Pay-per-click advertising unpredictable and complex

This finding came from a survey commissioned by Dutch firm Toading and conducted by Pulstracker. It was found that 71% of surveyed companies in Europe claimed some deterioration, with 21% of the total complaining of a major drop in performance.

The principle cause for this decline, according to the surveyed companies, was likely to be increased competition within their own industry sector, as more pay-per-click advertisers in their space had pushed up the bidding for keywords (63%). Nearly a quarter of the companies complained that they were unable or could not afford to bring in outside expertise to fine-tune their performance (24%). Only 3% believed that the change was down to fluctuating market conditions in their sector, resulting in less demand for their product or service.

The complexity of setting up account options was mentioned (22%), but a majority of unhappy respondents (52%) said the biggest practical hurdle for them was the `complicated’ keyword bidding process. 26% said that balancing the need for outside expertise and consultancy with the corresponding cost and impact on ROI was causing problems for them.

Businesses’ continued use of pay-per click advertising shows that they have benefited and still find it a valuable tool, but they find it an unpredictable and complex undertaking, as this study has found,” said Mathijs van Abbe, CEO, Toading.

“Keyword bidding in particular crops up as a frustration for advertisers. This is a sign that, as markets become more crowded, advertisers need to be more precise about their offerings, including pricing information. Not only is this helpful for potential customers, but it can dramatically improve conversion rates, and doesn’t have to be the complicated process many fear it to be.”

Google CEO bullish on mobile Web advertising

DAVOS, Switzerland (Reuters) – The arrival of a truly mobile Web, offering a new generation of location-based advertising, is set to unleash a “huge revolution”, Google Inc Chief Executive Eric Schmidt said on Friday.

“It’s the recreation of the Internet, it’s the recreation of the PC (personal computer) story and it is before us — and it is very likely it will happen in the next year,” he told a panel at the World Economic Forum.

Current estimates for mobile advertising are cautious, with consultancy Forrester predicting revenues of under $1 billion by 2012.

But Schmidt said this figure was too low and failed to take into account the fact the mobile Web was reaching a tipping point.

Google aims to be a prime mover by bidding for coveted airwaves to launch an open U.S. wireless network, pitting it against established telecommunications players. The move will take the Silicon Valley-based company well beyond its core Web search and online advertising franchises.

Some analysts are worried at the high costs involved but Schmidt said he was confident location-based advertising — which could, for example, direct hungry travellers to nearby restaurants — would be “a very, very good business”.

Content providers, already struggling in the modern world of music and film downloads, are less convinced that mobile Internet is a minefield.

“It is not going to be easy to hang on the price of content,” said Howard Stringer, chief executive of Sony Corp.

Study: Mobile Media Users More Receptive to Ads

Mobile media users are more receptive to advertising and more willing to use their mobile devices for commerce than conventional wisdom would hold, finds a new study released by Starcom USA.

Regarding mobile advertising, Starcom’s study found that among light and heavy mobile media users, consumers are OK with advertising as long as it carries some relevance. That is due to the personal nature of mobile devices, says Starcom, which found that most participants in its study (conducted among users in Chicago, Houston, New York and San Francisco) are willing to share personal information with marketers in exchange for targeted, relevant ads. That flies in the face of some industry thinking, as advertisers are often wary of consumers’ crossing personal boundaries in mobile.

Similarly, with mobile commerce, Starcom found that the issue holding back consumers from buying things with their mobile devices isn’t privacy concerns, but rather frustration with the mobile shopping experience. However, just 5 percent of respondents cited shopping as something they’d like access to on their mobile phones.

Overall, the new study is aimed at dispelling a variety of mobile myths, said Starcom officials. The research identifies ten key insights for the nascent medium, which Starcom says has created a new daypart – a 24/7 media time period.

“Mobile’s capabilities are changing consumer expectations and therefore will have broader implications on how marketers approach all forms of communication moving forward,” said Angela Steele, Starcom vp/activation director, who led the research study. “These insights blow the doors wide open for new meaningful content, formats and opportunities for ad placement in campaigns.”

