Monday, February 20, 2006

As the World Turns ... Search No Longer Effective for Retailers?

Cut it back says Piper Jaffray. Expand it says Best Buy.

It is always nice to see how best practices in marketing are so clear cut.

Internet Retailer tells the story:

Aaron Kessler, senior research analyst who follows e-retailers for investment research firm Piper Jaffray & Co., says "As retailers deal with rising competition over Internet paid-search keywords, they need to rely less on search engine marketing and develop a more comprehensive, multi-channel strategy. Three years ago, Internet search was a good value for any retail category, but now it’s not always the value it was,” he says. “It’s a great marketing channel when it works, but many retailers have become too reliant on it.”

Sam Taylor, vice president of online stores and marketing for Best Buy Co. Inc., has a somewhat different opinion. “Our SEM effort has been very profitable because we manage it as part of an overall online advertising portfolio and because of our strong brand, which we build through multi-channel national advertising and in-store service.” He adds that Best Buy will aggressively expand its budget for search engine marketing this year, just as it did last year.


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