SBA Statistics for 7A and 504 Loans, through 3/23/2012

-James Timberview/www.plurafinancial.com

The SBA recently posted its latest results for small business loans. With the SBA’s FYE being September 30, we are nearly halfway through its fiscal year.  Here are some interesting takeaways from the SBA’s loan approval results through YTD 3/23/2012:

• As of 3/23/2012, total SBA approved loan volume was down 35%, or $4.8 billion, YOY
  • The drop in approved Preferred Lender Program (PLP) loans was responsible for 39% of the total YOY decline.
  • The drop in loans to rural-based businesses was responsible for 20% of the total YOY decline in SBA loans.
  • The decrease of approved loans to Asian Americans was responsible for 13% of the total volume decline YOY.
• SBA 7A loans are down 45% YOY
  • 7A loans to existing businesses had the largest decline, shrinking 47% YOY.  This is likely attributed to 7A loan fees being reinstated in FY 2011; hence, borrowers (and lenders) were rushing to get 7A loans done prior to the fees going up.
• SBA 504 loans were up 15% YOY, slightly offsetting the 7A volume decline
  • The uptick in 504 volume was likely due to folks rushing to take advantage of the ability to use SBA 504 loans to refinance debt, a favorable attribute that is set to expire in September 2012.
• The mix of SBA loans approved for startups versus existing businesses has remained relatively flat at 23% and 77% of total volume, respectively.
• Wells Fargo approved the largest volume of SBA loans thus far in 2012, and an average loan size of ~$350k.
• Chase approved the largest # of SBA loans, with an average loan size of ~$125k.

To apply for an SBA loan online, or to learn more about the SBA, visit pluraFinancial or the SBA.

Corporate Jargon Translator – Part 1 (Stuff Managers Say)

                Corporate Jargon Translator

                                 

If you’re thinking about going into corporate America, you’d better understand the lingo first.  Here’s a quick guide for translating corporate speak.

Stuff Managers Say (and what it really means) in Corporate America:

I’m cautiously optimistic… (We’re going to lose money…)

We’re exploring strategic partnerships (We’re trying to sell this thing before the wheels fall off)

We’re going to make a right shift (We’re about to fire a bunch of people)

We need to right size the business (We’re about to fire a bunch of people)

Reworking the blueprints of the business (We’re about to fire a bunch of people)

At the end of the day (We’ll be fine eventually, but in the meantime it’s gonna get messy)

It is what it is. (The answer is no, but I have no good rationale for it.)

We don’t know what we don’t know. (The answer is no, but I have no good rationale for it.)

From 30,000 feet… (I have no idea what’s going on, but here’s what I was told by my Analyst 5 minutes before this meeting…)

We need to put pen to paper (You’re going to have to pull an all nighter on this)

We need to sharpen our pencils on this transaction (I’ve never even heard of this deal before)

I want to take your temperature (Here’s an idea that will be really good for our side)

Bifurcate (split)

We’re not going to cut our nose off to spite our face (…although once again out of context, I finally said this right!)

We need to kick this sleeping dog (Get this deal done or you’re a goner)

Let’s keep it simple (This doesn’t make any sense and you just wasted 5 hours working on a chart that nobody will ever read or understand)

We need an incentive based on aligning objectives (We need to be paid more money before I can approve this)

Balancing your point with the practical implication that… (You’re an idiot)

Split the baby  (We better be getting paid for this)

We need to craft a backdoor mechanism (We need to get paid without anyone else knowing about it)

Let’s create a side letter (We need to get paid without anyone else knowing about it)

You need to think outside the box (Find a way to get it done and leave me alone)

First gauge their appetite for … (Let’s see if they’ll fall for it before we put any real work into this)

I find that to be reasonable but there are all sorts of shades of grey (They’ll never go for that)

This is a win/win (Everyone has successfully been tricked into believing this is a good deal)

It’s a no brainer (Everyone has successfully been tricked into believing this is a good deal)

_______________________________________________________________________________________

This article was written by James Timberview, featured in www.plurafinancial.wordpress.com, the blog for plurafinancial.com – the online matchmaker between banks and small businesses seeking debt.  Special thanks to Brandon Hinkle and Joe Polaneczky, who contributed several corporate catchphrases to this think piece.  All rights reserved.

