14x Profit; that’s what Exclusive Concepts achieves for its clients when compared to non-clients. In this 60 minute presentation, you’ll learn the flux approach, the defining difference-maker for online retail PPC. We hope you enjoy the presentation – and please write to firstname.lastname@example.org if you would like to have us do an audit for your online retail store. We audit for your Adwords Account, including Google Shopping (PLA).
Video Version of Webinar
Text Version of Webinar
Hi, Folks. Thanks for joining us for the on-demand version of PPC Power Moves: Game-Changing Secrets for Online Retailers. We originally aired this webinar on May 7, 2014. We really hope you enjoy the on-demand version.
Before we get too deep into the presentation, I want to just share some feedback that we received from attendees. “This is a great webinar. Is there a recording so I could let it sink in a bit more?” Now we have your recording and glad you learned a lot. Fifty percent of the active attendees asked for a free audit after the presentation. It’s something that is highlighted throughout this presentation, so if you are interested in a free audit, please just write to us at email@example.com and let us know.
I’m your presenter. My name is Nik Rajpal. I’m the VP of Client Services here at Exclusive Concepts. You can reach me at firstname.lastname@example.org or on Twitter @nik_rajpal. I’ve been a speaker at many different conferences, Yahoo! Summit, SEMPO, HostingCon, webinars with Google, Conversion Conference, and I’m an expert in eCommerce Strategy, Organic Search, Paid Search, Conversion Optimization and Email Marketing.
I manage the team here at Exclusive Concepts. I helped develop all of our methodologies and build our technology.
Who are we? Very quickly, we are the leader in Do-It-For-You eCommerce Marketing Services. For marketing services for online retailers and our brand of marketing is Do-It-For-You, so you don’t need to babysit us. You don’t need to worry about anything. We will achieve better results without having to take any of your time.
By doing a good job for our clients, they have continued to stay on and help us grow. Thanks to the continued patronage of our clients, we’ve been on Inc. 5000 every single year since 2008.
We were established in ’97, and our team’s based right outside of Boston.
Our typical client earns over $1 million in annual online sales and spends over $10,000 a month in online marketing combined — Adwords, SEO conversion, whatever it may be.
Okay. Agenda. When we did this live, we had a QA session after we were finished with the webinar. That’s the only reason that I would suggest coming to the live webinars rather than watching these archives. If you have not had a chance to watch a live webinar, go to exclusiveconcepts.com/blog. Check out our webinar section. We always have new webinars coming up.
Today’s agenda is the Source of Our Findings. The framework that we’re going to introduce is to help you understand how to change your PPC outcome, the moves you’re going to need to employ to get there, and a quick summary.
The Source of Our Findings
Let’s talk about the Source of Our Findings. Back at the end of 2013, we did a webinar with Google, and we changed the way that we spoke about the webinar. We definitely sent out more webinar emails than ever before. We ended up having more signups to the webinar than we’d ever seen in the past, and it worked really well, and the team at Google that we did the presentation with was really proud of what we accomplished, and they sent over these awards to us to commemorate that event.
There was so much information and the information was so incredibly helpful that we built a technology and an audit to reflect all these new ideas.
Now, it’s been quite some time, and we’ve done nearly 200 audits. Now we’re ready to share our findings. On top of all that, we actually did a lot of research using current accounts, or accounts that we have access to that are not clients.
I do want everyone to know, especially if you worked with us in the past, there’s no sensitive information disclosed at all. Everything’s in the vault, but the findings are still going to be incredibly helpful.
What makes us credible? Why are you listening to us? We have the best results in the industry — and for results that matter — [we have] by far the best results.
Let’s talk about what results matter. A lot of agencies, every agency but ours, focuses on what’s called ROAS. Everyone’s heard that. Return on AdSpend. It’s the revenue generated from ad words minus adspend divided by adspend.
Now, that’s pretty dangerous, and we’re going to talk about why. The healthy thing to focus on is cash impact. It’s revenue multiplied by margins minus your adspend and your management fees, so how much money you actually keep in your pocket from your sales minus all the costs to get you there, because ultimately, that’s going to be how much cash you’ve made in a month.
