers bartering for goods. Current and evolving models for dynamic pricing include the auction pricing system, group pricing system and reverse pricing system. Typically these systems will better reflect the true market value of the product involved, but also require additional work on the part of the purchaser. These systems will evolve more rapidly when better standards are established and when intelligent agents evolve. Not all markets will be served well with a dynamic pricing model.
249
E-Commerce: E-commerce refers to all forms of business activities conducted across the Internet. This can include E-tailing, B2B, intranets and extranets, online advertising, and simply online presences of any form that are used for some type of communication (customer service for example). Economies of Scale: Economies of scale refers to the notion of increasing efficiencies of the production of goods as the number of goods being produced increases. Typically the average costs of producing a good will diminish as each additional good is produced, since the fixed costs are shared over an increasing number of units. Due to economies of scale, larger companies have greater access to markets in terms of selecting media to access those markets, and can operate with larger geographic reach. For traditional companies, size does have its limits, where additional size actually increases costs to companies (impacts communications costs etc., diminishing returns). Thus many industries tend to operate more effectively in an oligopolistic fashion, with few large firms, rather than one monopolist. (This should occur even if the government allowed monopolists and monopolists behaved legally). Digital companies tend not to suffer from this scale limitation. Ecosystem: An ecosystem is a system whose members benefit from each other's participation via symbiotic relationships (positive sum relationships). It is a term that originated from biology, and refers to self-sustaining systems. The bumblebee hive is an example of an ecosystem, highlighted in Bernd Heinrich's book, Bumblebee Economics. The bumblebees' hive is a living system with one goal, to gather enough energy to ensure the survival of the bumblebee's genetic information. Bumblebees (unlike most other species) live in colonies and depend on each other for survival. Bumblebees extract pollen for protein and nectar for their sole source of energy from neighboring plants. Plants, in turn, rely on bumblebees to inadvertently brush pollen from one plant to another, to enable the plants' reproduction process to begin. The relationship between the bumblebee and the plant is symbiotic, as each benefit from each other's participation. The bumblebee hive goes through a life-cycle, through the year. Entering the fall the queen bee lays eggs that are fed a different diet. These eggs turn into virgin queens and males. When the frost hits, the remaining worker bees die as does the queen, the virgin queens and males fly off, mate, the males die and the inseminated queens seek shelter through the winter. The process then begins again. As it applies to business, an ecosystem can be viewed as a system where the relationships established across different industries become mutually beneficial, self-sustaining and (somewhat) closed. This is clearly the case for Silicon Valley with the entrepreneurial industry, the venture capital industry needed to fund the entrepreneurial industry, and Stanford University (birthplace of Google and Yahoo! etc.), supplying the human capital needed to develop innovative/creative ideas and technologies. The goal of this ecosystem is to generate entrepreneurial ventures. Once an ecosystem is established, and is able to take first-mover advantage, it becomes very difficult for other regions to emulate. The region exhibits network effects and is able to establish lock-in since the switching costs associated with moving to another region are prohibitive. The collective costs of many moving out of the region (i.e. if another region tried to incentivize a large move) would be prohibitive. Thus current members have a clear incentive to remain, and new would-be entrepreneurs, venture capitalists and students interested in this industry have a significant incentive to relocate to this region. Email Campaign: These campaigns contain appealing content concerning your product, and are targeted at a specific market.
250
Email Link: An affiliate link to a merchant site in an email newsletter, signature, or a dedicated email blast. EPC (Earnings Per click): Average earnings per 100 clicks. A relative rating that describes the ability to turn clicks into commissions. E-tailing: E-tailing refers to retailing over the Internet. Thus an e-tailer is a B2C business that executes a transaction with the final consumer. E-tailers can be pure play businesses like Amazon.com or businesses that have evolved from a legacy business, Tesco.com. E-tailing is a subset of e-commerce. eWallet: eWallet is a system that stores a customer's data for easy retrieval for online purchases. Since completing forms as part of an e-tail transaction can be a reason for aborting a transaction (shopping cart abandonment), an eWallet service can reduce this inconvenience for the consumer. Extranet: Extranet refers to a group of web sites, belonging to independent entities, that are combined together in order to share private information. This is in contrast to an intranet, which is a private site that is only accessible to one entity. Extranets are used in the supply chains to allow for more effective communications along the supply chain. Firewalls are used to protect the extranet from those excluded access. Extranets are replacing proprietary standard networks that are considerably more expensive to establish, and therefore were only used by large organizations (EDI). FAQ: FAQ is an acronym for Frequently Asked Questions. A FAQ document is a document found on company web sites that addresses basic questions. These documents are updated from queries that come from the customers, so they should evolve over time. Filesharing: Filesharing refers to peer-to-peer technology that allows one user of the Internet to access files of another user of the Internet through a public directory. Before the advent of WWW, this was the primary form of Internet information sharing, through public (and private) FTP sites. It has now emerged as a methodology for sharing digital files across the web. Napster pioneered this, distributing music files. Others, such as gnutella are proving to be interesting distribution models for music etc. Filesharing is coming under increasing scrutiny for copyright issues. Think of a WWW model being a 24-hr shopping mall. The stores are web sites. They are always there. You can always go to the same place to find the same items. Peer-to-peer is more of a bazaar where the vendors come and go as they please. You never know what you'll find until you get there. The products aren't in the same place every time. All these wondering gypsies could pack up and leave town tomorrow and you'd be out there in the mall again, trying to track down where they went so you could go, too. Firewall: A firewall is a piece of software or hardware designed to serve as a barrier to exclude outside intruders, typically those on the Internet, access to internal content. Companies often adopt firewalls in order to keep their internal communications private (intranets and extranets). Firewalls can also sometimes prevent those behind the firewall communicating with websites on the Internet that require cookies for the transaction. First-Mover Advantage: The First-Mover Advantage refers to the advantage gained by the first company that enters a certain market. This advantage is exacerbated for digital products and markets. There are a number of reasons this advantage exists. A company that is able to increase sales quickly is able to reduce the average cost of the product, over other competitors. This allows the first company to have more flexibility with pricing, either reducing the price to make it less attractive for new entrants (increasing barriers to entry) or increasing the margin and therefore profit while prices remain fixed, this additional profit can then be used for further innovation.
251
The first-mover can also take advantage of the learning curve effect. First-mover advantage can be further successful if the company is able to achieve lock-in of its installed-base. Thus once lock-in occurs, it is more difficult for other marketers to attract those customers away from the first marketer. Risks of being the first mover include the opportunity for others to imitate and follow best practices (learn from any mistakes). First-mover advantage is not always sustainable, and Microsoft has been very effective at being the second company in many markets, and subsequently dominating those markets. A simple example of this was the Netscape's browser vs. Microsoft's Internet Explorer. Netscape was the first-mover, gaining upwards of 90% market-share, but was not able to sustain its position with the onslaught of Microsoft. Netscape did not establish ANY lock-in, either due to the user interface, or proprietary functionality and both products were essentially being given away, so there was no price advantage. Microsoft is clearly positioned to give a product away for the long-term to gain market share. Fixed Costs: Fixed costs refer to the costs associated with a product that are fixed over a number of units. Thus regardless of the number of units produced and sold, the fixed costs remain the same. Examples of fixed costs are rent on equipment, utility costs, and research and development costs. With digital products, much of the fixed costs are actually sunk costs, and therefore non-recoverable costs. A large portion of the costs associated with digital products are fixed, and sunk, and not variable costs, which are more typical of traditional manufactured goods. Break even analysis, which is a tool that determines the volume at which a company must sell a product in order to break even, distinguishes between fixed and variable costs in its calculations. Flexibility of the Communications Medium: The flexibility of the communication's medium refers to its ability to serve multiple roles for the marketer. Media typically are limited in terms of the types of transactions they can accomplish. TV is very good for reaching a large audience with a 30 second message, but is not useful for customer service. The web, however, is truly flexible. It can communicate information to multiple target audiences, simultaneously. It can provide and support customer service initiatives and it can be used to execute transactions. It is the first medium that can serve multiple roles simultaneously. The web also breaks the reach versus richness tradeoff of more traditional media. Forking: Forking refers to the notion that a software project may evolve in multiple directions as multiple people have different goals for the project. This may occur under the open source development model. It is highly discouraged, as it does not maximize the use of resources. A good leader of an open source project will develop a process to try to avoid this situation. An exception to this was the development of Firefox, a fork of the Mozilla Project. Firefox is now the Mozilla's main development focus. Free-Rider: The free-rider effect refers to the notion that non-contributors to a project can benefit from other people's work on the project. This effect is posed as a criticism of open source. The question is, does the free-rider effect negatively impact an open source project. Since free-riders do not actually diminish any resources as they use the product (open source software) and assuming they are not adding any additional costs to the project (asking questions etc.) then the answer is no. Free Software: Free Software is software that allows the owner the 'freedom' to use the software, and alter the software in any way he / she desires. Thus it is more akin to freedom of speech, rather than free as in zero cost (in fact, free software licenses can allow for the sale of free software under certain
252
conditions). Free software development has evolved from the early hacker culture, where all software was free software. Free software is distributed with its source code. Access to this source code allows developers to improve and adapt the code for the individual use. Developers that do modify the code may be required (via the software's license) to submit any modifications back to the initiators of the project (submitting a patch). This allows any improvements, or resolved bugs, to be included in new releases of the product. FTP: File Transfer Protocol (FTP) is a protocol used on the Internet in order to transfer files. It was a popular means of making files available over the Internet, either via public or private FTP sites, before the advent of the web. Site developers now use FTP to upload / download files to the server when making changes / additions to web pages. Game Theory: Game Theory is a theory of rational behavior of participants in interactive decisionmaking scenarios. It helps predict how other participants of the situation / scenario (game) will respond in certain situations, or to certain decisions. Understanding participants' responses ahead of a decision, should help the initial decision maker make better decisions. It is applicable in areas such as: open source development. Free-rider issues for example. Should you contribute resources when someone else may benefit without contribution? standards setting. Should you cooperate with your competitors to help expand and standardize the marketplace? dynamic pricing. Should you bid at a price point, and will that create a higher bid from someone else? competitor reactions to decisions. When making marketing decisions, you cannot only analyze how your customers may respond without considering how your competitors will respond, as this will in turn impact your customers' responses. GPS: Global Positioning System (GPS) is a satellite-based system that identifies the location of a receiver. This is useful in mobile commerce as it allows the marketer to design content based not only on the individual, but where the individual is at the point the message is delivered. GPS systems are also used in cars to provide mapping systems, which can also be aligned with appropriate marketing messages. GPS is a US-based system, the EU has recently announced the development of a competing system, Galileo. Group Buying Model: Group Buying Model refers to the notion that the Internet allows individual consumers to develop a community and participate in purchases by multiple people with similar needs. TogetherWeSAVE.com is an example (Note: Mercata and Accompany closed, signaling this model is not yet matured!) Individuals are now able to take advantage of purchasing economies of scale that previously were only afforded to large companies. This in itself helps the power shift away from the company, to the individual consumer, but when combined with the reverse pricing model can create a potent consumer weapon. The essay, COMsumer Manifesto, details possible implications. Groupware: Groupware refers to technology that allows for groups of people to communicate from remote locations. The Internet can be considered the ultimate open standard groupware technology! Applications typically included in groupware technology are calendars, discussion boards, project management tools, email facilities etc. Microsoft Exchange and Lotus Notes are the more common commercial applications. Hackers and Crackers: Hackers is a term used for those who have been closely associated with the development of the computer, outside of the traditional corporate structure, and the free software movement (also known as the Open Source movement). Those that help develop code to improve (or
253
create new) software, and share that code with fellow hackers. Hackers therefore make things. Crackers break things. Crackers are those who get their thrills by cracking software, creating viruses, and destroying things. Unfortunately media often confuse the terms, thus the term hacker, when mentioned in mainstream media, usually refers to crackers! The hacker philosophy is one of sharing, openness, and decentralization (a distinct disdain for bureaucracy), that helps the innovative process and increases the knowledge-base of the culture. The hacker culture typically has an antagonistic relationship with the corporate entities who dominate the technology industry (this used to be IBM, and now Microsoft). Their values and belief systems are not aligned with these bureaucracies (who hoard knowledge and turn it into their selfish gain, rather than share knowledge and believe in the freedom of knowledge). Along these lines, hackers believe in the selflessness in favor of the common good. Communities of hackers can be found at sites like Slashdot.org. Clearly this culture experiences network effects. The more people involved and contributing to a particular project, the more each person involved benefits from each others innovations. This clearly answers the question as to how the Linux operating system was able to become a more robust operating system (according to some) than the Windows operating system, in a much shorter time frame. Header: The header component of a web page comprises the title and the meta tags and any style sheet content (CSS). All elements critical for marketing and design of a web page. A web page includes two components, the header and the body component. The body component includes the content that is visible to the user. By clicking the "view" and then the "source" option of the web browser, you can see the header and body tags for this document. Hits: Hits refer to the number of files served when users access a web page. Total hits for a page will therefore equal the number of times the page is accessed X the number of files included on a page. Thus a page that includes one graphic file will serve two files when it is accessed; the html file of the page, and the image file the page calls. This is a metric that is often misused when media quote the activity a web page receives. (To double the number of hits, simply double the number of files the page includes.) Better metrics, for web analytics, include impressions and page views. Homepage: The homepage of a web site is the entry point to the site. It is the page that will usually have a web address (URL) that ends with .com, .edu, .org, .gov or .cc (the 2 letter code for the country outside the USA). The actual filename, in the above scenarios, is index.html Users can create their own homepages that may be subsidiary to the above, and therefore use a subdirectory, but using index.html as the filename is still better (otherwise viewers can see the files in your directory by typing that filename with the file path). While the homepage is designed to be the entry point to a web site, designers cannot assume that all viewers will enter the web site by that page. It is important to consider all pages as potential entry points, and design all pages to market the site online (search engine optimization etc.) and for easy navigation to find the homepage. Hypertext: Hypertext refers to the connectivity between web documents, which is nonlinear. Thus any part of the document (word or phrase) can launch another document, or another part of the same document, via a hyperlink. In this example, the word web is hyperlinking to an explanation of the word, which appears at the end of this dictionary!
254
HTML: HTML (Hypertext Markup Language) is the original and principal language of the world wide web. Invented by Tim Berners-Lee in 1990, it is a derivative of SGML. The W3C is the organization charged with ensuring the compatibility of HTML with competing browsers and other web languages. The following is a brief historical timeline of the development of HTML. To learn HTML two popular guides are NCSA's Beginners Guide to HTML and The Barebones Guide to HTML. You can also view the HTML used for this (and any page) by accessing 'view' 'view source' from the top left of your browser. HTML code: Refers to the lines of code that an affiliate places on their web page(s) for linking to the merchant's site. This HTML code contains the unique identifier that identifies the traffic as coming from the Affiliate's web site. Identity Theft: Identity theft refers to the stealing of information about a person that allows a second person to assume the identity of the first. Essentially this only requires knowledge of very limited information, including a social security number. While most Identity Theft still occurs through traditional means of scouring house hold waste materials, the threat of theft over the Internet is a concern for e-commerce. It can occur as data is in transit (for a transaction) or data that is stored on a company's site, that is stolen, or from phishing activities. Theft can also occur via Google hacking (i.e. documents that are available on the Internet that should not be available, but are easily found via the search engines.) Identity theft is a major concern for privacy advocates Impressions: Impressions refers to the number of times a page is accessed over a fixed period of time. Thus if a page receives 1,000 impressions per day, then that page is accessed 1,000 over the course of the day. This term is often confused with hits, which is actually an incorrect use of this term (hits and number of impressions would be the same if the page was simply a text page with no additional files associated with it). Page impressions also equals the number of times an advertisement is served, assuming a banner is served each time the page is accessed. Impressions are a metric used in web analytics. Increasing Returns: Increasing returns refers to the notion that the greater the size of the network, the greater the advantage of each participant of the network (network effects). Each participant of the network brings value to the overall network. This is in contrast to diminishing returns which refers to the greater the size (number of users) the less each participant can benefit from participation. Broad examples of increasing returns include an open source project (the more contributors, the better the product) and a proprietary communications device (the more users of the device, the more people with whom a user can communicate). Google's search engine experiences increasing returns. The more content it houses in its databases; the more links it has pointing to various sites on the Internet. In bound links are an aspect of the PageRank system that provides the Google results. These results therefore improve as the volume of content increases (this was not the case for more traditional engines like Alta Vista that were based principally on keywords only, which does not scale as well.) Another example of increasing returns can be seen with Amazon's recommendation system, via collaborative filtering. The more users that are using the Amazon system; the greater the integrity of the recommendation system. Infomediaries: Infomediaries are channel intermediaries that are based on the transfer of information using the web. They are replacing traditional intermediaries in many distribution channels. Infomediaries include meta markets, portals, search engines, and bots.
