Not that a revelation like this was a shock to me. In today’s world with the proliferation of the Internet as a major channel in terms of getting customer attention, brand building, product sales and customer management, the marketing playbook has changed. Drastically.

Kotler writes about how a firm can engage in a certain set of activities to influence buyers to purchase their product or service. This set of activities is referred to as a marketing mix which is typically based on the four P’s:

· Product: Products manufactured and sold today must be better or different in some way to engage customers to purchase it.

· Price: Standard cost-based pricing, which simply adds a markup to the cost of a product, is no longer effective (maybe for a generic product but otherwise not). Instead, he promotes value-based pricing, where prices are not based on their cost, but based on their value to the customer

· Place: The rules of the game have changed with the Internet. Newer channels means newer ways of thinking on how to add value to the product selling process and newer places of selling it.

· Promotion: Use the right mix of delivery and communication tools to deliver a message that resonates with potential buyers.

Bottom line - companies can no longer rely on their former business practices to sustain prosperity. Busines assumptions and practices that were practiced ‘then’ with the ones being increasingly practiced ‘now’ are detailed by Kotler as follows:

Then

1. Make everything inside the company. (Fully owned)
2. Improve on one’s own.
3. Go it alone.
4. Operate with functional departments.
5. Focus domestically.
6. Be product-centered.
7. Make a standard product.
8. Focus on the product.
9. Practice mass marketing.
10. Find a sustainable competitive advantage.
11. Develop new products slowly and carefully.
12. Use many suppliers.
13. Manage from the top.
14. Operate in the marketplace.

Now

1. Buy more things outside (Outsource).
2. Improve by benchmarking others.
3. Network with other firms (Collaborate).
4. Manage business processes with multidiscipline teams.
5. Focus globally and locally.
6. Be market-and customer-centered.
7. Make adopted/or customized products.
8. Focus on the value chain.
9. Practice target marketing.
10. Keep inventing new advantages.
11. Speed up the new product development process cycle.
12. Use few suppliers.
13. Manage up and down and across.
14. Operate in the marketspace.

The checklists above are clear indicator of a firm’s approaches to managing profits. The elements of the ‘Now’ list are viewed as more effective modern approaches to managing profitability. A company can almost tell how much it has adopted contemporary business practices by placing a check in each list on either the ‘then’ or the ‘now’.

If most of the checks are on the ‘then’, then that company is trouble. How does one know that? Well, declining market share, loss of customer confidence, negative buzz in online and offline channels, lower production outputs and hemorraging costs should be a good indicator.

If there are low barriers to entry in an industry, the easier it is for other firms to enter this industry. In such a situation, new entrants could change major determinants of the market environment (e.g. market share, product pricing, customer loyalty) at any time. There is always a hidden pressure for reaction to any change in the market dynamics and adjustment for existing players in this industry.

The threat of new entries will depend on the extent to which there are barriers to entry – the greater the barriers to entry, the less prone is someone’s inclination to enter the market. The lower the barriers, the easier it is for someone to enter the market. The barriers to entry typically are:

• Economies of scale. This means the minimum size requirements for an operation to be economical.
• High initial investment and fixed costs. This is essentially a cost barrier.
• Cost advantages of existing players due to experience curve effects of operation with fully depreciated assets. With fixed costs depreciated, existing firms will enjoy significant costs advantages.
• Brand loyalty of customers. If the brand has major penetration in the market, then it’s hard to get customers to switch.
• Protected intellectual property like patents, licenses etc.
• Scarcity of important resources and raw materials. Here whatever’s available could be controlled by existing players who have long-term contracts in place.
• Distribution channels are controlled by existing players. This is a problem as a new entrant will then have to either forward integrate or enter into distribution contracts with existing players and take a hit on operating margins.
• Existing players have close customer relations. This is about long-term contracts with a strong customer base and is highly relevant in a B2B scenario.
• High switching costs for customers. Changing to another supplier will involve significant costs from a process and management standpoint for a customer and they may not be inclined to go with a new entrant.
• Legislation and government action prohibits new players in the market.

