SPONSORED SUPPLEMENT: How to find the payoff in search marketing

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As more retailers turn to paid search, keyword prices are soaring and the hefty return on investment that retailers once enjoyed on many keywords is shrinking. At the same time, this trend has made many peripheral keywords marginally profitable or unprofitable. In some cases, keyword prices have soared so high that retailers are getting priced out of their top choices and are left scrambling to identify and purchase alternative words that generate sales.

“One client has seen the price of the category keywords it buys on Google rise 55% to 60% since 2005,” says Udayan Bose, founder and CEO of Princeton N.J.-based paid search marketing firm NetElixir Inc. “The overall cost per click of paid search is making it harder for retailers to achieve the same ROI they did a few years ago and in some cases is becoming cost prohibitive. Success in paid search requires a highly thought out strategy.”

But rising costs are not a reason to throw in the towel on paid search. Instead, retailers can get more mileage out of their existing paid search budgets by closely managing the ROI of keywords and looking for alternatives. More often than not, about half the keywords in a search manager’s dictionary are marginal or poor performers. This glut of underperforming keywords is often the result of retailers building keyword dictionaries without testing keyword performance.

Striking the balance

“A lot of retailers blindly build and bid on dictionaries of 10,000 or more keywords before they test ROI on these words,” Bose says. “From the outset, the focus needs to be on determining the value of the keyword and where it fits into the overall advertising and marketing strategy to strike a balance between visibility and sales, instead of randomly adding keywords.”

Bose recommends starting with a dictionary of 1,000 to 2,000 keywords, testing them rigorously and expanding the dictionary based on results and new keywords that are identified from testing.

Paying more than expected for keywords is fast becoming a cost of doing business and retailers that shy away from the cost will erode the effectiveness of their paid search strategies, especially when trying to maintain a good quality score. “There are certain keywords for which retailers need to be known, especially at certain times of the year,” says Suzy Sandberg, president of PM Digital, a New York-based direct response online marketing firm.

For example, retailers of summer wear ought to be purchasing such keywords as “shorts” and “swimwear” in late January and February as they roll out their spring catalogs and resort wear becomes a key focus. “That’s when shoppers begin looking for those items and those keywords are hot,” says Sandberg. “Then there are the keywords for products that the retailer is most closely associated with and sells year round. Knowing which keywords perform well and when is essential to bid management, as is isolating marginal keywords or seasonal keywords and activating them accordingly.”

Determining the real ROI

One point retailers need to keep in mind at all times when bidding on keywords is that some retailers are determined to purchase top ranked keywords regardless of price.

“In a bid environment, the price per click is going to escalate and the projected ROI might not be as good as desired or what it was in the past, but retailers can’t lose their perspective,” Sandberg says. “Until the quality score is achieved, it may take a few weeks to determine the real ROI on that keyword and how well it performs in relation to the overall objectives of the campaign. If after a few weeks a keyword doesn’t meet sales projections, but it brings in new customers, that attribute is of value.”

Understanding the profit margins of the product being advertised can also help retailers determine how much they can realistically bid on a keyword. “Retailers need to consider their profit tolerance and set tolerances by category, but know they can get more aggressive at times and remain within their tolerance,” says Robert J. Murray, president of Watertown, Mass.-based search marketing firm iProspect.com. “Retailers can bid aggressively in some categories knowing they’ll make it up on volume in others.”

In a survey of 794 search marketers conducted in 2007 by JupiterResearch on behalf of iProspect, 88% of respondents measure the ROI of search campaigns, up 11% from 79% in 2005 when the survey was last conducted.

The study also found an increase in search marketer campaign performance evaluations tied to total sales, return on advertising spend, and ROI. Performance evaluations tied to total sales increased 16%, performance evaluations based on return on advertising spend increased 13%, and performance evaluations tied to ROI rose 6%.

Understanding profit tolerance

“Retailers need metrics on the performance of the entire campaign, not just sales generated, to determine the value of the keyword in relation to its costs,” Murray says. “Performance metrics will vary by product category and SKU. It’s important for retailers to remember they can get aggressive at times in keyword bidding and still remain within their overall profit tolerance, but they need the overall campaign metrics to know their tolerance and have the necessary control over keyword bidding.”

The key to success in paid search is retaining control over keyword bidding as bidding wars often break out over the most popular keywords. Retailers that have tested the value of keywords and their contribution to overall sales are better prepared to avoid being drawn into bidding wars that decimate their ROI.

