Yesterday Zachary Rogers of ClickZ.com had an interesting article about retailers Q4 search engine spend increasing (by approximately 17 per cent). That’s great news for e-commerce as a whole, but despite the spend increase, Rogers indcated subsequent click-through rates didn’t grow with the spend. Within the report, Justin Merickel, VP of Marketing and New Product Development for Efficient Frontier, pointed to savvy web buyers and comparison shopping as primary reasons for the click-through drop.

Wait a second.

Retailers are spending more on keywords, yet the predicted ROI is coming back flat? (or flatter than usual). Many of my marketing peers tell me one of the biggest reasons online marketers dive so deep into SEM investments is because of the predictable return it provides. And now the returns aren’t panning out?

Backing up a bit, it should be noted the report also indicated reduced keyword buying competition (generally speaking) than in recent years. Although the increased search spend didn’t translate into higher click costs for marketers. Essentially, online marketers and retailers are getting more bang for their buck, sort of. Based on this information, I’m assuming reduced click rates means a drop in overall paid keyword conversions (as far as these retailers search efforts go). I’m also assuming the reason for lower keyword competition is a result of bigger retailers spending more and the smaller retailers spending less.

Merickel was quoted saying comparison shopping is having a huge impact on flat click-through rates. I buy that as a partial reason, but not the only reason. Perhaps it’s also a case of ineffective marketing? With more keywords being bought and the pressure to meet the needs of comparison shoppers, I see a huge value in differentiated web experiences, targeted messaging and lasting impressions (ie. web personalization and similar tools). Merickel also hinted at shoppers having longer buying/conversion cycles, which makes sense as well.

Keeping this in mind, you’d think retailers serious about their search investments would key into visitor’s surfing habits and tailor messaging/web experiences around repeat visitors and multi-visit sales cycles (especially for higher priced merchandise/sales). There are ways to reduce and streamline the multi-visit sales cycle. If things like comparison shopping are having the effect Merickel is talking about, upping keyword budgets won’t fully solve the problem. You’d think retailers would be interested in maximizing existing investments rather than adding to them?

But no, Effective Frontier believes search spend will continue to increase by 10-15 per cent in 2010. I hope that increase includes solutions like web personalization that help enhance existing online marketing pratices (like search). Anything else would be foolish, right?

Hello and happy 2009 to all Sitebrand frequenters. Thanks for kicking off the new year by reading our blogs – we appreciate it and love all the comments that come with blogging. According to Chinese calendars, 2009 is the year of the Ox. So just how are oxen relevant to anything e-Commerce you ask? Keep reading to find out…

So apparently the United States is in a recession and has been for some time. Lately, I’ve been so immersed in various other things and may have missed out on such news. However, as sad as that may sound, I am up to date in things like Twitter (totally the new RSS of 2009, don’t you know), Amazon’s massive holiday sales spike, Chinese new year’s, terrible year end lists and of course, personalization. I swear my introductions are getting longer, but this is all going somewhere, I promise.

A recession, eh? Is that the thing that makes companies shrink budgets – more specifically, shrink marketing budgets? From talking to some peers, it seems a big trend for 2009 will see marketers finding cheap, inexpensive or free (the best kind) ways to promote and grow. I’m no genius, especially since I didn’t even know about this ‘recession thing’, but how does a company grow with limited/reduced budgets? While the aggressive side of me thinks there’s no time better than now to increase marketing budgets, I also understand the other side here – the responsible side of me, that is. And that could be why social media has and will continue to climb to the top of many marketers “definitely need to do/try that in 2009 lists”. I know, more lists at the beginning of a new year, but I digress.

You might be thinking: “social media is the buzz, but it’s not a proven revenue generator”. True and like all things, I’m sure social media will quickly evolve with that in mind over the next few years. Something to bare in mind here – social media is still very new and I don’t feel social media should be providing mass sales at this point. Mashable.com has a great survey about this, too. That’s where I see social media differently at this point – does it have to provide unassisted new sales, right now? I look at the Twitters, Facebooks, (etc…) as a part of the marketing mix, not an independent one. They will help the conversational aspect – a critical piece – with your customers and potential ones, but won’t act as the first and last points of contact to drive the sale.

