Marketing dollars are shifting online, analyst says
Many of the most successful online retailers are shifting their marketing spending to online efforts, particularly search engine marketing, says Heather Dougherty, senior analyst for research company Nielsen/NetRatings. “We’ve seen a shift from traditional advertising to search and e-mail,” Dougherty says.
Case in point: OmahaSteaks.com, No. 76 on Internet Retailer’s Top 300 Guide to e-retailing web sites, is increasing its use of search engine marketing because search has become a major conduit for new customers, the company tells InternetRetailer.com. “It’s been exceptionally successful and profitable for us,” says an Omaha Steaks spokeswoman.
She reports that 70% of customers who come to OmahaSteaks.com from search engines are new to the company. “As a customer acquisition tool, it’s one of the most effective ways we market,” she says.
At the same time, many retailers are still trying to understand the ins and outs of successful search engine marketing. Many have concluded that not only must their pages be optimized for inclusion in results, but they also must be optimized so that the right information shows up in the search results.
Northern Tool Equipment & Catalog Co., No. 93 on Internet Retailer’s Top 300 Guide, for instance, has worked on improving its product descriptions so that the right information will show up in search results. Without revealing too much detail, Nate Miller, e-commerce marketing manager, says the company has improved titles that products carry and made the descriptions more informative. The outcome: search results no longer carry a generic description that says only what Northern Tool is but rather specific information about the product. “We’ve seen dramatic growth in that area as a result,” Miller says.
Dougherty notes that the demand for search engine marketing space is outstripping supply, resulting in rising prices for search engines. “Because consumers do use search and search is such a natural functionality of the Internet, demand is building faster than supply,” she says. “That’s driving costs up.”
She cautions that retailers should make sure their target markets coincide with the search engine’s market. “Don’t dump all search engines into one basket,” she says. “Retailers should ask what participation in a particular search engine does to their brand and their costs.”
For more information on Internet Retailer’s Top 300 Guide, click here.
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