Multiple Streams, Diversification and ROI

Posted by: Eric Blackwell on October 18th, 2008

One of the things that I often hear as a guy who helps guide people in their online marketing efforts is: “Help me get to the top of the search engines. I am spending WAY TOO MUCH on Pay per Click or (insert marketing venture here).”

That always concerns me to some degree. I want to take what I believe to be basic economics principles, throw them out here, and let’s see whether you agree.

Principle 1:

This is when a given geo-targeted market will have MANY channels that make up its online niche traffic potential. For example, the Louisville real estate market is accessed by MANY marketing channels (TV, radio, natural search engine optimization, Pay per Click, BuyerLink, etc.

Principle 2:

This is when the most effective first step in marketing to a geo-targeted market is to gain dominance of and HOLD a particular marketing channel WITHIN that given market. (Example: someone does PPC and gains a consistent and dominant presence there.) It helps them brand and has SOLID Return on Investment. That return on investment (since it is positive) may be higher or lower than another marketing channel, but it is YOURS.

Principle 3:

The next step is commanding several marketing channels to a targeted market creates DOMINANCE. The goal is to acquire a dominant voice among MANY marketing channels to a given market, all re-enforcing the notion that you ARE the expert. Dominating multiple marketing channels has a significant synergistic effect in that it simultaneously builds you authority and demoralizes competitors. This is on TOP of the fact that it diversifies your risk against the sad day that you might lose dominance in a marketing channel one day and have to rely on the other. This synergistic risk diversification / dominance creation works regardless of the ROI of the individual channels (as long as it is positive and often even when it is not!)

Principle 4:

Often times it is more difficult to hold dominance of one marketing channel than it is several. (Yeah…I am serious!) Whether you are using PPC, organic search, or BuyerLink or whatever…the infrastructure to convert these good folks into clients is the same. Better to leverage that infrastructure across those or someone else will and they WILL be more efficient at it because they will have more resources / practice.We hear all of the time about ‘multiple streams’ of income. I do not believe that is any different in the online world than it was in the pre-online days.

This is not a new position for me. I have talked about marketing channel dominance theory before and even used a TEAM of cooperating agents in our office to accomplish it.

The other concern that DOES and should come up is “Am I helping a competitor by supporting their marketing channel (since I am paying for access to it)?” Fair question. It is one that I often hear from people who wonder why I write on THIS blog (grin) since I am into search engine optimization…

The truth is that HomeGain only gets a SINGLE DIGIT percentage of their traffic from organic search. In my opinion that means that diversifying marketing channels and being branded across them is MUCH less of a competitive risk than most people assume it to be. There are others who have CLEARLY demonstrated their intent to take over the search engine marketing channel and those I do not cooperate with at all.

I would be interested in everybody’s thoughts or ideas on this as it applies to their own real estate business.

Should one marketing channel replace another or should they build upon each other?




2 Comments on “Multiple Streams, Diversification and ROI”

Brian Kinkade

Great post Eric. Right on target!!!

Ryan Ward

I think that you have to consistently reevaluate what streams are working and which ones are not. They all come down to ROI which can be measured in more than just dollars. If you invest tons of time in something and not a lot of money, but, it isn’t effective, it doesn’t mean you should continue it. It’s a constant effort…

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