Monday, July 28, 2008

Retail Shoppers Hit the Web First

JULY 28, 2008

Checking purchases out before checkout

While some consumers in the US are shopping online to avoid driving, even those visiting stores in person are hitting the Web first.

Eight out of 10 respondents who had recently made consumer electronics purchases in a brick-and-mortar store said they had visited the store's Website first, according to a May 2008 Nielsen Online survey. More than one-half said they purchased from the retailer on whose Website they had spent the most time.

"Consumer electronics is an ideal product category to research online, since product features and prices can be easily compared," said Jeffrey Grau, senior analyst at eMarketer.

If they had to choose just one method of researching their purchases, 58% of respondents said they would choose the Internet—far more than would choose their own friends and family.

"Retailers that are able to facilitate consumers' multichannel shopping behaviors will enjoy growth in market share across the enterprise," said Ken Cassar, vice president at Nielsen Online, in a statement.

Consumer electronics companies will likely pay special attention to multichannel consumer behavior during the economic slowdown. More than three in 10 online buyers surveyed in April 2008 by Piper Jaffray said they planned to decrease the amount of consumer electronics they purchased.

The two leading consumer electronics Web retailers—Best Buy and Circuit City—offer an option to buy online and pick up in-store, which satisfies consumers' craving for immediate gratification and avoidance of shipping fees.

"The retailers also benefit from consumers' tendency to make additional impulse purchases once they are in the store," Mr. Grau said.

Learn about current online buyer behavior. Read eMarketer's US Retail E-Commerce: Slower But Still Steady Growth report.

Sunday, July 27, 2008

Brands Adjust to Media Fragmentation

JUNE 27, 2008

One way media synergy might pay off

Marketers have long focused on segmenting consumers, to approach them via the media channels and destinations they use most. But in many markets, media fragmentation has made reaching a large enough audience increasingly difficult.

Addressing this problem, Rishad Tobaccowala, CEO of Denuo and chief innovation officer at Publicis Groupe Media, discussed future trends and brand strategies at the recent Online Publishers Association (OPA) Europe conference.

Mr. Tobaccowala said that a shift is on from segmentation to reaggregation, thanks to the key role of search and clever use of online options by brands to appeal to a wider range of consumers. Marketers, he said, should think less about "spaces" where their audiences spend time and more about the audiences themselves. Focusing on the way one target group—college kids, for instance—moves through the media landscape can alert brands to big opportunities.

Fox Interactive Media, the fifth-most-popular media property in the US, is an example. The Fox online empire includes,, GameSpot and MySpace. Fox is already doing much to encourage appropriate crossover of content elements, ads and promotions between its own properties. So advertisers working intelligently with one or more of these properties can leverage the interconnections to reach their potential audiences in more places.

Interviews with contestants on American Idol may appear on the program's Web site, for instance, and a viewer's favorite clips can be posted on MySpace—where brands associated with the show have a second or third chance to connect with likely buyers.

For marketers, the challenge is to reach communities at multiple touchpoints, using both online and offline channels.

Carmaker BMW is doing well at this. Its global Web presence now includes a polished, award-winning site with an emphasis on video.

The site highlights many aspects of the brand, including the latest models, its design history, Formula One involvement, breakthrough technologies, contributions to major charities and support for headline music festivals. Fans and customers can register at the site, post car-related videos and rate videos posted by others.

Because BMW is an aspirational brand, its appeals to a wide spectrum of consumers—including owners, potential buyers, history buffs and design creatives. Clever sponsorship deals also bring BMW and its brand values into the lives of sports and music fans.

Similarly, Nokia's Green Room ties mobile with music fans. The concept began with a Web site offering exclusive behind-the-scenes footage of performers, an insider blog and links to the Nokia Music Store. Now Channel 4 in the UK is putting some of this material on broadcast TV. Inevitably, some Green Room content has also migrated to social networks and (surprise!) into the mobile sphere.

Tero Ojanpera, executive VP for entertainment and communities at Nokia, stressed at the OPA conference that the company is moving beyond its handset focus, to take a central role in an always-on environment. Now the iconic Finnish brand aims to be a hub for consumers' media experience, providing access to music and "everything else that matters to them."

"The proliferation of online and offline channels is not such bad news for brands as it used to be," said Karin von Abrams, senior analyst at eMarketer. "Not every brand has the market clout or technological know-how of Nokia. But most brands can take a leaf from Nokia's or BMW's book, and think of new ways to reach consumers—wherever they are."

