| Successful marketing is not
the result of some mysterious process, rather it is the result of the
application of well-proven principals. All of them are based on
one premise: |
|
Marketing is a Numbers Game |
| The Internet has opened up tremendous opportunities
for everyone to market products and services, but few understand the process or the
terminology. Identification is the key to understanding concepts,
so on this page we've defined terms that you will often encounter.
Each definition is accompanied by a brief explanation. |
|
Traffic,
Surfers and Unique Visitors |
We've all heard the old adage,
there are three important factors in a store being successful: location,
location and location. That is a misidentification, because it
reverses cause and effect. Location is the cause, traffic is the
effect. Major retailers seek high-traffic locations and are
willing to pay dearly for them because they know that their store will
attract a certain percentage of the who drive by. The more people who see the
store, the more who will come in. More visitors results in
more sales opportunities and they in turn result in more sales.
It's a numbers game.
A person who browses the web is now
commonly called a Surfer. Once
he enters a site, he become a Visitor.
Most web-sites measure traffic in terms
of unique visitors per month. The term Unique
Visitor
refers to one person who visits a web site during the
month. It makes no difference how many times that person
visits the web site during the month - be it once or a hundred times - he still
counts as only one unique
visitor. |
| Page Views, Time on Site and Hits |
| Many web sites consider
the unique visitor as the first step in the selling process. They
compile other statistical data that tells them how well their web-site
is received. This can measured by Page
Views or Time on Site.
The former is the number of pages a
visitor actually views and how much time he spends at the site.
The term
hit is greatly misused. It refers to the number of files that have
been downloaded. These include not only web pages but each of the
graphics on a page. Some pages contain a great many
graphics. Although many web sites brag about their traffic in
terms of the number of "hits" they receive, it is a meaningless
figure as one unique visitor could view dozens of page and download
hundreds of graphics. |
| Banners and Buttons |
| The Internet makes wide
use of advertising in the form of banners and buttons. Both have
the same function, entice the surfer to click them to visit another
site. The large Search Engines such as Yahoo, Excite, MSN, etc
generate the bulk of their income by selling advertising space in the
form of banners. Run of Site
means that banner ads are randomly placed on pages with no consideration
as to context. Targeted Banners
are those that appear only when certain terms are searched. For
example a Florist may want his banner ad to appear whenever a
surfer enters the key word "flowers." |
| Impressions |
| This is an old advertising
term. It simply means how many actually see a magazine ad or
a
television commercial. The Internet generally uses it in the
context of how many people are exposed to a banner ad. |
| Response / Click Through |
| A response
is a physical reaction by the consumer to something done by the
advertiser. Mail order companies have
run ads in magazines and newspapers for years because a certain number
of people will respond to the ad. The response can be in the form
of a catalog request or an order. The Internet changed the term
to Click Through. It is the
same thing. The Click Through Rate
is the percentage of impressions that result in a Click Through. |
| Referral Rate |
|
The advertising industry measures
response by click-throughs, but neither we nor our affiliates are in the
business of buying and selling impressions. We are concerned with
overall sales effectiveness. We use the term Referral
Rate to indicate what percentage of the visitors to an
affiliates site actually click through to our stores. To keep the
math simple, assume that an affiliate's site has 100 unique visitors per
month and three click through to one of our stores, then that's a
referral rate of 3%. This number is independent of impressions,
which will almost surely be a multiple of unique visitors. |
| Visitors, Customers and
Conversion |
| Getting products
in front of the consumer is but the first step in the buying
process. Successful retailers know that they must convert the
visitor into a customer. This happens when the visitor actually
buys something. Conversion rate
is the percentage that do actually make the transition. |
| Number of Sales, Total
Sales and Average Sale |
| These are
self-explanatory terms. The number of sales is a count of how many
are received from a source, such as an Affiliate, over a given period of
time. Total Sales is the total amount of such sales expressed in
dollars. The Average Sale is calculated by dividing the Total
Sales by the number of sales. . |
|
What
does this all mean to me? |
| We began this
discussion by stating that marketing is a numbers game. Each of
the subjects discussed above is within the control of the marketing
team. Successful E-commerce companies and their affiliates work
toward improving each of the numbers. The Affiliate will
concentrate on increasing the traffic to his site, and improving the
click through rate to the store. The store will concentrate on
converting the visitors into customers and increasing the amount of the
average sale. For ways to do this, see our Success
Stories |
