Search Engine Sales Going Down...

[Elesha]

I have been advertising on adwords, adcenter and Yahoo search for the past three years rapidly growing the sales of our company. I was having great success and was able to double sales every year up until this year. 2008 so far has been horrible with a negative sales growth over last year. This is consistent with all the search engines. Has anyone else seen similar results? Is it the economy at large right now?

[abbottsys]

I would imagine it's the economy at large, but it's an uneven effect. We're in elective healthcare and so far 2008 has been fine. What industry are you in?

[Elesha]

Thank you for your reply. I am in the Retail Industry...we sell costumes and party supplies.

[EngineReady]

I've seen the same effect on some of the retailers I manage, especially non-essential. Jan '08 over Jan '07 shows negative growth for the first time in years (actually, first time ever for some accounts since 2003!). Feb over Feb is looking even more negative for these retailers if I extraoplate the first 11 days into the rest of the month. It was interesting to read your post and hear someone else acknowledging the same.

[Kevin Heisler]

Elesha, I've been hearing the same from a number of retailers. Your business must be highly seasonal. Is February / Valentines Day usually a peak sales date for Q1? (Luxury retailers have been hit hard; even Coach took a hit last quarter.)

“Halloween costumes” is always in the top 10 keyword search terms on all four search engines in October.

There's also the possibility of more competition as dollars flow into online advertising and search. Plus, stores like The Children's Place have launched costumes for Halloween. Their top execs even discussed it last year before the holidays.

[abbottsys]

Originally Posted by Elesha

Thank you for your reply. I am in the Retail Industry...we sell costumes and party supplies.

Yes, retail is feeling pain as consumer spending stalls. It will be interesting to see at what point retailers pull their ad dollars.

[Elesha]

Yes, we are highly seasonable. Valentines Day, Mardi Gras and even Easter are popular in February. (Easter this year since it's so early.) It is interesting to hear luxury retailers are being hit hard, but not too surprising. I'm willing to bet after consumers become more comfortable with the new president after election this may change. However, I hope this theory is wrong because that's almost a year away!

More competition is very possible because the traffic has almost tripled since last year via our paid search program, but the conversions are just not where they should be.

[abbottsys]

Originally Posted by Elesha

....
More competition is very possible because the traffic has almost tripled since last year via our paid search program, but the conversions are just not where they should be.

Interesting, traffic up but conversions down. This could indicate heavy price comparison activity i.e. folks spending more time shopping around for the best price. I don't know how you're bidding, but try bidding down, so your ads are ranked in the lower half of the right side.

[Mel66]

You should also review your landing page and web site in general to make sure there aren't any barriers to conversion. Continuous improvement is important to continued success!

[Discovery]

I agree with Abottsys and Mel,

I believe for online retailers the customers are still there and traffic will grow even in tough economic times. The Internet is the best way to find the best price. However, just as physical stores need to resort to new strategies in down times so too will online retailers.

Brand recognition (trust), incentives (Price) and highly visible on comparison shopping sites (location) are the keys.

It is true that discretionary spending will be down, so your overall profits may decline. The question is as your competition goes under, or pulls out of SEM can you maintain your profits with higher volume and lower margins? Remember in business and investing its not how well you do in good times, its how well you can hold on in down times.


Discovery

[abbottsys]

Originally Posted by Discovery

....Remember in business and investing its not how well you do in good times, its how well you can hold on in down times. Discovery

Excellent point. Reconfigure your adwords campaigns so you can stay in the game. The winners are going to be those who can hang in, because once you pull advertising the downward spiral happens fast.

For example, if you've been bidding high to get that top position try bidding down and leave the expensive top spots to others who will probably run into trouble and bail.

Advertising is like the lottery, "you gotta be in it to win it".

[Elesha]

Yes, I curently make decisions for Paid search on a ROI model and not the "bid for a particular position" model. After attending SES conferences and experience, the bidding for position way has just proved to fail. The only hiccup I have on the ROI model is when my campaigns are not consistent, meaning that one day it might perform very well, and the next day just horrible. I find this bizarre. Our Brand Recognition is definetely there, our prices are competitive and we are currently on the shopping comparison engines. My coworker handles uploading the feeds to these engines so I'm not too familiar with how they work, but it was under my impression that you cannot make yourself highly visible and the engine selects where it puts your products.

Thank you!

[abbottsys]

Originally Posted by Elesha

.... The only hiccup I have on the ROI model is when my campaigns are not consistent, meaning that one day it might perform very well, and the next day just horrible. I find this bizarre....

Interesting. Does this happen on the Content Network, on the Search Network, or on both?

[Elesha]

On the search network. One of my campaigns in particular is an every other day thing. So for example, Monday, Wednesday and Friday's sales will be great, and Tuesday and Thursday's just horrible. It's almost like people shop one day and then come back to buy the next.

[Ryan L]

what does adcenter labs tool say about the buying intentions on the keywords in that particular campaign...are their intentions noticeably different. (don't put too much stock in this tool)


I think you are feeling the perfect storm.

The entire markets (internet sales)growth has decelerated -still growing, just not as fast (Bellweather:Ebay)

Your market segment (online costumes) has matured- more competition

The Economy is slowing- decreased discretionary purchases

Ditto what everyone is saying about weathering the storm...the folks without ROI data will hopefully burn through their cashflow and expire...leaving you with a bigger share of the pie.

Tons are in this same position...it will be interesting to see how it all shakes out.

[Elesha]

Thanks Ryan,

Is the adcenter lab tool displaying the wrong year? It's showing 2006 and 2007, seems like it should be on 2007 - 2008. I just want to make sure I'm reading this correct...

http://adlab.msn.com/ForecastV2/KeywordTrendsWeb.aspx

[Ryan L]

sorry I was referring to the online commercial intention tool

http://adlab.msn.com/OCI/OCI.aspx