Well, Sam Swenson at Blueline (now co-founder of Tricycle) never finished his blog about how much a website costs.  I am really disappointed about that because I really want to know :-).   I thought I would do my part in cutting through the Internet fog and give you a run-down of how much Internet marketing should cost.

Guess what?!  It really isn’t going to be that conclusive, because, as you heard Sam say regarding websites, “it depends.”

Here is what I can do to help though.  The type of marketing you do will make the difference.  Most common is search marketing, which consists of paid search marketing and organic search engine optimization.  I can’t really help you decipher what you will pay, but more how you will pay, and how to evaluate “which costs more.”

I recommend reading my really confusing look at paid search marketing to begin with :-).

Next, take a crash course on the benefits of fixed vs. variable cost structures — my very short tutorial is as follows:  Fixed costs require greater risk, but after break-even have higher returns, whereas, variable costs are easier to plan for but will reduce your leverage.

Okay, so what does that have to do with search marketing?  Well, organic optimization is usually a fair chunk of change (say $3-10,000), upfront or over a specified time period.  It takes on more of a fixed cost structure.  You pay a fee and then your watch for your ROI.  Every dollar you make in product margin from organic search efforts is put toward breaking even, after you break even, every dollar you make in product margin goes in your pocket (simplified…).

Paid search marketing takes on a variable cost structure where you are paying per click, per purchase, or per conversion, etc.  Under this model you will pay some of your product margin every time you convert a lead.  A lot of times there is some sort of fixed monthly cost for paid search too, but you can divide that out into the field and treat it as a variable cost if you like (doesn’t change analysis a whole lot unless management fees are higher than your ad spend).

In conclusion, if you have a high risk tolerance and you like the idea of reaping rewards in the future for your efforts today organic is a good choice.  If you are risk averse and you want to match your costs to your revenues paid search will suit you well.  This analysis, in its simple version, ignores things like traffic quality; organic search traffic tends to be more prepared to convert.  In most cases, you will want to use a little of both to “hedge” your bet :-).

We get this question a lot from our clients and friends.  Like everything there isn’t a simple answer, but let me shed some light on how we work toward getting a good answer to this question.

The primary consideration is usually how you monetize your website.  In many cases it is hard to draw a line from a paid search visit to cash in your hand, however, you should get as close as you can.  Once you have your best effort to track that in place (probably with web analytics) you will have to make some assumptions that you can test over time. 

For example, we may assume that 1 out of every 100 persons that sign up for the newsletter eventually purchase our product.  If the average product price is $1000, we would presume that a newsletter sign up has a value of $10.  This analysis is not perfect, but it does reflect the reality that leads who buy “subsidize” the leads who do not buy (more on that in a second).  Your number will get verified and refined as you evaluate it from week to week.

Businesses who do the bulk of their business online will not have to make these leaps of faith, and therefore will have better information for making marketing decisions – lucky!

One last note on monetizing your site, if you make your money via advertising you need to determine how much you make per pageview.

Now that you have some semblence of how your site value you can start to analyze whether you should increase your AdWords budget.  Get the following information from your analytics and from the computation discussed above:

• AdWords cost
• Number of conversions resulting from AdWords (separate different types of conversions)
• Value per conversion type (each type of conversion will have a different value)

Using this information you can calculate how much each conversion type costs (AdWords Cost/AdWords Conversions).  Now compare the cost to the value (Total AdWords Conversions Value/Total AdWords Cost) — this number, I call it Return on Ad Spend, tells you how much money you make for every dollar you spend on AdWords.

Now, be careful not to bet the farm on your ROAS, because it doesn’t take into account your overhead, variable costs, or paid search management fees.  It also doesn’t account for people that were introduced to your website via AdWords, left, and then came back by Organic Search or Direct URL, they will overwrite the original source :-(.  So, your ROAS is an approximation, but it gives you a better feel for cost and value.

Notice I didn’t say anything about optimizing your ads or campaigns, because that is next….  If you are pleased as punch with your ROAS, increase your budget to the point of diminishing returns, which may come sooner than you think. 

