Thursday, July 27, 2006

Vonage and the Magic of Internet Marketing

Just a real short post about Internet marketing. Russell Shaw had a very interesting post yesterday about how Vonage is selecting banner ad locations based on key search phrases that would position their ads favorably.

Not much to add really, but Russell notes how the top 3 search terms used by Vonage are "Verizon + dsl", "AT&T", and "Sprint". The first 2 are expected, as these are by far the largest targets for new customers. So, people clicking on these terms are probably good candidates for phone service, and that's where Vonage wants to be. Makes sense. I'm sure this is all part of the game - and mandate - for them to lower their customer acquistion costs, so putting Internet economics to work is one way to do that.

One thing I will say is that if Vonage ever figures out how to do this, they'll probably be at the forefront of Internet marketing, and at the end of the day, that expertise may well be more valuable the their VoIP business!

Also wanted to amplify Russell's point about Sprint, and that's probably the most telling take-away of his posting. Well, Sprint really isn't in the residential VoIP market, but they do have lots of subscribers. I suppose, then, if Vonage starts feeding off their customers and signing them up for VoIP, Sprint-Nextel just might see them as a key driver of value and growth. Wouldn't that be a great way for Vonage to prime the pump to be an acquisition target for Sprint-Nextel? May not be such a bad idea.... thanks for the post, Russell - very interesting.

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1 comment:

ipcom said...

Posted by: Aswath

Is it possible that the Sprint here refers to "Embarq" rather than "Sprint-Nextel", Embarq being the local arm of the old Sprint?