Small Business Development Centers (SBDCs): Free Business Management Support!

By: James Timberview/www.plurafinancial.com

A Small Business Development Center (SBDC) is one of the most underutilized resources available to small business owners.  Private business consultants can be expensive; SBDCs, however, are paid for by the government, so don’t pass up the opportunity to utilize their free, valuable assistance and vast networks.

According to the SBA (sba.gov), Small Business Development Centers are partnerships primarily between the government and educational facilities, administered by the Small Business Administration and aims to give educational services to small business owners and aspiring entrepreneurs.

An SBDC generally provides the following services for small business owners & startups:

• One-on-one consultation in business finance, marketing, management, research and more
• Assistance with business plan development and business expansion
• Help develop marketing plans and access market information
• Advice on securing a grant, bank loan, and equity investment
• Expertise in financial planning & analysis
• Training opportunities and business education

Quick facts about SBDCs:

• SBDC Locations: There are a total of 63 SBDCs nationwide, with at least one in all 50 states.  Click here to find the location nearest you.
• SBDC Cost: All services given at SBDCs are free.  Optional, low-cost training is also available.
• SBDC Eligibility: Anyone can join an SBDC, but strongest consideration is given to those who are creating their first small business and cannot afford private consultation.

SBA Requirements for 504 Loans, 7A Loans and Micro Loans

To apply for an SBA loan, check out www.plurafinancial.com.  To learn more about the SBA, go to http://www.sba.gov.

 

What Banks Look For in a Business Loan

Brandon Hinkle/www.plurafinancial.com

Banks primarily care about three things when making business loan decisions: cash flow, collateral, and personal guarantor strength.  Generally in that order of importance.  Let’s look at each item in more detail:

What is cash flow?   For banking purposes, cash flow is the pool of company-generated cash that’s available to make debt payments each year; generally this is EBITDA less taxes, dividends, and capital expenditures.  Banks don’t care much about projections; they want historical financial info to ensure there’s a track record of consistent, predictable cash flow.  When a bank is evaluating your loan request, they generally want a 25% cushion (for each $1 of required debt payments you should have at least $1.25 of cash available to make debt payments).  In other words, you need to have more cash flowing in than cash flowing out; ideally, 25% more!

What is collateral?  Collateral is the base of assets available for the bank in case the company is unable to make its debt payments with company-generated cash flow.  Banks typically want the “liquidation value” of the assets/collateral to equal the requested loan amount.  Liquidation value is basically the cash that could be generated by selling the collateral in the next 90 days.  The most common assets that secure a loan are accounts receivable, inventory, commercial real estate, and equipment.  Banks typically give a 20% discount to current accounts receivable & real estate, and a 30-50% discount to inventory and equipment.  For example, if your A/R aging shows $100k of current receivables, balance sheet shows $200k of sellable inventory, no equipment, and real estate that appraises for $500k, you’ll likely be eligible for $580k of debt: ($100k of A/R @ 80%) + ($200k inventory @ 50%) + ($500k real estate @ 80%) = $580k of net eligible collateral.

What is personal guarantor strength?  A personal guarantee (“PG”) basically gives the bank the right to go after your personal assets if the business goes defunct and is unable to service the debt.  A strong personal guarantee, for banking purposes, is one that has liquid assets in excess of the requested loan amount.  Liquid assets generally exclude retirement plans and funds held in trust because they’re not easy for banks to liquidate in a bankruptcy scenario.  The primary goal of a personal guarantee is to align your interest with the bank’s interest of getting the loan repaid.  Afterall, if you don’t stand behind your company, why should the bank?

