3. About Me
Technology
• Bachelor in Computer Science
• Master of Software Systems
Engineering
• Worked for about 5 years as a
software developer/IT consultant
Business
• MBA
• Current work in marketing for an
Australian group of companies
• Freelance marketing consultant
• Wannabe entrepreneur
16. A Real Example
“I already have too “I’m always interested
many blogs to read. I in exploring new
don’t have time for content and learning
your service.” new things.”
17. These clusters of people with similar wants
or needs represent a segment
18.
19. Which segment should we target?
•Which can we best service?
•How profitable are they?
20.
21.
22. “Positioning is what you do to the
mind of the prospect. That is, you
position the product in the mind
of the prospect.” - From the book
Positioning
Al Ries and Jack Trout. Positioning: The Battle for Your Mind. New York: McGraw Hill, 2001.
29. WHAT IS VALUE?
Customers will
buy the product
that maximises
their surplus.
Price
Cost
30. WHAT IS VALUE?
Customers will
buy the product
that maximises
their surplus.
Same price.
Same cost.
Price Different Price
perception of
value.
Cost Cost
31. Positioning moves
the buyer’s surplus
up, increasing their
perceived value.
But positioning
must be
targeted
towards your Price
segment.
Cost
38. “Melbourne now clearly leads the Gold Coast as
the most preferred domestic holiday destination
and is the only domestic destination to have lifted
its preference level over the past decade according
to a March 2010 Roy Morgan Research Holiday
Tracking Survey. The survey revealed 21 per cent of
respondents wanted to holiday in Melbourne
within the next two years.” - Tourism Victoria
39. “Melbourne now clearly leads the Gold Coast as
the most preferred domestic holiday destination
and is the only domestic destination to have lifted
its preference level over the past decade according
to a March 2010 Roy Morgan Research Holiday
Tracking Survey. The survey revealed 21 per cent of
respondents wanted to holiday in Melbourne
within the next two years.” - Tourism Victoria
40. “The first initial burst of campaign activity resulted
in more than 10,000 consumers subscribing to our
Daylesford enewsletter and traffic to Daylesford
content on visitvictoria.com increasing by 62 per
cent (year on year) between 16 August and the
end of November. In the first fortnight traffic
peaked with an increase of 335 per cent year on
year.” - Tourism Victoria
41. “The first initial burst of campaign activity resulted
in more than 10,000 consumers subscribing to our
Daylesford enewsletter and traffic to Daylesford
content on visitvictoria.com increasing by 62 per
cent (year on year) between 16 August and the
end of November. In the first fortnight traffic
peaked with an increase of 335 per cent year on
year.” - Tourism Victoria
45. Commerce Content
Web’s Best Store Search Amazing Content Search
Shopping Cart
Header Ad
Product Name
As stands out like true blue when trent from Article Name
punchy dead horse. Grab us a lippy how built
like a slabs. As stands out like your shout my Side
she'll be right vinnie's. As cross as a mappa
Product
Ad
As stands out like true blue when trent from punchy dead
tassie piece of piss lets get some gobful. Lets
horse. Grab us a lippy how built like a slabs. As stands out
Image
throw a flake no worries as cross as a
like your shout my she'll be right vinnie's. As cross as a
brumby. As dry as a going off also he hasn't
mappa tassie piece of piss lets get some gobful. Lets throw a
got a stubby holder. As dry as a figjam my
flake no worries as cross as a brumby. As dry as a going off
lets throw a barrack. Mad as a strides to
also he hasn't got a stubby holder. As dry as a figjam my lets
trent from punchy rollie. It'll be strides with
come a bitzer. As cross as a fair go where he
throw a barrack. Mad as a strides to trent from punchy rollie. More articles
It'll be strides with come a bitzer. As cross as a fair go where
hasn't got a banana bender. Come a jumbuck
he hasn't got a banana bender. Come a jumbuck my gutful of
my gutful of rapt.
rapt. •She'll be right
Add to Cart! •as a counter meal
•chook my as dry
Footer Ad
Trust Us. We have links and are on Trust Us. We have links and are on
Facebook. Facebook.
46. Commerce Content
I make money I make money
when you buy from
things. advertising.
