Search Demonstrates Sales Growth

  |  June 26, 2006   |  Comments

Keyword buys are driven by seasonality, and consumer search patterns evolve from general terms to branded queries.

Search campaigns grew almost 40 percent in the past year in terms of active keywords purchased. That figure was outpaced by online sales, which experienced year-over-year growth of 70 percent. These findings are in the "50 Search Trend Report: Q1 2006" released by DoubleClick’s Performics unit.

Online sales increased 70 percent in year-over-year growth from March of 2005 to March of this year. In the same period, growth in the number of active keywords was between 30 and 40 percent, and clicks grew about 20 percent. Q1 saw a drop in overall clicks from its height in the fourth quarter shopping season. Search marketers realized their highest ROI in March than any time in the previous 15 months.

The Performics 50 covering Q4 of last year claimed it isn’t necessary for marketers to rank first with keywords. The current report finds campaign seasonality important. Holiday shoppers tend to search for more general terms that enable searches for competitive pricing.

During the holiday season, consumers search for gifts for other people and may not have a specific item or brand in mind. There was a post-holiday drop in overall cost-per-keyword (CPK) from $59 at the end of Q4 2005 to about $30 at the beginning of this year. CPK and cost-per-click (CPC) settled close to Q1 2005 averages.

"In the Q4 holiday shopping season, shoppers tended to be broader, in off-peak times, they’re doing more targeted research and [marketers” are buying more specific terms," said Stuart Frankel, president of Performics.

In general, marketers are becoming more efficient in their keyword buys. Frankel said marketers are delve deeper into their product listings and try to increase the complexity of the keyword and buy multi-term words. "Marketers go deeper into the search tail, to find words that are lower cost and certainly still relevant to drive sales for them," he said.

Keyword campaigns continue to grow, and at a faster rate than clicks. The average number of active keywords receiving at least one click or conversion per month grew 36 percent since Q1 of last year. During that period, the number of clicks rose 24 percent. The report warns "marketers could face a danger in escalating costs as they increase the number of keywords in their campaigns if they do not pay close attention to keyword costs."

The report also suggests advertisers are growing savvier. They do adjust campaigns to seasonal trends and other demands. "Seasonal spikes in consumer activity require search advertisers to quickly react to changing market conditions to avoid ineffective ad expenditures," said Frankel. "The report’s findings indicate that advertisers are increasingly cognizant of these issues and are adjusting strategies accordingly as search engine marketing continues to grow."

The Performics 50 is a representative index that monitors the growth of paid search advertising by providing a stable platform for benchmarking and analysis. It’s derived from 50 paid search campaigns that most closely represent the average number of monthly clicks across all campaigns based on the report’s timeframe. The researchers drew on almost 300 active campaigns across a wide range of industry categories and excluded the very top and very bottom ranges to come up with the sample used in the study.

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Enid Burns

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