Does Online Advertising Work?
Where does your message best get seen?
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
Free Tip: Invest in cable management.
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…
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…
Why America isn’t the bad guy on the Internet
The grass isn't always greener on the other side.
If you use the internet for leisure, do business on the internet for profit, or count on the internet to spread your message, you are at a disadvantage if you are not doing so in America.
There, I said it.
That wasn’t meant as a slight to our friends and colleagues abroad. I don’t mean this as an attack on any one country or continent. Rather, I’m simply challenging the assertion that the United States is somehow the bad guy when it comes to freedom of speech on the web. I read countless stories that argue that sites that are critical of the government, large corporations, industries, political figures, etc., should host offshore in Canada or Europe because their sites are simply unsafe in the U.S.
This is little more than classic FUD.
Among bloggers, particularly in the tech world, the Digital Millenium Copyright Act (DMCA) is loathed for its supposed coziness with the recording industry and the MPAA, among other content organizations. As a consumer, and as a geek, I personally share a lot of the same concerns and frustrations other users do when it comes to the principles of fair use. Believe me when I say I find DRM as annoying and intrusive as everybody else does. I also can see plainly that the “anti-circumvention” aspects of the DMCA are genuinely bad for consumers.
But the bigger picture here is that significant portions of this law, particularly Article II as it pertains to our industry, are actually well written. The DMCA isn’t perfect, it does a lot of annoying things but it also does a lot to protect the rights of ISP’s, online services, publishers, and users alike.
More after the jump.
Part 5. Be Open
This is the final entry in a 5 part series: Big Picture Ideas for Small Businesses.
Transparency Is Important
My previous post was on buzzwords, those groan-inducing terms that often do little more than spread hype without actually describing substance. The argument I tried to make was that buzzwords were, in some limited cases and when taken with extreme grains of salt, could actually be utilized as thermometers for how to craft a marketing message.
However, I know that doesn’t make them any less annoying. The irony of ending this series with a post on “openness” is not lost on me because as far as technology goes the concept is almost as cliché as the term “multimedia” was in the 90’s.
With that being said, being open truly is an incredible asset to any organization, and while it may not make sense in the literal concept for every business out there, it’s principles are universal and should be installed where possible.
Part 3. Find Feedback Before It Finds You
This is part 3 in a 5 part series: Big Picture Ideas for Small Businesses.
Just because it's unpleasant does not make it unnecessary.
In Part 1 of this series, we talked about how important it was to keep an eye on and maintain your reputation online. Keeping an eye on what is said about you on the internet is not particularly elegant, but it’s a frank necessity in a world of ubiquitous real time news.
With that in mind, ignoring negativity is no solution either, gathering feedback is as important to running your business as any other business intelligence. The question is, how do you gather useful feedback without annoying your customers?
Part 2. Don’t Cheapen Your Product
This is part 2 in a 5 part series: Big Picture Ideas for Small Businesses.
Perceived Value
Pricing is a touchy subject. It dictates your marketing strategy, your target demographics, payroll, staffing, and day-to-day expenses. It’s what brings revenue into your company and what crafts an image outside of it.
Whatever you’re asking the customer to spend, there is one particular rule of thumb that every business should abide by; Don’t Cheapen Your Product. I’m not necessarily talking about price, which can and probably will fluctuate over time. More accurately, I’m talking about perceived value or how much a customer thinks your product is actually worth, irrespective of price.
Omega watches have a high perceived value because there is an expectation surrounding their craftsmanship that precedes their name. The price is set accordingly, and the brand being around for 150 years is a testament to that. Another example is Linux, the free and open-source operating system whose kernel was created by Linus Torvalds in 1991. Despite being completely free, Linux has a tremendously high perceived value; so much so that corporations ranging from IBM to Novell have embraced it as a cornerstone of their respective business models.
So, how do you avoid a low perceived value? Here are two general cues to help you streamline and communicate the value of your product or service in an age where competition can come from anywhere.
