“I know half my advertising is wasted. I just don’t know which half.” –John Wanamaker
The Art of Web Marketing
In the above quote, John Wanamaker, the father of modern advertising, delivers an accurate assessment of early marketing. In those days, it was an art that was largely resistant to measurement. Marketers knew in general if something worked, but they weren’t always sure why. In fact, if someone excelled in the field, he was often called a “guru,” suggesting a nearly mythical source of inspiration.
Nowadays, the perception of marketing has changed somewhat, but it hasn’t entirely moved into the realm of the scientific and measurable. For example, the American Marketing Association currently defines the field as:
An organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
This definition, interestingly enough, focuses on organizational processes and outcomes. It doesn’t mention performance, ROI (define), or monetization –the things analysts like to talk about.
Toward Scientific Marketing
“Actually, it’s closer to 1 percent of your advertising that works, at the most. Your billboard reaches 100,000 people and if you’re lucky, it gets you a hundred customers. “ –Seth Godin
Godin obviously has a more modern perspective. An author and entrepreneur, he even writes a great blog. His quote is not merely insightful; it also acknowledges marketing’s new reality. It can be measured. Though Godin’s point is to explain the futility of some kinds of marketing, Web analysts might want to differ. The more humorless among us might ask how much the average customer gained was worth, how much the billboard cost, if it turned any customers away, and what the overall ROI was.
Let’s say you received 100 customers. If the billboard cost $10,000 and each of those customers bought a $200 washing machine, your total revenue would be $20,000 and your ROI would be $10,000. In certain cases, 1 percent isn’t so bad. In fairness to Godin, though, the chance that you’d sell 200 washing machines from a billboard is low.
Performance Is Key
With the Web, marketing can move to a performance basis. Ten years ago, it was recognized as the most measurable marketing outlet on the planet. Yet time and again, companies seem satisfied with a rudimentary understanding of their online performance. Nowadays, if you’re not sure you know what works and what doesn’t on your Web site, you’re probably not marketing responsibly.
Obviously, Web analysis can’t replace the creative mind that comes up with a terrific game that makes beer customers laugh and run out and buy a six-pack. Nor can it produce a complex catalog site from scratch. That’s simply not what it’s there for. But it can take those sites, measure their effectiveness, identify opportunities for improvement, and monetize the potential for changes. If you’re doing that, you’re headed for the next generation of marketing.
Is your company practicing performance marketing? Do you have an interesting story to tell? E-mail me, and perhaps I’ll use your company as an example in a future column.
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