To Eleven Marketing

February 15, 2010

Using Text Link Ads to improve SEO

Filed under: General — admin @ 10:43 am

Text Link advertising is a form of web site advertising with some popularity these last few years. Generally this involves “hard-coding” text link ads on high traffic, here in the hopes that this will improve your own search engine ranking, which will then result in more visitors to your web site. As the popularity of this form of advertising grew, businesses launched services to manage this for you, by setting up partnerships with many high traffic sites, then they sell you text links on their “network” of sites and they keep a percentage of the monthly fee.

This advertising stems from the fact that many search engines look at web sites that have a lot of other sites linking to their site as a credible form of evaluating the sites popularity. Of course, that’s not what is happening here. These sites are not linking to you because they think your site has content with value or that it’s popular, but because you are paying them to. Hence, the problem with this form of advertising, you are trying to cheat with your web site, in effect, get a higher ranking on the search engines than your site merits. What merits a good ranking? Content, both in quality and quantity. Your downfall of course is that if you had good content, in quantity and of quality, you likely wouldn’t need to be doing text link ads to begin with.

Purchasing text link ads on high traffic sites in the hopes that it will increase your own ranking is not the best use for your limited advertising dollars. Especially since this form of advertising generates very limited returns. This is how it works: Major search engines such as Google and Yahoo use specific algorithms to rank web sites. Search placement agencies figure out how the majors are ranking sites and then sell their services of improving your web site ranking on the major search engines, such as text link advertising on high traffic web sites. Of course, this is not sanctioned by the search engines themselves, as you are trying to fool them, which makes them less accurate. So what do they do? Change their algorithms, which makes the advertising you are doing completely worthless. So now you have to start over again with something different. And the cycle goes on and on and on. There is also a chance you could actually hurt your ranking, when you overdo it and a search engine notices you are trying to trick them .The search placement agencies don’t care about this because this means you will never leave as a customer, and they continue to make money. Some clues that they are not acting in your best interest and offering services with real “value”? I read on one paid placement web site a line that tries to sell you on their service: “search engine optimization, which every website needs for optimal search engine listings”. When the name of the service is defined by repeating the name of the service but rearranging the order of the words, then my guess is that the provider of that service is having a hard time coming up with any real value. One thing you will notice on all of these text link agencies is that they make no guarantee that your ranking will improve, and they readily admit search engines change their requirements from time to time (and without informing your agency of when or what the new rankings depend on).

So should you never invest in text link ads to try to improve your ranking? I would say do so as a last effort because you have everything else covered and still have advertising dollars left that you can’t find anything else to do with. We’ll assume since you’re doing text links you don’t have good content. The result? When you stop buying text links your results will go away. So unless you can afford to buy text link ads forever the benefit you are buying will not last. How long does it take to see results? At a minimum three to six months, but it could be longer.

Advertising should be an investment, not merely an expense. So instead of this endless cycle that gets you nowhere, take these same resources and invest in content. Content is an investment. It provides return in both the short and long term. It lasts forever. The money you spend on text links that last a month could be used to generate content that stays on your site as long as you own the site. Regardless of how the search engines change their formula, one thing never changes, that is that the sites with the most content or most relevant content get ranked higher than those with less. Search engines that cannot manage this will not stay around, since that is the one element their users demand: relevant search results.

Another reason to invest in content over text links is that it supports the basic marketing philosophy of satisfying customers’ needs. Potential customers visit your web site searching for content. If you invest in search engine ranking without content you disappoint them, and they are that much less likely to return or do business with you.. Even the idea that your products for sale count as content is only semi-plausible. One of the great successes of the Internet is it has made huge amount of information available to the general public, and traffic has grown so dramatically because consumers want this information. To plan to be successful in selling products online without having the corresponding information to go with it will never succeed in the long run, consumers are more informed now than ever. Consumers are demanding more before purchasing. Depth and breadth of content give consumers a reason to come back to your web site more frequently, and this builds brand loyalty, which is an incredible asset for your business.

This should make sense to you. If not, consider the high traffic sites you are buying text link ads on. How many do you think got to be high traffic sites from buying text links on other sites and how many got to be high traffic sites from their content? My guess is that the score is content 100%, text link ads zero.

