Paid Search Prices Continue to Rise; Better Returns in Social


Paid search for online retailers can become a spend suck, and price for keywords is still on the rise. In the second quarter of 2012, Google reported a 42% increase in paid click revenue. While more targeted and relevant ads can make the rising price of paid traffic worth the investment, many companies are beginning to find themselves upside down in their paid search campaigns.

Increased prices of traditional paid search campaigns and escalated allegations of click fraud are sending many marketers searching for alternatives to traditional paid search ads, and has made many of them second guess their paid search investments.  But there are other options that can connect online retailers with more qualified customers for less money; many of these techniques fall under the umbrella of “social commerce.”

Supporting social interaction that seamlessly flows with the e-commerce shopping experience not only gives current shoppers the chance to discover new products and engage with online retailers, but also drives shoppers to invite their friends to shop with them. These invitations often drive thousands of dollars in new revenue and have a viral effect that can turn one customer acquisition into five, ten, or even more.

Online retailers that have mastered the art of using an onsite engaging social experience to bring in more customers organically, rather than through paid search, are finding their money better spent on creating a social experience that leads to higher conversions and more incremental revenue than from money spent on paid search campaigns.

Apparel retailers have been seeing on average $26 in new revenue per user-generated social invitations, while electronics retailers are getting close to $40 for each invitation in addition to organic customer acquisitions. For campaigns that can generate thousands of shares in relatively short time frames – this can mean a significant revenue bump.

Paid search is still a necessary element of marketing mixes but as it continues to become more costly, and many agree, less effective marketers may want to search elsewhere and consider new marketing tools like social integration as a more effective way to bring in new shoppers.



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