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Catalogers cut back on paid search spending in 2012
Top 500 data show a 4.7% decrease in average monthly spend from 2011.
Topics: 1-800-Flowers, 2013 Top 500 Guide, catalog, e-commerce, holidays, HSN Inc., Kenshoo, Liberty Interactive, oriental trading co., paid search, search budgets, search engine marketing, systemax inc., Top 500, Top 500 Insider
Paid search spending by catalog and call center retailers in the 2013 Internet Retailer Top 500 guide dipped in 2012 to a monthly average of $126,156 per retailer. That is 4.7% less than the 2011 average of $132,409.
In comparison, the three other merchant groups in the Top 500 Guide—retail chains, consumer brand manufacturers and web-only retailers—outspent catalog and call center retailers in 2012, and on average increased their spending from 2011, according to Top 500 data.
Retail chains in the Top 500 spent an average of $2.48 million monthly per merchant on paid search in 2012, a 64.2% increase from $1.51 million in 2011. Web-only retailers spent an average of $1.87 million, up 10.7% from 1.69 million in 2011. At $1.08 million in 2012, consumer brand manufacturers’ spending on paid search increased 4.9% from $1.03 million in 2011. There are 81 catalog/call center retailers in the Top 500; 66 consumer brand manufacturers; 158 retail chains; and 195 web-only retailers.
There could be many reasons catalog and call center retailers reported lower monthly paid search spending, says Josh Dreller, director of marketing research for digital marketing firm Kenshoo Ltd.
They may have cut their budgets, or found ways to spend more efficiently, he says. “Keep in mind that catalogers don’t have all the same opportunities to tap into search that a multichannel retailer has,” Dreller says. “While many retailers reinvest search savings by funding localized campaigns to support physical store locations, for example, catalogers tend to focus more strictly on driving e-commerce sales.”
Some catalogers tend to invest more in online marketing when printing and mailing a catalog may not be warranted. Examples include teacher or employee recognition days, which don’t generate the demand of popular shopping holidays like Mother’s Day or Valentine’s Day.
For the most part, however, U.S. marketers are spending more on paid search, Kenshoo says. U.S. Q1 paid search spending grew 24% year over year, Kenshoo says.
Of the top five catalog and call center retailers, 1-800-Flowers Inc., No. 58, spent the most at $1.34 million as a monthly average in 2012. Next was Liberty Interactive, No. 5, $447,000; Oriental Trading Co., No. 86, $423,000; Systemax Inc., No. 25, $368,000; and HSN Inc., No. 24, $345,000.
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