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1. Traditional Advertising:
   Being online does not mean that online advertising is the only method to reach potential customers. Be creative and utilize traditional advertising to get customers to hit your website. These methods include: direct mail, radio, billboards, magazine and newspaper Ads, and many off line creative methods inclusive of co-branding with other companies, tradeshows, event sponsorship, local TV advertising, product placement in stores, table Ads, flyers, boots at country fairs, and creating press releases and sending them to tabloids directly (you never know who might want to write a story on a cool, new company, but they have to know you exist!).
   While the possibilities are endless, MerchantAdvantage reminds you that there is no perfect way to advertise, especially considering your geographic location, demographic reach, and cash resources. Trial and error with the various methods and proper evaluation of that method over a 60 to 90 day period is often the only way to see which method works best for you. Some online Merchants have the creative skill, resources and manpower to execute one or more of the above methods. If not, outsourcing this to an expert third party vendor is often your best option. If you decide on the outsourcing path, make sure that these companies provide you with a detailed execution plan accompanied by statistical results of their efforts = this is the only way you will know if it works!
2. Affiliate Relations:
   In the same way that companies joint venture to sponsor local offline marketing campaigns, the Internet is an ideal forum and conduit for business to business joint marketing campaigns. These relationships can be created internally by simply calling the Head of Business Development at other companies, who you think share a similar customer base, yet offer a different product offering. There also exist established companies, as www.Linkshare.com and www.CommissionJunction.com, whose business model is to be the conduit to help companies help other companies sell their product.
In exchange for this service, the conduit company gets a negotiated commission for each sale, as does the company credited for sending you the lead. MerchantAdvantage has found that affiliate relationships can lead to new sales, customer leads to market to into the future, brand credibility, marketplace awareness, and new relationships with companies that you might want to work with more closely in the future.
If you are big enough, and others know you exist, this sometimes leads to maybe even merging with, acquiring, or being bought out by another company, if you feel it makes sense. It never hurts to reach out and affiliate relationships are a great way to accomplish marketplace awareness.
3. Value Add Marketing Tools/Services:
   Expanding and growing your Internet business can be confusing and complex. As online Merchants grow, they also want to harness the power of marketing online, such as e-mail marketing, ad words, online live customer chat, leveraging online shopping market places, coupon campaigns, customer relationship management tools, and even redesigning their site to better engage the customer in hopes of increased sales and return visits, to name just a few options.
   But when Merchants figure out the options presented to them, they are often overwhelmed by the process to do it on their own or the cost of outsourcing these methods to a third party vendor. In their heart, the Merchants want to do everything they can to compete online but are unsure what will work or not work for them. Welcome to the conundrum of Internet marketing, no one really knows what works or does not work. But there is now enough statistical evidence to show that companies that can afford to bolster their online marketing efforts can benefit and see increased sales and market/brand awareness.
   MerchantAdvantage suggests, as with traditional advertising, testing the waters to see what method or methods work best for you. Sometimes, one method works very well and other times only by adopting several methods that interface with the other (as an email marketing, ad words, listing your products on shopping destination sites, and an online coupon campaign) can a Merchant really see sales growth. There is no one answer and there are several excellent options from which to choose and experiment. Whether you choose an internal tools based solution or a third party service based solution, research your options and ask any company in the business of providing ecommerce marketing solutions your options. If they are not completely open with you on your options, move on, why would you want to work with them anyway?
4. Research and Information:
   Nothing is more important to building your business than knowledge. Today, the online Merchant has hundreds of places to go to learn about online retailing. This includes specific trade information, as Multi Channel Merchant and Internet Retailer, to general daily information provided on webpronews.com, to newsletters from companies whose business it is to help online Merchants grow their business. There are numerous trade shows sponsored by E-Tail, EBay, Internet Retailer, Shop.org and Retailer.org, which are excellent ways to network and meet companies face to face to learn about the online retail industry.
   There are also many companies whose business it is to consult on a daily basis with online Merchants on all aspects of their business. With this relationship comes a lot of valuable information on the online retail industry. Relying on third party “experts” can be very helpful but it also can be expensive. An online Merchant should do their due diligence and compare the costs of attending trade shows, subscribing to trade websites and magazines, and the time they have available to digest all of this information and learn it, against the cost of having another company doing what you may and can do yourself.
   One recommendation is to take one step at a time. If you are not already savvy about online retailing, rely on a few sources, many of which are free, until you are more comfortable with your online business strategy and the amount of money you are willing to outlay. At the point you are comfortable with the online retail marketplace, you will be better prepared to decide what sources you can afford and the best course of action to provide you with ongoing research and information. And remember, in the world of online retail and the Internet what was groundbreaking 6 months ago is often outdated and supplanted with better methods to reach, capture, and retain your customer.
5. Shopping Destination Site Relationships:
   We have said many times before that simply being online is sometimes like building a wonderful brick and mortar store in the Sahara Desert. Just being online does not mean your business will grow. You need to attract customers and build brand awareness in the marketplace to attract customers to your online storefront over and over again.
   One such solution is to work with shopping destination sites, of which there are many. Never let anybody tell you that you only have five or ten from which to pick. MerchantAdvantage has identified over 60 and we are sure there are many more we have not heard of in the marketplace today. MerchantAdvantage, for the purpose of this newsletter, combines all sites that act as marketplaces and “magnets” for online shoppers and categorizes them as shopping destination sites. These include affiliate sites such as Commission Junction and Linkshare, marketplaces such as Amazon, MonsterMarketplace, AOL Shopping and EBay and EBay Express, and shopping comparison sites as Yahoo! shopping, Become.com, CNet Shopping, Gifts.com, PriceFish.com, PriceGrabber.com, PriceRunner.com, PriceComparison.com, Shopzilla.com, and Smarter.com, to name just a few. If you would like a complete list, please feel free to contact us.
   Note: MerchantAdvantage’s newsletter dated April 4 (Click Here to View) goes into more detail on how these shopping destination sites work for you and how to get you products seamlessly to these sites yourself by using tools such as Channel Management by MerchantAdvantage.
   The important takeaway is that unless you have a brand name that everyone knows who will immediately type in your company URL directly when they log onto the Internet, these type of shopping destination sites act as online malls with millions of shoppers hunting for products from the Merchants they represent. Online Merchants should see being on one or more shopping destination site as part of their marketing and advertising strategy and an effective way to reach millions of potential customers each month.
6. Web Analytic Tools:
   Now that an online Merchant is fully online and using several of the aforementioned methods to reach new customers, it is time to track your online sales, and marketing and advertising campaigns no matter where they may be.
When MerchantAdvantage speaks of analytic tools, they include, tracking the effectiveness of advertising, newsletters, press releases, sales campaigns, affiliate marketing campaigns, ad words, email campaigns, storefront marketing efforts, and click to purchase marketing campaigns. The great part about the Internet is that the results of a marketing campaign are traceable and almost immediate. Furthermore, if you are working with a third party vendor, as WebTrends, Coremetrix, Omniture, or Webside Story, or using a software tool as Chanalytics(sm) from MerchantAdvantage, you can respond to the analysis immediately and tailor your marketing efforts to achieve better results.
One of the most important aspects of any sales, advertising or marketing campaign is to see if it was cost-effective. And unlike traditional advertising, as radio, print, or TV, which often is difficult to track to see if it was effective, using the right tools or third party vendors is a very easy way to track whether a potential customer is responding to your online marketing campaigns.

