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Why Your Merchandising Team’s Effort is Lost on Your SEM Team, Part 1: Leveraging Your Product Catalog

June 20, 2012 By Thi Thumasathit
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Retail search marketers have for years longed to capitalize on "long-tail keywords." Unlike "head terms" that are short and have high query volume (e.g., "basketball shoes"), long-tail terms are highly specific and have much lower query volume (e.g., "black Nike Air Jordans"). Not only are long-tail keywords cheaper than their shorter, more competitive head term counterparts, they're more qualified and therefore lead to significantly higher conversion rates. In theory, lower costs and higher conversions should lead to higher return on investment for retailers. Unfortunately, capitalizing on long-tail keywords has proven to be much easier said than done.

For a retailer managing a search marketing campaign around large retail product catalogs with thousands of SKUs, mining the long tail using keywords simply doesn't scale. As a result, search engine marketers (SEMs) largely disregard their product catalogs when generating keywords for paid search campaigns and overly rely on top-selling SKUs, head keywords or broad match.

While such strategies seem practical, they can fundamentally undermine the performance of your campaign because of four primary reasons:

  1. Cost: Head keywords are, by nature, readily apparent to all of your online competitors. This leads to head-term bidding wars which drive up cost per clicks.
  2. Conversions: Long-tail keywords are naturally more qualified than head keywords. Consider "Kate Spade" (a head keyword) vs. "Kate Spade red heels size 7" (a long-tail keyword). The long-tail keyword probably represents a consumer who is further down the purchase funnel and more likely to convert into a buyer.
  3. Marketing: Long-tail keywords give you the opportunity for more targeted marketing. Continuing with the Kate Spade example, you can write a more targeted ad that shows a more targeted landing page for the long-tail keyword "Kate Spade red heels size 7" than you can for "Kate Spade." More targeted marketing leads to more clicks and better ROI.
  4. Bidding: Depending on broad match and head keywords will put you at a competitive disadvantage when bidding on high-conversion terms. If your competitors are mining the long tail, they'll be able to optimize budgets by strategically increasing bids on higher converting keywords and decreasing bids on lower ones. Your competitors will not only have more targeted advertising (as described above), but also more targeted bids. The quality of your traffic suffers as a direct result.

To avoid the pitfalls of over-relying on top-selling SKUs, head keywords and broad match, SEMs must use the most important internal asset available to them, the one created by their very own merchandising team: the product catalog.

 

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