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Good evening and welcome to today's meeting of the Commonwealth Club of California. My name is Tom Waller, I am chair of the club's business and leadership forum and your host for today. Today's program is entitled "The Art of Internet Marketing". And we welcome all our members who are here and those of you who are thinking about joining we invite you to join us on the internet at commonwealthclub.org for our schedule of the many fine programs here. And now it's my pleasure to introduce our distinguished speaker. Pamela Swingley founded Savvy Internet Marketing to revive businesses with internet marketing, consulting services that deliver the best possible return on their marketing investments. Before starting Savvy she acquired more than 20 years of marketing experience directing marketing strategy and communications for technology companies here in the San Francisco Bay Area. And by the way she is native of the San Francisco area. Although she was telling me that she has went to high school in Colorado and she is actually in terms of making use of the internet in charge of the getting ready for the upcoming reunion all through the internet and remote base. So she she lives what she talks about in terms of the use of internet. And today Pam consults with the selected group of companies where she puts her extensive business education and experience to use identifying their best internet strategy. Please join me in welcoming Pamela Swingley. Let's see if I can get out here, can you hear me okay? Thank you all for coming tonight and thank you for that great introduction. So tonight it's the Art of Internet Marketing. And to get started we are going to have a little bit of background here. And first off I would like to get some background on you. So take a look at these. You can fit in multiple categories here. But are you an A; are you a personal web user tonight just trying to understand advertising and navigating around the web? Got a couple of those people, just want to know more about what's going on. So we will give you an overview of that. Are you an investor here wondering "why Google stock prices are so high?" Nobody thinks about that. How about a small business owner who wants to use or improve online marketing? Most of you guys look like small businesses here trying to figure out "how you can use the web?" good. How about a marketing or a business consultant that wants to provide value to their clients. Yeah. And anybody here who work in PR advertising or marketing for a large corporation just want to know what's going on? That's some of you. And who just wanted to get out of the house tonight? I heard that there is a few of you guys that show up here. So here are some of the things that we are going to learn. Where searchers go online and how you can reach them? We will talk about tips for improving your online marketing; we will talk about four major internet marketing trends that I want to communicate to you tonight. We will talk about why those Bean Counters are now in the Marketing Department? Why we have to as marketers start worrying about these statistics. We will talk about Google, it comes up a lot, we will talk about some resources, I would give you a page of resources at the end that you can go through so you don't have to take notes throughout the presentation and we will have 15 minutes or so at the end where you can ask me your questions and I will hang around afterwards if you want to ask me your questions personally about online marketing. Does it sound good to you? You guys are okay with this? Okay. First of all, here is the background. Google is simply amazing. And I had to put this up here; the stock price is over $500, I didn't buy it when it came out on the market. I thought it was too high and it continues to go up. And you will see it as we talk through all these things are going on online. Google's name comes up over and over again. So I thought it was interesting just to talk about the stock valuation here. And one of the reasons Google stock price is so high, is they have got a tremendous percentage of the market share for web searches. 48 percent of the searches that happen online are done through Google. How many of you use Google when you do a search? Anybody who use yahoo at all? There is a yahoo person. And what about MSN? Nobody. So when we talk tonight about Google, we are going to talk a lot about text ads. But I want to point out that Google is not just the text ads and where their money comes from? But they have got image ads out there and the banner advertising that you see. They have got videos ads that you can place. They have got local ads, when you do a search for a local address; Google is selling ad space there. They have got mobile ads for cell phones, and with the iPhone they are going to be even more looking at that area because they are tightly related with Apple. They have got going into radio ads, so they will help you produce the radio ad and then bid for space on the radio. And they are testing out print ads. So Google is not only thinking about online, but they are thinking about offline marketing as well too. When you talk about Internet Marketing, these are the quarterly internet ad revenues. Starting in 1997 we see we have that big dot com increase and then the bust and now it's continuing to grow. Now online marketing expenditures are nothing like TV or print. Its still way outspend on those avenues. But the rate of growth in Internet Marketing is faster than rate of growth was in television advertising at the same period of time. So there is a lot of growth ahead, so we are really at the early part of this. So now we are going to talk about some of the trends and we will really take a look at some websites and what's going on out there. So first off, Americans perform more than 243 million internet