E-Commerce Times talked with Joe Chung, CEO of Allurent, and writes about his top 5 must-have features for online retail in 2009.  Here’s a summary of Joe Chung’s top 5 (and an excerpt of his thoughts on #3):

1. Interactive Merchandising - non-technical business managers need to be able to easily add, change, and remove merchandising features your website.
2. Advanced Shopping Tools - e.g. ‘pageless checkout’ tools

Rich Media / Video
Improving your shoppers’ ability to more fully visualize and understand products through rich media is another critical focus area in the coming months and years. As with traditional catalogs, online shopping suffers from a fundamental disadvantage compared to physical stores: Our shoppers cannot actually touch, wear or use merchandise before purchasing. However, unlike print catalogs, we can do so much more than provide simple pictures.

Video has proved to be particularly effective by demonstrating how others experience products, enabling shoppers to imagine themselves in similar situations. Williams-Sonoma.com uses videos of expert chefs to demonstrate how cooking tools can be used to make some mouthwatering dishes. MartinAndOsa.com cleverly uses very short video segments, lasting just a second or two, to give its shop-by-outfit experience pleasing and eye-catching motion that gives a surprisingly deeper and more interesting perspective on its clothing compared to static images. Competitively speaking, the sites that incorporate engaging rich media will have a natural advantage over text-and-image only sites, which will look increasingly outdated as time goes on.

3. Advanced Search and Guided Navigation - new ways to let consumers find what they’re looking for
4. Social Commerce - facilitate conversations and interactions between your shoppers

Filed under: effective online video | 1 Comment »

From StreamingMedia.com:

In a new report called How Video Will Take Over the World, Forrester Research analyst James McQuivey encourages companies to embrace a world where video is everywhere.

[...]

In How Video Will Take Over the World, McQuivey lays out a vision for a world in which individuals will be able to watch video nearly everywhere on a variety of different devices, in which anyone will be able to produce video, in which remixes and mash-ups will be prevalent, and in which the video industry will become much larger and more influential than ever before. McQuivey calls this vision OmniVideo (OV).

[...]

According to the report, the technology needed to bring about the rise of OV—IP video delivery, mega storage, and cheap display screens—is already in existence, and core human needs will drive its implementation.

“I think a profound driver of everything we’re seeing is that video satisfies the brain in a way that other media just cannot,” McQuivey said. “And so, when you give people compelling video experiences and a relatively easy way to manage and control it, which the internet is, we see a huge response.”

McQuivey is particularly right to highlight the “core human needs” that drive video consumption.  Think about the news, for instance — most people get their news from TV rather than newspapers.  That’s not because TV offers better/richer/deeper information.  It’s because TV is more entertaining.

Similarly, while the text-based Internet is an amazing information resource, it’s also relatively less entertaining because it’s text-based.  That’s why many parts of the Internet are still mostly used by techie-oriented early adopters.  As video proliferates online, we’ll see increasing mass-consumer usage (and the presence of more mass-consumers will drive more energy into producing online video content).

There’s one more element of the “OmniVideo” vision to focus on — content creation.  That’s where SilverDock comes in.  We’re helping innovative companies like Amazon.com to create cost-effective and compelling video content.  We’re focused exclusively on making OmniVideo a profitable opportunity for eCommerce merchants, brands, and marketers.

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The Wall Street Journal reporting this morning that Google’s Push to Sell Ads On YouTube Hits Snags.  The problem, in my opinion, lies more with Google/YouTube than with the market.  There’s plenty of real innovation happening in online video advertising — just look at VideoEgg and Tremor Media for example.  And we speak every day with leading retailers who are intrigued and eager to explore the world of video advertising (and they have real dollars to deploy).

The problem is that YouTube’s DNA is that of a video sharing site, and Google’s DNA is in search.  Major acquisitions can be real trouble when a strategy shift is required and there’s no clear leadership to drive change.  Perhaps Tim Armstrong (a solid leader) can rally the troops around a new, advertising-centric model.  In that case, YouTube can take advantage of its pole position in this race.  Or, YouTube can continue to be Flickr for video (as Chad Hurley put it just two weeks ago)… while real innovators race past them to claim the lead in online video advertising.  Either way, the race is ON!

