Addressable Market Defined

addressable market – n : the total potential market for a product or service, measured in dollars of revenue per year. In other words, your business’s addressable market can be calculated by identifying the maximum number of customers who could theoretically buy your category of product or service each year, and multiplying that number times your average selling price per unit. Note that the addressable market includes your product sales plus those of all your direct competitors (i.e., 100 percent market share). [NOTE: This is a crucial piece of data that every venture investor will want to know about your business, so it’s worth putting serious analytical thought into it.

Direct Marketing Defined

Direct marketing is a sub-discipline and type of marketing. There are two main definitional characteristics which distinguish it from other types of marketing or advertising. The first is that it attempts to send its messages directly to consumers, without the use of intervening media. This involves unsolicited commercial communication with consumers or businesses. The second characteristic is that it is focused on driving purchases that can be attributed to a specific "call-to-action." This aspect of direct marketing involves an emphasis on trackable, measurable results (known as "response" in the industry) regardless of medium.

The most common form of direct marketing is direct mail, where the marketers use a reduced "bulk mail" postal rate to send paper mail to all postal customers in an area or all customers whose addresses have been taken from a list. The second most common form of direct marketing is telemarketing, where marketers call selected (or random) telephone numbers. Email Marketing, including spam may have passed telemarketing in frequency at this point, and it is a third type of direct marketing. A fourth type of direct marketing, broadcast faxing, is now less common than the other forms. This is partly due to laws in the United States and elsewhere which make it illegal. A related form of marketing is infomercials. They are typically called "direct response" marketing rather than direct marketing because they try to achieve a direct response via television presentations. Viewers respond via telephone or internet, credit card in hand.

Direct marketers also use media such as door hangers, package inserts, magazines, newspapers, radio, television, email, internet banner ads, pay-per-click ads, billboards, transit ads, etc. And according to Ad Age, "In 2005, U.S. agencies generated more revenue from marketing services than from traditional advertising and media."

If the ad in the medium asks the prospect to take a specific action--call a free phone number, visit a website, return a response card, place an order, visit a PURL, complete a survey, etc.--then the effort is considered to be direct marketing. Direct response or direct-response advertising are both synonymous terms for direct marketing.

Search Engine Marketing Defined

Search Engine Marketing, or SEM, is a form of Internet Marketing that seeks to promote websites by increasing their visibility in the Search Engine result pages (SERPs). According to the Search Engine Marketing Professionals Organization, SEM methods include: Search Engine Optimization (or SEO), paid placement, and paid inclusion.[1] Other sources, including the New York Times, define SEM as the practice of buying paid search listings with the goal of obtaining better free search listings.

In 2006, North American advertisers spent US$9.4 billion on search engine marketing, a 62% increase over the prior year and a 750% increase over the 2002 year. The largest SEM vendors are Google AdWords, Yahoo! Search Marketing and Microsoft adCenter.[1] As of 2006, SEM was growing much faster than traditional advertising.

As the number of sites on the Web increased in the mid-to-late 90s, search engines started appearing to help people find information quickly. Search engines developed business models to finance their services, such as pay per click programs offered by Open Text [4] in 1996 and then Goto.com [5] in 1998. Goto.com later changed its name [6] to Overture in 2001, and was purchased by Yahoo! in 2003, and now offers paid search opportunities for advertisers through Yahoo! Search Marketing. Google also began to offer advertisements on search results pages in 2000 through the Google AdWords program. By 2007 pay-per-click programs proved to be primary money-makers [7] for search engines.

Search Engine Optimization consultants expanded their offerings to help businesses learn about and use the advertising opportunites offered by search engines, and new agencies focusing primarily upon marketing and advertising through search engines emerged. The term "Search Engine Marketing" was proposed by Danny Sullivan in 2001 [8] to cover the spectrum of activities involved in performing SEO, managing paid listings at the search engines, submitting sites to directories, and developing online marketing strategies for businesses, organizations, and individuals. In 2007 Search Engine Marketing is stronger than ever [9] with SEM Budgets up 750% as shown with stats dating back to 2002 vs 2006.

Search Engine Optimization

Search engine optimization (SEO) is the process of improving the volume and quality of traffic to a web site from search engines via "natural" ("organic" or "algorithmic") search results. Usually, the earlier a site is presented in the search results, or the higher it "ranks", the more searchers will visit that site. SEO can also target different kinds of search, including image search, local search, and industry-specific vertical search engines.

