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What you can do when the auction in search advertising is in full swing, and bids to outbid competitors is not an option, read the case study from account manager MediaNation by Irina Volkova.
The building materials market is a highly competitive topic with high prices at contextual advertising auctions. In addition to the competent use of digital tools, it is important to thoroughly know your product and the characteristics of consumer behavior. What results this bundle gives, we tell in the case.
Who is the client
Mir Keramiki is an online store of ceramic tiles and porcelain stoneware, an official dealer of such well-known brands as Nefrite-Keramika, Kerama Marazzi, Keramin, Italon, Azori, Coliseumgres, Gracia Ceramica, Ceramique Imperiale, etc. the client also has his own exclusive brand of ceramic tiles (Belezza), and recently a full-fledged offline store has appeared in Moscow.
The challenge facing MediaNation
We started working with the client in the spring of 2018. We needed to increase the number of conversions (transactions, calls, associated transactions), while the CPO should be no more than 800 rubles.
Summer is not only a time for vacations, but also a time for renovations. According to statistics, in summer, the demand for ceramic tiles and porcelain stoneware grows. But with the growth of demand, not only does the supply increase, but the auction heats up.
The competitive environment in the building materials market has always been quite high. Manufacturers themselves rarely sell their goods; they prefer to shift it onto the shoulders of official dealers. A heated auction in the summer months does not allow buying out the required amount of traffic with the same budget. To take top positions in the search results, you need to raise bids and increase spending. We didn’t have such an opportunity – we had to work within the allocated budget and at the same time not lose in conversions.
Identifying the growth point
First of all, we decided to analyze what goods are bought during the period of high demand. So we found out that, along with ordinary tiles and porcelain stoneware, the demand for outdoor goods is growing strongly from June to August. Our client’s assortment included construction tiles, which, firstly, had lower competition in the contextual advertising auction than tiles for interior work, and, secondly, the good demand for it only in summer required to make the most of the current moment.
We decided to move away from the standard scheme, when about 15% of the budget was spent on branded requests, no more than 20% – on competitors’ requests, the rest of the money was distributed depending on the bids in the auction. At the same time, street tiles spent no more than 5% of the budget due to low efficiency. We redistributed the budget taking into account the seasonality – in favor of building tiles for baths, garages, porches, etc. The client approved this strategy, and we started.
In 2018, in Google Ads (Yandex.Direct was not used then for internal reasons), we tried for the first time to apply the strategy of promoting street tiles and porcelain stoneware. We have reassembled the semantics for the category campaign and set the bids for the top positions. After three weeks, the campaigns were switched to the automatic strategy “Maximum conversions”. That said, we didn’t forget to constantly update the negative keyword lists.
As a result, in 2018 we managed to reduce the CPO from 876 rubles (including VAT) to 714 rubles in June and 639.5 in July.
In 2019, we decided to test this method again. In May, we again updated the semantics, ad text, and negative keyword lists for the category campaigns for street tiles and stairs. This time contextual advertising was launched both in Yandex.Direct and in Google Ads.
In addition, the client sent us his best practices for each brand. Based on these materials, two lists of brands were formed:
- list of brands for which high dumping was observed in the market. There was no point in spending money on them, since prices are not always competitive;
- a list of brands with fast delivery from the manufacturer or brands whose products are in large quantities in stock. They focused on them.
The client also provided ABC analysis data from major brand manufacturers, where A is the most in-demand tile collections, B is medium and C is the smallest. We worked most actively with the collections of the A and B segments.
Thus, the scheme was as follows: we identified a category that would potentially sell well in the summer season, then we identified specific brands that have this category. Further – the choice of specific collections, on which the main emphasis was made.
In June 2019, we managed to improve the last year’s result and reduce CPO in June by 23% compared to May (by 6% compared to June 2018). We continued to build capacity and reduced our CPO by another 16%. Thus, in July the CPO was 590 rubles (35% lower than in May 2019). Since the order was placed both through the website and by phone, we did not see information on the volume of sales and could only be guided by the client’s feedback on our work.
In a season when it would seem that the number of conversions will grow organically, you should study the market in more detail. Only a tight combination of a client-side marketer (as a person who knows his product and the intricacies of the consumer market in his field) and a digital specialist on the agency side (owning a set of promotion tools) can lead to good performance.