The number one stumbling block to online success is that businesses do not know how to allocate their online marketing budgets-i.e., choose the most efficient and effective e-marketing tactics. Online start-ups usually have great ideas, build fancy websites and even hire consultants; yet, time and again they fail to make money online and either fail, or operate on the edge of profitability. One of the reasons is that they do not know how to attract substantial traffic to their sites.
The bottom line is: on the Web it is classified free ads all about traffic. No matter what your website objectives are, if your Website is not getting enough ‘hits,’ you will never see a dollar. Thus, in order to succeed on the Web you have to have an ‘it-is-all-about-traffic’ mentality. You also need to be strategic in terms of which online marketing tactics you choose to succeed in the cluttered e-marketplace and get the highest ROI.
There are myriad opportunities to successfully launch a business on the Internet…but building a Website is only the first step. It is like putting up a lemonade stand in a desert. Unless you point people to that lemonade stand, no one is going to buy from you. So you want to put up signs on the roads, directing traffic to that stand. You want to put those signs in heavily trafficked areas to maximize the number of people who see it.
Now, since you are in the desert, there might not be any heavily trafficked areas nearby. But on the Web, people are just a click away from any piece of online real estate. So you want to put your advertising signs up where there is traffic that is “qualified” to buy from you. In this case, “qualified” entails those Web searchers who are interested in your product or service. Recent studies show that about 30% of all people who use the Web search in the US are going to search engines such as Google or Yahoo! with an intention to buy a product or service.
When you buy advertising online, you are basically trying to buy traffic because you do not get many visits through natural (or organic) search. Simply put, you are paying someone to put a sign on their Website to redirect people to your Website. In the old days of the Internet, advertisers could only buy banners. Banners are those big square or rectangular ads on Websites that appear at the top, bottom, right side, left side, or anywhere else that a Website is willing to sell their space to advertisers. As an advertiser, you buy banner space on a “per-thousand” basis. The term which you will hear if you buy banner space is CPM – which stands for Cost per Thousand (M is the Roman numeral for the number 1000).
If, as an advertiser, it costs you a $5 CPM for a banner space on a site, that means that for every 1000 people that see your ad, you are paying $5 to the business that is allowing your ad to be displayed on its site. Even though 1000 people might see the ad for every $5 you pay, you probably are not going to get 1000 people to click through that ad and come to your site. Rather, you will probably get some small percentage that click through, also known as the click-through-rate or CTR. Recent studies show that the CTR for banner advertising is the smallest among e-marketing channels. According to eMarketer, the click-through-rate of Banner ads declined from 0.75% in 2006 to 0.2% in 2007, meaning on average only 2 people out of 1000 click on banner ads.
Although banner advertising is still big business on the Web, many advertisers have shifted their online advertising budgets to what is known as pay-per-click (PPC) advertising or “sponsored links”. With PPC, advertisers only pay the Website where their ad appears when someone actually clicks on the ad. So instead of paying advertising dollars for eyeballs that may see but never click through your banner ads, you are only paying for visitors who actually are interested enough to click on your sponsored-link PPC ads. You only pay on “performance,” that is, when someone takes an action – in this case, clicking on your ad.
Whereas banner advertising is the online equivalent of buying relatively large space ads in a newspaper or magazine, pay-per-click ads are like tiny classified ads. There are usually no graphics associated with sponsored links – they are simply lines of text promoting an offer or describing a product that appear on top and along the right columns of search engine result pages (SERPs) or on your Gmail. These ads are related to the keywords you typed into the Google search bar, or to the content of your email.
The ability to get your customized message in front of interested buyers when they are searching for your product/service makes search engine marketing (SEM) a very effective and targeted way to advertise. The popularity of PPC advertising has skyrocketed in the past several years in part because you can easily track the return on your marketing investment and also due to the awareness of search marketing created by the success of Google and Yahoo!, which run the two largest PPC advertising networks.
Your job as a marketer is to put yourself in their shoes. You must ask yourself: What keywords are my ideal prospects going to type into their search boxes? If you do not select the right keywords, you simply won’t get the traffic you want to your Web site. You won’t get a chance to show that brilliant advertising copy that will motivate prospects to click through to your site, read your unbeatable offer, and then buy your product/service.