255
In-house: alternative to using an affiliate solution provider; building and managing your own affiliate program internal to your company. Typically this is accomplished by purchasing a 3rd-party product such as Affiliate Wiz. Installed-Base: The installed-base refers to the customer-base of digital products. The company will have records of these customers (demographic and purchase behavior), and will be able to use these records in order to try to monetize the installed-base. Companies try to develop switching costs, in order to encourage their installed-base to remain loyal. By estimating the life-time value of a customer in the installed-base, we can estimate the value of the company. Instant Messaging: Instant messaging is a form of synchronous communication that allows users, on a specific network (AOL Instant Messenger, ICQ.com and MSN Messenger for instance) to communicate with other users, on that network, by sending short messages. Instant messaging services also allow users to determine when other users are online. Given that users can only communicate with other users on the same network, these services are certainly good examples of services that take advantage of viral marketing. It is likely that, with time, these services may standardize, so users of one network will be able to communicate with users on another network. This model makes more sense, and is used for a similar service, text messaging on cell phones, more common in countries outside the United States. Internet Backbone: The Internet backbone is the term used for the connections of the Internet of the large ISPs (for example MCI, British Telecom and UUnet). These ISPs provide the fastest data transfer and will be the most heavily trafficked nodes of the Internet. They then connect to smaller, regional ISPs and so on. Intellectual Property: Intellectual property refers to the rights provided to the owner of an expressed idea; invention; authored piece of work; a process; or a name attached to a company or product. A copyright protects creative content such as books, software and art. The copyright controls the potential for reproduction of the works. A patent protects an invention and an innovative process. A patent provides exclusive use of the invention for a fixed period of time. This creates a monopoly for the invention. A trademark is a sign, name or symbol that distinguishes one company, or product, from another. It is designed to reduce customer confusion. Intellectual property is granted on a territorial basis, but harmonization is occurring via international treaties within the WTO for instance. Intelligent Agents: Intelligent Agents are "bots" designed to work for the user in terms of executing transactions (typically search queries at this point) across the web. It is assumed that as Intelligent Agents become more sophisticated, they can accomplish more complex tasks for their users. Once they understand their users' requirements, they can act somewhat independently of user interaction, in terms of making online purchasing decisions and other tasks that currently require significant search and user decision making processes. Intelligent Agents will also become more useful as the semantic web develops. Interstitial Pages: Interstitial pages are a form of online advertising that appears between web pages that the user requests. Thus when a user elects to enter or exit a web-site, a page appears with its advertisement, in place of the requested page, the user then needs to select from that page to receive the page requested (or the advertisement page will disappear after a fixed time). This is a form of interruption advertising (similar to broadcast models) but this form of web advertising breaks information design rules, as the user had a certain set of expectations when making the page selection, the interstitial page did not match expectations.
256
Intranet: An Intranet is a network based on the Internet TCP/IP open standard. An intranet belongs to an organization, and is designed to be accessible only by the organization's members, employees, or others with authorization. An intranet's Web site looks and acts just like other Web sites, but has a firewall surrounding it to fend off unauthorized users. Intranets are used to share information. Secure intranets are much less expensive to build and manage than private, proprietary-standard networks (EDI). IP Address: An IP address is a numerical address of the computer broken into 4 groups of 3 digit numbers lower than 254. In most cases, these addresses are unique for each Internet connected computer throughout the world. Originally, addresses were obtained from Internet's Network Information Center (InterNIC) and later, in the Americas, the American Registry for Internet Numbers (ARIN). Today, only large ISPs are eligible to obtain addresses from ARIN, everyone else must request and address from their ISP. There is an exception to the uniqueness of addresses: Specific groups of addresses are set aside for use on internal networks for machines not connected to the Internet or trying to conserve address space. These addresses are either 10.x.x.x, 172.16.x.x, or 192.168.x.x. Use of these addresses is becoming more popular due to the shortage of addresses, which makes individual addresses expensive to obtain and keep, and the costs associated with changing all network addresses when changing ISPs, and the popularity of Internet connection sharing in small business or home networks. The IP address can also be used to help determine from where a web browser is located. This enables sites to present content specific to the location of the browser. For example Amazon is able to present amazon.co.uk content to browsers who are accessing the site from the UK. Sites can also restrict access to a range of IP addresses, therefore Google is able to limit IP addresses originated in China to google.cn. Similarly sites can present unique content to individual IP addresses based on previous activity with that IP address. This helps with personalization. As a web browser, we access a computer on the web by calling the domain name, which masks the IP address. Domain names are easier to recall. Domain names serve as the first part of the URL (web address). IPO: Initial Public Offering (IPO) refers to the offering of stock in a company to the public through a public market. NASDAQ is a popular market for e-commerce related companies. The IPO of a company serves as a significant liquidity opportunity for early investors, including founders and the Venture Capital investors. Internet: This is the network of networks, developed in the 1960s as a result of a US defense industry project DARPANET. It encompasses what we now know as email, Usenet Newsgroups, the Web, FTP and Telnet. ISP: ISP (Internet Service Provider) is the access consumers have to the Internet. Commercial ISPs include companies like AOL. There are many regional ISPs, and students can consider their University as their ISP if that is how they access the Internet. The connection between the consumer and the ISP is typically the slowest aspect of the Internet (also known as the last mile problem). The ISP will then have a connection to the backbone of the Internet, which is essentially a collection of larger ISPs (MCI, British Telecom, UUnet) via a T1 line or similar. Keyword: Keyword is the term used for words included in a web page that would match words used by web surfers in finding that web page (via a search engine). Identifying appropriate keywords and using them on a web site is important for search engine optimization. Keywords can simply be words included in the body text of the document, or added to the header using meta tags to increase the number of
257
keywords. Using keywords in the title tag is also important. Selecting keywords, that match your target audiences' use of the web when searching your product, is a critical marketing tactic. A singular word or phrase that is typed into a search engine search query. Keyword mainly refers to popular words which relate to any one website. For example, a web site about real estate could focus on keywords such as House, or phrases such as Home for Sale. Last Mile Issue: The Last Mile issue refers to the connection between the user and the ISP, which is typically the slowest aspect of the Internet access. As with a chain, the quality of access is governed by the weakest link, thus the slow connection impacts the entire web browsing experience. This issue evolved due to the lack of competition in the telecom industry, until very recently. Therefore technology innovation was not as rapid (read very slow) compared to other innovations governed by Moore's Law. Some users (in the U.S.) typically connect from home with a 56K modem. Broadband access, via cable modems and DSL technologies are beginning to become more widely adopted. Learning Curve: The learning curve (also known as the experience curve) represents the outcome of a company's experience when developing a product. As the company becomes more experienced, it is able to develop a better product, and / or develop products more efficiently at reduced cost. The learning curve effect has a significant role in helping companies benefit from first-mover advantage. Later entrants into the marketplace have a difficult time overcoming the experience advantage, as firstmovers release additional versions of the product. Legacy Business: Legacy Business refers to a traditional business that develops a web presence to transact business. Barnes and Noble is an example. This is in contrast to a pure play business, which is developed as a new entity for the web, and had no prior presence, such as amazon.com. License: A license is used to allow the author of a piece of software (intellectual property) to establish the rights of a user in terms of the copy of that software that contains the license. Unlike tangible goods, which are clearly limited in terms of what an owner can do with the product, digital goods are easy to make perfect copies. It is therefore important to establish limits. While the user may have purchased a digital copy, this does not imply freedom of use of that copy. The license will detail what the user is able to do (in terms of resell, number of machines the software can be applied, making modifications to the software etc.) The free software movement (also known as open source) has created a set of licenses that creates greater freedom of use of software, which is more appropriate for innovation among the hacker community. Lifetime Value: Lifetime Value of the Customer determines the value of a customer to a firm, over the lifecycle of that customer. This removes the focus on individual transactions with customers and has become increasingly used with the developments of technology and market research, and thus the ability to focus on narrower target markets, even to the individual consumer in some cases. Lifetime Value is an important measure used for relationship marketing programs. Lifetime Value of Customers was a popular metric for Internet firms as they built their customer-bases. In order to calculate the Lifetime Value, the company needs to determine the cost of customer acquisition, and the cost of customer retention, the average lifetime of a customer, and the average value the customer provides over its lifetime. It is important to distinguish between customer acquisition and retention, as this will allow marketers to understand the true value of a specific marketing campaign (cost of acquisition), and the value new customers can bring over their lifecycle (value to company - cost of retention).
258
The Lifetime Value of the Customer = The revenue provided to the company by the customer over its lifetime - (Cost of Customer Acquisition + Cost of Customer Retention). Link Exchange - When two websites swap links to point at each other. Link Popularity - A count of the number of links pointing (inbound links) at a website. Many search engines now count linkage in their algorithms. Lock-in: Lock-in refers to the ability of companies to ensure their customers do not switch to competitors, thus switching costs can establish lock-in. Switching costs can be established in many ways. The usability of a product can establish lock-in for that product, as customers learn how to use the product, they don't want to reinvest in learning how to use competing products. Wall Street Journal is a good example of trying to establish this type of lock-in. It heavily discounts its product to the education market, hoping that as people get used to getting their business information via the Journal, they will continue to do so after they graduate and begin working. The user interface of digital products are another example of this type of lock-in. The airlines establish lock-in by developing frequent flyer programs. As people fly more with one airline, the benefits they receive increase, in a non-linear fashion. B2B markets that increasingly rely on relationships and long-term contracts are clearly prone to lock-in. Manual Approval: Refers to the process of validating an affiliate application and then approving them after validation. This can also refer to the process of approving sales after they have been validated. Marginal Costs: Marginal costs are the costs associated with creating an additional unit of product. This is similar to variable costs, which are the costs that increase directly with the increase in production (unlike fixed costs). Digital products typically have very low marginal costs, when compared with traditional goods (materials, labor etc.) and if the product is distributed via a web site, then the marginal costs can be zero. The consumer is bearing the distribution costs, and there are no packaging costs. This is why companies are able to market their products for free on their web sites, in order to try to entice further purchases at a later time (in the hopes of creating lock-in perhaps). Netscape pioneered this approach and was able to offer its versions of its browser on its web site, changing the way software is marketed. This enabled them to create significant market share very quickly. They were able to do this, due to zero marginal costs. Marginal Consumer: Marginal Consumers are the consumers that value the product least in terms of it satisfying their needs (the value proposition for the product is weakest among those that purchase the product). They are most likely to switch to other products to satisfy their needs, and will be the first in the marketplace to do so, if the marketplace changes in favor of another product to satisfy the same needs. Market: A market traditionally referred to a place where buyers and sellers met to exchange goods. The exchange is a function of the positive sum relationship of the buyer and seller. A market is now better defined as a group of buyers and sellers for a particular product (a group of people who share a similar need). The advent of technology (industrial revolution) has seen the separation of supply and consumption, hence the broader term for a market. Types of markets include consumer (the exchange involves the final consumer, also known as B2C); business (exchange involves another organization, also known as B2B); global (exchange involves overseas parties); and government or non-profit. Each of these types of markets includes different marketing challenges, and thus different focuses within the marketing mix.
259
For markets to be effective, rules (legal framework) need to be established. Thus as emerging markets (countries) mature, and legal frameworks are better established, their respective markets will become more vibrant. Marketing Mix: A Marketing Mix is the combination of product offerings used to reach a target market for the organization. The marketing mix comprises the Product (what the actual offering comprises), Price (the value exchanged for that offering), Promotion (the means of communicating that offering to the target audience, promotional mix) and distribution (also known as Place, the means of having the product offering available to the target audience). The marketing mix is also known as the four Ps. Market Segmentation: The method of identifying a group of consumers, within a broader market, that has similar characteristics and needs. Segments can be identified by examining demographic, psychographic, and behavioral differences. Thus a car manufacturer may identify different types of consumers preferring different styles of cars, so they will segment their car buying markets accordingly. Perhaps identifying that younger car buyers, with high incomes, will be more likely to buy a sports car, while an older population of car buyers may be more apt to purchase a town car. Once these segments are identified, marketers can develop unique marketing mixes that target each segment. For example, the marketer may identify a number of specialty magazines that the young affluent market reads, thus they will run their advertisements for sports cars in these magazines. Mass Customization: Mass Customization is the ability to produce products, customized to the individual, at a large scale, at a price that is similar to mass produced products. Mass customization requires a system for customers to specify their requirements and a build-toorder approach (thus there is no inventory in this system). Dell is a good example of a company that has adopted mass customization. Mass customization is not the same as personalization, the use of data about an individual to create a unique marketing presentation to that individual. MadeForOne.com is a useful resource for information on Mass Customization and Personalization. M-Commerce: M-Commerce (Mobile Commerce) refers to access to the Internet via a mobile device, such as a cell phone or a PDA. Once m-commerce becomes ubiquitous (it has greater rates of acceptance in places like Europe and Japan than it does in the US due to standards that have developed (Japan the standard is I-mode, in Europe is WAP), it will change the utility of the web from a business standpoint. Contextual Marketing, the ability to communicate with a person when the person is likely to be receptive to the communication, will further evolve, due to the mobility of access versus a PC. GPS is used to identify where someone is located. SMS is the messaging system across mobile devises that complements m-commerce. Medium, Media: Medium is the means of communication. Commonly referred to by its plural, media. Typical commercial media are TV, radio, newspapers and magazines. A piece of paper is also a medium, as it can carry a message, communicated between the sender (the author of the note/memo/story) and the receiver (those reading the content of the paper). The Internet, and its various components are media. The web, as a medium, is quite different to other, more traditional, media. It is a distributed medium, thus the content that the medium communicates originates from many web servers around the world (75 million web-sites January 2006).
260
The web is a non-linear medium. Thus unlike other media, the consumer controls the navigation, due to the hypertext design. With other media, the marketer has more control on how the receiver receives the message. The web is a multi-media medium. This is in terms of its hyperlinking scheme, and its use of text, audio and video. If one considers various components of the web (chat rooms and discussion boards) and email (actually an aspect of the Internet, but enhanced by the web) then multi-media takes an additional meaning in terms of the types of communication it fosters. The web is a niche medium, it can satisfy the needs of those with obscure interests much like it can for those with mainstream interests. The web is an unobtrusive medium, thus users need to seek out the website, rather than having the web presence "pushed" to the consumer (obtrusive, like TV, radio, email etc.) The web is a self-serve medium. Consumers can use the web, when they want, in order to satisfy their informational needs. RSS and other Web 2.0 technologies are now providing a push environment which is controlled by the consumer. Merchant: The person selling the goods or service is referred to as the merchant. The merchant pays affiliates for sending traffic to the merchant's web site after a product or service is purchased. Meta Market: Meta Market is a web-based market centered around an event or an industry, rather than a single product. These are markets of complementary products that are closely related in the minds of consumers, but spread across different industries. The web allows us to match producers' desire for economies of scale, and consumers' desire for variety of choice to satisfy a set of needs. Thus we can have a meta market for a wedding (event) that includes honeymoon recommendations, sources for engagement rings and wedding gowns. Equally we can have a meta market for an entire industry (for example chemical industry) where the industry can trade excess inventory, source new suppliers and find new vendors. These types of markets are easier to establish in the web world, than they were before the web, and can prove very effective. Edmunds.com is an example of a meta market for the auto industry, the knot for weddings. Meta Tags: Meta tags are tags that can be included in HTML source code in the header section. The most common meta tags allow the designer to include additional keywords into a document (keyword meta tag) and specify the text that appears when a search engine includes the document in its database (subject meta tag). They are therefore useful for increasing the utility of the document as it is cataloged by a search engine (SEO). If you click on the View option of your browser, and click on source, you can view these two meta tags for this dictionary. Author generated source code that is placed in the header section of an HTML document. Current popular meta tags that can affect search engine rankings are keywords and description. The meta KEYWORDS tag is used to group a series of words that relate to a website. These tags can be used by search engines to classify pages for searches. The meta DESCRIPTION is used to describe the document. The meta description is then displayed in search engine results. Metcalfe's Law: Metcalfe's Law states the number of possible cross-connections in a network grow as the square of the number of computers in the network increases. This is the law that governs network effects. The original quote, by Robert Metcalfe: "The power of the network increases exponentially by the number of computers connected to it. Therefore, every computer added to the network both uses it as a resource while adding resources in a spiral of increasing value and choice." Micropayment: Micropayments are small transactions, perhaps of the order of a few cents. They are being considered for digital content on the web. For example, a magazine selling an article (unbundled)
261
rather than an entire issue (bundled) with additional information that may not be of interest to the consumer. This may then create alternate business models for content providers. Monopoly: Monopoly is a marketplace structured such that it is supplied by one marketer, or one marketer has an overwhelming market share. There is thus no material competition in the marketplace. A monopoly is sometimes mandated (and supported by the government) but is also oftentimes not legal and there have been cases where a firm was 'dismantled' by the FTC once it was clear it had a monopoly (AT&T in 1982). A monopolistic company has such advantages over consumers and other firms it tends to 'misbehave'. Moore's Law: Moore's Law posits that the cost of technology declines by 50% every 18 months. Gordon Moore, in 1965, observed that the number of transistors per square inch on integrated circuits had doubled every year since the integrated circuit was invented. In subsequent years, the pace has slowed down a bit, but data density has doubled approximately every 18 months, and this is the current definition of Moore's Law, which Moore himself has blessed. Multi-Level Marketing: Multi-level marketing (MLM) is a marketing system that rewards consumer resellers for the sale of the product and for the recruitment of other resellers for the product. Typically resellers are paid a commission on what they directly sell, and a smaller commission on their recruits' sales (and their recruits' recruits' sales etc.) This is the multi-level aspect of the term. Amway and Avon are the more recognized marketers that use this sales method. With the evolution of the web, we are seeing Internet firms adopting this strategy with a viral marketing style program. Both viral marketing and MLM programs rely on the connectivity of consumers. Viral marketing programs do not offer an economic incentive to attract new customers, unlike MLM programs. Affiliate programs are also an example of MLM. Multi-Level Marketing (MLM) has some similarities to viral marketing, in terms of taking advantage of the connectivity of customers with potential customers, but MLM offers a direct incentive for customers to recruit additional customers. Negative and Positive Spirals: These are events that reinforce each other, either positively or negatively, depending on the situation. For a positive spiral, a positive event occurs, this triggers another positive event, this then has a positive effect on the first event etc. (known as increasing returns to scale). Thus if someone enters to participate in a network (purchases a fax machine) then that person increases the value of each fax machine in the network, since the fax machine is now more useful. This increased value encourages more people to purchase fax machines, which in turn increases the value of each fax machine, as a user can use it to communicate with more people. This is more commonly known as the fax effect, and while its example is a little dated, the concept still applies for growing networks. A negative spiral occurs when simultaneous negative events impact each other. Thus as consumers leave the market place for a product, they can either decrease the value of the product for those remaining in the marketplace (this is common for digital (networked) products) and / or increase the price of the product for the remaining consumers, as the average cost of the product increases. Either instance with have a further impact on the remaining consumers, and more consumers may therefore leave the market for the product, compounding the effect. Once this spiral occurs, many products will inevitably not survive. The Betamax standard is a good example of this. Traditional news media are also falling prey to a negative spiral as people source their news online and classified advertisements, part of a newspaper's business model, are also moving online.
