E-marketing

Q. I have read about businesses finding sponsors for a website. The sponsors pay a fixed amount to be able to have their link on the hosting website. Are there any standards out there for sponsors? How do you find sponsors?

A. If you're talking about the Web, you already probably know the answer to one of your questions: There are no standards! On the Web, just about anything goes, and what is revolutionary today is standard tomorrow.

However, your other questions are not as easily answered, since they wander more into the realm of marketing than in the operation of e- business. Therefore we must make a few assumptions:

• You are selling a product or service on the website
• You are hoping to defray costs by charging sponsors to advertise on your site
• Your are trying to find advertisers

Essentially, what you are hoping to do is conduct a publishing operation for which you will sell advertising – just like a magazine or newspaper does. If so, you are in luck: advertisers – who deserted the Internet in the early days of e-commerce – are flocking back to the Web as an advertising vehicle. It was predicted recently that Internet advertising in North America would surpass the total advertising conducted in print magazines by 2006. Also, a recent conference on global media predicted that Internet advertising spending would climb by 25.1% in North America (to about US$14 billion).
 
However, while the numbers may be up, the nature of online advertising has changed. At one time, websites sold advertising simply by putting up a website and soliciting banner ads for it: Businesses responded enthusiastically until they realized that the Web was different from television (which they were using as a model), and users did not react the same to online advertising. So web-based ad spending plunged.

Now online advertising has refined itself for the Web's capabilities, and so has become much more targeted and measurable. For example, the growth of Google's Adwords (or PPC – pay per click) system has allowed companies to place ads next to Internet searches, and only pay for them if Internet users click on that ad. Other companies have copied and applied this system. This method is far more cost effective, and better allows the advertiser to measure results. Simply, advertisers have now returned to the Web because it allows them to advertise more effectively than any other vehicle. 

For a website operator, this makes some demands, however. Advertisers will no longer put an ad on a site simply because it exists, or because it has traffic – the sponsorship system that you talk about. Now the website has to be the hub of a community of like-minded people to whom the advertiser wants to gain access. This latest version of the Internet, known as Web 2.0, means that a website serving the outdoor enthusiast community will likely draw attention from advertisers of outdoor gear, but probably not from automobile companies. A corollary for this is that websites increasingly must convert from simple e-commerce sites that sell things to content sites – publishing operations – that provide relevant and useful information that will attract specific users. 

Q. I wish to know where I can learn how to make my site pop up as the prominent one when one logs onto – financial services Toronto – or does a Google search on the same. Is there such a course provided by small business Ontario or BDC?

A. You're referring to an e-business technique called Search Engine Optimization (SEO) and it's an ever-changing delicate art that most companies leave to the professionals. That's because keeping track of search engine optimization rules can often be a full-time job.

Before you can get to SEO, you might want to understand some basics:

• There are hundreds of search engines on the Internet. You mentioned the most popular, Google, but there are many others.
• Search engines use a variety of formulas to rank websites, including number of page visits and number of links, meta tags (invisible coding), and keywords used (the engine looks for frequency of certain words that fit the subject it wants to rank the site under).
• Increasingly, they also rank according to who pays them the most. That's likely why some sites pop up when you punch in a specific search word – the sites have paid, often considerably, to be in the top five or 10 listings.
• Search engines are responsible for about 80% of the traffic received by most websites. Most searchers never look beyond the first 20-50 search results.
• Many businesses would be better off using the lesser known, often more specialized, search engines than trying to fight it out with millions of others for top rankings on Google or Yahoo.

It isn't surprising then that there is an entire industry out there to help websites work with them. It can be very difficult to do yourself. Tens of thousands of websites compete to achieve top ranking for their chosen keywords and keyword phrases. There are several linking strategies, meta tag optimization strategies, page content and page content relevance strategies. Achieving a top ranking for a particular keyword or phrase is a major accomplishment.

Because of this difficulty in achieving a top ranking for a free site listing, many website operators are joining the pay-per-click search engine phenomenon. Pay-per-click appeals to frustrated operators who do not want to be bothered with checking keyword density, tweaking page content, fiddling with meta tags and undertaking linking campaigns. Pay-per-click is simple: You get the site ranking you can afford.

Another option is, of course, to hire an SEO firm to do the work for you. There are several in most major cities.

Both these options presume, however, that you are operating a mass, consumer-oriented website that lives or dies on website traffic volumes. This might not necessarily be the case. If you are operating a full-blown pure e-commerce site selling a variety of products and you need to generate volume sales to survive, then it's worth your while to spend money to create traffic.

