Product Listing Ads: The Power of Segmentation

This is a guest post by James Kelly, Senior SEM Analyst of National Positions.

Product Listing Ads have grown immensely in popularity over the last year and many articles have been written detailing the importance of getting them live. At this point the real question is how to maximize exposure and profitability for your ecommerce marketing campaign.

Feed and bid optimization is the first place that many people look. Both of these are of critical importance, but I find that advertisers spend so much time worrying about these issues that the actual campaign structure is often ignored. The decision on how to structure and segment your PLA campaigns will dictate your ability to analyze and optimize the campaigns over time.

Google provides us with the ability to segment PLA’s by product type, condition, brand, ID or custom fields within your feed (adwords_grouping & adwords_labels). The first pitfall that many advertisers encounter is choosing conflicting segments, so that any single product could have as many as five or six bids coming from different targets. While campaigns built in this way may appear incredibly detailed, they are unwieldy and are difficult to manage effectively.

Targeting

With this in mind, a good first step is choosing a primary targeting method. Each product will inevitably have multiple targets, but there should be one targeting method that you intend to use for the majority of your bid optimization that will have higher bids relative to your secondary targeting methods. The idea here is to try to remove as much of the conflicting bids as possible so that you can actually dial things up when they are converting, or down when they are not. If a single product has six bids and no rhyme or reason as to which one is highest, it will be very difficult to do something as simple as lower the bid on that product by 50% without also lowering the bid on all related products with similar targets.

My primary targeting method of choice is the adwords_labels field filled with a unique ID for each product. In this case, I have the ability to control my bid for individual products to avoid missed opportunities and wasteful spending. Targeting each product individually can allow greater levels of control, but it can be difficult to account for new products or changes in the feed, which is why additional targeting is required.

Secondary targeting methods can be thought of as catch-alls, whose main purpose is to pick up any products that have not been picked up by your primary targets. I generally use a product type or brand as the secondary targeting method depending on what makes more sense for the particular client. The secondary target must have artificially low bids so that they do not overlap any of your primary targeting. I have heard clients express concerns that the bids are too low, but with proper execution, the secondary targets should be more of a safety net than an active target. If you notice that a secondary target is receiving significant amounts of traffic, this should be a sign to take a look at your primary targets to see what is leaking through. To err on the safe side, I also use an all products target with a much lower bid (sometimes a penny bid) to ensure that I have basic coverage for new products that may not have other targets.

Campaign Structure

Once the various levels of targeting have been sorted out, the last remaining question is how to structure the targets into campaigns, ad groups and targets. With a smaller product count, I typically create a unique ad group for each product containing my primary targeting method in a single campaign. Secondary targets will also have unique ad groups so that all bids can be managed from the ad groups tab.

Accounts that have tens of thousands of products will more than likely need additional structure in place, if nothing else to avoid the 20k ad group per campaign limit. There are two approaches for breaking down these larger catalogs. The first is to create multiple campaigns (possibly broken down by product type or brand) so that you can keep your bids at the ad group level. The second option is to create ad groups for each product type/ brand with targets for each individual product within that ad group. Product level bid optimization would need to be done on the target level in this second option.

No matter how you decide to segment your PLA campaigns, it is important to have a primary targeting method in mind to avoid overlapping bids. Structure provides control over the bids, which will give you the ability to affect your positioning and profitability in the long run.

James Kelly, author of this blog post, is an Ecommerce Channel Manager and Senior SEM Analyst for National Positions, an industry leading internet marketing company with over 1,000 clients around the globe including Wal-Mart, Land Rover, Club Med and Samsung. The National Positions SEM department in particular has been experiencing rapid growth by providing significant revenue increases for many small and medium size businesses.

More Targeting Control With Flexible Reach On The Google Display Network

Last week, Google announced the new “Flexible reach” option on the Display Network.  This option will eventually replace Broad reach and Specific reach, the current targeting options available at the campaign level:

 

  • Broad reach shows your ads on pages that match the primary targeting method
  • Specific reach shows ads on pages that match all of your targeting methods

 

Flexible reach allows you to diversify your targeting at the ad group level.  With flexible reach, you can do the following all at the ad group level:

 

  • Select any combination of multiple targeting options
  • Combine different methods of targeting and bidding

 

For example, when adding placements to an ad group, you can either target only these placements or use these placements for bidding only.  When you only target these placements, you can set specific bids for these placements but your ads will only appear on these sites, eliminating your ads being shown anywhere else.  To use these placements for bidding only, you can also set specific bids on them, but this option also allows your ad to appear on other sites based on your keywords or other targeting methods within the ad group.

 

This new feature provides transparency into how your targeting selections are affecting the reach and impression volume of your campaigns.  When Flexible reach is enabled, by default, new ad groups will have the targeting setting selected when you add targeting methods to them, like placements. The same default setting applies when you add targeting methods to or delete targeting methods from your existing ad groups.

 

Flexible-reach

 

Are you ready to fine-tune where your ads appear by using the Flexible reach setting at the ad group level?  Learn more about using and enabling Flexible reach at the AdWords Help Center.

