Morettini on Management

General Management and Marketing Advice for Software and Tech Companies

Category: Marcom

Does Pay Per Click (PPC) Advertising Still Work?

Modern PPC advertising was pioneered in 1998 by Overture who was later bought by Yahoo. It really hit it’s stride in 2000 when Google introduced the AdWords platform. I’ve been managing PPC campaigns for myself and my clients since 2003.  So while I haven’t been involved since the  very beginning, I consider myself an early adopter of PPC technology.

The Early Days

In the early days PPC was great–using it to your advantage was like putting a knife through butter. Almost independent of individual product or market, it was very effective when I first started managing PPC campaigns. Things stayed that way for several years, even as Google (as the primary PPC platform) made constant changes to their platform. I remember soon after I started using AdWords Google made one particular change to their platform: for keywords you were bidding on that fell below a certain click-thru threshold, AdWords henceforth prevented you from bidding on that keyword-FOREVER! Needless to say, they fairly quickly decided that wasn’t in their best interest and changed things yet again. But mostly it was all good for quite a while–easy to start, easy to use and with an excellent ROI in most cases. One of the reasons it worked so well was that even many sophisticated Internet users didn’t realize that “Sponsored Links” were really Ads, leading to excellent click-thru rates and a steady stream of inexpensive visitors to your website.

PPC Enters the Mainstream

As Pay-Per-Click grew rapidly due to it’s outstanding value proposition, it entered the mainstream as an important marketing method for companies large and small. This of course drove Google to prominence as one of the top tech companies in the world and created a lot of millionaires and billionaires in the process. For a while AdWords worked so well it was like printing money, not only for Google but it’s customers, the users of AdWords. For some small companies PPC not only became a mainstream marketing method but consumed the MAJORITY of their marketing budgets. But as I’ve stated many other times, once a marketing method goes mainstream it begins to falter in effectiveness. There was a long slow decline over a period of years in terms of ROI, but for many years it was still effective–so the golden goose kept growing in size.

It’s more difficult today

As I write this article, however, I believe that we may be at a point of inflection. I’ve found that in many market segments it’s become very hard to extract even a positive ROI, let alone be highly profitable . Unless you’re a large company where PPC expenses are a tiny segment of your marketing budget, or are focused on brand-building (a dubious use of PPC, imo) rather than sales–this will give you serious pause. The quality of visitor traffic has deteriorated, with time spent on site by PPC-generated traffic a fraction of Social Media or other Organically-generated traffic. Cost per click is now very high in for high-traffic keywords. Cost per conversions have risen steadily. I design campaigns using a fairly labor-intensive long-tail approach–but I have a hard time getting a positive ROI in some (but not all) market segments. I’m far from alone in this analysis, as this  New York Times article illustrates. While there are people who spend more time managing PPC campaigns than I, as I stated above I have been at it for a while and am far from a newbie, leaving me pretty comfortable with my viewpoint.

Unfortunately, I believe much of this is due to Google greed. AdWords has never been a transparent bidding system, but a “Black Box” that Google can manipulate as they please. In the past they have shown some understanding that their advertisers need to make money for Google’s own AdWords business to remain viable. But I think that the short-term quarterly profit pressures of being a public company, along with the lack of significant new revenue streams past PPC have come to bear. These factors combined with the inevitable maturing and slowdown in the growth of the Search marketplace have led the company to make changes to their platform and the black box which they may regret in the long run.  Here are a couple of examples:

  1. I’ve always utilized a best practice of rotating Ads evenly, with the belief that I am the best judge of which the best Ad for my purposes.  Google recommends optimizing which Ad to show based upon their automated algorithm, which quickly decides one Ad is best. Google’s interest is in maximizing clicks, which isn’t always in my client’s best interests. But after using this method for years Google eliminated it, forcing advertisers to utilize their automated algorithm and revert to a the highest click thru Ad after 3 months of even rotation. I noticed in checking recently the option to rotate Ads evenly indefinitely has returned–I’m sure it was because of Advertiser complaints.
  2. Another thinly-veiled, short-term money grab is the “fibbing” Google does when it provides “estimates” about what it takes to get your Ad listed on the first page. I’ve found them to be almost uniformly wildly overstated in almost all circumstances, even on very niche keywords where it appears there are no other advertisers bidding!

These are just two examples of many things I’ve seen Google do within the AdWords platform and especially in their bidding “black box” that indicate Google is acting in its own (short-term) self-interest, to the detriment of their advertiser/customers. I believe this will prove to be very short-sighted in the long run.

Combine all this with the increased competition in the PPC marketplace since it has gone mainstream as discussed above and I believe AdWords may have seen it’s best days–an ominous development for Google as a growth company. By squeezing its advertisers, the company is definitely risking killing the golden goose.

I haven’t used the Microsoft PPC platform recently so I can’t say for sure that the experience there is the same, but in the past I’ve found it to be similar.

Where does PPC fit today in the Marketing Mix

I’ve been relatively critical of PPC as a current marketing method in this article–which is a turnaround for me–I’ve always held this method in high esteem. I still believe it fits in some shape or form in most marketing budgets, but I feel the need to temper how big a role it should play. PPC retains some big advantages–there is no better way to very quickly launch a marketing campaign than PPC. You can be promoting new products, testing messaging & value propositions and exploring new market segments almost instantaneously. It’s also very measurable and therefore objective–there’s no need to throw money around with PPC, based on a measure of faith like some other marketing approaches.

But in many market segments, the ROI has degraded severely over time. As a result, it shouldn’t take up a large segment of your marketing budget unless your objective measurements indicate that it justifies such a large investment. I’ve shifted emphasis in online marketing budget recommendations to social media and behavioral/retargeting advertising (standard PPC’s close cousin). Unless you see strong ROI justification in traditional PPC investments, I’d limit my PPC exposure to  two areas:

Long term: long tail keywords that may not generate big dollars but show a reasonable ROI

Short term: new products, new market segments and messaging/value/price testing which have a limited term

That’s a quick summary of how I view Pay Per Click today.   What’s been your own experience with PPC lately? Is it a big part of your promotional budget? Do you also see it declining in performance in your market segment? Give us a heads up on your experience and post a comment below.

Follow Phil Morettini and Morettini on Management via Twitter, Facebook, LinkedIn, RSS, or the PJM Consulting Quarterly Newsletter. Contact Phil directly at info@pjmconsult.com

Save on DeliciousDigg ThisShare via email
Submit to redditSubmit to StumbleUponShare on Tumblr
2 Comments by admin on November 9, 2012
filed in B2C, Business Models, Marcom, Online Marketing, Product Marketing/Management, Promotion, SaaS, Social media
tagged , , , , , , , , , , , , , , , , ,

Is Your Tech Business Marketing or Sales Driven?

Software and hardware business are often segmented by the vertical or horizontal market they’re targeting, their technology platform, small vs. large companies and so on. One of the important ways to segment tech businesses, which isn’t often discussed, is by whether the company is sales-driven or marketing-driven in their customer acquisition strategies.

