The Soap Opera

Google AdWords Campaign

University of Wisconsin Whitewater Graduate School of Business

Spring 2006

Class:

Internet Marketing 772

Instructor:

Dr. Marilyn Lavin

By:

Ali Tolga Agrali,

Patrick Becker,

and Renee Becker

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Table of Contents

1 SEARCH WORDS/PHRASES...........................................................................................................1

THE SEARCH FOR APPLICABLE ADWORDS WORDS AND PHRASES.........................................................1FINAL SELECTIONS...................................................................................................................................7

2 COPY FOR KEYWORD..................................................................................................................9

3 GEOGRAPHIC AREA...................................................................................................................11

GLOBALLY.............................................................................................................................................11NORTH AMERICA...................................................................................................................................12REGIONALLY..........................................................................................................................................12LOCALLY................................................................................................................................................13GEOGRAPHIC SUMMATION.....................................................................................................................13FINAL SELECTION..................................................................................................................................15

4 BUDGET FOR CAMPAIGN..........................................................................................................16

5 RATIONALE FOR THE BUDGET..............................................................................................18

BUDGET DISTRIBUTION ANALYSIS........................................................................................................19MAXIMUM COST PER CLICK..................................................................................................................22CONCLUSION..........................................................................................................................................23

APPENDIX A: ‘SOAP’...........................................................................................................................24

APPENDIX B: ‘PATCHOULI’, ‘MAJA SOAP’..................................................................................25

References..................................................................................................................................................26

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1 Search Words/Phrases

For simplicity, we have made the following three assumptions for the first part of this paper: We have

assumed a $500 budget, a generic 8-month period of time, and are interested in advertising nationally.

The Search for Applicable AdWords Words and Phrases

‘soap’

The word ‘soap’ is an obvious choice. However, it is likely to be too general of a search term for our

$500 8-month budget. However, we need a baseline to compare other keywords with. The estimated

costs and volume of clicks for ‘soap’, for the entire US, is as follows:

Keywords Search Volume Estimated Avg. CPC Estimated Ad Positions Estimated Clicks / Day Estimated Cost / Day

Soap $0.57 - $0.85 1 - 3 702 - 885 $400 - $760

Based on this estimate, the $500 budget would be exhausted in about a day. Obviously s more specific

keywords, or phrases, are needed. It also may help to narrow the geographic region, though we will

discuss that point later in this document.

Overture (www.overture.com), a division of Yahoo Inc., offers a free keyword selector tool. It offers

search rates in Yahoo for a variety of complimentary or similar words or phrases. This is superior to the

Google tool, which only offers possible keywords. Inputting ‘soap’ into this tool gives the suggestions

in appendix A. Our baseline word, ‘soap’, was searched 76,579 times in February 2006, on Yahoo!.

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The first phrase on the list in appendix ‘A’ that comes to mind after visiting the homepage of the soap

opera is ‘glycerin soap’. This is still likely too broad of a term, though is it more specific than ‘soap’.

We input it into the Google traffic estimator, using English for language, and US for region:

Keywords Search Volume Estimated Avg. CPC Estimated Ad Positions Estimated Clicks / Day Estimated Cost / Day

glycerin soap $1.02 - $1.39 1 - 3 4 - 5 $4 - $7

These results are much improved. Our $500 budget would last about 90 days. Some careful selection of

days with in the 8-month period would be the only additional step needed. For example, advertising

only on weekends (Friday – Sunday) is a potential scenario. However, this is just one praise of many

that a potential customer might use to find a supplier such as the soap opera. Also, the cost per click is

more expensive than ‘soap’, at a little over $1 per click.

A less searched term from the list on appendix ‘A’ is ‘organic soap’. For comparison, we input this

phrase into the Google ad words traffic estimator with the same other settings:

Keywords Search Volume Estimated Avg. CPC Estimated Ad Positions Estimated Clicks / Day Estimated Cost / Day

organic soap $0.87 - $1.17 1 - 3 2 - 3 $2 - $4

This praise is a little less expensive than organic soap, and would likely result in a few less clicks per

day. Using this key phrase alone, our $500 budget would last about 166 days, or around five and a half

months running daily. It is a good fit to the budget. However, this term does not a clear connection to

the unique products that the soap opera offers. For example: this term does not appear on the company

store homepage.

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Title Tag Keywords

Perhaps a more distinctive phrase, or phrases, could be found that better match the company offerings.

The first phrase in the homepage’s title tag is ‘maja soap’. This is followed by ‘primal elements soap’,

‘mason pearson brushes’, and ‘ahava hand cream’. The Google AdWords Traffic estimates for these

phrases are:

Keywords Search Volume Estimated Avg. CPC Estimated Ad Positions Estimated Clicks / Day Estimated Cost / Day

maja soap $0.00 - $2.19 1 - 3 0 $0 - $1

primal elements soap $0.00 - $2.91 1 - 3 0 $0 - $

mason pearson brushes $2.98 - $4.15 1 - 3 1 $3 - $5

ahava hand cream $8.72 - $13.08 1 - 3 0 - 1 $3 - $10

These results are interesting. They have vastly different cost per clicks. It can safely be assumed that

other companies are using the later two praises as their AdWords, with some serious competitiveness

over the ahava hand cream key phrase.