As a marketing strategy for increasing a site's relevance, SEO considers how search algorithms work and what people search for. SEO efforts may involve a site's coding, presentation, and structure, as well as fixing problems that could prevent search engine indexing programs from fully spidering a site. Other, more noticeable efforts may include adding unique content to a site, ensuring that content is easily indexed by search engine robots, and making the site more appealing to users. Another class of techniques, known as Black Hat SEO or spamdexing, use methods such as link farms and keyword stuffing that tend to harm search engine user experience. Search engines look for sites that employ these techniques and may remove their listings.

The initialism "SEO" can also refer to "search engine optimizers", a term adopted by an industry of consultants who carry out optimization projects on behalf of clients, and by employees who perform SEO services in-house. Search engine optimizers may offer SEO as a stand-alone service or as a part of a broader marketing campaign. Because effective SEO may require changes to the HTML source code of a site, SEO tactics may be incorporated into web site development and design. The term "search engine friendly" may be used to describe web site designs, menus, content management systems and shopping carts that are easy to optimize.

Major Shifts In Media Spending

There have been many shifts in the advertising and media industry that have caused IMC to develop into a primary strategy for most advertisers.

7 main shifts

From media advertising to multiple forms of communication (including promotions, product placements, mailers...)

From mass media to more specialized media, which are centered around specific target audiences.

From a manufacturer-dominated market to a retailer-dominated market. The market control has transferred into the consumer's hands.

From general-focus advertising and marketing to data-based marketing.

From low agency accountability to greater agency accountability. Agencies now play a larger role in advertising than ever before.

From traditional compensation to performance-based compensation. This encourages people to do better because they are rewarded for the increase in sales or benefits they cause to the company.

From limited Internet access to widespread Internet availability. This means that people can not only have access to what they want 24/7 but that advertisers can also target different people 24 hours a day.

SEKURU FRANCO (1968)highlighted the issue of marketing in relation to the sitgma of sales.

Integrated Marketing Communications

The American Marketing Association suggests that integrated marketing communications (IMC) is “a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time.” Marketing Power Dictiona Integrated marketing communication can be defined as a holistic approach to promote buying and selling in the digital economy. This concept includes many online and offline marketing channels. Online marketing channels include any e-marketing campaigns or programs, from search engine optimization (SEO), pay-per-click, affiliate, email, banner to latest web related channels for webinar, blog, RSS, podcast, and Internet TV. Offline marketing channels are traditional print (newspaper, magazine), mail order, public relations, industry analyst relations billboard, radio, and television.

A management concept that is designed to make all aspects of marketing communication such as advertising, sales promotion, public relations, and direct marketing work together as a unified force, rather than permitting each to work in isolation. In practice, the goal of IMC is to create and sustain a single look or message in all elements of a marketing campaign. Practitioners such as the Oct Group, however, remind clients that IMC should “permeate every planned and unplanned communication at every contact point where the customer or prospect may receive an impression of the company. IMC incorporates the corporate mission, the compensation plan, the management style, and the employee training. It includes packaging, positioning, promotions, pricing, and distribution.” A successful integrated marketing communication plan will customize what is needed for the client based on time, budget and resources to reach target or goals. Small business can start an integrated marketing communication plan on a small budget using a website, email and SEO. Large corporation can start an integrated marketing communication plan on a large budget using print, mail order, radio, TV plus many other online ad campaigns.

Return On Marketing Investment

Return on Marketing Investment (ROMI) and Marketing ROI are defined as the optimization of marketing spend for the short and long term in support of the brand strategy by building a market model using valid, objective marketing metrics. Improving ROMI leads to improved marketing effectiveness, increased revenue, profit and market share for the same amount of marketing spend.

There are two forms of the Return on Marketing Investment (ROMI) metric. The first, short term ROMI, is also used as a simple index measuring the dollars of revenue (or market share, contribution margin or other desired outputs) for every dollar of marketing spend. For example, if a company spends $100,000 on a direct mail piece and it delivers $500,000 in incremental revenue then the ROMI factor is 5.0. If the incremental contribution margin for that $500,000 in revenue is 60%, then the margin ROMI (the amount of incremental margin for each dollar of marketing spend is 3.0 (= 5.0 x 60%). The value of the first ROMI is in its simplicity. In most cases a simple determination of revenue per dollar spent for each marketing activity can be sufficient enough to help make important decisions to improve the entire marketing mix. In a similar way the second ROMI concept, long term ROMI, can be used to determine other less tangible aspects of marketing effectiveness. For example, ROMI could be used to determine the incremental value of marketing as it pertains to increased brand awareness, consideration or purchase intent. In this way both the longer term value of marketing activities (incremental brand awareness, etc.) and the shorter term revenue and profit can be determined. This is a sophisticated metric that balances marketing and business analytics and is used increasingly by many of the world's leading organizations (Hewlett-Packard and Procter & Gamble to name two) to measure the economic (that is, cash-flow derived) benefits created by marketing investments. For many other organizations, this method offers a way to prioritize investments and allocate marketing and other resources on a scientific basis.

