Thursday, 22 January 2009

Data Driven: Small Business Missing Digital Opportunities

SME's are missing out on the greatest marketing opportunity ever made available to them; moving on-line. Traditionally small to medium businesses have relied on expensive marketing solutions such as print and TVC largely because these have been the only channels available to them. However, with on-line being where consumers are these days, why are more business' not taking advantage of on-line opportunities? Here are some basic guidelines for being more effective online.

1 -- Don't spend too much on the website. Most business' believe that the website represents their entire online presence. When in fact, for the majority of business it is only a sign like the one hanging outside your shop. Its purpose is to get people's attention. And like the sign outside your shop, without additional marketing, only the people that walk by will see it. Therefore, spend enough to make your point, but remember, for most business' it is only a "virtual" sign and little more.

2 -- Spend your on-line marketing dollar wisely

Paid search - This can be very effective in getting traffic to your site, but it is usually the most costly form and has low conversion (e.g. sales). If you have specialised services or can absorb the costs this may be a useful tool. Key points: paid search means every time someone clicks on your ad you pay! So don't tell your friends to "check you out" because every time they click it comes out of your pocket.

Display and banner ads -- These are not as costly as paid search but have a lower effectiveness rate. Estimates put click through on display ads at about .04% with a much lower actual conversion (sales) rate. So what may appear to be a better deal based on impressions and cost per click usually ends up costing more per client However, display ads allow you to put a little piece of you on a web page. That is, unlike paid search which is only text based, display allows you to use pictures too (cool!)

Social network and video -- This is early days for this form of marketing, but case studies from Prosperity Research suggest that is is more effective than paid search and display on several dimensions; sustainability and cost per click. Video based social network marketing that utilises high quality video and word of mouth techniques has show to result in cost per click about 1/4 the cost of paid search and produce long term search engine results without additional spend.

When exploring your online strategy it is best to always determine what you goals are. Your budget and desire to engage your customer will help you prepare a plan that fits your needs. There is no one perfect solution to get customers storming your doors. Different customers respond to different methods of marketing. So keep it simple and remember the Internet is inherently free so if someone is trying to sell you something, make sure you are getting your monies worth!

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