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Online Marketing - How to use Search to Display ReMarketing to lower Cost of Acquisition

Online Marketing - How to use Search to Display ReMarketing to lower Cost of Acquisition

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  • 1. Android Tablet
    Search
    Get More Customers
    Buy
    Search ReMarketing
    Using SearchReMarketing to lower Cost of Acquisition
    03, May 2011
    pj | pj@beingpractical.com | www.beingpractical.com
  • 2. Being Practical: Search Remarketing to lower Cost of Acquisition
    #1 the background
    eCommerce has two types of sales:
    a. Impulse Buys
    - Low priced product or service; More of Direct Marketing
    - Impulse because of offer and deals
    - Driven by on-site marketing or direct marketing
    - Mode of acquiring new consumers; wafer thin margins – profits only at scale/volumes
    - Typically products are sold just above the cost price (if branded product)
    - Or a notional discount if the product is unbranded
    b. Intent driven Buys
    - Branded product or high priced
    - Requires consumer to indulge, categorized as conscious purchase decisions
    - User completes full AIDA cycle (Attention, Interest, Desire and Action)
    - User discovers this product – through search (paid, natural or on-site)
    Note: Impulse Buys gives Volumes; Intent Buys gives Margins
    typically only for product driven ecommerce ventures; verticals like travel, services, etc - vary
    www.beingpractical.com pj@beingpractical.com
    copyright: beingpractical.com
  • 3. Being Practical: Search Remarketing to lower Cost of Acquisition
    #2 overall conversion rates
    Site Average
    1% - 2%
    Requires average 100 visitors from all channels to complete 1 transaction
    Conversion rates greater than 1% depends on:
    - Usability, Navigation of the website
    - Tools to discover products & offers (long tail discovery)
    - Payment options available
    - Locations Serviced
    - On-site Marketing & Personalization
    - Ownership of Category (Ex. Amazon for Books)
    - Brand, Customer Service, Loyalty (all built over time)
    Note: The presentation may be valid for product ecommerce services; Numbers and examples for deals, travel, classified and other services may vary Though the concept of Search Remarketing will be applicable to all verticals
    www.beingpractical.com pj@beingpractical.com
    copyright: beingpractical.com
  • 4. Being Practical: Search Remarketing to lower Cost of Acquisition
    #3 typical conversion rates by marketing channels
    Visitors per Customer Acquisition
    Email
    80 – 125 visitors
    0.80% to 1.25%
    Direct Site
    110 – 135 visitors
    0.75% to 0.90%
    Unpaid Channels
    SEO
    135 – 225 visitors
    0.45% to 0.75%
    Social
    500 – 1000 visitors
    0.10% to 0.20%
    Search Marketing
    50 – 65 visitors
    1.5% to 2%
    Paid Channels
    Display Advts
    250 – 390 visitors
    0.25% to 0.40%
    Social Advertising
    285 – 1000 visitors
    0.10% to 0.35%
    Affiliates
    145 – 250 visitors
    0.4% to 0.7%
    www.beingpractical.com pj@beingpractical.com
    copyright: beingpractical.com
  • 5. Being Practical: Search Remarketing to lower Cost of Acquisition
    #4 search marketing v/s display marketing
    Search Marketing:
    > Very high user intent
    > User searching for product / service> Enticed more towards – Intent based marketing
    Display Marketing:
    > Enticed more towards – Impulse buying (if good offer/deal)
    > Very low on user intent
    > Spray and pray approach
    Conversion Rate: Search Marketing > Display Marketing
    Conversion rates on traffic acquired through search marketing are 5X-6X times more likely to convert compared to traffic acquired through display marketing.
    www.beingpractical.com pj@beingpractical.com
    copyright: beingpractical.com
  • 6. Being Practical: Search Remarketing to lower Cost of Acquisition
    #5 how conversion metrics work
    Display Marketing:
    Search Marketing:
    50 - 65
    250 - 390
    Visits to convert:
    Visitors per conversion
    Visitors per conversion
    1% - 3%
    0.1% - 0.2%
    CTRs:
    Typical click-thru-rate on paid search
    Typical click-thru-rate on display banners
    10 - 15 INR
    4 - 10 INR
    Avg CPCs:
    Avg Cost per Clicks on with good spanof keywords & campaigns
    Avg Cost per Clicks by various NetworksGoogle display rates on lower average
    Numbers shown in INR (Indian National Rupee)
    www.beingpractical.com pj@beingpractical.com
    copyright: beingpractical.com
  • 7. Being Practical: Search Remarketing to lower Cost of Acquisition
    #6 acquiring one customer by:
    Display Marketing:
    Search Marketing:
    500 - 975 INR
    1000 – 3900 INR
    Cost of Customer Acquisition:
    to acquire one customer through search
    to acquire one customer through display
    Lower Price Range for Search: = (Lowest CPC) x (Min Clicks to Convert) = 10 x 50
    = 500
    Lower Price Range for Display: = (Lowest CPC) x (Min Clicks to Convert) = 4 x 250
    = 1000
    Highest Price Range for Search: = (Highest CPC) x (Max Clicks to Convert) = 15 x 65
    = 975
    Highest Price Range for Display: = (Highest CPC) x (Max Clicks to Convert) = 10 x 390
    = 3900
    Numbers shown in INR (Indian National Rupee)
    www.beingpractical.com pj@beingpractical.com
    copyright: beingpractical.com
  • 8. Being Practical: Search Remarketing to lower Cost of Acquisition
    #7 so now you know that:
    > Though CPCs are on higher side in Search Marketing; conversions are also high.
