Journey Into Internet Marketing – Part 1 Tutorial

Introduction To Internet Marketing

Overview

This tutorial series is going to guide you on how to set up and run your own online business and market it through the Internet. It is designed to be followed by new entrepreneurs with either very limited or no experience in Internet marketing or business.

Throughout the tutorial series you will learn not only the fundamentals of Internet marketing and how it works, but also practical strategies that you can use to start making money online. A good Internet marketer should have expertise in a variety of different fields, and by the end of this tutorial series you should have the education necessary to be confident in setting up and marketing an online business.

The first tutorial in this series will explain exactly what Internet marketing is and how business’s profit through this field. You will also be introduced to affiliate marketing, which is the recommended way that you break into the Internet marketing industry if you do not already have your own products to sell.

1. What is Internet Marketing?

Internet Marketing in its simplest terms refers to the marketing and selling of goods and services using the Internet as the sales and distribution medium. What started as a cottage industry in the early nineties has mushroomed into a global multibillion-dollar industry that has been embraced by industrial giants such as Microsoft and General Electric.

The Internet has reduced the world into a global village, has made distance irrelevant and time zones little more than an inconvenience. Businesses in the remote parts of India can easily service clients in the bright cities of America, while goods produced in China are sold to consumers in all parts of the world.

The Internet has made all this possible and made Internet Marketing a reality.

Internet Marketing offers anybody over a certain age with access to a computer and access to an Internet connection, the opportunity to go into business for themselves with little or no start-up costs.
There are two main ways to conduct business over the Internet.

You could either sell your own products and services, in which case you will be doing business as a merchant. Many people though, have neither the time nor resources to create and offer their own products or services. Fortunately for this large group of people they can still earn significant sums of money as affiliates.

Affiliates are Internet Marketers who are actually middlemen or women. They will typically have a website of their own, and on this website they will promote or review a product or service that is provided by a third party (the merchant). Affiliates earn money by joining the affiliate programs of merchants, and earn commissions when visitors to their websites go to the merchant’s website by clicking on either a textual or graphical link strategically placed on the affiliate’s website.

In the brick and mortar world, businesses only make profits when they make sales… they only make sales when they have customers and clients… which they only get when they have prospects. Do you see the trend?

It all starts with prospects.

It is the same with Internet Marketing. You could have the biggest, baddest and even best website in the world, but without prospects, your website is dead on arrival.

So the million-dollar question is ‘how do you bring prospects to your website?’

Brilliant question… I thought you’d never ask.

Let’s go back to our brick and mortar business… how does it get prospects? I can think of a few ways.

1.Advertising
2.Word of mouth referrals
3.Passing Traffic

As you might have guessed, it is no different with Internet Marketing.

For advertising, Internet Marketers advertise on third party websites using banner adverts or plain text links. They can also use Pay-per-click campaigns, of which Google Adwords is probably the most popular. We will talk about this in more detail later.

Word of mouth referrals can happen in two ways. Firstly, someone could verbally give you the address of a website, which you then proceed to type into your browser. An example would be www.microsoft.com. The other way word of mouth referrals happen is when people write about a website on their own website and then include a link to the other website. Visitors can then click on the link and go directly to the other website.

Finally, you have passing traffic. For most Internet Marketers this is usually the cheapest and largest source of prospects. It usually involves Search Engine Marketing – where marketers try to get traffic by ranking high in the search engines. The technical name for this effort to rank high is ‘Search Engine Optimization’ (SEO). As you well know, Google is by far the largest search engine, so you can’t talk about SEO without mentioning Google’s role in Internet Marketing. We will visit this in more depth later.

2. Benefits Of Online Business

Many people, I imagine, dream of one day owning their own business. It is a sad fact of life that the vast majority of people never venture to do so. Perhaps it is even sadder, that even those that are bold and brave enough to become their own boss often return, with their tails tucked firmly between their legs, to regular paid employment.

Why? What is the problem?

Isn’t the answer obvious?

Think about costs… accommodation, suppliers, marketing and all the rest.

