As marketers begin to better understand and reap the benefits of online marketing, a large pervasive gap remains between the results we are able to achieve through online marketing and the budget we allocate to these efforts. This gap presents a clear and significant opportunity for those who are willing to break from traditional budgeting – “measured increases” – and invest in online. Despite the fact that marketers continue to gain rewards of online success, incremental increases breed incremental success and significant opportunity is left on the table.
In 2009, Ford will spend 50% of its entire marketing budget online and Intel, who has traditionally spent 15-20%, will spend 50% of its marketing budget online (approximately $50 M). Economic times are tough, budgets are being cut, resources are reduced, spending freezes are surfacing, and marketers are asked to deliver more with less. Online can be the lifeline.
Prove it! Why should I think of reallocating more to online?
If that’s not enough, here are a few more stats to chew over:
- The average person is exposed to 3000 advertising messages/day;
- Only 14% of people trust advertisements;
- 78% trust the recommendations of other consumers.2
Historically Speaking, what is a “Great Opportunity”?
Just look back a few years during the SUV craze of the early 2000’s when domestic car makers ignored the signs, trends, and data showing opportunity and stuck to building the traditional large-gas-guzzling SUVs. This conservative approach produced strong sales and profit in the short-term, similar to the way traditional media continues to deliver, but a really “great opportunity” was missed – the long-term opportunity to build more fuel-efficient and eco-friendly automobiles; the future of today’s auto industry. Despite the fact that a green revolution was emerging in conjunction with a steady rise in oil prices, American automakers were only willing to take a “measured approach” to investing in and building more fuel efficient cars. Their strategy was similar to the current measured approach when investing in online marketing. Meanwhile, the Japanese, specifically Toyota, had enough vision and foresight to look beyond the short- term demand (we all fall victim to pack mentality) and fully invest in fuel efficient vehicles, taking advantage of the “great opportunity” of the time. The rest is history. Today, GM’s stock price is $4.89, down from a 52 week high of $43 and $86 in 2000 – ouch. Conversely, Toyota stock price today is $61.25, down from a 52 week high of $117.59. During the same time in 2000 Toyota’s stock price was $59.30.
Many marketers reading this may be saying, “Hey, I increased my online budget by 5% last year; I launched a SEM campaign that has produced more targeted traffic; and I have a good website, a social media plan, targeted media buys, and solid open rates on email campaigns.” Fantastic. But, it’s not enough; not even close.
What to Do? Focus on the Low-Hanging Fruit – The Four Pillars of Online Marketing:
First, Launch a Robust Search Engine Marketing Campaign:
Start with paid search. Find a sophisticated PPC team (3 or more) or an agency (with multi-discipline expertise) that will look at your data and – with a high level of confidence and certainty – be able to promise you more… lots more. If you are managing a campaign in-house right now with only a single dedicated resource, chances are there are inefficiencies, which can be fixed quickly to yield immediate cost savings. Ever hear of exact mirror matching? While PPC is generating search results and ROI, build an internal Search team and invest time and human resources toward gaining organic rankings. SEO is the single largest potential for gain -I mean CMO attention grabbing ROI. It’s no longer snake oil, and when done well it can put up huge numbers: rankings (branding), traffic (market share), conversions (sales). The winners in the online space – the real winners – will win first with SEO.
Second, Improve the User‘s Website Experience & Conversions:
Give your users what they want, when they want it, and how they want it. Do that well and you will improve your brand equity as well as measure increased business results. Focus on the users first and business goals second… sit back and count the cash. Well, it’s not that easy, but when done well, it feeds a cycle of online success. According to Nielsen’s survey, spending 10% of your development budget on usability should improve your conversion rate by 83%. In most cases, it’s far cheaper to use 15% of your development budget than to more than double your advertising budget. (Nielsen, January 2008)3
Third, Dip Your Toe in Social Media:
Start small, be realistic, and understand your first goal should be to listen. Yes, listen. Not market, not push a new message, not convert – listen. Only after you have listened to your audience (current and potential clients) can you properly engage and begin a real conversation. Once you build credibility and open a true dialogue, you can begin to reap the benefits of social media – motivating others, your “mavens” to do it for you. Yes, eventually after you have climbed the mighty hill of social media, you can sit back and guide the boulder downhill. Let your mavens and evangelists do the work for you.
And Lastly, Measure:
Measure it. Measure it. Measure it. Find out what works, find out what doesn’t, and make business decisions based on real data. Don’t guess, don’t hope, don’t anything… measure it and improve marketing and results.
- Forrester Research, “Teleconference: The Interactive Marketing Forecast 2007-2012,” January 2008
- Nielsen Report, “Trust in Advertising,” October 2007
- Nielsen’s Alertbox, “Usability ROI Declining, But Still Strong,” January 2008, (http://www.useit.com/alertbox/roi.html)