Demystifying Internet Marketing - Three Steps To Increasing Sales

by Judy Johnson

Imagine a billion people, which is about the number of Internet users in the world in 2007. You are looking for customers for your company, which offers surfing lessons in California and Costa Rica, from among this billion. How do you find them, or - perhaps a better question - how do they find you?

OPTION 1 - Traditional marketing; which involves advertising in publications and distributing flyers for your service, and hoping to find people who want to attend surf camp. It's expensive, and like finding a needle in a haystack.

OPTION 2 - Internet Marketing, in which people wanting to find a surf camp type "surf school" or "surf lessons" into Google and find www.surfschool.net on page 1 of their search results. They click on the link, like what they see on the Web site and register online or give the company a call.

1500% Sales Increase in Three Years

Rick Walker, president of Corky Carroll's Surf School, started using Internet Marketing in 2002. "Before using search engine optimization (SEO) we were selling about 12 of our high-margin, one-week learn-to-surf in Costa Rica packages per year. In the first year of implementing SEO, our Costa Rica business quadrupled, the second year it doubled again, and the third year it even doubled from that, for a three-year increase of over 1500%." The cost of Rick's SEO service? About $500 a month.

Internet Advertising - Lower Cost per Sales Lead

Corky Carroll's Surf School is one of the companies fueling the meteoric rise in Internet Marketing, which grabbed $15B in U.S. advertising dollars in 2006, exceeding 5% of total media placement revenue for the first time and an increase of 33% over 2005 (Interactive Advertising Bureau).

Internet advertising is growing so quickly because it's much more cost effective than traditional advertising in most circumstances. Piper Jaffray & Co., a leading market analyst firm, estimates that the cost per lead for traditional marketing channels is $9.94 for direct mail and $1.18 for Yellow Pages , while for Internet advertising it is $2.00 for banner ads, $0.55 for email marketing, and $0.45 for search engine marketing.

The advertising spend is driven by the growth in Internet usage, up 10% from December 2005 to December 2006 (comScore Networks), with search being the largest area of gain, followed by multimedia (video and music), community (MySpace, Face Book), email and games.

It's important for small companies not to be intimidated by these large numbers, because the key components of Internet Marketing apply to both small businesses, such as Corky Carroll's Surf School, and to giants of the Internet like Best Buy and Land's End. This article presents an introduction to Internet Marketing that you can apply to your business.

Internet Marketing as a marketing discipline is less than 15 years old, and uses much more sophisticated technology than traditional marketing, but the programs rely on the same three basic marketing activities, which I call:

1. Get 'em
2. Keep 'em
3. Sell 'em

Get 'Em - Help Prospects Find Your Website

Over 73% of all Web sites are found through search engines (Forrester Research). The number of searches is staggering; there were more than 6 billion searches in the U.S. in the single month of December, 2006. Google accounted for 67% of all queries worldwide in April, 2007 (Nielsen/NetRatings.com), up 20 points in the past two years, while Yahoo has tumbled to 19% and msn to 8%.

There are many options in Internet advertising - banner advertising, search engine marketing, email marketing lists, and specialty programs like viral marketing campaigns, blogging and social networking promotions. Banner advertising was the first option to be adopted, as the concept of print advertising was moved over to the new medium of the Internet media. But in recent years, search engine marketing has gained the top position in advertising spend, and that's a good place for businesses to start their lead generation campaigns.

Two Terms You Should Know - PPC and SEO

Search engine marketing works because it is the result of someone taking the effort to type in a search term, such as "surf school," which means that person is inherently interested in the topic. Therefore, the sales lead is much more qualified than one "touched" by direct mail, or even banner advertising or email marketing, where the person has not initiated a search for information. There are two forms of search engine marketing: pay-per-click (PPC) advertising and "natural" or "organic" search engine optimization (SEO).

PPC is paid advertising. Advertisers select specific keyword phrases, decide how much they want to bid for each keyword phrase on each search engine, and pay the search engine each time someone clicks on that word in the "Sponsored Link" section of Google and other search engines. The more clicks on an advertiser's Web site link, the more the advertiser pays, which can lead to "click fraud" in which your competitors, or Web sites that are paid to host PPC ads, might be clicking on your links themselves and driving up your costs. Click fraud rates are estimated to be as high as 30%, a number strongly disputed by Google, which pegs the number at around 0.2%.

SEO is the science, and art, of getting a Web site ranked high in Google and other search engines by a combination of high technology and content techniques. Web sites listed in the regular pages of search engine results have a conversion rate about four times higher than in the sponsored (PPC) section, for the same reason that people view paid ads with more skepticism than personal referral. SEO firms tend to charge a fixed fee regardless of the number of hits on your Web site, which makes budgeting more predictable. Fees start as low as $500 a month and require no changes to the Web site, making SEO typically the best value of all Internet advertising options.

Each of these two search engine marketing techniques has advantages and disadvantages; companies often start with SEO for the biggest "bang for buck" and later add PPC to get even more sales leads.

Keep 'Em - Can Your Web Site Hold Their Interest?

Once a lead comes to your site, via search engine marketing or other lead generation techniques, it's up to the Web site to keep them long enough to trigger an action that establishes a relationship with your company. The bar keeps raising for Web sites; four years ago, simply having a Web site may have been good enough to trigger an action, but now Web sites need to be much more compelling in content, navigation, and use of multiple media such as flash movies and embedded videos.

Sell 'Em - The Conversion

Too often, companies don't spend enough time deciding what action they want people to take when they get to the Web site, or think about how to make that action as compelling as possible.

Do you know how many people view your Web site in a month, and what percentage of them are "converted" (take the action that you desire, such as filling out a form for additional information or ordering a product)? As a rule of thumb, conversion rates from search engine marketing are in the range of 2% to 4%, but targets vary widely depending on the conversion activity. Downloading a free video game would have a much higher rate than, say, signing up for a one-week surfing trip to Costa Rica.

75% Close Rate

A safety and environmental consulting firm to auto dealerships recently started using SEO; within three months the company had gotten five times as many leads from the Web as they had received in the preceding two years. Even better, the Web-generated leads have a 75% close rate, which is four times the rate of face-to-face selling. Why? Prospects have pre-qualified themselves in a very specific service area by the time they type "automobile dealer safety consulting" into the search engine. The company Web site is credible and complete enough to encourage prospects to call the company, where sales personnel quickly close the deals.

An Integrated Internet Marketing Plan

The key to increasing sales through Internet Marketing is to have an end-to-end plan for getting, keeping, and selling prospects, weighing the many different tools and programs that are available.

Internet Marketing can provide more leads and sales at a lower cost than traditional marketing because of the targeted, opt-in nature of the Internet. There is a window of opportunity to seize business using these new techniques and strategies.

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