Archive for Internet Marketing

The Big Flaw With A/B & Multivariate Testing

Multivariate testing allows marketers to test unlimited combinations of elements on a web page in a live environment and measure the significance of those changes on the site’s conversion rate by allowing the visitors to vote with their clicks.

The typical mindset for testing content on a website is to find which variation of site elements performs the best, and then implement those changes permanently: make a test, discover the winner, turn the test into what 100% of visitors see, and then move onto the next test.

There is a big flaw with this mindset: it assumes visitors don’t change preferences over time. The winning variation was good this week but that is no reason to think that it will be the winning combination the following week. One of the least understood aspects of e-Commerce is how much web visitor behavior changes from one time interval to another.

Giving the test more time to run doesn’t really solve this problem because all visitors who visit once the test has been declared over could be different than the ones that visited during the test. A winning variation is only winning during the time it was running.

The solution is to have the variables run constantly. A winner is never declared and implemented permanently because there isn’t only one clear cut winner. As the seasons and visitor preferences change, the system changes with it. For example: the combination of variables that are successful in the summer, when the products are full price and customers weigh pros and cons, read reviews and analyze costs to benefits, will be very different than the variables that succeed during holiday, when visitors are under a time crunch, want nothing more than a low price and to get in, buy and get out.
For this reason saying something like, “we need to do some testing to make sure our site is in tip top shape for holiday,” can cause some serious problems. How visitors act now is not how they will act then.

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The Limits Of Data Driven Marketing

Online marketing has up to this point claimed that big data which allows more precise targeting is the solution to all of marketing’s woes. I think that data can go a long way but there is a point when more data isn’t the answer. Focusing on the data too much can have some negative impacts.

First, left to their own devices, the data-driven direct response people will compromise and dumb-down everything to the point of complete blandness with the excuse of “it’s what the visitors want!” People don’t always know what they want. This is something that Steve Jobs knew well according to Guy Kawasaki:
“Apple market research” is an oxymoron. The Apple focus group was the right hemisphere of Steve’s brain talking to the left one. If you ask customers what they want, they will tell you, “Better, faster, and cheaper—that is, better sameness, not revolutionary change. They can only describe their desires in terms of what they are already using—around the time of the introduction of Macintosh, all people said they wanted was better, faster, and cheaper MS-DOS machines. The richest vein for tech startups is creating the product that you want to use—that’s what Steve and Woz did.”

Second, as soon as managers pick a numerical metric as a way to measure whether they’re achieving their desired outcome, everybody starts maximizing that metric rather than doing the rest of their job.

Third, data isn’t enough to motivate others. From Seth Godin: “In my experience, data crowds out faith. And without faith, it’s hard to believe in the data enough to make a leap. Big mergers, big VC investments, big political movements, large congregations… they don’t usually turn out for a spreadsheet. The problem is this: no spreadsheet, no bibliography and no list of resources is sufficient proof to someone who chooses not to believe. The skeptic will always find a reason, even if it’s one the rest of us don’t think is a good one. Relying too much on proof distracts you from the real mission–which is emotional connection.”

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Would We Be Better Off If We Could Measure Less?

The day is coming where users online will be tracked via their phone’s geo location so that a click on an ad will be tracked all the way to the in store visit. Revenue from the store visit will be attributed to paid search ads and ROAS will plummet. Investment in paid search will go up but only to a point.

I think more surety that every sale is being attributed to sales accurately will give more false confidence that the amount being invested is exactly the right amount. Marketers will be convinced further and will become more entrenched in treating paid search solely as a direct response medium – you put X amount of money in and you get Y out, both online and instore. Budgets will be under an even bigger microscope because there won’t be any question of how many people are being driven in store and online.

The full effect of advertising is unmeasurable. The intention, motivation and inception of attribution for the majority of traffic is is utterly unknowable. More tracking can give a false sense of understanding.

Advertising drives sales but it also has a less appreciated side effect. Bob Hoffman explains in this post that it also buys business insurance. This is the reason why Apple, even with no new offerings and lackluster advertising is still producing incredible returns. He explains, “the prevailing attitude among marketers that everything is immediately measurable completely ignores the insurance value. One of the reasons people continued to spend their money to purchase Apple products was not likely the result of advertising that they ran in that quarter. It was because of the advertising that Apple had run the previous 25 years. It bought them insurance.”

The long term effects from advertising don’t show up in the paid search report that you are running. More data won’t help. In fact, more data might lead some to believe that if it’s not in the data, it doesn’t exist.

“Where is the Life we have lost in living? Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information?” T. S. Eliot

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Marketplaces The Future Of Ecommerce?

