The New World Of PPC Targeting
January 12, 2017
This post is part of the Hero Conf Los Angeles Speaker Blog Series. Brad Geddes will join 50+ PPC experts sharing their paid search and social expertise at the World’s Largest All-PPC Event, April 18-20 in Los Angeles, CA. Like what you read? Find out more about Hero Conf.
For years, the most commonly referred to stat for PPC was that average conversion rates were 2-4%. Of course, there are many exceptions to this rule, however, it was a generally accepted benchmark to work from in determining your marketing efforts and conversion data.
However, there are three problems with that stat:
- It’s old
- It’s based upon last click attribution
- It ignores the customer journey
As more steps of the customer journey have moved online and with the great shift to mobile, we shouldn’t be stuck in a last click, myopic view of our marketing.
The stat people should be thinking about these days is from Nielson.
Consumers visit websites at least 6 times, on average, in the purchase process.
Now, that 6 visits could be 1 visit to 6 sites or 3 visits to 2 different sites.
Let’s keep the math going. Let’s say you examine 4 days of data and see:
- Day 1: 100 visitors, 1 conversion
- Day 2: 75 people revisit your site, 2 conversions
- Day 3: 50 people revisit your site, 4 conversions
- Day 4: 25 people revisit your site, 2 conversions
What’s your conversion rate?
- Your conversion rate is: 3.6% (9 conversions on 250 visits)
- Your unique visitor conversion rate is: 9% (9 conversions on 100 unique visitors)
If you’re living in the old world of last click attribution and treating new and returning users the same; you have a 3.6% conversion rate. If you understand how the customer journey works and begin to market to these user behaviors differently, you not only have a 9% conversion rate, often it will increase even higher as you’ll know how to attract those users back to your website based upon their needs.
At a high level, what’s more valuable?
- A first time visitor
- A returning visitor
When we look at a single feature of audience targeting, RLSA (remarketing lists for search ads) and compare that to non-RLSA search spend; what we see is that:
- RLSAs make up a small percentage of your impressions
- RLSAs makes up a small percentage of your cost
- RLSAs make up a large percentage of your conversions
- The CPA difference (when bid modifiers are removed) is significantly less than non-audience members
It’s easy to see that previous visitors are worth a lot more than new visitors for many verticals.
We should no longer be thinking about the old, simplistic pathway of single click conversions.
We should be thinking about the new pathway:
And even this pathway is a very simplistic look as you can introduce new audiences based up many factors, such as people who signed up for your in-store loyalty program or visited your booth at a conference.
RLSA is just one feature among several available for audience targeting, and this isn’t even based upon the complex items you can do with audience targeting, it’s based upon last click attribution metrics.
So first ask yourself a simple question, how many visits does it take for a user to convert?
Here’s some industry data from Google and Nielsen:
We no longer have new users and returning users. What we have are audiences of users, such as:
- Website visitors
- Engaged website visitors
- Members of your loyalty program
- Users who buy 3x per year
- Users who haven’t bought in a year
- Shopping cart abandoners
- Recent converters
- Discount shoppers
- Users who abandoned a free trial
- Users in a free trial
- Users who frequently share your content
- and so many more
Audience targeting allows you to start bucketing users based upon website behavior, CRM data, demographic information, and other signals to determine how to reach those users as they continue through their purchase journey towards an eventual conversion.
This is the new world of paid search:
- Marketing to new users
- Examining user behavior and characteristics
- Grouping users into like behavior and characteristics
- Marketing to each individual group
The more complex your user journey paths, the more you should be leveraging audience targeting. Once you have groups of like users, known as audiences; here just a few things you can do with that data:
- Adjust bids
- Exclude users
- Change ads
- Expand marketing presence
- Marketing to the customer journey
- Supporting other channels (such as TV or email)
- Customer retention
- Customer loyalty
In paid search, you can create and market to audiences in several ways:
- Website usage
- 3rd party data
- CRM/email data
- Similar audiences to 1st party data (CRM or website)
- In-market audiences
The sheer amount of options can be overwhelming. You can market to someone who signed up for your in-store loyalty program completely differently than someone who abandoned your online shopping cart. You can exclude current customers from seeing your ads when they search for your brand plus words like login; but then change your ads if that same user searched for your brand plus a complimentary product you offer.
To start thinking about audience targeting, just take some time to think through these steps:
- Understand your audience targeting & marketing options so you know what’s possible
- Graph your current customer journey
- Determine your strengths & weaknesses
- Graph potential customer journeys
- Determine your user characteristics and behaviors along the customer journey steps
- Lay out your goals for new, similar, existing, and previous customers
- Examine your other marketing channels and determine how to use audiences to enhance those channels
- Use all that information to create an audience targeting strategy
While that’s complex, you can start very simple. Just look at where user’s abandon your conversion process, examine the weak points, and start marketing to those users differently than new users. The complexity is up to you – however, to stay competitive in the new world of PPC – you must use audience targeting.
It’s time to throw out all your old PPC rules from the last decade. The word ‘audiences’ is no longer a word that should be used in just social, display, or TV marketing. Audience targeting allows for personalized marketing to like groups of users. If you’re still living in a 2-4% conversion world – your behind, and going to keep losing market share.
The average person will make 6 website visits in their purchase process. You’re might be there for the first visit. However, can you be found on the important visit – when they are actually ready to convert on a later visit?
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