PERSONALIZATION: AN ANSWER TO SOME KEY CHALLENGES OF THE CLASSIFIED INDUSTRYWHITE PAPER

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1 INTRODUCTION ..................................................... 2

2 AbOUT PERSONALIZATION .......................... 4

3 RECOMMENDATION

SYSTEM’S METHODS .......................................... 6

4 ADDRESSING CHALLENGES

OF CLASSIFIED SITES ......................................... 8

4.1 DECREASING YOUR bOUNCE RATE .................. 8

4.2 PRODUCT COLD START ......................................10

4.3 VISITOR COLD START...........................................11

4.4 MObILITY ................................................................13

4.5 ExCESSIVE CHOICE .............................................17

4.6 THE LONG TAIL .....................................................20

4.7 DEAD-END ExIT PAGES ......................................22

4.8 ACqUIRING AND RETAINING SELLERS ...........24

4.9 VALUE-ADDED SERVICES ...................................27

4.10 LOYALTY AND RETENTION ..............................30

REFERENCES ...............................................................35

table of contents

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INTRODUCTIONPersonalization seems to have become a real buzzword in the digital world. Consequently, there are several alternatives and misinterpretations when it comes to defining personalization’s use on the World Wide Web, and also the effect personalized content has on individuals.

To give our Readers an overview of this topic, we begin the white paper with a short introduction of personalization as seen by both critics and supporters, followed by a review of recommendation system methods.

Then, as a primary mission, we concentrate on some current challenges in the online classifieds industry, which can be strongly supported by the sophisticated application of on-site or off-site personalization tools. We suggest solutions for numerous delicate issues and risky situations that can affect your visitors, such as:

• Getting started: even if you personalize your site, how will you treat a brand new visitor with no information about her preferences, or a new classified ad that has just been placed? (Visitor cold start & Product cold start)

• Are you prepared for the mobile revolution? Do you know how to optimize your content for such a small screen? Have you already come up with a solution to identify the same person accessing your site via 3 different gadgets? (Mobility)

• Can you help your visitors find what they are looking for in the overwhelming

supply of popular products and ease their decision-making process? (excessive choice)

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• What can you do to find the right audience for niche products? (long tail) • Do you really seize every opportunity to keep your visitor on the site?

How do you handle typical exit pages, like the zero result page and an ad placement confirmation page? (Dead-end exit pages)

• Are you having a hard time motivating your sellers and buyers to sign up for

your premium services? (Value-added services) • How do you make use of referral information from the user’s previous site

or keywords she used before clicking on your Google Adwords PPC ad? (bounce rate)

• How do you take into account the dynamic roles of your visitors when

deciding which approach, metrics and tools to use for retention, self-acting referrals and free word of mouth? (loyalty and Retention)

If you think a little guidance in such challenges would be of help, or if you already have answers to these questions and would be happy to compare them to ours, this document is exactly what you need to read right now. We wrote this white paper with you in mind. Our goal was to deliver practical and reliable ideas, helpful solutions and clear explanations to those who want to take their classified business to a new level. We sincerely hope you will find them valuable.

so please, read on!

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AbOUT PERSONALIZATIONIs personalization a censorship? A diversion from the entirety of accessible information? Or is it simply a way to enhance the 21st century customer experience? An answer to the challenges of information overload and shrinking attention span?

We hope that our whitepaper will help you decide for yourself!

Personalization − a buzzword you need to knowA technical definition would be this: personalization is the process of optimizing an output according to the receiver’s individual needs, based on information we either know or are able to predict about his or her actual needs and preferences.

The approach you choose and the filters you apply need to satisfy your customer and dynamically adjust to her actual demand. Often, the best option for a new user is to offer a fairly wide and varied range of products or content to give her the experience of discovery and keep her on your site. However, when this same user returns two days later and focuses on a specific product category, she might prefer a narrowed-down selection of product offers to satisfy her current demand.In short, personalization means taking account of what is best for each user at any given moment.

But what do consumers think about it?As expected, people’s views on the desirability of personalization are varied. However, a study conducted in 2013 has shown a remarkable trend: 86% of respondents believe personalization influenced their purchases and 58-67% of those who experienced personalization are in favor of personalized coupons, offers, promotions and product recommendations. Consumers seem to have already voted on the question.

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… and the critics?Some critics define the outcome of personalization as the filter bubble, in which

“users become separated from information that disagrees with their viewpoints, effectively isolating them in their own cultural or ideological bubbles”. [1] They call personalization an individually tailored censorship and a vicious cycle, which results in “fast food information” based on personal preferences. The more time users spend and the more they click on a personalized site, the tighter this bubble will be. This way, critics say, personalization does not let them discover significantly different content, products or points of views.

Our rebuttal for this is rather sim-ple: think about the pre-Internet era. People didn’t read every news-paper, did they? They had one or two favorite ones and only read those. The same was with TV chan-nels. They had a handful of chan-nels they liked to watch and ig-nored the rest. Radio stations were the same. Just as were grocery stores, supermarkets, cars, cloth-ing brands, etc.

What has changed with the arrival of the Internet era?

People have more information to find and choose from. That’s a good thing, though sometimes it can be a bit “frightening”. Just think about it: the excessive choice people face today has the potential of creating tension and hesitancy. Well, unless we find ways to help them in the process of content discovery and decision-making. Appropriate per-sonalization always adjusts to the context and to the actual user de-mand. It does not necessarily mean a small bubble of information.

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RECOMMENDATION SYSTEM'S METHODSWhat are they?Recommendation systems are used to filter vast amounts of information. They can be implemented on virtually any website. News sites, video sharing platforms, online fashion stores, dating sites, and classified sites can all benefit from recommendation systems.

These systems provide all of your visitors with personally relevant products, articles, videos or even match them with other users that are likely to be of interest. They do so by automatically analyzing activity (browsing, shopping, etc.) of each user. Then, based on this information and the behavior of similar users, the recommendation system shows products or content that matches the tastes of the visitor.

Prioritizing data to predict relevanceRecommendation solutions dominantly use two different approaches when pri-oritizing data to create relevant recommendations: content-based filtering and collaborative filtering. • Content-based filtering

The content-based filtering (CbF) approach matches metadata of content in a user’s history and in the content catalog. On a classified site, the title, description, category, sub-category, price and location of an uploaded ad, are all examples of content metadata. A basic CbF approach may be to recommend ads with the same category, price range, etc. that have been previously viewed by the visitor. More sophisticated approaches can take additional content metadata into consideration and apply a smart, user-dependent weighting on various metadata types to better match user preferences.

• Collaborative filtering Collaborative Filtering (CF) assumes that users, who agreed in the past, will also agree in the future. The visitor’s preference is measured using their activity or feedback while viewing content. There are various methods for handling different types of user feedback.

On classified sites, the most common user feedback items are the ad views and ad replies. This is implicit feedback on user preference. The system applies matrix factorization techniques that are able to handle a vast amount of data and compress it into easy-to-manage sizes for user and content modeling. CF models are usually more accurate than CbF ones and scale well in big data scenarios.

