Sales Prove Elusive: Emeryville Gourmet Chocolate Company has a
Rough Go of it
Ilana DeBare, Chronicle Staff Writer
Sunday, May 20, 2007
Two gourmet chocolate companies. Two pay-per-click ad campaigns.
Two very different results.
Charles Chocolates -- a small artisanal chocolate manufacturer in Emeryville --
spent $3,000 on pay-per-click ads over a three-month period last year and sold
fewer than five boxes of chocolates.
Meanwhile, Lake Champlain Chocolates -- a rival chocolatier based in Vermont --
sells about 30,000 pounds of chocolates each year from pay-per-click ads.
What accounts for that difference?
With 100 employees, Lake Champlain is far larger than 25-person Charles
Chocolates. And with an annual pay-per-click budget of $100,000, it also spends
far more on ads than Charles Chocolates did.
But that doesn't really explain the difference. When Lake Champlain started
experimenting with pay per click in 2002, its budget for all forms of marketing was
just $5,000.
What Lake Champlain did have was an inquisitive employee who threw himself into
learning everything about how pay per click works -- mastering arcane details and
strategies about keyword bidding while his colleagues looked on in bemusement.
"For the first couple of years, I don't think people here realized what was going
on," said Chris Middings, marketing director for Lake Champlain and the
company's pay-per-click guru. "We were growing at about 40 percent a year. I'd
explain it to them and they'd kind of shake their heads and say, 'Whatever. It
seems to be working.' "
That was in the early years of pay per click. Lake Champlain had tried mail-order
sales through magazines like the New Yorker but never got much response.
Middings was fascinated by a medium that seemed the reverse of conventional
marketing.
"The world was coming to us -- sitting down at the computer and typing 'gourmet
chocolate gift,' a desire we knew how to fulfill," Middings said. "Instead of us going
after consumers with a shotgun, this was a kind of laser pointer coming from the
consumer."
Middings taught himself the tricks of the trade. He developed a list of 70,000 --
seventy thousand -- keywords to bid on. (Today the company bids on about
30,000).
He also drew up a list of 1,000 keywords where the firm's ads shouldn't appear,
even if the search were related to chocolate. This was to avoid paying for clicks
from shoppers who weren't in Lake Champlain's upscale niche.
"I eliminated keywords like 'gift card,' 'cheap,' and 'free,' " Middings said. "And
'chocolate-covered scorpion.' I only wanted to pay for that one once."
Middings kept a close eye out for linguistic misunderstandings that could run up
his bill. At one point, he realized that many computer users searching for "Easter
egg" weren't looking for holiday chocolates: The term also applies to a hidden
feature on a DVD.
And he limited Lake Champlain's ads to search result pages, which he found
generated more sales than content-oriented Web pages.
"If someone is reading an article about chocolate and sees a link, they're not
necessarily in a buying mood," he said. "The return was never there."
Charles Chocolates, on the other hand, stumbled into a number of these traps
during its brief foray into pay per click last year.
The Chronicle asked Lael Sturm, an Internet marketing consultant, to look into
Charles Chocolates' campaign and identify what went wrong. Company owner
Chuck Siegel gave Sturm a tour of his factory earlier this month and then sat down
to hear a litany of his mistakes:
-- Siegel had advertised on content sites as well as search pages.
-- He hadn't modified the ad text to match each specific keyword.
-- He ran generic-sounding ads that didn't convey the upscale, gourmet nature of
his confections.
"You can use words in your ad that are a little standoffish," Sturm said.
"Is that all right? Won't it turn people off?" Siegel asked.
"It turns the right people off," Sturm said, "and contributes to your brand."
With pay per click, apparently, the devil is in the details. Charles Chocolates had
the right general idea but made a series of small missteps that added up to a
marketing debacle.
"It really comes down to knowing what you're doing," Sturm told Siegel. "You make
a terrific chocolate, but you're not in the online marketing world. Pay per click is
slightly easier to do than other forms of advertising, but it's still difficult to do right."
In Vermont, Lake Champlain Chocolates decided about 18 months ago to hire an
agency with Internet expertise to manage its pay-per-click campaign, a move that
doubled its pay-per-click sales.
In Emeryville, Charles Chocolates has steered clear of pay per click since last
year's disaster. It has been busy with other marketing initiatives such as opening a
retail store and a chocolate cafe.
Will it ever give pay per click another try? After hearing Sturm's suggestions,
Siegel seemed open to the idea.
Maybe.
"Pay per click is an obvious way to market your Web site, if you can make it work,"
Siegel said. "If we implement his ideas, would it make a difference? Maybe we
should give it one last shot."