A balanced approach

Now some reading this article may ask “why wouldn’t you take a balanced approach”? Indeed, I don’t mean to suggest that either sales or marketing should be absent in the customer acquisition efforts of tech companies. There are a few scenarios that could be drawn up to support such a singular approach—but very few for sure. There are also some situations where the customer acquisition circumstances are “in between” in price, complexity, market size, etc. and you end up with a fairly balanced approach between marketing and sales. But in my experience the sales or marketing function will rise to the lead, more often than not.

Key criteria in choosing customer acquisition techniques

There are several considerations that often drive whether marketing or sales will dominate:

  • Product Complexity – This often decides whether or not a product can be truly driven to purchase by marketing or whether significant sales rep intervention will be required to close a deal. It should be noted that when product complexity is high, marketing support in the form of sales tools (examples: case studies, road map presentations by product management) will still be very important in the sales cycle. But this will generally be a sale that is driven by the sales force with marketing in a supporting role.
  • Product Price/ Typical Sale Size – The smaller the product price and typical sales size, the more likely you’ll be able to acquire customers exclusively through marketing, or in conjunction with inside sales that is largely “taking orders”. Conversely, products that cost a lot may require the extra interaction provided by an outside sales force (and the deal size also justifies the cost of the sales force).
  • Market Size – Very large markets with lots of customers are more easily and cost-effectively reached with effective marketing. A tight market with a small number of total prospects (think nuclear power plants) will usually be served almost exclusively by an outside sales force with minimal marketing intervention.
  • Use of Channels – While companies selling heavily through channels often need reps to call on the channel partners, far fewer channel reps are required than if the reps are dedicated to direct selling. Generally the heavier the use of third party channels in the customer acquisition approach, the more heavily the mix will lean toward investment in marketing.

Marketing driven keys to success

  • Adequate marketing funds – If you’re going to be marketing-driven in your customer acquisition approach, you better dedicate enough money to fund marketing programs with superior performance. To do otherwise will cripple your business.
  • An objective, data driven culture – The beauty of a marketing-driven approach is that it can take much subjectivity out the management of optimizing your customer acquisition activities. Especially in this era of highly measurable online marketing, decisions should be made on what the data says—not on the whims of the CEO or some other senior executive.
  • Excellent inside sales in support – Except for very simple, low cost products where marketing can truly drive the sale all the way to completion—these days that often means a software download, SaaS signup or physical product order—it’s still important to have an efficient (but low cost) inside sales operation supporting your marketing machine.

Sales driven keys to success

  • Great sales people – Hiring good people is so very important in every area, but when your relying on an expensive outside sales force to drive revenue—you better hire the best reps you can afford and attract.
  • Success driven comp plan – If your success depends upon them, make sure your sales reps become really happy only when the company is happy as well.
  • Good marketing support in the form of lead generation programs and sales tools – Unless you have a tiny market with obvious, easily identifiable prospects, it’s still very important to have a marketing function which generates leads as well as supplies good sales tools.

The best approach isn’t always chosen

Unfortunately, logic and situation analysis doesn’t always win out when designing a customer acquisition strategy. Usually by the time a company grows to be large, their approach is in line with what’s best for the business. Of course, your chances of growing to be a big company are reduced if you make serious errors in sales and marketing strategy. But in any event, by the time a company is big they are usually utilizing both sales and marketing heavily and in the proper balance.

Startups and early stage companies are another matter. Often the emphasis on either sales or marketing is based on the experience of the founders and senior executives. If they’ve been successful in the past and their new company has a similar focus, maybe it’s fine and their approach works again. But a problem occurs when these executives start up a very different type of company than they’ve had success with in the past. It’s human nature to fall back on what I refer to as your “common business sense”, which is formed by your personal background and past experiences. This is when you can get a misalignment between what a company needs and the approach taken in the sales & marketing mix.

Even worse still is when the customer acquisition approach develops more or less haphazardly. This can happen when the founders of a company really don’t have much functional experience in sales or marketing. This occurs somewhat frequently in software and hardware companies, as many startups are created by technical types. In these cases there may be a fairly unsophisticated approach to both sales and marketing—and whatever works early may end up dominate. For example, a sales rep is hired who has some success, so the model becomes hire a lot more reps and turn them loose without much (or any) support on the marketing side. Or an early direct email campaign or online advertising generates some sales, so money is poured into that method. Unfortunately, these may not be the best approaches strategically for the business in the long run.

That’s what I think about Sales vs. Marketing driven orientations in software and hardware companies. What do you think? Post a comment with your own opinions or stories about what drives customer acquisition in high tech companies.

Follow Phil Morettini and Morettini on Management via Twitter, Facebook, LinkedIn, RSS, or the PJM Consulting Quarterly Newsletter. Contact Phil directly at info@pjmconsult.com

Save on DeliciousDigg ThisShare via email
Submit to redditSubmit to StumbleUponShare on Tumblr
No Comments by admin on July 27, 2012
filed in Business Models, Corporate Strategy, Distribution Channels, General Management, Marcom, Online Marketing, Pricing, Product Marketing/Management, Promotion, SaaS, Startup/Early Stage
tagged , , , , , , , , , , , , , , , , , , , , , , , , ,

Social Media Marketing for B2B Tech Companies

By now, every company has grasped the importance of having a social media presence on the web. Or have they?

In discussions with potential clients and others I am actually amazed how many folks have done little or nothing in the area of social media marketing.

Why do you think this is? Some business executives immediately associate “social media” solely with consumer-oriented activities on social medial sites such as Facebook, Twitter and MySpace. You know the stereotypes that are popularly characterized by the mainstream media: pictures of wild high school parties, viral invitations to flash mobs, and inane posts about what people are having for breakfast.

But there is serious business going on in the Social Media world. The fact is that Social Media marketing has definitely become not just a mainstream activity, but a critical one. No longer are at an advantage if you are heavily using social media in your marketing mix; you are falling behind if you aren’t!

Social Media is obviously very important in B2C software and hardware marketing. Because it is less well understood, I will be focusing on B2B marketing in this article.

Blogs

A Blog is the single most important step into Social Media for a B2B tech marketer. In addition to being a great way to bring traffic directly to your site, it provides the content to use as bait for all of your other social media activities. There are almost too many benefits to list here, but let’s try a few:

  • New and high quality website content which increases SEO (search engines LOVE fresh, high quality content. This assumes a self-hosted Blog–it’s critical for your Blog to be hosted on your domain to maximize SEO benefits)
  • Direct traffic to your website
  • Fast & Easy search engine crawling and indexing due to the large number of Blog ping services, Blog indexes and Blog search engines
  • High quality backlinks from the Blog services mentioned above, as well as from happy readers who link to your Blog
  • Content you can repurpose in a number of ways such as publishing in newsletters and posting on appropriate social media sites
  • Positions your company and key employees as “thought leaders” in your category

This is just a taste of what a Blog can do for you; the uses and benefits are limited mostly by your imagination. It’s a bit of work, no doubt, but has a high return if you dedicate reasonable resources to the effort.

