The E-conomics of E-Marketing

I apologize for this rather long-winded look at marketing econonmies on the web, but the simple fact is web ad revenues are projected to increase 15%. Follow the ad revenues.

So, if you’ve been relying on the local newspaper, direct mail, auto-responders or some other marginally effective marketing as a solo, keep reading.

Time to go digital, amigos.

Advertising – Changing Course

First, share prices of advertising and marketing companies are at annual lows on the day of this writing. Investors aren’t ignorant of what’s taking place. The traditional marketing outlets…well, they’re on their way out.

Newspaper revenues have been heading south for years and magazine advertising, predicted to grow at 4.1% in ’07 according to ZenithOptimedia will actually come in at 2.5% to 3.3%. “Shrinkage,” as George Costanza would say.

Part of the reason for this has been mass advertising’s slow response to web-based advertising. Consider this: thanks to the remote, I don’t have to sit through annoying commercials. I have become adept at getting back to the show I’m watching with just seconds to spare. But I’m not watching commercials, that’s for certain.

And though I get a couple of newspapers a day, I scan the news (which is already old thanks to digital technology), glance at the sports page during baseball season and see what Mike Doonesbury is up to.

Then, I spend eight hours a day (sometimes more) online, conducting research for articles like this one. Right now, on screen I’ve got an ad for Forbes magazine and Adify, purveyor of ads for vertical market segments, i.e. niche markets. Here’s what Adify offers versus the local newspaper:

• Achieve greater reach and impact with unique targeting

• Choose from quality networks created and managed by leading brands and experts

• View and control exactly who (within and across networks) runs your ads

• Run IAB Standard rich media, video, display or text ads

• Target any ad format across quality branded and niche sites

This ad placement service is the direction we’re all headed – finding ways to get our company’s message in front of more eyeballs. You already see it on TV with product placements in TV shows and the “Lo-Jack Caught Stealing” replay during the sixth inning. Advertisers know we surf or skip the commercials when we TiVO so instead of shredding out the commercials, they’re interwoven into the content itself.

In fact, you can’t watch a sporting event without being bombarded by product placements and ads. All the players on certain college teams wear a certain brand of shoe. Why? Because all the players love the shoe? Of course not, the manufacturer pays big money to display their logo on athletes’ footwear.

The Death Throes of Ink
My local newspaper has been sold three times in the past 12 months. It’s a hot potato – it doesn’t have any other print competition and they still can’t turn a profit.

Search engine localization (local search) is changing the entire dynamic of advertising. Instead of spending money on a one-time insert that may or may not pay for itself, car dealers, appliance stores and even the big boxes are hopping on the web bad wagon. These big retailers know which way the wind blows. They also know why people are turning to the web rather than the local paper.

More features. Greater convenience. You can log on and conduct a search for a car in a specific price range, specific make and model – even location – and in seconds have full-color pictures of your options that day. Print advertisers aren’t going to deliver that kind of response. In most places, Saturday is car day in the papers. The last section or two are dedicated to all the different cars on sale at local dealerships. You may have noticed this because a lot of car shopping takes place on Saturday.

But the car dealers who depend solely on this arcane form of advertising are going to be blown out of the water by specialized search engines that equip the user to find the best deal to a completely-customized auto within a 35 mile radius.

Print can’t compete on that level. It lacks the ability to interact with the user in a fully dynamic way.

The Future and Your Place In It
You’re looking at it. You’re reading it.

The Director of Forecasting at ad giant Universal McCann, Bob Coen, downgraded his forecasts for ’07 from 4.5% ad revenue spending growth to 3.1%. However, Coen believes that ’08 will see a 5% growth in total ad revenues, with less and less of those revenues going to traditional promotional outlets like local cable, newspapers and regional magazines – older forms of accessing potential buyers.

The money is being spent on web advertising and you can take advantage of it as both a seller of goods and owner of a web site. Either way, you can generate more revenue than through traditional media.

Want to watch a music video on AOL? OK, “but first a 15-second message from our sponsor.” The sponsor, BTW is always targeting the young, tech-savvy user since gramps wouldn’t know a music video from another “danged” commercial.

Bank of America’s financial analysts lowered their stability rating of The New York Times from a neutral to a sell – definitely an indicator of how large, institutional investors are turning away from print and putting those ad dollars on your site – or on somebody’s site!

