Does Online Advertising Work?

Just about every company worth its salt has some sort of online advertising component as part of its marketing budget. With the ubiquity and ease of use of platforms such as Google’s Adwords and Facebook ads, online marketing has truly become an accessible avenue for a lot of novice advertisers.

But there’s another question that has nagged advertisers in all mediums for as long as there has been marketing, does it work?

Online advertising, whether it’s in the form of a banner ad or text ad, seems inherently impersonal. You’re creating and placing ads that are viewed by nameless, faceless people who could literally be anywhere in the world…the task to reach them seems daunting doesn’t it?

What a lot of people forget is that this is exactly the same with all advertising, regardless of the medium. You don’t really know who’s looking at an ad on a billboard, or who is listening to the radio, or who is watching your commercial on television. Sure, there are demographic studies you could perform that could help you make intelligent guesses, but the truth is that data is useless if your product has a narrow or hyper-competitive market. In this respect webhosting is an excellent example, as costs per click (CPC’s) for popular keywords in our industry regularly hit the $25 mark in Google Adwords, the most popular ad network online by far.

comScore, a tech marketing analytics firm and a great source of genuinely interesting internet marketing info has performed a spate of studies recently that bring up some great points on this very topic.

In August, the firm released the findings of a study it conducted with dunnhumbyUSA that focused on the difference between television and online advertising. You can checkout a detailed press release about the study here, but I’ll do my best to summarize the findings.

The two firms used the example of consumer packaged goods, things such as food and snacks, to test whether online advertising actually worked. By tracking the buying habits of thousands of shoppers using their supermarket discount cards the firm was able to obtain fascinating, and to some extent unexpected results.

The study found that, in a sample size of roughly 200,000 shoppers, the brands who were exposed to consumers via ads on the web saw a 9% sales lift over a three month period with 80% of the campaigns showing a statistical increase. Those exposed through television ads saw an 8% sales lift over twelve months with only 36% of the campaigns showing a statistical increase. This is staggering data, it means nearly 1 in 10 consumers will change their buying habits in the affirmative after being exposed to an ad online and in a very short amount of time as well.

Of course, there are plenty of things to take issue with, the study doesn’t comment on the frequency of ad delivery or what percentage of ads were static vs flash, but it does at least validate the concerns of many advertisers out there.

What’s your take on the status quo in online advertising? Let us know in the comments, on our Facebook page, and on Twitter.

Photo by kevindooley.

Data Centers and Your Hosting Business

The data center is the most important tool in a web host’s arsenal.

That might sound painfully obvious, and it is, but for those looking to get into this industry it’s an important item to remember. Competitors brag about which bits of software they use to push product out the door but they often forget to mention the necessity of maintaining a powerful, scaleable, stay-in-business-able data center to actually store that information.

After our most recent expansion into ServInt LA, I thought I’d share a few insights into the choices we had to make when building our infrastructure to give folks a better understanding of our corporate goals as well as offer advice to those looking to get into the hosting biz.

Here goes.

More after the jump…

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Yup, We’ll Pay for Your Hosting…

I have had the opportunity over the past two weeks to carry the news of ServInt’s LA launch to several well known tradeshows that are popular with our clients. Last week I attended both the PubCon and DevConnections conferences in Las Vegas. This week I’ll be at both Interop and Web 2.0 Expo in New York City. I’ve already got to meet a number of clients face to face, which is always fun. I’m going to meet more this week and I can’t wait! I love to hear how our products are being used to build new companies, and I like to hear feedback of all kinds directly from our customers. It’s the way we grow and improve.

I was surprised to have one particular conversation with multiple people, on something I thought was fairly common knowledge. It made me want to get a blog post out as quickly as possible.

More after the jump…

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Coming Soon: 5 Big Picture Ideas for Small Businesses

It seems kind of obvious right?

Any business, particularly small ones, should offer products and services that solve a problem and that can be realistically deployed. Provided you do so for a reasonable price, you’ll make money and grow your business that way.

A few days ago, RedBeacon.com, a startup based out of San Meteo, was declared the winner of this year’s TechCrunch50. Their product is a really interesting idea; it’s essentially a mashup of Yelp’s local business search and OpenTable-style business participation.

Users type in the service they are looking for and what price they’d like to pay, ‘plumber’ for instance, then they’ll see a series of local plumbers who bid to provide the service to you so you get the best price. For those of us that loathe the phone book and calling for quotes in the Yellowpages, this is a really refreshing way to do things and it fits in neatly with what any successful small business does day to day.

• RedBeacon solves a ubiquitous, genuine problem – getting competitive quotes from local contractors

• It has a low cost of entry for the consumer (in this case, Free)

• It has an innovative, low pressure quote mechanism for the service provider

Feedback is immediate and easily understood, if you aren’t chosen to provide the service, then you need to take a second look at your pricing or your reputation. That kind of immediate information is incredibly valuable.

