Online Retailers to Increase Search Spending This Year

Online marketers who use Google for their search campaigns have endured big changes this year. These experiences may have cut marketer enthusiasm regarding Google. But these businesses remain committed to search and will invest in specific strategies to increase revenue, especially during the upcoming holiday season.

To maintain market share and profitability, Google has rolled Panda and fresh this year and the company is in the process of making Google Product Search all about paid instead of free clicks which it hopes will ‘attract online comparison shoppers’. These kinds of changes are costly to small online retailers and Google’s tactics may explain why more marketers are considering shifting some of their search budgets to Bing which currently attracts only 30% of this type of spending. About 42.5% of surveyed marketers plan to increase their spending with Bing in the next year.

Regardless of their frustrations about providers, marketers remain committed to search according to Internet Retailer’s most recent survey. By business type, here are the percentages of marketers spending more on pay-​per-​click (PPC) this year:

  • All 49.2.%
  • Chain 38.5%
  • Catalog 57.9%
  • Web 46.3%
  • Manufacturer 66.7%

Overall, this is a slight decrease from the 53.1% of marketers who intended to spend more on search last year.

However, as a percent of the total online marketing budget, search has increased for 44.9% of advertisers, decreased for 18.1% and remained the same for the rest, 37.0%. For all search spending, both SEO and paid, about 15.7% of marketers spend 5% or less of online advertising in this channel. Another 11% spend between 6%-10% of their digital dollars on search. And about 17.3% of marketers spend more than 75% of their digital ads on search.

As the online marketplace grows more crowded and shoppers change their search behaviors, using comparison shopping engines, for example, businesses must find a way to stand out. Common strategies for improving paid search programs include:

  • Adding multiple-​word phrases to keyword inventory 60.2%
  • Writing more descriptive ad copy 62.5%
  • Testing different versions of landing pages 43.8%

At least 64% of merchants participating in Internet Retailer survey are online pure plays. Their search investment is particularly important and nearly 4 in 10 respondents indicated that they traced 50% of their sales to search marketing. Getting the search strategy right, for the lowest possible cost, will lead to profitable outcomes.

[Rueter, Thad. Search Engine Marketing Survey. InternetRetailer​.com. August 2012. Web. 15 Aug. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.