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Ask the Hard Questions: How do you make money?
How do you make money seems like a very personal question. However, it’s a very necessary question for any marketer to ask. How can one doing marketing for someone if they don’t fully understand the entire business model?
I was talking to a potential advertiser today, and the website seemed like it had a half dozen ways it could be making money, but I was sure that behind the scenes there was only one of two different actual conversions going on. So, I bluntly asked ‘How do you make money?’ Of course, I could hear people cringe.
Its one subject many people consider personal and would rather leave the sensitive conversation to after the deal was closed. However, the site owner quickly responded that he sold ad inventory on his site. The conversation then turned into a barrage of numbers.
"What’s your average sale?"
"$500"
"Next step, what’s your conversion rate?"
"Let me check, 7%."
I was impressed, not many people can give me their conversion rate in under 30 seconds. "That’s pretty good. What are you considering a conversion?"
"Someone filling out our lead form."
So a conversion isn’t money yet. So then the next question becomes, "what percentage of your leads turn into sales?"
"25% exactly last month."
Even more impressed that number came without evening having to look anything up. "What’s your CPA [cost per acquisition]?"
"$30, although I wouldn’t mind paying more if we could get more total conversions."
"Let me double check my math. At present it’s costing you $120 per sale. A sale is worth $500, so net of $380 per sale at present." I thought for a moment, "What is the absolute most you’ll pay per sale?"
"$200, I have to pay my sales people and keep some profit."
"What is your monthly budget?"
"I don’t have one. Under $200 per sale and I have unlimited budget."
I’ve heard that many times before. I think he sensed my hesitation about that as he quickly followed, "Our current budgets with Overture and Google total around $50k a month. That’s not an issue at all. Since we’re being paid on sales immediately, we can roll those dollars directly back into the accounts. I really do mean unlimited funds per month"
That brief exchange is now over, and I have enough grasp on their model and PPC to go into their account and have a look around before finalizing any proposals. They trust me enough to give me these numbers, which is important.
They trust me with their marketing, and at some point a trust factor is necessary for any ongoing relationship.
The brief exchange also means I have these numbers as a benchmark:
Max CPC: $3.50 (account wide) ($200 (CPA) * 0.25 (sales call closing %) * 0.07 (website conversion rate))
Sales conversion rate: 1.75% (0.07 * 0.25)
Max CPA: $200
It’s always enjoyable to talk to someone who just ‘gets it’. One of those people you think after a few more conversations that you can develop a great relationship; but that has yet to be seen. They know you’re being paid per hour. You know how they’re getting paid. The money is on the table - everyone understands how everyone else is making money. The money questions aren’t just out of the way, they’re a segue into many more conversations about CPC, conversion rates, split testing, etc. Things that you both have a clear understanding how they work - because you both now understand the numbers.
Don’t be afraid to talk dollars. You both are getting paid. You’re both making money. Figure out how. Let the numbers tell their own story.
Reporters Without Borders Blog Handbook
Interesting eBook by RSF.org for reporters in other countries to learn how to blog, and potentially do it anonymously. Looks like it might also be a very good introduction to blogging book.
It’s published as a book for “Handbook for bloggers and cyber-dissidents”.
Google Diagram
http://www.vaughns-1-pagers.com/internet/adwords-adsense-diagram.htm
Interesting diagram about adwords & adsense - review to see if it’s any good.
Competitive Filters
Great post on the AdSense Blog about competitive ad filters.
Tip 1: Don’t use “www” in your Ad Filters
Tip 2: Don’t believe the myth about blocking ‘low-paying advertisers’
Tip 3: Don’t go overboard with filters
Certified Public Accountant Marketing
You’ve listed your business in the phone book, have great word-of-mouth popularity and you’ve taken the time to have an attractive website put together. But even though you’re a certified public accountant, things aren’t quite adding up.
It’s no surprise that you’re not content with your current marketing strategy.
Things move fast in the world of online advertising, with new methods and properties emerging faster than the layperson can keep up with. One of the fastest growing online marketing methods is local, search-based online advertising.
Search-based online advertising takes advantage of the most current trends in information technology to connect advertisers with potential customers. So how exactly does this method yield such superior results to other types of marketing?
The difference is that search-based online advertising is a highly focused, cost-effective marketing technique that places your ads in front of people that were already interested in what you have to offer.
When tax season comes around, you don’t want to miss out on the busy month because some other quick-on-the-draw certified public accountant beat you to counting the right set of beans.
When you do the math, you’ll find that the answer is an affordable, highly directed Internet marketing strategy. If you run a small- or medium-sized accounting firm, you know that when it comes to making your business grow, every dollar counts.
Local competition can be fierce, with the general public often being unable to understand exactly what sets your service apart from that of your competitors. Any professional faces challenges in communicating what they can do for their potential customers, but on today’s tough playing field, you need to take advantage of whatever will give you that competitive edge.
With all the headaches faced by conscientious certified public accountants-ranging from such technical, nitpicky problems such as mastering annual updates in tax code to the more general difficulties inherent in starting a new business-take a load off your mind with a marketing technique that will bring in customers while making sure you stay in the black.
Audience Identification - it’s not always who you think
Often when I hear writers talking about audience identification, I think how difficult this often is for broad marketing messages. If your audience only has one characteristic in common, writing towards just that one statistic makes it difficult to carry an interesting message that’s meant for everyone.
However, sometimes redefining the audience can be very effective.
I received a letter today; well, actually I didn’t, my Yorkshire Terrier did. The letter was written to my dog, and used my dog as the audience, in explaining to him the importance of getting checked every so often and what needs to be done.
