Before we begin, a quick heads up. I’ll be speaking in San Francisco in March at the Conversion Conference and Affiliate Management Days. The agendas are up, would be great to see you there, and expect some blog coverage from some of the sessions as well.

Now, on to the links!

• Speaking of affiliate management, here’s a great tip from Econsultancy, how to use Google image search for affiliate recruitment.

• We’re all bummed about the changes to Google referral data for Google Account users. But don’t fret, The Rimm-Kaufman Group and Econsultancy have some ideas how you can “steal” some of that data back.

• While we’re solving problems, how about 3 creative solutions for tackling the EU cookie privacy directive? Smart Insights has some smart ideas such as cookie free analytics, a cookie audit toolkit and cookie privacy software.

• Do those annoying popover sign up requests work or do they push visitors away? They could double your sign up rate — if done correctly. Mark Brownlow has some practical advice for PFO – popover form optimization.

• Heading into 2012, how about applying some of these 40 Facebook marketing tips from 2011?

• One of Google’s major changes this year was its Panda update, and part of that tweak was how “freshness” influences rankings. SEOmoz demystifies this concept with Freshness Factor: 10 Illustrations on How Fresh Content Can Influence Rankings.

• HOW TO: Guide to Performing Website Audits delivers what you think it does

• Learn How To Increase Your Conversions From These 5 Consumer Psychology Studies. ‘Nuff said!

• If you missed my interview with Justin Foster of Video-Commerce.org, check out the transcript here > A Multi-Channel Video Commerce Perspective.

• How to Create a Unique Selling Point for Your Home Page contains very useful visuals of what makes a good and not that good USP. Hint: it’s not just the words, but also the design that matters!

See you in 2012!

January

11 Types of Analytics for 2011

11 Product Page Testing Ideas for 2011

Improving Conversion After the Add to Cart

February

Facebook Connect for Ecommerce: Is It Right For Your Business?

7 Best Practices for Facebook Connect on Ecommerce Sites

Form Design: 11 Patterns For Accepting User Input

March

What’s a Bieber? Embracing Change in Mobile Commerce

How You Doin? 5 Free Ways to Check Your Site Performance

Ecommerce Subscriptions: How to Turn Visitors Into Subscribers

April

Checkout Optimization: Are You Testing The Wrong Thing?

The Hitchiker’s Guide to Ecommerce Coupons

May

Shopping Cart Page Checklist: 16 Things I Look For

EdgeRank: How Facebook Determines What Appears in the News Feed

Hot Hot Heat Maps: 10 Tips for Conducting and Analyzing Eye Tracking Tests

June

14 Ways to Optimize Your Ecommerce Site

A/B and Multivariate Test Validity: Beware of Bad Data!

How We Use the Mobile Web [Infographic]

July

4 Social Behaviors Invading Ecommerce

Checklist: 9 Ways to Build Trust in Checkout

How Big is the Ecommerce Industry? [Infographic]

August

6 Ways to Squeeze More Value Out of Email Sign Up

Email Marketing: Don’t Waste Your Welcome

Something To Think About Before You Redesign

September

Facebook Commerce: Do Facebook Likes Matter? [Research]

Ecommerce Mobile Strategy: Getting Started

19 Mind-Blowing Mobile Commerce Features

October

8 Quick ‘n’ Dirty Tools to Beat Site Abandonment This Holiday

10 Key Highlights On Mcommerce from the Internet Retailer Mobile Commerce Forum 2011

10 Bizarre Things That Influence Customers Online

November

Guide to Link Building for Ecommerce

Digital Disruption Is Happening, Get Ready To Adapt!

8 Tips for Recovering Abandoned Shopping Carts

December

5 Ways to Attract More Customer Reviews

7 Dimensions of Facebook Commerce

Improve Your iPad Usability in 1 Simple Step

Happy New Year!

Thank you for your patience and we will be back to regularly scheduled programming Tuesday.

• Perhaps the biggest piece of news for Internet marketers in October was Google’s announcement that it would no longer provide organic search query data for logged-in Google Account users. While some believe this is a small portion of traffic, the growth of Google Plus and future services means a lot of good data simply will not be available anymore. Sigh. The Rimm-Kaufman Group blog explains the problem while proposing potential solutions.

