December 3, 2008, 12:00 AM

Paid search ad costs and conversions are up about 20%, ChannelAdvisor says

More consumers search before they shop, and search engines are delivering more relevant ads, boosting conversions and price per click, says ChannelAdvisor. More consumers searched for Cyber Monday and related terms, says search marketing firm SendTec.

More online consumers searched before they shopped this past weekend, and a growing number searched for Cyber Monday and related terms, according to two e-commerce marketing firms.

ChannelAdvisor Corp. says data from its 6,000 e-retailer clients suggests that the conversion rate from paid search ads is up 20%, and that the cost-per-click rate has increased at about the same pace, from 40 cents to 49 cents. Google and other search engines are delivering more relevant ads on search results pages, leading to higher conversions, says ChannelAdvisor president and CEO Scot Wingo. “Retailers are reinvesting in that channel through higher cost-per-click,” Wingo says.

Wingo says paid search is generating about 10% more of online sales this year than last, as fewer consumers go directly to favorite retail sites. “Consumers like the search experience, because it gives them multiple stores per session,” he says.

Sales this holiday season are up 6-8% year over year for existing ChannelAdvisor clients, and the provider of e-commerce marketing services registered its two highest days ever in gross merchandise sold through its channels on the Friday and Monday after Thanksgiving this year. Client retailers sold $18 million through ChannelAdvisor services Monday and $15 million Friday, eclipsing the company’s previous gross merchandise value record of $11.6 million set on the Monday after Thanksgiving last year. ChannelAdvisor helps retailers sell through paid search, comparison shopping sites and online marketplaces such as eBay, Amazon.com and Overstock.com.

Meanwhile, search marketing firm SendTec reports that six of the top 50 search terms on Google on Monday were Cyber Monday, Cyber Monday deals, CyberMonday.com, Cyber sales and similar terms. Cyber Monday is a term coined by online retailer trade group Shop.org to denote the Monday after Thanksgiving. Among the companies that bid aggressively on these keywords for paid search ad placement were eBay, Walmart.com, Amazon.com and Staples.com. Amazon.com is No. 1 in the Internet Retailer Top 500 Guide, Staples No. 2 and Wal-Mart No. 14.

SendTec says the headlines of all the Cyber Monday paid search ads it tracked used the term Cyber Monday in some form. Most touted “huge,” “unbeatable” or “unbelievable” deals. Staples’ ads for a one-day sale included the date, Dec. 1, in the copy and mentioned free shipping. Many of the ads mentioned time-sensitive offers, such as free shipping for one day, SendTec says.

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