Friday, July 25, 2008

Gas Prices Boost E-Commerce

JULY 25, 2008

Fuel-saving strategy has been a long time coming.

Depending on your perspective, online sales are up either despite or because of the economic slowdown. With gas prices continuing to climb, a growing number of shoppers are deciding to skip car trips to the mall in favor of online merchants.

Even as many brick-and-mortar stores are struggling, 11% of US consumers surveyed by Nielsen in June 2008 said they were shopping more on the Web as a result of gas prices.

"E-commerce is a bright spot," said Jeffrey Grau, senior analyst at eMarketer. "While retail store growth is in the middle-low single digits, e-commerce is still growing at least in the mid to high teens."

"With gas being such an issue, we know that mall traffic is down more than off-mall traffic," said Mike Boylson, CMO of JCPenney, in a July 2008 New York Times article. Mr. Boylson said J.C. Penney had an 8.7% increase in Internet sales in Q1 2008, compared with a 7.4% decrease in sales at stores open at least one year. The Times also reported that Gap had an 11% decline in same-store sales in Q1 2008, but a 21% increase in online sales.

The effect of gas prices on consumer behavior has been building for a while. Some 13% of adult consumers in the US surveyed in January by Vertis Communications said they were buying more online.

Over one-half of respondents to an April 2008 Piper Jaffray study selected rising gas prices as an incentive to increase online buying, while slightly less than one-half (48%) cited lower prices as a reason for making Web purchases.

Another April survey by iCongo revealed that high gasoline prices were an incentive for 33% of shoppers to purchase more online.

Fine-tune your online retail strategy for Q4. Read eMarketer's US Retail E-Commerce: Slower But Still Steady Growth report.

Back-to-school Promos Hit Harder Start Earlier Due to Economy - 5 Star Affiliate Marketing Blogs

Back-to-school Promos Hit Harder Start Earlier Due to Economy - 5 Star Affiliate Marketing Blogs: "Back-to-school Promos Hit Harder Start Earlier Due to Economy

Tuesday, July 22nd, 2008 at 11:57am by Linda Buquet

Back-to-school shopping is an important sales season for affiliates, second only to holidays and in some cases more important, depending on the affiliate’s niche. Due to the economy and gas prices, more parents will be shopping online. Since the retail market is not doing well, many retailers are pushing hard to grab their share of school shopping and they are pushing earlier than ever.

I hope if you have a family oriented site, a Mom site or even more of a mall site, you have already gotten a jump on this. If not, tune into all the back-to-school sales and coupons your merchants may be offering and try to capitalize on the early push to make some extra sales. Smart Money has a good article:

Retailers Roll Out Back to School Bargains Early This Year
“Heavy marketing and promotions geared toward teens, ‘tweens and children during the back-to-school shopping season typically pay off handsomely for retailers. But to reap those crucial profits this year, stores will have to pull out all the stops…

With so many promotions to lure you into spending, it’s important to stay focused on savings and"

Thursday, July 24, 2008

To Save Gas, Shoppers Stay Home and Click: NY TIMES

To go shopping these days, more Americans are trading in their car keys for a keyboard.

Online shopping is gaining at a time when simply filling up a gas tank to head to the mall can seem like a spending spree.

A number of retailers — including Gap, Victoria’s Secret and J. C. Penney — are experiencing double-digit sales growth at their shopping Web sites, creating a surprising bright spot during an otherwise gloomy time for sales in brick-and-mortar stores.

One popular strategy for getting shoppers’ attention is offering free shipping, in contrast to many other businesses, like airlines, that are adding surcharges and other fees to offset their higher costs.

The Web sites of Neiman Marcus, Saks, Nordstrom, Bloomingdale’s, Macy’s, Bon-Ton Stores, A√©ropostale, American Eagle Outfitters, Target and Kmart were all offering a deal on shipping this week.

“With gas being such an issue, we know that mall traffic is down more than off-mall traffic,” said Mike Boylson, chief marketing officer for J. C. Penney, which had an 8.7 percent increase in Internet sales in the first quarter of this year.

That is in contrast to a 7.4 percent decrease in sales at stores open at least a year, known as same-store sales and a measure of retail health. “We see more people turning to online because it’s much more efficient in terms of time and money,” Mr. Boylson said.

Retailers are walking a fine line in encouraging online sales. Of course, they are happy to attract more shoppers to their Web sites, but not at the expense of in-store sales — an important measure for investors.

