Breakthrough Ecommerce

Some interesting reports have recently been released detailing what techniques and strategies many direct marketers are using to acquire and keep customers.

Direct marketers are usually the sharpest cookies in the marketing arena because they are obsessed with producing financial results, and will usually do whatever it takes to turn a dollar. (No bad taste jokes please.)

Therefore, they are usually worth listening to as they can always back up their marketing strategies with hard results.

The Number One Tactic

According to Target Marketing’s Media Usage Report, the number one tactic for getting more customers and giving the strongest return on investment (ROI) was direct mail.

That’s the printed, personal letter in an envelope with stamp kind of mail.

Second, and by some margin, was email, although email was still regarded as being three times more effective at producing tangible results than search engine marketing.

Interestingly search engine marketing was rated only slightly better than telemarketing (the dreaded cold calling) in terms of its effectiveness and return on investment.

Surprisingly search engine optimisation was rated even lower than these two in terms of effectiveness.

(Which leads me to suspect that most of them are either paying too much for their SEO, or it isn’t being done properly. Unfortunately, this is a common enough situation.)

Direct Response vs Branding

Commenting on the results David Hallerman, senior analyst at eMarketer, said that Internet advertising remains oriented more toward direct response objectives than branding goals.

If that’s true, then it remains in direct contradiction to what many digital agencies and ad networks are trying to sell.

I, along with many other marketers, are continually pointing out that the research and reports on online advertising over the past 10 years has consistently shown that it doesn’t work as a direct response tactic. The figures have stayed consistently around the 1 click thru for every 1000 people exposed to the ad. At the average cost per click it, this usually results in it costing more to get a customer than most businesses make on the sale.

Online agencies are desperately trying to reposition online advertising as a branding and product awareness tactic in an attempt to overcome such continually poor results.

But as eMarketer and even McKinsey report, most online marketers are using, and want to continue to use the web as a direct response medium.

Obviously, there is going to be lot of conflict and conflagration before this one gets resolved.

Online Ads and Rich Media Tank

In another report, this time from Marketing Sherpa, it said that all of the marketers it surveyed regarded online advertising as the worst online marketing tactic with over 90% of them saying it had the worst return on investment.

And this included rich media ads, which really puts a downer on agencies pushing Web 2.0, Flash, animated ads and anything involving rich content.

Interestingly this report also said that online marketers regarded search engine optimisation as having the greatest return on investment, ahead of email which came in at second place. This is in direct contradiction to the other report.

I would assert that part of the discrepancies is because online marketing is still a new industry. How we measure effectiveness and return on investment varies greatly, and some marketers are simply much better at getting value for money out of their efforts than others.

Even how these surveys are conducted, how the questions asked and just who is surveyed are going to skew the results.

What To Do?

For the business owner, this yet again reveals how careful you have to be when choosing online marketers and online marketing tactics. Here’s a few tips:

Demand accountability for the results

Ask for a money back guarantee, or pay for performance contract

At the very least demand to see a track record of producing results. A record that can be measured in dollar terms.

However, effectively measuring performance is another post,and more than likely a whole series of posts.

Filed under: Ecommerce, Online Advertising, Online Marketing