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The Why and How of “e-Marketing”
(from an old hand in the business)
by Josh Greene,
Road Runner
By now, most companies have realized the need for an electronic
marketing component as a part of their marketing strategy.
However, there is a substantial difference between having
a Web site on line, and having an integrated approach to e-marketing.
First, the question is, “why e-marketing?”
It's trackable, measurable, flexible, easily changeable, and
it's effective. E-marketing gives you a clear way to have
accountable advertising. It isn't always easy to know what
your results are from print/TV advertising, but you can track
your results online down to the number of clicks on your logo.
Examples of my favorite online tactics:
1. Marketing to mailing lists you maintain is a low-cost,
high-return investment. Let's say your company manufactures
ball bearings. You should have the ability for people to opt-in
on your Web site, and receive an e-mail newsletter about what's
going on. This might be an e-mail about happenings in the
ball bearing industry. Maybe you'll put together a weekly
collection of news clippings of interest. You'd mail that
out, and at the top would be a small advertisement for your
products. This would provide a valuable resource for your
customers, and a source of leads for future mailings/salesperson
contact.
2. Pay-per-click search engines let you bid on the
cost per click for placement in the search engine ranking.
Goto.com is my personal favorite. For a cost of $.05 and up,
you can be ranked on the search terms that your customers
may be most likely to search on. If you sold ball bearings,
you'd find that a bid of $.26 would place you in the top location,
which is syndicated to AOL, Netscape, HotBot, and Lycos. The
beauty of this is that you can know exactly what each new
visitor is costing you. With a properly designed closed-loop
system, you'll be able to track new customers from their initial
click all the way through to their order. I'll go into a detailed
analysis of CPA, or cost-per-acquisition below, but if you
found out that you were netting $1.00 in revenue for each
time you spent $.26, that would give you a powerful return
on investment, and indicate what you could bid as prices change.
The second question when it comes to e-marketing, is "How?"
There are a number of factors, but one of the key elements
to recognize is that whatever route you choose, it needs to
integrate into your organization. There tends to be an inherent
conflict between the demands of Marketing and the IS functions,
and it needs to be carefully managed to insure a smooth implementation.
If, for example, you don't have the resources to handle writing
a weekly newsletter, or to handle a surge in e-mails resulting
from an informational Web page, that's something to be addressed
before you start down this path. Evaluating your current capabilities
is an excellent way to begin the planning process.
The next step is to sit down with the various stakeholders
in marketing (marketing staff, sale people, IS) and determine
what your goals are. After that, you're ready to begin
addressing the how. There are a number of excellent resources
on the web. If you're looking for a good location to manage
an e-mail list, Microsoft's
bCentral is a good location to get a feel for what's out
there. There are many other resources out there. For an example
of extremely high-powered tools, you can visit MyMarketFirst.
Their software will manage mailing lists, allow you to design interactive e-marketing
campaigns (e-mails sent out based on interests or timeframes,
surveys included in e-mails and automatically tabulated, etc.),
and provide a point-and-click interface to some extremely
sophisticated tools.
And, finally, a few of the general things we've learned...
- Deals based on a cost-per-acquisition (CPA) can be tough
to negotiate, but will usually provide a guaranteed ROI.
- CPM advertising (cost-per-thousand impressions) is usually
great for the site you're advertising on, but not so great
for you. You can end up paying a rate 50x higher than CPA
based advertising, and unless the rate is extremely low, and
the audience extremely targeted, it probably will not end
up cost effective.
- CPC (cost per click) is a happy middleground. You can pay
a fixed rate per visitor, and be in front of an extremely
targeted audiences.
- Newsletters are an extremely effective way of communicating
with customers and potential customers, but you need to be
sure your company is ready to have a 2-way dialogue with customers,
as opposed to running advertisements and seeing what gets
bought in response. For some companies, this is a major culture
shock.
- Continuously tune your messaging. With good tracking, you
can see the effect of wording changes on your response rates.
We saw orders increase dramatically after we added a bold-line
reiterating a “Money back guarantee,” apparently
an important consideration for customers signing up for a
$40/month service.
In conclusion, e-marketing offers a valuable addition to
the arsenal of marketing tools, while providing important
feedback on the cost-effectiveness of marketing initiatives, which is especially
important in the midst of the current economic conditions.
(For more on this topic, see "Perspectives on Web Marketing: The End User Still Steers the Ship" in our Knowledge Base.)
About
the Author: Josh Greene, formerly a Web site designer with
his own business in Binghamton, NY, is now Director, Electronic
Marketing for Road Runner, based in Herndon, VA. You can reach
him at jgreene@va.rr.com.
In line with Josh's strong recommendation—determine what
your goals are—also check out the Riger
Web Project Start-Up Q&A.
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