Online Marketing - internet marketing - online strategy - websites

Putting together an online marketing plan involves a lot of components and one to consider is your estimated return on investment. Whether you are agency-side writing a plan for another company, or company-side writing or receiving that plan, ROI will often be the factor that influences whether the plan gets implemented.

So Why is ROI Important?
ROI will provide an indication of what the estimated return will be on your online marketing spend. An ROI calculation will often be based on the expected response rates for activity which then depending on your organisation, can often be extrapolated to predict some type of financial return.
Without some indication of the potential success of your campaign many organisations will hesitate to commit budget to it. In addition to this, calculating ROI will also let you predict your response rates and therefore can influence the amount you need to spend in order to get the required results.

What ROI Figures are Important?
ROI will often mean different things to different organisations and the key measures will depend on what stage your organisation is at (eg. Start up, established) as well as what the objectives of your online marketing are (eg. Traffic driving, sales, sign ups etc). Some typical figures that will be in ROI calculations include:
• Amount of traffic to the website
• Reach or visibility of a campaign
• Competition/survey entries
• New database registrations
• Product sales
• Offline numbers such as visitors to a store, attendance at an event etc.
Some of these numbers are easier to estimate than others and the further down the sales process you are trying to go, the more information you will require about existing customer processes.

How is ROI Calculated?
The measurability of the online medium gives us the opportunity to estimate response rates based on industry standards and past campaign experience. This data needs to be compiled together with your businesses current online statistics in order to make some assumptions – such as, “if we drive 10,000 people to the website, how many of them can we expect to register”. By tracking and documenting your current conversion rates for these types of activities, you will have a knowledge base to assist your ROI calculations.

Calculating ROI Per Tactic
Each online marketing tactic such as search, email campaigns, banner advertising etc will have their own industry standards and benchmarks which you can use in your ROI calculations. Over the next few weeks I’ll go through these tactics one by one to provide some guidance with these numbers as well as sources for relevant industry standards that you might find helpful.

Amazon aren’t the only ones making a big deal of their new electronic book reading device “The Kindle”. When it was released late in 2007, their stocks sold out in just 5 ½ hours and now they have replenished their stock and are plugging the new gadget on a large Amazon homepage spread.

I’ve checked out the Kindle product video and the letter to shareholders that gives some background on the product and I must say the device looks like it would appeal to anyone who is an avid reader. The device itself is lightweight and fairly slick (although not so much as Apple products!) and the appeal of storing up to 200 books/newspapers etc at once and paying less to buy books will be popular.

It’s a smart idea by Amazon. Not only is it a new somewhat innovating product, however the purchase of the electronic books is only available through Amazon giving them a captive market. It also evolves their business which has been largely composed on book sales so that freight becomes a non issue. Of course there are also multiple environmental benefits as well as benefits to the publishers of not having to physically print books.

So how does this compare to the other book reading products which already exist on the market? eBook tools have been available in various formats for years however I looked at a few of the newer additions to the market:

• Sony Reader
• Dymocks iLiad

The main factors with ebook devices are obviously how the book content gets onto the device, the range of books available and the relevant costs.

Amazon are definitely leading the way here with a boasted 115,000 books now available on their reader (from around $9.99) and the device itself is $399 (US$) - cheaper than the competitors.

One of the key features of the Kindle is that the books can be downloaded from anywhere using the same technology as mobile phones (not wifi) and it appears that Amazon pays for the data costs. At this stage, the device is not available to countries outside of the USA though which is why companies like Dymocks are jumping on the bandwagon locally. With all the globalisation and power of technology, it’s amazing that the country walls are up so tightly around electronic devices. First the iPhone and now this is only available to the exclusive USA market. Hopefully that will change moving forward and either way, the Kindle will be an interesting product to watch.

Do you personally know what your customer experience is like? Don’t wait until you have a complaint, make it part of a schedule for you to randomly test your online sales process regularly (all the way through to fulfillment). Here is a good reason why…

I recently ordered a book online. I wanted it as a present for a friend and I needed in about 2 weeks. Given it wasn’t urgent, I visited one of the big name local bookshops online, found the book I wanted and ordered it online. The online process was smooth with no hiccups.