February 9, 2010

Number Three is the place to be: Search Engine Marketing

Filed under: Websites — admin @ 1:59 pm

Advertising on Google’s Adwords
Search engine Marketing is one area of advertising that is still hot an dcontinues to grow, with more and more businesses adding it to their marketing mix.  Now there are a plethora of firms out there as well who will offer to manage your SEM budget for you, to get the most out of your ad dollars.  However, I see a lot of agencies focusing on getting the top position, paying a premium for their ads and effectively, wasting their clients money.  For those of you still not familiar with Search Engine Marketing,  here is the basic concept: A businesses purchases a keyword(s), where their ad shows up when the keyword is searched on the search engine site (either Google, Yahoo, Bing, or one of the minor networks of other search engines, but we will refer to Google for our example), and also on affiliate sites that run “Google ads” on their own pages. Businesses pay per click, the cost per click is set by bidding, that is, each business sets a maximum amount they will pay for a specific keyword, and the obvious strategy is to bid just a little more than a competitor so your ad will be higher in position. Now since Google originally launched this program they have added other factors, such as your “Quality Score” which can affect your position as well, but for this first example we’ll focus on the main bid vs rank aspect. And there is a problem with this strategy, and it hinges on the pricing model Google has set for its adwords model. If you are new to advertising on Google, you should be cautious about trying to get the number one ad position. When you sign up you will see the top bids for a keyword. It’s easy to bid a few cents more and grab the top spot. However, your competitors have also set a maximum bid that could be much higher than what they are currently paying for the number one position. The result is that as soon as you make the highest bid, Google software ups the competitor’s bid to a penny more, and will keep doing so up to the maximum bid. This works to neither your benefit nor your competitor’s, but to Google’s, who gets the maximum amount for each keyword. Even when you are both at your maximum bid, you can continually raise the maximum in an effort to get the top spot, or top spots, depending on the number of businesses vying for the specific keyword. So what is the end result (besides Google getting rich)?
One business I know started advertising on Google to promote a new ecommerce site for a nice product line. Their top keyword cost approximately $2.00 per click when they started, and there were two existing competitors advertising. In an effort to start the site with a big push they bid enough to get the number one position, and a maximum bid to stay there. Of course the current advertisers were reluctant to give up their spots. Within two months the cost per click rose to $4.50 per click. I imagine Google sitting back and laughing, watching these three businesses go back and forth, doubling the value of a single keyword. The problem, for all three businesses, is the cost per order explodes. Let’s say you can sell one of out ten people who click on your ad, That means in this case the cost per order jumps from $20 to $40. When the average sale was approximately $100, your margins just dropped another 20%, which might make sales go from being profitable to unprofitable.
So what is the solution? Do you cave and settle for a lower ad spot below your competition? Absolutely. It was your ego telling you that the number one spot was preferred to begin with. Think of it this way: when your competitor is above you that means he pays more for every click than you are – that’s a good thing. He might end up getting more clicks, due to his higher position, but not necessarily make more money. Let’s do some math:
Assume over a month you are in third position, you get 400 clicks in 30 days at $2 each, so advertising cost is $800. If 10% of those people actually purchase, and average purchase is $100, your gross revenue is $4,000 (400 x .1 x $100), and gross margin after advertising expense is $3,200 ($4000-$800) – so ROI on your $800 is 400%.
Your competitor in the number one position is paying $4.50 per click, but due to his higher position he gets 600 clicks in the same period. However, there is no reason to believe his conversion percentage (from click to sale) would be any different from yours. Yours could be even higher if your web site is designed better. So what is he getting? Gross revenue is $6000 (600 x .1 x $100) and gross margin is $3,300 ($6,000-$2,700 in adv.) – ROI on $2700 is 122%
So you see in this case he would only be making $100 more, but having to tie up over 3 times the cash to get it.  Here I plugged in numbers just for an example. You must figure the cost of each alternative for each keyword you are considering. You can see for each keyword what the cost per click is for the top 5 spots, and then you can figure which is the most profitable position.

