I’ve been talking to a lot of SMB ecommerce players lately, especially in areas such as lifestyle, fashion and homeware. Most of them have tried online advertising, but backed off. They looked at the conversions, decided the numbers did not add up, and instead focused energies on customer service, email lists and social media.
I’ve also been talking to a lot of shoppers, and I see many cases where a shopper converted into purchaser two or three *months* after initial discovery. That rarely gets captured in the retailer’s ad campaign ROI calculation, so it begs the question of whether they are misreading the efficacy of their advertising.
Another example of marketing leading to unmeasured conversions came up at the recent Social Currency CrunchUp, when News America’s Ginny Byrnes said, “Customers recall seeing a coupon promotion, so even though they might not be redeeming the offer, they are still purchasing your product.”
The discrepancy from my talks with both etailers and shoppers makes me wonder if the seemingly “concrete numbers” that come with search advertising has been too seductive. People love feeling like their decisions are scientific — it feels less risky than a judgement call — and will often accept weak data just to have data. Doing business without analytics would be like driving a car blindfolded, i.e. dumb, but I also think we live in a world of imperfect information and judgement holds a strong place as well.
Just thinking out loud, trying to evolve my thoughts.
Some other posts you might find interesting:
- Jonathan Mendez, Online Advertising is Not an Intent Generation Channel
- The Tail, Clickable on Search-Engine Marketing for Smaller Etailers
- Jeremy Liew, Why online brand spending will create new winners in online ad networks
- Darren Herman, The Advertising Collision