PLA Tech StackData Integration

PLA Tech StackData Integration

At the end of the day, creating successful PLA campaigns should improve your business’s bottom line. Which means your campaigns can’t exist in a vacuum. Even once you’ve optimized your Product Titles, Segmented your campaigns and created an effective bidding strategy there is still plenty that you can do to improve PLA performance. To truly be successful, you need to use data from other parts of your business to inform your PLA strategy and vice versa.

These are just a few of the ways this data can be used to improve your campaigns.

When you look at the data, impressions and clicks in Google Shopping are very sensitive to price changes. Raise the price too much and clicks will drop off dramatically.

02 PLA Tech Stack: Data Integration

Product Pricing

Clicks drop off after product price increase

Own price Clicks

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20

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120

Days

+5%

Price in $ Clicks

Price

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5

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55

03 PLA Tech Stack: Data Integration

For all products, we tend to see an S-shaped curve, but cheap products generate traffic much earlier. The impression volume for expensive products is significantly lower than average. In addition, the average CPC is higher for products with prices above average market price – 15% higher in many cases.

All that, is just a fancy way of saying that given the choice, Google will choose to show the Product Ad with the lowest price even if it doesn’t have the highest bid. This is especially true when multiple retailers sell the same product.

Usually in Google Shopping when you get lots of extra traffic your ad efficiency goes down – often because Google is showing your ad for irrelevant search terms. But, despite getting more traffic, cheaper products are actually very efficient. According to our internal data, you get almost 13x the number of orders and a higher Conversion Rate, meaning your Cost Per Order is around 30% less.

All in all, cheap products generate 280% more conversions than expensive products.

Max CPC

Avg. CPCs of differently priced products while bidding up

Product price Clicks Max CPC

5/11/16 5/12/16 5/13/16 5/14/16 5/15/16 5/16/16 5/17/160.0

0.8

1.0

1.2

0.2

0.4

0.6

-30%

-4%

-12%

-6%

-8%-13%

That doesn’t mean your business necessarily needs to slash all its prices right away. You can build an advanced strategy using cheaper products as entry points to your site from Google shopping, and then upsell customers to more expensive, high margin products. After all, less than 50% of people actually purchase the product they clicked on, most go on to buy something different. So even if you’re attracting traffic through your less expensive products, you’ll still likely increase your conversions overall.

Also, when it comes to PPC, don’t overbid on expensive products. Analyze impression volumes for different CPC levels and identify what the shopping S-curve looks like for your cheaper and more expensive products. Try to find the sweet spot where average ROAS is strong but incremental ROAS is poor.

Product pricing is an essential part of any successful retail business. By analyzing your margins and your Google Shopping campaign performance you can get a better picture of how competitive your product prices are in your market.

The irony is that while product price is an extremely important factor in whether or not digital marketing teams can hit their KPIs, they usually have no way to systematically measure competitor prices. And even if they did, at the moment most pricing departments don’t involve digital marketing teams in their decision making.

04 PLA Tech Stack: Data Integration

Traffic of similar products within one shopexpensive products cheap products

CPO CR Conversions

-6%-8%

-13%

1,0421.0%40

28 0.6%

274

1. – Don’t overbid on expensive products – consider changing the price

2. – Discount a few products to bring more traffic to your site

3. – Once customers are on your site you can upsell and retarget them

Text ad queries

05 PLA Tech Stack: Data Integration

This lack of access is what prompted us to create the Crealytics price analysis feature. The feature automatically assesses the other products you are competing against and suggests pricing adjustments to make you more competitive. Armed with this data-driven information, digital marketers can approach the pricing department with specific suggestions that will help improve the company’s bottom line.

Knowing which products to invest in is a huge decision for retailers. Consumer moods and trends are in constant flux and predicting what they will want to buy in 6 months is tricky.Using data on how your products are performing in Google Shopping can help you make purchasing decisions. For example, if sparkly party dresses are a big seller during the holidays, you may choose to invest in more styles or a greater number of certain styles.

