Why We Shouldn’t Build Our Businesses Around an Ad-Only Model
(Episode 1 of 2 with Roger Dooley)
Roger Dooley is an author and international keynote speaker. He wrote Friction: The Untapped Force That Can Be Your Most Powerful Advantage, which was named one of the Best Business Books of 2019 by strategy+business. He also wrote Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing.
Roger writes the popular blog Neuromarketing as well as a column at Forbes.com. He co-founded College Confidential, the leading college-bound website. He’s been a serial entrepreneur since he left a senior strategy position at a Fortune 1000 company to enter the then-nascent home computer market.
In today’s episode, we’ll discuss Roger’s business College Confidential and how he was able to monetize it. We’ll also discuss Roger’s career, including how he learned about reducing friction.
College Confidential
The biggest home run of Roger’s career has been creating College Confidential. It began as a hobby project with some co-founders to try to help parents and students through the often difficult and confusing college admissions process in the United States. They wanted to create a resource for those who didn’t have a lot of experience with college admissions, such as those whose parents hadn’t gone to college or first generation citizens.
“There is such a lack of knowledge or lack of real information that I got together with a couple of college experts and started this business, mainly to put content out there that will be helpful,” Roger said. Along with it, he created a forum community where people could ask and answer questions about the college admissions process. The forum generated tens of millions of pageviews per month and created massive amounts of useful content.
Roger loved getting messages from students about how they got into their dream schools or how they found a better school because of College Confidential. Roger said, “Those are the types of things that I think every entrepreneur hopes to achieve, not [only] are you making a few bucks along the way, but [if] you can change people’s lives in a positive way, change society a little bit in a positive way, that’s really the reward.”
How Roger Monetized College Confidential After an Ad-Only Model
Roger and his co-founders had a challenge in monetizing College Confidential. They built their website and were able to receive huge amounts of traffic, but they had an ad-only model. Roger discovered that with this kind of model it’s hard to make enough money to support an organization. They also thought colleges would want to advertise on their site because they were the ideal place for it, but that didn’t happen. We shouldn’t build our businesses only around ads because it is hard to monetize effectively.
However, they were eventually able to combine with part of the Daily Mail group, who had an education based arm in the U.S. that was in the process of helping colleges market to students. They had a direct sales force of about 20 people who called colleges and universities, and they had a long trusted relationship for that market.
This part of the Daily Mail group was struggling before working with College Confidential because for years their business model was selling paper directories that colleges would advertise in. These directories would be placed in college counselors offices and other places where students would research schools, but because of the internet, less people were using this paper method. The Daily Mail group needed to shift to an internet centered model, and College Confidential helped them do that.
With the Daily Mail group’s sales force and College Confidential’s understanding of SEO and community building, they were able to quadruple their monetization in just 12 months. Because they were able to find another organization that had a diversified stream of monetization, they were able to sell the leads to colleges to help colleges market themselves. They could make money directly by cutting out the middleman, ad marketplaces, and sell leads directly to the universities.
They eventually sold their business to the Daily Mail group. When we sell our businesses, we should look for somebody who is able to monetize our business at a much higher level than we are able to. They should have relationships or products or something else that will help them monetize better than us. Chances are, we’ll then get a higher sale value because of the value that the business has to them.
Some Benefits of Reducing Friction
Roger is passionate about making things easier and simpler for customers and employees. People understand effort and often think they take as much effort as possible out of their processes, but Roger sees so much room for improvement left by many companies and businesses.
On the employee side, having difficult processes can cause employees to be unsatisfied, disconnected, and less engaged. “When you make things easier for your people, they will appreciate the company more, [and] they will be more loyal to the company,” Roger said.
How Roger Learned About Removing Friction
Roger started off as an engineer, but after a few years he steered into product management with a marketing emphasis. When he was 30, he was in charge of strategic planning for a Fortune 1000 company, but he decided to leave the company and become an entrepreneur.
With a partner, Roger leveraged the emerging computer market by starting a direct marketing business to sell aftermarket products to those who purchased a computer. Over the years, he transitioned to digital business services. He started College Confidential, which led him to an interest in neuromarketing, the intersection of neuroscience and marketing.
Roger wrote his first book, Brainfluence, which teaches how businesses can use neuromarketing in simple ways. His second book, Friction, was based on the insight that making things easier was the best thing marketers could do to change customer behavior, to get them to buy more and be more loyal. As he did research on removing friction, Roger also realized the importance of removing friction for employees.
“If you make something easy, people will do more of it,” Roger said. For many people today, as soon as something gets hard, as soon as it feels like it’s too difficult, they quit; they don’t push through it.
“People are accustomed to an effortless experience. I saw one statistic that millennials are particularly susceptible to this. . . . A very large percentage of them had reported abandoning a signup process simply because it was too effortful,” Roger explained. “This is really what you’re dealing with. Amazon doesn’t make you work to place an order; you click a button. [That] is what people expect in just about everything today.”
Amazon, in many cases, isn’t even the cheapest company anymore, but it’s just so easy; we don’t have to put in a credit card every time, if we need to return something, it’s easy to, and we know we’ll get our packages on time. People have such a faith in the simplicity and effortlessness of the Amazon process because they’ve removed so much friction from it.
Roger has been a loyal Amazon customer for many years. A few years ago, Amazon hadn’t been collecting the state sales tax in his home state of Texas, but they made the change to start collecting it. Roger didn’t want to pay the 8% price increase on everything he bought from Amazon, so he decided he would try some other places to shop. However, he never did; it was simply too easy.
Key Takeaways
Thank you so much Roger for sharing your stories and insights with us today. Here are some of my key takeaways from this episode:
- One reward of entrepreneurship can be changing people’s lives and society in a positive way.
- We shouldn’t build our businesses only around ads because it is hard to monetize effectively.
- When we sell our businesses, we should look for somebody who is able to monetize our business at a much higher level than we are able to.
- Having difficult processes can cause employees to be unsatisfied, disconnected, and less engaged. However, when we make things easier for our people, they likely will appreciate the company more and be more loyal to the company.
- If we make something easy, people will likely do more of it.
Connect with Roger
To learn more about or connect with Roger:
- Connect on LinkedIn
- Visit his website at RogerDooley.com
- Check out his books Friction and Brainfluence
Next Steps
- Get a free ebook about passion marketing, and learn how to become a top priority of your ideal customers at PassionMarketing.com.
- Subscribe to Monetization Nation on YouTube, Instagram, Twitter, our Facebook Group, and on your favorite podcast platform.
