how to make your ppc campaigns more efficient using targeted segmentation
TRANSCRIPT
Using Targeted Segmentation
How to Make Your PPC Campaigns More Efficient
Agenda
Optimise Bids Through Segmentation
Differentiated Estimates of Sales Results
Split Match Types & Ads
Time of DayRegionsSemantic ClustersWeekdays
Optimise Bids via Segmentation
The electronics retail segment registers high performance levels at the beginning of the week in particular.
From Monday to Wednesday, conversion rates are above average by up to 19%.
Keywords bids are often only based on the weekly average.
Differentiate Conversion Rates by Weekdays
0.00% 0.50% 1.00% 1.50%
Mo
TueWe
ThuFriSatSun
Scheduling bids by weekdays results in higher keyword positions from Monday to Wednesday. The number of clicks increases on days that register high conversion rates, while the cost-turnover ratio remains constant.
Scheduling Boosts Revenues by 8%
0 € 200,000 € 400,000 € 600,000 € €(100,000) €- €100,000
Revenues Change in revenuesMoTueWe
ThuFriSatSun
By using the dimensions tab, you can evaluate the segments “Day of the week”, “Hour of the day”, “Regions” etc.
AdWords: Dimensions Tab
Conversion Rates and Time of Day
22 - 2420 - 2218 - 2016 - 1814 - 1612 - 1410 - 128 - 106 - 84 - 62 - 40 - 2
0.0% 0.5% 1.0% 1.5% 2.0%
In this B2B example, conversion rates peak before lunch time.
Apparently, investment decisions are rarely made after 4pm.
Other examples: In the context of B2C retail, conversion rates peak after 4pm and during lunch time.
+ 5% Sales, Cost-Turnover Ratio Unchanged
The more conversion rates fluctuate during high-traffic hours, the higher your profits will be.
If your cost-turnover ratio is allowed to increase slightly, you will find that scheduling is more effective in generating sales than having your ads placed at generally higher positions.
22 - 2420 - 2218 - 2016 - 1814 - 1612 - 1410 - 128 - 106 - 84 - 62 - 40 - 2
-100,000 € 400,000 €
Change in sales
Combining “Weekday” and “Time of Day”
On average, conversion rates decline rapidly after 4pm. The only exception is Tuesday.
Combining “Weekday” and “Time of Day” will allow you to take these exceptions into account.
Mon Tue Wed Thu Fri Sat Sun0 to 4 0.6% 0.7% 0.7% 0.7% 0.7% 0.6% 0.5%4 to 8 2.1% 1.9% 1.7% 1.9% 2.1% 0.8% 0.7%
8 to 12 2.2% 2.1% 2.2% 2.1% 1.9% 1.1% 1.0%12 to 16 1.8% 1.9% 1.9% 1.7% 1.2% 1.2% 1.2%16 to 20 1.1% 1.5% 1.1% 1.0% 0.9% 0.9% 0.9%20 to 24 0.9% 0.8% 0.9% 0.7% 0.7% 0.7% 0.8%
Combine Segments in AdWords
1. Select segment in the dimensions tab
2. Select segment in the download interface.
How many dimensions should be combined?At some point, your data volume will be too small. The first step away from using average values will have the greatest impact.
• Based on Analytics / AdWords reports
• Proactively create segments by purchasing power
• By branch network
Best Practice for low-data segments:Form regional clusters: Top vs. Rest
Adjust Your Bids by Region
Value per Visitor in Analytics
Purchasing Power in
Germany (GfK)
Further Segmentation (Based on Data Available)
0% 50% 100% 150%
112%
101%
92%
73%
Conversion rates of fashion retail industry
100% = average
Frankfurt
Darmstadt
Wiesbaden
Fulda
80%
90%
100%
110%
120%
109%
106%
102%
96%
Differentiating your bids by region will enable you to generate a sales increase of 20% – while your cost-turnover ratio remains unchanged.
Saxony-AnhaltNRW
Hesse
Bavaria
Maximum: Differentiate by RegionsCoatsSell better in New Hampshire
CR total Shorts Coats
New Hampshire 2.3% 1.4% 2.6%
Georgia 1.8% 1.5% 0.8%
Use different regional bid modifiers forevery product category
ShortsSell better in Georgia
Use Semantic Keyword Characteristics
[BRAND] [DISCOUNT] vs. [BRAND] [BUY] adidas cheaper vs. adidas shoplipsy wholesale vs. buy lipsy
Clustering keyword performance by characteristics such as:• Brand, category• Purchase-signal words• Colour, target groupwill help you place your bids more quickly and accurately.
Example: bargain hunters
Result: Bargain Hunters Are Unprofitable
[BRAND] [DISCOUNT] vs. [BRAND] [BUY]
70%
75%Small shopping cart values
Low margin per purchase
58%Low conversion rates
72%Low rate of new customers
Keywords which still have low click rates, but which fall into the category described above, should be proactively priced down.