Hybrid approaches combine both CF and CbF methods to get the best of both worlds.

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Recommendation types

• Product-to-product recommendations

This type of recommendation displays products that are related to the items already selected or viewed. The recommended products can be similar (substituting), up-sell, cross-sell, accessories, replacement, purchased to-gether, or the next best to the reference product.

• Product-to-visitor recommendations

This recommendation logic is the most typical personalized solution. Products relevant to the given user are recommended, based on the history of the user.

• Visitor-to-product (“reverse”) recommendations

In this scenario, the goal is to identify the users who will be interested in a particular product. This can be used for direct marketing campaigns to promote products by email or social media. For example, one could send an email, or show an ad for the new James bond DVD directly to the people who have liked this particular movie.

• Popularity-based recommendations

This recommendation logic is usually applied as a baseline. It is a favored approach for new users, when no or very limited user history is available. The most popular products will be displayed until the system has learned enough about a user to create personal recommendations (this usually only requires the new user to make 2—3 clicks).

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ADDRESSING CHALLENGES OF CLASSIFIED SITESWe are well aware of the multitude of challenges classified sites face day by day. A recommender system can give the perfect helping hand in solving them. Though we are not trying to cover the topic in its entirety, we picked a few elements that we think are crucial in bringing your site to a whole new level.

DecReasing youR bounce RateCReating Relevant landing Pages and making use

of RefeRRing sites

Great! You managed to attract visitors to your site via a newsletter, a retargeting or a pre-targeting campaign. Now, when you create landing pages, the most important thing you need to keep in mind is this: “Will this make visitors stay on my site?”. Sadly, we have yet to crack the code for that, but while we’re still working on it, we won’t keep you hanging. Just read on to find out how you can keep shrinking your bounce rate.

organic search resultsUntil recently, Google provided publishers with search query data from organic search. This meant that when John Doe searched for “tomato seeds”, found your site in the organic result list and clicked on it, you could create a dynamic landing page based on the search query text that got John Doe to your site, in this case: tomato seeds.

It seems like with every change Google makes to their policy, we have less and less access to the organic search keywords. Today, Google doesn’t give out any keywords that drive visitors to your site. This is why creating dynamic landing pages is getting more and more difficult. [2]

Luckily, Google is often used as a shortcut to find something in a specific place. Let’s say John Doe has been looking at fixed gear bicycles on mybikes.com. The next time he wants to check out those bikes, he’ll search for “fixed gear mybikes.com”. Then he’ll pick the correct result and proceed to mybikes.com’s result page of his preferred bikes.

Even if we don’t know the actual keyword that brought John to the site, we can still personalize the category page where he lands based on his history.

tip: Although the era of dynamic landing pages may be passing, creating landing pages for your campaigns can still be worthy, depending on your goals (e.g. brand awareness). Optimizely is an amazing and affordable tool that will help you create and A/b test landing pages.

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google adWordsIn the section above we’ve shown how useful it would be to know the search terms that brought visitors to your site. With Google AdWords and some other advertising systems, you can obtain these keywords from the referral URL. You can then create a landing page for each search term.

However, if you advertise for (let’s say) 1,000 keywords, it would be a little time consuming to create a thousand individual landing pages for all the advertised search terms.

This is when a recommendation system comes in handy. With such a system, you don’t have to set up a landing page for each and every advertised keyword; the engine will do much of the job for you. It’s enough for you to create frames — like

“searching for cars” — and the recommendation engine will fill this frame with the appropriate car brand, logo, etc.

Referring sitesA referring site (in most cases, this is an affiliate site) is a site that links to your page, and is not a known email service or advertisement provider. It can be extremely useful to know the connection details between these websites. Why? Let us show you by using a few examples.

Let’s say John Doe has been looking at weather forecasts for Nottingham, and then visits a real estate site. This site could then welcome the new visitor with houses in Nottingham.

You can approximately determine your average visitor’s profile, based on your sales experience. If the most frequent visitor of Site A is male, in his mid 30s and educated; when you have a visitor coming to you from Site A, you can assume this visitor is a bit like the average visitor we have just described. based on this, you can recommend items based on their presumed interests.

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Or let’s just imagine someone gets to your classified site from a gadget blog. Even if this is her first visit to your site, you can give them recommendations based on the site she comes from, and show her ads of popular gadgets from your inventory.

The three examples above mostly show how you can give recommendations to first-time visitors. However, referring sites can be of great help for recurring visitors as well, since you can expand your visitor’s user profile.

For example, let’s take a recurring visitor who always searches for bMWs on your site, but one day comes from a Toyota site. From then on, will you keep advertising only bMWs to this person, or introduce some Toyota ads as well?

Though there are limitations, you can still maneuver your way through the ever-changing world of the internet (and especially Google) to make your landing pages so good that everyone who visits them will stay on your site for a long time. The options we’ve mentioned above can all be of great help in reaching this goal.

PRoDuct colD staRtWhen a neW ad is PuBlished

the definition of cold startThis term derives from cars. When it’s really cold, the engine has problems with starting up, but once it’s warm, it will run smoothly. With recommendation engines, the “cold start” simply means the circumstances are not yet the best for the engine to function optimally. Cold start on classifieds can occur with both visitors and products. In this section we are going to talk only about product cold start. For the visitor cold start, see the next chapter.

the basicsThe right target audience for an advertisement is best calculated by looking at the former visitors for the ad. According to the basic assumption of the collaborative filtering concept, if an ad was already popular with a certain group of people, then others that fit the group’s profile are likely to respond well to the ad.

However, each time a new ad is placed on your site, it goes through the cold start phase due to the lack of (valuable) user interactions. User actions are nonetheless incredibly important since these determine the future of both product-to-product and personalized, user-history-based recommendations.

If there aren’t enough valuable user actions for a certain ad to set the founda-tions for accurate recommendations, the engine will not know when to display this particular ad. So, we could say, that the more interaction an ad has col-lected, the easier it is for the recommendation system to qualify and target.

News sites, auction sites and classified sites all experience the product cold start. Here, the most recent articles or products are the most interesting ones.

Classified sites often list products based on the date of the post: the newest first. Though there are ads (e.g. ads from babysitters) on classified sites which can be relevant for a longer period of time, in general, the longer a product has been on the site, the less relevant it is. This is simply because old product listings are more likely to be already sold. Just like a weather forecast site, no one would be interested in reading the forecast from three weeks ago.

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the problemRecommendation engines that run on collaborative filtering, recommend each item (products advertised on your site) based on user actions. The more user actions an item has, the easier it is to tell which user would be interested in it and what other items are similar to it. As time progresses, the system will be able to give more and more accurate recommendations.

This, however, brings a major contradiction and difficulty to classified sites and their recommendation engines. Even though the newest ads are actually the most relevant ones, a recommendation system has far less confidence in recommending them to your users than it has with older items. but it’s just simply not a good idea to let older ads dominate the recommendation process.

the solutionContent-based filtering is the method that answers this question. Our system first uses the metadata of new products when creating recommendations, while visitor action is secondary for a certain period of time. Also, we can identify visitors who are only there to browse and those determined visitors who know what they are looking for. For example, if someone clicks on everything from phone cases to real estate within a short period of time, the system will assume she is only there for browsing and won’t use her click history for recommendations.

