Leading provider of digital marketing intelligence shows how Target, Toys”R”Us and other major retailers exceeded Amazon’s SEM results in specific verticals
CHICAGO – Digital marketing intelligence provider AdGooroo (www.adgooroo.com) today released a new report showing how major retailers such as Target, Toys “R” Us and Victoria’s Secret outperformed Amazon in paid search engine marketing (SEM) in specific categories, including Children’s Products, Fashion and Apparel, and Auto Parts. Additionally, the report unveils the secrets of success employed by these brands.
With nearly twice the Google AdWords spend as the next largest retailer (Target) and an estimated portfolio of millions of keywords across a broad range of merchandise, Amazon is considered by many to set the gold standard for paid SEM. However, AdGooroo’s research into categories outside of the e-tailor’s traditional strong suit (books and other media) found that Amazon is not always the dominant player. Among the findings, retailers with an established brand and specialized or niche offering were able to reap significantly better results than Amazon in SEM.
How Amazon fared in the three verticals studied:
Despite sponsoring 12.7 percent of the highest spend keywords in Children’s Products, Amazon was outperformed by advertisers with strong brand recognition who garnered more premium ad positioning (American Girl, Lego, Hasbro, Toys“R”Us and Children’s Place) and a much larger share of impressions in the category (Children’s Place – 81 percent; American Girl – 69 percent; Lego – 68 percent; Toys“R”Us – 50 percent). Even Target, whose offering and SEM strategy resembles Amazon’s more than the children-centric brands studied, garnered 52 percent of impressions on the top keywords in the category compared to Amazon’s 31 percent.
Fashion and Apparel
Although Amazon again dominates the category in percentage of top keywords sponsored (13.9 percent), it is soundly beaten by its paid search competitors. The top five SEM advertisers in the category based on ad position, Express, Victoria’s Secret, Bloomingdales, 6pm.com and Loft.com, together earned an average of more than 1,600 impressions per keyword per day from the most popular searches compared to Amazon’s 349 impressions. Further, Amazon had the lowest ad coverage, the second lowest clickthrough rate, and the third highest cost-per-click. Although it fell at the bottom of the pack based on average ad position, Target recorded higher clickthrough rates and a larger share of impressions than Amazon.
Although not traditionally thought of as a provider of automobile parts or accessories, Amazon’s broad set of Auto Parts keywords, second only to AutoZone, demonstrated a concerted effort to compete in the category. However, its performance was poor compared to its competitors, generating the highest CPC, the lowest average position and only a 13 percent share of impressions on the keywords that it chose to sponsor. AutoZone, O’Reilly Auto Parts and even Target appeared to be competing less with Amazon than with each other.
“Amazon is the world’s preeminent e-tailer and spends nearly twice as much on Google AdWords as the next largest retailer—we estimate their combined total AdWords spend, including their Zappos subsidiary, was more than $15 million per month in the second half of 2011, with more than 19 million clickthroughs generated in an average month,” said Richard Stokes, founder and CEO of AdGooroo. “Our report shows that even with this impressive spending and results, Amazon is certainly not infallible across the board. The breadth of Amazon’s PPC campaigns is certainly impressive, but when analyzed in categories where it lacks recognition or authority, their SEM efforts fail to live up to some of their most skilled competitors.”
According to the report’s findings, retailers wishing to compete with Amazon in paid search should consider a key metric used by the search engines, Revenue Per Thousand Impressions or RPM (RPM = CTR x CPC x 1000). Analysis of the SEM results of Amazon and competing retailers found that paid ad position on U.S. AdWords is highly correlated to the RPM that each competitor delivers to Google, and that the biggest lever for improving RPM is clickthrough rate.
“Search engines are motivated to give preferred positioning to advertisers that generate the most revenue for them, so an advertiser’s best chance of gaining first SERP placement is to offer a higher RPM than competitors who are vying for similar keyword searchers,” explained Stokes. “Retailers should concentrate on improving their clickthrough rate through best practices such as maintaining fresh creative and delivering relevant ads and landing pages. They should also utilize competitive intelligence to better focus their efforts by benchmarking the strengths and weaknesses of their own SEM campaigns compared to their competitors.”
To download the full report, please visit:
The data analyzed in the report was generated using AdGooroo’s Industry Insight, a software-based online marketing dashboard that provides marketing data on virtually every online advertiser and more than 160 industry categories. Pay-per-click marketing data provided by Industry Insight includes specific keywords and estimated budgets, clickthrough rate, cost-per-click and impressions for each advertiser and industry. Estimated budget data is generated using AdGooroo’s proprietary modeling and algorithms.
For more information on AdGooroo’s Industry Insight, visit:
For more information on AdGooroo’s budget analysis methodology, visit:
Founded in 2004, AdGooroo is a leading provider of Digital Marketing Intelligence that drives competitive advantage for Internet marketers. More than 4,000 advertisers and agencies use AdGooroo’s on-demand tools to tap into the world’s largest database of search and display marketing data and gain actionable intelligence on their top competitors’ keywords, ad creative, backlink data, campaign statistics, budgets and more. For more information, visit AdGooroo.com.