2011 holiday guide_us

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The Online Marketer’s Guide for the Holidays

Ten Tips for a Successful 2011


Copyright © 2011 Marin Software, Inc. All rights reserved. 2

Introduction

The holiday shopping season is growing larger and more important for online advertisers with each passing year. Consumers spent approximately $32.6 Billion online during the 2010 holiday season, representing an increase of 12% over 2009. While the overall picture shows continued growth in holiday spending, this trend also underscores a challenge for marketers -- competition for paid search clicks is getting more intense. Search marketers going into the holiday season should have a plan for success, but retain the ability to stay flexible in the face of changing conditions.

Broadly speaking, this white paper will help put the 2010 holiday season in context and high-light the relevant best practices for the 2011 holiday season. Our analysis and recommenda-tions are built upon our experience in working with over 1000 advertisers who invest more than $2.1 Billion a year on search, social and display.

To keep findings relevant across industries and budgets, we normalized the data and charts to show proportional versus actual values. Lastly, as with any benchmarking report, marketers should interpret our recommendations and analysis with an eye to their historical performance and 2011 objectives.

Search Marketing Trends for the 2010 Holiday Season

Figure 1: Overall Search Volumes for the 2010 Holiday Season (Shopping Sector)

The above chart from Google Insights for Search shows how retail search volumes changed during the 2010 Holiday Season. Compared to their October baseline, search volumes rose by roughly 40% in the days leading up to December 24th followed by a rapid decline over the next few days. Also evident from the above chart is that November saw the greatest spikes in search volume (+125%) for the entire season.

During this time, we saw a steady escalation in paid search spend resulting from increased search volumes and higher keyword prices. But, as the next chart shows, the higher costs were more than offset by strong gains in revenue. On a longitudinal or same-store-sales basis, Marin’s retail customers brought in 52% more revenue in 2010 compared to 2009.



Figure 2: Paid Search Spend and Revenue Trends (2010 Holiday Season)

While the above chart indicates how spend and revenue numbers changed at a high level, it doesn’t tell us how or why. To better understand the underlying trends, we tracked the following paid-search metrics through the fourth quarter:

•Impressions

•Click-Through Rate (CTR)

•Revenue per Click (RPC)

•Cost per Click (CPC)

Figure 3: 2010 Holiday Season – Key Paid Search Performance Metrics

As the above chart shows, impressions jumped by ~20% during the holiday season. At the same time, we saw click through rates increase by 32% and revenue per click jump by 28%. And while cost per click did increase by 12%, the improvements in click through rate and revenue per click ensured that paid search continued to drive strong performance.



Key Dates for your Campaign Calendar

Is Black Friday the biggest online shopping day of the season? What about Cyber Monday? As a search marketer, you have to prepare for peaks and valleys during the holiday season. To better understand key dates and consumption trends, we examined how conversion volumes changed throughout the holiday season.

Figure 4: Using Conversion Volumes to Identify Key Dates

As evidenced by the above chart, the holiday period shows some clear day-specific trends. Search Marketers will likely see a similar pattern emerge in 2011. Relevant findings from 2010 data are outlined below:

1. Early Shopping – While December was the strongest month for holiday shopping in 2009, in 2010 November delivered 4 of the top 5 shopping days by conversion volume, suggest-ing shoppers may turn out even earlier than expected for the holidays this year.

Figure 5: Top 5 Days by Conversion Volume



2. Cyber Monday – While retailers have been marketing Black Friday for much longer, Cyber Monday drove higher online sales volumes during the 2010 holiday season. Our data sug-gests that search marketers rang up more conversions on Cyber Monday than any other day last year.

3. Thanksgiving Day – Even though Thanksgiving has traditionally been associated with all things food and family, it has started to become an important day for eCommerce. Across our data set, Thanksgiving Day saw the highest click through rates of the entire holiday season, implying that shoppers are highly engaged, and perhaps starting their Black Friday shopping a little earlier.

Getting Ready for the Holiday Season – Ten Tips for 2011

Now that we’ve looked at how 2010 shaped up, it’s time to start getting ready for 2011. To help prepare for the upcoming holiday season, we evaluated several best practices from our client base, with the Top 10 tips summarized below:

1. Prepare Campaigns in Advance: Once the holidays begin, a search marketer’s time is often consumed by analysis and reporting on results, reacting to changes in performance, and testing creative to maximize returns. That leaves little time for launching new campaigns that are tuned to key promotions during the holidays. Make sure to build campaigns to align with your promotional calendar in advance to ensure a timely launch across all of your products. By scheduling these campaigns for launch within your paid search application, you can avoid late night efforts to push post-Thanksgiving campaigns during off-hours.

2. Create a Boost Schedule: With purchasing behavior increasing during the holiday season, creating a “boost schedule” is a smart way to plan your bidding strategy in advance of shifts in consumer behavior. A boost schedule is a roadmap that helps you determine when and how much to increase your bids, enabling you to take advantage of higher conversion rates during the holidays.

To develop our boost schedule, we first set a baseline for revenue per click (RPC) on Oc-tober 1st. We then estimated how much bids should be increased by examining how RPC changed through the holiday season. The following schematic shows an example boost schedule. Using our sample data, we calculated average bid boosts for several time periods during the holiday season.

We recommend that you create and apply your own boost schedule using your 2010 RPC trends. You can fine tune your boost estimates by monitoring RPC changes on a daily basis. And lastly, don’t forget to reset your bids to the baseline after your ground shipping cut-off has expired.