What is Searched for by Customers?

After exploring thesoapopera.com, we were overwhelmed by the wide selection of very unique products

from around the world. Wishing to find some more specific search terms that would reflect the

distinctiveness of the soap opera, one of our group members went down to The Soap Opera to look at

the products they have on display and speak to some of the employees. We hoped that this would help

us to learn about the actual store itself and help us to narrow down our ideas for possible AdWords.

The store itself was packed with unique, colorful, and attractive products just like their web site. She

even saw some familiar products form the web site, like some of the soaps. She also noticed that they

had a sign up advertising their web site by some of the soaps. But once again there were a lot of products

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to look at so Renee opted to actually speak to some of the store employees to try and gain some insight

into their products and sales.

Renee spoke with two different employees. They were each asked which product sells the best, what

attracts people to their store, which brands sell the best, and what their top three products are. The first

employee stated that everything sells very well; but that they are known for their wide selection of

natural products that they import from around the world that people in and around Madison cannot buy

anywhere else locally. The second employee stated that there was not one particular product that sold

the best. He said that he could not even list the top three best sellers in their store. But he did say that a

lot of people specifically come in and ask for products containing patchoulin. He stated that patchoulin

is a natural ingredient that is in a lot of the most popular products they sell like soaps, shampoos, lotions,

fragrances, and oils. He lastly stated that any products containing patchoulin sell very well.

Renee decided to look at some of the products to see if she could find any name brands that were

consistently listed on number of products through out the store. She thought that some of the brands that

had multiple products being sold in the store and on-line might be another source of AdWords. Burt

Bees and Crabtree and Evelyn were two name brands that Renee recognized as being high quality and

natural products that other people on the Internet might recognize and look for. The group thought that

those brand names might get more hits than specific ingredients, but they also might be more expensive

in cost per click.

After comparing the on-line store and the shop on State Street we determined that the atmosphere

presented in each was very similar. Our own observations about the web site like the natural products

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that were very unique also were consistent with Renee’s findings in the store. We decided that we

would take the information we learned from the stores employees and use it for our campaign. We

started out by investigating and researching patchoulin by entering it into the AdWords traffic estimator.

Investigating ‘patchoulin’

The AdWords Traffic estimate for “patchoulin’ is unclear:

Keywords Search Volume Estimated Avg. CPC Estimated Ad Positions Estimated Clicks / Day Estimated Cost / Day

patchoulin Not enough data to give estimates. [?]

Also, Overture’s search tool also lacked in results for ‘patchoulin’.

Patchoulin is an oil, and is the common name for Pogostemon Cablin Oil. AdWords traffic estimator

results for this phrase is:

Keywords Search Volume

Estimated Avg. CPC

Estimated Ad Positions

Estimated Clicks / Day

Estimated Cost / Day

Search Total   $0.05 - $0.10 1 - 3 0 $1

CABLIN Not enough data to give estimates. [?]

POGOSTEMON $0.05 - $0.10 1 - 3 0 $1

POGOSTEMON CABLIN $0.05 - $0.10 1 - 3 0 $1

POGOSTEMON CABLIN OIL Not enough data to give estimates. [?]

‘pogostemon’, or ‘pogostemon cablin’, clearly does occasionally get searched on Google, yet is not

competitively sought as an adword. It has definite possibilities to bring in some business occasionally.

The Overture keyword selection tool comes up with the following search frequencies for ‘pogostemon

cablin’:

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Searches done in February 2006Count Search Term 119  pogostemon cablin 98  pogostemon 69  helferi pogostemon 30  pogostemon patchouli

‘Patchouli’, which is spelled similarly to pathcoulin, is a frequently searched term on yahoo, with 6,887

searches in February 2006. Frequently searched phrases containing ‘patchouli’ include ‘patchouli oil’

(4,835 searches),‘patchouli candle’ (1,071 searches), and ‘patchouli soap’ (265 searches). The complete

list of similar phrases is in appendix ‘B’. The Google AdWords traffic estimates are:

Keywords Search Volume Estimated Avg. CPC Estimated Ad Positions Estimated Clicks / Day Estimated Cost / Day

patchouli $1.11 - $1.62 1 - 3 3 - 4 $7

patchouli oil $1.48 - $1.91 1 - 3 0 $1

patchouli soap $0.00 - $1.19 1 - 3 0 $0 - $1

‘Patchouli’ has a surprising 3-4 clicks per day estimate, and is reasonably priced as compared to

competitively used phrases such as ‘ahava hand cream’. Using ‘patchouli’ alone with our $500, 8-

month, budget would yield 71 days, or about two days per week.

