Fred Aun recently posted an article on ClickZ, showcasing a recent forecast by Interpublic Group’s Magna Media Services. According to Magna, although total spending on Internet and mobile advertising is expected to decline three percent in 2009 from 2008, substantial growth can be expected for the near future – 5 to 10 years.

According to Brian Wieser, director of forecasting for Magna, $22.8 billion will have been spent on online and mobile advertising by the end of 2009. While this signals a slight decline decline in yearly terms, the future looks optimistic; Wieser predicts a 7.7 percent total increase for 2010 with ad spending to reach an estimated 24.6 billion. According to this article, Wieser also predicts that by the end of 2014, spending will reach a robust $35 billion, which represents a growth rate of 8.9 percent, compounded annually.

According to Magna’s study, expenditures on advertising,”…industry [all advertising] revenues will fall from $47.5 billion in the fourth quarter of 2008 to $43.2 billion during the fourth quarter of 2009.” But compared to the estimated revenue declines of 13 percent during the third quarter and 18 percent for the first and second quarters of the year, this represents a, “…moderating pace of decline.” In the midst of the decline, it was reported that paid search and online video grew quickly in the first half of this year – a trend that is expected to continue in the next several years. Aun again cites Wieser, who stated: “Search advertising caused an expansion of the market, making it possible for millions of small- and medium-sized enterprises to do what we call advertising.”

The Magna report also found that direct online advertising, which raked in $13.5 billion last year, grew 2.5 percent this year totaling $13.8 billion and is expected to reach $15.4 billion next year. Local digital advertising revenue this year will see around $3.4 billion, an 11 percent decrease from 2008; it will likely increase to an estimated $3.5 billion in 2010. The forecast report also predicted that national digital ad revenue will reach $5.5 billion, 9.8 percent less than in 2008, and will see a mild increase next year as it sees $5.6 billion. According to Wieser, the rapid recovery time for many types of advertising will actually benefit display, which may have fared worse in the recession. He argues it enable advertisers and brands to purchase display at more competitive rates.

Via Fred Aun @ ClickZ

I recently came across an interesting article on GetElastic that gives profound insight into the different ways in which men and women perceive and operate within the online marketplace. The article, written by Linda Bestos, cites a recent study by Southern Illinois University on which priorities men and women value. According to this study, the top priority of both men and women is ease of use. However, for men, “web speed” was cited as the second-most important concern, and for women it was, “easy navigation.”

Bestos suggests that what might seem like a minor gender-based difference of opinion could really mean that (while online) men are “hunters” and women are “browsers”. To bolster this claim, she cites the findings of a study by the Wharton School (“Men Buy, Women Shop: The Sexes Have Different Priorities When Walking Down the Aisles”), which revealed that males chose, “…difficulty in finding parking close to the store’s entrance.” as their biggest issue with shopping. Conversely, for women, it was, “…a lack of help when needed.”

According to Bestos the differences to not stop there:

• Women Shop Like Santa, Men Shop Like Scrooge. Women start their holiday shopping earlier than men, usually shop for more gift recipients. Men are more likely to become angry and frustrated by holiday shopping. (I also recall a study a couple years back by BIG Research that claimed men are more likely to grab gifts for themselves, mostly electronics).
• Men prefer coupons, women prefer sales. Perhaps this is because a coupon can be applied to something a guy already knows he wants, the coupon is a predictable discount and an extra incentive to reward himself. A sale applies to a number of products, the “fun” for women is browsing the sale to find great deals – it’s recreation. The reward is finding treasure and feeling like you deserve it because you found such a great bargain.
• Guys think about what can benefit them now, while ladies think about what benefits them long term. Perhaps that’s why women browse sales, they keep their eyes open for things they can wear next year or stash away for a future Christmas gift.
• Men and women view images differently and respond differently to humor. This impacts conversion for advertising, website imagery and messaging. They also prefer different colors (but not all women love pink).
• Men and women may buy the same products, but for different reasons. As Future Now’s Holly Buchanan points out, you can use customer reviews to identify which product attributes and benefits men and women rant or rave about.

So, what does this mean for us?