searches each day. And we are all out there searching here. We are searching for addresses to find things, we are searching for new shoes, we are searching for information to help us get spots out a shirt. We are searching for to buy chairs or video equipment or new clocks, I mean everything you could think of we are searching for the weather in a city we are going to visit. And every search that is made out there; a person has a problem that they are looking for a solution to. And as a business that's an opportunity for you to get your message in front of that searcher and that's really what this online marketing is all about. Every query on the internet someone is looking for solution. Now how do you get your ad in front of that person when they are thinking right then that they have got a problem? Well this is Mary, and Mary needs to buy a new car. She has got an SUV on her brain, she has got two kids. She has got dog. She holds them around. She is also a freelance journalist. So she is pretty comfortable searching around the web. And we are going to take a tour with Mary as she goes through to looking to buy her SUV. And I think that will help explain to you and open up to the idea that there is lots of places we go online. And each one of those is an advertising opportunity. So first of all, like most of this, Mary goes to Google. And in this case she typed in up the search bar, can you see what it says; "buy SUV". That's the key word, I have a pointer here, see right there, can you see that dot. "Buy SUV", that's the key word that she typed into Google because she wants to start her search, this is where she begins. Now Google looks at that key word phrase and they say, oh these are the results we are going to serve up, both in terms of the paid advertising which is on the top and on the right and the organic results which are here on the center of the page. Every keyword search is going to return different results. In fact Google is getting more personalized and regionalized in depending upon where you are in the country or your previous search activity, it can serve out even different results. So you never really see the same thing. Nor do you see the same ads in the same position. So we are going to spend some time talking about the advertising here tonight at the top and on the right. And these are Google Adwords. In each of these ads display, based on what is typed up there "buy SUV". So these advertisers had said "anytime someone types buy SUV into Google show my ad". And the ads display on a bid basis. And you only pay when somebody clicks on your ad. So for your ad showing up you don't have to pay anything. But when somebody says "Oh I like your ad here at the top" and they click on that, the advertiser then pays, for that for that click through on the ad. So there is a science behind how you write your ads, how much you are willing to bid for that and what position you want. And Google looks at two factors when you place your ads on their site. One; how much are you willing to pay. But secondly how relevant is your ad to the searcher. And they judge the relevance based on just somebody click on the ad and if they have clicked on it how long did they stay on the site that they went to. They look at a number of factors because they want to serve out the ads that are most relevant to you as a searcher. Not just the ads but these organic results as well. If they don't do a good job of serving out relevant information you are not going to search on Google anymore. You are going to go to yahoo because you say this is junk. I don't want this, so Google is not good. So they continually work to refine what they display here and get all those junky sites out of there and make sure it's very relevant for you. The top ad here actually "Buying an auto", you see the title, and then the URL www.aaa-texas. This is an ad for AAA Insurance in Texas. This is not very relevant and this was about eight months ago that I captured the screen. And actually it's a waste of AAA's advertising dollars because I did the search in the Bay Area. I don't want to buy insurance in Texas. So somebody should get in there and optimize their campaign and set it up regionally, because your ads of these small business owners can be set up to focus on the region right around your business, so it could be all of California or it could be 20 miles around your pizza parlor or your consulting business. So when somebody searches within your area your ad will display but not if they searched outside of the area. So it can very, very targeted on how these ads display. And when they display and you have complete control over the copy that you write, the headline, two lines of text and then the destination URL which is in green. Google allows you to set up a number of ads and they actually optimize them, they will serve them up, they will see which ad performs the best and they will run that ad more frequently and you can continually refine your campaign. So Google is the first place a searcher likely starts, but it's not the only place they go. But I did want to introduce you to the Google advertising and Adwords on Google. Was that fairly clear? All right, off we go. So another place Mary goes, when she is making a purchase decision is to think about what do experts say? And here as she ended up on the consumer report site. And they don't accept any advertising. So you can't place your ads on this site. But one of the things you can do, see the circle in red here on the page which is now consumer opinions. Consumers can write what they think about the vehicles here. And Amazon was one of the leaders in these customer generated reviews. And I don't know if you buy books, but I always go down and I take a look at what do other people think about this book. Well now consumer reviews are popular across all industries. And people may be talking about your