Ola Edvardsson
Declan Dunn

"It's the end of the beginning... Online businesses must now prove they can generate revenue and profits instead of building market share and selling dreams. It's back to business as usual, with growth built on cash flow."

There are 2 types of companies on the Internet; those who test, and those who lose money.

Which will you be? Nothing else matters. Here's why:

1. Internet hype is over. Today you have to generate traffic and convert it to sales quickly. Being in the black is not a trend, it's a way of doing business.

2. Getting performance out of your advertising is all that matters. And testing is the only way to get performance, quickly and with precision.

If you have been following the Internet shake out in the news, watched Internet stocks fall down to zero and wondered what really works on the web then this article is for you.

Let us talk about what really matters. Monetization. It is a very fine word for making money on the web.

There is a shift going on at the moment in online advertising. While earlier it was ok to spend huge resources on institutional advertising now you need to make your ads perform.

A recent report by Forrester Research supports this trend.

Right now, 2001, 62% of all online advertising is performance based. ( Forrester Research, January 2001, Online advertising eclipsed )

What does this mean? You as an advertiser need guaranteed results. Your company website need ads that will put real revenue into your bank account.

Why are banner ads failing? Why are companies going out of business?

Some companies have a wrong business model from the start. Selling clothes online is not smart as an example since clothes are a typical "touch and feel" product.

But in many cases they have spent too much money on advertising that does not work. The effect: Customer acquisition costs go through the roof!

Here is what works. The web is an interactive medium. People can take action immediately.
Simply put: The web is a direct response channel.

The Internet is a direct marketing medium that grows through understanding what your visitors want. What you know about your audience will determine your profitability.

In fact… your existing web site audience will tell you what they like if you ask them.

In our daily work we test everything we do. Online visitors give us the metrics and tell us what they like. The customer is in total control.

Making money online is about two things.

1. Tapping into existing traffic flows on the web
2. Effective merchandizing

Do not try to create traffic from scratch. The traffic is already out there! The audience you desire to get is right now… this very minute while you are reading this sentence… visiting other websites.

During 2001 the two keys to profit on the web are online partnerships and performance based advertising.

To tap into other websites' traffic and customer relationships you need a good existing sales process in place. If you can´t sell your own offer… and show good conversion rates.... they will not be able to promote you to their visitors.

Let us show you the two steps you need to take to get Direct Results for your company.

Step 1: Monetize your existing traffic and study your users' behaviors.

Implement a tracking system to study all actions visitors take on your site.
Analyse your audience's expressed demands. What do they want? What do they like?
Test via email, Web sites, interstitials, etc. to see which advertising mediums provide the maximum effect for your message
Add offers from co-marketing partners to get additional revenue from your website audience.

Step 2: Plug your existing tested offer into other peoples web sites and start buying ads based on performance.

Get placement on other websites and only pay per performance.
Pay the publisher based on a completed action, not an impression.
You can compensate per lead, per click or per sale or a hybrid version of these three.
Track and administrate these relationships through affiliate program software.
This is what smart companies do today. They do not guess. Instead they test and apply working direct marketing principles into their online business activities.

Does this perspective differ from traditional advertising agencies that spend millions of dollars on banner ads mostly funded by venture capitalists and the stock market?

It certainly does.

Building a successful brand should be based on a good ROI measured instantly. And the best branding is giving your users a good clear visitor experience and having them take action and start a dialogue with your company.

While you are doing this make sure that you monetize every single action they take.

Branding is important. But revenue and performance will keep you alive.

Ola Edvardsson
Declan Dunn