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Search Engine Optimization Takes Backseat To Paid Search

Paid-search budgets continue to dominate media marketing investments for retailers. The U.S. companies will invest about 40% of their $7.6 million aggregate marketing budget in paid search and 14% to organic search, according to a Shop.org and Forrester Research study released Tuesday.

Some 80% of the survey participants in the "State Of Retailing Online 2013: Marketing & Merchandising" report admit they will spend more on paid search. About 71% said they will spend more on product listing ads (PLAs), 63% on remarketing and retargeting, and 55% on organic search.

Organic search now sits at No.5 on the list of growing marketing investments, coming in behind paid search and email marketing, which now rank No. 1 and No. 2, respectively, up from No. 3 and No. 4 in 2011.

While natural search optimization topped the list in 2011, retailers now find it more difficult to invest in that media and have turned toward paid search and email to help better control and direct inbound traffic to Web sites.

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While the majority of retailers surveyed said that paid search was equally or less cost effective in 2012 compared with the prior year, 68% agreed they were able to drive more revenue from paid search programs. They also agreed there is no better customer acquisition vehicle than search engine optimization in general.

When asked the effectiveness of paid search in 2012, compared with 2011, 68% of marketers said more effective, 21% said the same, and 11% said less effective. When asked the same question in terms of cost, 39% said more effective, 24% said same, and 27% said less.

Search engine marketing continues to become a stronger acquisition media. Some 75% of marketers cited search engine marketing as being the top traditional interactive marketing tool, followed by organic search at 52%, and affiliate programs at 35%, according to the Shop.org and Forrester study.

The research from Shop.org and Forrester Research confirms study findings released Monday by PM Digital that suggests a combination of factors continues to help retailers capitalize on optimizing trademark trends.

Yahoo began adding logos to trademark owners' paid-search ads, and Google launched in beta new brand term ad extensions, after integrating with site links, communication extensions, star ratings and extended headlines. These additions, along with consistent ad copy testing and optimization, led to a 20% increase in brand term click-through rates (CTRs) in Q2 2013, during the time the PM Digital study took place.

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