Excerpts from the WSJ article:

Wringing ad revenue from YouTube is proving to be a challenge for Google Inc.

Although users of the popular video-sharing site view clips more than one billion times on most days, the site hasn’t been as popular with big corporate advertisers. World-wide revenue from YouTube ads has fallen short of Google’s expectations this year, and is likely to total about $200 million for the full year, according to two people familiar with the matter.

YouTube is critical to Google’s campaign to extend its advertising reach far beyond text ads tied to Web searches, its revenue powerhouse. Google wants to sell more video ads and display ads on YouTube and elsewhere. It also wants to crack the television, radio and newspaper ad markets. Its target: the 90% of global ad dollars that don’t currently flow to the Internet.

[...]

Tim Armstrong, Google’s head of advertising and commerce in North America, is helping to lead the diversification push. When he dug into complaints from salespeople about Google’s system for selling YouTube ads, he uncovered another part of the problem: a sales system hamstrung by inefficiencies.

[...]

Twenty months after Google bought YouTube for more than $1.7 billion, Mr. Armstrong and his colleagues have begun to untangle the problems with its advertising operations — which generated 98% of Google’s revenue in the first quarter. The initiative is code-named “Project Spaghetti.”

The effort could affect how successful Google is at expanding beyond advertising tied to online searches. If Google is to maintain its torrid growth rate in the years ahead, it needs to tap other forms of ad revenue.

[...]

Google plans to begin accepting “preroll” and “postroll” ads, which will run before and after some YouTube video clips, according to one person familiar with the matter. The plan under consideration, this person says, would give companies that post video clips the option to sell such ads, and share the revenue with Google. YouTube has long forsworn such ads because consumers don’t like them. But advertisers consider them highly effective.

Filed under: Google, YouTube, market size, online advertising, video | No Comments »

From the Internet Retailer IRNewsLink for June 20, 2008, here’s the number one “hot tip” (out of 40) for online retailing success:

. 1. Web video has become a key tool in e-commerce. About 59% of Internet users view at least one video per week and viewing by women is expected to grow by 55% in the next five years, says Geoff Smith, vice president of ShopNBC.com and Adam Lindquist, director of business development at 2nd Wind Exercise Equipment. When deciding to pursue video, retailers should weigh if the product’s price point offers a good return on investment, they say.

Filed under: ecommerce, online retail, product video, retail, strategy, video | No Comments »

Here’s a thought: maybe online video ads will be a little different than TV ads!  The online TV world is slowly figuring out what that means.  The tantalizing possibility, of course, is that online TV ads will work better than regular TV commercials — not just for the advertiser, but also for the viewer.

Here’s one interesting opinion, from StreamingMedia.com’s Watchman column:

    The thing I most love that [ABC.com is] doing is their click-to-continue countdown clock. First off, the countdown starts as soon as the ad break does, not when the ad starts playing. Too many other sites tie the countdown to ad playback. The problem with this is what happens if the ad is slow to start? I, the user, then get penalized for your site not working. Whereas with the clock starting and counting down separate from the ad loading I never felt this sense of being penalized.

The real genius of this is the fact you have to click to continue after an ad. Because I’m in a lean-forward mindset I don’t mind having to click a button to continue, especially since in instances where the ad is slow loading it means I can click my way out of an ad before it finishes.

What’s really clever about it, though, is that it opens the opportunity for me to spend an open-ended amount of time with an ad. I have to admit, when I see one of those interactive in-stream ads I sometimes take the time to go through the whole thing, which often takes longer than the 30-second ad break. But I don’t mind as I’ve made the decision that I want to spend more time because I’m engaged with learning more about the ad.

Talk about a win, win, win! I win as the viewer, because I must be enjoying the ad if I’m watching it longer than need be, plus I feel like I’m in control and not being force fed. The advertiser wins because I’m spending more time engaged in the branded world of their ad, likely increasing the chances I’ll remember what the ad was about later on when making purchasing decisions. And in the end the content owner wins, as both the viewer and advertiser are happy with the experience they enabled.

So long story short, as the Watchman I’m all for in-stream ads. I’d much rather watch a few ads online than a ton of ads on TV, and ad countdowns are a very compelling way to hold my attention.

