I still think there are huge advantages that some have and others don’t, but as Bryan clearly points out those advantages alone aren’t enough to win.

I certainly didn’t mean to be discouraging. More important than your place on the ‘best converting site on the web’ list, and directly to Bryan’s point, most sites should be able to improve their own conversion rate dramatically, possibly by hundreds of percentage points.

If you want do that, go read a lot more of what Bryan and his team say, or better yet hire FutureNow to help.

Depending on your disposition, this is either encouraging or disheartening news.

• Does it mean that 10-15% conversion rates are a goal you should work towards?
• Does it mean your 2.4% conversion rate is a terrible embarrassment?

I don’t think it means either. Let’s take a closer look at who made this list and how they did it.

• Three firms sell flowers. Who comparison shops flowers? What would you compare? If you just did something stupid, or tomorrow is ‘the day’ and you just remembered that, you buy the flowers.
• Tickets.com. Everyone must know by now that every ticket seller on the internet sells from one database (ebay, stubhub, and craigslist excepted.). There is no point in comparison shopping. You want tickets, you buy them.
• QVC. What’s their conversion rate for TV viewers? Their website is functionally a cart, so it could be argued that they’ve got 86.2% cart abandonment.
• Coldwater Creek and Lands’ End. Huge catalog mailers. Again, many many visitors coming just to place orders considered offline. If your site dropped 4M catalogs, your conversion rates would zoom too.
• OfficeDepot.com. Many no-point-in-comparing products and I assume lots of business orders from people who have accounts and replenish online frequently.
• eBay and Amazon. These are impressive – but they’re ebay and amazon. Comparing them to almost anyone isn’t fair or informative.

The message it seems is that if you need to deliver an overall conversion rate of 10% or greater, you need 30M registered users who buy from you 3-5 times per year, a 24-hour television channel, a pattern of inflicting back pain on innocent mailmen 3-4 times each year, or to sell products which are purchased as a result of some ages-old game of emotional blackmail.

Yet for many, those methods may not be practical.

That doesn’t mean you have to simply accept the shop.org and FireClick reported broad averages of 2-3% range.

There are many things most sites can do to dramatically improve conversion rates. There are also much smarter ways to measure and consider conversion rates than the overall site average. While that may be an interesting for conference-room conversation, it’s a lot more important to break down conversion rates by method-of-contact (email vs organic vs display vs PPC), based on the place in their buying cycle where visitors engage with you, or based on user intent as evidenced in their actions/expressions.

These are big topics in and of themselves, which I’ll dive into more deeply in a future post. Hat tip to Bryan Eisenberg, whose been on conversion rate watch for longer than any of us, for bringing all this up in his recent ClickZ column.

I think it’s time to adopt this standard for marketing. The Web 1.0, Marketing 2.0, and Analytics 3.0 debate has become a meaningless parody and just about everyone knows it. But the concept is important – there are old and new techniques, technologies, and philosophies. The current debates confuse rather than help marketers and related decision makers.

Consumers and practitioners need a way to benchmark and communicate the ‘state-of-the-art’ and where they stand relative to it.

Are you optimizing your site with the SEO techniques of 2004 or 2007? Do you get the full value (and pay the full price) of Web Analytics 2007 or are you satisfied (or forced) to hobble along with Web Analytics 2001? Is your paid search program managed like it’s nearly 2008, or is all that money and opportunity riding on 5-year-old ideas and technology?

What if there were a simple chart people could use to gauge their own sophistication and progress? Practices and capabilities which were practical and prevalent (but not bleeding edge) at any given time would be included.

Consider this way-to-simplistic example:

If online marketing was a software package, what features and benefits would we say were added this year? Beyond the broad ideas of Conversations and Calculations, what specific efforts are driving success this year and likely to as we move into 2008?

I’ll explore each of these in detail in posts next week.

In the meantime, what characteristics do you think define SEO, SEM, Analytics, or any other online marketing disciplines as ‘2007-vintage’? What’s going to be required in 2008?

So is this all about faking genuine two-way dialogs, closely monitoring each exchange and tuning it each time through, until we can casually reach our pre-defined outcome? Is this online dating or online marketing?

The secret behind most conversational marketing is that it’s still marketing, and as Doc Searls says in a fascinating post this week:

As a verb market is not merely about selling. It is about convincing. Its ideal is control. This may not be what enlightened marketers want the verb to mean, but marketing comes from the sell side, not the buy side. Thus in practice has become a tool of control by the industrial machine. Yes, some good people in marketing actually do talk to customers, actually do advocate them. But this is still the exception, not the rule.

In the world of WOM (word of mouth marketing) and the still growing cult-of-the-Cluetrain-ers (of which I’m a proud member) authenticity is a principal tenet, but the fact that the conversation is ultimately a means to an end is left largely unresolved.

As a marketer in this world I’m listening, which is new. I’m interacting respectfully, which is a change. I’m earning trust and references. I’m opening up all kinds of new ways and times and paths for communication. We call all of this conversation. But I’m also measuring, testing, and increasingly making only the high probability bets. We call that calculations.

Is there a way to resolve the idealism of conversation with the cynicism of calculations? I think that in his post Doc challenges us to envision and create a future that squares this circle. Where people aren’t just invited to talk about how we can mutually achieve the company’s goals, but the company is instead invited to discuss how we can provide for the persons’ needs.

It’s a huge idea and one I’m probably not doing justice here. It’s also about 100 posts down the line from where I was in this chain of thought. But Doc went and wrote something that I’m willing to bet marketers will be talking about (en masse) seven or ten years for now. So I thought I’d mention it.

