Online marketing is not about ROI

This may sound crazy to you but here is a lesson learned on growing your online business:

Strategic online marketing isn’t about ROI

When looking at the 3 stages of customer research you can see that the goal of your integrated marketing strategy is NOT all about high ROI. The objective of your marketing strategy is getting as many people to stage 3 in a cost effective manner. In the example of the awareness pyramid it is about getting your online customers to the bottom. Being part of the final 3 products or brands shortlisted should be the overriding goal of all your marketing and distribution actives and you can grow this base with solid marketing in the earlier stages of consumer product research.

Obviously you want to do this at an agreed and acceptable level of cost. Marketing to the early stages of customer research will yield significantly lower ROIs than “tactical” marketing in the later stages. But the equation works like this:

“The higher the ROI of your marketing, the lower the volume”

The reverse is also true. But, what people have a tendency of forgetting is:

“Earlier stages of customer research yield higher rates of incremental business”

This marketing strategy is what I would call a “Pull down” strategy, where you are pulling potential customers from the top level of the awareness pyramid down to the glorious level of “top of mind” where conversion rates are much stronger. The ideal method of building awareness of brand and product is targeting the key phases of customer research, being present in the right spots through stages 3 and 2, so that the customer arrives at the natural conclusion that your brand or product should be within his “top of mind” shortlist.

You need to understand your markets awareness levels and be able to categorise them. In doing so you are building a strategic online marketing game plan. You might not realise it but your are also developing a sustainable customer base.

Stages of online customer research cycle

There are 3 main online customer research stages for medium to high involvement purchases.

1- Product specification research
2- Brand or product validation
3- Product short listing

Sticking with the example of a flat screen TV, bear in mind that is regardless of the product or service, these 3 phases hold true. In certain cases, products become more expensive, additional stages will apply, the segmentation becomes increasingly complex and the time factor has more importance. Understanding your customers’ research cycle is fundamental to targeted and effective online communication and online marketing mix strategy.

 
Stage 1: Product specification and product research:

Still using the example of Flat screen televisions products. Most customers are not tech geeks, they do not know the difference between 1080p and 1080i, most customers do not know why a 100mhz TV is better than 60mzh (clearer picture during action scenes, screen refreshes faster…), then you have contrast ratios, connectivity, color management engines, power consumption, weight, etc, and that is just for the TV. What about the right size of screen for your living room: Sitting distance for a 37inch screen is 2.5 meters away, 40 inches is 3 to 3.5 meters and so on… Product specifications research and education phase is just this.
Brand exposure at this level is Low to Medium. Well get back to this in a later post.

Types of websites used at this point of the customer research cycle: General electronics / gadget blogs, technology guides and reference sites: CNet TV guide, Tesco Buying guide and niche sites such as Home Cinema choice. Then specific component or technology questions arise, like what is HDMI? Answered using sites such as: About.com, or How stuff works. Comparison sites and brand sites can appear at this stage but carry less weight depending on the educational content they hold.

End result of Stage 1:
Core product specifications and requirements are pretty much set. Brand selection and chosen retailer is by no means set at this point.

Stage 2: Mapping products and brands to specifications:

In Stage 2, customers have defined the required key features and specifications of the product or service they want to buy. Customers have seen tons of products and brands advertised during the initial research stage 1. Stage2 is the time to start finding which one of the products and brands matches the selected requirements. At this point some of the products and brands that have come across during phase 1 will somewhat influence stage 2 but the consumer will not be limited to those.

3 types of websites will be used in the mapping stages:
A- Review site: consumer reviews of various products meeting the key shortlisted requirements
B- Meta engines and comparison websites
C- Branded websites

The final list will yield a combination of definitive products that need to appear in his shortlist, others that should or could appear, and a small list of alternate products. At this stage brand and pricing are still secondary, influential but secondary due to the “Stage 2 break”. Lets not forget that budget has in fact had an influence, but budgets are flexible, that is why we rarely buy the bottom of the range products or the cheapest no name brand TV.

