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Cut Paid Search Spend & Get More Orders

Featured Posts, Marketing, Paid Search March 27th, 2020

The COVID-19 outbreak is affecting everyone differently. Some of our clients are seeing the best seasonal performance in years, while others are taking huge hits based on verticals or struggles with inventory. Across the board there is significant uncertainty, and brands are looking for every way they can find to do more with less. At Inseev, when we take over paid search accounts from other teams we commonly take the first step of eradicating wasteful tactics. Instead of pushing clients to continue increasing spend, we average double digit spend reductions in the first month while maintaining or increasing conversion volume. In an environment where that kind of approach is looking increasingly attractive, we want to share some of the key ways we make that happen.

Switch to Manual Bidding

The most important step that advertisers can take to help gain more control over their advertising budget and ensure that spend is going to the most profitable areas is switching campaigns from an automated bidding strategy to a manual bidding strategy. Although it might seem counterintuitive during these times to turn away from Smart Bidding, there are multiple reasons why this shift can greatly help you regain control of your ad budget and your results:

Algorithmic Learning Periods

Smart bidding strategies are frequently updating based on current signals in the world around us – however, these strategies also rely heavily on prior account performance. In a world that’s quickly changing on a day-by-day and hour-by-hour basis, conversion metrics from two weeks ago, or even one day ago, will not be as helpful in dictating where spend needs to be going right now. Additionally, if budgets need to be shifted, either reduced across the board or reallocated toward a campaign that may be higher performing at this time, changing budgets on these campaigns will trigger a new learning period for the strategy. This will cause a few days to a few weeks of potential performance volatility as the strategy relearns (especially if budgets are changing frequently) – which is the exact last thing that any advertiser wants right now.

Control Over CPCs

If you had a $250 daily budget and the choice between 250 clicks in your campaign, or 400 clicks on the exact same keywords, which would you choose? Most would probably choose 400 clicks, and we’d agree. Overinflated CPCs caused by automated bidding are one of the most common issues that we’ve seen when taking over accounts that have been relying on automated bidding strategies, and in times like these when businesses are looking to pull back on spend, this is a huge area of opportunity for many advertisers to get substantial increases in traffic (and more orders) on the same amount of spend, or keep current traffic levels flat while pulling back on spend.

Whether your efficiency targets are CPA or ROAS-focused, getting the same traffic at cheaper CPCs will help you improve that baseline immensely.

Scenario for Corona Virus Performance

We are constantly testing manual versus automated bidding strategies. In a manual vs. Target CPA test that we completed this week, which is representative of what we see in the majority of cases, the differences in CPA and CPC between the two approaches have been astounding: CPCs from the Target CPA campaign were 61% higher than our manually-run campaigns, while CPA is 31% higher than in our manual campaign, all on the same pool of keywords:

The effect of COVID-19 on our Partners

The Bottom Line

There are dozens of other ways that more granular control and more human insight produce better results. Overall, with strong analytics tools, smart media managers and diligent workflows, we find that manual bidding wins in about 90% of tests that we run. Where we do see automated bidding strategies winning on a consistent basis is in campaigns where there are very high volume keywords, and extremely consistent performance baselines. We’re not making any claims about what’s right for your account, but if you’re not testing these theories, our experience tells us you should be.

Review Available Targeting Options

Google offers a variety of targeting options for advertisers to adjust as needed: geographical targeting, devices, demographics, and a variety of audience functions. There’s no doubt that there have been shifts in one or all of these areas within your account in recent weeks, and regularly reviewing these options and making adjustments as needed can help ensure that spend is headed to the most profitable areas while pulling back on lower-performers.

Geo Targeting Changes

Reviewing performance by Geographical area (state, county, city, or even zip code) is another strong area of opportunity to ensure that your budgets are being directed to areas where performance is stronger and pull spend away from areas that are currently less efficient. Although this is something that should be reviewed on a regular basis in any account, this is especially vital in the US right now as we’re seeing cities and states at varying levels of shelter-in-place orders and dependence on online shopping is changing significantly.

As an example of how performance can vary across states at any time, see the below view of one of our clients and the variants in CPA per state – states with higher CPAs should have bid modifiers decreased in order to limit spend in areas that are lower-converting to ensure that sufficient budget is able to be allocated to higher performing states:

Location Optimization with COVID-19 Outbreaks

Device Adjustments

Diving into device adjustments is a surefire way to find areas of opportunity within accounts – we’ve seen usage trends shift dramatically over the past few weeks. Although it is heavily industry-dependent, some clients have seen larger shifts to desktop traffic as users are spending more time at home around their computers and less time on-the-go. Meanwhile, other clients have seen larger increases in mobile traffic. No matter the case, it’s important to carefully monitor performance from these shifts in device usage to optimize towards your target goal: if device traffic is up significantly while KPIs are down, bid down accordingly to ensure that extraneous spend is not going towards devices where users may just be browsing to kill the time.

Demographics

Adwords offers three core demographic targeting options for search campaigns: age, gender, and household income (plus a fourth option of parental status for Youtube and display campaigns). Now is a great time to look into these options to see if there are substantial shifts in traffic in any of these groups and adjust accordingly. E-comm retailers may be seeing large increases in traffic from those in older age groups who are normally accustomed to buying items in-person and have recently had to shift to purchasing online – increasing bids in these areas can ensure that ads are getting in front of those more likely to purchase, boosting overall results.

