Survey Finds Merchants Bullish on Pay-Per-Click Marketing
Pay-per-click marketing has come of age with more merchants looking to improve performance, optimize results and extend into new areas of PPC.
These were key findings from the second annual NetElixir/the e-tailing group Pay-Per-Click E-tailer Stress Study, released earlier this year. NetElixir manages pay-per-click search marketing campaigns. The e-tailing group offers marketing and merchandising consulting services to multichannel merchants and enabling technology firms.
In October, 137 e-commerce executives completed an online survey that included a variety of questions about their PPC campaigns. The survey revealed that 65 percent have been investing in PPC for three years or more, and 37 percent for more than five years.
While almost one-third of respondents (31 percent) report that 1 percent to 10 percent of orders now come to their sites as a result of PPC initiatives, more than one-half (56 percent) are seeing between 11 percent to 40 percent of orders as a result of these efforts.
Commensurately, budgets to advertise and manage PPC are increasing, with 50 percent of those surveyed, vs. 44 percent last year, allocating more than 20 percent of their total advertising budgets to PPC campaigns.
For 87 percent of the survey group, overall PPC budgets are planned to increase in 2008 with almost one-third (30 percent) planning increases of 26 percent or more.
The number of keywords being managed also continues to rise, with 47 percent currently managing more than 5,000 keywords and 22 percent more than 20,000. In part, this is a result of testing longer keyword phrases to reduce costs by getting incremental value from the "long tail."
Asked to rank top strategic PPC priorities for 2008 from one to 10, respondents ranked tactical factors the highest based on a "top 3" analysis, lead by ROI (75 percent) and cost containment (56 percent).
Tactical, bottom-line, direct marketing measurements also were the most prevalent relative to how merchants calculate PPC campaign success. ROI maintained its position as the primary measurement for 79 percent of respondents. Of note was the increased focus on the number of conversions -- up to 68 percent this year versus 53 percent last year.
Although still in the early stages, merchants are beginning to extend PPC measurements for targeting visitor value (15 percent), cross-channel (10 percent) and branding (6 percent) purposes.
The survey also revealed that staffing for PPC still is an issue. Sixty percent of those surveyed handle their PPC campaigns in-house, and the overwhelming majority (96 percent) do so with three people or fewer. Where appropriate, the other 40 percent are outsourcing to ease the burden.
Time spent on PPC programs is affected by the amount being handled in-house vs. outsourced, which is evident in the finding that those spending 21 hours or more on the task has dropped to 28 percent from 33 percent last year.
Merchants are positively inclined toward outsourcing, although cost, control issues and management directives continue to influence keeping PPC in-house. The latter two of these factors accounted for 59 percent of their rationale vs. 38 percent last year. Conversely "easier to do ourselves" was only reported by 45 percent, down from 63 percent. Dissatisfaction levels dropped as well -- to 25 percent from 33 percent in 2006.
Finally, the survey found that PPC management satisfaction in-house is constant while sanctioning of outsourcing has grown, with 25 percent currently very satisfied -- up from 19 percent in 2006.