Category: Uncategorized

We’re still here.

I received a warm email about my David Ogilvy Tribute Page which made me think I should update this blog more often. Congratulations if you found your way here, because Google increasingly penalizes us for broken links in long-ago posts. (Memo to fellow bloggers: use images or links to your own files when you refer to external material, because the reader will get a broken link alert if the external link goes away.)

Otis A. Maxwell Advertising (though not its proprietor) has been laid down, as Quakers say, and I am no longer actively seeking clients. I do some volunteer work for causes that are important to me and still do a fair amount of food writing. (I also maintain an active food blog, Burntmyfingers.com, in which I share experiences and recipes.) And very occasionally I do a commercial project which is just too appealing to pass up. (If that describes your project, please drop a line to otis@otismaxwell.com.)

I get a lot of requests for advice from people who are just beginning a career as a copywriter, or want to know what to look for in a copywriter, and I always direct them to our Copywriting 101 category which contains the essence of the copywriting class I used to teach for the Direct Marketing Association. This category also includes posts providing examples to learn from, many now with broken links per above.

You can get much of this content in Kindle format by ordering Copywriting that Gets Results from Amazon. It’s only $6.99, a true bargain in these inflationary times. The book was published in 2011 so it’s heavier on print and lighter on electronic media than the same book would be today, but the fundamental principle of effective copywriting is unchanged: It’s not creative unless it sells.

FTC vs Online Trading Academy

OTA Home Page 030220
Home page of Online Trading Academy website as of March 2, 2020. Click the image to explore the website and draw your own conclusions.

I stopped taking on new copywriting assignments not quite 2 years ago, but have continued to work with a small group of clients where the experience was personally satisfying and I felt I could make a measurable difference. In particular, I continued to work with Online Trading Academy, a financial education company with a broad curriculum designed to improve skills and confidence among investors who are making their own decisions.

Last Friday, February 28, this came to an end. The Federal Trade Commission brought an injunction against OTA alleging that the defendants (3 principal owners of OTA) “have made false or unsubstantiated representations that consumers who purchase Defendants’ programs will likely earn substantial income, any consumer can learn and use Defendants’ strategy to earn income without significant investable capital or free time, and Defendants’ instructors have amassed substantial wealth by trading in the financial markets.”

This didn’t sound like the company I had worked with for 10 years where my copy was constantly edited to avoid “promissory” claims. Nonetheless, the FTC wasn’t so much alleging as demanding. They sought a restraining order to keep OTA from distributing any monies that might be used as a settlement for the consumers who purchased education from OTA, and they got it from a U.S. District Court. All assets were frozen, meaning the company could not pay its contractors (like me) or meet its payroll. Last Friday, hundreds of employees were given their notice of termination.

Most of these were dedicated, hardworking people who handled the nuts and bolts of technology, customer service and such. They were a very diverse group, as you can see from this page of staff photos. (The website is still fully operational in case you want to click around and form your own opinions about whether this is some kind of bait-and-switch operation; OTA is not allowed to take it down or alter it per the terms of the restraining order.) There were meditators, musicians, adoptive parents, churchgoers. They were a family. And they’re now out of work with no advance notice and no paycheck.

A client contact who is on the creative side, not upper management, hypothesized that because the FTC like other agencies has been stripped to its bare bones in recent years, they do not have the bandwidth to investigate claims or negotiate with companies. They simply go for the jugular, with a preemptive strike. If it causes great personal and financial pain to people who may be exonerated when the case ultimately is heard in court, so be it.

This morning I sat in on an online education session moderated by one of the three principals, who had spent the weekend preparing a detailed financial statement down to the VIN numbers on his vehicles as a condition of the restraining order. If he was stressed, you wouldn’t know it nor would you have guessed this session was anything other than business as usual. Since all assets are frozen he was in effect donating his time as were the other subject matter experts and the technology enablers on the webcast. Nearly 1000 people were in attendance.

We discussed last week’s market turbulence in the uncertainty around the spread of the COVID-19 virus. The moderator drew a number of stock charts and indicated possible turning points as well as opportunities that had existed during the upheaval on Friday. Several students contributed on the chat about trades that they had taken or planned to take. At no point were promises about money made or was money per se even discussed. This was a technical discussion about predicting market direction. OTA offers the tools and the training, but it is up to the students to apply this knowledge and they may or may not find profits. If the FTC had sat in on this or any of the dozens of sessions each week they would have realized how off-base the claims of their investigators were.

