Just wanted to get everyone's opinion regarding advertising online.

Recently I have had a horrible time justifying any PAID online advertisting. Advertising in WHT, posting on bulletin boards, and other "free" methods have been delivering better responses! much better... and of course local offline word of mouth, is really carrying my weight right now...

Here is what I have found:

Pay Per Click (PPC): The search engines that have sufficient traffice to deliver visitors - charge too much. These engines (overture), might work well in other industries, but I don't know anyone on WHT that can justify $10, $5, or even $1 per visitor. Then there are the 5000 other PPC engines out there. Yes they are cheap, but they have zero traffic. catch 22.

Banner advertising: Very 1997 ish... ok just kidding, but let's face reality - how many do you click??? When you have people charging $2-20 per CPM (cost per thousand displays), it makes you wonder, when you comapre CPM of conventional advertising... I have been lucky with a few place (no I won't tell you where) where I advertise banners STRICLTLY per click... $.10 (10 cents) - and they are at least profitable... but I won't be retiring just yet...

Search engines: essential, we all use them, but with most going to some form of a 'pay per visitor' or 'pay to list', the days of getting a flood of 'free' visitors is long gone. Sure search engines if done properly and you have PLENTY OF TIME TO WAIT, can pay off. But why would anyone send you a visitor for free, when some sucker is paying $10 for that click? Search engines have really gone to the wasteside of typical corporate big money in recent years (just IMHO!!)

Bulleting Boards: good way to get the name out, but I don't know about you but they only way I could get a flood of WHT members to host with me is offer something like 10000Megs for 20 cents a year or something... some might even argue that price!

Pop under/over: Ok we have all seen the Ebay ads for 50,000 visitors for $2! What a deal! I have an idea, you give me $2, and I will write a script to refresh your page 1000 times an hour for 50 hours - watch the orders flood in!

So I guess after we slice and dice all of the online options, and non-sense it still reverts back to good old fashion word of mouth and refferalls... Of course I am basing all of the above that 90% of us on WHT are small, most don't have offices or employees (we do, but due to other primary business), or large advertising lines of credit. I am also picking out my least favorite and unproductive advertising forms...

We still use online advertising, but 99% is a complete waste of time and money - IN THIS BUSINESS anyhow... I will concentrate on the 1% that is sorta possibly working... or at least minimally profitable.

Just my opinions anyhow.... I have been known to be wrong... :-)

I think you hit the nail on the head there :) Banners are a big waste anymore as people ignore them and there are so many free banner and pop up blockers out there that it's almost pointless to have them anymore.

You're exactly right, I really appriciate your input on that.

I think more to the point - it's not that online advertising is a waste of money - it is that people waste their money on online advertising.

There is no point spending money to advertise if your site can't close a sale. Too many websites created by designers and not by marketing = pretty sites that waste ad money

There is no point spending money on advertising if you lose the customer after 6 months.

PPC is expensive on adwords / overture etc - you should never spend any money there without understanding how efficiently you can close a sale. Certainly at say a $10 avg selling price / month and 1% conversion ratio of visitors to sales you can never make PPC pay off - but increase that to only 4% and PPC even at $4 a click can make sense.

All the non targeted stuff is just worthless unless you are aiming to brand your company and even then you need a big budget.

I agree with you 110%.

I would definetly like to make a point about:


Originally posted by intraweb

Bulleting Boards: good way to get the name out, but I don't know about you but they only way I could get a flood of WHT members to host with me is offer something like 10000Megs for 20 cents a year or something... some might even argue that price!



Someone *would* under-cut your price... its getting crazy. I see people on here now offering 15GB bandwidth for <$3 per month.

Its really stupid, the problem is the customers go with them, but 6 months down the line they come back, and guess what [the majority of them] they do? Thats right, they take on another cowboy deal.

I guess we have to just deal with that, and it is another issue altogether so I wont drag it in here, wait I already have though? :x

Anyway, advertising online is getting more expensive and more difficult to attain anything from.