Threat of Substitutes

A threat from substitutes exists if there are alternative products with lower prices or better performance parameters for the same purpose. They could potentially attract a significant proportion of market volume and hence reduce the potential sales volume for existing players. This category also relates to complementary products.

Similarly to the threat of new entrants, the threat of substitutes is determined by factors like

• Brand loyalty of customers. The biggest brands will have the highest market share. Changing loyalty means changing habits and that takes too much time.
• Close customer relationships. From a B2B perspective, that’s a hard one to break.
• Switching costs for customers. Customers want to cut costs not increase them. The value proposition of the new entrant’s products need to be extremely high to entice a switch.
• The relative price for performance of substitutes. If the substitute does not perform as well as the original, then there’s a problem.
• Current trends.

Competitive Rivalry between Existing Players

This force describes the intensity of competition between existing players in a market. High competitive pressure results in pressure on prices, margins, and profitability.

Competition between existing players is likely to be high when:

• There are many players of about the same size, Same size implies that the same amount of resources will be available to carry out the marketing tactics in an industry.
• Players have similar strategies. Enough said, with a similar strategy there’s a limited amount of market share that you can grab.
• There is not much differentiation between players and their products, hence, there is a lot of price competition
• Low market growth rates. Here the growth of a firm is possible only at the expense of a competitor, However, in such a scenario, with limited growth the potential of upside is virtually nothing until a disruption derails a competitor.
• Barriers for exit are high. With a lot invested in capital equipment which is expensive and highly specialized, it makes little sense for someone to exit the market – in such a market, it’s also possible to partner with competitors from a manufacturing standpoint and have tolling agreements to utilize capacity.

The competitive strategy should be based on a strong understanding of the industry structure and how it may possibly change. In the online world, this principle does apply though in slightly different ways.

Porter identified five competitive forces that shape every industry and every market. According to Porter, these forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The objective of corporate strategy should be to play against these competitive forces in a way that the market share or position of the firm in question is improved.

Bargaining Power of Suppliers

The term ‘suppliers’ comprises all sources for inputs that are needed in order to provide goods or services.

Supplier bargaining power is likely to be high when:

· The market is dominated by a few large suppliers.
· There are no substitutes for the core raw materials required for manufacturing.
· The suppliers’ customers are fragmented so their bargaining power is low. This essentially means that the market is fragmented with many pieces carved out between many players. This also means that the product in question is very generic in nature.
· The switching costs from one supplier to another are high.

The relationship of the firm to powerful suppliers can potentially reduce strategic options for the organization because of their clout in the market.

Bargaining Power of Customers

Similarly, the bargaining power of customers determines how much customers can impose pressure on margins and volumes.

Customers bargaining power is likely to be high when:

• They buy large volumes and there is a concentration of buyers which makes the buyer pool limited.
• The supplying industry comprises a large number of small operators which means that it’s very competitive.
• The supplying industry operates with high fixed costs. This is true when suppliers deliver a high value-added raw product component.
• The product is undifferentiated and can be replaces by substitutes, In this scenario, a generic product competing in the marketplace implies the presence of multiple duplicate products.
• Switching to an alternative product is relatively simple and is a low cost-proposition. Here multiple substitutes are available.
• Customers have low margins and are price-sensitive.
• Customers could produce the product themselves. If a customer has the scaling capability within his existing production facilities to backward integrate some of the manufacturing for their raw material components, they do posses strong bargaining power.
• The product is not of strategic importance for the customer. In this situation, the product may represent a very small portion of annual revenue from a firm’s product portfolio and may not of strategic importance.
• The customer knows about the production costs of the product. If the customer has the capability to produce the material in question, it’s highly possible that he’s aware of the costs involved.

