PPC is innovating all the time, with new features and techniques bringing new opportunities. Find out how automation for PPC ads can be really beneficial for retailers.

1. © Search Laboratory Ltd 2014. All rights reserved.
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Retail PPC (is hard!)
IRX 2015
Pete Whitmarsh – 25/03/15

2. Background

3. Intro – aka. Why should I care?
0
500
1000
1500
2000
2500
3000
2007 2008 2009 2010 2011 2012 2013 2014
Annual Number of Searches (Billion)
Annual Number of Searches (Billion)

4. Total % of clicks to paid
20.00%
22.00%
24.00%
26.00%
28.00%
30.00%
32.00%
34.00%
36.00%
2009 2010 2011 2012 2013 2014
Text Ad + PLA Click-Through Rate
Text Ad Click-Through Rate

5. Which position?
Top 3 are important
CTR on lower positions
decreasing
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2009 2010 2011 2012 2013 2014
Click-Through Rate in
Paid Positions
Position 1-3
Position 4+

6. Evolving SERPs
2010 NOW
45% Paid 88% Paid

7. Setting Targets

8. Target setting
AOV = £60
Average margin = 30%
Average profit per sale = £18
CPA target = £15
Product AOV Margin Profit per Sale
A £30 30% £9
B £60 20% £12
C £90 40% £36

9. Target setting
Don’t use CPA as a target
(Unless you only have one product)
…or number of clicks, conversions etc.

10. ROI / ROAS / Cost of sale
Average margin = 30%
Target Cost of Sale = 25%
Target ROAS = 400%
Product AOV Margin Profit per Sale
A £30 30% £9
B £60 20% £12
C £90 40% £36

11. Target ROAS / ROI
Can be used…
…but only if you have a static
margin
Encourages lower volume
ROI
Spend

12. Profit
Spend
Profit
Profit increases to a point
Hard to know what shape
this curve is
Ultimate goal is to find the
point of diminishing returns
Point of diminishing
returns

13. Profit
The best measure of success
Give your agency the right data to provide this
– Cost price of items
– Margins per item
If possible, don’t cap the budget

14. Valuing Clicks

15. Valuing clicks
Understand the value of every click
Core principle of PPC
Simplest form…
𝑃𝑟𝑜𝑓𝑖𝑡 𝑝𝑒𝑟 𝑠𝑎𝑙𝑒 × 𝐶𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑟𝑎𝑡𝑒 = 𝐶𝑙𝑖𝑐𝑘 𝑝𝑟𝑖𝑐𝑒

16. The bidding problem
What is the conversion rate of a
keyword with 1 conversion from 10
clicks?
Only 95% sure that the Conversion Rate is
between 0.25% and 44.5%

17. The bidding problem
Determining the conversion rate on broad high-volume terms is easy
The problem occurs in low-volume long tailed terms
Solution:
– Look to other similar terms

18. What else influences conversion rate?
Time
Season
Location
Device
Weather
Previous visits to site
Make suitable adjustments to take advantage of this

19. Time of day
Opportunity to adjust bids based on performance
0
5
10
15
20
25
30
35
40
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Conversion rate Average Conversion Value

20. Location performance
Best converters (>5.5%) Worst converters (<4%)

21. The full value of a click
Understand the full value of a click by considering
– Paths to other campaigns or channels
– Lifetime value
– In store visits
– Cross device conversions
– Referrals
– Brand awareness
– Micro conversions
– Returns

22. Large product inventories

23. Consider
Different levels of keywords
Men’s
Shoes
Men’s
smart
shoes
Men’s
black
leather
shoes
Men’s
black Ted
Baker
shoes
Ted Baker
MARTT
shoes
black
MARTT shoes
Ted Baker
black lace
ups
Men’s black
derby shoes
Size 9
designer
shoes
Men’s
dress
shoes

24. Granularity

25. What happens when…
Price changes?
Product goes out of stock?
Product comes back in stock?
Product gets renamed?
URL changes?
New colour gets released?

26. Category level

27. What happens when…
Minimum price changes?
Minimum priced item goes out of stock?
New cheapest item?
Range decreases to 4?

28. The problem of scale
Granularity is easy for a small set of products, but…
We often have a colossal number of potential Ad Groups
Keeping up-to-date is a difficult problem

29. How do we solve it?
More people or less granularity?
Equivalently:
– More operating costs or lower return?
How about a third option…

30. Creation
Updating
Bidding
Error
checking
Integration
Automation
Keywords
Ads
Ad groups
Campaigns
Prices
Stock
Sales
Pauses
Keyword-level
Structured
Mathematical
Double checks
Manual & automated
Ad platform API

31. Brand Bidding

32. Bidding on brand
Do you…
– Bid on brand terms?
– Avoid brand terms?
– Test whether it actually makes a difference?

33. Brand bidding
Our methodology
– 20 minute randomised
intervals
– Paid vs Organic report
Recent results:
Queries Clicks CTR
Both shown 16525 15004 91%
Organic Only 26129 19020 73%
Increase in CTR 18%
Extra Clicks as a Result of PPC Ads 2975
Total Cost £990.07
Cost per EXTRA click £0.33

34. Product Listing Ads /
Google Shopping

35. PLAs
Top recommendations
– Get your title right
– High quality images
– Keep feed up-to-date
– Normalise colour terms
– Calculate your bids
– Split brand and non-brand
– Use negative keywords
– Consider the competition

36. Going Global

37. Global Market

38. Considerations
Website:
– Local payment methods
– Localised address fields
PPC accounts:
– Research how people search
– Research what messages people respond to
– Research what competitors are doing

39. Make sure you get it right…
Don’t just translate
People search differently
People respond to different
messages

40. …Even in English
Pants / trousers
Thongs / flip-flops
Sneakers / trainers
Sweaters / jumpers
Court Shoes / pumps
Braces / suspenders
Vest / waistcoat

41. Takeaways

42. Takeaways
Paid search is still growing
Pick sensible targets – not CPA
Calculate bids and bid adjustments according to performance
Use automation to take it to the next level
Test brand term performance
Get your PLAs right
Go global – but be sensible

43. Email:
Tel:
Web: www.searchlaboratory.com
Twitter: @searchlabs
Contact details
Pete Whitmarsh
Peter.Whitmarsh@searchlaboratory.com
0113 2121211