July 5th, 2009
Roy Hunter
http://www.mymarketingcompany.com
Internet marketing is vastly becoming a mandatory choice for businesses wanting to market their goods and services. Through development of a company website and everything else that is required to get your information in front of the customers that matter the most, the solution to internet marketing has become an increasingly complex one.
For many businesses the days of being located on Main Street and having customers that just walk in the front door are gone. Brick and mortar stores are being replaced by cyber-storefronts of companies whose customers will never know where they are located.
The most basic level of internet marketing is your company’s website. It is your Internet storefront and it alone represents your company, its goods and services, to customers you hope, and need, to get. But how do these potential customers find you?
Having a good website is not enough. It could be the best looking site on the Internet but if your customers don’t see it, they don’t see your company. Not only does a company need to market what it is they are selling, now they also need to market their website.
Several options exist for website marketing. They include:
- Placement in organic search results
- Paid placement in search results
- Paid placement on other websites
- Social site networking
- Direct email marketing
For the moment I want to focus on the topics of paid placement in web results and paid placement on other websites.
The paid placement model in search results works like this; if you are the owner of the Widget Manufacturing Company, you can bid for placement at the top of the search results in the sponsored ad section. Your placement in that section, and how close to number one on the list your ad resides, depends on what you are willing to pay the search engine company each time your ad has been clicked by viewers of your ad that are interested in purchasing your widgets. The ad has a limited life depending on how much per month you are willing to spend and how many users click your ad.
For example; if you have an advertising budget for pay-per-click placement of $200 per month and you bid $5 per click to get the number one spot in the paid results, your add can be clicked 40 times that month before it disappears until the next placement cycle begins. If you receive all 40 clicks in the first 3 days of the month, the other 27 days you can not be seen by your customers. In order for you to be seen all 30 days of the month, you will need to increase your ad budget ten fold to maintain that exposure. Suddenly your add budget has increased to an amount that is more than what you are willing to spend each month to acquire customers. Can your business survive when it can only be seen 3 days a month?
Another alarming statistic by Burlingame market researcher Outsell Inc. suggests that click fraud cost merchants $800 million last year and is a significant enough threat that 27% of merchants are cutting back on click-based advertising.
What is click fraud? Click fraud is when a phantom user, which has no interest in your business, clicks on your ad to generate revenue for the ad host or its affiliate. Many affiliate websites that host pay-per-click advertising get a share of the pay-per-click fee your company is charged each time a user clicks your ad. It’s free money to them, your ad budget gets blown, and you still do not have the customers your business needs to survive.
Though pay-per-click advertising is still a very reliable way of getting customers, business owners that opt for this method need to be aware that the potential for fraud is extreme, and an ever increasing problem within that ad placement model exists if your ad is displayed on affiliate sites.
What I recommend to the clients of my marketing company is a mix of pay-per-click advertising, fixed placement using a paid-to-perform model, and paid subscription ad.
The paid-to-perform model is simple. Your business info is listed on multiple sites free of charge until a user clicks your ad and completes a transaction of which you agree to a fixed or variable commission only if a sale was completed. Most companies offer a commission from 3% to 15% of the sale to the owner of the host website which hosted the ad that generated the sale. The downfall to this model is the lack of a cap you can place on your monthly ad budget, but if every completed transaction resulted in a profitable sale to your business, the ad budget can be built into your margins to cover the cost of the commissions.
If your ad budget is still a concern and prefer your budget be fixed, you can also opt for a subscription placement. Subscription placement works like this; you pay a website a monthly fee to host your advertisement. They are paid upfront and your ad will be displayed constantly, or randomly, to every viewer of that page during the subscription period. Regardless if you get one sale or fifty, you still pay the same price for the placement of that ad.
Needless to say, marketing your website is a complicated matter especially when the survival of your company depends on it. I advise my clients to diversify their online ad budgets to include a mix of all three. It has proven to be the best solution for marketing your company’s website as well as the goods and services your business provides.
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