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Strategic Advertising On A Dot Com Budget

  |  September 23, 1999   |  Comments

Most consumer dot-com companies are using traditional media to build their brand. Since most e-tailers don't have Amazon-type marketing budgets or Amazon-type word of mouth, where to advertise becomes very "strategic." Online advertising is still extremely important to your marketing mix, and Ellis tells you why. Resources to maximize your ROI.

One of my colleagues says, "Strategy is the allocation of scarce resources."

As we found out at the e-tailing conference in San Francisco, most consumer dot-com companies are using traditional media to build their brand. Since most e-tailers don't have Amazon-type marketing budgets or Amazon-type word of mouth, where to advertise becomes very "strategic."

Online advertising is still extremely important to your marketing mix for several reasons.

  1. The consumer is just one mouse click away from your store. It's like driving by a strip mall and noticing your favorite store, or perhaps a store you never knew about that strikes your curiosity.

  2. The targeting capabilities and options are endless.

  3. The ability to measure cost per transaction is important to help you forecast.

However, traditional media is where you will be able to build your brand, which, in turn, helps maximize your ROI among your other advertising efforts.

I cringe when I hear clients say they don't need branding. Everyone needs branding, and you can do it creatively, even if you have a limited budget. Branding is not just a nebulous exercise in putting ads out there with the hope that people will make a connection with your company. Branding done correctly can augment your ability to achieve that incredibly low ROI you set for yourself.

The hardest thing for companies to do is to define their target audience. Keep in mind that when you select a media mix, you typically have to define your target audience in terms of age, income, etc. However, the psychographics of your target audience is just as important for creative messaging and site development.

Remember, you are not your target audience. Know what she is thinking and how she is reacting when she shops your site. Do focus groups. Then do more focus groups. Then design/redesign your site, and do it all over again.

Close to 70 percent of the e-tailers who belong to shop.org said that customer feedback provided them with major web-site changes and developments.

Finally, allocate carefully. The obvious choice is to look at wired markets. But also look at where your strengths lie.

Shabang.com is a site that offers local, regional, and national merchants an online presence. Many merchants on its site are located in Dallas, so Dallas is an obvious place to start advertising the site.

If you have a database, mine your database. You may find clusters of customer profiles coming from particular areas. Mining your database is not the same as looking at WebTrends reports. It's much more precise than analyzing WebTrends, which are only about 60-70 percent accurate when looking at geographic traffic. For example, AOL has a server in Virginia, so you may see many customers coming from that area, when in reality they could be coming from other states.

When you use "wired markets" lists, make sure you choose the right one. One of the most popular wired lists is the Yahoo "Top Wired Cities." It includes a handful of criteria besides PC penetration on the market. Some may be appropriate for you, and some may not.

CyberDialogue has a list that is based on PC penetration and Internet access, a straightforward way of looking at it. Nielsen has a list, but make sure its sample size is large enough in the market to give you an accurate picture.

Besides the top wired markets, there are other markets that also deserve a look. According to Ernst & Young, more than 50 percent of online buying happens in smaller cities. Although there is not a great deal of information/data to analyze for small cities, it may be worth testing. Even people who live 100 miles from the closest Wal-Mart might find your site a pleasant alternative to shopping.

As you formulate your advertising campaign, keep your objectives in mind. Think about the long term as well as the short term.


Michelle Ellis

Michelle Ellis is Director of Account Planning at M2K, a top-100 interactive agency. She started her career over a decade ago focusing on the retail and business-to-business industries. M2K specializes in interactive marketing solutions for clients, including strategic positioning, media planning and buying, offline and online creative, web site design, intranets, and extranets.

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