Primary.com, which launched today, is working directly with manufacturers in an attempt to sell products at lower prices than traditional retail brands.
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At Ashford.com, when it comes to creating and monitoring online display ad campaigns, Katz says it`s difficult to break out a cost.
"Marketing, customer service, warehouse, fraud check all had to be in the process to ensure we could handle extra orders during the holidays created by the campaign," he explains. "It`s all in a day`s work."
Working with paid search
And it`s all in a day`s work for display to complement paid search efforts, Katz and Wong say.
"When shoppers come to our site from paid search and educate themselves on products, we cookie them; then they go back out to the Internet where we serve them an impression of a display ad. In that way you`re reinforcing the paid click," Wong says. "When you start coupling strategies, online display becomes much more powerful."
One of the fundamentals of advertising is frequency, Katz adds. "The searcher who has seen our display ad is more likely to click on our search result," he says. "The customer needs multiple touch-points, reinforcement to convert into a sale."
Paid search is a tried and true marketing vehicle. But some merchants are trying new methods of online display to reach an even broader audience, or pinpoint a specific demographic.
Universal Studios Home Entertainment decided to be the first to try a new type of mobile ad from technology vendor Adgregate Markets. The mobile ads, dubbed ShopAds, enable consumers to purchase the advertised product right then and there, within the ad.
Young, mobile users
In December, Universal was promoting the DVD release of the film Inglourious Basterds. As part of its marketing efforts, it ran an ad campaign targeting 18- to 24-year-olds using several mobile apps that are part of the Greystripe Inc. mobile ad network, which compiles the demographic data. Greystripe signs agreements with mobile app owners to join its ad network in the same way a conventional ad network signs up web sites.
At certain points within the apps, the ad popped up as an overlay on the screen with an image and text promoting the film, and a Buy button. Clicking on the Buy button began a checkout process to buy the DVD that could be completed without leaving the overlay.
This is the first ad of its kind for both parties and they decline to reveal financial results. However, a spokesman for Adgregate says the program exceeded expectations.
Another new online display ad approach is using social media connections between consumers to target ads.
Ad technology firm Media6Degrees cookies a client`s consumers—only web browser IDs are collected, not personally identifiable information—and, through data deals with social network and blogging provider companies, follows them through the social web. After identifying through web analytics on the client`s site what it calls brand loyalists, it matches their visits to social sites with those of other consumers. What it`s looking for are niche sites that both loyalists and others visit.
"If you and I are connected via the New York Times, that gets a low rating. But if you and I both went to the same page of a food blog, we consider that a very strong connection," explains Tom Phillips, president and CEO of Media6Degrees. "So we map those connections and show both consumers the ads."
Consumers who share very similar interests are likely to be attracted to the same display ads, Phillips says. And a brand loyalist can lead a retailer to many other consumers who share similar interests.
It`s this kind of tracking and other forms of behavioral ad targeting that`s led to complaints from privacy advocates and threats of legislation from congressional critics, notably Rep. Rick Boucher, a Virginia Democrat who argues for what he calls a baseline protection in the online space.
"If someone does not want a web site he visits to use information it collects to deliver ads to him," Boucher has said, "he should be able to opt out of that use. And if a web site wants to provide information to an unrelated third party, it should procure that Internet user`s affirmative opt-in consent."
Those privacy concerns also prompted Federal Trade Commission chairman Jonathan Leibowitz to warn of new regulation of online behavioral targeting if the advertising industry did not regulate itself.
Those threats have led to industry action.
In July 2009, the Interactive Advertising Bureau, Association of National Advertisers, the Better Business Bureau and the Direct Marketing Association released self-regulatory principles for online behavioral advertising, which were met with a positive response from the Federal Trade Commission.
"We created these self-regulatory principles to comprehensively address how all online advertising should work, and they talk about transparency, consumer control, data security and consumer education, among other things," says David Doty, senior vice president, thought leadership, marketing and events, at the Interactive Advertising Bureau. "They specify what kinds of notice consumers should be provided, where it should be provided, how data should be safeguarded, and more."
The organizations also launched their own ad campaign called Privacy Matters to explain ad targeting to consumers. It has delivered 500 million ad impressions, donated by ad networks and other firms, leading consumers to IAB.net/PrivacyMatters, where the techniques of online display advertising are explained, emphasizing that advertisers do not collect personally identifiable information.
For now, ad targeting is a tool retailers can use, and are using in growing numbers. More success stories, like those of Ashford and New York & Company, likely will lead more e-retailers to add display ads to their marketing arsenal.