The two companies studied both panel data (from Compete's sample of more than two million Web users) and survey responses to track the relationship between search clicks across a number of retail categories and the resulting purchases. The research, which focused on shoppers that had made a purchase within 60 days of clicking on a search listing, yielded a number of key trends.

There are three types of retail searchers: purchasers that click on branded terms (or keywords like "Old Navy sweater"), those that click on non-branded terms (such as "sweater"), and a smaller group that clicks on both types of search results. "These consumers represent separate, almost exclusive types of traffic," said David Kaul, vertical business specialist at Google. "And marketers who under-invest in either type are leaving dollars on the table."

Indeed, just 12% of searchers that converted into buyers had clicked on both branded and non-branded terms. The majority (51%) of conversions stemmed from branded terms alone, while 37% came from non-branded terms. "Most companies pick one or the other," said John McAteer, Google's industry director, retail. "Very few are spending accurately on both their branded terms and the category terms, and I think this info should be surprising to them."

Matt Pace, Compete's director of retail and consumer products said that the findings contrast the closely held belief that most searchers start out with category terms, and then hone in on branded keywords as they move further down the purchase funnel. "That's typically what you see for auto searches, as shoppers learn about makes and models they're interested in," Pace said. "But with retail, it's different."

The research also found that paid clicks tended to lead to conversions at a much higher rate--in some cases about 50% better--than organic clicks. This was consistent across seven out of the eight categories they studied (including apparel, consumer electronics, office supplies, sporting goods, jewelry, home improvement and mass merchants like Target). With home furnishings, however, shoppers converted on paid and organic terms at about the same rate.

According to Jeremy Crane, Compete's director of search and online media, it's partly because paid search listings drive shoppers directly to a customized landing page or the exact product page they are looking for. "If we'd looked at this data a year ago, we might not have seen such a staggering difference," Crane said. "But retailers are getting better at understanding the power of paid search. They're setting expectations up front with the ad copy and then sending searchers to a tailored experience after they click." He added that retailers were becoming savvy with using landing page optimization platforms and services.

Google and Compete released the findings during a presentation on Thursday called "Uncovering the Value of Retail Search Clicks." The data spanned searcher behavior from March 2006 to March 2008, and responses from over 4,000 consumers surveyed in spring 2008.

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