When you've got a successful Ecommerce store up and running there's a big question that almost every business eventually reaches: where and how should I spend my marketing budget to grow my store as quickly as possible? It can be a difficult question to answer, especially seeing as the digital marketing landscape is changing all the time. Strategies that worked yesterday may no longer be valid today, and the platforms you are using today may be put to waste by new platforms launching tomorrow.
So today we're going to talk about just this issue. I'll show you what's working for Ecommerce PPC campaigns right now, which channels you should consider, and which channels are best for different circumstances. I'll also talk about where each channel fits into the digital marketing funnel.
Paid Search
I've put this one first and with good reason. While it probably doesn't have the highest rate of success of all the PPC channels available for Ecommerce (that accolade might go to Retargeting), it does have one of the highest rates of success and unlike Retargeting it can slot in higher up on the marketing funnel and drive more new customers and volume.
Let's look again at our classic AIDA marketing funnel:
Paid Search can aid in pretty much every stage of this funnel, however it is very weak at the Awareness stage, stronger at the Interest phase and it really peaks in effectiveness at the Decision and Action stages.
With Paid Search, CPCs can be quite high as all your competitors have probably also come to the realisation that they need to be doing paid search, thus they bid up the prices of the clicks. However, compared to other PPC channels, conversion rates are also pretty high, so there's a bit of a balancing act to be had.
Ultimately, in Paid Search you aren't really competing on CPCs with your competitors, you are competing on Customer Value and Conversion Rates. Cost Per Clicks are set by an auction process, and competitors will only bid what they can afford to pay (unless they are planning on wasting their marketing budget and going out of business). What your competitors can afford to bid for each click is in turn determined by how much a customer is worth to them, and how many of those clicks they can convert into customers.
So, when deciding whether or not to do Paid Search and considering your competition, don't think "oh the CPCs in my industry look really high, I shouldn't do Paid Search". Instead think along the lines of "can I convert clicks to customers as well as, or better than my competitors? Can I extract as much, or more, value out of customers as my average competitor?" If the answer is yes to those questions, then you should be doing Paid Search already and you shouldn't worry about the CPCs in the market.
Who is it for?
Paid Search is for pretty much any advertiser who has a thing to sell that people might be searching for, and whose website conversion rate and customer value is at least close to par with the competition, if not better. So, use a keyword tool to determine whether or not there is existing search traffic for your kinds of products. If there is, are there competitors already bidding on Search for those keywords? If yes, don't be put off, instead assess your website vs theirs. Do you think your website conversion rate and the value of a customer to you is at least close to as good as your average competitor? If yes, then get on Paid Search, no matter what the predicted CPCs are.
Who is it NOT for?
Paid Search is probably NOT for you if you have a totally brand new thing that no one has heard of before. Let's say you just invented the world's first ever Popplespock. The only problem you have now is to make people aware of their need for Popplespocks, and to explain to people what a Popplespock actually is (hey, I don't even know what one is and I just invented the word, so please could you explain it to me while you are at it?).
In this case, Paid Search is probably not for you. For Paid Search to work, you need people to be searching for your thing, and if no one ever heard of your thing before it doesn't matter how awesome it is, Paid Search won't work for you because there will be no one searching for the thing and thus no one to target with ads.
Also, Paid Search might not be for you yet if your website is clearly very poor compared to the average competitor's. Don't compare yourself to the BEST competitor, compare yourself to the average competitor that is already bidding on Adwords. If you think your website has a long way to go before you even get to close to as good as the average advertiser on Adwords, then you might want to work on improving your website before you take the dive on Paid Search.
Where does it fit in the funnel?
Paid Search fits nicely into the bottom sections of the AIDA marketing funnel, Decision and Action. When people are in the process of deciding between different options to solve their problem, they often do that be searching on Google. When they are ready to act, the last thing they often do is search on Google for the brand or site name they want, then click the first thing that pops up to navigate to the site and make the purchase.
Shopping / Product Listing Ads (PLAs)
In terms of the AIDA marketing funnel, Shopping Ads (AKA PLAs) fit right in at the same spot as Paid Search, as you'd expect seeing as they also live on the same Search Engine Results Pages (SERPs). So, there's not much else to be said there.
