The simplest way to think about online marketing is that you can track how much money you are making from people visiting your website. Once you understand this power then you can create strategies to optimize your profits. For example, let’s say we can buy traffic for $1.00 a click on Google, we know that 25% of the traffic converts into a sale. Then it costs us $4.00 to acquire a customer. Let’s also say that we know that the average customer spend is $100 and our profit on that is $20. You can see how powerful this is as now the business just needs to find more traffic sources where the average cost to acquire a customer (price per click * traffic conversion rate) is low.
Since you can track everything online, this example is just the beginning to thinking about all the traffic sources and business models that exist. For example, on many sites you have to Signup or Register. We track the signup rates and can tell you exactly how much it costs to get a user from each traffic source.
Here is a very simple visual I like that shows the feedback loop we create where we let the data speak for itself. Using this methodology in advertising we can tell if something is working or not within a few days and adjust without spending tons of money.
Next, I think it’s important for the client to understand that every business is different and requires the experience to know which marketing channels make the most sense for the business. For example, social media can be a really great channel, but brands need to understand the maintenance costs and how you can’t control the messaging like you can with advertising. Another example is that sometimes search marketing isn’t the best method of advertising as sometimes their just isn’t enough volume on the search term. That said, below is a great graphic from a colleague that shows some of the various channels we use in online marketing.
Lastly I really like to show clients this graphic as it helps them to understand a layer deeper. This is at the content level and how we can plan around making different content plays.