Online Marketing - How to use Search to Display ReMarketing to lower Cost of Acquisition

1. Android Tablet Search Get More Customers Buy Search ReMarketing Using SearchReMarketing to lower Cost of Acquisition 03, May 2011 pj | pj@beingpractical.com | www.beingpractical.com

2. Being Practical: Search Remarketing to lower Cost of Acquisition #1 the background eCommerce has two types of sales: a. Impulse Buys - Low priced product or service; More of Direct Marketing - Impulse because of offer and deals - Driven by on-site marketing or direct marketing - Mode of acquiring new consumers; wafer thin margins – profits only at scale/volumes - Typically products are sold just above the cost price (if branded product) - Or a notional discount if the product is unbranded b. Intent driven Buys - Branded product or high priced - Requires consumer to indulge, categorized as conscious purchase decisions - User completes full AIDA cycle (Attention, Interest, Desire and Action) - User discovers this product – through search (paid, natural or on-site) Note: Impulse Buys gives Volumes; Intent Buys gives Margins typically only for product driven ecommerce ventures; verticals like travel, services, etc - vary www.beingpractical.com pj@beingpractical.com copyright: beingpractical.com

3. Being Practical: Search Remarketing to lower Cost of Acquisition #2 overall conversion rates Site Average 1% - 2% Requires average 100 visitors from all channels to complete 1 transaction Conversion rates greater than 1% depends on: - Usability, Navigation of the website - Tools to discover products & offers (long tail discovery) - Payment options available - Locations Serviced - On-site Marketing & Personalization - Ownership of Category (Ex. Amazon for Books) - Brand, Customer Service, Loyalty (all built over time) Note: The presentation may be valid for product ecommerce services; Numbers and examples for deals, travel, classified and other services may vary Though the concept of Search Remarketing will be applicable to all verticals www.beingpractical.com pj@beingpractical.com copyright: beingpractical.com

4. Being Practical: Search Remarketing to lower Cost of Acquisition #3 typical conversion rates by marketing channels Visitors per Customer Acquisition Email 80 – 125 visitors 0.80% to 1.25% Direct Site 110 – 135 visitors 0.75% to 0.90% Unpaid Channels SEO 135 – 225 visitors 0.45% to 0.75% Social 500 – 1000 visitors 0.10% to 0.20% Search Marketing 50 – 65 visitors 1.5% to 2% Paid Channels Display Advts 250 – 390 visitors 0.25% to 0.40% Social Advertising 285 – 1000 visitors 0.10% to 0.35% Affiliates 145 – 250 visitors 0.4% to 0.7% www.beingpractical.com pj@beingpractical.com copyright: beingpractical.com

5. Being Practical: Search Remarketing to lower Cost of Acquisition #4 search marketing v/s display marketing Search Marketing: > Very high user intent > User searching for product / service> Enticed more towards – Intent based marketing Display Marketing: > Enticed more towards – Impulse buying (if good offer/deal) > Very low on user intent > Spray and pray approach Conversion Rate: Search Marketing > Display Marketing Conversion rates on traffic acquired through search marketing are 5X-6X times more likely to convert compared to traffic acquired through display marketing. www.beingpractical.com pj@beingpractical.com copyright: beingpractical.com

6. Being Practical: Search Remarketing to lower Cost of Acquisition #5 how conversion metrics work Display Marketing: Search Marketing: 50 - 65 250 - 390 Visits to convert: Visitors per conversion Visitors per conversion 1% - 3% 0.1% - 0.2% CTRs: Typical click-thru-rate on paid search Typical click-thru-rate on display banners 10 - 15 INR 4 - 10 INR Avg CPCs: Avg Cost per Clicks on with good spanof keywords & campaigns Avg Cost per Clicks by various NetworksGoogle display rates on lower average Numbers shown in INR (Indian National Rupee) www.beingpractical.com pj@beingpractical.com copyright: beingpractical.com

7. Being Practical: Search Remarketing to lower Cost of Acquisition #6 acquiring one customer by: Display Marketing: Search Marketing: 500 - 975 INR 1000 – 3900 INR Cost of Customer Acquisition: to acquire one customer through search to acquire one customer through display Lower Price Range for Search: = (Lowest CPC) x (Min Clicks to Convert) = 10 x 50 = 500 Lower Price Range for Display: = (Lowest CPC) x (Min Clicks to Convert) = 4 x 250 = 1000 Highest Price Range for Search: = (Highest CPC) x (Max Clicks to Convert) = 15 x 65 = 975 Highest Price Range for Display: = (Highest CPC) x (Max Clicks to Convert) = 10 x 390 = 3900 Numbers shown in INR (Indian National Rupee) www.beingpractical.com pj@beingpractical.com copyright: beingpractical.com