    > If you have tried using display marketing for conversions before (directly or through any advt-networks) – conversions would be low with high cost of acquisition> Display Marketing seems tempting in comparison to Search for low CPCs
    Now welcome to: Search to Display Remarketing
    www.beingpractical.com pj@beingpractical.com
    copyright: beingpractical.com
  • 9. Being Practical: Search Remarketing to lower Cost of Acquisition
    #8 what is Search to Display Remarketing
    Part 1: Get users from Search Marketing
    > Increase CPC spend on Search Marketing to get more users with high intent
    > X number of users will get converted to customers> Y number of users will drop out
    Part 2: Target search drop-outs on Display Networks
    > Y users still have high intent and now they know about your service
    > Target these Y users on display networks with higher CPCs / CPMs> Show contextual and relevant display advertisements w/t correct landing pages
    www.beingpractical.com pj@beingpractical.com
    copyright: beingpractical.com
  • 10. Being Practical: Search Remarketing to lower Cost of Acquisition
    #9 why Search to Display Remarketing is effective
    Step 1: Acquire users through Search Marketing:
    50 - 65
    Visitors per conversion
    12 - 20 INR
    CPC - Increase Paid Search by 20-45%
    Get more valuable clicks with high intent
    Search Dropouts
    600 - 1300 INR
    Cost to acquire one customer
    Customer Acquired
    Numbers shown in INR (Indian National Rupee)
    www.beingpractical.com pj@beingpractical.com
    copyright: beingpractical.com
  • 11. Being Practical: Search Remarketing to lower Cost of Acquisition
    #9 why Search to Display Remarketing is effective
    Step 2: Know the value of dropped out users
    High Purchase Intents
    In simplistic terms
    588 - 1280 INR
    In monetary terms
    Search Dropouts
    Customer Acquired
    Numbers shown in INR (Indian National Rupee)
    www.beingpractical.com pj@beingpractical.com
    copyright: beingpractical.com
  • 12. Being Practical: Search Remarketing to lower Cost of Acquisition
    #9 why Search to Display Remarketing is effective
    Step 3: ReMarket to search dropoutusers now on Display Networks
    Buy Now
    Buy Now
    Targeted displayadvertisements
    Buy Now
    Search Dropouts
    10 - 15 INR
    > Increase CPC on such targeted display advts
    > Communicate most relevant messaging
    > Apply techniques like Frequency Capping at impression/click levels
    www.beingpractical.com pj@beingpractical.com
    copyright: beingpractical.com
  • 13. Being Practical: Search Remarketing to lower Cost of Acquisition
    #9 why Search to Display Remarketing is effective
    Step 3: ReMarket to search dropoutusers now on Display Networks
    1 Customer
    Acquired originally through Search Marketing
    Search + Display Dropouts
    2 - 3 Customers
    Customers acquired through Display Re Marketing
    Customer Acquired thru
    Display Remarketing
    3 - 4 Customers
    Customer Acquired thru Search
    Total Customers Acquired
    www.beingpractical.com pj@beingpractical.com
    copyright: beingpractical.com
  • 14. Being Practical: Search Remarketing to lower Cost of Acquisition
    #9 why Search to Display Remarketing is effective
    Step 4: Summarize effectiveness of Search Remarketing
    1090 - 2260 INR
    Total Costs:
    Search Cost (600 – 1300 INR) + Display Remarketing Cost (490 – 960)
    3 - 4
    Customers Acquired:
    Search (1 Customer) + Display Remarketing Cost (2-3 Customers)
    363 - 572 INR
    Cost per Customer Acquired:
    Much lower than earlier Customer Cost of Acquisitions
    www.beingpractical.com pj@beingpractical.com
    copyright: beingpractical.com
  • 15. Being Practical: Search Remarketing to lower Cost of Acquisition
    #10 Closing Remarks!
    1: Do not treat Search and Display as separate channels to acquire customers
    2: Search Remarketing through Display will help reduce your cost of acquisitions by 25% to 65%*
    3: Always look for cross-channel marketing opportunities
    * High reduction of acquisition cost if only one category of products/services are offered.
    Read between the lines – you will find means to reduce cost of acquisition further by 10% to 20%. Or mail me for details – pj@beingpractical.com
    Want more?:
    www.beingpractical.com pj@beingpractical.com
    copyright: beingpractical.com
  • 16. #thank-you
    Note: All thoughts, concepts mentioned and views expressed are made in personal capacity.
    All brands mentioned here owned by respective owners.
    www.beingpractical.com pj@beingpractical.com