REthink Wine Blog

You may have heard this already: Inertia is pioneering the enablement of wine producers to reach trade buyers directly, in an easy, efficient and fully compliant online fashion. As we ramp up our efforts to empower more wineries to sell more wine Direct-To-Trade, I want to take a closer look at the big-picture question of why direct trade sales must inexorably grow.

By now, the message is clear: the American system of wine economics is rapidly mutating. Not only have consumer habits made wine a much more popular consumer good and increased demand and supply, ongoing regulatory changes have made the marketing and distribution of wine a much more creative and competitive sport.

Innovation arises when things stop working. In our industry, innovation needs to answer many a winery’s dilemma: “I can’t find a distributor who’ll carry my wine; how can I get it to market?”. Whatever the answer may be, it also needs to answer the challenges facing wine buyers: “How can I buy this rare gem if none of my distributors carry it?”

The situation is familiar:
> There are more and more wine products hitting the market (both foreign and domestic).
> There are fewer and fewer distributors as they rapidly consolidate.
> Warehouses are full of inventory that is slow to move.
> Margins are rapidly being eroded by rising fuel costs.
> Traditional distribution systems have less incentive to build brands.

The American 3-tier system has been tremendously successful and continues to be. Yet it is currently not capable of efficiently absorbing all the new-comers to the market. A small number of brands represents a huge portion of what is actually consumed today and it is the 3-tier system that makes this possible. But how can smaller, high-end, boutique brands catch the attention of giants? How can a 10,000-case winery, making stellar wine (though not yet blessed with a sacred 94point rating), possibly catch the attention of large, bottom-line focused, distributors? Fortunately, many still do for the benefit of the consumer; but not all.

As Angela remarked in her recent post: there is distribution and then there is effective distribution. This is my central argument: going direct is about filling the gaps of the 3-tier system. Wine producers need to ask of their distributor: “are you the most effective way to get my wine to market?”. Most often, the answer is a resounding “Yes!” , but in certain situations or for certain brands, the 3-tier system will not work. Here is a short list of situations many wineries will recognize:

> I have a restaurant in Florida who wants my wine, but I can’t get a distributor to carry me because it’s not enough volume.
> My distributor in New-York does not service up-state, how can I get my wine to a buyer in Rochester?
> I have a retailer who really wants my Syrah, but my distributor only carries my Cabernet and Merlot.

All these recognizable barriers to sell are about one thing: Access
- State access: getting to certain states
- Geographic access: reaching all areas of a state
- Product access: getting all your products in a state
- Buyer Access:making your products easily accessible to all potential buyers

So how can innovation help solve some of these issues? A minority of producers is currently selling directly to trade, but technology hasn’t been fully leveraged yet and the scope of current direct trade sales is still geographically narrow. While I will not go in the details of our ‘secret sauce’, Inertia’s DTT program enables bonded wineries to transact sales to these 12 states:

Arizona
California
Connecticut
District of Columbia
Florida
Illinois
Ohio
Oregon
New-York
Vermont
Washington
Wyoming

As Corey commented, these sates represents a huge swath of American wine consumption. If any one of the above states, or portions thereof, have been closed-off to you, or if your distribution in any of those states isn’t as effiective as it should be, then you should take a hard analytical look at the opportunities and implications of DTT.

Inertia’s DTT program will allow wineries to transact sales from trade buyers in any of the above states (or a sub-set for 17/20s and importers). Inertia’s DTT program allows you to pick what you want to sell, where you want to sell it and whom you wish to sell it to, in a fully-streamlined way, all on-line. DTT also implies minimal over-head that frees up staff resources (that would otherwise be spent on order management, invoicing, collections, etc.) to do what is most important: selling.

Access is the first and most obvious reason for going Direct. This is why DTT can be an incremental distribution channel, supplementing the 3-tier system if and where it is not efficient.

Upcoming posts will shed more light on the other two compelling reasons for going Direct-to-Trade: Control and Sales.
Stay tuned.

