4. Buying Advertising and Keeping Customers!
When the Internet first started, banners were all the rage. Today, they’re pretty much passé. They’re no longer a novelty and unless they’re super-clever, users pretty much ignore them. Conversion rates have dropped through the floor and many advertisers have found other ways to promote their products.
And yet, every website still contains a whopping great banner ad splashed along the top or running up the side. In part, that’s because they’ve become more sophisticated with better targeting and improved graphics. But in practice, banner ads tend to be used for one of two reasons: to attract traffic to one’s website; or as a way of visually branding your business in the mind of the public.
The key with banner advertising is always to make sure the economics make sense. We’ll look closely at the math in this chapter, but before we go on to talk about the math of banner ads and how to tell whether your banner campaign is worthwhile, let’s just take a look at the terms involved. You’re going to see these words whenever you join an affiliate program or take part in any other kind of online marketing plan. You should definitely be familiar with them.
Business online, like business offline, always boils down to math: the difference between cost and revenue. If your banner campaign is costing more than it’s earning, you won’t be in business for very long. To figure out how your campaign is doing, you’re going to need to know your CPM, your Click Through Rate and your Conversion Rate. These are your basic tools. If you don’t know them, find out!
Let’s say your CPM is $20, your CTR is 1%, and your Conversion Rate is 4%. (So you’re paying $20 every 1,000 times your banner is shown, it brings you 10 new visitors, and you make one sale for every 25 visitors the ad brings). The question you need to ask yourself is how much are you wasting on the 24 users who don’t buy.
Cost per visitor = $20 / 10 = $2 So each visitor costs you $2, but you need 25 visitors to make one sale, so...
Cost per sale = $2 * 25 = $50 ...if your product is worth less than $50, you’re losing money.
That’s pretty simple, and as you can see, there’s not a lot of room to maneuver here. Margins are tight on banner advertising, and that applies to both the site selling the advertising space and the webmaster buying it.
Of course, hard cash isn’t the only way to measure the success of a banner ad, and one reason they’re still popular is that they’re a pretty effective branding tool. After all, advertisers spend millions on billboards without expecting motorists to drive straight through them and make a purchase! On the Internet, those advertisers can even be reasonably sure that the people who see their ads will be interested in them. But branding costs money — lots of it — with no guarantee of results. It’s usually best left to the big boys.
The banner ads on my sites usually send users to my affiliate partners, and the banner ads I place on other people’s sites usually come from my affiliate programs. They don’t cost me anything and as long I’m making the sales to pay my affiliate partners, everybody’s happy.
If you do decide to purchase banner advertisements though, and if you have a very specific market in mind, make sure they are strategically placed on sites where the traffic will most definitely be interested in your product or service. Find a site that suits exactly your specific product and you’re going to be appealing directly to your target market.
Text links are much simpler than banner ads. They’re also less eye-catching and less sexy. There’s no funky animation, no neat Flash, just a few well chosen words often stuck at the side of a web page. But that doesn’t mean they’re not effective.
In fact, to some extent, text links are the unsung heroes of online marketing. They don’t get half the attention they deserve, but they can do an excellent job bringing visitors to a site.
The first point to bear in mind about text links is that they’re tough to write. You might have just 50 characters to make your sales pitch. That’s about the length of that sentence, so you’re going to have to be pretty creative in what you say. That’s the downer. On the plus side though, text links are amongst the most popular form of promotion amongst Internet users. They don’t get in the way like pop-ups, and they’re often mistaken for content so they’re actually read. And because they’re written into the site’s HTML, you know that each page view means a real exposure.
They’re also cheap. You might have to pay a flat-fee or a cost-per-click, but there’s much less risk than with banner ads. If you know how much traffic the site’s getting, you can figure out in advance if it’s worth your while.
Best of all though, you can sometimes arrange for free links with partners in return for a similar placement on your own site. That doesn’t just give you free advertising… It also helps your search engine placements.
I use a lot of text links to promote my sites, but I wouldn’t rely completely on them alone. But, in terms of effectiveness and cost, text links are very powerful.
4.3 Classified Ads
Offline, classified ads are relatively cheap little ads that appear at the back of newspapers or magazines. They work well if you’re trying to sell your old Ford Escort or you’re looking for a new home for your old sofa. Offline classified ads can even work well promoting a variety of online products and services.
Online, things are a little different. But not hugely different.
