What has been the reaction? People love it. They eat it up. Zappos.com has some of the most avid corporate groupies in the social media space. So I paid close attention when Tony Hsieh, founder and CEO of Zappos, was recently asked the question, “Other than Twitter, what are you currently doing from a social media perspective?”

His answer sounded disappointed, almost offended. “I don’t like the term ‘social media.’” To Tony, his company’s Twitter account is a reflection of the company culture. He never had to force it. He didn’t consider the ROI and pronounce the program “worthy of investment.” It was just something that made sense. Zappos was the type of company that had a Twitter-type relationship with its customers.

This point received further clarification in his response to the follow up question about company guidelines and policies around Twitter.

“Be real. Use your best judgment.”

Tony doesn’t try to mandate some form of corporate PR quality control, he just lets the employees be themselves. He hires the right people for his company and he lets them be themselves.

How novel.

And how frightening.

But if we’re going to keep moving forward as marketers in the present age, we’re going to have to learn to be comfortable around novel things. And we’re going to have to get used to being frightened.

At least we can take solace in the fact that our most valuable social tool (and Tony agrees with this 100%) is still the good, old-fashioned telephone.

Key findings include:
- The affluent purchase path is showing definitive signs of shortening, with 88 percent of total purchases occurring within three clicks in 2010. This reflects a 17 percent increase in “short-term” conversions versus 2009.

- Affluent shoppers continued searching online for luxury products throughout the economic downturn, but are displaying significantly increased interest in luxury brands versus a year ago. Customers seeking luxury products more fervently was evidenced with an increase of 20 million search impressions for the brands studied. (Nov. 2009-April 2010 versus Nov. 2008-April 2009)

- Customers are spending more per transaction on luxury goods than a year ago. The most recent holiday season showed average order values growing about $20 per order, or six percent. (Nov.-Dec. 2008 over Nov.-Dec. 2009) And the total number of orders for the 2009 holiday season increased almost 25 percent, with revenue for luxury retailers’ sites increasing 32 percent during this timeframe.

The whitepaper also detailed key findings for specific luxury verticals, including fashion, multi-category and beauty, as well as providing luxury retailers with the “New Rules for Luxury Retailers” in the form of key strategies to employ in 2011 and 2012.

“During the economic downturn, many industry ‘experts’ declared that luxury shoppers would never again be willing to by fully priced luxury goods or that ‘luxury was dead.’ Well, we are happy to report that neither of those predictions proved accurate,” said Vic Drabicky, Director of International and Vertical Market Development for Range Online Media. “While the economic recovery is not even close to complete, this research signals that affluent and aspirational consumers are already shifting their behavior in favor of the luxury brands they’ve coveted during the downturn. They are seeking and purchasing more luxury goods, and in a shorter timeframe from first click to purchase than they were during the height of the economic downturn.”

The study analyzed data from 424 luxury retail brands marketed within the company’s client base. Included in the analysis were the metrics of impressions, clicks, click through rate, CPC, cost, revenue, orders, conversion rates and average order value for November 2008 through April 2010. The Luxe Groupe also examined key economic indicators, such as the Dow Jones Industrial Average, in conjunction with this luxury client data. The client names and data specific to individual brands were not released due to proprietary and contractual limitations.

Please download the entire whitepaper, and read our findings about economic indicators for the luxury retail marketplace.

As brand owners, we wouldn’t think about putting our brand alongside something with a negative connotation, but in PPC, it happens every day. In fact, you could argue that it’s impossible to avoid completely. However, paid search mismatches can be greatly reduced with a few basic strategies every agency should be implementing.

Broad Match and Search Query Reports:

What broad match means for those of you who are unfamiliar with the lingo is that your search query will match to “similar phrases and relevant variations”. For example bidding on “chips” on broad match will allow you to show up for terms such as“Paint chips”, “potato chips”, “poker chips” and “chips TV series”. Extended broad match in Google will further allow you to show up for things like “Erik Estrada”. As you can see it can be very dangerous to bid solely on broad match, especially without an extensive list of negatives and other match types to support it.

Solution: Google gives you the ability to run Search Query Reports which show you the exact queries you are matching to. If we pulled one for a paint brand, we would see things like “eating” in the search query report and know we needed to add it as a negative keyword. Think of a negative keyword as the opposite of a keyword. It’s something you don’t want to show up for, like a C-SPAN fan club meeting or a really awkward party. Negative broad matching of the word “eating” would ensure that you won’t show up for any search query that contains the word “eating.”

Utilize exact match once you have narrowed the keywords you want to show up for. Exact matching will allow you to show for EXACTLY what the search query type in is. So, if you want to show up for “Paint Chips” you will not show up for anything that contains other search variations such as “eating paint chips”. This will not only make sure you are targeting your creative correctly, but it will also often result in a lower CPC and a higher conversion rate. Obviously, people searching for “eating paint chips” are either looking up movie quotes from Tommy Boy or the phone number for the poison control center.

Brand Image:

While it’s costly to inadvertently appear for terms you don’t want to be associated with, there are farther-reaching implications. When someone is searching for “eating paint chips” and your handcrafted kettle chip brand appears, what do you think that consumers are going to think or associate with your brand?

If you work with an agency ask them about this. If you don’t, make sure this is part of your strategy.

This tells me that luxury retailers/brands should cater their major initiatives to ‘refinement of living, indulgence, enjoyments of comforts and pleasures’. As such, shouldn’t the online experience be as comforting and pleasurable as the product itself? Doesn’t it make sense that a buying a luxury brand’s product should be easier and more enjoyable than a buying a discount product from a mass retailer or discounter? So why is it so difficult to even find the luxury official website? Most of the time, I never see an ad where I frequent online and I rarely see search listings (paid or natural) when searching for products (or sometimes even the trademark name) in the search engines. And when I finally find the site, I still have to navigate through flash, wait for video to load, experience a confusing site search and endure a clunky process just to order something. That is not a luxurious experience; it’s a trip to the DMV.

