Learning from Google & Further Monetizing Your eCommerce Site

Giving Advertisers What They Need?

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John Federman of Searchandise CommerceThe number of businesses selling online is quite large, and its only growing. Advertisers need spots where they can shine.  I spoke with John Federman, President and CEO of Searchandise Commerce about some things that can not only give those spots to advertisers, but earn eCommerce sites some extra money.

Consumers Are Going Online

First we talked about how the current economic situation is driving more consumers online as opposed to in-store. Federman cited an AdAge piece stating that Web sales were growing at five times the rate of brick and mortar stores, a trend that the economy will no doubt fuel further. "The Web represents an unprecedented choice for today’s consumer  – a broader spectrum of product options, features and prices to compare than physical stores offer," says Federman. "The sheer time savings, and the saved transportation cost make the Web an increasingly preferred venue in which consumers are shopping."

"From the retailer side, the economy is clearly causing brick and mortar chains to evaluate the profitability of every store, and close those that are under-performing," he continues. "It’s hit everyone from Best Buy whose Web growth outpaced in-store sales to Starbucks.  For the consumer, fewer stores is another driver to the Web."

The Scramble for Advertising Opportunities

The next subject Federman talked about was how Google’s dominance has left marketers scrambling to find new opportunities to advertise.

"Google has done an excellent job helping the 80+% of buyers who start the purchase online (Pew Internet & American Life Project, 2008) identify which retailers are selling which product and driving traffic to the retailer’s Web sites," Federman explains. "For marketers, implicit in the Google model is the skyrocketing costs for keywords – it’s more challenging than ever for them to make any sort of brand impact."

But What About the Flood of Content?

Add to that the ever-increasing amount of content being uploaded to the web (with user generated content playing a big role) is having a negative effect on online advertising, perhaps even more so than the economy.

"Consumers are hungry for information," Federman notes. "In fact, 64% of them use multiple sources for information, and visit 2.5 sites in the purchase process (JupiterResearch). What will emerge from the plethora of content is a sort of user loyalty that will result in consumers using more information from fewer, but more trusted sources.  That loyalty may be driven by the site that provides the most accurate recommendations, superior customer service or the best promotions based on their personal hot buttons."

Learing from Google

"What we know from Google is that marketers find paid search to be effective – it’s a pay for performance model and highly measurable ROIs are more easily justified than CPM based offerings and mass media," adds Federman. "But Google only gets you so far, what do you do with your brand once you’ve arrived at the online storefront?"

He then referenced JupiterResearch again indicating that for the first time, the retail sites have become the source for online research, overtaking search engines.

"Taking the learnings from Google, and applying them to site-side search is a huge opportunity for marketers," he says, citing an example from his own Searchandise Commerce. "Marketers place cost-per-click bids by brand, SKU or category to elevate their placement in on-site search results.  Knowing that 80% of buyers start their search online, and that over 70% of clicks occur in the top 10 search results, attaining premium placement is an innovative way to engage prospects at the point of purchase while displacing competitive offerings.  The service addresses that last mile of search that Google does not address."

Federman has some interesting ideas about building trust and loyalty. Searchandise’s site drives the point home itself, "Retailers are looking for innovative ways to merchandise, monetize and maximize virtual shelf space, the same way end-caps and other displays are used in-store. It’s all about engaging the prospect at point of purchase."

Learning from Google & Further Monetizing Your eCommerce Site
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  • http://www.redbirdonline.com Redbird Advertising Agency

    The user generated ‘flood of content’ is mostly coming from companies anyways

  • http://www.condofurniture.com/ehf/index.php Ross Endicott

    not a great idea when you cannot control which ads are displayed. why would I want links to my competition in the borders of my web site? Perhaps related industries, but not my niche. Real estate agents, staging companies, appraisers, house cleaners, local trades and appliance stores, maybe, but not other furniture stores. I looked once or twice to see where some furniture stores were located, and when I clicked on a link, Google zapped me for click fraud. What a joke! Good riddance. so much for not being evil…

  • http://www.earringsforever.com EarRings

    Easier said than done, it kind of hard to build trust and loyalty when you are still starting. Nonetheless, the article is a good read.

  • http://hughzebeezlaughs.blogspot.com Hughze

    Everyone tells us what we need to do but no one tells us how. Guess we need to learn that ourselves.

