5 Mobile Strategies for Improving Conversion Rate and Average Order Value

The rise of mobile ecommerce has been a topic of conversation for quite some time. Over recent years, mobile shopping trends have been limited to mobile accounting for a majority of website traffic, cross-device shopping experiences, product browsing, and brand engagement. Despite these trends,  ecommerce experts have been forecasting that one-day mobile shopping will be of greater transactional value than desktop.

For instance, consumer data software giant, Statista, predicted that by 2020 mobile ecommerce would make up 70.4% of total eCommerce sales.  Well, it is 2020 and Statista was onto something.

Today, more than ever, consumer behavior is changing and mobile ecommerce is one of those consumer changes.

As we begin to close out this fiscal year, Something Digital’s Digital Strategy team has been heavily analyzing mobile ecommerce trends.

One of the biggest data trends that our Digital Strategy team has unveiled is that mobile ecommerce sales have started to top desktop eCommerce sales in regards to the quantity of orders, but desktop still accounts for a majority of revenue. Why? Because on average, desktop conversion rates and average order value are still higher than mobile.

 

Below is a sample data set of the Digital Strategy’s’ team findings.
KPI

 

Desktop Avg.

 

    Mobile Avg.

 

Transactions 43% 55%
Revenue 50% 49%

 

 

KPI

 

Desktop vs. Mobile

 

            Notes

 

Avg. Order Value

 

   +23%

 

Desktop avg. order value is 23% higher than mobile avg. order value.

 

Conversion Rate    +101% Desktop conversion rate is 101% higher than mobile conversion rate.

 

Mobile is the leading device in the number of orders at 55% of total online orders.  Online revenue is nearly split 50/50.  However, desktop is the leader in having higher avg. order value and conversion rates.

These data points prove that mobile really is starting to bridge the gap on desktop, but strategic mobile optimization still needs to take place to fully close that desktop barrier.

 

With that being said, here are the five mobile strategies that focus on improving conversion rate and average order value:

 

1. Product Merchandising

On avg, 10% of all mobile product clicks will be from products within the first five product listing positions on a category page. Knowing that most users are going to click on a products quickly versus scrolling through pages of product offerings, a strategic way to increase mobile avg. order value is merchandise products with a higher price point within the top five product offerings on category pages.

 

2. Shop the Look (Up Sells)

One of the more simple ways to boost avg. order value is taking on the Shop the Look strategy. This version of an upsell is a common tactic to showcase related products to the consumer as they enter the checkout process. The idea is that you are selling an entire outfit or a whole product set rather than just one product. Here is an example of how beauty company Bliss uses the Shop the Look strategy to upsell an entire beauty collection:

To the left is the product the user clicked on and to the right is the related product Bliss is looking to upsell to the potential customer. They use the wording Perfect Pairing to indicate that these products pair well and should be purchased together for a complete product experience.

 

3. Clear Call to Actions that Encourage Conversion

Designing your user experience with a mobile-first approach includes the strategy having a clear call to actions that live above the fold on a mobile device. As seen in the example below from Robert Graham’s mobile website, the calls to action are easily accessible on mobile making the checkout process more intuitive to users.

 

4. Page Speed

In simplest terms, page speed refers to the faster your pages load the more likely users are to convert. In a study performed by Google, researchers found that as mobile page loads increase between one second and ten seconds, a user is 123% more likely to bounce. Google also discovered that if a mobile page speed rises anywhere between 400 – 6,000 milliseconds users are 95% less likely to convert.  Focusing on page speed can have major impacts on conversion rates.

 

5. Personalization

Using personalization as a strategy can increase both avg. order value and conversion rates. By making your website a personalized experience, eCommerce businesses have the opportunity to serve the correct products to users right away, which will have positive impacts on avg. order value and conversion rates. In fact, consumers are 80% more likely to convert  & are willing to spend 50% more on their purchase when served a personalized experience.

Although desktop is still the reigning champion when it comes to eCommerce revenue share, mobile is putting up a good fight. The data shows that consumer behavior is changing.  Following these five strategies will help your ecommerce website adapt for when mobile becomes dominant.

Looking for help with your brand’s digital strategy? Contact us.

COVID-19 and Holiday 2020: Tips for Success

Many retailers are understandably worried about Holiday 2020 in the wake of COVID-19. As the economy worsens, are consumers going to cut back on spending? Will a second wave of the virus continue to halt in-person gatherings and therefore, holiday gift purchasing? Should holiday marketing budgets shift to account for this new environment? In the last few months, Something Digital has been fielding these questions from clients who struggle to plan for an uncertain future. As a strategic-minded agency, we always look toward the data to help us make informed decisions.

A July 2020 report from Gladly and Future Commerce found,

“While uncertainty around in-person Holiday celebrations persists, gift-giving may be more important this year than ever before: 12% of consumers say they’ve already started shopping for this year’s holiday season.”

During an August Virtual Commerce Lab that Something Digital hosted, ShipStation, Klaviyo, and Signify all predicted that this holiday season will be the highest grossing revenue period to date for most retailers.

