ChoiceStream

Evan Schuman from Storefrontbacktalk.com recently challenged one of the key findings of the 2009 ChoiceStream Personalization Survey. In his article, Social Media E-Commerce: Just Because It Can't Be Measured Doesn't Mean It Doesn't Exist, Schuman takes issue with our conclusion that while m-commerce appears to be a hot spot for product recommendations in 2010, social networking is not. That conclusion was based on the fact that only 8.5% of our survey respondents who belong to a social networking site reported that they had ever made a purchase while on the site. And, only 27 percent indicated any interest in product recommendations from trusted retailers.

Schuman contends that we missed the point because social networking sites were never designed to be e-commerce sites. They're places where friends discuss their lives, work, hobbies and, in the process, end up influencing each other's shopping decisions that take place outside of the network. He claims that just because shoppers aren't physically clicking 'buy it' from within a social network, retailers shouldn't ignore social networks as a place to have a presence.

We actually couldn't agree more that the interactions shoppers have with each other on social networks influence their shopping behavior and purchases. What the survey indicated is that retailers need to think long and hard about the kinds of investments they're making in social network advertisements and product recommendations, specifically. The numbers showed that while some people do happen to make a purchase while engaging in social networks, most are not ready for retailers to push product recommendations at them.

That's not to say a purchase isn't influenced by the things they are seeing from friends, fan sites and brand engagement campaigns. It simply means they don't want retailers bombarding their pages with links and ads, as is pointed out in the story. Thus, it remains our advice to retailers that they not invest in this type of direct-response marketing initiative right now, allowing consumers to engage with the brand on their own terms. For 2010, personalized recommendations and promotions are better suited where consumers are actually looking for them — online and mobile.

What are your thoughts? Would love to hear from retailers how they're leveraging social networks. How is your social networking strategy playing out?

2009 may not have been a banner year for e-commerce, but it was great for smartphones. According to Carolina Milanesi, research director at Gartner, smartphones are the fastest-growing segment of the mobile devices market with no slow-down in sight. And, they're not just for phone calls and email anymore. 37% of users reported that they used their device to buy merchandise in 2009¹.

So, what does all that have to do with personalization and recommendations? A lot, actually.

We just released the results of the 2009 ChoiceStream Personalization Survey and one of the most interesting findings to come out of it was the fact that consumers want product recommendations on their smartphones to help them find products to buy. 65% of respondents said that they would buy more products on their devices if they got recommendations on them from retailers they trust.

Given the small screen size, it makes sense that shoppers don't want to have to surf lots of pages to find merchandise. Now that the consumer demand is there, it's up to retailers to improve the m-commerce experience and put relevant products and promotions at consumers' fingertips — literally!

Last week was a momentous one for ChoiceStream after it was announced that billion dollar online retailer Zappos.com has chosen ChoiceStream for personalized product recommendations for its shoppers. Then it was time for the Shop.org 2009 Annual Summit in Las Vegas where positive vibes were the norm — not the exception (see the accompanying photos).

Shop.org 2009 proved that online retail has survived — and even thrived — the economic storm and is beginning to feel reinvigorated as the holiday shopping season approaches. One of the more compelling stats underscoring this sentiment is that Shop.org’s organizers confirmed registered attendees were up 10% year-over-year from 2008.

At ChoiceStream’s booth, we saw a steady stream of interested retailers seeking to learn more about how ChoiceStream RealRelevance® Recommendations and Advertising solutions are increasing average order size, conversions and revenues for leading retailers while creating a relevant experience for shoppers that builds loyalty over time.

One of the highlights of the week was a guest appearance by Zappos.com’s Director of User Experience Brian Kalma where he discussed how vital personalized product recommendations are for Zappos.

Brian noted that not only do personalized product recommendations create a better user experience but they also drive measurable lift in incremental sales. Brian pointed out that recommendations driven by ChoiceStream have helped Zappos see a “nearly 30% increase in pages viewed per visit, a 12% to 13% click-through rate on recommendations and nearly a 3.5% lift in sales.” And that’s with recommendations deployed on only 40% of the site for a mere four weeks!

It was clear retailers both large and small are committed to providing a more personalized experience for their shoppers in 2010. And, as the “largest and longest-standing of the ‘pure-play’ personalization engines,” (according to Forrester’s Sucharita Mulpuru) ChoiceStream is uniquely poised to help retailers succeed by delivering personalized product recommendations and advertising that ultimately increase revenues!

One final note — many retailers said personalization was on the roadmap for the future — but it’s not too late to deploy personalization to positively impact holiday sales this year! Contact us to find out how.

