CPC

Is day-parting worthwhile?

Roy, we'd like to know if we should use day-parting?

Maybe, but not usually. If you have some behavioral explanation for why conversion rate would be different at different times or days (not volume, it's never a traffic question, aside from "do I have enough to reach significance?"), then perhaps. In most cases, changes over time result in differences in volume, but not conversion rate, and therefore no change in bid. You might see some shifts over time, though, and you can tell if they matter by using the same math as I described in the Geoparting answer. If you have something worth bidding after, you'll find it that way. If you're not sure, leave it alone--you're more likely to making things more complicated than they need to be than you are to optimize anything by hand.

Have questions?  Drop me a line via the Contact form--I love to talk shop.

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Our retailers are driving up our CPCs, what should we do?

We are a manufacturer, but we also sell direct and are trying to think through strategies for when more of our retail partners enter paid search driving up CPCs, especially bigger retailers like Walmart, Amazon, etc.

In this case, you have to pause and think about your overall goal. Let's assume it's "sell as much as possible". Let us further assume that "more marketing dollars is more better", especially when they're not your dollars. While it's true that your margins are better when you sell direct, you might consider a different market position than acting as a direct competitor to your retailers.

Rather, what if you focused on two components of your niche--brand and coverage?

If your retailers are missing something, or under-spending somewhere that has positive ROI, you have the highest margins of ANYONE selling your product, so you should be able to blaze trails into new audiences (either by opening new channels, or by boosting product niches) that your retailers would be less capable of entering. For products where your retailers are well established (big box or otherwise), it's unwise to try to compete directly with them--you increase both of your costs, without increasing demand for the product, and the net margin in the market is reduced (something you want to avoid in the big picture, for a lot of reasons).

However, you may want to participate with an "also-ran" bid on everything in your catalog. That way, if your retailers miss something, or undervalue a particular product or audience, you're there to pick up. This is amplified by the fact that while your margins are the best, your prices are probably the worst--most manufacturers try not to undercut their retailers for obvious reasons. This means that your conversion rate is going to be based mostly on brand, not bid.

Treat your brand like an ecosystem, and you might find that you're nurturing overall success, even while your partners (especially big box) are helping you succeed, despite them being non-human deterministic decision makers. In fact, the very fact they aren't emotional decision makers means you can predict their behavior, and use it to your advantage.

Have questions?  Drop me a line via the Contact form--I love to talk shop.

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