Background Noise

Lazy Email Marketing

Like anyone else, I get my fair share of newsletters and promotional emails from retailers that I have purchased from in the past. Based on what I have been getting in my inbox, I get the impression that too many online retailers are taking email marketing for granted. It's the "bread and butter" of most marketing budgets. It's cheap. The results are tangible, and most internal creative departments can knock them out fairly easily.

The problem that I see lately, is that marketers aren't reacting to one of the biggest roadblocks between their message and the consumer: image suppression. Over the past two years or so, most ISP's and email clients have made image suppression a default behavior in their fight to ward off spam, spyware and other nefarious tricks that the bad guys employ. Unfortunately, I'm seeing very few cases where marketers are adapting to this change.

A few examples that have recently hit my inbox:

(click on the images to enlarge)

 

In both cases here, the message is totally and utterly lost. At least in the case with the Borders email, there are a few footer links that I could possibly click if I felt compelled to do so. But, it hardly represents the "Big News" that they claim in their subject.

The Sam Ash email at least displays some copy that attempts to convey the promotion, but unfortunately the giant disclaimer in the footer dominates the email. I think I looked at this email 3 times before I noticed that there was indeed a promotion here.

This may be the worst offender that I've seen lately, and I'm surprised because Nike has been in this game long enough to know better.

Finally, I wanted to show an example of someone that understands the challenge:

Note that there are still images contained in the message that are being suppressed, but the message itself has been composed in HTML without relying on images. The message is clear, compelling, and a creative use of HTML to display it.

The "term" lazy might be a bit harsh here, but unfortunately I think it fits. This has been a growing issue in the email marketing world for the past two years, and I can't imagine that these retailers aren't seeing a decline in their open and response rates. In our current economic conditions, squeezing every bit of opportunity out of your marketing budget is paramount, and email marketing should be no different.

Microsoft's Reality Distortion Field

It was hard to escape the news of Microsoft's Live Search Cashback program yesterday. I gave it some time to soak in, read through the flurry of opinion in the blogosphere - some good, but mostly bad. I even spent quite a bit of time with it this morning, making a purchase through one of their merchant partners.

One thing really stuck out to me as I read through the AP report, and that's this quote by Bill Gates:

"It's exciting. I think years from now you may look back and say, 'Wow, search started to get a fair bit more competitive,' and you can look back to that announcement,"

I'll let that just linger in the air for a minute before I continue....

OK...here's the deal, folks: Microsoft is apparently living in an alternate universe, where they understand consumer behavior on the Internet, and create innovative products to meet their demands.

In the real world, they are chasing their tale. Here's why Cashback probably won't amount to anything of consequence:

Where's the Innovation?: The MS Cashback site is really nothing more than a glorified affiliate program, where they pass their commission through to the consumer. Fatwallet has been doing this for quite some time. Upromise lets you take your cash reward and help fund your kid's college fund. iGive uses the same model, except they take the commission and donate it to any number of charitable causes. (I probably don't need to tell you how much more responsible the latter two examples are, as opposed to having a couple of bucks hit your PayPal account.)

It Will Change the Landscape of....: Comparison shopping on the Internet. Not search, and certainly not how marketers pay for search. I honestly can't see Google shaking in their shoes over this. Now, PriceGrabber,  Shopping.com or NexTag? They should be very afraid.

Consumer Behavior Will Prevail: Think about how you use search. Do you compartmentalize searching for something that you want to buy online differently than you do for other types of content? I'm guessing not....sure, you may end up at a product comparison site like the ones listed above, but there are good odds that you got there from a search engine link in the first place. How long until we see Google AdWords for Cashback links just like you do with every other shopping comparison site?

I have to make a slight disclaimer here: I work for a company that sells eCommerce software that competes (sort of) with Microsoft. I'm not Microsoft-bashing here for any other reason than I think they simply don't understand how they fit in the Internet space. I honestly can't think of a single instance in which they have truly innovated in years, and I wouldn't count Internet Explorer because we all know how it got it's initial market share. I will agree with most of what has been written so far, in that this smells really desperate.

Ad Serving Run Amok!

I bought a nice shiny new MacBook yesterday. I'm not sure how many Macs I've owned in my lifetime, but I think this might push the number into double digits. Anyway, it's my first Intel-based Mac and I've giving it a pretty good road test over the last 24-hours.

