The 5 Most Common Mistakes Made by Online Retailers in Paid Search

By Nathan Gawel, Associate Director, Client Strategy & Development

According to Forrester, U.S. online retail sales are projected to rise 11% to $156 billion in 2009. While this is a drop from the 13% growth in 2008, it still reflects upon how strong online retailing has become. Even with the economy hitting record lows, online retailers are still expecting growth. Gaining revenue through the online sales has been around for years, but retailers continue to make rookie mistakes. Below are the top 5 most common mistakes online retailers’ make in Paid Search.

1. Poor Shopping Cart Experience

If you are executing a PPC program and/or have invested money in SEO efforts and after multiple rounds of optimizations you are still not seeing the ROI…time to look in the mirror. According to a Marketing Sherpa report, almost 60% of shoppers abandoned the shopping cart sometime during the purchasing process. One of the biggest deterrents for shoppers is being forced to become a member. Including a guest checkout option can boost conversion rates and make your site more user-friendly. Also a shopping cart process that has more than 4 steps is shown to have much lower conversion rate. Shorten up the process, take out unnecessary data files and provide a guest checkout.

2. Not Monitoring Affiliates

When was the last time your affiliates were able to show you where they are gaining traffic? How about where they are gaining revenue for you? Each affiliate should be able to show you what keywords, creatives, and landing pages are working for them. It is important to ask for and receive this information to make sure they are not using black-hat techniques or other practices that do not follow your Affiliate T&C’s. Use a tracking services, such as Ad GooRoo, that can show you what ads are showing on your terms. Look into the destination URLs to see if they are your own ads or if an Affiliate is copying your ads and using them. If they are using the same display URL as you, they will prevent you from showing as the Engines only allow one ad to show at a time with the same display URL. You might be surprised to find your affiliates using your ads, and redirecting traffic directly to your site. Not only are they stealing traffic from you, but you may be paying out a much higher percentage to them then you are anywhere else.

3. Using Paid Search for Direct Response Only

In a recent study of 1,200 marketing executives, by Marketing Sherpa, found that 50% of the participants preferred PPC programs for ROI reasons. While it is easy to argue why to use Paid Search for Direct Response, it is not as easy to argue why to use Paid for other reasons, such as branding efforts, driving offline sales, as a research tool, geo-targeting messaging, etc. The key to running a successful Non-Direct Campaign is to understand what the goals will be and what the benchmark numbers are. Also, make sure you have all the appropriate tracking set up. For example, what would be important in a branding campaign? Can you benchmark and optimize for ‘Time on Site’, ‘Pages Viewed’, ‘Video Downloads’, or more commonly used ‘bounce rates’.

4. Giving Paid Search the Budget Leftovers

Why would one of the most profitable mediums get last pick at the budget? While more common within multi-channel agencies, in-house programs make this mistake as well. Often when media budgets are determined, TV, print, other online and OOH channels get their cut first. Paid Search is often left with the leftovers. I highly recommend getting a Point of Diminishing Spend Estimate from your team, agency, or partner. You might currently be spending less than 50% of your potential in search at your current ROI. On the same note, do not blindly give a 100% spend increase to your paid search program. Often times the highest returning areas are at full tilt and the extra spending will go into areas that do not return as well and could lower your overall ROI. Overall, see what areas are returning and build out budgets with a strategy supporting the ROI.

5. Not Tracking Across Channels

Do you have your display campaign tracking in DFA and your paid search program tracking through Omniture SearchCenter (or a similar scenario)? While each system has its benefits, running with different vendors has a big disadvantage…known as double counting. Let’s say someone viewed one of your display ads and clicked thru last week, but were not ready to make a purchase. They then came back this week and searched for your service in Google and then made a purchase. DFA will still credit the display ad for the revenue, while Search Center will credit your paid search program. You either must investigate what the “cross-over” looks like and account for that every week or devise a way to track display and paid search on a single program. You may still choose to track each online effort in with different tools because of their individual benefits, which is fine, just be sure to track them as one somewhere within your efforts to have access to the “true” value.

Online retailing will continue to be one of the leaders in ROI, as well as one medium that should increase in budgets over the next couple of years. Make sure before you begin to put money into Paid Search you avoid the mistakes above.


CJeffCampbell said...

Great post, Nate. As a solution to #5, all online media should be tagged with campaign codes from the web analytics tool. Not only would it de-dupe, it would also use the same cookie length, tags, report metrics, etc.

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