• 7 ways to optimise for strong product pages delivers what it promises.

• Luke Wroblewski’s October 17 installment of “Data Monday” rounds up some very cool mobile commerce statistics.

• Want to write better PPC ads? Try cat food for inspiration. A hilariously informative post.

• Phone rage: an aggressive or angry behavior by the user of a slow mobile site. Apparently this is a real phenomenon. “Among those who have experienced problems conducting mobile transactions, 23% have cursed at their phones; 11% have screamed at them; and 4% have thrown them.”

• 10 Amazing Twitter Infographics, for your viewing/reading pleasure.

• How do you integrate Google Analytics with your mobile application? Good question, here’s how.

• Name-that-tune app Shazam’s move back to unlimited tagging for free spells more money, thanks to higher affiliate sales. The economics of free…

• Have you got a handle on multichannel funnels in Google Analytics? The Smart Insights blog has a good primer on it.

• If you’re still jonesing for more good reads, check out the ambitious 50+ awesome posts on conversions.

Looking for help with ecommerce strategy and optimization? Contact the Elastic Path consulting team at consulting@elasticpath.com to learn how our conversion optimization services can improve your business results.

Get Elastic is taking a very short summer holiday, and will return next Monday with the findings of our latest industry research. Until then, please enjoy an early edition of Blogger’s Digest, and a selection of posts you may have missed on Get Elastic if you’re a new reader (posts from over 12 months ago).

Blogger’s Digest Picks – August 2011

• Website optimisation for SEO – a 12 part guide kicks off with a detailed description of how to ‘use web analytics to benchmark website performance and drive insight through data.’ Good stuff.

• Have you trained your email subscribers to ignore you? Mark Brownlow proposes you do the opposite of ‘best practices’ to help reactivate inactive subscribers.

• SEOmoz has some tips for link building for ecommerce.

• Love to merchandise with carousel sliders on your e-store? Beware of the 5 Big Usability Mistakes Designers Make on Carousels.

• 8 ways your landing page design is sabotaging your click through rate from Unbounce delivers what it promises.

• In Google news – have you seen the new expanded sitelinks in search results? Coverage by Econsultancy and Smart Insights discuss what this means for your brand.

• How about making checkboxes and radio buttons easier to click?

• Curious what the top Google mobile search terms are so far in 2011? The usual suspect Facebook takes the top spot, surprisingly “how to,” “you” and “lyrics” follow behind. I guess the You is for Youtube, which places 6. Justin Bieber and Lady Gaga are notably absent.

• Most folks struggle to find even one good way, Econsultancy shares 11 ways to measure the value of social media.

Get Elastic Rewinds from the Archive

• How to Reduce Cart Abandonment: 10 No Brainers

• 12 Ways To Enhance Your Online Store With Javascript Hover Effects

• 17 Comparison Matrix Design Tips

• The Dos and Do Nots of Mobile Applications

• 17 Ways To Minimize Friction in the Sales Process

• The 4 Pillars of Ecommerce Copywriting

• 10 Reasons Not to Copy Amazon

• 5 Reasons You Should Copy Amazon

• Top 10 Things Customers Expect from Your Online Store

• Developing a Site Testing Process: Site Optimization 101

• 5 Common A/B & Multivariate Testing Mistakes

• 7 Deadly Sins of Video SEO

• The 5 Dimensions of Social Proof On Ecommerce Sites

• 14 Tips for Cart Recovery and 10 Emails Deconstructed

• 11 Tips for Advanced Search Usability

Version A: Note the video content is higher above the fold, and the pricing box has a smaller cart button, and less emphasis on sale messaging:

Version B: Larger, more prominent calls to action and greater emphasis on value and low shipping price:

Time’s up.

If you picked Version A, you are correct! Ding, ding, ding, tell ‘em what they’ve won, Bob…

Contrary to ecommerce “best practice” of a big, juicy, in–your–face cart button and sale, sale, sale messaging, the winner was the classier, and more subtle design. This confirms the WineExpress customer cares more about the emotional experience of a fine wine than the price. The design that de-emphasizes the discount and shows more of the expert wine tasting video above the fold better reflects the value proposition of learning about and enjoying great wine, not belonging to a bargain club.

With this kind of result, it may be tempting to break out in high fives, pop a cork and celebrate – and move on to another testing page. But why stop at one victory, when there may be some more juice in this page’s grapes?

