NetElixir Blog

Interactive Marketing Imperative

I attended the webinar by Shar von Boskirk of Forrester Group, Interactive Marketing Imperative, today. It was attended by more than 50 professionals.

Through the presentation, Shar shared information on how Social Media and Search Marketing continue to attract marketers, why interactive advertising would not be impacted by a global recession, why a focus on branding is going to be important, how a combination of display and search advertising deliver disproportionate performance improvements and shared Forrester's projections of Online advertising revenues growing to $61 Billion by 2012(in US) - a whopping 18% of total advertising revenues.

There were obvious questions and concerns raised by some attendees over the slow economy and how it would effect online ad spends.

I firmly believe that the global slowdown would actually lead to a growth in online advertising. More money would flow into search advertising as its a proven model. More importantly, search advertising has greater value for marketers because it "drives customer acquisitions". Social media still is in a nascent stage where it is seriously flirting with potential business models. I don't think the right model has been cracked yet.

Not much of new channels/innovations would  happen. There would be a cut/decline in display advertising as the focus on measurability and performance increase.

A bold forecast: The existing world order in online advertising may change significantly in the next 12 months.

- Udayan Bose

Online Holiday Forecasts from eMarketer

Here is what eMarketer estimates would be the November and December Online Sales for Retailers. Its understandably a conservative estimate.

My honest opinion - Retailers should be happy if they are able to realize the mentioned sales numbers. I would put the growth % in single digit - between $30.5 and $31 B? 

EMarketer Report:

The weak economy is placing downward pressure on e-commerce sales this season. That pressure accentuates the already declining sales growth, which is a sign of the inevitable maturation of the online shopping channel.

NetElixir launches the first edition of SEM Case Series for E-Retailers

Through this 10 edition case series, we hope to share some of our PPC management tactics that we used over the past 4 years to optimize more than 200 unique retailer campaigns.

The first edition of the series was released  this month.
Here is the link: http://www.netelixir.com/PPCWP1.html?ne_ppc_id=31

I would love to hear your feedback and suggestions that may help us in making the cases more relevant and useful for you.

The next edition gets released on 15th January 2009.

Thanks,

Udayan Bose

Difficult to Believe?

This post has reference to the NAILED IT section of DMNEws dated 25th August 2008. Its an interview with Paul Siska, CEO of First Consumer Debt Management. He raves about the results delivered by a search firm EveryMundo.

Here are the results Paul claims EveryMundo delivered for their PPC Campaigns-
Average Cost Per Lead Acquisition went from $284.16 to $24.99, a reduction of 11.37x.
Their Conversion rate went up from 1.32% to 2.97%., an increase of 2.25x.

Now cost per conversion can go down because of ONLY two reasons - CPC going down or conversion rate going up. That's it. Period.

If the conversion rate went up by 2.25x, CPC would have definitely have gone down by - 11.37/2.25=5.05x

Its difficult to believe a 5x drop in CPC within 1 year (lets for a moment consider that CPC remained the same -- zero CPC inflation).

This can happen only (and yes I emphasize, ONLY) if the account was NOT BEING MANAGED AT ALL (someone purposefully bidding on all the wrong keywords) OR competitors abandoning PPC advertising.

One problem that plagues SEM space is random performance numbers that the agencies literally pull out of their hats. In most cases the numbers they claim are so impossible to believe - it makes you wonder how someone who clearly is not "the best mathematics brain around" can do any justice to a difficult art like PPC optimization. What is worse is the fact that marketers often fall for this "Sales BS" and hand over their precious PPC accounts to the agency. Net Result - the entire SEM agency community gets a bad name.

One reason (out of many) why SEM is still a cottage industry is definitely this.

- Udayan Bose

Just a little bit of attention

Understandably PPC management is challenging. Its difficult to keep a tab on all the ad copies on a real time basis. However, agencies are supposed to be responsive and responsible enough to do this efficiently.

It pained me to see this ad still running on 14th August at 5.20pm EST. This just gives a bad name to the SEM industry.

Overstock Sale Alert

www.LumberLiquidators.com      Quality Hasn't Been Cut; Just The Prices! Buy Now - Sale Ends 8/10

Successful Partnership - NetElixir and MyWebGrocer

MyWebGrocer drives Pay Per Click Success with Partner NetElixir

July 31 2008, Colchester VT: MyWebGrocer has increased the number of new customer orders an average of 16% through its partnership with NetElixir for its participating retail grocers. NetElixir is the Pay Per Click partner that powers MyWebGrocer’s unique retail grocery acquisition program where retailers only pay for new customers that place a new order. This CPA based program takes the complexity and risk out of traditional customer acquisition programs for retail grocers.