Let’s talk about why ROAS is dangerous. Let’s look at these numbers: As an example, you make $25,000, $26 almost in revenue off of $10,000 in adspend. A ROAS calculation off of this would be incredibly positive. Any PPC person would say, “We’ve done a fantastic job: 157% ROAS, we’re in the green,” but anyone who understands accounting would then use margins … A typical margin is 30%. For everything we do in this presentation, we’re going to use a 30% margin and a 15% management fee. Easy numbers.
A 157% ROAS when using margins and management fees is actually negative $4,000 in cash impact, meaning these results resulted in the investor — the person advertising — losing $4,000 total in that month from this channel.
We did this poll when we had the live webinar, asking people to try to compute. “What is break even at 30% if your management fees are 15%?” The second most popular answer was Number Four, and that is the answer.
You can see this, that if you make $38,300 in revenue off of $10,000 adspend, a 283% ROAS, that is just good enough to make zero dollars in profit and zero dollars in loss.
We actually went ahead and we analyzed two separate groups, Group 1 and Group 2. [With] Group 1, for every $1,000 of adspend, Group 1 is making $4,000 in revenue. Group 2 is making $6,266. When you apply a 30% margin, it’s $1,200 versus nearly $1,900.
The costs are the same: $1,000 adspend plus 15% management fee, but the profit is so vastly different. Group 1 makes $52 in profit off of $1,000 investment. Group 2 makes $730 profit off its $1,000 investment. That’s after getting back that $1,000, of course. That’s how you come to that profit number.
Let’s say you took this profit and you stacked it up like gold coins. Group 1 would make this many gold coins off its $1,000 investment while Group 2 would make that many gold coins.
Now, one of these groups is in non-clients versus clients. We analyzed over 70 non-client accounts versus over 200 client accounts to do this research. Our clients are making 14 times more profit than non-clients, 1300% more profit. You can’t get close to that with any other agency. The way we accomplish this is what we call the Flux Approach.
Framework: The Flux Approach
The Flux Approach is the solution to the Number One problem in PPC today or, rather, the Number One thing that people are doing wrong in PPC today. They’re plateauing. They’re allowing themselves to plateau.
A plateau is pretty much a period of activity or progress and then, all of a sudden, you end up in an area where there’s little or no change. It comes from 1-Trick Ponies. [It comes from doing the same thing over and over again and no longer having any moves left.]
There’s two different buckets of how people approach PPC. One is cutting. This is for efficiency gains. You build all these campaigns. You measure from the campaigns which ones are doing poorly, and you cut them out. All of a sudden, you have an efficiency boost and [to get your] next efficiency boost, you see what’s left that is now performing as well as some of the other areas, and you cut those out. You just have your best-performing areas left.
When you see on a graph what this looks like, cost goes down, then it plateaus. Efficiency goes up, then it plateaus. Revenue goes up, then it plateaus.
The other option is, people who say, “We can help you grow, get more business, blah, blah, blah.” It’s all about growth, unchecked growth where you keep adding new campaigns or new sections, new tactics, but you never go back to check whether or not those tactics are actually effective.
We see this all the time, and in this case, yes. That can help you grow. Your cost keeps growing. Your efficiencies over time go down because you’re absorbing this inefficiency into your overall strategy. Your revenue, it increases, but nearly at the same rate as your cost.
The solution is the Flux Approach. It is building and then evaluating what you’ve just built while you’re building more and then build more and evaluate what you’ve built. Cut out areas of inefficiency, double down on areas of efficiency, and keep building.
What the Flux Approach looks like when you actually see the graph, it is cost and efficiency. Cost and efficiency going in this flux. First you built the cost, then the efficiency, then the cost, then the efficiency. When you do that, your revenue keeps growing, and it grows well above your costs.
This is from the actual data of one of our clients that we’ve managed for about a decade now on the PPC side. This is one of the more recent fluxes. It’s several months’ worth of flux, where you see we increase cost to try out new things and, as a result, some of that cost was attributed to new revenue growth.