Continued in part II coming next…

For example, if you’re Borders, you probably view Amazon and Barnes and Noble as your competitor. The three of you all sell books, DVDs and other entertainment/leisure accessories. Therefore all of you are vying for the same audience to market to in both offline and online channels.

However, when you target that audience online, you encounter a different type of competitor.This competitor isn’t anything like your company or your offline competitor’s company, but targets the same keyword phrases you are aiming to rank for and track on an ongoing basis for your search engine marketing campaign. This competitor is very stealth-like and can engage in a frontal attack on your online (at least from an SEM perspective) right away.

It’s important to recognize that marketing strategies and tactics for the online world vary a lot from the things that are done in the offline world. It is almost as if these two worlds are diametrically different. From an online perspective, it is crucial to research which websites are showing up on your most important non-branded keyword phrases (bear in mind that you have to keep the customer decision funnel in mind while deciding on the keywords you want to rank for). The most consistent website results are your online competitors. Bear in mind, that your direct competitors offline may not even be in your top 5 online competitor list.

Also, bear in mind that while you may have competitors that sell the same kind of products that you do online, quite a few of them will be resellers or have a wide range of products that  they sell online and may be located in other countries. All these diverse competitors will target your converting keywords and as a results you’ll see higher SEM costs as firms try to outbid each other for keywords.  Use a tool like WebPosition Gold or Adgooroo to monitor visibility statistics for your target keyword phrases.

It’s also key to identify the search engine marketing tactics they are using to achieve rankings on the critical keyword phrases.

Competitor organic tactics to watch out for:

Page Content – How much content is on the competitor’s ranking pages? What keywords are they trying to rank for?  Are they engaging in keyword stuffing? Is their keyword density very high? Are they trying to game their way into Google’s eyes as a relevant source for that keyword phrase?

URL Structure – What do the competitor’s URLs look like? Are they static urls or dynamic? Knowing the answer to this tells you how methodical they are with their SEO implementation. Are their urls written cleanly, with relevant keywords representing the theme of the page in them?

Meta Data – What meta keywords are they using for the page? Do the keywords  appear in the title and description for the page as well? Are the meta data keyword phrases similar to those you are targeting for your campaign?

Source Code – How is the code formatted? Is it easy for a search engine spider to navigate? Is there flash or too much javascript?

Internal Navigation – How does the navigation look? Providing text-based links to other significant parts of your site invites search engine spiders to keep searching the site. Does the competitor’s site have a sufficient amount of internal links? Do these links have the right keywords as their anchor text?

Link Popularity – How many quality links are pointing to the competitor’s site? A higher quantity of legitimate links pointing to your competitor’s site may help them rank higher on certain keyword phrases, as search engines give preferences to sites with high link popularity. Use these links to identify partners that you’d like to link to. SEOMoz has a great juicy links tool that you can use to identify sites that you can solicit for links to your content.

Conducting research on how your top online competitors utilize the various elements above, and where they may be doing a better job than you, will help you understand the gaps in your internet marketing strategy and allow you to take the necessary steps to improve your actions online.

But, what happens during times of hardship? Like today, for instance where we’re in the middle of a recession. As always, we try to escape from the stark realities that surround us and in a recession, we try to do more of the same. That’s why fantasy shows and movies typically get the largest audiences. The ‘Twilight’ movies, the other fantasy experience shows that people have latched on to so readily like ‘Heroes’ and ‘Lost’. The bottom line is that people are looking for a way to escape but, they’re also looking for happiness and they find it in both fantasy and reality-based shows. Reality-based shows allow folks to look at others’ lives and smugly agree that they’re better than them. It’s about indulging a fantasy like a hook-up on a reality show as well as looking on with disdain when someone does something sneaky or heinous to win a spot – like the Survivor show.