Meta Tags

One final search was to review the meta tags in use on the company home page. We assume that these

keywords and phrases reflect popular and profitable items sold on the company on-line store. From this

we found two additional phrases, ‘bert bees’, and ‘crabtree evylin’. Interestingly ‘patchouli crabtree and

evylin’ is one of the suggested search terms in Appendix B, Overture’s keyword suggestions for the

‘patchouli’ keyword. The Google AdWords traffic estimates for these two phrases is:

Keywords Search Volume Estimated Avg. CPC Estimated Ad Positions Estimated Clicks / Day Estimated Cost / Day

bert bees $2.79 - $3.49 1 - 3 0 - 1 $2 - $3

crabtree evelyn $9.11 - $13.66 1 - 3 12 - 15 $110 - $210

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‘Crabtree evelyn’ is rather expensive per click. Also, the estimated frequency would exhaust the budget

in less than a week. ‘bert bees’ is less expensive, comparable in cost per click and estimated clicks per

day to some of the other brand names in the home page’s title tag.

Final Selections

We have come up with a number of valid words and phrases that have good potential of driving

customers to the Soap Opera’s web store. However, the estimated costs per click are expensive for

some. Also, the estimated traffic is low, less than one per day, for others. Finding a happy medium,

while staying within budget, is a challenge.

We feel it would be best to focus on just one or two keywords or phrases, in order to maximize the

response for the relatively small budget. As the company gains experience with Google’s AdWords,

other keywords or phrases could be tested.

‘pathcouli’

We strongly suggest the use of the keyword ‘patchouli’ as one of these choices. It is a distinctive

commonality for many of the stores products. Store employees specifically suggested this keyword as

something distinctive about the store offerings. They went on to state that customers specifically come

to the store and request products that contain patchouli oil.

Additional support for this keyword is the estimated click frequency, of 3-4 per day. This is sufficient

traffic to have a noticeable impact on the store’s bottom line over time. It has been proven that buying

behavior on-line is similar to buying behavior in stores. Having in-store customers specifically

requesting products containing patchouli should transfer well to the same search being performed on-

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line. Also, we feel that patchouli is a specific enough search term to result in a high-completed sale

percentage for customers found using Google’s AdWords advertising. These people are likely to be

searching for a source to buy products containing patchouli oil, such as soap and hand cream.

‘maja soap’

We suggest a second potential search keyword/phrase of ‘maja soap’. Being that ‘maja soap’ is the first

item listed in their title and meta tag, we assumed it must be an important product that they sell. It has

one of the lowest costs per click for the brand and trade names featured in the store’s title and meta tags.

Also, maja soap is offered at the top of the store’s home page, suggesting that it is a good selling, and

profitable, item.

‘Maja Soap’ has a much lower estimated click through rate than ‘patchouli’, though should still bring in

some clicks, and sales, of Maja soap. Overture’s keyword suggestion tool showed 252 searches for

‘maja soap’ on Yahoo! in March 2006. Additionally, there were no other variations of the phrase of any

relevance, as shown in Appendix B.

Traffic and Cost Estimate

The Google AdWords traffic and cost estimates for a campaign using both ‘patchouli’ and ‘maja soap’,

for the entire US, is:

Keywords Search Volume Estimated Avg. CPC Estimated Ad Positions Estimated Clicks / Day Estimated Cost / Day

Search Total   $1.11 - $1.69 1 - 3 3 - 4 $7

Maja soap $0.00 - $2.19 1 - 3 0 $0 - $1

patchouli $1.11 - $1.62 1 - 3 3 - 4 $7

From this estimate we can see that ‘patchouli’ is likely to be the driving force in this advertising

campaign.

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2 Copy for Keyword

In order to make an educated decision about which words to include for the copy of The Soap Opera, we

felt like we had to do more research than just looking at all of the wonderful products that were listed on

their web page. We started by looking at what exact products we saw dominating the majority of Soap

Operas’ web pages. We noticed that they were selling a lot of different kinds of soaps, hair products,

lotions, oils, and other bath products as was consistent with their store on State Street. We concluded

that The Soap Opera’s website targets the same luxury item shoppers target market as the company’s

store.

Our next logical step was to look at The Soap Opera’s title tags and meta tags. Their title tag was listed

as <title.Maja soap, mango soap, primal elements soap, mason pearson brushes ahava hand

cream</title>. Their meta tag was listed as <meta=maja soap, mango soap, primal elements soap,

mason pearson brushes, ahava and cream, glycerin soap, natural hair conditioners, natural handmade

soap, natural sea sponge, bath body splash, perfume oils, vic complection cloth”>. We thought that

looking at the meta and title tags we could see what products The Soap Opera thought were important.

After comparing out list from their web page, the actual store, and the meta and title tags, we decided

that a more simple approach would be best to try and capture people searching for general items and

more specific items. Simple approach meaning that we decided to use the words ‘patchouli’ and ‘maja

soap’ to try and direct a niche in The Soap Operas market base who look for ‘maja soap’ or products

that contain ‘patchouli.’ The people who are searching on these key words would probably be looking

to buy a certain product as opposed to people who search for just ‘soap.’

