Daily Archives: June 5, 2019

Tips To Maximize PPC profitability

In some cases, adjusting your bids might not be enough for your business. For these situations, you should consider decreasing your sales. This sounds counterintuitive, I know, but hear me out. By making each sale significantly more profitable, you need fewer sales to boost your overall profits and ROAS.

There are two main ways you can actually decrease sales whilst still raising overall profitability. Remember that turnover is vanity, but profit is sanity!

Raising product prices to increase profits

It may sound obvious to some advertisers and alarmingly risky to others, but actually increasing product prices can lead to higher profitability if done correctly.

An ecommerce client of ours was complaining about keeping up with the demand of their main product online, they were very busy manufacturing the product (luxury coats) and had to stop selling certain colors and sizes due to popularity. We raised prices of the coats by 70%, and the number of sales fell by just under 43%, a huge improvement to their bottom line overall.

Clearly, raising prices generates more profitability per sale, but when other costs are factored in you could actually triple the profitability with just a small overall price increase:

Raising prices has a negative effect on the number of sales overall giving a profit vs. price relationship as shown below:

Setting prices too high will stop any sale from happening, too low and you could spend more on advertising and other costs than actual revenue generated.

What we’re after in this case is the magical sweet spot of price profitability vs. conversion rate, i.e., the highest point on the CPC vs. profit curve.

Tweaking prices is, therefore, a great way of optimizing an individual product and you now see dynamic pricing across many limited-service industries such as flights, hotels, and taxi apps.

Raising average order values to increase profits

For some mass manufacturers, B2B product sellers or bulk drop-shippers, there’s a catch-22 situation when it comes to the Google or Bing Shopping platforms:

• You can openly sell products on your website. This enables shopping campaigns, but your product prices must be shown on the website, and you may get many smaller orders from the general public.
• You can sell products only to registered or approved website users. This blocks shopping campaigns from being available (prices must be public for shopping campaigns to exist), but your product prices are hidden, and you can set minimum costs for an entire order.

Our client wanted the best of both worlds. They wanted maximum traffic and exposure on Google and Bing Shopping, but at the same time, they wanted to discourage time-wasters with orders of only one or two products.

Here, product delivery overheads are very similar if a customer wants one item or as many as 20 items, thus making really small orders non-profitable.

The solution to this problem was to increase the average order value (AOV) by reducing bids on keywords, ad groups, and shopping product groups if they fell under a certain level:

Bid adjustments were not applied when the AOV was over a highly profitable threshold (£50 in this case), and they were applied in a negative linear fashion when under the value.

The minimum bid adjustment was set to -80% in order to keep ads within the first page of results more often and to not totally kill off any product bids.

The results from this were impressive in many ways for our client:

• The average number of deliveries decreased, lowering internal delivery costs
• Less administration work was needed, improving the quality and speed of admin tasks
• Total delivery times were shorter, leading to an increase in positive customer reviews
• Average order value increased, raising the average return on ad spend

Read more Good ways to improve PPC quality

How to increase your sales by Google Ads

One of the biggest challenges automotive marketers face is gaining the trust of their leads. After all, the job of a marketer is to help bring leads in the door so the sales team has people to sell to. But in such a competitive industry—one where the consumer is making a rather large financial decision that will affect their everyday life—automotive marketers do not have it made in the shade.

So how can automotive marketers deal with these challenges? By being smarter about their online advertising. 97% of people looking to purchase, repair, or customize a car start their journey online.

Let’s dive into nine key ways you can bring potential automotive customers in the door through compelling online advertising.

1. Build trust with customer reviews

I will never forget leasing my first car. I went for the reliable, affordable, and decent-looking (in my opinion) Honda Accord, but I was terrified at making this decision. I spent months doing research, calling local dealerships, considering whether leasing or buying a used car was the better route to go. At the end of day, I decided where to look in person by reading customer reviews on Yelp and Google.

The point of this anecdote is this: Reviews are perhaps the most critical component to getting leads in the door. As an automotive marketer you need to not only ensure you have GOOD reviews, but you need to go above and beyond to ensure these glowing reviews are everywhere they can possibly be. Yelp, Google, social networks, your own website—ensure you are covering all your bases! You can also take things a step further by creating customer success stories and videos with your most valued customers, and use these in various places, like paid social ads, your website, or your newsletter.

There is no better way to instill trust than to let your customers speak for you!

2. Be at the top of the Google SERP

As mentioned above, when I first started searching for my new car where did I turn to? Google, of course! I am not alone in this. According to a study from Kenshoo, 70% of consumers researching cars turn to search engines first.

