This evening marked the end of the Shop.org Annual Summit. They had their highest attendance ever: over 1500 people. The sessions were great… lots of retailers sharing their experiences, warts and all… no vendor pitches disguised as sessions. We had a table top display on the trade show floor which we used to great effect, giving free site clinics on SEO. Here’s a recap on one of the very excellent breakout sessions from yesterday… (these notes are paraphrased) “Search is Changing: Shouldn’t Your Search Strategy” Moderator: Allan Dick, General Manager, Vintage Tub and Bath Panelists: Kurt Baldassari, Director of e-Commerce, CDW Corporation John Hawkins, Director of Online Marketing, Overstock.com John Hobson, Director of Advertising, Target Lisa Stein, CEO, SpinLife Q: Do you outsource your search engine marketing, or do it in-house? CDW: We use a third party for paid search, a niche firm that knows our business well. Percent business share of new business acquisitions. Performance compensated. Target: Just brought paid search in-house. Felt we had gotten to a level to bring it in-house. We had always kept strategy and connections with the engines in-house. Overstock.com: We’re in-house for paid search. Partnered with a search marketing firm for SEO. Smaller SEM firms who don’t add any value won’t last. SpinLife: Calculate your ROI and adjust accordingly. Do dayparting — adjust bids as much as hourly. There’s a lot of smoke and mirrors with many SEMs. Analytics companies add value, give us the ability to do true end-to-end ourselves. Coremetrics give us our return on ad spend. Plug in your gross margin per item. What value does the SEM company add? SEM firms will fall into 3 camps: revenue share (prove your worth), consultative role (teach, not do), and the ones who won’t be here. Vintage Tub: By outsourcing, we outsourced our ability to understand. Turns out we are not a tub company like we had thought, we are an Internet company selling clawfoot tubs. We’re doing really well. Organic search for us offers not just additional top of the funnel traffic. It also allow us to cut down on PPC advertising. Our tubs are a high consideration item. Our experience is that there is no need to be in the paid search nearly as aggressively if in organic. Q: What are you focused on? CDW: Focus is on paid search and shopping engines. Not focused on organic but it will be a strategy for next year. Overstock.com: Focus on internal search engine and the benefit flows through to the external engines. Hard job to get internal search right. Take “white down comforter” for example. We have 700,000 books, music and video items, and some of them may have “white down comforter” somewhere in the description. But we don’t want that “white down comforter” search to bring up music. Copy was under the merchandising group (disconnect from what the customers search for), then moved it to warehousing group because of Six Sigma (but then the finer points were getting missed). Then we moved it to the marketing group a year ago. That was the best move. Now the same people who are managing paid listings are managing the copy people so organic results are better. Q: How do you protect trademarks and brand names? Overstock.com: We have 45,000 affiliates. They can (inadvertently) cause you trademark issues. 1) Go through and look through your trademarks. What are your trademark terms? Where is your traffic volume coming from? Who’s bidding on those terms? e.g. marketing partners, affiliates, competitors. You need a very clear policy on how to deal with them. No affiliates are allowed to bid on our trademarked terms. Enforce your terms! First, send them a friendly letter and give them the benefit of a doubt. Then if no action a cease and desist. 2) Look into what terms of your competitors’ you are showing up under. Review the Google vs. Geico ruling. Don’t start a war with your competitors, where each of you in turn pushes the bidding up and up on each of your brand terms. Target: We don’t bid on our brand keywords, and we don’t allow affiliates to either. We don’t want to pay affiliates for visitors we would have gotten otherwise. A lot of policing work is required. We use third-party technology to help us police it. Q: What are your thoughts on MSN having gotten into the game “whole hog” this year? SpinLife: If you didn’t know, you could have run a MSN only paid search campaign before. MSN just hasn’t delivered to the level of Google and Yahoo: it’s delivered the lowest ROI by far. Is that behavior going to continue once they launch their own system? Maybe I’ll be surprised and it’ll perform really well for me. Vintage Tub: That’s been our experience as well. I’m cautiously excited. I’m glad to see them move to