This article appeared on page E - 1 of the San Francisco Chronicle on 5/20/2007
Rough Go of it
Ilana DeBare, Chronicle Staff Writer
Sunday, May 20, 2007
Two gourmet chocolate companies. Two pay-per-click ad campaigns.
Two very different results.
Charles Chocolates -- a small artisanal chocolate manufacturer in Emeryville --
spent $3,000 on pay-per-click ads over a three-month period last year and sold
fewer than five boxes of chocolates.
Meanwhile, Lake Champlain Chocolates -- a rival chocolatier based in Vermont --
sells about 30,000 pounds of chocolates each year from pay-per-click ads.
What accounts for that difference?
With 100 employees, Lake Champlain is far larger than 25-person Charles
Chocolates. And with an annual pay-per-click budget of $100,000, it also spends
far more on ads than Charles Chocolates did.
But that doesn't really explain the difference. When Lake Champlain started
experimenting with pay per click in 2002, its budget for all forms of marketing was
just $5,000.
What Lake Champlain did have was an inquisitive employee who threw himself into
learning everything about how pay per click works -- mastering arcane details and
strategies about keyword bidding while his colleagues looked on in bemusement.
"For the first couple of years, I don't think people here realized what was going
on," said Chris Middings, marketing director for Lake Champlain and the
company's pay-per-click guru. "We were growing at about 40 percent a year. I'd
explain it to them and they'd kind of shake their heads and say, 'Whatever. It
seems to be working.' "
That was in the early years of pay per click. Lake Champlain had tried mail-order
sales through magazines like the New Yorker but never got much response.
Middings was fascinated by a medium that seemed the reverse of conventional
marketing.
"The world was coming to us -- sitting down at the computer and typing 'gourmet
chocolate gift,' a desire we knew how to fulfill," Middings said. "Instead of us going
after consumers with a shotgun, this was a kind of laser pointer coming from the
consumer."
Middings taught himself the tricks of the trade. He developed a list of 70,000 --
seventy thousand -- keywords to bid on. (Today the company bids on about
30,000).
He also drew up a list of 1,000 keywords where the firm's ads shouldn't appear,
even if the search were related to chocolate. This was to avoid paying for clicks
from shoppers who weren't in Lake Champlain's upscale niche.
"I eliminated keywords like 'gift card,' 'cheap,' and 'free,' " Middings said. "And
'chocolate-covered scorpion.' I only wanted to pay for that one once."
Middings kept a close eye out for linguistic misunderstandings that could run up
his bill. At one point, he realized that many computer users searching for "Easter
egg" weren't looking for holiday chocolates: The term also applies to a hidden
feature on a DVD.
And he limited Lake Champlain's ads to search result pages, which he found
generated more sales than content-oriented Web pages.
"If someone is reading an article about chocolate and sees a link, they're not
necessarily in a buying mood," he said. "The return was never there."
Charles Chocolates, on the other hand, stumbled into a number of these traps
during its brief foray into pay per click last year.
The Chronicle asked Lael Sturm, an Internet marketing consultant, to look into
Charles Chocolates' campaign and identify what went wrong. Company owner
Chuck Siegel gave Sturm a tour of his factory earlier this month and then sat down
to hear a litany of his mistakes:
-- Siegel had advertised on content sites as well as search pages.
-- He hadn't modified the ad text to match each specific keyword.
-- He ran generic-sounding ads that didn't convey the upscale, gourmet nature of
his confections.
"You can use words in your ad that are a little standoffish," Sturm said.
"Is that all right? Won't it turn people off?" Siegel asked.
"It turns the right people off," Sturm said, "and contributes to your brand."
With pay per click, apparently, the devil is in the details. Charles Chocolates had
the right general idea but made a series of small missteps that added up to a
marketing debacle.
"It really comes down to knowing what you're doing," Sturm told Siegel. "You make
a terrific chocolate, but you're not in the online marketing world. Pay per click is
slightly easier to do than other forms of advertising, but it's still difficult to do right."
In Vermont, Lake Champlain Chocolates decided about 18 months ago to hire an
agency with Internet expertise to manage its pay-per-click campaign, a move that
doubled its pay-per-click sales.
In Emeryville, Charles Chocolates has steered clear of pay per click since last
year's disaster. It has been busy with other marketing initiatives such as opening a
retail store and a chocolate cafe.
Will it ever give pay per click another try? After hearing Sturm's suggestions,
Siegel seemed open to the idea.
Maybe.
"Pay per click is an obvious way to market your Web site, if you can make it work,"
Siegel said. "If we implement his ideas, would it make a difference? Maybe we
should give it one last shot."
This article appeared on page E - 1 of the San Francisco Chronicle on 5/20/2007
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