What is the “stage 2 break”? This is a fundamental part of the research cycle. We all have it. It can be short or last forever, but it is the time that separates stages 2 and 3. It is the Spike Lee phase of “doin’ the right thing”. During this break and it is an actual break in the time continuum, your potential buyer will digest his list before he shortlist by:

A- Taking time off the search to think about his list, it can last the time of cigarette break to weeks
B- Validate his list and requirements with friends that have had a similar purchase experience
C- Talks to family members that influence financial decisions or that are effected by the expense
D- Use offline material to back up his online selection such as magazines
E- Search for additional reviews and advice

Stage 3- Product and brand short listing

After the stage 2 break a selection of 2 to 3 products will be made. Pricing and brand are enormous at this stage in getting to the final 3. To reach the winning podium, for similar or equivalent products the strength of the “top of mind” position is critical. Being top of mind means being the supplier or brand that comes first to mind. We will have a separate post on “making the top of mind” at a later date.

The key sites used here at stage 3:
1- Branded websites. Remember that it does not mean that the actual brand site will be used for the purchase. But it is a validation of the choice, benchmark for pricing and getting peripheral information such as manufactures standard guarantees, etc.
2- Search engines with an increased role of PPC
3- Comparison engines. laying the role of both retailer search and price validation
Yes, search engines where used in prior stages, but it is in this stage that the likes of Pay Per Click advertising has its greatest effect and its highest return. In the prior stages natural search results, synonym to unbiased results, took precedent over paid for ads in search results. In stage 3 PPC click through rates are far greater and ROI shoots through the roof.

Now the actual purchase is around the corner. Often it will happen within stage 3, but in more complex products such as travel another break will occur, a last phone call to the wife to make sure that the final decision is the right one.

Internet White Noise chews up the webs search term long tail

Brief review of the Long tail
There are numerous blogs and articles that cover the retail and search engine theories of “The Long Tail”. The original article from Wired Magazine can be found Here. But as the graph shows, the more niche your keywords or target market is the smaller the volume, but the easier that market is to penetrate, but in order to achieve volume you have to increase the number of niche keywords or markets / products targeted.

How White Noise eats away at the long tail
Affiliate network technology and the simplicity of blogs have birthed the belief that blogging and stay at home earnings is simple and achievable by any. The reality is quite different, only 1% or 2% of blogs and affiliate sites will ever have any real financial return. So people get discouraged, efforts are placed elsewhere and the layer of White noise keeps getting thicker.

But these sites linger on the web, inactive but still there, individually capturing the occasional visitor off the vague search term. But, put together, these millions of affiliate sites and blogs manage to reap tens of millions of searches and page views. The result of this think layer of White Noise makes even the most remote of niche terms and product a bit harder to reach.

Efforts to penetrate niche markets to sustain financial return is made all the more difficult that in order to be financially profitable you need to capture or penetrate a lot more markets, products or keywords in that Long tail.

Defining the webs layer of White Noise

Grasping the sheer size of the Blogosphere

Technorati has over 50,000,000 blogs. The blogosphere, the mass of accumulated blogs, doubles in size every six months according to CNET research and Technorati, that’s a new blog every 0.5 seconds and 1.6 million posts per day.
Ponder these figures for a second and image the sheer amount of content that represents. 39% of the content is in English. Granted a majority of the blogs are personal diaries, daily rants and rehashed news stories. But many blogs are get rich quick, how to blog and what I call “solo web marketers” themes.
What is white noise?

Traditional definition of White Noise:
White Noise comes from Light, where white light is the sum of all the different light frequencies. It’s the sum of the colors of the rainbow if you will. White noise for sound is the sum of all audio frequencies, also called static. White noise is often used to mask sounds and noises. Picture a bar with only a couple of people. You could pick up the individual conversations. Add 10 or 20 new people, picking up individual conversations becomes far harder. Now add 500 people chatting away… You have white noise.