Thankfully, Bestos does not argue that these differences merit gender-segregated sites, with different design, graphics and copy for men and women. Rather, these differences should noted, and this knowledge implemented, when developing shopping sites that appeal to both men and women. In doing this, a site can significantly increase performance while catering to a demographic that previously was not given as much consideration. Bestos suggests making the most of customer surveys that include men and women – and have a way of telling which is which – but, with the option to disclose one’s gender optional. This, she says, will illustrate the successes and shortcomings of a site, from both points of view.

via Linda Bestos @ GetElastic

According to a recent study by McAfee, 65% of online shoppers who abandon their carts during the check-out process, soon return to complete the transaction, with the largest number of these shoppers returning to buy after one to two days. This study, titled ‘Digital Window Shopping: The Long Journey to Buy’, surveyed 150 million online transactions and found that delays in purchase are far more common than previously imagined. According to this study, the following are primary reasons why some consumers delay purchases after placing merchandise in online shopping carts:

• Brand recognition: Merchants with higher brand recognition enjoy shorter purchase delays than lesser-known brands, in part because of the comfort level of the consumer.
• Demographics/experience: More experienced online shoppers – who are usually but not always younger – are more comfortable with the e-commerce experience – from checkout procedure knowledge to security savviness, and will click “buy” more quickly than a shopper new to e-tailing.
• Competitors: Merchants who sell in a highly competitive marketplace will wait longer to see a sale as consumers shop for similar product by price and convenience. Merchants offering unique or hard-to-find items will experience quicker purchase decisions.
• Novelty: New services or products, especially if they are perceived as too expensive for an impulse purchase, will take longer to close a deal on.
• Price: Higher priced items or high purchase value orders will tend to take longer to complete as shoppers reconsider whether they can really afford them, especially during the recession

This study also found security concerns to play a significant role in whether a shopper abandons their cart, and/or if the customer returns to complete a transaction. This was revealed though monitoring the behavior of two groups of consumers: one group that saw the McAfee trust-mark on sites, and one group that saw sites without the mark. Shoppers which saw the mark were converted to buyers at a rate 11% higher than those which did not. Interestingly, shoppers that waited four or more days to complete a transaction were even more responsive to the mark, which suggests that the more uncertain a consumer might be about making a purchase because of security concerns, the more likely they are to delay. A similar study by Paypal and comScore found that 21% of buyers security concerns’ played a major role in their online purchasing.

via MarketingCharts

1. What is your background, and how did you make it to Shopping.com?

Tomer Shoval: I’m actually a veteran at Shopping.com. I’ve been with the company for nine years. I started as a Jr. Content Specialist 2000. Since then, I have been able to on take more responsibility and move up the management chain. After five years as head of content, I moved to the U.S. (about 3 years ago) to head up sales. Now I’m the Director of North America for the company.

2. What makes Shopping.com different from other comparison sites?

Tomer Shoval: To be honest, it’s not very different. That’s exactly the realization we had as a company about two years ago. The shopping engine space brings value, but it’s very crowded. We all do good job of helping customers, but the challenge is to maintain a large, loyal group of users, as we are all dependent on traffic acquisition. About two years ago we decided to focus on customer support and selection. Two years ago we had 60% of the top 100 online retailers in our site. Today, we have 90% of the top retailers 100 retailers – and, eventually our goal is to have the top 500. Our focus is to create a new experience – engaging customers, helping customers. Most customers do not specifically know what they are looking, so we would like to develop a unique experience that is helpful for them to find what they’re looking for. Further, we are continually adding content and community – Shopping.com also owns Epinions, and this is a huge asset. The goal is to find as many ways to help our customers.

3. What are some channels in which Shopping.com is currently promoted?

Tomer Shoval: Shopping.com is a technology company foremost. We have built a robust platform have a strong presence in the SEO market, and our main goal is to drive return customers. One big draw we have is our ‘distributed commerce network’ that provides merchants’ offers to publishers. This is great for our merchants because it enables us to increase their reach, and by displaying their offers on a large network of publishers, we thus we are able to scale up their visibility.

4. What is the biggest challenge in generating new customers today?

Tomer Shoval: We need to create a unique value proposition: A) one that solves a pinpointed issue such as, “I know I want to buy a camera, now it’s where do I buy it;” and B) our presence needs to be something that is unique, not easy to replicate. We want to create the presence, for consumers, of the sales person who is there to help answer a few questions and give insight to help make the best purchase possible, as easy as possible.

