Adrian Hewlett, chairman of the Online Publishers Association and MD of Habari Group, South Africa’s largest online media sales house, sheds some light on how different companies can use online media to generate leads, grow their business and build their brand – no matter what their size.
In the UK in 2008, companies spent 21% more on online advertising than the previous year. A year later, online adspend exceeded that of advertising spend on TV. The US shows similar trends, withonline advertising growing by around 8% at a time when all other ad spend plunged by 14%. This in spite of the UK and US being two of the countries hardest hit by the global recession – or perhaps it’s because of it. At a time when companies are looking for more bang for their advertising buck, online advertising is coming up trumps.
South Africa experienced similarly robust growth; according to a study by World Wide Worx and the Online Publishers Association(OPA), online ad spend increased by 38% in 2008 and is expected to rise by 32% in 2009.
What’s in it for me?
So if you haven’t already joined the online advertising trend, the question you should be asking yourself is “Why not?”
“Many companies will tell you they’ve tried online advertising and it didn’t work, that they got no return,” says Hewlett, adding, “And in many instances they are absolutely right. But the reason that online advertising didn’t work for them is not because the medium isn’t valuable or can’t deliver results, but rather because what was sold to them was probably not appropriate to their business or relevant for their marketing needs.”
It’s a topic that gets Hewlett hot under the collar. The OPA, he points out, is about to publish a new code of conduct that aims to stamp out the practice of unscrupulous advertising repsselling inappropriate online packages to unsuspecting businesses. “It gives the industry and the medium a bad name,” he says. When done correctly online advertising can be extremely effective, delivering better and more measurable return on investment than other forms of advertising. Hewlett explains: “Thereis a lot of research comparing groups that have been exposed to a brand with no online campaign, with those that have been exposed to brands that do have an online campaign. The brand recall was 30% higher for the brands that dedicated 20% of their marketing spend on online advertising.” He adds that online advertising is able to engage customers for longer – up to eight minutes in some cases – a powerful differentiator when compared to a 30-second television spot, particularly when you take into account the relative cost of each.
Get The Basics Right
“But, like any marketing or advertising campaign, you need to get the basics right if you want it to succeed,” says Hewlett.
The most important thing is to set your objectives. Ask yourself:
- Why you want to advertise: is to build brand awareness, promote a particular product or service, generate new business leads, grow your footprint or increase your existing customer base?
- Who you are trying to target: existing customers, new customers, competitors’ customers, suppliers, partners, media
- What message you want to send them: do you want to tell them about a great new addition to your product line-up, or remind them to come to you whenever they are looking for a service provider in your industry?
- How your online campaign will fit in with the rest of your marketing strategy: failing to integrate your online campaign with your marketing strategy and other advertising activities will drastically reduce your chances of success.
“The answers to these questions will inform how you advertise online and help you to choose an appropriate campaign that will deliver results within your budget,” Hewlett says.
Spend & Size
The next step is to look at your budget and the size and footprint of your company. “Many small companies think that online advertising is not relevant to them, but whatever the size of your company, there is an online advertising campaign to match. The key is to match it to your budget and the objective set-up front,” Hewlett explains. He outlines possible online advertising scenarios for three companies of different sizes and in different industries:
Pool cleaning SME with localised market in Bedfordview area
Traditionally, this type of business would have taken out classified ads, advertised in the local community paper and maybe handed out flyers. The owner might have a limited marketing budget of around R10 000, or less. His objective is to generate new leads that convert to new customers, but only in a very specific geographical area because his business is located in Bedfordview, and that’s what he can manage.
1:Spend some money building a decent website.
Don’t make the mistake of using your cousin’s brother to do it – all too often you will spend more money fixing what is wrong with the website. Your online presence is vitally important so it’s worth spending money on. It’s very important that your website is search engine optimised (SEO), so that it comes up when a customer searches for “Bedfordview pool cleaning” on the Internet. On this point a word to the wise. Many agencies claim to understand SEO but there are only a few in South Africa that are really good at it, so find a specialist. If it hasn’t been properly SEOd when it was built, it’s often not possible to fix it later on and you may end up having to pay another agency to redo the site from scratch. But remember that Google can take up to nine months to find your site even with SEO, so be patient. State your objectives upfront and be clear about what you can spend.