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Kevin Nalts has earned more than 25 million views on YouTube. How can you get visibility like that? Nalts has some tips for you in his excellent blog post, The Marketer’s Cheat Sheet to Viral Video.

Here is Kevin Nalts’ eight-step summary of how to do viral video (slightly condensed):

Step 1: Determine if your brand is right for online video.

Is your brand compelling and simple, or complex and direct-response oriented? If you’re a consumer-product goods (CPG), it’s a no-brainer.

Step 2: Keep it quiet!

The more senior management and attorneys you bring into a pilot, the more internal battling you’ll do before experimenting. Get some “air cover” from an executive sponsor, and avoid excessive internal scrutiny.

Step 3: Let go.

Your marketing message is critical to you, but if your content is driven by an advertising objective it’s at risk of being a flop. If you want to go viral, you’ve got to entertain first and promote subtly.

Step 4: Develop a creative brief.

Don’t make it too narrow, but give it some focus. If you ask people to make a funny video that includes your brand, you’ll get a lot of stuff that may or may not support your objective. But if you require creators to insert a series of “unique selling propositions” then you’ll end up with ads instead of entertaining videos.

Step 5: Engage creators. You have four options here.

• Option one, you can hire your agency to create video content. This gives you control, but most agencies (advertising, online, and public relations) lack experience in social media and online video in particular. I’ve found this to be extremely expensive, and often the agencies lack the expertise to make the videos “not suck” and get the videos widely viewed and “seeded” in the right places.
• Option two, you can hire individual amateurs. This gives you access to people that know the medium and have established audiences. This keeps things safer, but requires some oversight since you’ll need to interact individually with these companies or people.
• Option three, you can run a big, public contest. These are still quite common, but rather expensive. You’ll spend a lot on media to promote the contest (money I’d prefer to see brands use to promote the brand itself). You’ll also get a lot of lame content, but hopefully a few winners.
• Finally, you can contract with a third party that can represent a variety of proven creators. For example, a few large brands have contracted with Xlntads to help reach a collection of experienced amateur creators (note: I consult with Xlntads, and run its creative ad board).

Step 6: Get the videos seen.

If you want to buy media, you can run your videos as advertisements on a variety of sites. The second and third tier video sites are especially receptive to giving prominence to promotional content in fairly inexpensive media buys. If your content is good enough, you can hope it will travel “viral” style: people will share it with friends, post it on their blogs, feature it on their websites. There are three magic tricks that make this work:

• First, your content has to be good.

• Second, it really helps to leverage the distribution and audience of known creators. If an amateur has a popular blog or YouTube channel, this gives you a much better chance of wide distribution.

• Thirdly, you can “seed” it yourself or have the creators, third parties or agencies do it. This “seeding” involves reaching out to appropriate online properties, channels, discussions, forums and blogs. If it’s good content and you reach out to people politely your chances increase. I’ve seen bad videos that get lots of attention, and good videos that die. So this third step is non trivial and often overlooked.

Step 7: Evaluate.

Did the videos get lots of views and positive feedback? What did the comments say? Did people take a measurable action after watching the video? Keep your expectations in check: few marketing videos break into the millions of views, and very few of those viewers will take an immediate action (visiting your site, and making a purchase). These videos will, however, help your rankings via Google and other search engines. So maybe the next time a prospect is searching for your brand on Google, they’ll find your brand-friendly videos instead of a competitor’s content or disgruntled customer. This is a powerful and often overlooked outcome of a good video pilot.

Step 8: Scale as Appropriate.

Filed under: YouTube, effective online video, marketing, strategy, video, video campaign | 1 Comment »

For your reading pleasure, and oldie-but-goodie: an excellent article by Bob Tedeschi in the New York Times last year surveyed the state of video in online retail. He reports on early innovations from 1-800-Flowers, Blendtec, and Golfsmith.

I found this article interesting because, about a year ago when it was written, Tedeschi noted that “Whether [video] will help build customer traffic and sales over the long term remains an open question.” Today, it’s clear that video CAN build traffic and increase sales. We’ve seen excellent results for clients ranging from Amazon.com to FrontlineShop to Kate Aspen (Brad Fallon’s testbed for StomperNet research in Internet marketing). The trick is that video is a LOT more complicated than AdWords search marketing! Results are harder to measure and all over the map. Today’s challenge is to optimize online video campaigns (whether video merchandising or video advertising) to maximize your traffic CTRs and conversion rates.

