Business Development Metrics

Putting $40 or more into your gas tank today isn’t a pleasant thought, though there is a reason why everyone who owns a vehicle goes through this jolting experience. They know that the gas they buy is going to get them to work, which results in more than $40 being put into their pocket so they can pull up to the pump another time.

Advertising in traditional ways is the gas going into a tank. Businesses spend money on advertising, but they don’t know if it’s the fuel that pushes their revenue or an ancillary expense that brings no reward.

Advertising is a necessity, don’t get me wrong. It’s only that traditional advertising vehicles - radio, TV, print - aren’t showing THEY are what pushed a customer through the door. In the new media world this proof is easy to provide.

No one needs to explain the internet’s magnetism to you; its ability to gather individuals in groups until eyeballs swell into the millions is proven. Nobody needs to provide links to a new world of content that comes with the internet, either. Amateurs are competing with professionals for the consumer’s time, online. The common denominator between all of these is the giant swell of people that advertisers can now reach out and touch in multiple ways and track.

Here’s the scary part for executives in radio, television, and print (especially those who have failed to move their media forward): Advertisers are finding that if they spend $2000 they can directly connect it to $10,000 worth of sales through numerous online metric and analytic programs. Though it isn’t a pleasant thought to know your business will spend money on advertising, at long last media buyers (and by default, advertisers) are finding they can trace $10,000 worth of sales directly back to that $2000 expense, and then pull up to the ad pump again.

Internet analytics & metrics are here. For those stuck reading an Arbitron Book, Nielsen Report, or newspaper audit, your days are changing - forever!

As with any media there are two sets of important numbers: how many people are in your audience, and how much businesses will pay to reach them. To an old-hand media type, determining the first is a statistical guess. The latter fluctuates in a range that still produces handsome profit margins. But, ask a new media type about either of the above. You’ll find that the first answer is a near exact number of people reached, while the second isn’t such a profit-friendly figure anymore. To continue with the above analogy about gas, the internet advertising pump has bargain basement prices and you can see exactly how many people it drove to buy at your store.

Here’s an example that I need to share with you. In one online ad campaign I’m involved with the average CPM in Q4 2007 was $3.24. Modest by any media pricing, today. Yet, it is the highest CPM of all campaigns I oversee. Other campaign CPMs range from $0.65, $0.24, through $0.18. The average Q4 2007 CPM spent for all keyword ad buying campaigns I’m involved with was $2.05.

The magic is that we track this spending to see which areas pushed customers through the door, and which just delivered an “impression.” We are making adjustments in Q1 2008 ad spending based on analysis of the data received in 2007. Expectations are that ROI will increase as each campaign is “tweaked.”

For those who feel internet advertising is only for companies wanting to reach a national or global audience, read this from Google’s official blog. “AdWords and local markets” speaks of how Google recently hosted the first annual Local Markets Symposium at [their] Mountain View Googleplex, which brought together more than 150 current and prospective Google AdWords Authorized Reseller partners to discuss how [they] can bring the power of local online advertising to small and medium-sized businesses. Yahoo! has its own local online ad sales program, and Microsoft is trying to establish one. All, though, offer “local search” connected to mapping which features ads about businesses that pay these remarkably low CPMs.

Advertising analytics and metrics will never remove the traditional forms of media from a local business’ choice of advertising vehicles. But, over the next few weeks Audio Graphics will show you why analytics and metrics will continue to cover an increasingly larger share of the advertising pool - local, regional, national, and global.

Keyword ad buying is only on the surface. What’s below it identifies a return on advertising investments, or where money is being wasted. (There’s Gathering and Using Sales Related Data, Web Site Log Analysis, Testing, and Search Engine Optimizing to consider; and each one shows the media buyer where money flowing into their pocket is coming from.)

It’s important you understand the changing landscape of advertising accountability. To help and explain the options being offered, Audio Graphics will host its first hour-long online seminar on Wednesday, January 16 at 4pm EST.

Attend, and you’ll see what’s being used with more regularity in the decision process for advertising spending. Choose to operate in the traditional manner; by the time you understand there’s this new form of advertising stealing your share, it will be too late.

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