But can both benefit from:
Social networks
Search engine optimization
Proper design and usability
47. Commerce Content
I only want to I always want
Lowest
pay for Risk
to make money
advertising if I Strategies from showing
make money. your ad.
48. Commerce Content
I only want to I always want
Lowest
pay for Risk
to make money
advertising if I Strategies from showing
make money. your ad.
I’ll share the profit with
you if someone clicks I show your ad. You pay
the ad and buys me.
something.
49. Commerce Content
I only want to I always want
Lowest
pay for Risk
to make money
advertising if I Strategies from showing
make money. your ad.
I’ll share the profit with
you if someone clicks I show your ad. You pay
the ad and buys me.
something.
Cost per acquisition (CPA) Cost per mille (CPM)
This is per mille (1000) because we track ad views in blocks of 1000. Each
view is often worth a fraction of a cent. CPM let’s us deal with whole
dollars. e.g. if CPM is $10, each time the ad is served, we make 1¢.
50. Commerce Content
Cost per acquisition (CPA) Cost per mille (CPM)
Risks for the commerce site Risks for the content site
•The visitors are from the •They make terrible ads
wrong segment that nobody wants to click
•Too much noise on the •Their website is terrible.
site Nobody is going to buy
anything
51. Commerce Content
Cost per acquisition (CPA) Cost per mille (CPM)
52. Commerce Content
Cost per acquisition (CPA) Cost per mille (CPM)
Compromise
53. Commerce Content
Cost per acquisition (CPA) Cost per mille (CPM)
Compromise
Cost per click (CPC)
I’ll only pay when someone I only get paid when
clicks my ad. someone clicks an ad.
It’s a waste if the clicker It’s a waste if your ad shows
doesn’t transact. and nobody clicks it.
54. Commerce Content
Cost per click (CPC)
Incentives more aligned.
I’ll optimize my site to I’ll optimize my site
maximize the revenue from maximize the click through
each click. rate (CTR).
57. But which metric is important?
It’s the same!
Commerce Content
Cost per acquisition (CPA) Cost per mille (CPM)
We need to work out the implied or effective rate for the
metric we care about.
Effective CPA Effective CPM
58. Effective Rates
(for CPC campaigns)
Commerce
Effective CPA =
Cost per click
Conversion rate x Average transaction value
Content
Effective CPM =
Cost per click x Click through rate x 1000
59. Effective Rates
(for CPC campaigns)
Commerce
Effective CPA =
Cost per click
Conversion rate x Average transaction value
Strategies to minimize CPA
•Minimize cost per click
•Increase conversion rate
•Increase average transaction value
60. Effective Rates
(for CPC campaigns)
Content
Effective CPM =
Cost per click x Click through rate x 1000
Strategies to maximize CPM
•Increase cost per click
•Increase click through rate
61. Effective Rates
(for CPA campaigns)
Commerce
Effective CPA =
We are using this method
Content
Effective CPM =
Payment from commerce site / Ad Views x 1000
62. Effective Rates
(for CPM campaigns)
Commerce
Effective CPA =
Cost per Mille x Click Through Rate
Conversion rate x Average Transaction Value
Content
Effective CPM =
We are using this method
63. HOW DO I GET STARTED
ADVERTISING?
Commerce Content
Adwords Adsense
Facebook Outbrain
Twitter Amazon Affiliate
LinkedIn Niche Networks
Niche Networks
64. WHICH SERVICE SHOULD I
USE?
Only choose advertising which effectively reaches your target
segment and aligns with your position.
Ask yourself:
•Can I target them on platform X? (e.g. can I target plumbers on LinkedIn?)
•What’s my effective CPA on each platform? (may require some
experimentation)
•What does this platform say about my position? (e.g. should I advertise
conservative business solutions on Facebook?)
65. HOW DO I TRACK THE EFFECTIVENESS
OF MY ADVERTISING?