I've been thinking about writing a post on the current state of ad serving lately, so out of curiosity I decided to take a peek at my cookies in Firefox this morning. Holy crap! I've owned this computer for less than 24-hours. I installed Firefox maybe an hour after unboxing, and I'm guessing that I have 3-4 solid hours of browsing time logged so far.

Total number of cookies: 168
Number of cookies from ad serving networks: 71

It's not the sheer number that freaked me out....ok, the number did kinda freak me out a little bit...it's the fact that online marketing professionals are still buying into this as a viable way to spend their precious marketing dollars, and apparently there's a LOT of it going on.

If you're reading this right now, then I'll make the broad assumption that you've purchased something from the Internet before. Most likely, you've purchased a lot of things online. Now, when the last time you saw a banner-type ad somewhere, clicked-through and actually bought something as a result? Exactly...

Most of the ad networks today tend to dress up their services by calling it  "behavioral" or "contextual"  targeting, but it's far from being transparent or effective.

Example: I have a nice  canister vacuum from one of the high-end U.S. manufacturers. I realized that I hadn't changed the filter recently, and went to the manufacturers site to buy one. (I have no interest in going to Sears or Target in hopes that I could find a 3rd-party filter that might fit. I imagine it would be a lot like going to OfficeMax and trying to figure out what kind of ink jet cartridge I need for my printer.) Anyway, I don't see a filter for the model I have, so I find the nearest store and leave the site. About a day or so later, I notice that I keep seeing banner ads for a fancy new upright vacuum from the same company. And then I start seeing that same banner ad EVERYWHERE. I'm not the smartest guy in the world, but I realized what's happening here: The ad serving network saw that I abandoned their clients site, so obviously I have exhibited the target behavior for displaying their ad. Never mind the fact that I already own one of these ridiculously expensive vacuums. Or that I was explicitly searching a new filter. What the heck...throw that ad up there anyway. Maybe I need a second one so I won't have to carry the other one up the stairs all the time.

You get the point. To make matter worse, the pricing model for most of these networks is just ponderous. In my previous life, I sat in a room with a couple of sales guys from a very large network. The dialog went something like this:

Big Ad Network: We will monitor people that come to your site and then drop a cookie on those that exhibit certain behavior (i.e., they don't buy anything). Then, we'll serve up an ad to those same people as they traverse the Internet. If that same person returns to buy from your site, you'll pay us a small percentage of the revenue.

Me: You mean that I'll pay you if the user actually clicks-through from the ad that you're serving up, and then buys something, right?

Big Ad Network: No...we feel that we are influencing the user's behavior by simply showing the ad. If they return to buy, it's most likely because we "re-exposed" your brand to them.

At this point, I just smiled and nodded and thought about what I was going to have for lunch that day. This is just wrong on so many fundamental levels:

1. The vast majority of consumers don't generally buy on the first visit to a site. They research. They read reviews. They look for a better price. They bookmark the site with the intention of returning later. Do you really want to pay someone 5-10% off your margin for what is fairly common behavior?


2. On average, consumers click on 4 paid marketing campaigns before they make a purchase. Given the above behavior, why artificially inflate your customer acquisition cost?

Unfortunately, this wreaks of desperation marketing at a time when there is an abundance of tools for marketers to truly understand what the return is for their marketing spend. Stop the madness, people!

Microsoft & DoubleClick sittin in a tree...

By now, you may have heard that Microsoft is in active discussion to acquire online ad-serving network DoubleClick...and get this: DoubleClick is only asking a paltry $2 billion!

There are a lot of people out there weighing in on this over the last few days. Larry Dignan at ZDNet is in the camp that believe this could be a good move for Microsoft:

• DoubleClick, which serves ads and tracks them,  would bolster Microsoft's Adcenter, which is lagging behind both Google and Yahoo. With DoubleClick, Microsoft would have a suite of advertising services and software. And we all know how Microsoft just loves suites.

• DoubleClick would give Microsoft a big chunk of the online advertising market. Redmond's biggest worry is that the software industry will move to ad-supported applications and leave it in the dust. With DoubleClick, Microsoft would at least capture some chunk of the online advertising market.

• DoubleClick would bolster Microsoft's management ranks. Why is Microsoft so far behind in online advertising? It doesn't have the expertise that Google and Yahoo have. DoubleClick could change that a bit–assuming managers stayed with Microsoft of course.

• DoubleClick needs a partner. The Journal is reporting that Google will announce a DoubleClick-ish service in upcoming weeks. If you're DoubleClick and that oncoming train is Google why wouldn't you find a big brother like Microsoft?