262
Netiquette: Netiquette refers to "Internet etiquette." Since the Internet does not have a set of rules established by a government, or an independent agency, it can (potentially) be a pretty chaotic environment. For such an environment to be effective, those participating need to follow the etiquette that is established. Thus netiquette refers to an established set of rules developed by the community itself, rather than an independent body. Since each participant of the Internet has an incentive to see the Internet prosper, we are more likely to want to follow netiquette to insure future growth of the Internet, similar to the prisoners dilemma scenario. While as an individual, over the short term you may benefit from violating certain aspects on netiquette (defecting: using spam for example), in the long run, if everyone adopted such a philosophy, the Internet would no longer be a useful medium, for anyone Networked Economy: [net] This refers to the fact that as consumers, we are now connected together, through the network of the Internet. This increases the likelihood of consumers sharing information, as the cost of sharing information decreases and the means for doing so increases. This has a significant impact on the field of marketing and brand management. No longer do marketers control the messages they use to market their products to consumers. Consumers are now talking to each other and are becoming a viable source of information for other consumers. The viral marketing effect occurs due to a networked economy, as information is passed through networks at great speed. The connectivity that occurs in the market is enhanced as markets adopt specific communications standards. Once a standard has been adopted, the market can become more effective. Thus standards become very important in establishing a market and the subsequent success of the market in a networked economy. Network Effects: Network effects refers to the notion that as more people participate in a network, the network becomes more valuable to each participant (a significant part of the value of the product/network, are the other participants of the network). This is also known as increasing returns to scale and a positive spiral. This effect is common in digital products, more specifically, products that benefit from the connectivity of the customer base. The fax has been used as a very good example of this. The first fax machine that was made available to the first consumer had no value to that consumer, since there was no one with whom to correspond. Once a second consumer owns a fax machine, each consumer has one person with whom he/she could communicate. When the third fax machine was sold, each owner could now communicate with two people, increasing the value of the product. The "fax effect", as this is known, is governed by Metcalfe's law. Markets that experience network effects are prone to become more effective as more people join one network (product in the market) rather than having the market segmented with many proprietary networks (competitive market). Once network effects are established, markets tend to tip, favoring the market leader at the expense of other products in the marketplace. Thus, while we may not appreciate the dominant position that Microsoft has established in the software market (and they may have behaved inappropriately as a function of this dominant position) there is no doubt that as consumers we are better off using software that each of us can transfer to each other when communicating with each other, and when moving from one organization to another (that may require employees to learn different software packages that accomplish the same tasks (different word processing packages etc.) Off-line Promotion: This refers to the marketing and promotion of your site in such traditional manners as networking, print advertising, media, event sponsorship, and merchandising. Open Source: Open Source is a term, developed in 1997, that represents free software. The term was designed to emphasize the freedom of use aspect of the software (source code is open), and not allow
263
people to assume free meant no cost (which it did not). Aside from the marketing aspect of the new term, there are also differences in the ideologies of the proponents of the open source movement as a "branch" of the free software movement. The open source movement (Eric Raymond et al.) believes that open source should be a business choice, and only appropriate when it makes business sense (Magic Cauldron paper discusses this). The free software movement (evangelized by Richard Stallman) believes that all software should be free, and only if all software is free will free software be truly effective. Since all software development relies on previous "knowledge", and that previous knowledge is public domain, then new knowledge, as a derivative, should also be free. Opportunity Costs: Opportunity costs refer to the costs associated with giving up an opportunity. They are relevant in the marketing of digital products when one considers the value lost to the company when giving away a product for free. Since digital goods primarily consist of fixed costs and often have zero marginal costs then marketing strategy often dictates to give-away a version of the product to encourage consumers to upgrade at a later time (assuming lock-in etc.) The only cost incurred here would be the opportunity cost of the lost revenue from the consumers that would have paid for this version of the product in the first place. To avoid this situation, companies typically segment their markets, and offer a free product, with limited functionality (and no customer support or documentation) to a casual user group, and an upgraded version, at a price, with customer support etc. to a more sophisticated customer. The company will hope the casual users will upgrade to the upgraded version as they become more sophisticated users and more reliant on the product. They also assume the sophisticated user will not be satisfied with the free version, due to its lack of functionality. Examples of companies employing the tactic of giving something away for free, in the hopes certain users will upgrade, include Blogger and Jot. Opt-in/Opt-out: Opt-in / Opt-out refers to the mechanism used by marketers to allow users to signal their interest in receiving information from the web site owner. They are used to develop permissionbased marketing programs. Users have to be careful when transacting with a web site, often times the site will design the transaction so the user automatically opts-in to receiving marketing information by not explicitly opting out. Sending mass emails to users who have not given explicit permission is known as spamming. Typically an opt-in process will generate a smaller, but more qualified, list of users. P3P Privacy Policy: Platform for Privacy Preferences (P3P). A protocol for sharing private information over the Internet from the World Wide Web Consortium (W3C). A Web site's privacy policy is defined by the Webmaster answering a standard set of multiple-choice questions, which result in tags embedded in the Web site's home page. Users also define their privacy requirements in their P3Penabled browsers; for example, whether they allow their names disclosed to third parties. If the Web site policy and user preferences are not the same, the browser alerts the user. P3P also assists with online sales. It lets users decide what specific data they are willing to divulge automatically to the site, such as shipping address and credit card number. If the site requests more data, the browser alerts the user, who can then decide whether to share it or not. For more information, visit www.w3.org/P3P. Paid Placement: A paid placement search engine charges websites on a per visitor basis. Patch: A patch is an addition to a piece of software program, used either to repair the software (fix a bug), or submitted for inclusion in updated versions in the case of open source software.
264
Patent: A patent is a form of protection afforded the inventor of a process. It is a form of intellectual property protection (copyright protects ideas, patents protect processes / inventions.) A patent holder can provide a license to establish use of the protected invention by others. Pay-Per-Sale: An affiliate marketing program that rewards affiliates based on each conversion to a sale such as when purchasing a product or service from the merchant's web site. Pay-per-sale programs usually offer the highest commissions but tend to have the lowest conversion rates. Pay-Per-Lead: Affiliate program that rewards affiliates for conversions to leads. A lead might include a signup form, software download, survey, contest or sweepstakes entry, signup for a trial, etc. Pay-perlead generally offers midrange commissions and midrange to high conversion ratios. Pay-Per-Click: Rewards an affiliate for each unique click to the merchant's web site. This type of affiliate program is uncommon because of click fraud or fake clicks. Peer-to-Peer: Peer-to-peer refers to the design of a service that does not rely on centralized networking services such as DNS to connect end users' computers. This design accounts for the unpredictable accessibility of these end nodes in making connections between users. Traditional networks follow a spoke-and-wheel design, where the network is organized around a central hub, the site's users come to interact with that hub from client workstations. In peerto-peer applications, many or all of the functions performed in connecting a traditional, server-based, network are off-loaded to the client machines connected to the network. Performance-Based Marketing: Marketing in which the merchant only pays commissions for results such as conversions to sales or leads. Permission Marketing: Permission Marketing refers to a communications process, between the marketer and the consumer that the consumer gave "permission" to the marketer to participate. This is becoming more common with the web, as consumers "opt-in" to a mailing list from a company's website. This allows the marketer to develop an ongoing dialog, in order to build a positive relationship and communicate messages relevant to the marketer's product. Product information, combined with additional incentives (prizes or other rewards) can be used. Personalization: Personalization is the ability of a web-site to present content that is unique to the individual (client machine) viewing the content. This unique content is based on the individual's past behavior with the site. Tools for web-site personalization include the cookie file which identifies the user; server-side scripting (this allows the presentation of data, stored in the company's databases, to be presented dependent on the cookie file) and collaborative filtering (makes predictions on preferences based on similar customers' preferences). Phishing: Phishing refers to the act of trying to gain sensitive data from a user by sending the individual an email that requests an update to an account of a legitimate web-site (eBay, Amazon for example), i.e. a trusted source. While the web-site is legitimate that the email requests the individual to update, the request is not. The actual update occurs on a site other than the site noted in the email, which is gathering the data to exploit for illegitimate purposes (identity theft for example). A user can identify such a request by looking at the URL to which the site is pointing that is making the request. If the URL 'appears' to be from the legitimate site, then it is an image, masking the site that is gathering the data. Phishing tactics are responsible for a portion of email spam. Platform: A platform is an environment needed to run a piece of software. Thus the Windows Operating System serves as a platform for the Windows Office Suite. Further a browser would be considered a
265
platform that a plug-in would need for it to function (thus Internet Explorer is a platform for Windows Media Player and Real Networks). Plug-In: Plug-in refers to additional software that is required to execute a transaction via a web browser. Thus if the webpage is designed to run with something that is not standard to the browser, the viewer needs to download an additional plug-in. This may be used to run enhanced graphics (Flash), sound (Real Audio) or 3D (Cosmo Player), or other such rich media applications. Before designing a site to require a plug-in, it is important to note how much of your target audience has the additional plug-in, the likelihood of those not having the plug-in downloading it, and whether the design functions without the plug-in (i.e. does the additional feature(s) compliment or replace the information design of the site). As the web browser develops, the requirements of use of plug-ins will diminish, so this is a temporary situation. It is advised not to require the use of plug-ins on the homepage, especially if the information from the plug-in is required to meet the informational goals of the site. Podcasting: Podcasting is a term used for broadcasting audio and video files (MP3) over the Internet that includes two features. The content has an RSS feed, which enables users to subscribe (thus the content is pushed out to the subscribers) and the content syncs with an audio device such as an iPod (hence the name). Pop-up Advertisements: Pop-up advertisements are a form of Internet advertisements that appear in a separate window, either as a full screen (but behind the current window, and also known as a Popunder ad.) or partial screen (over laying the current window). These advertisements, similar to some interstitial advertisements, do require the user to take some form of action (even if it is to simply close the window). The benefits are the user can simply continue to browse the web without being interrupted, yet still engage an action with the advertisement if desired, at a later time (unlike other forms of web advertising). Balancing this, they do create another window in the user's screen that the user did not request; this can be considered somewhat annoying. Portable: Portable refers to the ease of mobility of the medium. A portable medium is one that can be carried with the consumer, wherever the consumer is. Newspapers and magazines are more portable that the TV or the web, the radio falls between the extremes. As the web becomes wireless, its portability (and hence utility) will increase. As the web migrates to portable devices (cell phones and PDAs) m-commerce will evolve. Portal: Portal refers to the entry point webpage for a particular theme; whether it be an industry (chemical or auto industry sales perhaps) or an occasion (wedding purchases). Portals serve as the ones-shop starting point to execute all transactions within the theme. They are also referred to as an infomediary. Positive Sum Relationship: A positive sum relationship is a relationship between two entities which are, as a sum, better off from the participation of that relationship. This is in contrast to a zero sum relationship, where the outcome of the relationship is a gain for one participant at the direct expense of the other. Examples of positive sum relationships can be found in business transactions (trade in general) and in biology (bumblebee and the flower). Long term positive sum relationships are also known as symbiotic relationships. Zero sum relationships can also been seen in biology (the food chain) and in games, such as chess and checkers. Game Theory tries to predict best decision making outcomes based on the relationships of participants, and the consequence of decisions based on positive sum relationships or zero sum relationships.
266
Pre-Money Valuation: Pre-Money Valuation refers to the value of the company before an outside investment is made. Thus if a company has a pre-money valuation of $5 million, and a Venture Capitalist invests $10 million, then the Venture Capital firm will own 66% of the business after the investment ($10M / $15M = 66%) Prisoners Dilemma: Prisoners Dilemma is a popular game theory model. It is a game between two players that is designed to see how one player reacts to another player's decision. The following is a good description of the scenarios the game provides. The choices for each move are to either cooperate or to defect, and depending on the combination of both players' decisions, points for the move are assigned to each player as follows: If players A and B both defect, each gets 1 point If player A defects, and player B cooperates, A receives 5 points, B receives 0 If player B defects, and player A cooperates, B receives 5 points, A receives 0 If players A and B both cooperate, each receives 3 points. Unlike a zero-sum game (chess for instance) cooperation becomes the best solution. The problem is, for single moves, regardless of the decision of the other player, the best decision is to defect. It has been shown (Axelrod) that the best outcome of this game is for a player is to adopt a "tit for tat" strategy that begins with a cooperative move (this assumes a long term relationship is involved!) This can be applied to players involved in a symbiotic relationship such as entrepreneurs and venture capitalists! It is also very important in alliance forming for the standards setting process. Privacy: Due to the need to disclose data during transactions (unless for cash or smart card transactions), privacy can be compromised. An individual's Rights to Privacy is becoming more of an issue as businesses are increasingly able to gather data and use data for multiple purposes. With the Internet, privacy issues are exacerbated, as data is not only captured more easily during transactions, but data gathering is not exclusive to transactions (sites can track your movements etc.). The customer should better understand four things with respect to data transfer: How data is gathered? What data is gathered? When data is gathered? How data is being used subsequent to gathering? These issues (data gathering by cookies for example) and data usage (using data for own business, reselling data to gain additional revenue streams, combining data from multiple sources to create new sets of information) are increasingly unknown to customers. This uncertainty can lead customers to avoid transactions in the first place (and therefore compromise an individual's freedom). TRUSTe and similar organizations are evolving to help establish standards in data gathering and usage. Gathering data about a customer can often lead to a better service provided by the company. Thus there is a tension between the need to gather data (privacy concerns) and the need to provide a better service to customers (better personalization for example). Aside from the need to offer data as part of a transaction, another issue with respect to privacy is the ability for "outsiders" to view data that was not intended for them (either data that is stored or in transit). Cryptography is the field that is designed to protect information from those with whom it is not intended. Identity theft is also a growing issue with the activities of phishing.
