PRINCETON, N.J., October 6 -- In a surprisingly positive report on keyword search trends, leading search engine marketing firm, NetElixir, has made an upward revision to its previous 2009 holiday forecast. The firm has predicted a 3-4% year-over-year increase in the number of search advertising clicks.
NetElixir bases its predictions on regular monitoring of 32 US retailer clients in seven product categories.
The click-through rate of paid search ads run by these 32 retailers increased 6% year-over-year in the first quarter of 2009. It grew only 2% in the second quarter. In July and August, it surprised NetElixir and its retailer clients by jumping 8%. This changes the search landscape today and likely will translate into a similar jump during the crucial November and December holiday shopping season, says Udayan Bose, founder and CEO of NetElixir.
“Click-through rates have risen considerably in July and August, and this is a result of searchers clicking more prior to a conversion and the number of ads being clicked per search query having increased,” Bose explains. “People are clicking more advertiser listings on search engines — gathering information, comparing offers — and then making a purchase. This will continue during the holiday season: more searches per conversion and a longer search cycle. The challenge for marketers is identifying the right products to advertise and creating efficient keyword funnels.”
However, an increase in click-through will come at a price: NetElixir predicts the cost per click during the 2009 holiday shopping season will rise by 5-8%.
The first quarter of 2009 saw a decline in cost per click, which started rising again in the third week of May, the firm observed. The firm believes that Google’s decision to let any advertiser bid on trademarked terms, which went into effect in June, was one of the reasons behind the price jump. Because trademarked keywords and brand name terms often account for a large percentage of clicks — 35-65% for large brand retailers — the increase in the number of bidders on these keywords drove up the cost per click, Bose says.
To combat rising cost per click, NetElixir offers three recommendations for online retailers. First, keep close tabs on who is bidding on trademark terms; a retailer can tell its affiliates not to bid on trademark terms. Second, test the keyword mix regularly; separate the best-performing keywords from those with questionable returns on investment. And third, use day-parting, adjusting bids up or down according to the times of day deemed most or least advantageous.

NetElixir is conducting a workshop at the upcoming Internet Retailing Conference on 13th October in London where it will share its learnings acquired through managing more than 200 US online retailer search advertising campaigns.
Registration is currently open for the workshop and can be done online here:

The Keyword Search Advertising Report can be downloaded here:


About NetElixir, Inc
NetElixir, Inc. is an online customer acquisition management firm headquartered in
Princeton, NJ, with global offices in London, UK; Hyderabad, India; Freiburg, Germany;
and Copenhagen, Denmark. The company advises clients worldwide on online customer
acquisition strategies and using its proprietary technology, the LXR core platform, helps
them achieve online advertising performance maximization. NetElixir’s suite of services
and products includes both an end-to-end campaign management service as well as
optimization technology and service solutions for online retailers and agencies.

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Published on: 4:55PM on 6th October 2009