“Our team has been working closely with NetElixir over the last year and right out of the gate they improved our internal efforts by 60%. This with their ability to build a dedicated team to support our Grocery CPA program 24-7-365 has given MyWebGrocer a significant advantage to our retailers who are competing against Wal-Mart, Target, and Amazon’s massive PPC efforts.” Explained Alec Newcomb, Vice President of Business Development at MyWebGrocer.

“Our partnership drives significant efficiency in the search advertising management program for online retailers” explains Udayan Bose Founder & CEO of NetElixir. “The domain expertise of MyWebGrocer and search advertising optimization capabilities and technology of NetElixir would combine to generate disproportionate return on advertising dollars for our customers.”

About MyWebGrocer: MyWebGrocer was one of the first to launch online services for retail grocers in 1999. MyWebGrocer increases basket size, acquires new customers, retains current customers, and drives revenue in-store and online business for their clients. MyWebGrocer has the largest grocery advertising network in the country covering 85% of the US, earning their clients direct ad revenue. Some of their clients include Shoprite, Lowes Food Stores, Big Y, Food Lion and 80 other leading grocery chains. For more information please visit www.mywebgrocer.com or call 1-888-662-2284.

About NetElixir: NetElixir, Inc (www.NetElixir.com) is one-stop-shop for all search advertising management needs. NetElixir offers both technology and full-service 24×7x365 management of pay-per-click search marketing campaigns that help online retail marketers generate profitable and predictable returns from their search marketing dollars. NetElixir has helped more than 50 online retailers including NetGrocer, Vermont Teddy Bear, KSwiss, Luggage Online & Carpet One run consistently profitable SEM campaigns, through a combination of proprietary technology and sophisticated processes. For information regarding NetElixir’s search engine marketing solutions please contact Udayan Bose at udayan@netelixir.com or call at 609-356-5112.

Beating Google

Read John Battelle's comments on how to beat Google http://www.imediaconnection.com/content/20051.asp

I couldn't agree more. Its nearly impossible to beat Google at its game. Someone has to create a new arena.

Its difficult to envision what this new turf would be. Web 2.0 Companies across the world are struggling with the same challenge. New search engines like Cuill (launched recently with "a glamorous claim" - more than 12 billion web pages indexed) keeping grabbing momentary attention. However, as long as I get what I need from Google search why should I bother about 12 billion web pages. The incremental urge that I have for accessing a larger base is not enough to justify my switching loyalty.

The only definite part is that the new "thing" has to become a part of life of the internet masses (NOT JUST select few early adopters). Google succeeded because given the complexity of the internet - search became a basic necessity to efficiently navigate through the web.

There has been a lot of noise about social media and though I am a firm believer of the power of groups, I fail to see how social media - whether it is blogs or wikis (probably with the exception of work) and social networks become basic necessities for MASSES.

I would think organizing the data collected from the web has a greater potential to appeal to the masses. If you think of it organizing seems like a natural extension of the search and gather process.

 

- Udayan Bose

4 years - nothing much has changed in SEM space

I visited the SES Show after about 4 years, yesterday - in NYC. I was excited to be attending SES because this was the first show we attended after founding NetElixir - SES, San Jose 2004.
So much has changed in the search world. The power equation has changed considerably between Google and others. Disappointingly, not much has changed on the SEM space. The usual suspects, iCrossing, iProspect, Did-It, Efficient Frontier, were all there. There were new agencies and SEM tools. All agencies started their pitch by stating that their proprietary technology was awesome because... Back in 2004, they started the same way... Its disappointing.

But seriously, SEM companies are struggling to establish a differentiator. Everyone does the same stuff - only the presentation is different.

So, is there no differentiator in SEM space?

Yet, advertisers are stressed - they complain about their agency or their SEM technology.  They would do so only when there is a need gap.

What is the need gap? Here are some standard replies on "stress points" that we collected when we conducted the 2nd Annual PPC stress study - a) meeting ROI target consistently  b) managing change (in account/in promotions being run, etc) c) increasing CPC d)Search engine function in an opaque manner e)ad copy quality  f) click fraud

Common sense would dictate that any SEM agency that addresses the above mentioned need gaps effectively should  crack the success formula. Why is it then that no one has been able to do this?