“Effective keyword bidding is a matter of best practices that come with applying data analysis and data modeling to keywords to select those clicks that will deliver the most value,” says Kevin Lee, executive chairman of Didit.com, a New York-based online advertising and marketing firm. “Cluster analysis and data modeling enable retailers to cherry pick the keywords, time of day, and geographies so that messages can be tuned to meet shoppers’ needs. Without dayparting, for example, retailers may bid the right price on keywords only a couple times a day.”

When best practices are applied in an auction, retailers are more apt to approach bidding in a rational manner, weighing the uptick in business to be generated by the keyword against its cost. It is a more effective approach than bidding on a keyword until the cost exceeds the keyword’s daily budget. “Retailers need to apply the same rigors to paid search as they do direct mail,” says Lee. “But most retailers lack the technology to do it, which results in two kinds of retailers at the top of the paid search results; brilliant marketers and ignorant idiots.”

Still, some competitors will bid so irrationally on keywords that it makes no sense for a retailer to exceed the normal bid price. In these instances, retailers that have tested the value of keywords in their dictionary can turn their attention to alternative keywords, dayparts, and geographic clusters that in combination can generate desired sales without blowing a huge hole in their budget. “This type of segmentation keeps retailer’s paid search strategies competitive without necessarily tipping their hand to the competition as to what they are up to,” Lee says.

One exception to paying top dollar for the top ranked keywords is for seasonal items with a small sales window, such as roses for Valentine’s Day or flowers for Mother’s Day. In these instances, competition among retailers is so fierce in the category and the selling season so short that there is a strong business case for paying the extra money to secure the top-ranked keyword.

“If retailers can afford to buy the keywords that get them a number one ranking and having that ranking will enable them to clearly outdistance competitors in lower spots when it comes to sales, then it is not a loss for them to do it,” says Stuart Larkins, vice president of search marketing for Chicago-based search marketing firm DoubleClick Performics.

Finding the alternative product

Retailers who sell on price and can’t afford to overpay for a seasonal keyword can still fight back. Offering an identical item at a lower price is certain to catch the shopper’s attention if the search result does not rank first. The key is to be sure the search result ranks in the top three, as shoppers are less inclined to scroll further down, especially if price is a dominant feature of the ad copy.

“If the retailer is selling the exact same product as competitors at a lower price, then it is all right to go with a lower ranking because it is going to pull in a lot of shoppers,” Larkins says. “Retailers that know how their sales strategy compares to their competitors’ tend to be more nimble in these situations, allowing them to get the most value out of their keyword purchases.”

Buying the price of an item as a keyword is an effective way to obtain a high search ranking in a competitive category without breaking the bank. IProspect’s Murray cites the example of a collectibles retailer that has successfully used the keyword “$14.99” to drive sales. “We conducted some data mining and found this was a term frequently entered in shopper search strings for the types of collectibles the client sold in this price range,” recalls Murray. “Since it was not a search term actively sought by competitors, it was available for a good price and yielded a high return.”

Determining the true value

Determining the true value of a keyword and subsequently how much to bid for it requires an understanding of the role the keyword plays in the path the shopper took to the sale, especially if the keyword is generic. Generic keywords or phrases, such as “wool sweater” play an indirect role in the sale, but are often necessary to capturing a sale as it may be the first keyword search entered by the shopper.

“Shoppers don’t always convert through their first keyword search, but those words do assist in making the sale,” says Jeanine Belsky, vice president of retail for 360i, a New York-based digital marketing firm. “Retailers don’t always see the revenue connected to initial generic keywords entered at the start of the shopping trip, because the link to the sale is not direct.”

In some cases, a generic keyword may be the first step in driving traffic to the store, where the shopper makes a purchase.

All too often, retailers do not give credit to a keyword click that assisted in the sale. Typically, the only click measured has been the last click before consumers complete a transaction. Any other clicks on a marketer’s search results that led up to that conversion receive no credit for accomplishing the goal.

For example, a non-branded keyword such as “DVD player” gets little credit for assisting in a sale, even though the term may have been the starting point for the purchase. What ends up getting credit is the search string specific to the model purchased, such as “Sony DVD player E-Series,” according to Belsky.

“Taking a look at the entire clickstream helps retailers to understand the value of each keyword that played a role in the conversion and ensure that all of these keywords get proper credit,” Belsky says. “Considering how all keywords assist in a sale can significantly improve campaign performance.”