When it comes to marketing spend, Salesforce notes,

“It’s probably no surprise that marketing budgets are shrinking in some capacity. However, digital spend will increase with a focus on performance media and marketing. Awareness media will still be important to fill the funnel, but efficiency, measurement, and attribution will be necessary as marketing spend gets further scrutiny.”

So, what does this mean for online retailers? Read on for our tips on how to approach Holiday 2020.

Plan for BFCM to Hit Early

Salesforce makes two interesting points in the aforementioned blog post:

  1. A later Amazon Prime Day (likely in October) will push consumers to begin their holiday shopping sooner.
  2. Due to restraints on delivery, gifts must be purchased earlier this year to safely ensure an on-time holiday arrival.

 

Waiting to push promos and amp up marketing initiatives until the week of Thanksgiving is definitely a mistake. In the past few years, we’ve watched the BFCM period balloon from Black Friday to Cyber Monday (four days) to a full month in some cases. In an SD blog post from 2019, Phillip Jackson pointed out that “Black Friday deals now extend throughout the entire month of November.” With an earlier Amazon Prime Day, delivery delays, and more virtual gift giving this year, it seems inevitable that holiday strategy needs to stretch over a much longer period. Ask yourself this: would you rather incentivize shoppers early or follow the same plan as last year and deal with the inevitable returns that come flooding in when gifts aren’t received on time?

Other options that retailers might consider are buy online pick up in store (if applicable) and local delivery.

Re-Evaluate Your Digital Marketing Plan

If you work with a digital agency, now is a great time to start strategizing with them on holiday 2020. What worked in the past might not work in the future; being agile and testing as much as possible is going to be extremely important this year. These are my top recommendations when it comes to digital marketing:

  • Segment your audience as much as possible – by demographic, location, status (new or returning), and device.
  • Regularly test your creative (make sure you have more assets than usual) and optimize based on results.
  • Ensure that view-through conversions are tracking and that ad platforms are using the right attribution model. If you’re still relying on last-click, now is a good time to switch to a data or position-driven model.
  • Think carefully about language. It’s safe to say that in-person holiday gatherings will be few and far between this year (especially for families who don’t live in the same city). Future Commerce and Gladly state, “Now is the time to remind consumers about the love language of gift-giving as a way to connect from afar.” Don’t harp on the depressing aspects of COVID but do remind consumers about the changes the virus has spurned this year.
  • If possible, consider spending money on personalization tools. Landing pages, banners with tailored promos, and customized upsells/cross-sells all help improve traffic return on ad spend (ROAS) for all channels, including digital marketing.

 

If your agency isn’t already talking to you about Holiday 2020, now is a good time to give them a strong nudge.

Optimize Your Conversion Rate

Conversion Rate Optimization (CRO) is a great way to ensure that your website is ready for an onslaught of holiday traffic. Instead of running this initiative during the holidays, it makes sense to start now. CRO is the process of improving conversion rate by implementing strategic changes through data analysis, testing, and iteration. This is how it works:

  1. Analyze data to determine barriers to conversion
  2. Create a hypothesis based on data analysis
  3. Propose and run tests to prove hypotheses right or wrong
  4. Evaluate results and determine test success
  5. Implement permanent solutions for winning tests and use collected data to continue optimizations
  6. Measure ROI of each experiment

 

If someone told you that changing a button color or swapping out some language would have a marked improvement on conversion rate, why wouldn’t you do it? CRO allows retailers to make small changes over time that have a proven, measurable impact. Instead of wasting time on site changes that may or may not work, let data guide the way and help favorably position you for Holiday 2020 success.

If you have questions about Holiday 2020 strategy, don’t hesitate to contact us. Although it seems early, there are only 100 days to Thanksgiving, and we want to help you make the most of them.

A Step by Step Guide on Google Analytics Content Grouping

If you work in ecommerce, then you are most likely familiar with Google Analytics. At its simplest form, Google Analytics can provide you with the data you need. This online analytics tool is a vital resource for reporting traffic, revenue, and tracking other website goals.

But what happens when you are ready to take your analysis to the next level by segmenting data into content groups? This is when Google Analytics configurations become complex and Something Digital is here to help. With this step by step guide, Something Digital will provide instructions on how to configure content groups in Google Analytics and shed light on content grouping best practices.

Content grouping is a feature that allows ecommerce professionals to group content into logical structures based on the functionality and user behavior of their website. For example, if you sell a variety of different shoes online, you can create content groups based on shoe types like sneakers, loafers, or boots. Another common form of content grouping is to aggregate data based on page type, like product detail pages or product listing pages. Once these content groups have been created, you will be able to analyze content group data at the URL, device speed, or default channel level.

So, why does your analytics team need to set up content grouping? With this feature enabled, data can be segmented based on the content you deem most important to your business goals. This is also extremely helpful for high traffic websites with numerous pages. Rather than trying to segment massive amounts of data with Google Analytics default features, content groupings make advanced data analysis easy and efficient.

Now, let’s walk through an example on how to set up a content group in only three steps.

Step 1: Log into Google Analytics and navigate to the admin. Once in the admin, go to view setting and select the view you would like to create the content group. Then click on Content Groupings.

