International sales increased an even faster 30%. The company also reported a record profit of $857 million during the second quarter and accelerated expansions ...
The results of an Internet Retailer survey reveal that retail marketers will shift more of their budgets to Bing and Google’s new ad format and contend with changes in natural search in the year ahead.
Online marketers will shift more of their spending this year to the Bing search engine and to Google Inc.'s Product Listing Ads, suggest annual survey results from Internet Retailer.
The trends uncovered by the survey underscore that search marketing is constantly changing. Besides the new Google paid ad product and decisions about Bing, retailers and marketers must confront a Google search algorithm update along with consumers' ongoing shift to mobile devices, plus a new challenge in analyzing how well they perform in natural search.
Bing is the search engine owned by Microsoft Corp. that also provides search results for Yahoo Inc.-operated sites—and now, for Apple's newest version of its iOS software, which defaults to Bing for voice-activated Siri searches. Product Listing Ads, commonly called PLAs, are image-heavy, product-centric search ads introduced by Google last year, which replaced free comparison shopping ads. Google in October introduced features designed to make PLAs more reflective of local merchants—for instance, via showing available inventory in stores.
Nearly 59% of respondents to Internet Retailer's online survey conducted in September and October said they would increase spending on Google Product Listing Ads in the coming year, with about 29% planning to decrease spending and the rest expecting their PLA budgets to remain the same. Retailers pay for ads on a cost-per-click or cost-per-acquisition basis, though Google says its new local features for PLAs will cost retailers on a cost-per-click basis.
Nearly half of respondents, 48.1%, said they will increase spending on Bing next year, with 5.9% expecting a decrease and 25.5% planning to spend the same amount. The remaining respondents said they don't advertise on Bing. In last year's Internet Retailer search marketing survey, nearly 43% of respondents planned to increase their Bing spending in the coming year.
The Microsoft search engine has struggled to gain ground on Google—more than 82% of respondents get at least half of their search traffic from Google, with 53% that said no less than 71% of that traffic stems from Google—but Bing can be hard to ignore for retailers and online marketers.
Including search activity on Yahoo sites, Bing accounted for 21.0% of U.S. paid search spending in the first quarter of 2013, up from 18.6% in the fourth quarter of 2012 and 18.0% in the first quarter of 2012, says online marketing firm The Search Agency. 40% of retailers' marketing spend this year will go toward paid search, according to a recent report from Forrester Research Inc. and Shop.org, the e-commerce arm of the National Retail Federation trade group. That survey polled 65 retailers.
The Internet Retailer survey, which included questions about paid and natural search, strived to paint a finer picture of where that spending might go and how e-commerce operators hope to make their online marketing budgets more efficient. [The annual Internet Retailer search marketing survey drew 170 responses, although not every respondent answered every question.]
A few data points stand out:
- A lower percentage of respondents said they are eschewing Bing advertising, with about 21% who said they don't advertise on Bing in this year's survey compared with about 24% last year.
- Roughly 56% of respondents this year said they would increase their pay-per-click advertising this year compared with about 49% who said the same in last year's survey.
- More respondents report better results from natural search this year than in 2013. 53% of the most recent respondents said their site traffic stemming from natural search increased over the past year compared with 44% who said the same last year. In last year's survey, many retailers and marketers complained about the negative effects of Google search algorithm changes, which took a generally dimmer view of sites with static and generic content available on many other sites.
Several new questions this year were devoted to Google's Product Listing Ads. Some retailers reported significant gains as they began to master the format and its variables, such as better matching the search term to what consumers are typing into search boxes, tweaking ad campaigns based on the hottest products at the moment, or even responding to weather changes, which could help apparel retailers better anticipate what online shoppers want.
For instance, home décor e-retailer Metaverse Corp., operater of such niche e-commerce sites as FamousPaintings.com, CountryArt.com and MotivationalPosters.com, boosted its returns from Product Listing Ads from about 200% to 300% since the format launched last year, CEO Tom Novellino says. "PLAs require just as much management as traditional search engine marketing—I need my keywords organized in a campaign that makes sense to Google; I need bids managed by keyword, return on investment, etc.," Novellino says. "It's a fair amount of work."
That's why Metaverse pays $2,500 per month to digital marketing firm DataPop to optimize the retailer's PLAs, plus about 2% to 3% of what it spends on Google Product Listing Ads.
Other retailers are experiencing similar returns that would appear to justify the expected increases in spending on Product Listing Ads. Half of survey respondents said they have experienced a better return on their investments on PLAs than from other forms of search marketing. One-third said the returns are worse and the rest said they either don't yet know how their returns compare or they don't use Product Listing Ads.
Investing more—or more wisely—in Product Listing Ads is hardly the only tactic retailers can employ when trying to get more from search marketing, of course. The survey also asked how respondents are improving their paid search and natural search programs.
For paid search, 77% of respondents reported writing more descriptive ad copy, the top tactic in that category. (Respondents could select more than one answer.) Other popular tactics included adding more multiple-word phrases to keyword inventory and testing different versions of landing pages, each cited by about 71% of respondents. More than half, or 53%, said they monitor how their competitors use keywords and phrases.