Online Marketing

Online MarketingMarketing and E-CommerceInternational Master in Industrial ManagementFrancisco Hernández Marcosfran.meMadrid, 20th January 2012

About me SHAMELESS SELF-PROMOTIONEducation:Universidad Politécnica de Madrid, UNED, LondonBusiness School, University of ChicagoFirms I worked for full-time:Abengoa, McKinsey&Co, ABN AMRO, Real Madrid C.F.Entrepreneurship: CrisaliaConsulting requests (Social Media & Internet):francisco_hernandez@11goals.comFull profile:linkedin.com/in/franciscohm

Two key questions when doing E-Business REMINDER How do I make money from my website? (Business Models, day 1) How can I market my website?

Agenda  Online advertising  Affiliate programs  Referral marketing  Email marketing  SEO  Content marketing  Online public relations  Social marketing (next session)  Fake marketing

Online advertising industry map See definitions in “The Online Advertising Technology Marketplace”Source: Progress Partners

Pricing modelsType Description Comments •Advertiser pays a fee every • Have to measure impressions. time the ad is shown • CPM: Cost per thousand impressions. PPI • Ej.: Brand awareness/building. (Pay per impression) •Advertiser pays a fee every • Have to measure clicks (both sides). time the ad is shown AND • The network work to target customers who click. PPC clicked • CPC: Cost per click (Flat or Bid). • CTR: Click-Through-Rate. (Pay per click) • CPC=CPM/1000*CTR. • Ej.: Simple transactional business. •Advertiser pays a fee every • Have to measure conversions (both sides). time the ad is shown AND • The network works to target customers who convert. PPA clicked AND a target action is • Integration between Ad network and landing website. • CPA: Cost per Action. (Pay per action) carried out by the user • CPA=CPC*Conversion Rate. (typically a purchase) • Ej.: Transactional business where client targeting is valuable •Advertiser shares part of the • Have to open books to advertiser. revenue generated by the ads • Short-term or Long-term revenue. Revenue • Sometimes it is considered a type of PPA. • Ej.: Transactional business where client value over time Sharing is important, and advertiser plays a role in identifying it.

Agenda  Online advertising  Google AdWords/AdSense  Mobile advertising  Affiliate programs  Referral marketing  Email marketing  SEO  Content marketing  Online public relations  Social marketing (next session)  Fake marketing

How does Google Search present results? Sponsored results: •Pay Organic results: •Free •Not exist if not in the first 5 spots If you are well positioned in the organic search (SEO) you do not need to pay (SEM)

Contextual Ads

AdSense (offer your website to Ad Network)Offer your website to Ad Network

Google Insights / Google TrendsHow popular are your keywords of interest? Relative scale Similar system: Google Trends www.google.com/trends Source: http://www.google.com/insights/search/

Google AdWordsEstimating Keyword Search Volume Source: https://adwords.google.com/select/KeywordToolExternal

Is EUR 0,50 cheap or expensive?Google AdWords Depends on:Estimating cost and outcome of campaign •Conversion Rate •Product/Service gross margin •Commercial alternatives

Keyword auction systemFor each keyword or keyword combination=> Second-price auction systemwith combined criteria: 1. Bidding price 2. Relevancy for the user Hal Varian Chief Economist Google Inc. Watch this video: http://www.youtube.com/watch?v=qwuUe5kq_O8

EXAMPLEGoogle AdWordsInserting ads

EXAMPLEGoogle AdWordsOutcome, managing ads

Agenda  Online advertising  Google AdWords/AdSense  Mobile advertising  Affiliate programs  Referral marketing  Email marketing  SEO  Content marketing  Online public relations  Social marketing (next session)  Fake marketing

Mobile advertising industry mapSource: Progress Partners

Online AdvertisingDefinition“Ads+online” (we have focused on website display ads)Key pointso Select the right keywords or segmentation.o Always measure results.o Send clicks to a landing page as relevant to the content of the ad as possible. You would convert more AND you could lower the price of the auction.o Make many campaigns changing wording, images, segmentation, etc. Manage dynamically all those campaign so that you keep only the most profitable.o Spend little money at the beginning, and only escalate your spending when you are sure the conversion funnel works and is profitable.o Learn from testing, extract general conclusions you can use in the future.

