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We’ve talked a lot about return on marketing investment in this blog.  It’s critical to business profitability.   But there are gaps in the formula for calculating this that many businesses have simply not closed.  For example, when you giveaway an item as an incentive to close a sale, or gain a subscriber to you email list, there is obviously some cost to you.  If it’s only a downloadable file, that cost is minimal, but still there is some number that needs to be factored in to determine its impact on your profit.

We’re going to list five steps here to help you calculate the lifetime value of a subscriber to your email list.

  1. How many subscribers do you have?
    • When you total your list, do not include those that have previously bounced or unsubscribed
  2. Get an estimate on sales generated in the past year
    • Examine clickthrough direct sales (this is usually the default figure used and likely will be very underestimated)
    • Use promotion codes to track sales not directly generated
    • Overall sales increases, including those from forwarded emails, sharing in social networks, and other less obvious ways
  3. Set Your Time Frame
    • Is your business seasonal, or does it make sense for you to calculate this annually?
  4. Calculate the value of the subscriber (V)
    Here’s an example from one of our online retailer sites:
     

    • Active email subscribers: 4,500 (X)
    • Sales attributed to direct clicks in email over past year: $275,000 (Y)
    • Apply the equation V=Y/X
    • Value of the subscriber = $61 per yearTo estimate the lifetime value of your subscriber, examine the average time between the first and most recent purchases in your database. We’ll assume that 1/3 buy from you just once, another 1/3 buy for two years, and the others for three years.
      • 1,500 subscribers x $61 = $91,500
      • 1,500 subscribers x $122 = $183,000
      • 1,500 subscribers x $183 = $$274,500
      • Total value is $384,300
      • Divide this by the number of subscribers (4500)
      • Estimated value per subscriber is $85.40 per subscriber
  5. Results Analysis
    We have to admit there are a lot of weaknesses to this method. It only calculates direct clicks, not peripheral action sales, it only views three years, etc.  But it does give us a rough idea of the lifetime value of that subscription.  So you can see that a promotion campaign costing $100 per subscriber is too expensive to  make sense, but $10 per subscriber would be much more likely to net a positive result. 

    All online merchants have unique circumstances, with differing characteristics to their databases. This system is meant to serve as a guideline to help you start down the path of ROI analysis and profitability.

Over the life span of your relationship with your customer, you may do many thousands of dollars worth of business.  In a future post we will discuss calculating this lifetime value so that you have a better sense of what you should be willing to spend to attract and keep that customer.

Vertical Response (known as VR to us email marketers) will celebrate its 10th Anniversary next month. They are one of several companies we recommend who provide email marketing tools for enhancing small business results. We like them because they practice what they preach, set a good example for responsible emailers, and they are very social (as in Facebook and Twitter and Youtube).

Some of the best ideas I’ve shared with you here have come from their blog or their Youtube channel.  I’m sharing a video with you this week that is a great example of how they use an entertaining format to get a complex marketing message across.  And it works.

Videos like this work hand-in-hand with good email campaigns and can help your message “go viral,” or be spread farther than you could have planned by being passed from one viewer to the next. In fact, “going viral” includes having people like me find your video and then rave about it and embed it in their blog.

Click and enjoy this two minute hot-dog of a video.

Want to do somebgathing like this, but don’t know where to start?  We can help. Contact us to learn more or to get started in social media marketing.

Most business bloggers come to the social media world with an inherent fear of opening yourself and your company up to comments from whomever might want to make them. Even those of us who have been doing this for a while recognize the challenge of encouraging healthy conversation while propelling the company image forward.

Here are a few useful pointers when preparing to respond to comments, on a blog or elsewhere in the social media world.  It’s vital to have a plan for how to manage comments—not just the workflow with respect to approving, reading, responding—but also, the perspective necessary to distance yourself from the sentiment or opinion being expressed.

Don’t Take It Personally
One of the key things that will help you is to forget about getting people to agree with you all the time, but rather, work on maintaining the momentum of the conversation you started, and guide it back to your central point. It’s not important whether everyone agrees with your view, but it is critical to acknowledge and appreciate reader participation, keep the conversation interesting, and to guide the conversation in the desired direction.

