Wheelhouse DMG at GrowCommerce - not your father's search
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Learn about how optimizing to a ROAS target rather than a fixed budget can supercharge your online revenue. We show digital marketers how CRO can supercharge your PPC campaigns and how to drive improved AOV through loyalty programs.
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Wheelhouse DMG at GrowCommerce - not your father's search
- 1. Not your father’s search Three Keys to Best of Breed Acquisition Marketing
- 2. Who are these guys??? 7/20/2017 © Wheelhouse DMG 2017 2 Grow Conference / Not your father’s search Wheelhouse/dmg • Founded 125 years after AM Leonard • Digital Strategy, PPC, SEO, Analytics & Engineering • Based in Seattle, WA with clients all over the US (but not Ireland) Paul Weinstein • VP, Operations & Client Services • Likes neon
- 3. Who are these guys??? 7/20/2017 © Wheelhouse DMG 2017 3 Grow Conference / Not your father’s search • Founded in 1885 as a nursery • Added ecomm. to catalog about 10 years ago Jason Corpus • VP, Marketing & Corporate Strategy • This is not as cheesy a headshot as the first one we used • Knows a lot about marketing
- 4. 7/20/2017 © Wheelhouse DMG 2017 4 Grow Conference / Not your father’s search What do we mean by “Not your father’s search”?
- 7. 7/20/2017 © Wheelhouse DMG 2017 7 What do you focus on first? Best of Breed Ecommerce Grow Conference / Not your father’s search
- 8. 7/20/2017 © Wheelhouse DMG 2017 8 Best of Breed Ecommerce Grow Conference / Not your father’s search
- 9. 7/20/2017 © Wheelhouse DMG 2017 9 Get your Bid Strategy right
- 10. 7/20/2017 © Wheelhouse DMG 2017 10 What is “Bid Strategy”? Grow Conference / Not your father’s search
- 11. 7/20/2017 © Wheelhouse DMG 2017 11 bid strategy [bid] [strat-i-jee] 1. the science and art of determining the business value of a keyword 2. a plan, method or series of keyword bidding decisions designed to maximize ROAS 3. calculations or algorithms used to achieve goals based on primary business KPIs Grow Conference / Not your father’s search
- 12. Ecommerce KPI Framework 7/20/2017 © Wheelhouse DMG 2017 12 Grow Conference / Not your father’s search LEVERS • Site infrastructure, responsiveness • Site speed • Site design • Conversion rate optimization • Offers LEVERS • Quality of traffic • Offers • Loyalty programs • Site design (cross- selling) LEVERS • Pay-per-click advertising • Search Engine Optimization • Marketing efforts • Emails • Catalogs • Outreach/Bloggers
- 13. Calculating the Value of a Keyword… 7/20/2017 © Wheelhouse DMG 2017 13 Grow Conference / Not your father’s search
- 14. More 7th grade math… 7/20/2017 © Wheelhouse DMG 2017 14 Grow Conference / Not your father’s search
- 15. A few substitutions… 7/20/2017 © Wheelhouse DMG 2017 15 Grow Conference / Not your father’s search
- 16. A few substitutions… 7/20/2017 © Wheelhouse DMG 2017 16 Grow Conference / Not your father’s search
- 17. A few substitutions… 7/20/2017 © Wheelhouse DMG 2017 17 Grow Conference / Not your father’s search
- 18. A few substitutions… 7/20/2017 © Wheelhouse DMG 2017 18 Grow Conference / Not your father’s search
- 19. 7/20/2017 © Wheelhouse DMG 2017 19 Grow Conference / Not your father’s search
- 20. Tada! 7/20/2017 © Wheelhouse DMG 2017 20 Grow Conference / Not your father’s search We used this formula to help us understand the value of each keyword
- 21. 7/20/2017 © Wheelhouse DMG 2017 21 Grow Conference / Not your father’s search Bid strategy Seeks the unique value for each search, based on time, audience, & context
- 22. Bidding to Value Grow Conference / Not your father’s search Bad Bidding Cost Revenue 227/20/2017 © Wheelhouse DMG 2017 Bidding Evaluation Method: Plot all non-brand keywords on a scatter plot revenue (y) vs. cost (x)
- 23. Bidding to Value Grow Conference / Not your father’s search Bad Bidding Good Bidding Cost Revenue Cost Revenue 237/20/2017 © Wheelhouse DMG 2017
