Archive for November, 2008

“Ho-Ho-Ho” or “Ho-Hum”?

Getting the best from a tough retail season

Anyone who’s read a paper or turned on the news is aware of America’s current financial crisis. Amidst the sluggish economy, mortgage crunch and a volatile stock market, Americans have clearly tightened their budgets. How this crisis will affect the 2008 holiday shopping season has yet to be determined, but most experts agree that the shopping season in 2008 is not likely to deliver the spending gains retailers enjoyed in previous years.

According to the National Retail Federation’s annual holiday forecast, sales for the 2008 holiday season are expected to rise 2.2%, to $470.4 billion. And while it’s an impressive number, this gain would fall well below the ten-year average of 4.4% in annual holiday sales growth. In fact, 2008’s projected holiday sales growth would represent the slowest growth since 2002, when holiday sales rose just 1.3%.

With consumers acting more Scrooge-like with their holiday spending, retailers must work to make their sales and promotions as competitive as possible, because everything will take a backseat to price this holiday season. But retailers can face the holidays with a realistic, yet resilient approach: Bad economy or no bad economy, the holidays are coming. The road may be a little rockier than usual, but as the National Retail Federation study indicates, consumers will still be spending.

The best thing that our Sponsored Search advertisers can do is to make their ads as appealing as possible: Make sure that shoppers know about holiday specials, sales, free shipping offers and anything else that will attract interest starting this week. Your customers are out there, but you’ll need to work harder to grab them.

A bright spot in this gloomy news is that the economic slowdown may end up stimulating online sales, if cash-strapped consumers turn to the Internet to find great deals not available at brick-and-mortar stores. Lower prices — minus the hassle of driving, plus the ease of things like comparison shopping, user reviews and free delivery — could make the idea of online shopping even more appealing this season to those who would normally head for the malls.

— Noah Belson, Content Quality Analyst

The Monday You’ll Actually Enjoy

4 ways to make the most of web retail’s busiest day of the year

“Cyber Monday” may sound like the title of a Tom Clancy thriller, but in reality it’s the online counterpart to “Black Friday,” the biggest shopping day of the year. While Black Friday takes place the Friday after Thanksgiving, Cyber Monday occurs the following Monday, and is considered to be the ceremonial kickoff of the online holiday shopping season.

Consumers may pound the pavement for great deals from brick-and-mortar stores on Friday and the rest of the weekend, but when they’re back to work (and their computers) on Monday, that’s when the online shopping blitz goes into high gear. This being the case, retail advertisers should spend some time getting their Sponsored Search campaigns ready for Cyber Monday. Shoppers may be full of turkey and stuffing, but they’ll be ready the next day to start gobbling up the deals.

What motivates holiday shoppers?
According to the National Retail Federation’s 2008 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, 40% of shoppers say that sales or promotions are the most important factors when determining where to shop for holiday gifts. As the average consumer plans to spend $832.36 this holiday season and 44.2% of those consumers plan to buy items online, it’s more important than ever for advertisers to make their holiday ads as appealing and well-crafted as possible.

Furthermore, as of mid-November, 72% of consumers have completed less than 10% of their shopping, while only 2.2% of shoppers are already finished. So there’s still plenty of time to get your campaigns in shape before Cyber Monday and keep them that way for the remainder of the holiday shopping season.

4 strategies for a green Christmas

Here are a few tips to keep in mind as you prepare your campaigns for the post-Thanksgiving shopping blitz:

1. Call out any special holiday deals. Users always respond to things like discounts, coupons and sales, but the holidays and the current economic downturn make a good deal look even better.
2. Highlight lower-priced items when possible. If the price is right, things that may have once seemed like impulse purchases may now be irresistible to consumers looking to score a sweet last-minute deal online.
3. If you offer free shipping, be sure to include that in your ad copy. Free shipping is an extremely popular (if not the most popular) incentive for consumers, so if you offer it—even with restrictions—be sure to let your customers know.
4. Stress the ease and convenience that online shopping offers over the traditional mall shopping experience. Be very direct in stating how consumers can save time, money, fuel and hassle by buying online, rather than schlepping to pricey, crowded shopping destinations.

With a clear holiday plan that includes strongly crafted ads, Cyber Monday could lead to a lot of happy Tuesdays, and a pretty festive holiday season in general for your company.

