A basic Internet marketing formula

There are so many different pieces and options in the world of Internet marketing that it can sometimes be difficult to maintain a well-informed “big picture” outlook.  That’s particularly true when you’re just starting out, swimming in what feels like an infinite sea of IM info and ideas.

At its core, though, Internet marketing isn’t really the complicated.  There’s a simple basic formula that underlies just about everything we do.  After you strip away all of the bells and whistles and start looking at principles, there are three things in which we’re really interested.

Traffic.  In order to make sales, you need customers.  In order to create customers you need prospects.  Traffic is one of the “big three”, you can’t make money if you aren’t connecting eyeballs to your offers.

Conversion.  After you get the traffic, you need to persuade those individuals to make a purchase or to take some other action that puts money in your pocket.  That’s conversion and nothing good happens without it.

Money.  Every time someone makes a purchase or “does the right thing”, you need to make your money.  This is the end goal of the whole pursuit.  How much you make per sale or action matters.

What happens when we put it all together?

Traffic x Rate of Conversion x $/Conversion = Gross Profit

When you get down to brass tacks, it’s pretty obvious how IM works!

Once you have settled on your business, it’s time to start your market research. Again, this step falls into the category of strategy and preparation. Keep in mind that strategy, not investment, is your ticket to success!

OTO (One Time Offer) Marketing

You’ve seen examples of this strategy if you’ve ever taken advantage of a freebie offer. The OTO theory is simple and straightforward: give away a great product for free, and immediately offer another valuable product along with the freebie for a deeply discounted price.

For example: say your Internet business is selling e-book software. You can advertise for a free report on the secrets to creating e-books that sell, and then offer a discount on the software itself when customers take advantage of your giveaway.

Keep in mind, though, that you have to make the free product available even for those who don’t take advantage of your discount price. If you make it difficult or impossible to obtain your freebie, you will lose that all-important trust?the most valuable commodity in Internet marketing.

Some tips to effective OTO marketing:

One-time-offer marketing strategies are becoming increasingly popular in online businesses. As more companies take advantage of this technique, fewer consumers will be interested. You should strive to find ways to make your OTO offer unique or give it an original spin, to make it stand out from all the other offers out there.

Bear in mind that you will likely have to deal with an increase in customer support issues as you implement your OTO marketing campaign. Even if your website contains clear, precise instructions for obtaining your freebie, some of your visitors may still have trouble finding the right link or logo to click. If they don’t see it, they will assume you’re asking them to pay for something that was offered for free. Exercise patience and point them in the right direction, and you will earn their business.

Make sure you are able to accept a high volume of payments. With any Internet business, it is a good idea to have several payment options for your customers. This helps you by not overloading your payment processors with a sharp increase in sales due to an OTO program. Some third-party merchant account services, such as PayPal, will often red-flag accounts that have a sudden increase in incoming funds, and you may be frozen from your account while the merchant verifies that you aren’t running a scam. Having other payment options in place to cover this possibility will ensure you’re still able to do business.

A subscriber list is one of the best ways to announce an OTO campaign. If you don’t already have a subscriber list, it is a good idea to build one before you bring out your OTO program. However, building a solid subscriber list for your newsletter or website takes time. If you don’t have the time to get a subscriber list, but you still want to offer your OTO, you could make the announcement about your program through other partners with the promise to reciprocate for one of their promotions at a later date.

An increase in traffic is good for your business?but it can be bad for your servers. If your product is downloadable, the available bandwidth for your website should also be a consideration. Check with your web service provider and make sure you determine how much bandwidth you’ll require ahead of time. If you’ll need more bandwidth than your server allows, look into an inexpensive file transfer solution such as www.fileburst.com.

In summary, OTO strategy can be an extremely effective marketing technique. Offer your visitors something they would normally pay money for, and give it to them free?then immediately offer something of even greater value at a low price.

Be sure that your freebie and your discount product are directly related (such as the report on creating effective e-books and the e-book creation software). If your sale product is even better and more attractive to your target market than your freebie, your sales numbers will explode!

A Few Good Markets

There are truly thousands of markets you can choose from online, and many of them have millions of Internet users who fit the demographics you’re looking for. Whether the market is tapped or untapped, identifying a niche equates to more, faster profit for you.