I can’t imagine what it would be like to lose a number of friends and family members simultaneously in a plane crash or other unpredictable disaster. But I can guess what that sense of overwhelming loss must feel like. The OTA folks are very much alive but their lives have been thrown into chaos by the kind of top-down bureaucratic intervention we might expect in an autocratic country like China, but certainly not the United States.

I’m outraged and angry and wish I could come up with a good call of action in closing. But I feel completely helpless, which only makes me angrier.

Even if the case is ultimately found in OTA’s favor, the damage to peoples’ lives is already irreparable. The case number is SACV 20-287 JVS (KESx) and you can google it if you like, or simply try “OTA vs FTC”. Compare what you see in the court documents with what the student say in their testimonials—this page might be a good starting point—then contemplate the possibility that if this could happen to Online Trading Academy, it could happen to any company that promises to help people point their lives in a new direction.

We’re stepping back, not stepping away

Boy with American Flag
This photo is in the Creative Commons, meaning the photographer has approved its use without permission or payment. It originally appeared with an editorial, entitled “America’s struggles with cultural ignorance”, in the online publication of Biola, a Christian college.

As exactly nobody noticed but me, June was the first month since 2004 in which we did not publish a single post. Blowing that tradition feels great. I’m backing off on new freelance work and will continue to post here from time to time, but only if I have something worth saying. The collected wisdom of this site can be found mostly in the Copywriting 101 category or, if you want to pay very little extra for me to organize it for you, in my book Copywriting that Gets RESULTS! And if you are willing to read about food instead of marketing, Burnt My Fingers is alive and well with new posts at least 2x a week.

I started this blog because I was teaching a copywriting course for the Direct Marketing Association, and the innovative format (yes, blogs were new at one time) seemed a good way to keep in touch with students outside of class. In 2004 email and other electronic marketing was in the ascendancy, but we still used direct mail for many creative and marketing examples because there is such a rich history to draw from.

Today, the most effective marketing is found in ads that don’t seem like ads at all, in clickbait headlines and fake social media posts that target a specific group or concern. David Ogilvy and other giants of direct marketing would be very proud of, if not exactly chummy with, the Russians and others that excel at these new media. Just like Robert Collier or John Caples, they do the digging to understand what is important to their target audience, then present their product or service as a solution to the problem the audience is having.

As we learned from Roy Chitwood and other practitioners of effective selling (remember, a copywriter is a salesperson with a keyboard), every one of us is motivated in every decision by the desire for gain or fear of loss. Today the latter motivator seems to be on the rise. I hope we all live long enough that the tide will turn and we will be less interested in who is trying to take things away from us and how we can stop them, and more interested in being the best we can be and sharing any beneficial results that may accrue.

It’s America’s birthday, the 4th of July. Let’s celebrate by making a commitment to a more generous and optimistic society, and let’s each one of us take the high road in working to make that happen. Look your neighbor in the eye, even if they’re a stranger, and nod hello. Sharing and fellowship built our nation. It’s not too late to go back.

Apologies for the outage… we’re back

Sorry. This blog has been running for close to 15 years but this week we had our first real outage, caused by a database failure when moving from one server to another. The problem was eventually solved, obviously, and we apologize for any inconvenience.

There’s a moral, too: if you have been thinking about checking something in our archives, or re-reading a particular post, now might be a good time to do it.

“Do you want your receipt?”

Here is a new but pervasive conversation in my home area (upstate New York). You’ll be completing a credit card transaction at a retail counter and the checker says, “do you want your receipt?” Well, of course I don’t. In an era of readily available online statements there are easier ways to track my purchases. And it’s just one more piece of paper to stuff in my wallet or lose in the shopping bag and ultimately throw away.

And yet. If I DON’T accept the receipt that leaves me open for fraud (the transaction is altered after the fact) or an error, like not picking up a sale price, that I would notice if I had the record. So my policy has been to say no if I’ve been watching the items and their prices on the register screen, and it’s a place I trust, otherwise yes. And I take those receipts, as I always do, and match them against my next statement to be sure they are consistent.

I am curious where this new policy came from. Is it supposed to be eco-sensitive because it avoids wasting a scrap of paper? Is this happening where you live? Let me know.

John Burgess: a life well lived on the internet

I thought about making this anonymous, but I don’t think there’s anything that John Burgess and his family wouldn’t want to share. And maybe they’ll see this and contact me with additional details.