Looking at this from an outside perspective, you can pay agencies, firms, specialists, etc… to run integrated social media campaigns, but it seems many companies are keeping it in-house. Whether financial reasoning or otherwise, marketers are taking notice of varying methods from big time companies like Southwest Airlines, Starbucks, Dell, all the way down to the mom and pop shops that are still around. And why not? They’ve done a great job reaching out to customers and speaking to them. Those familiar with my views from previous writings probably see this part coming: you’ve developed interest. You’ve cut through the mass and now they want to know more, so they return to your website, only to find generic messaging and content. Maverick and Iceman just called: they said mission failed – failed like the Detroit Lions historic no-win season. Back to my point, use social media to cut through the clutter, use personalization to get relevant. That’s a better 1-2 punch than Brady/Moss (from 2007, of course – sorry Lions fans). While you can have one without the other, the combined efforts are far greater than one on its own. Also, personalization is a better and more proven ROI effort than social media, as of writing this. Like all things internet these days, that could change in a hurry.

For a quick recap, I’ll leave you with an equation that should help demonstrate why personalization should be on your radar, why it makes sense in today’s economy and how it will help even the newest social media-ist get the message heard loud and clear, at the right time. Its not scientific, but I’m fairly sure it checks out…

1.    2009 = the year of the ox
2.    Oxen = methodical and detail oriented, yet have difficulty connecting with others (I swear I looked this up)
3.    Sitebrand = easily connects with specific audiences, sending relevance/targeted marketing campaigns
4.    Social media = easy way to speak directly to customers and is quickly becoming an integral part of all marketing plans (big and small)
5.    Year of personalization = 2009 (according to many, including me)

Therefore: 2009 is the year marketers/e-Commerce professionals must integrate social media efforts with Sitebrand’s personalization in order to deliver that 1-2 combo that your customers deserve.

feelbest.com

For online stores like feelbest.com using Sitebrand’s Segment&Serve Web personalization technology, creating more relevant experiences is comparable to having a virtual sales assistant. The concept behind Web personalization is very much based on what consumers have come to expect from the traditional brick and mortar shopping experience. Consider the traditional brick and mortar store where a sales person
easily observes and responds to variousshopping behaviors and body language. If someone is a repeat customer, they get to know their buying habits. If someone is a new customer, they work to build a level
of trust by offering helpful suggestions, sharing information about a hassle-free return policy, showing the layout of the store and so on. If someone is looking at high end fashion apparel, they look to cross-sell high end accessories. If someone is looking at sale items, they show them all the sale areas and so on.

Understanding visitor intent

But move online and suddenly the visual cues are gone. However, thanks to Web analytics, there are other cues the online marketer can follow. From the moment a visitor arrives, there’s intent to do something – to research, to buy, to register etc. And every move is monitored through Web analytics. The bottom line is that every move a visitor makes tells a story – from how they arrive to what they click and how long they stay on any given page. If someone arrives using the keyword “sunscreen”, they’re looking for sunscreen. If a Web site responds appropriately by showing a selection sunscreen and the visitor clicks to learn more or buy, they are that much closer to buying. They are being guided through the sales funnel. But if they bounce out of the site before converting – either pre-checkout or during check-out – something went wrong. And it likely relates to lack of guidance and direction from the Web site.

Responding to classic e-commerce challenges

Feelbest.com is Canada’s largest online health and beauty aid store and it faces many of the classic ecommerce challenges, including low conversion rates. As such, it is always looking for innovative ways to convert a higher percentage of Web traffic into buyers. The company also wants to recognize and respond to visitors’ geolocations; especially in terms of seasonality trends associated with many of its product categories, such as sunscreen. And it wants to create a superior, personal online experience that makes feelbest.com the online retailer customers turn to when they can’t find what they need in a regular store. The company actively encourages customers to tell it what they are looking for, no matter how obscure it may seem. The retailer specializes in finding and offering hard to find health care and beauty aid products. “If there’s demand – even from just five or ten customers – and the product is available somewhere in the world, we’ll go directly to the manufacturer and make it available to our customers,” says Darrin Pickard, feelbest.com’s sales and marketing manager.

The need to convert more traffic into buyers

The retailer’s approach is quaintly reminiscent of the corner-store owner who would get to know his/her customers one person at a time and stock accordingly. Although this personal approach to serving customers is like those of days gone by, the scale of the operation is surely different. Products are shipped to clients around the world with roughly 65% heading to the US. That’s also the nub of the challenge: motivating feelbest.com to explore an alternative strategy for further customizing and personalizing the Web experience of all visitors. The explicit goal was to find a solution that would convert a higher percentage of new and repeat traffic into sales. “Back in the late 1990s, it was easier to stake your claim as a top online retailer. But today, it’s much more competitive and you can never be complacent,” says Pickard.

