With the rapid growth and technological advancements made through the Internet, eMarketers are estimating $39.5 billion will be generated in sales in the year 2012. According to a study by eMarketer, online advertising will continue to prove its worth in this time of economic hardships with a 23.3% increase in spending from 2011. This is nearly six billion more advertising dollars that will be spent in comparison to print ads in newspapers and magazines.

David Hallerman, eMarketer principal analyst, states “Advertisers’ comfort level with integrated marketing is greater than ever, and this is helping more advertisers – and more large brands – put a greater share of dollars online.” This is great news for us in the internet marketing industry, in which we only plan to expand our knowledge and skills in services such as search engine optimization and pay per click advertising as the demand for such services increases.

US online spending is expected to continue to grow in the next half a decade, with a mark of $62 billion anticipated by 2016. Displayed below, is a chart of the estimated spending numbers along with the percent change from the year prior.

With so much emphasis on the Internet and online advertising, those in the traditional industry of newspapers and magazines should pay close attention to this transformation. In 2011, total print ad spending was still approximately $4 billion ahead of online spending; but, displayed in the chart below you can see online spending will pull further and further ahead of the traditional channels of advertising in the years to come.

How do you feel about this Internet revolution? And how will this affect how we reach our target consumers if less and less people are reacting to the traditional means of communication [newspapers, magazines]?

Google studies have recently shown that 89% of incremental traffic comes from paid search ads, while the remaining 11% comes from organic search results. Organic search results are the sites that are “best recommended” by search engines like Google, while pay-per-click advertising allows anyone to place a bid on their ad to be placed next to the organic search results.

The research proved that by withholding search ads, also referred to as the “Search Ads Pause Studies”, the 89% of incremental traffic was not made up for by organic clicks when the Search Ads were put on pause.

It seems that Google’s bottom line in these studies is to ensure that spending money on Google ads is profitable. Others have been skeptical that the study does not provide an accurate account of organic click results in the absence of paid search ads.

The simplification of the Google AdWord Keyword Tool, as expressed in the article, “R.I.P. Google Keyword Tool. Long Live SEO!“  creates a burning question to marketers who rely on this toolbar:  How does this change our process? Many have been questioning Google’s agenda behind this vast transition and it seems that monetary influence seems to be the driving factor behind it.

How will this change affect marketers?

With other search engines like Bing and Yahoo gaining popularity, perhaps it would make sense for Google to restrict its vast inventory of information. “Commercializing” the keywords available to users may simplify the average users experience, but it greatly changes the way marketers go about retrieving SEO information. With less AdWords data available, advertisers are forced to buy more Adwords and this hurry to buy will undoubtedly cause the cost to increase even more.

According to the Google blog (http://googleblog.blogspot.com/2010/04/new-approach-to-how-we-work-with.html), the purpose of the newly implemented AdWords Keyword Tool is to help advertisers become more proficient and strategy-focused. Google’s new AdWord Certification Program requires advertisers to display their knowledge and capabilities through more challenging certification exams. These exams will match agencies with Google Certified Partners based on their needed criteria. Finally, Certified Partners have access to the new preferred AdWords API Pricing, which agencies must apply for and be accepted to view the Adwords API. Google emphasizes that advertisers should not be concerned with increased cost, but rather to experiment with new strategies and expand on the resources they already have.

It looks like marketers may just have to utilize other databases as well as Google Adwords Keyword Tool such as  WordStream, Trellian and WordTracker to obtain the information and research they need, since the tool now limits results. Google could be controlling what we, the user, have access to because that way, they will make more profit.  A large concern for a lot of users is the strategy that Google seems to be implementing, which gains control of its users and their capabilities as researchers. Whatever the motivation for this drastic change, it definitely changes the way online marketing will function in the future.

Long the subject of speculation and prediction, the world’s most active micro blog, Twitter, announced major changes to their social network in an attempt to position their network as a profitable enterprise.  Twitter Feeds will no longer be free of the influence of the almighty dollar as Twitter unveiled its new Promoted Tweets function, which is basically Adwords for Twitter, and TweetUp, the latest development out of Idealab which is a search engine and bidding marketplace that works in collusion with Twitter.

