Online marketing now on top

Online marketing presents great opportunities to reach new markets

THIS month saw the release of a piece of market research that shows a significant change in the way businesses promote themselves. The Local Commerce Monitor study, carried out for over a decade in the US by The Kelsey Group and ConStat, showed that internet marketing is now the preferred way to grow a business, as it has now overtaken offline marketing for the first time.

The latest edition of the study revealed that although small businesses have spent less overall on advertising than this time last year, they have increased their spending on digital marketing and, for the first time ever, online media has overtaken traditional media in the way that small businesses are choosing to invest their advertising funds.

After examining over 300 small and medium sized businesses, the figures showed a decrease in general advertising spending by 23.5% from August 2008 to August 2009, but of the total advertising undertaken, online advertising rose hugely, from 22% to 36.8% over the same period.

The overall reduction in advertising expenditure can easily be attributed to the ongoing economic downturn, with businesses worldwide trying to cut unnecessary costs and limit their spending. But why has there been a big increase in online marketing?

Apart from the ever-growing popularity of the internet, particularly in the Web 2.0 social media platforms, many avenues of online advertising can be tracked for increased value. For instance, pay-per-click advertising campaigns can be reviewed and instantly amended according to their level of success, providing the advertiser with more flexibility and assurance in how they spend their budget and how their adverts are seen by their target market.

Organic search engine optimisation may be more of a long-term strategy. But it, too, can be monitored in order to analyse its worth and success. In any case, observing prospects and conversions is certainly easier to manage through online advertising than through other mediums, such as print advertising or public relations – and it can even be fully automated.

When a small business, seeking to stretch its marketing budgets as far as they will go, gets used to this level of control, the thought of spending thousands of pounds creating radio or television adverts and waiting months for them to run seems like lunacy, especially if at the end they can’t even be sure of the return they generate.

But it isn’t just the ability to monitor campaigns closely and make changes quickly that made marketers fall in love with the internet. Companies can now forge relationships with customers and prospects like never before. Small businesses have learnt that by being involved in the social networks, such as Facebook, Twitter and YouTube, they can engage target markets and better manage their brand and reputation. Delving into the networks has helped businesses in all industries gain a competitive advantage over rivals that still view the internet as something to approach with caution.

Even though online channels have become the normal way for a business to advertise, the number of firms getting it wrong is a surprisingly high. Anyone with an internet connection can start promoting their business within minutes, and while this is a core reason why internet marketing is so popular, it is also a factor in why a lot of advertising budget gets wasted. Market research often gets neglected and many small businesses go from simply trying something out to burning through heaps of money very quickly.

Even though the way we market ourselves has changed, the fundamental principles of marketing haven’t. It is important to establish who your target market is and to remember it. Then look into the best ways of attracting their attention and then test the different publishers and campaign options available to see which brings in the best return. Marketing has always been based on the principle of ‘test and measure’, and with the most comprehensive tools now available to aid this process available there are no excuses for taking shots in the dark.

Educating businesses on how to set up and execute online marketing campaigns is something quite popular at the moment. Barely a day passes without an event dedicated to the subject, and with the Welsh Assembly hosting a run of five seminars across Wales next month, it is fair to assume that local small businesses will be far more marketing-savvy in the near future, which is great news. As the internet has brought the world closer together and made geography less important, small Welsh businesses stand their greatest chance of making themselves known globally.

With the large increase in online advertising spending and with BBC News reporting last week that the current recession may finally be coming to a welcome end in the UK, it will be interesting to see the progress and presence of online/digital marketing twelve months from now. Wales is filled with SMEs. This development in marketing, and the opportunity that the National Assembly is presenting, really gives them a chance to impact on their potential customers.