October 12th, 2009 by Brant Barton Co-Founder and Chief Innovation Officer
eMarketer reported last week that in the first half of 2009, the UK became the first major economy to see online advertising spending surpass TV ad spending. According to the report, the Internet accounted for 23.5% of UK advertising revenue vs. 21.9% for television. This is big news and not without controversy, as the UK TV lobby is protesting the aggregate number reported for Internet ad revenue, which includes paid search (the largest category by nearly 3X), online classifieds, display media, and other formats.
While the experts argue over the math, I think that UK (and US) advertisers and consumers should celebrate this milestone. While the US Internet-TV ad spending gap is still sizable, the steady migration of dollars over the coming years will drive Internet industry growth and evolution, yes, but also a more customer-centric experience for consumers faced with hard decisions in an increasingly complex economic and marketing environment. Advertiser spending on social marketing/commerce applications is still significantly smaller than the leading categories of Internet ad spending mentioned above. However, as we have witnessed firsthand over the last 4+ years of building Bazaarvoice (and shared on many occasions on Bazaarblog), the social category offers perhaps the greatest opportunity for advertisers to think bigger than clickthroughs and conversion rates and instead focus on wholesale cultural and operational transformation of their businesses using the voice of the customer as a muse.
This news from the UK is timely, as we just wrapped up our second annual Social Commerce Summit in London, the European complement to our US Social Commerce Summit held in Austin every year. We now serve over 120+ customers across Europe, and the London Summit was a sold out event. In the coming days, we will share highlights from the Summit here on Bazaarblog!
September 12th, 2008 by Sam Decker Chief Marketing Officer
Internet Retailer and Vovici recently released a study to find out the top emerging technology priorities for online retailers. As retailers are feeling the heat (or lack thereof!) of a slow economy, Ratings and Reviews rose to the top of their priority list. Emarketer reports:
Letting customers rate products on e-commerce sites is the top Web 2.0 spending priority, according to online retailers in the US surveyed in August 2008 by Vovici for Internet Retailer. Well over one-half (57%) of online pure plays said customer ratings and reviews were a priority for them.
Internet Retailer said online merchants wanted these features because they drove sales. It also noted that PetsUnited, which operates 10 e-commerce sites, reported a 50% jump in average sales when shoppers ordered right after viewing a video, compared with after viewing just text and pictures.
“Shoppers that view videos and read customer ratings and reviews spend more,” said Corbin de Rubertis, president of retail widget developer Qponix, in the Internet Retailer article. “Even in a weaker economy, retailers are going to spend money on better technology if it drives traffic and converts sales.”
Emarketer also recites a study we launched with Vizu highlighting the importance of reviews to retailers:
Last year I wrote this article highlighting why ratings and reviews are the highest NPV marketing investment, and why they should get launched before the holidays. Coincidentally I wrote it one year ago yesterday, and it’s still as relevant. You’ve got a few months left. Now is the time to move!
June 23rd, 2008 by Brant Barton Co-Founder and Chief Innovation Officer
Several weeks back (this post has been percolating for a while), I received or interacted with three different examples of "green marketing" in a 24-hour period.
The first was a banner ad from The Home Depot, which promoted two eco-friendly products, encouraging shoppers to "Go Green & Save."
The second was a catalog from Design Within Reach, which cleverly asked "What is Green?" on its cover and featured, again, eco-friendly products, many manufactured from reclaimed materials.
The last was a direct mail piece from The Container Store, which featured green products from Umbra, a brand I really like.
As an eco-conscious consumer, I appreciate any company's genuine efforts to go green. Ideally, this transformation should start with the company's selection of materials, suppliers, and manufacturing processes, so I'm a bit skeptical when I see green marketing without having any knowledge of the company's environmental track record. Green marketing elicits a Pavlovian response from many consumers, so the lure of easy money makes me wary of "greenwashing" campaigns. And I'm not alone. Just Google "greenwashing" and take your pick of websites dedicated to blowing the whistle on companies that stretch the truth on their environmental resumes.
(more…)
February 27th, 2008 by Brant Barton Co-Founder and Chief Innovation Officer
Yesterday's edition of the always informative eMarketer newsletter featured new information on the enormous influence the Web wields over the offline economy. The title of this post says it all. eMarketer's Multi-Channel Retailing report found that online product research by "Precision Shoppers" is driving far more sales in the offline world than online. By eMarketer's estimates, Web-influenced store sales totaled $471 billion last year compared to just $136 billion in e-commerce retail sales. "Precision Shoppers" are those that leverage the wealth of product information available online, from price comparison data to consumer reviews, to find the very best option for an intended purchase.
eMarketer's insights complement findings from a joint research study conducted by Bazaarvoice and Keller Fay Group late last year:
Sixty-six percent of respondents that had posted feedback online about a product or service had done so at a retailer website for a purchase made offline.
It seems that "online product reviews" are far more reflective of offline purchase decisions than online, a fact that should help e-commerce teams command a bit more attention and budget from their brick & mortar counterparts. With the adoption of ratings & reviews, product questions & answers, and customer stories (read about our latest product, Bazaarvoice Stories) about brands themselves, e-commerce websites are now competing with each other not just on price and product selection but on the quantity, quality, authenticity, and relevance of the information they offer to help shoppers make a purchase, regardless of channel.
As more of our multi-channel customers begin to leverage their customer-generated content beyond their websites, in catalogs, retail kiosks, in-store signage, and other offline marketing vehicles, the Web's influence on offline purchasing could outpace even the rapid growth of online spending.
