The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
The retailer highlights inventory management and audience targeting at IRCE 2010.
Staples.com this year expects to save approximately $400,000 in advertising expenses by not bidding on keywords for out-of-stock items, Heather Deschenes, director of customer acquisitions for the office supplies retailer, said today at the Internet Retailer Conference & Exhibition.
The potential savings highlights the importance of inventory management to online retailers hoping to squeeze more profit from paid search. Deschenes spoke in a session entitled "A dive into keyword profitability."
Staples sells more than 30,000 products on its site and daily manages thousands of keywords, Deschenes says. The retailer uses the services of search engine marketing firm iProspect. To make sure inventory matches up with keywords, Staples sends the vendor a daily feed that includes data about stock availability.
Online retailers also can gain more profit from paid search by having a better idea of who their customers are. For instance, while Staples sells to both casual and business customers, the business customers tend to buy more products more often, leading to more profit. As a result, Staples decided to tweak its paid search efforts with keyword phrases that highlighted the interests of business customers.
Deschenes also advised retailers to stay on top of external events that could distort paid search. Last year, for example, Staples and iProspect anticipated a spike in “Staples” searches related to the death of pop singer Michael Jackson, whose memorial service took place at the Staples Center in Los Angeles.
While this is an example of branded keyword activity, it’s important for web retailers to remember that paid search tactics go well beyond branded keywords, said co-presenter Michelle Stern, client services director at iProspect. She said that a consumer who ends up buying a product from Staples might begin his search via a generic term.
"Consumers might use 'computer' before going back to Staples and making the purchase, without the non-branded keyword getting the credit," she said. One way retailers can better attribute sales is by refining their paid search data to separate information about branded and non-branded search terms, she added.
Online retailers also should find ways to deal with consumers who make phone and in-store sales after researching products online through paid search ads, Stern said. She suggested retailers find a way to get these customers to the merchant's web site, such as via an e-mail order verification system.