You can count me firmly in the camp of this being a pretty bad move for Microsoft, although I am pretty skeptical that this will even happen. Don Dodge (who actually works for Microsoft) does a great job of putting this into perspective.

First off, just look at the financial aspect of this move: private equity firm Hellman & Friedman buy DoubleClick less than 18 months ago for about $1.1 billion. Over the course of the past year, they have divested DoubleClick holdings to the tune of around $525 million, which puts them at a net investment of just south of $600 million for the company. And now they're asking $2 billion for the stripped down model.

Oh, I almost forgot the best part: DoubleClick's revenue from it's ad-serving business last year was only about $100 million, which means they're only asking for a payday that's roughly 20x their revenues. What a deal!

To compound matters, DoubleClick's largest customer and cash cow is AOL. How quick do you think AOL would pull up it's stakes if this deal went down?

Look, if you want to find a champion of the Microsoft Way, you probably need to look elsewhere. But they've never been known as an easy mark, so I just don't see this happening. If they prove me wrong and it does come around, then we have living proof that Bill has indeed left the building.

Once upon a time, there used to be a saying that if you wanted to see what it felt like to compete with Microsoft, all you had to do was put your head in a vice and squeeze. Somehow I get the feeling that Microsoft isn't the one doing the squeezing these days!

 

Hello, it's me...

In the immortal words of Jim Anchower:

Hola, amigos. I know it's been a long time since I rapped at ya, but I got a lot on my plate these days!

If you're one of the 2 people that read my blog when I first started it, you remember that I made some vague references to some upcoming changes in my professional life. Well, that has seriously come to pass, and I've been drinking from the fire hose for the last month or so, and haven't had a moment to catch my breath and devote some time to my blog.

Shortly before the end of last year, I came to the realization that I would be leaving my position as Director of E-Commerce at Finish Line. I was in that role for 7-years, and very proud of what I accomplished over that period. Unfortunately, like any other relationship, perceptions and expectations can change over time, and it was time for me to move on to a new challenge.

After much deliberation, and some really great opportunities in front of me, I decided to take a position as a Solutions Strategist with ATG. I had been a client of theirs for quite some time, serving on their Customer Advisory Board for a couple of years, so I was very excited when the opportunity presented itself. In my new role, I'm going to working in a consultative role with prospects and existing customer, helping to align the technology with the real-world demands of their online business.

As some of the members of my new employer like to joke with me, I've crossed over the "Dark Side" now. As funny as that sounds, I'm jacked about sitting on a different side of the table than what I'm accustomed to, and it's just the challenge that I've looking for!

Ch-Ch-Ch-Ch-Changes...Part I

As I originally alluded to when I started this blog a few months ago, I was on the verge of some changes in my professional life, the first of which has come to pass. I have officially decided to leave my role as Director of E-Commerce at The Finish Line in order to pursue other opportunities. What might those "other opportunities" be? Well, I'm not prepared to say just yet, but I'm definitely excited about the conversations that I've been having, and what the future might bring!

I've been asked by several of my peers about why I decided to leave, and all I will say is that it was simply time for a change. I presided over a period of incredible growth during my tenure, and I'm proud of everything that I accomplished. But in the end, I feel that my professional reputation was being compromised by a final product that I simply couldn't put my name on any longer. There are still a lot of very good people there, and I wish them the best of luck.

That said, I do know that Finish Line is currently looking for a VP of Direct-to-Consumer, so if you are interested in the position, feel free to email me and I can direct you to the right person. I don't have a job spec, but I have seen it and they are looking for nothing short of an Internet/Direct Marketing rock star.

Do we still need professional critics?

I was stumbling my way around the Internet yesterday, and ran across a company called Critical Metrics. They are apparently still in "stealth mode", but not sure what that even means these days, as they have working site and their first application is open to the public. I think the trendy thing to do is call the company in "beta"!

At any rate, it's a fairly interesting idea: By now, everyone knows about the value of the voice of the consumer, and using consumer reviews and ratings as a selling tool. But the Critical Metrics value prop is based on making recommendations based on the collective wisdom...er, tastes of professional critics, and not the general public. Their first application of this algorithm is in music playlists, but their site alludes to future applications as well. I'm not entirely sure I'm sold on this yet, as the whole music recommendation market seems pretty crowded to me, and they have an uphill climb to make this a success.