February 2nd, 2008 by Brett Hurt Founder and CEO
Browsing Yahoo! Movies this morning, I noticed that the most helpful review on the new 'Rambo' movie is a rant on critics. This review currently appears at the top, as 'most helpful' is the default sort for Yahoo!'s customer reviews. When you read this review, you will notice that it is virtually "content free", telling you almost nothing about the movie itself. It is just a rant.
I single it out not because I hate critics but because it was voted 'helpful' by 205 out of 236 people. In other words, this reviewer is speaking for a population of customers who simply ignore critics and trust each other instead.
Consider this ground-zero proof on a trend that continues to take hold. We have briefed you on research about trust many times, and here are five of the 'most helpful' Bazaarblog posts on this topic:
- Customer Recommendations Are Most Trust Forms of Advertising
- 80% of Online Customers Trust Brands More with Reviews
- 84% Trust User Reviews Over a Critic (MarketingSherpa)
- 78% of Online Consumers Have More Trust for Brands with Reviews
- Can Customers Trust Online Reviews?
Regardless of whether you trust them or not, critics do make us laugh with their witty writing style. I got a chuckle out of Chris Farnsworth's quote on the movie, "Stallone looks like an overcooked Ball Park frank". The lay customer may not be as witty, but they may be more trusted and therefore more influential at driving box office sales – and that's what really counts.
December 11th, 2007 by Brant Barton Co-Founder and Chief Innovation Officer
Yesterday's eMarketer Daily linked to a research article titled "Cashing In on Consumer Product Reviews" that summarized stats on the use and influence of user-generated product reviews from a few different research reports. Here are the highlights:
- Avenue A | Razorfish reports in their "Digital Consumer Behavior Study" that 55% of surveyed Internet users check other people's opinions online when researching products, topping product comparison charts (22%), expert reviews (21%), and shared shopping lists (1%). If you are currently evaluating site feature investments for 2008 and beyond, get your hands on this report and read more about why you should invest in ratings and reviews.
- Internet Retailer reports in "Web Site Design, Content and Rich Media" that consumers that read product reviews are likely to spend more online. The largest group of surveyed users, 27.1%, reported spending 5-10% more, while almost 7% reported spending 20%+ more! Need a business case for reviews? Do the back of the napkin math for your business. For a $25MM online retailer, if 7% of buyers spent 20% more, a reviews solution would pay for itself multiple times and easily fund investments in other site features.
- Deloitte & Touche USA reports on the influence of reviews on purchase decisions by category. Every listed category shows significant influence, from electronics (45% of respondents influenced) down to motor vehicles (13%, the lowest, but still significant).
December 5th, 2007 by Brant Barton Co-Founder and Chief Innovation Officer
eMarketer reported today that six in 10 surveyed US consumers share product advice with friends and family, a finding from Forrester Research's NACTAS Benchmark Study.
While the highly sought after "Influentials" segment garners much of the focus of word of mouth marketers, Forrester's findings provide ammunition for more broadly focused approaches to enabling and capturing word of mouth. Rather than thinking in campaign terms, brands should be seriously evaluating tools and technologies that can widely capture consumer opinions, enable deep analysis of what these opinions reveal about brand strengths and weaknesses, and facilitate the distribution of word of mouth to those who actively seek it, from the brand directly or from other sources.
Fortunately, marketing spending trends suggest that this is in fact happening. The eMarketer brief also states that spending on word of mouth marketing totaled $1 billion in 2006. Small by traditional marketing standards but quickly growing, with 2006 spending representing a 36% increase over 2005.
October 11th, 2007 by Brant Barton Co-Founder and Chief Innovation Officer
Yesterday, eMarketer reported on a Nielsen study that found that consumer recommendations are the most trusted form of advertising, not just among US consumers but worldwide. Over three-quarters of those surveyed – in 47 markets across the globe – rated recommendations from consumers as a trusted form of advertising vs. just 63% for newspapers, 56% for TV and magazines, and 34% and 26% for search engine ads and banner ads, respectively. The chart below shows how consumer opinions and recommendations stack up against several other forms of advertising, and the difference isn't slight.
What's even more interesting to me is that "traditional" forms of advertising, like TV and radio, scored significantly higher than the predominant forms of online advertising – search and banner ads – in spite of the sophisticated targeting capabilities of search and display. After all, isn't the goal of online ad targeting – behavioral, contextual, etc. – to provide a level of relevance and utility that excuses the intrusion of advertising? Trust would seem to follow, but not so. Consumers know the difference and they put their faith in each other first and foremost.
These findings may explain the stellar case study results we've seen from several of our clients – higher conversion rates and significantly lower return rates on products that have customer reviews. We are seeing similar results from our Ask & Answer solution, not to mention significant reduction in call center volume and costs! In addition to selling each other, customers are also highly effective at servicing and supporting each other with product expertise and answers to tough "buy or bail" questions that arise when shopping online. Can other forms of advertising do that?
July 3rd, 2007 by Sam Decker Chief Marketing Officer
This week eMarketer published a report: The Rising Roar of Word of Mouth.
The report shares the following stats:
- 91% of US adults regularly or occasionally seek advice about products or services.
- 94% of US adults regularly or occasionally give advice to others about products or services.
- What’s most interesting, according to DoubleClick research (now owned by Google), is that “Recommendations from friends” was the “Most worthwhile” source of promotions over 22 other vehicles.
(more…)
