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Archive for April, 2014

Sport Chek’s Big Facebook Ad Test: Revealed

Thursday, April 24th, 2014

Is online advertising effective? Exactly how effective? It depends how you measure.

Facebook’s Sheryl Sandberg cites a recent case study by Canadian sporting goods chain Sport Chek attempting to prove that Facebook ads provide a greater lift than paper flyers. “During the two week experiment, sales rose across Sport Chek stores nationwide by 12 per cent.”

On the strength of these results, the company will shift 25% of its print ad budget to digital spending in the coming year.

Aha! Targeted digital ads work better than paper flyers very few people read.

But one suspects there are still serious problems in the measurement methodology. Was this 12% sales increase over the prior period, or year-over-year? Was it same-store sales or part of a national measurement that increased the overall square footage of the company? Did any other variables affect the result? Was anything done to attempt to directly attribute sales back to the Facebook campaign? How much did the campaign cost? What is the estimated ROI?

Certainly, the shift of those offline flyer dollars over to digital is long overdue.

So… what about online sales? Sport Chek has a website, too. And after visiting that website, I saw a remarketing ad, so they’re obviously doing what they can to drive traffic there. So why not talk about advertising spends that can be easily and directly attributed to the exact source of the spend? When is someone in retail going to come out and admit that all those retail stores, constantly changing layouts, staff, real estate, and taxes, are very costly overhead? Is it the CMO’s job to embrace low-margin sales in agnostic fashion when there is also a full web presence waiting to make the company higher profits? Is it the CEO’s job to look into shifting the proportion of online sales? In financial reporting after quarterly earnings results by Canadian retailers like Sport Chek and Lululemon, why is it so rare to hear anyone ask about the growth in that proportion of online sales? (Fortunately, it’s becoming more common. In this Bloomberg report from 2012, Lululemon’s CEO indicated that online sales drove 14.3% of the company’s revenue — not too shabby. That metric should be front and centre in far more conversations about digital ad campaigns.)

Some companies, while shifting their “dollars to digital,” are still measuring their results like they used to measure their results from TV ads — or flyers. The lower-hanging fruit awaits a fuller commitment to the power of digital, accountable ad spending.

After April 22, You’ll Be Busy. Because AdWords Is About To Get A Lot Better

Thursday, April 10th, 2014

Last year, while many other advertisers were holding protests and doing the Chicken Little dance, I decided early on to say something different: Enhanced Campaigns were going to make things… yes… better.

A year later, and we’re still living with the pain of something that was taken away: bid control over the tablet channel.

What we gained was granular control over mobile bids at the ad group level if desired, flexible and quick geobidding factors, and improved dayparting.

I sincerely doubt many advertisers, after having time to reflect on all this, would go back to having three times the number of campaigns just so they could control bids by device type, and three, twenty, or fifty times that many again so they could nimbly bid accurately by geo segment.

Sure, it’s not all great now. Costs have risen, device switching is rampant, and competition is tougher than ever. Google’s Quality Score remains opaque and often punitive, inaccurate, capricious, or simply profit-driven.

Google still allows low-quality advertisers and arbitragey “partner search engines” to pollute the paid search results, despite claiming crackdowns. In some countries, fake comparison engines and the like still pollute paid search results, allowing certain advertisers to de facto double-serve. The playing field should feel more level for conscientious players. Enhancements like ad extensions are welcome, except that advertisers want to game them, and like a planet where Mariah Carey’s fake hair is the norm, you look bad if you don’t play along. Just more busywork on the PPC treadmill. It’s [nearly] enough to drive a man to content marketing, or “what used to be called SEO.”

But if user behaviors in a multi-screen world are only adding to our woes and ROI challenges, isn’t that really an opportunity — if we got back to having more direct knowledge of user conversion patterns? We’ve got to be given the tools to do our jobs better in this emerging environment. And in a multiple device world, do tablets or smartphones really cause, or not cause, the majority of conversions on their own?

Google is hinting that something is coming to help us in these areas — a major product release on April 22.

What if we knew, instead, that a particular user converted? It’s the user that matters, not that “tablets” or “phones” cost us x amount of money and “do or don’t convert.”

