How traditional and new media differ and the implication for marketers

The rapid rise of the Internet as a viable marketing communications medium has been challenging for traditional media organizations and marketers alike. One area where a significant shift in thinking is required is in the meaning and use of the data associated with search marketing and how it differs from the data associated traditional media.

Traditional media channels provide detailed demographics of their target audience. The nature of demographic data requires advertisers to make a fundamental assumption: the intent of an audience can be inferred based on who they are. For example, a magazine that delivers “new mothers” is probably a good place to advertise baby products such as diapers, formula and strollers. But even a marketer of deluxe strollers understands most of the new mothers designated as readers of the magazine (impressions) will either not be receptive to purchasing a new stroller or will not see their ad, for example:

• they’re satisfied with the stroller they already own;
• the premium price is too high;
• they didn’t read the magazine that month even though they subscribe;
• they didn’t see the ad because of its placement.

However, placing the ad still makes sense because the total size of the audience means only a relatively small portion of the readers need to be receptive to buying a deluxe stroller. Under this model the marketer pays a flat fee to the magazine with no easy way to link stroller sales to a particular advertising placement.

In search marketing the fundamental assumption about the target audience is the opposite: intent can be inferred based on what they do. To extend our stroller example the search, “where can I buy the best stroller” could be made by individuals from a broad range of demographic categories, for example:

• a new mother;
• a new father;
• mother of a new mother;
• father of a new father;
• single friend of a new mother;
• teenage sister of a new mother.

The marketer in this case might target all searches that include both “buy” and “stroller” Unlike traditional media, the market would actively try to reduce the number of impressions perhaps by excluding searches including the words “cheap”, “affordable” or “used” and could further limit the audience to specific geographic areas. Demographics in this example is simply not a factor. Under this model the marketer pays only for performance (clicks), where each click can be linked to the ad displayed, the conversion (capturing the identity of the searcher) and the sale. The volume of searches (impressions) including the words “buy” and “stroller” could be high or low but the key criteria is only that the target phrase provides a profitable return on investment. This is because a successful paid search campaign is based on profitable activity from hundreds or even thousands of target phrases, each with different search volumes.

The message is the content

Another important difference between traditional advertising and search marketing is the mindset of individuals consuming traditional media versus those who are searching. Traditional media places advertising messages in proximity to the primary content. A traditional ad, and this includes most Internet display advertising, must distract the reader from the primary content to be successful, which is why Seth Godin famously dubbed it “Interruption Marketing”. In contrast, when individuals are searching the results list is the primary content, which is made more powerful because the results are presented to searchers at the peak moment of their interest.

Closing the loop

“I know half my advertising is working, I just don’t know which half.”

This quote from the halcyon days of advertising highlights the value of advertising that can be tracked. From this perspective, the Internet – and search marketing in particular – is a marketer’s dream come true. Every action of every individual browsing the Internet – including the specific keywords they use in searching for products and services – can be captured and used to refine the effectiveness of online marketing and to find new markets. “Closing the Loop” is finally possible –especially for online sellers. This means means knowing the original source(s) for every click, every conversion and every sale. This means knowing the total cost of your marketing and if you’re getting a positive return on investment. This means not only knowing “which half is working” but just as importantly – which half to turn off.

In the inbound marketing services side of our business, we get to review a lot of PPC (pay per click) campaigns to help prospective clients determine if we can achieve better results.

Even though I see it all the time, it never ceases to amaze me how many of the accounts we review seem to be focused on getting as many visitors as possible for the allotted PPC marketing budget. The bids are low and the keywords are loosely and broadly targeted, resulting in the showing of ads to a large number of untargeted visitors, thereby generating large numbers of low cost and low value visitors.

I shouldn’t be surprised, given what we see in the mainstream marketing media. A recent article in Direct Marketing described PPC marketing as a good way to “create awareness about a brand or the launch of new product by generating traffic to a website”. In the article the author was promoting CPA (cost per acquisition) campaigns as an effective alternative to PPC. This is a false dichotomy.

Paid Search Should be Focused on Cost Per Acquisition

PPC marketing campaigns that are intended for lead generation should be laser focused on cost per prospect, lead, opportunity and sale over any other metric. These metrics are the only true measures of value for a campaign that is focused on lead generation. Implementing tracking systems for accurate measures of these metrics is not necessarily easy, but it’s well worth the effort.

Creating targets for the cost per opportunity and sale and focusing on developing a laser targeted campaign that attracts exactly the right visitors (who are most likely to convert to a lead or sale) is a much more effective strategy for a B2B campaign. A monthly budget limit can still be used, but the number of leads generated will be far better than any campaign focused only on attracting cheap visitors. And if the organization has no problems related to inventory or fulfillment of the business (a surprisingly common problem) – it may well be determined that the budget should be increased based on success to scale as far as the search volume allows to deliver even more leads to the sales force.

Tracking Leads, Opportunities and Sales

It can be quite challenging to set up accurate tracking mechanisms to measure the cost of sales down to the campaign and keyword level, particularly in B2B markets with high value sales. Some of the problems include sales being closed offline, leads being delivered to partners or through a channel, multiple people in the purchasing decision, or even internal resistance to measurement where it’s perceived as a threat.

Even with these obstacles it’s still possible to implement detailed, closed loop tracking and measurement, and it must be done to run a PPC campaign profitably and competitively. It may take changes to the way leads, opportunities and sales are managed, but it’s well worth the effort.