Multichannel Forensics A to Z: Paid Search

The paid search customer is one worthy study in your average Multichannel Forensics project (book, study).

Most customers understand the difference between paid search and natural search, implying that the customer is using paid search for reasons different than the customer using natural search.

Customers can be segmented by the micro-channel they use (Google Paid Search, Yahoo! Paid Search, MSN Paid Search, Ask.com, etc.).

When search is viewed from the Multichannel Forensics standpoint, you often see that Google is in "Isolation Mode", while Yahoo! and MSN are in "Equilibrium Mode". In other words, the Google customer stays with Google, while the Yahoo! and MSN customer is willing to try all search engines.

Pay close attention to the long-term dynamics of this relationship, if you experience this phenomenon. If the Google customer is less valuable, long-term, and your MSN and Yahoo! customers are switching to Google, uh oh.

Our focus will continue to shift away from traditional direct marketing, to the relationships exhibited by online micro-channels. Our databases will be able to store complex micro-channel interactions across time, allowing us to see these trends.

Google, Yahoo!, MSN, and Multichannel Forensics

Web Analytics practitioners do a very nice job of summarizing visit-specific customer behavior. They can tell you that 29% of the customers who visited a landing page were new, 71% existing visitors. Our world of marketing and measurement fundamentally changed when we were given access to the information provided by Web Analytics.

Now it is time to complement the veritable plethora of information provided by Web Analytics with Multichannel Forensics.

Most online marketers generate considerable sales from customers referred by Google, Yahoo!, and MSN searches.

Now let's consider future behavior. In other words, does the Google purchaser purchase again after conducting a search using Google? Does she purchase again because she becomes loyal to your website, visiting it frequently? Does she purchase again because of your catalog marketing activities? Does the MSN purchaser stay loyal to the MSN micro-channel, or does she switch to Google?

Multichannel Forensics provide answers to all of those questions.

Often, Multichannel Forensics suggest that Google is a unique micro-channel, separate from your e-commerce channel. My projects routinely indicate that Google customers have comparable future value, compared with Yahoo! or MSN customers. But subsequent behavior is fundamentally different! This means downstream marketing activities can be executed differently for the Google shopper than the MSN or Yahoo! shopper.

The Yahoo! and MSN shopper are occasionally less loyal to their portal than are Google shoppers. Loyalty to your brand may be similar, but you may find these customers elsewhere on the internet in the future, whereas the Google shopper may continue to be loyal to Google.

Results across brands are frequently unique, so it is important that you give Multichannel Forensics a try, considering each online marketing vehicle as a unique micro-channel.

Hologram Marketing and Multichannel Marketing in 2015

A loyal reader sent us this article about Target using Hologram Marketing.

Fast forward to 2015, when we'll read an article that goes something like this:


NEW RESEARCH INDICATES THAT E-COMMERCE AND HOLOGRAM MARKETING WORK TOGETHER TO FACILITATE THE OPTIMAL CUSTOMER MULTICHANNEL EXPERIENCE

October 29, 2015: A new study, commissioned by Google, Yahoo!, Shop.org, Marketing Sherpa, Forrester Research, E-Tailer and Internet Retailer indicates that "multichannel customers", customers who shop via e-mail marketing, paid search marketing, website research, social media, e-commerce and hologram marketing, are five times more valuable than customers shopping via just the hologram marketing channel.

"These results validate what we've been preaching to clients since the early days of hologram marketing ... you simply cannot dive headfirst into hologram marketing without realizing that the customer demands a multichannel experience." stated Leonard Thigginsworth, President of Shop.org, the venerable e-commerce advocacy firm. "Firms that fail to tightly integrate the world of e-commerce with the benefits of hologram marketing are unlikely to thrive in this hyper competitive marketplace. Furthermore, the suggestion that today's experienced online marketers will soon be standing in soup lines is simply premature. Online marketing skills are essential in this highly complicated age of hologram marketing." concluded Thigginsworth.

The study indicated that 61% of customers were "very likely", "likely", or "somewhat likely" to use old fashioned tools like Google and Yahoo! to search for products and services. These customers indicated that they spent 5.3 times as much money on hologram marketing as did customers who abandoned e-commerce in favor of hologram marketing technology from "Holo", the San Jose based brand that utterly disrupted e-commerce in 2013 with innovative "personal holograms" that manage everyday consumer tasks via simple voice commands.

