Retailers Pull Back Holiday Search Spend

NEW YORK Retailers put the brakes on search ad spending as the holidays neared, according to a new study.
SearchIgnite, a provider of search marketing management tools to marketers and agencies, found that search ad spending and average order value both declined after Black Friday. Compared to the same period a year earlier, search spending fell 14 percent and order value declined 20 percent.
The figures add to evidence that retailers suffered through a tough holiday shopping season. It also showed the ripple effects through the online advertising category, with even directly measurable tactics such as search affected. A report this week from eMarketer confirmed that, contrary to assertions by Google CEO Eric Schmidt, search is not immune to economic turmoil.

SearchIgnite found that consumers continued to convert after clicking on search ads. The problem: they didn’t spend as much compared to the year-ago period.
Roger Barnette, president of SearchIgnite, said in a statement the trends indicate “evidence that the challenging and changing economic environment is requiring retail marketers to adjust their online marketing strategies.”
The report is based on campaigns run on major search engines, comprising an aggregate of 28 million clicks over the past holiday season and in 2007.
The bleak findings stand in contrast to a cautiously optimistic picture SearchIgnite painted for the early part of the retail season. It had found search spending from retailers rose 33 percent over the first half of the fourth quarter.
Overall, retailers still grew their search spending in the fourth quarter by 12 percent. That figure, however, represents a marked slowdown from the rate increases seen in previous years. Conversion rates remained flat.