The Blogosphere’s White Noise:
10,000’s of thousands of blogs, covering similar topics, commenting on similar news stories, SEO techniques, affiliate marketing networks, make money blogging, etc, etc… You get the picture; it is the base of the Blogosphere White Noise: A think layer of similar redundant content, none really better than the other, but in enormous content volumes. Its this layer of content White Noise that SME’s (Small and medium enterprises) and new businesses of all kinds need to cut through in order to get a valid message across the web, to be found, and be able to peer their heads over the Blogospheres White noise fence.

What makes the Webs White noise layer?

There are many reasons for the build up of Internet white noise, but I have boiled them into three categories:

Technology:
The advent of blogging sites such as Blogger and Blogging software such as Word Press has simplified and demystified the complexities of owning and managing your own website. Now you can speak up and build your presence online without a single iota of technical programming knowledge and without spending a single penny.
Affiliate marketing and technology has fueled peoples dreams of easy money. Signing up to a couple of affiliate sites and getting  auto tracking links that identifies you as the affiliate in exchange for a share of revenue of the sold products you just pimped out.

Human nature:
We all want to express ourselves, we want to be unique yet be part of the group and say “I too have a blog”, we think that we are special; we think we can do it better, and….  we are greedy.
The truth is that 96% of blogs are of poor quality and abandoned shells of vain attempts to press our identities on the web. A successful blog is the result of dedicated work, intelligent marketing, human relations, skill and innovation, targeted niche content and added value.

Marketing promise:
Affiliate networks are loaded with tools and promises that lead the novice blogger to believe that a $5,000 monthly pay check is just a few hours away. How many Adsense adds have your read that says: “How I made $14,059 in the first month with XYZ services or software”.
Some do make money; some excellent blogs make serious coin from affiliate sales using Adsense, Clickbank and Auction Ads amongst the many affiliate systems out there. But for every 1 successful blog there are 50,000 that fail and are abandoned, rotting in the White Noise grave. All the more reasons to commend successful blogs.

Companies trippin’ over the webs’ White Noise Hurdle

How does White Noise cannibalization of the Long tail impact online businesses?

Smarter shoppers, harder shoppers:
White Noise can be seen as commercial website pollution. Web users, your future and potential customers are getting wiser, smarter, but regrettably they are also getting more suspicious. Remember that a user makes his mind up about a website in less than 3 seconds, in the next 5 to 10 seconds he will have decided whether he wants to leave the site or not.

Credibility, trust and confidence:
As a consequence of the web’s White Noise, the level of effort to build trust and confidence is much greater. But trust also has less time to be conveyed to your visitors, it is now a matter of seconds. Branding and brand values become increasingly important, as brand reinforces positive consumer perceptions and confidence.

Getting into search engines:
Getting in to search engines but especially ranking in the first few pages has become all the more difficult. Greater competition for the same markets, the White Noise of millions of blogs and affiliates sites have pushed Search Engines to be more stringent in the way they measure, rank websites and display search results. So you will need more effort, more patience and greater skills to rank high in Search Engines today compared to just a few years ago.

Added value and differentiation:
Cannibalization of your audience by the White Noise layer, your competition, direct and indirect make your efforts to differentiate all the more important. Your business strategy must focus on added value and benefits of your products and services. Your communication strategy, your website, content strategy and marketing need to be fine tuned to much higher standards to be successful.

Research and preparation:
So your preparation and strategy caries a higher level of effort. No longer do you focus on just your target market, but you sub divide it in market segments. Each market segment gets chopped in sub segments that evolve with products and seasonality, geo location of your customers, etc… simple right?

Website content structure:
What the hell is this? Well structuring a site and its content does simply need to cater to your audience. It needs to cater to search engines, RSS feeds, support marketing activities branding activities, email. You don’t just build a site for people, you build it for systems, crawlers, spiders, scrapers. You don’t have content, information, words… you need “Hyper relevant content” in a properly structured Niche ladder structure.

Marketing and PPC:
Long tail market segments aren’t cheap anymore. Everybody targets Long tail keywords, the White Noise Layer is full of failed attempts of sites and blogs targeting the Long tail micro segments. Result: Even when bidding in the PPC arena on Long tail words, they cost a lot. White noise has pushed cheap 5 cent words to 15, 20 and 15cents a click for ridiculously small volumes.