However, it’s worth mentioning that usage of mobile devices for functions other than phone calls or text messages remains in its infancy. Indeed, Starcom’s research is limited to consumers from urban regions who identify themselves as mobile media users. According to a November report from Nielsen, just 16 percent of the total U.S. mobile audience, or 33.7 million users, accessed the Internet at all using a mobile device.

When’s the Best Time to Send Email to Target Consumers at Work? Test Results

SUMMARY: Don’t take every fact and figure you read as gospel. Marketers need to rely on their own tests to determine important email elements, including when’s the best time to send your blast.

An eretailer wondered how much of a difference they could make by testing the time of day to send their blasts. Turns out a lot — clickthroughs increased 15.63% and revenue jumped, too.
CHALLENGE
Matt O’Laughlin, Marketing Business Analyst, Second Act LLC, was brought aboard the electronics eretailer last year to modernize email marketing. At the time, their program amounted to a monthly newsletter blast.

O’Laughlin and his team started applying best practices to their email right away. They revamped their email signup page to include 16 preference selections and began segmenting their database accordingly. Then, they ran a series of best-day email tests.

When the results came back, they were surprised to find that Tuesday beat Monday and Wednesday for opens and clickthroughs. But O’Laughlin didn’t want to stop there. He wondered if time of day would make a difference, too.

CAMPAIGN
O’Laughlin knew a big portion of Second Act’s orders were being placed during regular business hours. He and his team decided to zero in on their at-work consumer audience.

Here are the four steps they followed:

-> Step #1. Use analytics to determine busiest time

To get started, they checked for their website’s busiest windows of time and verified what they suspected: The site was most active during the 9 a.m.-5 p.m. workday.

“Morning and noon were peak times for unique visitors,” O’Laughlin says. “We also wanted to see how another time that saw fewer uniques would affect clickthroughs.”

The difference in traffic wasn’t tremendously different between 9 a.m. and 30 or 60 minutes later, for instance, so they didn’t test slight variations. Instead, they used analytics to boil down the test to three different send times (in Central standard time). Their rationale for each:

- 9 a.m.: People are just getting settled at their desks and haven’t locked in on work yet.
- 12 p.m.: When most recipients begin their lunch hours and often make orders online.
- 4 p.m.: The time O’Laughlin wanted to test to determine whether email would perform better than the website at this slot — when workers begin winding down their days and start thinking about home and their family needs there. The team speculated that a little call-to-action email might pick up sales.

-> Step #2. Segment the list

The team made use of recently instituted preference segmentation. O’Laughlin took a file of consumers who signed up specifically for weekly coupon alerts and split it evenly in an A/B/C fashion. This file made sense because it was filled with names mostly from the Central, Eastern and Mountain time zones (in that order).

This was important because O’Laughlin and his team weren’t ready to segment separately to all four U.S. time zones; all of their campaigns in the near future were going to be sent to an entire file at the same time.

Hence, it seemed smart to concentrate on the three time zones that were not only most prominent in their database, but also “closest together” on the world clock (e.g., 9 a.m. Central is closer in the work-day sense to both 10 a.m. Eastern and 8 a.m. Mountain when compared to 7 a.m. Pacific).

-> Step #3. Keep variables consistent

Because they wanted time of day to be the only variable, each file received the same subject line with the same message and the same offer (Apple iPods sale).

-> Step #4. Pay attention to what matters

O’Laughlin also focused only on clickthroughs. Opens were inconsequential, he says, because the subject line was the same for all three splits. Because the sophistication of their landing pages was still in their infancy, “what was most important to us was to get people from the email message to the site.”

RESULTS
Test returns produced a clear winner — 9 a.m. The clickthrough rates for each:
o 9 a.m. performed 15.63% better than 4 p.m.
o 9 a.m. performed 9.4% better than 12 p.m.
o 12 p.m. performed 6.9% better than 4 p.m.

“As for email-driven revenue, the test was sent on Aug. 30th. Then, 85% of email-driven revenue for 2007 occurred between September and the end of December,” O’Laughlin says. “So, yes, this definitely increased revenue.”

Because the only variable was time of day, the results were conclusive enough for O’Laughlin and his team to implement the 9 a.m. mailing tactic as an important strategy from this point forward, although they plan to continually monitor with more tests down the road. In the end, his hunch that people at work most often read their emails first thing in the morning turned out to be correct.

