Marketing Demystified: How to Find Your Profitable Channel
Starting a small business is like climbing a mountain: You can’t see what the end result will be, and it takes intense committment and effort to keep going. Nearly every small business faces the challenge of a lack of visibility. While large organizations have the brand recognition and resources to rely on large-scale advertising and marketing campaigns, small businesses must find a balance between raising awareness and using their limited resources carefully. With so little time on their hands and so many options to consider, small business owners frequently struggle to know which marketing efforts to focus on.
Inbound vs. outbound
Marketing channels can be grouped into two broad categories: inbound and outbound. Before the internet, outbound marketing was the primary method for gaining visibility. Think of outbound marketing as an interruption: A potential customer is going about their day, not necessarily looking for a product, but then they see a billboard or advertisement from your business.
Inbound marketing, on the other hand, seeks to provide the information a consumer is actively looking for. Think about the last time you needed to find a restaurant for a night out with friends. You probably searched for restaurants near you on Google and then relied on aggregated reviews to make your decision. The goal of inbound marketing is to make sure your business shows up when a potential customer searches for relevant terms.
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How to pick your channel
Within inbound and outbound marketing, there are several channels to choose from, two main ones being SEO and PPC. So how do you know which marketing channel will be effective for your business? To make this decision, you’ll need to identify two key data points: where the bulk of your target market lives and how competitive that space is.
Search engine optimization is the process of tailoring the content on your website so you show up in organic (nonpaid) Google results. This channel is most valuable when there are a lot of consumers searching for the types of products or services that you sell, and a limited number of websites targeting your desired search terms. Ranking in Google is also more economical for the long term, because you aren’t paying an ad provider every time a potential customer clicks through to your website.
Google AdWords (soon to be Google Ads) is the most common platform for pay-per-click (PPC) advertising. AdWords is a powerful tool to get your business in front of an audience quickly, because you are paying to show up at the top of your desired search results. Like SEO, PPC is most valuable when there is high search volume for your desired keywords and minimal businesses competing within the ad space. The more businesses are bidding on a keyword, the more you pay for each click on your ad.
Keyword research is the key to deciding if SEO or PPC is the channel to focus on. Tools like Ahrefs and SpyFu help you identify each keyword’s search volume, average cost per click (CPC), and how difficult it would be to rank organically. To pull this data, follow this simple process:
1. Find three competitors.
Identify three business competitors that have an established web presence. A good competitor will have been in business for several years and have a built-out website. Copy the competitor’s homepage URL and paste it into one of the keyword tools. The tool will then provide a list of all of the keywords your competition ranks for. Export the data of all three competitors.
2. Sort the data.
Combine the lists you just created in Google Sheets or Excel. Remove any duplicate keywords. Next, you can use some simple formulas to quickly identify the keywords with the most value. Start by multiplying search volume by CPC. This will generate an SEO benefit score. The higher the search volume and the higher the CPC, the more valuable it is to rank for that keyword. Once you have the benefit score, look for keywords with the highest benefit but lowest difficulty score. These are the keywords that will bring you the most revenue and will rank the fastest.
3. Evaluate the data.
Now that you have your data, answering some basic questions will help you determine whether to pursue SEO, PPC or both.
Are customers searching for your product or service?
Look at the search volume column and the number of potential keywords. If your keyword choices are limited and there are fewer than 1,000 searches per month, you’ll likely find a larger audience through different channels.
How competitive is the space?
The higher the CPC, the more businesses you will be competing with to get your ads seen. The higher the difficulty score, the longer it will take for your webpage to rank. If you see a lot of keywords with a high CPC but with a low or moderate difficulty score, SEO is your best bet. If you see high difficulty scores but a low or moderate CPC, PPC is a good starting option.
Will you see positive ROI?
Not every person who comes to your website will convert to a paying customer. If the search volume isn’t high enough to yield enough paying customers to pay for the expense of the SEO work, it won’t be a viable long-term strategy. The same goes for cost per acquisition or the amount of ad clicks you pay for until you get a paying customer. You can determine this with your average CPC, average conversion rate and the price of your product.
Social media can be an effective marketing channel if your industry has a wide social presence or your target demographic has a large social presence. For example, a 2017 benchmark report indicated that the apparel industry had one of the best ad click-thru rates (1.24 percent) and one of the lowest CPCs on Facebook (45 cents).
Social advertising platforms also allow you to advertise to your target market even if they aren’t actively searching for the solution you offer. This can be particularly effective for B2B companies focused on emerging technology. Facebook allows you to create an audience based on demographic data and interests – or simply input a list of your current customers, and Facebook will create a look-alike audience to target. Similarly, LinkedIn allows you to target individuals with the ideal job title, industry and job experience.
To determine if social media is the best channel for you, evaluate CPC and audience size to determine if you will see a positive ROI.
Event marketing is a powerful channel for getting your business in front of your desired audience while they are actively gathered in one place and focused on improving their business. Research how many conferences your target industry holds, how many attendees there are, and how much it will cost to set up a booth. Depending on the industry, event marketing can yield a higher ROI than digital marketing when there isn’t enough awareness or search volume for your product.
What about content marketing?
Content marketing is the great unifier of the channels listed above. Regardless of the channel you choose to market your product, you will need good content to be effective. Luckily, by identifying and focusing on your most profitable channel, it will be easier to focus on creating the content you need to be successful. There is a plethora of tools available to help with your marketing. In particular, you’ll need tools for keyword research and analytics, such as measurements of website traffics and which pages are converting. You’ll also want to look into tools for content creation, whether you need to find a network of freelancers to write for you, an editor app to improve your own writing, or a design platform to make your content look good.