For the first time in the history of modern web analytics, we are facing something so unprecedented it could skew ad spend projections for the next few years.
When I lived in New York I would take the JFK to SFO route at least once a month. One Monday morning while sitting in row 42 and watching “Escape from Alcatraz” I looked out of my window as we flew over the midwest United States and a thought dawned on me. It was then that I realized what Sam Walton realized when he started Walmart—the suburbs drive economies in ways cities can’t.
What Walmart Got Right
The genius of Sam Walton was that he was able to provide distribution points for people to obtain necessary products that they would otherwise not have access to.
What does this have to do with online marketing? Everything, ad strategies across the United States by design need to pivot to secondary markets. As a result, these strategies will be the game plan that every online marketer will follow for the next 2-3 years and possibly longer.
One of my favorite parts of Google Analytics is the Multivariate Marketing Funnel. This report really gives a tremendous amount of insight into how people behave when entering a site via different channels. When looking at the “clicks to purchase” metrics sometimes we would see 3-4 paid clicks prior to a purchase. Because of this, product margins are reduced depending on the type of business/vertical.
Marketing Your Business
This year will be vastly different, what we are going to see is potentially shorter click paths to purchasing. If this is the case, it will be great for retailers who get this formula correct. The result will be a lower COGS across an entire product range.
Will Amazon benefit the most? It’s an interesting question. As of today, 50% of paid marketing ad searches start on Amazon and the other half on Google. Both ad technologies send the customer to the same place (the advertiser/brand/merchant website). Are consumers going to be more concerned about buying directly from a brand for a higher level of customer service or from a marketplace for convenience?
How Marketers Should Respond
As consumers are deciding between a marketplace and a branded website, how are online marketers going to respond to this change in the market?
One way that brands can help themselves is by figuring out what marketing platforms match their business needs. This includes assessing everything from SEO, SEM, to Affiliate Marketing. This critical thinking requires defining core tenants that account for COGS, overall sales goals, customer retention, and customer service capacity. Even defining seemingly smaller roles can have a big impact. Things like hiring the right shop floor staff, who pick-pack and ship products, and hiring the right analyst, who will analyze and report back on the findings.
Every online business can easily execute the aforementioned audit process in order to set themselves up for success. Understanding “where your customers are” helps brands figure out how to better serve their customers and understand their needs.