A good example is the prevalence of vampire shows. There is a certain attraction towards the undead. It’s like the attraction towards the ‘X-Men’ characters from Marvel Comics. The real reason why people navigated towards the ‘X-Men’ was because they were the closest thing to being human and yet, superhuman. The value of community among the “undead” is attractive to most of us ebcause we too want to be part of the cool gang. The main characters in these shows illustrate how to embrace living under the threat of their lives disintegrating at any time by accepting the risks and trying to connect deeply with one another. The key takeaway is that we should focus on obtaining happiness no matter how fleeting it may tend to be.

Consuming under the threat of temporary happiness, means consumers try to find happiness in their lives through their purchases. It’s almost as if they don’t want to be reminded about how tough things are or how tough things used to be. they create this fall sense of security or a false reality for themselves and are are ready to move forward with it. They discover happiness through their consumption habits.

Businesses try to help consumers find happiness in everyday things and try to show them how their products contribute to that elusive goal of happiness. Best Buy is one retailer that has successfully capitalized on the ‘happiness’ opportunity. They realized that instead of talking about products and performance and price like everyone in consumer electronics had always done, they had to completely change their approach. While the latest technology and coolest stuff was appealing, it wasn’t a convincing call-to-action to purchase. So they created their  “You, Happier” campaign (see the clip on YouTube) which focuses on the joy of helping, the joy of giving – the intangible benefits of the products and not the direct tangible benefits.

The bottom line here is that this trend will continue. Businesses will strive to extract  as much sales as they can from the emotionally-detached masses that they sell to. And Mad Ave, will continue to make this happen.

In October 2009,  Twitter attracted 58m web visitors, according to comScore. Recently its growth appears to have slowed down in the United States, but the service is still expanding in countries such as Japan and Germany.

According to the Economist, this has led to speculation that it could eventually make a dent in Facebook’s market, even though size-wise it is not in the same league. The analysts who see a looming clash claim that both companies are in the business of helping people share information in real time.

But, both these services differ in a couple of ways. The first is the nature of the relationships that from the basis of these networks. On Facebook, which is permission based, there are strong privacy levels where one can prohibit one’s profile from being displayed in a search. Also, users can communicate directly only if one of them has agreed to be a friend of the other.

On Twitter, however, there aren’t as many controls and people can sign up to follow any public tweets they like. Twitter’s a broadcasting service which allows its users to transmit short bursts of information to their followers. their followers could range from groups of complete strangers to very close friends. Facebook has conversations that are more private depending on how open one wants to be in there. The Facebook messenger tool allows one-on-one conversations which appeals to some folks who would like private conversations.

In research conducted by Mikolaj Jan Piskorski, a professor at Harvard Business School, and one of his MBA students, Bill Heil where they surveyed just over 300,000 Twitter users in May 2009, they found that more than half of them tweeted less than once every 74 days. They also discovered that the most prolific 10% of twitter users accounted for 90% of all tweets. On other online social networks the most active users typically produce just 30% of all content.

Another big difference between Twitter and Facebook is in the kind of content that both networks have. Facebook allows people to exchange videos, photos and notes, whereas Twitter is part-blog, part e-mail.

Last year, after its takeover talks with Twitter stalled, Facebook introduced several Twitter-like changes to make it more attractive for real-time postings. It also gave more visibility to its pages for athletes, celebrities and musicians and lifted the limits on the maximum number of fans that they could have on the site.

The big challenge facing the owners of Twitter is to find smart ways of transforming the raw tweet data into profits. The newest venture of pay-per-tweet may be a step in the right direction though it’s my opinion that they should just charge businesses for opening Twitter accounts. That would get them some quick revenue upfront.

Disclosure : this post is heavily influenced by a similar one by the Economist. See their article here.

Here are Andrew Sullivan’s thoughts on modern digital media.

1. A Blog is not a static being:

A blog or an online page is a broadcast. It should not remain static and has to be dynamic. It has to be dynamic enough for folks to take notice. If it’s not brisk enough, it flags and dies a fast death. The brisker the pace, the more engaged the readership and the more co-dependent is the relationship between blog and reader. A blog is bloody hard work. And, that’s just the way it is.

