Analysis

GUEST COMMENT Techniques for retailers to improve the performance of their online ad campaigns

Jonathan Beeston, client services director, Europe, Efficient Frontier, takes a look at six ways retailers can make their online advertising more efficient.

By Jonathan Beeston

One of the biggest challenges that retailers face when they’re putting together an online marketing campaign is how to link ads to inventory. The last thing you want is for a customer to click on an online ad only to find that the product advertised want is out of stock. It’s a waste of a click (and of the retailer’s budget). Advertised prices should reflect fluctuations in product pricing that may be driven by factors such as price checking, daily-changing special offers, customer deals or loyalty pricing.

Online marketing today goes far beyond buying high-volume search keywords to support product category sales, or buying space on advertising sites. It can be automatically linked to up-to-date inventory and pricing information for specific products, and targeted to specific demographic or interest groups. These changes are all part of what we call ‘performance marketing’ – digital marketing campaigns that are measured (and paid for) by their performance against hard objectives.

There are a number of techniques for retailers to improve the performance of their online marketing campaigns.

Create dynamic campaigns linked to inventory and product features
Innovations in technology mean retailers can link stock information to advertising, and automate the process of updating search, display and Facebook ads with pricing and stock availability as it changes. It’s also possible to generate automatic keyword ‘modifiers’ (for example: adding ‘red’ or ‘cashmere’ to the keyword ‘scarf, to create ‘red scarf’ or ‘cashmere scarf’ or ‘red cashmere scarf’).

Make sure your ad reflects what the customer is looking for
The more you can understand about what a customer wants, the better able you are to show products that match intent, increasing the chance of a sale. Is the customer researching, or ready to buy? If they’re researching, using generic searches (for example ‘winter coats’), and show some of the best offers. But as the customer gets closer to buying, you can insert different levels of messaging (using paid search) to help them find exactly what they are looking for. For example if a customer, through a series of searches, shows intent to find ‘Hobbs black coat size 10’, deliver them to this point via ‘black coat’, ’black coat reviews’ and ’black coat best price’.

But what if you don’t have the coat in a size 10? It’s unlikely the customer will buy a different size, but they might be tempted by a different brand. So you have a choice: exclude the relevant keyword, or suggest an alternative on the landing page to the level of detail of the original query (‘we don’t have the Hobbs coat you’re looking for in a size 10, but we do have a Jigsaw coat you might like’). What you don’t want to do is display is an ad for the coat that you don’t have in stock, and return a ‘sorry, that product is out of stock’ statement. The consumer will go to another site, and the chance to sell a different product has been lost, along with part of the advertising budget.

Search or display ads will pull people to the site, but what happens when they get there is every bit as important as the content of the ad. But what if there is no exact landing page available, how do you deal with results? The answer is by ’Searchandising‘ which joins search data with merchandising methods. Retailers can deliver onsite search results that are most likely to convert to sales and use the customers’ search activity as a way to merchandise specific products. Searchandising will show the closest match to the unavailable ’Hobbs black coat size 10‘. Few retailers do this well. Popular items may be listed at the top but they are almost always sold out. Out-of-stock items should always get pushed to the bottom of the list.

Understand the customer journey: attribution analysis
To budget effectively, retailers need to understand the journey that consumers go through to purchase online, and – with anywhere between 60 and 90 percent of shoppers researching their purchase on a search engine – what led to the final interaction that ended in an online transaction.

Customers will often search for lots of different things before they get to the final search that leads to a sale. (For one retail client, we found that almost 10 percent of sales that came from a search on its brand name originated from a non-branded search term.)

For example, if a consumer searches for ‘sunglasses’ and then finds a retailer selling ‘D&G sunglasses’, do they then buy from that retailer, or will they do a new search on ‘best deal for D&G sunglasses’ and buy on price? Historically, only the click that finally converts will get the credit for the conversion – but there may have been five or six interactions with the user before that last click. Understanding this journey means retailers can plan and budget online campaigns effectively.

Link campaigns across different channels
We did some research recently that showed how a TV campaign can have a significant impact on both site traffic and the number of online searches. Search is the ultimate tool for capturing and tracking customer interest and intent. TV and search campaigns should quote the same product information and pricing. The result of the campaign will be greater than the sum of its parts.

Find out which online campaigns are driving footfall to your shops
A customer may choose to research a product online but buy in-store, or over the phone. They’ll want to be able to get the same offer that they saw online, however they choose to buy. It’s up to the brand to deliver the same information over different channels. Research presented by Yahoo! indicates that as many as 63 percent of sales researched online are transacted offline.

In many cases, it’s possible to track where an offline customer sale came from. A retailer could serve up an offer in its search results, or in a display or Facebook ad, that can be redeemed online or in-store, on presentation of a unique identification number. This lets you track where the customer started the purchase process, and therefore which search terms are making you money, even if the customer didn’t click and buy online.

Consider Facebook as part of your online strategy
Facebook has come a long way since its early days of beacon advertising, but still we haven’t even scratched the surface of the possibilities. Facebook Credits mean that Facebook is now a viable sales or consumer reward channel; and new services such as Facebook Sponsored Stories and Deals mean it’s increasing in strategic importance as part of the marketing and sales mix. There are few channels that offer such specific targeting by interest or demographic profile, for what is still a relatively low cost.

Jonathan Beeston is client services director, Europe, Efficient Frontier

This article is based on a guide to performance marketing for retailers, which you can download from http://www.efrontier.com/research/whitepapers.