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Case Studies
Advancing Conversion with site+1 and media+1
Industry
Retail
Situation
A leading ecommerce retailer was having trouble getting volume
and efficiency from their online marketing initiatives due to the
increasing cost of search marketing and lack of effectiveness in
display media. This, coupled with the declining site and landing
page conversion rate, was making life difficult for the internal
ecommerce group.
While anyone could put a catalog online, the company’s
goal was not only to replicate on-site the personal service that
one might have with a local merchant, but also to leverage their
in-depth customer knowledge to attract new customers to their site
and get existing customers to spend more.
The CEO explains, "Imagine
a conversation along the lines of ‘I’ve been using
your product or service but am getting bored. What else might I
like?’...This is the kind of conversation you used to have
with a specialist but it’s very hard to do in an online environment."
Challenge
There are countless consumers online, and countless ways to connect with them. Yet despite increased spending, the company's conversion rates were not improving. This situation, mirrored by industry benchmarks from leading analysts, confirmed their concerns.
Jupiter Research reported recently that online retail marketers spend an average of 22 percent more than overall online marketers do ($148,900 vs. $122,200, respectively) on search engine marketing (SEM). Ninety percent of retailers that deploy SEM do so with the primary goal of generating immediate sales on their Web site.
Across the board, online search marketers report a consistent click-through rate of just three percent. Although, in total, online retailers buy 63 percent more keywords than overall online marketers do, the two segments tend to experience the same low click-through rate.
A recent study (May 2006) by SEM Analytics shows that the Google Ad rotation
was "mis-optimizing" the ad rotation about half the time - with some
of the worst results reported. Google optimizes only on click-thru, not conversion.
Ad qualification is at least as important as click-thru and an essential ingredient
in helping on-line advertisers understand which creative works and what doesn't.
Increasing site visits alone does not guarantee subsequent customer conversion. Even though online retail sites have evolved and matured, most consumers who come to those sites just don't purchase - in other words weak conversion rates continue to plague online retailers. Forrester recently published that retailers post an average conversion rate of just 2.6%, with some verticals averaging well below 2%.
Following initial sales onsite, the conversion cycle continues with up-sell, cross-sell and ultimately retention. According to recent data from WebSideStory, Inc. (NASDAQ: WSSI), a leading provider of enterprise analytics solutions, repeat visitors are eight times more likely to click the order button than new visitors.
Solution
Realizing their challenges were more complex than simply increasing media impressions
and page visits, the company teamed with [x+1] to help simplify their online
marketing process for both online advertising and onsite conversion.
Deploying
[x+1]’s turnkey conversion solution helped the company focus on optimizing
the four distinct stages of the Continuous Conversion Cycle that require real-time
optimization:
- Engaging ideal audiences with relevant real-time material
- Acquiring customers with personalized site content and offers
- Up selling customers and
expanding the business relationship
- Deepening relationships to develop brand
loyalty
The ease of an [x+1] implementation began with a current campaign in
place. Over a brief period, [x+1] technology built audience clusters using information
from page tags, ad network and search data, behavioral data and third party geo-demographic
data.
Led by industry veterans from established firms like Accenture and Digitas,
the [x+1] team combined the clusters with the company’s own business rules,
constraints and conversion requirements for the campaign.
Then, in real time,
the [x+1] solution examined and analyzed hundreds of thousands of behaviors in
less than a third of a second before selecting and delivering the offer and creative
that best fits the consumer’s interest.
Results
- Display advertising with [x+1]'s media+1 outperformed all other sites' minimum by 10 to 1 both in terms of eCPA and volume.
- Display advertising became the most efficient channel over Google AdWords, delivering twice the volume at one-third lower cost.
- On-site conversion rates with [x+1]'s site+1 averaged 40% to 55% higher than a control group that wasn't optimized.
- Average monthly ROI with [x+1] is 258% (for every dollar Aquedux earned in the control group, $2.58 was earned in the optimized group).
Instead of plowing through hundreds of reports and slicing and dicing data cubes, the company's marketing team now spends their time making strategic decisions such as interpreting segment profiles, creating better offers and designing visual elements that are more relevant.
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