When it comes to investigating the cold start phenomenon, this is only the tip of the iceberg. Every recommendation solution has a different method to cope with it, and after getting over the rough cold start, the real work of the engine begins.

VisitoR colD staRtthe Beginning of a Beautiful fRiendshiP

In the previous section we described what a cold start is and how it occurs with new products on a classified site. Now we shall continue with the cold start of visitors.

User or visitor cold start simply means that a recommendation engine meets a new visitor for the first time. because there is no user history about her, the system doesn’t know the personal preferences of the user. Getting to know your visitors is crucial in creating a great user experience for them.

identifying visitorsVisitors to your site will probably not register upon their very first arrival. It’s actually rather understandable, given the fact that most internet users have already signed up for numerous sites and don’t fancy the idea of going through yet another registration process just to have a look around.What’s more, classified ad sites usually don’t require visitors to be logged in. Your visitors don’t even need to have an account to contact the advertiser and then buy the advertised good. So, your users need to be identified by cookies.

If visitors delete or block cookies, they will be identified as a brand new user each time they visit their favorite classified ads site. The classified site should try to give these users specific identifiers, like unique user IDs. If this cannot be solved, everything the recommendation engine learns about these users will be lost as soon as they leave the site.

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However, product-to-product recommendations will persist in any case, whether your users block cookies or not.

a never-ending storyWhile it’s true that cold start mostly affects new visitors, we must not forget that a similar phenomenon can easily happen with returning users. We shall illustrate what we mean with the help of the following example. Robert is looking for desks on your site. He’ll be interested in ads for desks for around a week, but after he finds the right one, he will move on. When he visits again in a month, he may be looking for lawn mowers.

So the cold start problem exists all the time, as Robert (and any of your users) will always be interested in new and different things. At the start of each visit, the recommendation system does not know whether the user arrived with new ideas or if she is still looking for the earlier items. This is why it is important for the recommendation system to identify the user’s actual, active interest after the first few clicks.

Also note that certain topics of interest are more persistent than others. For example, collectibles (stamps, memorabilia, coins, books, etc.) exhibit a rather long interest span, compared to typical consumer goods like desks or lawn mowers. multiple devicesEven if users allow cookies in their browser, they can still experience the cold start. This can happen, for example, when they use someone else’s computer to browse, or simply if they have multiple devices. Classified sites cannot link their user history from their different devices if they don’t have an account.

the solutionRecommendation systems have an efficient solution for the visitor cold start problem. below are the most important types of information that help minimize or eliminate the cold start phase. With the exception of behavioral information, all of this data can be obtained from both new visitors and returning users.by default, the very first step is to apply a popularity based strategy. Trending products can be determined by global trends and what’s been popular recently, regionally, or at that certain time of the day.

Then as a next step, you can narrow the selection of ads you display for visitors by making use of contextual information:

• Geolocating users with either their geoIP or their mobile device’s GPS co-ordinates.

• Knowing the referrer (which site the visitor came from), the device (mobile, desktop), the operating system (iOS, Windows, Android) and the browser type (Chrome, IE, Safari, etc) will help with personalizing the ads you display.

behavioral information “kicks in” after only 2—3 clicks during the user’s very first visit. This is very important to uncover the user’s actual, active interest.

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MobilityadaPting to a smalleR sCReen

It comes as no wonder that now, with smartphones and tablets hiding in the pockets or bags of almost everyone, the number of people visiting classified sites from these handheld devices is anything but negligible.

We are aware of a few classified sites where traffic coming from mobile devices reaches over 50%. In this section, we shall cover the main challenges and solutions of “upgrading” a classified site to suit the needs of visitors who stop by from their smartphones.

the missing link — identifying the same visitor on different devicesA real puzzle in this field is connecting multiple devices that belong to one customer. If a user browses regularly both on her desktop and mobile, and sign-in information does not connect the devices, your site will automatically treat her as two different users.

Here’s what you can do about it:

Go through your site’s statistics to find out when visitors use their mobile devices most to browse, and then send out your emails during these periods. Make sure these emails contain relevant (thus engaging) offers or incentives: either a selection of ads similar to what they have recently looked at or even just a regular newsletter type of message with trending items.

All these pieces of content should be equipped with unique links containing user identification information. When a person opens the email on a handheld device and clicks on any of these links, you can finally merge her identities from two (or more) separate devices.

size mattersCompare the size of a desktop screen to a smartphone screen. For a classified site, acknowledging the difference between these is vital. Since you can display more items on a desktop device, users will distinguish relevant items at ease. but when your visitors use their smartphones, you’re limited to showing only a handful of items at once. Having a reliable recommendation system is key in leaping over these hurdles, by providing relevant content for each screen size. Otherwise, if a user is not impressed by the results she finds, she will simply leave your site.Another problem that the size of the screen brings, is that it’s significantly less comfortable and slower to type on your phone than on a regular keyboard. So you’ll do your users a massive favor by minimizing the amount they have to type. For example, autocomplete is a great method to ease the discovery process.

Inspire both new and returning visitors by welcoming them with some deals right when they enter your site. Providing such an inspiration can lead to a multitude of benefits. For new visitors, it can have an engaging effect right away. In case of returning visitors, they won’t have to search that much. Although this welcoming deal is also relevant on desktops, the results it brings on mobile phones are far more dramatic.

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Let’s imagine that a visitor searched for “Nike” on your site. The typical search result list will include everything from shoes to hats, to various sporting equipments. However, when your user clicks specifically on shoes a couple of times, you can assume she’s looking for new footwear.

If every time she returns to the results page only to find piles of items that are irrelevant to her (pants, hoodies, bags, etc) she might lose interest in scrolling through all the unwanted results for “Nike”. So, pay attention, and customize the search results page as soon as you have an idea of what your user is looking for.

ContextWhen determining the logic of recommendations, you should always consider the context in which they’ll appear. To give you a better understanding, let’s look at two different (non-classified site related) cases of looking for a restaurant.

• A planned restaurant visit

Anna is planning her trip to London. She’s browsing through the pages of Tripadvisor when she decides that she wants to try the best fish & chips you can get in the city. In this case, it is the quality of the fish & chips in the restaurant that will matter more than the location or the price range, etc.

• An impulsive restaurant visit

beth has 30 minutes to have lunch before going back to work. She’s in the mood for Italian cuisine, so she’ll look up nearby restaurants on Foursquare. Now, to a certain extent, the quality of the place will matter slightly less than its location.

Here are a few examples that highlight these situations in a classified site context:

• On her 30 minute commute to the office, on a subway, the customer browses offers on her Android OS smartphone.

• She visits your site for a few minutes from her laptop, while she’s in the office.

• After being referred from a fashion site, the customer starts window-shopping on her iPad at 11pm, just before going to sleep.

