Tactics That Do More Harm Than Good

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There is no longer any question: online marketing works. When combined with other marketing channels, online advertising is said to deliver an 11 percent rise in customer response and an 8 percent boost in brand attributes.


But just because Web advertising works does not mean it is easy. For all the companies advertising online, many are doing things that hurt as much as help. Here are nine common marketing mistakes that sap time, effort and resources that could be put toward activities proven to pay off:


1. Stop building "destination" Web sites. It costs too much to drive traffic to a new site, and not all your visitors will be qualified customers who are ready to buy. Instead, build distributed sites and place them where your customers are most likely to be.


One business-to-business marketer incorporated information from its own Web site as core content on the sites of other small-business service providers known to be places where its targeted customers went looking for information. Within two months, the Web became its second-highest lead generation channel in terms of volume and the lowest in cost per lead.


2. Stop using e-mail to acquire new customers. E-mail looks like a cheap way to reach a lot of customers. But with response rates nearing zero and spam-blocking technology and regulations on the rise, it is hardly a high-performance medium.


Moreover, though e-mail may be cheap, it carries an enormous "cost" to your brand when you anger or annoy prospective customers.


3. Stop blasting e-mail to current customers. Though e-mail is no longer effective in acquiring customers, it is an increasingly valuable way to build on existing customer relationships. But you risk turning off your hard-won customer base if you blast them with generic, non-targeted, non-differentiated e-mails.


To build business and loyalty, use behavior and needs data to customize the content and timing of online communications with individual customers. When a major bank did just that - changing its e-mail approach to a more service-oriented, segmented newsletter - it quadrupled its product sales through e-mail, and its opt-out rate dropped near zero.


4. Stop using high-cost customer service channels to handle low-value customers. One client was surprised to learn that the biggest demand on its call centers came from customers that could be served profitably only on the Web. Making the customer service section of its Web site easier to use eliminated the problem, saved millions of dollars and improved customer satisfaction.


Similarly, high-value customers deserve treatment in keeping with their worth to the company. Rather than shunting them into an automated voice response system, reward their loyalty with dedicated call center lines, staffed by representatives trained to meet their needs.


5. Stop paying a premium for "value added" that adds no value. Some online media buys justify their premium prices by including "value added" placements. Our research shows these extra elements do not pay off in additional revenue, customer response or brand awareness. It is better to pay the right price for the positions you want.


6. Stop selling to surfers, start selling to searchers. With upward of 40 percent of online traffic generated from search engines these days, paid placement and third-party optimization are "musts" in order to drive qualified traffic to your site.


For paid placements, it is no longer enough simply to include words and phrases specific to what is being marketed. Ideally, purchase words and phrases that mirror copy used in the online ad. For example, the phrase "IRA rollover" is better because it is specific, whereas words such as "retirement" or "IRA" are too general to produce good search results.


7. Stop building interactive advertising budgets based on last year's numbers. A big advantage of online advertising is that the medium is constantly changing. Reach and penetration continue to increase, even as costs continue to decrease. And because you can measure behavior and response in virtual real time, you can quickly bolster spending programs that produce results while shifting money from less-productive efforts.


If you base this year's budget on last year's numbers, you will miss out on the big opportunities that come with the ability to fine-tune your budget to meet the ever-shifting market.


If you're going to play in the interactive space, start by taking a fact-based look at the potential of the channel in your marketing mix, and revisit and adjust your interactive budgets every six months, at a minimum, to fit the latest conditions.


8. Stop treating interactive as a stand-alone channel. Interactive advertising on its own is like one hand clapping - it doesn't have much effect. But when combined with other channels, it can provide enormous lift.


One major cataloger saw considerable rise in sales once it began sending customized e-mails alerting recipients to watch for the catalog in the mail, and directing them to specific pages in that catalog featuring products known to be of interest.


The reverse also works. When an online retailer added direct mail to its marketing mix, it saw substantial lift in sales.


9. Stop ignoring the importance of wireless. Wireless technology is here to stay. Half of all U.S. homes with a cell phone also have personal digital assistants, which present tremendous opportunities for the "just-in-time" marketing made possible with wireless text messaging. Marketers can send short, "teaser" messages and offers to their opt-in customers.


The technology lets those customers, in turn, set a date reminder for an upcoming sale or event, or request an e-mail with further product information. Though text messaging is ineffective as a stand-alone marketing solution, it is gangbusters when bundled with online and offline marketing.


Now that online marketing has proven itself an invaluable part of the mix, it will continue to grow. Marketers looking to ensure their online investments pay off should begin by putting a stop to these all-too-common mistakes.


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