Online Marketing. Marketing and E-Commerce subject at the International Master in Industrial Management. Guest speaker: Francisco Hernández Marcos Universidad Politécnica de Madrid Politecnico di Milano Kungliga Tekniska högskolan

1. Online Marketing
Marketing and E-Commerce
International Master in Industrial Management
Francisco Hernández Marcos
fran.me
Madrid, 20th January 2012

2. About me SHAMELESS
SELF-PROMOTION
Education:
Universidad Politécnica de Madrid, UNED, London
Business School, University of Chicago
Firms I worked for full-time:
Abengoa, McKinsey&Co, ABN AMRO, Real Madrid C.F.
Entrepreneurship: Crisalia
Consulting requests (Social Media & Internet):
francisco_hernandez@11goals.com
Full profile:
linkedin.com/in/franciscohm

3. Two key questions when doing E-Business REMINDER
How do I make money
from my website?
(Business Models, day 1)
How can I market
my website?

4. Agenda
 Online advertising
 Affiliate programs
 Referral marketing
 Email marketing
 SEO
 Content marketing
 Online public relations
 Social marketing (next session)
 Fake marketing

5. Online advertising industry map
See definitions in “The Online Advertising Technology Marketplace”
Source: Progress Partners

6. Pricing models
Type Description Comments
•Advertiser pays a fee every • Have to measure impressions.
time the ad is shown • CPM: Cost per thousand impressions.
PPI • Ej.: Brand awareness/building.
(Pay per impression)
•Advertiser pays a fee every • Have to measure clicks (both sides).
time the ad is shown AND • The network work to target customers who click.
PPC clicked • CPC: Cost per click (Flat or Bid).
• CTR: Click-Through-Rate.
(Pay per click) • CPC=CPM/1000*CTR.
• Ej.: Simple transactional business.
•Advertiser pays a fee every • Have to measure conversions (both sides).
time the ad is shown AND • The network works to target customers who convert.
PPA clicked AND a target action is • Integration between Ad network and landing website.
• CPA: Cost per Action.
(Pay per action) carried out by the user • CPA=CPC*Conversion Rate.
(typically a purchase) • Ej.: Transactional business where client targeting is
valuable
•Advertiser shares part of the • Have to open books to advertiser.
revenue generated by the ads • Short-term or Long-term revenue.
Revenue • Sometimes it is considered a type of PPA.
• Ej.: Transactional business where client value over time
Sharing is important, and advertiser plays a role in identifying it.

7. Agenda
 Online advertising
 Google AdWords/AdSense
 Mobile advertising
 Affiliate programs
 Referral marketing
 Email marketing
 SEO
 Content marketing
 Online public relations
 Social marketing (next session)
 Fake marketing

8. How does Google Search present results?
Sponsored results:
•Pay
Organic results:
•Free
•Not exist if not in the first 5 spots
If you are well positioned in
the organic search (SEO)
you do not need to pay
(SEM)

9. Contextual Ads

10. AdSense (offer your website to Ad Network)
Offer your website to Ad Network

11. Google Insights / Google Trends
How popular are your keywords of interest?
Relative
scale
Similar system:
Google Trends
www.google.com/trends
Source: http://www.google.com/insights/search/

12. Google AdWords
Estimating Keyword Search Volume
Source: https://adwords.google.com/select/KeywordToolExternal

13. Is EUR 0,50 cheap or expensive?
Google AdWords Depends on:
Estimating cost and outcome of campaign •Conversion Rate
•Product/Service gross margin
•Commercial alternatives

14. Keyword auction system
For each keyword or keyword combination=> Second-price auction system
with combined criteria: 1. Bidding price 2. Relevancy for the user
Hal Varian
Chief Economist
Google Inc.
Watch this video: http://www.youtube.com/watch?v=qwuUe5kq_O8

15. EXAMPLE
Google AdWords
Inserting ads

16. EXAMPLE
Google AdWords
Outcome, managing ads

17. Agenda
 Online advertising
 Google AdWords/AdSense
 Mobile advertising
 Affiliate programs
 Referral marketing
 Email marketing
 SEO
 Content marketing
 Online public relations
 Social marketing (next session)
 Fake marketing

18. Mobile advertising industry map
Source: Progress Partners

19. Online Advertising
Definition
“Ads+online” (we have focused on website display ads)
Key points
o Select the right keywords or segmentation.
o Always measure results.
o Send clicks to a landing page as relevant to the content of the ad as possible. You
would convert more AND you could lower the price of the auction.
o Make many campaigns changing wording, images, segmentation, etc. Manage
dynamically all those campaign so that you keep only the most profitable.
o Spend little money at the beginning, and only escalate your spending when you are
sure the conversion funnel works and is profitable.
o Learn from testing, extract general conclusions you can use in the future.

