2023 has brought a difficult economic climate to navigate for eCommerce.
With Q4 fast approaching, how can you ensure that your PPC or paid social partner is able to get the most out of peak season for you?
What are the key questions to be asked to ensure profitability and an acceptable level of revenue?
How do we protect the activities delivering the most value?
As a team of senior consultants, we’ve put together our list of the key areas that will ensure you maximise performance during such a period for your business.
There are no silver bullets or campaign hacks here, just deep-dive commercial insights, discussion and questions to improve your strategy.
Let’s get into it.
Now is the time to get your ducks in a row with profitability.
A decent paid media agency should be asking you what your business can afford to spend to acquire a customer, what’s the breakeven point, what would be a loss, if you benefit from customer lifetime value and so on.
Knowing this, a campaign ROAS or CPA target can be constructed that will ensure an acceptable return for your business.
Using other clients’ benchmarks or averages isn’t useful.
It’s essential to get into the details to ensure that the targets being sought and achieved are viable for your business, with your AOV, margin, costs and broader business goals.
There’s a direct correlation between what your profitability target is and the volume of sales and revenue that you’ll be able to hit.
For example, the need for a higher return will result in campaigns bidding more conservatively to preserve the return-on-ad-spend target—lowering potential sales volume.
A higher sales target may require compromising on ROAS and CPA. Bidding more competitively in auctions to capture more volume, alongside venturing into more demand-generative channels to drive the volume you require.
Going into peak with a solid foundation of what good looks like and what it doesn’t can strategically guide your decision-making as the real data comes in and performance unfolds.
This helps to avoid reactive changes and decision-making that can be damaging both short and long term.
Action: Review your AOV, cost-per-acquisition and ROAS targets for each ad network.
Get a breakdown of what products this is most commonly over to review how viable this is for your business. Look at spend across Q4 last year as an indicator of the budget required, tied in with forecasting current YoY uplift, decrease, etc.
Do you lean towards volume or profitability? Are your expectations in line with likely performance? If there’s a gap to fill on sales volume, where will this come from? Discuss with your paid media partner and plan accordingly.
Uncover your 80-20s
A Pareto distribution, or 80-20 as it’s more commonly known, is the phenomenon of a small number of inputs typically leading to the vast majority of outputs across a wide range of areas in human activity.
This is something that I’ve seen in paid media with almost every client that I’ve worked with:
One channel disproportionately drives most of the sales
One campaign type drives the sales in the channel
One keyword or product listing drives the sales in the campaign
It can be quite a stark realisation to drill into your performance in this way and uncover how it applies to your business. It doesn’t need to be only one keyword or precisely 20% of input for this to be the case; you will find it if you look.
It’s very common for Google Ads to be carrying the majority of your online revenue.
When you drill down, you find only a few products in a Google Ads PMax campaign that drive all of the profitable sales, while others drain the daily budget or don’t allow others to have a chance to show.
Have enough of these top-performing products been ordered to meet demand through a peak?
Have too many of the products which potentially aren’t getting any visibility in ads been ordered?
There’s a win-win in identifying these elements.
If your resource is limited, you can focus on protecting performance and optimising where it’s going to have a compound benefit.
If you’re looking to scale, you can ring-fence what’s working and then see where to focus and start building again around it.
Action: Work with your paid media partner to identify the campaigns that are driving the majority of the value in your business. Drill into what targeting in terms of keywords or products is carrying that performance. Find your 80-20s and use them to guide your Q4 strategy and planning.
Do you need to break these out into their own campaigns to ensure an adequate budget is allocated? If there are products or terms that aren’t converting, what’s the reason for this?
What copy variables and images are driving the most value? Are these being used in other channels? Are there messages driving value in ads that aren’t clear on the website or in other marketing channels?
Simplicity wins with user experience and website messaging.
Ensuring that key touchpoints on the customer journey, such as your homepage and product page, have clear and effective messaging will lead to the best throughput of users to customers.
Doing this prior to Q4 means that you will minimise potential customer drop-outs during such a crucial time.
Apps and plugins can change things on a website without you knowing, and messaging can become unclear or confusing as marketing messages are changed throughout the year.
This can unintentionally lead to a proposition which isn’t optimal for performance.
The benefit of doing this is that it will uplift all marketing channels, not just paid media, so it’s a valued use of time for key stakeholders.
Sales and board team members must be involved to offer customer-facing and product specialism views that may not be in the marketing team.
We do this as a standard with all clients; it’s an incredibly useful way to find out how often people actually interact with the site rather than how often we would like them to!