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MerchantAdvantage Wrap Up:
Being online is not enough! Building an online storefront can be more complicated than building a brick and mortar store, so don’t be cavalier. Successful online Merchants create a strategy they can execute effectively within the confines of their budgets and implement excellent systems and solutions to manage their operations and customers. There are hundreds of companies and software solutions in the market to get you online, service you online, and keep you online. The multi billion dollar world of online retail is exciting and also complex. Online Merchants should compare the services of these companies with other cost-effective methods and software tools and then implement solutions that Merchants can afford, are in line with their business strategy, and help them manage their business more effectively on their own.

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"MerchantAdvantage is here to be your partner in growing your business in the multi billion dollar and complex world of online shopping. We are here because you are online.^sm"

Michael Lambert, CEO

• Shopping Comparison Engines Rate Higher than Other Search Engines.
Recent studies suggest since 2004, shopping comparison engines rate higher than other search engines in intensity of use. While traffic is increasing on both regular search engines (like Google and Yahoo!) and shopping comparison sites, people spend more time and energy on the comparison sites. MSN Shopping rated the highest in the frequency of visits and PriceGrabber scored highest in a rating of overall intensity of search.

• Shopping Comparison Sites
Finished Ahead.
In a recent study of affiliate marketing, comparison engines were rated against loyalty & rewards sites, community & content sites, purchasing & promotion sites, and other miscellaneous sites. Shopping comparison sites finished ahead all other content types in:
• Branding
• Usability
• Depth
The only category where shopping comparison sites did not win was in first impression, where loyalty & reward sites came in first by a small margin.

• Online Purchasing.
In a survey of consumers with access to online shopping, 79% percent said they have purchased goods online within the last 6 months. The average amount spent per consumer was $488.

• Users on Amazon Can Now Submit Their Own Descriptions.
Amazon is now beginning to use tagging or user generated search criteria. Users on Amazon can now submit their own descriptions for products. So for example, a consumer may add a description such as “great for a hot day at the beach” to a swim suit. Once added, the next time someone types in “something for a hot day at the beach”, the swim suit will come up in the search. Look for this to be a continuing trend as searches become deeper and more advanced.

Analytics Shmanalytics
What are analytics? Should we use them? If so, Why? Are other merchants using them? What don’t analytics do? Is there a “right” and “wrong” way to acquire analytics?

