What Most Agencies Don't Understand...

What Most Agencies Don't Understand About The Web

By J. Kelly McKnight
President/CEO VIA Internet Studio

Probably the hardest thing for agencies to understand about web marketing and advertising is that things change every day. I'll give you an example: not long ago, banners on web sites averaged around a 20% conversion rate. This means that one in five of the people exposed to a banner clicked on it.

Today that average is .05%. That's one in 2000 people…a slight difference.

Yet some sites…and some banners…draw extremely high numbers. The difference is matching the demographics and creative to the right target audience.

Just like a great advertising campaign, this seldom happens by accident.

My company, VIA Internet Studio, builds-maintains-hosts-web sites. We also create the marketing programs to drive people to those web sites. Over the last seven years, we've built over 200 sites and have won 14 AXIEM Awards for "Absolute Excellence In Electronic Media" in an international competition.

In the past, we have drawn 150,000 visitors to a site with a single banner at a single web site. Broadcast email campaigns have drawn up to a 30% response. Search engine optimizations have taken from zero visitors to over 35,000 visits a month with over half coming from outside North America. A single online press release delivered 40,000 visitors the first month and held this number in the next three months…and then the number started to climb. Now, with a combination of email, direct mail, and search engine optimization to promote it, the site receives between 125,000 and 150,000 visits a month.

How do we do it? Knowledge, experience, hard work, contacts, and good creative. Miss any one of these attributes and you are headed for trouble.

One of the best things about marketing on the web is that results are measurable. So if you screw up, you know it pretty fast. For example, we recently sent 1.5 million emails to a targeted, double opt-in list. Our results fell well below projections.

Since we had used the creative on another mailing, we knew we could expect between a 6.8% and 10% response rate. Therefore, the problem had to be with the list or how it was sent. We worked with the list company and found a programming problem was causing major ISPs like AOL to reject our email as spam.

I could give you lots of other scenarios but lets just say that unless your agency has people dedicated to web marketing in creative, media, and programming, you are going to have a very hard time keeping up with what's going on with the web. You are better off and your clients will get better results if you outsource to a company that does it 24/7.

To help you understand some of the terminology, I included a short glossary of the jargon:

Hit

These are generally worthless, you're more interested in visits. A hit is registered each time a browser request is made from a web server. If you have a web page containing four graphics, each page display will count as five hits.

CAC (Customer Acquisition Cost)

This is the cost of obtaining a new customer. You divide your total acquisition expenses by your total number of new customers. For example, if your $100 ezine article produces 30 new customers, your CAC is $3.33.

CTR (Click Through Ratio)

The number of people who click through a link or banner compared to the number of people who view it. If 2 site visitors out of 100 click through a banner, you have a CTR of 2/100=.02 or 50:1 (or 2%).

CPC (Cost Per Click)

This is the cost of attracting a visitor to your web site. You calculate it using the following formula: CPC=CPM/(CTR x 1000) If you paid $45 CPM for a banner ad with a CTR of 1%, your CPC would be $45 / (.01*1000) or $45/10 = $4.50). Each site visitor is costing you $4.50.

CPA (Cost Per Action)

This is an online advertising model in which the advertiser's payment is based on the number of people who perform the Most Wanted Response (i.e. subscribe, register, purchase, etc.)

PPC (Pay Per Click)

In this advertising model, payment is based on qualifying clickthroughs. The publisher delivers your advertising material to qualified viewers. You are charged for each one that clicks through the ad.

PPL (Pay Per Lead)

In this advertising model, payment is based on qualifying leads supplied. For example, a publisher might pay you a set amount for each visitor you send who subsequently provides contact information or subscribes to an ezine.

PPS (Pay Per Sale)

This is an advertising model in which you are paid a commission for each qualified sale that results from your activities. A final word to wise, if you hear a lot of jargon, duck. People just use it to hide from what they don't want you to ask. Keep to straight English and eventually you will find out what you want. If not, call us. It's what we do every day.