Testing further

For a page or process that is this important to your bottom line, further rounds of testing can bring you more revenue lift than testing a less important page from scratch. The follow-up test for WineExpress took the learnings (yes, I’m using this as a word) about consumer behavior from the first win and applied it to another round of A/B testing.

Again, let’s test our own gut feel, but this time with some context. The WineExpress customer is affluent, older, sophisticated, knowledgeable about wines and values the experience of buying wine. Wine Express’ real competition is not discount wine site, but the local specialty wine shop. The biggest barrier for this customer profile is shipping costs, when there is a local shop available. This test is to determine whether showing a countdown clock at the top of the page that emphasizes urgency and reinforces the $.99 shipping value proposition will outperform a landing page without it. So, which test won round two?

Version A: Countdown clock to create urgency

Version B: Countdown clock removed

The result was an additional 7% lift for Version B, the one without the clock (and remember, this is lift upon lift, an additional lift out of the previous winning page). WineExpress customers were once again psychologically influenced by a cleaner, more sophisticated design.

A/B testing tells us more than even customer surveys can. If you surveyed customers and ask them whether they like to receive discounts, or if they are price sensitive, or that if would behave a certain way under certain circumstances, they are likely to respond from the conscious mind. The unobserved customer will behave according to the subconscious mind, and we can learn what truly motivates.

But I digress. Back to the purpose of this blog post.

When is it time to stop testing a page?

There is no magic number of times that you should test one page or process. While it’s wise to move on when you reach the point of diminishing returns, unimpressive test results can also be the result of testing small ideas instead of big ideas.

Some landing pages are so critical to your business, that ongoing rounds of testing will continue to improve your performance. But keep in mind, when you have a control that’s hard to beat, there is also a risk in sending half of your traffic to an underperforming test version.

It is as much art as it is science, and you must exercise judgment. The key is to not sell yourself short by testing once or twice when there is untapped potential on your page, while avoiding the trap of testing micro-variables that provide little if any incremental lift, or which are unlikely to have long-term impact [half-life].

Looking for help with ecommerce? Contact the Elastic Path consulting team at consulting@elasticpath.com to learn how our ecommerce strategy and conversion optimization services can improve your business results.

I thought it was time we revisited this topic. Has mobile search changed since 2008? What are your options for delivering mobile experiences and how to they impact SEO? How has the tablet computer changed the game?

How mobile search ranking works

In ’08, we reported that Google Mobile Search has its own algorithm, which likely skews toward local searches and current content (news). But today, there are far more smartphones accessing the mobile web, and most of these searches are performed on Google.com, not the Mobile Search vertical. So, rankings are *likely* to be the same as the desktop – but this depends on the device.

Users have reported seeing identical rankings between desktop and mobile for iPhone and some Android phones. Other device owners may see different results. This is likely due to Google Mobile robots that can mimic various devices while crawling and caching. If it finds pages that don’t work well for certain makes, models and operating systems, it can omit them from search results. iPhone does a decent job of showing any web page (sans Flash content), so there’s not much risk in ranking a garbled page for its users.

We also mentioned time on site / bounce rates may be a ranking factor. While it makes sense that bounces could indicate poor relevance or user experience, a one-page visit or short time on site is not necessarily a bad thing (for informational searches, rather than commercial). There is still no proof that Google uses this as a relevance signal for mobile queries.

Improving user experience across devices

So we’ve established that search engines don’t favor sites that are on a mobile-specific domain (m.site.com or mobilesite.com), but they do consider the mobile user experience of web pages, and will make the call which pages should be returned to various device users. Just last week, Google extended Instant Preview to mobile, which lets you hover over a link to preview the landing page before clicking. This makes mobile-friendly pages even more important for click through.

To recap from the 2008 post, these were and still are your 4 options for optimizing your content for mobile:

1. Do nothing and let the search engine ‘transcode’ your site when appropriate

If the search engine deems your page “yucky” for the mobile device but still wants to rank it, it can ‘transcode’ the content so it renders better on mobile devices, storing it temporarily in cache on a subdomain of the search engine’s domain (creating a gnarly URL string in the process). While cheap and easy, this makes it impossible to track mobile search referral data in your analytics – the URL is not your domain.