Highlights from Bob Tedeschi’s NYT article, “Online Sellers Discover the Power of Video Clips”:

Online retailers have begun capitalizing on the YouTube craze, offering a video platform for product demonstrations, rants and raves, sentimental messages and just plain bizarre behavior.

…

For at least one company, user-generated videos have led to a measurable boom in business. Blendtec, a manufacturer and seller of blenders based in Orem, Utah, started late last year posting videos of the company’s chief executive, Tom Dixon, blending random objects, including wood, marbles and Mr. Dixon’s iPod.

The company posted the videos on its own site, WillItBlend.com, as well as on YouTube, and promoted them on various message boards and blogs. The marble video, which can be seen at youtube.com/watch?v=3OmpnfL5PCw quickly rose to prominence on YouTube’s entertainment section, and since then, according to Blendtec’s marketing director, George Wright, the company’s 30 videos have been viewed more than 11 million times.

“We’ve seen wonderful improvements in sales,” Mr. Wright said. “Online, we’ve absolutely eclipsed our records, and it just continues to grow and grow.”

…

Mr. Corey said this year’s new golf clubs include even bigger drivers than before, some with square heads. “It’s going to take people some time to understand the features of these,” he said. “What better way to do that than with videos?”

Videos also help increase Internet traffic. The more Golfsmith offers videos and reviews of its products, Mr. Corey said, the better the chances Google and other search engines will point users to Golfsmith when they type a product name into a search box.

Filed under: ecommerce, effective online video, marketing, online advertising, online retail, product demo, retail | No Comments »

Google’s coming under more fire from large advertisers over trademark issues, reports Emily Steel in the Wall Street Journal.  Watch for more automated trademark blacklists from Google and other major search providers.

 The problem is a tactic known as “piggybacking,” in which smaller advertisers use major players’ brand names, slogans or other trademarked words in the text of search ads to lure Web surfers to their own sites.

As a result, Google could face a backlash as it attempts to grab a bigger share of other advertising niches, including display advertising and video ads. Big advertisers say they may punish Google if they aren’t satisfied with the way the piggybacking dispute is dealt with. “This does play into our decision of overall spending — it has to,” says Michael Menis, vice president of global marketing services at InterContinental.

Adds John Gustafson, director of distribution and Internet strategy at Northwest Airlines: “If Google has an inability to help us resolve issues about abuses of our brand, that would impact our decision to participate in future forms of advertising.”

Filed under: Google, marketing, online advertising | No Comments »

A quick update on the 2007 holiday shopping season from JupiterResearch, courtesy of Phyllis Korkki of the New York Times:

A report from JupiterResearch indicates that retailers may want to take extra care with their online holiday marketing. The report found that even though overall holiday sales were sluggish in 2007, online sales remained strong. For November and December, online holiday sales reached $39 billion, up 20 percent from the year-earlier period.

The report also found that just 15 percent of online holiday buyers said they had cut back on online spending because of the economy, even as headlines were prophesying doom all around them.

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Why do people shop?

It’s not just to acquire things they want or need. People shop because it makes them feel good.

Cheryl Lu-Lien Tan has an intriguing article in the Wall Street Journal called The Neuroscience of Retailing: Research Shows Shopping Can Make People Euphoric:

Research shows that people often do get a high from shopping — the brain releases chemicals such as dopamine or serotonin when a person is stimulated by discovering something new, such as a handbag. Sometimes, aspects of the shopping experience such as friendly sales clerks, eye-catching displays or aisles that are easy to navigate can trigger brain activity that brings about these “euphoric moments,” says Dr. David Lewis, director of neuroscience at Mindlab International, a United Kingdom-based consultancy whose clients include athletes, retailers and advertising companies. “The brain is turned on by novelty.”

We started SilverDock on the premise that online retailers haven’t mastered the art of selling yet. In the real world, the art of retail ranges from Wal-Mart (”stack it high, sell it cheap”) to Neiman Marcus (”luxury experiences”). Retail at the low end is “stocking” more than “selling” — you put what you have on the shelves, consumers look at it, and they buy what they want. Retail at the high end is about emotional connection and fulfillment. The high-end retailer is the consumer’s consigliere, providing trusted advice about what goods will satisfy the shopper’s emotional needs. At its best, retail is about providing consumers with novelty, entertainment, and vehicles for self-expression.

