A recent Nieslen report concluded that shoppers are been driven to brick and mortar stores through search. This makes sense and many of our customers have said that they see the same thing happening: people will use their online store to decide what they want, then go to their local store to make the purchase. This knowledge is extremely important when you’re trying to measure the return on investment of your paid search campaign, or your search engine optimization efforts.

The beauty of on-line marketing is that you can measure the return on investment because you can track clicks through to purchases. Right? The tracking doesn’t work if the person stops clicking, walks down to the store and makes the purchase.

This means that some of your on-line marketing spend is going to be as difficult to track as your offline spend. People and organizations with experience in measuring ROI of traditional marketing activities should be able to apply that experience to measure the impact of shopping on-line and buying off-line. This can be included in your ROI calculations for your on-line campaigns and ultimately reflected in the price you’re willing to bid for keywords.

We’re currently performing an interesting experiment with Google Co-op. For one of our customers, NZ Holiday Houses, we have automatically created a subscribed link feed using the 1000 most popular search terms used on their site search. Each subscribed link shows the most popular pages on Holiday Houses for the given keyword.

We have added an invitation for people to join the Co-op on the search results page, e.g. Queenstown. We are testing the wording of the invitation to join the co-op. I couldn’t see any point in mentioning Co-op because I’m sure very few people outside the industry know what it is. I would be interested to hear suggestions from anyone on how to entice people to sign up to a Co-op.

The idea behind this is to allow people that are fans of this site to get easier access to the information. I’ve no idea whether it will catch on. It will be interesting to see how many subscribers we get.

We did find one problem with this after we released it. Google Co-op doesn’t work from google.co.nz. Most of the people who use this site regularly will be from New Zealand. Hopefully Google will fix this soon. In the meantime we can see whether we get any subscribers.

I’m going to be talking about this at the SES show in London next week but I thought it was worthwhile putting it out here too. We found a very simple (and in hindsight, obvious) tactic to improve the ROI of automatically generated paid search campaigns. By way of background our Ad Champion service (which is still in beta) automatically creates Google campaigns from site search activity. It’s a very cool product because it creates large campaigns and allows you to take advantage of the search tail everyone is talking about. Most of the terms in the tail don’t get searched for very often and it’s not worth manually managing ads for those terms. Having an automated system of selecting and managing those terms allows you to take advantage of them. They typically have higher conversion rates and cost less because there is less competition.

One of the problems we found with this system is that some of the phrases that are used in the site search get searched for a lot on Google. They’re not in the tail so they can cost a lot and have a lower conversion rate. This graph shows how much we spent on each keyword over a period of time, ordered from highest to lowest.

We found by removing just 50 keywords we could reduce the cost of the campaign by 60% but only reduce the sales by 2%. At first it seemed counter intuitive - to remove the keywords that were giving us most of the traffic. But this change was enough to change a campaign from a negative to a positive ROI.

In my last entry about Google refinements I assumed that Google must somehow be automatically labelling the pages in order to be able to offer the refinements. It ends up that is not the case. This is part of their new service, Google co-op which allows anyone to label pages.

Eric Schmidt compared it to Wikipedia. Hmmm, a search wiki - that sounds like a swiki from our sister company Eurekster.

The co-op refinements are no longer showing for me when I search for insulin on Google - so they must be experimenting with bringing those refinements into the normal search.

Further to my previous post about Google’s related results, I see that Google has an option to refine your results for some queries.

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This is like the faceted search that we offer for our site search (for example search for gift sets on Ulta and we offer 7 different types of refinement). Clicking on one of the refine options will restrict the results that you see. In order to provide these refinement options Google needs to have some structured information about the pages its indexing. For example it needs to know whether a page is for patients or for health professionals. Google appears to have labelled a bunch of pages. You can see this when you click on one of the refinement options:

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Presumably Google is somehow automatically categorizing these pages - they are against manually doing this type of thing. I’ve only seen the refine option for health related queries - e.g. hypertension. I presume this is part of the rumored Google Health.

I like this feature - it is fairly unobtrusive, and easy to use. I think related search terms would compliment this nicely. They could be shown for queries that don’t return results with structured data.

As a side note - internet explorer crashed twice while I was viewing these pages.

Thanks to Paul Denhup from Gartner for pointing this out

We’re busy at SLI. We’ve got 6 events on over the next few weeks. We currently have two shows on at the same time: Annual Catalog Conference in Chicago and Internet World in London. Next week we’ve got the Novator Client Summit in Toronto, Canada and the South Florida Interactive Marketing Association networking cruise. Shortly after that we have Search Engine Strategies in London, followed by Internet Retailer 2006 Conference in Chicago.

That’s a busy month - but it means we’re going to see lots of our customers and prospects. If you’re going to be near any of these then come and say hi. We’d love to see you and show you what we can do for you.

Since my last post we’ve also announced a couple of new customers - cosmetics retailer, Ulta and Green Mountain Roasted Coffee. We are proud to have these companies as customers. Even though they’re in completely different industries they can both see the benefits of having site search that works and of leveraging the site search activity to drive more traffic through automated search engine optimization.