B2B/B2C online strategy and enterprise eBusiness blog

In a tough economy, advertising dollars are typically the first to go. On the flip side, in a flourishing economy, advertising dollars seem to be readily available without needing much justification or proof that the advertising will pay off. Why is this?

Many advertisers have no methodology for measuring the effectiveness of their ad campaigns. In a flourishing economy, taking risks with a low probability for success is often encouraged in hopes of the big pay-off. In a tough economy, investing in anything (advertising, R&D, etc.) will require a great deal of scrutiny.

At SES NY in ‘06 I attended an invite-only dinner with WebTrends with a group of about a dozen online marketers — some existing clients of WebTrends and some were potential clients they were wining and dining. One of the dinner guests I sat next to was Rex Briggs, co-author of What Sticks.

For anyone who thinks “advertising cannot be measured,” I would recommend reading this book. It covers concepts that online marketers should hold close to their hearts: Test, Learn, Deploy, Repeat. Many traditional marketers are used to deploying large budgets on print and TV advertising with no plan or budget to measure the effectiveness of the ad spend. They excel at developing the creative, but fail miserably when it comes to answering the simple question of “Did it work?” 

In the online world, measuring ad spend becomes somewhat easier with the various tracking technologies (particularly if you sell online). If you can definitively prove how advertising positively impacts sales (directly or indirectly), then you’ll most likely see your ad budgets remain flat in a tough economy, but not entirely eliminated like some marketers are experiencing this year.

AuctionAds.com (which we’ve been running on SuperMotors) was purchased by Media Whiz last week.

This makes me happy because we’ve been running AuctionAds for about a month and while initially we were receiving a 1.5% CTR, these days it’s down to a paltry 0.58% CTR. We are still serving the same amount of unique visitors and traffic to AuctionAds which suggests their caching system is drastically suffering. We dynamically supply keywords to the AuctionAds code to generate eBay ads that are closely aligned with the content being viewed on various pages of SuperMotors. The end result, when it works, is a highly-relevant ad which in the beginning, generated 1.5% CTR. In the display advertising world, this is quite high.

Media Whiz also owns Text-Link-Ads.com, which is a highly reliable service (albeit completely different technology) with great support. With 100% ownership over AuctionAds now, I hope they can take AuctionAds to the next level of service that it desperately needs to be a success. Right now, we continue to run the ads because they do not replace our existing ad inventory.

When AuctionAds can’t find a match, it displays the “most popular” eBay ads which typically end up being Coach handbags and designer purses — hardly relevant to our demographic of automotive enthusiasts. The continued success of AuctionAds will be an improved caching system first and foremost before any other bells and whistles. Once they nail the caching system down, then it will be almost like printing money.

This afternoon we received our beta acceptance (which we applied for a couple weeks ago) e-mail from ADSDAQ:

This comes at a perfect time for the ad networks we’re now involved with on SuperMotors. In the past week, we have signed on with Casale Media and CPX Interactive (on top of Tribal Fusion, AuctionAds, Google Adsense, and our own in-house ads).

What’s also interesting is experiencing the different interfaces each ad network has developed. Tribal Fusion’s is very, very outdated and lacks reporting and information that I’d really like to see. However, according to this article, it looks like a new campaign manager is on the way for Tribal Fusion.

I’m really excited to put the ADSDAQ system to the test and help it centrally manage all of our ad networks while simultaneously maximizing our revenue potential. I’ll post more feedback on ADSDAQ after the beta period starts as well as my experience with Casale and CPX after we have a couple weeks of traffic under our belt with these two additional ad networks.

Tribal Fusion continues to be our #1 performer to date. I’m looking forward to seeing if these other networks give Tribal Fusion a run for their money. Even if they don’t, we will have a much more diverse ad network strategy, which is always a Good Thing.

I received an invitation today to apply for the new ADSDAQ ad exchange. I signed up for notification a couple months ago but had not heard anything until today.

