Analyzing PPC Verticals: Computer and Consumer Electronics

This week Matt Umbro (@Matt_Umbro) came up with a new concept surrounding specific verticals in PPC. Today’s question set is titled “Analyzing PPC Verticals: Computer & Consumer Electronics.” The following is the transcribed Streamcap from the live chat:

Q1: What makes the Computers & Consumer Electronics vertical so competitive?

  • Amazon. You’re not going to get the buying advantages or conversion rates that they have. – Steve Gibson (@stevegibsonppc)
  • Product variety/overlap, multi-function features, ROAS, high price points, low margins. – Lisa Sanner (@LisaSanner)
  • Lots of competition, MAP pricing, high cost per clicks with low margins. – Matt Umbro
  • People advertising there generally have a better grasp of what they’re doing. – Timothy Jensen (@timothyjjensen)
  • Nor are you likely to earn as much per customer (lifetime value). – Steve Gibson
  • Digital marketing is so clearly the “right channel” for digital products. – Amy Middleton (@amyxmiddleton)
  • Because there is so much equipment & the sellers market is so fragmented with many middlemen. Tons of noise for an SEM auction. – Ira Kates (@IraKates)
  • I find more so in this industry than any others that it’s so commoditized. Often times I ask clients how they stand out but aside from “better customer service,” there really isn’t a great answer. – Matt Umbro

Q2: What are some strategies you have used to combat MAP (minimum advertised price) pricing?

  • That’s where “bonus” things like ad-ext use, great Shopping feeds/strategy, Trusted Stores, etc really helps set apart. – Kirk Williams (@PPCKirk)
    • Good point, also free shipping is good especially for items with higher costs. – Matt Umbro
  • Different vertical for me, but different CTA text testing seems to be even more important with MAP products.  This is where things get tough fast, since MAP policies often have different restrictions. So a MAP strategy for one manufacturer might not be allowed by another. – Kirk Williams
  • If you can, offer a free gift with purchase. The gift could be something small, but again, helps you stand out. – Matt Umbro
  • MAP Pricing can potentially affect campaigns’ reach, incorporating paralel features (free shipping/discounts) or incentives. – Juan Restrepo (@JUANRRESTREPO)
  • A bonus. Usually, for a hard product, a “soft” bonus works best. But a related product could work, too. – Steve Gibson
  • Kind of already stated but constantly test the value or WHY message. Just appearing better than others will make a difference. – Joe M. (@GoldenEagle06)
  • That is where free shipping, “bonuses” etc come into play. It’s funny how free shipping can sometimes allow you to charge more. – Bryant Garvin

Q3: In general, what have you found to be the range of cost per clicks within this vertical?

  • So here’s the tough part about this question, even at the specific product level, CPCs needed to compete don’t necessarily justify the margin of sales. In other words, could end up spending more to get click than cost of goods. – Matt Umbro
    • Agreed, eretailers that dont taking into account cost of goods sold with CPC will soon find out ROAS santa isnt real. – Chris Haleua (@chrishaleua)
    • I could see this especially with accessories. – Kirk Williams
      • Agreed, especially when going up against Amazon, Best Buy, etc. – Matt Umbro
        • Though accessories are GREAT things for remarketing to converted visitors. – Kirk Williams
  • Isn’t that where LTV (lifetime value) comes in? Acquire cust at a loss, retain them over long haul. – Melissa Mackey (@Mel66)
    • Valid point, I guess it depends on effectiveness of overall marketing strategy (ie: email, retargeting etc). If you are going to keep reaching out to these consumers it’s good for LTV. – Matt Umbro
      • LTV could justify some short term margin loss, but only if we are disciplined in identifying high value segments. – Chris Haleua
  • I’ve read Amazon lose money on first sale, could end up spending more to get click than cost of goods. – Steve Gibson
  • CPC tends to be a very industry sensitive metric. Computer electronics should be around $4-$8. Brands do have the upper hand. Spend is also very dependent upon ROI, which would drive large budgets to these products. – Juan Restrepo
  • From the B2B side, CPCs tend to be extremely expensive (especially for IT/Software products/services). – Matt Umbro
    • Yes. $30+. – Melissa Mackey
      • And they always have poor quality scores no matter what you do! – Matt Umbro
        • Hate that! But if you’re driving leads, QS really doesn’t matter. – Melissa Mackey
  • On the B2B side we’ve seen success my creating regional campaigns to better control the costs. – Joe M.
  • All this lauding of Amazon (mainly by me). Worth pointing out Amazon profit is 0.5% of revenue. – Steve Gibson
  • The revenue and ROAS on days like Black Friday are amazing, but the net ROI without considering LTV is fugly. – Lisa Sanner

Q4: For the B2B side of this vertical, how do you define conversions and what is the sales cycle like?

