‘More rational’ search environment helps FTD boost direct sales 14%
A “more rational competitive environment” in online search marketing helped FTD Group Inc. grow its direct to consumer sales 14% to $47.4 million for its fiscal first quarter ended Sept. 30, up from $41.6 million a year ago, president and CEO Michael Soenen said today. Growth was driven mostly by an 11.5% increase in order volume, with the Internet accounting for 88.1% of combined web and telephone orders, virtually the same as 88% in Q1 2005.
Total Q3 revenue grew 26.7% year-over-year to $108.8 million from $85.9 million, as total net income rose 58.8% to $5.4 million from $3.4 million. FTD is No. 48 in the Internet Retailer Top 500 Guide to Retail Web Sites.
76.8% of the growth in Q3 total revenue, or $17.6 million, came from two months of international sales through U.K.-based Interflora, which FTD acquired on July 31. Internet sales accounted for 69.7% of Q3 international orders.
Although less pressure on keyword prices in the floral industry made it easier for FTD to drive up sales, the company is still cautious about the coming holiday season, Soenen adds. “Market rationalization this summer in regards to online search has made things much easier for us around here,” he says.
But he cautions that if search marketing costs get “crazy” again with overly priced keywords, he would pull back on search marketing expenses to keep a lid on costs even if it means less growth in revenue.
In last year’s holiday season, FTD posted a 4% year-over-year drop in holiday season orders—a decline Soenen attributed to a pull-back in overly priced search marketing.
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