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Taking some of their most featured products like glycerin and maja soap, which are natural products, we

thought it would be best to include the words ‘natural’ and ‘soaps’ in the beginning of the copy. We then

thought since we learned from store employees that products containing patchouli were their best sellers,

we should list some of those more general products in the copy assuming that some people searching on

the web would be looking for those items with a specific ingredient in them. We were told lotions,

perfumes, and oils also contained patchouli so those were the next words we decided to include in our

copy. We hoped that some people looking for specific items like maja soap or glycerin soap would look

at the copy and decide to continue on to thesoapopera.com.

We thought that trying to include specific keywords like ‘maja’ or ‘patchouli’ in the copy itself would

be restrictive in the range of products that are offered in the advertisement. This is particularly true in

the case of the ‘patchouli’ keyword, which is the workhorse of this campaign. We feel that customers

would be searching for products containing patchouli, and not patchouli oil itself. This includes soap

containing patchouli. By simply stating ‘Imported natural soaps’, both searches for soap containing

patchouli, and maja soap, are covered.

Using the keywords ‘maja’ or patchouli’ to search would lead people to the copy. The copy that would

come up would show the products like soaps and lotions that patchouli and maja are ingredients of.

People who come into the store are looking for soaps, lotions, oils, and fragrances that contain patchouli,

as we were told by knowledgeable store employees. We thought that some of the same people who are

fans of products containing patchouli would search the same way on the Internet looking for products

that contain patchouli. Especially since The Soap Opera can ship their loyal fans favorites right to their

door.

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Combining all of these items together, we came up with the following tag line: “Imported natural soaps,

lotions, oils, fragrances, and shampoos.” Here is what this advertisement would look like on Google:

Ads   + Create New Ad: Text Ad | Image Ad | Local Business Ad

Back up to keywords

The Soap Opera Imported natural soaps, lotions, oils, fragrances, and shampoos. www.thesoapopera.com

Ad text with any revisions you make below.

Headline:   Max 25 characters

Description line 1:   Max 35 characters

Description line 2:   Max 35 characters

Display URL:   http://  Max 35 characters

Destination URL:   Max 1024 characters

 

3 Geographic Area

Up to this point we have chosen the United States as our geographic region for Google’s AdWords

traffic estimator. However, smaller, or larger, regions are also possible, and worth considering.

Globally

For curiosity’s sake we did an estimate of the cost to advertise the chosen keywords globally, restricting

only by searches done in English. According to the testimonials on the soap opera website, they have

customers from India and UK, among other locations. The following results were obtained:

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Keywords Search Volume Estimated Avg. CPC Estimated Ad Positions Estimated Clicks / Day Estimated Cost / Day

Search Total   $0.80 - $1.16 1 - 3 11 - 17 $10 - $20

maja soap $1.80 - $2.35 1 - 3 0 - 1 $1 - $2

patchouli $0.78 - $1.12 1 - 3 10 - 16 $9 - $20

This advertising option is rather expensive, when considering our $500 budget. The budget would

provide approximately 30 days of advertising.

North America

Another large region to consider is all of North America. Combining the US with Canada and Mexico

yielded the following results:

Keywords Search Volume Estimated Avg. CPC Estimated Ad Positions Estimated Clicks / Day Estimated Cost / Day

Search Total   $1.07 - $1.62 1 - 3 9 - 13 $10 - $20

maja soap $0.00 - $2.19 1 - 3 0 $0 - $1

patchouli $1.07 - $1.53 1 - 3 9 - 13 $10 - $20

Clearly we could not advertise on Google every day using this geographic region. The $500 budget

would again yield approximately 30 days of advertising, or one day per week for eight months.

Regionally

A smaller region to consider could be anyone within 500 miles of Madison, Wisconsin. That would

include all of Wisconsin and Wisconsin’s surrounding states, including Illinois, Indiana, Iowa,

Michigan, Minnesota and Missouri. Google’s AdWords traffic estimates for this region is:

Keywords Search Volume Estimated Avg. CPC Estimated Ad Positions Estimated Clicks / Day Estimated Cost / Day

Search Total   $0.77 - $1.14 1 - 3 2 - 3 $2 - $4

maja soap $0.00 - $2.27 1 - 3 0 $0 - $1

patchouli $0.77 - $1.10 1 - 3 2 - 3 $2 - $3

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With this geographic restriction we find a reduction in cost per click, which is a notable result. As

would be expected, the estimated clicks per day is less, but still sufficient to contribute in a measurable

way. The $500 budget would last approximately six months ruining daily with this geographic

restriction.

Locally

A fourth possibility is to simply advertise locally. A workable definition of local would be within 80

miles of Madison, Wisconsin. That region includes all of southern Wisconsin, and part of northern

Illinois. This includes the cities of Madison, Milwaukee, and Rockford.

Keywords Search Volume Estimated Avg. CPC Estimated Ad Positions Estimated Clicks / Day Estimated Cost / Day

Search Total   $0.75 - $1.23 1 - 3 0 $1

maja soap $0.00 - $2.33 1 - 3 0 $0 - $1

patchouli $0.75 - $1.08 1 - 3 0 $1

We find that the estimated costs per click are lower than the regional calculation. However, the

estimated clicks per day are quite low with this geographic restriction.

