Determining ROI for online advertising

In thinking this week about paid advertising, I've been thinking about my own experiences with paid advertising... not from AdWords or anything like that, but rather direct advertising on my site, and how that's worked with the companies I've been trying to work with.

When I got Busan Awesome started up and rolling, there was a point in time (actually a little later than I should have done) where I decided to contact some local businesses in Busan to advertise on my site. I started with restaurants, bars, doctors, and dentists who cater towards the expat population in Busan, based on who already had adverts on other expat websites.

The biggest problems that I had (that I did not foresee) were:

1. bars/restaurants, etc wanted to pay under the table by transfer to a Korean bank account (which I didn't have anymore), and
2. bars/restaurants, etc were stuck with the idea of "pay per click" on the advertisement, rather than impressions or other methods of determining ROI. 

While the first point posed a problem without a good answer, I'm going to discuss the second problem: determining ROI.

An ad for my website on a partner site.
How effective can it be?! If it weren't offered to
me for free, I definitely wouldn't have paid for it! 

My website is a review-based city guide website that caters to the expat that's only there for a year, or a traveler that's there for a week or so, that wants to find some cool places to go, and cool things to do. We probably already have reviews for every bar/restaurant/doctor/dentist who we would want to target, so the way I see it, for them, having an ad on our site is more of a "stamp of approval" that it's a cool, good place to hang out in. Therefore, I thought a per-impression method was a good way to determine success.

On the other hand, the bars/restaurants/etc all tended to want to track clickthroughs. They thought that if someone saw their ad and were interested, they'd click on their site. I thought that didn't make that much sense - I mean if I see an ad up for a bar on a city website, I'll maybe click on it to get the hours, but I'll tend to note that it exists, and kind of add it mentally to my "bars to check out" list, rather than click through to their website.  

So who was right? 

I think we both were right and wrong at the same time. That was a few years ago, though, and while now I'd say I know about a lot more factors of success, I still don't have a solid formula for determining ROI in a situation like this. 

There are lots of good articles out there discussing factors that you can take into account when determining ROI. On the other hand, there is no definitive recipe that exists for knowing what you're actually getting.

Take my situation that I described above for example: 

The bars/restaurants are right in that a clickthrough can definitely say "this person was interested in seeing my site." However, they're missing out on the people who get the mental affiliation between the bar/restaurant and the city guide site. Customers might say (albeit maybe not in this language): "oh yeah, they advertise on Busan Awesome. I like that site and trust their recommendations. I'll check out that bar, even though I've never clicked on the bar's website." 

So many ads! How could you not
have voluntary banner blindness?

Plenty of customers, however, could come to the site and totally ignore the ads. I know I often do. It's Banner Blindness, and there's not really a way to combat it, other than cleverly placing advertisements within an article or in some other way (such as a text link that fits into the article). 

So how DO you determine ROI from advertising?

I read a Fast Company article that talked about a study that Adobe conducted that showed that 88% of marketers said that they weren't confident that they could effectively measure ROI on an advertising campaign. That's huge! 

That same Fast Company article sites that sales conversions, value of increased traffic, and depth of
engagement are three ways that you can actually measure and determine ROI. I agree with them - those are very measurable, and that captures a big chunk of the ROI picture, but not all of the picture. 

Off the top of my head, I'm thinking about people who don't buy now but buy later, and the 'silent majority.' But still, Fast Company's list works... for companies that can measure that kind of thing.

What about the bars/restaurants that I'm trying to target? How do they measure sales conversions, other than surveying customers and asking, "how did you hear about us?" (but even then, maybe it was seeing an ad on a trusted site that brought them to the restaurant, even though it wasn't how they first heard about the website)? How do they measure increased traffic, when I already argued above that just because someone didn't click through, doesn't mean they didn't see the ad? And who actually engages with a bar/restaurant website? 

So my takeaway: 

I think the way that I need to approach advertising in the future is from a "how can I help you?" standpoint. Don't just offer an ad; offer a partnership, with posting specials, advertising some of the bar/restaurant's events, and helping out on Facebook or Twitter with some of their customer engagement. ROI still won't be able to be measured per se, but at least it will touch more people in a deeper manner. 

The Death of Facebook (or Why Google is Way Better at Everything)

(I promise this will be my last "Death of..." article!)

The article in The Economic Times (India) "Why you should look at Google and not Facebook as a model to stay ahead," by Vivek Wadhwa, really struck a note with me. 

