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Ben Perry, Ph.D., is Paid Search Director at iProspect, responsible for managing all client paid search programs, which comprise paid inclusion, shopping feeds and pay-per-click advertising campaigns. Ben oversees all aspects of paid search at iProspect including campaign strategy, tactical execution, employee training & development, and new product development. During his tenure at iProspect, Ben has worked with clients including Circuit City, Hatworld, Ford, and Citibank. Ben holds several advanced degrees, including a Ph.D. from Ohio State University, and his work has been published in books, industry publications and peer-reviewed journals

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Like Swimming with Sharks: How Online Retailers Can Fish Out Search ROI

Written on
Aug 11, 2006 
Author
Ben Perry  |
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Like Swimming with Sharks: How Online Retailers Can Fish Out Search ROI

Refine Your Ad Copy

One of the core elements of your paid search campaign is the actual messaging of the ad. The measure of its success is click through rate (CTR). A high CTR will mean more visitors to your site and can actually decrease the cost of each click. There are some general guidelines to developing ad copy and the engines are more than happy to disclose these. However, the bidders in the first position have likely undertaken a rigorous program of creative testing and you should too.

You’ll often conduct a search and discover that most of the top bidders have ad copy that looks virtually identical. They are all following the general guidelines, but they aren’t differentiating themselves. You wouldn’t generally run advertisements offline that are identical to your competitors because you’re not giving the consumer any reason to come to your particular store. The same is true online. Test different offers, promotions, and language to find ad copy that resonates with the user and differentiates you from your competition.

Leverage Your Brand

There is considerable debate on this point, but I believe it is usually advisable to bid on your branded keywords. Aside from the fact that others will if you don’t, it also helps you make more money. Branded keywords tend to have a very low cost per conversion and you can use the money saved on those to fund more expensive conversions on non-branded keywords so long as the average is acceptable overall. Doing this sort of global or portfolio-based optimization almost universally produces greater overall revenue than other forms of optimization.

Now the opposing view is that you could just separate the branded keywords and have a higher profit margin. While that’s true, I think there are two distinct benefits to globally optimizing. The first is that it allows you to bid on more non-branded keywords in higher positions. This helps you capture the attention of more users who aren’t already looking for your brand, expanding your customer base and depriving your competitors of those customers. The second benefit is that you gain the lifetime value of that customer who comes on non-branded phrases. On a keyword level, you may have lost money on that first acquisition, but you stand to make it up in the long run.

Pay Attention to Your Inventory

Paid search campaigns for retail products are some of the most difficult campaigns to run because of inventory issues. If you direct all your visitors to high level landing pages, you don’t have to worry about sending them to product level pages that contain out of stock items.

On one hand this is great because nothing kills a conversion rate like being out of inventory for a product the visitor wanted, but on the other hand, you give up the higher conversion rates by delivering the user to a higher level page, and not one that contains the specific product being sought. Thus, a well run paid search campaign for retailers usually involves a balancing act of constantly pushing new landing pages up and pulling others down. This is difficult, but it is the right way to run a retail campaign, and you should take the time and effort to develop a process that makes this possible.

Test Your Landing Pages

The main factors affecting your ability to bid high in the paid search auctions are your profit per sale and your site conversion rate. Because the first is dictated by the economics of your business, you can primarily change this equation by improving your conversion rate. You should direct plenty of effort to improving the total user experience and conversion process on your site, but the first place to start is the landing page. There are well-developed systems and methods of testing and improving landing pages. Put such a process in place and test relentlessly to improve the conversion rates on your site.

Follow these suggestions and you improve your chances of success in the cutthroat, swimming-with-the-sharks online retail marketplace.





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