Linkedin

After creating your Blog, this is the second most important social media activity for a Business-to-Business technology marketer. Key employees should create a complete profile (for professional development purposes, if no other reason) and a profile for the company should also be created. But that’s just where the fun starts. Here are some additional important activities to consider:

Join and Use Groups: Other than setting up a complete and effective profile for both you and your company, the most important thing you can do is join groups. You’re allowed up to 50, and if you choose the groups well they can be a very effective segment of your online marketing efforts. Become known and respected by participating in discussions. But most importantly, post links to your Blog content, press releases, newsletters, webinars, etc. If you’ve targeted the right groups, this will create a good deal of qualified traffic to your website and other online vehicles.

Build your Network: This is the place where you want to go fast, but don’t hurry. The more people in your business segment you know, the easier it will be to market your product over a long period of time. The key is to take a long term perspective. You don’t build a network by being pushy or “all about you”. It’s like any other form of networking. Reach out not only to connect, but to actually assist those in your network. In the long run, you’ll have a stronger position and it will benefit your business.

Search for Prospects: People are listed on Linkedin that you wouldn’t find elsewhere. It’s a great place to search for both companies and high level executives that you’d like to connect with. Be very careful in your targeting efforts and try not to be too obviously sale-sy. But if you are respectful and careful, an excellent source of targeted prospects awaits you, that you can contact directly (with a premium account) or connect with through your mutual contacts.

Ask and Answer Questions: This Linkedin feature provides a great, low key way to both show off and improve your knowledge. By answering questions posted by others you can demonstrate your knowledge in a forum without having to appear to be bragging. Don’t be afraid to ask questions either; there are a great many resources out there to fill in the blanks in your current knowledge base.

Twitter

This is a great place to connect with like-minded people. As profiled time and again in the mass media, it’s also a great place to waste time. So unless you find that you can become a productive and efficient Twitter networker, make sure you don’t become addicted to tweeting. Some people love it, some hate it–what’s important is to leverage it optimally for your business. I personally don’t waste a lot of time on Twitter, but there are some folks who have dedicated a lot of time–to great effect for their business. Especially if you have more time than money for marketing, there’s a lot you can do to gain exposure and goodwill for your business here. At a minimum you should post your Blog content, press releases and other important external communications. You should also think about assigning members of key departments (PR, customer service, tech support) to Twitter, giving your users and potential customers an easy, informal way to interact with appropriate parts of your company

YouTube

Yes, Youtube! Everyone loves to go to YouTube to view that video of the 6 month old baby surfing in the bathtub while smoking a cigar (Ok, I made that up, but if you do a search you might just find it on YouTube). But it’s also a great place to post a short intro video about your product or service. You can even put up training videos to show the depth of your knowledge in a particular area, or the depth of your product or service offering. The videos are hosted on YouTube, but you link to them and feature them on your website. These videos will give you a leg up in search engine ranking as Google, et al love video content and provide it with preferential search result positions.

Facebook

Yes, use Facebook as well! Facebook is certainly not a core platform for business to business marketers. But 750 million users (and still growing like a radioactive weed) shouldn’t be ignored. So create a personal profile and company page and post your Blog content and other external communications pieces there. If nothing else, you’ll get some quality backlinks to help your SEO efforts with very little effort. Don’t waste time here, but it makes no sense to completely ignore this platform, either.

Coming Soon — Google +?

This is a real wild card that could have a big impact on the Social Media Marketing landscape. As I write this article it’s too early to tell what Google+’s ultimate impact with be on B2B social media marketing. Most people don’t yet have access. I haven’t used it yet, so I only know what I’ve read. It’s still in pre-release phase (although it seems that most things at Google are!), and the features are still being developed. But so far it appears to be off to a very promising start, with 25M users in only a few weeks of controlled beta release. Reviewers have raved about the elegance of the “Circles” feature, which allegedly makes it very easy to segregate those connected to you into logical groups, a real problem on Facebook. Of course, Google is aimed far past B2B social media with Google Plus, taking aim squarely at Facebook as a mass-market social media network. But I think this new platform also has particularly strong potential for the B2B crowd, with possible integration with tools like Google Adwords, Analytics, Apps, Docs, etc. We’ll have to wait and see where this goes, and I’ll be watching closely.

There’s certainly much more that can be written on this topic. This was just a quick look at what I think about the importance of social media marketing for B2B Software & Tech companies. For example, there are new vertical social media networks popping up every day–there may be one perfectly aligned with your market.  This is a varied and rapidly evolving topic–what are your questions or opinions? If you need help with your marketing mix or other aspects of managing your software or hardware company, please contact me at your convenience. In the meantime, post a comment to share your views on this topic and continue the discussion.

Follow Phil Morettini and Morettini on Management via Twitter, Facebook, LinkedIn, RSS, or the PJM Consulting Quarterly Newsletter. Contact Phil directly at info@pjmconsult.com

Save on DeliciousDigg ThisShare via email
Submit to redditSubmit to StumbleUponShare on Tumblr
2 Comments by admin on August 14, 2011
filed in Business Development, Marcom, Online Marketing, Product Marketing/Management, Promotion, Social media
tagged , , , , , , , , , , , , , , , , , , , , , , ,

Is SEO a Legitimate Marketing Technique?

I have definite ideas on this question. But what got my attention recently was a reference to SEO in a prime time television show (one of the legal dramas) on one of the major US networks. It went something like this:

Lawyer: “What are you concerned about?”

Client: “I’m concerned that the jury will have a negative reaction to my profession; a lot of people don’t like what I do”.

Lawyer: “What is it that you do?”

Client: “I perform search engine optimization.”

When it hits primetime TV, you know the topic has entered the consciousness of the masses. And in this case, not in a good way!

For the uninitiated, SEO is an acronym for “Search Engine Optimization.” Wikipedia defines SEO as “the process of improving the visibility of a website or a web page in search engines via the “natural” or un-paid (“organic” or “algorithmic”) search results”. This is done by various methods, but the two most important aspects are creating relevant content on your website, and gaining links to your site from outside websites.

How can this be so bad? Well, like any other form of marketing it can be taken to extremes. Because it’s so valuable to appear near the top of a search results page in a search engine like Google, some will do practically anything to make that happen. And that’s what causes the problems. Techniques that the Search Engines consider inappropriate are called “Black Hat”; the page results that are listed inappropriately are referred to as “search spam” or “SEO spam”.

All this simply means that when you type in a search phrase into Google, for instance, you are presented with a bunch of websites that aren’t appropriate for what you were looking for. I’m sure you’ve all done a search, and the top sites that pop up have absolutely no value. The results might show a poorly constructed “Directory” aimed at a particular vertical topic, but really isn’t useful except to its owner trying to get Ad clicks. Or a site stuffed with a huge number of articles–none original or written by the site owner, and sometimes even modified by computer program to make it look “original”, but in actuality making it practically unreadable to humans.