Shopping Ads are, however, super powerful for Ecommerce advertisers and if you are not using them yet, you (almost certainly) should be. Shopping ads give you a visual image result on the SERPs, along with a title, price, your store name, and a few other optional components.
Google loves showing Shopping ads on relevant Ecommerce-related search terms, and when it does it often likes to stick those ads right there at the top of the SERPs so they are the first thing the searcher sees. They say a picture is worth a thousand words, so the huge advantage that Shopping ads provide is that they give you an ad slot on Google with over a thousand words' worth of text. You can communicate so much more through your product image than you could with the few lines of text that you get on a standard Paid Search ad, so why wouldn't you want to take advantage of that?
I'm doing Shopping already, should I bother with Paid Search?
Sometimes I get clients asking me if they should even bother with Paid Search ads, seeing as they have Shopping ads already covered. This is such a common question with Ecommerce advertisers these days that it bears special mention here.
There's a few things you need to bear in mind when Google's SERPs. Firstly, they are very dynamic. Google is serving different-looking SERPs to different users based on its user data plus its desire to split-test and craft ever-better SERPs. When you search for your products, you might see Shopping ads at the top, with no other ads underneath. But, this probably doesn't happen on every search in your niche every time. Sometimes, Google might serve Paid Search ads above the Shopping ads. Sometimes, it might serve JUST paid search ads, with no Shopping ads at all. And, sometimes, it might serve Paid Search ads underneath the Shopping ads.
When both Shopping and Search ads are shown at the same time, some proportion of those users will be clicking on Search ads, not Shopping. If they never clicked Search ads, Google wouldn't be showing Search ads on those queries (Google is smart and does not want to waste space on its SERPs). Because of this and because of the fact that sometimes Google may show ONLY Search ads, if you just set up Shopping ads you may get good results performance-wise but you're probably not maximising the amount of revenue and profit you could be achieving with your Adwords campaign. You will be missing out on some of the sales you could have had if you had also set up Search.
Another issue with only having Shopping ads is that you can only show ads on keywords that are in your feed, and there is only so much space for keywords in your feed. Google prioritises the Product Titles in your Shopping feed, and what if there are hundreds of keywords you want to advertise on for that one product? You can't fit hundreds of keywords into your Product Titles, but you can easily fit hundreds and thousands of keywords into a growing Paid Search campaign.
Who is it for?
Shopping is a super price-competitive field. Google will usually show the cheapest items first, and if your products are more expensive than the competitions' you can expect to get less traffic from Google. Because of this, I'd say Shopping ads are for pretty much any advertiser whose products are not much more expensive than the competitions'. Even if your products are more expensive, still give Shopping a try, it might work out albeit at lower traffic levels than you might have got if your prices had been lower. The only case where I'd be hesitant to even suggest trying Shopping is when you have very high prices for luxury items like luxury watches, jewellery, designer furniture and clothes, etc.
Who is it NOT for?
Luxury advertisers whose products cost more than 10x the competitions'. In these cases, Google's probably not going to show your ad very much on Shopping and when it does, you'll probably get much lower click and conversion rates compared to your competitors.
Where does it fit in the funnel?
As mentioned, Shopping ads fit in a similar spot in the funnel as Paid Search. They work best towards the bottom of the funnel, at the Decision and Action phases.
Paid Social
With Paid Social these days the 800 pound gorilla in the room is, as you know... Snapchat. Nah, just kidding, it's Facebook, of course! Facebook currently has around 2.20 billion monthly active users and over the past years they have constantly been innovating and improving their ad targeting and creative options. For most Ecommerce stores when you are talking about Paid Social, the first thing you must consider is Facebook Ads (and, by extension, Instagram Ads, which are owned by Facebook and managed through the same platform).
One of the advantages of Facebook Ads is its ability to target "full funnel". This means that it can be used to serve ads to people at every stage of the AIDA funnel. At the Awareness stage, you could target completely new users (who might be targeted based on demographic data or their stated likes/interests) with enticing video ad creative that gets them familiar with your brand in the first place.
