Category Archives: Paid Search

Paid search growth trends continue to accelerate for online retailers. As 2011 winds down and the crucial holiday season approaches, October saw even stronger year-over-year growth for revenue, orders, clicks and conversion than September, which itself had outpaced prior months. PM Digital’s October 2011 Rewind Index, which measures monthly U.S. paid search performance for online retail clients, found 53% annual growth in revenue and 33% growth in clicks—the largest monthly increases in both metrics all year. Average orders also saw a healthy 7% increase, an indication of a positive mood among online consumers. PM Digital retail clients increased total spend by an average 40%, mainly due to a boost in clicks rather than CPCs.

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September was marked by acceleration in several paid search growth trends observed in recent months for online retailers.  PM Digital’s September 2011 Rewind Index, which measures monthly U.S. paid search performance for online retail clients, found 26% year-over-year growth in clicks and even stronger 46% growth in revenue—the largest monthly increases in both metrics since last December. Both are great indicators heading into Holiday 2011.  What’s more, average order increased 10% year-over-year—the biggest increase tracked this year.  PM Digital clients also increased total spend by an average 27%, while CPCs held steady.

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Online retailers active in paid search had a strong August, with some of the best year-over-year growth in that channel in months.  PM Digital’s August 2011 Rewind Index, which measures monthly U.S. paid search performance for online
retail clients, shows that August revenue from paid search campaigns was up 24%
year-over-year with a 17% increase in spend.  The top days for August were Mon 8/15 through Wed 8/17, although Mon 8/22 and Wed 8/31 were also key. Rising sales at the month’s end, especially mid-week, were a good sign heading
into fall and Labor Day promotions.  Paid search clicks for August
increased 11%, after several months of flat or slightly negative growth.
This points to pent-up demand in the back-to-school and fall sale season, and
also suggests consumers are researching purchases.  Conversion rates
improved strongly in August, up 23%, the eighth consecutive month of double-digit
year-over-year growth.  The combination of significant growth in both
conversion and clicks, on top of 6% growth in average orders, is a great sign
for end-of-year.

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Paid search campaigns continued to boost online retailers in July, who again saw year-over-year growth in the channel.  PM Digital’s July 2011 Rewind Index, which measures monthly U.S. paid search performance for online retail clients, shows that July revenue from paid search campaigns was up 18% year-over-year with a 10% increase in spend.  July’s best sales days were Mon 7/18 and Tues 7/19, while clicks peaked one week later on Mon 7/25.  Paid search clicks for the month remained essentially flat, barely moving -1% in July (and dipping that much only due to rounding; underlying data shows an even flatter 0.57%).  Conversion rates improved 22% in July, the seventh consecutive month of double-digit growth vs. 2010 and further evidence that paid search dollars are becoming more efficient.  A healthy 7% increase in average orders helped boost paid search revenue overall.

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Online retail in June continued to see healthy growth despite another consumer confidence dip and more mixed signals from brick-and-mortar retail (though gas prices did improve some).  PM Digital’s June 2011 Rewind Index, which measures monthly U.S. paid search performance for online retail clients, shows that June revenue from paid search campaigns was up 16% year-over-year on a comparatively modest 2% spend increase.  Conversion rates for paid search again saw double-digit growth, rising an impressive 24%, and this strong conversion was the biggest factor behind revenue growth in June, though increasing average orders (+5%) also helped.  Rewind’s monthly paid search clicks index registered a -4% dip for June which, given the higher conversion rates, indicates that retailers on average saw their paid search ad dollars become more efficient during the past month with fewer non-converting clicks, though performance naturally varies by advertiser.

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Higher gas prices and a dip in consumer confidence in May were blamed for the mixed sales reports from brick-and-mortar retailers, but online retailers continue to buck the trend by outperforming the retail sector overall.  PM Digital’s May 2011 Rewind Index, which measures monthly U.S. paid search performance for online retail clients, shows that May revenue from paid search campaigns was up 21% year-over-year.  Conversion rates, which have been rising steadily for several months, improved by 27% in May and boosted paid search revenue despite the fact that clicks basically held their own, with only a modest 1% uptick.  This levelness in clicks also meant that an increase in May CPCs translated into a parallel increase in overall paid search spend–both metrics grew 14%.  May’s best day was Memorial Day, Mon 5/30, when sales were at their highest.  Smaller peaks occurred mid-month and in early May.

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Paid search spend in April was up 27% year-over-year and generated revenue growth of 33% for this channel, according to PM Digital’s April 2011 Rewind Index, which measures monthly U.S. paid search performance for online retail clients.  Clicks were up 9%, and average conversion rate continues to be one of the strongest growth metrics with a 33% increase.  For the second consecutive month, average orders were 4% larger than a year ago.  April’s top days all came at the start of the month, continuing the momentum seen at the end of March.  Top days were also the same across the metrics of spend, clicks, orders and revenue.

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February was another good month for paid search campaigns for online retail, continuing the pattern of online retail growth outpacing growth for retail overall.  PM Digital’s February 2011 Rewind Index, which measures monthly paid search performance for online retail clients, shows that revenue from this source was up 36%, achieved with a corresponding 29% increase in paid search spend.  Clicks were up slightly year-over-year, but the bigger factor contributing to sales growth was especially strong improvement in the average conversion rate.  The traditionally promotion-laden Presidents’ Day emerged as the top day in February for several key paid search metrics, namely spend, clicks and revenue.

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If the holidays were marked by the return of meaningful growth in paid search, then post-holiday may long be remembered for…snow, more snow, and even more snow.  But the past month can also be credited with another type of accumulation:  more sales generated by paid search.  PM Digital’s January 2011 Rewind Index, which measures monthly paid search performance for online retail clients, shows that year-over-year revenue from this source was up 36%.  PM Digital clients achieved this growth with a 28% increase in spend.  Clicks and conversion also showed healthy increases, while average order (AOV) also continued to climb.

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