Some merchants spend more than 30% of their sales volume on digital marketing

Eleven of the top publicly traded web-only retailers boosted their collective spend on digital marketing by 32.2% in 2016, to roughly $6.37 billion from $4.82 billion.

Many merchants profiled and ranked in Internet Retailer’s Best Digital Marketers in E-Commerce report are successfully leveraging the massive trove of information they know about their customers to tailor their messages to an individual shopper’s interests, and they’re doing it across email, paid search, natural search and social media.

For one, Overstock.com Inc., says its marketing success is contingent on its ability to identify the consumers most likely to make a purchase across devices to target them at a reasonable cost, says J.P. Knab, Overstock’s senior vice president of marketing.

“We’re a pure play that’s striving to be profitable,” he says. “Our marketing algorithms try to create bottom-line dollars, which means we need to be intelligent in our targeting. We can’t just try to seek impressions in front of everyone.”

Because it focuses on turning a profit, Overstock takes a conservative approach to digital marketing by only promoting a narrow slice of the products it sells to a narrow slice of its customers. This has helped the retailers spend a significantly smaller share of its overall revenue on marketing efforts–roughly 8% last year–than many of its competitors, some of whom spend 20%-30% or more of their total sales on marketing.

advertisement
Favorite