How to Sell Ad Space on Your Site?
The easiest way is to become an affiliate. You don’t exactly sell ad space but you collect a small piece of the sales transaction and maybe a flat fee for each successful click, for example. But you aren’t going to attract the deep pockets advertisers through an affiliate program. At least not efficiently and cost effectively. What are you going to do? Call the marketing director at Coke?

It’ll cost you to use online advertising placement services, put it may be worth it – especially as a means of generating some cash flow quickly.

There are plenty of online ad agencies that can help design a cogent marketing plan – one that places your ads in the right places on the right pages of the right sites as well as generates some cash by selling space on your site.

However, before you contact one of these digitally-based agencies, consider the following:

1. How much can I spend on marketing? If the number is small, or even less than zero, please refer to the posts on viral marketing because it’s going to take cash to see some company flash on high ranking websites.

2. The guy with the checkbook is always boss. If you’re placing ads, you can and should stay involved through the entire process working with your account executive. If a well-branded player wants to place a big banner on your home page, and the money is right for you, go for it. Give the boss what he, she or it wants.

3. Never sign a long term contract with an agency. Anybody can call themselves an online ad agency but if you aren’t seeing soaring results, you want to be able to bail ASAP and find a more productive agency.

4. Learn to listen. You may know everything there is to know about drill bits but give the ad pros a chance to soup up your bottom line. However, if you don’t start to see noticeable results in six months, move on to another agency.

Why Digital Advertising?
Digital is digital is digital.

Once a marketing piece has been created, it can be formatted quickly for use through a wide variety of media including digital computers, digital cell phones, PDAs (digital) and, of course, digital video (DV), including digital HDTV.

So, for deep pockets advertisers – the IBMs of advertising – this enables the marketing department to create content once, format it six ways from Sunday and blitz the entire media spectrum using the same content.

You want to be a part of this marketing tsunami heading your way? So, okay, maybe become an affiliate – just to try it. If it works, great. Good for you.

But, also, consider selling ad space and buying ad space on relevant sites. Use one of the hundreds of online ad agencies that are all reading from the same book. Then, monitor results.

You don’t want excuses. You want results. That’s the only way to measure the success of your agency’s marketing plan.

If you’re paying an agency and NOT seeing spectacular improvement in sales, your cost of acquisition (CPA) is soaring, your inventory is piling up in the garage and your online advertising account executive is mysteriously away from her desk whenever you call.

Ad placement should create synergies between your site and the host site or, if your’s is the host site, it should generate lots of sales for the advertiser and some dependable cash flow for you – especially during the first few months of operation when outgo far exceeds income. Placing an ad on your site for Ford or Toshiba will, indeed, generate ad revenues and the higher your PR the more $$$ you’ll earn.

Or, if you’re the advertiser (the one paying for the advertising), at least in theory, you’ll see more click-throughs, site traffic and revenues. Advertiser or host site – either way, there’s money to be made online so stop the presses and join the millions of commercial site owners who have recognized that print is NOT growing, but digital is.

Which side do you want to be on?

 

 

Sorry for the long-winded post. Peace, Out!

Hackers, Crackers and Script-Kiddies

You log on to your site and notice that, from your administrator’s console, things don’t look right. So you search the site access log and discover the worst. You’ve been hacked. You’ve got a bogus IP address listed in the search log and when you try to access the intruder, all you get is a 404 error message – Site Not Found.

Now what do you do? What did the hacker do? Is there a digital ticking time bomb buried in your site’s code? A Trojan horse, perhaps? And what about that sensitive personal data stored on your site’s database? You know that’s been copied, even though a quick check of MySQL reveals the database is still in tact. Even so, that sensitive data has been compromised.

Any site is vulnerable to hackers, crackers, script-kiddies and other black hats regardless of how many layers of security you have in place. Remember, hackers never sleep and they’re always looking for web site vulnerabilities. These guys could have gained entry to your site in lots of different ways. By placing an order or opting in for your newsletter. Once contact is made, security is more easily breached.

You’ve got a problem. So, never let it get this far.

Keeping the Bad Guys at Bay
Once a site has been hacked, getting it scrubbed clean and back online can be an arduous, time-consuming-money-losing proposition. Better to keep those evil-doers out from the start.

Check your host server’s configuration. Ooops, forgot to do that.
Revisit your server configuration. You can buy the best, locked-down-tight site security but if it isn’t properly configured with server side software it may provide a false sense of security, as in you aren’t getting what you paid for.

Synch up for safety.

