Ask The Expert: Ecommerce Advertising
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Herts, England United Kingdom
Andy
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Ask The Expert: Ecommerce Advertising
10 Aug 2014
Our latest Ask The Expert Q&A event is here!

This time our expert is David Jaeger, COO at InternetMarketing.net, a internet marketing consulting firm based in California, USA.

David has been helping retailers of all sizes advertise effectively for several years, as well as being an active seller himself. You can read more about David here.

A few house rules before we get into it:

  • We're expecting a lot of posts so use @membername if you are directing a reply at a particular poster, or quote them and put your reply below the quote. It's a good idea to edit long quotes!
  • You can post about your experiences with advertising as well as direct questions - let's make it an open discussion about ecommerce ads.
  • If a question is directed at you, please reply promptly. Our members come from a lot of different timezones and might miss your reply by a day if you delay.
  • As always, keep it constructive. Post in good faith, don't take offence, and most importantly - enjoy the discussion!

  • This thread will close on Friday 15th August at 8pm UK time (3pm EDT / 12pm PDT). Get your questions in as soon as you can to give David time to respond and answer any follow up questions. Don't leave it to the last moment to ask your question!

    So, who wants to get in first?
    Andy Geldman, Web Retailer
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    Supplier
    Derry United Kingdom
    repricerexpress
    Kudos: 185
    Joined: Jul 24, 2013
    Re: Ask The Expert: Ecommerce Advertising
    10 Aug 2014
  • With a limited budget, what is the best advertising network for increasing your Amazon sales?
  • Does paid advertising work better for products than organic SEO like optimising titles, descriptions etc?
  • Should a seller test one network at a time?
  • Should sales be the only metric to measure success or should sellers use advertising to gain brand awareness for their online shop or multichannel presence?
  • Are there any multichannel advertising strategies that can increase sales across a seller's multichannel marketplaces (Amazon and eBay) as well as their own webstores?

  • Thanks David!
    Win the Buy Box more often with RepricerExpress Amazon Repricing Software.
    Bangor, Co-Down United Kingdom
    roypat05
    Kudos: 96
    Joined: Mar 22, 2014
    Re: Ask The Expert: Ecommerce Advertising
    10 Aug 2014
    @Andy

    I am about to try out a 'lean approach' to a new web site I have almost finished. Actually there isn't any other way for me to do it as I am very limited in funds! I will be selling 2 or 3 products in each item category to see how they go.
    I know I have to get the web site noticed but I also run an eBay featured shop and am a sole trader so time is a big factor. I can't be social networking and neglecting the day to day running of my other business. I have also heard that the sales conversion rates for social networking are actually very poor. Is there another more time effective way of getting a new web site noticed?
    Supplier
    Ireland Ireland
    Luzern Solutions
    Kudos: 26
    Joined: Mar 27, 2014
    Re: Ask The Expert: Ecommerce Advertising
    10 Aug 2014
    I'm interested in some information on best in class metrics that you feel one should be looking to achieve for each of these different approaches - in respect of a retail webstore ( as opposed to Marketplace )
    - paid search with google
    - amazon product ads
    - direct email campaigns
    - or any other methods you feel should be considered

    I find that far too often the advice in respect on-line advertising focuses on the how and where, with less emphasis on the why and how to go about measuring success.
    Charlotte, NC United States
    wilfredtr
    Kudos: 42
    Joined: Apr 22, 2014
    Re: Ask The Expert: Ecommerce Advertising
    10 Aug 2014
    Hello David!

    1. Do you know of any advertising medium that is pay for performace? Only after a sale is made.
    2. Google Ad Words vs Google Shopping, how can I do a ROI comparison without first investing?
    Los Angeles United States
    InternetMarketingDotNet
    Kudos: 215
    Joined: Jul 22, 2014
    Re: Ask The Expert: Ecommerce Advertising
    10 Aug 2014
    @repriceexpress – Great questions!