Then again, the Web can drive in-store business, whether shoppers go into a store to return an online purchase or whether they buy an out-of-stock item through a computer at the store.

Lately Nichelle Hines, an actress in Los Angeles, has been shopping online for everything but gas itself — pet supplies, books, DVDs, water filters, kitchen appliances, a dress, her favorite health drink and materials to build a voiceover booth so she does not have to drive to a recording studio.

“It has saved us,” said Ms. Hines, who lives with her boyfriend, Charles, the builder of the booth. “And we really just started doing this three or four months ago just from sheer desperation of spending money on gallons of gas.”

When she does have to drive somewhere, Ms. Hines says she goes online first to note the location of the nearest gas station.

“I’m a computer illiterate person,” she said. “But I’m becoming much more literate as a result of gas prices.”

Victoria’s Secret, too, has had an online sales increase. Its catalog and Internet sales were up 11 percent in the first quarter of this year while same-store sales declined 8 percent, according to Maggie Taylor, vice president, senior credit officer at Moody’s Investors Service.

Gap had an 11 percent decline in same-store sales in the first quarter, but a 21 percent increase in online sales. About six weeks ago, just in time for the back-to-school shopping season, Gap reinvented its e-commerce operations, enabling consumers to shop the Web sites of all of its brands — Gap, Old Navy and Banana Republic as well as its newest, Piperlime, an online shoe store — with a single virtual shopping cart and a flat $7 shipping fee.

“Parents don’t want to drive to four different stores, two different malls,” said Kris Marubio, a spokeswoman for Gap Inc. The new Web design “helps time-pressed and gas-price sensitive parents achieve their back-to-school shopping goals in less time and at less cost,” she added.

The number of shoppers visiting Web sites that offer discounts has jumped, too. Over all, the number of visits to what are known as coupon Web sites increased 21 percent from June 2007 to this June, according to the Internet audience measurement company comScore Media Metrix., which works with more than 2,000 retailers, had an 186 percent increase in traffic from February to June of this year, according to comScore. Another such site,, which sends alerts to members when their favorite brands go on sale in their sizes at retailers including Saks, Bloomingdale’s, Nordstrom, Ralph Lauren and J. Crew, has more than doubled its membership in the last three months, according to the site’s founder, Charlie Graham.

“People are feeling less comfortable going out to the stores or driving two hours to outlet stores because of gas,” Mr. Graham said. “It almost doesn’t pay for itself.”

Online retail sales, often made all the more alluring by the lack of sales tax, have grown right from the start, but still represent a small percentage of total retail sales. And while e-commerce growth has slowed in the current economic downturn, analysts do not expect it to cease. In fact, online sales represent one of the only positives for many retailers.

“E-commerce, when you compare it to store retail is a bright spot because whereas store growth is in the middle low single digits e-commerce is still growing at least in the mid to highteens,” said Jeffrey Grau, retail e-commerce senior analyst with eMarketer.

Internet sales are expected to surpass $200 billion this year, up from $175 billion in 2007, according to Forrester Research. Given that growth, Moody’s, the credit rating agency, said last month that it would begin giving retailers’ Internet sales and strategies more weight when analyzing the companies. And retailers like J. C. Penney and Target have begun including online sales in their same-store sales figures.

“Online is starting to matter, and it is performing well,” said Ms. Taylor of Moody’s. “Now that it is big enough to matter, companies want to call it out.”

To encourage the trend, retailers are investing in online operations and experimenting with new marketing techniques. Even retailers that are scaling back in their physical stores are expanding or enhancing online operations, which are by and large the fastest growing parts of their company. The shopping Web sites themselves are becoming speedier, easier to navigate and filled with more products.

A couple of months ago, Sears Holdings began working with a company called RichRelevance, which makes technology that monitors 15 to 25 consumer behaviors — like how visitors navigate through a retailer’s Web site and how they arrived at the site — and then suggests products the consumer may like.

“We want to make sure customers are finding these products,” said Imran Jooma, vice president for e-commerce at Sears, who explained that such online initiatives are “just the beginning for us.”

Investing in online operations is less risky than investing in real world stores because Web sites do not require the same level of personnel or resources.

What is potentially risky, though, is an emerging fuel-centric marketing technique.

“Do you really want to remind people how much it costs to fill up their tank?,” said Scott Silverman, executive director of, a retail industry group.

For some retailers the answer is yes., a purveyor of items like dainty clutches and backpacks, sent more than a million members an e-mail message late last month with an illustration of gas pumps set at various migraine-inducing prices. Then there was a pump that said “eBags.” It was set at $0.