company and you need to be aware of where they are going in your industry. Is there an expert side or a forum, and you need to monitor what people are writing and you should actively start a campaign to have your favored customers write favorable reviews. And we are going to talk about that more as we go through here. But all of these small business owners should really be thinking about building up your reviews and having people write good reviews. And one of the areas we don't talk about that today but is the Yelp and Yelp is very popular Y-E-L-P in the bay area especially for services, restaurants, entertainment. It's probably you know 30 25 to 40 year olds are using it quite a bit. Here she goes to a forum, and she wants to see "what do owners feel?" And here is a vehicle owner, you can write your own opinion, highly relevant to what she is searching for in making her decision. Now you can advertise here on a number of forums that will sell you ad space. Social communities, this is MySpace, Mary may go there to see what do her friends think about buying an SUV. There is a lot of talking going on, on my space, clearly popular among the young people with more and more people up to their early 40s are on my space. They are sponsored links. These results over on the left, the sponsored links; those are served out by yahoo. Those are not Google ads, they are actually yahoo ads. You need to think about what's going on there and that's an avenue for advertising. There is also community news sites, dig. Getting an article this is called Link Bait, and what you do as a business owner is you write this very appealing article. Top 10 ways to protect your dog from the summer heat, or sexiest shoes of all time, something people find appealing. And that they will then vote on your article, they vote it up; higher in the rankings so you get a first page and then when someone clicks through on the article they go to your website where the article is. And it does two things for you. It drives traffic to your websites and it gets you a valuable link from Google. They love those links from these expert sites, so now dig and users being able to rate news and finding news that they think is valuable instead of a publisher of a magazine doing it, people are all over the web digging articles, voting them up. It's called link bait. YouTube YouTube is another really popular way to start marketing your business. Google acquired YouTube within the last year. Google really likes that video and shows it in their search results. So you think of YouTube and you think of a bunch of goofy college kids videotaping themselves, getting drunk or dancing in the hallways. But the fact is that video content is really valuable and if you are kind of a chiropractor; you could do series on five ways to protect your back from injury, or I saw videos by a woman that specialized in baby massage, or someone that gives pitching lessons to students; they could put that out there. I could do with a series on the Internet Marketing, have it videotaped, upload it; when you did a search for it then, I would show up, I would get trafficked to my site. So if you have any inclination or you can think of creative ways that you could do small short videotapes and put on them YouTube to market your business it really establishes you as an expert. Lots of people like to search for that. And a dog training for instance, I think that would be fabulous to have a series of videos on training your dog, a lot of people try search for you know train your dog. And will be interested in quick little snippets that you can grow onto your business or sell your book if it was related to dog training. So if you think there is a video extension to a book or to consulting services that you offer think about how that could drive sales of your business. There is comparison shopping sites. I put this in here because almost every industry has ability to compare and compare different options and here Mary is thinking; in her mind, "Where can I get the best deal?" And you have a number of options when you place advertising, but one of the things that you need to consider is where if you have two equivalent sites, you think about may be where is the buyer in the buying cycle; because when Mary first typed in "Buy SUV", she was just doing some general web research. And when she gets to the point of thinking, "Where can I get the best deal?" She is much closer to making a decision. May be that's a better place for you to run your ad. So you just need to think through and if the costs were equivalent, I think I would want to be here, Lexus has locked up these spaces. Clearly they think that's a great place for them to be, because people are ready to compare and getting close to making a decision. Local search; for those of you with local businesses you get into Google, there is no cost to have your business show up here in these organic results. The light blue at the top the Mercedes Benz dealer; that is paid advertising. These others are not. You just need to get your business listed there with Google, go into Google local search. It tells you how to do it. They send your post card to verify it. And you get a dot on the map. But when you look at these results, this is what's interesting. They put San Francisco Honda at the top and they get three and half stars. Now why do they have three and half stars? You look down, it's because they have 10 reviews. They have got very positive reviews. So when Google says, "How am I going to show local listings to the searcher?" One of the ways they must have evaluated this is saying they had got positive reviews, they have got a lot of reviews, we are going to put them on top. So imagine if your restaurant or your business had a number of positive reviews, you could show up for free on these local search results at the top. And there is likely a number of pages