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  1. #1
    Join Date
    Nov 2002
    Location
    Delray Beach, FL
    Posts
    254

    Question 2003 - Advertising Budget

    We are a small web development and hosting company in New Jersey and we will soon be expanding to a new location with a larger infrastructure, more support reps, and a bigger advertising budget.

    We are putting together our marketing plan for the next 6-8 months and I am trying to find out what works and what doesn't.

    Contacted a varity of different advertising sources: ASPin.com, Cnet, Udzone.com, Yellow Pages, a few magazines, and a few others.

    What seems to work the best? Cnet wants a minimum of $5k/mo, is it worth it?

    What about success rates with local newspapers and local advertising?

    I would like to hear what you guys think. Have any tips or suggestions for advertising?

    Thanks all in advanced,
    Gregory A. Van Horn, President
    Transcend Media Group
    [email protected]

  2. #2
    Hi Greg,

    I think your best bet would be to start your own affiliate program. Giving 'affiliates' who send you sales, a pre determined percentage for each sale you receive. Try shareasale.com, as well as cj.com do something like this. In addition, you may buy some showcases throughout some of the larger, more reputable hosting directories.

    Another cost effective solution would be to advertise throughout some PPC (pay-per-click) search engines such as Overture.com and Findwhat.com. Or more hosting niche PPCSE's such as FindYourHosting.com, HostPPC.com, and PPCforHosts.com.

    Best of luck.
    iHosts.com >> Web hosting forum
    I own a webhosting community hosted at Dominet.net
    Thank you DomiNET

  3. #3
    Join Date
    Nov 2002
    Location
    Delray Beach, FL
    Posts
    254
    Styles,

    Nice name by the way! Thanks for the update was definettly planning on setting up an affiliate program. Do you think if I were to go with CJ it would make sense to do ShareASale as well?

    Fimilar with Overture, Google, etc who all offer PPC problem is that the rates have gotten so high. I think I am also going to target some of the Niche ASP programming sites.

    Does anyone know anything on whether Cnet works if you are a smaller company?

    I mean for 5K you get listed in their directory and you get around 500k of impressions from media.


    Also, I am guessing you run the web hosting directory and a hosting company how well does that work?

    Finally, I was considering seeing if I could sponsor some bigger sites costs bandwidth and storage but if I get click throughs and referrals then it was all worth it.

    Thanks again for your thoughts anyone else like to share their ideas?
    Gregory A, Van Horn
    President/Senior Web Developer
    Transcend Media Interactive Development & Marketing Group

  4. #4
    Join Date
    Dec 2001
    Location
    New Orleans, LA
    Posts
    581
    $5K/month is a hefty budget.

    The main question that will determine if that spend makes sense is to understand

    - How well your site converts prospects into sales
    - How long you retain customers on average
    - Average unit selling price

    Only with those measures can you determine if high cost per prospect traffic makes sense (overture / adWords can be very effective even at high cost/prospect if you have a decent ability to convert prospects into sales & then the new customers become very loyal)

    Shareasale is small and cheap to join - doesn't hurt to join, but doubt it will do anything much. It's too insignificant.

    CJ is more expensive - $1200 sign on fee, min $250/month fee's, $3000 initial deposit. If you have mediocre payouts - don't expect too much - with larger payouts (using your average cost to aquire a customer via advertising as a guideline) - it may well be attractive.

    Quality ad based directories are worth a look - sites like webhostdir, hostsearch etc - you'll pay more but you know the traffic is not junk. Check to see which directories get search engine traffic as a guide.
    Andrew McMaster
    http://www.FindMyHosting.com
    Compare Prices, Consumer Reviews, Help, Guides and More.

  5. #5
    Join Date
    Feb 2002
    Location
    Australia
    Posts
    24,009
    Advertising? Who pays for advertising?

    Seriously, we don't pay for advertising. Did some Overture when we were starting out. It's nice not to worry about customer acquisition costs. New accounts keep rolling in each day due to word of mouth etc....