I post ads on classified sites online, but I don’t expect to make a lot of money from them. What I do expect though is an opportunity to test my headlines and ad copy before I start spending hard cash on AdWords, other PPC’s and text links.
That’s why I don’t bother with the dollar ads. If I’m going to spend marketing money, I’d rather give it to a search engine than a classified ad site. You’ll typically get a much better return with PPC advertising and you know exactly what you are paying for each visitor.
But there are places where you can place free ads online, and you can actually do this on some of the really big sites like AOL and Yahoo. Even if I don’t make many sales, the fact that I’m getting my product in front of so many people for free certainly doesn’t do me any harm.
4.4 Cultivating New Customers
Search engines, banner ads, text links and classified ads are all ways to attract clients and build a customer base. It should also be noted that some of the old traditional methods like word-of-mouth referrals still work just as well online. In fact, word of mouth advertising brings me a lot of new business every month.
In addition to the aforementioned techniques, here are some tips to help you grab as many customers as you can while you’re setting up your business and getting your online marketing programs in place.
Whatever your line of business, you’ve got to know your market. You have to know who your clients are, what they want and what makes them buy. Do the market research, check out your competitors, create a formal marketing plan and be sure to take the effort to put yourself in the shoes of your buyers. Otherwise you won’t get any!
You might think you know what your product’s sales points are. You might even be very proud of them. But, the fact is, your buyers don’t care about all the wonderful gizmos you’ve packed into your product. They just want you to answer one question: what’s it going to do for me?
That’s what all your marketing has to be about: explaining to your buyers how you’re going to improve their life.
It can take a lot of effort and time to create a website that works. But you can’t stop there. You’re going to have to keep updating it, checking it and making sure all the links and addresses work. That’s the first place to look when you notice your sales starting to drop, and it’s crucial to keep them coming in.
Be Alert for New Marketing Opportunities
You must always be alert for opportunities to make new business contacts and not allow yourself to be caught off guard when opportunities arise. It doesn’t matter if you’re out shopping or at a Chamber of Commerce meeting; make sure that you have professional business cards, brochures, etc. on hand and pass them out.
Don’t Keep Your Business a Secret
Tell everyone about your business and your product. You might even consider sending out a mass mailing to everyone you know, telling them what you’re doing. Chances are, someone knows someone who wants what you’ve got, and friendly referrals usually bring the best business!
When it comes to building customers, there are clients who buy once, and clients who buy lots of times. It’s the latter that you want to pack into your customer list; they’re worth their weight in gold. Big companies are good places to prospect for repeat business (they have big demands and budgets) but always treat your repeat customers well. That might mean giving occasional discounts and freebies, but the extra business and customer loyalty you gain will make up for it.
Online advertising leaves a lot to be desired. There are ads that emulate Windows-warning boxes, pop-ups and pop-unders and a whole variety of “interruption” style ads. All of these ad mediums are developed with the intent to make people notice them. However, most of them only end up irritating people. Advertisers, especially those with small budgets, can't afford to waste money on ineffective advertising. In order to optimize your advertising purchases, consider the following steps:
Step 1: Define your target market and specify clear goals of your advertising campaign.
The most important aspect of any advertising campaign is to have a clear objective in mind. You need to know what group of people you are targeting with your ad campaign and what specific results you want to achieve from your advertising. Do you want to make 1 sale per day or 100? It may seem silly, but defining your outcome in advance will make a dramatic impact on what you actually achieve.
Step 2: Identify the most effective sites for reaching your target market.
Sites that are most relevant to your product or service will, more than likely, be your best bet, but also consider larger sites or networks that can target the audience you're trying to reach. They can be very cost-effective. If you have multiple products or services that appeal to various target markets, you'll have to consider sites that reach all those various segments.
Step 3: Craft your message to fit the needs of the audience you're targeting.
This comes down to understanding the audience of the sites you're advertising on. The message you use on a technology site to appeal to technologically savvy customers won't have the same appeal for visitors on a small-business site. Focus your campaign accordingly.
Step 4: Develop the content of your ad.
Pay particular attention to the content of the ad. The content should be such that it clearly distinguishes your product or service from your competitor’s. Have a catchy headline. The headline is probably the most important part of the ad – It is the attention getter.
Step 5: Formulate the specific promotional messages that correspond to your goals.
The promotional messages should concentrate on the major selling points of your product or service and have a strong call-to-action. Example: “Lose 10 pounds in 2 weeks and add years to your life by taking the new breakthrough Healthy Life Vitamin. Click here to get your free bottle today while supplies last!”