• Walking on the street on a Saturday, the customer appears to be close to a seller whose product seems interesting to her.

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All-in-all, the device, its operating system, the location and the time (hour, day, week, seasons, holidays, etc.) are crucial to:

• Assess the aim of the visit (searching vs. window shopping)• Predict the length of time that will be spent on the site• Provide relevant recommendations accordingly.

Page views and conversionsMobile field studies have shown that smartphone users view 23—30% fewer pages than those browsing on a desktop, and the conversion rate on mobile is much lower than on the computer. So how can you counteract this trend? by always providing a “next step”. It’s better to have your users click from ad to ad than making them return to the results page again and again. Product-similarity-based (product-to-product) recommendations are even more important on mobile devices than they are on desktop. They minimize the required navigation while keeping your visitors engaged. This way you can always provide a next step for your users without them having to return to the results page.

The more ad views you can generate, and the higher personal relevance these ads have, the higher conversion rate you can expect. And the higher the number of quality conversions, the better chance you have to see these visitors returning to your site.

Posting adsA growing percentage of users only ever access classified sites from their mobile phones. You can help them post their ads with a wide variety of options. Let us give you a few examples.

As we’ve mentioned already, the size of the mobile screen and the inconvenience with typing on a phone makes users sensitive to how much information they have to manually provide about the goods they wish to advertise. Sellers usually do a bit of research before posting an advertisement to find out for how much

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they could sell their goods or services. If you encounter a “mobile-only” visitor, her research process will be slow, and rather ineffective.

First, just ask your user about what exactly she wants to advertise. If she wants to sell a pair of shoes, show her a couple of well-converting ads, so she could have an idea of what photo she should take. A good photo is very important in creating a successful ad, so giving users a helping hand in this field is incredibly useful.

Though it may sound a little far-fetched just now, an incredible amount of information can be obtained from similar pictures and their titles: category, brand, color, condition, price range, etc. You can automatically provide some of this information on the ad fill-in form (immediately after the seller typed in the headline of the ad) to show your seller some tips about what could make her ad a well-converting, successful one.

With all this data available, your sellers will only have to change and type anything if the “harvested” attributes aren’t relevant for their case.

Using an image recognizer application in the process is a ‘nice-to-have’ next step. Immediately after uploading their photos, you could tell your sellers whether they can expect a high CTR on their ads compared to other photos in the category or not.

geolocationIf you know where your user is located, you can recommend them ads accordingly. To give a clear picture, here are a few examples:

• Let’s say your visitor has spent several visits looking for cars recently. If she happens to be close to a seller whose car ad she has already looked at, you can send her a push notification about it, along with the contact info of the seller. She might just make a detour to check out that certain car.

• Understandably, many private sellers are afraid of giving away their full address. Instead, you could ask them to select nearby public places (well-known streets or buildings, parks, museums, shops, restaurants, etc). This will keep their address safe, but nearby inquirers will still have a chance to check out their stuff for sale.

• You could show a selection of products being sold in the neighboring areas of your visitor’s home, workplace, or any other frequently visited places.

• Let’s take a look at dating site apps. Imagine two users sitting on a bus one day, when they both get a notification from the dating app they use, saying: “Your potential future partner is on the same route. Would you like to say hi?” If they both approve, you could send them photos to help them find each other and provide them with a little chat window so they can arrange a meetup in the next bus stop, etc.

• Anna organized a little meet-up with one of her friends. Sadly, her friend is stuck in a traffic jam, so she’ll be an hour late, but Anna is already there. Anna could now just open her favorite classified site and have a look at what products are sold nearby.

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Despite the incredible developments they have gone through, mobile devices still have a lot more to offer. Classified sites can put the potential of handheld gadgets to good use, as you could see in the many ideas and examples we listed above. Though we’ve only covered a fraction of all the possibilities, we are sure that the combination of classified sites, handheld devices, and personalization can result in extremely useful products for both providers and users.

excessiVe choicetoo many oPtions Can leave youR CustomeRs unsatisfied

The possibility of online shopping caused an unimaginable growth in the number and variety of products to which we have access. Amazon, ebay and all the other pioneers of the industry brought a new world, in which we can safely purchase basically anything our heart desires. From the comfort of our own home, we can buy goods from across the globe, with just a tap of a finger. but the range of goods we see in our local supermarkets, boutiques and other shops has also experienced an undeniable increase in the recent decades. All these changes has given us the possibility of choosing what we really want. but, according to the ”When Choice is Demotivating” [3] study, this abundant choice causes frustration on a regular basis. Too many options make us less likely to actually choose anything.

Paradox of choicebarry Schwartz, an acclaimed psychologist, wrote a book about the paradox of choice and in 2005 he presented his hypotheses at a TED conference.

He believes that the ever-growing number of choices we are provided on a daily basis doesn’t help, but in fact paralyzes us. His own experience of purchasing a new pair of jeans illustrates his theory very well. When he was young, “jeans only came in one flavor”. He wanted to replace his old pair of jeans, and was astonished by all the different kinds of jeans the store had to offer. Schwartz says he bought the best-fitting jeans he ever had, but still, he felt bad. Let us use his own words to describe why:

“ ... I had no particular expectations when jeans only came in one flavor. When they came in 100 flavors, damn it, one of them should've been perfect. And what I got was good, but it wasn't perfect. And so I com-pared what I got to what I expected, and what I got was disappointing in comparison to what I expected. Adding options to people's lives can't help but increase the expectations people have about how good those options will be. And what that's going to produce is less satisfaction with results, even when they're good results.”

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People have both stood up for, and opposed barry Schwartz’s approach. The paradox of choice itself has also received acclaim as well as criticism.

However, we can’t deny he has a valid point when he says the decisions we have to make daily have increased drastically in the recent decades. Just think about the TV: all the channels you can choose from and all their different programs provide you with a tremendous amount of options. (We discussed the topic of the changes the television has gone through in our former blog post.) While there’s no question that everyone experiences the glut from time to time (too many jeans, jams, or TV channels to choose from), we simply can’t agree that it could cause a major, paralyzing frustration all of the time.

Seeing the inconvenience excessive choice brings to our lives, we think that recommendation engines can effectively ease the headache your visitors get from encountering the incredible amount of products you have in your inventory. In the next section we will discuss how these engines are able to help.

the golden mean“Researchers presented an array of tasty jams and enticed shoppers to buy a jar. In one version, there were 6 varieties shown to shoppers. In another, there were 24 jams. The second, larger array attracted more traffic. but the smaller array led to ten times more purchases.” [4]

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The experiment mentioned above shows a situation that many visitors face when they browse through your classified site. A recommendation engine will help you by choosing a small set of products that a given user will most likely be interested in, even if the pool of products available on your site is incredibly large. In other words, a recommendation engine can choose the 6 jams out of the 24 that will suit your visitor’s taste best.

This results in two highly valuable benefits:

• Your visitor will not be bombarded with overwhelming options, and therefore the probability of her replying to the ads will increase.