The concept is very intriguing and I am excited — hopefully we can get SuperMotors in on this. The premise is that you set your CPM, they guarantee they will display ads at the CPM you specify, if they can’t, they will distribute impressions to the other ad networks on which you are already a member (i.e. Tribal Fusion, Google AdSense, etc.). I’ll review the steps here that they outline on their site:

Step 1: Set your desired CPM
This will take a bit of strategy and testing, I’m sure, but setting the CPM at which you will display ads on your site is a very nice model. ADSDAQ will then match you up with advertisers matching your site’s demographic and choose the best performing ads to display on your site. Of course, this also means advertisers will also be able to specify their desired CPM, so don’t count on getting ridiculous with your CPMs, as it’s ultimately the advertisers who will be driving the pricing.

Step 2: Define your existing ad networks
We already use Tribal Fusion, Google AdSense, and AuctionAds. The dilemma we face is Tribal Fusion is our primary ad network, yet they only fill 71% of our available inventory we supply them. The remaining inventory goes to Google AdSense, which as we all know, is a CPC (Cost-Per-Click) ad network, and not a CPM network. In other words, we only get paid if users click on ads, not if they simply see the ads. AuctionAds (AA) on the other hand requires custom keywords that we dynamically supply on pages, so we really don’t run these in our standard ad rotations, which is fine — AA performs very well in the locations we currently have it implemented.

Maximizing revenue on excess inventory
So, enter ADSDAQ. It can act as our primary ad network. We analyze the CPM at which Tribal Fusion is paying us, we bump it up by a small margin (or even set it equal to Tribal Fusion’s CPM) and set this as our CPM for ADSDAQ. If ADSDAQ can’t fulfill inventory at this rate, it’ll distribute ads to the Tribal Fusion ad network. The key for us is filling the remaining 29% of our inventory with something more profitable than Google AdSense ads. This is difficult to do with other ad networks that are available because the Google ads perform fairly well.

The Big Assumption
This model of course assumes ADSDAQ can fulfill inventory at a higher price than Tribal Fusion. If it can’t, we will most likely reverse the model and still utilize Tribal Fusion as our primary network, have it load ADSDAQ ads at a lower cost (when it can’t fill our inventory), and have ADSDAQ display AdSense ads when all else fails. In any case, the ability to control ads based on CPMs we define is very desirable, and has the potential to be extremely effective for site owners who are strategic about it.

The other day we started experimenting with AuctionAds.com’s real-time, targeted eBay auction ads. What I didn’t realize was that I could supply any keyword in the AuctionAds (AA) code so that the keyword would generate eBay ad links in real-time as the AA ads were served. So, I was setting up individual ads in their campaign manager for 1978 Ford Bronco, 1979 Ford Bronco, 1980 Ford Bronco, etc. I was testing the ranges of years that Ford Broncos, Ford Excursions, and Ford Crown Victorias were in production (70’s, 80’s, and early 90’s). This mean for a lot of ads and a very time-consuming setup process.

Then I read about their WordPress plug-in. All this was was a way to allow WordPress users to dynamically insert keywords into the AA ad code. This provided even more relevant ads for bloggers because they could provide keywords that were relevant to the post/article they were writing.

So, we did something similar on SuperMotors. Instead, we dynamically insert targeted keywords based on the year/make/model or make/model of a registry entry, album section, or individual image or video posted by our user (you may need to scroll down on a couple of these links to see the AA ads). This eliminated my need to individually setup ads in our AA account, so I simply created a global campaign in our account that these targeted ads would run under. Targeted ads (on SuperMotors) have always outperformed generic ads by leaps and bounds with our visitors. Since the automotive crowd are generally heavy eBay’ers, we are hoping with this tighter, more strategic integration of ads throughout the site, that we see increased click-through rates and revenue.

High Click-through Rate (CTR)
We are pleased with the 1.55% CTR thus far during our test. Now that we have an expanded implementation of AA ads, we’ll see more impressions (and presumably a slight drop in CTR). Regardless, due to the highly-relevant ads, the CTR of 1.55% is much higher than Google (which ranges from 0.10-0.15% CTR on a daily basis for us). Many of the automotive items are higher-ticket items, so we should also see a fairly decent revenue share on items sold.