It’s a great idea, but there are caveats:

1. You have to have Google Conversion Tracking enabled, meaning that you’re willing to share with Google exactly what you sell, when you sell it, and for how much. Many people who aren’t normally paranoid believe that allowing Google to amass such a clear picture of how your business economically functions (and perhaps worse all businesses in your and other categories) isn’t the best way in the world to help them avoid the temptation to ‘be evil’.
2. You need to have at least 300 conversions per campaign, which must be the level at which they believe the data achieves statistical significance. Depending on your business and campaign structure, this may require you wait some time after enableing Conversion Tracking before the Optimizer can kick in.
3. Not surprisingly “It’s important to note that the maximum CPA bid is not a guaranteed limit. If your actual conversion rate is lower than the Conversion Optimizer predicts, your actual CPA may exceed your maximum CPA bid.” This just means that the GO can’t perform miracles, but it also rather limits their psychological and other liability too.

Andrew at Traffick gave it a try, and wasn’t impressed. Obviously it’s early, self-described as beta, and they’ll tune and improve.

In describing this new feature, Google says the following:

To determine when to show your ads, the Conversion Optimizer predicts a conversion rate for your ads every time they’re eligible to appear. This prediction is based on various factors. For example, here are some of the factors that affect the conversion rate on Kim’s custom shirt website:

• The search query. Kim’s conversion rate is higher when users search for custom shirts than when they search for shirts.
• The location of the user. Her conversion rate is highest when her ad shows in New York.
• The conversion history of particular sites. When her ad shows on certain types of content sites in the Google Network, Kim is more likely to get conversions.

Kim doesn’t have access to these details, but they directly affect her conversion rate and costs. By considering these factors every time her ads are eligible to appear, the Conversion Optimizer can show her ads when she’s more likely to get conversions.

Most interesting to me was the quote “Kim doesn’t have access to these details”. So Google is making decisions based on information they DO NOT provide to you as a typical adwords user. That isn’t right. Adwords users should have full access, via the API to anything that can enable them to make better decisions on their own. Retaining data to give advantage to Google tools over those from 3rd parties prevents Adwords customers from getting best-in-breed tools and having full choice and control over their accounts.

Google already does this with Google Analytics, enabling it to show things like which ads were placed on the top and which were run in the right column – an important fact not shared in any other report or data feed. Let’s hope this trend of selective disclosure gets cleaned up soon.

I spent the first half of last week at shop.org in Vegas, and the last at the xChange in Napa. This double header confirmed an idea that’s been brewing for some time. As all of the basic elements of doing business online – as complex and as-yet-imperfect as they are – settle in as just the price of admission, the future of success is now about conversations and calculations.

Conversations are the world of The Cluetrain Manifesto, word of mouth marketing, and social media. It’s something that’s been building for years and is the result of the fact that people always had the power and desire to lead markets but before the internet they lacked the tools necessary to do it. In a world without efficient conversations, AOL could drop 200 gazillion CDs in your lap and get 35 million people to sign up for the world’s worst ISP. In a conversant world Zappos will sell $800 million worth of shoes in its 8^th year as a company that barely advertises.

At shop.org Kelly Mooney gave an amazing keynote based on her upcoming book The Open Brand: When Push Comes to Pull in a Web-Made World, very neatly summing up the current state and cumulative impact of conversations. She presents a compelling case as to why accepting and engaging in a conversation with your market is the best and smartest option.

Calculations are the math and science that take information about what’s happening in an increasingly measurable business world and turn it into smart (and even automated) actions. In online marketing today the vast majority of decisions are made based on anything but complete and accurate facts. But in at least a few areas (paid search as one example, multivariable landing page testing as another) we’re starting to turn the corner into a time when enough data and the right technology are available so that we can know the quantifiable ‘right thing to do’.

At xChange there was evidence of both the promise and the elusiveness of calculations. Many of the best minds and practitioners in web analytics were there and in the ‘huddles’ (this was a post-presentations-style conference) we heard about some remarkable examples of measurement and analysis driving smarter decisions. But far more commonplace were the ‘you can’t get there from here’ discussions and real world stories where the best of web-analytics and analysts produced nothing more than hints and clues.

Both conversations and calculations are hard. There is almost nothing or no one in a typical business either pre-disposed nor supported for a true conversational approach to marketing. It takes what still amounts to radical foresight and guts to really try, inevitably fail a little, and make honest progress. The idea of analysis is widely accepted but commonly aims only for ‘insight’ while the point of calculations is actual answers. Getting there requires a level of commitment to data collection, analysis, software tools, and their application that would get most marketers branded as fanatical or even deranged.

So the future champions of ecommerce are those willing to start down paths that others will see as radical and/or deranged. That sounds about right.

Over time tasks and efforts that were once core become context. Doing business online was a core activity five or six years ago – it could differentiate your company and provide a strategic advantage. Today, if you have a modern ecommerce platform, sophisticated guided navigation/site search, personalized cross-selling, real-time inventory status for your physical stores with online ordering and local pickup or returns, and high-end website analytics to track your site traffic, campaigns, and visitor behavior you’re doing well but have no advantage what-so-ever over dozens of other retailers. As Moore predicted, core becomes context and the cycle repeats endlessly.

The challenge is that as time passes and your business grows, the percentage of your time and money available to spend on core activities – new initiatives that can drive growth and success – shrinks simply because you still have to keep doing all the existing activities too. For an online retailer or business, it’s easy to be consumed with the ‘day to day’ effort of managing website infrastructure, organic and paid search campaigns, site merchandising and promotions, basic reporting and occasional analysis. But all of these activities and more are simply the baseline these days – the minimum you must do to be competitive and marginally successful.

So what are the core activities in online commerce today? What should you be doing and thinking about to drive differentiation and advantage? What skills and initiatives need to be cultivated now in order to survive in the not-too-distant future?

A few days at the Shop.org conference in Las Vegas have confirmed at least two of them for me. Details in the next post.