Step 2: Once in Content Groupings, click New Content Groupings and name your content group. For our example, we will name the content group Page Types.

Step 3: Now that we have named the content group, we can configure the groupings. There are three ways you can do this:

  1. Group by Tracking Code: This method utilizes Google Tag Manager to send the data directly to Google Analytics. With this method, you will need to update your dataLayer to capture the category you are using for the content group. Once a new dataLayer variable is created, you will go your GA Pageviews tag, scroll down to more settings, and click content group. From there, you will label the index as 1 and the content group as the variable you created.
  2. Group by Extraction: This method pulls from elements in a page, page title, or screen name using a regex capture.
  3. Group by Rule: This method also pulls elements from a page, page title, or screen name. The difference is that you are not limited to using a regex. Group by rule is the most efficient way to set up content groupings.

 

How to utilize content grouping in reporting

Once your content groups have been created and some time has passed for data to be collected, you can begin to analyze your data by segmenting out content groups. Utilizing content groups while doing an ecommerce analysis is an efficient way to gather conclusive behavioral data of a user group.

First, you can create a custom segment in Google Analytics based on a specific content group. This is an effective way to analyze all of your data within a content group and compare data to all other users or to other content groups.

Another way to gather data based on content group creation is through secondary dimensions. The content groups you have created in the admin will appear as secondary dimensions. From there you can search the exact content group you are looking to gather information on without having to create a segment.

So, once you have created your content groups and apply a segment or a secondary dimension, what metrics should you be analyzing with this new data? Here are three metrics Something Digital recommends:

  1. Exit Rate: Exit Rate is the percentage of exits based on the total number of exits divided by the total number of pageviews. Knowing overall exit rate is a good indication of how users are engaging with the content on specific pages. However, the average exit rate is an aggregate percentage of all your pageviews. Knowing exit rate by your content groups will provide a more granular insights into specific categories.
  2. Conversion Rate: Conversion Rate is the percentage of sessions that resulted in a transaction. Let’s say you are given the budget to re-design only two of your product listing pages but are unsure of which ones need a re-design. Through content group segmentation, you are now able to see the conversion rates based on users who visited specific product listing pages. This is just one scenario of how you can utilize content groups and apply it strategically to conversion rates.
  3. Mobile Metrics vs. Desktop Metrics: Improving the mobile experience is the new fad of ecommerce. With mobile always being top of mind, segmenting by your content groups can give further insight into how user behavior is broken down based on device.

 

Creating content groups can be challenging, but in the end, it is worth the effort. With these capabilities, data analysis will become more precise, strategic, and advanced.  f you are interested in taking your data analysis to the next level, checkout some of the other work our Digital Strategy team handles or contact us!

The Best and Worst of SMS Campaigns

The Unique Trajectory of SMS

Having worked in the retail business for 20 years, I definitely qualify as someone who’s been around the block a few times. I’ve watched a lot of channels and buying models emerge over the past two decades, and these trends tend follow similar patterns, like long ramp up times. Take mobile, in the beginning there were some early adopters who built their sites so that they worked on cell phones, but it was a good three years before responsive web design took hold in the ecommerce space.

This contrasts with SMS, which has bucked all the trends. It’s adoption has been stunning. Retailers and consumers alike went from very cold to very hot on SMS inside of a year. But its accelerated trajectory makes sense for multiple reasons.

First, young people, and those like their parents who interact with them frequently, spend a lot of time using iMessage or WhatsApp. Nearly 100% of the GenZ generation owns a smartphone, and they spend four hours and fifteen minutes a day on them. Just about every social activity begins in an app on the phone, including shopping.

Second, SMS is taking off as a means to market to consumers and support sales transactions because the tech stacks make it easy to do so. We’ve seen an explosion in platforms — Klaviyo, Yotpo, Shopify among others — that offer multi-use capabilities. These platforms provide ecommerce stores with access to seamless sales transactions (shipping updates), marketing (sneak peak at new products) and loyalty building (soliciting feedback) functionality out of the box. As a result of all these use cases, SMS is becoming an important channel to buy products.

Evolution of Skeuomorphism

I gave a talk a few years ago, The Shopping Cart is Dead, in which I observed some of the trends that were laying the groundwork for SMS commerce. One of those trends was that the shopping cart is a skeuomorphic metaphor for the way we shop in real life. We put items in a cart, go to checkout and pay a cashier. The same is true for the way we organize data that we create on our PCs — files look like individual pieces of paper, which are stored in folders that look like manilla folders. Our desktops and online shopping experiences are filled with metaphors for real life behavior.

Mobile phones, on the other hand, have apps, not files and folders, to store user data. They lack the real-world metaphors that dominate the desktop world. This is more revolutionary than you may realize because it lays the groundwork for SMS commerce, especially for the generations of consumers whose experience of the digital world is largely mobile and icon based. These consumers don’t need real-world metaphors in order to buy from and have a relationship with a brand. If they buy something from a brand and receive shipping updates via text, they’re more open to buying from that brand again based on text-based marketing messages they receive.