267
Google is starting to create concerns for privacy advocates. Its Gmail product runs advertisements based on the content of emails received. This created concerns about the privacy of email content. You can type in a telephone number to the search engine and get the name and address of its owner (as well as a map of the destination). Google also has a lot of search pattern data at its disposal. Users trust Google will keep this private. Product Line: Product line is a collection of products, offered by a firm, that satisfy similar needs for different target audiences. Thus all products within a product line are related, but may vary in terms of size, color, quality etc. The product line is part of the broader product mix, which is the full suite of products offered by the company. Purchasing Process: The purchasing process refers to the entire process a consumer will go through before making a purchase. A simple model follows: Consumer Awareness (understands there is such a market/product) Interest (consumer learns more about the value of the product) Desire (consumer understands the need for the product) Action (consumer makes a decision to purchase a product) Depending on the stage of the purchasing process, the marketer will adopt different tactics to move the consumer to the next stage. The web is the only medium that is clearly useful at all stages of the process, simultaneously. The Consumer Purchasing Process contrasts to the Business to Business Process that requires the following stages: Problem Recognition; General Need Description; Product Specification; Supplier Search; Proposal Solicitation; Supplier Selection; Order Routine Specification; Performance Review, and also requires many people involved in the decision making process. Pure Play Business: Pure Play Business refers to a business that was established for the web, but had no prior physical presence. Amazon.com and eBay are examples of pure play businesses. This is in contrast to a Legacy Business; these businesses are the traditional businesses that also use the web (Walmart). Qualified Traffic: Visitors who are specifically seeking websites with content such as yours. Reach of Communication: Reach refers to the number of people a communications can reach. TV typically has high reach, although cable programs are more focused and therefore the reach is more limited as the programs are more targeted. A salesperson typically has a reach of one at a time. Reach of communication is usually a trade-off with richness of communication. The web is the first medium that breaks this relationship, and allows for reach and richness simultaneously. Recurring Commissions: The process of rewarding an affiliate on a recurring basis whenever the merchant charges a customer a recurring fee. For example, a web host that charges customers on a monthly basis might reward the affiliate a percentage of each month's payment from the customer. Referral Program: Referring a customer to your website in a manner outside the realm of the Internet. Referrer URL: Referrer URL refers to the URL of the web page that preceded the page in question. It is useful to know the referrer URL as this allows you to understand how users are finding the web page and which external pages are linking to you. You can also see which keywords are being used to discover your site from search engines. It is a part of web analytics. Relationship Marketing: Relationship marketing, refers to the notion of marketing to a customer with the expectation of a long-term relationship. This removes the need to focus on each individual transaction needing to be profitable, but rather the relationship, over its lifetime, be profitable.
268
Marketers are now able to segment their target markets to the individual consumer (one-to-one marketing) and understand the value each consumer can bring to the relationship (life time value of the customer). Relationship marketing also focuses on customer share, versus market share. The share of the customer dollar, rather than the number of customers within the market. Relationships between the buyer and the seller are also likely to incur lower transaction costs. Residual Earnings: Programs that pay affiliates not just for the first sale a shopper form their sites makes, but all additional sales made at the merchant's site over the life of the customer. Return on Investment: In relation to search engine advertising, it often refers to sales per lead. ROI: stands for 'Return on Investment'. This is what all marketing managers want to see from the money they spend on their marketing and advertising campaigns. The higher the sales, the large the number of shoppers and the greater the profit margin generated by sales the better the ROI. Reverse Pricing Model: [rev] Reverse Pricing Model refers to a model that allows the consumer to establish his/her requirements and offer those requirements for bid by the seller. Thus rather than the seller marketing a product to the buyer, the reverse occurs. Priceline has pioneered this model in the consumer marketplace, using airline tickets as the product. This model further reflects the changing power in the market from the supplier to the consumer. When this model can be effectively combined with the group buying model one can envision powerful groups of buyers creating interesting demands on companies. RFID: Radio Frequency Identification (RFID) is a system that allows for the tracking of a product, with an appropriate tag, throughout its lifecycle. It is useful in the supply chain of a company; it is also useful once the product has been sold to understand its subsequent uses. The latter creates privacy concerns. Rich Media: Rich media refers to media on the web that offers an enhanced, interactive experience. VRML for 3 D, Macromedia Flash and Shockwave would be good examples of languages for rich media. The Rich Media SIG is a good resource for emerging technologies. Rich media is often used for banner advertisements, for homepage's and for email communications. It is important, however, for designers considering the use of rich media, to understand the audience they are designing for, and make sure the audience has access to the information being conveyed via the rich media (browsers do not have many rich media technologies built into their viewing capabilities, therefore plug-ins are required). Many successful e-commerce web-sites, like Amazon.com, avoid rich media, and use a lowest common denominator design strategy. Richness of Communication: The richness of communication refers to the depth and interactivity of the communication. The ability to use multimedia to present compelling information to the consumer. While a TV commercial may be able to take advantage of audio, visual and text, it can only present a generic presentation to a broad audience, this is therefore not tailored to the individual consumer. Moreover, the TV is not interactive, further limiting the richness of the communication as the consumer cannot transact with the marketer. A sales person can develop a very rich presentation, based on the specific needs of the individual customer. The sales person can also execute a transaction during the presentation. This is a very rich medium. The web is also a very rich medium, as it is able to take advantage of multimedia, present information based on the individual and execute transactions. Richness of communication is usually a trade-off with reach of communication. The web is the first medium that breaks this relationship, and allows for reach and richness simultaneously.
269
ROAS: stands for 'Return on Advertising Spending'. This is the amount of revenue generated for every dollar spent on advertising. For instance, a ROAS of $1 means you're generating $1 in sales for every $1 in advertising spend, and a ROAS of $5 means you generate $5 in sales for every $1 in spending. Robot: A program that automatically does "some action" without user intervention. In the context of search engines, it usually refers to a program that mimics a browser to download web pages automatically. A spider is a type of robot. See also: Spiders. RSS: RSS (Rich Site Summary or Really Simple Syndication) is a means of distributing dynamic content (content syndication), using the XML format, to subscribers of that content. In order for a user to subscribe, he / she will need to sign up for a news reader aggregator (Bloglines etc.) RSS has become a popular technology for bloggers and podcasters to distribute their content, essentially 'pushing' content out to subscribers of the content rather than relying on readers to visit the site to determine if there is new content. RSS is also useful for news organizations which publish content as a matter of their business model (and update regularly). Examples include CNN and India Times. It would be useful for companies that publish news releases of newsletters for subscribers in email form. While RSS does require a reader to subscribe to a news aggregator before accessing content (this may soon be bundled with the web browser which will surely impact its rate of adoption) it avoids the problem plaguing email distribution of content: SPAM. Scalable: Scalable refers to the ease and flexibility of increasing the output of a given product, or the reach of a medium (marginal cost of increasing output or reach). The cost of increasing output (the reach of a medium) by one unit. If this is insignificant (or zero!) then the product/medium is highly scalable. The web and digital products are highly scalable. Search Engine: Search engines are web sites that are designed to allow you to search across the web. Search engines are a type of infomediary. Google is now clearly the most popular search engine. It trumped Altavista due to better results based on its PageRank algorithm. Yahoo! is a distant second. Amazon's A9 search engine is emerging as an interesting alternative. Among its features, it takes into account a user's previous search behavior in an attempt to personalize the search. Search engines rely on web designers to submit their pages to the engine, and on a spider that crawls the web to identify new sites. Search Engine Optimization is becoming a critical Internet marketing activity. Search is one of the most popular activities on the web for web surfers. It is second only to email, 90% of Internet users performing searches. US usage has grown 55% from 2004 to 2005. Search engines are an increasingly popular source of advertising space. Since people are using search engines to seek out information and go elsewhere on the web, this fits with hypertext advertisements. Emerging search engine advertising programs include Google Adwords and Yahoo! / Overture (which were goto.com the pioneer of ppc search engine advertising). These are PPC advertising programs that host text advertisements. Traditional search engines provide results based on the relevancy of the site to the keywords searched. Blog entries will also appear among the results in the traditional search engines; however there are blog search engines that only search the blogosphere. These search engines base their output on time. The most recent entry written, that includes the keyword, is thus the first entry returned. Major blog engines include Technorati, Google Blog Search and Feedster.
270
Search Engine Marketing (SEM): SEM comprises SEO and search engine advertising. Search engine advertising, in its current model, typically uses text-based advertisements that the marketer bids on based on the keywords the marketer wants to associate with the advertisement (contextual advertising). The business model is typically PPC. Goto.com pioneered the PPC model for search engine advertising. Goto.com was purchased by Overture which was ultimately purchased by Yahoo! Google's Google Adwords is the main competitor. Both these networks supply advertisements for other sites. Search Engine Optimization (SEO): SEO refers to the art of designing a web-site for better listings in search engines. This includes ensuring you have the appropriate keywords in the body text of the site, in the title tag and the meta tags. Google's PageRank algorithm also rewards sites that have inbound links, and even considers the anchor text of the inbound links. Search engines also reward sites with fresh content. Regularly updated blogs therefore serve as a good SEO tool. SEO has spawned a number of spamming efforts, which includes link spam (generating inbound links) a subset of Spamdexing. Search Engine Submission - A service that will automatically submit your pages or website to many search engines at once. Semantic Web: The semantic web is a reference to the efforts to apply machine-readable meaning to the web. The web's meaning is for the most part designed to be understood by humans, HTML is primarily used for visual presentation. Adding meaning for machines will make searching the web for appropriate content more accessible. An early example of adding meaning, using HTML, are the use of meta tags. Tags (Technorati Tags) are now being used in the blogosphere to help better categorize blog postings. Server: The server refers to the host of the information on the web. A software that runs on the server side is used to manage the information on the server. This is in contrast to the client-side, which refers to the user interface of the information (web). Server-side Scripting: Server-side scripting allows web designers to present dynamic content that is useful for personalization. PHP, .ASP and Javascript are popular scripting languages. They allow for content to be drawn from databases that are also dependent on the client cookie file. Amazon is a common example of this type of process. Shopping Cart Abandonment: Shopping Cart Abandonment refers to the loss of a customer who is going through the check-out process of an online transaction. Some statistics suggest that this can be as high as 75%. It is principally caused by poor usability of the site and the check-out process (too time consuming, too many clicks), and hidden shipping charges. Shopping Cart Technology: Shopping Cart Technology provides turnkey solutions for e-tail sites. These solutions include web site connectivity with a product database, capability for users to "store" purchase intent before the final transaction (this requires interaction with your cookie file) and payment processing. Signature File: The signature file (also known as the .sig file) is a file that can be incorporated into your email such that each time you send an email, the file is attached at the bottom. This can be considered as a replacement for the letterhead of your company. It should include your contact information, and should be no longer than four lines (according to netiquette). It is considered poor netiquette to create a signature file that is greater than the length of the email message!! Silicon Valley: Silicon Valley refers to the region of Northern California which serves as a hotbed for entrepreneurship. Hewlett Packard essentially served as the catalyst for this region, in the 1930s. It is the home for many notable high-tech firms, a major part of the venture capital community and Stanford
271
University. Due to the symbiotic relationships between entrepreneurship, venture capital and Stanford University, a robust ecosystem has evolved. Smart Card: Smart Card refers to a card that includes an imbedded chip that can store data. Since smart cards can store data, they can be used in transactions that allow the consumer to remain anonymous (data storage with the consumer, not the company) which is a key benefit for those concerned with their privacy. Smart Cards have not reached full adoption at this point, (higher rate of adoption in Europe versus U.S.) The Smart Card Alliance is an alliance of industry leaders working for the widespread acceptance of Smart Card technology. SMS: SMS refers to the standard adopted for text messaging via a cell phone. This allows people on separate networks to send text messages across networks. SMS supplements standards being developed for m-commerce. Source Code: The source code refers to the programming code that is written to develop the program, oftentimes it is compiled before it is run, therefore not viewable to the end user. Go to Once the program is compiled, it is readable by a machine, but very difficult for a programmer to understand. All free software (open source) programs are distributed with the source code as well as the compiled object code. One nice thing about writing web documents is you can see the source code for the page you are viewing. This allows you to more easily learn html. If you are using Internet explorer to view this page, simply click on the edit option at the top of the page, then select source. A similar process works with Firefox. Spam: Spam is the term used for unsolicited email sent by marketers and individuals who typically have purchased an email mailing list. The first major Internet spam actually occurred when two attorneys, Canter and Siegel, spammed UseNet news groups with their green card lawyer offer. View EFF's Canter & Siegel Green Card Lottery Net. The problem with spam is it can make the communications vehicle, whether the email inbox, the UseNet newsgroup, or the web discussion board, useless, as it becomes difficult to identify good information from spam. Spam should not be confused with marketing messages you receive via a permission-based marketing program, where you have elected to receive information from a company. However, some companies are reasonably tricky in terms of how they use the opt-in option to get customers to give permission (often as one of the final steps of a transaction), so while permission is granted, the customer's intent to grant permission is not always there. Spam can also refer to the notion of spamming a search engine. Spamdexing refers to all the means of spamming search engines, link spam refers to creating additional inbound links to a site to try to increase a search engine ranking Spamdexing: (also known as search spam or search engine spam) involves a number of methods, such as repeating unrelated phrases, to manipulate the relevancy or prominence of resources indexed by a search engine, in a manner inconsistent with the purpose of the indexing system. Some consider it to be a part of search engine optimization, though there are many search engine optimization methods that improve the quality and appearance of the content of web sites and serve content useful to many users. Search engines use a variety of algorithms to determine relevancy ranking. Some of these include determining whether the search term appears in the META keywords tag, others whether the search
272
term appears in the body text or URL of a web page. Many search engines check for instances of Spamdexing and will remove suspect pages from their indexes. Also, people working for a search-engine organization can quickly block the results-listing from entire websites that use Spamdexing, perhaps alerted by user complaints of false matches. The rise of Spamdexing in the mid-1990s made the leading search engines of the time less useful. The success of Google at both producing better search results and combating keyword spamming, through its reputation-based PageRank link analysis system, helped it become the dominant search site late in the 1990s. Although it has not been rendered useless by Spamdexing, Google has not been immune to more sophisticated methods. Google bombing is another form of search engine result manipulation, which involves placing hyperlinks that directly affect the rank of other sites. The problem arises when site operators load their Web pages with hundreds of extraneous terms so search engines will list them among legitimate addresses. The process is called "Spamdexing," a combination of spamming the Internet term for sending users unsolicited information and "indexing." Spider: A spider (also known as a crawler) is used by a search engine to identify web pages in order to be cataloged in the database of the search engine (web site designers can also submit web pages to be cataloged in a search engine). Spiders therefore help search engines to keep up with the evolution of web content by crawling through the web seeking new sites. To control spiders in terms of cataloging a web site, a designer can include a robots.txt file that instructs a spider to exclude pages that are not to be cataloged. Spiders: The main program used by search engines to retrieve web pages to include in their database. See also: Robot. Spider Detection: The process of detecting and ignoring automated spiders or bots such as search engines like Google/Googlebot. Spyware: Spyware is software downloaded on a computer that 'spies' on the user and reports user behavior to a third party and or takes control of the computer. Spyware does this without disclosure. Adware can sometimes be confused with spyware, but adware operates with full disclosure and may report data to a third party. Spyware is an obvious concern for privacy advocates, and is a type of malware. Stock Options: Stock Options are options, usually given to employees, to purchase stock in the company at a future date. The price of the option is established, thus if the company's stock price rises above the option price, the owner of the option is able to take advantage of the stock increase (current stock price - established stock price). Options therefore work well for high growth companies and are used to increase loyalty of early stage employees. They are also used to replace some part of the salary which helps reduce the company's cash flow (burn rate). Stock options may vest over multiple periods of time. Thus a certain amount of the options become available at certain stages. Standards: Standards are very important in order to establish a robust networked marketplace (A marketplace that relies on connectivity across consumers and multiple vendors etc.) If a market is fragmented with incompatible proprietary standards, it is not effective in serving all customers and businesses alike. Once a standard is established, the market may increase in size significantly. Standards can be proprietary, owned by one company (or a group of companies), i.e. Wintel. Standards can also be open, designed to increase the utility of the marketplace, where companies then compete
273
within a larger marketplace. Examples of standards setting bodies in the open format include W3C (evolution of HTML) and Web3D (evolution of a 3D standard). In order to develop open standards, alliances across competing firms need to form. Alliance formation is a political process that involves aspects of game theory. Sunk Costs: Sunk costs refer to costs that are non-recoverable fixed costs. Digital products usually have significant sunk costs (when compared to other fixed costs) in the form of research & development and intellectual property (copyright, patents etc.) for the product. If the product is not successful in the marketplace, the costs associated with the product development (intellectual property, labor) cannot be recovered. Thus when making pricing decisions about the product in the future; one should not factor in the sunk costs. If a product's cost structure is made up of sunk costs (no other fixed costs) and zero marginal costs then any price above zero will contribute to the company's bottom line. Other fixed costs that are not sunk (rent, depreciation on equipment etc.) should be factored in when making pricing decisions in the future, since these are ongoing costs to the company. The company will continue to have to pay these costs in the future, this is not the case for sunk costs. Streaming Media: Streaming media is media that can be played as it is being downloaded. This is useful for audio and video on the web as it reduces the inevitable delay involved in downloading large files. Streaming media is used for live broadcasts via the web. Super Affiliates: The highest performing affiliates. Typically less than 1% of affiliates are super affiliates yet that 1% typically will bring more than 90% of your sales. Symbiotic Relationship: A symbiotic relationship is a relationship between two entities which is mutually beneficial for the participants of the relationship. Thus there is a positivesum gain from cooperation. This is a term commonly used in biology to explain the relationship between two entities that need each other to survive and prosper. The bumblebee and the flower would be an example. The bumble bee extracts the flower's pollen for protein and its nectar for energy. The bumblebee, while collecting these sources, inadvertently brushes pollen from one flower to another to ensure the flower's reproduction process begins. The bumblebee needs the flower to survive, the flower needs the bumblebee to survive. These are positive sum relationships. Other relationships in biology, especially with respect to the food chain, are not so forgiving, a zero sum relationship. One 'actor' clearly benefits from the other (typically consumes the other). In this type of relationship, it is still essential that both players (as species not individuals) survive, or the dominant player will lose its food supply, and therefore die. If the foxes kill all the chickens, the foxes die as they lose their source of survival. If the predator kills all its prey, the predator will die. One can see a symbiotic relationship between Venture Capitalists and Entrepreneurs. Venture Capitalists need early stage investment opportunities. These are provided by entrepreneurs. Entrepreneurs need investment capital to develop their ideas; these are provided by the Venture Capital community. Thus both industries benefit from each others participation, a positive sum game. It is important that each keeps this in perspective, as if one industry tried to exert additional pressure (prisoners dilemma!) then in the short term they may be better off, but the long term survival of the relationship would be put at risk if it meant that the other player may not survive. Supply Chain: Supply Chain refers to the distribution channel of a product, from its sourcing, to its finished good status. The value chain comprises the supply chain and the distribution channel(s)
274
(finished good to consumer). The supply chain is typically comprised of multiple companies who are increasingly coordinating activities y via extranets. Switching Costs: Switching Costs refer to the notion of the hidden costs a consumer is faced when switching from one product to another in the marketplace. Consumers should really try to factor in the switching costs when making purchasing decisions, since these impact purchasing decisions they may be faced with in the future (limiting freedom of choice). Switching costs are developed by companies in order to try to establish lock-in. Target Marketing: Communicating with a specific group of consumers with similar characteristics, within a broader group of consumers who purchases a type of product. Market Segmentation is the process of target marketing. Once target market(s) are identified, the organization develops a product offering (marketing mix) that is positioned to be attractive to that segment. Offering the right offer to the right customer at the right time. TCP/IP: TCP/IP stands for transmission control protocol and Internet protocol. It is the basic language of network communication that allows all computers, anywhere in the world, to understand each other. It is the open standard that allowed the Internet to evolve. Text Advertisements: Text advertisements are text links that are paid for by the sponsors of the target page of the advertisement. They are a form of advertisement that can be considered more contextual (assuming the text link is relevant to the subject of the web page), and less obtrusive than other forms of advertising on the web. Text advertisements can also be used for affiliate advertising and the emerging search engine advertising programs from Google Adwords and Overture. Text Messaging: Text messaging refers to sending short text messages from a mobile phone to other mobile phone users using the SMS standard. This is becoming an increasingly popular form of communication outside of the United States. This is due to the economics of text messaging versus being online. Key advantages of text messaging (versus being online) include a user's ability to text people independent of computer access, rather than only being able to communicate when logged onto the Internet, it's less intrusive than a phone call, and it is less expensive than a phone call. Text messaging is a form of asynchronous communication. Tipping Point: The tipping point is the point at which the growth of the company's installedbase accelerates significantly. It occurs with products that are able to take advantage of viral marketing. A tipping point can also refer to the nature of the market, and how its balance turns to favor one company over another. Thus once one company experiences a positive spiral from network effects, its competitor(s) will experience a negative spiral, and the market will have tipped to favor the market leader. This may lead to a winner takes all scenario, where the balance of the market clearly favors one company over all others. Title Tag: The title tag (of HTML) refers to the element in the header that allows the developer to create a title for the document. This title is used for pages that link to the web page, including search engines and users' bookmarks / favorites list. The title needs to be very descriptive in order to encourage users to click-through to the webpage. The title should not be confused with heading tags within the page that are viewed by the user on the page. The title does not actually appear on the page. The title tag can be considered similar to the subject header of an email in terms of its utility and function. The title tag is important 'real estate' for keywords for search engine optimization.