With the availability of algorithms that can closely measure the ROI on paid search terms retailers can reduce their risk of exceeding ROI targets for keywords by tracking the entire clickstream taken to a purchase. “The key is not to get caught up in a bidding frenzy for keywords and paying beyond what will generate an acceptable ROI for that keyword,” adds David Szetela, CEO of Clix Marketing, a Louisville, Ky.-based paid advertising firm.

Branded words’ longer horizon

One point retailers need to remember about branding campaigns is that they do not always generate an immediate sale online, but may create in-store sales, which makes it tougher to gauge the sales lift generated, adds 360i’s Belsky.

Just as retailers must broaden their understanding of the role of each search word in the sales process, they must also seek new ways to use search words to generate sales.

Focusing on branding terms can raise awareness of the retailer among consumers and generate long-term sales. Indeed, brand ads are an essential part of advertising. In the case of paid search, the key is identifying which keywords are geared more toward brand building than immediate sales. “Certain keywords have immense brand value, but like any keyword retailers have to manage them to their ROI,” Szetela says. “The value in brand-oriented keywords is future sales.”

Managing the ROI of brand-oriented keywords lowers the risk of spending on those words, as retailers are no longer picking words and hoping they deliver tangible results, according to Szetela.

This approach has made brand advertising more common among search managers. About 50% of Clix Marketing’s clients focus on paid search for brand advertising. “There is no reason for retailers not to purchase a top ranking for a keyword in a brand marketing situation, even if they have to pay extra, if it is a top performing keyword and the ROI for that keyword is acceptable,” says Szetela.

Indirect boosts to the value of paid search campaigns can also come from mass media ad campaigns created in part to drive search traffic or traffic directly to the retailer’s web site, such as television commercials encouraging viewers to visit a web site or to Google a particular term.

Other marketing’s influence

“Consumer search behavior does not occur in a vacuum; a lot of times it is influenced by other marketing and advertising strategies online and offline,” says Didit’s Lee. “The success of the keyword can be attributable to other types of marketing, such as viral marketing or catalog drops that can spark a product search. The more retailers understand how other types of marketing and advertising impact paid search, the more effectively they can adjust their bid strategies.”

By paying closer attention to the ROI keywords generate, retailers can avoid overpaying for poor performing keywords and identify alternative keywords that can help them get more mileage out of their paid search budgets and compete more cost effectively as keyword prices rise.

Unleashing the power of natural search marketing

The popularity of search engine optimization may have slipped with some retailers in favor of paid search, but it is still a critical component of any retailer’s search marketing strategy. Unlike paid search, for which the cost of keywords is rising and the ROI getting harder to find, search engine optimization remains a cost effective method for generating sales and site traffic, and building brand awareness.

“Merchants are missing the boat on maximizing natural search,” says Brian Klais, vice president of search for Netconcepts, a Madison, Wis.-based search engine and web site optimization firm. “Natural search ought to be treated as an ad channel rather than a marketing effort that is driven more by the IT department because of the need for constant page management to make them visible to search engine spiders.”

By treating search engine optimization as an ad channel, as opposed to a time and labor intensive process of optimizing page content, retailers can effectively broaden the reach of their catalog to shoppers at a much lower cost than buying keywords for paid search ads.

Scaling up at lower cost

“Retailers with 50,000 or more SKUs can’t necessarily afford to market them all using paid search,” says Rahmon Coupe, CEO of YourAmigo, a global search marketing firm headquartered in Adelaide, Australia. “Search engine optimization allows retailers to market more product lines by generating additional category and subcategory landing pages that search spiders can crawl, so those products convert at a cost lower than paid search. Unlike traditional SEO companies, YourAmigo removes retailer’s potential risk by charging on a performance basis, rather than a flat fee under a long-term contract.”

One of the most overlooked opportunities with search engine optimization is long tail search, in which a search starts on general terms, such as books, dresses, motorcycle gear, and then moves to more specific interests, such as “women’s Harley Davidson motorcycle clothing.” With the long tail, the goal for retailers is to tap beyond the head of very popular search terms to the long tail that follows behind. Long tail searches not only collectively generate sizable traffic, which according to studies conducted by YourAmigo can generate 75% of organic search traffic, but traffic that typically converts better than more generic search terms.

