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Join Our Research Team at DMA 2014
Jul 19, 2012
Case Study

Paid Search Marketing: Automation increases revenue 22%

SUMMARY: Paid search can be an effective way to increase revenue, but the actual process of managing PPC campaigns can also be very labor intensive. Using software to automate some of the overall effort is one way to help manage and track paid search.

One e-commerce site did just that, implementing automation in its extensive paid search campaigns. Find out how it began testing and optimizing its efforts, increased its managed keywords by 500%, and boosted revenue from paid search 22%.
by David Kirkpatrick, Senior Reporter

CHALLENGE

Paid search is an effective marketing strategy to help a brand own the search engine results page (SERP), but, more importantly, it can also make a noticeable difference on the bottom line by increasing revenue.

ModCloth, a vintage apparel and accessory retailer, utilizes paid search as one of its key marketing strategies, advertising on Google, Yahoo! and Bing in more than five countries. Toward the end of 2010, Teresa Rockovich, Search Engine Marketing Specialist, ModCloth, was looking to significantly grow the paid search effort, but she understood the then current manual process was not going to accomplish that goal.

"We were basically in a period of hyper growth, and we were really trying to figure out a strategic way to scale our paid search campaign," said Rockovich. "Knowing that keyword expansion and bid and budget management were kind of the two priorities in paid search management, we were looking for some type of technology that would allow us to scale and optimize and grow very efficiently and effectively."

This case study looks at how ModCloth selected a vendor to begin automating its paid search marketing efforts, and how the company dramatically expanded the targeted keywords. Plus, learn how this process allowed ModCloth to test elements of its paid search and improve the entire process, resulting in a revenue increase of 22% from paid search.

CAMPAIGN

The effort in this article covers how ModCloth went from a very labor-intensive and manual paid search process to a more efficient and automated model over a short period of time.

Step #1. Understand the manual process will not meet long-term goals

In late 2010, even though paid search was a major piece of ModCloth’s marketing efforts, the process was very manual.

The company was managing around 150,000 keywords explicitly at the keyword level for bids, and the team was using only free tools for management.

"The keyword expansion process and appending, tracking parameters and auditing -- all of that was very manual labor," explained Rockovich. "It took a lot of time and energy, and I felt like that time and energy could be better spent looking at new product offerings and how we wanted to identify the areas we wanted to compete in the paid search space."

She added that optimization was a long process that involved a one-person team uploading ad copy, completing the analysis and pausing different pay-per-click campaigns.

Maintaining a healthy score for the nonbranded set of keywords was an ongoing challenge, even though budgets were not an issue because the paid search was creating a solid profit margin.

Step #2. Select a paid search vendor

Rockovich said the team decided to find a paid search vendor to improve the entire process and remove some of the burden from the person maintaining the campaigns.

During the selection process, a number of criteria were important:
  • Algorithms with intelligence in bidding up or down

  • Robust data analysis

  • Efficient in day-to-day campaign management

  • Ability to expand campaigns

  • Ability to apply bid rules to thousands of keywords on an automated basis

  • Automated ad uploader tool

Rockovich and her direct manager coordinated face-to-face meetings, conducted demos from different vendors, and even had on-site visits from the finalists before making the final decision.

Step #3. Get information technology involved in implementation

"We chose to integrate during a pretty hectic period -- Q4 -- when there is so much going on internally, and we were moving at a very fast pace," stated Rockovich. "We chose to start integrating in November of 2010, and then there was a month of our engineers adding pixels and making sure everything was working correctly with the vendor’s tech team."

The pixels were placed on the order confirmation pages so the marketing team could match what paid search keywords assisted in transactions to help set budget and bidding decisions on PPC campaigns.

Rockovich said getting ModCloth’s IT department involved in implementing the new software made the process "fairly smooth."

Step #4. Begin project planning and keyword expansion

With a vendor selected and the new software integrated into ModCloth’s website, it was time to create a project plan for the new paid search process, as well as significantly expand the keywords used in the effort.

The project plan involved determining objectives quarter by quarter, beginning with rebuilding top-of-the-funnel traffic for both branded and nonbranded traffic.

Rockovich said these objectives also included creating customized strategies for low-, medium- and high-risk keyword groups, as well as growing long-tail keywords because that was a space where ModCloth could capture a lot of low volume, but highly relevant traffic.