Let me give you an example. I like candles, and I especially like ones from Otherland. When I first purchased from the brand I agreed to receive shipping updates via text (in other words, I said to the brand “it’s okay to communicate with me via the SMS channel”). Later on, I received a text message from Otherland announcing a new product and offering me the chance to buy it two weeks prior to its official launch. All that was required of me was text “Yes” and Otherland would ship me the new candle using my address and payment info they had on file. I didn’t need to click through to a website, add it to a shopping cart, and go through the checkout process.

Obviously there are many consumers, probably older, who prefer the traditional shopping cart and checkout process, but there’s a growing number like me who enjoy the convenience of simply texting “Yes.” More than that, I value the special relationship I have with the brand. And this is key. As a rule, SMS works when brands use it for more than just for asking recipients to buy something. It’s a channel that’s incredibly useful in building trust and cementing customer relationships.

I’ll give you another example. The DTC brand Buffy Sheets has a loyal base of customers who love the brand’s eucalyptus based products. Buffy enjoyed a brief moment of social media fame when it sent a late-night text to a subset of its customers, all of whom had opted-in to SMS messaging. The message was a light-hearted message (You up?). It was a huge hit among recipients, and nailed Buffy’s unique brand voice. More than that, it was a way to engage their customers without asking them to buy.

Conversely, SMS campaigns fail when consumers don’t have a prior SMS relationship with a brand and they receive text messages asking them to make a purchase. I occasionally buy deodorant from the DTC brand Native. This past Black Friday, Native randomly sent me a text offering 20% off, which I admit I found frustrating. It’s not like Native sends shipping updates as Otherland does, which means I don’t have an SMS-based relationship with them. A few weeks later I received a second promotional text and decided to unsubscribe.

And this is upshot: Brands can win customers and sales via the SMS channel, as long as they build trust beforehand. Building that trust isn’t that difficult — use SMS to inform your customers when their packages have been shipped, when they’ve been delivered and to solicit feedback and product reviews. These are the basic building blocks of customer loyalty. Once they’re in place, consumers will be open to receiving SMS-based marketing messages. Moreover, as the spending power GenZers grows, solid SMS chops will be table stakes for every online retailer.

Want to learn more about SMS marketing? Reach out to SD!

 

5 Unorthodox Metrics to Track this Black Friday, Cyber Monday

After months of preparation, the fatal week known as Black Friday – Cyber Monday (BFCM) has arrived. While most are enjoying their Thanksgiving leftovers, ecommerce analysists are glued to their analytics platform measuring performance by the hour. When considering what metrics to measure, revenue is the most crucial key performance indicator (KPI) to consider during the holiday season. Online retailers will report that holiday sales can account for 20-30 percent of their fiscal year sales. Given this statistic, revenue performance will determine if your business will make it or break it over the holiday. So yes, revenue is important to track.  But what about other critical KPIs?

Conversion rate and average order value are other metrics that come to mind that determine success, but Something Digital is assuming these have already been accounted for in your reporting. So what are these other metrics? We have put together a guide to the five most unorthodox, yet equally important, metrics to track this holiday.

Cart Abandonment Rate

What is it?

Cart Abandonment Rate is the percentage of users who have added a product to the cart, but have exited the site before completing the purchase.

Why should I track it?

Cart Abandonment Rate (CAR) is an essential metric to understand when analyzing shopping behavior. Consumers will add 40-50 percent more products to their cart throughout BFCM, so online retailers can see nearly a 7 percent increase in CAR. So when analyzing CAR, ask yourself, are users comparing prices? Am I offering free shipping? Are my users looking to buy online, but pick up in store? By knowing your CAR, you will be able to better understand where users are dropping off in the consumer journey funnel.

How do I calculate it?

If configured properly in Google Analytics, you can find CAR in the Enhanced Ecommerce section.

If not, you can use this formula to measure:

Search Terms

What is it?

Keywords entered into a sites internal search box used to generate a search results page that showcases specific products based on keyword or combination of keywords entered.

Why should I track it?

Even when in the comforts of their own home, consumers are still overwhelmed with the rush of BFCM. Rather than racing through the aisles of stores, online buyers are now scrolling as fast as they can to find the perfect holiday gift. To get what they want faster, users are likely to rely on your internal site search feature. Analyzing what shoppers are looking for can further help finalize user behavior. Knowing this metric can also act as a catalyst for marketing personalization through the rest of the holiday season.

How do I calculate it?

There is no written formula for capturing site searches. You can obtain search term performance by using the site search reports in Google Analytics. To do this, you will have to set a proper query parameter. Another option is to use your ecommerce platform’s internal analytics tool.

Cross Device Performance

What is it?

Cross device performance references the tracking of the consumer journey across multiple devices, such as smartphones, desktops, and tablets.

Why should I track it?

Understanding cross device performance is another metric that gives insight into the consumer journey during BFCM. For example, 19 percent of Thanksgiving Day cross device transactions begin on desktop, but are completed on smartphones. On Black Friday, 27 percent of orders begin on smartphones, but are completed on desktops.

How do I calculate it?

There are several ways and tools that your company can use to set up cross device tracking. If you are not working with a third party that is tracking this already, Something Digital would recommend using cookies to capture client ID. The process of setting up cross device tracking can be a blog in itself, so for the sake of time, check out this blog or contact Something Digital.