Categorize Responses
If you’ve only experienced  comments on your local newspaper site or YouTube, you may not have a very good opinion of user generated comments. Contrary to the sometimes low-quality comments you find there, most blogs where the author participates find a higher level of discourse. If you want to build an online community, blogging can help if you have a plan in place to foster participation.

  • Good comments are those that propel the momentum of the conversation.
  • Bad comments can be weak, spammy, or try to bait the author.
  • Ugly comments use profanity or abusive language toward author, readers, or others

By defining comments in this manner, you remove sentiment or agreement from the equation—a comment that agrees with the opinion of the author (and may even be complimentary) could fall under good, bad, or ugly, depending on how it is expressed.

Good blogs stimulate vibrant conversation—they don’t try to control it.

by Chris Crompton, ROI Revolution Blog

video-targeting.png

In Part 1 of this series, I showed how to launch YouTube promoted videos through Google AdWords.  When you promote one of your videos, you are paying YouTube to funnel more traffic to the video… but the traffic still stays on YouTube.  (Of course, you can include a call-to-action link in your video that goes to your website, but that is more a feature of the video than a specific advertising strategy.)

You probably want to do more than just get people to watch one of your videos in an environment controlled by YouTube.  You want to get people to come to your website where they can take a desired action and you can make money.

There are multiple ways you can get your ads to show on YouTube searches, inside and alongside other people’s videos.  With the right targeting, this can be a very profitable way to take advantage of YouTube’s enormous amount of traffic.

Read more…

original article on ROI Revolution Blog

In search volume alone, YouTube is the #2 search engine behind Google itself. Yet even with its gigantic size, it is easy for YouTube to get passed up by online advertisers. Many advertisers ignore the opportunity due to the convoluted process required to explicitly target YouTube with ads. This means there is less competition for ad space on YouTube and great rewards for those who can crack the code.

youtube-promoted-video-example.png

YouTube is both a search engine when searching for videos and a content site when watching videos. While there are a few high-dollar ad buys available directly through YouTube, most of the ad inventory can be purchased through Google AdWords on a CPC or CPM basis. Generally speaking, YouTube as a search engine is reached through a search targeted AdWords campaign. YouTube as a content site is reached through a content or placement targeted AdWords campaign.

YouTube Promoted Video Ads

When you do a search on YouTube, two types of ads can show up: sponsored text ads and promoted video ads. The sponsored text ads are brought in through YouTube’s search partnership with Google. If your campaign is opted into the search partner network it is automatically eligible to display on YouTube search results. You can’t explicitly target your text ads on the YouTube search results page — it happens behind the scenes.

You can, however, explicitly target the YouTube search results page with a promoted video. A promoted video is a YouTube video you pay to get people to watch. You’d probably only want to do this if there is some call to action in the video itself that will encourage viewers to visit your actual website after watching your video.

If there is a promoted video eligible for display on a YouTube search result page (i.e. if you are bidding on that query), it will always rank higher than sponsored text ads. This is because YouTube wants to keep people on their own site. The sponsored text ads link to external sites while the sponsored video ads link to a specific video on YouTube.

How to post your promoted video ad…

1. Create a Google AdWords campaign opted into both Google Search and Google Search Partners in the campaign settings. If you want your promoted video ad displayed on relevant video watch pages across YouTube, you must also opt into Google’s content network. You may wish to create a separate campaign for this purpose so you can use different keyword lists for YouTube search vs. YouTube content targeting.

search-partners-target.png

2. Create your ad groups as you would normally, but skew the keywords toward searches that woudisplay-ad-builder-select.pngld be popular on YouTube. You can use the YouTube keyword suggestion tool for ideas.

