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The Online Marketer’s Paradox
“You can never win.” As an online marketer you must accept this fact, actually more than accept, you must embrace it. In marketing, and online marketing specifically, you can never win. However, the ironic thing is that this is what makes online marketing a fun art (and science) to practice. Please don’t get me wrong you can do very well by your business besting your own estimations and beating out competitors, but the win is always only temporary. Offline marketers can obfuscate their results, or lack thereof, with a lot of different reasons why sales didn’t come about during a specific offline campaign. The beauty (or, yes, curse) of online marketing is that from an ecommerce perspective, there is no question what marketing spend drove what revenue.
At Downtown Ecommerce, we are not only online marketing practitioners, but we help our Clients learn online marketing along the way. I speak to our Clients about the “Online Marketer’s Paradox” and particularly to the in-house online marketing staff about the paradox they must accept. This Paradox is evident in the eternal quest for maximum revenue and minimum spend. Unfortunately, more often than not, these variables work to each other’s demise.
Over the past 7 years we have found some great wins where we were able to do both – drive great top line growth while lowering the spend-to-sales ratio – the holy grail of ROI metrics. Often web merchants will refer to this metric as the “AtoS Ratio “(Ad to Spend) or “ERS” which is an acronym for Effective Revenue Share (calculated as Spend/Revenue). A quick note that more savvy marketers have moved beyond spend-to-revenue and are loving the spend-to-net profit world of performance measurement. We are always on the hunt for these situations where you can drive up revenue and drive down marketing spend – we like to call these happy intersections “Nirvana”. When we find these opportunities, you better believe that we take full advantage of them for as long as possible. More often than not these areas present themselves as arbitrage scenarios. Over time other players in the market do wise up and consequently the arbitrage margin narrows or closes altogether. At this point, the time is to go afield and look for new opportunities.
If you can accept the fact that as an online marketer you live in a world where you either didn’t spend enough to capitalize on an opportunity or you over spent, sending good money after bad, you will do just fine. Balancing spend and revenue is your job and it is never easy. Learn to love the fact that you can always do better and that the quest for nirvana is inherent in online marketing too.
Categorised in: Online Marketing
This post was written by DEP Ecommerce Consultants
