By Lee Brignell-Cash

Digital marketing now embraces a wide range of online channels and applications. Established options such as affiliate, email and pay per click (PPC) search marketing have diversified and become more sophisticated. Meanwhile, comparison shopping engines (CSEs), dynamic advertising (widgets, interactive banners), Facebook Commerce (f-commerce) and mobile commerce (m-commerce) are of growing importance to merchants looking to promote their products online.

For consumers, the internet has become a primary research tool, enabling them to search for products using very specific ‘long tail’ search terms. They also look online for the best deals, use their mobile phones to check prices when they are out and about and are more likely to look up a brand if a friend has recommended it. Around 7.6 million people in the UK now shop via social media according to the Centre for Economic and Business Research (Cebr), while some 5.5 million people use their mobile phones to purchase products.

The rate of change makes it hard for merchants to keep pace, yet it is crucial that their marketing teams have the tools and technology at their disposal to engage with the consumer regardless of the touch-point in play. Product data feeds provide the means for distributing product information throughout the increasingly fragmented and competitive digital marketing landscape. The data feeds contain product information such as availability, description/promotional text, pricing and images. When built and managed properly, data feeds allow applications and websites to be quickly populated with rich and accurate product data and ensure that online consumers can easily find exactly what they are looking for.

However, data feed technology is not that well understood by merchants. Building and regularly updating feeds is resource-intensive, especially if the merchant manages a large online inventory and markets their products through a wide range of partners. Meanwhile, third-party agencies and web publishers need the tools and support to quickly filter and tailor merchant data feeds to their specific needs. They also need to convert product-level information into more dynamic and engaging consumer-facing content if they are to successfully drive conversion rates and sales.

Shopping goes online, mobile and social

Advances in mobile and web technology, the power of social media and a tough economy have altered the way in which consumers engage with brands online and are driving a substantial increase in the number of consumer touch points. Merchants are responding by adopting a multichannel approach, building-out their e-commerce capabilities, seeking wider distribution of their products and new ways to engage and interact with consumers.

UK retailer Marks & Spencer (M&S) for example, made a number of enhancements to its website during 2010 to improve the consumer experience and encourage more shoppers to complete transactions online. It introduced an improved ratings and reviews function for its website that receives an average 1,200 product reviews each week, and launched an m-commerce website that has attracted 5.5 million visitors and generated over 59,000 orders. M&S is also investing £150 million in building a new e-commerce platform together with new warehousing facilities and IT systems. The company reported its online strategy drove an increase in site traffic of 18% in the full year 2010/11, while M&S Direct saw sales of £543m (up 31%).

Other retailers report similar success. Debenhams has created m-commerce apps for both Android and iPhone, with the latter generating £1m in sales within five months of launch. Retail specialist consultancy Martec International found that for the first time ever, e-commerce and m-commerce topped the list of investment priorities for 51 retailers with sales exceeding $50 million in North America and the UK. Martec’s ’s annual ‘IT in Retail’ report for 2011/12 also warned that many retailers had not thought through the longer term strategic issues relating to multichannel retailing and highlighted the need for more sophisticated processes and systems given the increasingly competitive online space.

The merchant’s multichannel challenge

Marketing directors don’t necessarily need to know all things digital but the increasing sophistication of commercial applications is becoming more of an issue for those tasked with managing what has traditionally been viewed as the domain of the IT department, or third-party advertising and digital marketing agencies. As a result, companies are less confident in their understanding of measurement and ROI, in particular because emerging revenue streams from social media marketing are seemingly harder to analyse than more established digital channels.

The scale of innovation has opened a significant gap between the in-house resources of merchants and the needs of the third-party applications and websites they employ to drive wider distribution of their products and services. A growing number of commercial applications now use data feeds, but only a minority of marketers today are aware that their firm either has or could be using a product feed. Even less have the in-house resource at their disposal to be able to build and manage multiple feeds specific to each application or channel. The challenge is even greater for those working with large inventories and many partners. British Sky Broadcasting Group (BskyB) for example, discovered that it had 1.8 million potential combinations of digital TV and broadband products when it was looking to build a product feed for its affiliate marketing programme.

In addition to the strain on internal resource and the logistical challenge of distributing product data feeds and updating them regularly, merchants must also provide their partners with the tools and knowledge to exploit the product data feed to its full potential. All too often, it is left to a third party to extract product information in the format they need to convert it into consumer-facing content. Merchants also need to provide their partners with controls for ensuring consistency in ad/brand messaging, as well as filtering out and presenting special offers or engaging content relevant to their target audience.

