November 01 2007

Top retail brands get search wrong, apparently

The paid and natural search strategies for the top 20 brands in financial services, retail and travel sectors in are all wrong according to the latest surver from Tamar. Are you one of them?

According to the 2007 Searching Sectors Report from Tamar, a search conversion agency

“Major brands across the retail, travel and financial services sectors are squandering online marketing budgets by failing to achieve the right balance between paid and natural search”

 If you need to sum up the report quickly it’s this. Why aren’t more companies doing natural search? Natural search is free where as paid costs the earth, especially if you buy single keywords. Or as Neil Jackson, search director at Tamar puts it.

"As the cost of paid search continues to rise very few brands in each sector have actually realised that a balanced paid and natural search strategy can drive down the overall cost of the search marketing campaign while also increasing conversion rates. As marketers across all sectors continue to be pushed to demonstrate greater return on investment they need to understand that search marketing is not just about eyeballs, but converting those into leads and sales."

According to Tamar the report tells two contrasting stories about retailers, with the clever online retailers such as Amazon getting their approach right, while the rest of the sector still relies too heavily on paid search.

Tamar finds that as a sector, retail brands are three times less likely than financial services brands to be using paid search to bid on generic search terms such as 'clothes', 'books' and 'music'. Which Tamar puts down to retailers being less active in search than financial services brands. Or does it? To us it means two things.

1) Retailers don’t bid on generic words because they don’t provide an acceptable roi, where as a key phrases, which retailers do use extensively, are far more efficient and produce a good roi.

2) The financial market is keyword driven, where as retail is product driven.

Tamar also finds that only one in ten of the leading 20 retail brands appears regularly on the first page of search results for the most popular retail search terms.

To us, it’s obvious why most retailers don’t do more natural search. They don’t have the time. It’s not core to their business and they can’t switch it on and off like they can with paid. After all the last thing you want is people coming to your site through natural search to read about a product that you no longer sell. 

However, reading the report does give you a powerful insight into how NOT to do paid search marketing in the financial, retail and travel sectors. Here’s just one example.

The 2007 Searching Sectors Report reveals that leading financial services institutions such as Barclays and Citibank have failed to strike the right balance between paid and natural search and are paying through the nose bidding on generic search terms. Leading financial services brands are 50 per cent more likely to be targeting generic search terms such as 'insurance', 'mortgage', 'credit card' and 'bank account' via paid search, paying up to £8.65 per click for 'mortgage' and £8.24 per click for 'insurance' instead of using natural search engine optimisation.

The 2007 Searching Sectors Report analyses the paid and natural search strategies of the top 20 brands in each of the financial services, retail and travel sectors to determine how well each industry is using the search channel. The report assesses each brand's presence on the first page of search rankings for a combination of over 40 of the most popular generic and specific search terms for each sector.  For more information go to the Tamar site