3. The ads themselves are what makes this a YouTube promoted video campaign. Don’t include any standard text or image ads, otherwise the network settings above will kick in and you’ll indeed be targeting Google search + partners. Include only ads of a specific format: a Display Ad Builder ad using the “YouTube Promoted Videos Template.” This is found in the “Audio and Video” category of Display Ad Builder. Once you choose this format, you’ll be able to select the YouTube video you wish to promote.

youtube-promoted-video.png

What about getting people to your own website? You’re paying Google/YouTube to get someone to visit another page on YouTube’s site. That can’t be your end goal. Of course your video will probably mention your website and you’ll probably have a link to your site in the video description — but YouTube gives you another call to action link you need to use: a Call-to-Action Overlay.

A call-to-action overlay resembles a sponsored text ad at the bottom of your video. It shows up at the bottom of your video for a brief period of time during the video and then at the end of the video. The difference from a sponsored text ad is that it doesn’t say “sponsored ad,” it is free for you to use, and it links to your own website.

Before posting your promoted video campaign, perform the following steps to activate your call-to-action overlay:

1. Sign in to your YouTube account
2. Click Account at the top of your dashboard.
3. Click Edit next to the video you will be promoting.
4. Fill in all required fields under Call-to-Action Overlay.
5. Click save changes when you’re done making all changes to your video.

Here are helpful tips from Google on how to optimize your promoted video campaigns.
In part 2 of this post you’ll lean how to target the content side of YouTube and get your ads displaying on relevant videos.

Robert Gelman

Pay-per-Click advertising, and Google’s adwords in particular are an ongoing topic in this blog. To best determine how such campaigns will perform for you, we recommend testing, and more testing. One thing you can test is whether the search results pages bring you as much traffic as the “content network” a placements (pages and sites which carry Google ads dynamically).

We recently learned of another placement niche for your ads, on people’s Gmail pages. For whatever reason, they call it the “Funbox.”

The ‘Funbox’ is a little known reference to the top ad spot in gmail, and guess what? You can target it as a managed placement in your AdWords content network campaigns.

funbox.png

So how do you target the fun box? The fun box is not found in the placement tool, so you need to add this in manually as a managed placement (in the networks tab):

mail.google.com::Inbox,Top center

Also, one of the most common mistakes is to try and target gmail by adding ‘gmail.com’ as a managed placement. It’s important to know that to target gmail, you need to add the following as a managed placement:

mail.google.com

If you see gmail is performing well for you, it’s best practice to create a separate campaign that targets only gmail users.

Here are the benefits of creating separate gmail targeted campaigns:

  • Write specific ads tailored to Gmail users
  • Develop keyword themes around Gmail messages (advanced strategy)
  • Controlled budgets
  • Transparency of performance

It’s not necessary to create gmail targeted campaigns when you are first testing out Google’s content network. The best strategy is to first start with a keyword targeted (or contextually targeted) content campaign, and monitor the performance of mail.google.com on the networks tab. If you see traffic and conversions are high, it’s a good idea to go ahead and separate out mail.google.com traffic into a separate campaign.

If you need help understanding or implementing pay-per-click advertising, BGAmedia is here to help.

Portions of this post excerpted from ROI Revolution Blog

Corey Trent, Marketing Experiments Blog

We have been quite busy at the labs here, but I wanted to cover a PPC development that blipped on our radar earlier this year. For many of us, PPC is a critical source of traffic, and can be quite the task to manage. Well to add to the list of things to consider, Google is beta-testing the collection of phone lead information directly from SERPs (Search Engine Results Pages).

Google generates roughly 97% of its revenue from online advertising, so it makes sense that they delve into new areas of online marketing – which now seems to include part of the sales process as well.

Given the huge potential (or threat) this represents to you, the Internet marketer, I think this is a vital development to cover on this blog (and even reached out to a search engine marketing firm to get their ideas for you as well.) While this will not affect all verticals, for some niches this might pour some gasoline (or more correctly napalm), on already very competitive areas.

So how does it work?

According to Amber from PPC Hero, “The gist of the beta is if you’re running a PPC ad in Google, and you’re in the top position, you can click on a plus sign next to a call to action (the name you give your contact form) and Google will drop down your contact form to be submitted right there in the Google search results.”

