Opportunities for Online Marketing in 2011

Dear Readers,

Like everyone else, we’re looking ahead to a lively year in marketing and advertising. And six days into 2011, we’re not disappointed.

Like gamblers on a winning streak, investors are pouring money into social networks, marketing services companies, and ad technology vendors. There’s Facebook ($500M), AdKeeper ($35M), Dachis Group ($30M), Centro ($22.5M), Turn.com ($20M), Scvngr ($15M), [x+1] ($10M), and 33Across ($9M).

And, Groupon raised $500M in a new round of funding, The Wall Street Journal reported on Dec. 31, 2010.

“Anyone else having year 2000 flashbacks? LifeMinders anyone?” commented one WSJ.com reader, referring to one of the many Internet marketing companies around a decade ago that changed business models or faded into oblivion.

Tracking investments in social networks, geo-location services, real-time bidding platforms, and other emerging businesses is like watching a horse race. Who will be the winners? Who will be the losers? Sure, what happens to these ventures will have an impact on the long-term future of advertising and media. Yet most marketers I know have jobs to do today and tomorrow – and try to avoid getting starry eyed over venture capital bling and machinations.

In sizing up the marketing landscape, there are many business sectors still underserved by online marketing, representing opportunities for savvy and hard working marketers. Here are a few:

Boring Products

Consider the furnace. This is a big-ticket item that homeowners in cold climates must replace every 20 or so years – and they must also maintain and repair these machines. Back in September when I searched for a high-efficiency gas-fired boiler, there was a dearth of online resources available to help me make a decision. Instead, I resorted to in-person meetings with contractors to discuss options and prices.

Offline, heating contractors have come up with a clever promotion: award a free high-efficiency boiler or furnace to the owner of the oldest operating boiler. Businesses with “boring” home products like boilers, air conditioners, storage sheds, or far more obscure B2B offerings must find ways to make their boring products more interesting or more easy to understand and evaluate.

Enthusiasts

In a study, Yahoo found that “uber-users” are often overlooked by marketers. Yahoo specifically studied sports fantasy fans, finding that they spend an average of 14.1 hours a week on sports sites – and not only on home pages – compared to 2.1 hours for casual fans. In a post on the Yahoo Advertising blog, Yahoo Market Research Director Edwin Wong said there are sections on every website, including Yahoo’s, where enthusiasts spend the most time. “But the ads on those deeper pages are usually class-two remnant ads like ‘Get whiter teeth’ or ‘Lose weight now.’ The users, by being at these pages, are saying they care about the site experience and the ad experience. But advertisers aren’t getting it,” Wong said. These low-traffic pages attract high quality audiences and thus, present an opportunity for advertisers. Data-driven ad targeting has begun to partially address this opportunity, but more can be done on the level of custom advertising.

Local, Local, and Local

Local businesses have many advertising options – too many options. Lately, lots of attention has been focused on emerging location-based applications such as Foursquare and Gowalla. Yet, other ventures such as Localeze, MerchantCircle, ReachLocal, and Yodle – not to mention Bing and Google – are working to refine the marketing services they offer to small and medium-sized businesses. But local businesses typically have limited budgets and resources – and even less time to investigate and test options.

Small businessmen and women, instead, are innovating in their own backyards. In November, I asked merchants in my hometown of Milford, CT, about their advertising approaches.

And Paul Mangels, owner of H. Mangels Confectioner, explained that he significantly reduced his advertising budget over the past couple of years. Ads in local magazines, newspapers, and Connecticut Magazine have survived the cuts. He’s also working on a Facebook presence and hopes to use that to develop an e-mail marketing list.

In-person events have proven effective too. “I’ve found that if I do a live demonstration of a truffle dipping that I have an audience for the entire event, as well as a stream of questions that make the experience memorable for people. In prior years, I would just put out trays of finished product and people would feed. Now they engage in conversation and really imprint on the product,” he said in an e-mail interview.

Non-Profit, Advocacy Groups

At the end of each year, non-profit groups intensify their marketing efforts, making an appeal to people who are interested in donating cash in time to get a tax deduction. Based on the year-end flurry of snail mail and e-mail messages delivered by non-profits during late December, many organizations remain attached to tried and tested direct-mail techniques.

Increasingly, charitable organizations will have to become more innovative when they reach out to potential donors. For inspiration, they can look to Red Cross, which collected $30 million from cell phone users to assist Haiti earthquake victims last year, or to the Pepsi Refresh Project, which has made fundraising for “good ideas” a social experience.