How can retailers make the most of their paid search budget?

In a competitive environment, your paid search strategy is key in driving results for your brand. According to Merkle Q4 2019 report, the market is becoming more competitive, as Google Search ad spend, clicks and cost per clicks (CPCs) grew by 16%, 11% and 4% respectively year-over-year (YoY).

If you’ve experienced competitive key trading retail periods such as Black Friday, or increased competition on key terms for other businesses, you’ve most likely seen your return decrease on every £1 of your marketing budget spent. How can you counteract this trend of higher CPCs around these peak retail periods to make the most of your marketing budget? In this blog, we are going to explore a number of solutions.

Know & monitor your competitors

If you are a retailer or a brand, you are probably facing competition with other brands, or even resellers, that are working with you. This is the first step in identifying competitor advertisers that might drive your CPCs up. In Google Ads, you can easily start reviewing competitors entering the auction and how aggressive they are by monitoring key metrics such as impression share and overlap rate; start by listing them and tracking these metrics on a weekly basis. This is especially important if you rely on branded queries that drive a lot of traffic to your website. 

During key trading periods such as Black Friday and other sales, monitor your CPCs closely for several days prior to the launch date to spot any trends, and to react quickly to rising CPCs. 

It’s also important to review your click share to understand what share of the market you are owning, and whether or not there is potential to grow this market share by improving the relevancy of your ads and matching the content of your website with user queries.

React to increasing CPCs

Communicate with your resellers

In the case of a manufacturer brand, you are probably working with a number of resellers that might eventually become direct competitors on the Search Engine Results Page (SERP). Most of the time, you will have a supplier agreement with these resellers in place, so it’s helpful to use that relationship to speak to them and avoid entering a bidding war that would impact both parties’ bottom lines. It might sound like a bold solution, but this will ensure that both you and your resellers make the most of the peak trading period without impacting your margins. 

Reduce your impression share (temporarily)

As you aim for a higher impression share and position on the SERP, your CPCs will grow exponentially. Moving to a lower impression share and reducing CPCs, temporarily, will result in important cost savings and keep your return on investment (ROI) and margins at a good level with minimum impact on the traffic to your site. Review this strategy on a regular basis and revert to your previous level of visibility when competitors start dropping out of the auction. 

This is a strategy that Croud often uses when applicable for the circumstances, and has seen great success in for our clients. In this specific example, by reducing impression share by 10-15% during a more competitive trading period, we were able to generate the same level of clicks YoY whilst reducing CPCs by 51%. With more transactions YoY, revenue grew by 42% YoY leading to return on ad spend (ROAS), jumping by 190%.

Use bid strategies

In order to control bids, you can look at automating bids. Depending on your goals, you have several options to control your CPCs, especially for brand activity.

If you are looking for full visibility and aiming to appear at the very top of the page, you can use impression share bidding to target the ‘absolute top of the page’. This solution is potentially risky in the event of a competitor entering the auction and increasing your CPCs. 

Additionally, you might want to look at using impression share bid strategies and target ‘top of the page’, which will ensure you appear above the fold in the top position. This ensures you remain visible, but you might appear below the first ad if a competitor bids more aggressively than you. For both solutions above, you can also experiment at different impression share levels to find the most effective option. 

Alternatively, if you are looking to control your CPC, you can use a target cost per acquisition (CPA) or ROAS bid strategy that will ensure your cost per transaction remains constant. This means that you are potentially always going to appear at the top of the results page, but will ensure that your CPA and CPCs remain constant. This is the favoured solution if you are in a very dynamic competitive environment where the landscape changes very quickly.

Explore other search engines

If you are looking at more opportunities and want to increase visibility, it’s worth exploring other engines such as Bing, Yahoo, and Yandex, which are more likely to be less competitive compared to Google. According to Merkle Digital report, spending on Microsoft search ads grew by 17% YoY in Q4 2019; their growth last year exceeded Google’s.

Review your device bid adjustments

Mobile spend is trending up with an increase YoY by 33% more than desktop, which grew YoY by 12% on Google. Targeting mobile and tablet devices can be an efficient way to drive increased traffic to your website at lower CPC compared to desktop.

Use a CSS partner for your shopping campaigns

If you are using shopping campaigns through Google Ads, you can take advantage of up to a 20% CPC discount at source by switching to a CSS, or Comparison Shopping Service, partner such as Croud.

Make the most of your remarketing list, similar audiences and customer match

Users that have visited the website have already engaged with your brand and are more likely to convert. In a competitive environment, it’s key to appear at the front of these users as they move further down the funnel. By applying bids to your remarketing list, you ensure that you capture these valuable users until they convert. 

From your remarketing lists, you can use similar audiences to target lookalike users of your website. In fact, similar audiences are becoming increasingly important to advertisers, as more of them are now using Google’s similar audiences to generate 11% of their Google search ad clicks – up from 5% the previous quarter according to Merkle Q4 digital report. 

Often overlooked, customer match lists are an excellent way to drive loyalty to your brand with them generating 5% of clicks in Q4. By re-engaging with your customers on the SERP, you will be able to drive your brand loyalty up and keep the most valuable customers engaged with your brand. This is particularly important for advertisers where repeat purchase is key to their business.

If you’re interested in boosting your e-commerce activity, please get in touch to see how Croud can help.


by Benoit Le Gendre
14 July 2020



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