5 More Tips for Improving Q4 Performance for Online Retailers

by on October 10, 2011

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Chart: How eTailers divvy up the marketing budget - Confluence Digital blog

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Welcome back! Last week we posted the first 5 ecommerce PPC tips and we continue with 5 more. By sharing these tips in small batches, we hope you can pick a few and implement them. Be sure to note performance before implementing changes so you can determine their impact.

For this batch of tips we again start with a fundamental: use the right metrics! Though all online marketers have challenges, ecommerce seems to have numerous pressures from all directions.  

1.       Use the Right Metrics: CPA vs. ROAS vs. ROI vs. AOS

Years ago I had an interesting client who was truly intimidating. He was a big guy, tough looking with a weathered face who mentioned in a suggestive way that he grew up in New Jersey and worked the waterfront. I couldn’t shake the image of him sending a double-crosser to talk to the fishes. As we discussed launching his campaign he leaned over, looked me dead in the eye and said, “Eric, always remember, if you can’t measure it, you can’t manage it.” I’ve since realized that’s an old business axiom and not an original, but the impression was made.

As a marketer you need to determine which metric is most appropriate for your business. It’s not uncommon to track several key performance indicators. But which is best? Well that depends and why we suggest you track the big three at a minimum: Cost Per Acquisition, Return On Ad Spend, Average Order Size, Return On Investment and get beyond counting conversions. Here’s a quick refresher on these metrics.

Cost Per Acquisition (CPA): Media Cost / Customer Orders. Ideally you can identify first time customers and calculate the metric for new and returning customers. 

Return On Ad Spend (ROAS): Sales Revenue / Media Cost. Can potentially mask the negative impact of low margin sales but handy to assess the impact of your media spends across channels.

Average Order Size (AOS): Sales Revenues / Customer Orders. This is important to help manage promotions, cross/up sell activities, and merchandising. It’s a balance because you need both order volume and high average revenue per item, but more often than not these work against each other.

Return On Investment (ROI): Net Income / Media Cost. This is the bottom line for most e-retailers. In short you know if you were using the right media to sell the right products.

Useful link: Web Analytics Guru Discusses Metrics

2.       Ad Copy: Sell Your Strengths

105 characters plus a display URL is not a lot of space. This precious space needs to be given proper respect to work well. Don’t try and cram every potential benefit into this space. Do have a good understanding of your value proposition to the audience. If you’re a discounter and can compete on price, include prices. If you’re a luxury item marketer, use language that speaks to the unique & exclusive nature of the products. If promotions are a key part of your strategy, regularly test promotional calls to action.

The holiday season is cut-throat. It’s very easy for a web shopper to browse multiple competitors. They’re going to be hit by dozens of great offers. Know where you play in the field and what you do best. Then test away to find which messaging resonates most with your visitors.

At a minimum have 2 variations of ad copy running within each ad group. If volume supports it, add a third. Look at your competitors. What are they doing? Think of ways to stand out and catch the attention of your audience. Test Google’s new long headline option. Most important: your ad should work to get the click, not sell your product. You need to attract the right audience with ads and then optimize your website to convert the browser to a buyer.

Useful link: Writing better Adwords Ads

3.       Get Hard Data from Soft Conversions

Not all conversions are created equal. An online sale is what e-tailers seek but requesting a catalog, doing a store location look-up, visiting a shipping options page, signing up for a newsletter are high value actions that signal visitor buy interest. We call these “soft”, “micro” or “secondary” conversions to the primary conversion which is a sales transaction.

Track these secondary conversions to the keyword level. Google AdWords allows you to set up several conversion actions. Alternately, you can use a web analytics platform to track these actions. Regardless of the method, do it. You may find that broad terms don’t drive sales conversions but they do drive the types of digital “tire-kicking” that precedes a sale. Over time you should be able to build a model and assign values to the secondary conversions.

Understanding what on-site actions may precipitate a sales conversion can help predict behavior and also enable you to value the contributions of keywords more accurately.

Useful link: Using Google Analytics for Secondary Conversions

4.       Test Google Ad Extensions

The  ad product extensions in Google have been rolling out with greater consistency of late. These features enable ads to communicate more data about the product or service being promoted.  Some ad extensions can only be activated by connecting other Google services. For example, Product Extentions requires an existing Google Merchant Center account.  By setting up a Google Merchant Center account, ads can include product attributes in your AdWords ads via a “plusbox” for users to click. Product extensions can show images, titles and prices of products that match searcher’s queries.

Product extensions will not appear on other Search Network sites, or on Display Network sites. This will be the first holiday season where product extensions are widely available although they are technically still in limited beta release. Our experience showed in increase in CTR on such ads last holiday season. Was there a direct correlation to increased sales? No, and for that reason we suggest you test before full adoption. But Google touts their greatness and we suspect that in time they will become a regular addition to ecommerce PPC programs.

A number of other ad extensions are in limited release. One of note is the Seller Rating Extension. You’ve probably seen these already. If a merchant is rated with at least 4 stars (of 5) and a minimum of 30 reviews, the rating will be posted in the ad. Visitors have the option of clicking through to read reviews at no cost to the merchant.  Don’t forget the other extensions such as Sitelinks, Video (in beta), and location extensions. Test them out and see if they improve the quality of visitors to your site.

Useful link: Google Ad Extensions

5.       Multiple Touch Points: Buyers Are Everywhere

You really can’t predict when your ideal customer is going to take action. As a result, you need to deliver your message when the chances for action and influence are highest.  Though PPC will get a lot of credit for sales, other media channels influence the effectiveness of paid search. As all good media planners know, the cumulative effect of a well-developed media plan is more impactful than the individual components. The same can be said for search. I’m not suggesting go out and throw caution to the wind, but rather test your way to a program that includes search engine optimization, social media channels, display advertising, paid and mobile search. Utilize a tool like Google Analytics, Omniture or Coremetrics to measure the on-site behaviors.

Useful link: Multichannel Digital Marketing

Chart: What types of online advertising marketers are using - Confluence Digital blog

Click image above to enlarge and view in separate window.

Please share your thoughts and opinions with us. For as much data as is created in online marketing, there’s still very much room for discourse on the subject. What’s good for one client might not work well with another and we’ve experienced that. And if you have a question where we might be able to provide assistance, don’t hesitate to contact us.

Don’t forget to check out Parts 1 and 3  (coming soon!) in Eric Layland’s three-part Q4 Online Retail Performance Tips series:

Part 1: 5 Must-Do Tips for Awesome PPC Results in Q4

Give us a call if your paid search program is not meeting its potential, you need help optimizing your website for search (SEO) or are interested in social media marketing, conversion funnel optimization, landing page design or any other aspect of digital strategy.

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