June 11, 2010, 2:08 PM

Free is good, but not always best

Clicks from natural search results may appear free, but they’re not. Paid search can be more effective.

While retailers must pay to place ads on search results pages, paid search can be as cost-effective, or even more so, than investing in higher natural search rankings, says Brandon Proctor, vice president of marketing for online retailer Build.com.

“Organic search is highly competitive, time-consuming and more complicated to manage than retailers think,” Proctor told an audience this week at the Internet Retailer Conference & Exhibition 2010. “Organic search is not the low-hanging fruit many think.” Build.com, a retailer of home improvement products that is No. 97 in the Internet Retailer Top 500 Guide, formerly was called Improvement Direct.

Buying broad-based keywords, such as toilets, can help retailers identify new keywords that can lead to the creation of new ad categories highly targeted to products consumers want. A consumer searching for toilets, for instance, may type in a specific brand, color or model type, such as Kohler, beige low-flow toilet.

Since the retailer’s ad for toilets will appear on the search results page, the retailer can then harvest the data about the additional search terms used to identify new, more targeted search phrases and long-tail search terms that can lead to conversions.

“The long tail is not just for organic search,” says Proctor. “Retailers want to be sure and have their ad in front of the consumer, even if it is a paid search term search string that gets entered once a year. The goal is be there when the consumer comes searching—buying those keywords means it will happen.”

Retailers also want to be sure to buy brand-oriented keywords, even if they have the top organic search ranking for those keywords. Build.com, which is the third largest online home improvement retailer, saw a 30% incremental return on investment from placing ads related to branded keywords where the e-retailer already had one of the top three organic search rankings.

“Cannibalization is not that big of concern because we find that when we push paid search, traffic and conversions from organic search results go up too,” says Proctor. “The two mediums complement each other.”

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