Manufacturing Today

Internet Smarts

By Rick Biederer

Today, any manufacturing company, no matter how small, can have a global presence and compete successfully with the largest players. Creating a Web site is easy and inexpensive, and attracting business from around the world is largely a matter of knowing how to play the search engine ranking game. It’s no wonder global competition has increased so dramatically in the last 20 years. Yet many manufacturers still rely solely on traditional, less targeted forms of advertising, which cost a great deal more and bring in little, if any, new business.

The Internet is much more than just a better form of advertising. Through online sourcing services, it links companies to low-cost resources for labor and materials, so that any manufacturer can compete even if it lacks the networking power of the large players.

Aside from the small cost of design and hosting, a Web site provides free advertising that is far superior to traditional venues because it is highly targeted. The fees for TV and newspaper advertising are high because these media reach such a wide audience. The problem is that only a small majority of that audience is actually in the market for the advertised product. On the other hand, when people search for a product or component online, it means they are actually in need of it.

Search engine optimization (SEO) is the art and science of coming out at or near the top of a list of results presented by Google and other search engines when someone searches for an item. Being among the top three can make a tremendous difference while being on page two or three of the results is hardly viable because most people don’t look that far.

There are two kinds of search results: organic and sponsored. Companies have not paid for organic results. These results come up naturally for various reasons such as having text that is relevant to the search included on the firm’s home page. A high ranking in organic results is therefore accomplished through the proper use of key words describing products and services on a Web site. This is literally free advertising.

For instance, a Google search for "gaming computer" will bring up a company called Alienware, a well-known gaming computer manufacturer, near the top of the list. Since many people search for gaming computers, Alienware gets lucrative free advertising through organic search results because its Web site focuses on the key search terms.

In addition to search engine advertising, it also pays to take advantage of social media such as YouTube or MySpace. They can offer great visibility branding at no cost.

PAY-PER-CLICK

Sponsored results are those for which people have paid through a process called pay- per-click (PPC). Businesses select a list of key words, then establish a budget and bid for the top spots among the search results. Spending only $100 a month to get a high ranking could increase sales by 100 or 1,000 percent.

Alienware, for instance, purchased a pay-per-click ad, which shows up in a higher position than its organic listing when the search term "gaming computer" is entered. Since "gaming computer" is a highly searched term, Alienware is probably paying a premium for the PPC ad. There are some simple steps the company could take to increase its return from that investment. For instance, it could purchase a PPC ad for "gamingcomputer," spelled as one word, which would catch searchers who spell it incorrectly. Since few companies are advertising gamingcomputer spelled as one word, such an ad might cost only a few cents compared with perhaps $20 for the ad with the correct spelling. The ROI for the incorrectly spelled term would be much higher than that of the correctly spelled term and thus would increase ROI overall.

Another tactic for a gaming computer manufacturer would be to pay for search terms that reference popular games, such as "Everquest computer" or "World of Warcraft computer." Whenever new versions of these games come out, players look for high-end computers that accommodate the new software. Paying per click for these search terms may cost only a quarter of the fee for "gaming computer," further increasing ROI. Of course, the search volume for "World of Warcraft computer" will be much lower than for "gaming computer" searches, but on the other hand, the competition for that term is non-existent. For the cost of a few cents per click, the key term "World of Warcraft computer" will target advertising at the game’s eight million subscribers.

However, don’t choose a few keywords and let them sit. Markets are continually changing and need to be monitored for new competitors and new products. Tactics for SEO and pay- per-click optimization also change constantly. For instance, if a number of computer manufacturers were to read this article and take advantage of these tactics suggested here for increasing ROI, the marketing value of advertising for specific key words might suddenly rise.

DOING BUSINESS ONLINE

The Internet has leveled the playing field for manufacturers. Via the search engines, anyone looking for a product gets listings of a multitude of companies large and small, all on the same back page. Of course, it’s important to back up all that good advertising with excellent customer service. Thanks to the Internet, any business can now interact with its customers in real time, any time, any place in the world. When customers log onto the Dell Web site in the middle of the night, they can order a customized computer, pay for it and have it shipped the next business day. Everything is handled seamlessly online without the need for personnel to take orders, and communication errors are fewer. Any company, regardless of size, can set up those same processes and compete with a Dell.

Via the internet, manufacturers can also find low-cost labor and components. Through a service such as Globalsource, for example, businesses can find many alternate sources for their needs domestically or overseas. It cuts out the middleman and the cost and time involved in extensive networking. Of course, in light of recent problems with products from China, some additional costs may be incurred in researching the source and performing quality checks. It’s better to build in those costs at the start than spending a great deal more later on a public relations disaster.

NEW TARGET: THE WORLD

Without a doubt, Internet usage will continue to increase. Although the penetration rate in the United States is about 70 percent, globally it is only 20 percent. That figure may well explode to 90 percent in less than 10 years, particularly with increased access from cell phones and other mobile technology. Soon it will be impossible to compete at all without an Internet presence as ever-growing numbers of individuals and businesses look for and purchase products online.

Forward-thinking manufacturers are willing to learn from the big players such as Dell in order to increase their business, develop a competitive edge and position themselves as industry leaders.

Rick Biederer is an internet marketing specialist with International Profit Associates, Inc. IPA and its related companies provide comprehensive business consulting services and business valuation services to companies in the United States and Canada. For further information, call (847) 495-6786 or visit www.ipa-iba.com.