Editorial Articles

While growth in traditional marketing areas has faltered, and even worse fallen, Internet media spend shows no sign of abating with double-digit growth rates across most European countries.

The key reasons for the growth of Internet media spend are simple; it is cost effective and predictable. It is generally much cheaper to recruit Customers online. Their lifetime values are generally better and unlike offline media, does not generate peaks of demand that make operational management from call centre to delivery a nightmare.

Cost effective Paid Search Advertising?

The foundations of any lead generation programme remains Paid Search advertising given its flexibility and quality of pre-qualified leads and typically makes up ~30% of any online budget. However increasing competition in this space has meant that costs have risen and thus spend shifted to other online media areas due to Google’s Best Practice Funding (BPF).

A Client should not engage with any agency to run their Paid Search campaigns on anything other than a Cost Per Acquisition (CPA) basis with all results being transparent.

Think about it; if you improve the web sites Visitor to Order conversion by 25% that is the equivalent of now paying 75p per click versus £1.00 per click!

Results driven Natural Search Optimisation

It is still the case that 85% of online transactions arise from search engines and also when been presented with a search result; 6 out of 10 of us would click on a natural listing rather than a paid for link. Given the time in takes to achieve natural listing, investment in this area often provides a competitive edge to a brand.

However be warned that any natural search programme takes time and effort to deliver results. Make sure your agency is specific on which terms they are optimising on, provide you with an ethical programme of external optimisation and get them to sign up to a forecast and return on investment; that‘ll sort out the men from the boys!

A new life for Display Advertising?

Most campaigns are either driven on a CPA basis or are commission based i.e. are tied to results. The old ways of being paid on the basis of impressions have now largely gone and publishers are investing much more into rich content. While there is definitely a case of advertising to suspects rather than prospects, click throughs do deliver the volumes many brands require and if chosen carefully the right profile of customer can be recruited from these media publishers.

Affiliate Programmes you can rely on

The business models the various affiliates operate to vary from Offer based sites, to Voucher sites to Cash back sites to straight commission based models and are relatively risk free. The problem for many Clients, reliant upon affiliates as a revenue stream, is developing and maintaining the relationships, given that higher commissions will quickly lure affiliates elsewhere.

A few success factors are identified below;

• Investment in comprehensive tracking and analytics
• Provide affiliates with access to rich content
• Build relationships with affiliates
• Don’t stop and start affiliates
• Establish proper terms of trading

E-Mail Marketing, Online Aggregators and Shopping comparison sites

E-Mail marketing, while generally being regarded as being a retention rather than a recruitment activity never the less delivers for many Clients a significant level of ongoing sales. For many Clients agreeing CPAs is often done on the basis of breaking even on the first purchase, factor in the lifetime value of subsequent purchases made through retention activities and differing opportunities arise.

Shop comparison sites have existed for some time, but the emergence of online aggregators such as Channel Advisor has enabled many new entrepreneurs to enter the market taking advantage of the ‘footfall’ of the bigger players such as E-bay and Amazon. It represents a win-win for all concerned the Client gets dramatically more Visitors to his site, the host is able to offer broader product ranges and the consumer remains protected by the host.

Why not test Social Networks?

There are a few case studies emerging there are indications that it is starting to represent a real revenue stream to Clients. According to Hitwise UK, 3.1% of visits to Shopping and Classified sites in September 2008 came from the top 25 social networks.
E-Marketeer estimated that £115M was spent in the UK in this area in 2008, up 77% on the previous year and forecast to represent some 4.4% of online spend in 2009.

The very essence of social networks is sharing. According to Avenue A Razorfish’s ‘connected consumer’ report, 72% have shared videos with their piers, 55% use desk top widgets and 28% use twitter. Thus, for those wishing to start to engage this group of consumers, a key starting point is to develop interactive content that the brand can leverage.

Mobile Marketing; it is going to happen

Pundits have for many years been telling us how mobile marketing will revolutionise online marketing given its convenience. However, the emerging technologies of rich display technologies from the likes of Apple and its iPhone, higher bandwidth networks and cloud based computing may indeed make this a reality in the next three years.

Much of this development will come out of the USA, it has over 80 million mobile internet consumers compared with our 15 million in the UK. All good marketeers know the value of data, so start collecting mobile phone numbers now with every online transaction as well as e-mail addresses!

The importance of Multi-Channel Marketing

Digital agencies should not be naive in believing offline marketing has had its day; it is key to promoting brand values and when all said and done is still dwarfed by the revenues earned by the traditional retailers.

For all that has been said about the shortcomings of offline marketing; it must be recognised that consumers shop via media that is the most convenient at that point in time. This may be via a PC or iPhone, but could equally be via a Catalogue we have received in the post or at our local store.

In Summary

The ease at which consumers can research, compare and purchase across differing platforms will hasten, as we all adopt new ‘connected’ technologies. The amount of money we invest online will only continue to rise at its double digit pace. Paid and Natural Search and Affiliate lead generation will continue to represent over 85% of most Clients online budgets in the short to medium term; however clearly that mix will vary according to the nature of a Clients business.

While we need to keep an eye on emerging technologies from a marketing viewpoint, we should not also forget the investment we need to make in our ‘conversion’ infrastructure in order to deliver improved returns from all lead generation advertising.

Author: Mike Anderson, Managing Director, Web Marketplace Solutions Limited