Before joining Inertia, I was roaming wine country roads; I would hit tasting rooms and meet wonderful people, hug the vines and taste wines on all ends of the spectrum. Being on the road brings you closer to the actual consumer experience and reminds you of what selling direct is all about. As I’ve been diving deeper into the virtual world of wine2.0 and the challenges of creating a wine experience online, I’d almost forgotten the joys of being in wine country and tasting and connecting.

Sure, you can taste and connect at trade tastings and such events also really make the process efficient – 300 brands in one afternoon! OK, we can all admit that with the exception of the most prolific wine writers – or avid swillers – it’s not easy to see, hear and taste all at trade tastings. They are great, much like Costco, but you might miss a little something. So is there a middle ground? Can you find a single place where you can get the wine country feel, while at the same time go through the serious work of tasting dozen of wines?

The answer of course is, Yes - it’s in the multi-brand tasting rooms. As I was on a little tour of the Napa Valley with my crew to taste some of our client’s wines, we decided to go for efficiency. We hit the following tasting spots:

Folio Winemaker’s Studio: is home to many great brands, several being Folio brands of course. The studio artfully blends different experiences and is a great wine country concept from Michael Mondavi.

Silenus Vintners: also a custom crush facility for artisan winemakers, this beautiful tasting room is home to 13 boutique wineries that you may not have heard of before, but that you will surely remember.

Cult Wine Central: as the name says, this is where you go for the big guns. As all the wines go for a certain status – the odd effect in having them altogether is one of democratization – no single wine has a pedestal here so the wines are much more approachable.

In all 3, the staff was extremely knowledgeable on all the brands presented and very friendly – everything was perfect for an afternoon of serious tasting. Thanks again!

While technically we were in multiple tasting rooms of 18 inches in width, these felt a bit like a cozy farmer’s market. They were all extremely comfortable, while each had its own distinct personality, which, consciously or unconsciously, infused the wines. As a wine guy, I believe such wine venues are great for the industry and the consumer. They allow small brands to coalesce and reach economies of scale in order to create a space for a precious and crucial moment to happen: the direct connection between a wine lover, your brand, your message and your wine.

For wineries without a tasting room or for those dreaming of getting their own – finding a spot on that multi-brand bar is a great go-between. The most effective way to create a direct relationship with customers is to meet them while they are meeting your wine in a glass. From that initial contact, a relationship must be nurtured so it may flourish into lasting sales. As we focus a lot on managing your existing customers here at Inertia – it’s great to go out and be reminded how such relationships are created in the first place.

Hey - it’s Friday and it’s time for a little business speculation. So how would high gas prices and Federal Tax rebates affect online wine sales? Can’t read the tea leaves yet, but there’s an interesting study from Harris Interactive for iCongo that provides some clues.

According to the study: “One third (33 percent) of online U.S. adults indicated they are more likely to shop online rather than in-person at a store due to the high price of gasoline.”

Sounds like good news for online wine sales to me. If sales are steady, this would translate to a shift of channels, from off-line to on-line retail. However, given wine’s relatively high shipping costs, this perceived effect may be moot. The study provides another highlight that suggests a way for wineries to take advantage of the potential shift: “57 percent of online adults said free shipping is a reason they are more likely to shop online as opposed to in a physical store”. This would confirm that running free shipping discount promos (or rather $0.01 shipping to be safe) make for a smart email campaign. Free shipping on half case order are always very effective promos in my experience.

Another heartening tidbit of this study is that “61 percent cited the ability to shop at any time as a reason they are more likely to shop online instead of in a store.” That’s really no surprise, but it confirms the steady trend of shifting consumer purchasing behaviors. The shift to online purchasing continues and for wineries to maintain strong direct sales, they must apply laser-like focus on their online sales&marketing skills. Your website really is the extension of your tasting room and can bring in more sales if leveraged effectively.