“A lot of people right after they get into work, they check their email, log onto ESPN.com or their favorite news source and take care of those things before digging into their professional tasks.”

Useful links related to this article

Creative samples from Second Act’s email test:
http://www.marketingsherpa.com/cs/secondact/study.html

Past Sherpa article – Organic Dish’s day-of-the-week and subject line tests:
http://www.marketingsherpa.com/article.html?ident=30280

Silverpop – Second Act’s email service provider:
http://www.silverpop.com

Omniture Inc. – Second Act’s analytics service provider:
http://www.omniture.com

Second Act LLC:
http://www.secondact.com

“Staycations” among top travel trends expected this year

Top trends predicted for this year include “Staycations,” where travelers stay close to home and take long weekends instead of weeks away. Cruising, volunteer vacations, climate sightseeing and “couch surfing” to find stranger’s homes to stay are also trends, according to JWT, the US’s largest ad agency.

Also, medical tourism and babymoons where couples take a vacation before their first baby.

Other trends to look for:

· Yahoo Travel’s destinations that got the biggest increase in page views in Yahoo Travel Guides were Lancaster, Pa.; Ocean City, N.J.; South Lake Tahoe, Calif.; Wildwood, N.J.; Helen, Ga.; and Pigeon Forge, Tenn.

· The top 10 destinations for 2008, according to a survey of Lonely Planet staffers, include many places in the US with an emphasis on national parks and Hawaii; and Mexico, with an emphasis on Mexico City and the Pacific Coast.

· According to the US Commerce Department’s Office of Travel & Tourism Industries, air travel by US citizens January to September 2007 was up 2% to Europe, down 3.1% to the Caribbean, and down 3.4% to Canada.

· The top five destinations for US residents traveling abroad in 2006, the most recent year for which figures by country were available, were Mexico, Canada, the United Kingdom, France and Italy, according to wire services.

CREDIT: Second Life avatars shopping in an undated image. Virtual worlds, mobile coupons and bar-code readers on cell phones are the next technology wave that U.S. chain stores must ride if they hope to stay competitive in the fast-changing world of global retail. REUTERS/Linden Labs/Handout

CREDIT: A woman poses next to cell phones at the ‘Internationale Funkausstellung’ (IFA) 2006 consumer electronics fair in Berlin September 1, 2006. Virtual worlds, mobile coupons and bar-code readers on cell phones are the next technology wave that U.S. chain stores must ride if they hope to stay competitive in the fast-changing world of global retail. . REUTERS/Tobias Schwarz

NEW YORK (Reuters) – Virtual worlds, mobile coupons and bar-code readers on cell phones are the next technology wave that U.S. chain stores must ride if they hope to stay competitive in the fast-changing world of global retail.

Retailers, gathered in New York this week for the National Retail Federation’s (NRF) annual convention, were urged to go high-tech to stand out in the crowd and improve sales, especially amid a flagging U.S. economy.

“The cell phone is shifting the way consumers shop, and U.S. retailers need to get ready,” said Pat Conroy, vice chairman at Deloitte & Touche USA, in a keynote speech at the convention.

Wendy Liebmann, chief executive of consulting firm WSL Strategic Retail, points to prom dress shoppers who take pictures of themselves with their cell phone cameras, then post the photos online so friends can help pick which outfit to buy.

The Internet has also become more interactive, with consumers spending more time — and money — in virtual worlds like Second Life and Webkinz.

“These technologies are going to change the way you interact with your customer, they’re going to change the way people shop, they’re going to change the way you manage your brands,” said Giff Constable, general manager at Electric Sheep Co, which designs content for virtual worlds, like Second Life.

RETAILERS RESPOND

U.S. retailers need to adopt technological advances that have already changed shopper behavior across the globe, Conroy said.

For instance, he noted that customers at McDonald’s Corp restaurants in South Korea can purchase food on cell phones, which then ring when their orders are ready.

In China, mobile commerce is expected to reach $1 trillion in 2010, while in Japan, cell phones have bar-code scanners so consumers can check the freshness of food with their phones.

“Asia’s leading the way,” he said, but changes are also taking place in the U.S. market.

