SEM and SEO spending expected to continue increasing, while online sales continue to bolster retailers

March 25, 2009 Leave a Comment

 

According to eMarketer, in spite of growing recessionary concerns U.S. marketers are likely to boost spending by as much as 16 percent in 2009 across the four basic forms of search engine marketing (paid search advertising, contextual advertising, paid inclusion, and search engine optimization.)  Investment is expected to grow to from $12.2 billion last year to $14.1 billion this year.  In addition, they suggest that by 2013 such spending could exceed $23 billion annually.  Another strong upward trend is in the area of search engine optimization, where eMarketer predicts that the size of the SEO industry could almost double in the next five years.

Anecdotal evidence from retailers selling online would appear to support the validity of making these investments.   In its annual report filing, Kohl’s just announced a 48% jump in Internet sales in 2008, joining Macy’s and Saks among retailers who have seen online success despite the recession.  This followed a strong ‘07 for Kohl’s, where online sales grew over 30%.  In the case of Macy’s and Saks, even as poor performing stores were being closed down their online sales were increasing.  What this means is that their brand was still resonating with Internet shoppers.

Online marketing for retailers is more than just SEM and SEO however.  In the case of Kohl’s, they struck timely deals with AOL, MSN and Yahoo during the holidays with eight home page takeovers, plus they offered regular “deal of the day” internet-only discounts on their web site.

The argument for investing in online brand development and selling via SEM, SEO and web site activities remains compelling, especially in these hard economic times.

Filed under eCommerce, Retailing, Sales, Search Engines Tagged with , , , , , , , , ,

Is online advertising failing or is it just the recession?

March 23, 2009 Leave a Comment

Eric Clemons has just written a very thoughtful article on “Why Advertising Is Failing On The Internet” on TechCrunch. His high level argument is that the Internet shatters all forms of advertising because it allows consumers to bypass them. He provides evidence for why people don’t trust ads, why they don’t want them, and why they don’t need them. He then goes on to illustrate how the Internet provides ways for people to meaningfully get the information they need without them.

He then moves quickly from advertising to the ecommerce space where he talks about new monetization models around selling real things, selling virtual things, selling virtual experiences, and selling misdirection (a subject where he expresses a lack of faith in Google’s revenue model and sustainability.)

Unfortunately, he falls short in the end of providing a list of concrete replacements for advertising. Can you really imagine a world without ads? Surely they will exist, perhaps in different forms, but they will be omnipresent.  In addition, he sites declining online ad revenues to support his thesis at a time when the culprit may be nothing more than the current recession. Whatever the outcome, his sweeping approach to the landscape of online advertising bears reading.

Filed under advertising, eCommerce, Marketing, Retailing Tagged with , , , , , ,

What does it take to start an online B2B community?

March 10, 2009 Leave a Comment

 

A typical B2B community is one that is created by a company intent on reaching and connecting customers to a) the organization or b) each other.  And it starts by asking a question – what do you want to build the community around?  More succinctly – what are your goals?  For some firms it is a stated desire to get feedback from customers or partners and make a closer, ongoing connection with them.   For others it is to reduce costs by having customers help other customers.  Still others desire to market to their customers in new ways using the latest social media tools.  Whatever your goal, be sure to define the “what” of your community before investigating the “how”.

bridgeAfter defining the goal (customer loyalty, lowering support costs, feedback, keeping customers informed, etc.) the next step is put a small team of people together who are highly motivated to seeing the community come to life.  Like many Web 2.0 communities, the best ones are built around the notion of high focus, high tailoring, niche-type destinations where collaborators can easily engage. 

Early on your launch team will want to do two things.  The first is to identify the key influencers who should be invited to join the community and whose presence will inspire others to join and participate.  The second is to pre-seed the community at launch with topics and conversations that relate to the overall goal.  But note that very quickly the team should be prepared to step away from micro-managing the conversation and let the community organically shape the content and topics on its own – because it will.

