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LAMPS PLUS Reduces CPA by 30 Percent Using Omniture's SiteCatalyst

  • August 01 2004, 1:00am EDT
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Established in 1976, LAMPS PLUS is the largest specialty lighting chain in the nation with more than 40 retail stores in the western United States and more than 5 million customers a year. Like most brick-and-mortar stores, we rely on traditional marketing and promotional initiatives to drive sales into our physical stores. Initially we decided to launch an online division as an information portal site to support other sales channels. However, we quickly recognized the potential of the Internet as an additional sales channel and began to ramp up the division.

Our store locations are based primarily in the western region of the U.S. It didn't take long to realize that the Internet could extend our products beyond our stores' geographical restrictions. With that in mind, we began an aggressive online advertising campaign.

As with most companies, our budget dollars are critical to our success. We needed a way to ensure the money we spent was focused on advertising campaigns that have the greatest impact on revenue. Until last year, we couldn't tell which online advertising channels were giving us traffic and which were providing revenue.

Enter Omniture's SiteCatalyst. After an extensive evaluation of analytic vendors, we implemented SiteCatalyst. We are very excited about the depth of data we receive, but our ability to understand the data is even better. SiteCatalyst's graphical displays allow us to easily understand the information we are receiving and quickly make decisions based on that data.

Now, we base online advertising decisions on the information provided through SiteCatalyst. We know the cost per million (CPM), cost per click (CPC) and cost per acquisition (CPA) of every campaign we are utilizing, and we can evaluate this information against our benchmark. If a campaign doesn't hit a certain threshold, we can eliminate it so that we can divert our marketing dollars into more effective channels.

Perhaps the most significant impact on the business since using SiteCatalyst is that we can now effectively evaluate the effect each ad has on revenue. Last year, we initiated a month-long campaign with LookSmart. We knew we had received a great boost in traffic, but we didn't know what the CPA was. After implementing SiteCatalyst, we decided to try it again. It was quickly apparent that LookSmart provided us with one of the lowest CPAs; therefore, we decided to expand our program.

This success has also translated to additional marketing initiatives such as search engine marketing. On average, our team buys between 2,000 and 3,000 keywords from Overture, a cost-per-click search engine. Using SiteCatalyst, we soon discovered that not all keywords, however, contribute directly to revenue. One of the original keywords we secured through Overture was "home decorating." With SiteCatalyst, we were able to determine that this keyword drove a significant amount of traffic to our site, but the traffic didn't translate to purchases so the keyword was dropped.

All of our online marketing efforts hinge on the ROI of the advertiser. Having access to SiteCatalyst data has helped us negotiate contracts and know how much we should pay. As a result of this type of analysis, we have reduced our CPA by more than 30 percent.

Omniture SiteCatalyst is the industry's most mature, remotely hosted Web analytics solution. It empowers users throughout an organization with critical information in real time, surrounding the factors that influence the success of their online businesses. SiteCatalyst provides bottom-line information that quantifies and visually represents the effectiveness of Web site and marketing initiatives.

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