When you’re in the business of selling a product that is usually purchased with discretionary income, today’s economy is extra frightening. So I decided to do a little digging – are consumers still shopping for my client’s product in the same way, or are they looking to get a deal? I looked at the impression traffic of two clusters of keywords – general, non-occasion related terms and clearance/sale/value related terms – over the past 15 months. Notice that the first two spikes (winter holidays & Valentine’s Day) are nearly identical. After Valentine’s Day the general terms taper off, with less variation in the quantity of impressions/week. The clearance related terms behave quite differently. In fact, at the end of May they reached peak holiday levels. Folks are still shopping, but now, more than ever, they are shopping around for a ‘deal’.

***Note on both graphs below, the clearance terms are based on a secondary y-axis for the purpose of scaling them to a level where trends can be observed***

That’s fine and dandy, but what we really want to know is if our customer’s are still buying, and if so, what types of terms are closing the sale? I pulled sales data for the same time period above and confirmed that increased traffic on clearance terms is, in fact, converting for us. We’ve seen three times more sales on clearance terms so far in 2008 than we saw in all of 2007, including the holidays. The only question left now is: what are they buying when they are looking for a deal? I compared the AOV of general terms thus far in 2008 to the AOV of the clearance terms over the same period. No big surprise here – AOV of the clearance terms is 12% lower than the general terms.

People are still shopping for deals and buying high ticket items during these tough times; they are just trading down for less expensive goods. If you’re managing a search program, be sure to:

• Keep a close eye on AOV trends and on clusters of terms that may be performing better than usual due to current state of the economy.
• Make deals easy to find on your website – include a sales tab/link that is highlighted to stand out, make offers prominent on the homepage, and be sure to have a smart search results pages for sale/clearance terms.
• Plan offers to raise not lower AOV - incent customers to add extra items to reach an additional discount tier - but be sure that the tier is about twice your AOV.
• Set PPC bids intelligently on your discounted terms - consider margin-based bidding or defining different econ targets for specific clusters of terms.

We do this for our clients when appropriate; you should make sure whoever is managing your PPC campaigns does this as well.