More updates on AuctionAds.com as we get further into the month.

As a result of reading the hype around AuctionAds on this post, we’ve added AuctionAds to the SuperMotors ad system. Our experience with programs like Commission Junction have yielded no revenue, which is surprising considering our ability to specifically target our site visitors with ads that are highly relevant to the vehicle information they are viewing on SuperMotors.

However, I’m hoping for better results with AuctionAds because we have the ability to create very targeted ads that are relevant to what our visitors are looking at on SuperMotors. For example, I created a campaign for “Ford Bronco” and am able to setup individual, targeted ads in AuctionAds for each keyword I want. So, to start off, we are have ads running that target “1978 Ford Bronco,” “1979 Ford Bronco,” …all the way up to 1996 Ford Bronco.

Highly Targeted eBay Ads with AuctionAds
With the ad system we’ve built on SuperMotors, we can serve up ads targeted to the year, make, and model of content being viewed on the site. So, if you link to a page like this (a picture of a 1988 Ford Bronco), you’ll be able to see the relevant eBay ads served up by AuctionAds for 1988 Ford Bronco items (You may need to refresh the page depending on the rotation of ads — we’re only serving up 160×600 AuctionAds at this time).

Our fingers are crossed that these highly-relevant ads translate to clicks and sales. We’ll run this test for 2-3 months and slowly expand the selection of AuctionAds and year/make/model targeting we do. My favorite feature is the ability to specifically select the keywords in AuctionAds, so you know you will get relevant results based on where you’re running your ads on your own site. This makes it an incredibly powerful tool for us — provided that it produces revenue, of course.

And just like that, Google buys DoubleClick for $3.1 Billion. There are many naysayers about this deal but as an advertiser, I love it. If Google can integrate the DoubleClick ad network into their existing ad management tool, this will be huge. Last week I attended an executive dinner hosted by WebTrends which had a few prospective clients as well as existing clients (like myself). During our discussion, we got on the topic of managing banner advertisements alongside SEM campaigns.

Tying SEM to Banner Advertising (and vice versa)
For someone like me who wants to show banner ads to people who have previously searched for terms, this is huge. Tying search to banner campaigns has been the missing link. As web marketers, we know that banner ads have an impact on search. We also know that people who search are checking out multiple sites, comparing prices, comparing features, and trying to get as much information as possible about a topic. As a brand advertiser, we can now start to merge our online strategies for banner ads and search marketing into one comprehensive, intelligent campaign. This benefits us from a budget standpoint, but will also help us target consumers to give them the most relevant advertising as possible.

Privacy advocates of the world unite in horror
The privacy advocates will certainly be opposed to this, but that’s fine — I trust Google enough to Do The Right Thing. That said, this now opens the door for companies like WebTrends and their Dynamic Search product to fully integrate banner advertising into their product since it will be part of a search engine. Of course, it will probably be a while before there is a central management interface for DoubleClick and Google AdWords, but a guy can dream, can’t he? I really look forward to the day I can tie banner advertising and search engine marketing to actual data, to see how one effects the other. Then we can start getting a true understanding of how our entire online advertising strategies are performing — from e-mail, to banner ads, to search ads.

Banner Advertising will become accessibile for small businesses on a limited budget
Let’s also not forget the network of sites Google has now “purchased” to run ads on. This may be an extension of banners available to AdSense customers, too. Sprinkle in video ads and the YouTube aquisition and Google has one powerful empire of online advertising. If they do it correctly, they’ll even make it accessible to the Common Man so small businesses can compete with the big guys. For online publishers, it will hopefully become easier to focus on producing a quality website without having to play the balancing act with several ad servers, Google AdSense, in-house ad sales, etc. to generate the most revenue. This is the quandary we’re (SuperMotors) in right now. Who has the time to constantly adjust pricing floors on various ad networks each month depending on the inventories of the various ad networks? Not us, but we have to do it anyway. It’s a never-ending battle.
It’ll be an interesting year for online advertising.

