How well you understand internet marketing risks will make or break you.

Despite rumors of all of the easy internet riches that await the entrepreneur, instant millionaires and DOT-COM legends, there is also a genuine ugliness to the web. Unknown to newcomers, the internet is not safe, and to the unprepared it can be outright dangerous. As an analogy, let us consider a fictitious hero facing peril, escaping danger and winning the day in the end. It makes for an exciting story, but in reality we should stick with the “safe and boring.”

People ARE out to get you on the internet. If you are not careful they can, and will, take your money and run. Deceit can come from both small and big internet businesses alike.

The first part of setting up any Internet marketing campaign is to sign a marketing agreement or contract. You will be legally bound to the terms and conditions of the agreement. If you are not careful, you may be legally bound to a disaster. Most importantly, do not risk more than you can afford to lose.

“During the start-up days of my company, a PPC marketing contract was created with a Tier 2 PPC search engine company. The contract reserved key-word based search engine traffic to the websites I was interested in marketing. Everything was laid out in black and white – or so I though. Unfortunately through purposeful trickery on the part of search engine, and my hastily signed marketing agreement, this search engine socked us for thousands of dollars of unplanned expenses. Buried within the contract, they claimed that it could over-deliverdouble the amount of web traffic indicated. One simple line stated Campaign $15,000 -double’. When my campaign came due at the end of the month, the bill was for $30,000. The salesman did not inform me that the campaign would be doubled, there was no definition or explanation of what ‘-double’ meant, and I did not look closely enough at the contract to notice or ask what it was there for. I of course refused to pay ‘double’ and they immediately threatened with legal action. It was a mess.”

You must carefully read and scrutinize every word of your contracts. If you don’t understand everything clearly, then have it cleared up before signing. Below are other fundamentals in minimizing the internet marketing risks embedded within a contract.

Minimizing Contract Obligation Risks:

• Minimize Contract Duration – Approach every contract and agreement as if something could go wrong. Limit your risk and have a way out if things turn ugly. One critical step is to minimize the length of every contract. Most companies want you to sign a long-term agreement lasting 1-2 years. Don’t fall for it. Negotiate the shortest length of contract possible by asking for reduced obligation, such as 3 months or 6 months. If the campaign goes well, your vendor will be more than happy to renew, but if it does not you will need a quick way out.
• Performance Based Services – One miracle of the internet is the allowance of “Performance-Based” marketing campaigns, where you only pay the advertiser when a sale or request is generated for you. Hence, you don’t pay unless you receive a business acquisition. Many internet marketing companies allow performance based marketing campaigns, so seek these companies out first. Purchasing internet media, such as impressions, emails distributed, sponsorships, etc., are all a gamble and the odds are against you. There are exceptions of course, but wherever possible, implement campaigns where you pay only after you get what you want.
• Minimize internet marketing risk by minimizing the campaign size – Every salesman will want a giant obligation from you. Don’t be oversold, you must understand that there is a good chance that any campaign can fail and you will need to minimize your financial risks and obligations. Approach every campaign as a “minimum sized test” and if all goes well then you can expand the campaign the next go-around. Why obligate you and your company for a large campaign, when a smaller campaign will do just as well? As your relationship and trust level grows, then you may consider a high-scaled commitment.
• Sharing Marketing Resources – Not every company can or is willing to make the pre-payments necessary to launch a large marketing campaign. You may also find yourself in a situation where more leads or sales are coming in than you can handle. These issues can be resolved by finding a buddy. There are other companies out there just like you, doing the same thing and operating with a similar budget. Consider joining resources with another company or friend and launch a campaign cooperatively. Pool your resources and spread the costs and internet marketing risks. By working cooperatively, you can engage in internet marketing resources that would otherwise be unreachable.
• Identifying Online Fraud – Fraud happens, and it is common. Fraud can range from a tiny and almost unnoticeable incident on through to a glaring unmistakable disaster. Fraud is prevalent when dealing with performance based campaigns, but it can happen with other internet marketing techniques as well. Learning to identify fraud before it becomes serious is vital. Fraud generally affects the sales lead industry more than the retail industry, but both are susceptible. Your first line of defense is through your website, where fraudulent activities can often be detected. For example, a performance-based sales lead generation campaign may receive a lead with a Texas phone number, a Colorado zip code and a reported State of residence as Georgia. Your website must be smart enough to detect these inaccuracies.

