Right This Way

The rising cost of coveted keywords is a topic that has more than a few e-marketers grumbling these days. Take the case of the one who recently called to complain to search marketing firm Atlas One Point CEO Dave Carlson. Incredulous that he was suddenly being outbid by a competitor at $5 per click on a keyword for which he’d been securing top position at $2.50, the marketer told Carlson that the competitor must be losing big money on his larger bid.

“I looked at the site of the marketer who was calling me and then at his competitor’s site and told him I thought his competitor was probably doing the right thing,” Carlson recounts. “Based on the look of the caller’s site, I guessed that his competitor’s conversion rate was two if not three times better. It didn’t make him happy, but it woke him up.”

The point is not that there seems to be no ceiling in sight for the cost per click on top keywords, but that as those rates escalate, getting better conversions off those top terms, rather than simply throwing more money at them, is going to be marketers’ only way out. Only those with conversion rates that actually support such spending will see any gain from continuing to pay top dollar; for anyone else, it’s a losing proposition.

A broader view

That fact is driving new interest in on-site “conversion enhancement” at search engine marketing companies that historically have focused primarily just on getting traffic to sites. At the same time, it’s causing web design companies to broaden their view of conversion enhancement beyond navigation and check-out that grease the wheels for the purchase transaction at the end of the buying cycle. Now, some see conversion enhancement as a process that can start before shoppers ever get to a site, and they’re expanding their role accordingly.

Surprisingly, 19% of retailers recently surveyed by Chicago-based The e-Tailing Group Inc. still don’t know their conversion rates—but that’s changing. “We’ve seen a lot more focus on how well the site is performing in conversions from any executive or general manager who’s looked over a site’s P&L,” says Andy Liu, vice president and general manager of NetConversions, a conversion enhancement technology and service company acquired by aQuantive Inc.’s advertising technology company, Atlas DMT, in February. “Previously, people had been spending blindly to try to improve conversions without really knowing what would work. It was like throwing darts at a dartboard.”

Some search marketing firms are launching conversion enhancement initiatives that extend their role deeper into areas such as page redesign and architecture. And web designers and developers are looking beyond the on-site shopping tools that have been their bread and butter to pay new attention to what’s happening in search marketing at the very top of the conversion funnel.

Teamwork

It’s key that that the two sides work together if marketers are to benefit from keyword buys in proportion to their rising cost. According to a recent report by Nielsen/NetRatings Inc., the demand for search advertising now outstrips the supply of search terms. Between May 2003 and May 2004, the number of searches generated by U.S. web users grew by 30% to 1.2 billion sessions. That pales in comparison to the 184% growth in search advertising spending reported by the Interactive Advertising Bureau. The growing imbalance of supply and demand is driving keyword prices up.

Search marketing company iProspect.com Inc.’s CEO, Fredrick Marckini, underscores that point with the story of a b2b client whose average bid for a top position across 50-80 keywords on Overture’s search engine was $1 per click last year. That client is facing a marketplace of $4 per click for the same keyword set today. “Whoever’s got the highest conversion rate can bid more than his competitors and get the lion’s share of the audience,” Marckini says. “If you are maxing out at $2 per click, and the marketplace goes up 400%, you are no longer even on the first page.” And as iProspect’s own data suggest, being off the first page of search results is the equivalent of being in search Siberia—41% of web users don’t look any deeper than page one.

In Carlson’s view, maximizing conversions has always been a tenet of good site management. Now, more e-marketers who’ve been fixated on traffic are refocusing on conversion as well. To assist clients in that regard, Atlas OnePoint (formerly, Go Toast) last fall debuted Campaign Optimizer, a tool that allows e-retailers to model online campaigns and then continuously optimize them based on parameters they set. Parameters include cost per acquisition, return on advertising spend, total sales target and other metrics. Soon, the tool also will incorporate the ability to model campaigns based on target margin.

While Atlas OnePoint’s existing tool set has a feature that shows conversion rates, “That’s a baseline. How you change things to improve conversion is really the big question,” Carlson says.

NetConversion’s product suite tackles that with a tool called True Usability, which goes beyond many analytics products to capture on-page user behavior in minute detail—everything from mouse movements to scrolling to how much time users spend on each field.

According to Liu, that level of detail draws a tighter circle around the site alterations that could actually improve results. Otherwise, “You might see that users are bailing out at checkout, but you might not know exactly why. We might notice that they are not even scrolling down to see the checkout button, or that they are spending a lot of time reading text. We look for friction points and compare it to benchmarks. Then we’ll identify ways to fix it.” An automated testing product speeds up the validation process.

One client, for example, learned that 80% of conversions were originating through its home page search box, even though its location was minimized on the page, Carlson says. By giving the search box greater emphasis, conversions increased fivefold. Atlas expects to rollout a new version of NetConversions’ enterprise-scaled product suite, for mid-sized to smaller retailers, shortly.