If you aren’t confident that your ROAS is optimized start by improving your quality score on the expensive words and eliminating non-performing words.

I promise if you start looking at this information you will get a feel for how your AdWords campaign is really performing.  As a general rule, when we do this sort of analysis for our customers we end up optimizing their AdWords account rather than increasing the budget, which increases their ROAS, and it usually ends up that they don’t need to increase the budget to increase profitability!  When we do recommend a budget increase it is typically because their AdWords efforts have higher conversion rates than their other online marketing efforts, not just because they have a high ROAS.

So, I hope this helps at least a little bit.  I know it isn’t the silver bullet, but it is a start :-).

Well, you won’t learn how from me, but I will be presenting a short diddy about how to measure your blog’s success.

My good friend, Trey Langford, from Building Credibility, is putting on an event with one of Treasure Valley’s New Media moguls, Justin Foster.  Justin is co-founder of Tricycle.  Cost is $10 and the event will be 9:00am to 11:00am on February 7th.  You can get details and pay online at http://www.buildingcredibility.com/Blog_Like_a_Rock_Star.

Anyway, you should definitely come and learn from a pro, and get some pointers on how to know when you got it right :-).

Valitics Internet Marketing is excited to announce our partnership with the fantastic website design firm, Westslope Design.  This partnership has been brewing for awhile now (J  at Westslope designed the Valitics.com and AskValitics.com websites :-).

I could say a million nice things about the guys at Westslope, but the fact that we have formed a partnership should be evidence of my regard for their work.  We have worked with a lot of fantastic designers over the years, and we will continue to work with them.  However, we formed a partnership with Westslope because of our common vision and complementary product offerings.

For all of our customers and potential customers this is very exciting news.   Valitics will now be offering services that we were not able to offer before.  For example, now you can get website design, content management systems, and managed email campaigns (to name a few).  The bonus is that these services will come with Valitics’ reporting, which means you will know what the campaigns are doing for your bottom line.

Check back for more information on this development.  We will be updating our websites with the expanded products and services.

So, you want to optimize your website to create the perfect customer experience?  Well, that is a reasonable expectation if you have a million years to achieve it.  The trick word is “perfect,” right?  Right.

Optimizing a site assumes there is an “optimal,” not a perfect existence.  This is mainly due to conflicting needs.  Last time I wrote about writing for the right crowd, which is complicated when you have several target markets.  Today, I am saying you have to pick the optimal existence, is your site 80% focused on sales and 20% focused on servicing current clients?  Or, is there some other mix?  An optimal mix will support your web strategy and business goals.

Many folks get discouraged when they focus on conversion rates and traffic volumes go down, or they focus on getting paid search impressions and bounce rate goes up.  Your goals, like your audiences, will often conflict, particularly when you have limited resources.  So what should you do?  Pick a strategy mix and test it out.

If your goal is increase your brand recognition, you can bet your website’s overall profitability (ROI) will go down.  It is a fact of life.  Now, in the long term we may expect to reap rewards from our efforts today, which is what branding is all about.  So, with the conflicting goals at hand you just have to pick a mix that you are comfortable with and GO. (more…)

There is much debate in our industry about usability, findability, functionality, and a hundred other ilities.  The debates typically stem from looking at the same problem from a different perspective, and the things we love to argue about are usually easily settled.  There is a solution, and I will share it with you here!

Identify WHO the site is for.

This is the first critical step, whether you come from marketing, IT, development, design, data analysis, management, etc. In every discipline you need a clear picture of who the site is for. I recommend defining your audience, getting a picture of someone in that specific audience and hanging by your computer screen (not even joking).

One of the local boise “findability” companies (Cendesic) bases their value proposition on helping Jane Thompson meet you.  It is a novel concept and ultimately, assuming you have a reasonable business model, should be a primary goal of your company’s marketing efforts (not just web).  If you aren’t convinced yet, take a look at Web Trends’ website.  Same principle of knowing your market, but in this case Web Trends is saying:  You are found, now get to know Claire. (more…)