Online only retailers can be a lucrative source of business for media sales reps. As we’ve seen recently, some of these businesses – think Warby Parker and UNTUCKit – move into omnichannel retailing after they’ve built an online following. These changes are often accompanied by marketing changes. Internet Retailer surveyed pure play online retailers earlier this year in order to learn more about their marketing plans. Here’s what they discovered.
Paid search is huge for online retailers. About 33% of surveyed businesses plan to keep their search budget steady this year. Another 24% have increased search spending between 0% and 25%. And, 24% have bumped up their search commitment between 26% and 50%.
One of the biggest changes in the paid search sector is the number of marketers who are allocating some of their budget to Amazon's site. Because just over half of consumers start their initial online searches on Amazon, marketers are advertising on that site to generate awareness and business.
Internet Retailer analysts advise online retailers to treat Amazon as a frenemy. While advertising on the site can help marketers, consumers often start and end their online shopping with Amazon — especially if they are Prime members. To counter the threat, marketers have also been spending more heavily on Product Listing Ads on Google this year. Specifically, nearly 40% of these operators have burned up to 25% more budget on these ads. They’re hoping this activity will draw the attention of the 38.8% of consumers who start their online searches with Google.
In the past year, only 30% of online marketers cut or left their digital marketing budget unchanged. At least 27% of operators are paying between 5% and 15% more to get noticed online. They say the following formats deliver the best return on investment for them:
- Email 37.9%
- Social media ads 13.8%
- Amazon ads 12.6%
- Paid search (desktop) 10.3%
- Other 5.8%
- Google/Bing PLA 4.6%
- Content marketing 4.6%
- Affiliate 4.6%
- Display ads 2.3%
- Paid search (mobile) 2.3%
- Video ads 1.2%
Email remains the workhouse digital format for many online retailers. Internet Retailer statistics indicate the median number of campaigns during a month clocks in at 11 for the typical digital marketer in the 2017 Internet Retailer Top 1000. If your clients are spending more on paid search and email campaigns this year, they may need your help to optimize their results.