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Retailers Spend More On Paid Search Engine Marketing

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U.S. retailers spent 7% more on paid search campaigns between October and mid-November 2009 across all major search engines — Google, Bing, Yahoo — compared with the same time last year, according to the SearchIgnite Mid Q4 2009 U.S. Search Marketing Report released Monday.

Consumers continue to buy online, but many are spending less on average per transaction. During the first half of the quarter, online conversions rates rose 17% year-on-year, but the average order value declined 27%.

People are buying online, according to Roger Barnette, SearchIgnite president. “We’re feeling pretty good about how the quarter will end up,” he says.

Retailers allocated a higher percentage of ad budgets to Bing this holiday season. U.S. retail advertising agencies dramatically increased their search spend on Bing — up 47% compared with MSN in the year-ago first half of the fourth quarter. Average order values on Bing are 21% higher than across all engines.

Despite retailers’ increased allocation of their paid search dollars to Bing, Google still captures the majority of retail paid search engine marketing campaigns with 75% of all budgets in the first half of the fourth quarter, compared with only 16% on Yahoo and 8% on Bing.

“Although the Monday after Thanksgiving is a big day for online retailers, there are several big days from now through mid-December,” Barnette says. “You can’t really compare it to 2008, because last year everything got thrown out the window. After Thanksgiving it all just fell off a cliff.”

Research from SearchIgnite may reveal a rise in online conversions and retail sales, but findings released Monday from CrownPeak suggests that companies are not making the most of online paid search engine marketing dollars. The study, “Holiday PPC Ad Strategies,” suggests that retailers could do better by improving the connection between paid search ads and Web site landing pages.

In fact, of the 66% of advertisers that did not connect holiday search ads to targeted landing pages, nearly 13% drove traffic to the advertiser’s home page. The remainder misdirected ads to general category pages, or ads that did not integrate the advertising copy. Only 34% of holiday-themed search ads analyzed in the study drove traffic to retail landing pages, but few had a call to action.

Half of product-specific advertisements linked either to a canned search or category page, or the retailers’ home page. Some advertisers — primarily content aggregators — directed ads to specific landing pages, which featured advertisements for other providers of the product.

As part of the two-week study, CrownPeak analyzed search engine marketing results across 10 different holiday-themed phrases, including holiday deals, holiday gifts, Nintendo Wii, Elmo Live, and Christmas decorations. Individual advertisements were analyzed from more than 100 online marketers, all of which leverage the Google AdWords pay-per-click advertising product to disseminate campaigns.

Source:  MediaPost News

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