Survey: Searching for better ROI

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.

Thad Rueter

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:

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.

For natural search, about 71% of respondents said they rewrite descriptions, such as revising e-commerce site copy to better reflect keywords, on the home and product pages to boost visibility in search results. Other top tactics included increasing the use of header tags in content in home and product pages, improving site navigation and making better use of web analytics.

Using analytics to boost natural search results promises to become more challenging in coming months because in September Google announced that it will encrypt all searches conducted on its search engine. Encryption will make it more difficult for online marketers and retailers to track the effectiveness of keywords in organic search because retailers and marketers will know a consumer came to a site via Google but will not have broader analytical information about individual queries. Instead, they will receive a list of the top 1,000 search queries that drove traffic to their sites for each of the past 30 days, Google says. Google began encrypting search term data for consumers who are signed into a Google account when they conduct searches in 2011. At the time, Google said the move was intended to protect consumers' privacy. "We added SSL encryption for our signed-in search users in 2011, as well as searches from the Chrome omnibox earlier this year," a Google spokesman says. "We're now working to bring this extra protection to more users who are not signed in."

Online marketers and retailers will certainly notice the change, and may end up diverting more of their budgets to paid search, which will provide more details about how consumers get to e-commerce sites and buy, experts say. "Losing Google's keyword-level reporting will have a significant impact on how organic search performance is tracked, optimized and analyzed," says Ryan Mayberry, SEO director for search engine marketing firm iProspect, a unit of global marketing firm Aegis Media.

Like some other search marketing vendors, iProspect encourages marketers and retailers to adjust to the change by better integrating organic search keyword data—for instance, how often visitors who search for a specific term interact with an e-commerce site—with data from paid search campaigns and other search engines, along with historical comparative keyword and conversion data.

Another change in search marketing could be felt by retailers this year—though perhaps not as badly as some would fear. Google recently updated its search algorithm to emphasize a search's context so that consumers searching, say, for a "cheap hotel" would be more likely to find affordable hotels than ones of low quality, according to search experts. Google, which often names its algorithm updates after animals, dubbed this version Hummingbird. The good news is that retailers that have yet to experience a drop-off in search traffic since Hummingbird's official debut this fall are unlikely to suffer much from the change, those experts add.

That said, Hummingbird, which reflects the changing ways in which online consumers search, will certainly require retailers to keep updating their e-commerce sites. "This rollout seems to target mobile searchers, since these are the users that are least likely to do multiple 'refinement' searches," says Steve King, director of product strategy marketing for marketing services provider SIM Partners. "Google has a lot of historical information, but as new items or events change the context of searches, the algorithm will change accordingly."




Bing, Google, natural search, November 2013 Magazine, paid search, Product Listing Ads, search keywords, site content