Fresh Ideas for 2009 Holiday Season

Fresh Ideas... to Turbo Charge Your Keyword Search Advertising Program This Holiday Season

Message from our CEO: On behalf of the entire NetElixir team, thank you for taking the time to go through this workbook. We hope the “fresh ideas” presented herein will help you run a more efficient keyword search advertising campaign during the 2009 Holiday season. This is not meant to be a theoretical handbook but rather a practical workbook. We strongly encourage you to use the charts and performance indicators, applying your actual data, in order to derive maximum performance gains. Do feel free to write to me at udayan@netelixir.com to let me know if you found this workbook interesting and useful. Happy Reading and Happy Selling! Regards, Udayan Bose CEO NetElixir,Inc.

Why Do You Need a Search Advertising Workbook? • Successful keyword search advertising is “75% execution and 25% strategy.” • We have tested the concepts presented here on more than 200 retailer campaigns. • While this is not an exhaustive list, it will be a solid base for getting you off to a good start. • The beauty of the concepts lies in the fact that they can be used on an “as is” basis. • The ability to conduct smart, objectives-focused tests is key for optimal search advertising. • Some control sheets presented here need to be filled out by you on a weekly basis. You will thus be able to capture essential trends. • We place a lot of emphasis on regular data analysis and extracting usable insights. This workbook is meant to serve that purpose for you. -1-

The holiday shopping season spans nearly three months, from early October to end of December. Source: Google Trends Data -2-

Why Do You Need “Fresh SEM Ideas” for Holiday Season 2009? • All economic indicators point to one of the toughest holiday seasons ever. • Revenue realized per dollar spent on SEM has come down over the past year. • Despite the difficult economy, SEM remains a time tested customer acquisition channel. • Online shopping behavior is likely to be different this holiday season. • An advertiser can unlock enormous customer acquisition efficiencies by following some or all of the ideas presented here. -3-

10 Practical Tips to Propel Your Keyword Search Advertising Results

Build Your Objectives-Investment Scorecard Build Your Objectives-Investment Scorecard Why is this important? Why is this important? You will have an overview of investment vs. return on a single sheet. Remember that what you can’t measure, you can’t control. You will have an overview of investment vs. return on a single sheet. Remember that what you can’t measure, you can’t control. Objectives Investment X units of sale Holiday SEM budget, $ Y cost per sale SEM technology, $ Z revenue per sale In-house manpower, $ SEM agency fee, $ Reality check: Reality check: • What is the average CPC ($)? • What is your website’s clicktheconversion CPC ($)? • What is to average rate (%)? • Are the objectives achievable given the levelclick to conversion rate (%) ? • What is my website’s of investment? • What are the industry the objectives achievable given the level of investment? • Are benchmarks? • What are the industry benchmarks? -6-

Strategic Keyword Bidding during the Holidays Why is this important? During the holiday season, the average cost per keyword click (CPC) jumps by 50-80% for categories like flowers and gifts, apparel, and consumer electronics. 5 essential things to remember in keyword bidding • The bidding strategy should be product category-specific (know the categories on which not to aggressively bid). • Day-parting tactics help in better utilization of advertising budget. • The days of “vanity bidding” (aiming for the top listing position at any cost) are over. • Value per click is the ultimate measure of bidding efficiency. • A conversion is an outcome of multiple clicks on (often) multiple keywords (it is too simplistic to attribute a conversion to the last keyword click). Notes: • Since bidding is a real-time process, manual bid management is often not sufficiently expedient, especially for campaigns with 5,000+ keywords. Bid optimization technologies, such as LXRRetail, use complex algorithms to optimally execute this process. • The bidding strategy should be influenced by both short term as well as long term SEM objectives. The strategy adopted during the holiday season may not apply during other months. -7 -

Sample Promo-SEM Campaign Calendar Sample Promo-SEM Campaign Calendar Sample Promo-SEM Campaign Calendar Nov. 26 – – Dec. 2, Nov. 26 Dec. 2, Dec. 5 –5Dec. 9, 9, Dec.18 – Dec. 22, 22, Dec. – Dec. Dec.18 – Dec. 2009 2009 2009 2009 2009 2009 Description of Description of Promotion & Target Promotion & Target Product/Customer Product/Customer Segment Segment SEM Budget ($) SEM Budget ($) SEM Objectives SEM Objectives SEM Campaign:Variable ControlVariable Control Chart SEM Campaign: Chart SEM Campaign: Variable Control Chart Variable Plan Measurable Outcome Variable Plan Measurable Outcome Unique Campaigns Unique Campaigns Targeted Keywords Targeted Keywords Targeted Ad Creatives Targeted Ad Creatives Targeted Landing Pages Targeted Landing Pages Notes: Notes: • Analyze Outcome against SEM Objectives Notes: • Analyze outcomeAggregate learning and use for future promotions • AnalyzeSEM objectives. against • Outcome against SEM Objectives • Aggregate learning and use for future promotions. • Aggregate learning and use for future promotions -8-