While some instances, such as the above age demographic adjustments, may be a bit more logical, it’s important to regularly review all possible demographic options to identify new trends and react accordingly. For instance, since March 15th, a client of ours in the online gifting space has seen a noticeable increase in traffic coming in from the male demographic. However, these new male visitors are not converting, and we are seeing a consistently higher CPA as a result. To counteract this higher CPA, we implemented a negative bid modifier on the demographic:

Audiences

Leveraging audiences, either via your own CRM-generated lists, or via Adwords’ built-in audience options, is a great way to increase your paid search spend efficiency and ensure that your ads are only getting shown to those who are more likely to be purchasing your products in times when budgets are tight. While audiences are ideally used as bid modifiers layered on with a full campaign via the Observation mode setting, (and can still be used in that manner) changing audiences to targeting only can help cut back on irrelevant spend when necessary.

If spend needs to be pulled back significantly, but you’d still like to keep some media running, limiting reach to past purchasers or site visitors for the time being is a strong option when traffic pools are large enough. Ensuring that ads are only shown to those who are already familiar with your brand can help bring in traffic that is more likely to convert than trying to reach those who do not have any brand awareness.

Meanwhile, utilizing Adwords’ in-market audiences allows you to get a bit more granular with targeting consumers that Google knows are already in the process of searching for a new product or service, instead of those who may just be casually browsing (and potentially wasting your clicks):

Structural & Setting Changes

In addition to adjusting the core bidding components that drive a majority of the day-to-day performance in Adwords, there are also many additional changes that can be made to account structures and settings to ensure your dollars are going to the right places while performance is slowed.

Lower Spend on Irrelevant Campaigns

While this may seem obvious, it’s an important one to follow. The fact of the matter is, retail trends have shifted signficantly over the past few weeks. As we’re all adjusting to this new normal, we’re shifting our buying habits to adapt to our current needs and surroundings. Per the above-mentioned article, verticals such as fashion, basic comfortable clothing and workout apparel have been seeing growth, while more extravagant event clothing purchases are trending down. Similarly, orders for kitchen/cooking utensils and home office supplies have increased in the home goods category, while items for entertaining are trending down. This list provides a great view of some general trends, but be sure to review your own campaigns and see if there are any further areas that can be pulled back over the next few weeks.

Restructure Your Account

During this time when day-to-day activity in the paid search account might be scaled back due to limited spend or paused campaigns that you find yourself with some time on your hands, restructuring an Adwords account can provide an invaluable lift to your account’s performance (and ease of management) both now and in the future as performance begins to pick back up.

The potential opportunities that can arise from restructuring an account can frankly fill their own blog post, but at a high level, we recommend the following account structure best practices:

  • Campaign-level breakouts for exact match and BMM keywords, with all exact match keywords added in as negative keywords to BMM campaigns
    • This allows for more control over bids on exact match keywords (those keywords that are known to be strong performers in an account), while also allowing for lower bid prices on BMM keywords, which are used to surface new exact match keywords
  • Semantic-level breakouts at a campaign level
    • Too often, we’ve seen accounts that have been structured with something along the lines of a Branded Campaign, a Top Performers NB campaign, and 1 or 2 Broad/Generic NB campaigns. While these extremely broad NB campaigns make efficient management difficult on a daily basis, it’s twice as difficult in times like these where we see large deviations in KPIs at semantic levels and need to ensure that spend is only going to those more profitable areas.
    • To give an example of a client in the online gifting space, we’ve consistently seen a 15-20% higher ROAS in their ‘Canvas Prints’ campaigns over their ‘Photo Canvas’ campaigns. While these both fall into the same general bucket of custom canvas photos, this difference in ROAS between the two groupings has been crucial in driving spend to the more efficient Canvas Prints campaign while pulling back on spend in the Photo Canvas area.
  • Tightly-knit ad groups
    • We recommend no more than 3-4 keywords per ad group in order to ensure that each keyword is able to be served as relevant an ad as possible. This has a twofold purpose: users are much more likely to click on an ad that more closely mirrors their search term, and Adwords’ Quality Score feature uses keyword/ad relevance as one of its three components. Higher quality scores lead to cheaper click prices in the auction, which is essential to efficiency.

Review Search Terms for Negative Spend and New Keywords

As people turn more and more to the internet to find information about the spread of COVID-19 and its impact on day-to-day life, there’s a strong chance that at least a few of your keywords have been triggering coronavirus-related search terms. Although Google has announced that they are blocking ads capitalizing on coronavirus, we’ve still seen multiple clients with new search terms coming through related to the virus or tangential topics. A client of ours in the tax and accounting space, for example, has recently seen an increase in queries related to ‘tax deadline extensions‘ and ‘Trump tax relief checks’ – neither of which are relevant to their services.

Conversely, reviewing search terms may surface some new search queries that are driving converting traffic. As consumers are settling into their homes and find their needs changing, the way that they search may be changing too – if you find any new search terms that are consistently converting, adding them in as exact match keywords now will allow you to get more control over these bid levels and have a leg up on the competition who may still be lagging behind on surfacing these new terms.

Testing

Testing during a time of lowered overall spend and uncertainty over performance may seem counterintuitive, as it can be tempting to stick with what is known to be tried and true. However, if performance has remained on the lower end over these past few weeks, testing can provide the boost needed to help turn performance around. Trying new ad copy messaging, landing pages, or offers (free shipping, lowered free shipping thresholds, etc.) may provide consumers with the incentive needed to make their purchase.

Making it Happen

If you manage your own accounts, try some of these things out and feel free to reach out to us if you get stuck.
If an agency manages your media, start asking them detailed questions about the concepts in this post. We find that a lot of times what’s under the hood is pretty darn lazy. If they’re employing a strategy where the machines do all of the work, don’t assume you’re doing the best you could be. Push for tests, think critically and push them to think critically.

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