E-commerce Insights: Take a Page From the 14th Century

What online offers are most effective today? To answer this question, I’ll revisit 14th century Japanese poetry, tap the insights of experts at the three leading search engines and talk return shipping with two leading online retailers.

Today’s Advertising Haiku

Haiku is a Japanese poetic form dating to the 1400s. Haiku poems consist of three lines of five, seven and five syllables. When written well, these poems can pack a powerful emotional punch. Today’s online advertising equivalent of haiku is paid search advertising. Taking Google AdWords as the archetype, a pay-per-click ad consists of a 25-character title, two 35-character lines of ad copy and a 35-character display URL.

Seventy characters isn’t much room to convey an offer. Indeed, many retailers find success using the first 35 characters to describe their product, leaving just 35 characters to present their brand and offer message. Like haiku, paid search forces a merchant to distill its message to its essence. Like haiku, well-written paid search copy can pack a powerful marketing punch.

To understand which online offers matter most to a given retailer, study that retailer’s paid search copy. For a cross-industry perspective on successful paid search copy, consider these observations on effective offers from the search gurus at Yahoo!, Google and MSN:

1. ‘Official site,’ specificity and free shipping. Diane Rinaldo, Yahoo! Search Marketing’s retail category director, offers three recommendations for increasing clickthrough on paid search ads:
• When you’re the official site, use the words “official site.”
• Include a timely description.
• Tie your online copy into your offline messaging.

She highlights a fall 2006 ad from L.L. Bean:
L.L. Bean: Official Site
New for fall and back to school — backpacks, clothing, gear and more.

Here, she notes, L.L. Bean uses “official site,” which is timely and reiterates a current catalog theme.

Beyond the use of “official site,” Rinaldo reports that Yahoo! advertisers get better results with specific time limits to convey urgency. Copy such as “Sale ends Tuesday” or “Sale ends Dec. 15” receives higher click rates than generic copy such as “Fall Sale.”

In addition, specific pricing information and offer threshold limits both improve ad performance. Rinaldo cites this ad from J.C. Penney:
J.C. Penney Official Site — It’s All Inside
Labor Day Sale. Order now and get free shipping on orders of $49 or more.

2. Specificity is key on Google. Google retail head John McAteer agrees with Rinaldo that offer specificity is a crucial ingredient to search advertising. “Some retailers see a very nice lift in conversion, putting price in the ad copy,” he says. “What prevents more retailers from doing SKU-based advertising is integrating real-time inventory with bid management.”

Discounts work well, “but are scary for many retailers,” he says. An online coupon, which can be circulated too broadly, can cut into margins. And with it comes fraud concerns. McAteer recommends limiting online offers to those that can be safely distributed to anyone.

Payment method is an aspect of the online offer that’s most often overlooked by marketers, McAteer says. The Google Checkout badge often increases clickthrough rates.

3. Offer = relevance. “Including an offer in the ad makes it more relevant to a searcher,” says James Colburn, group marketing manager for MSN’s AdCenter. “An offer addresses a key desire or concern a searcher may have about buying a particular product. The more relevant the ad, the more likely it will generate a click.”

Colburn cites two recent shoe ads on MSN for their specificity and relevance:
Sketchers — Official Site
Save 15% on orders $65+ and receive free shipping! Use code MSNSUMMER

Shop For Shoes At
Shoes.com
400+ brands in stock at Shoes.com. Free shipping, returns and exchanges

4. Free shipping “both ways.” As for my own nod for most effective paid search ad copy, this Zappos.com ad on Yahoo! includes “official site” copy and presents three strong and specific offers highly relevant to buying shoes without trying them on beforehand:
Zappos: The Official Site
We offer free shipping both ways on shoes, a 365 day return policy, and a 110% price guarantee.

This ad is a pay-per-click haiku gem. Free shipping both ways “is an integral part of our marketing and business success,” says Andy Kurlander, Zappos.com’s senior marketing manager. Seeing free shipping as a marketing expense, Kurlander says, “We get a lot of e-mail from customers telling us they wouldn’t shop from us if we didn’t offer it.”

The cost of the 4-year-old program shows up in the company P&L statement on the marketing line, rather than the operations line.

Kurt Goodwin, senior vice president of sales and support at Crutchfield, notes that while free return shipping isn’t cheap, it removes a big obstacle customers often have when purchasing from the electronics merchant. “We saw a big lift in sales when it was first put in place 10 years ago,” he says. “We promote the offer everywhere: in the catalog, on the Web site, in e-mail and in chat.”

Paid search copy provides a magnifying glass on your competitor’s most important offers. Pay attention to the following areas:

• Study the competition’s ads, and note changes over time.
• To make your own offers most effective, be specific and relevant.
• Provide urgency with end dates.
• Consider the popular and effective free shipping offer.
• If your business model can support the cost, try a “free shipping both ways” test. «

Alan Rimm-Kaufman is president of the Rimm-Kaufman Group, a paid search marketing agency. He writes online at rimmkaufman.com/rkgblog.