“Paying too much to get from here to there?” the accompanying text read. “Skip the mall. We’ll ship it to you for free.”

Then again, these days some consumers do not mind paying for shipping.

“A lot of shipping costs are $3 and $5,” said Jessica Delmar, 23, a manager for a technology company in San Francisco who says she rarely sees the inside of stores anymore. “That’s even less than a gallon of gas now.”

Wednesday, July 23, 2008 Serves 10B Ad Impressions Across Soc-Nets - MarketingVOX Serves 10B Ad Impressions Across Soc-Nets - MarketingVOX: " Serves 10B Ad Impressions Across Soc-Nets, the social network advertising arm of Adknowledge, purportedly now serves over 10 billion ad impressions per month across sites like Bebo, MySpace and Facebook.

Cubics enables advertisers to target their ads to a given demographic — women, 18-24 years old, from California, for example — on a social network of their choice. The company recently launched a publishers component that enables developers to advertise on their own apps."

Auto Ad Spending Down, Except Digital - eMarketer

Auto Ad Spending Down, Except Digital - eMarketer: "Auto Ad Spending Down, Except Digital
JULY 23, 2008

Double-digit Web ad growth

Automotive advertising spending in the US dropped to $1.99 billion in Q1 2008, according to TNS Media Intelligence. That was down more than 14% compared with Q1 2007.

Ad spending is 'sinking as fast as new car sales,' said Jon Swallen, senior vice president of research at TNS, in a July 2008 Detroit Free Press interview.

Need data for presentations? eMarketer subscribers"

Friday, July 18, 2008

Finding a REAListic Price Tag for Fresh Leads

crystal-ball.jpgADOTAS EXCLUSIVE — Don’t you wish someone could put a realistic price tag on finding new leads or customers via online advertising?

And while we’re preparing a wish list … Wouldn’t you like to stop shooting in the dark with banner ad campaigns that, when over, you only know approximately how many random clicks it generated? How about getting a better handle on ROI, or knowing how much revenue in certain market segments can be attributed to the campaign? Or even better yet, how would you like to be able to analyze price sensitivity in different market segments based on online information while the campaign is going on?

If you can answer the first question, I believe the rest of your wish list can come true. There’s an exciting new paradigm in the world of digital marketing: integrated results-based online advertising that is based on answering one fundamental question: how much are you willing to pay for the desired result, whatever it may be –- a new lead, customer, sale, click or registration? The definition of this “acquisition cost target,” which is derived from an overall “customer value,” is the foundation of intelligent online advertising campaigns that consistently “learn” throughout the entire conversion cycle. Integrated results-based online advertising is also flexible enough to allow the fundamental definitions themselves to change along the way, based on different customer-value data from different market segments, media types and conversion processes.

Optimize every step of the way

While the results-based information is valuable in and of itself, it really only gets us part of the way there. The trick is to be able to optimize the data and apply it intelligently based on real-time feedback that is gleaned from the conversion process itself. This kind of optimized campaign allows advertisers to measure and analyze each and every component of the conversion process on-the-fly and apply sensitivity analysis to fine-tune the matrix as they go along. This is what makes the integrated results-based approach so much more powerful than conventional online advertising models. For instance, we can alter keywords, shift ads to better-performing sites, perfect e-mail and landing page texts, and enhance banner designs as we go along – based on the measurable results received from the different advertising platforms. This is the way to effectively squeeze every possible benefit from every dollar our clients spend.

Integration: backwards and forwards

It’s important to remember that despite this robust information-gathering, results-based online advertising is only as good as the breadth of the online tools available, and how they are leveraged together. Results need to be integrated, as well as optimized, across the entire range of online advertising platforms and tools at our disposal, such as Ad networks, search engine marketing and email campaigns.
Knowledge gained in any one of these platforms must immediately be made available to current ongoing campaigns in other platforms and rapidly optimized to guarantee continuously improved results.

Integrating all your marketing assets

The next step is full integration with existing CRM system, turning the campaign into a sophisticated marketing tool that allows you to target market segments, such as discounts to first-time buyers –opening a plethora of cross-sell opportunities. Having this range of tools at your disposal gives you total control of the sales cycle -– from the very first impression all the way to the desired conversion. Control that is always focused on positive ROI.