“Different shoppers use many different words to express the same thing, but many retailers do not look to optimize their search dictionary and instead focus on broader, more generic terms,” says Coupe. “But retailers can’t just focus on the 20-30 most commonly searched keywords. When all the different phrases and ways people search using the long tail are added up, it’s a very fertile opportunity.”

The opportunity lies in optimizing the content on category and product pages within the web site so it is highly visible to search engine spiders, and in turn generates a high ranking for long tail search strings, which tend not to be brand specific. Research by Netconcepts reveals that for every 40 searches on generic keywords such as “bedding,” one will be conducted for “Wamsutta sheets.”

A lot of work

“Merchants can tap a market value of 40 to 1 by optimizing the long tail,” says NetConcepts’s Klais. “Retailers get a lot of traffic from long tail natural search around brand names, but most do not capitalize as much as they can on this opportunity because they tend not to look at management of the long tail as an ongoing process.”

Indeed, the management aspects of search engine optimization prompt many retailers to focus more attention on paid search because they can get an immediate bang for their buck on paid search ads that transport shoppers to a product or category page. Search engine optimization, by contrast, often cannot bring shoppers to a specific page and, because they depend on search engine spiders to crawl them and then the engines to index them, take longer to show up in search results.

“Search engine optimization requires a lot of work to manage and attention to detail,” says Stuart Larkins, vice president of search marketing for Chicago-based search marketing firm DoubleClick Performics. “Some retailers will tell themselves they can get an immediate impact with paid search, so why not put more of their money behind paid.”

Instead, retailers need to be thinking more about how to strike a balance between SEO and paid search, Larkins says. “When properly managed SEO will create a lot of synergies with paid search that broadens the reach of the overall search campaign,” he adds.

This limited view of search engine optimization is not always prudent. “Retailers need to holistically manage their spending between paid and search engine optimization,” says Jeanine Belsky, vice president of retail for 360i, a New York-based digital marketing firm. “SEO is a way to hedge search marketing spending.”

Part of taking a holistic view toward search engine optimization is examining the length of page URLs. If the page URL is too long, it is less likely to permit search engine spiders to deeply crawl the site and identify the pages and the content on them that will generate higher natural search rankings, such as blogs and customer reviews.

Netconcepts’s GravityStream product uses algorithms to scan page URLs and determine the optimal length of each. One retailer boosted page traffic by 55% simply by shortening the URL. GravityStream is a natural search advertising platform that large retailers are using to more effectively manage natural search.

“Lengthy page URLs create more friction between the page and the search engines, reducing page visibility,” says Klais. “Shortening page URLs increases visibility of the pages within the site to the search engines. It’s shocking for retailers to learn that a higher percentage of their pages than thought do not drive traffic or conversions because of this.”

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Sometimes liberating the content within a site requires creation of a subcategory page dedicated to the desired information. YourAmigo’s Coupe cites the example of an apparel retailer that used YourAmigo’s Search Engine Enhanced Content (SEEC) service to identify opportunities to create subcategory pages that generate significant conversions.

Search Engine Enhanced Content analyzes the keywords shoppers enter when conducting a natural search, that are relevant to the products in the retailer’s catalog. SEEC crawls the client’s web site and publishes new optimized pages that are based on the keywords that shoppers use. Updates to optimized pages based on changing products and inventory are made automatically.

SEEC identified for the apparel retailer that high traffic and sales would come from a page optimized for the search term “black skirts.” The web site only had a general category page for skirts, which would never rank highly in the search engine results for the search term “black skirts.” SEEC added a highly optimized black skirts subcategory page (and thousands of other relevant pages) which boosted traffic and sales. SEEC is available to retailers as a managed service which runs on YourAmigo’s servers, and does not require the retailer to modify their web site, saving IT resources and costs.

“Subcategory pages feature products in different ways around important keywords and allows traffic to come into the site through them, when it might otherwise not,” says Coupe. “A lot times we end up generating more subcategory pages to aid with search engine optimization than category pages.”

Evaluating page design is another opportunity many retailers miss to improve search engine optimization results. While Ajax, (Asynchronous Javascript and XML) and Flash are becoming mandatory in site design they can hinder page visibility to the search engines. Ajax is used to create more interactive site applications and Flash enables fast video downloads.

“Retailers need to be careful of embedding their page content with Ajax because search engines can’t crawl the content contained within Ajax particularly well,” says Klais. “If retailers don’t watch out for this, they can inadvertently decimate their natural search rankings. This is something we talk to retailers about a lot, because there are serious ramifications for SEO if these applications are not properly used.”

