Not only are marketers re-allocating their budget from offline to online, they’re feeling the drive to maximize their immediate ROI through Conversion Rate Optimization. Those that were considering working with WiderFunnel in the past six months now have a tangible sense of urgency to get started.

Will the discipline of optimization stick?
As digital marketers we hope that the new-found ROI religion will become a permanent part of organizational culture rather than a quick fix to stave off the Recession. When the comfortable times return, will marketers return to the old glitzy media, or have we tipped the balance permanently?

What do you think? Is your organizational culture ready to embrace measurability as a strategic fixture? Please leave a comment below.

Today, MarketingVOX summarized the findings of an Econsultancy report. Not surprisingly, it shows that B2B marketers are shifting their spending away from CPM-based online ads to more measurable and accountable Cost-per-click (CPC), Cost-per-lead (CPL) and Cost-per-acquisition (CPA).

CPC alone isn’t enough, though. You need to be tracking through to conversions and then improving that conversion rate with Conversion Rate Optimization experiments to ensure an ongoing improvement in your Return on Ad Spend (ROAS).

Here are two recent B2B success stories with dramatically improved lead generation results from PPC advertising:

• Business Objects SAP improves landing page conversion rate by 32.5%
• Merchant Warehouse lifts phone call and online form lead generation conversions by 15%

“From WPP’s perspective, analytics, measurement, optimization are increasingly important to our clients,” said Mark Read, WPP’s director of strategy and CEO, WPP Digital, as more than one-fifth, or about $4 billion, of WPP’s $15 billion in worldwide revenue now is derived from consumer insight.

This is excellent news for client companies that rely on their ad agency for marketing advice.

WPP-owned agencies are involved in the deal include G2, OgilvyOne, RMG, Wunderman, Enfatico, Schematic, Group M, 24/7 Real Media, Kantar and Enfatico – and more than 500 WPP executives will be trained in Omniture technologies.

“The old recession playbook won’t work this time around” writes the author, David Court. And “those who follow the survival techniques of past slowdowns risk betting on the wrong markets, customers, advertising vehicles, or sales approaches.”

Now I am paying attention.

In this excellent analysis, the author tells us that this time, the old “doubling down” on large, historically profitable customers, geographies, and market segments will be ineffective.

Also, emphasizing again traditional media (i.e., television and newspaper ads), while cutting back on new advertising vehicles will not work either.

What marketers need to do instead is “toss out those historical expectations and focus on the emerging pockets of customer profitability” by:

1. Identifying anew who and where the profitable customers are, and

2. Using effectiveness to prioritize marketing and sales vehicles for reaching them

This means that marketing and sales executives must re-prioritize geographic markets and customer segments “at every shift of economic fortune.” And marketers with access to micromarket data have even more opportunities to enhance profitability.

Also, marketers must prioritize advertising vehicles based on better understanding of the effectiveness of different forms of advertising than many marketers have today.

In other words, only by looking at the conversion rate (i.e., the effectiveness of different forms of advertising) by micromarket will marketers know how much to invest on each tactic and each market.

Marketers “who assume the reach and cost of a vehicle serve as a proxy for its effectiveness, ignore the vehicle’s quality—that is, its ability to influence customers.”

Yes, in the end, only the sales conversion rate matters when assessing the value of the tactic (the article provides insights on how to do this even for the ‘least measurable’ of media).

In other words, from an online conversion rate optimization perspective, companies can maximize profitability by “focusing on micromarkets less sensitive to prices while also offering discounts or preferential pricing elsewhere to drive sales volumes.”

You can accomplish this by creating separate and distinct campaigns driving to different landing pages where you can test out not just layouts and creative, but the complete value proposition, as well as pricing offers.

Google will be selecting several web sites to receive a free Conversion Optimization experiment with Google Website Optimizer.

You can sign up for free here.

While I think Forbes may be premature in it’s optimism that online advertising will avoid feeling a Recession, it’s our belief that Conversion Optimization at least should be counter-cyclical.

Online marketing is clearly more measurable and accountable than offline and deserves to have an increasing proportion of advertising spend. But that also means that it will get even more competitive and expensive as the large players pour more effort into it. During difficult times you need to spend more time sharpening your axe to increase your competiveness.