Google is nice.

The article asserts that Google has built a healthy company by setting aside shares, and has built Google Fiber and Google's wifi balloons. They're making the world better.
tremendous goodwill by doing things to build real communities. They have community-betterment projects like

This goodwill has enabled them to stay in a positive light in the eye of many groups of people. When Microsoft got big, the author argued, there was a lot of general dislike and distrust that comes along with Big Business. Google has grown and is (relatively) loved.

The author was saying that Facebook is dealing with a lot of pressure from shareholders, and is really trying to squeeze some money out of this product that they built. The thing is, though, Facebook wasn't built with money in mind, at least at first.

Throughout my MBA program, I've thought a lot about businesses, and especially internet businesses. This is a crude simplification, but there are either businesses that sell products or services (any e-commerce site or SEO consultants, etc), there are innovative companies who create new ways of generating income while delivering huge value (Google), and there are companies who have built great things... but then are a bit confused as to how they'll monetize them (Facebook, Tumblr, Twitter, etc.)

The first two that I've listed are basically what you find in regular businesses too. The third, though, is so interesting because it's NEW, and everyone is trying to figure out what to do with it.

I have been (and still am, albeit less proactively) faced with a similar issue to Facebook with Busan Awesome, my city guide website. I built a community of users and now it's a trusted site in the city of Busan. But I built it for fun (kind of like how Facebook was built), and now it's like well... what do I do with it? It'd be a shame to let all those users go on without monetizing it in some way, right? I mean I'd at least want to cover my hosting fees!

To try to monetize, I've tried to contact local restaurants, bars, and tour companies, but there are all sorts of issues. I'm no longer in Korea, and a lot of them just want to give me cash under the table for advertisements. Many of the companies have been SUCH A PAIN to work with that I've had to fire them as clients. Yes, I've had some problems.

So I guess I can either try to continue dealing with this the Facebook way, and try to squeeze out some cash from advertisers. Or I guess I could try to do things the Google way. Assuming I was still in Korea, of course, I could launch community outreach events, partner up with local businesses to hold events and other fun things in the city.

Mobile is going to kill off blogs (and everything else that you read, for that matter)

Hem would've been a damn good blogger.

I have a long history with blogging, but with not much to show for it. I'm like one of those guys who's passively followed a band forever, can name all the songs, but then I've never seen them in concert, so the "true fans" will never take me seriously.

I have an excuse, though... I suffer from blogging A.D.D. But that's for another conversation. To make a long story short, I read a ton about blogging and making money online, and I got a ton of ideas, and I bought a ton of domain names - but gave up on each one after about a week. But I still read about blogging - a lot. (note: I DID end up starting a blog, but all my efforts before it and after it have been utter failures - just because of my own damn blogging A.D.D).

So what I'm trying to say is that while I don't really blog that much, I really BELIEVE in the medium. Which is why when I read Why Blogging is Dead -- and What's Next on Fast Company, I was pretty doubtful of its claims. I mean, after all, I read tons of accounts of how blogging is STILL working for many entrepreneurs!

The author reasons that there was something called "print" way back when, and "articles" as well. But then everything got all DIGITAL. So then it was all in "blogs." But now there's Pintrest and Instagram and Tumblr, who have championed the short-form (or no-form) media. Everything now is going from digital to MOBILE.

She makes the point that you can still BE a journalist - but the FORM has transformed from the well-thought-out article to the snippet on the Huffington Post.

Look - a blog article on a mobile device!

I'm assuming she's making the connection that blogging is merely a FORM of writing - and that many blogging businesses, niche sites, and lifestyle business that rely on blogs will eventually be forced to ditch the blog, and instead rely on other forms of content to allure readers.

While I agree that you have to adapt, I don't think blogging will be dead. I think we'll see blogging being used in tandem with other forms of media.

I mean, after all, look at what you used to be able to do just 6 years ago. You could throw up a landing page, add a "join my email list to learn more!" and then market the hell out of it. These days, the audience demands MORE. They demand TRUST. How do you get that trust? By building a rapport with the audience by... yup, BLOGGING!* And get this - you can read a blog on a mobile device. I do it all the time (see the pic!).

Still, I'm thinking that the author's blog-free "content revolution" is something like that flying car we've all been waiting for.

*I do understand that one can build rapport and trust through something like Twitter... but I'm still not sold. Look how many tweets link to articles! Hmm... I'd better stop thinking before I start agreeing with the article and deleting this post...