Repeat Purchase Probability

What is it?

Repeat purchase probability is the likelihood of a consumer completing another transaction.

Why should I track it?

Knowing repeat purchase probability is an essential metric to track when analyzing customer retention. The ecommerce ecosystem is hyper competitive, especially during the holiday season. Every day, there is a new promotion being offered by your competition. You can use repeat purchase probability metrics as a competitive advantage when determining customer retention strategies through the remainder of the holidays.

How do I calculate it?

Use this formula:

Bounce Rate

What is it?

Bounce rate is the percentage of users who visit a website, but leave the site after viewing one page.

Why should I track it?

Tracking bounce rate percentages gives insight into the number of users who are not engaging well with site contact. Something Digital recommends tracking bounce rate by landing pages. Knowing where users are leaving your site can provide awareness around your sites user experience & interface performance.

How do I calculate it?

Use this formula:

Conclusion

Revenue, conversion rate, and average order value are all metrics of great importance.  However, there are other key performance indicators to take into consideration during BFCM. Let these five unorthodox metrics guide a deeper level of strategic insight to determine true success throughout the entire holiday season.

Google Shopping

Google Shopping Tips & Tricks Part 3: Bidding & Strategy

After you’ve optimized your shopping feed and configured your campaigns, it’s time to move on to bidding and strategy. This process can be easy or difficult, depending on the type of campaigns you’re running and the internal capabilities of your team. Remember that none of this is finite. If performance isn’t good or you’re struggling to utilize budget wisely, you can always pause everything and get help from an agency or try something that requires less management.

Smart Shopping

If you decide to try running a Smart Shopping campaign, you’re in luck! Almost every single facet of this campaign is automated by Google. There are only four areas where you have control:

  • Daily budget
  • Target ROAS
  • Products in the feed
  • Creative assets

 

It’s hard to advise on budget, because all merchants are unique and have different goals. Typically, I recommend allocating 30-40% of the overall paid search budget to Google Shopping as a starting point. Some merchants may spend up to 60% of their budget on shopping initiatives; it all depends on your goals and what works well during the testing phase.

Once you’ve set a budget, Google will automatically maximize your bids in order to spend the full amount. After running your campaigns for 3-4 weeks, assess your average ROAS. Let’s say that it’s hovering right around 3.6x after the fourth week. At this point, you should go back to your bid settings and configure a target ROAS goal. I typically set this slightly higher than my average return. For a 3.6x average ROAS, I would set my initial goal to 4x. After doing this, you might notice that Google no longer spends your full daily budget. If spending the entire daily budget is a priority, simply lower your target ROAS goal.

As previously mentioned in part II of this series, it is possible to run multiple Smart Shopping campaigns that contain different products, or a mix of Smart and Traditional campaigns. You don’t have to run this type of campaign for your entire product catalog. To figure out what works best, test as much as possible and be sure to document your results each week.

The final area where some control exists is with creative assets. Unlike Traditional Google Shopping, Smart Shopping shows your products in a variety of placements and allows a wider range of asset types (static images and logos, along with product images). Adding and testing different assets is always recommended.

If this type of campaign sounds a bit too basic, Traditional Google Shopping might be more your speed. The primary reason we see clients shy away from Smart Shopping is concern over ad placements. It is very possible that ads could show on off-brand websites, and since Google doesn’t provide good information about any of this, retailers would never know for sure. If brand integrity is a major concern, stick with Traditional Shopping.

Traditional Shopping

Traditional shopping is far more complex and requires significantly more planning and management. Unless you have an in-house expert or plan to work with a very small budget, SD recommends hiring an agency to take on this initiative as it can be very time-consuming.

Managing bidding and strategy for Traditional Shopping could easily be its own three-part blog series, but here is a brief overview of the most important insights I’ve learned over the years:

  • Organize campaigns by high, medium, and low priority settings. These campaigns should use different negative keyword lists and match with different types of queries:
    • High – generic queries that don’t contain your brand name.
    • Medium – queries that contain your brand name.
    • Low – queries that contain specific product names or SKU searches.
  • Utilize a mix of automated and rule-based bidding. After identifying products that don’t have a great return, SD recommends separating them and testing each automated strategy to figure out which works best – maximize clicks, enhanced CPC, and target ROAS.
  • Adjust bids based on audience type and take advantage of lookalike groups. If a user is more likely to buy something, bid up and increase visibility in order to win their business.
  • Test geo-targeted campaigns. If certain cities perform better for you, break them out into a separate campaign with a more aggressive bidding strategy.
  • Test new features. For example, showcase ads contain multiple products and often have a higher CTR. Try running these to see if they work for your business.

 

  • Take advantage of promotions, customer and store reviews, and competitive pricing/shipping. These features all increase CTR and drive customers to convert.

 

With Traditional Shopping, the best advice I can give you is to test everything, carefully document results, and slowly optimize. Success takes time and there will certainly be some pitfalls along the way. What works for another retailer may not work for you and you’ll never find out unless you try.

As always, don’t hesitate to contact us if you need assistance or have questions. Good luck!