I received a confirmation email the day of my order (which incidentally was 19th March). The email was pretty to the point, it confirmed the order and advised that the product “usually ships in 10 days”. The email wasn’t very professional though with the from name of “Webloginau” and the from email address was nothing to do with the company I ordered from.

The main problem with my order however was that 3 weeks later I hadn’t received anything in the mail and had no more communication from the company I ordered from. I checked out their order tracking online and it simply said the status was “open”. So I called the help number on my original email. I was advised that the book I ordered had not yet come into stock so it hadn’t been delivered. However the lady discovered that one of their stores had the book so she followed up and sent me an email advising that it was being transferred and I should receive it soon. That was 11 days ago.

By now, the whole reason I ordered the book (for a friend’s gift) has long passed and my book still isn’t in sight. It would have been a lot quicker for me to visit my local book shop and pick up the book in person and I have received no benefit at all from ordering from a well known bricks and mortar retailer.
All that results from this experience is an unhappy client who has to follow up multiple times to get their ordered and paid for product.

The thing with a lot of these systems is that the experience can vary greatly depending on the setup of your website, your inventory management system and your client communication. It’s not enough to test it once and assume that every client has that experience as chances are there are multiple scenarios that your customers may encounter. There are two ways to combat this. One is to have a perfect system (which no one has) however having a good inventory management system will go a long way to ensuring that goods that aren’t available, can’t be ordered. The other way is to test it regularly using different combinations so you can cover off the multiple scenarios that your customers may see.

If you want to keep up to speed with social networking trends, take a look at Hitwise’s Social Networking Report. The report has just been released and is available for free online by simply filling in a form on the Hitwise website.

Also, there has been a lot of talk lately about ways to aggregate social networks. Effectively this means providing an overview of your account and/or friends across sites like MySpace, Facebook, LinkedIn, Orkut and the like and the sites generally can pull together some summary information and updates. Here are some of the ones I have come across so far:

www.profilefly.com
www.mashable.com
www.spokeo.com
www.profilactic.com
www.socialurl.com
www.mylifebrand.com
www.dapper.net/dapplications/Snag/

Of course in order to get the full value for these, you need to be actively using more than one social network at a time and in most cases be prepared to share your log in details with these sites. Some of the sites are also in beta phase so don’t expect it all to be smooth running.

There are plenty of reviews of all of these sites out there, so rather than reinvent the wheel, I can recommend this overview.

No organisation wants people to unsubscribe from their email database HOWEVER, if someone has decided that your communications are no longer relevant to them, then the unsubscribe process needs to remain as simple as possible. People may want to unsubscribe (or update their details) for a range of reasons such as lack of relevance, changed circumstances, new email details or even simple email overload. It is at this time where you don’t want to harm your company’s reputation by putting unsubscribe barriers in place, instead you want to foster the customer relationship you already have and provide them with the high quality service they are used to.

Unfortunately there is a lot of variation in unsubscribe processes, which is largely due to the differing technology infrastructure supporting the database. However regardless of your technical setup, there are simple usability items that you can do to make the process clear and simple. Here is an example of what to do, and what not to do:

What to do:

Make the process easy by having as few steps as possible and clearly labeling options.

click on image above to see the full example

What not to do:

In this case the unsubscribe link is somewhat hidden in a few lines of text meaning a reader has to look harder than usual to locate it. The process that follows isn’t much better:

As you can see, some processes are more complicated than they need to be and often companies are oblivious that their customers are going through these processes. If you have an email newsletter or subscription email, double check your processes today.

Marketing Sherpa is a great resource for tips, stats and case studies - if you haven’t checked them out before, I strongly recommend that you visit their website and also look at their newsletter subscriptions available.

Today I downloaded a great free report on email marketing. It is called “2008 Dirty Dozen Email Newsletter Mistakes”. The report covers a range of elements including opt in, frequency and segmentation and is worth a read, even if just for a refresh. You can access Marketing Sherpa’s free reports here.

In the world of online we are used to seeing companies progress with their websites and communication as more advanced technology become available and as companies become more confident in utilising them. However unfortunately one of my favourite daily email newsletters has just taken what I consider to be a big backwards step.

