The 5 Critical Connections to Improve Return on Ad Spend (ROAS)

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    23-Aug-2014
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Nearly every marketer looks at the return on ad spend (ROAS) of their campaigns as the overall barometer for success. Marketers typically focus on A/B testing to find the best subject lines; perfecting bidding algorithms of PPC campaigns and making sure retargeting campaigns are presenting relevant products. However, there are some unexpected factors behind why your ROAS may be lower than expected. These five critical connections are just as important in ensuring the success and effectiveness of your marketing campaigns.

Transcript of The 5 Critical Connections to Improve Return on Ad Spend (ROAS)

  • The Critical Connections of eCommerce success Improve Return on Ad Spend (ROAS)
  • The 5 Critical Connections of eCommerce success The Critical Connections of eCommerce success The Critical Connections of eCommerce success Improve Return on Ad Spend (ROAS) Nearly every marketer looks at the return on ad spend (ROAS) of their campaigns as the overall barometer for success. Marketers typically focus on A/B testing to nd the best subject lines; perfecting bidding algorithms of PPC campaigns and making sure retargeting campaigns are presenting relevant products. However, there are some unexpected factors behind why your ROAS may be lower than expected. These ve critical connections are just as important in ensuring the success and eectiveness of your marketing campaigns. 1. Product Inventory 2. Competitive Pricing & Delivery Terms 3. Landing Pages 4. Marketing Spend 5. Checkout Process
  • The Critical Connections of eCommerce success The Critical Connections to Improve Return on Ad Spend (ROAS) 1. Product Inventory How can you leverage product inventory data? The rst things a marketer typically looks at when faced with low ROAS on a particular campaign are broken links, poor creative, or perhaps a missing call-to-action. These are legitimate reasons, but its a siloed view that only looks at marketing-attributed causes. By looking across departments to other areas like product inventory, you may nd that conversions are low simply because there is limited stock available. Metrics like views availabilitythe percent of product page views when there is sucient coverage of stockcan provide a good alternative perspective for why campaigns arent performing. What are other retailers doing with product inventory data? Nearly $300,000 was identied in lost opportunity on trac from paid search keywords that were sending customers to items that were out of stock. By connecting inventory data with PPC keyword cost and click information, one retailer was able to identify keywords that were underperforming because of this reason. DynamicAction was able to identify the issue immediately, which allowed them to pause those keywords until additional inventory was available.
  • The Critical Connections of eCommerce success The Critical Connections to Improve Return on Ad Spend (ROAS) 2. Competitive Pricing & Delivery Terms How can you leverage competitive pricing and delivery terms data? How is your pricing compared to competitors? If its higher, consumers may be window shopping on your site and purchasing elsewhere. Separately, a choice of delivery terms (e.g. 24-hour, same-day, free shipping, etc.) is becoming the new standard for many retailers. Maintaining a constant handle on what retailers in your competitive set are oering customers may be the dierence between a successful campaign with high ROAS or a low performing campaign. What are other retailers doing with competitive pricing and delivery terms data? At one luxury retailer, marketing was promoting a certain line of products for the season. Using DynamicAction, they were alerted to the fact that these products were priced high compared to competitorsin some cases by as much as $1,000. Even though they were oering a free shipping promotion the price disparity was impacting the performance of the campaign. Adjusting prices to be more in line with other retailers, they managed to improve the sales of these products and improved the ROAS for the campaign as well.
  • The Critical Connections of eCommerce success The Critical Connections to Improve Return on Ad Spend (ROAS) 3. Landing Pages How can you leverage landing page data? At any given time, a retailer may have hundreds of campaigns running between PPC, display, retargeting, email, social and other channels. Knowing whether any one of these campaigns is directing people to the wrong landing page or error page is a daunting task. With the right tools that can alert you to broken links or misdirected trac, you can avoid spending time digging into campaign performance and immediately x any issues to recoup potential revenue losses. What are other retailers doing with landing page data? A retailer using DynamicAction was able to connect their PPC, web analytics and product data to discover that a number of keywords were resulting in a high bounce rate and that this bounce rate was costing them tens of thousands in potential revenue from sales of those products. Based on the recommendation from DynamicAction, they immediately paused those keywords and went in to their site to optimize the landing pages.
  • The Critical Connections of eCommerce success The Critical Connections to Improve Return on Ad Spend (ROAS) 4. Marketing Spend How can you leverage marketing spend data? Are you spending too much on campaigns where youre actually losing money on the product being sold? The conversion rate is just one element of understanding campaign performance, but in order to get a true picture of ROAS, you need to have visibility into shipping costs, orders and other factors that may be detracting from your prot potential. The math to calculate ROAS from all of these components can be complicated, but the right application can help track these costs. What are other retailers doing with marketing spend data? Within the rst week of using DynamicAction, one retailer found they had a low margin and low ROAS on a number of products they were promotingin some cases the campaign costs were too high; in others, free shipping was diminishing the margin too much. Through the application, they were able to get the exact products impacted and revisited their campaigns to adjust spend and free shipping thresholds.
  • The Critical Connections of eCommerce success The Critical Connections to Improve Return on Ad Spend (ROAS) 5. Checkout Process How can you leverage checkout process data? Accounting for every factor that can go wrong along the checkout process path is impossiblefrom broken links to fraud detection to invalid promotion codes. You could have an amazing campaign, but if customers simply cant make a purchase due to technical issues, your ROAS may suer. It could be a full time job to try to maintain all of these areas, but there are tools that can monitor for any performance anomalies or outliers to avoid losing potential sales and risk damaging customer satisfaction. What are other retailers doing with checkout process data? DynamicAction identied a website issue that was impacting one retailers campaign performance. They found that hundreds of customers were clicking through an email campaign only to receive error messages when entering a promotion code upon checkout. They were able to x the site issue in time to salvage their ROASand contact the customers impacted to invite them back to purchase.
  • The Critical Connections of eCommerce success About DynamicAction DynamicAction from eCommera helps forward-looking retailers and brands drive every last dollar of prot from their ecommerce business. This rst-of-its-kind Decision Intelligent Commerce application connects and analyzes product and customer data across a retailers organization. Unlike any reporting or analytics tools to date, DynamicAction tells you exactly whats impacting prot, recommends actions to take, and ranks them by how much theyre worth to your business. eCommera is based in London, England and Redwood City, California. Find out how the leaders in retail are revolutionizing their multichannel businesses at www.dynamicaction.com, @eCommera and http://www.linkedin.com/company/ecommera. eCommera Limited., Wells Point, 79 Wells Street, 1st oor, London, W1T 3QN, United Kingdom, +44 0 20 3530 5800 eCommera Inc., 812 Middleeld, Redwood City, CA 94062, United States +650 814 5476 eCommera France, 11bis rue Volney, Paris, 75002, France, +33 0 1 74 90 04 03 www.dynamicaction.com info@ecommera.com