The Third-Generation of Paid Search is Here  

Like many of you, I started my career in the dotcom era, when ecommerce was first becoming “a thing.” Retail sites were launching fast and furiously, and Wall Street couldn’t invest in them quickly enough. E-tailers had it easy back then. Customer acquisition costs were low, and paid search was like an ATM that kept dispensing money without ever requiring a deposit. Every one dollar spent on paid search delivered seven or ten dollars in sales. Those were the days!

Back then paid search meant buying text ads in Google, which, by default, was the place that all users began their purchasing journeys. Soon enough, all e-tailers learned that paid search was essentially a gravy train and so they jumped in, which of course, drove up customer acquisition costs and lowered ROI. It was the end of an era.

Then in 2007 Google acquired DoubleClick, along with a bunch of search and display networks, and ushered in the second generation of paid search, which centered on banner ads placed on relevant sites. The theory is that if I’m reading an article on Italian cooking, I would be open to seeing an ad for olive oil. These ads, purchased on a CPM basis, didn’t deliver great ROI, but in aggregate made money for the advertiser. Some retailers did extraordinarily well.

Second-generation paid search led to some important innovations in ad technology. First and foremost is retargeting, aka lead-back campaigns, which has been the gold standard in ecommerce for the past eight or so years. Here’s how it works: users visit your site, perhaps look at items, and you site drops cookies into their browsers. Once they leave your site, they see ads for your brand or the items they viewed wherever they go next, whether that’s the New York Times or Instagram.

It’s not an exaggeration to say that digitally native and D2C brands owe their success to this tactic. By spending a relatively small amount of money, tiny startups with no name recognition, — Hims and Hers, for example — can elevate their brands by simply being ubiquitous. Let that sink in: for consumers who visit a site once, Hims or Hers takes on the same prominence that brands like P&G spent decades and billions of dollars building. This marked the end of the second-generation of paid search, in my mind.

We’re now deep into the third-generation of paid search, which I think is rather unfortunate. Consumers no longer begin their journeys from a single place, but from many: Google, Bing, YouTube, Facebook, Instagram, Pinterest, Amazon, Alibabi, Walmart, among others. Now, in addition to the text and display ads, retailers need video for the highly visual channels, such YouTube pre-roll ads and Instagram interstitial stories. And, like banner ads, video placements come in all different sizes and placements; full screen for YouTube pre-rolls, landscape or square for Facebook feeds, and squished down to fit in a banner or side ad on a news site. Campaigns today need hundreds of creatives in multiple formats and sizes.

The real challenge to third generation paid search is that it requires a multitude of strategies, accommodations and budgets. For instance, Amazon has its own paid search, and Google now has Google Shopping, which means retailers must ensure that both Amazon and Google understand their product catalogs so that those platforms can serve up the right products. In other words, retailers need to format their product data in ways Google, Bing, Amazon, Facebook, etc. can understand it.

To be a marketer nowadays is incredibly difficult. Customer acquisition costs reach higher into the sky while ROI is on the decline. One can’t help but wonder if there is a fourth generation of paid search, and if so, will it lead to more or less fragmentation. If more, what will that mean for marketers?

Clearly, retailers, especially SMB companies can’t be everywhere, which means they need to make strategic decisions. Which channels make sense for your brand? Where on the web does your target audience congregate? Which ad formats work best in those channels.

These are questions Something Digital spends a lot of time talking about with clients, which is one of the many reasons why we developed BULLSEYE, an ecommerce business maturity quiz. We can help you assess the maturity of your business, which in turn helps you make strategic decisions around where you should invest.

At the moment a lot of our customers having good success on Google Shopping because its reach extends beyond Google. For instance, Google Shopping results appear in YouTube. For many retailers, that’s a perfectly fine near-term strategy.

If you have questions about paid search or need help with it, contact us.

Compete Amazon

Budgets are for CFOs, not Paid Search Campaigns

Last year I heard a business partner of ours, David Deppner, say something both startling and incredibly insightful at a conference. David is cofounder of Psyberware, an ad management solution for Magento merchants, and his company (among other things) helps merchants drive efficiency in their paid search campaigns. So when he said, “budgets are for CFOs, not paid search campaigns,” I sat up.

Some context: the discussion at the moment was focused on customer acquisition, and David noted that every marketer is eager to achieve specific customer acquisition costs (CAC) and ROI, and to that end put limits (i.e. a budget) on paid search. This doesn’t really make sense.

Look at it this way: If you knew that every dollar you put into the bank grew into three dollars in six month’s time, wouldn’t you keep depositing your money there? This is paid search. It’s the investment that keeps on growing.

More than that, paid search is all about growing your top funnel. Unlike remarketing or retargeting campaigns, paid search is focused solely on customers to your brand and ecommerce store. Spend a dollar acquiring them and you’ll get your dollar back in the first sale, and additional dollars when they return.

True, many retailers, particularly direct-to-consumer brands, face high customer acquisition costs. But they also have high retention and loyalty rates, which directly translate into repeat sales, which justifies the higher margin they’ll need to pay to capture the customer initially.