I have been receiving the B&T print magazine and daily email for a few years now as it provides a good overview of what is happening in the world of advertising and marketing and usually includes a good mix of online related stories too. In the past the B&T daily email newsletter was sent as an HTML email that linked through to individual articles on the B&T website (good practice!). However this year, B&T have decided that rather than link to their website, they will link to a PDF of the stories online.

There are several negatives associated with this:

• Poor email experience - B&T have kept their email looking fairly similar to how it did previously where it shows summaries of news articles and a “more…” link to read the full article. The key problem with this is that each link in the email goes through to the same page - being the PDF. There is actually no benefit to the end user in finding the article they want to read and clicking on the more link as once they open the PDF they will have to scroll again to find the same full article.
• Poor user experience - it’s most unusual for a news article in an email to link through to a PDF so not only is the user not expecting it, however it also typically will take longer to load the PDF than it would for a html website page.
• Poor readability - it is well accepted that PDF documents were typically made for print related purposes and therefore it is not as easy to read these on screen. It is even more so if columns are used as the user is forced to scroll up and down just to read one column (instead of reading horizontally as websites are designed).
• Lack of tracking - one of the key benefits in sending HTML emails is being able to track clicks on links so that a company can see what readers are interested in reading and thus tailor future content to this demand. When linking from an email to a PDF (and particularly when all links go to the same place) B&T will lose this valuable reader information about their preferences. Not only that but their website statistics will similarly become less valuable as some of the granularity is removed.

So why would a company move to start linking to a PDF file in this day and age? I’m struggling to come up with a reason that can be justified. A new marketing manager perhaps?If you have any ideas, let me know. Check out the associated graphics below:

Current email newsletter:

PDF of articles which is linked to:

This week I was asked to assist a client in valuing their existing website. As more and more people create and sell their online businesses this topic is an important one for any web entrepreneur so I thought I would share a few of my tips.

Identifying a value for your website can depend on a number of different factors. This article will consider each of the factors you need to take into consideration for your calculation.

1. Value of Assets:
In this case I am talking about the value of any assets associated with your website. In most cases this will relate to the cost of development – or more importantly the cost of re-developing your site to the level which it is today so that it has the same technical functionality. Don’t forget this may also include your IP, your brand, the setup of databases or an online shop.

An important asset associated with your website business may also be your customer or prospect database. If you are collecting information from website visitors or members this definitely has a value and that value will depend on the currency of the data as well as what degree of segmentation and opt ins you have for that database.

2. Current Earnings:
What are the current earnings of your website? This may be revenue derived from online sales, from Google adsense, banner advertising or referral income or membership costs for example. It is important in this element to keep in mind any costs associated with these earnings too so that you have a realistic understanding of your current position.

3. Potential Earnings:
The next step is to look at the potential earnings of your website. What if you were to expand your website to include more products, more functionality, service a greater geography? Would this increase your earnings? Again what would the associated costs be to expand to this degree? Often larger companies will acquire existing online, well –performing businesses with the view to expand them so it is important to keep this consideration in mind so that you can get an idea of what the future earning potential is.

4. Traffic:
Of course any traffic coming to your site also has a value and this will depend on factors such as number and frequency of visits, referral sources (for example is your website doing really well in natural search listings), quality of traffic and session duration. If your website is currently attracting 200,000 unique visitors a month to your site, obviously the value of this site is much higher than one attracting 200 visitors a month.

5. Promotion:
The last key factor for consideration is promotion. In this case I’m not talking about regular paid marketing activities (as this would be considered a cost when looking at your current earnings), but rather any other promotional arrangements from which your site is benefiting. For example you may be receiving promotion on an associated TV program weekly. You could have a syndicated content arrangement with a high profile website meaning that you gain large amounts of traffic and referrals from that site, or you might be a key client in an affiliate program. If you are receiving any promotion which is due to a ongoing arrangement or better yet, promotion that money can’t easily buy, then that is definitely a consideration in your website’s valuation.

In Summary:
By looking at all of these key factors you will be able to break down the various components of your website in order to start calculating a valuation figure. There are a number of other online resources available to help you with this process, however beware of most of the online tools as they only consider the value of your domain based on search rankings. Here are a few articles which may be worth checking out:

http://www.stuntdubl.com/2006/02/20/website-valuation/
http://www.powerhomebiz.com/vol151/selling.htm