It’s a cliché that the only constant in life is change. That is certainly true in marketing in general, and in Internet marketing in particular.
Back in 2005 I was managing Google AdWords for a realtor. We were getting leads for an average cost per lead of $10, and we were bringing those leads in, hand over fist.
You couldn’t do that on AdWords for a realtor today. Your cost per lead would likely be 20-30 times that amount. Why? What has changed? Well, at that time, there weren’t that many realtors advertising on AdWords, and the cost per click was very low compared to today. Now, many, many more advertisers means the bids have risen a lot, so the only types of companies that can advertise on AdWords now are companies selling high ticket products or services.
This story highlights a phenomenon I have noticed increasingly in the last few years. It works like this:
- a. A new advertising medium or platform starts up
- b. A decent number of public start using it to find products or services
- c. At first a small number of advertisers use the medium
- d. Later on, as word gets around that the medium works for advertisers, the number of advertisers grows massively
- e. The massive number or advertisers causes either: a) the number of leads to diminish for individual advertisers, or b) the cost per lead increases, or both
If a business starts to use the advertising medium at “c” above, their results will likely be huge. But if an advertiser starts using the medium at “e” above, it’s possible they will never get good results and will probably discontinue using that medium.
- Google AdWords is definitely at point “e” above. This has driven bid prices up to the point where only businesses selling a high ticket item can afford to advertise on AdWords. For those businesses the medium still can work great.
- Yelp is at point “e” above. A few years ago you could have a free listing on Yelp and you would get a decent number of leads from that. Now you pretty much have to have one of their paid ad accounts. If so, you can still get a decent number of leads from Yelp.
- Right now, Facebook advertising is somewhere between “c” and “d” above, depending on the type of company advertising and the public being promoted to. So you can still in some cases get lower costs per lead. But Facebook isn’t appropriate for all types of companies. It’s better for B2C (business to consumer) than B2B (business to business) companies.
- Email promo went through a slightly different lifecycle. Basically back in 2000-2001, email promo was working like gangbusters. I worked for a software company and we were making millions with it. Then a few years later, guys selling Viagra and toner cartridges abused the medium by overusing it, which for all intents and purposes killed it, except for emailing to your in-house list of clients and prospects.
This doesn’t mean that you should stop using Google AdWords, Yelp, email marketing or any other advertising medium, if it is working for you. It doesn’t mean those media don’t work anymore. But it does mean that there are cracks in the armor, that those media don’t always work for everyone today.
A Better Marketing Plan
So I’m not trying to be a downer here. But here are the points I want to make:
- Every advertising medium goes through a life cycle at least similar to what I describe above.
- At this point in time, that entire life cycle can happen amazingly fast. What used to take decades can now happen in a year or less.
- Because this life cycle happens so fast, it is not possible to just promote your business on one medium today and just stay only on that medium. Your campaigns could stop working or diminish greatly without your understanding why.
- The better plan is to aggressively find new media that you can use to promote your business, and test promoting your business on those new media, on a small scale, and for a limited time (preferably while still doing what you’re doing now). If you can find a medium that is at point “c” above, that is ideal. Be creative in your search. Think outside the box.
- Take the media that work well for your business, and increase your budget on them. Discontinue the ones that don’t work for your business.
- Repeat 4 and 5.
If you can observe what media your successful competition is using, particularly if they are repeatedly or continually using certain media, then test those as a priority.
Good luck with your marketing.