The Sock Puppet

Pets.Com –  Remember that booming company?

Pets.Com rolled out a advertising campaign using a TV, print, radio. The 5 city advertising campaign expanded to 10 cities by Christmas, 1999. The company succeeded wildly as the sock puppet was very well received. Even the Pets.Com Website won several advertising awards. In January 2000, the company aired its first national commercial as a Super Bowl ad which cost the company $1.2 million and had the highest recall of any ad that ran during the Super Bowl.

Their Ad Agency did their job right?  Excellent Campaign? The Advertising Agency of Record (our research pointed to TBWA/Chiat/Day should be happy with their success right?

Did the Ad Agency even consider the level of spending and advise them that they simply cannot sell enough dog food to make up for the cost of a 1.2 million dollar superbowl ad?

I feel the failure of Pets.Com was due to multiple levels, The Business model is actually sound,  there are several firms out there of decent size that are earning money online.  But the business plan,  that was the disaster.

First it was VC back, (hence why many of the more modern Internet Firms shy away from it).  So the owners got a taste of big budgets well before they were able to actually support it. 

Second huge amounts of money were allocated to their Advertising Agency, and their Ad Agency didn’t advise them or if they did Pets.Com didn’t listen (We tend to believe that since the Ad Agency was getting paid, they didn’t mention a peep). So no one even did simple research to provide them with estimated ROI on the campaign on how many 50 lb dog food packages they had to ship to make money on such a huge ad campaign.

We are not saying the blame rests entirely on Advertising Agency, We are saying that the Ad Agency should of done a basic ROI study prior to allocating such huge resources towards a campaign. 

We at Yooter do a basic ROI study prior to taking on a client.  Basic meaning we can inform the client of what the general traffic level that MIGHT be expected (within some sort of margin of error)  and explain to the client that some keywords are just not going after because we don’t see how widgets sold at 1 dollar a pop for an estimated traffic level of 1000 visitors with 1% buying them could justify spending $30,000 dollars “Just because the client wants to see himself #1′.

We try to convince the client that the alternative keyword at 900 visitors at 1% buying them would only cost the client $200 dollars, and has the potential to produce a positive ROI.

It’s when the fixed cost of the campaign exceeds the revenue that could be generated at even the most rosy projections is when we tell the client ‘don’t do it.. please don’t do it’

If the client really wants the campaign, we will do it, after the client confirms via e-mail that they understand this is against our better judgement.   We do this not to be jerks, we do it because we feel that we want our clients to have a positive ROI with Yooter, and we want our clients to be viable.  Not just some example of a Web 2.0 company that crashed.

Tribble Agency is a digital marketing company that specializes in backlink services services to help increase authority with link building methods that have a direct impact on directing potential visitors.