Guest Speaker: Jim Sterne, President, Target Marketing of Santa Barbara
Interviewer: Diane Watlov-Collins, President, MARKETINGWEB.COM
Date: November 18, 1998

Welcome to the MARKETINGWEB.COM Forum! The purpose of this Forum is to provide online discussion concerning the methods of Internet marketing.

** Marketingweb enters.

Marketingweb: Our topic for November 18, 1998 is "Getting Clicks". Advertising on the Web has seen some explosive growth since Hotwired brought paid advertising into the World Wide Web in 1994 by selling banners. Banner advertising is still the most popular means of advertising on the WWW today. Large and small advertisers alike are concerned that their advertising dollars pay off. They want to be sure that they can measure the success of their campaigns.

Marketingweb: As advertising on the larger sites becomes more and more expensive niche sites have been drawing attention due to their targeted audiences and negotiable rates. However, many niche sites cannot afford the sophisticated tracking software or third party auditing employed by many of the larger sites.

Marketingweb: Here to address these issues and other concerns of the small to medium size businesses buying and selling ad space on the Web is tonight's guest, Jim Sterne. Jim is the author of several books including "What Makes People Click: Advertising on the Web", Que Education & Training, September 1997. He is a well known speaker and consultant and President of Target Marketing in Santa Barbara. Welcome, Jim.

Marketingweb: Did you have any trouble getting in?

JSterne: Works pretty well. No trouble at all.

Marketingweb: A frequent question among those who wish to advertise on the Internet by placing banner ads on specific niche sites using home grown tracking methods is, "How can I be sure that I'll get what I paid for?" What would your advice be to the businesses wishing to advertise on these niche sites?

JSterne: Larger ad serving sites have sophisticated tools for tracking the banners that they serve. They also pay third party audit companies to verify their numbers. The smaller sites are often a better buy because their audience is much more targeted. Unfortunately, they don't have the bucks for sophisticated tracking. While you can only take their word for the number of impressions they serve, you can accurately track the clickthroughs you get. Do you really care about the number of impressions? No. You care about the cost of getting a surfer to your site.

Marketingweb: In other words, those advertising on niche sites are usually more interested in the click throughs which provide the better chance of making the sale than impressions which someone concerned more with branding might favor. Is that correct?

JSterne: Almost everybody is interested in the clickthrough. If I can get some branding out of it that's great, but my chances of branding MORE come when I can pull the person to my site and interact. It's called "bonding with the brand."

Marketingweb: Concerning your earlier statements about tracking niche site response, the advertiser would create a separate page on his site for each particular banner to click through to in order to be able to check his own traffic logs to determine the success of advertising on each niche site he has chosen for his banner campaign.

JSterne: Yes - that's right. In addition, the advertiser can create a specific page for each banner to click through to. That way the clicker maintains continuity, rather than being sent to the home page to fend for him/herself.

Marketingweb: The advertiser could also follow that one step further and determine how many clicks it took to make a sale...is that correct?

JSterne: Absolutely. In the long run, I don't care about cost per impression or cost per click. I don't care about how many people a specific banner brought in - I care about how many people actually bought my goods.

Marketingweb: I like it. It makes good marketing sense.

JSterne: It also makes good economic sense. Now, if my site is geared toward a political campaign, then maybe the goal is to see how many people sign the petition or agree to go canvasing. Either way, I want to measure the cost-per-goal.

Marketingweb: Yes!

Marketingweb: Keyword initiated banner ads on the major search engines are becoming more expensive. Some believe that this will squeeze the small to medium size businesses out of that market. What alternatives would you suggest for companies wishing to continue banner advertising campaigns on the Net but can no longer afford to advertise on the major search engines?

JSterne: Advertising on the Superbowl is too expensive for the small business. But advertising on the local cable channel might be just the thing. The local cable channel is only seen by locals who happen to be your target audience. That makes it a smarter buy - not just an affordable buy. If you're selling fishing rods, then advertising on Yahoo! may not make as much sense as on www.fishinreports.com where you can get a banner on the home page for $50 a month.

Marketingweb: How do niche sites with less traffic but a more targeted audience compare to larger sites for an average clickthrough?

JSterne: At this point I'll prove I'm a consultant and say "It depends." Think of it just like a trade show... if you want lots of traffic, just hand out ice cream. But if you want lots of *good* traffic only hand out something that qualified prospects will be interested in. If you go to a site that has millions of people, you might get more traffic, but if you go to a more targeted site, you'll get traffic that really cares.

Marketingweb: I have seen "studies" indicating higher averages (for clickthroughs on niche sites) such as 3 - 5%.

JSterne: The higher averages are tough. Saturn ran banners on Yahoo and got about 2% clickthrough. They ran ads on smaller, more targeted sites and got 5% and 10% clickthroughs. However - Saturn was looking for as many people as they could get and 2% of a lot of banners on Yahoo! was much better for them than the 10% of a much smaller number of banners on the other sites... It Depends.

