Short-term suffering is always part of a more frictionless society but, over and over again, consumers have voted with their fingers and wallets.  The anti-piracy pressure applied two weeks ago was a much more stunning victory than Romney beating Gingrich in Florida. But, the story is long gone.  Despite the power of digital marketing for commercial entities to make good on threats by shutting down their websites, people proved they care more about convenience and efficiency than a just price for easy access to what copyright laws portend to protect.  Facebook’s $80-$100B IPO valuation will be another affirmation that the privacy train left the station a long time ago.

All of this aside, I do believe keeping that sharp line between Personal II and Anonymous II is paramount to protect the privacy people value most: their health and finances, in particular.  Privacy legislation is likely and self-regulation is crucial to keep ahead of misconstrued legislation. Without it, despite the illusion that privacy exists, it’s way too risky to tempt the congressional gods.

1.  Those who don’t have to do without, won’t.  Luxury spending is on a steep rise despite the down economies in the US and Europe.  Three years of a deep recession and 9%+ unemployment aren’t dampening the spirits of the bulls-eyed 1%.  Even NY State’s Governor Andrew Cuomo won’t hit the millionaire wallet and handbag.  States need every taxpayer they can get.

2.  Ecommerce, the at-once General Admission concert seats and genteel private entrance, will continue to capture increasing growth and wallet-share.  Led by search online and directed increasingly to handheld devices and tablets, consumers at home get the guilty pleasure, special discounts, free shipping and radically improved shopping experiences that they rarely get after sitting in traffic to get to their favorite retail store.

3.  Brands that integrate their marketing channels will win.  Consumers think they are already.  Most aren’t.  Those that don’t may not see what’s happening underneath their sales numbers given the likely positive Holiday growth numbers.  Like most consumer-led disruption, though, future declines won’t be polite.  Just ask NetBook manufacturers and the company trading under the symbol NFLX (Netflix).  Click here for the latest in multi-channel whitepapers.

4.  People want to donate.  They really do.  When will nonprofits understand they have to earn the right to capture those dollars?  Social media, search, mobile and display media are well-worn channels that the commercial marketers have proven.   If they took the least productive 10% of their year-end marketing and spent it to develop online brand credibility and downstream donations, wouldn’t it make nonprofit brands more relevant?  Internet time is a 2:1 ratio.  For every year of delay, it’s 2 years of catch-up.

5.  Consumers will become more loyal to their favorite brands, especially in the luxury sector.  All of the years of print ads have worked to embed strong loyalty and emotional connection.  Luxury brands aren’t making a mistake…they’re following the numbers.  Online display ads, at least today, still can’t grab and grip a customer like a provocative ad with Scarlett Johanson staring back at you.  Have you seen the Vanity Fair article?  Can tablets bring more allure and connection as print advertising continues to fade?  Amazon’s Fire, Apple’s iPad and HP’s unit numbers think so with 19.5 million sold in 2010.  So do I. Click here for the latest Luxury Brand study.

6.  Catalogs matter.  So does direct mail.  Mail is the ultimate push media given its ability to finely target the perfect prospect. No channel can cost-justify itself without its direct sales impact on website and retail store sales, and inbound telephone calls.  Why can’t the Post Office understand math’s most basic variable cost calculation?  As advertising costs go up, return-on-investment goes down which forces channel choice.  Without it, direct mail loses more than it wins.  No channel can cost-justify itself without its direct sales impact on website and retail store sales and, oh yeah, inbound telephone calls.  Lest we forget, 26.4% of the population is age 45-64, and baby boomers are buying (see Prediction #1).

7.  Email is back and growing, especially with the 55+ crowd.  Social media is hugely important and influences all, but the channel carries 2011 targeting and lifecycle-triggering capabilities along with its circa-2002 simplicity.

Ecommerce is about to reset its search bid rules to react to
consumer’s expectations although not for all products and brands, notably
Luxury.  Electronics and apparel will have no choice, especially
consumables and commoditized products, in my opinion.  Dayparting search
optimization is about to take on a new life when you consider that researching
will now start earlier which will impact site conversions related to new buying
patterns.

