9.7 Seascape e-Art

Seascape Art is a fine art gallery specializing in paintings associated with the sea. Its proprietor is a well-respected figure in art circles, and runs a small gallery in New York. Attracted by 'Internet success stories', he has compiled some cost and conversion figures, which suggest that an online gallery is a must-have. After all, he argues, targeted traffic x conversion rate = sales. What's wrong with that?

Quite a lot. Suppose keyword research suggest traffic as follows (if the gallery has first page rankings):

Keyword	Google traffic in 24 hours	Total search engine traffic/ month	Competing sites
seascape art paintings	2	171	7
seascape artists	10	855	297
seascape pictures	7	598	631
seascapes	54	4,615	209,000
marine art	17	145	46,400
seascape	50	4270	431,000
seascape art	5	427	5,530
marine fine art	1	85	655
seascape paintings	5	427	10,600
marine painting	1	85	5,270
TOTAL		11,678

If the gallery's average commission/profit margin is $1000, and adopting a conservative conversion rate of 1%, the website would generate a revenue of $1000 x 11,678 x 0.01 or $116,780/month.

Again, probably not. Here are the problems.

1. The competition has been overlooked. Disregarding the keywords where the number of competing sites is over 10,000 (i.e. where the gallery will not get a look in), the monthly figures reduce to 2,221 visitors and $22,210 revenue.
2. A topnotch search engine submission company might beat the competition, but probably not with useful keywords.

Looking at the matter further:

3. When do decent cash flows appear in the business plan? Better make that 12-24 months: it takes time to establish on online presence.
4. What sort of visitors will the keywords draw?
    a. seascape art paintings: researchers, artists, the merely interested, occasional buyer
    b. seascape artists: researchers
    c. seascape pictures: researchers, artists, the merely interested, occasional buyer
    d. seascape art: researchers, the merely interested, occasional buyer
    e. marine fine art: buyers and researchers
    f. marine painting: shipyards and boating enthusiasts

Conversion Rates in Practice

The keywords likely to draw customers are seascape pictures and marine fine art: a total of 683/month. Only some of these will be looking to purchase. The likely monthly traffic reduces to 300, and revenues come down to $3,000, a more realistic figure.

Now the conversion rate. Why the assumed 1%? Because that's a reasonable figure. So it is, if the following apply:

1. Product is well known brand: advertised offline.
2. Product is standard: customers know what they're getting.
3. Incentives apply: easy delivery, discounted prices.
4. Product is well promoted: from shopping mall, personally recommended by prestigious site or authority.

Since none of these is the case, a conversion rate of 0.3% or less would be safer. Revenues come down to $1,000/month at best. Then there is the extra insurance, returns, legal fees. . . The picture's obvious, and explains the glut of online galleries, which competitor research should have highlighted. What can the gallery owner do?

1. Build an online gallery but promote it through affiliate programs and/or fine art directories, on and offline.
2. Consider promoting the site through the pay-per-click search engines.
3. Try marketing through existing online galleries, possibly through some partnership arrangement.
4. Give up the ecommerce dimension and stick to what he knows.

Points to Note

1. Work needed to get the business model right.
2. Keyword research can help identify the appropriate customer segment(s).

Questions

1. Outline a research program leading to the same conclusions by a different route.
2. What marketing methods could increase conversion rates?
3. What element(s) of the Osterwalder and Pigneur model is/are crucial? What should be done?