Now, it wasn’t all of the cost going toward the revenue growth. Some of those areas were still not performing well. After building enough data and evaluating, we were able to cut out the areas of cost that were not going well and after a brief dip, you can see that we brought cost back down to its original amount while revenue continued to maintain itself at a peak. You create a much larger gap between cost and revenue in the end versus this short cap here. That’s a flux.
By doing this over and over again for the last 10 years for this client, in 2013 alone, we reduced cost by 1%, increased revenue by 105%.
To be able to flux, you have to be able to do two things very well: You have to be able to build, and you have to be able to trim. You have to have a great tool set for both building and trimming, and you have to go back and forth in flux.
Let’s talk about building ideas first. We’re going to start with some 101s, some basic stuff. PCP Infrastructure, Building Techniques, Top Position Techniques, Triangular Remarketing, PLA Infrastructural Excellence. Start off with some 101s, and then we’re going to go into … These last three are going to be pretty new stuff. You probably never heard of half of these.
PPC Infrastructure is quite simple in online retail. Your Site Structure is home to Category. Category to Subcategory, Subcategory to Products. When you’re creating your campaigns and your structure and your PPC account, you want to make sure you mimic that to a certain degree.
Campaigns are encompassing your home for your brand and categories. Within those categories, when you’re in campaigns, you have ad groups for your subcategories and even some of the more popular products can have their own ad groups.
By building up this way, you get to easily see aggregate data at the category level because it’s a campaign. You can write ad copy for specific subcategories and products only because they’re the ad groups. Then your negatives, dimensions, settings, they can all be optimized at different levels.
We definitely recommend trying this out. You’ll find that you have so much more information to be able to work off of, and it will lead you towards the right type of trimming activities in the future.
Now, onto building technique. A lot of this is done naturally, but we have some advice here for you. Over the years while managing PPC, we’ve seen that some best practices should be followed, and some of these ideas should be new best practices.
When you’re creating ads, make sure you create at least two ads per ad group. Make sure you rotate indefinitely. Don’t do the optimization of ads, because Google doesn’t wait long enough.
When we did our research — by the way, we’re going to share that research in a little bit — only 25% of online retailers did very well in mobile or were actually profitable in mobile, so only 25% of you should be doing mobile, and if you are doing mobile, you should have at least two mobile ads and you should check the mobile optimizations for those ads.
In terms of language, don’t just target English. Target Spanish for all languages, even though your ad is in English, because there’s a huge bilingual, multi-lingual community in the U.S. that changes their browser settings to something non-English, even though they speak English. Now you can show up for them versus suppressing your ads from that demographic.
In terms of delivery method, you set a budget and you’re giving Google two different options in terms of how often they should show your ads based on how much activity there is, how many impressions there are.
If you do accelerated, that is going to allow your ad to show up as often as demand allows. If you use standard, it will stretch out your budget over a period of time. It’s almost like you’re going to be really holding back in terms of your visibility. We definitely recommend accelerated for most accounts. Standard if the budget is really tight, but don’t expect as good a performance.
Now, let’s talk about something that’s a little less intuitive. Top Position Techniques. You want to target the Top Position and with very good reason. Let’s talk about what’s going on there.
Now, Google has switched hands at this point. CEO, Eric Schmidt stepped down on April 4th, 2011, and handed back the CEO title to Larry Page, one of the two founders of Google, and part of what caused this handoff is that Eric Schmidt was able to grow the ad section of Google significantly for years but was unable to do much more than plateau come 2009.
Since 2010, 2011, 2012, through the efforts of Larry Page, we’ve seen much more consistent growth for their ad side of Google. One of the main things that Larry Page did to create that scenario was change the user experience in Google itself, when you’re searching through Google, and the usability changes have made a huge difference, so to introduce how this works, for those of you who have not done extensive usability or have not been trained extensively on usability, let’s do a quick usability 101.
To make smart usability changes, first you have to make sure that every element on the page has clear separation. Visually, you can see a space in between each element. You then have to choose what you want people to see first, second, and third on the page. What parts of the page are going to get the most emphasis? You create that type of emphasis or prominence, as we call it, through the size of the elements, the font, the background color and images. You can see how these different elements now stand out.
Let’s take that information, that new knowledge, and apply it to changes in the SERPs, the search engine results pages. For February 2010 to June 2010, you can see a few changes already. Keep an eye on this first position here. See what’s happening there.
