IRCE (Internet Retailer Conference and Exhibition) is over for 2012.
To all who came to IRCE2012, THANKS for visiting Chicago, the local economy appreciated your visit. I appreciated your ideas and the opportunity for networking in my backyard.
Even after all these years in technology, it still amazes me to see how technology continues to move quickly in a few different directions. So while I will be highlighting some different companies I met or got reaquanted with in the near future here at SEODamian in future posts, let me share what I see were some major trends here from the show.
One of the big values I find in going to trade shows is the ability to compare and contrast different vendors in the same hour. The challenge with other solutions for comparing (trade journals, industry reviews, analyst reports) is that they often span data that makes comparisons irrelevant. They are X’s last quarter’s version compared to Y’s next quarter’s beta version. You still get the same issue at a tradeshow, but you can typically sniff out the game and get the real scoop on what the 2 companies are at today, and compare to 3 other similar solutions. Some of the key trends I saw in Internet retailing are:
- Prices are dropping. No big change there, except the rate they continue to drop. Typically not the same product at the same company, but by a new competitor creating most of the functionality of an existing solution and more for a lower price. Be it Chat and chat management (LivePerson look out, LogMeIn and others are looking to eat your lunch), survey tools, Addon’s to Magento (shopping cart platform), shipping auditing (no minimums needed here), affiiliate management, flash sales tools (keep it all in house or partner) and more.
- SaaS is the trend. The cost to distribute code to customers, and deal with your internal data center/stack complexities is too expensive for most tool creators. It is far easier for them to increase staff to keep 1 (or 2) data center up and going, then trying to guess how you (the customer) tried to make your data center secure and how you dealt with your specific legacy issues. The test bed is far easier to set up (if they are using AWS-Amazon Web Services, it is about 3 command lines to generate ‘another’ test bed). If you as a retailer can’t deal with SaaS or it’s API, look for adding at least one 0 (zero) to your cost in purchase price, and far more in TCO.
- Big data is here. Small startups need a credit card with a few dollars open on it to get a billion dollar data center (Amazon Web Services) to build ‘rock hard’ services. The cost of AWS is low enough that the ability to deal with incredible amounts of data in real-time changes what is being deployed as solutions. This shows up at the consumer level as presorted and pretargeted for their needs, not brood strokes. No longer is confirmation that a card number may be valid a real number good enough. It has to be validated that it belongs as a charge, not reported stolen and has the proper credit limit.
- The is no one stop shopping. The amount of tools to run a successful ecommerce site continues to grow. From the need to change pricing rapidly on one or all your SKU’s, to deploying across multiple channels (store, Amazon, eBay, Affiliate, traditional site, Facebook, ShopEngines) you need a collection of tools that is reminiscent of the stacks of apps in the 70’s and 80’s. The big difference, they are best not home developed, and often hosted in and out of house.
- Change is now often measured in weeks and months rather then years for software deployment. If you don’t like what you see today, what a quarter and redo your RFP (Request for Proposal). But monitor the products and community reaction in the meantime.
There was a lot more I saw, but 500 booths is hard to summarize in a few lines, so more to follow in the next posts.
One of my projects is helping out a small non-profit. Their advocacy website is in WordPress. So when WordPress.org let them know that a new version was out, WordPress recommended upgrading 3 days after the release. The non-profit had a natural question: Should we upgrade our site to the new version? Seems logical. Newer is better, right?
Well not so fast.
The issue is one of managing risk by understanding the risks and the benefits. Here is where some analysis can be helpful.
Story of Wedding Cakes
In one of my former lives, I was an event photographer. I always vowed (pun intended) to not do weddings. The primary reason – the expectations of the customer (bride) are unreal. On that magical day, expectations are unreal and beyond control. If the baker makes a mistake, I as the photographer am already doomed. The expectation is perfection. For the entire wedding day. Everything. Including the weather. If anyone on the ‘team’ makes a mistake and all fail. Especially since everyone can make a cake, press a button on a camera (or cell phone, or a computer). So the question becomes why is making a cake (especially for a wedding day) so complicated? Well after listening to a few bakers and artists, I learned there are a thousand critical points where a simple cake turns complicated. Mostly because for each layer you add, all the little mistakes on the layer below it show up. Those little mistakes get amplified until you end up with the tower of Pisa or worse. While it may all work in the shop, taking it to the wedding or putting it out in public can expose those issues in ways not desired.