— Noah Belson, Content Quality Analyst

Photo courtesy of Flickr user slightlywinded.

Cross-Selling for the Holidays

Our “gift” of holiday advice may help you increase your sales

You may have heard once or twice that the holidays are the season of giving, but given the current market, you should probably rely a little less on consumers’ giving spirit and a little more on tactics that can give you an edge. Which is why — in the spirit of giving, of course — we wanted to share some cross-selling tips from Laurie Briggs of Yahoo! Small Business that any of our online retailers should be able to use.

Below you’ll see some of Laurie’s advice. For all of it, read the full article on the Yahoo! Store Blog. And watch this blog for a series of articles about beefing up your search marketing for the holidays.

Add-ons

If you sell products that require batteries or other accessories, add them as a cart cross-sell for those products. This way, once someone has made that first step towards purchasing, you can offer them a product that they’re going to need anyway — and they might as well buy it from you! In the case of batteries, even if they don’t need them for something they bought at your site, it may remind them that they didn’t buy batteries for a previous purchase at another store and baddabing! — you’ve just increased your order size by several dollars.

Product pairs

Last Christmas, it seemed like every kid who wanted a Hannah Montana doll also asked for a High School Musical doll (my four nieces with the same gift request has got to be a pattern!) but auto-suggestions can’t predict what new items will be hot together this year. For your newest items, go to a brick and mortar store and see how they are merchandising. Also, keep an eye on your first few orders — they will help you determine some dependable cross-sells that you can set up using cross-sell rules. Once your sales of these items are on a roll, you can opt to auto-suggest only.

Unique products

During the holidays, shoppers are looking for a range of gifts for a range of people. Shoppers also tend to be much more open to suggestions, unlike other times of the year when they tend to focus on a particular purchase. Think about it — how many relatives do you have to buy for? Wouldn’t it be great if you could get shopping done for multiple people at just one store? And for how many of them do you have no clue what to get? Shoppers are intent to buy, but not necessarily intent to buy one particular item, and the suggestions you give can be quite welcome to a shopper in a gift-giving conundrum.

— The Team

The Blocked Domains 500

We’ve doubled the number of domains on which you can block your ads from appearing

Your time is precious, so we’re going to try to give you some important news about blocked domains in a mere 250 words.

Here’s the scoop: In your Sponsored Search account, you have the ability to block your ads from appearing on particular sites in our Sponsored Search network. When we initially launched this feature we provided the ability to block up to 250 sites per account. Now, we’re doubling that number to 500, so you’ll have additional control over where your traffic comes from.

OK, so why would you need to block a domain? Maybe you have concerns about the quality of the traffic it delivers (although our click protection system and pricing discounts help mitigate that risk), or you don’t want your ads to appear on a competitor’s site. Or perhaps the site sells products or services, or contains content, that is objectionable to you. Whatever the reason, you now have double the number of “circle slashes” that you can slap on undesirable sites.

How are we doing on our word count? Hmmm, 175; time to wrap up. You can add new blocked domains in your account by clicking “Accounts” under the “Administration” tab. Under the Account General Information panel, click “Submit Domains” in the Blocked Domains field. Then make like your favorite football team’s offensive line, and start blocking away.

For more info on blocked domains, visit our Help Center or our previous blog posts here or here. Whew, 243; we just made it. Start your blocking!

— Jeff Hecox

Determining Your Most Effective Bids

Too high? Too low? Learn to find the “sweet spot” with bids

This is an excerpt from Yahoo!’s Smart Start Guide, which is packed with helpful content to assist you in making your campaigns as effective as possible. Whether you’re an expert search marketer or just starting out, the tips from Yahoo!’s “Sharon Goodsense” offer practical search marketing insights. Download the Smart Start Guide.

Bidding can be a bit of a Goldilocks experience—your job is to find the bid that’s not too high, not too low, but just right for your business. Bidding too high can cause you to reach your daily spending limit after just a few clicks. Bid too low and you may not get ranked high enough in search results to receive the number of clicks you want. Before you set your bid, consider what you can afford to pay for a click. Remember that the bid you set is the maximum amount you will ever pay for a click. Your actual cost-per-click (CPC) will likely end up being less than your bid.

