Word: portale
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...being on the Web seemed to be an advanced business strategy, retailers were happy to pay for "eyeballs"--sheer audience size. Never mind that the impact was next to impossible to track. Today eyeballs are still an important factor, but retailers prefer performance-based deals--paying for "click-throughs" (portal visitors clicking on one of their links) and, in some cases, actual sales. "Back in the go-go days of the Internet, retailers would pay for the halo effect of being on a big portal like AOL," says David Bolotsky, who headed Goldman Sachs' U.S. retail group before launching UncommonGoods...
...many retailers, playing the portal game means paying for high-profile promotions in all the right categories and top placement in search returns. In the case of Proflowers, Web users who enter, say, the flowers category at shopping.yahoo.com or run a keyword search for delphinium at shopping.msn.com might see a colorful ad--maybe a pop-up, maybe just text and a photo--for a specific offer ("One Dozen Roses! $29.99"). All told, Proflowers pays in the low to mid-seven figures for a year's worth of portal ads. Depending on the contract, it might share a piece...
...landscape is still shifting as retailers try to track consumer behavior. Here's a twist: while mega-portals attract boatloads of shoppers--Yahoo, MSN and AOL (owned by the same corporate parent as TIME) rank among the 10 most visited shopping sites, according to ComScore Media Metrix--consumers don't usually think of them as shopping sites, notes Carrie Johnson, e-commerce analyst at Forrester Research. In fact, Web users often land in a portal's shopping area by accident, attracted by an ad that appears as they are using e-mail or checking sports scores. While reading about Tiger...
Integrating e-commerce into other content areas has helped portals drive traffic and generate click-throughs for partner merchants. But when it's time to buy, consumers still tend to go straight to the source. Forrester Research asked Web shoppers how they found the site where they made their most recent online purchase, and a mere 2% said "portal or Internet mall." The majority, 62%, went to the site directly. So if portal shoppers aren't buying, what are they doing? They're absorbing marketing messages that will influence future purchases, both online and at traditional bricks-and-mortar stores...
Patrick Byrne, CEO of Overstock.com a closeout retailer that sells everything from socks to $3,000 watches, says that while retailers recognize the continuing value of portal exposure, they know that they are ultimately responsible for making sales. "If Yahoo sends me 1,000 customers and I can't close the deals, then that's my fault," he says. The $3 million that Overstock spent last year to promote products on Yahoo Shopping, MSN Shopping and AOL Shopping together generated a quarter of the company's $120 million in consumer sales, Byrne says. Overstock doesn't share revenue with...