Michael Griffin found it frustrating in the early days of search engine marketing that he saw lots of ads when he searched for generic terms like “television,” but few when he searched for a specific model or brand of TV. “When you know what you want, that’s when they stop advertising,” says Griffin, co-founder and chief technology officer at search marketing firm Adlucent LLC. That didn’t make sense and led to a key tenet of Adlucent’s search strategy: advertise to customers ready to buy.
Andra Group Inc., which sells lingerie and underwear at HerRoom.com and HisRoom.com, has seen the value of that strategy since switching its paid search campaign to Adlucent in February. “They’ve increased my return on ad spend by at least 100%,” says Tomima Edmark, CEO of Andra Group.
That’s been accomplished in part by tripling the 12,000 keywords Andra Group had been bidding on to include more specific terms and phrases. “For example, bra is a very generic term and there’s a ton of traffic on it, but not high conversion,” Edmark says. “They have been able to find key phrases with bra in it that turned my bra campaign profitable.”
Those phrases include specific sizes and brands, Griffin says. He says “bra” is a good example of a generic term that many online retailers would bid on and that would generate a lot of traffic but relatively few sales. That makes such terms unprofitable for a retailer paying for each click on a search results page ad.
They would also be unprofitable for Adlucent, which only gets paid by Andra Group and most retailers it works with when online shoppers makes a purchase, not when they click on an ad. That’s led Adlucent to analyze data so it can place ads when they are most likely to lead to a sale.
How does Adlucent know which searches indicate a customer is ready to buy? When someone searches for “television reviews” they’re at an early stage of the buying process and not likely to convert, Griffin says. If they search for a specific model number or brand, they’re close to buying. Searches that indicate the consumer is comparing prices also suggest someone is ready to buy. In general, Griffin says, the longer the search phrase the more likely someone is getting close to making a purchase.
There are other factors to consider, such as whether the product is favorably reviewed on the retailer’s site. For one retailer Adlucent works with, products that have at least a three-star average review convert at twice the rate of other products, Griffin says.
Seasonality is also a big factor for some products. For instance, the conversion rate on DVDs doubles during the holiday season and increases four times for video games, but those rates drop off sharply in January. Knowing that, Adlucent is likely to bid more heavily on those terms during the holidays, and cut back in January. “You have to understand season trends on a category or sub-category basis,” Griffin says. Adlucent started about a decade ago with a specialty on search campaigns in the consumer electronics field, Griffin says, and now manages campaigns in 24 product categories, mainly for online retailers with many SKUs.
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