Online Marketing Moving Towards Passivity

Online marketing has been positioned from the beginning as a much more interactive marketing medium than TV. As the web becomes more of a constant thing in our lives will our interactions with it become more passive like TV and thus change the way we market online?

Online marketers have always stuck their noses up at TV advertising because they couldn’t believe advertisers would spend so much money on a medium that was not trackable, was interruptive, was not precisely targeted, had no ability to engage the user further once the ad ended, was not shareable. Surely TV ads are inferior.

But when the amount of time people spend online is constant you need new math. The number of sites visited before a purchase as reported by google is growing exponentially – is this because people do more research or is it just because people spend more time online? When browsing is something that never ends, creating attribution models around touch points that weave in and out of constant browsing habits start to look futile. The sheer fact that someone showed up at your ecommerce site used to be a pretty strong signal of purchase intent and every time they didn’t convert was deemed a failure. Now, with mobile usage skyrocketing the value of a visit is dropping fast.

In the end the traditional principles of TV advertising – where you interrupt and grab attention by inserting advertising into an appealing environment and then make that advertising message entertaining, beautiful or interesting is maybe all that may really works after all. The majority of online advertising hasn’t been focused on that as much as it’s been focusing on precise targeting, number of “likes” and optimization.

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Should You Pay For A Paid Search Bid Management Tool?

Bid management tools (Marin, Kenshoo, Acquisio, DoubleClick For Search) tout productivity, and increased efficiency but not without a hefty cost – charging 3% – 5% of spend. So is it worth it? Here are some of the pros and cons these tools promote and a comparison of what you get for free from AdWords:

  •  Cross-Publisher editing is a big feature. When you see both AdCenter and AdWords in the same place it’s much easier to manage and strategies can be spread seamlessly across the two.
    • No arguments here, obviously Adwords will never give you the ability to edit AdCenter in it’s interface.
  • Doing bulk edits by downloading data into a spreadsheet, making edits, and then re-uploading is essential for increasing productivity across thousands of keywords and ads.
    • AdWords editor does this for free (but not across publishers) and it’s a pretty new feature in AdWords as well.
  • Customizable dashboards allow you to make better reports faster which allow for better analysis.
    • If you’re not content with the charts in the AdWords interface, you’ll need to use spreadsheets which are slower but you can make them exactly how you want and aren’t limited to the features of the dashboard tool.
  • Flexible auto bidding algorithms allow advertisers to manage millions of keywords and ads effectively. Bidding algorithms look at all the possible signals available to decide what to bid so you can reach a desired CPA or ROAS which would be too difficult for any one person to do manually.
    • AdWords Conversion Optimizer is competitive with other tools as it is the only bidding algorithm that makes bids in real time, the rest do so reactionary through the API. Also, AdWords allows adding any keyword to Conversion Optimizer regardless of account structure making it pretty flexible. What it doesn’t have (yet) is options outside using a target CPA to optimize instead of a target ROAS.
  • Dynamic account expansion allows large advertisers to create campaigns, adgroups and ads much faster using their product feeds and smart software.
  • Conversion attribution allows you to give keywords different levels of credit depending on what point they were clicked on in the funnel and use those rules in your bidding strategy.
    • With AdWords you can get insight with the Multi-Channel Funnel reports and more insight if you use Google Analytics but its not easy to incorporate learnings into bids.
  • Customizable alerts that allow you to get an email if a swing in traffic or drop in CPA happen to a specific campaign/keyword/adgroup
    • Automated Rules in AdWords allows you to send emails that get triggered for changes in any metric.
  • Tag any element of your account to easily find and schedule anything.

Also consider:

  • When AdWords comes out with new features it usually releases them in AdWords before making them available in the API so things like Dynamic Search Ads are not available in many of these tools that rely on the API.
  • Enhanced campaigns are taking a lot of the complexity away that justifies these bidding tools – consolidating duplicated and triplicated campaigns for device, time and geography.

