Step 1: Navigate to Crate & Barrel, put an item in your shopping cart and abandon the transaction.
Step 2: Navigate to pretty much any Entertainment site on the internet. The more borderline the better – since these sites do not have their own sales teams and do not have the contextually relevant content that command strong CPM’s from the adnets / advertisers.
Step 3: See a Crate & Barrel ad served from Google (probably indirectly through Adx).
I wonder if Crate & Barrel is ok with their ads serving on sites like Evilmilk.com and wwtdd.com? I’m sure the inventory is cheap to the adnet (facilitated by Google Adx) probably $0.25 – $1 CPM (to Evilmilk.com). At that price and with re-targeting it probably converts incredibly well. Everybody is making money.
What’s the problem?
Crate & Barrel is most likely paying $2.50+ CPM for these re-targeted IMPR’s no matter where the adnet is finding the user. The adnet is likely making a very strong margin between what they are paying for the inventory and what Crate & Barrel is paying them. These being re-targeted users the ads are likely driving strong sales and ROI; especially when compared to a less targeted ad and/or an IMPR at a higher CPM (on a more premium site).
Effectively more premium IMPR’s on safer sites are more expensive and are less valuable in terms of margin to the adnet. These borderline entertainment sites are exactly the site inventory where the adnets make the most money – this is where the most revenue can be captured (margin) between what the advertiser is paying and what adnets have to pay publishers. 50%, 60%, 70% margins – this what arbitrage and being an adnet is all about – this is optimization.
Living with Contradiction
In the offline as opposed to online you don’t find Crate & Barrel ads on the Howard Stern show, Maxim Magazine, Spike TV, or the National Enquirer. You could argue Crate & Barrel customers read Maxim, listed to Howard Stern, watch Spike and read the National Inquirer; and with a little data Crate & Barrel could reach their customers here. But Crate & Barrel does not buy advertising on borderline entertainment content in the offline.
Is this just a technology thing? Once radio / TV / Paper / Magazines all have an IP addresses and Cookies will content no longer matter? Hello Ipad, WiMax, 4G, Boxee, and Internet Radio.
Maybe there is something else / Maybe brand matters?
From what I can tell Crate & Barrel has made a tremendous effort to keep their brand premium in TV and Print mediums; I wonder if Crate & Barrel knows that their display ad strategy (by design) pushes ads to the lowest common denominator / lowest CPM content.
The question has to be – is it worth risking your brand image running brand ads on borderline content if this is where your audience is / if this is where the best ROI can be achieved?
Nobody clicks on an ad to buy a car; but that is exactly what many (most – let’s be real) brand advertisers and agencies demand in terms of campaign performance – to justify renewals.
Without a conversion event; most all campaigns are evaluated through the prism of the click – simply because we don’t have anything else to easily measure. But nobody clicks on an auto ad to buy a car – the attribution model is broken.
The following Auto ads (screenshot) ran a few weeks back on my CelebrityMilkshake.com site powered by Google AdSense. There was thumbs up / thumbs down voting built into the ads.
Could a valid attribution model be as easy as thumbs up / thumbs down? Think about it (Google is); could something this simple help validate brand campaign performance?
Have you ever wondered why sites like Pandora.com seam to know who you are – even if you deleted your browser cookies recently?
Up to 100k, difficult to find, non transparent, non expiring, not cleared by any browser “Clear / Delete Cookie” functions – Flash Cookies are oh so very sweet for collecting data – so much better than plain old browser based Cookies.
I have heard the stories of ADNETS using Flash to re-spawn browser cookies when a user deletes their browser Cookies; but I had no idea just how many sites are using Flash Cookies for tracking.
Viewing my own Flash cookies (hundreds of entries) I identified no less than a dozen ADNET’s, ad servers, and online marketer cookies. My bank is even using them – they don’t even have flash on their site… Check Your Flash Cookies yourself…
Want more… check out this wired article on Flash Cookies.
I started reading Shoptimism by Lee Eisenberg a few days ago. I have only gotten through 50 pages – but so far it’s an interesting read on consumer marketing. An early section on the work of Vance Packard and his exploration (in the 1950’s) of consumer motivational research by social scientist working for advertising agencies reminded me of an incredibly insightful (and somewhat frightening) PBS FrontLine documentary on the same topic. If you have not seen The Persuaders – it’s mandatory viewing for anyone interested in advertising and if your not living off the grid on some atoll in the South Pacific you should be interested in advertising right now.
With respect to Online Advertising check out the narrowcasting section and how marketers and political parties have been working with data vendors (Axiom in this case) to customize their packaging / messaging for every consumer segment – with all the recent talk in the ad industry about customization, personalization, the consumer in charge; makes you think.
Because of my job (which really has little to do with building e-commerce sites) friends and family in the offline retail space commonly asked me “how do I build an online shopping site”.