Amazon, Ebay, Sears, WalMart and Newegg are a few examples of the stores that offer marketplaces for third parties to sell their products alongside the company’s own inventory (won’t be long until Facebook and Apple are there too). These marketplaces are making huge strides to weeding out competition and consolidating the ecommerce landscape by providing incredible solutions to both retailers and customers. The landscape for future of ecommerce could very well be made up of a handful of huge portals where the majority of transactions take place.

1. Any ecommerce retailer that wants to sell overseas faces translations, currency and payment processing hurdles that require incredible investment to handle. Amazon, Ebay and others are bridging these hurdles for anyone interested in selling online. By the time all the other US retailers figure out how to set up their websites all over the world, Amazon and Ebay will already have huge market share overseas.

2. Mobile shopping is exploding but the user experience for mobile websites continues to be difficult. Every site a visitor goes to is unique, requiring them to relearn where to find their purchase history, store locator or customer service number – if any of those features even exist on the mobile version of the site at all. These big marketplaces give customers a familiar, uniform place to shop.

3. Amazon, Google and Ebay are moving towards crazy fast and efficient shipping models. Google Shopping Express, Ebay Now, and Amazon Lockers are all creating shipping experiences that other ecommerce players are too far behind to ever compete with due to lack of scale. As soon as customers are used to free incredibly fast shipping, they won’t settle for anything else, forcing more retailers to sell through these marketplaces.

4. More on mobile shopping – Any brand who has ever made an app has quickly discovered how hard it is to get people to download it. App discovery is a mess. Not only that but getting someone to download the app is only the beginning of the problem, once it sits on the 3rd or fourth page of their iPhone home screen it rarely gets used. Enter the marketplace: Ebay app users spend 108 minutes within 34 sessions a month on their app. Why go through the expense of creating and marketing an app when you can create a shop within the app everyone is already using?

5. Customers are loyal to these marketplaces. Especially Amazon Prime members. Anyone who has Amazon Prime is going to first look on Amazon for the product they want to buy because they will get it fast and for free (showrooming doesn’t only happen offline, users do research on other sites online and then go to Amazon to buy too). Why bother with loyalty programs from all the other brands out there? If practically everything you want is already on Amazon along with your favorite loyalty program, tied into all the other media you consume, with the device that makes it all super simple – then you’re done.

6. Amazon, Apple, Ebay and Google all have hundreds of millions of credit cards on file and are poised to be the portals that everyone uses to store their credit cards and purchase online – they are secure, offer great fraud protection to sellers and are familiar for customers to use by storing their credentials. Google Wallet, Paypal and Amazon Payments are making big inroads as being purchase options on many big ecommerce sites, increasing conversion rates because they give customers more confidence – furthering the size of their reach.

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The Two Sides Of Online Marketing

There is the storytelling side of online marketing and the data-driven side of online marketing. Just because its measurable doesn’t make it better.

Storytelling entails all the visual, front-end stuff like email, facebook posts, tweets, custom designed landing pages, commercials, catalogs, sliding images on the home page, etc. There is some analysis of data to make decisions here but most of it is a creative endeavor fueled by gut decisions.

The other side of online marketing is the data-driven optimization side. This side entails optimizing advertising channels based on strict data. Paid search doesn’t tell stories. Writing meta-data for better ranking organically, landing page multivariate optimization, getting better data into product feeds for comparison shopping engines – it’s the evergreen stuff always running behind the scenes that fits into this category.

The data-driven stuff is very measurable so it’s held to a higher standard than the storytelling stuff – much to the chagrin of the direct response marketers, but measurable isn’t always the only thing that matters. The people in the company responsible for doing the storytelling stuff don’t actually want better data. If you’re not sure what’s working, you can’t get blamed. And since you can’t get blamed, you get to decide, to be creative, to create stories that reinforce purpose, instead of nitpicking every last detail.

The truth is you need both. Left to their own devices, the data-driven direct response people will compromise and dumb-down everything to the point of complete blandness with the excuse of “it’s what the visitors want!” You need the storytelling side to balance this out and aim for higher aspirations and lead customers to where you want them to be.

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In Defense Of Being Tracked Online

Are you ultimately responsible for your purchase decisions? In other words, are you powerless to resist the most hyper-targeted and relevant sales pitch? Hopefully the answer is of course not – if you don’t want to buy something, no advertising, no matter how well designed can convince you otherwise.

That frame of mind is important to keep when articles come out that get people fired up about their lack of privacy online. Recently there was a New York Times Magazine article where Target’s data mining was described as being able to detect when a teenage customer was pregnant, before even her own father knew. I don’t think the negative outweighs the positive. At its worst Target is trying to make their catalogs more relevant in hopes someone will be influenced to buy, at their best Target is removing spam and junk advertising and delighting people by helping them find the products they need.