You can see that most features are mostly marginally better than what you get for free from Google. In my opinion, a bid management tool only make sense for very large advertisers with small SEM teams. I think their value propositions will continue to run thin as Google ups its investment in AdWords editor and the AdWords interface.

The real reason why many people use these bid management tools is because it takes the responsibility of paid search away from themselves and gives it to an algorithm. A computer can look at many more signals than a person can look at, make thousands a tweaks to bids at a time and learn as it goes – who can argue with a search manager that it’s not a good decision to invest in a tool like that? Besides whatever increases to ROAS it provides it also gives you a justification and an excuse to upper management if the program goes well and if it goes wrong.

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Should Affiliates Bid On Your Brand Keywords?

The only affiliates that really want to bid on your brand keywords are coupon sites – Slickdeals, Couponcabin, Retailmenot, etc. because discounts are incredible clickbait, and with the 30 day post-click attribution windows (which most affiliates are set up on), discount ads on brand terms work out to be very lucrative for affiliates. So brand terms are usually out of the question.

The question does come up in regards to “brand + coupon” keywords though. If customers are proactively searching for coupons it can make sense to let affiliates bid on those keywords. The cost is all incurred by them, you only pay if a sale happens and if you were to put an ad up for your site like you would for a typical brand term, customers would likely bounce because they want to find coupons, not your homepage.

Some brands don’t want a coupon page on their site because they don’t want their products associated with discounts, but If you do have a page on your site that feature coupons like this Macy’s page, not letting affiliates bid on your brand + coupon keywords so you can have all that traffic for yourself can be very effective. The problem is this: most visitors don’t believe the brand’s page will have all of the coupons that are really out there. Chances are they will click on your ad and then leave to a coupon site anyway to see if there are any more coupons out there.

I think there are three options:

Affiliates Bid On Brand Terms

Because of the 30 day attribution window in search, most of the “brand + coupon” keywords are not last touch (affiliate is) but are still taking credit, so the paid search marketer loves the coupon keywords in his account because they perform really well and pull up account performance overall. Parting with them would mean doing what is best for the company, not whats best for his channel.

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Two Most Important Steps For Managing Product Listing Ads

Product Listing Ads are currently one of the least transparent, (no avg. position, no impression share, no keywords) yet highest converting products in AdWords. By holiday 2013 I think PLAs will be one of the highest cost sections of any ecommerce paid search account. After you have set up your Product Listing Ads campaign(s) and added an adgroup targeting All Products, it feels like you’re done but there are still a few more things that you can do to improve PLA performance.

1. Create product targets as granularly as you can. Download your Google Merchant Center feed and add attributes per sku to the the AdWords_Label column. You should categorize for type, category, price, margin, style, sku and whatever else you can think of. If you can get all the way down to one product per adgroup, even better. There are two reasons for this: 1. the more specific you can be with your product targets the more specific you can be with your promo text which is set at the adgroup level, 2. you want your cpc bid to match as closely to the value of a click from that product as possible. If you have a very general product target then it will be hard to know what your bid should be when there is a wide range of products that match that target.

2. Use negative keywords to optimize your ads. You can’t bid on keywords with PLAs but you can see the queries that triggered your ads and add them as negatives (under the Auto Targets Tab > See Search Terms > All). Negative keywords are sometimes necessary to make distinctions between product variants. For example, if you sell a small and a big version of the same product you might want to add “small” and “little” as keyword negatives for the big version (and, conversely, add “large” and “big” for the smaller version).

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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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It’s Either Social Media Or Nothing

The barriers to entry to publishing a book, or distributing music or any other creative endeavor used to be so high that artists had to spend much of their time trying to get in front of those decision makers.  Now the internet has placed all the tools of distribution and marketing into the hands of the entrepreneur. But there is a catch.

Not only are the tools of marketing and distribution in your hands, they are now your only option. It’s not a matter of choosing between a third party label or publisher or DIY, going DIY is now the only way to go.