Action: Clear your cookies and cache and load the site on your phone.
It sounds overly simple, but very often, you can find pop-ups stacking on top of one another, content that’s near impossible to read and more.
You can use free tools such as Microsoft Clarity or Hotjar to watch screen recordings of real users coming to your website to analyse this user behaviour. Review screen recordings as well as heatmaps to find the common problems and fix them in advance of peak season.
Recurring questions with eCommerce sites such as:
When will I get it?
Can I send it back if I don’t like it?
Does it come with a warranty?What are their reviews like?
Need to be added to product page templates to avoid hesitations and bounces.
Don’t expect users to dig for this information. The search results page full of competitors is only a click of the back button away.
Offers and incentives
If you’re going to run offers over Black Friday or Christmas, keep it as simple as you can.
The more complexity in the offer, the less uptake you’re likely to see. This applies to campaigns themselves as much as the website.
If you’re trying to break the scroll with an offer on Facebook, you need to have something concise and clear.
To ensure customers take advantage of the offer on the website, there needs to be little to no friction in being able to apply for the promotion.
If users have to dig around for information, they’re likely to bounce, and each one who does, you paid for.
That being said, you don’t have to compete on price.
Dare I say it, you don’t even have to run an offer just because everyone else is.
Offering a value add (such as a free gift) can be as much of a purchase motivator as a discount. Often, the perceived value to the customer can be higher than the actual outlay for the business.
Remember, each time you discount, you’re eroding your margin and will need to adjust your ROAS and CPA targets in campaigns accordingly.
Most businesses will see an uplift in sales throughout this period without any additional offer or incentive.
Action: Use the findings from the 80-20 section to guide what should be on offer and what the offer should be. If you can see a particular product is carrying performance, an offer incentive there is likely to resonate highly with customers.
If a certain landing page is receiving most of the traffic, making sure the offer details are clearly visible there will ensure uptake on the website. Review past campaign performance to get an understanding of offers that performed well historically.
If paid social is something that doesn’t usually work for your business, running a short-duration campaign for just this time period can allow you to capture additional sales outside of search and shopping.
The lower buying propensity in the audience at these times of year is offset by the environment that sits around it—market factors outweigh marketing.
Where many brands struggle with paid social is that the campaign doesn’t get enough conversions to be able to exit the learning phase.
You need this as audiences are broader. Layering (from a data perspective) what a customer looks like on top of an interest category enables the campaign to refine and show ads to those who have a higher degree of intent to buy.
This can be helped along in short-duration campaigns by optimising for an event that’s lower down in the conversion journey, such as add to cart.
Still measure success on sales and revenue but feed machine learning positive feedback signals whilst the campaign runs to allow it to perform.
Action: Take your best-performing products, copy and images that drive sales year-round and hit this opportunity with a slick and refined offering.
Use the conversion objective but test optimising for add to cart rather than purchase to get around only a small number of sales coming through.
If you see viability this time around, you can plan for an evergreen paid social campaign, taking the same approach but then moving to optimise for the purchase event once you are able to.
Maximising value in other channels
Paid media is often the initial driver of traffic and sales.
Getting supporting channels implemented and optimised before a peak will ensure that you see the highest return possible—even if that return isn’t shown directly in the ads account reporting.
Browse abandonment and cart abandonment flows are a must; you can use the best-performing search copy to steer messaging in this direction.
Post-purchase activity such as cross-sell email workflows and a referral scheme maximise the ROI of initial paid media spend. Rolling these out before an influx of customers comes into the business is most effective.
Low-cost solutions like ReferralCandy are an easy way to drive additional sales.
Once in place, you can start to model this channel data into your CPA and ROAS targets.
If you know that you see a 20% returning customer rate through email marketing and an additional 10% of new customers through your referral marketing programme, it becomes viable to reduce ROAS targets in your paid media campaigns.
Lowering ROAS targets means that you can be more aggressive with bidding in the auction. In turn, this usually leads to more clicks and sales.
This takes us full circle back to where we started with commercial underpinning.
You often need paid media to strategically implement other marketing activities.
Once you’re done, you can utilise the findings to become more competitive in ad auctions without risking breaking the bank whilst doing so.
Actions: Review where customers drop out within your conversion journey. What marketing channels address these areas? Is the copy creative and the offer aligned with what is known to be most effective?
Review what you have in place to maximise the value of each customer. Adding a low-cost referral scheme or email workflows to cross-sell other products maximises the value of your initial paid media spend.
If you have repeat customer rates, referral uptake percentage and email data, are your targets too restrictive on the direct return in paid media?