5. The recession has affected every industry. How has Shopping.com responded to the changing marketplace?

Tomer Shoval: People are buying less and are buying less expensive items. It’s been a challenging year for Shopping.com, just as it has been for every site. One interesting aspect for Shopping.com is that, during challenging economic climate, people talk more about where they buy. Shopping.com has an advantage in providing lost-cost value. With that said, we have been able kept our position in the market. In addition, since we have a CPC monetization with our clients, we were able to introduce new promotions. This helps our merchants maintain a sustainable, cost-effective strategy, and we continue to innovate on our pricing mechanisms. Instead of charging the same CPC for, say, all watches, we have different rates that merchants are charged based on the unit price. This is one way we have been able to get our merchants to stay with us. We have been able to stay competitive, and our reach is continuing to grow despite the recession.

6. Do you plan to keep this value-based pricing in place?

Tomer Shoval: Value-based pricing is an innovative product we are very proud of. And the theory behind it is very simple: not all traffic sources and clicks are equal. Meaning, various publishers drive traffic with various conversion-rates. So, we expose our merchants to these different types of traffic in a cost-effective way. We adjust the CPC, based on which publisher is sending the traffic. We believe it is the best long-term approach because it is dynamic, and scalable. It gives the merchant the ability to scale their reach, without filtering through the thousands of publishers. We therefore say, “don’t worry about it, we will adjust the CPC for you.” So if one source is bringing in traffic but it’s low conversion traffic, they will be charged a lower CPC – then, in the future if the conversion rate changes, the CPC will adjust automatically. VBP is the future in our distribution; moreover, it’s good for publishers. If we charge merchants the same for all traffic sources, publishers with lower conversions can dilute the best publishers’ value. Our goal is for our high-conversion publishers to generate the best CPC as well.

7. What do you think the new areas of development are for comparison shopping engines space? What should we be expecting to see as customers?

Tomer Shoval: I can talk about what Shopping.com is doing – engaging consumers before purchase. And, we are always looking for finding new ways to help make this happen. The shopping comparison space has not been that innovative in the last several years, but those who figure out the ‘special sauce’ will reap the benefits. A lot more engagement, and interaction, which will lead to effective narrowing – this will help the customers.

8. With the recent consumer focus on finding the lowest prices, do you anticipate an influx of new comparison-shopping sites?

Tomer Shoval: To be honest, I think there already is a lot of competition. There are dozens of sites aiming at similar things. Some are more specialized in various areas. Value in this economy is important, but I don’t think this will be enough – customers want the end-to-end experience, with other aspects of value. I believe there will be some consolidation, actually.

9. How do you plan to differentiate yourself in the comparison-shopping marketplace?

Tomer Shoval: We have already started releasing major changes. As we near the holiday season, you will notice major changes to the display: more merchandising info, more images, and the introduction of ‘my shopping’, so customers can save their favorite items. This year we invested heavily in infrastructure, and we have upgraded our feeds system to increase selection. I believe in the next 6-9 months, you will see visibly better site, with better content, and with a much stronger community. In 2010, we will be able to show that we are no longer just a comparison site.

10. What will be the biggest challenge you face in growing your business?

Tomer Shoval: Finding a pinpoint, and effectively solving it in a unique way that will drive loyal audience – moving away from traffic acquisition tactics. Who ever can figure out how to do this, and even take short term hits on their P&L, and invest in this – will be able to stick around for the long term

SEOMoz recently published a story on Global Retail Insight’s (a subsidiary of IDC), report on multi- and omni-channel shopping. Based on extensive surveying, this study determined the various spending rate by customers when shopping multiple channels – ie., store, m-commerce and through social networks. The study indicated that multi-channel shoppers spend 15-30% more than single-channel counterparts. Further, those that shop multiple channels simultaneously – referred to as omni-channel shoppers – spend 15-30% than the multi-channel shoppers. According to IDC analysts, Bob Parker and Leslie Hand:

“The omni-channel shopper wants to use all channels—store, catalog, call center, web, mobile—simultaneously… an example would be a shopper with an Android-based phone who snaps a picture of the barcode of a product in a store, immediately does price comparisons on the web and connects to her social network for opinions.”

