The online marketing and advertising campaigns do not provide the same results as they used to a few years ago and web host get less customers from online advertising. Why?
The High Cost of Advertising
The first reason for the poor return of investment (ROI) in advertising is the high cost. When it comes to web hosting, some companies pay between $2.00 and $8.00 cost per click in Overture as well as in some web hosting directories to get visited by prospective customer. It is very hard to achieve good Return of investment in advertising when you advertise this way.
The growing advertising costs sometimes take more than 50% of web hosts’ monthly revenue. There have been usual for shared hosting companies to spend up to 25% of their earnings on advertising in 2003. Now it is not like that anymore. I have already mentioned in a previous articles (AdWords Brings Mostly Untargeted Traffic To Web Hosts, Free Web Hosting. Free For Whom?, and Shared Hosting Gurus Worried About High Business Costs) that some companies pay affiliate commission that almost double the cost of the service they sell. Some publishers might be very happy to get high commission of sales but it is not good for web hosting businesses to surpass their advertising budgets. This makes companies to become unstable.
Let’s me illustrate that with the Daw Web Hosting Blog sponsorship rate. It is $250 per month. the price is calculated for text listing placed site wide on high PR pages that are defined as important and relevant for the web hosting industry. Besides the objectives of any Pr campaign those text listings bring targeted traffic to advertisers. To be honest I must say the $250 per month is the highest possible price anyone have to pay to get listed in DawHB.com. Any other higher price would be inadequate.
My advice is not to pay more than $150 per month for text listing only because it would be featured on high PR pages. Calculate the cost of PR campaign plus the traffic you can get from the web site and always ask how many monthly unique visitors will you get from the advertising position.
Tough Competition
The web hosting market has become highly competitive industry within the last two years. the number of web host is increasing every day and all of them want to get as much customers as they can. This reflects on higher advertising costs because there are always someone who is ready to pay more for a good position. It is very similar to Real estate market in New York and London. There are many rich people who are willing to pay for an apartment in good neighborhood.
Web Hosting Stuff, one of the top rated web hosting directories in Google on keyword “web hosting” todays charge for home page listing is $2.63 per click. There are always someone to pay, but I’m sceptic that hosts can get good ROI when they are paying more than $2.00 per click. A good traffic web site would squeeze at least $100/day from advertiser who pays rates like those above. To be honest I must say that those rates are nothing compared to Overture bids.
The Media Distraction
Since the market looks lucrative more and more people decide to open so-called web hosting directories or Top host web sites. When it comes to budged class hosting offers anyone can see that most of the companies listed top in those “lists” are always the same. The large number of web hosting media and directories brings more competition and in some way puts the prices of advertising down. But in many cases those directories are affiliated in one or other way with web hosting companies.
There are no more than 20 popular web hosting directories that have proven their impartiality. So the question how to build an advertising strategy and where to advertise is very important. A combination of 5 different channels to reach your target audience would produce good results.
Register your web site in some web hosting directories. Not in all of them. Maintaining a good affiliate program that do not mislead publishers with fantastic commissions. Participate to forum discussions by posting meaningful. Use classified web sites and some pay per click sites that can prove they do not cheat. Produce your own business news and write press releases.
Those are a few methods that would help you a lot even if you are managing non-web hosting related site. E-mail marketing, newsletters and other forms of marketing also work, however I’m not an expert there. So ask someone who has a good experience.