While Friday still remains at SES NY ‘07, it feels like today (Thursday) was the last day. I sat in on several sessions all of which were focused around retail, search, advertising, and social media. The underlying theme of the day was looking at advertising from multiple angles and how it can help build/elevate your brand. My notes from the day are very scattered so I’ll do a recap with my own thoughts as well.

Online SEM Channel Strategy - What to do?
As I evaluate our online channel and the fact that it is like the Wild West right now, I am presented with the following dilemma:

1. As a manufacturer, we want to protect our brand name. In fact, leveraging our brand is a corporate initiative, and it should be a differentiator when people shop for blinds and shades online or offline.
2. Our products are sold in different channels: Big Box, Independent, and Online. Online presents the biggest challenge because our brand name is used to drive traffic to competitor websites. This is an easy problem to fix thanks to our legal department. However, the more interesting and complex issue is how to work with our online retail partners to get a win-win situation: we want to “own” our brand name, yet our retail partners need to advertise our brand name. What’s a consumer to do?

I don’t have all of the answers yet, but have some ideas (which I will not discuss here). The more important point is that we have retail partners who are advertising our brand name, essentially free of charge. In the blind and shade industry, brand names are either very well known, or completely nonexistent. It’s really a hit-or-miss vertical. With that said, once you start rolling in banner advertising, offline advertising, PR, social media marketing, etc. to create that brand awareness, then the online retailer SEM takes a whole different role.

Where does SEM live in the sales/conversion funnel?
There are essentially two types of searchers:

1. Consumer searches for a specific product name (sometimes including a brand name)
2. Consumer searches for generic product name

Consumers who fall into bucket #1 are further along in the sales funnel. They have been pre-disposed to your product and are more or less “in the market” now and ready to spend their money. I would argue that these consumers represent an “easier” conversion to a sale and that your SEM budget should focus heavily in this area.
Is SEM a marketing tool or a sales tool?
Consumers who fall into bucket #2 are the people who blur the lines of SEM. Is SEM a marketing tool or a sales tool? Or is it both? People using generic search terms may not have a brand top-of-mind, but if they see advertisements relating to their search that mention a brand name, they may be more likely to resonate with those ads. This is particularly true if you have other advertising and marketing in place such as banners, offline ads, PR, good social media penetration, etc. Now, combine the power of the “stickiness” of brand advertising with the online retailers who also sell our products and we’ve got an interesting situation.

Generic terms may not immediately convert, but they may be attributed to future conversions
The problem is that it’s hard to tie sales to generic search terms. They may not immediately convert, simply because the consumer falls a little higher in the sales conversion funnel and may not be ready to purchase right then and there. Unfortunately for us, too, the sales cycle is much longer for custom blinds and shades (due to ordering samples online, waiting for them to arrive, and also because of the higher price point of custom products).

Who’s to say, though, that a generic term didn’t ultimately drive the consumer towards purchasing your product at a later date. What if they came back to the search engine, looked for another term or even used your brand name this time in their search phrase, and ended up purchasing on your site (or retail partner site)? It’s certainly doable to keep track of the initial click or keyword/phrase that drove the consumer to your website for the first time. But it’s also very hard to measure the effectiveness of SEM with other “outside’ influencers such as more traditional advertising.

Fortunately, I will be able to run a baseline test of SEM for 1 to 2 quarters without any other external advertising (other than normal monthly promotions, etc. that we would normally run). I anticipate a lift when SEM begins to clicks to our website (and hopefully sales through retail partners), but even more so do I expect this when we start advertising via more traditional means. I will really be interested to see if it drives a higher conversion rate on the same SEM campaigns I had been running.

It’s hard to say, but fortunately I have tools like Omniture SiteCatalyst and WebTrends Dynamic Search to help me manage it all.

