Thursday, December 10, 2009

Are you local or global? - TIP

That’s the first question to ask yourself!


Because this will determine your marketing strategy.

If your audience is anywhere and you can easily sell your products to prospects on the other side of the planet, then marketing online is an essential key!

This applies to you if you sell books, software or information products like e-books, downloadable audios or videos for instance.

It works for you as well if you offer consulting by phone for instance and you can share your advice via phone or skype for instance.

If your business is local and you own for instance a restaurant or a gym, your online efforts will only be a small fraction of your marketing strategy.

Here is how it works:

When you want to put an ad on Google adwords (the ad placement system for Google), you need to identify keywords that will trigger the display of your ad when people search online.

If you own a Chinese restaurant in Manhattan, your list of key phrases will look like:

· Restaurant Manhattan

· Dining out Manhattan

· Chinese dining Manhattan

· Chinese restaurant Manhattan

· Restaurant New York

· Dining out New York

· Etc.

With a bit of research, you can easily identify 100+ key phrases that will match your audience’s requests.

So far, so good!

Now, you will want your ads to display only for an audience located in New York, right?

You don’t want to show your ad for people located in Japan ;)


This restriction of the size of your audience means that the number of searches displaying your ads will be much smaller than if you were global.

One of the limiting factors is the number of searches for these various keywords.

The phrase “Dining out New York” might be searched 10 times/day.

Suppose that 10 searches is the average search volume for each of your 100 key phrases and your target area.

100 key phrases x 10 = 1000 searches /day match your key phrases.

This means that your ad will be displayed 1000 times.

So far, you paid nothing because your ad was only displayed and no one clicked on your ad yet!

You start paying once some one clicks on your ad.

So, how many people will click?

If your ad is appealing, a reasonable click through rate to expect is 1%.

Click through rate or CTR is the percentage of clicks per ad display.

A CTR of 1% means that for 100 ads displays, you get one click on your ad and 1 person visits your page.

You might say that 1% is not much?

Well, 1% is actually good!

Many ads get much less than that, especially if your ad is competing with 10 more listings + all the organic search results.

On Goggle, you have two types of results being returned when you make a search.

You have the organic listings which are simply the natural search results.

And then, you have the paid ads which show above and on the right of the organic results.

But let’s get back to your 1% CTR – Click through rate.

Believe me! This number is VERY realistic.

Don’t make the mistake of pipe dreaming and believing that your ads will do much better!

That was the reality check minute ;)

Ok, so 1000 impressions with a 1% CTR gives you 10 visits to your site in one day!

100 key phrases!

10 visits!

This is it!

If google represents maybe 50% of the search volume of all the online searches for these keyphrases, this means that you can get a few more hits if you advertise on Yahoo and other search engines as well.

Suppose that you get 20 visits/day to your website as a result of your advertising in all search engines.

From these 20 visits suppose that 5% of visitors to your site actually come to your restaurant.

That’s 1 visitor or one couple or one family in one day.

Now, you’ve got things in perspective!

Are these numbers realistic?


Now, let’s run another quick reality check!

Restaurants are a highly competitive market!

You have lots of choice, right?

Clicks on Goggle might sell for $0.50/click

That’s the PPC or Price Per Click

If you got 10 clicks, you already paid $5 in ads for this single customer, couple or family who came through your door.

You get that quickly, right?

It’s all about numbers and stats!

If you want to have a good return on investment or ROI, you need to make sure that your advertising budget is not burned in a channel that gives you back very little.

Even if you get one family showing up as a result of their online visit to your site, it is only just one family.

This could work if they come back frequently + tell their friends.

What if you are global?

Well, your story is radically different because the number of searches returning your ads is much bigger!

Suppose that you promote an information product on nutrition.

The number of ad impressions for your key phrases will probably be 1000 times higher than if you are targeting a local audience like in the example of the Chinese restaurant in Manhattan.

What does that mean practically?

It means that:

  • If your business is local, your online marketing budget should ideally be 10% or less than your total marketing efforts.
  • If your business is global, your online marketing budget can be 90% or even more than your total marketing efforts.

Call this a guideline, ok?

It is not an absolute written-on-stone rule!

But, it’s definitely a guideline I would keep in mind, especially if you have little to no experience with online advertising.

If you are local, invest 90% of your efforts in offline forms of advertising.

Yes! You could as well target local sites and establish partnerships with local directories and other portals.

Yes! That’s a possibility as well!