Keep in mind transcoding does not occur when a user accesses your site through a direct type-in, through email or via link on another website. If you’re serious about mobile, you’ll consider another option.

2. Design mobile-only version of your site

Whether a subdomain, subfolder or unique URL like sears2go.com, the mobile version is designed with mobi in mind, with stripped-down content and functionality to suit smaller screens and slower connections. While it’s easy to simply update code that already exists, every change to your website will require a change to the mobi version, which you might not be able to automate. It’s also difficult to design one-site-for-all, as a site styled for a feature phone is going to look ancient on a smartphone.

Another concern with a separate domain is duplicate content. When you double-up on URLs and they get crawled and indexed, you could confuse search engines and the mobile page may outrank or appear in place of your actual page in desktop search (and your regular pages outrank in mobile search). In essence, they compete against each other in both indices. (You could exclude your mobile site from being crawled and indexed, and use device detection and redirection when accessed by a mobile device).

3. Use CSS style sheets

Optimize for multiple devices by creating CSS style sheets that can be pulled by mobile browsers automatically (though it’s not fool-proof). There’s some legwork in styling different sheets for the many many devices out there (especially if you’re not currently using CSS), but you have a better chance of a good user experience than transcoding and you don’t need to fear duplicate content issues. (Smashing Magazine has a very comprehensive article on the dos and don’ts of building a mobile web site).

4. Use dynamic mobile pages

With user agent detection, deliver the appropriate CSS stylesheet on-the-fly for various makes, models and operating systems. This provides the best user experience and has no negative SEO “side effects” – but can be costly and can become outdated as new devices/generations emerge. There are many fully managed and licensed solutions available that can get you to market faster and with less cost than an in-house solution.

“Do nothing” is NOT an option, as you must cater to visitors from email, other blogs, bookmarks and direct type-ins – it’s not all about search. I lean towards dynamic pages because you don’t need to rely on the browser to “get it right.”

Has the iPad / tablet computer changed anything?

While the tablet hasn’t changed the way mobile search works, it has changed mobile search behavior. Activities like online shopping are far easier than on the small screen, so expect more commercial searches and visits to your site through these devices.

It also changes the priority of what you should optimize for first. Start with tablets, then work your way “down” through the most mobile-web-friendly and popular devices.

The takeaway

Get your hands on several popular devices to test how your site renders. Which devices need improvement? Do you need to change your “method” of delivering your mobile content (e.g. from mobile site to dynamic transcoding)?

Also test your mobile search rankings manually (especially for branded searches) and compare them to desktop results. Make sure you’re logged out of your Google account so you don’t skew results by history. Are you “missing” from search results on certain devices?

If anything, the introduction of tablet computers only makes mobile more important for ecommerce. With 52 million new tablets landing in consumers hands this year, mobile experiences deserve your time and investment more than ever.

Can’t get enough mobile? Our own Executive VP of Elastic Path, Mark Williams, will be representin’ at the Mobile Shopping Spring conference along with panelists from eBay, Fandango, Amazon and the Children’s Place. You can catch the session Impending ‘Disruptive’ Moments: Developing A Mobile Channel Strategy That Embrace’s Change Friday, April 29th in San Francisco.

To keep pace with this ever-going evolution, it’s not enough to embrace the mobile channel, you must also embrace change. Get savvy in these seven areas and your mobile strategy won’t get shafted by the shift.

1. Consumer Behavior and Preferences

While the mobile channel (or touchpoint) has not historically been a huge sales driver for most e-businesses, the growth in ownership of smartphones and tablets is expected to drive growth in m-commerce. More smartphones than PCs were shipped in Q4 2010, and an estimated 52 million tablets will be shipped this year. Consumers are using their mobile devices in-transit, in-store and even at home in front of their TVs and computers. They expect to be able to interact with your site content and account information anytime, anywhere.

But the wrong way to approach your mobile strategy is “let’s just build this thing because I heard mobile is taking off and Get Elastic says we need an app, a mobile optimized site, an SMS campaign and QR codes on our packaging.”

Before making any decisions about mobile strategy, understand what customers want and expect from you. Are they ready to transact through mobile, or do they just want to check order status and receive SMS alerts when their item has shipped? Do they expect to see your full catalog, or just top sellers or a personalized mix? Do they use their mobiles in-store? Would they use a native app, and which device owners are more likely?

