Coremetrics’ most recent Benchmark study shows an air of optimism among U.K. online shoppers with a significant rise in online spending this Christmas and the number of items per transaction on the increase, too.

During last year’s recession-riddled Christmas season, the average online order value dropped by 20% compared to 2007. However, this year has seen a surge with average order values increasing 94% compared with the same period last year.
The number of items that are purchased per transaction has also increased over the last couple of years, from 2.7 in 2007 to 3.7 in 2009.
“What is interesting about this year’s benchmark data is how U.K. consumers are clearly feeling much more optimistic about the economy than last year, with the average value of an order up 94% in just twelve months,” said Coremetrics’ Richard Shepard, VP for Europe, the Middle East and Asia.
“The recession has had a huge impact on online sales, but the Benchmark figures demonstrate that more shoppers than ever are going online in search of great deals.”
A recent study by PayPal U.K. discovered that even Brits who live in the country’s large cities, close to high street stores and shopping malls, are shopping online in increasing numbers.

Ad-ology Research recently updated their Industry Marketing Insights report for Display Advertising Services (also called Out-of-Home). The following are the predicted Top 5 Opportunities/Challenges from the report for this industry for the upcoming 12 months:

The ad industry is expected to recover in 2010 and the out-of-home segment should continue to grow.
Consumer groups continue to fight billboard placement and are pressing government officials to more strictly regulate the industry.
Digital out-of-home networks are often locally owned and operated but as the industry matures, consolidation is expected.
Retail, airport and entertainment districts are growth venues.
More out-of-home operators may allow users to stream user-generated content in the future, a move which could increase the appeal of this media format.
The Industry Marketing Insights report for Display Advertising Services is available on Ad-ology.com (Research Store) for $295 USD with local market data for any U.S. market.

[Source: Ad-ology Research, December 18, 2009]

US online advertising spending is set to drop in 2009 for the first time since 2002. eMarketer estimates online ad spending will be down 4.6%. However, the slowly recovering economy, combined with basic structural changes in how marketers and the public use media, will lead to Internet ad spending growth in early 2010.

“The economic cycle has reached bottom—at least for the online ad industry,” said David Hallerman, eMarketer senior analyst and author of the new report, “US Ad Spending.” “While spending in the first three quarters of 2009 fell by 5.3%, according to the Interactive Advertising Bureau and PricewaterhouseCoopers, eMarketer’s estimates indicate a smaller loss during Q4, of 2.5%.”

The various components of online advertising react differently to cyclical and structural changes. While one format might show relatively healthy growth in the recession, another suffers due to the same economic climate. For example, paid search will grow by 2.2% in 2009, while classified ad spending will decline by 30.2%. Even during 2010 and 2011, eMarketer projects search will continue to grow at mid-single-digit rates, while classified spending will decrease again both years.

Video ad spending growth will far outpace any other online format, running in the 34% to 45% range from 2009 through 2014. These extremely high growth rates are the result of video ads moving from the sidelines to center stage, becoming the main form of brand advertising in the digital space.

“US Ad Spending,” conducted by eMarketer, December 11, 2009. Website: www.emarketer.com.

A couple of weeks ago, I highlighted the general move by small businesses into search marketing. WebVisible’s survey indicated that the typical small business spent $1,658 on search marketing in Q3 2009. Another detail that came to light in that survey is the increase in the number of keywords used by small businesses.

WebVisible analysts note that the typical small business used 55 keywords in their search campaigns in Q3 2009. This compares to the 43 keywords the typical small business used in Q3 2008. Analysts expect the number of keywords and general complexity in small business search campaigns to grow though they have a way to go to reach the thousands of keywords employed by large advertisers.

The WebVisible survey also revealed significant differences between small business types when it comes to search marketing and the number of key words used. Here’s a list of businesses, their amount as a percentage of total advertisers using search, and the average number of keywords used:

Attorneys/Legal Services 7.68% (105 keywords)
Dentists 4.97% (74 keywords)
Air Conditioning Services 2.63% (55 words)
Physicians & Surgeons 2.03% (57 words)
Insurance 1.97% (69 keywords)
And what are businesses getting in exchange for this activity? Once a small business spends over $100 in a quarter on a search marketing campaign with good keywords, the click through rate (CTR) is 1% or higher. CTR leads to conversion action on the marketer’s Web site of 32%. Conversion actions range from submitting an e-mail to bookmarking the page to viewing a video. With results like this, it’s easy to see why so many small businesses expect to increase their spending on search marketing in 2010.

[Source: State of Small Business Online Advertising Q3, WebVisible, Fall 2009]

Last week I highlighted WebVisible’s report on the increased use of search marketing by small businesses. Another research concern, VerticalResponse also reported that search engine marketing will be a key 2010 expenditure for smaller operators. And according to VerticalResponse, small business owners are planning a number of budget cuts to traditional media formats next year.

