The Electronic Catalog: The Payoff of Paid Search Listings

By now you know that it’s not enough just to be on the Web. Once online, you also need to direct users to your Website. Some marketers are finding that paying for listings on search engines makes it more likely that shoppers will find their sites. Crutchfield, REI, Spiegel, and Banana Republic are just a few of the catalogers paying for search-engine listings.

“After e-mail, online searches are the biggest Internet activity, with more than 280 million Web searches a day in the U.S.,” says Dakota Sullivan, vice president of marketing for San Francisco-based Website directory/search engine LookSmart.

So paying for a listing on, say, Yahoo!, Google, or GoTo should be a great way to increase traffic and ultimately sales. But many of these search engines will include Websites regardless of whether the companies pay for listings. What, then, does your payment get you?

Yahoo!, for one, generally charges a one-time fee of $199 for top placement on the appropriate search response (though according to its Website, it charges adult content or service providers a whopping $600 for prominent placement). Say your catalog is XYZ Widgets; when a shopper searches for “widgets,” the link to your site will appear near the bottom of the list of widgets marketers. But ZZZ Widgets, which paid the fee, is at the top of list.

LookSmart, AltaVista, and Excite are among the other search engines that charge a flat fee for premium placement. GoTo auctions off the top spots to companies on a cost-per-click basis. Similarly, Google negotiates its cost-per-click rates with clients.

In addition to the pay-for-prominence model, there is also the pay-for-inclusion model. In that case, catalogers pay to have the search engines list actual product pages among their search findings. Search engines such as LookSmart and Inktomi charge roughly $0.15-$0.75 per click to include these pages.

Taking your pick

New York-based catalog Tracy Hamilton, which sells fund-raising merchandise to nonprofit organizations, pays to have product pages included on Inktomi. President Joseph Wolpin estimates that he spends $5-$10 per product page each month.

“We find the prominence/auction model to be too expensive,” Wolpin says. “In some auction models, I’ve seen it break out to upward of $2-$3 per click, and that’s not something we want to engage in.”

Paying for inclusion can have other costs, though. Search engines can’t always recognize and therefore list database-published product pages.

“The most substantial e-commerce sites are database-published, which means that the pages viewed by customers are being created on demand,” says Alan Rimm-Kaufman, vice president of marketing for Charlottesville, VA-based consumer electronics cataloger Crutchfield.

For example, if a customer searches on a cataloger’s Website for a particular Sony television, the site will pull the product, price information, and availability from a database, and piece the information together on a product “page.” Those “pages” don’t really exist the site is creating them on the fly, Rimm-Kaufman says, and search engines try to avoid including these pages in their search results, because the product pages consist only of coding and data.

So to convert database-published product pages into a format more easily recognizable by the engines, some companies sign on with services providers such as Maynard, MA-based Inceptor.

Inceptor sells a software license for page conversion for around $150,000 a year, says spokesperson Deb Pappas. The price makes that option more suitable for larger companies. Smaller companies can use Inceptor’s service on a monthly basis, paying “between four and five figures a month,” Pappas says. The service fee includes the payments to the search engines for placement.

The all-important ROI

General merchandise cataloger Spiegel has found that paid listings pay off. “We buy as many as a hundred different keywords from search engines,” says Vivian Marks, group marketing manager for I-media at the Downers Grove, IL-based company. “Then we work with an outside vendor to make sure that our keyword purchases guarantee us prominence in search engine listings.”

Depending on the keywords, the searches produce links to Spiegel product pages, product-category pages, or the Spiegel home page. For instance, “a keyword such as ‘dress’ or ‘shoes’ will often link to a product category,” Marks says.

“We have definitely seen increased sales as a result of our keyword purchases,” Marks says. “We look at the ROI of our keyword purchases, and we see that we are getting more targeted customers. They are actively searching for the products that we carry.”

But Crutchfield has had somewhat erratic results from paying for listings on Web search engines. “We’ve found that the quality of search engines and results varies dramatically,” Rimm-Kaufman says.

In fact, “the bulk of our Website traffic comes from our catalog,” Rimm-Kaufman adds. “In terms of overall name acquisition, paid listings are not paying off as much as the catalog.”

Did you miss a previous Electronic Catalog article?

You can find it along with other articles from past issues on the Catalog Age Website at www.CatalogAgemag.com

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