The Ripple Effects of High Gasoline Prices

Shopping at home is rising along with gasoline prices.We’ve all heard the news reports about the effects that high gasoline prices are having on families who rely on automotive transportation for their livelihoods. It’s all well and good to promote the use of public transportation, but when your job is 25 miles away along suburban or rural roads, it’s often impractical to adjust commuting behaviors.

We’re also reading how high gas prices are affecting other aspects of the economy, such as the rising price of food items in the grocery stores due to higher transportation costs.

To this, we can now add another consequence of the high cost of petrol. Paralleling the gas price spike has been an increase in Internet activity.

Marin Software, a leading paid search manager platform for advertisers and agencies, has performed an analysis across more than $2 billion worth of paid search marketing activity. The firm established a benchmark based on the share of activity across the Google and Bing search engines, and then studied cost-per-click activity, clickthrough rates and conversion rates.

Marin evaluated the rise and fall in the volume of clicks along with the rise of gas prices over the time period January – March 2011. Voila! It found a positive correlation between rising gas prices and increased click activity.

In a similar vein, digital market intelligence firm comScore is reporting that U.S. e-commerce sales were ~$38 billion during the first quarter of the year. That’s up ~12% compared to the first quarter of 2010. And while e-commerce volume has been up over the past six quarters, this is only the second time the growth as been in double digits.

So the premise that the higher gas prices climb, the more the propensity is to shop from home and avoid the cost of driving appears to be on target. And it’s probably being helped along by the plethora of “free shipping” offers that are also out there — along with avoiding paying sales taxes.

Looking forward to the day when gasoline prices may plateau or fall back, it’ll be interesting to see if Internet activity drops back as well. Or will more people have become used to the comfort of shopping from home in their boxer shorts – so that online activity remains at an elevated level?

I have a suspicion it’ll be the latter.

Third-Party e-Mail Lists: Clicks to Nowhere?

Clickthrough fraudOf the various issues that are on every marketing manager’s plate, concern about the quality of third-party e-mail lists is surely one of them. It’s a common view that the effectiveness of a purchased e-mail data file is worse than a carefully crafted in-house list based on input from the sales team plus opt-in requests from customers.

Part of the reason is that there’s less likelihood for recipients to be interested in the products and services of the company, which only makes intuitive sense. But there may be other, more nefarious reasons at work as well.

Ever heard of a click-o-meter? It’s the way some e-mail lists are made to look more effective than they actually are. In its basic form, this is nothing more than people paid to open e-mails with no other interest or intention of further engagement. The more technical way is to have an automated click setting, usually done through a rotation of IP addresses.

To the casual observer, this gives the impression of recipients who are interested in a company’s offer, but the final analysis will show something quite different: near-zero purchases or other relevant actions. The problem is that for many campaigns, ROI will be slow at first, so the grim reality that the company has been punked comes later.

The growth of the autobot click-o-meter phenomenon tracks with the growing interest in purchasing third-party lists based on cost-per-click (CPC) performance rather than on the traditional cost-per-thousand (CPM) basis. Not surprisingly, when list vendors started being asked to sell lists based on a CPC versus CPM basis, for some of them the temptation to “juice the numbers” was too great. And since many of the databases come from other sources and are private-labeled, the problem is perpetrated throughout the system.

Many purchasers have wised up to this issue by settling on one or two list brokers that they know and trust, by asking about the data source, and by asking for client references for the lists in question. If an e-mail database has suddenly changed in pricing from a CPM to a CPC basis, that may be another cause for concern.

Another option is to hire a third-party traffic monitoring service to assist with back-end analyses of e-mail campaigns to see what’s working or not working in specific campaigns and nip any problems in the bud before they do too much damage to a marketing effort.

But like anything else, self-education is critical. Most companies who are victims of fraudulent e-mail practices become so because their staff members are unaware of the potential problems. But the information is out there for the asking, and that knowledge will soon become “intuition” – usually the best predictor of ROI!