Research shows that half of all online Christmas sales transactions are now driven by search advertising, with UK retailers enjoying a return on pay per click (PPC) spend of £13.21 in 2011.

Here are six key areas that online retailers should be thinking about now as they try to maximise their paid search campaigns this year.

1. Do like Mondays

Our research, summarised in the 2012 Kenshoo Online Retail Insights report, shows that Mondays are the biggest day for e-commerce sales.

Despite it being a US event, Cyber Monday was still the busiest online shopping day in the UK in 2011 when it came to revenues. Make sure you have optimised your campaigns and create promotional strategies to maximise Mondays.

2. Don’t neglect last minute shoppers

Last year there was a 74% increase in online sales in the week before Christmas, make sure you have reserved PPC budgets to make the most of this opportunity, particularly if you are offering consumers the opportunity to shop online and collect their purchases in-store, which is expected to be a major growth area for 2012.

3. Make it mobile

Mobile phones and tablets are becoming more prevalent in online shopping. Based on US metrics for Q3 2012 11% of paid search clicks came from mobile phones and 10% from tablets.

While these platformsstill lag behind the PC, which is responsible for 91.72% of all conversions, these devices are now a key part of the purchasing process so need to be factored into your strategy.

4. Competition will be fiercer

More online retailers are investing in paid search, with UK budgets up by 26% year on year in Q3 2012. So you’ll have to work smarter to be seen.

Despite this increase cost per click (CPC) rates have remained stable, moving up a couple of pence on average over the last six quarters to £0.26 in Q2 2012. This is due to the expansion in the range of keywords used, so research the best terms for your products and invest accordingly.

5. A picture is worth a thousand clicks

Paid Product Listings Ads (PLAs), which will soon be replacing free Google Shopping results for retailers, enjoy higher click through rates (CTRs).

While this switch won’t happen in the UK until 2013, PLAs are available now and provide a powerful image-based ad that has proved to increase traffic in the US.

Investigate how PLAs could help sales, particularly in retail categories that rely on the visual impact of products.

6. Don’t miss the post-Christmas opportunity

Savvy shoppers with time on their hands post-Christmas are still spending online, so maximise the opportunity. Two thirds (66%) of UK transactions in the last two weeks of December 2011 were driven by search advertising with conversion rates at 50%.

So customers are actively searching for new purchases. But many retailers’ search advertising budgets had run dry – with a 4% drop in spend over the same period. Save some of your budget to target this free spending audience. 

The good news is that while Christmas is fast approaching, there’s still time to review your search advertising strategy and ensure you have a successful and profitable festive season.