THE BLOG
01/17/2014 04:33 pm ET | Updated Mar 19, 2014

The Best Way to Build an Online Business

So you finally resolved to start that blog or website this year to write about your passions in life and to share your loves, insights and maybe experience in order to inspire others. If it goes well, you might be able to turn that into a consulting business and attract potential clients from your writing.

The tried and true way -- the "build it and they will come" way -- was to author frequent posts consistently, and over time, build up substantial readership from all your social media efforts via Twitter, YouTube, Facebook and natural search (via SEO).

There's a better way to build a business, says Chad Hamzeh, author of Traffic Black Book 2.0 and owner of the acclaimed online advertising agency DSV2.

"You can't make your target audience do a Google search for you," he said, "but you can make them see your ad."

In this video intetrview, Hamzeh lays out the new way that clever business owners and marketers are starting Internet businesses.

"My advice is to test small in order to find some highly relevant traffic. Kill off what doesn't work and scale what does. It's the fastest way to get people to your site." What he describes sounds like an investment portfolio: Sell your losers and add to your winners. Hmm...

It's true, great written material is the central nervous system of your site or blog, and it's what makes for a valuable asset. But this model takes a great deal of time -- years -- to develop into a meaningful business. Don't count on traffic that you can run a business on, nor the riches you're dreaming about either.

Hamzeh echoes a lesson from his coursework: "You can actually design the marketing funnel, landing page, email subscription form, and advertisements before you have the material you want to sell even completed," he advises. "Why spend $4,000 designing a website or product you only have a hunch on? That's a big bet in terms of time and money -- and a vanity play. Get to the objections right away, and let the marketplace help guide your business decisions."

This might seem heretical to some SEO gurus, yet Hamzeh is not alone in thinking there has to be a better way than relying solely on SEO.

Mike Colella is someone who would know for sure. An engineer by education, he left his otherwise "cush" job at Intel several years ago, and with an enormous amount of persistence, hard work, and trial and error, became a self-taught expert in contextual advertising.

"The more I think about it, I think Chad has cut through the fluff and got right down to what really works with online display advertising in TBB," Colella told me recently. "I think he's spot on. The guy invests over one million a month in ad spend for two clients," meaning that his clients have display advertising budgets with performance-driven goals. "Understanding what Chad is teaching is the key to making ad spend-return a positive ROI for any business."

Colella founded Adbeat several years ago, and according to Drew Kossoff of RainMaker Ventures, is "regarded as one of the smartest advertising minds on the planet." Adbeat's sole purpose is to provide competitive intelligence to Internet marketers and advertisers.

Want to know exactly what and where your competition is advertising? Adbeat will not only tell you, but it will show you the creative. Finding this out, one can start to sense that Hamzeh is on the mark about creating the product after you start advertising, which seems both counter-intuitive and certainly counter-emotional.

Black Swans:

The SEO model also has some inherent risks as well. Google changes its algorithm very frequently -- much more than you might think. As such, you could lose a meaningful stream of traffic... and there's not much you can do about it. Therefore, SEO could be the new "SOL."

"I think a better idea is to test the market's appetite for what you think is a good idea for a few hundred dollars of advertising." Losing $500 is better than losing $4,000 in investment -- not to say anything for the time it takes to build it out. Then what do you do once you have no money left.

"The whole 'build it and they will come' model of SEO isn't necessarily dead," he said in the interview, "but it's much harder to rely solely on natural search engine traffic to get by."

Culturing Internet Pearls:

First, it's very hard to write well, so you have to put in the hours to develop your craft. Many writers believe that they "make their money" in the rewrites or revisions. First drafts go in your Moleskin notebook, they you have to culture the pearl in the revisions. This may take five revisions that take between one to two weeks, especially if you're working another full-time job.

Even if you're a skilled writer at this point, it might not be the competitive edge you think it is. To say that the competition for valuable search terms (also called "keywords") is brutal would be a gross understatement. You can't count on a material amount of natural search traffic from Google, Yahoo! or Bing, for example, for a great while.

Plus, there are many factors to ranking high in SEO-land. One is to get popular blogs to point to your site. This tells Google that your site is relevant. Truly benefitting from the link-juice takes you several years to have any staying power, and Google is a fickle lover.

With paid traffic, you get both scalability and consistency, and you get it immediately. You can't get that with SEO or natural search, which is both seasonal and temperamental. The rankings on what are known as Search Engine Results Pages (SERP) change daily. What's more alarming is that if your post does not appear on any of the first three SERPs, no one is going to find you by digging into the 13th page of results pages. In space, no one can hear you scream.

It's better to shoot from the hip and collect the data as a test. Then go back and refine what you're doing with the data in hand. Don't think of the money you spend as wasted -- the data is very valuable. It's actually an investment.

For the most part, it's a waste of time try to fancy things up before the launch. "Let the market dictate what you're doing and how you'll do it," he states. "You might like a certain color and style and size of font, but you'll find out that the one you least like is the one that gets you the best conversions -- and in the end that's the metric you should focus on."