Online retailers increase spend on search marketing

A look at how online retailers are increasing spend on search engine marketing.

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Internet Retailer has surveyed 245 online retailers about their attitudes to advertising, fining that etailers trust search marketing more than any other medium to deliver sales.

The survey revealed that most online retailers believe that a bigger online marketing program, and that the amount of resources they are allocating to paid and natural search marketing is growing.

Key findings:

  • Search engine marketing drives more than 50% of sales for 30.2% of the survey respondents.
  • 82.8% of those surveyed did not intend to reduce their overall spending on paid search marketing this year.
  • 57.4% said that search engine marketing performed better, or somewhat better, than other forms of marketing, including email, affiliates and direct mail. Only 12.7% said it performs worse.
  • 39.2% of respondents use more PPC advertising than organic SEO to drive traffic, while 34.7% use more natural than paid, while 26.1% use both equally.
  • 46.1% believe that organic search delivers better conversions, 37.3 believe the reverse, and 16.6% said they perform equally well.

Organic SEO

The survey found that some retailers are focusing more on improving their organic search rankings as a result of the rising costs of PPC advertising. 80.9% said they were rewriting keyword descriptions to improve ranking, while 67.9% were including keyphrases used by searchers on products pages.

According to Greg Jarboe, a member of SEMPO:

“70% of all traffic is generated by natural search and 30% by pay-per-click so retailers should be doing multiple things to get better natural results. They can’t just throw a couple of header tags around certain keywords any more and expect to get significant traffic.”

Paid Search

The survey found that most respondents intent to spend more rather than less on paid search – 58.5% intend to spend more on paid search this year, 32.8% intend to keep their budgets as they are, while 8.7% intend to cut back.

In addition, retailers have faith in Google to deliver results – 79% rated Google as producing the best ROI, followed by 13% for Yahoo, 4% for MSN and 2% for AOL.

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