• Personalizing the “6 jams” will further increase the likelihood of your visitor’s

ad-reply. If your visitor only likes strawberry jam, the recommendation engine will keep it in mind, and will only show products that are relevant to her taste.

• A recommendation engine is a great tool for determining whether a visitor is a searcher (knows exactly what she’s looking for), a window shopper (has an idea of what she’s looking for) or a shopaholic (doesn’t know what she’s looking for).

It’s important to add that these three types of visitors each require a different selection of recommended products. It’s worth showing your whole range of jams to a shopaholic to draw her attention. but, if you know that a searcher is only looking for strawberry jams, you can personalize the selection of products she sees. Since a recommendation engine knows your customers and what they want to see, it can be the perfect tool for finding the golden mean — narrowing down

choices but still providing plenty of possibilities.

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the long tail enhanCing the diveRsity of offeRs, giving the ChanCe to all selleRs to sell theiR niChe items

Niche marketing, and the way it is implemented on the Internet, is often described as the “Long Tail” [5]. Traditionally, stores could only afford to stock the most popular records, books, movies, etc. They needed enough people in the area to buy their goods in order to cover their expenses. However, the Internet changed this, as it allows people to find little-known items as well. Amazon can sell bizarre books, Netflix can rent unusual movies, and iTunes can sell strange songs. That's all possible since the Internet has taken location out of the equation.

no country for short headFirst things first: there is no short head on classified sites. We’ve briefly explained the opposite of long tail just above, when stores only stock up on a few, but very sought-after products (DVDs, books, etc). On a classified site, however, even

“popular” goods are the part of the long tail. Let us explain why.

Imagine this: Daniel is a frequent user of your site. He’s a university student and an avid fan of the Rolling Stones. He really wanted to see them play live in his city, but sadly won’t be able to attend the concert due to a very important exam the following day. So he decided to sell his ticket on your site.

We can agree that as the date of the concert approaches, tickets for the Rolling Stones show will be more and more popular. Despite offering a trending product, to be considered a “short head seller” Daniel would have to sell several hundreds of tickets, but he only has one.

This example is merely to show that average sellers of classified sites (not company sellers) are simply “made for” the long tail.

“uncommon” productsFinding what they are looking for can be quite tricky for classified sites visitors, as the number and the variety of products available tend to be incredibly large. Personalization can be the key in synchronizing the demand with the supply. Let us illustrate the benefits it brings through an example.

Jim has a couple of needles designed specifically for bookbinding, and he has decided to sell these needles on your site. Tanya recently took up the hobby of binding her own notebooks for school, but found that none of her needles at home are good enough for the process. She has previously searched for bookbinding threads, papers, and some other arts & crafts tools on your site, so you already know that she’s into such things. In general, Jim’s bookbinding needles have a very low demand, but among people like Tanya, they will be more relevant and more popular.

So, it’s plain to see that even the rarest products have a demand.

gallerySites that offer a place in their gallery as a value-added service, tend to just rotate all the ads that have been promoted by their sellers. The biggest issue with this is that these promotions do not affect all products in the same way.Let’s say a site asks $10 in exchange for 1,000 appearances in the gallery. xbox 360s are quite popular on this site, and if someone advertises this console and

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pays for the 1,000 appearances in the gallery, she will get much better value for her 10 bucks than someone with a less common item.

Why? because, if a popular product is being shown to 1,000 random people, the probability that someone clicks and connects the seller is obviously high. Low-de-mand items, on the other hand, will understandably have a lower click-through rate.

If your site doesn’t have personalization tools, Jim, the guy selling bookbinding needles, will probably be quite unlucky with this value-added service. Very few people would click and in the end his ad would not convert well. This leaves Jim’s $10 going to waste and his perfect bookbinding needles unused.

Recommendation engines to the rescuebut you wouldn’t want to leave Jim unsatisfied, would you? Invest in a recommen-dation engine that will personalize every last bit of your site.

Let’s stick with the example of the gallery as a value-added service. Remember Tanya, her new hobby, and her demand for great bookbinding needles? Well, there is a little group of people on your site that do exactly the same activity in their spare time as her. They would all, surely be interested in Jim’s needles. What if Jim’s ad only appeared in the gallery for them? Jim’s 10 bucks would be put to good use, his ad would convert much better and every enthusiastic bookbinder on your site would be happy to purchase his perfect needles.

This example is merely to show how personalization can provide equal benefits to advertisers of high-demand and those selling low-demand products. A recommen-dation engine will make sure that all of the ads — no matter where they are dis-played - will be shown to the best possible audience, who will most likely purchase.

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don’t bring a gun to a knife-fightOne last thing we would like to mention is the importance of not going overboard. Though it’s true that the more personalized the content, the better the user experience, it’s no use to only ever display personalized recommendations. Spare a little room for the most popular or a random selection of category ads as well. Let your users explore different products — they might just find their next favorite thing.

tuRning a DeaD-enD into a highwaymoving on fRom Potential exit Pages

If there is nothing left for visitors to do on your classifieds site, they will simply leave.However, there are countless ways to extend the time users spend on your website and we are here to share a few ideas with you.

being a team that specializes in boosting user experience to the fullest, our mantra is “always place personalized content on each and every page”. Why? It’s simple: visitors who see a selection of personally recommended items on a site will spend more time there than they would without these suggestions. What’s more, a growing percentage of people expect a site to offer them personalized content. [6] In this section we are going to list the most common exit points for visitors and the solutions we created for each scenario. Since we believe the best (and in some cases, the only) answer is personalization, our examples will be based on what you can do and achieve with a recommendation engine.

after replying to an adAfter replying to an ad, your users may leave the site right away and wait for the seller’s answer. Though they might feel like their job is done, you can still keep them engaged, even at this point. You can show ads that are similar to what the visitor just replied to or maybe show ads of items your guest previously searched for.

Replying to an ad on a classified site doesn’t automatically mean that the user is going to successfully purchase the item. Some people will contact multiple sellers to make sure they get what they want. If you show them a selection of similar goods, you’ll ease the process for the visitor.

On the other hand, your user might only want to contact one seller at a time. A recommendation engine can provide a solution to this by looking at user history. Instead of bombarding users with similar content only, you can also show them everything else they might be interested in, based on their previous user actions.

You could also send them an email with these ads a couple of hours (or even a day) later, while they are waiting for the seller’s reply.

the zero results pageHere, base your recommendations on fragments of the keywords. If someone searched for “unused inflatable beach mattress” and got no results, gradually decrease the number of her search terms until there is at least one ad that

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matches the criteria. Perhaps a seller forgot to add “inflatable” to the tags, but has just the right beach mattress for the said user.

Typing errors can often happen. When tuned well, recommendation solutions can (to a certain extent) handle typos. Imagine a user looking for a Chevrolet but accidentally typing “Checrolet”. Spare her a little time, save her the unnecessary step of looking for her own typing mistake, and show her the Chevrolets.

If the provided keywords don’t even make sense, place items on this page similar to the ones that the user has previously looked at.

