Archive for the ‘BUSINESS PERSPECTIVE’ category

Marketing Communication Vs Professional Essays

September 9th, 2009
(Dedicated to Max K, Manhattan)
 
As a PPC agency staff member, from time to time, you may find yourself in situations where you have to adapt to your audience. KYC – “Know Your Customer” as the saying goes. And communicate accordingly – we should add right away. In this particular article we would like to illustrate the above said by analyzing 2 possible presentations of a rather complex issue, i.e. the importance of setting your conversion values in your interface. Namely, we are going to compare 2 different categories: a professional essay and a piece of marketing communication – relative to the same subject matter.  
 
1./ Category: Professional Essay – Level: Advanced 
 
Goal: Illustrate what might happen depending on whether or not you set the right conversion value
 
You can find the first presentation here. In this case the author has to present the concept in an exact and exhaustive way. Within this given framework, we may state that the discussion is kept simple in a special sense: it does not expand to cover cases which are more complex (i.e. storefronts) than what is absolutely unavoidable. Still if you manage to fully understand its message you’ll be equipped to deal with more complex situations. The discussion is advanced also since basic terms and simple calculations are not explained in it.
 
It’s worth asking for which audiences and under what circumstances is this exact and exhaustive discussion appropriate. E.g. if you have to educate future advertising professionals or if you need to demonstrate your own professional values for some reason, it may be absolutely suitable for your purposes. However, the presentation linked-to above might prove too sophisticated and complex in situations where a different kind of approach seems to be advisable.
 
2./ Category: Marketing Communication – Level: Basic
 
You have an audience of some hairdressers in your metro. Either clients or prospects. You need them as clients and simultaneously want to convince them about the importance of setting their conversion values in their interface. However, you don’t have to display your professional qualities since they have gathered (or come to the forum) to listen to you, they trust you and need your advice. What you mean to achieve is that most of the audience gains some correct understanding of your concept provided they listen carefully. Goal: remind them what CPA and ROAS mean and first of all explain why setting your conversion value may be vital. Use a simple, fully explained numerical example. 
 
Important rules are: terms and calculations should be kept simple and explained. Tables, mathematical formulas, external references etc. should be avoided. The level of interest of your audience can be described as follows: they don’t wish to take detailed notes, nor do they want to learn the technique of PPC advertising. What they need is some really easy, still authentic explanation.
 
Find here a possible alternate discussion as it could be posted e.g. in a forum for the shop owners mentioned above.  
 

What Is Your conversion Value?

We would like to illustrate the importance of setting your conversion values by using a simple numerical example. 

In our example, a hairdresser’s shop has two ad groups within its campaign, both aimed at acquiring customers. The first ad group’s theme is hair cut, while the second ad group’s theme is unisex hairdressers. Theme means a subject matter your keywords are grouped around.

In a particular week, the first ad group brings in 200 clicks at $0.50 each. Hair cut being a rather simple theme, only 1 in 20 clicks delivers a customer. The total spend of the ad was $100 and it resulted in 10 customers; in other words, one costumer costs $10. This is called cost-per-conversion. In the same period of time, the second ad group brings in 50 clicks at $2.00 each. Since unisex hairdressers is a bit more specific theme, 1 in 5 clicks brings a customer. In this case, like in the first ad group, the total spend is $100, and it also resulted in 10 customers. The cost-per-conversion, which we sometimes also term as cost-per-acquisition, is $10 in this ad group as well.

Let us compare the two situations with special regard to profitability.

Since the amount spent on acquiring a customer is $10 in both cases, the shop owner may conclude that the two ad groups are equally profitable, even though a click costs four times more in the second ad group ($2.00) than in the first one ($0.50). This may seem reasonable as long as the conversion value is not factored in, as this important metric can completely change the scenario. If the shop owner finds that a customer from the hair cut ad group results in $30 of profit, while a client from the unisex hairdressers ad group results in $40, he may want to set these amounts as the respective conversion values in the ad groups. In this case, 10 customers would generate $300 in profit in the first ad group and $400 in the second. Since the total spent on each ad group was $100, it may be concluded that the return-on-ad-spend (ROAS) is $300/$100=3 in the first ad group and $400/$100=4 in the second group. Based on this, the shop owner may correctly conclude that assigning more of the budget to the second ad group and less to the first one is advisable.

The above example illustrates that while cost-per-conversion is a highly important metric, profitability can best be measured by ROAS. When your advertising is driven by cost-per-conversion, you minimize the amount spent per customer on advertising, but this does not always tell you much about profits. On the other hand, when your attention is focused on ROAS and you designate it to be the driving force behind your efforts, you will optimize the profits derived from advertising—which is closely related to your bottom line. In plain English, it’s well worth watching how much a customer costs you, but what really matters relative to your bottom line is how much can be gained in profits by one dollar spent on advertising. This is why it is so vital to set conversion values in your advertising interface. 

 
In case your agency handles the above questions in any special way you may want to mention it in a brief, well-written closing paragraph. 
 

