Category Archives: Paid Search

Online retail in June continued to see healthy growth despite another consumer confidence dip and more mixed signals from brick-and-mortar retail (though gas prices did improve some).  PM Digital’s June 2011 Rewind Index, which measures monthly U.S. paid search performance for online retail clients, shows that June revenue from paid search campaigns was up 16% year-over-year on a comparatively modest 2% spend increase.  Conversion rates for paid search again saw double-digit growth, rising an impressive 24%, and this strong conversion was the biggest factor behind revenue growth in June, though increasing average orders (+5%) also helped. Rewind’s monthly paid search clicks index registered a -4% dip for June which, given the higher conversion rates, indicates that retailers on average saw their paid search ad dollars become more efficient during the past month with fewer non-converting clicks, though performance naturally varies by advertiser.

Revenue and orders were slightly higher in the first half of June, though all performance metrics adhered to a weekly rise-and-fall pattern, with regular peaks at the start of each week and dips on weekends.  The best overall day was Mon 6/13, partially driven by Father’s Day promotions but also summer sales making room for back-to-school and fall merchandise.

YoY Performance Metrics for June 2011

June 2011 Top Sales Day: Mon 6/13

Other Key Days (in descending order):

Orders: Wed 6/15, Thu 6/9
Revenue: Mon 6/6, Tues 6/7, Wed 6/15

Paid search revenue and order volume for June 2011 peaked on Mon 6/13, making it the top overall sales day for the month.  The second-best day for orders was Wed 6/15, while the next-best revenue day came on Mon 6/6.  All of the best days coming in the first half of the month suggests that Father’s Day, which fell on Sun 6/19 this year, drove at least some sales.

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For multi-channel marketers, how revenue is attributed to online marketing campaigns can have a profound effect on budgeting and source allocation.  Direct mail matchbacks and clicks to bricks studies (for those who can afford the latter) have provided direction on how to allocate offline to online and/or online to offline revenue.  Most of these studies are periodic (some weekly, monthly, or quarterly), and the output defines the business rule for how the revenue will be attributed until the next study overrides it, and so forth.  Essentially, the findings keep validating and/or overriding the one before it.  After years of debating how to properly establish business rules, there is consensus that no cookie cutter model exists that can be applied across the board.  The myriad of tactics a marketer employs offline and online, combined with the particulars about what the company sells, require a unique set of rules for everyone.

Solely relying on matchbacks and clicks to bricks studies to determine how to best attribute revenue no longer cuts it for many reasons.  Among them:  1)  Paid search media spends are too big to rely on loose rules;  2)  Non-brand paid search cpcs have risen so high that they are close to knocking a lot of marketers out of the category altogether unless the math can be looked at more deeply;  3)  A proliferation of more affordable and better performing display media now exists for direct response advertisers if we can just get the numbers to work;  4)  While analytics still aren’t where we’d like them to be, there have been some fantastic evolutions to facilitate more sophisticated attribution of revenue.  Some examples of this are ClearSaleing, Google’s Big Funnel Beta, and bid management systems, many of which can now accommodate different attribution rules and models.

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Higher gas prices and a dip in consumer confidence in May were blamed for the mixed sales reports from brick-and-mortar retailers, but online retailers continue to buck the trend by outperforming the retail sector overall.  PM Digital’s May 2011 Rewind Index, which measures monthly U.S. paid search performance for online retail clients, shows that May revenue from paid search campaigns was up 21% year-over-year.  Conversion rates, which have been rising steadily for several months, improved by 27% in May and boosted paid search revenue despite the fact that clicks basically held their own, with only a modest 1% uptick.  This levelness in clicks also meant that an increase in May CPCs translated into a parallel increase in overall paid search spend–both metrics grew 14%.  May’s best day was Memorial Day, Mon 5/30, when sales were at their highest.  Smaller peaks occurred mid-month and in early May.

YoY Performance Metrics for May  2011

May 2011 Top Sales Days (Revenue & Orders):  Mon 5/30 (Memorial Day), Sun 5/15, Tues 5/17, Mon 5/16

Memorial Day, Mon 5/30, was the top sales day for May 2011.  Paid search revenue and order volume both peaked on this traditionally strong day for consumer offers and start-of-summer sales.  A second smaller peak in sales came mid-month, and a modest third one occurred over the first three days, possibly related to last-minute shopping for Mother’s Day.

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Paid search spend in April was up 27% year-over-year and generated revenue growth of 33% for this channel, according to PM Digital’s April 2011 Rewind Index, which measures monthly U.S. paid search performance for online retail clients.  Clicks were up 9%, and average conversion rate continues to be one of the strongest growth metrics with a 33% increase.  For the second consecutive month, average orders were 4% larger than a year ago.  April’s top days all came at the start of the month, continuing the momentum seen at the end of March.  Top days were also the same across the metrics of spend, clicks, orders and revenue.

YoY Performance Metrics for April 2011

April 2011 Top Sales Days (Revenue & Orders):  Sun 4/3, Mon 4/4

The best days in April for PM Digital retail clients came very early, with sales revenue and order volume both peaking equally high on Sun 4/3 and Mon 4/4.  This brisk early activity came on the heels of a strong finish for March, making for a sustained sales bump that is the highlight of the Spring season to date.  The only notable decline was Easter weekend (4/25-26).

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March continued to see growth in both paid search expenditures and revenue, which PM Digital has been tracking consistently since last spring.  PM Digital’s March 2011 Rewind Index, which measures monthly U.S. paid search performance for online retail clients, shows that revenue from this source was up 39%, on a spend increase of 30%.  Clicks were up a healthy 12% year-over-year, and for the second consecutive month, improvement in the average conversion rate outpaced the growth in all other metrics.  Average orders saw another modest increase vs. last March.  The end of the month produced all of the top sales days, a good sign as online retailers head into April.