- 24. Bidding to Value Grow Conference / Not your father’s search Bad Bidding Good Bidding Cost Revenue Cost Revenue 247/20/2017 © Wheelhouse DMG 2017 Scatter plot is clustered along ROAS slope
- 25. Bidding to Value Grow Conference / Not your father’s search Bad Bidding Good Bidding Cost Revenue Cost Revenue Slope = ROAS 257/20/2017 © Wheelhouse DMG 2017 Scatter plot is clustered along ROAS slope
- 26. Bidding to Value Grow Conference / Not your father’s search Bad Bidding Good Bidding Opportunity Cost Waste Cost Revenue Cost Revenue Slope = ROAS 267/20/2017 © Wheelhouse DMG 2017 Scatter plot is clustered along ROAS slope
- 27. Bidding to Value Grow Conference / Not your father’s search Bad Bidding Good Bidding Opportunity Cost Waste Cost Revenue Cost Revenue Slope = ROAS 277/20/2017 © Wheelhouse DMG 2017 Scatter plot is clustered along ROAS slope Any keyword below the ROAS line is costing more than it should, bids should be reduced
- 28. 7/20/2017 © Wheelhouse DMG 2017 28 Bid Strategy in Action Brand Non-Brand 31%Increase in revenue 754%Increase in ROAS 58%Decrease in spend 129%Increase in ROAS AML – May YoY GE – Jun YoY
- 29. 7/20/2017 © Wheelhouse DMG 2017 29 Grow Conference / Not your father’s search
- 30. Why Retailers should focus on ROAS 7/20/2017 © Wheelhouse DMG 2017 30 Grow Conference / Not your father’s search • Known ROI on PPC media • Maximizes profitable growth • Every PPC dollar is profitable • Forces team to understand value of every click
- 31. Why Retailers should focus on ROAS 7/20/2017 © Wheelhouse DMG 2017 31 Grow Conference / Not your father’s search • Known ROI on PPC media • Maximizes profitable growth • Every PPC dollar is profitable • Forces team to understand value of every click Don’t limit your growth by setting a fixed PPC media budget
- 32. Bid Strategy Health Check 7/20/2017 © Wheelhouse DMG 2017 32 Grow Conference / Not your father’s search If you have an enterprise bid management platform… • Check your change history • If you see bid adjustments like $0.25, $1.00 or $0.10, your bidding platform isn’t being utilized to its potential • You should also see intra-day bid adjustments for time of day / day of week If you don’t use a bidding platform… • Make sure your team is managing Brand and Non-brand keywords separately and to different ROAS targets • Map your keyword performance on a Revenue vs Cost scatter-plot. If the result is a scatter, consider how you manage your bidding
- 33. 7/20/2017 © Wheelhouse DMG 2017 33 Best of Breed Ecommerce Grow Conference / Not your father’s search
- 35. Factors that impact Conversion Rate 7/20/2017 © Wheelhouse DMG 2017 35 Grow Conference / Not your father’s search • Site design • Responsive design • Navigation design (faceted navigation) • Site speed • Page design (eg. CTA’s) • Offers/pricing • and more…
- 36. Mobile Site Speed! 7/20/2017 © Wheelhouse DMG 2017 36 Grow Conference / Not your father’s search Speed Top 3… Speed Index <3 sec @ 3G Total Requests < 80 requests Page Weight < 1.00MB 2 4 60 3% 2% 1% 0% 8 2.4 sec / 1.9% 3.3 sec / 1.5% 4.2 sec / <1% 5.7 sec / 0.6% Gardeners Edge 5.31 sec / 1.8% Load Time (Seconds) ConversionRate AM Leonard 5.73 sec / 1.2% AML/GE Mobile Site Speed and Conversion Rate, June 2017, Google Analytics Site Speed/Conversion Rate Data per mPulse Mobile Study For every second delay in mobile page load, conversions can fall by up to 20% Source: thinkwithgoogle.com20% In progress
- 37. The virtuous CRO-PPC cycle 7/20/2017 © Wheelhouse DMG 2017 37 Grow Conference / Not your father’s search Higher conversion rate = higher bid at same ROAS Higher bids = more traffic (same ROAS)
- 38. The virtuous CRO-PPC cycle 7/20/2017 © Wheelhouse DMG 2017 38 Grow Conference / Not your father’s search More traffic = more revenue Higher conversion rate = more revenue
- 39. The virtuous CRO-PPC cycle 7/20/2017 © Wheelhouse DMG 2017 39 Grow Conference / Not your father’s search More traffic = more revenue Higher conversion rate = more revenue
- 40. 7/20/2017 © Wheelhouse DMG 2017 40 Grow Conference / Not your father’s search Why is CRO so Important?
