A few weeks back, Scott Silverman spoke at an online marketing workshop at UVA’s Darden School of Business.

Scott discussed internet security, privacy, net neutrality and the issue of retailers collecting sales tax from interstate purchases.

Interesting and important issues.

Scott’s slides and notes are available over at rkgblog.

Last week in Scottsdale at the Marketing Workshop, I had the honor to participate in Allan Dick’s panel on “Customer Centric Search.”

Joining me on Allan’s panel were Ken Jurina of Epiar, Rebecca Kelley of SEOMoz, and Todd Friesen of Visible Technologies.

If anyone is interested, I videoblogged my session here.

Here are the slides from all the speakers:

Slides: Customer Centric Search Marketing
(warning: big! 2.3 meg zipped pdf)

If you do mail catalogs:

Is CatalogChoice on your radar?

I think they’re going to be a very big deal this year.

If interested, please check out this post: If Prospecting Was Illegal, Would Your Catalog Survive? .

Comments welcome!

Podcast here: Shop.org’s Larry Joseloff Discusses Innovation, Orlando, And Organizing The MultiChannel Retail Firm

Longer book review here: Yahoo’s Steve Souder: How $20 Can Speed Up Your Site By 10%

The info Steve provides could help out many online retailers.

We’ve posted some aggregated median stats by category at our blog:

Median CyberMonday Sales Up 32% (and other 11 benchmarks): Compare Your Results By Category

What did YOU see on Monday? Share what you can in the comments.

A great Q4 to everyone –

Alan

Martin Eisenstein is a senior partner at Brann & Isaacson, one of the nation’s best law firms specializing in direct marketing. He’s shared two of his charts covering data breach and gift certificate issues, state by state. If your company collects customer information, or if your company issues gift certificates, you should review these documents.

Link: Gift Certificate Laws & Security Breach Laws, State By State, For Online Marketers

At the Shop.org merchandising conference in San Diego last week, Leigh Vosler from Sierra Trading Post provided excellent tips for optimizing data feeds.

Link: Leigh Vosler: 22 Tips For Optimizing Comparison Shopping Engine Feeds

For direct marketers, PPC costs need to be in line with PPC revenue. That same logic should be applied to how your team allocates its time.

A company can feed as many analysts as it wants to into the maw of Search Engine Marketing. There is an infinite amount of work to be done. However, the amount of work that is valuable enough to cover the cost of having someone do it is limited.

Paying someone to do work that produces little or no incremental value is bad business. Paying someone to do work that is worth less than other work s/he could be doing is also unprofitable.

Understanding the relative importance of different components of your PPC campaign may help retailers to allocate management resources more appropriately.

In catalog marketing we talk about: list, offer, package. “List” meaning the mailing lists; “offer” meaning the products and price points; and “package” meaning the catalog itself: cover art, layout, copy, paper, etc. As any good direct mailer knows the relative value of each of these pieces is something like: List 75%, Offer 20%, Package 5%.

The search analogy is:

1. The Term List: 50%
2. The Bidding Logic: 30%
3. Landing Pages/Selection/Offer: 15%
4. Ad Copy
1. Getting Offer Copy out when appropriate: 3%
2. Getting “Why Shop Message” right: 2%
3. Tweaking the wording: 0%
4. “Refreshing” the copy: 0%

Clearly, if any one of these is really awful it can render the others irrelevant. However, assuming the program is reasonably healthy here’s how I’d recommend allocating human resources:

Term List Maintenance: 10% - 30%

Whether your business is closer to 10% or 30% depends on how thorough the list is already, how complex your business is as measured by the number of product categories, manufacturer brands, and SKUs you carry, and how much turn-over you have in your product offerings.

