Online Marketing

Getting a Web site up and running is only the beginning, but businesses don’t always understand that. Having just paid out significant money for designing and launching a site, a business may have exhausted its budget to the point that nothing is left over for marketing.

“They have it backwards,” says Kate Balmer of GV Interactive. “They should spend 20 to 30 percent of the budget on building the site, then 70 to 80 percent on marketing and advertising.”

The Naples-based online marketing firm helps companies attract visitors to their Web sites. “Having a Web site is not enough to drive sales,” explains Balmer, co-owner of GV (www.gvinteractive.com). “You have to tell people you exist and how to get to your site. You have to make yourself different, better — and you have to brand your site.”

This is unfamiliar territory for companies used to the traditional world of advertising. Now it’s all about search engine placement and optimization, click-through rates, and targeted e-mail campaigns. You no longer simply buy space in a magazine or time on the airwaves; you pay per click of a mouse.

GV Interactive actually got its start in Florence, Italy, in 1996. Balmer, who has a mixed background of art history and computer industry consulting (for the Gartner Group), and her partner, Marco Ciappelli, whose background is in traditional advertising work, formed the company together. They started out offering traditional advertising services as well as Internet marketing, but their focus soon narrowed to the Internet side.

When they picked up a third partner in New York in 1998, they started to get a lot of U.S. clients. “Where we wanted to go with our business, we had a better shot of doing that in the U.S.,” says Balmer, noting that the U.S. was ahead of Italy in using the Internet.

They moved the company to the U.S., choosing to locate temporarily in Naples because of family ties there. Their intention was to relocate to New York, but when the time came, “we decided we were crazy to even think about leaving.” They have settled in Naples, which Balmer says is conducive to their type of business. “There are some nice smaller niche companies here. They have excellent business models and are really geared to boom.”

The company now has Balmer and Ciappelli based in Naples and two partners in New York. Most of its client base is in New York, the Midwest, and Italy, but the company has picked up a couple of locally-based customers, including Proof-It-Online, a Web-based proofing system for graphic designers and printers. International clients include Ghurka.com, an e-commerce site for high-end luxury handbags and luggage, and Amnesty International in Italy. GV Interactive intends to remain a boutique shop that produces high-quality campaigns, rather than taking on more customers than they can handle, notes Balmer.

Once a business has launched a Web site, GV Interactive does the research and media planning to determine the best form of marketing for that particular site. It then carries out the creative side, formulating the message, creating banner ads, e-mail campaigns, sponsorships, mini-sites — whatever is required. It also does the all-important work of getting an optimum position on search engines.

Sometimes, their clients find it all too overwhelming. “When we first sit down with new clients, it’s like data overload,” admits Balmer. “Once we get going, it’s not as difficult as it sounds. It’s a very complicated topic, but what we do is simple: We drive traffic.”

GV usually starts out with clients almost as a consultant, asking what types of marketing they have been doing and what their goals are. Based on that information, GV determines the best way to get visitors to that site. “We are custom creating online campaigns to help them arrive at their goals and reach their audience,” says Balmer.

Online campaigns usually take one of three economic approaches:

The most traditional is known as CPM, or cost per 1,000. This is the way the fee structure started out for advertising on the Internet, explains Balmer. If a company wanted to run a banner-ad campaign, it would buy space in units of 1,000. So if it wanted 100,000 banner impressions, it would buy 100 units for, say, $60 per unit, or $6,000.

A lot of people, however, thought they weren’t getting a good return on their money with this approach, says Balmer, because click-through rates tended to be low — that is, not many people were clicking on the ad linking them to the advertised site. The Internet powers-that-be therefore went to a different model, called CPC, or cost per click. This meant the advertiser would pay a fee only for every person who clicked on its banner. The fee is usually under $1.

A new approach has hit the Internet just this year, according to Balmer. That is CPA, or cost per acquisition. Now the advertiser pays for every person who comes to a site and actually makes a purchase or signs up for a service. That fee varies, depending on the site — NBCi is going to charge more than a small local site — but is in the range of $6-$15, says Balmer.

As if that’s not enough to keep track of, Web sites also have to stay extremely vigilant about their treatment on search engines. These, too, come in a variety of options.

There are the directories, like Yahoo. If a company wants its site to be listed on one of these directories, it usually pays a one-time fee, in the neighborhood of $200.

Other sites, like GoTo.com or FindWhat.com, set up bidding wars for particular keywords. Say you have a site that sells luxury leather goods, explains Balmer. You may bid 50 cents on the keywords “leather handbag.” Then whenever someone clicks on your link, you pay 50 cents. If that is the highest bid, you will show up on top of the search results. If, however, someone else comes in and bids 52 cents for the same keywords, your position will drop down. You have to up your bid to stay on top.

Perhaps the most complicated of all are the so-called “spider” search engines. These include MSN, Hotbot, Lycos, and Altavista, which use automated programs that “crawl” the Web looking for information. Each engine determines a keyword’s relevancy and placement in a different way, so your keyword might turn up number two on one site and number 30 on another. Web sites must monitor these search-engine sites all the time to stay on top of their placement, says Balmer.

Other online marketing options include partnerships and sponsorships. In a partnership, two companies team up in a trade arrangement. Balmer gives a hypothetical example of a car company and a suitcase manufacturer. With every online sale of a car, the customer gets a free suitcase. The car company spurs sales with the free offer. In return, the suitcase company might get advertising on the site, product descriptions, and a link to its own site.

In a sponsorship, a Web site could sponsor a section of an informational Web portal that attracts the sponsor’s target audience. Sponsorships usually see a better return for smaller niche markets, says Balmer.

Which online marketing campaign works best? It all depends upon whom you are marketing, answers Balmer. GV Interactive’s approach with its clients is to start out with smaller programs, concentrating on seeing a return rather than saturating the market, notes Balmer. “We always do a test campaign for two to three months, using 10 to 15 percent of the overall advertising budget before continuing. We try various programs to see which works.” That helps its clients feel more comfortable about diving into the brave new world of online marketing.

Susan Holly is a freelance writer from Sanibel.