Learning From Google & Monetizing Your Site

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Editor’s Note: The gist of John’s point is basically that online retailers can get more money out of their sites by incorporating paid search advertising into them – Doing as Google Does. What are your thoughts on this concept? 
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Consumers Are Going Online

 

First we talked about how the current economic situation is driving more consumers online as opposed to in-store. Federman cited an AdAge piece stating that Web sales were growing at five times the rate of brick and mortar stores, a trend that the economy will no doubt fuel further. “The Web represents an unprecedented choice for today’s consumer – a broader spectrum of product options, features and prices to compare than physical stores offer,” says Federman. “The sheer time savings, and the saved transportation cost make the Web an increasingly preferred venue in which consumers are shopping.”

 

“From the retailer side, the economy is clearly causing brick and mortar chains to evaluate the profitability of every store, and close those that are under-performing,” he continues. “It’s hit everyone from Best Buy whose Web growth outpaced in-store sales to Starbucks. For the consumer, fewer stores is another driver to the Web.”

 

The Scramble for Advertising Opportunities

 

The next subject Federman talked about was how Google’s dominance has left marketers scrambling to find new opportunities to advertise.

 

“Google has done an excellent job helping the 80+% of buyers who start the purchase online (Pew Internet & American Life Project, 2008) identify which retailers are selling which product and driving traffic to the retailer’s Web sites,” Federman explains. “For marketers, implicit in the Google model is the skyrocketing costs for keywords – it’s more challenging than ever for them to make any sort of brand impact.”

 

But What About the Flood of Content?

 

Add to that the ever-increasing amount of content being uploaded to the web (with user generated content playing a big role) is having a negative effect on online advertising, perhaps even more so than the economy.

 

“Consumers are hungry for information,” Federman notes. “In fact, 64% of them use multiple sources for information, and visit 2.5 sites in the purchase process (JupiterResearch). What will emerge from the plethora of content is a sort of user loyalty that will result in consumers using more information from fewer, but more trusted sources. That loyalty may be driven by the site that provides the most accurate recommendations, superior customer service or the best promotions based on their personal hot buttons.”

 

Learing from Google

 

“What we know from Google is that marketers find paid search to be effective – it’s a pay for performance model and highly measurable ROIs are more easily justified than CPM based offerings and mass media,” adds Federman. “But Google only gets you so far, what do you do with your brand once you’ve arrived at the online storefront?”

 

He then referenced JupiterResearch again indicating that for the first time, the retail sites have become the source for online research, overtaking search engines.

 

“Taking the learnings from Google, and applying them to site-side search is a huge opportunity for marketers,” he says, citing an example from his own Searchandise Commerce. “Marketers place cost-per-click bids by brand, SKU or category to elevate their placement in on-site search results. Knowing that 80% of buyers start their search online, and that over 70% of clicks occur in the top 10 search results, attaining premium placement is an innovative way to engage prospects at the point of purchase while displacing competitive offerings. The service addresses that last mile of search that Google does not address.”

 

Federman has some interesting ideas about building trust and loyalty. Searchandise’s site drives the point home itself, “Retailers are looking for innovative ways to merchandise, monetize and maximize virtual shelf space, the same way end-caps and other displays are used in-store. It’s all about engaging the prospect at point of purchase.”

 

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