It becomes about risk. And managing risk. You cannot get rid of all the risks, but you can mitigate and prevent risk in many ways. Did I mention that risk plays into it.
Simple WordPress Upgrade – that’s all
A similar situation exists with a ‘simple’ WordPress website.
Now don’t get me wrong, I feel WordPress is a great tool for most websites (since most websites are simple in objective and construction). For those websites that is is not the case (more complicated) the conversation becomes far more nuanced. And I recommend WordPress as the 1st consideration for a site. Even if it does not belong on WordPress, it becomes a great prototyping tool, and scrum development platform for at least a place to converse with key stakeholders.
Recently, I was asked ‘should we upgrade to the latest version of WordPress?’ WordPress 3.3 had been released 4 days ago, and logging in to update the site created a prompt to upgrade. The short answer was ‘not now’. But I was not in a short answer mood. A big part of the issue was risk management, and the software layers involved like the layers on a wedding cake. I took this opportunity to have a teach able moment in understanding more about what is happening on a website.
Layers Upon Layers Upon Layers
In the world of web services, that layer cake that creates a website is sometimes referred to as LAMP (Linux, Apache, MS Sql, PHP). A whole other topic worthy of its own site, let alone a single entry. But back to the layers on our website ‘cake’ for this non-profit site.
- Why, let me start with listing the layers we are using, and where there could be issues:
- The hosting company hardware – usually shielded by the operating system. In fact most people working with a hosting company do not even know what the hardware is, or when it was last updated or changed. Not knowing is fine, but that hardware may not play well with this new version. But maybe this new release creates a lot more disk input/output and an old model hard drive cannot handle it. It it is a new ‘fancy’ SSD drive not optimized for this change and will wear out in only a couple of week. Perhaps the hardware is very slow in its RAM, and this new version is optimized for fast RAM and actually slows down because of this hardware configuration. Probably only a .1% chance of causing grief in this scenario.
- The hosting company OS (operating system), typically a Linux variation for most hosting companies not using heavy database tools. Again typically hidden, and takes some effort to determine the micro-release. But this is key in making sure all the hardware plays with the software. Whose version (or distribution) of Linux probably adds .1% risk. The micro-release adds about a .2% chance of challenge. (.4% running total)
- The web serving software (typically Apache or Microsoft IIS) and it’s micro-release. Again another layer to work in partnership with all other layers. This adds a .8% chance of challenge, mostly because it is more directly accessed and more configurable by the hosting company to meet the needs of the type of hosting (shared, virtual hosting, VPS-virtual private server, full server, reselling…). (1.2% running total)
- The control panel software (cPanel being the largest in the Apache web hosting management arena). This is the tool that lets you manage your hosting account. It lets you:
- create users,
- email accounts,
- empty log files,
- add more space for x subdomain,
- lock out Suzy’s account until she pays, or forward until she returns from long term absence.