 

Lessons Learned From Helping Over 150 Startups With Marketing Part 1: Fundamentals

About a week ago, I made a post on Hacker News offering free online marketing advice to any startup that asked for it. I had over 150 startups emailing me, selling everything from enterprise software to scheduling tools to pet food, and I tried to answer every single one with specific, actionable insights they could put to use right away. This took a lot of time, but not as much as I expected, because I would frequently find myself giving the same advice over and over again.I’m going to collect the most useful and common advice I’ve given into a three part “lessons learned” series. In this post, I’ll focus on broader marketing strategies which are critically important if your startup is to succeed. Next week, I’ll delve into driving traffic and specific tactics startups can use to immediately begin growing their customer base.These suggestions may seem basic or common sense to some of you, but you would be surprised at how few startups are actually executing on these. I’ll write about more specific tactics and methods for driving traffic and customer acquisition in my next post, but all of those will be useless unless you get these fundamentals right. By the way, if you’re an affiliate and you don’t think these apply to the landing pages you’re building, you’re doing something wrong.

Articulate a Clear, Specific, Compelling Value Proposition

For many of the startups I looked at, I had to kind of scratch my head and think for a few minutes as I tried to figure out exactly what benefit they offered consumers. The value of your product or service, your unique competitive advantage, should be clear within 5 seconds of visiting your site. I’m sure you’ve heard the old copywriting mantra of “list benefits, not features”. Take that to the next level. [pullthis id=”1″]Take the single most important benefit of using your service, and make that your headline.[/pullthis][pullshow id=”1″]If you could only have one feature in your app, what would it be? Your “killer app” can lead to your biggest benefit, and that’s how you need to introduce yourself to customers. I could write volumes about writing headlines, but a simple statement like this is a good place to start. Especially if you’re selling a B2B service, as many of you are, you need to make the immediate benefit or ROI of using your service crystal clear. If you’re building a B2B app to manage payroll, “Cloud hosted SaaS payroll for your business” is not a good headline. “Spend less time worrying about payroll” is a better one. “Cut payroll management costs by 37% instantly” is even better.

Find Your Target Market, and Segment the Hell out of Them

Another issue I ran across rather frequently is a distinct lack of marketing focus. When asked who their target market was, many people responded “small businesses” or, worse “anyone”. Alright, fine, you sell your SaaS products to small business in the US. But what kind of small business owner converts the best for you? Which customers are most likely to be profitable customers? Who is most excited about your product? You have been tracking these things, haven’t you?You don’t have the budget to target all small businesses, so start with a specific niche or industry you think your product has particularly strong appeal for. Selling time tracking software? Start positioning as time tracking software for accountants, or dentists, or landscapers. How about targeting a specific task or feature and finding people looking for that feature only? Or what about people who already use a particular competitor’s software? I’ll go into competitor bidding at a later time, but it’s a fantastic way to get motivated early users.Build super niche landing pages or, even better, microsites targeting each specific market segment you want to go after, emphasizing the specific benefits of your product to that group only. Not only is this a very strong SEO play, but it will increase your quality score and relevance in AdWords, as well as greatly increase conversions.If you have a landing page targeted to doctors, test putting a stock photo of a smiling doctor using your software on your landing page. It’s cheesy, but there’s a reason companies use it- it works. Similarity is a very powerful principle of persuasion. Tech people respond well to screenshots of software. Local small business owners may not.By the way, this applies to ecommerce startups as well. If you’re a clothing company build pages like “Top products for new moms” or “Tshirts for fans of __”, they will do very well.

Optimize Aggressively for CLV

If you’re running a subscription service of any kind, customer lifetime value(CLV) is by far the most important metric you need to be thinking about. More than conversion rates, burn rate, SEO, or anything else, CLV will determine whether your startup lives or dies. Try to determine this number, at least an average for your entire customer base, as soon as possible.There are so many ways to increase CLV that fall outside the scope of this post, but just remember that effective monetization of the backend is where many online businesses live or die. Effectively upselling or cross-selling once you’ve acquired a customer could mean the difference between outbidding your competitors and capturing more market share or falling behind.You don’t have to be spammy or annoying to upsell well. This can be as simple a showing a notification when your customer is close to reaching a usage limit, urging him to upgrade to the next tier of service, or emailing your most loyal customers with special discounts.Start measuring engagement, churn rate and attrition, visit frequency, etc, loyalty and so on. If you’re selling a $20 a month service but you know that you will net $400 over the lifetime of an average customer, suddenly you have a lot more options for marketing, not to mention some great metrics to show investors.

Start Marketing Early and Validate Your Idea ASAP

You don’t need a product to start marketing. Let me say that again. You don’t need anything to start marketing. All you need is a vague idea and a landing page where you can collect email addresses from prospective customers. It’s called dry testing, and it works, at least for gauging initial interest to see if an idea is worth pushing further.It pains me to see so many startups emailing me who have already spent months or even years building a product without thinking about promotion or validating their idea at all before launching. “Launch first, then figure out marketing” is a recipe for disaster. You need to be able to answer at least these questions as soon as possible, ideally before you write a single line of code:

  1. Is there a target market for my product and how big is it?
  2. Who are the current players in the market? Is it controlled by a few big players or dominated by many smaller companies?
  3. How much market share can I realistically expect to capture, and how well can I monetize them?

[pullthis id=”2″]Remember this: A startup is a business.[/pullthis] And any business requires basic market research. If you were thinking of opening a coffee shop, would you jump right in and start building it? Or would you first see if there are any other coffee shops nearby, how many customers they have, how much they charge for coffee, etc?[pullshow id=”2″]Marketing isn’t just emailing bloggers and driving traffic. It’s everything- product, price, placement, and promotion. Start thinking about these things before you launch, learn from them, and iterate quickly before wasting a lot of time and money.Next Week: Exactly how to find exactly where your most profitable customers are, where to get cheap traffic to validate your idea fast, and how to easily dominate your competitors on most traffic sources.