The fast growth of the web means we are constantly achieving new
milestones. For online advertising, a critical component in all
Internet strategies, 2005 marked the turning point when advertisers
switched from testing to investing in online advertising. Jupiter
Research estimates the U.S. online advertising market will grow 28
percent over last year to $11.9 billion in 2005, to $13.6 billion in
2006, and $15.1 billion in 2007.
Naysayers could argue that because online advertising is still a
small part of overall advertising spending—accounting for approximately
five percent of the overall advertising budget in the U.S.—it can be
ignored. They’d be well advised to consider these statistics:
Almost 80 percent of North Americans have Internet access.
More than 50 percent have made online purchases.
A majority use the Internet as a decision-making tool.
The Internet is cited as the most influential channel on luxury
purchasing (cited by 44 percent of affluent purchasers).
39 percent of North Americans use online banking.
73.5 percent of e-commerce sites estimate sales growth of 15 to 35
percent this year.
60 percent of chain retailers estimate web sales growth of 25-200
Time spent online by adult Canadians has increased 50% since 2002
and Internet use is ready to overtake watching television.
In short, the power of online advertising is present, significant
and growing. For those that seek to further harness this power there
are three particularly important marketing concepts to understand. This
article, which is based on a series originally published in Prescient
Digital Media’s GetStrategic blog
will provide the facts you need to concerning:
Search Engine Optimization: SEO is the optimization of your
content pages and classification and labelling of content to increase
your rank in search engine results. In laymen’s terms, it helps you to
get the best ranking possible when someone uses Google to search for
Paid Search: This new technique allows an advertiser to pay
for small text ads, that sometimes look like they are regular search
result listings or they are offset from the regular listings as small
promotional boxes, and are served up alongside regular search result
E-mail Marketing: Despite the negative feelings expressed
for spam, e-mail marketing is the single most effective marketing tool,
except for traditional direct marketing.
These marketing concepts, SEO, paid search and e-mail marketing,
require more clarity so you can understanding what they are and when
they should be used, if at all.
Search Engine Optimization
Obviously, SEO is a marketing technique unique to the Internet. As
a result, it brings with it a new set of concepts and techniques.
Because you must assume that customers will find your site through a
search, improving your website’s search ranking requires education and
reconnaissance. It’s important to understand the algorithms and
determinants that factor into Google and other engine’s ranking
process, including the big three:
Click popularity (number, relevance, text): how often your
site is clicked on from links on other sites
Format, placement and content of the page title tag: the
relevancy of the title that appears in the top of your browser (e.g.
HealthyOntario.com – Consumer health information & health services
for Ontario, Canada)
Link popularity: how many other websites of relevance link
to your website
Other ranking determinants include:
Use of keywords in URL names (e.g. www.dresses.com)
Keyword frequency, weight, prominence and proximity
Themes and overall site design
Improving your rankings
It is not necessarily easy to improve your ranking especially if
your competition has a head start of several years or is also working
hard to improve their SEO.
First, your website needs to be solid; rich in relevant and fresh
content that is well designed, categorized, laid-out and tagged.
Second, ensure that people are visiting your website by way of
links on other sites. Build up the links to your website by trading
links. “I’ll link to yours if you link to mine.”
Other recommendations include:
Build content partnerships with other sites so that you can trade
and share content (and links)
Register your website with all of the big engines and portals
including AOL and DMOG (Open Directory Project)
Establish your credentials as “thought leaders” and place articles
or ‘leadership’ columns on relevant webzines
To avoid at all cost
There are dos and don’ts to SEO. Our recommended dos highlighted
above can boost your traffic and (if applicable) your revenue. The
don’ts could get you banned from Google and others. Avoid...
Cloaking your website: don’t establish mirror websites of
your primary website in an attempt to fool the engines (they will
figure it out and won’t be happy)
Joining link exchanges that aren’t relevant to your content for
the sole purpose of increasing ranking: it’s not just enough to
have links, the links have to be from relevant content
Write text or create links that can be seen by search engines
but not by users: all links should be viewable by the user
Send automated queries to Google to monitor your site's
ranking: automated programs make Google angry.
Use programs that generate automatic pages of links or ‘doorway
pages’: see the above about making Google angry.
Paid search receives a lot of press because it’s making a big
bang. However, many advertisers and web managers are still confused
about this hotly evolving science (or art depending on your
perspective). This new technique allows an advertiser to pay for
placement so that they are served up alongside regular search result
listings —sometimes look like they are regular search result listings
or they are offset from the regular listings as small promotional boxes
but most users don’t even know they’re ads.
When an advertiser pays for small text ads to accompany the search
results, they choose the keywords that they want their ads associated
with. The advertiser pays only when someone clicks on the ad. This
rate, called Cost- Per-Click (CPC), is determined by how
often users search out that phrase or word, how often they click, and
how big the competition is for advertising with that phrase.
