18 March, 2008

What is online marketing?

Every few days, I meet someone and have to explain what I do for a living and it gets a bit irritating because very few people seem to get it.

a1: so what do you to?
a2: I work in an online marketing agency.

a1: (blank)
a2: Well we advise clients on how to spend money online...

a1: (Eating something and looking away)
a2: It is like how a regular marketing agency works - Suppose a company has a million dollars and wanted to spend it in selling more soap. They would go to a marketing agency and ask them for a media plan. The marketing agency would tell them how to market their soap, which TV channel and programs to use for advertising and how much to spend where. An online marketing agency that for an online audience, with a website owner as a client and online audiences as a target audience.

a1: so you are selling soap online? (between mouthfuls)
a2: we can help a client sell whatever he wants to

a1: Hmmm. So what do you do then?
a2: (imaging a car crash in slow motion) grr.,..

I get to play a2 about 50 times a month.
Below is an answer with the eloquence it deserves.

Online Marketing is a set of activities undertaken on behalf of a client or an employer to:
1) help drive online actions
2) in the most cost effective manner and
3) to track and report online actions.

Online actions could vary from a Purchase, Lead generation, email quote request or just viewing a website or a banner.

Cost effectiveness would mean:
3) What was the cost of buying traffic from this specific traffic source (How much did the click cost?)
4) How much did it cost for a given source to drive an online action. Remember that traffic is not bought for traffic's sake (not any more) but for driving a particular online action.
5) How much money was made as a result of this online action? (what was the value of the sale which happened?).
6) If 5) is greater than 4), then we turn up the knob for the given traffic source. If not, the knob is dialled down.

To make every one a bit more calm, there needs to be a system of accurate tracking and reporting:
7) Such reporting would provide data for questions 1 to 5.
8) it would also help us do 7) for every single link, website and campaign.
This set is the set of things an online marketeer does. It has a certain deterministic appeal to it. It also has a real world uncertainty about it. Every campaign shows a diminishing marginal return after a point. Every campaign has an elasticity - price, volume, conversion all change. Thankfuly, every campaign has its own predictability as well.

The interface with the client involves providing answers for the following questions:

1. Which set of online mediums/websites to be used?
2. How much to spend on each such website?
3. Which kind of commercial arrangements to be set up - Pay per click, pay per view, pay per action and so on...
4. Which creative formats to use?
and 5. How to track and run reports so as to measure what is going on?

What makes a good online marketer:
- To understand the nuances of reporting systems
- To have a good eye for detail
- To be a natural flair for analytics
- To be able to work in a team

This, in a nutshell, is online marketing. This is what we do!

1 comment:

astha said...

Awesome!!! Dats a real neat description of Online Marketing!Thats exactly wat i want you to contribute to my book with a few examples here and there.. I hope the blog posting wasn't a result of our conversation and my ignorance on the topic. (Hahaha)Anyway just a suggestion there could be a few interesting sequels to this one, so that by the end of it we r clear and certain that you are not selling soaps!!

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