Other things banks care about: 

• The company’s net worth because it’s an indication of the cash that would be leftover if the company was liquidated today.
• Your business & personal credit history, to gain comfort that you’re a responsible person of good character that finds a way to pay your bills on time.  Bankruptcy, for example, is usually a deal killer.
• Customer concentrations.  If most of your revenue is generated from few customers, you’re more vulnerable than most banks are comfortable with.

In conclusion, banks just need comfort that you can pay the loan back, plus interest, on time.  The more evidence you have of that, the higher your chances of getting a good loan proposal!

For more info about how to find the right loan for your business, check out www.plurafinancial.com

How to Create a 13 Week Cash Flow Forecast Model

-Brandon Hinkle/www.plurafinancial.com

If your company is growing quickly, or just tight on cash, you should prepare a “13 Week Cash Flow Forecast” to avoid running out of cash at any given point.  Why 13 weeks?  Because this ensures monthly AND quarterly debt payments are included.  Beyond 13 weeks is less relevant; the short term is much more predicable than the outer months.  The goal is to protect & predict cash flow.

Step 1:  Gather the required info

• Pull the company’s checking account statements for the last 3-4 months.  Highlight all recurring expenses/payments for salaries, debt, leases & rent, utilities, insurance, bank fees, distributions, capex, etc.
• Print out your detailed Accounts Payable (“A/P”) aging report.
• Print out your detailed Accounts Receivable (“A/R”) aging report.

Step 2: Create an excel spreadsheet that shows the weeks across the top, tracking the inflows & outflows of cash.  You should also create a column for Actual next to Budget each week so that you can compare actual activity to forecasted activity.  For example:

• Create rows for large sources & uses of cash.  For example, payments from large customers, payments to large vendors, salary expense, debt payments, etc.
• Enter your regularly scheduled payments (the ones you highlighted in the bank statements) in the weekly outflows column.
• Enter your Vendor payments when they are scheduled to be paid, per your A/P aging.  When you issue a purchase order (“PO”), enter the to-be-purchased amount into the Budget period you expect to make the payment.
• Enter your Customer cash receipts when they are to be received, per the A/R aging.
• Your total inflows less your total outflows equals your net cash flow for the week.
• You weekly net cash flow less your beginning cash balance = ending cash balance.
• Your ending cash balance plus your line of credit availability = total liquidity.

Step 3: Beware of common mistakes

• Keep a running tally of cash & liquidity.  For example, next week’s beginning cash balance should be equal to the cash balance at the end of this week.  If you have a line of credit, be sure to include line draws as a source (inflow) of cash and line paydowns as a “use” (outflow) of cash.  If you have a $1 million line of credit with an $800k balance, you have $200k of availability.  If you borrower another $50k this week, then you’ll only have $150k available next week.  The whole point of maintaining a 13 Week Cashflow Forecast is to protect & predict cash and liquidity so this part is important.
• Keep your line of credit availability updated, particularly if you’re on a borrowing base.
• Don’t confuse cash bank balance with book balance.  You can’t pay the payroll with funds in float…
• Be mindful of slow paying customers that don’t pay on time, don’t assume they will start now.
• Don’t forgot about open POs.  Just because it’s not on the A/P doesn’t mean it won’t need to be paid; some vendors send invoices late, don’t forget about the open POs.
• Ensure you can easily track results. Make sure the forecast is constructed with the line items that you can easily track.  Elegant projection models are useless unless the line items correspond to easily accessible data.  This helps easily explain/calculate any variance to the budget.
• Capex happens.  Build in some cushion incase vehicles break down or roofs leak.
• Be conservative, there’s no upside to making an aggressive cash flow projection.
• Be proactive.  It’s always best to seek financing when you don’t need it; utilize free resources such as pluraFinancial or local Small Business Development Centers to help match you with the best banks for your business.