Luxury retailers are highly protective of their brand. Why not treat their customers with similar diligence and care? If your luxury brand’s purchase process has more in common with a trip to municipal court than Monaco, you might want to try the following:

• If you’re going to have beautiful images through flash/video ads to remind me of the brand and show me the beautiful new products, have them where I spend time online. Better yet, make them clickable right to the product I want to buy, or at least interactive so I can hover /explore, then go to the site when I’m ready to purchase.
  • STRATEGY: Have a strong presence on major networks. Use re-targeting and behavioral targeting to reach your customers/potential customers. Creative test/use multiple messages to ensure your audience is getting the ad units they like best.

• You’re present in the engines, so be there like you mean it. When I’m looking for a product like yours, make it easy on me to find you. When I’m looking for you by searching for your brand name…be there. Every time.
  • STRATEGY: Have a strong presence, both from a brand and non-brand presence, both from a paid listing and natural/organic standpoint. Make the creative and meta-description clear by telling me who you are and why your brand is special.

• When I finally end up on your site, make it easy on me to purchase. Let me see the beautiful, large images of the products I am interested in, show me descriptive words to describe the product, and when I’m ready to buy, let me be able to do that quickly and painlessly. Better yet, thank me for doing so and make me want to come back again and again.
  • STRATEGY: Use large multiple images. Use descriptive and detailed copy. Remember me if I’ve registered with your site before so I don’t have to re-enter all my personal information. Test! Use conversion optimization tools to target and refine the most customer friendly purchase paths and website organization.

I think it’s very fair to say that most luxury retailers and luxury brands do a tremendous job of making beautiful and luxurious products. It’s the basis in which all their efforts are based. Catalogs and image ads are gorgeous and classy, and so is the typical in-store experience. So why is it that luxury retailers are usually the last to make the online experience as luxurious and comforting as possible? Why is it the mass discounters and retailers of the world are the ones that make the online shopping experience comfortable and convenient? Online works amazingly well for most advertisers, and it’s trackable. That’s no secret. Focus on making that entire online channel as luxurious and comforting as that handbag or skin cream your customer loves you for, and you’ll have me coming back again and again. Or at least on payday.

There are two main ways of looking at the value of branded paid search:

1. It does not make sense to run branded search if you have strong organic rankings for your brand because your organic listings will pick up that traffic and conversion. Why pay for something that you can get for free?
2. People who search for a brand term are often in a research mindset rather than a purchasing mindset, and with paid search ads you can present these potential customers with a much more compelling offer and land them on the ideally optimized page to convert traffic. Your conversion rate and total site conversions will be higher if you run a well executed brand paid search campaign. Also, if you don’t bid on brand terms than competitors who bid on your brand terms are more likely to steal traffic and revenue from you.

For the test we are trying to figure out how to maximize our paid search spend in terms of generating total conversions. We have seen that our non-brand search spend has a tremendous impact on the organic traffic and revenue of this particular client. We don’t care who gets credit for the conversion that comes through; we are only concerned about maximizing conversions as a whole. Therefore, our goals for the brand test are to:

• Understand whether we should be running branded paid search terms
• Figure out how to truly maximize site bookings for a given budget
• Better understand the relationship between paid search and natural traffic and conversions

To hopefully accomplish these goals we are running a period of true non-brand search (with the true brand term set as a negative keyword) followed by a period of full branded paid search. We plan to keep spend levels perfectly constant between the two periods and monitor total conversions through Omniture. We are going to ignore Bluestreak paid search data entirely and look at combined organic and paid conversions. The period with higher conversions wins.

Of course, there are many variables that can throw off our results: holidays, conversion window, organic search trends, paid search competitors, etc. There is no way that we can run a perfect test. Our hope is that something will really jump out at us though and we can feel confident coming to some conclusion.

Right now, we are in the middle of our test. We are running just non-brand. In a few weeks we are going to run full force brand and compare results between the two periods. We are eager to see how the test turns out and get back to the client with our recommendation as to whether or not they should be running branded paid search.

Okay, that’s a little dramatic, but it’s rainy outside, and it’s put me in a theatrical mood.

On to the meaty stuff!

Recently, comScore released findings from their June 2008 study, “Reaching Shoppers in a Down Economy”.

Insert ray of light, hope or at least a weapon to help fight your way to as close to victory as you can come.

The bottom line for marketers is that people are shopping less frequently (down 68%) and purporting to use coupons more often (up 59%). It’s really not rocket science –Consumers still want stuff –they just need a way not to feel threatened by it. So what can brands do? Obviously this question depends on who your brand is and what you’re willing to communicate to customers. If you’re comfortable with the obvious discount offer, then offer it. Build search campaigns around appropriate terms, partner with reputable coupon sites or utilize a combination of the above. If you’re a brand that’s always been part of this mix, make sure your organic search is built to capture the growing demand and continue to unearth new trends in the recent resurgence. Even if you err on the side of luxury, take heart: there are ways to communicate extended value to your loyal base and think about your holiday product assortment. Maybe this year we push the $1,200 handbag versus the $3,500 and shoot for increased volume; hey—at least it’s an idea.

No matter what your economic bracket is, doubt and insecurity linger. Retailers need to find a way to reassure shopper that their purchases are sound and wait for tomorrow to come. Perhaps all that relationship building will pay dividends when the tides turn.