- This adds about .3% risk to the stack. (1.5% running total)
- The install software. This is typically a button on the control panel software. Sometimes it needs to be updated to handle the customizations in the lower layers. This adds about.5% risk to the stack (2% running total)
- Add-ins – these can be at almost any of these levels but 2 main areas would be at the Apache/web serving software like a spam tool on the server, or log tracking tool (for collecting traffic statistics). Depending on how many are running, for a stable hosting company they add .1% risk to upgrading a WordPress level. (2.1% running total)
- WordPress release itself. This it what is creating the website on top of all the other layers to be shared with the world through the WWW. This adds risk based on where WordPress is in its lifecycle (the risk changes from when the product is new and ‘raw’, to stable, to needing to change and catch up to other tools that are ‘beating’ it in the industry, to being at its end of life cycle). At this point in WordPress’ cycle I would estimate that a .x (vs x. or .xx release) adds 1.5% risk to a stable ‘simple’ website. Part of this risk is just updating any software that is installed and running over installing from scratch. It is much easier to build from scratch in most software then to overlay running software and not do any harm (3.6% running total)
Plugins or Add-ons to WordPress. These are the SEO optimization tools, traffic analysis tools, and the other 17,409 plugins currently registered at WordPress.ORG (http://wordpress.org/extend/plugins/). These can add lots of challenge and conflicts. This is where a patient attitude can pay off in saved aspirin and Tylenol. This adds 2% to the risk (5.6% running total)
- The theme in WordPress. There are 1,458 as of today registered at WordPress (http://wordpress.org/extend/themes/). This is just what is registered at the site. This layer is the template gives the look and feel of the site, integrates all the previous layers (especially the plugins) to the site. Since this is on top of WordPress, it is more susceptible to issues. The risk level here is a function of how mature the software it is sitting on, and how major the release is. In this case a 3.x release, and a simple theme with few plugins (sorry for adding so many weasel words here, but it gets specific quickly) I estimate the risk at .2% (5.8% running total)
- Customization of the WordPress theme – this can be very minimal from changing the color theme from blue to green, or as major as adding a blog to a theme that was not designed for it. In this example, we had minimal customization on a simple theme. I estimate it adds .1% risk. (5.9% running total risk)
- Some tweaks to the stack that the hosting company added that is not clear, documented and well maintained. This is a black box of unknown. Since I did not choose or research this hosting company, I will guess the risk factor by the size and reputation of the hosting company. A better way to determine a more accurate risk estimate would be to look at the questions and comments posted by customers of the hosting company based on real issues they have had. Part of the detective work is to look at the responses and timeline of the hosting company. My estimate is .2% in this instance. (6.1% running total)
- Security patches applied to all the layers listed above based on when they came out, how thoroughly they were tested and how long they have been applied. Add .1% risk this month. (6.2% running total)
Add all the risk estimates up (sorry, the risk is cumulative), and the potential risk to upgrade is around 1 in 18 upgrades will have some challenge. This is where a testing and roll-back plan comes into play. And that is a whole other entry.
Conclusion on New WordPress Release
As complicated as this all sounds, new releases do usually work quite well. They typically run far more reliably then my car. The world we live in is complicated, but our ability to understand its systems is also incredible. Embrace the fun of change. Even a field of sugar cane and acres of wheat that make the wedding cake changes and evolves. Ask any farmer and they will certainly tell you about risk and risk management. Just like our web serving stack.
But remember there is risk, and consider the trade off of benefit to risk in your upgrade decisions. Oh, that is a whole other side to this analysis – what are the benefits of a change, or in this case an upgrade?
What kind of risk management do you typically perform in your decisions to upgrade software? Comment and contribute to the conversation below.
Have you heard about the long tail by Chris Anderson? Briefly his book is the ‘discovery’ that there is more ‘action’ in the rest of a market (in terms of total dollars or total number sold or total people involved or…) then the ‘top 10’ best sellers. He spends a lot of time doing lots of analysis that proves that there is more ‘area’ under the curve in the long tail or the ‘rest of the market’ or the top 1,000,000 less the top 10, then there is in the top 10 of most categories. Of course, top 40 radio stations do not want you to know this. Nor do Budweiser, Miller, Coke and Pepsi – they only feel the top 5 is all that counts.
What does this have to do with your website? Mostly that you do not have to be ‘the top 10’ of a ‘short tail term’ to be someone. You can be very successful by focusing on your niche. The key for success is to define multiple niches and excel at a niche rather then trying to be everything to everyone. You still have to rank high for your term, but it does not have to be a short tail term, it can be a long tail term (shoes vs. New Balance 531 AA Blue shoes).