 

The Benefits of Adding an Executive Coach to Your Team

-Karen Orlich/www.plurafinancial.com

Do you feel distracted from reaching your goals?  Not sure how to develop an actionable plan and/or do not have time to assess the results of current performance to make improvements?  If so, executive coaching may be a good option to help you become better focused and excel in the future.

According to The Center for Creative Leadership (CCL^®), a global provider of executive education, ‘executive coaching’ is defined as “a formal engagement in which a qualified coach works with an organizational leader in a series of dynamic, confidential sessions designed to establish and achieve clear goals that will result in improved managerial performance.”

The relationship between an executive and a coach is a collaborative one with the coach not only focusing on improving performance through overall skill assessment but also evaluating organizational position (i.e. examining the client’s role within the organization), assisting on execution of tasks/responsibilities, and assessing the results.

A primary initial task with a coach is to create a developmental action plan to achieve your goals.  After you execute the plan, you and your coach will review the results regularly and define new action plans to further your development.  Like a coach in sports, an executive coach ‘plays back the tape’ and provides guidance on how to improve your existing skills.

M. Nora Klaver, author of Mayday! Asking for Help in Times of Need and CEO of MNK coaching, takes an introspective approach when defining executive coaching, “People always talk about getting “out of the box.” Our boxes are built of all our preconceptions and existing perceptions.  The way we view life, our lives and our jobs can be incredibly limiting to us — no matter how successful we are.  An executive coach shows you how to blow up the box through insightful questions — ones you’d never ask yourself on your own — and offering new perspectives.”

Coaching is no longer negatively viewed as a way to help correct underperforming managers.  Instead, it is much more widely used as a benefit to support top producers.  Organizations worldwide spent over $2.0 billion on coaching in 2011, reported International Coach Federation and Pricewaterhouse Coopers in the 2012 ICF Global Coaching Study.  The study found that 41,300 coaches are active globally with the majority of coaches in North America and Western Europe.

Why is coaching so widely utilized?  “Because there is a great demand in the workplace for immediate results, and coaching can help provide that by providing feedback and guidance in real time,” says Brian Underhill, a senior consultant at the Alliance for Strategic Leadership.  “Coaching develops leaders in the context of their current jobs, without removing them from their day-to-day responsibilities.”

Fortune 500 companies such as IBM, GE, and Bank of America have embraced the concept and some have added coaches as integral employees of their Human Resources department.  The belief is that, under the right circumstances, one-on-one interaction with an objective third party can provide a focus that other forms of organizational support simply cannot, according to Harvard University in the Harvard Management Update.

The experiences of MNK coaching have shown that when people work with a coach they find themselves more excited about who they are and what they are doing which leads to stronger engagement, more energy, and improved performance.  The focus of coaching is to help clients “be more fully themselves by giving them new skills, tools and ways of perceiving situations.”

In order to be most successful, the client and organization must be committed to coaching and receptive to the unbiased feedback provided by the coach.  Unlike consultants, a coach is not brought in to independently assess and ‘change’ the organization or employee.  Their role is to improve the skills that already exist in high-potential individuals and leaders of the company.

Coaching is effective for executives who can say, “I want to get over there, but I’m not sure how to do it,” says James Hunt, an associate professor of management at Babson College and coauthor of The Coaching Manager.  “Coaching works best when you know what you want to get done.”  Perhaps, in spite of your outstanding track record, you haven’t yet gained the full interpersonal dexterity required of senior managers—for example, you’re not yet a black belt in the art of influence, which is so important in the modern networked organization.  Honing such a skill might be an appropriate goal for a coaching assignment.

As reported by Harvard University, coaching can be particularly effective in times of change for an executive.  That includes promotions, stretch assignments, and other new challenges. While you may be confident in your abilities to take on new tasks, you may feel that an independent sounding board would be beneficial in helping you achieve a new level of performance, especially if close confidants are now reporting to you.  More so, you may recognize that succeeding in a new role requires skills that you have not needed to rely on in the past; a coach may help sharpen those skills, particularly when you need to do so on the fly.

