Hi, I'm Chas Edwards, vice president of sales and marketingfor CNET Networks Business to Business portfolio. Today, we're talking aboutthe brave new world of targeting.
Let me first start with some definitions and some historicalperspective. Here is the world. The old way of marketing was no targeting atall. You advertised to millions of people in hopes of finding a couple ofpeople within that universe that care about buying your product. So, if youlook at sort of the efficiency, let's say you reach one person out of everymillion that see your ad. We can do better than that.
So what I want to try now is the concept of targetedadvertising. Now, we're dealing with a smaller world here. We're dealing withfewer people all around, but we're seeing a much higher concentration of thesered people who are folks who'll buy your products. So let's say we get it fromone in a million to say 1 out of 25. Vast improvement as we move from the oldway to the new-targeted way.
The other thing that we're starting to see is moving fromtargeted to what I'll call micro-targeted and micro-targeted is saying,"Jeez, if the people we want to reach are the red ones, can't we justspend all of our money to only send our message to the red prospectshere," and then maybe we can go from 1 out of 25 to 2 out of 3, care aboutmy message and perhaps respond to it. So, you can see that as you move fromtargeting to micro-targeting, if you measure success based on marketingefficiency and conversion, 1 to 25 to 2, 2 out of every 3 is another vastimprovement.
But we also have to step back a little bit and say, as yougo from targeting to micro-targeting, the universe of people that you'retalking to shrinks. So let's say we have 400 people in this targeted scenario.1 out of 25 of them, say you get 16 new customers out of this, times 100 buckswe sell our product for $1600 hits the top line. Now, 2 out of 3 people overhere, we end up with 4 people and we made only $400.
So the first thing to think about is, if the goal is drivinglarger revenue numbers and bigger dollars, there's a value in targeting abroader audience rather than just micro targeting people that are predisposedto your product. Which leads me to the second reason.
Let's take a scenario of server consolidation. If you thinkof the ZDNet Web site, we have pages in news stories and form groups that areall about server consolidation, and so a company that sells servers in theserver consolidation market would love to put their ads only in front of peoplethat are actively discussing server consolidation. What is being missed in thescenario is that there are people here who don't yet know that serverconsolidation is going to be something that they do. So there are a lot of bluefolks in this scenario who, with a little bit of coaxing can be convinced thatserver consolidation is a solution for them. So we have a scenario over herewhere you have a choice, you can just harvest existing demand, people whoalready know that server consolidation is for them, or you can move over intothis scenario and say, "We're going to use a little persuasion, the artrather than the science of advertising to convince people that in fact theyneed your solution. Over here, we're creating new demand.
So as you think about your marketing spend, I want to remindyou don't forget the big picture, which is about total revenue sold and aboutthe persuasive art of advertising rather than the science of harvesting demand.