Marketingweb: I agree. Smaller companies might find the sale to click through rate more interesting on niche sites, however.

JSterne: A smaller company will also find the niche sites more affordable. They charge a lot more for their ad space, but they serve a LOT fewer banners, so it's more affordable. It's also easier to craft a good message for dentists in Southern California, than it is to craft good copy for all medical professionals. Remember - you're chatting with a guy who named his company "Target Marketing".

Marketingweb: I enjoyed the example in your book which showed a comparison between Excite and Epicurious. As the numbers played out the actual cost per click (CPC) was higher for Epicurious. I am wondering, however, if the actual number of sales made was higher from the clickthroughs coming from Epicurious! To many variables exist with the Excite user to determine why they clicked. On the other hand, Epicurious has a very targeted market.

JSterne: That's the big question. If I'm selling a $20 item - it's a critical question. If I'm selling cars or appliances, branding is more important.

Marketingweb: In Chapter 7 of your book you discuss the importance of " maximizing reach and minimizing frequency" in getting people to click on your banner ads. What do you mean by this and why is it so important to both large and small sites?

JSterne: Reach is the number of people who see your ad. It's how far into the marketplace. Frequency is how often each person sees your banner. It turns out that after about three viewings, the response (clickthroughs) goes way down. It's called banner burn-out. In a blink of an eye, a person can tell that they have seen it already. The message doesn't even register. But if it's a *different* banner for the same product, it's more noticeable. So - you want to show one banner to as many people as possible, but with a frequency of no more than three times.

JSterne: If you are sponsoring a site like www.fishinreports.com, then you want to try and change the home page banner every week or so, just to keep it fresh. If you're going to do it once a week, you have no real problem doing it by hand. However, if you want banners that rotate all day and keep track of which people have seen which banner, then you'll have to invest in some of the ad serving tools out there, or team up with an ad serving service.

Marketingweb: Do you have a service you would recommend?

JSterne: Again - I'm a consultant. It's two-pronged this time. First: "It Depends", second; keeping track of the tools and services out there is a full time job. I recommend following Michael Tchong's Iconocast (www.iconocast.com) and visiting www.searchz.com for more information than you can eat.

Marketingweb: That's very good advice. Both are excellent resources.

Marketingweb: What is it reasonable to expect from a niche site as far as their ability to facilitate banner ads? What does the average niche site have the ability to accomodate?

JSterne: The standard .gif banner is what you can expect to serve wherever you look. You could try and convince a niche site to serve your rich-media, Java-based, streaming media banner, but don't expect them to have the resources, or the knowledge to make it work.

Marketingweb: So expect to keep it simple?

JSterne: Expect to keep it simple so the sites you want to advertise on will accept your banners, but more important keep it simple because the people who view your banners might not wait more than four seconds for it to pop up on the screen before scrolling.

Marketingweb: That's good advice no matter where you decide to advertise.

Marketingweb: Having an advertising policy that is clearly stated on your web site is a point you emphasize as a way to minimize the number of problems you can encounter when offering ad space. What should this advertising policy include?

JSterne: Your policy should state what your pricing is, what your limitations on banner content are (adult/language/depictions) and what your technical restrictions are. Do you accept streaming video banners? How about Java? How about HTML banners?

JSterne: Spell out what you expect from your advertising clients and what they can expect from you. What are the cut-off deadlines for submissions? How do you handle the client that wants to buy one page but show twelve different banners depending on the time of day?

JSterne: Essentially, you are clearly defining the terms of engagement so you have something to fall back on when things get sticky.

Marketingweb: I believe it is extremely important to establish an advertising policy outlining the various points you have made, however, could there be some value to not publishing that policy on your site?

Marketingweb: Could you lose a potential advertiser by publishing information that appears to be absolutely set in stone when in reality we all bend on issues that are not fundamental to our character if the potential advertiser is big enough and the price is right?

JSterne: It's better to publish all and ad a comment about "working in a flexible environment". Otherwise you spend a great deal of time explaining your policies to people and they *still* might not buy from you.

Marketingweb: I see your point!

Marketingweb: Thank you, Jim for your participation in our Forum. We greatly appreciate your kindness and your expertise.

JSterne: It's been my pleasure!

Marketingweb: May we ask you back again..or to San Diego for a seminar?

JSterne: I'm always happy to participate when my schedule allows. And doing seminars on the road? That's my middle name ;-)

Marketingweb: Once again, you have our thanks. We look forward to the next time!

Marketingweb: Jim Sterne, Author, Speaker, Consultant and President of Target Marketing of Santa Barbara, Email: jsterne@targeting.com, Web site: http://www.targeting.com, Phone: 1 805-965-3184.

** JSterne exits.




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