“The lines between merchandiser and technologist are certainly blurring,” said Philip Schoonover, chief executive of consumer electronics retailer Circuit City Stores Inc , where store and call center staff use tablet PCs to search the Web alongside consumers.

Constable said corporations are putting big bucks into virtual worlds — three-dimensional parallel universes on the Internet — where users typically create and dress up characters, buy goods and interact with others.

Last year, Walt Disney Co purchased kids’ virtual world Club Penguin for $350 million in cash plus up to $350 million more, depending on the Web site’s earnings in 2008 and 2009.

While some retailers have started building stores in these virtual worlds, others should consider doing the same, Constable said, to extend their brands and eventually, boost sales.

PROGRESS FOR A PRICE

But a pervasive undercurrent at the convention was worry over the state of the U.S. economy, and what that will mean for profits.

The NRF forecasts U.S. retail sales will rise 3.5 percent this year, the lowest rate of growth since 2002.

So while new technologies are appealing, there is little room in the budget for them.

At a panel discussion, the chief information officers of Michaels Stores and Circuit City said most of their technology budgets have been eaten up by maintaining day-to-day operations — like paying the power bills.

Retailers said their top technology initiatives for 2008 were to replace or upgrade their merchandising and inventory management systems, according to a survey by International Business Machines Corp and the NRF Foundation. No. 2 was replacing cash registers.

Though keeping costs down is key this year, retailers such as Bon-Ton Stores Inc recognize the importance of upgrades, and are still spending despite the rocky economy.

“Return on investment on some of the technology … out there, that we’re thinking that we need, is absolutely crucial for us to take the next step,” said Edward Carroll, a Bon-Ton vice president of sales promotion and marketing.

Nielsen: More Users Utilizing Mobile Devices for Search

A lot more people are using their mobile devices for search–but few are conducting such searches via the mobile Web.

Approximately 46.1 million mobile subscribers used some sort of mobile search option during the third quarter of last year, according to a new report released by Nielsen Mobile, representing 22 percent of the nearly 208 million wireless subscribers in the U.S. But most of those users conducted those searches not on the Internet, but through dialing 411 or by sending text messages.

In fact, just 9 million users, or roughly 4 percent of the total mobile audience, conducted searches via mobile Web sites like Google and Yahoo this past August, found Nielsen. And despite the excitement surrounding Apple’s iPhone and its descendants, just 16 percent of the mobile audience, or 33.7 million users, accessed the Internet at all using a mobile device as of Nielsen’s most recent estimate from November.

Thus, for the moment, most mobile users are sticking with mobile devices’ basic communication functions to conduct searches – perhaps limiting the short-term ad opportunities for mobile search. Nielsen found that 18.1 million users utilized 411 for searches during the most recent third quarter. Meanwhile 14.1 million users conducted searches – whether for local business, news or sports scores – by sending text messages to top mobile media players such as Google or Yahoo.

Gesture Based Outdoor Interactive POS

[youtube=http://www.youtube.com/watch?v=7uixUmxH-Z0&rel=1&border=1]

The Alternative has developed a gesture based interaction screen for Orange. According to The Alternative it’s the first time that a technology like this has been shown to the public. Via the large projected image and a touch-free interface, the installation provides users with a new way to activate news, film clips and music videos.

Mobile Pitches Hit Home

JANUARY 17, 2008

Are you ready for ads on your handset?

Advertisers are starting to reach US consumers by mobile phone in large numbers, according to the Limbo-sponsored “Mobile Advertising Report,” conducted by GfK NOP Research.

Limbo said that 78 million US consumers saw or heard advertising on their mobile phones in the fourth quarter of 2007, despite low overall spending on mobile compared with other media.

“There is a clear disparity between the high reach of mobile media and the low percentage of marketing budget currently spent on the medium, which creates an obvious opportunity for savvy media buyers,” said Rob Lawson, president and co-founder of Limbo.

Those who had seen a mobile ad were most likely to have seen an SMS message. Fewer had seen mobile TV and video ads.

Limbo said that widespread SMS usage contributed to high ad reach, with more than half of mobile users saying they used SMS messaging.

Mobile ad exposure was highest among young adults. More than half of 18- to 24-year-olds said they had seen or heard a mobile ad.