Keep security software and hardware current.
We all know that the hacker community doesn’t have much else to do except sit around devising new ways to circumvent the latest patches from Microsoft or security software developers like MacAfee. The security software programmers know it all-too-well so 24/7, there’s a battle going on between security programmers and hackers looking for a trophy and web creds from other hackers.

Update in-place security regularly. Log on for patches and fixes.

Keep meticulous records of all software. (Keep the box.)
Maintain a record of all software in use to support your business including edition number, i.e. XYZ 2.0. Also user key codes and other information that’ll come in handy if a hacker does get through. An online security company needs to know as much about your software as the hacker did. Make it easy for that company by providing make, model and serial number.

Review log files.
At least once a day, check your back office logs to make sure no one has dropped by unnoticed.

Good time to bring up permissions. A lot of small companies maintain a network of computers. One in customer service. One in accounting and so on. A network is a must for even small businesses today, small businesses that rely on the office network to access business data and records of activity.

This requires the company owner to develop a permissions log – a directory of which employees have access to what company data. All departments and employees should not have access to all data. Only that information required to do the job.

Limit the number of permissions. Limit access to data. And train employees in safe and secure online practices, i.e., email scans, daily virus scans across the network and so on.
And worth another mention, keep access logs up to date. Close out all ex-employees and others who have no business looking at order tracking data.

Stay current on viral epidemics.
First, always keep site security in mind. Consider it a key part of your job as online business owner. That requires a pro-active approach to security. And that requires a knowledge of the latest in frauds, scams, schemes and viruses.

A new virus, once discovered, is almost instantly identified on webmaster sites, on security software sites and, of course, on the Microsoft download page. That’s good. It prevents a local epidemic from becoming a pandemic. Keep up with the latest in hacker tactics and the cures offered on the web. If you wait, your site is vulnerable to a viral injection.

Bulk up your passwords.
This is a simple step, it doesn’t cost a penny yet many site owners still insist on using their pet’s name as the administrator log on. Anyone who knows the site owner will be able to hack the site in, oh, about 10 minutes.

Limit access and create undefeatable passwords. Dictionary software is easily available on hacker sites. These programs go though millions of letter and number strings a day until they generate the actual password. So, extend your passwords, use letters, numbers and symbols, and change them often.

Change all passwords whenever an employee leaves the company.

Run a check of all content generated by third parties.
You might download a FREE counter and pick up a dose of key-logger software – software that logs every key stroke made by you and other members of the office network.

Evaluate the source of the content. For example, sites that syndicate content via RSS feed should be Googled and checked by you, the web business owner. Any third party content can be booby-trapped so be careful. As mom used to say, “You don’t know where it’s been!”

Check your links. Check their ads.
Links are important to building connectivity within a small market. But a link is also an access point for a black hat so always consider the company you keep. Inbound links can be used to inject malware.

Same with paid advertising. Some “company” may be pay you $50 a month to advertise on your site, build a shell site or mirror site and steal your sales. You might not notice it for a couple of days – and by then, your legitimate business could be out $1,000s in sales and you’re facing a boggy mess of customer complaints that are only going to cost more to repair.

Just because an advertiser “sounds nice on the phone” doesn’t mean that she’s running a legitimate business. Know what’s on your pages. Know who’s on your pages. If it looks funny, or your instincts tell you something’s not right, do you really need that extra $50 a month? Take care with those who reach out to touch you. They may be picking your pocket.

When you grow, hire a pro.
When you’re just starting out with a new site, money is always tight, always a consideration. In this case, go with a reputable web host that maintains high levels of server security, including security against cross-server (X-server) attacks. And if this is all gibberish, call the tech support team at your hosting company.

However, at some point, when that online business has grown from a part-time hobby to your sole source of income, congratulations. Now hire a pro.

Site security is no longer a priority. It’s become the priority once you’ve quit your day job and now rely on web traffic to pay the bills. Have a security pro check your system and, if merited, hire a security service that tracks attacks on your site, providing higher levels of safety for your “hand-built” digital business.

Yep, despite the fact that the web has been gussied up in recent years, it’s still a lawless frontier in which you have to protect yourself. The web police don’t exist so forget the 911 call. It won’t help.

The secret to a secure site is constant vigilance and automated convenience. Buy good security ware. Properly configure with server security. Update regularly and keep track of who comes and goes, whether an employee, a link-in or a paid advertiser.

Keep security front and center. It will keep what’s yours – yours!