Customer retention and conversion:
Of the many consequences of the increase competition in the Long tail is the ever increasing need to develop and improve customer conversion and retention. Customer life cycle and spending is getting shorter as loyalty drops, but an increasing proportion of your profits lie in your businesses capabilities to generate repeat business and customer retention.

Do you need an Internet Marketing Consultant?

Finding the right Internet marketing consultant in the UK

Internet marketing consultants in London UK are like banks, they are all over the place, you just don’t know which one is best for you and your online business. You also look at the expense of hiring an Internet marketing consultant and have to wonder, “is it worth it?”.

What to ask yourself before hiring an Internet marketing consultant:
- Do you have the Internet marketing experience to expand your online business?
- Will an Internet consultant save me time?
- For the same amount of money, is it better to hire a consultant or spend it on random online marketing activities.
- What is more cost effective? Hiring an Internet marketing consultant or making the mistakes myself?
- Who is easier to get rid of? A marketing consultant or a Web agency?
- What alternative sources of online marketing experience can I get?
- Can the insight and guidance of a consultant save me time and money?
- Can a London Internet marketing consultant avoid hiring the wrong people and developing the wrong services?

The list goes on, the trouble is that most businesses get stuck in looking at the short term expense of an online marketing consultant. People have trouble seeking advice, yet good advice is hard to come by.

Test your online consultant before you hire him… Take him on a test run.

An Internet marketing consultant in London isn’t a car, but you can still take him on a test drive. Take the opportunity to know them over lunch or just a few telephone conversations. I practice a no BS approach, straight shooter, straight talker. In a couple of meetings you should be able to assess the potential match of minds, the skill level and any potential benefits of a business relationship. If you can’t assess the consultant, ask the right questions, then there is no doubts you are clueless about online marketing and distribution. If this is you, the cheapest and risk free way of kick starting your online business is by taking a chance with a consultant. Any other online experimentation will cost you more money, more time and an agency will just be a longer term expensive and pose a far greater risk, especially if you don’t know how to manage them.

Do microsites make marketing sense?

A microsite is a stand alone website that has or should have a specific marketing message. Often it is a tactical marketing activity that includes a viral component. These microsites have their own unique URLs, integrating a derivative of their brand. Lets take the example of a resent UK TV advert: Hellmanns Squeezy viral campaign.

The concept is excellent and you can visit the Hellmanns Squeezy viral site here.

But what is the problem with microsites?

No brand leverage, No optimization, No Integration
Leading to confused customers, lack in marketing and brand performance, wasted marketing money
So what happened that lead to this bad decision? I would not be surprised if a small team of marketers came up with this excellent idea, then hit a couple of hurdles in the Unilever Website policies not allowing them to put the viral campaign under there main UK site. Or perhaps the internal management structure in charge of the Hellmann’s sites couldn’t or wouldn’t support the viral campaign on the UK site. Even better, Unilever policies and internal structure specifically dictate what the use of local area sites can and cannot do, blocking the integration of the microsite into the .co.uk main site. Or, even worse, if the Agency hired to do the viral proactively suggested to put the viral site on a separate URL. Shame on them…

The TV advert mentions, very briefly, the Viral site URL (link):
www.hellmannssqueezy.com
You cannot find any mention of the ad campaign on the .com main Hellmann’s site: http://www.hellmanns.com/default.aspx. So this is a specific UK based viral campaign, at least that is what the marketing organization of the campaign points to.
So what are the major NONOs in this incredibly confused campaign?

1- Customer loss:You’ve seen the TV advert but can’t remember the exact URL. Unless you already use the product it is unlikely you will know how to spell Hellmann’s. Finding the right site is a bit of a trek as the homepage of Hellmann’s UK really isn’t functional nor in the search engines.
http://www.hellmanns.co.uk/home.php needs to be typed in manually
http://www.hellmanns.com has no mention of the ad
http://www.hellmanns.co.uk used redirects to landing pages (http://www.hellmanns.co.uk/landing.html) that are not referenced in search engines.
The Unilever site, that does rank in search engines doesn’t have the URL structure to point to branded sites that you are looking for… good grief…A bit confused at Unilever are we not?