You can also overlook certain search filters that the user has set up. To give an example, let’s say Anna, a frequent user of your site, only ever wants to see ads from her city. When she receives zero results on one of her queries, you could simply show her ads that are literally the closest to her (from neighboring cities or counties).

the results pageIn most cases, results are listed with the newest ads first instead of the most relevant ones. This can eventually drive visitors away from the site, since, if after a certain amount of scrolling they haven’t found anything that they’d like, they will just leave.

It’s important to show users what they really want to see. A recommendation engine definitely comes in handy when tailoring results for each guest. However, simply giving users the chance to choose between having results listed according to their date or their personal relevance could help a lot, too. A mixture of the two approaches (‘Latest and Greatest’) is also a great method.

expired ads, 404 errorsAds that no longer exist or redirect to an error page can still be put to good use, by placing personalized content on them. Product-to-product recommenda-tions would be the best to use here, as these are relevant to what the user has been looking for.

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ad placement confirmation pageJust after a seller has confirmed her own ad, you could display similar ads. This will show her the competition she’s up against. The ad placement confirmation page is also a great place to introduce your value-added services. They could spark a little light in your user’s head, reminding her that by spending just a small amount of money, her ad could stand out from the rest. This little light may eventually fade out, but could be just enough to motivate her purchase of one of your value-added services. (Check out our blog to find out how to motivate users to sign up for these services.)

We have only covered a fraction of all the different steps you can take towards a more user-friendly site. Implementing recommendations on all of the pages we have mentioned above could understandably be considered as going overboard, but we ask you to think twice. If you had such a powerful and effective tool on your hands like a well-built recommendation engine, wouldn’t you want to use it everywhere you can? We sure hope you would.

acquiRing anD Retaining selleRshoW to Build an aPPealing maRketPlaCe

Sellers are the ones who expand the number and variety of products found in your site’s inventory. Since large quantities of different products attract a huge number of visitors, acquiring and retaining sellers is vital for the growth of a classified site.Despite being one of the trickiest challenges that classified sites face, you don’t have to despair trying to solve this puzzle. Just read on, and let us guide you through it!

acquiring sellersThe most valuable turning point in the lifecycle of a classified site visitor comes when she places her very first ad after returning to the site multiple times and replying to various ads (and probably purchasing the advertised products). Though you can’t force someone to sell their belongings, there are a few things you can do to turn even the slightest idea of advertising into actions (and actually place and ad on your site). Here we would like to introduce just a few of these.

1. trustSellers will advertise their stuff on your site if they trust you. Each user is different so creating an invincible plan for building trust is anything but easy. but keep your head up, if you follow our lead, you can have the most loyal users in no time.

You can achieve a lot by simply being clear. It’s important to let your users know exactly how your site works. Explain everything from how to contact sellers, to why it’s worth signing up for a value-added service. All this information can and will be useful to your visitors. Your site should be easy to use for nearly computer-illiterate users as well.If your users know how your site works, they won’t be afraid of getting lost on it, and will be ready to sell their items on your site.

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2. the easier the betterJust be easy to understand and easy to use. If posting an ad on a classified site is as difficult as performing a brain surgery with your hands behind your back, you wouldn’t even try to advertise there, would you? So just make sure that the process is easy and, more importantly, that your users are perfectly aware of it.

Just think about mobile devices for a second. As we’ve discussed it in a pre-vious chapter (Mobility), many people visit classified sites from their smart-phones or tablets. However, typing, searching, scrolling and browsing is just not as easy as it is on a desktop, (just think about the lack of a regular sized keyboard for these gadgets, or the much smaller screens). With tools that help your visitors type less and make navigation much smoother, you will improve the user experience. To read examples for such tools and applications, see the Mobility chapter.

3. trending productsAn efficient method for converting buyers into first-time sellers is to display trending items on your site. You can also notify them by email or in a pop-up window. In this case, "buyer" doesn’t necessarily mean someone who successfully purchased, but instead is a visitor who sent at least one ad reply and left an email address. Informing these users about trending items can motivate them to sell similar items as well. For example, if sewing machines become a trending product on your site, you could inform your user about it - maybe she has a perfectly functioning sewing machine hiding in the attic, ready to be sold.

Or, to give you a real-life example, remember when Flappy bird was removed from the iTunes App Store? Used iPhones with Flappy bird installed started popping up for sale on various sites - some reaching almost $100,000. Un-derstandably, everyone wanted to jump onboard this train and phones ap-peared with prices ranging from $300 to a few thousand dollars. [7]

Keeping the above mentioned examples in mind, it’s plain to see that determining trending products is a task you simply can’t skip. To do so, just consider:

• which categories generate higher number of ad replies, • which categories generate higher number of ad views, • popular search terms,• saved searches.

Also, keep an eye out for other trending products in different regions and at different times.Another way to determine popular items is by taking a look at how often ads change within a category. Ads for mobile phones usually just come and go, while ads for real estate or cars tend to stay on the site longer. However, some categories may be less clear, and some sort of a tracking tool will provide great help with this.

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4. Money, money, moneyIt can easily happen that your users have already toyed with the idea of submitting an ad on your site. However, they might be a little intimidated by paying for your services without any experience. So, why not offer a little extra for these users to push them towards becoming a first-time seller?For example, you could give discounts on the first ad-placement or offer your value-added services at a reduced price or even for free.

Such discounts could be given to all visitors who show a certain level of interest in your site, people who seem to be potential long-time users (and perhaps sellers as well). To determine if the visitor reaches a sufficient level of interest, we suggest tracking your visitor’s user actions from the very first time she enters your site. If she browses and searches on your site, looks at a few ads and leaves at least a couple of ad replies (during a single or throughout multiple visits), then she’s probably interested enough in your site to eventually become a seller there. So, grab her attention by informing her about your special offer to place her very first ad for free.

If your site asks users for their email addresses when placing ad replies, you can send your potential seller an email and tell her about your discounts. However, if you don’t have email addresses to fall back on, placing banners or showing popup windows to a user will do the trick as well.What we can help with, is setting and tracking the desired level of activity. Then, when a user meets the criteria, she will automatically be informed about your offer.

Retaining sellersRetention costs less than acquisition, yet most businesses tend to neglect looking after their existing clients and instead, focus more on getting brand new customers over and over again. Recently, however, businesses everywhere have started to realize that it’s actually more than a great idea to invest in retention. We welcome this paradigm shift and are ready to tackle all the challenges it brings.

1. the long runA bulletproof method for ensuring your user’s long-term connection to your site is a loyalty-program. Just show her that the longer she is with your site, the better it is for her. To do so, grant her discounts, free value-added services, free ad-placements, etc. These can be offered after certain milestones, such as posting 5, 10, 20, 50, etc. ads on your site, or receiving 50, 200, 500 ad-replies. These, obviously, only apply to regular, non-company sellers.If being a long-term seller on your site is worth it for your users, you will barely have any trouble keeping them.

2. emailEmail, when done right, is an effective marketing tool. There are virtually countless ways to tailor emails to suit every situation, every customer, every product, etc. below we will describe two personalized components to introduce to your emails. They will surely help keep your seller’s attention.