Direct measures of the short term variant of ROMI are often criticized as only including the direct impact of marketing activities without including the long-term brand building value of any communication inserted into the market. Short term ROMI is best employed as a tool to determine marketing effectiveness to help steer investments from less productive activities to those that are more productive. It is a simple tool to gauge the success of measurable marketing activities against various marketing objectives (e.g., incremental revenue, brand awareness or brand equity). With this knowledge, marketing investments can be redirected away from under-performing activities to better performing marketing media. Long term ROMI is often criticized as a 'silo-in-the-making" - it is intensively data driven and creates a challenge for firms that are not used to working business analytics into the marketing analytics that typically determine resource allocation decisions. Long term ROMI, however, is a sophisticated measure used by a number of forward thinking firms interested in getting to the bottom of value for money challenges often posed by competing brand managers.

Pay Per Click Advertising Defined

Pay per click (PPC) is an advertising model used on search engines, advertising networks, and content websites/blogs, where advertisers only pay when a user actually clicks on an ad to visit the advertiser's website. Advertisers bid on keywords they believe their target market would type in the search bar when they are looking for a product or service. When a user types a keyword query matching the advertiser's keyword list, or views a page with relevant content, the advertiser's ad may be shown. These ads are called a "Sponsored link" or "sponsored ads" and appear next to, and sometimes, above the natural or organic results on search engine results pages, or anywhere a webmaster/blogger chooses on a content page.

Pay per click ads may also appear on content network websites. In this case, ad networks such as Google Adsense and Yahoo! Publisher Network attempt to provide ads that are relevant to the content of the page where they appear, and no search function is involved.

While many companies exist in this space, Google AdWords, Yahoo! Search Marketing, and MSN adCenter are the largest network operators as of 2007. Depending on the search engine, minimum prices per click start at US$0.01 (up to US$0.50). Very popular search terms can cost much more on popular engines. Arguably this advertising model may be open to abuse through click fraud, although Google and other search engines have implemented automated systems to guard against this.

Email Marketing Defined

Email marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fundraising messages to an audience. In its broadest sense, every email sent to a potential or current customer could be considered email marketing. However, the term is usually used to refer to:
Sending emails with the purpose of enhancing the relationship of a merchant with its current or old customers and to encourage customer loyalty and repeat business.

Sending emails with the purpose of acquiring new customers or convincing old customers to buy something immediately.
Adding advertisements in emails sent by other companies to their customers.

Emails that are being sent on the Internet (Email did and does exist outside the Internet, Network Email, FIDO etc.)
Researchers estimate that US firms alone spent $400 million on email marketing in 2006.

Internet Marketing Defined

Internet marketing, also referred to as online marketing or Emarketing, is the marketing of products or services over the Internet. The Internet has brought many unique benefits to marketing including low costs in distributing information and media to a global audience. The interactive nature of Internet media, both in terms of instant response, and in eliciting response at all, are both unique qualities of Internet marketing.
Internet marketing ties together creative and technical aspects of the internet, including design, development, advertising and sales. Internet marketing methods include search engine marketing, display advertising, e-mail marketing, affiliate marketing, interactive advertising, blog marketing, and viral marketing.

Internet marketing is the process of growing and promoting an organization using online media. Internet marketing does not simply mean 'building a website' or 'promoting a website'. Somewhere behind that website is a real organization with real goals.
Internet marketing strategy includes all aspects of online advertising products, services, and websites, including market research, email marketing, and direct sales.

Search Engine Marketing Defined

Search Engine Marketing, or SEM, is a form of Internet Marketing that seeks to promote websites by increasing their visibility in the Search Engine result pages (SERPs). According to the Search Engine Marketing Professionals Organization, SEM methods include: Search Engine Optimization (or SEO), paid placement, and paid inclusion.[1] Other sources, including the New York Times, define SEM as the practice of buying paid search listings with the goal of obtaining better free search listings.

Understanding Product Life Cycle

Product Life Cycle Definition: The conditions a product is sold under will change over time. The Product Life Cycle refers to the succession of stages a product goes through. Product Life Cycle Management is the succession of strategies used by management as a product goes through its life cycle.The product lifecycle goes through many phases and involves many professional disciplines and requires many skills, tools and processes. Product life cycle (PLC) is to do with the life of a product in the market with respect to business/commercial costs and sales measures; whereas Product Lifecycle Management (PLM) is more to do with managing descriptions and properties of a product through its development and useful life, mainly from a business/engineering point of view. It is important to understand where your product or service fits its life cycle as you begin to formulate your marketing strategy.