Fraud Identification and Prevention Tips:

• Does the information provided make geographical sense? Can someone with a Texas phone number live in Georgia? Is someone opening up a phone book and generating a fake sales lead that you have to pay for? Reduce your internet marketing risk by focusing on an elaborate lead validation script within your website.
• Every person who navigates the web is doing so with a unique and identifiable IP address. If you receive multiple sales leads, each lead should come with its own IP address. If you are receiving many leads from the same IP address, then there is fraud. Your website designer should be able to track the IP address of every individual who is generating a lead on your website. If they can’t, then get a new designer or find help if you are designing your own website.
• For retail sales, does the name of the credit card match the name of the person who is making the purchase? Allow zero tolerance when credit card information does not match contact information. Make a follow-up phone call for international orders, as international internet business is plagued with fraud and is a large source for internet marketing risk.
• Spot-check your leads and retail sales sources. Periodically call the person who generated the acquisition. Make any excuse you can, such as a “customer satisfaction survey.”
• If a lead or retail sale fails your validation process, and you suspect fraud, DO NOT tell the lead generation provider “why” validation failed. Telling a fraud why validation failed is the same as providing them instructions on how to cheat you next time. If you are uncertain if your data is fraudulent, then verify the lead information manually, and ask if their request was genuine. An example would be when you receive that sales lead with a Texas phone number and they state that they live in Georgia. Your website should NOT say “sorry, but the State and phone number reported do not match.” A fraud will just click the “back” button, correct the mistake, and try again. Rather, just accept the lead and pretend everything went okay, but do not give sales credit for the fradulent lead that was generated. Record the IP address of the fraudulent lead, and block that IP from being able to generate a lead ever again. The fraud will not gain information about how to foil you next time.

Importance of Campaign Tracking and Traffic Analytics
Campaign Tracking plays a direct role with respect to minimizing internet marketing risk. Web tracking is your key in determining which advertising campaigns work and which do not. Be sure to implement web tracking in a manner that each advertising source can be individually monitored so that the poor performing campaigns can be weeded out. Powerful web tracking resources can be implemented for free with useful tools such as Google Analytics, or in great detail through professional paid tracking accounts.

Don’t Let Your Guard Down
Internet marketing can be volatile. What is working and generating sales today may be broken tomorrow. It is common for an effective marketing resource to become non-productive despite its prior successes. It is so common in fact, that the chance of you losing a viable internet marketing resource is probable, or even eminent. SEO may inexplicably fail and all associated sales cease virtually overnight. Your offer may become “old” and over-saturated across Affiliate Networks or your audience. A competitor may wedge you out, or dilute the market with their advertising. Vendors who were once effective may start sending you junk, or sales lead sources may decline leaving your phones too quiet for comfort. A myriad of unexpected internet marketing failures can and will happen, and you must be prepared to compensate. Whenever you become highly dependent on only one marketing channel, you are at risk. To combat this crisis, be sure to have a backup plan. Qualify multiple vendors or traffic sources and be ready to make the switch on short notice. If you don’t have a backup plan, you may panic due to your sudden loss in business and make hasty and inappropriate decisions that only worsen your situation, and expose you to increased internet marketing risk.

Keep on the defense with regard to internet marketing risk, and don’t be naive toward hostile intentions against you. Knowledge and preparation will significantly minimize your risks. With a good defense and knowledge of what is out there, you can shrug off lurking internet dangers or avoid them altogether. What remains is the marketing miracle of the internet.