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The first generation of Internet marketing saw Web site owners work on getting linked from other sites because they saw the benefit of the traffic from those sites. Their link strategies primarily related to finding sites that related to different products or services but had the same target market as theirs and
requesting a link from the site’s owner.

Usually reciprocal links were negotiated, placement was negotiated, and graphics and text for the links were traded. The second generation saw link strategies get a little more sophisticated, certainly as link popularity and link relevancy became significantly prominent elements in the search engines’ ranking criteria.

Organizations took a very strategic approach to getting linked from as many sites as possible to improve their link popularity scores. They implemented very thorough, organized, and detailed link strategies.

A common question that arises is, “How do you plan your Internet strategy in a world where technology is changing constantly?” This is a somewhat valid question. Yes, technology changes, but this does not affect only your Internet strategy; it affects every facet of your business. The best way to answer the question is with the following question: “How do you plan to grow your business?” If you don’t have an answer to this question, you have a bigger issue and probably should be reading a book on developing a business
strategy. More importantly, if the Internet (or related technologies) is not a part of how you plan to grow your business, you should definitely keep reading this Blog.

So how do you typically plan to manage the growth of your business? For starters, you forecast to the best of your ability where your business will be six months, one year, two years from now, and so on, and you develop a strategy to facilitate this growth both from a sales and a delivery point of view. How does this relate to the Internet? Well, your Web site and Internet strategy should be flexible enough to grow with your business without having
to start from scratch every time your business reaches a new milestone.Figure 2.1 illustrates what we refer to as “the foundation” for all Web site activities. If you don’t take the foundation into account, then the structure of your entire online marketing strategy will fall to pieces. The key components of your foundation include:
• Understanding your primary online marketing objectives
• Identifying your primary and secondary target market segments
• Having a clear understanding of what you’re promoting on your site.

A well-planned Internet marketing strategy distinguishes those businesses that are committed to the long-term potential of the medium from those who are simply marketing online because the market says they should. Typically, the latter can easily be detected. I am sure you’ve stumbled across a Web site that is nothing more than an electronic brochure—a site that does not communicate the promise of the brand to the target market or a site that is stamped “Last Updated . . .” only to display a date one or two years prior to your visit (or more.) These are examples of businesses that have yet to fully embrace the potential of the Internet and how it can not only grow their business, but also reach more users in a more cost-effective manner.

Planning plays a critical role in the success of your Internet marketing strategy with regard to your Web site itself, the online communication channels that you choose, and how you actually execute each campaign you launch to your target market. Those businesses that are capitalizing on the mainstream use of the Internet are those that plan their Internet strategies well in advance. For example, research reveals that the average online marketer that is using targeted PPC campaigns or organic optimization as a means of driving traffic to their Web site are dedicating on average 36 percent of their total online advertising budget to the medium. That represents 15 percent of their total online/offline advertising budget. Does this seem like a surprise? It shouldn’t. It’s not unrealistic for search engine exposure to be able to represent 60 to 80 percent of a Web site’s total traffic.

This is commonly known as the risk of keeping all your eggs in one basket. If all your assets are in one kind of investment, like stocks or CDs, you are not protected if that asset falls sharply in value. Even more dangerous is to keep most of your money in just one stock, bond, or CD because if something happens to it, you have no alternate assets to fall back on.

Many people’s biggest financial mistake is to have too much of their net worth tied up in their own company’s stock. Even if it is a wonderful company that has a bright future, these people lack diversification. The way to lower risk in this realm is to spread your holdings among different kinds of assets as well as among several individual investments within each kind of asset. One easy way to diversify is to buy a mutual fund, which itself holds dozens of stocks or bonds.

Even if prices are rising at about 5 percent a year, the value of your dollars is steadily eroding over time. If inflation is galloping at more than 10 percent, your purchasing power disappears much faster. Sometimes you don’t notice
inflation risk until you must buy something you have not bought for several
years and you are hit with sticker shock when you see how much prices have risen.That can be true when you buy a new car or when you make your child’s first tuition payment. You might mutter to yourself: “Why, when I went to college, it cost me $5,000 for all four years, and now that covers only the first semester of freshman year!”Welcome to inflation risk.

As you determine your tolerance for risk, you should understand several types of risk. There are ways to control and minimize each of these risks. But before we get to that later in the book, here are the most important risks you will face.

