After the turkey and the pumpkin pie, let the shopping begin.
'Tis the season for Christmas shopping, and this year online retailers are paying more attention to people browsing at search engines. They're also spending more in the bidding war for the top spots in the "sponsored links" that appear above and to the right of the unpaid search results, paying a fee for each click by a potential new customer.
"This year people have gotten really serious about search," says Fredrick Marckini, chief executive and founder of iProspect, which helps retailers like Circuit City, Sharp Electronics, Columbia House and Lids.com manage pay-per-click advertising campaigns, as well as improve their rankings in unpaid search results.
The company, based in Watertown, Mass., has some retail clients spending hundreds of thousands of dollars per month on search engine marketing during the holiday season. That was the case last year, too, but only for a smaller group of merchants. "Paid search is the fastest growing segment of our business," Marckini says.
That's true for other search engine-marketing firms as well. Their customers are spending more this holiday season, and with a year or two of experience under their belts, they have more refined tools to determine how much to spend, and where.
Overall, 7 out of 10 retailers plan to spend more on paid listings on search engines during the holiday season, according to results of a study by Shop.org, an industry trade group of online retailers. The group found that the average retailer spent $877,000 on search engine marketing in 2004, more than twice as much as the average of $399,000 for the previous year. During that time, the spending jumped from 10 percent of total online marketing budgets to 19 percent.
"Online retailers love measurable marketing tactics, and search engine marketing is highly measurable and it's effective. The return on investment is very strong," says Scott Silverman, Shop.org's executive director.