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Internet marketing overview


A lot of my clients want a marketing strategy that involves internet marketing. Usually just online advertising is fine, but to more fully utilize the tools available to a small business, an internet marketing component should be part of a marketing strategy.

Internet marketing sounds straight forward enough and to some degree it is.  However, it can get quite confusing when one goes beyond simple advertising on one website.  Mix in compensation methods, market segmentation, success metrics, etc.  then it gets fairly complex.  As such, I put together an overview of internet marketing.

This post is a 30,000 foot outline of internet marketing (online advertising).  As such, it is just an overview and not meant for detailed explanation.  Each concept can be more deeply studied.  Some of the terms are interrelated, meaning they are not mutually exclusive and can be blended with one another.  Please keep in mind, marketing =/= advertising, although the two terms are frequently interchanged advertising is a component of marketing.  Therefore, some of the concepts are more directed about marketing the company and/or product rather than just advertising.

This overview is pretty broad so skip to the end to find out what you as an entrepreneur/small business owner can utilize internet marketing for your company.  The first two sections are:  Delivery methods and Compensation methods

Delivery methods

  • Display advertising:  This is the most common and probably what everyone is most familiar with.  The process can be straight forward or quite complicated.
    • Example: Pretty much every website you’ve ever visited.
    • Related:  Web banner advertising, frame ad (i.e. traditional banner), pop-ups/pop-unders, floating ad, expanding ad, trick banners, news feed ads
      • Display advertising process overview:  This is where the real difference between traditional vs. online advertising is seen.  In traditional (and simple online) cases, the advertiser contracts with the website publisher and the ad is displayed. This is hardly done anymore beyond small relatively unknown websites.  In a more complex case, the advertiser hires a marketing firm that might handle everything including content creation and placement (this is not the case many small startups face. Scroll down to the end for actionable info).  The component that separates online advertising with traditional real-world advertising is the real-time bidding process at an ad exchange.  An ad exchange is a platform that facilitates the buying and selling of media advertising inventory from multiple ad networks. Prices for the inventory are determined through bidding. The approach is technology-driven as opposed to the historical approach of negotiating price on media inventory.
        • General diagram of the display advertising processad-exchangeSource:  Wikipedia – Ad exchange
        • Ad network:  An online ad network is  a company that connects advertisers to web sites that want to host advertisements. The key function of an ad network is aggregation of ad space supply from publishers and matching it with advertiser demand.  The fundamental difference between traditional media ad networks and online ad networks is that online ad networks use a central ad server to deliver advertisements to consumers, which enables targeting, tracking and reporting of impressions in ways not possible with analog media alternatives.
  • Interstitial:  Ads that appear before the main content of the site is loaded.  Kind of like a pop-up, but the ad appears in the same window instead of a new window.
    •  Example:  Bvlgari’s ad on Forbesinterstitial
    • Related:  Text ads
  • Search engine marketing:  You type in ‘auto mechanic’ and the first search result that comes up is a doctor’s office, usually near you.  This isn’t necessarily an “advertisement” (remember marketing =/= advertising) but it brings awareness of the business to the customer by displaying it in a list of other auto mechanics.  What rank it shows up on a search engine’s result is a mixture of keywords, backlinks, tags, page titles, daily bidding budget, etc.
    • Example:  Google Adwords, Bing/Yahoo Adsysg-adwords
    • Related:  Search ads, SEO, sponsored search
  • Social media marketing:  Advertising on…social media!  Each platform has their own pricing, terms and conditions.  However, their reach is expansive and consistent.  Facebook, for example charges as little as $5 per day and you can choose your target market, key words, photos, etc.  I wouldn’t recommend social media marketing for startup B2B companies, but a great resource for businesses in other sectors.
  • Email advertising:  Often synonymous with spam.  Success is mixed but a resource to consider.  Unsolicited emails are not encouraged unless you are very sure the target is receptive to your product/service.  However, if the recipient is a former customer, it is a great and direct method of communicating deals, specials, updates, etc.  You can easily create your own email list or hire email marketing companies such as Constant Contact to do this.
  • Online classified advertising:  Online classified are relatively inexpensive but less targeted.  An engaging headline, attractive photos (if attachments are allowed), and a persuasive yet succinct text body are essential for success with this advertising channel.  This is not a suitable advertising channel for high-end/luxury brands’ products/services.
    • Example:  Craigslist, eBay Classifieds
  • Affiliate marketing:  Sometimes called lead generation, affiliate marketing is when advertisers organize a 3rd party to generate potential customers for them.  Third-party affiliates receive payment based on sales generated through their promotions.  The affiliate earns a commission when the visitor completes a desired action such as a link click, email submission, filling out an online form, completing an online purchase, etc.
    • Example:  Product review blogs affiliate-marketing
    • Related:  Affiliate network, CPM, CPC, CPA
  • Content marketing:  An article, video, how-to-guides, quizzes, etc. (i.e. content) that is meant to market a product or business.  This can be a relatively expensive strategy suited for more established companies.  Companies can hire “brand journalists” to write articles about a wide range of subjects relevant to their company.  The articles I post on this website is a very simple version of content marketing.
    • Example:  GoPro’s page on YouTubegopro
    • Related:  Earned media, custom media, brand language, inbound marketing, interactive marketing, content strategy
  • Native advertising:  A type of “disguised” advertising that matches the form and function of the platform upon which it appears. In many cases, it is displayed as either an article or video, produced by an advertiser with the specific intent to promote a product. The word “native” refers to the similarity of the content with the other media that appears on the website.  The post the link takes you can be the company’s page or an article discussed in the Content Marketing section above.
    • Example:  “Articles” that show up in a feednative-ad-exampleearn-graphic
    • Related:  In-feed ads, search ads, recommendation widgets, promoted listings
  • Online marketing platform:  This is software designed to help manage all of your marketing in one platform.  Your marketing manager or hired marketing firm will most likely utilize software of this sort.  As a startup, depending on your marketing strategy, using an online marketing platform is probably not necessary.