I’ll give you a concrete example. Let’s say you’re a shoe brand and one of your evergreen products is a $138 pair of leather sandals, and your average order value is somewhere between $110 and $120. Spending $40 to $50 to acquire that customer is quite reasonable given that you will probably make 25% margin on those sandals. When all is said and done, you’ll get a respectable $35 from the initial transaction, but that’s just the first benefit.  Customers you sell to are 60% to 70% more likely to purchase from you again, and many are likely to recommend your brand to friends and family.

Unfortunately, far too many retailers view paid search as an expense to be controlled and capped, and not as an investment in building the top of their sales funnel, and ultimately the future success of their businesses. Assuming you’ve built a smart strategy and have partnered with the right companies, in theory you should have an unlimited pool of money at your disposal for your paid search campaign. By this I mean, for every one dollar you put into paid search, you stand to add two to three dollars in future sales revenue.

So why do retailers have budgets around paid search spend? Now a cynic may say this is rather self-serving, as Something Digital is a digital marketing company and probably doesn’t want to work within a budget, but that’s not the case at all. We certainly wouldn’t recommend that any company spend more on paid search than it has in the bank. What we are saying, however, is that most budgets allocated are on an accrual basis, in the same way that  PTO is accrued by a full time employee. But that’s not how marketing spend should align.

An intelligent approach is to plan how you are likely to spend your marketing budget over the course of the entire year and to know upfront when higher paid search costs are likely to deliver higher dividends. Case in point: gifting holidays provide the opportunity for retailers to gain up to three new customers from a single customer acquisition. This means if your AOV is $110 and you spend $60 to $70 in paid search, your ROI is lower the first sale, but much higher when you consider $220 from two new customers you didn’t need to pay for. Abiding by strict CAC (customer acquisition cost) and ROI goals during peak gifting periods means you miss out on this upside.

To CFOs, budgets are tools to track performance and assess whether or not the company is investing in the right technologies, processes and market sectors. Without it, CFOs have no real way of knowing if they can meet their financial commitments and responsibilities. That’s not the marketers role.

The marketer’s job is to strike while the iron is hot. When you impose limits on customer acquisition, you needlessly limit the maximum amount of performance you can drive in a calendar year. This isn’t the best way to approach marketing. If Allbirds had taken that approach it wouldn’t be a unicorn (valued at $1 billion) today.

That’s why every marketing budget should offer flexibility to adapt with the demands of the marketplace. It is, after all, the future of your company, and you shouldn’t put a cap on its long-term success.

Google Shopping

Google Shopping Tips & Tricks Part 2: Campaign Configuration

Now that we’ve covered feed management, let’s discuss campaign configurations. When formulating a strategy, it’s important to consider how much time you have to devote to the initial configuration and ongoing optimizations. While agencies might love to organize campaigns as specifically as possible, in-house marketers with smaller teams may prefer simplicity and automation. What works for someone else may not work for you, so always consider the level of effort required before making any big decisions.

Smart Shopping

Google’s Smart Shopping campaigns are for anyone who is in a bit of a time crunch, prefers to automate the heavy lifting, and wants visibility across all shopping placements (search, YouTube, display, and Gmail).

After creating a new campaign, select “sales” as your goal and make sure that your feed (which should be linked from Merchant Center) and country of origin are set. At the bottom of the screen, you will see two subtypes in the AdWords platform:

After you choose “Smart Shopping,” the remaining options are fairly minimal. All campaigns use a “maximize conversion value” bidding strategy, so it is important to set your budget realistically. If you’ve run standard shopping or display campaigns in the past, I suggest using those budgets as a guideline for Smart Shopping. When in doubt, start low and increase over time. Another available option in the “bid settings” section is to “set a target return on ad spend.” Enabling this option right away can stunt your campaign and prevent Google from spending your entire daily budget. I recommend leaving this option unchecked and revisiting it after your campaign has run for at least one month.

After you’ve completed these steps, that’s it! You could technically call it a day, start collecting data, and closely monitoring ROAS.

Product Groups

One other area where you can make optimizations for Smart Shopping is under the “product groups” tab. By default, you’ll notice an enabled group called “All products” that contains everything you’ve included in your approved product feed. If you need to exclude certain products, simply edit the group.

This is where feed custom labels become very useful. Setting these columns to title, category, and/or sku makes it easy to find and isolate specific products. If the products you need aren’t available, you may need to add a column to your feed.

Testing

If you’re already running a standard Shopping campaign without optimal results, consider testing Smart Shopping. Isolate a small group of products, exclude them from your traditional campaign, and include them in your Smart campaign. Monitor the results for at least one month and make a determination based on performance.

Sometimes it makes sense to include certain products in a Smart Shopping campaign while managing others via Traditional Shopping. I occasionally use Traditional Shopping for bestselling products and Smart Shopping for the rest of the catalog. Depending on a client’s needs and performance standards, it may make sense to adopt some combination of the two.

