In its second-largest acquisition, Amazon buys the company for $970 million.
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Dammann says his company has been using Performics for paid search for a couple of years and started using the agency for optimization in recent months. Hiring an agency brought discipline to Redcats paid search, which previously varied from one brand to another, with some engaged in small third-party deals, some managing it in-house and others doing nothing, Dammann says. Since hiring the agency, paid search has grown to 5% of the company`s web business, while maintaining a consistent cost structure. "We`re a multi-channel retailer with an established catalog business, so for us to get to that 5% figure is a significant chunk of change," Dammann says.
The fees that agencies charge for paid search often come to about 15% of the total ad spend, vendors say. Redcats has agreed with its agency on an undisclosed ROI goal. As long as that margin remains intact, the vendor can keep spending up to a cap that Dammann describes as "very liberal."
When Redcats decided recently to optimize pages for natural search, the company choose the vendor that had been managing paid search. Using a single company to handle paid search and page optimization makes sense, says Gary Stein, analyst at Jupiter Research, because each can feed the other. A profitable keyword discovered in page search, for example, could become a prominent word in titles and copy on pages to improve natural placement, he says.
Making both paid and natural search part of a total marketing effort also is becoming vital as costs and competition rise, says Fredrick Marckini, CEO of iProspect.com Inc., a Watertown, Mass., search engine marketing agency.
Marckini says retailers can improve their bottom line with a process he calls conversion enhancement. It begins with grouping people who are looking for similar things on the site. Some might be results-oriented and others might seek emotional reassurance, for example. The users are put together into personas, and paths through the site are created for each persona.
Users follow the paths by clicking on words or phrases keyed to their way of viewing the site, Marckini says. With keyword costs on the rise and competition heating up for natural search positions, Marckini says, retailers can protect their ROI by putting search in the larger context of a company`s entire marketing thrust with methods like conversion enhancement.
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