2. How the web is a great leveler:

A page is a page. Period. And every page is as accessible as any other. The barrier of entry to any page on the web is zero. The democratization of content on the web has made all content equally accessible. In traditional journalism, the barrier of entry was very high. Not any more. Any page, today, has equal opportunity.

3. One-on-one relationships blossom:

A reader has a personal relationship with the person who has written the words i.e. the writer. A popular writer is like a performer and is expected to deliver every time his audience expects him to. People expect a certain degree of consistency from writers who they connect with and get upset if that reliability is absent.

4. A blog’s readers keep it honest:

The sheer database of knowledge that a subscriber database tends to have keeps a writer honest and accurate. These readers over time become like friends. A good example is Slate’s readership or any other highly subscribed blog like the SEOMoz blog or Matt Cutts’ blog. Andrew created a letters page to highlight his blog’s readers’ comments, but saw that no one was reading the same. He then began involving his readership into the blog posts with the “two cents of the day” so readers would be a stronger part of a community. The atmosphere of the community he created led people to share stories.

5. Speed of New media:

The lack of control of new media is terrifying. The immediacy and speed of new media is even more terrifying, especially for those who have something to hide.

Transparency is ultimately a good thing. Like the truth, it sets you free. Control leads to smugness, error and corruption. Andrew stated further that some people keep think that they can own the Internet by owning a site. But, that’s illusory. It’s like putting a wire fence around the water. Users, visitors, readers on the internet will go where they want, information will flow freely, and things will get out. The moment of wisdom comes when you accept that. Yes, there are things that we’d like to keep private, but the moment you’ve inserted yourself into the information sucking world of the internet, your life can be disseminated to everyone on a moment’s notice. You  have to let go. Preconceived notions have no room on the internet.

Some neat lessons. Philosophically, it makes a lot of sense. We are as vulnerable as we choose to be. Kudos to all the writers,  publishers who have opened up to the Internet and let market forces determine their credibility. It’s a new world.

Enjoy!

Here are a few things to consider when researching keywords for an SEO campaign.

Target Market Dynamics

Understand your customers thoroughly. Understand their offline and online behaviors and then develop a web experience around those behaviors.

Who are the customers that spend the most or spend a lot of time on your site? What are they searching for? For example, someone searching for bulk purchases is more likely to provide a higher profit margin. The search volume may be lower here but it may be easier to achieve top rankings and the returns will be greater for each sale provided.

The most important point here is to make sure that your keywords are focused towards the right people so that when your customers are looking for you, they can find you!

Target the converting stages of the buying process

Consumers at different stages of the buying process will always use different search terms. People in the later stages of the buying process, closer to the actual purchase, will use more specific, ‘transactional’ keywords. For the largest ROI, targeting keywords directly related to the purchase of your products will provide a much higher conversion rate than informational searches.

A good way to identify if a keyword is informational or transactional is to look at the top 10 results for that keyword. If the top 10 results are dominated by your competitors then it is safe to say that it is transactional. Use a tool like Adgooroo or Google Adwords or even Wordtracker to do this. The long-tail keywords are stronger converters because their usage signals the arrival of the prospect at the decision stage of the buying process.

Keyword search volumes

Chose keywords that have a large amount of qualified traffic.  For most businesses, it’s important to understand that there is no point in targeting a keyword in your SEO campaign simply because it is specific to your product. If a keyword does not have any search volume, it will not provide any traffic. Use Adgooroo or the Google Adwords Tool to determine search volumes.

Budget for the activity

It is essential to be realistic with your search engine goals – your goals must match your budget! If you target a keyword that will take years to achieve rankings for or that you are unlikely to rank for at all with your current spend, you will end up wasting whatever budget you have. It is far better to focus on keywords that are more specific and less competitive, but for which you are more likely to rank in the first page of results.

