Insider Report -- Online Marketing is Broken.docx

Copyright GameChange Web Marketing 2014

Online Marketing is

Broken! Learn the essential secret key to stop chasing

traffic and start driving PROFIT today

Copyright 2014 GameChange Web Marketing


Online Marketing is Broken!

Learn the essential secret key to stop chasing

traffic and start driving PROFIT today

Broken? That’s my conclusion. You decide for yourself, once you see the facts from

current research, revealing the overall trends in online marketing and the actual

revenue results – or lack of them -- online marketing is producing.

If Online Marketing is “broken,” what can you and your company do about it? The

great news is there are 3 fundamental questions that any company can use to

immediately start fixing what’s broken for their own business. The only problem is,

every single business owner, marketing director, and online marketer I have asked

these questions of has told me they’ve never been asked them before.

But by the end of this report, YOU will be.

So what am I talking about when I say online marketing is broken? Let’s start with

these facts – but let me just warn you here, what I’m about to share with you may

be disturbing or even painful, especially if you see your own experience reflected in

the facts you are about to see.

Let’s start with a few “big picture” facts:

Last year more than $120 Billion was spent on online marketing worldwide

Most companies spend between 8-14% of total revenue on marketing

Digital marketing spend is increasing average of about 20% per year

Vast majority of online marketing dollars (between 60 and 70%) are still

going to Search

Source: Duke University Fuqua School of Business, Forrester, Capgemini

That last fact, about the vast majority of dollars still going to Search (SEO, Pay-per-

click being the best known), is going to look different to you in just a few minutes –

so keep that in mind as we go forward.

So we know some of the overall trends of how much is being spent and how it’s

being spent.

Now it gets interesting – let’s look at what all that money produced in terms of

results:

Recent research (The CMO Survey®, Duke University’s Fuqua School of Business,

McKinsey and Company, as well as Shop.org and Forrester), reports in greater


detail what has been happening in online marketing over the past five years, and

what results all that online marketing has produced. The research covers a 60

month period from February 2009 to February 2014.

Over the past five years, from 2009 to 2014, companies in the United States

increased their digital marketing spend (in purple) from $24 billion to $60 billion –

an increase of $36 billion dollars in real numbers, and by percentage an increase of

150%.

What did we get for that?

Over the same five years, Customer Retention (in green) decreased from 2.3%

down to 2%.

Return on Investment (ROI) (in blue) increased from 2.6% all the way up to a

whopping 3.2%. Woo hoo.

That’s right – for spending 150% more money, what we got was a 0.6% increase,

from 2.6% ROI up to 3.2% ROI.

Can we agree that in real life, increasing your spending by 150% to the tune of

$36 billion, to only get an increase in ROI of 0.6%, is not exactly a big win?


Now let’s look at Conversion rate.

From 2009 to 2014, conversion rates (in orange) from online marketing increased

from 2.5% to 2.7%. (Well, at least it didn’t go down like customer retention did!)

But here’s the completely, painfully ridiculous part of this:

Nearly everyone defined “conversion” differently. Some of the 3000+ companies

surveyed reported how many Likes they got on their Facebook page as

“conversions”, others how many people opted in for a free report or other free

offer. So if, like me, you want to consider a “conversion” to mean ACTUAL REVENUE

to your company, we probably need to cut this conversion rate by at least 30%.

Summed up:

Spending has increased 150% ($36 billion) in the past five years, but ROI

has increased only 0.6%

So what does all this mean?

Here’s what I say it means – you let me know if you agree.

The online marketing industry is stuck in an old model, an old assumption, which I’ll

sum up like this:

More Advertising = More Traffic = Higher ROI

Isn’t that basically what they are all saying? “It’s a numbers game.” “We just need

to get you more traffic and you’ll start to see results.” “It’s all about getting you

ranked on the first page of Google, then you’ll get more traffic and you’ll get more

sales.”

Let me provide just one real world example where this basic model proved to be a

complete failure:

This is a real report, presented by the marketing agency responsible, to a Fortune

50 retailer. They spent $3.5 million on a well-planned, efficient media mix digital

marketing campaign to some of the best reserved “audience.”

All that marketing produced a lot of activity – over 192 million impressions,

564,807 clicks. It was highly successful at driving traffic. But it was a disaster in

terms of revenue, costing the company an average of $800 to acquire each

customer, each of whom only spent an average of $216.


