SEM Works With Marketers
Marketers intend to increase their search engine marketing (SEM) expenditures over the next year, equating to 8 percent growth, according to the Jupiter Research Retail Marketing report "Benchmarking to Drive Effective Search Engine Marketing." Online retail marketers' 2005 overall media budgets-an average of $518,100-exceeded those of overall online marketers by an average of just seven percent, based on a Jupiter Research survey of 636 U.S. overall search marketers and 88 U.S. retail marketers. But online retail marketers shelled out $148,900 for their 2005 SEM spending, 22 percent more than overall online marketers. A significantly lower percentage of media budgets was allocated to SEM agency and tool spending, with online marketers allotting an average of $39,600 compared to $42,500 for the online retail marketer subsegment.
Although marketers' SEM expenditures are expected to increase, there are differences in why online retail marketers (and all online marketers) opt to implement SEM. Ninety percent of online retail marketers use SEM to generate immediate online sales, compared to just 55 percent of all online marketers, the report contends. Sixty-one percent of online retail marketers implement SEM to build brand awareness, four percentage points lower than all online marketers. However, 59 percent of online retail marketers use SEM to generate leads for products sold online compared to 50 percent of all online marketers. Forty-eight percent of online retail marketers and 57 percent of online marketers deploy SEM to maintain brand exposure among competitors, according to Jupiter Research.
While SEM can have a major impact on a business's Web presence, the interest in using SEM to bolster offline presence is noticeably smaller. Just 25 percent of online retail marketers use SEM to generate leads for products sold offline, while 49 percent of all online marketers tapped SEM for its potential offline influence, according to Jupiter. Twenty-three percent of online retail marketers and 16 percent of retail marketers implement SEM to boost traffic to physical stores. But 14 percent of online retail marketers and 25 percent of all online marketers turn to SEM to bolster call center volume.
"Although tracking across channels is still difficult, retailers should recognize that consumers do use online search to help them decide what items to buy and where to buy them offline," the report states. "The lack of accurate tracking across channels likely contributes to an undervaluation of online search marketing efforts. In the coming year, retailers should begin testing language that highlights store locators, events, and inventory and setting up a set of tracking assumptions to evaluate the program."
Additional findings reveal that the majority of both online retail marketers (58 percent) and all online marketers (61 percent) surveyed have added new keywords to spur an upsurge in click volume from search engines. Forty-nine percent of online retail marketers and 42 percent of all online marketers responded that increasing bid price has proven effective to increase click volume. However, 48 percent of online retail marketers and 52 percent of all online marketers use changing ad text, and 40 percent of online retail marketers and 48 percent of all online marketers use landing page optimization. Last, the report states: "A/B testing and assessment on landing pages to ensure that visitors get information relevant the task related to their keyword will be the norm as the [cost-per-clicks] rise."
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