Targeted Ads Not Always the Best Value

What if you could create a foolproof marketing plan? One that always brings you as many customers as you want, at a cost per acquisition that continues to decrease.

It’s not as difficult as you might think. There are already several easy methods to increase the return on an Internet marketing campaign. The key is to quickly test and analyze results so you can make an educated assessment of the success of the marketing campaign.

The first step in optimizing your marketing efforts is to understand that the Web is still a wild, untamed emerging media. The notion of having a gut feel for what should work needs to be temporarily tossed aside. It is too easy to fall into the trap of only advertising on sites that seem to have the right demographics and reach. It is more valuable to make choices based on fact. What may appear to be the worst advertising space may have a better percentage on return. Often, there is no formulated answer to understand what will work and what won’t. The only real way to know is to get out there and test, using the right measurement tools.

A common practice among Internet companies, especially small or newly emerging ones, is to go for the highly targeted, hefty CPM ad space. The assumption is that these sites will bring the best return, but this is not always the case. There are some potential problems in purchasing the highly targeted banner space. For example, the nature of the space may limit the clients touched, or it may produce users who click but don’t buy. Also recognize that a great conversion rate may come at a high cost.

From the two campaigns shown in the chart, you can see that even though the click-through rate and conversion rate are better with site A, the cost per customer is lower with site B. Without looking at the right data, a marketer may inadvertently drop some of their best performers. Also, by taking your ad budget and spreading it over many sites rather than a few, you can avoid falling into the high-cost-limited-reach position. Test which media sites really work for you and drop the ones that don’t.

The next logical marketing optimization strategy is to test a particular category of media site. There will be categories for each company that are imperative to advertise on and others that should be avoided. Categories can be thoroughly tested through buying media on several media sites within a particular category. This provides a more realistic feel about categories that work and those that don’t. Successful marketers test the obvious as well as the obscure, often finding hidden jewels in a category that is not necessarily a logical fit.

Testing graphics and creative are where most Internet marketers already spend much of their time. Appropriate testing is crucial. Perhaps the “flashing” banner will not work on a particular media site, but the provocative one may. This is a good way to tell whether it’s the media site or the creative element that is attracting interest. Once you know which aspect of a campaign is not performing it is easier to create and implement things that will.

Closely analyze the test data once it is gathered. Look beyond just click-through rates to the key metrics for your company. It might be lead generation or number of downloads. Determine the maximum cost you can afford to acquire a customer.

Look for the trends where that cost is lower than the maximum. Is it within a category of media site? Is it lower for a certain creative-type banner? Is it lower when you send people to the jump page with the free offer? Is it lower for direct mail and banner ads?

The pieces of the marketing puzzle start to come together as you turn the data into knowledge. The testing process outlined here is critical for a successful marketing campaign. Quickly determine which methods work best for you, then implement and further optimize them by repeating the testing process. It might be that e-mails work much better than banners. Or offline direct mail pieces might work well in conjunction with an online text campaign.

Finding the right mix of advertising types is essential to increasing the volume of activity at the lowest cost. Often a mix of marketing elements is the most productive. A successful return on an advertising campaign is the goal, and these methods provide knowledge and understanding so the best marketing mix can be determined.

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