With this dynamic monitoring, analysis and optimization, advertisers and publishers gain new insight into all their online advertising activities. Knowledge gained from any one platform is immediately made available to ongoing campaigns on the other platforms and rapidly optimized to guarantee continuously improved results.

So when you choose enter the world of online marketing, or want to test new methods in existing online campaign, think beyond siloed banner ads, SEM and e-mail campaigns. Put them all together in an integrated, result-based approach. The sum is far greater than the parts. And you will see measurable results that translate into bottom-line benefits.

So in the end, you know exactly how much it costs to sell the doggie in the window … for exactly what it’s worth. That’s simply better business.

Tuesday, July 15, 2008

Advertising in Europe Softens, and More Goes to the Internet -

Advertising in Europe Softens, and More Goes to the Internet - "Advertising in Europe Softens, and More Goes to the Internet

PARIS — Not long ago, European advertising executives seemed confident that they could ride out the storm in the United States economy and the global rise in food and energy costs.

Now, they and the media owners who rely on their business are worried that European marketers will slash ad budgets, as many of their counterparts have already done in America.

“Definitely, if our clients suffer from higher petrol costs, spending is going to be affected,” said Val√©rie Accary, president of CLM/BBDO, an agency based in Paris owned by the Omnicom Group. “So far we haven’t seen it, but the second half is a big concern.”

ZenithOptimedia, a media buying agency that is part of Publicis Groupe, recently downgraded its forecast for ad spending in Western Europe, saying it would grow by 3.7 percent this year — barely more than the inflation rate. That is still better than the 3.5 percent growth expected in North America, but a reduction of two-tenths of a percentage point from the previous forecast, issued only three months earlier.

That may not seem like a large revision. But the new numbers mask bigger shifts in spending, as advertisers allocate more of their budgets to the Internet, cutting their allocations to broadcast and print advertising.

“If you’re in some of the traditional media in Western Europe, you’re not going to see much growth over the next year or so,” said Jonathan Barnard, head of publications at ZenithOptimedia in London.

Among the big European markets, analysts say Britain and Spain may be most at risk, as their economies slow sharply in response to housing slumps. France and Italy are also showing softness, while Germany is holding up after a wobble early this year.

For some individual media owners, feeling the combined effects of the shift to the Internet and the economic downturn, an ad recession has already arrived. Trinity Mirror, a British newspaper publisher, said last month that advertising had fallen 12.6 percent in May and June.

Analysts at Citigroup issued a warning last week about advertising prospects for several big European television broadcasters, including ITV in Britain and ProSiebenSat.1 in Germany.

While some analysts had speculated that marketers would reduce spending on the Internet in a downturn, deeming it experimental and nonessential, the opposite seems to be happening. In Britain, for instance, Internet ad spending will rise 32 percent this year, according to ZenithOptimedia, a sharp revision from the agency’s previous prediction of a 26 percent gain.

Internet advertising is benefiting because it allows marketers to track the effects of their spending, something that is more difficult to do in other media. Agencies that create advertising, like CLM/BBDO, are feeling the effect.

“Clients are saying, ‘We don’t want big ideas, big projects,’ ” Ms. Accary said. “It’s about messages that are effective and right to the point.”

Friday, July 11, 2008

Online TV, Automakers and Buyers

JULY 11, 2008

Will Detroit meet the buyers of its dreams on the Web?

Rising fuel prices have made 2008 a tough year so far for automakers in the US. As they examine every possible method to reach potential buyers, online television may benefit, according to J.D. Power and Associates' "2008 Power Auto Online Media Study."

Nearly seven out of 10 new-vehicle buyers surveyed said they went online to find information on TV shows. was their top destination, followed by MSNBC and ESPN.

Arianne Walker, director of marketing at J.D. Power, told eMarketer that although survey participants were not asked about specific activity at those sites, they were asked if they watched TV content online—so it was logical to assume that some of them were watching shows and clips at the top sites, rather than just looking for information about programs and actors.

"As new-vehicle sales shrink, understanding which advertising mediums will provide the best balance of audience reach and composition is absolutely critical," Ms. Walker noted. "As more new-vehicle buyers seek information regarding television shows on the Web, advertisers can benefit from increasing their focus on this medium."

J.D. Power said that buyers of premium-brand vehicles were more likely to look online for TV content than average new-vehicle buyers.

More than three-quarters of buyers of midsize premium utility vehicles, compact premium crossover utility vehicles (CUVs) and midsize premium CUVs said they watched online TV.

