onlinemarketing

Yahoo! Shopping marks up Williams-Sonoma Prices 1000x

The Internet is a great thing and technology always keeps things fun. As you can see in the screen shot below, it looks like an apron, sold on Williams-Sonoma for $19.00, is available on Yahoo! Shopping this morning for $19,000.00. I know Yahoo! had an exclamation point in their name for a reason! Hurry while supplies last.

Get the feed fixed Jerry! (No, I don't really think he knows/cares.)

Response to WSJ.com 8/21/07 Opinion Piece entitled "Googling 'Monopoly'"

JP's Note: The Wall Street Journal online is a pay site and the opinion piece I am responding to below is available only for subscribers. The Opinion piece up for discussion appeared in the 8/21/07 edition on Page A14 and was written by Thomas M. Lennard and Paul H. Rubin, both affiliated in various capacities with the Progress & Freedom Foundation. I would love to point to the piece online or better yet, post it here, however this is against WSJ policies. Perhaps Mr. Murdoch will change this policy in the near future - one could only hope.

Thankfully, the Progress & Freedom Foundation took the initiative to post the piece here.

Seek First to Understand, DoubleClick that is

Gentlemen -

I just put down yesterday's WSJ Opinion page and couldn't help myself but to drop you a friendly note. My personal opinions about the practical implications of Google's proposed acquisition aside, I find that your comprehension and dismissal of a possible Google monopoly is cursory and premature.

In your Opinion piece from Tuesday, August 21, you offer counter points to the each of the two chief complaints you have heard about the Google/DoubleClick acquisition. As a practitioner of the art and science of online marketing for the past 8 years, I am compelled to share with you the total scope of the services DoubleClick provides to its clients. Knowing this is a key but overlooked point germaine to the first argument you surface. The second argument you call out, the "privacy issue", I will let lie as that is the more emotionally charged and headline worthy aspect of the two argument. Frankly, I agree with you that targeted marketing is better marketing and I embrace cookies as the lifeblood of the Internet. However the latter privacy argument, on which you spend approximately half your space (just eye-balling it), is not where the real impact will be to the online marketing world both from the perspective of the marketer and the "marketee". As a "market-oriented think tank", I would have surmised that more thought would have been spent on the fungible market implications of this acquisition.

The basic premise of the first argument is that Google places text ads mainly on its own Web site, while DobuleClick delivers ads from advertisers to Web sites. Both true, however this river runs deeper. Google's revenue also comes from the distribution of their ads into the Google Network and the Google Content Network. Another heavily marketed (and tracked) part of the Google Advertising Network is their AdSense product that distribute text ads to whoever can plug them into their webiste and shares the cost per click revenue direct the Web site publisher. Despite the huge net cast by the Content and AdSense networks, one must guess that today the current percentage of revenue and total amount of impressions definitely tilts in favor of the Google.com domain. Google purposely keeps a tight leash on the exact definition and scope of these off-domain networks. I am surprised that Google can get away with such a high degree of ambiguity and outright circumspection, especially for a public company, however that is an entirely separate matter. Regardless, Google syndicates its ads and its growth is contingent upon further distribution. Thankfully advertisers can opt out of content network distribution as the performance for many ROI conscious marketers on the content network is pitiful. The point is that Google does deliver ads from advertisers to Web sites, just like Doubleclick.

Further, Google is effectively cutting out the value-added broker in its acquisition of DoubleClick. You cannot dismiss the consolidation of power that is forthcoming. Is it a monopoly in the true sense of the word? Maybe not, does it have the makings for one in a year or two - you bet. The absolutely brilliant, "get out of jail free card" is that Google can never be a monopoly in the truest sense of the word as it is not a price maker - arguably Google is only a market maker. Despite this phenomenon, DoubleClick and its over 1,500 clients collectively spend a lot of money on Google Search. In addition, the number of Affiliates through the DoubleClick|Performics side of the business that buy search from Google only increases the amount of ad dollars being spent. In addition, Doubleclick offers search technology (DART Search) and full service search via Performics Search. This is real money being spent on real advertising and real services. Not to mention the insight to MSN and Yahoo! search efficacy, technology and processes would be of the utmost strategic concern to any online marketer who currently advertises on those two venues via Doubleclick (not to mention Microsoft and Yahoo!!). Google is trying to own the relationship from cradle to grave and extract as much money out of the online marketing pipeline as possible. This is arguably, for better or worse, the objective of a corporation. That is not the issue I take with your assertions. I would argue that it is important, in a free market, that some autonomy exist between the market maker and the participants in the market. Google is walking a fine line between trying to be the "one stop shop for all your Internet needs" versus their roots as a friendly, helpful and relevant organizer of information.

