All search queries can be classified into three broad types: navigational (e.g., Skyword), informational (e.g., “What is content marketing?”), and transactional (e.g., content marketing software packages). Retailers have spent the first decade of search marketing begrudgingly playing defense on navigational (brand) searches while accepting increasingly low margins on highly coveted transactional searches. In the years ahead, innovation in content production methods, a flight to quality in SEO, and shrinking margins in competitive paid search will create a new battleground in retail search marketing as retailers scramble to attract consumers through informational search.
The Promise of Informational Search
The opportunity in informational search is enormous. According to Penn State’s 2008 study on Web searches, 80% of all consumer searches are informational. What’s more, marketing against informational search presents a valuable opportunity for retailers to forge new consumer relationships by making the implicit value of the brand explicit on the web. L.L. Bean should be interested in a consumer searching for “great hikes in Maine,” GE should help a consumer researching “how to fix my dishwasher,” and B&H Photo should connect with the traveler looking for “great photo opps in New York City.”
So why don’t they?
Informational Search Held Hostage by Search Engine Marketing
There are three primary reasons why retailers have not effectively addressed the opportunity in informational consumer search:
1. Retail Site Content
Most retail marketers have been so myopically focused on visitor conversion that they’ve engineered websites that alienate early-stage shoppers. As a result, most e-commerce sites lack compelling informational content that appropriately engages consumers at the onset of purchase consideration. If the ultimate goal of search marketing is to assemble an elegant string of relevance between the user query, the ad/organic snippet, and the landing page, it’s no surprise that without informative landing pages, attempts to engage informational search fail.
2. SEO Competitive Landscape
Content farms and content aggregators stole the organic informational search market with innovative approaches to low-cost, low-quality content production. Retailers struggled to compete with these models in organic search and surrendered to the “content farm tax” (contextual advertising CPCs, or costs per click) in order to access this audience indirectly.
3. Eyes on a Different Prize
SEM is still young, and it has evolved at a rapid pace. For good reason, retailers, engines, and software providers have focused the majority of their efforts thus far in developing tools and methods for extracting profits from transactional search. For many of those years, transactional search strategies were rewarded with a consistent stream of increasing profit, which reinforced this focus.
Informational Search Breaks Away
Retail search marketing is currently at an inflection point. Web retailers who continue to over-optimize e-commerce websites for conversion are going to steadily lose share. On the other hand, retailers who can relay their collective expertise, specialization, and value through engaging content, aligned to consumer demand, will win. There are three primary trends fueling this progression in the marketplace:
1. Improvements in Google’s Natural Search Algorithms
“The Internet is fast becoming a cesspool where false information thrives. Brands are the solution, not the problem. Brands are how you sort out the cesspool.” – Dr. Eric Schmidt, 2008
Google has quickly become the primary gateway to commerce, and as it improves the quality of its search results, it increasingly favors brands that deliver consumers’ information needs. This evolution has implications on both the opportunity of SEO and its practice.
In the last two years, we’ve seen several major algorithm updates designed to surface higher-quality content within Google’s results pages. The Panda updates have degraded and will continue to degrade the content farm stronghold on longtail informational search, opening up opportunity for retail brands. Meanwhile, Penguin has penalized unnatural link profiles, forcing retail SEOs to focus on using informational content to build links and earn better rankings.
In the future, we can expect increased weighting on social signals and post-click engagement that will further reinforce the importance of informative site content.
2. Diminishing Margins From Transactional Paid Search
Google’s remarkable progress with transactional search monetization has strangled margin opportunity for retailers. Apart from increasing query volume, Google has two primary levers for search monetization: (1) Increase the percentage of paid clicks. This can be done by increasing the real estate of paid advertising relative to organic results and/or by increasing the relevance and “clickiness” of search ads. (2) Increase click prices. This can be done by increasing advertiser CPC bids and by increasing the number of participating advertisers in each auction.
Google has aggressively pulled both of these levers in transactional search in the last two years. Take a look at the most relevant AdWords updates for the retail industry: Product Listing Ads, Dynamic Search Ads, and the migration of Google Shopping to a pay-to-play model. These are all programmatic ways of increasing paid click share, bid density, and ad relevance. While these updates may improve a retailer’s AdWords performance, they make it increasingly difficult for retailers to skirt a “Google tax” on transactional searches. This may be the impetus retailers need to approach search as a strategic vehicle and not just a transactional tactic. As this shift continues, retailers will begin to explore ways of providing consumer value through clever, business-aligned responses to informational consumer search.
Example: The query “Sony Bravia Led 42″ returns a search engine results page (SERP) where organic listings are entirely below the fold.
3. Innovative and New Solutions to Content Production
The emergence of innovative technology and the rising surplus of freelance editorial talent has removed barriers to quality content production for brands, further enabling opportunity. Noteworthy technology in this category includes Narrative Science, which deploys artificial intelligence to generate written content, and the comprehensive content marketing platform offered by Skyword.
In its infancy, search advertising was a boon for small businesses and direct marketers willing to pay for transaction-oriented search traffic. Through soaring CPCs and eroding margins, they are losing the competitive advantage that PPC advertising knowledge once bought them. They are falling back to the glut of commodity vendors online.
Retailers of all sizes have refocused on growing branded search traffic through awareness campaigns and creating consumer value through extraordinary user experiences and valuable content. To continue being smart direct marketers, retailers must embrace the best practices of brands.
John T. Shea is the Director of Agency Development at Skyword. Prior to joining Skyword, John served as Senior Agency Sales Executive at Google Inc. and Vice President of Strategy at the Rimm-Kaufman Group, a leading digital marketing agency. A Boston native, John holds degrees in Political Science and English from Tufts University. Circle John on Google+