Site navigation through left hand navigation bars on web pages is another area retailers overlook in search engine optimization. While these navigation bars are intended to help shoppers drill down into a product category, the words placed around the links are often unrecognizable to the search engines.

“We worked with a toy retailer that put detailed subcategories in the left hand navigation bar, such as ‘Ages 5-7,’ ‘Ages 8-10,’ etc., but they were too specific for the search engine crawlers to recognize how they linked to pages deeper in the site,” recalls Klais.

Netconcepts used an algorithm to identify keywords around the links that the spiders could recognize, such as “Toys for Girls ages 5-7.” “Retailers tend to use their own vocabulary for category links, rather than the words shoppers will use to search for those products, which creates a disconnect with the search engines,” says Klais.

Just as with paid search, retailers can leverage SEO to build their own brand with shoppers. “Some retailers see value in brand recognition by driving traffic to the site that does not always convert immediately, but that will convert later in response to other types of marketing campaigns,” explains Coupe.

Some retailers prefer instead to focus on brand integrity, which means creating a consistent look and feel for every page throughout the site so the shopper has a consistent shopping experience, regardless of what search result they click on. “Brand integrity is an important part of search strategies,” says Coupe.

Finally, retailers with large product catalogs must realize that successful SEO is a combination of human input by experts and an automated process to achieve the necessary scale. “While manual search engine optimization can be effective, it is too time intensive monitoring the changing content within a large Web site, analyzing changes to the ranking algorithms of major search engines such as Google, and then hand coding for thousands of pages,” says Coupe.

Given the range of opportunities that retailers are overlooking in search engine optimization, they still have much to learn.

Finding missed opportunities in paid search

Managing keyword prices is important, but don’t overlook new ways to use paid search.

Although search engine marketing is an integral part of retailers’ online advertising strategies, retailers can become too focused on managing the cost of keywords and fail to focus on identifying new opportunities with search marketing to maximize sales.

For instance, many retailers fail to sync their keyword campaigns with product availability. “Retailers can’t afford to promote an item in a paid search ad and say it is out of stock or that it is back ordered and will ship in a couple of weeks after the shopper has clicked on the ad,” says David Szetela, CEO of Clix Marketing, a Louisville, Ky.-based paid search advertising firm. “Paid search ads have to be backed up by available inventory.”

Matching keyword buys with inventory is only one area that retailers need to pay extra attention to. Others include optimizing landing pages and site design to deliver what shoppers are seeking and matching keyword strategies to how and when shoppers search. “There is a cost associated with each click on an ad, regardless of inventory status or page availability,” says David Cohen, vice president of Databazaar.com, a Miramar, Fla.-based office supplies retailer that uses NetElixir Inc., a Princeton N.J.-based paid search marketing firm, to manage its search marketing. “Monitoring helps to keep the cost per click down.”

15 days & 15 minutes

Keywords ought to be tested for at least 15 days with performance data collected in 15-minute increments to gain a true indication of the value of their performance. “The criteria that need to be measured are ROI, sales generated, cost per sale, average visitor value and the average cost per click,” says Udayan Bose, founder and CEO of NetElixir Inc.

Retailers often fail in managing ad visibility in relation to available inventory for the product. Informing a shopper that an item is no longer available or is on back order after she has clicked on a paid search ad can irreparably damage that retailer’s credibility with the shopper and even result in bad reviews about the retailer in blogs and on other communal web sites to which shoppers are turning for product information.

Creating a link that provides the search marketing manager with updates on available inventory of products promoted in paid search ads can alleviate the bad press—or blog entries—that comes with not having the product to support the ad. “Retailers do not want to mislead shoppers,” Szetela says.

Informing search marketing managers when an item is in short supply makes it possible to adjust the ad copy to reflect the limited inventory. Search managers can include copy to say, for instance, there are fewer than 10 items left, which in turn creates a sense of urgency with the shopper. “If an item is back ordered, state it in the ad copy,” says Szetela. “When an item is out of stock, the ad needs to be shut down.”

There ought to be no delay in pulling an ad not supported by available inventory because any click on it is wasted money. The same principle applies if the link to the landing page unexpectedly goes down.