First, they added a thin, new left column. Part of this was to bring the results right below the search but also to add more functionality. The background color for the results bar was removed. A wider column buffer to create more separation of elements was introduced and by September 2011, you saw a lot of changes happen.
Now, that background color that used to be part of the results side is now behind the search side, so it becomes the first thing you use. Your focus on the actual functionality of this page starts with search.
There’s a stronger visual emphasis on the ads, especially ad Number One with extended headlines. The buffer in between the two right-side columns is no longer clunky and too close. It is a much cleaner buffer.
Reseller Ratings are introduced, one of the first extensions, to make sure that there’s no cluster over there that grabs too much attention. The left side is separated out. Much cleaner.
August 2012, we saw some huge changes in visual prominence. First of all, ad extensions were introduced everywhere, and the first ad, Top Position, starts getting a lot more momentum. The left column was moved to the top. A dual menu, mimicking what was up there, is set up here so that Google could do some testing and see which one people prefer. Obviously, the most prominent change was PLA results showing up in the SERPs themselves. Product Listing Ads, PLAs.
By 2013, the major changes that happened made it much more effective for the Top Position to make money. Their left padding was reintroduced because it did help to have the top result come right under the search bar, and that was removed here when they got rid of the left nav, so there’s new padding aligned with the search itself.
The top menu was dropped because it was far too prominent with its contrast, and now you see this huge difference from 2010 until 2013, with such an emphasis on making the Top Position as profitable as possible.
Here are the numbers: The result of all these changes is that the Top Position now makes a lot more money than any other position
Now, let’s recap. It has the highest prominence. It’s right under the search bar. It has the highest click-through rate. It has what we call Top Spot Prerogative. It has more than double the real estate including listings that have an indent and two rows. People trust Google, so when you are at the top, that trust is naturally lent to your site, and you’ll have a much higher conversion rate.
We did a comparison by device, and you can see, it doesn’t matter what device people are using, the Top Position is still by far the most profitable position. At any point, you can pause and take a closer look at these graphs.
We did a comparison again, Non-Clients versus our Clients of 70 plus Non-Clients, 200-plus Clients to see profitability by position. Profit per dollar spent on positions One, Two, Three and Four. Even Non-Clients make a profit in Position One. It is by far the most profitable, but across the board, there’s a lot of loss in positions two, three, and four.
We’ve been able to spend a lot more on Position One and make Position One more effective for our clients. We’re also able to make Positions Two and Three less of a loss across the board.
All right. This is the first time I’m going to introduce the audit here. Please keep in mind, this is exclusiveconcepts.com. The name is down there. Sorry. If you ask us to do an audit for your store, we will actually break out all of your AdSpend across positions and see which positions of yours you are actually targeting and how much profit are you making for those positions.
It’s very informative. You might find right away that there’s a great way for you to change your profitability just by looking at this chart.
How do you take the top spot? It’s so lucrative. How do you get there? Is there a science for it? Yeah, there is. It’s actually quite simple and not enough people utilize it.
You have an ad rank for your ad, which is your bid multiplied by your quality score, and if you have the highest ad rank as a result of your bid and quality score, then you take the Top Position. Your bid is made up of the main bid that you set for your ad, and then you might have multipliers.
For example, you may have a multiplier for noon. Let’s just do time of day. Noon to 1’o’clock. And you might even have a day of the week: Monday. And for both of those cases, you may have set your multiplier to be higher by 50%. Then during that time period, your bid is actually going to go up, because you used multipliers that were set within your dimensions.
Now, quality score comes down to previous click-through rate, on-page relevance, click-through rate of other ads, page load time, and listings. Now, previous click-through rate is important to note because any time you create a new ad, the reason that you typically have to pay more when you create an ad — versus your quality score — because, until Google has enough data on your ad, it just has to work off the click-through rate of other ads and, as you build up click-through rate history, then you get to use that for your own quality score.
On page relevance, if you do SEO — long-tail SEO for your product pages and your category pages — you can see your quality score dramatically go up, which reduces the need for high bids to get the top position. Your page load time has some impact on your quality score, but very relevant listings make a huge difference.
