Monday, January 28, 2008

The Siren Song of Cheap Marketing Tactics

Sometimes, in the world of web marketing, you get what you pay for…

Their siren song is hard to resist… get big and famous by spending next to nothing on marketing. Just SEO the heck out of your site, for example, and you’ll appear at the top of Google, which is all you’ll need to attract a huge audience. I recently spoke with the CEO of a web based consumer company who ticked off his preferred marketing tactics like a shopping list at the dollar store: Search Engine Optimization, Search Engine Marketing, Partnerships, “Viral” marketing.

And there’s nothing wrong with any of these. In fact, I have utilized them all, sometimes with great results. But all too often, managers stop at these tactics without recognizing their significant limitations. And perhaps more dangerously, they ignore the big potential business drivers that they should be focusing the bulk of their resources on. Here’s a look at these seemingly magical tactics one by one:

SEO – search engine optimization.
The promise: Load your site up with enough links, pixels, and key words, and you’ll float to the top of any search engine, including Google, MSN and Yahoo. Search engines are consumers’ first stop when looking for any product online, and SEO costs are minimal –so why wouldn’t this be the cornerstone of your marketing plan?
The reality: Many sites do commonly have issues that interfere with search engines’ ability to spider them properly, such as an overabundance of flash content. Removing these hurdles can raise your rankings, so it’s more than worth looking at. But most search engine methodologies are highly propriety, and the first sign of “gaming” the spiders can get you blacklisted from search engine results. And, most search engines factor traffic rankings heavily into their algorithms – so this tactic can only take smaller and newer sites so far.
The bottom line: A good baseline tactic, but this should supplement (not replace) your marketing plan.

SEM – Search Engine marketing
The promise: You can’t game the search engines so you’ll simply buy your way to success, bidding on keywords like a day trader until you have crafted the perfect acquisition machine.
The reality: I have used SEM and it was actually one of my most efficient marketing tactics. But there’s a real natural limit to how much you can devote to this tactic. The more words you buy, the more expensive the “clicks” as you buy out the most efficient keywords and widen the competitor pool. And at some point (often early on), it becomes cost inefficient. Example: I consulted for a company paying $5 per click for keywords, who only made a variable margin of $25 per purchase. Thus, 20% of their “clickers” would need to make a purchase just to break even – and their purchase rate was less than one in ten.
The bottom line: a great tactic that suffers from a similar drawback as SEO – it can get very inefficient very quickly.

Viral Marketing
The promise: you seed a blog, a UGC, or some other hot 2.0-ish destination with a piece of content promoting your brilliant product. Millions discover it, view it, pass it on and turn it into the next Facebook, Second Life, etc. And, you didn’t spend a dime in media placement.
The reality: a good idea if you have the type of product or content that truly inspires buzz. Some good candidates for this technique might be Britney Spears’ agent, the producers of that last indy flick that barely squeaked by with an “R” rating, or the campaign manager for a presidential candidate that has a lot of indiscreet rivals.
The bottom line: very difficult to generate without a naturally sexy product or message. One exception is a boring product with something interesting to say: Dove’s campaign for real beauty,for example, which featured a provocative video that received millions of views on YouTube.

Affiliate Marketing
The promise: cut a few deals, or a few hundred deals, with more popular ecommerce providers, paying them on a “bounty’ basis for every buyer they send to you. Shell out a few bucks, but only pay when you score a sale.
The reality: There are some deals to be had, but this sales channel often tends to be very expensive and even margin busting. And these deals can be a lot more high maintenance than they appear. Contracts must be negotiated, assets delivered, relationships managed to insure productivity. They can be a drain on resources that can be better spent elsewhere (more on that later).
The bottom line: Another B+ marketing tactic with as many limits as merits.

So what’s a marketer to do if these bargain basement tactics only take you so far? Well, you can focus on the basics, for one thing, like site design, buying process and messaging. Watch for part two of this post for a deeper discussion of these less sexy elements, and how a focus on them can even make the cheapest tactics a lot more efficient.

Tuesday, January 15, 2008

Branded Ecommerce in the Age of 70% Off

How can ecommerce providers drive sales without resorting to free shipping and deep discounts?

As everyone knows, online retail sales continued their meteoric rise this past holiday season – but at a price. Free shipping was epidemic and discounts more aggressive than ever – some etailer home pages dedicated more space to their “70% off” banners than the merchandise they were trying to sell. But though everyone discounts at least occasionally, there are a few ecommerce providers that dare to differentiate in other ways. As an avid online shopper, I’ve noticed that this differentiation seems to be clustering in a few broad strategies:

Become a destination – have you ever gone into a store just because it looked cool and fun, even though you really never intended to buy anything? And maybe you did indeed end up buying something, or at least coming back later when gifting season hit? Some online stores are trying to stand out by just providing an opportunity to take a break or window shop in a new way. Here are a few I’ve seen:
Brookstone – they have taken the concept of “browsing the shelves” literally with a new interactive feature that lets you view 3D shelves in a virtual store, viewing hundreds or even thousands of items at once.
Trip Advisor – I just wasted 30 minutes on their incredibly fun “World Challenge” game. Other raging time wasters include chatting with other travelers via their social network, or posting on their message boards.
Diesel Denim – has a section called “the cult” with articles and videos about performance artists, cutting edge music festivals in Europe, etc. True, it doesn’t make me instantly shell out 200 bucks for jeans, but does serve to reinforce Deisel’s street cred in an image obsessed category.

Become the ultimate helpful sales clerk – today’s most advanced ecommerce sites do everything a sales person can do, with the possible exception of telling you how great your butt looks in those jeans. Web 2.0 tactics are especially helpful in achieving the virtual shopgirl effect, as is bonus content from “experts” real or perceived. Some favorites of mine:
New Egg –this lesser known electronics site now includes an “eggspert” forum – basically an wikipedia created by nerds to help simpletons like me differentiate between 1080p and 720i.
Travelocity – like any good travel agent, Travelocity’s recently launched Road Trip Wizard lets you enter your travel interests and preferences, then spits out a complete itinerary, with maps, hotel recommendations, etc.
Barnes and - want to get a better feel for a book you’re considering buying? Barnes and Noble now features video interviews with authors to help you go beyond the inside cover.
Lancome just overhauled their site which features beauty tutorials and suggestions for alternatives to discontinued products.

Make it especially for you – personalization, in some form, has been around since the dawn of ecommerce. But recently, some business have been taking it to the next level, giving users access to products that are truly custom made, even one of a kind: goes well beyond just letting you create your own T-shirt. In a triumph of 2.0 democracy, they only sell user generated designs. Apparently, some of the more popular user-designers have achieved near “Project Runway” fame for their designs., a recently launched men’s clothing site, has installed body scanners in airports around the country to measure users; clothing recommendations from various well known brands, including Nordstrom, Levi’s and Land’s End, are then sent via e-mail based on your body type.
• And though it’s been around for awhile, can guarantee that no one will be wearing the exact same shoes as you ; choose your heel color, your swoosh color, your shoelace color – and top it off with your very own written ID on the back of the shoe (as long as it doesn’t say “sweatshop”).

Maybe all this is a waste of money and resources. Most people go to an ecommerce site to point, click, buy and get out of there. But the same can be said of offline retailers, and that group has not hesitated to enrich the shopping experience with grand piano players, free beverages, or even (in the case of Home Depot) classes on DIY home improvement. They know that the extras are what bring people back, develop those coveted positive brand associations, and maybe even let them run those 70% off sales just a little less often.