About half of small businesses, 56.6% of those with fewer than 11 staff members and 48.2% of those with between 11 and 100 staff members, will not use online banner advertising in 2010. The VerticalResponse report also indicates that small business owners are relying less on media formats such as TV and radio. Nearly 80% of survey respondents say they do not plan to use TV next year and 72.7% do not plan to use radio advertising.

As small business operators take actions similar to those employed by larger firms, VerticalResponse CEO and founder Janine Popick believes “marketers need to help small businesses to see the value of integrating search engine marketing such as Google, Yahoo and Bing into their campaigns.”

The shift from traditional to newer forms of marketing will result in some cost savings for small marketers. For example, social media and email campaigns can cost significantly less than TV and radio. However, paid, integrated search engine marketing can be expensive, especially if the campaigns are not carefully targeted. Marketers who efficiently deploy and manage search engine campaigns stand to gain market share and improve profitability in 2010.

[Source: State of Small Business, VerticalResponse, Fall 2009 release]

Recently two casinos began integration campaigns using Lyris HQ’s platform with social and mobile marketing efforts. Both Reno casinos, the Eldorado Hotel Casino and the Silver Legacy Resort Casino, improved reach and engagement levels as well as customer experience. The two casinos also doubled mobile opt-in lists and conversion rates.
“The high customer acquisition and revenue that we have achieved by integrating email with social and mobile marketing has far exceeded our expectations,” said Chad Hallert, director of e-commerce, Eldorado Hotel Casino and Silver Legacy Resort Casino. “As we continue to build out our marketing efforts, we want to maximize exposure and relevancy, while better understanding which mediums or campaigns are succeeding and which are not. Lyris HQ’s embedded Web analytics enables us to see which campaigns are working so we can architect every customer experience for optimal relevance, timeliness and results.”
The casinos integrated email messages with mobile alerts and social network profile updates to promote hosted events and upcoming shows. Offline ad spaces were also used.
“Realigning marketing strategy to accommodate an increasingly social and mobile customer is critical to success. Eldorado and Silver Legacy have proven that integrating email with other marketing channels fuels sales and increases marketing ROI,” said Blaine Mathieu, CMO, Lyris.
Using a platform such as Lyris HQ, marketers are able to synchronize entire campaigns so that messages, alerts and postings are published or made available in order and at the right time. This helps to improve the consistency and relevancy of the messages. The integration of email and mobile, social or offline methods also reinforces the brand’s message. Rather than a consumer skimming over an email message and forgetting it, the message will be reinforced with Twitter or Facebook updates or even a mobile offer to make a purchase or sign up for more information.

According to iPerceptions’ E-commerce Industry Report Q2 2009, 38.6% of the 360,000 or so visitors to the 160 websites tracked were in the research stage of the buying process while just 17% were at the buying stage.
Delving into the data, iPerceptions was able to establish several reasons why visitors weren’t purchasing. The main reason was that visitors weren’t able to find what they were looking for (34%) while price and navigation/usability issues tied in second place (13%) followed by shipping policies (9%).
With over a quarter (27.1%) of website visitors arriving from search engines, it is imperative that online retailers take steps to ensure that they only appear in search engine results for products they actually sell.
At the same time, checking out site navigation and usability to ensure visitors can easily find product specifications, customer service information, delivery and payment options will help guide and reassure the consumer along the purchase funnel.
“By structuring their sites so that visitors can look for – and find – crucial decision-making information, companies can remove a major hurdle responsible for causing would-be purchasers to eventually abandon the process altogether,” said iPerceptions’ President and CEO, Claude Guay. “This is extraordinarily valuable information for online retailers as we move into the holidays, and something that should really make marketers stand up and take notice.”