If we do the audit for you by writing to us at email@example.com, requesting the Google audit, we’ll check how your listings are set up.
Now, building also requires utilizing the breadth of Google’s platform. And remarketing, especially for online retail, is critical to grow your account and make sure you’re capturing as many sales from people who came to your site, those who bought the first time, and those who didn’t buy on the first visit.
Remarketing is introduced in three different ways today. First is the most basic remarketing. People visit your website. They’re added to a marketing list, so you set parameters like people saw a visitor came to this category, added a product to the cart but did not buy. Those are all different parameters, but that could be one audience. You can set a multitude, an infinite number of audiences based on different parameters, and you can study them to see which audiences actually are the best predictors of a person’s readiness to buy from you in the future.
Then you can set one of your audiences to show an ad to someone who’s in that audience. They’ve been to your site. They fit the parameters. They’re part of that audience. Now they go on weather.com and they’re going to see your ad. They may have thought that you were a small business, too small for them, too unknown. All of a sudden, they’ve been to your site. They liked what they saw, and now they see your ad everywhere, and now they’re convinced you’re actually trustworthy, so they may buy from you.
The problem is, Google introduced that years ago, and it didn’t make that much of an impact, so they created two new forms of remarketing that had a much better shot of making you money. The first is Dynamic Remarketing.
Now, if you know someone looked at a product on your site and you want to target them in the display network, based on the product they looked at and based on the information in your Google merchant center account … That’s the foundation of your Google Shopping account … They will actually show products, prices, images, targeting that person based on what they were looking at on your site.
Now, instead of trying to convince them that your brand, store is the most amazing store to shop at, you just keep them focused on the product they were looking at. They have interest in this product. Let them close themselves.
Now, the third form of Remarketing is called RLSA, Remarketing Lists for Search Ads. Just like we were creating Remarketing lists for Dynamic Ads and for Traditional Remarketing, here these remarketing lists are being used in Google’s search, so if someone types in something into Google and they happen to be part of an audience by being a past visitor to your site, you can now target them at the moment that they type in something that’s relevant to you.
You can actually target bigger key words than you usually do to past customers, more generic keywords, and you’re actually going to get a lower cost for it because of your quality score.
You can get very creative with ad copy messages. “Hey, we still have your product saved in our cart. Come back now, and we’ll give you 5% off.” You know what their behavior was, so you can speak to that. You also know what they’re looking for right now, so you can get creative with that.
What we ask you to think about the most is audience quality. By setting up many different audiences in Google based on very different parameters, you’re trying to find the difference between past visitors that are 1% ready to buy from you and past visitors that are 80% ready to buy from you. By changing and tweaking your parameters, you can get closer to understanding that over time.
Now, we say that everyone should use these different Remarketing platforms in a coordinated way. When someone buys from you, you do the basic branded Remarketing. Further your word of mouth. Get repeat purchases. They’ve already closed their sale. They already know your brand a little bit because they just bought from you. Make that brand awareness as big as possible, but until they finish their sale, keep them focused on the product that they were interested in through Dynamic Remarketing. When they finish that sale, put them into Branded Remarketing.
No matter what, the entire time, try to use RLSA to bring down your costs and get more targeted to close as many visitors as possible.
Now, if you write to firstname.lastname@example.org, like 50% of the people who were engaged in the live webinar did, then we will go ahead and make sure your Remarketing looks good, and we’ll have a conversation around it as well: Remarketing, Dynamic Remarketing or RLSA.
Now, let’s talk a little bit about Google Shopping because that is part of how you build these days. The basics of Google Shopping or PLA, Product Listing Ads, all the same, is you have your ecommerce platform that showcases your products and you have a feed that takes all the product-centered information from your platform and is organized in a way so that Google’s Merchant Center can understand the data on your products. That is something that you need to do with the feed provider, getting that set up properly.
Then, when Merchant Center’s happy with your feed, you use AdWords to use that data and start targeting people, start getting your products to show.