On the web, this isn’t as cut and dry. Your competition isn’t necessarily nearby, and you’re competing for revenue against thousands of other small businesses many of which have no qualms with making disingenuous claims to make the sale.

So how do you set yourself apart from the masses?

Over the next few days, I’ll be posting a 5 part series called Big Picture Ideas for Small Businesses. These are largely abstract concepts that successful companies have implemented that can help guide the decisions you make. I say it all the time, people should work ON their business more than they work IN their business, these posts will be a way to hopefully start a larger conversation around the mechanisms behind a successful business.

The first post, titled “Obsess About Your Reputation“, will go live today.

As always, feedback is appreciated! Become a fan of ServInt on Facebook, follow us on Twitter/Friendfeed, and tell us how you feel in the comments!

Photo via the official TechCrunch50 Flickr pool.

How To Grow Your Business With ServInt’s Affiliate Program (and others too!)

At HostingCon earlier this month, we received some excellent feedback regarding our affiliate program that I thought I’d share with you and expand upon.

It seems, from what I can gather, that ServInt’s affiliate program is great from a feature perspective (our payout is currently at 100% which is, and I’m not just saying this because I work here, absurdly awesome) but could use a bit more hand holding for new users.  I thought I’d do a little hand holding for those who have been curious about how to take part in ServInt’s affiliate program and earn free hosting!

First let’s investigate some of the jargon involved in affiliate programs and affiliate marketing.

Campaign: A campaign is simply a collection of ads that you want to run at any given time.  For example, let’s say you wanted to dedicate a week on your site to celebrating Earth Day and green causes, products, and services.  ServInt has several ads with an eco-friendly theme.  You could create a campaign that would allow you to aggregate all of your eco related ads together for easier perusal.

Clickthrough: A clickthrough is exactly what it sounds like, the act of clicking an ad link through for more information.  These are measured in ServInt’s customer portal, similar to other measuring tools such as Google Analytics.  A clickthrough does not necessarily mean anyone purchased a product (i.e. a conversion, more on that later), and thus it does not necessarily mean you will receive a commission.  It is an important tool regardless as it let’s you know what ads are more popular than others and in what locations might they be more effective.

Conversion: A conversion happens when a clickthrough results in a sale.  The ad and click has just been “converted” into revenue.

Most affiliate programs, including ServInt’s, have some form of “Earning’s Pending” metric or measurement as well as an “Earning’s Paid” metric.  This allows you to see how many credits you have earned, and how many credits have actually been deposited to your account.

Once a campaign is created, you can create ads for that campaign.  Here is a picture of ServInt’s implementation.

Clicking on Manage Campaigns allows you to create a campaign.

After a campaign is created, clicking on Manage Ads let’s you create ads within a campaign.

With the creation of each ad, you have the opportunity to choose from dozens and dozens of banner or text ads.  Once you select a banner ad, a code is generated that includes a link to the flash or photo banner and you’re set!

I, however, wanted to try something a little bit different. I chose to make a text ad and rather than paste the entire code as-is, I removed the html tags leaving only the following url, minus quotes.

“http://www.servint.net/index.php?refid=CDE152400365″

That URL is all that’s needed to generate clickthroughs and conversions. You could paste that into a URL shortener like bit.ly or tr.im for easy Twitter and Facebook integration, or you could embed it into a link on a blog or forum.

Every link, and every conversion, counts.

Now, there are certainly some ethical concerns to iron out. Neither ServInt, nor yourself, want to be seen as simple shills. Being transparent about an affiliate link is a must, but when these links are used in ways that genuinely benefit people, there is no problem with receiving credit for an Affiliate referral and thus subsidizing your web hosting.

The key to our affiliate program is simple, you can effectively have your entire site(s) hosted for free by earning affiliate commissions if you so choose. Having the backbone of your business, i.e. your web hosting, financially covered allows you to grow faster AND it helps you invest in the areas of your bread and butter that may have been in neglect before.

Work ON your business, not IN it.

Any other successful tips on Affiliate Programs, ServInt’s or others even?

Let me know in the comments, on Twitter @Servint, or on Facebook!

VPS: 6 years On All 6 Cylinders

In all the hullabaloo of HostingCon events this week, I nearly forgot that yesterday was the 6-year anniversary of ServInt’s VPS offerings. Passing that landmark day there was fitting. A lot of the folks we partnered with to create our VPS products were there, particularly Parallels, and it’s an excellent reminder of just how far we’ve come as a provider as well as a company.

ServInt has always considered itself a managed hosting provider first, with the vehicles we actually use to deliver those services an important concern, but ultimately just a technological envelope. We learned very early on that the most important part of a company is its people and we’ve been really, really lucky since then with our efforts to attract great people. VPS technology, and more specifically Virtuozzo, has been very good to us and we’ve been able to create powerful, unique products that have evolved immensely over the years.

