Many business owners first engage in internet marketing because they feel it is something they need to do to keep up with the times. Since the average American spends 23 hours per week engaging in some form of online communication, these business owners have a point. However, focusing on the tremendous audience created by the amount of people who are online or use social media prevents business owners from seeing some of the other benefits that internet marketing provides for a company. This blog post will show some of the ways that effective internet marketing can increase the profit margin for a business.
One of the main benefits of internet marketing is that there are lower implementation costs than when compared to traditional marketing channels. In the past, marketers had to design, print, and distribute their content. Now, once the content is produced, there is no need to pay for printing and the distribution cost is significantly cheaper with internet marketing sources. The price to run an ad on YouTube is much cheaper than equivalent exposure on a local television network. Similarly, free listings on Google Local take the place of expensive ads in local telephone directories. For just about every traditional outbound marketing tactic, there is a cheaper way to accomplish the same thing using the internet.
Internet marketing can be used for outbound marketing, but for businesses that use inbound marketing techniques like content marketing, the financial benefit is even greater. The difference between marketing to customers through direct mail or through a website’s blog can be substantial. According to Hightable, the average cost to generate a lead through inbound marketing ($143) is about half the average for outbound marketing ($373). And Hubspot noted that organic search leads have a 14.6 percent close rate, while outbound marketing leads have a 1.7 percent close rate.
Content marketing on the internet may even be a more effective way to influence public opinion. According to one report, 61 percent of consumers say they feel better about a company that delivers custom content; they are also more likely to buy from that company. McMurry and TMG support this view with their research that found 90 percent of consumers find custom content useful and 78% believe that organizations providing custom content are interested in building good relationships with them.
Despite these pleasing statistics, internet marketing isn’t magic. The important things to keep in mind are efficacy and return on investment. Though business owners are capable of doing many of the fundamentals of internet marketing on their own (e.g. email marketing, banner ad creation, etc.), if these things aren’t done well, they don’t have the proper effect. Consider this fact: In a study of banner ads worldwide, the average click through rate for banner ads in the U.S. was reported to be 0.1 percent. First, remember that in the world of online advertising, getting an ad seen by thousands of people is relatively easy, so a 0.1 percent click through rate would lead to a lot of clicks depending on where the ad runs. Second, this is the average of all banner ads, so some ads have much higher rates and others had lower rates. Business owners who create their own banner ads run will often find themselves with lower response rates than they had expected.
Even if businesses are already using some forms of internet marketing, it’s important to understand the financial benefits as well as the audience benefits. In the end, the best reason to use internet marketing isn’t that a lot of people are online; it’s that internet marketing provides the most cost effective way for business owners to advertise, market and communicate with the public. One way to gain an edge over the competition is to find new ways to use internet marketing to maximize profits. Remember, effectively using the internet is almost always the best way to bring in more revenue for the amount spent by the business.