The bigger question for me, is what value do professional critics have in the media today, especially the Internet? When is the last time you bought music on the advice of a review in Rolling Stone, SPIN, or Blender? Or went to see a movie because Roger Ebert gave it four-stars? Perhaps this is where my version of reality is somewhat skewed by what I do for a living. I spend all of my time on the Internet, so my exposure to consumer reviews is about 100x my exposure to professional critics. The only exception to that rule might be with food and wine, but I think you get the point.

But maybe, just maybe, this is the genius of Critical Metrics: perhaps they recognize that the role itself of the professional critic is gradually shifting to that of a "highly trusted reviewer", and they are not simply aggregating the recommendations of a group of random people, but a group of people who are perceived to be experts at what they are reviewing. Take the collective wisdom of professional critics, and expose them to a customer that may have long-forgotten what value their opinions actually hold. An interesting evolution of the role of "critic", and time will tell as to how this will play outside the context of mainstream media.

On a side-note, the guy behind the idea is a familiar name to those of you that remember the early days of the Internet: Joey Anuff, co-founder of Suck.com. Now that I've dusted that memory off for you, try not to spend the rest of your day reading the archives!

Omniture's Integration Play

I haven't posted in a while, which I can blame on being in the middle of the holiday season as well as a nasty case of procrastination. I do have a few topics of interest that I want to get to, so hopefully I can get back into the rhythm of things.

I followed a press clipping yesterday to a demo of Ominture's new Genesis product, and I have to say that I'm impressed at first blush. While Omniture has always been one of the premier online analytics firms, I've held the opinion that their reporting interface seemed somewhat awkward when trying to measure traditional E-Commerce KPI's.

Granted, I've only seen the online demo and Data Sheet so far, but this looks like a step in the right direction for Omniture. It certainly addresses one of the biggest pain-points that we have to deal with on a regular basis, which is how to take analytical data from multiple sources and capture it in a way that enables you to make actionable decisions about your site. There's an adage in this business that suggests that if you have a $100K annual budget for site analytics, you should spend $10K on software and $90K on someone to manage it for you. A bit of an exaggeration obviously, but I think it illustrates the point that it's very difficult to properly manage the sea of qualitative and quantitative data  that exists for any E-Commerce business.

Here's the angle with Genesis that may enable them to stand out from their competition:

They acknowledge the fact that most of their customers use a handful of marketing applications from other vendors (email, affiliate programs, site search, SEO, etc..), and most of the common applications are already integrated into a simple drag-and-drop interface. They have basically created a common reporting platform to manage all of the disparate data that marketers have to sift through in order to make decisions on their marketing campaigns and site usability.

This is obviously Version 1.0, and everything looks great in a Flash demo, but I am certainly looking forward to getting a closer look at the Shop.org First Look event.

Community-Driven Commerce in Real Time?

I'm "thinking out loud" a bit in this post today, so please bear with me...

Since I've been involved with E-Commerce and the Internet in general, there has always been this school of thought that you need too make your site "sticky". This can mean many things to many people, but in terms of selling on-line, you typically want to build long-term relationships with your customers, and provide content to keep them on your site longer. The obvious net result is that repeat visitors buy more often and have a higher AOV. And certainly the longer you can keep them kicking around on your site, the more opportunities you have to merchandise relevant product to them and ultimately increase your conversion.

Sounds simple, right?

Wrong. The two biggest problems that I have encountered are that:

1, ) Not all of your customers really want a relationship with you. They may be very loyal to your brand, and they could be frequent shoppers on your site, but the vast majority of them probably choose to express their loyalty in a very simplistic way: they are buying from you instead of someone else. Yet, there are no shortages of E-Commerce sites that are designed only for their own definition of  a customer relationship: you either have to be a part of their loyalty program, or choose to submit yourself to building some flavor of "My Something", which is typically nothing more than profile building.

There's certainly nothing wrong with this approach, except that while it works great for the roughly 20% of your customers that choose to participate in this process, it's typically done at the expense of the long tail of your customer base. What are you doing to foster a "relationship" with your customers that don't want one? Pounding them over the head with your loyalty program or repeatedly asking them to build a profile isn't the answer.

2) Your customers probably don't trust you as much as you think they do. No matter how powerful your brand equity or market share is, there's very little that the customer will take at face value. One of the biggest hurdles that any on-line retailer has to face, is building trust with the customer at every inflection point in the shopping process. We can't really communicate with the customer while they shop, so all that we can do is try to anticipate potential problems and address them as often as possible on our site.

