November 8, 2007, 12:00 AM

Retailers are investing more in pay-per-click marketing

More merchants are increasing budgets for pay-per-click marketing but most continue to handle PPC campaigns in-house, according to a new study from The E-Tailing Group Inc. and NetElixir, a manager of pay-per-click marketing campaigns.

Don Davis

Editor in Chief

 

More merchants are increasing budgets for pay-per-click marketing but most continue to handle PPC campaigns in-house, according to a new study from research firm The E-Tailing Group Inc. and NetElixir, a manager of pay-per-click marketing campaigns.

Budgets for PPC marketing are increasing, with 50% of those surveyed-versus 44% last year-allocating more than 20% of their total advertising budget to pay-per-click campaigns, the study found. 87% of the survey group planned to increase their PPC budgets in 2008, with almost 30% planning increases of 26% or more.

The number of keywords being managed also continues to rise, with 47% of the survey group managing more than 5,000 keywords and 22% more than 20,000 keywords.

However, while merchants are relying more on PPC marketing, adequate staffing remains an issue, according to the e-tailing group. 60% of those surveyed handle PPC campaigns entirely in-house and 96% of them do so with three staffers or fewer. 40% are outsourcing at least part of their PPC campaigns.

And there are signs that outsourcing of PPC campaigns is gaining acceptance. While management satisfaction with in-house campaigns remained stable (39% vs. 40% in 2006), satisfaction with outsourced campaigns increased to 25% from 19% in 2006, the study found.

The E-Tailing Group based the report on an online survey in October of 137 e-commerce executives representing both Internet Retailer 500 and smaller merchants. Almost one-third of executives responding to the survey report that between 1% and 10% of their orders come from PPC initiatives. 56% say that between 11% and 40% of orders come from pay-per-click marketing, according to the study.

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