Tim Kauffold

Tim Kauffold, Oneupweb’s director of business development, explained to Sarah Mahoney, "One of the things that surprises marketers – particularly those who have been using the media for several years – is how the costs are rising.  They think, ‘Why doesn’t the same dollar buy me the same volume it used to?’  But there are really big inflation numbers with cost-per-click.  It’s still a great avenue, but as more folks jump in, costs are going higher."

Oneupweb found that 48 percent of all U.S. online advertising spending in 2007 went towards paid search.  Also, paid search grew by 32.2 percent in 2006, whereas traditional media climbed by only 0.5 percent.

These trends are likely to continue; Oneupweb confirmed that, when integrated with a natural SEO campaign, paid search offers a better ROI than most other forms of advertising.  "It increases conversion rates and suggested sales, and even improves brand recognition," stated Lisa Wehr, the company’s CEO.

People and companies interested in paid search will probably do best to stick with it, then, despite rising costs.

The company looked at programs of retailers using GravityStream, its natural search-advertising platform, and found an average of 14 percent week-to-week growth, compared to nine percent at this time in 2006.

"This faster rate of growth likely stems from several root causes, including a better understanding of search engine functionality among retailers and consumers," said Brian Klais, vice president of search for Netconcepts.

"Online retailers’ efforts to offer good content and increase visibility are paying dividends, and consumers can access many types and sources of information through natural search to support purchasing decisions."

This year retailers using GravityStream saw a 28 percent increase in natural search engine traffic from November 19, the Monday before Thanksgiving, to November 26, Cyber Monday.

The same Monday -to-Monday period in 2006 generated only 18 percent growth.

The study tracked natural search advertising programs for apparel, sporting goods, hardware, home improvement, housewares and other vertical retail industries.

"Many retailers invest in their online presence to better capture natural search traffic and more effectively engage consumers with meaningful and relevant content," added Klais.

"Any retailer trying to capture the attention of consumers early in the purchase process with natural search should aim for high week-to-week growth rates early in the season. The goal is a fast ramp up early in the season with continued growth through Cyber Monday IV."