Hopefully this will change, cant see it myself though.

I'd have to agree with you guys

so its best not to advertise at all? :rolleyes:

Well,

You also have to relize not all online advertising needs to stop.
There are other forms of online advertising, such as Overture PPC.

Those are good in essance not for hosting companies, but other businesess.

Just wanted to give me 2cents.

There is a miss-conception that overture is not good for hosting companies. It certainly is good for some hosting companies and way out of reach for many others.

Example1

$5/click
Spend $1000
Prospects = 200
Convert to Sales = 1%
New Customers = 2 @ 10 $/month
= 20 $/month = $240 / year in new sales
= 4 years to recoup investment !!

Example2

$5/click
Spend $1000
Prospects = 200
Convert to Sales = 5%
New Customers = 10 @ 10 $/month
= 100 $/month = $1200 / year in new sales
= 10 months to recoup investment = not bad

Now - if those 10 customers over time each bring in 5 other customers by word of mouth - all of a sudden you have 60 new customers ! from your original $1000 investment.

less than 1% ability to convert prospects to sales is very common - but there are many hosts in the 5% range & there are some close to 15%. This is based on hard data.

My point is - do not write off overture just because it is $5 a click - pay very close attention to how well you can sell.

If you can't sell then not even $0/click is going to stop you from going under

Originally posted by intraweb
Just wanted to get everyone's opinion regarding advertising online.

Recently I have had a horrible time justifying any PAID online advertisting. Advertising in WHT, posting on bulletin boards, and other "free" methods have been delivering better responses! much better... and of course local offline word of mouth, is really carrying my weight right now...

Here is what I have found:

Pay Per Click (PPC): The search engines that have sufficient traffice to deliver visitors - charge too much. These engines (overture), might work well in other industries, but I don't know anyone on WHT that can justify $10, $5, or even $1 per visitor. Then there are the 5000 other PPC engines out there. Yes they are cheap, but they have zero traffic. catch 22.

Banner advertising: Very 1997 ish... ok just kidding, but let's face reality - how many do you click??? When you have people charging $2-20 per CPM (cost per thousand displays), it makes you wonder, when you comapre CPM of conventional advertising... I have been lucky with a few place (no I won't tell you where) where I advertise banners STRICLTLY per click... $.10 (10 cents) - and they are at least profitable... but I won't be retiring just yet...

Search engines: essential, we all use them, but with most going to some form of a 'pay per visitor' or 'pay to list', the days of getting a flood of 'free' visitors is long gone. Sure search engines if done properly and you have PLENTY OF TIME TO WAIT, can pay off. But why would anyone send you a visitor for free, when some sucker is paying $10 for that click? Search engines have really gone to the wasteside of typical corporate big money in recent years (just IMHO!!)

Bulleting Boards: good way to get the name out, but I don't know about you but they only way I could get a flood of WHT members to host with me is offer something like 10000Megs for 20 cents a year or something... some might even argue that price!

Pop under/over: Ok we have all seen the Ebay ads for 50,000 visitors for $2! What a deal! I have an idea, you give me $2, and I will write a script to refresh your page 1000 times an hour for 50 hours - watch the orders flood in!

So I guess after we slice and dice all of the online options, and non-sense it still reverts back to good old fashion word of mouth and refferalls... Of course I am basing all of the above that 90% of us on WHT are small, most don't have offices or employees (we do, but due to other primary business), or large advertising lines of credit. I am also picking out my least favorite and unproductive advertising forms...

We still use online advertising, but 99% is a complete waste of time and money - IN THIS BUSINESS anyhow... I will concentrate on the 1% that is sorta possibly working... or at least minimally profitable.