In addition, the rate of performance can tell you a lot about what products/designers are going in or out of style. If a product with minimal performance suddenly starts generating lots of traffic, it could be an indication that that type of product is becoming trendy.

When integrated with your inventory system, Crealytics can show you not only which products, brands, colors and categories sell best, but which ones drive the most new customers, and which are trending up or down in terms of conversions.

No one wants to waste their advertising budget on products that are out of stock. Yet our research suggests that, on average, retailers spend 40% of their budget to promote products which are running out or will sell out regardless of advertising.

An ad that sells the last unit of a top-selling product may satisfy existing KPIs, but the value of such an ad is close to zero. Top-selling products tend to perform best in sales and revenues, but they also run out of stock quite quickly. This leads to a situation in which a significant chunk of retailers’ budgets are squandered on products that would have sold within three weeks even without the ads.

Managing inventory and stock levels remains very challenging for online retailers. No web analytics system, advertising or attribution tool takes stock levels into account when measuring advertising performance. So even the largest retailers are making big mistakes without realizing it.

Product Inventory

Yield Management

06 PLA Tech Stack: Data Integration

Retailers need to have stock-level forecasts and SKU levels available and connect the back-end systems with that data to make them actionable by the ad tech stack. Inventory management and pricing systems already do some version of this, but mostly in the realm of pricing management because when there’s too much stock, prices decrease. The same thinking should be applied to the amount of advertising a product gets, so that advertising is suspended for products that are likely to sell out. The true value of digital retail advertising can't be measured until those stock levels are taken into account.

Retailers need a better way to measure marketing effectiveness as a driver of business results. Breaking out of the click-based paradigm might require a new KPI metric altogether – maybe something along the lines of “yield.” Yield would always be between zero, if a product will sell automatically and can't be re-ordered, and the full net sales price, where it's clear that there is too much stock that will be hard to sell. Unfortunately, the industry hasn't figured out an exact formula yet to calculate everything in between, but the incremental ROI of marketing dollars depends on it.

A first step in reaching this goal is to integrate data from your inventory systems directly with data from Google Shopping. Then, by drilling into the conversion data on which products are actually driving sales and by assigning a value of the item sold to the business (yield), you can determine which products to bid more on and by how much to sell a particular item.

The back-end data integrations and “yield” measurement would allow retailers to focus on promoting inventory at better margins, regardless of the velocity of demand. Given all the technology that has been developed to prevent other forms of ad fraud and waste, these practical steps are both achievable and warranted.

At Crealytics, our Retail Intelligence and Performance Platform can integrate with your inventory management system allowing you to see all the relevant data in one place. From there, we can begin to help you build a system to automatically figure out which products to promote and adjust the bids accordingly.

As a company you’re likely already collecting and storing all the relevant data you need to start making more informed business decisions. The challenge is in finding a way to integrate all those data points so that you can get an overall picture of your business.

Finding an integrated data solution is key to helping each and every area of your business meet its optimal performance. No department should be an island.

Add to your Tech Stack: Crealytics

07 PLA Tech Stack: Data Integration

Instead, everyone should be able to analyze relevant data to find areas where they can overlap and collaborate on achieving company-wide KPIs.

Crealytics can help you connect all these data sources to give you access to the information you can’t see in AdWords. We help you to find out which products really converted - from low to high aggregation levels: products, brands, colors and categories. These insights will help you to know more about your customers’ behavior than ever before including click versus buy analyses, search vs shopping gap identification, and competitive price analysis.That's not all, Crealytics’ machine learning performance technology solves for profit-based shopping campaign excellence. Our platform aligns eCommerce goals of new customer acquisition, CLV and margin tracking alongside product ads to drive better performance while accelerating eCommerce insights across your marketing organization.

Learn more about Crealytics: crealytics.com