Pay-Per-Click: How Was Your Holiday?
Posted in Search Engine Marketing
I’m curious to know if Shop.org retailers were pleased or disappointed with their search campaigns over the holidays.
Some folks weren’t: Ice.com, for example, publicly shared their disappointment with their PPC conversion (see “Ice.com CEO Disses Google, Yahoo; Suggests Cut In Online Ad Spend“).
“They [Google and Yahoo] both proved to be extremely poor marketing tools for ICE.com and many of our retail friends. This was most evident during this most crucial time of the year, the holiday shopping season. Traffic from these portals were up cpc’s (cost per ad click) were up but conversions were way down.” — Shmuel Gniwisch
Hearing this, we analyzed our client’s holiday results as a group several different ways.
At least for our clients, search typically performed extremely well over the 2006 holiday period.
We found 86% of our clients enjoyed strong conversion increases, averaging 40% positive bumps in sales per click. (Data on our blog: “Was Holiday 2006 Good To Pay-Per-Click Advertisers?“) We looked across our clients another way, and found they typically enjoyed strong increases in click volume, click cost, click conversion, and (most important) click profitability. (See “Holiday 2006 PPC Clicks: High Traffic, High Conversion, High Profitability“).
Feels almost too obvious to blog that online conversion soared at the holidays — like blogging that the sky is blue.
So, let me toss it out to the shop.org blog readers:
How were your search results over the holiday?
With or without sharing numbers, did the search channel over- or under-perform for you?
– Alan
Technorati Tags: Search Engine Marketing
Very interesting to see this post, as I had not see the ICE.com comments before - and we were just today digging deep to analyze results from a major retail client of ours where we also saw a holiday conversion dip. Hope others chime in with their experiences.
I wanted to make sure that the marketers on this blog don’t think we have lost our minds here.
My take on this whole thing is that people have not learned from the early mistakes of the internet and history repeats itself.
In late 1999 and early 2000 most ecommerce companies including ice.com spent ridiculous money on CPM’s to just get eyeballs and build our brands. That changed quickly when the funding dried up and we were forced to get smart and look at ROI’s.
Google and GOTO(overture-yahoo) were just breaking into society and the ROI minded companies started using this great vehicle to nuild our businesses. The key was that every click could be measured in real time and you could change on a dime.
What has happened lately(2005-2006) is that the big brands have been convinced(by big agencies) that this ROI model marketing vehicle should be used for branding(eyeballs) and they have started pouring stupid money into Google and Yahoo.
That changed the whole landscape.
Just my two cents.
Shmuel Gniwisch
CEO
www.ice.com
www.diamond.com
I think Shmuel is on the right track here. I am of the opinion that the effectiveness of paid search programs has not changed in terms of generating traffic and converting browsers to buyers. I would submit that both conversion rates and overall traffic are up significantly in recent years. But the economic dynamics have changed greatly as competition has bid up pricing.
To be fair, the click costs we once paid to GOTO were ridiculously low. It made the direct response ROI fabulous. As the volume of search traffic has grown dramatically over the last seven years, this nice ROI has invited everyone to make search marketing part of their overall marketing mix, and caused prices to soar.
Based on the prices now, I wonder, is this medium really a good “branding” tool and should be priced as such and used in our marketing mix in that manner? or will the big spenders finally feel the ROI pinch and swing the pricing pendulum back towards that we are familiar with in direct response channels?
I have to admit that this holiday season turned out to be a completely different game for us than previous ones. Our main jewelry client had mixed results that were based mainly on geographic locations. He has the benefit of dealing internationally and although our margins in the USA were eaten up for the most part by the PPC campaigns, his international campaigns showed big rises in sales and ROI. I think Mike is right in saying that competition is the main factor that drove up CPC and hence drove down ROI.
It will be interesting how the Valentines season will shape up.