Niche marketing is not a new concept and is based on traditional economic models using supply and demand to plot the long-demand curve. Due to geographical reasons and consequently transportation costs, reaching a critical size market that can be defined as a niche can be a challenge. Thanks to e-commerce and ever more efficient logistics within our economy the challenge is much dispelled. Niches can now be served across the globe and when quantified globally are quite sizeable and attractive.

Imagine an obscure, strange product that most people would never even think about paying a single dollar for. Now imagine that a very small percentage of world population adores the product and is willing to pay quite a bit for it. Offering that product online in a reasonably priced way can be quite lucrative. Thanks to e-commerce we can now sell these products to these individuals and still make a profit at low quantities assuming margins are high enough.

Everyone always wonders what is an appropriate price to pay for a click. This differs greatly for many firms as the cost of customer acquisition also differs from firm to firm. The cost of acquisition ultimately depends on the margin derived from a conversion as well as the overall effectiveness of conversion after the click is made.

Some advertisers pay as much as $80 per click according to Optimum 7. This seems quite high but its important to look at this number in relation to the type of business the advertiser does. If a single sale derives a margin of $200, a cost of $80 per conversion is reasonable, BUT, what about the conversion rate? if conversion rate is 100% then this is justifiable but what if it is a more realistic 1-3%? then $80 per click is guaranteed to end up in a negative ROI.

The average CPC is actually $3.5 according to Optimum 7. This is understandable and more applicable to most businesses with reasonable conversion rates. The important thing is to be able to rationalize the expenses when conducting AdWords campaigns.

Klout.com is a service that allows social media users to see how much pull they have with their social media contacts. It takes into account how many users “like” or share your posts as well as whether your posts are looked at. This is useful from firms’ perspective as they can identify which users to connect with in their social media marketing campaigns.

Typically, users with high Klout scores will get free merchandise from brands and will participate in discussions with brand representatives. This ensures that their posts are read.

This is another aspect of this tool that can be a great asset to advertisers: They can look at their own Klout score and see how effective they are at engaging with followers on Facebook and Twitter. Although it stops just short of showing ROI, the tool is a great measure of how effetively brands are engaging with consumers online.

Facebook ads have been around for a number of years. The revenue generated by this function has been steadily growing at the same time. The reason is that its unequivocal in terms of how well it allows advertisers to target consumers based on geographical, demographical, behavioural, and psychograpical factors. This benefit allows greater efficiency and effectiveness in how marketing dollars are spent.

So what is it that companies are using Facebook ads for? The chart below answers that question:

Mostly awarnesss it seems. This is kind of off as strange as the main goal in digital marketing is consumer engagement but its weird that only 35% of firms are actually using this for that purpose.

In recent years, there have been lawsuits flying around from Facebook to Motorola, (not to mention RIM, Microsoft, Google, Yahoo, and the list goes on). This is an interesting phenomenon and I think its a new arena for these firms to compete and hinder each other in the relatively unregulated, open online realm.

This is a diagram showing who is currently involved in lawsuits:

You know something is pretty complicated when a diagram explains it better than words. As the saying goes, a picture tells a thousand words.

My personal opinion is that this is ridiculous and unnecessary. I fully value the reasons behind patents but I think these giants have taken it too far.

There is a shift in how firms are allocating their marketing budgets. Marketers have to always be aware of how they can best reach their target market. This task requires research and knowledge of your market. The younger segment is spending more and more time online, whether its on YouTube, Google, Facebook, or one of the hundreds of other online sources of information. At the same time, they are watching less TV and paying less attention to print media.

This shift requires marketers hoping to target these segments to reallocate their marketing dollars to make sure their message is getting across and getting through using the right channel.

According to Equimedia, digital marketing budgets in the U.K increased by 14.4% in 2011. This is a significant increase to 4.7B pounds.

This is a shift that we will be seeing more and more as firms adopt to consumers’ media consumption channel shifts.