Feeding product marketing innovation

By extracting product data directly from the merchant’s e-commerce website (front end), it is possible to create an accurate feed comprising rich product information encompassing the merchant’s entire inventory. This feed can then be used to power rich product information into a number of online marketing applications. Tools are then necessary to trim the feed at a granular level to meet the specific requirements of the third-party application, as well as to build ‘creative’ such as banners and widgets and provide deep links back to the merchant site. In some cases, the commercial application will be of sufficient scale to warrant a tailored data feed direct from the merchant. With others, such as long tail niche market affiliates, it is much simpler to make these tools available to via a central hub/portal. Either way, data feed technology and tools create a single platform of distribution upon which both the merchant and its partners are able to innovate and rely upon.

Global Interactive marketing provider ExactTarget for example, combines multiple types of data sourced via enterprise web analytics – such as transactional, profile, CRM, and behavioural – to build highly-targeted interactive marketing campaigns. When combined with a merchant’s data feed that is rich in product-level information, ExactTarget is able to personalise each communication based on the types of products the consumer has looked at previously, combining this with current similar products. A common application is shopping cart abandonment, whereby a merchant sends an email offering a discount to a consumer who has previously put a product into their basket but didn’t convert. Typically, this type of email activity drives a conversion rate of 8-12%. Using product feed data to populate the email with details and images of the exact product the consumer had viewed previously, the conversion rate can rise to around 18-22%. Similarly, product feeds are a key component in matching product paid (PPC) search terms back to products on the merchant website.

Behavioural retargeting is a relatively new area. Criteo is a major player in the retargeting space and enables e-commerce sites to re-engage with potential customers who have left their website using dynamic banners containing the most relevant product-specific recommendations. These are generated in real-time for each individual, with the level of personalisation and conversion rate directly influenced by the quality of the merchant’s product feed. Criteo also introduced ‘category bidding’ last year. This allows merchants to optimise and set a cost-per-click (CPC) threshold for each product category based on margin and profit goals. Categorisation is defined by the advertiser and managed within the product feed, translating into ad creative where different products displayed in the same ad can have different CPCs, depending on their product category.

Entering new channels and delivering results

Mobile and social media remain nascent opportunities, but product feeds are making inroads into these channels too. Rather than focusing on rebuilding a conventional browsing or navigational experience, mobile-friendly formats can be created directly from a data feed using filters and categories to present the exact product information and images the consumer is looking for. This approach has successfully been adopted by m-commerce sites such as ShopStyle. However, data feeds can be just as effective in simplifying the mobile browsing experience by presenting product information trimmed from the data feed. Regardless of whether the mobile website includes m-commerce functionality, the key factor is that product information reaches the consumer properly presented and rendered in mobile browsers. Similarly, advertising widgets can be created using data feeds and embedded within social media sites just as easily as with any other affiliate site. In a social media site such as Facebook, for example, the widget can be posted to a wall and if ‘liked’ by someone, automatically ‘shared’ to their friend’s wall, thus ensuring a viral media effect. The important aspect here is to ensure that a deep link generator tool is also used to drive traffic back to the merchant’s site in order for the transaction to be completed. In some cases, the product can be placed in the merchant’s online basket ready for purchase. This avoids any commission being applied by the social media site for hosting the actual transaction, and ensures the merchant also has the opportunity for re-targeting applications.

Data feed technology may be relatively unknown outside of technical circles, but its commercial applications are already delivering impressive results in terms of driving incremental revenue for many of the largest and well-known brands. For those that have not yet bridged the gap, it is important to consider data feeds as a ‘chicken and egg’ scenario. Innovative applications only become possible once the product data feed has been built, thus the question is whether the merchant is ready to invest in order to take advantage of emerging online channels.

About FusePump

FusePump aims to create, manage and integrate product data feeds to maximise revenue from online marketing and eCommerce applications. High-quality data feeds increase product visibility and sales conversion for clients and enable consumers to find exactly what they’re searching for. The company partners with affiliate networks, digital marketing agencies and publishers, and serves clients in the retail, travel and mobile sectors – including Argos, John Lewis, lastminute.com, Orange and Thomas Cook. FusePump is experienced in the following channels: Affiliate Marketing, Google Shopping, Dynamic Advertising, Comparison Shopping Engines, PPC Automation, Social Media and Mobile Commerce www.fusepump.com .