Business and Investment Center

Contextual marketing opens up opportunities for companies that, for various reasons, can’t form the ongoing digital relationships that are the lifeblood of a successful destination Web site—for example, makers of consumer packaged goods, single-product companies, and infrequent service providers. The most innovative of these companies are already adapting their marketing strategies to take advantage of the ubiquitous Internet.

The ubiquitous Internet will vastly expand marketers’ opportunities to reach customers. At the same time, it will destabilize the “four Ps” of traditional marketing: price, product, placement, and promotion will all be thrown into constant flux, depending on the customer and the context. The marketing goal will be the same as ever: deliver the right product to the right customer at the right time. Companies will still have to form a deep understanding of their customers’ needs and desires. But in many cases, instead of owning customer data or individual customer relationships, successful contextual marketers will borrow them.

Even companies with flourishing destination sites can benefit from contextual marketing. Dell Computer, whose own site is an e-commerce leader, recognizes that most on-line computer shoppers bypass Dell’s site and go straight to ZDNet and CNET for in-depth product information—combined, those two sites have almost ten times the number of site visitors that Dell has. So instead of using costly and ineffective banner ads to divert sales prospects to its own site, Dell posts its detailed product information on ZDNet’s and CNET’s sites. Visitors at those sites can then compare the latest offerings from Dell and Compaq, pick the Dell machine, and launch the ordering process directly from the CNET or ZDNet site. By piggybacking on CNET’s and ZDNet’s relationships, Dell has significantly improved its customer acquisition economics.

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Depending on the search engine you use, you may have an initial deposit when you open your Pay per Click account of around $50, and a minimum monthly spend of around $20. Your bid amounts will depend on your chosen keywords. The bidding system means that the more popular keywords will end up being very expensive. Keep a careful record of what you are spending on PPC advertising as the costs can quickly mount up and you can end up paying more than you are making.

The following simple calculation will help you decide what you can afford to pay for Pay per Click advertising.

PPC Revenue

——————- = Revenue

PPC Visitors

To get the most out of Pay per Click advertising, bid on as many keyword phrases as you want to afford. Consider less popular keywords that are more targeted to your potential members, and which will command a lower price per click-through. Monitor and analyze your Pay per Click results carefully. Look both at which keywords are getting you visitors and which of these visitors are actually signing up to your membership site, or buying a product from you. Focus on the keywords that are getting you the most sales rather than the most visitors. If you are using PPC advertising extensively it may be worth using a bid management system, or even employing a bid management company to manage your advertising campaign. This will ensure you are not spending more than you are making, and will help you to focus on the keywords that are generating valuable, targeted traffic to your site.

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