It’s kind of like the old joke about the medical profession: “The operation was a

success, but the patient died.” And it’s about as funny, if you’re the one involved –

remember, this company spent $3.5 million to get these “results.”

Let’s be very clear here: Neither this specific example nor the results of this study

should be interpreted to mean no one is making a return on their online marketing

dollars – that would be foolish to assert.

While few online marketing campaigns are tracked for ROI as closely as this one,

still most likely every person reading this can point to at least one example where

they know there was a positive ROI from an online campaign. At least I hope so!

But stories aside, simple logic says that since some online marketing has produced

atrocious, negative returns such as the retailer example above, but the overall

results are slightly positive (increase of 0.6%, up to 3.2% ROI), then obviously

some online marketing campaigns have produced positive results. As with anything

in business and in life, the better your information, and the better strategy you

formulate with that information, and the better you execute that strategy, the


better your results are likely to be. Some have won, some have lost, to put it in the

simplest possible terms.

At the same time, I assert it would be very foolish to ignore these macro results.

Results this consistent over such a broad sample and over a 5 year period point to

fundamental issues with the basic assumptions that are being made about what

works and what doesn’t.

I say that this research, tracking results and spending in the real world, over a 60

month period says, loud and clear:

More Advertising = More Traffic = Higher ROI is a whole lot more like a myth

than a fact. It’s an assumption we have been making, and one we have gotten very

attached to, but it has not, in fact, been proven to consistently produce results in

the real world.

Remember, the real world results are:

Spending has increased 150% ($36 billion) in the past five years, but ROI

has increased only 0.6%

Let’s pause and just let that sink in for a moment. More Advertising = More

Traffic = Higher ROI is a myth. Continuing to work that formula like it’s the whole

solution is only slightly more likely to make you money than going hunting for the

Abomidable Snowman would be. And yet the great majority (60 – 70%) of online

dollars are still going to Search, which only drives traffic, nothing else.

In other words, Online Marketing is Broken.

So if just paying to get more people to your website isn’t the answer (can we agree

it’s not “the answer,” or will it take another $36 billion before we wise up?), then

what should we be doing instead?

In a moment, I’m going to share with you those 3 Fundamental Questions no one

has ever asked you before, and going through that exercise is going to help you to

start to answer that “What do I do now?” question. (Just let me reassure you – I’m

not going to recommend you stop spending money on online marketing. I’m just

going to give you a better process for deciding, how, where, and when to spend it.

A process for deciding how to spend your online resources in a better way for your

company and its particular strengths and needs).

But first, I want to share with you some other important research, which will shed

some light on what has changed recently in how people make buying decisions.

(Can we all agree that we don’t really care about traffic or rankings or any of that,

if it’s not helping us to make sales?)

Research presented by the Sales Executive Council in 2010 revealed some things

about the different factors that influence customers’ buying behavior and loyalty.


While these results are more specific to the sales process than the marketing

process, I think they help point the way toward how online marketing has missed

the mark so badly, spending so much money to get so little in results. This will also

tie back to what I said earlier about so much of that money going to Search in

particular – so keep that in mind, it’s all going to become clear very soon.

Here’s what the Sales Executive Council research showed.

Through interviewing over 5000 customers in multiple industries, (focused on the

business-to-business market), they identified four fundamental factors that

influenced why people choose to purchase from a business and how loyal they were

to staying with that business. The four factors were: Product Quality and Service,

Company/Brand Reputation, Sales Experience, and Price-to-Value Ratio.

I suggest you take a moment before you look at the results, and ask yourself, how

big a percentage of the total buying decision would you attribute to each of the

four? X% to Price, Y% to Company/Brand Reputation, etc. Take a moment and

write down what you think it is.

Ready?

Now let’s see what they found:

Surprised? The biggest factor by far, more than twice any of the others, and over

five times Price as a factor, is the Sales Experience itself.


Not only that, but here are a few of the specific factors within the Sales Experience

that people said they want the most:

Offers unique, valuable insights on the market (they like being told

things they don’t know already)

Helps me navigate alternatives (as opposed to pushing toward a

particular solution or product)

Helps me avoid potential landmines

Educates me on new issues and outcomes

If you are a business owner in any industry, how could you use this insight into the

factors that influence buying decisions?

And more to the topic at hand, how could this help us to produce better results in

our online marketing?

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Now that we have a frame of reference about what kinds of results companies in

the past five years have been getting from online marketing, as well as some new

insight into what actually motivates people to buy in today’s world, I’m going to

(finally!) give you those 3 Fundamental Questions you’ve never asked yourself

about your online marketing.

