Channel Intelligence Blog

New Metrics for Measuring the Effectiveness of Display Advertising

Do you currently use online display advertising? Are you interested in learning how performance of this media can be measured more accurately? 

Join us for a webinar Thursday, November 19, at 2 PM EDT. 

Traditionally, online display advertising (banner ads, anyone?) were measured only in terms of clicks or impressions. With clicks on the decline and budgets tightening, it’s important to measure accurately the true effectiveness of display advertising campaigns so marketers like you can make informed decisions to maximize your ad spend.

Now, it’s possible to measure a display ad’s effect beyond immediate clicks. In fact, it’s proven that buying behavior is affected even in consumers who may have seen an ad but didn’t click it. Display ads are also known to produce an effect on other seemingly unrelated marketing campaigns. Now, an ad’s effects can be quantified in concrete terms. 

This improved measurement lets marketers better target future ads to continually improve performance, as well as determine more effective allocation of marketing budgets.

Steven Roth, VP, Performance Marketing at CI, presents this new webinar, promising to help advertisers learn more about the best ways to measure and improve the effectiveness of display ads. 

Register for the webinar here!

2009: eCommerce Comes of Age

For many years now the dotcom side of the multi-channel retailer house has been treated like a red-headed stepchild. Minimal budget, little focus, no respect.

In 2009 we are at an inflection point.

With a brutal economic environment, a wave of soaring gas prices and ongoing consumer uneasiness all weighing heavily on the bricks and mortar stores, something had to give. Stores have been closing. Retail chains have been filing for bankruptcy. Retailers have been scrambling. Even last night I watched the six o'clock news talk to Starbucks CEO, Howard Schultz as he said "We thought we were recession-proof, but we're not."

Among all this doom and gloom there is a shining star and that star is eCommerce.

Online retail has been doing fine through this holiday season. Channel Intelligence has seen year-over-year sales rise over 15% from what we saw in 2007. Sales are up. Orders are up. Average order value is up. Black Friday sales were up 40% over 2007. People are going online and they are buying.

Discounts, deals and promotions are everywhere enticing consumers to buy. Every Monday is Cyber Monday. Every Friday is Black Friday. Free Shipping. Buy one, get another at half price. These are not sporadic promotions. We see them happening every hour of every day as retailers work to drive online sales.

For multi-channel retailers however, it doesn't end with the online promotion.

Now the realization that the dotcom can drive in-store sales seems to be taking hold. Buy online, pick up in store or "BOPIS" as I like to call it is becoming more than just nice-to-have. It is becoming a must-have. Same price in store as online is a leading message for Circuit City. People are researching online and buying locally. With money being tight in this economy you can't just drive all around town hoping to find the things you want to buy. Retailers have tight inventories this year so they may not have things in stock. People are planning. They're making lists. They're using mobile phones and GPS units to find what they want. They're using the Internet to ensure they are getting a good price, buying the right brand and they know where to go to get it.

2009 is the year that eCommerce comes of age. It is not an after-thought. It is the leading strategy for any successful multi-channel retailer. The dotcom is no longer just another store, it is the store that drives sales to the other stores.

Consumer Electronics Traffic is Up, Sales Volume Down

I compared three months of statistical data from May-July 2007 and May-July 2008 for consumer electronics manufacturers Samsung, Sharp Electronics, Panasonic and Philips. Overall traffic to these manufacturer product pages was up 5% on average. Orders were up 28% and units sold were up 59%. However, actual sales dollars were down 23% as the average product price dropped from $471 to $229.

Reflective of economic conditions, this supports my thought that more people are buying online but they are being frugal in their purchases. More people are going to manufacturer Web sites and are buying more products. But the overall dollars they are spending on these products is less.

To help put it in perspective, gas prices in the May-July 2007 timeframe averaged $3.07, about $1.00 less per gallon than now.

The Future is Now

According to Dan Stanek, executive vice president of Retail Forward, who recently spoke at the Retailing Smarter conference here in Central Florida, "retailers and suppliers will be shaking in their boots because the consumer will have complete control in 2015". I'm not sure what measure is used to determine complete control but if it includes...

• Free will to change their minds
• Abundant choice of products
• Access to multiple retailers that carry a product
• Practically unlimited information on products, brands and competitive offerings
• Social networking that provides instant consumer opinion, ratings and reviews
• Transparent pricing

...then retailers and suppliers don't have to wait until 2015. The future is now.

$5 Gas = eCommerce Boom

In a rough economy with gas prices steadily rising it looks like people would rather buy online than spend $5 to drive down the street to their local brick and mortar store. This economy looks very, very good for eCommerce. It's not just my thought - it also seems to be the thought of many online retailers...

I just met with Michael Carioti and Michelle Stoll from Provantage. They are yet another retailer who has a very positive outlook on 2008 sales. Provantage is a pure play online retailer with tens of thousands of products that are supplied through distribution.  They know their margins and are very competitively priced. They know who they are and what they are. They also know their client base and have done well in servicing that client base the past 24 years.

Service, selection and low prices. Sounds like a recipe for success. How is your online business looking for the remainder of 2008?

How Social Media is Changing eCommerce

The re-invention of eCommerce is happening continuously and with the lightning speed of retail innovation, still, some retailers are choosing to stand by and wait.  With the state of today’s economy some retailers are reluctant to invest in new, unproven ideas that don't provide a known ROI (return on investment).  They are especially conservative about making changes to their eCommerce Web sites because they are beginning to produce a significant contribution to the company's “Bottom Line.”  Many retailers are of the "if it isn't broken, don't fix it" mindset that leads to stagnation.  In our industry, those who innovate will gain market share and margin share.

Enter social media and social networking, these are the next generation of Web sites.  They are focused on a product or product group and focus on the details.  Compare the Best Buy corporate Web site with a photographer's Web site focused on specific digital cameras.  Best Buy will have the information needed to make a buying decision, however, the photographer's Web site or personal blog will have the same info, along with reviews, opinions and stories focused on the “experience” the user had with a product.  The online landscape has gone through a transformation over the past couple years that has taken the control from the “webmasters” and put it in the hands of the end-users; i.e. customer, clients and vendors.  This is a paradigm shift that could change the way people shop as profoundly as the transformation from brick and mortar to online shopping.

As experts are indicating that social networks are the next wave of online commerce, traditional retailers are scrambling to understand how to benefit from them.  The social media user community has created a new space to do business which has created a new brand inside this space.  Shoppers are now looking to see what their friends or members of an online community purchased versus going directly to the retailer.  The branding is associated with individual credibility instead of the retailer’s main eCommerce site.  If retailers can learn to embrace, encourage and influence this space it could become a significant sales channel and an effective testing ground for new concepts and new technologies.

I would think that if risk and effort are non-existent to the retailer, then these sites are a good way to explore new retail concepts.  Also, think about them as an effective testing ground for new concepts with unique business models and they can also be used for evaluations when trying new technologies and ideas.

The biggest questions facing the retailers will be – how do you tap into the mindset of a whole community? How do people interact within an online group?  How do retailers or manufacturers re-invent their corporate way of thought when the landscape is changing every month?  These are the questions being answered today by the social marketplace … we are no longer selling to an individual, we are selling to a community and that community tells us what our product will be, do, have.