Have you considered these niche markets?

Moms. Currently, there are more than 32 million moms online. If you have a mom-friendly product or service, you can tap this enormous market. Moms use the Internet to search for more than baby food recipes and parenting tips! However, you should be aware that most moms are web-savvy and will see through any condescending or intrusive marketing ploys. Make sure you keep it real?don’t misrepresent your products, and don’t let your marketing material sound preachy or highbrow.

Travel. More and more Internet users are booking travel reservations and researching travel-related material online. This year alone, online travel and travel-related leisure sales will reach $78 billion. The travel industry is one of the fastest growing sections of e-commerce, and there is plenty of profit to go around!

China. There is a huge, largely untapped market in China. Over 111 million people in China use the Internet. The downside is that most of them don’t have credit cards. Few Internet marketers have been able to come up with an effective method of doing business with China?maybe you will be the one to change that.

Baby boomers. Everyone knows there are millions of baby boomers in the United States alone. Products and services that appeal to this generation can enjoy enormous success. The baby boom generation is fast approaching retirement age, so products and services that deal with investment, retirement options, and later lifestyle changes are hot topics online today.

The Internet is enormous. This is perhaps the most important concept you need to understand as an Internet marketer. No matter how original your idea, you are going to have competition online. The question becomes then: how are you going to stand out from the crowd and attract business?

The good news is there are many things you don’t need for online success. These things include:

• A massive advertising budget
• Expensive graphic designers
• Making your company a household name
• An elaborate base of operations
• 80-hour work weeks

What do you need, then? You need to work smarter, not harder.

Running with the giants

There are top competitors in every industry. Microsoft dominates software, Google rules search engine technology, McDonalds is the emperor of fast food. However, the Internet is a level playing field, and your company can appear as big and established as you want it to. You only need a fraction of a percentage of the online pie to enjoy business success.

Search engine placement is still the best way to gain exposure for your Internet business. In the beginning of the Internet, the practice of keyword stuffing—placing irrelevant or excessive keywords on web pages to achieve a higher search engine rank—was prevalent. Today, though, search engine technology is far more sophisticated, and there is no “magic” formula to ascend the ranks.

How can you place high on search engines and compete with the top Internet businesses in your industry? All you really need to do is keep it real. Make your website informative, interesting, and ever-changing, and you will score high with search engines.

Today’s “secrets” for top search engine ranking include:

Strive to provide visitors with real, useful, and interesting information that makes your website not only a great selling tool, but a great place to visit and spend some time.

Plant hooks on your pages for the search engines that are related to the information on each page.

Build buzz and word-of-mouth for your business using pay-per-click advertising and other relevant avenues for your target markets.

Getting started

All you need is a computer and a dream

When you choose your Internet marketing business, there are several aspects you need to consider. The wrong business will lead to wasted efforts and a lack of profits—a discouraging prospect indeed.

The first consideration should be your own interests and passions. If you are not passionate about your products or services, your business will not succeed. It’s as simple as that. You must be convinced beyond doubt that your product or service is worthwhile, exciting, effective, and something other people will want or need.

Another reason you need enthusiasm in your corner is your own business stamina. You’ve probably worked at jobs you couldn’t care less about, if only so you could get a paycheck. You may even be working at a job like that now. How long do you intend to stay there? Are you putting your best efforts forth at work every day? If you are not, you’re not passionate about what you do—and you won’t get very far.

Once you’ve identified a business you can generate plenty of passion and enthusiasm for, further consider these two important questions:

Does your product or service fill a need or a demand? Is there a high demand for this product or service, at least in niche markets?

Can you inexpensively attract high numbers of targeted traffic to your website? Are there popular forums, ezines, or websites dedicated to this type of product or service, or used by your target market?

If you cannot answer these questions with a resounding “yes,” you need to go back to the beginning and choose another product or service you’re passionate about.

The best thing you can do to facilitate success as an Internet marketer is to exercise patience and put in the research at the beginning. Don’t invest your time in finding a supplier, setting up a website, choosing affiliates, and putting your marketing machine into motion until you have the three key ingredients in place: passion, demand, and marketing avenues.