The downside is thus - history has shown time and again that over the long term, the free market will resist any one entity that disproportionately controls the potential future revenue of many market participants. The majority owner of any market (natural or otherwise) is wanton to abuse the power - oil, telcos, diamonds, public utilities, etc. The barriers to entry to compete against Google are being raised on a daily basis and Google is no different than the aforementioned monopolies despite their altruistic "do no evil" leanings.

Do not be mistaken: Google is on the warpath, they are super smart, they are motivated and they have battles raging on numerous fronts (FCC Spectrum Auctions, Internet Backbone Purchasing, and an intense focus on their own holy trinity of products: Checkout, Product Search and Analytics) all coordinated by and fed into a master, long term plan. We are at the start of a race. The future scenarios and implications of these strategies are just starting to show and as the writing on the wall becomes clearer to more people, the pace of Google's machinations will only intensify. A fascinating future for sure and one I am excited to participate in. As you folks look at the implications of the digital revolution on public policy, stop and take a look at the real long term impacts as opposed to some near term objective that to the interested outside observer look to more fan the flames of capitalism than to really look under the covers of the dynamics between Google and Doubleclick.

Thank you for evoking the thoughts and instigating a very helpful exercise coordinating a lot of once disparate ideas. I very much appreciate the opportunity to share my point of view with you. I would welcome a rebuttal or an alternative point of view from your side of the fence.

Affiliates Beware - You may be next

The Affiliate Marketing Industry has long been an industry of positive friction. Traditionally, there have been three hands in the pie - the Affiliate, the Affiliate Network and the Merchant. Recent months have shown the Affiliate Networks beginning to go direct and cutting out the Affiliates. Many a Merchant, as well as the big 3 affiliate networks (Linkshare, Commission Junction and DoubleClick Performics) have built their businesses with the blood and sweat of the affiliate marketer. However, the Affiliate Networks insatiable need for more top line revenue is forcing them to look to, or around, their Affiliate "Partners". The networks as they exist today will be not be recognizable in the years to come as they own more and more of their distribution.

For sake of this discussion, I will use our company as the case study but you can begin to see the Affiliate Network wanting to own the affiliate distribution channel. In the "cutting out" scenario, those Affiliates that are particularly vulnerable are the small-to-medium ones. Big ones, will get bought and that is a great exit, but if you, the Affiliate, don't get big enough, fast enough - then look out.

Quick Case Study

Background - In November of 2006, Bargainbetty.com struck a deal to provide coupons to MSN Shopping. We were fortunate enough to win this relationship with our industry expertise and network. We undertook a compressed development timeline and were able to provide the fully functioning feed in time to capture the Christmas 2006 selling season.

Fast forward to Shawn Collin's July 27, 2007 post sharing the email from Linkshare announcing their "new" relationship with MSN for coupons. Ok, so Bargainbetty was cut out - big deal, we will have to find more distribution partners.

The negative impact to our business is not the point. What is more relevant to the Affiliate Marketing Industry is the dynamic of the traditionally three way relationship. This dynamic is changing and Affiliates and Merchants will have to choose their partners wisely. The former "three-way" pie is rapidly consolidating to just two hands - the Affiliate Network (soon to be renamed as simple a "Network") and the Merchant. I tell you what - if I were in charge of Business Development for Affiliate Network upstart Avantlink or Share-A-Sale, I would use this as a major selling point to further consolidate their position with the thousands of small to medium sized Affiliates. Where the Affiliates go, the Merchants will follow. This is a classic case where a fragmented market and some dilution of the power held by the "big 3" would be good for business - at least for the Affiliate and arguably for the Merchant.

Google Investors Easily Drive Revenue

While talking shop this week with a fellow online marketing geek, the conversation turned to Google. My friend mentioned he recently purchased some stock in the search giant. Probably a pretty good investment over the long run. Half jokingly my friend said he had to leave our chat to go click on some ads and drive some revenue for his new investment. I am sure his contribution to Google's revenue would be completely insignificant even if he was smart enough to click on the high CPC words like "hardrive recovery" or "mortgage loans".

What struck me askew was the relative ease with which Google investors could drive Google revenue. No, this is not a click fraud diatribe. It is an age old investing philosophy to invest in those companies which you patronize. In the old model an investor would spend money on the company's products. If I owned Pepsi stock I would buy Pepsi products. This model retains its integrity as I only have a finite amount of money with which to spend on Pepsi products.