Do your homework before you bid
Goldilocks would’ve had a heck of an easier time finding the right chair to sit in if she had done a little homework beforehand. The same goes for you when it comes to bidding. Obviously, you want to get more customers to your site, but consider the action you want them to take when they’re at your site (and how much that action is worth to your business). You may want them to complete purchases or sign up for your newsletter. These actions are called conversions. The performance metric cost-per-acquisition (CPA) tells you how much a conversion costs, which is valuable when determining your bids.

To calculate your conversion rate, divide the number of clicks to your site that lead to a conversion by the total number of clicks to your site. For example, if 20 out of 1,000 searchers who clicked through to your site ended up converting, your conversion rate would be 2%.

It’s important to think about these different measurements and calculations, because all of them have an impact on your company’s ultimate return-on-investment.

Keep keywords and daily spending limits in mind
Think about your individual keywords and how much they are worth to you, as well as their conversion rates. Different keyword and ad combinations convert differently—you may want to bid higher for keywords that convert at a higher rate.

Your monthly budget is calculated by our systems as 30 times your account daily spending limit. Each day, when this spending limit is reached, your ads stop displaying online. When you determine your bids, it’s important to keep this in mind. If you set your bids too high, you may reach your account (or campaign) daily spending limit after too few clicks.

Use the forecasting tool to set bids that support your goals
You may want to use our forecasting tool to experiment with how increasing or decreasing a bid could affect your average rank in search results, the impressions and clicks your receive, and your cost-per-click. Play around with the slide bar or type in specific bid amounts. To find this handy tool, just go to either the Campaign Details page or the Ad Group Details page and click one of the bids next to a particular keyword or ad group. At the ad group level, you can set the bid for an entire ad group or set custom keywords bids.

Watching the Changes
Because the market and customer behavior changes, competitive bids change, too. Stay on top of these fluctuations by continually monitoring your click costs and bids. Remember: paying too much for clicks can mean you lose money, but paying too little can mean your ads get ranked so low that prospective customers overlook them.

In other words, it’s a balancing act. So, don’t be like Goldilocks—do your homework before you try that too-hot porridge.

— The Smart Start Team

Put Them to the Test

Ad testing lets you see which ads perform better

How do you know if your ads are working for you? It’s pretty simple — Sponsored Search’s ad testing feature compares the performance of two ads and tells you which one is doing better.

Many marketers know this function by its nickname, “A/B Testing,” since it compares “Ad A” to “Ad B.” Testing truly reveals the beauty of search marketing ads: You get real numbers on how many times the ad made an impression, resulted in a click, and led to a conversion. Try getting that from a TV or newspaper ad!

How it works
Ad testing happens automatically when you create more than one ad within an ad group. It’s true: You don’t have to do anything extra. The system smartly monitors the performance of your ads and displays the ones that achieve the highest click-through rate, helping to increase traffic to your web site. You can control this automatic display by adjusting the Optimize Ad Display setting in your account, as shown below:

How to do It
As you know, an ad is comprised of a title, description, display URL and destination URL. For each ad group, you can create up to 20 ads. After making sure that ad optimization is enabled, the system will start to do its work, rotating your ads for the keywords within each ad group. The system then tracks the performance of each ad and starts only displaying the one with the best results.

Since we’re discussing ad creation, this is also a good time to remind you to use your account’s insert keyword feature, which dynamically inserts the relevant search term into your ad’s title and/or description.

Why to use ad testing
Ad testing saves you time by automatically displaying your best-performing ads, which allows you to handle your other business rather than experimenting and guessing at which of your ads should run. Ad testing can also save you some cold hard cash: Because it displays the ads with higher click-through rates, your ads may have better ad quality (as indicated by the quality index), potentially bringing you higher ranked ads at a lower cost.

Tips
Some things to keep in mind:

• Set a performance goal. Try testing an ad that promotes free shipping against an ad that offers a 20% discount to see which draws more interest.
• Remember the “watched pot” theory—give your ads enough time to go to work. If you keep watch from they minute they start to run, you’ll make yourself crazy trying to see which one is hot. Remember, ad testing does the work so you don’t have to!
• The holidays are a perfect time to test your ads. Adjust your ads to promote seasonal items, such as home décor and gift ideas.
• Spot check: The ad that receives the most impressions will appear in the Most Displayed Ad box. This performance is based on a selected date range. Also, within the Ads tab of the Ad Details page, you can view performance and display information for all of your ads.
• Use what you learn. If you find certain offers really attract customers, start applying that strategy to the rest of your ads.