“One of the big benefits of a coach is that they aren’t tied to the organization, your friends, or anyone else,” says Washington, D.C.-based executive coach Linda Finkle and CEO of incedo Group.  The coach’s focus is with you only, so they support what you want and where you want to go.

“Even our families, who want the best for us, can’t be unbiased or totally objective. What you do or do not do impacts them, whether it’s positive or negative. A coach is not impacted by your decisions, your wins or losses, or anything else,” Finkle notes.  However, this does not mean that company goals are not supported by coaching.  In actuality, a coach is usually hired by the company to support the executive’s efforts to achieve those goals.  Even so, the role of the coach is not to represent specific company needs or interests.

The benefits of working with executive coaches are best summarized by their clients.  David Zimmerman, Manager of Infrastructure Engineering-Chicago Mercantile Exchange Group, states “A good executive coach provides straight forward, insightful, and honest feedback at all times.  My coach has helped me immensely and has been able to help me see myself and others in a different light, which has completely changed how I deal with each in many situations for a positive outcome.”

How to Do Internet Marketing! Demystifying SEM and SEO…

By Karen Orlich/www.pluraFinancial.com

Ever ask yourself, “why is SEO important?”…“what is Affiliate Marketing?”, or “how do I start Display Advertising?”  These questions and more will be addressed below as we try to help you demystify online marketing.

Internet marketing offers many options for companies to reach a wide audience at a fraction of traditional advertising budgets. However, the choices are extensive and the costs can add up quickly if you do not have an educated strategy.

eMarketer reports that U.S. internet marketing expenditures are growing rapidly and exceeded US$42.0 billion in 2011 versus US$16.9 billion reported by PricewaterhouseCoopers in 2006.  And, according to ComScore, a global firm specializing in digital business analytics, the average American spent 32 hours per month on the Internet in 2010.  Persons ages 45-54 set the high bar, averaging more than 39 hours online each month.

To better understand your options, internet marketing is broadly divided in to the following types:

• Affiliate Marketing: rewarding affiliate or partner businesses for new customers or site visitors obtained by the affiliate’s separate marketing efforts.

Affiliates promote other’s products or services as a virtual salesperson.  They do not sell the product directly but instead typically earn a commission from each sale or referral generated from their site.  According to Entrepreneur.com, your main goal should be to find affiliates that will reach untapped markets and make sure that you are not competing for the same customers.  Customers are more likely to buy through “trusted” company referrals but large affiliate networks can be time-consuming to manage.  Each affiliate should be interviewed and considered selectively before signing them up.  “Affiliates are an extension of your sales force and represent your online brand, so choose partners carefully,” states Entrepreneur.com.

On the flip side, revenue can easily be earned by joining another company’s affiliate program with no upfront cost.  The best strategy to determine which affiliates would be most beneficial to your network is to focus on your customers’ needs.  Then, join the affiliate programs that fill the gaps in your product or service offering.

• Display Advertising: using banner advertisements on a third-party website to increase traffic to a company’s own website and improve product awareness.

Research by comScore indicates that only 8% of internet users account for almost 85% of all display ad clicks and each month, 24% to 50% of Internet users delete their cookies, depending on geography.  This makes it difficult to track a machine and overstates the unique visitors to a website by 2.5 times.  Gian Fulgoni, Executive Chairman of comScore states, “Clicks on display ads are a misleading metric and don’t reflect the cumulative impact of ads.”

Investing significantly in display advertising should be carefully monitored to determine the most impactful ad design and placement.  Furthermore if your budget can accommodate the additional cost, A/B message testing is a beneficial practice to put in place with your display campaigns; running two different banner ad designs in the marketplace both pointing to the same destination, enables a company to best understand which message/creative combination generates the most interest.  Helpful sites to assist with advertisement and competitor analysis include:

Moat Ad Search is a search engine for online display ads that allows users to track companies by name and view their current banner ads, generally with the newest ads towards the top of the search page.  This can be highly advantageous for viewing competitor ad designs.