For premium new-vehicle buyers, the online video connection makes sense, since Internet users tend to have higher incomes than non-Internet users. For automakers, a focus on online video viewers is practical because the group's population is growing. In the US alone, 190 million people are predicted to watch online video in 2012.

Moreover, an increased online presence by automakers is almost inevitable. Despite the auto sales slump in the US, the industry is not about to let up on online ad spending. Automakers are predicted to spend $5.61 billion on online ads in 2012, up from $2.98 billion this year.

Wednesday, July 9, 2008

Interpublic: Social Is Fastest Growing Emerging Medium; Search Is Slowing

by Joe Mandese, Tuesday, Jul 8, 2008 12:12 PM ET
Warning that the "hyper acceleration" of some of the fastest growing emerging media platforms - including search, social media, online video, gaming, interactive TV, and digital out-of-home - appear to be slowing, Interpublic's Magna Global unit this morning released an outlook that nonetheless called for a 31.1% rate of growth for emerging media in 2009. While a relative slowdown for the new forms of ad-supported media, it is markedly better than the tepid 4.0% rate of growth another Interpublic unit, Universal McCann, predicts for traditional ad-supported media during 2009.

The twin forecasts, which were delivered by Magna's Brian Wieser and Universal McCann's Bob Coen, respectively, were part of Interpublic's so-called "mid-year update" for the advertising industry's economic outlook.

In taking his first stab at an outlook for next year, Coen said, "I don't think 2009 is going to be a great year," but added, "It can't get much worse." By much worse, Coen was referring to his revised outlook for U.S. ad spending growth in 2008 and his final estimate for 2007, which he now pegs at +2.0% and -0.7%, respectively.

Those estimates are downgrades from slightly more robust projections issued by Coen in December, and the Universal McCann Director of Forecasting attributed the cutbacks to reduced economic expectations.

Among the major media, Coen projected Internet display advertising would grow the fastest this year, rising 12.0% over 2007, about three times the rate of all national ad-supported media combined.

The Internet's growth, however, will not be coming from its endemic marketers - so-called "dot-com" advertisers - which will actually reduce their total advertising spending this year by 7.1% from 2007, marking the second consecutive year the category has scaled back.

While growing of a much smaller base, Magna's Wieser said emerging media nonetheless appear to be slowing down, especially online search, which he projects will grow only 24.0% next year. While still healthy by traditional media ad growth standards, Wieser said it represents a slowdown from 26.5% growth in 2007 and 29.5% in 2006.

The fastest growing of the emerging media platforms tracked by Magna, he said, is social media, which includes both social networks and applications like ad-supported widgets. Wieser estimated that social media ad spending would rise 37.4% in 2009, thought that is nearly half the 60.8% rate it is expected to grow in 2008.

Copies of both Wieser's and Coen's complete reports can be found here.

Online Reviews Sway Shoppers

JULY 9, 2008

Consumers look for peer opinions.

Consumer reviews play a big part in purchase decisions for online shoppers in the US, according to a June 2008 Opinion Research Corporation study.

A full 61% of respondents said they had checked online reviews, blogs and other online customer feedback before buying a new product or service. Search engines were the preferred way to research purchases. Of those who looked for reviews and other feedback, more than eight out of 10 said such evaluations had at least some influence on their purchases.

"Businesses today exist in an era in which it's nearly impossible to escape the likelihood of being evaluated." said Linda Shea, senior vice president at Opinion Research, in a statement, "There's nowhere to hide."

The company also found that 38% of respondents first checked online product or service reviews when starting shopping research.

Online shoppers value product reviews from other consumers (29.6%) even more highly than professional reviews (21.3%), according to an InQuira-commissioned survey conducted in 2008 by Service Excellence Research Group.

It is not just new online shoppers who look for the opinions of other consumers, according to a February 2008 study commissioned by PowerReviews and conducted by the e-tailing group. Nearly one-half of US consumers surveyed who shopped online four or more times per year and spent at least $500 said they needed four to seven customer reviews before making a purchase decision.

Get the online buying outlook for the rest of the year. Read eMarketer's US Retail E-Commerce: Slower But Still Steady Growth report.

Thursday, July 3, 2008

Worldwide Online Ad Spending

JULY 3, 2008

Reaching for a bigger slice of the total ad pie

Several recent worldwide online ad spending projections indicate that the medium still has a lot of room for growth.

Worldwide online ad spending will reach $65.2 billion in 2008, according to IDC's "Digital Marketplace Model and Forecast." The research company predicted 15% to 20% annual growth through 2011, when spending would hit $106.6 billion.