Let’s start from the beginning by defining what merchants really do with respect to online marketing. Merchants put all or part of their products into some online marketing venue(s) in the hopes that it will generate clicks from a possible consumer, and hopefully that click will convert to a sale. Generally speaking, the most successful marketing campaigns will have a high conversion rate from click to purchase, and if that ratio is low, the success is also low.

The first level of analytics is used to help a merchant make the decision of what is, and more importantly, what is NOT a successful marketing effort. But since all of the clicks can come from various channels (shopping comparison sites, affiliate links, natural searches, ad words, direct site access, etc…) how can we tell where the click came from, and which sale resulted from which ad campaign or marketing channel?

1. What are analytics?
Analytics are statistics gathered during normal use of the online retailer website used to gain knowledge of how a specific channel is performing or how well a product is selling, which will then aid in making marketing and merchandising decisions. So typically an online retailer would need to know click to purchase ratios per category of products, and perhaps even per product, and for each channel which is utilized by the online retailer. This information coupled with product knowledge, and manufacturer, distributor or vendor relationships should be extremely valuable in making decisions about continued marketing efforts, and perhaps even vendor relationships. If a product isn’t doing well, analytics may or may not show you why, but will certainly serve as a trigger to an online retailer to further scrutinize the lack of success on a category or product. Ultimately, the online retailer may need to lower a product's price point, alter product photos or descriptions, or pull marketing resources for a product from a channel entirely.

2. Should we use them?
If so, Why? Online Retailers should most certainly use analytics of some sort if they wish to have any degree of control over their marketing success. Many online retailers complain of “unreasonably high costs” for their marketing endeavors. But typically online retailers have done little, if anything, on their part to counter their opposition to that price. Obviously, an online retailer can not stop all marketing efforts, but they do not need to continue to blindly market unsuccessfully. By using information gained through analytics, an online retailer can make accurate and informed decisions on how and what to market and better understand how their marketing efforts are working on a day to day basis.

3. Are other merchants using them? Most successful online merchants have multiple forms of analytics to show different performance statistics. Some analytic software packages provide information such as; How long does the average end user spend on the site, or on each page? What pages are the consumers arriving on? Which page is the last page that consumers are on before they leave? as well as many other demographic questions. For the purposes of this newsletter, we are focusing primarily on the efforts DIRECTLY connected to generating online product sales through the various marketing channels, and not to tracking website behaviors, consumer demographics and such as typically done with WebTrends, CoreMetrics and other high end and robust analytical data tools.

4. What don’t analytics do?
Analytics are NOT usable as order management, or accounting data, but specifically for marketing. Many times analytics are discontinued because some discrepancy has been found when comparing the analytical data to accounting or order management data. I would suggest that online retailers get the most that each piece of software has to offer. Use “Word” for word processing even though you could probably use Excel. Use “Powerpoint” for presentations even though you could use “Word” for that. By using the correct software application for its chosen purpose you will get the most out of that application, even if it doesn’t compare in many ways to another application. “Keep your eye on the ball for each application”.

5. Is there a “right” and “wrong” way to acquire analytics?
The more accurate the analytics, the better. However, best practices for analytics would NOT in any way interfere with the site’s performance, or other marketing efforts. This principle is best described when considering quantum mechanics. It is virtually impossible to “view” the behavior of atoms without interacting with them, thereby changing their behavior. The same can be said of analytics – for example, many providers of analytical tools will send product data through the various marketing channels, but will alter the product url, or product page to be something within that provider’s site instead of the original product URL at the shopping cart. Then, when the perspective consumer clicks on the link, they are taken to the analytical provider’s tracking page, the click is tracked, and then the consumer is forwarded to the original product URL or page. The consumer typically does not realize this occurred. So what’s the problem? The product URL which appears at the marketing point of origin is NOT on the merchant’s site. But the link should be increasing the merchant’s popularity with respect to online links, one of the parameters which increases rankings on Google, Yahoo! et al. So, the analytical tool should actually help to increase popularity of the merchant’s site, but won’t if the analytical provider is employing the methods discussed above.

The proverbial bottom line is that any online retailer that is doing well WITHOUT analytics is flying blind, and will likely incur unnecessary valleys in their marketing performance. We would like you to use Chanalytics(sm) by MerchantAdvantage, but ANY analytics is better than no analytics! By reviewing analytics, the trained online retailer’s eyes can see much more than the provider of the analytics tools. The retailer will eventually be able to see the answers to their marketing questions much as the cast of the Matrix could see people and places in the green code on their computer screens. More importantly, once they have found successful niches in online marketing, they will be able to re-create these successes over and over again as the formula which worked was found by the retailer, not an outsourced third party.

For information on how MerchantAdvantage may help your business grow, please contact us:
Chip Arndt
Executive Vice President
Business Development and Strategy
305.895.9466 x113
partnerships@merchantadvantage.com