Retail, or online shopping, is an integral part of Google and Bing’s success in PPC. Amazon and eBay are probably the best-known and most ever-present retailers in PPC, but countless others are selling millions of dollars of products via PPC every day. I got my start in search doing in-house PPC for an ecommerce site.
Despite all the activity by huge online retailers, a study released by BIA Kelsey shows that SMB retailers “only spend about $700 annually on paid search.”
$700 annually is nothing in the search world. Why aren’t these SMBs taking advantage of PPC, one of the most effective direct marketing channels out there?
Retail search is hard.
A few years ago, PPC was less complicated. You picked keywords, wrote ad copy, set your bids, and you were off and running. Nowadays, there is more competition in paid search, and limited inventory. There are only so many impressions for “Nike running shoes,” and hundreds of retailers selling them. It takes time, attention, and know-how to be successful in retail PPC.
Website optimization has gone to the next level, too. Tools like Unbounce and Optimizely have made it easy and inexpensive for even novice website owners to run multivariate tests. Ecommerce tools like Magento and Shopify have streamlined the back end of ecommerce, including shopping cart software. While these tools have made some tasks easier, they’ve also leveled the playing field – making small businesses that don’t use these tools look unprofessional.
And anyone who’s ever tried to set up a Google Shopping feed can tell you that feed setup alone is enough to make even seasoned PPC pros give up. Google Shopping is a powerful tool for ecommerce vendors, but it requires different skills and optimization tactics than traditional keyword PPC. It’s nearly impossible for a small mom-and-pop store owner to master both Shopping and keyword search, and SMBs can’t afford to hire agencies to do this for them.
Retail search is time-consuming to manage.
Let’s take 2 examples. If you’re a small hair salon with a website, chances are you have one conversion: booking an appointment. You might bid on keywords that describe the various services you offer in the salon, but those will stay relatively static over time, and the goal is to drive appointments. PPC for this type of small business is straightforward.
Now, let’s say you’re a small women’s clothing retailer. Even though you only sell to women, you probably have multiple items available for sale. And each item comes in different sizes, styles, and colors. You don’t just have women’s sweaters: you have women’s cotton cardigans in sizes 2-16 and a variety of colors; women’s crewneck wool sweaters in sizes 2-18 in navy, gray, and green; women’s cashmere sleeveless sweaters in sizes 2-16 in 5 colors, etc. You probably also sell pants, skirts, blouses, blazers, shoes, and accessories – each in a variety of styles, colors, and sizes. It’s easy to see how running PPC for even a focused small business like this would quickly become a full-time job.
So what do small retailers do for marketing? According to the study, most SMBs in the retail space spend their money on social media.
Social Seems Easier
If you’re a small retailer, you may have an hour a day to spend on marketing (and that’s if you’re lucky). What are you going to do with that hour? Are you going to do keyword research, write ad copy, review bids, set up a shopping feed, look at search query reports, and create reporting dashboards? Or are you going to write a few Facebook posts and schedule them for publication?
Social media, especially Facebook, feels familiar to most people these days. Even our grandparents are on Facebook. For retailers, it’s easy to talk about a product or promotion, add a link, and call it a day – after all, you’re probably in Facebook anyway checking your personal feed. What better way to tell people about your business than by posting photos and links on Facebook?
Even Facebook Ads seem easier than search PPC – and SMB retailers spend 11.2% of their budget on Facebook ads, compared to 2.7% on paid search.
Facebook ads can be targeted locally. While search ads can, too, search ads feel more complicated. And Facebook ads can be targeted by interest. The small women’s clothing retailer in our earlier example can easily run Facebook ads targeting women ages 25-45, within a 20 mile radius of their store, who like fashion, are professionals, etc. For Facebook ads, you just describe your target customer and set that as targeting. No keywords, bids, or other “hard” stuff to worry about.
Still, less than 30% of SMB retailers are using Facebook ads. Most of them are just doing organic Facebook posts. And who sees those? Current customers and a few of their friends, maybe?
SMB Retailers Focused on Current Customers
According to the study, “retail SMBs are more invested in customer lists than SMBs in other verticals.” Marketing to current customers, especially in retail consumable goods, is smart. It’s easier to woo a returning customer than to acquire a new one. SMB retailers are also using mobile marketing such as mobile coupons and text messages.
It’s great to see that SMBs are taking advantage of mobile marketing, and paying attention to current customers. Many larger businesses could learn from them.
But there needs to be a balance between marketing to current customers and acquiring the customers in the first place. Search is probably one of the most efficient ways to attract new customers – but only if you know what you’re doing. The knowledge gap is why most retailers don’t use search.
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