August 02, 2007

Investment In Online Marketing

Online marketing is an enigma.

Considered by many to be direct marketing, online marketing more closely aligns with retail marketing than with direct marketing.

And this is a problem, if you are a traditional direct marketer.

Take paid search, as an example. In traditional direct marketing, you get to pick who receives your marketing message. In paid search, you get to pick how much you want to spend on a keyword. The search engine orders bidders on the basis of how much each bidder is willing to pay. The customer picks the bidder s/he wants to research.

The most popular and most effective online marketing craft is not really direct marketing.

Long-term, this means that the online marketer doesn't control her business.

The catalog marketer always controlled her business. She spent "x" percent of her budget mailing catalogs to best customers, "y" percent to marginal customers, and "z" percent to prospects.

The catalog marketer dictated the relationship with the customer.

The retail marketer did not control her business. She controlled location, product, presentation, and the channel she wished to advertise within.

In online marketing, the customer dictates the relationship with the marketer.

In catalog marketing, if your board of directors require you to double the size of your business and gives you infinite resources to accomplish the task, you can double the size of your business.

Can you accomplish this task via paid search?

Some Multichannel brands have learned that more than half of the customers who respond to paid search are existing customers, occasionally best customers.

If your board of directors wanted for you to spend $5,000,000 acquiring new customers via catalogs, you'd talk to Abacus, and open up the floodgates. You'd acquire a lot of new customers.

If your board of directors wanted for you to spend $5,000,000 acquiring new customers via online marketing, how would you accomplish this task?