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, we have been pretty busy with monthly reports, and some exciting Google Analytics setup stuff.  Of particular note, MetaGeek recently migrated their website to a new platform, and earlier today they decided that the transition warranted an upgrade to the new ga.js, rather than the old urchin.js.  We are pretty excited because we have only “played” with it so far.  Luckily, the guys and gals at MetaGeek are on the bleeding edge of technology and they aren’t afraid of the word beta.

So, enough of the fun stuff….  We are in a transitionary state now (new name, new partners, new products, and other new stuff), and the change just can’t come fast enough.  So, we have been grappling with one of the hardest things in our industry (IMHO) — Pricing.

Pricing several of the services we offer is akin to hitting a moving target, and what works this time may not be applicable next time, but in fairness to our clients (and potential clients) we are working on a solid pricing strategy.  Today’s discussion was particularly about Paid Search Marketing.  Check out our paid search marketing page to see what we came up with after years of practice and and weeks of discussion.

There are several models out there, and we picked the one that is most inline with our philosophy that data-driven decisions are the best way to make good decisions.  So, here is a little about the major pay-per-click models out there, pros and cons, and why we chose the one we did. (more…)

A year ago the search marketing space in Boise wasn’t extremely crowded. In fact, when Marc and I first embarked on our venture (2005) I think there was basically nobody in the space. Well, over the last few months I have met several people in the industry that are specifically “search marketers.” Granted, some of the people reading this are saying, “Well, I have been doing search marketing in Boise for years.” And, they probably have. I think there are few things at play here…

First, have you ever noticed how when you buy a car all of a sudden you see the same make and model all over the place. I bought a Chevy S-10 Blazer when I was in school, and the next thing I knew they were the most popular car on the street. Was it because I was so cool everyone wanted to be like me? No, I was just more aware. So, I freely admit that is one possible reason why there seem to be more search marketers in Boise than there used to be. (more…)

Paid search is a useful tool for supporting almost any online strategy. In some cases it will be the primary tool for driving sales through a website, however, it usually is not. Before you start your AdWords campaigns (some of these concepts apply to other search marketing platforms as well), know what you are trying to achieve.

You can use up all of your resources getting optimal click-throughs and not increase conversions one bit. If you are marketing a new product to a highly targeted market that may be an acceptable strategy — perhaps you will want to optimize your campaign for traffic. If you are in a well-developed market your ad spend will be better allocated by optimizing for conversions. By the way, this decision will affect everything from keyword selection to landing page content.

In practice, most businesses want to create campaigns that increase traffic and specific conversions. However, to simplify the presentation I am going to ignore that and treat them as completely separate. (more…)

We will be posting more about paid search marketing, so I will keep this fairly brief and high-level (again, just giving an overview of the website optimization space). 

Paid search, strictly speaking, is simply paying to have text advertisements appear on search results pages.  Now, not surprisingly, there is a lot more to it than that.  For example, the major search engines have extensive “content networks,” which means your ad can show up on websites.  And, you can create image ads and video ads in addition to the classic text ads.  The key, regardless of how sophisticated you want to get with your paid campaigns, is to keep your message consistent and relevant.

Website optimization has to extend to the ads your marketing and design team puts out because if they are saying one thing and the website is saying another you could have a serious image problem.  Additionally, the search engines reward consistent themes from keywords, through ads, and on to your website.  A well structured paid search campaign will have lower cost-per-click and higher conversion rates.  Typically, with any website optimization effort you will need to extend beyond the website and look at the message in your ads and on referring sites.

You will be able to track the success of message alignment via your web analytics solution.  A measurement of single-page accesses will start to give you a feel (although it is not a perfect measurement) of the effects.  Also, the data you collect from your paid search efforts will give you a little glimpse at the “why” people visit your site, as opposed to just knowing that they do. 

Here is what I mean:  The keywords your visitors search for represent questions, or needs, they have.  You can test key terms with paid search that will give you insight to their questions, which you will not get via organic search.  Also, you will get a better feel for search volumes by looking at paid search impressions.  See, now you are starting to understand your web visitors a little better.

My philosophy is that paid search marketing, even if you are not interested in the pure advertising part of it, is a relatively inexpensive way to conduct some market research.  In terms of website optimization, the critical role of paid search marketing can totally ignore the advertising function, if it makes sense to do so.

Marketing, as it relates to web optimization, is Valitics’ area of expertise. That being said, Marc and I could write a book on the subject, however, I will keep this blog post short. There will certainly be plenty more to come in future posts.

The primary point I want to address in this broad overview we are walking through is that your message has to be consistent from the initial “touch” to the customer satisfaction follow-up. This principle embodies many of the elements discussed in the other disciplines related to website optimization. Here is an example:

Let’s say you meet a potential client at a leads group. They immediately get an impression of you from your conversation, they have expectations. One of two things will happen when they visit the website on your perfectly designed business card — it will either validate their expectations or it will not. A general measure of that will be your entrance page bounce rate (not super scientific, just a question of did the visitor find what they were looking for). I am not claiming that it is a perfect measure, but coupled with additional measures can give you some insight to your “wow factor” as Marc likes to call it.

The same process will occur if visitors come from your paid search campaigns, organic search results, or referring websites. Make sure your message is consistent whenever possible, and you will see increased results from your web marketing efforts. One point to consider is that you need to know your value proposition prior to creating ads and web pages.