20. Agenda
 Online advertising
 Affiliate programs
 Referral marketing
 Email marketing
 SEO
 Content marketing
 Online public relations
 Social marketing (next session)
 Fake marketing

21. Amazon Associates
• Since 1996
• Long-Tail concept
too
• Multiple integration
tools, even APIs.
affiliate-program.amazon.com

22. Bible Gateway
Affinity between a
website dedicated
to the Bible and a
Christian publisher.
www.biblegateway.com

23. Affiliate programs
Definition
“a business rewards one or more affiliates for each visitor or
customer brought about by the affiliate's own marketing efforts”
Key points
o One step above the concept of mere advertising. More integration and alignment, longer term.
o Little-intrusive marketing. Users may thank the website for searching interesting items to buy
around the topic of interest.
o Pricing: Most frequently is revenue sharing, typically paying per sale; but it can be PPC or PPI.
o Success determined in great par buy i) public affinity/niche or ii) contextual ads
o Multi-Tier programs (affiliate gets rewards for his clients and the clients coming from the
affiliates he brought in, and the clients of the affiliates his affiliates helped to bring in…
o Very popular in betting, adult websites, and file-sharing.
Source: Wikipedia; others

24. Agenda
 Online advertising
 Affiliate programs
 Referral marketing
 Email marketing
 SEO
 Content marketing
 Online public relations
 Social marketing (next session)
 Fake marketing

25. DropBox
• Two-sided incentive:
more storage for the user
who reefers, and for the
user who accepts.
• Increased signups by 60%
• 2.8 mill. referral invites in
about a year.
www.dropbox.com

26. Tuenti
• Exclusive access by invitation.
• Reward for the sender:
improves her social network.
• Reward for receiver: only way
to signup.
• Limited number of invitations:
you select better who you
send an invitation.
• Smart strategy: Tuenti grew
concentrically so that
interaction was always high
(low-interaction social
networks die).
www.tuenti.com

27. Referral marketing
Definition
“structured and systematic process designed by the website with
the mission of promoting products or services to new customers
through referrals, usually word of mouth”
Key points
o Works better for superior products, specially if they are innovative and the user needs to make an
effort to use the product (change his current brand, learning curve, etc.).
o Referred customers usually are more loyal and profitable.
o Think it twice before offering money as a reward; the user can be concerned about feeling he is a
salesman for the website.
o The “best” rewards can be virtual items or simply the pleasure of being seen as a pioneer in the eyes
of friends.
o Think of trying to embed an limited-in-time offer tied to the acceptance of the referral email: extra
features, discount price, etc.
o Limiting the number of invitations can make a lot of sense. It may add value to the act of referring.
Source: Wikipedia; others

28. Agenda
 Online advertising
 Affiliate programs
 Referral marketing
 Email marketing
 SEO
 Content marketing
 Online public relations
 Social marketing (next session)
 Fake marketing

29. idealista.com
• Value-added services that turn
a proactive, punctual contact
into a passive, continuous
relationship.
o Alerts (predefined searches,
changes on favorite items,
etc.)
o Newsletter.
o Contacts between users.
www.idealista.com

30. Email marketing
Definition
“marketing a commercial message –directly or indirectly- to a
group of people using electronic mail”
Key points
o Three types: Direct emails, Newsletters, and Transactional emails.
o There are many software tools that allow to measure the impact of these type of
communications: bounce rate, % received, % opened, % clicked, % converted, etc.
o Few things annoy users more than spam. It is not what you think it is spam, but what they think!
o Prevent being classified as spam buy security systems: easy unsubscribe, remind the user she
subscribed, provide a postal address, reliable landing pages, not big images, ask reader to label
you as “safe sender”, personalize, pace sending, etc.
o Test concepts with a small user base, measuring unsubscriptions and other parameters in order
to tradeoff between reach and conversion.
o For huge communications (buying database): are you prepared for so much traffic and sales?
Source: Wikipedia; others

31. Agenda
 Online advertising
 Affiliate programs
 Referral marketing
 Email marketing
 SEO
 Content marketing
 Online public relations
 Social marketing (next session)
 Fake marketing

32. Why Search Engine Optimization (SEO)? EXAMPLE
Source: comScore

33. How does Google select and rank information?
Organic search
Each keyword or combination of keywords: =>
Relevancy score algorithm (PageRank) using the
following information:
• Incoming hyperlinks (quantity and quality)
• ~200 variables: outgoing hyperlinks,
content coherence, update frequency,
adherence to programming standards,
load time, etc. etc.
More info: http://en.wikipedia.org/wiki/PageRank

34. Softonic • Founded in 1997.
• Clear SEO strategy.
• Revenue model: has changed but now it
seems to be mostly advertisement.
• #1 software download website in the
World
• 112 mill. Unique users per month (Dec
2011) → #1 Spanish website.
• Revenues: EUR 32 mill. (2010)
• EBIT: EUR 15 mill. (2010)
www.softonic.com

35. Top tips for a good SEO strategy EXAMPLE
1. Find the Best Keywords
2. Discover What Your Competitors are Doing
3. Write Very Linkable & Sharable Content
4. Optimize Your Title and Meta Tags
5. Optimizing Your Headings and Subheadings
6. Use Title and ALT Attributes
7. Optimizing File Nomenclatures
8. Tell the Search Engines What to Index
9. Feed Search Engines Static and XML Site Maps
10.Use Checklists and Validators
Best way to “be” an expert: Type “SEO” on Google and spend hours reading…
Source: Top10SEOtips.com