Google Analytics offers free website statistics and analysis to site administrators to analyze traffic flow for performance focused marketing primarily cost per click advertising.

Compete provides common website analytics including total unique visitors (defined as individual visitors to the site each month, counted only once, no matter how many times they visit a month), corresponding US ranking, traffic history, and sources.

SEMrush presents competitor keyword data and estimated Search Engine (SE) and AdWord traffic for any domain.

• Email Marketing: advertising a product, service, or brand using electronic mail.

Forrester Research, a global technology and market research company, estimated in their marketing forecast for 2011 to 2016 that United States firms alone spent US$1.51 billion on email marketing in 2011 and will grow to US$2.47 billion in 2016.  Advertisers can reach substantial numbers of email subscribers who have opted in (i.e., consented) to receive email communications on subjects of interest to them.

Almost half of American internet users check or send email on a typical day, as reported by the Pew Internet & American Life Project, with email blasts that are delivered between 1 a.m. and 5 a.m. outperforming those sent at other times in open and click rates according to the September 2011 publication of BtoB Magazine.

• Search Engine Marketing (SEM): promoting a website through paid placement or inclusion advertising to increase visibility and search engine result pages (SERPs).  SERPs are the listings that you see after you enter a keyword or search phrase.

This can best be achieved through Adwords which is a pay-per-click advertising program offered by Google for keyword searches common to your specific business.  The more popular the word (“keyword’), the more expensive the cost per click or CPC.  This is one of the most popular and potentially costly forms of online marketing.  It is Google’s #1 revenue source with the Company reporting US$28 billion in advertising revenue in 2010.

How does it work?  As an example, in the highly competitive banking industry, words such as “business loans” show 550,000 global monthly searches and, on average, costs approximately $3.60 per click.  In this scenario, if a business chose to pay for the use of “business loans” in Google Adwords, it will cost $3.60 every time a new IP address (“potential” new customer) clicks on the “business loans” keyword reference link and is directed to their website.   Companies improve their search rankings, by entering a higher cost per click (“bid”) and total budget than competitors, through Google’s online bidding process.  Any keyword and its estimated CPC can be researched at www.adwords.google.com.

• Search Engine Optimization (SEO): the process of improving the visibility of a website or a web page in search engines via the “natural” or un-paid (“organic” or “algorithmic”) search results.

One of the best ways to improve SEO is through content marketing.  Content marketing involves creating and freely sharing informative content as a means of converting prospects into customers and customers into repeat buyers.  “The primary goal is to obtain opt-in permission to deliver content via email or other medium over time.  Repeated and regular exposure builds a relevant relationship that provides multiple opportunities for conversion, rather than a ‘one-shot’ all-or-nothing sales approach” reported copyblogger.

In contrast to ‘interruption’ marketing such as television commercials or direct mail, content marketing involves delivering requested information with independent value that creates trust, credibility, and authority for the business providing the information.  “Content drives the Internet and consumers are looking for information that solves a problem, not immediate sales pitches,” according to copyblogger senior editor Sonia Simone.  Consequently, this can decrease sales resistance from potential new customers while also providing a baseline introduction to the advantages of a particular product or service.

There are many ways to benefit with content: blogging, video tutorials, email newsletters, white papers, and free reports.  Businesses can experience a greater success in their online marketing by, using these modes of communication with customers and prospects, providing valuable content (with periodic promotional messages), and avoiding sales “agendas”.

