Marketing is Measured by ROI, Not Clicks
By Payam Zamani, RISMedia
RISMEDIA, May 24 – Advertising by definition is “the action of calling something to the attention of the public, especially by paid announcements.” It’s that last little part that has for some time created much anxiety for those doing the paying for said “announcements.”
Rightfully so, any business or business person who spends money on advertising wants to have some reasonable assurance of a return on investment (ROI). The famous quote from one of the country’s earliest department store founders, John Wanamaker, has been used to express this many times over the years, “Half my advertising is wasted; I just don’t know what half.”
It may have been of some comfort to Mr. Wanamaker to know that it would take almost 100 years and the development of something called the Internet in order for advertisers to get a pretty good idea of exactly what half did what.
Historically, the cost of any form of paid advertising, including those seen online, has been based on the number of people potentially exposed to the advertiser’s message. Whether you are reaching your target consumer through television, radio, newspaper, or the Internet, in traditional advertising, you pay for potential.
The odds of your ad being seen on the front page of the New York Times or Yahoo!, or during the first intermission of the Super Bowl are much better than that lawn sign you recently planted. But of course the cost for that exposure is a little too expensive for most Fortune 1000 companies, much less an agent looking to build their business.
Alternative advertising channels can reduce this cost, along with the amount of exposure your ad gets. Plus, there is no guarantee your ad will be seen or heard by anyone who is actually interested.
Internet marketing is changing the nature of marketing so quickly that the traditional marketing world is still trying to catch up. Suddenly “performance-based advertising” is threatening to make all channels that can’t guarantee such performance secondary to those that can.
Very recently, Google was able to launch a multi-billion dollar IPO with 98% of its revenue coming from “paid search” or “cost per click” advertising. This type of advertising essentially lets advertisers gain exposure in a Web site and pay only when people click on their ads. Google and rival Overture let people bid for the placement of paid ad links that appear when certain keyword searches are conducted.
But you still need to build an effective Internet site to convert people who click on your ad to customers. Plus, you still don’t know if the click performance you’re paying for is even a person clicking on your ad. Enter, “Click Fraud.” There is growing evidence that click fraud is a widespread practice, and this begs the question as to whether we pay for new customers or simply clicks.
These are some of the many reasons why online lead generation services are becoming increasingly popular with real estate agents who want and need to spend their marketing dollars on an advertising source they know will produce consistent results in a true pay-for-performance business relationship. As companies, like Reply!, continue to develop ever more effective means of producing qualified leads through advanced processing techniques, agents will quickly migrate from vague hope and wish advertising to laser focused pay-for-performance marketing.
Points of Interest:
- BuyerLink – Target Traffic to Your Website
- Z-Mailer Newsletter Tool
- June 2005 Z-News newsletter
- View Past Newsletters