Geographic Summation

For our chosen pair of search terms, ‘patchouli’ and ‘maja soap’, we have analyzed five possible

geographic choices: Globally (global), all of North America (continental), all of the U.S. (national),

within 500 miles of Madison, WI (regional), and within 80 miles of Madison, WI (local).

Geographic RangeEstimated Avg. CPC

Estimated Clicks / Day

Estimated Cost / Day

Simplified Average Cost per Day(Avg.CPC*Avg.Clicks)

Typical Number of Days $500 Would Provide

Global $0.80 - $1.16 11 - 17 $10 - $20 $13.72 36

Continental $1.07 - $1.62 9 - 13 $10 - $20   $14.80 34

National $1.11 - $1.69 3 - 4 $7   $4.90 102

Regional $0.77 - $1.14 2 - 3 $2 - $4   $2.87 174

Local $0.75 - $1.23 0 $1 $0.45 1000

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An eight-month period is typically 245 days in duration. From the above ‘Typical Number of Days

$500 Would Provide’ calculations we can see that when advertising daily the geographic region could

be no larger than within 500 miles of Madison, Wisconsin (regionally). The Soap Opera is known for

their wide selection of natural products that they import from around the world that people in and around

Madison cannot buy anywhere else locally. As stated from their web site under company services,

“Mail orders, which make up roughly 20 percent of the business, are labeled and shipped from a small

desk at the back of the store. Mail orders are particularly popular, the two said, among all customers and

especially far flung Madisonians, because of the time-saving aspect and because orders are usually

shipped within 24 hours and may be shipped anywhere in the US and internationally.”

The advantages in term of getting the maximum return on investment are numerous. The Soap Opera

seems to be a company that primarily serves the Madison area and surrounding communities. Please

refer to our chart below:

Regional Advantages

More total number of clicks per campaign

Higher return on investment (ROI)

Local customers more likely to be repeat customers

Online transfers to in-store

In-store transfers to online

Disadvantages

Limited Area

Less estimated clicks/day determined by Google

From this it is clear that advertising globally, or across the entire North American continent, though

attractive, would provide extremely limited number of days of advertising. The attractiveness dims

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further when considering the loyal customer base in and around the Madison area. Even 20% of their

shipping orders go to local Madisonians who are too busy to go downtown to buy their favorite

products. As stated in their customer testimonials listed on thesoapopera.com, “Okay, you folks are

SCARING me!!! I place my order midday on Thursday and  it arrives at noon the next day??? There is

NO ONE who can touch you in customer service....” Focusing on a more local customer base would

make better use of the advertising dollars we have to spend in terms of gaining and retaining lifelong

customers.

Final Selection

We recommend that The Soap Opera’s AdWords campaign be focused regionally. We were careful to

find keywords that would allow for advertising in a geographic area greater than the immediate local

area. Advertising regionally allows a reasonable cost per day, while providing a measurable average

daily click-through rate.

Focusing strictly on local buyers would restrict the campaign to only 20% if their Internet store’s

customer base. It would also provide limited click-throughs with our selected keywords, estimated at

less than one per day on average.

Conversely, focusing the campaign nationally, or globally, would be too expensive per day, for our $500

budget. Too few days would receive advertising over the applicable eight-month period. Additionally,

we feel that the further a customer is from Madison Wisconsin, the less likely they are to be repeat

buyers. Thus, using too broad of a geographic area for the campaign would lead to less effective use of

the limited advertising funds.

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4 Budget for Campaign

The input variables for this budget are the keywords selected in the search for keywords (‘patchouli’ &

‘maja soap’), and the regional geographic region selected in the geographic analysis (within 500 miles of

Madison, Wisconsin). We know from the Google traffic estimator that the average daily cost will

typically be between $2 and $4. We also know that 2-3 clickthroughs per day should typically be

expected.

We recommend that the advertising budget be distributed unevenly across two time periods. This is to

optimize the chlickthrough rate for the busiest shopping days of the year. A detailed explanation of the

budget allocations, and rationale, follows in the next section.

We recommend that from May through mid-November that advertising be done three days per week,

with an average daily expenditure of $3.57. This works out to ($3.57 * 30) $107 as the monthly budget

figure for the AdWords campaign manager. Preferably, we feel these three days should be every Friday,

Saturday, and Sunday. We know that these are the biggest days of the week on E-bay, and assume this

transfers to on-line shopping at The Soap Opera’s Internet store. Alternatively, any 13 days of a month

could be utilized. The managers of The Soap Opera’s shipping department are certain to have good

ideas as to which days of a month bring the most orders in.

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From mid-November through the end of the year we recommend advertising daily, with an average daily

expenditure of $4.08. This works out to ($4.08 * 30) $122 as the monthly budget figure for the

applicable days. Advertising daily during the holiday shopping season is intended to attract the greatest

number of customers per day of advertising budget.

We recommend setting the maximum costs per click for each keyword to the number recommended by

Google’s traffic estimator. This is $2.26 for ‘patchouli’, and $2.97 for ‘maja soap’, for both campaign

periods. These amounts should be sufficient to successfully win bidding for ad space for 85% of

searches on each keyword.