Arguments for SEO

  • It’s just a marketing technique like any other, just like Press Relations in the “real” world. Why can’t you use all the tools at your disposal to make sure that your website is visible to your target audience?
  • “White Hat” SEO techniques are above board and available to everyone. What’s wrong with writing appropriate content for your site, and requesting backlinks from other compatible sites on the web? If you do a better job than your competitors, or they don’t choose to use these methods, that’s simply you beating them in the marketplace.
  • White Hat SEO is really just an acceleration of and a focus on the very things that happen naturally for a successful company on the web: Attractive onsite and offsite content, with a large number of links to your site from other sites with a compatible focus.
  • The “Black Hats” will always be around–the only way to avoid being left in the dust by these scoundrels is to use (legitimate) SEO techniques to compete for position in the search results–or they win by default.

Arguments against SEO

  • Any technique designed ONLY to move a website up in the search engine results pages (SERPS) is by definition cheating and not legitimate.
  • SEO is a slippery slope; there really is not sharp dividing line between “white hat” and “black hat” techniques.
  • Search Engines work best without any efforts to circumvent the “natural” results; any manual intervention to change them is a distortion of the real world, and therefore inefficient for the market.
  • Buying or otherwise obtaining links that you wouldn’t get naturally is deceptive, and therefore of no value and even immoral.
  • Content stuffed with keywords simply to rank high–rather than inform–is also of no value and is ruinous to the beautiful Internet.

The irony of this controversy is that inbound marketing techniques like SEO originally held the promise to marketers of largely avoiding the negative stigma associated with more direct methods. Now, it appears that the term “SEO” has gotten a negative connation in the web marketing world, much like all direct email marketing is considered by many to be SPAM. It’s apparently gotten bad enough that the term “SEO” has completely fallen out of favor with some; “Content Marketing” and “Inbound Marketing” are two new code phrases for what really is just SEO in a repackaged form.

My view is that this is a real shame. In the email world, there are legitimate direct email marketers, offering real products and doing their best to target their offerings to interested prospects. These companies shouldn’t be lumped in with Spammers who are nearly breaking our email systems with endless numbers of fake Viagra ads. In the same way, companies using standard SEO methods to ensure their target prospects can find them, shouldn’t be thrown together with the black hats who distort search engine results while trying to make a quick buck. I realize many folks don’t make this distinction. What’s your view? Post a comment to let us know where you come down in this argument.

Follow Phil Morettini and Morettini on Management via Twitter, Facebook, LinkedIn, RSS, or the PJM Consulting Quarterly Newsletter. Contact Phil directly at info@pjmconsult.com

Save on DeliciousDigg ThisShare via email
Submit to redditSubmit to StumbleUponShare on Tumblr
7 Comments by admin on February 15, 2011
filed in B2C, Corporate Strategy, Marcom, Online Marketing, Promotion
tagged , , , , , , , , , , , , ,

Integrating Sales and Marketing at Software and Technology Companies

In some but not all tech companies the Sales and Marketing functions are managed separately. They are separate but closely related functions that some people without a strong background in either function have a tendency to confuse. Normally, there is a VP or Director heading up the Marketing department, and another VP or Director leading the Sales staff. But it is also not unusual to see a VP or Director of Sales & Marketing who leads both functions.

This all seems benign enough, so what’s the issue? The issue comes when actual revenue fails to meet the forecast–that’s when the finger-pointing usually begins. Unfortunately not meeting forecasts is a common event in technology businesses, where forecasting of new software and tech products can be particularly challenging. When that finger-pointing starts, it often breaks out first between the Marketing and Sales departments–here’s how the ensuing “discussion” might go:

SALES: “You haven’t planned products that our customers want to by. You’ve priced them too high. And those leads that you’ve spent SO MUCH money on that you are giving us aren’t qualified and are essentially worthless to us.”

MARKETING: “You’re not selling the right products as we directed, or presenting the positioning of our product line properly. All you do is try to sell on price, constantly discounting and hurting our margins. If you’d follow up on all the leads we gave you, get off of the golf course and work more than 4 hours a day, you’d be well over quota and the company would be doing fine.”

Sales folks and Marketers are different types of people, and tend to view the world differently and from their own selfish perspectives. This often nasty “discussion” as simulated above is far from uncommon, and can get pretty ugly–which can really hurt a company in trying to reach its goals. So what’s the right way to get the Sales and Marketing departments to work together as a team, avoiding all of this counter-productive ugliness?

SOLUTIONS TO REDUCE POTENTIAL CONFLICT

The VP of Sales & Marketing
One way to greatly reduce this conflict is to have a common leadership for the Sales and Marketing functions. This usually means having a VP-Sales & Marketing in your organization. If you can find the right person to fill this role, this can actually be an excellent solution. Having a single leader can go a long way toward eliminating or at least greatly reducing this conflict, assuming he has a balanced background and perspective and is fair, not favoring one department over the other.

Good people to fill this role are out there–but are very rare in my opinion. There are far more managers who have been put in the position of VP-Sales & Marketing than there are those who are well suited for the role. Most of the time you end up with a manager that understands one function well and gives short shrift to or completely screws up the other function.  You will often find this combined VP position in companies that are not “marketing-intensive”, where the sales function is the dominant aspect of the job. If the Marketing function is truly less important, a company can get by with this structure, although it usually isn’t ideal. You can read more about the issues with a VP-Sales & Marketing role in a previous article that I’ve written entitled “Big S, little m“.

CEO Demands Communication and Cooperation
If care isn’t taken, the very different personality types in sales and marketing can lead to some pretty intense conflicts. I’ve been a soldier, captain and general on both sides in this war–and let me tell you, it isn’t pretty. I’ve also (effectively) filled the role of VP-Sales & Marketing, which is a story for another day. Much like the battles between Marketing and Engineering that I’ve previously written about, I have seen this battle play out regularly in the companies that I have worked for as an employee as well as at many of my clients in eight years as a consultant at PJM Consulting. Things can get out of hand very quickly, and paralyze a company.

In many cases, the key is how the CEO handles the situation. He must go well out of his way to be a fair arbitrator in these discussions. Even the most benign comment can appear to show favor to one side in the eyes of the other.  A CEO can’t ignore or deny the problem or assume it will be handled at the VP level. It is the CEO’s responsibility to prevent, recognize and fix this problem. As a CEO you must also be careful to avoid inadvertently making decisions or setting up policies that reward or tolerate company politics.

Departmental Social Integration
Not everything can be avoided or corrected through traditional management techniques. In this situation relationships are really the key.   I recommend planning social activities which allow sales and marketing department counterparts to get to know each other as “people” outside of their project activities. Since a successful sales/marketing interface relies heavily on relationships, it’s very important to closely monitor the personal relationship between VP-Marketing and VP-Sales. Also, make sure that the VPs are monitoring the counterpart relationships below them. Ensure both VPs are open and honest with about the relationship between departments. Also watch for arrogance (especially from “experienced veterans”) when screening potential new hires for either department that will interface with the other –arrogance often is the trigger which starts the battle between departments.

Integration of Departmental Functions
Encourage the sales department to get marketers in front of their customers. Hire marketing people that have had some sales or business development experience,  who understand dealing directly with customers–and know what’s it like when your living depends upon making your quota. Insist that the marketing department include the sales folks in determining what a “qualified lead” looks like. If you can get agreement on this up front on this important issue, much of the finger pointing goes away when things don’t go as planned.