What about ROI?  In many B2B communities the ratio for those visitors who read versus those who add content is roughly 25 to 1. This means that every successful interaction potentially influences another 25 visitors on average.  Since influence is often correlated with purchase intent, start with the proxy that 2-5% of sales made to community members were influenced by the community itself.  Then you can refine the proxy value by surveying your members.  And for those B2B communities engaged in self-service customer support the cost avoidance equation is just as straight forward to measure.

However, the best thing about online B2B communities is that they are (in essence) the daily expression of what used to be annual or sporadic conversations of a highly important and valuable nature.  So putting a ROI on this part of the model is much more qualitative.  But there is little doubt that if your business can leverage the opportunity to connect important constituencies together in a real-time fashion, you will gain timely insights, customer credibility, and improved profitability (via increased sales, decreased costs) that otherwise were going untapped. 

Filed under Editorial/Content, Manufacturers, Marketing, Retailing, Sales Tagged with , , , , , , , , , , ,

Survey Shows Frequent Online Shoppers Respond to Personalized Ads

February 5, 2009 Leave a Comment

 

ChoiceStream, a provider of personalized product and display ads for large retail and entertainment brands, released their latest online personalization survey.   In it they indicate that retailer’s most attractive prospects–those who spend the most money and shop most frequently–are more likely to click on personalized ads than non-personalized ads.

choicestream1Overall, 39 percent of consumers are more likely to click on an ad if it is personalized – a meaningful percentage in its own right.  But the number climbs to 58% for those who shop online at least several times a month.  And the bigger the spender the greater the interest in personalized ads, with 50% indicating they are more likely to click on them.   Contrast this with only 22% of infrequent shoppers who make that claim.  In addition, 50% of the biggest spenders indicate that they are more likely to click on personalized ads than on non-personalized ones, vs. 32% of the smallest spenders.  

The data also supports a similar pattern in terms of consumer attention to the ads.  Over 41% of those surveyed indicate that they will pay more attention to advertising if it is personalized based on their tastes and interests.   That number increases to 49% of consumers who spent more than $250 online over the past six months, and falls to 36% for those who spent between $1-100.

The survey was completed by 504 online shoppers across a variety of age categories.  The bottom line is that if you are a retailer or manufacturer with loyal customers and those customers shop online and spend over $100 with you, personalized advertising that exposes products they are interested in can yield positive results.

To see a summary of the ChoiceStream survey, click here.

Filed under eCommerce, Manufacturers, Market Research, Marketing, Retailing Tagged with , , , , , , , ,

A Bounce in Consumer Sentiment? Some Encouraging Numbers, Especially for Amazon & WalMart.

January 28, 2009 Leave a Comment

 

A survey just released by ChangeWave shows that sentiment on consumer spending may have finally bottomed after a prolonged slowdown.  But they also cautioned that this tiny uptick in their data may be shortlived, much like their May ’08 data following the tax rebate checks.

hand-moneyThat being said, their Jan ’09 survey of almost 2,800 U.S. consumers  said that although fifty-seven percent of U.S. respondents said they’ll spend less during the next 90 days than they did a year ago – that is still three points better than last month’s December survey.  Better still, another 13% said they’ll actually spend more, which is two points better than last month.  Finally, 12% said they think the economy will improve in the next 90 days (up 3 points), and the 56% who said they think the economy will worsen during the next 90 days is still 10 points better than the December low.

What does this mean for online & retail?

For the third consecutive survey, ChangeWave indicates that in the home entertainment and network shopping category Amazon.com (+1 to 24%) is the clear momentum leader.   On the flip side, brick & click retailers like Best Buy (-6  to 37%) and bankruptcy-headed Circuit City (-2 to 7%) show significant weakness going forward.

Finally, for retail stores ChangeWave’s consumer surveys have consistently pointed to two retail winners since Feb ‘07: Wal-Mart and Costco (both +6).   The greatest weakness going forward is among traditional retailers, led by Bed, Bath & Beyond (BBBY) (-14), Sears (SHLD) (-12), Macy’s (M) (-12) and JC Penney (JCP) (-10).

For the majority of Americans who are still spending less, the primary reasons remain reduced household  income, saving money, and debt reduction.

Filed under eCommerce, Economy, Market Research, Retailing Tagged with , , , , , , , , ,

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