There are plenty of writers, musicians and entrepreneurs that would rather just do the work of creating their art and not maintain a Facebook and Twitter account, post images to their Instagram, encourage engagement on their website or create a fan club. After all, these people are artists, not social media mavens. But alas, this is the new game that needs to be played. But at the end of the day, I prefer this new normal over the old for a few reasons.

1. People buy the experience not the product. This is now more true than ever. Your art is no longer a simple transaction about money, people want to buy a story. You have a better chance at successfully selling your story than any third party does.

2. If you didn’t have to spend all your time doing social media then you would have to spend all your time doing the demeaning work of trying to be picked anyway – casting calls, headshots, following leads, trying to get in with the tastemakers who could care less about you.

3. When you accept doing the marketing and distribution on your own terms you unlock your ability to make an impact, removing all the excuses between your current place and the art you want to make. You choose to be judged not by the tastemaker who picks you, but by the audience that you will find instead.

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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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What Happens When Conversion Rate Is So Low It Doesn’t Matter?

Of course conversion rate will always matter but what happens when your site’s conversion rate is consistently below 1% or .5%? It won’t be long before conversion rates less than 1% are the new normal.

There are two forces at work here: 1. Increased com­pe­ti­tion as peo­ple spend more time shop­ping online—more shop­ping equals more vis­its per pur­chase and con­ver­sion rates will nat­u­rally fall. 2. Increased mobile vis­its where shop­pers seem to pre­fer to use smart­phones to browse, price check, and find store loca­tions – not purchase.

Lower conversion rates aren’t a bad thing since incre­men­tal traf­fic still means more revenue. What will be bad is if the only metric you look at to measure success on your site is your conversion rate. What about the other 99% of traffic? Is that not worth trying to quantify?

No one gets married on the first date, likewise no one buys something the first time they meet your site. How many little interactions, downloads, engagement, likes, views, subscriptions, reviews does it take to add up to a conversion?  Like Avinash says, If you solve for conversion rate are you solving for all your traffic and are you improving the website experience for all your customers?

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Not All Impressions Are Created Equal

The bigger the reach the smaller the individual impact. The higher the frequency the more is wasted. The more people the message is designed for the more generic and uninteresting the message needs to be (the compromises necessary to make something appeal to everyone mean that it will almost certainly not appeal perfectly to anyone).

A message hyper-targeted and relevant, designed for a specific individual gets noticed and acted on every time. Those who receive such direct attention become loyal ambassadors. But you can only make a handful of such interactions at a time.

I think there is a sweet spot between reach/frequency and effort/impact. Too much marketing done today is still too far over on the reach frequency side than it should be with all the social media tools at our disposal.

Frequency reach vs Impact Effort

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No Better Time For Starting Something New

Social Media is a one to one medium that gives brands a unique opportunity to be very customer focused. Not only is individual connection what the web is built for, individual connection is what we as humans most desire.

But many brands still only see online advertising through the lense of scale – using Facebook like a megaphone and Twitter as a mass marketing vehicle, which explains the constant lust for more and more friends and followers. But you can’t blame big brands for this, everything they do is done at scale, the ability to produce and distribute in enormous quantities is part of their essence. They are built to neglect the individual needs of their customers – they only work at scale.

As big brands are trying to fit into a one to one connection marketing world, smaller companies have an inherent competitive advantage online. We as consumers have pretty much everything we need but the one thing that never decreases in demand is attention, appreciation and belonging.

Increasingly the way we derive attention is through the content we share. The content we share is a reflection of our identity. Instead of someone deciding to share content about a product or experience after they have purchased it, the reason for purchasing something is to share it to friends (the point of going to that concert is so that I can tell everyone that I went).

Combine that longing to belong with creating identity through sharing along with our newly found weird niche passions (thanks to the long tail) and the money and resources to make use of the abundance of choice that now exists, and the environment is ripe for a small business making niche products hyper targeted to excited and neglected (by big brands) customers via social media that gives each customer the feeling of belonging.

Small Business Comparative Advantage

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