Ed note: What’s the best way to sharpen your internet marketing axe? Try Conversion Optimization.

IMHO these acquisitions represent not so much industry consolidation as a growing awareness (some might say ‘groundswell’) of the opportunity that conversion optimization presents to businesses, large and small, to “do more” with the expensive but anonymous traffic that is already on their websites. And — bonus! — it’s all measurable: it’s all about what customers *demonstrably* prefer and not what management or the web designer *likes*…

But (isn’t there always one?), there are real issues around execution.

Landing page optimization is not about the technology – it’s about business. There are many wonderful online testing tools, including free Google Website Optimizer, which allow marketers to run experiments on their web pages and determine which layout, offer, creative and copy combination deliver the highest number of conversions.

The execution issues revolve around…

Strategy : knowing where to begin; what test to you start with; what to test after; should you run A/B tests or multivariate, how to make sure the experiments do not take months to deliver a winner; what to do if there isn’t a concrete winner; how soon to run the next experiment…

These issues cannot be ‘winged’ and must be handled with professional care.

Processes: how to align the web page objectives to the overall business goals; how to integrate demand-generation activities to the optimization of the landing page; how to get buy-in from Sales; how to categorizes segments and traffic sources to cost-effectively deliver content targeting; how to locate key conversion funnel steps… And then, who actually *does* the creative work (wireframes, graphic design, layouts, copy and content, mockups, etc), who takes care of the technical installation and QA…

These questions call for repeatable and scalable services to deliver measurable positive results. Again, these processes cannot be ‘winged’.

Resources: companies try to figure out if they can we leverage existing skill sets (But how many companies have idle marketing resources who just happen to have experience with testing and testing processes…?). Other companies try to find external resources experienced in identifying, defining, and creating tests (emphasis on “experienced”)

There are only a handful of marketing services companies around the globe who know a thing or two about landing page optimization and how to deliver business value… (and yes, WiderFunnel definitely is one of them!)

Budgets: landing page optimization is new, and organizations do not have line items in the budget to pay for it. So the organizational issue becomes determining which department pays for it and how much should be allocated to optimization…

The good news is that sophisticated business people understand that the lift in the conversion rate will most likely more than pay for the cost of testing (at least that is what we have seen with pretty much all of our clients, where the cost of testing has been offset by the improved results many, many times over!)

Exciting times for all of us — sophisticated business people who understand the power of optimizing web pages for improved conversions!

Tom Leung

Tom’s session is titled “Google’s Proven Truths About Online Marketing” and is sponsored by WiderFunnel, of course.

The event will be highly interesting and interactive and will sell out.

I’m not bluffing about that. We sent out an email invitation to a few (well, more than a few) of our close contacts yesterday and we just found out that they’ve already sold 25% of the seats within the first 24 hours. The event organizers told us that they “have never seen so many come in so quickly.” We may have to get a bigger room.

You can get all the event details and get tickets before they’re gone at bcaim.org.

AND, almost as exciting as meeting Tom, WiderFunnel will be giving away a free full-service Conversion Rate Optimization Experiment (up to a $10K value) as a door prize! Yes, full-service means we take care of everything from experiment planning to execution and results analysis with no additional workload for your hard-working marketing and IT teams.

You don’t even have to be at the luncheon to win, so sign up to win a free Conversion Rate Optimization Experiment now.

We often get asked about the differences between an analytics tool and an optimization tool. If anyone still seriously questions the value of optimization, this acquisition demonstrates it. The answer: $65 Million.

As we always say, the analytics tool is for diagnosing the problem and the optimization tool is for finding the solutions. We at WiderFunnel have experience working with both Omniture and Offermatica – and welcome the acquisition as a great step forward in improving marketing effectiveness.

The tighter integration of these tools is great news for Omniture and Offermatica customers!

To read more, check out what Anne Holland, the guru at MarketingSherpa has to say at www.marketingsherpa.com/article.php?ident=30010 … and you can then read my comments, which she also published on her blog, at
http://www.marketingsherpa.com/article.html?ident=30023