Enter the concept of community-driven commerce and word-of-mouth marketing. While your customers may not trust you all that much, their trust in the collective opinion of other consumers is on the rise. According to an Edelman study earlier this year, consumer's trust in "a person like me" has gone from 20% in 2003 to 68% today.

“We have reached an important juncture, where the lack of trust in established institutions and figures of authority has motivated people to trust their peers as the best sources of information about a company,” said Richard Edelman, president and CEO, Edelman. “Companies need to move away from sole reliance on top-down messages delivered to elites toward fostering peer-to-peer dialogue among consumers and employees, activating a company’s most credible advocates.”

(And just to beat someone to the punch on this....yes, the irony of quoting Richard Edelman on the subject of trust is not lost on me.)

I'm a long-time proponent of this trend myself. We have been displaying very rudimentary customer ratings and reviews on our site for several years. This year, we handed off the management of this functionality to BazaarVoice, as it had grown far beyond our ability to manage it effectively in-house, not to mention our inability to truly measure the impact it was having on our site.

While I think that it's imperative to harness the voice of your customer, and I believe that this is arguably the best approach available today, it's still based on predictive behavior. You have to encourage your existing customers to rate products and write reviews, and then place that content where it will have the most impact on future customers.

As I was reading this post on TechCrunch today, it struck me that there could be an application here for E-Commerce. In short, Geesee is an embedded chat service, that allows consumers to chat about any subject, across multiple sites.

The social marketing implications of this concept aside, it immediately struck me that perhaps this could be the next step in community-driven commerce. What if there was a way for your customers to communicate in real-time with other customers who are also shopping your site, in a relatively controlled environment?

Shopping on-line has always been a fairly solitary exercise, but that doesn't mean that it has to be.  It's clear that consumers value the opinion of other consumers, so wouldn't the next logical step be to remove the lag in putting them together?

Style over Substance in E-Commerce

I was unable to attend the Shop.org Annual Summit last month, unfortunately, which is probably the best 3-days you can spend away from the office in this industry (while not on vacation). So, while I was in the process of cleaning out my ridiculously bloated inbox at work yesterday, I came across a few archived e-mails from colleagues, vendors and the press that contained notes and summaries of the presentations and workshops. One of the workshops was on the subject of what the presenter was calling E-Commerce 3.0, and how we are apparently at the dawn of a new era in E-Commerce right now. Damn it...here I am just starting to figure out this whole Web 2.0 thing, and now they've decided to upgrade the Internet!

In all seriousness, there seems to be a growing trend emerging in the E-Commerce industry that I believe to be fundamentally flawed; the practice of throwing what some would call "Web 2.0" applications at a site, in such a way that it completely breaks the existing online shopping metaphor that the consumer has been trained to use. In the past few months, I've seen sites totally redesigned in Flash, and Ajax being completely over-used, and in some cases it seems only for the sake of using it.

For the record, I am a huge proponent of the applications of tools and techniques such as Ajax and Flex in an E-Commerce site, but not at the expense of the basic fundamentals of usability. Their use is probably most common in applications such as single-screen checkout, which is an obvious place to try and improve upon the existing process, and recoup some the user abandonment that naturally occurs during checkout. Another great example is at Gap.com, where the consumer has the option of using their QuickLook feature to add something to their shopping cart without clicking through to a product detail page. It took me a while to warm up to this concept after it was launched last year, but it ultimately seems very intuitive and not overly intrusive to the customer's browsing behavior. It's probably something that frequent shoppers of the Gap will gravitate to, which should ultimately lead to an increase in conversion and AOV for repeat visitors.

I think there are also multiple examples of smaller, less-mainstream shopping sites that were built from the ground-up using Ruby on Rails, which simply blow me away. But ,that is a subject for a future post...

Obviously, the overall business of selling online has matured to the point where all of the low-hanging-fruit has been plucked, and we all have to work a little bit harder these days to not only win new customers, but keep the ones that we already have. Unfortunately, this seems to be causing a reaction in our business where we spend more time trying to chase the next hot thing, instead of listening to our customers and sticking to the fundamentals.

Like it or not, the basic framework for a successful E-Commerce site hasn't changed in several years, and for a good reason: It's simply not broke. I'm of the opinion that this notion of E-Commerce 3.0 seems like too much grasping at straws, and could ultimately create too much confusion in the marketplace.

I am horrible at attributing quotes to the right people, but there's one that comes to mind which bears repeating:

"Those who cannot remember the past are condemned to repeat it."