PPC - Handling New Competitors

[Breaking Good]

I just wondered what your views were on the following:

For our most profitable campaign, we have regularly been in the top 3 positions, had decent enough quality scores ranging from 6-8 and good levels of conversions.

However over the last week, 2 competitors (who are bigger players than us in our industry) have entered the auction for the keywords in this particular campaign. This has resulted in the following:

1) Ave position has dropped for most keywords outside of the top 3
2) CPC has increased by quite a bit - around 50% in most cases
3) CTR is not too bad actually but has decreased as you'd expect
4) Most importantly - conversions have dropped dramatically

We're not interested in getting into a price war with them as they will have a bigger budget to spend than us. To tackle this, my logic was to analyse our product/offer and compare it to theirs. I feel ours is better (price and quality wise) so I was expecting this to work to our advantage. My thinking was that if a searcher clicks on 3 ads (ours and our 2 new competitors), our offer would be more appealing and it could actually increase our conversions compared to previously (where they might have clicked on our ad and 2 other competitors whose offers are better than ours)

So right now, we're getting decent enough CTR (with a higher CPC) and not getting the same conversions because presumably the 2 new competitors are taking this business. It would be interesting to hear how you'd approach this?

Thanks

 

[John_Adams]

This is a tricky one. Are the two competitors brand names that people are more likely to have heard of?

I haven't found the actual text in the marketing can change those CTR or conversion metrics as much as spend.

I would approach in one of two ways:

1. Enter that price war and see if you still have a CPA you can live with.
2. Just put in extra work: ramp up spend in areas with higher conversion for you, geographical or mobile or time of day? Build out the long tail as much as possible so that you are mopping up extra sales here and there. Are you broad matched or phrase? Is there something there you can do to increase position with the keyword which work best for you?

 

[Jason L]

To tackle this, my logic was to analyse our product/offer and compare it to theirs.

Are you doing this on your landing page or in the ad copy? Although you are limited in the ad copy, it would be good if you can stress some of your unique selling points/points of difference before the user even clicks through to your site. Then make sure you back it up with the content on the landing page. This could be speed of delivery / bulk discounts / quality of product / awards / returns policy etc etc.

Also, are you doing retargeting?

Also, consider bing ads too?

 

[Breaking Good]

Thanks for the replies guys

John - We have a mixture of broad, phrase and exact. Part of the problem is that the 2 new competitors, it seems, have come in and just broad matched everything. They aren't targeting different keywords with different ads etc. They've gone for 1 ad which encompasses everything and it's really hard to find long tails that still don't compete with something they've broad matched. One of the brands is a well known entity so that is an issue too. Even though our product is slightly cheaper, their brand name probably more than makes up for the price differential. However I think you are correct, we will have to look at doing more work to see if we can get past this and if not, might just enter the bidding war to see if the CPA is worth it or not.

Jason - I meant we did that on the landing page however we have looked at the ad copy too. As I said above, they have a generic ad for everything which gives us an advantage in that sense. I am guessing our quality score is higher than theirs our CPC is probably lower than theirs but they're probably quite happy to sit there in the top positions as their budget will be significantly higher. In our industry, clients usually get quotes from 3-5 suppliers before making a purchase decision. Our "conversions" are just enquiry forms because of the items we sell, we have to assess whether we can print the client's logo or not etc. This is what makes it a bit confusing as we expect searchers to enquire from say the top 3 positions. We're still getting clicks but no longer getting enquiries which logically, to me, means our website/product/landing page is not as appealing as the new competitors (even though we believe it is but we must be incorrect with this thinking)

We are doing re-targeting but to be honest, haven't looked a great deal into it. What would you say are the main things to focus on with re-targeting?

We've (perhaps ignorantly) never used Bing ads as it just didn't seem the search volume was there. Have you found Bing to be useful?

 

[Jason L]

Re: Bing, yes as you say search volumes are much less - so it may not be worth splitting campaigns / ad groups out as much as on Google. BUT, I do find that the traffic is sometimes more engaged and produces a better conversion. Also, there can be less competition as most businesses are focused on AdWords.

 

[Shopclicks]

Hi. How is your organic ranking? If you think the competitors are there for the long term, your money and time may be better spent on seo for your website. This may also improve conversions through your paid ads.

 

[garyk]

think what John was hinting at is if they are well known names you could actually bid on their names as keywords. If they are well known and have registered them as trademarks with G you won't be able to use their name in your ad but could bid on their brand name as a keyword.

 

[directmarketingadvice]

My thinking was that if a searcher clicks on 3 ads (ours and our 2 new competitors), our offer would be more appealing and it could actually increase our conversions compared to previously (where they might have clicked on our ad and 2 other competitors whose offers are better than ours)

A more realistic way of looking at it would be that the 2 new competitors are picking off a lot of low hanging fruit before people even get to you.

Two fundamental principles of adwords are:

#1: Ads on the left tend to get 10-20 times the clickrate of ads on the right.

#2: Adwords basically comes down to who is best at turning ad impressions into money.

So, if you have competitors leap-frogging you, you should look at improving your ability to turn impressions into money. 2 of the easiest ways to do that are:

(A) Increase the conversion rate of your website by split-testing your pages.

(B) Build a better back end onto your business so you have a higher customer lifetime value.

Both of those things will increase the value of a visitor to your website, allowing you to increase your bids.

Hope this helps,

Steve

 

[leveldisc]

Hi there,

A couple of points occur to me (actually loads do, but I'll stick to a couple).

1. Don't enter a price war, enter an ad-rank war.
You said your QS is 6-8, which is OK, but no better than that. It suggests to me there are definitely areas in your AdWords offering that could be improved. You really have to attack the long-tail and get strictly targeted ads and keywords, never stop creating new ad-groups targeting long-tails. That is what they are doing with their current broad match strategy. Also, are you exploiting ALL ad-extensions.

2. If the conversion rate has dropped, I wouldn't necessarily put it down to the quality of your product/landing page, but more down to the quality of visitor. I.e. researchers, not buyers. Someone mentioned retargeting, it's hugely important now. Look into RLSA campaigns - create mutually exclusive campaigns based on audience and focus on previous visitors. They are the ones nearer the end of the funnel, so up your CPC for them, get them back to site to convert.

3. Consider getting help in (obviously I would say that). There's always, always another level it can be taken to. I can almost guarantee that you will not exploiting all the functionality, that could gain you a competitive advantage.

Cheers
Nick