Since Google is the first line of defense you need to be at the very top! Especially considering how often people scroll to the bottom of the SERP (HINT: it is not often). The first few listings always get the most clicks, so ensuring you in the top positions is critical. To do this your Google Ads strategy need to be extremely effective. So how can you get to the top of the page without completely breaking the bank? There are certain strategies that Google tends to favor, and will help you get in higher positions without spending more. Follow these tips to get started:

• Ensure your Google Ads account is structured properly with tight-knit ad groups (aim to have 15-20 keywords per ad group).
• Keep keywords tightly related to your ad text, and include 2-3 ads per ad group/keyword list.
• Use ad extensions! Google loves them, and they will help you get more ad real estate and chances of lead interaction.
• Add negative keywords to block out irrelevant searches (and keep a close eye on your search query report).
• Allocate your budget properly between campaigns. What are your highest sellers? What is your target audience most likely to search for? Bid higher on these items to capitalize on what is popular among your audience

It’s also important not to forget about other search networks, like Bing.

While Bing might seem like the neglected cousin of Google, they do account for a section of the search market that typically attracts older folks—people who are probably more financially established and able to invest in expensive cars.

3. Bid on competitor keywords

While we’re talking about search engine marketing, it’s important to not only be bidding on the obvious keywords like “new Honda Accord.” You should also set up a campaign to tackle your competition.

It is a fierce and competitive world in automotive marketing, so being able to show up every time your competition does with compelling ad copy is key. While I would not recommend saying anything negative or using your competitor’s name in your ad copy (which Google could put you in time out for), you should bid on your top competitors brand names, and create highly persuasive ads to get leads to visit your website over your competition.

I love this ad from Toyota for instance:

While I can’t see if they’re bidding on competitor keywords or not, I love how they are appealing directly to a specific demographic, and adding value for that individual right in the headline of their ad.

4. Actively manage your negative keyword list

Did you know that your ads can show up for searches that are not relevant to your business? And if anyone clicks on them, you still have to pay? Whenever you are bidding on broad or phrase match keywords the potential to show up for irrelevant searches is present.

While just bidding on exact match might seem like a nice solution, this will greatly limit your reach potential, which makes the process of identifying negative keywords critical to your search strategy. While searching your search query report might feel like a time-consuming task it is an absolute necessity, especially in the automotive industry. If your ads are appearing for irrelevant search terms your business instantly loses credibility. This is why being cognizant about setting up negatives to avoid irrelevant search queries is not only going to save you face, but also going to save you money.

For instance, imagine if you’re bidding on the keyword “affordable cars” and your ad appears for the search “toy cars,” and then a busy parent accidently clicks. This is not only a waste of time for the parent, but it’s a waste of money for you!

WordStream Advisor makes it quite easy for you to manage your negative keyword list through tools like the 20-Minute Work Week, which helps weed out irrelevant searches, and our search query report to find and configure your negative keyword lists.

5. Adjust your campaign budgets based on car-buying trends

Is Black Friday the hottest day to buy a car? What about Memorial Day Weekend? There are many unofficial “car-buying holidays.” According to an analysis done by TrueCar.com and U.S. News & World Report, you can purchase a vehicle for 7.5% to 8% below MSRP if you’re strategic about when you buy it. Assuming your audience has done their fair share of research, they are aware of these automotive deal times.

Figure out when things are busy, steady, and slow and then adjust your online advertising budget accordingly. Make sure your windows aren’t too narrow. This often requires planning ahead, but Google and other ad platforms make it fairly easy to adjust your budget on an ongoing basis. Just make sure you’re actually doing this!

Another thing to take advantage of is ad scheduling. When do customers typically come into the store? Weekends? Weekdays post work? Look at the data to determine this and set an ad schedule so your ads are only running at a higher budget right before these key times, reminding your future customers to come on by.

6. Target the right people with your automotive campaigns

What type of automotive business are you marketing? Who is your typical customer? There needs to be a different strategy for marketers of luxury Porshe and BMWs versus marketers of used cars or more affordable brands like Honda and Toyota. The prospective customers have drastically different concerns, questions, wants and needs when it comes to investing in a new car. While your Mercedes customer may be more concerned about their heated seats and leather interior, your Honda buyer most likely care more about gas mileage and longevity.  Although this might not always be the case…

“Those who buy luxury cars more likely crave social status and material wealth, as opposed to utilitarian cars which consumers buy out of necessity,” says Julia Manoukian.

Different audiences need to be broken down and targeted separately. Considering the main things your audience cares about is a critical way to get the right message to the right person and increase the chance of conversion.

If necessary, you may need to split your audiences into two, three, or even four separate campaigns to ensure you’re sending the right message to the right prospect. And, of course, with tools like Facebook’s targeting options this is not as complex as it once was. Just ensure you spend the time to define your audiences so you can craft the right message to the right person at the right time!

Read more Best tips to get an effective Google Adwords Campaign

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