36. Search Engine Optimization
Definition
“process of improving the visibility of a website or a web page in
search engines via the "natural" or un-paid ("organic" or
"algorithmic") search results”
Key points
o Be patient, be patient, be patient, be patient… (e.g.: Softonic)
o “The only place where success comes before work is in the dictionary”. SEO is the marathon of
online marketing.
o Very cheap marketing.
o All tips and strategies you have to follow are widely available online, and are common sense. No
hidden secrets.
o Watch out black-hat SEO strategies: link farming, cloaking , etc.: BMW was banned by Google for
some time!
o Does it really payoff to externalize SEO to an agency? Incentives are not the same (moral hazard).
They may think short term while you should think long-term. External talent can be good if you make
it sure to control/understand everything it is done, or establish penalties by contract.
Source: Wikipedia; others

37. Agenda
 Online advertising
 Affiliate programs
 Referral marketing
 Email marketing
 SEO
 Content marketing
 Online public relations
 Social marketing (next session)
 Fake marketing

38. idealista.com
• Real Estate reports based
on ~1 million listings
www.idealista.com

39. Content Marketing
Definition
“all marketing formats that involve the creation or sharing of
content for the purpose of engaging current and potential
consumer bases”
Key points
o Works better if exclusive content coming from internal database mining.
o Good combination with PR in traditional media or social media.
o Try not to divert much from your brand’s values. Maybe the content you
publish attracts a lot of attention but it may not be the sort of attention you
need.
o Rankings: that simple thing that has a phenomenal appeal to the users.
Source: Wikipedia; others

40. Agenda
 Online advertising
 Affiliate programs
 Referral marketing
 Email marketing
 SEO
 Content marketing
 Online public relations
 Social marketing (next session)
 Fake marketing

41. eBay
Move systematically interesting stories to traditional media
• “The frequently repeated story that
eBay was founded to help Omidyar's
fiancée trade Pez candy dispensers
was fabricated by a public relations
manager in 1997 to interest the
media. This was revealed in Adam
Cohen's 2002 bookand confirmed by
eBay” (Wikipedia)
• eBay has spent years promoting
stories such as:
- “Buys a USD 50 mill. private jet on
eBay”.
- “Brand new Ferrari on sale at a
current price of USD 1”.
- “Sells his brain on eBay”
- Etc. etc.
www.ebay.com

42. Facebook against Google
Send negative stories of your competitors to mass media
Read the whole story: Bloomberg

43. airbnb
Celebrity invests/promotes a website • As of today, Hollywood
star Ashton Kutcher has
~11 mill. fans on
Facebook, and ~9 mill.
followers on Twitter.
• Invested on and promoted
Ooma (2007), airbnb
(2011) and Gidsy (2012).
www.airbnb.com

44. Online Public Relations
Definition
“practice of managing the flow of information between an
organization and its publics” (applied to online business)
Key points
o Most startups begin promoting a beautiful story about why the founder(s) decided to launch the
service. Nobody says: “I spent 3 months crunching numbers and I saw this business opportunity”.
o Some websites are great sources of marketable stories (e.g. Classifieds, Social Networks, etc.).
o Usually cheap, specially if you pay a celebrity with equity (try not to regret later about the amount of
equity you have given away) or are able to manage PR by yourself.
o Not only celebrities, successful entrepreneurs with blog audience can be very interesting too: smart
capital + endorsement + promotion.
o At a small scale: create a network of fellow entrepreneurs who frequently talk about each other’s
projects. Pay favors with favors.
o Other tactics: shit the big player, litigate, get sued, small-blogger relations, etc.
o PR is an art, hire a great professional if you can.
o Negative PR can damage yourself.
Source: Wikipedia; others

45. Agenda
 Online advertising
 Affiliate programs
 Referral marketing
 Email marketing
 SEO
 Content marketing
 Online public relations
 Social marketing (next session)
 Fake marketing

46. “Buy Real Marketing”
www.buyrealmarketing.com

47. Fake Marketing
Definition
“Using external services or methods to achieve final marketing
goals in a way that does not serve the indented benefit for the
company”
Key points
o Unethical. Unreal.
o Short-term strategy that usually hurts the company in the long-term: search engines would
detect it, social networks know your followers are fake, etc. etc.
o Watch out! Some marketing magicians can be using them to deliver good results.
o I know a case a someone who was about to buy a website for EUR 4 mill. and it seemed the
traffic was fake traffic.
o How to detect fake marketing: due diligence, in-depth analysis of analytics, smart Q&A with
website marketers, etc.
o Aggressive advertising can be a sort of low-intensity fake marketing.
o Come on! You already know how to do it without cheating! 

48. Agenda
 Online advertising
 Affiliate programs
 Referral marketing
 Email marketing
 SEO
 Content marketing
 Online public relations
 Social marketing (next session)
 Fake marketing

49. Thanks!
Francisco Hernández Marcos
fran.me
@franciscohm