The perceived threat out there is that there’s so much data collection going on that users don’t know about, but so what? Offline tracking has been intrusive for a long time and no one has ever been hurt.

The steps being taken in congress with The Privacy Bill Of Rights will require the net’s biggest online ad networks to respect a “Do Not Track” setting in browsers. Ok, thats fine – giving people a consistent and clear way to not be tracked is not a bad idea. But those people who choose to not be tracked will have an inferior experience on the web as a result.  Taken to extremes, policies like this could lead to damaging the web for everyone.

Personalization is where online retailers predict what you’ll want to buy using all the data they have on you – showing mens jeans on their home page instead of kids socks because they know you’re male, looked at jeans last time you were on the site and don’t have kids. This is what makes TV ads so intolerable is that they have no clue who is on the other side of the TV so they can’t help but be irrelevant. I will only be better off if I never see another commercial for tampons.

Do you want your barber to forget what kind of haircut you like each time you show up? These are the value adding benefits that tracking has. Content online is funded with ads so less relevant ads means there are less advertisers who want to advertise because the returns go down, which means less quality content being produced on the web.

I like being tracked. So far for me its all been upside – more relevant ads and personalized website experiences.

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Product Adoption Curve Marketing

Most marketing campaigns are tailored to the Innovators and Early Adopters and then prematurely abandoned. I’ve been thinking about what a long term marketing plan would look like if it were based on the diffusion of innovation bell curve. Below is a marketing plan to build a sustained campaign that meets consumers at their level of product adoption rather than trying to get them to become innovators or early adopters.

Innovators
These people are itching to go first and be the ones to share with everyone else their opinion. Your objective here is to build buzz for everyone who comes later.

  • Create coming soon trailers for the product. (Kickstarter is pretty much just a giant “coming soon” site for introducing new products)
  • Seed product to a select few – typically niche bloggers and tastemakers who are hungry for exclusives and breaking news for their audiences
  • Presale to the best customers and allow them to flaunt their exclusive invitation through social media
  • Send an email to your best customers giving them first dibs, stroke their ego by giving them something to share that fits their personality
  • Twitter, Pinterest, Instagram and Facebook status updates are applicable here. Social media is short lived and focused on breaking news

Early Adopters
Encourage those that get a thrill out of being the first to explore, adopt and adapt. Make them the heroes on your site. This is as far as most project launches go.

  • Create the hub of content on one your site. This page will be the place all in-bound links point to and aggregate all external content
  • Gather the early reviews, re-tweets, reactions, youtube “unboxing” videos and sort them all on this dedicated category page on your site
  • Use display ads hyper targeted to be on the most important niche blogs and sites of interest to the target audience
  • Be as relevant as possible about the exciting new release

Early Majority
Social proof is important to the early majority. Leverage your content hub page to give them this proof.

  • Use product reviews in emails to convince them of the consensus of the crowd to overcome their risk averseness
  • Create content around the product – Highlight all the use cases that have been identified from the early adopters
  • Paid search – broad category keywords to capture people who are in the market for your product but uneducated to your offering
  • Incentivize affiliates to post about your offering

Late Majority
Statistical proof is important to the late majority – in their minds just because it’s popular doesn’t make it worth it.

  • Build campaign landing page with keyword research and backlinks in mind to grow in organic rank in search engines (if your product is on the first page of google it must be good)
  • Promote all reviews together in quantitative format showing average review over time
  • Paid search – product specific keywords to capture people who know exactly what they are looking for
  • Advertise on comparison shopping engines for these people who know what they want but are looking for the best deal
  • Use remarketing display ads to remind past visitors of your offering to keep the purchase top of mind

Laggards
They are risk averse, skeptical and patiently waiting to make the best choice.

  • Put it on sale
  • Use affiliates to promote the product with coupon codes

Mostly all of these tactics can run in tadum (except for the tactics for innovators and laggards) because each customer is at a different point in the curve at a different time. Just because something doesn’t take off right away doesnt mean its not worth sticking with – especially online, it doesn’t take much effort to design something to last.

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Online Retailers Becoming Online Agencies

For most big brands their largest distribution channel is still through retail stores (WalMart, Target, Best Buy, etc.). Once the brand sells their products to the retailer its up to the retailer to sell it through. The brands then go to work building buzz in the marketplace in hopes that they will drive people to the retailers that have their product stocked.

Retailers have their work cut out for them but one area that they can shine in is becoming an online agency for the brands products that they sell. Since ecommerce retailers already have the expertise of selling all of the merchandise they buy from brands, why not also work as the agency for those brands?

