SearchMetrics, an SEO technology partner, is hosting Visibility_14 an SEO user and expert conference July 16-18th in Chicago. Industry experts from all over will be convening to discuss search trends, data and success stories. Our very own Bjorn Espenes will be joined by search experts from companies such as: Walgreens, CBS Interactive, GoDaddy, eBay and many more.
Bjorn will be sharing strategies that eCommerce companies need in order to shift their ad budget from a cost-center to a profit-center. His presentation is based on our new eBook and includes data from successful customers who have deployed these proven profit-first PPC strategies.
Use the discount code: VIS14CONF20 for 20% off your registration. After you register, let us know you’re going and we can connect at the event.
We look forward to seeing you in Chicago!
Not long ago one of our resident Google Experts published a post and data about Attribution inside of AdWords. For eCommerce, the question of attribution models and how that affects bidding strategies is a very important one.
There are many ways to arrive at the appropriate model for eCommerce businesses, but Morten began a quest to answer that question by digging into the actual data. By looking at the performance data for several accounts he cut through opinion and gut instinct and got right to what the data tells us.
Join us for a webinar as we discuss what he found in the data and how you should model attribution in your AdWords account.
Tuesday, June 24th 2pm EST / 11am PST
Thursday, June 26th 11am Central European
Register now and come be a part of the discussion.
Here at Finch, we are always on the lookout for interesting technologies and partners that can help eCommerce companies, like you, increase marketshare and revenue. A few months ago we started collaborating with Fanplayr, looking for ways to help businesses learn how to get more out of their marketing efforts. Fanplayr is an exciting technology that will help you increase sales by delivering highly targeted and relevant on-site offers to customers on your own site, powered by a cloud-based big data intelligence platform. Finch will help get your customers to your site, and Fanplayr will help you convert them at higher values.
At Finch, we recognize the increasing competition companies like yours face, and we have always been committed to helping you drive revenue in a pay-for-performance model. Fanplayr takes a similar approach, removing monthly subscriptions and relying on their ability to help you achieve a demonstrable lift to your bottom line.
Fanplayr designed its platform to help online merchants make the most out of their visitor traffic by being able to understand and engage with prospective customers in real-time. Based on historical, behavioral, or demographic visitor attributes, you can understand your visitors’ intent, and serve relevant offers in order to appeal to that specific intent. In-depth analytics, dedicated account managers, and in-house industry experts have enabled Fanplayr to improve billions of online shopping experiences. Fanplayr is aligned with it’s customers’ goals, and can launch campaigns to increase site-wide conversion rate & AOV, increase customer acquisition, reduce cart abandonment, increase customer loyalty & lifetime value, optimize offer-based margins, and improve your online shopping experience.
Over the next few months we will be collaborating on educating eCommerce companies about how you can take control of lifting the bottom line through AdWords and on-site strategies. We will explore the data and results of companies that have employed these profit-first technologies and techniques. The first installment in this joint education series is a quick overview of each company, you can watch the video here.
“My current vendor is doing a great job and is taking great care of us” is something I hear frequently. What they may actually be saying is “I don’t know what is going on, they are nice people and seem to know what they are doing”. What if you knew exactly how to manage your PPC vendor? Here are a few tips:
#1. Define outcome: You are in business to make money? You make money from selling products for more than they cost you (including fees to Google and vendor). Know that cost and set a hard cost of revenue (Cost per Value) target and measure against that.
Fact: Recently most companies are tracking the revenues that comes from their AdWords ad spend, but 100% of the clients Finch starts working with did not use revenue data when deciding how much to bid for the next click. (hint: they are bidding for conversions (CPA) while expecting revenues (CPV).
#2. Keyword coverage: You sell products, your prospective customer are searching for products; make sure your product titles, UPC codes, etc. are in your keyword bank. Ask the question and do spot checks.
Fact: The average eCommerce company Finch starts to work with has less than 25% of their product catalog listed as keywords (hint: they ignore 75% of their market).
#3. Influence the Click-through-rate (CTR): Your CTR drives ad rank and how much you pay per click for a position. Ad copy, extension use and best practices, and ad parameters are key components that needs both strategy and structure to isolate the variables in order to influence them. Track the CTR on your top producing ads over time.
Fact: 100% of companies Finch starts working with groups keywords into an ad group with multiple ads associated with them. Isolating a high impression ad with a keyword becomes impossible and optimization is simply not feasible.
