Before I start, yes I know, a campaign is only as good as the person who has created it and I like to think by now I know how it works, so this is (in my opinion) an honest overview of Adwords effectiveness, bearing in mind the costs below don’t take into consideration my time managing them.

Anyway, Adwords. It is seemingly becoming harder and harder to justify the spend, and the temptation to spend more, on the advertising platform for some of the products I am selling.

What once seemed like the holy grail a few years ago has become saturated with advertisers, trying to outbid each other and the costs have spiralled. Add to the mix the sheer number of retailers joining the market and it is becoming a little overcrowded.

Below, is a graph of sales on one of my online shops. The average sale value is about £30-40 so every click that I am paying for needs to offer real value.

But, sales through Adwords are on the decline vs. costs. with an averaging of 40% of the sale going on Adwords. This is still profitable for me overall, but only just.

Now, I could argue that I am perhaps getting buyers come back having found the site and bookmarking it rather than buying then and there. I could also factor in repeat sales from returning customers (I also utilise opt-in e-mail marketing).

But, I have to wonder if online pay-per-click is losing it’s appeal as a viable sales route, at least for this product range, or am I missing the point?

Yahoo Adverts comes out even worse, actually costing me money to run!

My answer, and I wish I had more time to spend on applying this, is two-fold.

Content - to attract traffic. I am talking words in articles, videos on You Tube, etc. Basically, the creation of quality content that will age like a fine cheese, attracting traffic and links, raising my profile for specifics.

Social Media and Online PR - While a few people moan about Facebook and privacy issues, we are having quite good success off the back of it at a fraction of the price of Google. There is also room to spend interacting with forums, etc. And, you can’t beat a good bit of old fashion PR, sending products to people who may write about them, picking the right writers for the right audience.

Organic seems to be the way to go.

The 10 most common e-commerce mistakes, taken from a report from E-Consultancy.

1. Poor search/filtering options
2. Hidden checkouts
3. Asking for unnecessary information
4. Poor customer service / contact options
5. Making delivery charges / returns policies hard to find
6. Compulsory registration
7. Poor search engine visibility
8. Pop-ups SUCK
9. Use of Flash
10. Displaying out of stock products

I agree with most of these apart from number 10.

Setting items out of stock is logistically quite hard and conflicts with point number 7 about good search engine visibility. Search engines need to know if your page exists or it doesn’t.

I guess the way around this is to take the page out of the navigation, but that wouldn’t eliminate a search link.

Also, it depends how the “out of stock” is displayed and suggested. I recently changed the sign on the Beauty Shop to show as “back in stock soon”.

One of the biggest issues small online retailers face is the price of the products they are selling and the balance between making sales and making a profit.

If you are selling products of low value, the cost of aquisition and the time to administer each sale will require you to sell a large volume. This may require higher advertising spending, which in turn requires further investment.

On the other hand, if your product range is priced high, you don;t have to sell as much to make profits, but you will still come across people who do not feel comfortable entering their payment details for high value, despite the fact that the value is irrelevant in terms of security.

My own experience shows the need to expand to offer a larger range of products (as long as the shop remains focussed). This approach attracts a larger number of search visitors.

The biggest advantage however, as long as your design allows, is the potential up-selling and cross-selling opportunities.

Give me a paint brush and I know a picture will not paint itself. If I pick up the brush to paint a picture, it may be bad, but each time I practice and learn new techniques, I know that it may get better. That depends on my application - the time and effort I put into it.If I keep tracking my progress I will see results. I have all the tools to do the job, I just need to develop my own skills to create the painting.

It’s the same with an e-commerce website. There is no excuse for a company to buy a solution and not learn how it works, develop their own techniques, see what works and what doesn’t and implement their own retail knowledge into the mix.

In fact, it’s not unlike a high street shop. If the products aren’t right, there’s no advertising or marketing and the customer service is non-existence, what do you think the result will be?

So, when someone comes to me and says “My e-commerce website isn’t selling something so it’s your websites fault”, I can’t help thinking that the problems are deeper. It happened to me this week and that the person has given their solution six months with little input, before pointing the finger at me, I actually find quite amusing.

I’m not a shop keeper but I am also amazed at some of the ’shop keepers’ I meet. They can see the world changing… as it continues to pass them by. Rant ends….

Being a seller online, you are bound to get customer complaints (especially with Royal Mail in the past couple of months) and as time consuming and costly it is, it’s a relevant part of an online shop business to offer great customer service.

E-Consultancy continues to highlight the ongoing importance of this issue.

With my boot on the other foot, I recently bought some photographers lights from Karlu, a UK based specialist shop and it is an example of how not to do it. In fact, I learnt a lot about improvements for my own business.

The Karlu website is clear and concise and my order was easy, so from that point of view, top marks.

But the follow up has not been so good.

A few days later, I had not received my package and tried to call the ‘Sales Helpline’, which, even during working hours, was ringing off the hook. This obviously made me very nervous and I began to worry about my payment and order. So I e-mailed - with no response.