Oh, and the iCongo guys behind this study also say that rebate checks will have an effect on shopping attitudes. They found that roughly half of consumers plan on spending their upcoming Federal tax rebate on retail purchases. I personally think that buying a case of good age-worthy cabernet (or a stellar Kabinett) would be a good long term investment for those rebate dollars.

The Gomberg-Fredrikson Report brought in some good news, courtesy of Wine&Vines, for us proponents of Winery Direct Sales: Direct Sales Boost California Gains (CA winery shipments to all markets are up 2% over 2006). We are pleased, but not surprised. It confirms the silent wine revolution Inertia has been working for over the past 5 years.

I wanted to review all the factors contributing to the growth of winery direct sales, lest you forget it is happening.

1. Regulatory Environment
Ever Since the Supreme Court Decision of Granholm v. Heald in 2005, more and more states are opening up. The regulatory noose is finally beginning to loosen and winery are increasingly realizing that they no longer need to depend on being distributed in certain states to gain customers there. For the most part, eCommerce is enabling wineries to leverage this new freedom.

2. Wine Marketing and Media
Wine is more fashionable than ever. It’s healthy, it’s not as intimidating as it once was. Younger imbibers want it and CA wines have long shed their inferiority complexes. Hence the plethora of wine related publications and the growth of their readers. When the media focuses its attention on a given wine, this creates consumer demand. If the consumer demand cannot be satisfied in a given market for whatever reason, demand will find supply straight from to the producer, usually via a Google search.

3. Consumer behavior patterns
It’s a bit of a chicken&egg thing as to what helps what. Does the media make you drink more wine or because you drink more wine, the media had better write more about wine? This is a moot point. Let’s focus on the virtuous circle. No one will deny, American drink more wine per capita than they aver did, and they also buy more expensive vino. This is good for business. Furthermore, if more consumers enjoy wine, more of them want to explore the infinite possibilities of fermented grape juice, so they research it and look for availability (see factors 1 and 2).

4. Market Changes
The scissor effect: more producers, fewer distributors – this freezes the grinds of the wine market: traditional supply (retail) cannot satisfy a changing demand. And as this new demand grows (see above), new channel are needed to answer it. Moreover, producers no able to reach the market because of the constriction of 3-tier distribution, take the matter in their own hands and being to market their wines themselves. As producers realize that disintermediation helps their bottom line, they sell direct. Simple economics really, but huge vested interests are at stake so don’t expect these changes to happen overnight or without a big fight from the distributors.

The last factor in this growth is not an external macro-economic one; it is very micro-economic in nature and not as evident to outside observers. It deals with the wineries themselves. Here at Inertia we are in a preferred position to observe (and drive) the last factor conditioning winery direct sales growth:

5. Better Direct Marketing
Yes – selling direct is more profitable and a strategically sound business decision. But it is not easy – that is why producers have long left sales to others. But wineries are learning to sell direct and they are getting much better at it, provided they use the proper tools and sound marketing practices. As wineries get better at the sales and marketing game direct sales will grow, to the great benefit of consumers and producers alike.

We know for a fact that the growth of our clients’ direct sales is not just the result of outside forces; it is also in large part the direct impact of how they implement online marketing best practices. We loo forward to more and more winery direct sales!

As I keep a close eye on how wine enthusiasts connect, buy, sell, discuss and learn about wine online, I think it’s worth giving a brief classification of the main online actors of the wine world.

1.) Media
This encompasses the online versions of the traditional wine press but also the newer voices of wine journalism: wine bloggers. Blogs like Alder Yarrow’s Vinography have become a premier destination for those seeking an alternate editorial voice on wine.

2.) Retailers
By online wine retailers I mean companies that have a license to buy and sell wine. They find customers online and process transactions on their own online store. As even wine.com now has a brick-and-mortar facility, online retailers most often are click-and-mortar. The web is an extension of their real world store allowing them to capture new customers in new markets.