Alternatively, if there is often money left over at the end the month, Google’s Budget Optimizer can be

used to automatically set your maximum costs per click. “The Google Budget Optimizer™ campaign

management tool automatically adjusts your keyword maximum cost-per-click (CPC) amounts on your behalf. All

you need to do is set a target budget, and the Budget Optimizer will actively seek out the most clicks possible

within that budget.”1 The budget optimizer will adjust the maximum cost per click rates to favor the most

clicked keywords. We recognize that after using the Budget Optimizer for a period of time it may be

necessary to re-adjust the maximum cost per click for ‘maja soap’, as it will not perform as well as

‘patchouli’ and will gradually be reduced. However, the budget optimizer will help you maximize your

bids for each keyword, while still staying within your budget. This maximizes the number of

clickthroughs received per month for a given monthly (30-day) budget.

1 Google Budget Optimizer - https://adwords.google.com/support/bin/answer.py?answer=16271&ctx=sibling

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5 Rationale for the Budget

Google AdWords campaigns require only a few pieces of data. The required items are a list of

keywords, a geographic area, search language, a budget per month, a time period for the ad to run, and a

maximum cost per click for each keyword or key phrase. We have already selected a list of keywords,

search language, and geographic area. This leaves time period, a budget per 30-day period, and

maximum cost per click figures for each keyword or keyword phrase.

For the monthly budget, it would be simple divide the total budget by the number of applicable months,

and set that as the monthly budget. ($500/8 = $62.50)

We know from our geographic analysis that selecting to advertise regionally would restrict the campaign

sufficiently to stretch the monthly budget across the majority of the days in a month. However, the

allotted budget per month is almost certain to run out at some point. ($62.50/month divided by $2.87

average cost per day = 22 days) We then considered the effect of higher shopping periods of the year,

such as the holiday shopping season. In November and December, an equally shared monthly budget is

sure to run out long before the end of the month.

We know from the news media that the three biggest shopping days of the year are the long weekend

after Thanksgiving, the weekend before Thanksgiving, and the weekend after Christmas, with the

weekends between also being relatively high. We decided to select the time period from November 12

to December 31 as high budget (Period 2), and the time from now till mid-November as low budget

(Period 1). We then performed an analysis to produce a daily budget for each time period.

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Additional evidence supporting increasing advertising during the holiday season are found in the testimonials found in The Soap Opera’s web site2:

I just want to say thank you for being there!! I have ordered from you before and thoroughly enjoy your prompt response and service. This is very convenient Christmas shopping.

Thanks Again, Connie

Happy Holidays. I love shopping with you!

Deborah

Budget Distribution Analysis

Before preparing budget we decided analyze AdWords campaign in two periods. The period -1 will be

from May 1 through November 12 and the period 2 will be from November 13 to December 31. The

reason for breaking down into two periods is we don’t want to miss the opportunity of advertising

during the Thanksgiving and Christmas.

Deciding how many days to advertise in the first period is a challenge. There are 28 weeks in period-1

and 7 weeks in period-2. Through the holiday season we do not want to miss a day so we are going to

advertise for 7 days per week. This makes 49 days. We need at least $3 per day, which makes roughly

$147 during the holiday season. This leaves $353 for the whole 28 weeks. Therefore, we need

approximately $12 per week and dividing with the minimum estimated daily budget of $3 gives us 4

days per week.

We thought 4 days per week is too much because we want spare more dollars for the period-2.

Proportionately, for the period-1, we decided to advertise only 3 days a week and everyday for the 2 customer comments- www.thesoapopera.com/scgi/bin/scart.cgi/cs_feedback.php3?scartid=1402448

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period-2. This basic logic helped us to determine how many days we are going to run campaign. We

start allocating the budget first by looking at the ratio of the period-1 and period-2. The period-1 is 4

times greater than period 2. We wanted to allocate enough money for both of the periods that we could

get reasonable clicks for both of the periods. The ratio of the period-2 in terms of weeks makes 25% of

the weeks we want to advertise. Allocating the 25% of the budget for period-2 makes $125 dollar. This

amount is low especially designing our advertisement campaign for the holiday season.

As a second step, we try to allocate our budget in terms of days. The total days we are planning to

advertise are 133 days. 84 days is for period-1 and 49 days for period-2. This period-1 will get 63.2% of

the budget and 36.8% for the period-2. This calculation gives us equal daily budget amounts for both of

the periods, which we don’t want. For the period-2 we want to allocate a little bit more, hoping to

capture fair amount of customers or clicks. We finalize our allocation by 60% for the period-1 and 40%

for period-2. The daily budget for period-2 comes to $4.08, and $3.57 for period-1. As a final step, we

want to prepare on average budget distribution table for Regional advertisement campaign.

