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GUEST OPINION Are you losing your online customers and PPC revenue?

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Here’s the answer: An inventory-linked PPC campaign, says Justin Hayward, Managing Director of Make It Rain

Imagine you’re walking down a high street. You’ve been visiting a friend, you’re in an unfamiliar town and you’ve just remembered you need a new kettle. You pull out your iPhone, log on to Google and type in “buy a Breville kettle.” One of the top results is a Pay-Per-Click (PPC) ad (or sponsored link) for a well-known retailer.

Because this is a savvy retailer you not only find out the location of your nearest store, but you are also able to browse online through their selection of kettles which most accurately match your search. You settle on a Breville Illuminating Kettle for £54.99.

Next comes the clever bit: the website is sophisticated enough to tell you that your nearest store (automatically calculated by proximity to your phone) has three in stock. You march along there with your credit card and the job’s done with a happy customer and money in the bank for the retailer.

If only all retailers were so efficient.

Now let’s imagine a different scenario. A solicitor is passing some time on the train surfing the web for a Rolex watch. He’s just seen a Rolex advert on the back of a magazine someone left on the train, he’s feeling flush and he likes the look of the Oyster Perpetual. He types “Rolex Oyster Perpetual” into Google.

Near the top of the list thrown up by Google is a PPC ad by a London-based, luxury watch retailer, offering the Oyster Perpetual at a good price. He clicks on the link and is taken to the retailer’s website only to find, after much effort on his part, they are out of stock. He throws

the magazine across the carriage, curses the retailer and takes his business elsewhere.

He is out of luck and the retailer is out of pocket because their PPC campaign was charged when he clicked on their PPC ad.

The above situations are hypothetical but they mimic the real world. In the real world companies are losing money being charged for PPC ads that don’t convert to sale because a retailer can’t follow through on the offer it has paid to advertise. The time has come for a smarter approach. One that’s been pioneered in the US, namely the integration of inventory management systems and PPC advertising.

Companies looking to maximise their online sales and ROI should be looking to avoid scenarios where traffic is brought to their website only to find the item is out of stock. The only way to avoid this is to link a company’s stock control systems to its PPC ads. This way an ad can be removed or amended to show an alternative solution when the underlying product is out of stock. If the retailer knows it can’t deliver an item until stock has been replaced, it can alter its online offering to reflect that – offering perhaps to get in touch with the consumer when the product is available again. This will not only save the company money in PPC advertising, but will also avoid negative customer experiences.

By using a direct inventory feed as a basis for PPC advertising, companies make sure they only offer what they have available. There would be no need to change PPC ad prices manually when the Christmas sale starts, for example, because they would be automatically updated when the inventory management control system is updated. Updating PPC and inventory prices manually is an administrative nightmare. Automating this process also broadens the number of products for which PPC advertising becomes available to promote.

The kind of linkage described above would also avoid the increasing scrutiny envisaged by the UK’s Advertising Standards Authority (ASA), which announced on 1 September 2010 that its remit next year will be extended to target misleading or false advertising online. Companies with linked PPC and inventory systems needn’t worry about customers being drawn to their sites by price-specific PPC advertising only to find a different price awaits them when they reach the landing page. Travel companies, for example, whose pricing models dictate inevitable price changes as the departure date draws nearer, are particularly vulnerable.

Of course, stock inventory systems won’t necessarily be organised in a way that makes them easy to use for PPC integration. The kind of up-front investment involved in renaming such products, however, would be easily offset from reduced PPC costs and more importantly, increased sales.

An increase in sales is made possible by the linking of PPC and inventory control systems because, once stock inventory descriptions are made “online-friendly”, PPC ads can more precisely target online searches. The next stage in this evolution is that a company can better evaluate where its unique selling points (USPs) lie; whether it be speed of delivery, price point or breadth of choice.

The overarching point is that the more accurately PPC ads reflects the product a paying customer will receive, the higher the level of customer satisfaction and loyalty and the lower the risk of profit loss.

With a fully automated inventory/PPC system, companies can also change their PPC advertising to reflect stock runs, shortages, postal strikes, supply chain disruptions or almost any imaginable scenario. Today it might suit you to compete on price; tomorrow you might prefer to compete on speed of delivery and the day after maybe on aftercare or warranty. All of these can be used to maximise sales and profitability under any given circumstance once inventory management and PPC are interlinked.

As the number of portable devices with internet access continues to increase and commercial online regulatory oversight increasingly mirrors that of the bricks and mortar world, inventory management and PPC integration will become the norm. Companies that embrace and invest in this technology now will we be more prepared and garner more success, than those who eventually find themselves playing catch-up.

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