- 41. 7/20/2017 © Wheelhouse DMG 2017 41 Grow Conference / Not your father’s search
- 42. 7/20/2017 © Wheelhouse DMG 2017 42 Grow Conference / Not your father’s search
- 43. 7/20/2017 © Wheelhouse DMG 2017 43 Grow Conference / Not your father’s search
- 44. 7/20/2017 © Wheelhouse DMG 2017 44 Grow Conference / Not your father’s search
- 45. 7/20/2017 © Wheelhouse DMG 2017 45 Grow Conference / Not your father’s search
- 46. 7/20/2017 © Wheelhouse DMG 2017 46 Grow Conference / Not your father’s search
- 47. 7/20/2017 © Wheelhouse DMG 2017 47 Grow Conference / Not your father’s search Optimization reached, time to invest elsewhere
- 48. CRO in Action – Responsive Design 7/20/2017 © Wheelhouse DMG 2017 48 Grow Conference / Not your father’s search KPI Organic Paid Direct Traffic +20% -49% +22% Conv. Rate +25% +79% +24% AOV +22% +6% +3% Revenue +84% -3% +55% Mar – Jun 2017 compared to same period last year Responsive site launched Feb 2017
- 49. CRO Health Check 7/20/2017 © Wheelhouse DMG 2017 49 Grow Conference / Not your father’s search Check your site speed • https://developers.google.com/speed/pagespeed/insights/ Invest in CRO • If you give money to Google, invest in CRO • Just do it. Seriously.
- 50. 7/20/2017 © Wheelhouse DMG 2017 50 Best of Breed Ecommerce Grow Conference / Not your father’s search
- 52. Example Loyalty Program 7/20/2017 © Wheelhouse DMG 2017 52 Grow Conference / Not your father’s search AM Leonard’s Pro-Plus Program Unassigned Customer U Unassigned Customer Ordering with PRO Plus PROU Assigned Customer Ordering via Account Manager A Assigned Customer Ordering via Web (PRO Plus) PRO A
- 53. The results so far… 7/20/2017 © Wheelhouse DMG 2017 53 Grow Conference / Not your father’s search 114% Increase 22% Increase 42% Increase Average # of Orders 1.58 3.38 4.79 1.30
- 54. The results so far… 7/20/2017 © Wheelhouse DMG 2017 54 Grow Conference / Not your father’s search 114% Increase 50% Increase 75% Increase AOV
- 55. 7/20/2017 © Wheelhouse DMG 2017 55 What if they’re not actually pros?
- 56. Driving LTV… 7/20/2017 © Wheelhouse DMG 2017 56 Grow Conference / Not your father’s search Address these first… • Great customer experience • Great products • Details like return policies Then do… • Loyalty programs
- 57. LTV Action Items 7/20/2017 © Wheelhouse DMG 2017 57 Grow Conference / Not your father’s search Create loyalty benchmarks Design programs to improve them
- 58. 7/20/2017 © Wheelhouse DMG 2017 58 Bid Strategy CRO LTV
- 59. 7/20/2017 © Wheelhouse DMG 2017 Things you should do Bid Strategy • Check your change history • Separate Brand and Non-brand keywords CRO • Have your site audited for Site Speed • Invest in CRO LTV • Set loyalty benchmarks • Create programs to improve them
- 60. For more detail on today’s presentation, visit: www.IheartROAS.com #IheartROAS 7/20/2017 © Wheelhouse DMG 2017 60 THANK YOU!