Joint Goals and Compensation Structure
It currently isn’t common to design department or individual goals which cross marketing and sales functions, but if you can find a way to do this you are structurally setting up the desire and need for close cooperation. Design goals or MBOs to reward the two departments for working together. It’s crucial that you don’t ever allow one department to “get ahead” by blaming the other–tie them together as much as possible in your goal setting.

SUMMARY
To limit issues between sales and marketing functions and ensure that they “sing from the same sheet’, pay close attention to the specific individual departmental activities which can greatly effect the perceived performance of the other department. Optimizing the cooperation between sales and marketing demands an upfront look at things such as the corporate structure at the highest levels, the social fabric of the company, compensation structure and use of targets/goals, as well as formal cross-departmental reviews so each department can influence the other department’s approaches. All too often I see these things aren’t taken into consideration until after the fact–when things have already blown up and there is a mess to clean up.

That’s my view on this all too common–but not often discussed–conflict. What has been your experience in this area? Post a comment and begin a discussion.

Follow Phil Morettini and Morettini on Management via Twitter, Facebook, LinkedIn, RSS, or the PJM Consulting Quarterly Newsletter. Contact Phil directly at info@pjmconsult.com

Save on DeliciousDigg ThisShare via email
Submit to redditSubmit to StumbleUponShare on Tumblr
4 Comments by admin on December 11, 2008
filed in Corporate Strategy, General Management, Marcom, Product Marketing/Management, Promotion, enterprise software, sales
tagged , , , , , , , , , , , , , , , , , , , , , ,

Trade Shows for Software & Technology Firms – Do They Still Make Sense?

Let’s talk about what for a lot of folks is a marketing method from a bygone era: Trade shows, or Trade Fairs as they’re referred to in most places outside of the US.

At one point in time, Trade Shows were a staple in most every tech company’s marketing budget–shows like Comdex, PC Expo, Network World and a host of others were annual rites of passage. But in the Internet age, they have been greatly reduced in the marketing mix, if not taken completely out of the picture.

There are many reasons for this. First and foremost, the ROI of tradeshows was always very questionable for most exhibitors. In marketing departments everywhere there were always sharp discussions during budget time on whether to continue the expense of the major shows. They always seemed important to exhibit at but usually it was pretty difficult to make a direct correlation to enough actual revenue to justify the large expense. As the Internet became more prominent this ROI looked even worse in comparison–as it did for many other “offline” marketing methods, such as traditional direct mail and print advertising.

So are trade shows now obsolete, having gone the way of the Dodo bird? Probably not, but many marketing folks would say that they are at least on the endangered species list. So when, if at all, do traditional trade shows still make sense today? And what should your goals be if you do decide to invest in a show or two? Let’s take a quick look at 4 points relevant to each of these two questions.

4 REASONS IT MAKE SENSE TO GO TO A TRADE SHOW:

A CONTRARIAN APPROACH
One of the major enduring useful tactics in marketing is to “zig when your competitors zag”. If you are in a market where a show is still well attended but vendors are starting to stay home rather than pay for booths, you may have an opportunity. If your competitors aren’t there, you have a larger, captive audience of prospects to strut your stuff to. One of the basic tenets of a good marketing program is to find a “communications channel” which isn’t too crowded that the ROI goes to hell. With trade shows falling out of favor in marketing budgets, there is potential to benefit from a contrarian approach in some markets.

INTRODUCTION INTO A NEW MARKET
This is always one of the strongest reasons to attend a few shows. If you have a brand new company or your company is entering a market space it hasn’t previously participated in, a couple of well-selected shows can be a very good investment. Remember, you only get one chance to make a first impression.

INTRODUCTION OF A NEW PRODUCT
Much like a company entering a new market, a new product introduction is a very traditional reason to exhibit at a trade show. In my opinion, introducing new products at shows has historically been over-estimated as a useful marketing tactic. Sure, the press is there covering the show but if 50 other vendors are also announcing new products your new product might get lost, or at least get less press coverage then if you announced two weeks before or after the show. Remember the comment above about over-crowded communications channel?. In some cases, announcing at a show fits this description. This can still be a sound marketing tactic–just don’t do it because everyone always does it that way. Do careful research and planning to ensure it is a net positive.

IMPORTANCE OF HIGH TOUCH
If you have a product that absolutely requires some hands-on or personal selling before prospects buy, trade shows can be an excellent investment. For example, if the product is quite expensive, or an expert demo sells far more than prospect downloads from your website. I had a software company client at PJM Consulting who was in a market where expert demos are essential; they grew the company to a great extent with trade shows and almost always could demonstrate a profit on their show budgets.

4 GOALS TO ENSURE A HIGH RETURN FROM A TRADE SHOW:

PRESS COVERAGE
This is always one of the most important reasons to go to many shows. If it is an important show, the press will be there in full force. You really need to plan PR tactics ahead of time, however, as all of the other exhibitors have the same goal of getting press appointments and coverage. It is CRITICAL to plan far ahead in securing appointments with target editors and have a “tease” of substantial news to obtain the appointment. Editor’s schedules fill up far in advance. Properly planned, the show can pay for itself just in this area by eliminating the need for a dedicated press tour. But if not well planned, you will end up “wasting” your product introduction or other news, resulting in little or no press coverage.

EFFICIENCY OF INDUSTRY NETWORKING
Networking with the other exhibitors is often overlooked by many vendors. The focus is generally solely on customers, and maybe distribution channels. Often many companies with complementary offerings are attending and exhibiting along with a few competitors. This can be a great arena to begin or continue discussions with potential strategic partners. At a minimum, makes sure to set aside some time to walk the show floor and see who might have synergy with your company. Even if you’re pressed for time, shake a few hands and gather some business cards–it can be an excellent setup for future discussions.

LOCAL CUSTOMER VISITS
This is also an area that holds potential to lift your show budget’s ROI, which is often overlooked by many exhibitors. You are flying staff to a faraway city–why not go in a couple of days early, and call on a few potential major customers? At a minimum, make sure you get those free show tickets that often go to waste out to local prospects in your database, so they can come to the show for a meeting or demo at your booth.

LOCAL CHANNEL VISITS
In the same vein as visits to customers it makes a lot of sense to call on current or potential channel partners, once you decide you’ll be spending money going to a show in a certain region. Add a couple of days to your trip and visit a few key partners and prospective partners in the area. And make sure to invite them to the show well in advance and supply those free tickets, so you end up seeing many more later at your booth.

If you just spend a lot of money and fly to a city, set up your booth, and wait for new customers to flock by to see you–you are likely to be very disappointed in your return on investment. But if you use a tradeshow as a hub for a variety of related activity, adding a couple of key shows into your marketing mix can still bring a very nice ROI. The key is preparation and planning, to make sure your results are optimized.

