Was just reading a really interesting article in AdAge ( http://adage.com/article?article_id=138673 ), about WPP, the holding company for such advertising behemoths as JWT, Y&R and Ogilvy. It’s probably not a shock to anyone that their profits are down 47% in 2Q 2009, given the economy and marketers need to cut back ad spending (media, production, and creative costs).

What I found really interesting about the article is the shift in where they made their profits. The article states that “More than 61% of the holding company’s revenue came from nontraditional services such as direct, digital, PR and research.” Back when I was a worker bee at JWT, media (as in broadcast and print) was a huge profit center. Considering the huge cross-section of clients they represent, it’s an important shift.

Digital Marketing, Marketing advertising, Online Marketing

A friend of mine who works from home called me the other day. She said she had noticed prices at offices supply stores seemed to be going up, which struck her as odd considering the state of the economy.

I thought she had to be mistaken. As a small business owner, I get at least one coupon a week from different office supply stores (along with special offers from just about every other retailer you can imagine). They’re all pretty much the same, “Get $25 off your next purchase of $75 or more” or some variation on that general theme.

It got me to thinking. When I was a kid, I worked in a small corner drugstore after-school and on weekends. The day before a seasonal sale, the owner of the store would hand me a pricing gun and have me go around and change the price of the items that were going to be on sale. Actually, to be clear, he’d have me raise the price on the items that we were going to put on sale. That way, when the customer got their discount, they’d feel great because they thought they got a bargain, and the owner felt great because he was selling lots of merchandise without really discounting anything. It seemed wrong to me, but I was 15 and in no position to ask questions. That was a tiny local drug store in a small town, in anywhere USA, and it was decades ago. Could the mass retailers be employing that same strategy on a national scale?

Are they upping their prices and then sending us discount offers?

After my friend and I spoke, I did some spot-checking on my own. We moved offices recently, so we had purchased more supplies than usual in January. What we bought was basic for any expanding office. Things like large white boards, another laser printer, shredders, etc… In checking back on what we paid, I realized that prices at Office Depot had in fact gone up since January. I checked by SKU # and not by product name to be sure I was comparing apples to apples.

So, in essence, the special offers they send simply negate the increase in prices. I don’t mean to pick on Office Depot. I just happen to have receipts from them so I can be sure of the price changes. Has anyone else noticed this and if so, why haven’t we banded together and called them out on it?

Marketing Marketing, Recession Marketing

There are exceptions to every rule and it is important to analyze each situation on its own merit. But as a general starting point, a good rule of thumb for creating online ads is to remember the following: successful offline advertising gets consumers to buy products or services; successful online advertising drives consumers to a website, which in turn should sell the consumer.

For example, the ultimate goal for a television ad for dishwashing liquid is to convince the viewer that the next time they buy dishwashing liquid, they should buy that particular brand.

An online ad for dishwashing liquid can’t really get enough information across to convince a user to buy that product. The online ad takes the user to a website that extols its benefits. Even if that site is not an ecommerce site and doesn’t sell the product, the purpose of the site to convince the user that the next time they go out to buy dishwashing liquid, they should buy that particular brand of cleaner.

The online ad program should influence the messaging: PPC versus CPM

Ads running on a PPC basis should first create interest and then qualify the user before they click through to the site, since each click will cost the company money. Qualifying the user first stops wasteful click-thrus and increases ROI.

Ads placed on a site with a weekly or monthly CPM should create interest and drive as much traffic to the site as possible. Since ad expenditure is based on the number of people that have the opportunity to see the ad and not how many people click on the ad and go through to the site, the ad doesn’t need to qualify users as much as a PPC advertisement. But that doesn’t mean you should write an ad that sends everyone to the site. It means an ad on a CPM site doesn’t have to qualify the user as much as a PPC ad.

Remember, there are certainly exceptions to this rule and we’re not talking about branding efforts online.

If you take one thing away from this post it’s this: online ads drive traffic to websites, which then sell the users on the product.

Marketing advertising, AdWords, Banner Ads, PPC

I was at a trade show visiting a friend about a month ago. She has a small and steadily growing business. Her booth sat at an interesting point on the trade show floor, near where the smaller businesses gave way to the behemoths, the brand names we all know.

Of course my friend, a veteran of the larger trade show circuit, has by now come to know many of the other trade show warriors. Her relationship with them gave me an incredible opportunity to peek into the mind of the small business owner who manufactures or sells products into the thousands of specialty and chain stores in this country. What I found was fascinating, if not a little disturbing.

The facts are this:
• To a person, all of the business owners I spoke with have been in business for less than 6 years. Meaning they all created their business after the internet became a household name.
• They spend tens of thousands of dollars on these shows every year, year in and year out.
• Those expenditures don’t account for the lost productivity. For small businesses, every day spent on a trade show floor is a day where other business cannot get done.
• None of the businesses owners I spoke with spent more than $3,000 annually updating, maintaining, or marketing their sites. They had friends, or friends of friends around who would update pictures or add new press to the site.

What was fascinating was that all of them sold their products wholesale to retailers who sold their products online. So, although others had created a business out of marketing and selling their products online, they still didn’t take it seriously.

Bring your business into today’s age, and take your future into your own hands.

They were all doing business like it was 1995. Back then, trade shows and selling wholesale was the only way, the only option manufacturers had, to get their products out to the public. But in 2009, that is decidedly not so.

Consumers use the internet every single day to shop for what they need. Consumers do not have to know your brand name to buy your product online, any more than they do offline.

By not making your internet presence the backbone of your marketing mix, you leave the fate of your business in the hands of retail shops, hoping that they are able to drive in enough foot traffic to sell your products.

What a huge mistake.

I am not suggesting cutting out trade shows altogether, but the emphasis is backwards. Tradeshows play a supporting role to your online presence.

Make your website your priority. Create it to sell your products at retail pricing 24/7. It is not a look book. It is not a place where family and friends shop to support you. It is your most important store, and your best salesperson. Treat it that way.

Take 50-60% of your trade show budget and reallocate it to your web presence. Hire a professional. I know I’m biased but if you try and do this yourself you won’t see the kind of ROI you need. You hire a professional to take your catalog pictures. You hire a professional for your graphic design work. You hire a professional for product design help. Hire one for your web marketing too.

As your online sales pick up, budget 15-25% of your sales every month to advertising online the next month. So, if you did $10,000 in online sales in January, your budget for online ads in February is $2,000.

Then, pick only one or two trade shows to go to every year to get your products out into stores.

Marketing Ecommerce, Marketing, Online Marketing, Search Engine Marketing, Small Business, Website Design