Online pay for performance deals booming among online retailers
Pay for performance online ad deals are booming among e-retailers as merchants become savvier and more selective about how they spend their online marketing dollars. Forester Research estimates merchants will be seeking some element of cost-per-action pricing on 83% of the online ad deals they strike by 2003. The challenge in evaluating such deals for merchants may be in determining if they’re paying to acquire new customers or re-paying to reacquire customers already in their database through other campaigns or other marketing channels, says Neal Patrick, manager of e-commerce at women’s apparel retailer Chadwick’s of Boston.
Chadwick’s has seen a boom in online sales since December, when it signed up with affiliate marketing network Performics. In fact, estimates Patrick, almost 10% of online sales for Chadwicks.com are delivered to the site by Performics affiliates. Chadwick’s is pleased with the numbers, but also working to figure out how much of that represents an incremental increase – new customers – versus those who are already Chadwick’s customers. “The challenge in the future is going to be to insure that the customers bought in by the network are really additional customers, because our marketing strategy is multi-layered: e-mails, catalog, affiliate networks, and they’re all related,” Patrick says. “We want to understand what action is driving the customer to buy from us.” Patrick adds that Chadwick’s looks at customer activities and behavior prior to and post conversions to better understand how customers get to the site and how they revisit to better understand how online and offline activity relates.
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