#4. Leverage how Google AdWords really works: How Google AdWords works is really simple in principle, you pay them $1 and you get a click in return. The challenge is that most your competitors are also willing to pay Google $1 for that same click. That is why Google developed a highly sophisticated auction platform where they sell clicks so that you can bid more or less. In addition Google developed a very sophisticated “black box” called Quality Score that for all practical reasons enable them to calculate which ad will give them the best click probability/revenue combination. That is what is called ad rank, you must have a strategy that you are executing against.
Fact: Exact match clicks have a higher CTR, fewer clicks means you are willing to pay more per click, higher bid/CTR gets a higher position which triggers top 3 ad features (extensions), which again gets a higher CTR, driving a higher quality score, resulting in a higher ad rank (better and more clicks for less).
#5. Google feature adoption: There has been more changes and enhancements to Google AdWords the past 18 months than the previous 10 years combined. This is more visible in the Ad than anywhere else; i.e. all extensions give you more real estate on the SERP (search engine results page) which means your competition gets less. Product listing ads best practices, remarketing for search configuration, bid adjustments on ad group level in the new Enhanced Campaigns (i.e. Desktop vs Mobile, Re-marketing for Search bid adjustment for different shopping stage profiles). Early adoption is key to benefit early and before others, proven best practices are key over time to remain competitive.
Fact: The above best practices can influence your CTR and profitability by over 50% just by turning on a feature, turning on all of them with best practices will change your business as it has done for most of our clients.
Bonus #6: Check your log file to monitor the vendor activities (bid changes, Ad changes, keyword additions, etc.
Fact: If you pay a vendor by the hour you will see a lot of activity, if you pay a flat fee or a license you will see limited activity. Unless you pay for performance in a model where your and the vendor’s outcome is aligned, one will always try to get ahead of the other.
Bjorn just hit publish on a brand new eBook outlining the AdWords strategies eCommerce companies must employ to grow revenue and profit with PPC.
If this eBook were written as a tweet (you know, 140 characters or less), it would read:
“Buy profit not acquisitions. AdWords must be a sales channel, not an ad expense. See how one company increased revenue by 310% and profit by 169%!”
While a tweet sounds intriguing, this eBook goes into detail about each of the steps necessary to accomplish this. This strategy addresses the unique requirements eCommerce companies have for PPC. Specifically, managing the complexity of offering multiple products, each with different prices and profit margins, and setting the right cost targets.
The key to this strategy, as laid out in the eBook, is to shift away from focusing on Conversions and Acquisitions, and move to Revenue and Profit instead. You’ll have to go read the eBook for all the details, but here are the major topics Bjorn covers:
The eBook closes with a quick look at the results for one company that applied these strategies to their own AdWords efforts.
Attribution is a hot topic in PPC and almost everybody has an opinion. I have read many different posts where so-called experts are comparing attribution to a football/soccer team where the striker is the “last-click converter” and the defender is the generic “assisted converted keyword.” It all makes a lot of sense to me, however each post lacked evidence to back their opinions. To me, the whole idea was too easily bought - perhaps because it logically made sense.
But as I dug into the concept, investigating this idea using actual data, I discovered that there is no such thing as “strikers” or “defenders”; instead, 95% of all keywords are “all-rounders”. Sometimes they function as the last-click converting keyword, other times they assist.
What is Attribution:
I live in the world of eCommerce and attribution is very important to understand. Let’s start the discussion by defining exactly what I mean by attribution.
Attribution can be a lot of things:
“Attribution is the process of identifying a set of user actions (‘events’) that contribute in some manner to a desired outcome, and then assigning a value to each of these events” - IAB Attribution Primer
Attribution is therefore very broad, for the sake of this discussion, let's scope the definition down to Attribution in AdWords Search for eCommerce. In this post I will use empirical data to explain how attribution affects AdWords Search for eCommerce businesses.
What did I do?
I had long discussions with several PPC experts (most of them Googlers) and we all came to one main conclusion involving attribution within AdWords Search for eCommerce:
What is the impact of assisted click conversions on an AdWords search account?
If we listen to the experts out there, then you might have a keyword like “smartphone” and this keyword almost never converts (a defender). However, a keyword like “samsung s3 smartphone” will have all the last-click conversions (a striker).
If you only have one last-click conversion on “smartphone,” but that keyword leads to 10 assisted conversions, then obviously that is an important keyword. There is a lot of hidden data not evident if you only look at the last-click conversions.
If your keyword sits in the top 3 position, then you already have that keyword in a good position. If the keyword sits below 3, then that keyword is potentially “under-valued” and could be bid up.
However, let’s look at the data first.