“Knowing when to turn a paid search ad off because of lack of inventory or a bad link to the landing page requires 24/7 monitoring of inventory and page links,” says Cohen of Databazaar.com. “Cost containment beyond the bid price is important.”

Dropping the under-performers

Keyword monitoring can also indicate when a keyword is underperforming and needs to be dropped from the dictionary or given a rest until a more appropriate time. “In any paid search campaign about 50% of the keywords selected without testing are apt to be laggards that deliver marginal return or are poor performers that need to be replaced,” Bose says.

Another area of challenge is managing page availability. For retailers that manage hundreds of landing pages, monitoring the availability of page links can be daunting. “For some clients, 30% of the links to their landing pages are going to dead pages, but they don’t know enough to pull the pay-per-click ad because the marketing department may be unaware that the links are bad,” says Suzy Sandberg, president of PM Digital, a New York-based direct response online marketing firm.

PM Digital’s Link Checker crawls landing page links for their clients to determine their availability and automatically feeds reports to the marketing manager when the link for a landing page is broken. The application also tracks the status of inventory. “Retailers need to stay current with that type of information and they may not want to drive paid media to pages with merchandise that’s out of stock.” she adds.

Just as site design can influence buying decisions, so too can landing page design. This is especially true for seasonal items, such as branded pro and college sports team hats. In this instance, shoppers that input a search string specific to a team expect be taken to a landing page with headwear pertinent to that search string.

“Retailers don’t want landing pages to look like the home page which has broad consumer appeal,” says Clix Marketing’s Szetela. “Landing pages need to be designed specifically to reflect the copy in the ad and meet the search intent of the customer.”

To help retailers tailor their landing pages to search ad copy, Clix Marketing has developed an application that automatically creates custom landing pages that pertain exactly to the search term used and the ad that attracted the customer. The application is a standard part of the company’s services.

Striking the design balance

Elements that go into designing a good page strike a balance between text and images, include a clean layout that uses callouts to highlight product attributes and liberal use of color, and have an intuitive shopping cart that is easy to locate, according to Robert J. Murray, president of Watertown, Mass.-based search marketing firm iProspect.

Retailers also need a strong link to their site search on a landing page so product catalogs can be more closely linked to search terms if the shopper does not find what she wants on the landing page or simply wants to refine the search further and look for an accessory item.

“The whole idea behind landing page design is to create a shopping experience that comes as close to actually touching the item as possible,” says Murray. “If this doesn’t happen, retailer’s conversions will suffer.”

One rule for creating effective landing pages is constant testing. “Testing is a best practice,” says Kevin Lee, executive chairman of Didit.com, a New York-based online advertising and marketing firm. “It’s the only way retailers will know for sure what designs and mix of offers will work.”

One aspect of paid search that retailers do not put enough emphasis on is adjusting their keyword selections to match up with shoppers’ behavior. Indeed, many shoppers use keywords to search for a product and locate a store where they can see the item before making a purchase. Others want to search for items they can buy online and pick up in a store.

Understanding these behaviors and identifying the time of day or days of the week when consumers are most likely to exhibit them enables retailers to tailor their marketing copy and keyword selections accordingly. “Keywords have to change to reflect the marketing message, even though the product itself does not change,” says Stuart Larkins, vice president of search marketing for Chicago-based search marketing firm DoubleClick Performics.

Retailers identify these behaviors through surveys, according to Larkins. A recent survey by DoubleClick Performics, in cooperation with Microsoft Corp. and ROI Research Inc., of about 1,000 mothers who shop online revealed this demographic heavily uses search engines in support of online and offline purchases, to coordinate travel, and to plan other activities.

Specifically, 35% of respondents spend three or more hours a day online. Three-fourths spend more than an hour a day online, in addition to watching television. About 90% are online at least twice a day for an average of 16 minutes per session.

Syncing the moving

“Some shoppers may research an item initially and conduct a later search with the intent to buy, some may be looking to make a purchase in the store or through another sales channel,” says Larkins, who adds search influences 20%-30% of purchases at retail locations.

“Retailers need to understand why shoppers conduct a search so they can properly allocate their budgets behind the right search words to match up to shoppers’ objectives,” he continues. “There are a lot of moving parts to effective keyword management and lot of attention to detail is required to get them moving in the right direction.”

Similar principles apply to day parting, a technique by which search marketers adjust keywords according to the time of day. Research has shown that shopper’s intentions can vary by the time of day. For example, a shopper conducting a search in the morning or after working hours is more apt to be conducting research because he has the leisure time to do it. In comparison, a shopper who conducts a search over the lunch hour is more apt to buy because he must use the time more efficiently.

