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Tuesday, March 20, 2012

The Psychology of Menu Marketing

People spend a lot of time looking at restaurant menus--ordering can be serious stuff! It's no surprise that corporate restaurants hire psychologists, designers, and marketers to optimize their menus for increased sales and higher volumes of better margin products. Below I've outlined a few of the tactics restaurant chains use to steer diners toward their preferred items as they navigate a menu.

  • Price Anchoring: Price anchoring is a common tactic used to ground a user on a high price in an effort to increase their willingness to pay.  By establishing a baseline for price at a high level, all other prices suddenly look low relative to the high price.  
  • Visual Cues: Basic changes in visual treatment can also be used to increase sales of more profitable meals.  The use of boxes, photos, and large font sizes are common ways that this can be accomplished. Another visual tactic is to avoid the use of dollar signs ($) before prices, avoiding the psychological trigger of values being perceived as costs.  See the Panera Bread menu above for an example of a menu that's lost its price tags.
  • Information Overload: As menus are more packed with statistics like calories, nutrition facts, and prices, opportunity presents itself for the menu marketer.  By matching lower calorie meals with higher prices, diners are forced to make a tradeoff between healthy choices and their dollars.

Tuesday, February 28, 2012

Ask.com's Traffic Strategy

Ever notice Ask.com advertisements when you're searching for something on Google?  Most people I know who don't work in the online world generally say that they don't notice Google's search ads--much less admit to navigating to Ask.com directly from Google. IAC, the parent company of Ask.com, however is one of the largest advertisers on Google, according to Kantar Media.  How can that be?

It's likely that a significant portion of their budget is going into driving Google search users directly to relevant search pages on Ask.com. This accomplishes two key goals for Ask.com: 1) These ads drive new users into the Ask.com ecosystem, some of which are likely retained and use Ask.com services over the long run 2) This traffic is also likely quickly monetized by Ask as they serve relevant ads as a Google Search Partner.  This is interesting because it reflects the economics of search traffic for certain keywords--in this case it looks like Ask.com is able to profit from buying search traffic from Google and in some cases selling it right back to them.  I have no direct insight into whether this hypothesis is correct--I'm only speculating.

The screenshot below shows a Google search query for "free iphone 5," a product that so far doesn't exist.  Notice the Ask.com advertisement on the right hand side.

The screenshot below shows the landing page for this advertisement--the user arrives at Ask.com where she can take a number of actions including creating an Ask.com account, visiting one of the organic results, or even click one of the Google Search Partner ads located at the top of the page.

Wednesday, February 15, 2012

Who are the Largest Advertisers on Google?

The bulk of Google's revenue comes from paid search, the company's flagship product, but who are these advertisers and how much do they spend? This information is obviously highly confidential and not even shared in Google's financial filings, but Kantar Media, part of WPP, published their own estimates of how much the biggest advertisers are investing in awareness and driving traffic to their websites.

The numbers are eye-popping, especially when expressed as spend per day (see below).  According to Kantar, IAC spent roughly $645,000 per day on driving search traffic to their various web properties, most of which likely went to Ask.com and Match.com.  Other advertisers aren't far behind, with a solid representation from online retailers (Amazon / eBay), financial services, and communications services.  What these advertisers have in common is that they either transact in high volumes online or are in fiercely competitive markets with high customer lifetime values.  One surprising company on the list is Blackstone, the private equity firm, which makes it's way onto the pack because of their ownership in Hilton Hotels.