Figure 6: Developing a Boost Schedule by mapping changes in Revenue per Click

3. Adjust Daily Budgets and Max Bids: Given higher search volumes and more clicks, your paid search costs will steadily increase from October through December. As a result, make sure to revise your Daily Budgets to reflect higher costs. Keyword prices also generally rise during the holidays for key terms, necessitating that you increase your Max Bids for some campaigns. Revisit your 2010 spend levels to determine a starting point for your 2011 Daily Budget and Max Bids.

4. Pay Attention to Negative Keywords: With search volumes rising during the holiday season, it’s important to ensure that you are filtering out unwanted impressions and maximizing your CTR. Not only will this reduce the number of unprofitable clicks in your campaign, but also, it will improve your Quality Score and reduce your CPC. In preparation for the holidays, make a list of negative keywords for each SKU in your product catalog, and pe-riodically check raw search queries to identify new negative keywords. Ideally, your paid search solution should help you with negative keyword discovery and adding new negative keywords from raw search queries.

5. Promote Special Offers: Free shipping, sales and coupons are among the most influential factors for holiday shoppers. To reach value-shoppers, try to highlight discounts, coupons or low prices directly in your creative. If time permits, conduct A|B testing to compare and fine tune your creative (e.g. by testing value vs. brand creative). Additionally, try creating a sense of urgency by introducing time-sensitive offers for discounts and free shipping.



6. Manage Bids to Inventory: Cost-cutting measures in recent years have resulted in leaner inventories for many retailers, making it more important than ever to manage to changing inventory levels. Search marketers should monitor inventory levels on a regular basis and pause relevant keywords when approaching a stock-out scenario. Our research also indi-cates that items that have a limited selection available experience a drop in conversion rates. Set alerts to identify dramatic drops in conversion rates which would indicate that customers are finding limited selection. Dampening bids or pausing keywords when you reach a low inventory or limited selection situation will ensure that you don’t pay for costly clicks that don’t convert.

7. Test your Attribution Model: Consumers looking for a specialized product often conduct ex-tensive research prior to making a purchase or converting. Having coverage across a broad range of publishers can expand your reach and generate more sales, but it also increases your management overhead. And if conversion tracking systems aren’t set up correctly, inaccurate revenue attribution can lead to wasted ad spend. Before you start plugging in new publishers, thoroughly test your tracking systems to ensure that online revenue and conversions are being attributed correctly.

8. Develop a Mobile Strategy: Consumers are increasingly using mobile phones to find deals and compare prices on the go. A comprehensive mobile strategy should start by separat-ing out mobile campaigns from desktop or tablet oriented campaigns. Creating separate mobile campaigns can confer several advantages. For one, ad position is much more im-portant in mobile devices where real estate is limited. To increase mobile response rates, marketers can leverage position-based bidding to ensure that ads are showing above the fold. Another benefit of having separate campaigns is that you can show location exten-sions within the ad creative. Quickly pointing mobile shoppers to your nearest location can be the difference between buyers walking into your store instead of your competitor’s just around the corner.

Using mobile focused

ad extensions such as

click-to-call numbers

and expandable maps



9. Use YouTube to Extend Reach: YouTube isn’t just the world’s largest digital video property; it’s also the Internet’s second largest search engine. In fact, YouTube garners 100 Mil-lion unique visitors per month in the US alone, and another 400 Million from around the world. Promoted Videos, YouTube’s equivalent of Google Ads, gives advertisers a unique way to promote their products to an audience that is incremental to paid-search and to users that are more engaged. These factors make YouTube a highly attractive advertising channel. Therefore, online marketers who are planning holiday campaigns for 2011 should leverage it for the added audience reach and the value of social engagement at-scale for

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their brand.

10. Amplify your Message with Social Media: Research from eMarketer suggests that a major-ity of social consumers are looking for special offers and discounts, followed by a significant percentage seeking gift ideas for friends and family. By using techniques like Facebook fan-only specials or Twitter-coupons, you’ll ensure that your social initiatives stay focused on measurable, revenue generating activities. Additionally, by combining fan-only special offers with Facebook’s



Sponsored Stories (for targeting friends of fans), marketers can more effectively leverage deal-seeking social media users to amplify their message and grow their overall fan base.

Conclusion

With this guide, our primary objective was to help you prepare for the upcoming holiday season. We started by looking at data from last year to help put the 2010 holiday season in context. Then we put forward a series of ten recommendations, covering both search and social, to help prepare for a successful holiday season.

Our last and final recommendation is to record your 2011 holiday season statistics and results as soon as possible. Capturing that data sooner rather than later will be much easier, and this year’s campaign reports will be an invaluable asset during next year’s planning process.

As a company focused on the success of online marketers, we hope you found this information relevant, timely and useful. If you enjoyed this holiday guide, please tweet us: @marinsoftware.

About Marin Software

Marin Software is a leading provider of online advertising management solutions, offering an integrated platform for managing search, display, and social marketing. The company provides solutions for advertisers and agencies of all sizes, enabling them to improve financial perfor-mance, save time, and make better decisions. Marin Enterprise, the company’s flagship product, addresses the needs of online marketers spending $100,000 per month and greater on biddable media. Marin Professional delivers the same power and ease of use as Marin Enterprise, through an application designed for marketers spending less than $100,000 per month on paid search. Headquartered in San Francisco, with offices worldwide, Marin’s technology powers marketing campaigns for over 1000 customers managing more than $2.1 billion of annualized ad spend in more than 160 countries. For more information, please visit: http://www.marinsoftware.com

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© 2011 Marin Software. All rights reserved. Other trademarks belong to their respective owners.

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