Recently, for reasons of my own, I googled “what does turtle taste like”. One of the top hits was an excellent answer from John Burgess on Quora:

The flavor of turtle runs across a spectrum of fishy-to-beefy, depending on the variety and the method of cooking. Sea turtles — most of which are now protected species — actually fall on the ‘beefy’ side, often being compared to veal in both flavor and texture, though with abundant and savory fat. Fresh water turtles tend toward the ‘fishy’ side, though also fattier than most fish.

Land turtles or tortoises, I find, are pretty much indistinguishable from other reptiles, whether snake or alligator. ‘Chickeny’ would be an apt description.

What a good and complete answer! And as often happens on Quora, I was drawn down a rabbit hole, this time by Burgess’ profile description: “A diplomat is one who is paid to dine for his country; I’ve done so globally.” Well!

When you get to his profile page you find that Burgess has written over 12,000 Quora answers on every topic imaginable, a lot of them on the Middle East (and specifically on the Kingdom of Saudi Arabia, or KSA) where he was stationed for many years. His answers are invariably terse yet complete, objective and informative. No wonder he is a “top writer” on Quora, a designation I have not seen previously.

I say “is” when referring to John Burgess because his words are as fresh and relevant as when he wrote them, but I noticed something: he wrote 13 answers on January 26, 2016 and two on January 27, then never wrote again. I also noticed the word “remembering” above his profile, something else I’ve never seen on Quora. I realize that John Burgess, the man, is dead.

I googled “John Burgess obituary Sarasota” knowing that was where he lived from some of the posts, and got confusing answers including an unrelated scoundrel who was arrested for DWI. Then I tried “John Burgess obituary Sarasota born 1947” because I’d been able to extrapolate that birth year from some of his posts. It pulled up this wonderful obituary which was posted by his high school.

John Burgess seems to have had quite a life. He saw the world as a foreign service officer and made the most of the opportunities his travels provided. In retirement he used his experience as a consultant for various media and film producers. He was thoroughly involved in Sarasota, where he was a fan of the local historic architecture and also sport fishing.

I don’t know when Burgess retired, so I don’t know how much he got to enjoy his post-foreign service years. He was just 69 when he passed, so I’m hoping he mustered out well before age 65. I also don’t know whether his death was anticipated or sudden. On January 26 he was writing pssionately about many subjects, then three weeks later on February 16 (his 69th birthday) he was dead. If he suffered, it wasn’t a long illness.

And what is kind of majestic about all of this, what we know and what we don’t know, is how John Burgess lives on through the Internet. His life and his knowledge are there for us to share, thanks to Quora. May we all be so generous and fortunate when our time comes.

A copywriter with a broken arm is like…

(Insert your own punch line.)

Nobody respects a broken arm. That’s one thing I’ve learned after three weeks with my right forearm and part of my hand in some variation of a cast, with three more weeks to go. “What did you do, punch somebody?” people invariably say when seeing my condition. By comparison, wearing a boot after achilles surgery this past winter drew lots of sympathy. Feet and legs are noble; arms are somehow a joke.

My accident, the Tuesday after Thanksgiving, was indirectly related to the foot surgery. I felt I was finally ready to return to free weights after working on machines at the gym. I was carrying a 55 pound weight bar when I tripped on the foot of a bench and went down, head first. I did not let go of the bar, maybe thinking it might fly off and hurt somebody else, and when I hit the mat it bounced and came down on the top of the radius bone, breaking it in two places. A physical therapist told me it is very common for people to make accidents much worse because they do not let go of whatever they are holding. In my case, a freak mishap I could not repeat if I tried.

Lots of things are difficult to impossible with one arm, like pulling on socks, buttoning pants (which is why I’m going to holiday parties in sweatpants this year), opening jars, hand washing dishes, cutting foods, wrapping presents and of course typing. My wife was out of town the day of my accident and for several days after, so I got to drive myself back and forth to urgent care and the ortho clinic (yes, that’s illegal) as well as trying all the above.

I am thankful the arm will apparently heal without problems (though it does have a plate in it, one more of a growing collection of metallic body parts) and am making a resolution to be more mindful of my surroundings in 2018. Two surgeries in one year is one, and maybe two, too many. You too, be careful out there.

Tips for making the most of DMA &Then annual conference in New Orleans

The DMA Annual Conference happens next week, October 8-10, in New Orleans. If you haven’t registered, you can still get a ticket here. The format has been revised again, eliminating the Ignition sessions I’ve led the last three years, so I will be sitting this one out. Please have a beignet and a muffuletta on my behalf.