What pages on your website can rank highly?

I cannot emphasize the importance of this point – each keyword you target MUST have a dedicated page on your site that you can optimise for that keyword! If there isn’t, you will never achieve rankings for that keyword. So there is absolutely no reason to target a keyword unless at least one page on your website can rank for that keyword.

It is certainly fine to target 2-3 keywords on a single page if needed, and there will usually be some long-tail rankings achieved as a by-product, but the important thing is to ensure any major keyword you are targeting has a page on your website with text content on the topic. This will ensure that, with the optimization you do, you are actually able to achieve some rankings for the target keyword.

Common mistakes to avoid

• When researching keyword volumes, avoid broad match results and focus on exact match data from the drop down menu otherwise you will be looking at inaccurate numbers for your campaign.
• Many marketers that are within a business pick keywords for which they think their consumers are searching. While this is a good place to start, you need to be objective and diligent with your research. Consumers do not always think the same way that you might so make sure that the keywords you select are actually keywords that consumers will use.
• Many marketers target a keyword because it is very popular or very specific without any website content relating to that keyword. Ensure that a page is created with the keywords present within that content.

Some SEO implementers however, still do this especially folks who grab domains and hope to make a buck out of them in the future. Here are some tips on identifying if a website has been optimized using black hat SEO tricks.

Invisible content

This would be mostly textual in nature. If you’ve ever visited a website with a significant amount of empty white space at the bottom of their pages, here’s how you can find out if they’re been tricky.

• Highlight the empty space with your mouse, if text appears highlighted, you’ve just stumbled on a classic technique of black hat SEO. White text written on a white background is so old, it’s like something from the eighties. Or you can just  look at the source code to view this section. Typically, this hidden text is full of keywords.

Hiding Content within your code

This is a clever black hat technique. The basic principle of this trick is that within the code for the site there will be content stuffed with keywords. Naturally, this content will not be visible to the end user of the site.

One way of doing this is by using comment tags which developers typically use to add notes or comments within their code explaining what that piece of code does.

• Here’s an example of the comment tag being used correctly,<!– Google Analytics Code –>

• Here’s an example of a comment tag being used incorrectly in a bid to promote a hypothetical page targeting search engine optimisation,<!—Search engine optimisation, SEO, professional search engine optimisation company, spamming search engines –>

Noscript tag

Another popular way of hiding content is the use of the <noscript> tag. The <noscript> tag should be used to inform a user that a script is being used but their browser either doesn’t support the script language used or they have that function turned off.

Here’s an example of the <noscript> tag being used correctly,

<script type=”text/javascript”>
<!–
document.write(“Hello World!”)
//–>
</script>
<noscript>Your browser does not support JavaScript!</noscript>

Here’s an example of the <noscript> tag being used as a black hat SEO technique again in a bid to promote a hypothetical page but this time targeting car hire,

<noscript>
Imaginary Car Hire Firm do Car Hire which is very affordable so if you want to hire a car call our car hire firm because we are the best car hire firm in the world
</noscript>

Other HMTL tags misused in similar ways include the <noframes> tag and hidden inputs in forms.

Content

Content can also be hidden from the end user by using CSS, excessively small text and colored text on the same colored background.

All of these techniques are frowned upon by search engines and if detected can mean your website will be penalized or even banned.

Cloaking

Cloaking is simply displaying one website to visitors and other one to Google’s spiders. The most common way to do this is using the “iframe” redirect code. Many affiliate marketers do this. Thus, your website visitor will see an affiliate website, or what have you, but Google will see only your website, not the affiliate site. Again, Google does not like this, and you will be penalized.

Keyword Stuffing

“Keyword stuffing” refers to the practice of loading a web page with keywords in an attempt to manipulate a site’s ranking in Google’s search results. Filling pages with keywords results in a negative user experience, and can harm your site’s ranking. Focus on creating useful, information-rich content that uses keywords appropriately and in context.