March 16, 2011, 12:34 PM

Tying paid search ads to inventory pays off for

The health supplements e-retailer uses a new marketing tool launched today by ChannelAdvisor.

Lead Photo

Making sure that paid search ads promote products that health supplements e-retailer actually has in stock enabled the company to increase revenue by 30%, says Jose Prendes, the web merchant’s founder and president. Prendes would not attribute and exact revenue increase driven by changing his paid search techniques. Ad spending, he says, decreased by 20%.

PureFormulas realized those gains as one of the 15 retailers that, over the last five months, tested a new offering from ChannelAdvisor Corp. called Inventory Driven Search. ChannelAdvisor, which helps retailers sell through online marketplaces, search engines and comparison shopping sites,  made the automated marketing tool generally available today.

The tool is designed so that retailers can improve their keyword selection and bidding and also make sure their paid search ads reflect in-stock products, price changes and special promotions. “A lot of retailers have fewer keywords than products,” says Scot Wingo, ChannelAdvisor’s CEO. “If you have 10,000 products out there, you should have at least 10,000 keywords.”

That’s because consumers are becoming more exact about entering search terms when shopping, he says. Consumers more often are entering longer search phrases, including model or serial numbers, to describe desired products.  And some of those specific keyword phrases can be nearly unique to a retailer or brand, meaning there is less competition for them, and retailers don’t have to pay as much to place their ads against those search terms. “But those keywords convert very highly because they are so specific,” Wingo says.

Using Inventory Driven Search, ChannelAdvisor studies a retailer’s inventory feed to identify such keyword phrases. The tool also monitors the inventory feed so that when a product runs out or changes price, the paid search ad reflects the change. “The automation is really the key point here,” Wingo says. “Without automation, it just doesn’t scale, and you’d end up with stale ad copy.”

For PureFormulas, which carries 14,000 SKUs for vitamins and health products, the tool enables the retailer not only to expand its stable of keywords, but ensure that search ads quickly reflect current product selection. For instance,  a Vitamin A bottle with a particular count of pills might be out of stock but Inventory Driven Search will enable the retailer to quickly promote via paid search a bottle with another count. “There is always something out of stock,” Prendes says.


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