Back in the day, retailers and e-tailers flocked to interactive consultancies in the hope of buying an Internet marketing strategy powerful enough to put them head-to-head with online giants Amazon and eBay. Creative, development, design, consulting — plus extras like employee training sessions and really good catering at client meetings — typically put a significant dent in marketing budgets: hundreds of thousands for smaller start-ups; multi-million dollar “engagements” for big brands.
Interactive shops have long ceased to behave like the Heathers of the marketing playground (those that are still around, that is). Vendors, merchants and national brand advertisers have lost any illusions of becoming the next Amazon or eBay. Now, they partner with the online sales behemoths.
Amazon and eBay are the new interactive agencies. Why spend on online marketing and advertising (goes the reasoning) when you can hitch your wagon to a star — especially if that star has 42 million unique monthly visitors?
eBay has formally established a new strategic partnerships unit to woo brand marketers to an array of marketing offerings ranging from product launch strategies to keyword bidding. Deutsche Bank last week upped its Amazon buy rating and forecast, primarily because “the company is rapidly evolving to become a marketing and distribution platform for retailers and vendors.”
Here’s how Deutsche Bank does the math:
“If Gap [2.4M monthly uniques] hypothetically spent $5 per visitor to acquire traffic, then the company would need to spend roughly $165M in advertising to catch up with Amazon’s audience [35M monthly uniques].” By spending on Amazon instead, “Gap.com would pretty much eliminate the risk of spending a fixed advertising amount upfront…(in hopes of seeing a positive ROI)…[it] would end up spending on marketing and advertising based only on customer purchases made on the Amazon platform… Gap could theoretically spend 20 percent less ($132 million) to generate a similar level of sales.”
Deutsche Bank Analyst Jeetil Patel notes Amazon has attracted over 100 merchants in apparel and sporting goods alone. “New categories will increase Amazon’s overall relevance in the consumer buying experience, which in turn helps to drive user purchase frequency.”
eBay, with its staggering 35,000 categories and 86 million registered users, has kicked into full carpe diem mode. Barbara Gore, senior director of marketing and industry relations, explained the company wants to extend eBay’s “magic” to national brand advertisers. “We bring together buyers and sellers in a way that’s more effective. We create relationships in buying and selling. That’s a natural for marketers,” she explained.
“Seventy percent of the top-100 eBay searches are brand-related. Brands matters on eBay in a big way,” Barbara insists. She claims eBay search is the world’s largest shopping engine, with 120 million daily keyword searches. eBay recently began selling keyword-targeted ads, formerly limited to national marketers, to all its sellers. They’ll even help you to create a banner and provide advice on optimizing landing pages.
“It’s a fabulous opportunity to increase sales and to generate leads,” said Barbara. The company says the renewal rate is an impressive 55 percent.
Branded stores have long been a fact of life on the site, and popular with national direct sellers like Dell. eBay is working to expand the concept of branded online presence to brands that don’t fit into the straight buy-and-sell thing.
Take marketers with two-tiered distribution. “BMW” is among the top-10 brand searches on eBay, explained Don Albert, senior director of business development. He took that news to BMW, a conversation which resulted in the BMW Certified Pre-Owned Showroom on eBay Motors. The goal is to drive potential buyers into local dealerships. eBay even trains those dealers how and when to list vehicles for maximum return.
Got a product to launch? Dr. Pepper/Seven Up bowed dnL by offering the first 31 cases off the assembly line (plus certificate of authenticity) to the highest bidders. Each sold for northwards of $400 (proceeds to Rock the Vote). The campaign created awareness, buzz, PR and had a media back-end. Copycat sellers in the few markets where the drink was available began selling the stuff on eBay themselves.
When some guy got national media attention for auctioning a giant Chee-to on eBay, Frito-Lay paid attention. They contacted eBay to discuss how to leverage and extend the unexpected flurry of publicity.
More examples? IBM increased its eBay store traffic by a factor of nine with auctions for ThinkPads autographed by celebs. Disney uses its eBay hub to promote new releases and maintain brand presence on the site. eBay’s new “Anything Points” can be used by marketers to create what Barbara describes as a “plug ‘n’ play” loyalty program. “Liquid Loot,” uses soft drink caps to drive users to a Web site where they register to earn points they can redeem on brand tie-ins: Universal Music Group auctioned an IM session with Jon Bon Jovi; New Line sponsored a Lord of the Rings promotion around the DVD release. Dr. Pepper/Seven Up sends users promotions and announcement while collecting data on purchase habits and preferences.
Incentive and reward points from brands like American Airlines, Hilton, FTD, Sprint and a host of others can now be redeemed on “the world’s largest redemption catalog”. An eBay Anything Points MasterCard just appeared from new partner MBNA.
“We are, by far, the largest commerce site on the Web. Companies that do partner with us will get a lot of exposure,” avows Barbara Gore.
Will retail be the new search? Time will tell. Meanwhile, you can consider sending your next RFP to Amazon. Or eBay.
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