Thursday, January 26, 2006

Search is OIL (continued)

I previously wrote a piece here, about the Google/Yahoo challenges, and how marketers, that I have come in contact feel about online marketing in 2006 and beyond.

My main point was that advertisers who have experienced fantastic results using Search Engine, and Keyword PPC (pay per click) media, have done well....but, its time to refocus, and figure out the next "thing" to move the needles of their respective companies.

Well, it appears courtesy of Fred Wilson -- (who I read daily, and is one of not only the best bloggers online, but also just a great person) -- he has found a piece about "where marketers are focusing their online budgets in 2006. The article link is here --but here is a quick little point....

"Here is some data from the BtoB online survey "2006 Marketing Priorities and Plans" of 366 senior marketing executives that seems to indicate that observation is correct.
In 2006, 72.0% of marketers plan to increase online budgets. Within Internet spending, the specific media that will receive the greatest share of marketers' online budgets in 2006 will be
Web sites (30.3%)
e-mail (22.0%)
search (20.3%)
sponsorships (10.3%) "

Great, and what does this mean?

For some, who read that "email marketing " is coming back, they associate that word with SPAM.

Its not.

What it is, is a realization that companies want to move their communication with you online.
As a example, see what the online brokerages have done. (Etrade, Schwab) -- as well as banks...- I get virtually NOTHING in the mail from my provider.....

Companies will look to spend money on infrastructure, database management, analytics tools -- and media to capture data on the following 2 profliles --

* current customers
* prospects (high quality potential customers)

So, a retailer, a restaraunt chain you frequent -- will be more aggressive (both in store and online) about asking you to be part of their mailing database FOR INCENTIVES, like discounts, special offers and promotion.

The key is how that advertiser treats you in their interaction over email, will they bombard you - looking to turn a quick buck?

Or, will they treat you like GOLD?

I think this medium is maturing, and if senior executives say that email marketing is coming back, I think the web in general just stepped up - (and the SPAM connection or word associationto the word EMAIL will dissapate. )

I am VERY bullish on email marketing, and growing a database (lead generation) of high quality people, coupled with providing high value to consumers, is a long term win.

Companies positioned to ride this wave, (email marketers) will be HOT in 2006 and beyond.....


Anonymous Anonymous said...

Essentially what we are seeing is that current production capacity is outstripping demand, much like oil currently thus the price goes up. The ROI is great on search oil, but there is a limited supply. What do enterprising oil companies do when oil prices rise? They start to explore oil deposits that only become economical at those higher prices.

In the Internet world we're talking about banner advertising, although with new targeting techniques we can get great ROI (i.e. behavorial).

What we have with email is the equivalent of Alaskan Wildlife Drilling, we know the ROI is high, but there is much hype over it = SPAM. Most marketers have avoided the entire topic of email and it's time to bring it back. The tar sands of general RON banner buys make their current and potential future customer's email addresses look that much more appealing.

One other point to make - companies need to make sure they are focused on opperational excellence. There are many succesful small firms who have been able to turn a nice profit mining rich pockets of search oil. The problem comes when they want to scale, if someone isn't watching the house to make sure the internal workings are as efficient as possible those more expensive sources of new customers won't work and you'll be trading incremental revenue increases for incremental gross profit decreases.

9:36 AM  

Post a Comment

<< Home