SMS messaging is compelling for many marketers because consumers are very likely to pay attention to text messages.

Text messages had the highest rate of interaction for any rich media type measured in PointRoll’s “Entertainment Analysis” report. Text messages had an interaction rate of nearly 13% when used as part of entertainment rich media campaigns fielded in 2006 and the first quarter of 2007—more than video, audio or gaming.

Google U.K. and comScore Reveal Importance of Search Engines

JANUARY 11, 2008. Google U.K. and comScore, Inc. (Nasdaq: SCOR), announced the results of a study into online consumer behaviour in the travel sector, finding that consumers are using search engines in more sophisticated ways to research and purchase travel in the UK.

The Internet is rapidly becoming the number one resource for the travel consumer. The study revealed that 20 million people in the U.K. utilized search engines for travel information in the first quarter of 2007. Key findings include:

On average, consumers take nearly a month to go from their first search to a purchase
On average, customers make 12 travel related searches, visit 22 websites and take 29 days from the first time they search until they make a purchase. Forty-five per cent of transactions occur four weeks or more after the first search. The time spent online is lengthy, representing a prolonged opportunity for advertisers to reach and influence consumers while they search for information.

On average travelers visit the purchase website 2.5 times
Most shoppers visit the site they eventually purchase from more than once, averaging 2.5 visits. For tour operators this was significantly higher at 3.9. Just ten per cent of the transactions take place on the first search referral to a given site, and 38 per cent of transactions happen at four weeks or more after the first visit. Travel companies face a growing challenge to retain the online consumer as the proliferation of competition encourages travel customers to shop around.

Generic search terms play a significant role in the consumer journey to purchase
Many travel businesses could be missing out on the opportunity for additional bookings and branding opportunities by overlooking the value of advertising against generic search terms (e.g. ‘package holiday’, ‘Italy travel’).

Fifty-four per cent of online travel buyers started the shopping process with a generic product or destination search term, and 10 per cent did not use branded terms (such as ‘Thompson holiday’ or ‘EasyJet flights’) at all during their online travel shopping experience. Importantly, over a third of travel buyers use a generic term as the last search before they purchase, giving advertisers a key window to influence their purchase right up until the last minute.

Consumers change the type of keywords used as they move along the path to purchase. Of all consumers sampled that made a final purchase, 29 per cent start with a non-branded search term but end with a brand search term.

Google U.K.’s Robin Frewer, Industry Leader, Travel said, “This research proves travel searchers are becoming more brand fickle — spending a large amount of time researching their desired purchase, and considering offers from competing brands. The fact that users are using more generic search queries gives ample opportunity for brands to attract new customers — and brands that are not present during these searches are missing out on sales.”

“Online research and more specifically search has become a critical first step for consumers considering purchases,” said Bob Ivins, EVP of European Markets for comScore. “By studying the entire online purchase path from first search to actual transaction we are able to quantify the importance of that first search and subsequent searches, and help marketers impact purchase decision. We are delighted to have had the opportunity to leverage comScore’s global Internet usage and e-commerce tracking systems to help Google better understand how customers behave during the purchase cycle.”

Methodology
Sample: UK consumers using search engines to research travel (99 per cent of all travel website unique visitors). Analysis focused on Q1 2007, with the first search captured in January 2007 and individuals tracked for up to 12 weeks. Tracking more than 20,000 searchers from the comScore Media Metrix panel.

Time alignment: Each individual’s activity was time-aligned to a “common” start point based on their initial query, in order to understand activity from a user perspective in the 12 weeks from the start of the process.

Search engines tracked: All major search engines in the UK, including but not limited to Google, Yahoo, MSN, AOL, Ask.

Search term categorization: Developed jointly by Google and comScore with tens of thousands of queries categorized. comScore, in conjunction with Google, categorized the search terms captured into three main categories — brand searches, product searches and destination searches. The search terms that were categorized allowed the study to track 99% of all travel searchers in the period. The high level categorization is hierarchical: “brand” terms include any search term that contains a brand keyword, even if there are product or destination terms (e.g. easyjet to Nice), product terms include search terms that contain product keywords but not brand terms (e.g. cheap flights to Nice), and destination terms are terms that only included destinations and no product or brand keywords (e.g. Nice).