Why is PLA so important? Product Listing Ads. We analyzed over 200 accounts, and we saw where the breakdown of spend and profit is right now; 64% of spend goes towards text ads. Exactly one-half of that goes towards PLAs. Then, display ads are 2.4% and dynamic search ads are exactly one-half of that, oddly enough.
Now, text ads make, on average, 34 cents profit per dollar spent, but the same clients are making 84 cents of profit per dollar through PLA. Now, while text ads have a lion’s share of spend and they are profitable and it’s a necessity to invest in them, it is actually important to note that, even though there’s half the traffic or half the spend, product-listing ads make 25% more overall profit, the overall number, not these comparisons. Even with half the spend, it is 25% more profit.
If you’re going to choose one of the two for starters, you choose Product Listing Ads. It’s going to create a liquidity scenario much faster, a profitable scenario much faster, but to really be going out there and taking advantage of your full opportunity, you have to be using text ads as well.
With PLA, our clients have phenomenal results. I showed you the results, but you don’t always get those results. The biggest issue today in PLA or biggest mistake is people creating too few ads for their entire inventory, and it makes a lot of sense.
You have thousands of products, potentially. The information points vary when it comes to these different products. You have price, product type, brand, those are all different, and your products even perform differently. Popularity is different. Conversion rate, margins.
They’re all different, and you actually have a lot of that information already in your feed, and you can even access it because it’s in your feed.
You create campaigns using that information, all the way down to the ID level, so why wouldn’t you do that?
We suggest taking a simple path. We call it the Super Campaign. Simple but effective. You take your entire breadth of inventory that breaks down like this, for example. This is a site that sells men’s and women’s shirts and pants.
To create a Super Campaign, you go small enough that you can be relevant with your changes, [but] large enough so that you can get good aggregate information. Men’s Shirts, for example. Men’s Shirts becomes your campaign, and by breaking out men’s shirts and then by margin, and then by best sellers versus normal, every part, every end of this lineage is its own product group or ad group. Men’s shirts, margin, 20%-40%, Best Sellers. That’s one product group.
You set your bids at that level. This is what it actually looks like in ad words. You set your bids down to what has been expanded on, and you’ve excluded everything else.
The reason you do it this way is because it allows you do to more. You can bid according to profitability, especially if you know your margins. You can track performance to a segment like this segment. You would know exactly what the performance is, or you can expand it and track performance to an ID. You can break any subgroup into its ID levels for bidding. You could add “Sensible negative key words,” so this is Men’s Shirts. If you don’t sell Men’s T-shirts or Men’s Cowboy Shirts, those are sensible negatives.
You can exclude unprofitable sub groups, so any one of these groups, let’s say the lower margin, non-best sellers, you could exclude that entire section. Or if you know that some of the products in there are not doing well, just exclude the unprofitable IDs within that sub group.
You can create a compelling ad and actually create some promo text for a particular campaign like this, so it can be around men’s shirts instead of a global one that is about every one of your products.
You can change your location and language settings, just for this campaign, and you can use your Dimensions tab to set different parameters around day, week, or title of day to use multipliers, to essentially increase or decrease bids based on what you know about the shopping habits of your customer.
Now, it is a lot of work, but what matters are results. In the end, people that are not doing our approach make on average $48 profit for every $1,000 that they spend. If the weather changes one day, they will lose money. It is so quick. They’re so close to break-even.
Our clients, on the other hand, after all the costs: advertising costs, management fees, are making $1,157 in profit, 23 times more profit, 2,200% more profit.
Now, that’s probably enough information for you to want to work with us, but what we’re asking instead is for you to let us do an audit of your account. Sales@exclusiveconcepts.com. Let us audit what you have going on right now. We’re adding an audit to Google Shopping.
That’s all built. We still have to trim. What are we going to learn for trimming? Add Copy Power Analysis. This is a unique technology that no one else has. It’s really interesting stuff. Same with Device Profitability Optimization. Something that we proprietarily do for our clients, and 3-Bucket Cost Efficiency Optimization. These are all proprietary trimming techniques.
Ad Copy Power Analysis is a lot of fun. When we’re doing the audits, people often ask us to stop there and play around with this as much as possible. Why? Because we just drop in a keyword like “shipping,” and then we can see all the ads that mention shipping versus the ads that don’t mention shipping and look at the behavioral difference between them. For this prospect, they had been spending 50% on ads that mention shipping versus 50% that did not, but they only made profit on the part that mentioned shipping.
