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.

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.

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.

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.

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.

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

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.

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.

Seth Godin wrote a post explaining:

“Sometimes, we can’t measure what we need, so we invent a proxy, something that’s much easier to measure and stands in as an approximation…You’ve already guessed the problem. Once you find the simple proxy and decide to make it go up, there are lots of available tactics that have nothing at all to do with improving the very thing you set out to achieve in the first place. When we fall in love with a proxy, we spend our time improving the proxy instead of focusing on our original (more important) goal instead.Gaming the system is never the goal. The goal is the goal.”

Online marketing is rife with false proxies.

1. Increase the amount of Likes/Followers+1s you have.
The goals associated to social media are typically hard to measure: strengthen the connection you have with our fans, allow for better customer satisfaction, enhance memory of your product offering, hold more of your customer’s attention. When you use the amount of  Likes/Followers/+1s to act as a proxy for those goals you end up using every technique out there to beg/cajole/lead/mislead people into pressing that button.  Social media strategies end up being self obsessed and include lame stuff like sweepstakes, polls and posting your latest press release – all of which give you the oposite of what you really want.

2. Increase visits
You want your site to grow but an obsession with more and more visits is an unhealthy one. Its like a drug addiction which will keep you working on sensational controversies or clever images, or other link bait that keeps the fly by night traffic coming back. If instead you engage your existing users far more deeply and Increase their participation, their devotion and their interconnection you can turn them into ambassadors, charged with the idea of bring you traffic that is focused, traffic with intent.

3. Increase page views per visit
You want to know how much people like your site but page views per visit is not the way to measure it. Focusing on the false proxy of page views per visit will lead you to become one of those awful content sites that reloads every page in a photo slideshow so you can maximize ad impressions – simultaneously maximizing how much people despise your site.

4. Increase Ad clicks and impressions
You want your advertising to be successful but getting more clicks and impressions are not meters for success. Click through rate at least gives you an idea of how relevant your ad placement is. Really you want your ads to deliver a result – like sales.

A consistent theme with false proxies in online marketing is that they are conducive to short term gain and long term loss. The better metric to use for each goal is one that focuses on how well that metric affects the end goal, not just a means to that end.

For years direct response marketing online via paid search, seo, email, affiliate and comparison shopping engines have been very efficient and predictable. But we are currently in a transitional time for online marketing where these modes of advertising are not as efficient or predictable as they used to be. There are two changes that are causing a shift.
First is the attribution problem caused by the increasing amount of sources that a person uses before they purchase which dilutes direct response profits. According to a study by Google, people use more than 10 sources of information to arrive at a purchasing decision. And this trend is only going to increase. What does this mean for direct response mediums online?: the constant feeling that you aren’t getting full credit for your spend, but you’re not quite sure what level of credit you should be taking.
Second, mobile costs and click-throughs continue to grow but the return on investment isn’t growing with it. Customers are using mobile devices in droves but  but advertisers are not yet convinced that they are as effective as desktop ads.
From The New York Times: “People click on ads on smartphones more often than they do on desktop computers, 5.1 percent compared with 2.4 percent of the time, according to Marin Software, which makes technology for advertisers to use to buy ads on Google, Bing, Facebook and other sites.
That is because ads take up more space on cellphone screens and are more likely to answer the kinds of immediate questions asked on mobile devices, like “Where is a bar near the ballpark?” said Gagan Kanwar, director of research and partnerships at Marin.
People make purchases after clicking on ads 4 percent of the time on desktops and just 2 percent of the time on phones, so mobile ads are worth less, he said.”
Online marketing budgets are made with specific returns in revenue in mind which is very different from traditional tv, radio and print advertising where the main objective is to build the brand and occupy more mindshare of the customer. When online marketing direct revenues go down, spend goes down with them – if it’s not providing the return than stop spending – a different mentality than traditional advertising. Even though those marketing dollars may still be driving sales, its harder to measure the return because of mobile and attribution problems.
I don’t think this funk we’re in is here to stay however. Technology will catch up to the customer again and allow the kind of tracking necessary to prove results. Once we start using our phones to make purchases, a lot of the attribution problems with mobile will be solved. A purchase with a phone will close the loop on the user who saw an ad on that same phone. Customer Relations Management technology will improve so that unique identifiers will be assigned to a user so all their actions across devices and programs will be identified.

“Only half of advertising works, but the trouble is knowing which half.” Online marketing has long been heralded as the cure for knowing which half is wasted because it’s so much more trackable. But I don’t think the problem of accurately attributing marketing spend to increased revenue will ever be fully solved.

People use more than 10 sources of information to arrive at a purchasing decision according to a study by Google. With that many sources of information you can forget about ever being able to quantify every interaction let alone rank the importance of one interaction over another. Compound that with multiple computers (shopping at work, buying at home), multiple devices (searching on mobile, buying on tablet), online and offline (shopping online buying in store) and it’s a big mess.  Even if you were able to capture every source there are the seasonal outliers that change customer behavior that your advertising is not responsible for such as seasonal differences, changes in product price, changes in what competitors are doing, and constant finicky consumer taste.

There is no shortage of tools to help you see a portion of the path that a customer uses so that you can quantify the total value of a keyword  as an introducer, influencer and closer but all of those labels need to be taken with a big grain of salt.