Groupon says its focus is on the bottom line, rather than top-line growth.
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The retailer also is using a product from SLI Systems Inc. called Site Champion that creates pages to match content on the Jelly Belly site to common terms shoppers search for. SLI hosts the pages, which look like a Jelly Belly page to the shopper and like a static page of Jelly Belly products to a search engine. The retailer pays SLI on a cost-per-click basis.
Retailers are faced with an almost limitless supply of potential combinations when it comes to choosing paid keywords, and choices can go from fairly specific to pinpoint accuracy. For instance, in the Search Marketing Guide top keywords for No. 70 sports collectibles and fan merchandise retailer FansEdge Inc. were such common terms as `replica jerseys` and `sports hats.` But its keyword list also included `Bobby Orr jerseys`-celebrating the iconic Boston Bruins hockey player of the 1960s and 1970s-sandwiched in between variations on the company name and `NBA jerseys.`
With so many options, sometimes retailers spend more than they should. Mass merchandise retailer Buy.com Inc. carries more than 4 million products and until early 2008 its paid search efforts weren`t profitable, says Jeff Wisot, vice president of marketing. The company had been through three search marketing agencies and also tried managing paid search advertising in-house, all to no avail, he says. But in early 2009 the retailer linked with search agency Adlucent and so far the relationship is bearing fruit.
Buy.com only pays Adlucent when a click leads to a sale, and Wisot says he likes that approach to sharing the risk on paid search spend. The provider also has a tool that plumbs the depths of long-tail products to identify new search terms.
For example, Adlucent recently focused on the keywords `flat panel monitor.` "They put out the term, but also tested it with percentage off, price and free shipping to see what terms resonate with shoppers and which ones show more sales," Wisot says. `Free shipping` might be the hot button one day, but Adlucent will then test `percent off` or some similar keywords the next time to keep up sales momentum.
Since putting all paid search marketing in Adlucent`s hands, Buy.com has recorded higher conversion rates and booked record revenue. Sales for the first 18 days of June were up 81% compared with the same period a year earlier, Wisot says. Conversion rates in some product areas increased by 35% in June 2009 versus June 2008, he adds.
As the economy emerges from the recession, marketers likely will be faced with a more frugal consumer increasingly focused on meeting specific needs. That will force online retailers to be more on target in bidding on keywords and more adept at raising their rankings in natural search results.