I’ve outlined a few reasons why it still may make sense to exhibit at tradeshows/trade fairs even today, along with some ways to maximize your return. What’s your reason for attending tradeshows in the Internet Age? And what concrete results do you hope to achieve? Post a comment to continue this discussion.

Follow Phil Morettini and Morettini on Management via Twitter, Facebook, LinkedIn, RSS, or the PJM Consulting Quarterly Newsletter. Contact Phil directly at info@pjmconsult.com

Save on DeliciousDigg ThisShare via email
Submit to redditSubmit to StumbleUponShare on Tumblr
3 Comments by admin on June 5, 2008
filed in Distribution Channels, Marcom, Product Marketing/Management, Promotion, Retail, VARs
tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Which Online Advertising Platforms Should You Include in Your Marketing Mix?

I often write about online marketing, as many of my regular readers know. A frequent topic of mine is Pay-Per-Click (PPC) advertising, also known as Cost-Per-Click (CPC). Occasionally, people will refer to this marketing vehicle as Search Engine Advertising. What you’re hearing this called more and more is “Google Adwords”.

HAS GOOGLE ADWORDS “BECOME” ONLINE ADVERTISING?

Of course, its kind of like asking for a “Coke” when you want a soft drink, or “Scotch Tape” when you are seeking sticky-backed tape. It’s the age old story of a brand DEFINING the category itself, and usually happens when a product becomes dominant in a market segment.

The conventional wisdom these days is that Google has basically won the Online Search Engine-based advertising wars, so don’t even bother with any of the other advertising platforms out there. This topic is the very reason for Microsoft’s recent offer to buy Yahoo for a gazillion dollars; they are motivated to do this because Google is so far ahead that they don’t appear able to catch up on their own. This raises the issue of two also-rans in a market, combining to take on the market leader–which usually ends in disaster–but we’ll leave that for another discussion…

Back to the main question, should you focus your online advertising energy and budget strictly on Google Adwords, or broaden your campaign to other platforms? I have an opinion, of course, and I’d like to illustrate that opinion with my own pragmatic advertising experience, as well as some more theoretical marketing theory which has served me well across a variety of markets. Let’s start with the theory, using an experience from my past to illustrate my viewpoint.

MARKET NICHES: HIT’EM WHERE THEY AIN’T

As markets develop, conventional wisdom usually instructs you to “get on the bandwagon” of the market leader, and don’t waste your time “where the action isn’t”. Back in the 90s when I was running a systems & network management software business, Novell Netware had the overwhelming share of the Network Operating Systems business–roughly a 70% share. As a result, most of the companies in our general space focused on making their add-on products compatible with the Novell platform. They ignored two other competitors: Microsoft LAN Manager and Banyan VINES. There were almost no add-on systems management products available for these two platforms. We ported our applications to these two platforms, with excellent payback. Not only were we able to make easy sales to the customers of these two NOS vendors due to lack of competition, these secondary platform vendors supported our efforts to a much greater degree than Novell, where we were one of many. In addition, it turned out that while Banyan (and too a lesser extent LAN Manager) had much higher market shares in the coveted Fortune 1000 market than they did the market as a whole. Many large companies also had mixed networks containing two or more of these NOS platforms–we had a major strategic advantage in these large accounts, due to our cross platform support. The first lesson here is that sometimes it really pays to segment a market a bit differently. In some cases, in segments important to you, the market leader isn’t nearly as dominant as overall market share data would lead you to believe. The second take-away is that smaller market segments are often DRAMATICALLY less competitive, allowing you to efficiently grow revenue without huge marketing outlays to “get above the noise”.

MY OWN EXPERIENCE WITH THE MAJOR ONLINE ADVERTISING PLATFORMS

I run PPC advertising campaigns for several of my clients. Let me make something clear right away–there is no comparison between these three advertising platforms. Google Adwords is the clear winner, hands down. It’s not close. Adwords is both by far the most robust and easiest to use, which is quite a statement. Adwords is a great piece of software, which Google is constantly evolving and improving. You can do almost everything you want and there is excellent online help if you do have a question. If you ever really do need a live person, help is available, even if you are spending a modest amount on advertising with Google. It is a pleasure to work in Adwords. Plus the fact is that by far the most volume of searches is available on this platform.

Yahoo Search Marketing (formerly Overture) comes in second place. This is the original search advertising platform. It’s not nearly as robust as Adwords, but the recent major upgrade at least brought the software into the modern ages–it was pretty stagnant for a very long time, allowing Google to surge into a commanding lead. The basics are covered, and it’s pretty intuitive–although if you are used to working in Adwords, the subtle differences can drive you a bit crazy. And there are a few things that are simple to do online in Adwords, that you have to call and request over the phone to make happen in Yahoo’s platform–but at least they are very nice about it.

And then there is Microsoft AdCenter. What can I say about Microsoft; it is the typically excruciating experience dealing with them. They dominate most markets they are in, and have that arrogant way of dealing with you that only a monopolist has. When you have 90% of the OS or word processing market, you can get away with lousy support, vendor-centric policies and non-intuitive software. But they are a distant third in this market, and they aren’t gaining on anyone. So these weaknesses stick out like a sore thumb. This is the newest platform. The software isn’t all that hard to use, but in Microsoft fashion they have created some of their own conventions in opposition to market terminology, and the application doesn’t always behave in a way you would expect. Add in the unbelievable support mentality, not to mention the fact that they are a distant 3rd in traffic, and you realize why they are last among the major platforms. As an example of their attitude, when I decided to look at Microsoft’s offering, I wanted to import my Adwords campaigns into Adcenter to save a BUNCH of time, which the Help function stated that I could do. Makes a lot of sense for a new user, right? Well, I couldn’t figure out how to do it in the software, so I called Adcenter support to ask how. I was told that I needed to be spending at least $11,000/month to have access to that feature! There’s a classic catch 20–not allowed to import all your campaigns into a platform (which will enable you to spend money in that platform), until you’re spending over $100,000/year. Brilliant market penetration strategy! Whoever is making decisions at Microsoft has no idea how to compete–which I guess isn’t surprising for a monopolist. No wonder they are trying to buy Yahoo….

SUMMARY AND RECOMMENDATIONS

Adwords is clearly the best platform, so why bother with the other two? Remember the discussion about niche markets above. Although Adwords is by far the best, as a result, it’s also the most fiercely competitive of the three–meaning costs are high and margins are sometimes lower. It really varies by market segment, but in some segments, Yahoo Search Marketing and Microsoft Adcenter are neglected, leaving excellent bargains on important keywords. I am currently running a campaign on Adcenter for a client in a very niche, technical market, which isn’t supposed to be well suited for MSN search traffic. This campaign is doing VERY well. So the moral of this story is don’t pick one–use all three, as long as you’re making money on each of them. This is the beauty of PPC marketing, after all. It is quite easy to test to see if it will work for you, and objectively track your results.

That’s my take on the three major search marketing platforms–I’d love to hear yours. Post a comment so everyone can benefit from your own experience.