Click-through rate was much higher. Conversion was higher, and the costs were significantly lower. Keep in mind, what you put in your ad can influence your cost per click.
When you’re thinking about creating your ads, you’re probably following [suggested] best practices. You read somewhere that the best things to mention are shipping, fast shipping, free shipping, sale, discount, quality, guarantee, same-day, lowest price, or selection. Combine these best practices into your ads.
We went ahead and created a poll. We had analyzed over 200 accounts. And on the webinar, we asked [about] every one of these five phrases, only one of them was more likely to increase cash impact. All the other ones are actually more likely to decrease your profitability. Which one was the real winner here?
The result is same-day. Now, in the poll, 31% of people thought it was “fast shipping,” 28% thought it was “guarantee,” 23%, “lowest price,” 10%, “discount,” and the lowest number of people guessed it was “same-day,” but “same-day” is actually the only one out of all these five that actually has the highest likelihood of increasing your profitability.
Now, if you look at the more popular ones, these were the keywords that showed up most popularly in ads. “Shipping, free shipping, sale, selection, quality.” Across the board, each of them has a greater likelihood of not being a good thing for you versus being a good thing. Very counterintuitive. You might be in that group. It seems like most people are likely part of the group where they should not be mentioning these things. What’s important to note is you might be in this group. If you just followed best practices, you might be in this group, and you choose not to mention selection, you’ll actually have worse performance.
Let us do the ad copy analysis with you to determine whether or not you’re part of these groups. Once again email@example.com. Request Google Audit for your online store. We’ll get back to you guys really shortly and set up a meeting. It’s a two-hour presentation. It’s phenomenal.
Now, Device Profitability Optimization, is also something you can’t do in any technology except for ours. It’s about identifying which devices are making money. If someone interacts with a mobile ad, does that make you money or lose money? In this case, you can see significant spend toward mobile, $41,000 towards computers, $7,000 towards tablets, $20,000 towards mobile devices, where this prospect was losing way too much money.
Now, we did our full analysis of 200-plus accounts and actually, 75% of accounts lose money with mobile. If you just want to play the odds here, we would say, “Use a Mobile Multiplier to suppress your spend towards mobile,” because it’s three times more likely that you’re part of that group than not part of that group, but when we do the analysis for you, we’ll be able to see that for sure.
Now, in some cases, computers versus tablets had totally different performance. What we did was, we looked at a set of online retailers where computer, PC, was making a lot of money but not as much money on tablet, not even close, and they included businesses that target businesses, mostly. Office Equipment, Manufacturing, Office Decor, Mechanic-Targeted, Restaurant Supplies, and the only one that was consumer-oriented was Musician-Targeted, mostly because musicians are always on their high-tech computers to do their production.
If you’re targeting people based on something that they’re going to use on their person or within their home, Clothing, Personal Audio, Home Decor, Sports/Activities, Jewelry, Pet Supplies, Hobbies, tablet destroys in terms of performance. In all these categories, computers did not perform very well at all. The tablets performed amazingly.
Good things to know. We are working with Google to try to push them to allow us to separate spend towards tablets versus spend towards computers so that businesses that fall into these categories can optimize toward best results.
Okay. The third part of trimming is called the 3-Bucket Cost Efficiency Optimization. It’s Understanding Your Account’s Economy. Let’s build out this analogy a little bit. Look at the economy.
This is the U.S. economy. In 2013, the U.S. economy had fantastic growth: 2.8%. Great, but 2.8% is positive, so how do you account for all the loss? This is a graph of different activities that, when added together, actually adds up to 2.8% and you see that there are activities that have huge loss. Some have huge gain. Most of them are break-even.
We say these are actually three different buckets of activities. Pure loss. In the economy, those that are unemployed, companies that are failing, those are all pure loss. The vast majority of activity on U.S. soil is sluggish. People are trying to keep up with last year’s performance or people are trying to keep their jobs. No expectation of a raise. This is all 0% growth.
