Don’t Increase Ad Spend… Optimize to Maximize! Chicago December 9, 2008 Chris Benson Vice President & CTO Audio Editions Kayden Kelly CEO & Managing Director Blast Advanced Media

Challenge #1 Downloads

30 % OFF + FREE Shipping Challenge #2 Fierce Competition

Consumer Confidence at 5 Year Low Budgets Being Cut Challenge #3 Recession

Benefit Cost Forever! 1 time 1 time Increase Conversion Buy More Traffic What’s the Best Plan of Action? 1 time

Optimize! Low Medium High Change CR Increase Per Year 5.00% 2.3% $150,000 25.00% 2.7% $775,000 50.00% 3.2% $1,500,000 Maximize Conversion Conversion Rate 2.15%

Optimize!

Tools Analytics - Website Optimizer - 4Q Survey How do you increase conversion? Benchmark, Goals, Changes, Measure, Repeat Pyramid Credit: Future Now

1 – Benchmark & Set Goals Approach 2 – Qualitative Analysis 5 – Campaign Optimization 4 – Website Optimizer Tests 3 – Quantitative Analysis

Increase Overall Site Conversion 25% Benchmark 2.1% Goal 2.7% Increase Online Consumer Sales 100% Benchmark $150,000/month Goal $300,000/month Reduce PPC Cost Per Conversion 50% Benchmark $60 Goal $30 Step 1: Benchmark & Set Goals

Increase Overall Site Conversion 25%

Benchmark 2.1%

Goal 2.7%

Increase Online Consumer Sales 100%

Benchmark $150,000/month

Goal $300,000/month

Reduce PPC Cost Per Conversion 50%

Benchmark $60

Goal $30

Step 2: Qualitative Analysis Watch – What, Where, How Identify Obstacles

4Q Surveys

Catalog Request overwhelming Category Page dissatisfaction Don’t want to Register Not enough Product info Duplicate Products Alert Midwest tape has function on its website and is extremely helpful. What We Learned

Catalog Request overwhelming

Category Page dissatisfaction

Don’t want to Register

Not enough Product info

Duplicate Products Alert Midwest tape has function on its website and is extremely helpful.

Key Process Steps External & Internal Search Top Exits Bounce Rate Merchandising Strategy Step 3: Quantitative Analysis Identified Opportunities

Key Process Steps

External & Internal Search

Top Exits

Bounce Rate

Merchandising Strategy

Setup Goals Are people taking the desired actions? Configure Goals Setup Funnel Steps

Configure Goals

Setup Funnel Steps

Where are people abandoning in the process?

Complete Arkangel Shakespeare Searches 119 Sales 0 (Requires “Site Search” Tracking in Google Analytics) Are they finding it and buying? What are your users looking for?

Losing 2 of 3 users on Popular Pages Top Exits

30-90% Bouncing on Product Detail June 2008 Product Detail Bounce Rate Nov 2008 After Removing Major Obstacle

30%  8% Eliminated Obstacle Eliminated Obstacle

Requires enabling “Ecommerce Tracking” in Google Analytics Merchandising Strategy Home Page Category Page Analysis & Decisions Google Analytics Website Optimizer GWO + GA Top Searches Analyze Price Clicks Revenues Transactions Revenue Contribution

Requires enabling “Ecommerce Tracking” in Google Analytics

Home Page

Category Page

Analysis & Decisions

Google Analytics

Website Optimizer

GWO + GA

Top Searches

Price

Clicks

Revenues

Transactions

Product Revenues Dropped 89% Last 11 days of October 28 Orders Last 11 days of November 3 Orders Don’t Steal from Yourself

Product Revenues Dropped 89%

Last 11 days of October 28 Orders

Last 11 days of November 3 Orders

Top of Funnel Higher Traffic Key Process Step Test Examples Catalog Request Category Tested Step 4: Website Optimizer Tests

Top of Funnel

Higher Traffic

Key Process Step

Catalog Request

Category

Website Optimizer Setup

What are we testing? What is a conversion? Action want to test Hypothesis? State Question Predicted Outcome First Test: Catalog Request

What are we testing?

What is a conversion?

Action want to test

Hypothesis?