Here is an image from that article to show the lead collection:

Google-contact-form-beta

It’s important to note that, as with all things in beta, this has the potential for change, as I believe Google does do some testing from time to time.

And since this new feature is currently in beta, limited to businesses appearing in position #1 of PPC results, and on select keywords, it may not be available to you yet. If you’re interested, the best person to contact is your friendly Google rep.

More importantly…how can I make it work for me?

While I think this could have potentially large ripples in certain areas of online marketing, I wanted to have a chat with our friends at ROI Revolution, and get another viewpoint as well.

As a quick background, ROI Revolution is a company whose main area of focus is in pay-per-click management and they are quite good at it. Here are just a couple of points they presented:

Upsides

  • Simplifies the conversion process.
  • No friction (and lead loss) from weak landing pages.
  • Great tracking for businesses that use the phone a lot, a traditional weakness of current PPC tracking solutions.  Interesting, how could this be applied to other voice communication/VOIP solutions like Google Voice?
  • The feature will be good for certain verticals (e.g., plumbers) that provide local services tied to specific keywords (e.g., “broken pipes”).

Downsides

  • Can’t have a conversation in a PPC ad. Landing pages provide a good service for addressing anxiety and questions. So how effective will this lead capture be?
  • Opportunities to increase the value of a lead with a well-optimized funnel are lost (e.g. upsells). Without the ability to do that how valuable will the leads really will be?
  • Because conversion is expected on the search page, you do not have their undivided attention.  On a landing page, you can guide their thinking.
  • Maximum cost-per-click (CPC) rates are applied to leads submitted. This will likely cause your cost per acquisition to rise.
  • Since you must in position #1, the bids for the top position might heat up significantly.
  • Many people also now use many CRM solutions for keeping track of customers and sales. Will this information be easily integrated with common solutions or sent to advertisers in a standardized way?

Won’t you tell me your name? I love you. Hello.

Personally, I am interested in seeing are how users respond to putting their information directly into a form on a search engine results page. While I think some users are very trusting, others might be turned off by your attempt to get their number so soon.

It might seem like an out-of-sequence conversation. As Flint McGlaughlin, the director of MECLabs Group (our parent company) describes trying to ask for a lead to early in the process, “You don’t ask a girl for a kiss before you have a date with her.”

That might seem kind of corny. But think about how you handle your own phone number. Many of us treasure our phone numbers and can guard them quite fiercely. Will a relatively short ad space be enough to capture users and convince them to give up this information? Are you asking for too much, too soon?

Also, some of the things we talk about in great detail here are anxiety and value proposition. While you can address these with your ad copy in a limited fashion, the fact remains you only have so many characters to work within.

Your pay-per-click ad copy and the space search providers give you is simply to get the conversation going – address why they should click, how you are meeting their motivation, and then get them to a landing page to do the heavy lifting.

In skipping that step, you can end up with spending a lot of money (especially by paying max CPC) with leads that are not as qualified or do not convert.

Also, since this is a new technology, you might be getting a fair amount of people using it because they wanted to see how it works, rather than being genuinely interested in your message.

I have some more thoughts on this that we will post soon, but I want to get your opinion on what impact, if any, you think this new Google innovation will have?

from the ROI Revolution Blog

Just how big is Facebook, really?

According to TechCrunch, big enough to encroach on Yahoo’s position of “third largest Web property in the world”, trailing none other than Google (#1) & Microsoft (#2).

In the U.S., Facebook already has the second highest number of unique visitors per month – surpassing Yahoo for the first time in January. Compete.com also reports that of all time spent online in January, 11.6% was on Facebook, compared to less than 5% on Yahoo and Google each.

What does this mean to you?

Well, I don’t have the answer to that question, but I can tell you what it now means to some of our clients for whom we’ve recently started advertising on Facebook –> more qualified customer leads + a desirable cost = more $$$ for them.

The following story is about a lead generation client (Client A, for anonymity), but Facebook would certainly be worth testing if you’re in an e-commerce space too.