Compensation methods

Due to the accurate data on views, various types of multimedia, and other metrics that digital advertising allows for over traditional channels, several compensation methods have come into favor in the industry.  Furthermore, because advertisers can track action online (unlike if a radio advertisement has been heard or a TV commercial seen) compensation methods is largely separated into impression and action.

  • Cost per mille (CPM):  With this impression method, advertisers pay for every thousand displays (a.k.a impressions) to potential customers.
  • Cost per click (CPC):  Advertisers pay each time a user clicks on the ad/link with this action method.  CPC is recommended as a compensation method if you want the customer to visit your site.  If your goal is just to build awareness of your company then CPM is recommended.  CPC is growing in popularity though, with two-thirds of all online advertising compensation methods being CPC.  One concern with CPC is accidental clicks.  Thus, click rates using CPC has to be lowered to account for accidental clicks.
  • Cost per engagement (CPE):  This action method aims to track not just an impression but if the viewer interacted with the ad.
  • Cost per view (CPV):  This is mainly for video advertisements and is appropriately the primary benchmark used in YouTube ad campaigns.
  • Fixed cost:  This is the most straightforward and arguably the most cost (in)effective compensation method.  This is mainly time duration dependent and as such the cost is measured in cost per day (CPD).
  • There are other, less common methods as well as hybrid methods but as a startup it is unlikely you will see them.

Wow this is great and all, so how do you as a small business owner use this to advertise online?

It’s pretty straight forward:  Search engine marketing (Google Adwords and Bing Ads) and Social media (typically Facebook).  If you do that you’ll probably be ok and have most of your bases covered.  The trick is getting your demographics, budget, and keywords on point.  Internet marketing is an art that almost anyone can do but takes a skilled professional to do well.

All my business plans come with a basic marketing plan which can be expanded into a full fledged marketing plan that breaks down a company’s full marketing mix including branding, timing, advertising channels, pricing, and more.

What is your 5 year plan?


How a little movie called Cowboys and Aliens got made



Step 1:  Change the goal post of the definition of “hype”

Step 2:  Create hype

Let’s say you have a product that you want to build hype around.  How do you go about it?  If you’re Scott Rosenberg and Ervin Rustemagic (of Men In Black fame, which started as a comic book) then you go about it an atypical way.  Rosenberg and Rustemagic purchased the rights to a western comic book called Tex.  Tex was a good comic but at the time, Westerns weren’t a popular movie genre.