IDC said that online ads would account for nearly 10% of all ad spending across all media in 2008, rising to 13.6% by 2011. Nearly one-fifth of Western European ad spending will be online by that time.

"The long-term opportunity for Internet advertising can be seen in the disparity between per-capita spending," said John Gantz, chief research officer at IDC, in a statement. "Total advertising revenues equate to more than $105 per inhabitant of the planet, while Internet advertising revenues are less than $50 per active Internet user."

In May, Credit Suisse lowered its worldwide online ad spending estimates and forecast only modest growth in total ad spending for the next two years. The investment bank said the US and most other developed nations would actually drag growth down, thanks to phenomenal growth in developing nations.

Credit Suisse's estimates of online ad spending as a percentage of total ad spending were very close to IDC's: 10% last year and 12% this year.

Yet another estimate, this one produced in May by Bernstein Research put online ad spending at 9.4% of total ad spending for 2008, rising to 13.1% in 2012.

The climbing ratio of online ad spending to total ad spending will help drive up the dollar amount advertisers spend on the Web.

eMarketer senior analyst David Hallerman has noted a number of reasons to expect continued growth in online ad spending in the US, which also apply to the medium worldwide. Among them:

  • Online ads are more measurable than other media, making them increasingly appealing to advertisers.
  • The Internet audience is huge, so the simple process of advertising following eyeballs will lift spending.
  • Internet ad prices are rising, thanks to targeting and other techniques, which can push up overall spending.

"US Internet ad spending is not impervious to the current economic weakness. However, those economic effects are more the case for display advertising than for paid search advertising," said Mr. Hallerman. "Even so, the trend toward display ads, including video and rich media, continues to attract brand marketers as they shift spending from traditional media to the Internet."

Wednesday, July 2, 2008

The Emergence of PepperJam Network

It was no surprise when MarketingSherpa released their latest reporting, basically stating “PepperJam Network Explodes onto the Affiliate Marketing Scene with Unprecedented Growth and Industry Support“. In the report from MarketingSherpa, they break down some heavy numbers on the largest affiliate networks in the game today, and it’s no surprise to see PepperJam Network giving the big players a run for their money. Here are just a few of the big numbers we are seeing from PepperJam Network after just 5 months from their network launch date. (Results from Partnercentric surveyed top partners)

Networks with Active Affiliates
In the first chart, we clearly see all of the big players in the game which have had networks for years, and it’s really no surprise to see these names listed. However, in the fifth position, PepperJam Network is quickly gathering market share and soon enough, may even pass some of these well known affiliate networks.

Where Affiliates Make Money
The next chart shows which of the top networks affiliates are also working with. All of the same affiliate networks listed in the first chart appear again, but not in the same order. Shareasale affiliate activity crushes Linkshare, even though they have a larger following… and the same can almost be seen with Performics and PepperJam. Performics has a higher following in the top chart, but nearly tied with PepperJam Network in affiliate activity.

Why Affiliates Choose Some Networks Over Others
We are all members of different affiliates networks, but the majority of us only make money with a couple of the many we are affiliates with… why is that? As part of the survey, affiliates were asked the same question and their response was the following:

For more details and the full report, be sure to head over to MarketingSherpa. I’m sure in the followup report, we will see even more promising numbers from PepperJam Network.

What’s New at PepperJam Network?
Based off the report from MarketingSherpa, PepperJam Network is showing some very promising numbers. In addition to their growth in the affiliate space, I also wanted to keep you updated with some news surrounding their network.

- Make Money with eBay: If you ever made money with the eBay affiliate program, you were probably making it through Commission Junction. On April 1st, the eBay Partner Network launched as they removed themselves from Commission Junction. Just recently, eBay and PepperJam Network teamed up to offer affiliates another alternative for advertising their network. Now you can run eBay directly through PepperJam Network. (For all affiliates running Build a Niche Software, the ability to run and track through PepperJam is now available)

- Tons of New Offers: Since going live, PepperJam Network has added an amazing amount of new advertisers to the network. Now with over 250 offers, they are quickly becoming the prominent network to make serious money with. Keep in mind, the 250 offers I mentioned are each their own web site and brand name!

- $10 Signup Bonus to New Affiliates: With the explosion of growth PepperJam Network is seeing, they are only pushing harder to make this growth continue. If you aren’t currently an affiliate with PepperJam Network, join now and you will receive $10 in your account once you are approved as an affiliate. It doesn’t get much easier than that!

