Smaller retailers see diminishing returns from Pay Per Cick Paid Search Ads

[mandy]

The Small Fry Sour On Search Ads
Priced out by brand giants, the outfits that pioneered the medium are looking elsewhere...

For years, running those little four-line text advertisements on Web search engines brought in a profitable stream of new customers to BabyAge.com. But last year, search suddenly turned sour for the eight-year-old online baby products store, which posted about $20 million in sales. Even as BabyAge's $1.2 million worth of search ads got more clicks in 2006, they netted fewer actual buyers, effectively doubling their cost. "We're out of business at this rate," fumes Chief Executive Jack Kiefer. He plans to cut back on search ads this year...

full article: http://www.businessweek.com/magazine/con...018076.htm