Retailers are spending more money advertising with Google in hopes that the clicks they pay for lead to sales. And Google has been busy lately making changes to its advertising platform that can impact help retailers accomplish just that.
Katie Evans , Managing Editor, International Research
Thanks in large part to Google’s Enhanced Campaigns, apparel and outdoor gear retailer Dungarees.net experienced a 97% surge in mobile sales from the day after Thanksgiving, Black Friday, to Monday, Dec. 2, 2013, over the comparable period in 2012, says e-commerce manager Darren Baldwin.
Enhanced Campaigns, which Google launched last February, let retailers manage in a single AdWords campaign ads across desktop computers and smartphones, while also factoring in such variables as time of day and location. Before this new ad option, Baldwin had to set up and manage separate smartphone and desktop AdWords campaigns. That usually resulted in Baldwin neglecting mobile campaigns since they didn't bring in as much traffic as desktop ads. Now he manages both in the same AdWords campaign. When he creates an ad he wants to display on a smartphone he clicks a "mobile" checkbox in AdWords, enters a separate smartphone bid amount and fills in mobile-specific ad copy. For example, in most mobile ads he includes "Shop our mobile site" or "Buy from your phone" and uses m.dungarees.net as the display URL to let the shopper know he will be directed to a mobile-optimized site.
Because mobile shoppers convert at about one-third the rate of desktop shoppers, Baldwin starts his mobile bidding at about half the rate he bids for desktop ads. Then, if he sees shoppers buying after clicking on a mobile ad, he gradually increases his bid. He also cuts back bidding on high-priced items that rarely convert on smartphones, he says.
Since Dungarees.net began coordinating mobile ads within Google's Enhanced Campaigns, its mobile traffic and conversion rates have more than tripled.
“We made many enhancements to the mobile site over the year to help improve conversion rate, plus Google’s new Enhanced Campaigns allow us to have much better keyword coverage on mobile devices to drive a lot more traffic from mobile search,” he says. “We expect this trend to continue as technology improves and our customers get more and more comfortable shopping from their phones.”
As a whole, retailers like Dungarees.net are spending more money on paid search, an analysis of data from Top500Guide.com shows.
317 retailers, or 63% of those ranked in the Top 500 Guide, increased their paid search spending in 2012. Around 30%, or 148 retailers, decreased their spend. Nine retailers kept it steady and data was unavailable for the remainder of the Top 500.
Collectively, the 500 largest online merchants in North America spent $93.1 million per month on paid search ads in 2012, up 24.5% from $74.8 million in the previous year. The median monthly paid search spend was $80,000 in 2012, up 48.1% from $54,000 in 2011.
Dungarees.net spent an average of $30,100 per month on paid search in 2012, according to Top500Guide.com, which relies on data supplied by search engine marketing firm ROI Revolution Inc.
In addition to Enhanced Campaigns, Top 500 online merchants are investing in Google’s Product Listing Ads, commonly called PLAs, which the company rolled out in late 2012 to replace free product listings that appeared in natural search results.
Power Equipment Direct Inc., which operates 13 niche e-commerce sites that sell items such as water pumps and snow blowers, uses PLAs to better target shoppers in the market to buy his company’s products. Part of ensuring strong ROI is not bidding on terms unrelated to what the e-retailer sells, by indicating those terms in the “negative keyword” section of the bid page. For example, Power Equipment Direct doesn’t bid on "equipment parts," "manuals" and "used snow blowers" because it doesn't sell those items, says Jon Hock, president of Power Equipment Direct. Hoch has one employee dedicated to managing PLA campaigns who is tasked with ensuring that the retailer won't pay for a click that won't lead to a sale by maintaining the list of negative keywords.
PLAs allow Power Equipment Direct to indicate the keywords it does not want to advertise against to save money. Hoch says he also bids only on items he has a wide assortment of, such as air compressors, and not items he has few of, such as paint sprayers. "We bid more on our better-selling products with deep inventory," Hoch says. "We have more than 100 types of air compressors, and we show the best-selling ones in our Product Listing Ads." Power Equipment Direct gets about 40% of its traffic from paid search, including conventional text ads and PLAs. According to Top500Guide.com, the merchant spent $16,000 per month on paid search in 2012.
Google’s PLA ad unit gained traction quickly in 2013, according to digital marketing technology firm IgnitionOne Inc. The firm says the click-through rate for PLAs during the year was about 47% higher than the click-through rate for text-based pay-per-click ads on Google. It says the click-through rate for PLAs during the year averaged 2.8%, while the pay-per-click average was 1.9%.