275
Tracking Method: the way that a program tracks referred sales, leads or clicks. The most common are by using a unique web address (URL) for each affiliate, or by embedding an affiliate ID number into the link that is processed by the merchant's software. Some programs also use cookies for tracking. Text Link: link that is not accompanied by a graphical image. Tracking Code: Refers to the hidden 1X1 pixel tracking code that is placed on the confirmation page of your store for tracking sales conversions. Trademark: Trademark is a term, sign or symbol that distinguishes one company, and one product, from another. This is a form of intellectual property that needs to be protected in order not to confuse consumers when making choices. Protecting the trademark also helps develop the company's brand. Trademark holders have realized the importance of protecting their rights to their respective domain names. Cybersquatting is the deliberate attempt to acquire specific domain names with the hope of reselling them at a higher price, oftentimes to the trademark holder. Trademark law is typically implemented at the national level, which creates problems for the global Internet. However harmonization via bodies like the WTO helps with cross national dispute resolution. Traffic: A reference to the number of visitors a web site receives. Trojan Horse: A Trojan horse, similar to a virus, infects a user's machine by "appearing" to be a useful program (electronic greeting card, screen saver etc.) that users willingly forward to other users, unaware of the hidden maliciousness of the file. Two-tier: Affiliate marketing model that allows affiliates to sign up additional affiliates below themselves, so that when the second tier affiliates earn a commission, the affiliate above them also receives a commission. Two-tier affiliate marketing is also known as MLM (Multilevel Marketing). Unique Click: The process of only counting unique clicks from each web visitor. Unique clicks are typically tracked by recording the IP address and browser header. Unique Page Views: Unique Page Views refers to the number of unique users that access a page. This is determined by a combination of the IP address of the user accessing the page and the cookie file. Thus the unique page views metric is designed to calculate the number of individuals exposed to a page over a period of time, rather than the number of times the page is served, which is the number of impressions. Unique page views are a part of web analytics. Unique Visitor: A single individual website visitor. Visitors (or users) can visit multiple pages within a site. Unique users are important because it is an indication of success of a website. If you have high visitor counts, but relatively low page per user counts, that indicates that people are not finding your site attractive enough to sit and read through it. On the other hand, if you have low visitor counts and very high page per user counts, that is an indication your site is providing good information to people and you should do a better job of promotion. High page per user counts indicate good site potential, while low page per user counts indicate you need to rework the site with more content or better displays. URL: URL (Universal Resource Locator) is the web address of a web page. Thus the URL for this document is http://www.udel.edu/alex/dictionary.html. his is comprised of the domain name www.udel.edu, the directory Alex and the filename dictionary.html Many times you will see a URL that ends with either the domain name or the subdirectory, this is achieved by using an index.html filename. User Interface: User Interface refers to the intersection of the technical aspect of a system and its users. Users could be internal to the business / system (customer service support) or external to the business / system (customers). The design of the user interface typically has a significant impact on the
276
performance of the system. Users of a system also learn how to use the system over time, so good usability can help to create lock-in to the business for the customer. A business' homepage is an example of a user interface, as is any other webpage hosted by the business. Value Proposition: Value Proposition refers to the marketer's offering to the marketplace. It states the target market for the offering and the differentiating value the offering provides to its customers. Variable Costs: Variable costs refer to the costs that are associated directly with the number of units of product that are produced. For example, the materials used in making a product are considered variable costs of a product. Each product requires X amount of material, the costs associated with that material is considered variable (X * number of units produced) since the total cost to the firm changes depending on the number of units produced. The more products produced, the greater the costs incurred. Vehicle: Vehicle refers to a host that is used to carry an advertising message. Thus with the TV, a TV program (Seinfeld for example) would represent a particular vehicle, that attracts a specific target audience and is priced at a certain level. In the case of the web, websites that host advertisements can be considered vehicles (Google, Yahoo! Wired etc.) Other business-related sites on the web are those focused on marketing and business transactions, rather than on developing compelling content that attracts an audience in order to sell advertising space. Venture Capital: The Venture Capital (VC) Industry is a major source of funding for the entrepreneurial community. The industry itself has evolved over a number of years, but has only recently emerged as a popular career for many new MBAs. The industry focus is on early stage, pre-IPO funding opportunities. Typically a fund will be raised, that will be invested in a number of different opportunities that are reasonably high risk. In return for the investment, the VC receives an equity stake in the business. The VC also helps the business develop its management team, and takes seats on the board of the company. VCs are typically interested in making few large investments, due to the manpower needed to support each investment (recruiting and board seats). They focus not only on the business opportunity that is presented to them, but closely on the management team that is offered (human capital is clearly becoming the differentiating advantage of any business at this point!) In order for an entrepreneur to have an audience with a VC, s/he needs to have a pre-existing connection (a reference to the VC). Without this, the VC is less likely to review the business plan. Vesting: Vesting refers to the ability to monetize the investment in stock options. Thus if your options are available in three years, they vest in three years. Viral Marketing: Is a marketing technique that takes advantage of a marketer's customers in promoting the product. This technique was pioneered by Hotmail. Hotmail launched its free web-based email service with the tag line (at the bottom of each email) "Get your free email at Hotmail." As customers used this email service, and were emailing others, they were effectively sending an advertisement for the product. This attracted new customers, who repeated the process. Once a critical mass of consumers were using Hotmail, a tipping point was reached, where the number of new users started to increase non-linearly. Hotmail soon became the fastest growing media company in history. Illustrations of its success include it being the leading provider of email service in India, without having a physical presence in India. The term viral marketing comes from biology and the notion of how a virus spreads. A virus spreads very slowly within its host, until it reaches a critical mass (tipping point,) at that point it spreads through
277
the host quickly. The rapid adoption of a product or passing on of an offer to friends and family through word-of-mouth (or word-of-email) networks. Any advertising that propagates itself the way viruses do. Viral marketing is the extremely powerful and unique ability of the Internet to build self-propagating visitor streams, bringing about exponential growth to a company's Web site. This can consist of such things as affiliate programs, co-branding, link exchanges, email campaigns, and off-line promotion. Virtual Domain: A Virtual Domain is a domain name which is associated with an IP address, but is not the primary domain name for that IP address. This is used by web hosting companies to provide web hosting services for web sites whose addresses are not part of the hosting company's domain. Therefore when selecting a web host provider, you are not limited to using their domain name as part of your URL. Use of virtual domains means that an individual server does not have to exist for each individual domain name. Virus: A virus, a term "borrowed" from biology, is a malicious program that inserts itself into other program files to cause damage to the files. A user can inadvertently transfer infected files to other users using email (infected files can also be transferred by other means). Voice Over IP: Voice over IP (VoIP) enables the use of the Internet for carrying voice communications (most commonly telephone calls). This allows users to talk to each other without the use of the telephone network (of course indirectly using the network if dialing in via a modem, which does not offer the best VoIP experience). Sound is converted into digital format and sent, in packets, as data. VoIP is becoming more popular with the increasing use of broadband connections. Skype is a leading provider. Web: The web, also known as WWW, is the graphical multimedia aspect of the Internet. It comprises content, with the basic language of HTML (developed by Tim Berners-Lee circa 1990) and a browser (developed by Marc Andreesen et al. circa 1993) Internet Explorer; Firefox or Safari. The content resides on a web server. The design of the web follows a peerto-peer structure. Web 2.0: Web 2.0 comprises technologies such as blogs, wikis, podcasting and RSS. It is a term that tries to embrace a participatory web; a web where all can now participate in content creation and consumption. It thus presumes that Web 1.0 was a 'static' environment. Web Analytics: Web Analytics is the field of data mining the data that is generated from those navigating a web-site. Web Analytics allows a site designer to understand the flow of those going through a site, essentially measuring the behavior of the site's users. Which pages are most popular, which are the entry and exit points, and which the referrer URLs are. Metrics used include page views, hits, sessions and impressions. There are a number of software providers who provide web analytics tools, and a host should also provide this service to its clients. Weblog (blog): A blog is a website that is updated frequently by its author, in a standard format, with the most recent entry at the top, and older entries archived. Each entry is a unique URL, a permalink. Entries also include trackbacks and the option for allowing comments. Blogging software (such as Blogger.com and typepad.com) allow anyone the opportunity to be a publisher on the web (no need to know html), thus truly democratizing the process of publishing information (a potential threat to traditional media organizations). Blogs are used to annotate and collect news sources across the web; used as personal journals and for sharing experiences; and used by businesses to reach out to their customers and engage in conversations. The three main blog search engines Google Blog Search, Technorati and Feedster are good sites to discover blogs. They are also good sites to use to subscribe to search results that include keyword
278
phrases you want to watch (your company, your product, your competitors). You can subscribe to these results in your news aggregator. Blogs are also a good SEO tool. Search engines like sites that update often, and blog authors can certainly be deliberate about including the appropriate keywords in the title and body texts of entries. Web Ring: Web ring refers to a "ring" of web sites which forms a common navigation to allow browsers to view each site within the ring. The rings are comprised of sites with a common interest, so it allows those sites to potentially broaden their audience by linking with each other. This is a form of free advertising, much like bartering and banner exchange programs. You can view WebRing to search current networks. WiFi: WiFi networks use radio technologies (IEEE 802.11b or 802.11a) to provide fast wireless connectivity. A WiFi network requires an access point (base station) and each computer attached to the network needs a wireless network card. A computer that has a wireless card can participate in all "open" networks, but not proprietary networks (it's up to the hub administrator if the network is open or proprietary) without knowing the wireless network settings. Even with a proprietary network, security is an issue. WiFi security is easily compromised, so you should consider anything transmitted via WiFi as public knowledge. The encryption is auto-crack able, and the clients can be monitored or subject to man-in-the-middle attacks. Its almost impossible to make a wireless network private; their range will be more than you expect and can be picked up for long distances. This can be a good thing (public commons) or a bad thing (compromised corporate networks). One unauthorized access point on a poorly set up network can compromise the entire network. Wiki: A wiki is a web-based resource that allows multiple users to edit and contribute to the same web documents. Among a wiki's features, it requires only limited or no knowledge of HTML and keeps a revision history so it is easy to roll back changes if necessary. Wikis are considered a web 2.0 technology. The most 'famous' wiki is a web-based encyclopedia that anyone can edit and update. Wikis are useful for instances where collaboration is useful. Winner Takes All: The winner takes all phenomena, for digital marketplaces, highlights the notion that markets tend to favor the market leader to such an extent, other competitors can be driven out of the marketplace. This is a result of two issues. The network effects and positive spiral experienced by the market leader, making its product more compelling for the consumer, and the learning curve effect and reduced average costs of the market leader, enabling it to potentially reduce prices to a price point with which competitors cannot compete. Markets will tend to tip, and this is when the winner takes all phenomena come into play. Word of Mouth Marketing: Word of Mouth Marketing (WOMM) refers to the marketing that can be gained by actively engaging customers to share insights with each other (create buzz that goes viral). WOMM has clearly been around since the inception of marketing, but has gained more prominence with the evolution of the Internet, and the ease with which customers can share their stories. Web 2.0 technologies such as Blogs and News Readers are enabling WOMM. Discussion Boards have helped customers form communities. Good WOMM relies on great products that customers willingly evangelize. Marketers have been prone to try to 'effect' this by incentivizing 'fake' customers to talk about their products. This can backfire. One can now consider marketing initiatives as three concentric circles: the inner circle representing traditional / push marketing; the middle circle representing a
279
company's direct efforts to engage with customers with the web (hosting a blog, a discussion board etc.), WOMM; the outer circle representing the broader web, where the company's product is being discussed outside of its own web domain. Worm: A worm, as contrasted from a virus, is a self-replicating program that duplicates itself by means of the network, rather than a user taking action (inadvertent) to forward the file. XML: XML (eXtensible Markup Language) is used to enable the sharing of data across different sites on the web. A popular use of XML is RSS, used to subscribe to news feeds and blogs. XML is a means of describing data, in a customizable fashion, in order to apply a structure to the data that is necessary for the export of that data.