ChoiceStream's marketing and advertising team celebrate with OverStock's Rob Gallaugher (center) and Nick Taylor (right)

Brian Kalma of Zappos (in checked shirt) details the positive results from personalized product recommendations using ChgoiceStream RealRelevance

Another Lucky Winner at Shop.org with ChoiceStream's Amy Vener

In-Booth Candid Photo (l to r) - Bryce Neal (ChoiceStream), Derek Mellencamp (Dell) and Bruno Sarda (Dell)

Some of the Zappos team savor their winnings at ChoiceStream's booth during Shop.org

Zappos Brian Kalma discussing personalization with a representative from Gap Direct

Choosing a personalization provider is a big decision. Find out why Zappos.com and other Top 50 retailers choose ChoiceStream. Stop by our booth (#114) at Shop.org at the Mandalay Bay Resort & Casino in Las Vegas and meet Brian Kalma, director of user experience at Zappos, and other leading retailers.

And don't miss our ChoiceStream Chip Giveaway! We'll be giving away hundreds of cash prizes. No purchase necessary. ;-)

See you in Las Vegas. And remember...what happens in Vegas, appears on YouTube. So, be careful out there...

The following post was originally published as a byline article on Adotas, a premier news publication focused on the Internet advertising and media industry.

As a reader of ADOTAS, you’ve no doubt heard the recent buzz around performance display advertising.

A striking departure from classic ad campaigns measured via clicks and impressions, performance ad campaigns rely on metrics that really matter to retail advertisers, namely conversions and revenue. To boost those metrics, today’s retailers are applying recommendation and targeting technology to display ads. With the in-market relevance of search and the reach of display, this type of performance display advertising is quickly becoming the preferred way to spend ad dollars — and new ‘performance metrics’ the only way to truly measure ROI.

There have been several ADOTAS articles recently that brushed the subject of performance advertising (articles by Zephrin Lasker and Chris Neuner come to mind) but it’s time to go a little deeper into what actually makes this type of display ad perform better, how best to measure its effectiveness and why advertisers need to welcome new attribution models. The holiday shopping season is nearly upon us – there is no better time than the present to get up-to-speed and start testing to find what works for you.

Contrary to what some might say, better display ads are not all about size, better placement and clever campaigns. Grabbing attention is only half the battle. The other half – the half that drives sales—is taking those creative display ads and making them relevant to each consumer who views them. What good is a perfectly branded, perfectly placed, creative ad if it’s for a product the consumer doesn’t need or want?

Regardless of the negative attention on behavioral targeting, research shows that consumers do want personalized recommendations to help them with their purchase decisions. The best performance solutions on the market today are the ones that merge personalization technology with display ads. These solutions rely on actual shopping data from advertisers to create ads with immediate, in-market relevance for each individual shopper. As more shoppers go online to look for deals and to research their purchases, e-retailers (Overstock, Zappos) and multichannel retailers (JC Penney’s, Staples) will look to this breed of technology to drive conversions and boost their sales both online and off-line.

The case for performance ad technology is clear, but it’s not only about finding the right performance solution. There are two other key factors that advertisers need to embrace in order to truly make an impact on ROAS:

Advertisers must make better use of shopping data to learn from every interaction with consumers. To capitalize on performance technology, you need to really understand each shopper’s tastes and preferences by analyzing all of the behavioral and shopping data you have available. That includes purchase data (both online and in-store), loyalty card transactions, online click and browsing behavior, etc. You’re missing a huge opportunity if you’re not learning from every engagement a customer has on your site, in your store and with your brand. It’s that precious data that enables personalization and creates unique occasions to purchase for each shopper.

Advertisers must use more robust performance metrics and models of attribution. Advertisers that focus solely on traditional metrics like clicks and viewthroughs are missing the big part of the revenue picture. Those metrics do impact ROI; but there are also other, less direct, metrics that are just as important. While every campaign should stand on its own in terms of direct performance metrics, understanding the indirect impact of display advertising is critical to making the best investment decisions when allocating dollars.

Quantifying metrics such as an ad’s impact on search engine traffic, social media buzz and message boards are all important in valuing ads correctly. For example, according to a recent study by Forrester Research, almost as many Internet users respond to online display advertising by performing a search on a search engine (27%) as by clicking on the ad itself (31%). This finding speaks to the symbiotic relationship between the two channels, and the power of display advertising to boost search engine traffic. If marketers are going to invest in online display, they should consider the broader impact of their campaigns to help them track their full value.

Unfortunately, this type of comprehensive attribution tracking is not the norm for online display advertising. These metrics can be hard to measure, but they’re not impossible. Online advertisers need to understand the value of measuring immediate, ad-specific actions (e.g., clickthroughs) as well as in-direct behaviors (e.g., performing an ad-related search on a search engine or message board). This will help advertisers come up with a system that provides correct attribution to their web marketing initiatives across the board.

There have been a lot of changes this year in the industry – it’s great to see performance-based advertising help advertisers go beyond the click and start paying attention to what actually drives results. The next steps are to ensure that we use all the data available to us to put the right products in front of the right shoppers and to fine-tune revenue attribution so that it provides a more comprehensive view of the impact of display ads. Once we do that, we’ll all be seeing display advertising in a whole new light.