In the Google world the revenue event has an incredibly low barrier. That event is a click of course. The major difference with the click is that if I am investor in Google (unlike the Pepsi model) I am causing somebody else to pay Google money and theoretically I comparatively have more time to click than dollars to spend on Pepsi products. Sure some online purists would say viewing a page thus incurring an impression is an even easier revenue event. The difference here is that an impression is passive while a click is active. The integrity in the Google world is easily eroded.

The real question here that I am thinking through is: Is there another publicly traded company that has a revenue event that makes it easy (in other words, as easy a clicking") for investors to initiate other parties to pay the "invested in" company money?

One solution is for all Google investors to publicly declare their conflict of interest and any clicks from an investor (or an investor's company) be determined as non-revenue events. Even if the revenue from investors (whether the clicks are intentional or not) amount to nothing, it is still important to be above board on matters that rely on transparency like investing. Google might be all about "Do no evil", however I am not naive enough to believe the same mantra holds true for Wall Street.

Helping a fellow Geocacher

Update: Sat 05.12.07 @ 9pm EDT - greenbriel just let me know his GPS was found by the NYPD! I will promptly refund all donations. Thanks to everyone who chipped in with support.

A slight deviation from my normal Online Marketing and Ecommerce focus. For those of you who don't know, one of JP's favorite hobbies is geocaching. Geocaching is basically a giant easter egg hunt all over the world. It is one of my favorite mashups of online and offline and was one the very first true examples of "web 2.0" or "user generated content" or the "social web" long before such buzzwords were a tickle on the buzzword creator's tongue. More on that later, this post is intended to raise money for a fellow geocacher who was mugged while out the HRG Riverside cache in New York City. I have corresponded with greenbriel and have his approval to proceed with the donation. Here are all the details:

I received an email this evening from one of my old college friends who I turned onto geocaching. This email comes from the log (what you do online after you find a cache) published by greenbriel who was the unfortunate victim.  I have never met greenbriel but he looks to be new to the diversion. Here is the email/log:

Location: New York, United States
greenbriel found HRG Riverside (Traditional Cache) at 5/10/2007

Log Date: 5/10/2007
GOT MUGGED!

Well I found this nice little cache (only my second find), but as I was
leaving, I was attacked by a gang of 10-15 teenagers. They punched me in the
back of the head and tried to pull my backpack off me. I (probably
foolishly) resisted, because it contained my digital SLR, lenses, the photos
I had just shot for a client, and an ipod. As we tussled, I fell, twisted my
ankle (probably broken - getting it x-rayed today), and my brand new,
beloved Garmin 60csx + 2gig memory card fell on the ground. One of the kids
grabbed it, and they took off laughing in the other direction.

I got off lucky - I kept my camera and ipod, and the guy they attacked
immediately after me has a broken jaw. He was in the precinct at the same
time I was.

I am so incredibly bummed, I saved for a while to buy that GPS, can't afford
another one, and was looking forward to caching in England/Wales, and Maine
this summer. This sucks.

I spent hours in the police station, and they picked up 5 kids, none of whom
I could identify. The police went back to the park after they heard someone
tossed the GPS, but no luck. I'm a bit freaked because I have a 'HOME'
waypoint in there, but everyone tells me I'm being paranoid. I'm hoping they
imagine that they can be tracked by having it (as everyone keeps asking me)
and toss it.

Anyway, up until from this sucky event, I really enjoyed finding the cache!
I signed the log, took a 1 euro coin, and left a Compaq PCMCIA wireless
card. Please leave something nice if you take that.

I also took the coke TB, with the intention of taking it to England in 2
weeks, but without a GPS that's going to be hard. I'm not going back to
Riverside Park EVER, so unless they recover my Garmin (unlikely at this
point) I will probably drop it at the first cache I found, in Prospect Park.

Sorry for the long log, take care of yourselves out there!

<end email/log>

I have found quite a few caches in New York City when I can squeeze them in. I love caching in New York City as it has its own unique challenges and clever cache hiders. However getting mugged should not be one of those challenges. I have established a tip jar on this blog (look to the right) for the express purpose of replacing greenbriel's GPS Map 60CSx. This is my favorite unit and is never far from my reach. Two of my clients, Eastern Mountain Sports and J&R Music and Computer World sell this unit. I ask for other cachers and thoughtful readers to donate to the cause. J&R is currently selling this unit for $369.88 before tax. I will only leave this tip jar up until we reach the dollar goal. I will personally return (via Paypal) any donations over this amount and will vouch on my word to administrate this donation ethically. For those of you who know me, my word is my bond and for those of you who don't, write me at jp (at) downtownecommerce dot com to validate any questions you may have.