REGIONAL ADVERTISEMENT BUDGET MONTHLY DISTRIBUTION

Weeks/monthKeywords Patchouli Maja Soap Patchouli Maja Soap Patchouli Maja Soap Patchouli Maja Soap Patchouli Maja Soap Patchouli Maja Soap Patchouli Maja Soap Patchouli Maja Soap Patchouli Maja SoapMontlhy Clickthroughs 46 38 46 38 57 47 46 38 57 47 46 38 23 19 92 75 122 100Montlhy Cost $42.86 $42.86 $42.86 $42.86 $53.57 $53.57 $42.86 $42.86 $53.57 $53.57 $42.86 $42.86 $21.43 $21.43 $85.71 $85.71 $114.29 $114.29

November 23

December4

October4

November 12

August4

September5

Jun4

July5

May4

With this calculation, we are able to get an idea of how many clickthroughs to expect in terms of month,

total campaign duration and for period-1 and period-2. Putting all the budget analysis together with the

Google Traffic estimator estimates allow us to create clickthrough predictions for each period and

keyword.

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Patchouli Maja Soap Patchouli Maja Soap Patchouli Maja Soap Patchouli Maja Soap Patchouli Maja Soap Patchouli Maja SoapMin. Rate 390 30000 260 20000 650 50000 $0.77 - $1.10 $0.00 - $2.27 2-3 0 266-399 0Av. Rate 321 263 214 175 535 438 $0.77 - $1.10 $0.00 - $2.27 2-3 0 266-399 0Max. Rate 273 132 182 88 455 220 $0.77 - $1.10 $0.00 - $2.27 2-3 0 266-399 0

Estimated Clicks/Campaing Based on Budget Total # Clickthrouhgs Traffic estimator Rate Estimated Clicks/day

Regional Advertisment

May 1 - Nov. 12 Nov. 13 - Dec. 31 Google AdWords Estimates

**Estimated Clicks per campaign calculated as (total number of campaign days * Estimated(Google) clicks/day)

The low daily estimate of clickthroughs for the ‘maja soap’ key phrase makes calculating the number of

clicks it will earn over time difficult to calculate. The ‘patchouli’ keyword will definitely be the

workhorse of the campaign. This keyword produces stable clickthroughs. Main reason of investing on

this keyword is that customers more likely to be looking specific items that has a “patchouli” ingredient

in it. With sparing more daily budget in period-2, we are able to generate 40% of the clickthrouhgs in

one quarter of a campaign period.

Advantages

More total number of clicks per campaign

Higher return on investment (ROI)

Local customers more likely to be repeat customers

Online transfers to in-store

In-store transfers to online

Customer preferred keyword choice

Breaking down the campaign in 2 periods, will capture more holiday shoppers

As the store employees said, “ The Soap Opera is the only local store people can by national products

imported from around the world.” People are very loyal to the company and appreciate the company’s

customer service. Even 20% of shipping goes to local Madisonians but they are return customers. This

would in return increase ROI. According to customer testimonials Christmas and holidays are a big time

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for sales. Distributing the budget in two periods will capture holiday shoppers. The other advantage of

online presence is give us opportunity to transfer online customers to in-store customers or vice versa.

Maximum Cost Per Click

We did one last analysis, using the Google AdWords traffic estimator. The input variables are each

keyword/ key phrase independently, searches only in English, with a geographic restriction of within

500 miles of Madison, Wisconsin. The results of these estimates help to determine the maximum cost

per click to be utilized for each keyword.

‘patchouli’

Average CPC: $0.90 (at a maximum CPC of $2.26) Estimated clicks per day: 2 (at a daily budget of $3.57)

Average CPC: $0.90 (at a maximum CPC of $2.26) Estimated clicks per day: 2 (at a daily budget of $4.08)

Keywords Search Volume Estimated Avg. CPC Estimated Ad Positions Estimated Clicks / Day Estimated Cost / Day

patchouli $0.72 - $1.02 1 - 3 2 $2 - $3

We can see from this handy calculator that the maximum cost per click for the ‘patchouli’ key word

should be set at $2.26 for both campaign periods. According to Google, this estimate should be

sufficient to win the bidding for ad space 85% of the time. The resulting cost per click will average

$0.90 per click.

‘maja soap’

Average CPC: $2.17 (at a maximum CPC of $2.97) Estimated clicks per day: 0 (at a daily budget of $3.57)

Average CPC: $2.17 (at a maximum CPC of $2.97) Estimated clicks per day: 0 (at a daily budget of $4.08)

Keywords Search Volume Estimated Avg. CPC Estimated Ad Positions Estimated Clicks / Day Estimated Cost / Day

maja soap $0.00 - $2.27 1 - 3 0 $0 - $1

For ‘maja soap’, we see the recommended maximum cost per click is $2.97 for both campaign periods.

The resulting cost per click for this keyword phrase will then average $2.17. This is a higher cost per

click than ‘patchouli’. However, a person using ‘maja soap’ as a search term is highly likely to be

seeking to buy Maja soap. This is clearly a strong selling product on The Soap Opera’s Internet store.

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Establishing The Soap Opera as a reliable source for Maja soap for these first-time customers is certain

to earn additional repeat business, further reducing the cost of customer acquisition.

Conclusion

Our careful analysis and selection of the keywords, geographic area, daily/monthly budget, distribution

of advertising days during the given time period, and maximum cost per click has resulted in a

surprisingly good campaign. Our analysis suggests $500 spend in the way we have described over eight

months should produce approximately 535 clickthroughs. This works out to slightly less than $1 per

click, on average.

