Retailers are moving up in natural search rankings, but room for improvement remains, according to Internet Retailer`s 2010 Search Marketing Guide. In paid search, retailers know how to get their money`s worth.
by Bill Briggs
Online retailers are making gains in natural search, but still find themselves trailing informational sites, notably Wikipedia, in many product categories. When it comes to paid search, where informational sites generally don't compete, it's a different story, according to Internet Retailer's study of the natural and paid search rankings of 250 top retailers, which are featured in the recently released 2010 edition of the Internet Retailer Search Marketing Guide.
The study found that retailers held down the top three spots in a little more than half of the 20 merchandising categories measured for natural search, placing in 35 of 60 possible spots. That's an improvement over last year's study, reported in the 2008 Internet Retailer Top 500 Guide, which showed that retailers held only 29 of 60 possible top spots. But that still leaves retailers with opportunities to gain ground in taking prime positions for common search terms.
Amazon.com Inc. outpaced the industry in the first study, coming up 11 times in the top 60 natural keyword positions and placing first in six of them. The new research proved to be more of the same as Amazon filled 12 of the top 60 slots and once again claimed the top position in six categories. And Overstock.com Inc. appeared next most often with three spots in 2009, as in the previous study. No other retailers were listed more than once in the top 60 positions of natural search for these 20 terms.
Internet Retailer's study of more than 300 keywords tested on Google's search engine revealed a number of categories where Google entirely passes over retailers in assigning top spots in natural search results. For example, in the Appliances category, the first three positions were held by informational web sites: ConsumerSearch Inc., Energy Star and Wikipedia.org. The first company with a retail connection was appliance manufacturer Whirlpool and the top merchant was Best Buy, which showed up sixth.
What it takes
One reason retailers haven't made greater inroads with natural search is that it's more labor-intensive than paid search. "Paid search is, by design, highly tunable," says e-commerce marketing consultant Larry Becker. "The retailer can tune paid search to the business metrics that make sense to them."
Paid search is based on mathematical formulas that take into account the amount bid as well as Google's assessment of a site's relevance to the query. Natural search results reflect Google's assessment of a site's content, and retailers wanting to move up in natural search must build or purchase content related to their products. "Creating content takes work," Becker says.
Some retailers are doing a better job than others of gaining visibility in natural search results, often by tapping site analytics to identify words and phrases their customers are searching for or clicking on and making sure a site has lots of content relevant to those terms.
Among the Top 25 retailers in natural search, three moved up substantially in this year's survey: No. 3 Target Corp.'s total points rose 787%, from 31 in 2008 to 275 in 2009; No. 10 CSN Stores LLC shot up 853% to 181 points this year versus 19 last year; and No. 16 Novica Collectibles Inc. registered a 606% increase, from 18 points in 2008 to 127 in 2009.
To rank web sites within their merchandising category and by keyword, Internet Retailer assigned points every time a retailer appeared in the first five paid and natural results in each segment. In the Personal Computer category in 2009 for example, Dell led the way with a score of 324 points in paid search and No. 2 Hewlett-Packard scored 137. By contrast, their respective scores in natural search were 80 and 49, and Dell was No. 5—after PriceGrabber.com Inc. (237 points), Wikipedia (210), Amazon (106) and Cables To Go (84)—while HP was No. 8.
Natural search not only takes more work, results can be harder to identify and success short-lived. "
For natural search terms, you try to optimize and then cross your fingers—you don't feel as empowered as with paid search,"
says John Morley, executive vice president of marketing at BloomsToday.com, a flowers and gifts retailer. "SEO is ongoing and the rules change all the time. You need to devote substantial resources to it and it's more challenging than paid search."
BloomsToday has engaged ChannelAdvisor Corp. to help manage advertising on the major search engines. "We work together daily on keywords," Morley says. There's constant updating of the web retailer's keywords, such as 'flower delivery,' 'fresh flower delivery' and 'same day flower delivery.'
The partnership works well, Morley says, because ChannelAdvisor knows all about managing keywords, and BloomsToday is familiar with the terms consumers use when searching for flowers for delivery to homes, businesses, hospitals and funeral homes.
Paid search progress
Retailers score far better on paid search results than in natural search, Internet Retailer research shows. Retailers and shopping comparison sites hold 51 of the top 60 positions in the paid search category. That's up slightly from 49 positions in the 2008 study. Consumer goods manufacturers and lead-generation sites are among retailers' competitors in pay-per-click search ads.
In paid search, Lowe's Cos. Inc. (No. 1 in total points) was the leader with four spots, Sears Holdings Corp. (No. 2) held three, and Amazon (No. 3), Target Corp. (No. 4) and The Home Depot Inc. (No. 5) each showed up in two positions. No other retailer appeared more than once.
For retailers like Jelly Belly Candy Co., turning over paid search advertising to a third-party provider rather than continuing to handle it in-house proved a smart move. The retailer brought in NetElixir Inc. in 2008 and within a few months the cost per order from paid search declined 10% to 15% and order volume increased by 15%, says Jason Marrone, e-commerce marketing manager.
In addition to managing keywords, NetElixir helped Jelly Belly eliminate competition from its affiliates. The provider helped stop affiliates from bidding on trademarked keywords, such as Sport Beans and BeanBoozled. "
We were competing against our own affiliates," Marrone says.
Matching content
The retailer also is using a product from SLI Systems Inc. called Site Champion that creates pages to match content on the Jelly Belly site to common terms shoppers search for. SLI hosts the pages, which look like a Jelly Belly page to the shopper and like a static page of Jelly Belly products to a search engine. The retailer pays SLI on a cost-per-click basis.
Retailers are faced with an almost limitless supply of potential combinations when it comes to choosing paid keywords, and choices can go from fairly specific to pinpoint accuracy. For instance, in the Search Marketing Guide top keywords for No. 70 sports collectibles and fan merchandise retailer FansEdge Inc. were such common terms as 'replica jerseys' and 'sports hats.' But its keyword list also included 'Bobby Orr jerseys'—celebrating the iconic Boston Bruins hockey player of the 1960s and 1970s—sandwiched in between variations on the company name and 'NBA jerseys.'
With so many options, sometimes retailers spend more than they should. Mass merchandise retailer Buy.com Inc. carries more than 4 million products and until early 2008 its paid search efforts weren't profitable, says Jeff Wisot, vice president of marketing. The company had been through three search marketing agencies and also tried managing paid search advertising in-house, all to no avail, he says. But in early 2009 the retailer linked with search agency Adlucent and so far the relationship is bearing fruit.
Buy.com only pays Adlucent when a click leads to a sale, and Wisot says he likes that approach to sharing the risk on paid search spend. The provider also has a tool that plumbs the depths of long-tail products to identify new search terms.
For example, Adlucent recently focused on the keywords 'flat panel monitor.' "They put out the term, but also tested it with percentage off, price and free shipping to see what terms resonate with shoppers and which ones show more sales," Wisot says. 'Free shipping' might be the hot button one day, but Adlucent will then test 'percent off' or some similar keywords the next time to keep up sales momentum.
Since putting all paid search marketing in Adlucent's hands, Buy.com has recorded higher conversion rates and booked record revenue. Sales for the first 18 days of June were up 81% compared with the same period a year earlier, Wisot says. Conversion rates in some product areas increased by 35% in June 2009 versus June 2008, he adds.
As the economy emerges from the recession, marketers likely will be faced with a more frugal consumer increasingly focused on meeting specific needs. That will force online retailers to be more on target in bidding on keywords and more adept at raising their rankings in natural search results.
billb@verticalwebmedia.com
