What Is Internet Marketing?

Overview

This tutorial will introduce you to the field of Internet Marketing and will cover some of its most basic concepts.

1. Introduction

The thought of working from home has appealed to many people for centuries, however it’s only in the last two decades that it’s turned into such a profitable endeavour. Ordinary people have been able to carve out multi million dollar business empires without leaving their homes, thanks to the Internet.

Most people think of the Internet as a great information medium, a great way to stay in touch with friends and family, meet new people, play games, and watch online videos through Youtube. What most people aren’t aware of is the commercialization that goes on behind the scenes. The Internet is, to many businesses and individuals, a money making machine. Whilst the Internet may have started as only a means of information sharing, it has evolved through commercial interest into a diverse environment offering everything from shopping and banking, right through to social networking, blogging, movies, education, and seemingly limitless other things that we never would have thought possible.

So what drives everything on the Internet? What makes a person, or a business, want to set up a site like Facebook, Google, Twitter, or even a site selling fruit and vegetables? Quite simply, it’s the potential to make money. Without commercial interest, the Internet would never have been anything like we know it today.

Every time you click on an advertisement, see a banner ad, or purchase a product, someone on the Internet is making money. You, just like hundreds of millions of others who are “online”, provide the incentive for businesses to set up websites and sell products and services. Even sites that don’t sell products directly, such as Facebook, still make billions of dollars due to the advertising that they provide for other businesses.

The Internet is a great commercial hub, and during your time here at the Heron Academy, you’re going to learn how to carve your slice of the online money pie through a field known as ‘Internet Marketing’. Whether you have modest goals of just making a bit of spare change, or have ambitions to create a million dollar online business; the tools and the knowledge necessary to do so are available right here at your fingertips.

2. What Is Internet Marketing?

Internet marketing is basically marketing that takes place on the Internet. Whenever a business or individual advertises a product online, they’re conducting Internet marketing. Marketing has become the backbone of the Internet for many businesses. A business won’t survive online if it does not market itself effectively.

So how can you make money through Internet marketing? Do you need a product of your own, or even your own business? Fortunately, you don’t. There are many ways to make money through online marketing, many of which don’t require any product, or even a website of your own. However, before we go in to any of them we should first explore exactly how the process of Internet marketing works.

The Internet Marketing Process -

In order for anyone to make money online, a transaction must at some stage take place between the consumer and a business. The transaction normally consists of the exchange of money (from the consumer) for a product or service of some form (from the business).

There are two ways for you to make money from this process:

1) either by becoming a business and supplying consumers with a product (being a merchant), or
2) helping businesses sell their products to consumers as an affiliate (affiliate marketing)

Setting up your own online product can be a lengthy process and requires some experience with Internet marketing. Since our aim is to get you started making money as quickly as possible, we will start by teaching you about helping businesses sell their products through a process known as ‘affiliate marketing’.

3. Affiliate Marketing

So, what is affiliate marketing exactly?

Affiliate marketing is quite simply helping a merchant (a product owner, such as a business) sell their products and in the process receiving payment based on your performance, such as receiving a set percentage of any sales you make. It differs from being an employee as you’re not receiving a salary or wage, but instead are paid based upon agreed “actions” that you perform for the merchant.

There are three main types of affiliate marketing -

1) Revenue Sharing
2) Pay Per Action
3) Contextual Advertising

All of these models have one thing in common: they rely on the affiliate performing an action of some form for the merchant (be it making a sale for the merchant, or simply sending a visitor to their site) in return for payment.

4. Niche Markets

It could be said that just about every industry in existence revolves around marketing. You most likely cannot think of a single business, industry or product that does not have some form of marketing driving it.

Marketing some industries online is more competitive than marketing others, and it may be impossible to break into certain markets without a large amount of capital or marketing expertise. Take for example the insurance industry. This industry is extremely competitive, with top advertisers willing to pay networks over $5 per person that they send to their website, even if they don’t purchase anything. Some affiliates may drive 1000′s of hits a day to an insurance website, resulting in tens of thousands of dollars being made per day. As you may have guessed, without a lot of experience, you won’t be able to break into a competitive industry such as this.

So, where do you start then?

You could target less competitive markets, such as cooking, herbal remedies, dog training, and things like that, but even these sorts of industries can also be very competitive. In fact, just about every mainstream market that you can think of is probably already flooded with high amounts of competition.

How then do you, as a new online marketer, make any money with so many experienced marketers out there? Quite simply, you find what’s known as a niche.

A niche is a segment of a larger market that has needs and wants that are very specific. For example, within the dog training market there may be a niche for teaching German Shepherd’s how to sit. This is a niche because it narrows potential customers within the dog training market to only those who have German Shepherds, and only those who wish to train their German Shepherds to sit. Therefore, any product that would be created within this niche would be targeted to a very specific type of person, and could be marketed as such.

A niche has two main benefits as opposed to a mainstream market. First of all, a niche has less competition. A niche within a market will almost always be less competitive than the mainstream market itself, since it’s appealing to specific types of people within the mainstream market.