Twitter offers advertising partners top post

On the Twitter blog, the company enumerated specific expectations of the advent of Promoted Tweets.  Advertising partners can bid for keywords to ensure their tweets reach the top of the pile once a certain keyword is searched for, much akin to the Google Adwords model.  Twitter lined up commercial partners to start using Promoted Tweets that include Starbucks, Virgin America, Best Buy, Red Bull and Bravo, and offers as example that Starbucks Tweets will always turn up first for a Twitter search for the term “coffee,” provided Starbucks continues to bid on the term.

Twitter emphasizes that they are only in the first phase of their Promoted Tweets program and insists that the promotional aspect of the tweet placement does not mean a decay of quality.  Promoted Tweets, according to Twitter, must meet a higher standard than your average tweet, resonating with users and garnering retweets to maintain its placement as a top tweet.

TweetUp seeks to establish bidding marketplace

TweetUp is a bit more complicated than Twitter’s Promoted Tweets as it utilizes an algorithm taking into account a tweet’s author, number of followers, influence score, number of retweets, along with the user’s bid for their tweet.  Keywords will cost 1 cent per impression; however, if a tweet does not meet the aforementioned qualifications, there is no bid high enough to launch it to the top of the feed (like an Adwords quality score).

All in all, major changes lie ahead for the social network taking its first steps toward monetization; however, Twitter promises the integrity of its network will be maintained, if not emboldened, as the white noise of real time updates won’t hide relevant tweets in the shuffle.

In case you didn’t know, we’re in tough economic times.  These economic conditions have drastically cut budgets across the nation and world, leaving meager allowances for marketing and advertising in its wake.

Nonetheless, expectations for 2010 remain optimistic.  In a new study released yesterday, StrongMail reveals nine out of ten business executives plan to maintain or increase their marketing budgets.  Execs aren’t thinking conventionally for the new decade either, instead the survey’s respondents indicated they were open to marketing strategies that utilize the Internet and maximize their dollar.  Next year, 69 and 59 percent of business executives anticipate increasing their email and social media marketing, respectively. Another 42 percent claimed they expect to spend more on search engine initiatives, such as SEO and PPC.  The survey’s results indicate a migration to internet marketing tactics, as advertising and direct mailing initiatives are expected by less than 30 percent of execs.

Furthermore, the study showed a desire among business executives to combine the tested and proven tactics of emailing potential customers with social media.  Execs did not, however, demonstrate uniform confidence about how they would go about implementing such strategies in the upcoming year.  Instead, one out of five executives claimed they had no idea where to begin.  With more businesses seeking to establish an online presence in hopes of finding cheaper alternatives to conventional advertising, it is certain that social media marketing and search engine initiatives will play integral roles in the year 2010.

Many companies using Internet marketing strategies out there drive most of the traffic to their home page or possibly another internal page of their website.  The optimization of any online marketing campaign should focus on both the traffic drivers as well as where the traffic is sent.  This is especially true when using search engine marketing strategies like Pay Per Click advertising in any search engine. 

It is now crucial to use a landing page for PPC advertising in Google because it wll have a direct impact on your Google Quality Score and conversion success.  The idea of consversion optimization is pretty simple but the purpose should be understood in order to execute it correctly for your webpages.  The main idea of course is to always be improving your ROI.  There is no point in spending tons of money in online or offline marketing if you are just planning to drive traffic to your home page (unless of course your home pages acts as a well optimized “landing page”).

Here is an example.  JetSelect Aviation (a premier private jet charter service) has performed various form of marketing (online and offline), including Yahoo PPC.  All the traffic was being channeled to their home page and results had been fairly dismal.  They were recieving about one or two leads a month.  Here is an example of the home page:

Once the marketing campaign started, aggressive Googe PPC was added and four landing pages created.  The ad copy for the ads was written according to their direct business goals.  It is important to understand Google Quality Score guidelines in order to properly optimize your PPC campaign for the best possible results.  Here is an example of one of the landing pages created.  Notice the update in design, graphics, clear calls to action, simple booking engine right at the top of the page, and simple information (there is more content below the fold). 

Landing pages can really be as simple or content heavy as you want (in my opinion).  What matters really is what is above the fold and how the call to action is designed.  Of course, this all depends on your conversion goals and what you plan to obtain from your landing pages.  Those goals should be defined first before designing the page or launching any marketing. 