Between you and me, I think it takes a very brave man or lady to take on all these hurdles. The beauty of Internet Marketing is that it is all so different. Here are a few of the factors that make Internet Marketing such an attractive proposition.

Low Risk
You could try before you buy. Many successful Internet Marketers did not quit the safety of their jobs to become full time Internet Marketers. What they did was establish and run their Internet Marketing (IM) business in their spare time. When it took off and started to earn them a very decent income, they were then able to quit their jobs.

On the other hand, those that were not successful still had the safety of their jobs to fall back on.

The thing that makes IM such a low risk enterprise, apart from the low start up costs that we’ll discuss next, is the fact that you don’t have to be physically present to run the business. It can and should run on auto-pilot 24 hours a day.

Low Cost
To start up a brick and mortar business, you literally need tens of thousands of dollars. You need to rent or buy accommodation, then pay for inventory, staff, insurance etc. With Internet Marketing, all you really need is a well optimised website, and that will only set you back a few hundred dollars, and you are ready for business.

Yes, it is that easy and cheap, as you will soon begin to realise.

Exposure
When you have a traditional business, you are limited to a very large degree by your location. It is almost unheard of to have a small widget factory in Brazil supplying widgets to a large manufacturer in Germany. This, however, happens to be the norm with Internet Marketing.

You could be located in the middle of Surrey in England, but have most of your clients come from Australia and the US. Like I said earlier, the Internet has reduced the world to a global village.

Your next customer is only a click away, not thousands of miles away.

It is worth mentioning that the Internet has made it much easier for traditional businesses to extend the reach of their market. However many of the businesses still use traditional marketing practices, which quite frankly don’t work very well on the Internet.

Testing and Tracking
Advertising in the offline world is notorious for being hit and miss. As the joke goes, “half of every advertising budget is wasted, but nobody knows which half”. On a more serious note, this means that businesses spend twice as much as they really need to on advertising, and in return get a return on investment (ROI) that is 50% lower that it should be.

This is not the case with Internet Marketing. When properly done, the results from IM efforts can be tracked in real time, which means that testing becomes a very realistic and affordable proposition. With IM you can identify what works and discard what doesn’t.

Leveraging Time
Earlier on, I mentioned that you don’t need a physical presence to run an online business, because the business should be able to run on its own with little or no human intervention.

This means that you can use the time that you would otherwise have spent running the business, to set up yet another website. What I am getting at here is that a true Internet Marketer will usually have multiple websites running at the same time, each one contributing a profitable income stream to the bottom line of the online business.

This is Internet Marketing at its best.

Internet Marketing is not a JOB
Many people mistake certain activities for online marketing. Certainly, if you are entering data into an online database, that is not Internet Marketing. That is an online job.

The problem is more subtle than that though. An Internet Marketer could choose to spend all his time developing a web site, writing articles, designing graphics, programming scripts, optimising the website for search engines, dealing with support issues etc. If they go down this route, they will end up working in their business, but not on the business.

An Internet Marketer has the option to outsource all the activities I mentioned, but many are reluctant to do so, because they want to save money. What they don’t realise is that by working in their business, they are not able to leverage time (as mentioned in the previous section), and their business will grow in a very linear fashion.

Remember, Internet Marketing should be a business NOT a JOB.

3. Affiliate Marketing Overview

I briefly touched on Affiliate Marketing earlier on. Now I want to give a slightly more detailed overview of a business model that is arguably the most popular way of making money online.

Affiliate Marketing in a nutshell is the marketing and promotion of a product or service for another business in return for a commission. That business in IM parlance is often referred to as the merchant, and this could be a large established company like Amazon, or an individual person like you and me.

There are very few people who have been online for longer than a year that don’t know about Amazon’s affiliate program. It is one of the earliest affiliate programs on the Internet. I will briefly describe how it works for the benefit of those who aren’t very sure how Affiliate Marketing works.

Amazon, the merchant, has an affiliate program that anybody who owns a website can join. The website can be a personal blog, a business website, a directory… it doesn’t really matter.

Let’s assume that I own a website about pets.