I’ve received several of these letters in the past being addressed to my cats or dog, but these letters never carried the message all the way through that my pet is the intended audience. Nice small words, short sentences, and never breaking character as if the dog was actually reading the letter were used in this letter.
This was a great less in audience profiling. It caught my attention (I’m writing about it aren’t I?) as if I was reading a letter written for someone else, thinking what a good information that is, and how I need to take my pets back to the vet. The letter never addressed me in any way - fantastic.
When writing about your audience, do you always cater to a single characteristic, or is there another unique method you can use to identify with your readers?
Keyword Research Tools
Knowing where todo keyword research is as imporntant as knowing
how to do keyword research.
Just Keywords:
AdWords Sandbox
Overture Suggestion Tool
7Search Tool - (like overture for 7search)
iotaweb
Miva Tool(like Overture for Miva)
Multiple purposes or engines:
Overture/Wordtracker Info:
Pixelfast - framed overture suggestion & bids
Digital Point overture/wordtracker comparison
Similar:
Keyword Map - similar & kw maps
Lycos - has a ‘narrow results’ - related keywords
Ask- has a ‘narrow results’ - related keywords
Alta Vista - has a ‘narrow results’ - related keywords
Thesaurus - one of my favorites still
Competition Watcher:
GoTo to Overture to YSM - Timeline
YSM was the first company to take full advantage of the pay per click advertising model with large syndication deals to third party search engines. The distribution network they started several years ago has never slowed down, and YSM continues to look for new and interesting ways to introduce their model in not only search engines, but in other forms of media as well. They’ve had quite an interesting history as they went from a small startup company to one of the largest search marketing reaches. Here’s a brief history of a small company known as GoTo.com.
1997: GoTo.com launches.
GoTo.com was founded by ideaslabs. It did not yet have a public offering.
February 21, 1998
GoTo.com presents a proof of concept testing at TED8.
With little fanfare, the new paid search engine launched. For the first year of GoTo.com’s existence, most advertisers received little traffic, and the engine seemed to brand itself as more of a search engine than an advertising platform.
June 15, 1998: GoTo.com announces backfill deal with Inktomi.
This was a big breakthrough for GoTo.com. It began to backfill its paid listings with search results from Inktomi. This allowed the search engine to further brand itself as a search engine because it could now show results for any search query through Inktomi’s technology.
The first major milestone for GoTo.com on the advertiser front. Passing 1000 paid advertisers was a big deal, but the search engine was still unfriendly to many of those advertisers as there wasn’t a self serve platform.
June 1 1999: GoTo.com launches toolset to let advertisers take control.
The largest change from a rep based system to a self serve system. GoTo.com launched a toolset to allow advertisers access to keywords and real time bidding. Today, this toolset is known as the DTC or direct traffic center.
June 1999: GoTo.com goes public.
In a short two years, the company went form being launched to going public. This shows the vision and foresight of many of its founding members.
Oct.8, 2001: GoTo.com changes its name to Overture Services.
The first of two re-brandings for the paid listing search engine. It changed its name to Overture Services.
November 20, 2001: Overture teams up with Yahoo.com.
The first major destination deal for Overture occurred when Yahoo began to feature the paid Overture listings on Yahoo search results. This quickly became the mantra for Overture. As it realized it wouldn’t compete with other portals as a destination zone, it began to partner with these portals to give its ads visibility and for the search engines to further monetize search results.
March 2003: Overture buys AllTheWeb.
Overture’s first move towards owning it’s own search technology was acquiring Alltheweb.
April 28, 2003: Overture completes purchase of Alta Vista for $106 million in stock and cash.
Alta Vista was once one of the major search engines with its own user base and technology. Overture acquired them and began to implement some of its search technology into their result sets.
Oct. 7, 2003: Yahoo completes purchase of Overture for $2.2 billion in stock and cash
Yahoo acquires Overture. Overture had become a major income stream for Yahoo, and was very dependent on them for search based revenue. The purchase of Overture gave Yahoo control not only over Alta Vista, and Overture. But soon became the first portal to own 4 engines as Yahoo now owns Inktomi, FAST, AllTheWeb, and Overture.
April 18, 2005: Overture Services changes name to Yahoo Search Marketing.
The second major re-branding effort for the paid listings provider. In an effort to brand Overture as an integral part of Yahoo, the thinkers at Yahoo changed the name in order to show the synonomity of these two systems and further attract advertisers with a self serve Yahoo branded model. At this time, Yahoo Local was also bundled under YSM control, although the local advertising remained unsupported by YSM staff and is still quite early in its development and monetization stages.
From small roots with an idea, GoTo.com went from a small company to becoming an integral part of one of the top internet platforms known as Yahoo.
Domain Hunter
http://web-professor.net/tools/dh/ domain suggestion tool based on type in traffric
AdWords to RSS Feeds
http://www.threadwatch.org/node/3882
http://www.reprisemedia.com/feedcast.aspx
Takes ‘breaking news’ and makes adwords feeds out of them. Does it quickly?
Google AdWords
Seminars for Success
Learn about Google AdWords from experts hand selected by Google.
These seminars will educate advertisers on the creation and management of successful AdWords campaigns.
Upcoming Seminars:
Phoenix AdWords Seminars January 22nd & 23rd
Austin AdWords Seminars January 28th & 29th
Learn More about the Seminars:
Seminar Information
Official Google Seminar Page
Suggest a new city
Brad Geddes
Leslie Clark
Other Memberships