Will Cyber Monday and Tuesday stay the top sales
performers?  My bet says yes, but the curve is certainly going to flatten
over Thanksgiving weekend as opposed to historical, spikey high-peak
days.  Whether all of this generates incremental, new customers and demand
is the ultimate question.

We’ll know more in two and a half weeks.

If you believe everything you read, social media is ready to take over the world. Facebook now has 600 million members, Twitter’s valuation is at $8 billion. You’d think this would destroy old-school communication vehicles like email. You’d be wrong.

Look no further than the current belle of the ball, Groupon. Sure, it uses social media in its group-buying service, but the main driver of its business remains email. There are many other examples of strong digital businesses built off this backbone: Daily Candy, RueLaLa, Thrillist and Gilt. Maybe they don’t have the sexiness of a badge like Foursquare, but what they have is mass…email mass. Only email has the proven ability to drive sales at meaningful, high-volume scale. It might be fashionable to declare email is dead; it’s also dead wrong.

Social media is influencing people’s buying behavior, no doubt, but its ability to generate sales demand is still suspect. For driving revenue today, it’s little more than a niche play — and looks like it will remain that way for some time. Email, however, is generating very real impact at roughly 10-15 percent of 2012’s $165 billion in ecommerce sales. That’s about $25 billion at the top end, just in this sector. Ask a retailer like J. Crew what’s more important to it, email or Twitter?

According to the Department of Commerce, 30 percent of consumers don’t use the internet anywhere. It’s by choice. Most don’t want access and don’t carry smartphones. That means 92 million people are offline and not using social media. Count them out of your Twitter and Facebook strategy. On the other hand, 70 percent of U.S. consumers do have an internet connection and are online at their computers, on their smartphone, or both. That means big numbers for email. 

We hear constantly that Millennials aren’t using email anymore, spending all their time on Facebook. The mistake is assuming the habits of a 17-year-old stay the same a decade later. If that were the case, there wouldn’t be a red wine industry. People are getting more digitally sophisticated, but still less than 30 percent of the U.S. population has a smartphone.  The ones who have them in high numbers are who you’d expect, the 25-44 age group.

In today’s real-time news world, email plays an important function, too. Think about what’s going on in Japan, right now. CNN, The New York Times, Wall Street Journal, USA Today, all are highly-trafficked destinations. Even if you aggregated the daily visits of the top-10 content sites and made an assumption that people are donating through links, they still don’t have the reach or ability to target previous emergency donors like the American Red Cross, CARE, Doctors without Borders, and so many others. Add on the email masses using Gmail, Yahoo, AOL, and the cable networks, and our country’s ability to quickly reach the majority of the population is pretty staggering. That’s how millions will get raised, not through $10 texts through smartphones.

When it comes to privacy and personal information, particularly related to finance and health, consumers don’t trust new technology. Facebook and LinkedIn are segmenting and packaging personal information and there is a lot of angst around what they’re doing with it.  We know Congress is likely to put additional privacy legislation in place to protect against the misuse of exactly this kind of information. For transactions between consumers and banks, with doctors and hospitals, even kid’s schools and colleges, email is the trusted medium next to direct mail.  As the level of confidentiality goes up, the use of technology to communicate about its content goes down.

Moms are not going to use social media to talk about their kids or their struggle with paying their mortgage. They’ll use it to bash the Board of Ed, but they’re going to use email to intimate. It’s trusted, and they can easily reach who they need to, in confidence…one-on-one, or one-to-many. Take BabyCenter. Just about every expecting mother subscribes to its “Your Pregnancy” weekly email. No tweeting or checking-in needed.

Social media is incredibly powerful and its ability to amass people around common interests is undeniable. As an instigator, we know its impact. Look no further than Tunisia, Egypt, Libya and Iran. Email, however, goes beyond social media’s abilities despite its old-school technology and charm (don’t you still love getting a personal email in your mailbox, though?). Like technologies before it, its use will evolve, too. But for reaching the most amount of people in the shortest amount of time, nothing is quite the workhorse like email.

