April 7, 2004, 12:00 AM

Online marketing grows sharply as percentage of e-retailers’ budgets

E-retailers spend 71% of their marketing budgets online, up from 55% a year ago, reports the 3rd Annual Merchant survey from consultants The E-Tailing Group.


Online marketing is growing in importance to e-retailers, reports the 3rd Annual Merchant survey from Chicago-based consultants The E-Tailing Group Inc. The survey reports that of the 300 retailers, 23% of web sales is allocated to marketing. Even more striking is the fact that 71% of those dollars are spent in online marketing vs. 55% last year.

Retailers also reported in the survey that consumers entering the company’s URL into their bowers is the largest source of customers, with 27% of traffic coming that way. Next was referrals form catalogs, at 19%, followed by:
e-mail to customers, 14%
search engines, 11%
affiliate programs, 9%
portals, 4%
e-mail to prospects, 3%
comparison shopping sites, 3%
alternative portals such as eBay and Amazon, 2%
unaccounted for, 8%.

Merchants ranked their top marketing objectives as very important/important as follows:
94% Customer acquisition
93% Customer retention
91% Convert browsers to buyers
86% Drive traffic to site
64% Minimize shopping cart abandonment
55% Part of an integrated multi-channel initiative


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