Changing each visitor’s experience in real-time

Feelbest.com chose Sitebrand with its promise of superior traffic conversion to literally change the experience of every visitor in real-time while on a Website. What the retailer particularly appreciated
about the Sitebrand solution was the extensive support provided to help get up and running with a customized solution quickly. “Sitebrand is like a natural extension to our marketing team,” says Pickard. “It’s not a one-strategy-fits-all approach. What Sitebrand does is analyze your traffic and provide you with customized solutions based on your business goals and what your customers are looking for.” In the case of feelbest.com, the Sitebrand solution resulted in recommendations for the type, placement and frequency of marketing campaigns to target specific customers and boost sales in specific product categories. In Pickard’s words, “I think any online retailer worth their salt knows you can’t mass market on the Web and expect to achieve success. As best you can, you must try to speak to each site visitor as an individual. When you show people you are interested in getting to know them, they’ll show interest back. It is “Customer Service 101” and we’ve seen this with the personalization campaigns we’ve built with Sitebrand.”

Leveraging best industry practices to create smart content

All Sitebrand’s recommendations are based on industry best practices, backed by hundreds of successful implementations in similar industry sectors. This enabled feelbest.com to quickly develop “smart content” for specific customers and product categories. With the Sitebrand solution, specific areas of a Web page are allocated for the strategic placement of ads or campaign messages. Campaigns are developed around various criteria, including geo location, keyword searches, seasonal promotions, product categories, and many others.

Salvaging underperforming segments and sales

Campaigns result in a highly customized and personalized Web experience for all visitors from the moment they land on the Web site. In doing so, online retailers like feelbest.com report immediate and measurable increases in sales lift, superior click through, and higher conversion of existing traffic. “We see an immediate increase in the number of existing visitors converting in the checkout process,” says Pickard. “Seeing success around existing customers in currently established product categories makes us want to leverage Sitebrand to build campaigns around new, underperforming product categories. These new product awareness campaigns will be designed for existing and new customers,” he adds. In this way, feelbest.com will be able to test different offers with respect to new product categories. This ability to raise the profile of lower performing product categories will be designed to help increase average cart spends and total sales.

Close-up of first-time visitor promo

Recognizing a first time visitor has its rewardsTapping into underperforming segments, like first time visitors, has also proved highly successful. The first time visitor needs a different experience than the repeat visitor. They want a feeling of trust. They want to feel reassured they’re on a credible site.

When this first time visitor segment is served personalized messaging that reinforces credibility and trust versus the control group segment that receives no reinforcement, the personalized messaging always sees higher revenue per impression.

In the case of feelbest.com, the revenue per impression lift for personalized first time visitor campaigns is 207% higher than the default control group campaigns with no personalization.

Increased ROI from the feelbest.com e-newsletter

Sitebrand also provided feelbest.com with specific recommendations for print ads and its e-newsletter to create a more holistic and integrated marketing program. The company sends monthly emails to roughly 25,000 opt-in subscribers to promote the e-newsletter. Sales generated from the newsletter had begun to drop. Once the Sitebrand solution was integrated with the email program, feelbest.com saw an increase of 34% in the number of orders received within five days of the newsletter being broadcast. “Whenever we send emails, there’s an instant spike in Website traffic,” says Pickard. “It’s going to get even more interesting when we start adding more automation into the mix.” For an online health and beauty aid store, it will be a highly beneficial to trigger purchase reminder emails, i.e. “Your 90-day supply of vitamins is almost gone. Don’t be disappointed. Buy more now…”

The power of personalization for unique market segments

“The way I see it, not having a personalized approach to online marketing is like calling every one of your customers ‘Bill’. Worse yet, it’s like expecting them all to take advantage of a deal on mint toothpaste. But in reality, your customer’s name might be ‘Susan’ and she wears dentures…” says Pickard. “Website personalization allows you to find these unique market segments so you can serve up relevant offers that will convert visitors to buyers.”

NOTE: This post is also a featured article I contributed to the October 2008 issue of ”Direct Marketing” – a Canadian publication about interactive marketing and sales. Since it’s print-only (odd for an interactive pub, and apparently a website is in the works…but hey!) All that said, I felt compelled to share it online. I hope you enjoyed the read and I welcome your comments!