A special message to your mother, thanking her for the loan to help you buy a house? You better believe that’s a handwritten note, sent through the US postal system. Pictures of your kids or your cool snowboarding winter break snaps to your friends and family? Facebook works. But if you’re sending them to your Dad at work, you better email it. Want to know if Subway has their three free cookie offer today? Your iPhone or Droid Groupon app is perfect to check it out on your way out to lunch. You have an important presentation that needs a final edit, and your boss wants to see it beforehand? 

Email it.

In many market sectors, the traditional retailer is under siege. Take the apparel sector. Discounters such as Overstock.com, flash-sale sites like Gilt Groupe and Rue La La, fast-fashion players including Century 21, massive marketplaces such as Amazon, and fashion blogs like The Style Rookie have created a treacherous landscape for apparel retailers, which can no longer expect offline-branding or retail-footprint alone to adequately secure their online fortunes.

An apparel retailer, or any other type of merchant, that has its marketing and branding efforts siloed and is not evaluating its integrated business is at risk of losing its place in the online discussion.   

Case in Point: “Men’s Fashion”

Before you dismiss this as alarmist, let’s look at a simple example: men’s fashion. This is a good benchmark, as most menswear customers look primarily to retailers to inform their fashion choices. But of all the listings on the first page of Google for “men’s fashion,” only two are retailers.

The threat here is not that content sites such as GQ or About.com are taking control of the men’s fashion discussion, but rather that a straight affiliate play like www.mens-fashion-tips.com could capture more natural-search attention than Armani or Ralph Lauren or even Lands’ End.

These results, of course, are an algorithmic byproduct. Search engines aren’t editorial, so they typically do not favor one site over another for content reasons. They focus on how well the site matches their interpretation of quality and relevance for a particular search query. So why did only two retailers show up on page 1 for this query? Because the apparel merchants let it happen. They have ceded their voice in the search discussion for “men’s fashion.” 

As we dive deeper and narrower with search terms such as “men’s pants,” we see a much more retailer-focused environment, with Kohl’s, Macy’s, Banana Republic, and Gap among the diverse merchants appearing on the first page. And while the term “men’s pants” is still a very broad query, it does express significant intent to deeply engage with pertinent content.  And, at this level of query, the retailer rules the day. Why?

For the top-level query, such as “men’s fashion,” the eventual desired destination of the searcher is unclear. It is hard to tell if that searcher wants to learn more about men’s fashion, see videos about men’s fashion, or shop for men’s fashion. Over times, however, search engines have learned that the average search for “men’s pants” yields a click through to a retailer.

The Four Pillars of Optimization

The question remains: How does the apparel retailer—or any other retailer, really—position itself, from a natural-search perspective, to have a place in the broader discussion, at the edges of expressed intent to engage, in order to create a wide funnel and compel as many users as possible to engage with its brand?

There are four basic pillars of search engine optimization that elevate brands to the very widest end of the funnel or to the very top of a particular category.

Pillar 1: Keywords and Targeting. To properly position yourself to be part of a broad conversation, or even to infiltrate a targeted conversation in the search engines, you must have some degree of relevancy or you won’t have the legitimacy, never mind the natural-search ranking, to even be in that conversation. 

To play in the “men’s fashion” game, your site needs to have the keywords “men’s fashion” as a prominent part of it. To be relevant, you must have a clear relationship with the topic at hand. An association with a subject alone does not make you part of the discussion. “Stylish and affordable men’s pants, $79.99, free shipping” doesn’t put you at the table, in the same way that saying, “I once hit three home runs in a high school baseball game” does not reasonably associate you with Albert Pujols, either.

To be part of the conversation, research and target those keywords that show the widest visibility and greatest point of consumer engagement. Create relevancy on your site by creating content that is appropriate to the target keyword, create pages that are appropriate to the target, and create excitement around that target.

Pillar 2: Controllable Variables—On-site Optimization. In the world of the Internet, the only things that you can totally control are the elements of your own site. By mastering these elements, such as titling and tags, as well as search-optimized navigation and site structures, you can create an environment that is more conducive to search engine visibility for the terms that you target. These elements are crucial to the search engine spiders’ being able to access all of your content. And, of course, in order to play at the widest end of the discussion, you need to have great content around the target. (See Pillar 4.)

