Retailers Focus on Multiple Holiday Sales Driving Tactics, in Addition to Search

According to the 2008 JupiterResearch Executive Survey results, online retailers continue to put search engine marketing spending at the top of their holiday sales driving tactics. Nonetheless, this trend is more subdued when compared to previous years. The JupiterResearch US Paid Search Forecast, 2008 to 2013 notes that paid search will grow 26 percent in 2008 (to $11.4 billion) and continue at a compound annual growth rate of 13 percent, however attention is starting to shift from paid search to more aggressive search engine optimization (SEO) campaigns.

15 percent less online retailers cite increasing their search engine marketing spending for the holiday season among the top three sales-driving tactics. According to the 2008 JupiterResearch Retail Executive Survey, 40 percent of online retailers will increase search marketing spending as a holiday sales-driving tactic this year. Though a high overall total percentage, this is still 15 points less retailers than the previous year. Online retailers already spend 40 percent of their budgets on search, thus the slowing of this spending increase signals a wider focus on other tactics.

A growing number of retailers increase spending on holiday sales-driving tactics like promotions and online advertising. 27 percent of online retailers will increase spending on affiliate marketing (a 14 percent increase over the previous year) whereas 18 percent will increase spending on banner advertising. Amplified concentration on other sales driving tactics, in addition to search, reflects a slight shift of online retailers' attention towards higher website exposure and more competitive pricing. This strategy should pay off as, according to the 2008 JupiterResearch Group Consumer Survey, 31 percent of online users will do more research online before purchasing products this holiday season, in order to make sure they get the best price.

By Patti Freeman Evans & Cristina Bugnaru