Secondly, since a niche targets people that have a very specific problem they wish to overcome, there’s a greater likelihood they will be interested in buying a product that targets them. This can be illustrated in the following example:

Let’s say there are two people – Person A and Person B. Person A searches in Google for “dog training”. Based upon this search, we don’t know what sort of dog training their after, or even what type of breed their dog is. If we had a product that was just about “dog training” generally, then Person A may buy it, but there’s a good chance that the product won’t be what they’re looking for.

On the other hand, let’s say Person B searches in Google for “train German Shepherd to sit”. Based on this search, we know that Person B is most likely the owner of a German Shepherd, and wants to train it to sit. This is very specific information, and if we had a product that taught a German Shepherd owner how to train their dog to sit, there’s a good chance they’ll buy it. Compare this to Person A, who is only looking for more “general” information about dog training.

As you can see, a niche, whilst containing a smaller market, will almost always contain people that are more likely to buy a product. In Internet marketing, our aim is to find niches of hungry buyers that are looking for specific answers to problems they have, and are willing to pay money for these answers. The more information we have about someone’s problem, the greater the likelihood we can solve it. This is what niche marketing is.

All that’s important at this stage is that you understand what a niche is. In later tutorials you will be taught how to find a niche, research it, and market to it.

5. Search Engine Marketing

Having been introduced to the concepts of Internet marketing, affiliate marketing, merchants, consumers, and niches, you may be wondering just how you go about actually doing any marketing? Where do you actually advertise online? And how? This section will introduce you to what’s known as “Search Engine Marketing” (SEM).

You probably use Google to look things up, or if you don’t, you’ve no doubt heard of the company. Google is going to become both your best friend, and your worst enemy, during your time in Internet marketing.

People conduct billions of searches a month through Google, entering in millions of different keywords. No other search engine (including Yahoo, MSN, Altavista, or any other) comes anywhere close to receiving as many searches as Google does. They can almost be considered a monopoly, and when we refer to Search Engine Marketing, we always have Google in mind more so than any other search engine.

So what is Search Engine Marketing, or “SEM” exactly? SEM can generally be divided into two categories – Search Engine Optimization (SEO) and Pay Per Click (PPC) advertising.

Search Engine Optimization, or “SEO”, is the field of manipulating the ranking of any website that you find when you do a search in Google. Let’s say you were to look up the phrase “make money”. The results that appear on the left hand side of the Google search engine results page (SERP) are referred to as the “organic” search results. These results are ranked by how relevant Google thinks they are to the query entered. The field of SEO is about manipulating these results to our advantage, so that we can increase our own sites ranking.

The results that appear on the right hand side of the SERP are advertisements, referred to as “Pay Per Click” results. Businesses pay a set amount of money every time someone clicks one of their links here.

Obviously, it would be more beneficial to have a high ranking page in the organic search results, however since this is a long and competitive process, paying a set fee per click and having your site immediately ranked highly on the right hand side of the SERP is a lucrative alternative. The field of PPC, like SEO, is also very competitive.

Traffic & Hits

Traffic refers to people that visit a website. The more traffic a website has, the more visitors, or “hits” it has. A “hit” is quite simply a visit to a website. So if a hundred people visit a website, then it’s said to have “a hundred hits”. If a hundred people visit a website each day, it can be said to have “a hundred unique hits a day”.

More specific to this is what’s known as “targeted traffic”, which will be discussed in later tutorials.

6. Revenue Sharing

Merchants have products to sell, and the more they sell, the more money they make. For this reason merchants will recruit affiliates to market their products on their behalf, and in doing so will give them a percentage of any sales that they generate. This is known as revenue sharing.

Let’s look at an example that illustrates exactly what revenue sharing is -

Let’s say a merchant has a $40 product to sell. For every visitor that an affiliate sends to the merchant’s website that turns into a customer, the merchant is willing to pay 50% commission to the affiliate, which is $20.

This 50% affiliate commission is quite common and is usually the standard commission given for digital products, although it can be higher or lower, depending upon the market and the merchant.

That’s all revenue sharing is – splitting the profit from a sale among the merchant and the affiliate.

This system is beneficial for both the merchant and the affiliate. The merchant only pays the affiliate when an actual sale is made, preventing any possible loss of income on advertising, whilst the affiliate doesn’t have to worry about setting up a sales page, managing customer service, or having a product of their own – the merchant handles all of that.

Since revenue sharing is also the most “risk free” form of advertising for a merchant (they only pay based on performance), merchants will be willing to accept just about anyone as their affiliate, since it’s no loss to them if the affiliate doesn’t perform well. You’ll find many products offering revenue sharing, and this can be the most lucrative form of affiliate marketing if done properly.

Conclusion

This concludes the tutorial on ‘What Is Internet Marketing?’. You were introduced to some of the most important concepts and terminology within the field of Internet marketing, and should now have some understanding of how online business and advertising works.

We highly recommend you read our tutorial series ‘Journey Into Internet Marketing‘. This tutorial series is designed for absolute beginners to Internet marketing, and will take you by the hand and guide you through some of the most fundamental Internet marketing concepts, and will teach how you can apply them to set up your own website and begin selling products.