Thanks for taking the time to read this post and let's get greenbriel back up and running in short order. He leaves for Wales on a camping trip in two weeks so let's try to get him back "online" before he departs.

Sincerely,

JP

The Online Marketer's Paradox

"You can never win." As an online marketer you must accept this fact, actually more than accept, you must embrace it. In marketing, and online marketing specifically, you can never win. However, the ironic thing is that this is what makes online marketing a fun art (and science) to practice. Please don't get me wrong you can do very well by your business besting your own estimations and beating out competitors, but the win is always only temporary. Offline marketers can obfuscate their results, or lack thereof, with a lot of different reasons why sales didn't come about during a specific offline campaign. The beauty (or, yes, curse) of online marketing is that from an ecommerce perspective, there is no question what marketing spend drove what revenue.

At Downtown Ecommerce, we are not only online marketing practitioners, but we help our Clients learn online marketing along the way. I speak to our Clients about the "Online Marketer's Paradox" and particularly to the in-house online marketing staff about the paradox they must accept. This Paradox is evident in the eternal quest for maximum revenue and minimum spend. Unfortunately, more often than not, these variables work to each other's demise.

Over the past 7 years we have found some great wins where we were able to do both - drive great top line growth while lowering the spend-to-sales ratio - the holy grail of ROI metrics. Often web merchants will refer to this metric as the "AtoS Ratio "(Ad to Spend) or "ERS" which is an acronym for Effective Revenue Share (calculated as Spend/Revenue). A quick note that more savvy marketers have moved beyond spend-to-revenue and are loving the spend-to-net profit world of performance measurement. We are always on the hunt for these situations where you can drive up revenue and drive down marketing spend - we like to call these happy intersections "Nirvana". When we find these opportunities, you better believe that we take full advantage of them for as long as possible. More often than not these areas present themselves as arbitrage scenarios. Over time other players in the market do wise up and consequently the arbitrage margin narrows or closes altogether. At this point, the time is to go afield and look for new opportunities.

If you can accept the fact that as an online marketer you live in a world where you either didn't spend enough to capitalize on an opportunity or you over spent, sending good money after bad, you will do just fine. Balancing spend and revenue is your job and it is never easy. Learn to love the fact that you can always do better and that the quest for nirvana is inherent in online marketing too.

Luv the Southwest.com Redesign

At Downtown Ecommerce we focus on both increasing demand for our Clients coupled with improving on-site conversion - the rate at which browsers become buyers. The two really go hand in hand and a healthy conversion rate is a distinct competitive advantage that has compounding benefits for the ecommerce company. Marketing spends get more efficient, technology resource (time/money/bandwidth) allocation gets better, bosses get happier - all things about an ecommerce business get better.

That is why we don't stray to far from watching new website designs across industries. The new Southwest.com website which we noticed for the first time this week is a terrific improvement. Southwest has always taken the lead online in air travel and does a great job integrating their online and offline marketing campaigns. From not typically syndicating their ticket purchases (you can only fly on Southwest by ordering direct from them) not via an aggregator like Orbitz to their downloadable software application "Ding" that you will see marketed in their TV commercials.

We give the new site design the thumbs up for a few reasons:

- Large bold type articulating clear navigation with the verbs "Book", "Check In", "Check" and "View".
- Simplified tab navigation menu at top.
- Clear call to actions with Pricing front and center.
- 80 % of the content on the homepage is above the fold.

One very important thing to note is the allocation of page real estate to customer activities, in particular Email Sign Up. The Email Sign Up for Weekly Specials is below the fold on a large screen and a large browser resolution. While the "log In" button is big bright and orange in the lower left. Orange is the action color for sure on this site iteration. Emails will not be going away soon, but email is definitely becoming out-moded with new and alternative ways to work on retention marketing.

Southwest is clearly emphasizing MySouthwest account creation. This is a super important move. Southwest - via MySouthwest and the downloadable Ding software - is taking control of the relationship with the customer - owning their own destiny. Email delivery (not to mention getting it opened and clicked on) is not always a definite science with many opportunities for the customer to leave the interaction with the brand. Establishing a more permanent relationship is a slower process but will pay off over the long term with a more dedicated and engaged customer who has either set up an account (including storing credit cards and frequent travel itineraries) or has downloaded the software onto their machine.

