Apparel companies are spending their paid search budgets on keywords associated with their own brand in order to hang on to shoppers already familiar with their brands, according to research by paid search measurement firm AdGooroo.
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Many advertisers would prefer not to spend their marketing dollars on their own branded keywords, hoping shoppers searching for those terms would click on unpaid organic links in search results. But if they don’t advertise on their brand name, shoppers may end up at the site of a competitor who bids to advertise to shoppers searching for those branded terms, says Jim Leichenko, director of marketing at AdGooroo.
AdGooroo measured paid search activity on specific keywords in the apparel category—the top 2,228 apparel keywords in the United States and the top 2,288 apparel keywords in the United Kingdom during the first seven months of 2015. The search marketing firm then estimated spend, clicks and click-through rates. The study was limited to ads that appeared on desktop search results, excluding smartphone ads.
Spending by U.S. advertisers on the U.S. keyword group jumped to $289 million, up 16.5% from $248 million in the same period in 2014, AdGooroo says. That’s faster than the overall growth in U.S. paid search spending of 9.8%, to $10.1 billion in the first seven months of this year from $9.2 billion in the same period last year.
U.K. advertisers spent a total of 773 million pounds ($1.18 billion) on all paid search from January through July 2015, down about 11% from 867 million pounds ($1.33 billion) spent during the same time in 2014. The level of spending on the U.K. apparel keyword group during that period was 41.2 million pounds ($63.1 million), about a 23% increase from 33.6 million pounds ($51.4 million) during the same period in 2014.
“This shows that U.K. apparel retailers in particular are seeing the value of paid search and investing more in it,” says Leichenko. “It may also show that U.K. apparel advertisers are bucking the trend toward growing mobile search at the expense of desktop search. That’s likely because consumers don’t necessarily want to shop for clothes on their mobile phone because its smaller screen makes it more cumbersome than a computer or tablet for navigating a checkout cart.”
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Although Amazon.com Inc., No. 1 in the Internet Retailer 2015 Top 500 Guide, was the third biggest spender on the apparel keywords studied in the U.S., with nearly $7.5 million invested in the first seven months of 2015, Amazon-owned Zappos took the top spot with more than $10 million spent during the period. JC Penney (No. 37) ranked second with more than $9.6 million.
Although U.S. apparel advertisers on average are spending more per click than their U.K. counterparts, $1.01 vs. 49 cents (32 pence), the main reason total paid search spend is higher in the U.S. is that U.S. advertisers are reaching far more consumers, Leichenko says. The top 20 U.S. apparel advertisers in the study gained an average of 114 million impressions during the period compared with an average of 38 million impressions for the top 20 U.K. advertisers.
In the U.K., Seattle-based Amazon bested 15 British companies as the biggest advertiser on apparel-related searches covered by the research, at 1.6 million pounds ($2.4 million) for 161.27 million impressions, the study shows. Yet Amazon got the lowest return, with a 2.89% click-through rate. The e-commerce retailer spent an average of 34 pence (52 cents) per click.
By comparison, apparel retailer Boden, which was second in spending with 1.1 million pounds ($1.7 million) spent from January through July for 30.46 million impressions, generated a click-through rate of 10.83% and paid 33 pence (50 cents) per click.
The fact that there are two Boden branded keywords, boden# and boden, in the top 20 keywords in the study is likely the reason Boden has a much higher click-through rate than Amazon, Leichenko says. Branded keywords have higher average click-through rates in general because the consumer is specifically searching for the brand and clicks on it more often when finding it in the results page, Leichenko says. There was no Amazon-branded keyword among the top 20 keywords studied.
There were 17,334 advertisers that bid on the U.S. keyword group from January to July 2015. In the U.K., 7,132 advertisers bid on the U.K. keyword group during the same period.
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