CPO ROI CLV
Evaluate your sales results discriminatingly
Accurate evaluation of success
Cost-Turnover
ratio
Which keyword is worth more?
Ray Ban – Aviator EUR 130.49
Ray Ban Sunglasses Daily Lenses 30 Piece
Daily Lenses SetEUR 24.99
Identical in terms of CPO
Ray Ban – AviatorEUR 130.49
Daily Lenses SHEUR 24.99
CPO:EUR 15 Bid: EUR 0.40 CPO: EUR 15 Bid: EUR 0.40
If you set a CPO target value on the account level, all purchases will be valued the same, even if customers’ shopping cart values differ.
Cost-Turnover Ratio Accounts for Revenue Levels
Ray Ban – AviatorEUR 130.49
Daily Lenses SHEUR 24.99
Cost-turnover ratio: 11%Bid: EUR 0.70
Cost-turnover ratio: 60%Bid: EUR 0.10
In terms of cost-turnover ratio, the contact lenses are of less interest to advertisers, and the bid is lowered.
Cost-turnover ratio = CPO / Shopping cart value
Daily Lenses Generate Higher % Profit Margin
Ray Ban – AviatorEUR 130.49Margin: 20%
Daily Lenses SHEUR 24.99Margin: 60%
ROI: 74%Bid: EUR 0.70
ROI: 0%Bid: EUR 0.30
The daily lenses as a private label generate a higher percentage profit margin. The ROI takes short-term profitability into account .
ROI = ( Shopping cart * Margin / CPO ) – 1
Follow-up Purchases of Contact Lenses Boost CLV
Ray Ban – AviatorEUR 130.49
Daily Lenses SHEUR 24.99
CLV: EUR 11 Bid: EUR 0.52 CLV: EUR 30 Bid: EUR 0.60
In contrast to the sunglasses, the contact lenses generate follow-up purchases. These future margins lead to higher bids today.
CLV = Customer Lifetime Value. Long-term profit.
Bid Overview
Ray Ban – AviatorEUR 130.49
Daily Lenses SHEUR 24.99
CPO: EUR 15 Bid: EUR 0.40KUR: 11% Bid: EUR 0.70ROI: 74% Bid: EUR 0.52
CLV: EUR 11 Bid: EUR 0.52
CPO: EUR 15 Bid: EUR 0.40KUR:60% Bid: EUR 0.10ROI: 0% Bid: EUR 0.30
CLV: EUR 30 Bid: EUR 0.60
The CLV model will increase the bids that generate high numbers of valuable new customers – on the condition that you track margins and new customers.
Segmenting keywords leads to improved conversion rates
Test ad texts separately for brands and ad group
Segment Match Types and Ads
AdWords Basics: Segmented Search Queries
Enter the search query of a broad match as a keyword:Differentiated bids, better ads
Broad match performance
TV
TV
LCDTV
LED
TV
2%
1%
0.5%
0% 10,000Clicks per month
4,000 8,000 10,000Clicks per month
Search query performance
ONE average bid
Increase in Average Conversion Rate
More traffic for high-conversion keywordsbecause of:
Good search queries will receive more traffic
0.5%
2%
1%
0%TV
CR
LCDTV
LED
TV
Better ads due to separate keywords
1. Higher bids2. Ad quality3. Quality score
Potential:50% increase in sales due to better ads alone
Testing Ad Texts for Brands
Slogan Adidas Lipsy D&G Aggregate
Sales argument + + - +
Best argument Free shipping 24 hour delivery None Free shipping
Call-to-action + + - +
Best call-to-action Use Code Shop - Shop
„Wide selection“ + + + +
What works best as a slogan in the aggregate may not necessarily work best for individual brands!
Careful when Aggregating Ads!
The same applies when working with ad groups:
Results may be distorted in the aggregate and may not accurately represent individual results.
Total Clicks Impressions CTRFree delivery 54944 7154546 0.8%50% discount 27087 2584300 1.0%
AdGr 1 ClicksImpressions CTR
Free Delivery 13278 180238 7.4%50% discount 3449 315416 1.1%AdGr 2 Clicks
Impressions CTR
Free Delivery 16383 124023 13%50% discount 19358 192810 10%AdGr 3 Clicks
Impressions CTR
Free delivery 25283 6850285 0.4%50% discount 4280 2076074 0.2%
Other Important Segments
• PLA targets: all products brands products
• Remarketing groups, depending on website performance
• Mobile vs. Desktop
Best Practices
1. Segment keywords continuously
2. Optimise ads continuously
3. Bid modifier on campaign level once a month• Weekdays, time of day• Regional• Mobile vs. Desktop
The first step away from using average values will have the greatest impact. Depending on the data available , it may be useful to segment further.