Digital Marketing and ROI – Digital Marketing Choices

    November 3, 2008


“I know half the money I spend on advertising is wasted, but I can never find out which half.”, John Wanamaker 1838 – 1922, founder of the first American department stores and 35th US Postmaster General.

John Wanamaker lived in a gilded age that many think was much simpler than ours today. For a person of Wanamaker’s talents and ambitions however, the late 1800’s and early 1900’s would have presented challenges and difficulties left far behind in the age of digital marketing. The memorable quote attributed to him opening this post illustrates problems posed by traditional print, radio and television advertising.

It’s all about moving messages. Momentum in and of itself is the answer. The real question advertisers must ask is; “Who get’s it?” There is only one group of modern marketers who can give a true and thorough response to that question, digital marketers.

By and large, there are three ways to get information to large groups of people. Traditional advertising channels (print, radio and television) resemble a burst of grapeshot from a cannon in which an enormous number of projectiles are used to hit as many targets as possible on a broad field. Some projectiles will hit targets while most others will miss entirely. The shotgun effect.

A second means of passing information is person to person; mouth to ear to mouth to ear. Ideas can spread throughout a community like a virus, hence the name Viral Marketing. This is an especially effective method for moving simple, compact ideas but at some point messages break down to gibberish, just as they do in the “telephone game”.

A third method, digital marketing, has emerged over the past decade. Using the Internet and World Wide Web as their medium, digital marketing combines the best of the traditional and viral marketing while overcoming their shortcomings. Because each individual’s online activities can be tracked, marketers and advertisers are now able to directly target specific groups and unique consumers while keeping the integrity of their messaging intact. Digital marketing is a series of laser beams. Digital marketers who know how to focus those beams can do so with uncanny accuracy.

As illustrated in part one of this series, the digital age has rewritten the rules of marketing. Businesses of all sizes are moving vast ad-spends away from print, radio and television and repositioning their efforts towards the Internet. This is the reason the quality of your daily newspaper is receding and why television now relies so heavily on reality type productions instead of professionally produced programming. It’s is also why Google reported revenues of $5.54 billion in the third quarter of 2008.

Business owners know they need to use the Internet as an effective advertising and marketing tool. Entry and campaign costs are radically lower and more easily sustained, professional digital marketers can ensure messages are seen by truly interested eyeballs, and at the end of each day; analytic and reporting tools provide clear answers to Wanamaker’s ad-spend quandary. Digital marketers know exactly which parts of an ad-spend budget are effective and which are not. They can quickly move to eliminate non-effective efforts and re-purpose that energy to draw bang from every buck.

It is easy to suggest someone focus their advertising energies online. A much harder trick is advising them on how to best focus those energies. There are a lot of digital marketing channels to choose from and each business has its own unique set of needs and circumstances. This is where the studied advice of experienced digital marketers becomes crucial.

Just over a month ago, Minnesotan public relations expert Lee Odden wrote a poll asking professional digital marketers which internet marketing tactics they thought would be emphasized most in the next six months. The survey listed 41 digital marketing tactics and prompted respondents to choose the three they felt their firms would put the most energy into.

Unsurprisingly, Search Engine Optimization came in first place with 36% of respondents indicating SEO was likely to be the most important online advertising channel. Blogging came a close second at 33% and Pay per Click (PPC) advertising came third with 26%. These three marketing channels, which are the mainstay services offered by search marketing firms, tend to offer the strongest returns on monies invested by the advertiser.

Search engine optimization is a fairly broad title for a marketing channel made up of several niche tasks. SEO primarily involves taking a preexisting website (or creating a website) and making improvements on it to better its rankings in search engine results. SEO also involves improving the look and feel of the website in a bid to increase the number of successful user-interactions or conversions realized by that website. More clicks equals more site visitors. Attention to the wants of those visitors, as demonstrated by their on-page behaviours, tends to equal far stronger conversions which always equals far stronger ROI.

Blogging is the art of doing exactly what you are reading now. Blogging is content creation and content creation is an important part of SEO but it’s a bit more than that as well. Bloggers are often the public face of the companies they work for. Many corporate bloggers develop followings, readers who begin to subscribe to their blogs in order to read their writing. Blogging is, by far, the most effective and flexible method of keeping lines of communications constantly open between businesses and large numbers of consumers.

Pay per Click (PPC) marketing is the scientific art of creating and bidding on those text-based ads which appear alongside search engine results or on contextually relevant web-documents. In Q3-08, Google’s pay per click advertising and ad-distribution program, AdWords, accounted for almost 99% of their reported $5.54 Billion in quarterly revenues. PPC is an incredibly cost-effective marketing channel in that advertisers only pay when their text-ads are clicked on. Because each click can be tracked and the behaviours of all site-visitors analyzed, non-converting clicks become learning experiences for savvy digital marketers. Over a short period of time, professional digital marketers can deliver increasingly stronger ROI.

The fourth place result, Email marketing (22%) is at first glance somewhat surprising given the abysmally low open-rates email marketers report and the relatively high chance of offending consumers with advertisements that could easily be considered spam. It makes more sense when one considers how mindbogglingly inexpensive it