Traditional Shopping

Traditional shopping is more difficult to manage but gives a greater level of control over bidding and optimizations. Since it’s impossible for me to assess which strategy is best for you without reviewing historical data and revenue goals, I’m going to give a brief overview of some common configurations and when you might want to use them:

  • Single product ad groups (SPAGs) are useful for anyone who needs product-level bidding control and has serious time to devote to management. If you have thousands of skus, adopt another strategy because this one will easily suck up all of your time. Instead of separating product groups by category, price, or brand, SPAGs use product IDs. Each product ID becomes its own product group with individual bid settings.
  • Campaigns organized around shopping intent give you control over how much you bid for certain types of users. A user who is already familiar with your brand and searches for a specific product has a high intent to buy, whereas a user who searches for something generic isn’t as good of a fit. By using your campaign’s priority settings and negative keywords, you can ensure that you bid most competitively on users who are likely to purchase.
  • Setting up campaigns by price and profit margin are two other solid strategies. The higher the profit margin, the more I’m willing to spend to send potential buyers to my site. It doesn’t make sense to pay the amount per click for products with wildly different return (unless customer lifetime value proves otherwise).

 

Traditional Shopping puts you in a good position to maximize return, discover new users, and grow your business, but it only works if you have time to manage it. When in doubt, start simple, optimize over time, and if all else fails, test Smart Shopping (or give Something Digital a call ?).

Google Shopping

Google Shopping Tips & Tricks Part 1: Feed Management

If I had a nickel for every time a client asked for Google Shopping feed advice, I could quit my job and move to the Bahamas (sorry SD). For someone not used to configuring or managing these campaigns, the process can seem daunting.

If you are a mid to large merchant (2,500+ skus) on a more complex ecommerce platform, managing your own Google shopping feeds and campaigns is probably not feasible. Instead of reading this article, you should reach out to an agency like SD for assistance. If you’re a smaller merchant who handles digital marketing initiatives in-house, read on for advice on feed generation, optimization, and troubleshooting. By the end of this article, you should have a good handle on the basics and feel ready to get started.

Feed Generation

Assuming you already have Google AdWords and Merchant Center accounts, the first thing you need to do is generate a feed. There are two ways you can handle this:

  • Find an app or extension that can generate a feed for you. There are many good options available, but here are two that I have personally used and often recommend:
  • If you have a small product catalog (under 100 skus) and don’t want to pay for an extension, create a manual feed using Google sheets.
    • If you go this route, make sure you use automatic item updates to ensure that availability, stock status, and price remain accurate over time.

 

At the very least, you should configure your feed to generate each day during a time when site traffic is low. If your product catalog is large, consider splitting the process up into multiple batches to reduce server load time.

Feed Optimization

Once you have a tool to actually generate the feed, you must figure out how to configure it. This help doc gives a good overview of the information and format required by Google. These are the ‘optional’ fields I suggest including if they are applicable to your business:

  • Additional image link
  • Sale price
  • Google product category
  • Product type
  • Identifier exists
  • Product variants like material, pattern, and color

 

If you’re on Shopify, this process should be relatively straightforward. If you’re on Magento, chances are good that this is where you’ll run into the most issues. Since each site’s product catalog and infrastructure is different, it’s hard to predict exactly where you’ll run into trouble. Here are some quick tips that may help if you’re struggling:

  • Only include simple (child) products in the feed and use the item_group_id column to tie them together with the configurable (parent) id. There might be a specific instance where a retailer only wants configurable products in the feed, but this isn’t common.
  • If your products don’t have an associated gtin, mpn, or upc, you can set this column to match simple product id.
  • The attributes in Magento are the only ones available for your feed. If you’re interested in including information that isn’t available (like pattern or material), you must first add it as a Magento product attribute.
  • If you run into feed formatting issues (too many characters, letter case inconsistencies), you can probably set a rule to fix it, either via your feed extension or in Google Merchant Center.
  • If there’s information you want to include in your feed that Google’s standard columns don’t support, you can sneak it in using a custom label. I often use custom labels to differentiate bestselling products so that I can set separate bids for them.

 

If you run into any issues with feed generation (errors, lack of progress), reach out to your development team or the extension creator.

Feed Testing

Once the feed has generated, you’ll want to test it for accuracy. If you’re using Rocketweb there is a “test feed” option that allows you to input skus and quickly see whether or not they are present. This feature is good for a quick spot check, but you should also plan to save the feed as a text file, import it to excel, and do a more thorough review to ensure that all wanted products are present and information is correct.

If products that should be included are missing, take the following steps:

  • Review the product in question in your catalog. Does the information that you expect to see in the feed match up with the way you mapped your columns?
  • Check any feed rules that are currently in use. Could they be impacting this product?
  • If you’re using Rocketweb, also check the product catalog listing to make sure that it isn’t set to “skip from being submitted.”

 

Google Merchant Center

Once you’re confident that the feed is in good shape, submit it to Google Merchant Center. If there are errors, work through them, re-fetch the feed, and remember that you can always set rules to correct bulk errors. At this point, you might be thinking something like, “Wow, this is a tedious process.” If so, you are 100% correct. It can often take several rounds of testing, tweaking, and submitting before you get a feed that has all of the necessary information and adheres to the required format. Be patient, continue testing, and when in doubt, review the Google help docs or reach out to your feed provider. With a little bit of practice, you’ll be participating in Google Shopping auctions in no time.