SEM Case Study

Client: An online store focusing on soccer equipment

Industry: Soccer equipment, specialty sports equipment, e-commerce, and online retail

Sector: B2C

Introduction

The client, an online store focusing on soccer equipment was previously running a Google Adwords campaign internally. However, they wanted a professional with previous experience to look after their campaign during and after the 2006 Soccer World Cup. In April 2006, a seven-month Google Adwords paid search campaign was agreed upon and launched, with a monthly media budget of $6,000.

Before the GDMI campaign

Prior to GDMI’s involvement, the client was operating an internal Google Adwords paid search campaign. The results were very modest, with a high cost per acquisition. Furthermore, with no natural search rankings, the client was entirely dependent on the results of this campaign. Any traffic generated was through a handful of broad, generic keywords with no conversion tracking.

The GDMI campaign

The objective of the campaign was to generate a greater return on investment than had been done previously, and to do so in a measurable and accountable manner. The client articulated that since all marketing efforts were focused on the paid search campaign, they would determine its overall success by the increase in revenues.

Since the start of the campaign, GDMI has spent over $100,000 on the client’s behalf on the Google and Yahoo platforms. The campaign received a significant boost in the first few months as a result of the World Cup in the summer of 2006 and has continued to perform strongly ever since. In determining the success of a Paid Search campaign in what is ostensibly an online e-commerce platform, we need to consider the following:

Are we seeing improvements in the cost per click?
Are we seeing improvements in the cost per conversion?
What role is the website playing in the overall performance of this campaign?

The first item is largely under the control of GDMI in that we are managing the bids, the keywords and monitoring the competition to insure that the most qualified traffic is being driven the website in the most effective manner.

Following a significant drop in the first few months of the campaign, the average cost per click has held remarkably steady ever since. This is in spite of the increase in online competition and the drop in interest from users following the end of the World Cup in the summer of 2006. This is a result of careful and continuous monitoring of the campaigns and trends online. The question then is raised, what happens once the traffic hits the website?

Unsurprisingly, the cost per online conversion was at its lowest during the 2006 World Cup. What is interesting to note however is that aside from the month of January 2007 (when an internal campaign was re-launched by the client), the average cost per online conversion has held remarkably steady and the trend is for a continuously lower cost per acquisition. It should be noted that these conversions represent only the online sales as a direct result of the Paid Search campaign.

One thing that the not mentioned is what affects the online conversion rate. There are three aspects to this:

Offline events – The World Cup in the summer of 2006 clearly had a significant impact on the campaign. What is important to note however is that in spite of the fact that there have been no major soccer related events this summer (the move by David Beckham to the LA Galaxy excepted), the cost per online conversion in August and September of 2007 is actually better than in the corresponding months of 2006! This is a very significant piece of data because it clearly indicates that the campaign is actually operating more efficiently in a more difficult environment than it did a year ago.
Campaign management – A key component of the cost per conversion is the day-to-day management of the campaign. This is characterized by a variety of tasks:

Making sure the keywords are updated depending on new products in the client’s inventory.
Monitoring events on the soccer field – for example, the recent reversal in fortunes of Chelsea and Arsenal have been reflected to positive effect in the campaign, with the Arsenal bids and budget raised.
Adjusting the bids and budgets of individual keywords on a regular basis to promote those keywords that are enjoying a lower cost per conversion and lowering the prominence of those that are suffering from a higher cost per conversion.

Website performance –GDMI has worked diligently to drive qualified traffic in the most efficient manner to the website and to make recommendations as to the function of the website to convert that traffic into sales. This has been highly effective, resulting in significant improvement in the performance of the website, and by extension the cost per conversion.

Paid Search Challenges

As has been previously indicated, the Paid Search campaign is responsible in driving qualified traffic in the most efficient manner to the website, and there is only so much that can be done as part of the campaign to improve on the cost per conversion. Most of the emphasis for converting this traffic into sales lies with the website itself. Here, we have encountered significant challenges. The most important challenges and solutions affecting the performance of the campaign included:

The arrangement of the products on the various pages. Users had to trawl through many products before they found the item they were looking for. Improvements in the site structure led to improvements in the conversion rates.
Updating of inventory levels. We had experienced incidents where we found out weeks later that an item was no longer in stock, such as happened with the Manchester United jerseys. While some users do buy other items, this will still significantly affect the campaign performance. A system of better communication with the client was devised to eliminate this issue.

Natural Search Campaign Results

In October of 2006, it was determined that an important step forward in building the client’s online brand was the optimization of the natural search presence. This was determined as essential for a number of reasons:

By improving the natural search results, the client could generate sales traffic that was not Paid Search.
By appearing in the natural search rankings, the client would create greater credibility online since users tend to give greater credence to natural search results than paid search results.
By dominating the natural search results for the brand name, the client is able to protect their online brand reputation and insure that should anyone choose to post any disparaging remarks online, these would be buried in the results and unlikely to have any effect.

