Author: Atlantic BT

Just last week we spoke on this very website about the importance of social media for your business, whatever your business may be.  In case you’ve been living under a rock or disagreed with the fact that businesses of all shapes and sizes need to jump on the bandwagon, this latest gem of news might finally sway your opinion.

Would you believe us if the biggest “company” in the United States bought into the frenzy of social media and social networking?  Well guess what? It did. The country’s biggest and most powerful “business,” the United States Government, has officially succumbed to the social media frenzy.  The White House has an official blog on Facebook, MySpace and Twitter.  Yes, you can get direct tweets from our White House.

When prompted why the Government, who previously has been a notorious stickler for being overly-private and detached from its citizens, has suddenly jumped on the social media bandwagon, here’s what they had to say:

“Technology has profoundly impacted how and where we all consume information and communicate with one another. WhiteHouse.gov is an important part of the administration’s effort to use the Internet to reach the public quickly and effectively, but it isn’t the only place.

There’s a lot to talk about right now. From an economic crisis to wars in Iraq and Afghanistan, the President and his Administration have a full plate – not the least of which is making sure the public stays up-to-date and involved in our efforts.”

So if you were still not convinced as to why social media is right for you and your business, maybe we should take a cue from Obama and our Government who believe it is a useful and vital tool to helping them keep citizens well informed.  Don’t get left behind, stay in front with social media.

Digital marketing with pay per click or search engine optimization provides highly targeted traffic at a lower cost than traditional media. Determining the percentage of profit dedicated to marketing is an essential first step. Working backwards from a percentage of profit margin dedicated to marketing allows an online marketer to determine the value of each visitor, and the value of actions the visitor takes while onsite. The following case study provides a hypothetical example.

What percentage of profit is allocated for online marketing?

A landscaping company charges their commercial clients $10,000 per season for a large account and is willing to dedicate 10% ($1,000) to acquire each new account. In this case $1,000 worth of online marketing is allocated to bring in $10,000 worth of new business.

What percentage of actions results in a sale?

Based on prior sales and conversion data gained from testing it is determined that 10% of contact forms or phone calls turn in to a commercial account valued at $10,000.

What percentage of visitors takes action (contact form, download, phone call, etc)?

Using web site statistical tracking like Google Analytics we can determine the ratio of visitors to contact form submissions. In this case 5% of all visitors to the site fill out a contact form requesting more information or a price quote. Based on the 5% contact form conversion ratio we determine the target cost per acquisition (CPA) is $50. How much should you pay for each visitor?

The target CPA for a contact form submission at $50 and it is determined that 5% of all visitors result in a contact form conversion. Based on this data we deduce that each new visitor to the website has a value of $2.50. This value really translates to the cost you can pay for each visitor and still remain profitable.

Knowing how much a visitor is worth to your business, conversion ratios, and potential profit from a sale allows you to determine if your digital marketing dollars are being spent effectively and how to allocate your marketing budget for the highest return.