In its second-largest acquisition, Amazon buys the company for $970 million.
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Schaloum maintains that spot herself, taking a notebook computer with her when she travels so as to check the ranking and the site morning and night. While she’s not paying for extensive online advertising, she’s still finding ways to reach her target audience at next to no added cost. Gr8Gear’s inventory is diverse, encompassing everything from huge reconditioned military tents that get snapped up by film production companies to extended sizes of current-issue military uniforms and boots. Schaloum spends time checking out content sites in search of those with audiences that overlap Gr8Gears’ targets. These range from the web site for Burning Man, a community campout/survivalist experiment/art installation held annually in the Nevada desert, to sites visited by men and women in active service. Though she pays for some ads on content sites, Gr8Gear.com is viewed by the site operators as a resource for hard-to-find items of interest to their own audiences, and it’s often listed or even linked free of charge.
Schaloum’s next goals for the site are a redesign and a switch to a new hosting company. The switch has been delayed by wranglings over who owns the password to the site at the current hosting company. Schaloum attributes the problem to delegating to an underling without adequately supervising what he was doing back when she was building the site. But she chalks up the headaches the dispute has created to more learning about how to run a web operation. “You have to hold any contracts yourself,” she says. “It’s an issue most small companies really don’t have a clue about. To me, hosting was just getting from Point A to Point B and paying for it. I didn’t realize that it was also a legal piece. Though you can’t keep track of every single thing personally, you do need to keep track of the specifics on what you contract out.” m
An advertising background and an affinity for wildflowers create a big success for a small retailing web site
AmericanMeadows.com’s Allen had some 20 years’ experience with a retail store, catalog and display gardens at the Vermont Wildflower Farm before the 2000 launch of the wildflower seed site that replaced an earlier web site and a catalog. In addition to long experience with the wildflower seed business, he is also a former ad agency owner. That means he could write his own ad copy and search listings as well as knock out a basic design for the site, all of which he did to trim costs. Accustomed in his former profession to spending millions on media, he also had something else: an utter fascination with the (then) largely free cost of online advertising in the form of natural search.
“Once we had a web site with a shopping cart, I became addicted to the idea that I could submit to the search engines of the time, see people come to the site and spend money, and realize that I’d spent zero to acquire these customers,” he says. In submitting pages to the engines, Allen was able to put his earlier training as a copywriter to good use. “I clicked around on the engines and figured out what they wanted to see,” he says. “All you have to do is follow the rules and do as they say. For instance, if an engine says not to use exclamation points in writing the listings, don’t use them.”
Already well represented in natural search results, Allen says he “stumbled over” GoTo.com, now Overture, in 2000. “I thought it was the greatest thing,” he says. “A lot of my competitors were still of the mind that the Internet should be completely free, but I understand the value of advertising.” Today, paid advertising is at the center of marketing at AmericanMeadows.com, with about 80% of the budget going to pay-per-click programs. “My average sale on our web site is $62, so even if I have to pay as much as 72 cents a click, which is well over my average cost per click, it’s a good deal as long as I’m getting quality traffic,” Allen adds.
The advantage of being a niche marketer in the pay-for-click environment is that AmericanMeadows has only a few competitors online rather than hundreds or thousands, so maintaining a top position in many of the most relevant keywords doesn’t cost $10 per click. Nevertheless, Allen quickly bumped up against his limits. He learned he couldn’t afford a term as broad as “flowers,” for example, while the term “gardening” brought in a lot of unqualified traffic.
Though it gets much of his ad budget, AmericanMeadows’ online outreach isn’t limited to paid search. Allen also spends time surfing the web for relevant content sites and maintains ad placements on a selected handful, some very small indeed. Tiny ILovePlants.com, for example, a content site operated by a Florida-based gardening enthusiast, never hosted an ad before it posted AmericanMeadows’ banner. “It’s mini-marketing,” he says. “These sites have small traffic, but it’s valuable traffic.”
Allen has considered hosted analytics services from an outside provider, but for now uses an online tool called ConversionRuler, from Timberline Interactive Inc. of Middlebury, Vt., to measure keyword conversions. His near-obsession with tracking results has paid off by flagging him not only on where to spend, but where not to spend. A content site called eNature.com, which features striking nature photography, looked like a good fit for AmericanMeadows’ banner. Though the ad was bringing in a fair number of click-throughs at a cost of about $1,000 per month, they resulted in few conversions. Allen took the banner down within a few months. Similarly, when he discovered that the term “wedding favor,” listed on Overture to direct shoppers to specially-packaged wildflower seeds, was costing nearly $250 a week on click-throughs with a single conversion in one month, he swapped it out for a different term.
Times to pay