Think of the giant search engines such as Google having electronic “spiders” that continuously crawl through all the websites & content on the web, rewarding those sites with genuinely good, popular content while punishing irrelevant, stale, or irresponsible websites.

plura Financial, an online loan matchmaker between banks & small businesses, had the greatest success using content marketing.  According to CEO, Brandon Hinkle, “If you create fresh relevant content that’s both educational and entertaining, you’ll be rewarded by Google and customers.  Be a trusted industry expert with a delightful customer experience and good things will happen.”

• Social Media Marketing: using various social media sites to gain website traffic and attention.

Social networking websites allow individuals to interact with one another and build relationships. When products or companies join those sites, people can interact with the product or company.

Access Markets International (AMI) Partners Inc. 2010 – 2011 U.S. Small Business Marketing Activity and Spending Study revealed that social media marketing is estimated to grow 35% in 2012.  This is considerably higher than all other marketing categories which are slowly rebounding from the economic downturn.

Social networking sites like Linkedin, Facebook, GooglePlus, Twitter, YouTube and blogs allow individual followers to “retweet” or “repost” comments made by the product being promoted. By repeating the message, all of the users connections are able to see the message, therefore reaching more people.  It can be just as critical to use social sites to highlight your management and employees’ abilities and credentials as it is to market your company and product.  Be aware of information that is ‘public’ as it can be easily obtained, misunderstood, and potentially tarnish the Company image.  The primary goal of social networking is to create awareness and interaction, with the ultimate goal of creating content that “goes viral”.

• Referral Marketing: a method of promoting products or services to new customers through referrals, usually word of mouth.  This method is commonly known off-line and can be easily implemented in connection with your website.  This is affiliated with “link building”, which is an initiative to have other websites post your URL on their website.

Link building can be achieved either by contacting other websites directly and requesting that they post your URL, or the preferred method is that other websites genuinely admire your website/content enough to post it on their website in an unsolicited manner.

In 2009, Dropbox, a free web based service that lets you bring your photos, docs, and videos anywhere and share them easily, implemented a referral program that had a two-sided incentive for sharing: the person who signs up for Dropbox through a referral link gets more space than through a normal sign up, and the referrer gets additional space as well.  According to Drew Houston, the Co-founder and CEO of Dropbox, the referral program permanently increased their signups by 60% for the year and referrals account for approximately 35% of their daily signups.

Internet marketers also have the advantage of measuring statistics easily and inexpensively; almost all aspects of an Internet marketing campaign can be traced, measured, and tested, in many cases through the use of an ad server.  An ad server is a computer server, specifically a web server, that stores advertisements used in online marketing and delivers them to website visitors.

The content of the webserver is constantly updated so that the website or webpage on which the ads are displayed contains new advertisements when the site or page is visited or refreshed by a user.

In addition, the ad server also performs various other tasks like counting the number of impressions/clicks for an ad campaign and report generation, which helps in determining the ROI for an advertiser on a particular website.  Methods such as pay per impression, pay per click, pay per play, and pay per action can be used to determine which ads are more appealing to the viewers.  Results of campaigns can also be measured and tracked immediately by requiring a specific action such as clicking on an advertisement or visiting a website.

According to Marc Singer, an Account Supervisor at DDB Chicago, “In today’s digital world, content is king.  Consumers seek out and enjoy relevant content, and appreciate brands that make it easy for them to find engaging content in a variety of destinations.”

Internet marketing is forcing traditional marketers to change their conventional “one-way street strategy” (reach and attract prospects then convert to customers) to a “two-way-street strategy” (reach, attract, ‘engage’ prospects, convert to customers, gain their loyalty, and remain engaged through constant customer feedback).  Marketers need to better understand a consumer, how they receive info, which channels they participate in, and what their real needs are.  The best strategy is to provide customers with solutions to the problems they are looking to solve, when and where they are researching the problem, instead of trying to spray ads across television, radio, and print hoping someone will be interested and purchase your product.  These revelations are revolutionizing the marketing world and blazing a new path for the future.  In order to keep pace with competitors AND attract customers, businesses need to adopt some (if not all) of these internet marketing options.