Conclusions: If you manage to identify the level of interest of your audience and to present your concepts in a corresponding way your clients and prospects will appreciate it a great deal. They will conclude you pay special attention to their needs by addressing their problems in a language they speak and understand. However, finding the right form of communication is often a rather difficult task. It’s much more an art than science and can only be learnt via years of consistent work. Evidently, active participation in public forums is one way to gain experience in this special field.
 
 
 
 

 

 

 

 

No comments »

Posted in BUSINESS PERSPECTIVE

Economics – Turkish Wine For Germany

June 18th, 2009

 

caption

Presentation of Turkish Wine

The purpose of this report is to evaluate opportunities we can identify for the online distribution of Turkish bottled wine by means of an appropriate bi-lingual website combined with an AdWords campaign. The client, a large wine distributor, is located in Turkey proper and eager to find ways to establish its presence within the European Union, with special regard to Germany. They have no previous sales history in this part of the world.

Background

Turkey, along with the former Soviet republics of Georgia and Armenia, was one of the earliest wine producing regions of the world. Modern Turkey is the fourth leading producer of grapes. The country has a number of notable wineries such as Tekel, Sarafin, Doluca and Kavaklidere. Unlike other muslim regions, Turkey lifted the ban on alcohol after the birth of the secular state pioneered by Mustafa Kemal Atatürk after World War 1.

 

Areas of Wine Procution in Turkey

Areas of Wine Production in Turkey

Germany has been the prime target country for Turkish guest workers in the past 40-50 years. Nowadays Turkish citizens in Germany make up a population of approximately 2 million people and the number of German residents with origins in Turkey is approximately 2.8 million. The important aspect for us is that Germany offers plenty of potential buyers for the Client and there seems to be no need for preliminary Content Network campaigns to establish customer awareness relative to Client’s product range and the associated brand names. This fortunate circumstance makes it shorter for us to reach the break even points in connection with initial investment.

General Market Situation

The EU and Turkey are linked by an ambitious Customs Union agreement. Though it does not cover agriculture, various EU Regulations ensure that most types of Turkish wine can enter the EU free of duty, under special tariff preference directives. This translates that the Client does not need to first deliver the products to a Duty Free Zone within the European Union. However, the establishment of one or two depositories for Client’s products in Germany seems mandatory so as to shorten delivery time regarding online orders.

Online Market Situation

Google organic search brings up http://www.turkische-weine.de as the No 1 natural listing for the keyword türkische weine. This simple website links to http://www.partyweine.de, a retailer operated from Hamburg, with a modest supply of white and red wines, rosé wines, and a few other alcoholic beverages including Yeni and Tekirdaq Raki as well as Efes Beer. The site is equipped with a shopping cart, however, your payment options are restricted to PayPal, Visa and Mastercard. The Party Wine web-shop does not display a Privacy Policy or a Return Policy. Its Delivery Terms, hidden under FAQ, are also way too short. Delivery of the products is typically effected via courier services and the delivery fees need to be added to the total price. If you wish to place your order from outside Germany you have to send an email enquiry to receive email information about their terms and conditions. The Party Wine website is in German and does not offer a Turkish version. Even if most Turkish people in Germany must speak German to some degree this solution leads to losing customers as a consequence of possible difficulties in understanding or simply due to national feelings.

Organic and Paid Results for "türkische weine" on Google

Results for "türkische weine"

Brand names of wines well-known among Turks, like Güzel Marmara , Trakya , Agora, Dikmen or Papas Karasi, used as search terms, bring up no sponsored links on the google.de search engine.

The generic search term türkische weine brings sometimes up only one potential competition specialized in Turkish wines, as a sponsored link on the google.de search engine. This AdWords ad is for http://www.tuerkischer-weinversand.de, a well-designed online shop run by an individual from Bochum, with plenty of useful functions. However, even this relatively fine web-shop misses the evident opportunity to offer its contents in Turkish as well.

A Well Designed Homepage

A Well Designed Webshop

Difficulties

Research by means of Google’s standalone Keyword Tool shows that neither the brand names enumerated above nor the generic keyword türkische weine have a workable search volume. It reflects a poor user experience relative to minority related web contents in Germany. Therefore, first off Client should rely on the even more generic adjective terms türkisch or türkische listed as phrase match keywords which have the potential to deliver more than 1,000 impressions a day. Fortunately these search terms only bring up a few sponsored links, mainly language courses or holiday destinations in Turkey.

Conclusions

Online supply of Turkish wine is evidently scarce in Germany as compared to the size of the minority population. Competing websites are either poorly designed or their AdWords campaigns seem to be insufficiently managed. They all miss out on the evident opportunity to offer Turkish contents to their customers.

 

The Break Even Point

The Break Even Points

To start with, client should establish a very small depository in Germany. The website should be bi-lingual, well-designed and multifunctional. Emphasis should be on a few relatively cheap and popular brands. Due to the above problems with search volume the AdWords campaign should be starting with rather generic search terms. After a modest start, a rapid growth can be expected as the news about the web-shop spreads among Turks in Germany. So as to expedite this process, placement ads should be considered in connection with a few minority related Content Network websites.

Based on the above, as an educated guess we can expect to reach the break even points approximately within a year. Since it might be a real economic burden for many SMEs it’s advisable to arrange appropriate finance in due time, if available.

No comments »

Posted in BUSINESS PERSPECTIVE