On this website I have pages for rabbits, parrots, dogs, cats and so on. When someone visits my webpage about pet dogs, the chances are that they either own a pet dog or are interested in pet dogs. It is also safe to assume that they might be interested in reading books about pet dogs.

What I then do is display five or six popular books about dogs that are sold on Amazon, with a link to Amazon’s sales page for each of the five or six books. When any of my visitors clicks on the links, they are taken to Amazon’s website. If they end up buying the book from Amazon, Amazon will pay me a pre-agreed percentage of the book price as commission.

One important point to note is that the buyer does not pay a cent more for the book because they bought the book via my affiliate link. The price of the book will be the same, whether they bought directly from Amazon, or through an affiliate link.

That is a brief synopsis of how Affiliate Marketing works. I am sure that you are beginning to see the benefits of Affiliate Marketing to both the merchant and the affiliate.

Here are a few benefits of Affiliate Marketing to the merchant:

- They are able to reach a much wider market than they would otherwise have had been able to.

- Affiliate Marketing is one of the cheapest marketing models to implement.

- The merchant only pays for results. If a merchant ends up paying a lot of money to an affiliate that is only because the affiliate is generating a lot of sales for the merchant.

- The problem of paying for advertising that doesn’t work is no longer an issue with Affiliate Marketing.

It is common to outsource the management of affiliate programs to Affiliate Networks, which specialise in running affiliate programs. This makes for a cheap, hands off approach for the merchant.

It is not only the merchants who benefit from Affiliate Marketing. Many affiliates have found that Affiliate Marketing is almost the perfect model for them. Here’s why:

- Affiliates don’t need a product of their own to get involved in Affiliate Marketing. This means they can start earning money even without a product of their own.

- The start-up costs for Affiliate Marketing are almost non-existent.

- There are very many merchants, products, and networks to choose from. It is safe to say that an Affiliate Marketer will never run out of things to promote.

- It is entirely hands off. Once you do the initial setting up, money appears into your account without you having to lift a finger.

- You can promote numerous products at the same time without increasing your daily workload.

- Affiliate Marketing is low risk. If a product that you promote doesn’t work out, you can use the website to promote something else. Changing to another product will only take a few hours at the most.
Affiliate Marketing is an easy way to establish relationships within an industry.

As you can see, Affiliate marketing has a lot going for it.

Are there any disadvantages to Affiliate Marketing?

Though I wouldn’t really classify them as disadvantages, there are a few things you should be aware of.

- Since you don’t own the products, you are entirely dependent on someone else for your income. If a merchant were to collapse tomorrow, the income stream you derive from the business’ affiliate program would disappear overnight

- Although, there are quite a number of programs that pay out 60% or more commission, you still earn whatever the merchant decides to pay affiliates. When you have your own product you set the price and determine how much you earn from each product.

It is worth noting that there are different Affiliate Marketing models. Here are a few that you should be aware of:

Pay Per Click (PPC) – with this model, the merchant only pays when someone clicks on a link to his or her website. Using Amazon as an example. If I had affiliate links on my website. Amazon would pay me a commission each time that someone clicked on one of the links. The commission paid could range from a few cents to several dollars.

Pay Per Performance (PPP) – the merchant only pays for a defined result, which is usually a new sale or a new lead. These models are called Pay Per Sale (PPS) and Pay Per Lead (PPL) respectively. The Amazon example that I discussed initially is a PPS model. PPL models are popular amongst sales oriented businesses such as auto dealers and real estate brokers.

Cost Per Action (CPA) – This is similar to PPP and is the preferred model for many affiliate networks.

Conclusion

We have just concluded a bird’s eye view of Internet Marketing. As you can imagine it is a vast subject, with so much material to digest. The good thing about IM, is that you can start earning money almost from day one. It is the perfect case of ‘earn as you learn’.

In future sessions we will visit the different aspects of Internet Marketing in much more detail. We will take baby steps, and start with the easier concepts, and use these concepts build up our core knowledge and understanding of more complex subjects.

It is now recommended you proceed on to Part 2 – Niche Research.