We created Client A’s Facebook account back on January 26. He’s a local advertiser, only seeking clients within a close radius of a heavily populated metro, so we set the Facebook geo-targeting to just 10 miles around his city.

Within 18 days his campaign spent just over $500, generating almost 600 clicks, but these numbers don’t tell the whole story yet:

When we dig into our Google Analytics reporting for Client A’s Facebook PPC traffic, we can see that his $500 in spend produced 11 highly valuable customer leads:

By highly valuable, I mean that Client A knows his customer lifetime value and has been able to determine that each new customer lead is worth $600 to him.

So for a ~$500 cost, with 11 new customer leads worth $6,600 (11 x $600), we’re talking about a superior ROI from Facebook in just 18 days!

It’s important to note here that Facebook is only producing 5.5% of the overall leads from our top 5 traffic sources, so it’s not going to replace Google AdWords anytime soon. Facebook is however, turning out to be a solid supplemental lead source for Client A.

Tips for setting up a Facebook campaign

1. Track your conversions with a reporting service like Google Analytics.
2. Utilize Facebook’s demo/geographic targeting to focus on a niche audience.
3. Set your bid price within Facebook’s suggested CPC bid range.
4. Use a captivating image in your ad (you can combine an image with text).
5. If you generate a strong impression share initially, but then it trends downward over time, you should rotate new ad creatives to keep a fresh message in front of your audience’s eyes.
6. If you are unable to generate any substantial impression share at all, then try experimenting with different or fewer demographic segments. You can also try targeting a larger geographic area to boost your ads’ reach.

Originally published in ROI Revolution Blog

Occasionally, Google will show alerts in our AdWords accounts introducing new products or tools, or notifying us of maxed out budgets or disapproved ads. These are usually very helpful to us. We have noticed the following message in our clients’ Google AdWords accounts suggesting that the Ad Serving setting be changed from “Rotate Ad Serving” to “Optimize Ad Serving” in order to ‘increase traffic by showing your best ad most often’.

Click to View The Image Larger
At ROI Revolution, we recommend always setting our campaigns’ ads to “Rotate” as part of what we call “AdWords 101″ or the most basic and well-known practices for an AdWords account. There are two main reasons why we do this:

More Clicks Does Not Equal More Conversions

Google optimizes your ad serving based on Click-Through-Rate. This works out great for Google, because showing the ad that gets the most clicks more often means more Google revenue. However, optimizing ads based on Click-Through-Rate is not always the best practice for advertisers, because conversion rate is never factored in to the equation. While increasing clicks is a wonderful way to get more visits to your site, conversion rate is equally as important, if not more important, to most advertisers. With the exception of brand awareness, there is not much of a payoff in getting someone to click on your ad and then leave your site without buying anything or submitting any of their information.

Test, Test, Test

It is best practice to run at least two ads in a paid search ad group. If you’re not continually testing ad text, headlines, landing pages, basically everything, then you’re missing out on new opportunities that could bring in more money for you. If those ads are not rotated evenly, there is no way to tell which one generates the most profitable traffic for your business. Rotating ads evenly will ensure that the data you’re seeing in your reports is a fair representation of how they actually perform when given an equal chance.

The moral of this story is DON’T choose this setting if you want to maximize your results through testing and conversions. Leaving your ads set to “Optimize” is a common mistake, but one that you can and should avoid. In order to make the best decision for your AdWords account, it is essential to outline goals, prioritize them, and optimize your ads based on those goals.

Good news for Boblog followers…

We’re coming back. We’ve upgraded our site and designed it for maximum usefulness to our visitors. This Blog is about how you can be more successful in your small business or nonprofit venture with smart, simple, DIY techniques.

Of course, if you don’t have the time or interest in doing-it-yourself, we’re more than happy to help.  Please let us know what you think of the new site and if you’re so inclined, follow this Blog on Twitter.

We’ll be posting several times a week to begin with.  In the meantime, please email us at bg@bgamedia.com. Anytime!

To your success!