3.) Wineries
They sell most of their wines to distributors, who in turn supply retailers; while the rest of their production is sold in the tasting room. This has largely been the norm until the rapid growth of the direct channel. As the web first came along, most wineries built their online presence to be a marketing vehicle – the web being but one piece of a larger communications arsenal. Today many wineries see their website as the extension of their tasting room: where the brand is promoted and wine is sold. Ecommerce is now the main engine of direct sales growth for many wineries.

These three groups have operated in the off-line world to satisfy the desires of the wine-consuming community in much the same way for many years. The emergence of the web has created new ways for them to engage with consumers and the web is rapidly changing how wine is marketed and sold. The dramatic growth of online wine sales has, to a great extent, been fueled by the emergence of new group of players: those that help bridge the offerings of the three above groups to better serve online wine enthusiasts.

4.) Wine marketers
Roughly, these are organizations that directly help sell wine while not holding any inventory themselves. They may or may not help process transactions or take orders, but they help bring to wine lovers the information they seek and also help shape their purchasing behavior (think of how much a service like wine-searcher.com can mean to passionate wine buyers…) Wine marketers provide a service, that, if useful, builds them an audience. In turn, it is this audience that wine marketers leverage to generate revenue.

These wine marketers often re-use the content generated by the media (or allow their users to post their own content: reviews) and provide product information from retailers and producers alongside clear paths to purchase. As buying patterns increasingly incorporate online behavior, the demand for good wine marketing services will continue to grow. The cost of becoming a noted media player, wine producer or even simply a wine retailer is quite high. That may be why so many new online wine marketing companies are being launched. Though the Google or Facebook of wine as yet to emerge, many are vying to claim that mantle. In any case, innovation and competition in the world of wine marketing services can only be good for wineries and retailers and will only further accelerate the growth of online wine sales.

You may have heard of big wave surfing, in places like Maui, Hawaii’s Jaws or at competitions such as Mavericks on the coast of Northern California (check out the documentary Riding Giants). Last month I enjoyed a great day at the beach watching the Mavericks competition. It’s a bodaciously insane surfing event where the world’s best must be towed by jet skis to catch 30-foot waves.

What’s that got to do with wine marketing? Well, it made me think of an analogy - here goes:

The metaphoric big wave is the expected growth of online wine sales. Numbers don’t lie - so here are the recent stats for the year 2007 (courtesy of the Wine Market Council):

• 38% of Millenials (those born between 1980 and 1993) say they are drinking more wine. Nearly all Millennials will be of legal drinking age in the next 5 years and this group will drive both consumption gains and taste trends.
• 18% percent of core wine drinkers (those that imbibe at least once a week) have purchased wine online.
• 64% of those purchases were done on winery websites.
• Over the next 5 years online wine sales will triple!!!!!!

My point today is that the big wave is coming for online wine sellers, be they wineries or retailers. How will they surf it and which channel is best prepared to capture these new consumers we keep hearing about? The telling number here is that 2/3 of online sales in 2007 were direct, i.e. from winery websites. As online sales grow, will wineries keep that market share, or will it dwindle?

I would argue that currently retailers are better poised to ride the wave. Like the surfers, if you want to ride big, you literally need some ‘pull’- pull marketing that is! Retailers have quite a bit of it already, are getting more, and it will increasingly help them.

Wineries have many advantages over the traditional retail channels like content, branding, being the producer, loyalty built through hospitality etc., not price however. These strengths work great to retain customers acquired directly (via tasting room, clubs, website…). However, harnessing the power of the web to acquire new customers is another feat entirely - hence the need for pull marketing. To keep with the analogy, wineries have superior surfing skills but they don’t have a Jet Ski to help them catch that mythical break. Bummer dude!