Also consider your market. In some countries, data plans are expensive and customers are less likely to use mobile for shopping, or may desire “lite” sites that don’t have too many objects to download. Because change happens so rapidly, it’s important your data is very current. Embrace customer behavior and preference changes, and plan to re-survey every 6 months.

Customer surveys and third party research (broken down by demographics) can answer many of the above questions, but your web analytics are also helpful. Knowing which mobile devices and operating systems are accessing your site the most today along with bounce rates and other engagement signals can show you where you may need to optimize first.

2. Devices

Not only are new categories of mobile devices hitting the market every year, but existing devices are continually being replaced by “next generation” models with new features and functionality. At the same time, new players are entering the market, for example, RIM’s PlayBook tablet computer.

Embrace change by following tech blogs like Wired and Engadget to keep on top of all the latest geeky goodness, and regularly forecast what your mobile offering needs to look like in anticipation for such shifts. For example, if Apple decided to support Flash, it would change the constraints around serving multimedia to iPhone, iPod and iPad. Or, as Google’s Android overtakes Apple in O/S share, priorities for development may shift. Only a couple years ago, mobile apps were all about Apple and Blackberry. Not the case anymore.

3. Development technology

From HTML5 to various software development kits and APIs, developers need to stay on top of it all. As new generation devices are released, applications may require updates regularly to stay compatible (e.g. iPhone 4 to iPhone 5). At the same time, other technologies like WAP are becoming outdated.

Page load speed is very important, especially when a mobile user is using a weak wifi connection. Understanding performance optimization for all devices will go a long way.

Don’t just think about developing the mobile apps themselves, but also how your underlying commerce platform will feed these “touchpoints.” Seamless experiences that enable access to subscription content, wish lists, account information, order tracking and personalization features (recently viewed, you-might-like etc) serve your customer better, and simplify analytics and reporting.

Embrace change by taking a long-term look at your ecommerce platform roadmap, and what you need to become an “agile” ebusiness.

4. Payments

If you don’t already, consider accepting mobile payment options like PayPal Mobile Payments. New mobile customers concerned about keying in credit card numbers may prefer them (not to mention they’re more user-friendly than keying long numbers with tiny buttons or touch screens).

With NFC (near-field communication / “pay wave”) and new mobile payment options rumored to emerge (think bill-to-carrier, bill-to-iTunes for everyday goods and services, Facebook Credits etc) , prepare to adapt your ecommerce engine to support these innovations 2, 5 and 10 years down the road.

5. Analytics

Your existing analytics solution may not cut it when it comes to mobile. Sure, you can see who’s accessing your site through what devices, but your data needs to answer more questions. Do customers access your content across devices, and how often? Do mobile clicks translate to traditional web conversions, and vice-versa? What about in-app activity? Who are your mobile-heavy customers and do they respond better to mobile email and SMS campaigns? Do clicks from emails opened on mobile devices convert on mobile? How many mobile devices are used in-store (location-based analytics)?

You may need to look at point solutions that provide the metrics you need, or invest in a new analytics package. Check with your vendor on what mobile capabilities are on their roadmap before you make any drastic changes – there’s more than a financial cost to changing analytics vendors).

Beyond the tools, who will own mobile measurement? Most ebusinesses are already swimming in data and struggle enough with web metrics, let alone the complexities of multi-channel attribution. But to really realize your return on investment and optimize the channel, investment in people who have a solid process is key. Embrace change by staffing for mobile itself, rather than spreading your existing analytics team too thin.

6. Mobile Advertising

Advertising dollars follow eyeballs, and eyeballs are on mobile. Opportunities include branded virtual goods, interstitials, in-app advertising and mobile-targeted paid search campaigns / click-to-call. (Mobile PPC should be separated into its own campaign because it typically has lower CPC (cost per click) and lower conversion.) Ads on smaller screens may get more attention than wide-screen WWW units, it’s tough to “overlook” an ad on a mobile phone.

SMS advertising is also a unique opportunity for the mobile channel. Forrester Research found 70% of consumers who receive commercial SMS messages at least open them. Location-based SMS campaigns, mobile coupons for in-store scanning and fun contests are all ways to leverage this method of communication.