Online retailers are stuck in the Wal-Mart mindset — we “stock” products more than we “sell” products. However the Internet provides an incredibly powerful, intimate medium to connect 1-on-1 with shoppers. Shouldn’t we use that power to sell better?

At SilverDock, we think video can help. Innovative retailers are starting to explore the power of video to merchandise, market, and connect with their shoppers. The next five years will be an exciting time as we collectively figure out how to realize the potential of online selling.

Filed under: ecommerce, effective online video, luxury, marketing, online retail, retail, strategy | No Comments »

The resurgence of Internet innovation since 2004 (”web 2.0″) has been driven by user-generated content and UI innovations. The secret ingredient for both is widespread broadband Internet access.

Unfortunately America still lags in penetration of fast, broadband Internet. Christopher Rhoads reports in today’s Wall Street Journal that local governments around America are racing to deploy municipal fiber-optic Internet networks, mostly to compensate for the failure of the big guys to serve fast Internet to small towns.

Among the 30 leading industrialized countries, the US ranks 11th in broadband-access affordability and 10th in broadband penetration. The WSJ shows just how far we lag in Average Monthly Subscription Prices for Broadband, as well as the Percentage of Households with Broadband Subscriptions.

(Source: Wall Street Journal; OECD; Information Technology and Innovation Foundation)

Just as important, broadband speeds in the United States are falling way, way behind other countries’. Check out the average broadband download speed for the US as compared to Japan, South Korea, Finland, and even France (in megabits per second, mbps):

(Source: Wall Street Journal; OECD; Information Technology and Innovation Foundation)

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The good people at Proclivity have gotten a nice bit of PR in the NYT tomorrow: Guessing the Online Customer’s Next Want, interviewing Proclivity’s CEO Sheldon Gilbert. Congratulations to Sheldon and the team!

SilverDock interviewed Sheldon Gilbert about Proclivity at last year’s Shop.org Annual Summit. Sheldon shared his thoughts on Proclivity’s behavioral targeting technology. Check out the whole interview here:

Some excerpts from the New York Times article on Proclivity, written by Eric A. Taub:

Among online retailers, pushing customers toward other products they might want is a common practice. Both Amazon and Netflix, two of the best-known practitioners of targeted upselling, have long recommended products or movie titles to their clientele. They do so using a technique called collaborative filtering, basing suggestions on customers’ previous purchases and on how they rate products compared to other consumers.

The search for a better recommendation continues with numerous companies selling algorithms that promise a retailer more of an edge. For instance, Barneys New York, the upscale clothing store chain, says it got at least a 10 percent increase in online revenue by using data mining software that finds links between certain online behavior and a greater propensity to buy.

Using a system developed by Proclivity Systems, Barneys used data about where and when a customer visited its site and other demographic information to determine on whom it should focus its e-mail messages.

Barneys experienced at least a 10 percent increase in online revenue, as compared to control groups, said Larry Promisel, Barneys’ vice president of e-commerce. It found 20 percent more customers would purchase once sent the targeted e-mail messages. The company has saved money by not sending e-mail letters to customers unlikely to buy.

Not only are sales increasing, Mr. Promisel said, but with the store focusing on customers with items they are likely to buy, its clientele feels that it understands their interests, which increases good will.

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Social Media Influence has compiled an entertaining summary of the Top 10 corporate brands on YouTube. If you don’t want to read/watch the whole thing, InternetRetailing.net has a helpful summary of the Top 10 Brands on YouTube.

Note that only 5 of the top 10 brand videos were actually produced by the brand (and one of them, by a rogue division of Ikea, wasn’t intentionally distributed).

10. Toyota - “Top Gear: Killing a Toyota Part 1″ - 1,132,279 views - Jeremy Clarkson tries to destroy a Toyota pick up truck without success.

9. Ikea - “Banned Commercial - Swedish Midsummer” - 1,483,858 views - Ikea banned this ad making fun of Swede made by the German division of the company

8. Microsoft - “Microsoft Surface Parody” - 2,068,861 views - A caustic video parody of Microsoft’s Surface table PC

7. Budweiser - “Banned Super Bowl 2007 Bud commercial” - 2,149,516 views - What happens when you’ve spent millions on a racy Superbowl ad and then the censor bans it? Stick it on YouTube.