A newfound desire for wine, marketing, demographics, deregulation, supply… all converge to generate and sustain new demand. The new wine buyers that make up the big wave are the famed Millenials. Who are they? What is their purchasing behavior? How do they shop? What makes them tick? These are questions anybody selling wine online should be asking. Yep, the eCommerce revolution is hitting the wine world.

Like most savvy online shoppers, these new wine buyers will first look to shopping portals, vertical search engines, social shopping sites, social networks, blogs, forums, etc. to get information, prices and to make a purchase. If a prospective online wine buyer has not visited your winery or received an email from you or heard a recommendation from a friend, chances are he or she may not first look to your website to buy wine. That person will Google what they are interested in and see a very long list of possibilities - only one of them being your winery’s website.

That plethora of options can be daunting, so smart entrepreneurs have created marketing services that act as filters to help consumers find what they want quickly. You know the main ones: Wine-Searcher, WineZap, CellarTracker… and the newer ones: Snooth, Winelog, Vinquire, Radcru, TasteVine, Vino2Vino, Calwineries, Bottlenotes, Cork’d, ClassicWines… There are many. These essential outfits compete to cater to the needs of the inquisitive wine lover. With a few exceptions, they look to wine sellers to fund them. Almost all paths to purchase lead to a retailer paying for a click or a sale. These wine marketers allow supply and demand to connect, and so far, the supply being connected is represented mainly by retailers. This ecosphere of wine marketers has undeniably helped wine retailers, big or small, build their online business. Can they also help wineries?

Wine retailers have been at the online marketing game for some time now. In addition to experience, they have the advantage of working with large inventory, this makes for economies of scale in marketing. They can feed their product data to various price comparators or product list aggregators and also engage in paid search. Retailers have been quite effective at creating multiple paths to their stores. With the growing appetite for imports, this pull marketing is what will surely help them ride the big wave of online wine sales.

The number of wine producers is growing. The number of distributors is decreasing, as is their appetite for diversity… This classic scissor effect creates the need for wineries to find customers outside their usual hunting grounds. No one can argue that the web can be the largest source of new sales. We can agree that retailers already have an edge in this regard. So, given this situation, how can wineries effectively compete for new online customer acquisition?

They need to find ways to enter the same marketing channels as retailers and have their products and content listed on as many wine search engines, databases, social networks or marketing programs as possible and have links to their store wherever their brand is mentioned. Not only will having links and content listed outside your website help your SEO, it is the surest way to bring in traffic and sales.

In acquiring new customers from the web, I would argue that:
- wineries can hugely benefit from such pull marketing
- wineries actually have many strengths they can leverage over retailers
- wineries can play on mediums retailers cannot
However, for wineries to make this happen, they need what only retailers have - scale. Wine marketers need to work with compatible entities, requiring low overhead for data collection. I would argue that for wineries to build this kind of pull marketing, they need an enabler who can bring scale to the table. By working with multiple wineries, using a common data platform, such an enabler can broker on their behalf to make this happen.

In case you’re wondering where this is going… Inertia is busy building the Jet Ski that will help its clients ride the big wave. To beat the analogy to death, I’ll say that what powers the jet ski and how it pulls is best kept for a later blog post… Gnarly!

For your information, I’m the resident frog at Inertia - that means I’m French

Growing up in France I was raised with a fun New Years’ Eve tradition: “Sabrer le Champagne“. This means beheading a bottle of Champagne with a saber/sword. It sounds as cool as it is.

Last week, I was part of a fantastic Champagne tasting group. Among the many fine bottles was a magnum of Pierre Gimmonet 1999 Champagne. As this was the only magnum of the bunch, our delightful host thought it would be in bad taste not to follow the Napoleonic tradition of decapitating a magnum. Having had some experience with this - and wanting to make up for bringing the only corked bottle of the night (1990 Comte Audoin de Dampierre) - I volunteered to be the executioner. Here’s the video:

Champagne Sabering in San Francisco

Before you attempt the coolest trick of the holidays in front of a crowd, you should know practice is recommended. Here are the easy steps:

1. Prepare the field: remove both the foil and the wire cage covering the cork of you well-chilled bottle of bubbly.

2. Find the neck: locate one of the two vertical seams running up the side of the bottle. Where the seam meets the lower lip of the bottle is the point where you will strike.