39% of survey respondents said that they were "very likely", "likely", or "somewhat likely" to use promotional e-mail campaigns to facilitate searches on Google or Yahoo!, searches that resulted in customers researching products and services on old-fashioned e-commerce websites, before ultimately giving purchase instructions to their personal hologram.

Darren Manning, President of Internet Retailer, believes these results validate the need for a holistic multichannel customer shopping experience. "We all know that late at night, shoppers wearing pajamas, sitting in front of the fireplace, love to hold their notebook computers on their lap, reading promotional e-mail campaigns and researching products and services in the friendly, safe and encrypted blanket known as e-commerce. This behavior simply isn't going to change because a startup company creates a personal hologram who does menial tasks and chores for you." stated Mr. Manning.

"In addition, do you trust handing over your credit card number or thumbprint to a hologram? I don't! I trust the encrypted environment offered by e-commerce." added Mr. Manning.

The study is good news for Google, a beleaguered old-school brand who lost a third of their search market share to Holo during the past thirty six months, resulting in an 80% drop in share price.

The study is also good news for online advocacy organization Shop.org, which is struggling to stay in business in this ultra-competitive marketplace. "We strongly believe that multichannel marketing is best experienced when customers use a combination of e-mail marketing, paid search, and e-commerce websites to research products and services. Traditional e-commerce-based research drives purchases via tools such as Holo. Research indicates that up to 80% of purchases via Holo are driven by e-mail marketing, paid search marketing, and e-commerce websites. Multichannel marketing, e-mail marketing, and paid search are here to stay. Take away e-commerce, and you take away the e-commerce potential of Holo" stated Ben Morrison, President of Shop.org.

Still, there are fundamental changes in customer behavior being exhibited by "Generation Z", 13-25 year olds who are children of the non-descript "Generation X" cohort of consumers. A recent study commissioned by Holo indicated that only 7% of these consumers subscribe to e-mail marketing programs, or use paid search.

"We believe that when Generation Z become full-fledged members of the "participation economy", (a phrase jointly coined by President Jeb Bush and Speaker of the House Michael Moore), they will appreciate and fully utilize the myriad of benefits offered by a multichannel marketing experience that tightly integrates e-mail marketing, paid search, social media, e-commerce and hologram marketing." stated recently appointed Marketing Sherpa President Sarah Rogers.

The Day E-Commerce As We Knew It Died

Of course, e-commerce didn't die today.

But symbolically, e-commerce changed today, with the ousting of Yahoo! CEO Terry Semel and a New York Times piece about the end of rampant e-commerce sales growth.

Both stories point to the maturation of the online channel.

To me, the New York Times article is particularly delicious, drawing the ire of Shop.org and various e-commerce bloggers (here, here and here), all quick to defend their channel at the first hint of criticism or sales slowdown. To be fair, the criticisms are valid and even enlightening --- but it was fascinating to see how defensive some of the responses have been.

Those articles and comments look an awful lot like the musings of catalog executives between 1999-2003. Catalog folks were defensive, quick to defend the catalog channel when e-commerce pundits predicted doom for anything not associated with the online experience.

In reality, the data used in the study has been readily available from Forrester Research for years, and publicly traded companies have repeatedly talked about this slowdown over the past year, so this news isn't news.

Over the next three years, our profession will see a separation in talent. As e-commerce growth becomes harder and harder to achieve, management is going to need e-commerce folks who are skilled, maybe "gifted" at driving sales.

For the past decade-plus, multichannel e-commerce executives benefited from the efforts of their catalog and retail leaders. The catalog executive mailed catalogs, the customer shopped on the internet. The online executive received hefty bonuses, the catalog executive was fired.

The retail executive spent decades building a brand, the online executive received credit for sales cultivated through years of positive retail experiences. With e-commerce maturing, it will be up to the e-commerce executive to stand alone, to drive incremental sales increases without the benefit of seasoned leaders in other channels pushing free, incremental sales to the online channel.

There are hundreds of really good, really talented online executives at multichannel companies. These folks honed their craft, while learning how to get things done politically, while learning offline marketing skills that transfer to the online world.

These online executives will have a tremendous advantage. These are the folks who will continue to drive true incremental sales increases over the next three years, while other online businesses flatten-out, or flounder.

June 18, 2007. The day e-commerce as we knew it died.