Home Articles Why are you bothering with online marketing in the first place?

Why are you bothering with online marketing in the first place?


When Anthill was a print magazine, a week wouldn’t pass without at least one phone call or email from someone with a desire to start a magazine.

Times they are, indeed, a changin’.

These days, if there is one subject that I’m sought for my opinion on more than any other it’s the strangely daunting topic of online marketing.

Naturally, online channels are far more accessible to new publishers. But they also represent an extremely cost effective path for cash-strapped small business owners and startups.

For that reason, this article is the first in a series:

The Anthill Guide to Online Marketing for Small Business Owners and Startups.

The content planned was developed to answer the various questions I’m frequently asked and the questions that I should be asked but never encounter, such as…

Why are you bothering with online marketing in the first place?

Before I start sharing and working through the various ways that we use online marketing and social media (and the ways you can too), it seemed prudent to first dedicate a post to setting measurable goals — or, more specifically, benchmarks that can be tracked.

In other words, before we get onto the ‘how’, it makes sense to first consider the ‘why’.

Whenever Anthill conducts one its online marketing workshops, we begin by asking attendees why they are interested in online marketing in the first place – what are their commercial goals?

Most attendees, when put on the spot, tend to provide vague answers, such as their desire to generate traffic, build a community or improve brand awareness.

These are all admirable goals. But our next question invariably follows this path:

How will these goals help your business in a measurable way?

The importance of this question is obvious once introduced into a discussion. This is because most business owners and startups intuitively understand that:

You cannot improve what cannot be measured.

How do you know that your new marketing activities are generating a better result than your old marketing activities if you don’t set clear benchmarks and goals to measure?

It was once said with humour, “I know that half my marketing works. I just don’t know which half.” Today, such an approach to marketing is unlikely to raise a smile.

In the online world, every slight change, tweak or permutation can be tracked to generate incrementally (and sometimes exponentially) better results.

This seems obvious to most sensible business builders. Yet, too many marketers (and excitable small business owners) get distracted by the endless creative possibilities of online marketing without first establishing why they should be pursuing this option in the first place.

This is something I’m suitably experienced to talk about, as an easily distracted and excitable publisher.

The First Rule of Online Marketing: Set Goals that Can Be Measured (and ignore the rest)

As far as we’re concerned at Anthill, there are only three reasons for spending your hard earned revenue on marketing in any form:

Brand Awareness
Leads Acquisition
Sales (new customers)

If you’re a small business owner or startup, the third goal is often the most persuasive.

But the second goal is equally important. If you focus on the second, the third and first should follow as a natural result.

So what are your goals?

Do you want to attract more traffic to your website?

If you do, what is the purpose of wooing these people to your online destination? Does your site make revenue from advertising? If so, this goal might be good enough. But if you are among the vast majority, your business is likely to generate its revenue through other means, usually servicing clients for a fee and/or selling products to customers for a price. To achieve these goals, you’ll need to do more than simply ‘build traffic’.

Do you want to collect prospective customer data?

Perhaps you want to develop your own database of prospective clients? You may wish to find our more about the desires of these people through a survey or you may wish to build a relationship with these people over time via an email newsletter. You may just want to collect ‘pre-qualified’ leads that you follow up with a phone call.

Do you wish to generate sales through your website?

This is the main goal of most online businesses. While it’s easy to say, I wish to generate traffic, collect leads or build awareness of my business, the end goal, in most cases, is to convert these leads into fee paying clients and price paying customers.

I’ve stuck to the basics here. Your strategy might incorporate additional goals, such as the collection of Facebook Fans, LinkedIn Group Members or Twitter Followers. You might also have a desire to prompt application downloads or promote an online game.

Fortunately, most of these goals are not mutually exclusive.

How Anthill increased online subscription sales by 800% in one month (let’s get practical)

Back in the day, when Anthill was primarily a print based product, magazine subscription sales were an important part of our business. Aside from the subscription revenues, these customers helped us generate advertising fees from marketers.

In fact, in the magazine industry, most titles are largely funded by advertising revenues.

For this reason, magazines quickly learn how to calculate the marginal cost of a subscription sale – the costs associated with the production of one extra unit. In other words, every additional subscription sale can be given a cost to reflect, by and large, the price of printing and mailing. All the other costs (i.e. editorial, design, etc) are already borne by the business anyway and do not influence the cost of producing an additional subscription for an additional customer.

We soon realised that a new subscriber would attract a marginal cost of $18.20 to service. By offering 12-month subscriptions at $39.95, we would make a profit of $21.75.

This figure represented our profit margin.

And it was an important figure because, once it was established, we knew that we could spend up to $21.75 on marketing efforts to attract a new subscriber, without going backwards.

Our first attempt to generate subscriptions online was a disaster.

Naturally, we followed conventional wisdom and plastered subscriptions offers all over our website: “Subscribe to Anthill! Only $39.95!”

Then, we worked on a strategy to bring people to our website. (The most effective tactics that we used then and today to generate traffic will be shared in later posts in this series).

So far, this all made sense. We had a clear and measurable goal (sell subscriptions). And we knew how much we could spend on attracting people to subscribe ($21.75 per subscriber). Our plan, was to determine, over time, what percentage of site visitors accepted our offer to subscribe – our goal was to establish a conversion rate.

For example, if 1,000 unique visitors found their way to our website and 10 of these visitors subscribed (generating $21.75 in profit each), we could justify spending $217.50 on future online marketing activities to attract another 1,000 visitors.

This scenario represented a 1% conversion rate. It was a ‘conservative estimate’ in our opinions, based on what we’d read (and our own enthusiasm for the product).