Just my opinions anyhow.... I have been known to be wrong... :-)

Too many people expect to spend a 100 bucks, and make back that 100 bucks by the end of their campaign. The fact is, there are too many web hosting companies out there to expect some guy to just click on an ad to your site, and buy that second. Instead, he may bookmark your page, do some research on other hosts and your host, and he may come back. If he comes back 2 weeks later, and unless you tracked him with cookies, you think he was simply referred to by means of "word of mouth".

If you are simply looking to bring some traffic to your site, a couple hundred bucks is worth it, but you just aren't going to see results by dumping that into Overture. The key to advertising online in a very competitive market is branding, and thats what you see the big guys doing. A typical "host seeker", will end up on a hosting directory, search through the directory and unconsciously take in the names of hosting companies advertising, or with unique listings, and will move to next directory. If they notice the name again, they will be interested and will follow to that hosting company that has successfully branded their name into Joe's head. (his name is Joe) It's not over yet, if they have experience in web hosting/webmastering, they will research the host, otherwise the web host will get them to sign up simply by having a presentable web site, incentives, "good deals", or whatever the reason for signing up.

This is how I feel.


Pay Per Click (PPC): The search engines that have sufficient traffice to deliver visitors - charge too much. These engines (overture), might work well in other industries, but I don't know anyone on WHT that can justify $10, $5, or even $1 per visitor. Then there are the 5000 other PPC engines out there. Yes they are cheap, but they have zero traffic. catch 22.
You should consider hiring a media buyer, because Overture is certainly not the only "good" PPC engine out there. From personal experience, I've had good experience with Sprinks, Kanoodle, and I didn't bid over $.13/click. As far as traffic goes, I ran through $100 with Sprinks in a week. The traffic quality was exceptional.


Banner advertising: Very 1997 ish... ok just kidding, but let's face reality - how many do you click??? When you have people charging $2-20 per CPM (cost per thousand displays), it makes you wonder, when you comapre CPM of conventional advertising... I have been lucky with a few place (no I won't tell you where) where I advertise banners STRICLTLY per click... $.10 (10 cents) - and they are at least profitable... but I won't be retiring just yet...
Again, this comes back to researching. I know PLENTY of ad networks that would love your business for a mere $.10-$.15/click. If you are interested in business intake from outside of the US, advertising.com will do $.05/click. I'm not vouching for their quality/conversions, but its cheap enough to give a shot. ($5000 minimum though :rolleyes: )


Pop under/over: Ok we have all seen the Ebay ads for 50,000 visitors for $2! What a deal! I have an idea, you give me $2, and I will write a script to refresh your page 1000 times an hour for 50 hours - watch the orders flood in!
If you want good traffic, you can easily find some nice webmaster-related sites willing to take $2CPM 24 hr. frequency cap. If you take this route, realize that you can't simply have them go to your page. Popunders/ups are not intended for branding-- they are expensive, and they with the right creatives/promotions, can be do quite well.

I understand you are a small hosting company, and do not have the $300,000/month ad budgets like these giants, but realize that simply spending a couple hundred dollars here and there is a complete waste, as there are too many web hosting companies out there to expect impulse buys. I don't own a web hosting company, but if I did, I would target the people that know nothing about web hosting! You can advertise on an entertainment site for $.02/click, or $.08CPM (468x60's), pull the PowWeb marketing strategy. PowWeb also brand there name in the webmaster sites, but they do a lot of advertising for the "Get your Name.com Now!", and they pay pennies for the advertising. In addition, the guys/gals that come from entertainment sites know nothing about hosting, so they aren't going to research, they most-likely aren't going to use the resources they buy, and while I hate to say it, they aren't going to know if you're prices are competitive or insane.

HTH

Zak

We have used hosting directories. Some have worked well, others have not worked as well...

Nothing as big as tophosts.com. We try to stay away from strictly "advertising hosting directories" where they offer reviews, or sites that have a paid top ten lists.

