July 31, 2012, 2:48 PM

Paid search ads drive a 32% increase in Q2 sales

Conversions from paid search also rose 7%, PM Digital says.

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Consumers who clicked through a paid search ad generated 32% more sales for e-retailers during the second quarter of 2012 compared with the same period a year earlier, according to a paid search index prepared exclusively for Internet Retailer by PM Digital, a search engine marketing firm. The index measures paid search performance quarterly and is based on data from more than 50 large retailers that are clients of PM Digital.

PM Digital does not report the actual dollar amount spent by retailers tracked by the index.

A greater number of clicks and a higher conversion rate on those clicks helped produce the Q2 sales results. The number of clicks on paid search ads during the second quarter increased 21% from the same period a year ago, and the conversion rate on those clicks rose 7%, PM Digital says. The average value of orders made following a consumer’s click on a paid search ad increased 3% during the quarter versus a year ago, whereas the cost marketers paid for each click declined 7%. Total spending on paid search ads by retailers in the index increased 14% year over year.

“Paid search spend continues to both increase and grow more efficient,” says Suzy Sandberg, president of PM Digital. “The combination of falling per-click costs and increasing clicks are driving growth in both spend and sales, and contributing to ongoing ROI improvement.”

The greatest increases in click volume, conversions, paid search spending and sales occurred in May. Mother’s Day and Memorial Day falling in May contributed to the 12% increase in conversions from paid search that month, as both holidays are associated with shopping and promotions, PM Digital says.

The Father’s Day holiday drove sales in June. PM Digital says consumers clicked the most on paid search ads on the Monday and Tuesday before the June 17 holiday; those days also were the peak days for paid search-generated sales.

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