Phil Morettini
PJM Consulting
http://www.pjmconsult.com/

Save on DeliciousDigg ThisShare via email
Submit to redditSubmit to StumbleUponShare on Tumblr
1 Comment by admin on February 12, 2008
filed in B2C, Marcom, Online Marketing, Product Marketing/Management, Promotion, enterprise software, sales
tagged , , , , , , , , , , , , ,

More SEO Tools

From time to time, I let you know about some of the more useful (out of the abundant crop available on the Internet!) online tools for Search Engine Optimization (SEO) that I have come across. So here’s the latest batch of valuable, and free, widgets that I’ve found:

The first is a site that checks on all of your back links, with a twist: it actually details not only the back link itself, but the anchor text associated with the link. For those of you sophisticated about SEO for your website, you’ll know that this is very important information. There are a couple of reasons why this is important. First of all, the search engines use anchor text to associate your site with keywords that might be searched on in that engine, and uses this information in it’s search rankings. So it’s very important to have your most important keywords show up as anchor text on as many back links as you can manage. Secondly, if the search engines find that the anchor text on your back links is too repetitive, the engines will penalize you from a ranking perspective. The reason is that if the anchor text on all of your back links reads the same, Google and the other engines assume that the links are “manufactured” by the owner of the site–rather than generated naturally as a result of your site being interesting to others. So I highly recommend that you check out and use this tool:

Backlink Anchor Text Checker

A similar tool is the “C Class Back Link Analyzer”. Once again, this is a tool for those sophisticated about SEO. The “C” Class Back Link Analyzer investigates the links pointing to a website, and then groups them according to the IP addresses they result from. If one back link comes from 54.37.14.5 and another comes from 54.37.14.6, the tool would group together. Links which come from the same C-Class IP are likely to be hosted by the same company, often lowering the site’s search engine ranking.

“C” Class Back Link Analyzer

One last esoteric tool for the true SEO fanatics out there. It’s called Deep Link Ratio Calculator. This tool measure the number of links to pages on your site other than the Index/Home Page, divided by the total number linked to your site. This is important because the Search Engines consider these “Deep Links” to be more “natural”, more likely the result of someone creating a link to some great content in your site (as opposed to you listing your own site in a directory, for example). So this neat tool can give you another view of how “natural” the Search Engines are viewing the links to your site.

Deep Link Ratio Calculator

Finally, I present “yet another” Keyword Suggestion tool. I know, there are lots of them out there, but I find that when you’re looking to generate keywords for SEO on a site, or when starting a PPC campaign, there are never enough good tools. This Suggestion tool claims to accumulate and report Keyword variations from the six most major search engines. Give it a shot and report back how it goes.

Keyword Suggestion Tool

I hope that you find these online SEO tools useful–post a comment and let me know!

Phil Morettini
PJM Consulting
www.pjmconsult.com

Save on DeliciousDigg ThisShare via email
Submit to redditSubmit to StumbleUponShare on Tumblr
No Comments by admin on September 28, 2007
filed in B2C, Marcom, Online Marketing, Promotion, Social media
tagged , , , , , , , , ,

The Mechanics of Email Marketing

There are many different possibilities for technology and software companies, when it comes to formulating a marketing mix. I’ve written before about some of my favorites. One method that can be a big winner, if done well, can also be a big loser if done poorly. I’m referring to email marketing. If you want to be successful, you need to do it very well, as a result of SPAM and the general bursting of everyone’s email inbox these days.

Why Email Marketing?
Email marketing can be so productive for a company, because unlike some other forms of active/outbound online marketing (ex: PPC advertising, Banner Ads), you can usually target you audience very effectively. This is especially true if you are using an in house list; by definition, these are prospects that have some reason to have an interest in your products. In B2B marketing, there is an abundance of excellent niche lists available for rental, to use in a targeted campaign. In B2C they aren’t quite as good overall, but there may be very good lists available for a particular category.

Like all other forms of online marketing, another primary benefit to this method is the ability to measure results with great accuracy, granularity and speed. Lastly, you can make a very big impact quite quickly, unlike other online methods which may fit more into the “steady as you go” category.

The Elements of a Successful Email Campaign
So if “doing it right” is so important, just what are the important things to concentrate on, to achieve success in email marketing? Let’s take a look at some of the most important elements:

Relevancy
First and foremost, your email must be relevant to the people who are receiving it. This is the great problem with the email marketing universe today, especially when considering the Spammers. Scattershot emails to every name that you can get your hands on not only won’t raise your sales; it will ruin your online reputation, and prevent you from effectively marketing online in the future. It’s been said by others that the difference between SPAM and legitimate commercial email is RELEVANCY. I firmly believe this. If your offer resonates with the list that you send it to, you will receive relatively few complaints.

The List
After relevancy, the next most important thing is the list. Absolutely do send your message to a list of folks that you have good reason to believe will be interested in what you have to offer. This is called target marketing; it is good practice across ALL marketing media. In email marketing–IT’S ESSENTIAL.

The Offer
Next comes the offer; often this is the most critical thing that you have a lot of control over. You need to remember that in email marketing, you are “going to the people”. They aren’t coming to you like the do in content marketing–where they actively looking for your product or service. As a result, your offer needs to be very aggressive to get their interest, and to compel them to act in the manner you desire. I always say that in direct marketing you want to make your very best offer. In email direct marketing, make them an offer that is so aggressive, it actually makes you wince a bit!

Creative
The above categories are the most critical to success. If you don’t get them right, nothing else will matter. However, it’s still very important to properly execute your relevant offer to the proper list. Even if you’ve got these elements formulated properly, poor creative execution can still lead to failure. In some cases it’s best to make the email look like an email–not a web page. This is always something that is best to test as I discuss below. People’s expectations in an email message are very different from visiting a website (and attention spans are short enough in web-viewing!) I recommend that you keep your message simple, direct and relatively short. Feel free to include some attractive, eye-catching graphics. But remember, this is direct marketing–not an art project. Much research suggests that email graphics has no effect whatsoever on response rates. It’s primarily about the copywriting. Make your copy compelling, and get to the point very quickly–there isn’t much time before the “delete” or “Spam” key gets punched.

Legal
The legal aspects of marketing via email are important, and quite a bit more restrictive, relative to any other form of direct marketing. So make sure you are aware of the laws which apply to your message–they vary from country to country. In the US, for example, the CAN-SPAM act requires an honest subject line, “remove requests” instruction, and a listing of the sender’s physical address–among other things. In some cases there are also state laws that apply. In Europe and other countries, the requirements can be far more restrictive, sometimes going so far as to require “opt-in” permission before any message can be sent. So be sure to research the local laws and comply with them at all times. To do otherwise risks ruining your online reputation–or worse.

Deliverability
This is one of the most difficult aspects to this particular direct marketing method. The advent of enormous amounts of SPAM has created many barriers to delivering even the most welcomed messages to email inboxes. This was necessary, of course, for the preservation of the ability to use email at all. But deliverability is a very challenging, every changing scenario that has morphed into a marketing specialty of its own. There are many good places on the Web to assist you in getting your email delivered to your prospects. Return Path and Habeas are two of the more well known new companies that specialize in this area. I have used a free tool called SpamCheck to great effect over the last year, in screening my messages for deliverability problems. Contactology also has a great free Spam checking tool, as well as a turnkey service which enables you to easily create highly-deliverable email messages. EmailReach is another company that has some deliverability great tools. They aren’t free, but they do offer a 24 hour free trial for their service.