While most of your assets will probably be in dollar-denominated investments, you should be aware of the risk of currency movements if you own stocks or bonds denominated in other currencies.When you buy an individual stock  or bond in another country, or a mutual fund that invests in foreign securities, the value of your investment fluctuates based on how many dollars it takes to buy a unit of the foreign currency.

In effect, when you own a British stock, for example, your money has been converted into pounds. If the value of the pound falls against the U.S. dollar, your British shares will be worth less if you were to sell the stock and translate the pounds back into dollars. Conversely, if the pound gains value against the greenback, your British stock will be worth more if you were to sell it. Currency movements, which swing day to day based on each country’s economic and political conditions, can therefore hand you substantial gains or losses.

prices are falling sharply because of a severe economic contraction,you face the risk that the value of your assets will drop just as sharply.This is what happened during the Great Depression of the 1930s, when stock
prices, real estate prices, and prices of just about everything else plummeted. To some extent, deflation was a problem in the early 1990s as well, particularly in commercial real estate, which had been vastly overbuilt during the boom times of the 1980s. The key to sidestepping deflation risk is to make sure you do not have too much of your wealth in assets that could get hit by a deflationary wave. Treasury bonds provide a good haven from deflation, for example, because it is safe to assume the government will always honor its obligations to bondholders.

Unfortunately, for many people, the word risk, just like the word budgeting, has a negative connotation. “Why would I want to risk my hard-earned money?”you say. “I’m very conservative.”
The answer: If you take no risks with your assets, you will be unlikely to earn
a return high enough to achieve your financial goals. To alter the universal sayingseen in gymnasiums everywhere—“No pain, no gain”—when you get into the money world, the saying is “No risk, no return.”

Now, we’re not advocating that you take enormous risks with all of your money. Not every risky investment will earn a high return; if it did, it wouldn’t be risky. By diversifying your assets carefully among high-risk, medium-risk, and low-risk investments, you are assured of ending up with a larger pool of assets over time than if you keep all of your money in low-risk, low-return choices.In general, the further in the future a return is expected, the greater the risk. Because it is tricky enough to predict what is going to happen over the next few months, it is even more difficult to know what the long-term future holds. Therefore, under normal circumstances, the longer you commit yourself to an investment, the more risk you are taking. But because you are taking more risk, you should be compensated in the long run by a higher return.

At this point, the extent to which “the foundation” of your online strategy plays should be clear. Without setting measurable objectives, there is really no point in engaging in any online marketing activities. You can drive an endless amount of traffic to your Web site, but if the traffic isn’t targeted and you don’t tell the right story to your different target market segments,then the likelihood that you will convert a prospect to a buyer decreases significantly.

And how do you properly tell the story of your product or service? You have to understand it inside and out, in relation to your competition,and capitalize on any unique attributes of what you’re offering that will distinguish you from your competition.Throughout the rest of this book, all techniques, processes, and strategies relate back to this foundation. As simple as this may seem, these three components drive your entire online marketing strategy, including your Web site,Internet marketing campaigns, and benchmarks for measurement. When one item is overlooked or misinterpreted by a business, this oversight will be reflected in the results once your strategy is executed.

It sounds like a silly concept, doesn’t it? I mean, it’s your business, so you know your own products or services inside out, right? It’s amazing how many
businesses get caught up in the design process of their Internet presence and
lose sight of what it is that they are actually promoting online. Quite often,businesses get so involved in wondering how their Web site looks that they actually forget about what it is they are promoting, whom they are targeting,and why they are even promoting it online in the first place.

Can you see how the key components of the foundation work together? So, what are you promoting? Is it simply your products/services? Yes, this is what you want your customers to purchase, but selling to someone online is a lot different from selling to someone face to face. There are so many factors
that play an influential role in encouraging an online user to take the next step and engage your business and its offerings.

Each of these factors typically tie into your most fundamental (and often overlooked) online objectives.To illustrate, let’s assume that you are promoting Product X, which is a highly specialized piece of equipment with a hefty price tag. You are not the only competitor in the market that offers Product X, but your version of the product is slightly different from the rest. So why should someone buy your product? This is where you have to wrap your head around what you are promoting, while differentiating it from the other options that users have within the marketplace.