    RepricerExpress wrote:

    With a limited budget, what is the best advertising network for increasing your Amazon sales?
    You probably know the Amazon game quite well. On a basic level, we’ve had good experience with the Amazon CPC ads program, where you can pay as little as a couple of pennies for extra exposure. Unfortunately, your products are only eligible if they are eligible to win the buy box as well.
    Another strategy you may want to choose is if you own your own ASIN’s, to do a bit of cheap (black hat) SEO to your amazon products. (Go to a forum like blackhatworld or warriorforum, and buy a bunch of cheap links to your Amazon products.)

    repricerexpress wrote:

    Does paid advertising work better for products than organic SEO like optimising titles, descriptions etc?
    In general, both work very well. However, the SEO side has some variables, and often takes a bit longer to start generating volume with than the paid side. Your end game goal is to diversify your channels, and do both.

    repricerexpress wrote:

    Should a seller test one network at a time?
    It depends on the networks you are trying. We generally recommend lumping in all of the PPC shopping channels – Google Shopping, Amazon Product Ads, eBay Commerce Network, Bing Shopping, Pricegrabber, Shopzilla etc. The reason is that depending on the vertical you are in, different networks will perform better or worse. So it’s better to figure out the losers and winners quickly.

    repricerexpress wrote:

    Should sales be the only metric to measure success or should sellers use advertising to gain brand awareness for their online shop or multichannel presence?
    In general, I’m a very strong proponent of using sales as a performance metric. I think many people who don’t know what they are doing use “brand awareness” as a metric.

    The exception to this rule is when you are selling higher priced items, where people do multiple visits before they purchase. Then you need to use other metrics (assisted sales, add to carts etc.) to track performance, as you need to advertise on keywords that don’t show sales because they are earlier on the buying cycle.

    repricerexpress wrote:

    Are there any multichannel advertising strategies that can increase sales across a seller's multichannel marketplaces (Amazon and eBay) as well as their own webstores?
    I’m not as much of an expert on the multi-channel marketplaces, as I’ve only just fed them as an afterthought. There are definitely strategies to each channel, but I’m not the guy. A couple of quick ideas:

    1) Own your customers – your goal is to own your own customers. To that end, anything you can do to get them onto your own site for a second sale is extremely important. One idea would be to put coupons in your shipping/packaging.
    2) Increase exposure – each of the marketplaces has their own tweaks to use. This takes experience, and a lot of the other people in the forum are probably a bit better than I am at this.
    3) Paying for traffic – if you are on a lot of the marketplaces, and you have good margins then hooklogic may be another good pay per visitor strategy.

    [Last edited: 10 Aug 2014]
    Los Angeles United States
    InternetMarketingDotNet
    Kudos: 215
    Joined: Jul 22, 2014
    Re: Ask The Expert: Ecommerce Advertising
    10 Aug 2014

    wilfredtr wrote:

    Hello David!

    1. Do you know of any advertising medium that is pay for performace? Only after a sale is made.
    2. Google Ad Words vs Google Shopping, how can I do a ROI comparison without first investing?
    Hi Wilfred,

    Thanks for the questions.

    You can get sales on a pay for performance from affiliate networks. However, most of them generally leach off of your brand keywords, so if you don't have much existing traffic/sales, you won't get much volume. My partners in the affiliate space tend to say expect a 10% lift over 6 months.

    On the Google Shopping vs. Adwords - we always find better performance in Google Shopping, slightly better margins. On Google Adwords, you can take one of your top selling products, look at the average CPC on the Google Keyword tool, and multiply it by your conversion rate. This should give you the high end of your cost per conversion (you can always bid a bit lower, and come more in line with your targets.
    For Google Shopping, you can take that CPA, and reduce it by 25%, and that would be roughly what you would pay.