Creating the right blend of advertising - avoiding advertising silos
The ultimate goal is to create the right blend of advertising so SEM is converting at its highest possible rate when balanced with the correct amount of banner advertising, offline advertising, PR, social media, etc. I think the main problem with advertisers today is that they are looking at everything in silos. PR is measured in impressions — but how is it correlated with sales? Banner ads are measured in impressions, click-throughs, and conversions — but how do banners influence search? How does leverage social media influence customer satisfaction and repeat business?

There are so many variables that go into the marketing, management, and maintenance of a brand. Pile this responsibility on top of having to actually creating, produce, and maintain new product development and you’ve got your hands full.  Do it well and you’ve got a well-oiled machine with new product development and marketing playing off each other. Do it poorly, and you’ll find yourself in a very disconnected business with poorly performing sales funnels and weak innovation and new product development.

In regards to yesterday’s post, Tribal Fusion did respond to my e-mail inquiry with the following:

I appreciate your willingness to work with us in maintaining our standard of quality content. To answer your question on how we could potentially work together on user-generated-content, there are two possibilities:

1. All content would be reviewed by staff before it is published live on the site.
2. As you mentioned, YouTube does allow users to flag content as “inappropriate”, and then reviews all flagged content. However, they also mark all uploaded content as inappropriate until it has received a certain number of views. If, in that time, no user flags the image, it is marked as safe. If a user does flag the content, it is pulled and reviewed.

This is good news for us and also a good indicator that they are willing to work with social media sites. We’re working towards a “flag as inappropriate” feature a la YouTube for our user-generated content. More on this as we continue to work with Tribal Fusion. For now, we’re on the right path towards getting back on their network.

At the risk of poo-pooing any chance at rekindling our relationship with Tribal Fusion, we (SuperMotors) were taken back by an e-mail we received from our (new) account executive on Friday morning, February 16th and 3:23 AM. In what appears to have been a standard form letter used to contact sites that have “fallen below the standards of the Tribal Fusion ad network,” we were notified that adult content was found on SuperMotors.net and that this was in fact a violation of the Tribal Fusion Terms of Service. This as the first such notification in our almost 5-month relationship with Tribal Fusionnnn.

Fair enough. They have every right to be monitoring the quality of their websites and I applaud them for enforcing this. This is what we received:

Hello Eric,

I am contacting you because it is our belief that the quality of the content on SuperMotors has fallen below the standards of the Tribal Fusion ad network. In particular, the content found on these pages:

(page link removed)

Content like this is a violation of our publisher contract; and as a result SuperMotors has been removed from the Tribal Fusion Marketplace and we are currently serving only defaults or PSAs. We value the relationship we have had with you up to this point, and if you would like to speak with us regarding ways to potentially continue working together, please don’t hesitate to contact me. Otherwise, I have to ask you to please remove Tribal Fusion’s ad code from the SuperMotors website and/or from your adserving system by the end of the week. Failure to do so will result in broken images appearing through our ad tags.The clause in our publisher contract for termination (for your reference):

6.2 Termination. Publisher may discontinue participating in the marketplace after the initial term by providing 30 days written notice to Tribal Fusion™. However, Publisher has an obligation to fulfill any advertising campaign configured to run on their site in its entirety prior to termination. Tribal Fusion™ may terminate a Publisher’s participation at any time if Publisher’s website quality falls below the standard set by other websites in the marketplace, fails to deliver the minimum number of impressions, or if Publisher fails to comply with any other provision of these Terms and Conditions.

2.2 Right to Refuse. Tribal Fusion™ reserves the right to refuse to accept any publisher at its sole discretion, as a member of the Tribal Fusion™ Marketplace. Publisher websites shall not contain (or have direct links to) any content deemed inappropriate by Tribal Fusion™ at its sole discretion, which includes but is not limited to the following: content promoting the use of alcohol, tobacco or illegal substances; sex, pornography or adult-oriented content; violence, expletives or inappropriate language; content promoting illegal activity such as copyright infringement, racism, hate, mail fraud, spam, pyramid schemes, investment opportunities or other advice not permitted under applicable law; content that is libelous, defamatory, contrary to public policy or otherwise unlawful.
Should you have any questions regarding this issue, feel free to contact me