Sync your SEM Campaigns with your Holiday Marketing PromotionYour SEM Campaigns with Your Sync Calendar Why is this important? Holiday Marketing Promotion Calendar Tailored, targeted keyword search advertising campaigns deliver superior results. Online Non-Travel (Retail) Holiday Consumer Spending Excludes Auctions and Large Corporate Purchases Why is this important? Total U.S. – Home/Work/University Locations Tailored, targeted keyword search advertising campaigns deliver superior results. Source: comScore, Inc. Millions ($) 2007 2008 % of Nov 1- Dec 23, 2008 Key Shopping Dates 2009 November 1 – $26,332 $25,537 100% December 23 • Thanksgiving Day: November 26 November 27 $273 $288 1.12% (Thanksgiving • Black Friday: November 27 Day) • Cyber Monday: November 30 November 28 $531 $534 2.10% (Black Friday) Key Shopping • Heaviest Online Shopping Day: December 8 December 1 $733 $846 3.31% Dates 2009 (Cyber Monday) • Thanksgiving Day: November 26 Heaviest Online $881 $887 3.47% • Black Friday: November 27 Shopping Day (Dec. 10) (Dec. 9) • Cyber Monday: November 30 • Heaviest Online Shopping Day: December 8 Source: comScore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world and preferred source of digital marketing intelligence. -9-

Know Thy Competitors Know thy Competitors Why is this important? this important? Why is You are not advertising in a “vacuum.” The “searcher” always likes to compare before making a purchase. You are not advertising in a “vacuum.” The “searcher” always likes to compare before making a purchase. You Competitor 1 Competitor 2 Product Price Promotions Brand strength Estimated SEM spend Number of keywords Unique selling points (ad copy and landing page) Average ad listing position Specific SEM tactics employed (e.g., day- parting) -10-

5 KPI’s Every Search Advertiser Needs Why is this important? A portfolio of key performance indicators (KPI’s) is needed to measure SEM driven customer acquisition performance in a holistic manner. KPI Checklist 1. Profit per click 2. Revenue per new customer (through SEM)/Revenue per customer (overall) 3. Average Order Value per new customer 4. Cost Per Conversion (Search)/Cost Per Conversion (All Channels) 5. Percentage of (converting keywords/all keywords) Notes: • Set KPI benchmarks before starting your campaign. • Track above KPI’s on a weekly basis. • Understand the campaign variables you need to control. -11-

Creating Your Targeted Holiday Keyword List Why is this important? your Targeted Holiday Keyword List Creating A targeted keyword list helps you gain appropriate reach coupled with high conversion probability. Why is this important? AThe 5 stage optimal keyword list building process (continuous cycle) targeted keyword list helps you gain appropriate reach coupled with high The 5 Stage Optimal Keyword List Building Process (Continuous Cycle) conversion probability. Stage Notes Research Listening platforms such as Twitter are valuable real-time keyword sources Select and Group Each keyword you select has to contribute towards campaign objective(s) Test Allocate 3-5% of your SEM budget to testing keywords for 60 – 90 days Analyze Assess how well a keyword fits in an ad group Refine Classify keywords into four performance groups – STARS, ASPIRANTS, LAGGARDS, and QUESTION MARKS -12-

Differentiate Through Targeted Ad Copy Why is this important? Relevant ad copy helps you stand out from the clutter. You can thus differentiate yourself, pre-qualify visitors, and build brand credibility. 5 questions your ad copy writer needs to answer 1. At whom is your ad copy targeted? 2. Does your ad copy convey your uniqueness? 3. What will compel the searcher to click on your ad (and not your competitor’s)? 4. Where does the searcher expect to land on your website post clicking? 5. Is your ad copy relevant to the keyword search query? Notes: • We recommend the creation of dedicated ad groups with tailored ad copy sets. • Ad copy performance needs to be monitored on a weekly basis. • Ten percent of low performing ad copy (that has been live for at least 90 days) across the entire account should be replaced with a fresh set of ad copy. • Allocate a percentage of your ad budget to test new ad copy every month. -13-

Use Twitter to Create “Immediate” Campaigns Why is Use Twitter to Create “Immediate” Campaigns this important? Campaigns built around keywords extracted from “tweets” are more immediate and relevant and therefore hold greater monetization potential. Why is this important? Campaigns built around keywords extracted from “tweets” are more immediatefor relevant 5 Benefits of using Twitter and and therefore hold greater monetization potential. SEM Targeted Campaign Creation 5 Benefits of Using Twitter for SEM Process Using Twitter Targeted Campaign Creation Process Using Twitter 1.1.Monetization potential of recent Monetization potential of recent conversations conversations 2.2.Edge overover competitors Edge competitors 3.3.Higher relevancy to customers Higher relevancy to customers cost per click 4. Significantly lower 5. Brand reputation enhancement per 4. Significantly lower cost click 5. Brand reputation enhancement -14-