YoY Performance Metrics for March 2011

March 2011 Top Sales Days (Revenue):  Thu 3/31, Tue 3/22, Tue 3/29, Sun 3/27
March 2011 Top Sales Days (Orders):  Tue 3/29, Sun 3/27, Thu 3/31, Tue 3/22

As mentioned, all of March’s top sales days for PM Digital retail clients came at the end of the month.  Furthermore, these top days were the same whether measured by order volume or revenue, though they varied slightly in ranking. Revenue peaked on Thu 3/31 and Tue 3/22, while orders peaked Tue 3/29 and Sun 3/27.  In general, the month did not see significant spikes in the data as in other months, which can be expected since March has few traditional retail holidays. The end-of-month uptick can be seen even more clearly when the data is rolled up by week (below).

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February was another good month for paid search campaigns for online retail, continuing the pattern of online retail growth outpacing growth for retail overall.  PM Digital’s February 2011 Rewind Index, which measures monthly paid search performance for online retail clients, shows that revenue from this source was up 36%, achieved with a corresponding 29% increase in paid search spend.  Clicks were up slightly year-over-year, but the bigger factor contributing to sales growth was especially strong improvement in the average conversion rate.  The traditionally promotion-laden Presidents’ Day emerged as the top day in February for several key paid search metrics, namely spend, clicks and revenue.

YoY Performance Metrics for February 2011

February 2011 Top Sales Days:  Mon 2/21 (Presidents’ Day), Tues 2/8
Other Key Days:  Fri 2/25 (Revenue), Thu 2/10 (Orders)

February’s top paid search revenue day for PM Digital retail clients was Monday, 2/21, which was also Presidents’ Day.  Tues 2/8 was a close contender and ended up the second highest day for paid search revenue, as well as the top day for order volume.  In general, sales indexes remained solidly above average during February’s first ten days and final four days.  Valentine’s Day may have exerted some influence on consumers during the first third of the month, while spring merchandise previews may have had more of a role as March approached.

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If the holidays were marked by the return of meaningful growth in paid search, then post-holiday may long be remembered for…snow, more snow, and even more snow.  But the past month can also be credited with another type of accumulation:  more sales generated by paid search.  PM Digital’s January 2011 Rewind Index, which measures monthly paid search performance for online retail clients, shows that year-over-year revenue from this source was up 36%.  PM Digital clients achieved this growth with a 28% increase in spend.  Clicks and conversion also showed healthy increases, while average order (AOV) also continued to climb.

YoY Performance Metrics for January 2011

January 2011 Top Sales Days:  Sun 1/30, Mon 1/17 (Martin Luther King Jr. Day)
Other Key Days:  Sun 1/2, Fri 1/21 (Orders); Fri 1/21, Mon 1/31, Sun 1/2, Sun 1/23 (Revenue)

Mon 1/17 and Sun 1/30 shared the spotlight as the top overall days for PM Digital’s online retail clients in January, measured by paid search order volume.  Revenue also indexed highest on these two days, with Sun 1/30 just edging into the top spot for that metric.  Sundays in general indexed high for sales in January, a departure from the primary focus on Mondays seen during the year-end holidays.

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One of the ways marketers can improve their paid search performance is to ensure that they are in competitive positions on the search engines for whatever days of the week typically perform well for them. Most paid search advertisers see consistent trends in this regard that are unique to their businesses.

In addition to the patterns of when sales come in based on the natural rhythm of the customer base, securing high positions on the search engines is also important when emails drop, when catalogs are due to be in home, when sales are running, and peak holiday days. On these days,  results will be stronger than normal, so it’s necessary to inflate bids and override bid management algorithms, if necessary, to maximize the share of impressions.

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Holiday 2010 was the best season online retailers have had in several years, by all early accounts.  You may have read some of the welcome growth figures that have been released so far:  12% year-over-year from comScore, 15.4% from MasterCard SpendingPulse; those are for holiday e-commerce overall—but what about sales driven only by paid search?  The December edition of the PM Digital Rewind Index, which measures monthly paid search performance for online retailers, shows that year-over-year revenue for this source was up 47% for PM Digital clients during this most important shopping month, and that the top sales days came early in the first and second weeks.

December 2010 Top Sales Days:  Mon 12/13, Mon 12/6, Sun 12/5, Tue 12/7, Sun 12/12

Mon 12/13, a.k.a. “Green Monday,” was the top overall day for both revenue and order volume for PM Digital’s online retail clients in December.  Other peak days were Sun 12/12 and those surrounding Monday, 12/6.  As expected, sales began to slow after Green Monday and continued dropping as Christmas neared and shipping deadlines passed.  “Free Shipping Day,” Fri 12/17, was the last day with average or better sales figures for the month.  The rebound started on 12/26, typically spurred by gift card redeemers and After-Christmas sales.

YoY Sales Metrics for Noteworthy Dates in December 2010

In addition to being the top sales day, Green Monday also saw considerable growth in revenue and orders metrics on a year-over-year basis.  Even more impressive, though, was the growth for Free Shipping Day, Fri 12/17 vs. prior year.  While that day’s revenue was average compared to other December 2010 days, when compared to the same day last year, revenue had shot up 80%.  If marketers decide to allocate more search budget to this day in future seasons, Free Shipping Day could potentially become another Cyber Monday or Black Friday in terms of pent-up consumer demand.  Sales are already typically strong in that mid-December week.

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