  • http://www.socialpolitan.org Socialpolitan

    a very informative article, thanks.

  • http://www.electronics-bargain-store.com Tony Lee

    I must agree that since so many large stores are closing, consumers are shopping online more frequently.

    In my area of the country, many big name stores in the past months have closed or went out of business. One big indicator of our declining economy besides the housing market, has been the car dealerships.

    It’s been said just lately, that our nations economic situation will start to improve later this year. I can only hope that online shopping will continue to grow, as long as WE can keep our customer confidence!

    As far as understanding Google goes, if that would be possible, it would be just like hitting the lottery!

  • http://budurl.com/vvbp Rahul

    @Redbird ad agency: agreed on your point.

  • http://www.snerdey.com Snerdey

    Great article but there are some things to think about when considering the placement and use of the ads.

    1. If your website is not selling as much as it used too. Placing an advertisement on it is not going to increase sales whatsoever. Maybe a few click bucks depending on traffic. Is that the goal you want to set?

    2. If your actually trying to sell more products you would want to use the ads to promote your site, not be on your site.

    3. Ad income is great for those in the business and deal with it everyday but for the corporate, small biz it’s another task that will have to be monitored.

    4. Most of the ads are going to be relative to your site / product and try and sell their products against yours. Does not seam logical for a ecommerce site to place ad’s on it.

    I’ve helped many companies increase sales but it was not by placing ad’s on their websites.

    Follow Snerdey on Twitter!

  • http://NewSunSEO.com NewSunSEO

    eCommerce is growing more and more everyday. Not paying attention to the current trends and adapting will leave your business in the dark. Internet marketing is the way to go going forward!

  • http://www.cataractsindogs.net steve

    Copying google is a really smart approach . Imitation with a little innovation can do wonders for a website on the internet!You are rite about the importance of getting listed in the top 10 of a search result , If its not for the top ten , you would never get noticed !

  • http://www.svatos.com/ svatopia

    It makes sense for consumers to go online to save money since people are losing jobs and cutting back spending. Who wants to pay a hundred bucks for a toner cartridge in a big box store when you can get the same online for half? Seems like vendors who can offer savings online (and get people to notice them) have a real opportunity versus brick and mortars with their bulky overhead.

  • http://www.parpoolsblog.com Ron

    After many years of brick & mortar, click & mortar or brick & click is the way we are preferring to do business these days. Doing business in many markets, but also continuing the “face to face” local business that keeps you cognizant of what people need or want or problems solved. I agree that having competitors’ ads in my commerce site is NOT what I want; BUT I don’t mind it in my blog or my separate “non-commerce” or info only sites. It just makes sense – as long as you set the ad settings to open in a new tab or window.

    As far as price shopping goes, most customers are still looking for value AND perceived value. We keep casting our “freebies” (information) on the waters & have a “higher” yet still competitive price. Do I necessarily want a “big box” shopper? Yes – IF they are looking for expertise. If they’re shopping for price only? NO. My business, my staff & I have value.

  • http://www.cypresspublishingsaratoga.com

    Thanks for another informative article. I agree that we should not be promoting our competitors on our websites. However, our site sells books, and we find it profitable to have links to Amazon. This provides our visitors with a choice as to where to buy our books.

  • http://www.babypushchairsonline.co.uk Baby Pushchairs

    The beauty of paid ads is that you could begin an online business almost instantaneously and start getting customers in the door. However, keyword bids are sky rocketing and without proper monitoring, it could easily cost you an arm or a leg. On the contrary, many successful brand names are using paid search not solely for the purpose of monetizing but strictly to boost brand.

    • Guest

      click fraud is also an issue. I recently posted about his @ http://mcvictor.com/tag/ppc/

  • http://www.eztrip.com/ Hotels

    Many consumers while searching for information hit niche websites, so as long as you are offering niche information that is unique then you are brandable and can sell any product.

  • http://www.babypushchairsshop.co.uk/ Paula

    One thing that is not talked about is localized markets. With as competitive as it is in the U.S., there are still great opportunities in smaller markets. These could be local (city or state), or maybe international (country). Of course, this raises other issues such as translation, but it still may be worth the upfront cost for translation for the ongoing income from your online store.

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