Generally we are paying about 70 cents per click-thru of targeted traffic. Generally we close less than 1% of visitors, but we close this traffic at about 2.3%...

e.g:
For one of our ads, we pay $121/month (all figures in Canadian Currency) for a "Canadian Host Spotlight" advertisement. This add brings us about 175 unique visitors. Generally we make 4 sales at $14.95/month... Our timeline is two months to recoup investment.

Having worked in the Advertising Industry for a few years I can say there are a few different issues being discussed here:

1 - Gaining the impacts (CPM)

Advertising is all about selling your product or service to a buying group who is well matched for your goods and services. Ask yourself who the typical client is in the webhosting market and what they're looking for in a webhost, is it you or is it your competition?

A successful advertising campaign delivers responses, not sales - sales are the job of the webhost and the people who you employ. A good advertising campaign delivers quality leads to your sales people who then have to make the sale.

2 - Getting the sales

This is your job - develop the copy of your ad with someone who understands who you are trying to attract and work out why the hell they should buy from you and not someone else.

As has been mentioned briefly earlier, repartition builds rapport - what does this mean? - It means if you want to target a segment of the market or specific people you better be prepared to hit them 2-3 times in order to gain their business. It is a known fact that when people hear positive things about a business two or three times they start to believe it, they're almost your unpaid sales agent.

In recent years, more businesses are realizing that online advertising is not just mere clickthru ... but rather it is about branding too.

In offline advertising, you don't get clickthrus and stats measurement like the way you get online ... rather it is to brand or announce your offers.

Depending on your marketing objectives, some advertisers prefer to look at collective branding, others want clickthrus.

For an effective campaign, both objectives can be achieved .. ie. a mix of branding and direct clickthrus.

One pressing need is to accurately measure BEYOND clickthrus ... that is to track where sales are from. Some advertisers never know which campaigns are successful because they can't link sales/conversions to traffic origins/sources.

What to do?

Use cookie tracking for all your campaigns. Instead of using http://www.domain.com ... use http://www.domain.com/in.php?cid=12345

Then on the sales thank you page, use a image cookie to track the conversion. This way, you know (not 100%) which places produce better sales!

My $0.02 ;)

We didn't do to well with pay per clicks, our best campaign was with a popular webmaster site we paid $1800 for a month but got a huge return and hopefully some brand name recogntion.

As far as banners exchange, I agree they are how do you say pasee.

Although I heard they help with the masses remembering your business name.

What's up with yahoo you pay them 300 and get maybe a click or two a week. Don't they get 70% of the webs traffic?

-Charles

$1,800 .. that must be a really popular site? :rolleyes:

Spending money on advertising is an investment and so should produce a return, it is up to the advertiser to determine what that return is and build a campaign that gives this. So the campaign needs an objective, an objective is only worthwhile if it is measurable and if you have no way of measuring the impact upon awareness or brand status then it cannot be a wise objective for your company.

However no matter what the advertising objective, building awarenes, brand etc. etc. at the end of the day these are all to one purpose and that is increase sales, market share etc.

The one thing I would suggest to any host before they spend a cent on advertising is get an ad tracking program in place.

This is easy to do with any affiliate software, just set every ad campaign up as an affiliate and use that affiliate link as the link from the banner or search engine, set the affiliate program to track for a year and after that time you will know exactly where your sales came from. It will also enable you to judge whether the ad sellers line of "... it can take 3 months for a customer to decide to buy your services..." measurable.

I agree with everyone's 'theories' that have been posted. Some very valid and good points have been made.

I still think the cheapest untapped market might actually be offline. I have received more business on referrals, handshakes, and just having conversations with people (in person)... and this advertising is free, and I would consider these customers much more loyal... They aren't going to leave my service to save a dollar.

intraweb: although you fight me for no reason in other thread but i have to advice.

my openion, in hosting business, you have to pay first then earn later.

word if mouth is the best way to spread your business, but its very slow way. but in the same time its grow so fast.

for example ... 10 customers will dirve you 10, but when you have 100 customers they will drive 1000 !!

thats why you have to start with large campaign, even if you spend all income on advertising, after month or 2 .. you can stop advertising and you will see the customer base will grow without single $ on advertising.

at least its my experiance.

another point .. you have to check your site very well, check other compatitors sites, refine your design as possible then start advertising. because its really hurt if someone visit your site and left without buying .. this is really the big loosing.

