Searching for Holiday Profits

Are you searching for holiday profits? Join the e-club.

Countless thousands of online retailers are competing in what analysts call a “zero sum game” where only one vendor can win the sale. However, take heart. There are plenty of sales to go around.

EMarketer predicts online retail sales will reach more than US$22.34 billion in the fourth quarter, up 27.6 percent from last year’s tally. Analysts said one way for online retailers to ensure they get a fair slice of the revenue pie is to be savvy search engine marketers.

Indeed, whether you are Amazon.com or Joe’s Books, search engine marketing helps to level the online playing field with paid-search listings that go to the highest bidder. Research shows that the highest bidder wins more than the top listing.

A study by Web consultancy Link2City reveals that 33 percent of Internet users believe companies found in the top search results must be a major brand, demonstrating that top search engine listings transmit brand equity.

“Search is a critical part of the buying process,” Gartner analyst AdamSarner told the E-Commerce Times. “Those e-tailers that understand the value of the search engine will be winners this holiday season.”

Timing Your Search Strategy

Of course, it’s not all about being to top listing. Timing also plays a keyrole in the sales process.

“When you capture the consumer at the point of search, it is generally abetter conversion rate,” Trevor Healy, VeriSign’s vice president ofpayments, told the E-Commerce Times. “E-tailers need to be very aware of the peak shopping periods as they add their new paid-search keywords.”

To Healy’s point, online retailing researchers are narrowing the field for merchants who depend heavily on search engine marketing to drive sales. The Atlas Institute, for one, is demonstrating some clear holiday shopping trends that directly impact the timing of paid-search entries.

For example, online shopping peaked at the beginning of December three years ago, as customers were weary of items not arriving due to shipping delays. Then, two years ago, online shopping peaked 14 days before Christmas.

Last year, the story changed again. Online shopping peaked 10 days before Christmas, but remained strong only seven days before Christmas.

Further, Atlas research shows that unlike the brick-and-mortar world, where shopping reaches its peak on Saturdays and Sundays, Mondays are actually the biggest online shopping days.

This seems to indicate that customers who shop offline during the weekend then go online for comparison or bargain shopping. Fridays — traditionally a weak day for online shopping — are also stronger than usual during the holidays.

However, Atlas drills it down even deeper, revealing that online shopping activity peaks between noon and 3 p.m. EST. That’s why the company recommends e-tailers take advantage of the ability to purchase day-part placements on paid-search campaigns to target online shoppers in the middle of the workday and find publisher sites with a high concentration of the at-work audience.

Finally, in light of its latest research, Atlas predicts the busiest shopping day of 2004 will occur during the week of December 13, possibly at the end of that week.

Apples with Apples

Beyond top listing and timing, there is yet another factor in the perfectstorm that is forming around search engine marketing this holiday season.

Online comparison shopping sites like Bizrate.com, Shopping.com andMySimon.com throw a wrinkle into the equation as many also now offer paid placements.

The latest arrival in this all-important holiday shopping segment isShopzilla.com, a shopping search engine that aggregates and organizes more than 25 million products from more than 45,000 stores.

Bizrate has adopted the Shopzilla.com brand name to better position itself as a broad-based shopping site. The site also boasts patent-pending shopping search technology that simultaneously weighs multiple factors, including contextual relevance, price, availability, store ratings and popularity.

Shopzilla even automatically corrects spelling mistakes, understands weights and measures, and intelligently corrects brand names for the right products.

“We set out to build a platform that could scale orders of magnitude beyond today’s best technologies in order to handle the unique demands of indexing, organizing and searching all the world’s products and stores.” said Farhad Mohit, chief product officer of Shopzilla.

“We have six patents pending on our innovations and are excited aboutcontinuing to push the envelope of shopping search for our users,” Mohit said.

New Venues, New Customers

Meanwhile, new search companies and new search tools from some veteran companies are giving consumers and merchants new options this year, according to analysts.

“We’ve had a growth in new shopping search engines or awareness of such tools,” Danny Sullivan, editor of SearchEngineWatch.com, told the E-Commerce Times. “Google, for example, has put its Froogle shopping results as something highlighted when relevant. Yahoo’s also made massive changes.”

A new player called Info.com has also emerged in time for the holidays. It displays results from 14 leading search engines while also includinginformation from content providers like Shopping.com, MapQuest and eBay. Info.com distinctly separates its millions of free and 250,000 paid-listings in side-by-side columns on each result page.

What does all this mean for the holiday season? Analysts said itdemonstrates that consumers and e-tailers alike are well aware of how vital search is to buying and selling products online.

“We’re seeing e-tailers become more aware that they need to consider how they are listed in these specialized tools, rather than the general focus they often have on how they show up in ordinary Web search results,” Sullivan said.

Let Vendors Speak

Wine.com is aggressively partnering with all the major portals this holiday season, shelling out the bucks for paid placement and advertising campaigns in Yahoo, MSN, AOL and Google.

“We have specific campaigns set up with specific tracking codes so we can find out exactly which key words are working, which products are converting and where we need to make changes,” Wine.com general manager Jay Shaffer told the E-Commerce Times.

Meanwhile, eBags.com is leveraging the search terms on its own Web site to accurately buy new terms on Google and Overture.

“We continue to build our search engine relationships because it’s a keystrategy,” Chris Seahorn, director of business development for eBags, told the E-Commerce Times. “Because we are now managing so many new sites, we are looking into a lot more automated systems instead of trying to use resources internally to manage those buys.”

Even the little guys are tapping into search as a big marketing tool. EricLituchy, principal of DelightfulDeliveries.com, told the E-Commerce Times that search engine marketing is critical to his sales.

“Search engines is how people find us,” he said. “Search engine marketing gives us the best conversion rates. It is expensive, but the beauty of it is you can track it all and find out what works and what doesn’t work and optimize it.”

Warring To Win

Many online retailers will tweak their keywords for the holiday season,according to Rob Wilk, director of search engine marketing at AvenueA/Razorfish Search, by adding “holiday” or “Christmas” to their normal offering. However, Wilk told the E-Commerce Times that vendors should beware of those terms because they get a lot of volume and don’t convert well.

“Be ready for fads,” Wilk said. “Can you say, ‘Tickle me Elmo?’ If you have any holiday toy or gift that gets hot, make sure you have all of the right keywords, copy and budget to take advantage of fad type products. Watching search volume grow is the best indicator of consumer interest.”

Kevin Lee, CEO of Did-It, a search engine marketing firm in Rockville Centre, New York, with clients that include top search portals, online travel companies and hundreds of online retailers, told the E-Commerce Times that several factors are converging in search this year.

First, he said, the search volumes dramatically rise as consumers flock to the Web to shop. He predicts searches for particular items could more than double. Second, conversion rates for traffic also tend to increase during the holidays because browsers become buyers with a purpose. Those first two factors lead to volatility in paid-listing prices.

The solution to the equation is balancing ROI on those search terms.Overaggressive vendors, he said, won’t get the return on the keywordinvestment, but under-spending could be just as detrimental to the bigpicture. Lee said for those e-tailers that do search well, it’s going to bea great year. However, for those who don’t, it could be a disappointing season.

“It’s what they call a zero sum game, which means there is really only one winner,” Lee said. “Only one person is going to sell the merchandise. Everybody else loses. It’s halfway between a game and halfway between a war. Retailers have to war to win that game.”