3. Get ready to strike: grip the bottle firmly around its base. Point it at a 30 degree angle away from all people, windows and pets. Now take your saber (or the back edge of a chef’s knife or even a heavy metal tablespoon if you are feeling cocky) and lay the blade flat just below the lip at the weak spot.

4. The crucial moment: Draw the sword back along the seam and then swing with full force away from your body, upward and into the bottom of the lip. Don’t forget to follow through (as with any sport, see the cork popping, be the ball). To minimize spillage, turn the bottle upright immediately afterward.

5. Victoire! : if executed properly, the cork and bottle top will fly a few feet in the air (this is why you must aim carefully), you will not lose much Champagne but gain massive respect. This is your moment!

Pascal Davis-Givoiset

Over the last year, Social Networking websites like MySpace, Facebook, LinkedIn, Orkut etc. have become a major news item. Microsoft’s recent move on Facebook only highlights how quickly the cards have been reshuffled. So why are social networks the latest animal to dominate the online jungle’s food chain? And why should wineries care? Well, first of all it’s about inevitability. Here is a statistic to ponder: ‘One in 20 Web Visits Go to Social-Networking Sites’. That is HUGE.

See the recent evolution of MySpace and Facebook in terms of reach:

More and more people visit a social network; that’s why so much money is being thrown around. If you want to be seen, you must go where the eyes are (why else are advertisers and their financial backers happily spilling millions?). If you want to use the web to promote your wine brand, you cannot avoid social networks. If you want to attract new visitors to your website, your brand and URL need to be on this major online thoroughfare.

If you accept the need to join the bandwagon, be smart about it. Participation is free, sure, but the cost is in time spent. Simply setting up a facebook profile will not cut it. You need to be active. You can’t be on all of them. You should decide which one is best for your brand and who within your company will be most active or prolific in participating on your chosen social network(s). It is better to be highly active on one network than be inactive on many.

Consider a social network as branding vehicle and an opportunity to interact with your existing customers and potential customers. See it as an extension of your tasting room where conversations are held and relationships built. Again, you should participate, but only if you can do it reasonably well. It takes a bit of time every day to be active, so carefully consider the resources and staff you will put in and the return on effort you expect (if you have tech savvy tasting room staff, use them).

If you do not have the resources to be active, but still want to put your wine in fronts of the thousands of wine lovers that surf social networks, there are other ways. Wine social networks or wine related applications are other vehicles to get your brand out there (like WineBeagles on Facebook, or Snooth’s facebook app ). Let wine “social net-entrepreneurs” work for you. They want your content, it just needs to be shared.

Here at IBG we understand that participation in social networks is not a question, it is an obligation. The challenge remains being smart about it, performing good Social Media Optimization. We want to use syndication technology and smart partnerships to help our winery clients capture new sales and traffic. We will partner with wine web-entrepreneurs and help them fill their platform/applications with wine content. For example, this will enable Facebook wine applications to promote wine awareness on behalf of our clients.

It remains to be seen if social networks will become a major vehicle for eCommerce. Notwithstanding, wineries need to get on board if they want to create an edge for themselves, or simply keep the one they have. Exposure is key and, right now, social networks are where it is happening.

When you are lucky enough to work in an environment that meshes technology and wine, and have had the good fortune of being handed a modicum of wine knowledge, you find yourself being asked a lot of questions about wine by tech-savvy folks. What’s “bret”? “Wait a minute, there’s Pinot Noir in Champagne!?” For whatever reason, wine has a tendency to intimidate, so sharing wine factoids is cool and helpful. Likewise, technology language, geek-speak, can sound foreign to wine folks. To further evangelize Inertia’s creed, I thought I should share with our winery friends some of the basic terminology of online marketing.