Other areas of interest included international dynamic branded campaigns in Australia, Canada and the United Kingdom.

"We laid out a project plan, which was just a series of tasks associated with some larger objectives and milestones for each quarter," said Rockovich.

She added, "We ensured our margins stayed in a very healthy spot, and we were able to manage our campaigns profitably instead of just driving traffic to the site."

In terms of keyword expansion, ModCloth went from 150,000 active keywords to around 700,000 over the first two months of the effort. This expansion was mostly from adding long-tail keywords and adding modifiers that were relevant to the company’s products.

Step #5. Make testing and optimization part of the process

With the software tools available to the marketing team, ModCloth began regularly conducting relatively simple A/B split tests on different elements of its paid search program, including ad copy and landing pages.

"We have been doing more landing page testing, which has proven to be really useful in terms of how we are able to drive people to filtered pages, or dynamic pages, or pages that are extremely relevant and targeted to what [Web visitors] query," said Rockovich.

Step #6. Implement automated bidding and reporting

"Automated bidding is something we have been kind of toying with for a while. I think our limitation internally was our account structure and [how] we had things set up," stated Rockovich.

She added it became a priority to separate high-volume from lower-volume campaigns, and to change the overall campaign structure so each account -- from accessories to apparel to décor -- had different objectives and goals.

That new structural management allowed the team to integrate automated bidding in the paid search efforts. Rockovich stated the paid search team utilizes alerts and automated reports to track where the activity and volume is happening and to follow the outcome of the automated bidding.

This automation helped the team by providing more time for strategic thought, and taking some of the grunt work out of the process.

She said, "We didn’t have to spend our time and energy gathering, collecting, manipulating and formatting data."



RESULTS


In less than two years, going from a largely manual paid search process to a software-driven automated approach has led to impressive results for ModCloth:
  • 22% increase in paid search revenue

  • 500% increase in managed keywords

  • 14% reduction in cost-per-click

  • 30% reduction in time spent on reporting and bidding

Rockovich said, "We are going through a period of really hyper growth, so the scalability of this strategy (is important) and making sure that we don’t fall behind [compared to] other advertising or marketing channels."

She added this effort is improving ModCloth’s paid search by ensuring the PPC effort is in line with the company’s overall organic growth, the strategy and planning is long term, the effort is expanding ModCloth’s nonbranded visibility, and the entire process continues to increase efficiencies in paid search.

Creative Samples

  1. Paid search ad example

  2. Automated alert example

Sources

ModCloth

Marin Software – ModCloth’s paid search vendor

Related Resources

Search Marketing: SEO how-to content and videos earn 9% conversion rate

Your Free Excerpt from the 2012 Search Marketing Benchmark Report

Campaign: Marketer learns from unsuccessful campaign to deliver 75% increase in sales

PPC Advertising: How to track AdWords and Facebook ads in 5 steps

7 Signs That You’re Overvaluing Search Engine Optimization

Optimization 101: How to get real results from A/B testing

PPC Mysteries Revealed: 7 Answers to your pressing PPC questions

See Also:

Comments about this Case Study

Jul 22, 2012 - David of David says:
What type of automation or software, ModCloth is using ? I tried a couple but not yielding any good results. Probably my implementation strategy or the selection of software. Curious to know. Thanks.


Jul 25, 2012 - Adrian Rowe of Red C Marketing says:
I found this case study really interesting, but I was a bit alarmed to see that the increase from 150k to 700k keywords was seen as a positive thing. You couldn't possibly create and optimise 700k ads -so I'm guessing that Quality Scores would be poor in many cases. How has this challenge been overcome by ModCloth?


Jul 30, 2012 - Theresa Rockovich of ModCloth says:
David, In response to your question regarding the type of software we are using, it includes Marin Software (used for budget/bid management, keyword tracking, keyword generation, ad copy changes, etc) and several analytics packages that allow us to identify a baseline "source of truth" for our KPIs. The automation piece of our paid search program includes a set of bid rules that is applied to various keyword groups based on historical performance and evergreen vs. seasonal trends. By implementing automated bid rule technology on low risk keyword sets, we are able to focus our concentration on high risk, high impact terms.



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