• Look for new and different combinations of words from product names, SKUs, manufacturers.
• Study the actual user searches that led to the clicks, particularly those that convert.
• Use product feed updates periodically to catch the new additions with particular attention to new manufacturers/lines.
• Drop terms that reference products no longer carried.
• Spend time on the site studying how products are described and presented.
• Don’t burn time with machine generated lists.
• Don’t waste time studying Hitwise reports of terms that “are big” for your competitors.
• Keep an eye on the performance of these new terms.

Landing Page Tests/Design/Research: 5% – 15%

Again, you’ll want to spend time wisely here. Frontload your efforts, spending more time on this early in the program than later.

• Test search results pages against sub-category pages early and pick the winner.
• If you have the ability to test different mock-ups of the winning template do so.
• Test dedicated landing pages for extraordinarily high traffic terms that perform reasonably well.
• Study what products are sold from the top keywords and consider constructing landing pages for those keywords that highlight those products.
• A/B test homepage versions for brand terms if you have sufficient traffic.
• Don’t test whispers, test shouts. Finding statistically significant differences is hard on a good site. Focus on testing big concepts, not nuances.

Ad Copy Testing/Maintenance: 5% – 10%

People spend too much time on copy, but that doesn’t mean it’s unwise to spend any time on it. Copy maintenance can be extremely time consuming, so make sure you don’t over invest.

• Initially, test which unique selling proposition works best for you as a tag line.
• Write modular copy, so that the line 2 and line 3 copy can be swapped out without breaking a sentence.
• Test offer copy vs standard copy at the first opportunity of a site wide sales event.
• If the previous test supports it, roll out relevant offer copy whenever the offer is wide enough to justify the time.

Data/Bidding Analysis: 50% – 90%

There is far more gold to be found in the mountain of data than in any other area. The hours spent by a sharp, experienced analyst studying data, looking for trends, finding opportunities and refining the bidding logic will almost always produce more ROI than the other activities.

The list is endless, but here are some ideas:

• Study performance by product category, sub-category, manufacturer brand, etc.
• Study performance by landing page.
• Study the above in the context of seasons and changes in product mix.
• Assess the impact of time of day and day of week on performance. Fold findings into the bidding algorithm.
• Look for commonalities that don’t fit into the groupings above “terms with the word ‘foo’ in them do better/worse than their cousins”.
• Assess the keyword level data over longer and shorter time windows.
• How much spillover is there from the search program to the call center or the retail stores?
• What fraction of the buyers are new to file vs existing customers? Does that vary by product category?
• How does traffic coming in on broad match perform compared to the traffic coming in on exact match?
• How does traffic from the Google syndication network perform vs traffic from Google.com?
• Does our bidding correctly reflect margin differences between different types of products? Can we tie that tighter? Do people searching for “V Neck Sweaters” actually buy sweaters?
• How do orders come in over time since the last click through? Does that order curve suggest a longer or shorter cookie duration?
• What kind of interaction is there between search and other online ads?

These types of analyses produce much greater return on investment than most other projects. However, finding nuggets of gold takes hard work, and persistence. However, by putting more time into analysis and less time into low value projects, you’ll get more from your PPC program.

Original posts: 31 Tips For Using Your Pay-Per-Click Management Effort Wisely and PPC: Spending Your Time On What Matters

Pricing structures and rates aren’t secret in established service industries. Real estate agents get 3% to 6% of the house’s price; recruiters get 1/3 of total first year comp; trial lawyers take 33% of the settlement; list brokers charge 20%. While specifics vary, each industry has conventional pricing arrangements.

Not so in paid search management. Not yet. Not only are rates kept under wraps, as an industry we’ve not even yet converged on the most appropriate structure for those fees.

You might ask, “Why does the pricing structure matter? If client and agency deem the fee fair for work performed, why does it matter how that fee is computed?” Incentives drive behavior, and fee structures (not just amounts) influence how a SEM agency serves its clients.

We’d suggest a sensible way for a paid search marketing agency to charge for their services is “capped percent of ad spend…”

More discussion of search marketing agency pricing structures and rate at SEL.

What do Shop.org retailers think about this? What do other Shop.org agencies think?