Pillar 3: Influenced Variables—Off-site Optimization. Off-site optimization, or more fundamentally, link building, is a core exercise in building overall awareness. A laserlike focus on link building from topically relevant sites with anchor text that targets the target keyword is the key to achieving top visibility for a particular keyword.

While this may seem like a dark art to some, targeted link building drives relevance to your site for your target keywords, and the search engines recognize this as authoritative and highly relevant context. The goal is to find the appropriate link partners and craft the right message to get them engaged enough to give you a link with your target keyword as anchor text. We typically find that these kinds of link-building exercises take enormous time and focus.

Pillar 4: Content. Content, they say, is king. And the single biggest reason that apparel retailers in particular have not seen success in infiltrating the broadest kinds of discussion on the Internet is that they do not create much content outside of product descriptions. To compete with the editorially driven sites and earn your right at the premiere place for the largest search volume query, you must have content that is unique, targeted, well executed, and focused on both the search engines and the users.

As with editorial players, the goal of retailers is to drive visibility through the leveraging of your domain expertise. Further, the quality content helps drive the value of your presentation at the edges of search intent. These kinds of presentations create true value for your consumer, and that, combined with the high quality expressed in your brand promise, will help drive the searcher to click through to your site rather than an affiliate site or an editorial site. Once engaged with this content, the searcher is accelerated into your sales funnel at high velocity.

Content is difficult to create, but the double benefit of increased presentation and velocity-driven customers is simply unparalleled. To wit, watch what the Gilt Groupe has done to drive natural-search optimization into an ecommerce model.  They cleverly use content, friend-building and in-bound links to drive up their rankings and, most recently, partnering with the television show White Collar, it’s becoming a storyteller rather than a retailer.

Traditional retailers are under attack. From direct brand solicitations to socially savvy shoppers hunting through Polyvore and Shopbop, they have never faced so much competition. But by focusing on the four pillars of search, a retailer can take back its voice, grab hold of the conversation, and drive ahead its editorial voice and shape the market and maximize its unique advantages. 

Search is powerful…but only when you use it.

Office of a Tie Buyer

Nothing brings innovation to digital marketing like getting inside the product and understanding what the head of merchandising is thinking about long before it hits the stores, the web or the catalog.  Even in this just-in-time retail world, decisions about what to buy happen long before consumers see the results of what‘s on that buyer’s mind.  And, most marketers miss it, too.  They’re too caught up with campaign plans and deadlines to stop the noise long enough to listen.   

I’ve always said that real listening is a contact sport.  Certainly with marketing, listening is far more important than talking.  Spending an hour with the people who make the calls on what people want is like hanging out with a musician while they’re writing a song.  It’s as gut-wrenching as deciding what note will be the first to hang on a clean piece of staff paper. 

Burnt Orange or Pumpkin?

Consider the 10-foot square office of a tie buyer I visited several months ago.  Boxes of the obvious, but check out the patterns, colors, textures and combinations being paired up.  Getting from this noisy madness to a bespoke choice and, then, dressing the right model with a look that can sell it is wrought with agonizing choices.  

But, herein lies the opportunity for marketers.  

Silky or Coarse?

Knowing what’s coming from reading a brief or a promotional calendar doesn’t put you inside the nuance.  Careful (and respectful) interrogation will provide more strategies than you can dream up in your office.  Search engine keywords for PPC and Natural Search will emerge once you understand the style and the thinking behind the choices.  Imagine building a display, PPC, email, copy, promotional, creative, SEO plan getting a hint of what’s going to sell, what products are getting what space or, possibly, be the run-away favorite…months before it gets decided.  

Want to get ahead of competitors?  Spend as much time with the merchandisers as you do the marketers.  Go to their conferences and spend time studying what their eyes see.  The crystal ball will at least be clearer.

The BTS period is highly compressed but is a harbinger for the Fall and Holiday seasons.  With 09 comps so challenged as a benchmark but most having improved performance in 1^st and 2^nd quarters this year, many retailers bought product aggressively.  And, of course, orders have already been placed for the balance of the year.  Not surprisingly, we’re seeing pre-season promotions well before prior years.  Check out the Washington Post article about Target, Toys R Us and Sears “Black Friday” sales.