Advertising is a science and an art ... end of the day, you should be able to derive an est. formula - based on past marketing stats - which tells you for eg. every 1,000 clickthrus result in X number of sales.

With that kind of info, you can focus on how much you want to spend (or can afford to spend) and how much sales those dollars will bring you.

HOSTaz: I agree in most typical traditional forms of advertising, and in non-hosting related business. I honestly can't put a formula on accurate conversion ratios for most online advertising for the hosting business.

2mhost: Thanks for your openion - I agree most of us on WHT have paid plenty, THEN learned... Welcome to reality...

I have to agree that online advertising is not what it used to be. Not just for the service industry (hosting, design) but for all industries. I own a retail store w/ an ecommerce website as well and online advertising has grown more and more expensive... and it's been bringing less results.

We have increased our focus on traditional marketing such as direct-mail and have had a remarkable response... We will still be doing online marketing but mainly through our e-newsletter and a few select PPC's.

I ask a question regarding an ad. budget a few days ago, but this thread really took off.

I was contacting various directories for advertising quotes including Cnet one of the biggest sites out there. I talked with the sales rep for around 45 minutes to discover that unless you are spending 100k amonth just with them your not going to be seen.

You be listed in their directory you must purchase a $250 listing but you are required to spend $5000 in media advertising with them banner ads and such. The problem that i see with that is your going to be listed on the bottom of the first internet services directory page if that because their bigger clients like Dell Host and a few others get listed first.

Finally your listing is inserted on the page randomlly. Meaning one hour you may be at the top and the next you may be listed on page 5! What good is that?

I think that for my advertising budget for 2003 I may do some web hosting directories but mainly targeted developer resource sites.

In addition, I will probably be running some offline advertising such as local newspapers and small business magazines many of which do not feature any hosting companies!

My 2 cents: Stick with what you know... I built this company as a web development firm and are recently expanding to hosting so we can generate more reoccurring rev. Therefore most of my advertising dollars for the up coming year will be spent on developer portals and sites. Some of which I am working with to start a bi-weekly column on. Give back resources to the community and they will give back to you!

Just my thoughts...

Whoops what about affiliate programs?
CJ - Is one of the biggest but is it worth the investment?
ShareASale.com - Seems good small investment high quality service

Another affiliate programs work? I personally would run to programs.
1) In-House for tracking advertising
2) Network for attracting new affiliates.

I would probably move my biggest affiliates over to the inhouse program to save on network commissions.

What do you guys think?

affiliate programs are fine, but you still need traffic...

I would rather do affiliate programs in-house then outsource.

Yes, I agree about inhouse but what better way to generate traffic then by adding it to a network.

Plus you can always guantee your clients by using payouts only after the customer has been subscribed for 90 days.

So $10/mo * 3 mos = $90

Kick out $15 on commission which equallys 150% commission and youll start getting some great affiliates.... Or so I think :eek:

The problem with in-house programs is that there is really no way of knowing when it is paying or not paying - the advertiser may get free hits for quite awhile before the webmaster determines the program has stopped.

In 5 years the only in house program that I was ever paid more than 1 time was Amazon.

At least with an outsource program like CJ the website advertising YOUR site knows if you are still paying or to pull the ads. It is the fairest for the advertisor and the webmaster.

With one exception, I never use in-house affiliates on my websites.

The advantage to using affiliate networks like CJ is that you've instant access to a VERY LARGE network of affiliates - some whom have alot of traffic that they can send to you - if you pay well.

Such immense exposure can take months, if not years, to build on your own. So it's pros and cons ... Pros: you grow very fast Cons: you must have deep pockets!