If you haven’t already, I highly recommend you join the PepperJam Network. If you’re already an affiliate, be sure to login and see what offers were recently added to the network.

As an affiliate, what makes you choose certain networks over each other and what would make PepperJam Network or any of the other networks mentioned, be your network of choice?

Tuesday, July 1, 2008

Online ad spending should grow 20 percent in 2008

The economy may be lousy, but the amount of money spent on online advertising should continue to grow at double-digit rates all the way through to 2013, according to a report released Monday by JupiterResearch.

Total online ad spending is expected to increase just a little less than 20 percent this year, from $19.9 billion in 2007 to $23.8 billion. By 2013, Jupiter expects total online ad spending to hit $43.4 billion. (For you stat aficionados, that's a compound annual growth rate of 13 percent. By comparison, offline advertising is only expected to have a CAGR of 4 percent over the same period.)

The online world's share of advertising is also expected to increase, but there's still plenty of room to grow. Last year, Jupiter says online ads accounted for 8.4 percent of total ad spending in the U.S. That's expected to grow to 9.6 percent this year, 10.7 percent next year, and 14.3 percent in 2013.

Not surprisingly, search advertising should continue to be the largest category, growing from $9.1 billion in 2007 to $20.9 billion in 2013. But there's an interesting caveat to Jupiter's research: The growth rate for search advertising should slow toward the end of their forecast because of an "inability to tap into small local US advertisers and a steady maturation of the U.S. paid search market."

Display advertising and classified advertising aren't expected to fare quite as well. Because of short-term economic problems, display advertising growth should drop slightly, but rebound for 14 percent annual growth over the full period of the report.

Likewise, classified ad spending is forecast to be 20 percent of the total online ad market, while growing at annual 9 percent rate.

But look out for video advertising. Jupiter predicts that static and text ads will account for 63 percent of banner advertising in 2008, but that share is expected to drop to 41 percent by 2013 as advertisers look to rich media and video. Video advertising, in fact, is expected to quadruple to $5.1 billion in 2013.

Google Launches Affiliate Advertising Network, Courtesy of DoubleClick

Erick Schonfeld


Amazon, watch out. Earlier today, Google launched an affiliate ad network. Or, rather, it rebranded Performics, the affiliate ad network that came along with its purchase of DoubleClick, as the “Google Affiliate Network.” As with other affiliate networks such as Amazon’s, participating Website publishers get paid a fee for each referral that results in a sale. Existing advertisers include Bank of America, Barnes & Noble, Citi, Target, and Verizon.

The service isn’t yet integrated into Google AdSense (publishers and advertisers still have to set up separate accounts), but that would be a logical next step. An integration with AdSense could add a contextual element to the affiliate ads placed through the network. The more relevant Google can make those affiliate links, the more that consumers will actually click through and buy (in theory).

Google also continues to experiment with a pay-per-action advertising program, which is still in beta. At some point, it might make sense to consolidate that effort into the Google Affiliate Network as well.

Update: Google will actually be phasing out the PPA program at the end of August as part of the integration with DoubleClick. You can read more details at the blog post here.

Google: We are retiring the pay-per-action beta

We are retiring the pay-per-action beta

As part of Google's integration of DoubleClick, the DoubleClick Performics Affiliate network is now part of Google. To consolidate our offerings, we will be phasing out the AdWords pay-per-action beta in the last week of August 2008. As an alternative to pay-per-action advertising, Google offers two products that allow you to manage your advertising on a CPA (cost-per-acquisition) basis: the Conversion Optimizer and the Google Affiliate Network.

The Conversion Optimizer is an AdWords bidding feature that lets you specify a maximum CPA goal for ads on the Google search and content networks. It uses historical information about your campaign to automatically adjust your CPC bid for each auction to help you meet your CPA goal. In addition, the Conversion Optimizer is now supported in both the AdWords Editor and the AdWords API. You can learn more on the Conversion Optimizer homepage.

The Google Affiliate Network, previously known as DoubleClick Performics Affiliate, has been in operation since 1998. Through the network, advertisers can open their ads to all publishers in the network, or select specific publishers that match their criteria. You can set a CPA for your entire campaign or establish custom payment schedules for specific publishers -- such as a higher CPA for a particularly optimal placement. The Google Affiliate Network is currently a separate product from AdWords and AdSense. As with AdSense, publishers must apply and be accepted into the network.

If you're interested in learning more about the Google Affiliate Network, please visit our website.