2- SEO inefficiency:The current micro site and Hellmanns.co.uk are virtually in-existent in search engines. The micro site should be integrated into the main .co.uk site. The viral component would reinforce the top level domain name, thus increasing its relevancy in the likes of Google, but ohhh no. It does the exact opposite here by increasing dilution of PR and Link “Juice”.

3- Wasting TV budget: Seriously, this type of marketing integration begs the question, do big brands care about their marketing effectiveness? I would be curious to see how accountability is measured, what success metrics are used, how the marketing plans integrate.

4- Why do it right when you can do it wrong: The utter lack of common sense is staggering at times. How hard would it have been to put the viral under: www.hellmanns.co.uk/squeezy?
How hard would it be to properly structure your URLs on the main site and remove the redirects to the squeezy campaign, instead of having: www.hellmanns.co.uk/landing.html

5- Poorly integrated marketing strategies:If you had taken a consultant and spent a few £ in the planning and strategy phase perhaps you could have increased efficiency by 20%, 30% or more. Perhaps you could be better ranked in search engines with virtually no additional effort, perhaps frustrated customers would have embraced the brand and bought the product if they had found the site in the first place. Instead, TV and online aren’t synched up and integrated. I’d bet the TV marketing team and online teams have separate offices…

Micro sites are awful, period! They are the reflection of a lack of commercial integration within the online channel. They reveal “siloed” (Vertical structures that don’t horizontally communicate) departments that cannot cooperate and communicate with each other. Or better yet, If you are ashamed of a particular marketing activity and don’t want to put it on your main sites, then don’t do it at all. There is, to my knowledge, no advantage of micro sites in big or small brands.
Micro sites :

A symptom of commercial flaws
Lack of strategic vision and global planning

Lack of marketing integration

A reflection of antagonistic points of view, departments and people
Absence of brand wide marketing policies, guidelines and marketing channel integration plans
Lack of competency and utter common sense
Lack of accountability and performance metrics
A sign that you’re marketing budgets are too big if you can waste so much
A bit harsh? Certainly. It is all part of the growing pains of embracing online channels of distribution and marketing. But it is heart breaking to see such a fantastic idea (viral Hellmann’s Squeezy campaign) be so underutilized. What’s worse, the level of effort of doing it right is no greater than doing it wrong. An online marketing consultant would have been a good investment…

Key Stages of the research cycle defined

There are 3 main online customer research stages that effects customers purchasing decisions and process.
1- Product specification research
2- Brand or product validation
3- Product short listing

Sticking with the example of a flat screen TV, bear in mind that is regardless of the product or service, these 3 phases hold true. In certain cases, products become more expensive, additional stages will apply, the segmentation becomes increasingly complex and the time factor has more importance. Understanding your customers’ research cycle is fundamental to targeted and effective online communication and online marketing mix strategy.

Stage 1: Product specification and product research:

Still using the example of Flat screen televisions products. Most customers are not tech geeks, they do not know the difference between 1080p and 1080i, most customers do not know why a 100mhz TV is better than 60mzh (clearer picture during action scenes, screen refreshes faster…), then you have contrast ratios, connectivity, color management engines, power consumption, weight, etc, and that is just for the TV. What about the right size of screen for your living room: Sitting distance for a 37inch screen is 2.5 meters away, 40 inches is 3 to 3.5 meters and so on… Product specifications research and education phase is just this.
Brand exposure at this level is Low to Medium. Well get back to this in a later post.

Types of websites used at this point of the customer research cycle: General electronics / gadget blogs, technology guides and reference sites: CNet TV guide, Tesco Buying guide and niche sites such as Home Cinema choice. Then specific component or technology questions arise, like what is HDMI? Answered using sites such as: About.com, or How stuff works. Comparison sites and brand sites can appear at this stage but carry less weight depending on the educational content they hold.
End result of Stage 1: Core product specifications and requirements are pretty much set. Brand selection and chosen retailer is by no means set at this point.