Embrace change by allocating a portion of your PPC and display advertising budgets to mobile (if you have an established mobile presence to drive traffic to).

7. Mobile search

I mentioned mobile PPC, but there’s also nuances to mobile SEO. There is much debate around what mobile search engine optimization best practices are – since the secret-sauce-algorithm rests with Google and Bing engineers, we can only speculate and postulate. But as with traditional SEO, we can expect more “clues” offered from the search engines, and more sharing of what works and what doesn’t from the speaker circuit. Embrace change by keeping up with SEO news, attending conferences (and reading Get Elastic, of course!)

Don’t just think of SEO in terms of Google and Bing. If you have a mobile app, your findability in app stores and other marketplaces is important, too.

Can’t get enough mobile? Our own Executive VP of Elastic Path, Mark Williams, will be representin’ at the Mobile Shopping Spring conference along with panelists from eBay, Fandango, Amazon and the Children’s Place. You can catch the session Impending ‘Disruptive’ Moments: Developing A Mobile Channel Strategy That Embrace’s Change Friday, April 29th in San Francisco.

3D Secure offers an extra layer of protection for cardholders and merchants. Customers are asked to enter an additional password after checkout completion to “verify” they are truly the cardholder. But, like any extra step in a checkout process, 3D Secure can have a negative impact on conversion rates. Cardholders frequently forget passwords they’ve created, and balk at long processes and forms.

Every online retailer must make a decision to adopt, avoid or abandon 3D Secure technology. How can you determine if it’s right for your business? How can you minimize the impact on conversion rates if you have implemented 3D Secure?

How 3D Secure Works

Developed by Visa and licensed by MasterCard, 3D Secure stands for “Three Domain Secure” – the domains being the acquiring bank (retailer’s bank), the issuing bank (the cardholder’s bank) and the infrastructure that supports the 3D Secure protocol.

On participating sites, after completing the merchant’s checkout process, the customer is asked to provide a password (if previously enrolled) or to set up his or her Verified By Visa or MasterCard SecureCode credentials. The customer is either redirected to the issuing bank’s website for authorization, or kept within the merchant’s own checkout process through a frame.

Cards not eligible, such as Discover and American Express (which has its own authentication product, Safekey, available only in the UK and Singapore), Visa gift cards and business credit cards with multiple names on the account are detected by the system and not prompted to enroll or enter a password.

An unenrolled Visa, Maestro or MasterCard customer is allowed to opt out of the scheme a minimum of 3 times (depending on the card issuer), up to an unlimited number of opt outs. In some cases, the card issuer may make a risk-based decision to require authentication the first, second or third time). If a cardholder opts out the maximum number of times, he or she will no longer be presented with a “No thanks” button, and may not be able to shop online with online retailers that use 3D Secure until enrolled (this depends on the card issuer).

With Visa, the online retailer may decide whether to process an order for an opt-out or incorrect password, and is protected from chargebacks simply from making the attempt to authenticate through the Visa Attempts program. MasterCard does not offer the same protection if the cardholder opts out.

Pros and Cons of 3D Secure

Pros

Liability shift. Typically, when a transaction is disputed, it’s the merchant who pays the price. 3D Secure ensures liability shifts from the merchant to the issuing bank. This alone may make worldwide implementation of 3D Secure worthwhile for your business.

Chargeback protection. Verified by Visa ensures you’ll never receive a chargeback on your merchant account. This can help prevent “friendly fraud,” where a customer knowingly makes a purchase and files a chargeback, knowing the bank will side with the customer. (MasterCard does not support chargeback blocking).

Interchange benefits. These include lower interchange fees, and in some cases longer payment terms with your acquiring bank.

Increased online shopping. Fear of online fraud holds many consumers back from shopping online. Verified by Visa claims its product increases online shopping, and suggests customers are more willing to purchase through a site that uses 3D Secure.

Cons

Customers hate it. It’s not just merchants that moan about 3D Secure. If there’s any doubt – check out the live stream of Tweets griping about Verified by Visa. Many are NSFW.

@anyagrace laments: “Lloyds TSB Click Safe/Verified by Visa is the absolute bane of my life. I create a new password every time and it just gets longer and longer.” This message was retweeted by several of her followers.

