Interesting article on Marketing Vox about the effectiveness of affiliate marketing. I have suspected for a long time that managed affiliate marketing programs work for 10% of merchants and are a waste of money for the rest. According to this article, I was correct. Last year, 15% of etailers had 10,000 or more affiliates; that number has dropped to 9% for this year. The firms that do run affiliate marketing programs are getting more out of a limited pool of affiliates. They are also seeing significant conversions into sales from traffic generated by these choice affiliates; some as high as 5%.

So the lessons learned from all this? Do not put a whole lot of money into large managed affiliate programs. Rather, focus your energy on a small number of highly qualified traffic sources. If you nurture these sources and generate loyalty, you could see some pretty good conversions down the line. Don’t expect it to happen overnight though. Affiliate marketing programs take at least six months to develop. If you want quick results, you should turn to blog marketing.

I saw an interesting article on the Site Pro News blog. Jeremy Bader was discussing the possibility that mobile devices, and in particular the new Iphone from Apple, would contribute to a fundamental shift in the way websites are designed. With the increased capabity of computers and the availability and popularity of video, search engines will need to be able to recognize and rank dynamic content and multimedia. As the engines shift, the sites that react the quickest will see the best gains. Just like the companies that embrace video optimization and blog marketing. They also will see a competitive edge over their less enlightened peers.

According to a recent report by Comscore Networks, Europeans spent more online in the 2006 holiday season than their US counterparts. The Germans spent over 5 billion euros, the Brits 4 billion and the French almost 2 billion euros.  Spending in the US was around 18.8 billion euros which is more than all of them put together, but if you look at per capita spending the numbers are slightly different. The Germans lead the pack with an average of 106.69 euros per person; the Brits spent 106.38 euros per person;  the Americans spent 90.75 euros and the French spent 64.36 euros per person.

So what does this all mean to US retailers? For starters, any assumption that online spending in this country has reached critical mass is just plain wrong. There is still a long way to go just to catch up to our European counterparts in terms of internet spending. And a lot of money still to be made online. It also tells me that there are markets in Europe that US retailers should and could be reaching. I would suggest that the best way to do that is with viral marketing and the use of video.

It was only a matter of time before etailers started capitolizing on the popularity of online video. Not only are companies using video to promote their products, but they are also putting links into the ads that lead into etailers websites. Now consumers watching a video clip of the new Die Hard movie will be able to click on Bruce Willis’ watch, car or gun and be directed to a website where they can buy that exact product.  This service, from Videoclix is called “hot spotting” or “plinking” and will be available soon. This will open up paid search to a whole new world of revenue streams, and will make video and video optimization increasingly important. The more places your video goes, the more exposure your ads will receive. Imagine having this technology available in all video search results, regardless of where your listing is positioned.

In our daily dealings we have the opportunity to look at hundreds of retail sites. One of the things that strikes me repeatedly is the lack of attention that a lot of web site owners will pay their to conversions into sales. There are a lot of factors feeding into high conversions: the look and feel of the site, the layout of the pages, the call to action, pricing etc.

One of the most fundamental things you need on a site is contact information. A lot of retailers have no phone number on their site. I would not do business with a site that didn’t list a phone number. Imagine how a first time internet user feels when they can’t reach out and contact the site owner. It costs companies millions in lost sales. Then there are the sites that have contact information, but no voicemail. The phone just rings, or is answered in an unprofessional way. I have seen companies that will spend thousands of dollars on paid search, but neglect to spend $50 on a professionally recorded outgoing message.

There is absolutely no point in driving traffic to your website if you are going to ignore these fundamental best practices. Even if you never answer your phone, record a friendly professional greeting, and turn those missed opportunities into sales.

Interesting article on Marketing Vox on how Proctor & Gamble is using social networking to gain some insight into the buying processes of primarily women. They are creating online forums around some of the issues that women are passionate about like breast cancer and careers and then monitoring communications on these issues to pick up information on likes or dislikes. Sounds a little big brotherish to me, but it is proving to be highly effective in determining future markets or areas of demand for P&G’s products. One of the sites is Capessa, and was put together with Yahoo. Sounds like big corporate America has a new smart way of figuring out what people want based on their opinions on hot topics.

Sound like an expensive marketing tactic available only to the big dogs? Not at all. Any retailer in America can do this with a blog…..and some direction from a good blog marketing company.

Interesting article from Pew Internet. Apparently, over 55% of all teens aged 12-17 use online social networking sites. 48% of teens visit social networking sites more than once a day,and  a whopping 91% said they use these platforms to stay in touch with friends. Myspace is by far the most popular site for this demographic, with over 85% saying they updated their MySpace profile most often, with Facebook coming in a distant second with 7%.

So what does all of this mean for etailers? It means that consumers in general and teens in particular have a new way of forming opinions and sharing information. And what are they most likely to share? An online video that catches their attention. Etailers who are not using video and video optimization techniques to pique the interest of this prized demographic and crack into their MySpace world are missing a tremendous marketing opportunity.

According to an interesting article from Online Media Daily, Yahoo has formed a partnership with Dash Navigation to integrate Yahoo’s local search function into the company’s wireless navigation system. This will allow people to find local businesses and products using Yahoo local search right from their cars. The product is due to launch in California in the spring.

The driver, hopefully sitting in a stationary vehicle, will be able to tap into local wifi networks and conduct searches just like they would on their pc at the office. No word yet on whether the search algorythm will be the same, but there will be one crucial difference. In this brave new world of mobile search, there will be no paid ads.

This will put more pressure on etailers who rely on ppc to kick the habit and get their sites positioned in the natural or organic search. It will also be interesting to see if video optimization will play a part as companies release videos and podcasts that target defined local geographies.

In a related story, Google is said to be working with Volkswagen to install Google earth into VW’s.

Emarketer recently came out with its predictions for 2007. Here are the highlights;

Online ad spending will top $20 billion, an increase of almost 20% from 2006.
Online video advertising will see a dramatic upturn.
Social Networking sites will see $1billion worth of advertising dollars.
Positive word of mouth advertising will become increasingly important for retailers.

The trends are clear. Companies will spend more and embrace all new technologies available in order to grab a larger piece of an ever growing online sales pie. The early adopters will see the largest gains.