    A word of caution - I always tell people their first $10,000 in advertising will produce much lower returns than the next $10,000. I know it sounds like a lot of money, but search is a serious, mature channel, and if you want to build your business in a real way, you need to invest seriously.

    Also, if you are moving from the marketplaces to search, you will likely find that you can price your products a bit higher on your website. This can create more margin for your advertising costs.
    Los Angeles United States
    InternetMarketingDotNet
    Kudos: 215
    Joined: Jul 22, 2014
    Re: Ask The Expert: Ecommerce Advertising
    10 Aug 2014

    roypat05 wrote:

    @Andy

    I am about to try out a 'lean approach' to a new web site I have almost finished. Actually there isn't any other way for me to do it as I am very limited in funds! I will be selling 2 or 3 products in each item category to see how they go.
    I know I have to get the web site noticed but I also run an eBay featured shop and am a sole trader so time is a big factor. I can't be social networking and neglecting the day to day running of my other business. I have also heard that the sales conversion rates for social networking are actually very poor. Is there another more time effective way of getting a new web site noticed?
    Hi Roypat,

    I'm not in favor of the "lean approach" for websites. That type of approach hurts conversion rates, as people come in, don't see what they are looking for, and leave.

    Don't even bother with promotion initialy. Your first job is to make your website answer your potential customers needs amazingly well. You may want to also create unique product content for each product - which will create better user experiences, and down the line, help with SEO.

    On the promotion side, you can always upsell your ebay customers to start using your site directly.

    Your website is a long haul approach. So if you don't have the time/money, take it slowly, just pound away at it until it's ready. You can then focus on promotion.

    On the promotion side, ideally, you should pump it up with an aggressive paid campaign. We generaly added $10-$15,000 in additional revenue (barely profitable) iwt

    I'm not a big fan of social networking as the primary driver of sales. We see search (SEO, PPC, Google Shopping et.) as the primary drivers.
    Los Angeles United States
    InternetMarketingDotNet
    Kudos: 215
    Joined: Jul 22, 2014
    Re: Ask The Expert: Ecommerce Advertising
    11 Aug 2014

    Luzern Solutions wrote:

    I'm interested in some information on best in class metrics that you feel one should be looking to achieve for each of these different approaches - in respect of a retail webstore ( as opposed to Marketplace )
    - paid search with google
    - amazon product ads
    - direct email campaigns
    - or any other methods you feel should be considered

    I find that far too often the advice in respect on-line advertising focuses on the how and where, with less emphasis on the why and how to go about measuring success.
    I wish more people would ask questions like you!!
    As you know, there's unfortunately so much lack of focus and bad advice online about how to set goals and achieve them.

    The first thing I recommend to people is the big picture - that one big goal. In paid search/media buying/SEO, the goal is to acquire a new customer at a marginal profit. Note, I say marginal, not "maximize profit margin" off of each sale. The reason is that the cheaper you are about acquiring a new customer, the less volume you can achieve, and in order for your business to grow, you need a volume of new customers.

    On the email side, once you own a customer, the goal is to activate and upsell as many of them as possible.

    Now, let's talk about KPI's - or key performance indicators, and once again, break it down by traffic source.

    1) Paid Search - you need to set up margin targets. Depending on how your margins vary (does it vary by brand, product, category?), you should set up "ROAS targets". RoAS means "Return on Ad Spend". Basically, for every dollar you spend online, how many dollars do you need to get back?

    For example, say you sell 100 products, all with the same 60% margin. Ideally, you would like to take half of the net revenue home with you. So, 20% for advertising, 20% to you. This means that in an ideal world, every dollar spent would give you a $5 in gross revenue (20% of revenue spent on advertising). However, just to launch your paid search campaign, you're willing to break even (40% of revenue to advertising). This means that every dollar in ad spend needs to give you $2.50 back, or a RoAS of 2.5.

    As long as you hit your RoAS of 5, you want to be spending as much as possible.