Customers don’t understand it. In markets where it’s not mandated, customers are not always sure what to do. When faced with an extra step in the checkout process – many will just give up and seek out a seller that doesn’t use it.

Card blocking . Livid customers who have been locked out of online shopping will increase the number of complaint calls to your customer service line. They may also vow to never transact with you in the future.

Not to mention, 3D Secure is not all that secure…

Does 3D Secure Really Make Online Shopping Safer?

For unenrolled cards, the first person to use the card online gets to set the password. Identity thieves often know a victim’s date of birth or last digits of a social security number required for activation with the issuing bank. Cyberthieves are also well aware how easy it is to reset a 3D Secure password. They can also be easy to guess. Verified by Visa, for example, suggests “your password should be easy for you to remember” – which ultimately makes it less secure.

Another well publicized problem, 3D Secure has been prone to phishing. To increase confidence, during registration Verified by Visa asks the cardholder to choose a phrase that will appear in the window, such as “happy birthday.”

Finally, 3D Secure aims to increase consumer confidence about shopping online by protecting enrolled cards from unathenticated use. But because 3D Secure is not adopted by every issuing bank or every retailer, and because there is an opt-out option, only some are protected – some of the time. 3D Secure also can’t protect the cardholder from a data breach (card number compromised through the retailer’s records), which is a major concern among online shopping “hold-outs.”

Where is 3D Secure required?

MasterCard has made it mandatory for merchants who wish to accept Maestro cards in the UK, and Verified by Visa is required in Italy. It is strongly encouraged in other countries, especially those that are high risk for fraud, and may become mandatory in the future. Merchants who refuse to participate may face fines and other penalties if “caught.”

The UK has the highest credit card penetration in Europe, and is often the “sandbox” for new security products like AVS, 3D Secure, contactless payment and reverse authorization. According to Cybersource, 73% of UK online retailers currently use 3D Secure, and another 10% are planning to implement this year.

Couple this with the aggressive awareness and push to enroll from issuing banks, UK shoppers seem to have grown accustomed to the scheme, and the impact on conversion is less dramatic as in other markets.

Nevertheless, some merchants choose to hold out as long as they can on 3D Secure. Either by choosing not to accept Maestro cards in the UK, or taking the risk of being fined.

The Amazon Holdout

Amazon.co.uk is a conspicuous example of an ecommerce site that ignores the “rules” for Maestro cards. There are several reasons why Amazon can get away with this.

Amazon also has a sophisticated fraud prevention and resolution team in house, which involves advanced tools, processes and people. (Next post we’ll look at what makes a solid fraud management system, stay tuned). Amazon may also be less vulnerable to fraud than other merchants because it’s not focused on acquiring new customers. Credit card information is stored in users’ accounts and is updated infrequently.

It’s likely that Amazon would rather pay fines and accept chargebacks than sacrifice the volume of sales that could be lost with the extra layer of friction in checkout. Amazon also has the luxury of passing liability to third party merchants and marketplace sellers, which make up 30% of revenue.

Small and medium businesses are less likely to have a fraud department, and may pose a greater risk to issuing banks. Thus, pressure on SMBs is higher than with larger enterprises, though it also depends on the volume of chargebacks a merchant receives, whether those costs are easily absorbed or not. Digital goods sellers, for example, have low COGS and overhead may be in a better position.

Recommendations

How do you decide to use 3D Secure? And if you decide to use it, how can you minimize the “damage”?

1. Weigh the risks against the rewards of not using 3D Secure.

To get a true understanding of the benefit or detriment of using 3D Secure, you must take into account your current chargeback rate and volume, the manual work involved in investigating and settling claims, your credit card processing fee expense, the percentage of sales from cards that require the scheme, and the potential fines you may incur by not participating. Don’t focus solely on a decreased conversion rate or revenue.

Consider your cost of goods sold. Fraud hits hardest when margins are slim. Also, higher ticket items and certain product categories are more vulnerable to fraud. Reducing risk for such products may warrant a site-wide implementation of 3D Secure.

2. Consider selective implementation.

Certain countries carry higher risk for fraud, which may warrant implementation in those countries if you’re a global business with localized websites. For other countries where 3D Secure is not mandated and awareness and adoption is low, the conversion/revenue loss may outweigh the benefit.

