Search Marketing and Christmas Commerce
by Charles Sardou, icrossing AZ
December 19, 2005

As an ex-retail buyer, Black Friday, White Monday and the Christmas shopping season brings back vivid retail memories. The Christmas of ‘87 still haunts me to this day. The Broadway Department Stores had just introduced Black Christmas boxes. I was the poor guy behind the wrap desk trying to convince the horrified pack of stressed shoppers that black Christmas boxes were not the work of Satan.

As the Paid Search Director for iCrossing, I am often asked what elements are needed for a search marketing campaign to be effective. My best answer remains “the same things you need to do to be an effective merchant”. (This includes offering more traditional Christmas Boxes or avoiding One Day Sales every day of the week). The performance of a search marketing campaign is inherently linked with the customer’s perception of the retailer itself. Successful retailers are not only efficient in their operations but innovative in terms of marketing and merchandising.

Paid Search marketing is such an innovation. By focusing marketing spend only where the customer has already shown interest in the product or service - the marketing process is inherently more efficient. (Reverse Direct Marketing) Unfortunately a search campaign by itself is not going to make a retailer more effective. Search campaigns add the most value when the following online commerce fundamentals are being executed:


Commerce Model
Seems somewhat obvious - but a large number of online companies still subscribe to the popular .com theory of losing a little on every sale but making it up on volume. Today companies that are growing online – are making money online. Unless you have a very healthy retention rate and LTV; paying 50 cents for a customer that nets 10 cents is always going to be a losing proposition.

Brand Awareness
Brand has a huge effect on the effectiveness of a search campaign. A company with a known brand is more likely to be clicked and is much more likely to get the sale compared to a company with little or no brand awareness. Paid Search can also be used to monitor the effects of marketing events.

Paid and Natural Search
There seems to be some confusion as to whether companies should budget money on natural or paid search. The short answer is that any retailer who wants to dominate online channel needs to be participating in both in a coordinated fashion.
- Paid search allows for conversion testing to inform and improve the effectiveness of a natural search build-out.
- Natural search is needed to allow visibility on expensive high volume terms
Used together companies can deliver a larger number of qualified customers to a site or store.

Landing Page / Shopping Environment
Back in my retail days we spent a lot effort devising “race tracks” to best guide our customers through the store and to the cash register. You can imagine management’s horror when they scientifically tested traffic and found the vast majority of our visitors were using the store as a cut through to the mall. Many online stores are the same way. If the site does not do its job and convert visitors to shoppers to buyers additional search traffic is not going to lead to greater sales. Ideally all search traffic:
- Land on pages that are as relevant as possible to the search query
- Receives a consistent message on the search ad and the landing page
- Encourages the visitor towards taking action and making the purchase

Merchandising
Timing and speed to market is everything in retail. Had the Broadway brought out black boxes in 1991 they would have been a big fashion hit instead of a holiday nightmare. The difference between what works and what does not work can just be a matter of seasonality.

Inventory
I wonder how many online retailers this year are paying for iPod terms when they don’t have any inventory. Apple seems to be faring very well selling the new units directly at the expense of its channel partners who are doing all the promotion for them. The online retail market is even more fickle than the offline one. If you don’t have what your customer is looking for the next shop is just a click away.

CRM
Once you have paid for a new customer it is vital that you keep that customer over the long run. It is obvious that a higher customer LTV leads to a higher ROI on a search campaign. Yet many businesses do not have an effective retention system in place - forcing them to repay for traffic that should already be theirs.

Testing
One of the retail lessons I was taught back in the 80’s was “Test, Validate, and Expand”. This is also the ideal mantra for search marketing. Companies that thrive online are constantly testing new keywords creative’s, and landing pages. Search is not just an effective form of marketing but a real time marketing test environment that allows the marketer to see exactly what messages the customer responds to.

Had there been an internet back in 1987-the Broadway could have tested customer demand for black boxes through search ads...and avoided the mistake that ruined my Christmas season.
- posted by SEM-SEO PRO @ 1:25 PM