The theory was sound. But the strategy was not.

The ‘Ah-Ha!’ moment that turned things around

After several months, we had generated enough data to review our approach and conversion rates. And, unfortunately, we were deeply disappointed.

Let’s just say that our conservative estimation was not conservative enough. Based on the outcomes, it seemed unlikely that we could ever raise an online marketing budget that would generate a reasonable return (i.e. positive ROI).

In a deep funk, we did as every entrepreneurial business should and went looking for the brighter side. And, in our free newsletter data, we found it.

Our efforts to attract online traffic had given our free newsletter database a bump. It was not a significant bump but it had produced an interesting (and measurable) outcome.

To populate our ‘Success Page’, we had recently created a subscription offer to trial. To explain, the ‘Success Page’ is a term often used for the page that people end up on after completing an online transaction. For example, you’ve probably read these words: “Success! Your purchase was successful completed”. Or these: “Success! Your subscription was successfully received!”

We’d reached the conclusion that offering to sell something at this point of reader engagement could possibly work just as effectively as the famous (or infamous) upsell strategy used by McDonalds.

Instead of asking, “Would you like fries with that?” we posed the question, “Would you like to know a secret? Subscribe to Anthill using our secret subscription page and pay only $29.95.”

The theory is that if you offer people something of value when the decision to engage has already been made, you have a much greater chance of promoting further engagement, often in the form of a purchase.

To cut a long story short, the upsell strategy was a hit.

In fact, more people were responding to this very subtle and ‘hidden’ offer than all of our other ‘in yer face’ banner ads and offer placements combined. We extended the strategy to include a ‘trigger email’ component (something that will also be discussed in a later post in the series) and increased our conversion rate again.

The final step to achieving an online sales return that we could be proud of was the hardest and involved heated discussion and debate around Anthill HQ.

We removed all sales messages promoting subscriptions from the Anthill website, except for our Subscribe page, and replaced these with free email newsletter subscription offers.

In other words, we made it harder for people to subscribe to our paid offer in the full knowledge that we’d be making it easier later, once a relationship was formed.

This counter-intuitive option increased our online sales by 800%

What’s the moral of this tale? Create a funnel if you’re seeking ROI.

From this experience, we learned the need to set measurable benchmarks. And, as a result of this process, we were also able to determine what our marketing budget should look like (i.e. How much we can reasonably spend to achieve a return on our investment).

But you might also have noticed that our approach involved each of the three main goals outlined above, working together:

  1. Attract more traffic to our website
  2. Collect prospective customer data
  3. Generate sales

Over time, we were able to establish how many visitors we would need to generate an email registration (i.e. lead generation conversion rate) and how many email registrations we would need to generate a subscription sale (i.e. sales conversion rate).

It could also be said that the process also helped us build a community and generate brand equity in the process.

Actions — Week One

Like any online series with a goal to educate, I have isolated the most important steps and actions. If you are interested in this topic, perhaps set aside an hour to talk through the following points with your crew.

Set your goals:

Ask yourself, what do I want to achieve that is measurable? Forget the abstract and focus on goals that can be put in a spreadsheet and tracked.

Determine how you will measure these goals:

Will your measure your success by the number of visitors you attract to your website? Or the number of registrations you generate? Or the number of sales you achieve? Or all of the above?

Research tools to help you measure your success:

Start by establishing what data you can already track using the inbuilt functionality of your website (or whatever online tool you are working with). If you want to measure traffic and goal conversions on a website, the simplest solution is to sign of for Google Analytics. It is free and simply involves adding a line of code to your website. If you’re promoting an application made available through an online market, such as iTunes, create a spreadsheet to track progress. Even Facebook Pages offer their owners a dashboard.

Be diligent:

To become a sustainable part of your business, your efforts to track online marketing must be manageable (i.e. not overwhelming). Most tools designed to track online progress can be set to provide alerts. However, I find it easier to set aside one hour a week to work through the various tracking tools we use to monitor our various campaigns.

Tips & Tools

If you’re not sure where to start, here are some free (or very cheap) options:

Tracking Traffic:

If you want to measure traffic, the simplest solution is to sign of for Google Analytics. It is free and simply involves adding a line of code to your website. How ‘traffic’ is defined will be covered in a future post. (However, make note that ‘hits’ is an out of date term and anyone who starts talking about their ‘hits’ holds views that are also obsolete.)

Tracking Registrations:

If your website already has an email newsletter sign-up page, you may already have systems in place to track registrations. If you do not wish to populate a newsletter database, other options exist to collect visitor contact data, such as the offer of a free ‘fact sheet’ or information guide. If your website does not already have a ‘form builder’, we recommend Wufoo. The success of online forms and newsletter registrations can also be tracked using Google Analytics. (Creating a Leads Acquisition Strategy will be covered in a later post.)

Tracking Sales:

If your website has its own ecommerce functionality, you should already be able to track sales. If it doesn’t, you may once again turn to Google Analytics and, in particular, it’s Goal Tracking function.

More on how to effectively collect customer data will be covered in a future post in this series, including the tools that are available for use by even the least tech-savvy.

Next time…

Over coming weeks, this series will address…

  • The language and tools of online marketing: tactics and terminology
  • How to create compelling offers online: Writing for the web (inc SEO basics)
  • Search Engine Optimisation: Why you don’t need to be a tech-geek to get it right
  • Social media: How to empower your customers to do your marketing for you
  • Using email to get cut-through and click-through: Web’s ugly sister
  • Why small business should become the next media barons
  • Masterclass: An integrated approach (inc. Leads Acquisition Strategy)
  • Checklist & Tools Summary