Generating new customers using paid search and being cost-efficient at the same time can be quite challenging, especially considering the high CPCs (cost per click) in some verticals. Most industries’ CPCs range between 1 € and 4 € with an average of about 2,30 € but there are industries with CPCs up to 100 €. With this, as a paid search advertiser you want the people whose click you paid for to convert on your website as likely as possible. Interestingly, there is an almost linear relation between CTR (click through rate) and conversion rate and both are strongly influenced by the brand you are advertising for.
70% of users will click on the ad of the retailer they know
This makes the brand the most important factor in enabling a click, even before free shipping and a sale offer. This can also be shown in numbers using returning users as a proxy for brand affinity: Returning users convert two to three times more likely and also click much more likely. We for example see a CTR increase range of about +35% to +190 % for our clients.
Of course, Google realized this as well and introduced RLSA (remarketing lists for search ads) in autumn 2013. The way this usually works is that you tag users who have visited your website or a certain part of it and then target them again.
There are three ways that are broadly recommended and used:
- Increase the bids for the users in you retargeting list, create specific ads with a special offer or text or use broader keywords
- Create specific ads with a special offer or text
- Usage of broader keywords
This sounds and indeed works quite well but usually your RLSA’s list size is very limited and you can’t generate new demand. Larry Kim introduced a completely new way to use RLSA: “Do not increase your bids or make a special offer for the users in the RLSA list, EXCLUSIVELY target those users!” If you have a very limited budget, this is actually something you could try to make the most of your money. Otherwise, the problem stays: Your RLSA’s list size is very limited. So, this is where the great idea comes in: Increase your RLSA’s list size and also your brand awareness using different and cheaper methods than AdWords.
Increase brand awareness with Social Media
One of these methods can be Social Media. Providing people with interesting content about your brand and related topics will make them get to know and like your brand. This way, when they later search for your product, you will have an advantage against your competitors and the user will be biased to click on your ad.
This idea is of course mostly applicable for advertisers with a limited budget or for very expensive industries but is still a very interesting approach, thinking outside the box. Google itself is actually going in a similar direction testing similar audiences for search as a beta at the moment. This doesn’t leverage the brand awareness but uses other indicators to classify users that are similar to users in your RLSA lists.
The future of paid search
We are convinced that showing your ad to more and more targeted users but also leveraging users before they actively search for your product or service will be the future of paid search and that different marketing channels will get more and more interlinked. This approach is going in this exact direction and we are excited to see the first results from our clients.