Amazon Associates • Since 1996 • Long-Tail concept too • Multiple integration tools, even APIs. affiliate-program.amazon.com

Bible Gateway Affinity between a website dedicated to the Bible and a Christian publisher. www.biblegateway.com

Affiliate programsDefinition“a business rewards one or more affiliates for each visitor orcustomer brought about by the affiliates own marketing efforts”Key pointso One step above the concept of mere advertising. More integration and alignment, longer term.o Little-intrusive marketing. Users may thank the website for searching interesting items to buy around the topic of interest.o Pricing: Most frequently is revenue sharing, typically paying per sale; but it can be PPC or PPI.o Success determined in great par buy i) public affinity/niche or ii) contextual adso Multi-Tier programs (affiliate gets rewards for his clients and the clients coming from the affiliates he brought in, and the clients of the affiliates his affiliates helped to bring in…o Very popular in betting, adult websites, and file-sharing.Source: Wikipedia; others

DropBox • Two-sided incentive: more storage for the user who reefers, and for the user who accepts. • Increased signups by 60% • 2.8 mill. referral invites in about a year. www.dropbox.com

Tuenti • Exclusive access by invitation. • Reward for the sender: improves her social network. • Reward for receiver: only way to signup. • Limited number of invitations: you select better who you send an invitation. • Smart strategy: Tuenti grew concentrically so that interaction was always high (low-interaction social networks die). www.tuenti.com

Referral marketingDefinition“structured and systematic process designed by the website withthe mission of promoting products or services to new customersthrough referrals, usually word of mouth”Key pointso Works better for superior products, specially if they are innovative and the user needs to make an effort to use the product (change his current brand, learning curve, etc.).o Referred customers usually are more loyal and profitable.o Think it twice before offering money as a reward; the user can be concerned about feeling he is a salesman for the website.o The “best” rewards can be virtual items or simply the pleasure of being seen as a pioneer in the eyes of friends.o Think of trying to embed an limited-in-time offer tied to the acceptance of the referral email: extra features, discount price, etc.o Limiting the number of invitations can make a lot of sense. It may add value to the act of referring.Source: Wikipedia; others

idealista.com • Value-added services that turn a proactive, punctual contact into a passive, continuous relationship. o Alerts (predefined searches, changes on favorite items, etc.) o Newsletter. o Contacts between users. www.idealista.com

Email marketingDefinition“marketing a commercial message –directly or indirectly- to agroup of people using electronic mail”Key pointso Three types: Direct emails, Newsletters, and Transactional emails.o There are many software tools that allow to measure the impact of these type of communications: bounce rate, % received, % opened, % clicked, % converted, etc.o Few things annoy users more than spam. It is not what you think it is spam, but what they think!o Prevent being classified as spam buy security systems: easy unsubscribe, remind the user she subscribed, provide a postal address, reliable landing pages, not big images, ask reader to label you as “safe sender”, personalize, pace sending, etc.o Test concepts with a small user base, measuring unsubscriptions and other parameters in order to tradeoff between reach and conversion.o For huge communications (buying database): are you prepared for so much traffic and sales?Source: Wikipedia; others

Why Search Engine Optimization (SEO)? EXAMPLESource: comScore

How does Google select and rank information? Organic search Each keyword or combination of keywords: => Relevancy score algorithm (PageRank) using the following information: • Incoming hyperlinks (quantity and quality) • ~200 variables: outgoing hyperlinks, content coherence, update frequency, adherence to programming standards, load time, etc. etc. More info: http://en.wikipedia.org/wiki/PageRank

Softonic • Founded in 1997. • Clear SEO strategy. • Revenue model: has changed but now it seems to be mostly advertisement. • #1 software download website in the World • 112 mill. Unique users per month (Dec 2011) → #1 Spanish website. • Revenues: EUR 32 mill. (2010) • EBIT: EUR 15 mill. (2010) www.softonic.com

Top tips for a good SEO strategy EXAMPLE 1. Find the Best Keywords 2. Discover What Your Competitors are Doing 3. Write Very Linkable & Sharable Content 4. Optimize Your Title and Meta Tags 5. Optimizing Your Headings and Subheadings 6. Use Title and ALT Attributes 7. Optimizing File Nomenclatures 8. Tell the Search Engines What to Index 9. Feed Search Engines Static and XML Site Maps 10.Use Checklists and Validators Best way to “be” an expert: Type “SEO” on Google and spend hours reading…Source: Top10SEOtips.com

