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Local Sacramento Businesses turn to online marketing in 2010

Online marketing spending has increased at a rapid pace for about the last decade. In fact it is the only category of marketing/advertising that increased significantly last year. There are a few major channels of marketing, and in this article we’ll talk about why online marketing is on the top of the pile.

So we’re now [officially] in a recession. Recovery outlook: divided, some leaning for a quick recovery in 2010 and others betting on a slower return to health. Then why is online marketing posting gains, when all other traditional channels(such as radio, television etc) are getting slaughtered? There’s a budget freeze and spending limits on every US business, from the Fortune 500 to your local taco truck- understandable that dollars would get pulled from traditional advertising. But why are they going into online marketing?

The answer lies in the method of traditional marketing. Let’s examine the major marketing channels that exist today:

• Radio
• Television
• Print (magazine, publications, newspaper)
• Display(Billboards, corporate sponsorships)
• Direct Mail (aka ‘junk mail’)
• Direct Marketing (Door-to-Door canvassing or Telemarketing)
• Internet

Now we’re going to tell you how all these channels of marketing are different from the internet.

1. Scale. A Fortune 500 company has a marketing mix hitting all of these channels constantly. It’s a simple move to pull dollars from one part of the mix to another. For the small business, it’s a different story. The taco truck owner doesn’t have 5.0 mil in his budget, he has $500. Correct selection of where his marketing dollars go becomes the highest importance. He can’t afford waste.
2. Placement Costs. Internet has the lowest minimum cost of any kind of marketing. Want a radio or tv spot? What about the yellow pages? Those will set you back a few grand at least. But the point at which a small business can enter the market is so low, literally any business can do it.
3. Startup Costs. You want to send out a direct mail campaign? You’ll need a mail list, and mailers designed. Want to put up a TV spot? You’ll need to hire a camera guy and an editor. Printing an ad? Writers & graphic designers. Want to telemarket- OK, purchase an autodialer and hire some phone jockeys.  All these support services inflate what you are actually paying for your marketing.
4. Targeting. This is a big one. Say you purchase a tv spot. Sure, you can say when it airs, and on what channel, but past that there is no control. Even more so with radio. And direct mail- why, it’s fortune if more than .5% of your list opens the letter. As far as who’s opening that letter- you’ll know about as much as the phonebook does. With online marketing, you can laser focus your campaign to the finest detail.

The real problem is your average small business can’t afford a full marketing mix. Often, their budgets shut them out of other more costly types of advertising. Frustrated, and without the type of collateral to start a real campaign, most businesses fall back on Word of Mouth and referral marketing.

But this is where online marketing really shines. If you spend money to create a functional, content rich website for your comapany,  you’ll double your referrals over time. How? Someone gave you a business card the other day. It’s already lost, forgotten in some desk drawer. You’ll never refer that to anyone. But compare with the last time you found something useful or funny online- didn’t you send it to your friends? Build a relationship not just between you and your customer, but you and your website.

In truth, the website is the most important asset for the small business.