The initial result of the properly optimized PPC campaigns and well designed landing pages was going from one or two poor quality leads per month to five to eight high quality leads per day.  The results will of course vary depending on your business, industry, and specific goals. 

Either way, you must use landing pages with great content ands clear calls to action in order to get the most bang for your buck from your Internet marketing strategies. 

In Part One we talked about the details of getting your web-based start-up off the ground including business plans, fundraising, and legal.  Now let’s look at Internet marketing and how you plan to create online awareness about your brand.

Internet marketing:  Forget traditional media like print advertising for now unless you know someone or have cost effective creative ways to execute this plan.  Also keep in mind that if you plan to build online awareness, then online marketing is the fastest and most cost effective way to go.  There are many strategies and if you have successfully raised money then you have some good options.  Hopefully you budgeted this in your plan under the “Use of Funds” category.  If not, you may need to get more money!
Search engine optimization for your website:  I can’t stress this enough.  If I have to do some things differently for the first company I started, then I would have invested heavily is SEO from day one.  I would have saved millions in Pay Per Click advertising.  Before I go off on that tangent, let’s move on.

Pay Per Click Advertising:  A great way to get some initial traffic and conversion from your site.  Hire a professional Internet marketing company that understands how to budget, target ads, and foster conversions using optimized landing pages.  This way you can ensure that you are using your budget wisely.  I can’t say how many times companies have approached us with current PPC budgets in the tens of thousands per month who have terrible analytics with bounce rates over 90%.  This is just plain depressing.

Social Media Optimization and Marketing:  This is a very powerful tool which can help begin to build your brand online.  Executed using the right strategy and it can be one of the most cost effective brand builders out there.

Keep in mind as an entrepreneur you should be wearing most of the hats.  Sales & Marketing is definitely one of the areas you should not outsource at the beginning.  You know your brand and your purpose better than anyone and hopefully you have more passion than some outside marketing consultant could offer your target audience.  Also, if you are an online company, you should know the basics of Internet marketing.  Learn how to perform a basic Google AdWords campaign or even get certified.  Once you have a bigger budget though it is better to turn this over to Internet marketing professionals who have proper bid management tools.  This will allow you to focus on growing your business rather than worrying about what keywords to turn off and descriptions to change.

The bottom line is that whether you are doing it yourself or you have hired an Internet marketing company to do it for you, invest in this area from day one.  Trust me.  It will pay off big time soon.  Don’t wait to start the long road to page one in Google.  Start now.

Hiring and Firing:  You may plan on being a one man (or woman) show for a while but eventually you will need to hire some kind of staff.  Use resources like Craigslist, Dice.com, or Monster.com to find qualified people.  I suggest calling references BEFORE you even bring them in for an interview.  This can save time.  Sometimes people can interview very well but are not actually good employees.  I have been very close to making offers before but then called some references and was saved a bit of unforeseen discomfort.
Make sure your interview process is comprehensive and ask tough questions.  Do not be rude or intentionally try to stump the interviewee, but be sure to ask questions where thought process is more important than the actual answer.  Ask questions about what they like to do outside of work and use sites like Facebook.com and even MySpace.com for further research.  Hey, it isn’t an invasion of privacy if the person decides to tell the whole world about every time they binge drink!

The timing for finding good people could not be better.  It is a buyer’s market…for employers that is.  Due to the current economic conditions there is a vast availability of highly skilled workers.  You can hire people more cost effectively.  This is not to say you should use the economy to make offers that are embarrassingly low.  Be fare but realistic.

Do not be afraid to let people go if you sense they are not working out.  If you are an experienced employer or manager you can make these judgments more quickly and will usually be able to tell if a person will work out in the first couple weeks.  This is not the economy in which to play the “let’s wait and see” game.  You will need self starting team players who leave the office after you do; or that are at least willing to stay as late as you do.

I also suggest from a leadership standpoint that you should be the first person at the office every day without exceptions.  This sets a good standard and people will know you are committed to the company’s well being…and theirs.

Money Management & Operations:  If you are running the books, I suggest always running much leaner and much meaner than you even think you need to.  Being liquid goes a long way.  You will have greater piece of mind even things are taking longer to grow than you thought…which will most likely be the case.  Liquidity will also help you build credit and obtain a line of credit should you ever need one.  A LOC is a great way to live a bit beyond your means rather than spending tons in legal fees for raising equity capital.  Not to mention you will have to give away a lot of ownership.

