July 23, 2009, 12:00 AM

How Buy.com boosted profits with new search marketing technology

By matching its paid-search marketing efforts with information such as how fast particular products sell and at what profit margins, Buy.com has boosted profits from paid-search campaigns by 45%, vice president of marketing Jeff Wisot says.

By matching its paid-search marketing efforts with information such as how fast particular products sell and at what profit margins, Buy.com has boosted profits from paid-search campaigns by 45%, vice president of marketing Jeff Wisot says.

Buy.com, No. 33 in the Internet Retailer Top 500 Guide, starting running its paid-search campaigns in early April with search marketing firm Adlucent. Using its proprietary Deep Search keyword management application, Adlucent has helped Buy to drive the most effective use of keywords while minimizing costs, Wisot says.

The Deep Search system, he adds, has improved Buy’s search marketing efforts in three general areas:

  • managing bids on keywords for the retailer’s high volume of product data, which covers more than 4 million products and can include new information on thousands of products added in a single day;
  • speeding up the managing of keyword bids in reaction to changes in consumer buying, including the broad economic downturn as well as changes in demand for particular product SKUs;
  • adjusting keyword management after applying web analytics to predict sales volumes by different product subcategories and shopping seasons.

    Prior to using Adlucent, Buy tried working with three major advertising agencies, but none of them was able to manage keywords effectively for the retailer’s large volumes of products and customer interactions, Wisot says. To be effective in paid search, Buy needs to be able to quickly modify keyword selection and bidding based on data such as changing customer demand and available inventory, he adds.

    For example, realizing through analytics that products on Buy.com are more likely to convert visitors to buyers when the products are demonstrated in online videos, Adlucent will place higher bids on keywords tied to video-demonstrated products, figuring they are more likely than other products to produce a return on investment.

    At the same time, it will lower or discontinue bids on products that are selling quickly and appear to be running out of stock, so as not to waste funds on products that don’t need a marketing push.

    Adlucent may also lower bids for a product category on Buy.com if analytics data reveal that the most popular SKU within that category-a particular model and color of a digital camera, for example-is out of stock, leaving only camera models with low conversion rates. “We don’t want to waste money on things that don’t convert,” says Ashwani Dhar, senior vice president of Adlucent.

    “In just a few months, Adlucent has expanded our campaigns and brought an amazing number of high-quality buyers to our site," Wisot says. “And its performance-based model means we only pay for sales, not clicks, which helps us to get even more out of the dollars we spend on search advertising.”

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