Paid search also allows you to track exactly how you’re doing: how
many times people are seeing your ad, how many are clicking through,
and what is the exact cost to you the advertiser.
However, paid search is part art and part science. You may want to
have your ad associated with keywords and phrases, but you will have
competition. And getting the top spot is not yet determined solely by
price but by algorithm. However, MSN, Yahoo! and Ask Jeeves are all
moving to a highest bidder model.
Bidding on keywords can be very expensive if you have rivals
jockeying for position. Alternatively, you can bid on more obscure
keyword phrases that no other advertiser is using where you can assure
yourself the number one ad placement, but you won’t get as much traffic
as the more popular search phrases.
To determine what keywords to associate with your ad, there are a
couple of tools:
While traditional online display advertising (banner, spatials,
etc.) accounts for 45 percent of all online advertising, paid search
advertising accounts for 34 percent of the marketing and is growing at
a massive clip, according to Jupiter Research. In fact it won’t be long
until paid search advertising passes all other forms of online
advertising. The study forecasts paid search to exceed banner ads by
2010. At the same time, cost-per-click is anticipated to grow from $.39
in 2004 to $.58 by 2010.
Despite the increase in cost, paid search clearly is good bang for
the buck. Forty-two percent of the study respondents that classify
themselves as sophisticated marketers plan to increase their paid
search budget next year.
We all hate spam, but consider that orders per e-mail delivered
were 0.35 percent in the fourth quarter of 2004, an all-time high and
much higher than the previous records - 0.30 percent. (These stats were
reported by DoubleClick, which based its study on 2.5 billion e-mails
That means there’s a sale, on average, for every 300 e-mail
solicitations sent. While it depends on how you do it, the cost of
sending 300 e-mails is next to nothing. And this is why e-mail
marketing continues to be wildly successful despite the stigma against
The real winners are not those marketers that are spamming (though
some are wildly successful), but those that undertake permission
Coined by online marketing guru Seth Godin, permission marketing
is a sales approach used by a marketer to obtain advanced, explicit
permission from a sales prospect before sending them marketing
information. In other words, a person gives you permission to sell to
them – usually in the form of opt-in e-mail.
Permission marketing is a big business. Generally speaking, PM is
more effective and the response and conversion (sales) rates are higher
because people want to be marketed to (yes, of course, plenty slip
through the cracks and still treat this marketing as spam but it’s
still more effective than blind spam).
Show me the money
“What kind of returns can I expect?” you ask. Well, it depends on
many factors of course — key is the quality of marketing list:
Are your e-mail targets voluntary opt-in subscribers?
Are they past customers?
Do they know what to expect from you?
The more your subscribers know you, know what to expect, and have
purchased from you, the better your success.
Like any business, you do have to spend money to make money.
However, you don’t have to break the bank, and following some common
sense approaches will deliver strong results:
Use e-mail to communicate with your customers, but get their
Double opt-in is strongly recommended.
Third-party lists are strongly discouraged; ditto for
Provide links to back issues and related information.
Write succinct, punchy subject lines.
Don’t be shy – be persistent.
In 2004, Dakin Farm had an e-mail marketing budget of a little
under $14,000. It sent regular marketing offers three times per month
(on average) via e-mail to its subscriber base of some 13,500. The
return was huge. Total sales equaled $185,000. That’s an ROI of 1300%.
The click-through rate was fairly standard: only 4.34% of recipients
clicked on specific offers. But of those that clicked, 98%
Jennings quotes the following reasons for success, right from the
owner’s lips (Sam Cutting IV):
Everyone with a direct response website should build an e-mail
list and send offers, even if the list is small.
Measure response to e-mail offers.
Determine your breakeven point.
Increase the frequency of sending e-mail to a level that feels
right and is above breakeven.
Ensure every e-mail contains a strong offer.
Use short deadlines as a call to action.
As you can see, successfully utilizing online advertising isn’t
rocket science. Understanding the basics of search engine optimization,
paid search and e-mail marketing; and staying abreast of the numerous
success stories online, and you’re likely to see a positive return on
your investment, in both time and money.
A final pointer is to remember that honesty is the best policy.
Whether you’re optimizing your search performance by ensuring you have
an up-to-date, content-rich website or maximizing your e-mail campaign
by having something truly relevant to say to customers you know want to
hear from you, you’ll stand out from the spammers and cloakers.
Toby Ward, a former journalist and a regular e-business
columnist and speaker, is the President and Founder of Prescient Digital Media. For
more information on Prescient’s CMS Blueprint service, or for a free
copy of the white paper “Finding ROI”,
please contact us.