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• Run real-time analysis for each seller to see what other users sold together with ads similar to the one the seller has just placed. Place a recommendation box with the title “See what other people have sold already”, as it's simple and easy to understand. Its content should be tailored to each ad the seller placed, providing further ideas about what other products could be sold.

• The email can be further enriched with nformation about trending ads and categories that people have been looking at recently. This will draw the seller's attention to the actual high demand for those kinds of products. Give encouragement, stating that now is the time for placing ads in those categories.In the seller acquisition section we’ve already talked about trending products and how to determine them.

As you can see on the image above, the biggest benefits of having regular, long-term sellers are the minimal costs spent on retaining them and the revenues coming from their ad submission fees and purchased value-added services.All in all, buyers and sellers are far more likely to return to your site if they’re satisfied. So, it’s important to invest in tailoring your site to their needs. The investment will repay itself using one of the most promising monetization techniques: value-added services.

Value-aDDeD seRViceshoW to motivate youR selleRs to sign uP foR them

Monetizing is one of the toughest challenges classified sites face. Value-added services are a great way to grow your revenues, but motivating users to sign up for them can be tricky.

Popular value-added services include:• Featuring the ad for a certain amount of time in a highlighted section of the

site (usually referred to as a “gallery”).• boosting ads to the top of the search results or listings.• Highlighting the ad by using labels such as “urgent”, ”from the owner”, etc.

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• Offering packages and branded microsites for professional sellers and offices (e.g. realtors, car dealers, etc.).

• Providing specific industry insights and ad/listing data such as reports of views, clicks and leads.

In this section we will illustrate what you can do to encourage your users to purchase additional services.

mini Business intelligence (miniBi)One of the best ways to motivate your users to purchase your value-added services is to show them how much better their ads would perform when using those features. This is when our concept of “minibI” starts to shine. This is an application that will do all it can to gently push your users towards additional services. There are three main “responsibilities” of the minibI:

1. information about competing adsShowing a seller similar ads will convince her there is indeed a high level of competition between her and other sellers. She will probably not want to be left behind, so she’ll do a little more to catch the potential customers. If you’re there to help her out with your value-added services, she probably won’t hesitate to purchase the extra service.

2. show a visual chart of the change in views of the seller’s adYou have to keep in mind, there are always some sellers who blame the site if their ads convert poorly. A visual proof, however, can assure your users that their ads are actually being shown to people. Complement the chart with a prediction of how the numbers will change in the near future if everything stays as is. If they are not satisfied with the numbers they see, they can easily

purchase one or more of your value-added services to change it.

3. ad-specific Roi metricsThe visual chart mentioned above could be further enriched with ad-specific ROI metrics; a prognosis on how many more ad views the seller can expect upon subscribing to any of the value-added service options. This allows for a quick cost-benefit analysis at a glance. The prognosis is calculated in real-time and is based on historical data about changes in ad views before and

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after a value-added service option was purchased with similar ads.

Quality assessmentIn one way or another, each ad is different - and so is their quality. In order to help sellers sell more, the site can assess the quality of their ads, before and after the ad placement. We suggest taking two main approaches: the seller quality and the ad quality assessment.

If you can provide feedback to your sellers about the actual ad quality score before they post their ads, you can motivate them to further polish those ads before submission. This, in turn, could also result in a higher placement among recommendations.

Another interesting use case of such ad quality assessment is to create a pool of good quality ads that appear on the Main Page as inspirations. This will keep visitors interested and lure them to the listing page and/or an ad detail page. It also helps reduce bounce rate.

Of course, you can periodically recalculate the quality scores based on visitor activities around ads and their sellers.

You could reward sellers, who have created ads of high quality, with some of your value-added services:

• You could give them a few percent off their purchase of a service.• Give them even more visibility as a bonus.• Keep their ad running for longer.

This way, you can let them know that their ad is doing great, and at the same time introduce them to the value-added service options available.

triggered messagesNotify your users about how their ad is performing, and not only with on-site alerts. but when should you inform them? For example, you could tell them when their ad reaches fewer views than the average of similar ads from that certain category. The message could be in a popup window, in an email, as a form of retargeting, or — if you’ve got an app — send a push notification to their phone.

As an example, a popup window can provide high-level information about the actual performance of seller’s ads, e.g. the “ad views” visual chart described above (in the Mini business Intelligence paragraph), with a performance status bar and one or two further KPIs. by clicking on this popup window, the seller is directed to a detailed performance report page.

How do you know who should receive the popup window and what its content should be, without the seller logging-in to your classified site? A recommendation system can link cookieIDs and sellers even if they are not logged-in.

gallery service upgradesIt’s important to not only get those premium users, but also to continuously make them feel special. They need to know you really appreciate their investment into your site and you treat them as your closest partners.

The most basic persuading factor to assure sellers that their investment into

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a gallery was worth it, is that their ads will appear to the most relevant buyers. Assuming that there are dozens, maybe even hundreds of such ads waiting in line to appear in this gallery box, the selection of the actually displayed one should be based on personal relevance to each individual visitor. This way, a seller’s ad will be shown to visitors whose browsing behavior indicates a high potential interest in the specific ad. The result: more clicks on gallery ads (higher CTR) and more quality leads for sellers, thus making their investment into the gallery service even more profitable.

Another good example is a combination of personalization and premium services, within recommendation boxes, for an additional fee for those who already purchased an appearance in the gallery.

For example, you dedicate parts of an ad detail page recommendation box to those who are willing to pay an extra fee to be included among the personalized recommendations. If you have 4 ads displayed at once, the 4th one could be reserved to these premium sellers’ products. You still select the 4th ad based on a personalized logic, following the individual visitor’s interest, but this one would be chosen from the pool of premium sellers’ ads.

ConclusionIt’s a no-brainer that if a user has already paid for one of your value-added services, and was happy with it, they will probably purchase it the next time they advertise something as well.So, a way to motivate your users to pay for these services is by making them feel like the value-added services are well worth the price. If they see how the CTR of their ads is boosted and they have a great amount of ad replies they will most certainly feel that it was a good decision and will probably do it again.

loyalty anD RetentionCReating and maintaining CustomeR loyalty on

a Classified site

Whatever techniques you implement on your classified site, at the end of the day, they all have the same goal: to keep your customers satisfied while maximizing revenues.However, many companies tend to neglect returning clients that have already been acquired. According to a survey conducted in 2013, companies are more focused on acquisition than retention. 44% of companies concentrate on acquisition, while only 16% of firms look at retention. Eventually, as the reach of those businesses widen, there will be vast amounts of unhappy clients. The result is a loss of market share.

It’s an often cited golden rule that it costs approximately 6–7 times more to acquire a new customer than retain an existing one.

The results of having a strategy to retain existing customers:

• Reduction of churn.• Lower acquisition costs because of self-acting referrals and free word of mouth.• better customer experience.