I would think the inherent dynamism of search advertising can be blamed for this. Like any other medium(example television), search serves ads that are consumed by  prospects and non-prospects. There is a difference, however, between search and (say)TV. In television you have set channels that telecast specified programs at specified times. The user's choice is limited - she can jump from channel to channel but she cannot spontaneously see what she wants to if no channel is telecasting the program of her choice. (The video sharing sites like YouTube tackle this better). In search advertising - the user chooses what she wants to see. The good part is that its mostly measurable - at least - you could get statistical data for user groups.  However, the advertiser has to  know what the user wants to see (predict) and moreover, categorize the user intent into monetizable and non-monetizable parts. The challenge is user sophistication while searching keeps evolving / improving. (Think of it like this - you are almost trying to peek into the minds of millions/billions of users - anticipate their usage sequence and be visible  in appropriate places). Understandably, this makes things very complex. To amplify the complexity, Google and other engines keep on tweaking the channel in their constant effort at dis-intermediation (and to keep their stock prices high)-thereby complicating things for advertisers and SEM agencies(and actually for themselves). Its also frustrating to see how Google tries to make money by purposefully creating complexity.

For an SEM agency to stay on top of all this and effectively address client needs (ROI, increasing CPC, etc) becomes an in-surmountable challenge. To make matters more complex, since search advertising LOOKS SIMPLE (whats so great about selecting a few thousand keywords and placing ads on them), every person thinks he knows the best. This is equivalent to a situation that you want to run TV ads and after you approve the ad and it is aired, you want to tweak around the ad a bit because you feel the product shot does not look as good as you wanted it to look. Since the advertiser has access to the search ad center (or mostly they do have - some agencies do not let their clients access their own account!!), they are not restricted from constantly making changes themselves.

The challenge becomes even greater because of the tremendous demand supply gap in trained SEM professionals and lack of standards and best practices. Most of the SEM professionals have learnt either by managing accounts themselves or by reading stuff and attending seminars. Everyone thinks they know the best because the account that they managed 3 months back really saw a jump in ROI. They think they have got the secret sauce to replicate the success. This is a big mistake. Each campaign is unique - every site is unique - every business is unique. Just because an SEM agency was able to deliver great results for a flower shop does not mean they will be able to do so for a pet food supplies shop.

So, is there no way out of this catch 22 situation.Can the SEM agencies do anything?

Well partially there is. Here is how.(And the pre-condition here is that the advertiser client does not make changes herself randomly)
1. Every account has to be approached with a fresh mind - ample efforts have to be made to understand the business/the goals/the plans
2. There should be a set service delivery framework. The engagement manager's role should be to combine the business' uniqueness with the framework. This requires dedicated focus. This requires time.
3. Business objectives should be fed into the technology. Just because the technology has the capability to optimize performance based on ROI does not mean anything for someone who wants optimization based on value per click or number of sales or (maybe) a complex factor that's dependent on multiple independent variables. In short, technology has to be customizable. Thats a whole new paradigm and we will discuss that in greater detail in a later post
4. Its almost like saying that the SEM agency's dedicated team will become a part of the advertiser's team - quite literally. They have to be super employees though - who have to not only execute efficiently but also advise and consult - spot trends and maximize opportunities arising out of the trends.And they have to do it "non-stop".

Will the above steps solve all the stress points that an advertiser has to face. The answer is NO. But, the agency that does all the above 4 points effectively, will have an enormous edge over all other agencies who are taking a set approach to all cases - using same processes and same technology -- and praying for strong performance numbers.

- Udayan Bose

2nd Annual PPC Stress Study Results

We released the 2nd Annual PPC Stress survey results today. We had 140 retailers participate in this year's survey. They ranged from giant e-tailers like WalMart to one person shops.

Despite all concerns about rising click costs and click fraud, e-tailers are investing more and more on paid search advertising. Also, the sophistication level keeps increasing. We believe that use of long tail keywords is one "probable indicator" of level of sophistication (attempts to monetize the long tail).

I am amazed - still - at the number of people a firm dedicates to its PPC campaigns and the time spent in management. Understandably more people are willing to outsource.

Number of specialized agencies are still very few. PPC Management still is done by boutique firms who offer other services as well.

My forecast remains optimistic - I don't see any signs of a PPC slowdown till 2011/2012.

