8 Search Advertising Questions Every Retailer Should Know the Answers to in 2010
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1 8 Search Advertising Questions Every Retailer Should Know the Answers to in 2010 Fresh SEM Ideas Series 2010 January A NetElixir Research Report
2 Introduction Happy New Year! I have the pleasure of presenting to you our first Fresh SEM Ideas white paper of The next few pages are packed with thought-provoking questions and powerful suggestions. We could have made the content a little less heavy. However, we chose not to. After all, search advertising is serious business. At NetElixir, we believe, 2010 marks the beginning of the next generation of search advertising. Knowledge, creativity, adaptability and global mindset will drive our young industry to the next level. In this paper we have hand picked 8 out of the 50+ questions on search advertising, our team is focusing on. We have also shared suggestions and practical advice on how we are trying to address these questions. I strongly urge you to read and re-read this paper and most importantly apply the knowledge to your business. Once you are able to do so in a disciplined manner, I have absolutely no doubt in my mind that your search advertising program will be ready for 2010 and beyond. Wishing you continued success. Regards, Udayan Bose Founder & CEO, NetElixir
3 1. Should I be running paid search advertising campaigns for all product categories? NetElixir Suggests: ;="#(326*"<">$"&2//./0"?%.*"-$%&'("%*+$&,-./0"'%@?%.0/-"A3&"%66"?&3*2'5"'%5$03 Identify the products you want to advertise and the ones you don t. (Based on your campaign objectives like product margins, wave making ability, etc.) For typical retailer search campaigns, 55% of keywords are linked to specific products, 20% of keywords are generic, 15% are brand specific and 10% are linked to unique situations. (Example. Special occasions, target markets, etc.). high Aspirant Products (must adver@se) Star Products (must adver@se) `ues@on Mark Products (Jhink twice before adver@sing) Wave Makers (adver@se on a case by case basis) Wave Making Capability** high ** Wave Making Capabilitya Products that oren lead the visitor to consider other complementary products, as well. (Example. Shoes have the wave making capability of leading to a sale of socks.) -2-
4 2. What are the short term and long term goals of my paid search advertising program? NetElixir Suggests: Ehat are the short term and long goals of my >aid search ad+er,sing >rograma DO NOT START paid search advertising without setting short term and long term goals. (Our experience shows that many retailers often do not have a measurable goal for their search advertising campaign.) NetElixir Suggests: DX #XJ SJ!YJ paid search adver>sing without sefng long term and short term goals. Ensure that the goals are measurable. (What cannot be measured cannot be (Xur experience showsq thoughq that many retailers oren do not have a measurable goal managed.) for their search adver>sing campaign). Look beyond just using search advertising for customer acquisition. Ensure that the goals are measurable. (What cannot be measured cannot be managed). gook beyond _ust using search adver>sing for customer acnuisi>on. Sample Search Advertising Goal Sheet Sam>le Search )d+er,sing Goal Sheet Goals Key Performance Indicators (KPI s) Industry Benchmark Internal Targets Profitable customer acnuisi>on Example: Profit/click Drive new visitors to website Example: % new visitors from search versus all new site visitors Impression Share for top 50 keywords Example: Share of Impressions previous month versus this month
5 3. Are the Key Performance Indicators I use to measure SEM performance outdated? Are the Key Performance Indicators I use to measure SEM performance outdated? KPI (need to re think) KPI (suggested, 2010) Sa,ona6e Dpend Z>liia>on Cost per!cnuisi>on Cost/Revenue The average value per sale has been erra>c over the past 12 months. The suggested KPI of Cost/Revenue is a more efficient metric in present >mes. Value Per Click Revenue / Click Profit/Click This helps in focusing on profitable products. Return on Investment (incorpora>ng click to conversion latency) Revenue (within 30 days arer first click on search ad) / Investment Revenue (within 60 days arer first click on search ad) /Investment The suggested metric is more relevant today when the click to conversion >me (latency) has gone up by 20%+ in many categories
6 4. How efficiently am I using search advertising for advertising short term marketing promotions? 38 eu'ie/tl4 %? < usi/g se%r'( %*+er,si/g s(3rt ter??%r7 NetElixir Suggests: Create 90 day Campaign Plan based on marketing promotion calendar. Customizing existing campaigns for the promo is more effective than creating new campaigns. Tailored landing pages are essential for maximum impact. Treat each promo linked campaign as a unique project with defined performance goals. Develop specific KPI s (in sync with performance goals) to measure performance. Measure actual campaign performance and document the learnings. Build an in-house knowledge base that captures each promo campaign so that you can apply the learnings in future. etelixir suggests: Create n5 day Campaign Plan based on marke>ng promo>on calendar. Customiiing e)is>ng campaigns for the promo is more eoec>ve than crea>ng Tailored landing pages are essen>al for ma)imum impact. Treat each promo linked campaign as a unique project with defined perform Develop specific KPI s (in sync with performance goals) to measure performa Measure actual campaign performance and document the learnings Build an in house knowledge base that captures each promo campaign so th pply the learnings in future. Short Term Promo Campaign -5-