Since adult content is also a violation of our own Terms of Service, we immediately removed the material referenced in the link they provided us (which had been available online for less than 24 hours), issued the offending user a “strike 1″ (we utilize a “3 strikes and you’re out” policy for our users) via e-mail, and responded to Tribal Fusion informing them the matter had been resolved. My follow-up e-mail:

Thank you for bringing this issue to my attention. We have removed this photo as well as another photo from this user’s account that were in violation of our terms of service as well as Tribal Fusion’s. We take issues like this very seriously and have sent the user a warning about posting future content like this.

SuperMotors.net is a site with user-generated content. Due to the volume of newly posted photos every day, it is impossible for us to monitor each and every photo, sound, and video for quality. For this reason, we rely on our members to help us police other user-generated content (pictures, sounds, videos, comments, forum posts, blog entries, etc.). We have a clause in our terms of service which specifically states that adult content is not allowed to be posted and if it is, it will be deleted and a warning will be issued to the user. If the user is found to violate this rule a second time, their account is temporarily suspended. A third time results in permanent account deletion, along with all of their posted content.

The image at the URL below was posted on 2/15/07, less than 24 hours ago. I hope that we can be reinstated and continue to be a part of the Tribal Fusion ad network as we have now resolved this issue as soon as we were made aware of it.

To our surprise, there is no leniency. My intent on this follow-up e-mail was more to issue a formal apology and to state that, “Yes, hosting adult photos is not how we do business, nor is it something we permit.” The response from Tribal Fusion:

Unfortunately we cannot have our ads running on unmonitored user-generated content. We have looked at your site more closely and have found numerous pages with this type of content. Because of this, we will be forced to deactivate your account. I have decategorized your site so you should now be showing either PSAs or the defaults you have set up in our system. Later today, I will have to deactivate your account completely. At that time you will serve error messages.

I apologize for the inconvenience.

So, in a span of just 12 hours, this revenue source has completely gone away. While Tribal Fusion isn’t our primary source of income, we are diversified enough among our own sponsorship dollars, subscribers, and Google AdSense, it still is an unplanned loss of revenue especially entering a weekend on a record-setting month for us. Revenue is still revenue, and we really take this seriously. Finding another ad network is not only time-consuming, but really painful when a company like Tribal Fusion is regarded as one of the best in the industry. How and why would we want to switch in the first place?

I did some further digging and looked other sites in the Tribal Fusion Automotive Channel. One of them is YouTube.com. I proceeded to reply to the message above explaining that even YouTube.com, backed by Google, is unable to deal with the overwhelming demand of user-generated content. They do their best by implementing a “report as inappropriate” link on every posted video to allow the community to help report offensive content. We’ve all seen the headlines that YouTube has droves and droves of copyrighted material. There currently isn’t a magic formula to policing user-generated content other than providing the necessary tools for the community to report inappropriate content and to deal with it in a timely manner (if you or your staff don’t discover it on your own).
Another site, which shall remain nameless, has one of the racy Tribal Fusion Ad Network Ads for True.com dating service running on a page where there is a link to view illegal street racing videos as seen in this screen shot:

It just seems that we are being held to unreasonable standards when other sites on the Tribal Fusion Automotive Network are obviously violating the Terms of Service. We fixed the problem on our end in a timely manner and are more than willing to work towards a better solution that will keep Tribal Fusion happy and more importantly, their clients (advertisers) happy.

I’ve asked Tribal Fusion how we can strive to meet their standards for providing sufficient moderation for on a user-generated content site. Unfortunately, our account exec is unreachable for the next two weeks, so I will be attempting to get a hold of another account exec this week to see if we can’t come to an agreement. It really seems like this is a misunderstanding. Maybe my e-mail was interpreted as “we don’t moderate our user-generated content?” Regardless, we can modify our moderating policies and procedures to meet Tribal Fusions needs. I just hope they are open to making this consideration.