State Question

Predicted Outcome

A - Original Verbiage Too Long Asking Too Much Too Many Distractions A

Verbiage Too Long

Asking Too Much

Too Many Distractions

Removed Columns Larger Catalog image Simplified form to minimum info needed A - New B

Removed Columns

Larger Catalog image

Simplified form to minimum info needed

A B Pick the Winner Winner! Increased Conversion +67%

Catalog Request Test Results Not Convinced…

A - Original A Follow Up Test

A Variation 1 B

A Variation 2 Added Email Newsletter B

Added

Email Newsletter

A Variation 3 Added Email Newsletter How did you find us? B

Added

Email Newsletter

How did you find us?

B: Variation 1 +42% B: Variation 2 Email Opt-in +17% B: Variation 3 Email Opt-in How did you find us +30% A / B Test Winner? A: Original

B: Variation 2

Email Opt-in

+17%

B: Variation 3

Email Opt-in

How did you find us +30%

Email Opt-in & How Heard -11% Email Newsletter Opt-in -25% Not Just Layout…

What are we testing? Top of the Funnel Usability tests showed dissatisfaction What is a conversion? Any category link or product link Hypothesis? 5-10% Increased conversion Major Impact on Sales Funnel Next Test: Category Page

What are we testing?

Top of the Funnel

Usability tests showed dissatisfaction

What is a conversion?

Any category link or product link

Hypothesis?

5-10% Increased conversion

Major Impact on Sales Funnel

A

Conversion Enhancement – Option 2 B

Pick the Winner A B Winner! Increased Conversion +10%

Price Points Product Copy Highlight Differentiators Free Shipping Customer Service Guarantees High Impact Test Elements

Price Points

Product Copy

Highlight Differentiators

Free Shipping

Customer Service

Guarantees

Best Practices are starting point, they are not rules, you must Test! Keep it Simple (major changes, fewer variations) Conversion within 1-click Test Pages with Most Potential Impact Top of Funnel Higher Traffic Key Process Step Disable Poor Performing Variations Failed Tests are still successes (prevent damage) Top 5 GWO Tips (for Immediate Feedback)

Best Practices are starting point, they are not rules, you must Test!

Keep it Simple (major changes, fewer variations)

Conversion within 1-click

Test Pages with Most Potential Impact

Top of Funnel

Higher Traffic

Key Process Step

Disable Poor Performing Variations

Failed Tests are still successes (prevent damage)

Shifted Focus “ audio books”  “books on cd/tape” 0% - 1.7% 2.3% - 3.1% Step 5: Optimize Marketing Campaigns

Restructured PPC more focused topical ad groups with ~1-4 keywords Identified “Free Shipping” Disconnect Added Negative Keywords (i.e. “book shelf speakers”) Improved Quality Score 2, 3, 4’s  7, 8, 9’s Decreased Spend 9% Increased conversion rate 61% Increased AOV 33% Increased Revenues 85% Optimized PPC

Restructured PPC

more focused topical ad groups with ~1-4 keywords

Identified “Free Shipping” Disconnect

Added Negative Keywords (i.e. “book shelf speakers”)

Future Opportunity  Currently Int’l Traffic Too Expensive Current Focus  Maximize Marketing Budget Eliminated International PPC since Non-Proportional ROI vs. International 1/3 Traffic USA 2/3 Traffic Segmentation 96% 4% Revenues

Future Opportunity  Currently Int’l Traffic Too Expensive

Current Focus  Maximize Marketing Budget

Eliminated International PPC since Non-Proportional ROI

Identified Issues Research (Recommendations Spreadsheet) Implemented Fixes (Proper Heading Tags, Meta Descriptions, Page Titles, etc) Site Optimization for Free Search Rankings

Consumer Traffic +20,000/month Cheaper Traffic! versus SEO CPC $0.02 240,000 visits/yr ($7k) PPC CPC $0.56 107,000 visits/yr ($60k)

33% Consumer Purchases +64% (595  978) Conversion Rate +19% Goal: Increase Consumer Sales Result: Sales up Quality Traffic?

(Subsidiary of Blast Advanced Media) Streamlined Checkout (No Accounts Required) Robust Promotion Mgmt Up/Cross-Selling 100% Search Engine Friendly Marketing Focused Website Optimizer Analytics Adwords Maps Graphing Google Integration Next Steps: New Ecommerce Platform

Streamlined Checkout (No Accounts Required)

Robust Promotion Mgmt

Up/Cross-Selling

100% Search Engine Friendly

Website Optimizer

Analytics

Adwords

Maps

Graphing

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