    Nothing like high customer acquisition costs to kill your cashflow....
    AussieHost.com Aussie Bob, host since 2001
    Host Multiple Domains on Fast Australian Servers!!

  6. #6
    Join Date
    Jul 2002
    Location
    Roseville, CA
    Posts
    214
    We ran our ad at http://www.tomshardware.com That seemed to work very well..

  7. #7
    Join Date
    Dec 2001
    Location
    New Orleans, LA
    Posts
    581
    Aussie Bob is in the enviable position where the cost to aquire a prospect is very low due to extensive word of mouth referrals.

    This is a key part of the equation - if your cost to aquire a customer is $100 but they refer 9 other customers then your cost dropped to $10 / customer - and you can bet if they refer 9 others that they are staying as a loyal customer for years - which increases the average customer retention time = a wonderful situation.

    Aussie Bob pushes the point a lot (he is quite proud of it ) - he is indirectly passing on advice that is worth gold. Customer loyalty is an activity that drives growth.

    Quality traffic + A web site that converts + Outstanding service

    You need all 3 to drive growth
    Andrew McMaster
    http://www.FindMyHosting.com
    Compare Prices, Consumer Reviews, Help, Guides and More.

  8. #8
    Join Date
    Feb 2002
    Location
    Australia
    Posts
    24,009
    Don't get me wrong, I'm not knocking paying for advertising. It can be tough in the hosting scene as there are so many choices out there these days for the public. I am extremely thankful that our client base grows each day due to word of mouth and our participation in various forums.

    I have friends who are in other sections of the net and their biggest problem is acquiring customers. It just costs too much these days and this has a huge impact on their cashflow and ongoing viability as a business. It's nice not to have to worry about that issue. Plenty of other things to worry about though...
    AussieHost.com Aussie Bob, host since 2001
    Host Multiple Domains on Fast Australian Servers!!

  9. #9
    Join Date
    Dec 2001
    Location
    New Orleans, LA
    Posts
    581
    Your client base grows each day at low cost for one reason - You must certainly run a good business and delight your customers. None of that happens by accident - it's like that because you undoubtedly have spent 1000's of hours creating it and have reached enough mass of customers that it becomes self sustaining.

    I know you are not knocking advertising. Marketing via advertising is where a new host starts - but the goal in the end is to be where you are now
    Andrew McMaster
    http://www.FindMyHosting.com
    Compare Prices, Consumer Reviews, Help, Guides and More.

  10. #10
    Join Date
    Nov 2002
    Location
    Delray Beach, FL
    Posts
    254
    Thanks guys I complete believe in the $0 cost per aquisition advertising method. That is what I built my web development company on. We have been succesfully being operating for two years with no advertising budget.

    The reason I am now considering advertising is I would like to expand our hosting business. I have a good foothold with some content sites that we sponsor. As soon as your new network is inplace December/January we will begin using them for referrals.

    I was considering Cnet until I found out they wanted 5K ,all I wanted was a listing in the directory not too considerned with the banner advertising they required.

    I am considering in advertising in some Small Business Magazines which are completely unused by the web hosting business and small programming web sites.

    Hopefully the affiliate program will work well currently we are breaking even with our network bills so any new revenue would be mostly profit until we have to invest in some new servers of course.

    Hopefully, my advertising expenses will peak in March, and then for then on it will be referrals and affiliate program. Will try ShareASale.com first don't think CJ is worth it.

    As a small business owner I completely understand how word of mouth effects your business so I treat clients the best support I can give and hopefully they will give me the best support then can with referrals...

    Thanks all
    Gregory A, Van Horn
    President/Senior Web Developer
    Transcend Media Interactive Development & Marketing Group

  11. #11
    The bigger brands usually have big $ requirements ... go for the other established web dev sites too ... some of them have good value for $ deals. Work out some deals with them.

    As for CJ, it is a very fast way to access a huge (really really big) pool of affiliates quickly - without having to waste time building one up from scratch ... I recommend it if you offer good payout rates and you're willing to go with their fees.
    Web Hosting Stuff - Over 10,000+ Hosting Companies Listed
    http://www.webhostingstuff.com

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