Difference between revisions of "Marketing Campaigns"

Revision as of 17:14, 19 June 2008

[Joe Payne]

Maybe most of you haven't noticed, but my forum participation has dropped lately. My business is growing and is now to the point where it consumes a good portion of my time. It's time for me to focus on some final procedure and programming tweaks, so I won't be as active here for a couple of weeks. By that time, AC7 will probably be released. I've already hired some part-time help and I imagine it will need to be full-time within 60 days.

So, I thought I would offer some final experience notes regarding my online marketing tests using merchant accounts like Shopping.com and Yahoo products. My store is new, my products are new and nobody really knows that I sell this stuff. This is how I went from 3 orders a day to around 30 orders a day. I'll still be around and will respond to existing posts and inquiries. I'll also still be available for custom development work.

All of these notes are based on my store, my product lines and my own efforts. None of this is set in stone, which means your mileage will vary. Please keep that mind as you read.

Introduction

I've spent the last 90 days experimenting heavily with online search marketing campaigns. These are the places where a merchant uploads his store database to a common search engine. The structure is almost always the same: create a feed file, open an account, upload your feed and activate the campaign. Overall, there is tremendous value to these campaigns but only if you price yourself well. Most of these visitor-side interfaces will sort by price, so being .01 more than everyone else will completely waste your money and your time. So start your store with the lowest margins you can bear if you want to maximize your exposure. it's ALOT easier to go up in price than down from a business finance perspective.

Below you will find my summary conclusions for each of the 5 online merchant campaigns I chose to use. I'm sure there are more, but these are the ones I decided to try.

ROI Tracking

Tracking search campaign results is a nightmare. Everybody was bought out by everybody else at some point in the past. So listing on Shopping.com also gets you hits from search.ebay.com. Listing with Shopzilla also brings in hits from BizRate.com. I took the extra step of adding AC7 Affiliates to my system. Then I did a search/replace on every URL in every feed file to add the appropriate ?affid= value to the product URLS. The goal was to use the Affiliates feature to better track real ROI for these campaigns. This didn't work as well as I'd hoped. I'm seeing results, but not all my orders got tagged with an Affiliate ID. I suspect some of these search marketing campaigns stripped the parameter so AC7 never got the chance to see it. Plus, with all the database-sharing these guys are doing there is bound to be some modification done to my product URLs. So it did help and I have some numbers to work with now, but it's not complete. Given the diversity of URL encoding in todays online world, this concept may never be completely accurate. Plus Affiliates was more designed for a single static link on another site, not this huge search-marketing stuff.

Shopping.com

1. Draws in almost exclusively eBay-ers - they're tight, whine alot about shipping rates and their average order total is less than $50.
2. CPC is not bad, but it's the sheer rate at which the budget gets burned up that turns me off. I swear these eBay-ers are clicking through every freakin' item they like.
3. Overall, the rate of return due to the low average order total makes it not worth the money with the margins I have on products. I could make up for it through a large volume of orders, but the increase in order management overhead and RMAs would offset any profit in my opinion.
4. You can dramatically increase your site traffic and exposure overnight using Shopping.com, but it's going to cost you a fortune and after three separate tries I still can't find a margin that pays for the campaign costs.

Yahoo.com

1. Slow as molasses. Been active for a week and like 10 referrals. Budget will last forever and the average order total is nice at $100 for the whopping 2 orders I've gotten in a week - but nobody's using it.

MSN.com

1. System doesn't even work for larger catalogs. Waste of time setting it up. Only pluses are it's still free and it'll use your google feed upload file, but free and easy are worthless if your products never get listed.

Google.com

1. Long term value is fantastic. Average order totals are nice at $96. Free while it's still beta is a huge plus. I'm not going to get rich from Google.com but I will see a slow but steady increase in business at no cost to me. Hard to beat that unless you're in a hurry to grow.

Shopzilla.com

1. Here's where my money is going to go. For whatever reason, I had huge success with shopzilla. The CPC was reasonable like shopping.com but without the massive 2-day burn-up of the budget. I've gotten 40% more orders with twice the average order total using the same budget amount as shopping.com within the same period of time.
2. Customers are more for savvy and reasonable. They're not dogging me for free shipping. Except the guy that ordered the 23 foot radio antenna and doesn't understand why that can't fit in a standard DHL ground truck.
3. Admin interface offers data validation prior to listing - you can check your upload format quite well before getting the listings active.
4. Most purchases are Visa/MC as opposed to shopping.com users and their PayPal payments. No matter how well your site payment gateway is written, PayPal will screw up some orders and fixing them takes your time away from growing the business.
5. Only downside I had was they are slow to get your listings active - like 4-5 days. But once it went live, it was worth every penny to me.
6. I wrote my own custom feed file generator to create the compatible Shopzilla.com file format. I am willing to sell it if anyone is interested.

Summary

Shopzilla wins hands-down for building an effective database of marketable customers at a reasonable pace with a reasonable budget expense. Google.com wins second place with a smooth, steady stream of higher-dollar orders with no marketing cost while it's still beta. Shopping.com will get you the exposure you want but I just can't seem to find a way to secure the sales needed to fund the campaign costs. MSN and Yahoo are worthless. I might dig into Yahoo more to see if I did something wrong.

Conclusion

Marketing isn't cheap. Anyone who says they want to make their money back on their first marketing campaign has never done marketing. It's an investment and it is going to cost more than it makes you at first. But it does work. Depending on the funds available to you, a previously unknown business can grow expotentially overnight.

The value of a new customer should never be underestimated - it doesn't matter how much they bought the first time. A happy first-time customer is far more likely to buy from you again in the future than anyone else on the planet. It doesn't matter how good your site design is - if your customers aren't happy, the word will spread and you'll never grow past a certain point. If your customers ARE happy, the word will spread like wildfire. So it's critical to be on your best behavior, have the most patience and be the most responsive you can be at all times.

If you decide to proceed with this type of marketing, make sure you think it out first. Do you have the procedures in place for such volume? Have you established the organization skills to manage a daily supply of large volume orders? Have you got the staff in place that can adapt to changing policy and procedure as your business grows? And most importantly, can the margins you've established sustain the increased cost associated with an increased order volume?

These are all questions to which you must have effective answers before you throw $10,000 at some online search engines. Trust me on that one

References

Original text by Joe Payne of Solunar Services LLC