There are a few things to keep in mind here though for long term planning.First is this idea that there are limited customers out there for you on Google.  The logic, some say, to getting the top spot is the need to get more click thrus, as if there are only so many to be had, but that is where people underestimate the sheer audience on Google.  I have worked on some global campaigns with very large budgets, and we still have to cap our campaigns, because we cannot afford to buy all the potential click thrus Google could deliver on a set of keywords – and that is managing a list of 30-50 keywords. There are companies out there who will manage your SEM telling you that you need to manage 1000’s of keywords, when 20 is probably enough, again, because you liekyl cannot buy all the potential clicks from even the top 20 keywords.

The other issue to consider is the lifetime value of a customer. In some cases you would prefer to pay more in advertising to sell a higher number of people through Google even if your margins are less on the current sales. The reason you would do this is the hope that they will return to your site without having to go through Google, and so you will get a second sale without having to pay the same high acquisition cost. Again, do your math. Instead of figuring average revenue from the one sale, figure average revenue from future sales (weighted by the percentage of customers who make repeat purchases).
Ultimately though, you have to assume that the cost per click for all positions will rise as more businesses enter into keyword advertising, and that the rates for the number one and two positions will rise faster. Unless you have customers who make frequent repeat purchases at significant average sale amounts, it is likely that taking a number three or four spot and keeping advertising costs down is the most profitable plan.

Your first step: A Business Review

Filed under: Marketing Strategy — admin @ 1:35 pm

For any business to be successful it is imperative to know where you want your business to be, and to decide that you must first understand where you are.  Whether you are opening a new business or are just interested in improving your present one, the important first step is deciding where you are in the business environment.  By this I mean you should conduct a situation analysis or business review.   The first situation analysis you do will be lengthy and time consuming, but if done properly it will be a useful marketing tool for your business and vital to the decision-making process.  In this instance we are discuss retail stores and their business review.

To begin, go and sit down outside of your store and look in.  It helps to get a different point of view, rather than always from behind the counter.  Write down the strengths and weaknesses of your business.  Be Objective!  Try to avoid the temptation to include generic ideas such as “Great Customer Service” as that is what every business will write down among their strengths, and you want to find the things that you provide that no one else does (ie: what makes your business better than the competition).  Is it your visual set-up, or the selection of products, or is it the prices that make them come in and shop your store? And for what reasons might a customer not shop in your store?

To take this a step further, go to your business on your day off.  Is the location a strength or weakness?  Can customers see your store easily? Is your sign noticeable and inviting?  Notice any traffic difficulties that might irritate a customer ( ie: no available parking, ease of exiting and entering from the street).  When you come to the store front look in and see how business is done while you are not around.  I’ve met many store managers who take the same day of the week off every week because it’s the slowest day of the week.  Unfortunately, what they eventually find out is that it is the slowest day of the week because they are not there.  Although your workers may do a good job in your absence, do they give that extra effort they might give if you were standing right behind them?  And of course you, as a manager, will know the store and its products better than anybody and should be the best salesperson.  Your workers may be doing their best, but is it possible that you might have sold some of the customers that they didn’t.  It happens.  So analyze your training program for your employees and try to develop it so each can become the best salesperson possible.  This leads to another common problem.  Is there someone present who can answer all the customers questions.  Never tell a customer to come back tomorrow and have the manager help them – their question or problem should be taken care of right away.

These are just some of the questions you need to ask yourself to determine what you do best.  But do not focus only on negative aspects, look for positive things as well.  Maybe your staff is your greatest strength, or your location .  Your greatest strength is that which will make a customer buy from you and not a competitor, whether it is your products, prices, free delivery, or the extra hours you stay open at night.  Don’t underestimate the crazy process of how a customer determines where he will shop.  In the next column we’ll cover the next part of your situation analysis which is the competitor analysis.

February 8, 2010

Hello world!

Filed under: General — admin @ 5:19 pm

Welcome to the To Eleven Marketing blog – where we talk about all things Marketing – web design, the latest CMS system, Search Engine Optimization, database marketing, 1 to 1 targeted direct marketing, and on and on.  If you have questions or comments, this is the place to leave them :-)

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