What did I analyze?
I examined 3 months of data for three large eCommerce clients, accounting for conversion lags by starting from 30 days ago. I have compared both accounts managed by Finch and accounts managed by others.
Based on my discussions with Googlers and other AdWords experts, we came to the conclusion that in order for it to be attribution within AdWords Search for eCommerce the data must show twice as many assisted conversions as last-click conversions.
Are there any keywords that have twice as many assisted conversions as last click conversions within AdWords Search?
If so, what is the impact of these keywords?
For the analysis, I only looked at keywords sitting in position 3.0 or lower and had received at least 1 click. If they had 1 or more assisted conversions, but zero last-click conversions, then they also fit this description.
For the analysis part, I compared the keywords I found with the total number for any keyword with either:
a) a last click conversion and/or
b) an assisted conversion
So basically anything adding value to the account (not including impression-assisted conversion value)
What I Found
International Home Goods Retailer:
139 out of 12,018 keywords fit this description = 1.16%
The 139 keywords of the 1,461 keywords with conversions = 9,5% represents:
UK Home and Garden Retailer:
18 out of 17,112 keywords fit this description = 0.11%
The 18 keywords of total 2,596 keywords with conversions = 0.7% represents:
Danish Electronics Retailer:
61 out of 10,487 total keywords fit this description = 0.58%
The 61 keywords of the 1,590 keywords with a conversion = 3.8% represents:
Thoughts on data:
The data shows that there are very few keywords matching my definition of attribution. The main reason: most keywords function as both assisted-click conversions and last-click converters. I found very few keywords functioning either as a strictly assisted-click converting keyword or a last-click converting keyword.
If you define attribution with AdWords Search for eCommerce as keywords that are so broad that they will almost never convert, but will have a lot of assisted conversions, then attribution within AdWords Search is almost non-existent. Very few keywords have this characteristic!
The assumption that keywords play a role as either first-click converters or last-click converters is not supported by the data. The story of “defenders” and “strikers” is fun, and intuitively believable, but in practice there are very few keywords that could be strictly labeled as “strikers.” The data shows 90%+ of keywords are actually “allrounders.” Keywords sometimes work as assisted conversions and sometimes work as last-click conversions. When you focus attention on keywords in the last-click converting role, you will actually be looking at 95% of the revenue-generating traffic.
Look for yourself in your AdWords account. Filter for “Search Funnel -> Click assisted conv / Last click conv.” Set that higher than 2 and add in another filter looking for keywords below position 3.0. You will most likely find only a couple of keywords.
The way we define and evaluate attribution is far too generic and should be updated. The only way to identify the best ways to optimize your AdWords efforts is with more data and less opinions.
Online advertising is constantly changing and we are here to help you stay on top of all these changes. We just held the first Customer Success Webinar for 2014, full of information on the ways we are helping you optimize your account and the many changes Google has made to AdWords.
Here’s a quick summary of the topics we covered, but you can listen to the whole webinar with the video below.
Profit is the ultimate outcome for eCommerce companies
At Finch, we are focused on one thing: maximizing your revenue and profit through AdWords. Many of our customers have already made the shift from a cost per acquisition (CPA) model to a cost of revenue (CPV) model. However, for most businesses with variable profit margins we know that the best way to optimize your AdWords account is to use Profit. By focusing all optimization efforts on profit, we can focus all of your budget on the keywords that maximize your profit.
Expanding Keyword coverage
You lose 100% of auctions you do not compete in. Having keyword coverage that most accurately represents your entire product catalog is the best way to grow your market and reach more potential customers. We help you by connecting directly to your product catalog and by continually adding the keywords that bring you customers.
Remarketing for Search
Remarketing for Search is a way of targeting people who have been on your site previously, but who then later search again for something that you offer. The first stage of setting up RFS is to implement profiles for different potential audiences who have been to your site. As a general best practice, we will normally start with broad groups, such as any visitor on your site, and then work through your sales funnel all the way to past customers. Depending on your sales funnel, you might define anywhere from 3-5 different groups of site visitors based on this criteria.
Product Listing Ads (PLAs)
PLAs are the best way for you to own more of the search results page, stealing attention from your competitors and becoming more appealing to your customers. As with much of PPC management, Finch takes a different approach when it comes to PLA’s. We find that most eCommerce businesses tend to set up their PLA’s in such a way that their products are either grouped in one single large group, or broken down into broad categories for bidding purposes. At Finch, we split out your product feed and then bid individually on each and every one of your products. This helps to ensure your ad spend is being used where it will generate the most revenue for you.