You can read the press release here : http://www.emarketer.com/Article.aspx?id=1005557

You can download a free copy of the executive summary here - http://netelixir.com/stressreliever.html?ne_ppc_id=31&ne_key_id=-5

Thanks,

Udayan Bose

LXR Solo Launch at Shop.org Annual Summit in Manadalay Bay, Las Vegas

The day has finally arrived when LXR Solo would be unveiled to the world of e-tailers. Understandably its a very important moment for all of us at NetElixir.

We have spent the past 2 years building the technology - testing the algorithms - simplifying the UI and building a tool that is relevant and useful to online retailers.

There is an interesting history behind this tool. Let me share that with you.

Circa 2004 - I tested the 3 most popular PPC tools in the market - GoToast (became Atlas One Point subsequently), Bid Rank and Search Ignite (end of 2004). There was a clear emphasis on "bid management". The bid rules were complex - even for someone like me who had a decent amount of hands on experience in the space. Also, after having struggled as a marketer to run an optimal PPC campaign I knew that bid management was a small part of the entire PPC management process.
I wanted to develop a PPC tool that had three key strengths -  SIMPLE TO USE, POWERFUL PERFORMANCE & RELEVANT REPORTING SYSTEMS.

Simple to use - I wanted to build a tool that was for marketers NOT Geeks - for me simplicity was- ABILITY TO GET A CAMPAIGN UP AND RUNNING IN 10 MINUTES FLAT!

10 Minutes flat!!! That was considered an impossible thing (and still is considered so) in our business

Powerful Performance - When I was a marketer my focus was to get the Cost Per Lead DOWN and to get the number of leads/sales UP. Period. I wanted to build a tool that helped marketers do this WITHOUT THEM HAVING TO GO THROUGH A BIG HASSLE OF SETTING BID RULES etc.

Albeit, the conversions or sales (or leads) are dependent on multiple factors like quality of website - competition, promotions being run and the tool does not have any control over that.

But, the tool ensures that its able to generate the BEST PERFORMANCE within the mentioned constraints and defined SCOPE.

Relevant Reporting System
As a marketer I hated getting overwhelmed with reports that had very little use for me. When I set about building this tool this was one of the most important criteria for me - generate RELEVANT REPORTS - USEFUL REPORTS.

Back in July 2004 I developed a document on "the new system and method in Search Engine Marketing". This document was to become our guiding document for LXR Solo.

A challenge every boot strapped start up faces is to attract good/solid people who can convert the concept into a workable business/technology. We were no different. We were "tiny" and hiring good techies was beyond us at that stage.

I approached a top technology institute in India - National Institute of Technology, Warangal. With the help of one Professor (Dr. Somyajulu), an experienced Database specialist (Vishal Pannala) and a team of 5 M.E. (Master in Engineering), Computer Science students we developed a working prototype by end of 2005. This was arguably the best decision I have ever taken as an entrepreneur.

By end of 2005 we had grown significantly thanks to the gaining popularity and acceptance of our outsourced 24x7 PPC services. I set up a tech team  in-house to refine the tool and make it "marketable". They did an awesome job. By  September 2006 we already were testing the tool with a large Australian agency - ineedhits (http://www.ineedhits.com/). They have been our agency partners since then. In March 2007 we entered the German market and got one of the largest SEM agencies - Ziel Traffic (http://zieltraffic.de/) -  to test our technology. We did well. Passing the German Test gave us confidence to launch the tool in US.

Now, the challenge was - should we launch the advanced version of the tool or should we start with a basic version (upto 500 active keywords in management) targeted at PPC advertisers who spend $25k per month on Google or less.
Our statistician's research showed that there were about 100,000 advertisers in US alone who were in that range that might be ready for the tool. Also, this number is likely to grow at a significantly faster pace than rest of the market.

Hence, we decided to launch LXR Solo (targeted at e-tailers).

We want maximum marketers to benefit out of this tool and hence have priced it at an affordable $499/month. We wanted the marketers to feel satisfied with the tool and stick with us ONLY IF THEY FEEL THE TOOL HAS BEEN USEFUL FOR THEM - hence there is no long term contractual obligation.

We start the beta test for the tool on 15th October 2007. We have capacity for at most 25 beta testers. They get to try the tool free of charge for 30 days - 15th October-14th November 07.
You can sign up for LXR Solo using this link -  http://netelixir.com/lxrsolo/lxr-solo.html

- Udayan Bose