How You Shop Online

Two reports came out recently detailing trends on how customers are finding their way to online retailer websites. This is also known as “traffic” and there are a variety of ways businesses try get it. The first report comes from HitWise stating that 25% of retailers get their traffic from people using search engines like Google and Yahoo. Not too shabby, right?

The second report tells a different story. Efficient Frontier’s case study found that the conversion rate of web pages that contain nothing but advertisements, so-called “parked” pages, is twice that of a search engine’s “sponsored” results.

The domain industry is claiming victory and a big “I told you so”. Some even suggest the figure is still very low.

This is going to force a lot of people to re-think their marketing strategies. Typically a retailer will purchase ads that will appear on search result pages and targeted websites. When a user clicks the ad, the website or domain-owner receives a little payout. This model is called PPC or “pay-per-click”. The user is directed to the retailer’s website where, hopefully, a sale is made. This sale is called a “conversion”. If ads on “parked” domains are doing twice as well as search, then this could be the signal to marketing departments and ad agencies to shift gears and invest more in domain names instead of traditional website search portals like Google.

The number of people directed to retailers from search engines, the HitWise report said, is only up 0.7% from last year. That’s not significant growth when you consider that e-commerce sales have increased nearly 20% in 2006. Maybe some of that increase can be attributed to “parked” pages?

The battle of Search Ads and Domain Ads is heating up. I’m taking one domainer’s advice: “Buy domain names”!

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