that follow this. But right away they have got stars and they have got 10 great reviews and what does Google show? They show that review at the top. And how bad would that be if it was a negative review? So you want to take a look whether people writing in there, writing in Google about your business. And what's going on with that, because they can harm you or could really benefit you. So the one at the top is 10 reviews, the next one down has five reviews, SSC Ford has one review, BMW San Francisco has three reviews. So it looks like that's how they have rated those. So once again what users are saying about your company is critically important, whether they are saying it on Yelp or user forums or here in Google and Google is using that rank and rate your business. So one place Mary did not go was to the corporate website. She didn't start her search there and you probably don't either. You start your search and you are thinking of looking at solutions, comparing prices, where can I test drive one, where can I buy one. This is GM's corporate website and it has really no information of value to her, no VIN check, no price comparison, no information to talk about, how do you buy a vehicle, its just one big ad pitch. So even though you have a website it may not be and likely it is not the first place people are going to find you. So you have to think about if it had a lot of content to help you buy a vehicle, you might go there. But Mary went a lot of other places first. So that was our first trend, searchers are online; they are all over the place. You need to think about where they are going and how you can get in front of them for advertising. The next thing and this applies to the corporations here in the room, these people that work for larger companies is really what's going on over controlling your message out there. User reviews are part of the loss of message, you need to monitor that and see what people are talking about you. But you can also have blogs and you can have a corporate blog or your business blog or you control the message and you allow lots of comments to be written. And this is GMs FastLane blog, very popular, a leader in the automotive industry for blogging, lots of comments are written here. And it establishes a good relationship with the company. So here you know Mary took a search of blogs and she started reading this. On the other hand you could have a whole website devoted to how bad your company is. And those of you that work for larger corporations go back and do a search for your company name and the word "sucks" and see if there is a site or if there are comments out there. And most large corporations have some of that going on. And this is interesting, this GM Sucks site because I believe it was set up by a lobbyist firm with alternative fuels and they are just using this as bait to get people to come and make their pitch, because clearly it's a very attractive site, it's professionally done. You can tell an ad agency is behind this. And I thought this is interesting, it is registered Washington, DC. So it's just a technique for them. But it's still not something you necessarily want out there. And can you stop it, probably not that easily but you should be aware of it and at least know. So you are not cut off guard when somebody mentions it. So the next trend we want to talk about tonight is performance based marketing. And I call this "Show me the money marketing", there is three methods that are really very popular right now. The first is a pay per click and we talked about Google. You only pay when some one clicks on your ad, so that's Google Adwords, it could be Yahoo has a program and so does MSN, Microsoft. So we talk about your ad is only displayed, you only against the key words that people type in, you only pay when some one clicks on your ad and you have Google, Yahoo or MSN. So that's the first one. The second I want to talk about is Affiliate marketing. It gets a little the concept gets a little confusing. So let me see if I can clarify this for you. First off a lot of large companies' use affiliate marketing. So talking about the Walmarts' and the Targets; and small retailers use this, business to business companies, service companies like H&R Block. So what these companies do is they say well; covering the internet is really a challenge. And getting front of people that do all these searches is tough. And we don't want to build humungous marketing organizations to keep up-to-date with all this. So we will work with online marketers, like myself and other companies, and we will pay them a percentage of every thing that is sold. And those are called affiliate marketers. So they establish a relationship with Walmart and there is companies' that facilitate that relationship and facilitate the payments and the approval process. And then affiliate marketers go out and they assume all the responsibility for marketing that product and they take all the risks of setting up websites, setting up a blog running, Google ads, sending emails to their list of customers; they are promoting these companies products in exchange for a piece of the revenue which varies somewhere between two to 15 percent depending upon the product and depending upon how much volume you do. It's a challenge for both sides. One, the online marketer, it's a challenge for them to get out there and assume the risk. And two for the company; it's not a slam dunk to manage these programs. It requires that you put somebody in place that gives these people the creative, make someone who market your product as opposed to somebody else. So you want to work with someone that gives you great banners, its response that gives you special promotions for your customers. So even though you think, oh this sounds like a no-brainer, I will just call up these people and have them start marketing my product. There is a cost associated