However, if your website is an adjunct to another business, operates in a special business-to-business niche, or merely serves marketing purposes (a listing of services offered by a consultant, for example), you don't really need high traffic volumes. Direction of traffic to your site will likely come from other, offline, methodology, or through viral marketing techniques. Lesser-known search engines can also be useful here because many will give you a higher rank in a narrow field, and are better suited to your target markets.

Therefore, before any website operator plunges into the murky world of search engine optimization, it's important that they understand their business and its requirements.

To learn more about search engine optimizations: most colleges and school boards in major cities offer continuing education courses on the subject. You may also want to sign up for the free newsletter on the subject at www.clickz.com/

Q. My website is not drawing as many visitors as I'd like, and I can't afford to advertise it. How do I attract people for little cost?

A. With millions of websites now existing, it can be difficult for small to medium sized operators of e-commerce sites to market. However, several guerrilla marketing techniques have evolved that allow website operators to attract people to their sites.

Generally these involve:

• Joint Venturing. Website operators, especially those selling services are always joining together to explore new opportunities. Unlike many offline businesses, who see it as competition, they recognize that A and B can join together to create C, an ancillary business that isn't quite like either A or B.
  
• Affiliate Programs. With these programs, website A sells products created by website B for a small percentage of the revenue it generates.
  
• Reciprocal Links. This is similar to an affiliate program, but there is no money involved, and it's more about driving traffic to your own site than about selling something created by someone else. Part of the viral marketing universe, it involves contacting websites with products (usually knowledge) or services similar or ancillary to yours (but not competing) and exchanging website links. An offline example might be a landscaper and a pool cleaner referring clients to each other. Reciprocal linking is also a popular method of increasing search engine ranking, since many search engines rank by the number of links a website has. However, be careful with this method, which is also known as "link-farming". Most search engines are now programmed to determine if links are legitimate or are simply vast numbers of useless links put on a site simply to attract the engines. If they do determine that this is the case, they will ban a site from their listings.
  
• Ezines and Ezine advertising. Free ezines are a favoured way to pull traffic to a website. If you produce a regular electronic newsletter that offers useful information on some subject, it will rapidly gain a following and you'll build a large mailing list. If this grows large enough, you can start charging other e-commerce companies to put ads in your ezine. A variation of this is ad swapping, which is a version of reciprocal linking. You offer the ads for free in exchange for ads in other ezines.
  
• Search engine submission. Submit your site to the top search engines. Pay close attention to meta tags, keywords and headings to get a higher listing. The higher you get, the more traffic you will get, and the more interest you'll draw from other websites you want to ride your success. Elsewhere in this section there is more about search engine optimization.
  
• Article writing. Compose articles on popular topics and submit your work, with links to your website (it's called a signature) to online article directories. If your articles provide useful information, and are therefore popular, you will get immediate free promotion, and recognition as an expert in your field. This will draw traffic to your site and in turn may attract sponsors, affiliates, reciprocals and join venture partners. Recently, the Web has seen the rise of "expert" sites such as Wikipedia, where experts in a subject area emerge and become quite famous because of their expertise.
  

Q. I offer consulting services. How do I drive traffic to my service website?

A. Before you choose traffic-generation techniques, you might first want to take a look at your business model and the nature of your business.

Since you operate a service business based on information or knowledge, the purpose of your website differs greatly from a company that sells products online. For these latter companies, traffic volume is extremely important because they require many shoppers to look before they can make a sale. But service businesses tend to operate in identifiable niches, offer information instead of products and rarely sell online;  you should place more importance on the type of traffic to the website than the volume.

Another factor with most smaller service businesses is that, although the Internet does allow a business to extend its reach outside its region, they tend for the most part to operate locally rather than globally, usually through referral networks. In that case, websites generally act as marketing brochures that support their local efforts. They are in essence, online brochures that display the business operator's expertise.

This expertise also becomes the basis for methods to attract the proper traffic to a website. You should of course use all the traditional methods to steer traffic to your website such as Search Engine Optimization, keywords, meta tags and links. But your primary product is expertise, so everything on your website should be aimed at displaying that expertise. This means posting useful information that educates visitors, or helps them solve their problems. Service business websites should also be more dynamic in that they constantly add new information: this will ensure that visitors come back to the site regularly.

Also, service businesses should issue electronic newsletters to clients and potential clients on a regular basis, and have the signup information prominently displayed on their websites. A newer method that is similar (and often easier) is the writing of a weblog, or blog, on the subject in which you are an expert. Search engines like blogs, hence they help with your search engine optimization, as well as attracting regular readers. However, as with newsletters and website content, the information in a blog has to be useful and/or entertaining if it is going to attract readers. Hard selling will simply turn them off.

