Online Marketers Can Expect Big Numbers This Holiday Season Performics 50 Predicts Growth of 53% for Online Sales Over Last Year
Friday, 29 September 2006
Growth in search engine marketing continues unabated, with year-over-year conversions, search spend, and impressions displaying increases of nearly 50%; active keywords have grown by a robust 58% and total clicks by 32%. The Performics 50, a representative index of well-managed paid search campaigns designed to monitor the growth of paid search advertising, indicates much of this growth is due to online marketers’ increased knowledge and sophistication of search engine marketing.
The Performics 50 forecasts that sales during the forth quarter will surpass last year’s sales by 53%. As a general rule, marketers can expect to see Q4 activity equal to the sum of Q1 and Q2 activity. In other words, sales during the fourth quarter of this year, which includes the busy holiday shopping season, are likely to equal the combined sales of the first half of ‘06 (Q1 and Q2). The same holds true for budgeting and marketing costs.
“Online marketing is passing over a huge hurdle,” said Cam Balzer, director of search strategy at Performics. “Experienced SEMs and program managers are harnessing the full value of search and realizing that maintaining an aggressively managed campaign online—one that drives online sales, offline sales, increases brand awareness and maximizes your search budget—is critical to overall marketing success. This potentially means big business for the final quarter of 2006 and the upcoming holiday season.”
The Performics 50 identified an increase in competition for higher-priced and more popular keywords in the last quarter as well as marketers mining the ‘long tail’ of key terms to balance out their keyword portfolios. This type of program management led to a relatively stable cost per keyword (CPK) environment, increasing only $.14, or less than 0.5%, from first quarter averages, and demonstrates online marketers’ aptitude for mounting, targeting and maintaining complex search engine campaigns.
Marketers can analyze and combine their first and second quarter budgets in order to determine their likely spend for all of the fourth quarter. Additionally, October is the optimal time to detect and correct any campaign variances in order to capitalize on the holiday rush. Intervention at this time can prevent substantial loss and improve November and December revenue.