Ad testing puts the end to the old marketing adage, “I know half of our marketing budget is wasted, I just don’t know which half.” Now you’ll know!

— Kastle Waserman, Communications Manager

Measuring Search and Display for Success

Display ads can be combined with search if you have the right data

Have you ever stayed away from display advertising in favor of search ads because you believed that your display ads don’t perform well?  You’re not alone.

Some advertisers have shifted display marketing dollars toward search with the belief that search advertising is “more measurable” and that it provides a higher return-on-investment.

While we think there are lots of great reasons to invest in search advertising, we also believe that display ads can be powerful and effective in driving traffic to your site. So let’s take a closer look at two common beliefs about display ads.

Belief 1: Search ads are more measurable than display ads 
When it comes to measuring the performance of your search and display ads, the question shouldn’t be about whether one is more measurable than the other. The real problem is advertisers often don’t use the right metrics to measure the success and value of their display ads and search campaigns.

Specifically, many advertisers primarily use conversion percentage to measure the success of their display ads and search keywords. For example, if a display ad converts poorly (it has a low conversion percentage) then the advertiser typically lowers the budget for the ad, shifts the budget to another channel like search, or pulls the budget entirely.

The problem with only using the conversion metric method is that it is a “last click” metric. “Last click” means that the ad only gets credit for the last click the visitor made before they converted. For display ad and search keyword purposes, a last-click model doesn’t reveal the true value of the ad. For example, a display or search ad wouldn’t get the credit for driving conversions to other campaigns. This can be a major issue, as advertisers might end up cutting the budget on an effective display campaign that is driving additional conversions, brand awareness and increased visitor traffic to your web site.

Measuring assists 
If conversions aren’t enough, then what additional metrics should online advertisers be using to properly measure the success and value of search and display ads?

Enter the assist metric available in Yahoo! Full Analytics, which is available to many of our advertisers meeting certain criteria (contact our Customer Solutions team to determine if it is available in your account). Assists measure the total number of times that display ads or search keywords contribute to the conversion of another ad or keyword. Combined with conversion data, the assist reporting provides a full picture as to the performance of online campaigns. And you might find out that the display ad you were planning to drop was actually helping you the whole time.

Accessing the Assist Report from Yahoo! Full Analytics is easy. Just follow these steps:

1. Check to see if you have Full Analytics available in your account.
2. Add the Full Analytics tracking scripts to your landing page(s) and confirmation/thank-you page.
3. Add three special Yahoo! tracking parameters to the end of your display ad destination URL.

Belief 2: Search ads provide the highest return-on-investment
Which provides the highest return-on-investment, search or display ads?

It’s a trick question, actually—a combination of search and display ads returns the highest return-on-investment. We’ve reported in the past that, “when combined, search and display advertising deliver profoundly better results than when used independently.” The study that we sponsored with ComScore showed “a significant lift in onsite engagement and an increase in online and offline purchasing by consumers who are exposed to integrated campaigns that employ both types of online advertising.”

Don’t believe us? Third-party studies have shown that “users exposed to both search and display ads convert at a higher rate: an average of 22 percent better than search alone, and 400 percent better than display only.”

If data from these studies is accurate, you might be asking yourself, “OK, why aren’t more marketers doing both?” Once again, advertisers haven’t been using the right metrics. Advertisers must have access to metrics that tie together their search and display efforts to see how one affects the other. By using the assist data from Yahoo! Analytics, an advertiser can accurately measure this information.

Here’s how: Let’s say a visitor comes across one of your display ads one day and decides to click on it. He visits your site but decides not to make a purchase. A month later, that same visitor searches on Yahoo! using one of your search keywords, clicks on your ad, visits your site again, and this time makes a purchase. The result? Your display ad receives credit for an assist, while your search ad receives credit for the conversion.

To summarize: If you want to ensure that you are making the right search and display budgeting decisions, you need to make sure that you are using the right metrics. With Yahoo’s Full Analytics Assist Report, you can discover the true value of your online advertising.

— Matt Lillig, Yahoo! Analytics Team