Q. What is your opinion of e-newsletters sent to an existing client base?

A. E-newsletters, or e-zines, are a proven method to serve existing customers and are used by many companies. Because they are electronically delivered, they are cheaper to produce than printed newsletters, and can be better targeted to the proper audience. 

Generally considered a part of marketing because they aim to create repeat business, e-newsletters are a great way to create a loyal community of customers. This sense of community is even more important when the business involves clients, who presumably hire the business to provide a service because they trust it. An e-newsletter reinforces that trust.

Some things to consider when preparing an e-newsletter strategy are:

• They should not be foisted on people because they then become very much like the spam (unsolicited email that is usually selling something) that clutters up email boxes. All newsletters should be subscription based (also called opt-in) because recipients have signed up to receive the newsletter – usually at the company's website. Also, all newsletters should feature an opt-out mechanism that allows receivers to stop receiving them if they wish.
  
• Like all reading material, e-newsletters must offer information that is useful and desired by the reader. A newsletter filled with press-release announcements about the company, blatant sales pitches, and other obvious marketing material will die a very quick death because that kind of content is useless to the reader. Clients want solutions to their own problems and do not care about how you run your business. So newsletters that contain helpful hints, methodology for solving problems, and other tips are generally more popular and will be viewed more often. Marketing messages can be alluded to but should not be dominant.
  
• Spend some time on the design of the newsletter, and planning how it will be delivered. Put yourself in the reader's position: likely they will receive an emailed notice of the latest edition and be given a web address to click on to see the whole newsletter, along with many other emails. Since most web users use a preview pane when reading email, you have a space about two inches deep by seven inches wide to attract the user to your entire newsletter. Studies have shown that most email readers spend as little as three seconds perusing this preview pane, so you're going to have to snare them quickly. This means use of catchy headlines, often a small picture in the upper right hand corner (where the eye first goes), and especially a solution-based attitude. It does not mean a long windy description of something your company has done. An example might be a headline like "Cut Business Costs by 20%!" and then a very brief description of what you're talking about followed by a link to the newsletter as a whole.
  
• Focus your e-newsletter on a subject within your company's expertise. E-newsletters are excellent ways to display your knowledge, which draws in clients. If the content is well written and entertaining, is useful, and provides information that they need, it will resonate better with readers. Further, if it is a very good source of useful information, it will be passed on, and so becomes a referral mechanism that can generate new business.
  

Q. How do you create a forecast based on the previous year's sales?

A. If you mean forecasting online sales, you do it in the same way you forecast sales in any operation.

Essentially, you take the previous year's sales; analyze the market to see if any changes, such as new competition, are on the horizon and what their effects might be; apply any new sales initiatives you're planning; and then conservatively predict sales for the coming year.

The difference between selling online and selling in a store, however, is that changes, both good and bad, often occur much faster online than in the real world. So an e-business should react much more quickly (and often more creatively) than an offline operation.

Also, e-business allows for more accurate predictions because selling online enables an operator to gather much more information on customers. This information – such as their preferences, how they found you, their buying range in terms of dollars, motivations, and point in the buying process – can then be better used to perfect the selling process.

Lastly, with e-business, new sales and marketing methods can be continually introduced, tested quickly, and expanded if successful, or dumped if they are not.

All these factors could skew your forecasts somewhat, so you might want to consider them when making your predictions.

Q. Is there room on the Internet to create a community where people with cell phone contracts could get in touch with people who want to get a cell phone?

A. There may be such an opportunity for an e-business that connects cell-phone users for the purposes of trading contracts, but you would have to research the market and plan the business first.

However, you are on the right track with your business model when you use the term community. The Internet is the perfect vehicle for creating a community around a specific subject, in this case, cell-phone contracts. In fact, it is probably the only place where this community could exist.

Also, recognize what your business actually is. In this case it appears to be an online version of specialized classified advertising, and so would need a very wide base of users, or members of your community. When doing your planning, you must determine if this is enough to form the basis of a business. I would suggest that because of a new Web phenomenon called Long Tail Economics – establishing the economic viability of a business that depends on many small and low-profit transactions (Amazon is the best example) – it could very well be a basis for a business.

However, if you do not wish to rely solely on that method, you may want to consider adding other cell-phone related products and services. Also, understand that you are essentially creating a business from nothing, and will have to determine market needs before you can be successful. Simply putting up a website is not enough.

This involves basic business planning; you determine if the market will support such a business, if there is any competition for the service, what the costs of providing the service will be, what business model you will use, and whether there is any profit to be made.

If you discover that there is not enough of a market locally to support your business premise – and I suspect there isn't for what is a very narrow service – then you should consider expanding geographically, or allying with an existing and wider-ranging business.