Cheap Expensive
67. A User Requests Your
Web Site
Split Testing Service
Product Name Product Name Product Name
As stands out like true blue when trent from As stands out like true blue when trent from As stands out like true blue when trent from
Product
punchy dead horse. Grab us a lippy how built punchy dead horse. Grab us a lippy how built punchy dead horse. Grab us a lippy how built
Product like a slabs. As stands out like your shout my
she'll be right vinnie's. As cross as a mappa
Product like a slabs. As stands out like your shout my
she'll be right vinnie's. As cross as a mappa
like a slabs. As stands out like your shout my
she'll be right vinnie's. As cross as a mappa
Image
tassie piece of piss lets get some gobful. Lets tassie piece of piss lets get some gobful. Lets tassie piece of piss lets get some gobful. Lets
Image Image
throw a flake no worries as cross as a brumby. throw a flake no worries as cross as a brumby. throw a flake no worries as cross as a brumby.
As dry as a going off also he hasn't got a As dry as a going off also he hasn't got a As dry as a going off also he hasn't got a
stubby holder. As dry as a figjam my lets stubby holder. As dry as a figjam my lets stubby holder. As dry as a figjam my lets
throw a barrack. Mad as a strides to trent from throw a barrack. Mad as a strides to trent from throw a barrack. Mad as a strides to trent from
punchy rollie. It'll be strides with come a punchy rollie. It'll be strides with come a punchy rollie. It'll be strides with come a
bitzer. As cross as a fair go where he hasn't bitzer. As cross as a fair go where he hasn't bitzer. As cross as a fair go where he hasn't
got a banana bender. Come a jumbuck my got a banana bender. Come a jumbuck my got a banana bender. Come a jumbuck my
gutful of rapt. gutful of rapt. gutful of rapt.
Add to Cart! Add to Cart! Add to Cart!
Original Blue Button Image on right
68. MEASURE THE EFFECTS ON
THE METRICS THAT MATTER
Commerce Content
Buys things Clicks ads
But consider other leading indicators (sometimes called micro conversions)
Social sharing Social sharing
Subscribes to newsletter Subscribes to newsletter
Adds item to cart Comments on article
Creates an account Creates an account
69. TRY TO QUANTIFY
EVERYTHING
Create relative weighting for each type of conversion. In this example, I
assume the average transaction is for $100 and don’t account for the
lifetime customer value.
Expected Value Weight Notes
Transaction AU$100 100 Remember to account for the
lifetime value of a customer
Add to cart AU$2 2 Assumes a 2% chance they will
transact later.
Creates account AU$3 3 Assumes a 3% chance they will
transact later.
Subscribe to newsletter AU$5 5 …
Like on Brand Facebook AU$0.50 0.5 …
Like Product on Facebook AU$0.10 0.1 …
70. ANALYZE THE RESULTS
% Change in relevant metric or weighted combination
Original Blue Button Image on Right
71. ANALYZE THE RESULTS
% Change in relevant metric or weighted combination
+30%
-5%
Original Blue Button Image on Right
72. SPLIT TESTING
In practice, here are some tools you can use.
More Flexible Less Technical
75. BEWARE LOCAL MAXIMA
As you optimize your
site, you may reach a
local maximum.
Conversion Rate
76. BEWARE LOCAL MAXIMA
As you optimize your
site, you may reach a
local maximum.
Conversion Rate
Further tweaks only
make things worse.
77. BEWARE LOCAL MAXIMA
As you optimize your
site, you may reach a
local maximum.
Conversion Rate
Further tweaks only
make things worse.
78. BEWARE LOCAL MAXIMA
As you optimize your
site, you may reach a
local maximum.
To jump the
chasm, try
Conversion Rate something big
and creative.
Further tweaks only
make things worse.
79. BEWARE LOCAL MAXIMA
As you optimize your
site, you may reach a
local maximum.
To jump the
chasm, try
Conversion Rate something big
and creative.
Further tweaks only
make things worse.
80. BEWARE LOCAL MAXIMA
As you optimize your
site, you may reach a
local maximum.
To jump the
And then
chasm, try
Conversion Rate something big
continue your
split testing.
and creative.
Further tweaks only
make things worse.
81. YOU CAN ALSO SPLIT TEST
YOUR ADS
Which ads have the lowest effective cost per acquisition?
82. SUMMARY
• Get your fundamentals right.
• Know your positioning.
• Thereare only two kinds of web sites. Choose the
appropriate strategy and pay the right amount.
• Split test your site and your ads.