There are a lot of really great things happening in hosting right now. We now have viable, virtualized alternatives to dedicated servers such as our own SuperVPS line, pairing the speed and control expected from a dedicated box with the reliability and scalability of a VPS. Cloud is on the horizon in some form or another, promising new ways to deliver content and store data and with it will come a new wave of entrepreneurship and a pay-as-you-go business model that is fueling a new generation of startups and industry leaders. A lot of this hasn’t come to fruition but it will be great to be a part of this industry as we all figure it out.

6 years ago, we had no idea what the industry would hold for us. Who would have thought that an online bookstore would become one of the most progressive cloud storage companies in the world, or that a small Russian software development firm would build the technological backbone of our most popular product?

So in 2015, when we’re driving our flying cars to work and scarfing down Jetsons-style breakfast tablets, who knows what will be fueling the internet?

I for one, can’t wait to find out!

You’re Hosted By…Who?

I remember a day when you needed certain qualifications to run a company.  You needed a track record in business, the ability to grease palms and sell your ideas, and most importantly you needed a business plan!  My how times have changed.  Today there seem to be hundreds of new hosting companies popping up around the world every day.

Who is behind them?  What is their history?  What is their future?

To put some perspective on things, I started ServInt in February of 1995.  I spent nearly a year prior to that planning to start the business.  A great friend of mine at the time used to spend hours each day discussing it with me.  Many other friends would provide a nice brainstorming group.  I had several meetings with folks from the SBA, various business professors at my university, and a number of business leaders I was fortunate enough to have access to.  The first check ServInt ever wrote was to a lawyer and the next meeting I had was with an accountant.  Then, I ran back to the business leaders for a while longer until I wrapped up my nearly 100 page business plan.  All that in 1995 with little to no direct competition.  All that, and still miles away from what many businesses in other industries had done at the time.

Now back to present day.  You’ve picked your hosting provider from a seemingly endless list of companies.  They have a crazy deal — check — amazing price — check — specs look good — check — and they have an AJAXy website with lots to play with.  You’re sold!

But who on earth is behind that company?  Downloading a slick website template and knowing how to lease a dedicated server somewhere with Parallels running on it doesn’t translate to knowing how to run a business.  These companies are usually motivated by the thought of a quick buck, fueling the false conception that the seemingly low barriers to entry in the hosting space translate to running a hosting business, and the false conception that success will be easy and quick to follow.  Business is competition, just like any other.  My son knows how to ride a bike, but he’s not itching to enter the Tour de France.

Choosing a hosting provider should be a major decision.  You should want a provider you can stay with for a long time, that you can grow with, and one who will grow with you.  You want a provider who has been around a while–or to make me seem less biased, one who is run by people who have a proven track record.  You should also choose a provider who can handle problems effectively.  Every provider is vulnerable to problems, but not every provider has the mettle to handle them efficiently and decisively.

So when you go off to the budget host, the new start-up that lacks a business plan or a solid management team, and you get starry-eyed at the “deal” they’re offering, and you forget to do your research and find a solid, reputable, trustworthy brand to do business with, don’t blame them when your site goes down, or when the provider disappears.  Blame yourself.

After all, on the internet, there are a thousand ways to say “I told you so”.

Photo used and altered under Creative Commons License, courtesy of flickr user random dude.

Tips for Hosters #1: Agency and The DMCA

A large number of our clients are hosting companies themselves – people who take our hosting services and resell them in one capacity or another. One of our most popular resources is ServInt’s private customer forums. In there, providers can look for tips on what others are doing, what seems to work well and what to avoid. Candid discussions that people wouldn’t feel comfortable having in public can occur within our private forum, which is nice.

Over the years, our forums have become filled with helpful tips for providers – things to help them as they build their businesses. I thought it might be nice to periodically share a few tips over here in the blog.

Today we’ll start with a short and easy one – something that may be common knowledge for some but that could prove invaluable to those unfamiliar with it.

Go protect your U.S. rights under the Digital Millenium Copyright Act (DMCA) by setting up your designated agency here:

http://www.copyright.gov/onlinesp/

No matter what you host, IF you host it is likely that you will one day experience a copyright complaint about a customer. By establishing your agency, and then learning DMCA notice and takedown procedures, you are equipping yourself with the tools necessary to deal with problems should they arise. By following the link provided here, reading and following the procedures detailed, you will have laid the foundation to address copyright problems, should they arise, swiftly and legally.

This is just a quick tip, providing one important piece of dealing with the potential administrative issues that can arise when you are involved in U.S. based hosting. This is not intended to be formal legal advice. If you don’t fully understand your rights and obligations under the law, contact a lawyer. All I’m saying here is thay if you’re a hoster and you haven’t considered your legal obligations regarding copyright infringement, take a moment to read about ISP obligations under the DMCA, and make sure to set up your agency.

All the best,

Christian