7 5. How often do I analyze and tune my keyword list? NetElixir Suggests: Keyword analysis and tuning exercise needs to be done at least twice a month. Tow oven do < analywe and tune my keyword lista Before adding or removing a keyword, weigh its importance and contribution towards the entire campaign. NetElixir Suggests: Keyword analysis and tuning exercise needs to be done at least twice a month. Often, advertisers dump thousands keywords in the account without asking the Before adding or removing a keyword, weigh it s importance and contribu>on towards simple question Why am I adding this keyword? We have seen advertisers the en>re campaign. announce with a sense of pride that their account has half a million keywords. XRen, adver>ser dump many thousand keywords in the account without asking the In most cases they do not have a clue as to how many of these are really performing per expectations. simple Nues>on why am I adding this keyword q +e have seen adver>sers announce with a sense of pride that their account has half a million keywords. In most cases they Keywords are the most important element a search advertising campaign because through them you are trying to be visible to the appropriate searcher seg- do not know have a clue as to how many of these keywords are really performing per expecta>ons. ment during different stages of the buyer consideration cycle. Manage your Keywords are the most important element of a search adver>sing campaign because through them you are trying to be visible to the appropriate searcher segment during keyword list with CARE. different stages of buyer considera>on cycle. Manage your keyword list with CARE. Analysis Table Keyword Related Product Type Match Type )c,vity Period X contri=u,on towards campaign revenue X contri=u,on towards campaign cost )c,on Taken (post analysis) Expected outcome -6-
8 6. Is my paid search advertising program in sync with other online customer acquisition campaigns? NetElixir Suggests: Is my >aid search ad+er,sing >rogram in sync 8ith other online customer acyuisi,on cam>aignsa A Paid Search advertising campaign delivers superior returns when coupled with NetElixir Suggests: other channels like social media. Paid search adver>sing campaign delivers superior returns when coupled with other Search is a critical element within the Shopper Engagement Cycle. However, channels like social media. it is not the only element. As the table below shows, it is important to understand the role that search plays in the consumer buying process. Search is a cri>cal elements within the Shopper Engagement Cycle. However, it is not the only element. As the table below shows, it is important to understand the role that search plays in the consumer buying process. Stage in Consumer Buying Process Influence of Search Problem Yecogni>on Low High ;nforma>on Search High High Evaluate Alterna>ves High Moderate Purchase Decision High High Purchase High Low Post Purchase Evalua>on Low to Moderate Low Influence of Social Media Note: kery oren, the role played by search in post purchase evalua>on gets neglected. NetElixir has been able to conduct successful tests that supports the importance of search during the post purchase evalua>on process. Note: Very often, the role played by search in post purchase evaluation gets neglected. NetElixir has been able to conduct successful tests that supports the importance of search during the post purchase evaluation process. You can read more on this here:
9 7. Is my ad copy message relevant for the new online shopper? The New Online Shopper is: Demanding She wants more value at a lower price. Organized She spends more time in research and evaluation. Patient She is willing to wait longer for a better deal. Vocal She shares her product experience regularly. She feels happy that her opinion matters. Ready to Switch She is less loyal and less tolerant. She is happy to switch brands as long as long as her value expectations are met. NetElixir Suggests: Search advertisers need to be sensitive to the new online shopper. The buying process often starts with a search. Ad Copies need to be tailored extensively. The days of of standard ad templates, when keywords were changed but not the message, are thankfully over. Ad copy performance needs to be analyzed bi-monthly. Ad copy performance analysis is critical in understanding the preferences of the new online shopper
10 8. How many new/fresh SEM Ideas have I tried each month? Have I documented the learnings? NetElixir is a firm believer in the power of fresh ideas. Our willingness to test new stuff has helped us delight our clients through exceptional search advertising performance. 5 questions you need to ask your SEM manager: 1. Do you have a calendar for testing new search advertising ideas? 2. Are all the tests being documented? 3. What are the key learnings? 4. How will the learnings be used in future to make the tests sharper? 5. What cross-channel tests have been done so far and what are the results? -9-
11 Concluding Notes: Search advertising practices need to be in sync with the changing times. The recession has changed consumer behavior. Search advertising needs to be relevant for the new consumer. We believe 2010 marks the beginning of the next generation of search advertising. The key differentiators will be knowledge, creativity, adaptability and global mindset
12 About NetElixir: NetElixir, Inc., is an online customer acquisition management firm headquartered in Princeton, NJ, with global offices in London, UK; Hyderabad, India; Freiburg, Germany; and Copenhagen, Denmark. The company advises clients worldwide on online customer acquisition strategies and, using its proprietary technology - the LXR core platform, helps them achieve online advertising performance maximization. NetElixir s suite of services and products includes both an end-to-end campaign management service as well as optimization technology and service solutions for online retailers and agencies. For additional information, please visit or call us at
13 Disclaimer This NetElixir report is intended for general information and is based on publicly available data available on the Internet at a particular point in time. NetElixir gives no guarantee regarding this information and accepts no liability for any inconvenience, or any direct or consequential loss, arising from reliance upon this information. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying or otherwise without the permission of NetElixir, Inc NetElixir, Inc. All rights reserved
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