Report: Paid Search Not Much Better At Turning Shoppers To Buyers

The study’s authors said the results showed that companies using online advertising should use a combination of online marketing tools.

By Antone Gonsalves
TechWeb

Sep 25, 2006 04:57 PM

Paid search has only a slight advantage over unpaid search in converting online shoppers to buyers, a Web analytics firm said Monday.

A study of business-to-consumer e-commerce sites during the first eight months of the year found conversion rates for paid search was just 9 percent higher than unpaid search, WebSideStory said.

Keywords bought on a pay-per-click basis at search engines such as Google, Yahoo and Microsoft MSN had a median conversion rate of 3.4 percent, compared with 3.13 percent for unpaid results to search queries, the firm said. Both forms of search were far above the overall conversion rate of about 2 percent for most e-commerce sites.

The study’s results did not indicate that paid search wasn’t worth the money, rather it showed that companies using online advertising should use a combination of available online marketing tools, including banner ads, paid search, email marketing and search engine optimization techniques.

“Most people don’t understand that to get high conversion rates you need multiple touch points,” Rand Schulman, chief marketing officer for WebSideStory, said. “It’s not just one or the other.”

WebSideStory, based in San Diego, analyzed more than 57 million search engines visits to nearly 20 major business-to-consumer sites. The Web properties generated an estimated $2.5 billion a year in online sales.

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