Read more
Part 1: Obsess About Your Reputation
This is part 1 in a 5 part series: Big Picture Ideas for Small Businesses.
He Said, She Said
Your reputation is one of the most critical aspects of your business. It’s what lends credibility to your marketing, weight and value to your product, and it provides status in competitive industries.
Maintaining a good reputation sounds really easy. After all, shouldn’t providing good service, good support, and having a lively presence in your industry be enough to keep your company in the good graces of consumers? Perhaps it should, but as always, reality is a bit more complicated. Here are a few tips designed to make managing your company’s identity online more efficient.
1. You Need to Try
Having a presence on Twitter and Googling your company’s name twice a day will not do much in the long term to keep you afloat. You have to look at the experiences of your clients and customers in order to get a better idea. Elicit feedback wherever possible (more on that in an upcoming post) and make sure all of your promises, whether they be features in a product or a verbal agreement to a client or colleague, are actionable. Nothing ruins a relationship more than a broken promise.
2. Turn Repeat Customers into Something More
Having a repeat customer is great, but it’s not special. Remember, that’s what is supposed to happen. Celebrating small victories is ok, but focusing your energy on turning repeat customers into mavens or promoters is far more valuable. Having a great product is fantastic, but having a great customer who helps you sell your great product is even better.
Affiliate programs can help by offering a financial incentive while healthy referral rates can entice customers into bringing in friends and colleagues. However, the most important part of utilizing loyal customers is simply having a robust product line at a good price.
3. Don’t Feed the Trolls, But…
A few years ago, a negative blogpost could, in most cases, be easily ignored. But today, in a world of real time news, where people make money on the aggregation of information, less-honest folks could easily turn negative stories about your business into their business model.
It’s up to you to pick your battles. You have to be able to distinguish between situations that deserve the time needed to make things right from classic internet trolling. As a rule of thumb, never embroil yourself or your company into a flame war online. You will never win that fight as your opponent does not need to be fair or civil.
However, you can’t ignore published negativity either. If there is truth to a particular situation, you now have a public way to turn a bad experience into a good one, to repair the relationship between this customer and your company. This can be very useful feedback.
If a negative situation is posted in an area where your company has a consistent presence, say an influential forum or blog, you may want to consider clarifying your company’s stance publicly if the charges are particularly egregious.
This kind of situation, as with any communication online, should be carefully considered. Remember that these stories are indexed by search engines, posted to high traffic link farm blogs, and are repeatedly regurgitated by traffic machines all over the web…it’s very easy to lose control of your image this way. You can’t always ignore these charges, but you don’t want to validate trolls either.
4. Get Involved
Better Business Bureau, Chambers of Commerce, Boards of Trade, and even larger industry trade organizations can all be valuable assets to your company. Being seen, and understood, as a local information resource is just as important as getting new business. If you’re the guy or gal your neighbors can count on, then they might be more willing to drop your company’s name the next time they shuffle through their rolodex.
What do you think? How do you manage the reputation of you and your business? Let us know in the comments, on Facebook, or on Twitter/Friendfeed!
Stay tuned to The ServInt Source for our next tip, Don’t Cheapen Your Product, soon!
Photo by Plug 1.
Coming Soon: 5 Big Picture Ideas for Small Businesses
Mike Arrington and Jason Calicanis at TechCrunch50
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.
An Unlimited Credibility Gap
To Infinity and Beyond?
Years ago, the usual stomping grounds for those of us in the hosting industry took an interesting turn as shady fly-by-night hosting providers started using the term ‘unlimited’ to describe their product plans.
These companies offered ‘unlimited’ bandwidth or ‘unlimited’ disk space as an enticement for customers to buy their products. There was a strong negative reaction within the hosting community and a sincere attempt among responsible hosts to make it known that ‘unlimited’ plans lacked credibility.
Last week it was announced that 1and1, an industry peer who I like and respect, has joined Verio, another one of the good guys, in touting ‘unlimited’ hosting plans.
I thought we had learned better.