Actually, I have built a few of these sites over the past 10 years (www.velopro.com, www.vintagecotton.com) so I guess I have some background; at least I know some stuff about what not to do. Here are some helpful links / ideas about the topic I have come across over the past few years that may help someone out there on the interwebs.
Although I am providing several options – IMHO the most important thing about an online store is the relationship created with your customers / users. Focusing on this relationship is key to success – no matter what technology you are using. I would suggest using the 3rd party shopping sites and a fully hosted store, this will enable the business to move forward quickly. You can always build your own system later as needed. Most online shopping sites (most online businesses for that matter) never get to market; they fail before they ever sell anything online. It makes sense to build up the actual business first.
3rd Party shopping sites:
Even if you have your website, you will want to sell on these sites to acquire leads and customers which you can redirect to your own site / put on a newsletter for future sales. The cheapest way to acquire a customer is to get an existing customer to buy again.
Fully hosted online stores:
Building a commerce website, dealing with project managers, coders, renting webservers, working with security and credit card vendors to support credit card transactions is a whole lot of work. Why not let someone else do this for you behind the scenes and focus on your core business. These are great services that are subscription based.
Online Store Platforms:
If the hosted store does not offer you enough flexibility, you can get your own server and use an off the shelf platform to build up your store. You will still need to work with a coder, credit card vendors, etc. but this is much less work than building a system by yourself. There are coders that specialize in these systems and can build up a store for you in a week or so of work.
Online Store from Scratch:
Sometimes an off the shelf system will not do. If you have ideas / features that are not available with of pre-existing services / products you need to build it yourself. This is not going to be a trivial task, you will need to mock out all the functionality, lease webspace, hire a coder, and make sure the coder implements what you have asked for. Or you could take 3-5 years and learn to code in your spare time like I did (not recommended). Either way, there is a whole lot of work here, it costs a lot, and something is always going wrong. But in the end you have exactly what you dreamed up.
SitePoint has a good post on this topic at: http://www.sitepoint.com/blogs/2009/12/07/hosted-shopping-cart-solutions/
Dear SnapNames customer:
I’m contacting you today to inform you of an unfortunate incident at SnapNames, and to let you know what the company is doing to address it.
Recently, SnapNames discovered that an employee had set up an account on the SnapNames system under a false name and, under this name, bid in SnapNames auctions. This is a clear violation of our internal policy and was not approved by the company. We deeply regret that this conduct has impacted our customers.
Extent of impact
This conduct affected a small percentage of SnapNames auctions:
• Bidding affected approximately five percent of total SnapNames auctions since 2005, most of which occurred between 2005 and 2007.
• The incremental revenue from the bidding represented approximately one percent of SnapNames’ auction revenue since 2005.
No matter the level of impact, SnapNames takes this matter extremely seriously. When the matter was discovered, the company immediately closed the account in question and began a thorough investigation. The employee has also been dismissed from the company.
SnapNames further discovered that, on certain recent and limited occasions, when the employee won an auction, the employee secretly arranged to refund from SnapNames to the fictitious account a portion of the winning bid amount.
Remedy to affected customers
Though on some occasions the employee won the auction, in many instances the bidding caused the ultimate auction winner to pay more for a name than had the employee not participated in the auction.
SnapNames neither condones this conduct nor wants to be perceived as benefiting from the conduct. Accordingly, we have decided that regardless of the circumstance, in every auction where the employee’s fictitious account submitted a bid which resulted in a higher price being paid by the winning bidder, SnapNames will offer a rebate, with 5.22% interest (the highest applicable federal rate during the affected time period), to affected customers for the difference between the prices they actually paid and the prices they would have paid, had the employee not bid in the auctions. The rebate will be available in cash or in credit on the SnapNames platform, at your discretion.
SnapNames has moved quickly to address this situation. The company has retained Rust Consulting, an independent third party, who will administer the rebate offer. Within the next week, Rust Consulting will contact affected customers to provide details regarding the offer.
Your business and ongoing relationship are important to us and we can assure you that we have taken all necessary steps to ensure the integrity of the platform and reinforced controls and procedures to avoid any possibility of further breach. These include:
• Enhanced monitoring of bidding activity for suspect behavior
• Additional controls over financial transactions
• Specific domain name registration policies for employees
In the meantime, if you have any questions, you may consult the FAQs here, or contact the SnapNames support team:
By e-mail: firstname.lastname@example.org
Phone: +1 (866) 690-6279 (toll-free in the U.S.)
+1 (503) 241-8547 (outside the U.S.)
SnapNames, and all in the Oversee family of companies, are deeply disappointed with this incident. Since its founding in 2000, SnapNames has been committed to the principles of fairness and trust; the company wants to assure customers—through both words and actions—that it remains committed to those principles.
Thank you again for your business, and for your ongoing trust in SnapNames.
Jeff Kupietzky Craig Snyder
President and CEO General Manager, SnapNames.com
1600 SW 4th Avenue, Suite 400
Portland, OR 97201