The Tools for Customer Acquisition
For online advertising to be effective, savvy marketers should evaluate the tools and leverage the learning curve of their peers.
One of the first decisions is the measuring stick you will use to evaluate performance. Will it be cost per click, cost per action, brand awareness or a combination? We have learned that metrics evolve, reflecting market conditions and corporate life cycle. A more granular metric is cost per thousand impressions, which helps evaluate creative on an apples-to-apples basis.
Setting up proper tracking prior to your online campaign will give you the edge you need to buy and negotiate advertising. Most of these tracking mechanisms are now standardized. Third-party ad servers can help close the loop from click to order, broken down to either the site or the particular creative.
Moreover, you can track view-based visits. A report from Engage/AdKnowledge contends that 32 percent of conversions are from view-based visits. Here's how it works: The potential customer may view the banner and not click. However, a couple of days later, he comes back to the site directly by typing in your URL. And presto, through the magic of the Internet (and cookies), that visit or order can be credited back to the creative that was viewed but not clicked on.
Once tracking has been established, consider your target market. Content segmentation, online profiling and sophisticated reporting techniques help marketers reach specific audiences. Whether it makes sense to pay premium CPMs for targeting depends on your site's defined product. A broadly defined category such as free items may not warrant premium CPMs. Ask a publisher what targeting is available. If you like it, test it.
If marketers optimize their campaigns based on click-through rates, they may unwittingly create the opposite effect on orders and conversions, essentially clicking themselves out of business. Optimizing by order also can have its pitfalls. Marketers should maintain their online visibility while aggressively pursuing beyond the banner positioning. Text links and newsletter sponsorships may result in increased return on investment; however, banners still should be used for online exposure. One way to get the best of both worlds is to have a separate branding budget to ensure that your performance metric is not straight ROI.
And now for the fun part. Everything online is negotiable. About three months ago, rates were considerably less negotiable than current market conditions dictate. With decreasing sales and marketing expenditures as a percentage of revenue, media buyers have increased negotiating leverage.
Try to negotiate your best rates up-front and work honestly with the publisher's sales representatives. Honesty is the key. When you renegotiate a deal based on performance, it is imperative that the sales representative knows you're not blowing smoke.
While negotiating your best rates, consider some important tactics.
First, buy integrated positions within a publisher's site to maximize ROI. Consider banners for branding your message and use text links, fixed positions and bonus newsletter sponsorships for performance metrics.
Second, monitor pay-per-click networks and incentive-based clicks closely if evaluating your media buy based on back-end performance metrics. However, run toward CPC deals with individual publishers. Finally, make sure to examine contracts carefully to ensure that the terms and conditions work in your favor.
Depending on the size of your ad budget, consider outsourcing your media placement to an agency. There are many factors to consider in hiring the right agency at the right time. It is critical that you begin a relationship with a clear, strategic quarterly plan and manage your agency's goals and expectations.
Splitting your ad budget among several agencies, combined with inhouse buying, gives you the advantage of flexibility but does not leverage an agency's core competencies. An agency of record agreement allows the chosen agency to work strategically for you and get compensated sufficiently to properly service your account.
As technology and the e-commerce environment rapidly evolve, so will your strategy. Stay focused and don't get discouraged -- in the online world, it's all about changing with the times.