280
281
Basket of USD Shorts: A number of operations where the USD is being sold against various currencies. Bear: A trader who believes prices will fall. Bear Market: An extended period of general price decline in an individual security, an asset, or a market. Bid: The price at which an investor can place an order to buy a currency pair; the quoted price where an investor can sell a currency pair. This is also known as the 'bid price' and 'bid rate'. Bid/Ask Spread: The point difference between the bid and offer (ask) price Big Figure: The first two or three digits of a foreign exchange price or rate. Examples: USD/JPY rate of 108.05/10 the big figure is 108. EUR/USD price of .8325/28 the big figure is .83 Book: The total number of currency positions a dealer has at any given moment. Typically, the dealer aims to have a net position of zero in terms of risk. This means that for the aggregate, all customer's long and short positions balance each other out. Bretton Woods: The site of the conference which in 1944 led to the establishment of the post war foreign exchange system that remained intact until the early 1970s. The conference resulted in the formation of the IMF. The system fixed currencies in a fixed exchange rate system with 1% fluctuations of the currency to gold or the dollar. Broker: An agent, who executes orders to buy and sell currencies and related instruments either for a commission or on a spread. Brokers are agents working on commission and not principals or agents acting on their own account. In the foreign exchange market brokers tend to act as intermediaries between banks bringing buyers and sellers together for a commission paid by the initiator or by both parties. There are four or five major global brokers operating through subsidiaries affiliates and partners in many countries. Brokerage: A company that offers trading services to the public. Bull: A trader who believes that prices will rise. Bull Market: A market which is on a consistent upward trend. Buy Limit Order: An order to execute a transaction at a specified price (the limit) or lower. Buy On Margin: The process of buying a currency pair where a client pays cash for part of the overall value of the position. The word margin refers to the portion the investor puts up rather than the portion that is borrowed. Cable: The British pound/US Dollar exchange rate GBP/USD. Central Bank: A bank, administered by a national government, which regulates the behavior of financial institutions within its borders and carries out monetary policy. Carry Currencies: High interest rate currencies. Carry Grid: A grid of positions (including open orders, take profits, and stop losses) built on a carry trading strategy. Carry Positive: A carry trade where you are long the high interest currency and short the low interest currency. Excluding the volatility of the currency pair, this strategy is profitable based on the interest rate differential between the two countries. Carry Trade: The carry is the cost of keeping a position open overnight. Each currency has a different interest rate associated with it. You are paid interest on the currency you are long on, and you must pay interest on the currency on which you are short. The difference is the carry, sometimes referred to as the cost of carry. Cash on Deposit: Funds deposited in a trading account.
282
Chartist: A person who attempts to predict prices by analyzing past price movements as recorded on a chart. Clearing House Automated Payment System: A Forex settlement system used in the UK. Clearing House Interbank Payment System: An international wire system used by major banks. Closed Position: A transaction that offsets the number of units in a previous open position. In the case of a long position, selling the exact number of units so that your exposure in the market is zero. Closing a Position: The process of selling or buying a foreign exchange position resulting in the liquidation (squaring up) of the position. Closing Market Rate: The rate at which a position can be closed based on the market price at end of the day. CME: Chicago Mercantile Exchange. Commission: The fee that a broker may charge clients for dealing on their behalf. Commodities Exchange: An exchange where various commodities and derivatives products are traded, including wheat, barley, sugar, maize, cotton, cocoa, coffee, milk products, pork bellies, oil, metals, and so on. The Chicago Board of Trade and New York Mercantile Exchange are the largest and most wellknown commodity exchanges in the world. Commodity Futures Trading Commission: The United States regulatory agency for commodity futures trading Confirmation: Written acknowledgment of a trade, listing important details such as the date, the size of the transaction, the price, the commission, and the amount of money involved. Consumer Price Index (CPI): A month to month economic indicator which gauges changes in the cost of living by measuring price changes in a common basket of goods and services that most people use, such as food, clothing, transportation, and entertainment. Conversion Rate: The value of one currency exchanged for another currency. Convertible Currency: A currency that can be exchanged for another without special permission. Today, most of the currencies which were previously unconvertible are now convertible, such as the Polish Zloty. Copey: Traders' term for the Danish Krone. CORRA: Canadian Overnight Money Market Rate - The rate used by financial institutions to borrow money to cover a shortage of funds (primarily for end-of-day settlement) from those institutions with a surplus of funds. Correlation: A statistical term that refers to a relationship between two seemingly independent things. In Forex for example, one could argue that the Euro and the Sterling have a higher correlation than, for example, the Euro and the Brazilian Real. Correspondent Bank: The foreign banks representative who regularly performs services for a bank which has no branch in the relevant centre, e.g. to facilitate the transfer of funds. In the US this often occurs domestically due to interstate banking restrictions. Counterpart: A participant in a financial transaction. Counterparty: The other party in a Forex deal. In online spot Forex, the counterparty is the market maker. Country Risk: By virtue of economic, political, and geographical factors, some countries are more stable than others. Country risk in reference to Forex means the stability of the currency and the creditworthiness of its bonds.
283
Cover: (1) To take out a forward foreign exchange contract. (2) To close out a short position by buying currency or securities which have been sold. Cross-Rate: The exchange rate between 2 currencies where neither of the currencies are USD. Currency Code: The currency codes are specified by ISO 4217. Most codes are composed of the country's two-character country code, and the first character of the national currency name. Currency: Money issued by a government coins and paper money. It is a form of money used as a unit of exchange within a country. Currency Pair: The two currencies in a foreign exchange transaction. The EUR/USD is an example of a currency pair. See also: Currency Currency Risk: The risk that shifts in foreign exchange rates may undermine the dollar or any other foreign currency value of overseas investments. DAX: Deutsche Aktien Xchange, Germany's primary stock index. Day Order: A buy or sell order that will expire automatically at the end of the trading day on which it is entered. Day Trade: A trade opened and closed on the same trading day. See also: Day Trader Day Trader: A trader who tries to profit from short-term price movements, often taking and closing a position within the same trade day. Day Trading: The trading style of a Day Trader. See also: Day Trade Deal Blotter: A list of all the deals that were done in a trading day. Deal Ticket: A record of the basic details of a transaction that a dealer keeps, as opposed to the statements that customers receive. Dealer: An individual or firm that buys and sells assets from their own portfolio, acting as a principal or counterparty to a transaction. Dealing Desk: Used loosely as the place where dealers facilitate pricing and executing trades. Dealing Systems: Computer networks that link up banks to create the Forex market. Examples of dealing systems are Reuters' terminals and Bloomberg machines. Default: A term for breaching a contract. Deficit: In economics, when the balance of trades or payments are negative. Deflation: A deep and long-lasting decrease in the price of goods and services within an economy. It is the opposite of inflation which is an escalation in prices. An extended period of deflation can lead to a deflationary spiral - this is a decrease in prices resulting from reduced demand for goods and services which leads to lower employment. With fewer people earning wages, demand falls even more and further perpetuates the cycle. Deflator: The equivalent of the effect of inflation when one considers the difference between real and nominal GDP. See Gross National Product. Delivery: Date When a Forex contract matures, usually two days after the transaction is entered. In the scope of online Forex trading, delivery of the actual currencies is not taken. Rather, profits and losses are credited or debited from one's account balance. Delivery Risk: Risk where a counterparty is not able to fulfill his side of the deal even though he is willing to do so. Depreciation: When the value of a particular currency falls substantially. Depth of Market: The volume of buy and sell orders waiting to be transacted for a particular currency pair at a particular point in time.
284
Derivative: A financial contract whose value changes in relation to an underlying security. For example, an option changes value according to the asset that underlies it. Desk: See also: Dealing Desk Details: The information necessary to facilitate a Forex transaction. For example: the currency pair, rate, time and date, and the quantity. Deutschmark: The former currency of Germany, replaced by the Euro when Germany joined the European Union. Devaluation: When a government allows the value of its currency to weaken in relation to other currencies. Direct Quotation: Quoting in variable units of domestic currency per fixed units of foreign currency. Dirty Float: Exchange rate policy where the value of a currency is allowed to fluctuate, but the central bank will intervene from time to time. Discount Spread: Refers to the situation where the bid price of a forward spread rate is less than the ask price. Discretionary Account: An account where a customer allows the institution to make trading decisions and buy and sell on his or her behalf. Diversified Carry Basket: A portfolio of carry trade positions that is distributed among different carry currencies and funding currencies in order to limit losses in one particular carry trade position. Dollar Rate: The amount of foreign currency quoted against one US Dollar. Some currencies are quoted in the amount of US Dollars per foreign currency unit, like the British Pound. Domestic Rates: The interest rates that apply to deposits or borrowing of a particular foreign currency. These rates are similar to those offered within the foreign country to citizens who keep money in deposit accounts. Done: The term used by traders to signal that a contract has been agreed upon. Drawdown: The size of a drop in the value of an account from its peak to its low. Durable Goods Order: An economic indicator that marks the change in sales levels of products that have a lifespan of three years or more. Easing: Refers to either a small price decline in a currency or when a central bank engages in monetary policy to spur spending. An example of central bank easing would be lowering of interest rates. ECB: See European Central Bank. ECB Conferences: The top functionaries of the European Central Bank (ECB) hold regular press conferences in which they outline Central Bank decisions and concerns. See also: ECB ECN Broker: Forex ECNs broker provide access to an electronic trading network, supplied with streaming quotes from the top tier banks in the world. By trading through an ECN broker, a currency trader generally benefits from greater price transparency, faster processing, increased liquidity and more availability in the marketplace. Economic Indicator: A statistic that is used to gauge current economic conditions. See Consumer Price Index and Durable Goods Order as examples. ECU: See European Currency Unit. Effective Exchange Rate: Explanation of a country's currency strength or weakness entirely on its trade balance. EFT: Electronic Funds Transfer.
285
Either Way Market: A condition in the Euro interbank deposit market where both bid and offer rates for a particular period are the same. Electronic Communication Network: An electronic communication network (ECN) is the term used in financial circles for a type of computer system that facilitates trading of financial products outside of stock exchanges. The primary products that are traded on ECNs are stocks and currencies. FX ECNs broker provide access to an electronic trading network, supplied with streaming quotes from the top tier banks in the world. By trading through an ECN broker, a currency trader generally benefits from greater price transparency, faster processing, increased liquidity and more availability in the marketplace. Elliot Wave Principle: An attempt to explain market activity by ascribing a pattern of eight waves to any complete cycle. The eight wave patterns consist of a five-stage advance and a three-stage correction. EMS: See European Monetary System. End of Day Mark to Market: The value of all open positions in a dealer's book based on the closing market rates. In addition, any profits or losses are recorded. Entity Trading Account: A trading account that does not belong to an individual, but rather to a company that has designated a person to be responsible for its trading decisions. Equities: Ownership interest in a corporation in the form of common stock or preferred stock. Equity: Total assets minus total liabilities; also called net worth. See also: Asset Equity Curve: The value of a trading account graphed over a period of time. Escrow Account: A segregated account where customer money is kept separate from a dealer's operating funds. Euribor: Euribor (Euro Interbank Offered Rate) is the rate at which euro interbank term deposits within the euro zone are offered by one prime bank to another prime bank. See also: LIBOR Euro: See also: European Monetary Unit. Euro Interbank Offered Rate: The Euro Interbank Offered Rate or Euribor is a daily reference rate based on the averaged interest rates at which banks offer to lend unsecured funds to other banks in the euro wholesale money market or interbank market. Eurocurrency: A currency that is deposited in a financial institution located outside the currency's country of origin. Eurodollar: US dollars deposited in a bank outside the USA. European Central Bank: Established in Frankfurt in 1998, the ECB is responsible for all monetary policy decisions that influence the Euro currency. Based on the Maastricht Treaty, the ECB's main responsibility is to ensure price stability. To this end, it is authorized to issue the Euro and is responsible for setting interest rates for those countries that have converted to the Euro. European Currency Unit: The predecessor of the Euro. European Monetary System: An arrangement in the 1970s and 1980s where many European countries linked their currencies to prevent large fluctuations in value. It was one of several initiatives leading to the deployment of the Euro. European Monetary Unit: The currency of the European Monetary Union (EMU), introduced in 1999. The following countries and their currencies were replaced with the Euro European Option: An option whose holder can exercise it only at the expiry date.
286
European Union: The group of European countries joined together to promote economic, political, and social co-operation. Excess Margin Deposits: Deposited funds in a trading account above and beyond what is required for margin requirements. Exchange: The physical location of trading activity. Some famous examples include the New York Stock Exchange or the Chicago Mercantile Exchange. Exchange Control: Various devices a central bank uses for controlling the movement of foreign exchange so as to not deplete a country's reserves. Exchange rate : In finance, the exchange rate (also known as the foreign-exchange rate, Forex rate or FX rate) between two currencies specifies how much one currency is worth in terms of the other. For example an exchange rate of 102 Japanese yen (JPY, ) to the United States dollar (USD, $) means that JPY 102 is worth the same as USD 1. Execution: Completing a trade. Exercise Price: See Strike Price. Exit: In the case of a long position, the sale of the long currency. In a short position; the purchase of the short currency, resulting in a closed position. Exotic: As opposed to the major currencies which are heavily traded, exotics are the less traded currencies. Exotics: The lesser traded currencies, as opposed to the major currencies which are heavily traded. Expiration Date: The day on which a financial option is no longer valid. Exposure: The net of all long and short positions for a particular currency. Based on the traders' positions for all currencies, his/her exposures can result in either loss or gain. Factory Orders: An economic indicator that marks the change from one period to another of the orders for durable and nondurable goods. More orders mean economic growth whereas the opposite signifies a slowdown. Fast Market: Strong buying and/or selling pressure in the market, in which prices often gap and move too quickly to be disseminated. Fed Fund Rate: The interest rate on Fed fund account balances that is closely monitored to gauge the Fed's view on the economy. The accounts are held by member banks and are usually used for lending or borrowing from one another. Fed Funds: Account balances held by banks at their local Fed Bank. Fed Meetings: The Federal Reserve System (the Fed) is the US central bank responsible for conducting US monetary policy by influencing money and credit conditions in the economy. The Federal Reserve Board of Governors and the Federal Open Market Committee (FOMC) hold regularly scheduled and special meetings that are followed closely by market watchers. Federal Deposit Insurance Corporation: FDIC The US regulatory agency that administers bank deposit insurance. Federal Open Market Committee: FOMC Committee made up of Federal Reserve members who meet eight times a year to discuss current monetary policy and its effect on the present economy, and to address any possible changes needed. Federal Reserve: The Central Bank of the United States.
287
Federal Reserve Board: The senior members of the Federal Reserve, each of whom is appointed by the US President. The chairman of the Fed Reserve Board serves a 4-year term, while the other members serve 14-year terms. Fiat Currency: Fiat currency is the opposite of a gold standard arrangement. In a fiat currency system, the currency value rises and falls on the market in response to demand and supply pressures. It is this fluctuation that makes it possible to speculate on future currency values. Fill: Completing an order to buy or sell. Fill or Kill: An order that must be executed immediately based on certain criteria such as price and quantity. If it cannot be executed, the order is immediately canceled. Fill Price: The price at which a buy or sell order goes through. Financial Risk: The possibility that a business won't be able to meet its financial obligations. Finex: Currency trading at the New York Cotton Exchange. Firm Quote: When a buyer or seller requests a firm quote, the dealer provides a bid and ask quote that can be immediately executed if the buyer or seller wishes. See also: Indicative Quote Fiscal Policy: Using tax policy to affect economic conditions. Fisher Effect: The effect of interest rates on international money movement such that money moves into currencies paying higher interest rates. Fixed Exchange Rate: Foreign exchange policy where a central bank maintains an official rate for their currency, often intervening to keep the rate fixed within a limited range. Fixing: Determining rates by selecting a level which, as well as possible, balances buying and selling pressure. An example is London Gold Fixing. Flat: Term describing a trading book with no market exposure. See also: Square Flexible Exchange Rate: An exchange rate that is fixed, but is re-evaluated frequently. Floating Exchange Rate: An exchange rate whose value is determined by market forces. Force Majeure: French for greater force. Represents a clause in a contract that relieves either party from fulfilling the obligations of the agreement should an extraordinary event prevent the completion of the contract. Typical examples include war, labor strikes, riots, and natural disasters. Commonlyincluded in futures and options contracts especially when dealing with commodities such as oil and agricultural products. Foreign Exchange: Buying or selling one currency against another currency. Foreign Exchange Centers: The largest Forex center in the world is London. Other financial centers which follow the sun across the sky are New York, Tokyo, Hong Kong, Singapore, and Zurich. Trading passes from one center to the next, the traders in one bank's dealing desk handing off the trading book to their colleagues in another center. Forex: Acronym for Foreign Exchange. Forex Charting Software: An analytical, computer-based tool used to help currency traders with Forex trading analysis by charting the price of various currency pairs along with various indicators. Forex charting software packages are used by many traders to determine the direction on any given currency pair. Most Forex brokers allow traders to open a demo account prior to funding a full account or mini account. This allows users to try out each broker's charting software during a trial period. Forex Club: Groups formed in the major financial centers to encourage educational and social contacts between foreign exchange dealers, under the umbrella of Association Cambiste International.
