You’ve heard the old saw: “I know half of my marketing budget is wasted. I just don’t know which half.” Once it was a wry comment on a common dilemma, but now it just doesn’t wash. Today’s digital technologies let you communicate with your best prospects, whenever you most want to talk with them, at scant cost. And you can measure your results.

Want proof? Watch how three PROFIT 100 companies have mastered the art of digital marketing — and take notes as you go along to see which of their techniques might apply in your business.

Closer and closer: Serenic Software Inc.

When Linda Nicholson arrived at Edmonton-based Serenic Software Inc. (No. 20 on the 2008 PROFIT 100) last fall as VP marketing, she discovered a problem. Serenic, a producer of accounting-management software for non-profits such as foundations and church groups, Serenic had been spending $400,000 a year on advertising in industry publications. But when Nicholson called new prospects to gauge their interest in Serenic’s flagship product, Navigator, she was alarmed to find they had never heard of Navigator. Or Serenic.

So, Nicholson hatched a bold plan: switch Serenic’s entire ad budget from print media to online applications. It made sense: Like many companies, Serenic’s website is the centrepiece of its marketing, offering demos, case studies and testimonials. It also hosts regular “webinars” that showcase Serenic’s products or provide special advice on fundraising, ministry management and other topics of interest to non-profit clients.

But Nicholson doesn’t think print ads lure prospects to her website: “We spent hundreds of thousands of dollars on advertising, and what we got back was minimal.” In one case Serenic even ran an ad offering a pair of noise-cancelling headphones to each prospect who registered with the company. Number of responses: One. “Working with the same publishers and the same publications, we took our money online,” says Nicholson. “We looked for ways that would enable subscribers to respond to us immediately.”

Serenic’s online ads tempt prospects to clickthrough by inviting them to webinars or offering premiums such as white papers. The firm’s Colorado-based marketing team monitors progress to learn what works and what doesn’t. “It’s just like any advertising,” says Nicholson. “The message has to be right there. People are so busy now that if you can’t capture their interest within minutes of seeing your offer, it’s never going to happen.”

Serenic also invests heavily in Google AdWords, the pay-per-click ad service that lets you pinpoint your target markets by bidding for selected keywords. Whenever someone in your market area Googles your keywords — e.g., “donations management” — you can ensure your ad pops up at the top of the search results. And you pay only if prospects click through to your site. But Nicholson notes the competition is getting hot: “We’re having to pay more than $5 [per clickthrough] to get our ads up high enough for people to see them and click on them.” Still, she says, “the ROI can be huge.”

She’s also sold on Webcasts, the online product demos or industry lectures that Serenic hosts twice a month. While they attract just 20 to 50 people each, she notes, they cost almost nothing to produce. And besides, the Web isn’t always about the masses. For many niche businesses, Web marketing means drawing your best customers closer and closer. Webcast viewers, for instance, are hot prospects for Serenic’s products. The Webcasts are also archived and made available to qualified prospects. “That’s almost more important than the live event,” says Nicholson. “These can be lead-generation tools for months and months.”

Recently Serenic and NPTgrantsearch.com teamed up to sponsor a Webcast on projecting revenue, aimed at top executives at non-profit organizations. Some 1,500 people registered, and 750 actually watched the Webcast. Better still, 200 others contacted Serenic for a copy of the video. These are “soft” leads, but Nicholson is patient: everyone who registered for the webcast provided their e-mail address. “We’ll probably continue to touch these 1,500 people every month or quarter,” she says, “until they tell us to stop.”

If your company has a hard-working website that drives sales or generates inquiries, you may find digital initiatives such as these actually easier than old-school marketing. Take Google AdWords, for instance: all you have to do is sign up (at adwords.google.com) and identify your geographical target markets, your keywords and the maximum price you’re willing to pay for a clickthrough. The software does the rest, publishing your ad on appropriate Web pages or alongside related search results — until you reach your monthly spending limit. Similarly, software such as Microsoft’s Live Meeting makes Webcasts and online collaboration easy to manage and host. You pay a monthly fee based only on the number of internal users of the product — not the number of customers who watch online. And once you have a list of prospects’ e-mail addresses (and, of course, permission to contact them), e-mail marketing is the fastest and cheapest way to contact a customer.

Nicholson has no regrets about taking her advertising digital. Besides being able to track results and follow up almost for free, she loves the opportunity to test Serenic’s offers fast. If she’s sending out 2,000 e-mails tomorrow, she might send out 100 today, in groups of 25 — each group bearing a different headline. Based on the response in the next few hours, she can then decide which headline to use for the full flight. “It’s not scientific,” says Nicholson, “but it’s better than the guesswork we had before.”