Let’s do this in the form of a game.

The ROI Game

You have $10K to spend on online marketing.

And you have to drive $20K in revenue as a result of how

you spend that money.

So what are you going to do?


To help you win the game, here are 3 questions I’m asserting you’ve never asked

before (if I’m wrong, go to the head of the class, you’re way ahead of the curve!)

1) Are you going to spend that

money on Awareness?

Awareness means top of the

funnel, reaching out to people

who don’t know your or your

business, making them aware of

you and your product or service.

This means Search. This means

PPC, SEO, and anything else

directed toward Search. Search is

Awareness Marketing.

or

2) Are you going to spend the

money on Informing, educating

the people who are already aware

of you, but don’t yet have a strong

DESIRE to buy from you? Are you

going to reach out to those people

and try to engage with them, give

them information and education,

create desire? This is the middle

of your funnel, and the purpose

of spending money here is to

create DESIRE for your product or

service and move the people who

are stuck here further down your

funnel toward making a buying

decision with you.

or

3) Are you going to spend it on

Conversion? Conversion means

communicating and connecting

with the smaller number of people

who have made it all the way down

to the bottom of your marketing

funnel, who are showing DESIRE

and some INTENT to buy from you,

but haven’t done so yet.

AWARENESS

Informing to Create DESIRE

CONVERSION


Please take a few minutes, think about your business, and think about how you

could use $10K to drive in $20K in revenue. Where do you think YOU, in your

circumstance, should spend that money to get the best return? All on Awareness?

Half on Informing and half on Conversion? Think you already have very good

Awareness and well informed prospects, and your best bet is to focus on

Conversion? What do you think?

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

There’s a good chance that you have been able to come up with some kind of

answer to this. There’s an even better chance that, as you were working and

thinking to come up with your answer, you were struck by the fact that you are

having to guess. You (and you are not alone in this!) don’t really know, you don’t

have any real, solid information, to tell you how to best answer these questions for

your company.

Let me just point out a couple of other things for you to consider:

If you have been spending most or all of your online marketing money and effort on

Search – SEO, Pay-per-click, Facebook ads, LinkedIn ads as some examples – then

it’s critical that you understand this point:

“Search” is Awareness Marketing. It rarely does anything in the realm of

Informing, and it certainly has NOTHING to do with Conversion.

If the bulk of your online marketing dollars and efforts have been spent on SEO,

PPC, or other forms of Awareness Marketing, then there’s a good chance that you

have a marketing funnel that is very top heavy – lots of people way up in the top of

it, aware of you in some way, but very few of them moving down to find out more

about your product or service, much less starting to feel any intent to purchase.

Here’s an example – this is a snapshot, a real time picture of the marketing funnel

of a company, using proprietary Top-to-Bottom Funnel Analysis few companies

have access to:


This company has been spending

money on Awareness to fill up the top

of the funnel. 63% of the people in

their funnel right now are still in the

top, just Awareness. They’ve had

some success moving some people

from Awareness down into Desire, but

they are failing, miserably, to move

those people into Intent, which is

where Conversion happens. If this

company continues to follow the More

Advertising = More Traffic =

Higher ROI formula, how likely do

you think they are to make any real

profit for all that money they are

spending?

Remember, way back at the beginning, when I pointed out that the bulk of all those

billions spent on online marketing was going to Search? All on Awareness.

Awareness itself pays you nothing. Desire itself pays you nothing.

Only Conversion pays you.

But not every marketing funnel looks like this. Let me show you another real time

Top-to-Bottom Funnel Analysis of a different company with a very different funnel:

This company has a complete different

situation happening with its marketing

funnel. This is a company that would,

in fact, be well served to devote the

bulk of its marketing spend on

Awareness. They have quite a few

people milling around in Desire, in

need of some additional educating and

informing to move them forward, so

they would also be smart to spend

money there, because they are clearly

doing a pretty good job of engaging

people toward the bottom of the

funnel, creating Intent and converting

those into actual sales.

Every marketing funnel is different. Throwing lots of money into Search to drive

Awareness is a great strategic move for this second company – but the same move

would be a complete waste for the first.

It’s essential to understand this: Your marketing funnel is absolutely unique to your

company, and not only that, it changes all the time. You need real time funnel reporting

if you really want to take control and make the best decisions about your online

marketing.