    Keep in mind, you may be thinking "eBay only takes 13%, why am I giving 20%-40% to Google or other shopping engines?

    The answer is because when you buy a customer from Google etc., you own that customer, and every other purchase they make from you is essentially free.

    Again, RoAS and Gross revenue are the only 2 metrics that really count when doing advertising.

    There are a number of secondary ones that allow you to analyze the channel to identify opportunities.

    i.e. you may want to look at:

    Average position (raise or lower bids, based on profitability)
    AOV
    Conversion Rate
    CPC
    Impressions
    Clicks
    CPA
    CTR
    Assisted Clicks/Conversions

    and more. You may also want to break this down by:
    Keyword
    Domain (if you are doing display advertising)
    Remarketing list vs. not-remarketing
    Geography
    Time of day, Day of week
    Mobile vs. Desktop/Tablet

    These are elements you can control to increase gross revenue while keeping in line with your RoAS targets.

    On Amazon Product ads and the other shopping engines, there isn't alot of transparency. You're pretty much left (again with RoAS, but also) CPA, AOV, CPC and conversion rate by product.

    Email

    Email is a bit more interesting. You're looking to maximize sales, while not losing too many subscribers. There's no RoAS, as you aren't spending (except for your ESP, and the cost of your email marketing design etc.), however, you still want to track the gross revenue from the channel over time.

    You also want to analyze:

    1) Open rates - what percentage of people are opening your emails. Keep in mind, open rates are almost always under-reported. Many email clients block images, and opens can only be tracked when images are shown.
    2) Unsubscrib

    [Last edited: 11 Aug 2014]
    Los Angeles United States
    InternetMarketingDotNet
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    Joined: Jul 22, 2014
    Re: Ask The Expert: Ecommerce Advertising
    11 Aug 2014
    @Luzern Solutions

    3) Click Through Rate - What percentage of people actually click out to your site
    4) Conversion rate
    5) AOV
    6) Margin

    There's more to alot of this, but these stats are a good start.
    Newry United Kingdom
    Lorna Franklin
    Kudos: 39
    Joined: Jul 28, 2014
    Re: Ask The Expert: Ecommerce Advertising
    11 Aug 2014
    Hi David,

    I'm very new to my job role in international ecommerce and I'm wondering where would you recommend as a starting point when setting up your first translated international website in terms of advertising? Would it be PPC, social media etc. or finding an agent in that country? At the minute, we have chosen to translate and push our website to the French market to start off.

    We specialise in selling rugs, and most of our sales come from Ebay and Amazon but we expect this to change whenever our new, redeveloped web site is launched in October. At the minute we only sell internationally on Ebay and Amazon, so the new website is a big step!

    Thanks

    Lorna
    Shenzen China Australia
    Tim298
    Kudos: 446
    Joined: Jun 26, 2014
    Re: Ask The Expert: Ecommerce Advertising
    11 Aug 2014
    Hi David, I have a really basic question - reading the ones above this is a really interesting area and one that has always been hard to crack for me, hard to understand - I always have a fear of getting into something as its hard to understand for the average person, I think its like logistics in that sense - sort of hard to wrap your hands around conceptually, and always changing so its difficult to know what YOUR best step is.

    My question is - what sort of costs are we looking at - lets say we have a basic B to C site, trading well, also supplying products through other existing sales channels - we want to "advertise this" and get more views, more signups and build a bigger database - what would this cost to do well?

    I know my question sucks in many respects, but I think this is what every day people doing business and operating online want to know - right now we sell globally through existing sales channels that we dont have to advertise for or in, so we dont do any advertising - this is not good... as we establish our own sales sites in the markets we operate in, I think the advertising question and budget becomes much more important - I just have no idea how to quantify it and what we are quantifying - all i know is, its real important.