If the former, you may be leaving money on the table.

George Michie of RKG writes:

The little known fact about paid search is this: the quality of traffic is largely independent of position on the page. Conversion rates and average order sizes, ie: Sales Dollars per Click (SPC) vary widely by term, but for a given term are about the same at the top of the page as they are at the bottom of the page. If fact, SPC tend to be slightly worse towards the top of the page than towards the bottom, but this variance is a third-order effect. For all intents and purposes the value of a click in position 10 is equal to the value of a click in position 1.

The key to maximizing sales within your required advertising efficiency is to pay no more and no less per click than you can afford for each term based on the value of the traffic each keyword phrase generates. Bidding more than you can afford on a term means generating more unprofitable traffic; bidding less than you can afford means your ads will be lower on the page, generating less traffic than they could be profitably.

While the SPC is relatively constant for a given term, the CPC required to be in any given position changes all the time based on what your competitors bid. This means that fixing your ad in a position guarantees that when your competitors dictate you’ll spend more than you can afford for traffic. Just as damaging, at other times you’ll be lower on the page than you could afford to be thereby losing traffic that you could profitably have had. In fact, positional bidding guarantees that you will only bid what a term is worth by coincidence, and those coincidences will happen rarely.

George’s full discussion of positional bidding over at rkgblog.

We’ve been recently seeing a small uptick in Yahoo click quality and Yahoo click share relative to Google. Small effects, true, and not enough to staunch the tremendous share loss Y experienced to G over 2006, but upticks nonetheless.

Here’s the full post on this, with some graphs:

http://www.rimmkaufman.com/rkgblog/2007/02/05/panama-60-days/

Anyone else have data or observations on their early Panama experience?

Alan

Update:

Blogging too quickly yesterday, I mistakenly attributed this to Yahoo’s new quality score ad ranking — which of course, couldn’t be involved in these data, as those changes rolled in early Feb. Boof! So what could explain this trend? Hunkering down with our senior engineers (which I should have done yesterday before tossing off a fast blog post), they suggest Y might have favored Panama advertisers vs. DTC-XML advertisers during these transition months, which might have favored larger advertisers (as larger accounts tended to migrate earlier), which in turn might have helped out our clients (who tend to be larger advertisers)… theories, theories, theories.  Time will tell.
Will be interesting to see how these trends evolve over Feb and March. Stay tuned.

Some folks weren’t: Ice.com, for example, publicly shared their disappointment with their PPC conversion (see “Ice.com CEO Disses Google, Yahoo; Suggests Cut In Online Ad Spend“).

“They [Google and Yahoo] both proved to be extremely poor marketing tools for ICE.com and many of our retail friends. This was most evident during this most crucial time of the year, the holiday shopping season. Traffic from these portals were up cpc’s (cost per ad click) were up but conversions were way down.” — Shmuel Gniwisch

Hearing this, we analyzed our client’s holiday results as a group several different ways.

At least for our clients, search typically performed extremely well over the 2006 holiday period.

We found 86% of our clients enjoyed strong conversion increases, averaging 40% positive bumps in sales per click. (Data on our blog: “Was Holiday 2006 Good To Pay-Per-Click Advertisers?“) We looked across our clients another way, and found they typically enjoyed strong increases in click volume, click cost, click conversion, and (most important) click profitability. (See “Holiday 2006 PPC Clicks: High Traffic, High Conversion, High Profitability“).

Feels almost too obvious to blog that online conversion soared at the holidays — like blogging that the sky is blue.

So, let me toss it out to the shop.org blog readers:

How were your search results over the holiday?

With or without sharing numbers, did the search channel over- or under-perform for you?

– Alan

Sharp etailers are just starting to track web spillover to the phones by placing a visible code
on their web pages, asking callers for that code, and having their call agent punch the code
into the order app as if it were a catalog source code. Effective, foolproof, and free!

Click here for more details at rkgblog.