If you are thinking that you need to seriously consider re-allocating some of your online

marketing resources, here’s a high level overview of some of the most common forms of

online marketing, and how they typically relate to the Top, Middle or Bottom of your

marketing funnel.

This is not intended to be a comprehensive or complete list, but more of a guide to

better understand some of these tactics and how they can function effectively in the

different parts of your funnel.

Top of the Funnel: AWARENESS

The purpose of awareness marketing at the top of your funnel is to make people aware

of your product or service and then begin to create interest and value in their eyes,

provide them with information they find valuable and useful, start to create relationship,

and move them down your funnel into DESIRE.

All Search Engine Marketing – SEO, Adwords and other Pay-per-click, including

Facebook ads, LinkedIn ads, etc

Banner ads on other companies’ websites

Blogging, writing articles, posting on social media sites

Commenting on other people’s blogs, on social media group sites. If done well

and consistently, with a strong focus on providing value as opposed to

promoting yourself directly, this will also continue to be an effective tactic in

the middle of your funnel

Joint Venture (JV) partners promoting your product or service to their list


Middle of the Funnel: DESIRE

The purpose of marketing to those in the middle of your funnel is to further engage and

build relationship with them, educate and inform them in ways that will have them see

greater value in what you have to offer. Emphasizing the benefits will help them feel

more desire for the experience they perceive they will have when they purchase your

product or service, creating more emotion and moving them from DESIRE down towards

the bottom of your funnel into INTENT and CONVERSION.

Newsletters, blog posts and email marketing campaigns to people who have opted

in to your list

Posting on your own social media platforms

Webinars and teleseminars

As mentioned above, commenting on others’ blogs and social media, such as

Facebook or LinkedIn groups, with an emphasis on educating people with

information they find genuinely valuable as opposed to self-promotion

Re-marketing to place your ads in front of people who have already been to your

website at least once

Free opt-in offers on your website to build your list – free reports, quizzes, “how

to” guides, templates, checklists, etc

Bottom of the Funnel: from INTENT to CONVERSION

The purpose of marketing at this level of your funnel is to drive action. To move people

who have real desire and some level of purchase intent to take action.

As in the middle of the funnel, free opt-in offers on your website and social media

platforms to build your list – free reports, quizzes, “how to” guides, templates,

checklists, etc

Direct offers such as time specific pricing, bonuses, 2-for-1 specials

Calls-To-Action (CTAs) to get people to either purchase now or to take another

action closer to that, such as a free consultation, or a free trial of your product or

service

Engaging videos or other content that teach people things they genuinely want to

know, and position you as a trusted expert

Video Sales Letters – also known as “ugly videos” – with well-designed, compelling

copy designed to bring people to purchase on the spot


Landing pages – well designed with compelling copy and irresistible offers

designed to drive sales on the spot

Live engagement on your website through the tool of “live chat” – to engage with

them at the point of high interest when they arrive on your website – but with an

approach designed to drive conversion rather than simply customer service

In summary, online marketing is broken, but it’s far from dead – it’s still by far the most

powerful form of marketing in today’s world! Your first key step is to use these 3

questions to hone in on what your company actually needs, at this time, rather than

blindly following the constant drumming message of More Advertising = More Traffic

= Higher ROI. It’s not that simple, and for your company in particular it might well be a

disaster the way it was for that Fortune 50 retailer.

Ready to take control of your marketing funnel?

Every business owner, marketing director, and online marketer with whom I’ve shared

this information has told me that simply asking these 3 questions has already changed

the way they see their business. Some were already making changes to their current

marketing plans before the conversation was even over!

That said, most also have told me that they want:

Access to the proprietary Top-to-Bottom Funnel Analysis referenced in this report,

to take the guesswork about what’s really happening in their funnel, right now

Better Middle of the Funnel tactics and strategies to increase Desire in their

market

Better Bottom of the Funnel tactics and strategies to drive Conversion

If you want to learn more about one or more of those key topics, the next step is a

custom Profit Readiness Assessment,™ a quick process that will assess your company’s

particular needs and goals, and provide more specific recommendations for how you can

take your company from where you are now to where you want to go.

Please note: This Assessment is only for those who are serious about looking at the

hard facts about their own marketing funnel, and taking action to solve the particular

online marketing success formula for their business.

If you are serious about finding online marketing solutions for your company, this

assessment is your best next move. To schedule it now, go to

www.gamechangewebmarketing.com/PRA

Documents

Insider Report -- Online Marketing is Broken.docx