June 2013

I love meeting people who are new to the web development business, it makes me smile when I can help them by telling stories - my tales usually center around the fact that in the last 25 years, I have made pretty much every web development business error there is.

A lot of these folks - after we spend some time together - notice I love analogies. This always makes me giggle as it is how I am best known among web professionals - the crazy analogy guy. From 'Internet marketing is like going to the gym' - to the notion that 'you can't make a crappy old Chevy nova go fast by putting a Ferrari engine in it' - I love analogies.

So all this leads us to our topic - paid web marketing.

I have numerous rants on paid web marketing, but one of my old favorites ends with this:

"Tightly bundled money also makes a very nice log, why not quit screwing around and actually light a money log on fire?"

Just to be clear - when I say 'paid web marketing' I am referring to any activity in which you pay money with the expectation that expenditure will deliver visitors to your site. To put it another way - there is a lot less difference between banner ads and CPC (Pay-Per-Click Campaigns) than you might think.

The most popular and well known paid marketing program is Google's Adwords - they make about 100 million dollars a day selling these ads.

There are more paid web marketing consultants than you can shake a stick at these days - they enhance, they optimize, they are ROI-driven, they make your money work you - did I mention these folks are also really good at analogies?

But here is the nasty reality of paid web marketing - the vast majority of dollars spent are wasted and are still based on the ego bribe principles.

Now don't get me wrong - if you want to properly measure your paid web marketing and you have the right product pricing (paid web marketing success requirement = competitive margins) - these sorts of programs are awesome. Sometimes, you can even find a seemingly expensive CPC manager that is in fact doing a stunning job for you.

But I am digressing away from the burning log and the fact that the vast majority of dollars spent on paid web marketing are driven by ego and bribe principles.

The bribe principle is a simple one.

For 10+ years, I'd get this question once a week: "If the search engines are so important and we need them to succeed on the web isn't there a way for us to just bribe, I mean pay them directly?"

And for many years the answer to that question was No.

Today the answer is Yes - so many folks feel like they are "taking care of" the search engines by virtue of giving them money.

Next we have the ego driven buy, which today is more common than the bribe principle. This is where a business owner decides that what really matters is to have top ranking for a specific term, word "X". If only they ranked number one for that term, they are sure money would fall from the sky like rain on a spring afternoon.

You can spot these folks two ways - first they make reference to the idea that it "doesn't matter what it costs". The other common feature is that they like to send their friends, colleagues, employees, board members (you get the idea) to the front end of a search engine to show off and demonstrate they rank #1 for "X" word.

The ironic part of the "unlightened about web marketing realities" business owner leading the "unenlightened" board member to a thing like that is - it often works. They are impressed.

It reminds me of a recent Kitchen Nightmares episode where the restaurant expert Gordon Ramsey is shown the farm part for a "farm to table" restaurant. He ooohs and ahhs and mentions he is very impressed - all the while unaware the animal husbandry equipment he is looking at is of the lowest quality and that when a stock tank (water dish) has visible rust - it is in fact potentially quite dangerous for the animals and indicates poor care in progress. "Gorgeous farm you have here" says the guy who obviously knows nothing about how to care for farm animals.

So, all of this brings us around to you my dear readers and what you need to be aware of when it comes time to manage your own paid web marketing efforts.

First - think of it as the complex investment that it is, no different than stocks. Anyone can execute a simple strategy like buying an index fund - but that does not in fact mean they are really playing stock broker.

So, if your plan is nice and simple (like buying your own company name keywords) - go ahead and do it without a qualified expert, no worries.

If your plan involves lots of activity and direction changes, you need a qualified expert. If you were going to be buying and selling different stocks every day - that is not for novices, it is something experts should really be doing.

Measure your expert by one single number - the rate of return. You invested $5,000 into paid clicks and it resulted in $25,000 in sales. Based on your 50% profit margin and the fact you paid the expert a $1,000 fee to do the work your ROI was a simple 2X.

$6,000 went in the front of the mysterious box labeled "paid web marketing" and $12,000 in profit came out of the back. That's a good day.

Notice there was no information about specific words, the ads that were used, or any of that other snazzy jazz - X dollars went in, Y dollars came out - that's it.

Finally - be aware of the ego and bribe principles and consider whether or not you are applying them to your efforts.

Here's the bottom line for Internet Entrepreneurs: No one wants to burn logs of money in an effort to become successful on the web. Paid marketing can be amazing when it is properly managed by the rate of return. And take your friends out to a fancy dinner with those profits instead of sending them links to your latest ad triumph. Not knowing what keyword phrases are even being purchased is actually a good thing.

Ross Lasley is the Internet Educator, an experienced Internet entrepreneur providing web strategy and consulting services to businesses. Ross speaks frequently on web design, e-commerce, and Internet marketing issues and maintains a weekly newsletter, Web Enlightenment.
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