At 12:11 PM 5/14/1998 +1000, Frank Lee so eloquently stated:
>Rainmaker wrote:
>>
>
>> IMO, if you don't have a budget for promoting a site, don't build
>> it.
>>
>> He goes on to say that a company should budget $40,000 for
>> advertising the first year if you want to be a serious contender.
>> I agree with him.
>
>I'm not sure I'd agree with the $40k figure, as it really depends on the
>defined objectives of the site and where it fits within the overall
>communications strategy, the target audience and what their desired
>action is, etc. (Can't think why I didn't respond to Adam's posting on
>this - must have been too busy).
>
Uh, maybe because you aren't on that list ;-}. He posted this to
my E-Tailer's Digest which is dedicated to retraining only --
both on- and off-line. It wasn't posted to Adam's IADL.
>My experience, which has been born out in my time here at IBM, is that
>as a rule of thumb you should devote 30-40% of the total site budget to
>drive-to-web activities.
>
This holds true for IBM. But, it also seem to be what most
people are spending. If it costs $900 a year to host a site
plus $100 to register it and the site is developed by somebody
working in his/her garage (analogy to the early days of PC
development), then the total expenditure for promotion would be
$300 - $400. Which of course would not do much for branding,
never mind driving traffic. Of course, as you stated below,
nobody values time as a cost.
Adam put a $ amount on the first year expenditure since we all
recognize a lot of sites are self-developed. Rather than take
this issue out of context, let me tell you what the Question of
the Week was, as it would apply to folks here:
"Smart advertising is critical for success in any business. If
we look at Todd Mogren's post we see Coastal Tool & Supply spends
between 3.8 - 4.2% of sales (on-line) on advertising, which is in
line with guidelines of 3-5% of sales. Yet folks who develop
sites on the Net don't believe you need to spend money on
advertising. This week's question is:
1. What do you believe should be spent on advertising (as a % of sales)?
2. Does that amount differ for a physical store vs Web site?
3. What should a start-up spend on advertising a Web site
initially? The first year?
4. What should a start-up spend on advertising a physical store
initially? The first year?"
Coastal is the company that spends $50k annually and recoups
$47,000 from co-op advertising and generates $100k - $110k per
month in sales from the Net.
>I agree there is much you can do yourself, but as George has pointed
>out, it takes time. And time is valuable. If your time is worth, say,
>$80 an hour and you spend 3 days a week on such activity, it's costing
>you $8,500 a month. And as George has also pointed out, you'd be better
>off spending that money on paid advertising, whether online or
>dead-tree.
Now, if we project that $8,500 a month you need to spend $2.550 -
$3,400 per month on promotion, which is either out-of-pocket or
time. If time, it is 32-42 hours a month or 4-5 days.
>>
>> I know that's not what you want to hear, but it is a reality.
>>
>> George
>>
>
>I'm afraid I concur with George. But then, in matters marketing, I find
>that I usually do <g>.
>
Funny how thing work out that way eh?
George
_______________________________________________________
George Matyjewicz, C.M.O. mailto:[EMAIL PROTECTED]
GAP Enterprises, Ltd. http://www.gapent.com/
Moderator of E-Tailer's Digest http://www.gapent.com/etailer/
Your Resource for Retail on the Net
MYWEB - Marketing Your Web
mailto:[EMAIL PROTECTED]?Subject=MYWEB_Info
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