288
Forex Demo Account: Free Forex Practice Account, trading software and charts. Forex demo accounts allow you to practice Forex trading without risking a monetary loss. Once you've sharpened your skills, you can begin to make big bucks by moving on to Forex live accounts. Forward: A transaction that settles at a future date. Forward Contracts: A transaction that settles at a future date. The buyer and seller are bound by the contract to settle on the specified date. Forward Point: Differential added to or subtracted from the spot rate to calculate the forward rate. The differential is based on anticipating future conditions and fluctuates accordingly. Forward Rates: An exchange rate that differs from the spot exchange rate by forward points. The forward points are either added to or subtracted from the spot rate depending on anticipation of future conditions. Free Reserves: The margin by which excess reserves exceed borrowings. Fundamental Analysis: The study of economic factors (GDP, Trade Balance, Employment, and so on) that can influence prices in financial markets. Fundamental Trader: An investor who uses fundamental analysis. Fundamentals: Economic factors (GDP, Trade Balance, Employment, and so on) that can influence prices in financial markets. Funding Currencies: Low interest rate currencies. Futures: An obligation to exchange a good or instrument at a set price on a future date. The primary difference between a Future and a Forward is that Futures are typically traded over an exchange while forwards are traded over the counter (OTC). G7: The seven leading industrialized countries. G8: G7 and Russia. Gearing: A term related to margin trading where you are controlling a position whose face value is greater than the money you deposit. Globex : An afterhours electronic futures and options trading platform developed by Reuters. Going Long: The purchase of a currency pair. Going Short: Selling a currency pair by first borrowing it, then returning it at a later time by buying it back (hopefully once prices are lower). See also: Selling Short Gold Standard : A commitment made by certain countries to fix the prices of their domestic currencies in terms of a specified amount of gold. Also known as the Bretton Woods System, the Gold Standard was enacted in 1946 and created a system of fixed exchange rates that allowed governments to sell their gold to the United States treasury at a fixed price. On August 15, 1971 President Richard Nixon ended the Bretton Woods system. Golden Cross: In technical analysis, when two moving averages intersect, usually a short one like a 20 day and a long one such as 40 day. This is considered a favorable sign that the underlying currency will move in the same direction. Goldilocks Economy: Term which describes an economy that has steady growth and acceptable inflation. In this sense, the economy is not too hot and not too cold. Good Until Canceled: An order that does not expire at the end of the trading day as is usual practice. Unlike what its name suggests, it does expire at the end of the trading month though, as opposed to being open forever.
289
Good-Till-Cancelled order (GTC): A type of limit order that remains in effect until it is either executed (filled) or cancelled, as opposed to a day order, which expires if not executed by the end of the trading day. A GTC option order is an order which if not executed will be automatically cancelled at the options expiration. Grid Trading: A series of positions and open orders that are built with a predetermined spread defined by the trader. Gross Domestic Product (GDP): The total value of a country's output produced within its physical borders. Gross National Product: GDP plus production and income from nationals abroad. IFEMA: International Foreign Exchange Master Agreement Indicative Quote: A market maker's price. It is not deal able, but is for information purposes only. See also: Firm Quote Inflation: A rise in prices or a drop in the purchasing power of money. Initial Margin: The first deposit by a customer which determines a corresponding maximum trade size. Initial Margin Requirement: When entering a position, the minimum amount that must be paid in cash. Interbank Market: A market in which financial institutions can trade. The term refers to short term money or foreign exchange markets that are only accessible to banks or financial institutions. There is no physical market place; the transactions take place over communication networks such as Bloomberg or Reuters. Interday Trading: Positions that are opened and closed within the same trading day. Interdealer Market: Same as Interbank Market. Interest Rate: The rate charged or paid for the use of money. An interest rate is expressed as an annual percentage of the principal. Interest rates often change as a result of inflation and Central Bank policies. Interest Rate Swap: A swap that exchanges the revenue generated by the two legs of the agreement. One party pays an agreed-upon fixed interest rate for the notional amount in exchange for the interest that same amount earns for the duration of the agreement. International Monetary Fund (IMF): Supranational organization established in 1946 to provide international liquidity and loans to member countries. International Monetary Market(IM): The futures trading arm of the Chicago Mercantile Exchange. International Organization for Standardization: The organization responsible for developing the standardized Forex trading codes used by traders, such as EUR for Euros or CAD for the Canadian Dollar. Intervention: See Central Bank Intervention. Intra Day Position: Positions that are opened and closed within the same trade day. Introducing Broker: A person or firm that introduces customers to a market maker often in return for commission or a portion of the spread. A person or firm that introduces customers to a market maker often in return for commission or a portion of the spread. ISO: See International Organization for Standardization. ISO 4217: ISO 4217 is the international standard describing three-letter codes (also known as the currency code) to define the names of currencies established by the International Organization for Standardization (ISO Japanese Housewives: A term coined by the financial press to refer to the Japanese households that speculated on the carry trade and became a major seller of yen, thereby driving the currency against the levels forecast by financial institutions.
290
Japanese yen: The yen is the Japanese currency unit. It is the third most-traded currency in the foreign exchange market after United States dollar and the Euro. See also: JPY Jobber: A trader who trades for small, short-term profits during the course of a trading session, rarely carrying a position overnight. JPY: Japan's currency code becomes JPY JP for Japan and Y for yen. Jurisdiction Risk: The risk that funds will be lost when placed under the jurisdiction of a foreign authority. K: A Nasdaq stock symbol specifying that the stock has no voting rights. Key Currency: For smaller countries, the act of orienting their currency to that of a major trading partner. Kill or Fill: An order that does not permit partial filling. If it cannot be completely filled, then the order is to be canceled (i.e. "killed"). Kiwi: Traders term for the New Zealand Dollar. See also: NZD Ladder Option: An option that locks in gains as the underlying asset reaches predetermined price levels, In this way, these levels are like rungs of a ladder. The gains are locked in even if the asset price should subsequently drop. Lagging Indicator: Economic indicators that change after the overall economy has changed used to confirm effects of Fed policy. An example is the Consumer Price Index (CPI). Leading Indicators: Economic indicators used to predict future economic activity, such as the levels of the S&P 500 index. Left-Hand Side: Refers to the bid quote, which is the price at which customers who are long a currency pair sell it. Leverage: The ratio of margin to the maximum position size. With a deposit of $5000 and a leverage of 50, a trader could enter a position with a face value of $250,000. Leveraging allows you to profit quickly, but lose money just as fast. Liability: The obligation to deliver currency as part of a spot transaction. In speculative Forex trading, currency is not delivered. All profits and losses are subtracted from margin deposits. LIBOR: London Interbank Offered Rate - The rate that banks use when borrowing from one another. See also: London Interbank Offered Rate LIFFE: London International Financial Futures Exchange Limit Order: An order to transact at a specified price or better. See Buy Limit Order and Sell Limit Order. Limit Price: The specified price as part of a limit order. Line Chart: The simplest form of charting, a line chart plots a series of lines connecting the various price levels over a specified time period. Liquid: Term used to describe a market where there are lots of buyers and sellers generating a great deal of volume. Liquidation: This is what happens as a result of a margin call. All positions are closed to prevent further loss. At margin call, the value of the account is not sufficient to sustain the position size. Liquidity: Term used to describe a market where there are lots of buyers and sellers generating a great deal of volume. London Interbank Offered Rate: The London Interbank Offered Rate or LIBOR is a daily reference rate based on the interest rates at which banks borrow unsecured funds from other banks in the London wholesale money market (or interbank market). It is roughly comparable to the U.S. Federal funds rate.
291
Long Call: An option which gives its holder the right, but not the obligation, to buy the underlying asset. Long Position/Long: When a currency pair is long, the first currency is bought while the second currency is sold short. To go long on a currency means that you buy it. A long position is expressed in terms of the base currency. Long Put: An option which gives its holder the right, but not the obligation, to sell the underlying asset. Lookback Option: An option that lets the holder look back at the prices of the underlying asset during the life of the option and select the ideal price to exercise at. Lots: Standardized method of trading in Forex which requires a trade of 100,000 units of a particular currency. M1: Money supply component which consists of all cash in circulation, plus all of the money held in checking accounts, as well as all the money in travelers checks. M2: Money supply component which consists of M1 plus all of the money held in money market funds, savings accounts, and small Certificates of Deposits. M3: Money supply component which consists of M2 plus all of the large Certificates of Deposits. Maintenance: A set minimum margin that a customer must maintain in his margin account. Maintenance Margin: The minimum margin that must be available in an account to support all open trades. Make A Market: A dealer makes a market by providing a two-way quote a bid and ask price in which they stand ready to buy or sell. In this way, dealers are also known as market makers. Managed Float: Exchange rate policy where central banks regularly intervene to stabilize and/or steer the direction of their currency. Manual Trader: A trader that inputs his/her trades Manually without an API. Margin: The minimum deposit required to maintain an open position. For example, with an open position of $250,000 and a leverage of 50, the required margin would be $5000. Margin Account: An account that allows leverage buying and short selling on credit. Margin Call: A notification that more funds must be deposited into an account because the value of the account has fallen below the minimum margin needed to cover the size of existing positions. Mark-To-Market: For an open position, what its value would be if it were closed out at the current market rates. Market Close: In the 24-hour Forex market, the market never closes. For administrative purposes, many banks institute 5pm EST as the market close in order to differentiate between value dates, as well as mark delivery dates. Market Maker: A dealer who provides a two-way quote a bid and ask price in which they stand ready to buy or sell. In this way, dealers are also known as market makers. Market Order: An order for immediate execution at the best available price. Market Rate: The most current quote for a currency pair. Market Risk: The risks that occur when demand and supply pressures in the market cause the value of an investment to fluctuate. Martingale System: A betting strategy where the gambler doubles his/her bet after every loss, so that the first win recovers all previous losses plus wins a profit equal to the original stake. This strategy may be seen as a sure thing by those who practice it, but will eventually bankrupt people reckless enough to try it because winning may require infinite wealth due to the exponential growth of betting amounts. Maturity: The date on which payment of a financial obligation is due.
292
Maximum Leverage: The biggest position that a margin deposit would cover. At a leverage of 50, one could enter a maximum leveraged position of $100,000 by depositing $2,000 worth of margin. Mean Reversion: A theory suggesting that prices and returns eventually move back towards the mean or average. MetaTrader: MetaTrader 4 is an online trading platform designed for financial institutions dealing with Forex, CFD, and Futures markets. MetaTrader 4 Mobile: MetaTrader 4 Mobile program is comparable with full-function trading terminal. You have a possibility of full access to financial markets and making deals from anywhere of the world. Middle Rate: The price halfway between the bid and ask quote offered by dealers. Mini Account: A special type of trading account where traders can trade partial lot sizes. Mobile Trading: Controlling of trading account via mobile devices such a cellular phone or a PDA (Personal Digital Assistant). Wireless access technologies WAP and GPRS provide access to the Internet. Module: A portion of a program that carries out a specific function and may be used alone or in combination with other modules of the same program. Momentum: The tendency of the market to continue moving in the same direction in which it is currently moving. Monetarists: People who believe that money and monetary policy have a strong effect on capacity and growth in the economy. Monetarists focus on the work of Milton Friedman. Monetary Base: Required and non-required deposits made at the central bank by member banks and the currency in circulation. Monetary Easing: When a central bank encourages spending by easing monetary controls. An example would be lowering interest rates. Monetary Policy: Central bank attempts to influence the economy through money supply levels. Monetary Policy Committee: The Monetary Policy Committee (MPC) is a committee of the Bank of England that meets every month to decide the official interest rate in the United Kingdom. Money Manager: A person who is responsible for the entire financial portfolio of an individual or other entity. A money manager receives payment in exchange for choosing and monitoring appropriate investments for the client. Most Favored Nation: Preferential treatment in trade between World Trade Organization (WTO) members. Moving Average: Method of smoothing out data on price charts so that trends are easier to spot. Average refers to a mathematical average or a statistical mean that is plotted over the original curve. MXN: The currency symbol for the Mexican peso. Naked Put: A put sold by someone who is not short the underlying asset. Narrow Market: Also known as a thin market, where there is light trading. Net Asset Value (NAV): The total value of an asset less liabilities. In the case of a trading account, the NAV is the balance of deposits, realized and unrealized profit/loss, and interest, minus withdrawals. Negative Carry Pairs: A carry trade where you are long the lower interest currency and short the higher interest currency. This type of trade might be part of a hedging strategy. Negative Sloping Yield Curve: A yield curve is a graph that plots the various yields (usually government bonds) beginning with short term rates on the left side of the graph and extending towards long term rates to the right. Negative sloping refers to the fact that on such a curve short term rates are actually
293
higher than long term rates. This is contrary to normal yield curves as dictated by the time value of money. Net Interest Rate Differential: The difference in the interest rates associated with two currencies. Net Position: Currency positions that have not been offset with opposite positions. Netting: Settlement method where only the difference (profit or loss) is settled at the close. New Zealand dollar: The New Zealand dollar is the currency of New Zealand. It also circulates in the Cook Islands, Niue, Tokelau, and the Pitcairn Islands. It is divided into 100 cents. See also: NZD News Trader: An investor who bases his/her decisions on the outcome of a news announcement and its impact on the market. NFP (Non-Farm Payroll): Reported monthly, this figure represents the total number of paid U.S. workers of any business, excluding farm employees, general government employees, private household employees, and employees of nonprofit organizations that provide assistance to individuals. The NFP report also includes estimates of the average work week and average weekly earnings of all non-farm employees. Noise: The term used to describe market activity that does not always match overall market sentiment, resulting in a series of variables that, in reality, do not match their modeled counterparts. In general, the shorter the time frame, the more difficult it is to separate the meaningful market movements from the noise. NOK: Currency symbol for the Norwegian Krone. Non-Client Order: An order on an exchange that is made by a participant firm or on behalf of a partner, officer, director, or employee of the participant firm. Where a participant firm is a firm that is entitled to trade on the exchange, also known as a member firm. While these orders are allowed, priority must be given to client orders for the same securities. NYCE: New York Cotton Exchange. NZD: NZD is the currency symbol for the New Zealand Dollar. See also: Kiwi OCO: See also: One Cancels the Other Order Odd Lot: A non-standard transaction size. In Forex, a standard lot is usually 100,000 units of a particular currency. Off-Shore: A business entity that may or may not be physically located in a country, but whose operations and regulation fall outside the country, primarily because it is incorporated elsewhere. Offer: Also known as the Ask Price, it is the price at which a seller is willing to sell. Old Lady: Term for the central bank of England. Omnibus Account: An account that one futures commission merchant carries for another in which the transactions of multiple individual account holders are combined. The identities of the individual account holders are not revealed to the holding merchant. One Cancels the Other Order: Two orders that are submitted simultaneously. If either one is executed, the other one is automatically canceled. Open Order: Buy or sell order that does not expire until canceled. In theory the order does not expire. However, it usually does so at the end of the trading month rather than lasting forever. Open Position: A position whether long or short that is subject to market fluctuations and thus profits or losses. See also: Closed Position Options: The right, but not the obligation, to buy (long call) or sell (long put) an underlying asset. Order: Instructions to buy or sell.
294
Oscillators: Technical analysis tools that provide buy and sell signals, characterized by a signal that oscillates between overbought and oversold levels. Out of the Money: When the strike price of the option is more expensive than the underlying asset's current price. Over the Counter: Refers to trading that is not done over a formal exchange. Traditional Forex is traded over the counter, meaning traders entered into Forex transactions with one another over telephones or electronic devices. Counter refers to counterparty, in that with Forex one trades with counterparty instead of through an exchange. In online Forex trading, the counterparty is the market maker. Overbought: A currency pair is overbought when its price rises much more quickly than usual in response to net buying. Once overbought, the pair is then expected to make a contrarian move, meaning its price is expected to fall. Overheated Economy: An economy with high inflation and high interest rates. Overnight: Trades that extend past the current trade day into the next. Overnight Limit: The maximum amount of a net long or short position that a dealer can carry over into the next dealing day. Overnight Position: A dealer's net position that is carried into the next trading day. Oversold: A currency pair is oversold when its price falls much more quickly than usual, declining too far in response to net selling. Once oversold, the pair is then expected to make a contrarian move, meaning its price is expected to rise. Owner: The account holder, the name under which a Forex account is held. Par: The official value of a currency. Par Spread: The term used to describe the situation where the bid and ask prices for a forward spread rate are identical. Parity: See Purchasing Power Parity. Partial Lot: Some brokerages allow trading in partial lots, which are fractions of 100,000 units that normally make up a full lot. Pegged: A system where a currency's value is tied with that of another currency. For example: the Chinese Yuan with the US dollar. Most pegs are allowed to deviate within a small band. Petrodollars: Refers to the Forex reserves as a result of oil sold by oil producing nations. Pip: The smallest upward or downward price movements quoted in Forex. In EUR/USD, a movement of 0.0001 is one pip (for example, from 140.005 to 140.004 euro). In USD/JPY, a movement of 0.01 is one pip (for example, from 116.32 to 116.31 yen). Point & Figure Charts: Technical analysis graphs that focus solely on price without any consideration of time. Political Risk: Changes in government policy or to a wider extent, government instability that might have negative effects on the currency. Position: A trade that is still in effect. See Open Position and Closed Position. Premium: See Carry. Premium Spread: Refers to the situation where the bid price of a forward spread rate is greater than the ask price. Price: The cost of purchasing a second currency in terms of a first currency. Price Transparency: The ability of all market participants to trade at the same price. Principal Value: The original amount invested.