with it. It requires a management. The third method that's going on out online; I am sure there is others. But that I want to point out to you tonight is simply the point of just buying leads, started primarily in the mortgage industry, real estate industry does it, the education industry does it a lot. These companies then next QuinStreet is a large one, Gate-58 I actually consulted with this company and they sell B2B software leads. Assumes the risk, they run the programs, they generate the leads, they sell the leads back to companies. The leads they simply buy leads based on the region they came from and the criteria. So you just sort with the leads and generally these leads are nonexclusive. So the lead is probably sold to a couple of companies. So when you are online and you fill out of a form requesting information or you fill out something that says my home valuation, or it used to be you could get these little special gifts or going to a contest for an iPod, you are giving your information. They are capturing that, there is value associated and they sell that lead. It makes a lot of sense to certain standpoint because for the companies you don't have to build big marketing department, you could exactly qualify what type of leads you want. It reduces a lot of lead waste and your lead cost is reduced significantly. So in the space that I am familiar with it, B2B software, generating your own lead to online programs could be somewhere between $75 to $120 per lead. If you buy it, it could be $30 per lead. But the leads go into a couple of companies. However when you buy business software you always talk to a couple of companies anyhow. So your marketing costs are reduced significantly by moving some of your budgets off to this pay per lead idea. The next trend here is Bean Counters in the marketing department. For years the only math I actually had to ever do with marketing was my budget. And it was set once a year and then every quarter you go back and you revisit your budget and they take money away from you and you would scream bloody murder and you reallocate it and that was all I ever had to deal with. But that has really changed. And that has changed primarily because of Google, because they furnish all kinds of marketing results. And this as confusing as it may look to you is the advertisers look. This is their interface to setup a Google Adwords campaign. So this is what they deal within. This is the statistics they get to look at to see how well their campaign is working. So this is the other side. When you are out there searching you are seeing the text ads. Behind that there is a marketer sitting there who says, "What keywords do I want to have my ads appear against?" So in this case its contact manager, web contact management, manage accounts, all these keywords when they are typed in, this advertiser's ad appears. And then Google tells you a lot of information, so you can continually refine your campaigns. They tell you in the first column that I have indicated in red, they will tell you how many impressions, how often did your ad display for searchers. Then they tell you how many people clicked on it or what was the click-through rate. You want a strong click-through rate, if you write a good ad lots of people would click on that ad. You have a nice offer. So getting a higher click-through rate is a nice thing to aim for. Bu even better the last column is conversion rate. Google will tell you how many people bought your product, or how many people downloaded your offer. So you know how many times did my ad show up, how frequently was my ad clicked on. But more importantly how often did it convert into what I wanted to do and if it converted what was my cost per conversion. So what was my cost per sale or per in the business software they it's just they request a free trial or they download the download or something else, so it doesn't actually have to be a transaction that has money associated with it. And here are the conversion cost per conversion over in the lot, let's see. It's running about from $16 to a $132 per lead. So you clearly want to try to get your cost per conversion down, you figure out is it my landing page I should optimize, was my ad too general? People clicked on the ad and expected something else when they got there and they didn't want to buy anything. So just because you write an ad that gets a lot of clicks doesn't mean that's the best thing. What you really want to look it at what does that cost me per sale. Google tells you all this. So you really as now may marketers focus on their ROI. And Google also has a free program, Google Analytics, which tells you what goes on in your website. How many people come to your site, how long are you on the site, where did they come from, how did they get there, what keywords do they type in to get there, did they come from a referring site, you can sit here and drill down and down and down. You can compare this week to last week. You can see what content they like to read, where they left your site, where they came into your site, you could spent all day looking at the stuff and in fact because now there is a lot of emphasis on marketing analytics, you have a lot of new jobs that spent all day looking at Google Analytics and Adwords campaigns and analyzing all this. So from a marketing standpoint there is a lot new matrix we are talking about. We are talking about CPA, Cost Per customer Acquisition, we talk about CPC, Cost Per Click, we talked about CPO, Cost Per Opportunity or CLV, Customer Lifetime Value, the ROIs; so these are all things that marketers are now having to get comfortable with. They are adding marketing analytical type people into the marketing department. You can see some of these new jobs that are starting up, Internet Marketing Analyst, Online Marketing Analyst, Business Analyst Marketing. These people are now in