This is born out by reviewing how searches are done on the Internet. The trend continues to be more and longer keyword phrases month after month as people continue to not find what they are looking for on short tail searches. Every go into a car dealer with the answer of ‘A Car’ to the ‘how can I help you?’. You frustrate most salespeople, they don’t want short tail answers, they want long tail answers – ‘I want a blue 2009 H2 with all the accessories’. Search engines are not (usually) smarter then even a car salesperson. They want you to identify what your interests are, what your desires are and how you will use the car – your
Look at your psychographic in smaller chunks of the long tail and put the ‘chunks’ together. Look at the casual buyer, the passionate collector, the person who only uses it once, the family that only buys from a recommendation.
The point is concentrate on behavioral targeting. Of course, this can get creepy if you go too far, but being perceptive is a benefit. So understanding that collectors what good shipping and wrappers is good. Knowing your customer’s bra size (especially if they have never ordered from you) is usually creepy. The key is to look at it through the eyes of your potential customer.
Just like you should not prejudge all blue people as cold and distant, you should not prejudge all your visitors as meeting just one standard way of behaving.
- Define different groups of visitors
- look at how they would prefer to interact with your business
- what should you do to most accommodate their preferences
- how will they be looking to find you
- what terms do each group use (surfboard vs. board vs. ) – need 4 examples of different terms that could be culturally or generationally different …Rad idea dude! Cool man! (when did cool get to mean hot?)
- create extra pages that are focused on each psychograpic to cater to the needs of each group
- look at what the overlaps are of the different groups this is what you should consider emphasizing in your main pages.
- look at and map (MS VISIO is good for this or mind map software) your potential target group. Look at where they overlap and where they don’t.
When you start designing your marketing campaigns, it is important to look at the long tail of your market. What do the different niches want? What are the solutions they are looking for? The different answers to these questions will help you identify the correct strategies for marketing effectively to the long tail. That will allow you to create effective keyword lists that are far easier to rank well in then the ‘short tail’ terms that ‘everyone else’ is battling for.
Rather then fighting for top 10 place for the term ‘Beer’ on Google, go after ‘Western Wisconsin’s best wheat ale’, your audience will be more dedicated, less price sensitive and easier to reach. In other words more profitable.
Here are some thoughts from Kevin Lee’s Poll on Linkedin,
Do you think your PPC (Pay Per Click) search spending will grow this year compared to last?
I believe SEM (search engine marketing) will increase, but the real question is will more dollars go to SEO (search engine optimization) or to SEM?
SEM will increase, because it is measurable and you can plan on it a lot more the SEO. More importantly, the results are often quicker with SEM than SEO. These days management wants quick results – harvest the sales this month, not planting for when we might be in business next quarter. SEM has fewer variables as far as knowing at least how many ‘clicks’ you are going to get. Certainly you still have a lot of back end ratios that can be ‘tweaked’ to get your true CPA (Cost Per Action) including copy, call to action and creativity. But at least you can report a ‘we had a million people come to the site’ that matches up well with the retail side of ‘Orbit’ people counters or what ever the ‘bricks’ side is using to count bodies. ‘Orbit’ people counters are devices that counts number of people entering a store each hour-most stores are counting how many are entering the store, as well as how many are buying and average spent per visit.
I think the answer is – it will be a draw – more dollars will go into SEO as SEM gets saturated. But SEM will get the easy money as response from traditional marketing continues to drop in response to TiVo, DVR, Hulu, YouTube, programming fragmentation (what time was that show on? – now its what day, time and station is that show on?), programming standardization (how many ‘dancing shows’ are there?) and simplification (reality TV), diluting brand equity and a host of other core mistakes on the traditional marketing side as it tries to adapt to the changing world of ‘500 channels of TV and nothing’s on’.
It will be interesting to see if the additional money in SEM produces good results or will too many hacks waste too much money and destroy the reputation of the industry for years to come, pushing marketing dollars back into traditional marketing as soon as the economy recovers, and traditional marketing can get their own act together for measurable results (especially with live viewings vs. 24 hour viewings vs. 7 day viewings).
So what do you think? Are you investing more in PPC in 2009 than in 2008?