This economy has consumers very nervous and anxious.  What we’re getting is pretty much what we were promised by the Fed a year ago.  Now that the movie has been playing for over two years, the lead actors would still be named, ‘Erratic’ and ‘Volatile’.  ‘Unpredictable’, at least, doesn’t  need top billing.  Even last week, Paul Volcker, economic adviser to President Obama, gave his own unvarnished version:  “This is not a bounce back.  We are suffering from some very large, undermining problems.” (Note that he didn’t say ‘underlying’ which is way too vague.)

US State Budget Shortfalls - Click to Enlarge

Consumer confidence, housing starts are disappointing, but the oil spill and, now, Bush’s tax cuts and more state money-grubbing is grabbing the home and front pages.  Anderson Cooper from CNN is still working the back stories, but economy news stories like these are a drag on people’s perceptions and, no doubt, trickle back into buying behavior. 

Clever promotions are helping to woo parents and kids to open their wallets, but they’re shopping like the predictions said earlier in the year that consumption would be of the necessity variety, with an occasional sprinkling in of a special or luxury item.   Hot teen brands like Abercrombie, Aeropostale, J Crew, Juicy, Delias, Urban Outfitters, Wet Seal and others will release their July numbers soon, so we’ll have a good look inside then.

Regardless of the tea leaves and what actually happens, consumers will remain reluctant spenders.  Intriguing, fresh and new products matched with the right touch of incentives and promotions need intense focus.  And, I think we need accelerated thinking right…about…now.

Disclaimer: I’m not a meteorologist or have any expertise in oil spills or environmental disasters.  But, I can read.  Because the story is still evolving, the truth is clear.  Video doesn’t lie.  Even BP admits to pretty much what the environmentalists say.

Every day, the impact hits me a little bit harder, but it’s cumulative.  It seeps into my daily business thoughts.  I’ve been calling this an economic disaster since the day it happened.  Ground Zero:  April 20, 2010.

Estimated Oil Spill as of 4/22/10

An acquaintance and client, Jerry White from the Landmine Survivor Network (now Survivor Network), calls landmines ‘weapons of mass destruction, one at a time’.  The BP calamity falls into the same category.  Most Americans can’t see it, touch it, watch it, or even imagine it.  Less than 10% of the population has direct access but 100% of us are going to feel it.  It will reverberate and seep into the economy in an insidious way starting with Wall Street and, then, onto Main Street.

Estimated Oil Disaster as of 6/9/10; grey arrows indicate loop and currents leading to the Florida Straits.

Sparing most of the torturous details, the best-case scenarios for the Gulf Coast (Texas, Mississippi, Louisiana, Florida, Alabama) are a sick paradox: 1) the spill gets capped tomorrow morning and the combination of controlled burns, oil capture, no hurricanes, Army Corps of Engineers, BP’s own experts, and luck minimizes the damage; 2) the oil catches the Gulf stream waters and the Loop Current and moves around the Florida panhandle and southern tip of Florida and travels Northeast.  The Gulf gets spared (?) from its worst effects but the Northeast gets its own brute force impact.  Every coastal state would be impacted.  That’s 13 states and 36% of the population.  But, whether the oil slick moves in the direction geologists are considering is irrelevant.  The facts are what they are.  The damage is done.  It’s just a question of degree.

The industries who are already dealing with it and will be confronting it this summer and, potentially for years to come, include the obvious like restaurants, hotels, resort travel, fishing, shipping, hunting, boating, swimming, and even scuba diving.  There’s no doubt that those who sell directly to consumers and business in each of these industries will  see a negative impact due to lost jobs, lack of access, marine life reduction, and danger.  And, I’m just focused on businesses that have ecommerce.

Let’s look at a simple view of revenues with a low negative 2.5% impact.  As a reasonable estimate, let’s assume $5 Billion in aggregate sales across a variety of companies and 40%, or $2 Billion, in ecommerce sales.

($5B total sales * 40% ecommerce) * – (2.5% economic impact) = $50 million

Breathtaking.  Even if I’m wrong by 50%, that’s still a $25 million in revenue loss in one year.  As marketers, we need to seriously consider our forecasting and anticipate economic wreckage certainly in the Gulf Coast region.  That has already happened.  And, if the worst happens and we have to compound this loss with a worse-case economic scenario that includes damage to the eastern seaboard economy, let’s understand this now.  Retailers’ shipments will still arrive and promotions can still happen.  Paid and natural search efforts will continue and websites will still accept orders.