Notes de l'éditeur
- Search marketing today is less like Madison avenue
- And more like moneyball – it’s about the math and the data
- A couple of years ago, when David Kennedy, our current VP of Digital Advertising was managing Paid Search for a major retail brand based in Seattle, he was looking for someone to consult on their strategy. He called around town and asked the following question: If you were to take over our paid search program, which of the following items would you focus on first? Ad Copy & Messaging Landing Pages Bid Strategy The answer from one local shop (not us), was: “Definitely ad copy and messaging. We need to make sure your message is consistent across all channels” David politely said, “Thank you.” and he hung up. Why? Rule #1.
- The most important thing an acquisition marketer should focus on is their bid strategy. This requires us to do lots of math.
- This is the basic ecommerce formula. For each metric on the right, we have several levers that we can use to move them in the direction we want them to go (up). What we need to do next is to use this formula to help us understand the value of a keyword, which isn’t represented (yet) in this formula
- First, we need to define ROAS, which is expressed as Revenue divided by Cost. Doing some simple math, we can express Revenue as ROAS times Cost
- Second, we need to bring the value of a keyword into the equation. We do this by understanding that Cost is Traffic times Cost per Click (CPC) One more step allows us to express Traffic in terms of Cost and CPC We’re now ready to go back to our original formula to make some substitutions
- Here we have the first ecommerce formula. But now we have other variables for Revenue and Traffic.
- We make a couple of substitutions from our earlier work….
- And have a new formula that includes ROAS, Cost and CPC
- We can eliminate Cost from both sides to simplify…
- Leaving us with ROAS expressed in terms of Conv. Rate, AOV and CPC. But this isn’t quite what we need. One more move and…
- We now have a formula that helps us understand the value of a Click in terms of Conv. Rate, AOV and ROAS.
- Example of how Keywords should look on a graph when bidding is done correctly. Revenue and Traffic/ Cost should align in a pattern that illustrates all keywords in your program are targeting efficiently to the same ROAS. Make sure to exclude Brand KW from the this analysis – they will be outliers Outliers above the ROAS line are ok, below the line are NOT ok.
- Example of how Keywords should look on a graph when bidding is done correctly. Revenue and Traffic/ Cost should align in a pattern that illustrates all keywords in your program are targeting efficiently to the same ROAS. Make sure to exclude Brand KW from the this analysis – they will be outliers Outliers above the ROAS line are ok, below the line are NOT ok.
- Example of how Keywords should look on a graph when bidding is done correctly. Revenue and Traffic/ Cost should align in a pattern that illustrates all keywords in your program are targeting efficiently to the same ROAS. Make sure to exclude Brand KW from the this analysis – they will be outliers Outliers above the ROAS line are ok, below the line are NOT ok.
- Example of how Keywords should look on a graph when bidding is done correctly. Revenue and Traffic/ Cost should align in a pattern that illustrates all keywords in your program are targeting efficiently to the same ROAS. Make sure to exclude Brand KW from the this analysis – they will be outliers Outliers above the ROAS line are ok, below the line are NOT ok.
- Example of how Keywords should look on a graph when bidding is done correctly. Revenue and Traffic/ Cost should align in a pattern that illustrates all keywords in your program are targeting efficiently to the same ROAS. Make sure to exclude Brand KW from the this analysis – they will be outliers Outliers above the ROAS line are ok, below the line are NOT ok.
- Example of how Keywords should look on a graph when bidding is done correctly. Revenue and Traffic/ Cost should align in a pattern that illustrates all keywords in your program are targeting efficiently to the same ROAS. Make sure to exclude Brand KW from the this analysis – they will be outliers Outliers above the ROAS line are ok, below the line are NOT ok.
