Bill, here's a view more on the advertising side than the ecommerce side:
The Internet Advertising Discussion List
internetadvertising.org
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From: Adam Boettiger, List Moderator, mailto:ab@eyescream.com
Subject: On a more positive note...
Just a note to thank all of your for your participation on this forum. There
have really been some excellent posts lately, but I have had just one
concern:
Recently I and a few other list members have noticed a trend toward
discussing the negative aspects of online advertising. There are going to
be problems with any new medium, and it is important to identify them and to
propose solutions in a constructive, proactive manner. This industry is far
from perfect, and there are some major issues with accountability and
measurement that need improvement - these are certainly important issues to
discuss and identify solutions to. However lately I've noticed that many
posts have taken the form of really putting down the industry. Such posts
really do not serve to provide useful content to the other listmembers and
from this point forward will not be passed on. We're going to focus on
constructive solutions rather than complaints.
What may not work for one business may be working extremely well for
another. What combination of online advertising will work for your
business? It really depends on product, service, objectives, cost per
objective, available budget, methods used to advertise, performance,
technique, knowledge of the industry, experience and a number of other
factors - all of which must be examined on a case by case basis, without
making a blanket assumption that one part of an industry is non-functional
for everyone just because it may not be meeting your own individual
objectives.
Every situation is different and every business is different. There is no
single formula for online promotion or advertising that will work for every
business, in every situation, every time. To make things even more
challenging, once you find the right formula for your business, even that
formula may need to be adjusted on a monthly basis to continue to meet your
online objectives. It's not a black and white issue, folks. It's not a
work/does-not-work issue. It's a matter of looking at what you are trying
to do, having enough knowledge of the industry to see whether your
objectives are unrealistic or not, and if they are unrealistic,
restructuring them. If they are realistic, then it's a matter of
identifying the best combinations of promotions that will allow you to meet
your objectives and reexamining them on a continuing basis.
Probably two of the largest factors that make online business objectives
unrealistic are Objective Cost Per Visitor and budget.
Site XYZ wants to run a sweepstakes to give away Superbowl tickets. After
calculations and profit margins, they've identified their objective Cost Per
Registration at 25 cents. This means that in order to make a profit from
their promotion, they can't pay more than 25 cents to get someone to their
site and get them to register for the sweepstakes.
Even assuming a 50% conversion (1 of every 2 visitors to their site
registers - which is overtly optimistic), a 25 cent CPR at 50% conversion
means that their objective Cost Per Click/Cost Per Visitor is 12.5 cents.
This is fairly unrealistic given current industry rates. So they either
need to reevaluate their sweepstakes or augment the campaign with other
types of promotions in addition to online advertising. As it stands now,
they will not profit from what they are doing, so they need to readjust
their objectives or restructure the sweepstakes.
Often times there are businesses who say that they are unsure of the Web but
want to "test the waters" with a $3,000 media buy to determine whether they
will invest more money into the Web. This is the wrong approach. Testing
is certainly the right approach, but what invariably happens is that they
can afford to develop only one or two pieces of ad creative, they end up
being able to make one buy at very high rate card prices on one site with
run of site delivery. They feel that they are "testing the waters", but
what they are really doing is
1. Advertising on one or two sites that may or may not be statistically
significant of their target market
2. Advertising at the absolute highest rates possible, providing them with
an inaccurate picture at best of what Cost Per Visitor they may obtain with
a larger budget and lower negotiated rates.
3. Using too few pieces of creative, which restricts them from being able to
optimize the campaign
4. Advertising run of site, which is completely untargeted and may reach
only a fraction of the audience they need to reach depending on what their
product or service is and their target market. It is wonderful for reach,
but many businesses need to target.
5. Using too short of a test period
6. Not being able to develop separate advertising themes and corresponding
jump pages to test for performance
Tests in this industry are ongoing and require a budget to conduct properly.
To base a decision of whether one form of advertising will or will not work
for a business based on a single flight on one or two sites with a small
number of creative pieces is unwise. Testing and optimization of flights
should be an ongoing process.
Just like traditional businesses offline, Web sites *are* businesses and
require staff to maintain them, and a significant budget to promote them to
potential customers. It is a fallacy to think that a business will be able
to succeed online with no budget for promotions or a very small budget. It
is the rare instance that we see this happen, and in those isolated
instances time invested has played a major factor. In 1995 it was possible.
In 1999 it is not the norm.
In 1999, more businesses will come to realize that if they truly wish to
succeed in this medium and in e-commerce, they must stop treating the
Internet as a novelty and develop a long-term strategy, investing in their
online business. Those businesses that *are* succeeding online have stopped
dipping their toes in the water, developed a long-term strategy and gotten
down in the trenches, invested in their business and embraced the medium.
In 1999 people will come to realize that it *is* going to cost money to
reach a specific audience online and to promote an online business to any
degree of success. Given this fact, this medium may not be the right choice
for all businesses and all products and services, but the scope is widening.
Two years ago advertisers largely reached a technically savvy audience. In
1999 the Internet has more consumers and a much wider audience reach - good
news for many online advertisers.
This forum is and will continue to be structured to do essentially 3 things:
1. Keep you informed of industry changes and news through a variety of
sources
2. Allow you to interact with other industry professionals on a global basis
in a professional, proactive manner to share information.
3. Provide a catalyst that facilitates professional communication and the
exchange of ideas and comments to advance the industry.
Please understand that negative discussions really don't help those who are
seeking solutions and who make a living in this industry. People want to
know what works well now, where the industry is headed, what's new and how
they can find solutions for their particular situation. Let's all of us
make a concerted effort to look at the glass as being half full rather than
half empty from now on. I think positive and constructive discussions
really benefit people far more than blanket pessimism.
Thanks! As usual, send your flames, criticism, comments, feedback etc. to
me at: mailto:ab@eyescream.com
Have a super weekend!
AB
Moderator
------------e/y/e/s/c/r/e/a/m interactive, inc.--------------
adam boettiger, vp biz development 503/292-6987 x16 telephone
mailto:ab@eyescream.com 503/296-0945 facsimile
traffic building | strategic partnering | new media planning
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