Once those users engage with your ad in any way, by clicking or liking etc, you can then serve them different ads that target people moving through the Interest and Decision phase. At the Interest phase you will want to give them more informational ads, extolling the virtues and benefits of your product. At the Decision phase this is where your retargeted Facebook ads will start to shine, and ad creative will move more to product-and-offer-focused ads.
Who is it for?
Facebook ads take some testing to get to work so you need to come equipped with sufficient marketing budget and the right mindset. If your budgets are very tight and the life of your business depends on driving profitable new traffic right away, don't start with Facebook. Test out Facebook if you are already a successful business that's not going to die if the next marketing test does not work.
Facebook can be quite effective if you have a visually unique, novel product that stands out in its images of videos. If your product is sufficiently cool, your product images and videos might do most of the work of getting your FB ads campaign to work, without you having to think as hard about creative or targeting strategy.
Facebook is also a good top-of-funnel Awareness-driver for novel-looking products. If you are the advertiser trying to spread the word about you cool-looking Popplespocks that no one has heard of before, some Awareness ads on Facebook might be your best bet.
Who is it NOT for?
Anyone with very tight budgets and/or boring or generic products. If you resell the same brand of office paperclips that hundreds of other sellers also supply, then maybe you are not going to make your advertising fortunes with FB ads. You should also avoid Facebook if you don't have the time or motivation to develop a full-funnel ad strategy, as Facebook works best when you have multiple campaigns and targeting types that speak to users at separate stages of their online customer journey.
Where does it fit in the funnel?
Facebook (and other paid social ads platforms) generally do a much better job of slotting into the upper parts of the AIDA funnel, the Awareness part, than something like Paid Search. This is because you can "push" your ads into users feeds, and thus push your products into their awareness, whether or not they were previously interested in or aware of your products. If you do this with the right targeting and creative, this will spark users interest and help to push them into the later stages of your funnel.
Thanks to the plethora of targeting options available with Facebook Ads, they can fit pretty comfortably at every stage of your AIDA funnel. Different targeting and creative will be used at different stages of the funnel. For example, video ads targeting people interested in your industry might be used as your Awareness ads. Later down the line, when people are deciding on a solution, retargeted Facebook ads come in to play to help drive users towards the final action.
Retargeting
Retargeting is such an effective strategy, it deserves its own section, separated out from the rest of the targeting options available on the Google Display Network (GDN) and other networks.
As I'm sure you know, retargeting allows you to serve ads to users who recently browsed your site. You can segment visitor audiences based on recency and on which pages or products they viewed. Because you are only targeting people who have demonstrated interest (by visiting your site) in your product before, this is a targeting method that works much more effectively than normal, "cold", banner ad targeting, at least when the goal is to get sales quickly.
Who is it for?
Almost anyone. Barring the one type of example below where retargeting might not work, I'd suggest that every Ecommerce store that is advertising online be running retargeting ads. They are just that good. Once you've already done the hard work of getting new fresh traffic to your site, don't you want to maximise your chances of that traffic converting to a sale? This is exactly how retargeting fits in to your overall digital marketing mix. It synergises with your other traffic channels, it doesn't drive fresh new traffic on its own but by keeping your brand in front of the consumers' eyes throughout their online customer journey, it increases the overall conversion rate of your existing site traffic.
Who is it NOT for?
Unlike other forms of PPC, with retargeting your audience size is limited to those who have already been to your site. So let's say your site gets 100K visitors per month. In that case, 100K visitors is the maximum audience size you could target. Unlike "cold" display, if you are retargeting 100K visitors and it's working, you can't suddenly decide to up the budget and target 200K people tomorrow to scale things up. That's just not the nature of how retargeting works.
This leads to two consequences:
- Retargeting has limited scalability
- It might not be worthwhile to set up for advertisers with very few site visitors.