- We used smart bid strategy to achieve these results for AM Leonard and Gardener’s edge this spring.
- At this point, we need to stop to understand the role that our ROAS target plays in our bidding strategy. ROAS is the most important metric, but it acts as a target, rather than a KPI. The reason it’s a target, is because it shouldn’t vary widely throughout our account. As we showed in the good bidding example, each keyword should fall along the target ROAS line. This means that we should treat ROAS as a fixed variable, one that we set and optimize against.
- Example: let’s assume your media budget is $500k, but at a ROAS of 4.1 you could spend over $600k. If you didn’t spend that $100k you’d leave $410k in revenue on the table.
- Example: let’s assume your media budget is $500k, but at a ROAS of 4.1 you could spend over $600k. If you didn’t spend that $100k you’d leave $410k in revenue on the table.
- Speed Index: Average Time Everything Above the Fold Is Rendered Everything above the fold should load preferably in less than 3 seconds at 3G Speeds! Total Requests: < 80 requests Efficiently deliver the page and all supporting resources in less than 80 requests. Page Weight: < 1.00MB Keep the weight small, keep images compressed as small as possible, least amount of images to get the intent across to the user!
- With ROAS established as a fixed target. We now look and both Conv Rate and AOV differently. Assuming ROAS and AOV stay constant, an increase in Conv. Rate will allow us to bid higher (because we can do that AND maintain our ROAS target). Higher bids mean more visibility and more traffic. This leads us to the virtuous CRO-PPC cycle.
- Because we’re now able to be more aggressive with our bidding (higher CPCs), we get more traffic. From our original ecommerce formula, more traffic gets us more revenue.
- But we’ve also improved our Conversion Rate. Again, this gets us more Revenue. This is the compounding effect of improved conversion rate. We’ll show it again, now…
- Here is what makes CRO so powerful. An increase in Conversion Rate
- Allows us to be more aggressive with our bidding (higher CPC’s) because we’re choosing to maintain a constant ROAS
- Those increased bids get us more Traffic
- Which turns into more Revenue. Remember, this increased Traffic also converts better because of our increased Conversion Rate.
- Increased Revenue frees up more Marketing dollars
- Which we can invest in more CRO, further improving our performance
- Or invest more in PPC, driving more Traffic and Revenue
- Once we’ve exhausted the cycle and reach diminishing returns, we can then use the extra revenue to fund other marketing activities.
- Here we see the power of compounded improvements. Note the KPIs are the same ones from our first formula: Traffic x Conv Rate x AOV = Revenue. In February, we launched a new responsive design for Gardeners Edge. This spring vs last spring, we realized a 20% increase in organic traffic. At the same time, our new responsive design helped Conv. Rate increase by 25% Then, we also saw AOV increase by 22% Modest increases for each KPI combined to create an amazing 84% increase in Revenue In the Paid column, we see a slightly different, but also good, story. The reduction in Paid traffic was a direct result of our bid strategies. Our new bid strategies cut out wasted spend, reducing traffic that wasn’t converting. The resulting traffic was much more targeted, allowing for a 79% increase in conversion rate (also helped by our responsive design). A modest 6% increase in AOV resulted in a slight 3% decline in Paid revenue. This result is great because we drove almost the same amount of Paid Revenue, for much less cost. Finally, we look at Direct channel as a control and see a similar result. Increases of 22% for Traffic and 24% for Conversion rate fueled a 55% increase in Revenue – also a great result.
- AML/GE ecommerce is really only 10 years old, but is already doing a great job of acquiring traffic. Now that we have all these people, we need them to continue converting at a higher rate How do we keep them?
- Pro plus – a discount program with loyalty built in Think of your customer journey – customers should always have some place to land
- Our loyalty program showed immediate results in LTV, increasing the number of average orders per year for each group over the previous.
- We see the same result on AOV by customer type. Remember, this is a factor in determining KW value. As AOV increases, so can our bids…
- It’s ok that not all of our Pro-Plus members are “pros” the LTV results are the same.