In case this is your first DMA, a couple of tips. The content has reverted to a focus on use histories presented by marketers and their agencies, which can vary from life-changing to self-serving and there’s often no way in advance to know which is which. My strategy is to choose backup sessions in each time slot and sit at the back of the room, so I can slip out unobtrusively if the session turns out not to meet my needs. I’ve found there is little correlation between the size of the room or the popularity of a session and its quality, so you shouldn’t necessarily jump into a room because it’s standing room only. Read up on the speakers and their companies and plan accordingly.

My second tip is to spend a good amount of time in the exhibit halls. Of course you want to see what the exhibitors are up to (and support their investment in the show), but this is also the place where I run into old colleagues, clients and friends who are randomly trolling the floor like I am. Speaking of networking, my third tip is to sit at tables during the meals where not only do you not know anybody but the participants don’t appear to know each other. That’s how to meet new prospects (because I’m a copywriter, almost everybody is a potential prospect for me) and learn new things.

And finally, take the time to enjoy New Orleans, one of the great food and entertainment cities of the world. The Convention Center is somewhat removed from the most interesting areas as are the big hotels, so you’ll need some initiative to make the most of the city. Go to the French Quarter early in the morning when the locals are waking up. Stroll, smell the flowers, get chicory coffee along with that beignet at Cafe du Monde. If you’re there on Sunday, take the streetcar out to the Garden District and have brunch at Commander’s Palace. Walk the French Quarter again at night, where you can enjoy much of the jazz (including Preservation Hall) simply by standing outside the open windows. I’m jealous!

Scary lesson from the WordPress hack

Last night I received about 800 emails confirming my subscription to various WordPress blogs, obviously the result of a hack. After I figured out what was going on I deleted them. No harm done, since almost all of them followed the best practice of requiring the recipient to confirm that they did indeed subscribe.

Unfortunately, two (so far) blogs did NOT require a confirmation and I’ve already started receiving peppy messages from them. Of course, these go straight to my junk mail folder. I am sure the thousands (millions?) of other recipients will do the same which effectively ruins the deliverability of future emails from those addresses.

Lesson: go right now, if you have a blog or a contact link on your company website, and be sure you require the additional confirmation step. If not, fix it now!

Prosper vs Lending Club: which is a better investment?

In November 2015 I tried an investing experiment. I invested $2500 each in Lending Club and Prosper, and chose an auto investing option that put me at a medium level of risk where I could expect annual returns in the 10% range, after some write-offs for nonperforming loans. Both sites spread out your risk by buying small slices of many loans, and both reinvest the money as loans are repaid. So how’d I do?

I’ll start by saying that investing in these peer-to-peer micro loans (the face value of most notes is $25 or so) would make an interesting hobby for a numbers geek. There’s a lot of information on the websites, both historical and projected, and once you’ve invested you can drill down to the details of each loan (though, obviously, not to the detail of the borrower’s identity). Prosper initially appears more user friendly and click-and-forget but actually has more options when you get down in the weeds. For example, it allows you to specify that you will only lend to somebody who is employed. On the other hand, while both sites let you specify whether you want to make 36-month or 60-month loans or both (down below I’ll explain while that is important), only Lending Club will show you how your projected return varies with your choice.

I actually started writing this post back in March of 2017, and cited the following inquiry I sent to Lending Club at that time:

I opened this account around 11/15/15 with $2500. The value of the account is currently $2376 which is a net annualized return of –4.06%. If I back out past due notes my NAR is still just 1.76%.

By comparison, I invested $2500 in Prosper at the same time and my NAR with them is 11.42% with a total account value of $2736. Not knowing whether they adjust for past-due notes I looked up the itemization and found that three of 76 loans were past due (but less than 30 days, none longer than 30 days) with a total value of $130. If I take the drastic step of writing off those three loans my account value is $2606 which is still way above my returns with LendingClub.

In both cases I selected a middle range of loans which was projected to yield returns of around 10%.

When I look at the scatter chart of accounts with similar rates of returns at [gated page on website] my returns are far below almost all other Lending Club investors.

What is wrong with my account? How can I adjust my automated investing so I make money, rather than lose money?

I am happy to talk about this on the phone, but wanted to put the facts in writing to give you some background first. If you can give me a complete reply in writing that’s great, otherwise let’s set up an appointment next week to go over this on the phone.

Thank you, Otis Maxwell

A few days later, Lending Club answered as follows:

Thank you for your email. I have reviewed your account and noticed that  you have allocated most of your funds towards the riskier loans of grade C and below. This is one of factors that can be affecting your return since those loans are known to have a higher charge off rate.

