ChoiceStream

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.

Pre-shopping online before buying in-store is a common consumer behavior that has grown rapidly over the last few years. According to BIG Research, 89% of consumers are doing this on a regular basis. It's also true that consumers who pre-shop online and buy in-store spend more overall than their counterparts who only shop online or in-store, but not both. Recognizing this, many multi-channel retailers are using the Internet to drive true sales performance. In this new ROBO (research online, buy offline) reality, the retailer's online advertising initiatives and web site activity plays a very important role in influencing the eventual in-store purchase.

Unfortunately, though, the ability to measure the impact of ROBO on revenue has not caught up with consumers' use of this practice. The success of this interplay cannot be measured solely by click-through rates, online conversion rates or online average order size. And because there isn't an established way for retailers to quantify the impact of ROBO behavior, retailers' marketing budgets are often allocated inefficiently, where too much is allocated to programs that don't produce results and not enough to programs that actually work. Once accurate ROBO measurement tools evolve and the marketing mix is optimized for overall company performance, we are going to see even bigger spending differences between the multi-channel and single channel customer.

With a better understanding of multi-channel attribution, there is a new opportunity for retailers to drive growth for their overall business through the use of personalization technology. With retailer's looking more holistically at their online activities, personalization technology has a big role across many consumer touch points and purchase channels, both online and in-store. When a large traditional retailer is able to use all kinds of aggregated consumer data (online, in-store, 3rd party) to provide their consumers personalized product recommendations in email, banner ads, catalogs and direct mail, on the web site and in the store at the point of sale, that retailer has a true 360 degree relationship with their consumers.

This kind of marketing is happening now. The faster the measurement capabilities catch up with the practices, the more productive those marketing programs will be.

Note: The following blog submission was contributed by Range Online Media's VP of Strategy & Media Dustin Engel. Dustin will be presenting a Webinar on Thursday, July 16th with ChoiceStream's Cheryl Kellond entitled "Attribution: Proving Online Display Ads Drive Sales for Retailers".

As an avid professional basketball fan, I am watching the frenzied free agent market and teams looking to put the right pieces together to make a run at the NBA championship next year. Disclosure: I am an avid Lakers fan since birth so I wish all of the other teams the best of luck.

It does make me think about our industry though and how the NBA has a big edge. The role of each player is very tightly defined and the amount of statistics on each player and how they affect the team performance when they are on the court is a huge edge for General Managers trying to get ahead. In the online advertising industry, the majority of advertisers tend to focus on the last ad (87% of advertisers according to a 2008 Jupiter Research report). This is the equivalent of basketball statisticians only looking at who threw the ball in the basket. No assists, no second chance points, and no turnovers. Can you imagine the job of a basketball General Manager if that's all they tracked? It would be a guessing game with big leaps of faith on where to spend their budgets...wait, this sounds familiar.

The question that plagues online marketers is "how do I know which marketing activities are generating results if I'm only looking at what puts the ball in the basket?"

There are many answers to this question, but they all center around the concept of attribution — that is the exercise of understanding the proper valuation across your "team" of advertising to make the most of your entire marketing mix. It is about collecting the right data and making that information actionable. It is about focusing on the most measurable and ROI-friendly activities without starving your upstream channels.

Take display advertising as an example: I've been in the online media business for more than a decade, and the potential for display ads is still largely untapped — especially when you look at how display ads interact with other marketing channels and how the emotional connection opportunity in display ads can not only increase the education level of the consumer in regards to the brand...but also intent.

Recent research by the Online Publishers Association, in conjunction with Comscore, in a presentation entitled "The Silent Click: Building Brands Online" (PDF), underscores the power of display ads have on driving sales:

• 18% of consumers actually search on an advertised brand while nearly 30% visit the advertisers site as a result of seeing branded display ads;
• Branded display ads actually improve advertiser site engagement as consumers spend more time on those sites;
• Consumers exposed to display ad campaigns spend on average 7% more than those consumers not exposed to online display ad campaigns.

Furthermore, my colleagues at Range Online Media's parent company, iProspect, recently released a study that showed that more than two thirds of online users respond to display ads in ways other than clicking on the banner.

So, there are some of compelling reasons why display ads are getting a closer look these days by smart marketers. If you're out there re-building your team, this is the free agent you can pick up to play a variety of roles in your marketing mix.

I'll be hosting a Webinar on July 16 with ChoiceStream's Cheryl Kellond on the subject of online display ads and how smart online marketers can use actionable attribution, to determine how each advertising source, campaign and individual ad impacts your bottom line by properly assigning the conversion credit across the series of ads that contributed to a sale or conversion. If you seek to gain a better understanding of how to create an attribution model that works for your unique business goals, or are even just looking for case studies to prove to those in charge of budgets how intricate yet actionable the new media landscape is, I invite you to attend.