Stage 2: Mapping products and brands to specifications:

In Stage 2, customers have defined the required key features and specifications of the product or service they want to buy. Customers have seen tons of products and brands advertised during the initial research stage 1. Stage2 is the time to start finding which one of the products and brands matches the selected requirements. At this point some of the products and brands that have come across during phase 1 will somewhat influence stage 2 but the consumer will not be limited to those.

3 types of websites will be used in the mapping stages:

A- Review site: consumer reviews of various products meeting the key shortlisted requirements
B- Meta engines and comparison websites
C- Branded websites

The final list will yield a combination of definitive products that need to appear in his shortlist, others that should or could appear, and a small list of alternate products. At this stage brand and pricing are still secondary, influential but secondary due to the “Stage 2 break”. Lets not forget that budget has in fact had an influence, but budgets are flexible, that is why we rarely buy the bottom of the range products or the cheapest no name brand TV.

What is the “stage 2 break”? This is a fundamental part of the research cycle. We all have it. It can be short or last forever, but it is the time that separates stages 2 and 3. It is the Spike Lee phase of “doin’ the right thing”. During this break and it is an actual break in the time continuum, your potential buyer will digest his list before he shortlist by:

A- Taking time off the search to think about his list, it can last the time of cigarette break to weeks
B- Validate his list and requirements with friends that have had a similar purchase experience
C- Talks to family members that influence financial decisions or that are effected by the expense
D- Use offline material to back up his online selection such as magazines
E- Search for additional reviews and advice

Stage 3- Product and brand short listing

After the stage 2 break a selection of 2 to 3 products will be made. Pricing and brand are enormous at this stage in getting to the final 3. To reach the winning podium, for similar or equivalent products the strength of the “top of mind” position is critical. Being top of mind means being the supplier or brand that comes first to mind. We will have a separate post on “making the top of mind” at a later date.

The key sites used here at stage 3:

1- Branded websites. Remember that it does not mean that the actual brand site will be used for the purchase. But it is a validation of the choice, benchmark for pricing and getting peripheral information such as manufactures standard guarantees, etc.
2- Search engines with an increased role of PPC
3- Comparison engines: Playing the role of both retailer search and price validation
Yes, search engines where used in prior stages, but it is in this stage that the likes of Pay Per Click advertising has its greatest effect and its highest return. In the prior stages natural search results, synonym to unbiased results, took precedent over paid for ads in search results. In stage 3 PPC click through rates are far greater and ROI shoots through the roof.
Now the actual purchase is around the corner. Often it will happen within stage 3, but in more complex products such as travel another break will occur, a last phone call to the wife to make sure that the final decision is the right one.

Knowing Your customers “Research cycle”

Have you ever wondered how customers end up finding your website and buying your products?
The typical simplistic and even naive answer is “Google”. But maybe you’re right, but if your product or service is a medium to high involvement purchase, then you are wrong… well partially.
Other than certain impulse buys, today’s customers are educated researchers. The higher the involvement in the purchase, the more important a purchase is, the longer and more complex the research cycle is going to be and the more stages your customer will go through.

So what is the customer research cycle?

The online customer research cycle are the stages a customer goes through to find the product or service they want to buy. More specifically, it is the types and number of websites that will lead them to their final purchase. The cycle includes different clusters of websites, different types of information research at different stages in the cycle. This can be divided 3 key phases with varying lengths.

Wow, seems complex; but it really isn’t. This is essential at building your online marketing mix and setting your distribution strategy.

Lets take a simple retail example, a flat screen TV.
Firstly, a New flat screen TV is no small purchase, it is a medium to high involvement purchase as it is expensive and is not easily changed if the purchase is the wrong one.

The 3 stages a potential consumer would go through would be:

1- TV specification research
2- Brand short listing
3- Price search per Brand shortlisted
3*- (optional) Retailer selection as for some price isn’t everything
= Purchase