Google has publicly announced the new Image Extensions, which adds your images to ads. They are still in beta, but we are working with a few customers to get early access.
Google recently made updates to the AdRank algorithm that factors in ad extensions, increasing AdRank for enabled and relevant extensions. AdRank not only gives you better positions, it also lowers your actual cost per click and makes it much more expensive for your competitors to acquire the same customer.
AdRank is one of the most important factors in AdWords success and the best way to influence AdRank is through your Quality Score. At Finch we have developed the right technology and processes to help you attain the very best possible Quality Score for each of the keywords in your account.
Watch the full webinar here.
If you have questions about any of these topics, please reach out to us and we will discuss it with you. If you are not yet taking advantage of everything Finch has to offer you, sign up for a free AdWords audit and we will tell you exactly how you can take advantage of these new Google features.
When your AdWords success is measured in terms of cost-per-acquisition (CPA), all of your activities support optimizing for CPA. CPA works well for businesses that are interested in capturing as many leads as possible. But for eCommerce companies, it is not the right way to measure and grow your PPC efforts. We have looked at hundreds of AdWords accounts and we repeatedly see four ways the CPA model stalls your AdWords growth and success.
1. CPA takes your eye off the ball
As an eCommerce business, AdWords is a channel for you to sell your products and generate revenue or profit. When you measure your PPC efforts in a CPA model your attention is shifted from profit to optimizing the cost of acquisitions. This distraction leads you to make tradeoffs between costs and traffic instead of improving the performance of your business. This distraction ultimately misaligns your goals with the goals of the rest of your company, making it harder to justify budgets and prove the impact on the business.
The majority of PPC vendors and experts have exceptional credentials about how to drive CPA costs down and volume up. They are armed with charts and dashboards about how fantastic your campaign performance will be. However, as an eCommerce company, CPA is an irrelevant metric for you. You are generating sales, not leads, and each sale brings in a different amount.
Solution: Keep your focus on profit and revenue, centering all of your activities around optimizing for revenue and profit. You know the ability for each keyword to generate profit. Use it when you decide to what bid for the next click. When bidding, make regular adjustments based on the profitability of individual keywords, rather than some average number everyone in your industry is using.
2. CPA simply makes you a part of the flock
Using the CPA model will make you a part of a flock of sheep, err, competitors. In any given industry, the common CPA target is roughly the same across all competitors, conversion rates are roughly the same, and the core keyword bank is about the same. The end result is a flock of sheep all doing roughly the same thing which only drives up CPC. When your company is stuck in this group-think method it’s impossible to stand out and effectively rise above your competition.
Solution: Stand above your competitors by optimizing your AdWords account on profit, rather than the same metrics your competitors are using. Conversion rates matter, but profit (or at least revenues) matter more when deciding where to spend your ad budget. You have the data on the value of each customer, use it to drive your keyword bank and adjust your bids.
3. CPA hides your real business performance
CPA creates a separation between an acquisition and the value returned to your business by focusing on the cost of getting a customer to your site, rather than how much the customer purchases. In this situation, you could double the number of conversions at a lower CPA and it could be devastating for your business. When you create separation between acquisition and profit, it creates a scenario where you are no longer able to quickly adjust your AdWords efforts to match your business goals.
Solution: Measure and optimize based on the profit returned to you. When optimizing for profit you can exponentially increase traffic without having a negative effect on your business. When you have a direct correlation between ad spend and profit, you can easily decide the target profit you want to achieve and adjust your bids accordingly.
4. CPA forces decisions according to averages
The CPA model creates an AdWords account structure that supports your CPA target. When assembling keywords and ads into groups that match your site structure or product categories, the CPA model adjusts only to changes in the averages, rather than individual changes. For instance, an ad copy change can have a positive effect on one keyword and a negative effect on another, but when you have keywords lumped together these effects get lost in the averages.
Solution: Separate each keyword and each bid, recognizing the individual contribution to profit differently than the rest. Control, accuracy and leverage are your favorite tools to buy the best and most profitable clicks, you need all you can have of all three. Averages = Bad, Real data = Good. It is there, use it!
As you know, online competition is fierce and the competitive landscape changes on a daily basis. The most reliable way to win on AdWords is to leverage every advantage in your favor. Get a free AdWords audit to see how moving from the CPA model will help drive more profit and revenue for your business.
"We spent no time getting started, and after 15 days, our unit costs per conversion lowered by 38%, and the number of conversions increased by 46%. So Finch works!"
Managing Director, Energibolig.dk