“Creating ads to appeal to shopper demographics during the time of day and the shopper’s location is a technique that has been successfully used in broadcast advertising,” says Didit’s Lee. “The psyche of the shopper differs by the time of day and retailers are best served when they build keyword clusters around this concept. This type of keyword segmentation provides retailers with more control over the effectiveness of their search campaigns. The more search marketing managers know about advertising and marketing in other channels, the more readily they can leverage new keywords, change the keyword mix to dovetail with other marketing efforts, and adjust bid strategies.”

Days of the week also influence the effectiveness of keywords. Sporting goods retailers tend to sell higher margin items, such as winter jackets for skiing and snowboarding, on the weekend when shoppers have more time to search the retailer’s catalog. Apparel retailers tend to do the bulk of their business Sunday through Tuesday. “There are trends as to when shoppers are actively searching for items. Keyword lists and buying strategies need to be adjusted to fit them,” says iProspect’s Murray.

The changing seasons

Seasonality plays a major role in how keyword strategies can change. Retailers of sports apparel often see sales spike around the post-season and all-star games as items for team and star players in those events experience heavy search volume. “New product launches, clearance and discontinued items will also draw increased interest and retailers have to adjust their search strategy to leverage these periods of peak interest,” says Murray. “Retailers can afford to promote related keywords more heavily during these periods.”

One pitfall retailers must avoid when implementing a day parting strategy is drawing what appear to be logical conclusions based on early results before data is available to fully support them. “In paid search retailers can’t just assume they are automatically reaching more people because of the directness of the channel,” says Szetela. “If orders are rolling in between 11:30 a.m. and 2:30 p.m., retailers can’t say with certainty that is when the keywords need to be run, because that’s when the most sales are generated. There are potential customers who will research those keywords outside that window and if it is closed when they are conducting their search, those customers will become a missed sales opportunity.”

Nor can retailers assume that major shopping days from the previous holiday season will generate the same amount of sales activity or more the following year. “Sales are going to vary by year and by season and that can make it hard to know when to put more search money behind certain days,” says Sandberg. “Retailers need to index their seasonal and daily performance throughout the year.”

To help retailers achieve this goal during the holiday selling season, PM Digital introduced its Holiday Dashboard in 2007. The dashboard is a real-time reporting tool that provides retailers access to their performance metrics for their holiday search engine campaigns. Retailers can extract performance metrics for specific periods during the holiday season and compare them to those for the same period a year earlier. The information can help retailers forecast sales for the holiday season and make adjustments to their search campaign as needed to hit sales targets.

“Retailers always want to know how their performance compares from year to year, especially during the holiday period so they know how to set bidding strategies for the current year,” Sandberg adds. “There is more to search marketing than managing keywords. Retailers need to spot trends on how items are being searched, what items are the hot sellers on the web site and in their other channels, and during what periods sales are being made. All that information needs to be funneled to search marketing managers so they can adjust their search strategies as needed.”

Get creative

With increasing competition for keywords, retailers must be more creative in stretching their search budgets, and in some cases finding the money that can enable them to purchase the top spot in a paid search ranking. One overlooked option is co-op deals with manufacturers that help retailers underwrite the cost of keywords.

“Co-op deals are a way for retailers to pay for premium positioning during peak selling seasons when they might not otherwise be able to afford it,” says Jeanine Belsky, vice president of retail for 360i, a New York-based digital marketing firm. “It is similar to the premiums manufactures pay to obtain shelf space in a supermarket.”

Retailers entering into a co-op deal accept funding from a manufacturer to promote the manufacturer’s brand in search advertising using keywords specific to those products. “If a retailer has a strict ROI goal, co-op deals are a way to stretch the budget and break through the clutter,” Belsky says.

For retailers the measuring stick in choosing any firm to manage its paid search is how well the prospective partner understands the objectives of the retailer’s search strategy and how effectively the partner can lower and manage keyword costs.

“Proper management of the search strategy requires a lot of attention to detail and more than we can provide on our own,” says Databazaar.com’s Cohen, who adds NetElixir has cut its search advertising costs in half.

In other words, retailers want partners that will help them maximize missed opportunities to drive traffic, generate sales, and boost brand awareness. And that’s what any good keyword search strategy can achieve.