Rising CPC is an Opportunity for Your Clients

BY Tim Londergan
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Online sales in 2020 boomed. The $710 billion total represented an 18% increase over the prior year. That translated to 14.5% of total retail sales in the U.S. Today, e‑commerce’s portion of retail activity has leveled off to account for about 7.8% — nearly half of 2020’s peak, according to an article in Adage​.com. Retailers who set aggressive goals to maintain pacing for 2021 are struggling to hold ad budgets in check. That’s partly because Google and other platforms are holding firm to their ad rates, which means marketers are dealing with 30% to 40% increases in the cost of search advertising when compared to last year. In addition, advertisers face stiffer competition for online shoppers today compared to the era of lockdowns and confinement. This situation presents an opportunity for your clients.

The rise in search advertising

The Adage article cites a report by GroupM that search advertising grew a mere 1.8% year over year in 2020. Search advertising is expected to grow 19.3% in 2021. According to Dentsu Media’s Head of Search Gareth Cleevely, these growth rates are “the highest we’ve seen in the past four years.” Small and medium-​sized retailers might worry they'll be outbid by their bigger competitors, but analysts report they can navigate these treacherous waters by paying attention to important details.

Categories matter

Understanding pricing for search advertising is critical to building a successful online marketing strategy. As you advise your clients, refer to the many nuanced tactics that can help. For instance, some business categories have a distinct advantage. Dentsu’s Cleevely admits that Google search spending is tricky. Certain business categories may see ad costs decline while others may rise. Knowing your advertisers’ categories and researching their options can help you determine the best opportunities and keywords for your clients.

General categories vs. name brands

Brands are a known commodity. Shoppers found comfort during lockdown with the security of familiar brand names. Today, however, consumers are shopping categories. The opportunity for your clients is to analyze their product offering more carefully and buy category keywords. Seasonality, sales cycles and consumer habits produce major impact on sales revenue. Broad offerings from a local retailer appeal to online searchers who will convert to becoming customers if they see the right deal. Also, advise your clients to merchandise their offerings with related products in order to boost add-​on sales.

Know your clients’ most likely customers

When bidding for premium positions in search advertising, your client must have an accurate portrayal of their target customer. Experimenting with CPC can be too expensive for small advertisers. Enhanced Cost Per Click (ECPC) may be worth exploring. This automated bidding option adjusts the bidding process in real time. However, it requires a clear knowledge of target demographics. AdMall can help you in these situations. The contextual signals required for successful ECPC is found within the business insights and competitive profiles offered by AdMall and AudienceSCAN. Precise business intelligence will remove guesswork and help you guide your clients to their best path forward when they embark on a CPC campaign.

Compare traditional media ROI

As consumers return to stores, your advertisers can capitalize on traditional means of messaging. Urge them to maintain a presence in other channels that will help them avoid the rising costs of search advertising. Digital marketing shines when supported with traditional methods. You can show clients side-​by-​side comparisons of various media investments to help them decide how to allocate their ad budgets. Remember that the opportunity for your clients extends beyond digital selections.

Photo by Pickawood on Unsplash