SEO: Search Engine Optimization
This is the dark art of getting your website to return higher rankings on search engines (Google, Yahoo, MSN…) for searches on keywords that are directly related to your website/business. These are the free, ‘organic’ results on the left of a Google page. There is no silver bullet for this, experts can help, but ultimately it is a reflection of how relevant the WorldWideWeb thinks your website is for the searched subject. When you type ‘Napa’ on Google, you will see that the Valley is second to auto parts… sorry folks.

SEM: Search Engine Marketing
This is how Google makes billions of dollars in exchange for providing us with an indispensable free service. When you type in search terms in any search engine, somebody pays to have a relevant ad displayed next to the ‘organic’ search results. These are the sponsored links on the right and top of a Google page. When you type in ‘Napa Valley Cab’ on Google, you’ll see that KLWine and Napa’s finest taxi and limo service paid good money to be displayed. It is an awesome money-making service Google provides called ‘AdWords’ that allows advertisers to bid money on search terms and have their ad shown in relevance to what they paid and how relevant their site is.

CPM: Cost Per Mille
aka CPI: Cost Per Impression or CPT: Cost Per Thousand
By web standards, this is the granddaddy of advertising business models. This is online advertising that works just like ads do on TV or in print. You pay for how many times your ad is shown. Say you want to run an ad on a particular page of an online publication and that the CPM for that page is $6. If that page is viewed 5,000 times, you will pay $30. Sounds great for publishers, but it offers no guarantee to the advertisers that the ad is driving traffic or sales. This is good for brand building, getting mind share. General Motors doesn’t expect you to buy a car online or visit its websites, it just doesn’t want you to forget it makes cool cars.

PPC: Pay Per Click
aka CPC: Cost Per Click
This is a method of advertising where the publisher of an ad, text or visual, gets paid every time that ad gets clicked on. If you run an ad for your winery on a blog with a CPC of $0.05 and the ad gets clicked on 100 times, you paid $5 for 100 hits on your website. However, this does not mean 100 new visitors to your site or 100 new sales.
This is the business model that dominates the online world today. It makes the publishers sell ad spaces relevant to its own traffic (otherwise, no clicks, no money) and it gives advertisers a return on what they spend (one click is one potential conversion/sale).

CPA: Cost Per Action or Cost Per Acquisition
This is an advertising model where the advertiser pays only if an action takes place. The advertiser defines what matters to him: a survey being completed or a bottle of wine being sold. He also defines how much he is ready to pay for that action. That cost can be a fixed sum like paying a website $5 for a newsletter sign-up. The CPA can also be a set commission on the sale of a bottle of wine, “a piece of the action”, whereby you give X% of that order amount to the referring website.
For an advertiser this is the ideal form of advertising, you pay exactly for what you wanted and only that.

Affiliate Marketing
This is the name for the industry built around the CPA model. To reconcile demanding advertisers with a multitude of heterogeneously targeted publishers struggling for ad dollars, third parties (LinkShare, Commission Junction…) or large retailers (Amazon) have organized affiliate networks, grouping publishers, to sell advertisers or merchants a relevant space to push their products or services. Instead of going to each individual publisher and figuring out if they are right for you, you trust an affiliate marketer who selects the publishers for you and you pay only for what you get in return.

SMO: Social Media Optimization
This is a fairly new concept that arose with Web 2.0 and its bevy of social networks. Rohit Bhargava coined the term and gives 5 rules for conducting SMO. It is another dark art way of generating more traffic/sales/exposure by using social media, online communities and community websites. Using RSS feeds, “Digg this” buttons, Youtube, Facebook pages, etc… are among the many ways to practice SMO.
For wine, SMO would be a way of getting your winery’s website and your wines listed on as many wine blogs and wine social networks and wine-related websites as possible. These include Snooth, Cork’d, TasteVine, Winelog, Calwineries, Openbottles, Vinorati, Bottlenotes, BoutiqueWineCellar, etc…

As you can imagine, which business model is chosen largely depends on the bargaining strength of the publisher and the advertisers, as well as the type of products or services that is being promoted. When it comes to selling more wine online, directly from the winery to the consumer, leveraging wine social network into an affiliate-type network is a very compelling argument. SMO is a concept Inertia strongly believes in. We will soon be putting it into action with the firm intent of driving new traffic and sales to our winery clients. Stay tuned.