There is a case for A/B testing 3D Secure in different markets, provided it’s not mandated in that region. However, you cannot test in one market and apply the results to others. For example, UK cardholders are more accepting of 3D Secure because of its ubiquity, and the conversion impact is expected to be lower than France, the US or Germany.

3. If you decide to use 3D Secure, follow best practices.

Use frames inline. You have the choice to serve up a separate page or embed the frame into your checkout process, with your branding in the page URL and the SSL lock, rather than the bank’s. Though some customers may fear their banking information is being shared with the retailer, Visa’s own research shows higher rates of authentication using this approach.

Educate customers about 3D Secure

Verified by Visa and MasterCard SecureCode both have preamble you can use in your checkout that helps the customer who’s not sure what’s going on understand the benefits of the scheme. You can craft your own copy if you wish, but make sure you communicate the increased security the cardholder will enjoy while enrolled in the program in non-jargonny language (and don’t invent words like non-jargonny).

You should mention there is no charge for the service, and include a link to more information (that opens in a new window). Place the messaging where it will be most noticed, close to the frame or Submit Order button.

It’s also very important to inform customers using the Refresh or Back button will disrupt the order. Using a dialog box when such action is taken (the “are you sure you want to do this” type) can help save an order.

4. Do your due diligence when selecting an implementation vendor.

To achieve the above, it’s important your 3D Secure implementation vendor provides both the ability to modify the elements under your control and analytics tools that include strong analytics tools. For example, you’ll want to keep track of transactional data, the percentage of orders protected, and the number of times customers “saw” a 3D Secure frame.

5. Understand that fraud management is more than 3D Secure.

3D Secure is only one weapon in the fraud-fighting arsenal. Next post we’ll look at other fraud management tools that make up a strong fraud prevention program.

Special thanks…

I want to thank the various fraud management experts who were interviewed for this research:

Peter Caparso, North American President, Adyen
Julie Fergerson, VP Emerging Technologies, Ethoca
Richard Maxwell, Senior Technical Consultant, Javelin Group
Robert Pearson, Vice President, Ecommerce, Best Buy Canada
Chris Lake, Econsultancy
Jeff Sawitke, SVP, Chief Product Officer with Verifi
Andras Csere, Principal Analyst (Security and Risk), Forrester Research

Looking for help with your ecommerce strategy and site optimization? The Elastic Path research and consulting division is available to enterprises selling digital goods and services. For more information, visit us at http://elasticpath.com/ecommerce-consulting/ or contact us at consulting@elasticpath.com.

February may be a short month but we weren’t short on great content this month in the blog-o-sphere.

• Well, the big news of the month was the Wall Street Journal’s exposé on JC Penney’s paid link activities. While SEO is still top-of-mind, VKI Studios has compiled 21 SEO Tools for Auditing Your Website.

• On the social front, Facebook’s changes to Pages has also caused a buzz. Jeff Ente has a very comprehensive piece on What Marketers Need to Know About Facebook’s Switch to iFrames.

• Speaking of Facebook, Facebook Connect is a way many websites have used to simplify sign in, but I’m not convinced it’s a problem-solver for ecommerce sites (as a registration tool, anyways). But the Baymard Institute has put together 9 Ways to Simplify Sign In that’s very relevant for ecommerce sites. Check it out.

• On the topic of social media apathy, MySpace’s popularity has taken a nosedive, it’s tough to “keep” your Facebook fans and Most People Leave Twitter Because It’s Pointless. Sigh.

• The folks at Plumber Surplus and Outdoor Pros share the How to Implement the Seven Best Improvements in the New Facebook Fan Pages.

• Enough social media! On to email marketing. Chad White’s
  Oopsy Hall of Fame 2010 Inductees is worth a look, not to laugh at retailers with their pants down, but to learn from the common mistakes that even the big boys make. Chad includes some solid tips at the end of the article.

• What do users want from ecommerce sites? Great question. Econsultancy has some ideas.

• Amy Africa shares 5 Things Nobody Ever Tells You About Increasing Mobile Conversions.

• Wired’s Meet the Company That Records Your Calls for Quality Assurance describes how eLoyalty-trained CSRs use personality profiling to shorten customer service calls and increase customer satisfaction.

• Geno Prussakov chimes in with 3 E-tailer Mistakes and Affiliate Program Management Parallels.