6. Disney - “Internet is for Porn” - 3,278,230 views - This not-so-family friendly mashup of Disney clips is hilarious and completely off brand message.

5. Unilever - “Dove Evolution” - 6,727,556 views - An inspired conversational campaign with unintended consequences - allowing consumer and environmental activists to create their own rebuttals.

4. Coca-Cola - “Diet Coke+Mentos=Human experiment: EXTREME GRAPHIC CONTENT” - 8,583,526 views - The Diet Coke and Mentos meme has spawned hundreds of copycat You Tube videos and prompted Coca-Cola to join the conversation.

3. McDonalds - “Fast Food Freestyle” - 11,744,399 views - Funny and flattering McD’s rap homage helps bury far more negative You Tube content.

2. Pepsi - Britney Spears, Beyonce, Pink - We Will Rock You - 14,050,586 views - Britney, Beyonce and Pink in skimpy gladiator costumes proves you can’t beat celebrity content.

1. Nike - “Ronaldinho: Touch of Gold” - 22,581,372 views - The master at work seen through this “homemade” viral produced by….Nike.

Visit Social Media Influence to view the videos and while you’re watching, ask yourself this question - Do you know how your company looks on YouTube?

Filed under: YouTube, effective online video, marketing, strategy, video | No Comments »

Bob Tedeschi of the New York Times reports on how e-commerce retailers are using video to increase customer satisfaction. Some highlights:

Gordon Magee, head of Internet marketing for Drs. Foster & Smith, based in a Rhinelander, Wis., said a transition to video “will be seamless for us.” The company, Mr. Magee said, has in recent weeks discussed putting some of its product on video “so customers could see a 360-degree view they don’t have to manipulate themselves.”

Because Drs. Foster & Smith lacks a history in video production, Mr. Magee said the company would rely on vendors “who’ll do the video for you and just send you a piece of code to get it on your site. It’ll be an easy switch for most people. And I do think it’ll become a major thing in e-commerce.”

And Tedeschi also interviews QVC about their use of product video merchandising:

Bob Myers, senior vice president of QVC.com, said the Web site’s video salesmanship is especially effective when combined with detailed product information, customer reviews and multiple photographs.

Mr. Myers said video is a critically important element to sales. “E-commerce started with television commerce,” he said. “The sites who engage and entertain customers will be winning here in the near future.”

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Bob Cringely, everyone’s favorite gossip-columnist-cum-technology-strategist, is back with more juicy gossip about Apple and Adobe. Cringely asserts that Apple is quietly advertising its professional applications business for sale — in order to clear the way for an acquisition of Adobe.

Cringely’s job is to entertain and incite his readers and he’s certainly doing a great job of it. But I don’t think it’s likely that Apple will buy Adobe. Cringely’s proposed rationale is awfully thin.

Adobe won’t bring too much to Apple’s party. First, buying control of Flash will certainly not do a whit for Apple’s hardware market share — in fact, the Flash/AIR platform is explicitly about cross-platform compatibility, which is not in Apple’s interest.

Secondly, Apple wants to develop control over the distribution of high-end professional audio & video content (the stuff that people will pay for). Apple is already leveraging the iPhone and iTunes platforms to that end. There’s no reason why Apple would trade its own media creation suite for Adobe’s. And Flash is primarily a tool for small web apps and free video distribution; it doesn’t hold a candle to Apple’s own video distribution formats and channels (for the purpose Apple is investing in them).

The first part of the rumor is more believable. There’s a strong strategic rationale for a sale of the professional applications business. While Apple is uniquely committed to a proprietary, closed hardware-OS platform, they don’t need to be building apps for the platform too. Apple invested in great pro media applications like Final Cut Pro and iMovie in order to fuel adoption of the Mac platform. If a third party wants to invest in these applications, Apple will benefit from availability of the apps without having to spend resources on them. And to Apple’s benefit, other third-party developers will feel freer to compete in the pro media app space.

There’s another reason to believe that Apple might spin off an applications business — Apple has spun off an application business before. Remember Claris?

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