For Black Friday and Cyber Monday, retailers in a variety of industries are increasing the budgets on their paid search management for terms that are relevant to their products. This trend is a result of the expected potential for sales that the holiday season creates. With consumers actively searching the web for the best Black Friday deals available, retailers are trying to capitalize on the quick way to get their companies noticed, purchasing paid search links that could bring their business more sales leads and increase their profits. SearchIgnite conducted a study that compared the amount of money businesses spent on paid search last year to this year and found that retailers have already spent 37% more in 2010 in the anticipation of Black Friday.
The reason more businesses are spending more on paid search results is because the conversion rates from these links are increasing as the economy starts to improve. Conversion rates from paid advertisements are up 28.7% and the average amount that users are spending on purchases is up by 20.7%. With the potential for sales being this high, retailers are taking advantage of the opportunities that paid search is offering them by making sure they are obtaining the top paid search spots for the keywords that are relevant to their products.
This strategy might be effective, but it is a short term solution that could end up costing businesses significant amounts of money. This is especially true if you are targeting very competitive keywords. You might end up spending enough on paid search management to nullify the profits you are getting from your increased traffic. Investing a substantial amount of your marketing budget on paid search results might help your business generate sales, but optimizing your website so that it ranks in the top natural spots on search results pages will benefit your company more. Even though it might take more time and effort to capture these spots, the investment will be more fruitful because users are more inclined to choose natural search results over paid search because of their credibility. This means that you will bring more prequalified traffic to your websites, which will raise the probability for potential sales opportunities.