295
Principals: Refers to the major currencies that are traded. Producer Price Index: An economic indicator that gauges the month-to-month price change that producers receive for their output. Profit Taking: Closing a position in order to realize a gain. Purchasing Power Parity: Refers to functional equivalency. It is the relationship between the amount of currency needed to buy a common good in one country and the amount needed to buy the same good in the second country. This is one way to establish an exchange rate between two currencies. Put Writer: The writer of a put option is another name for the seller of a put. Quantitative Analysis: A technique used to analyze an observed behavior by employing complex mathematical and statistical modeling, measurement, and research. Quantitative Easing: Quantitative easing is a monetary tool used by central banks to encourage spending within an economy. One of the most well-known instances of quantitative easing remains the Bank of Japan's attempts to fight domestic deflation in the early 2000s. Interest rates during this time were already close to zero and further cuts could not be implemented so the Bank flooded commercial banks with excess funds to promote lending and by extension, encourage spending. Quote: When both a bid and ask price are provided for a currency pair. Quote Currency: The second currency of two in a currency pair. For the EUR/USD, USD is the quote currency. The exchange rate quoted is how many units of the second currency you will receive for one unit of the base currency. Rainbow Option: An option that has two or more underlying assets. The option only pays out when all the underlying assets act accordingly. Rally: A period where prices surge upward. Range: The difference between the highest and lowest price of a currency pair during a given trading period. Rate: Price at which a currency can be purchased or sold against another currency. Rate Differentials: The difference between the interest rates of two countries. The country with the higher interest rate will attract investment that will be financed in the lower rate country. Rate of Return: The percentage of money gained or lost on an investment relative to the amount of money invested. Ratio Spread: Holding an unequal amount of long and short options positions. Two short and one long is a popular ratio spread strategy. Reaction: When prices fall after a period of advance. Realized P/L: The profit and loss that is generated by closing a position. Reciprocal Currency: A currency pair involving the US Dollar in which the US Dollar is not the first currency quoted. An example is the euro which is the base currency when paired with the US dollar. EUR/USD is the way of quoting these two currencies. Regulated Market: A market in which a government agency monitors and regulates industry activity to protect investors. An example is Forex trading in the United States. Resistance: The term resistance is a technical analysis term that refers to lines on your trading chart that cap a rise in the current price. A resistance line can be just a horizontal line, or it can be sloping with a trend. Resistance only refers to a line that caps the current price. Once the current price definitively breaks through the resistance line, the resistance line becomes a support line.
296
Retail FX Market: Comprises a wide range of non-institutional traders, from large organizations to individual investors. In less than 10 years, a relatively small number of online currency brokers and market makers have had a massive effect on this market by efficiently exploiting technology, driving a five-fold decrease in the cost of trading. Retail Side: The sale of services, goods, or commodities in small quantities directly to consumers. Revaluation: Daily calculation of potential profits or losses on open positions based on the difference between the settlement price of the previous trading day and the current trading day. Revaluation Rate: A rate, possibly historical (as in the closing rate for the previous trading day), which is used to revalue a dealer's position or book. Right Hand Side: Refers to the ask, or offer price. This is the price at which traders buy. Risk (Foreign Exchange Risk): The risk that the exchange rate on a foreign currency will move against the position held by an investor such that the value of the investment is reduced. Risk Capital: The amount of money one could risk without impinging on one's accustomed lifestyle. Risk Management: The use of strategies to control or reduce financial risk. An example is a stop-loss order that minimizes maximum loss. Roll-Over: Extending the settlement value date on an open position to the next trade date. Rollover Credit: Amount credited to a trader's account when the long currency of a currency pair has a higher yielding interest rate than the shorted currency. Rollover Debit : Amount debited from a trader's account because of an overnight rollover, when the long currency of a currency pair has a lower yielding interest rate than the shorted currency. Rollover Rate: Generally, the daily rollover interest rate is the amount a trader either pays or earns, depending on the currency pairs in question. Round Lot: In most cases, 100,000 units of a currency. Round Trip: The buying and selling of a currency pair and having the profit or loss applied to one's account currency. Running a Position: See Open Position. Same Day Transaction: A position that is opened and closed on the same day. Sell Limit Order: An order to execute a transaction only at a specified price (the limit) or higher. Sell Stop: A limit order with a limit placed below the current market price. Once triggered, the limit order becomes a market order. Selling Rate: Same as the Ask or Offer rate. Selling Short: Selling a currency pair that involves being short the base currency and long the quote currency, with the intent of buying the currency pair at a later time when prices are lower in order to make a profit. Settlement: The physical delivery of currencies made when a contract matures. In Forex, it is usually two days after the trade. In practice, traders don't take delivery, but profits and losses are applied directly to their account balance. Settlement Date: In Forex, the date when physical delivery must take place. For most currency pairs it is two days after the trade date. However, the USD/CAD currency pair settles one day after its trade date. Settlement Risk: Loss as a result of one's counter-party being unable to settle.
297
Short: Selling a currency pair that involves being short the base currency and long the quote currency, with the intent of buying the currency pair at a later time when prices are lower in order to make a profit. Short Call: An option that obliges the seller to sell the underlying asset to the buyer. Short Covering: Buying the exact same units of a currency pair to offset an earlier short sale of the same currency pair. Short Position: In foreign exchange, when a currency pair is sold, the position is said to be short. It is understood that the primary currency in the pair is 'short', and the secondary currency is 'long'. Short Put: An option which obliges the seller to buy the underlying asset from the buyer. Short Sale: See Selling Short. Short Squeeze : When short sellers frantically scramble to cover their short positions as the market is experiencing a sharp upward movement. The attempt exacerbates the problem because more buying makes the prices higher and more difficult for other short sellers to cover their positions. Shout Option: An option that lets the holder lock in profits while continuing to participate in the movement of the underlying asset. Sidelined: When there is above ordinary interest in a currency pair, other major currency pairs that are thinly traded as a result of this are considered sidelined. Slippage: It's the experience of not getting filled at (or even very close to) your expected price when you place a market order or stop loss. This can happen because either: market price is simply moving too fast, the market is not liquid or you're talking to an unmotivated broker. Society for World-wide Interbank Telecommunications: Global electronic network for Forex settlement, whose office is based in Belgium. Known for the SWIFT Code, which is an 8 or 11 alphanumeric character international standard that uniquely identifies financial institutions for the purpose of transfers and settlement. The SWIFT code is also known as BIC (Bank Identifier Code). Soft Market: Where there are more sellers than buyers resulting in the potential for a quick downtrend. Sovereign Risk: Risk that a country will default on its bonds. Speculative: The condition where there is no guarantee that money will be made and tremendous risk that you will lose all your capital. The attraction to speculative trading is that you can make a great deal of money very quickly. However, you can also lose it just as fast. Spike: A larger than usual price movement. It can be caused by a financial institution entering an erroneous price that appears as a valid price, even though it gets corrected almost immediately. Spot: Buying and selling Forex with the current date's price for valuation, but where settlement usually takes place in two days. Trades on FXTrade are settled immediately. Spot Market: Market where people buy and sell actual financial instruments (currencies) for two-day delivery. Spot Price: The current market price of a currency traded in the spot market. See also: Spot Market Spot/Next Roll: See Roll-Over. Spread : The value difference between the bid and ask price of a currency pair. Square : A condition where all positions in a dealer's books are closed. Squeeze: Central bank attempts to reduce the money supply in order to increase the price of money. Stable Market : A market that can accommodate huge volumes of buying and selling without large moves. For example, the trading of the EUR/USD pair.
298
Sterilization: The process by which central banks offset intervention in the Forex market by activities in the domestic money market. Sterling: Another name for the British Pound (GBP). See also: Cable Stochastic Oscillator: The stochastic oscillator is a special type of oscillator used for technical analysis. Each type is derived from a different equation and focuses on different aspects of price action. Stock Broker: An agent in the buying and selling of stocks or other securities. Stocky: Traders' term for the Swedish Krona. Stop Loss Order: Order to buy or sell when a given price is reached or passed to liquidate part or all of an existing position. Stop Loss Strategy: A trading strategy that involves setting limit orders at different price levels to avoid incurring further losses. See also: Stop Loss Order Stop Losses: A limit order to close a position when a given limit is reached. When long, the stop loss order is placed below the current market price. When short, the stop loss order is placed above the current market price. Stop Order (or Stop): An order to buy or to sell a currency when the currency's price reaches or passes a specified level. Stop-buy: A buy order for a currency price that is above the current market, or current price. It becomes a market order when the specified price is reached. Stop-buys are used by traders to establish positions in markets which they perceive to be rising in value. Straddle: An option strategy involving holding both a call and put with the same strike price and same expiry date. Strangle: Similar to a straddle, the strangle is a cheaper strategy since the strike prices of both the call and the put are far out of the money. Strike Price: The price at which the underlying asset can be bought or sold as specified in an option contract. Sub-account: Some broker allows users to segregate their accounts into various subaccounts to simplify various trading and hedging strategies. Support Levels: A level or floor beneath which it is difficult for a currency to fall, characterized by strong buying pressure. Swap: A transaction that moves the maturity date of an open position to a future date. See also: RollOver SWIFT: See Society for Worldwide Interbank Telecommunications. Swissy: Trader's nickname for the Swiss Franc. T-Bills: See Treasury Bills. T-Bonds: See Treasury Bonds. T-Notes: See Treasury Notes. T/N: See Tomorrow Next. Take Profit Order: A customer's instructions to buy or sell a currency pair which, when executed, will result in the reduction in the size of the existing position and show a profit on said position. Take Profits: A limit order that is placed above the market with a long position or below the market with a short position. When the market reaches the limit price, the position is closed thereby locking in a profit.
299
Take the Offer : A verbal order where a trader agrees to the price with which to sell a currency pair to a dealer. Technical Analysis: An effort to forecast prices by analyzing market data, i.e. historical price trends and averages, volumes, open interest, etc. Technical Correction: A price adjustment based on technical factors like resistance and support levels, as well as overbought and oversold levels, instead of market sentiment. Technical Indicators: Short-term trends that technical analysts use to predict future price movements of securities and/or commodities. Also called technicals, technicalities. See also: Technical Analysts Technical Side: The use of historical rates, price charts, and other market data to forecast future prices by means of statistical analysis. Technical Trader: An investor who uses technical analysis. See also: Technical Analysis Technicalities: Short-term trends that technical analysts use to predict future price movements of securities and/or commodities. Also called technicals, technical indicators. TED Spread: Indicates the difference between the London Interbank Offered Rate (LIBOR) and shortterm government debt in the form of three-month U.S. T-bills and expressed in basis points. Seen as a measure of perceived risk in the currency markets. See TED Spread for more information. The City: Located within greater London, UK, The City is one of the largest concentrations of financial and business institutions in the world, and is the largest currency trading center. Thin Market: See Narrow Market. Tick: The smallest possible change in a price, either up or down. Also known as a pip. Ticker: Streaming display of the current or recent historical price of a currency pair. Tier One: The Bank of International Settlements' measure of a bank's financial strength. Tier One is the highest grade. Tomorrow Next: The process of not taking delivery of a currency by closing the position and reopening it with the current trade date so the settlement date is pushed forward to the next trade date (tomorrow). This is done indefinitely until the trade is closed. Trade Date: The date on which a position is opened. Tradeable Amount: The smallest transaction size allowed. For many brokers the tradeable amount is the round lot, which is usually 100,000 units of a particular currency. With FXTrade, it is 1 unit. Trading Margin Excess: Extra funds beyond the margin requirements for existing positions that can be used to enter new positions or increase existing positions. Trading Model: A sophisticated program that provides you with expert buy/sell recommendations for trading currencies on the foreign exchange markets. A Trading Model, based on its evaluation of historical analyses, forecasts, and your trading profile, makes recommendations about currency positions by anticipating fluctuations in the foreign exchange markets and capitalizing on these movements. Trading Platforms: A software application used for trading Forex, usually over the Internet. Trailing Stop Loss: Similar to a stop loss in that it limits potential losses in an open order. But unlike a simple stop loss where the threshold does not change, a trailing stop loss can be instructed to automatically adjust the limit price closer to the market price when the market price moves in your favor. Transaction: Buying or selling a currency pair.
300
Transaction Cost: The cost involved in buying or selling a currency pair. Some consider the transaction cost to be the actual value of the contract, while others feel it is the price of facilitating the trade, such as commissions and spreads. Transaction Date: The date on which a position is opened or closed. Treasury Bills: US government short-term obligations with 13-, 26-, and 52-week maturities. Treasury Bonds: US government long-term obligations with 15-year or more maturities. Treasury Notes: US government medium-term obligations with 2- to 10-year maturities. Trend: The current direction of the market, whether up or down or sideways (which is sometimes referred to as non-trending or trading market). Trend Lines: Lines, arcs, or other visual cues plotted on a line chart used to predict possible future market directions. Trend lines are often projected from historical points on the graph that are considered significant (retracements, highs, lows, and so on). Turnover: The total volume of all executed transactions in a given time period. Two-Tier Market: A dual exchange rate system in which only one of the rates is open to market pressure, as with the pre-1995 South African Rand. Unconvertible Currency: A currency that cannot be exchanged for another because of foreign exchange regulations. Uncovered: See Open Position. Undervalued: When a currency is below its purchasing power parity it is considered undervalued. Unit: A widely used quantity of currency. In FXTrade, one unit of USD is equal to one United States dollar, while one unit of EUR is one euro. For JPY, one unit is equivalent to one yen. One unit is the smallest trade size in FXTrade. Unrealized P/L: A hypothetical valuation of the current position and the resultant profit or loss if the position were to be liquidated at that moment. Uptick: A trade that must be executed at a price higher than the previous trade. Certain rules on the New York Stock Exchange require this during sessions of extreme volatility. US Dollar: The currency of the United States of America. US Prime Rate: The interest rate at which banks in the US will lend to their most valued customers. US Treasury: The department within the United States government that is responsible for issuing Treasury bills, notes, and bonds. Valuation: The process of determining the value of an asset or company. Value Date: The settlement date for a currency contract, usually two business days. For USD/CAD it is one business day. Variation Margin: Funds, which are required to bring the equity in an account back up to the initial margin level, calculated on a day-to-day basis. Volatility: Measure of how much the price of a currency changes over time. Vostro Account: An account of a foreign bank held at a domestic bank where the foreign bank has no branches. It is used for cash management purposes. Vostro means yours in Latin. See Nostro Account. Warrants: A certificate, usually issued along with a bond or preferred stock, entitling the holder to buy a specific number of securities at a specific price, which is usually above the current market price at the time of issuance, for a specific period of time. Wealth Creation Business: A professional service that includes a combination of investment advice, tax services, and estate planning.
301
Whipsaw: Refers to when a position is taken and a stop loss is created. The market moves down to trigger the stop loss and then turns around. In this way, the trader suffers two losses Go to Whisper Number: Analyst predictions about earnings or economic indicators. They're considered whispers because they are not made public, but inevitably become public through leaks. Some people call them rumors and attribute as much credibility to them as they do rumors. Wholesale: The sale of services, goods, or commodities in large quantities to individual clients. Wire Transfer: Electronic transfer of funds from one bank to another. Withholding Tax: Income tax withheld from employees' wages and paid directly to the government by the employer. Working Day: When the banks in the country of origin for a particular currency are open for business. For currency pairs, this is compounded by the fact that both banks must be open. World Trade Organization: WTO A global organization of countries that trade with one another and set rules by which trading is conducted. X: A Nasdaq stock symbol specifying that it is a mutual fund. Yard: Traders' term for a billion as in a billion dollars. Yield: The return on an investment. The yield is usually calculated in percentage terms. Yield Curve: A curve that shows the relationship between yields and maturity dates for a set of similar bonds, usually Treasuries, at a given point in time. Z-Score: A statistical measure that quantifies the distance (measured in standard deviations) a data point is from the mean of a data set. In a more financial sense, Z-score is the output from a creditstrength test that gauges the likelihood of bankruptcy. ZAR: Currency symbol for the South African Rand. Zero-Bound: A policy where interest rates are at or very near to zero percent. The major implication of a zero-bound economy is that Central Banks cannot use further interest rate cuts to stimulate an economy in this situation, Central Banks typically turn to an alternate monetary tool known as quantitative easing.
302
303
304