the marketing department. And there is new analytics tools, a whole industry is around that; improving your marketing by using these tools. Tough to compete because Google Analytics is free, they bought a software company; they give it away to you for free because they think the more you understand how valuable they are to your business the more you will advertise on them. But these other companies are still around and they offer more complete products, the pie goes beyond that and maybe more services. So what does this all mean? Well there are some new opportunities and there are some new challenges. First off your marketing can be highly targeted. You can reach these qualified buyers when they have got a problem, when they are thinking about buying a new SUV. When that problem is in there you get in front of them. You don't have to get out before they got the problems you are very targeted. And you get targeted by demographics, by location, by interest, by desire, where they are in the buying cycle. You can absolutely improve your marketing ROI, you can measure it, by measuring it to improve it and if you do pay for performance it eliminates a lot of waste. Small companies can compete with the largest. Your ad is not going to display every time someone does a search. But the fact that is you will get a percentage of those. And in fact its getting very expensive to advertise on Google as the volume goes up. So lots of companies aren't there for every search. But they are there for enough of them that builds their business and in affordable rate. It's measurable and there is a lot of market feedbacks. So now when you are in out there and you are spending time looking at comments or looking at comments on your blog or you are opening up the communication; although you have lost some control over your message you are gaining a relationship with people out in the market that can help you build better products and help you let you know earlier when there is a problem. And you can respond to that honestly and openly and prevent a huge disaster if it is done right. Of course there is the problem about competitors knowing what's going on too. So there are some challenges. First off, it's not easy to do this. There is multiple advertising avenues and there is methods and it can be very complex to manage. Unfortunately it doesn't replace your offline marketing. So it's in addition to you can put some dollars over to online. But it doesn't do away with it entirely except for a very few companies that are purely online businesses. It's hard to keep up with the changes because Google innovates at an incredible rate, absolutely unbelievable what they keep coming out with. There is a shortage of people that do this well. I think it's you almost have to it's a different way of thinking sometimes when you think about the online marketing. So there is lots of people going into it. Google sucks up a lot of them; a lot of these start up companies do. But there are some others it is a challenge though. Measuring ROI and determining what that ROI is for your business is also a challenge. The tools the tools that measure this and to do this, they are really in their infancy. An idea that corporate transparency you have got problems with negative PR, comparators gathering intelligence, so there is lots of concerns of cooperation, now they are talking about what does this mean to my organization. So I don't want to leave you without Mary just hanging out there. So where did Mary buy her car? She went to eBay which is another avenue were you can advertise your products. And it's a match made in heaven. She loves her new SUV. So I covered a lot tonight; I know we went really fast. But I promised you at least 15 minutes at Q & A. So we are going to have that. This is my del.icio.us page, del.icio.us is public bookmarks. And if you write down this URL up here at the top and unfortunately I think you got to do the whole things, http://del.icio.us/savvy_resources. I will give you my website too when there is a link to that. But I want to talk to you a little bit about this, so you understand when you get here what's going on. If you look over on the left, this is kind of like the table of contents and about internet marketing I have got 23 blogs there that I have highlighted. So you click on that and you will get a list of the blogs that I think you should be reading and you might find interesting. And you could so check those out. If you got to books, there is a page of books that I think are very relevant. If you are building a website I have talked about analytics. There is analytics companies in there, there is things around content, design, links to a lot of design sites, designing samples, there is a link to Web 2.O, designs if you are setting up a new company, you want to look modern, there is a page of examples there. So it's really as I run across things that I think are relevant and I want to remind people of and I want to remind myself of, I bookmark them in there out here public. There is a lot about building a blog, the blog platforms, local search. So if you have a local business you probably want to take a look at that. I bookmark articles and resources for that. Marketing your website and then on down there is more. There is Google and all kinds of things. So they are categorized and in each of them there will be a place where you can link and there will be my comments about it. You know what it is and so here I pulled up a lot of the social news. It looks like I was book marking those of Dig; Netscape is now a social news network. They have re done themselves and it's a real general place and it's gaining a lot of web traffic. So take a look at this and if you want to contact me; my website is savvyinternetmarketing.com or you can email me Pamela@saavyinternetmarketing or you could call me. And that is the art of internet marketing.