On the Monday after Thanksgiving weekend, even those consumers afraid of visiting the malls on Black Friday go shopping. But while on Black Friday, shoppers head to the stores for great deals, on Cyber Monday, they go online. To prepare for this online shopping bonanza, retailers ramp up their online advertising spending to attract customers to their sites.

In particular, search advertising investments work to increase the number of new customers who visit the site, driven there by Google’s search engine or Microsoft’s Bing. These search engines can reveal the number of clicks and the conversion of those clicks into purchases. In turn, search ad spending is up 37 percent from last year, and conversion rates have increased by 12 percent, such that almost 30 percent of clicks now turn into purchases.

If Cyber Monday can be such a success, there is no reason retailers cannot attain similar success other days of the year. Victoria’s Secret generates 25 percent of its sales online; Ann Taylor is a relatively new player online but already generates 6 percent of its sales online. Furthermore, online sales offer higher margins than traditional store sales.

The goal going forward for retailers is to increase their Web traffic, and it appears the best way to do so is by investing more in search advertising, so they can catch customers at they very moment they type in a search term to find exactly what they want to buy.

Discussion Questions:

1. How do you shop online? Do you use a Google search or go directly to a retailer’s Web site?

2. Do the circumstances in which you choose these two paths differ?

John Jannarone, “Working to Make Every Day Cyber Monday,” The Wall Street Journal, November 29, 2010.