To these ends, GDMI embarked upon a two-pronged approach to improving the natural search results for the client. First, a search engine performance audit was completed in which specific recommendations were made to the client for the ‘on-page’ optimization. This is the process whereby changes are made to the website itself to optimize its performance on the search engines. Since GDMI was only making the recommendations and presenting the instructions, it lay within the client’s responsibility to have its web developer implement these recommendations.

At the same time, GDMI embarked on a comprehensive ‘off-page’ optimization campaign. The website was submitted to a wide range of high quality directories and links were built on a number of sites to the client website.

Natural Search Results

The continued importance of the search engines to the success of the client. Between them, Google and Yahoo are responsible for over 93% of non-Paid Search traffic (at approximately 390,000 clicks).
The success of non-branded optimization. While unsurprisingly the most popular keywords are those that are branded (variations on the client’s brand name), it is clear that a very large number of users are coming to the client’s website as a result of searching for non-branded keywords on the search engines. The fact that the client is ranking for a large number of these keywords is a direct result of the off-page optimization conducted by GDMI.

In conclusion, it is obvious that the Natural Search efforts have been very effective and have generated significant ROI. It is also clear that should the findings of the audit be fully implemented, these results can be further significantly enhanced.

The Bottom Line Campaign Results

Ultimately, once all these figures are analyzed, the question remains, what effect has all this had on the client’s business?

There are clearly two elements to this issue:

Is the client’s brand stronger today than it was at the start of this campaign?
Has this campaign been profitable for the client?

To answer the first question, we need to consider the following:

A significant number of individuals now use branded keywords to find the client on the search engines. In other words, many more users today search for the client’s brand than did a year ago (in September of 2006, the client’s branded keywords yielded 779 impressions on Google, compared with 1,682 impressions on Google in September 2007). This indicates a much stronger brand presence – users now actively seek out the client online as a trusted resource for soccer equipment.
While client does have a number of physical locations, these are limited to California. The table below indicates that those users that visit the client website are overwhelmingly from outside the State of California. In fact, less than 14% of all visitors to the client website are even in the same State. This is a further indicator of the growing strength of the client brand, not just locally, but nationally and even internationally.

Clearly, the campaign has had the effect of significantly and measurably enhancing the brand, both online and offline.

So to the second question, has the campaign been profitable?

In sharing their revenue figures with GDMI, what is remarkable is that with the exception on the revenue for September, how closely they mirror the continuously improving Paid Search campaign. In spite of all the challenges listed above, this year has seen almost continuous improvement, and this in spite of a single major event. Another important item to note is that much of the budget was focused on SEO, which tends to be a longer-term effort and less closely associated with e-commerce direct sales.

The numbers above certainly indicate that in the second half of 2007, the client has been profitable. The trend has continued to be a positive one. The question must then be asked, why the drops in revenue in September given the corresponding start of the European soccer leagues and the stellar revenue of the preceding quarter?

It is clear in analyzing the list of top 20 items sold per month for the last 3 months (as supplied by the client) that certain item that had previously sold well, such as Manchester United jerseys, are missing. It has become clear that a reason for this is that these and other jerseys are currently out of stock. While this has led to higher costs per conversion in the Paid Search campaign, it is clear that these users are not simply abandoning the website, but are rather buying something else instead. Since the top items in the Manchester United pages are t-shirts and caps, this probably has something to do with the drop in revenues. In short, the challenges that were identified previously appear to have started affecting the bottom line of the business. When this was identified and corrected, the revenues climbed again.

The Paid Search campaign continued to improve, receiving a huge boost over the holiday season. After the initial campaign the contract was expanded for 12 months at an increased monthly budget for PPC of $8,500 per month. At the end of that 12-month period (Oct 2007) the campaign was renewed again for 12 months at 12K per month. In addition, during the 2007 renewal, there was $2,500 per month assigned to SEO, both on-page and off-page. However, it became apparent that the client’s web team would be unable to implement many of our recommendations so much of a few thousand of this budget ended up being added to our paid search campaign gearing up to the 2007 holidays. Besides SEO, the Pricegrabber platform was added to our strategy during the 2007 holiday season. Pricegrabber has performed extremely well, bringing in a very high amount of traffic, conversions and ROI.
The client continues to renew due to the performance of the campaigns and service they receive. They have referred us to other companies as well and pass on high praise for our services.

Client Feedback

“Since GDMI took over our already successful pay per click marketing campaign, we’ve not only noticed a significant increase in the number of sales our e-commerce business has experienced, but their first class customer service and follow up has allowed us to focus on other areas of what is a rapidly growing business for us. We highly recommend GDMI’s services.”

“You guys are amazing!”

They have mentioned most recently that if they had found us when they started their business 6 years ago, their lives would be much different.

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