2: Invest in a pay-per-click (PPC) campaign.
This is a paid search option where you pay a search engine a certain amount, agreed upfront, every time a user clicks onto a link to your site. The beauty of PPC is that it is highly targeted to a specific audience and you can cap the amount you want to spend each month. It won’t necessarily build your brand but it will generate leads that are likely to convert into customers. It is also easy to measure. Assume the pool cleaning guy sells his service for R1 000, every new customer is worth R1 000 to him. If he spends R10 per click and for every ten clicks, one converts to a customer, he’s spent R100 to get a lead customer. This is a 10% marketing cost. It’s a simple formula – click, enquiries, sales.
This is all Hewlett would advise our pool-cleaning business owner to do on the Internet. It meets his need to generate new leads, and it’s targeted towards his specific market. If he buys abanner ad on MSN he will be reaching more people, but only a tiny percentage of them will be in his market, so he’d be wasting his money.
Medium- to large-sized travel agency with national footprint
This business has a bigger marketing budget which it currently spends in weekend print press ads and some billboards. They have a website but it’s not interactive and acts more as a “shop front”, providing a telephone number and maybe a list of specials for the month. It doesn’t allow people to book online. This company’s objective is to build its brand and increase its customer base on a national level. It wants more customers to be taking it up on the specials and promotions on offer.
1. Invest in improving your website.
Most people book travel online so this business shouldbe building that capability. They should be including travel reviews, customer feedback links, daily and monthly specials, competitions.
2. Invest inongoing SEO.
Because the content is continually being updated, this business needs to make sure that someone searching for “travel Tahiti” will get sent to their website in the month that they are offering a special on flights to Tahiti. To do this, they need to include “Tahiti” in their SEO for the month.
3. Invest in aPPC campaign.
This works in the same way as it does for the pool cleaning business, but it helps you to segment your spend according to your most lucrative market. If the travel agency might make a bigger profit sending customers to Mauritius than to New York, it would be able to spend more per click for people interested in Mauritius than those that convert to customers who book a trip to New York.
4. Invest in display advertising on national search engines. This can be divided into:
- Brand-building: generic display adverts on the front page of search engines.
- Promotion-specific: promotional ads on the travel sections of all major portals to highlight the latest specials.
Large corporate organisation with national footprint
Typically, large corporates have a large marketing budget with a highly sophisticated marketing strategy. They will be spending on print, radio, television and outdoor ads, but their webpresence is frequently lacking, or not integrated with the rest of their campaign. The large corporate usually wants to interact with its customer base, build its brand and direct attention to certain campaigns and promotions.
- Invest between 15% and 20% of marketing budget in online advertising. This is in line with best practice the world over.
- Integrate your online activity with the rest of your marketing campaign.
- Separate your online media budget from your online production budget.
- Invest in PPC, display advertising and a differentiated website offering. An example of a company that does this really well is FNB. It has a great Internet banking offering, a How Can We Help You? site, and a site for eBucks, among others. These promote each of the bank’s different activities to specific audiences.
- Employ an in-house digital media team or engage the services of a heavyweight digital media expert to help ensure that all the different sites are SEOd, and have PPC and display campaigns appropriate to their specific markets.
Get in Now
Hewlett adds a point about the importance of starting to advertise online sooner rather than later: “The major advantage of doing so is that the local space is relatively uncluttered and there is an opportunity to do exciting stuff with the buy-in and assistance of publishers. They are hungry for advertisers now, but this won’t always be the case. In the US, companiesneed to book premium spaces a year in advance sometimes, and South Africa will go the same way. If you get in early, you can start to build relationships and negotiate to your advantage, before everyone jumps on the bandwagon.”
A common misconception is that the South African online community is small and that penetration is very low. It’s a reason many people give for not advertising online. However, the reality is that South Africa has 5, 3 million tax payers and 6, 4 million online users (which includes the youth market who are not yet paying tax). So while the online community is still a small percentage of the overall population of 48 million, the people online are the ones with disposable income and therefore, the ones that you want to talk to. It’s a highly targeted market.