Technically, it can't hurt much to set up retargeting even if your site is small. You might just not see very many clicks and few, if any, sales. Nevertheless, even for very small sites, retargeting may bring in the occasional sale. The only thing to consider here is the tradeoff between your time (required to set it up) and the value of the few sales retargeting may bring in. If your site gets only a few thousand visitors per month, and if one new sale is not worth a huge amount to you, then while retargeting could technically be profitable (you won't spend much and you might make a sale every now and then) it might not be worth spending your time on the setup.
Where does it fit in the funnel?
Retargeting fits in right at the bottom of the AIDA marketing funnel. It only activates after someone has been to your site, so they are definitely past the Awareness phase and most likely past the Interest phase too. Retargeting is a bottom funnel channel, targeting people right where the money is - in the Decision and Action stages.
Display / Banner Ads
OK now we are moving towards some of the channels I am usually much more wary to recommend for Ecommerce clients. The reasons why should become apparent soon.
First, let's start with the good parts about Display ads. In case you are not aware, Display (AKA banner) ads are visual/image based ads that show up on third party websites, often bought through an ad exchange or network like Google Display Network (GDN). They look like this:
The good thing about Display is that it can drive people into the top of your funnel, at the Awareness stage. When you have a new, cool, thing that everyone will soon want but no-one has heard of yet, then you need to drive Awareness and Display, as a "push" advertising medium, can work for this. Also, related to this benefit, as a push ad medium Display also has a lot of scalability. You are not limited by the amount of people already searching for your product, or by the size of your current site audience, with Display you can access huge audiences if you have the budget and appetite to do so.
So that's the good, what about the bad? Well, the bad stems from the age-old problem of "banner blindness" and related challenges. Users on the web these days are getting increasingly hostile towards advertising, and Display with its large formats that interrupt the users' web experience and make some websites load slow and look ugly is taking the brunt of that hostility. If users aren't actively blocking display ads through the use of ad blockers, they are just plain old ignoring them (AKA "banner blindness").
All of this results in some pretty low CTRs in Display. If you could expect a 3% CTR on your Paid Search ads (depends on industry but that's a rough idea of average CTRs) then in display you might be lucky to get as high as 0.20% CTR. That's right, CTRs on Display are more than 10x smaller than they are on Search.
You might ask, well who cares about the low CTRs if you are paying per click and if the clicks are converting profitably? And therein lies another issue. Not only are CTRs lower in Display but also conversion rates are lower than Paid Search too. Which makes sense, if you think about it. In the above screengrab I showed a display ad for Helpscout - a rather nifty email customer service app. That ad showed up while I was browsing an article about supermassive black holes. In this case, I am not likely to buy as I am not in "buy mode", I was actually in "I'm procrastinating on writing this article mode and ooooh look an article about science, yay!" Now imagine I saw a paid search ad for the same company. The paid search ad would only show up when I am searching for something like "customer email app". I would thus be seeing the ad right when I actually want to see it, and we thus expect the latter ad to get a much higher conversion rate as well as CTR.
So, Display ads are scalable but often "don't work" for the above reasons, if by "work" you mean "make more money than they spend when measuring success based on a last-click-wins attribution model." And that's the thing to note about Display. Most modern web advertising is measured based on "last click wins" (e.g. whichever ad was the last one to be clicked is awarded 100% of the sale) and is given a goal of driving more sales than it cost in revenue. This is problematic for (non-retargeted) Display because it rarely drives the last click before the sale, and it's more suited to raising awareness rather than driving the final action. In our AIDA marketing funnel parlance, we would say it is fitting in to the top of the AIDA funnel, at the Awareness phase.
Who is it for?
Display is less likely to demonstrate an immediately positive ROI than something like Paid Search due to the nature of web browsers and the way digital ad campaigns are usually tracked these days (the way every analytics platform tracks things by default, an ad only "wins" the sale if it was the last thing clicked. If your ad was viewed but not clicked and that view led to a sale later on via a different channel, that ad usually gets 0 value assigned to it). So, Display is really only for advertisers with sufficient budget and savvy to do an Awareness-focused campaign.
Use Display if you've maxed out your lower hanging fruit PPC channels and you are now looking for a scalable (but riskier) channel to help you reach the next target. Also, only use Display if you are savvy enough to be able to value digital ad channels that were not necessarily the last one to be clicked before the final sale.
