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I was one of the speakers and attendees at the inaugural eTail UK conference this year in the UK. I scribbled down lots of notes intending to do a series of blog posts based on what I heard and learned.

That was over 2 months ago now… But I thought I’d at least capture a few snippets of interest that I still remember.

1. Howard Nankivell, Head of New Business, Direct Wines Ltd

Howard noted that their conversion rate on PPC for brand terms (for wines) was around 20%. Conversion rates on generic wine terms are around 3.5%. Conversion rates on ‘other’ terms are less than 1%. Their ‘blended’ PPC conversion rate from PPC is 8%.

My observation: just reminds me how useless average conversion rates are without any further context, segmentation or analysis.

2a. Jonathan Wall, Marketing Director, Dabs.com

Jonathan was talking about why it can be better to take your search marketing in-house (rather than outsource to an agency). One of his points was that agencies aren’t always as clued up about your actual business as you are, even though they may understand search marketing.

For example, take an understanding of profit margins and how they should relate to PPC bidding strategies. On an iPod you might make only a 2% profit margin, so on £200 that’s £4 profit. On a laptop you might get a 4% margin, so on a £400 sale you get £16 profit. This knowledge would affect what you were prepared to pay for clicks right?

My observation: we often focus too much on “customer acquisition” at any cost; increasingly a much sharper understanding of the dynamics of a particular business will be required to really the ‘sweat the value’ out of online marketing. I predict we’ll see a lot more digital marketing taken in-house for this reason.

2b. Jonathan Wall, Marketing Director, Dabs.com
Jonathan again... this time saying that customers referred from shopping comparison sites were 50% less likely to buy again than those referred by Google.

My observation: firstly I was pleased to hear someone actually talking about customer retention for online (most noise is still around acquisition and conversion). Secondly, it's always been rumoured that customers referred by comparison sites were 'low grade' - the very fact that they are using a comparison site perhaps suggesting they are not going to be your high lifetime value types. So this appears indeed to be true, at least for consumer electronics - a fickle customer base at best. But what about other sectors, products and services? Is this bad news for the shopping comparison engines long term?

3. Russell Gould, Director of Digital Marketing, My Travel Plc UK

Here’s a question that comes up a lot: if you have top slot in the organic rankings for a particular keyword, do you really need to also pay for it in the sponsored listings? Well, Russell experimented with this and found that relying ONLY on the organic top slot reduced sales by around 15% compared to having BOTH slots taken. Even accounting for the additional cost of the paid clicks, his conclusion was that they needed to have both.

My observation: Of course the search engines, and (paid) search agencies, have always recommended the “double whammy” approach i.e. still pay for terms you rank top for. I’m still intrigued to whether this argument is valid for all keywords, sectors and products / services? Any other examples out there?


Ashley Friedlein
CEO
E-consultancy.com
Ashley Friedlein

Published 17 August, 2007 by Ashley Friedlein @ Econsultancy

Ashley Friedlein is Founder of Econsultancy and President of Centaur Marketing. Follow him on Twitter or connect via LinkedIn.

86 more posts from this author

Comments (2)

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Peter Ahl

Ashley,

Organic vs. Paid search cannabilization is an interesting topic, and none of the standard webanalytics tools do a particularly good job in answering the question. The analytical quandary is further and generally compounded by the increasing number of data silos the typical ecommerce business creates when implementing various best-of-breed technologies for multivariable testing, PPC bid management, segmentation, Content Targeting and so on. The analytics companies are all rolling out integrated ppc management tools, with the obvious advantage of enabling bids to conversion proxies and as an extension, theoretically at least, enabling the measurement of cross (marketing) channel interactions.

However, most solutions are in their infancy and none, so far, deal effectively with channel cannabilization. For that you really need to do some econometric analysis, typically by "going dark" on segments of your paid search program. This is a crude methodology, with volume losses an unavoidable side-effect during testing.

almost 9 years ago

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flowers

However, most solutions are in their infancy and none, so far, deal effectively with channel cannabilization. For that you really need to do some econometric analysis, typically by "going dark" on segments of your paid search program. This is a crude methodology, with volume losses an unavoidable side-effect during testing.

almost 6 years ago

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