The next day, the parcels arrived anyway but two of the six bulbs were smashed. So I contacted them to ask them where I stood. Again, the phone rang off the hook. And, four e-mails and a six days later, I have still had no response and had to buy some more lamps from another shop through Ebay.

Now, I know (and understand) that Karlu were moving two weeks ago, as their website proudly states, and I can imagine how a move causes disruption. But, that is not my problem, I have my own schedule to keep.

To me it is like falling at the last hurdle.

The hard work (the sale) has been made. But, the easy second sale, which I also need to make, has been lost. Taking into account cost-per-acquisition with advertising to get me in the first place, the investment was wasted.

They could have had a loyal customer, now they have an angry one… with a Blog.

A bit like all companies selling online.

…and why I’m hoping a crash is on the way.

I am beginning to think that success using Adwords is no longer viable with some business models. I use Adwords on a number of campaigns for clients with varying success, some of it with very good returns, but the overriding trend I am seeing is that clicks are costing more, making Adwords a harder marketing/advertising route to profit from.

Supply and Demand

Like share dealing on the stock market, the better a keyword performs, the higher the cost-per-click becomes.

As more companies use Pay per click advertising. picking up the most generic keywords, these prices have gone up. Supply stays the same so the demand pushes up the price and what cost pence last year, may be costing pounds now purely down to the number of people you have to compete against.

Amateur traders

With any trading, there are small business and inexperienced people trying to ‘trade’ and Adwords is no different. Beginners will tend to go for the most obvious keywords, partly based on the hype and anecdotal stories of success they have heard. That’s fine if they want to waste their money, but these people are partly to blame for the increase in prices. But, then there are also the people who still know what they are doing.

I understand landing page content efficiency and keyword and “key phrase” relevance but the plain truth is that it’s more expensive now than it used to be and the prices keep on rising, no matter how good the algorithm.

You may decide to go for more specific terms that don’t generate as much traffic, but give you better quality click-throughs. This is all well and good, but does it deliver the returns for your business. In fact, can it deliver results cost-effectively for your market full stop?

Different Business Models

One of the key differences, perhaps, to the business that I am trying to do through Adwords, is where the money gets made, my customer based and what I sell.

For instance I run a couple of online shops. My shop may be selling online but it makes money by selling something tangible in the real world. Other business models make money purely by the amount of people that hit their site eg. through page impression advertising.

So, not only are you competing against other companies selling what you sell. You are also competing against companies pulling traffic so they can make money through further advertising on their sites. Suddenly your competition just doubled and pushed up the prices for advertising even more.

This will continue until people don’t make money from their advertising and either go bust, or give up on that route of traffic… and I hope that’s soon.

The Long Tail is not 100%

As mentioned above, one argument with keywords is the long tail. The idea, simplistically, is to go after lesser searched terms because although there are less searches made for these terms, they are arguably more specific, wide ranging and cheaper.

I do agree with the Long Tail principle, but like most things, it is not 100%. For instance, our beauty shop, attracts mainly women. Many through consumer portals, such as Orange and AOL, with very generic terms.

I have disposed of many generic brand name keywords on the beauty shop recently to reduce the increasing costs and have stripped down lots of other campaigns, reducing budgets, even though Google is willing to tell me how I can get more traffic. Unfortunately for me, it’s not some sort insider trading, because they share the same ‘great’ keyword research with everyone.

There is no doubt that Pay Per Click advertising has changed the game for a lot of people for the better, but like most forms of marketing, it has a shelf life of time where real profits can be made and perhaps that short bull run is coming to an end.

On the high street, retailers spend enormous amounts of money getting their customer experience right. But, this doesn’t necessarily translate to the web, for large and small online retailers. Here’s three big problems highlighted this week…

Failing To Provide Contact Details

In a recent survey by E-Consultancy:

• 60% of UK online retailers provided no telephone number on their website
• 43% displayed no business address
• 39% had no contact email address
• 30% of sites profiled provided no telephone number or email address

To reinforce the importance of these failings, they highlight a recent UK survey suggesting that 50% of shoppers wouldn’t buy online without contact details.

No Delivery Options

Highlighting the same survey on Retail Bulletin, 11% of online retailers provided a free postage or delivery service while 15% mentioned offering a next day or Special Delivery service. Of the delivery companies named on the websites Royal Mail services (including Special Delivery) was identified in 17% of cases.

One of the big problems with have with our online shop is deliveries. The costs to us as a retailer are quite high and because of the unreliability of the postal service we moved over to registered post at an additional cost. Because we offer free delivery on orders over £30, we need to make sure it gets there. But, it is amazing how many customers do not take responsibility for the delivery at all.

We have had customers contact us that they have not received the parcel leaving us to chase it, only to find out that they weren’t there to sign for it and a note had been left by Royal Mail. This sometimes results in having returned post, only for us to have to pay again to re-deliver the products.