For example, let’s say that Orvis brand fly fishing equipment wants to promote their latest fly rod. They could go to a traditional agency but the agency will charge a markup on all the media they purchase. Or they could go to a retailer like Cabelas or Bass Pro Shops ecommerce team, who is already selling their fly rods on their site, and give them their budget in the form of co-op advertising dollars. 100% of the co-op dollars will go towards the media, no markups, and the retailer also has more skin in the game – the better the media budget is spent the more money they make.

Brands are used to do broad mass marketing but its becoming less effective and retailers are becoming experts and driving sales online. Combine the two and you can get closer to the opportunity in between mass marketing and direct response.

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Making Online Campaigns Live Long Term

Too often marketing campaigns that brands create are too short lived online. It takes too many resources to do an initial push and drive traffic to landing pages that will just eventually be torn down. There are instances where this makes senses, like a valentines day themed promotional page but most of the time it’s costly, risks losing followers and squanders potential.

I think there are three reasons that campaigns are forgotten so soon – online is treated like a physical retail store with limited space, too many campaigns live on social media which is inherently fleeting and traditional marketing departments incorrectly assume that if it doesn’t take off at launch it never will.

An advertising campaign in a physical store is different – there is limited space and a store can have only one look at a time so you better make it the latest and greatest. Online you have infinite space for unlimited landing page designs and concepts. Why limit yourself with arbitrary end dates?

A campaign that involves inviting people to pin to Pinterest, “tweet to win”, upload to Instagram, create a board at Polyvore or interact with a Facebook status update has a ticking expiration date the moment it’s posted (studies show social media lasts on average as little as 3 hours). To get the most out of a campaign build it in on your owned domain where it can have a long life, use social to let people know about it initially and then let people continually discover it as time goes on.

Not everyone is interested in a campaign at the same time. For most things we all fall into the mass market, we wait to see what the reviews say, what makes the best-of lists, becomes cheap and is widely adopted. But each of us is an early adopter for some specific category or genre. I am the first in line for Tim Armstrong’s latest but am the biggest laggard for the latest cool restaurant. The problem is that brands obsess only about the launch and as soon as its launched they’re off to the next sexy thing.

  • It takes time to gain inbound links and crawl up in search rank, Google is designed to work in favor of content that sticks around.
  • More time will give you an opportunity to collect data and from new insights.
  • Use broader keywords in the content with a more evergreen perspective in mind.
  • Give those early adopters on social media time to recommend it to the masses who choose to wait and haven’t decided to take the leap yet.
Life Span Of A Link From This Site

Life Span Of A Link From This Site

Just because something doesn’t take off right away doesnt mean its not worth sticking with – especially online, it doesn’t take much effort to design something to last.

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It’s Never Been More Important To Own Your Own Site

John Scalzi explains it so well:

“So, let’s go back to 1998. You’re a new writer and you want to establish a permanent residency online. Which would be wiser: Having your own site at your own domain, or putting up a site at GeoCities? It’s 2001, same drill: Which is wiser: Having your own domain, or creating a site on AOL servers?
2003: Your own domain, or a Friendster page?
2007: Your own domain, or a MySpace page?
(Hindsight is a useful thing.)
And now it’s 2011 and the choice is one’s own domain or a page on Facebook. Guess which I think you should do.”

Yet brands still continue to promote their facebook and twitter pages over their own domains. In every published media and commercial are vague hastags of company taglines. “Like Us On Facebook!” (BTW this is not a compelling call to action) messages are still predominantly shown over domain names.

Ever since Facebook launched EdgeRank it has become a very bad option in trying to keep customers looped in. Since Facebook wants you to be as engaged as possible whenever you visit, they use an algorithm to decide what would be the most relevant content for you to see. So it is not possible to reach people who have explicitly pressed “Like” to receive your updates, unless you want to pay Facebook for more reach.
Going forward you really can no longer make any claims or give incentives to people about receiving timely updates via facebook because you can only reach 10% – 15% of them with every post.  Dangerous Minds has written a very good post on why “putting a lot of energy into building a Facebook presence is a sucker’s game”.

These kinds of changes in social media that put more control in the hands of the company rather than in the hands of the user is a trend that isn’t about to slow down. Warren Ellis reports that the first cycle of social media is coming to an end:

“This may be the end of the cycle that began with Friendster and Livejournal. Not the end of social media, by any means, obviously. But it feels like this is the point at where the current systems seize up for a bit. Perhaps not even in ways that most people will notice. But social media seems now to be clearly calcifying into Big Media, with Big Media problems like cable-style carriage disputes.”

Your own site gives you credibility, control, analytics and the ability to collect information from visitors and choose how you want to communicate with them. Use social media as the spokes to which your personal site is the hub.

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