Archive for January, 2010

Internet Spending, not just a suggestion anymore!

Wednesday, January 20th, 2010

Spending a portion of your marketing budget on Internet Strategies is no longer a suggestion; it is a necessity.

The rules vary by industry and by market. One cannot simply say your marketing budget should be a specific amount and be confident that it is the magic formula. The Counselors to America’s Small Business (S.C.O.R.E.) and the U.S. Small Business Administration (S.B.A.) define the variable for a proper marketing budget to be between 2% and 10% of sales, noting that for B2C, retail, and pharmaceuticals, these budgets can exceed 20%.

If you are an internet based business then you will be spending more for online marketing. If you are a brick-and-mortar business then you will allocate less for your online marketing. Either way you need to accept the fact that online marketing is the only way to succeed.

So again you ask – What percentage of my marketing budget should I allocate for online marketing? Unfortunately, there is no short answer; it is more about using the resources you have in the most effective manner. The accurate answer to the question is as much as you can once you have proven to yourself that it works, using the conversion tracking you can see how much each sale has cost you and from there you can work out the profit per $100 you spend on advertising and work out your marketing budget from there. Remember, marketing efforts should have a direct impact on revenue. The budget is a proportion of last year’s actual sales, or next year’s forecast sales.

Try this scenario:

The approach will be to think about what you are trying to accomplish and build your budget around that goal. For example, if you are trying to lead the market in a service priced at $2000 month you could spend:

1. 10-15% of Estimated Sales: 2000 x 50 sales per month x 10-15% = $10,000-15,000/month.
2. For the objective grow sales 20%: You could figure that $10,000 = 50 sales and therefore spend $12,000 and expect 60 sales.
3. You could research a competitor and discover that they spend $9000 therefore you could win if you spent $10,000.
4. You could realize that you only had $10,000 to spend and just do that.
5. You could do a ton of research and modeling and come up with $10,000.

Here are some Trends to consider:

Search Engine Optimization (S.E.O.)
Websites with relevant content and credible links will continue to rule the search rankings in 2010. As the volume of web content continues to grow, consumers will demand even more relevant and personalized search results. That means search engines will be looking for more relevant and personalized content from publishers and brands.

Make sure you allocate a portion of your budget to testing content, keywords and links that are targeted toward niche audiences. Test keyword and link placement in social media and mobile websites, and refresh the content you dedicate to search engine rankings. Once the search engines have tested these new search targets and revealed some concrete standards, you should be prepared to invest accordingly.

Paid Search
Consumers will use search engines in 2010 as a primary means of finding products and services to fulfill their needs, and they will still be clicking on relevant ads. Search advertising prices will remain reasonable, and average returns will remain comparably high as larger companies with decreased search marketing budgets continue to allocate resources to lower-cost S.E.O. tactics in hopes of attracting visitors at lower prices. You should consider investing in the highly qualified leads that paid search is capable of producing for your business.

Email Marketing
It is not hard to justify an investment in email marketing when the cost of sending emails is so low. The low cost is not the only reason to send email. Most consumers consider email to be their primary form of communication.

Email marketing will become more powerful as email service providers improve social media integration, search engine access to archived emails, auto-responders, and new integrated applications. If you do not already use an email service provider, invest in one in 2010. If you already use an email service, invest in your email list and in producing valuable content to nurture leads and attract repeat customers.

The cost of building a permission-based list is likely to stay the same in 2010 as it was in 2009, but more than one-third of consumers changed at least one of their email addresses in 2009 due to job changes or other economic factors. Spend more time and money in 2010 focused on keeping your email list current.

Social Network Marketing
Social media has one redeeming quality for marketers – tons of visitors. This is enticing if you are a major brand, but profitable interaction will continue to be the exception for small businesses in 2010 rather than the rule. A good test of your social network marketing potential is to survey your current customers to see how many of them consider social networking to be a primary form of communication. You should probably experiment with a Facebook fan page and a Twitter page if you find that a meaningful percentage of your current customers indicate an interest in following your business.

If you are writing a blog to help with search engine rankings or to inform existing customers, you should continue to test or invest. However, if you are blogging in an attempt to attract new prospects and convert them to customers, 2010 will be a year that exposes the blogosphere’s vulnerability to the law of averages. Converting prospects into customers depends on driving visitors to content that maximizes conversions, and that means your conversion rate is only as good as the content on your landing page. Instead of blogging to convert your website visitors into customers in 2010, work hard to test and develop great landing page content.

Website Presence
Advertise the location of your website content by placing ads on other high-traffic websites. Driving visitor traffic to your website is not the way to go for 2010. Instead, you need to spend 2010 driving your website content to the visitor traffic.

To take advantage of content in 2010, your website content needs to be nested in as many content aggregation websites as possible. For example, a lot of people search for videos on YouTube. If you have a video on your website and it is not also on YouTube, people on YouTube will not bother searching for your website.

Mobile Marketing
Mobile marketing is about marketing to people through their mobile phones and smart-phone devices. Small businesses have not had much of an opportunity to engage consumers on mobile devices, but 2010 has the potential to change that.

Demand is increasing dramatically for mobile applications and mobile web-browsing due to wider adoption of devices like the iPhone. As more people adopt these phones and features in 2010, look for small-business marketing services to start providing lower-cost mobile marketing solutions like text messaging, mobile e-mail marketing, mobile websites, and mobile application development.

Coupons, Discounts, and Savings
This one is not entirely an internet marketing trend, but it is important enough to mention because of the economy. 2009 was another tough year for retailers, and consumers are so accustomed to shopping for deals they might begin to expect the deep discounts currently available to continue. If you are engaged in heavy discounting to attract sales and survive the economic downturn, you will need to spend 2010 slowly weaning your customers off your lower prices, assuming the economy recovers. Changing expectations will not be easy, so try switching discounts for special privileges like loyalty discounts, free upgrades, and other offers.

Internet marketing trends develop quickly, so expect new and exciting trends to emerge in 2010. Stay focused on attracting repeat business, deepening your customer relationships, and solving problems for people.

*Did You Know – Nielsen Ratings say that research shows people are 31% more likely to recall an ad online than on television.