So they spruced up the comic to a Sci-Fi Western!

Then it languished in development purgatory.  For years.  So Rosenberg came up with the novel of idea of making the script into a “graphic novel”.  If he couldn’t get the script onto the big screen, he’d get in paperback!  This is because lots of popular comics and graphic novels are turned into movies (i.e. Spiderman, Captain America, etc.)

This is where step 1 comes into play.  Rosenberg had to make the script the #1 graphic novel in the country.  Rosenberg intentionally choose graphic novel instead of comic as the format because to be the #1 comic in the country, he’d have to sell almost half a million copies.  For graphic novels, it’s a more manageable low tens of thousands.


So Rosenberg got a bunch of the 144 page graphic novel printed up.  Normally graphic novels are priced $10-$15, but because he need to move a lot of copies he priced them at $4.99.

In addition to selling through normal comic distribution (which Rosenberg negotiated a few rules to make happen), he contacted a number of prominent comic book stores throughout the US and had them “purchase” the graphic novels for essentially nothing.  The comic book stores had to “purchase” them or else it wouldn’t be counted as a sale.  Rosenberg then gave the stores a check to purchase tens of thousands of dollars of the graphic novel.  Overnight, thousand and thousands of copies of the graphic novel were “sold”.  The comic book stores would sell them for 50 cents or just give them away from free.  Unsold ones were tossed into the dumpster.

This is where step 2 occurs.  Rosenberg wrote a press release claiming the high number of sales and that it outsold Frank Miller (of Sin City fame).  Also, Entertainment Weekly reported the sales chart of one store (which received the deeply discounted copies) which happened to list Cowboys and Aliens as the best selling graphic novel of the month.

A few years later, Cowboys and Aliens hit theaters.

Of course, he didn’t actually sell the copies that were actually given away.  This is arguably fraud.  However, it does show their creativity in convincing the studio heads / decision-makers in getting a stalled project moving.

When faced with a hurdle, a lot of creativity (as long as it is not fraudulent) can take you a long way.  Another great marketing story is in my article about Shep Gordon.

Adjusting to market demand


This is what allowed Zara founder, Amancio Ortega to become the richest man in the world (for at least a couple days).


Fast fashion:  Customers wanted the latest fashion, yesterday.  Zara’s competitors were taking too long bringing the latest designs to market.  Other retailers try to decide what to make, then produce it.  A push-model of product development.  For example, GAP and H&M will take 5 months to make, design, and distribute new products.  Zara listens to what their customers are asking and buying.  A pull-model of product development that takes Zara 3 weeks.

Of course it’s not as easy as just asking what each customer wants.  Lots of times, people don’t know what they want until it’s shown them.  Henry Ford once said if he asked what his customers want, they would’ve responded with, “a faster horse.”  Also, changing from a push-model to a pull-model requires overhauling a company’s supply-chain.  Raw materials purchases buy 6 months out or more.  Trying to get a refund on 100 gallons of dye is not as easy as it sounds.

Although Zara is not considered inexpensive, lower-market competitor Forever 21 has taken it to the next level.

Cheap:  In addition to fully embracing fast fashion, Forever 21 offers their products at very low prices.  This has allowed Forever 21 to have revenues of $4.4 billion in 2015.


Take away

So how do you incorporate market feedback in your business?  Generally, smaller companies have an easier time making adjustments because it is a more agile company with more one-on-one contact with vendors and customers.  In business school I asked billionaire Leonard Lavin, founder of Alberto-Culver (maker of Alberto VO5 hair products) about his education background.  He said he had an MBWA.  Master By Walking Around.  This meant, he walked around his business and talked to his employees, his customers, his vendors.  He conducted market and industry research everyday.  If you don’t take the time to talk to your customers, it might be detrimental to your company’s success further on down the road.


I actually spent part of it working on a client’s business plan and pitch deck.  However, I like the work that I do  =)

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