Ever looked at one of those attribution reports (Search Funnels and the like) that are supposed to help you attribute better from the first click through other influences and impressions, right through to the last click before conversion? They’re often pretty useless, especially for long sales cycle or collaborative purchase decisions. For the most part, all we’re still getting are the really obvious purchase paths from people who did all their thinking on the same device in a relatively short period of time. So we’re left with the impression that last-click attribution is still “pretty accurate” and as for complex paths to purchase justifying a more nuanced approach to your spend, “don’t get your hopes up.”

What if we could, at least, cross the chasm among devices (and yes, even between work and home), over an extended period of time? What if logged-in users supplemented the attribution value we get from cookieing users anonymously?

So that’s Fervent Wish #1: “lost” user patterns are united across devices over a longer period of time, and we’re given the option to easily incorporate our preferred attribution models into a scoring system or the like, to assist with bidding.

The second trend we know is about to explode — because it’s sitting there right in the stats for Display campaigns and is somewhat already available in Bing Ads — is accurate (not extrapolated or guesstimated) demographic information. Google isn’t really telling us exactly how they can get gender and age information for so many users today as compared with the weak numbers they used to give us a few years ago. But I’ve seen some accounts where about 76% of these demographics are deemed certain by Google, and only 24% are unknown. “That’s great,” you say, because it might make us a little less wary of advertising on the Display Network, “but I can’t apply those factors for Search.”

So that’s Fervent Wish 2: that Google will give us the ability to apply demographic bid factors to Search campaigns, should we so desire. Sound like a small thing? I’ve seen innocuous, “unisex” looking products that convert twice as well for men as for women. Twice as well! That’s not a small factor. But is that because, maybe, one sex is more impulsive than the other, and we’re just missing information on device switching, longer consideration cycles, etc.? No problem! That ought to be covered by Fervent Wish #1, which amounts to better cross-device, home-vs.-work attribution (though it wouldn’t cover lengthy familial discussions across multiple user accounts).

Many of today’s campaigns face challenges because of the competitive environment. Sometimes success is much closer than we think. Don’t throw in the towel… persevere!

Many struggling accounts may be in better shape than they look, because they’re just not quite getting the credit they deserve. First and second and other high-funnel clicks, in particular, need to be given more weight. Display campaigns — and display impressions — need to have better attribution models.

I’m inclined to believe this because of some glimmers of hard evidence I’ve seen. For example, we experiment with Remarketing Lists for Search Ads (RLSA). We’re able to coax very high conversion rates out of some really broad terms about lifestyle, product categories, etc. Let’s say it’s the word “poultry” or the word “organic”. A terrible keyword to bid on for just about anyone. But poultry is converting right and left to our remarketing audiences. And there’s no way any of those users went anywhere near the poultry section of the website on their own, so the reason they knew about it in the first place was our regular PPC bids on high-funnel poultry words. Which, by the numbers (last-click attribution), convert terribly. So all it takes the poultry crowd to convert is two or three clicks to convert instead of one (our latter bids, much higher, because we’re now bidding on a much smaller, more qualified audience). Instead of a total of $42, let’s say, for the clicks that caused the $170 in sales, we actually paid a total of $75, which is still on target.

The point is we never have enough hard evidence that those initial low-performing poultry words really are working. We’d love to know.

On top of the attribution issue, then, as mentioned, many advertisers can benefit from layering additional detail such as demographics on top of geo, time of day, and other factors they’re already adding to accounts.

The majority of advertisers, I suspect, still come to play with the overconfident notion that they can fiddle around with a few keywords and win business. Here’s to you, the obsessed ones, who will take advantage of the newly available features and squeeze out surprising ROI in a difficult, competitive online auction.

If neither of the two fervent wishes are granted, of course, you can disregard everything I’ve said here (for now).

And P.S. — if Google provides a bold step forward in crossing the device chasm, it changes the conversation about how effective the “channels” are, so it changes the whole context for the advertiser desire for “tablet control”. And it also allows us to remarket more sensibly, given that remarketing “tablet to tablet only” or “smartphone to smartphone only” is oddly siloed thinking in a multi-screen world. Do I expect Google to restore “tablet only” bidding capability? Hmm… I suspect they’re working more long term than that. Where is that puck really going? When only 30% of conversions or less are coming from desktops and laptops, when only half of those are working with even reasonably certain attribution models, won’t we need appropriate tools and models to allocate our spend better across all online channels and segments?

 


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