Persuading consumers

Search marketing company iProspect also has gotten deeper into the site conversion business with Web Conversion Enhancement, a service offering it’s wrapped around a methodology it licenses from technology developer Future Now’s subsidiary, Persuasion Architecture. The goal of Persuasion Architecture—the methodology’s underlying concept as well as the subsidiary’s corporate name—is to create different paths that propel different types of web site visitors towards conversion. To accomplish that, through its Web Conversion Enhancement offering, iProsepct gets involved in research-based page redesign including graphics, language, content and page architecture itself, depending on the design and architecture its client site already has in place.

The process is geared to customer segments based on personas, tied to Myers-Briggs profile types, that iProspect develops through extensive interviews with the e-retailer and its customers. The resulting “persuasive path” through the site is actually several paths, each designed with navigation, language, and other page elements to support the different needs of different visitor groups. Sage Peterson, vice president of new products at iProspect, offers an example: “If a headline on a site is, ‘You’ll love our superior service,’ we know ‘love’ is expressive, a relationship word,” she says. “That customer might be looking next for testimonials or incentives. The words ‘superior service’ are more analytical and business-oriented. The next thing the customer looking at those words might want to find is a timeline or financial information.”

For two different visitor types traveling two different paths through the site, the headline for the more expressive persona could be changed to say “You will love our attentive account management; all our customers do.” For the analytical visitor, the headline to lead them down the persuasive path might say, “You’ll count on our superior service and never waste another day,” Peterson says. “If we can understand how different people communicate, a click at a time, we’ll have a better chance of not losing them,” she adds.

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Incorporating persuasion earlier in the buying process allows e-commerce sites to reach beyond visitors who arrive at the site ready to buy into the larger pool of visitors who are not yet ready to buy, but could be persuaded to with the right communication, in the right sequence. The upshot? A higher conversion rate that exceeds the lift which might be expected by just improving the checkout process or the shopping cart at the back end, Marckini argues.

A tenfold jump in conversions

IProspect has been offering Web Conversion Enhancement for about a year. While its clients include retail sites as well as those from other industry segments, none of its retailer clients has publicly disclosed results. However, as an example Marckini cites one client whose conversion rate went from 2% to 22%. “You don’t get that kind of increase with usability strategies,” he says.

Genesco’s Inc.’s HatWorld.com —the URL for its Lids brand, Lids.com, leads to the same site—has been working with iProspect on Web Conversion Enhancement since early this year to incorporate persuasion architecture into the new site planned for rollout this fall. The planning process involves months of customer and company research that even Future Now CEO Jeff Eisenberg calls “the sort of tedious work that no one ever wants to do before they start a web site.” But HatWorld e-commerce manager Karen Weber is confident the effort will pay off—her goal is to double conversions within four to five months of launch. To Weber, adding the conversion enhancement service on top of search marketing services the company buys from iProspect was a no-brainer. “It just made sense,” she says. “If you’re going to pay the money to bring traffic to the site, why wouldn’t you try to convert it at a higher rate?”

The conversion funnel

Search marketing and advertising companies aren’t the only players taking a new look at their role in conversion. Web design and development companies have long been focused on page improvements that enhance conversion. The difference now is that they are also cranking what happens off the page, in the search arena, into their counsel on how to do it.

“If you think of the top, wide end of the conversion funnel as awareness and the bottom end as converting someone to buy something, we’ve usually been focused on the lower two-thirds of the funnel,” says David Fry, CEO of web design and development firm Fry Inc. “That’s making the site a better experience, giving people the shopping tools, and reducing the friction in the shopping and buying process.”

But lately, Fry says, the company is doing more work in the top third of the funnel, where the drivers aren’t so much shopping tools as they are web advertising and marketing efforts such as search engine marketing and search optimization. While it doesn’t at present execute keyword buys for clients, leaving that to companies such as DoubleClick whose ad buys are scaled to get better deals, Fry now works with its clients to do analysis of what types of search terms are used at Google, for example, and how that relates to the products their companies are offering.

While Fry says search marketing’s function of making people interested in a company and traditional conversion enhancement’s task of reducing friction in the transaction require separate skills, the two are blending. “If you are driving someone to your site off a search engine, you have to make design changes accordingly,” he says.

To enhance conversions for its clients, Fry Inc. works with scenario design based on hypotheses about the needs of different users, focusing on the needs of three to five specific groups, followed by tests of whether different designs allowed users in each group to accomplish their goals on a site. “Most of our web sites have multiple audiences because most companies do,” says Fry.

Good for all

What’s good for retail clients is good for search engines and search engine marketing companies as well. “Once you help people fix the conversion problem, they can afford to spend more on marketing,” Carlson says.

Given that, the industry will likely start seeing more—and even more sophisticated—efforts in the arena of conversion enhancement by search marketing companies, web design companies, technology developers and others whose own success is tied to the success of e-marketers they serve.

“Anybody who is in direct marketing knows how accountable their budget it,” says Jupiter Research Inc. analyst Patti Freeman Evans. “So in order to justify or optimize your budget you need to know how it’s performing. With companies driving their capability to track marketing initiatives through to conversion, it gives marketers a very powerful tool.”

mary@verticalwebmedia.com

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