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Direct Response Marketing

Paid Search No. 1 Way to Gain Customers

30 Jul, 2014 By: Doug McPherson

CAMBRIDGE, Mass. – Paid search marketing remains the top digital tactic to get customers but attribution modeling makes it far from perfect, says a report from and Forrester Research.

In their “State of Retailing” report, the two organizations say marketers cite several challenges with attribution models. Near the top of the list: an inability to recognize consumers across devices and connect the data.

Without the proper model, marketers can’t reallocate the amount they spend and most keep using first- or last-click attribution models, which both present many shortcomings.

Despite the problems, 85 percent of retailers still praise search engine marketing as one of the best tools to acquire customers. And retailers spend more of their interactive marketing budgets on paid-search programs than on any others.

Some specific findings include:

  • Four of five retailers spent more of their budget on pay-for-performance search placement this year than last.
  • Nearly one in five retailers spends more than half of its total interactive marketing budget to paid-search ads running on Bing, Google and Yahoo.
  • About 17 percent allocate between 41 percent and 50 percent, followed by 14 percent between 31 percent and 40 percent, and 19 percent between 21 percent and 30 percent.
  • Aside from paid search, search engine optimization and affiliate programs have been the top two most effective sources to acquire customers in the past year.
  • Although retailers often have strict attribution windows for their paid-search efforts, 27 percent use same-session or same-day measures to give credit to paid search, while more than 75 percent have found their paid-search programs more effective in terms of revenue in the past year.
  • Collectively, display ads rank as the second-highest category for marketing spend, with 62 percent of retailers planning to invest more of their interactive marketing budget in 2014 within this category.
  • Online retailers report they plan to increase their marketing spend aimed at smartphones and tablets in 2014, but most of that spend will go into optimizing traditional interactive marketing messages for mobile devices, such as mobile emails, mobile paid search campaigns, and mobile display ads.

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