All in all, if efforts for retention are well organized, you can get closer to the

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ideal world of loyal customers.Let’s focus on classified sites. Where are the opportunities for your business to retain current customers?

the split personalities of visitorsWhen building loyalty, you should first take a look at the various intentions of your visitors. bear in mind that even the same person’s goals can change from one visit to another.

We can identify 3 general types of visitors on a classified site:

• searcher: Someone hunting for a good deal. They are trying to satisfy a specific need and they are willing to contact sellers. On one of our client’s data, 40% of visitors are “searchers”.

• window shopper: Someone who has an idea of what they want but isn’t bothered about making a purchase yet as it’s not the right time to spend money. On the aforementioned classified site, 35% of visitors belong to this type.

• shopaholic or Random user: Someone who is not sure of what they are looking for. They shape and finalize their desires while visiting your site and checking the supply. She may be open to buying something right away, or she just be killing spare time by browsing. These visitors make up 25% of the traffic on the mentioned classified site.

Okay, so you got the idea of people visiting for different purposes. but how can you handle the fact that for each visitor, these roles are constantly changing? You will need a user tracking tool that identifies these needs and responds in real-time, as the visit is taking place. That way you can avoid mistreating Jane Doe, who acted as a “searcher” last time, but now is just window-shopping. You can read more about how to handle these dynamic roles in one of our articles.

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how loyal are your visitors?When measuring loyalty, each classified site has its own KPIs and methods. Here, we list the most common measures that we have experienced.

• ad Reply / ad View rate: This is a favorite of many classified businesses to de-cide if the displayed ads are suitable for their visitors’ needs. Although it is a rea-sonable metric to review, this ratio alone may not be adequate. Why is that so?

First of all, as your site grows, it will be visited by a lot of window shoppers. These people view ads without sending any ad replies. They do not have a serious intention to buy, but like to spend their time daydreaming and checking the actual supply.

Also, it is quite unlikely that searchers with defined goals will reply to all the interesting ads they see – instead, they will choose to contact only a few sellers.

Overall, this measurement may be good for an established classified site, but not for an emerging, growing classified provider.

• number of ad Replies: It can be helpful to measure the aggregated number of ad replies on the site, and also the number of ad replies sent to a specific ad.

However, you need to be careful with the interpretation of these numbers. The aggregated number of ad replies depends not only on how well an ad or product is converting, but also on the lifecycle of your site and how many people are aware of your business.

Also, the vast numbers of ad replies on an ad might mean that there is some problem with either the seller or the product. It is important to add, though, that there are some special ad categories like jobs, where the high number of ad replies indicate higher ad quality rather than suspicious content or lazy seller.

• Visitor frequency (number of unique visits during a certain period of time): This approach means you do not have to consider ad replies when measuring. Why?

It is far worse if a visitor enters a classified site, leaves an ad reply and never comes back again, compared to when she usually browses or window-shops without contacting any seller. The first step in the relationship with a customer is to build awareness and establish trust for future transactions. Only after the visitor feels comfortable with your site, can you expect her to reply to a seller or submit her own ad. The number of unique visits clearly tells you about loyalty; especially if you also track non-registered visitors via a recommendation engine.

Here are some further possible ways to measure retention:

• Number of Ad Views / Number of Ads• Number of Ad Replies / Number of Ads• Number of Ad Replies / day (week, month) / Unique Visitor• Average Time To Convert New Visitor To buyer• Average Time To Convert buyer To Seller.

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on-site retention techniquesOn-site retention is the art of keeping the user on the site for longer during each visit, or to have them return more often.

How can you achieve that? by tracking the visitor as they search for items, and offering them similar alternatives to make them click further.

Let’s specify those possible “click further” points:

• after replying to an ad: Show them something similar.

• Personally relevant ads that are similar to the one she just replied to.• Ad categories that are different, but complementary to the replied ad.

These categories can include supplementary products to the one she is searching for, or independent offers based on her on-site search history.

• arrival at main page: It is important to find the right balance between personally relevant welcoming offers and letting the visitors know about the wide variety of products on your site. The customer needs to feel that you satisfy her specific needs, but are also able to offer her more when she wants to extend her interest with window-shopping.

Product-similarity based (item-to-item) recommendations can be used to handle somebody going off the usual path, as this method puts emphasis on the page views of the actual session. It is very important to maintain the experience of serendipity, instead of locking the customer into her own sphere of interests.

off-site retention methods

• Retargeting: based on the visitor’s previous activity on your site, re-engage and convert them with personally relevant ads in retargeting banners.

• 3rd party sites where you advertise.• Campaigns via ad networks like Google Display Network.

Retargeting can be more effective than traditional banners for acquiring new visitors. Gravity’s retargeting solution takes the location, browser type, operating system of the visitor and many other things into consideration to optimize the banner content accordingly. The popularity of ads and categories are also considered in such cases.

• email: Send newsletters and other triggered messages filled with offers tailored to your visitor’s needs.

• emails to visitors » Welcome email and regular newsletter with a personalized set of ads. » Ad reply confirmation email » An email 24 hours after a visitor’s first ad reply » An email 24 hours after a visitor’s fifth ad reply

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• emails to sellers after an ad placement » Ad placement confirmation email, containing a recommendation

box with other, similar (“competing”) ads from other sellers. » An email 3 to 5 days after ad placement, with a predictive “mini

business Intelligence” for sellers: visual chart, ROI metrics and competing ads.

° enrichment with competing ads. We suggest placing two different recommendation boxes, one with the logic “here are some other ads similar to yours”, and the other with “visitors who watched your ad, also watched these” (from same category). both of these boxes would provide an insight into a pool of competing ads. It allows the seller to assess the competition and make adjustments to the, title, description, images, and / or to pay for value-added services options to increase the chances of a successful sale.

° a visual chart showing the change in the number of views on the seller’s ad. Provide visual proof of performance; showing the number of times the ad has been viewed over the last couple of days in a daily distribution. Complement this with a prediction on how performance will evolve, if everything stays as it is. This chart will show a decreasing tendency with each passing day, which, in itself, could persuade the seller to purchase a value-added service.

° ad-specific Roi metrics. The above-mentioned visual chart could be further enriched with ad-specific ROI metrics; a prognosis on how many more ad views the seller can expect upon subscribing to any of the various value-added service options. This allows for a quick cost-benefit analysis at a glance. The forecast is calculated in real-time and is based on historical data about changes in ad views before and after a value-added service option was purchased in that category and/or in case of ads similar to seller’s actual ad.

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RefeRences

1. http://www.thefilterbubble.com/2. http://adage.com/article/dataworks/google-hides-search-terms-publishers-

marketers/244949/3. http://www.columbia.edu/~ss957/articles/Choice_is_Demotivating.pdf4. http://www.theatlantic.com/business/archive/2013/08/more-is-more-why-

the-paradox-of-choice-might-be-a-myth/278658/5. www.longtail.com6. h t t p: //w w w.mar ke t ingc har t s .com /wp/onl ine /consumer s - s ay -

personalization-influences-retail-purchase-decisions-39301/7. http://www.pcmag.com/article2/0,2817,2452944,00.asp

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