8. Being Practical: Search Remarketing to lower Cost of Acquisition #7 so now you know that: > Though CPCs are on higher side in Search Marketing; conversions are also high. > If you have tried using display marketing for conversions before (directly or through any advt-networks) – conversions would be low with high cost of acquisition> Display Marketing seems tempting in comparison to Search for low CPCs Now welcome to: Search to Display Remarketing www.beingpractical.com pj@beingpractical.com copyright: beingpractical.com

9. Being Practical: Search Remarketing to lower Cost of Acquisition #8 what is Search to Display Remarketing Part 1: Get users from Search Marketing > Increase CPC spend on Search Marketing to get more users with high intent > X number of users will get converted to customers> Y number of users will drop out Part 2: Target search drop-outs on Display Networks > Y users still have high intent and now they know about your service > Target these Y users on display networks with higher CPCs / CPMs> Show contextual and relevant display advertisements w/t correct landing pages www.beingpractical.com pj@beingpractical.com copyright: beingpractical.com

10. Being Practical: Search Remarketing to lower Cost of Acquisition #9 why Search to Display Remarketing is effective Step 1: Acquire users through Search Marketing: 50 - 65 Visitors per conversion 12 - 20 INR CPC - Increase Paid Search by 20-45% Get more valuable clicks with high intent Search Dropouts 600 - 1300 INR Cost to acquire one customer Customer Acquired Numbers shown in INR (Indian National Rupee) www.beingpractical.com pj@beingpractical.com copyright: beingpractical.com

11. Being Practical: Search Remarketing to lower Cost of Acquisition #9 why Search to Display Remarketing is effective Step 2: Know the value of dropped out users High Purchase Intents In simplistic terms 588 - 1280 INR In monetary terms Search Dropouts Customer Acquired Numbers shown in INR (Indian National Rupee) www.beingpractical.com pj@beingpractical.com copyright: beingpractical.com

12. Being Practical: Search Remarketing to lower Cost of Acquisition #9 why Search to Display Remarketing is effective Step 3: ReMarket to search dropoutusers now on Display Networks Buy Now Buy Now Targeted displayadvertisements Buy Now Search Dropouts 10 - 15 INR > Increase CPC on such targeted display advts > Communicate most relevant messaging > Apply techniques like Frequency Capping at impression/click levels www.beingpractical.com pj@beingpractical.com copyright: beingpractical.com

13. Being Practical: Search Remarketing to lower Cost of Acquisition #9 why Search to Display Remarketing is effective Step 3: ReMarket to search dropoutusers now on Display Networks 1 Customer Acquired originally through Search Marketing Search + Display Dropouts 2 - 3 Customers Customers acquired through Display Re Marketing Customer Acquired thru Display Remarketing 3 - 4 Customers Customer Acquired thru Search Total Customers Acquired www.beingpractical.com pj@beingpractical.com copyright: beingpractical.com

14. Being Practical: Search Remarketing to lower Cost of Acquisition #9 why Search to Display Remarketing is effective Step 4: Summarize effectiveness of Search Remarketing 1090 - 2260 INR Total Costs: Search Cost (600 – 1300 INR) + Display Remarketing Cost (490 – 960) 3 - 4 Customers Acquired: Search (1 Customer) + Display Remarketing Cost (2-3 Customers) 363 - 572 INR Cost per Customer Acquired: Much lower than earlier Customer Cost of Acquisitions www.beingpractical.com pj@beingpractical.com copyright: beingpractical.com

15. Being Practical: Search Remarketing to lower Cost of Acquisition #10 Closing Remarks! 1: Do not treat Search and Display as separate channels to acquire customers 2: Search Remarketing through Display will help reduce your cost of acquisitions by 25% to 65%* 3: Always look for cross-channel marketing opportunities * High reduction of acquisition cost if only one category of products/services are offered. Read between the lines – you will find means to reduce cost of acquisition further by 10% to 20%. Or mail me for details – pj@beingpractical.com Want more?: www.beingpractical.com pj@beingpractical.com copyright: beingpractical.com

16. #thank-you Note: All thoughts, concepts mentioned and views expressed are made in personal capacity. All brands mentioned here owned by respective owners. www.beingpractical.com pj@beingpractical.com