What Is Your Conversion Rate?

When most marketers and analyst talk about conversion rate they seem to quote around 2 to 3% as the average conversion rate. Bryan Eisenberg wrote a great article on this subject titled The Average Conversion Rate: Is It a Myth?

In this article he writes:
“The sites that should convert 2 to 3 percent of their traffic are the exception, not the rule. I've long stated that sites that convert less than 10 percent should be concerned. Consider this along with the rising cost of online traffic, and the concern becomes a nightmare. Too many online marketers are spending too much money and time throwing too much unqualified traffic at their sites, then tweaking their traffic quality trying to reach the 2 to 3 percent mythical conversion rate.
If more online marketers focused their efforts on studying visitor intent and site optimization, instead of just driving traffic, their average conversion rates would be much, much higher.”

To inspire you or to make you depressed (the choice is yours) here are some of the top conversion rates for e-commerce sites as reported by Marketingcharts.com.



Source: Marketing Charts (via Nielsen Online)
Note: To be considered, e-commerce sites must have had a minimum of 500K unique visitors during the month. Conversion-rate data is based on visitor conversion rates, not session conversion rates: i.e., No. of unique customers/No. of unique visitors.

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Wal-Mart Enters Behavioral Targeting

Yahoo has signed a deal with Wal-Mart under which Yahoo will start selling display advertising on Wal-Mart.

Yahoo will use the behavioral data collected on Wal-Mart's website to better target the ads, a practice known as behavioral targeting. As I understand, Wal-mart will use yahoo for serving behaviorally targeted in-house ads (and products) and behaviorally targeted 3rd party ads.

Side note: I believe that in near future all of the eCommerce sites will have some version of on-site behavioral targeting. eTailers (Online retailers) cannot put generic messages and products in front of customer and expect the conversions to go up. They will have to understand what customers want (or need), where customers are in their purchase decision and put relevant messages and products in front of them (more on that later).

Wal-mart's latest foray into online classifieds (IMHO they should have built their own classifieds instead of using oodle.com) and now deal with Yahoo to sell targeted advertising is the beginning of a long list of offering that Wal-Mart will roll out as a part of their online strategy to compete with Amazon, eBay etc.

Amazon v/s Walmart.com

I am including this chart to show how traffic to Walmart.com compares to Amazon. It will be interesting to see how Amazon and Wal-Mart compare to each other after Wal-Mart moves forward with its online strategy and rolls out new offerings.

Note: Wal-Mart uses oodle.com to power its classifieds; the traffic Wal-Mart will get on its classifieds section is attributed to oodle.com and not to Wal-Mart, since the classifieds resides on oodle.com domain. Not a very smart move by Wal-Mart.





What do you think? Comments?

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