While this study substantiated common theory regarding multi-channel shopping, it was interesting to note the spending disparity between multi- and omni- channel shoppers is the same as single- and multi-channel shoppers. This illustrates the need for more visible and comprehensive advertising strategies, especially with the increasing commercialization of social network sites, and trends in m-commerce.

via Rand Fish @ SEOMoz

Ever thought that showing your competitors’ prices on your site was a bad idea? Well, a recent study by the E-Tailing Group found that,”…63% of online consumers who comparison shop like to see competitors’ prices while shopping on a retailer’s web site, and 39% say such a display would make them more loyal to that retailer even if its rivals prices were lower.” While price comparison is easier than ever, with potential buyers being able to pull up multiple sites in minutes, customers don’t always go with the lowest price — even though price is the initial subject of comparison.

The study goes on to indicate that a significant percentage (53%) of online shoppers would be less inclined to comparison shop elsewhere, after having already shipped on a site that revealed competitors’ prices — suggesting that, this this type of openness can lead to a heightened sense of loyalty. A further 78% of those polled said they’d return to a site that revealed competitors’ prices.

This study also found that:

* 36% of shoppers spend more than half an hour comparison shopping, and 65% spend at least sometime comparison shopping, before making a purchase decision.

* 95% of shoppers visit at least two web sites when comparison shopping, and 51% check four or more sites, prior to making a purchase decision.

* 57% of respondents said it’s important to have comparison pricing on a retailer’s product pages; over 40% said this would save time and money.

* 58% of respondents expect retailers of commodity products to offer comparison pricing on their e-commerce site.

This illustrates the case for price openness for internet retailers, even those which are not “comparison shopping” sites. Additionally, it helps disprove the myth that price is the determining factor for where consumers make their purchases.

via Internet Retailer

I recently stumbled upon Chris Lake’s most recent article at econsultancy.com, which addresses ‘tweeting’ and how businesses should use this service to communicate with customers. Most people have their own opinion of Twitter, and like it or not, not everyone understands the micro-blogging service. When used correctly, Twitter offers a highly effective, highly personal, and highly public method of communication. Lake argues, Twitter should be used by those companies that wish to reach out to their customers, and those confident they can provide top-notch customer service. With Twitter, company representatives are expected to deal with customer complaints publicly, and in a way the company is comfortable with everyone seeing. This provides representatives the opportunity to show their business still cares about customer service. It is this new, very informal-seeming (yet dedicated) approach to customer service that Lake refers to as, “putting the ‘me’ in social media.”

He goes on to give 27 examples of promotional tweets used by online retailers.

via Mike Lake @ econsultancy

The long tail – the very specific and long search term – has a different performance than ’short tails’. Isolated long tails may not constitute a significant percentage of your traffic, as Scott at SeoMoz illustrates, but together they cannot be ignored. Much like the long tail applies to SEM, the long tail of interests for products is relevant for all types of media. This further iterates a need to have automated whys of taking advantage of this data. Read the video below to learn more:

via Scott @ SeoMoz.org

1 .What does “effective” online display advertising mean to you

Shaukat Shamim: Today Search Engine Marketing is approximately $20B dollar market and continues to set the bar. Advertisers continue to spend in SEM due to the fact it is economically effective and efficient for them. Search has the element of being very ROI driven, and measurable. However, the problem is they can’t get enough of it, since search engine marketing is only 20% total reach and therefore rather limited.

Our objective here at Permuto is to achieve the the same economics and relevance of search engine marketing in display advertising. When you establish and deliver that every time, advertisers will get a new effective channel for their online display advertising campaigns.

2. How are you able to illustrate the effectiveness targeted display advertising to the advertisers?

Shaukat Shamim: The term “effective advertising” means different things to different types of advertisers. For brand advertisers, they measure the success of their campaigns based upon soft measures such as awareness, purchase intent, and favorability. Performance advertisers, especially commerce marketers, are very much driven by hard metrics driven which are measured by metrics such as clicks, conversions, and ultimately return on ad spend (ROAS). So, any solution that will give them positive ROAS that matches and exceeds their best channels will always get them to turn their head.

Read more…

Ever wanted to know how much advertisers spend on Google Adwords? It probably comes as little surprise that Google has taken over as the search engine of choice for 4 out of 5 online advertisers. Nor, that this form of search advertising accounts for nearly all of Google’s revenue. We have broken the figures down to daily spending, in order to illustrate Google’s highest spenders, and how much they are spending. It would be interesting to see how efficient these ads were for spenders…

(click image to enlarge)