How, with all that pure loss and all that 0% growth, can we still grow 2.8%? It’s because a small set of businesses get it right. They pull together a million dollars. They make $50 billion out of it. These are the few and far apart hot beds of efficiency that carry all the sluggish and all the pure loss into a growth number of 2.8%.
Now, if you took a magnifying lens to your account, you’d see the same thing happening. You have ads that have accrued a lot of traffic and a lot of data, but they’re not making you money. They’re pure loss. They’re weighing down your performance. You will have a lot of ads that are having very little activity, and you don’t have enough information to even determine whether or not it’s good or bad.
Usually, they average around break even, ironically. You’ll also have these hot beds of high efficiency. Ads that have accrued 200 clicks, making at least $1 profit for every dollar spent. If you don’t find those areas, then you can’t double down on those areas. If you can’t find your pure loss, you can’t cut that out.
Now, when you write to firstname.lastname@example.org and you ask for your Google Audit, we’re actually going to run this analysis on every single ad in your account and determine which ads are pure loss, high efficiency or sluggish, and we’re going to map the information to each of those ads, so that if you ever chose to come on board with us as a client, we could immediately go ahead and turn off the pure loss, then double down on the areas of high efficiency.
Now, this is an analysis, not of our clients, but of clients that we’re talking to right now. We’re doing audits for them. They haven’t decided whether or not they’re going to come on yet, and here is where we saw, in terms of averages. On average, there’s $8,000 spent per prospect per account that is going toward an area of pure loss. $8,000 making only $20,000 in revenue. Therefore, at a 30% margin, is losing $3,000. In that month, $8,000 came out of the pocket just to lose $3,000.
Now, also on average, there is about $1,000 going towards high efficiency, generating $14,000 in revenue, so after 30% margin, is $2,800 in profit.
The vast majority is going toward sluggish, $12,600 making $50,000 in revenue, which is not breaking even but a little bit higher.
Now, when you add these 3 buckets together, what happens? You spend $21,000 to make $84,000 in revenue but because pure loss was such a big negative, even though these were successful, in the end, these accounts make on average $300 in profits. If they simply got rid of the pure loss, they would have spent a lot less money, almost 50% less, to make 10 times the profit. It’s an amazing thing.
As a summary, we want you to know if you do actually want to skip the audit, you don’t want an agreement from us, you don’t want to be part of the success that we’re creating for our clients and online retailers and get out of this huge loss that other people are experiencing, Profitable PPC is for the traditional text ads, a display network. It’s $1,500 setup, $895 a month or 15% of PPC adspend, whichever is greater.
For Google Shopping, it’s only $495 setup, $595 a month management fee plus 12% of what you spend in PLA. Both of them are pretty much the lowest cost in the marketplace with 14 times the profitability across the board, 23 times the profitability for Google Shopping alone.
Let’s do our recap. If you’re currently managing your account using ROAS, not a smart thing to do. You want to switch to Cash Impact if you can.
By doing so, by applying our Flux Approach, our clients make 14 times the profit.
The Flux Approach itself is built on evaluting what you built while you’re building more. So always be growing, but always be creating efficiency at the same time.
To do that, you need to understand the most advanced ways to build and the most advanced ways to trim.
On the build side, what everyone can do is proper PPC infrastructure and building techniques. What not enough people are doing are Top Position Techniques, Triangular Remarketing, or optimizing for PLA Infrastructural Excellence.
On the trimming side, what no one else can do except for us is Ad Copy Power Analysis, Device Profitability Optimization, and 3-Bucket Cost Efficiency Optimization.
If you choose to do an audit, I will actually be the one that is doing the audit for you, so just write to email@example.com. Ask for the audit, and we’ll set up a time to do that.
If you were part of the live presentation, we would do QA right now. I hope you enjoyed the on-demand version. We have so many other webinars on demand.
Exclusiveconcepts.com/blog. Go to our webinar section. Check out our on-demand videos. I think you’ll really enjoy them and hopefully, you’ll write to us asking for an audit. Can’t wait to look in your account and see what’s going on. Thanks, folks.
This has been Nik Rajpal, VP of Client Services at Exclusive Concepts. Really appreciate your time.