Half the retailers Shop.org surveyed this summer told us that they started planning the upcoming holiday shopping season as early as April or May. After months of preparations, retailers are doing final reviews and tests to ensure that all systems are ready for the holiday rush. One of the most intriguing areas on the digital side is paid search campaigns. I spoke with RKG Executive Vice President of Marketing Science and Strategy Ryan Gibson for his advice to retailers as they put the finishing touches on online search campaigns.
RKG Executive Vice President of Marketing Science and Strategy Ryan Gibson
Tell us about expected search patterns during the holiday season. In order to effectively manage search budgets, should retailers focus on key days, or do they need more of a consistent presence throughout the season – and why?
For our clients, the key to a successful holiday search program has been anticipating how the value of ad clicks will change throughout the season and being as aggressive as they can within budget constraints, while hitting a specific return-on-investment goal.
Let’s start with Thanksgiving weekend. Similar to brick-and-mortar sales, online holiday shopping really takes off on Black Friday. However, a number of later orders are seeded by searches that those consumers made days earlier. Therefore, retailers need to maintain a strong presence even before they start racking up the post-Thanksgiving sales.
Overall, we’ve seen holiday sales shifting earlier in the season over time as consumers have become savvier about taking advantage of strong Black Friday weekend promotions that retailers offer, which means that retailers need to prepare their ad budgets for that sudden influx of demand volume.
Of course, that’s just the beginning of the holiday season, so retailers should plan carefully for the weeks following also. After Cyber Monday, we’ve found that clicks generally become increasingly valuable right through mid-December, just as we start to hit shipping cut-offs.
RKG research shows that mobile click share in the third quarter was up almost 100 percent year-over-year. What should retailers do to take advantage of this mobile activity?
Smartphones and tablets are driving essentially all traffic growth for many retailers, presenting us with some new challenges and opportunities. By traditional measures, smartphone users exhibit much lower online conversion rates than desktop or tablet users. However, new measurement capabilities like Google’s cross-device tracking are beginning to reveal and quantify some of the hidden value of smartphone traffic that we all suspected was there. After including cross-device purchases, we are finding that smartphone search ads are generating as many as 33 percent more orders than we could track directly. This knowledge is incredibly helpful for setting more accurate and effective bids.
On the mobile bidding front, advertisers have had several months to adjust to Google’s Enhanced Campaigns model, which became mandatory in July. Like so much else during the holiday season, the importance of setting mobile bid modifiers effectively will be greatly magnified. Advertisers have the ability to set mobile bid modifiers at the ad group level and they should be taking advantage of that granularity rather than applying one blanket adjustment across their entire account.
Thanksgiving week is just about here. What are the two or three things you would advise retailers to do in the search arena for a week that will have consumers shopping online and in-store?
Retailers utilizing paid search to generate online sales and drive in-store visits can utilize their ad copy in sophisticated ways to get the best message across at the right time. Site links can be a great spot to help promote store locator pages and offline deals, while mobile-specific copy combined with geo-targeting is a great option for tailoring messaging to those customers most likely to shop in-store. Setting up merchant promotions for Google’s Product Listing Ads (PLAs) can also set your listing apart from the competition while delivering an extra incentive to your customers to make a purchase.
Remarketing lists for search ads may be particularly valuable to have in place before Thanksgiving when customers are beginning to plan their holiday purchases. When those same customers decide to make a purchase on Black Friday, Cyber Monday or beyond, the people who visited your site earlier are likely to convert at higher rates and retailers should adjust their bids accordingly.
With shoppers out and about in stores over Black Friday weekend, how can retailers leverage geo-targeting and proximity bidding?
Tracking the offline value of online advertising with great precision is still a formidable challenge for retailers, but we know the value is there and we also know that searchers who are in close proximity to stores are more likely to purchase in-store than those who aren’t. Retailers need to study what these impacts look like for their own business and then incorporate those insights into their paid search strategy. Fortunately, the engines provide the tools to do just that. Geo-targeting is nearly as old as paid search itself, and more recently, proximity bidding has allowed retailers to adjust bids for a specific radius around their store locations. Google’s Enhanced Campaigns model makes applying these types of adjustments much easier than in years past.
Search conversations tend to center a fair bit on Google. How should retailers think strategically about Bing and Yahoo?
Bing and Yahoo! control roughly one-fifth of U.S. paid search traffic. Furthermore, Bing and Yahoo are growing much faster than Google in the paid search space as they gain ground in monetizing the traffic they have. While we wouldn’t recommend having engine-specific ad budgets, retailers that do have them should take into account the relative growth rates of each engine.
We’ve found that Bing Ads engineers have made real strides to improve their technology and keep pace with Google’s innovations. For the holiday season, advertisers should make sure that they have in place on Bing the same elements that work for them on Google. This includes ensuring that their keyword coverage on Bing is complete and that they are utilizing ad extensions like site links and location extensions. It is probably too late to get into Bing’s Product Ads beta this season, but just as PLAs have been huge for Google, this will likely be a major growth opportunity for Bing going forward and something for retailers to test further in 2014.