This one dollar per click should be easily be made back by attracting new customers to the soap opera’s

web site. We expect that customers using these fairly specific keywords in a search should be willing to

buy at the time of their initial visit, leading to a high rate of completed sales per click. Additionally, the

advertising dollars will be made back many times over when considering repeat business.

Overall we think that The Soap Opera offers a very unique and wide selection of natural products that

they have imported from around the world. We believe with a budget of $500.00 that our campaign will

help them to capture customers that are looking for Maja soap, or products containing patchouli. The

Soap Opera already has customers driving downtown just to ask for products containing patchouli.

Additionally, Maja soap is featured at the top of their home page. This advertising campaign is intended

to take advantage of this popularity to attract new customers to The Soap Opera’s Internet store.

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Appendix A: ‘soap’

‘soap’ results from the Overture keyword selector tool:

Searches done in February 2006

Count Search Term Count Search Term Count Search Term Count Search Term Count Search Term Count Search Term

 115853  opera soap  7202  digest

soap  3706  child opera soap  2526  oil olive

soap  1962  black soap  1417 digest.com opera soap

 76579  soap  6383 opera passions soap

 3642  make soap  2505  soap opera.com  1750  bubble

soap  1402  buzz opera soap

 45757  digest opera soap 6366  net soap  3528  cbs opera

soap  2499  exfoliating soap  1748  nbc soap  1393  antibacteri

al soap

 30511  central soap 5734  dispenser

soap  3456  melaleuca soap  2419  soap

update  1674  soap tv  1389  soap star

 26196  making soap  5585  soap zone  3365  soap in

depth  2395  bath soap  1640  day life our soap  1385  abc soap

spoiler

 21831  abc soap  5532  mold soap  3352  daytime soap  2374

 soap opera network

 1614 cbs daytime soap

 1384  soap wholesale

 20839  central opera soap  5532

 opera soap weekly

 2907  abc depth in soap  2362

 guiding light soap opera

 1519  eye soap  1369  ivory soap

 15818  cbs soap  5466 making soap supply

 2907  abc opera soap  2315  soap note  1504  child soap  1348

 making recipe soap

 14827  city soap  5453  soap talk  2870  homemade soap  2293  goat milk

soap  1498  daytime opera soap  1299  network

soap

 12544 opera soap update

 5322  dove soap  2853  recipe soap  2199

 beautiful bold opera soap

 1485  african black soap  1263

 as opera soap turn world

 11376  natural soap  5120  soap

yahoo  2841  bar soap  2190  box derby soap  1482

 abc daytime soap

 1253  soap supply

 10234 directory opera soap tv yahoo

 4547 day life opera our soap

 2822  news opera soap  2141  opera

soap yahoo  1470  laundry soap  1243  cbs depth

in soap

 8567 opera soap spoiler

 4238  basis soap  2788  net.com soap  2123  central.co

m soap  1468  dial soap  1224  lye soap

 8441  handmade soap  4099  dish soap  2678  glycerine

soap  2034  hair opera soap style  1462  castile

soap  1218

 general hospital soap spoiler

 8001 general hospital opera soap

 4094  shoes soap  2548  soap

system  1985  hunk soap  1459  news soap  1191  organic soap

 7821  soap spoiler  3788

 general hospital soap

 2541  city.com soap  1966  liquid soap  1450  fan opera

soap

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Appendix B: ‘patchouli’, ‘maja soap’

‘patchouli’ results from the Overture keyword selector tool:

Searches done in February 2006Count Search Term Count Search Term 6887  patchouli  50  garden patchouli 4835  oil patchouli  47  comforter patchouli 1071  candle patchouli  43  body lotion patchouli 265  patchouli soap  43  candle patchouli scented 242  patchouli plant  41  jovan patchouli 200  patchouli stella  39  by patchouli thomasville 186  patchouli perfume  38  based patchouli perfume 126  bedding patchouli  38  fresh jovan patchouli 99  incense patchouli  35  patchouli reminiscence 97  candle patchouli yankee  34  julie patchouli 95  buy patchouli  32  oil patchouli perfume 95  essential oil patchouli  30  by comforter patchouli purple set thomasville 89  cologne patchouli 30  crabtree patchouli 83  patchouli thomasville  30  patchouli pogostemon 59  patchouli seed  28  man patchouli 56  bedding patchouli thomasville  27  patchouli product 54  fragrance patchouli  26  crabtree evelyn patchouli 51  patchouli shampoo  26  myspace.com patchouli site

‘maja soap’ results from the Overture keyword selector tool:

Searches done in March 2006Count Search Term 252  maja soap

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References

Google AdWords campaign manager. https://adwords.google.com/select/

Google AdWords Traffic Estimator Toolbox.

https://adwords.google.com/select/TrafficEstimatorSandbox

Overture Keyword Selector Tool. http://inventory.overture.com/d/searchinventory/suggestion/

The Soap Opera. www.thesoapopera.com

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