Strategy

Managing ROI/Performance

Retailers need to maintain focus on the basics, yet also pursue advanced strategies to sell more while keeping costs down. In digital marketing, this will not be easy; average click costs continue to increase, and buyers are spending more time window shopping than ever before. 

Combining ChannelAdvisor’s proven technology with our experience managing search programs for some of the largest companies on Internet Retailer’s Top 500, we’ve identified five challenges and addressed a solution for each that you can implement this year to increase efficiencies and sell more.

In this section you will find a set of strategies that will help you monitor your performance and will help you better understand the ways you can influence Cost and Revenue to an ROI goal.

  1. Daily Performance Checkpoints
  2. Weekly Performance Checkpoints
  3. Improving the Profitability of Paid Search Campaigns
  4. Bidding Long Tail Terms
  5. How to Implement an Ad Test

 

Prerequisites


 

Daily Performance Checkpoints


The objective of the Daily Performance Checkpoints are to make sure that you are not experiencing any sort of delivery issues that are inside or outside of your control. Use these directions to execute a Daily Performance Checkpoint:

  1. Export a Provider Report for the last seven days summarized by day to Excel.
  2. Insert a row between each Provider.
  3. Choose a metric to measure (Clicks, Cost, Revenue, etc).
  4. Use the following formula:  =Yesterday's Data Point/(Provider Total/7)

If this number is greater than 15% in either direction, we would recommend doing some further investigation to pinpoint a root cause. 

Weekly Performance Checkpoints


The objective of the Weekly Performance Checkpoints are to help identify make sure that you are not experiencing any performance issues that are inside or outside of your control.

Use these directions to execute a Weekly Performance Checkpoint:

  1. Export a Channel Report for at least 3 weeks summarized by day and export to Excel
  2. If you have Excel 2008, this can be accomplished by running a pivot table report along with the 'Group Selection' option.
  3. Calculate percentage difference between all weeks or between first week and most recent week

If this number is greater than 15% in either direction, we would recommend doing some further investigation to pinpoint a root cause.

How to Improve the Profitability of Paid Search Campaigns


 

Paid search performance troubleshooting can be complicated and time consuming. Additionally, many methods of optimization will improve ROI but will also dramatically reduce volume. The workflow below should help minimize the negative impact on volume while improving ROI.

MetricIssueReasonFirst ActionSecond ActionThird ActionFourth ActionFifth Action
Revenue (Low) -     
 Traffic Volume Too LowLow Impressions- less than 3 KW per SKUBuild out keywordsCheck match typesCheck devices/Networks  
  Low Impressions- Many keywords marked "low search volume" or below first page bidReview conversion history over life of account, bid up anything with conversion to FPBReview top brands, manually bid to FPB   
  Low CTR<1%Power bid on KW with conversions in historyAdjust bid rules to be more aggressive on increasesSplit out keywords into more targeted ad groupsDraft more relevant ad text 
  Hitting budgetsLook for "limited by budget" or "budget paused" in desktop toolsIncrease daily budgets   
        
 Low Conversion RateA few campaigns with very poor conversion rate, some OKDo all KW have Tracking URLS?Search Query Report (Refine match types, add negatives)URL ScriptorManual Landing Page CheckPower bid
  Whole account conversion rate is poorCheck to make sure kw are not all going to home pageReview checkout process- offer suggestionsOffer competitive analysis (prices, promotions, site usability, etc)  
        
ERS (High)High CostCPCs Too HighPower BidAdjust Bid RulesAccount Cleanup: 6 months with no conversions, bid down  
 Low Conversion RateMany poorly converting KWURL ScriptorSearch Query Report (Refine match types, add negatives)Manual Landing Page CheckPower Bid.Scan for KW with no conversions in past 6 months. Pause or bid down.
  A few high cost, no rev KWSearch Query Report (Refine match types, add negatives)Manual Landing Page CheckBidDelete 
       

Additionally, the strategies below can be used to further refine overall performance:

  1. Adjust your Bid Rules
  2. Powerbid Under Performing Keywords
  3. Use Ad Copy to Increase Quality of Traffic
  4. Pausing Under Performing Networks
  5. Implement  Ad Scheduling
  6. Implement  Geo-Targeting
  7. Analyze Current  Match Type Strategy

When improving the profitability of your paid search campaigns, you must remember that you are effectively limiting your exposure through this channel and will almost certainly see a decrease in Revenue in addition to the decrease in Marketing Cost.  The goal here is to obviously make the decrease in Cost much greater than the decrease in Revenue.

How to Bid Tail Terms


ChannelAdvisor's Automated Bid Manager (ABM) is very effective at bidding high velocity terms to a profitability goal, however it will not bid keywords that do not hit the triggers on your Bid Rules. The default bid rule intentionally leaves out Long Tail (low traffic) Keywords.

The Search Services team at ChannelAdvisor has developed a tail term bidding strategy that will help manage these terms. Here is the process for implementing our Tail Term Bidding Strategy:

  1. Pull a Keyword Report for the Date Range you are using on most of your bid rules
  2. Filter out and delete all rows with keywords that are hitting ABM triggers (Clicks, Cost, Orders)
  3. Sum up the clicks and revenue for the remaining terms
  4. Calculate a  Target Bid  using this formula (Revenue/Clicks) * ERS Goal (in decimal)
  5. Add $0.05 to the target bid (to adjust for Max CPC to Average CPC variance) and submit powerbid through Paid Search.

We recommend doing this on a weekly, bi-weekly, or monthly basis.

How to Implement an Ad Test


To maximize total performance of an ad, there are two metrics that you can use to evaluate: Click Through Rate and Conversion Rate. Your goal here is to obviously increase both.  You will need to implement the test at the Provider and then either report it on directly at the Provider or in ChannelAdvisor.

To view results in Google Adwords:

  1. Implement  Google Conversion Tracking .
  2. (You can leave ChannelAdvisor tracking on the keywords).
  3. Select Ad Groups you want to test.
  4. Create ad versions directly in Google.
  5. Change Campaign Settings to Standard : Show ads evenly over time.
  6. Collect a significant amount of data.
  7. Analyze Data.

To view results in ChannelAdvisor:

  1. Select Ad Groups you want to test.
  2. At the Provider, clone the Ad Group and include some text stating this is a test.
  3. Create ad versions directly in Google.
  4. Change Campaign Settings to Standard: Show ads evenly over time.
  5. Delete or make sure there are no keyword level URLs.
  6. Verify landing pages are the same.
  7. Create detailed keywords  for each ad that describes test (test_ChannelAdvisor_ad1).
  8. Use these keywords and the landing page URLs and generate Ad ID's.
  9. Implement tracking URLs at the Provider.
  10. Collect a significant amount of data.
  11. Analyze data by opening the Keywords Performance tab in Actionable Reporting (Digital Marketing > Marketing Management > Actionable Reporting) and filter by unique text string test_ChannelAdvisor .

Reference


 


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