Search Engine OptimizationDefinition“process of improving the visibility of a website or a web page insearch engines via the "natural" or un-paid ("organic" or"algorithmic") search results”Key pointso Be patient, be patient, be patient, be patient… (e.g.: Softonic)o “The only place where success comes before work is in the dictionary”. SEO is the marathon of online marketing.o Very cheap marketing.o All tips and strategies you have to follow are widely available online, and are common sense. No hidden secrets.o Watch out black-hat SEO strategies: link farming, cloaking , etc.: BMW was banned by Google for some time!o Does it really payoff to externalize SEO to an agency? Incentives are not the same (moral hazard). They may think short term while you should think long-term. External talent can be good if you make it sure to control/understand everything it is done, or establish penalties by contract.Source: Wikipedia; others

idealista.com • Real Estate reports based on ~1 million listings www.idealista.com

Content MarketingDefinition“all marketing formats that involve the creation or sharing ofcontent for the purpose of engaging current and potentialconsumer bases”Key pointso Works better if exclusive content coming from internal database mining.o Good combination with PR in traditional media or social media.o Try not to divert much from your brand’s values. Maybe the content you publish attracts a lot of attention but it may not be the sort of attention you need.o Rankings: that simple thing that has a phenomenal appeal to the users.Source: Wikipedia; others

eBayMove systematically interesting stories to traditional media • “The frequently repeated story that eBay was founded to help Omidyars fiancée trade Pez candy dispensers was fabricated by a public relations manager in 1997 to interest the media. This was revealed in Adam Cohens 2002 bookand confirmed by eBay” (Wikipedia) • eBay has spent years promoting stories such as: - “Buys a USD 50 mill. private jet on eBay”. - “Brand new Ferrari on sale at a current price of USD 1”. - “Sells his brain on eBay” - Etc. etc. www.ebay.com

Facebook against GoogleSend negative stories of your competitors to mass media Read the whole story: Bloomberg

airbnbCelebrity invests/promotes a website • As of today, Hollywood star Ashton Kutcher has ~11 mill. fans on Facebook, and ~9 mill. followers on Twitter. • Invested on and promoted Ooma (2007), airbnb (2011) and Gidsy (2012). www.airbnb.com

Online Public RelationsDefinition“practice of managing the flow of information between anorganization and its publics” (applied to online business)Key pointso Most startups begin promoting a beautiful story about why the founder(s) decided to launch the service. Nobody says: “I spent 3 months crunching numbers and I saw this business opportunity”.o Some websites are great sources of marketable stories (e.g. Classifieds, Social Networks, etc.).o Usually cheap, specially if you pay a celebrity with equity (try not to regret later about the amount of equity you have given away) or are able to manage PR by yourself.o Not only celebrities, successful entrepreneurs with blog audience can be very interesting too: smart capital + endorsement + promotion.o At a small scale: create a network of fellow entrepreneurs who frequently talk about each other’s projects. Pay favors with favors.o Other tactics: shit the big player, litigate, get sued, small-blogger relations, etc.o PR is an art, hire a great professional if you can.o Negative PR can damage yourself.Source: Wikipedia; others

“Buy Real Marketing” www.buyrealmarketing.com

Fake MarketingDefinition“Using external services or methods to achieve final marketinggoals in a way that does not serve the indented benefit for thecompany”Key pointso Unethical. Unreal.o Short-term strategy that usually hurts the company in the long-term: search engines would detect it, social networks know your followers are fake, etc. etc.o Watch out! Some marketing magicians can be using them to deliver good results.o I know a case a someone who was about to buy a website for EUR 4 mill. and it seemed the traffic was fake traffic.o How to detect fake marketing: due diligence, in-depth analysis of analytics, smart Q&A with website marketers, etc.o Aggressive advertising can be a sort of low-intensity fake marketing.o Come on! You already know how to do it without cheating! 

Thanks!Francisco Hernández Marcosfran.me@franciscohm

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Online Marketing

by Francisco Hernández on Jan 19, 2012

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Online Marketing — Presentation Transcript