This is the theory which runs Reply.com. The company engages a platform using light leads rather than simple clicks to help marketers engage consumers, convert sales and increase revenue. CEO and found Payam Zamani explains light leads this way, “Consumers who are interested in buying a car go to a jump page and are asked where and what they want to buy. Since [Reply.com] knows that piece of information, we can categorize auto-buyers and get that information to the advertiser. The advertiser buys that traffic on a Cost Per Lead (CPL) or Cost Per Enhanced Click (CpEH) basis.”
Over the past ten years, performance based marketing has increased from $77 million (1998) to just over $13 billion (2008). This is a 67% increase as marketers figure out how to manage paid search and other online campaigns.
How important are these light leads in the performance marketing space? Considering the majority of consumers, 84% according to a Brand Reputation survey, research purchases online prior to buying, these light leads can be incredibly important especially to hyper local businesses. Auto dealers, local restaurants, local merchants and brands can take enhanced clicks and the information compiled by Reply.com to engage local consumers and convert sales – both online and offline.
To date, Reply.com has seen revenues in some ad categories increase by up to 80% versus using other advertising platforms.
What can a light lead do for the marketer?
• Gives marketers targeted traffic without heavy keyword buys
• Offers geographically targeted traffic
• Offers segmented traffic based on geographic location and purchase intent
“Enhanced clicks direct consumers to an advertiser’s customized landing page. The advertiser gets the consumer location and intent-to-purchase without managing keywords or text campaigns,” said Mr. Zamadi. “Leads are distributed through an auction interface, giving the marketer price, quality and volume control. The moment a consumer clarifies their intent and location, the click is enhanced. Because it includes user-submitted information the advertiser knows what the consumer wants and where the consumer is which gives them a better conversion rate.”
The other benefit to using light leads is that the advertiser receives the consumer location; geographically targeted ads or, in this case, taking only leads from a specific geographic area, has been proven to give advertisers a higher return on investment for the overall campaign. This is becoming more and more important as advertisers try to squeeze as much as they can from each ad, auction buy and campaign.
“There is a need, especially in the last 12 months, to become more profitable,” said Zamani. “Services who can cut waste and not force advertisers to buy unwanted traffic or unmonetized traffic have done well. I see [marketers] wanting to broaden their reach but pay accordingly. For example, a woman of thirty may be the perfect demographic target but women between forty and fifty may also be strong leads. I, as a marketer, would pay a premium for the perfect target but would expect a lower cost for leads outside that perfect targeted base.”

Marc Krigsman, CEO of Cross MediaWorks, and Larry Rubin, Chief Operating Officer agree that advertising spending will be one area that will improve in the New Year, although spending levels will not reach pre-downturn levels. Also, television ad spending will continue to be the larger spend for advertisers because that is still where the majority of viewers lie.
Although most marketers want a financial windfall to make up for lost profits, slower and steadier growth can be a better option. Slower growth is more likely to be continued growth whereas a fast, skyrocketing growth could be an indicator of an even bigger economic harbinger in the future.
Along with more spending there will likely be more measurement in the New Year as marketers look performance rather than simple clicks.
When it comes to content, more and better content will be a must for publishers and content developers as consumers demand more.
“Smartphones like the iPhone will continue to pave the way for content platforms to emerge that will drive more users to mobile sites. However, what is considered a valuable mobile ad will remain undefined until that happens,” say Kingsman and Rubin.
By the way, consumers are likely going to want more than words on a screen. Beginning in 2010 marketers will need to incorporate video, flash and other multimedia options along with static content to engage the consumer – and push ad revenues. When it comes to video, Kingsman and Rubin agree that online video will likely have to move to a subscription model to remain viable.
“Media comes at a cost,” they say. “In the television’s early days, for example, entire programs were paid for by an advertiser like ‘Texaco Star Theater’.”
Video isn’t the only online platform looking at subscription models. Newspapers are researching subscription models to help their revenue and consumers have indicated a willingness to pay for new, relevant content on the Internet.

Small businesses are continuing to invest in online search marketing campaigns to reach new and existing clients. According to WebVisible’s 2009 Q3 Report on the State of Small Business Online Advertising, small business owners upped their search marketing by 91% between the third quarter of 2008 and the third quarter of 2009. What accounts for this huge increase? WebVisible CEO Kirsten Mangers suggests that increased competition in the search engine market, especially with the entrance of Bing this summer, may have accounted for some of the growth.

Bing had captured about 10.5% of the search market at the end of Q3 2009. Much of the growth came at the expense of Google. And this shift in the search market may be because Bing has CPC (cost per click) rates that are 30% lower than Google in some areas. However, Google still had 60.4% of the small business search market. Mangers also notes that more small businesses are entering the search market, especially in the Local area, because they see that their efforts are paying off. “The real news is that these SMB advertisers are getting results from their interactive budgets that they’ve been after for years now. Local interactive is on the rise – because it works,” says Mangers.

WebVisible’s survey indicates that the typical small business spent $1,658 on search marketing in Q3 2009. At least 15% of firms spent at a higher quarterly rate that ranges from $2,000-$2,999. Analysts expect SMBs (small and medium size businesses) to continue to spend on local interactive search. Matt Booth, SVP and Program Director, Interactive Local Media for BIA/Kelsey states, “I should think that they (search engine companies) would be encouraged by these results, as more and more SMBs move their ad budgets away from print and directories and online, small market share increases will come to represent big dollars.”

[Source: WebVisible Q3 Report Reveals New Trends in Local Interactive Marketing, company release, Fall 2009]