We know this is a challenging Holiday Season for both merchants and consumers, but, despite consumer concerns about the health of the US economy, predictions of growth in e-commerce spending represent a significant opportunity for retailers to reach active shoppers. Forrester Research projects that online holiday sales will grow 12% over 2007 to a healthy $44 billion even as same store sales remain flat. [1]

Shopping drivers of convenience, selection, and perceived value will continue to attract buyers to the Web this holiday season - over 91% of online shoppers plan to purchase the same number or somewhat more gifts online this year.[2]

To maximize the value of your marketing dollars, we wanted to offer some relatively simple best practices for converting cost sensitive consumers:

·Sweeten the Deal by Offering a Holiday Perk in Your Ad Text: Frugal shoppers want to find the best overall value online – regardless of whether you typically compete on price, you still might consider sweetening the deal with complimentary gift wrapping or shipping.

·Consider Removing Negative Keywords like ‘Free’ or ‘Discount’ From Search Campaigns: While normally, some retailers benefit by filtering out users looking for discounts, this may prevent your ad from showing to value-seeking consumers who may inadvertently wind up buying from a higher cost competitor. To do this effectively, you may want to use negative exact match keywords like ‘-[Free "brand name" Purse]’, which filter out unnecessary clicks as you likely don’t intend to give away a free purse, without preventing your ads from showing to potential buyers who are hoping for ‘free shipping’.

Visit the AdWords Help Center section on Keyword Types to learn more.

·Increase Profits by Offering Discounts that Encourage Shoppers to Buy More: Consumers typically need to buy multiple gifts at this time of year and you want them to purchase presents for multiple people on their list when they visit your website. Consider an offer such as ‘buy two, get the third 30% off’ rather than offering 10% off per single item; you offer the same savings per item, but encourage volume purchasing. As an additional benefit, if the shopper’s mother, daughter, and sister all love their new sweaters, you’ve managed to kill two birds with one stone by spreading your brand as well.

·Avoid Major Site Changes: With value-focused users visiting multiple sites before making purchases, they may visit your site a few times before making a purchase. To avoid confusing them, make sure they can use the same navigational path to complete purchases.

·Employ Values Marketing: With a reduction in consumerism comes a cultural shift that breeds a focus on self-sacrifice, reassigned priorities, and a return to those things that really matter. Shoppers are spending more time at home this season and spending time with family and friends. Advertising that echoes consumer priorities is more likely to breed an emotional connection with your brand - increasing both conversions and brand loyalty.

·Engage in Successful Price Discrimination by Targeting Promotions Based on Search Behavior: If you are a branded retailer, you're likely have a segment of your customer base searching for promo codes for use in your online store or coupons to bring with them into your brick-and-mortar location. Consider building a landing page specifically targeted to this search behavior - you'll to show your cost-conscious brand enthusiasts that you've anticipated their needs and further increase brand loyalty.

[1] Forrester Research, Outlook For US Online Holiday Sales, 2008, Economic Woes Promise A Challenging Holiday Season For Web Retailer, October 21, 2008

[2] E-tailing group's third annual "Mindset of the Multi-Channel Shopper Holiday Survey," sponsored by ATG, October 2008, n=1,000