an auction style format. Q: What about shopping engines and specialty verticals? CDW: Seems every week there is a new comparison shopping engine. It’s a relevant part of customer acquisition, but it’s hard to get the B2B slice of the market and keep the consumers out of the mix. (We’re B2B.) CDW doesn’t compete on price. For us it’s our brand that carries us. Target: They don’t pay off that well for us. We work with a handful of them and we don’t send a complete feed to them. Overstock.com: We love the comparison shopping engines. Main reason for people using it is comparing prices, the second is for reviews. We want consumers to see how favorably our prices compare. SpinLife: I’m astounded by the performance. It’s exceeded my expectations. It’s the first viable route to drive new incremental traffic we’ve seen in a while. But it’s easy to manipulate: I tried to buy a 42 inch plasma screen TV and got a lot of bait-and-switch (e.g. the merchant said it was in stock but actually wasn’t and only much more expensive models were available). I gave up and went to a brick-and-mortar store to buy it. Shoppping sites need to kick out bad merchants who do this stuff. If shopping sites maintain relevancy (e.g. by kicking out bad merchants), they will have a significant role into the future. Q: What impact will the tight integration of search with the new Microsoft Windows OS (Vista) have? Vintage Tub: It might drive down the quality of the searchers. The big win for retailers will be more exposure. Target: It comes down to relevancy. User experience is how an engine will win. Q: How about click fraud? SpinLife: It’s so difficult to do anything about it. It’s in the engines’ best interest not to do anything about it. The reality is: it’s the cost of doing business. Until it’s in the engines’ best interest to stop it, it will continue to be a problem. CDW: We don’t rely on other people’s analytics. We track with our own internal systems. We use our own web beacons. Overstock.com: It boils down to the bottom line ROI of the channel. Vintage Tub: Jessie Stricchiola is really up on click fraud. She has some resources you should check out. Q: How are you changing your search strategy for holiday season? Vintage Tub: Clawfoot tubs are a great holiday gift item. [audience laughs!] CDW: Actually the Third Quarter is better for B2B, government, and education. Overstock.com: No drastic change in strategy. We’ve defined a set of metrics. If there’s lift due to seasonality, we make changes accordingly, still managing off those metrics the whole time. Q: Do you make any Spanish language keyword buys? Whole panel: no, no, no, no, no Q: What about the latency period? CDW: We’re measuring 30% of revenue comes from 2 days to 90 days from first time visiting our site. Lots in the first week to two weeks, then it really trails off. SpinLife: I want to know where they first found us. We’re a considered purchase, like Vintage Tub. So a long latency period: they may be shopping 6 to 8 months. We only keep track of the first encounter. Q: What level of granularity are you taking SEM to? Product level? SKU level? SpinLife: The management of the terms that drive 80% of your business should be brought in-house — it could be 5 words; it could be 20. Then you’ll be much better at managing and you’ll be better prepared. And you’ll get greater ROI once you’re linking your strategy with your execution of your paid search. Nobody understands your business better than you. Vintage Tub: We have our “Dirty Dozen” list that we manage every day and our “Nifty Fifty” that we do once a week. Most revenue is delivered by those 62 terms. Q: What’s your reaction to Google’s recent changes to minimum bid pricing and the ad ranking algorithm? Overstock.com: It’s been great for us. We saw some of our minimum bid prices go down. SpinLife: It’s reduced our average CPC, increased ROI. It weeds out garage operators and ego overbidding. Q: Aren’t there other considerations besides just ROI? Like seeing a competitor outbidding you for an “important” term… Vintage Tub: We do competitive intelligence and determine if they are sophisticated at SEM or not. If not, we let them spend too much and they’ll lose interest as they start losing money. Overstock.com: We measure by ROI. Q: How much internal resource have you dedicated to search? CDW: We’re using outside help (outsourcing). Target: 3 people dedicated to search. Overstock.com: 2 people. SpinLife: Half a person devoted to search. Don’t sign a long term contract. It’s more economical to bring in-house. if you are spending $750k per year on paid search, take it in-house. Vintage Tub: 1 person dedicated and some interns helping out too.
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