Who is it NOT for?
If you have very tight marketing budgets and you don'd fully understand the concepts of the marketing funnel, customer journey, and attribution, then don't do display. And, if you are in that camp, you might want to brush up on these important concepts here.
Also, don't spend your time on Display if you haven't yet done Paid Search, Shopping and Social and you fit the bill for those channels to work for you. Those channels are all lower hanging fruit than Display. Display is more a "icing on the cake" kind of channel
Where does it fit in the funnel?
As a "push" ad format, Display tends to shine at the top of the AIDA funnel, at the Awareness stage.
Video Ads
When I talk about Video Ads I'm going to be talking especially with YouTube ads in mind, as this is the first and largest video site that most people think of when considering a video ads campaign. The pros and cons of video ads are very similar to Display.
Pros:
- Great for driving initial awareness
- Very scalable
- "Push" advertising format - your audience is not restricted in size by your current site visitors or number of searchers
Cons:
- Rarely drives the last click
- Difficult to make it "work" (when your goal is maximising CPA/ROAS on a last-click basis)
- Low CTR, low conversion rate
So really, video ads are very much a large, important sub-section of Display ads, with a few key differences. The first of these differences is that video ads can be impossible (or, very difficult) to ignore. If you are about to watch a video on YouTube and a pre-roll video ad decides to play, it's impossible to entirely ignore it. The very worst case scenario for the advertiser is that the user is going to notice only a little bit of the ad, before they skip it or close it. The best case scenario is that they are going to watch the whole ad, which is made even more likely with the rising occurrence of unskippable ads. Unlike image Display ads, videos can't easily be blocked or ignored, and if a picture is a thousand words then a video is worth... a billion?
So, while videos also fit in at the top of the AIDA funnel, driving users through the Awareness stage, they are much more effective at this than Display ads. However, while the Awareness advantage of Video is more pronounced than Display, so are its disadvantages. CTRs on the average video ad are even lower than Display, much lower in some cases, and conversion rates can be even lower still. For example, a recent study conducted by Strike Social showed video ad CTRs in some industries were as low as 0.001% (yes that is one thousandth of one percent, so to get one click you need to show 100,000 impressions). So, while Display ads were more than 10x LESS effective (in terms of CTR) than Paid Search, video ads can be around 200x less effective even than Display!
Once again, this makes Video ads look very much like a format that "doesn't work". However, it all comes down to how you define "work". People probably won't click on your Video ad and they probably won't buy based of of it. But they will find it hard not to be at least somewhat aware of your product afterwards and with a good, full-funnel, advertising strategy you can accompany those Awareness-stage users through your AIDA funnel right up until the point where they do convert.
Who is it for?
I normally only recommend Video Ads for companies that:
- Have a big budget for testing
- Are already maxing out their return on lower-funnel advertising channels like Paid Search
- Have a very good understanding of concepts like the AIDA funnel and attribution
- Do not want to measure the success of their video ads campaign based on "last click wins", "must drive more direct revenue than ad cost" results.
Who is it NOT for?
- Smaller advertisers
- Anyone who hasn't tackled lower hanging fruit like Paid Search or Retargeting yet
- Anyone who only wants to measure based on "last click wins"
- Anyone who must drive more direct revenue from every ad channel and does not value getting users into the top, Awareness stage of their funnel
Where in the AIDA funnel do they fit in?
Video ads fit right into the top of the funnel, being most effective at driving users into the top Awareness stage of the AIDA funnel.
Conclusion
Each available channel, when it comes to Ecommerce PPC advertising, has a different place in the marketing mix and depending on your circumstances, you'll want to use different selections in your mix. Shopping, Paid Search and Retargeting probably have the highest rates of applicability across all Ecommerce industries, however their applicability is not 100% and you shouldn't ignore that 800 pound gorilla, Facebook. Display and Video ads are more like "icing on the cake" channels, and I actually rarely suggest them to clients as mot Ecommerce brands I deal with are better off focusing on some mixture of the other channels discussed here.