  • For most of our clients, conversions=leads. Follow leads through lifecycle to close the loop. – Melissa Mackey
    • I’m always amazed at how difficult this process tends to be. – Matt Umbro
  • Generally, B2B conversions are considered downloads of whitepapers, resources, demos, etc. – Matt Umbro
  • I’ve always wanted to test paid shipping at ‘price x’ vs free shipping at ‘price x plus avg shipping cost’. – Josh Devlin (@JayPeeDevlin)
    • I tested that w/a client a few years ago. Free shipping won BIG. In fact free shipping beat lower prices + $1 shipping. It was crazy. – Melissa Mackey
  • B2B is where microconversions are very important. Closed rev is still the longterm goal but leads started guide daily decisions. – Chris Haleua
  • Yes. Requires client cooperation. Otherwise you are just optimizing for front-end conversions that may not pan out. – Melissa Mackey
  • Most B2B across all verticals is a lead generated, then follow-up to close the sale. Retargeting, email, etc crucial on B2B. – Bryant Garvin
  • In any B2B campaign I ensure that LP development is accounted for from the beginning of the engagement. – Matt Umbro
  • B2B salecycle = form sub>marketing qual lead>sales approved Lead. PPC optimize form sub, report MQL/SAL. – Maria Corcoran (@maricorcoran)

Q5: What are some strategies that have worked well for you in the Computers & Consumer Electronics vertical?

  • Dynamic Remarketing & Dynamic Search Ads – cheap, but relevant clicks! Go as granular as possible with text ads, literally create 1000s of SKU level ad groups if you need to. – Matt Umbro
  • Constant optimization: LPs, ad copy, KWs. Has to be done. – Melissa Mackey
  • Custom Images – (not manufacturer) really helps you stand out! It takes time but the payoff can be huge! In a sea of PLAs that all look the same changing your Image can pay off. – Bryant Garvin
    • Absolutely, furthermore these images could be used on the site! – Matt Umbro
    • Great thought, If comp all use stock image from manu, custom images in PLAs are HUGE. – Kirk Williams
      • Exactly, I think this is going to be the next iteration of Profitable PLA campaigns. – Matt Umbro
  • Finding low CPC high ROI kw. alt P/Ns, geeky tech terms, 1st to bid on new tech, new products, sometimes b4 they’re available. – Sean O’Rourke (@sean_orourke)
  • Competitive markets are the same as uncompetitive markets – except it’s harder to succeed. – Steve Gibson
  • Utilize as many ad extensions as possible, RLSA, purchase funnel architecture, key kws in own ad groups. – Lisa Sanner

Q6: Specifically across this vertical, how much emphasis do you place on text ads (vs. remarketing, PLAs, etc)?

  • Aside from RLSA/Remarketing, general keywords don’t often get text ads…I reserve the text ads for specific products/SKUs. – Matt Umbro
  • I put too much emphasis on text ads. I still start there out of habit from 2008. Need to prioritize PLA, DSA, RLSA sooner. – Chris Haleua
    • Same here – I’m waiting for the “Text Ads Are Dead” article (re: SEO Is Dead). Having said this, text ads remain the priority in B2B campaigns. – Matt Umbro
      • Totally. I can throw in “last click is dead” as well to make it a zombie blog post trifecta. – Chris Haleua
      • Yes. PLAs are near impossible in B2B. – Melissa Mackey

Q7: What advice would you give a potential client in this vertical who wants to start running a PPC account?

  • Determine the most important way you stand out from the competition and make sure consumers understand why. – Matt Umbro
  • Start w/marquis, bestsellers. Build history/QS. Don’t go out too broad. Test benefits. Work on a quality feed & update process. – Lisa Sanner
  • B2C -Utilize anything that sets you apart in SERPs & Shopping since pricing may not be a strong contributor to your success. – Kirk Williams
  • Measure conversions and lead cycles! Makes me crazy how many advertisers cannot track. – Melissa Mackey
  • Do some real primary consumer/market research first. Dashing in without understanding your user’s minds is a recipe for failure. – Anthony Coraggio (@AnthonyCoraggio)
  • Account for COGS and LTV. Retarget clients with high long term profit potential. Stay brutally strict with ROI for the rest. – Chris Haleua

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More PPCChats

Don’t forget to stay tuned for the next #PPCchat on Tuesday at 12 noon Eastern, 9 am Pacific and 5pm in the UK. Same Chat time, same Chat channel.

Participants

Check out the PPCChat Twitter list to see and connect with all current and prior participants.

• Matt Umbro (@Matt_Umbro)
• Paul Kragthorpe (@PaulKragthorpe)
• Amy Middleton (@amyxmiddleton)
• Anthony Coraggio (@AnthonyCoraggio)
• Chris Haleua (@chrishaleua)
• Ira Kates (@IraKates)
• Joe M. (@GoldenEagle06)
• Josh Devlin (@JayPeeDevlin)
• Juan Restrepo (@JUANRRESTREPO)
• Kirk Williams (@PPCKirk)
• Lisa Sanner (@LisaSanner)
• Maria Corcoran (@maricorcoran)
• Melissa Mackey (@Mel66)
• Sean O’Rourke (@sean_orourke)
• Steve Gibson (@stevegibsonppc)
• Timothy Jensen (@timothyjjensen)
 

Analyzing PPC Streamcaps Vertically

This is a guest post by Paul Kragthorpe; WebRanking SEM Manager in Minneapolis, Minnesota, #PPCChat Streamcap Grabber, SEO Blog Author. Connect with me @PaulKragthorpe, and Google Plus.

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