The recording is freely available online here. In the call Dan highlights how companies can increase perceived value and get their customers to spend more by creating a decoy offer, which is discussed in the first chapter of his Predictibly Irrational book.

The decoy marketing offer introduces false choices to make another choice look more appealing. We have a hard time valuing offers, but are relatively good at valuing relative deals. The example Dan uses to discuss the decoy is the pricing of The Economist.

Lets say the pricing is

Given the above virtually nobody will order print, but adding the false choice of print only will make many people buy the both option, whereas if the print option were priced lower or the print option were not there more people would be inclined to opt for online only instead of the web +print combination.

Non-commodity based value is largely a game of perception. You can build perceived value by

Everything around us is a collage of overlapping value systems competing for attention and resources. What backs the value of the U.S. Dollar? Why has it fallen 20% in the last couple years? Housing prices went up for a long time, and then they stopped. Last year Indymac bank was a top 10 mortgage lender and now they are bankrupt.

Many investors shorted Fannie Mae and Freddie Mac. In response to deteriorating business conditions the U.S. federal government offered to allow the companies to borrow directly from the Federal Reserve and increase their borrowing limits. That help stabilize their stock prices a bit.

What really scared investors away from shorting the stocks further? A proposal from the White House to Congress would give the U.S. Treasury authority to buy the stocks to provide needed liquidity. Imagine betting on a company failing when your government says that they are interested in buying stock in the company if the company gets in a pinch. That is the sort of news that can send a stock price up 40% before the market opens.

Why would the government care about the stock prices if they have little to do with the functionality of the businesses? It all comes down to perception. A healthy stock price gives the perception that all is well and helps keep the housing market as fluid as possible, whereas low stock prices erode confidence and evoke a sense of fear, which adds a lot of risk to an already unstable housing market. Perception becomes reality.

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“We’re heading down a path where it no longer suits our business needs to work with ad networks,” said Eric Johnson, executive vp, multimedia sales, ESPN Customer Marketing and Sales.

Sources say that ESPN would like to rally support from other publishers behind this move and ultimately tamp down ad networks’ growth. Turner’s digital ad sales wing is rumored to be considering a similar move, though officials said no decisions are imminent.

The two logical options from there are

1. set a floor price on house content and show fewer ads to offer a better user experience

2. look at currently hot stories, key markets in the weeks and months ahead, and market positions where you are close to leading but do not yet dominate and advertise your own products and services

3. Advertise branded widgets that go on third party networks which help get your brand exposure on those as well. ESPN should have made an official NCAA bracket gadget rather than letting that traffic and branding and traffic go to Google

4. add interactive features to your own site which increase brand loyalty and reduce content creation costs…which end up making the ad networks a more viable offering for back-fill content

5. If the ad networks are too cheap buy out inventory on competing sites to further distance yourself from them as the market leader.

All of those strategies allow you to buy market-share in your vertical on the cheap. The more of your market you own the better you will be able to sell ads for. If ESPN was 60% of the sports market Nike would be required to buy ads with them, largely based on ESPN’s terms. Part of being remarkable is about creating featured content, but an equally important piece is making sure you are branded as the leading source.

There is no better place to market your content and ideas than your own site.

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