But let’s not assume it’s not happening just because we can’t see it.

Next up:  What we can do to better understand the potential impact.

Finally, amid the fierce competition in direct marketing, those who create and tell the stories — the imaginative creative voices — are gaining back their seat at the solution table.  And, they should.  Media, marketing, technology.  None of it will spark interest if consumers are not first engaged, then captivated.  It’s the work of the designers, the writers, the artists, that capture that moment.

Strategy and creative are twins and need to live side-by-side, breathing life into ideas. With communication as complicated as it is today, the message must be seamless and integrated.  That can’t happen without intimacy, and intimacy happens best when there is a shared sense of purpose and priority.

Since the onset of Google’s rapid rise, creative work has fallen with a thud to a distant second place.  Making multi-channel messages clear and compelling is certainly not for technologists or marketers. Consumers know a strained or out-of-context creative, instantly.  It’s partly behind why I think some social media, like YouTube and MySpace, haven’t caught on as commercial venues.

Although some argue that advertisers want deeply specialized agencies, we are beholden first to consumer’s needs.  That connective tissue is what delivers an optimal experience and result.

The creative voice has to be at the table from concept inception, having a vested interest in the outcome and ensuring that design execution and artful writing are integral to the appeal. I believe that creative talent on-staff, employed by marketing services companies and agencies, delivers better product and is a good investment in delivering what matters, most: performance.

Chris Paradysz is CEO of PM Digital.

Whether it’s the realization that expense cutting won’t grow profits, or investor pressure — private equity, venture capital or otherwise – for valuation and distributable cash increases, it’s all good for marketing.  Depending on which group you’re listening to, private equity and venture capital investing is back in vogue and 4Q 2009 trends showed more deals than in the prior nine months.  And, early stage venture capital is, again, finding its way into web 2.0 and 3.0 technologies which are early bellweather indications for the durability and sustainability of the investments.

Based on last month’s eTail show, Shop.org, this week’s SES conference and a recent technology summit I slipped into while staying in a NYC hotel, the number of exhibit hall booths from new companies is surging.  Most won’t survive, but they’re pushing the status quo even at Google where new offerings are accelerating at an astonishing rate.  Do check out the beta of Google’s new Search Funnels that allows advertisers to see through brand-assist keywords’ connection to trademark terms.

Although not an exhibitor anywhere, a new fave and current fascination is Polyvore, a voyeur’s fashion website birthed in 2007 with Matrix Partners, Benchmark Capital and Harrison Metal venture capital.  While The New Yorker calls it “The world of virtual Anna Wintours”, I prefer Polyvore’s VP of product management’s description: “Our mission is to democratize fashion. To empower people on the street to think about their sense of style and share it with the world.”  It’s passion, in a category that’s anything but casual, a user-generated content engine, on a social media platform, with easy-to-use tools where users can buy what they create (or, a look someone else designed), right now.

Equipped with clipping (“clipper”) and dressing tools for the 6.6 million people who visit PV each month, I can build my own looks (“sets”) swiped from designer websites, other user’s sets in their closets, and create what my mind wants to see.  I’m no fashionista, but I’ve often said that there’s no excuse for bad shoes.

While the company is pointedly focused on building and installing a passionate user group, 2010 looks like the year they’ll accelerate their model.  There’s little doubt in my mind that designers are going to rush their own sponsored sets and contests online for Polyvore’s customers. But turning this growing revenue base and user passion (people import 1.2 million products per month into their closets and sets) into a commerce destination is the tough financial question.

That Badgley Mischka cocktail dress with Jimmy Choo heels and Alex Sepkus arm candy is dead-on.  Professionally, I’m rooting for them.  It’s a game-changer for retailers.  It has the easy-buying features of fashion auction sites but the American Idol intrigue that’s making aspiration appealing to the masses.  Personally, it’s just good fun.

Somewhere out there, someone has to be cooking up a men’s version.

Chris Paradysz is CEO of PM Digital.