Continuous Measurement & Testing
The last thing I want to mention, which should be part and parcel to any successful email program, is measurement and testing. Since email is an online medium, it’s easy and cheap (or free) to measure your results. Frankly, doing any form of direct marketing without measurement is dumb. Online direct marketing without measurement is criminally dumb. There is just no excuse for it, other than laziness. Direct email marketing works best when it isn’t considered a “single-shot” campaign. Each drop should be part of an overall campaign aimed at continuous improvement. Multiple elements of your message should be tested and measured with each drop. If you do this, you WILL improve your results as you go–and greatly increase your odds of ending up with a highly successful, and repeatable marketing method to help drive your company’s growth.

Wrap Up
That’s my review of the nuts and bolts of good email marketing. Let’s hear from some of the other experts out there on your own best email practices. Post a comment so we can discuss this important marketing method in depth.

Follow Phil Morettini and Morettini on Management via Twitter, Facebook, LinkedIn, RSS, or the PJM Consulting Quarterly Newsletter. Contact Phil directly at info@pjmconsult.com

Save on DeliciousDigg ThisShare via email
Submit to redditSubmit to StumbleUponShare on Tumblr
No Comments by admin on April 7, 2007
filed in B2C, Marcom, Online Marketing, Pricing, Promotion, sales
tagged , , , , , , , , , , , , , , , , ,

Pay Per Click (PPC) Online Advertising

It’s known by several names: PPC or Pay Per Click advertising, CPC or Cost Per Click advertising, or sometimes by the best known PPC advertising engine, Google Adwords.

Pay Per Click advertising is no longer new; as a result, much of the “easy” money has already been made. But I’m struck by how many companies I run across that are still NOT using this method to attract prospects or make sales on the web. While it is now a competitive channel unlike in the early days of this medium, it can still be very effective and cost-effective in many markets.

PPC should be a staple of the promotion budget of nearly every company (although not a major portion of the overall budget, in most cases). It should also be one of the first promotional methods utilized on behalf of a new product, service or company. Here’s why:

Complex to Optimize–But Simple to Start
PPC advertising campaigns can be very complex and extensive, and will be once you get them optimized. Many companies are spending tens of thousands of dollars/month on PPC. At that point they should be making a lot of money for you–so it’s worth the investment and the trouble!

But getting started is quite easy–anyone can do it. You simply open an account with one of the major advertising engines, which will take you all of five minutes or so. You can put together a basic test campaign in less than an hour’s time. I always recommend starting with Google Adwords first. Once you are successful and understand what you are doing on Adwords, it is pretty easy to move your functioning campaigns to the other major system (Microsoft Adcenter) and the tertiary players. There are differences, but they are fundamentally the same.

Adwords is the most powerful and has by far the greatest reach, yet it is still very easy to set up your initial trial campaigns. There is an excellent set of online Help and tutorials to walk you through the basics. When you set up your initial campaigns, you WILL make mistakes. But don’t worry. Just set your budget limits to a low number that you can easily afford, and you will quickly climb the learning curve. Once you’ve learned the basics of what you are doing, you can then seek assistance to do the final optimizations to your campaigns, which will lead to the greatest success. You may decide to “do it yourself”; if so, there are a lot of different experts out there with modestly priced guides and services to bring you to the top of your PPC game. Or at this point, you may wish to outsource your PPC advertising activity. I always recommend opening an account on your own first, even if you plan to outsource. The knowledge that you gain will help you in hiring a third party who will best optimize your PPC activity, if you decide a third party PPC firm is the way to go for you.

Easy on the Budget
If you are a thinly capitalized startup company, or have a tight budget for a new product or market segment, you can start a PPC campaign that brings you results that you can continually improve, for just a few dollars/month. As usually is the case, the more money available the better. The more money you have to spend, the faster you can receive statistically significant results–which can then be used to tweak your campaigns for improvement, over and over again. But if you can only spare $50, $100 or $500 per month at first–don’t let that deter you. In most cases you can get started and move your campaign forward, at even these low budget levels. The beauty of PPC is that you really don’t need to commit to a large budget until you’re sure that you’ve got a profitable campaign. At that point, you’ll want to pour as much money into your campaign that you can muster. Once a campaign is proven profitable, pouring more money into it is like turning up a profit meter!

Precise Measurements
One of the major advantages of PPC advertising, compared to traditional offline adverting and other promotional methods, is the ability to precisely measure nearly every important aspect of your campaign. The ability to precisely track your results is much greater than any other form of promotion I’ve utilized in my career. This measurement precision turns PPC advertising into the most scientific form of marketing available. After some initial hypotheses with respect to Ad copy, keyword selection and landing page design, it is possible to systematically improve your results by tweaking these elements of your campaign  almost forever–increasing your profitability as you go.

Fast Results
The other important aspect of PPC advertising, in conjunction with measurement precision which makes this medium so systematic and scientific, is the ability to get this precise feedback in near real time. As an example, in traditional, offline advertising campaign, you need to invest tens of thousands of dollars upfront. After this large investment, you won’t even know if your campaign was successful for months. With PPC advertising, you quickly get feedback in the form of precise, quantifiable results, sometimes only minutes after you started it. As a result, you can have a fully optimized, profitable PPC campaign working, before you would even get your initial measurements with other methods.

The Ideal Platform to Test Messaging, Campaigns and Offers
The expediency and precision of PPC advertising make it a great platform to kick off any new product, market segment or company. It is very efficient way of testing messages, offers and websites. Once you’ve discovered and proven the things that work best, you can transfer this knowledge to your rollout of other promotional vehicles. This greatly reduces the risk inherent in starting up new marketing campaigns of any type, and should increase your profitability across platforms and promotional vehicles from day one.

Summary
As you can tell, I am a big proponent of PPC advertising as a staple of every marketing budget. Unless your market is so small that it consists of only a few hundred prospects, I recommend it to nearly every software and high tech company on the planet. Consumer, Enterprise or SMB–it’s very effective across many markets. In fact, the more of a niche your market is, the more cost-effective PPC becomes, due to reduced competition and lower resulting bid prices. There are a few highly competitive markets these days which are so competitive, that it’s hard to run a profitable PPC campaign. But these are still the minority. So if you aren’t active in PPC advertising today–get started! Give it a try, and let me know your questions or comments.

Follow Phil Morettini and Morettini on Management via Twitter, Facebook, LinkedIn, RSS, or the PJM Consulting Quarterly Newsletter. Contact Phil directly at info@pjmconsult.com

Save on DeliciousDigg ThisShare via email
Submit to redditSubmit to StumbleUponShare on Tumblr
1 Comment by admin on February 26, 2007
filed in B2C, Marcom, Online Marketing, Promotion, sales
tagged , , , , , , , , , , ,
« Older Posts