Hopefully, this little introduction will make online marketing seem less esoteric. If you have any questions, feel free to drop me a line in the comments section or email me at pascal.davis@inertiabev.com

Cheers!

You’ve heard it before: “On the Internet, content is king”. Okay - so what does that mean? A website’s success is closely dependent on the amount and quality of its content. Yes - that’s true, but it’s not the whole story. The message here is that content is the first weapon you compete with in the age of web 2.0.

The comforting thing about this is that you control your content. This is empowering because it means that you are now less dependent on what a loud few have to say about you – you have the opportunity to contribute, knowingly or not, to any discussion on your brand. Your online content will greatly influence how your brand is represented online.

In today’s over-saturated wine market, getting shelf space and editorial coverage is quite the challenge. The race is on to gain more exposure and acquire new direct customers. As Inertia is proving to its clients, technology is enabling new ways for wineries to sell more direct and increase the exposure of their brand. How you set-up up your content /data / product information is crucial in this race – one could argue that it is almost as important as the bottle containing your wine.

Let me borrow a brilliant analogy from Ben Chinn. Let’s say your website is like the wine bottles that you lovingly produce. Your website’s content is like the actual wine in that bottle. The website’s design is the bottle, the label, the closure, etc. The care you put in setting up your content should mirror the care you put into making your wine. Just as bottling is a crucial part of your production process, properly creating and setting up your product information and online content is vital to your sales and marketing efforts. No matter how good your wine is, if the bottle is ugly, many will shun it. The same goes for your content; if it is lame, short and hard to sort out, few will look at it and be interested in your wine. Just as winemakers display maniacal care when bottling, the same care is needed when you create and set-up your content.

For your content to reign, it must be:
1. Complete. More is better when it comes to wine. You do not know in advance what will make consumers tick, so give them as much as possible. Lay on information on brix at harvest, let them know the pH of your wines, dare to say you used Hungarian oak.
2. Accurate. Don’t recycle information just to fill out fields, be honest or risk being found out. If you are releasing a 2-year old vintage, don’t say it aged 36 months in oak.
3. Searchable. This is the crucial factor in allowing your content to be propagated to all. For anyone to search detailed information on wine, your wine information must be categorized. This means that you must use all available data fields built in your database. Don’t’ bundle up all the information in one place, make sure that each bit of information is categorized so it can be searched. If you have a single vineyard designate and a field for that bit of data, use it: it will show up in searches for all wines from that vineyard.
Your content needs to be ‘clean’ to leverage the power of the Internet.

Okay, great! Now your content is good and ready, but how do you get it out there for all to use and see? Search engines will help and allow people looking exactly for your information to find you. But what about the others potential customers that are not using search engines to get their wine information? Spreading the word about your wines then depends on the technology used to propagate your content and who picks it up.

The most effective method to make your content available to all is RSS. Since a video is worth a thousand words, check this one out if you are unfamiliar with RSS:

http://www.videojug.com/film/rss-in-plain-english

Via RSS, content comes to the user - instead of having the user come to the content. For example, if your content has been picked up by a wine community website, your next best customer might be the wine enthusiast that checked out what new wines were listed on that site. At IBG we have built an aggregate RSS feed that will allow us to disseminate our clients’ content to the growing number of wine community sites and databases.

Okay, great! Your content is clean and you have a way to share it – who do you share it with? Well, that will be the subject of my next blog post.