I had decided that paid search was the right answer for my business.  Many of my competitors were buying keywords and there was plenty of traffic in the space.  The popular terms were bid up to the $2-3 dollar price range and based on my conversion assumptions, I thought I could get the customer acquisition cost tuned to the point where we would have a strongly positive ROI.

After about six weeks of adjusting bids, killing off bad ad creative, inserting new ads, and reorganizing ad groups, BINGO, the cost per customer landed within about 5% of my target.  Needless to say, I felt pretty good and was thinking it was time to “pour some gasoline on the fire” by making a big budget request.   It seemed like a sensible thing to do given the acquisition cost and conversions rate.

Before making the “big ask” for budget I decided to take one more look at the numbers.  I wanted to make sure these new sign ups would become productive long term customers.  My back-of-the-envelope estimates prior to the campaign had assumptions for the average revenue per customer.  The real data, however, showed that these customers yielded 75% less revenue than our “typical” customers, pushing this campaign into the red.  I was relieved to discover this before dropping  a large sum of money into this medium.

The moral of the story: make sure you are measuring the right things and they are connected to real results. In most businesses, activity-based measures like leads or traffic are directional indicators.  In the end, revenue and sales are what really matter.

So, what are you doing to connect your marketing activity to bottom line results?

I was doing my early morning scan of Twitter when I came across a tweet with a shoutout to send “LinkLove” to anyone you want (ie friend, colleague or favorite blog).  After a short music video starring Hubspot’s resident triple threat Rebecca Corliss (singer, dancer and inbound marketer), I checked out the lovefest.  All you have to do to share the love is enter your Twitter name, your friend’s Twitter name and “their URL”.  Like all good viral campaigns, the made it “stupid easy” to share and it wasn’t long before my Twitter stream was full of their #linklove hashtags.

So why all the buzz about #linklove?  For those of use trying to build a business organically (OK, using inbound marketing as Hubspot would say), inbound links are gold.  When they come from a site with stronger page rank, this is even better.  I feel pretty confident that Hubspot has more Google page rank than 90+% of the people on Twitter (Hubspot = 6 vs. Tangyslice = 3) so the once the “linklove” pump is primed, this was highly likely to go viral.  Everyone wants a free link from a site with more page rank.

Or so they would think…  OK, I’m not an SEO expert (but I play one on television).  A closer look, however, reveals that linklove.hubspot.com has no pagerank (yet).  Thanks to all those inbound links i would expect this to improve pretty quickly.  Would it have been better to put it on www. hubspot.com/linklove instead?  Any SEO experts out there to offer an more qualified opinion?

A more cynical marketer might also suggest that Hubspot is getting the better deal as the value of the aggregate inbound #linklove links to likely exceeds the sum of the link building value to all of us “lovers”.  It doesn’t take an MIT degree to figure that it just doesn’t matter.  Unlike many forms of marketing, there’s no cost to giving somebody a link so in the end this viral campaign is fun and everyone loves a free link.

I once again take my hat off to these guys (Rebecca, Mike Volpe, Rick Burnes, et al).  Half the battle is coming up the idea for the killer viral marketing campaign and the other is making it happen.  They did both really well…  Congrats.

This means relentlessly evaluating legacy programs and testing new cost-effective approaches.  Here are seven low cost/no cost marketing ideas to try in 2009:

• Review your organic search strategy and make adjustment to your keywords.
• Create a link building plan.
• Dust off that blogging plan your wrote three years ago.  Contrary to the pundits, blogging is alive and well.
• Start a customer referral program.  If you already have one, talk with a few of your top customers to understand what you can do to make it more attractive.
• Open a Twitter account for your company.  I know this is trendy but it is where the action is today.
• Brainstorm a word of mouth campaign to generate new leads.
• Review and refresh all offers on your website for free content, webinars or trials.  Now is the time to make them irresistible.

I know there are probably many more things you can do.  The point is that it doesn’t always have to be the standard paradigm of run a program, generate a lead and close the lead.  Inbound marketing is all where all the action is today and this requires more innnovation and testing.

So what new things are you testing in 2009?

Proactive moves with Facebook will certainly increase Microhoo’s (Yasoft’s?) reach into the Web 2.0 arena but in the end of the day the titans of Redmond WA continue make most of their profits from desktop and enterprise software. While tinkering with file formats in Office will squeeze a few more dollars out of their legacy Windows platform, one has to wonder if they are still thinking it is 1999 and they can still win the search wars (when the real battles are elsewhere)?