The new version of Boomerang from The Escape should allow us to explore different carriers, but as Jacqui mentions on The Escape Blog, some carriers are becoming more inflexible in terms of their services.

I Can’t Find The Checkout

You’d be surprised how obvious (or not) a problem this is, especially with third party tools and payment systems. I was sent to a shop last week and didn’t know where to start even looking for products.

[it’s actually funny because as I write this article, I just zipped back and there is anchor text in the main body but last time I just couldn’t see it. I wonder how many customers they loose through that?]

Bob Chieffo has some ideas how you could improve this.

Another interesting article on Copyblogger (one of my favourite blogs) about breaking down the objection barriers people have when visiting an e-commerce website. Brian cites examples such as:

This can be done with landing pages, but also with whitepapers, reports, ebooks, email tutorials, blogging, audio and video seminars and webinars. Simple and clear language, benefits and the features that support them, testimonials, specific supporting data, a sweet offer and risk-removal via solid guarantees all help you overcome objections and build trust. The more a prospect trusts you, the easier time you’ll have bypassing barriers to the sale.

It goes to prove that the online shopping experience goes beyond design, products, etc. and the elements of pyschology (already well used in traditional retail) are very much needed for online success.

Yes, it’s additional cost and yes, it makes a difference that is ongoing. Analysing your web pages, what they say and the way they say it, can make all the difference.

A guy I have dealt with this year is giving up on his E-Commerce website after trying to sell some of the stock from his single high street retail outlet online. Less than six months later and an investment of £2,300 the website is making sales, but obviously not enough to keep it up and build the sales. The problem is this (and he is not unique).

He has a small shop in a town and a flow of footfall giving him a captured buyer. That model is centuries old and he can accept the way that works. The online shop has low overheads and six months  is not realistic in building up an online retail business.

He can open the door of his high street shop, let a shopper come in, browse the store; pick up his products, feel the quality and pay the premium he charges to buy it there and then. The experience is personal and the shopper has emotionally invested in the purchase. After all, they are having to make the effort.

Online, the interaction is different. The tables are turned in terms of effort and people won’t pay price premiums because:

1. They can buy the same products without such a high markup from a number of competitors just a few clicks away.
2. There is nothing emotional to create the engagement between the shop and the buyer.

Consumers want more online, or less if you take prices into consideration. It’s different from bricks and mortar retailing and a different set of emotional engagement is required. It’s not expensive to generate and it can create excellent value in terms of building up a regular client base.

It’s called added value.

With competitive pricing already a strain for online shops, maximising profit means looking to leverage your existing customer base as much as possible. And, with the increasing costs of pay-per-click with competition, wouldn’t it be good to become less reliant on Google?

Customer Loyalty

It’s cheaper to keep customers than market to new ones so why not make the most of the ones you have? With databases and online profiling it’s easier to segment your customers into groups and direct your sales message using cost-effective online e-mail marketing tools, sending more targeted messages.

It means that when you send a sales offer, it can be more specific. The connection is that much stronger with your customer. They subscribed to that list so are more inclined to follow through any call-to-action. I did a project earlier this year which worked a beauty.

Personalisation

As well as creating targeted groups, you should also personalise your messages. Why not go one step further and send vouchers on birthdays or anniversaries?

Moonpig got me onto this a few years ago with a birthday calendar. I don’t ever forget a birthday now because I get an e-mail a week before the date and 9 times out of 10, I go to them to buy the card.

Leverage and Word-Of-Mouth

The key to personalised customer information is not to ask for too much up-front.

All the successful retailers online simply require an e-mail address and name to start with and move on from there. Don’t scare people off with lots of questions you simply don’t need.

As people begin to trust you (it’s all about trust), you can then leverage that trust by asking for recommendations; but only when they feel comfortable with you. At the end of the day it’s their reputation at stake, so they need to know that you will make them look good to their friends if they do refer you.

You can incentivise with referral schemes, vouchers and discounts, but people are much more canny than that, especially with their friendships.

A mixture works best. If they are prepared to refer you, offer them a voucher, and the person they refer. It lightens the load of expectation on all sides, because the financial benefit is shared. This makes it an easier buy-in for both parties.

Data Intelligence

The more you know about customers and their buying patterns, the more you can direct your sales message. It hails back to the one-on-one relationship shopkeepers used to have – “The Usual Mrs Perkins?”

With the sophistication of online databases, you should have this intelligence. An example for me was recently seeing that one particular customer ordered the same set of three skincare products, every three months on the beauty product website I run for a client.

If I direct a voucher to that person for those products at the right time, I am solidifying that customer as an asset. Yes, it costs me profit in the short-term, but I end up with a more engaged and loyal customer moving forward.

Sometimes, we concentrate so much on new business, we forget the assets we already have.

With a little concentrated marketing, we could be creating more business and more profit. We can also maximise word-of-mouth marketing, which is not only very powerful, it’s free.