November 28, 2012, 2:24 PM

Paid search spending skyrockets over the holiday weekend

Traffic to retail sites increased 8% from Thanksgiving to Monday, says Experian Hitwise.

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Paid search marketing paid off over the holiday weekend—a trend that was particularly pronounced on Thanksgiving, according to several reports from search marketing firms released today. That spending helped traffic increase 8% over the weekend to 500 larger retail sites tracked by web measurement firm Experian Hitwise.

Retailers’ focus on shifting online sales and promotions earlier in the weekend was clear as competition for keywords grew, says Marin Software Inc. The advertising management firm says that its retail clients’ paid search spending jumped 59% on Thanksgiving day, compared with a year ago, and the cost per click rose 20% over 2011.

The trend continued through Monday. Across the five-day period, retailer spending on paid search rose 43% and the cost per click remained 20% higher than last year, says the vendor. Similarly, digital marketing firm IgnitionOne says that its retail clients’ search spending during the same period increased 29% compared with 2011, which helped boost those sites’ revenue 23%.

“Retailers are not only investing more dollars online, but they are doing it earlier in the consumer-buying cycle,” says Matt Lawson, vice president of marketing at Marin Software.

As a result, retailers’ fourth quarter search spending is likely to rise significantly compared with a year ago. From Nov. 1 to Nov. 26, retailers’ sales from search marketing were up 28% year over year, says Kenshoo Inc., which provides software to help retailers manage paid search and online marketing programs. And IgnitionOne says its retailer clients’ spending is up 15% compared to a year ago.

Helping to contribute to that growth is retailers increasing their spending on mobile and tablet search ads. While mobile search spending accounts for 17% of the larger search pie, its share is growing fast, says Roger Barnette, IgnitionOne president. The vendor’s retailer clients increased their paid search spend on smartphones 307% and tablets 231%.

“Shoppers are quickly moving their holiday purchasing online, and increasingly onto mobile devices and tablets, and search continues to be a powerful tool to reach them,” Barnette says.

While recent research finds that 20% of U.S. online adults are using their smartphones in stores to compare prices between products at the store they’re visiting and other retailers online, holiday shoppers are also using those devices to make purchases.

On Cyber Monday alone PayPal’s global payment volume increased 190% compared to a year earlier. Moreover, PayPal says that it saw a 166% year-over-year jump in the number of consumers shopping with mobile devices on Monday. PayPal did not provide dollars sales figures.

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