Downloadable applications were really given a bad name over the past few years in the affiliate marketing (particularly in online retail) world due to nefarious implementations. I think Southwest.com onto something with their approach and new design. Hats off to Herb and the crew.

Ding! You are now free to move around the new and beautiful Southwest.com website.

Why Google's Interests are Not Aligned with Yours

Love keywords, big fan of search marketing as many folks I work with know. However, it is important that online marketers don't forget that Google is a company that can take a lot of your money and very quickly.  One thing I encourage our Clients to keep in mind - Google is not your friend, a helpful source of traffic (maybe "the most"), however they are in it for them. Case in point - when writing Ad Copy to accompany your keyword be wary of what Google uses for optimization. Google offers the ability to run many different Ad Copies and will automatically "optimize" the 3 vital lines of marketing text that is your ad. On the surface this is a great feature for a marketer that should optimize the ad buy and thus increase sales.

The caveat is to look at what Google considers a successful ad to be versus what you, the advertiser/retailer, consider to be a successful ad. For the most part - a successful ad in our opinion is one that drives sales. Arguments can be made in specific cases to run an ad for "branding" or "exposure" purposes, however in most cases the ad buy needs to generate revenue.

Google considers a high-performing ad to be one with a high click through rate (clicks/impressions). Google obviously gets paid on clicks, however not all clicks are created equal. If clicks go up on a non-converting ad then advertising spend will increase without a parallel increase in sales. When evaluating the success of ad copy on Google, be sure to tie it back to a monetizable event (a sale, a lead, etc.). Failure to do so will turn you sour on paid search marketing very quickly.

Always happy to help if you want to know more - don't hesitate to write/call.

Metrics-based Marketing - Still a Phenomenon?

Metrics-based Marketing is still foreign to a lot of companies when looking at the possibilities marketing online. I am surprised at the size and scope of companies who are still trying to figure out online marketing. The resources abound on the Internet for companies to study up and learn the ropes of online marketing - in fact there are very few other disciplines so well documented.

At Downtown Ecommerce sometimes we get so close to our area of focus we forget that much of this is still new to a lot of people. I am of the belief that there is a widening gap between the "have" and "have-nots". No, this is not a post of our two-class society but I speak of the knowledge of the power of the Internet and its ability to drive business both online and offline.

In fact, it struck me as a little odd to hear that Danny Sullivan (search marketing luminary) coined a new term at the recent PubCon in Vegas  - "metrics marketing". Many of us in the industry have been referring to this term, and thinking in these terms, for many years now. I do whole-heartedly respect Danny's insights and thoughts, but this one struck me as a step backward. One of the most revolutionary things I have heard about online marketing came from Danny - the reverse broadcast concept of search marketing. This concept is predicated on the fact that traditional broadcast is based on getting the loudest megaphone and shouting as loud as possible and hoping to find the right demographic with the right disposable income at the right point in time. Danny pointed out that Search is the inverse - in Search the right person ready to buy now tells you what they want. To see that Danny thinks "metrics marketing" is the next big thing and what we should now call search marketing is befuddling - however maybe Danny is coming to the same realization that many more people don't know about how to measure spend, revenue and profit online than do - if so, Danny and I are in violent agreement.

Before we get overly exuberant let us not forget that there is still a ton of marketing dollars out there that need help being educated about marketing online. Those of us who live and breathe this stuff are beginning to run too far afield of our current and future customers. Ask around, especially in the lucrative demographic aged 35 - 55. Here people are in the prime of their earning power and many people of this demo do not know about cookies and that, yes, you can count clicks knowing where they came from, how much that click cost and that you know what they did on your site.

If you need any help figuring out how to sell and market online give Downtown Ecommerce a call. We are happy to help.

Bargainbetty.com powers MSN Shopping Coupons

Bargainbetty.com (a Downtown Ecommerce Partners property) is powering the MSN Shopping Coupons section set to launch later today (11/8/06) or at the very latest tomorrow morning. MSN Shopping and Bargainbetty.com are working together to allow the coupons from Bargainbetty.com to be syndicated daily into MSN Shopping

 

MSN Shopping will be providing their users with the ability to use coupons directly on Merchants sites. Users will be able to look for coupons by Store or by Category. In addition certain merchants have offered exclusive coupons found no where else on the Internet for this exciting launch. Merchants are encouraged to contact Bargainbetty.com in order to submit coupons for inclusion within this new coupon environment.

Merchants need not be current MSN Shopping Merchants in order to participate. A few slots (as you can see in the screen shots) are able to be merchandised in order to showcase particularly compelling offers.

People are encouraged to check back daily as new coupons are added everyday.