Revenue increased 11.9% in Q1 of 2015, to $17.26 billion compared with $15.42 billion in the year-ago period.
When shoppers can’t find you, maybe you need to pay to get their attention. Retailers are adopting a number of techniques for landing high in the search results, including paying for placement and manipulating the data on their web pages so search engines find them faster.
Ten-year-old Lucky Brand Jeans never planned to nail down a particular market segment. Instead, it let consumer response guide its growth as it gradually found a niche among shoppers. Ten years later, it’s found a couple of niches, selling jeans at outlets as diverse as the 350 teen-focused Buckle stores and the traditional Nordstrom department stores.
“Our customer base is broad,” E-Commerce Director Bridget Belden says. “That’s our biggest challenge and our biggest opportunity. People have heard of us, but they don’t always know where to find us-brand awareness is a little off- kilter with our distribution.”
Lucky’s management believed that Internet sales could help close that gap. But as with the brand itself, Internet opportunity came attached to challenge: how could Lucky help jeans-buying web shoppers navigate through the online competition to find its products?
Belden turned to search engine optimization provider MoreVisibility.com. The 2-year-old Boca Raton, Fla.-based company applied its extensive database of the criteria various search engines use to rank search results listings when it created new pages for Lucky’s web site. Data from the thus “optimized” pages on Lucky’s site are recognized and grabbed more quickly by the targeted search engines as they crawl the web universe looking for relevant data and search results. That pushes Lucky higher up in results rankings. And that’s critical when 75% of online shoppers look no further than the first page of their search results.
As the web has become more crowded with merchants seeking shoppers, search engines are increasingly the battlefield where retailers vie for consumers’ attention. Vendors such as MoreVisibilty have sprung up to help online merchants understand search engine methodology and point shoppers toward their sites with web page optimization services that boost their listings higher up in search results.
But efforts to leap over the competition in search results haven’t stopped at optimization. Many merchants have been quick to adopt a simpler and more direct method of landing high in the search: pay for it. The pay-for-placement model, in which some search engines auction top positions in keywords to the highest-bidding advertiser, has soared in the past year. Revenues at Overture (formerly Goto.com), for example, the current leader in that space, increased 30% in the first quarter of this year from last year’s fourth quarter, even as revenues declined at other advertising-supported web destinations.
Paid search that simply buys its way around the complex algorithms used in search engine technology to rank search results was once scoffed at, says Jupiter Media Metrix analyst Marissa Gluck. “There was this inherent belief in the industry that a technology solution was better than paid search, but that’s changed,” she says. Both consumers and marketers are far more open to paid search now, for a couple of reasons, the single most important being, according to Gluck, that the model works.
Whichever approach a retailer takes, research verifies that improving search is crucial to a web retailing site’s success. According to a study at Georgia Tech, 87% of Internet users begin their online sessions with a search. More specifically, consumer data from Jupiter show that 42% of online shoppers start their sessions by typing a product, brand or store name into a search engine, nearly doubling the second most common way shoppers reach online stores, the 23% who type in a store’s URL directly. In the competition to attract traffic, the proliferation of banner ads has reached a well-documented point of diminishing returns.
Move on up
Further emphasizing the importance of search, Jupiter says only about 4% of consumers find the products they are looking for by clicking through on online ads. The sheer number of ads, along with experienced web shoppers’ growing pickiness about clicking on banners, means that consumers simply ignore many ads. The experience of online sellers such as travel web site Travelworm.com bears that out. The Nevada-based travel service, which specializes in finding hotel rooms at discounted rates, has been advertising on Yahoo for three years, using keyword-linked pop-up banner ads. “The click-throughs are about one-third to one quarter of what they were three years ago,” says CEO Brad Brownstein.
Lucky Brand Jeans’ experience with search shows that there is a pay-off in moving a site higher in the search rankings, however it’s achieved. “We ran a test on AOL in 2000 and found when we looked at our log files that the amount of traffic coming from search engines was increasing,” Belden says. “We thought, something’s working here. People are looking for us, and we have to make it easier for them to find us.”
The auction model on which paid search engines such as Overture and FindWhat.com operate sells keywords to the highest bidder at costs ranging from a few cents to a few dollars per click-through. Under pressure from declining banner ad revenue, other search engines that had bypassed pay for placement are now eyeing it with greater interest. Yahoo, for example, doesn’t sell keywords on its search engine but recently began offering advertisers the option of payment for expedited review of new web pages. The premise is that given the large number of web pages waiting to be indexed, search engines can take months to review a new site submission. The promise is that with expedited review, the sites of paying customers will be reviewed - and possibly indexed for inclusion in search results sooner, although Yahoo provides no guarantee of that.
Providers of both optimization and pay for placement search engine results are quick to point out the benefits of their model and drawbacks of the competition’s. Paid search engines cite quick results and easily measurable ROI on keyword placements, with the merchants paying only on performance. Optimization providers say payment at a high rate on click-through versus sale isn’t always a great deal for retailers, and that focusing search improvement efforts solely on paid engines misses opportunities on search engines that don’t use the paid model.