I have always heard from some very experienced entrepreneurs that you should always raise as much money as you can whenever you can.  For the most part, I agree with this statement.  I would say though that when you are starting out you should raise the money you need and not more.   Save that for later.  As an entrepreneur, you will ALWAYS be raising money.

Make sure employees are paying for themselves in some way.  This is easier to calculate with sales people but everyone should have goals to hit and benchmarks to exceed.  Even the admin people (although as a lean and mean start-up you should not be paying admin salaries).

Offer benefits if you can afford them because you may not attract good people otherwise.  Statistically however, over 50% of small businesses do not offer any type of benefits.  So if you are out there looking for work, do not look shocked when the company that just offered you a position says they do not offer benefits and tells you to bring your own computer to work!

No company is completely immune to the economy so if you plan to start your own business be wise about it, plan accordingly, and work your ass off!  Entrepreneurs who are successful usually work a lot more than people working for major companies in the same industries.  If you think you are going to start your own business so you can kick back with your laptop on the couch…think again.  Unless you are engineering one hit wonder and make billions in a liquidity even that only took two years to reach, then you better get to work.  The amazing success stories like Facebook.com and YouTube.com are just that.  Amazing stories.  These situations are not the norm.  Most of us will have to work for a living!  Hopefully you love what you do so it does not seem like work, but life!

Google is a dynamic anmial that we will always be chasing but may never catch up to completely.  Both Google search engine optimization and Google AdWords are always updating algorithms, strategy and requirements.  Its like having a boss that you are always trying to figure out and impress.  As soon as you think you have figured him/her out are in their good graces, they all of a sudden no longer care about that particular skill you may have acquired (just to impress them).  It can be a frustrating path, but like anything else…all we can do is persevere!

First, lets define what the Quality Score is in reference to Google AdWords (PPC).  The Quality Score is a dynamic metric or calculation that assigns a score or rank to each keyword in your ad group.  The score is calculated to display how Google thinks that particular keyword fits within your ad group and the user’s search queries.  Basically, the higher the Quality Score is for a particular keyword, the lower the cost per click (CPC) and the higher the ad position will be on the page.  The Quality Score is yet another effort by Google to improve the quality and relevance of ads and results that appear in their SERPs.

With Google’s latest updates, it no longer uses the “inactive” classification for keywords in your ad group that have a maximum bid below what is required for first page placement.  Now Google assigns those keywords using the “first page bid” qualifier.  Before you could still tell when your keywords were not appearing on the first page but this defines it more clearly and puts it right there in front of your face.

So why does Google do this?  In my opinion it is largely revenue based.  This shows Pay Per Click advertisers how much they have to increase the bid to appear on the first page.  Once you do, very soon others will follow.  By doing this, Google is creating a new sense of urgency among the bidders.  Previously, when you saw the inactive classification you might delete that keyword from your ad group.  Now, the ads are actually active but simply assigned a classification as “not being on the first page”.  This causes PPC bidders, Internet marketing firms, and PPC management companies to increase bids more frequently and sooner than they would have in the recent past.

So keeping all this in mind what can we do to “impress” Google now and make sure our keywords and ad groups are assigned good Quality Scores?

The best thing to do is always stick to the basics:

(1) Do some keyword house cleaning.  You don’t need your Quality Score to tell you a keyword is not working well within your ad group.  You can simply look at click through rates, bounce rates, and conversion rates to see what is going on.  Sometimes you may have keywords that are assigned a “Poor” Quality Score but actually have decent conversions rates.  However, the click through rates are propbably so low that it may not be relevant enough to keep in the ad group.

(2) Look at your ad groups and make sure there is not too much redundancy in the keywords.  Naturally, you will want to have a bunch of different variations in keywords but consider separating them into different ad groups as Google might penalize you if you do not.

(3) Always make sure your ads are targeted to the pages that are as relevant to the ad as possible.  Ideally, we would all be creating a landing page for every keyword but that of course is not at all realistic.  Laning pages are not just important anymore for conversion rates.  Google will take into consideration the pages that your ads are directed to.  Make sure those pages have the keywords at least once or twice in the meta tags and content.