I went to their “Edit Allocation” page and found that indeed I had somehow created a “custom” allocation. I changed it to a “platform mix” with most of the notes grade C or higher, but of course that only affects new loans. Since then five months have passed, and we now have 21 months of history. My total account value at Prosper is currently $2837 which is a 7.2% annual return. At Lending Club it’s $2515 for a 0.38% AR. Those rates are without adjustment for delinquent or charged-off loans. Less than $70 of my Prosper loans are delinquent and only one, for $24, has been charged off. At Lending Club $600 in notes have been charged off and $169 is currently delinquent. The average rates on my Lending Club loans are higher, which is why the account value difference is not more that it is.

It might be that Lending Club is more rigorous in its charge-off procedures in response to their widely reported management and cash flow issues in 2016. I have now changed my allocation to 65% B and 35% C notes, the same ratio as at Prosper, so we’ll see how that affects returns going forward. But (especially considering I was originally looking at 10% returns) how great is Prosper’s 7.2%, which drops to 7% when I back out past due notes? (These numbers are net of fees, by the way.) In recent times you could have done much better in the equities markets, obviously, but also worse with conservative bond investments. I guess I feel like I do when I win back the cost of my entrance ticket at the Saratoga Race Way. I’ve had some fun experimenting with peer-to-peer lending, the process was easy, and I’ve made a little money.

However, there’s an 800 pound gorilla in my portfolio: what do I do when I want to get the money out? I have to turn off my automated reinvestment instructions and wait for all the loans to mature which will take 5 years (or 3 years if I’d selected only shorter term loans at the beginning, with a slightly lower NAR). During this time my annual return is going to steadily drop until it finally reaches zero. You could also resell the notes. Both Prosper and Lending Club contract with a third party, Folio, as a trading platform, which offers this fascinating disclaimer (especially the part I am going to put in bold type) to the buyer:

Purchasing Notes on the Trading Platform is inherently risky as the asking price is set by the seller, and may be priced higher than the remaining return expected on the Note.

Purchasing Notes with a negative Yield to Maturity or with large markups are almost certain to return less money than the price you will pay, producing negative returns on your investment.

There are various reasons a current Note holder chooses to list a Note for sale. Often Note holders are simply looking to liquidate their holdings; they may place Notes for sale at or slightly below par value (i.e., below the remaining interest and principal remaining on the Note). However, other sellers may be seeking to profit on their sales. They may price Note above its par value, either in the hopes that a buyer will view the Notes as very valuable or because they may hope to profit from a lack of buyer’s insight. They may hope that the buyer will not realize that the price has been set so high, or they may hope that a buyer will not be paying close attention to the price set.

Please be wary of Notes that are priced at high premiums.

In addition, the original interest rate set by Lending Club was based on the borrower’s credit attributes at the time the loan was requested and may no longer represent the underlying risk of the Note. While the underlying risk may have increased, the interest rate has not and may not offset the risk a buyer undertakes when purchasing a Note.

Since the Note was issued the borrower’s attributes have most likely changed, among these could include changes to credit score, income, employment, credit utilization, debt-to-income, and many other important factors. You should buy a Note only if you understand and are comfortable with these risks.

There’s some crazy talk in that. But as I’m looking to be a seller and not a buyer, I’ll likely need to price my notes a bit lower than their face value AND I’ll need to pay a 1% service fee to the exchange on each transaction. So I can certainly expect my NAR to dip to perhaps 5.5% for my Prosper portfolio by the time I’m done. (I’m assuming these $25 notes will be harder to sell, and thus require a larger discount, than notes with a higher face value.) That’s still better than a treasury bond or CD.

If you’re still with me, I’ll answer my question: from evidence to date, Prosper does a better job of managing its loan portfolio. They offer all the functionality of Lending Club (except for that glitch about the projection of return by loan period, which is informational and doesn’t affect your actual return) as far as I can tell. So no reason not to go with them. Now that I’ve balanced my criteria so they are apples-to-apples across the two services, I’ll report back in a year or so. I’ll also tell you about my experience (if any) in reselling loans.

Meanwhile, here’s a wild card: Kiva. This not-for-profit is a platform for making micro loans to entrepreneurs in developing countries. You don’t get paid interest but you do get your money back (according to Kiva, 97% of loans are repaid) and you can either withdraw it or use it to fund another loan. Less profitable, but possibly more satisfying, than the peer-to-peer options we’ve been talking about today.