    Any guide you could give - like an example etc - or any idea, would be great - cheers
    Los Angeles United States
    InternetMarketingDotNet
    Kudos: 215
    Joined: Jul 22, 2014
    Re: Ask The Expert: Ecommerce Advertising
    11 Aug 2014

    globalsupport wrote:

    Hi David,

    I'm very new to my job role in international ecommerce and I'm wondering where would you recommend as a starting point when setting up your first translated international website in terms of advertising? Would it be PPC, social media etc. or finding an agent in that country? At the minute, we have chosen to translate and push our website to the French market to start off.

    We specialise in selling rugs, and most of our sales come from Ebay and Amazon but we expect this to change whenever our new, redeveloped web site is launched in October. At the minute we only sell internationally on Ebay and Amazon, so the new website is a big step!

    Thanks

    Lorna
    Hey Lorna,

    Good luck with the site - I'm glad you're making the big step to international - there's tons of potential.

    I recommend my clients step in first with PPC. PPC creates fast and significant cashflow, and can help you recoup your investment and see the results. Once you have some volume coming in, I would recommend going for a dual SEO/Social approach. IMHO, there's too much overlap between SEO and social, so I would recommend doing both together.

    Hope this helps, and good luck!
    Los Angeles United States
    InternetMarketingDotNet
    Kudos: 215
    Joined: Jul 22, 2014
    Re: Ask The Expert: Ecommerce Advertising
    11 Aug 2014

    Tim wrote:

    Hi David, I have a really basic question - reading the ones above this is a really interesting area and one that has always been hard to crack for me, hard to understand - I always have a fear of getting into something as its hard to understand for the average person, I think its like logistics in that sense - sort of hard to wrap your hands around conceptually, and always changing so its difficult to know what YOUR best step is.

    My question is - what sort of costs are we looking at - lets say we have a basic B to C site, trading well, also supplying products through other existing sales channels - we want to "advertise this" and get more views, more signups and build a bigger database - what would this cost to do well?

    I know my question sucks in many respects, but I think this is what every day people doing business and operating online want to know - right now we sell globally through existing sales channels that we dont have to advertise for or in, so we dont do any advertising - this is not good... as we establish our own sales sites in the markets we operate in, I think the advertising question and budget becomes much more important - I just have no idea how to quantify it and what we are quantifying - all i know is, its real important.

    Any guide you could give - like an example etc - or any idea, would be great - cheers
    Hi Tim,

    Thanks for your question. I've really enjoyed reading your posts, so excited to reciprocate.

    This depends on how you decide to move forward - are you going to be handling PPC yourself, or hiring an agency to do it.

    If you do the agency side, I always tell clients to expect to spend $300/day to test the waters. You should be able to see results within 2 weeks, and you can also tell within the first couple of days if you are way off on your assumptions (e.g. low conversion rates, low AOV's etc.), so your maximum out of pocket risk is ~$2,000 in ads + the agency fee.

    If you do it yourself, I would also recommend trying to spend $300/day. However, you should first train yourself up on PPC. It's not a simple field and is constantly changing. You may want to look at Brad Geddes's training - he's one of the most reknowned experts in SEM.
    Herts, England United Kingdom
    Andy
    Kudos: 11,623
    Joined: Jan 1, 2001
    Re: Ask The Expert: Ecommerce Advertising
    11 Aug 2014
    I think Tim hit the nail on the head - for most small business owners (myself included) the first question we ask is always "what's it going to cost?"

    I'll cut to the chase here... some sellers would be happy to make $300 in sales a day, never mind spending that amount in advertising. Why do you recommend spending so much, particularly when just starting and likely to make big mistakes? A business owner's intuition (which may be wrong of course) is to start spending just a little while you learn the ropes.

    Also do you come across product categories where advertising is never likely to generate a return? For example with low-value products can the margin be too low to support it, or if margins are low does that always mean the PPC ad bids are low too? To put it another way, are there certain product categories that work best for PPC?

    [Last edited: 11 Aug 2014]
    Andy Geldman, Web Retailer
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