Step 6: Make the desired action clearly visible.
This certainly doesn't mean the desired action should necessarily blink, bounce or do flips, but it should be visible within an accepted format for the media you're using. In the case of the Internet, underlined text links, "click here" text entry boxes, and pull-down menus are all ways you can make the desired action clearly visible.
Step 7: Design the ad so it looks like it belongs on the sites where you're advertising.
For instance, you may want to use the site's font faces in your text, color schemes in your background, font color choices overall, and emulate images where appropriate. Try to conform to the environment you’re in so potential customers feel at home when they see your ad.
Step 8: Produce multiple versions of each ad.
Create three or four versions of each ad, changing the promotional message, call-to-action, font faces and color schemes. This is especially important if you're doing price testing or gauging reaction to specific promotions. By splitting your advertising buy among the various versions of your ad, you can then start to optimize your results based on the message that works best.
The Need for an Ad Tracking Program
There are two main factors that make an ad effective – Content of the ad and the sites where it is advertised. Most experts would agree that constant testing and experimenting is the only way to ensure that you get the right combination. However, the question arises – How do you test your ads? An integral part of any advertising campaign is knowing which ads bring you the most visitors. After all, you may have banner ads, newsgroups ads, ads in newsletters and articles, ads in autoresponders, or a simple classified ad on a website.
Every marketer needs to know:
Ad tracking programs would answer all of these questions. They can help you analyze the effectiveness of every single ad, and hence they should be an integral part of every marketing campaign. At the basic level, an ad tracking program records when your URL has been clicked. It can detect where your visitor came from (the referring URL), the browser and operating system used and the exact time the visitor arrived. It can also record total hits and unique hits (i.e. where one visitor may click several times). This data is kept in the system so you can then pull reports on any ad campaign over any period, e.g. by month, day or even by hour.
There are two types of Ad Tracking programs. However, the operation of both these types is the same.
You purchase these programs outright and it is installed on your site. If you have some technical knowledge, you should be able to install it yourself; otherwise the supplier will charge an installation fee. There are certain minimum software requirements for programs which run on your site, including access to the cgi-bin. Hence, most free sites would not allow you to install CGI scripts. With CGI scripts, your tracking URLs will carry your own domain name.
These programs operate completely independently from your site - no software installation or use of your system resources (such as disk space) is required. However, such programs run at the supplier site. You pay a rental (monthly or yearly) for the program. Thus, you are dependent on the supplier’s website for your ad tracking. With an online tracking service, your tracking URLs usually carry the online service’s domain name.
The main difference between these types of ad tracking tools is the installation. For some businesses, running CGI scripts may be more advantageous, whereas for others, online services would be more useful and easier to manage.
There are many ad tracking tools available at reasonable rates. Two of the most popular tools are discussed below:
This is an online ad tracking tool. AdMinder provides an ad tracking service that can be used with multiple websites. It provides the capability to track clicks, actions and sales. AdMinder provides reporting as well as the ability to export your data in CSV format, which you can use in MS Excel for additional analysis.
Some of its key features are:
ProAnalyzer Ad Tracking System is a CGI program that installs on your website's cgi-bin directory and tracks your ad click-throughs and sales without paying a monthly fee. When a visitor enters your website from an ad URL, a cookie is placed on his web browser and a click-through is recorded. If the visitor purchases a product, that cookie is read on the Thank You page with the purchase total, and the sale is recorded for the ad that generated it.
You can track sales or results either by the campaign name, the revenue generated by a sale, or the action accomplished (lead generated, etc.). The Administration Area allows you to monitor each of your campaigns showing hits, sales, and the conversion rate for each. You can configure how the program calculates the conversion rate (by raw hits or unique hits) and how results are sorted.
There are lots of different ways to bring customers to your site. So far we’ve discussed search engines, banner ads, text links, classified ads and some “old-fashioned” offline marketing strategies.
As you learn these methods and begin to put them in practice, it’s important to remember that no single method has all the answers.
The best marketing campaigns are a combination of them all.
In the next chapter, we’re going to look at another exclusively online method of building a customer base and making money: affiliate programs. Of course, the best way to learn about affiliate programs is simply to sign up for a few of them yourself and do some marketing. The Plug-In Profit Site makes it very easy to get started in the exciting and profitable world of affiliate marketing. Click here to launch your own automated affiliate marketing system today.