Make Transactional Landing Pages Relevant Why is this important? A relevant landing page builds trust, demonstrates consistency of message, and guides the visitor along a logical conversion path. 5 things to keep in mind when building transactional landing pages 1. Maintain consistency of message and deliver what you promise, i.e., search query => ad copy => landing page. 2. Segment visitors and guide them along the appropriate conversion paths. 3. Keep the page simple – visitors should easily know “what to do next.” 4. Establish landing page specific KPI’s that link to overall campaign KPI’s (e.g., dropout rate at landing page mapped to final conversion rate). 5. Test – Test – Test. Notes: • Landing pages convey the core values of a website. • The landing page, along with ad copy, is responsible for building brand credibility more than any other “contact element.”. • Online shoppers “love” simple, linear conversion paths. -15-

SEM Performance Forecasts, Holidays 2009 (Nov. 1 – Dec. 23) Select Categories Forecasts, Holidays 2009 (Nov. 1 – Dec. 23) Category Clicks, y/y CPC, y/y CTR, y/y growth growth growth Flowers & Gifts Apparel Consumer Electronics Food & Drugs Home Furnishings Pet Supplies Home Improvement For the above categories, onon an aggregate level,expect the total total clicks For the above categories, an aggregate level, we we expect the clicks to to go up by 2-3%, CPC to go down by 3-5%, and CTR to go up by 6-8%. go up by 2-3%, CPC to go down by 3-5%, and CTR to go up by 6-8%. -16-

The Importance of Trademark/Brand Name Keywords Why is this important? Trademark or brand name terms are more likely to be the “last clicked keywords” for a conversion. Their contribution to total account conversions has increased by 5-8% over the last 12 months. Shoppers feel more “secure” buying from “known name” firms. 5 things to consider when buying trademark terms 1. Evaluate the performance of brand terms separately from non-brand terms. 2. Anticipate more advertisers to bid for your trademark terms (due to Google’s new trademark bidding policy) and prepare accordingly. 3. Ad copy that conveys the brand values clearly will do better. 4. It is not uncommon for your affiliates to use your URL as display URL in their ad copy. This may result in your ad not showing at times; ensure this is avoided. 5. Research proves that advertising on sponsored listings for trademark terms, even if you appear prominently in organic listings, adds to performance. -17-

Glossary • Ad Copy: A commercial message targeted to an advertiser‘s customer or prospect. • Campaign: Defines the daily budget, language, geographic scope and the networks where ads are displayed. • Clicks: Metric which measures the reaction of a user to an Internet ad. • Conversion: A conversion occurs when an ad click leads directly to some valuable user action such as a purchase, sign-up, registration, lead. • Cost per conversion: The advertiser’s cost to generate one sales/ conversion transaction. • CPC: The amount an advertiser pays to the search engine every time a user clicks on his ad listing. • CTR: Ratio of ad clicks to ad impressions. • Impression: A measurement of responses from a Web server to a page request from the user browser, which is filtered from robotic activity and error codes, and is recorded at a point as close as possible to opportunity to see the page by the user. • Keyword advertising: A type of advertising that uses keywords to trigger ads. Typically, advertisers select a set of keywords related to the product or service they wish to advertise. The ads are then displayed in relevant places based on those keywords. • Landing pages: The actual URL of the page that an ad links to. • Organic listing: Organic search results in search engine result pages that appear because of their relevance to search terms, as opposed to their being advertisements. • PPC: The pricing structure used by some online channels to charge an advertiser each time a user clicks on the advertiser’s ad listing. The amount is usually set by the advertiser, not by the channel. Also called cost-per-click (CPC). • SEM: A form of Internet Marketing that seeks to promote websites by increasing their visibility in the Search Engine result pages. • Tweets: Tweet is a post or status update on Twitter. • URL: A URL (which stands for Uniform Resource Locator) is the location of a webpage or file on the Internet. - 18 -

About NetElixir NetElixir, Inc., is a Princeton, NJ, based online customer acquisition management firm with offices in New York, London, India, Germany, and Denmark. The company advises clients worldwide on online customer acquisition strategies and, using its proprietary technology - the LXR core platform, helps them achieve online advertising performance maximization. Website: www.NetElixir.com Email: info@netelixir.com Blog: http://netelixir.typepad.com Twitter: http://twitter.com/udayanbose Twitter: http://twitter.com/netelixir - 19 -

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NetElixir Global Offices Global Headquarters Europe Offices Asia Pacific Office 475 Wall Street Schwarzwaldstrasse 340 #001 & 002, Princeton, NJ 08540 79117 Freiburg, Germany Jyothi Bhopal Chambers, USA Phone: +49-172-620-4921 #7-1-19/5, Begumpet, Phone: +1-609-356-5112 Email: sales@netelixir.de Hyderabad 500016 Email: info@netelixir.com AP, India Nitivej 10 Phone: +91-40-4003-8996 US Offices 2000 Frederiksberg 77 Great Road, Suite 204 Copenhagen, Denmark Acton, MA 01720 Phone: +45-6128-9880 USA Email: sales@netelixir.dk Phone: +1-978-314-8484 Email: sales@netelixir.com New Broad Street House 35, New Broad Street 80 Maiden Lane London EC2M INH New York, NY 10038 Phone: +44 -203-393-6937 USA sales@performancesearch.co.uk Phone:+1-646-831-8670 Email: sales@netelixir.com - 21 -

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Fresh Ideas for 2009 Holiday Season

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