This Week in e-Tail: October 8, 2007

October 8, 2007

This Week in eTail

Search Marketing

Search Engines Continue to Re-Invent Search via ‘Universal’ Concept
This time it’s Yahoo launching a revamped search engine last week as they try to gain ground on Google. What’s new? Like Google’s Universal Search, the new Yahoo Search will also present a wider variety of search query results to users — including an extensive array of information/pages/media like videos, online books and media sites/properties owned by Yahoo itself. Google, Ask, and Microsoft have already adopted the concept in some form on their search engines. This makes Yahoo late — again.

Why it Matters: The universal search concept is a radical re-defining of search itself — literally adding to user’s search page results — thus crowding out search engine results pages of Web retailers’ (and other Web publishers).

Performance Marketing

Performance Marketing Outpacing Other Internet Media
Sam Harrelson reports on the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers report released a Internet Advertising Revenue Report stating that “Performance Deals Outpace CPM Deals!”

The report breaks down which segments of the Internet advertising industry are contributing to a record $10 billion figure (first half of 2007 total revenue). Search jumps up a point from ‘06 to 41% and lead generation continues to gain traction, moving from 7% in 2006 to 8% in ‘07. Rich media (including video) rose two percentage points to 8% with the biggest gain. Classifieds and sponsorships models were lower in their ‘07 percentages as compared to ‘06.

Says Revenews.com’s Mr. Harrelson, “Perhaps most interesting to my performance marketing minded eye is that ‘CPM Deals’ were replaced by “Performance Deals” as the leading pricing model for internet advertising. In 2006, CPM deals comprised 48% of the overall total while performance deals (CPA, CPC, etc) were at 46%. However, in ‘07, performance deals make up 50% of deals while CPM fell to 45%. That is a very important shift in marketing trends which I haven’t heard very many people discussing because it is troubling to the old guard digital agencies who have so much invested in the CPM model.”

Why it Matters: The performance-based ad business (cost per click, cost per action/pay per action, etc.) is where all the action is and Google, in particular, is taking a leadership role in defining what performance marketing encompasses.

eCommerce Platforms

vCommerce Opens Up: A Sign of the Times
Open, open, OPEN! If you’re not up to speed on why or how the world is “going open” you would be wise to pay attention. The concept of open has come to retailers — open brands. Vcommerce Corporation, a provider of eCommerce solutions, announced its Vcommerce Enterprise Connector (VECTORTM). VECTOR enables retailers to access all of their favorite third party applications and “software-as-service” providers. Translation: you can use Vcommerce AND a variety of other solutions that you may already be invested in or want to invest in.

Like whom/what solutions? Today, over 50 vendors and services are integrated… like FAST (search), Omniture (analytics), and PayPal (transaction processing).

Why it Matters: The Open Source movement is real and increasingly powerful — extending beyond the geek crowd and into the world of marketing and Web retailing. “Open” is perhaps one of the most important thought-memes of our century.

Research & Market Trends

Internet Retailer Survey Reveals Opportunity for Drop-Ship eCommerce & Marketing Services Providers
According to a new Internet Retailer survey, Web retailers are looking to expand their business. The “how” is what’s newsworthy:

  1. 65.3% of merchants will launch new product lines
  2. 45.3% have plans to launch new e-commerce or micro-sites and 36.5% that will add services

Why it Matters: How will Web retailers accomplish this — logistically? There seems to be an opportunity here for companies like Shopster.com, vCommerce and Channel Intelligence to assist in bringing sellers together — so as to sell collaboratively and manage back-office headaches.

The Inevitable March of Recorded Music Towards Free
Via TechCrunch.com: “The DRM (digital rights management) walls are crumbling. Music CD sales continue to plummet rather alarmingly. Artists like Prince and Nine Inch Nails are flouting their labels and either giving music away or telling their fans to steal it. Another blow earlier this week: Radiohead, which is no longer controlled by their label, Capitol Records, put their new digital album on sale on the Internet for whatever price people want to pay for it.”

Why it Matters: If you believe in open markets and the Web as the great equalizer (and provider of Long Tail economic opportunity) then you understand the likelihood of Michael Arrington’s prediction coming true. “Pay for what you think it’s worth” may just fly when combined with music artists re-jiggering their business models to rely more on live performances to generate revenue (with recorded music as the “loss leader” creating demand).


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